Regulatory Filings • Nov 12, 2010
Regulatory Filings
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THIS DOCUMENT CONSTITUTES A REGISTRATION DOCUMENT ("THE REGISTRATION DOCUMENT") ISSUED BY MATRIX INCOME & GROWTH VCT PLC ("MIG") , MATRIX INCOME & GROWTH 4 VCT PLC ("MIG 4") AND THE INCOME & GROWTH VCT PLC ("I&G") (TOGETHER "THE COMPANIES" AND EACH "A COMPANY") DATED 12 NOVEMBER 2010.
THIS DOCUMENT HAS BEEN PREPARED FOR THE PURPOSES OF COMPLYING WITH THE PROSPECTUS DIRECTIVE, ENGLISH LAW AND THE RULES OF THE UKLA AND THE INFORMATION DISCLOSED MAY NOT BE THE SAME AS THAT WHICH WOULD BE DISCLOSED IF THIS DOCUMENT HAD BEEN PREPARED IN ACCORDANCE WITH THE LAWS OF A JURISDICTION OUTSIDE ENGLAND. ADDITIONAL INFORMATION RELATING TO THE COMPANIES IS CONTAINED IN A SECURITIES NOTE ISSUED BY THE COMPANIES ("THE SECURITIES NOTE"). A BRIEF SUMMARY WRITTEN IN NON-TECHNICAL LANGUAGE CONVEYING THE ESSENTIAL CHARACTERISTICS OF AND RISKS ASSOCIATED WITH THE COMPANIES AND THE ORDINARY SHARES OF 1 PENCE EACH IN THE CAPITAL OF MIG ("MIG SHARES"), ORDINARY SHARES OF 1 PENCE EACH IN THE CAPITAL OF MIG 4 ("MIG 4 SHARES") AND ORDINARY SHARES OF 1 PENCE EACH IN THE CAPITAL OF I&G ("I&G SHARES"), ("SHARES") WHICH ARE BEING OFFERED FOR SUBSCRIPTION ("OFFER SHARES") ("THE OFFER") IS CONTAINED IN A SUMMARY ISSUED BY THE COMPANIES ("THE SUMMARY"). THE REGISTRATION DOCUMENT, THE SECURITIES NOTE AND THE SUMMARY HAVE BEEN PREPARED IN ACCORDANCE WITH THE PROSPECTUS RULES MADE UNDER FSMA AND HAVE BEEN APPROVED BY THE FINANCIAL SERVICES AUTHORITY ("FSA") IN ACCORDANCE WITH FSMA.
THIS REGISTRATION DOCUMENT, THE SECURITIES NOTE AND THE SUMMARY TOGETHER COMPRISE A PROSPECTUS ISSUED BY THE COMPANIES DATED 12 NOVEMBER 2010 ("THE PROSPECTUS"). THE PROSPECTUS HAS BEEN FILED WITH THE FSA IN ACCORDANCE WITH THE PROSPECTUS RULES AND YOU ARE ADVISED TO READ THE PROSPECTUS IN FULL.
The Companies and the Directors (whose names are set out on page 5) accept responsibility for the information contained in this Registration Document. To the best of the knowledge of the Companies and the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Registration Document is in accordance with the facts and does not omit anything likely to affect the import of such information.
to raise in aggregate up to £21,000,000
by way of an issue of Offer Shares
Registered in England and Wales under number 05153931
Registered in England and Wales under number 03707697
Registered in England and Wales under number 04069483
In connection with the Offer, Charles Stanley, a division of Charles Stanley & Co Limited, the sponsor to the Offer, is acting for the Companies and no-one else and will not be responsible to anyone other than the Companies for providing the protections afforded to customers of Charles Stanley (subject to the responsibilities and liabilities imposed by FSMA and the regulatory regime established thereunder) in providing advice in relation to the Offer. Charles Stanley is authorised and regulated in the United Kingdom by the FSA.
In connection with the Offer, Matrix Private Equity Partners LLP ("Matrix"), the promoter of the Offer, is acting for the Companies and no-one else and will not be responsible to anyone other than the Companies for providing the protections afforded to customers of Matrix, nor for providing advice in relation to the Offer. Matrix is authorised and regulated in the United Kingdom by the FSA.
Application has been made to the UK Listing Authority for the Offer Shares to be admitted to the Official List and to the London Stock Exchange plc for such Offer Shares to be admitted to trading on its market for listed securities. It is expected that admission to the Official List will become effective and that dealings in the Offer Shares will commence three Business Days following allotment. The Companies' existing issued Shares are traded on the London Stock Exchange's main market for listed securities.
Copies of this Registration Document, the Securities Note and the Summary (and any supplementary prospectus published by the Companies) are available free of charge from the promoter of the Offer:
| Matrix Private Equity Partners LLP | telephone: 020 3206 7000 |
|---|---|
| One Vine Street, | download: www.matrixvcts.co.uk |
| London W1J 0AH | email: [email protected] |
| RISK FACTORS 3 |
|---|
| CORPORATE INFORMATION FOR THE COMPANIES 5 |
| DEFINITIONS6 |
| THE DIRECTORS AND MATRIX8 |
| MEMORANDA AND ARTICLES12 |
| PART I – MIG 21 |
| (A) General information 21 |
| (B) Analysis of the investment portfolio 33 |
| (C) Financial information 34 |
| PART II – MIG 4 36 |
| (A) General information 36 |
| (B) Analysis of the investment portfolio 47 |
| (C) Financial information 48 |
| PART III – I&G50 |
| (A) General information 50 |
| (B) Analysis of the investment portfolio 62 |
| (C) Financial information 63 |
| PART IV – LARGEST INVESTMENTS OF THE COMPANIES66 |
| PART V – DOCUMENTS AVAILABLE FOR INSPECTION76 |
Existing and prospective investors should consider carefully the following risk factors in addition to the other information presented in this document and the Prospectus as a whole. If any of the risks described below were to occur, it could have a material effect on the Companies' businesses, financial condition or results of operations. The risks and uncertainties described below are not the only ones the Companies, the Boards or investors in the Shares will face. Additional risks not currently known to the Companies or the Boards, or that the Companies or the Boards currently believe are not material, may also adversely affect the Companies' businesses, financial condition and results of operations. The value of the Shares could decline due to any of these risk factors described below, and investors could lose part or all of their investment. Investors should consult an independent financial adviser authorised under FSMA. The attention of prospective investors is drawn to the following risks.
The value of Shares, and the income from them, can fluctuate and investors may not get back the amount they invested. In addition, there is no certainty that the market price of the Shares will fully reflect the underlying net asset value, nor should investors rely upon any Share buy-back policy to offer any certainty of selling their Shares at prices that reflect the underlying NAV. In addition, there is no guarantee that dividends will be paid by the Companies or that any dividend objective stated will be met.
Although the existing Shares issued by the Companies have been (and it is anticipated that the Offer Shares in the Companies to be issued pursuant to the Offer will be) admitted to the Official List of the UK Listing Authority and (or will be) traded on the London Stock Exchange market for listed securities, the secondary market for VCT shares is generally illiquid and, therefore, there may not be a liquid market (which may be partly attributable to the fact that initial tax reliefs are not available for VCT shares generally bought in the secondary market and because VCT shares usually trade at a discount to NAV) and investors may find it difficult to realise their investment. Investment in the Companies should be seen as a long term investment.
The past performance of the Companies, other funds managed by Matrix, the investment manager to the Companies, and Matrix itself is no indication of future performance. The return received by investors will be dependent on the performance of the underlying investments. The value of such investments, and interest income and dividends therefrom, may rise or fall.
Although a Company may receive customary venture capital rights in connection with its investments, as a minority investor it may not be in a position to protect its interests fully.
A Company's investments may be difficult, and take time, to realise. There may also be constraints imposed on the realisation of investments in order to maintain the VCT tax status of a Company.
It can take a period of years for the underlying value or quality of the businesses of smaller companies, such as those in which the Companies invest, to be fully reflected in their market values and their market values are often also materially affected by general market sentiment, which can be negative for prolonged periods.
Investment in unquoted companies (including AIM-traded and PLUS market-traded companies), by its nature, involves a higher degree of risk than investment in companies listed on the Official List. In particular, small companies often have limited product lines, markets or financial resources and may be dependent for their management on a small number of key individuals and may be more susceptible to political, exchange rate, taxation, economic and other regulatory changes and conditions. In addition, the market for securities in smaller companies may be less regulated and is usually less liquid than that for securities in larger companies, bringing with it potential difficulties in acquiring, valuing and disposing of such securities. Proper information for determining their value or the risks to which they are exposed may also not be available. Investment returns will, therefore, be uncertain and involve a higher degree of risk than investment in a company listed on the Official List.
To the extent that investee companies are unable to pay the interest on loan stock instruments, a Company's income return will be adversely affected. Investee companies may also have debt, such as bank loans, which rank ahead of the loan stock issued to a Company.
Where more than one of the funds managed or advised by Matrix wishes to participate in an investment opportunity, allocations will generally be made in proportion to the net funds raised and allocated by Matrix for each fund. When one of the funds managed or advised by Matrix is in its fund raising period, its net funds raised, for the purpose of allocation, will be assumed to be the value of shares allotted at the time the allocation calculation is made. Implementation of this policy will be subject to the availability of funds to make the investment and other portfolio considerations such as sector exposure and the requirement to achieve or maintain a minimum of 70 per cent. of a particular VCT's portfolio in VCT qualifying holdings. This may mean that a Company may receive a greater or lesser allocation than would otherwise be the case under the normal co-investment policy.
VCTs are subject to investment restrictions, a summary of which are set out in Part Ten of the Securities Note, which may have an impact on the investments the Companies can make and the returns achievable.
Although Matrix is currently seeing a strong dealflow of opportunities, there can be no guarantee that suitable investment opportunities will be identified in order to meet a Company's objectives.
Whilst it is the intention of each Board that their Company will continue to be managed so as to qualify as a VCT, there can be no guarantee that a Company's status will be maintained. Failure to continue to meet the qualifying requirements could result in Qualifying Investors losing the tax reliefs available for VCT shares, resulting in adverse tax consequences including, if the holding has not been held for the relevant holding period, a requirement to repay the tax reliefs obtained. Furthermore, should a Company lose its VCT status, dividends and gains arising on the disposal of Shares would become subject to tax and the Company would also lose its exemption from corporation tax on its capital gains.
If a Qualifying Investor disposes of his or her Shares within five years of issue, (three years if such Shares were issued on or between 6 April 2000 and 5 April 2006), he or she will be subject to clawback by HMRC of any income tax reliefs originally claimed.
If at any time VCT status is lost for a Company, dealings in its Shares will normally be suspended until such time as proposals to continue or to be wound-up have been announced.
The tax rules, or their interpretation, in relation to an investment in the Companies and/or the rates of any tax may change during the life of the Companies and may apply retrospectively.
Changes in legislation, including those proposed in the Budget Report 2010 and Emergency Budget Report 2010, concerning VCTs in general and qualifying holdings and qualifying trades in particular, may limit the number of new qualifying investment opportunities and/or reduce the level of returns which would otherwise have been achievable.
Any change of governmental, economic, fiscal, monetary or political policy, in particular current government spending reviews and cuts, (which may reduce the spending power and operations of the investee companies and the companies they contract with) could materially affect, directly or indirectly, the operation of the Companies and/or the performance of the Companies and the value of and returns from Shares and/or their ability to achieve or maintain final VCT status.
