Annual Report • Oct 13, 2022
Annual Report
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Mobeus Income & Growth 4 VCT plc A Venture Capital Trust Annual Report & Financial Statements for year ended 31 December 2021 Mobeus Income & Growth 4 VCT plc (the “Company”) is a Venture Capital Trust (“VCT”) advised by Gresham House Asset Management Limited (“Gresham House”, “Investment Adviser”) investing primarily in established, unquoted companies. The Objective of the Company is to provide investors with a regular income stream by way of tax-free dividends and to generate capital growth through portfolio realisations which can be distributed by way of additional tax-free dividends, while continuing at all times to qualify as a VCT. DIVIDEND POLICY The Company seeks to pay dividends at least annually out of income and capital as appropriate, and subject to fulfilling certain regulatory requirements. Contents Financial Highlights 1 Chairman’s Statement 2 Strategic Report 6 - Objective 6 - Summary of Investment Policy 6 - The Company and its Business Model 6 - Summary of VCT Legislation 6 - Performance and Key Performance Indicators 8 - Investment Adviser’s Review 12 - Principal Investments in the Portfolio at 31 December 2021 by valuation 20 - Investment Portfolio Summary 24 - Key Policies 30 - Investment Policy 30 - Stakeholder Engagement and Directors’ Duties 31 - Principal and emerging risks, management and regulatory environment 34 Reports of the Directors 37 - Board of Directors 37 - Directors’ Report 38 - Corporate Governance Statement 42 - Report of the Audit Committee 45 - Directors’ Remuneration Report 47 - Statement of Directors’ Responsibilities 51 Independent Auditor’s Report 52 Financial Statements 57 Information for Shareholders 80 - Shareholder Information 80 - Notice of the Annual General Meeting 82 - Glossary of terms 85 - Corporate Information 86 Results for the year ended 31 December 2021 Net assets: £92.79 million Net asset value (“NAV”) per share: 111.27 pence Net asset value (“NAV”) total return 1 per share of 42.7%. Share price total return 1 per share of 50.4%. Dividends paid and declared in respect of the year totalled 9.00 pence per share. Cumulative dividends paid 1 to date stand at 143.20 pence per share. £6.23 million was invested into four new growth capital investments and nine existing portfolio companies during the year. Strong portfolio performance generated £25.71 million of unrealised gains in the year. The Company realised investments totalling £12.23 million of cash proceeds and generated net realised gains in the year of £4.19 million. Cumulative total return 1 per share (NAV basis) The longer term trend of performance on this measure is shown in the chart below:- Cumulative total return per share (NAV basis) 160 150 130 180 190 200 210 220 230 240 250 170 140 120 110 100 80 90 60 70 50 30 10 40 20 0 31/12/2020 31/12/2021 Pence per share 124.20 74.90 134.20 81.50 139.20 111.27 187.77 189.99 199.10 215.70 101.20 86.57 105.20 84.79 250.47 31/12/2017 31/12/2018 31/12/2019 Net Asset Value Cumulative dividends paid to date 1 - Definitions of key terms and alternative performance measures shown above and throughout this report are shown in the Glossary of terms on page 85. 2 - These figures exclude the impact of a dividend of 4.00 pence per share paid after the year-end on 7 January 2022. Payment of this dividend will reduce the Company’s NAV per share and increase cumulative dividends paid to date by 4.00 pence per share. The chart above shows the recent past performance of the original funds raised in 1999. The original subscription price was 200 pence per share before the benefit of income tax relief. Subscription prices from subsequent fundraisings and historic performance data from 2008 are shown in the Investor Performance Appendix on the Company’s website, www.mig4vct.co.uk, where they can be downloaded by clicking on “table” under “Reviewing the performance of your investment” on the home page. On 1 July 2006, Mobeus Equity Partners LLP became sole Investment Adviser to the Company. The Investment Adviser novated to Gresham House on 1 October 2021. The cumulative total return per share (NAV basis) at this date was 122.51 pence. 1 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Financial Highlights Financial Highlights 2 2 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Change in Management Arrangements Following the communication to all Shareholders sent by the Chairmen of each of the VCTs advised by Mobeus Equity Partners LLP (“Mobeus”) on 10September 2021, I am pleased to report the sale of the Mobeus VCT fund and investment management business to a subsidiary of Gresham House plc completed with eect from 30 September 2021. As a result, the Mobeus-advised VCTs’ investment advisory arrangements have been novated from Mobeus to Gresham House. The Board believes that the agreement to the novation of the investment advisory arrangements was in the interests of the Mobeus VCTs’ Shareholders and the Company will benefit from scale advantages, continuity, portfolio diversification and investment in capability at Gresham House. Clive Austin and Trevor Hope, the two leading partners involved with managing the Mobeus VCTs’ investment portfolios, remain responsible for the investment, portfolio, and fund management of the Mobeus VCTs, alongside the investment and operations teams. I am pleased to present the Annual Report of Mobeus Income & Growth 4 VCT plc for the year ended 31 December 2021. Overview At the time of the previous Annual Report, I was able to report on the Company’s robust performance over a period of material global uncertainty and market volatility. Twelve months later, I am pleased to say that it has been a year of continued strong trading and portfolio value growth to 31 December 2021. The Company achieved an e xceptional NAV total return per share of 42.7% for the year (2020: 22.2%). Although the period under review was marked by many challenges, the portfolio proved to be resilient and adaptive in facing them. The threat from global supply issues in logistics, materials and labour resulting from COVID-19 disruption is expected to remain for some months, and the unfolding geopolitical events relating to the war in Ukraine adds to the uncertainty. However, for the most part, trading for your Company’s largely service and software- based portfolio has not been significantly impacted to date. Despite Brexit concerns and considerable COVID-19 related restrictions across the year, M&A activity has remained buoyant and the Investment Adviser continues to see a healthy deal flow. The Company deployed £6.23 million of investment capital and generated £12.23 million in realisation proceeds from investment activity during the year. In that time, it added four new investments to its portfolio, provided follow-on funding into nine existing portfolio companies and supported the admission to AIM of a further two of its investments. Shareholders should note that the portfolio now features some value concentration in two of its stocks: Virgin Wines and Preservica (10.2% and 11.9% of net assets respectively as at 31 December 2021), the former of which is listed on AIM. With this additional AIM exposure, there is the natural potential for a higher level of volatility in the value of the Company’s portfolio and subsequent NAV returns. Following an initial uplift in value following two IPOs in March 2021, the value of the quoted assets has been volatile over the rest of the year as the companies were impacted by unfavourable trading announcements and negative market sentiment. The remainder of the portfolio largely demonstrated strong performance and growth over the same period. We are witnessing a clear demonstration of the benefits of what is now a diverse and maturing portfolio. Following the 2015 VCT rule change, the revised investment strategy is now bearing fruit as more of these young growth investments are starting to achieve significant scale and value. This view has been validated by third-party investment transactions which have brought significant upratings in values of portfolio businesses, such as MPB, MyTutor and Bella & Duke, whilst the Company has also been able to provide support for the scaling of investments such as Preservica, to which the Company provided significant further funding in November 2021. For further information on value movements, see the Investment Adviser’s Review on pages 12 to 18. The Company launched an Oer for Subscription on 20 January 2022 alongside the three other Mobeus VCTs (“Oers”) and the Board was very pleased to see that unprecedented demand meant that the target of £7.5 million was reached in less than 24 hours, at which point no further applications were accepted. It was gratifying that approximately half of the applications received were from existing Shareholders in the Company. The subsequent allotment of shares has now bolstered the Company’s capital to deploy in new and exciting investment opportunities. Performance The Company’s NAV total return per share was 42.7% for the year to 31 December 2021 (2020: 22.2%) being the closing NAV per share of 111.27 pence plus 5.00 pence of dividends paid in the year, divided by the opening NAV per share of 81.50 pence. The share price total return was 50.4% (2020: 12.9%). The dierence between the share price and NAV total returns arises principally due to the timing of NAV announcements which are usually made on a date following the date to which they relate and is explained more fully under Performance in the Strategic Report on pages 8 to 11. The positive NAV total return for the year was principally the result of significant unrealised gains in the value of investments still held, as well as realised gains achieved via exits and partial realisations of several portfolio companies. At the year-end, the Company was ranked 6th out of 38 Generalist VCTs over five years and 8th out of 31 Generalist VCTs over ten years, in the Association of Investment Companies’ analysis of NAV Cumulative Total Return. Shareholders should note that the AIC’s rankings are based on the latest available published NAVs and therefore do not reflect the NAV per share increase achieved by the Company up to 31 December 2021. For further details on the performance of the Company, please refer to the Strategic Report on pages 8 to 11. Chairman’s Statement Chairman’s Statement 33 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Dividends The Board continues to be committed to providing an attractive dividend stream to Shareholders and is pleased to have announced a second interim dividend of 4.00 pence per share, which was paid on 7 January 2022 to Shareholders on the r egister on 10 December 2021. This second interim dividend, together with a first interim dividend of 5.00 pence per share paid on 6 August 2021 to Shareholders on the register on 9 July 2021, brings dividends paid and proposed in respect of the financial year ended 31December 2021 to 9.00 pence per share. To date, cumulative dividends paid since inception total 143.20 pence per share. The Company has now met or exceeded the Board’s dividend target of paying at least 4.00 pence per share in respect of each financial year over the last twelve years. As Shareholders have been advised previously, the gradual move of the portfolio to younger growth capital investments as well as the realisations of older, more mature companies that have provided a good income yield, are likely to make dividends harder to achieve from income and capital returns alone in any given year. The Board aims to distribute realised profits (such as income and gains from realisations) achieved in a year as dividends but notes that a reduction in income received by the Company was seen during the year. The Board, therefore, continues to monitor the sustainability of the annual dividend target. Shareholders should also note that there may continue to be circumstances where the Company is required to pay dividends in order to maintain its regulatory status as a VCT, for example, to stay above the minimum percentage of assets required to be held in qualifying investments. Such dividends paid in excess of net income and capital gains achieved will cause the Company’s NAV per share to reduce by a corresponding amount. Dividend Investment Scheme The Company’s Dividend Investment Scheme (“DIS”) provides Shareholders with the opportunity to reinvest their cash dividends into new shares in the Company at the latest published NAV per share. New VCT shares attract the same tax reliefs as shares purchased through an Oer for Subscription. As part of the 5.00 pence per share dividend paid on 6 August 2021, 695,052 Ordinary shares were allotted to participants of the DIS at a price of 92.24 pence per share. For the further 4.00 pence per share dividend declared for the year and paid after the year-end on 7 January 2022, 508,732 Ordinary shares were allotted at a price of 99.57 pence per share to DIS participants. Shareholders wishing to take advantage of the scheme for any future dividends can join the DIS by completing a mandate form available on the Company’s website, under the ‘Dividends’ heading, at: www.mig4vct.co.uk., or alternatively, Shareholders can opt-out by contacting Link Group, using their details provided under Corporate Information on page 86. Investment portfolio The portfolio movements across the year were as follows: 2021 £ 2020 £ Opening portfolio value 41.68 38.54 New and further investments 6.23 4.80 Disposal proceeds (12.23) (14.97) Net realised gains 4.19 4.44 Valuation movements 25.71 8.87 Portfolio value at 31 December 65.58 41.68 During the year, the Company invested a total of £6.23 million into four new and nine existing portfolio companies (2020: £4.80 million; four new, four existing). New investments totalling £2.53 million were made into Vivacity Labs (an artificial intelligence and Urban Trac Control (“UTC”) system), Caledonian Leisure (a provider of UK experience and leisure breaks), Legatics (a SaaS LegalTech software business) and Vet’s Klinic (a veterinary clinic roll out). Additional funding of £3.70 million was provided across nine existing portfolio companies, including Parsley Box (an ambient meals provider), Bleach London (hair colourants brand), Arkk Consulting (a financial reporting service provider), Bella & Duke (a frozen raw dog food provider), Tapas Revolution (a Spanish restaurant chain), MyTutor (an online tutoring marketplace), Andersen EV (a producer of premium EV chargers), ActiveNav (a provider of enterprise-level file analysis software) and Preservica (a proprietary digital archiving software provider). The Company generated £6.02 million in proceeds from the realisation of its investments in Proactive Group, Vian Marketing Limited (trading as Red Paddle) and Omega Diagnostics during the year. In addition to £3.21 million of proceeds received from the partial realisations of Virgin Wines and Parsley Box (upon the admission of their shares to AIM as mentioned previously), the partial realisations of MPB Group and MyTutor, together with loan repayments and other capital receipts of £3.00 million, the Company generated total proceeds of £12.23 million in the year to 31 December 2021. The portfolio has performed very strongly over the Company’s financial year. The overall value increased by £29.90 million (2020: £13.31 million), or 71.8% (2020: 34.5%) on a like-for-like basis, compared to the start of the year. This increase comprised a net unrealised uplift in portfolio valuations of £25.71 million and £4.19 million in net realised gains over the year. The portfolio was valued at £65.58 million at the year-end (2020: £41.68 million). Within net realised gains, the principal contributors were the full realised gains of Proactive Group and Red Paddle (total of £2.48 million). Total proceeds received over the life of investments in Proactive Group (£1.94 million) and Red Paddle (£4.84 million) generated multiples of cost of 2.6x (IRR: 33.0%) and 5.4x (33.2%) respectively (including £0.40 million received in deferred proceeds from Red Paddle after the year-end. Further realised gains were also generated from the partial realisations of Parsley Box (£0.54 million), MPB Group (£0.41 million) and MyTutor (£0.38 million). The portfolio’s valuation at the year-end reflects the continued beneficial impact of changes in UK consumer and business behaviour brought on by the pandemic and lockdown restrictions, particularly for those businesses operating direct-to-consumer models. This also underscores the success of portfolio companies in adapting to a rapidly changing environment, becoming more ecient and diversifying their product oering in order to take advantage of opportunities that have arisen. Since the year-end, in February 2022, the Company made a new investment into Proximity Insight, a retail software provider. This is the first investment made since the acquisition of the Mobeus VCT investment advisory business by Gresham House and the Company’s investment was made alongside the other VCTs advised and managed by Gresham House (the three other Mobeus VCTs and the two Baronsmead VCTs). In accordance, with the agreed allocation policy, the Company contributed £0.61 million towards a total Gresham House supported investment of £5.00 million. The flotation of both Virgin Wines and Parsley Box on the AIM market in March 2021 resulted in significant uplifts in valuation, as well as generating an element of realised returns. As part of the Virgin Wines transaction, the Company received repayment of its remaining loan stock, leaving Virgin Wines ungeared and, as part of the IPO of Parsley Box, the Company realised part of its equity holding, securing a 4.0x return on the cost of the shares sold. As was expected, these quoted stocks are subject to stock market movements and have brought an additional level of volatility to a portion of the portfolio. In the second half of the year, Parsley Box in particular saw a subsequent value decline in the face of changing market sentiment Chairman’s Statement 4 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Chairman’s Statement and an announcement of results which were below market expectations. Virgin Wines has experienced similar volatility, but had returned to its float price at the year-end. Your Board remains confident in the future prospects of both these AIM quoted businesses. In contrast, there have been substantial unquoted valuation increases, supported by a sizeable further investment from the Mobeus VCTs in the case of Preservica, and by third-party investment transactions in the cases of MyTutor, MPB and Bella & Duke. The portfolio achieved a net increase in unrealised valuations of £25.71 million for the year in investments still held, with the biggest value increases in Preservica, Virgin Wines and Media Business Insight partially oset by modest valuation falls at Parsley Box, Andersen EV and Bleach London. For further information on portfolio valuation movements, see the Investment Adviser’s Review on page 15. Although a minority of portfolio companies have been disadvantaged by the COVID-19 pandemic, principally as a result of sta shortages, closure of retail sites and interrupted supplies, these factors have not aected any of the businesses within the portfolio’s top ten investments by value. Many of those that were negatively aected have also since seen value uplifts. Further details of the Company’s investment activity and the performance of the portfolio are contained in the Investment Adviser’s Review and the Investment Portfolio Summary on pages 24 to 29. Liquidity & Fundraising Cash and cash equivalents held by the Company as at 31 December 2021 amounted to £24.53 million, or 26.4% of net assets. On 20 January 2022, the Company launched an oer for subscription of £7.5 million, alongside Oers from the other Gresham House-advised VCTs. As previously stated in my Overview on page 2, the Oers experienced unprecedented demand such that the Company received subscriptions amounting to the full amount sought within 24 hours of launching and were then unable to take any further applications from the middle of 21 January 2022. In accordance with the Oers’ prospectus, the allotment of all shares under the oer took place on 9 March 2022 with cleared monies, and generated net funds (after costs) of £7.27 million. In consideration of the environmental factors and cost savings, the Company elected to release the Prospectus digitally, with hard copies available on request, and invite applications to be submitted online via a digital portal. This method provided increased security and eciency in the application process and the Board strongly recommends that Shareholders wishing to subscribe to any future oers opt to submit their applications via the online facility. Share buy-backs During the year, the Company bought back and cancelled 1,309,349 of its own shares (2020: 1,245,646), representing 1.6% of the shares in issue at the beginning of the year (2020: 1.9%), at a total cost of £1.23 million, inclusive of expenses (2020: £0.73 million). It is the Company’s policy to cancel all shares bought back in this way. The Board regularly reviews its buyback policy and currently seeks to maintain the discount at which the Company’s shares trade at no more than 5% below the latest published NAV. Shareholder Communications & Annual General Meeting May I remind you that the Company has its own website which is available at: www.mig4vct.co.uk. The Investment Adviser held a virtual Shareholder Event on the morning of 25 February 2022. A presentation was provided by representatives of each of the Mobeus VCT Boards as well as the Investment Adviser and the key executives of two portfolio companies, Virgin Wines and Media Business Insight. A recording of the event is available here: https://mvcts.connectid.cloud/ . Your Board is pleased to be able to hold the next Annual General Meeting (“AGM”) of the Company in person at 11.30 am on Tuesday, 17 May 2022 at the oces of Shakespeare Martineau, 6th Floor, 60 Gracechurch Street, London, EC3V 0HR. A webcast will also be available at the same time for those Shareholders who cannot attend in person. However, please note that you will not be able to vote via this method and so are encouraged to return your proxy form before the deadline of 11:30 am on 13 May 2022. Information setting out how to join the meeting by virtual means will be shown on the Company’s website. For further details, please see the Notice of the Meeting which can be found at the end of this Annual Report & Financial Statements, on pages 82 to 84. Board Composition On 6 December 2021, the Company announced Helen Sinclair’s retirement as a Non-Executive Director of the Company, on 28 February 2022. The Board would like to thank Helen for her significant contribution and dedication during her directorship, particularly in her role as Chair of the Investment Committee and wish her well for the future. The Board, comprised four directors prior to Helen’s retirement and careful consideration was given to ensuring that the Board was well positioned to continue to fulfill its role in the direction of the Company following her retirement. On 1March 2022, Chris Burke was appointed a member of both the Audit Committee and the Nomination and Remuneration Committee. He was appointed Chair of the Investment Committee on the same date. After considering and reviewing its composition, the Board agreed that the remaining directors have the breadth and depth of relevant knowledge and experience plus the appropriate skill sets such that the recruitment of another Non-Executive Director is not necessary at the present time. However, the directors are committed to increasing diversity of representation and, when any further appointment to the Board is considered, will take this fully into account alongside the skills required to serve Shareholders well in the specialist VCT sector. Fraud Warning We have been made aware of a number of Shareholders being contacted in connection with sophisticated but fraudulent financial scams which purport to come from the Company or to be authorised by it. This is often by a phone call or an email usually originating from outside of the UK, claiming or appearing to be from a corporate finance firm oering to buy your shares at an inflated price. The Board strongly recommends Shareholders take time to read the Company’s Fraud warning section, including details of who to contact, contained within the Information for Shareholders section on pages 80 and 81. Environmental, Social and Governance (“ESG”) The Board and the Investment Adviser believe that the consideration of environmental, social and corporate governance (“ESG”) factors throughout the investment cycle will contribute towards enhanced Shareholder value. Following the novation of the investment advisory agreement to Gresham House, who have a dedicated team which is focused on sustainability, the Board views this as an opportunity to enhance the Company’s existing protocols and procedures through the adoption of the highest industry standards. Under the new enlarged investment team, each investment executive is responsible for their own individual ESG objectives in support of the wider overarching ESG goals of the Investment Adviser. For further details, Gresham House published its inaugural Sustainable Investment Report in 2021, which can be found on its website at: www.greshamhouse.com. Your Board would like to assure Shareholders that ESG matters form a key consideration in investment decisions. The FCA reporting requirements consistent with the Task Force on Climate-related Financial Disclosures commencing from 1 January 2021 do not currently apply to the Company but will be kept under review, the Board being mindful of any recommended changes. 5 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Outlook The year under review can be characterised as a continuation of the trying environment created for businesses in light of the COVID-19 pandemic and Brexit in 2020. However, much in the same way that we were able to report on its remarkable recovery one year ago, the Company has continued to achieve success in creating opportunities and building on them. This has been exemplified by strong trading performances and value growth across the portfolio and in exceeding expectations for the level of investment activity. Whilst the immediate threat of further lockdowns from new variants of the virus appears to have lessened to some extent as we move into 2022, we anticipate that the indirect eects of the COVID-19 pandemic and Brexit will continue to impact the UK economy and bring an element of uncertainty for some time to come, most notably in the form of supply chain and inflationary pressures. More recently, the distressing invasion of Ukraine has sent shockwaves through global financial markets. Whilst the portfolio has limited direct exposure to Eastern Europe, Russia’s action has introduced a disruptive factor the impact of which cannot yet be fully measured. Nonetheless, your Board considers that your Company is well positioned to adapt as necessary. The Board was very pleased to have witnessed such a positive response to the launch of the Company’s Oer for subscription in January and would like to thank all Shareholders for their interest in applying for the Company’s shares. The Board has been satisfied with the Company’s ability to maintain a high rate of investment in quality opportunities over the year. It believes that the additional fundraising will provide the necessary capital to continue to create value growth for Shareholders in what has, to date, proven to be a successful investment strategy. I would like to take this opportunity once again to thank all Shareholders for your continued support and to extend a warm welcome to new Shareholders. Jonathan Cartwright Chairman 6 April 2022 Chairman’s Statement Company Objective and Business Model Objective The Objective of the Company is to provide investors with a regular income stream by way of tax-free dividends and to generate capital growth through portfolio realisations which can be distributed by way of additional tax-free dividends, while continuing at all times to qualify as a VCT. Summary of Investment Policy The Company’s policy is to invest primarily in a diverse portfolio of UK unquoted companies. Investments are generally structured as part loan and part equity in order to receive regular income, to generate capital gains upon sale and to reduce the risk of high exposure to equities. To spread the risk further, investments are made in a number of businesses across dierent industry sectors. The Company’s cash and liquid resources are held in a range of investments which can be of varying maturities, subject to the overriding criterion that the risk of loss of capital be minimised. The Company seeks to make investments in accordance with the requirements of VCT legislation. A summary of this is set out below. The full text of the Company’s Investment Policy is available on page 30 of this Strategic Report. The Company and its Business Model The Company is a Venture Capital Trust. Its Objective and its Investment Policy are designed to ensure that the Company continues to qualify and is approved as a VCT by HM Revenue & Customs (“HMRC”) whilst maximising returns to Shareholders from both income and capital. Summary of VCT Legislation To maintain its status as a VCT, the Company must meet a number of conditions, the most important of which are that: the Company must hold at least 80%, by VCT tax value 1 , of its total investments (shares, securities and liquidity) in VCT qualifying holdings, within approximately three years of a fundraising; all qualifying investments made by VCTs after 5 April 2018, together with qualifying investments made by funds raised after 5 April 2011 are, in aggregate, required to comprise at least 70% by VCT tax value in “eligible shares”, which carry no preferential rights (save as may be permitted under VCT rules); no investment in a single company or group of companies may represent more than 15% (by VCT tax value) of the Company’s total investments at the date of investment; the Company must pay sucient levels of income dividend from its revenue available for distribution so as not to retain more than 15% of its income from shares and securities in a year; the Company’s shares must be listed on a regulated European stock market; non-qualifying investments cannot be made, except for certain exemptions in managing the Company’s short-term liquidity; VCTs are required to invest 30% of funds raised in an accounting period beginning on or after 6 April 2018 in qualifying holdings within 12 months of the end of the accounting period; and the period for reinvestment of proceeds on disposal of qualifying investments is 12 months. To be a VCT qualifying holding, new investments must be in companies: which carry on a qualifying trade; which have no more than £15 million of gross assets at the time of investment and no more than £16 million immediately following investment from VCTs; whose maximum age is generally up to seven years (ten years for knowledge intensive businesses); that receive no more than an annual limit of £5 million and a lifetime limit of £12 million (for knowledge intensive companies the annual limit is £10 million and the lifetime limit is £20 million), from VCTs and similar sources of State Aid funding; and that use the funds received from VCTs for growth and development purposes. In addition, VCTs may not: oer secured loans to investee companies, and any returns on loan capital above 10% must represent no more than a commercial return on the principal; and make investments that do not meet the ‘risk to capital’ condition (which requires a company, at the time of investment, to be an entrepreneurial company with the objective to grow and develop, and where there is a genuine risk of loss of capital). 1 VCT tax value means as valued in accordance with prevailing VCT legislation. The calculation of VCT tax value is arrived at using tax values, based on the cost of the most recent purchase of an investment instrument in a particular company, which may dier from the actual cost of each investment shown in the Investment Portfolio Summary on pages 24 to 29. 6 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Strategic Report Strategic Report 7 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Strategic Report The Company and its business model The Company is a Venture Capital Trust and its Objective and Investment Policy are designed to ensure that it continues to qualify as a VCT, and continues to be approved as such by HM Revenue & Customs, whilst maximising returns to Shareholders from both income and capital. A summary of the most important rules that determine VCT approval is contained in the panel headed “Summary of VCT Regulation” on page 6. As a fully listed company on the London Stock Exchange, the Company is required to comply with the listing rules governing such companies. The listing also fulfils a requirement for VCT approval and to maintain its VCT status. The Company is an externally advised Fund with a Board comprising Non- Executive Directors only. The Board has overall responsibility for the Company’s aairs including the determination of its Investment Policy (material changes to which are subject to approval by Shareholders). Investment advice and operational support are outsourced to external service providers (including the Investment Adviser, Company Secretary and Administrator and Registrar), with the key strategic and operational framework and key policies set and monitored by the Board. Investment and divestment proposals are originated, negotiated and recommended by the Investment Adviser and are then subject to comment, approval or rejection by the Directors. Further details are contained in the Stakeholder Engagement and Directors’ Duties section on pages 31 to 33. The Company usually invests alongside three other VCTs advised by Mobeus in proportion to the relative net assets of each VCT at the date the investment proposal is submitted to each Board. Following the acquisition of the VCT investment advisory business of Mobeus Equity Partners LLP on 30 September 2021 by Gresham House, the Investment Manager of the two Baronsmead VCTs, the Company will co-invest alongside the Baronsmead VCTs and the Mobeus VCTs in new unquoted VCT qualifying investments in proportion to the relative net assets of each VCT (excluding direct AIM investments). The total percentage of equity held in each investment by all funds advised by Gresham House is shown in the Investment Portfolio Summary on pages 24 to 29. Private individuals invest in the Company to benefit from both income and capital returns from the portfolio. By subscribing for shares in a VCT they also receive immediate income tax relief (currently 30% of the amount subscribed by an investor). Investors receive tax-free dividends from the Company and incur no capital gains tax upon the eventual sale of the shares. These tax benefits are subject to the VCT maintaining its approved VCT status and the shares being held for a minimum of five years from the date of subscription. The Company’s business model is set out in the diagram below. 8 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Strategic Report Performance and Key Performance Indicators The Board has identified six key performance indicators that are used in its own assessment of the Company’s progress. Some of these are classified as alternative performance measures (“APMs”) in line with Financial Reporting Council (“FRC”) guidance. See Glossary of terms for details on page 85. APMs are measures of performance that are in addition to the data reported in the Financial Statements. It is intended that these will provide Shareholders with sucient information to assess how the Company has performed against its Objective in the year to 31 December 2021, and over the longer-term, through the application of its investment and other principal policies: 1. Annual and cumulative returns per share for the year The Company’s Objective is to generate long-term growth in capital and income. To assess this, the Board monitors the growth in total returns per share, both on a NAV basis and a share price basis, adjusted for dividends paid in the year. NAV basis reflects the net assets of the Company and share price basis reflects the price at which a Shareholder could expect to sell their shares. These are the most widely used measures of performance in the VCT sector. Total returns per share for the year The Net Asset Value and share price total returns per share for the year ended 31 December 2021 were 42.7% and 50.4% respectively, as shown below: NAV basis (p) Share price basis (p) Total return (p) Closing NAV per share 111.27 Closing share price (Note 2) 98.75 Plus: dividend paid in year (Note 1) 5.00 Plus: dividend paid in year (Note 1) 5.00 NAV Total return for year 116.27 Share price Total return for year 103.75 Less: opening NAV per share (81.50) Less: opening share price (69.00) Increase in NAV total return for year per share (Note 3) +34.77 Increase in Share price total return for year per share + 34.75 % NAV total return for year +42.7% % Total share price total return for year + 50.4% * The Share Price total return diers from the NAV total return because the share price at 31 December 2021 is by reference to the latest announced NAV per share, being 103.57 pence as at 30 September 2021. The NAV per share increased by 7.70 pence in the final quarter. Note 1: The dividend paid in the year was an interim dividend in respect of the year ended 31 December 2021 of 5.00 pence per share paid on 6 August 2021. Note 2: The closing share price has been adjusted for a dividend of 4.00 pence per share paid after the year-end on 7 January 2022, which was ex-div at 31 December 2021. Note 3: NAV Total Return per share for the year is comprised of: Year ended 31 December 2021 (p) 2020 (p) Gross portfolio capital returns 35.86 15.84 Gross income returns 1.62 3.41 Costs (including tax charge) (2.62) (2.11) Other movements (0.09) (0.54) NAV Total Return for the year as above (2021 only) 34.77 16.60 The contributions from portfolio returns and income are shown before deducting attributable costs. They are explained below under review of financial performance for the year. Costs are referred to in section 6 on page 11. Review of financial performance for the year For the year ended 31 December 2021 £m 2020 £m Capital return 28.64 12.55 Revenue return 0.44 1.85 Total return 29.08 14.40 The capital profit for the year of £28.64 million (34.35 pence of NAV return for the year per share, net of costs charged to capital) is primarily due to a net increase in the unrealised valuation of portfolio companies, bolstered by strong trading and significant re-ratings as a result of third-party investments, as well as realised gains from the full exit of Vian Marketing (trading as Red Paddle) as well as the partial realisations of Parsley Box, MPB Group and MyTutor. The increase in capital returns from £12.55 million is principally due to higher unrealised gains of existing portfolio companies compared to 2020 (£16.84 million increase) partially oset by a lower level of realised gains (£0.25 million fall). The revenue profit for the year of £0.44 million (0.53 pence of NAV return for the year per share, net of costs charged to revenue) is derived from income, primarily loan interest, outweighing revenue expenses. The reason for the decrease over the year is mainly due to a large interest receipt arising from the realisation of Auction Technology Group in 2020 as well as a fall in dividend income. The lower revenue return also resulted from higher expenses charged to revenue (mainly due to higher Investment Adviser fees arising from higher net assets over the year), but this was partially oset by a lower revenue tax charge on lower income received for the year. Cumulative total returns per share for the year NAV basis (p) Share price basis (p) Closing NAV per share 111.27 Closing share price (Note 1) 98.75 Plus: cumulative dividends paid to date 139.20 Plus: cumulative dividends paid to date 139.20 Closing cumulative total return 250.47 Closing cumulative total return 237.95 Less: opening cumulative total return (215.70) Less: opening cumulative total return (203.20 ) Increase in cumulative total return for year +34.77 Increase in cumulative total return for year +34.75 Note 1 - The closing share price has been adjusted for a dividend of 4.00 pence per share paid after the year-end on 7 January 2022, which was ex-div at 31 December 2021. Taking into account initial income tax relief, founder Shareholders who invested in 1999 have now seen, as at 31 December 2021, an overall gain on net investment cost of 56.5% (2020: 34.8%) since the launch of the Company. This is calculated as closing cumulative total return per share of 250.47 pence, as a percentage of net investment cost of 60.00 pence per share after initial income tax relief of 40.00 pence per share (both figures restated for the 2 for 1 share consolidation in 2006). Original Shareholders who also took advantage of the enhanced buyback oer made in 2013 have now seen an overall gain over net investment cost on this basis of 102.5%. The Company does not consider it appropriate to set a specific annual and cumulative return per share target for the year. However, Shareholders should note that the Board assesses these returns against the Company’s ability to meet its current annual dividend target of 4.00 pence per share. Both NAV and share price returns for the year are considered to be commendable by the Board reflecting the benefit of strong investment realisations and an uplift in unrealised valuations. Cumulative total return (p) 9 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Strategic Report Internal rate of return (“IRR”) Original investment cost (pence per share) Income tax relief Cost net of income tax (p) Internal Rate of Return With benefit of Income Tax Relief 2006/7 Shareholders 120.9 30% 84.6 9.7% 1999 Shareholders 200.0 20% 160.0 2.3% Without benefit of Income Tax Relief 2006/7 Shareholders 120.9 n/a n/a 6.1% 1999 Shareholders 200.0 n/a n/a 1.1% The table above shows the Internal rate of return of Shareholders’ investment for those founder Shareholders who invested in 1999 beneath those Shareholders who invested in 2006/7, shortly after the date at which Mobeus (now Gresham House) took over as sole Investment Adviser. 