Regulatory Filings • Nov 28, 2013
Regulatory Filings
Open in ViewerOpens in native device viewer
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN ANY DOUBT ABOUT WHAT ACTION YOU SHOULD TAKE, YOU ARE RECOMMENDED TO SEEK YOUR OWN FINANCIAL ADVICE IMMEDIATELY FROM YOUR STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL ADVISER AUTHORISED UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 ("FSMA").
THIS DOCUMENT CONSTITUTES A REGISTRATION DOCUMENT ("THE REGISTRATION DOCUMENT") ISSUED BY MOBEUS INCOME & GROWTH VCT PLC ("MIG"), MOBEUS INCOME & GROWTH 2 VCT PLC ("MIG 2"), MOBEUS INCOME & GROWTH 4 VCT PLC ("MIG 4") AND THE INCOME & GROWTH VCT PLC ("I&G") (TOGETHER "THE COMPANIES" AND EACH "A COMPANY") DATED 28 NOVEMBER 2013.
THIS DOCUMENT HAS BEEN PREPARED IN COMPLIANCE WITH THE PROSPECTUS DIRECTIVE, ENGLISH LAW AND THE RULES OF THE UK LISTING AUTHORITY ("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 PENNY EACH IN THE CAPITAL OF EACH OF THE COMPANIES 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 CONDUCT AUTHORITY ("FCA") IN ACCORDANCE WITH FSMA.
THIS REGISTRATION DOCUMENT, THE SECURITIES NOTE AND THE SUMMARY TOGETHER COMPRISE A PROSPECTUS ISSUED BY THE COMPANIES DATED 28 NOVEMBER 2013 ("THE PROSPECTUS"). THE PROSPECTUS HAS BEEN FILED WITH THE FCA IN ACCORDANCE WITH THE PROSPECTUS RULES AND YOU ARE ADVISED TO READ THE PROSPECTUS IN FULL.
The Companies and the Directors of the Companies (whose names are set out on page 5) accept responsibility for the information contained in the Registration Document. To the best of the knowledge of the Companies and the Directors of the Companies (who have taken all reasonable care to ensure that such is the case), the information contained in the Registration Document is in accordance with the facts and does not omit anything likely to affect the import of such information.
Linked offer for subscription to raise, in aggregate, £24 million through the issue of up to 10 million Offer Shares in each Company
| Mobeus Income & | Mobeus Income & | Mobeus Income & | The Income & |
|---|---|---|---|
| Growth VCT plc | Growth 2 VCT plc | Growth 4 VCT plc | Growth VCT plc |
| Registered in England & Wales | Registered in England & Wales | Registered in England & Wales | Registered in England & Wales |
| under number 05153931 | under number 03946235 | under number 03707697 | under number 04069483 |
| ISIN: GB00B01WL239 | ISIN: GB00B0LKLZ05 | ISIN: GB00B1FMDH51 | ISIN: GB00B29BN198 |
Howard Kennedy Corporate Services LLP (the sponsor to the Offer) and Mobeus Equity Partners LLP (the promoter to the Offer) are 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 Howard Kennedy Corporate Services LLP and Mobeus Equity Partners LLP (subject to the responsibilities and liabilities imposed by FSMA and the regulatory regime established thereunder) in providing advice in relation to the Offer. Howard Kennedy Corporate Services LLP and Mobeus Equity Partners LLP are authorised and regulated in the United Kingdom by the FCA.
SGH Martineau LLP, which is regulated in the United Kingdom by the Solicitors Regulation Authority, is acting as legal adviser to the Companies and no-one else and will not be responsible to anyone other than the Companies for the advice in connection with any matters referred to herein.
The attention of prospective investors in the Companies who are resident in, or citizens of, territories outside the United Kingdom is drawn to the information under the headings "Overseas Investors" in Part I, II, III and IV of this document. The Offer Shares will not be registered under the United States Securities Act 1933 or the United States Investment Company Act 1990 and no action has been, or will be, taken in any jurisdiction by, or on behalf of, the Companies or Mobeus Equity Partners LLP, which would permit a public offer of the Offer Shares in any jurisdiction other than the United Kingdom, nor has any such action been taken with respect to the possession or distribution of the Prospectus other than in the United Kingdom.
Application has been made to the UKLA for the Offer Shares to be admitted to the premium segment of the Official List and to the London Stock Exchange plc for such Offer Shares to be admitted to trading on its main 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 are available free of charge from the promoter of the Offer:
Mobeus Equity Partners LLP telephone: 020 7024 7600 30 Haymarket download: www.mobeusequity.co.uk/investor-area London SW1Y 4EX email: [email protected]
YOUR ATTENTION IS DRAWN TO THE RISK FACTORS ON PAGES 2 TO 4.
| Page | |
|---|---|
| RISK FACTORS | 2 |
| CORPORATE INFORMATION FOR THE COMPANIES | 5 |
| DEFINITIONS | 6 |
| THE DIRECTORS AND MOBEUS | 9 |
| MEMORANDA AND ARTICLES | 16 |
| PART I – MIG (A) General information (B) Analysis of the investment portfolio (C) Financial information |
26 |
| PART II – MIG 2 (A) General information (B) Analysis of the investment portfolio (C) Financial information |
44 |
| PART III – MIG 4 (A) General information (B) Analysis of the investment portfolio (C) Financial information |
61 |
| PART IV – I&G (A) General information (B) Analysis of the investment portfolio (C) Financial information |
80 |
| PART V - LARGEST INVESTMENTS OF THE COMPANIES | 99 |
| PART VI - DOCUMENTS AVAILABLE FOR INSPECTION | 105 |
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 conditions 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 intermediary authorised under FSMA. The attention of prospective investors is drawn to the following risks.
The past performance of the Companies and Mobeus is not an 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.
The Articles of each Company provide the opportunity for Shareholders of a Company to vote on the continuation of that Company at the annual general meeting falling after the fifth anniversary of the last allotment of shares. The allotment of Offer Shares pursuant to the Offer will, therefore, defer (in accordance with the Articles) the opportunity for Shareholders of a Company to vote on the continuation of that Company for at least five years and, as a result, both new and existing Shareholders may have to wait longer to realise their holding in the relevant Company, if no trading in the market is possible.
Investment in unquoted companies (including AIM and ISDX 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 investments in companies listed on the Official List.
Although Mobeus has seen a strong flow of opportunities, there can be no guarantee that suitable investment opportunities will be identified in order to meet each Company's objectives.
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.
Where more than one of the funds managed or advised by Mobeus wishes to participate in an investment opportunity, allocations will generally be made in proportion to the net asset value of each fund. When one of the funds managed or advised by Mobeus 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 in that fund 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% of a particular Company'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. This may have an impact on the investments the Companies can make and the returns achievable. Although Mobeus has seen a strong flow of new investment opportunities, there can be no guarantee that suitable investments will be identified in order to meet each Company's objective.
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.
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.
Any change of governmental, economic, fiscal, monetary or political policy, in particular current government spending reviews and cuts, 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 VCT status.
Many commentators believe that the UK economy will continue to face testing circumstances in the short to medium term that will hinder economic growth. Such conditions could adversely affect the ability of small companies to perform adequately, which could in turn reduce the returns earned by Investors.
The UK economy, and its related stock markets, currently face some unusually challenging conditions. Stock market and currency movements may cause the value of the Companies' investments, and the income from them, to fall as well as rise and investors may not get back the amount they originally invested.
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 upfront 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 relevant Company would also lose its exemption from corporation tax on its capital gains.
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. The value of the tax reliefs depends on the personal circumstances of the investors, who should consult their own tax advisers before making any investment.
VCT regulations introduced in 2012 restrict the ability of VCTs to make further investments in Money Market Funds. In response to this change, the Companies have diversified their portfolio of cash investments during the year and are no longer adding to their investment in Money Market Funds. The Companies continue to hold sums in a selection of Money Market Funds with AAA credit rating. However, the balance of cash and current asset investments is held on deposit across a range of other well-known financial institutions with a range of maturities. Whilst UK banks are at a recovery stage, systemic risk remains, which could in turn reduce the
returns earned by investors.
Changes in legislation concerning VCTs in relation to what constitutes qualifying holdings, qualifying trades and qualifying use of funds, may limit the number of qualifying investment opportunities, reduce the level of returns which would otherwise have been achievable or result in the Companies not being able to meet their objectives. Investors should note that funds raised after 5 April 2012 and used by an investee company for the acquisition of shares in another company are restricted from being qualifying holdings for VCT purposes, which may reduce the number of investment opportunities for such funds.
In July 2013, HMRC issued a consultation paper "Venture Capital Trusts share buy-backs", which contains proposals restricting tax relief on subscription for shares in VCTs after 5 April 2014 where, within six months, the investor disposes of shares in that VCT or a VCT with the same or similar investment management. If introduced, such proposals may lead to a restriction on income tax relief available to an investor for the issue of Offer Shares if, within six months, the investor disposes of Shares in any of the Companies. HMRC are also considering proposals relating to the availability of tax relief on dividends which are regarded by HMRC as returns of capital.
Keith Melville Niven (Chairman) Bridget Elisabeth Guérin Thomas Peter Sooke
Nigel Edward Melville (Chairman) Kenneth Charles Vere Nicoll Adam Fletcher Downs Kingdon Sally Louise Duckworth
Christopher Mark Moore (Chairman) Andrew Stephen Robson Helen Rachelle Sinclair
Colin Peter Hook (Chairman) Jonathan Harry Cartwright Helen Rachelle Sinclair
Investment Adviser, Administrator, Company Secretary and Promoter
Mobeus Equity Partners LLP 30 Haymarket London SW1Y 4EX
SGH Martineau LLP No. 1 Colmore Square Birmingham B4 6AA
Panmure Gordon (UK) Limited One New Change London EC4M 9AF
BDO LLP 55 Baker Street London W1U 7EU
Registrars for MIG 2, MIG 4 and I&G Capita Asset Services 34 Beckenham Road Beckenham Kent BR3 4TU Telephone Number: 0871 664 0324*
30 Haymarket London SW1Y 4EX
MIG 05153931 MIG 2 03946235 MIG 4 03707697 I&G 04069483
www.migvct.co.uk www.mig2vct.co.uk www.mig4vct.co.uk www.incomeandgrowthvct.co.uk
020 7024 7600
The City Partnership (UK) Limited Thistle House 21 Thistle Street Edinburgh EH2 1DF
Howard Kennedy Corporate Services LLP 19 Cavendish Square London W1A 2AW
PricewaterhouseCoopers LLP 1 Embankment Place London WC2N 6RH
Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS99 6ZZ Telephone Number: 0870 707 1155**
Further details on the costs of calls, opening hours and how to contact the Companies' registrars from abroad are detailed on their websites www.capitaregistrars.com/shareholders and www.investorcentre.co.uk
*Capita Asset Services telephone number is open between 8.30 a.m. and 5.30 p.m. (GMT) Monday to Friday (except UK public holidays). If telephoning from outside of the UK dial +44 20 3170 0187. Calls to Capita Asset Services' helpline are charged at 10p per minute (including VAT) plus your service providers' network extras. Calls from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones.
**Calls to Computershare 0870 number are often free if included in your plan, if not included, calls will be charged at no more than dialling a STD code (about 2p per minute usually depending on your supplier). Calls to the helpline from outside of the UK will be charged at applicable international rates.
The following definitions apply throughout this document unless the context otherwise requires:
| "AIFMD" | the Alternative Investment Fund Managers Directive 2011/61/EU |
|---|---|
| "AIM" | the Alternative Investment Market |
| "Allotment Formula" | the formula to calculate the number of Offer Shares to be issued by each Company to each investor as set out in Part Two of the Securities Note |
| "Articles" | the articles of association of MIG and/or MIG 2 and/or MIG 4 and/or I&G, as the context permits |
| "Boards" | the board of directors of MIG, MIG 2, 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" | the Companies Act 1985 (as amended) |
| "CA 2006" | the Companies Act 2006 (as amended) |
| "Capita Asset Services" |
a trading name of Capita Registrars Limited |
| "Closing Date" | the closing date of the Offer which is expected to be 12.00 noon on 30 April 2014, but the Boards reserve the right to extend the closing date of the Offer (to not later than 28 November 2014) or to close earlier if it is fully subscribed or otherwise at the Boards' discretion |
| "Companies" | MIG, MIG 2, MIG 4 and I&G (and each "a Company") |
| "Companies Acts" | CA 1985 and CA 2006 |
| "Directors" | the directors of MIG and/or MIG 2 and/or MIG 4 and/or I&G from time to time, as the context permits |
| "Early Investment Incentive" |
an amount equal to 1.25% of the respective Investment Amount on Applications which are received and accepted up to the earlier of the first £12 million being raised or to 7 February 2014, payable by Mobeus and from which will be used to purchase additional Offer Shares in the Companies as set out in Part Eight of the Securities Note |
| "EBITA" | a company's earnings before the deduction of interest, tax and amortisation |
| "FCA" | the Financial Conduct Authority |
| "FSMA" | the Financial Services and Markets Act 2000 (as amended) |
| "HMRC" | Her Majesty's Revenue & Customs |
| "Howard Kennedy" | Howard Kennedy Corporate Services LLP, the sponsor to the Offer |
| "I&G" | The Income & Growth VCT plc |
| "I&G Shares" | ordinary shares of 1p each in the capital of I&G |
| "Investment Amount" | the monetary amount of an Application accepted, ignoring the Early Investment Incentive and any waived 'execution only' initial commission and/or waived Mobeus promotion fee to be reinvested for additional Offer Shares |
| "IPEVC Valuation Guidelines" |
the International Private Equity and Venture Capital Valuation Guidelines |
| "ISDX" | the ICAP Securities & Derivatives Exchange, a prescribed market for the purposes of section 118 of Financial Services and Markets Act 2000 |
|---|---|
| "Listing Rules" | the Listing Rules of the UK Listing Authority |
| "London Stock Exchange" |
London Stock Exchange plc |
| "Memorandum" | the memorandum of association of MIG and/or MIG 2 and/or MIG 4 and/or I&G, as the context permits (and together "the Memoranda") |
| "MIG" | Mobeus Income & Growth VCT plc |
| "MIG Shares" | ordinary shares of 1p each in the capital of MIG |
| "MIG 2" | Mobeus Income & Growth 2 VCT plc |
| "MIG 2 Shares" | ordinary shares of 1p each in the capital of MIG 2 |
| "MIG 3" | Matrix Income & Growth 3 VCT plc |
| "MIG 4" | Mobeus Income & Growth 4 VCT plc |
| "MIG 4 Shares" | ordinary shares of 1p each in the capital of MIG 4 |
| "Mobeus" or "manager" |
Mobeus Equity Partners LLP, the investment adviser, administrator, company secretary and promoter to the Companies and which is authorised and regulated by the FCA |
| "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 or, as the case may be, share, 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, as determined by dividing the Investment Amount in a Company by the number of Ordinary Shares to be issued by that Company (in accordance with the Allotment Formula) |
| "Offer Shares" | the MIG Shares, MIG 2 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 |
| "Prospectus" | together, this 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 Chapter 4 of Part 6 of the Tax Act |
| "Receiving Agent" | The City Partnership (UK) Limited |
| "Registrar" | Capita Asset Services or Computershare Investor Services PLC, as the context permits |
| "Registration Document" |
this document |
| "Regulations" | the Uncertificated Securities Regulations 2001 |
| "Securities Note" | the securities note issued by the Companies dated 28 November 2013 in connection with the Offer |
| "Shareholder" | a holder of Shares in one or more of the Companies (as the context |
| permits) | |
|---|---|
| "Shares" | MIG Shares and/or MIG 2 Shares and/or MIG 4 Shares and/or I&G Shares (and each a "Share"), as the context permits |
| "Summary" | the summary issued by the Companies dated 28 November 2013 in connection with the Offer |
| "Tax Act" | the Income Tax Act 2007 (as amended) |
| "UKLA" or "UK Listing Authority" |
the FCA 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 Trust" or "VCT" |
a venture capital trust as defined in section 259 of the Tax Act |
As required by the Listing Rules, each of the Companies' Boards is independent of Mobeus. All Directors are independent of Mobeus except for Helen Sinclair as explained below.
Each Board has substantial experience of venture capital businesses and has overall responsibility for its Company's affairs, including determining the investment policy of the relevant Company and making investment decisions on the advice of Mobeus. Each Board also retains responsibility for approving both the valuations of its portfolio and the net assets of its Company (on the advice of Mobeus).