Keith Melville Niven (Chairman) Thomas Peter Sooke Bridget Elisabeth Guérin
Christopher Mark Moore (Chairman) Helen Rachelle Sinclair Andrew Stephen Robson
Colin Peter Hook (Chairman) Helen Rachelle Sinclair Jonathan Harry Cartwright
Company Secretary and Promoter Matrix Private Equity Partners LLP One Vine Street London W1J 0AH
Martineau No. 1 Colmore Square Birmingham B4 6AA
Charles Stanley Securities 131 Finsbury Pavement London EC2A 1NT
PKF (UK) LLP Farringdon Place 20 Farringdon Road London WC2N 6RH
Capita Registrars Northern House Woodsome Park Fenay Bridge Huddersfield HD8 0GA Telephone Number: 0871 664 0300*
One Vine Street London W1J 0AH
I&G 04069483 MIG 05153931 MIG 4 03707697
www.migvct.co.uk www.mig4vct.co.uk www.incomeandgrowthvct.co.uk
Telephone Number: 020 3206 7000
The City Partnership (UK) Limited Thistle House 21 Thistle Street Edinburgh EH2 1DF
Matrix Corporate Capital LLP One Vine Street London W1J 0AH
PricewaterhouseCoopers LLP 1 Embankment Place London WC2N 6RH
National Westminster Bank plc Financial Institutions Team – First Floor Mayfair Commercial Banking Centre Piccadilly 65 London W1A 2PP
Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS99 6ZZ
*Capita Registrars telephone number is open between 9.00 a.m. and 5.00 p.m. (GMT) Monday to Friday (except UK public holidays). If telephoning from outside of the UK dial +44 20 8639 3399. Calls to Capita Registrars' helpline are charged at 10p per minute (including VAT) plus your service provider's network extras. Calls from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones. Further details on the costs of calls, opening hours and how to contact the Companies' registrars from abroad are also detailed on their websites www.capitaregistrars.com/shareholders and www.investorcentre.co.uk
The following definitions apply throughout this document unless the context otherwise requires:
| "Admission" | the date on which Offer Shares allotted pursuant to the Offer are listed on the Official List of the UK Listing Authority and admitted to trading on the London Stock Exchange's market for listed securities |
|
|---|---|---|
| "AIM" | the Alternative Investment Market |
|
| "Articles" | the articles of association of MIG and/or MIG 4 and/or I&G, as the context permits |
|
| "Boards" | the board of directors of MIG, MIG 4 and I&G (and each "a Board") |
|
| "Business Days" |
any day (other than a Saturday) on which clearing banks are open for normal banking business in sterling |
|
| "CA 1985" |
Companies Act 1985 (as amended) |
|
| "CA 2006" |
Companies Act 2006 (as amended) |
|
| "Capita Registrars" |
a trading name of Capita Registrars Limited |
|
| "Charles Stanley" |
Charles Stanley Securities, a division of Charles Stanley & Co Limited, which is authorised and regulated by the Financial Services Authority, is a UKLA registered sponsor and is a member of the London Stock Exchange |
|
| "Closing Date" |
the closing date of the Offer which is expected to be 12.00 pm 30 April 2011, but the Boards reserve the right to extend the closing date of the Offer or will close earlier if it is fully subscribed or otherwise at the Boards' discretion |
|
| "Companies" | MIG, MIG 4 and I&G (and each "a Company") |
|
| "Companies Acts" |
CA 1985 and CA 2006 |
|
| "Directors" | the directors of MIG and/or MIG 4 and/or I&G from time to time, as the context permits |
|
| "EBITA" | a company's earnings before the deduction of interest, tax and amortisation |
|
| "FSA" | the Financial Services Authority |
|
| "HMRC" | Her Majesty's Revenue & Customs |
|
| "I&G" | The Income & Growth VCT plc |
|
| "I&G Shares" |
ordinary shares of 1p each in the capital of I&G |
|
| "IPEVC Valuation Guidelines" |
the International Private Equity and Venture Capital Valuation Guidelines |
|
| "Listing Rules" |
the Listing Rules of the UK Listing Authority |
|
| "London Stock Exchange" |
London Stock Exchange plc |
|
| "Matrix" | Matrix Private Equity Partners LLP, the investment manager, administrator company secretary and promoter to the Companies and which is authorised and regulated by the FSA |
|
| "Memorandum" | the memorandum of association of MIG and/or MIG 4 and/or I&G, as the context permits (and together "the Memoranda") |
|
| "MIG" | Matrix Income & Growth VCT plc |
|
| "MIG Shares" |
ordinary shares of 1p each in the capital of MIG |
|
| "MIG 4" |
Matrix Income & Growth 4 VCT plc |
|
| "MIG 4 Shares" |
ordinary shares of 1p each in the capital of MIG 4 |
|
| "Money Market Funds" |
money market funds, government securities or other low risk liquid assets |
| "NAV" or "net asset value" |
the net asset value of a company calculated in accordance with that company's normal accounting policies |
|---|---|
| "Offer" | the offer for subscription of Offer Shares as described in the Prospectus |
| "Offer Price" |
the price at which the Offer Shares will be allotted in each Company pursuant to the Offer |
| "Offer Shares" |
MIG Shares, MIG 4 Shares and I&G Shares, being offered for subscription pursuant to the Offer |
| "Official List" |
the official list of the UK Listing Authority |
| "PLUS Markets" |
'PLUS quoted', a prescribed market for the purposes of section 118 of Financial Services and Markets Act 2000 operated by PLUS Markets Group plc |
| "Pricing Formula" |
the formula to calculate the Offer Price of the Offer Shares as set out in the Securities Note |
| "Prospectus" | together the Registration Document, the Securities Note and the Summary |
| "Prospectus Rules" |
the prospectus rules of the UK Listing Authority |
| "Qualifying Company" |
an unquoted (including an AIM-listed) company which satisfies the requirements of Part 4 of Chapter 6 of the Tax Act (together "Qualifying Companies") |
| "Receiving Agent" |
The City Partnership (UK) Limited |
| "Registrar" | Capita Registrars or Computershare Investor Services plc, as the context permits |
| "Registration Document" |
this document |
| "Regulations" | the Uncertificated Securities Regulations 1995 |
| "Securities Note" |
the securities note issued by the Companies dated 12 November 2010 in connection with the Offer |
| "Shareholder" | a holder of Shares in one or more of the Companies (as the context permits) |
| "Shareholders" | shareholders of one or more of the Companies, as the context permits |
| "Shares" | MIG Shares and/or MIG 4 Shares and/or I&G Shares (as the context permits) |
| "Summary" | the summary issued by the Companies dated 12 November 2010 in connection with the Offer |
| "The Tax Act" |
the Income Tax Act 2007 (as amended) |
| "Total Return" |
the aggregate value of an investment or collection of investments comprising net asset value, valued where appropriate in accordance with IPEVC Valuation Guidelines, plus the aggregate amount of all distributions (both revenue and capital) made |
| "UKLA" or "UK Listing Authority" |
the FSA in its capacity as the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000 |
| "United Kingdom" or "UK" |
the United Kingdom of Great Britain and Northern Ireland |
| "United States" or "US" |
the United States of America, its states, territories and possessions (including the District of Columbia) |
| "VCT Value" |
the value of an investment calculated in accordance with Section 278 of the Tax Act |
| "Venture Capital Investments" |
shares in, or securities of, a Qualifying Company held by a venture capital trust which meets the requirements described in Parts 3 and 4 of Chapter 6 to the Tax Act |
| "Venture Capital Trust" or "VCT" |
a venture capital trust as defined in Section 259 of the Tax Act |
As required by the new provisions of the Listing Rules for VCTs, each of the Companies' Boards is independent of Matrix. All Directors are independent of Matrix save for Bridget Guérin and Helen Sinclair as set out below.
Each Board has substantial experience of venture capital businesses and overall responsibility for its Company's affairs, including determining the investment policy of the relevant Company and making investment decisions (on the advice of Matrix). Each Board also retains responsibility for approving both the valuations of the portfolio and the net assets of its Company.
Keith has over 30 years' experience in the financial services industry, most of which was spent at Schroder Investment Management Limited, the fund management arm of Schroders plc, where he was appointed joint vice-chairman in 2000. He held a number of other senior positions within Schroders including managing director of its UK institutional fund management business, Schroder Unit Trusts Limited, from 1992 to 2001. He retired from Schroders in October 2001. Keith is a non-executive director of three other trusts, Schroder UK Growth Fund plc, Schroder Income Growth Fund plc and Impax Environmental Markets plc. Keith is also an investment adviser to the Rolls-Royce Pension Fund and a director of the Trossachs Community Trust. Until May 2010, he was chairman of Matrix Income & Growth 3 VCT plc.
Christopher has considerable experience of the venture capital industry. After a law degree and qualifying as an accountant with Price Waterhouse he worked for Robert Fleming Inc., Lazards, Jardine Fleming and then Robert Fleming, latterly as a main board director from 1986 to 1995. During this period he was involved in various unquoted and venture capital investments and remained chairman of Fleming Ventures Limited, an international venture capital fund, until the fund's final distribution in 2003. His roles have included acting as senior adviser to the chairman of Lloyds and chairing the successful turn-around of a public industrial group. Until May 2010, he was a director of Matrix Income & Growth VCT and Matrix Income & Growth 3 VCT. Until September 2010 he was a director of The Income & Growth VCT.
Colin has wide financial and commercial experience. He has worked in the City for more than 30 years. During this time, he directed fund management operations for more than ten years. His City involvement includes, mergers and acquisitions, and flotations. From 1994 to 1997 he was chief executive of Ivory and Sime plc. He is currently Chairman of Pole Star Space Applications Limited, a leading provider of real-time tracking information for maritime applications via a global webbased satellite enabled solution. Until September 2010, he was Chairman and a director of Matrix Income & Growth 4 VCT.
Tom is an experienced venture capitalist and is a director of Braxxon Consulting Limited. In recent years he has been chairman and non-executive director of a number of quoted and unquoted private equity funds and other companies. Previously, up until 1991, he was a partner in Deloitte LLP, co-managing the firm's corporate advisory group in London. Prior to that he was a main board director at Granville Holdings plc, where he also established and ran its main private equity fund activities from 1980 to 1987. In 1983, whilst with Granville, Tom was also one of the cofounding members of the British Venture Capital Association. Until May 2010, he was a director of Matrix Income & Growth 3 VCT plc.
Andrew qualified as a Chartered Accountant in 1984. From 1984 to 1997, he worked in Corporate Finance at Robert Fleming & Co Limited, becoming a director. Following a four year term in charge of the finances of the National Gallery, he joined Société Générale as a director in the London M&A department. He subsequently became finance director of the eFinancial group, a group specialising in financial publishing and online recruitment. He now works as a business adviser to small companies.
Andrew has over 12 years of experience as a non-executive director, including with investment companies. He is currently a non-executive director of British Empire Securities and General Trust PLC (from August 2008), Shires Income PLC (from May 2008), M&G Equity Investment Trust PLC (from 2007) and JP Morgan Smaller Companies Investment Trust PLC (from 2007). Andrew was a non-executive director of Edinburgh UK Smaller Companies Tracker Trust PLC from 1998 to 2006 and a non-executive director of Gate Gourmet Group Holdings LLC from 2006 to 2007.
Jonathan qualified as a Chartered Accountant. He has significant experience of the investment trust sector and of serving on the boards of both public and private companies in executive and non-executive roles. Jonathan joined Caledonia Investments plc in 1989, serving as Finance Director from 1991 to December 2009 and Group Financial Controller at Hanson plc 1984 to 1989. He was a non-executive Director of Bristow Group Inc. from 1996 to 2009 and has been a non-executive director of Serica Energy plc from 2008 to date. Jonathan has served on the Self-Managed Investment Trust Committee of the Association of Investment Companies (to December 2009).
Bridget is a former director of and current shareholder in Matrix Group Limited which owns 100 per cent. of the equity in Matrix Private Equity Partners Limited which, in turn, holds a 50 per cent. interest in Matrix. Bridget is also managing director of Matrix Money Management Limited, a wholly owned subsidiary of Matrix Group Limited which is a specialist financial services company. Prior to joining Matrix, Bridget accumulated 16 years' of retail investment fund experience at Schroder Unit Trusts Limited, Ivory & Sime and County NatWest. Bridget is also a director of the Matrix Alternative Investment Strategies Fund Limited, an open ended fund of hedge funds, Matrix Structured Products Limited, a closed ended fund based in Bermuda and Matrix UCITS Fund plc, a fund which has a number of UCITS sub funds. Until May 2010, she was a director of Matrix Income & Growth 3 VCT plc.
Helen has extensive experience of investing in a wide range of small and medium sized businesses. She graduated in economics from Cambridge University and began her career in banking. After an MBA at INSEAD business school, Helen worked from 1991 to 1998 at 3i plc based in their London office. She was a founding director of Matrix Private Equity Limited when it was established in early 2000 and raised two funds, Matrix Income & Growth 2 VCT plc and Matrix Enterprise Fund. After leaving Matrix in 2005 she was a non-executive director of Hotbed Fund Managers Limited from 2006 to 2008. She is chairman of British Smaller Companies VCT plc, a non-executive director of Framlington AIM VCT plc and Spark Ventures plc. Helen is a Director of both I&G and MIG 4 and, as both are managed by Matrix, is not deemed to be an independent director pursuant to the Listing Rules.
The Directors are currently or have been within the last five years, a member of the administrative, management or supervisory bodies or partners of the companies and partnerships mentioned below:
| Current | Past Five Years |
|||
|---|---|---|---|---|
| Keith Niven |
Impax Environmental Markets plc Matrix Income & Growth VCT plc Matrix Income & Growth 3 VCT plc (in liquidation) Schroder Income Growth Fund plc Schroder UK Growth Fund plc Trossachs Community Trust |
Advance UK Trust PLC CAF Bank Limited CAF Nominees Limited Cornerstone VCT Limited Healthstar group plc Pennthorpe School Trust Limited Procura MMCB Limited |
||
| Christopher Moore |
Bletchley Park Trust Limited British Eye Research Foundation Eye Research UK Fight for Sight Trading Limited Matrix Income & Growth 3 VCT plc (in liquidation) Matrix Income & Growth 4 VCT plc |
Cornerstone VCT Limited Helveta Limited Matrix Income & Growth VCT plc Oxonica plc The Income & Growth VCT plc |
||
| Colin Hook |
The Income & Growth VCT plc Pole Star Space Applications Limited 9th /12th Royal The Lancers (Prince of Wales's) Regimental Museum |
Matrix Income & Growth 4 VCT plc |
||
| Tom Sooke |
Braxxon Consulting Limited Matrix Income & Growth VCT plc Matrix Income & Growth 3 VCT plc (in liquidation) |
Advance Media Information Limited Braxxon Technology Limited Citicourt & Co Limited Spark VCT plc CitiCourt Associates Limited |
||
| Helen Sinclair |
British Smaller Companies VCT plc Framlington AIM VCT plc Matrix Income & Growth 4 VCT plc Spark Ventures plc The Income & Growth VCT plc |
Hotbed Fund Managers Limited |
||
| Andrew Robson |
Brambletye School Trust Limited British Empire Securities and General Trust plc First Integrity Limited JPMorgan Smaller Companies Investment Trust plc M&G Equity Investment Trust plc Matrix Income & Growth 4 VCT plc Peckwater Limited Shires Income plc Topshire Limited Wiston Investment Company Limited |
eFinancialCareers Limited eFinancialGroup Limited eFinancialNews Limited eFinancialNews Holdings Limited Edinburgh UK Smaller Companies Tracker Trust plc Gate Gourmet Group Holdings LLC Institute for food, brain and behaviour London Financial News Publishing Limited |
| Jonathan Cartwright |
Aberforth Geared Income Trust plc Aquilo Associates Limited British Portfolio Trust plc Serica Energy plc Tennants Consolidated Limited The Income & Growth VCT plc |
Bristow Group Inc. Bristow Aviation Holdings Limited Buckingham Gate Limited Caledonia CCIL Distribution Limited Caledonia El Distribution Caledonia Financial Limited Caledonia GP Distribution Limited Caledonia Group Services Limited Caledonia Industrial & Services Limited Caledonia Investments plc Caledonia Investment Funds Limited Caledonia Settlement Limited Caledonia Treasury Limited Easybox Self-Storage Limited Garlandheath Limited Sea Lion Ventures Limited Shieldcliff Limited Sloane Club Holdings Limited The Union-Castle Steamship Company Limited Zulu Self Storage Properties Limited |
|---|---|---|
| Bridget Guérin |
Matrix Alternative Investment Strategies Fund Matrix (Bermuda) Limited Matrix Income & Growth VCT plc Matrix Income & Growth 3 VCT plc |
Cornerstone VCT Limited Matrix Group Limited Matrix-Securities Limited |
The Companies' investment manager is Matrix, a limited liability partnership incorporated and registered in England and Wales under number OC320577 pursuant to the Limited Liability Partnerships Act 2000 (telephone number 020 3206 7000). Matrix's registered office and principal place of business is One Vine Street, London W1J 0AH. Matrix is authorised and regulated by the Financial Services Authority to advise on investments, arrange deals in investments and to make arrangements with a view to transactions in investments. The principal legislation under which Matrix operates is the Limited Liability Partnership Act 2000 and the applicable provisions of the Companies Acts (and regulations made thereunder).
