Mobeus I&g 4 Regulatory News (MIG4)

Mobeus Income & Growth 4 VCT plc Half-Yearly Report for the six months ended 30 June 2013 Investment Objective Mobeus Income & Growth 4 VCT plc, ("MIG4" or the "Company") is aVenture Capital Trust ("VCT") managed by Mobeus Equity Partners LLP ("Mobeus")investing primarily in established, profitable, unquoted companies. The objective of the Company is to provide investors with a regularincome stream by way of tax free dividends and to generate capital growththrough portfolio realisations which can be distributed by way of additionaltax free dividends. The portfolio comprises a number of diverse investments over a widerange of different business sectors, thus spreading risk by avoidingover-concentration in any one sector. Financial Highlights As at 30 June 2013 - Net asset value (NAV) Total Return per Share for the period was 5.54%. - Shareholders received a dividend in respect of the period ended 31 December 2012 of 5.5 pence per Share in May 2013, bringing total cumulative dividends paid to Shareholders to 32.2 pence per Share. - The Company has declared an interim dividend of 2.0 pence per Share, payable on 20 September 2013 to Shareholders on the register as at 23 August 2013. - Strong liquidity has been enhanced by a successful fundraising in 2013 in which new funds of £8.28 million were raised by the Company. - A total of £3.21 million was invested in the period, which included the MBO of Gro-Group and two acquisitions by ATG Media and Fullfield (Motorclean). Performance Summary The net asset value (NAV) per Share at 30 June 2013 was 118.3 pence. The table below shows the recent past performance of the original funds raisedin 1999. Period Net assets Net asset Share Cumulative Cumulative total return value price dividends per Share to (NAV) per (mid- paid per Shareholders Share market Share since launch2 price)1 (NAV basis) (Share price basis) (£m) (p) (p) (p) (p)2 (p)2As at 30 June 20133 41.7 118.3 103.3 32.2 150.5 135.5As at 31 December 2012 33.5 117.3 102.5 26.7 144.0 129.2As at 31 July 20123 32.9 113.9 100.9 26.7 140.6 127.6 1 Source: London Stock Exchange 2 Total returns to Shareholders include dividends paid 3 In the previous accounting period, the Company changed its financial yearfrom 31 January to 31 December. Consequently, comparative figures have beenincluded throughout the Report for the six month periods ending 30 June 2013and 31 July 2012. Chairman's Statement This Half-Yearly Report covers the six month period ended 30 June 2013. Net asset value (NAV) and total return to shareholders The net asset value per Share as at 30 June 2013 was 118.3 pencecompared with the previously reported NAV per Share of 117.3 pence as at thebeginning of the period. The Company's total return for the half-year (NAV basis) was 5.54%(2012: 2.15%), after allowing for the dividend of 5.5 pence per Share paid inthe period. The cumulative NAV total return per Share (being the closing netasset value plus total dividends paid to date) rose by 4.49% during the sixmonth period from 144.0 pence to 150.5 pence. This encouraging rise in NAVreturn over the period was largely due to unrealised gains across theportfolio, notably increases in the valuations of Tessella, Westway, Fullfield(Motorclean) and ATG Media. Interim Dividend The Company has declared an interim dividend totalling 2.0 penceper Share, of which 0.75 pence is capital and 1.25 pence is income. Investment portfolio Overall the portfolio recorded realised and unrealised gains of£2.1 million (9.60% of the opening value) during the first half of the yearand the portfolio was valued at £23.5 million at the period-end. During the period, the VCT invested a total of £3.21 million(including funds from the acquisition vehicles Almsworthy, Fosse and Peddars). Shortly after the period-end, in July 2013, the VCT completed afurther new investment of £1.62 million (including the VCT's existinginvestment of £1 million in the seed company, Madacombe Trading) to supportthe MBO of Veritek Global Limited, a Europe-wide provider of installation,maintenance and support services for large corporate owners of printingequipment. Net cash proceeds received during the period from portfoliorealisations amounted to £0.97 million, from 6 separate disposals. This figureincludes the partial divestment of Faversham House, and loan stock repaymentsreceived from Newquay Helicopters (previously British International),Tessella, Westway, Almsworthy and DiGiCo. Details of all these transactions and a summary of the performancehighlights in the portfolio can be found in the Manager's Review below. Revenue account and dividends The net revenue return for the period has achieved a good result,rising by £211,242 from £167,976 at the last half-year, to £379,218 for thishalf-year. This was mainly because income has risen by £280,372, primarily dueto a high level of loan interest of £107,412 from Newquay Helicopters,contributing to a total rise in loan stock interest of £206,887 for the halfyear, as the impact of new loan investments outweighed that of loanrepayments. Dividend income rose by £25,900 to £69,023 and income from cashbalances rose by a net amount of £47,585k, as more cash had been retained inbank deposits that paid higher rates last year. Running costs rose slightly as fund management fees charged torevenue rose by £14,736 due to rising net assets. Other costs reduced by£1,610, due to a reduction in printing costs, countered by a rise indirectors' fees, professional fees and trail commission costs. Cancellation of the share premium account Further to a special resolution passed on 22 February 2013, theCompany applied to the High Court to cancel the amount standing to the creditof its share premium account on 13 March 2013 of £13,858,090. The cancellationof the share premium account was confirmed by an Order of the Court on 13March 2013. Linked VCT fundraising The Company participated with Mobeus Income & Growth VCT plc andThe Income & Growth VCT plc in a successful linked fundraising that closed on30 April 2013. A total of £24.85 million (in excess of the original target of£21 million) was subscribed for under the Offer across the three VCTs, ofwhich £8.28 million was raised by the Company. Periodic fundraisings by theCompany enable it to maintain a consistent level of new cash to meet itsrunning costs, fund dividend payments and support the Company's share buy-backpolicy which helps to provide a degree of liquidity in the Company's Shares. Liquidity The Company has diversified its portfolio of cash investmentsduring the year as it is no longer adding to its investment in liquidity