MAVEN INCOME & GROWTH VCT 4 PLC

Annual Report • Apr 30, 2013

National Storage Mechanism | Additional information You don't have Javascript enabled. For full functionality this page requires javascript to be enabled. RNS Number : 6607D Maven Income & Growth VCT 4 PLC 30 April 2013 Maven Income and Growth VCT 4 PLC Annual Financial Report for the year ended 31 December 2012 Chairman's Statement On behalf of your Board I am pleased to report on a year of strong progress, with a number of portfolio company holdings being sold at a healthy profit during the reporting period. I am also pleased to welcome more than 2,500 new shareholders who have joined us from Ortus VCT and around 300 who have bought shares in the current offer for subscription. As a consequence of these successful disposals there has been an increase in NAV total return on both the Ordinary and S Share Pool, and an increase in dividends for shareholders. During the year the later vintage S Share Pool continued to mature and moved closer to a similar asset constituency as the Ordinary Pool, providing sufficient income and capital gains to enable the Board to move towards greater equality in the dividends paid to both classes of shareholders prior to the merger. In October 2012 your Board announced that it had entered discussions on a potential merger with the board of Ortus VCT PLC. Following shareholder approval the Ordinary and S share class consolidation and merger, details of which were contained in the shareholder circular and prospectus, both dated 1 March 2013, have now been successfully completed. Details of the transaction are contained in note 19 of the Financial Statements on page 61. The merger enabled your Company to acquire valuable 'old money' which can be invested under more favourable VCT regulations, and is further expected to deliver cost savings and administrative efficiency. As a result of the merger and recent Ordinary Share Offer the fund net assets have grown significantly and now exceed £28 million. In the year under review there has been a wide range of independent industry recognition of the success of your Manager's investment approach and ability to deliver consistent levels of shareholder returns. Maven was announced as the winner in the UK Small Buyout House of the Year category for the ACQ Finance Magazine Global Awards 2012 and was also named as winner of VCT Exit of the Year at the 2012 unquote" British Private Equity Awards as well as being a finalist in the VCT House of the Year category. These awards acknowledge innovation and excellence in the private equity and venture capital sectors. Highlights • Total return on Ordinary shares of 122.75p per share (2011: 118.5p) at 31 December 2012, up 3.6% over the year and 29.2% since launch. • Net asset value (NAV) of Ordinary shares at the year end of 98.2p per share (2011: 98.2p). • Total return on S shares of 123.20p per share (2011: 112.65p) at 31 December 2012, up 9.4% over the year and 29.7% since launch. • NAV of S shares at the year end of 111.6p per share (2011:104.1p). • Six substantial new investments added to the portfolio during the year. • Four significant exits from ATR Holdings, TPL (Midlands), Nessco Group Holdings and Oliver Kay Holdings for a total return of 2.4x, 2.0x, 2.7x and 2.4x cost respectively. • Second interim dividends declared of 2.75p per Ordinary share (2011 final: 2.5p) and 1.75p per S share (2011 final: 1.3p). • A total of 4.5p declared per Ordinary share and 3.5p per S share in respect of the year (2011: 4.0p and 2.8p respectively). The most important measure of performance for a VCT is the total return, which is the long term record of dividend payments out of income and capital gains combined with the current NAV. Dividends The Company paid second interim dividends of 2.75p per Ordinary share and 1.75p per S Ordinary share on 22 March 2013 to shareholders on the register on 8 March 2013. Including the interim dividends paid in September 2012, the tax-free yield for the year is 7.5% on the net cost of investment to Ordinary shareholders and 5.0% to S shareholders taking into account the initial tax relief available at time of investment. Since the Company's launch, and after receipt of the second interim dividend, Ordinary shareholders and S shareholders will have received 27.3p and 13.35p respectively in tax-free dividends. Principal risks and uncertainties The Board has reviewed the principal risks and uncertainties facing the Company, which are set out on page 28 and are the risks involved in investment in small and unquoted companies. In order to reduce the exposure to investment risk the Company has invested in a broadly-based portfolio of mature companies in the United Kingdom. The VCT qualifying status of the Company is reviewed regularly by your Board and monitored on a continuous basis by the Manager in order to ensure that all of the criteria for VCT qualifying status are met. The Board can confirm that all tests were met throughout the year. Investment Strategy The Manager's investment strategy is to build a large and diversified portfolio of income producing, later-stage private companies across a range of sectors and industries. The principal domicile of these companies will generally be in the UK, although many have an export dimension or overseas operations. The Board and the Manager have previously concluded that the potential returns available from AIM and ISDX quoted investments are too uncertain, with very limited liquidity in many stocks and poor dividend yield in comparison with private equity investments. The Manager has therefore continued to selectively realise the quoted portfolio for value over the past 12 months, and redeploy the proceeds into investments in established, income-producing private companies. Shareholder value is created through a combination of generating revenue from loan stock holdings and capital proceeds arising from profitable realisations. To achieve this goal, new transactions are typically structured with 70% to 90% in secured, yielding loan stock, in companies where an equity stake can also be acquired at a reasonable entry price, and where the Manager perceives an opportunity to arbitrage a capital profit when the business achieves greater scale and maturity. The revised Listing Rules require your Board to ensure that this and subsequent reports carry additional information on investment policy, in particular statements concerning asset mix, the spread of risk and maximum exposures. This information is contained in the Directors' Report and in the tabular analyses of the portfolio. Valuation Process Investments held by Maven Income and Growth VCT 4 PLC in unquoted companies are valued in accordance with the International Private Equity and Venture Capital Valuation Guidelines. Investments quoted or traded on a recognised stock exchange, including AIM, are valued at their bid prices. Portfolio Developments During the year your Company participated in six substantial new private company transactions, as well as eight follow-on investments supporting the development of existing portfolio companies. Most of the existing private equity assets are trading acceptably or ahead of plan. As the private company portfolio has matured there has been significant interest from trade and private equity buyers and four profitable exits were achieved during the year generating capital proceeds of £2.3 million. The investment in ATR Holdings was sold to NBGI Private Equity at an overall return of 2.4 times the cost of investment. On 1 June 2012 the holding in TPL (Midlands) was sold to German trade buyer Vossloh Kiepe. On 5 July Nessco Group Holdings was sold to RigNet, a NASDAQ quoted US Telecoms business, generating a 2.7 times return on cost of investment and finally on 12 November 2012 Oliver Kay Holdings was sold to Bidfresh Limited, part of the international trading and distribution group Bidvest. This sale completed for a 2.4 times return on cost. There has also been recent acquisition interest in several portfolio companies and the Manager is currently working on the potential sale of a number of holdings, although there is no certainty that these discussions will result in successful exits. In line with the strategy of reducing the Company's exposure to AIM, a number of further disposals were made during the period and the portfolio is now almost exclusively invested in private companies, with AIM securities representing only 3.6% and 1.2% of the asset base for the Ordinary Pool and S Pool respectively (2011: Ordinary Pool 4.2%, S Pool 1.5%). The proceeds of those disposals are then available for investment in the further growth of the private equity portfolio. Your Company continues to co-invest in each transaction with other Maven client funds, which allows the Manager to invest in a greater range