Keith has over 40 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 between 1986 and 1992 and chairman of its retail business, Schroder Unit Trusts Limited, from 1992 to 2001. He retired from Schroders in October 2001. Keith is a non-executive director of one other investment trust, Schroder Income Growth Fund plc. Keith is also an investment adviser to the Rolls-Royce Pension Fund, a member of the University of Glasgow Investment Advisory Committee and a director of the Trossachs Community Trust and Springfield Park (No 2) Management Company Limited. Keith was chairman of MIG 3 which was merged with MIG in May 2010.
Nigel was chairman of Emtelle Holdings Limited, the UK's leading supplier of fibre-optic ducting systems, until August 2008. He is a director of a number of other private companies. Between 1972 and 1995, he was an investment banker, latterly as a director of Barings responsible for international corporate finance. In 1995 he established Melville Partners to provide strategic consultancy to a range of international companies.
Christopher has considerable experience of the venture capital industry. After completing a law degree and qualifying as a chartered 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 turnaround of a public industrial group. Until May 2010, he was a director of MIG and until September 2010 he was a director of I&G. He was also a director of MIG 3 until it merged with MIG in 2010.
Colin has had extensive financial and commercial experience. He has worked in the City for more than 30 years. During this time, he has himself successfully founded two fund management companies and directed fund management operations for more than ten years. His City involvement includes mergers and acquisitions. From 1994 to 1997 he was the chief executive of Ivory and Sime plc. Until February 2013, he was the chief executive of Pole Star Space Applications Limited, a company which he helped to found in 1998 and which is today the world's leading provider of real-time tracking information for the maritime industry. He remains a director on this board. Until September 2010, he was chairman and a director of MIG 4.
Bridget has over 28 years' experience in the financial services industry. She was managing director of Matrix Money Management Limited between June 1999 and March 2011 and sat on the Matrix Group board between 2000 and 2009. Prior to joining Matrix, Bridget gained 14 years of retail investment fund experience at Schroder Unit Trusts Limited, Ivory & Sime and County NatWest. Bridget is currently a non-executive director of CCP Quantitative Fund, a Cayman Islands CTA Fund, CCP Core Macro Fund, Schroder Income Growth Fund plc and Charles Stanley Group plc. She is a member of the York Racecourse Committee and is a trustee of the York Racecourse Pension Fund. Bridget was a director of MIG 3 which merged with MIG in May 2010.
Tom is an experienced venture capitalist and is chairman of each of Travel à la Carte Limited and The Greek Property Agency Limited. In recent years he has been chairman and nonexecutive director of a number of quoted and unquoted private equity funds and other companies. Previously, 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 one of the co-founding members of the British Venture Capital Association. Tom was a director of MIG 3 which merged with MIG in May 2010.
Adam has over 20 years' experience as a turnaround specialist and of restoring companies to profitability. He led a management buyout of Robinson Electronics, a supplier of test equipment for electricity supply utilities. He then went on to turn around more than ten loss-making engineering and technology companies in the UK, France, Germany, Holland and Belgium. He is also the founder and CEO of i2O Water Limited
Sally has worked in the financial services sector since 1990 and in the private equity industry since 2000. An active angel investor, she sits on the board of several early stage companies. She is a qualified accountant, former investment banker and venture capitalist. From 2000 to 2004 she worked for Quester Capital Management Limited as part of the investment team for their VCTs.
Ken has over 40 years' corporate finance experience and retired from Matrix Corporate Capital LLP, which provided corporate finance and stockbroking services, in June 2009. He was a non executive director of Unicorn AIM VCT II plc until March 2010, when it merged with Unicorn AIM 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' experience as a non-executive director, including with investment companies. He is currently an executive director of First Integrity Limited (from December 2006) and a non-executive director of Brambletye School Trust Limited, Peckwater Limited, British Empire Securities and General Trust plc (from August 2008), Shires Income plc (from May 2008) 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, a non-executive director of Gate Gourmet Group Holding LLC from 2006 to 2007 and a non-executive director of M&G Equity Investment Trust plc from 2007 to 2011.
Jonathan is a qualified 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. Prior to this he was group financial controller at Hanson plc from 1984 to 1989. He was a non-executive director of Bristow Group Inc. (from 1996 to 2009) and of Serica Energy plc (from 2008 to 2012). He is non-executive chairman of BlackRock Income & Growth Investment Trust plc and also of Aberforth Geared Income Trust plc. He is also a non-executive director of Tennants Consolidated Limited. Jonathan has served on the Self-Managed Investment Trust Committee of the Association of Investment Companies (to December 2009).
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 helped raise Mobeus Income & Growth 2 VCT plc (formerly Matrix e-Ventures VCT plc). After leaving Matrix in 2005 she was a non-executive director of Hotbed Fund Managers Limited from 2006 to 2008. She is a non-executive director of Downing ONE VCT plc following the merger with Downing Income VCT 4 plc, Spark Ventures plc, is chairman of British Smaller Companies VCT plc and is a director of Octopus Eclipse VCT 3 plc (in liquidation) which recently completed a merger with Octopus Eclipse VCT plc. Helen also chairs the investment committees of the Third Sector Loan Fund and the Community Investment Fund which are part of Social and Sustainable Capital LLP Helen is a director of both I&G and MIG 4 and, as both are managed by Mobeus, is deemed not to be an independent director under 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 | Advance UK Trust PLC (in liquidation) Mobeus Income & Growth VCT plc Schroder Income Growth Fund plc Springfield Park (No. 2) Management Company Limited Trossachs Community Trust |
Impax Environmental Markets plc Matrix Income & Growth 3 VCT plc (dissolved) Schroder UK Growth Fund plc |
| Nigel Melville | Mobeus Income & Growth 2 VCT PLC Museum of Army Flying Limited (The) Museum of Army Flying Trading Company Limited (The) |
JPMorgan Chinese Investment Trust PLC |
| Christopher Moore | Bletchley Park Trust Limited British Eye Research Foundation Eye Research UK Fight for Sight Trading Limited Mobeus Income & Growth 4 VCT plc The Iris Fund for the Prevention of Blindness |
Helveta Limited Mobeus Income & Growth VCT plc Matrix Income & Growth 3 VCT plc (dissolved) The Income & Growth VCT plc |
| Colin Hook | Absolute Software (Australia) Pty Limited Absolute Software Inc IBIS Designs Limited (proposal to strike off) The Income & Growth VCT plc Pole Star Space Applications Limited The 9th/12th Royal Lancers (Prince of Wales's) Regimental Museum |
Absolute Maritime Tracking Services Inc Council of the Society of Maritime Industries Mobeus Income & Growth 4 VCT plc Pole Star Data Centre Services Limited |
| Bridget Guérin | Cantab Capital (Cayman) Limited Cantab Capital LTIP Limited CCP Core Macro Master Fund CCP Quantitative Fund Charles Stanley Group plc Mobeus Income & Growth VCT plc Schroder Income Growth Fund plc York Racecourse Knavesmire LLP |
Matrix Alternative Investment Strategies Fund Limited (Bermuda) Matrix (Bermuda) Limited Matrix Group Limited (in Liquidation) Matrix Income & Growth 3 VCT plc (dissolved) Matrix Money Management Limited (in Liquidation) Matrix-Securities Limited (in Liquidation) Matrix Structured Products Limited (Bermuda) Matrix UCITS Funds plc (in Liquidation) Meaujo (764) Limited (dissolved) Meaujo (765) Limited (dissolved) |
|---|---|---|
| Tom Sooke | Mobeus Income & Growth VCT plc Travel à la Carte Limited The Greek Property Agency Limited |
Braxxon Technology Limited (dissolved) Committed Capital VCT plc (dissolved) Kings Arms Yard VCT plc Matrix Income & Growth 3 VCT plc (dissolved) |
| Sally Duckworth | Beyond The Story Limited Mobeus Income & Growth 2 VCT PLC Stormagic Limited Superhit Limited Xanthic Limited |
Ashe Morris Limited Forty Six and Forty Eight Elm Park Road Management Company Limited Mysapient Limited (Dissolved) Out There Limited Tixdaq Limited Redkite Financial Markets Limited (Proposal to Strike Off) |
| Adam Kingdon | I20 Water Limited Mobeus Income & Growth 2 VCT PLC |
Adam Kingdon Associates Limited (Dissolved) Kingdon Burrows Performance Aircraft Limited (Dissolved) |
| Ken Vere Nicoll | Cross Point Trading (Pty) Ltd Mobeus Income & Growth 2 VCT PLC Tolwall Limited Tolwall Fund Investments LLP VP Platinum LLP VPP Nominees 2 Limited VPP Nominees 3 Limited VPP Nominees 4 Limited VPP Nominees 5 Limited VPP Nominees 6 Limited |
Data Continuity Group Limited Erros Limited Kelregal Limited (Dissolved) Matrix CC Limited (in Liquidation) Matrix Corporate Capital LLP (in Liquidation) Matrix Group Limited (in Liquidation) Matrix-Securities Limited (in Liquidation) St James's Partners Limited (Dissolved) Unicorn AIM VCT II PLC (Dissolved) VPP Nominees 1 Limited VPP Nominees Limited (Dissolved) VSP Nominee Limited (Dissolved) |
| Andrew Robson | Best Securities Limited Brambletye School Trust Limited British Empire Securities and General Trust plc First Integrity Limited JPMorgan Smaller Companies Investment Trust plc Mobeus Income & Growth 4 VCT plc Peckwater Limited Shires Income plc |
Gate Gourmet Group Holdings LLC Institute for food, brain and behaviour M&G Equity Investment Trust plc (in liquidation) Topshire Limited (dissolved) Wiston Investment Company Limited (dissolved) |
|---|---|---|
| Jonathan Cartwright | Aberforth Geared Income Trust plc Blackrock Income and Growth Investment Trust plc Tennants Consolidated Limited The Income & Growth VCT plc |
Aquilo Associates Limited Bristow Group Inc. (USA) Bristow Aviation Holdings Limited Buckingham Gate Limited Caledonia CCIL Distribution Limited Caledonia El Distribution Limited (dissolved) Caledonia Financial Limited Caledonia Group Services Limited Caledonia Industrial & Services Limited (dissolved) Caledonia Investments plc Caledonia Sloane Gardens Limited Caledonia Treasury Limited Easybox Self-Storage Limited Edinmore Investments Limited Garlandheath Limited Serica Energy plc Sloane Club Holdings Limited The Union-Castle Mail Steamship Company Limited Zulu Self Storage Properties Limited |
| Helen Sinclair | British Smaller Companies VCT plc Downing Income VCT 4 plc (in liquidation) Downing ONE VCT plc Hemstall Road Residents Co Limited Mobeus Income & Growth 4 VCT plc Octopus Eclipse VCT 3 plc (in liquidation) Spark Ventures plc The Income & Growth VCT plc |
Connection Capital Fund Managers Limited |
The Companies' investment manager is Mobeus, 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 7024 7600). Mobeus' registered office is 3rd Floor, 52 Jermyn Street, London SW1Y 6LX and its principal place of business is 30 Haymarket, London SW1Y 4EX. Mobeus is authorised and regulated by the Financial Conduct 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 Mobeus operates is the Limited Liability Partnership Act 2000 and the applicable provisions of the Companies Acts (and regulations made thereunder).
The origins of Mobeus date back to 1998 when its four founder executive partners began working together. Since 30 June 2012, Mobeus has been owned jointly by its partners.
Mobeus has now grown to seven partners and ten staff with over 160 years' investing experience among them. The team is wholly dedicated to the management and administration of VCTs.
Of the 31 VCT managers in the UK, Mobeus is the seventh largest with VCT funds under management, as at 8 November 2013, of approximately £180 million.
Mobeus entered the VCT industry advising two multi-manager VCTs as one of three managers each looking after a share of the assets. These VCTs, TriVen VCT plc and TriVest VCT plc, were launched in 1999 and 2000 respectively. Between 2004 and 2009, it became clear to the independent boards of each of those Companies that Mobeus was achieving the best performance of the managers and that Mobeus should be appointed as sole manager. TriVen VCT was renamed Matrix Income & Growth 4 VCT plc in October 2006 and subsequently renamed Mobeus Income & Growth 4 VCT plc in June 2012. TriVest VCT plc was re-named The Income & Growth VCT plc in October 2007. These are two of the Companies in this linked Offer.
Matrix E-Ventures Fund plc was launched in 2000 and changed its name to Matrix Venture Fund VCT plc in 2001. In 2005, the Company changed its investment strategy and name to Matrix Income and Growth 2 VCT plc and launched a new C ordinary share fund. The C shares were subsequently merged with the ordinary shares on 10 September 2010. The Company changed its name to Mobeus Income & Growth 2 VCT plc in June 2012. This is the third Company in this linked Offer.
Matrix Income & Growth VCT plc and Matrix Income & Growth 3 VCT plc were launched with Mobeus as their sole manager in 2004 and 2005 respectively. Matrix Income & Growth 3 VCT plc merged with Matrix Income & Growth VCT plc in 2010 and Matrix Income & Growth VCT plc changed its name to Mobeus Income & Growth VCT plc in June 2012. This is the fourth Company in this linked Offer.
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 Company's principal object is to carry on the business of a VCT.
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, two 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 five 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 ten 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 seven 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 the 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.
(iii) it is in favour of a single transferee or not more than four joint transferees;
(iv) it is duly stamped (if so required); and
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.
10.2 The Board shall restrict the borrowings of the Company and exercise all voting and other rights and powers of control exercisable by the Company in respect of its subsidiaries so as to procure (as regards its subsidiaries in so far as it can procure by such exercise) that the aggregate principal amount at any one time outstanding in respect of moneys borrowed by the Group (exclusive of moneys borrowed by one Group (being the Company and its subsidiaries from time to time) company from another) shall not at any time without the previous sanction of an ordinary resolution of the Company exceed an amount equal to the Adjusted Capital (as defined below) and Reserves (as defined below). For the purposes of MIG 4, such amount is limited to 0.5 times the Adjusted Capital and Reserves.
10.3 For these purposes only:
all as shown in the latest audited balance sheet of the Group but after:
(ii) the principal amount raised by any Group company by acceptances or under any acceptance credit;
(iii) the principal amount of any debenture (whether secured or unsecured) of any Group company beneficially owned otherwise than by a Group company;
but do not include:
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.
