OCTOPUS APOLLO VCT PLC — AGM Information 2012

Aug 17, 2012

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about the action to be taken, you should immediately consult your bank manager, stockbroker, solicitor, accountant or other independent financial adviser authorised pursuant to the Financial Services and Markets Act 2000.

If you have sold or otherwise transferred all of your Shares in Octopus Apollo VCT 3 plc (the Company), please send this document and accompanying documents, as soon as possible, to the purchaser or transferee or to the stockbroker, independent financial adviser or other person through whom the sale or transfer was effected for delivery to the purchaser or transferee.

Application has been made to the UKLA for the New Shares to be listed on the premium segment of the Official List and will be made to the London Stock Exchange for such New Shares to be admitted to trading on its main market for listed securities. The New Shares will rank pari passu with the existing issued Shares from the date of issue.

Matrix Corporate Capital LLP, which is authorised and regulated in the United Kingdom by the FSA, is acting as adviser to the Company and no-one else and will not be responsible to any other person for providing the protections afforded to customers of Matrix Corporate Capital LLP (subject to the responsibilities and liabilities imposed by the FSA and the regulatory regime established thereunder) in providing advice or in relation to any matters referred to in this document.

SGH Martineau LLP, which is regulated in the United Kingdom by the Solicitors Regulation Authority, is acting as legal adviser to the Company, Octopus Apollo VCT 1 plc, Octopus Apollo VCT 2 plc and Octopus Apollo VCT 4 plc and no-one else and will not be responsible to any other person for providing advice in connection with any matters referred to in this document.

OCTOPUS APOLLO VCT 3 PLC

(Registered in England and Wales with registered number 05840377)

Recommended proposals to:

• l acquire the assets and liabilities of:
• o Octopus Apollo VCT 1 plc
• o Octopus Apollo VCT 2 plc
• o Octopus Apollo VCT 4 plc
• l offer an enhanced buyback facility and offer for subscription
• l renew and increase the authority to issue and repurchase shares
• l cancel share premium and capital redemption reserves
• l amend the articles of association of the Company
• l approve related party transactions

Your attention is drawn to the letter from the Chairman of the Company set out in Part III of this document which contains a recommendation to vote in favour of the resolutions to be proposed at the General Meeting referred to below. Your attention is also drawn to the risk factors set out in Part II of this document.

You will find set out at the end of this document notice of a General Meeting to be held at 10.00 a.m. on 19 September 2012 at the offices of Octopus Investments Limited, 20 Old Bailey, London EC4M 7AN to approve resolutions to effect the proposals contained herein.

To be valid, the form of proxy attached to this document should be returned not less than 48 hours before the General Meeting, either by post or by hand (during normal business hours only) to the Company's registrar, Capita Registrars, PXS, 34 Beckenham Road, Beckenham, BR3 4TU. For further information on the General Meeting or the completion and return of a form of proxy, please telephone Capita Registrars between 9.00 a.m. and 5.30 p.m. (GMT) Monday to Friday on telephone number 0871 664 0324 or, if telephoning from outside the UK, on +44 208 639 3399. Calls to Capita Registrars helpline (0871 664 0324) are charged at 10p per minute from a BT land line plus your service provider's network extras. Further details will be available from your service provider. Calls to Capita Registrars from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. For legal reasons, Capita Registrars will be unable to give advice on the merits of the proposals or provide financial, legal, tax or investment advice.

For further information, Shareholders are recommended to read the Prospectus issued by the Company dated 17 August 2012 which accompanies this document.

CONTENTS

EXPECTED TIMETABLES		3
PART I	DEFINITIONS	6
PART II	RISK FACTORS	10
PART III	LETTER FROM THE CHAIRMAN	12
PART IV	APOLLO 1 SCHEME	24
PART V	APOLLO 2 SCHEME	28
PART VI	APOLLO 4 SCHEME	32
PART VII	ADDITIONAL INFORMATION	36
	NOTICE OF GENERAL MEETING	41
	FORM OF PROXY FOR THE GENERAL MEETING	45
CORPORATE INFORMATION		47

EXPECTED TIMETABLES

EXPECTED TIMETABLE FOR THE COMPANY

Schemes
Latest time for receipt of forms of proxy for the General Meeting	10.00 a.m. on 17 September 2012
General Meeting	10.00 a.m. on 19 September 2012
Calculation Date	after 5.00 p.m. on 26 September 2012
Effective Date for the transfer of the assets and liabilities of the Target VCTs to the Company and the issue of New Shares pursuant to the Schemes*	27 September 2012
Announcement of the results of the Schemes	27 September 2012
Admission of and dealings in New Shares issued pursuant to the Schemes to commence	28 September 2012
CREST accounts credited with New Shares issued pursuant to the Schemes	28 September 2012
Certificates for New Shares issued pursuant to the Schemes dispatched	5 October 2012
(*The last trading date for the shares in the Target VCTs will, therefore, be 26 September 2012.)

Enhanced Buyback Facility

Enhanced Buyback Facility Record Date	1 October 2012
Enhanced Buyback Facility opens	1 October 2012
Enhanced Buyback Facility closes	noon on 30 November 2012
Purchase of existing Shares and issue of New Shares pursuant to the Enhanced Buyback Facility	4 December 2012
Announcement of the results of the Enhanced Buyback	4 December 2012
Admission of and dealings in New Shares issued pursuant to the Enhanced Buyback Facility commence	5 December 2012
Certificates for New Shares issued pursuant to the Enhanced Buyback Facility dispatched	12 December 2012
Offer
Offer opens	1 October 2012
Allotment of New Shares pursuant to the Offer	monthly
Admission of and dealings in New Shares issued pursuant to the Offer commence	3 business days following allotment
Certificates for New Shares issued pursuant to the Offer	10 business days following allotment

Certificates for New Shares issued pursuant to the Offer dispatched

Offer closes* noon on 5 April 2013

(*The Offer will close earlier than the date stated if it is fully subscribed. The Directors further reserve the right to close the Offer earlier or to extend the Offer to no later than 30 June 2013 and to accept applications and issue New Shares pursuant to the Offer at any time prior to or after the closing date.)

EXPECTED TIMETABLE FOR APOLLO 1

Date from which it is advised that dealings in Apollo 1 Shares should only be for cash settlement and immediate delivery of documents of title	7 September 2012
Latest time for receipt of forms of proxy for the Apollo 1 First General Meeting	10.30 a.m. on 17 September 2012
Apollo 1 First General Meeting	10.30 a.m. on 19 September 2012
Latest time for receipt of forms of proxy for the Apollo 1 Second General Meeting	10.00 a.m. on 25 September 2012
Apollo 1 register of members closed	26 September 2012
Record Date for Apollo 1 Shareholders' entitlements	5.00 p.m. on 26 September 2012
Calculation Date	after 5.00 p.m. on 26 September 2012
Dealings in Apollo 1 Shares suspended	7.30 a.m. on 27 September 2012
Apollo 1 Second General Meeting	10.00 a.m. on 27 September 2012
Effective Date for the transfer of the assets and liabilities of Apollo 1 to the Company and the issue of New Shares pursuant to the Apollo 1 Scheme*	27 September 2012
Announcement of the results of the Apollo 1 Scheme	27 September 2012
Cancellation of the Apollo 1 Shares' listing	8.00 a.m. on 26 October 2012
(*See the timetable for the Company with regard to admission, CREST accounts being credited and certificates being dispatched.)
EXPECTED TIMETABLE FOR APOLLO 2
Date from which it is advised that dealings in Apollo 2 Shares should only be for cash settlement and immediate delivery of documents of title	7 September 2012
Latest time for receipt of forms of proxy for the Apollo 2 First General Meeting	11.00 a.m. on 17 September 2012
Apollo 2 First General Meeting	11.00 a.m. on 19 September 2012
Latest time for receipt of forms of proxy for the Apollo 2 Second General Meeting	10.30 a.m. on 25 September 2012
Apollo 2 Register of Members closed	26 September 2012
Record Date for Apollo 2 Shareholders' entitlements	5.00 p.m. on 26 September 2012
Calculation Date	after 5.00 p.m. on 26 September 2012
Dealings in Apollo 2 Shares suspended	7.30 a.m. on 27 September 2012
Apollo 2 Second General Meeting	10.30 a.m. on 27 September 2012
Effective Date for the transfer of the assets and liabilities of Apollo 2 to the Company and the issue of New Shares pursuant to the Apollo 2 Scheme*	27 September 2012
Announcement of the results of the Apollo 2 Scheme	27 September 2012
Cancellation of the Apollo 2 Shares' listing	8.00 a.m. on 26 October 2012

(*See the timetable for the Company with regard to admission, CREST accounts being credited and certificates being dispatched.)

EXPECTED TIMETABLE FOR APOLLO 4

Date from which it is advised that dealings in Apollo 4 Shares should only be for cash settlement and immediate delivery of documents of title	7 September 2012
Latest time for receipt of forms of proxy for the Apollo 4 First General Meeting	11.30 a.m. on 17 September 2012
Apollo 4 First General Meeting	11.30 a.m. on 19 September 2012
Latest time for receipt of forms of proxy for the Apollo 4 Second General Meeting	11.00 a.m. on 25 September 2012
Apollo 4 Register of Members closed	26 September 2012
Record Date for Apollo 4 Shareholders' entitlements	5.00 p.m. on 26 September 2012
Calculation Date	after 5.00 p.m. on 26 September 2012
Dealings in Apollo 4 Shares suspended	7.30 a.m. on 27 September 2012
Apollo 4 Second General Meeting	11.00 a.m. on 27 September 2012
Effective Date for the transfer of the assets and liabilities of Apollo 4 to the Company and the issue of New Shares pursuant to the Apollo 4 Scheme*	27 September 2012
Announcement of the results of the Apollo 4 Scheme	27 September 2012
Cancellation of the Apollo 4 Shares' listing	8.00 a.m. on 26 October 2012

(*See the timetable for the Company with regard to admission, CREST accounts being credited and certificates being dispatched.)

PART I

DEFINITIONS

''AIM''	the Alternative Investment Market, a market operated by the London Stock Exchange
''Annual Report''	The annual report and financial statements for the Company for the year ended 31 January 2012
''Apollo 1''	Octopus Apollo VCT 1 plc
''Apollo 1 Board''	the board of directors of Apollo 1
''Apollo 1 First General Meeting''	the general meeting of Apollo 1 to be held on 19 September 2012
''Apollo 1 Meetings''	the Apollo 1 First General Meeting and the Apollo 1 Second General Meeting
''Apollo 1 Roll-Over Value''	the value of an Apollo 1 Share calculated in accordance with paragraph 4 of Part IV of this document
''Apollo 1 Scheme''	the proposed merger of the Company with Apollo 1 by means of placing Apollo 1 into members' voluntary liquidation pursuant to Section 110 of IA 1986 and the acquisition by the Company of all of Apollo 1's assets and liabilities in consideration for New Shares, further details of which are set out in Part IV of this document
''Apollo 1 Second General Meeting''	the general meeting of Apollo 1 to be held on 27 September 2012
''Apollo 1 Shareholders''	holders of Apollo 1 Shares (and each an ''Apollo 1 Shareholder'')
''Apollo 1 Shares''	ordinary shares of 10p each in the capital of Apollo 1 (and each an ''Apollo 1 Share'')
''Apollo 1 Transfer Agreement''	the agreement between the Company and Apollo 1 (acting through the Liquidators) for the transfer of all of the assets and liabilities of Apollo 1 by the Liquidators to the Company pursuant to the Apollo 1 Scheme
''Apollo 2''	Octopus Apollo VCT 2 plc
''Apollo 2 Board''	the board of directors of Apollo 2
''Apollo 2 First General Meeting''	the general meeting of Apollo 2 to be held on 19 September 2012
''Apollo 2 Meetings''	the Apollo 2 First General Meeting and the Apollo 2 Second General Meeting
''Apollo 2 Roll-Over Value''	the value of an Apollo 2 Share calculated in accordance with paragraph 4 of Part V of this document
''Apollo 2 Scheme''	the proposed merger of the Company with Apollo 2 by means of placing Apollo 2 into members' voluntary liquidation pursuant to Section 110 of IA 1986 and the acquisition by the Company of all of Apollo 2's assets and liabilities in consideration for New Shares, further details of which are set out in Part V of this document
''Apollo 2 Second General Meeting''	the general meeting of Apollo 2 to be held on 27 September 2012
''Apollo 2 Shareholders''	holders of Apollo 2 Shares (and each an ''Apollo 2 Shareholder'')
''Apollo 2 Shares''	ordinary shares of 10p each in the capital of Apollo 2 (and each an ''Apollo 2 Share'')

''Apollo 2 Transfer Agreement''	the agreement between the Company and Apollo 2 (acting through the Liquidators) for the transfer of all of the assets and liabilities of Apollo 2 by the Liquidators to the Company pursuant to the Apollo 2 Scheme
''Apollo 4''	Octopus Apollo VCT 4 plc
''Apollo 4 Board''	the board of directors of Apollo 4
''Apollo 4 First General Meeting''	the general meeting of Apollo 4 to be held on 19 September 2012
''Apollo 4 Meetings''	the Apollo 4 First General Meeting and the Apollo 4 Second General Meeting
''Apollo 4 Roll-Over Value''	the value of an Apollo 4 Share calculated in accordance with paragraph 4 of Part VI of this document
''Apollo 4 Scheme''	the proposed merger of the Company with Apollo 4 by means of placing Apollo 4 into members' voluntary liquidation pursuant to Section 110 of IA 1986 and the acquisition by the Company of all of Apollo 4's assets and liabilities in consideration for New Shares, further details of which are set out in Part VI of this document
''Apollo 4 Second General Meeting''	the general meeting of Apollo 4 to be held on 27 September 2012
''Apollo 4 Shareholders''	holders of Apollo 4 Shares (and each an ''Apollo 4 Shareholder'')
''Apollo 4 Shares''	ordinary shares of 10p each in the capital of Apollo 4 (and each an ''Apollo 4 Share'')
''Apollo 4 Transfer Agreement''	the agreement between the Company and Apollo 4 (acting through the Liquidators) for the transfer of all of the assets and liabilities of Apollo 4 by the Liquidators to the Company pursuant to the Apollo 4 Scheme
''Articles''	the articles of association of the Company, as amended from time to time
''Board''	the board of directors of the Company
''CA 1985''	the Companies Act 1985, as amended from time to time
''CA 2006''	the Companies Act 2006, as amended from time to time
''Calculation Date''	the date on which the Roll-Over Values and the Company Merger Value will be calculated, this being after the close of business on 26 September 2012
''Circular''	this document
''Companies''	the Company and the Target VCTs
''Company''	Octopus Apollo VCT 3 plc
''Company Merger Value''	the value of a Share calculated in accordance with paragraph 4 of Parts IV, V and VI of this document
''Directors''	the directors of the Company (and each a ''Director'')
''Effective Date''	the date on which the Schemes will become effective, anticipated as being 27 September 2012
''Enhanced Buyback Facility''	the enhanced buyback facility as contained in the Prospectus
''Enhanced Buyback Facility Record Date''	the record date to which Shareholders' entitlements will be allocated pursuant to the Enhanced Buyback Facility, this being 5.00 p.m on 1 October 2012 (or such other date as the Board may determine in its discretion)