fundsin response to a change in VCT regulations. It continues to hold £6.52 millionin a selection of liquidity funds with AAA credit ratings at 30 June 2013. Thebalance of cash and current asset investments of £11.56 million is held ondeposit across a range of well-known financial institutions with a range ofmaturities. However, whilst UK banks are at a recovery stage, systemic riskremains. In addition, the £3 million invested in the Operating Partneracquisition vehicles was also held in liquidity funds (reduced to £2 millionfollowing the use of Madacombe to support the MBO of Veritek after theperiod-end). The Company is therefore well-positioned both to take advantageof favourable investment opportunities as they arise and, if required, to makeinvestments to support the existing portfolio. Investment in qualifying holdings The Company is required to meet the target set by HM Revenue &Customs ("HMRC") of investing at least 70% of the funds raised in qualifyingunquoted and AIM quoted companies. The Company exceeded this limit (based onVCT cost as defined in tax legislation which differs from the actual costgiven in the Investment Portfolio Summary below) throughout the period. Thebalance of the portfolio was invested in non-qualifying investments and cash. Enhanced buyback facility (EBF) The Company offered an EBF to Shareholders in January 2013 whichtook place during the period. A total of 5,902,280 Shares were bought-back inrespect of the tax years 2012/13 and 2013/14 (representing 19.52% of theShares in issue at the date of launch of the EBF) and 5,721,589 million newShares were allotted by the Company under the EBF. Share buy-backs During the six months ended 30 June 2013, the Company bought back afurther 363,951 of its own Shares, representing 1.27% of the issued sharecapital at the beginning of the period, at an average price, including costs,of £1.03 per Share. These Shares were purchased at an average discount of12.04% to NAV per Share. All of the Shares bought back in the period were subsequentlycancelled by the Company. Continuing Shareholders benefit from the differencebetween the NAV per Share and the price per Share at which the Shares arebought back and cancelled. Industry Developments The European Union's Alternative Investment Fund Managers Directive("AIFMD") came into force in the UK on 22 July 2013, with the effect thatinvestment companies will be subject to further regulatory oversight. Underthe Directive, the Company will be required to appoint an AIFM by 22 July2014. The Board is currently considering its options and will provideShareholders with any update on this matter in the Annual Report for the yearending 31 December 2013. Selling your Shares The Company's Shares are listed on the London Stock Exchange and assuch they can be sold in the same way as any other quoted company through astockbroker. However, to ensure that you obtain the best price, if you wish tosell your Shares you are strongly advised to contact the Company'sstockbroker, Panmure Gordon, by telephoning 020 7886 2716/7 before agreeing aprice with your stockbroker. Shareholders are also advised to discuss theirindividual tax position with their financial advisor before deciding to selltheir Shares. Auditor With effect from 28 March 2013, the Company's auditor, PKF (UK) LLPmerged with BDO LLP to become part of BDO LLP ("BDO"). The Board hassubsequently appointed BDO as the Company's auditor to fill the casual vacancyarising as a result of the merger. The Company wrote to Shareholders on 20June 2013 informing them of this change. The expense of this correspondencewas met by BDO. Communicating with shareholders May I remind you that the Company has its own website which isavailable at www.mig4vct.co.uk. The Company maintains a programme of regular communication withShareholders through newsletters and a dedicated website in addition to theCompany's Half-Yearly and Annual Reports. The Manager has established a Mobeuswebsite, www.mobeusequity.co.uk which is regularly updated with information onyour investments including case studies of portfolio companies and profiles ofthe investment team. The Company has its own dedicated section on the websitewhich includes performance tables, details of dividends paid and copies ofpast reports to Shareholders. The Company has adopted electronic communications which enablesShareholders to choose between electing to receive communications by email oras hard copies through the post. If you have not already done so, you are encouraged to registerwith Capita Registrar's Share Portal, on www.capitashareportal.com. The SharePortal provides the most efficient way of checking information on youraccounts, making changes to your instructions and allows you to manage youroptions for receiving communications from the Company including submittingproxy votes for general meetings. The Board welcomes the opportunity to meet Shareholders at theCompany's Annual General Meetings during which representatives of the Managerare present to discuss the progress of the portfolio. The next AGM of theCompany will be held in May 2014. Shareholder workshop - 21 January 2014 The Manager holds an annual VCT workshop forShareholders in central London. Each workshop includes a presentation on theMobeus VCTs' investment activity and performance. The Board and the Managerwelcome feedback from Shareholders and we have been pleased to receivepositive comments from those attending in previous years. The Manager hastaken many of the comments received on board as part of a process ofcontinuous improvement. The next workshop will be held on Tuesday, 21 January2014 at the Royal College of Surgeons in central London and Shareholders willreceive an invitation to this event nearer to the date. Industry awards for the Manager I reported in the Annual Report that the Managerhad been awarded VCT house of the year in 2012 at both the Investor Allstarsand unquote" British Private Equity Awards. Mobeus also was recently votedPrivate Equity House of the Year at the South West Insider Dealmakers Awards2013 by the corporate finance community. Outlook Whilst global quoted stock markets remain volatile and failure toaddress the UK government debt situation is still an issue, recent data on theUK economy appears to indicate that a degree of recovery is underway. Businesssurveys reveal cautious optimism in the corporate sector. The Manager is reporting a significant increase in the number ofquality opportunities being evaluated. The VCT has maintained strong liquidityover the period and it is therefore well-placed to take advantage of thisincreased dealflow. The