(in liquidation)
Matrix UCITS Funds plc
Matrix Money Management Limited Matrix Structured Products Limited
The material provisions of each of the Company's Articles are as detailed below. The provisions set out below apply, mutatis mutandis, to each Company unless otherwise stated. References in this section to "the Company" mean the relevant Company and references to "Directors" or "Board" mean the directors or board respectively of the relevant Company from time to time.
The liability of the members is limited to the amount, if any, unpaid on their shares.
The Board may convene a general meeting whenever it thinks fit.
The accidental omission to send a notice of meeting or, in cases where it is intended that it be sent out with the notice, an instrument of proxy, to, or the non-receipt of either by, any person entitled to receive the same shall not invalidate the proceedings at that meeting.
No business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business but the absence of a quorum shall not preclude the choice or appointment of a Chairman which shall not be treated as part of the business of the Meeting. Subject to the provisions below, 2 persons entitled to attend and to vote on the business to be transacted, each being a member present in person or a proxy for a member or a duly authorised representative of a corporation which is a member, shall be a quorum.
If within 5 minutes (or such longer interval as the Chairman in his absolute discretion thinks fit) from the time appointed for the holding of a general meeting a quorum is not present, or if during a meeting such a quorum ceases to be present, the meeting, if convened on the requisition of members, shall be dissolved. In any other case, the meeting shall stand
adjourned to such day and at such time and place as the Chairman may determine, being not less than 10 clear days nor more than 28 days thereafter at such adjourned meeting one member present in person or by proxy or (being a corporation) by a duly authorised representative shall be a quorum. If no such quorum is present or if during the adjourned meeting a quorum ceases to be present, the adjourned meeting shall be dissolved. The Company shall give at least 7 clear days' notice of any meeting adjourned through lack of quorum.
At any general meeting a resolution put to a vote of the meeting shall be decided on a show of hands unless (before or immediately after the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is duly demanded. Subject to the provisions of CA 2006, a poll may be demanded by:
Unless a poll is duly demanded and the demand is not withdrawn a declaration by the Chairman of the meeting that a resolution has on a show of hands been carried or carried unanimously or by a particular majority or lost or not carried by a particular majority shall be conclusive, and an entry to that effect in the book containing the minutes of proceedings of the Company shall be conclusive evidence thereof, without proof of the number or proportion of the votes recorded in favour of or against such resolution.
Subject to the provisions of CA 2006 and to any special terms as to voting on which any shares may have been issued or may for the time being be held and to any suspension or abrogation of voting rights pursuant to the Articles, at any general meeting every member who is present in person or by proxy or (being a corporation) is present by a duly authorised representative shall on a show of hands have one vote and on a poll shall have one vote for each share of which he is the holder.
(a) Subject to the provisions of CA 2006, if at any time the share capital of the Company is divided into shares of different classes any of the rights for the time being attached to any share or class of shares in the Company (and notwithstanding that the Company may be or be about to be in liquidation) may (unless otherwise provided by the terms of issue of the shares of that class) be varied or abrogated in such manner (if any) as may be provided by such rights or, in the absence of any such provision, either with the consent in writing of the holders of not less than three quarters in nominal value of the issued shares of the class or with the sanction of an extraordinary resolution passed at a separate general meeting of the holders of shares of the class duly convened and held as provided in these Articles (but not otherwise).
(b) The foregoing provisions of this article shall apply also to the variation or abrogation of the special rights attached to some only of the shares of any class as if each group of shares of the class differently treated formed a separate class the separate rights of which are to be varied.
All the provisions in the Articles as to general meetings shall mutatis mutandis apply to every meeting of the holders of any class of shares save that:
The Company in general meeting may from time to time by ordinary resolution:
Except as provided in paragraph 8.2 below, each member may transfer all or any of his shares by instrument of transfer in writing in any usual form or in any form approved by the Board. Such instrument shall be executed by or on behalf of the transferor and (in the case of a transfer of a share which is not fully paid up) by or on behalf of the transferee. The transferor shall be deemed to remain the holder of such share until the name of the transferee is entered in the Register in respect of it.
require to prove the title of the transferor and the due execution by him of the transfer or if the transfer is executed by some other person on his behalf, the authority of that person to do so, provided that such discretion may not be exercised in such a way as to prevent dealings in such shares from taking place on an open and proper basis.
Subject to the provisions of CA 2006 and of the Articles, the Company may by ordinary resolution declare that out of profits available for distribution dividends be paid to members according to their respective rights and interests in the profits of the Company available for distribution. However, no dividend shall exceed the amount recommended by the Board.
whether or not distributable (including without limitation any share premium account, capital redemption reserve fund, and credit or debit balance on any other distributable reserve) after adding thereto or deducting therefrom any balance standing to the credit or debit of the profit and loss account,
all as shown in the latest audited balance sheet of the Group but after:
but do not include:
(ix) the proportion of moneys borrowed by a Group company (and not owing to another Group company) which is equal to the proportion of its issued equity share capital not attributable directly or indirectly to the Company;
10.4 All monies borrowed which fall to be repaid in a currency other than sterling shall be translated into sterling on the same basis as that adopted in the latest audited consolidated balance sheet of the Company or in the case of monies borrowed after the date of such balance sheet at the relevant rate of exchange ruling in London at the time the same was borrowed.
The Board may, provided the quorum and voting requirements set out below are satisfied, authorise any matter that would otherwise involve a Director breaching his duty under CA 2006 to avoid conflicts of interest.
Subject to the provisions of CA 2006 and the Articles and further provided that a Director has declared his interest, a Director, notwithstanding his office:
12.3 The net proceeds of sale shall belong to the Company which shall be indebted to the former holder or person entitled by transmission to an amount equal to such net proceeds.
The Board may with the authority of an ordinary resolution of the Company:
(any agreement made under such authority being effective and binding on all such holders); and
13.6 generally do all acts and things required to give effect to such resolution.
At any time when the Company has given notice in the prescribed form (which has not been revoked) to the registrar of companies of its intention to carry on business as an investment company (a ''Relevant Period'') distribution of the Company's capital profits (within the meaning of section 833 of the Act shall be prohibited. The Board shall establish a reserve to be called the capital reserve. During a Relevant Period all surpluses arising from the realisation or revaluation of investments and all other monies realised on or derived from the realisation, payment off of or other dealing with any capital asset in excess of the book value thereof and all other monies
which are considered by the Board to be in the nature of accretion to capital shall be credited to the capital reserve. Subject to CA 2006, the Board may determine whether any amount received by the Company is to be dealt with as income or capital or partly one way and partly the other. During a Relevant Period, any loss realised on the realisation or payment off of or other dealing with any investments or other capital assets and, subject to CA 2006, any expenses, loss or liability (or provision thereof) which the Board considers to relate to a capital item or which the Board otherwise considers appropriate to be debited to the capital reserve shall be carried to the debit of the capital reserve. During a Relevant Period, all sums carried and standing to the credit of the capital reserve may be applied for any of the purposes for which sums standing to any revenue reserve are applicable except and provided that notwithstanding any other provision of these Articles during a Relevant Period no part of the capital reserve or any other money in the nature of accretion to capital shall be transferred to the revenue reserves of the Company or be regarded or treated as profits of the Company available for distribution (as defined by section 829 of CA 2006) or be applied in paying dividends on any shares in the Company. In periods other than a Relevant Period any amount standing to the credit of the capital reserve may be transferred to the revenue reserves of the Company or be regarded or treated as profits of the Company available for distribution (as defined by section 474(2) of CA 2006) or be applied in paying dividends on any shares in the Company.
In order for the future of the Company to be considered by the members, the Board shall at the annual general meeting of the Company falling after the fifth anniversary of the last allotment of shares in the Company and thereafter at five yearly intervals, invite the members to consider and debate the future of the Company (including, without limitation, whether the Company should be wound up, sold or unitized) and as soon as practicable following that meeting shall convene a general meeting to propose such resolution as the members attending the annual general meeting may by ordinary resolution require.
The Board may make such arrangements as it sees fit, subject to the Act, to deal with the transfer, allotment and holding of shares in uncertificated form and related issues.
The Company shall indemnify the directors to the extent permitted by law and may take out and maintain insurance for the benefit of the directors.
2.4 On 30 June 2004, MIG passed a resolution approving, subject to the sanction of the High Court, the cancellation of the share premium account (such cancellation being subsequently confirmed by the High Court on 24 August 2006 and registered at Companies House on 29 August 2006).
2.5 As at 31 December 2009, the date to which the last audited accounts have been prepared, the authorised share capital of the Company was £500,000 divided into 50,000,000 Shares (of which 20,373,514 were in issue, all fully paid-up).
| Date | Issue/Purchase | Number |
|---|---|---|
| 25/03/2010 | Purchase | 33,525 |
| 20/05/2010 | Issue (Merger) |
20,572,129 |
| 01/06/2010 | Purchase | 43,298 |
| 24/06/2010 | Purchase | 101,554 |
| 12/08/2010 | Purchase | 224,641 |
| 27/08/2010 | Purchase | 68,051 |
| 22/10/2010 | Purchase | 88,371 |
(b) in substitution for any existing authorities pursuant to section 570 (1) of CA 2006 the Directors are hereby empowered to allot equity securities (as defined in Section 560 (1) of CA 2006) for cash pursuant to the authority conferred upon them by resolutions passed at the annual general meeting or by way of a sale of treasury shares as if Section 561 (1) of CA 2006 did not apply to any such allotment, provided that the power conferred by this resolution shall be limited to:
(ii) the allotment and/or sale of equity securities with an aggregate nominal value of up to but not exceeding 10 per cent of the issue MIG Share capital at the date hereof in connection with any dividend investment scheme or similar scheme as may be introduced by MIG from time to time;
and shall expire on the conclusion of the annual general meeting of MIG to be held in 2011 or if earlier 11 August 2011 (unless previously renewed, varied or revoked by MIG in general meeting), except that MIG may, before such expiry, make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of such offer or agreement as if the power conferred hereby had not expired.
and this authority shall expire on conclusion of the next annual general meeting of MIG or if earlier 11 August 2011.
2.11 The following authorities were provided by the passing of a special resolution of MIG at an extraordinary general meeting of MIG also held on 12 May 2010:
(a) in addition to existing authorities, to the extent unused the MIG Directors were generally and unconditionally authorised in accordance with section 551 of CA 2006 to exercise all the powers of MIG to allot MIG Shares and to grant rights to subscribe for or to convert any security into MIG Shares up to an aggregate nominal amount of £145,000 during the period commencing on the passing of this resolution and expiring on the fifth anniversary of the date of the passing of this resolution (unless renewed, varied or revoked by MIG in a general meeting) but so that this authority shall allow MIG to make before the expiry of this authority offers or agreements which would or might require shares to be allotted or rights to subscribe for or to convert any security into MIG Shares to be granted after such expiry.
(v) MIG may make a contract to purchase shares under the authority conferred by this resolution prior to the expiry of such authority which will or may be executed wholly or partly after the expiration of such authority and may make a purchase of such shares.
(d) That, subject to the Scheme (as defined in the circular to shareholders dated 14 April 2010) becoming effective, the amount standing to the credit of the share premium account of MIG, at the date an order is made confirming such cancellation by the court, be and hereby is cancelled.
| Issued | ||||
|---|---|---|---|---|
| Number £ |
||||
| MIG Shares |
47,529,060 475,290.60 |
| MIG Shares |
% of Issued MIG Share capital |
|
|---|---|---|
| Keith Niven |
32,341 | 0.08 |
| Tom Sooke |
16,342 | 0.04 |
| Bridget Guérin |
18,980 | 0.05 |
3.3 The MIG Directors intend to subscribe for Offer Shares under the Offer for the following aggregate amounts:
| £ | |
|---|---|
| Keith Niven |
10,000 |
| Tom Sooke |
5,000 |
| Bridget Guérin |
5,000 |
3.10 MIG has taken out directors' and officers' liability insurance for the benefit of its directors, which is renewable on an annual basis.
3.11 The MIG Directors are currently or have been within the last five years, a member of the administrative, management or supervisory bodies or partners of the companies and partnerships as set out on pages 10 to 11.
4.4 MIG has, under the same agreement with Matrix as set out in paragraph 5.1, appointed Matrix to provide company secretarial and accountancy. The services to be provided will include all necessary secretarial, bookkeeping, accounting and custodian services required in connection with the business and operation of MIG.