''Enhanced Buyback Facility Related Party Transaction''	the administration fee arrangement proposed to be entered into between the Company and Octopus in respect of the Enhanced Buyback Facility, which constitutes a related party transaction under the Listing Rules, as further described on pages 16 and 20 of this document
''Enlarged Company''	the Company, following implementation of one or more of the Schemes
''FSA''	the Financial Services Authority
''FSMA''	the Financial Services and Markets Act 2000, as amended
''General Meeting''	the general meeting of the Company to be held on 19 September 2012
''HMRC''	Her Majesty's Revenue & Customs
''IA 1986''	the Insolvency Act 1986, as amended
''ITA 2007''	the Income Tax Act 2007, as amended
''Liquidators''	William Duncan and Sarah Louise Burge, RSM Tenon Limited, 2 Wellington Place, Leeds LS1 4AP, being the proposed liquidators for each of the Target VCTs
''Listing Rules''	the listing rules of the UKLA
''London Stock Exchange''	London Stock Exchange plc
''Merger Regulations''	the Venture Capital Trusts (Winding-up and Mergers) (Tax) Regulations 2004
''NAV'' or ''net asset value''	net asset value
''New Shares''	Shares to be issued by the Company pursuant to the Schemes, the Enhanced Buyback Facility and the Offer, as the context permits (and each a ''New Share'')
''Octopus''	Octopus Investments Limited, 20 Old Bailey, London EC4M 7AN
''Offer''	the offer for subscription of New Shares to raise up to £20 million (with an over-allotment facility to raise a further £10 million) contained in the Prospectus
''Offer Related Party Transaction''	the promotion fee arrangement proposed to be entered into between the Company and Octopus in respect of the Offer, which constitutes a related party transaction under the Listing Rules, as further described on pages 17 and 20 of this document
''Official List''	the official list of the UKLA
''Performance Fee Related Party Transaction''	the revised performance related incentive fee arrangements proposed to be entered into between the Company and Octopus, which constitutes a related party transaction under the Listing Rules, as further described on pages 18 and 20 of this document
''PLUS''	a prescribed market for the purposes of Section 118 of FSMA and a recognised investment exchange operated by PLUS Markets Group plc
''Proposals''	the proposals to acquire all of the assets and liabilities of the Target VCTs pursuant to the Schemes, authorise the Enhanced Buyback Facility and the Offer, approve the Related Party Transactions and pass the Resolutions
''Proposed Directors''	Murray Steele and Christopher Powles
''Prospectus''	the prospectus issued by the Company dated 17 August 2012 in connection with the Schemes

''Record Date''	the record date to which entitlements will be allocated pursuant to the Schemes, anticipated as being 26 September 2012
''Related Party Transactions''	the Enhanced Buyback Facility Related Party Transaction, the Offer Related Party Transaction and the Performance Fee Related Party Transaction
''Resolutions''	the resolutions to be proposed at the General Meeting (and each a ''Resolution'')
''Roll-Over Values''	the Apollo 1 Roll-Over Value, the Apollo 2 Roll-Over Value and the Apollo 4 Roll-Over Value
''Schemes''	the Apollo 1 Scheme, the Apollo 2 Scheme and the Apollo 4 Scheme (and each a ''Scheme'')
''Shareholders''	holders of Shares (and each a ''Shareholder'')
''Shares''	ordinary shares of 10p each in the capital of the Company (and each a ''Share'')
''Target VCT First General Meeting''	the Apollo 1 First General Meeting or the Apollo 2 First General Meeting or the Apollo 4 First General Meeting, as the context permits
''Target VCT Meetings''	in respect of a Target VCT, the relevant Target VCT First General Meeting to be held on 19 September 2012 and the second general meeting of that Target VCT to be held on 27 September 2012 respectively
''Target VCT Share''	an Apollo 1 Share or an Apollo 2 Share or an Apollo 4 Share, as the context permits (together ''Target VCT Shares'')
''Target VCTs''	Apollo 1, Apollo 2 and Apollo 4 (and each a ''Target VCT'')
''Target VCTs' Circular''	the joint circular issued by the Target VCTs to the Target VCT's Shareholders
''Target VCTs' Shareholders''	Apollo 1 Shareholders, Apollo 2 Shareholders and Apollo 4 Shareholders
''UK''	the United Kingdom
''UKLA'' or ''UK Listing Authority''	the UK Listing Authority, being the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part VII of the Financial Services and Markets Act 2000
''VCT'' or ''venture capital trust''	a company satisfying the requirements of Chapter 3 of Part 6 of ITA 2007 for venture capital trusts

PART II

RISK FACTORS

Shareholders and prospective Shareholders should consider carefully the following risk factors in addition to the other information presented in this document. If any of the risks described below were to occur, it could have a material effect on the Company's business, financial condition or results of operations. The risks and uncertainties described below (such as changes in legal, regulatory or tax requirements) are not the only ones the Company or Shareholders will face. Additional risks not currently known to the Company or the Board, or that the Company or the Board currently believe are not material, may also adversely affect the Company's business, financial condition or results of operations. The value of the Shares could decline due to any of the risk factors described below and Shareholders could lose part or all of their investment. Shareholders and prospective Shareholders should consult an independent financial adviser authorised under FSMA. References to the Company should be taken as including the Enlarged Company.

Scheme Related Risk Factors

Completion of the Schemes is dependent upon a number of conditions precedent being fulfilled, including the approval of Shareholders. Whilst the Board has identified a number of potential benefits for the Enlarged Company, there is no certainty that these benefits will lead to improved prospects for the Enlarged Company. If one or more of the Schemes are not approved and effected, the full benefits of the Enlarged Company may not be realised. Each Scheme is not conditional on the other Schemes being approved and the conditions precedent for the other Schemes being fulfilled. A Scheme will proceed independently and irrespective of the other Schemes.

Shareholders may be adversely affected by the performance of the investments, whether acquired from a Target VCT or made by the Company. The performance of the investments acquired from a Target VCT (as well as the investments of the Company) may restrict the ability of the Company following implementation of one or more of the Schemes to distribute any capital gains and revenue received on the investments transferred from a Target VCT to the Company (as well as the investments of the Company). Any gains (or losses) made on the investments of the Company will, following implementation of one or more of the Schemes, be shared amongst all Shareholders pro rata to the number of Shares then in issue.

Shareholders may be adversely affected by a change in the VCT status of the Company if a number of the investments acquired from a Target VCT or the investments of the Company, are, or become, unable to meet VCT requirements.

Enlarged Company Risk Factors

The value of Shares in the Enlarged Company, and the income from them, can fluctuate and Shareholders in the Enlarged Company may not get back the amount they invested when sold. In addition, there is no certainty that the market price of Shares in the Enlarged Company will fully reflect their underlying NAV nor that any dividends will be paid. Shareholders in the Enlarged Company should not rely upon any share buyback policy to offer any certainty of selling their Shares in the Enlarged Company at prices that reflect the underlying NAV.

There is no guarantee that the Enlarged Company will meet its objectives. The past performance of the Company, the Target VCTs and/or Octopus is no indication of future performance of the Enlarged Company. The return received by Shareholders in the Enlarged Company 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 and Shareholders in the Enlarged Company may not get back the full amount invested.

The existing Shares have been (and it is anticipated that the New Shares in the Enlarged Company to be issued pursuant to the Schemes will be) admitted to the premium segment of the Official List and are (or will be) traded on the London Stock Exchange's market for listed securities. However, the secondary market for VCT shares is generally illiquid (which may be partly attributable to the fact that initial tax reliefs are not available for VCT shares bought in the secondary market and because VCT shares usually trade at a discount to NAV) and Shareholders in the Enlarged Company may find it difficult to realise their investment. An investment in the Enlarged Company should, therefore, be considered as a long-term investment.

Whilst it is the intention of the Board that the Enlarged Company will continue to be managed so as to qualify as a VCT, there can be no guarantee that such status will be maintained. Failure to continue to meet the qualifying requirements could result in Shareholders in the Enlarged Company losing the tax reliefs available for VCT shares, resulting in adverse tax consequences including, if the holding has not been held for the relevant holding period, a requirement to repay the tax reliefs obtained. Furthermore, should the Enlarged Company lose its VCT status, dividends and gains arising on the disposal of Shares in the Enlarged Company would become subject to tax and the Enlarged Company would also lose its exemption from corporation tax on its capital gains.

The tax rules, or their interpretation, in relation to an investment in the Enlarged Company and/or the rates of tax may change during the life of the Enlarged Company and may apply retrospectively which may affect tax reliefs obtained by Shareholders in the Enlarged Company and the VCT status of the Enlarged Company.

Changes in legislation concerning VCTs in relation to what constitutes qualifying holdings and qualifying trades may limit the number of qualifying investment opportunities, reduce the level of returns which might otherwise be achievable or result in the Company not being able to meet its objectives.

If a Shareholder in the Enlarged Company disposes of his or her Shares in the Enlarged Company within five years of issue, he or she will be subject to clawback by HMRC of any income tax reliefs originally claimed. For these purposes, the date of issue of the New Shares in the Enlarged Company issued pursuant to the Schemes will be the original date of issue of the relevant Target VCT's shares in respect of which such New Shares in the Enlarged Company are issued. Any realised losses on the disposal of Shares in the Enlarged Company cannot be used to create an allowable loss for capital gains tax purposes.

Investment in unquoted companies (including AIM-traded and PLUS market-traded companies), by its nature, involves a higher degree of risk than investment in companies listed on the Official List, which could result in the value of such investment, and interest income and dividends therefrom, reducing. 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 and other regulatory changes and may not produce the hoped-for returns. In addition, the market for securities in smaller companies is 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. Full information for determining their value or the risks to which they are exposed may also not be available. Investment returns will, therefore, be uncertain and involve a higher degree of risk than investment in a company listed on the Official List.

Realisation of investments in unquoted companies may be difficult and may take considerable time. There may also be constraints imposed on the realisation of investments in order to maintain the VCT tax status of the Enlarged Company which may restrict the Enlarged Company's ability to obtain maximum value from its investments. In addition, although the Enlarged Company may receive customary venture capital rights in connection with some of its unquoted investments, as a minority investor it may not be in a position to fully protect its interests.

PART III

LETTER FROM THE CHAIRMAN

OCTOPUS APOLLO VCT 3 PLC

(Registered in England and Wales with registered number 05840377)

Tony Morgan (Chairman) 20 Old Bailey Rob Johnson London Matt Cooper EC4M 7AN

Directors: Registered Office:

17 August 2012

Dear Shareholder

Recommended proposals to:

• . acquire all of the assets and liabilities of the Target VCTs pursuant to the Schemes;
• . offer an enhanced buyback facility and offer for subscription;
• . renew and increase the authority to issue and repurchase shares;
• . cancel share premium and capital redemption reserves;
• . amend the articles of association of the Company; and
• . approve related party transactions.

The Board announced on 25 May 2012 that it had agreed terms in principle with each of the boards of Apollo 1, Apollo 2 and Apollo 4 (the Target VCTs) to merge each of the Target VCTs into the Company pursuant to separate schemes of reconstruction under Section 110 of IA 1986 (the Schemes). I am pleased to advise Shareholders that discussions have now successfully concluded and the purpose of this letter is to set out the proposals for the merger for consideration by Shareholders.

The merger of the Companies is expected to deliver cost savings and strategic benefits to all sets of shareholders and will, if effected, result in an Enlarged Company with total net assets of approximately £50 million. Based on the estimated costs of the merger (being £371,600) and the expected annual cost savings for the Enlarged Company (being £288,900), the Board believes that the costs of the merger would be recovered within 16 months as further detailed below.

Shareholder approval, pursuant to CA 2006, is required to issue New Shares in connection with the Schemes. A specific resolution to approve the acquisition of the assets and liabilities of each of the Target VCTs pursuant to the Schemes is not required under the Listing Rules or any other legislation or regulations which govern the Company. However, in light of the nature of the proposals, the Board believes it appropriate to include this as part of Resolutions 2 to 4 (as applicable) at the General Meeting. The Schemes are also conditional on the approval of Shareholders to amend the Articles to revoke the share capital limit which has been deemed incorporated into the Articles and continues to serve as a cap on the amount of share capital which the Company may issue, so as to be able to issue the requisite number of New Shares pursuant to the Schemes. Each Scheme is not, however, conditional on the other Schemes and will proceed independently and irrespective of the other Schemes.

The Board also proposes to provide Shareholders with the ability to participate in an enhanced buyback facility and raise further funds pursuant to a top-up offer. Implementation of the Enhanced Buyback Facility and the Offer also requires (and for the same reason) the approval of Shareholders to amend the Articles to revoke the share capital limit, as well as to enable the Company to purchase existing Shares and issue New Shares under CA 2006. Shareholder approval is also required under the Listing Rules to purchase existing Shares pursuant to the Enhanced Buyback Facility at a price greater than 105% of the average of the mid-market quotations of the Shares for the five business days preceding the purchase. In connection with performance incentive arrangements, the Enhanced Buyback Facility and the Offer, the Company is proposing to enter into related party transactions with Octopus, which also require Shareholder approval pursuant to the Listing Rules.

In addition, the Company proposes to renew and increase the general authority to issue and repurchase shares, to cancel share premium and capital redemption reserves and to amend the Company's articles of association, such approval being required pursuant to CA 2006.

Background

The table below provides a summary of historical information of the Company and the Target VCTs together with the latest published NAVs, the number of venture capital investments within the portfolios of each company and the respective carrying value of these investments.

	Date of launch	Funds raised since launch (£)	Unaudited net assets (£)*	NAV per share (p)*	Number of venture capital investments*	Carrying value of the venture capital investments (£)*
Company	July 2006	27.1 million	24,457,715	91.4	19	22,720,754
Apollo 1	May 2006	8.8 million	8,121,668	94.9	14	7,265,870
Apollo 2	May 2006	8.8 million	8,120,274	94.9	14	7,265,870
Apollo 4	June 2008	11.5 million	11,234,814	97.7	12	10,507,158

* Taken from the unaudited management accounts to 30 April 2012 for the Companies (which is prior to the payment of dividends after 30 April 2012).

Further information relating to the portfolios of the Company and Target VCTs is set out in Part IX of the Prospectus which accompanies this document.

The objective of each of the Companies is the same, that being to invest in a diversified portfolio of UK smaller companies in order to generate income and capital growth over the long-term. The Companies also have the same investment policies.

The separate 'Apollo' named VCTs were originally established so as to provide the ability to access larger deals through co-investment. As a result, 88.4% of the aggregate portfolio across the Companies is represented by venture capital investments held by two or more of the Companies as at 30 April 2012 (representing £42.2 million out of the aggregate £47.8 million of venture capital investments). As the portfolios of the Companies are now materially invested, and due to the changes made to the VCT investment limits and size tests (in particular, the removal of the £1 million investment limit per VCT), the benefit of 'sister' VCTs is now significantly reduced.

VCTs are required to be listed on the premium segment of the Official List, which involves a significant level of listing costs, as well as related fees to ensure they comply with all relevant legislation. A larger VCT should be better placed to spread such running costs across a larger asset base and facilitate better liquidity management and, as a result, may be able to maximise investment opportunities and sustain a higher level of dividends to shareholders over its life.

In September 2004, the Merger Regulations were introduced allowing VCTs to be acquired by, or merge with, each other without prejudicing the VCT tax reliefs obtained by their shareholders. A number of VCTs have taken advantage of these regulations to create larger VCTs for economic and administration efficiencies, as well as to improve portfolio diversification.

With the above in mind, the Board entered into discussions with the boards of the Target VCTs to merge the Companies to create a single, larger VCT. The aim is to achieve long-term strategic benefits and reductions in the annual running costs for all shareholders.

The Schemes

The mechanism by which the merger will be completed is as follows:

. each Target VCT will be placed into members' voluntary liquidation pursuant to a scheme of reconstruction under Section 110 of IA 1986; and

. all of the assets and liabilities of each Target VCT will be transferred to the Company in consideration for the issue of New Shares (which will be issued directly to the shareholders of the relevant Target VCT).

In respect of each Scheme, the New Shares to be issued will be calculated on a relative net asset value basis. The relative net asset values will be the unaudited net asset values of the Companies as at the Calculation Date (this being 26 September 2012), adjusted to take into consideration each company's allocation of the estimated merger costs.

Each Scheme is not conditional on the other Schemes and will proceed independently and irrespective of the other Schemes. Each Scheme will require the approval by the shareholders of the Company (including Resolution 1 which will approve an amendment to the Articles to revoke the share capital limit as further detailed below) and the relevant Target VCT of the relevant resolutions to be proposed at the General Meeting and the relevant Target VCT Meetings respectively, as well as the other conditions set out in paragraph 8 of Parts IV to VI of this document applicable to the relevant Scheme.