2. The Company’s performance compared with its peer group (Benchmarking) The Board places emphasis on the Company’s performance against a peer group of VCTs and has a target of being ranked in the top half of Generalist VCTs. Using the benchmark of NAV total return (assuming dividends are reinvested) on an investment of £100, the Company is ranked 3rd out of 40 (2020: 4th out of 46) over three years, and 4th out of 38 (2020: 8th out of 41) over five years amongst generalist VCTs by the AIC (based on statistics prepared by Morningstar) at 31 December 2021. The Board is pleased with the recent improvement in relative performance and strives to improve it further. 3. Dividends paid compared with the dividend target The Company has an annual target dividend of paying not less than 4.00 pence per share in respect of each financial year. It has met or exceeded this target in respect of its last twelve financial years. However, the Board continues to review the sustainability of this target. The ability of the Company to pay dividends in the future cannot be guaranteed and will be subject to performance and available cash and reserves. While the Board still believes in the attainment of the dividend target, the gradual move of the portfolio to growth capital investments is likely to result in annual ordinary dividend payments being more volatile and, at least over the medium-term, may be lower than have been paid in the recent past. During the year, the Company paid an interim dividend of 5.00 pence per share in respect of the year ended 31 December 2021. On 7 January 2022, the Company paid a second interim dividend of 4.00 pence in respect of the year ended 31 December 2021. Following this dividend, cumulative dividends paid to Shareholders since launch total 143.20 pence per share. For details on the capital and revenue breakdown of these dividends for the year, please see Note 7 on page 66. 20.00 0.00 P ence per s hare 120.00 140.00 160.00 100.00 80.00 60.00 40.00 31/12/2017 31/12/2018 31/12/2019 31/12/2020 31/12/2021 21.00 101.20 8.00 109.20 19.00 128.20 6.00 134.20 9.00 143.20 Dividends paid/payable in respect of the financial year Cumulative dividends paid/payable in respect of the financial year Dividends totaling 9.00 pence per share were paid in respect of the year ended 31 December 2021. Cumulative dividends paid to date since launch are 143.20 pence. 10 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Strategic Report 4. Compliance with VCT legislation In making their investment in a VCT, Shareholders become eligible for several tax benefits under VCT tax legislation, as long as the Company also complies with VCT tax legislation. To achieve this, the Company must meet a number of tests set by the VCT tax legislation. The principal tests are summarised in the panel entitled ‘Summary of VCT Legislation’ on page 6. In respect of the year ended 31 December 2021, the Company continued to meet these tests. 5. Management of share price discount to NAV The Board recognises that Shareholders may wish to sell their shares from time to time and that the secondary market for VCT shares can be limited. The impact of this secondary market is that the Company’s share price will typically trade at a level which is less than the Company’s latest published NAV per share. Subject to the Company having sucient available funds and distributable reserves, it is the Board’s intention to pursue a buyback policy with the objective of managing the discount to the latest published NAV per share. This buyback policy provides a mechanism for the Company to enhance the liquidity of its shares and seek to manage the level and volatility of the discount to NAV at which its shares may trade as market liquidity in VCTs is normally very restricted. Continuing Shareholders benefit from the dierence between the NAV and the price at which the shares are bought back and cancelled. Shareholders granted the Directors authority to buyback up to 12.6 million of the Company’s shares, representing 14.99% of the shares in issue at the date of the notice of the meeting, at the AGM held on 18 May 2021. Shares bought back under this authority are cancelled and the Directors do not intend to exercise this authority unless they believe to do so would result in an increase in net assets per share which would be in the interests of Shareholders generally. A resolution to renew this authority will be proposed at the forthcoming AGM in May 2022. The resolution will grant authority for the Company to buyback up to 14.99% of the Company’s own Ordinary shares in issue, and will normally expire at the AGM to be held in 2023. During the year ended 31 December 2021, Shareholders holding 1,309,349 shares expressed their desire to sell their holdings. The Company instructed its brokers, Panmure Gordon, to purchase these shares at prices representing discounts of approximately 5% to the previously announced NAV per share. The Company subsequently purchased these shares at prices of between 92.38 and 94.59 pence per share and cancelled them. The discount for the Company’s shares at 31 December 2021 was 4.7% (2020: 4.6%) based on the share price shown in the table on page 8 and the NAV at 30 September 2021 of 103.57 pence. The ex-div share price at 31 December 2021 of 94.75 pence has been adjusted for a 4.00 pence dividend paid on 7 January 2022. In total, the Company bought back 1.6% of the issued share capital of the Company, at the beginning of the year, as calculated by reference to the issued share capital on 1 January 2021. 6. Costs Shareholders will be aware there are a number of costs involved in operating a VCT. Although Shareholders do not bear costs in excess of the expense cap of 3.4%, the Board monitors its costs carefully and seeks to maintain an Ongoing Charges Ratio well below 3.4%. The Board monitors costs using the Ongoing Charges Ratio 1 , which is as follows: 2021 2020 Ongoing charges 2.39% 2.67% Performance fee 0.00% 0.00% Ongoing charges plus accrued performance fee 2.39% 2.67% 1 The Ongoing Charges Ratio has been calculated, using the AIC recommended methodology. The Ongoing Charges Ratio replaces the Total Expense Ratio reported previously. The Total Expense Ratio still forms the basis of any expense cap that may be borne by the Investment Adviser. For the purpose of calculating this ratio, actual running costs are capped at 3.4% of closing net assets but exclude any irrecoverable VAT and exceptional costs. There was no breach of the expense cap for the year ended 31 December 2021 (2020: £nil). The Ongoing Charges Ratio for the year has decreased from last year primarily due to an increase in average net assets over the year. Investment Adviser fees and other expenses Investment Adviser fees charged to both revenue and capital have increased by £0.48 million compared to 2020, being a total of £1.71 million. Other expenses (all charged to revenue) have increased by £0.03 million to £0.46 million. This increase was due to a combination of a rise in audit fees and higher listing fees as well as trail commission fees resulting from higher net assets, These increases were partially oset by lower registrar fees as fewer dividends were paid in the year compared to 2020. Further details of these expenses are contained in the Financial Statements on pages 63 to 65 of this Annual Report. 11 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Strategic Report Change in Management Arrangements As Shareholders will be aware, Gresham House acquired the VCT investment advisory business of Mobeus and, as a result, the entire investment and operations teams of Mobeus joined Gresham House on 1 October 2021. At the time of writing, the integration has been well underway for over six months. Having formed one of the largest and most experienced teams in the VCT sector, the team recently completed its first combined investment into Proximity Insight, a retail software provider. It is hoped that this combined investment team will be a major force in the supply of capital to the VCT sector and the team’s enhanced market position should attract strong deal flow in order to produce attractive investment returns. Portfolio Review Having recovered from the COVID-19 related decline in value by the start of the Company’s financial year, the portfolio continues on a positive trajectory. Whilst markets helped deliver a strong recovery in 2020, the main driver of value growth in 2021 has been a continuation of buoyant underlying trading performance across the portfolio. This has been bolstered by a small number of significant re-ratings during the year. A limited number of portfolio companies have experienced disruption as a result of the UK lockdowns, but it is pleasing to report that a significant proportion have benefited from what appears to be a structural change in consumer purchasing habits. Indeed, the majority of the portfolio companies is now trading above their pre COVID-19 levels. Overall, the majority of the portfolio has demonstrated a high degree of resilience, with the vast majority of companies by number showing revenue and/or earnings progression over the previous two years. Investments classified as Retailers now comprise over 44% of the portfolio by value, all of which are demonstrating the success of the direct-to-consumer business model. Significant up-ratings in the unquoted portfolio have been a consistent feature across the year, with third-party investment driving value uplifts in MPB (£2.82 million), MyTutor (£2.16 million) and Bella & Duke (£0.95 million), and a sizeable further investment from the Mobeus VCTs doing the same in the case of Preservica (£6.20 million). Whilst the portfolio has limited exposure to more challenging sectors such as hospitality and overseas travel, software and other technology-enabled businesses have performed strongly. A small number of companies have struggled, though they are in the minority and their impact on overall shareholder return is minimal. Furthermore, some of these companies, such as Media Business Insight and RDL, have fundamentally re-engineered their businesses, which should provide a more positive outlook. It is noted that Virgin Wines and Preservica currently account for a significant proportion of the invested portfolio’s value (31.3% of the portfolio value, 22.1% of net assets), whilst 15.1% of the portfolio is now held in AIM-listed investments (which equates to 10.7% of net assets). The AIM market has witnessed some volatility in the final quarter of the Company’s financial year, with market sentiment reducing the initial value uplifts of the IPOs of Virgin Wines and Parsley Box in March. Whilst Virgin Wines had recovered its value by the year-end, Parsley Box was further impacted by its announcements of tougher trading conditions, supply constraints and further fundraising. In line with market practice, in both cases the Company’s shareholdings are subject to lock-up arrangements for a period post-flotation. Strong trading activity levels have created investment opportunities for the Company as portfolio companies sought to enhance their positions by building capability in light of demand. A number of further investments were therefore made into the portfolio during the year. Gresham House continues to review the opportunities for follow-on investments. M&A sentiment also remained buoyant with a continuing stream of attractive realisations throughout the period. The outlook for both follow-on investment and realisations continues to be positive. The Company made investments totalling £6.23 million (2020: £4.80 million), comprising £2.53 million into four new investments and £3.70 million into nine existing investments. This level of new and follow-on investment is pleasing given the continued uncertainty and lockdown restrictions during the year under review. A strong track record for the growth investments is now emerging which validates the strategic change arising from the amendment to VCT rules in 2015. Overall, it is reassuring to see that the more traditional investments, as well as the new growth investments, are continuing to make good progress. The portfolio’s valuation changes in the year are summarised as follows: Investment Portfolio Capital Movement 2021 £m 2020 £m Increase in the value of unrealised investments 27.19 12.94 Decrease in the value of unrealised investments (1.48) (4.07) Net increase in the value of unrealised investments 25.71 8.87 Realised gains 4.26 4.52 Realised losses (0.07) (0.08) Net realised gains in the year 4.19 4.44 Net investment portfolio movement in the year 29.90 13.31 12 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Strategic Report Investment Adviser’s Review The portfolio movements in the year are summarised as follows: 2021 £m 2020 £m Opening portfolio value 41.68 38.54 New and follow-on investments 6.23 4.80 Disposal proceeds (12.23) (14.97) Net realised gains 4.19 4.44 Valuation movements 25.71 8.87 Portfolio value at 31 December 65.58 41.68 New Investments during the year A total of £2.53 million was invested into four new investments during the year, as detailed below: Company Business Date of investment Amount of new investment (£m) Vivacity Artifi cial intelligence & urban tra c control system February 2021 0.91 Vivacity (vivacitylabs.com) develops camera sensors with on-board video analytics software that enables real-time anonymised data gathering of road transport system usage. It o ers city transport authorities the ability to manage their road infrastructure more e ectively, enabling more e cient monitoring of congestion and pollution levels as well as planning for other issues, such as the changing nature of road usage (e.g. the increasing number of cyclists). The technology and software represent a signifi cant leap forward for local planning authorities which have traditionally relied upon manual data collection methods. The growth capital funding will allow the management team to achieve deeper penetration of the UK transport management sector, explore opportunities internationally and commercialise its new Smart Junction o ering. Revenues have grown 350% over the last three years and it has exceeded its most recent year’s budget despite the onset of the COVID-19 pandemic. In April 2021, Vivacity won the Queen’s Award for Enterprise: Innovation 2021. Caledonian Leisure UK leisure and experience breaks March-May 2021 0.33 Caledonian Leisure works with accommodation providers, coach businesses and other experienced providers (such as entertainment destinations and theme parks) to deliver UK-based leisure and experience breaks to its customers. It comprises two brands, Caledonian Travel (caledoniantravel.com) and UK Breakaways (ukbreakaways.com). The domestic leisure and experience travel market has been devastated by the COVID-19 pandemic, but the company is well-placed to expand as lockdown and travel restrictions are eased. A series of planned investment tranches, has helped the company prepare for and capitalise on the strong demand for UK staycation holidays. Legatics SaaS LegalTech software business June 2021 0.66 Legatics (legatics.com) transforms legal transactions by enabling deal teams to collaborate and close deals in an interactive online environment. Designed by lawyers to improve legacy working methods and solve practical transactional issues, the legal transaction management platform increases collaboration, e ciency and transparency. As a result, Legatics has been used by around 1,500 companies, and has been procured by more than half of the top global banking and fi nance law fi rms, with collaborations having been hosted in approximately 50 countries. With this new funding round, Legatics will be looking to double the size of its team over the next 18 months and further develop its technology to deliver new features and use cases for a wider range of practice areas within new and existing customers. Vet’s Klinic Veterinary clinics June 2021 0.63 Pets’ Kitchen (trading as Vet’s Klinic) is an established and profi table veterinary clinic providing veterinary services (vetsklinic.co.uk) as well as a premium pet food provider (vetskitchen.co.uk). Its primary Swindon ‘super clinic’ is a fi rst opinion veterinary practice where pet owners can schedule consultations online and obtain real time feedback on in-patient care through its own technology platform. Without compromising on quality of care, this model enables a signifi cantly higher price point compared to the industry average. This new investment will be used to roll out its unique clinic model to other sites along the M4 corridor. 13 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Strategic Report Further investments during the year A total of £3.70 million was invested into nine existing portfolio companies during the year, as detailed below: Company Business Date of investment Amount of further investment (£m) Parsley Box Ambient ready meals targeting the over 60s January/March 2021 0.27 Parsley Box (parsleybox.com) is a UK direct to consumer supplier of home delivered, ambient ready meals for the over 60s. Founded in 2017, Parsley Box has grown rapidly and has developed a unique meal delivery solution for its customers. The company supplies a diverse range of ambient meals via next day delivery which are easy to store and contribute to a more independent and healthier lifestyle. The company has seen a strong benefi t from the COVID-19 pandemic with revenues nearly eight times that at the time of the original VCT investment. This further investment enabled the company to scale its marketing strategy, process larger order volumes and continue to build out its team. Parsley Box’s shares were admitted to trading on AIM on 31 March 2021. As part of the transaction, the Company also partially realised a portion of its investment, as detailed in the “Loan stock repayments and other gains/(losses) during the year” section of this report on page 16. Bleach London Hair colourants brand February 2021 0.11 Bleach London Holdings (“Bleach”) (bleachlondon.com) is an established branded, fast-growing business which manufactures a range of haircare and colouring products. Bleach has made sound commercial progress since the VCTs invested in 2019 with its direct-to-consumer channels benefi ting from the COVID-19 pandemic. Revenues have grown over 90% ahead of the previous year. This further investment, along with strong support from existing investors, is being used to invest in marketing and infrastructure to enable the business to accelerate its development in the United States of America. Arkk Consulting Regulatory and reporting requirement service provider February 2021 0.48 Arkk Consulting (trading as Arkk Solutions) (arkksolutions.com) provides services and software to enable organisations to remain compliant with regulatory reporting requirements. Arkk was established in 2009 and currently has over 800 clients across 20 countries. These include more than 80 of the FTSE 350, and half of the largest 20 accountancy fi rms in the UK. This further investment is to enable continued development of its software in order to capitalise on HMRC’s ‘Making Tax Digital’ campaign. The company has incorporated artifi cial intelligence into its product and recurring revenues are now over 50% higher than at the point of the original investment in May 2019. Bella & Duke Frozen raw dog food provider May 2021 0.26 Bella & Duke (bellaandduke.com) is a direct-to-consumer subscription service, providing premium frozen raw dog food to pet owners in the UK. Founded in 2016, the business provides an alternative to standard meal options for dog owners by focusing on the well documented health benefi ts of a raw food diet. This area is a growing niche in the large and established pet food market and is being driven by the premiumisation of dog food. This follow-on investment from the Company, alongside a co-investment by the British Growth Fund (“BGF”) and existing shareholders, will provide additional working capital enabling Bella & Duke to continue to scale. Tapas Revolution Spanish restaurant chain June 2021 0.17 Spanish Restaurant Group (trading as Tapas Revolution) (tapasrevolution.com) is a leading Spanish restaurant chain in the casual dining sector. At initial investment in January 2017, it was operating fi ve sites and, subsequent to a further investment round in March 2018, had grown to 12 sites. Tapas was trading well and had a strong outlook up until the onset of COVID-19 which mandated the closure of much of its estate during the course of 2020 in response to the varying patterns of government restrictions. Costs were controlled well under the circumstances and this further investment provided fi nancial headroom whilst the business re-opened its estate. MyTutor Digital marketplace for online tutoring August 2021 0.70 MyTutorweb (trading as MyTutor) (mytutor.co.uk) is a digital marketplace that connects school pupils who are seeking private one-to-one tutoring with university students. The business is satisfying a growing demand from both schools and parents to improve pupils’ exam results. This further investment, alongside other existing shareholders and Australian strategic co-investor, SEEK, who invested £30 million, aims to build and reinforce its position as a UK category leader in the online education market as well as to begin to develop a broader, personalised learning product. The company has been chosen as a Tutoring Partner for the National Tuition Programme where they will directly support 30,000 students in catching up on lost learning because of the COVID-19 pandemic. 14 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Strategic Report Company Business Date of investment Amount of further investment (£m) Andersen EV Provider of premium electric vehicle (EV) chargers September 2021 0.15 Muller EV Limited (trading as Andersen EV) (andersen-ev.com) is a design-led manufacturer of premium electric vehicle chargers. Incorporated in 2016, this business has secured high profi le partnerships with Porsche and Jaguar Land Rover, establishing an attractive niche position in charging points for the high end EV market. This follow-on funding is to further support its premium brand and product positioning whilst ensuring all new and existing products meet the most recent and highest safety and compliance standards. Andersen has continued its strong trading performance with revenue up over 300% year on year. Preservica Seller of proprietary digital archiving software October/ November 2021 1.25 Preservica is a SaaS software business with blue chip customers and strong recurring revenues. It has developed market leading software for the long-term preservation of digital records, ensuring that digital content can remain accessible, irrespective of future changes in technology. This latest investment is to provide additional growth capital to fi nance the further development of the business. The business has seen annual recurring revenues nearly double over the last two fi nancial years. ActiveNav File analysis Software December 2021 0.31 Data Discovery Solutions (trading as ActiveNav) (activenav.com) is a fi le analysis software solution which makes it easier for companies to clean up network drives, respond to new data protection laws and dispose of redundant and out dated documents. Active Navigation’s solution is used by signifi cant blue chip customers, particularly those in highly regulated industries such as energy and professional services, as well as government entities in the USA, Canada, Australia and the UK. This further funding is to market its nascent Hubble platform in order to generate company value. Portfolio valuation movements The portfolio generated net unrealised gains of £25.71 million in the year. The scale of the valuation increases was underpinned by the Company’s growth portfolio, many of which have direct-to- consumer business models which have grown signifi cantly since the onset of the COVID-19 pandemic. In the fi rst half of the year, the Company generated signifi cant unrealised gains, exemplifi ed by the successful fl otations of two investments on AIM. Despite ongoing uncertainties relating to COVID-19, Gresham House believes that the pandemic has accelerated existing trends in consumer behaviour and, in many cases, companies have experienced signifi cant growth in demand. Over this period, some older style MBO portfolio companies with similar business practices have also benefi ted. A few companies have struggled in this environment, but their value has already been reduced to modest levels, reducing the risk to shareholder value. Total valuation increases were £27.19 million. The main valuation increases were: Preservica – £6.20 million Virgin Wines – £5.06 million Media Business Insight – £2.86 million MPB Group – £2.82 million EOTH (Equip) – £2.45 million Virgin Wines, EOTH (Equip) and MPB Group generated record revenues and earnings over the lockdown periods and beyond. They have all signifi cantly increased their customer base and each have strong growth prospects. Strong trading and recurring revenues at Preservica has attracted third-party investment interest which has led to a sizeable re-rating. MBI has recovered very strongly and has benefi ted from its ability in providing both virtual and physical events. Total valuation decreases were £(1.48) million. The main valuation decreases were: Parsley Box – £(1.09) million Andersen EV – £(0.17) million Bleach London – £(0.15) million Kudos Innovations – £(0.07) million The value of Parsley Box experienced a signifi cant decline over the second half of 2021 in light of market sentiment compounded by company announcements of slower than anticipated sales growth and supply disruption. This business intends to carry out a further fundraising soon. Andersen EV has been operating in a fast- developing industry beset with regulatory hurdles that have challenged its progress over the period, albeit all of these are now resolved. Bleach London has had a di cult period, having had to delay its US launch and having experienced normalised direct-to-consumer revenues post-UK lockdown. The US launch took place after the Company’s year-end. Kudos Innovations has been a ected by contract delays. The majority of the increase in portfolio value lies in the top 10 companies which represent over 70% of the portfolio by value. Year-on-year growth by either revenues or earnings has been seen in all of the top ten companies and it is pleasing to note that eight of these are from the younger, growth portfolio. 15 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Strategic Report Portfolio Realisations during the year The Company realised three of its investments during the year, as detailed below: Company Business Period of investment Total cash proceeds over the life of the investment/ Multiple over cost Omega Diagnostics In vitro diagnostics for food intolerance, auto-immune diseases and infectious diseases December 2010 to February 2021 £1.17 million 5.9x cost Following a further significant increase in the share price, the Company sold its remaining investment in Omega Diagnostics Group plc for £0.42 million (realised gain in the year: £0.16 million). Total proceeds received over the ten-year life of the investment were £1.17 million, compared to an original investment cost of £0.20 million, which is a multiple on cost of 5.9x and an IRR of 19.9%. Proactive Group Provider of media services and investor conferences January 2018 to September 2021 £1.94 million 2.6x cost On 29 September 2021, the Company sold its investment in Proactive Group Holdings Inc. The Company received £1.89 million in cash following the disposal of its equity and loan notes, contributing to a realised gain over cost over the life of the investment of £1.19 million (realised loss in the year: £0.01 million). Total proceeds received over the nearly four-year life of the investment were £1.94 million, compared to an original cost of £0.75 million, which is a multiple on cost of 2.6x and an IRR of 33.0%. Red Paddle Design and manufacturer of Stand up paddleboards July 2015 to November 2021 £4.44 million 4.9x cost The Company sold its investment in Vian Marketing (trading as Red Paddle) to Myers Family Oce for £3.71 million (realised gain in the year: £2.41 million). Total proceeds received to date over the six-year life of the investment were £4.44 million compared to an original investment cost of £0.90 million, which is a multiple on cost of 4.9x and an IRR of 31.5%. Further proceeds of £0.40 million were received after the year-end. Loan stock repayments and other gains/(losses) during the year During the year and following the admission of its shares to AIM, the Company received £1.25 million from the partial realisation of its holding in Parsley Box, generating a realised gain of £0.54 million. Over the two years to date this investment has been held, this partial sale generated a multiple of cost of 4.0x on the cost of the shares sold. The Company also received £1.26 million from the partial realisation of MPB Group generating a realised gain of £0.41 million. This partial realisation generated a 7.8x multiple of cost on the cost of the shares sold and was the result of Vitruvian Partners, a large private equity investor, taking a sizeable equity investment in the company. There was a further partial realisation of MyTutor which generated £0.70 million proceeds for the Company and a realised gain in the year of £0.38 million. In addition to the above, proceeds of £2.96 million were received via loan repayments from Virgin Wines, Media Business Insight, Vian Marketing (trading as Red Paddle), MPB Group and BG Training, generating realised gains totalling £0.26 million. Finally, deferred consideration totalling £0.10 million in realised gains was received in respect of investments realised in a previous year. A small realised loss of £(0.06) million was also recognised in respect of transaction costs for Virgin Wines due to stamp duty paid upon the admission of the shares to listing on AIM. Portfolio income and yield In the year under review, the Company received the following amounts in loan interest and dividend income: Investment Portfolio Yield 2021 £m 2020 £m Interest received in the year 0.98 2.13 Dividends received in the year 0.35 0.66 Total portfolio income in the year 1 1.33 2.79 Portfolio Value at 31 December 65.58 41.68 Portfolio Income Yield (Income as a % of Portfolio value at 31 December) 2.0% 6.7% 1 Total portfolio income in the year is generated solely from investee companies within the portfolio. The fall in interest received is due to a significant interest receipt of £1.08 million from the realisation of Auction Technology Group in 2020. 16 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Strategic Report 17 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Strategic Report New investments made after the year-end The Company made one new investment of £0.61 million after the year-end, as detailed below: Company Business Date of investment Amount of new investment (£m) Proximity Insight Retail Software February 2022 0.61 Proximity Insight (proximityinsight.com) is a retail technology business that oers a ‘Super-App’ that is used by the customer- facing teams of brands and retailers to engage, inspire and transact with customers. Headquartered in London with oces in New York and Sydney, Proximity Insight has a global client base that includes over 20 brands, boutiques and department stores in fashion, beauty, jewellery, electronics and homewares. These clients use Proximity Insight’s platform to blur the lines between physical and digital retail, enhancing the customer experience and improving the lifetime value of their customers by upwards of 35%. The business grew annual recurring revenue by 117% to £2.2 million in 2021, and the investment will support Proximity Insight’s continued product development and international growth. The investment was made across all six VCTs advised and managed by Gresham House, including the two Baronsmead VCTs. Further investments made after the year-end The Company made further investments totalling £0.34 million into two existing portfolio companies after the year-end, as detailed below: Company Business Date of investment Amount of further investment (£m) Caledonian Leisure UK leisure and experience breaks January - February 2022 0.22 Caledonian Leisure works with accommodation providers, coach businesses and other experienced providers (such as entertainment destinations and theme parks) to deliver UK-based leisure and experience breaks to its customers. It comprises two brands, Caledonian Travel (caledoniantravel.com) and UK Breakaways (ukbreakaways.com). The business has significantly exceeded planned revenues since launch and this funding will provide additional working capital to facilitate further growth. Northern Bloc Vegan and dairy-free ice cream producer April 2022 0.12 Northern Bloc Ice Cream (northern-bloc.com) is an established food brand in the emerging and rapidly growing vegan market. By focusing on chef quality and natural ingredients, Northern Bloc has carved out an early mover position in the vegan ice cream sector. The company’s focus on plant-based alternatives has strong environmental credentials as well as it being the first ice cream brand to move wholly into sustainable packaging. Following the initial investment in December 2020, Northern Bloc has grown rapidly and strengthened its prospects. COVID disruption has impacted its plan but this further investment provides additional working capital and funds a new production facility to increase its resilience, flexibility and margins in the future. Environmental, Social, Governance considerations When seeking new investment opportunities, the Investment Adviser under Mobeus ensured that each potential new investment was subject to a comprehensive due diligence process encompassing commercial, financial and ESG-related considerations. Following the novation of the advisory agreement to Gresham House on 30September 2021, a market leader that is well-resourced with knowledge and expertise in sustainability, the Investment Advisor has moved to establish ESG procedures and protocols of the highest standards as set out and informed by Gresham House plc. The first tangible example of this revised approach is that that the individual members of the investment team now have their own individual ESG objectives set which align with the wider ESG goals of the Investment Adviser. Gresham House is committed to sustainable investment as an integral part of its business strategy. During 2021, the Investment Adviser has taken further steps to formalise its approach to sustainability and has put in place several processes to ensure environmental, social and governance (“ESG”) factors and stewardship responsibilities are built into asset management across all funds and strategies, including venture capital trusts. Gresham House believes the “G” (Governance) of ESG is the most important factor in its investment processes. Board composition, governance, control, company culture, alignment of interests, shareholder ownership structure and remuneration policy are important elements that will feed into the analysis and the valuation of portfolio companies. The “E” and “S” (Environmental and Social) will be assessed as risk factors during due diligence to eliminate companies that face environmental and social risks that cannot be mitigated through engagement and governance changes. Where material ESG risks are identified, these will be reviewed by the Adviser and a decision on how to proceed will be documented. The Adviser will then proactively follow up with the investee company management team and ensure 18 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Strategic Report appropriate corrective and preventative action is taken and any material issues or incidents are recorded by the Adviser. Gresham House published its inaugural Sustainable Investment Report in 2021 that, along with existing asset specific policies, including the Public Equity Policy, can be found on its website (www.greshamhouse.com). These reports and policies cover the Investment Adviser’s sustainable investment commitments, how the investment processes meet these commitments and the application of the sustainable investment framework. The Gresham House Board and General Management Committee assess the adherence to the commitments in the Sustainable Investment Policies on an annual basis. In a changing world, the Investment Adviser believes that this approach will contribute towards the enhancement of Shareholder value going forward. Outlook The growth strategy implemented in 2015 is clearly showing signs of bearing fruit with many companies beginning to achieve significant scale and attract the interest of public markets and larger secondary investors. The portfolio is in a healthy position with many companies trading well throughout the lockdowns, and several at record levels. It continues to evolve, oering a balance of fast- growing and more stable investments at various stages of maturity and scale across a range of diverse market sectors. There is a significant exposure to businesses operating a direct-to- consumer business model which has contributed to strong trading performance during the year. This also gives confidence about the future strength of the portfolio and its ability to cope with the challenges and opportunities associated with Brexit, the macro-economic outlook and the ongoing impact of COVID-19. The new investment pipeline is recovering to levels seen pre-COVID-19 and the prospects for capital deployment are encouraging. The exceptional performance experienced since the impact of COVID-19 in March 2020 is, therefore, likely to moderate over the next 12 months as the level of activity normalises. Although the threat of further lockdowns to combat emerging new variants appears to have lessened somewhat, there still remains much uncertainty around the wider impact of the pandemic upon the economy, particularly in respect of supply chain and inflationary issues. The tragic events currently unfolding in Ukraine have amplified this uncertainty and stressed financial markets around the world. The Investment Adviser has reviewed the underlying assets and has concluded that there are no material impacts on the valuation of the portfolio. Whilst this has created significant short term volatility post year-end, the portfolio is in robust shape and the investment activity levels are promising. Gresham House therefore remains optimistic for the future. Gresham House Asset Management Limited Investment Adviser 6 April 2022 19 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Strategic Report Investments by market sector Investments by value remain spread across a number of sectors, primarily in general retailers, software and computer services and industrial support services. Although the portfolio appears concentrated on three main sectors, the range of companies contained within these sectors is considered to be very diverse and the Investment Adviser continues to target further investments to complement these sectors. 