4.5 PricewaterhouseCoopers LLP receives an annual fee of £10,000 plus VAT for providing advice and assistance in relation to the maintenance of the VCT status of MIG. If requested by MIG, PricewaterhouseCoopers LLP will also review prospective investments to ensure that they are qualifying venture capital investments and carry out reviews of the investment portfolio of MIG to ensure continuing compliance.
Set out below is a summary of all contracts (not being contracts entered into in the ordinary course of business) entered into by MIG in the last two years that are material and all other contracts (not being contracts entered into in the ordinary course of business) that contain any provision under which MIG has an obligation or entitlement which is material to MIG as at the date of the document.
Matrix is entitled to receive performance incentive fees of 20 per cent. of subsequent cash distributions made to MIG Shareholders (whether by dividend or otherwise from 20 May 2010) over and above a target return of dividends of 6.13p per MIG Share per annum (index linked) subject to the maintenance of a NAV per MIG Share of 96.91p. The performance incentive fee is payable annually and any cumulative shortfalls against the annual target return have to be made up in later years before any entitlement arises. The agreement will terminate automatically if MIG enters into liquidation or if a receiver or manager is appointed or if a resolution is passed that MIG is voluntarily wound up in
accordance with the MIG Articles.
The objective of MIG is to provide investors with a regular income stream, by way of tax-free
dividends, and to generate capital growth through portfolio realisations, which can be distributed by way of additional tax-free dividends.
MIG's policy is to invest primarily in a diverse portfolio of UK unquoted companies. Investments are usually structured as part loan and part equity in order to generate regular income and to generate capital gains from trade 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 incumbent management teams in acquiring the business they manage but do not own. Investments are primarily made in companies that are established and profitable.
Uninvested funds are held in cash and lower risk Money Market Funds.
The funds raised by the Companies after 6 April 2006 are subject to the £7 million gross assets test for an investment to be VCT qualifying. Pre 6 April 2006, the companies in which investments are made must have no more than £15 million of gross assets at the time of investment to be classed as a VCT qualifying holding.
The investment policy is designed to ensure that the VCT continues to qualify and is approved as a VCT by HMRC. Amongst other conditions, the VCT may not invest more than 15 per cent. of its investments in a single company and must have at least 70 per cent. by value of its investments throughout the period in shares or securities comprised in VCT qualifying holdings, of which a minimum overall of 30 per cent. by value (70 per cent. for funds raised from an effective date to be specified) must be in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules). In addition, although the VCT can invest less than 30 per cent. value (70 per cent. for funds raised from an effective date to be specified) of an investment in a specific company in ordinary shares it must have at least 10 per cent. by value of its total investments in each VCT qualifying company in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules).
MIG initially holds its funds in a portfolio of readily realisable interest bearing investments and deposits. The investment portfolio of qualifying investments has been built up over time with the aim of investing and maintaining 80 per cent. of net funds raised in qualifying investments.
Risk is spread by investing in a number of different businesses across different industry sectors. To reduce the risk of high exposure to equities, each qualifying investment is structured to maximise the amount which may be invested in loan stock . Initial investments in VCT qualifying companies are, subject to formal approval from the MIG Board, generally made in amounts ranging from £200,000 to £1 million at cost. No holding in any one company will represent more than 10 per cent. of the value of the MIG's investments at the time of investment. Ongoing monitoring of each investment is carried out by the investment manager generally through taking a seat on the board of each Qualifying Company.
MIG aims to invest in larger more mature unquoted companies through investing alongside three other VCTs advised by Matrix with a similar investment policy. This enables MIG to participate in combined investments by Matrix of up to £5 million.
MIG's Articles permit borrowings of amounts up to 10 per cent. of the sum equal to the aggregate of the amount paid up on the allotted or issued share capital of MIG and the amount standing to the credit of the capital and revenue reserves of MIG (whether or not distributable) after adding thereto or deducting therefrom any balance standing to the credit or debit of the profit and loss account. However, MIG has no current plans to undertake any borrowing.
The Board has overall responsibility for MIG's affairs including the determination of its investment policy. Investment and divestment proposals are originated, negotiated and recommended by Matrix and are then subject to formal approval by the MIG Directors.
6.1 MIG's income is intended to be derived wholly or mainly from shares or other securities, as this phrase is interpreted by HMRC.
Save for the fees paid to Matrix and Matrix-Securities Limited (Matrix-Securities Limited being the former secretary and administrator to MIG), under the arrangements set out in paragraph 5 above, the fees paid to MIG Directors as detailed in paragraph 4 above and fees paid to Matrix Corporate Capital LLP of £nil (2008), £9,161 (2009) and £12,925 (current year) (MIG has also bought MIG Shares for an aggregate consideration of £374,370 from Matrix Corporate Capital LLP under the buy-back policy in the current year), there were no related party transactions or fees paid by MIG during the years ended 31 December 2007, 2008 and 2009 or to the date of this document in the current financial year.
The issue of Offer Shares to persons resident in or citizens of jurisdictions outside the UK may be affected by the laws of the relevant jurisdiction. Such investors should inform themselves about and observe any legal requirements, in particular:
8.1 none of the Offer Shares have been or will be registered under the United States Securities
Act 1933, as amended, or qualify under applicable United States state statute and the relevant clearances have not been, and will not be, obtained from the securities commission of any province of Canada, Australia, Japan, South Africa or New Zealand;
The following paragraphs, which are intended as a general guide only and are based on current legislation and HMRC practice, summarise advice received by the MIG Directors as to the position of the Companies' Shareholders who hold MIG Shares other than for trading purposes. Any person who is in any doubt as to his taxation position or is subject to taxation in any jurisdiction other than the United Kingdom should consult his professional advisers.
10.5 Save as set out in the final risk factor on page 4, as at the date of this document, there are no governmental, economic, monetary, political or fiscal policies and factors which have or could affect MIG's operations.
10.6 There are no known trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on MIG's prospects for at least the current financial year, so far as MIG and the MIG Directors are aware.
All of MIG's investments as at 30 September 2010, which are analysed below, are in the UK and are valued in sterling.
| Sector | per cent. by cost |
per cent. by value |
|---|---|---|
| Support services |
33.18 | 31.16 |
| General retailers |
16.69 | 19.59 |
| Technology, hardware and equipment |
7.49 | 12.23 |
| Software and computer services |
3.43 | 5.82 |
| Construction | 11.94 | 6.88 |
| Media | 13.75 | 12.46 |
| Pharmaceuticals | 5.17 | 5.89 |
| Food production and distribution |
3.77 | 3.44 |
| Personal goods |
4.58 | 2.53 |
| Type | per cent. by cost |
per cent. by value |
|---|---|---|
| Unlisted ordinary shares |
24.56 | 33.10 |
| Unlisted loan stock and preference shares or loans |
51.30 | 44.42 |
| Cash/liquidity | 24.14 | 22.48 |
| Total | 100 | 100 |
There has been no material change to the above analysis since 30 June 2010, the date to which the last unaudited financial statements for MIG have been published.
MIG has produced annual statutory accounts for the three financial years ended 31 December 2007, 2008 and 2009, and unaudited information in the half-yearly financial statements for the six month period ended 30 June 2010. The auditors, PKF (UK) LLP, Registered Auditor, of Farringdon Place, 20 Farringdon Road, London EC1M 2AP have reported on the annual statutory accounts without qualification and without statements under section 237(2) or (3) of CA 1985 or sections 495 to 497A of CA 2006 (as applicable).
The annual reports referred to above were prepared in accordance with UK generally accepted accounting practice (GAAP), the fair value rules of the Companies Acts and the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts'. The annual reports contain a description of MIG's financial condition, changes in financial condition and results of operation for each relevant financial year and, are being incorporated by reference and can be accessed at the following website:
Where these documents make reference to other documents, such other documents are not incorporated into and do not form part of this Prospectus.
| Description | 2007 Annual Report |
2008 Annual Report |
2009 Annual Report |
2010 Half Yearly Report |
|---|---|---|---|---|
| Balance Sheet |
Page 30 |
Page 32 |
Page 30 |
Page 16 |
| Income Statement (or equivalent) |
Page 29 |
Page 31 |
Page 29 |
Pages 14 to 15 |
| Statement showing all changes in equity (or equivalent note) |
Page 31 |
Page 33 |
Page 31 |
Page 17 |
| Cash Flow Statement |
Page 32 |
Page 34 |
Page 32 |
Page 18 |
| Accounting Policies and Notes |
Pages 33 to 47 |
Pages 35 to 50 |
Pages 33 to 50 |
Pages 20 to 26 |
| Auditor's Report |
Pages 27 to 28 |
Pages 29 to 30 |
Page 28 |
n/a |
This information has been prepared in a form consistent with that which will be adopted in MIG's next published annual financial statements having regard to accounting standards and policies and legislation applicable to those financial statements.
Such information also includes operating/financial reviews as follows:
| Description | 2007 Annual Report |
2008 Annual Report |
2009 Annual Report |
2010 Half Yearly Report |
|---|---|---|---|---|
| Objective | Page 1 |
Page 1 |
Inside front cover |
Inside front cover |
| Performance Summary |
Page 4 |
Page 4 |
Page 2 |
Page 1 |
| Results & Dividend |
Page 17 |
Page 19 |
Page 15 |
Page 15 |
| Investment Policy |
Page 2 |
Page 2 |
Page 1 |
Pages 8 to 9 |
| Chairman's Statement |
Pages 5 to 6 |
Pages 5 to 6 |
Pages 3 to 4 |
Pages 4 to 5 |
| Manager's Review |
Pages 7 to 13 |
Page 8 to 15 |
Pages 5 to 10 |
Pages 10 to 11 |
| Portfolio Summary |
Pages 14 to 15 |
Pages 16 to 17 |
Pages 11 to 12 |
Pages 12 to 13 |
| Valuation Policy |
Page 33 |
Page 35 |
Page 33 |
n/a |
Certain financial information of MIG is also set out below:
| Year ended 31 December 2007 |
Year ended 31 December 2008 |
Year ended 31 December 2009 |
Six month period ended 30 June 2010 |
|
|---|---|---|---|---|
| Investment income |
£1,231,117 | £1,153,512 | £399,661 | £437,524 |
| Profit/loss on ordinary activities before taxation |
£4,164,605 | £(4,155,892) | £(563,531) | £2,245,466 |
| Earnings per MIG Share |
18.65p | (19.89)p | (2.73)p | 8.94p |
| Dividends per MIG Share |
7.8p | 2p | 5p | 5p |
| Total assets |
£25,944,820 | £18,377,230 | £17,097,733 | £35,575,029 |
| NAV per MIG Share |
116.89p | 86.54p | 83.34p | 86.3p |
As at 30 June 2010, the date to which the most recent unaudited half-yearly financial statements on MIG were published, MIG had unaudited net assets of £35,160,224. As at 30 September 2010, MIG had unaudited net assets of £37,455,312.
As at 30 June 2010, the date to which the most recent unaudited half-yearly financial statements on MIG have been drawn up, MIG had unaudited net assets of £35,160,224. MIG is now seeking to raise up to £6.66 million through the Offer for which the associated expenses will be 5.5 per cent. of the gross proceeds. The impact of the Offer on MIG's earnings should be accretive to the extent, if any, that interest earned on the proceeds will exceed expenses. The assets of MIG will be increased by the net proceeds of the Offer.
2.4 At an extraordinary general meeting on 18 October 2006, the issued and unissued ordinary shares of 5p each in the capital of the Company were consolidated on the basis of one new ordinary share of 10p each for every two existing ordinary shares of 5p each. The issued and unissued ordinary shares of 10p each were then sub-divided into one ordinary share of 1p each and nine deferred shares of 1p each. In accordance with MIG 4's Articles, the deferred shares were subsequently acquired for a nominal consideration and cancelled by the Company.
2.5 An offer for subscription for Ordinary Shares of 1p each was launched on 2 November 2006. A total of 13,006,193 Ordinary Shares were issued and allotted between 1 February 2007 and 5 April 2007.
| Date | Issue/Purchase | Number |
|---|---|---|
| 31/03/2010 | Issue | 1,462,871 |
| 03/04/2010 | Issue | 21,030 |
| 16/04/2010 | Purchase | 205,865 |
| 14/06/2010 | Issue | 26,848 |
| 28/06/2010 | Purchase | 36,044 |
| 28/07/2010 | Purchase | 194,144 |
| 20/10/2010 | Purchase | 66,000 |
| 02/11/2010 | Purchase | 28,750 |
2.9 MIG 4 has issued and bought back the following MIG 4 Shares since 31 January 2010:
On 14 June 2010 MIG 4 forfeited 4,581 MIG 4 Shares due to the non-payment of the purchase price pursuant to the offer for subscription which opened in January 2010.
(b) equity securities (as defined in section 560 of CA 2006) in connection with a rights issue in favour of the holders of equity securities and any other persons entitled to participate in such issue where the equity securities respectively attributable to the interests of such holders and persons are proportionate (as nearly as maybe) to the respective number of equity securities held by them up to an aggregate nominal amount of £71,472 subject only to such exclusions or other arrangements as the Directors may consider necessary or expedient to deal with fractional entitlements or legal or practical problems under the laws or requirements of any recognised regulatory body or stock exchange in any territory, in each case so that the authority hereby conferred shall expire on the conclusion of the annual general meeting of MIG 4 to be held in 2011, unless renewed, revoked or varied by MIG 4 in general meeting (except that the MIG 4 may, before such expiry, make offers or agreements which would or might require relevant securities to be allotted after such expiry and notwithstanding such expiry the MIG 4 Directors may allot relevant securities in pursuance of such offers or agreements).