The merger will result in the creation of an enlarged company and should result in savings in running costs and simpler administration. As all of the Companies have the same investment policies, a number of common investments and are managed by Octopus, this is achievable without material disruption to the Companies and their combined portfolio of investments.

The Board considers that the merger will bring a number of benefits to all of the Companies' groups of shareholders through:

• . a reduction in annual running costs for the Enlarged Company compared to the aggregate annual running costs of the separate Companies;
• . the creation of a single VCT of a more economically efficient size with a greater capital base over which to spread annual running costs;
• . participation in a larger VCT with the longer term potential for a more diversified portfolio, thereby spreading the portfolio risk across a broader range of investments;
• . increasing the ability to support follow-on investments and new investments in the future due to the increased size and reduced running costs of the Enlarged Company; and
• . the potential to enhance the ability to pay dividends and buy back shares in the future due to the increased size and reduced running costs of the Enlarged Company, as well as improve liquidity in the secondary market, as it is hoped that a larger vehicle will attract increased interest.

The Board and the boards of the Target VCTs' consider that the level of continued administrative annual running costs of the individual Companies can be substantially reduced through the merger, resulting in benefits for all groups of shareholders. The directors of the Companies estimate that annual running costs, excluding investment management fees, for the Companies are as follows:

	Unaudited net assets (£)*	Annual running costs (£)**	Percentage of unaudited net assets (%)
Company	24,457,715	213,943	0.9
Apollo 1	8,121,668	121,825	1.5
Apollo 2	8,120,274	121,804	1.5
Apollo 4	11,234,814	157,287	1.4

* Taken from the unaudited management accounts to 30 April 2012 for the Companies (which is prior to the payment of dividends after 30 April 2012).

** Annual running costs for the Companies taken from the audited accounts for the year ended 31 January 2012 (these being the annual running costs of the relevant company excluding annual management fees, performance incentive fees and exceptional items, but taking into account any annual expenses costs cap).

To the extent only one or more of the Schemes are completed, the benefits of the Enlarged Company may not be fully realised (in particular, the annual costs savings would be reduced accordingly).

The aggregate anticipated cost of undertaking the merger is approximately £371,600, including VAT, legal and professional fees, stamp duty and the costs of winding up the Target VCTs. The costs of the merger will be split proportionately between the Companies by reference to their respective merger net assets (ignoring merger costs). Completion of the three Schemes at the same time results in the aggregate merger costs (and, therefore, the Company's estimated allocation of such costs) being lower per VCT than separate mergers being completed with the Companies or other single VCTs (i.e. there are economies of scale from merging four VCTs in one transaction). Each of the Companies will be responsible for its allocation of the estimated merger costs whether or not a particular Scheme is approved and becomes effective.

On the assumption that the net assets of the Enlarged Company will remain the same immediately after the merger, the reduction in the annual running costs (ignoring annual management fees, performance incentive fees and exceptional items) for the Enlarged Company is estimated to be at least £288,900 per annum, in particular, through the reduction in directors' and advisers' fees, audit fees, secretarial fees, printing costs and listing fees, as well as other fixed costs. This reduction would represent approximately 0.6% per annum of the expected net assets of the Enlarged Company. On this basis, and assuming that no new funds were to be raised or investments realised to meet annual costs, the Board and the Target VCTs' Boards believe that the costs of the merger would be recovered within 16 months.

The Board and the Target VCTs' Boards believe that the Schemes provide an efficient way of merging the Companies with a lower level of costs compared with other merger routes. The Company was selected as the acquirer as it is the largest of the Companies (resulting in a lower amount of stamp duty being payable) and the most mature. Shareholders should note that the merger by way of the Schemes will be outside the provisions of the City Code on Takeovers and Mergers.

As is required by CA 2006, prior to the allotment of the New Shares pursuant to a Scheme, the Company will be posting to the relevant Target VCT's shareholders at their registered addresses and uploading on to the Company's website a valuation report which will be prepared by Scott-Moncrieff. The report will confirm to the Company that the value of the relevant Target VCT's assets and liabilities which are being transferred to the Company as part of the relevant Scheme is not less than the aggregate amount treated as being paid up on the New Shares being issued to the relevant Target VCT's shareholders pursuant to that Scheme.

Target VCT shareholders who do not vote in favour of the resolution to be proposed at their respective Target VCT First General Meeting are entitled to dissent and have their shareholding purchased by the Liquidators of that Target VCT at the break value price of the relevant Target VCT Share (expected to be at a significant reduction to the net asset value of a Target VCT Share).

If some or all of the Schemes do not become effective, the Company will, subject to those Schemes becoming effective, continue in its current form. The Company will continue, irrespective of whether or not some or all of the Schemes become effective, to proceed with the Enhanced Buyback Facility and Offer.

Had the Schemes been completed based on the illustrations set out in Parts IV to VI of this document, the number of New Shares that would have been issued are as follows for each existing Target VCT Share held:

	Number of New Shares
One Apollo 1 Share	1.037649
One Apollo 2 Share	1.037459
One Apollo 4 Share	1.068556

The illustrations have not been adjusted for the payment of dividends or shares bought back by the Companies.

Full details of the terms of each Scheme are set out in Parts IV to VI of this document.

Enhanced Buyback Facility

Enhanced buyback facilities are arrangements by which shareholders can sell existing shares in a VCT and reinvest the proceeds in new shares in the same VCT, on which upfront tax relief may then be available.

The terms of the Enhanced Buyback Facility are as follows:

• . The Company is making a tender offer to all UK Shareholders on the register on 1 October 2012 to purchase up to 50% of the issued Share capital as at that date.
• . Shareholders eligible to participate may tender some or all of their existing holding of Shares, such Shareholders:
• o being entitled to sell up to a basic entitlement (this being up to 50% of their holding on the register on 1 October 2012, rounded down to the nearest whole Share); and
• o being able to tender additional Shares that may be sold to the extent that other Shareholders do not participate up to the maximum amount available (any such excess to be allocated pro rata to the number of Shares tendered, subject to the discretion of the Board).
• . The purchase will be subject to each participating Shareholder agreeing to reinvest all of the proceeds of sale in the purchase of New Shares.
• . The purchase will be completed at a price equal to the most recently published net asset value per Share at the time of purchase.
• . The reinvestment will be completed at a price equal to the most recently published net asset value per Share at the time of allotment, divided by 0.95 (representing the costs of providing the facility, referred to below).
• . Allocations of New Shares under the reinvestment will be rounded down and fractions will not be allotted.
• . Financial intermediaries will receive a commission of an amount equal to 2.5% of their client's reinvestment (which may be waived and reinvested for additional New Shares purchased on behalf of their client as part of the Enhanced Buyback Facility) and annual trail commission.

Octopus will be paid an administration fee of 5% of the gross proceeds raised through the issue of New Shares (ignoring reinvested commission) from which all costs and expenses will be paid, including initial intermediary commission, but excluding annual trail commission (Enhanced Buyback Facility Related Party Transaction). Any costs above this, excluding annual trail commission, will be met by Octopus. There will, therefore, be a corresponding small reduction to the net assets of the Company, though the net asset value per Share is not expected to be affected.

The net effect for participating Shareholders is that they will 'substitute' 1,000 existing Shares with 950 New Shares (plus any New Shares issued pursuant to reinvested commission), the small reduction in the value of the investment holding representing the costs of implementing the Enhanced Buyback Facility), with the reinvestment qualifying for upfront income tax relief of up to 30% of the amount reinvested for qualifying Shareholders. HMRC has confirmed that usual VCT tax reliefs, including the upfront income tax relief, will be available on the New Shares issued pursuant to the Enhanced Buyback Facility.

Participation in the Enhanced Buyback Facility is open only to UK Shareholders (and their UK beneficial holder if the Shares are held by a nominee) on the register of members on the Enhanced Buyback Record Date, this being 1 October 2012 and may not be suitable for some Shareholders, in particular where Shares have not been held for the requisite five-year holding period to maintain any upfront income tax relief obtained on original subscription. Shareholders should also note that New Shares issued to participating Shareholders under the Enhanced Buyback Facility will be subject to a new fiveyear holding period to maintain any new upfront income tax relief obtained on the reinvestment. There could also be an income tax charge for Shareholders on any excess of the purchase price above the original issue price for the Shares that are bought back.

The Enhanced Buyback Facility is contained in the Prospectus which accompanies this document and is conditional on the approval by Shareholders of Resolutions 1, 5 and 10 to be proposed at the General Meeting (which include the approval to amend the Articles by revoking the share capital limit and the authorities required to purchase Shares and allot New Shares (having disapplied pre-emption rights) pursuant to the Enhanced Buyback Facility). The extent to which the Enhanced Buyback Facility will be implemented is further conditional on the Company having sufficient reserves to effect the purchase of Shares pursuant to the Enhanced Buyback Facility.

The Enhanced Buyback Facility will open on 1 October 2012 (with, as mentioned above, an Enhanced Buyback Facility Record Date for participation of 1 October 2012, i.e. after the Schemes are expected to become effective and New Shares have been issued to Target VCTs' Shareholders) and will close on 30 November 2012. The Board may amend or extend (as applicable) these dates at their discretion. The Enhanced Buyback Facility is not, however, conditional on the merger becoming effective or implementation of the Offer. The number of New Shares issued pursuant to the Enhanced Buyback Facility is not expected to reduce the amount seeking to be raised pursuant to the Offer (as further set out below).

The Offer

The Board has decided to take the opportunity to raise up to £20 million through an offer for subscription (the Offer). The Board may, in their absolute discretion, decide to increase the Offer to raise up to a further £10 million if there proves to be excess demand from investors, subject to a maximum of 35 million New Shares being offered pursuant to the Offer. This will provide Shareholders and new investors with the opportunity to invest in the Company and benefit from the tax reliefs available to qualifying investors in VCTs.

The Board believes that:

• . This is an advantageous time in the economic cycle, with Octopus beginning to see a strengthening pipeline of investment opportunities, at a time when prices of assets are still low by historic standards. Funds raised under the Offer will be invested, in part, to take advantage of any rally in valuations and performance of smaller companies as the pace of economic growth accelerates.
• . The Offer should enable the Company to maintain its portfolio diversification and continue to invest funds raised before 6 April 2012 in companies where such funds will be used for share acquisitions to support buy-outs and company acquisitions by using the new funds raised to maintain liquidity for dividends and buybacks.
• . The changes to the VCT investment limits and size tests provide an opportunity to participate in larger transactions and continue to support existing portfolio companies.
• . New offers by VCTs continue to offer attractive tax incentives for private investors when compared to other types of tax efficient investment.
• . The fixed running costs of the Company will be spread over a larger asset base, thereby reducing costs as a percentage of the Company's assets.

New Shares issued under the Offer will be at an offer price equal to the most recently published NAV of a Share, divided by 0.95 to take into account Offer costs of 5% and rounded up to the nearest 0.1p per share. The net proceeds of the Offer will be invested in accordance with the investment policy of the Company.

Octopus will act as promoter to the Offer and be paid a commission of 5% of the gross proceeds raised through the issue of New Shares (ignoring reinvested commission) from which all costs and expenses will be paid, including any permissible initial intermediary commission but excluding any permissible trail commission (Offer Related Party Transaction). Any costs above this, excluding any permissible annual trail commission will be met by Octopus.

The Offer is contained in the Prospectus which accompanies this document and is conditional on the approval by Shareholders of Resolutions 1, 6 and 11 to be proposed at the General Meeting (which include the approval to amend the Articles by revoking the authorised share capital provisions which are deemed incorporated into the Articles and the authority required to allot New Shares (having disapplied pre-emption rights) pursuant to the Offer. The Offer will open on 1 October 2012 and is not conditional on the merger becoming effective or the implementation of the Enhanced Buyback Facility.

Investment Management, Administration and Performance Incentive Arrangements

Octopus is the investment manager of all of the Companies and also provides administration and secretarial services to all of the Companies.

In respect of the Company, Octopus receives an annual investment management fee of an amount equal to 2% of the net assets of the Company at the end of the preceding accounting period (this being £486,650 in the year ended 31 January 2012), payable quarterly in advance and plus any applicable VAT. Octopus also receives an annual administration and accounting fee equal to 0.3% of the net assets of the Company at the end of the preceding accounting period (this being £72,997 in the year ended 31 January 2012), payable quarterly in advance (plus applicable VAT) and an annual company secretarial

fee of £5,000 (plus VAT). These fee arrangements will continue to apply to the Enlarged Company, but will be across the enlarged net assets.

The existing annual expense cap on normal running costs of an amount equal to 3.3% of the net assets will continue in respect of the Enlarged Company.

No performance related incentive fee is payable in the first five accounting periods. Octopus is then entitled to an annual performance related incentive fee of an amount equal to 20% (in respect of each share in issue) of the amount by which the Total Return per Share (this being NAV and dividends paid or declared) increases from the Total Return per Share as at the start of the sixth accounting period (or, if greater, 100p) in excess of the HSBC bank rate. The amount of the fee is calculated as at the date the annual accounts for the relevant period are published and in respect of shares in issue as at that date. The amount is then adjusted to deduct performance related incentive fees paid or payable in respect of previous accounting periods.

The Board and Octopus have agreed, subject to Shareholder approval, to replace the existing performance related incentive fee arrangements with revised arrangements (Performance Fee Related Party Transaction). The main purpose of introducing these revised arrangements is to make them more consistent with the arrangements introduced more recently by the Target VCTs and to introduce a 'high watermark'. Under the revised arrangements, Octopus will be entitled to an annual performance related incentive fee in each accounting period commencing on or after 1 February 2012, subject to the Total Return being 100p at the end of the relevant period. The amount of the fee will be equal to 20% of the amount by which the Total Return as at the end of the relevant period exceeds the Overall Hurdle Return (and payable in respect of each share in issue at the end of the relevant period).

For these purposes, Total Return means NAV per Share plus dividends paid per Share since launch and the Overall Hurdle Return means the greater of the:

• . Base Rate Hurdle Return which means the Total Return as at 31 January 2012 increased by the cumulative annual weighted average of the Bank of England base rate (measured daily) to the end of the relevant period; and
• . High Watermark Hurdle Return which means the highest level of Total Return as at the end of the accounting period commencing on 1 February 2012 or any subsequent accounting period.

The performance related incentive fee will be calculated and payable annually.

The Performance Fee Related Party Transaction requires the approval of Shareholders, which is being sought pursuant to Resolution 12 to be proposed at the General Meeting. The Performance Fee Related Party Transaction is not, however, conditional on the merger becoming effective nor is it conditional on the Enhanced Buyback Facility or the Offer being implemented (or vice versa). Should the resolution not be approved, the Company (or, as the case may be, the Enlarged Company) will continue under the existing performance related incentive fee arrangements as summarised above.

Constitution of the Board

The Board has three non-executive directors: Tony Morgan (Chairman), Rob Johnson and Matt Cooper.

The Board and the Target VCTs' Boards have considered what the size and future composition of the Enlarged Company's board should be following the merger and it has been agreed that I shall step down as Chairman of the Company, but will continue as a Director of the Company, and Rob Johnson will step down as a Director of the Company. Murray Steele (chairman of Apollo 4) and Christopher Powles (a director of Apollo 4) will then be appointed as directors of the Company, with Murray Steele being appointed as Chairman of the Company. Matt Cooper will continue as a Director of the Company and, as he is also currently a director of Apollo 1 and Apollo 2, he will bring recent knowledge and experience of these Target VCTs to the Enlarged Company. The composition of the Board will continue to be kept under review.

Aggregate annual directors' fee entitlements across the Companies are currently £193,000. The aggregate annual directors' fees for the Enlarged Company will be £69,000, resulting in an aggregate annual saving of £124,000 across the Companies.

The directors of the Target VCTs have (subject to their respective Schemes becoming effective) agreed to waive their directors' fees from the Effective Date and Rob Johnson's appointment will terminate without compensation.

