Maven I&g 4 Regulatory News (MAV4)

Maven Income and Growth VCT 4 PLC

Final results for the year ended 31 December 2019

Highlights for the year

• NAV total return at the year end of 146.51p per share (2018: 145.37p)

• NAV at the year end of 70.91p per share (2018: 71.77p), after payment of the interim dividend of 2.00p per share

• Final dividend of 2.00p per share proposed

• Merger with Maven Income and Growth VCT 6 PLC (Maven VCT 6) completed on 18 December 2019

• Net assets increased to £73.1 million at year end

• Deployment of over £6.0 million, including 17 new private and AIM quoted investments

• Three profitable realisations achieved during the year, with a further exit completed after the year end

• Offer for Subscription closed, fully subscribed, raising a further £7.5 million

• Post the period end, NAV of 64.51p per share as at 20 March 2020 announced

Chairman's Statement

On behalf of your Board, I am pleased to present the Annual Report for the first time as Chairman. During the period under review, your Company achieved further growth with NAV total return increasing to 146.51p per share. However, since the end of the financial year, the global economy and financial markets have been impacted by the coronavirus (COVID-19) pandemic. As a result, on 26 March 2020 the Directors took the necessary step of announcing a reduced NAV of 64.51p per share as at 20 March 2020, as well as confirming the suspension of the Dividend Investment Scheme (DIS) and the deferral of the final allotment under the Offer for Subscription, in respect of the 2020/21 tax year. Further details on these developments are provided below and throughout the Annual Report.

On 18 December 2019, following Shareholder approval, the Directors announced the completion of the merger with Maven VCT 6, which substantially increased the size and scale of your Company. This was further enhanced by the announcement on 6 February 2020 that the recent Offer for Subscription had closed early, fully subscribed. This additional capital will enable your Company to continue to expand its portfolio of investee companies, building on the good level of investment activity that was achieved during the reporting period, with the deployment of over £6.0 million across a wide range of new private company and AIM quoted investments. During the period, three exits were completed, including the first realisation from the early stage portfolio. In light of this positive performance, and in recognition of the commitment to maintain regular income payments whenever possible, the Directors are pleased to propose a final dividend of 2.00p per share, making the total dividend for the year 4.00p per share.

This has been another year of important strategic growth and development for your Company, with the completion of the merger with Maven VCT 6. Given the commonality of holdings across the two portfolios, the merger process has been straightforward, with the combined portfolio providing a strong foundation for future growth. Further to this expansion, Shareholders are well positioned to benefit from the enlarged scale of the Company, including a reduction in the total expense ratio.

Following the success of the £20 million fundraising, which closed in April 2018, a key priority for the financial year was to achieve the required rate of investment, to ensure effective utilisation of the new capital in line with the regulatory timeframe for deployment. It is therefore encouraging to report that, during the period, your Company invested over £6.0 million in a range of attractive, growth focused private and AIM quoted companies that have the potential to improve Shareholder returns as they grow in value and mature. The Board is supportive of Maven's selective approach to investment, which ensures that only the most compelling propositions are progressed.

In order to support your Company's continued growth, a top-up Offer for Subscription was launched on 13 November 2019 with the objective of raising up to £7.5 million of new capital. The Directors were pleased to announce on 6 February 2020 that the Offer had closed early, fully subscribed, with the allotment of 9,719,959 Ordinary Shares in respect of the 2019/20 tax year taking place on 11 February 2020. A further allotment, in respect of the 2020/21 tax year is expected to take place after 30 April 2020.

This additional liquidity will enable your Company to further expand its portfolio through the acquisition of new investments across a wide range of sectors, whilst also supporting existing companies that are growing and require additional capital to progress their business plan. As the portfolio evolves, and the proportion of early stage companies increases, the ability to provide follow-on funding will become an important element of the investment strategy, as many of these new companies will require several rounds of funding before they reach maturity and their value is optimised. The Manager has, therefore, taken the cautious approach of making smaller initial investments, where possible, often as part of a syndicate with another VCT house or co-investment partner, as a means of managing risk. The Board recognises that, whilst earlier stage companies can offer the opportunity to generate significant capital gains, this has to be balanced against their inherently different risk profile. Investing through a phased approach provides the opportunity to monitor commercial progress closely and continually assess the merits of investment before committing further financial support.

Whilst political and economic uncertainty continued to dominate the UK's macro-economic outlook throughout the financial year, it is reassuring to report that the portfolio has not been discernibly impacted to date by the departure of the UK from the EU on 31 January 2020. The majority of the underlying investee companies have limited direct exposure to the EU, and those that do have been implementing contingency plans to mitigate any potential impact. The Investment Manager's Review in the Annual Report contains a detailed analysis of portfolio developments and a summary of the investments completed during the year.