(b) Where the Board gives authority in relation to such a conflict:
(i) the Board may (whether at the time of giving the authority or at any time or times subsequently) impose such terms upon the Director concerned and any other Director with a similar interest as it may determine, including, without limitation, the exclusion of that Director and any other Director with a similar interest from the receipt of information, or participation in discussion (whether at meetings of the Board or otherwise) related to the conflict;
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:
The Company shall be entitled to sell at the best price reasonably obtainable any share of a member or any share to which a person is entitled by transmission if and provided that:
(a) during the period of 12 years no cheque, order or warrant sent by the Company in a manner authorised by these Articles has been cashed and during such period of 12 years at least three cash dividends have been paid and no dividend has been claimed;
The Board may with the authority of an ordinary resolution of the Company:
(ii) in a case where any sum is applied in paying amounts for the time being unpaid on any shares of the Company or in paying up in full debentures of the Company, the amount of the net assets of the Company at that time is not less than the aggregate of the called up share capital of the Company and its undistributable reserves as shown in the latest audited accounts of the Company or such other accounts as may be relevant and would not be reduced below that aggregate by the payment of it;
(c) resolve that any shares so allotted to any member in respect of a holding by him of any partly paid shares shall, so long as such shares remain partly paid, rank for dividends only to the extent that such partly paid shares rank for dividends;
(any agreement made under such authority being effective and binding on all such holders); and
(f) 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 CA 2006) 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 latter of the fifth anniversary of either (i) the last allotment of shares in the Company or (ii) the last continuation vote held, 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 unitised) 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 CA 2006, 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.
full out of the proceeds of the original offer for subscription on 5 October 2004. The authorised but unissued shares so arising were automatically redesignated as MIG Shares and MIG's articles of association were amended by the deletion of all references to the redeemable non-voting shares and the rights attaching to them pursuant to a special resolution passed on 12 May 2010.
| Date | Issue/Purchase | Number |
|---|---|---|
| 16/08/2013 | Purchase | 120,209 at 85.25p |
| 28/06/2013 | Purchase | 74,256 at 85.25p |
| 26/06/2013 | Purchase | 90,915 at 85.25p |
| 13/05/2013 | Purchase | 79,388 at 82.50p |
| 07/05/2013 | Issue | 183,984 at 95.40p |
| 10/04/2013 | Issue | 111,897 at 99.80p |
| 10/04/2013 | Issue | 338,694 at 97.40p |
| 08/04/2013 | Issue | 1,469,970 at 97.20p |
| 08/04/2013 | Purchase | 1,516,838 at 94.20p |
| 05/04/2013 | Issue | 972,698 at 97.40p |
| 04/04/2013 | Issue | 2,124,718 at 97.40p |
| 04/04/2013 | Issue | 8,089,335 at 97.20p |
| 04/04/2013 | Purchase | 8,356,555 at 94.20p |
| 28/03/2013 | Issue | 2,872,940 at 97.40p |
| 25/03/2013 | Purchase | 211,024 at 84.75p |
| 21/03/2013 | Purchase | 250,000 at 80.00p |
| 14/01/2013 | Issue | 2,086,509 at 94.60p |
| 20/12/2012 | Purchase | 44,007 at 79.50p |
| 20/12/2012 | Purchase | 70,000 at 79.50p |
| 21/11/2012 | Purchase | 185,447 at 78.50p |
| 29/08/2013 | Purchase | 269,294 at 76.75p |
| 22/08/2013 | Purchase | 82,850 at 81.75p |
| 02/08/2012 | Issue | 25,812 at 95.50p |
| 10/07/2012 | Issue | 373,146 at 102.10p |
| 29/06/2012 | Purchase | 65,152 at 79.50p |
| 28/06/2012 | Purchase | 51,000 at 79.50p |
|---|---|---|
| 10/05/2012 | Issue | 553,180 at 101.20p |
| 25/04/2012 | Purchase | 247,320 at 85.84p |
| 05/04/2012 | Issue | 1,078,724 at 101.20p |
| 04/04/2012 | Issue | 1,486,209 at 101.20p |
| 28/03/2012 | Purchase | 500,000 at 86p |
| 08/03/2012 | Issue | 1,763,460 at 101.20p |
| 08/03/2012 | Purchase | 425,000 at 79.00p |
| 21/12/2011 | Purchase | 133,675 at 79.00p |
| 18/11/2011 | Purchase | 200,000 at 78.15p |
| 10/10/2011 | Purchase | 64,371 at 77.25p |
| 30/09/2011 | Purchase | 398,009 at 77.25p |
| 19/08/2011 | Purchase | 245,186 at 81.08p |
| 06/07/2011 | Issue | 171,057 at 95.30p |
| 24/06/2011 | Purchase | 159,237 at 81.00p |
| 19/05/2011 | Purchase | 76,222 at 81.00p |
| 10/05/2011 | Issue | 359,076 at 100.60p |
| 08/04/2011 | Purchase | 452,608 at 86.78p |
| 05/04/2011 | Issue | 664,330 at 102.30p |
| 01/04/2011 | Issue | 848,270 at 102.30p |
| 31/03/2011 | Purchase | 492,478 at 86.66p |
| 25/03/2011 | Purchase | 460,000 at 83.25p |
| 22/03/2011 | Issue | 1,163,049 at 102.30p |
| 28/02/2011 | Issue | 327,164 at 102.30p |
| 21/01/2011 | Issue | 1,975,346 at 98.00p |
| 22/12/2010 | Purchase | 228,707 at 83.25p |
| 26/11/2010 | Purchase | 222,472 at 83.25p |
| 15/11/2010 | Purchase | 155,478 at 83.25p |
| 22/10/2010 | Purchase | 88,371 at 76.50p |
| 27/08/2010 | Purchase | 68,051 at 72.50p |
| 12/08/2010 | Purchase | 224,641 at 71.12p |
| 24/06/2010 | Purchase | 101,554 at 62.26p |
| 01/06/2010 | Purchase | 43,298 at 51.20p |
| 25/03/2010 | Purchase | 33,725 at 54.81p |
(b) That in substitution for any existing authorities the MIG Directors were empowered in accordance with sections 570 and 573 of CA 2006 to allot or make offers or agreements to allot or make offers or agreements to allot equity securities (as defined in section 560(1) of CA 2006) for cash, either pursuant to the authority given in accordance with section 551 of CA 2006 by paragraph (a) above 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 shall be limited to:
(i) the allotment of equity securities with an aggregate nominal value of up to but not exceeding £120,000 in connection with offer(s) for subscription; and
in each case where the proceeds may be used in whole or in part to purchase MIG Shares and provided that such authority shall expire on the conclusion of the annual general meeting of MIG to be held in 2014 (unless previously renewed, varied or revoked by MIG in general meeting), except that MIG may, before such expiry, make offers or agreements which would or might require equity securities to be allotted after such expiry and the MIG Directors may allot equity securities in pursuance of such offer or agreement as if the power conferred thereby had not expired.
It is the current intention of the Directors of MIG to renew these authorities at its annual general meeting convened in 2014.
| Issued | ||
|---|---|---|
| Number | £ | |
| MIG Shares | 63,507,073 | 635,070.73 |
| MIG Shares | % of Issued MIG Share capital |
|
|---|---|---|
| Keith Niven | 43,559 | 0.08% |
| Bridget Guérin | 32,052 | 0.06% |
| Tom Sooke | 20,236 | 0.04% |
year are expected to be £96,750 (plus, if applicable, VAT and employers National Insurance Contributions).
July 2013, provided that the company had no secured creditors and had an estimated £285,756.13 outstanding to unsecured creditors. There are sufficient realisations expected to enable a distribution to unsecured creditors, however as at 1 July 2013, it was not possible to estimate quantum or timings of such distributions. Bridget Guérin was also a director of Matrix-Securities Limited until her resignation in December 2009. The company subsequently entered into administration in November 2012. The administration ended in July 2013 and the company was subsequently placed into creditors' voluntary liquidation on 2 July 2013. The latest administrator's progress report dated 5 July 2013 for the period ended 1 July 2013, provided that the company had no secured creditors and had an estimated £33.6 million outstanding to unsecured creditors. It is anticipated that there will be sufficient realisations to enable a distribution to preferential creditors and unsecured creditors but it was not possible at the time of the report to estimate the quantum or timing of such distributions. In addition, Matrix Group Limited guaranteed two leases in the name of Matrix-Securities Limited over a property. A further claim from the landlord, in respect of both Matrix Group Limited and Matrix-Securities Limited's liability under the guarantee, is expected in due course. Bridget Guérin was also a director of Matrix Money Management Limited until her resignation in March 2011. The company was subsequently placed into creditors' voluntary liquidation on 3 December 2012. As at 3 December 2012, the date of the statement of the company's affairs, the company had no secured creditors and had outstanding unsecured non-preferential creditors' claims amounting to £118,816. The estimated total assets available to unsecured creditors was £61,124.
3.12 There has been no official public incrimination and/or sanction of any MIG Director by statutory or regulatory authorities (including designated professional bodies) and no MIG 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.
If, at any time, MIG's VCT status is lost, dealing in its shares and valuation of MIG's net asset value will normally be suspended, which will be communicated to shareholders on an appropriate regulatory information service until such time as proposals to continue as a VCT or to be wound up have been further announced. The MIG Directors do not anticipate any other circumstance under which valuations may be suspended.
4.4 MIG expects to co-invest with the other VCT funds advised by Mobeus, participating in equity investments up to £5 million, as long as the business has not received funds from any state-aided risk capital in the 12 months prior to the date of investment.
Where more than one of the funds managed or advised by Mobeus wishes to participate in an investment opportunity, allocations will generally be made in proportion to the net asset value of each fund at the date each investment proposal is forwarded to each Board. When one of the funds managed or advised by Mobeus 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% of a particular VCT's portfolio in VCT qualifying holdings. This may mean that MIG may receive a greater or lesser allocation than would otherwise be the case under the normal co-investment policy.
When MIG has insufficient funds available to satisfy its allocation, the balance shall be offered to one or more of the funds managed or advised by Mobeus who have funds available for new investments pro rata as between themselves.
Any variation from this co-investment policy, insofar as it affects MIG or where MIG makes any investment not at the same time and on the same terms as that made by other funds managed or advised by Mobeus, may only be made with the prior approval of the MIG Directors.
Save for the above, there are no material potential conflicts of interest which Mobeus may have as between its duty to MIG and duties owed by them to third parties and their interests.
reviewing MIG's internal control & risk management systems;
making recommendations to the MIG Directors in relation to the appointment of the external auditor;
The MIG Board has also considered the principles and recommendations of the AIC Code of Corporate Governance ("AIC Code") by reference to the AIC Corporate Governance Guide for Investment Companies ("AIC Guide"). The AIC Code, as explained by the AIC Guide, addresses all the principles set out in the UK Corporate Governance Code, as well as setting out additional principles and recommendations on issues that are of specific relevance to MIG.
The Financial Reporting Council has confirmed that in complying with the AIC Code, MIG meets its obligations in relation to the UK Corporate Governance Code and the Listing Rules. The MIG Board considers that reporting against the principles and recommendations of the AIC Code, and by reference to the AIC Guide (which incorporates the UK Corporate Governance Code), will provide better information to shareholders.
For the year ended 31 December 2012 and as at the date of this document, MIG has complied with the recommendations of the AIC Code and the relevant provisions of the UK Corporate Governance Code, except where noted below. There are certain areas of the UK Corporate Governance Code that the AIC does not consider relevant to investment companies and with which MIG does not specifically comply, of which the AIC Code provides dispensation. The areas and reasons for non-compliance are as follows:
MIG has not, therefore, reported further in respect of these provisions.
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.
Mobeus is entitled to receive performance incentive fees of an amount equal to 20% 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 6.88p per MIG Share per annum (index linked) subject to the maintenance of a NAV per MIG Share of 97.55p. 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 shortfall as at 30 September 2013 was 13.22p. No performance incentive fee has been paid to date.
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.
5.3 An offer agreement dated 19 January 2012 between MIG, MIG 4 and I&G (1), the MIG Directors (2) Mobeus (3) and Matrix Corporate Capital LLP (in liquidation) (4) whereby Mobeus agreed to act as promoter in connection with the 2011/2012 linked offer and Matrix Corporate Capital LLP agreed to act as sponsor in connection with the 2011/2012 linked offer. The agreement contains warranties given by MIG, MIG 4 and I&G and the MIG Directors to Mobeus and given by MIG, MIG 4 and I&G, the MIG Directors and Mobeus to Matrix Corporate Capital LLP. MIG, MIG 4 and I&G agreed to
pay Mobeus a commission of 5.5% of the gross amount subscribed under the 2011/2012 linked offer out of which all costs, charges and expenses of or incidental to the 2011/2012 linked offer were paid.
The objective of MIG is to provide investors with a regular income stream, by way of tax-free dividends generate from income and capital returns.
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 capital gains from realisations.
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 low risk money market funds.
The investment policy is designed to ensure that MIG continues to qualify and is approved as a VCT by HMRC. Amongst other conditions, MIG may not invest more than 15% of its investments in a single company or group of companies and must have at least 70% by value of its investments throughout the period in shares or securities in VCT qualifying holdings, of which a minimum overall of 30% by value (70% for funds raised from 6 April 2011) must be in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules). In addition, although MIG can invest less than 30% by value (70% for funds raised from 6 April 2011) of an investment in a specific company in ordinary shares it must have at least 10% 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 companies in which investments are made must have no more than £15 million of gross assets at the time of investment and £16 million immediately following the investment to be classed as a VCT qualifying holding.
MIG holds its liquid 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% 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.
MIG aims to invest in larger, more mature unquoted companies through investing alongside three other VCTs advised by Mobeus with a similar investment policy. This enables MIG to participate in combined investments by Mobeus of up to £5 million.
MIG's Articles permit borrowings of amounts up to 10% of the adjusted capital and reserves (as defined therein). MIG has never borrowed and the MIG Board has no current plans to undertake any borrowing.
The MIG 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 Mobeus and are then subject to formal approval by the MIG Directors.
Rules which specify that (i) MIG 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 must not conduct any trading activity which is significant in the context of its group as a whole; and (iii) MIG may not invest more than 10%, 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 will require the approval of MIG Shareholders pursuant to the Listing Rules. MIG intends to direct its affairs in respect of each of its accounting periods so as to qualify as a venture capital trust and accordingly:
Related party transactions for MIG undertaken in the three financial years ended 31 December 2010, 2011 and 2012 are set out in the respective audited report and accounts for those year ends, which, together with the unaudited half-yearly report for the six month period ended 30 June 2013, are incorporated by reference: in Notes 6 and 24 on pages 38 and 52 for the year ended 31 December 2010, in Notes 5 and 22 on pages 39 and 54 for the year ended 31 December 2011, on page 19 and in Note 3 on pages 35 and 36 for the year ended 31 December 2012 and in paragraph (d) of the responsibility statement of the Chairman's Letter on page 5 for the half year to 30 June 2013. Apart from the payment of the MIG Directors' remuneration on the basis set out in paragraph 3.4 above, investment management, administration and performance incentive fees as set out in paragraphs 5.1 and 5.2 above, and the promotion fees as set out in paragraphs 5.3, 5.5 and 5.7 above there have been no other related party payments in the current year to the date of this document. Save for the entering into of the offer agreement as set out in paragraph 5.8 above, MIG has not entered into any related party transactions within the meaning of IFRS or UK GAAP since 30 June 2013.
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 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.
10.1 Save for the movement of the unaudited NAV of 100.70p as at 30 June 2013 to 96.7p as at 30 September 2013 after payment of a dividend of 4p per MIG Share on 18 September 2013, there has been no significant change in the financial or trading position of MIG since 30 June 2013, the date to which the last unaudited half-yearly financial statements for MIG have been published.
All of MIG's investments as at the date of this document, which are analysed below, are in the UK and are valued in sterling.
| Sector | % by cost | % by value |
|---|---|---|
| Support Services | 40.7 | 39.3 |
| General Retailers | 23.5 | 21.0 |
| Technology, hardware and | 4.9 | 5.9 |
| equipment | ||
| Software and computer | 7.5 | 9.4 |
| services | ||
| Construction | 3.9 | 0.3 |
| Media | 9.7 | 16.3 |
| Pharmaceuticals | 2.2 | 3.8 |
| Personal goods | 3.7 | 0.3 |
| Acquisition vehicles | 3.0 | 2.7 |
| Healthcare equipment and | 0.9 | 1.0 |
| services |
| Type | % by cost | % by value |
|---|---|---|
| Unlisted ordinary shares | 16.9 | 24.8 |
| Unlisted loan stock and preference shares or loans |
52.1 | 46.8 |
| Listed ordinary shares | 0.6 | 0.7 |
| Cash/liquidity | 30.4 | 27.7 |
Save for loan repayments of £69,762 from Faversham Holdings Limited, £81,694 from DiGiCo Global Limited, £345,125 from Blaze Signs Holdings Limited and an investment of £2,526,470 into Virgin Wine Online Limited, there has been no material change to the valuations used to prepare the above analysis (30 September 2013 being the date on which those valuations were undertaken).
MIG has produced annual statutory accounts for the three financial years ended 31 December 2010, 2011 and 2012, and unaudited information in the half-yearly financial statements for the six month periods ended 30 June 2012 and 2013. The auditors, PKF (UK) LLP (as now acquired by BDO LLP of 55 Baker Street, London W1U 7EU) have reported on the annual statutory accounts without qualification and without statements under sections 495 to 497A of CA 2006.