On the assumption that the merger is approved, the Board would like to take the opportunity to welcome Murray Steele and Chris Powles as Directors and to thank Rob Johnson for his commitment and guidance to the Company.

Renewal of Share Issue and Buyback Authorities

The Company also proposes at the General Meeting to renew and increase its authorities to issue shares (having disapplied pre-emption rights) for general purposes and make market purchases of shares reflecting the increased share capital of the Company following the merger and the Offer (assuming maximum subscription). These are general annual authorities taken each year for the purposes of small top up offers and the buyback policy and form part of Resolution 6 to be proposed at the General Meeting.

Cancellation of Share Premium and Capital Redemption Reserves

A share premium account and a capital redemption reserve form part of a company's capital and, save without the approval of shareholders by special resolution and the approval of the High Court, those reserves are incapable of being used to fund distributions, to assist in writing off losses or to finance repurchases of a public company's shares. Cancelling share premium and capital redemption reserves allows a company to create a special reserve that can assist in writing off losses, which will enhance the ability to make distributions. It also facilitates a company's ability, where required, to implement share buybacks. The Company has previously cancelled share premium for these purposes but the issue of New Shares pursuant to the Schemes, the Enhanced Buyback Facility and the Offer will result in the creation of further share premium, as well as further capital redemption reserves increasing the existing capital redemption reserves resulting from buybacks undertaken by the Company, including pursuant to the Enhanced Buyback Facility.

The Board, therefore, also proposes at the General Meeting to seek the approval of Shareholders to cancel further share premium and capital redemption reserves, subject to the sanction of the Court, pursuant to Resolutions 7 and 8.

Resolution 7 will authorise the cancellation of the amount standing to the credit of the share premium account as at 17 August 2012 and share premium created pursuant to New Shares to be issued, or otherwise, in connection with the Schemes. Court sanction of this authority is intended to be applied for as soon as possible after the Effective Date, to result in the Company having sufficient reserves for the purposes of purchasing Shares pursuant to the Enhanced Buyback Facility.

Resolution 8 is an additional authority to Resolution 7 to cancel the share premium account and the capital redemption reserve of the Company at a future date to be approved by the Board. This resolution will enable the Company to cancel any share premium account and capital redemption reserve which may arise after the cancellations provided for in Resolution 7 have taken effect and will provide the Board will flexibility in managing the Company's reserves in a manner which it believes will promote the interests of the Company and its members.

Amendment to the Articles

Under CA 2006, all provisions contained in a company's memorandum of association were, from 1 October 2009, deemed to be contained in its articles. As a result, from 1 October 2009, the Company has been limited as to the amount of Shares it can issue by reference to its then authorised share capital of £5 million.

In order to allow the Directors to issue the New Shares pursuant to the Schemes, the Enhanced Buyback Facility, the Offer and for the purpose of further issues, it is proposed to amend the Articles to revoke this share capital limit. Shareholder approval (pursuant to an ordinary resolution) is required to make this amendment and is being sought pursuant to Resolution 1 to be proposed at the General Meeting,

The Articles also include a statement of the authorised share capital of the Company as at the date the Articles were adopted. The Articles are further proposed to be amended to delete this statement for clarity pursuant to Resolution 9 to be proposed at the General Meeting.

If the merger is effected, the Board intends to change the name of the Company from Octopus Apollo VCT 3 plc to Octopus Apollo VCT plc. In order to undertake such a name change, it is also proposed pursuant to Resolution 9 to be proposed at the General Meeting to further amend the Articles to allow for the Board, as is permitted under the CA 2006, to change the name of the Company by way of a board resolution. By undertaking such a change to the Articles, rather than seeking Shareholder approval to

the actual change of name, the Board can avoid the costs of convening a Shareholder meeting should it be proposed that the Company change its name again in the future.

Related Party Transactions

In connection with the Enhanced Buyback Facility and the Offer, the Company intends to enter into the Enhanced Buyback Facility Related Party Transaction and the Offer Related Party Transaction respectively (in each case, as further detailed above). Arrangements whereby the manager effectively underwrites the costs of the issue of shares, is conventional in the VCT industry and provides certainty as to the overall costs of the issue of new shares.

The Company also intends to enter into the Performance Fee Related Party Transaction (also as further detailed above). The Board are of the opinion that the proposed revised performance related incentive arrangements with Octopus are appropriate for the Company going forward.

Octopus is regarded as a related party pursuant to the Listing Rules by virtue of it being the investment manager of the Company. Shareholder approval is, therefore, required under the Listing Rules to enter into the Related Party Transactions and is being sought pursuant to Resolution 10 in respect of the Enhanced Buyback Facility Related Party Transaction, Resolution 11 in respect of the Offer Related Party Transaction and Resolution 12 in respect of the Performance Fee Related Party Transaction.

Taxation Implications of the Schemes

The following paragraphs apply to the Company and to persons holding Shares as an investment in the Company who are the absolute beneficial owners of such Shares and are resident in the UK. They may not apply to certain classes of persons such as dealers in securities. The information is based on current UK law and practice, is subject to changes therein, is given by way of general summary and does not constitute legal or tax advice. If you are in any doubt about your position, or if you may be subject to tax in a jurisdiction other than the UK, you should consult your independent financial adviser.

The implementation of the Schemes should not affect the status of the Company as a VCT or the reliefs obtained by Shareholders in respect of existing Shares. Confirmation to this effect has been obtained from HMRC.

Although the Company will be required to pay UK stamp duty on the transfer to it of the assets and liabilities of the Target VCTs (which form part of the merger costs), no UK stamp duty will be payable directly by existing Shareholders as a result of the implementation of the Schemes.

A summary of the taxation implications of the Enhanced Buyback Facility and the Offer is set out in the Prospectus, which Shareholders are advised to read before participating.

General Meeting

Notice of the General Meeting is set out at the end of this document. The General Meeting will be held at 10.00 a.m. on 19 September 2012 at the offices of Octopus, 20 Old Bailey, London EC4M 7AN.

An explanation of the Resolutions to be proposed at the General Meeting is set out below:

Resolution 1 will amend the Articles to revoke the share capital limit deemed to be contained in the Articles.

Resolution 2 is a composite resolution to approve the acquisition of all of the assets and liabilities of Apollo 1 and issue New Shares in connection therewith.

Paragraph (i) of Resolution 2 will approve the acquisition of all of the assets and liabilities of Apollo 1 pursuant to the Apollo 1 Scheme.

Paragraph (ii) of Resolution 2 will authorise the Directors pursuant to Section 551 CA 2006 to allot shares in the capital of the Company up to an aggregate nominal amount of £1,150,000 (representing 45.90% of the issued share capital of the Company as at 16 August 2012, this being the latest practicable date prior to publication of this document) in connection with the Apollo 1 Scheme. The authority conferred by paragraph (ii) of Resolution 2 will expire 18 months from the date of the passing of the resolution unless renewed, varied or revoked by the Company in general meeting.

Resolution 3 is a composite resolution to approve the acquisition of all of the assets and liabilities of Apollo 2 and issue New Shares in connection therewith.

Paragraph (i) of Resolution 3 will approve the acquisition of all of the assets and liabilities of Apollo 2 pursuant to the Apollo 2 Scheme.

Paragraph (ii) of Resolution 3 will authorise the Directors pursuant to Section 551 CA 2006 to allot shares in the capital of the Company up to an aggregate nominal amount of £1,150,000 (representing 45.90% of the issued share capital of the Company as at 16 August 2012, this being the latest practicable date prior to publication of this document) in connection with the Apollo 2 Scheme. The authority conferred by paragraph (ii) of Resolution 3 will expire 18 months from the date of the passing of the resolution unless renewed, varied or revoked by the Company in general meeting and will be in addition to the authority conferred by Resolution 2.

Resolution 4 is a composite resolution to approve the acquisition of all of the assets and liabilities of Apollo 4 and issue New Shares in connection therewith.

Paragraph (i) of Resolution 4 will approve the acquisition of all of the assets and liabilities of Apollo 4 pursuant to the Apollo 4 Scheme.

Paragraph (ii) of Resolution 4 will authorise the Directors pursuant to Section 551 CA 2006 to allot shares in the capital of the Company up to an aggregate nominal amount of £1,700,000 (representing 67.85% of the issued share capital of the Company as at 16 August 2012, this being the latest practicable date prior to publication of this document) in connection with the Apollo 4 Scheme. The authority conferred by paragraph (ii) of Resolution 4 will expire 18 months from the date of the passing of the resolution unless renewed, varied or revoked by the Company in general meeting and will be in addition to the authorities conferred by Resolutions 2 and 3.

Resolution 5 is a composite resolution which will provide the authorities to implement the Enhanced Buyback Facility.

Paragraph (i) of Resolution 5 will authorise the Board to purchase shares at a fixed price equal to the latest published net asset value per share prior to the date of purchase, rounded down to the nearest 0.1p per share.

Paragraph (ii) of Resolution 5 will authorise the Board to issue new shares at a fixed price equal to the latest published net asset value per share prior to the date of allotment, divided by 0.95 to take into account costs, rounded up to the nearest 0.1p per share.

Paragraph (iii) of Resolution 5 disapplies pre-emption rights in connection with the issue of such new shares.

The maximum number of shares which may be bought back and issued under this authority is such number of shares that will represent 50% of the issued share capital of the Company as at 5.00 p.m. on 1 October 2012, or such later date as the Directors may determine and the authority is limited to being used for an enhanced buyback facility. The shares purchased pursuant to this authority will be cancelled. The authority conferred by this resolution will expire on the conclusion of the annual general meeting of the Company to be held in 2013 and is in addition to the authorities conferred by Resolutions 2 to 4.

Resolution 6 is a composite resolution to renew and increase share allotment and repurchase authorities. This is a renewal of existing authorities to reflect the enlarged share capital in the Company.

Paragraph (i) of Resolution 6 will authorise the Directors pursuant to Section 551 CA 2006 to allot shares in the capital of the Company up to an aggregate nominal amount of £4,600,000 (representing 183.58% of the issued share capital of the Company as at 16 August 2012, this being the latest practicable date prior to publication of this document) for the purpose set out in paragraph (ii) of Resolution 6. The authority conferred by paragraph (i) of Resolution 6 will be in addition to the authorities conferred by Resolutions 2 to 5 and will expire on the conclusion of the annual general meeting to be held in 2013 unless renewed, varied or revoked by the Company in general meeting.

Paragraph (ii) of Resolution 6 will disapply pre-emption rights in respect of the allotment of shares in the capital of the Company (a) with a nominal value of up to £3,500,000 in aggregate pursuant to offer(s) for subscription; and (b) with a nominal value representing up to, in aggregate, 10% of its issued share capital from time to time, where the proceeds of which may be used, in part or whole, to purchase the Company's own shares. The authority conferred by paragraph (ii) of Resolution 6 will expire on the conclusion of the annual general meeting to be held in 2013 unless renewed, varied or revoked by the Company in general meeting.

Paragraph (iii) of Resolution 6 will authorise the Company to make market purchases of up to 16,489,000 shares (representing approximately 14.99% of the maximum expected share capital following the merger and the Offer). Any shares bought back under this authority will be at such price as may be determined by the Board, and in accordance with the Listing Rules, and may be cancelled or held in treasury as may be determined by the Board. The authority conferred by paragraph (iii) of Resolution 6 will expire on the conclusion of the annual general meeting of the Company to be held in 2013.

Resolution 7 will authorise the cancellation of the amount standing to the credit of the share premium account as at 17 August 2012 and the amount credited to the share premium account of the Company pursuant to the issue of shares, or otherwise in connection with the Schemes.

Resolution 8 will authorise the cancellation of the share premium account and the capital redemption reserve of the Company.

Resolution 9 will amend the articles of association of the Company.

Paragraph (i) of Resolution 9 will delete article 5.1 which contains a statement of the authorised share capital of the Company as at the date the Articles were adopted,

Paragraph (ii) of Resolution 9 will insert a new article 107.3 which will, in effect, allow the Board to resolve to change the name of the Company. If the merger is effected, the Board intend to utilise this authority to change the name of the Company from Octopus Apollo VCT 3 plc to Octopus Apollo VCT plc.

Resolution 10 will approve the Enhanced Buyback Facility Related Party Transaction.

Resolution 11 will approve the Offer Related Party Transaction.

Resolution 12 will approve the Performance Fee Related Party Transaction.

Resolutions 1 to 4 and 10 to 12 will be proposed as ordinary resolutions requiring the approval of at least 50% of the votes cast at the General Meeting. Resolutions 5 to 9 will be proposed as special resolutions requiring the approval of at least 75% of the votes cast at the General Meeting. The Resolutions are not conditional on each other, however:

• . to implement the Apollo 1 Scheme, Resolutions 1 and 2 will need to be passed;
• . to implement the Apollo 2 Scheme, Resolutions 1 and 3 will need to be passed;
• . to implement the Apollo 4 Scheme, Resolutions 1 and 4 will need to be passed;
• . to implement the Enhanced Buyback Facility, Resolutions 1, 5 and 10 will need to be passed;
• . to implement the Offer, Resolutions 1, 6 and 11 will need to be passed; and
• . to implement the revised performance related incentive fee arrangements with Octopus, Resolution 12 will need to be passed.

Action to be Taken

Before taking any action, you are recommended to read the further information set out in this document.

Shareholders will find attached at the end of this document the form of proxy for use at the General Meeting. Whether or not you propose to attend the General Meeting, you are requested to complete and return the form of proxy attached so as to be received not less than 48 hours before the time appointed for holding of the General Meeting. Completion and return of a form of proxy will not prevent you from attending and voting in person at the General Meeting, should you wish to do so.

Recommendation

The Board, which has been so advised by Matrix Corporate Capital LLP, considers the Related Party Transactions to be fair and reasonable so far as Shareholders are concerned. In providing its advice, Matrix Corporate Capital LLP has taken into account the Board's commercial assessment of the Related Party Transactions.

Octopus is regarded as a related party under the Listing Rules and, therefore, cannot vote (and, as it does not hold any Shares in the Company, will not be entitled to vote) on Resolutions 10 to 12 to be proposed at the General Meeting. Octopus will take all reasonable steps to ensure that its associates (including any directors, members and employees) will also not vote on these resolutions. Matt Cooper is

a director of Octopus and is, therefore, regarded to be an interested director pursuant to the Listing Rules. Matt Cooper has not participated in the Board's consideration of the Related Party Transactions and has agreed not to vote on Resolutions 10 to 12 at the General Meeting to approve the Related Party Transactions.

The Board is of the opinion that the Proposals and all resolutions to be proposed at the General Meeting are in the best interests of the Shareholders as a whole and unanimously recommends you to vote in favour of the Resolutions as they intend to do in respect of their own holdings of 15,023 Shares (5,000 Shares excluding those held by Matt Cooper for the purposes of Resolutions 10 to 12), representing approximately 0.06 per cent. of the issued share capital of the Company (0.02 per cent. for the purposes of Resolutions 10 to 12, excluding the Shares held by Matt Cooper).

Yours faithfully

Tony Morgan Chairman

PART IV

APOLLO 1 SCHEME

1. Definitions and Interpretation

The definitions set out in Part I of this document shall have the same meanings when used in the context of this Part IV.

On or immediately prior to the Effective Date, Octopus (on the instruction of the Liquidators) shall calculate the Apollo 1 Roll-Over Value and the Company Merger Value in accordance with paragraph 4 below.

2. Provision of Information

On the Effective Date, the Liquidators shall receive all the cash, undertakings and other assets and liabilities of Apollo 1 and shall deliver to the Company:

• . particulars of all of the assets and liabilities of Apollo 1;
• . a list certified by the registrars of the names and addresses of, and the number of Apollo 1 Shares held by, each of the Apollo 1 Shareholders on the register at 5.00 p.m. on the Record Date;
• . an estimate of the winding-up costs of Apollo 1; and
• . the amount estimated to be required to purchase the holdings of any dissenting Apollo 1 Shareholders.