Notwithstanding the impact of the COVID-19 pandemic, covered in more detail below, the continuing positive performance achieved by a number of the more established private companies during the year has enabled the valuations of certain assets to be increased. Those companies that are at an earlier stage of development have generally performed in line with expectations, with most achieving growth in revenue over the previous year, which has, in a small number of cases, warranted uplifts to valuations. Aside from the specific provisions that were taken by your Board in response to the outbreak of COVID-19, as reflected in the NAV announcement of 26 March 2020, there were also a small number of investee companies that had been operating behind plan or had experienced a market adjustment that had influenced performance and, as a result, the valuations of these assets were reduced. In addition, full provisions were taken against the holdings in two early stage portfolio companies that were unable to scale in line with the business plan, with one subsequently being placed into administration.

Three notable exits completed during the period. In June 2019, the holdings in Just Trays, the UK's leading designer and manufacturer of shower trays and accessories, and wind turbine blade maintenance specialist GEV were realised for total returns of 2.0 times and 2.7 times cost over their respective holding periods. In December 2019, your Company completed its first exit from the portfolio of earlier stage assets with the realisation of fibre network provider ITS Technology for a total return of 1.0 times cost over the investment period. Whilst the Board is aware that discussions are underway regarding potential exits from other portfolio companies, in light of the COVID-19 outbreak, it is likely that a number of these sale processes will be put on hold until there is a higher degree of economic stability.

COVID-19

At the time of publication of the Annual Report, the coronavirus (COVID-19) pandemic has resulted in unprecedented disruption to personal and business life for almost everyone, and there remains considerable uncertainty over when the social distancing measures will be relaxed. Maven has provided advice to its staff on how to minimise the risk of exposure to the virus and has a business continuity plan in place.

Contingency planning is also a matter for each portfolio company to consider and Maven appointed executives are playing an active role in the evaluation and implementation of any measures required to protect the health of employees, and to minimise business disruption. That support includes guidance around accessing Government initiatives such as the Coronavirus Job Retention Scheme or the Coronavirus Business Interruption Loan Scheme (CBILS). However, it is important to note that 52% of your portfolio is invested in young, dynamic growth companies with flexible cost bases, many of which are operating in the software and technology sectors, which may be less affected by the current economic conditions.

The Board and the Manager remain in regular contact regarding this evolving situation and will continue to provide updates to Shareholders as appropriate. Further information is provided in the Investment Manager's Review and Note 17 to the Financial Statements in the Annual Report.

Dividends and Distributable Reserves

As Shareholders will be aware from recent Interim and Annual Reports, decisions on distributions take into consideration the availability of surplus revenue, the realisation of capital gains, the adequacy of distributable reserves and the VCT qualifying level, all of which are kept under close and regular review by the Board and the Manager. During 2017 and 2018, your Company made a number of enhanced dividend payments, which occurred outwith the normal dividend payment cycle and were the result of a build-up of distributable reserves and the requirement to maintain ongoing compliance with the VCT regulations.

Whilst your Company does not have a specific dividend target, the Board and the Manager recognise the importance of tax-free distributions to Shareholders and, following recent exit activity, are pleased to propose a final dividend of 2.00p per Ordinary Share, in respect of the year ended 31 December 2019. The final dividend will be paid on 22 May 2020 to Shareholders on the register at 24 April 2020. This will bring total distributions for the year to 4.00p per Ordinary Share, representing a yield of 6.06% based on the year end closing mid-market share price of 66.00p. Since the Company's launch, and after receipt of the proposed final dividend, Shareholders will have received 77.60p per share in tax-free distributions. It should be noted that the effect of paying dividends is to reduce the NAV of the Company by the total cost of the distribution.

At the Company's 2019 AGM, Shareholders approved a Special Resolution to cancel the share premium account and the capital redemption reserve, pursuant to the Companies Act 2006, to create a further pool of distributable reserves that could be used for future dividends or any other applicable purpose. On 21 August 2019, the Company announced that the High Court of Justice and Court of Session in Scotland had confirmed the cancellation of the share premium account and the capital redemption reserve.

Whilst the level of distributable reserves has increased, the Directors would like to remind Shareholders that as the portfolio evolves and a greater proportion of holdings are in young companies with growth capital requirements, there will continue to be fluctuations in the quantum and timing of dividend payments. Distributions will be more closely linked to realisation activity and will also reflect the Company's requirement to maintain its VCT qualifying level. If larger distributions are required, as a consequence of exits, this could result in a reduction in NAV per share. However, the Board considers this to be a tax efficient means of returning value to Shareholders whilst ensuring ongoing compliance with the requirements of the VCT legislation.