Manager will nevertheless continue to adopt a rigorousapproach to selecting well-run profitable companies operating in niche marketsand specifically structuring the terms of deals so as to minimise the downsiderisk to Shareholders. We believe that this strategy underpins the quality ofthe investment portfolio currently held within the VCT. Finally, I would like to thank Shareholders for their continuingsupport. Christopher MooreChairman9 August 2013 Responsibility Statement In accordance with Disclosure and Transparency Rule (DTR) 4.2.10,Christopher Moore (Chairman), Andrew Robson (Chairman of the Audit Committeeand Remuneration and Nomination Committee) and Helen Sinclair (Chairman of theInvestment Committee), being the Directors of the Company confirm that to thebest of their knowledge: (a) the condensed set of financial statements, which has beenprepared in accordance with the statement, "Half-Yearly Reports", issued bythe Accounting Standards Board, gives a true and fair view of the assets,liabilities, financial position and profit of the Company, as required by DTR4.2.4; (b) the interim management report, included within the Chairman'sStatement, Investment Policy, Investment Manager's Review and the InvestmentPortfolio Summary includes a fair review of the information required by DTR4.2.7 being an indication of the important events that have occurred duringthe first six months of the financial year and their impact on the condensedset of financial statements; (c) a description of the principal risks and uncertainties facingthe Company for the remaining six months is set out below, in accordance withDTR 4.2.7; and (d) there were no related party transactions in the first sixmonths of the current financial year that are required to be reported, inaccordance with DTR 4.2.8. Principal risks and uncertainties In accordance with DTR 4.2.7, the Board confirms that the principalrisks and uncertainties facing the Company have not materially changed sincethe publication of the Annual Report and Accounts for the period ended 31December 2012. The Board acknowledges that there is regulatory risk andcontinues to manage the Company's affairs in such a manner as to comply withsection 274 Income Tax Act 2007. The principal risks faced by the Company are: - economic risk; - loss of approval as a Venture Capital Trust; - investment and strategic risk; - regulatory risk; - financial and operating risk; - market risk; - asset liquidity risk; - market liquidity risk; - credit/counterparty risk; and - fraud and dishonesty risk. A more detailed explanation of these risks can be found in theDirectors' Report on pages 19 - 23 and in Note 19 on pages 48 - 55 of theAnnual Report and Accounts for the period ended 31 December 2012, copies ofwhich are available on the Manager's website, www.mobeusequity.co.uk or bygoing to the VCT's website, www.mig4vct.co.uk. Going concern The Board has assessed the Company's operation as a going concern.The Company's business activities, together with the factors likely to affectits future development, performance and position are set out in the interimmanagement report which is included within the Chairman's Statement,Investment Policy, Investment Manager's Review and Investment PortfolioSummary. The Directors have satisfied themselves that the Company continues tomaintain a significant cash position, the majority of companies in theportfolio continue to trade profitably and the portfolio taken as a wholeremains resilient and well-diversified. The major cash outflows of the Company(namely investments, buy-backs and dividends) are within the Company'scontrol. The Board's assessment of liquidity risk and details of theCompany's policies for managing its capital and financial risks are shown inNote 19 on pages 48 - 55 of the Annual Report and Accounts for the periodended 31 December 2012. Accordingly, the Directors continue to adopt the goingconcern basis of accounting in preparing the half-yearly report and annualfinancial statements. Related Party Transactions There were no related party transactions in the first six months ofthe current financial year that are required to be reported. Cautionary Statement This report may contain forward looking statements with regards tothe financial condition and results of the Company, which are made in thelight of current economic and business circumstances. Nothing in this reportshould be construed as a profit forecast. On behalf of the Board Christopher MooreChairman9 August 2013 Investment Policy The Company's policy is to invest primarily in a diverse portfolioof UK unquoted companies. Investments are structured as part loan and partequity in order to receive regular income and to generate capital gains fromtrade sales and flotations of investee companies. Investments are made selectively across a number of sectors,primarily in management buyout transactions (MBOs) i.e. to support incumbentmanagement teams in acquiring the business they manage but do not yet own.Investments are primarily made in companies that are established andprofitable. The Company has a small legacy portfolio of investments incompanies from its period prior to 1 August 2006, when it was a multi-managerVenture Capital Trust ("VCT"). This includes investments in early stage andtechnology companies. Uninvested funds are held in cash and lower risk money marketfunds. UK companies The companies in which investments are made must have no more than£15 million of gross assets at the time of investment and £16 millionimmediately following the investment to be classed as a VCT qualifyingholding. VCT regulation The investment policy is designed to ensure that the Companycontinues to qualify and is approved as a VCT by HM Revenue & Customs("HMRC"). Amongst other conditions, the Company may not invest more than 15%of its investments in a single company and must have at least 70% by value ofits investments throughout the year in shares or securities comprised in VCTqualifying holdings, of which a minimum overall of 30% by value must beordinary shares which carry no preferential rights. In addition, although theCompany can invest less than 30% of an investment in a specific company inordinary shares, it must have at least 10% by value of its total investmentsin each VCT qualifying company in ordinary shares which carry no preferentialrights (save as may be permitted under VCT rules). The VCT regulations in respect of funds raised after 6 April 2011have changed such that 70% of qualifying holdings invested with such fundsmust be held in equity. Asset mix The Company initially holds its funds in a portfolio of readilyrealisable