2.11.2 That in substitution for any existing authorities pursuant to sections 570 and 573 of CA 2006 the MIG 4 Directors were empowered in accordance with sections 570 and 573 of CA 2006 to sell treasury shares (as defined in section 560(3) of CA 2006) and, subject to paragraph 2.11.1 above being passed, make other allotments of equity securities (and the expression "allotment of equity securities" and like expressions used in this resolution shall have the meaning given to them by virtue of section 560 of CA 2006) for cash, pursuant to the authority conferred on them to allot relevant securities and/or equity securities (as defined in section 560 of CA 2006) by that resolution, in each case as if section 561 did not apply to any such sale or allotment, provided that the power conferred by this resolution shall be limited to:
This power, unless previously renewed or revoked, shall expire on the conclusion of the annual general meeting of MIG 4 to be held in 2011 save that MIG 4 may, before expiry of this power, make offers or agreements which would or might require equity securities to be allotted after such expiry and the MIG 4 Directors may allot securities in pursuance of any such offers or agreements as if the power conferred hereby had not expired.
(c) the maximum price which may be paid for any MIG 4 Share shall be the higher of (a) an amount equal to five per cent above the average of the middle market quotations for such shares taken from the London Stock Exchange Daily Official List for the five business days immediately preceding the day the MIG 4 Share is contracted to be purchased and (b) the price stipulated by Article 5(1) of the Buyback and Stabilisation Regulation (EC 2273/2003);
(d) MIG 4 may make a contract or contracts to purchase its own MIG 4 Shares under the authority hereby conferred prior to the expiry of such authority which will or may be executed wholly or partly after the expiry of such authority, and may make a purchase of its own MIG 4 Shares in pursuance of any such contract; and
The authority thereby conferred shall (unless previously renewed or revoked) expire on the conclusion of the next annual general meeting of MIG 4 to be held in 2011.
| Issued | |||
|---|---|---|---|
| Number | £ | ||
| MIG 4 Shares |
26,895,458 | 268,954.58 |
| MIG 4 Shares Share capital |
% of issued MIG 4 |
|
|---|---|---|
| Christopher Moore |
26,690 | 0.13 |
| Helen Sinclair |
6,672 | 0.03 |
| Andrew Robson |
nil | nil |
3.3 The MIG 4 Directors intend to subscribe for Offer Shares under the Offer for the following aggregate amounts:
| £ | |
|---|---|
| Christopher Moore |
20,000 |
| Helen Sinclair |
15,000 |
| Andrew Robson |
15,000 |
3.12 Save as disclosed in this paragraph, in the five years prior to the publication of this document, there were no bankruptcies, receiverships or liquidations of any companies or partnership where any of the MIG 4 Directors were acting as (i) a member of the administrative, management or supervisory body, (ii) a partner with unlimited liability, in the case of a limited partnership with a share capital, (iii) a founder where the company had been established for fewer than five years nor (iv) a senior manager, during the previous five years.
(a) Christopher Moore was a director of Matrix Income & Growth 3 VCT plc which was placed into members' voluntary liquidation on 20 May 2010 pursuant to a section 110 Insolvency Act 1986 scheme of reconstruction with MIG.
MIG 4's investments in both quoted and unquoted investments and the corresponding share certificates will also be held in MIG 4's own names.
4.7 A maximum of 75 per cent. of MIG 4's management expenses will be charged against capital with the balance to be met from income.
Set out below is a summary of all contracts (not being contracts entered into in the ordinary course of business) entered into by MIG 4 in the last two years that are material and all other contracts (not being contracts entered into in the ordinary course of business) that contain any provision under which MIG 4 has an obligation or entitlement which is material to MIG 4 as at the date of the document.
5.1 An investment adviser's agreement dated 12 November 2010 between MIG 4 (1), Matrix (2) and Matrix-Securities Limited (3) pursuant to which Matrix is appointed to provide advisory investment management services in respect of MIG 4's investments in VCT qualifying investments.
Matrix is entitled to an annual management fee of 2 per cent. of the net asset value per annum of MIG 4 plus an annual fixed fee of £86,827 that is subject to annual RPI uplift (the fixed fee to be increased by £21,000 provided that the Offer raises more than £3 million for MIG 4), payable quarterly in arrears, together with any applicable VAT. The agreement is terminable by either party by 12 months' notice by any party subject to earlier termination by any party in the event of, inter alia, a party having a receiver, administrator or liquidator appointed or committing a material breach of the agreement or by MIG 4 if it fails to become, or ceases to be, a VCT for tax purposes or where Matrix ceases to be authorised by the FSA or if there is a change in control of Matrix. The agreement contains provisions indemnifying Matrix against any liability not due to its default, gross negligence, fraud or breach of the FSMA.
5.2 A performance incentive agreement dated 1 November 2006 between the Company (1), Matrix (2) and Matrix Group Limited (3), pursuant to which Matrix and Matrix Group Limited are entitled to receive performance related incentive fees subject to achieving certain defined targets.
Matrix and Matrix Group Limited are both entitled to receive performance incentive fees of 20 per cent of the annual dividends paid to MIG 4 Shareholders over and above an annual target return of dividends equivalent to 6 per cent. of the net assets per MIG 4 Share. The performance incentive fee shall be split 75/25 between Matrix and Matrix Group. Any cumulative shortfalls below the dividend hurdle per annum ("Shortfall") will have to be made up in later years before any entitlement arises.
The agreement will terminate automatically if MIG 4 enters into liquidation or if a receiver or manager is appointed or if a resolution is passed that MIG 4 is voluntarily wound up in accordance with the MIG 4 Articles.
The objective of MIG 4 is to provide investors with a regular income stream, by way of tax-free dividends, and to generate capital growth through portfolio realisations, which can be distributed by way of additional tax-free dividends.
MIG 4's policy is to invest primarily in a diverse portfolio of UK unquoted companies. Investments are usually structured as part loan and part equity in order to generate regular income and to generate capital gains from trade 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 incumbent management teams in acquiring the business they manage but do not yet own. Investments are primarily made in companies that are established and profitable. MIG 4 has a small legacy portfolio of investments in early stage and technology companies from its period prior to 1 August 2006, when it was a multi-manager VCT. These represent less than 0.3% of the value of the aggregate combined net assets of MIG 4.
Uninvested funds are held in cash and lower risk Money Market Funds.
The companies in which investments are made must have no more than £15 million of gross assets at the time of investment to be classed as a VCT qualifying holding. The £14.9 million of funds raised by MIG 4 after 6 April 2006 are subject to a £7 million gross assets test for an investment to be a VCT qualifying holding.
The investment policy is designed to ensure that MIG 4 continues to qualify and is approved as a VCT by HMRC. Amongst other conditions, the Company may not invest more than 15 per cent. of its investments in a single company and must have at least 70 per cent. by value of its investments throughout the year in shares or securities comprised in VCT qualifying holdings, of which a minimum overall of 30 per cent. by value (70 per cent. for funds raised from an effective date to be specified) must be in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules). In addition, although MIG 4 can invest less than 30 per cent. (70 per cent. for funds raised from an effective date to be specified by statute) of an investment in a specific company in ordinary shares it must have at least 10 per cent. by value of its total investments in each VCT qualifying company in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules).
MIG 4 initially holds its funds in a portfolio of readily realisable interest bearing investments and deposits, maximising income returns whilst minimising the risk of loss to capital. The investment portfolio of qualifying investments is built up over a three year period with the aim of investing and maintaining at least 80 per cent. of net funds raised in qualifying investments.
Risk is spread by investing in a number of different businesses across different industry sectors. To reduce the risk of high exposure to equities, each qualifying investment is structured to maximise the amount which may be invested in loan stock. Initial investments in VCT qualifying companies are then subject to formal approval by the MIG 4 Directors.
MIG 4 aims to invest in larger more mature unquoted companies through investing alongside three other VCTs advised by Matrix with a similar investment policy. This enables MIG 4 to participate in combined investments by Matrix of up to £5 million.
MIG 4's Articles permit borrowings of amounts up to 10 per cent. of the sum equal to the aggregate of the amount paid up on the allotted or issued share capital of MIG 4 and the amount standing to the credit of the capital and revenue reserves of MIG 4 (whether or not distributable) after adding thereto or deducting therefrom any balance standing to the credit or debit of the profit and loss account. However, MIG 4 has no current plans to undertake any borrowing.
The Board has overall responsibility for MIG 4's affairs including the determination of its investment policy. Investment and divestment proposals are originated, negotiated and recommended by Matrix and are then subject to formal approval by the MIG 4 Directors.
specify that (i) MIG 4 must, at all times, invest and manage its assets in a way which is consistent with its object of spreading investment risk and in accordance with its published investment policy as set out in this paragraph 6 above; (ii) MIG 4 must not conduct any trading activity which is significant in the context of its group as a whole; and (iii) MIG 4 may not invest more than 10 per cent., in aggregate, of the value of the total assets of the issuer at the time an investment is made in other listed closed-ended investment funds. Any material change to the investment policy of MIG 4 will require the approval of MIG 4 Shareholders pursuant to the Listing Rules. MIG 4 intends to direct its affairs in respect of each of its accounting periods so as to qualify as a Venture Capital Trust and accordingly:
Save for the fees paid to Matrix and Matrix-Securities Limited, under the arrangements set out in paragraph 5 above, the fees paid to MIG 4 Directors (including fees paid to former MIG 4 Directors) as detailed in paragraph 4 above and fees paid to Matrix Corporate Capital LLP of £10,518 (2010), £3,917 (2009) and £11,750 (current year) (MIG 4 has also bought MIG 4 Shares for an aggregate consideration of £403,031 from Matrix Corporate Capital LLP under the buy-back policy in the current year), there were no related party transactions or fees paid by MIG 4 during the years ended 31 January 2008, 2009 and 2010 or to the date of this document in the current financial year.
The issue of Offer Shares to persons resident in or citizens of jurisdictions outside the UK may be affected by the laws of the relevant jurisdiction. Such investors should inform themselves about and observe any legal requirements, in particular:
8.3 no offer is being made, directly, under the Offer, in or into or by the use of emails, or by means of instrumentality (including, without limitation, facsimile, transmission, telex or telephone) or interstate or foreign commerce, or of any facility in a national securities exchange, of the United States, Canada, Australia, Japan, South Africa or New Zealand. It is the responsibility of investors with registered addresses outside the UK to satisfy themselves as to the observance of the laws of the relevant jurisdiction in connection with the issue of Offer Shares, including the obtaining of any government or exchange control or other consents which may be required, the compliance with any other necessary formalities which need to be observed and the payment of any issue, transfer or other taxes or duties due in such jurisdiction.
The following paragraphs, which are intended as a general guide only and are based on current legislation and HMRC practice, summarise advice received by the MIG 4 Directors as to the position of the Companies' Shareholders who hold MIG 4 Shares other than for trading purposes. Any person who is in any doubt as to his taxation position or is subject to taxation in any jurisdiction other than the United Kingdom should consult his professional advisers.
10.7 The issue costs payable by MIG 4 under the Offer (including irrecoverable VAT and sales commissions) have been fixed by the MIG 4 Directors at 5.5 per cent. of total funds subscribed (but excluding annual trail commission) in respect of MIG 4 Shares. Matrix has agreed to indemnify MIG 4 in respect of any excess over 5.5 per cent. of the gross proceeds of the issue of MIG 4 Shares under the Offer. The net proceeds for MIG 4 from the Offer, assuming full subscription, will therefore amount to approximately £6,300,000.
10.8 MIG 4 has paid dividends amounting to 17.70p per MIG 4 Share (equivalent) in the period from incorporation.
All of MIG 4 's investments as at 31 July 2010, which are analysed below, are in the UK and are valued in sterling.
| Sector | per cent. by cost |
per cent. by value |
|---|---|---|
| General retailers |
23.69 | 23.96 |
| Support services |
31.04 | 31.19 |
| Food production and distribution |
12.22 | 12.36 |
| Technology, hardware and equipment |
3.03 | 10.43 |
| Pharmaceuticals | 7.77 | 10.40 |
| Media | 7.84 | 7.91 |
| Software and computer services |
3.80 | 2.42 |
| Business services |
0.92 | 0.00 |
| Construction | 6.29 | 0.00 |
| Personal goods |
2.48 | 1.21 |
| Consumer services |
0.92 | 0.12 |
| Type | per cent. by cost |
per cent. by value |
|---|---|---|
| Unlisted ordinary shares |
26.07 | 30.08 |
| Unlisted loan stock and preference shares or loans |
42.88 | 38.63 |
| Cash/liquidity | 31.05 | 31.29 |
| Total | 100 | 100 |
There has been no material change to the above analysis since 31 July 2010, the date to which the last unaudited financial statements for MIG 4 have been published.
MIG 4 has produced annual statutory accounts for the three financial years ended 31 January 2008, 2009 and 2010 and unaudited information in the half-yearly financial statements for the six month period ended 31 July 2010. The auditors, PKF (UK) LLP, Registered Auditor, of Farringdon Place, 20 Farringdon Road, London EC1M 2AP have reported on the annual statutory accounts without qualification and without statements under section 237(2) or (3) of CA 1985 or sections 495 to 497A of CA 2006 (as applicable).
The annual reports referred to above were prepared in accordance with UK generally accepted accounting practice (GAAP), the fair value rules of the Companies Acts and the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts'. The annual reports contain a description of MIG 4's financial condition, changes in financial condition and results of operation for each relevant financial year and, are being incorporated by reference and can be accessed at the following website:
Where these documents make reference to other documents, such other documents are not incorporated into and do not form part of this Prospectus.
| Description | 2008 Annual Report |
2009 Annual Report |
2010 Annual Report |
2010 Half Yearly Report |
|---|---|---|---|---|
| Balance Sheet |
Page 38 |
Page 42 |
Page 50 |
Page 16 |
| Income Statement (or equivalent) |
Page 37 |
Page 41 |
Page 49 |
Pages 14 to 15 |
| Statement showing all changes in equity (or equivalent note) |
Page 38 |
Page 43 |
Page 51 |
Page 16 |
| Cash Flow Statement |
Page 39 |
Page 44 |
Page 52 |
Page 17 |
| Accounting Policies and Notes |
Pages 40 to 54 |
Pages 45 to 60 |
Pages 53 to 70 |
Pages 19 to 26 |
| Auditor's Report |
Pages 35 to 36 |
Pages 39 to 40 |
Pages 47 to 48 |
n/a |
This information has been prepared in a form consistent with that which will be adopted in MIG 4's next published annual financial statements having regard to accounting standards and policies and legislation applicable to those financial statements.