Suspension of the Dividend Investment Scheme (DIS)

On 26 March 2020, the Board announced that, in light of the volatility in financial markets caused by the COVID-19 pandemic, it had deemed it appropriate to suspend the DIS with immediate effect. As a result, the proposed final dividend of 2.00p per share for the financial year to 31 December 2019, and all subsequent dividends until further notice, will be paid to Shareholders either by cheque or bank transfer using existing mandate instructions. Written confirmation of the suspension in the operation of the DIS will be issued to those Shareholders who had elected to participate. If a Shareholder has a specific query with respect to the DIS suspension, they should contact The Company Secretary, Maven Income and Growth VCT PLC, c/o Maven Capital Partners UK LLP, First Floor, Kintyre House, 205 West George Street, Glasgow G2 2LW or email: CoSec@mavencp.com.

Fund Raising

On 13 November 2019, the Directors of your Company, together with the board of Maven Income and Growth VCT 3 PLC, launched joint Offers for Subscription of new Ordinary Shares for up to £15 million in aggregate (£7.5 million for each company).

On 6 February 2020, the Directors confirmed that the Offer for Subscription had closed early, fully subscribed, raising £7.5 million. An allotment of 9,719,959 new Ordinary Shares, in respect of the 2019/20 tax year, was made on 11 February 2020. On 26 March 2020, the Board announced that, having considered the possible impact of the COVID-19 pandemic on the trading performance of some of the underlying portfolio companies, it intended to delay the allotment date for the 2020/21 tax year to no earlier than 30 April 2020. This will allow the Board and the Manager time to review the portfolio to ensure that the issue price reflects the valuation of the underlying portfolio.

This additional liquidity will enable your Company to continue to expand the portfolio by investing in ambitious, growth focused private and AIM quoted companies that operate across a range of market sectors and are capable of generating capital gains. It will also ensure that existing portfolio companies can continue to be supported through follow-on funding where there is an ongoing business case and commercial traction that merits support. Furthermore, the funds raised will allow your Company to maintain its share buy-back policy, whilst also spreading costs over a wider asset base in line with the objective of further reducing the total expense ratio for the benefit of all Shareholders.

Further details regarding the new Ordinary Shares issued under the Offer for Subscription can be found in Note 12 to the Financial Statements.

Merger

On 18 December 2019, following the passing of resolutions at a series of general meetings of both companies, the Directors were pleased to announce the completion of the merger of the Company with Maven VCT 6. On completion, the assets and liabilities of Maven VCT 6 were transferred to your Company in consideration for the issue of 27,578,970 new Ordinary Shares in your Company to the former shareholders of Maven VCT 6, based on a ratio of 0.687632 new shares for each Maven VCT 6 share held and at a deemed issue price of 70.60p per new share. Following the merger, the net assets of your Company increased to £73.1 million and the new shares were admitted to the Official List on 19 December 2019. Maven VCT 6 was placed in members' voluntary liquidation, with the listing of its ordinary shares cancelled with effect from 19 December 2019.

The impact of the merger can be seen in the Financial Statements and related Notes, and is reflected in the Financial Highlights in the Annual Report.

Share Buy-backs

Shareholders will be aware that a primary objective for the Board is to ensure that the Company retains sufficient liquidity to make investments in line with its stated policy, and for the continued payment of dividends. However, the Directors also acknowledge the need to maintain an orderly market in the Company's shares and have, therefore, delegated authority to the Manager to buy back shares in the market for cancellation or to be held in treasury, subject always to such transactions being in the best interests of Shareholders. The Board remains of the view that, despite the market volatility in relation to COVID-19, it is appropriate to continue to operate the buy-back policy as this is an important mechanism for ensuring an orderly market in the Company's shares.

It is intended that, subject to market conditions, available liquidity and the maintenance of the Company's VCT status, shares will be bought back at prices representing a discount of up to 15% of the prevailing NAV per share.

Regulatory Developments

Whilst the 2019 Budget did not introduce further amendments to the rules governing VCTs, a key focus for the financial year has been satisfying the requirements of the Finance Act 2018, which increased the threshold level of qualifying investments that a VCT must hold from 70% to 80%. The Directors are pleased to confirm that this was achieved ahead of 1 January 2020, being the date of compliance for your Company. The qualifying position will continue to be closely monitored by the Manager and reviewed by the Board on a regular basis.