31 December 2021 31 December 2020 0% 40% 50% 60% 20%10% 30% 0.1% 0.1% 0.0% 0.6% 1.7% 0.5% 2.2% 0.3% 5.5% 2.4% 12.7% 12.6% 44.2% 51.4% 31.3% 22.2% 0.0% 3.5% 0.0% 4.7% 0.6% 0.9% 0.8% 0.8% 1.0% 0.0% Pharmaceuticals Leisure goods General financial Construction and materials General industrials Food producers Consumer services Technology, hardware & equipment Travel and leisure Media Industrial support services Software and computer services Retailers Age of the portfolio by value < 1 year 1 - 2 years 2 - 3 years 3 - 4 years MBO Growth Capital AIM Legacy 4 - 5 years > 5 years 8.4% 75.1% 15.1% 1.4% 9.4% 4.4% 5.7% 61.8% 17.4% 1.3% 2021 2021 21.5% 76.8% 0.6% 1.1% 6.7% 5.3% 16.2% 43.7% 9.9% 18.2% 2020 2020 Type of investment transaction by value < 1 year 1 - 2 years 2 - 3 years 3 - 4 years MBO Growth Capital AIM Legacy 4 - 5 years > 5 years 8.4% 75.1% 15.1% 1.4% 9.4% 4.4% 5.7% 61.8% 17.4% 1.3% 2021 2021 21.5% 76.8% 0.6% 1.1% 6.7% 5.3% 16.2% 43.7% 9.9% 18.2% 2020 2020 Growth Capital contains all investments made after the 2015 rule change which are young businesses using the Company’s investment for growth and development purposes (as defined under VCT legislation). This category also contains a small number of growth capital style investments made before the 2015 VCT rule change under the Investment Adviser’s MBO strategy. MBO contains MBO type investments made under the Investment Adviser’s previous MBO strategy. This typically includes companies which are more mature compared to those invested under the growth capital strategy. * All of the retail investments have branded online direct-to-consumer businesses with no physical high street retail presence, being Bella & Duke, Bleach London, Buster & Punch, EOTH (trading as RAB and Lowe Alpine), MPB Group, Parsley Box, Wetsuit Outlet, and Virgin Wines. 20 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Preservica Limited www.preservica.com Cost £3,398,000 Valuation £11,057,000 Basis of valuation Revenue multiple Equity % held 13.1% Income receivable in year £53,998 Business Seller of proprietary digital archiving software Location Abingdon, Oxfordshire Original transaction Growth capital Audited fi nancial information Year ended 31 March 2021 Turnover Not disclosed Operating profi t/ (loss) Not disclosed Net liabilities £(3,057,000) Year ended 31 March 2020 Turnover Not disclosed Operating profi t/ (loss) Not disclosed Net liabilities £(1,394,000) Movements during the year Follow-on investments made in October 2021 and November 2021. Principal investments in the portfolio at 31 December 2021 by valuation Virgin Wines UK plc (formerly Virgin Wines Holdings Limited) www.virginwines.co.uk Cost £46,000 Valuation £9,486,000 Basis of valuation Bid price (AIM quoted) Equity % held 8.3% Income receivable in year £30,808 Business Online wine retailer Location Norwich Original transaction Management buyout Audited fi nancial information Year ended 30 June 2021 Turnover £73,634,000 Operating profi t £3,468,000 Net assets £17,627,000 Year ended 30 June 2020¹ Turnover £56,554,000 Operating profi t £4,759,000 Net assets £6,137,000 ¹ The fi nancial information quoted is from unaudited fi nancial information. Movements during the year Admitted to AIM on 2 March 2021. Loan repayment and preference share redemption as part of IPO transaction. MPB Group Limited www.mpb.com Cost £1,095,000 Valuation £5,765,000 Basis of valuation Revenue multiple Equity % held 3.2% Income receivable in year £10,919 Business Online marketplace for photographic and video equipment Location Brighton Original transaction Growth capital Audited fi nancial information Year ended 31 March 2021 Turnover £64,888,000 Operating loss £(911,000) Net assets £31,267,000 Year ended 31 March 2020 Turnover £44,179,000 Operating loss £(311,000) Net assets £9,753,000 Movements during the year Part disposal in March 2021 and loan repayment in May 2021. Further details of the investments in the portfolio may be found on the Gresham House website: www.greshamhouse.com. Operating profi t is stated before charging depreciation and amortisation where appropriate for all investee companies. Strategic Report 21 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc EOTH Limited (trading as Rab and Lowe Alpine) www.equipuk.com Cost £951,000 Valuation £4,847,000 Basis of valuation Earnings multiple Equity % held 1.7% Income receivable in year £286,810 Business Branded outdoor equipment and clothing (Rab and Lowe Alpine) Location Alfreton, Derbyshire Original transaction Growth capital Audited financial information Year ended 31 January 2021 Turnover £61,258,000 Operating profit £8,241,000 Net assets £32,711,000 Year ended 31 January 2020 Turnover £65,230,000 Operating profit £8,665,000 Net assets £31,084,000 Movements during the year None. Further details of the investments in the portfolio may be found on the Gresham House website: www.greshamhouse.com. Operating profit is stated before charging depreciation and amortisation where appropriate for all investee companies. My Tutorweb Limited www.mytutor.co.uk Cost £2,465,000 Valuation £5,016,000 Basis of valuation Revenue multiple Equity % held 5.3% Income receivable in year Nil Business Digital marketplace connecting school pupils seeking one-to-one tutoring with tutors Location London Original transaction Growth capital Financial information (unaudited) Year ended 31 December 2019 Turnover Not disclosed Operating profit/ (loss) Not disclosed Net assets £1,739,000 Year ended 31 December 2018 Turnover Not disclosed Operating profit/ (loss) Not disclosed Net assets £4,706,000 Movements during the year Follow on investment in August 2021, and subsequent partial realisation in August 2021. Strategic Report Media Business Insight Holdings Limited www.mb-insight.com Cost £2,225,000 Valuation £3,560,000 Basis of valuation Earnings multiple Equity % held 15.7% Income receivable in year £234,661 Business A publishing and events business focused on the creative production industries Location London Original transaction Management buyout Audited financial information Year ended 31 December 2020 Turnover £8,342,000 Operating profit £649,000 Net assets £971,000 Year ended 31 December 2019 Turnover £11,890,000 Operating profit £1,493,000 Net liabilities £(2,367,000) Movements during the year Part loan repayment made in November 2021. 22 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Master Removers Group 2019 Limited (trading as Anthony Ward Thomas, Bishopsgate and Aussie Man & Van) www.ward-thomas.co.uk Cost £349,000 Valuation £3,001,000 Basis of valuation Earnings multiple Equity % held 6.6% Income receivable in year £149,411 Business A specialist logistics, storage and removals business Location London Original transaction Growth capital Audited fi nancial information Year ended 30 September 2020 Turnover £26,984,000 Operating profi t £4,143,000 Net assets £14,286,000 Year ended 30 September 2019 Turnover £10,208,000 Operating profi t £1,775,000 Net assets £14,690,000 Movements during the year None. End Ordinary Group Limited (trading as Buster and Punch) www.busterandpunch.com Cost £1,497,000 Valuation £3,305,000 Basis of valuation Earnings multiple Equity % held 7.8% Income receivable in year Nil Business Industrial inspired lighting and interiors retailer Location Stamford, Lincolnshire Original transaction Growth capital Audited fi nancial information Year ended 31 March 2021 Turnover Not disclosed Operating profi t/ (loss) Not disclosed Net assets £5,614,000 Year ended 31 March 2020 Turnover Not disclosed Operating profi t/ (loss) Not disclosed Net assets £1,679,000 Movements during the year None.. Further details of the investments in the portfolio may be found on the Gresham House website: www.greshamhouse.com. Operating profi t is stated before charging depreciation and amortisation where appropriate for all investee companies. Data Discovery Solutions Limited (trading as ActiveNav) www.activenav.com Cost £1,409,000 Valuation £2,624,000 Basis of valuation Revenue multiple Equity % held 7.7% Income receivable in year Nil Business Provider of a global market leading fi le analysis software for information governance, security and compliance Location Winchester Original transaction Growth capital Audited fi nancial information Year ended 29 June 2020 Turnover Not disclosed Operating profi t/(loss) Not disclosed Net assets £5,023,000 Year ended 29 June 2019 Turnover Not disclosed Operating profi t/(loss) Not disclosed Net assets £3,558,000 Movements during the year Follow-on investment in December 2021. Principal investments in the portfolio at 31 December 2021 by valuation Strategic Report 23 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Strategic Report Manufacturing Services Investment Limited (trading as Wetsuit Outlet) www.wetsuitoutlet.co.uk Cost £2,333,000 Valuation £2,331,000 Basis of valuation Earnings multiple Equity % held 6.4% Income receivable in year £116,655 Business Online retailer in the water sports market Location Southend on Sea, Essex Original transaction Growth capital Audited fi nancial information Year ended 31 March 2021 Turnover £25,149,000 Operating profi t £1,970,000 Net assets £8,897,000 Year ended 31 March 2020 Turnover £16,531,000 Operating loss £(138,000) Net assets £8,803,000 Movements during the year None. Further details of the investments in the portfolio may be found on the Gresham House website: www.greshamhouse.com. Operating profi t is stated before charging depreciation and amortisation where appropriate for all investee companies. 24 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Ordinary shares Other investments 1 (loan stock/preference shares) Total cost at 31 December 2021 £ Total valuation at 31 December 2020 £ Total additional investments £ Total valuation at 31 December 2021 £ Unrealised gains/(losses) in year £ Net realised gains/(losses) in year £ Net proceeds in year £ % of equity held % of portfolio by value Cost at 31 December 2021 £ Valuation at 31 December 2021 £ Cost at 31 December 2021 £ Valuation at 31 December 2021 £ Preservica Limited Seller of proprietary digital archiving software 1,359,179 8,979,509 2,038,566 2,07 7,119 3,397,745 3,611,144 1,245,703 11,056,628 6,199,781 - - 13.1% 16.9% Virgin Wines UK plc (formerly Virgin Wines Holding Company Limited) 2,3 Online wine retailer 45,915 9,486,219 - - 45,915 6,312,889 - 9,486,219 5,058,228 (57,709) 1,827,189 8.3% 14.5% MPB Group Limited Online marketplace for used photographic equipment 1,095,252 5,764,694 - - 1,095,252 4,126,952 - 5,764,694 2,823,085 411,275 1,596,618 3.2% 8.8% My TutorWeb Limited (trading as MyTutor) Digital marketplace connecting school pupils seeking one-to-one online tutoring 2,464,757 5,015,751 - - 2,464,757 2,476,581 699,864 5,015,751 2,155,329 383,841 699,864 5.3% 7.6% EOTH Limited (trading as Equip Outdoor Technologies) Distributor of branded outdoor equipment and clothing including the Rab and Lowe Alpine brands 95,147 3,914,959 856,324 932,228 951,471 2,400,632 - 4,847,187 2,446,555 - - 1.7% 7.4% Media Business Insight Holdings Limited A publishing and events business focused on the creative production industries 1,089,103 2,424,108 1,135,939 1,135,939 2,225,042 1,013,748 - 3,560,047 2,855,153 188,864 497,718 15.7% 5.4% End Ordinary Group Limited (trading as Buster and Punch) Industrial inspired lighting and interiors retailer 1,496,785 3,305,392 - - 1,496,785 2,646,272 - 3,305,392 659,120 - - 7.8% 5.0% Master Removers Group 2019 Limited (trading as Anthony Ward Thomas, Bishopsgate and Aussie Man & Van) A specialist logistics, storage and removals business 348,641 3,001,004 - - 348,641 1,044,971 - 3,001,004 1,956,033 - - 6.6% 4.6% Data Discovery Solutions Limited (trading as ActiveNav) Provider of global market leading file analysis software for information governance, security and compliance 1,408,640 2,624,447 - - 1,408,640 2,201,000 308,140 2,624,447 115,307 - - 7.7% 4.0% Manufacturing Services Investment Limited (trading as Wetsuit Outlet) Online retailer in the water sports market 1,166,551 1,164,582 1,166,551 1,166,551 2,333,102 2,331,110 - 2,331,133 23 - - 6.4% 3.6% Bella & Duke Limited A premium frozen raw dog food provider 877,381 2,050,122 - - 877,381 836,042 259,981 2,050,122 954,099 - - 4.4% 3.1% Arkk Consulting Limited Provider of services and software to enable organisations to remain compliant with regulatory reporting requirements 671,090 671,090 928,355 1,009,852 1,599,445 1,178,143 480,955 1,680,942 21,844 - - 6.7% 2.6% Tharstern Group Limited MIS & Commercial print software solutions 338,861 126,023 753,025 1,078,760 1,091,886 1,037,390 - 1,204,783 167, 393 - - 12.2% 1.8% Connect Childcare Group Limited Nursery management software provider 423,007 571,110 423,000 423,000 846,007 846,007 - 994,110 148,103 - - 3.0% 1.5% Vivacity Labs Limited Provider of artificial intelligence & urban trac control systems 914,754 914,754 - - 914,754 - 914,754 914,754 - - - 4.4% 1.4% Bleach London Holdings Limited Hair colourants brand 519,672 681,377 110,100 110,100 629,772 832,878 110,100 791,477 (151,501) - - 3.1% 1.2% Rota Geek Limited Workforce management software 874,000 765,890 - - 874,000 726,667 - 765,890 39,223 - - 4.4% 1.2% Spanish Restaurant Group Limited (trading as Tapas Revolution) Spanish restaurant chain 406,396 - 812,700 739,557 1,219,096 139,317 174,227 739,557 426,013 - - 6.7% 1.1% Investment Portfolio Summary as at 31 December 2021 Notes 1 ‘Other investments’ comprise principally loan stock instruments, and/or relatively small amounts of preference shares. ² Quoted on AIM. ³ Admitted to AIM during the year. Ahead of the Admission to AIM of Virgin Wines on 2 March 2021, the Company’s equity investment in Virgin Wines Holding Company Ltd (“VWHCL”) had been exchanged for an equity investment in Rapunzel Newco Limited (“RNL”), a company owned by the four Mobeus VCTs pro rata to each VCT’s share of its investment in Virgin Wines. Immediately prior to Admission, RNL exchanged its equity investment in VWHCL for an equity investment in Virgin Wines UK plc (“VWUK”). The Company is beneficially interested in VWUK, through its holding in RNL. RNL is the legal owner of the shares in VWUK, but each VCT is the beneficial holder. As part of Virgin Wines’ admission to AIM, the Company received repayment of its loan stock generating proceeds of £1.83 million. Strategic Report 25 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Ordinary shares Other investments 1 (loan stock/preference shares) Total cost at 31 December 2021 £ Total valuation at 31 December 2020 £ Total additional investments £ Total valuation at 31 December 2021 £ Unrealised gains/(losses) in year £ Net realised gains/(losses) in year £ Net proceeds in year £ % of equity held % of portfolio by value Cost at 31 December 2021 £ Valuation at 31 December 2021 £ Cost at 31 December 2021 £ Valuation at 31 December 2021 £ Preservica Limited Seller of proprietary digital archiving software 1,359,179 8,979,509 2,038,566 2,07 7,119 3,397,745 3,611,144 1,245,703 11,056,628 6,199,781 - - 13.1% 16.9% Virgin Wines UK plc (formerly Virgin Wines Holding Company Limited) 2,3 Online wine retailer 45,915 9,486,219 - - 45,915 6,312,889 - 9,486,219 5,058,228 (57,709) 1,827,189 8.3% 14.5% MPB Group Limited Online marketplace for used photographic equipment 1,095,252 5,764,694 - - 1,095,252 4,126,952 - 5,764,694 2,823,085 411,275 1,596,618 3.2% 8.8% My TutorWeb Limited (trading as MyTutor) Digital marketplace connecting school pupils seeking one-to-one online tutoring 2,464,757 5,015,751 - - 2,464,757 2,476,581 699,864 5,015,751 2,155,329 383,841 699,864 5.3% 7.6% EOTH Limited (trading as Equip Outdoor Technologies) Distributor of branded outdoor equipment and clothing including the Rab and Lowe Alpine brands 95,147 3,914,959 856,324 932,228 951,471 2,400,632 - 4,847,187 2,446,555 - - 1.7% 7.4% Media Business Insight Holdings Limited A publishing and events business focused on the creative production industries 1,089,103 2,424,108 1,135,939 1,135,939 2,225,042 1,013,748 - 3,560,047 2,855,153 188,864 497,718 15.7% 5.4% End Ordinary Group Limited (trading as Buster and Punch) Industrial inspired lighting and interiors retailer 1,496,785 3,305,392 - - 1,496,785 2,646,272 - 3,305,392 659,120 - - 7.8% 5.0% Master Removers Group 2019 Limited (trading as Anthony Ward Thomas, Bishopsgate and Aussie Man & Van) A specialist logistics, storage and removals business 348,641 3,001,004 - - 348,641 1,044,971 - 3,001,004 1,956,033 - - 6.6% 4.6% Data Discovery Solutions Limited (trading as ActiveNav) Provider of global market leading file analysis software for information governance, security and compliance 1,408,640 2,624,447 - - 1,408,640 2,201,000 308,140 2,624,447 115,307 - - 7.7% 4.0% Manufacturing Services Investment Limited (trading as Wetsuit Outlet) Online retailer in the water sports market 1,166,551 1,164,582 1,166,551 1,166,551 2,333,102 2,331,110 - 2,331,133 23 - - 6.4% 3.6% Bella & Duke Limited A premium frozen raw dog food provider 877,381 2,050,122 - - 877,381 836,042 259,981 2,050,122 954,099 - - 4.4% 3.1% Arkk Consulting Limited Provider of services and software to enable organisations to remain compliant with regulatory reporting requirements 671,090 671,090 928,355 1,009,852 1,599,445 1,178,143 480,955 1,680,942 21,844 - - 6.7% 2.6% Tharstern Group Limited MIS & Commercial print software solutions 338,861 126,023 753,025 1,078,760 1,091,886 1,037,390 - 1,204,783 167,393 - - 12.2% 1.8% Connect Childcare Group Limited Nursery management software provider 423,007 571,110 423,000 423,000 846,007 846,007 - 994,110 148,103 - - 3.0% 1.5% Vivacity Labs Limited Provider of artificial intelligence & urban trac control systems 914,754 914,754 - - 914,754 - 914,754 914,754 - - - 4.4% 1.4% Bleach London Holdings Limited Hair colourants brand 519,672 681,377 110,100 110,100 629,772 832,878 110,100 791,477 (151,501) - - 3.1% 1.2% Rota Geek Limited Workforce management software 874,000 765,890 - - 874,000 726,667 - 765,890 39,223 - - 4.4% 1.2% Spanish Restaurant Group Limited (trading as Tapas Revolution) Spanish restaurant chain 406,396 - 812,700 739,557 1,219,096 139,317 174,227 739,557 426,013 - - 6.7% 1.1% Strategic Report 26 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Ordinary shares Other investments 1 (loan stock/preference shares) Total cost at 31 December 2021 £ Total valuation at 31 December 2020 £ Total additional investments £ Total valuation at 31 December 2021 £ Unrealised gains/(losses) in year £ Net realised gains/(losses) in year £ Net proceeds in year £ % of equity held % of portfolio by value Cost at 31 December 2021 £ Valuation at 31 December 2021 £ Cost at 31 December 2021 £ Valuation at 31 December 2021 £ Caledonian Leisure Limited Provider of UK leisure and experience breaks 328,502 695,000 - - 328,502 - 328,502 695,000 366,498 - - 6.6% 1.1% Legatics Holdings Limited SaaS LegalTech software provider 663,011 663,011 - - 663,011 - 663,011 663,011 - - - 6.0% 1.0% Pets’ Kitchen Limited (trading as Vet’s Klinic) Veterinary clinics 360,640 360,640 270,480 270,480 631,120 - 631,120 631,120 - - - 4.5% 1.0% IPV Limited Provider of media asset software 619,487 619,487 - - 619,487 619,487 - 619,487 - - - 5.5% 0.9% Northern Bloc Ice Cream Limited Dairy-free ice cream producer 304,050 498,768 - - 304,050 304,050 - 498,768 194,718 - - 5.5% 0.8% Parsley Box Group plc (formerly Parsley Box Limited) 2,3 Supplier of home delivered, ambient ready meals targeting the over 60s 631,003 417,536 - - 631,003 1,937,571 272,535 417,536 (1,089,185) 542,834 1,246,218 3.1% 0.6% CGI Creative Graphics International Limited Vinyl graphics to global automotive, recreation vehicle and aerospace markets 476,612 - 973,134 397,434 1,449,746 390,849 - 397,434 6,585 - - 6.3% 0.6% RDL Corporation Limited Recruitment consultants for the pharmaceutical, and IT industries 173,932 - 826,068 317,413 1,000,000 151,247 - 317,413 166,166 - - 8.9% 0.5% Muller EV Limited (trading as Andersen EV) Provider of premium electric vehicle (EV) chargers 341,600 195,200 - - 341,600 217,904 146,400 195,200 (169,104) - - 7.2% 0.3% Kudos Innovations Limited Online platform that provides and promotes academic research dissemination 328,950 81,979 - - 328,950 152,488 - 81,979 (70,509) - 2.4% 0.1% Jablite Holdings Limited (in members’ voluntary liquidation) Manufacturer of expanded polystyrene products 339,974 - 36,109 49,597 376,083 49,597 - 49,597 - - - 9.1% 0.1% Veritek Global Holdings Limited Maintenance of imaging equipment 43,527 - 1,576,559 - 1,620,086 - - - - - - 15.4% 0.0% BookingTek Limited Software for hotel groups 582,300 - - - 582,300 - - - - - - 3.5% 0.0% Oakheath Limited (in members’ voluntary liquidation) Online platform that connects people seeking care home from experienced independent carers 485,730 - - - 485,730 - - - - - - 4.3% 0.0% Racoon International Group Limited Supplier of hair extensions, hair care products and training 419,959 - 64,388 - 484,347 - - - - - - 8.0% 0.0% Disposals in year Proactive Group Holdings Inc Provider of media services and investor conferences for companies primarily listed on secondary public markets - - - - - 1,900,421 - - - (6,183) 1,894,238 0.0% 0.0% Vian Marketing Limited (trading as Red Paddle Co) Design, manufacture and sale of stand-up paddleboards and windsurfing sails - - - - - 1,465,304 - - - 2,482,007 3,947,311 0.0% 0.0% Omega Diagnostics Group plc In-vitro diagnostics for food intolerance, auto-immune diseases and infectious diseases - - - - - 266,680 - - - 156,143 422,823 0.0% 0.0% Investment Portfolio Summary as at 31 December 2021 Strategic Report Notes 1 ‘Other investments’ comprise principally loan stock instruments, and/or relatively small amounts of preference shares. ² Quoted on AIM. 3 Admitted to AIM during the year. On 7 January 2021, a £0.26 million follow-on investment was made into Parsley Box Limited. The enlarged shareholding was admitted to AIM on 31 March 2021. Ahead of the admission to AIM, the Company’s equity investment in Parsley Box Limited had been exchanged for an equity investment in Parsley Box Group UK plc. Upon admission to AIM, the Company invested a further £0.01 million and realised proceeds of £1.25 million. 27 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Ordinary shares Other investments 1 (loan stock/preference shares) Total cost at 31 December 2021 £ Total valuation at 31 December 2020 £ Total additional investments £ Total valuation at 31 December 2021 £ Unrealised gains/(losses) in year £ Net realised gains/(losses) in year £ Net proceeds in year £ % of equity held % of portfolio by value Cost at 31 December 2021 £ Valuation at 31 December 2021 £ Cost at 31 December 2021 £ Valuation at 31 December 2021 £ Caledonian Leisure Limited Provider of UK leisure and experience breaks 328,502 695,000 - - 328,502 - 328,502 695,000 366,498 - - 6.6% 1.1% Legatics Holdings Limited SaaS LegalTech software provider 663,011 663,011 - - 663,011 - 663,011 663,011 - - - 6.0% 1.0% Pets’ Kitchen Limited (trading as Vet’s Klinic) Veterinary clinics 360,640 360,640 270,480 270,480 631,120 - 631,120 631,120 - - - 4.5% 1.0% IPV Limited Provider of media asset software 619,487 619,487 - - 619,487 619,487 - 619,487 - - - 5.5% 0.9% Northern Bloc Ice Cream Limited Dairy-free ice cream producer 304,050 498,768 - - 304,050 304,050 - 498,768 194,718 - - 5.5% 0.8% Parsley Box Group plc (formerly Parsley Box Limited) 2,3 Supplier of home delivered, ambient ready meals targeting the over 60s 631,003 417,536 - - 631,003 1,937,571 272,535 417,536 (1,089,185) 542,834 1,246,218 3.1% 0.6% CGI Creative Graphics International Limited Vinyl graphics to global automotive, recreation vehicle and aerospace markets 476,612 - 973,134 397,434 1,449,746 390,849 - 397,434 6,585 - - 6.3% 0.6% RDL Corporation Limited Recruitment consultants for the pharmaceutical, and IT industries 173,932 - 826,068 317,413 1,000,000 151,247 - 317,413 166,166 - - 8.9% 0.5% Muller EV Limited (trading as Andersen EV) Provider of premium electric vehicle (EV) chargers 341,600 195,200 - - 341,600 217,904 146,400 195,200 (169,104) - - 7.2% 0.3% Kudos Innovations Limited Online platform that provides and promotes academic research dissemination 328,950 81,979 - - 328,950 152,488 - 81,979 (70,509) - 2.4% 0.1% Jablite Holdings Limited (in members’ voluntary liquidation) Manufacturer of expanded polystyrene products 339,974 - 36,109 49,597 376,083 49,597 - 49,597 - - - 9.1% 0.1% Veritek Global Holdings Limited Maintenance of imaging equipment 43,527 - 1,576,559 - 1,620,086 - - - - - - 15.4% 0.0% BookingTek Limited Software for hotel groups 582,300 - - - 582,300 - - - - - - 3.5% 0.0% Oakheath Limited (in members’ voluntary liquidation) Online platform that connects people seeking care home from experienced independent carers 485,730 - - - 485,730 - - - - - - 4.3% 0.0% Racoon International Group Limited Supplier of hair extensions, hair care products and training 419,959 - 64,388 - 484,347 - - - - - - 8.0% 0.0% Disposals in year Proactive Group Holdings Inc Provider of media services and investor conferences for companies primarily listed on secondary public markets - - - - - 1,900,421 - - - (6,183) 1,894,238 0.0% 0.0% Vian Marketing Limited (trading as Red Paddle Co) Design, manufacture and sale of stand-up paddleboards and windsurfing sails - - - - - 1,465,304 - - - 2,482,007 3,947,311 0.0% 0.0% Omega Diagnostics Group plc In-vitro diagnostics for food intolerance, auto-immune diseases and infectious diseases - - - - - 266,680 - - - 156,143 422,823 0.0% 0.0% Strategic Report 28 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Investment Portfolio Summary as at 31 December 2021 Ordinary shares Other investments 1 (loan stock/preference shares) Total cost at 31 December 2021 £ Total valuation at 31 December 2020 £ Total additional investments £ Total valuation at 31 December 2021 £ Unrealised gains/(losses) in year £ Net realised gains/(losses) in year £ Net proceeds in year £ % of equity held % of portfolio by value Cost at 31 December 2021 £ Valuation at 31 December 2021 £ Cost at 31 December 2021 £ Valuation at 31 December 2021 £ BG Training Limited City-based provider of specialist technical training - - - - - 7,969 - - - 2,656 10,625 0.0% 0.0% Proceeds from companies realised in previous years 2 - - - - - - - - - 89,253 89,253 - - Total 21,694,408 54,992,652 11,971,298 9,708,030 33,665,706 41,225,310 6,235,292 64,700,682 25,278,957 4,192,981 12,231,857 98.7% Former Elderstreet Private Equity Portfolio Cashfac Limited Provider of virtual banking application software solutions to corporate customers 260,101 851,035 - - 260,101 451,386 - 851,035 399,648 - - 2.9% 1.3% Sift Group Limited Developer of business-to-business internet communities 135,391 32,750 - - 135,391 - 32,750 32,750 - - 1.3% 0.0% Total 395,492 883,785 - - 395,492 451,386 - 883,785 432,398 - - 1.3% Total Investment Portfolio 22,089,900 55,876,437 11,971,298 9,708,030 34,061,198 41,676,696 6,235,292 65,584,467 25,711,355 4,192,981 12,231,857 100.0% Total Investment Portfolio split by type Growth focused portfolio 3 19,162,017 43,840,087 6,606,076 6,728,887 25,768,093 32,713,007 6,235,292 50,568,974 17,457,830 3,969,917 9,807,072 77.1% MBO focused portfolio 3 2,927,883 12,036,350 5,365,222 2,979,143 8,293,105 8,963,689 - 15,015,493 8,253,525 223,064 2,424,785 22.9% Investment Adviser’s Total 22,089,900 55,876,437 11,971,298 9,708,030 34,061,198 41,676,696 6,235,292 65,584,467 25,711,355 4,192,981 12,231,857 100.0% Strategic Report Notes 1 ‘Other investments’ comprise principally loan stock instruments, and/or relatively small amounts of preference shares. 2 £63,591 was received in respect of Blaze Signs Holdings Limited, £21,132 was received in respect of Vectair Limited, £2,358 was received in respect of Bourn Bioscience Limited and £2,172 was received in respect of Machineworks Limited. 3 The growth focused portfolio contains all investments made after the change in the VCT regulations in 2015 plus some investments that are growth in nature made before this date. The MBO focused portfolio contains investments made prior to 2015 as part of the previous MBO strategy. 29 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Ordinary shares Other investments 1 (loan stock/preference shares) Total cost at 31 December 2021 £ Total valuation at 31 December 2020 £ Total additional investments £ Total valuation at 31 December 2021 £ Unrealised gains/(losses) in year £ Net realised gains/(losses) in year £ Net proceeds in year £ % of equity held % of portfolio by value Cost at 31 December 2021 £ Valuation at 31 December 2021 £ Cost at 31 December 2021 £ Valuation at 31 December 2021 £ BG Training Limited City-based provider of specialist technical training - - - - - 7,969 - - - 2,656 10,625 0.0% 0.0% Proceeds from companies realised in previous years 2 - - - - - - - - - 89,253 89,253 - - Total 21,694,408 54,992,652 11,971,298 9,708,030 33,665,706 41,225,310 6,235,292 64,700,682 25,278,957 4,192,981 12,231,857 98.7% Former Elderstreet Private Equity Portfolio Cashfac Limited Provider of virtual banking application software solutions to corporate customers 260,101 851,035 - - 260,101 451,386 - 851,035 399,648 - - 2.9% 1.3% Sift Group Limited Developer of business-to-business internet communities 135,391 32,750 - - 135,391 - 32,750 32,750 - - 1.3% 0.0% Total 395,492 883,785 - - 395,492 451,386 - 883,785 432,398 - - 1.3% Total Investment Portfolio 22,089,900 55,876,437 11,971,298 9,708,030 34,061,198 41,676,696 6,235,292 65,584,467 25,711,355 4,192,981 12,231,857 100.0% Total Investment Portfolio split by type Growth focused portfolio 3 19,162,017 43,840,087 6,606,076 6,728,887 25,768,093 32,713,007 6,235,292 50,568,974 17,457,830 3,969,917 9,807,072 77.1% MBO focused portfolio 3 2,927,883 12,036,350 5,365,222 2,979,143 8,293,105 8,963,689 - 15,015,493 8,253,525 223,064 2,424,785 22.9% Investment Adviser’s Total 22,089,900 55,876,437 11,971,298 9,708,030 34,061,198 41,676,696 6,235,292 65,584,467 25,711,355 4,192,981 12,231,857 100.0% Strategic Report Key policies The Board has put in place the following policies to be applied to meet the Company’s overall Objective and to cover specific areas of the Company’s business. Investment policy The Investment Policy is designed to meet the Company’s Objective: Investments The Company invests primarily in a diverse portfolio of UK unquoted companies. Investments are made selectively across a number of sectors, principally in established companies. Investments are usually structured as part loan stock and part equity in order to produce a regular income stream and to generate capital gains from realisations. There are a number of conditions within the VCT legislation which need to be met by the Company and which may change from time to time. The Company will seek to make investments in accordance with the requirements of prevailing VCT legislation. Asset allocation and risk diversification policies, including the size and type of investments the Company makes, are determined in part by the requirements of prevailing VCT legislation. No single investment may represent more than 15% (by VCT tax value) of the Company’s total investments at the date of investment. Liquidity The Company’s cash and liquid funds are held in a portfolio of readily realisable interest-bearing investments, deposit and current accounts, of varying maturities, subject to the overriding criterion that the risk of loss of capital be minimised. Borrowing The Company’s Articles of Association permit borrowings of amounts up to 10% of the adjusted capital and reserves (as defined therein). However, the Company has never borrowed and the Board would only consider doing so in exceptional circumstances. Diversity The Directors have considered diversity in relation to the composition of the Board and have concluded that its membership is diverse in relation to its breadth of experience. The Board comprises three men following the retirement of Helen Sinclair at the end of February 2022. The Company does not have any senior managers or employees. The Board has made a commitment to always consider diversity in making future appointments. Other policies In addition to the Investment Policy, the Diversity Policy and the policies on payment of dividends and share buybacks, which are detailed earlier in this section, the Company has adopted a number of further policies relating to: Environmental and social responsibility; Human rights; Anti-bribery; Global greenhouse gas emissions; Whistleblowing; Financial risk management; and Anti-Tax Evasion; further details of which are set out in the Directors’ Report on pages 38 to 46. 30 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Strategic Report Stakeholder Engagement and Directors’ Duties The Board has discussed the discharge of their Director’s duties under Section 172 of the Companies Act 2006 having regard to the factors set out under Provision 5 of the Association of Investment Companies (AIC) Code and in line with the UK Corporate Governance Code. The views of and the impact of the Company’s activities on the key stakeholders are an important consideration for the Board when making relevant decisions. The Board, in normal circumstances, engages directly with stakeholder groups through either regular or annual meetings and investor presentations to assist the Directors in understanding the issues to which they must have regard. The table below sets out the interests of key stakeholders that have been considered throughout the year during the Board’s discussions and in decision making. Stakeholders Engagement Type Outcome All Stakeholders Change in management arrangements After careful consideration and due diligence, the Board believed that consenting to the novation of the investment advisory arrangements was in the interests of the Company’s Shareholders and stakeholders. The Board expected the creation of the enlarged VCT team to be well received by the market as creating an exciting and potent commercial force that should lead to enhanced prospects for Shareholders. In the context of a VCT sector that is evolving, this view is predicated on the following main factors: Scale Advantage – The integration of the Mobeus and Baronsmead VCT teams within Gresham House would create one of the largest VCT teams in the sector with the coverage, experience, contacts and know how to access more and higher quality investment opportunities. The greater breadth and depth of resource in portfolio and talent management should also be valuable in assisting the Mobeus VCTs’ existing portfolio companies to grow successfully. Continuity – Trevor Hope and Clive Austin will continue to lead the VCT team. This management group is well known and has been highly regarded by Shareholders for a considerable period. The Boards are confident that the team will continue to build the Mobeus VCTs’ portfolios and enhance their value. Gresham House’s investment philosophy is similar to that developed over many years by Mobeus, and the procedure for undertaking due diligence and approving new investments is substantially the same as before. Portfolio Diversification and Wider Investment – The access to a much larger asset base and investment opportunities should enable the combined VCT investment team to build more diversified VCT portfolios across a broader range of sizes and stages of investment. The Board believes that this combined VCT investment team will be a major force in the supply of capital to the VCT sector and it is anticipated that the team’s enhanced market position should attract strong deal flow. Investment in Capability – The Mobeus VCT investment team has delivered outstanding performance over many years, but it has become clear that the changing demands of the market mean that the requirement for additional investment in people, technology and processes could have become constrained within the framework of the existing Mobeus partnership structure. The Board can confirm that, in the process of its novation, no material changes were made to the terms of the investment advisory arrangements. Shareholders can also be assured that the Board’s track record of governance and independence will be maintained. 