Such information also includes operating/financial reviews as follows:
| Description | 2008 Annual Report |
2009 Annual Report |
2010 Annual Report |
2010 Half Yearly Report |
|---|---|---|---|---|
| Objective | Page 2 |
Inside front cover |
Inside front cover |
Inside front cover |
| Performance Summary |
Pages 3 to 4 |
Pages 1 to 2 |
Pages 1 to 2 |
Pages 1 to 2 |
| Results & Dividend |
Page 21 |
Page 23 |
Pages 24 to 25 |
Pages 3 to 5 |
| Investment Policy |
N/A | Pages 11 to 12 |
Pages 9 to 10 |
Pages 7 to 8 |
| Chairman's Statement |
Pages 5 to 8 |
Page 3 to 7 |
Pages 3 to 8 |
Pages 3 to 5 |
| Manager's Review |
Pages 9 to 13 |
Pages 15 to 19 |
Pages 13 to 19 |
Pages 9 to 10 |
| Portfolio Summary |
Pages 14 to 15 |
Pages 13 to 14 |
Pages 11 to 12 |
Pages 11 to 13 |
| Valuation Policy |
Pages 40 to 41 |
Pages 45 to 46 |
Pages 53 to 54 |
Pages 19 to 20 |
Certain financial information of MIG 4 is also set out below:
| Year ended 31 January 2008 |
Year ended 31 January 2009 |
Year ended 31 January 2010 |
Six month period ended 31 July 2010 |
|
|---|---|---|---|---|
| Investment income |
£1,039,725 | £1,099,562 | £489,753 | £321,660 |
| Profit/loss on ordinary activities before taxation |
£581,497 | £(2,194,332) | £713,131 | £1,322,897 |
| Earnings per MIG 4 Share |
3.04p | (10.79)p | 3.56p | 6.35p |
| Dividends per MIG 4 Share |
2p | 2p | 3p | 1p |
| Total assets |
£24,246,406 | £21,173,848 | £21,477,891 | £23,710,729 |
| NAV per MIG 4 Share |
117.41p | 104.61p | 106.34p | 110.85p |
As at 31 July 2010, the date to which the most recent unaudited half-yearly financial statements on MIG 4 were published, MIG 4 had unaudited net assets of £23,309,955. Updated financial information on MIG 4 to 31 October 2010 will be available in December 2010.
As at 31 July 2010, the date to which the most recent unaudited half-yearly financial statements on MIG 4 have been drawn up, MIG 4 had unaudited net assets of £23,309,955. MIG 4 is now seeking to raise up to £6.66 million through the Offer for which the associated expenses will be 5.5 per cent. of the gross proceeds. The impact of the Offer on MIG 4's earnings should be accretive to the extent, if any, that interest earned on the proceeds will exceed expenses. The assets of MIG 4 will be increased by the net proceeds of the Offer.
2.3 On 13 February 2002, I&G passed a resolution approving, subject to the sanction of the High Court, the cancellation of the share premium account (such cancellation being subsequently confirmed by the High Court on 1 May 2002 and registered at Companies House on 9 May 2002).
2.4 The authorised share capital of I&G was increased to £1,100,000 by the creation of 25,000,000 S ordinary shares of 1p each in the capital of I&G pursuant to a resolution passed on 9 October 2007.
| Date | Class of Share |
Issue/Purchase | Number |
|---|---|---|---|
| 21/12/2009 | I&G ordinary |
Purchase | 203,770 |
| 28/01/2010 | I&G ordinary |
Purchase | 132,508 |
| 26/02/2010 | I&G ordinary |
Purchase | 33,659 |
| 18/03/2010 | I&G ordinary |
Issue | 112,768 |
| 18/03/2010 | S ordinary |
Issue | 6,674 |
2.8 I&G issued and bought back I&G Shares and S ordinary shares of 1p each as follows between 30 September 2009 and to 26 March 2010:
| Date | Class of Share |
Issue/Purchase | Number |
|---|---|---|---|
| 31/03/2010 | I&G ordinary |
Purchase | 78,742 |
| 01/06/2010 | I&G ordinary |
Purchase | 70,950 |
| 03/06/2010 | I&G ordinary |
Purchase | 99,682 |
| 09/06/2010 | I&G ordinary |
Purchase | 157,819 |
| 24/06/2010 | I&G ordinary |
Purchase | 147,884 |
| 21/07/2010 | I&G ordinary |
Purchase | 103,388 |
| 04/08/2010 | I&G ordinary |
Purchase | 92,641 |
| 27/08/2010 | I&G ordinary |
Purchase | 60,692 |
| 13/09/2010 | I&G ordinary |
Purchase | 183,445 |
| 30/09/2010 | I&G ordinary |
Purchase | 42,578 |
(c) in addition to existing authorities I&G was empowered to make market purchases (within the meaning of section 693(4) of CA 1985) of its own shares (either for cancellation or for the retention as treasury shares for future re-issue or transfer) provided that:
2.13 There are no other shares or loan capital in I&G under option or agreed conditionally or unconditionally to be put under option nor does I&G hold shares in treasury.
| Issued | |||
|---|---|---|---|
| Number | £ | ||
| I&G Shares |
43,650,280 | 436,502.80 |
3.1 As at 11 November 2010 (this being the latest practical date prior to publication of this document), the interests of the I&G Directors (and their immediate families) in the issued share capital of I&G were as follows:
| I&G Shares |
% of issued I&G Share capital |
|
|---|---|---|
| Colin Hook |
30,587 | 0.08 |
| Helen Sinclair |
10,605 | 0.03 |
| Jonathan Cartwright |
nil | nil |
3.2 The I&G Directors intend to subscribe for Offer Shares under the Offer for the following aggregate amounts:
| £ | |
|---|---|
| Colin Hook |
20,000 |
| Helen Sinclair |
15,000 |
| Jonathan Cartwright |
20,000 |
Jonathan Cartwright was a director of Caledonia El Distribution Limited until December 2009. The company was placed in members voluntary liquidation in April 2010. Jonathan was also a director of the following companies which have all voluntarily been struck off the register of companies:
3.12 There has been no official public incrimination and/or sanction of any I&G Director by statutory or regulatory authorities (including designated professional bodies) and no I&G Director has ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of a company or from acting in the management or conduct of the affairs of any company during the previous five years.
reviewing the scope and the results of the audit and ensuring its cost effectiveness.
4.9 All of the Directors of I&G are also members of the nomination and remuneration committee with Colin Hook acting as Chairman. The nomination and remuneration committee members (who have responsibility for reviewing the remuneration of the I&G Directors) will meet at least annually to consider the levels of remuneration of the Directors, specifically reflecting the time commitment and responsibilities of the role. The committee will also undertake comparisons and reviews to ensure that the levels of remuneration paid are broadly in-line with industry standards. The nomination and remuneration committee also meets annually to consider the composition and balance of skills, knowledge and experience of all of the I&G Directors and would make nominations to the I&G Directors in the event of a vacancy. New I&G Directors are required to resign at the annual general meeting following appointment and then thereafter every three years.
Set out below is a summary of all contracts (not being contracts entered into in the ordinary course of business) entered into by I&G in the last two years that are material and all other contracts (not being contracts entered into in the ordinary course of business) that contain any provision under which I&G has an obligation or entitlement which is material to I&G as at the date of the document.
5.1 An investment management agreement dated 29 March 2010 between I&G (1) and Matrix (2) (as varied by a deed of variation dated 12 November 2010) pursuant to which Matrix is appointed to provide advisory investment management services in respect of I&G's investments in VCT qualifying investments.
Matrix is entitled to an annual management fee of 2.4 per cent. of the net asset value per annum (0.4 per cent. of such fee being subject to a minimum of £130,000 and a maximum of £150,000 the remainder of such fee not being subject to any cap) of I&G, payable quarterly in arrears, together with any applicable VAT (the minimum and maximum payments in respect of the element of the fee equivalent to 0.4 per cent. of the net assets to be increased to £150,000 and £170,000 respectively provided that the Offer raises more than £3 million for I&G).
The above fees are subject to an annual expenses cap of over and above 3.25 per cent. of the net assets of I&G by way of a reduction of fees due to Matrix in the following accounting period(s). For these purposes annual expenses include the normal running costs of I&G (including irrecoverable VAT but excluding annual trail commission and performance incentive payments). The amount of the excess is borne in full by Matrix.
The agreement is terminable by either party by 12 months' notice by any party subject to earlier termination by any party in the event of, inter alia, a party having a receiver, administrator or liquidator appointed or committing a material breach of the agreement or by I&G if it fails to become, or ceases to be, a VCT for tax purposes or where Matrix ceases to be authorised by the Financial Services Authority or if there is a change in control of Matrix. The agreement contains provisions indemnifying Matrix against any liability not due to its default, gross negligence, fraud or breach of the FSMA.
5.2 A performance incentive agreement dated 16 December 2008 (effective from 12 September 2007) between I&G (1) Foresight Group LLP (2) and Matrix (3) as varied by a deed of
termination and variation between I&G (1) and Matrix (2) dated 29 March 2010 pursuant to which I&G granted to each of Matrix and Foresight Group LLP (the former joint investment manager of I&G), the right to receive performance incentive payments in connection with the management of the former I&G ordinary shares fund.
Matrix is entitled to receive an annual performance payment of 20 per cent. of any excess (over the investment growth hurdle detailed below) of realised Gains over realised Losses from its own portfolio during each relevant Calculation Period, provided that:
As new investments in the I&G ordinary shares fund are completed by Matrix, 70% thereof are added into the calculation of the Embedded Value at cost.
Such performance incentive payment due will be payable, in such form (in cash or in the form of a share issue subscribed at nominal value calculated as the number of I&G Shares represented by dividing the amount of the payment due by the NAV of an I&G Share as at the date of payment) as agreed between Matrix and I&G, annually by 31 January following the relevant Calculation Date.
The first Calculation Date was 30 September 2008 and is, thereafter, 30 September in each year. If a Calculation Period is longer or shorter than 12 months the investment growth hurdle will be pro rated accordingly.
"Calculation Period" means the relevant accounting period of I&G.
"Calculation Date" means the last day of the relevant accounting period of I&G.
"Embedded Value" means the value of the I&G portfolio managed by Matrix as at 30 June 2007 plus (i) the value as at 31 August 2007 of Nova Capital Management Limited's investments which Matrix agreed to provide investment services for; (ii) at cost, any further investments made in respect of the I&G ordinary shares fund; (iii) any investments made in respect of the former I&G S share fund; and (iv) 70% of all new investments made by I&G since the merger of the I&G ordinary share and I&G S share funds.
"Gains" will mean the realised excess over an individual investment's valuation comprised in Embedded Value, received in cash and/or pre-completion dividend strips and/or bankguaranteed loan notes during the relevant Calculation Period.
"Losses" will mean the realised deficit below an individual investment's valuation comprised in Embedded Value, received in cash and/or pre-completion dividend strips and/or bankguaranteed loan notes during the relevant Calculation Period.
"Surplus Income" means the income received from investments less pro rata share of the annual expenses of I&G (including trail commission but excluding performance incentive payments) but after the deduction of any taxation liabilities thereon.
Foresight Group LLP (the former joint investment manager of I&G) has an identical performance incentive arrangement in respect for the portfolio within the former I&G ordinary shares fund (i.e. prior to the merger of the I&G ordinary share and I&G S share funds) it was previously responsible for managing which, following the termination of its appointment, reduces proportionally over the ten years following such termination.
The investment objective of I&G is to provide private investors with an attractive return, by maximising a stream of dividend distributions from the income and capital gains generated by a diverse and carefully selected portfolio of investments.
I&G invests in companies at various stages of development. In some instances this may include investments in new and secondary issues of companies which may already be quoted on AIM or PLUS Markets.
I&G's investment policy is to invest primarily in a diverse portfolio of UK unquoted companies. Investments are usually, structured as part loan and part equity in order to receive regular income and to generate capital gains from trade 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 incumbent management teams in acquiring the business they manage but do not yet own. Investments are primarily made in companies that are established and profitable.
I&G has a small legacy portfolio of investments in early stage and technology companies from its period prior to 30 September 2008, when it was a multi-managed VCT. These represented 14.2% of the value of the aggregate combined net assets of I&G at 30 September 2010. Uninvested funds are held in cash and lower risk Money Market Funds.
In order to maximise income returns, I&G's cash and liquid resources can be invested in a range of instruments of varying maturities, subject to the overriding criterion that the risk of loss in I&G's capital be minimised.
The companies in which investments are made must have no more than £15 million of gross assets at the time of investment to be classed as a VCT qualifying holding. The funds raised by I&G after 6 April 2006 (being the former S ordinary share fund) are subject to a £7 million gross assets test for an investment to be a VCT qualifying holding.
The investment policy is designed to ensure that the Company continues to qualify and is approved as a VCT by HMRC. Amongst other conditions, the Company may not invest more than 15 per cent. of its investments in a single company and must have at least 70 per cent. by value of its investments throughout the period in shares or securities comprised in VCT qualifying
holdings, of which a minimum overall of 30 per cent. by value (70 per cent. for funds raised from an effective date to be specified) must be in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules). In addition, although the Company can invest less than 30 per cent. (70 per cent. for funds raised from an effective date to be specified by statute) of an investment in a specific company in ordinary shares it must have at least 10 per cent. by value of its total investments in each VCT qualifying company in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules).
