Maven I&g 4 Regulatory News (MAV4)

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:

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