31 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Strategic Report Shareholders The key mechanisms of Shareholder engagement is: Annual General Meeting Annual, Half-year Reports and Interim Management Statements Annual Investor Events RNS Announcements Website Oer for subscription Whilst Shareholders would normally attend the AGM and engage with the Board and Investment Adviser, this was not possible under the COVID-19 restrictions for the 2021 AGM. However, given the relaxation of UK Government COVID restrictions, the 2022 AGM is planned to take place in person. There will also be a live stream providing access to view the meeting remotely, although only Shareholders physically attending will be able to formally take part in the meeting and vote on resolutions on the day. Shareholders unable to attend have therefore been encouraged to submit their votes on resolutions via proxy forms ahead of the meeting. A recording of the AGM webcast will be available on the Company’s website under Key Shareholder Information. Shareholders are provided with Annual and Half-Year Reports in hard or soft copy according to their choice, which are also available on the Company’s website. Voluntary Interim Management Statements are released in the quarters between reports to ensure Shareholders are kept up to date with events. This was particularly important during the pandemic, given the resultant uncertainty. The website is an important source of information for Shareholders and announcements are also regularly made through the London Stock Exchange. The Share buyback programme has continued to be oered throughout the year. This provides Shareholders with liquidity if they wish to sell their shares, at a price close to the latest announced NAV per share, the Board having considered the interests of remaining Shareholders. Further details are contained in the Chairman’s Statement on page 4 and in the Director’s Report on page 38. Shareholders are welcome to contact the Chairman or the Investment Adviser by email as advised on page 86 of this Report. The Annual Shareholder Event was held as a virtual event and took place on 25 February 2022. Please register to view a recording of the event which is available via the Company’s website here: https://mvcts.connectid.cloud/. The Company seeks to create value for Shareholders by generating good returns which are eventually distributed to Shareholders as dividends. The importance of tax-free dividends to Shareholders is recognised by the Board and considered at each quarterly meeting and decisions were made to declare two interim dividends totalling 9.00 pence per share for payment in respect of the year. The Company’s dividend target has consistently been achieved or exceeded as outlined in the Chairman’s Statement on page 3 and in the Strategic Report. The liquidity level of the Company has remained strong and is managed with the primary aim of preserving capital, as discussed at each Board meeting. Liquidity levels are managed after considering, inter alia, applicable annual dividend commitments as well as the provision of the buyback facility. Stakeholders Engagement Type Outcome 32 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Strategic Report The Board, along with the three other Mobeus VCTs, opened Oers for Subscription on 20 January 2022 having considered: the impact of dilution on Shareholder’s holdings; the ability to adhere to the dividend policy of the Company; the eect on the Net Asset Value and the ability of the Company and its liquidity levels to be able to meet HMRC’s VCT investment rules and timeline; the costs involved in issuing a prospectus charged to Shareholders; the risk to performance and the equal treatment of investors across the four Mobeus VCTs and those investors that the Company will co-invest with. Suppliers Including: Registrar, Broker, Auditor, Lawyer, Sponsor, Banker and the VCT Status Adviser The Investment Adviser regularly communicates with each of the professional advisers and secures an annual confirmation of the policies they have in place. The Board review the performance of each provider on an annual basis. Government & Regulators The Board is committed to conducting business in line with the appropriate laws and regulation. Mobeus Income & Growth 4 VCT plc does not provide financial contributions to political parties or lobby groups. As a UK listed company the Board and Investment Adviser comply with the Companies Act, the UKLA, HMRC, UK Accounting Standards and FCA regulatory requirements in addition to the Alternative Investment Fund Managers Directive, to ensure the Company can continue to trade. Non-compliance with the VCT regulations in particular is viewed as a principal risk for the Company. The Company continued to comply with these regulations throughout the year and to the date of this Report. Investee Companies The Board has delegated authority for the day-to-day management of the Company to the Investment Adviser and engages with the Investment Adviser in setting, approving and overseeing the execution of the business strategy and related policies. The Board aims to have a diverse mix of companies across a range of dierent sectors and regularly reviews the composition of the portfolio. The Investment Adviser reports at the Company’s quarterly Board meetings on each of the portfolio companies. Members of the Investment Adviser sit on the majority of the portfolio companies’ boards. This is to provide input on key matters such as advancing the shareholder value agenda, ensuring class leading corporate governance and encouraging best practice in areas such as ESG. Considerable support continued to be provided to the investee companies during the year with regular communication undertaken outside of scheduled board meetings. Gresham House organises, when permitted in person and more commonly by virtual means, seminars and events that involve portfolio companies so that they can benefit from the Gresham House network. Investment Adviser The Investment Adviser’s performance is vital for the Company to deliver its investment strategy, meet its objectives and generate investment returns for Shareholders, and is a crucial relationship for the Board. The Investment Adviser meets with the Board at each quarterly meeting and is in frequent contact throughout the periods in between meetings e.g. to approve investment transactions. All key strategic and operational topics are discussed in detail and a close dialogue is maintained with the Board. The Board take an active interest in the challenges faced by the portfolio companies. The Board considers each potential disposal based on the company’s performance, market conditions and the oer(s) in its decision to sell the Company’s holding. The Investment Adviser’s performance is evaluated annually and its re-appointment is dependent on the outcome of that evaluation. Stakeholders Engagement Type Outcome 33 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Strategic Report 34 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Principal and Emerging risks, management and regulatory environment The Directors acknowledge the Board’s responsibilities for the Company’s internal control systems and have instigated systems and procedures for identifying, evaluating and managing the significant and emerging risks faced by the Company. This includes a key risk management review and robust assessment of the risks, which takes place at each quarterly board meeting. Further details of these are contained in the corporate governance section of the Directors’ Report on pages 42 to 44. The principal risks and the emerging risk identified by the Board are set out below: Risk Possible consequence How the Board manages risk Loss of approval as a Venture Capital Trust The Company must comply with section 274 of the Income Tax Act 2007 (“ITA”) which allows it to be exempt from capital gains tax on investment gains. Any breach of these rules may lead to the Company losing its approval as a Venture Capital Trust, qualifying Shareholders who have not held their shares for the designated holding period having to repay the income tax relief they obtained and future dividends paid by the Company becoming subject to tax. The Company would also lose its exemption from corporation tax on capital gains. The Company’s VCT qualifying status is continually reviewed by the Investment Adviser and confirmed at each Board meeting. Regular reports are received from the VCT Status Adviser retained by the Board in order to monitor the Company’s ongoing compliance with the VCT Rules. Economic and Political Events such as the war in Ukraine, the COVID-19 pandemic, Brexit, an economic recession, supply shortages or a movement in sterling or in interest rates, could aect trading conditions for smaller companies and consequently the value of the Company’s qualifying investments. Movements in UK Stock Market indices may aect the valuation of the Company’s investments, as well as aecting the Company’s own share price and its discount to net asset value. The invasion of Ukraine and resulting economic sanctions imposed on trade with Russia has also impacted global financial markets. Whilst the portfolio has limited direct exposure to these geographies, this action is expected to exacerbate macroeconomic risk factors in the short term. The Board monitors the portfolio as a whole to: (1) ensure that the Company invests as far as possible in a diversified portfolio of companies; (2) ensure that developments in the macro- economic environment such as movements in interest rates are monitored; and (3) with regard to COVID-19, the Investment Adviser holds ongoing discussions with all the portfolio companies to ascertain where support is required. Cash comprises a significant proportion of the net assets of the Company, further to the successful realisations and the fund-raise earlier in the year giving the Company a strong liquidity position. The portfolio has minimal exposure to sectors such as leisure, hospitality, retail travel which are currently more at risk. Investment Investment in VCT qualifying earlier stage unquoted small companies involves a higher degree of risk than investment in fully listed companies. Smaller companies often have limited product lines, markets or financial resources, may not be profitable at the point of investment and may be dependent for their management on a smaller number of key individuals. This may leaI to variable investment returns and the use of more subjective valuation methodologies. The Board regularly reviews the Company’s investment strategy. Careful selection and review of the investment portfolio occurs on a regular basis. The Investment Adviser has provided a growing pipeline of compliant investment opportunities and continues to strengthen its investment team. The valuation of the investment portfolio and valuation methodologies are reviewed by the Board each quarter. Regulatory The Company is required to comply with the Companies Act, the Listing Rules of the UK Listing Authority and United Kingdom Accounting Standards. Changes to and breach of any of these might lead to suspension of the Company’s Stock Exchange listing, financial penalties, a qualified audit report or the loss of the Company’s status as a VCT. Furthermore, changes to the UK VCT legislation or the State-aid rules could have an adverse eect on the Company’s ability to achieve satisfactory investment returns. Regulatory and legislative developments are kept under review by the Company’s solicitors and the Board. Strategic Report 35 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Strategic Report Risk Possible consequence How the Board manages risk Financial and operating Failure of systems (including breaches of data security) at any of the third-party service providers that the Company has contracted with could lead to inaccurate reporting or monitoring. Inadequate controls could lead to the misappropriation or insecurity of assets. Outsourcing and the increase in remote working could give rise to cyber and data security risks, particularly relating to the threat of ransomware attacks, as well as internal control risk. The Board carries out a bi-annual review of the internal controls in place and reviews the risks facing the Company at Board meetings and receives control reports by exception. It reviews the performance of the service providers annually and has obtained assurance that such providers have controls in place to reduce the risk of breaches of their cyber security. Market Movements in the valuations of the Company’s investments will, inter alia, be connected to movements in UK Stock Market indices as well as aecting the Company’s own share price and its discount to net asset value. The Board receives quarterly valuation reports from the Investment Adviser and, where necessary, challenges its valuation process and metrics. The Investment Adviser alerts the Board about any adverse movements. Asset liquidity The Company’s investments may be dicult to realise. The Board receives reports from the Investment Adviser and reviews the portfolio at each quarterly Board meeting. It carefully monitors investments where a particular risk has been identified. Environmental, Social and Governance Emerging Risk Non-compliance with current and future reporting requirements could lead to a fall in demand from investors. That may aect the level of capital the Company has available to meet its investment objectives. ESG and climate change is taken into account when considering new investment proposals. The Investment Adviser monitors the potential impact on investee companies of any proposed new legislation regarding environmental, social and governance matters and advises and adapts accordingly. The Board recognises that climate change is an important emerging risk that the Company is taking into account in their strategic planning although the Company itself has little direct impact on environmental issues. Measures have been introduced to reduce the cost and environmental impact of providing paper copies of Shareholder correspondence and to decrease the amount of travel undertaken. The risk profile of the Company changed as a result of changes to VCT legislation 2015. As the Company is required to focus its new investment activity on growth capital investments in younger companies it is anticipated that investment returns will be more volatile and have a higher risk profile. The Board also discusses emerging risks as and when they arise, such as the COVID-19 pandemic, and puts in place mitigating actions to manage the risk. In an environment of ultra-low interest rates, returns on liquidity may impact overall performance. This factor is monitored by the Board with the objective of optimising returns on liquid funds whilst minimising capital risk. 36 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Strategic Report Going concern and viability of the Company The Board is required to assess the Company’s operation as a “going concern”. The Company’s business activities, together with the factors likely to aect its future development, performance and position are set out in the preceding pages of this Strategic Report. The majority of companies in the portfolio are well funded and the portfolio taken as a whole remains resilient and well-diversified, although the impact of COVID-19, the war in Ukraine, Brexit and supplier shortages may still impose considerable demands on the liquidity of some of these companies in the near- term. The Board believes the recent fundraise will assist the Company in meeting those needs for liquidity, where justified. The major cash outflows of the Company (namely investments, share buybacks and dividends) are within the Company’s control. Accordingly, the Board believes that the Company’s cash position, noting the successful fundraise shortly after the year-end, is adequate to enable the Company to continue as a going concern under any plausible stress scenario. Further details of this assessment are shown within Note 2 on page 62. The Board’s assessment of liquidity risk, and details of the Company’s policies for managing financial risk and its capital, are shown in Notes 15 and 16 on pages 72 to 79. Accordingly, the Directors believe that it is appropriate to continue to apply the going concern basis of accounting in preparing the annual Financial Statements. Furthermore, the Directors have considered whether there are any material uncertainties that the Company may face during the twelve months from the date of approval of the financial statements that may impact on its ability to operate as a going concern. In particular, the Directors have continued to consider the impact of changes to VCT legislation. No further material uncertainties have been identified by the Board. Viability Statement The UK Corporate Governance Code includes a requirement for companies to include a “Viability Statement” in the Annual Report addressed to Shareholders with the intention of providing an improved and broader assessment of long term solvency and liquidity. The Code does not define “long term” but expects the period to be longer than twelve months with individual companies choosing a period appropriate to the nature of their own businesses. The Directors have chosen a period of three years, as explained further below. The Directors have carried out a robust assessment comprising the Principal and Emerging risks facing the Company, such as ESG and Climate Change as shown on pages 34 and 35. Subsequent to this review they have a reasonable expectation that the Company will continue to operate and meet its liabilities, as they fall due, for the next three years. The Directors believe that a three-year period is appropriate given the frequency with which it is necessary to review and assess the impact of past, current and proposed regulatory changes. A period greater than three years is considered to be too uncertain for it to be meaningful. The Directors’ assessment has been made with reference to the Company’s current position and prospects, the Company’s present strategy, the Board’s risk appetite and the Company’s principal and emerging risks and how these are managed, as described on pages 34 and 35. The Board is mindful of these risks but considers that its actions to manage those risks provide reasonable assurance that the Company’s aairs are safeguarded for the stated period. The Directors have reached this conclusion after giving careful consideration to the Company’s strategy. They believe the Company’s current strategy of “providing investors with a regular income stream by way of tax-free dividends and to generate capital growth through portfolio realisations” remains valid. The Board has focused upon the range of future investments that the Company will be permitted to fund under the current VCT legislation. The Board expects that positive returns should continue to be achievable from future investments and from the existing portfolio. The Company has made four more new investments in compliance with the VCT rules introduced in 2015 and its revised Investment Policy, and the Investment Adviser continues to build a healthy pipeline of such investment opportunities. The Board will continue to monitor this assumption on a regular basis and is encouraged, in the current circumstances, by the returns generated from some of these investments to date. The Board will continue to monitor returns from growth capital investments on a regular basis and the prospective returns thereon over the next three years. The Board considers that the Company has sucient liquidity to maintain its present investment rate in the short to medium- term. Shareholders should be aware that, under the Company’s Articles of Association, it is required to hold a continuation vote at the next AGM falling after the fifth anniversary of last allotting shares. As shares were last allotted in March 2022 (under the Oer for Subscription), this factor has not aected the Board’s assumptions for the next three years. Future Prospects For a discussion of the Company’s future prospects (both short and medium-term), please see the Chairman’s Statement on pages 4 and 5 and the Investment Adviser’s Review on page 18. Jonathan Cartwright Chairman 6 April 2022 37 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Reports of the Directors Board of Directors Jonathan Cartwright Independent, Non-Executive Chairman Date of appointment: 7 September 2020 Experience : Jonathan is a qualified Chartered Accountant with significant experience of the VCT and investment trust sectors. He joined Caledonia Investments plc in 1989, serving as finance director from 1991 to 2009. Currently he is a Non-Executive Director and Chairman of the Audit Committee of British Smaller Companies VCT plc, Chairman of BMO Capital and Income Investment Trust plc and a Non- Executive Director of Tennants Consolidated Limited where he also chairs the Audit Committee. Jonathan is a former Chairman of BlackRock Income and Growth Investment Trust plc and Aberforth Split Level Income Trust plc. He has also served as a Non-Executive Director of The Income & Growth VCT plc between 2010 and 2020, where he was Chairman of the Audit Committee followed by an interim appointment as Chairman of the Board. Graham Paterson Independent, Non-Executive Director Date of appointment: 10 May 2019 Experience : Graham is an investment and financial services professional with over 20 years’ experience in the private equity industry. A chartered accountant, Graham was one of the founding partners of SL Capital Partners LLP, (formerly Standard Life Investments (Private Equity) Ltd) where he was a Partner and Board Member until 2010. During his 13 years at SL Capital, he was one of the managers of Standard Life Private Equity Trust plc and was a member of the advisory boards to a number of leading private equity fund managers. In 2013, Graham co-founded TopQ Software Ltd, a technology company which develops software for the private equity industry. TopQ Software was acquired by eVestment Inc (now part of NASDAQ Inc) in 2015, where until early 2018, Graham was a Director of their private markets data and analytics business. Graham was Chairman of Octopus VCT 4 plc until 2018 and is currently a Non-Executive Director of Baillie Giord US Growth Trust plc, Invesco Perpetual UK Smaller Companies Investment Trust plc and Chairman of Datactics Ltd. Christopher Burke Independent, Non-Executive Director Date of appointment: 26 November 2019 Experience : Christopher has spent over 35 years in the Telecommunications, IT and Technology industries in a very International career. Christopher has held both Senior Technical and General Management responsibilities in a Telecoms Equipment Manufacture (Nortel), Fixed Line Carrier (Energis), Wireless Service Provider company (Vodafone), and a User Equipment Manufacturer (RIM). After graduating from university in 1982 with a Bachelor of Computer Science, Christopher spent 15 years with Bell Northern Research (R&D for Northern Telecom) and Nortel holding a variety of roles in software development, operations and ultimately Sales, working across North America, Europe and Asia. From 1997 to 2000 Christopher was CTO at Energis Communications, forming part of the executive team that led Energis through IPO and into the FTSE 40. From 2001 to 2005, Christopher worked at Vodafone, where he was Vodafone’s first Chief Technology Ocer (CTO) responsible for Vodafone UK’s technology, product architecture, design, procurement, development, support and operations. Christopher’s last position in a public company was as Managing Director for Research in Motion (RIM) in Europe, Middle East and Africa (EMEA), departing in 2009. Since 2009, Christopher has spent most of his time co-founding Companies and developing his own Investment Fund/Advisory Business. For details of the share interest and remuneration of the Directors please see pages 48 and 49 of the Directors’ Remuneration Report. Details of the attendance record of the Directors is also reported in the Directors’ Remuneration Report on page 50. Reports of the Directors The Directors present the Annual Report and Audited Financial Statements of the Company for the year ended 31 December 2021. The Corporate Governance Statement on pages 42 to 44, and the Report of the Audit Committee on pages 45 and 46, form part of this Directors’ Report. The Board believes that the Annual Report and Financial Statements taken as a whole is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company’s performance, position, business model and strategy. The Company is registered in England and Wales as a Public Limited Company (registration number 03707697). The Company has satisfied the requirements for full approval as a Venture Capital Trust under section 274 of the Income Tax Act 2007 (“ITA”). It is the Directors’ intention to continue to manage the Company’s aairs in such a manner as to comply with section 274 of the ITA. To enable capital profits to be distributed by way of dividends, the Company revoked its status as an investment company as defined in section 833 of the Companies Act 2006 (“the Companies Act”) on 28 July 2008. The Company does not intend to re-apply for such status. Share capital The Company’s Ordinary shares of 1penny each (“shares”) are listed on the London Stock Exchange. Buyback of shares The following disclosure is made in accordance with Part 6 of Schedule 7 of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended in 2013). The reason the Company makes market purchases of its own shares is to enhance the liquidity of the Company’s shares and to seek to manage the level and volatility of the discount to Net Asset Value at which the Company’s shares may trade. At the Annual General Meeting of the Company held on 18 May 2021, Shareholders granted the Company authority, pursuant to section 701 of the Companies Act 2006, to make market purchases of up to 14.99% of the issued share capital of the Company at that date. Such authority has been in place throughout the year under review. During the year under review, the Company bought back 1,309,349 (2020: 1,245,646) of its own shares at a total cost of £1,230,702 (2020: £728,216) including expenses. These shares represented 1.6% of the issued share capital at the beginning of the year (2020: 1.9%). All shares bought back by the Company were subsequently cancelled. Issued Share Capital The issued share capital of the Company as at 31 December 2021 was £833,897 (2020: £840,040) and the number of shares in issue at this date was 83,389,721 (2020: 84,004,018). Substantial interests As at the date of the Report, the Company had not been notified of any beneficial interest exceeding 3% of the issued share capital. Dividends Shareholders received interim dividends in respect of the year ended 31 December 2021 of 5.00 and 4.00 pence per share on 6 August 2021 and 7 January 2022 respectively. Directors The names, dates of appointment and brief biographical details of each of the Directors are given on the previous page of this Annual Report. Disclosure of Information to the Auditor So far as each of the Directors in oce at 31 December 2021 are aware, there is no relevant audit information of which the auditor is unaware. They have individually taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the Company’s Auditor is aware of that information. Director’s indemnity and ocers’ liability insurance The Directors have individually entered into Deeds of indemnity with the Company which indemnifies each Director, subject to the provisions of the Companies Act 2006 and the limitations set out in each deed, against any liability arising out of any claim made against him or her in relation to the performance of their duties as Directors of the Company. Copies of each Deed of indemnity entered into by the Company for the Directors are available at the registered oce of the Company. The Company maintains a Directors’ and Ocers’ liability insurance policy. The policy does not provide cover for fraudulent or dishonest actions by the Directors. Environmental and social responsibility policies The Board recognises its obligations under Company law to provide information in this respect about environmental matters (including the impact of the Company’s business on the environment), human rights and social and community issues, including information about any policies the Company has in relation to these matters and the eectiveness of these policies. The Board has recognised Climate Change as an emerging risk, as referenced on page 35, and takes full consideration of relevant factors within the overall assessment of potential investee companies. It is considered alongside investment assessments of potential investee companies. The Board seeks to maintain high standards of conduct in respect of ethical, environmental, governance and social issues and to conduct the Company’s aairs responsibly. It considers relevant social and environmental matters when appropriate and particularly with regard to investment decisions. The Investment Adviser encourages good practice within the companies in which the Company invests. The Board seeks to avoid investing in certain areas which it considers to be unethical. This includes giving particular consideration to the inherent reputation of the sector (including past history, scandal or adverse media coverage), rapidly changing public perceptions of industry sectors or potential ethical concerns for wider stakeholders. It also does not invest in companies which do not operate within relevant ethical, environmental and social legislation or otherwise fail to comply with appropriate industry standards. Following the novation of the advisory agreement to Gresham House on 30 September 2021, a market leader that is well-resourced with knowledge and expertise in sustainability, the Investment Adviser will align its current ESG procedures and protocols to the highest standards as set out and informed by Gresham House plc. The Investment Adviser believes that this approach will contribute towards the enhancement of Shareholder value going forward. 38 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Reports of the Directors Directors’ Report The Company does not have any employees or ocers and the Board therefore believes that there is limited scope for developing environmental, social or community policies. The Company has however adopted electronic communications for Shareholders as a means of reducing the volume of paper that the Company uses to produce its reports. It uses mixed source paper from well-managed forests as endorsed by the Forest Stewardship Council for the printing of its circulars and Annual and Half-Year reports. The Investment Adviser is conscious of the need to reduce its impact on the environment and has taken a number of initiatives in its oces including recycling and the reduction of its energy consumption. Global greenhouse gas emissions The Company has no greenhouse gas emissions to report from its operations, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors’ Reports) Regulations 2013, (including those within the Company’s underlying investment portfolio). The Company does not fall within the scope of The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 eective as of 1 April 2019 which implements the Government’s policy on Streamlined Energy and Carbon Reporting, replacing the Carbon Reduction Commitment Scheme. The 2018 Regulations require companies that have consumed over 40,000 kilowatt-hours of energy to include energy and carbon information in their Directors’ Report. This does not apply to the Company as it qualifies as a low energy user. Human rights policy The Board seeks to conduct the Company’s aairs responsibly and gives full consideration to the human rights implications of its decisions, particularly with regard to investment decisions. Anti-bribery policy The Company has adopted a zero- tolerance approach to bribery and has established an anti-bribery policy and procedures, copies of which are available in the Corporate Governance section of the Company’s website: www.mig4vct.co.uk Whistleblowing policy The Board has considered the recommendation made in the UK Corporate Governance Code with regard to a policy on whistleblowing and has reviewed the arrangements at the Investment Adviser under which sta may, in confidence, raise concerns. It has concluded that adequate arrangements are in place at the Investment Adviser for the proportionate and independent investigation of such matters and, where necessary, for appropriate follow-up action to be taken by the Investment Adviser. The Board has also asked each of its service providers to confirm that they have a suitable whistle blowing policy in place. Anti-Tax Evasion The Company has also adopted a zero-tolerance approach to tax evasion in compliance with the Criminal Finance Act 2017 and the corporate criminal oence of failing to take reasonable steps to prevent the facilitation of tax evasion. The Company has applied due diligence procedures, taking an appropriate risk-based approach, in respect of persons who perform or will perform services on behalf of the Company, in order to mitigate risks. Financial risk management The main risks arising from the Company’s financial instruments are due to fluctuations in market prices, investment risk, liquidity risk, interest rates and credit risk. The Board regularly reviews and agrees policies for managing these risks and full details can be found in Note 15 to the Financial Statements on pages 72 to 79 of this Annual Report. Post balance sheet events For a full list of the post balance sheet events that have occurred since 31 December 2021, please see Note 18 to the Accounts on page 79. Articles of Association The Company may amend its Articles of Association (“the Articles”) by special resolution in accordance with section 21 of the Companies Act 2006. It is not the Company’s intention to change its Articles at the forthcoming AGM. Annual General Meeting The Notice of the Annual General Meeting, which will be held at 11:30 am on Tuesday, 17 May 2022 at the oces of Shakespeare Martineau LLP, 6th Floor, 60 Gracechurch Street, London EC3V 0HR is set out on pages 82 to 84 of this Annual Report. A proxy form for the meeting is enclosed separately with Shareholders’ copies of this Annual Report. Proxy votes may be submitted electronically via the Link Group Signal Shares Portal at www.signalshares.com. Shareholders may also request a hard copy proxy form by contacting the Company’s Registrar, Link Group, using their details as stated on page 86. Shareholders are encouraged to lodge their proxy vote and appoint the Chairman of the Meeting as their proxy, as soon as possible. Shareholders are expected to be able to attend the AGM in person this year. However, should this change, Shareholders will be notified by an RNS announcement as well as on the Company’s website. Shareholders will also be able to attend via a webcast which will also be available at the same time for those Shareholders who cannot attend in person however, please note that you will not be able to vote via this method and so are encouraged to return your proxy form before the deadline of 13 May 2022. Details of how to join will be shown on the Company’s website. Shareholders may send any questions on the resolutions proposed to the following email address: AGM@ greshamhouse.com and a response will be provided prior to the deadline for lodging your proxy vote. Voting on the resolutions will be conducted at the meeting on a show of hands. Resolutions 1 to 7 are being proposed as ordinary resolutions requiring more than 50% of the votes cast at the meeting to be in favour and resolutions 8 and 9 will be proposed as special resolutions requiring the approval of at least 75% of the votes cast at the meeting. The following is an explanation of the business to be proposed: Resolution 1 – To receive the Annual Report and Financial Statements The Directors are required to present the Financial Statements, Directors’ report and Auditor’s report for the financial year ended 31 December 2021 to the meeting. Resolution 2 – To approve the Directors’ Remuneration Report Under section 420 of the Companies Act 2006 (the “Act”), the Directors must prepare an annual report detailing the remuneration of the Directors and a statement by the chairman of the Remuneration Committee (together the “Directors’ Remuneration Report”). The Act also requires that a resolution be put to Shareholders each year for their approval of that report. The Directors’ Remuneration Report can be found on 39 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Reports of the Directors pages 47 to 50 of this Annual Report and Financial Statements. Resolution 2 is an advisory vote only. Full details of Directors’ remuneration can be found within the Directors’ Remuneration Report on pages 48 and 49 of this Annual Report. Resolutions 3 to 5 – To elect and re-elect the Directors The Company’s Articles of Association require that each Director appointed to the Board shall retire and seek election at their first AGM following appointment and every three years thereafter. The Board considers that it is not appropriate for the Directors to be appointed for a specified term as recommended by principle 3 of the AIC Code. The Board has previously agreed that each Director will retire and oer themselves for re-election annually after serving on the Board for more than nine years. However, following the publication of the revised UK Corporate Governance Code in July 2018, which applied to the Company from 1 January 2019 onwards, the Board agreed to follow the recommendation of provision 18, namely that all directors be subject to annual re-election. Jonathan Cartwright Independent non-executive chairman Following an evaluation of Jonathan Cartwright’s performance, the remaining Directors agree that Jonathan carries out his duties eectively and that he is independent. His substantial experience significantly enhances the eectiveness of the Board and the Directors have no hesitation in recommending his election to Shareholders. Graham Paterson Independent non-executive director Following a review of his performance, the remaining Directors agree that Graham carries out his duties eectively and makes a substantial contribution to the Company’s long-term sustainable success in his role of chairman of the Audit Committee. The remaining Directors are confident that he is a strong and eective director and have no hesitation in recommending his re-election to Shareholders. Chris Burke Independent non-executive director Following a review of Chris’s performance, the Directors agree that he continues to carry out his duties eectively and makes a substantial contribution to the Company’s long-term sustainable success. Chris was appointed as chairman of the Investment Committee with eect from 1 March 2021, succeeding Helen Sinclair in the role following her retirement from the Company. He was also appointed a member of the Audit and Nomination & Remuneration Committees on the same date. The Directors are confident that he is a strong and eective director and have no hesitation in recommending his re-election to Shareholders. The Directors believe that the Board comprises an appropriate balance of skills, experience and knowledge and consider that another Non-Executive Director appointment is not necessary at this time. Brief biographical details of the Directors are given on page 37 of this Annual Report. Resolution 6 – To reappoint BDO LLP as auditor of the Company, to hold oce until the conclusion of the next general meeting at which accounts are laid before the Company and to authorise the Directors to determine the remuneration of the auditor. At each meeting at which the Company’s accounts are presented to its members, the Company is required to appoint an auditor to serve until the next such meeting. The Board, on the recommendation of the Audit Committee, recommends the re- appointment of BDO LLP. This resolution also gives authority to the Directors to determine the remuneration of the auditor. For further information, please see the report of the Audit Committee on pages 45 and 46. Resolution 7 – Authorities for the Directors to allot shares in the Company and Resolution 8 – to disapply the pre-emption rights of members These two resolutions grant the Directors the authority to generally allot shares for cash to a limited and defined extent otherwise than pro rata to existing Shareholders. Resolution 7 will enable the Directors to allot new shares up to an aggregate nominal value of £304,199, representing one-third of the existing issued share capital of the Company as at the publication date of the Notice convening the Annual General Meeting. Under section 561(1) of the Act, if the Directors wish to allot new shares or sell or transfer treasury shares for cash they must first oer such shares to existing Shareholders in proportion to their current holdings. It is proposed by Resolution 8 to sanction the disapplication of such pre-emption rights in respect of the allotment of equity securities: (i) with an aggregate nominal value of up to, but not exceeding, £136,889 (representing approximately 15% of the existing issued share capital at the time of the circulation of the notice of the AGM) in connection with oer(s) for subscription; (ii) with an aggregate nominal value of up to, but not exceeding, 10% of the issued share capital from time to time pursuant to any dividend investment scheme operated by the Company; and (iii) otherwise than pursuant to (i) or (ii) above, with an aggregate nominal value of up to, but not exceeding, 10% of the issued share capital from time to time, in each case where the proceeds may be used in whole or part to purchase the Company’s shares in the market. The Company will only allot shares at or above NAV per share, which includes in relation to the Dividend Investment Scheme. The Directors thus seek to manage any potential dilution of existing shareholdings as a result of the disapplication of Shareholders’ pre- emption rights proposed in resolution 8. The Company does not currently hold any shares as treasury shares. Both of these authorities, unless previously renewed, varied or revoked, will expire on the date falling fifteen months after the passing of the resolution or, if earlier, on the conclusion of the Annual General Meeting of the Company to be held in 2023. However, the Directors may allot securities after the expiry dates specified above in pursuance of oers or agreements made prior to the expiration of these authorities. The above authorities are intended to be used for the purposes of an oer(s) for subscription and the dividend investment scheme. In each case, the Company normally allots shares at prices based on prevailing net asset value per share of the existing shares on the date of allotment (plus costs, save in relation to the dividend investment scheme). The Directors thus, seek to manage any potential dilution of existing Shareholders as a result of the disapplication of Shareholders’ pre- emption rights proposed in Resolution 8. 