TIDMAQT2 TIDMAQ2C
RNS Number : 4177A
Acuity Growth VCT PLC
31 January 2011
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Overview
During the year ended 30 September 2010, the Net Asset Value
(NAV) of the ordinary shares decreased by 33% and the C shares
decreased by 2%. In the same period the FTSE All Share Index
increased by 9%.
Change of Investment Manager
On 13 December 2010, the Board announced that it was
interviewing other Investment Managers with a view to appointing a
new Investment Manager for the fund. An agreement has been reached
in principle on a new Investment Manager, and the Board are taking
independent legal advice on terms for the outgoing Investment
Manager.
Ordinary Shares
On 30 September 2010 the NAV per Ordinary share was 59.1p. When
cumulative dividends are included (4.5p paid since the Company's
inception), the total was 63.6p per ordinary share, a decrease of
32% over the period.
The performance of the portfolio in the second half of the year
has been to say the least, very disappointing. The Company's
largest holding, the Fin Machine Company, experienced significant
shortages of working capital in the second part of the year. A new
Chairman has been appointed and corrective steps are being taken,
which in due course, might lead to a recovery in the Investment.
However, in line with the Company's investment methodology, Fin
Machine's valuation declined by 52% on last year and accounted for
the majority of the overall decline in the NAV of the fund. Further
details of the movement in the investment portfolio are contained
within the Investment Manager's report.
The investment portfolio is heavily weighted towards unquoted
investments, which now represent over 90% of the portfolio by
value. The portfolio comprises investments in 20 companies but has
become increasingly concentrated, with the top five investments now
representing over 58% of the total.
C shares
As at 30 September 2010 the NAV per C shares was 85.2p a
decrease of 2% over the period.
Co-investment
The company in most cases co-invested alongside Acuity VCT 3 plc
managed by Acuity Capital. This arrangement has enabled the fund to
participate in larger unquoted investments than would otherwise
have been possible
Portfolio Activity
Soon after the year ended, the Company realised its holding in
Amber Taverns and received GBP3.9 million, an uplift of 2.9x of the
original cost of the investment. Amber Taverns owned a number of
freehold pubs aimed at the lower end of the marketplace. The
original investment was made in 2006.
A further GBP1.8m was invested in the year to support existing
portfolio companies, the largest of these being the Fin Machine
Company and Loseley Dairy Ice Cream.
Merger with Acuity VCT Plc
In January 2010 shareholders approved the merger of the Company
with Acuity VCT Plc, and the Company was renamed Acuity Growth VCT
Plc. Shareholders in Acuity VCT Ordinary and C shares received new
Ordinary shares in Acuity Growth VCT. Any queries about new share
certificates should be addressed to Capita Registrars, whose
contact details are set out in the Company Information section.
Dividends and Share Buy Backs
In light of the economic conditions over the past two years and
the shortage of cash in the portfolio, difficult decisions have had
to be made by the Board about dividends and share buy backs. The
main priority has been to ensure that funds were available to
support investee companies hit by the recession. Although the worst
effects of the recession may now be behind us, the Board continues
to review the liquidity position of the portfolio closely.
Top Up Offer
A top up offer was made to existing shareholders in the year. In
total GBP0.3m was raised under the offer, which closed on 30
September 2010.
Self Invested Pension Plan (SIPP) service
Working with Cavendish Ware (www.cavendishware.co.uk) the
Investment Manager has arranged, if desired, that shareholders will
be able to place their shares in the Company in a SIPP, thereby
becoming eligible for additional tax incentives. However, moving
VCT shares into a SIPP is treated as a disposal for tax purposes,
which has implications for investors sheltering CGT gains or whose
VCTs have not yet reached the end of the minimum holding period for
income tax relief.
Risks
Risks associated with the Company are set out in detail in the
Report of the Directors' and in note 20 of the Notes to the
Accounts. The Board recognises that opportunities for selling both
quoted and unquoted investments have been reduced by the financial
crisis of 2007-09, and the fair market value of its unquoted
holdings may also have been affected. However, the Company believes
that it has insignificant exchange risk, and only minor credit or
interest rate risk.