interest bearing investments and deposits. The investment portfolioof qualifying investments is built up over a three year period with the aim ofinvesting and maintaining at least 80% of net funds raised in qualifyinginvestments. Risk diversification and maximum exposures Risk is spread by investing in a number of different businessesacross different industry sectors. To reduce the risk of high exposure toequities, each qualifying investment is structured using a significantproportion of loan stock (up to 70% of the total investment in each VCTqualifying company). Initial investments in VCT qualifying companies aregenerally made in amounts ranging from £200,000 to £2 million at cost. Noholding in any one company will represent more than 10% of the value of theCompany's investments at the time of investment. Ongoing monitoring of eachinvestment is carried out by the Investment Manager, generally through takinga seat on the board of each VCT qualifying company. Co-investment Whilst the Board operates independently, in general the Companyaims to invest alongside the three other VCTs advised by the InvestmentManager with a similar investment policy. This enables the Company toparticipate in combined investments advised on by the Investment Manager of upto £5 million. Borrowing The Company has never borrowed and has no current plans toundertake any borrowing. Management The Board has overall responsibility for the Company's affairsincluding the determination of its investment policy. Investment anddivestment proposals are originated, negotiated and recommended by theInvestment Manager and are then subject to formal approval by the Board ofDirectors. Mobeus Equity Partners LLP also provides Company Secretarial andAccountancy services to the VCT. Manager's Review Overview The six month period to 30 June 2013 has been a period of strongperformance for many of the companies in the portfolio. We believe that this is a result of focussing on selectingwell-run, profitable companies operating in niche markets and structuringdeals to minimise downside risk to Shareholders. Portfolio review At 30 June 2013 the portfolio comprised 34 investments with a costof £21.8 million valued at £23.5 million. Overall, the portfolio has performedwell, achieving gains of £2.1 million over the last six months. Fullfield, ATG and Westway have contributed strongly to thisincrease in the overall value of the portfolio over the six month period. Allthree are trading well; in the cases of ATG and Fullfield the valuations havebenefitted from attractively-priced acquisitions made during the period and weare confident that these acquisitions will help in driving values up further.Westway has recovered well from a dip in trading in the prior year. Tessella, having made an encouraging start since the MBO in July2012, has now been valued on an earnings basis for the first time, which hasresulted in a significant uplift from cost. Blaze Signs has continued its impressive recovery having benefitedfrom some high profile contract gains, including work on the Olympics site in2012. DiGiCo has continued to grow, and has recently launched a new range ofproducts. Focus has begun to benefit from the high level of new productdevelopment expenditure over the past year. The valuation of EMaC hasincreased further above cost, reflecting this company's pleasing performancesince investment. Against these positive performances, CB Imports, whiletrading satisfactorily, is performing slightly below expectations. Thebuilding and construction sector remains weak, causing Youngman and PXP tofind it difficult to establish a solid path to recovery, although thevaluation of Plastic Surgeon is beginning to reflect signs of a recovery.RDL's performance remains disappointing. Taken as a whole, the portfolio is performing well and we areencouraged by the strong and resilient performances of those companies thatare outperforming expectations. Investment activity In March 2013, the Company completed a new investment of £1.48million, to support the MBO of Gro-Group Holdings Limited. The amount investedincluded £1 million from the Company's existing investment in the acquisitionvehicle Fosse Management. Devon based Gro-Group created the original, and nowinternationally renowned, Gro-bag, which has become the number one baby sleepbag brand in the UK and Australia. Market penetration of the product hasincreased from zero to around 90% since the company was founded in 2000 andturnover has grown to £12 million. Shortly after the period-end in July 2013, the VCT completed afurther new investment of £1.62 million (including the VCT's existinginvestment of £1 million in the seed company, Madacombe Trading) to supportthe MBO of Veritek Global Limited, a Europe-wide provider of installation,maintenance and support services for blue-chip owners of printing equipment. As mentioned earlier, the VCT has funded strategic acquisitions byFullfield and ATG Media in the period. Both transactions have improved thetrading position of these companies and offer good potential for furthergrowth. In February 2013, the VCT provided an additional £0.68 million, viathe acquisition vehicle Almsworthy Trading, to finance Fullfield's (trading asMotorclean) acquisition of Forward Valeting Services. The transaction createdthe UK's largest provider of car valeting services and brought the VCT's totalinvestment in this company to £1.79 million. In April 2013, a further £1 million was invested into ATG Media,using the VCT's existing investment of £1 million in the acquisition vehiclePeddars Management, to enable it to acquire Bidspotter Inc., a US businessengaged in providing live bidding and auction software to industrial andcommercial liquidation auctioneers, bringing the VCT's total investment inthis company to £1.9 million. These transactions were specifically structured to enhance thevalue of existing successful investments. We are conscious that a materiallylower investment risk is likely to be involved when we back what we know aresuccessful management teams within the portfolio, compared to a firstinvestment into a new portfolio company. A further loan of £41,912 was advanced to support the workingcapital requirements of Newquay Helicopters (2013) Limited (formerly BritishInternational Holdings Limited). This was used to provide working capitalpending the disposal of the company's major trading subsidiary which has nowoccurred. The company has now repaid the principal and premium of the firsttwo loan stocks, together with all premia and interest arrears for total cashproceeds of £429,997. The capital proceeds of £323,110 compare