and size of transaction on behalf of VCT clients than would otherwise be the case. Constitution of the Board Following the merger with Ortus VCT on 3 April 2013, we welcomed Mr David Potter to the Board as a director. Mr Potter is the former chairman of Ortus VCT and I am confident that he will bring to bear his considerable experience in the service of shareholders. Co-Investment Scheme of the Manager The co-investment scheme, which allows executive members of the Manager to invest alongside the Company, continued in operation during the year. The scheme operates through a nominee company which invests alongside the Company in each and every transaction made by the Company, including any follow-on investments. The scheme more closely aligns the interests of the executives and the Company's shareholders while providing an incentive to enable the Manager to retain the existing skills and capacity of the investment team in a competitive market. Share Buy-back Policy Shareholders have given the Board authority to buy back shares for cancellation when it is in the interests of the shareholders and the Company as a whole and 26,000 shares were bought back during the year at a cost of £24,700. Details of the parameters within which the Company may carry out share buy-backs are given in the Directors' Report on page 31. VCT Regulation The Board was pleased to note the approval by the European Commission of proposed increases to the size of companies which can receive VCT funding, and of the amount which can be invested in a qualifying business. This was welcome news for investors and reaffirms the attraction of generalist VCTs as a tax-efficient route to investment in high growth smaller companies. The AIC has worked closely with the FSA on Consultation Paper 12-19 (Restrictions on the retail distribution of unregulated collective investment schemes and close substitutes) and its applicability to venture capital trusts. VCTs are listed investment companies, each overseen by an independent board, regulated by the UKLA's Listing Rules and governed by the Companies Acts. The Board has supported the AIC in calling on the FSA to exclude VCTs from the proposals in the same way that investment trusts have been and the FSA (now replaced by the FCA) has recently announced that it will reconsider its recommendations. The Manager monitors all potential regulatory changes that are under consideration and keeps the Board informed of any implications for the Company. VCT Offers and fund raising A top-up Offer allowing subscription for new shares opened in December 2011 in parallel with similar Offers by Maven Income and Growth VCT, Maven Income and Growth VCT 2 and Maven Income and Growth VCT 3, resulting in the issue of 770,817 new Ordinary shares and 429,437 S Ordinary shares, and raising an additional £1,248,417 of share capital. The Offer was fully subscribed by 29 February 2012 and consequently closed early. In view of the timing of the share class consolidation and merger process the decision was taken not to make an offer in parallel with the other Maven VCTs in January 2013. However, the Maven VCT Offers closed early due to over-subscription and the Board decided to take the opportunity to include an offer for subscription in the merger documentation. As a result 3,643,812 new Ordinary shares were allotted on 5 April, raising an additional £3,560,000 of share capital. The Offer remains open until 30 April 2013 and the Board may, at its discretion, extend the period of the Offer to the end of June if appropriate. The Future The past year has been a significant period of development, and following successful conclusion of the merger and Offer your Company is well positioned with improved liquidity to further build its portfolio. Against a backdrop of scarcity of capital, the Manager has demonstrated a sustained ability to source and invest in a varied range of attractive private companies which meet VCT criteria and manage these holdings through to profitable exit. The Board believes that continuation of the selective, later-stage investment strategy pursued by the Manager, together with the benefits and efficiencies expected following the merger, will deliver attractive returns to shareholders in the years ahead. Investment Manager's Review Overview Your Company's portfolio has benefitted from significant diversification in recent years, with a specific focus on building an asset base of established and high-yielding UK private companies. In the year under review the success of this approach has led to improvments in NAV Total Return and shareholder dividends being achieved. As the portfolio has expanded and matured, our core strategy of investing selectively at conservative entry multiples in profitable, later-stage businesses only, has been vindicated as a number of these holdings have attracted trade or private equity interest during the year, leading to a value event where your Company has realised its investment at a profit. Three portfolio companies have exited to trade buyers from across the globe, including from the US, South Africa and Germany. One further holding was sold under a secondary transaction to a private equity buyer. The current scarcity of bank finance means that Maven's investment team, operating from six key regional centres throughout the UK, continue to be introduced to a steady flow of good quality private companies as these businesses look for alternative sources of funding. During the period several significant new assets were added to the portfolio with Maven completing the management buy-outs of Vodat and CatTech respectively in March 2012. Both businesses are performing in line with expectations and are well placed to become very valuable investments for your Company. In December 2012 mezzanine finance was provided to Grangeford, and during the year three new companies were established to invest in businesses operating in the food services and oil and gas sectors. We have also supported a number of existing portfolio companies by financing growth or helping to fund complementary and value accretive acquisitions. We believe there are continuing positive medium term prospects for potential deal flow in our target private equity market, as well resourced generalist VCT managers continue to be introduced to high quality later-stage private companies seeking capital to expand. Maven has been introduced to almost 500 new private company transactions around the UK in the past 12 months, mainly by a network of long-established contacts across the corporate finance and business community. The UK economy continues to be challenging, but we remain committed to our strategy of investing in a diverse income-producing portfolio of later-stage and lower risk private companies in the firm belief this will deliver the optimum shareholder returns. Investment Activity During the year the Maven team completed six substantial new private equity investments on behalf of your Company, alongside eight follow-on investments in existing portfolio companies. At the year end the portfolio stood at 49 unlisted and AIM investments at a total cost of £11.5 million. Maven Income and Growth VCT 4 has co-invested in some or all of the above transactions with Maven Income and Growth VCT, Maven Income and Growth VCT 2, Maven Income and Growth VCT 3, Maven Income and Growth VCT 5, Talisman First Venture Capital Trust and Ortus VCT. The Company is expected to continue to co-invest with all other Maven client VCTs, which offers the advantage that, in aggregate, they are able to underwrite a wider range and larger size of transaction than would be the case on a stand-alone basis. Portfolio Developments Six substantial private company investments were added to the portfolio during the period under review: • CatTech International, a leading provider of industrial services to oil refineries and petrochemical plants across several major international markets. The business operates in a sector with significant barriers to entry, and is well positioned for future growth given its excellent reputation and established market presence; • Vodat Communications Group, a provider of payment and communications solutions to high street businesses, which enable retailers to reduce costs, boost store productivity and increase sales in an increasingly competitive trading environment. The company has an established and diverse customer base, has consistently improved profitability in recent years and enjoys high levels of recurring revenue from a number of long-term service and support contracts; • Trojan Capital, a new company established to make acquisitions in the energy services sector, recognising Maven's expertise in this market. One target oil and gas company was identified during the year but the transaction aborted during the final stages of the