Outlook
Although the main impact of the recession seems to have passed,
smaller companies are still struggling to manage liquidity as
market conditions remain tight. In addition, the full impact of the
Government's budgetary measures may well have a material impact on
many companies this year. In changing the Investment Manager, the
board recognises that shareholders will be hoping for a significant
improvement in the fortunes of their company, but realistically
this may take time to come through.
Rupert Pennant-Rea
Chairman
31 January 2011
As set out in the investment strategy on page 2 of the Report,
our objective is to invest in small unquoted companies with
significant existing revenues and profits and to seek to add value
through organic growth and buy and build strategies. Access to
these types of investment is enhanced through co-investing with
Acuity VCT 3 Plc.
Performance Review
Although the first half results indicated that the portfolio had
weathered the worst of the economic recession, four portfolio
companies have since reported difficulties in the summer which have
had a significant negative impact on the year end Net Asset Value.
As at 30 September 2010, the Net asset Value per share had fallen
to 59.1p a reduction of 33% over the year. The main declines in the
year were The Fin Machine Company, Loseley Dairy Ice Cream, Munro
Global and Target Entertainment. Collectively they accounted for
the majority of the overall decrease in the net asset value.
Fin Machine Company encountered a working capital stretch as a
result of its expansion into China. This had a knock on impact on
trading which has resulted in a disappointing year for the company.
The fund invested a further GBP360,000 to bridge the working
capital shortfall. We have instigated the appointment of a new
Chairman. The company also replaced its Financial Director and put
in place tighter internal controls. The company has started its new
financial year with an improved order book, and under the new
management team the long term growth prospects for the company are
promising. The key driver of future growth will be the continued
growth of the automotive sector in China and India and the adoption
of its cooling technology by air conditioning manufacturers. To
take advantage of these opportunities, the company may need further
injections of capital.
Although Loseley Dairy Ice Cream attracted other investors in
the year, the delay in receiving the funding meant that the company
was unable to achieve the production efficiencies it had planned
for and as a result profitability was below forecast. Over the last
eighteen months the company has made good progress in increasing
its annualised turnover and winning new customers. In particular it
won a supply contract with a major national retailer, a significant
milestone, which could lead to a much larger orders over the next
two years. A new CEO, Neil Burchell, the former MD of Yoghurt
producer Rachel's, has been appointed. Loseley has the opportunity
to further grow its own label business and to use the benefits of
scale to market its own higher margin ice cream brands, Loseley,
Thayers and Yorkshire Dales.
Munro Global is a market research company which has demonstrated
good growth both organically and through bolt on acquisitions. One
of its trading subsidiaries which had established good long term
contracts with the public sector has recently disappointed
following the impact of the economic downturn. This has
necessitated a programme of redundancies and a material shortfall
in forecast profitability for the current year.
Despite Target Entertainment receiving an attractive offer, a
successful negotiation between the prospective buyer and all the
shareholders proved elusive. As a result, the company's bank
decided to place the company into administration. The downturn in
the media sector had put the company under significant pressure
with its drama production business, in particular, suffering from a
lack of commissions from the TV broadcasters.
On a more positive note, Amber Taverns, the pub operator, was
sold to LGV in October at an uplift of 2.9x cost. Amber Taverns was
an investment made by the fund in 2006 with a similar structure to
Nectar Taverns which had also been a very successful deal for the
fund. The key to the success of the transaction was an experienced
management team who were able to acquire underperforming pubs in
the North West of England at attractive prices and to drive through
better operating performance in each unit.
The best performer in the period was Factory Media who have
continued to show good momentum in their online website mpora.com.
Factory Media has become one of Europe's largest and most
innovative Action Sports media owners with 19 traditional print
publications and 23 new media brands reaching over 500,000 readers
and 4 million online users every month. The business currently
focuses on two market segments, Boardsports and Bike, with an
international footprint and multilingual products.
The results for the last six months have been disappointing
largely due to trading difficulties at four portfolio companies.