with aninvestment cost of £238,955. This is a pleasing outcome and there is theprospect of further returns of capital as the company realises its remainingassets and activities. In March 2013, the VCT sold part of its loan stock and its entireequity investment in Faversham House for net proceeds of £136,132. Faversham'sprogress has fallen short of expectations and we took the opportunity to agreewith management a phased realisation of our holding. The Company continues tohold a loan stock investment in this company, valued at 30 June 2013 at£102,906. The total of these figures, £239,038, when compared with the totaloriginal cost of £346,488, shows a loss. However, this partial disposal was inexcess of the valuation of Faversham House at the beginning of the period andhas contributed to the increase in the portfolio's value at the period end. The Company has continued to benefit from the profitability andstrong cash position of a number of investee companies and has receivedpartial loan stock repayments totalling £638,558 in the six months covered bythis report, from DiGiCo, Tessella and Westway, and the partial realisationsof Newquay Helicopters and Faversham House mentioned above. Outlook The outlook for the UK economy appears to have improved recently,with a greater sense of optimism starting to assert itself. The overallenvironment still holds uncertainties, but we are experiencing many more goodquality opportunities for new investment. We are much more confident ofdeploying higher levels of capital into new investments in 2013 than inprevious years. The majority of our existing portfolio companies, which arewell-financed and have competitive advantages in their market niches, shouldcontinue to make good progress. We are encouraged by the portfolio's performance over the six monthperiod to 30 June 2013. Combined with a higher level of investment in newopportunities, we are optimistic that performance should be able to besustained and that the portfolio will yield good returns over the medium term. Mobeus Equity Partners LLP 9 August 2013 Investment Portfolio Summary at 30 June 2013 Total Total Total % of % of cost valuation valuation equity portfolio at 30-Jun-13 at 31-Dec-12 at 30-Jun-13 held by valueMobeus EquityPartners LLP £ £ £ ATG Media HoldingsLimited 1,889,006 2,321,815 3,714,081 8.53% 15.81%Publisher andonline auctionplatform operator Fullfield Limited,trading as MotorcleanLimited 1,793,231 1,246,959 2,247,325 9.82% 9.56%Vehicle cleaningand valet services Ingleby (1879)Limited, tradingas EMaC Limited 1,263,817 1,608,925 1,758,090 6.32% 7.48%Provider of serviceplans for themotor trade Tessella HoldingsLimited 1,214,005 1,250,433 1,622,913 5.44% 6.91%Consultancy DiGiCo GlobalLimited 1,250,206 1,698,883 1,586,249 2.39% 6.75%Design andmanufacture ofaudio mixing desks Gro-Group HoldingsLimited 1,484,302 - 1,484,302 8.39% 6.32%Manufacturer ofsafer sleep solutionsfor babies andyoung children CB Imports GroupLimited 1,000,000 1,215,002 1,159,355 5.79% 4.93%Importer and distributorof artificial flowers,floral sundries andhome decor products Focus Pharma Holdings Limited 605,837 942,787 1,053,293 3.14% 4.48%Licensor anddistributor of genericpharmaceuticals EOTH Limited 951,471 974,934 1,010,222 1.71% 4.30%Branded outdoorequipment andclothing Ackling ManagementLimited 1,000,000 1,000,000 1,000,000 12.50% 4.26%Company lookingto acquire businessesin the foodmanufacturing,distribution andbrand managementsectors Culbone Trading Limited 1,000,000 1,000,000 1,000,000 12.50% 4.26%Company looking toacquire businessesin the outsourcedservices sectors Madacombe TradingLimited 1,000,000 1,000,000 1,000,000 12.50% 4.26%Company looking toacquire businessesin the engineeringservices sectors Westway ServicesHoldings (2010)Limited 190,335 519,434 741,801 3.15% 3.16%Installation,maintenance andservicing of air-conditioning systems RDL CorporationLimited 1,000,000 723,122 620,136 9.05% 2.64%Recruitmentconsultants forthe pharmaceutical,business intelligenceand IT industries ASL TechnologyHoldings Limited 1,257,133 495,469 535,052 6.78% 2.28%Printer andphotocopierservices Blaze SignsHoldings Limited 283,252 432,861 514,736 5.72% 2.19%Manufacturer andinstaller of signs Plastic SurgeonHoldings Limited 458,837 331,325 438,209 6.88% 1.86%Snagging and finishingof domestic andcommercial properties Youngman GroupLimited 500,026 349,983 349,983 4.24% 1.49%Manufacturer ofladders and accesstowers Omega Diagnosticsplc 199,998 266,664 274,997 1.53% 1.17%In-vitro diagnosticsfor food intolerance,autoimmune diseasesand infectious diseases MachineworksSoftware Limited 9,329 239,052 273,477 4.20% 1.16%Software for CAMand machine toolvendors Higher NatureLimited 500,127 174,101 168,915 10.34% 0.72%Supplier of mineral,vitamin and foodsupplements Duncary 8 Limited(formerly Duncary4/BG ConsultingLimited) 101,995 130,307 118,150 5.10% 0.50%Technical trainingbusiness Faversham HouseHoldings Limited 102,906 79,560 102,906 0.00% 0.44%Publisher, exhibitionorganiser and operatorof web sites for theenvironmental, visualcommunications andbuilding servicessectors Newquay Helicopters(2013) Limited(formerly BritishInternationalHoldings Limited) 98,412 295,455 98,412 2.50% 0.42%Operator of helicopterservices Racoon InternationalHoldings Limited 406,805 94,890 93,947 5.70% 0.40%Supplier of hairextensions, hair careproducts and training Vectair HoldingsLimited 24,732 81,966 85,930 2.14% 0.37%Designer and distributorof washroom products Monsal HoldingsLimited 699,444 63,431 63,431 8.47% 0.27%Supplier of engineeringservices to water andwaste sectors Lightworks SoftwareLimited 9,329 36,530 53,390 4.20% 0.23%Software for CADvendors PXP Holdings Limited(PinewoodStructures) 712,925 15,687 15,687 4.39% 0.07%Designer, manufacturerand supplier of timberframes for buildings Watchgate Limited 1,000 - - 33.33% 0.00%Holding company Legion Group plc -in administration 150,102 - - - 0.00%Provider of mannedguarding, patrollingand alarm responseservices Almsworthy TradingLimited - 1,000,000 - - 0.00%Company looking toacquire businesses inthe specialistconstruction, buildingsupport, buildingproducts and relatedservices sectors Fosse ManagementLimited - 1,000,000 - - 0.00%Company looking toacquire businesses inthe brand management,consumer products andretail sectors Peddars ManagementLimited - 1,000,000 - - 0.00%Company looking toacquire businesses inthe databasemanagement, mapping,data mapping andmanagement servicesto legal and buildingindustry sectors Total 21,158,562 21,589,575 23,184,989 - 98.69% Former ElderstreetPrivate EquityLimited Portfolio Cashfac Limited 260,101 184,074 243,006 2.91% 1.03%Provider