In February 2019, the Association of Investment Companies (AIC) issued an updated version of the AIC Code of Corporate Governance (the AIC Code), reflecting the revised UK Corporate Governance Code (the UK Code), which was published in July 2018. Having considered the implications and reporting obligations under the revised Codes, and consistent with maintaining high standards of corporate governance, the Board has elected to adopt the AIC Code. Shareholders will note the inclusion of a number of additional disclosures in the Annual Report, reflecting application of the AIC Code, and the notable changes to the revised AIC Code are highlighted in the Statement of Corporate Governance in the Annual Report.

During the year, the Manager has been working towards the implementation of the Senior Managers and Certification Regime (SMCR) which, for solo regulated firms such as Maven, came into effect on 9 December 2019. SMCR replaces the FCA's approved persons regime and seeks to increase transparency and accountability of processes and structures within FCA regulated entities, including Maven. The Board is pleased to note that all necessary requirements of the SMCR were achieved by Maven ahead of the implementation date.

Board of Directors

On behalf of the Board, I am pleased to welcome Fraser Gray as a Non-executive Director with effect from 18 December 2019. Fraser was a non-executive director of Maven VCT 6 prior to the merger and is a Chartered Accountant with extensive experience of working with both private and AIM quoted companies; further details can be found in the Your Board section of the Annual Report and in the Directors' Report. As required under the Company's Articles, Fraser will stand for election by Shareholders at the AGM to be held on 14 May 2020, being the first general meeting following his appointment.

AGM

In previous years, the Company has normally held its AGM at the London office of Maven but, in the current circumstances and based on the latest available advice on social distancing, the Board has resolved that the venue of this year's AGM should be moved to Glasgow. Therefore, the 2020 AGM will be held in the Glasgow office of Maven Capital Partners UK LLP on Thursday 21 May 2020 commencing at 12.00 noon. The Notice of Annual General Meeting can be found in the Annual Report.

In respect of the ongoing COVID-19 situation, which the Board is monitoring closely, the Directors of the Company consider the well-being of its Shareholders and other AGM attendees as a high priority. The Directors are aware that the AGM is a good opportunity for Shareholders to meet the Board and the Manager. However, in light of the Government advice against all non-essential travel and maintaining social distancing, Shareholders will not be allowed to attend the AGM in person and instead should vote using the Proxy Form, which can be submitted to the Company. Proxy Forms should be completed and returned in accordance with the instructions thereon and the latest time for the receipt of Proxy Forms is 12.00 noon on Tuesday 19 May 2020. Proxy votes can be also be submitted by CREST or online using the Registrar's Share Portal Service at www.signalshares.com. The Board would also encourage Shareholders to submit any questions for the Board and Manager by email or by letter in advance of the AGM. A summary of responses will be published after the AGM on the Company's website at: www.mavencp.com/migvct. Shareholders wishing to submit a question should write to: The Company Secretary, Maven Income and Growth VCT PLC, c/o Maven Capital Partners UK LLP, First Floor, Kintyre House, 205 West George Street, Glasgow G2 2LW or email to: CoSec@mavencp.com.

The Future

Over the past two years, your Company has experienced meaningful growth through two significant fundraisings and two mergers, which have increased absolute net asset value from £32 million in December 2017 to £73.1 million at the year end. There will now be a period of consolidation where the primary objective will be to expand the portfolio further, through selective additions of new private and AIM quoted companies. Your Company has good levels of liquidity to support this strategy and the medium-term objective remains committed to building a diversified portfolio to help mitigate the risks associated with early stage investment. While there are obvious challenges to be faced as a result of the COVID-19 pandemic, the Board believes that Maven remains well placed to deliver this objective for Shareholders and anticipates a good rate of investment through the first half of the new financial year.

Peter Linthwaite

Chairman

21 April 2020

Business Report

This Business Report is intended to provide an overview of the strategy and business model of the Company, as well as the key measures used by the Directors in overseeing its management. The Company is a venture capital trust and invests in accordance with the investment objective set out below.

Investment Objective

Under an investment policy approved by the Directors, the Company aims to achieve long-term capital appreciation and generate income for Shareholders.

Business Model and Investment Policy

The Company intends to achieve its objective by:

• investing the majority of its funds in a diversified portfolio of shares and securities in smaller, unquoted UK companies and AIM/NEX quoted companies that meet the criteria for VCT qualifying investments and have strong growth potential;

• investing no more than £1.25 million in any company in one year and no more than 15% of the Company's assets by cost in one business at any time; and

• borrowing up to 15% of net asset value, if required and only on a selective basis, in pursuit of its investment strategy.