The Company initially holds its funds in a portfolio of readily realisable interest-bearing investments and deposits, maximising income return, whilst minimising the risk of a loss to capital. The investment portfolio of qualifying investments is built up over a three year period with the aim of investing and maintaining at least 70 per cent. of net funds raised in qualifying investments.
Risk is spread by investing in a number of different businesses across different industry sectors. To reduce the risk of high exposure to equities, each qualifying investment is structured to maximise the amount which may be invested in loan stock. Initial investments in Qualifying Companies are generally made in amounts ranging from £200,000 to £1 million at cost. No holding in any one company will represent more than 10 per cent. of the value of the Company's investments at the time of investment. Ongoing monitoring of each investment is carried out by Matrix, generally through taking a seat on the board of each Qualifying Company.
The Company aims to invest in larger, more mature unquoted companies through investing alongside the three other VCTs advised by Matrix with a similar investment policy. This enables the Company to participate in combined investments advised on by Matrix of up to £5 million.
(d) not more than 20 per cent. of I&G's gross assets will at any time be invested in the securities of property companies.
6.4 Matrix has and will have sufficient and satisfactory relevant experience in advising on investments of the size and type in which I&G proposes to make. The I&G Directors will also ensure that the board of I&G and any additional or replacement investment advisers have and will have sufficient and satisfactory experience in advising on such investments.
Save for the fees paid to Matrix, Matrix-Securities Limited and Foresight Group LLP under the arrangements set out at paragraphs 5.1 to 5.3 and the fees paid to the I&G Directors (including fees paid to former I&G Directors) as detailed in paragraph 3.4 above, fees paid to Matrix-Securities Limited in respect of promotion fees of £635,182 (2008) and fees paid to Matrix Corporate Capital LLP in respect of broker fees of £6,664 (2009) and approximately £11,750 (current year) (I&G has also bought I&G Shares for an aggregate consideration of £942,554 from Matrix Corporate Capital LLP under the buy-back policy in the year ended 30 September 2010), there were no related party transactions or fees paid during the years ended 30 September 2007, 2008 and 2009 or to date in the current financial year.
The issue of Offer Shares to persons resident in or citizens of jurisdictions outside the UK may be affected by the laws of the relevant jurisdiction. Such investors should inform themselves about and observe any legal requirements, in particular:
The following paragraphs, which are intended as a general guide only and are based on current legislation and HMRC practice, summarise advice received by the I&G Directors as to the position of shareholders who hold I&G Shares other than for trading purposes. Any person who is in any doubt as to his taxation position or is subject to taxation in any jurisdiction other than the United Kingdom should consult his professional advisers.
10.10 I&G does not have any major Shareholders and no Shareholders have different voting rights. To the best of the knowledge and belief of the I&G Directors, I&G is not directly controlled by any other party and at the date of the Prospectus, there are no arrangements in place that may, at a subsequent date, result in a change of control of I&G.
10.11I&G and its Shareholders are subject to the provisions of the Takeover Code and the Companies Acts, which require shares to be acquired/transferred in certain circumstances.
All of I&G investments as at 30 September 2010, which are analysed below, are in the UK and are valued in sterling.
| Sector | per cent. by cost |
per cent. by value |
|---|---|---|
| Media | 8.62 | 13.88 |
| Software & computer services |
14.06 | 17.62 |
| Construction and building materials |
8.90 | 3.55 |
| Support services |
21.93 | 20.37 |
| Technology, hardware & equipment |
18.11 | 5.21 |
| General retailers |
13.06 | 17.13 |
| Consumer services |
2.12 | 0.76 |
| Personal goods |
2.06 | 7.86 |
| Food production and distribution |
6.71 | 8.89 |
| Pharmaceuticals | 1.69 | 2.52 |
| Industrial engineering |
2.29 | 1.41 |
| Healthcare equipment & services |
0.45 | 0.80 |
| Type | per cent. by cost |
per cent. by value |
|---|---|---|
| Unlisted ordinary shares |
39.20 | 37.73 |
| Unlisted loan stock and preference shares or loans |
38.45 | 38.40 |
| Cash/liquidity | 22.35 | 23.87 |
| Total | 100 | 100 |
There has been no material change to the above analysis since 30 September 2010, the date to which the last unaudited financial statements for I&G have been published.
I&G has produced annual statutory accounts for the three financial years ended 30 September 2007, 2008 and 2009 and unaudited information in the half-yearly financial statements for the six month period ended 31 March 2010. The auditors, PKF (UK) LLP, Registered Auditor, of Farringdon Place, 20 Farringdon Road, London EC1M 2AP have reported on the annual statutory accounts without qualification and without statements under section 237(2) or (3) of CA 1985 or sections 495 to 497 of CA 2006 (as applicable).
The annual reports referred to above were prepared in accordance with UK generally accepted accounting practice (GAAP), the fair value rules of the Companies Acts and the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts'. The annual reports contain a description of I&G's financial condition, changes in financial condition and results of operation for each relevant financial year and, together with the halfyearly report for the six month period ended 31 March 2010, are being incorporated by reference and can be accessed at the following website:
Where these documents make reference to other documents, such other documents are not incorporated into and do not form part of this Prospectus.
| Description | 2007 Annual Report |
2008 Annual Report |
2009 Annual Report |
2010 Half-Yearly Report |
|---|---|---|---|---|
| Balance Sheet |
Page 41 |
Page 49 |
Page 59 |
Page 13 |
| Income Statement (or equivalent) |
Page 40 |
Page 48 |
Page 58 |
Pages 11 to 12 |
| Statement showing all changes in equity (or equivalent note) |
Page 42 |
Page 50 |
Page 60 |
Page 14 |
| Cash Flow Statement |
Page 43 |
Page 51 |
Page 61 |
Page 15 |
| Accounting Policies and Notes |
Pages 44 to 56 |
Pages 52 to 71 |
Pages 62 to 82 |
Pages 17 to 23 |
| Auditor's Report |
Pages 38 to 39 |
Pages 46 to 47 |
Pages 56 to 57 |
n/a |
Such information also includes operating/financial reviews as follows:
| Description | 2007 Annual Report |
2008 Annual Report |
2009 Annual Report |
2010 Half-Yearly Report |
|---|---|---|---|---|
| Objective | Inside front cover |
Inside front cover |
Inside front cover |
Inside front cover |
| Performance Summary |
Page 1 |
Page 1 |
Page 1 |
Page 1 |
| Results & Dividend |
Page 22 |
Page 29 |
Pages 28 to 29 |
Pages 3 to 5 |
| Investment Policy |
N/A | Pages 11 to 12 |
Pages 10 to 11 |
Page 7 |
| Chairman's Statement |
Pages 2 to 5 |
Pages 4 to 9 |
Pages 4 to 9 |
Pages 3 to 4 |
| Manager's Review |
Pages 7 to 16 |
Pages 17 to 24 |
Pages 12 to 19 |
Page 10 |
| Portfolio Summary |
Pages 17 to 18 |
Pages 14 to 15 |
Pages 20 to 22 |
Pages 8 to 9 |
| Valuation Policy |
Page 44 |
Page 52 |
Pages 62 to 63 |
n/a |
This information has been prepared in a form consistent with that which will be adopted in I&G's next published annual financial statements having regard to accounting standards and policies and legislation applicable to those financial statements.
Certain financial information of I&G is also set out below:
| Year ended 30 September 2007 |
Year ended 30 September 2008 |
Year ended 30 September 2009 |
Six month period ended 31 March 2010 |
|
|---|---|---|---|---|
| Investment income |
£981,124 | £1,454,724 | £948,329 | £263,467 |
| Profit/loss on ordinary activities before taxation |
£(3,047,580) | £(5,440,373) | £(3,233,631) | £762,657 |
| Earnings per share |
(7.85)p ordinary share |
(15.06)p ordinary share |
(8.73)p ordinary share |
2.18p |
| (n/a) S ordinary share |
(0.04)p S ordinary share |
(1.41)p S ordinary share |
I&G Share |
|
| Dividends per I share |
5.75p ordinary share |
2.0p ordinary share |
4p ordinary share |
2.5p |
| (n/a) S ordinary share |
(nil) S ordinary share |
(nil) S ordinary share |
I&G Share |
|
| Total assets |
£38,264,210 | £41,384,876 | £36,209,780 | £36,108,379 |
| NAV per share |
100.52p ordinary share |
83.56p ordinary share |
71.45p ordinary share |
94.20p |
| (n/a) S ordinary share |
94.59p S ordinary share |
93.18p S ordinary share |
I&G Share |
The information in the above table for the years ended 30 September 2007, 2008 and 2009 is, as relevant, for the I&G ordinary shares of 1p each and S ordinary shares of 1p each before the merger of the I&G ordinary shares of 1p into the S ordinary shares of 1p and subsequent redesignation into I&G Shares.
As at 31 March 2010, the date to which the most recent unaudited half-yearly financial information on I&G has been drawn up, I&G had unaudited net assets of £35,730,150. As at 30 September 2010 I&G had unaudited net assets of £36,604,696.
As at 31 March 2010, the date to which the most recent unaudited half-yearly financial statements on I&G have been drawn up, I&G had net assets of £35.7 million. I&G is now seeking to raise up to £6.66 million through the Offer for which the associated expenses will be 5.5 per cent. of the gross proceeds. The impact of the Offer on I&G's earnings should be accretive to the extent, if any, that interest earned on the proceeds will exceed expenses. The assets of I&G will be increased by the net proceeds of the Offer.
Set out below are the largest investments held by each Company (which includes each investment with a value of greater than 5 per cent. of their respective gross assets and which have an aggregate value of greater than 50 per cent. of their respective gross assets), as at the date of this document.
The Venture Capital Investments set out below represent the Companies' 15 largest investments (excluding acquisition companies and liquidity funds). These comprise 48.1 per cent. of the aggregate investment portfolios (including acquisition companies, cash and liquidity funds) of the Companies.
All of the companies below, as at the date of their last published accounts, are profitable based on EBITA. Matrix believe that EBITA is a more meaningful measure of an investee company's underlying profitability to VCT investors. This is because earnings are calculated before deducting loan stock interest (which is part of the return to VCT investors earned by the Matrix structure of investment) and other interest.
For MIG, the current cost is the original investment cost made by both MIG and Matrix Income & Growth 3 VCT plc, less capital repayments to 30 September 2010.
| DiGiCo Europe Limited – Original investment July 2007 |
||||||||
|---|---|---|---|---|---|---|---|---|
| MIG | MIG 4 |
I&G | Year ended |
31 December 2009 (£'000) |
||||
| Current cost |
£963,102 | £495,652 | £325,594 | Sales | 12,922 | |||
| Valuation | £3,554,179 | £1,688,891 | £1,201,553 | EBITA | 3,026 | |||
| Valuation methodology |
Earnings multiple (for all Companies) |
Profit/(Loss) before tax |
2,758 | |||||
| Equity/voting rights |
12.7% | 6.5% | 4.3% | Retained profit/(loss) |
3,327 | |||
| Percentage of investment portfolio |
9.5% | 7.2% | 3.3% | Net assets |
5,660 | |||
| Activity: Manufacture of digital sound mixing consoles. Location: Chessington, Surrey. |
| ATG Media Holdings Limited – Original investment October 2008 |
|||||||
|---|---|---|---|---|---|---|---|
| MIG | MIG 4 |
I&G | Year ended |
30 December 2009 (£'000) |
|||
| Current cost |
£1,636,105 | £1,000,000 | £1,000,000 | Sales | 6,118 | ||
| Valuation | £2,253,262 | £1,225,512 | £1,377,208 | EBITA | 873 | ||
| Valuation methodology |
Earnings multiple (for all Companies) |
Profit/(Loss) before tax |
223 | ||||
| Equity/voting rights |
14.0% | 8.5% | 8.5% | Retained profit/(loss) |
153 | ||
| Percentage of investment portfolio |
6.0% | 5.2% | 3.7% | Net assets |
2,010 | ||
| Activity: Publisher of the leading newspaper serving the UK antiques trade and online action platform operator. |
Location: London.
| Monsal Holdings Limited – Original investment December 2007 | ||||||||
|---|---|---|---|---|---|---|---|---|
| MIG | MIG 4 | I&G | Year ended | 31 December 2009* (£'000) |
||||
| Current cost | £1,173,974 | £636,013 | £426,164 | Sales | 6,743 | |||
| Valuation | £2,119,510 | £1,147,620 | £768,505 | EBITA | 475 | |||
| Valuation methodology |
Recent investment price (for all Companies) |
Profit/(Loss) before tax |
223 | |||||
| Equity/voting rights |
11.8% | 6.4% | 4.3% | Retained profit/(loss) |
(476 | |||
| Percentage of investment portfolio |
5.7% | 4.87% | 2.1% | Net assets | 1,397 | |||
| Activity: Engineering services to the water and waste sectors. Location: Mansfield, Nottinghamshire. *figures are consolidated. |
| CB Imports Group Limited* – Original investment December 2009 | ||||||||
|---|---|---|---|---|---|---|---|---|
| MIG | MIG 4 | I&G | Year ended | 31 December 2009* (£'000) |
||||
| Current cost | £2,000,000 | £1,000,000 | £1,000,000 | Sales | 19,755 | |||
| Valuation | £2,398,914 | £1,000,000 | £1,199,310 | EBITA | 2,434 | |||
| Valuation methodology |
Earnings multiple |
Cost** | Earnings multiple |
Profit/(Loss) before tax |
2,224 | |||
| Equity/voting rights |
12.01% | 6.00% | 6.00% | Retained profit/(loss) |
5,004 | |||
| Percentage of investment portfolio |
6.4% | 4.24% | 3.3% | Net assets | 8,358 |
Activity: Importer and distributor of artificial flowers, floral sundries and home décor products. Location: East Ardsley, West Yorkshire.