of virtualbanking applicationsoftware Sparesfinder Limited 250,854 60,054 68,800 1.71% 0.28%Supplier of industrialspare parts on-line Sift Limited 135,391 4,464 - 1.28% 0.00%Developer of businessto business internetcommunities Total 646,346 248,592 311,806 1.31% Investment Manager'stotals 21,804,908 21,838,167 23,496,795 100.00% Unaudited Income Statement for the six months ended 30 June 2013 Six months ended Six months ended 11 months ended 30 June 2013 31 July 2012 31 December 2012 (unaudited) (unaudited) (audited) Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ £ £ £ Unrealisedgains oninvestmentsheld at fairvalue 8 - 1,916,779 1,916,779 - 395,733 395,733 - 1,300,844 1,300,844 Realisedgains oninvestmentsheld at fairvalue 8 - 178,802 178,802 - 241,163 241,163 - 278,802 278,802 Income 2 774,873 - 774,873 494,501 - 494,501 973,259 - 973,259 Investmentmanagementexpense 3 (110,079) (330,236) (440,315) (95,343) (286,029) (381,372) (175,825) (527,475) (703,300) Otherexpenses (198,359) - (198,359) (199,969) - (199,969) (362,512) - (362,512) Profit onordinaryactivitiesbeforetaxation 466,435 1,765,345 2,231,780 199,189 350,867 550,056 434,922 1,052,171 1,487,093 Tax on profiton ordinaryactivities 4 (87,217) 87,217 - (31,213) 31,213 - (75,182) 75,182 - Profitattributableto equityShareholders 379,218 1,852,562 2,231,780 167,976 382,080 550,056 359,740 1,127,353 1,487,093 Basic anddilutedearnings perOrdinaryShare 5 1.17p 5.69p 6.86p 0.60p 1.38p 1.98p 1.27p 3.99p 5.26p The total column of this statement is the profit and loss account of theCompany. All revenue and capital items in the above statement derive from continuingoperations. There were no other recognised gains or losses in the period. Other than revaluation movements arising on investments held at fair valuethrough profit and loss there were no differences between the profit as statedabove and at historical cost. Unaudited Balance Sheet as at 30 June 2013 30 June 2013 31 July 2012 31 December 2012 (unaudited) (unaudited) (audited) Notes £ £ £ Fixed assetsInvestments at fairvalue 8 23,496,795 21,290,791 21,838,167 Current assetsDebtors andprepayments 411,679 143,343 214,166Current Investments 9 14,271,540 9,032,105 9,020,144Cash at bank 3,812,235 2,852,298 2,645,938 18,495,454 12,027,746 11,880,248 Creditors: amountsfalling due withinone year (313,327) (381,349) (181,144) Net current assets 18,182,127 11,646,397 11,699,104 Net assets 41,678,922 32,937,188 33,537,271 Capital and reserves 10Called up share capital 352,387 289,188 285,895Share premiumreserve 13,279,574 12,004,600 12,004,600Capital redemptionreserve 967,721 901,765 905,059Revaluation reserve 3,543,394 696,873 1,529,402Special distributablereserve 18,587,976 13,017,890 12,501,764Profit and loss account 4,947,870 6,026,872 6,310,551 Equity Shareholders'funds 41,678,922 32,937,188 33,537,271 Net asset valueper Ordinary Share 7 118.28p 113.90p 117.31p Unaudited Reconciliation of Movements in Shareholders' Funds for the six months ended 30 June 2013 11 months Six months Six months ended 31 ended 30 June ended 31 July December Notes 2013 2012 2012 (unaudited) (unaudited) (audited) £ £ £ Opening Shareholders' Funds 33,537,271 29,418,665 29,418,665Net share capitalsubscribed 15,262,218 5,201,859 5,201,860Net share capital boughtback (7,428,019) (780,873) (1,117,828)Profit for the period 2,231,780 550,056 1,487,093Dividends paid in period 6 (1,924,328) (1,452,519) (1,452,519)Closing Shareholders' funds 41,678,922 32,937,188 33,537,271Unaudited Summarised Cash Flow Statement for the six months ended 30 June 2013 Six months ended Six months ended 11 months ended 30 June 2013 31 July 2012 31 December 2012 (unaudited) (unaudited) (audited) £ £ £Interest income received 617,145 497,491 865,212Dividend income 59,152 64,965 136,504Other income - - 7,264Investment managementfees paid (375,235) (381,371) (768,379)Cash payments forother expenses (112,750) (231,812) (321,248)Net cash inflow/(outflow)from operating activities 188,312 (50,727) (80,647) Investing activitiesSale of investments 963,180 1,632,865 2,028,239Purchase of investments (526,227) (4,307,298) (4,307,298)Net cash inflow/(outflow)from investing activities 436,953 (2,674,433) (2,279,059) DividendsEquity dividends paid (1,924,328) (1,452,519) (1,452,519) Cash outflow beforefinancing and liquidresource management (1,299,063) (4,177,679) (3,812,225) Management of liquidresourcesIncrease in monies heldin money market funds (5,251,396) (148,840) (136,879) FinancingShare capital subscribed 8,168,986 5,201,859 5,201,860Purchase of own Shares (348,483) (534,052) (1,117,828)Shares issued as partof Enhanced BuybackFacility 6,923,372 - -Shares bought back aspart of Enhanced BuybackFacility (including expenses) (7,027,119) - -Cash inflow from financing 7,716,756 4,667,807 4,084,032 Increase in cash 1,166,297 341,288 134,928 Increase in cash forthe period 1,166,297 341,288 134,928Net funds at the startof the period 2,645,938 2,511,010 2,511,010Net funds at the endof the period 3,812,235 2,852,298 2,645,938 Reconciliation of profit on ordinary activities before taxation to net cashinflow/(outflow) from operating activities for the six months ended 30 June 2013 Six months ended Six months ended 11 months ended 30 June 2013 31 July 2012 31 December 2012 (unaudited) (unaudited) (audited) £ £ £Profit on ordinaryactivities before taxation 2,231,780 550,056 1,487,093Net unrealised gainson investments (1,916,779) (395,733) (278,802)Net gains on realisationsof investments (178,802) (241,163) (1,300,844)(Increase)/decrease indebtors (27,654) 48,632 (22,191)Increase/(decrease) increditors 79,767 (12,519) 34,097Net cash inflow/(outflow)from operating activities 188,312 (50,727) (80,647)Notes to the Unaudited Financial Statements 1. Principal accounting policies The following accounting policies have been applied consistently throughoutthe period. Full details of principal accounting policies will be disclosed inthe Annual Report. a) Basis of accounting The unaudited results cover the six months to 30 June 2013 and have beenprepared under UK Generally Accepted Accounting Practice (UK GAAP), consistentwith the accounting policies set out in the statutory accounts for the 11months ended 31 December 2012 and the 2009 Statement of Recommended Practice,`Financial Statements of Investment Trust Companies and Venture CapitalTrusts' ('the SORP') issued by the Association of Investment Companies. b) Comparatives In the previous accounting period, the Company changed its financial year endto 31 December, and therefore the comparatives to these financial statementsand notes to the accounts relate to