The investment manager has been working closely with the investee
company management teams to ensure that they have reacted quickly
to cut costs and where appropriate added management resource to
ensure that the companies are being optimally managed. Whereas the
worst of the economic downturn may well have passed the ripple
effect feeding into the smaller companies market has continued to
cause problems for many companies.
C shares
The net asset value of the C share showed a decline of 2% in the
period.
During the year the Fund's investments were managed by Acuity
Capital. Acuity Capital was established in 1981 and is authorised
and regulated by the Financial Services Authority.
Acuity Capital has considerable expertise in quoted and unquoted
investments and has a well developed deal flow, including unquoted
company proposals that originate from its own contacts and network,
pre-float finance opportunities and broker led AIM flotations.
The Investment Manager established an Investment Committee
comprising three Acuity Capital executives and two independent
members. The independent members of the Investment Committee are
Angela Lane and Tony Everett. After 18 years working in private
equity at 3i, Angela's final role was as a partner in 3i's Growth
Capital business managing the UK Portfolio. Tony has a background
as an entrepreneur and business owner and acts as a consultant to
Fleming Family and Partners Private Equity. In addition, the
Investment Committee is chaired by Hugh Mumford, a senior executive
of Electra Partners Group. The Investment Committee meets as
required to consider and review investment proposals.
Co-investment Arrangements with other Acuity VCTs
The Investment Manager managed three VCT pools of funds, Acuity
Growth VCT Plc Ordinary Share pool, Acuity Growth VCT Plc 'C' Share
pool and Acuity VCT 3 Plc (together "the Acuity VCTs"), it could
use for co-investment. This allowed each fund to spread its
investment risk and gain access to larger investments than it could
do on its own. Where a co-investment opportunity arose between the
Company and one or more of the other funds, the Company invested in
an agreed and consistent proportion, on the same terms and in the
same securities as the funds with which it co-invested. Costs
associated with any such investment were borne by each fund
pro-rata to its investment.
In more detail, the Board adopted a set of guidelines on its
co-investment arrangements with the Acuity VCTs and the Investment
Manager as follows:-
-- Other than as set out below, investments were allocated
between the Company and the Acuity VCTs by reference to the size of
each fund and to each fund's available cash resources.
-- Where an opportunity arose for a second or subsequent round
of investment in a company in which one of the Acuity VCTs has
invested at an earlier stage, the fund holding the existing
investment had a preferential right to take up any pro-rata
entitlement it may had in the new financing round. The amount it
invested on this basis is not taken into account in determining its
co-investment share thereafter.
-- The Company made investments in which one or more of the
Acuity VCTs have existing investments only when the Board considers
that to be in the best interests of the Company.
-- Any potential conflict of interest in a proposed investment
by one or more of the Acuity VCTs was referred by the Investment
Manager to the Board of the Company and the other relevant
Boards.
-- In the event of a possible conflict of interest between the
Investment Manager and the Company, the matter will be decided by
those Directors who are independent of the Investment Manager.
The Board of the Company acknowledges that the Investment
Manager may occasionally recommend an allocation of investments on
a different basis from the one described above. For example, an
exception may be made to ensure that one or more of the Company or
Acuity VCT 3 Plc maintain their status as a HMRC approved VCT, or
in the interests of balancing their portfolios. A different basis
may also be necessary to meet the requirements of potential
investee companies. In these cases the Directors may use their
judgement.