40 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Reports of the Directors Directors’ Report Resolution 9 – Authority to purchase the Company’s own shares This resolution authorises the Company to purchase its own shares pursuant to section 701 of the Companies Act. The authority is limited to the purchase of an aggregate of 13,679,821 shares representing approximately 14.99% of the issued share capital of the Company as at the date of the Notice of the Meeting or, if lower, such number of shares (rounded down to the nearest whole share) as shall equal 14.99% of the issued share capital at the date the resolution is passed. The maximum price that may be paid for a share will be the higher of (i) an amount that is not more than 5% above the average of the middle market quotations of the shares as derived from the Daily Ocial List of the UK Listing Authority for the five business days preceding the date such shares are contracted to be purchased and (ii) the price stipulated by Article 5(1) of the Buy-back and Stabilisation Regulation. The minimum price that may be paid for a share is 1.00 penny, being the nominal value thereof. Market liquidity in VCTs is normally very restricted. The passing of this resolution will enable the Company to purchase its own shares thereby providing a mechanism by which the Company may enhance the liquidity of its shares and seek to manage the level and volatility of the discount to NAV at which its shares may trade. It is the Directors’ intention to cancel any shares bought back under this authority. Shareholders should note that the Directors do not intend to exercise this authority unless they believe to do so would result in an increase in net assets per share which would be in the interests of Shareholders generally. This resolution will expire on the date falling fifteen months after the passing of this resolution or, if earlier, on the conclusion of the Company’s Annual General Meeting to be held in 2023 except that the Company may purchase its own shares after this date in pursuance of a contract or contracts made prior to the expiration of this authority. Recommendation The Board recommends that Shareholders vote in favour of the resolutions to be proposed at the Annual General Meeting of the Company, as the Directors intend to do in respect of their own beneficial holdings of 206,310 shares (representing 0.23% of the issued share capital as at the date of publication). Voting rights of Shareholders At general meetings of the Company, Shareholders have one vote on a show of hands, and one vote per share held on a poll. No member shall be entitled to vote or exercise any rights at a general meeting unless all their shares have been paid up in full. Any instrument of proxy must be deposited at the place specified by the Directors no later than 48 hours before the time fixed for holding the meeting. There are no restrictions on voting rights and no agreements between holders of securities that may prevent or restrict the transfer of securities or voting rights. By order of the Board Gresham House Asset Management Limited Company Secretary 6 April 2022 41 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Reports of the Directors This Corporate Governance Statement forms part of the Directors’ Report. The Directors have adopted the Association of Investment Companies (AIC) Code of Corporate Governance 2019 (“the AIC Code”) for the financial year ended 31 December 2021. The Board has considered the principles and recommendations of the AIC Code by reference to the AIC Corporate Governance Guide for investment companies (“AIC Guide”). The AIC Code, as explained by the AIC Guide, addresses all the principles set out in the UK Corporate Governance Code (“the UK Code”), as well as setting out additional principles and recommendations on issues that are of specific relevance to the Company. The Board considers that reporting against the principles and recommendations of the AIC Code, and by reference to the AIC Guide (which incorporates the UK Code), will provide the most appropriate information to Shareholders. The AIC Code was endorsed by the Financial Reporting Council in February 2019. In adopting the AIC Code, the Company will therefore meet its obligations in relation to the reporting requirements of the Financial Conduct Authority’s Listing and Disclosure and Transparency Rules on Corporate Governance. The AIC Code can be viewed on the AIC’s website at www.theaic.co.uk/ aic-code-of-corporate-governance Statement of Compliance This statement has been compiled in accordance with the FCA’s Disclosure and Transparency Rule (DTR) 7.2 on Corporate Governance Statements. The Board considers that the Company has complied with the recommendations of the AIC Code and relevant provisions of the UK Code throughout the year under review, except as explained in the following paragraphs. A table providing further explanations of how the Company has complied with the AIC Code during the year is available in the Corporate Governance section of the Company’s website: www.mig4vct.co.uk. As an externally managed VCT, most of the Company’s operations are delegated to third parties and the Company has no executive directors, employees or internal operations. The Board has therefore concluded, for the reasons set out in the AIC Guide, that not all the provisions of the UK Code are relevant to the Company. Firstly, as the Company does not employ a chief executive, nor any executive directors, the provisions of the AIC Code relating to the rate of the chief executive and executive directors’ remuneration are not relevant to the Company. Secondly, the systems and procedures of the Investment Adviser, the provision of VCT monitoring services by Philip Hare & Associates LLP, as well as the size of the Company’s operations, give the Board full confidence that an internal audit function is not necessary. The Company has therefore not reported further in respect of these provisions. Internal control The Board acknowledges that it is responsible for the Company’s system of internal control and for reviewing its eectiveness. Internal control systems are designed to manage the particular needs of the Company and the risks to which it is exposed and can by their nature only provide reasonable and not absolute assurance against material misstatement or loss. The Company’s internal control system aims to ensure the maintenance of proper accounting records, the reliability of the finance information used for publication and upon which business decisions are made, and that the assets of the Company are safeguarded. The financial controls operated by the Board include regular reviews of signing authorities, quarterly management accounts and the processes by which investments in the portfolio are valued. The Board also provides authorisation of the Investment Policy and regular reviews of the financial results and investment performance. The Board has put in place ongoing procedures for identifying, evaluating and managing the significant risks faced by the Company. As part of this process an annual review of the control systems is carried out. The review covers a consideration of the key business, operational, compliance and financial risks facing the Company and includes a review of the risks in relation to the financial reporting process. The Board reviews a schedule of key risks and the management accounts at each quarterly Board meeting. It is assisted by the Audit Committee in respect of the Annual and Half-Year Reports and other published financial information. The Board has contractually delegated to Gresham House, the management of the investment portfolio, the day-to-day accounting, company secretarial and administration requirements, and, to Link Group, the registration services. Each of these contracts was entered into after full and proper consideration by the Board of the quality and cost of services oered, including the financial control systems in operation at the service providers in so far as they relate to the aairs of the Company. The Board regularly monitors these controls from a risk perspective and receives reports from the Registrar and Investment Adviser and Administrator when appropriate. The Board, assisted by the Audit Committee, carries out separate assessments in respect of the Annual and Half-Year Reports and other published financial information. As part of these reviews, the Board appraises all the relevant risks ensuing from the internal control process referred to above. The main aspects of the internal controls which have been in place throughout the year in relation to financial reporting are: Internal controls are in place for the preparation and reconciliation of the valuations prepared by the Investment Adviser. Independent reviews of the valuations of investments within the portfolio are undertaken quarterly by the Board. The information contained in the Annual Report and other financial reports is reviewed separately by the Audit Committee prior to consideration by the Board. The Board reviews all financial information prior to publication. The system of internal control and the procedure for the review of control systems has been in place and operational throughout the year under review and up to the date of this Report. The Audit Committee and the Board carried out an assessment of the eectiveness of internal controls in managing risk which was conducted on the basis of reports from the relevant service providers. The last review took place on 8 March 2022. The Board has identified no significant problems with the Company’s internal control mechanisms. Section 172 Director Duties The Directors continue to have regard to the interests of the Company’s Shareholders and other stakeholders, including the impact of its activities on the community, environment and the Company’s reputation, when making decisions. The Directors, acting fairly and in good faith, consider what is most 42 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Reports of the Directors Corporate Governance Statement likely to promote the success of the Company for its members and stakeholders in the long-term. For further Information on how the Directors have fulfilled their duties under Section 172 of the Companies Act 2006, please see pages 31 to 33. Fees paid to the Investment Adviser The fees paid to the Investment Adviser are set out in Note 4 to the Financial Statements on 63 and 64. In addition, the Investment Adviser received fees totalling £349,777 (2020: £341,957) during the year ended 31December 2021, being £132,666 (2020: £126,452) for arrangement fees, and £217,111 (2020: £215,405) for acting as non-executive directors on a number of investee company boards. These amounts are the share of such fees attributable to investments made by the Company. Alternative Investment Fund Manager (“AIFM”) The Board appointed the Company as its own AIFM in compliance with the European Commission’s Alternative Investment Fund Management Directive with eect from 22 July 2014. The Company is registered as a small AIFM, and is therefore exempt from the principal requirements of the Directive. Mobeus continues to provide investment advisory and administrative services to the Company. The Board and its Committees The powers of the Directors have been granted by company law, the Company’s Articles of Association and resolutions passed by the Company’s members in general meeting. Resolutions are proposed annually at each annual general meeting of the Company to authorise the Directors to allot shares, disapply the pre-emption rights of members and buyback the Company’s own shares on behalf of the Company. These authorities are currently in place and resolutions to renew them will be proposed at the Annual General Meeting of the Company to be held on 17 May 2022. The Board has agreed a schedule of matters specifically reserved for decision by the Board. These include compliance with the requirements of the Companies Act 2006 and the Income Tax Act 2007, the UK Listing Authority and the London Stock Exchange; strategy and management of the Company; changes relating to the Company’s capital structure or its status as a plc; financial reporting and controls; board and committee appointments as recommended by the Nomination and Remuneration Committee and terms of reference of committees; material contracts of the Company and contracts of the Company not in the ordinary course of business. In regard to the Chairman of the Board’s tenure, the length of service of all directors is considered on an ongoing basis, with the Nomination & Remuneration Committee giving consideration to succession and composition at its year-end meeting, in compliance with the AIC Code of Corporate Governance guidance. The Board also annually reviews the constitution and strategy of the Company. Graham Paterson was appointed by the Board on 10 May 2019, Chris Burke was appointed by the Board on 26 November 2019 and Jonathan Cartwright was appointed by the Board on 7 September 2020. They will each be seeking re-election at the upcoming Annual General Meeting on 17 May 2022. The Board is of the view that a term of service in excess of nine years is not in itself prejudicial to a director’s ability to carry out their duties eectively and from an independent perspective; the nature of the Company’s business is such that an individual director’s experience and continuity of non- executive board membership can significantly enhance the eectiveness of the Board as a whole. Following the performance evaluation of the Directors during the year, the Board confirms that each of Jonathan Cartwright, Graham Paterson and Christopher Burke continue to demonstrate commitment to their roles and to be eective in carrying out their duties on behalf of the Company. Copies of the directors’ letters of appointment are available for inspection at the place of the Annual General Meeting for at least 15 minutes before and during the Meeting. Board Committees The Board has established three Committees, the Nomination and Remuneration Committee, the Investment Committee and the Audit Committee, each with responsibilities for specific areas of its activity. Each of the Committees have written terms of reference, which detail their authority and duties. Shareholders may obtain copies of these by making a written request to the Company Secretary or by downloading these documents from the Company’s website: www.mig4vct.co.uk. The Board has satisfied itself that each of its Committees has sucient resources to undertake its duties. Audit Committee The Audit Committee is chaired by Graham Paterson and comprises himself, Jonathan Cartwright and Chris Burke. A full description of the work of the Audit Committee is set out in the Report of the Audit Committee on pages 45 and 46 of this Annual Report. Helen Sinclair was a Committee member until her retirement from the Board, eective from 1 March 2022. Nomination and Remuneration Committee The Nomination and Remuneration Committee is chaired by Graham Paterson and comprises himself, Jonathan Cartwright and Chris Burke. Helen Sinclair was also a member until her retirement from the Board. In considering nominations, the Committee is responsible for making recommendations to the Board concerning new appointments of Directors to the Board and its committees; the periodic review of the composition of the Board and its committees; and the annual performance review of the Board, the Directors and the Chairman. This includes the ongoing review of each Director’s actual or potential conflicts of interest which may arise as a result of the external business activities of Board members. Following the year under review, the Board appointed Chris Burke to the Nomination & Remuneration Committee and Audit Committee, and also as Chairman of the Investment Committee, succeeding Helen Sinclair in that role following her retirement from the Board. Although the Board now comprises all male Directors, the Board remains committed to include consideration of gender and diversity for all future appointments. A full description of the work of the Committee with regard to remuneration is included within the Directors’ Remuneration Report on pages 47 to 50. Investment Committee The Investment Committee is now chaired by Chris Burke and comprises all three Directors. The Committee meets as necessary to consider the investment proposals put 43 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Reports of the Directors Corporate Governance Statement forward by the Investment Adviser. The Committee advises the Board on the development and implementation of the Investment Policy and leads the process for the ongoing monitoring of investee companies and the Company’s investment therein. Investment guidance has been issued to the Investment Adviser and the Committee ensures that this guidance is adhered to. New investments and divestments are approved by the Committee following discussions between Committee members and are subsequently ratified by the Board. Investment matters are discussed at each Board meeting. During the year, the Committee formally approved all investments, divestments and variation decisions, meeting informally on numerous occasions. The Committee considers and agrees, on the advice of the Investment Adviser for recommendation to the Board, all unquoted investment valuations. Investments are valued in accordance with the International Private Equity and Venture Capital (IPEV) Valuation Guidelines under which investments are valued at fair value as defined in those guidelines. Any AIM or other quoted investment will be valued at the closing bid price of its shares as at the relevant reporting date, in accordance with generally accepted accounting practice. Financial risk management The main risks arising from the Company’s financial instruments are due to investment risk, liquidity risk, credit risk, fluctuations in market prices (market price risk), cash flow interest rate risk and currency risk. The Board regularly reviews and agrees policies for managing these risks and full details can be found in Note 15 to the Accounts on pages 72 to 79 of this Annual Report. Future developments The outlook for the Company is set out in the Chairman’s Statement on page 5. Investment management and service providers On 30 September 2021, Mobeus Equity Partners LLP, the investment adviser to the Mobeus VCTs, completed the sale of its VCT fund and investment management business to a subsidiary of Gresham House plc. As part of the sale, the Boards agreed to the novation of the investment advisory arrangements from Mobeus to Gresham House. Mobeus acted as Investment Adviser for nine months of the year under review and provided administrative and company secretarial services to the Company up until the novation of the investment advisory agreement to Gresham House on 30 September 2021. With eect from 1 October 2021, the same team, now working under Gresham House, provides Investment Advisory, administrative and company secretarial services to the Company. The Directors carry out an annual review of the performance of and contractual arrangements with the Investment Adviser. The annual review of the Investment Adviser forms part of the Board’s overall internal control procedures discussed above. As part of this review, the Board considers the quality and continuity of the investment management team, investment performance, quality of information provided to the Board, remuneration of the Investment Adviser, the investment process and the results achieved to date. A review of the performance of the Company is included in the Strategic Report on pages 8 to 11. The Board concluded that the Investment Adviser had performed consistently well over the medium-term and has returned a good performance in respect of the year under review. The Company’s investment portfolio has performed very well and the Investment Adviser has been proactive in ensuring the Company remains informed and well-positioned to maintain compliance with VCT tax legislation. The Board places significant emphasis on the Company’s performance against its peers and further information on this has been included in the Strategic Report on page 10. The Board further considered the Investment Adviser’s commitment to the promotion of the Company and was satisfied that this was highly prioritised by the Investment Adviser as evidenced by, inter alia, the Mobeus VCT fundraisings which have taken place between 2010 and 2022 and annual Shareholder events. The Board considers that the Investment Adviser continued to exercise independent judgement while producing valuations which reflect fair value. Overall, the Board continues to believe that the Investment Adviser possesses the experience, knowledge and resources that are required to support the Board in achieving the Company’s long term investment objectives. The Directors therefore believe that the continued appointment of the Investment Adviser to the Company on the terms currently agreed is in the interests of Shareholders, and this was formally approved by the Board on 17November 2021. The principal terms of the Company’s Investment Advisory Agreement, amended and restated on 30 September 2021, and its Performance Incentive Fee Agreement, novated on 30 September 2021 to Gresham House are set out in Note 4 to the Financial Statements on pages 63 and 64 of this Annual Report. The Board seeks to ensure that the terms of these agreements represent an appropriate balance between cost and the incentivisation of the Investment Adviser. By order of the Board Gresham House Asset Management Limited Company Secretary 6 April 2022 44 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Reports of the Directors This Report of the Audit Committee forms part of the Directors’ Report. The Audit Committee is chaired by Graham Paterson and comprises himself, Jonathan Cartwright and Chris Burke. There are three directors appointed to the Company, and it was deemed appropriate that the Chairman, who was considered to be independent upon his appointment, should be a member of the Audit Committee. The duties of the Committee are set out in the Terms of Reference which can be found on the website in the Corporate Governance section at: www.mig4vct.co.uk. A summary of the Audit Committee’s principal activities for the year to 31 December 2021 is provided below: Financial statements The Half-Year and Annual Reports to Shareholders were thoroughly reviewed by the Committee prior to submission to the Board for approval. Internal control The Committee has monitored the system of internal of controls throughout the year under review as described in more detail in this Report on page 42. It receives a report by exception on the Company’s progress against its internal controls at its Annual and Half-Year results meetings and reviews the schedule of internal controls and risks at each meeting. A full review of the internal controls in operation by the Company was undertaken by the Committee on 8March 2022. Valuation of investments The Investment Adviser prepared valuations of the investments in the portfolio at the end of each quarter and these were considered in detail and agreed by the Investment committee for recommendation to the Board. The Audit Committee continued to monitor the adequacy of the controls over the preparation of these valuations. As part of this process, it focused on ensuring that both the bases of the valuations and any assumptions used were reasonable and in accordance with the IPEV Valuation Guidelines. The Committee received a review within a report from the external auditor as part of both the year-end audit process and the specific procedures carried out by BDO in respect of the Half-Year review. These reports were discussed in full by the Committee, the Investment Adviser and the Auditor as necessary, before a recommendation to approve the valuations was made to the Board. Key issues considered by the Committee The key accounting and reporting issues considered by the Committee in addition to those described above during the year included: Going concern and long-term viability The Committee monitors the Company’s resources at each quarterly board meeting and has satisfied itself that the Company has an adequate level of resources for the foreseeable future. It has assessed the viability of the Company for three years and beyond. Consideration is given to the cash balances and holdings in money market funds, together with the ability of the Company to realise its investments. See page 36 of the Strategic Report for further details. Recognition of impairment and realised losses If an investment has been impaired such that there is no realistic expectation that there will be a full return from the investment, the loss is treated as a permanent impairment and is recognised as a realised loss in the Financial Statements. The Committee reviews the appropriateness and completeness of such impairments. Compliance with the VCT tests The Company engages the services of a VCT Status Adviser (Philip Hare & Associates LLP) to advise on its ongoing compliance with the legislative requirements relating to VCTs. A report on the Company’s compliance supported by the tests carried out is produced by the VCT Status Adviser on a bi-annual basis and reviewed by the Committee for recommendation to the Board. The Committee has continued to consider the risk and compliance aspects of changes to the VCT Rules introduced by the Finance Act (No 2) 2015 and the Finance Act (No 2) 2018. As an essential part of this work, the Committee has held ongoing discussions with the Company’s VCT Status Adviser throughout the year. Tax Compliance Services Philip Hare & Associates LLP were appointed during the year ended 31 December 2018 and continued to provide such services during the year under review. Income from investee companies The Committee notes that revenue from loan stock and dividends may be uncertain given the type of companies in which the VCT invests. Dividends in particular may be dicult to predict. The payments received however have a direct impact on the level of income dividends the Company is able to pay to Shareholders. The Committee agrees policies for revenue recognition and reviews their application at each of its meetings. It considers schedules of income received and receivable from each of the investee companies and assesses, in consultation with the Investment Adviser, the likelihood of receipt of each of the amounts. Key risks faced by the Company The Board has identified the key risks faced by the Company and established appropriate controls (as disclosed in the Strategic Report on pages 34 and 35). The Committee monitors these controls and reviews any incidences of non- compliance. Further details are set out in the section of this report that discusses the Company’s system of internal controls (page 42). Cyber Security The Board sought and obtained assurances during the year from the Investment Adviser, the Registrar and the other service providers concerning their cyber security procedures and policies. Anti-tax evasion policy In compliance with the Criminal Finance Act 2017 the Company adopted a zero tolerance towards the criminal facilitation of tax evasion. A summary of the policy is available on page 39 of the Annual Report. Safekeeping of the Company’s documents of title to its investments The Committee has established procedures for the safekeeping of the Company’s documents of title under a Safekeeping Agreement dated 17 February 2022 with Apex Fund and Corporate Services (Guernsey) Limited, for accessing and dealing with these documents. Relationship with the external auditor and re-appointment The Committee is responsible for overseeing the relationship with the external Auditor, assessing the eectiveness of the external audit process and making recommendations on the appointment and removal of the Report of the Audit Committee 45 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Reports of the Directors external Auditor. It makes recommendations to the Board on the level of audit fees and the terms of engagement for the Auditor. The external Auditor is invited to attend Audit Committee meetings, where appropriate, and also has the opportunity to meet with the Committee and its Chairman without representatives of the Investment Adviser being present. The Committee undertook an audit tender process in 2016 in compliance with the requirements on audit firm rotation under the European Audit Regulation Directive. As a consequence of that process, BDO LLP were reappointed. BDO LLP has been the independent auditor to the Company since 2008. The Audit Committee also undertakes an annual review of the external Auditor and the eectiveness of the audit process on an annual basis. When assessing the eectiveness of the process, the Committee considers whether the Auditor: - demonstrated strong technical knowledge and a clear understanding of the business; - indicated professional scepticism in key judgements and raised any significant issues in advance of the audit process commencing; - provided an audit team that is appropriately resourced; - demonstrated a proactive approach to the audit planning process and engaged with the Committee Chairman and other key individuals within the business; - provided a clear explanation of the scope and strategy of the audit; - demonstrated the ability to communicate clearly and promptly with the members of the Committee and the Investment Adviser and produce comprehensive reports on its findings; - demonstrated that it has appropriate procedures and safeguards in place to maintain its independence and objectivity; - charged justifiable fees in respect of the scope of services provided; and - handled key audit issues eectively and responded robustly to the Committee’s questions. This review constituted the Audit Committee’s annual assessment of the eectiveness of the external audit process. The Audit Committee concluded that the re-appointment of BDO LLP is in the best interests of the Company and Shareholders and the Board recommends their re-appointment by Shareholders at the forthcoming Annual General Meeting. Non-audit services The Board regularly reviews and monitors the external Auditor’s independence and objectivity. As part of this it reviews the nature and extent of services supplied by the Auditor to ensure that independence is maintained. No non-audit services have been provided by the Company’s external auditor, BDO LLP, during the period, therefore the Committee continues to believe that the external auditor remains independent. The Committee has reviewed the implications of the Financial Reporting Council‘s (“FRC”) Revised Ethical Reporting Standard 2019 eective from 5March 2020. The Audit Committee, based upon the review of this 2019 Ethical Standard, has decided to purchase certain non-audit services, such as tax compliance services and iXBRL tagging, from separate firms. The auditor provides permissable audit-related services in respect of the Half-Year Report, whereas Philip Hare & Associates LLP provide tax compliance services, and Arkk Consulting Limited, one of the Company’s investee companies, provides the iXBRL Tagging Service. Additional disclosures in the Directors’ Report Disclosures required by certain publicly- traded companies as set out in Part 6 of Schedule 7 of the Large and Medium- sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended 2013) are contained in the Directors’ Report on page 38. By order of the Board Graham Paterson Chairman of the Audit Committee 6 April 2022 46 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Reports of the Directors 47 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Reports of the Directors Introduction This Report has been prepared by the Directors in accordance with the requirements of Schedule 8 of The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013, the Companies Act 2006 and the Listing Rules of the UK Listing Authority (“the Listing Rules”). The Company’s independent auditor is required to give its opinion on the information provided on Directors’ emoluments and Director’s interests on page 49 of this Annual Report and this is explained further in the Auditor’s report to Shareholders on pages 52 to 56. The resolution to approve the Directors’ Remuneration Policy as set out in the Annual Report for the year ended 31 December 2020 was approved by Shareholders at the Annual General Meeting of the Company held on 18 May 2021. Full details of the Remuneration Policy can be found within this report in the adjacent column and on page 49. The resolution to approve the Directors’ Annual Remuneration Report, as set out in the Annual Report for the year ended 31 December 2020, was approved by Shareholders at the Annual General Meeting of the Company held on 18 May 2021. An ordinary resolution will be proposed at the forthcoming Annual General Meeting of the Company to be held on 17 May 2022 for the approval of the Annual Remuneration Report as set out below. Remuneration statement by the Chairman of the Nomination and Remuneration Committee This report sets out the Company’s forward looking Directors’ Remuneration Policy and the Annual Remuneration Report which describes how this policy has been applied during the year. As set out in the 2017 Directors’ Remuneration Report, the Committee recommended an increase in Director’s fees and the supplement for members of the Audit Committee with eect from 1 July 2018; the first increase in Directors’ remuneration since 2013. The Committee has reviewed the fees paid in the year ended 31 December 2021 and decided no further change to the level of fees paid is necessary. As part of this review, the Committee considered information on the fees paid to directors of a peer group of VCTs of a similar size operating in its sector. Graham Paterson Chairman of the Nomination and Remuneration Committee 6 April 2022 Directors’ Remuneration Policy The remuneration policy is set by the Board on the recommendation of the Nomination and Remuneration Committee and is unchanged from last year. In determining the Company’s remuneration policy, the Committee seeks to determine a level of fees appropriate to attract and retain individuals of sucient calibre to lead the Company in achieving its strategy. When considering the level of Directors’ fees, it takes account of the required workload and responsibilities of each role and the value and amount of time that a Director is required to commit to the Company. It further considers remuneration levels elsewhere in the Venture Capital Trust industry for companies of a similar size and structure, together with other relevant information. The level of fees paid to each of the Directors is reviewed annually by the Nomination and Remuneration Committee which makes recommendations to the Board. The Committee has access to independent advice where and when it considers appropriate. However, it was not considered necessary to take any such advice during the year under review. In addition to the £21,000 per annum paid to Directors (£27,000 per annum to Jonathan Cartwright as Chairman of the Board) supplements are paid to the Directors in respect of their membership of the Investment Committee (£6,000 per annum) and Audit Committee (£5,000 annum). The Directors may at their discretion pay additional sums in respect of specific tasks carried out by individual Directors on behalf of the Company. Since all the Directors are non- executive, the Company is not required to comply with the executive director’s provisions of the Listing Rules, the UK Corporate Governance Code and the AIC Code of Corporate Governance in respect of Directors’ remuneration, except in so far as they relate specifically to Non-Executive Directors. The Committee took into account the additional work required in consideration of the change of investment advisory arrangements and, given the substantial additional time requirement, recommended to the Board that a discretionary payment of £3,000 be made to the Chairman and £1,000 to the remaining three directors of the Board, each to be paid in respect of the year under review. Both of these recommendations were subsequently reviewed and approved by the Board at its meeting on 17 November 2021. Performance-related remuneration Whilst it is a key element of this policy to recruit directors of the calibre required to lead the Company in achieving its short and long-term objectives no component of the fees paid is directly related to performance. Pensions All the Directors are non-executive and the Company does not provide pension benefits to any of the Directors. Additional benefits Whilst the Board agreed to pay a discretionary payment to each Director in respect of the change in investment advisory arrangements as mentioned previously, the Company does not have any other schemes in place to pay bonuses or benefits to the Directors. No arrangements have been entered into between the Company and the Directors to entitle any of the Directors to compensation for loss of oce. None of the Directors receive pension benefits from the Company and the Company has not granted any Director any options over the share capital of the Company. Directors’ Remuneration Report 48 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Reports of the Directors Recruitment remuneration Remuneration of any new Director, who may subsequently be appointed to the Board, will be in line with the Remuneration Policy set out in this Report and the levels of remuneration stated therein, as modified from time to time. Shareholders’ views on remuneration The Board prioritises the views of Shareholders and encourages an open discussion at general meetings of the Company. It takes Shareholders’ views into account, where appropriate, when formulating its remuneration policy. Shareholders can contact the Chairman or the Company Secretary, Gresham House, at any time by email using the address: [email protected]. Directors’ terms of appointment In accordance with the 2019 AIC Code, Jonathan Cartwright, Graham Paterson and Chris Burke have all agreed to oer themselves for re-election annually and will next seek re-election by Shareholders at the Company’s Annual General Meeting on 17 May 2022. All of the Directors are non-executive and none of the Directors has a service contract with the Company. All Directors receive a formal letter of appointment setting out the terms of their appointment and their specific duties and responsibilities and the fees pertaining to their appointment. A Director’s appointment may be terminated on three months’ notice being given by the Company and in certain other circumstances. Copies of the Directors’ appointment letters will be available for inspection at the place of the Annual General Meeting on 17 May 2022 from 11.00 am. New Directors are asked to undertake that they have sucient time to carry out their responsibilities to the Company and to disclose their other significant time commitments to the Board before appointment. Shareholder approval of the Company’s Remuneration Policy This policy applied throughout the financial year ended 31 December 2021 and will continue to apply to the current financial year ending 31 December 2022. A resolution to approve the Directors’ Remuneration Policy, as set out in the Annual Report for the year ended 31 December 2019, was approved by Shareholders at the Annual General Meeting held on 2 June 2020. The Company received proxy votes in favour of the resolution representing 83.12% (including those who appointed the Chairman to vote at his discretion) of the votes received (against 16.88%). The Board is required to ask Shareholders to approve the Remuneration Policy every three years. The Directors will therefore recommend that Shareholders approve the Policy again at the Annual General Meeting of the Company to be held in 2023. Future Remuneration Policy The table below illustrates how the Company’s Objective is supported by its Remuneration Policy. It sets out details of each component of the pay package and the maximum amount receivable per annum by each Director. The Nomination and Remuneration Committee and the Board review the fees paid to Directors annually in accordance with the Remuneration Policy set out below and may decide that an increase in fees is appropriate in respect of subsequent years. Director Role Components of Pay Package Maximum payment for the forthcoming year Performance conditions Director’s fees (p.a.) Annual supplements payable to: Audit Committee Members Investment Committee Members Jonathan Cartwright Chairman £27,000 £5,000 £6,000 £38,000 None Christopher Burke £21,000 £5,000 1 £6,000 £31,167 None Graham Paterson Chairman, Audit and Nomination & Remuneration Committees £21,000 £5,000 £6,000 £32,000 None Helen Sinclair 2 Chairman, Investment Committee £21,000 £5,000 £6,000 £5,333 None Total fees £90,000 £20,000 £24,000 £106,500 1 Chris Burke was appointed to the Audit Committee with eect from 1 March 2022. Prior to this appointment, he received no supplement in respect of the Audit Committee. 2 Helen Sinclair retired from the Board on 28 February 2022. Her total remuneration received for the year ended 31 December 2021 was pro-rated to 28 February 2022. Directors’ Remuneration Report 49 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Reports of the Directors Company Objective To provide investors with an attractive return, by maximising the stream of dividend distributions from the income and capital gains generated by a diverse and carefully selected portfolio of investments, while continuing at all times to qualify as a VCT. Remuneration Policy To ensure that the levels of remuneration paid are sucient to attract, retain and motivate directors of the quality required to manage the Company in order to achieve the Company’s Objective. Nomination and Remuneration Committee The Committee is chaired by Graham Paterson with Jonathan Cartwright and Chris Burke as its other members. All members of the Committee were considered to be independent of the Investment Adviser during the year under review, with the exception of Helen Sinclair, under the AIC Code. The Committee meets at least once a year and is responsible for making recommendations to the Board on remuneration policy and reviewing the policy’s ongoing appropriateness and relevance. It carries out an annual review of the remuneration of the Directors and makes recommendations to the Board on the level of Directors’ fees. The Committee may, at its discretion, recommend to the Board that individual Directors should be awarded further payments in respect of additional work undertaken on behalf of the Company. It is responsible for the appointment of remuneration consultants, if this should be considered necessary, including establishing the selection criteria and terms of reference for such an appointment. The Committee met twice during the year under review with full attendance from all its members. The Committee’s duties in respect of Nominations to the Board are outlined on page 43 of the Annual Report. Total individual emoluments paid to the Directors during the year (audited) Year ended 31 Dec 2021 31 Dec 2020 Change in annual fee £ £ (%) Jonathan Cartwright 1 41,000 11,715 7.9 Christopher Moore 2 n/a 28,500 n/a Christopher Burke 3 28,000 27,000 3.7 Graham Paterson 3 33,000 32,000 3.1 Helen Sinclair 3 33,000 32,000 3.1 Total 135,000 131,215 1 Jonathan Cartwright was appointed on 7 September 2020 and was appointed Chairman on 1 October 2020. A discretionary payment of £3,000 was paid to Jonathan Cartwright during the year to 31 December 2021. 2 Christopher Moore retired as a Director on 30 September 2020. £24,187 of his fee was paid to his consultancy business The Moore Corporation. 3 A discretionary payment of £1,000 was paid to the director during the year to 31 December 2021. No sums were paid to third parties in respect of any of the Director’s services during the year under review. Directors’ interests in the Company’s shares (audited) The Company does not require the Directors to hold shares in the Company. The Directors, however, believe that it is in the best interests of the Company and its Shareholders for each Director to maintain an interest in the Company. The Directors who held oce throughout the year under review and their interests as at 31 December 2021 were: 31 December 2021 31 December 2020 Director Shares held Percentage of issued share capital Shares held Percentage of issued share capital Jonathan Cartwright 31,977 0.04 31,977 0.04 Christopher Moore 1 n/a n/a 52,529 0.06 Christopher Burke 36,331 0.04 36,331 0.04 Graham Paterson 2 15,000 0.02 15,000 0.02 Helen Sinclair 14,862 0.02 14,862 0.02 1 Christopher Moore retired as a Director on 30 September 2020. 