Principal Risks and Uncertainties

The Board and the Risk Committee have an ongoing process for identifying, evaluating and monitoring the principal and emerging risks and uncertainties facing the Company. The risk register and dashboard form key parts of the Company's risk management framework used to carry out a robust assessment of the risks, including a significant focus on the controls in place to mitigate them. The principal and emerging risks and uncertainties facing the Company are as follows:

Investment Risk

The majority of the Company's investments are in small and medium sized unquoted UK companies and AIM/NEX quoted companies which, by their nature, carry a higher level of risk and lower liquidity than investments in large quoted companies. The Board aims to limit the risk attached to the investment portfolio as a whole by ensuring that a robust and structured selection, monitoring and realisation process is applied by Maven. The Board reviews the investment portfolio with the Manager on a regular basis.

The Company manages and minimises investment risk by:

• diversifying across a large number of companies;

• diversifying across a range of economic sectors;

• actively and closely monitoring the progress of investee companies;

• co-investing with other clients of Maven and also other VCT managers;

• ensuring valuations of underlying investments are made fairly and reasonably (see Notes to the Financial Statements 1(e), 1(f) and 16 for further details);

• taking steps to ensure that the share price discount is managed appropriately; and

• choosing and appointing an FCA authorised investment manager with the skills, experience and resources required to achieve the investment objective, with ongoing monitoring to ensure the Manager is performing in line with expectations.

Internal Control Risk

The Board reviews regularly the system of internal controls, both financial and non-financial, operated by the Company, Maven and other key third party outsourcers such as the Custodian and Registrar. These include controls designed to ensure that the Company's assets are safeguarded, that all records are complete and accurate and that the third parties have adequate controls in place to prevent data protection and cyber security failings.

VCT Qualifying Status Risk

The Company operates in a complex regulatory environment and faces a number of related risks, including:

• becoming subject to capital gains tax on the sale of its investments as a result of a breach of Section 274 of the Income Tax Act 2007;

• loss of VCT status and consequent loss of tax reliefs available to Shareholders as a result of a breach of the VCT Regulations;

• loss of VCT status and reputational damage as a result of a serious breach of other regulations such as the FCA Listing Rules and the Companies Act 2006; and

• increased investment restrictions resulting from EU State Aid Rules, incorporated by the Finance (No. 2) Act 2015 and the Finance Act 2018.

The Board works closely with the Manager to ensure compliance with all applicable and upcoming legislation, such that VCT qualifying status is maintained. Further information on the management of this risk is detailed under other headings in this Business Report.

Legislative and Regulatory Risk

The Directors strive to maintain a good understanding of the changing regulatory agenda and consider emerging issues so that appropriate changes can be implemented and developed in good time. In order to maintain its approval as a VCT, the Company is required to comply with current VCT legislation in the UK as well as the EU State Aid Rules. Changes to either legislation could have an adverse impact on Shareholder investment returns, whilst maintaining the Company's VCT status. The Board and the Manager continue to make representations where appropriate, either directly or through relevant industry bodies such as the AIC and the British Venture Capital Association (BVCA).

The Company has retained Philip Hare & Associates LLP as its principal VCT adviser and also uses the services of a number of other VCT advisers on a transactional basis.

Breaches of other regulations including, but not limited to, the Companies Act, the FCA Listing Rules, the FCA Disclosure Guidance and Transparency Rules, the GDPR, or the Alternative Investment Fund Managers Directive (the AIFMD), could lead to a number of detrimental outcomes and reputational damage. Breaches of controls by service providers to the Company could also lead to reputational loss or damage.

The AIFMD, which regulates the management of alternative investment funds, including VCTs, introduced an authorisation and supervisory regime for all investment companies in the EU. The Company is a small registered, internally managed alternative investment fund under the AIFMD. The Company is also required to comply with tax legislation under the Foreign Account Tax Compliance Act and the Common Reporting Standard. The Company has appointed Link Market Services to act on its behalf to report annually to HMRC and ensure compliance with this legislation.

Political Risk

The full political, economic and legal consequences of the UK leaving the EU are not yet known. It is possible that investments in the UK may be more difficult to value and assess for suitability of risk, harder to buy or sell, and may be subject to greater or more frequent rises and falls in value. In the longer term, there is likely to be a period of uncertainty as the UK seeks to negotiate its ongoing relationship with the EU and other global trade partners.