Acuity Growth VCT Plc
Board of Directors
Rupert Pennant-Rea (Chairman)
David Donnelly
Catrina Holme
Nicholas Ross
David Sebire
Investment Manager and Administrator
Acuity Capital Management Limited
Paternoster House
65 St Paul's Churchyard
London EC4M 8AB
Telephone: +44 (0)207 306 3901
Web: www.acuitycapital.co.uk
Enquiries: info@acuitycapital.co.uk
Secretary and Registered Office
Acuity Capital Management Limited
Paternoster House
65 St Paul's Churchyard
London EC4M 8AB
Telephone: +44 (0)20 7306 3901
Company Number
5210737
Broker
Matrix Corporate Capital LLP
One Vine Street
London W1J 0AH
Registered Independent Auditors
KPMG Audit Plc
Saltire Court
20 Castle Terrace
Edinburgh EH1 2EG
Telephone: +44 (0)131 222 2000
Registrar and Transfer Office
Capita Registrars Limited
Northern House
Woodsome Park
Fenay Bridge
Huddersfield HD8 0GA
Telephone (UK): 0871 664 0300 (calls cost 10p per minute plus
network extras, lines are open 8.30am-5.30pm Monday to Friday)
Telephone (Overseas): +44 208 639 3399
Email: shareholder.services@capitaregistrars.com
Web: www.capitaregistrars.com
Any change of address of a shareholder or other relevant
amendment to shareholder details should be communicated to the
Company's Registrar, Capita Registrars.
If any shareholder is considering trading his or her shares in
the secondary market, please contact the Company's broker Matrix
Corporate Capital LLP: Chris Lloyd on 0203 206 7176
(chris.lloyd@matrixgroup.co.uk) and Paul Nolan on 0203 206 7177
(paul.nolan@matrixgroup.co.uk).
Rupert Pennant-Rea, Chairman Appointed a Director on 7 September
2004.
He is a former Deputy Governor of the
Bank of England and Editor of The Economist.
He is currently Chairman of Henderson
and a Director of Go-Ahead and a number
of other companies. He is Chairman of
the Nomination Committee.
David Donnelly* Appointed a Director on 7 September
2004.
He is Chairman of Caithness Petroleum.
Previously he was CEO of the Private
Equity business of Fleming Family &
Partners. Previous directorships included
Highland Participants (Chairman and
Chief Executive), a listed exploration
company and R&W Hawthorn Leslie & Co
(Executive Director), a publicly quoted
shipbuilding and repair company. He
was formerly a member of the London
Stock Exchange. He is Chairman of the
Remuneration Committee.
Catrina Holme* Appointed a Director on 26 February
2009.
She has had extensive experience in
the venture capital and private equity
industry. Initially a private equity
lawyer, she has held both Executive,
Non-Executive and Investment roles in
the sector. Previously a member of Cazenove
Private Equity and Partner at DFJEsprit,
she runs a consulting business, Investor
Inside, working with technology companies
to maximise their investment success.
Nicholas Ross Appointed a Director on 7 September
2004.
He is a founding member of Acuity Capital
LLP, prior to the Management buy-out
he had been at Electra Quoted Management
since 1993. Previously he had several
years in investment analysis and fund
management. He has been responsible
for the launch of the three Acuity VCT
funds. He is a Managing Partner of Acuity
Capital LLP and a Director of Acuity
Capital and all three Acuity VCT funds.
He also sits on a number of investee
company boards.
David Sebire* Appointed a Director on 7 September
2004.
He is a Chartered Accountant with extensive
industrial and corporate finance experience.
Previous chairmanships have included
Bridport, PTS and Clearspeed Technology.
He is Chairman of Securefast and PegasusBridge
Corporate Finance and a number of private
companies. He has been nominated the
Senior Independent Director under the
Combined Code on Corporate Governance
and is additionally Chairman of the
Audit Committee.
* Member of the Audit, Remuneration
and Nomination Committees
To the Members of Acuity Growth VCT Plc
The Directors present the audited Accounts of the Company for
the year ended 30 September 2010 and their Report on its
affairs.
Investment Company Status
Throughout the year under review the Company was an investment
company as defined under Section 833 of the Companies Act 2006
VCT Status
HM Revenue and Customs has granted the Company approval under
Section 274 of the Income Tax Act 2007 (ITA 2007) as a VCT, the
approval being effective from the first day on which the Company's
ordinary shares were listed on the London Stock Exchange (being 3
December 2004). The Board continues to direct the affairs of the
Company to enable it to maintain approval as a VCT.
Business Review
Objective and Investment Strategy
A review of the Company's Objective and Investment Strategy is
detailed on page 2.