3. Transfer Agreement

On the Effective Date, the Company and the Liquidators (on behalf of Apollo 1) will enter into the Apollo 1 Transfer Agreement (subject to such modifications as may be agreed between the parties thereto) pursuant to which the Liquidators will procure the transfer of all of the assets and liabilities of Apollo 1 to the Company in exchange for the issue of New Shares (fully paid) to the Apollo 1 Shareholders on the basis set out in paragraph 4 below.

In further consideration of such transfer of assets and liabilities of Apollo 1 to the Company, the Company will, pursuant to the Apollo 1 Transfer Agreement, undertake to pay all liabilities incurred by the Liquidators including, but not limited to, the implementation of the Apollo 1 Scheme, the winding up of Apollo 1 and the purchase for cash of any holdings of dissenting Apollo 1 Shareholders.

4. Calculations

Except as otherwise provided for in the Apollo 1 Scheme terms, for the purposes of calculating the Apollo 1 Roll-Over Value, the Company Merger Value and the number of New Shares to be issued, the following provisions will apply:

Apollo 1 Roll-Over Value

The Apollo 1 Roll-Over Value will be calculated as:

$$
\frac{A-(B\ +\ C)}{D}
$$

where:

A = the unaudited net assets of Apollo 1 as at the Calculation Date (this being the unaudited net assets of Apollo 1 as at 31 July 2012 (taken from the Apollo 1 unaudited management accounts to that date)), plus (i) any increase/decrease in the valuation of an investment held by Apollo 1 where there has been an event in the period between 31 July 2012 and the Calculation Date which requires a revaluation of the investment in accordance with Financial Reporting Standards 26 'Financial Instruments: Measurement' (IAS39) and using International Private Equity and Venture Capital Valuation Guidelines, (ii) any material increase/decrease in the cash position and/or debtors and/or the creditors of Apollo 1 between 31 July 2012 and the Calculation Date, and (iii) any adjustment that both the Apollo 1 Board and the Board consider appropriate to reflect any other actual or contingent benefit or liability of Apollo 1;

• B = Apollo 1's pro rata proportion (by reference to the Roll-Over Values and the Company Merger Value, but ignoring merger costs) of the costs of the Schemes plus £10,000 (representing an amount of contingency to cover any unforeseen additional costs attributable to Apollo 1 incurred by the Company, which will indemnify the Liquidators in respect of all costs of Apollo 1 following the transfer on the Effective Date);
• C = the amount estimated to be required to purchase the holdings of Apollo 1 Shares from dissenting Apollo 1 Shareholders; and
• D = the number of Apollo 1 Shares in issue as at close of business on the Record Date (save for any Apollo 1 Shares held by dissenting Apollo 1 Shareholders).

Company Merger Value

The Company Merger Value will be calculated as:

$$
\frac{E-F}{}
$$

G

where:

• E = the unaudited net assets of the Company as at the Calculation Date (this being the unaudited net assets of the Company as at 31 July 2012 (taken from the Company's unaudited management accounts to that date)), plus (i) any increase/decrease in the valuation of an investment held by the Company where there has been an event in the period between 31 July 2012 and the Calculation Date which requires a revaluation of the investment in accordance with Financial Reporting Standards 26 'Financial Instruments: Measurement' (IAS39) and using International Private Equity and Venture Capital Valuation Guidelines, (ii) any material increase/decrease in the cash position and/or debtors and/or the creditors of the Company between 31 July 2012 and the Calculation Date and (iii) any adjustment that both the Board and the Apollo 1 Board consider appropriate to reflect any other actual or contingent benefit or liability of the Company);
• F = the Company's pro rata proportion (by reference to the Roll-Over Values and the Company Merger Value, but ignoring merger costs) of the costs of the Schemes; and
• G = the number of Shares in issue as at close of business on the Record Date.

New Shares to be issued to Apollo 1 Shareholders

The number of New Shares to be issued to Apollo 1 Shareholders (save for any dissenting Apollo 1 Shareholders) will be calculated as follows:

$$
\left(\frac{H}{I}\right) \times J
$$

where:

H = the Apollo 1 Roll-Over Value;

• I = the Company Merger Value; and
• J = the number of Apollo 1 Shares in issue as at close of business on the Record Date (save for any Apollo 1 Shares held by dissenting Apollo 1 Shareholders).

The Company will not issue the New Shares pursuant to the Apollo 1 Scheme until it has been confirmed that the valuation report prepared by Scott-Moncrieff under CA 2006 in respect of the Apollo 1 Scheme has been provided to the Company and posted to the shareholders of Apollo 1. The New Shares will then be issued directly to Apollo 1 Shareholders pro-rata to their existing holdings (disregarding Apollo 1 Shares held by dissenting Apollo 1 Shareholders) on the instruction of the Liquidators.

The merger ratio will be rounded down to six decimal places and entitlements will be rounded down to the nearest whole number and any fractional entitlements per Apollo 1 Shareholder (which will not exceed £1) will be aggregated and sold in the market and the proceeds retained for the benefit of the Enlarged Company.

Where Apollo 1 Shareholders hold their Apollo 1 Shares in certificated form, they will receive a new certificate for the New Shares issued. Where Apollo 1 Shareholders hold their Apollo 1 Shares in uncertificated form, their CREST accounts will be credited with the holding in New Shares.

Dividend payment mandates provided for Apollo 1 Shares will, unless an Apollo 1 Shareholder advises otherwise in writing to Capita Registrars, be transferred to the New Shares.

An application has been made to the UKLA for the New Shares to be issued pursuant to the Apollo 1 Scheme to be listed on the premium segment of the Official List and will be made to the London Stock Exchange for such New Shares to be admitted to trading on its market for listed securities. From the date of issue, the New Shares issued pursuant to the Apollo 1 Scheme will rank pari passu with the existing issued Shares.

Apollo 1 Scheme Illustration

As at 30 April 2012, the unaudited NAV of an Apollo 1 Share (taken from the Apollo 1 unaudited management accounts to that date) was 94.9p. The Apollo 1 Roll-Over Value (had the merger been completed on that date and calculated in accordance with this paragraph 4) would have been 94.12p (assuming no dissenting Apollo 1 Shareholders).

As at 30 April 2012, the unaudited NAV of a Share (taken from the Company's management accounts to that date) was 91.4p. The Company Merger Value (had the merger been completed on that date and calculated in accordance with this paragraph 4) would have been 90.70p.

The number of New Shares that would have been issued to Apollo 1 Shareholders (had the merger been completed on that date and calculated in accordance with this paragraph 4) would be 8,879,046 (1.037649 New Shares for every Apollo 1 Share held).

The above illustration has not been adjusted for the payment of dividends or shares bought back by the Company and Apollo 1.

5. Modifications

The provisions of the Apollo 1 Scheme shall have effect, subject to such non-material modifications or additions as the parties to the Apollo 1 Transfer Agreement may from time to time approve in writing (including amendment of the timetable).

6. Reliance on Information

The Liquidators and the Company shall be entitled to act and rely, without enquiry, on any information furnished or made available to them or any of them, as the case may be, in connection with the Apollo 1 Scheme and the Apollo 1 Transfer Agreement including, for the avoidance of doubt, any certificate, opinion, advice, valuation, evidence or other information furnished or made available to them by the Company, Apollo 1, the Board, the Apollo 1 Board, any individual director of the Company or Apollo 1, Octopus, the registrar or the custodians or bankers of the Company and Apollo 1 or its or their other professional advisers and the Liquidators shall not be liable or responsible for any loss suffered as a result thereof.

7. Liquidators' Liability

Nothing in the Apollo 1 Scheme or in any document executed under or in connection with the Apollo 1 Scheme shall impose any personal liability on the Liquidators or either of them save for any liability arising out of any negligence, breach of duty or wilful default by the Liquidators in the performance of their duties and this shall, for the avoidance of doubt, exclude any such liability for any action taken by the Liquidators in accordance with the Apollo 1 Scheme or the Apollo 1 Transfer Agreement.

8. Conditions

The Apollo 1 Scheme is conditional upon:

. the passing of Resolutions 1 and 2 to be proposed at the General Meeting;

• . notice of dissent not having been received from Apollo 1 Shareholders holding more than 10% in nominal value of Apollo 1's entire issued share capital under Section 111 of IA 1986; and
• . the passing of the resolutions to be proposed at the Apollo 1 Meetings.

Subject to the above, the Apollo 1 Scheme shall become effective immediately after the passing of the special resolution for the winding up of Apollo 1 to be proposed at the Apollo 1 Second General Meeting. If it becomes effective, the Apollo 1 Scheme shall be binding on all Shareholders (including dissenting Apollo 1 shareholders) and all persons claiming through or under them.

If the conditions set out above have not been satisfied by 30 November 2012, the Apollo 1 Scheme shall not become effective and the Company will continue in its current form (but subject to the implementation of the other Schemes) and the Board will continue to keep the future of the Company under review.

9. Dissenting Apollo 1 Shareholders

The Liquidators will offer to purchase the holdings of dissenting Apollo 1 Shareholders at the break value price of an Apollo 1 Share, this being an estimate of the amount a holder of such shares would receive in an ordinary winding-up of Apollo 1 if all of the assets of Apollo 1 had to be realised The break value of an Apollo 1 Share is expected to be significantly below the unaudited net assets value of such shares due to the nature of the underlying assets. Apollo 1 Shareholders should also be aware that a purchase by the Liquidators will be regarded as a disposal for HMRC purposes, thereby triggering clawback of any upfront income tax relief received on subscription where the Apollo 1 Shares have not been held for five years.

10. Governing Law

The Apollo 1 Scheme shall, in all respects, be governed by and construed in accordance with the laws of England and Wales.

PART V

APOLLO 2 SCHEME

1. Definitions and Interpretation

The definitions set out in Part I of this document shall have the same meanings when used in the context of this Part V.

On or immediately prior to the Effective Date, Octopus (on the instruction of the Liquidators) shall calculate the Apollo 2 Roll-Over Value and the Company Merger Value in accordance with paragraph 4 below.

2. Provision of Information

On the Effective Date, the Liquidators shall receive all the cash, undertakings and other assets and liabilities of Apollo 2 and shall deliver to the Company:

• . particulars of all of the assets and liabilities of Apollo 2;
• . a list certified by the registrars of the names and addresses of, and the number of Apollo 2 Shares held by, each of the Apollo 2 Shareholders on the register at 5.00 p.m. on the Record Date;
• . an estimate of the winding-up costs of Apollo 2; and
• . the amount estimated to be required to purchase the holdings of any dissenting Apollo 2 Shareholders.

3. Transfer Agreement

On the Effective Date, the Company and the Liquidators (on behalf of Apollo 2) will enter into the Apollo 2 Transfer Agreement (subject to such modifications as may be agreed between the parties thereto) pursuant to which the Liquidators will procure the transfer of all of the assets and liabilities of Apollo 2 to the Company in exchange for the issue of New Shares (fully paid) to the Apollo 2 Shareholders on the basis set out in paragraph 4 below.

In further consideration of such transfer of assets and liabilities of Apollo 2 to the Company, the Company will, pursuant to the Apollo 2 Transfer Agreement, undertake to pay all liabilities incurred by the Liquidators including, but not limited to, the implementation of the Apollo 2 Scheme, the winding up of Apollo 2 and the purchase for cash of any holdings of dissenting Apollo 2 Shareholders.

4. Calculations

Except as otherwise provided for in the Apollo 2 Scheme terms, for the purposes of calculating the Apollo 2 Roll-Over Value, the Company Merger Value and the number of New Shares to be issued, the following provisions will apply:

Apollo 2 Roll-Over Value

The Apollo 2 Roll-Over Value will be calculated as:

$$
\frac{A-(B+C)}{D}
$$

where:

A = the unaudited net assets of Apollo 2 as at the Calculation Date (this being the unaudited net assets of Apollo 2 as at 31 July 2012 (taken from the Apollo 2 unaudited management accounts to that date)), plus (i) any increase/decrease in the valuation of an investment held by Apollo 2 where there has been an event in the period between 31 July 2012 and the Calculation Date which requires a revaluation of the investment in accordance with Financial Reporting Standards 26 'Financial Instruments: Measurement' (IAS39) and using International Private Equity and Venture Capital Valuation Guidelines, (ii) any material increase/decrease in the cash position and/or debtors and/or the creditors of Apollo 2 between 31 July 2012 and the Calculation Date, and (iii) any adjustment that both the Apollo 2 Board and the Board consider appropriate to reflect any other actual or contingent benefit or liability of Apollo 2;

• B = Apollo 2's pro rata proportion (by reference to the Roll-Over Values and the Company Merger Value, but ignoring merger costs) of the costs of the Schemes plus £10,000 (representing an amount of contingency to cover any unforeseen additional costs attributable to Apollo 2 incurred by the Company, which will indemnify the Liquidators in respect of all costs of Apollo 2 following the transfer on the Effective Date);
• C = the amount estimated to be required to purchase the holdings of Apollo 2 Shares from dissenting Apollo 2 Shareholders; and
• D = the number of Apollo 2 Shares in issue as at close of business on the Record Date (save for any Apollo 2 Shares held by dissenting Apollo 2 Shareholders).

Company Merger Value

The Company Merger Value will be calculated as:

$$
\frac{E-F}{}
$$

G

where

• E = the unaudited net assets of the Company as at the Calculation Date (this being the unaudited net assets of the Company as at 31 July 2012 (taken from the Company's unaudited management accounts to that date)), plus (i) any increase/decrease in the valuation of an investment held by the Company where there has been an event in the period between 31 July 2012 and the Calculation Date which requires a revaluation of the investment in accordance with Financial Reporting Standards 26 'Financial Instruments: Measurement' (IAS39) and using International Private Equity and Venture Capital Valuation Guidelines, (ii) any material increase/decrease in the cash position and/or debtors and/or the creditors of the Company between 31 July 2012 and the Calculation Date and (iii) any adjustment that both the Board and the Apollo 2 Board consider appropriate to reflect any other actual or contingent benefit or liability of the Company);
• F = the Company's pro rata proportion (by reference to the Roll-Over Values and the Company Merger Value, but ignoring merger costs) of the costs of the Schemes; and
• G = the number of Shares in issue as at close of business on the Record Date.

New Shares to be issued to Apollo 2 Shareholders

The number of New Shares to be issued to Apollo 2 Shareholders (save for any dissenting Apollo 2 Shareholders) will be calculated as follows:

$$
\left(\frac{H}{I}\right) \times J
$$

where:

• H = the Apollo 2 Roll-Over Value;
• I = the Company Merger Value; and
• J = the number of Apollo 2 Shares in issue as at close of business on the Record Date (save for any Apollo 2 Shares held by dissenting Apollo 2 Shareholders).

The Company will not issue the New Shares pursuant to the Apollo 2 Scheme until it has been confirmed that the valuation report prepared by Scott-Moncrieff under CA 2006 in respect of the Apollo 2 Scheme has been provided to the Company and posted to the shareholders of Apollo 2. The New Shares will then be issued directly to Apollo 2 Shareholders pro-rata to their existing holdings (disregarding Apollo 2 Shares held by dissenting Apollo 2 Shareholders) on the instruction of the Liquidators.

The merger ratio will be rounded down to six decimal places and entitlements will be rounded down to the nearest whole number and any fractional entitlements per Apollo 2 Shareholder (which will not exceed £1) will be aggregated and sold in the market and the proceeds retained for the benefit of the Enlarged Company.

Where Apollo 2 Shareholders hold their Apollo 2 Shares in certificated form, they will receive a new certificate for the New Shares issued. Where Apollo 2 Shareholders hold their Apollo 2 Shares in uncertificated form, their CREST accounts will be credited with the holding in New Shares.

Dividend payment mandates provided for Apollo 2 Shares will, unless an Apollo 2 Shareholder advises otherwise in writing to Capita Registrars, be transferred to the New Shares.