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, together with the half-yearly reports for the six month periods ended 30 June 2012 and 2013, 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. The two tables below comprise a cross-referenced list of information incorporated by reference. The parts of these documents which are not being incorporated by reference are either not relevant for an investor or are covered elsewhere in the Prospectus.
| Description | 2010 Annual Report |
2011 Annual Report |
2012 Annual Report |
2012 Half Yearly Report |
2013 Half Yearly Report |
|---|---|---|---|---|---|
| Balance Sheet | Page 31 | Page 33 | Page 30 | Page 11 | Page 13 |
| Income Statement (or equivalent) |
Page 30 | Page 32 | Page 29 | Pages 9 to 10 |
Pages 11 to 12 |
| Statement showing all changes in equity (or equivalent note) |
Page 32 | Page 34 | Page 31 | Page 12 | Page 14 |
| Cash Flow Statement |
Page 33 | Page 35 | Page 32 | Page 13 | Page 15 |
| Accounting Policies and Notes |
Pages 34 to 53 |
Pages 36 to 54 |
Pages 33 to 52 |
Pages 14 to 18 |
Pages 16 to 20 |
| Auditor's Report | Page 29 | Page 31 | Page 28 | n/a | 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 | 2010 Annual |
2011 Annual |
2012 Annual |
2012 Half Yearly |
2013 Half Yearly |
|---|---|---|---|---|---|
| Report | Report | Report | Report | Report | |
| Objective | Inside front | Inside front | Inside front | Inside front | Inside front |
| cover | cover | cover | cover | cover | |
| Performance | Page 2 | Pages 2 to | Pages 2 to | Pages 1, 19 | Pages 1, |
| Summary | 3 | 3 | and 20 | 22 and 23 | |
| Results & Dividend | Page 15 | Page 18 | Page 17 | Pages 1 to | Pages 1 to |
| 2 | 2 | ||||
| Investment Policy | Page 1 | Page 1 | Page 1 | Page 5 | Page 6 |
| Chairman's | Pages 3 to | Pages 5 to | Pages 4 to | Pages 2 to | Pages 2 to |
| Statement | 4 | 7 | 6 | 3 | 4 |
| Manager's Review | Pages 5 to | Pages 8 to | Pages 7 to | Page 6 | Pages 7 to |
| 10 | 13 | 8 | 8 | ||
| Portfolio Summary | Pages 11 to | Pages 14 to | Pages 13 to | Pages 7 to | Pages 9 to |
| 12 | 15 | 14 | 8 | 10 | |
| Valuation Policy | Page 33 | Page 36 | Page 33 | Page 14 | Page 16 |
Certain financial information of MIG is also set out below:
| Year ended 31 December 2010 (audited) |
Year ended 31 December 2011 (audited) |
Year ended 31 December 2012 (audited) |
Six month period ended 30 June 2012 (unaudited) |
Six month period ended 30 June 2013 (unaudited) |
|
|---|---|---|---|---|---|
| Investment income | £931,019 | £1,681,991 | £1,785,771 | £867,906 | £1,816,882 |
| Profit/loss on ordinary activities before taxation |
£6,321,029 | £1,663,621 | £4,334,345 | £644,998 | £4,595,983 |
| Earnings per MIG Share |
19.25p | 3.89p | 9.55p | 1.45p | 8.75p |
| Dividends per MIG Share |
5.0p | 6.75p | 7.0p | 5.0p | 4.0p |
| Total assets | £38,855,033 | £40,957,212 | £43,418,876 | £42,348,329 | £54,395,050 |
| NAV per MIG Share | 96.7p | 95.6p | 94.2p | 91.1p | 100.7p |
As at 30 June 2013, the date to which the most recent unaudited half-yearly financial statements on MIG were published, MIG had unaudited net assets of £54.0 million. As at 30 September 2013, MIG had unaudited net assets of £51.8 million.
As at 30 June 2013, the date to which the most recent unaudited half-yearly financial statements on MIG have been drawn up, MIG had unaudited net assets of £54.0 million. MIG is now seeking to raise £6 million through the Offer for which the associated expenses will be 3.25% of the Investment Amount (assuming maximum subscription under the Offer and the Offer fundraising amount is not increased, but ignoring trail commission). The impact of the Offer on MIG's earnings, had the Offer been undertaken at the commencement of the period being reported on, should be accretive. The assets of MIG would have been increased by the net proceeds of the Offer if the transaction had been undertaken at the commencement of the period being reported on.
redeemed in full out of the proceeds of the original offer for subscription. The authorised but unissued shares so arising were automatically redesignated as MIG 2 ordinary shares of 1p each and MIG 2's articles of association were amended by the deletion of all references to the redeemable non-voting shares and the rights attaching to them.
| Date | Issue/Purchase | Number |
|---|---|---|
| 29/10/2013 | Purchase | 150,000 at 91.00p |
| 30/04/2013 | Purchase | 67,093 at 70.25p |
| 29/04/2013 | Purchase | 210,000 at 70.25p |
| 28/03/2013 | Purchase | 212,401 at 68.38p |
| 20/12/2012 | Purchase | 207,095 at 69.75p |
| 17/08/2012 | Purchase | 80,160 at 68.41p |
| 30/04/2013 | Purchase | 35,933 at 68.00p |
| 25/04/2012 | Purchase | 76,677 at 68.00p |
| 08/03/2012 | Purchase | 191,032 at 68.00p |
|---|---|---|
| 10/02/2012 | Purchase | 93,775 at 69.00p |
| 27/01/2012 | Purchase | 114,573 at 69.00p |
| 28/10/2011 | Purchase | 44,168 at 62.90p |
| 19/08/2011 | Purchase | 233,259 at 62.20p |
| 21/04/2011 | Purchase | 191,135 at 61.00p |
| 31/01/2011 | Purchase | 181,579 at 57.00p |
| 14/01/2011 | Purchase | 108,767 at 57.00p |
| 29/10/2010 | Purchase | 18,983 at 54.00p |
| 11/10/2010 | Purchase | 20,675 at 54.00p |
| 08/10/2010 | Purchase | 82,701 at 54.00p |
| 24/09/2010 | Purchase | 196,111 at 54.00p |
in each case where the proceeds may be used, in whole or in part, to purchase MIG 2 Shares in the market and provided that this authority shall expire (unless renewed, varied or revoked by MIG 2 in general meeting) on the conclusion of the annual general meeting to be held in 2014, except that MIG 2 may, before such expiry of this authority, make offers or agreements which would or might require equity securities to be allotted after such expiry and the MIG 2 Directors may allot equity securities in pursuance of such offer or agreement as if the authority conferred had not expired.
(c) That, in substitution for any existing authorities, MIG 2 was authorised pursuant to and in accordance with section 701 of CA 2006 to make one or more market purchases (within the meaning of section 693(4) of CA 2006) of MIG 2 Shares provided that:
It is the current intention of the Directors of MIG 2 to renew these authorities at its annual general meeting convened in 2014.
| Issued | ||||
|---|---|---|---|---|
| Number £ |
||||
| MIG 2 Shares | 33,920,716 | 339,207.16 |
| MIG 2 Shares | % of Issued MIG 2 Share capital |
|
|---|---|---|
| Nigel Melville | 43,720 | 0.18% |
| Adam Kingdon | 5,709 | 0.02% |
| Sally Duckworth | - | - |
| Ken Vere Nicoll | 54,705 | 0.23% |
3.9 The MIG 2 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 13 and 14.
3.10 No MIG 2 Director has any convictions in relation to fraudulent offences during the previous five years.
last statement of affairs was filed at Companies House, Matrix Corporate Capital LLP had an estimated deficit as regards to its member of £12.5 million.
Ken Vere Nicoll was also a director of Unicorn AIM VCT II plc which was placed into members' voluntary liquidation on 16 March 2010 pursuant to a section 110 Insolvency Act 1986 scheme of reconstruction with Unicorn AIM VCT plc. Unicorn AIM VCT II plc was neither insolvent nor owed any amounts to creditors at the time of its dissolution in August 2011.
Ken Vere Nicoll was also a director of the following companies which have all voluntarily been struck off the Register of Companies:
None of these companies was either insolvent or owed any amounts to creditors at the time of its respective dissolution.
3.12 There has been no official public incrimination and/or sanction of any MIG 2 Director by statutory or regulatory authorities (including designated professional bodies) and no MIG 2 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.
If, at any time, MIG 2's VCT status is lost, dealing in its shares and valuation of MIG 2's net asset value will normally be suspended, which will be communicated to shareholders on an appropriate regulatory information service until such time as proposals to continue as a VCT or to be wound up have been further announced. The MIG 2 Directors do not anticipate any other circumstance under which valuations may be suspended.
4.4 MIG 2 expects to co-invest with the other VCT funds advised by Mobeus, participating in equity investments up to £5 million, as long as the business has not received funds from any state-aided risk capital in the 12 months prior to the date of investment.
Where more than one of the funds managed or advised by Mobeus wishes to participate in an investment opportunity, allocations will generally be made in proportion to the net asset value of each fund at the date each investment proposal is forwarded to each Board. When one of the funds managed or advised by Mobeus 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% of a particular VCT's portfolio in VCT qualifying holdings. This may mean that MIG 2 may receive a greater or lesser allocation than would otherwise be the case under the normal co-investment policy
When MIG 2 has insufficient funds available to satisfy its allocation, the balance shall be offered to one or more of the funds managed or advised by Mobeus who have funds available for new investments pro rata as between themselves.
Any variation from this co-investment policy, insofar as it affects MIG 2 or where MIG 2 makes any investment not at the same time and on the same terms as that made by other funds managed or advised by Mobeus, may only be made with the prior approval of the MIG 2 Directors.
Save for the above, there are no material potential conflicts of interest which Mobeus may have as between its duty to MIG 2 and duties owed by them to third parties and their interests.
making recommendations to the MIG 2 Directors in relation to the appointment of the external auditor;
reviewing and monitoring the external auditor's independence;
The MIG 2 Board has also considered the principles and recommendations of the AIC Code of Corporate Governance ("AIC Code") by reference to the AIC Corporate Governance Guide for Investment Companies ("AIC Guide"). The AIC Code, as explained by the AIC Guide, addresses all the principles set out in the UK Corporate Governance Code, as well as setting out additional principles and recommendations on issues that are of specific relevance to MIG 2.
The Financial Reporting Council has confirmed that in complying with the AIC Code, MIG 2 meets its obligations in relation to the UK Corporate Governance Code and the Listing Rules. The MIG 2 Board considers that reporting against the principles and recommendations of the AIC Code, and by reference to the AIC Guide (which incorporates the UK Corporate Governance Code), will provide better information to shareholders.
For the year ended 30 April 2013 and as at the date of this document, MIG 2 has complied with the recommendations of the AIC Code and the relevant provisions of the UK Corporate Governance Code, except where noted below. There are certain areas of the UK Corporate Governance Code that the AIC does not consider relevant to investment companies and with which MIG 2 does not specifically comply, of which the AIC Code provides dispensation. The areas and reasons for non-compliance are as follows:
• in light of the responsibilities retained by the MIG 2 Board and its committees and of the responsibilities delegated to Mobeus, MIG 2 has not appointed a chief executive officer or executive directors; and
• due to the systems and procedures of Mobeus, the provision of VCT tax monitoring services by PricewaterhouseCoopers LLP, as well as the size of MIG 2's operations, the MIG 2 Board believe that an internal audit function is not appropriate.
MIG 2 has not, therefore, reported further in respect of these provisions.
Set out below is a summary of all contracts (not being contracts entered into in the ordinary course of business) entered into by MIG 2 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 2 has an obligation or entitlement which is material to MIG 2 as at the date of the document.
In respect of the former MIG 2 C ordinary shares fund, Mobeus is entitled to receive performance incentive fees of an amount equal to 20% of the excess of annual dividends paid to the holders of MIG 2 Shares above a target return of dividends of 6p per MIG 2 Share per annum (index linked) subject to the maintenance of a NAV per MIG 2 C ordinary share of 100p, adjusted to the proportion which the MIG 2 C ordinary shares aggregate merger net assets value represents of the entire merger net asset value, payable annually and subject to any cumulative shortfalls against the annual target return.
The dividend shortfall per former C ordinary share as at 31 July 2013 was 25.87p (£4,057,539 in aggregate), being 65% of the total shortfall at the year end (where 65% was the proportion of C ordinary shares to the total number of shares in issue at the date of the share merger) and taking into account the target rate of dividends and the dividends paid to shareholders.
The agreement will terminate automatically if MIG 2 enters into liquidation or if a receiver or manager is appointed or if a resolution is passed that MIG 2 is voluntarily wound up in accordance with the MIG 2 Articles.
promoter in connection with the Offer and Howard Kennedy has agreed to act as sponsor in connection with the Offer. The agreement contains warranties given by the Companies and the MIG 2 Directors to Mobeus and given by the Companies, the MIG 2 Directors and Mobeus to Howard Kennedy. The agreement contains warranties given by MIG, MIG 2, MIG 4 and I&G and the MIG 2 Directors to Mobeus and given by MIG, MIG 2, MIG 4 and I&G, the MIG 2 Directors and Mobeus to Howard Kennedy. The Companies have agreed to pay Mobeus a commission of 3.25% of the Investment Amount on each application received and accepted under the Offer out of which will be paid all costs, charges and expenses of or incidental to the Offer (other than trail commission and any amounts due from the Companies to the investor in connection with the facilitation of initial advisers)
The objective of MIG 2 is to provide investors with a regular income stream, arising both from the income generated by the companies selected for the portfolio and from realising any growth in capital.
MIG 2's policy is to invest primarily in a diverse portfolio of UK unquoted companies. Investments are 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 own. Investments are primarily made in companies that are established and profitable.
MIG 2's cash and liquid resources may be invested to maximise income returns in a range of instruments of varying maturities, subject to the overriding criterion that the risk of loss of 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 and £16 million immediately following the investment to be classed as a VCT qualifying holding.
The investment policy is designed to ensure that MIG 2 continues to qualify and is approved as a VCT by HMRC.
Amongst other conditions, MIG 2 may not invest more than 15% of its investments in a single company and must achieve at least 70% by value of its investments throughout the period in shares or securities in VCT qualifying holdings, of which a minimum overall of 30% (70% for funds raised from 6 April 2011) by value must be ordinary shares which carry no preferential rights. In addition, although MIG 2 can invest less than 30% by value (70% for funds raised from 6 April 2011) of an investment in a specific company in ordinary shares it must have at least 10% 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 investment manager aims to hold approximately 80% of net assets by value in
the Company's qualifying investments. The balance is held in readily realisable interest bearing investments and deposits and in some non-qualifying holdings in the same investee companies in which qualifying investments have been made.
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 using a significant proportion of loan stock (up to 70% of the total investment in each VCT qualifying company). Initial investments in VCT qualifying companies are generally made in amounts ranging from £200,000 to £2 million at cost, or such amounts as VCT legislation permits. Normally no holding in any one company will be greater than 10% (but in any event will not be greater than 15%) of the value of the Company's investments, based on cost, at the time of the investment. Ongoing monitoring of each investment is carried out by Mobeus, generally through taking a seat on the board of each VCT qualifying company.
MIG 2 aims to invest alongside the three other VCTs advised by Mobeus with a similar investment policy. This enables MIG 2 to participate in larger combined investments advised on by Mobeus.
MIG's 2 Articles permit borrowings of amounts up to 10% of the adjusted capital and reserves (as defined therein), although MIG 2 has never borrowed and the MIG 2 Board has no current plans to undertake any borrowing.
The MIG 2 Board has overall responsibility for MIG 2's affairs including the determination of its investment policy. Investment and divestment proposals are originated, negotiated and recommended by Mobeus and are then subject to formal approval by the MIG 2 Directors.
(c) none of the investments at the time of acquisition will represent more than 15% by VCT Value of MIG 2's investments; and
(d) not more than 20% of MIG 2's gross assets will at any time be invested in the securities of property companies.
Related party transactions for MIG 2 undertaken in the three financial years ended 30 April 2011, 2012 and 2013 are set out in the respective audited report and accounts for those year ends, which, together with the unaudited half-yearly report for the six month period ended 31 October 2012, are incorporated by reference: in Notes 4 and 24 on pages 41 and 59 for the year ended 30 April 2011, in Notes 3 and 23 on pages 36 and 55 for the year ended 30 April 2012, on page 20 for the year ended 30 April 2013 and on page 5 for the half year to 31 October 2012. Apart from the payment of the MIG 2 Directors' remuneration on the basis set out in paragraph 3.4 above and the investment management, administration and performance incentive fees as set out in paragraphs 5.1 and 5.2 above, there have been no other related party payments in the current year to the date of this document. Save for the entering into of the offer agreement as set out in paragraph 5.4 above, MIG 2 has not entered into any related party transactions within the meaning of IFRS or UK GAAP since 30 April 2013.
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:
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 2 Directors as to the position of the Companies' Shareholders who hold MIG 2 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 The issue costs payable by MIG 2 under the Offer (including irrecoverable VAT and sales commissions) have been fixed by the MIG 2 Directors at an amount equal to 3.25% of the Investment Amount on each application received and accepted under the Offer (but excluding permissible annual trail commission and any amounts due from MIG 2 to the investor in connection with the facilitation of initial advisers). Mobeus has agreed to indemnify MIG 2 in respect of any costs which are in excess of the above. The net proceeds for MIG 2 from the Offer will therefore amount to at least £5,805,000 (assuming maximum subscription under the Offer and the Offer fundraising amount is not increased, but ignoring trail commission).
10.6 MIG 2's capital resources are restricted insofar as they may be used only in putting into effect the investment policy described in paragraph 6 above.