In the future, UK laws and regulations, including those relating to investment companies and AIFMs, may diverge from those of the EU. This may lead to changes in the operation of the Company, the rights of investors, or the list of territories in which the shares of the Company can be promoted or sold.

The Board reviews the political situation regularly, together with any associated changes to the economic, regulatory and legislative environment, in order to ensure that any risks are mitigated as effectively as possible.

Climate Change and Social Responsibility Risk

The Board recognises that climate change is an important emerging risk that all companies should take into consideration within their strategic planning. As referred to elsewhere in this Strategic Report and in the Statement of Corporate Governance, the Company has little direct impact on environmental issues. However, the Company has introduced measures to reduce the cost and environmental impact of the production and circulation of Shareholder documentation such as the annual and interim reports. This has resulted in a significant reduction in the number of copies being printed and posted, with fewer than 15% of Shareholders now receiving paper reports.

The Board is also aware that the Manager continues to take into account environmental, social and governance matters when considering investment proposals. VCTs in general are regarded as supporting small and medium sized enterprises, investment in which helps to create local employment across a range of UK geographical regions.

Other Key Risks

Governance Risk

The Directors are aware that an ineffective Board could have a negative impact on the Company and its Shareholders. The Board recognises the importance of effective leadership and board composition and this is ensured by completing an annual evaluation process, with action taken if required.

Management Risk

The Directors are aware of the risk that investment opportunities could fail to complete, or the management of the VCT could breach the Management and Administration Deed or regulatory parameters, due to lack of knowledge and/or experience of the investment professionals acting on behalf of the Company. To manage this risk, the Board has appointed Maven as investment manager, as it employs skilled professionals with the required VCT knowledge and experience. In addition, the Board takes comfort that the Manager's controls have been updated to ensure compliance with the SMCR.

The Directors are also mindful of the impact that the loss of the Manager's key employees could have on both investment opportunities that may be lost or existing investments that may fail. The Board is reassured by the Manager's approach to incentivising staff and ensuring that adequate notice periods are included in all contracts of employment.

Financial and Liquidity Risk

As most of the investments require a medium to long-term commitment and are relatively illiquid, the Company retains a portion of the portfolio in cash and listed investment trusts in order to finance any new or follow-on investment opportunities. The Company has only limited direct exposure to currency risk and does not enter into any derivative transactions.

Economic Risk

The valuation of investment companies may be affected by underlying economic conditions such as fluctuating interest rates and the availability of bank finance, which can be impacted during times of geopolitical uncertainty and fluctuating markets. The economic and market environment is kept under constant review and the investment strategy of the Company adapted, so far as is possible, to mitigate emerging risks.

Credit Risk

The Company may hold financial instruments and cash deposits and is dependent on counterparties discharging their agreed responsibilities. The Directors consider the creditworthiness of the counterparties to such instruments and seek to ensure that there is no undue concentration of exposure to any one party.

An explanation of certain economic and financial risks and how they are managed is contained in Note 16 to the Financial Statements.

Other Emerging Risks

The Directors are cognisant of the potential impact of the coronavirus (COVID-19) outbreak and its implications for the activities of the Manager and on the performance of investee companies. This is covered in more detail in the Chairman's Statement Investment Manager's Review and Note 17 to the Financial Statements in the Annual Report.

Statement of Compliance with Investment Policy

The Company is adhering to its stated investment policy and managing the risks arising from it. This can be seen in various tables and charts throughout the Annual Report, and from information provided in the Chairman's Statement and in the Investment Manager's Review. A review of the Company's business, its financial position as at 31 December 2019 and its performance during the year then ended is included in the Chairman's Statement, which also includes an overview of the Company's business model and strategy.

The management of the investment portfolio has been delegated to Maven, which also provides company secretarial, administrative and financial management services to the Company. The Board is satisfied with the depth and breadth of the Manager's resources and its nationwide network of offices, which supply new deals and enable it to monitor the geographically widespread portfolio of companies effectively.

The Investment Portfolio Summary in the Annual Report discloses the investments in the portfolio and the degree of co-investment with other clients of the Manager. The tabular analysis of the unlisted and quoted portfolio shows that the portfolio is diversified across a variety of industry sectors and transaction types. The level of VCT qualifying investments is monitored continually by the Manager and reported to the Risk Committee quarterly, or as otherwise required.

Key Performance Indicators (KPIs)

During the year, the net return on ordinary activities before taxation was £1,175,000 (2018: £361,000); gains on investments were £1,497,000 (2018: £1,082,000) and earnings per share were 1.53p (2018: 0.66p).The Directors also use a number of APMs in order to assess the Company's success in achieving its objectives and also enable Shareholders and prospective investors to gain an understanding of its business. These APMs are shown in the Financial Highlights in the Annual Report.