An application has been made to the UKLA for the New Shares to be issued pursuant to the Apollo 2 Scheme to be listed on the premium segment of the Official List and will be made to the London Stock Exchange for such New Shares to be admitted to trading on its market for listed securities. From the date of issue, the New Shares issued pursuant to the Apollo 2 Scheme will rank pari passu with the existing issued Shares.

Apollo 2 Scheme Illustration

As at 30 April 2012, the unaudited NAV of an Apollo 2 Share (taken from the Apollo 2 unaudited management accounts to that date) was 94.9p. The Apollo 2 Roll-Over Value (had the merger been completed on that date and calculated in accordance with this paragraph 4) would have been 94.10p (assuming no dissenting Apollo 2 Shareholders).

As at 30 April 2012, the unaudited NAV of a Share (taken from the Company's to that date) was 91.4p. The Company Merger Value (had the merger been completed on that date and calculated in accordance with this paragraph 4) would have been 90.70p.

The number of New Shares that would have been issued to Apollo 2 Shareholders (had the merger been completed on that date and calculated in accordance with this paragraph 4) would be 8,877,414 (1.037459 New Shares for every Apollo 2 Share held).

The above illustration has not been adjusted for the payment of dividends or shares bought back by the Company and Apollo 2.

5. Modifications

The provisions of the Apollo 2 Scheme shall have effect subject to such non-material modifications or additions as the parties to the Apollo 2 Transfer Agreement may from time to time approve in writing (including amendment to the timetable).

6. Reliance on Information

The Liquidators and the Company shall be entitled to act and rely, without enquiry, on any information furnished or made available to them or any of them, as the case may be, in connection with the Apollo 2 Scheme and the Apollo 2 Transfer Agreement including, for the avoidance of doubt, any certificate, opinion, advice, valuation, evidence or other information furnished or made available to them by the Company, Apollo 2, the Board, the Apollo 2 Board, any individual director of the Company or Apollo 2, Octopus, the registrar or the custodians or bankers of the Company and Apollo 2 or its or their other professional advisers and the Liquidators shall not be liable or responsible for any loss suffered as a result thereof.

7. Liquidators' Liability

Nothing in the Apollo 2 Scheme or in any document executed under or in connection with the Apollo 2 Scheme shall impose any personal liability on the Liquidators or either of them save for any liability arising out of any negligence, breach of duty or wilful default by the Liquidators in the performance of their duties and this shall, for the avoidance of doubt, exclude any such liability for any action taken by the Liquidators in accordance with the Apollo 2 Scheme or the Apollo 2 Transfer Agreement.

8. Conditions

The Apollo 2 Scheme is conditional upon:

. the passing of Resolutions 1 and 3 to be proposed at the General Meeting;

• . notice of dissent not having been received from Apollo 2 Shareholders holding more than 10% in nominal value of Apollo 2's entire issued share capital under Section 111 of IA 1986; and
• . the passing of the resolutions to be proposed at the Apollo 2 Meetings.

Subject to the above, the Apollo 2 Scheme shall become effective immediately after the passing of the special resolution for the winding up of Apollo 2 to be proposed at the Apollo 2 Second General Meeting. If it becomes effective, the Apollo 2 Scheme shall be binding on all Shareholders (including dissenting Apollo 2 shareholders) and all persons claiming through or under them.

If the conditions set out above have not been satisfied by 30 November 2012, the Apollo 2 Scheme shall not become effective and the Company will continue in its current form (but subject to the implementation of the other Schemes) and the Board will continue to keep the future of the Company under review.

9. Dissenting Apollo 2 Shareholders

The Liquidators will offer to purchase the holdings of dissenting Apollo 2 Shareholders at the break value price of an Apollo 2 Share, this being an estimate of the amount a holder of such shares would receive in an ordinary winding-up of Apollo 2 if all of the assets of Apollo 2 had to be realised. The break value of an Apollo 2 Share is expected to be significantly below the unaudited net asset value of such shares due to the nature of the underlying assets. Apollo 2 Shareholders should also be aware that a purchase by the Liquidators will be regarded as a disposal for HMRC purposes, thereby triggering clawback of any upfront income tax relief received on subscription where the Apollo 2 Shares have not been held for five years.

10. Governing Law

The Apollo 2 Scheme shall, in all respects, be governed by and construed in accordance with the laws of England and Wales.

PART VI

APOLLO 4 SCHEME

1. Definitions and Interpretation

The definitions set out in Part I of this document shall have the same meanings when used in the context of this Part VI.

On or immediately prior to the Effective Date, Octopus (on the instruction of the Liquidators) shall calculate the Apollo 4 Roll-Over Value and the Company Merger Value in accordance with paragraph 4 below.

2. Provision of Information

On the Effective Date, the Liquidators shall receive all the cash, undertakings and other assets and liabilities of Apollo 4 and shall deliver to the Company:

• . particulars of all of the assets and liabilities of Apollo 4;
• . a list certified by the registrars of the names and addresses of, and the number of Apollo 4 Shares held by, each of the Apollo 4 Shareholders on the register at 5.00 p.m. on the Apollo 4 Record Date;
• . an estimate of the winding-up costs of Apollo 4; and
• . the amount estimated to be required to purchase the holdings of any dissenting Apollo 4 Shareholders.

3. Transfer Agreement

On the Effective Date, the Company and the Liquidators (on behalf of Apollo 4) will enter into the Apollo 4 Transfer Agreement (subject to such modifications as may be agreed between the parties thereto) pursuant to which the Liquidators will procure the transfer of all of the assets and liabilities of Apollo 4 to the Company in exchange for the issue of New Shares (fully paid) to the Apollo 4 Shareholders on the basis set out in paragraph 4 below.

In further consideration of such transfer of assets and liabilities of Apollo 4 to the Company, the Company will, pursuant to the Apollo 4 Transfer Agreement, undertake to pay all liabilities incurred by the Liquidators including, but not limited to, the implementation of the Apollo 4 Scheme, the winding up of Apollo 4 and the purchase for cash of any holdings of dissenting Apollo 4 Shareholders.

4. Calculations

Except as otherwise provided for in the Apollo 4 Scheme terms, for the purposes of calculating the Apollo 4 Roll-Over Value, the Company Merger Value and the number of New Shares to be issued, the following provisions will apply:

Apollo 4 Roll-Over Value

The Apollo 4 Roll-Over Value will be calculated as:

$$
\frac{A-(B+C)}{D}
$$

where:

A = the unaudited net assets of Apollo 4 as at the Calculation Date (this being the unaudited net assets of Apollo 4 as at 31 July 2012 (taken from the Apollo 4 management accounts to that date)), plus (i) any increase/decrease in the valuation of an investment held by Apollo 4 where there has been an event in the period between 31 July 2012 and the Calculation Date which requires a revaluation of the investment in accordance with Financial Reporting Standards 26 'Financial Instruments: Measurement' (IAS39) and using International Private Equity and Venture Capital Valuation Guidelines, (ii) any material increase/decrease in the cash position and/or debtors and/or the creditors of Apollo 4 between 31 July 2012 and the Calculation Date, and (iii) any adjustment that both the Apollo 4 Board and the Board consider appropriate to reflect any other actual or contingent benefit or liability of Apollo 4;

• B = Apollo 4's pro rata proportion (by reference to the Roll-Over Values and the Company Merger Value, but ignoring merger costs) of the costs of the Schemes plus £10,000 (representing an amount of contingency to cover any unforeseen additional costs attributable to Apollo 4 incurred by the Company, which will indemnify the Liquidators in respect of all costs of Apollo 4 following the transfer on the Effective Date);
• C = the amount estimated to be required to purchase the holdings of Apollo 4 Shares from dissenting Apollo 4 Shareholders; and
• D = the number of Apollo 4 Shares in issue as at close of business on the Record Date (save for any Apollo 4 Shares held by dissenting Apollo 4 Shareholders).

Company Merger Value

The Company Merger Value will be calculated as:

$$
\frac{E-F}{G}
$$

where

• E = the unaudited net assets of the Company as at the Calculation Date (this being the unaudited net assets of the Company as at 31 July 2012 (taken from the Company's unaudited management accounts to that date)), plus (i) any increase/decrease in the valuation of an investment held by the Company where there has been an event in the period between 31 July 2012 and the Calculation Date which requires a revaluation of the investment in accordance with Financial Reporting Standards 26 'Financial Instruments: Measurement' (IAS39) and using International Private Equity and Venture Capital Valuation Guidelines, (ii) any material increase/decrease in the cash position and/or debtors and/or the creditors of the Company between 31 July 2012 and the Calculation Date and (iii) any adjustment that both the Board and the Apollo 4 Board consider appropriate to reflect any other actual or contingent benefit or liability of the Company);
• F = the Company's pro rata proportion (by reference to the Roll-Over Values and the Company Merger Value, but ignoring merger costs) of the costs of the Schemes; and
• G = the number of Shares in issue as at close of business on the Record Date.

New Shares to be issued to Apollo 4 Shareholders

The number of New Shares to be issued to Apollo 4 Shareholders (save for any dissenting Apollo 4 Shareholders) will be calculated as follows:

$$
\left(\frac{H}{I}\right) \times J
$$

where:

• H = the Apollo 4 Roll-Over Value;
• I = the Company Merger Value; and
• J = the number of Apollo 4 Shares in issue as at close of business on the Record Date (save for any Apollo 4 Shares held by dissenting Apollo 4 Shareholders).

The Company will not issue the New Shares pursuant to the Apollo 4 Scheme until it has been confirmed that the valuation report prepared by Scott-Moncrieff under CA 2006 in respect of the Apollo 4 Scheme has been provided to the Company and posted to the shareholders of Apollo 4. The New Shares will then be issued directly to Apollo 4 Shareholders pro-rata to their existing holdings (disregarding Apollo 4 Shares held by dissenting Apollo 4 Shareholders) on the instruction of the Liquidators.

The merger ratio will be rounded down to six decimal places and entitlements will be rounded down to the nearest whole number and any fractional entitlements per Apollo 4 Shareholder (which will not exceed £1) will be aggregated and sold in the market and the proceeds retained for the benefit of the Enlarged Company.

Where Apollo 4 Shareholders hold their Apollo 4 Shares in certificated form, they will receive a new certificate for the New Shares issued. Where Apollo 4 Shareholders hold their Apollo 4 Shares in uncertificated form, their CREST accounts will be credited with the holding in New Shares.

Dividend payment mandates provided for Apollo 4 Shares will, unless an Apollo 4 Shareholder advises otherwise in writing to Capita Registrars, be transferred to the New Shares.

An application has been made to the UKLA for the New Shares to be issued pursuant to the Apollo 4 Scheme to be listed on the premium segment of the Official List and will be made to the London Stock Exchange for such New Shares to be admitted to trading on its market for listed securities. From the date of issue, the New Shares issued pursuant to the Apollo 4 Scheme will rank pari passu with the existing issued Shares.

Apollo 4 Scheme Illustration

As at 30 April 2012, the unaudited NAV of an Apollo 4 Share (taken from the Apollo 4 unaudited management accounts to that date) was 97.7p. The Apollo 4 Roll-Over Value (had the merger been completed on that date and calculated in accordance with this paragraph 4) would have been 96.92p (assuming no dissenting Apollo 4 Shareholders).

As at 30 April 2012, the unaudited NAV of a Share (taken from the Company's management accounts to that date) was 91.4p. The Company Merger Value (had the merger been completed on that date and calculated in accordance with this paragraph 4) would have been 90.70p.

The number of New Shares that would have been issued to Apollo 4 Shareholders (had the merger been completed on that date and calculated in accordance with this paragraph 4) would be 12,286,730 (1.068556 New Shares for every Apollo 4 Share held).

The above illustration has not been adjusted for the payment of dividends or shares bought back by the Company and Apollo 4.

5. Modifications

The provisions of the Apollo 4 Scheme shall have effect subject to such non-material modifications or additions as the parties to the Apollo 4 Transfer Agreement may from time to time approve in writing (including amendment of the timetable).

6. Reliance on Information

The Liquidators and the Company shall be entitled to act and rely, without enquiry, on any information furnished or made available to them or any of them, as the case may be, in connection with the Apollo 4 Scheme and the Apollo 4 Transfer Agreement including, for the avoidance of doubt, any certificate, opinion, advice, valuation, evidence or other information furnished or made available to them by the Company, Apollo 4, the Board, the Apollo 4 Board, any individual director of the Company or Apollo 4, Octopus, the registrar or the custodians or bankers of the Company and Apollo 4 or its or their other professional advisers and the Liquidators shall not be liable or responsible for any loss suffered as a result thereof.

7. Liquidators' Liability

Nothing in the Apollo 4 Scheme or in any document executed under or in connection with the Apollo 4 Scheme shall impose any personal liability on the Liquidators or either of them save for any liability arising out of any negligence, breach of duty or wilful default by the Liquidators in the performance of their duties and this shall, for the avoidance of doubt, exclude any such liability for any action taken by the Liquidators in accordance with the Apollo 4 Scheme or the Apollo 4 Transfer Agreement.

8. Conditions

The Apollo 4 Scheme is conditional upon:

. the passing of Resolutions 1 and 4 to be proposed at the General Meeting;

• . notice of dissent not having been received from Apollo 4 Shareholders holding more than 10% in nominal value of Apollo 4's entire issued share capital under Section 111 of IA 1986; and
• . the passing of the resolutions to be proposed at the Apollo 4 Meetings.

Subject to the above, the Apollo 4 Scheme shall become effective immediately after the passing of the special resolution for the winding up of Apollo 4 to be proposed at the Apollo 4 Second General Meeting. If it becomes effective, the Apollo 4 Scheme shall be binding on all Shareholders (including dissenting Apollo 4 shareholders) and all persons claiming through or under them.

If the conditions set out above have not been satisfied by 30 November 2012, the Apollo 4 Scheme shall not become effective and the Company will continue in its current form (but subject to the implementation of the other Schemes) and the Board will continue to keep the future of the Company under review.

9. Dissenting Apollo 4 Shareholders

The Liquidators will offer to purchase the holdings of dissenting Apollo 4 Shareholders at the break value price of an Apollo 4 Share, this being an estimate of the amount a holder of such shares would receive in an ordinary winding-up of Apollo 4 if all of the assets of Apollo 4 had to be realised. The break value of an Apollo Share is expected to be significantly below the unaudited net asset value of such shares due to the nature of the underlying assets. Apollo 4 Shareholders should also be aware that a purchase by the Liquidators will be regarded as a disposal for HMRC purposes, thereby triggering clawback of any upfront income tax relief received on subscription where the Apollo 4 Shares have not been held for five years.

10. Governing Law

The Apollo 4 Scheme shall, in all respects, be governed by and construed in accordance with the laws of England and Wales.

PART VII

ADDITIONAL INFORMATION

1. Responsibility

The Company, the Directors and the Proposed Directors accept responsibility for the information contained in this document. To the best of the knowledge and belief of the Company, the Directors and the Proposed Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.

2. Share Capital

2.1 As at 16 August 2012 (this being the latest practicable date prior to the publication of this document), the issued share capital of the Company was as follows:

	Issued and fully paid
	No. of Shares	(£)
Shares (10p each)	25,056,684	2,505,668.40

2.2 As at 16 August 2012 (this being the latest practicable date prior to the publication of this document), no share or loan capital of the Company was under option or had been agreed, conditionally or unconditionally, to be put under option, nor did the Company hold any share capital in treasury.

3. Directors and their Interests

• 3.1 The names and business addresses of the Directors, all of whom are non-executive, are as follows:
• . Arthur William Crawford Morgan (Chairman)
• . Matthew Jonathan Cooper
• . Robert James Johnson

all of 20 Old Bailey, London EC4M 7AN (the registered office and principal place of business of the Company).