All of MIG 2's investments as at today's date, which are analysed below, are in the UK and are valued in sterling.
| Sector | % by cost | % by value |
|---|---|---|
| Support Services | 47.5 | 41.7 |
| General Retailers | 16.3 | 15.8 |
| Technology, hardware and | 4.2 | 6.0 |
| equipment | ||
| Software and computer | 5.1 | 8.7 |
| services | ||
| Construction | 6.1 | 0.3 |
| Media | 8.5 | 16.9 |
| Pharmaceuticals | 1.9 | 3.5 |
| Personal goods | 4.4 | 0.9 |
| Acquisition vehicles | 5.0 | 4.8 |
| Healthcare equipment and | 1.0 | 1.4 |
| services |
| Type | % by cost | % by value |
|---|---|---|
| Unlisted ordinary shares | 21.1 | 26.2 |
| Unlisted loan stock and preference shares or loans |
52.1 | 48.2 |
| Listed ordinary shares | 1.8 | 1.0 |
| Cash/liquidity | 25.0 | 24.6 |
Save for loan repayments of £45,848 from Faversham Holdings Limited, £42,044 from DiGiCo Global Limited, £120,406 from Blaze Signs Holdings Limited and an investment of £1,999,770 into Virgin Wine Online Limited, there has been no material change to the valuations used to prepare the above analysis (31 July 2013 being the date on which those valuations were undertaken).
MIG 2 has produced annual statutory accounts for the three financial years ended 30 April 2011, 2012 and 2013, and unaudited information in the half-yearly financial statements for the six month period ended 31 October 2012. The auditors, PKF (UK) LLP (as now acquired by BDO LLP of 55 Baker Street, London W1U 7EU) have reported on the annual statutory accounts without qualification and without statements under sections 495 to 497A of CA 2006.
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 2's financial condition, changes in financial condition and results of operation for each relevant financial year and, together with the half-yearly report for the six month period ended 31 October 2012, 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. The two tables below comprise a cross-referenced list of information incorporated by reference. The parts of these documents which are not being incorporated by reference are either not relevant for an investor or are covered elsewhere in the Prospectus.
| Description | 2011 Annual Report |
2012 Annual Report |
2013 Annual Report |
2012 Half Yearly Report |
|---|---|---|---|---|
| Balance Sheet | Page 36 | Page 31 | Page 30 | Page 14 |
| Income Statement (or equivalent) |
Page 35 | Page 30 | Page 29 | Pages 12 to 13 |
| Statement showing all changes in equity (or equivalent note) |
Page 37 | Page 32 | Page 31 | Page 15 |
| Cash Flow Statement | Page 37 | Page 32 | Page 32 | Page 16 |
| Accounting Policies and Notes |
Page 38 | Page 33 | Page 33-57 | Pages 17 to 21 |
| Auditor's Report | Page 34 | Page 29 | Page 28 | N/A |
This information has been prepared in a form consistent with that which will be adopted in MIG 2'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 | 2011 Annual Report |
2012 Annual Report |
2013 Annual Report |
2012 Half Yearly Report |
|---|---|---|---|---|
| Objective | Inside front cover |
Inside front cover |
Inside front cover |
Inside front cover |
| Performance Summary |
Pages 2 to 4 | Pages 3 to 5 | Pages 2 to 3 | Pages 1 to 2 |
| Results & Dividend |
Pages 23 to 24 | Page 18 | Page 17 | Page 3 |
| Investment Policy |
Page 7 | Page 2 | Page 1 | Page 6 |
| Chairman's | Pages 5 to 6 | Pages 6 to 8 | Pages 4 to 6 | Pages 3 to 4 |
| Statement | ||||
|---|---|---|---|---|
| Manager's | Pages 11 to 12 | Pages 9 to 10 | Pages 7 to 8 | Pages 7 to 8 |
| Review | ||||
| Portfolio | Pages 8 to 10 | Pages 15 to 16 | Pages 13-15 | Pages 9 to 11 |
| Summary | ||||
| Valuation Policy | Page 38 | Page 33 | Page 33 | Page 17 |
Certain financial information of MIG 2 is also set out below:
| Year ended 30 April 2011 (audited) |
Year ended 30 April 2012 (audited) |
Year ended 30 April 2013 (audited) |
Six month period ended 31 October 2012 (unaudited) |
|
|---|---|---|---|---|
| Investment income |
£634,255 | £1,042,824 | £1,018,924 | £446,875 |
| Profit/loss on ordinary activities before taxation |
£3,250,053 | £1,333,109 | £2,685,399 | £99,025 |
| Earnings per MIG 2 Share |
12.49p | 5.23p | 10.87p | 0.40p |
| Dividends per MIG 2 Share |
4.0p | 4.0p | 4.0p | - |
| Total assets | £25,082,623 | £24,690,606 | £25,885,435 | £24,759,737 |
| NAV per MIG 2 Share |
96.2p | 98.7p | 106.8p | 99.2p |
As at 30 April 2013, the date to which the most recent audited annual financial statements on MIG 2 were published, MIG 2 had audited net assets of £25.7 million. As at 31 July 2013, MIG 2 had unaudited net assets of £27.4 million.
As at 30 April 2013, the date to which the most recent audited annual financial statements on MIG 2 have been drawn up, MIG 2 had audited net assets of £25.7 million. MIG 2 is now seeking to raise up to £6 million through the Offer for which the associated expenses will be 3.25% of the Investment Amount (assuming maximum subscription under the Offer and the Offer fundraising amount is not increased, but ignoring trail commission). The impact of the Offer on MIG 2's earnings, had the Offer been undertaken at the commencement of the period being reported on, should be accretive. The assets of MIG 2 would have been increased by the net proceeds of the Offer if the transaction had been undertaken at the commencement of the period being reported on.
2.2 To enable MIG 4 to obtain a certificate under section 117 of CA 1985, on 1 February 1999, 1,000,000 redeemable shares were allotted by MIG 4 to Matrix-Securities Limited at par for cash, paid up as to one quarter paid of their nominal value. Such redeemable shares were paid up in full and redeemed in full out of the proceeds of the original offer for subscription on 1 April 1999. The redeemable shares were automatically redesignated as MIG 4 shares and MIG 4's articles of association were amended by the deletion of all references to the redeemable shares and the rights attaching to them pursuant to a special resolution passed on 9 October 2007.
2.3 On 20 June 2001, MIG 4 passed a resolution approving, subject to the sanction of the Court, the cancellation of the share premium account (such cancellation being subsequently confirmed by the Court on 5 September 2001).
| Date | Issue/Purchase | Number |
|---|---|---|
| 08/11/2013 | Purchase | 108,423 at 104.00p |
| 26/09/2013 | Issue | 91,711 at 104.75p |
| 21/08/2013 | Purchase | 94,791 at 104.00p |
| 28/06/2013 | Purchase | 24,144 at 103.00p |
| 26/06/2013 | Purchase | 47,500 at 103.00p |
| 17/05/2013 | Issue | 242,671 at 101.50p |
| 14/05/2013 | Purchase | 73,307 at 101.50p |
| 07/05/2013 | Issue | 151,830 at 115.60p |
| 10/04/2013 | Issue | 89,900 at 124.20p |
| 10/04/2013 | Issue | 271,966 at 121.30p |
| 08/04/2013 | Issue | 1,488,988 at 121.00p |
| 08/04/2013 | Purchase | 1,536,003 at 117.30p |
| 05/04/2013 | Issue | 781,050 at 121.30p |
| 04/04/2013 | Issue | 1,706,119 at 121.30p |
| 04/04/2013 | Issue | 4,232,601 at 121.00p |
| 04/04/2013 | Purchase | 4,366,277 at 117.30p |
| 28/03/2013 | Issue | 2,306,901 at 121.30p |
| 28/03/2013 | Purchase | 219,000 at 102.13p |
| 13/01/2013 | Issue | 1,643,474 at 120.10p |
| 14/12/2012 | Purchase | 181,421 at 102.00p |
| 03/10/2012 | Purchase | 83,594 at 102.50p |
| 28/09/2012 | Purchase | 64,373 at 100.25p |
| 31/07/2012 | Purchase | 241,807 at 100.79p |
| 10/07/2012 | Issue | 319,880 at 119.10p |
| 02/07/2012 | Purchase | 123,190 at 100.87p |
|---|---|---|
| 28/06/2012 | Purchase | 76,000 at 99.50p |
| 13/06/2012 | Issue | 162,790 at 101.00p |
| 11/05/2012 | Purchase | 175,000 at 100.50p |
| 10/05/2012 | Issue | 453,297 at 123.50p |
| 02/05/2012 | Purchase | 150,000 at 105.00p |
| 04/04/2012 | Issue | 883,989 at 123.50p |
| 04/04/2012 | Issue | 1,217,929 at 123.50p |
| 08/03/2012 | Issue | 1,445,046 at 123.50p |
| 26/01/2012 | Purchase | 17,782 at 100.75p |
| 28/11/2011 | Purchase | 41,999 at 100.75p |
| 27/09/2011 | Purchase | 54,870 at 100.75p |
| 06/07/2011 | Issue | 60,875 at 100.70p |
| 06/07/2011 | Issue | 136,422 at 119.50p |
| 27/06/2011 | Purchase | 20,800 at 101.50p |
| 19/05/2011 | Purchase | 139,952 at 101.50p |
| 10/05/2011 | Issue | 302,300 at 119.50p |
| 05/04/2011 | Issue | 557,943 at 121.80p |
| 01/04/2011 | Issue | 712,407 at 121.80p |
| 22/03/2011 | Issue | 976,786 at 121.80p |
| 28/02/2011 | Issue | 274,774 at 121.80p |
| 31/01/2011 | Purchase | 43,252 at 103.50p |
| 21/01/2011 | Issue | 1,589,376 at 121.80p |
| 22/12/2010 | Purchase | 36,500 at 103.50p |
| 18/11/2010 | Issue | 13,241 at 98.80p |
| 02/11/2010 | Purchase | 28,750 at 99.00p |
| 20/10/2010 | Purchase | 66,000 at 99.00p |
| 28/07/2010 | Purchase | 194,144 at 94.84p |
| 30/06/2010 | Purchase | 36,044 at 93.63p |
| 14/06/2010 | Issue | 26,848 at 94.00p |
| 11/06/2010 | Forfeiture | 4,581 at 1.00p |
| 16/04/2010 | Purchase | 205,865 at 89.36p |
| 03/04/2010 | Issue | 21,030 at 112.40p |
| 03/04/2010 | Issue | 21,030 at 112.40p |
| 31/03/2010 | Issue | 1,462,871 at 112.40p |
| 21/12/2009 | Purchase | 7,500 at 86.67p |
| 09/11/2009 | Purchase | 33,228 at 83.22p |
| 07/10/2009 | Purchase | 12,500 at 79.00p |
| 28/08/2009 | Purchase | 27,500 at 78.46p |
| 30/06/2009 | Purchase | 12,500 at 79.00p |
| 27/04/2009 | Purchase | 57,000 at 83.68p |
to allot equity securities (as defined in section 560 (1) of CA 2006) for cash, pursuant to the authority given in accordance with section 551 of CA 2006 by paragraph (a) above or by way of a sale of treasury shares as if section 561(1) of CA 2006 did not apply to any such sale or allotment, provided that the power conferred shall be limited to:
in each case where the proceeds may be used, in whole or in part, to purchase MIG 4 Shares and provided that such authority shall expire (unless renewed, varied or revoked by MIG 4 in general meeting), on the conclusion of the annual general meeting of MIG 4 to be held in 2014, except that MIG 4 may, before the expiry of the authority, make offers or agreements 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.
It is the current intention of the Directors of MIG 4 to renew these authorities at its annual general meeting convened in 2014.
| Issued Number £ |
|||
|---|---|---|---|
| MIG 4 Shares | 45,127,218 | 451,272.18 |
| MIG 4 Shares | % of issued MIG 4 Share capital |
|
|---|---|---|
| Christopher Moore | 34,826 | 0.10% |
| Andrew Robson | 8,249 | 0.02% |
| Helen Sinclair | 12,220 | 0.03% |
financial period to 31 December 2013 are expected to be £90,500 (plus, if applicable, VAT and employers National Insurance Contributions).
Neither company was insolvent nor owed any amounts to creditors at the date of their respective dissolution.
(c) Helen Sinclair is a director of Octopus Eclipse VCT 3 plc which was placed into members' voluntary liquidation on 31 October 2012 pursuant to a section 110 Insolvency Act 1986 scheme of reconstruction with Octopus Eclipse VCT plc. Octopus Eclipse VCT 3 plc was neither insolvent nor owed any amounts to creditors at the date of this document. Helen Sinclair is also a director of Downing Income VCT 4 plc which was placed into members' voluntary liquidation on 12 November 2013 pursuant to a section 110 Insolvency Act 1986 scheme of reconstruction with Downing Distribution VCT 1 plc. Downing Income VCT 4 plc was neither insolvent nor owed any amounts to creditors at the date of this document.
3.12 There has been no official public incrimination and/or sanction of any MIG 4 Director by statutory or regulatory authorities (including designated professional bodies) and no MIG 4 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.
If, at any time, MIG 4's VCT status is lost, dealing in its shares and valuation of MIG 4's net asset value will normally be suspended, which will be communicated to shareholders on an appropriate regulatory information service until such time as proposals to continue as a VCT or to be wound up have been further announced. The MIG 4 Directors do not anticipate any other circumstance under which valuations may be suspended.
4.4 MIG 4 expects to co-invest with the other VCT funds advised by Mobeus, participating in equity investments up to £5 million, as long as the business has not received funds from any state-aided risk capital in the 12 months prior to the date of investment.
Where more than one of the funds managed or advised by Mobeus wishes to participate in an investment opportunity, allocations will generally be made in proportion to the net asset value of each fund at the date each investment proposal is forwarded to each Board. When one of the funds managed or advised by Mobeus 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% of a particular VCT's portfolio in
VCT qualifying holdings. This may mean that MIG 4 may receive a greater or lesser allocation than would otherwise be the case under the normal co-investment policy.
When MIG 4 has insufficient funds available to satisfy its allocation, the balance shall be offered to one or more of the funds managed or advised by Mobeus who have funds available for new investments pro rata as between themselves.
Any variation from this co-investment policy, insofar as it affects MIG 4 or where MIG 4 makes any investment not at the same time and on the same terms as that made by other funds managed or advised by Mobeus, may only be made with the prior approval of the MIG 4 Directors who are independent of Mobeus.
Save for the above, there are no material potential conflicts of interest which Mobeus may have as between its duty to MIG 4 and duties owed by them to third parties and their interests.
consider the composition and balance of skills, knowledge and experience of the MIG 4 Directors and would make nominations to the MIG 4 Directors in the event of a vacancy. New MIG 4 Directors are required to resign at the annual general meeting following appointment and then thereafter every three years. New directors will be provided with an induction pack and an induction session will be arranged in conjunction with the Board and Mobeus.
4.10 The Financial Conduct Authority requires all listed companies to disclose how they have applied the principles and complied with the provisions of the UK Corporate Governance Code (formerly the Combined Code) issued by the Financial Reporting Council in May 2010 for all companies who are now operating in financial years on or after 29 June 2010.
The MIG 4 Board has also considered the principles and recommendations of the AIC Code of Corporate Governance ("AIC Code") by reference to the AIC Corporate Governance Guide for Investment Companies ("AIC Guide"). The AIC Code, as explained by the AIC Guide, addresses all the principles set out in the UK Corporate Governance Code, as well as setting out additional principles and recommendations on issues that are of specific relevance to MIG 4.
The Financial Reporting Council has confirmed that in complying with the AIC Code, MIG 4 meets its obligations in relation to the UK Corporate Governance Code and the Listing Rules. The MIG 4 Board considers that reporting against the principles and recommendations of the AIC Code, and by reference to the AIC Guide (which incorporates the UK Corporate Governance Code), will provide better information to shareholders.
For the 11 month period ended 31 December 2012 and as at the date of this document, MIG 4 has complied with the recommendations of the AIC Code and the relevant provisions of the UK Corporate Governance Code, except where noted below. There are certain areas of the UK Corporate Governance Code that the AIC does not consider relevant to investment companies and with which MIG 4 does not specifically comply, of which the AIC Code provides dispensation. The areas and reasons for non-compliance are as follows:
MIG 4 has not, therefore, reported further in respect of these provisions.
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 management agreement dated 12 November 2010 between MIG 4 (1), Mobeus (2) and Matrix-Securities Limited (3) pursuant to which Mobeus is appointed to provide advisory investment management services in respect of MIG 4's investments in VCT qualifying investments.