legal contract negotiations. Trojan continues to actively seek acquisition opportunities in the sector; • Airth Capital, a new company set up to invest in a food services business, a sector where Maven is active and sees a large number of opportunities; • Burray Capital, a new company established to invest in the oil and gas sector. A target manufacturing business has been identified and discussions are at an early stage; and • Grangeford, a company which owns and manages a large portfolio of ground rents throughout the UK, which are asset backed yielding investments that provide long term, low risk returns. This transaction is projected to generate capital gain over a 42 month term alongside a 9% yield paid throughout the period of investment. Follow-on investments in existing portfolio companies during the period included: • John McGavigan, a manufacturer and supplier of decorative assemblies and interior parts to global automotive manufacturers, with a significant share of the Western European market. The strategy continues to be to invest on a phased basis to establish a low cost manufacturing operation in China, alongside the more mature trading operations based in the UK; • Glacier Energy Services Group, an oil and gas service group with two specialist trading subsidiaries, Roberts Pipeline Machining and Wellclad. Roberts designs and manufactures on-site portable cutting machines for oil and gas clients. Wellclad provides services to the European offshore and sub-sea equipment market. Glacier is focused on growth within its core UK market and the follow on investment funded the acquisition of a complementary machining business in the North East of England; • Venmar, the holding company for energy services business XPD8 Solutions, providers of asset maintenance solutions to a blue chip client base of oil and gas operators; • Tosca Penta Exodus, trading as Six Degrees, which was established by Penta Capital to implement a buy-and-build strategy in the business telecommunications service sector based on the converging of mobile, fixed-line, broadband, internet and IT technology businesses. Penta is an established private equity firm with which Maven previously co-invested in the successful 2010 management buy-out of esure. The follow-on investment was provided as mezzanine loan to fund two additional acquisitions; and • Camwatch, a provider of CCTV installation and remote security monitoring services to a variety of businesses with a particular focus on the utilities construction and high net worth residential markets. Since 31 December 2012 four follow-on investments have been completed in existing portfolio companies and two new private company assets were added to the portfolio: • Kelvinlea, a new company established to acquire a small portfolio of residential properties at a discount to market and carry out a refurbishment and sales programme over an 18-24 month period. The transaction provides an 8.5% paid yield through the life of the investment, and is also forecast to generate a significant capital gain when the project is completed and all assets are sold. • Ensco 969, a new company formed to acquire DPP, an established business that provides planned and reactive mechanical and electrical maintenance services to operators of pubs, restaurants and retail chains, predominantly in the South of England. DPP has strong levels of contractual and recurring revenues and an excellent track record of attracting new clients and subsequently increasing both the breadth of service and geography within which it is delivered. In a number of cases the Manager is currently engaged with investee companies and prospective acquirers at various stages of a potential exit process. This realisation activity reflects the increasing maturity of a number of holdings, but it should be noted that there can be no certainty that these discussions will ultimately lead to profitable sales. There were four notable private company exits during the period: In March 2012 Maven completed the sale of ATR Group for £19.25m via a secondary buy-out funded by the private equity manager NBGI, realising a total return of 2.4 times the initial cost. ATR provides rental services for specialist plant, equipment and consumables, along with a comprehensive range of support services, to offshore and onshore energy services maintenance contractors operating in highly regulated environments. In June 2012 the holding in Transys Projects Limited (TPL) was sold to German engineering group, Vossloh Kiepe, with a 2.0 times return on investment cost for your Company and then in July the realisation of Nessco to RigNet Inc, a NASDAQ quoted US telecoms business, resulted in a 2.7 times return on the cost of investment. In early November 2012 the disposal of Oliver Kay Holdings to Bidfresh Limited, part of the international trading and distribution group Bidvest, completed for a 2.4 times return on investment cost. Realisations during the reporting period were as follows: Ordinary Shares S Ordinary Shares Date first invested Complete/ partial exit Cost of shares disposed of Sales proceeds Realised gain/(loss) Cost of shares disposed of Sales proceeds Realised gain/(loss) £'000 £'000 £'000 £'000 £'000 £'000 Unlisted ATR Holdings Limited 2007 Complete 62 130 68 35 73 38 Attraction World Holdings Limited 2010 Partial 32 32 - 24 24 - Beckford Capital Limited 2010 Complete 160 160 - 160 160 - Blackford Capital Limited 2010 Complete 75 75 - 200 200 - Corinthian Foods Limited 2010 Complete 250 250 - - - - Cyclotech Limited 2007 Complete - 34 34 - 13 13 Dalglen (1150) Limited (trading as Walker Technical Resources) 2009 Complete - 2 2 1 1 - Moriond Limited 2011 Partial 94 94 - 70 70 - Nessco Group Holdings Limited 2008 Complete 187 425 238 298 680 382 Oliver Kay Holdings Limited 2007 Complete 205 347 142 - - - Space Student Living Limited 2011 Partial 34 34 - 28 28 - Staffa Capital Limited 2010 Complete - - - 200 200 - Tosca Penta Investments Limited Partnership 2010 Partial 14 14 - 14 14 - TPL (Midlands) Limited (formerly Transys Holdings Limited) 2007 Complete 259 413 154 155 248 93 Total unlisted disposals 1,372 2,010 638 1,185 1,711 526 AIM Brookwell Limited 2011 Partial 3 2 (1) - - - DM PLC 2007 Complete 83 11 (72) 42 6 (36) Hambledon Mining PLC 2006 Complete 83 17 (66) - - - Kennedy Ventures PLC 2006 Complete - - - 47 - (47) Spectrum Interactive PLC 2005 Complete 98 82 (16) - - - Total AIM disposals 267 112 (155) 89 6 (83) Listed fixed income Treasury 4.5% 7 March 2013 2012 Complete 491 490 (1) - - - Treasury 5.25% 7 June 2012 2011 Complete 586 586 - 244 244 - Treasury Bill 24 December 2012 2012 Complete 1,247 1,249 2 1,099 1,100 1 Total listed fixed income disposals 2,324 2,325 1 1,343 1,344 1 Total disposals 3,963 4,447 484 2,617 3,061 444 One unlisted investment and one AIM company were struck off the Register during the year resulting in realised losses of £264,000 (cost £264,000) for the Ordinary Share Pool. This had no effect on the NAV as a full provision had been made in earlier years. Subsequent to the year end, Maven led the successful partial exit from Homelux Nenplas Limited via the sale of the Homelux Division to US firm QEP Company Inc. The disposal of Homelux was completed alongside a secondary buyout of Nenplas by Maven and the existing management team. The remaining business, Nenplas Holdings Limited, will focus on continuing to deliver innovative extruded plastic products and solutions and is expected to grow significantly over the next few years through strong organic opportunities and by making new acquisitions. In March 2013 esure undertook a successful IPO, and a full realisation at a modest uplift from the carrying value is anticipated although an element of this will be subject to the normal price fluctuations associated with fully listed holdings. In respect of AIM holdings the Manager has continued its policy of disposing of quoted holdings for best possible value in cases where the investments were underperforming. These disposals incurred realised losses of £155,000 for the Ordinary shares and £83,000 for the S Ordinary shares (cost £267,000 and £89,000 respectively) during the period. This had no effect on the NAV as a full provision had been made in earlier periods. Outlook The year covered by this report was a very satisfactory year for exits, all of which were concluded after many months of intensive negotiations. The challenge now is to replace these assets and expand the portfolio to continue the upward trend in shareholder returns consistently achieved in recent years. Competition among providers of alternative capital for attractively priced investment transactions has intensified. As one of the best resourced private equity teams in the UK, Maven are well placed to invest selectively on prudent entry multiples in later-stage private