In addition, the Board considers the following to be KPIs:

• NAV total return;

• annual yield;

• share price discount to NAV;

• investment income; and

• operational expenses.

The NAV total return is considered to be a more appropriate long-term measure of Shareholder value as it includes the current NAV per share and the sum of dividends paid to date. The annual yield is the total of dividends paid per share for the financial year, expressed as a percentage of the share price at the year-end date. The Directors seek to pay dividends to provide a yield and comply with the VCT rules, taking account of the level of distributable reserves, profitable realisations in each accounting period and the Company's future cash flow projections. The share price discount to NAV is the percentage by which the mid-market price of a share is lower than its NAV per share.

Definitions of these APMs can be found in the Glossary in the Annual Report. A historical record of some of these measures is shown in the Financial Highlights in the Annual Report and the change in the profile of the portfolio is reflected in the Summary of Investment Changes in the Annual Report. The Board reviews the Company's investment income and operational expenses on a quarterly basis, as the Directors consider that both of these elements are important components in the generation of Shareholder returns. Further information can be found in Notes 2 and 4 to the Financial Statements in the Annual Report.

There is no VCT index against which to compare the financial performance of the Company. However, for reporting to the Board and Shareholders, the Manager uses comparisons with the most appropriate index, being the FTSE AIM All-Share Index. The Directors also consider non-financial performance measures, such as the flow of investment proposals, and ranking of the VCT sector by independent analysts. In addition, the Directors will consider economic, regulatory and political trends and factors that may impact on the Company's future development and performance.

Valuation Process

Investments held by the Company 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.

Share Buy-backs

At the forthcoming AGM, the Board will seek the necessary Shareholder authority to continue to conduct a share buy-back programme under appropriate circumstances.

The Board's Duty and Stakeholder Engagement

The Directors recognise the importance of an effective Board and its ability to discuss, review and make decisions to promote the long-term success of the Company and protect the interests of its key stakeholders. As required by provision 5 of the AIC Code (and in line with the UK Code), the Board has discussed the Directors' duty under Section 172 of the Companies Act and how the interests of key stakeholders have been considered in the Board discussions and decision making during the year. This has been summarised in the table below:

Employee, Environmental and Human Rights Policy

As a VCT, the Company has no direct employee or environmental responsibilities, nor is it responsible directly for the emission of greenhouse gases. The Board's principal responsibility to Shareholders is to ensure that the investment portfolio is managed and invested properly. As the Company has no employees, it has no requirement to report separately on employment matters. The management of the portfolio is undertaken by the Manager through members of its portfolio management team. The Manager engages with the Company's underlying investee companies in relation to their corporate governance practices and in developing their policies on social, community and environmental matters. Further information may be found in the Statement of Corporate Governance. In light of the nature of the Company's business, there are no relevant human rights issues and, therefore, the Company does not have a human rights policy.

Independent Auditor

The Company's Independent Auditor is required to report if there are any material inconsistencies between the content of the Strategic Report and the Financial Statements. The Independent Auditor's Report can be found in the Annual Report.

Future Strategy

The Board and the Manager intend to maintain the policies set out above for the year ending 31 December 2020, as it is believed that these are in the best interests of Shareholders.

Approval

The Business Report, and the Strategic Report as a whole, was approved by the Board of Directors and signed on its behalf by:

Peter Linthwaite

Director

21 April 2020

Income Statement

For the Year Ended 31 December 2019

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 one reportable segment, the results of which are set out in the Income Statement and Balance Sheet. The Company derives its income from investments made in shares, securities and bank deposits.

There are no potentially dilutive capital instruments in issue and, therefore, no diluted earnings per share figures are relevant. The basic and diluted earnings per share are, therefore, identical.

The accompanying Notes are an integral part of the Financial Statements.

Statement of Changes in Equity

For the Year Ended 31 December 2019

Year Ended 31 December 2018

The accompanying Notes are an integral part of the Financial Statements.

Balance Sheet

As at 31 December 2019

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:

Peter Linthwaite

Director

21 April 2020

The accompanying Notes are an integral part of the Financial Statements.

Cash Flow Statement

For the Year Ended 31 December 2019

The accompanying Notes are an integral part of the Financial Statements.

Notes To The Financial Statements

For the Year Ended 31 December 2019

1. Accounting policies

The Company is a public limited company, incorporated in Scotland, and its registered office is shown in the Corporate Summary in the Annual Report.