the eleven month period to 31 December2012. The comparatives for the six months ended 31 July 2012 have not beenre-stated. c) Presentation of the Income Statement In order to better reflect the activities of a VCT and in accordance with theSORP, supplementary information which analyses the Income Statement betweenitems of a revenue and capital nature has been presented alongside the IncomeStatement. The revenue column of profit attributable to equity Shareholders isthe measure the Directors believe appropriate in assessing the Company'scompliance with certain requirements set out in Section 274 Income Tax Act2007. d) Investments All investments held by the Company are classified as "fair value throughprofit and loss", and measured in accordance with the International PrivateEquity and Venture Capital Valuation ("IPEVCV") guidelines, as updated inSeptember 2009. This classification is followed as the Company's business isto invest in financial assets with a view to profiting from their total returnin the form of capital growth and income. For investments actively traded in organised financial markets, fair value isgenerally determined by reference to Stock Exchange market quoted bid pricesat the close of business on the balance sheet date. Purchases and sales ofquoted investments are recognised on the trade date where a contract of saleexists whose terms require delivery within a time frame determined by therelevant market. Purchase and sales of unlisted investments are recognisedwhen the contract for acquisition or sale becomes unconditional. Unquoted investments are stated at fair value by the Directors in accordancewith the following rules, which are consistent with the IPEVCV guidelines: All investments are held at the price of a recent investment for anappropriate period where there is considered to have been no change in fairvalue. Where such a basis is no longer considered appropriate, the followingfactors will be considered: (i) Where a value is indicated by a material arms-length transaction by anindependent third party in the Shares of a company, this value will be used. (ii) In the absence of i), and depending upon both the subsequent tradingperformance and investment structure of an investee company, the valuationbasis will usually move to either:- a) an earnings multiple basis. The Shares may be valued by applying a suitableprice-earnings ratio to that company's historic, current or forecast post-taxearnings before interest and amortisation (the ratio used being based on acomparable sector but the resulting value being adjusted to reflect points ofdifference identified by the Investment Manager compared to the sectorincluding, inter alia, a lack of marketability). or:- b) where a company's underperformance against plan indicates a diminution inthe value of the investment, provision against cost is made, as appropriate.Where the value of an investment has fallen permanently below cost, the lossis treated as a permanent impairment and as a realised loss, even though theinvestment is still held. The Board assesses the portfolio for suchinvestments and, after agreement with the Investment Manager, will agree thevalues that represent the extent to which an investment loss has becomerealised. This is based upon an assessment of objective evidence of thatinvestment's future prospects, to determine whether there is potential for theinvestment to recover in value. (iii) Premiums on loan stock investments are accrued at fair value when theCompany receives the right to the premium and when considered recoverable. (iv) Where an earnings multiple or cost less impairment basis is notappropriate and overriding factors apply, discounted cash flow or net assetvaluation bases may be applied. Capital gains and losses on investments, whether realised or unrealised, aredealt with in the profit and loss and revaluation reserves and movements inthe period are shown in the Income Statement. 2. Income Six months ended Six months ended 11 months ended 30 June 2013 31 July 2012 31 December 2012 (unaudited) (unaudited) (audited)Income from investments £ £ £ Dividends 69,023 43,123 93,274Money-market funds 12,493 21,917 37,099Loan stock interest 616,071 409,184 783,053Bank deposit interest 77,286 20,277 52,568Other Income - - 7,265 Total Income 774,873 494,501 973,259 3. Investment management expense In accordance with the policy statement published under "Management andAdministration" in the Company's prospectus dated 8 February 1999, theDirectors have charged 75% of the investment management expenses to thecapital account. This is in line with the Board's expectation of the long-termsplit of returns from the investment portfolio of the Company. 4. Taxation There is no tax charge for the period as the Company has tax losses from thecurrent year and from previous periods, both of which can be offset betweenrevenue and capital. 5. Basic and diluted earnings per Share The basic earnings, revenue return and capital return per Share shown belowfor each period are respectively based on numerators i)-iii), each divided bythe weighted average number of Shares in issue in the period - see iv) below Six months ended Six months ended 11 months ended 30 June 2013 31 July 2012 31 December 2012 (unaudited) (unaudited) (audited) £ £ £ i) Total earnings after 2,231,780 550,056 1,487,093taxationBasic and diluted 6.86p 1.98p 5.26pearnings per OrdinaryShare (pence) ii) Revenue earnings 379,218 167,976 359,740from ordinaryactivitiesafter taxationBasic and diluted 1.17p 0.60p 1.27prevenue earningsper Ordinary Share(pence) Net unrealised 1,916,779 395,733 1,300,844capital gainsNet realised 178,802 241,163 278,802capital gainsCapital expenses (243,019) (254,816) (452,293)net of taxationiii) Capital return 1,852,562 382,080 1,127,353Basic and diluted 5.69p 1.38p 3.99pcapital earningsper OrdinaryShare (pence) iv) Weighted average 32,541,370 27,809,710 28,266,790number of Shares inissue in the period 6. Dividends paid Six months ended Six months ended 11 months ended 30 June 2013 31 July 2012 31 December 2012 (unaudited) (unaudited) (audited) £ £ £Interim income dividend for theyearended 31 January 2012 of 1.5penceper Ordinary Share paid 6 June2012 - 435,756 435,756Interim capital dividend forthe yearended 31 January 2012 of 3.5penceper Ordinary Share paid 6 June2012 - 1,016,763 1,016,763Interim income dividend for theperiod ended 31 December 2012of1 pence per Ordinary Share paid10May 2013 349,877 - -Interim capital dividend forthe periodended 31 December 2012 of 4.5pence per Ordinary Share paid10May 2013 1,574,451 - - 1,924,328* 1,452,519* 1,452,519* * - Of these amounts £246,310 (31 July 2012: £164,418; 31 December 2012:£164,418) were issued in new Shares, issued as part of the DividendRe-Investment Scheme. 