companies which are capable of paying regular income and offer significant potential for capital growth. We believe the continuation of this strategy is the optimum approach to create shareholder value and to support a progressive dividend programme. Maven Capital Partners UK LLP Manager INCOME STATEMENT For the year ended 31 December 2012 Ordinary Shares S Ordinary Shares TOTAL Revenue Capital Total Revenue Capital Total Revenue Capital Total Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments 8 - 410 410 - 461 461 - 871 871 Income from investments 2 460 - 460 318 - 318 778 - 778 Investment management fees 3 (61) (241) (302) (21) (87) (108) (82) (328) (410) Other expenses 4 (160) - (160) (99) - (99) (259) - (259) Net Return on ordinary activities before taxation 239 169 408 198 374 572 437 543 980 Tax on ordinary activities 5 (50) 50 - (21) 17 (4) (71) 67 (4) Return attributable to Equity Shareholders 189 219 408 177 391 568 366 610 976 Earnings per share (pence) 2.1 2.4 4.5 3.4 7.5 10.9 5.5 9.9 15.4 A Statement of Total Recognised Gains and Losses has not been prepared, as all gains and losses are recognised in the Income Statement. All items in the above statement are derived from continuing operations. The Company has only one class of business and derives its income from investments made in shares, securities and bank deposits. The total column of this statement is the Profit and Loss Account of the Company. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS For the year ended 31 December 2012 Ordinary Shares S Ordinary Shares TOTAL £'000 £'000 £'000 Opening Shareholders' funds 8,231 5,058 13,289 Net return for year 408 568 976 Net proceeds of share issue 740 436 1,176 Repurchase and cancellation of shares - (25) (25) Dividends paid - revenue (124) (108) (232) Dividends paid - capital (265) (52) (317) Closing Shareholders' funds 8,990 5,877 14,867 INCOME STATEMENT For the year ended 31 December 2011 Ordinary Shares S Ordinary Shares TOTAL Revenue Capital Total Revenue Capital Total Revenue Capital Total Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments 8 - 546 546 - 350 350 - 896 896 Income from investments 2 393 - 393 240 - 240 633 - 633 Other income 2 1 - 1 - - - 1 - 1 Investment management fees 3 (53) (212) (265) (15) (62) (77) (68) (274) (342) Other expenses 4 (176) - (176) (102) - (102) (278) - (278) Net Return on ordinary activities before taxation 165 334 499 123 288 411 288 622 910 Tax on ordinary activities 5 (32) 32 - (12) 12 - (44) 44 - Return attributable to Equity Shareholders 133 366 499 111 300 411 244 666 910 Earnings per share (pence) 1.5 4.3 5.8 2.3 6.1 8.4 3.8 10.4 14.2 A Statement of Total Recognised Gains and Losses has not been prepared, as all gains and losses are recognised in the Income Statement. All items in the above statement are derived from continuing operations. The Company has only one class of business and derives its income from investments made in shares, securities and bank deposits. The total column of this statement is the Profit and Loss of the Company. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS For the year ended 31 December 2011 Ordinary Shares S Ordinary Shares TOTAL £'000 £'000 £'000 Opening Shareholders' funds 7,964 4,801 12,765 Net return for year 499 411 910 Net proceeds of share issue 377 - 377 Repurchase and cancellation of shares (261) (55) (316) Dividends paid - revenue (43) (25) (68) Dividends paid - capital (305) (74) (379) Closing Shareholders' funds 8,231 5,058 13,289 BALANCE SHEET As at 31 December 2012 31 December 2012 31 December 2011 Ordinary S Ordinary Ordinary S Ordinary Shares Shares Total Shares Shares Total Notes £'000 £'000 £'000 £'000 £'000 £'000 Fixed assets Investments at fair value through profit or loss 8 8,027 5,223 13,250 7,697 4,603 12,300 Current assets Debtors 10 234 131 365 233 125 358 Cash and overnight deposits 785 547 1,332 399 356 755 1,019 678 1,697 632 481 1,113 Creditors: Amounts falling due within one year 11 (56) (24) (80) (98) (26) (124) Net current assets 963 654 1,617 534 455 989 Total net assets 8,990 5,877 14,867 8,231 5,058 13,289 Capital and reserves Called up share capital 12 916 526 1,442 839 486 1,325 Share premium account 13 663 393 1,056 - - - Capital reserve - realised 13 375 322 697 611 - 611 Capital reserve - unrealised 13 (511) 311 (200) (701) 294 (407) Distributable reserve 13 7,168 4,124 11,292 7,168 4,149 11,317 Capital redemption reserve 13 37 11 48 37 8 45 Revenue reserve 13 342 190 532 277 121 398 Net assets attributable to Ordinary Shareholders 8,990 5,877 14,867 8,231 5,058 13,289 Net asset value per ordinary share (pence) 14 98.2 111.6 98.2 104.1 The Financial Statements of Maven Income and Growth VCT 4 PLC, registered number SC272568, were approved by the Board of Directors and were signed on its behalf by: Ian D Cormack, Director The accompanying Notes are an integral part of the Financial Statements. CASH FLOW STATEMENT For the year ended 31 December 2012 Year ended 31 December 2012 Year ended 31 December 2011 Ordinary S Ordinary Ordinary S Ordinary Shares Shares Total Shares Shares Total Notes £'000 £'000 £'000 £'000 £'000 £'000 Operating activities Investment income received 472 316 788 328 193 521 Deposit interest received - - - 1 - 1 Investment management fees paid (345) (114) (459) (200) (71) (271) Secretarial fees paid (56) (35) (91) (66) (41) (107) Directors expenses paid (41) (25) (66) (41) (25) (66) Other cash payments (62) (38) (100) (85) (48) (133) Net cash (outflow)/inflow from operating activities 15 (32) 104 72 (63) 8 (55) Taxation Corporation tax - - - - - - Financial investment Purchase of investments (4,380) (3,225) (7,605) (2,284) (1,250) (3,534) Sale of investments 4,447 3,061 7,508 2,088 999 3,087 Net cash inflow/(outflow) from financial investment 67 (164) (97) (196) (251) (447) Equity dividends paid (389) (160) (549) (348) (99) (447) Net cash outflow before financing (354) (220) (574) (607) (342) (949) Financing Issue of Ordinary Shares 740 436 1,176 377 - 377 Repurchase of Ordinary Shares - (25) (25) (261) (55) (316) Net cash inflow/(outflow) from financing 740 411 1,151 116 (55) 61 Increase/(decrease) in cash 16 386 191 577 (491) (397) (888) MAVEN INCOME AND GROWTH VCT 4 PLC Notes to the Financial Statements For the year ending 31 December 2012 1 Accounting Policies - UK Generally Accepted Accounting Practice (a) Basis of preparation The Financial Statements have been prepared under the historical cost convention modified to include the revaluation of investments and in accordance with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' and Venture Capital Trusts (the SORP) issued in January 2009. The disclosures on Going Concern on page 29 of the Directors' Report form part of these financial statements. (b) Income Dividends receivable on equity shares and unit trusts are treated as revenue for the period on an ex-dividend basis. Where no ex-dividend date is available dividends receivable on or before the year end are treated as revenue for the period. Provision is made for any dividends not expected to be received. The fixed returns on debt securities and non-equity shares are recognised on a time apportionment basis so as to reflect the effective interest rate on the debt securities and shares. Provision is made for any income not expected to be received. Interest receivable from cash and short term deposits and interest payable are accrued to the end of the year. (c) Expenses All expenses are accounted for on an accruals basis and charged to the income statement. Expenses are charged through the revenue account except as follows: - expenses which are incidental to the acquisition and disposal of an investment are charged to capital. - expenses are charged to realised capital reserves where a connection with the maintenance or enhancement of the value of the investments can be demonstrated. In this respect the investment management fee has been allocated 20% to revenue and 80% to realised capital reserves to reflect the Company's investment policy and prospective income and capital growth. - share issue costs are charged to the share premium account: and - expenses are allocated between the original pool or the S share pool depending on the nature of the expense. (d) Taxation Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or right to pay less tax in the future have occurred at the balance sheet date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the Financial Statements which are capable of reversal in one or more subsequent periods. Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date. The tax effect of different items of income/gain and expenditure/loss is allocated between capital reserves and revenue account on the same basis as the particular item to which it relates using the Company's effective rate of tax for the period. UK Corporation tax is provided at amounts expected to be paid/recovered using the tax rates and laws that have been enacted or substantively enacted at the balance sheet date. (e) Investments In valuing unlisted investments the Directors follow the criteria set out below. These procedures comply with the revised International Private Equity and Venture Capital Valuation Guidelines for the valuation of private equity and venture capital investments. Investments are recognised at their trade date and are designated by the Directors as fair value through profit or loss. At subsequent reporting dates, investments are valued at fair value, which represent the Directors' view of the amount for which an asset could be exchanged between knowledgeable willing parties in an arm's length transaction. This does not assume that the underlying business is saleable at the reporting date or that its current shareholders have an intention to sell their holding in the near future. A financial asset or liability is generally derecognised when the contract that gives rise to it is settled, sold, cancelled or expires. 1. For Investments completed within the 12 months prior to the reporting date and those at an early stage in their development, fair value is determined using the Price of Recent Investment Method, except that adjustments are made when there has been a material change in the trading circumstances of the company or a substantial movement in the relevant sector of the stock market. 2. Whenever practical, recent investments will be valued by reference to a material arm's length transaction or a quoted price. 3. Mature companies are valued by applying a multiple to their fully taxed prospective earnings to determine the enterprise value of the company. 3.1 To obtain a valuation of the total ordinary share capital held by management and the institutional investors, the value of third party debt, institutional loan stock, debentures and preference share capital is deducted from the enterprise value. The effect of any performance related mechanisms is taken into account when determining the value of the ordinary share capital. 3.2 Preference shares, debentures and loan stock are valued using the Price of Recent Investment Method. When a redemption premium has accrued, this will only be valued if there is a reasonable prospect of it being paid. Preference shares which carry a right to convert into ordinary share capital are valued at the higher of the Price of Recent Investment Method basis and the price/earnings basis, both described above. 4. Where there is evidence of impairment, a provision may be taken against the previous valuation of the investment. 5. In the absence of evidence of a deterioration, or strong defensible evidence of an increase in value, the fair value is determined to be that reported at the previous balance sheet date. 6. All unlisted investments are valued individually by the Portfolio Management Team of Maven Capital Partners UK LLP. The resultant valuations are subject to detailed scrutiny and approval by the Directors of the Company. 7. In accordance with normal market practice, investments listed on the Alternative Investment Market or a recognised stock exchange are valued at their bid market price. (f) Fair Value Measurement Fair value is defined as the price that the Company would receive upon selling an investment in a timely transaction to an independent buyer in the principal or the most advantageous market of the investment. A three-tier hierarchy has been established to maximise the use of observable market data and minimise the use of unobservable inputs and to establish classification of fair value meansurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including such a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on best information available in the circumstances. The three-tier hierarchy of inputs is summarised in the three broad levels listed below. - Level 1 - quoted prices in active markets for identical investments. - Level 2 - other significant observable inputs (included quoted prices for similar investments, interest rates, credit risk etc). - Level 3 - significant unobservable inputs (including the Company's own assumptions in determining the fair value of investments). (g) Gains and losses on investments When the company sells or revalues its investments during the year, any gains or losses arising are credited/ charged to the Income Statement. Year ended Year ended 31 December 2012 31 December 2011 Ordinary S Ordinary Ordinary S Ordinary Shares Shares Total Shares Shares Total £'000 £'000 £'000 £'000 £'000 £'000 2 Income Income from investments: UK franked investment income 9 2 11 6 1 7 UK unfranked investment income 451 316 767 387 239 626 460 318 778 393 240 633 Other Income: Deposit interest - - - 1 - 1 Total income 460 318 778 394 240 634 Total income comprises: Dividends 9 2 11 6 1 7 Interest 451 316 767 388 239 627 460 318 778 394 240 634 Year ended 31 December 2012 Ordinary Shares S Ordinary Shares TOTAL Revenue Capital Total Revenue Capital Total Revenue Capital Total 3 Investment management fees £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Investment management fees 35 138 173 21 87 108 56 225 281 Performance fees 26 103 129 - - - 26 103 129 61 241 302 21 87 108 82 328 410 Year ended 31 December 2011 Ordinary Shares S Ordinary Shares TOTAL Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Investment management fees 26 103 129 15 62 77 41 165 206 Performance fees 27 109 136 - - - 27 109 136 53 212 265 15 62 77 68 274 342 Details of the fee basis are contained in the Director's Report on page 30. Year ended 31 December 2012 Ordinary Shares S Ordinary Shares TOTAL Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 4 Other expenses Secretarial fees 56 - 56 35 - 35 91 - 91 Directors' remuneration 41 - 41 25 - 25 66 - 66 Fees to Auditor - audit services 10 - 10 6 - 6 16 - 16 Fees to Auditor - tax services 4 - 4 2 - 2 6 - 6 Miscellaneous expenses 49 - 49 31 - 31 80 - 80 160 - 160 99 - 99 259 - 259 Year ended 31 December 2011 Ordinary Shares S Ordinary Shares TOTAL Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Secretarial fees 54 - 54 33 - 33 87 - 87 Directors' remuneration 41 - 41 25 - 25 66 - 66 Fees to Auditor - audit services 10 - 10 6 - 6 16 - 16 Fees to Auditor - tax services 3 - 3 1 - 1 4 - 4 Miscellaneous expenses 68 - 68 37 - 37 105 - 105 176 - 176 102 - 102 278 - 278 Year ending 31 December 2012 Ordinary Ordinary Ordinary S Ordinary S Ordinary S Ordinary Total Shares Shares Shares Shares Shares Shares Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 5 Tax on ordinary activities Corporation tax (50) 50 - (21) 17 (4) (71) 67 (4) Year ending 31 December 2011 Ordinary Ordinary Ordinary S Ordinary S Ordinary S Ordinary Total Shares Shares Shares Shares Shares Shares Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Corporation tax (32) 32 - (12) 12 - (44) 44 - The tax assessed for the period is lower than the standard rate of corporation tax of 24% (2011: 26%). The differences are explained below: Year ending 31 December 2012 Ordinary Ordinary Ordinary S Ordinary S Ordinary S Ordinary Total Shares Shares Shares Shares Shares Shares Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Return on ordinary activities before tax 239 169 408 198 374 572 437 543 980 Revenue return on ordinary activities 57 41 98 47 90 137 104 131 235 multiplied by standard rate of corporation tax Non taxable UK dividend income (2) - (2) - - - (2) - (2) Gains on investments - (98) (98) - (111) (111) - (209) (209) Utilisation of taxable losses - - - (22) - (22) (22) - (22) Smaller Companies relief (5) 7 2 (4) 4 - (9) 11 2 50 (50) - 21 (17) 4 71 (67) 4 Losses with a tax value of £Nil (2011: £29,742) are available to carry forward against future trading profits. These have not been recognised as a deferred tax asset as recoverability is not sufficiently certain. Year ending 31 December 2011 Ordinary Ordinary Ordinary S Ordinary S Ordinary S Ordinary Total Shares Shares Shares Shares Shares Shares Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Return on ordinary activities before tax 165 334 499 123 288 411 288 622 910 Revenue return on ordinary activities 43 87 130 32 75 107 75 162 237 multiplied by standard rate of corporation tax Non taxable UK dividend income (2) - (2) - - - (2) - (2) Gains on investments - (142) (142) - (91) (91) - (233) (233) Utilisation of taxable losses - - - (16) - (16) (16) - (16) Smaller Companies relief (9) 23 14 (4) 4 - (13) 27 14 32 (32) - 12 (12) - 44 (44) - 6 Dividends Year ended Year ended 31 December 2012 31 December 2011 Ordinary S Ordinary Ordinary S Ordinary Shares Shares Total Shares Shares Total £'000 £'000 £'000 £'000 £'000 £'000 Revenue dividends Final revenue dividend for the year ended 31 December 2011 of 0.6p (2010: Nil) paid on 30 May 2012 55 - 55 - - - Final revenue dividend for the year ended 31 December 2011 of 1.3p (2010: Nil) paid on 30 May 2012 - 69 69 - - - Interim revenue dividend for the year ended 31 December 2012 of 0.75p (2011: 0.5p) paid on 28 September 2012 69 39 108 43 25 68 124 108 232 43 25 68 Capital dividends Final capital dividend for the year ended 31 December 2011 of 1.9p (2010: 2.5p) paid on 30 May 2012 174 - 174 219 - 219 Final capital dividend for the year ended 31 December 2011 of Nil (2010: 0.5p) - - - - 25 25 Interim capital dividend for the year ended 31 December 2012 of 1.0p (2011: 1.0p) paid on 28 September 2012 91 52 143 86 49 135 265 52 317 305 74 379 Revenue dividends We set out below the total dividends proposed 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. Revenue available for distribution by way of dividends for the year 189 177 366 133 111 244 2nd Interim revenue dividend proposed for the year ended 31 December 69 - 69 - - - 2012 of 0.75p (2011: Nil) payable on 22 March 2013 Final revenue dividend proposed for the year ended 31 December 2012 - - - 51 - 51 of Nil (2011: 0.6p) 2nd Interim revenue dividend proposed for the year ended 31 December - 92 92 - - - 2012 of 1.75p (2011: Nil) payable on 22 March 2013 Final revenue dividend proposed for the year ended 31 December 2012 - - - - 64 64 of Nil (2011: 1.3p) 69 92 161 51 64 115 Capital dividends 2nd interim capital dividend proposed for the year ended 31 December 183 - 183 - - - 2012 of 2.0p (2011: Nil) payable on 22 March 2013 Final capital dividend proposed for the year ended 31 December 2012 - - - 162 - 162 of Nil (2011: 1.9p) 2nd interim capital dividend proposed for the year ended 31 December - - - - - - 2012 of Nil (2011: Nil) Final capital dividend proposed for the year ended 31 December 2012 - - - - - - of Nil (2011: Nil) 183 - 183 162 - 162 Year ended Year ended 31 December 2012 31 December 2011 7 Return per ordinary share The returns per share have been based on the following Ordinary S Ordinary Ordinary S Ordinary figures: Shares Shares Total Shares Shares Total Weighted average number of ordinary shares 8,999,464 5,184,732 14,184,196 8,541,693 4,917,310 13,459,003 Revenue return £189,000 £177,000 £366,000 £133,000 £111,000 £244,000 Capital return £219,000 £391,000 £610,000 £366,000 £300,000 £666,000 Total Return £408,000 £568,000 £976,000 £499,000 £411,000 £910,000 8 Investments Year ended 31 December 2012 Ordinary Shares S Ordinary Shares Total Listed AIM Unlisted/AIM Listed AIM Unlisted/AIM Listed AIM Unlisted/ AIM (quoted (quoted (unobservable (quoted (quoted (unobservable (quoted (quoted (unobservable prices) prices) inputs) Total prices) prices) inputs) Total prices) prices) inputs) Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Movements during the year: Valuation at 1 January 2012 597 346 6,754 7,697 248 75 4,280 4,603 845 421 11,034 12,300 Unrealised loss/(gain) 1 962 (262) 701 1 112 (407) (294) 2 1,074 (669) 407 Cost at 1 January 2012 598 1,308 6,492 8,398 249 187 3,873 4,309 847 1,495 10,365 12,707 Purchases 2,738 - 1,642 4,380 2,098 - 1,127 3,225 4,836 - 2,769 7,605 Sales proceeds (2,325) (112) (2,010) (4,447) (1,344) (6) (1,711) (3,061) (3,669) (118) (3,721) (7,508) Realised gains 1 (242) 461 220 1 (83) 526 444 2 (325) 987 664 Amortisation of book cost (13) - - (13) (5) - - (5) (18) - - (18) Cost at 31 December 2012 999 954 6,585 8,538 999 98 3,815 4,912 1,998 1,052 10,400 13,450 Unrealised (loss)/gain - (633) 122 (511) - (26) 337 311 - (659) 459 (200) Valuation at 31 December 2012 999 321 6,707 8,027 999 72 4,152 5,223 1,998 393 10,859 13,250 Note 1(f) defines the three tier hierarchy of investments, and the significance of the information used to determine their fair value, that is required by Financial Reporting Standard 29 "Financial Instruments: Disclosures". Year ended 31 December 2011 Ordinary Shares S Ordinary Shares Total Listed AIM Unlisted/AIM Listed AIM Unlisted/AIM Listed AIM Unlisted/AIM (quoted (quoted (unobservable (quoted (quoted (unobservable (quoted (quoted (unobservable prices) prices) inputs) Total prices) prices) inputs) Total prices) prices) inputs) Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Valuation at 1 January 2011 - 710 6,246 6,956 - 162 3,840 4,002 - 872 10,086 10,958 Unrealised loss/(gain) - 1,087 149 1,236 - 274 (236) 38 - 1,361 (87) 1,274 Cost at 1 January 2011 - 1,797 6,395 8,192 - 436 3,604 4,040 - 2,233 9,999 12,232 Purchases 600 71 1,613 2,284 250 29 971 1,250 850 100 2,584 3,534 Sales proceeds - (387) (1,700) (2,087) - (158) (840) (998) - (545) (2,540) (3,085) Realised gains - (173) 184 11 - (120) 138 18 - (293) 322 29 Amortisation of book cost (2) - - (2) (1) - - (1) (3) - - (3) Cost at 31 December 2011 598 1,308 6,492 8,398 249 187 3,873 4,309 847 1,495 10,365 12,707 Unrealised (loss)/gain (1) (962) 262 (701) (1) (112) 407 294 (2) (1,074) 669 (407) Valuation at 31 December 2011 597 346 6,754 7,697 248 75 4,280 4,603 845 421 11,034 12,300 31 December 2012 31 December 2011 Ordinary S Ordinary Ordinary S Ordinary Shares Shares Total Shares Shares Total The portfolio valuation £'000 £'000 £'000 £'000 £'000 £'000 Held at market valuation: Listed fixed income 999 999 1,998 597 248 845 AIM quoted equities 321 72 393 346 75 421 AIM unobservable equities - - - - - - 1,320 1,071 2,391 943 323 1,266 Unlisted at Directors' valuation: Unquoted unobservable equities 2,628 1,605 4,233 2,403 1,615 4,018 Unquoted unobservable fixed income 4,079 2,547 6,626 4,351 2,665 7,016 6,707 4,152 10,859 6,754 4,280 11,034 Total 8,027 5,223 13,250 7,697 4,603 12,300 Realised gains on historical basis 220 444 664 11 18 29 Net movement in unrealised appreciation 190 17 207 535 332 867 Gains on investments 410 461 871 546 350 896 9 Participating and significant interests The principal activity of the Company is to select and hold a portfolio of investments in unlisted and AIM securities. Although the Company will, in some cases, be represented on the board of the investee company, it will not take a controlling interest or become involved in its management. The size and structure of the companies with unlisted and AIM securities may result in certain holdings in the portfolio representing a participating interest without there being any partnership, joint venture or management consortium agreement. At 31 December 2012, the Company held no shares amounting to 20% or more of the equity capital of any of the unlisted or AIM undertakings. The Company does hold shares or units amounting to more than 3% or more of the nominal value of the allotted shares or units of any class in certain investee companies. Details of equity percentages held are shown in the Investment Portfolio Summary 31 December 2012 31 December 2011 Ordinary S Ordinary Ordinary S Ordinary Shares Shares Total Shares Shares Total 10 Debtors £'000 £'000 £'000 £'000 £'000 £'000 Prepayments and accrued income 232 130 362 231 124 355 Other debtors 2 1 3 2 1 3 234 131 365 233 125 358 11 Creditors Accruals 56 20 76 98 26 124 Corporation Tax - 4 4 - - - 56 24 80 98 26 124 31 December 2012 31 December 2011 Ordinary Shares S Ordinary Shares Ordinary Shares S Ordinary Shares 12 Share capital Number £'000 Number £'000 Number £'000 Number £'000 At 31 December the authorised share capital comprised: allotted, issued and fully paid: Ordinary Shares of 10p each Balance brought forward 8,386,589 839 4,861,009 486 8,323,130 832 4,936,009 494 Repurchased and cancelled in year - - (26,000) (3) (368,213) (36) (75,000) (8) 8,386,589 839 4,835,009 483 7,954,917 796 4,861,009 486 Issued during the year 770,817 77 429,437 43 431,672 43 - - 9,157,406 916 5,264,446 526 8,386,589 839 4,861,009 486 During the year no Ordinary Shares (2011: 368,213) of 10p each were repurchased by the Company at a cost of Nil (2011: £261,977) and cancelled. During the year 26,000 S Ordinary Shares (2011: 75,000) of 10p each were repurchased by the Company at a total cost of £25,015 (2011: £54,866) and cancelled. During the year the Company issued 770,817 Ordinary Shares (2011: 431,672) pursuant to the linked offer at a subscription price of 102.12p per share (2011: 91.7p). During the year the Company issued 429,437 S Ordinary Shares (2011: Nil) pursuant to the linked offer at a subscription price of 107.41p per share (2011: Nil). Following the year end, the Company issued a further 3,643,812 Ordinary Shares at 97.7p per share pursuant to a public offer for subscription. Share Capital Capital Capital premium Distributable reserve reserve redemption Revenue account reserve realised unrealised reserve reserve £'000 £'000 £'000 £'000 £'000 £'000 13 Reserves Ordinary Shares At 1 January 2012 - 7,168 611 (701) 37 277 Gains on sales of investments - - 220 - - - Net increase in value of investments - - - 190 - - Investment management fees - - (241) - - - Dividends paid - - (265) - - (124) Tax