Mobeus is entitled to an annual management fee of an amount equal to 2% of the net asset value per annum of MIG 4 plus an annual fixed fee of £112,518 subject to annual RPI uplift, payable quarterly in arrears, exclusive of VAT, if any. In 2013, Mobeus agreed in 2013 to waive such further uplift until otherwise agreed with the MIG 4 Board. 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 Mobeus ceases to be authorised by the FCA or if there is a change in control of Mobeus. The agreement contains provisions indemnifying Mobeus against any liability not due to its default, gross negligence, fraud or breach of FSMA.
5.2 A performance incentive agreement dated 1 November 2006 between MIG 4 (1), Mobeus (2) and Matrix Group Limited (in liquidation) (3), pursuant to which Mobeus is entitled to receive performance related incentive fees subject to achieving certain defined targets.
Mobeus is entitled to receive performance incentive fees for accounting periods following 31 January 2009 of an amount equal to 20% of the annual dividends paid to MIG 4 Shareholders over and above an annual target return of dividends equivalent to 6% of the net assets per MIG 4 Share of 114.51p, being 8.20p (after uplift for RPI indexation). The performance incentive fee is payable annually and any cumulative shortfalls (being an estimated 30.00p per MIG 4 Share as at 30 September 2013) have to be made up in later years before any entitlement arises. No performance incentive fee has been paid to date.
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.
accepted on or prior to 30 December 2012 out of which all costs, charges and expenses of or incidental to the 2012/2013 linked offer were paid (other than trail commission).
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 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.
MIG 4 has a small legacy portfolio of investments in companies from the period prior to 1 August 2006, when it was a multi-manager VCT. This includes investments in early stage and technology companies.
Uninvested funds are held in cash and low risk money market funds.
The investment policy is designed to ensure that MIG 4 continues to qualify and is approved as a VCT by HMRC. Amongst other conditions, MIG 4 may not invest more than 15% of its investments in a single company or group of companies and must have at least 70% by value of its investments throughout the year in shares or securities in VCT qualifying holdings, of which a minimum overall of 30% by value (70% for funds raised from 6 April 2011) must be in ordinary shares which carry no preferential rights. In addition, although MIG 4 can invest less than 30% (70% for funds raised from 6 April 2011) of an investment in a specific company in ordinary shares it must have at least 10% 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 companies in which investments are made must have no more than £15 million of gross assets at the time of investment and £16 million immediately following the investment to be classed as a VCT qualifying holding.
MIG 4 initially holds its funds in a portfolio of readily realisable interest bearing investments and deposits. The investment portfolio of qualifying investments is built up over a three year period with the aim of investing and maintaining at least 80% 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.
MIG 4 aims to invest in larger, more mature unquoted companies through investing alongside three other VCTs advised by Mobeus with a similar investment policy. This enables MIG 4 to participate in combined investments advised on by Mobeus of up to £5 million.
MIG 4's Articles permit borrowings of amounts up to 10% of the adjusted capital and reserves (as defined therein), although MIG 4 has never borrowed and the MIG 4 Board has no current plans to undertake any borrowing.
The MIG 4 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 Mobeus and are then subject to formal approval by the MIG 4 Directors.
intends to direct its affairs in respect of each of its accounting periods so as to qualify as a venture capital trust and accordingly:
Related party transactions for MIG 4 undertaken in the three financial years ended 31 January 2010, 2011, 2012 and the 11 month period to 31 December 2012 are set out in the respective audited report and accounts for those year/period ends, which, together with the unaudited half-yearly reports for the six month periods ended 31 July 2012 and 30 June 2013, are incorporated by reference: in Note 4 on page 56 for the year ended 31 January 2010, Note 4 on page 53 for the year ended 31 January 2011, in pages 32 and 33 for the year ended 31 January 2012, in Note 3 on page 28 for the 11 month period ended 31 December 2012, on page 7 for the half year to 31 July 2012 and on page 5 for the half year to 30 June 2013. Apart from the payment of the MIG 4 Directors' remuneration on the basis set out in paragraph 3.4 above, investment management, administration and performance incentive fees as set out in paragraphs 5.1 and 5.2 above, and the promotion fees as set out in paragraphs 5.3, 5.5 and 5.7 above there have been no other related party payments in the current year to the date of this document. Save for the entering into of the offer agreement as set out in paragraph 5.8 above, MIG 4 has not entered into any related party transactions within the meaning of IFRS or UK GAAP since 30 June 2013.
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 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.
10.3 There are no governmental, legal or arbitration proceedings (including any such proceedings which are or were pending or threatened of which MIG 4 is aware) during the period from the incorporation of MIG 4 which may have or had in the recent past significant effects on MIG 4's financial position or profitability.
10.4 Save as set out in the final three risk factors under 'Investment and Market Risks' on page 3, 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 4's operations.
All of MIG 4's investments as at today's date, which are analysed below, are in the UK and are valued in sterling.
| Sector | % by cost | % by value |
|---|---|---|
| General Retailers | 24.5 | 23.3 |
| Support Services | 38.3 | 37.1 |
| Acquisition vehicles | 4.5 | 4.2 |
| Technology, hardware and | 3.7 | 4.8 |
| equipment | ||
| Healthcare equipment | 0.9 | 1.0 |
| services | ||
| Pharmaceuticals | 4.2 | 4.3 |
| Media | 9.3 | 15.7 |
| Software and computer | 9.6 | 9.4 |
| services | ||
| Construction | 3.2 | 0.1 |
| Personal goods | 1.8 | 0.1 |
| Type | % by cost | % by value |
|---|---|---|
| Unlisted ordinary shares | 14.8 | 17.4 |
| Unlisted loan stock and | 41.3 | 40.1 |
| preference shares or loans | ||
| Listed ordinary shares | 0.5 | 0.6 |
| Cash/liquidity | 43.4 | 41.9 |
Save for loan repayments of £228,276 from EMAC Holdings Limited, £206,325 from Focus Pharma Holdings Limited, £270,270 from Blaze Signs Holdings Limited, £49,604 from Faversham Holdings Limited, £42,044 from DiGiCo Global Limited, £13,019 from Tessella Holdings Limited, an investment of £1,330,202 into Virgin Wine Online Limited, and a follow on investment into Gro-Group Holdings Limited of £39,685, there has been no material change to the valuations used to prepare the above analysis (30 June 2013 being the date on which those valuations were undertaken).
MIG 4 has produced annual statutory accounts for the three financial years ended 31 January 2010, 2011, 2012 and the 11 month period to 31 December 2012 and unaudited information in the half-yearly financial statements for the six month periods ended 31 July 2012 and 30 June 2013. The auditors PKF (UK) LLP (as now acquired by BDO LLP of 55 Baker Street, London W1U 7EU) have reported on the annual statutory accounts without qualification and without statements under sections 495 to 497A of CA 2006.
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/period and, together with the half-yearly reports for the six month periods ended 31 July 2012 and 30 June 2013 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. The two tables below comprise a cross-referenced list of information incorporated by reference. The parts of these documents which are not being incorporated by reference are either not relevant for an investor or are covered elsewhere in the Prospectus.
| Description | 2010 Annual Report |
2011 Annual Report |
January 2012 Annual Report |
December 2012 Annual Report |
|---|---|---|---|---|
| Balance Sheet | Page 50 | Page 47 | Page 52 | Page 33 |
| Income Statement (or equivalent) |
Page 49 | Page 46 | Page 51 | Page 32 |
| Statement showing all | Page 51 | Page 48 | Page 54 | Page 34 |
| changes in equity (or | ||||
| equivalent note) | ||||
| Cash Flow Statement | Page 52 | Page 49 | Page 53 | Page 35 |
| Accounting Policies and | Pages 53 to | Pages 50 to | Pages 55 to | Page 36 |
| Notes | 70 | 68 | 72 | |
| Auditor's Report | Pages 47 to 48 |
Pages 44 to 45 |
Pages 49 to 50 |
Page 31 |
| Description | 2012 Half Yearly Report |
2013 Half Yearly Report |
|---|---|---|
| Balance Sheet | Page 14 | Page 13 |
| Income Statement (or equivalent) |
Pages 12 to 13 |
Pages 11 to 12 |
| Statement showing all changes in equity (or equivalent note) |
Page 15 | Page 14 |
| Cash Flow Statement | Page 16 | Page 15 |
| Accounting Policies and Notes |
Pages 17 to 21 |
Pages 16 to 20 |
| Auditor's Report | N/A | 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 | 2010 Annual Report |
2011 Annual Report |
January 2012 Annual Report |
December 2012 Annual Report |
|---|---|---|---|---|
| Objective | Inside front | Inside front | Inside front | Inside front |
| cover | cover | cover | cover | |
| Performance Summary |
Pages 1 to 2 | Pages 1 to 2 | Pages 1 to 3 | Pages 1 to 2 |
| Results & Dividend |
Pages 24 to 25 | Pages 24 to 25 | Page 28 | Page 20 |
| Investment Policy |
Pages 9 to 10 | Pages 8 to 9 | Pages 10 to 11 | Page 7 |
| Chairman's Statement |
Pages 3 to 8 | Pages 3 to 6 | Pages 4 to 9 | Pages 3 to 6 |
| Manager's Review |
Pages 13 to 19 | Pages 12 to 18 | Pages 12 to 19 | Pages 8 to 9 |
| Portfolio Summary |
Pages 11 to 12 | Pages 10 to 11 | Pages 20 to 21 | Pages 14 to 17 |
| Valuation Policy | Page 53 | Page 50 | Pages 55 to 56 | Pages 36 to 55 |
| Description | 2012 Half Yearly Report |
2013 Half Yearly Report |
|---|---|---|
| Objective | Inside front cover |
Inside front cover |
| Performance Summary |
Pages 2 to 3 | Pages 1 to 2 |
| Results & Dividend |
Page 4 | Page 3 |
| Investment Policy |
Page 8 | Page 6 |
| Chairman's Statement |
Pages 4 to 6 | Pages 3 to 4 |
| Manager's Review |
Page 9 | Pages 7 to 8 |
| Portfolio Summary |
Pages 10 to 11 | Pages 9 to 10 |
| Valuation Policy | Page 17 | Page 16 |
Certain financial information of MIG 4 is also set out below:
| Year ended 31 January 2010 (audited) |
Year ended 31 January 2011 (audited) |
Year ended 31 January 2012 (audited) |
11 month period ended 31 December 2012 (audited) |
|
|---|---|---|---|---|
| Investment income |
£473,350 | £633,882 | £955,864 | £965,994 |
| Profit/loss on ordinary activities before taxation |
£713,131 | £1,893,790 | £1,643,274 | £1,487,093 |
| Earnings per MIG 4 Share |
3.56p | 9.04p | 6.62p | 5.26p |
| Dividends per MIG 4 Share |
3.0p | 4.0p | 5.0p | 5.5p |
| Total assets | £21,477,891 | £25,554,860 | £29,565,712 | £33,718,415 |
| NAV per MIG 4 Share |
106.3p | 112.8p | 116.7p | 117.3p |
| Six month period ended 31 July 2012 (unaudited) |
Six month period ended 30 June 2013 (unaudited) |
|
|---|---|---|
| Investment income |
£494,501 | £774,873 |
| Profit/loss on ordinary activities before taxation |
£550,056 | £2,231,780 |
| Earnings per MIG 4 Share |
1.98p | 6.86p |
| Dividends per MIG 4 Share |
- | 2.0p |
| Total assets | £33,318,537 | £41,992,249 |
| NAV per MIG 4 Share |
113.9p | 118.3p |
As at 30 June 2013, the date to which the most recent unaudited half-yearly financial statements on MIG 4 were published, MIG 4 had unaudited net assets of £41.7 million. As at 30 September 2013, MIG 4 had unaudited net assets of £41.0 million.
As at 30 June 2013, 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 £41.7 million. MIG 4 is now seeking to raise up to £6 million through the Offer for which the associated expenses will be 3.25% of the Investment Amount (assuming maximum subscription under the Offer and the Offer fundraising amount is not increased, but ignoring trail commission). The impact of the Offer on MIG 4's earnings, had the Offer been undertaken at the commencement of the period being reported on, should be accretive. The assets of MIG 4 would have been increased by the net proceeds of the Offer if the transaction had been undertaken at the commencement of the period being reported on.
unissued shares so arising were automatically redesignated as I&G Shares and I&G's articles of association were amended by the deletion of all references to the redeemable non-voting shares and the rights attaching to them pursuant to a special resolution passed on 9 October 2007.
| Date | Issue/Purchase | Number |
|---|---|---|
| 21/08/2013 | Purchase | 225,114 at 95.86p |
| 01/07/2013 | Issue | 392,188 at 96.00p |
| 28/06/2013 | Purchase | 69,456 at 95.75p |
| 21/05/2013 | Purchase | 130,008 at 98.00p |
| 07/05/2013 | Issue | 155,866 at 112.60p |
| 10/04/2013 | Issue | 96,846 at 115.30p |
| 10/04/2013 | Issue | 292,961 at 112.60p |
| 08/04/2013 | Issue | 3,327,650 at 112.30p |
| 08/04/2013 | Purchase | 3,434,836 at 108.80p |
| 05/04/2013 | Issue | 841,367 at 112.60p |
| 04/04/2013 | Issue | 1,837,847 at 112.60p |
| 04/04/2013 | Issue | 4,548,282 at 112.30p |
| 04/04/2013 | Purchase | 4,694,852 at 108.80p |
| 28/03/2013 | Issue | 2,485,008 at 112.60p |
| 27/03/2013 | Purchase | 203,530 at 97.50p |
|---|---|---|
| 27/03/2013 | Purchase | 114,220 at 98.00p |
| 15/02/2013 | Purchase | 84,715 at 93.25p |
| 11/02/2013 | Issue | 359,828 at 92.75p |
| 14/01/2013 | Issue | 1,701,451 at 116.00p |
| 20/12/2012 | Purchase | 110,000 at 96.00p |
| 27/09/2012 | Purchase | 62,977 at 96.50p |
| 27/09/2012 | Purchase | 106,000 at 94.50p |
| 02/08/2012 | Purchase | 200,000 at 94.70p |
| 10/07/2012 | Issue | 341,380 at 111.60p |
| 25/06/2012 | Purchase | 55,000 at 93.50p |
| 29/05/2012 | Purchase | 121,816 at 89.34p |
| 10/05/2012 | Issue | 526,152 at 106.40p |
| 05/04/2012 | Issue | 1,026,004 at 106.40p |
| 04/04/2013 | Issue | 1,413,558 at 106.40p |
| 30/03/2012 | Purchase | 165,000 at 89.68p |
| 09/03/2012 | Purchase | 150,000 at 88.50p |
| 08/03/2012 | Issue | 1,677,289 at 106.40p |
| 15/02/2012 | Issue | 187,280 at 87.90p |
| 31/01/2012 | Purchase | 134,818 at 86.65p |
| 30/01/2012 | Issue | 1,247,556 at 87.50p |
| 29/09/2011 | Purchase | 75,000 at 89.00p |
| 05/08/2011 | Purchase | 345,981 at 89.56p |
| 06/07/2011 | Issue | 153,791 at 106.00p |
| 24/06/2011 | Purchase | 67,144 at 89.00p |
| 27/05/2011 | Purchase | 256,731 at 88.96p |
| 10/05/2011 | Issue | 341,419 at 105.80p |
| 05/04/2011 | Issue | 642,334 at 105.80p |
| 01/04/2011 | Issue | 820,165 at 105.80p |
| 29/03/2011 | Issue | 78,840 at 91.00p |
| 28/03/2011 | Purchase | 113,251 at 88.90p |
| 22/03/2011 | Issue | 1,124,536 at 105.80p |
| 28/02/2011 | Issue | 310, 210 at 107.90p |
| 22/02/2011 | Issue | 39,332 at 86.70p |
| 21/02/2011 | Purchase | 264,491 at 89.05p |
| 21/01/2011 | Issue | 1,847,154 at 104.80p |
| 14/01/2011 | Purchase | 230,038 at 88.50p |
| 22/12/2010 | Purchase | 297,129 at 87.34p |
| 30/09/2010 | Purchase | 42,578 at 84.20p |
| 13/09/2010 | Purchase | 183,445 at 84.59p |
| 27/08/2010 | Purchase | 60,692 at 78.50p |
| 04/08/2010 | Purchase | 92,641 at 77.95p |
| 21/07/2010 | Purchase | 103,388 at 75.00p |
| 24/06/2010 | Purchase | 147,884 at 73.00p |
| 09/06/2010 | Purchase | 157,819 at 73.00p |
| 03/06/2010 | Purchase | 99,682 at 73.00p |
| 01/06/2010 | Purchase | 70,950 at 70.40p |
| 31/03/2010 | Purchase | 78,742 at 63.75p |
| 18/03/2010 | Issue | 112,768 at 49.14p |
| 18/03/2010 | Issue | 6,674 at 94.5p |
| (S ordinary shares) | ||
| 26/02/2010 | Purchase | 33,659 at 45.27p |
| 28/01/2010 | Purchase | 132,508 at 46.78p |
| 21/12/2009 | Purchase | 203,770 at 47.52p |
| 30/09/2009 | Purchase | 35,500 at 48.35p |
2.11 At the date of this document, I&G had 53,088,219 Shares in issue (all fully paid up).
In each case where the proceeds of the allotment may be used in whole or in part to purchase I&G Shares in the market.