3.2 As at 16 August 2012 (this being the latest practicable date prior to publication of this document), the interests of the Directors (and their immediate families) and the directors of the Target VCTs in the issued share capital of the Company and the Target VCTs were as follows:

	Company			Apollo 1		Apollo 2		Apollo 4
Directors	Shares	% of issued share capital	Apollo 1 Shares	% of Apollo 1 issued share capital	Apollo 2 Shares	% of Apollo 2 issued share capital	Apollo 4 Shares	% of Apollo 4 issued share capital
Tony Morgan	5,000	0.02	–	–	–	–	–	–
Matt Cooper	10,023	0.04	5,012	0.06	5,012	0.06	–	–
Rob Johnson	–	–	–	–	–	–	–	–
Andrew Boyle	–	–	26,375	0.33	26,375	0.33	–	–
Rupert Bell	–	–	–	–	–	–	–	–
Stuart Brocklehurst	–	–	5,275	0.07	5,275	0.07	–	–
Alan Pepper	–	–	–	–	–	–		–
Murray Steele	–	–	–	–	–	–	5,275	0.05
Christopher Powles	–	–	–	–	–	–	5,275	0.05
Martijn Kleibergen	–	–	–	–	–	–	–	–

3.3 Details of the Directors' appointments are as follows

Director	Date of appointment	Date of appointment letter*	Annual remuneration (£)**	Year to 31 January 2012 remuneration (£)***
Tony Morgan	17 July 2006	15 October 2010	21,000	21,000
Matt Cooper	17 July 2006	15 October 2010	16,000	16,000
Rob Johnson	1 June 2010	15 October 2010	16,000	16,000

* The Directors have been appointed pursuant to appointment letters which require either party to give three months' notice before termination of the appointment (respectively).

** No arrangements have been entered into by the Company, entitling the Directors to compensation for loss of office nor have any amounts been set aside to provide pension, retirement or similar benefits.

*** Exclusive of applicable employers National Insurance Contributions.

Assuming the merger is effected, the Proposed Directors will be appointed pursuant to appointment letters on identical terms as that set out above. Murray Steele, who is proposed to be appointed as Chairman of the Company, will receive £21,000 per annum and Christopher Powles will receive £16,000 per annum. Tony Morgan, the current Chairman of the Company, will see his annual remuneration reduced to £16,000 per annum.

• 3.4 Save for in respect of Matt Cooper, who is the chairman and a shareholder of Octopus and is also a director and shareholder of other VCTs managed by Octopus (including Apollo 1 and Apollo 2), there are no potential conflicts of interests between the duties of any Director and their private interests and/or duties.
• 3.5 Other than disclosed in this paragraph 3, no Director is or has been interested in any transaction which is or was unusual in its nature or conditions or significant to the business of the Company and which was effected by the Company in the years ended 31 January 2010, 2011, 2012 and or in the current financial year or which was effected in an earlier financial year and remains in any respect outstanding or unperformed.

4. Substantial Shareholders

As at 16 August 2012 (this being the latest practicable date prior to publication of this document), the Company is not aware of any person who has, or immediately following the issue of the New Shares pursuant to the Schemes and the Enhanced Buyback Facility, directly or indirectly will have, an interest in the Company's capital or voting rights which is notifiable under UK law (under which, pursuant to CA 2006 and the Listing Rules and the Disclosure & Transparency Rules of the FSA, a holding of 3% or more must be notified to the Company).

5. Material Contracts

• 5.1 Save as disclosed in this paragraph 5.1, the Company has not entered, other than in the ordinary course of business, into any contract which is or may be material to the Company within the two years immediately preceding the publication of this document or into any contract containing provisions under which the Company has any obligation or entitlement which is material to the Company as at the date of this document:
• 5.1.1 An investment management agreement dated 27 July 2006 between the Company (1) and Octopus (2) pursuant to which Octopus provides discretionary investment management and administration services to the Company.

The appointment of Octopus is terminable by either party on not less than 12 months' notice in writing and may also be terminated in circumstances of material breach by either of these parties.

Octopus receives an annual management fee of an amount equal to 2% of the net assets of the Company, calculated at annual intervals as at 31 January and payable quarterly in advance, together with any applicable VAT thereon, in respect of investment management services.

Octopus also receives an annual administration and accounting fee of an amount equal to 0.3% of the net assets of the Company, calculated at annual intervals as at 31 January and payable quarterly in advance (plus applicable VAT) and an annual company secretarial fee of £5,000 (plus VAT) payable annually or quarterly.

No performance related incentive fee is payable in the first five accounting periods. Octopus is then entitled to an annual performance related incentive fee of an amount equal to 20% (in respect of each share in issue) of the amount by which the Total Return per Share (this being NAV and dividends paid or declared) increases from the Total Return per Share as at the start of the sixth accounting period (or, if greater, 100p) in excess of the HSBC bank rate. The amount of the fee is calculated as at the date the annual accounts for the relevant period are published and in respect of shares in issue as at that date. The amount is then adjusted to deduct performance related incentive fees paid or payable in respect of previous accounting periods.

These management and administration fees shall not change in respect of the Enlarged Company and shall automatically cover the enlarged assets following the merger. The performance incentive fee arrangements will, subject to approval by Shareholders of Resolution 12 to be proposed at the General Meeting, be replaced with the revised arrangements detailed at paragraph 5.2.7 below.

The normal annual expenses of the Company under the agreement are capped each year at an amount equal to 3.3% of the Company's net assets, as agreed between the Company and Octopus from time to time. Any excess over this amount will be borne by Octopus. Normal annual expenses means the annual expenses of the Company incurred in its ordinary course of business and includes the annual investment management, administration, and secretarial fees, directors' remuneration, normal fees payable to the Company's registrars, stockbroker, auditors, solicitors and VCT status advisers and irrecoverable VAT thereon. It does not include any exceptional items and annual trail commission.

The agreement includes indemnities given by the Company to Octopus which are usual for this type of agreement.

• 5.2 The following contracts will be entered into, subject, inter alia, to the approval by Shareholders of applicable Resolutions at the General Meeting and, other than in respect of the contract referred to at paragraph 5.2.7 below, the relevant Scheme becoming effective:
• 5.2.1 A transfer agreement between the Company and Apollo 1 (acting through the Liquidators) pursuant to which all of the assets and liabilities of Apollo 1 will be transferred to the Company (subject only to the consent required to transfer such assets and liabilities) in consideration for New Shares in accordance with Part IV of this document. The Liquidators will further agree under this agreement that all sale proceeds and/or dividends received in respect of the underlying assets and/ or other rights of Apollo 1 will be transferred on receipt to the Company as part of the Apollo 1 Scheme. This agreement will be entered into as part of the Apollo 1 Scheme.
• 5.2.2 A transfer agreement between the Company and Apollo 2 (acting through the Liquidators) pursuant to which all of the assets and liabilities of Apollo 2 will be transferred to the Company (subject only to the consent required to transfer such assets and liabilities) in consideration for New Shares in accordance with Part V of this document. The Liquidators will further agree under this agreement that all sale proceeds and/or dividends received in respect of the underlying assets and/or other rights of Apollo 2 will be transferred on receipt to the Company as part of the Apollo 2 Scheme. This agreement will be entered into as part of the Apollo 2 Scheme.
• 5.2.3 A transfer agreement between the Company and Apollo 4 (acting through the Liquidators) pursuant to which all of the assets and liabilities of Apollo 4 will be transferred to the Company (subject only to the consent required to transfer such assets and liabilities) in consideration for New Shares in accordance with Part VI of this document. The Liquidators will further agree under this agreement that all sale proceeds and/or dividends received in respect of the underlying assets and/or other rights of Apollo 4 will be transferred on receipt to the Company as part of the Apollo 4 Scheme. This agreement will be entered into as part of the Apollo 4 Scheme.

• 5.2.4 An indemnity from the Company to the Liquidators pursuant to which the Company will indemnify the Liquidators for expenses and costs incurred by them in connection with the Apollo 1 Scheme. A liquidation fee has been agreed (including an amount representing contingency) and taken into account in the merger calculations. This agreement will be entered into as part of the Apollo 1 Scheme.

• 5.2.5 An indemnity from the Company to the Liquidators pursuant to which the Company will indemnify the Liquidators for expenses and costs incurred by them in connection with the Apollo 2 Scheme. A liquidation fee has been agreed (including an amount representing contingency) and taken into account in the merger calculations. This agreement will be entered into as part of the Apollo 2 Scheme.

• 5.2.6 An indemnity from the Company to the Liquidators pursuant to which the Company will indemnify the Liquidators for expenses and costs incurred by them in connection with the Apollo 4 Scheme. A liquidation fee has been agreed (including an amount representing contingency) and taken into account in the merger calculations. This agreement will be entered into as part of the Apollo 4 Scheme.
• 5.2.7 A deed of variation between the Company (1) and Octopus (2) to the investment management agreement referred to at paragraph 5.1.1 pursuant to which the existing performance related incentive fee arrangement with Octopus will be replaced with a revised arrangement, Under the new arrangement, Octopus will be entitled to an annual performance related incentive fee in each accounting period commencing on or after 1 February 2012, subject to the Total Return being 100p at the end of the relevant period. The amount of the fee will be equal to 20% of the amount by which the Total Return as at the end of the relevant period exceeds the Overall Hurdle Return (and payable in respect of each share in issue at the end of the relevant period).For these purposes, Total Return means NAV per Share plus dividends paid per Share since launch and the Overall Hurdle Return means the greater of the:
• . Base Rate Hurdle Return which means the Total Return as 31 January 2012 increased by the cumulative annual weighted average of the Bank of England base rate (measured daily) to the end of the relevant period; and
• . High Watermark Hurdle Return which means the highest level of Total Return as at the end of the accounting period commencing on 1 February 2012 or any subsequent accounting period.

The performance related incentive fee will be calculated and payable annually.

6. Octopus

• 6.1 Octopus is one of the UK's leading fund management companies with more than £2.7 billion under management (as at 31 May 2012). Octopus has more than 200 staff, including over 50 investment professionals, and has twice been voted as one of the 'Top 100 Small and Medium-Sized Companies to Work For' in the Sunday Times.
• 6.2 Octopus (telephone number 0800 316 2298) was incorporated and registered in England and Wales as a private limited company on 8 March 2000 under number 03942880. Octopus' registered office and principal place of business is at 20 Old Bailey, London EC4M 7AN. Octopus is authorised and regulated by the Financial Services Authority to advise on investments, arrange deals in investments and to make arrangements with a view to transactions in investments. The principle legislation under which Octopus operates is CA 2006 (and regulations made thereunder).

7. General

• 7.1 The Company was incorporated and registered in England and Wales under CA 1985 as a public company with limited liability on 7 June 2006, with registered number 05840377 and the name Octopus Protected VCT plc. The Company changed its name to Octopus Apollo VCT 3 plc on 12 August 2010. The principal legislation under which the Company operates is CA 2006 (and regulations made thereunder). The legal and commercial name of the Company is Octopus Apollo VCT 3 plc. The Company is domiciled in England.
• 7.2 Statutory accounts of the Company for the years ended 31 January 2010 and 2011 and 2012 in respect of which the Company's auditors, Grant Thornton UK LLP, have made unqualified reports under Section 495 CA 2006, have been delivered to the Registrar of Companies and such reports did not contain any statements under Section 495 to Section 497A CA 2006 (as applicable).
• 7.3 The Company has no employees or subsidiaries.

• 7.4 There has been no significant change in the financial or trading position of the Company since 31 January 2012, the date to which the Annual Report was made up to, to the date of this document.

• 7.5 Save for the fees paid to the Directors as detailed in paragraph 3.3 above, the fees paid under the arrangements set out at paragraph 5.1.1 above to Octopus there were no related party transactions or fees paid by the Company during the years ended 31 January 2010 and 2011 and 2012 or to the date of this document in the current financial year.

• 7.6 Matrix Corporate Capital LLP has given and not withdrawn it written consent to the issue of this document and the inclusion of its name and the references to it in the form and context in which they appear.

8. Documents Available for Inspection

Copies of the following documents will be available for inspection during normal business hours on any day (Saturdays, Sundays and public holidays excepted) from the date of this document until the Effective Date at the offices of SGH Martineau LLP at One America Square, Crosswall, London EC3N 2SG and also at the registered office of the Company:

• 8.1 the memorandum and articles of association of the Company;
• 8.2 the annual reports of the Company for the financial years ended 31 January 2010, 2011 and 2012;
• 8.3 the annual reports of Apollo 1 for the financial years ended 31 January 2010, 2011 and 2012;
• 8.4 the annual reports of Apollo 2 for the financial years ended 31 January 2010, 2011 and 2012;
• 8.5 the annual reports of Apollo 4 for the financial years ended 31 January 2010, 2011 and 2012;
• 8.6 the material contracts referred to in paragraph 5 above (the contracts referred to at paragraph 5.2 being subject to non-material amendment);
• 8.7 the Matrix Corporate Capital LLP consent referred to in paragraph 7.6 above;
• 8.8 the Target VCTs' Circular;
• 8.9 the Prospectus; and
• 8.10 this document.

17 August 2012

OCTOPUS APOLLO VCT 3 PLC

(Registered in England and Wales with registered number 05840377)

NOTICE OF GENERAL MEETING

Notice is hereby given that a general meeting of Octopus Apollo VCT 3 plc (''the Company'') will be held at 10.00 a.m. on 19 September 2012 at the offices of Octopus Investments Limited, 20 Old Bailey, London EC4M 7AN, for the purposes of considering and, if thought fit, passing the following resolutions, of which resolutions 1 to 4 and 10 to 12 will be proposed as ordinary resolutions and resolutions 5 to 9 will be proposed as special resolutions:

Ordinary Resolutions

• 1. That, the existing articles of association of the Company be amended by revoking all of the provisions which, by virtue of paragraph 42 of Schedule 2 of The Companies Act 2006 (Commencement No 8 Transitional Provisions and Savings) Order 2008, are treated as provisions of its articles of association.
• 1. That, subject to the Apollo 1 Scheme (as defined in and provided for in the circular to shareholders dated 17 August 2012 (''Circular'')) becoming unconditional:
• (i) the acquisition of the assets and liabilities of Octopus Apollo VCT 1 plc on the terms set out in the Circular be and hereby is approved; and
• (ii) the directors of the Company be and hereby are generally and unconditionally authorised in accordance with Section 551 of the Companies Act 2006 (''the Act'') to exercise all the powers of the Company to allot shares in the capital of the Company up to an aggregate nominal amount of £1,150,000 in connection with the Apollo 1 Scheme, provided that the authority conferred by this paragraph (ii) shall expire on the date falling 18 months from the date of the passing of this resolution (unless renewed, varied or revoked by the Company in a general meeting).
• 1. That, subject to the Apollo 2 Scheme (as defined in and provided for in the Circular) becoming unconditional:
• (i) the acquisition of the assets and liabilities of Octopus Apollo VCT 2 plc on the terms set out in the Circular be and hereby is approved; and
• (ii) in addition to the authorities conferred by resolution 2 set out in this notice, the directors of the Company be and hereby are generally and unconditionally authorised in accordance with Section 551 of the Act to exercise all the powers of the Company to allot shares in the capital of the Company up to an aggregate nominal amount of £1,150,000 in connection with the Apollo 2 Scheme, provided that the authority conferred by this paragraph (ii) shall expire on the date falling 18 months from the date of the passing of this resolution (unless renewed, varied or revoked by the Company in a general meeting).
• 1. That, subject to the Apollo 4 Scheme (as defined in and provided for in the Circular) becoming unconditional:
• (i) the acquisition of the assets and liabilities of Octopus Apollo VCT 4 plc on the terms set out in the Circular be and hereby is approved; and
• (ii) in addition to the authorities conferred by resolutions 2 and 3 set out in this notice, the directors of the Company be and hereby are generally and unconditionally authorised in accordance with Section 551 of the Act to exercise all the powers of the Company to allot shares in the capital of the Company up to an aggregate nominal amount of £1,700,000 in connection with the Apollo 4 Scheme, provided that the authority conferred by this paragraph (ii) shall expire on the date falling 18 months from the date of the passing of this resolution (unless renewed, varied or revoked by the Company in a general meeting).