effect of capital items - - 50 - - - Share Issue - 1 March 2012 421 - - - - - Share Issue - 5 April 2012 192 - - - - - Share Issue - 18 April 2012 50 - - - - - Repurchase and cancellation of shares - - - - - - Net return on ordinary activities after taxation - - - - - 189 At 31 December 2012 663 7,168 375 (511) 37 342 S Ordinary Shares At 1 January 2012 - 4,149 - 294 8 121 Gains on sales of investments - - 444 - - - Net increase in value of investments - - - 17 - - Investment management fees - - (87) - - - Dividends paid - - (52) - - (108) Tax effect of capital items - - 17 - - - Share Issue - 1 March 2012 249 - - - - - Share Issue - 5 April 2012 113 - - - - - Share Issue - 18 April 2012 31 - - - - - Repurchase and cancellation of shares - (25) - - 3 - Net return on ordinary activities after taxation - - - - - 177 At 31 December 2012 393 4,124 322 311 11 190 14 Net asset value per Ordinary Share The net asset value per share and the net asset value attributable to the Ordinary Shares at the year end calculated in accordance with the Articles of Association were as follows: 31 December 2012 31 December 2011 Ordinary Shares S Ordinary Shares Ordinary Shares S Ordinary Shares Net asset Net asset Net asset Net asset Net asset Net asset Net asset Net asset value per value value per value value per value value per value share attributable share attributable share attributable share attributable p £'000 p £'000 p £'000 p £'000 Ordinary Shares 98.2 8,990 111.6 5,877 98.2 8,231 104.1 5,058 The number of issued shares used in the above calculation is set out in note 12. Year ended Year ended 31 December 2012 31 December 2011 Ordinary S Ordinary Ordinary S Ordinary Shares Shares Shares Shares 15 Reconciliation of revenue return before finance costs £'000 £'000 £'000 £'000 and taxation to net cash (outflow)/inflow from operating activities Net return before taxation 408 572 499 411 Gains on investments (410) (461) (546) (350) Increase in accrued income & prepayments (1) (6) (65) (47) (Decease)/increase in accruals (42) (6) 49 (6) Amortisation of fixed income investment book cost 13 5 2 1 Tax on unfranked income - - (2) (1) Net cash (outflow)/inflow from operating activities (32) 104 (63) 8 Ordinary Shares S Ordinary Shares 16 Analysis of changes in net funds At At At At 1 January Cash 31 December 1 January Cash 31 December 2012 flows 2012 2012 flows 2012 £'000 £'000 £'000 £'000 £'000 £'000 Cash and overnight deposits 399 386 785 356 191 547 At At At At 1 January Cash 31 December 1 January Cash 31 December 2011 flows 2011 2011 flows 2011 £'000 £'000 £'000 £'000 £'000 £'000 Cash and overnight deposits 890 (491) 399 753 (397) 356 Year ended Year ended 31 December 2012 31 December 2011 Ordinary S Ordinary Ordinary S Ordinary Shares Shares Shares Shares 17. Capital commitments.contingencies and £'000 £'000 £'000 £'000 financial guarantees Financial guarantees - - 244 137 During the year, all guarantees were released 18 Derivatives and other financial instruments The Company's financial instruments comprise equity and fixed interest investments, cash balances and debtors and creditors that arise directly from its operations, for example, in respect of sales and purchases awaiting settlement, and debtors for accrued income. The company holds financial assets in accordance with its investment policy of investing mainly in a portfolio of VCT qualifying unquoted and AIM quoted securities. The Company may not enter into derivative transactions in the form of forward foreign currency contracts, futures and options without the written permission of the Directors. No derivative transactions were entered into during the period. The main risks the Company faces from its financial instruments are (i) market price risk, being the risk that the value of investment holdings will fluctuate as a result of changes in market prices caused by factors other than interest rates, (ii) interest rate risk, (iii) liquidity risk and (iv) credit risk. In line with the Company's investment objective, the portfolio comprises only sterling currency securities and therefore has no direct exposure to foreign currency risk. The Manager's policies for managing these risks are summarised below and have been applied throughout the period. The numerical disclosures below exclude short-term debtors and creditors which are included in the Balance Sheet at fair value. Market price risk The Company's investment portfolio is exposed to market price fluctuations, which are monitored by the manager in pursuance of the investment objective as set out on page 19. Adherence to investment guidelines and to investment and borrowing policies set out in the management agreement mitigates the risk of excessive exposure to any particular type of security or issuer. These powers and guidelines include the requirement to invest in a minimum of 30 companies across a range of industrial and service sectors at varying stages of development, to closely monitor the progress of these companies and to appoint a non executive director to the board of each company. Further information on the investment portfolio (including sector concentration and deal type analysis) is set out in the Analysis of Unlisted and AIM Portfolio, Investment Manager's Review, Summary of Investment Changes, Investment Portfolio Summary and Largest Unlisted and AIM Investments. Interest rate risk The interest rate risk profile of financial assets at the balance sheet date was as follows: Ordinary Shares At 31 December 2012 Fixed Floating Non interest Interest rate bearing £'000 £'000 £'000 Sterling Listed fixed income - - 999 Unlisted and AIM/ISDX 4,079 - 2,949 Cash - 785 - 4,079 785 3,948 At 31 December 2011 Fixed Floating Non interest Interest rate bearing £'000 £'000 £'000 Sterling Listed fixed income 597 - - Unlisted and AIM/ISDX 4,351 - 2,749 Cash - 399 - 4,948 399 2,749 The listed fixed interest assets have a weighted average life of Nil (2011: 0.4 years) and a weighted average interest rate of Nil (2011: 5.2%). The unlisted fixed interest assets have a weighted average life of 2.36 years (2011: 2.8 years) and a weighted average interest rate of 9.75% (2011: 10.4%). The non-interest bearing assets represents the equity element of the portfolio. All assets and liabilities of the fund are included in the balance sheet at fair value. It is the Directors opinion that the carrying amounts of these financial assets represent the maximum credit risk exposure at the balance sheet date. The interest rate which determines the interest received on cash balances is the bank base rate. S Ordinary Shares At 31 December 2012 Fixed Floating Non interest Interest rate bearing £'000 £'000 £'000 Sterling Listed Fixed Income - - 999 Unlisted and AIM/ISDX 2,547 - 1,677 Cash - 547 - 2,547 547 2,676 At 31 December 2011 Fixed Floating Non interest Interest rate bearing £'000 £'000 £'000 Sterling Listed Fixed Income 248 - - Unlisted and AIM/ISDX 2,665 - 1,690 Cash - 356 - 2,913 356 1,690 The listed fixed interest assets have a weighted average life of Nil (2011: 0.4 years) and a weighted average interest rate of Nil (2011: 5.2%). The unlisted fixed interest assets have a weighted average life of 2.65 years (2011: 3.2 years) and a weighted average interest rate of 10.1% (2011: 10.4%). The non-interest bearing assets represents the equity element of the portfolio. All assets and liabilities of the fund are included in the balance sheet at fair value. It is the Directors opinion that the carrying amounts of these financial assets represent the maximum credit risk exposure at the balance sheet date. The interest rate which determines the interest received on cash balances is the bank base rate. Maturity profile The interest rate profile of the Company's financial assets at the Balance sheet date was as follows: Ordinary Shares Within Within Within Within Within More than 1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years Total At 31 December 2012 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Fixed interest Listed 999 - - - - - 999 Unlisted 780 1,290 812 430 660 107 4,079 1,779 1,290 812 430 660 107 5,078 Within "more than 5 years" there is a figure of £2,000 (2011 - £11,000) in respect of preference shares which have no redemption date Ordinary Shares Within Within Within Within Within More than 1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years Total At 31 December 2011 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Fixed interest Listed 597 - - - - - 597 Unlisted 939 452 1,088 1,018 501 353 4,351 1,536 452 1,088 1,018 501 353 4,948 S Ordinary Shares Within Within Within Within Within More than 1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years Total At 31 December 2012 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Fixed interest Listed 999 - - - - - 999 Unlisted 299 713 684 325 454 71 