*Figures relate to principal operating subsidiary acquired, being CB Imports Limited (financial information for the 14 month period ended 31 December 2009 for CB Imports Group Limited is as follows: Sales: £840,000, EBITA: £(350,000), Loss before tax: £366,000, Retained loss: £397,000 and Net assets: £4,591,000.
**MIG 4's valuation methodology with change to an earning's multiple basis when MIG 4's next valuations are finalised.
| British International Holdings Limited – Original investment May 2006 | |||||||
|---|---|---|---|---|---|---|---|
| MIG | MIG 4 | I&G | Year ended | 31 December 2009 (£'000) |
|||
| Current cost | £2,068,182 | £295,455 | £590,909 | Sales | 16,050 | ||
| Valuation | £2,787,334 | £333,626 | £796,381 | EBITA | 976 | ||
| Valuation methodology |
Earnings multiple (for all Companies) |
Profit/(Loss) before tax |
(390) | ||||
| Equity/voting rights |
17.5% | 2.5% | 5.0% | Retained profit/(loss) |
1,688 | ||
| Percentage of investment portfolio |
7.4% | 1.4% | 2.2% | Net assets | 2,970 | ||
| Activity: Helicopter service operator. Location: Sherbourne, Dorset. |
| Iglu.com Holidays Limited – Original investment December 2009 | ||||||||
|---|---|---|---|---|---|---|---|---|
| MIG | MIG 4 | I&G | Year ended | 31 May 2010* (£'000) |
||||
| Current cost | £1,421,750 | £878,249 | £1,000,001 | Sales | 56,617** | |||
| Valuation | £2,295,395 | £878,249 | £1,616,116 | EBITA | 974 | |||
| Valuation methodology |
Earnings multiple |
Cost*** | Earnings multiple |
Profit/(Loss) before tax |
1,040 | |||
| Equity/voting rights |
11.6% | 7.2% | 8.1% | Retained profit/(loss) |
2,849 | |||
| Percentage of investment portfolio |
6.1% | 3.73% | 4.4% | Net assets | 5,151 |
Activity: Online ski and cruise travel agent.
Location: Wimbledon, London.
* figures relate to principal operating subsidiary acquired, being IGLU.com Limited (financial information for the five month period to 31 May 2010 for IGLU.com Holidays Limited is as follows: Sales: £27,731,000**, EBITA: £701,000, Profit/loss before tax: £510,000, Retained profit/loss: £242,000 and Net assets: £5,525,000).
**underlying retail value of sales.
***MIG 4's valuation methodology with change to an earning's multiple basis when MIG 4's next valuations are finalised.
| Focus Pharma Holdings Limited – Original investment October 2007 | ||||||||
|---|---|---|---|---|---|---|---|---|
| MIG | MIG 4 | I&G | Year ended | 31 December 2009 (£'000) |
||||
| Current cost | £1,250,411 | £772,451 | £516,900 | Sales | 16,997 | |||
| Valuation | £1,711,649 | £1,033,227 | £707,569 | EBITA | 1,151 | |||
| Valuation methodology |
Earnings multiple (for all Companies) |
Profit/(Loss) before tax |
207 | |||||
| Equity/voting rights |
4.9% | 3.1% | 2.1% | Retained profit/(loss) |
(45) | |||
| Percentage of investment portfolio |
4.6% | 4.4% | 1.9% | Net assets | 2,917 | |||
| Activity: Licensing and distribution of generic pharmaceuticals. Location: Burton upon Trent, Staffordshire. |
| VSI Limited – Original investment April 2006 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| MIG | MIG 4 | I&G | Year ended | 31 December 2009 (£'000) |
|||||
| Current cost | £533,888 | £111,928 | £245,596 | Sales | 4,399 | ||||
| Valuation | £1,691,907 | £335,948 | £777,937 | EBITA | 560 | ||||
| Valuation methodology |
Earnings multiple (for all Companies) |
Profit/(Loss) before tax |
(35) | ||||||
| Equity/voting rights |
20.1% | 4.2% | 9.2% | Retained profit/(loss) |
325 | ||||
| Percentage of investment portfolio |
4.5% | 1.4% | 2.1% | Net assets | 976 | ||||
| Activity: Software for CAD and CAM vendors. Location: Sheffield. |
| Westway Services Holdings (2010) Limited – Original investment June 2009 | |||||
|---|---|---|---|---|---|
| MIG | MIG 4 | I&G | Year ended | 28 February 2010 (£'000) |
|
| Current cost | £456,280 | £327,616 | 422,122 | Sales | 17,369 |
| Valuation | £956,139 | £660,501 | £884,557 | EBITA | 2,793 |
| Valuation methodology |
Earnings multiple (for all Companies) |
2,797 | |||
| Equity/voting rights |
5.1% | 3.2% | 4.7% | Retained profit/(loss) |
4,400 |
| Percentage of 2.6% 2.8% 2.4% Net assets 4,401 investment portfolio |
|||||
| Activity: Installation, service and maintenance of air conditioning systems. Location: Greenford, Middlesex. |
| Camwood Limited – Original investment September 2003 | ||||||
|---|---|---|---|---|---|---|
| MIG | MIG 4 | I&G | Year ended | 31 March 2009 (£'000) |
||
| Current cost | £456,280 | £327,616 | 422,122 | Sales | 17,369 | |
| Valuation | £0 | £0 | £2,182,692 | EBITA | 22 | |
| Valuation methodology |
– | – | Earnings multiple |
Profit/(Loss) before tax |
(55) | |
| Equity/voting rights |
0% | 0% | 31.6% | Retained profit/(loss) |
(704) | |
| Percentage of 0% 0% 5.9% Net assets (281) investment portfolio |
||||||
| Activity: Provider of software repackaging services. Location: London. |
| Amaldis (2008) Limited – Original investment August 2009 | ||||||
|---|---|---|---|---|---|---|
| MIG | MIG 4 | I&G | Year ended | 28 February 2010 (£'000) |
||
| Current cost | £0 | £0 | £80,313 | Sales | 24,164 | |
| Valuation | £0 | £0 | £1,965,586 | EBITA | 3,118 | |
| Valuation methodology |
– | – | Earnings multiple |
Profit/(Loss) before tax |
299 | |
| Equity/voting rights |
0% | 0% | 9.20% | Retained profit/(loss) |
(439) | |
| Percentage of 0% 0% 5.3% Net assets 1,086 investment portfolio |
||||||
| Activity: Manufacturer and distributor of beauty products. Location: Hayes, Middlesex. |
| Youngman Group Limited – Original investment October 2006 | ||||||
|---|---|---|---|---|---|---|
| MIG | MIG 4 | I&G | Year ended | 30 June 2009 (£'000) |
||
| Current cost | £1,000,052 | £500,026 | £1,000,052 | Sales | 26,251 | |
| Valuation | £700,992 | £349,983 | £700,992 | EBITA | 188 | |
| Valuation methodology |
Fair value supported by review of loan stock security (for all Companies) |
Profit/(Loss) before tax |
(1,238) | |||
| Equity/voting rights |
8.49% | 4.24% | 8.49% | Retained profit/(loss) |
3,895 | |
| Percentage of 1.9% 1.5% 1.9% Net assets 4,675 investment portfolio |
||||||
| Activity: Manufacturer of ladders and access towers. Location: Maldon, Essex. |
| Vectair Holdings Limited – Original investment January 2006 | ||||||
|---|---|---|---|---|---|---|
| MIG | MIG 4 | I&G | Year ended | 31 October 2009 (£'000) |
||
| Current cost | £560,302 | £100,000 | £215,914 | Sales | 8,552 | |
| Valuation | £951,273 | £168,738 | £366,575 | EBITA | 531 | |
| Valuation methodology |
Earnings Multiple (for all Companies) |
Profit/(Loss) before tax |
351 | |||
| Equity/voting rights |
12.0% | 2.1% | 4.6% | Retained profit/(loss) |
1,047 | |
| Percentage of 2.5% 0.7% 1% Net assets 2,840 investment portfolio |
||||||
| Activity: Design and sale of washroom products. Location: Basingstoke, Hampshire. |
| Image Source Group Limited – Original investment June 2003 | ||||||
|---|---|---|---|---|---|---|
| MIG | MIG 4 | I&G | Year ended | 31 December 2009 (£'000) |
||
| Current cost | £0 | £0 | £305,000 | Sales | 7,144 | |
| Valuation | £0 | £0 | £1,399,114 | EBITA | 406 | |
| Valuation methodology |
– | – | Earnings multiple |
Profit/(Loss) before tax |
235 | |
| Equity/voting rights |
0% | 0% | 39.6% | Retained profit/(loss) |
2,201 | |
| Percentage of 0% 0% 3.8% Net assets 2,601 investment portfolio |
||||||
| Activity: Royalty-free picture library. Location: London. |
| Racoon International Holdings Limited – Original investment December 2006 | |||||
|---|---|---|---|---|---|
| MIG | MIG 4 | I&G | Year ended | 31 March 2010 (£'000) |
|
| Current cost | £1,663,816 | £406,805 | £550,852 | Sales | 3,555 |
| Valuation | £735,973 | £195,903 | £243,664 | EBITA | 410 |
| Valuation methodology |
Earnings multiple (for all Companies) |
Profit/(Loss) before tax |
(321) | ||
| Equity/voting rights |
23.3% | 5.7% | 7.7% | Retained profit/(loss) |
(2,076) |
| Percentage of 2.0% 0.8% 0.7% Net assets (785) investment portfolio |
|||||
| Activity: Marketing and sale of hair extensions and related products Location: Southam, Warwickshire. |
The following acquisition company represents more than 5 per cent. of MIG's investment portfolio.
| Aust Recruitment Group Limited | ||||||
|---|---|---|---|---|---|---|
| MIG | MIG 4 | I&G | Year ended | 31 July 2009 (£'000) |
||
| Current cost | £2,000,000 | £0 | £1,000,000 | Sales | – | |
| Valuation | £2,000,000 | £0 | £1,000,000 | EBITA | (8) | |
| Valuation methodology |
Cost | – | Cost | Profit/(Loss) before tax |
(219)* | |
| Equity/voting rights |
32.67% | 0% | 16.33% | Retained profit/(loss) |
(293)* | |
| Percentage of investment portfolio |
5.3% | 0% | 2.7% | Net assets | 908* |
Activity: Aust Construction Investors Limited changed its name to Aust Recruitment Group Limited and acquired RDL Corporation Limited, a recruitment provider within the pharmaceuticals, business intelligence and IT sectors, on 28 October 2010. Location: Bristol, Avon.
*Profit before tax was reduced by £226,000 and Retained profits and Net assets were reduced by £289,000, by an accrual for future loan redemption premium, which has subsequently been cancelled.
In addition, the following liquidity funds also represent more than 5 per cent. of at least one of the VCTs:
| Fidelity International Cash Fund plc (managed by FIL Fund Management (Ireland) Limited) |
|||||
|---|---|---|---|---|---|
| MIG MIG 4 I&G |
|||||
| Amount invested |
£2,164,689 | £792,637 | £4,182,636 | ||
| Valuation | £2,164,689 | £792,637 | £4,182,636 | ||
| Valuation methodology |
Market valuation (for all Companies) |
||||
| Equity/voting rights: |
n/a (for all Companies) |
||||
| Percentage of investment portfolio |
5.8% | 3.36% | 11.3% |
| Institutional Cash Series plc (managed by Blackrock Asset Management Ireland Limited) |
|||||
|---|---|---|---|---|---|
| MIG MIG 4 I&G |
|||||
| Amount invested |
£1,038,946 | £1,907,689 | £966,062 | ||
| Valuation | £1,038,946 | £1,907,689 | £966,062 | ||
| Valuation methodology |
Market valuation (for all Companies) |
||||
| Equity/voting rights: |
n/a (for all Companies) |
||||
| Percentage of investment portfolio |
2.8% | 8.10% | 2.6% |
| Global Treasury Funds plc (managed by RBS Asset Management (Dublin) Limited) |
||||||
|---|---|---|---|---|---|---|
| MIG MIG 4 I&G |
||||||
| Amount invested |
£1,292,418 | £2,406,296 | £1,080,206 | |||
| Valuation | £1,292,418 | £2,406,296 | £1,080,206 | |||
| Valuation methodology |
Market valuation (for all Companies) |
|||||
| Equity/voting rights: |
n/a (for all Companies) |
|||||
| Percentage of investment portfolio |
3.5% | 10.21% | 2.9% |
Investment and portfolio information in this Part IV has been extracted from the Companies' accounting records (taken from the unaudited half-yearly financial statements to 31 July 2010 in respect of MIG 4, the unaudited management accounts to 30 September 2010 in respect of MIG and unaudited year end financial statements to 30 September 2010 in respect of I&G). In respect of the information on investee companies' sales, profits and losses and net assets in this Part IV, these have been taken from the latest financial year end accounts published by those investee companies as referred to in this Part Seven (''Third Party Information''). As at the date of this document, there has been no material change in the valuations set out in this Part IV since 31 July 2010 in respect of MIG 4 and 30 September 2010 in respect of MIG and I&G. The Third Party Information has been accurately reproduced and that, as far as the Companies are aware and are able to ascertain from information provided, no facts have been omitted which would render the reproduced information inaccurate or misleading.
Copies of the following documents will be available for inspection during usual business hours on weekdays, Saturdays and public holidays excepted, at the offices of Martineau, 35 New Bridge Street, London EC4V 6BW whilst the Offer is open:
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