(iii) the maximum price which may be paid for an I&G Share shall be the higher of: (i) 5% above the average of the middle market quotation for an I&G Share taken from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which the purchase is made; and (ii) the amount stipulated by article 5(1) of the Buy Back and Stabilisation Regulation 2003 (EC2273/2003);
(iv) the authority conferred shall (unless previously renewed or revoked) expire on the conclusion of the annual general meeting of I&G to be held in 2014; and
It is the current intention of the Directors of I&G to renew these authorities at its annual general meeting convened in 2014.
| Issued | ||
|---|---|---|
| Number | £ | |
| I&G Shares | 63,088,219 | 630,882.19 |
| I&G Shares | % of issued I&G Share capital |
|
|---|---|---|
| Colin Hook | 57,092 | 0.11% |
| Jonathan Cartwright | 11,981 | 0.02% |
| Helen Sinclair | 17,204 | 0.03% |
(a) Colin Hook is a director of IBIS Designs Limited which is in the process of being voluntarily struck off the Register of Companies. IBIS Designs Limited was neither insolvent nor owed any amounts to creditors at the date of this document.
(b) Jonathan Cartwright was a director of Caledonia El Distribution Limited until December 2009. The company was subsequently placed in members' voluntary liquidation in April 2010. Caledonia El Distribution Limited was neither insolvent nor owed any amounts to creditors at the date of its dissolution in March 2012. Jonathan was also a director of the following companies which have all voluntarily been struck off the Register of Companies:
Neither company was insolvent nor owed any amounts to creditors at the date of their respective dissolution.
If, at any time, I&G's VCT status is lost, dealing in its shares and valuation of I&G's net asset value will normally be suspended, which will be communicated to shareholders on an appropriate regulatory information service until such time as proposals to continue as a VCT or to be wound up have been further announced. The I&G Directors do not anticipate any other circumstance under which valuations may be suspended.
4.4 I&G expects to co-invest with the other VCT funds advised by Mobeus, participating in equity investments up to £5 million, as long as the business has not received funds from any state-aided risk capital in the 12 months prior to the date of investment.
Where more than one of the funds managed or advised by Mobeus wishes to participate in an investment opportunity, allocations will generally be made in proportion to the net asset value of each fund at the date each investment proposal is forwarded to each Board. When one of the funds managed or advised by Mobeus 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% of a particular VCT's portfolio in VCT qualifying holdings. This may mean that I&G may receive a greater or lesser allocation than would otherwise be the case under the normal co-investment policy.
When I&G has insufficient funds available to satisfy its allocation, the balance shall be offered to one or more of the funds managed or advised by Mobeus who have funds available for new investments pro rata as between themselves.
Any variation from this co-investment policy, insofar as it affects I&G or where I&G makes any investment not at the same time and on the same terms as that made by other funds managed or advised by Mobeus, may only be made with the prior approval of the I&G Directors who are independent of Mobeus.
Save for the above, there are no material potential conflicts of interest which Mobeus may have as between its duty to I&G and duties owed by them to third parties and their interests.
making recommendations to the I&G Directors in relation to the appointment, reappointment and removal of the external auditor;
monitoring the effectiveness of I&G's internal control systems;
The I&G Board has also considered the principles and recommendations of the AIC Code of Corporate Governance ("AIC Code") by reference to the AIC Corporate Governance Guide for Investment Companies ("AIC Guide"). The AIC Code, as explained by the AIC Guide, addresses all the principles set out in the UK Corporate Governance Code, as well as setting out additional principles and recommendations on issues that are of specific relevance to I&G.
The Financial Reporting Council has confirmed that in complying with the AIC Code, I&G meets its obligations in relation to the UK Corporate Governance Code and the Listing Rules. The I&G Board considers that reporting against the principles and recommendations of the AIC Code, and by reference to the AIC Guide (which incorporates the UK Corporate Governance Code), will provide better information to shareholders.
For the year ended 30 September 2012 and as at the date of this document, I&G has complied with the recommendations of the AIC Code and the relevant provisions of the UK Corporate Governance Code, except where noted below. There are certain areas of the UK Corporate Governance Code that the AIC does not consider relevant to investment companies and with which I&G does not specifically comply, of which the AIC Code provides dispensation. The areas and reasons for non-compliance are as follows:
• due to the systems and procedures of Mobeus, the provision of VCT tax monitoring services by PricewaterhouseCoopers LLP, as well as the size of I&G's operations, the I&G Board believe that an internal audit function is not appropriate.
I&G has not, therefore, reported further in respect of these provisions.
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 Private Equity Partners LLP (2) (as amended by a deed of variation dated 12 November 2010) pursuant to which Mobeus (then Matrix Private Equity Partners LLP) is appointed to provide advisory investment management services in respect of I&G's investments in VCT qualifying investments.
Mobeus is entitled to an annual management fee of an amount equal to 2.4% of the net asset value per annum (0.4% of such fee being subject to a minimum of £150,000 and a maximum of £170,000 the remainder of such fee not being subject to any cap) of I&G, payable quarterly in arrears, inclusive of VAT, if any.
The above fees are subject to an annual expenses cap of over and above 3.25% of the net assets of I&G by way of a reduction of fees due to Mobeus 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 Mobeus.
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 Mobeus ceases to be authorised by the FCA or if there is a change in control of Mobeus. The agreement contains provisions indemnifying Mobeus against any liability not due to its default, gross negligence, fraud or breach of 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 Private Equity Partners LLP (3) as varied by a deed of termination and variation between I&G (1) and Matrix Private Equity Partners LLP (2) dated 29 March 2010 pursuant to which I&G granted to each of Mobeus (then Matrix Private Equity Partners LLP) 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.
Mobeus is entitled to receive a performance related incentive payment (payable in cash or shares) based on realised gains from the investment portfolio which it manages. The performance payment represents an amount equal to 20% of any excess (over the investment growth hurdle detailed below) of realised gains over realised losses from these investments during each accounting period provided that in respect of the portfolio:
• at any calculation date, the value of the investment portfolio, based on the Company's normal accounting policies, adjusted for net realised gains and losses and total surplus income since 20 June 2007 was equal to or greater than the embedded value of the portfolio, as adjusted by new investments and the value of the Nova portfolio (as at 30 June 2007); and
• such excess was subject to an investment growth hurdle of 6% per annum calculated from 1 July 2007.
Fees of £422,733 for the year ended 30 September 2008 and £1,093,000 for the year ended 30 September 2012 have been paid to Mobeus from I&G. These are the only financial years for which a fee has been paid to date.
Foresight Group LLP, in connection with its previous appointment as an investment manager of I&G, has an ongoing entitlement to performance fees in respect of the portfolio of the original I&G ordinary shares fund (similar to the above but disregarding the terms relating to the merger of the original I&G ordinary shares and I&G S ordinary shares). £1,957,234 was paid to Foresight for the year ended 30 Septemmber 2012. Following the termination of Foresight Group's appointment, its entitlement reduces proportionally over the ten years following such termination.
The arrangements governing future potential incentive fees for Mobeus related to I&G's performance are currently under discussion. If required, approval from I&G Shareholders of any proposed changes to the terms of the incentive fee will be sought in due course.
an agreement of this nature. MIG, MIG 2, MIG 4 and I&G 's liability under this indemnity is unlimited. This engagement may be terminated at any time.
5.7 An offer agreement dated 27 November 2013 between MIG, MIG 2, MIG 4 and I&G (1), the Directors (2) Mobeus (3) and Howard Kennedy (4) whereby Mobeus has agreed to act as promoter in connection with the Offer and Howard Kennedy has agreed to act as sponsor in connection with the Offer. The agreement contains warranties given by MIG, MIG 2, MIG 4 and I&G and the I&G Directors to Mobeus and given by MIG, MIG 2, MIG 4 and I&G, the I&G Directors and Mobeus to Howard Kennedy. MIG, MIG 2, MIG 4 and I&G have agreed to pay Mobeus a commission of 3.25% of the Investment Amount on each application received and accepted out of which will be paid all costs, charges and expenses of or incidental to the Offer (other than trail commission and any amounts due from the Companies to the investor in connection with the facilitation of initial advisers).
The investment objective of I&G is to provide private investors with an attractive return, by maximising the 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 the AIM market.
I&G's investment policy is to invest primarily in a diverse portfolio of UK unquoted companies. Investments are 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-manager VCT. This includes investments in early stage and technology companies, and companies quoted on the AIM market.
I&G's cash and liquid resources are invested in a range of instruments of varying maturities, subject to the overriding criterion that the risk of loss of capital be minimised.
The investment policy is designed to ensure that I&G continues to qualify and is approved as a VCT by HMRC.
Amongst other conditions, I&G may not invest more than 15% of its investments in a single company and must have at least 70% by value of its investments throughout the period in shares or securities in VCT qualifying holdings, of which a minimum overall of 30% by value (70% for funds raised after 6 April 2011) must be in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules). In addition, although I&G can invest less than 30% (70% for funds raised after 6 April 2011) of an investment in a specific company in ordinary shares it must have at least 10% 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 companies in which investments are made must have no more than £15 million of gross assets at the time of investment and £16 million immediately following the investment to be classed as a VCT qualifying holding.
I&G initially holds its funds in a portfolio of readily realisable interest-bearing investments and deposits. The investment portfolio of qualifying investments is built up over a three year period with the aim of investing and maintaining at least 70% 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.
I&G aims to invest in larger, more mature unquoted companies through investing alongside the three other VCTs advised by Mobeus with a similar investment policy. This enables I&G to participate in combined investments advised on by Mobeus of up to £5 million.
I&G's Articles permit borrowings of amounts up to 10% of the adjusted capital and reserves (as defined therein), however, I&G has never borrowed and the I&G Board has no current plans to undertake any borrowing.
The I&G Board has overall responsibility for I&G's affairs including the determination of its investment policy. Investment and divestment proposals are originated, negotiated and recommended by Mobeus and are then subject to formal approval by the I&G Directors.
6.2 I&G is subject to the investment restrictions relating to a venture capital trust in the Tax Act, as more particularly detailed in Part Ten of the Securities Note, and in the Listing Rules which specify that (i) I&G 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) I&G must not conduct any trading activity which is significant in the context of its group as a whole; and (iii) I&G may not invest more than 10%, 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 I&G will require the approval of I&G Shareholders pursuant to the Listing Rules. I&G intends to direct its affairs in respect of each of its accounting periods so as to qualify as a venture capital trust and accordingly:
(a) I&G's income is intended to be derived wholly or mainly from shares or other securities, as this phrase is interpreted by HMRC;
Related party transactions for I&G undertaken in the three financial years ended 30 September 2010, 2011 and 2012 are set out in the respective audited report and accounts for these year ends which are incorporated by reference: in Notes 4 and 24 on pages 61 and 78 for the year ended 30 September 2010, in Note 3 on pages 57 and 58 for the year ended 30 September 2011, on page 25 for the year ended 30 September 2012 and in paragraphs (c) and (d) of the responsibility statement of the Chairman's Letter on pages 6 and 5 for the half years to 31 March 2012 and 2013 respectively. Apart from the payment of the I&G Directors' remuneration on the basis set out in paragraph 3.4 above, investment management, administration and performance incentive fees as set out in paragraphs 5.1 and 5.2 above, and the promotion fees set out in paragraphs 5.3, 5.5 and 5.7 above there have been no other related party payments in the year ended 30 September 2013 or in the current year to the date of this document. Save for the entering into of the offer agreement as set out in paragraph 5.8 above, I&G has not entered into any related party transactions within the meaning of IFRS or UK GAAP since 31 March 2013.
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 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 4 Save as set out in the final three risk factors under 'Investment and Market Risks' on page 3 as at the date of this document, there are no governmental, economic, monetary, political or fiscal policies and factors which have or could affect I&G's operations.
10.5 The issue costs payable by I&G under the Offer (including irrecoverable VAT and sales commissions) have been fixed by the I&G Directors at an amount equal to 3.25% of total funds subscribed (but excluding permissible annual trail commission and any amounts due from I&G to the investor in connection with the facilitation of initial advisers). Mobeus has agreed to indemnify I&G in respect of any costs which are in excess of the above. The net proceeds for I&G from the Offer will therefore amount to at least £5,805,000 (assuming maximum subscription under the Offer and the Offer fundraising amount is not increased, and ignoring the trail commission).
All of I&G investments as at today's date, which are analysed below, are in the UK and are valued in sterling.
| Sector | % by cost | % by value |
|---|---|---|
| Media | 5.6 | 11.0 |
| Software & Computer services | 4.7. | 9.9 |
| Construction and Building | 2.7 | 0.1 |
| Materials | ||
| Support Services | 49.6 | 39.3 |
| Technology, Hardware & | 8.0 | 8.8 |
| Equipment | ||
| General retailers | 21.5 | 22.6 |
| Acquisition Vehicle | 2.8 | 2.9 |
| Personal Goods | 1.6 | 0.4 |
| Pharmaceuticals | 0.8 | 1.6 |
| Industrial Engineering | 1.4 | 2.2 |
| Healthcare Equipment and | 1.3 | 1.2 |
| Services |
| Type | % by cost | % by value |
|---|---|---|
| Unlisted ordinary shares | 17.5 | 17.0 |
| Unlisted loan stock and preference shares or loans |
36.2 | 38.2 |
| Listed ordinary shares | 5.4 | 3.4 |
| Cash/liquidity | 40.9 | 41.4 |
Save for loan repayments of £391,276 from EMAC Holdings Limited, £276,185 from DiGiCo Global Limited, £264,198 from Blaze Signs Holdings Limited, £161,532 from Focus Pharma Holdings Limited, £130,781 from Westway Services (2010) Limited, £64,539 from Faversham Holdings Limited, £25,058 from Tessella Holdings Limited, £14,149 from Monsal Holdings Limited, an investment of £2,843,557 into Virgin Wine Online Limited, £2,289,858 into Veritek Global Limited and a follow on investment into Gro-Group Holdings Limited of £84,768, there has been no material change to the valuations used to prepare the above analysis (30 June 2013 being the date on which those valuations were undertaken).
I&G has produced annual statutory accounts for the three financial years ended 30 September 2010, 2011 and 2012 and unaudited information in the half-yearly financial statements for the six month periods ended 31 March 2012 and 2013. The auditors, PKF (UK) LLP (as now acquired by BDO LLP of 55 Baker Street, London W1U 7EU) have reported on the annual statutory accounts without qualification and without statements under sections 495 to 497 of CA 2006.