2 Graham Paterson holds his shares in a nominee account. There have been changes to the Directors’ share interests between the year-end and the date of this Annual Report as, on 9 March 2022, Jonathan Cartwright and Chris Burke were allotted 19,742 an 98,714 shares respectively, bringing their total holdings to 54,806 and 136,504 shares, representing 0.06% and 0.15% of the issued share capital. The remuneration of the Directors is fixed and contains no performance related variable element. As the Company has no employees, the directors do not consider it relevant to compare director fees against employee pay. Directors’ remuneration: 5-year comparison Director 2021 £ 2016 £ Change Chairman (includes Audit and Investment Committee Supplements 1 ) 2 41,000 33,500 22.4% Director Fee (includes Audit and Investment Committee Supplements 1 ) 2 33,000 28,500 15.8% 1 Audit Committee (2021: £5,000; 2016: £2,500) and Investment Committee (2021: £6,000, 2016: £6,000) fee supplements are paid to all members. 2 In 2021, discretionary payments of £3,000 and £1,000 were paid to the Chairman and remaining Directors, respectively. 50 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Reports of the Directors Relative importance of spend on Directors’ fees Year to 31 December 2021 Year to 31 December 2020 Percentage Increase/ (decrease) £ £ % Total directors’ fees 135,000 131,215 2.9% Dividends paid/payable in respect of the year 7,520,561 5,114,980 47.0% Share Buybacks 1,230,702 728,216 69.0% Directors’ attendance at Board and Committee meetings in 2021 The table below sets out the Directors’ attendance at quarterly Board meetings and Committee meetings held during the year to 31 December 2021. In addition to the quarterly Board meetings, the Board met on other occasions to consider specific issues as they arose. Directors Board Meetings (4) Audit Committee Meetings (2) Nomination & Remuneration Committee Meetings (2) Eligible Attended Eligible Attended Eligible Attended Jonathan Cartwright 2 2 1 1 2 2 Christopher Burke 4 4 0 0 0 0 Graham Paterson 4 4 2 2 2 2 Helen Sinclair 4 4 2 2 2 2 Company performance The graph below charts the total shareholder return of the Company’s shares on a share price basis (assuming all dividends are re-invested and excluding the tax relief available to Shareholders) over the past ten years compared with that of an index of all VCTs and an index of generalist VCTs which are members of the AIC (based on figures provided by Morningstar). The Board considers these indices to be the most appropriate to use to measure the Company’s relative performance over the medium to long term. The total shareholder returns have each been rebased to 100 pence at 31 January 2012. The share price total return comprises the share price plus cumulative dividends paid per share assuming the dividends paid were re-invested on the date on which the shares were quoted ex- dividend in respect of each dividend. An explanation of the performance of the Company is given in the Chairman’s Statement on page 2, the Performance section of the Strategic Report on pages 8 to 11 and in the Investment Adviser’s Review and Investment Portfolio Summary on pages 24 to 29. By order of the Board Gresham House Asset Management Limited Company Secretary 6 April 2022 AIC Generalist VCTs Share Price Total Return AIC All VCTs Share Price Total Return 31/12/202131/01/2012 31/12/2012 31/12/2013 31/12/2014 31/12/2015 31/12/2016 31/12/201831/12/2017 31/12/2019 31/12/2020 380p 330p 280p 230p 180p 130p 80p Mobeus Income & Growth 4 VCT plc Share Price Total Return Directors’ Remuneration Report 51 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Reports of the Directors Statement of Directors’ Responsibilities The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors are required to prepare the financial statements and have elected to prepare the company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland (‘FRS 102’) 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 aairs of the company and of the profit or loss for the company for that period. In preparing these Financial Statements, the Directors are required to: select suitable accounting policies and then apply them consistently; make judgements and accounting estimates that are reasonable and prudent; state whether the Financial Statements have been prepared in accordance with United Kingdom accounting standards, subject to any material departures disclosed and explained in the Financial Statements; prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and prepare a Strategic Report, a Directors’ 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 sucient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Website publication The Financial Statements are published on the Company’s website at www.mig4vct.co.uk, which is maintained by the Investment Adviser. The maintenance and integrity of the website maintained by the Investment Adviser is, so far as it relates to the Company, the responsibility of the Investment Adviser. The work carried out by the Auditors does not involve consideration of the maintenance and integrity of this website and, accordingly, the Auditor accepts no responsibility for any changes that have occurred to the accounts since they were initially presented to the website. The accounts are prepared in accordance with UK legislation, which may dier from legislation in other jurisdictions. Directors’ responsibilities pursuant to Disclosure and Transparency Rule 4 of the UK Listing Authority The Directors confirm to the best of their knowledge that: (a) The Financial Statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, give a true and fair view of the assets, liabilities, financial position and the profit and loss of the Company. (b) The Annual Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces. Having taken advice from the Audit Committee, the Board considers the Annual Report and Financial Statements, taken as a whole, as fair, balanced and understandable and that it provides the information necessary for Shareholders to assess the Company’s position, performance, business model and strategy. Neither the Company nor the Directors accept any liability to any person in relation to the Annual Report except to the extent that such liability could arise under English law. Accordingly, any liability to a person who has demonstrated reliance on any untrue or misleading statement or omission shall be determined in accordance with section 90A and schedule 10A of the Financial Services and Markets Act 2000. The names and functions of the Directors are stated on page 37. For and on behalf of the Board Jonathan Cartwright Chairman 6 April 2022 52 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Independent Auditor’s Report to the Members of Mobeus Income & Growth 4 VCT plc Opinion on the financial statements In our opinion the financial statements: give a true and fair view of the state of the Company’s aairs as at 31 December 2021 and of its profit for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements of the Companies Act 2006. We have audited the financial statements of Mobeus Income & Growth 4 VCT plc (“the Company”) for the year ended 31 December 2021 which comprise the Income statement, the Balance Sheet, the Statement of Changes in Equity, the Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sucient and appropriate to provide a basis for our opinion. Our audit opinion is consistent with the additional report to the audit committee. Independence Following the recommendation of the audit committee, we were appointed by the Board of Directors to audit the financial statements for the year ending 30 September 2004 and subsequent financial periods. The period of total uninterrupted engagement, including retenders and reappointments is 17 years, covering the years ending 30 September 2004 to 31 December 2021. We remain independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by that standard were not provided to the Company. Conclusions relating to going concern In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going concern basis of accounting included: Obtaining the VCT compliance reports during the year and as at year end and reviewing the calculations therein to ensure that the Company was meeting its requirements to retain VCT status; Reviewing the forecasted cash flows that support the Directors’ assessment of going concern, challenging assumptions and judgements made in the forecasts, and assessing them for reasonableness. In particular, we considered the available cash resources relative to the forecast expenditure which was assessed against the prior year for reasonableness; Evaluating the Directors’ method of assessing the going concern in light of market volatility and the present uncertainties in economic recovery created by the ongoing matters including the current situation in Ukraine/Russia; and Calculating financial ratios to ascertain the financial health of the company. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. In relation to the Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate to adopt the going concern basis of accounting. Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report. Overview 2021 2020 Key audit matters Valuation of investments Materiality £1,310,000 (2020:£820,000) based on 2% (2020: 2%) of Gross investments An overview of the scope of our audit Our company audit was scoped by obtaining an understanding of the company and its environment including the company’s system of internal control, and assessing the risk of material misstatements in the financial statements. We also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement. All audit work was performed by BDO LLP. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest eect on: the overall audit strategy, the allocation of resources in the audit, and directing the eorts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Independent Auditor’s Report 53 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Independent Auditor’s Report Key audit matter How the scope of our audit addressed the key audit matter Valuation of investments Note 8 We consider the valuation of investments to be the most significant audit area as investments is the most significant balance in the financial statements and there is a high level of estimation involved in the investment valuations. There is an inherent risk of management override arising from the investments valuations being prepared by the investment adviser, who is remunerated based on the net asset value of the company. A breakdown of the investment portfolio valuation technique is shown below. Other Cost (reviewed for impairment) Price of Recent Investment Listed Revenue multiple Earnings multiple For AIM listed investments we: Confirmed that bid price has been used by agreeing to externally quoted prices; Checked that there are no contra indicators, such as liquidity considerations, to suggest bid price is not the most appropriate indication of fair value by considering the realisation period for individual holdings; Recalculated the valuation by multiplying the number of shares held per the statement obtained from the custodian by the valuation per share. Our sample for the testing of the the remaining investments was stratified according to risk considering, inter alia, the value of the individual investments, the nature of the investments, the extent of the fair value movement and the subjectivity of the valuation technique. For investments in our sample we: Challenged whether the valuation methodology was the most appropriate in the circumstances under the International Private Equity and Venture Capital Valuation (“IPEV”) guidelines and applicable accounting standards; Recalculated the value attributable to the company, having regard to the application of enterprise value across the capital structures of the investee companies. For a sample of investments valued using less subjective valuation techniques (price of recent investment reviewed for changes in fair value) we: Agreed the cost or price of the recent investment to supporting documentation; Considered whether the investment was an arms length transaction through reviewing the parties involved in the transaction and checking whether or not they were already investors of the investee company; Considered whether there were any indications that the cost or price of the recent investment was no longer representative of fair value considering, inter alia the current performance of the investee company and the milestones and assumptions set out in the investment proposal; and Considered whether the price of the recent investment is supported by alternative valuation techniques. For a sample of investments that were valued using more subjective techniques (earnings and revenue multiples) we: Challenged and corroborated inputs to the valuation with reference to management information of investee companies and market data including the impact of Covid-19 pandemic and the current situation in Ukraine/Russia on the valuation and assessed the impact of estimation uncertainty concerning these assumptions and the disclosure of these uncertainties in the financial statements; 54 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Independent Auditor’s Report Key audit matter How the scope of our audit addressed the key audit matter Reviewed the historical financial statements and any recent management information available to support assumptions about maintainable revenues and earnings used in the valuation; Considered the revenue or earnings multiples applied by reference to observable listed company market data; and Challenged the consistency and appropriateness of adjustments made to such market data in establishing the earnings or revenue multiple applied in arriving at the valuations adopted by agreeing the adjusted multiples to independent sources, the peer group, the market and sector in which the investee company operates and obtaining independent third party multiples. Where appropriate, we performed a sensitivity analysis by developing our own point estimate where we considered that alternative input assumptions could reasonably have been applied and we considered the overall impact to such sensitivities on the portfolio of investments in determining whether the valuations as a whole are reasonable and free from bias. Key observations: Based on the procedures performed we did not identify any indicators to suggest that the investment valuations are inappropriate considering the level of estimation uncertainty. Our application of materiality We apply the concept of materiality both in planning and performing our audit, and in evaluating the eect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements. In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their eect on the financial statements as a whole. Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows: Company financial statements 2021 £m 2020 £m Materiality £1.31 £0.83 Basis for determining materiality 2% of Gross investments 2% of Gross investments Rationale for the benchmark applied In setting materiality, we have had regard to the nature and disposition of the investment portfolio. Given that the VCT’s portfolio is comprised of unquoted investments which would typically have a wider spread of reasonable alternative possible valuations, we have applied a percentage of 2% of gross investments. Performance materiality £0.98 £0.63 Basis for determining performance materiality 75% of materiality on the basis of our risk assessment, together with our assessment of the entities overall control environment, the expected total value of known and likely misstatements and the level of transactions in the year. Lower testing threshold We determined that for Revenue return before tax, a misstatement of less than materiality for the financial statements as a whole, could influence users of the financial statements as it is a measure of the Company’s performance of income generated from its investments after expenses. As a result, we determined a lower testing threshold for those items impacting revenue return of £131,000 (2020: £198,000) based on 10% of Materiality (2020: 10% of revenue) of revenue return before tax. Reporting threshold We agreed with the Audit Committee that we would report to them all individual audit dierences in excess of £65,000 (2020: £9,000). We also agreed to report dierences below this threshold that, in our view, warranted reporting on qualitative grounds. Other information The directors are responsible for the other information. The other information comprises the information included in the annual report and financial statements other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our 55 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Independent Auditor’s Report knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Corporate governance statement The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code specified for our review. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit. Going concern and longer-term viability The Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified; and The Directors’ explanation as to their assessment of the Company’s prospects, the period this assessment covers and why the period is appropriate. Other Code provisions Directors’ statement on fair, balanced and understandable; Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks; The section of the annual report that describes the review of eectiveness of risk management and internal control systems; and The section describing the work of the audit committee Other Companies Act 2006 reporting Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below. Strategic report and Directors’ report In our opinion, based on the work undertaken in the course of the audit: the information given in the Strategic report and the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and the Strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the Directors’ report. Directors’ remuneration In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. Corporate governance statement The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code specified for our review. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit. Matters on which we are required to report by exception We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or the financial statements and the part of the Directors’ remuneration report to be audited are not in agreement with the accounting records and returns; or certain disclosures of Directors’ remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit. Responsibilities of Directors As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Extent to which the audit was capable of detecting irregularities, including fraud We gained an understanding of the legal and regulatory framework applicable to the Company and the industry in which it operates, and considered the risk of acts by the Company which were contrary to applicable laws and regulations, including fraud. The significant laws and regulations were considered to be the Companies Act 2006, the FCA listing and DTR rules, the principles of the UK Corporate Governance Code, industry practice represented by the AIC SORP and FRS102. We also considered the Company’s qualification as a VCT under UK tax legislation as any breach of this would lead to the Company losing various deductions and exemptions from corporation tax. 56 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Independent Auditor’s Report Our procedures included: obtaining an understanding of the control environment in monitoring compliance with laws and regulations; agreement of the fi nancial statement disclosures to underlying supporting documentation; enquiries of the investment adviser and those charged with governance relating to the existence of any non-compliance with laws and regulations; obtaining the VCT compliance reports prepared by management’s expert during the year and as at year end and reviewing their calculations to check that the Company was meeting its requirements to retain VCT status; and Reviewing minutes of board meetings and legal correspondence and invoices throughout the period for instances of non-compliance with laws and regulations and fraud. We assessed the susceptibility of the fi nancial statement to material misstatement including fraud and considered the fraud risk areas to be the valuation of unquoted investments and management override of controls. Our procedures included: The procedures set out in the Key Audit Matters section above; Obtaining independent evidence to support the ownership of a sample of investments; Recalculating investment management fees in total; Obtaining independent confi rmation of bank balances; and Testing journals which met a defi ned risk criteria by agreeing to supporting documentation and evaluating whether there was evidence of bias by the Investment Advisor and Directors that represented a risk of material misstatement due to fraud. We also communicated relevant identifi ed laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. Our audit procedures were designed to respond to risks of material misstatement in the fi nancial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions refl ected in the fi nancial statements, the less likely we are to become aware of it. A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Use of our report This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Vanessa Jayne Bradley (Senior Statutory Auditor) For and on behalf of BDO LLP, Statutory Auditor London, United Kingdom 6 April 2022 BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127). 57 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Financial Statements Financial Statements Income Statement for the year ended 31 December 2021 Year ended 31 December 2021 Year ended 31 December 2020 Notes Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ Net investment portfolio gains 8 - 29,904,336 29,904,336 - 13,307,684 13,307,684 Income 3 1,354,209 - 1,354,209 2,868,103 - 2,868,103 Investment Adviser's fees 4a (428,601) (1,285,804) (1,714,405) (309,827) (929,481) (1,239,308) Other expenses 4d (460,888) - (460,888) (426,422) - (426,422) Profit on ordinary activities before taxation 464,720 28,618,532 29,083,252 2,131,854 12,378,203 14,510,057 Taxation on profit on ordinary activities 5 (22,097) 22,097 - (280,053) 176,602 (103,451) Profit for the year and total comprehensive income 442,623 28,640,629 29,083,252 1,851,801 12,554,805 14,406,606 Basic and diluted earnings per ordinary share 6 0.53p 34.16p 34.69p 2.22p 15.05p 17.27p The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the net investment portfolio gains (unrealised gains and realised gains on investments) and the proportion of the Investment Adviser’s fee charged to capital. The total column is the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial Reporting Standards (“FRS”). In order to better reflect the activities of a VCT and in accordance with the 2014 Statement of Recommended Practice (“SORP”) (updated in April 2021) by the Association of Investment Companies (“AIC”), supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The revenue column of profit attributable to equity Shareholders is the measure the Directors believe appropriate in assessing the Company’s compliance with certain requirements set out in Section 274 Income Tax Act 2007. All the items in the above statement derive from continuing operations of the Company. No operations were acquired or discontinued in the year. The Notes on pages 62 to 79 form part of these Financial Statements. 58 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Financial Statements Balance Sheet as at 31 December 2021 Company No. 03707697 31 December 2021 31 December 2020 Notes £ £ Fixed assets Investments at fair value 8 65,584,467 41,676,696 Current assets Debtors and prepayments 10 2,895,532 403,568 Current investments 11 20,475,179 22,634,956 Cash at bank 11 4,059,487 4,053,536 27,430,198 27,092,060 Creditors: amounts falling due within one year 12 (227,411) (307,561) Net current assets 27,202,787 26,784,499 Net assets 92,787,254 68,461,195 Capital and reserves Called up share capital 13 833,897 840,040 Share premium reserve 13,129,427 12,495,262 Capital redemption reserve 33,606 20,512 Revaluation reserve 32,819,832 10,205,933 Special distributable reserve 20,109,912 26,563,547 Realised capital reserve 24,028,652 16,738,215 Revenue reserve 1,831,928 1,597,686 Equity Shareholders’ funds 92,787,254 68,461,195 Basic and diluted net asset value per ordinary share 14 111.27p 81.50p The Notes on pages 62 to 79 form part of these Financial Statements. The Financial Statements were approved and authorised for issue by the Board of Directors on 6 April 2022 and were signed on its behalf by: Jonathan Cartwright Chairman 59 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Financial Statements Notes Non-distributable reserves Distributable reserves Called up Share Capital Special Realised Revenue share premium redemption Revaluation distributable capital reserve capital reserve reserve reserve reserve reserve Total (Note a) (Note b) (Note b) £ £ £ £ £ £ £ £ At 1 January 2021 840,040 12,495,262 20,512 10,205,933 26,563,547 16,738,215 1,597,686 68,461,195 Comprehensive income for the year Profit for the year - - - 25,711,355 - 2,929,274 442,623 29,083,252 Total comprehensive income for the year - - - 25,711,355 - 2,929,274 442,623 29,083,252 Contributions by and distributions to owners Dividends re-invested into new shares 13 6,951 634,165 - - - - - 641,116 Shares bought back (Note c) 13 (13,094) - 13,094 - (1,230,702) - - (1,230,702) Dividends paid 7 - - - - (3,959,226) - (208,381) (4,167,607) Total contributions by and distributions to owners (6,143) 634,165 13,094 - (5,189,928) - (208,381) (4,757,193) Other movements Realised losses transferred to special reserve (Note a) - - - - (1,263,707) 1,263,707 - - Realisation of previously unrealised appreciation - - - (3,097,456) - 3,097,456 - - Total other movements - - - (3,097,456) (1,263,707) 4,361,163 - - At 31 December 2021 833,897 13,129,427 33,606 32,819,832 20,109,912 24,028,652 1,831,928 92,787,254 Note a: The Special distributable reserve also provides the Company with a reserve to absorb any existing and future realised losses and, when considered by the Board to be in the interests of Shareholders, to fund share buybacks and for other corporate purposes. The transfer of £1,263,707 to the special reserve from the realised capital reserve above is the total of realised losses incurred by the Company in the year. As at 31 December 2021, the Company has a special reserve of £20,109,912, £18,530,799 of which arises from shares issued more than three years ago. Reserves originating from share issues are not distributable under VCT rules if they arise from share issues that are within three years of the end of an accounting period in which shares were issued. Note b: The realised capital reserve and the revenue reserve together comprise the Profit and Loss Account of the Company shown on the Balance Sheet. Note c: During the year, the Company purchased 1,309,349 of its own shares at the prevailing market price for a total cost of £1,230,702, which were subsequently cancelled. Statement of Changes in Equity for the year ended 31 December 2021 Non-distributable reserves Distributable reserves Called up Share Capital Special Realised Revenue share premium redemption Revaluation distributable capital reserve capital reserve reserve reserve reserve reserve Total £ £ £ £ £ £ £ £ At 1 January 2020 667,991 - 8,056 3,713,586 35,514,889 8,935,662 1,195,130 50,035,314 Comprehensive income for the year Profit for the year - - - 8,866,811 - 3,687,994 1,851,801 14,406,606 Total comprehensive income for the year - - - 8,866,811 - 3,687,994 1,851,801 14,406,606 Contributions by and distributions to owners Shares issued via Oer for Subscription 184,505 12,815,495 - - - - 13,000,000 Issue costs and facilitation fees on Oer for Subscription - (320,233) - - (145,330) - (465,563) Shares bought back (12,456) - 12,456 - (728,216) - - (728,216) Dividends paid - - - - (6,337,701) - (1,449,245) (7,786,946) Total contributions by and distributions to owners 172,049 12,495,262 12,456 - (7,211,247) - (1,449,245) 4,019,275 Other movements Realised losses transferred to special reserve - - - - (1,740,095) 1,740,095 - - Realisation of previously unrealised appreciation - - - (2,374,464) - 2,374,464 - - Total other movements - - - (2,374,464) (1,740,095) 4,114,559 - - At 31 December 2020 840,040 12,495,262 20,512 10,205,933 26,563,547 16,738,215 1,597,686 68,461,195 The composition of each of these reserves is explained below: Called up share capital - The nominal value of shares originally issued increased for subsequent share issues either via an Oer for Subscription or Dividend Investment Scheme or reduced due to shares bought back by the Company. Share premium reserve - This reserve contains the excess of gross proceeds less issue costs over the nominal value of shares allotted under recent Oers for Subscription and the Company’s Dividend Investment Scheme. Capital redemption reserve - The nominal value of shares bought back and cancelled is held in this reserve, so that the Company’s capital is maintained. Revaluation reserve - Increases and decreases in the valuation of investments held at the year-end are accounted for in this reserve, except to the extent that the diminution is deemed permanent. In accordance with stating all investments at fair value through profit and loss (as recorded in Note 8), all such movements through both revaluation and realised capital reserves are shown within the Income Statement for the year. Special distributable reserve - This reserve is created from cancellations of the balances upon the Share premium reserve, which are transferred to this reserve from time to time. The cost of share buybacks is charged to this reserve. In addition, any realised losses on the sale or impairment of investments (excluding transaction costs), 75% of the Investment Adviser fee expense and 100% of the Investment Adviser performance fee expense, and the related tax eect, are transferred from the realised capital reserve to this reserve. This reserve will also be charged any IFA facilitation payments to advisers, which arose as part of the Oer for Subscription. Realised capital reserve - The following are accounted for in this reserve: • Gains and losses on realisation of investments; • Permanent diminution in value of investments; • Transaction costs incurred in the acquisition of investments; • 75% of the Investment Adviser fee expense and 100% of any performance incentive fee payable, together with the related tax eect to this reserve in accordance with the policies; and • Capital dividends paid. Revenue reserve - Income and expenses that are revenue in nature are accounted for in this reserve, as well as 25% of the Investment Adviser fee together with the related tax eect, as well as income dividends paid that are classified as revenue in nature. The Notes on pages 62 to 79 form part of these Financial Statements. 60 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Financial Statements Statement of Changes in Equity for the year ended 31 December 2020 61 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Financial Statements Notes Year ended 31 December 2021 Year ended 31 December 2020 £ £ Cash flows from operating activities Profit for the financial year 29,083,252 14,406,606 Adjustments for: Net investment portfolio gains (29,904,336) (13,307,684) Tax charge for the current year - 103,451 Decrease/(increase) in debtors 87,812 (220,393) Increase/(decrease) in creditors 23,302 (2,616) Net cash (outflow)/inflow from operations (709,970) 979,364 Corporation tax paid (103,452) (35,383) Net cash (outflow)/inflow from operating activities (813,422) 943,981 Cash flows from investing activities Sale of investments 8 12,231,857 14,974,305 Purchase of investments 8 (6,235,292) (4,805,036) Net cash inflow from investing activities 5,996,565 10,169,269 Cash flows from financing activities Share issued as part of Oer for Subscription 13 - 13,000,000 Issue costs and facilitation fees as part of Oer for subscription 13 - (465,563) Equity dividends paid 7 (6,106,267) (7,786,946) Purchase of own shares (1,230,702) (728,216) Net cash (outflow)/inflow from financing activities (7,336,969) 4,019,275 Net (decrease)/increase in cash and cash equivalents (2,153,826) 15,132,525 Cash and cash equivalents at start of year 24,688,492 9,555,967 Cash and cash equivalents at end of year 22,534,666 24,688,492 Cash and cash equivalents comprise: Cash at bank and in hand 11 4,059,487 4,053,536 Cash equivalents 11 18,475,179 20,634,956 The Notes on pages 62 to 79 form part of these Financial Statements. Statement of Cash Flows for the year ended 31 December 2021 1 Company Information Mobeus Income and Growth 4 VCT plc is a public limited company incorporated in England, registration number 3707697. The registered oce is 5 New Street Square, London, EC4A 3TW. 2 Basis of preparation A summary of the principal accounting policies, all of which have been applied consistently throughout the year are set out next to the related disclosure throughout the Notes to the Financial Statements. All accounting policies are included within an outlined box at the top of each relevant note. These Financial Statements have been prepared in accordance with applicable United Kingdom accounting standards, including Financial Reporting Standard 102 (“FRS102”), with the Companies Act 2006 and the 2014 Statement of Recommended practice, ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts’ (‘the SORP’) (updated in April 2021) issued by the Association of Investment Companies. The Financial Statements have been prepared on the historical cost basis except for the modification to a fair value basis for certain financial instruments which are disclosed under FRS102 s11/12 as shown in Note 15. After performing the necessary enquiries, the Directors have undertaken an assessment of the Company’s ability to meet its liabilities as they fall due. The Company has significant cash and liquid resources and no external debt or capital commitments. The Company’s cash flow forecasts, which consider levels of anticipated new and follow-on investment, the net funds raised as part of the Company’s 2021/22 Oer for Subscription, as well as investment income and annual running cost projections, are discussed at each quarterly Board meeting and, in particular, have been considered in light of the ongoing impact of the COVID-19 pandemic. The Directors have also received assurances that the Company’s key suppliers’ abilities to continue to service the Company have not been materially impacted by the COVID-19 pandemic. Following this assessment, the Directors have a reasonable expectation that the Company will have adequate resources to continue to meet its liabilities for at least 12 months from the date of these Financial Statements. The Directors therefore consider the preparation of these Financial Statements on a going concern basis to be appropriate. 3 Income Dividends receivable on quoted equity shares are brought into account on the ex-dividend date. Dividends receivable on unquoted equity shares are brought into account when the Company’s right to receive payment is established and there is no reasonable doubt that payment will be received. Interest income on loan stock is accrued on a daily basis. Provision is made against this income where recovery is doubtful or where it will not be received in the foreseeable future. Where the loan stocks only require interest or a redemption premium to be paid on redemption, the interest and redemption premium is recognised as income or capital as appropriate once redemption is reasonably certain. When a redemption premium is designed to protect the value of the instrument holder’s investment rather than reflect a commercial rate of revenue return, the redemption premium is recognised as capital. The treatment of redemption premiums is analysed to consider if they are revenue or capital in nature on a company by company basis. Accordingly, the redemption premium recognised in the year ended 31 December 2021 has been classified as capital and has been included within gains on investments. 2021 £ 2020 £ Income from bank deposits 18,559 29,451 Income from investments – from equities 348,420 657,891 – from overseas based OEICs 2,258 42,612 – from loan stock 984,972 2,113,964 – from interest on preference share dividend arrears - 17,770 1,335,650 2,832,237 Other income - 6,415 Total income 1,354,209 2,868,103 Total income comprises Dividends 350,678 700,503 Interest 1,003,531 2,161,185 Other income - 6,415 1,354,209 2,868,103 62 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Financial Statements Notes to the Financial Statements for the year ended 31 December 2021 63 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Financial Statements Total loan stock interest due but not recognised in the year was £458,279 (2020: £777,919). The decrease is due to the removal of a number of investee company provisions that were considered appropriate in the previous year due in light of the COVID-19 pandemic. 4 Investment Adviser’s fees and other expenses All expenses are accounted for on an accruals basis. a) Investment Adviser’s fees 25% of the Investment Adviser’s fee is charged to the revenue column of the Income Statement, while 75% is charged against the capital column of the Income Statement. This is in line with the Board’s expected long-term split of returns from the investment portfolio of the Company. 100% of any performance incentive fee payable for the year is charged against the capital column of the Income Statement, as it is based upon the achievement of capital growth. Revenue Capital Total Revenue Capital Total 2021 2021 2021 2020 2020 2020 £ £ £ £ £ £ Gresham House Asset Management Limited 428,601 1,285,804 1,714,405 309,827 929,481 1,239,308 Under the terms of a revised investment management agreement dated 12 November 2010, Mobeus Equity Partners LLP (“Mobeus”) (from 1 October 2021, Gresham House Asset Management Limited) provides investment advisory, administrative and company secretarial services to the Company, for a fee of 2% per annum of closing net assets, calculated on a quarterly basis by reference to the net assets at the end of the preceding quarter, plus a fixed fee of £115,440 per annum, the latter being subject to indexation, if applicable. In 2013, Mobeus agreed to waive such further increases due to indexation, until otherwise agreed with the Board. The Investment Adviser fee includes provision for a cap on expenses excluding irrecoverable VAT and exceptional items set at 3.4% of closing net assets at the year-end. In accordance with the investment management agreement, any excess expenses are borne by the Investment Adviser. The excess expenses during the year amounted to £nil (2020: £nil). In line with common practice, Gresham House retains the right to charge arrangement and syndication fees and Directors’ or monitoring fees to companies in which the Company invests. The Investment Adviser received fees totalling £349,777 (2020: £341,947) during the year ended 31 December 2021, being £132,666 (2020: £126,542) for arrangement fees, and £217,111 (2020: £215,405) for acting as non-executive directors on a number of investee company boards. These fees attributable to the Company are proportionate to the investment allocation to the Company which applied at the time of each investment. These figures are not part of these financial statements. b) Incentive fee agreement Under the terms of a separate agreement dated 1 November 2006, from the end of the accounting period ending on 31 January 2009 and in each subsequent accounting period throughout the life of the company, the Investment Adviser will be entitled to receive a performance related incentive fee of 20% of the dividends paid in excess of a “Target Rate” comprising firstly, an annual dividend target of 6% of the net asset value per share at 5 April 2007 (indexed each year for RPI) and secondly a requirement that any cumulative shortfalls below the 6 per cent hurdle must be made up in later years, while any excess is not carried forward, whether a fee is payable for that year or not. Payment of a fee is also conditional upon the average Net Asset Value (“NAV”) per share for each such year equalling or exceeding the average Base NAV per share for the same year. As at 31 December 2021, the average NAV per share is below the average Base NAV per share so no incentive fee is payable to date. c) Oer for Subscription fees 2021 £m 2020 £m Gross funds raised by the Company - 13.00 Oer costs payable to Mobeus at 3.00% of gross raised by the Company - 0.39 Under the terms of an Oer for Subscription, with the other Mobeus advised VCTs, launched on 25 October 2019, Mobeus was entitled to fees of 3.00% of the investment amount received from investors. This amount totalled £1.74 million across all four VCTs, out of which all the costs associated with the allotment were met, excluding any payments to advisers facilitated under the terms of the Oer. 64 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Financial Statements Notes to the Financial Statements for the year ended 31 December 2021 d) Other expenses Other Expenses are charged wholly to revenue, with the exception of expenses incidental to the acquisition or disposal of an investment, which are written o to the capital column of the Income Statement or deducted from the disposal proceeds as appropriate. 