(a) Basis of preparation

The Financial Statements have been prepared under the historical cost convention, as modified by the revaluation of investments and in accordance with FRS 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland, and in accordance with the Statement of Recommended Practice for Investment Trust Companies and Venture Capital Trusts (the SORP) issued by the AIC in November 2014.

(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 and performance 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; and

• share issue and merger costs are charged to the share premium account.

(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 that 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 early stage investments completed in the reporting period, 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 investee company.

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 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. 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.

5. 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.

6. 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 measurements 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 - the unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date.

• Level 2 - inputs other than quoted prices included within Level 1 that are observable (ie developed using market data) for the asset or liability, either directly or indirectly.

• Level 3 - inputs are unobservable (ie for which market data is unavailable) for the asset or liability.

(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.

(h) Critical accounting judgements and key sources of estimation uncertainty

Disclosure is required of judgements and estimates made by the Board and the Manager in applying the accounting policies that have a significant effect on the Financial Statements. The area involving the highest degree of judgement and estimates is the valuation of unlisted investments recognised in Note 8 and explained in Note 1(e) above.

In the opinion of the Board and the Manager, there are no critical accounting judgements.

Reserves

Share premium account

The share premium account represents the premium above nominal value received by the Company on issuing shares net of issue costs. This reserve is non-distributable.

Capital reserves

Gains or losses on investments realised in the year that have been recognised in the Income Statement are transferred to the capital reserve realised account on disposal. Furthermore, any prior unrealised gains or losses on such investments are transferred from the capital reserve unrealised account to the capital reserve realised account on disposal.

Increases and decreases in the fair value of investments are recognised in the Income Statement and are then transferred to the capital reserve unrealised account. The capital reserve realised account also represents capital dividends, capital investment management fees and the tax effect of capital items. This reserve is distributable.

Special distributable reserve

The total cost to the Company of the repurchase and cancellation of shares is represented in the special distributable reserve account. This reserve is distributable.

Capital redemption reserve

The nominal value of shares repurchased and cancelled is represented in the capital redemption reserve. This reserve is non-distributable.

Revenue reserve

The revenue reserve represents accumulated profits retained by the Company that have not been distributed to Shareholders as a dividend. This reserve is distributable.

Return per Ordinary Share

Net asset value per Ordinary Share

The net asset value per Ordinary Share as at 31 December 2019 has been calculated using the number of Ordinary Shares in issue at that date of 103,113,920 (2018: 76,570,595).

Post balance sheet event

During the period from the date of the statement of financial position to the date that the Financial Statements were approved, the coronavirus (COVID-19) outbreak has caused extensive disruption to businesses and economic activities globally. The uncertainties over the emergence and spread of COVID-19 have caused market volatility on a global scale. In accordance with the requirements of FRS 102, the fair valuations at the date of the statement of financial position reflect the economic conditions in existence at that date. As highlighted above, the next date at which the valuation of the investment portfolio was assessed was 20 March 2020, with the unaudited NAV per share of 64.51p at that date being announced on 26 March 2020. As at 20 March 2020, the valuation of the investment portfolio was £47,898,000.

Directors Responsibility Statement

The Directors confirm that, to the best of their knowledge:

• the Financial Statements have been prepared in accordance with the applicable accounting standards and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company as at 31 December 2019 and for the year to that date;

• the Directors' Report includes a fair review of the development and performance of the Company, together with a description of the principal risks and uncertainties that it faces; and

• the Annual Report and Financial Statements taken as a whole is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company's position and performance, business model and strategy.

Other information

The AGM will be held on Thursday 21 May 2020, commencing at 12.00 noon, at the offices of Maven Capital Partners UK LLP, Kintyre House, 205 West George Street, Glasgow G2 2LW.

Copies of this announcement and the Annual Report and Financial Statements for the year ended 31 December 2019, will be available to the public: at the registered office of the Company, Kintyre House, 205 West George Street, Glasgow G2 2LW; at the offices of Maven Capital Partners UK LLP, Fifth Floor, 1-2 Royal Exchange Buildings, London EC3V 3LF; and on the Company's website at www.mavencp.com/migvct4.

The Annual Report and Financial Statements for the year ended 31 December 2019 will be issued to Shareholders and filed with the Registrar of Companies in due course.

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 2018 have been delivered to the Registrar of Companies and contained an audit report which was unqualified and did not constitute statements under S498(2) or S498(3) of the Companies Act 2006.

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.

The Annual Report will be submitted to the National Storage Mechanism and will be available for inspection at: https://www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism.

By Order of the Board

Maven Capital Partners UK LLP

Secretary

21 April 2020