7. Net asset value per Ordinary Share As at As at As at 30 June 2013 31 July 2012 31 December 2012 (unaudited) (unaudited) (audited) £ £ £Net assets 41,678,922 32,937,188 33,537,271Number of Shares in issue 35,238,721 28,918,840 28,589,452 Net asset value perShare (pence) 118.28p 113.90p 117.31p 8. Summary of fixed asset investments at fair value during the period Traded Unquoted Unquoted Loan Stock Total on AIM equity preference shares shares £ £ £ £ £ Valuation at 31December 2012 266,664 7,295,599 14,162 14,261,742 21,838,167Purchases at cost - - - 526,227 526,227Reclassificationat value - (993,496) 669 992,827 -Sales - proceeds - (14,368) - (955,422) (969,790)- realised gains - 14,368 - 171,044 185,412Unrealised gains 8,333 1,570,259 - 338,187 1,916,779Valuation at 30 June 2013 274,997 7,872,362 14,831 15,334,605 23,496,795 Book cost at 30 June 2013 199,998 6,564,234 23,782 15,016,894 21,804,908Unrealised gains/(losses) at30 June 2013 74,999 1,627,447 (7,883) 601,016 2,295,579Permanent impairment ofinvestments - (319,319) (1,068) (283,305) (603,692)Valuation at 30 June 2013 274,997 7,872,362 14,831 15,334,605 23,496,795 (Losses)/gains oninvestments - (117,097) - 205,296 88,199Less amounts recognised asunrealised (losses)/gains inprevious years - (131,465) - 34,252 (97,213)Realised gains basedon carrying value at31 December 2012 - 14,368 - 171,044 185,412 Net movement in unrealisedappreciation in the period 8,333 1,570,259 - 338,187 1,916,779 Gains on investments forthe six months ended 30June 2013 8,333 1,584,627 - 509,231 2,102,191 Transaction costs of £6,610 were incurred in the period and are deducted inarriving at realised gains on investments in the Income Statement. Deductingthese from realised gains above gives £178,802 of gains as shown in the IncomeStatement. These transaction costs also explain the difference betweenproceeds above of £969,790 and that shown in the Cash Flow Statement of£963,180. Unrealised gains/(losses) at 30 June 2013 of £2,295,579 differ to that shownin the Revaluation Reserve of £3,543,394. The difference of £1,247,815 is loanstock received (net of £84,087 repayment made during the period) as part ofthe disposal of DiGiCo Europe Limited in December 2011 which was notrecognised as a realised gain in that year. 9. Current investments at fair value These comprise investments of £6,521,540 in six OEIC money market funds (fiveDublin based and one London based) subject to immediate access, and £7,750,000in four bank deposit or money market accounts, repayable within one year. 10. Capital and Reserves Called up Share Capital Special Profit and share Premium redemption Revaluation distributable loss capital account reserve reserve reserve reserve Total £ £ £ £ £ £ £ At 1 January2013 285,895 12,004,600 905,059 1,529,402 12,501,764 6,310,551 33,537,271 Shares issued viaLinked Offerfor Subscription 69,513 8,023,023 - - - - 8,092,536 Dividends re-invested intonew shares 2,425 243,885 - - - - 246,310 Sharesissued underEnhancedBuybackFacility(note a) 57,216 6,866,156 - - - - 6,923,372 Sharesbought backunderEnhancedBuybackFacility (notea) (59,023) - 59,023 - (7,054,296) - (7,054,296) Sharesbought back (3,639) - 3,639 - (373,723) - (373,723) Cancellationof the sharepremiumaccount(note b) - (13,858,090) - - 13,858,090 - - Profit forthe period - - - 1,916,779 - 315,001 2,231,780 Realisedlossestransferred tospecialreserve - - - - (343,859) 343,859 - Realisation ofpreviouslyunrealisedappreciation - - - 97,213 - (97,213) - Dividendspaid - - - - - (1,924,328) (1,924,328) At 30 June2013 352,387 13,279,574 967,721 3,543,394 18,587,976 4,947,870 41,678,922 Note a: Within this figure are the expenses of the Enhanced Buyback Facility('EBF') of £130,924. These costs are borne by those Shareholders whoparticipated in the EBF. No fees were charged by the Manager. As part of the EBF transaction on 4 April 2013, 4,366,277 Ordinary Shares werebought back at a price of 117.3 pence per Share and immediately following this4,232,601 Ordinary shares were allotted at 121.0 pence per Share. On 8 April 2013, again as part of the EBF transaction, 1,536,003 OrdinaryShares were bought back at a price of 117.3 pence per Share and immediatelyfollowing this, 1,488,988 new Ordinary shares were allotted at 121.0 pence perShare. Note b: The cancellation of £13,858,090 from the share premium account (asapproved at the General Meeting held on 22 February 2013 and by order of theCourt dated 13 March 2013) has increased the Company's special distributablereserve. The purpose of this reserve is to fund market purchases of theCompany's own Shares, and to write off existing and future losses. As part of the 2013 Linked Offer for Subscription, a total of 6,951,240Ordinary Shares were allotted at prices ranging from 115.6 pence to 124.2pence per Share, raising net funds of £8,092,536. 11. Post balance sheet events On 26 July 2013, the Company made an investment of £1,620,086 to support themanagement buy out of Veritek Global Limited, using the Company's existinginvestment of £1m in the acquisition vehicle Madacombe Trading Limited and anadditional £620,086 from its cash reserves. 12. Statutory Information The financial information for the period ended 30 June 2013 does not comprisefull financial statements within the meaning of Section 435 of the CompaniesAct 2006. The financial statements for the 11 months ended 31 December 2012have been filed with the Registrar of Companies. The auditor has reported onthese financial statements and that report was unqualified and did not containa statement under section 498(2) of the Companies Act 2006. 13. Half-Yearly Report This Half-Yearly Report will shortly be made available on our website:www.mig4vct.co.uk and will be circulated by post to those Shareholders whohave requested copies of the Report. Further copies are available free ofcharge from the Company's registered office, 30 Haymarket, London SW1Y 4EX orcan be downloaded via the website. Contact details for further enquiries: Robert Brittain or Elizabeth Birch at Mobeus Equity Partners LLP(the Company Secretary) on 020 7024 7600 or by e-mail onmig4@mobeusequity.co.uk Mark Wignall or Mike Walker at Mobeus Equity Partners LLP (theInvestment Manager), on 020 7024 7600 or by e-mail on info@mobeusequity.co.uk. DISCLAIMER Neither the contents of the Company's website nor the contents of any websiteaccessible from hyperlinks on the Company's website (or any other website) isincorporated into, or forms part of, this announcement.