2,546 1,298 713 684 325 454 71 3,545 Within "more than 5 years" there is a figure of £1,000 (2011 - £1,000) in respect of preference shares which have no redemption date S Ordinary Shares Within Within Within Within Within More than 1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years Total At 31 December 2011 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Fixed interest Listed 248 - - - - - 248 Unlisted 437 90 553 954 370 261 2,665 685 90 553 954 370 261 2,913 All liabilities are due within one year and, as such, no maturity profile has been provided. Liquidity risk Due to their nature, unlisted investments may not be readily realisable and therefore a portfolio of listed assets and cash is held to offset this liquidity risk. Note 8 details the three-tier heirarchy of inputs used as at 31 December 2012 in valuing the Company's investments carried at fair value. Credit risk and interest rate risk are minimised by acquiring high quality government treasury stocks or other bonds which have a relatively short time to maturity. The Company, generally, does not hold significant cash balances and any cash held is with reputable banks with high quality external credit ratings. Credit risk This is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. The Company's financial assets exposed to credit risk amounted to the following : 31 December 2012 31 December 2011 Ordinary Shares S Ordinary Shares Total Ordinary Shares S Ordinary Shares Total Investments in fixed interest instruments 999 999 1,998 597 248 845 Investments in unlisted debt securities 4,079 2,547 6,626 4,351 2,665 7,016 Cash and cash equivalents 785 547 1,332 399 356 755 5,863 4,093 9,956 5,347 3,269 8,616 Credit risk arising on fixed interest instruments is mitigated by investing in UK Government Stock. All assets which are traded on a recognised exchange, are held by JP Morgan Chase (JPM), the Company's custodian. Cash balances are held by JPM and Clydesdale. Should the credit quality or the financial position of any of these institutions deteriorate significantly the Manager will move these assets to another financial institution. The Manager evaluates credit risk on unlisted debt securities and financial commitments and guarantees prior to investment, and as part of the ongoing monitoring of investments. In doing this, it takes into account the extent and quality of any security held. Typically, unlisted debt securities have a fixed charge over the assets of the investee company in order to mitigate the gross credit risk. The Manager receives management accounts from investee companies, and members of the investment management team sit on the boards of investee companies; this enables the close identification, monitoring and management of investment specific credit risk. There were no significant concentrations of credit risk to counterparties at 31 December 2012 or 31 December 2011. Price risk sensitivity The following details the Company's sensitivity to a 10% increase or decrease in the market prices of listed or AIM/ISDX quoted securities, with 10% being the Manager's assessment of a reasonable possible change in market prices. At 31 December 2012, if market prices of AIM/ISDX quoted securities had been 10% higher or lower and with all other variables held constant, the increase or decrease in net assets attributable to Ordinary Shareholders for the year would have been £132,000 (2011: £94,000) due to the change on valuation of financial assets at fair value through profit or loss. At 31 December 2012, if market prices of listed or AIM/ISDX quoted securities had been 10% higher or lower and with all other variables held constant, the increase or decrease in net assets attributable to S Ordinary Shareholders for the year would have been £107,000 (2011: £32,000) due to the change on valuation of financial assets at fair value through profit or loss. At 31 December 2012, 74.6% (2011: 82.0%) comprised investments in unquoted companies held at fair value attributable to Ordinary Shareholders. The valuation of unquoted investments reflects a number of factors, including the performance of the investee company itself and the wider market. Therefore, it is not considered meaningful to provide a sensitivity analysis on the net asset position and total return for the year due to the fact any such movements would be immaterial to users of Financial Statements. At 31 December 2012, 70.6% (2011: 84.6%) comprised investments in unquoted companies held at fair value attributable to S Ordinary Shareholders. The valuation of unquoted investments reflects a number of factors, including the performance of the investee company itself and the wider market. Therefore, it is not considered meaningful to provide a sensitivity analysis on the net asset position and total return for the year due to the fact any such movements would be immaterial to users of Financial Statements. 19 Share Consolidation and Ortus VCT PLC Merger Share Consolidation Pursuant to the Company share consolidation, 804,028 new Maven Income and Growth VCT 4 S Shares were issued to the holders of S Shares on the Company's register on 25 March 2013 (this being the record date for the Share Consolidation). All the S Shares then in issue in the capital of the Company were redesignated as Maven Income and Growth VCT 4 Ordinary Shares on a ratio of one to one. As a result, following completion of the Share Consolidation, holders of S Shares now hold 1.1528 Ordinary Shares for every S Share held on the record date for the Share Consolidation. Merger Shareholders approved the acquisition of all of the assets and liabilities of Ortus VCT PLC which was completed by way of a Scheme of reconstruction of Ortus pursuant to Section 110 of the Insolvency Act 1986 and the transfer by Ortus of all of its assets and liabilities to the Company ("Scheme"), details of which were contained in the Company's circular to shareholders ("the Circular") and the Company's prospectus ("the Prospectus"), both dated 1 March 2013. The total number of new Maven Income and Growth VCT 4 Ordinary Shares issued to Ortus shareholders in connection with the Scheme was 6,853,086 at a deemed issue price of 94.24p per share and the total number of new C Shares issued to Ortus shareholders in connection with the Scheme was 3,968,876 at a deemed issue price of £1.00 per share. Net assets of £6,458,348 and £3,968,876 were transferred to the Maven Income and Growth VCT 4 Ordinary Pool and C Pool respectively after deducting merger costs and the declared Ortus special dividend of 2 pence per share. As a result of the merger each Ortus VCT shareholder received 0.189778 Maven Income and Growth VCT 4 Ordinary Shares and 0.109907 Maven Income and Growth VCT 4 C Shares for each Ortus Ordinary Share held. Following implementation of the Share Consolidation and Scheme of reconstruction, there were 22,078,966 Ordinary Shares and 3,968,876 C shares in in issue in the Company. Budgeted merger costs were £281,000, of which the Company's share was £163,000. Final figures for the costs of the merger are not yet available as the liquidation of Ortus VCT PLC has not yet been completed, however, the board expects that the total costs will be in line with the original estimate. Gross and net assets of the Company immediately following the merger were £25,779,501 and £24,776,094 respectively. Other information This announcement has been prepared on the same basis as the Annual Report and Financial Statements for the year ended 31 December 2012. The Annual Report and Financial Statements for the year ended 31 December 2012 will be filed with the Registrar of Companies and issued to Shareholders in due course. References to page numbers and notes to the financial statements are references to the Annual Report and Financial Statements for the year ended 31 December 2012. The financial information contained within this announcement does not constitute the Company's statutory Financial Statements as defined in the Companies Act 2006. The statutory Financial Statements for the year ended 31 December 2011 have been delivered to the Registrar of Companies and contained an audit report which was unqualified. Copies of this announcement and of the Annual Report and Financial Statements for the year ended 31 December 2012 will be available at the registered office: Kintyre House, 205 West George Street, Glasgow, G2 2LW, and on the Company's website at www.mavencp.com/migvct4. By order of the Board Maven Capital Partners UK LLP Secretary 30 April 2013 ENDS Neither the content of the Company's website nor the contents of any website accessible from hyperlinks on the company's website (or any other website) is incorporated into, or forms part of, this announcement. This information is provided by RNS The company news service from the London Stock Exchange END ACSBUGDSDSXBGXG