2021 £ 2020 £ Directors’ remuneration (including NIC of £9,750 (2020: £10,309)) - Note i) 144,750 141,524 IFA trail commission 88,938 78,825 Broker’s fees 12,000 9,000 Auditor’s fees – Audit of Company (excluding VAT) 33,191 26,650 – audit related assurance services (excluding VAT) - Note ii) 6,212 5,919 Registrar's fees 42,343 54,145 Printing 46,227 42,113 Legal & professional fees 14,274 11,544 VCT monitoring fees 9,600 9,600 Directors' insurance 8,975 7,573 Listing and regulatory fees 44,787 28,700 Sundry 9,591 8,333 Running Costs 460,888 423,926 Provision against loan interest receivable - Note iii) - 2,496 Other expenses 460,888 426,422 Note i): Directors’ remuneration is a related party transaction, see analysis in Directors’ Remuneration table on page 49, which excludes the NIC above. The key management personnel were the four Non-Executive Directors. The Company has no employees. At the year-end, £538 was owed from Christopher Burke due to an overpayment of salary, which was subsequently adjusted for in the following quarter. Note ii): The audit-related assurance services are in relation to a limited scope engagement in respect of the Financial Statements within the Company’s Interim Report. The Audit Committee reviews the nature and extent of these services to ensure that auditor independence is maintained. Note iii): Provision against loan interest receivable above relates to an amount of £nil (2020: £2,496), being a provision made against loan stock interest regarded as collectable in previous years. 5 Taxation on profit on ordinary activities The tax expense for the year comprises current tax and is recognised in profit or loss. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date. Any tax relief obtained in respect of adviser fees allocated to capital is reflected in the capital reserve – realised and a corresponding amount is charged against revenue. The tax relief is the amount by which corporation tax payable is reduced as a result of these capital expenses. Deferred tax is recognised in respect of all timing dierences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing dierences are dierences between the Company’s taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in the tax assessments in periods dierent from those in which they are recognised in the financial statements. Deferred tax is measured at the average tax rates that are expected to apply in the years in which the timing dierences are expected to reverse based on tax rates and laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax is measured on a non-discounted basis. A deferred tax asset would be recognised only to the extent that it is more likely than not that future taxable profits will be available against which the asset can be utilised. 65 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Financial Statements 2021 Revenue £ 2021 Capital £ 2021 Total £ 2020 Revenue £ 2020 Capital £ 2020 Total £ a) Analysis of tax charge: UK Corporation tax on profits for the year 22,097 (22,097) - 280,053 (176,602) 103,451 Total current tax charge 22,097 (22,097) - 280,053 (176,602) 103,451 Corporation tax is based on a rate of 19% (2020: 19%) b) Profit on ordinary activities before tax 464,720 28,618,532 29,083,252 2,131,854 12,378,203 14,510,057 Profit on ordinary activities multiplied by company rate of corporation tax in the UK of 19% (2020: 19%) 88,297 5,437,521 5,525,818 405,052 2,351,859 2,756,911 Eect of: UK dividends not taxable (66,200) - (66,200) (124,999) - (124,999) Net investment portfolio gains not taxable - (5,681,824) (5,681,824) - (2,528,461) (2,528,461) Expenditure not allowable for tax purposes - 222,206 222,206 - - - Actual tax charge 22,097 (22,097) - 280,053 (176,602) 103,451 Tax relief relating to investment adviser fees is allocated between revenue and capital where such relief can be utilised. No asset or liability has been recognised for deferred tax in relation to capital gains or losses on revaluing investments as the Company is exempt from corporation tax in relation to capital gains or losses as a result of qualifying as a Venture Capital Trust. There is no potential liability to deferred tax (2020: £nil). There is no unrecognised deferred tax asset in 2021 (2020: £nil). 6 Basic and diluted earnings per share 2021 £ 2020 £ Total earnings after taxation: 29,083,252 14,406,606 Basic and diluted earnings per share (Note a) 34.69p 17.27p Net revenue from ordinary activities after taxation 442,623 1,851,801 Basic and diluted revenue return per share (Note b) 0.53p 2.22p Net investment portfolio gains 29,904,336 13,307,684 Capital expenses (net of taxation) (1,263,707) (752,879) Total capital return 28,640,629 12,554,805 Basic and diluted capital return per share (Note c) 34.16p 15.05p Weighted average number of shares in issue in the year 83,840,235 83,426,755 Notes: a) Basic earnings per share is total earnings after taxation divided by the weighted average number of shares in issue. b) Basic revenue earnings per share is the revenue return after taxation divided by the weighted average number of shares in issue. c) Basic capital earnings per share is the total capital return after taxation divided by the weighted average number of shares in issue. d) There are no instruments that will increase the number of shares in issue in future. Accordingly, the above figures currently represent both basic and diluted returns. 66 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Financial Statements Notes to the Financial Statements for the year ended 31 December 2021 7 Dividends paid and payable Dividends payable are recognised as distributions in the financial statements when the Company’s liability to pay them has been established. This liability is established for interim dividends when they are paid, and for final dividends when they are approved by the Shareholders, usually at the Company’s Annual General Meeting. A key judgement in applying the above accounting policy is in determining the amount of minimum income dividend to be paid in respect of a year. The Company’s status as a VCT means it has to comply with Section 259 of the Income Tax Act 2007, which requires that no more than 15% of the income from shares and securities in a year can be retained from the revenue available for distribution for the year. Amounts recognised as distributions to equity Shareholders in the year: Dividend Type For year ended 31 December Pence per share Date Paid 2021 £ 2020 £ Final Capital 2019 4.00p 10/01/2020 - 2,671,965 Interim Income 2020 1.70p 07/05/2020 - 1,449,245 Interim Capital 2020 4.30p 07/05/2020 - 3,665,736 Interim Income 2021 0.25p 06/08/2021 208,381 - Interim Capital 2021 4.75p 06/08/2021 3,959,226 - 4,167,607* 7,786,946 * - Paid out of the Company’s special distributable reserve. ** - For the year ended 31 December 2021, £4,167,607 disclosed above diers to that shown in the Statement of Cash Flows of £6,106,267 due to a dividend payment of £2,579,776 made to the Registrar before the year-end in respect of the dividend paid to Shareholders on 7 January 2022. This amount is held as a debtor at the year-end. This amount was partially oset by £641,116 of new shares issued as part of the Company’s Dividend Investment Scheme. Distributions to equity holders after the year-end: Type For year ended 31 December Pence per share Date Payable 2021 £ 2020 £ Interim Income 2021 0.25p 07/01/2022 209,560 - Interim Capital 2021 3.75p 07/01/2022 3,143,394 - 3,352,954 - * - Paid out of the Company’s special distributable reserve. Any proposed final dividend is subject to approval by Shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. Set out below are the total income dividends payable in respect of the financial year, which is the basis on which the requirements of section 274 of the Income Tax Act 2007 are considered. Recognised income distributions in the Financial Statements for the year Dividend Type For year ended 31 December Pence per share Date payable 2021 £ 2020 £ Revenue available for distribution by way of dividends for the year 442,623 1,851,801 Interim Income 2020 1.70p 07/05/2020 - 1,449,245 Interim Income 2021 0.25p 06/08/2021 208,381 - Interim Income 2021 0.25p 07/01/2022 209,560 - Total income dividends for the year 417,941 1,449,245 8 Investments at fair value The most critical estimates, assumptions and judgements relate to the determination of the carrying value of investments at “fair value through profit and loss” (FVTPL). All investments held by the Company are classified as FVTPL and measured in accordance with the International Private Equity and Venture Capital Valuation (“IPEV”) guidelines, as updated in December 2018. This classification is followed as the Company’s business is to invest in financial assets with a view to profiting from their total return in the form of capital growth and income. Purchases and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional. For investments actively traded on organised financial markets, fair value is generally determined by reference to Stock Exchange market quoted bid prices at the close of business on the balance sheet date. Purchases and sales of quoted investments are recognised on the trade date where a contract of sale exists whose terms require delivery within a time frame determined by the relevant market. Where the terms of a disposal state that consideration may be received at some future date and, subject to the conditionality and materiality of the amount of deferred consideration, an estimate of the fair value discounted for the time value of money may be recognised through the Income Statement. In other cases, the proceeds will only be recognised once the right to receive payment is established and there is no reasonable doubt that payment will be received. Unquoted investments are stated at fair value by the Directors at each measurement date in accordance with appropriate valuation techniques, which are consistent with the IPEV guidelines:- (i) Each investment is considered as a whole on a ‘unit of account’ basis, i.e. that the value of each portfolio company is considered as a whole, alongside consideration of:- The price of new or follow-on investments made, if deemed to be made as part of an orderly transaction, are considered to be at fair value at the date of the transaction. The inputs that derived the investment price are calibrated within individual valuation models and at subsequent measurement dates, are reconsidered for any changes in light of more recent events or changes in the market performance of the investee company. The valuation bases used are the following: – a multiple basis. The shares may be valued by applying a suitable price-earnings ratio, revenue or gross profit multiple to that company’s historic, current or forecast post-tax earnings before interest, depreciation and amortisation, or revenue, or gross profit (the ratio used being based on a comparable sector but the resulting value being adjusted to reflect points of dierence identified by the Investment Adviser compared to the sector including, inter alia, scale and liquidity) or:- – where a company’s underperformance against plan indicates a diminution in the value of the investment, provision against price of new investment is made, as appropriate. (ii) Premiums, to the extent that they are considered capital in nature, and that they will be received upon repayment of loan stock investments, are accrued at fair value when the Company receives the right to the premium and when considered recoverable. (iii) Where a multiple or the price of recent investment less impairment basis is not appropriate and overriding factors apply, a discounted cash flow, net asset valuation, realisation proceeds or a weighted average of these bases may be applied. Capital gains and losses on investments, whether realised or unrealised, are dealt with in the profit and loss and revaluation reserves and movements in the period are shown in the Income Statement. All investments are initially recognised and subsequently measured at fair value. Changes in fair value are recognised in the Income Statement. A key judgement made in applying the above accounting policy relates to investments that are permanently impaired. Where the value of an investment has fallen permanently below price of recent investment, the loss is treated as a permanent impairment and as a realised loss, even though the investment is still held. The Board assesses the portfolio for such investments and, after agreement with the Investment Adviser, will agree the values that represent the extent to which an investment loss has become realised. This is based upon an assessment of objective evidence of that investment’s future prospects, to determine whether there is potential for the investment to recover in value. The methods of fair value measurement are classified into hierarchy based on the reliability of the information used to determine the valuation. - Level 1 – Fair value is measured based on quoted prices in an active market. - Level 2 – Fair value is measured based on directly observable current market prices or indirectly being derived from market prices. - Level 3 – Fair value is measured using valuation techniques using inputs that are not based on observable market data. 67 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Financial Statements Movements in investments during the year are summarised as follows: Traded on AIM £ Unquoted equity shares £ Unquoted preference shares £ Unquoted Loan stock £ Total £ Cost at 31 December 2020 50,011 19,150,794 905,332 12,836,189 32,942,326 Unrealised gains/(losses) at 31 December 2020 216,669 13,262,864 64,294 (3,337,894) 10,205,933 Permanent impairment in value of investments as at 31 December 2020 - (1,406,948) (227) (64,388) (1,471,563) Valuation at 31 December 2020 266,680 31,006,710 969,399 9,433,907 41,676,696 Purchases at cost - 4,238,438 566,200 1,430,654 6,235,292 Sale proceeds (Note a) (1,611,332) (6,905,286) (63,709) (3,651,530) (12,231,857) Reclassification at value (Note b) 6,638,097 (6,188,772) (449,325) - Net realised gains in the year 641,268 3,296,609 63,591 191,513 4,192,981 Net unrealised gains in the year (Note c) 3,969,042 20,524,983 72,857 1,144,473 25,711,355 Valuation at 31 December 2021 9,903,755 45,972,682 1,608,338 8,099,692 65,584,467 Cost at 31 December 2021 676,918 21,412,982 1,471,414 10,499,884 34,061,198 Unrealised gains/(losses) at 31 December 2021 9,226,837 25,791,648 137,151 (2,335,804) 32,819,832 Permanent impairment in value of investments at 31 December 2021 (Note d) - (1,231,948) (227) (64,388) (1,296,563) Valuation at 31 December 2021 9,903,755 45,972,682 1,608,338 8,099,692 65,584,467 Details of investment transactions such as disposal proceeds, valuation movements, cost and carrying value at the end of the previous year are contained in the Investment Portfolio Summary on pages 24 to 29. Net realised gains in the year of £4,192,981 and unrealised gains in the year of £25,711,355 equal net investment portfolio gains of £29,904,336 as shown on the Income Statement. 68 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Notes to the Financial Statements for the year ended 31 December 2021 Financial Statements Note a) Disposals of investment portfolio companies during the year were: Company Type Investment cost £ Disposal proceeds £ Valuation at 31 December 2020 £ Realised gain/(loss) in year £ Vian Marketing Limited (trading as Red Paddle Co) Realisation 789,006 3,947,311 1,465,304 2,482,007 Parsley Box Group plc (formerly Parsley Box Limited) Part Realisation 309,932 1,246,218 703,384 542,834 MPB Group Limited Part Realisation 385,741 1,596,618 1,185,343 411,275 My Tutorweb Limited Part Realisation 258,149 699,864 316,023 383,841 Media Business Insight Limited Loan repayment 497,718 497,718 308,854 188,864 Omega Diagnostics Group plc Realisation 50,011 422,823 266,680 156,143 Virgin Wines UK Plc (formerly Virgin Wines Holding Company Limited) Loan repayment 1,884,898 1,884,898 1,884,898 - CB Imports Group Limited Liquidation 175,000 - - - Proactive Group Holdings Inc Realisation 755,340 1,894,238 1,900,421 (6,183) Other capital proceeds Various 10,625 42,169 7,969 34,200 5,116,420 12,231,857 8,038,876 4,192,981 * Other capital proceeds contains a loan repayment of £10,625 from BG Training, and £89,253 of deferred consideration from companies realised in previous years, oset by a stamp duty payment of £57,709 upon the listing of Virgin Wines shares to AIM. Note b) The Company’s equity investments in Virgin Wines and Parsley Box were admitted to AIM during the year. The amount transferred from Level 3 to Level 1 of £6,638,097 reflects the combined equity value held at the start of the year and a follow-on investment made in the year. The amount of £449,325 transferred from unquoted loan stock to unquoted equity shares represents the conversion of the loans held in two portfolio companies into equity shares during the year. Note c) The major components of the net increase in unrealised valuations of £25,711,355 in the year were increases of £6,199,781 in Preservica Limited, of £5,058,228 in Virgin Wines UK plc (previously Virgin Wines Holding Company Limited), £2,855,153 in Media Business Insight Holdings Limited, £2,823,085 in MPB Group Limited, and £2,446,555 in EOTH Limited. These increases were partly oset by the falls of £1,089,186 in Parsley Box Group plc (formerly Parsley Box Limited), £169,104 in Muller EV Limited (trading as Andersen EV), and £151,501 in Bleach London Holdings Limited. Note d) During the year, permanent impairments of the cost of investments have reduced from £1,471,563 to £1,296,563 due to the disposal of one investee company. 69 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Financial Statements 9 Significant interests At 31 December 2021 the Company held significant investments, amounting to 3% or more of the equity capital of an undertaking, in the following companies: Equity investment (Ordinary shares) Investment in loan stock and preference shares Total investment (at cost) Percentage of investee company’s total equity % of equity held by all funds advised and managed by Gresham House 1 £ £ £ Preservica Limited 1,359,179 2,038,566 3,397,745 13.1% 57.9% My Tutorweb Limited (trading as MyTutor) 2,464,757 - 2,464,757 5.3% 22.6% Manufacturing Services Investment Limited (trading as Wetsuit Outlet) 1,166,551 1,166,551 2,333,102 6.4% 27.5% Media Business Insight Holdings Limited 2 1,089,103 1,135,939 2,225,042 15.7% 67.5% Veritek Global Holdings Limited 43,527 1,576,559 1,620,086 15.4% 65.6% Arkk Consulting Limited 671,090 928,355 1,599,445 6.7% 30.1% End Ordinary Group Limited (trading as Buster & Punch) 1,496,785 - 1,496,785 7.8% 34.6% CGI Creative Graphics International Limited 476,612 973,134 1,449,746 6.3% 26.9% Data Discovery Solutions Limited (trading as ActiveNav) 1,408,640 - 1,408,640 7.7% 35.1% Spanish Restaurant Group Limited (trading as Tapas Revolution) 406,396 812,700 1,219,096 6.7% 29.0% MPB Group Limited 1,095,252 - 1,095,252 3.2% 14.4% Tharstern Group Limited 338,861 753,025 1,091,886 12.7% 55.0% RDL Corporation Limited 173,932 826,068 1,000,000 8.9% 44.5% Vivacity Labs Limited 914,754 - 914,754 4.4% 20.0% Bella & Duke Limited 877,381 - 877,381 4.4% 21.2% Rota Geek Limited 874,000 - 874,000 4.4% 20.3% Connect Childcare Limited 423,007 423,000 846,007 3.0% 14.4% Legatics Limited 663,011 - 663,011 6.0% 27.3% Pets' Kitchen Limited (trading as Vet's Klinic) 360,640 270,480 631,120 4.5% 20.0% Parsley Box Group plc (formerly Parsley Box Limited) 631,003 - 631,003 3.1% 13.9% Bleach London Holdings Limited 519,672 110,100 629,772 3.1% 14.1% IPV Limited 619,487 - 619,487 5.5% 26.6% BookingTek Limited 582,300 - 582,300 3.5% 14.9% Oakheath Limited (in members' voluntary liquidation) 485,730 - 485,730 4.3% 18.7% Jablite Holdings Limited (in members' voluntary liquidation) 339,974 36,109 376,083 9.1% 40.1% Master Removers Group 2019 Limited (trading as Anthony Ward Thomas, Bishopsgate and Aussie Man & Van) 348,641 - 348,641 6.6% 28.1% Muller EV Limited (trading as Andersen EV) 341,600 - 341,600 7.2% 37.0% Kudos Innovations Limited 328,950 - 328,950 2.4% 10.9% Caledonian Leisure Limited 328,502 - 328,502 6.6% 30.0% Northern Bloc Ice Cream Limited 304,050 - 304,050 5.5% 27.3% Virgin Wines UK plc (formerly Virgin Wines Holding Company Limited) 3 45,915 - 45,915 8.3% 41.5% 1 – The percentage of equity held for these companies is the fully diluted figure, in the event that, for example, management of the investee company exercises share options, where available. 2 – Includes a loan of £177,037 to Media Business Insight Limited. 3 – The proportion of equity held by the four Mobeus VCTs is 36.1%. 5.4% is held by other funds managed by Gresham House Asset Management. 70 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Notes to the Financial Statements for the year ended 31 December 2021 Financial Statements It is considered that, under FRS102 s9.9, “Consolidated and Separate Financial Statements”, the above investments are held as part of an investment portfolio and that accordingly, their value to the Company lies in their marketable value as part of that portfolio and as such are not required to be consolidated. Also, the above investments are considered to be associates that are held as part of an investment portfolio and are accounted for in accordance with FRS 14.4B. All of the above companies are incorporated in the United Kingdom. 10 Debtors 2021 £ 2020 £ Amounts due within one year: Accrued income 297,687 386,968 Prepayments 17,532 12,370 Other debtors 2,580,313 4,230 2,895,532 403,568 Note: Other debtors of £2,580,313 includes a dividend payment of £2,579,776 made to the Registrar before the year-end in respect of the dividend paid to Shareholders on 7 January 2022. 11 Cash at bank and Current Investments Cash equivalents, for the purposes of the Statement of Cash flows, comprises bank deposits repayable on up to three months’ notice and funds held in OEIC money-market funds. Current asset investments are the same but also include bank deposits that mature after three months. Current asset investments are disposable without curtailing or disrupting the business and are readily convertible into known amounts of cash at their carrying values at immediate or up to three months’ notice. Cash, for the purposes of the Statement of Cash Flows, is cash held with banks in accounts subject to immediate access. Cash at bank in the Balance Sheet is the same. 2021 £ 2020 £ OEIC Money market funds 18,475,179 20,634,956 Cash equivalents per Statement of Cash Flows 18,475,179 20,634,956 Bank deposits that mature after three months 2,000,000 2,000,000 Current asset investments 20,475,179 22,634,956 Cash at bank 4,059,487 4,053,536 12 Creditors: amounts falling due within one year 2021 £ 2020 £ Trade creditors 9,140 20,225 Other creditors 26,752 18,261 Corporation tax - 103,451 Accruals 191,519 165,624 227,411 307,561 71 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Financial Statements 13 Called up share capital 2021 £ 2020 £ Allotted, called-up and fully paid: Ordinary shares of 1p each: 83,389,721 (2020: 84,004,018) 833,897 840,040 During the year, the Company purchased 1,309,349 (2020: 1,245,646) of its own shares for cash (representing 1.6% (2020: 1.9%) of the shares in issue at the start of the year) at the prevailing market price for a total cost of £1,230,702 (2020: £728,216). These shares were subsequently cancelled by the Company. Under the terms of the Dividend Investment Scheme, 695,052 shares were allotted during the year for a non-cash consideration of £641,116. 14 Basic and diluted net asset value per share Net asset value per Ordinary Share is based on net assets at the end of the year, and on 83,389,721 (2020: 84,004,018) Ordinary shares, being the number of Ordinary shares in issue on that date. There are no instruments that will increase the number of shares in issue in future. Accordingly, the figures currently represent both basic and diluted net asset value per share. 15 Financial instruments The Company’s financial instruments predominantly comprise investments held at fair value through profit and loss, namely equity and preference shares and fixed and floating rate interest securities that are held in accordance with the Company’s investment objective. Other financial instruments are held at amortised cost comprising loans and receivables being cash at bank, current asset investments and short term debtors, and financial liabilities being creditors, all arising directly from the Company’s operations. The principal purpose of these financial instruments is to generate revenue and capital appreciation for the Company’s operations, although cash and current asset investments are not held with a view to capital appreciation. The Company has no gearing or other financial liabilities apart from short-term creditors. It is, and has been throughout the year under review, the Company’s policy that no trading in derivative financial instruments shall be undertaken. The accounting policy for determining the fair value of investments is set out in Note 8 to the Financial Statements. The composition of investments held is shown below and in Note 8. Loans and receivables and other financial liabilities are stated at amortised cost which the Directors consider is equivalent to fair value. Classification of financial instruments The Company held the following categories of financial instruments at 31 December 2021: 2021 (Fair value) 2020 (Fair value) £ £ Assets at fair value through profit and loss: Investment portfolio 65,584,467 41,676,696 Loans and receivables held at amortised cost Accrued income 297,687 386,968 Cash at bank 4,059,487 4,053,536 Current asset investments 20,475,179 22,634,956 Other debtors 2,580,313 4,230 Liabilities at amortised cost or equivalent Other creditors (227,411) (204,110) Total for financial instruments 92,769,722 68,552,276 Non-financial instruments 17,532 (91,081) Total net assets 92,787,254 68,461,195 72 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Notes to the Financial Statements for the year ended 31 December 2021 Financial Statements There are no dierences between book value and fair value disclosed above. The investment portfolio principally consists of unquoted investments 84.9% (2020: 99.4%) and AIM quoted stocks 15.1% (2020:0.6%). The investment portfolio has a 100% (2020: 100%) concentration of risk towards small UK based, sterling denominated companies, and represents 70.7% (2020: 60.9%) of net assets at the year-end. Current asset investments are money market funds, and bank deposits which, along with cash are discussed under credit risk below, which represent 26.4% (2020: 39.0%) of net assets at the year-end. The main risks arising from the Company’s financial instruments are the investment risk, and the liquidity risk, of the unquoted portfolio. Other important risks are credit risk, fluctuations in market prices (market price risk), and cash flow interest rate risk, although currency risk is also discussed below. The Board regularly reviews and agrees policies for managing each of these risks and they are summarised below. These have been in place throughout the current and preceding years. Investment risk The Company’s investment portfolio is made up of predominantly UK companies which are not quoted on any recognised stock exchange, although 15.1% of the portfolio value at the year-end is held in AIM quoted assets which were admitted during the year. The companies held in the portfolio are usually smaller than those companies which are quoted on a stock exchange. They are therefore usually regarded as carrying more risk compared to larger companies, as they are more sensitive to changes in key financial indicators, such as a reduction in turnover or an increase in costs. The Board is of the view that the Investment Adviser mitigates this risk as the investment in an investee company is held as part of a portfolio of such companies so that the performance of one company does not significantly aect the value of the portfolio as a whole. The Investment Adviser also usually takes a seat on the Board of each investee company such that it is able to monitor its progress on a regular basis and contribute to the strategic direction of the company. Liquidity risk The investments in equity and fixed interest stocks of unquoted companies that the Company holds are not traded and therefore they are not readily realisable. The ability of the Company to realise the investments at their carrying value may at times not be possible if there are no willing purchasers and, as the Company owns minority stakes, could require a number of months and the co-operation of other Shareholders to achieve at a reasonable valuation. The Company’s ability to sell investments may also be constrained by the requirements set down for VCTs. The maturity profile of the Company’s loan stock investments disclosed within the consideration of credit risk below indicates that these assets are also not readily realisable until dates up to five years from the year-end. To counter these risks to the Company’s liquidity, the Investment Adviser maintains sucient cash and money market funds to meet running costs and other commitments. The Company invests its surplus funds in high quality money market funds and bank deposits, together totalling, £20,475,179 (2020: £22,634,956), which are all accessible at varying points over the next 12 months. The Board also receives regular cash flow projections in order to manage this liquidity risk. The table below shows a maturity analysis of financial liabilities: 2021 <3 months 3-6 months 6-12 months over 12 months Total Financial liabilities £ £ £ £ £ Other creditors 125,218 102,193 - - 227,411 2020 <3 months 3-6 months 6-12 months over 12 months Total Financial liabilities £ £ £ £ £ Other creditors 117,035 87,075 - - 204,110 The Company does not have any derivative financial liabilities. 73 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Financial Statements Credit risk Credit risk is the risk that a counterparty will fail to discharge an obligation or commitment that it has entered into with the Company. The Company’s maximum exposure to credit risk is: 2021 £ 2020 £ Loan stock investments 8,099,692 9,433,907 Current asset investments 20,475,179 22,634,956 Cash at bank 4,059,487 4,053,536 Accrued income 297,687 386,968 Other debtors 2,580,313 4,230 35,512,358 36,513,597 The Company has an exposure to credit risk in respect of the loan stock investments it has made into investee companies, most of which have no security attached to them, and where they do, such security ranks beneath any bank debt that an investee company may owe. The loan stock is typically held in companies with turnover under £50 million, which may be considered less stable than larger, longer established businesses. The Investment Adviser undertakes extensive financial and commercial due diligence before recommending an investment to the Board. The Investment Adviser usually takes a seat on the Board of each investee company and the Board of the VCT receives regular updates on each company at each quarter end. The accrued income shown above of £297,687 was all due within six months of the year-end. The following table shows the maturity of the loan stock investments referred to above. In some cases, the loan maturities are not the contractual ones, but are the best estimate using management’s expectations of when it is likely that such loans may be repaid. Repayable within 2021 £ 2020 £ 0 to 1 year 980,756 2,278,928 1 to 2 years 3,829,649 1,670,191 2 to 3 years 1,135,939 3,194,882 3 to 4 years 989,348 1,153,065 4 to 5 years 847,587 985,594 > 5 years 316,413 151,247 Total 8,099,692 9,433,907 Included within loan stock investments above are loans to five investee companies at a carrying value of £3,853,974 which are past their repayment date but have been renegotiated. A loan to one other company with a value of £49,597 is now past its repayment date but has not yet been renegotiated. The loan stock investments are made as part of the qualifying investments within the investment portfolio, and the risk management processes applied to the loan stock investments have already been set out under market price risk below. An aged analysis of the value of loan stock investments included above, which are past due but not individually impaired, is set out below. For this purpose, these loans are considered to be past due when any payment due under the loan’s contractual terms (such as payment of interest or redemption date) is received late or missed. We are required to report in this format and include the full value of the loan even though in some cases, it is only in respect of interest that they are in default. 0-6 months 6-12 months over 12 months 2021 Total £ £ £ £ Loans to investee companies past due - - 1,894,811 1,894,811 0-6 months 6-12 months over 12 months 2020 Total £ £ £ £ Loans to investee companies past due 139,317 542,096 1,063,345 1,744,758 74 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Notes to the Financial Statements for the year ended 31 December 2021 Financial Statements Credit risk also arises from cash and cash equivalents, deposits with banks and amounts held in liquidity funds. There is a risk of liquidity fund defaults such that there could be defaults within their underlying portfolios that could aect the values at which the Company could sell its holdings. The five OEIC money market funds holding £18,475,179 are all triple A rated funds and, along with bank deposits of £4,171,539 at six well-known financial institutions with credit ratings ranging from Baa1 to Aa3, credit risk is considered to be relatively low in current circumstances. The Board manages credit risk in respect of these money market funds and cash by ensuring a spread of such investments such that none should exceed 15% of the Company’s total investment assets. The Company’s current account totalling £1,887,948 is held with NatWest Bank plc (credit rating Aa3),, so the risk of default is considered to be low. There could also be a failure by counter-parties to deliver securities which the Company has paid for, or pay for securities which the Company has delivered. This risk is considered to be small as most of the Company’s investment transactions are in unquoted investments, where investments are conducted through solicitors, to ensure that payment matches delivery. In respect of any quoted investment transactions that are undertaken, the Company uses brokers with a high credit quality, and these trades usually have a short settlement period. Accordingly, counterparty risk is considered to be relatively low. Market price risk Market price risk arises from uncertainty about the future valuations of the unquoted portfolio held in accordance with the Company’s investment objectives. These future valuations are determined by many factors but include the operational and financial performance of the underlying investee companies (Investment risk), as well as market perceptions of the future performance of the UK economy and its impact upon the economic environment in which these companies operate. This risk represents the potential loss that the Company might suer through holding its investment portfolio in the face of market movements, which was a maximum of £65,584,467 at the year-end, representing the fair value of the investment portfolio. The investments in equity and fixed interest stocks of unquoted companies that the Company holds are not traded and as such the prices are more uncertain than those of more widely traded securities. As, in a number of cases, the unquoted investments are valued by reference to price earnings ratios or revenue multiples, prevailing in quoted comparable sectors (discounted for points of dierence from quoted comparators), their valuations are exposed to changes in the price earnings ratios that exist in the quoted markets. The Board’s strategy in managing the market price risk inherent in the Company’s portfolio of equities and loan stock investments is determined by the requirement to meet the Company’s Objective, as set out on page 6 in the Strategic Report. As part of the investment management process, the Board seeks to maintain an appropriate spread of market risk, and also has full and timely access to relevant information from the Investment Adviser. No single investment is permitted to exceed 15% of total investment assets at the point of investment. The Investment Committee meets regularly and reviews the investment performance and financial results, as well as compliance with the Company’s objectives. The Company does not use derivative instruments to hedge against market risk. Market price risk sensitivity The Board believes that the Company’s assets are mainly exposed to market price risk, as the Company is required to hold most of its assets in the form of sterling denominated investments in small companies. Although some assets are now quoted on AIM, most portfolio assets are unquoted. All of the investments made by the Investment Adviser in unquoted companies, irrespective of the instruments the Company actually holds, (whether shares, preference shares or loan stock) carry a full market risk, even though some of the loan stocks may be secured on assets, but behind any prior ranking bank debt in the investee company. The Board considers that the value of investments in equity and loan stock instruments are ultimately sensitive to changes in their trading performance (discussed under investment risk above) and to in quoted share prices, insofar as such changes eventually aect the enterprise value of unquoted companies. The table below shows the impact on profit and net assets if there were to be a 20% (2020: 20%) movement in overall share prices, which might in part be caused by changes in interest rate levels. However, it is not considered possible to evaluate separately the impact of changes in interest rates upon the value of the Company’s portfolios of investments in small, unquoted companies. The sensitivity analysis below assumes the actual portfolio of investments held by the Company is perfectly correlated to this overall movement in share prices. However, Shareholders should note that this level of correlation is unlikely to be the case in reality, particularly in the case of small, unquoted companies which may have other factors which may influence the extent of the valuation change, e.g. a strong niche brand may limit the valuation fall compared to comparators, or may be more aected by external market factors than larger companies. For each of the companies in the investment portfolio that are valued on a multiple or bid price basis, the calculation below has applied plus and minus 20% to bid price or multiple (such as earnings or revenue) derived from quoted market comparators that are used to value the companies. The companies valued on a multiple or bid price basis represent £63.10 million (2020: £40.11 million) of the total investment portfolio of £65.58 million (2020: £41.68 million). The remainder of the portfolio is valued at either price of recent investment or net asset value, as shown below. The impact of a change of 20% (2020: 20%) has been selected as this is considered reasonable given the level of volatility observed both on a historical basis and market expectations for future movement. 