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 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. The two tables below comprise a cross-referenced list of information incorporated by reference. The parts of these documents which are not being incorporated by reference are either not relevant for an investor or are covered elsewhere in the Prospectus.
| Description | 2010 Annual Report |
2011 Annual Report |
2012 Annual Report |
2012 Half Yearly Report |
2013 Half Yearly Report |
|---|---|---|---|---|---|
| Balance Sheet | Page 54 | Page 52 | Page 37 | Page 15 | Page 14 |
| Income Statement (or equivalent) |
Page 53 | Page 51 | Page 36 | Pages 13 to 14 |
Pages 12 to 13 |
| Statement showing all changes in equity (or equivalent note) |
Page 55 | Page 53 | Page 38 | Page 15 | Page 15 |
| Cash Flow Statement | Page 56 | Page 54 | Page 39 | Page 16 | Page 16 |
| Accounting Policies and Notes |
Pages 57 to 78 |
Pages 55 to 75 |
Pages 40 to 61 |
Pages 17 to 23 |
Pages 17 to 22 |
| Auditor's Report | Pages 51 to 52 |
Pages 49 to 50 |
Page 35 | N/A | N/A |
Such information also includes operating/financial reviews as follows:
| Description | 2010 | 2011 | 2012 | 2012 Half | 2013 Half |
|---|---|---|---|---|---|
| Annual | Annual | Annual | Yearly | Yearly | |
| Report | Report | Report | Report | Report | |
| Objective | Inside front | Inside front | Inside front | Contents | Contents |
| cover | cover | cover | Pages | Pages | |
| Performance Summary |
Pages 1 to 4 |
Pages 1 to 4 |
Pages 1 to 2 |
Pages 1 to 2 | Page 1 |
| Results & Dividend | Page 31 | Page 30 | Page 23 | Pages 3 to 4 |
Pages 2 to 3 |
| Investment Policy | Pages11 to 12 |
Pages11 to 12 |
Page 7 | Page 7 | Page 6 |
| Chairman's | Pages 5 to | Pages 5 to | Pages 3 to | Pages 3 to 6 | Pages 2 to |
| Statement | 10 | 10 | 6 | 4 | |
| Manager's Review | Pages 13 to | Pages 13 to | Pages 8 to | Pages 11 to | Pages 10 to |
| 21 | 21 | 10 | 12 | 11 | |
| Portfolio Summary | Pages 22 to | Pages 22 to | Pages 15 to | Pages 8 to | Pages 7 to |
| 23 | 24 | 20 | 10 | 9 | |
| Valuation Policy | Pages 57 to 58 |
Pages 55 to 56 |
Page 40 | Page 17 | Page 17 |
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 2010 (audited) |
Year ended 30 September 2011 (audited) |
Year ended 30 September 2012 (audited |
Six month period ended 31 March 2012 (unaudited) |
Six month period ended 31 March 2013(unaudited) |
|
|---|---|---|---|---|---|
| Investment income |
£716,847 | £1,651,015 | £1,999,436 | £751,588 | £1,521,815 |
| Profit/loss on ordinary activities before taxation |
£2,374,759 | £10,203,037 | £5,784,484 | £3,768,829 | £4,645,161 |
| Earnings per I&G share |
9.55p | 26.04p | 13.23p | 9.13p | 9.92p |
| Dividends per share |
4.0p | 4.0p | 26.0p | - | 6.0p |
| Total assets |
£37,093,664 | £50,702,972 | £54,318,145 | £49,009,420 | £57,649,389 |
| NAV per I&G share |
99.0p | 120.8p | 109.6p | 105.4p | 113.0p |
As at 31 March 2013, the date to which the most recent unaudited half-yearly financial statements on I&G were published, I&G had unaudited net assets of £56.7 million. As at 30 June 2013, I&G had unaudited net assets of £58.5 million.
As at 31 March 2013, 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 £56.7 million. I&G is now seeking to raise up to £6 million through the Offer for which the associated expenses will be 3.25% of the Investment Amount (assuming maximum subscription under the Offer and the Offer fundraising amount is not increased, but ignoring trail commission). The impact of the Offer on I&G's earnings, had the Offer been undertaken at the commencement of the period being reported on, should be accretive. The assets of I&G would have been increased by the net proceeds of the Offer if the transaction had been undertaken at the commencement of the period being reported on.
The venture capital investments set out below represent the Companies' 10 largest investments (excluding acquisition companies and liquidity funds) as at the date of this document. These comprise approximately 44% of the aggregate investment portfolios of the Companies, as at the date of this document. Other investments (being bank balances and liquidity funds) held by each Company are also shown below where they have a value of greater than 5% of a VCT's respective gross assets and which, combined with the venture capital investments, have an aggregate value of greater than 50% in respect of each Company, as at the date of this document.
| ATG Media Holdings Limited | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Original MBO investment in October 2008 | |||||||||
| MIG | MIG 2 | MIG 4 | I&G | Year ended | 30 September 2012 2 |
||||
| (£ million) | |||||||||
| Current cost ¹ | 3.1 | 1.6 | 1.9 | 1.9 | Sales | 11.0 | |||
| (£ million) | |||||||||
| Valuation | 6.0 | 3.5 | 3.7 | 3.7 | EBITA | 2.7 | |||
| (£ million) | |||||||||
| Valuation | Earnings multiples (for all Companies) | Profit/(loss) | 2.1 | ||||||
| methodology | before tax | ||||||||
| Equity/voting | 14.0% | 7.4% | 8.5% | 8.5% | Retained | 2.7 | |||
| rights | profit/(loss) | ||||||||
| Percentage of | 11.6% | 12.6% | 9.0% | 6.3% | Net assets | 4.6 | |||
| investment | |||||||||
| portfolio by | |||||||||
| value | |||||||||
| Activity: Online auction operator and publisher of the leading newspaper serving the UK antiques trade . | |||||||||
| Location: London. |
| Fullfield Limited (trading as Motorclean) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Original investment in July 2011 | ||||||||
| MIG | MIG 2 | MIG 4 | I&G | Year ended | 31 March 2 2013 * (£ million) |
|||
| Current cost ¹ (£ million) |
2.6 | 1.6 | 1.8 | 2.4 | Sales | 23.8 | ||
| Valuation (£ million) |
3.1 | 2.1 | 2.2 | 3.0 | EBITA | 1.7 | ||
| Valuation methodology |
Earnings multiple (for all Companies) | Profit/(loss) before tax |
1.7 | |||||
| Equity/voting rights |
14.1% | 8.9% | 9.8% | 13.2% | Retained profit/(loss) |
9.0 | ||
| Percentage of investment portfolio |
6.0% | 7.8% | 5.3% | 5.1% | Net assets | 9.0 | ||
| *These figures are for Motorclean Limited (acquired by Fullfield Limited in July 2011). Activity: Vehicle cleaning and valet services. Location: Laindon, Essex. |
| Virgin Wine Online Limited | ||||||||
|---|---|---|---|---|---|---|---|---|
| Original MBO investment in November 2013 | ||||||||
| MIG | MIG 2 | MIG 4 | I&G | Period ended |
28 June 2013 2 (£ million) |
|||
| Current cost ¹ (£ million) |
2.5 | 1.3 | 2.0 | 2.9 | Sales | 34.5 | ||
| Valuation (£million) |
2.5 | 1.3 | 2.0 | 2.9 | EBITA | 2.0 | ||
| Valuation methodology |
Cost (for all Companies) | Profit/(loss) before tax |
1.7 | |||||
| Equity/voting rights |
13.9% | 5.9% | 9.7% | 13.9% | Retained profit/(loss) |
(24.9) | ||
| Percentage of investment portfolio by value |
4.9% | 4.9% | 4.9% | 4.8% | Net assets | 5.0 | ||
| Activity: Importing and distribution of wines. Location: Norwich, Norfolk |
| EMaC Holdings Limited | ||||||||
|---|---|---|---|---|---|---|---|---|
| Original MBO investment in November 2011 | MIG | MIG 2 | MIG 4 | I&G | Year ended | 31 December 2012 2 (£ million) |
||
| Current cost¹ (£ million) |
1.4 | 0.9 | 1.0 | 1.5 | Sales | 6.8 | ||
| Valuation (£ million) |
2.3 | 1.3 | 1.7 | 2.2 | EBITA | 2.6 | ||
| Valuation methodology |
Earnings multiples (for all Companies) | Profit/loss before tax |
0.9 | |||||
| Equity/ voting rights |
8.8% | 5.5% | 6.3% | 9.4% | Retained profit/loss |
0.5 | ||
| Percentage of investment portfolio by value |
4.4% | 4.9.% | 4.0% | 3.8% | Net assets | 2.8 | ||
| Activity: Provider of service plans to motor dealerships Location: Crewe, Cheshire |
| Tessella Holdings Limited | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Original MBO investment in July 2012 | |||||||||
| MIG | MIG 2 | MIG 4 | I&G | Year ended | 31 March 2 2013 * (£ million) |
||||
| Current cost ¹ (£ million) |
1.6 | 0.9 | 1.2 | 1.7 | Sales | 20.9 | |||
| Valuation (£ million) |
2.1 | 1.2 | 1.6 | 2.2 | EBITA | 3.0 | |||
| Valuation methodology |
Earnings multiple (for all Companies) | Profit/(loss) before tax |
3.0 | ||||||
| Equity/voting rights |
7.2% | 3.9% | 5.4% | 7.5% | Retained profit/(loss) |
5.3 | |||
| Percentage of investment portfolio |
4.1% | 4.4% | 3.9% | 3.7% | Net assets | 5.6 | |||
| * These figures are for Tessella Limited, the operating subsidiary. Activity: Specialist scientific and technical consultancy Location: Abingdon, Oxfordshire. |
| Madacombe Trading Limited (trading as Veritek Global Limited) Original MBO investment in July 2013 |
|||||||
|---|---|---|---|---|---|---|---|
| MIG | MIG 2 | MIG 4 | I&G | Year ended | 31 March 2013* 2 (£ million) |
||
| Current cost ¹ (£ million) |
2.0 | 1.0 | 1.6 | 2.3 | Sales | 24.7 | |
| Valuation (£ million) |
2.0 | 1.0 | 1.6 | 2.3 | EBITA | 1.5 | |
| Valuation methodology |
Cost (for all Companies) | Profit/(loss) before tax |
(0.1) | ||||
| Equity/voting rights |
13.0% | 6.2% | 10.3% | 14.6% | Retained profit/(loss) |
0.3 | |
| Percentage of investment portfolio |
3.9% | 3.5% | 4.0% | 3.9% | Net assets | 6.2 |
* These figures are for Veritek Global Limited, the operating subsidiary
Activity: Provider of installation, maintenance and support services for printing equipment Location: Eastbourne, East Sussex
| Original MBO investment in March 2013 | ||||||||
|---|---|---|---|---|---|---|---|---|
| MIG | MIG 2 | MIG 4 | I&G | Year ended | 30 June 20122 (£million) |
|||
| Current cost ¹ (£ million) |
1.9 | 1.1 | 1.5 | 2.3 | Sales | 10.9 | ||
| Valuation (£ million) |
1.9 | 1.1 | 1.5 | 2.3 | EBITA | 0.6 | ||
| Valuation methodology |
Cost (for all Companies) | Profit/(loss) before tax |
0.5 | |||||
| Equity/voting rights |
10.5% | 6.0% | 8.4% | 12.8% | Retained profit/(loss) |
1.1 | ||
| Percentage of investment portfolio |
3.7% | 4.0% | 3.8% | 4.0% | Net assets | 1.1 | ||
| Activity: Baby sleep products Location: Ashburton, Devon |
| DiGiCo Global Limited | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Original MBO investment in July 2007 | |||||||||
| MIG | MIG 2 | MIG 4 | I&G | Year ended | 31 December 2012 2 (£million) |
||||
| Current cost ¹ (£ million) |
0.2 | 0.1 | 0.1 | 0.1 | Sales | 23.9 | |||
| Valuation (£ million) |
2.2 | 1.3 | 1.1 | 0.8 | EBITA | 7.6 | |||
| Valuation methodology |
Earnings multiple (for all Companies) | Profit/(loss) before tax |
3.9 | ||||||
| Equity/voting rights |
4.7% | 2.4% | 2.4% | 1.6% | Retained profit/(loss) |
2.9 | |||
| Percentage of investment portfolio by value |
4.3% | 4.6% | 2.8% | 1.3% | Net assets | 2.9 | |||
| Activity: Manufacture of digital sound mixing consoles Location: Chessington, Surrey |
| EOTH Limited (trading as Equip Outdoor Technologies Limited) | ||||||
|---|---|---|---|---|---|---|
| Original acquisition finance investment in October 2011 | MIG | MIG 2 | MIG 4 | I&G | Year ended | 31 January 2013 2 (£million) |
| Current cost ¹ (£ million) |
1.3 | 0.8 | 1.0 | 1.4 | Sales | 27.3 |
| Valuation (£ million) |
1.3 | 0.9 | 1.0 | 1.5 | EBITA | 2.5 |
| Valuation methodology |
Earnings multiple (for all Companies) | 1.4 | ||||
| Equity/voting rights |
2.3% | 1.5% | 1.7% | 2.5% | before tax Retained profit/(loss) |
6.5 |
| Percentage of investment portfolio |
2.5% | 3.1% | 2.3% | 2.5% | Net assets | 7.7 |
| Activity: Distributor of high quality, branded outdoor equipment. Location: Alfreton, Derbyshire |
| CB Imports Group Limited | ||||||||
|---|---|---|---|---|---|---|---|---|
| Original MBO investment in December 2009 | ||||||||
| MIG | MIG 2 | MIG 4 | I&G | Year ended | 31 December 2012 2 (£million) |
|||
| Current cost ¹ (£ million) |
2.0 | - | 1.0 | 1.0 | Sales | 24.4 | ||
| Valuation (£ million) |
2.1 | - | 1.1 | 1.2 | EBITA | 1.4 | ||
| Valuation methodology |
Earnings multiple (for all Companies) | 0.8 | ||||||
| Equity/voting rights |
11.6% | - | 5.8% | 5.8% | before tax Retained profit/(loss) |
(0.5) | ||
| Percentage of 4.1% - 2.6% 2.0% Net assets 4.5 investment portfolio |
||||||||
| Activity: Importer and distributor of artificial flowers, floral sundries and home décor products. Location: East Ardsley, West Yorkshire. |
1 For MIG, the current cost is the original investment cost made by both MIG and MIG 3 (the latter up until its merger with MIG on 19 May 2010), less capital repayments to the date of this document.
2 The information on investee companies' sales, profits and losses and net assets shown in the tables above has been sourced from the latest financial year end accounts published (unless stated otherwise) by those investee companies ("Third Party Information"). The Third Party Information has been accurately reproduced and, as far as the Companies are aware and are able to ascertain from information published by the investee companies, no facts have been omitted which would render the reproduced information inaccurate or misleading.
All of the companies referred to above are profitable based on EBITA, as at the date of their last published accounts. The Boards and Mobeus believe that EBITA is a more meaningful measure of an investee company's underlying profitability to investors than profit after taxation. This is because earnings are calculated before deducting loan stock interest (which is part of the return to investors earned by the Mobeus investment structure) and other interest.
In addition, the following liquidity funds and bank deposits also represent more than 5% of the gross assets of at least one of the Companies. In all cases, the amount invested is the same as their valuation, on a fair value basis. No equity or voting rights apply to such investments.
| NatWest Bank plc (monies in interest-bearing account) | ||||||
|---|---|---|---|---|---|---|
| MIG | MIG 2 | MIG 4 | I&G | |||
| Amount invested and at valuation (£ million) |
5.7 | - | 3.5 | 2.5 | ||
| Percentage of investment portfolio |
10.9% | - | 8.6% | 4.2% |
| Barclays Bank plc (monies in interest-bearing account) | |||||
|---|---|---|---|---|---|
| MIG | MIG 2 | MIG 4 | I&G | ||
| Amount invested and at valuation (£ million) |
2.0 | 2.8 | - | - | |
| Percentage of investment portfolio |
3.9% | 10.2% | - | - |
| SWIP Global Liquidity Fund plc (liquidity fund) | |||||||
|---|---|---|---|---|---|---|---|
| (managed by Scottish Widows Investment Partnership Limited) | |||||||
| MIG MIG 2 MIG 4 I&G |
|||||||
| Amount invested and at valuation |
0.2 | 1.7 | 2.8 | 3.5 | |||
| (£ million) Percentage of investment portfolio |
0.3% | 6.3% | 6.7% | 5.9% |
| Nationwide International Limited (building society deposit account) | ||||||
|---|---|---|---|---|---|---|
| MIG | MIG 2 | MIG 4 | I&G | |||
| Amount invested and at valuation (£ million) |
2.0 | - | 2.3 | 3.0 | ||
| Percentage of investment portfolio |
3.9% | - | 5.5% | 5.1% |
| Close Brothers Limited (notice accounts) | ||||||
|---|---|---|---|---|---|---|
| MIG | MIG 2 | MIG 4 | I&G | |||
| Amount invested and at valuation (£ million) |
- | - | 1.9 | 3.0 | ||
| Percentage of investment portfolio |
- | - | 4.6% | 5.1% |
| Santander UK plc (monies in interest-bearing account) | |||||
|---|---|---|---|---|---|
| MIG | MIG 2 | MIG 4 | I&G | ||
| Amount invested and at valuation (£ million) |
- | - | 1.6 | 3.0 | |
| Percentage of investment portfolio |
- | - | 4.0% | 5.1% |
Note: Investment and portfolio
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 Mobeus, 30 Haymarket, London SW1Y 4EX whilst the Offer is open:
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.