Special Resolutions

• 1. That, in addition to the authorities conferred by resolutions 2 to 4 set out in this notice:
• (i) the Company be generally and unconditionally authorised pursuant to Section 701 of the Act to make market purchases (within the meaning of Section 693(4) of the Act) of its shares of up to such number of shares as represents 50% of the issued share capital of the Company at 5.00 p.m. on 1 October 2012 (or such later date as the directors may determine) at a fixed price equal to the latest published net asset value per share prior to the date of purchase (rounded down to the nearest 0.1p), which fixed price shall, for the purposes of Section 701 (3)(b) of the Act, constitute both the maximum and minimum price that may be paid for the shares purchased, pursuant to, or in contemplation of, an enhanced buyback facility;
• (ii) the directors be and hereby are generally and unconditionally authorised in accordance with Section 551 of the Act to exercise all powers of the Company to allot and issue shares in the capital of the Company up to such number of shares as represents 50% of the issued share capital of the Company at 5.00 p.m. on 1 October 2012 (or such later date as the directors may determine), provided that this power shall be limited to the allotment of shares at a price per share equal to the latest published net asset value of an existing share prior to the date of allotment and divided by 0.95 (rounded up to the nearest 0.1p) pursuant to, or in contemplation of, an enhanced buyback facility; and
• (iii) the directors be and hereby are empowered pursuant to Sections 570 and 573 of the Act to allot equity securities (within the meaning of Section 560 of the Act) for cash pursuant to the authority conferred by paragraph (ii) of this resolution as if Section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited to the allotment of shares at a price per share equal to the latest published net asset value of an existing share prior to the date of allotment and divided by 0.95 (rounded up to the nearest 0.1p) pursuant to, or in contemplation of, an enhanced buyback facility

and the authority and powers conferred by this resolution shall expire on the conclusion of the annual general meeting of the Company to be held in 2013, save that the Company may, before such expiry, make offers or agreements which would or might require shares to be allotted and purchased and the directors may allot and purchase shares in pursuance of such offer or agreement notwithstanding that the authority conferred by this resolution has expired.

• 1. That in addition to the authorities conferred by resolutions 2 to 5 set out in this notice:
• (i) the directors of the Company be and hereby are generally and unconditionally authorised in accordance with Section 551 of the Act to exercise all the powers of the Company to allot shares in the capital of the Company and to grant rights to subscribe for or to convert any security into shares in the capital of the Company up to an aggregate nominal amount of £4,600,000, provided that, the authority conferred by this paragraph (i) shall expire on the conclusion of the annual general meeting of the Company to be held in 2013 (unless renewed, varied or revoked by the Company in a general meeting) but so that this authority shall allow the Company to make before the expiry of this authority offers or agreements which would or might require shares to be allotted or rights to be granted after such expiry;
• (ii) the directors of the Company be and hereby are empowered pursuant to Sections 570 and 573 of the Act to allot or make offers or agreements to allot equity securities (which expression shall have the meaning ascribed to it in Section 560(1) of the Act) for cash pursuant to the authority given pursuant to paragraph (i) of this resolution or by way of a sale of treasury shares, as if Section 561(1) of the Act did not apply to such allotment, provided that the power provided by this paragraph (ii) shall expire on the conclusion of the annual general meeting of the Company to be held in 2013 (unless renewed, varied or revoked by the Company in a general meeting) and provided further that this power shall be limited to
  • (a) the allotment and issue of shares up to an aggregate nominal value of £3,500,000 pursuant to offer(s) for subscription; and
  • (b) the allotment and issue of shares up to an aggregate nominal value of 10% of the issued share capital of the Company from time to time

in each case where the proceeds may in whole or part be used to purchase shares; and

• (iii) the Company be and hereby is empowered to make one or more market purchases within the meaning of Section 693(4) of the Act of its own shares (either for cancellation or for the retention as treasury shares for future re-issue or transfer) provided that:
• (a) the aggregate number of shares which may be purchased shall not exceed 16,489,000 shares;
• (b) the minimum price which may be paid per share is the nominal value thereof;
• (c) the maximum price which may be paid per share is an amount equal to the higher of (i) 105% of the average of the middle market quotation per share (of the relevant class) taken from the London Stock Exchange daily official list for the five business days immediately preceding the day on which such share is to be purchased; and (ii) the amount stipulated by Article 5(1) of the Buy Back and Stabilisation Regulation 2003;
• (d) the authority conferred by this paragraph (iii) shall expire on the conclusion of the annual general meeting of the Company to be held in 2013 (unless renewed, varied or revoked by the Company in general meeting); and
• (e) the Company may make a contract to purchase shares under the authority conferred by this paragraph (iii) prior to the expiry of such authority which will or may be executed wholly or partly after the expiration of such authority and may make a purchase of such shares.
• 1. That, the amount standing to the credit of the share premium account of the Company as at 17 August 2012 and the amounts credited to the share premium account of the Company pursuant to the issue of shares, or otherwise, in connection with the Schemes be and hereby are cancelled.
• 1. That the share premium account of the Company and the capital redemption reserve of the Company be and hereby are cancelled.
• 1. That, the articles of association of the Company be amended by:
• (i) the deletion of article 5.1; and
• (ii) the insertion of a new article 107.3 in the following form: ''the Company may change its name by resolution of the Board''.

Ordinary Resolutions

• 1. That the Enhanced Buyback Facility Related Party Transaction (as defined, and details of which are set out, in the Circular) between the Company and Octopus Investments Limited be and hereby is approved.
• 1. That the Offer Related Party Transaction (as defined, and details of which are set out, in the Circular) between the Company and Octopus Investments Limited be and hereby is approved.
• 1. That the Performance Fee Related Party Transaction (as defined, and details of which are set out, in the Circular) between the Company and Octopus Investments Limited be and hereby is approved.

Dated 17 August 2012

By order of the Board Registered Office: Company Secretary 20 Old Bailey Tracey Spevack London

EC4M 7AN

Notes:

• 1. None of the directors has a service contract. Each director has an appointment letter with the Company, a copy of which will be available for inspection at the meeting.
• 1. To be entitled to attend and vote at the meeting (and for the purposes of the determination by the Company of the votes they may cast in accordance with Regulation 41 of the Uncertified Securities Regulations 2001), members must be registered in the register of members of the Company at 5.00 p.m. on 17 September 2012 (or, in the event of any adjournment, 5.00 p.m. on the date which is two days before the date of the adjourned meeting). Changes to the register of members of the Company after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the meeting.
• 1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend, speak and vote on his or her behalf. A proxy need not also be a member but must attend the meeting to represent the member. Details of how to appoint the chairman of the meeting or another person as a proxy using the form of proxy are set out in the notes on the form of proxy. If a member wishes a proxy to speak on the member's behalf at the meeting the member will need to appoint their own choice of proxy (not the chairman) and give their instructions directly to them.
• 1. A member may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. A member may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy, (you may photocopy the form. For further information please contact the Company's registrar, Capita Registrars Limited, between 9.00 a.m. and 5.30 p.m. (GMT) Monday to Friday (except UK public holidays) on telephone number 0871 664 0324 or, if telephoning from outside the UK, on +44 20 8639 3399. Calls to Capita Registrars' helpline (0871 664 0324) are charged at 10p per minute (including VAT) plus your service provider's network extras. Calls to the helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. For legal reasons, Capita Registrars will be unable to give advice on the merits of the proposals or provide financial, legal, tax or investment advice. A member should indicate in the box next to the proxy holder's name the number of shares in relation to which the proxy is authorised to act as the member's proxy. A member should also indicate by ticking the box provided if the proxy instruction is one of multiple instructions being given.
• 1. A form of proxy is attached to this document and a reply paid envelope is enclosed. To be valid, it should be lodged with the Company's registrar, Capita Registrars, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU so as to be received not later than 10.00 a.m. on 17 September 2012 or 48 hours before the time appointed for any adjourned meeting or, in the case of a poll taken subsequent to the date of the meeting or adjourned meeting, so as to be received no later than 24 hours before the time appointed for taking the poll. A member may return a proxy form in their own envelope using the address FREEPOST RSBH-UXKS-LRBC, PXS, 34 Beckenham Road, Beckenham BR3 4TU.
• 1. As at 17 August 2012 (being the last business day prior to the publication of this notice), the Company's issued voting share capital was 25,056,684 shares, each carrying one vote each. Therefore, the total voting rights in the Company as at 17 August 2012 was 25,056,684.
• 1. In accordance with Section 325 of the Companies Act 2006, the right to appoint proxies does not apply to persons nominated to receive information rights under Section 146 of the Companies Act 2006.
• 1. Any person to whom this notice is sent who is a person nominated under Section 146 of the Companies Act 2006 to enjoy information rights (a ''Nominated Person'') may, in accordance with Section 149(2) of the Companies Act 2006 and under an agreement between him/her and the member by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
• 1. You may submit your proxy electronically using the Shareportal Service at www.capitashareportal.com If not already registered for the share portal, you will need your investor code which can be found on your share certificate. If you cannot locate your investor code, please contact Capita Registrars Limited, between 9.00 a.m. and 5.30 p.m. (GMT) Monday to Friday (except UK public holidays) on telephone number 0871 664 0324 or, if telephoning from outside the UK, on +44 20 8639 3399. Calls to Capita Registrars' helpline (0871 664 0324) are charged at 10p per minute (including VAT) plus your service provider's network extras. Calls to the helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes.
• 1. The statement of the rights of members in relation to the appointment of proxies in paragraphs 3 to 5 above does not apply to Nominated Persons. The rights described in these paragraphs can only be exercised by members of the Company.
• 1. If a corporate shareholder has appointed a corporate representative, the corporate representative will have the same powers as the corporation could exercise if it were an individual member of the Company. If more than one corporate representative has been appointed, on a vote on a show of hands on a resolution, each representative will have the same voting rights as the corporation would be entitled to. If more than one authorised person seeks to exercise a power in respect of the same shares, if they purport to exercise the power in the same way, the power is treated as exercised; if they do not purport to exercise the power in the same way, the power is treated as not exercised.
• 1. Appointment of a proxy will not preclude a member from subsequently attending and voting at the meeting should the member subsequently decide to do so. A member can only appoint a proxy using the procedures set out in these notes and the notes to the form of proxy.
• 1. Information regarding the meeting is also available at the following website: www.octopusinvestments.com

FORM OF PROXY FOR THE GENERAL MEETING

OCTOPUS APOLLO VCT 3 PLC

I/We .........................................................................................................................................................

(Block Capitals Please)

of ............................................................................................................................................................

being a shareholder(s) of the above-named Company, appoint the Chairman of the General Meeting or

.................................................................................................................................................................

for the following number of shares (insert number or all)

to act as my/our proxy to vote for me/us and on my/our behalf at the General Meeting of the Company to be held at 20 Old Bailey, London EC4M 7AN at 10.00 a.m. on 19 September 2012 (see note 1 below) and at every adjournment thereof and to vote for me/us on my/our behalf as directed below.

Please indicate with an 'X' if this is one of multiple proxy instructions being given

The proxy is directed to vote as follows:

			For	Against	Discretion	Vote Withheld
Resolution 1	Ordinary	Approve the amendment of the articles of association to revoke the share capital limit.
Resolution 2	Ordinary	Composite resolution to approve the acquisition of the assets and liabilities of Octopus Apollo VCT 1 plc pursuant to a scheme of reconstruction and authority to issue shares in connection with the Apollo 1 scheme.
Resolution 3	Ordinary	Composite resolution to approve the acquisition of the assets and liabilities Octopus Apollo VCT 2 plc pursuant to a scheme of reconstruction and authority to issue shares in connection with the Apollo 2 scheme.
Resolution 4	Ordinary	Composite resolution to approve the acquisition of the assets and liabilities of Octopus Apollo VCT 4 plc pursuant to a scheme of reconstruction and authority to issue shares in connection with the Apollo 4 scheme.
Resolution 5	Special	Composite resolution to approve the issue and repurchase of shares in connection with an enhanced buyback facility.
Resolution 6	Special	Composite resolution to renew and increase share allotment and buyback authorities
Resolution 7	Special	Approve the cancellation of share premium as at 17 August 2012 and share premium created in connection with the Schemes.
Resolution 8	Special	Approve the cancellation of share premium and capital redemption reserves.
Resolution 9	Special	Approve amendments to the articles of association of the Company.
Resolution 10	Ordinary	Approve the enhanced buyback facility related party transaction with Octopus.
Resolution 11	Ordinary	Approve the offer related party transaction with Octopus.
Resolution 12	Ordinary	Approve the performance fee related party transaction with Octopus.

• • • • • • • • • • • • • %- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Signature.................................................................................. Dated.................................... 2012 Please read the notes overleaf before signing.

Notes:

• 1. The notice of the General Meeting is set out in the circular to shareholders of the Company dated 17 August 2012.
• 1. If any other proxy is preferred, strike out the words ''Chairman of the General Meeting'' and add the name and address of the proxy you wish to appoint. The proxy need not be a member.
• 1. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. A member may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy this form. For further information please contact the Company's registrar, Capita Registrars Limited, between 9.00 a.m. and 5.30 p.m. (GMT) Monday to Friday on telephone number 0871 664 0324 or, if telephoning from outside the UK, on +44 20 8639 3399. Calls to Capita Registrars' helpline (0871 664 0324) are charged at national rates. Further details will be available from your service provider. Calls to the helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. For legal reasons, Capita Registrars will be unable to give advice on the merits of the proposals or provide financial, legal, tax or investment advice.

Please also indicate by ticking the box provided if the proxy instruction is one of multiple instructions being given.

• 1. Any alterations to the form should be initialled.
• 1. If the appointer is a corporation, this form must be completed under its common seal or under the hand of an officer or attorney duly authorised in writing.
• 1. The signature of any one of joint holders will be sufficient, but the names of all the joint holders should be stated.
• 1. To be valid, this form and the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power must reach the registrars of the Company at Capita Registrars, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU not less than forty-eight hours before the time appointed for holding the General Meeting or adjournment as the case may be. A reply paid envelope is enclosed for use. A member may also return a proxy form in their own envelope using the address: FREEPOST RSBH-UXKS-LRBC, PXS, 34 Beckenham Road, Beckenham BR3 4TU.
• 1. You may submit your proxy electronically using the Shareportal Service at www.capitashareportal.com If not already registered for the share portal, you will need your investor code which can be found on your share certificate. If you cannot locate your investor code, please contact Capita Registrars Limited, between 9.00 a.m. and 5.30 p.m. (GMT) Monday to Friday (except UK public holidays) on telephone number 0871 664 0324 or, if telephoning from outside the UK, on +44 20 8639 3399. Calls to Capita Registrars' helpline (0871 664 0324) are charged at 10p per minute (including VAT) plus your service provider's network extras. Calls to the helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes.
• 1. The completion of this form will not preclude a member from attending the General Meeting and voting in person.

CORPORATE INFORMATION

Directors

Tony Morgan (Chairman) Rob Johnson Matt Cooper

Registered Office

20 Old Bailey London EC4M 7AN

Telephone: 0800 316 2295 Website: www.octopusinvestments.com Company Number: 05840377

Investment Manager and Administrator Company Secretary

Octopus Investments Limited Tracey Spevack 20 Old Bailey 20 Old Bailey London London EC4M 7AN EC4M 7AN

Solicitors Sponsor

No. 1 Colmore Square One Vine Street Birmingham London B4 6AA W1J 0AH

Capita Registrars Limited Scott-Moncrieff The Registry Exchange Place 3 34 Beckenham Road Semple Street Beckenham Edinburgh Kent EH3 8BL BR3 4TU

Auditors and Tax Advisers Broker

3140 Rowan Place One Vine Street John Smith Drive London Oxford Business Park South W1J 0AH Oxford OX4 2WB

SGH Martineau LLP Matrix Corporate Capital LLP

Registrars Reporting Accountant

Grant Thornton UK LLP Matrix Corporate Capital LLP