75 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Financial Statements 2021 2020 Profit and net assets Profit and net assets £ £ If overall share prices rose/fell by 20% (2020: 20%), with all other variables held constant – increase/(decrease) 9,108,542 / (8,836,756) 4,865,829 / (4,824,319) Increase/(decrease) in earnings, and net asset value, per ordinary share (in pence) 10.92p / (10.60)p 5.79p / (5.74p) Cash flow interest rate risk The Company’s fixed and floating rate interest securities, its equity and preference equity investments and net revenue may be aected by interest rate movements. Investments are often in relatively small businesses, which are relatively high risk investments sensitive to interest rate fluctuations. Due to the short time to maturity of some of the Company’s floating rate investments, it may not be possible to re-invest in assets which provide the same rates as those currently held. The Company’s assets include fixed and floating rate interest instruments, as shown below. The rate of interest earned is regularly reviewed by the Board, as part of the risk management processes applied to these instruments, already disclosed under market price risk above. The interest rate profile of the Company’s financial net assets at 31 December 2021 was: Financial net assets on which no interest paid Fixed rate financial assets Variable rate financial assets Total Weighted average interest rate Average period to maturity £ £ £ £ % (years) Equity shares 55,876,437 - - 55,876,437 Preference shares - 1,608,338 - 1,608,338 - 3.9 Loan stocks - 8,099,692 - 8,099,692 10.0 1.9 Current investments - - 20,475,179 20,475,179 0.3 Cash - - 4,059,487 4,059,487 0.1 Debtors 2,878,000 - - 2,878,000 Creditors (227,411) - - (227,411) Total for financial instruments 58,527,026 9,708,030 24,534,666 92,769,722 Non-financial instruments 17,532 - - 17,532 Total net assets 58,544,558 9,708,030 24,534,666 92,787,254 76 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Notes to the Financial Statements for the year ended 31 December 2021 Financial Statements The interest rate profile of the Company’s financial net assets at 31 December 2020 was: Financial net assets on which no interest paid Fixed rate financial assets Variable rate financial assets Total Weighted average interest rate Average period to maturity £ £ £ £ % (years) Equity shares 31,273,390 - - 31,273,390 Preference shares - 969,399 - 969,399 - 4.0 Loan stocks - 9,433,907 - 9,433,907 8.4 2.2 Current investments - - 22,634,956 22,634,956 0.1 Cash - - 4,053,536 4,053,536 0.1 Debtors 391,198 - - 391,198 Creditors (204,110) - - (204,110) Total for financial instruments 31,460,478 10,403,306 26,688,492 68,552,276 Non-financial instruments (91,081) - - (91,081) Total net assets 31,369,397 10,403,306 26,688,492 68,461,195 Note: Weighted average interest rates above are derived by calculating the expected annual income that would be earned on each asset (but only for those sums that are currently regarded as collectible and would therefore be recognised), divided by the values for each asset class at the balance sheet date. Variable rate cash earns interest based on LIBOR rates. The Company’s investments in equity shares have been excluded from the interest rate risk profile as they do not yield interest and have no maturity date. Their inclusion would distort the weighted average period information above. Cash flow interest rate sensitivity Although the Company holds investments in loan stocks that pay interest, the Board does not consider it appropriate to assess the impact of interest rate changes in isolation upon the value of the unquoted investment portfolio, as interest rate changes are only one factor aecting the market price movements that are discussed above under market price risk. However, as the Company has a substantial proportion of its assets in money market funds, the table below shows the sensitivity of income earned to changes in interest rates: 2021 Profit and net assets £ 2020 Profit and net assets £ If interest rates rose/fell by 1%, with all other variables held constant – increase/ (decrease) 198,731 / (198,731) 216,177 / (216,177) Increase/(decrease) in earnings, and net asset value, per Ordinary share (in pence) 0.24p / (0.24)p 0.26p / (0.26)p Currency risk All assets and liabilities are denominated in sterling and therefore there is no currency risk, although a number of investee companies do trade overseas, so do face some exposure to currency risk in their operations. Fair value hierarchy The table overleaf sets out fair value measurements using FRS102 s11.27 fair value hierarchy. 77 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Financial Statements Financial assets at fair value through profit and loss Level 1 Level 2 Level 3 Total At 31 December 2021 £ £ £ £ Equity investments 9,903,755 - 45,972,682 55,876,437 Preference shares - - 1,608,338 1,608,338 Loan stock investments - - 8,099,692 8,099,692 Total 9,903,755 - 55,680,712 65,584,467 Financial assets at fair value through profit and loss Level 1 Level 2 Level 3 Total At 31 December 2020 £ £ £ £ Equity investments 266,680 - 31,006,710 31,273,390 Preference shares - - 969,399 969,399 Loan stock investments - - 9,433,907 9,433,907 Total 266,680 - 41,410,016 41,676,696 There are currently no financial liabilities at fair value through profit and loss. Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset as follows: Level 1 – valued using quoted prices in active markets for identical assets Level 2 – valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1. Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market data. The valuation techniques used by the Company are explained in the accounting policies in Note 8 to these Financial Statements. There have been no transfers during the year between Levels 1 and 2. A reconciliation of fair value measurements in Level 3 is set out below: Equity investments Preference shares Loan stock investments Total £ £ £ £ Opening balance at 1 January 2021 31,006,710 969,399 9,433,907 41,410,016 Purchases 4,238,438 566,200 1,430,654 6,235,292 Sales (6,905,286) (63,709) (3,651,530) (10,620,525) Transfers out of Level 3 (6,638,097) - - (6,638,097) Reclassification at value 449,325 - (449,325) - Total gains included in gains on investments in the Income Statement: - on assets sold or impaired 3,296,609 63,591 191,513 3,551,713 - on assets held at the year-end 20,524,983 72,857 1,144,473 21,742,313 Closing balance at 31 December 2021 45,972,682 1,608,338 8,099,692 55,680,712 As detailed in the accounting policy for Note 8, where investments are valued on an earnings-multiple basis, the main input used for this basis of valuation is a suitable price-earnings ratio taken from a comparable sector on the quoted market which is then appropriately adjusted for points of dierence. Thus any change in share prices can have a significant eect on the value measurements of the Level 3 investments, as they may not be wholly oset by the adjustment for points of dierence. 78 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Notes to the Financial Statements for the year ended 31 December 2021 Financial Statements Level 3 unquoted equity and loan stock investments are valued in accordance with the IPEV guidelines as follows: 2021 £ 2020 £ Valuation methodology Multiple of earnings, revenues or gross margin, as appropriate 55,435,915 39,839,162 Recent investment price (reviewed for impairment) 195,200 - Estimated realisation proceeds 49,597 57,566 Recent investment price - 1,150,057 Net asset value - 363,231 55,680,712 41,410,016 The unquoted equity and loan stock investments had the following movements between valuation methodologies between 31 December 2020 and 31 December 2021: Change in valuation methodology Carrying value as at 31 December 2021 £ Explanatory note Recent investment price to multiple basis 1,492,878 Sucient time has elapsed since investment to move to a more appropriate basis for determining value Multiple basis to recent investment price (reviewed for impairment) 195,200 Recent investment price (reviewed for impairment) is a more appropriate basis for determining fair value. Net asset value to multiple basis 739,557 Multiple a more appropriate basis for determining fair value. Weighted multiple/net asset basis to multiple basis 3,957,481 Multiple is a more appropriate basis for determining fair value The valuation will be the most appropriate valuation methodology for an investment within its market, with regard to the financial health of the investment and the December 2018 IPEV guidelines. The Directors believe that, within these parameters, there are no other possible methods of valuation which would be reasonable as at 31 December 2021. 16 Management of capital The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern, so that it can continue to provide returns for Shareholders. It aims to provide an adequate return to shareholders by allocating its capital to assets commensurate with the level of risk. By its nature, the Company has an amount of capital, at least 80% (as measured under the tax legislation) of which is and must remain, invested in the relatively high risk asset class of small UK companies within three years of that capital being subscribed. The Company accordingly has limited scope to manage its capital structure in the light of changes in economic conditions and the risk characteristics of the underlying assets. Subject to this overall constraint upon changing the capital structure, the group may adjust the amount of dividends paid to Shareholders, return capital to Shareholders, issue new shares, or sell assets if so required to maintain a level of liquidity to remain a going concern. Although, as the Investment Policy implies, the Board would consider levels of gearing, there are no current plans to do so. It regards the net assets of the Company as the Company’s capital, as the levels of liabilities are small and the management of them is not directly related to managing the return to Shareholders. There has been no change in this approach from the previous year. 17 Segmental analysis The operations of the Company are wholly in the United Kingdom, from one class of business. 18 Post balance sheet events On 7 January 2022, the Company paid a 4.00 pence per share dividend to Shareholders in respect of the year ended 31 December 2021. On 24 January 2022 and 22 February 2022, further investments totalling £0.22 million were made into Caledonian Leisure Limited. On 1 February 2022, a loan repayment of £0.10 million was received from Media Business Insight Limited. On 10 February 2022, a new investment of £0.61 million was made into Proximity Insight Limited. On 16 February 2022, deferred proceeds of £0.40 million were received in respect of Vian Marketing Limited (trading as Red Paddle Co), an investment realised in a previous year. Prior to the allotment of shares under the 2022 Oer for Subscription launched on 20 January 2022, the NAV was updated as at 28 February 2022 as the basis for allocation. This produced a NAV per share of 98.77 pence compared to a NAV per share at 31 December 2021 of 107.27 pence (adjusted for the 4 pence dividend paid on 7 January 2022). Subsequently, on 9 March 2022, 7,361,191 Ordinary Shares were allotted at an average eective oer price of 101.89 pence per share, raising net funds of £7.27 million. On 6 April 2022, a further investment of £0.12 million was made into Northern Bloc Ice Cream Limited. 79 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Financial Statements 80 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Shareholder Information Communication with Shareholders We aim to communicate regularly with our Shareholders. The annual general meetings provide a useful platform for the Board to meet Shareholders and exchange views and we are pleased to be able to hold a physical meeting in 2022. We will also oer a facility whereby you can view the Board, and the Investment Adviser’s presentation remotely via live stream. Your Board welcomes your attendance at the May Annual General Meeting to give you the opportunity to meet the Directors and representatives of the Investment Adviser. The Company releases Interim Management Statements in respect of those quarters where it does not publish half or full year accounts via the London Stock Exchange RNS service. The Investment Adviser previously held an annual Shareholder event, though was unable to so during 2021 due to COVID-19 restrictions aecting prior plans. Gresham House was pleased present the Company’s first virtual Shareholder event on 25 February 2022. Shareholders wishing to follow the Company’s progress can visit its website at www.mig4vct.co.uk. The website includes up-to-date details on fund performance and dividends as well as publicly available information on the Company’s portfolio of investments and copies of company reports. There is also a link to the London Stock Exchange’s website at: www.londonstockexchange.com, where Shareholders can obtain details of the share price and latest NAV announcements, etc. Financial calendar 25 February 2022 Virtual Shareholder Event (please register to view the recording which is available online at https://mvcts.connectid.cloud/) 6 April 2022 Announcement of Annual Results and circulation to Shareholders of Annual Report & Financial Statements for the year ended 31 December 2021 17 May 2022 Annual General Meeting September 2022 Announcement of Half-Year Results and circulation of Half-Year Report for the six months ended 30 June 2022 to Shareholders 31 December 2022 Year-end TBC 2023 Shareholder Event Gresham House website Shareholders can check the performance of the VCT by visiting the Investment Adviser’s website www.greshamhouse.com. This is regularly updated with information on your investment including case studies of portfolio companies. The website includes relevant Shareholder literature, including previous Annual and Half-Year Reports and the Company’s Key Information Document (“KID”) - Investors should note that the process for compiling the KID are prescribed by EU law and the Company has no discretion over the format or content of the document. The illustrated performance returns in the KID cannot be guaranteed and may not reflect figures for the Company derived using other methods. Accordingly, the Board recommends that investors also take account of information from other sources, including the Annual Reports. Annual General Meeting The Company’s next Annual General Meeting will be held on Tuesday, 17 May 2022 at 11.30 am at the oces of Shakespeare Martineau, 6th Floor, 60 Gracechurch Street, London, EC3V 0HR. Shareholders will also be able to view the meeting remotely by registering for access to a web stream link which can be found on the Company’s website at www.mig4vct.co.uk. Shareholders will be able to vote on a show of hands at the meeting. Shareholders will also be able to submit questions to the Board in advance of the meeting using the [email protected] email address. Shareholders attending virtually will not be able to vote at the meeting and therefore you are encouraged to lodge your proxy form, which is included with Shareholders’ copies of this Annual Report, or on-line at www.signalshares.com before 13 May 2022 at 11.30am for your votes to be valid. A copy of the Notice of the Meeting is included on pages 82 to 84. Dividends Shareholders who wish to have dividends paid directly into their bank account, rather than sent by cheque to their registered address, can complete a mandate for this purpose. Mandates can be obtained by contacting the Company’s Registrar, Link Group, at the address given on page 86. Shareholders are encouraged to ensure that the Registrar maintains up-to-date details for their account and to check whether they have received all dividend payments. This is particularly important if a Shareholder has recently changed address or changed their bank. We are aware that a number of dividends remain unclaimed by Shareholders and whilst we will endeavour to contact them if this is the case, we cannot guarantee that we will be able to do so if the Registrar does not have an up-to-date postal or email address. Dividend Investment Scheme (“DIS”) Those Shareholders who wish to participate, or to amend their existing participation in the DIS, can do so by visiting www.mig4vct.co.uk and click the Dividends tab or by contacting the Registrar directly using the details on page 86. Please note that Shareholders’ elections to participate or amendments to participation in the Scheme require 15 days to become eective. Selling your shares The Company’s Shares are listed on the London Stock Exchange and as such they can be sold in the same way as any other quoted company through a stockbroker. Shareholders are also advised to discuss their individual tax position with their financial advisor before deciding to sell their shares. Information for Shareholders Information for Shareholders 81 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Information for Shareholders The Company is unable to buy back shares direct from Shareholders, so you will need to use a stockbroker to sell your shares. If you are considering selling your shares or trading in the secondary market, please contact the Company’s Corporate Broker, Panmure Gordon (UK) Limited (“Panmure”). Panmure is able to provide details of close periods (when the Company is prohibited from buying in shares) and details of the price at which the Company has bought in shares. Panmure can be contacted as follows: Chris Lloyd - 0207 886 2716 [email protected] Paul Nolan - 0207 886 2717 [email protected] Common Reporting Standard (“CRS”) and Foreign Account Tax Compliance Act (“FATCA”) Tax legislation was introduced with eect from 1st January 2016 under the Organisation for Economic Co-operation and Development Common Reporting Standard for Automatic Exchange of Financial Account Information. The legislation requires investment trust companies to provide personal information to HMRC on certain investors who purchase shares. As an aected entity, the Company has to provide information annually to HMRC relating to a number of non-UK based certificated Shareholders who are deemed to be resident for tax purposes in any of the 90 plus countries who have joined CRS. All new Shareholders, excluding those whose shares are held in CREST, entered onto the share register from 1 January 2016 will be asked to provide the relevant information. Additionally, HMRC’s policy on FATCA now means that, as a result of the restricted secondary market in VCT shares, the Company’s shares are not considered to be “regularly traded”. The Company is therefore also an aected entity for the purposes of this legislation and so has to provide information annually to HMRC relating to Shareholders who are resident for tax purposes in the United States. For further information, please see HMRC’s Quick Guide: Automatic Exchange of Information – information for account holders: https://www.gov.uk/government /publications/exchange-of-information-account-holders. Managing your shareholding online For details on your individual shareholding and to manage your account online, Shareholders may log into or register with the Link Group Shareholder Portal at: www.signalshares.com. You can use the Shareholder Portal to change and update your preferences including changing your address details, check your holding balance and transactions, view the dividends you have received, add and amend your bank details and manage how you receive communications from the Company. Fraud Warning Boiler Room fraud and unsolicited communications to Shareholders. We have been made aware of a number of Shareholders being contacted in connection with sophisticated but fraudulent financial scams which purport to come from the Company or to be authorised by it. This is often by a phone call or an email usually originating from outside of the UK, often claiming or appearing to be from a corporate finance firm oering to buy your VCT shares at an inflated price. Further information on boiler room scams and fraud advice plus who to contact, can be found first in the answer to a question “What should I do if I receive an unsolicited oer for my shares?” within the VCT Investor area of the Investment Adviser’s website in the A Guide to VCTs section: www.mobeusvcts.co.uk and secondly, in a link to the FCA’s ScamSmart site: www.fca.org.uk/scamsmart We strongly recommend that you seek financial advice before taking any action if you remain in any doubt. You can also contact the Investment Adviser on 0207 382 0999, or email [email protected] to check whether any claims made by a caller are genuine. Shareholders are also encouraged to ensure their personal data is always held securely and that data held by the Registrar of the Company is up to date, to avoid cases of identity fraud. Shareholder enquiries For enquiries concerning the investment portfolio or the Company in general, please contact the Investment Adviser, Gresham House Asset Management Limited. To contact the Chairman or any member of the Board, please contact the Company Secretary, also Gresham House, in the first instance. The Registrar, Link Group, may be contacted via their Shareholder portal, post or telephone for queries relating to your shareholding or dividend payments, dividend mandate forms, change of address etc. Full contact details for each of Gresham House and Link Group are included under Corporate Information on page 86 of this Annual Report. 82 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Information for Shareholders NOTICE IS HEREBY GIVEN that the Annual General Meeting of Mobeus Income & Growth 4 VCT plc (“the Company”) will be held at 11.30am on Tuesday, 17 May 2022, at the oces of Shakespeare Martineau, 6th Floor, 60 Gracechurch Street, London, EC3V 0HR for the purposes of considering and, if thought fit, passing the following resolutions of which resolutions 1 to 7 will be proposed as ordinary resolutions and resolutions 8 and 9 will be proposed as special resolutions. An explanation of the main business to be proposed is included in the Directors’ Report on pages 39 to 41 of this document: 1. To re ceive and adopt the annual report and financial statements of the Company for the year ended 31 December 2021 (“Annual Report”), together with the auditor’s report thereon. 2. To approve the directors’ annual remuneration report as set out in the Annual Report. 3. To re-elect Jonathan Cartwright as a director of the Company. 4. To re-elect Graham Paterson as a director of the Company. 5. To re-elect Christopher Burke as a director of the Company. 6. To re-appoint BDO LLP of 55 Baker Street, London W1U 7EU, London, EC1A 4AB as auditor of the Company until the conclusion of the next general meeting at which accounts are laid before the Company and to authorise the directors to determine the remuneration of the auditor. 7. That, in substitution for any existing authorities, the directors of the Company be and hereby are generally and unconditionally authorised pursuant to section 551 of the Companies Act 2006 (“the Act”) to exercise all the powers of the Company to allot ordinary shares of 1 penny each in the capital of the Company (“Shares”) and to grant rights to subscribe for, or convert, any security into Shares (“Rights”) up to an aggregate nominal value of £304,198, provided that the authority conferred by this resolution shall (unless renewed, varied or revoked by the Company in general meeting) expire on the date falling fifteen months after the passing of this resolution or, if earlier, at the conclusion of the annual general meeting of the Company to be held in 2023, but so that this authority shall allow the Company to make before the expiry of this authority oers or agreements which would or might require Shares to be allotted or Rights to be granted after such expiry and the directors of the Company shall be entitled to allot Shares or grant Rights pursuant to any such oers or agreements as if the authority conferred by this resolution had not expired. 8. That, subject to the passing of resolution 7 set out in this notice and in substitution for any existing authorities, the Directors of the Company be and hereby are empowered in accordance with sections 570 and 573 of the Act to allot or make oers or agreements to allot equity securities (as defined in section 560(1) of the Act) for cash, pursuant to the authority conferred upon them by resolution 7 set out in this notice, or by way of a sale of treasury shares, as if section 561(1) of the Act did not apply to any such sale or allotment, provided that the power conferred by this resolution shall be limited to the allotment of equity securities: (i) with an aggregate nominal value of up to, but not exceeding, £136,889 in connection with oer(s) for subscription; and (ii) with an aggregate nominal value of up to, but not exceeding, 10% of the issued share capital of the Company from time to time pursuant to any dividend investment scheme operated by the Company; and (iii) otherwise than pursuant to sub-paragraphs (i) and (ii) above, with an aggregate nominal value of up to 10% of the issued share capital from time to time, in each case where the proceeds of the allotment may be used, in whole or in part, to purchase the Company’s Shares in the market and provided that this authority shall (unless renewed, varied or revoked by the Company in general meeting) expire on the date falling fifteen months after the passing of this resolution or, if earlier, on the conclusion of the annual general meeting of the Company to be held in 2023, except that the Company may, before the expiry of this authority, make oers or agreements which would or might require equity securities to be allotted after such expiry and the directors of the Company may allot equity securities in pursuance of such oers or agreements as if the power conferred by this resolution had not expired. 9. That, in substitution for any existing authorities, the Company be and hereby is authorised pursuant to and accordance with section 701 of the Act to make one or more market purchases (within the meaning of section 693(4) of the Act) of its own Shares provided that: (i) the aggregate number of Shares which may be purchased shall not exceed 13,688,946 or, if lower, such number of Shares (rounded down to the nearest whole Share) as shall equal 14.99% of the Shares in issue at the date of passing of this resolution; (ii) the minimum price which may be paid for a Share is 1 penny (the nominal value thereof); (iii) the maximum price which may be paid for a Share (excluding expenses) shall be the higher of (a) an amount equal to 5% above the average of the middle market quotations for a Share in the Company taken from the London Stock Exchange Daily Ocial List for the five business days immediately preceding the day on which the Share is contracted to be purchased and (b) the amount stipulated in Article 5(6) of the Market Abuse Regulation; Notice of the Annual General Meeting 83 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Information for Shareholders (iv) the authority conferred by this resolution shall (unless renewed, varied or revoked by the Company in general meeting) expire on the date falling fifteen months after the passing of this resolution or, if earlier, on the conclusion of the annual general meeting of the Company to be held in 2023; and (v) the Company may make a contract or contracts to purchase its own Shares under the authority hereby conferred prior to the expiry of such authority which will or may be executed wholly or partly after the expiry of such authority and may make a purchase of its own Shares in pursuance of any such contract. BY ORDER OF THE BOARD Registered Oce Gresham House Asset Management Limited 5 New Street Square Company Secretary London Dated: 6 April 2022 EC4A 3TW Notes: The following Notes explain your general rights as a Shareholder and your right to attend and vote at this Meeting or to appoint someone else to vote on your behalf. 1. A member is entitled to attend, speak and vote at the Meeting in person or to appoint one or more other persons as their proxy to exercise all or any of his rights on his behalf. Further details of how to appoint a proxy, and the rights of proxies, are given in the Notes below. Where a member intends to join the Meeting by means of the webcast, they shall be permitted to ask questions at the Meeting but shall not be entitled to vote on resolutions at the Meeting (and are, therefore, encouraged to submit their votes by way of proxy). Note 16 below will apply to those who join the meeting (which would be in attendance only) by means of the webcast. 2. To be entitled to attend the Meeting (and for the purpose of the determination by the Company of the number of votes they may cast) and to be able to lodge your proxy votes, Shareholders must be registered in the Register of Members of the Company at close of trading on 13 May 2022. Changes to the Register of Members after the relevant deadline shall be disregarded in determining the rights of any person to attend the Meeting and/or virtual meeting and vote by proxy. 3. In order for a proxy appointment to be valid it must be received by Link Group, Central Square, 29 Wellington Street, Leeds LS1 4DL by 11.30 am on 13 May 2022. 4. A Shareholder may appoint more than one proxy in relation to the Meeting provided that each proxy is appointed to exercise the rights attached to a dierent ordinary share or ordinary shares held by that Shareholder. A proxy need not be a Shareholder of the Company. 5. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s Register of Members in respect of the joint holding (the first named being the most senior). 6. A form of proxy for use in connection with the Meeting is enclosed with the document of which this Notice forms part. If you do not have a form of proxy and would like a copy, please contact the Company’s registrar, Link Group at 10th Floor Central Square, 29 Wellington Street, Leeds LS1 4DL (“Registrar”), or on 0371 664 0391. Completion and return of a form of proxy form will not legally prevent a Shareholder from attending and voting at the Meeting in person, or from joining the Meeting (which would be as an attendee only) by means of the webcast. The Company requests all Shareholders to vote by proxy on the resolutions set out in this Notice as soon as possible. 7. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If no voting indication is given, your proxy will vote or abstain from voting at their discretion. Your proxy will vote (or abstain from voting) as they think fits in relation to any other matter which is put before the Meeting. 8. You can also vote either: by logging on to www.signalshares.com and following the instructions; if you need help with voting online, please contact our Registrar, Link Group, on 0371 664 0391 if calling from the UK, or +44 (0) 371 664 0391 if calling from outside of the UK, or email Link at [email protected]. in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the procedures set out below. We strongly recommend voting electronically at www.signalshares.com as your vote will automatically be counted. Given the current situation, with many people working from home and delays in the postal system, there is a risk that your vote may not be counted if you send a paper proxy. 9. If you return more than one proxy appointment, the appointment received last by the Registrar before the latest time for the receipt of proxies will take precedence. You are advised to read the terms and conditions of use carefully. Electronic communication facilities are open to all Shareholders and those who use them will not be disadvantaged. 10. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the Meeting (and any adjournment of the Meeting) by using the procedures described in the CREST Manual (available from www.euroclear.com/site/ public/EUI). CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. 11. In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a ‘CREST Proxy Instruction’) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s specifications and must contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the issuer’s agent (ID RA10) by 11.30 am on 13 May 2022. For this purpose, the time of receipt will be taken to mean the time (as determined by the timestamp applied to the message by the CREST application host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. 84 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Information for Shareholders 12. CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider(s), to procure that their CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. 13. Any corporation which is a Shareholder can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a Shareholder provided that no more than one corporate representative exercises powers in relation to the same shares. 14. As at 5 April 2022 (being the latest practicable business day prior to the publication of this Notice), the Company’s ordinary issued share capital consists of 91,259,644 ordinary shares, carrying one vote each. Therefore, the total voting rights in the Company as at 5 April 2022 are 91,259,644. 15. Under Section 527 of the Companies Act 2006, Shareholders meeting the threshold requirements set out in that section have the right to require the Company to publish on a website a statement setting out any matter relating to: (i) the audit of the Company’s Financial Statements (including the Auditor’s Report and the conduct of the audit) that are to be laid before the Meeting; or (ii) any circumstances connected with an auditor of the Company ceasing to hold oce since the previous meeting at which annual Financial Statements and reports were laid in accordance with Section 437 of the Companies Act 2006 (in each case) that the Shareholders propose to raise at the relevant meeting. The Company may not require the Shareholders requesting any such website publication to pay its expenses in complying with Sections 527 or 528 of the Companies Act 2006. Where the Company is required to place a statement on a website under Section 527 of the Companies Act 2006, it must forward the statement to the Company’s auditor not later than the time when it makes the statement available on the website. The business which may be dealt with at the Meeting for the relevant financial year includes any statement that the Company has been required under Section 527 of the Companies Act 2006 to publish on a website. 16. Any Shareholder attending the Meeting has the right to ask questions. Any Shareholder may submit questions in relation to the business to be transacted at the Meeting via email to: [email protected] by 13 May 2022. The Company must cause to be answered any such question relating to the business being dealt with at the Meeting but no such answer need be given if: (a) to do so would interfere unduly with the preparation for the Meeting or involve the disclosure of confidential information; (b) the answer has already been given on a website in the form of an answer to a question; or (c) it is undesirable in the interests of the Company or the good order of the Meeting that the question be answered. 17. Copies of the directors’ letters of appointment will be available for inspection at the Company’s registered oce during normal business hours on any weekday (excluding Saturdays, Sundays and public holidays) until the end of the Meeting and will also be available for inspection at the place of the Meeting for at least 15 minutes before and during the Meeting. 18. You may not use any electronic address (within the meaning of Section 333(4) of the Companies Act 2006) provided in either this Notice or any related documents to communicate with the Company for any purposes other than those expressly stated. A copy of this Notice, and other information required by Section 311A of the Companies Act 2006, can be found on the Company’s website at www.mig4vct.co.uk Notice of the Annual General Meeting 85 Annual Report & Financial Statements 2021 Mobeus Income & Growth 4 VCT plc Information for Shareholders Glossary of terms Alternative performance measure (“APM”) A financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the Company’s financial reporting framework. These APMs tend to be industry specific terms which help Shareholders to understand and assess the Company’s progress. A number of terms contained within this Glossary have been identified as APMs. Cumulative dividends paid (APM) The total amount of dividend distributions by the Company over the time period specified. A list of all dividends paid since launch of the Company is shown on the Company’s website www.mig4vct.co.uk. Dividends paid in the year and dividends paid in respect of the year are shown in Note 7. Cumulative total return (APM) Cumulative total return per share comprises the NAV per share (NAV basis) or the mid-market price per share (Share price basis), plus cumulative dividends paid since launch in 1999. Internal Rate of Return (“IRR”) The internal rate of return is the annual discount rate that equates the original investment cost with the value of subsequent cash flows (such as receipts/dividends or further investment) and the latest valuation/exit proceeds or net asset value. Generally speaking, the higher an investment’s IRR, the more successful it is. Net asset value or NAV The value of the Company’s total assets less its total liabilities. It is equal to the total equity Shareholders’ funds. Net asset value per share or NAV per share The net asset value per share is calculated as total equity Shareholders’ funds divided by the number of Ordinary shares in issue at the year-end. NAV Total Return (APM) This measure combines two types of returns received by Shareholders. Firstly, as income in the form of dividends and secondly, as capital movements (net asset value) of the value of the Company. It is a performance measure that adjusts for dividends that have been paid in a period or year. This allows Shareholders to assess the returns they have received both in terms of the performance of the Company but also including dividends they have received from the Company which no longer form part of the Company’s assets. It is calculated as the percentage return achieved after taking the closing NAV per share and adding dividends paid in the year and dividing the total by the opening NAV per share. The Directors feel that this is the most meaningful method for Shareholders to assess the performance of the Company. To aid comparison with the wider Investment Trust market, the Annual Report also contains a Total Return performance measure which assumes dividends are reinvested. This assumes that dividends paid are reinvested at the date of payment at a price equivalent to the latest announced NAV at the ex-div date. Where this is referred to it will be specified in the Notes. Ongoing charges ratio (APM) This figure, calculated using the AIC recommended methodology, shows Shareholders the annual percentage reduction in shareholder returns as a result of recurring operational expenses, assuming markets remain static and the portfolio is not traded. Although the Ongoing Charges figure primarily is based upon historic information, it provides Shareholders with an indication of the likely level of costs that will be incurred in managing the Company in the future. This is calculated by dividing the Investment Adviser’s fees of £1,714,405 and running costs of £460,888 (per Notes 4a and 4d on pages 63 and 64), the latter being reduced by IFA trail commission and one-o professional fees, by the average net assets throughout the year of £87,152,406. Realised gains/(losses) in the year This is the profit or loss that arises following the full or partial disposal of a holding in a portfolio company. It is calculated by deducting the value of the holding as at the previous year-end from the proceeds received in respect of such disposal. Share price Total Return (APM) As NAV Total Return, but the Company’s mid-market share price (source: Panmure Gordon & Co) is used in place of NAV. This measure more reflects the actual return a Shareholder will have earned, were they to sell their shares at the year/period’s end date. It includes the impact of any discounts or premiums at which the share price trades compared to the underlying net asset value of the Company. If the shares trade at a discount, the returns could be less than the NAV Total Return, but if trading at a premium, returns could be higher than the NAV Total Return. 86 Mobeus Income & Growth 4 VCT plc Annual Report & Financial Statements 2021 Information for Shareholders Corporate Information Directors (Non-executive) Jonathan Cartwright (Chairman) Christopher Burke Graham Paterson Investment Adviser, Company Secretary and Administrator Gresham House Asset Management Limited 80 Cheapside London EC2V 6EE Tel: +44(0) 20 7382 0999 [email protected] www.greshamhouse.com Company’s Registered Oce and Head Oce 5 New Street Square London EC4A 3TW Company Registration Number 03707697 LEI No: 213800IFNJ65R8AQW943 Website www.mig4vct.co.uk E-mail [email protected] Independent Auditor BDO LLP 55 Baker Street London W1U 7EU Receiving Agent City Partnership The Mending Rooms Park Valley Mills Meltham Road Huddersfield HD4 7BH Sponsor Howard Kennedy Corporate Services LLP 1 London Bridge Walk London W1A 2AW Solicitors Shakespeare Martineau LLP No 1 Colmore Square Birmingham B4 6AA Corporate Broker Panmure Gordon (UK) Limited 1 New Change London EC4M 9AF Registrar Link Group 10th Floor Central Square 29 Wellington Street Leeds LS1 4DL VCT Status Adviser Philip Hare & Associates LLP Hamilton House 1 Temple Avenue London EC4Y OHA Shareholder Portal: www.signalshares.com Tel: +44 (0) 371 644 0324 Bankers National Westminster Bank plc City of London Oce PO Box 12258 1 Princes Street London EC2R 8PA Mobeus Income & Growth 4 VCT plc
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