Current and Future Development
A review of the main features of the year is contained in the
Chairman's Statement and the Investment Manager's Review on pages 5
and 7 respectively.
The Board regularly reviews the development and strategic
direction of the Company. The Board's main focus continues to be on
the Company's long-term investment return. Attention is paid to the
integrity and success of an investment process and on factors which
may have an impact on this approach. Due regard is given to the
marketing and promotion of the Company, including effective
communication with shareholders and other external parties.
Social, Community, Employee and Environmental Issues
In carrying out its activities and in relationships with the
community, the Company aims to conduct itself responsibly,
ethically and fairly. The Company has no employees and the Board is
comprised entirely of Non-Executive Directors. The Company has no
direct impact on the environment, however, the Company believes
that it is in the shareholders interests to consider environmental,
social and ethical factors when selecting and retaining
investments. Further details of how the Company views socially
responsible investment is set out in page 17.
Performance
A detailed review of performance during the year under review is
contained in the Investment Manager's Review on page 7.
A number of performance measures are considered by the Board and
Investment Manager in assessing the Company's success in achieving
its objectives.
The key performance indicators ('KPIs') used to measure the
progress and performance of the Company are established industry
measures and are as follows:-
-- The movement in net asset value per share
-- The movement in share price
-- The movement of net asset value and share price performance
compared to the FTSE All-Share Index
Details of the KPIs are shown in the Financial Highlights on
page 4 and through a graph comparing the Company's total return on
a share price and net asset value basis over the period since
shares were first issued with the FTSE All-Share Index total return
over the same period as set out in the Directors' Remuneration
Report on page 25.
The Board recognises that it is in the long term interests of
shareholders to reduce discount volatility and believes that the
prime driver of discounts over the longer term is performance. As
outlined in the Report of the Directors on page 19, the Board
intends to seek renewal of its annual share buy-back authority at
the Company's Annual General Meeting in 2011. As noted in the
Chairman's Statement, due to the recent market turbulence, the
Board has temporarily suspended the share buy back programme but
are monitoring the position closely and will restore share buy
backs when conditions allow.
Risk Management
Since the Company is flexible with regard to those areas in
which it invests, it aims to achieve a significant degree of
diversification and to spread risk by investing in unquoted, PLUS
traded and AIM quoted companies. In addition, there is no emphasis
on any particular industry sector and even the non-qualifying
investments have quite a high level of in-built diversification.
The Company is restricted to investing no more than 15% of the
value of its total assets at the time of investment in any one
individual qualifying investment or non-qualifying investment.
The key risks facing the Company include Market Risk, Interest
Rate Risk Credit Risk and Liquidity Risk as further detailed in
Note 19 of the Notes to the Accounts.
In addition the Company is also focused on the following key
risks:-
Macroeconomic risks
The performance of the Company's underlying investment portfolio
is principally influenced by a combination of economic growth,
interest rates, the availability of well-priced debt finance, the
number of active trade and private equity buyers and the level of
merger and acquisition activity. All of these factors have an
impact on the Company's ability to invest and on the Company's
ability to exit from its underlying portfolio or on the levels of
profitability achieved on exit.
Long-term strategic risk
The Company is subject to the risk that its long-term strategy
and its level of performance fails to meet the expectations of its
shareholders. The Company constantly monitors the level of discount
of its Net Asset Value to its share price and considers the most
effective methodologies to keep this at a minimum.
In addition the Company regularly reviews its Objectives and
Investment Strategy in light of prevailing investor sentiment to
ensure the Company remains attractive to its shareholders
Government policy and regulation risk
The Company carries on business as a VCT under section 274 of
the Income Tax Act 2007 (ITA 2007). Continuation of this status is
subject to the Company directing its affairs in line with the
relevant requirements of the legislation. Anticipated and actual
changes in government policy and related tax treatment of VCTs are
closely monitored, as are other changes which could affect results
of operations or financial position.
Acuity Capital is an authorised person under the Financial
Services and Markets Act 2000 and regulated by the FSA. Changes to
the regulatory framework under which Acuity Capital operates are
closely monitored by Acuity Capital and reported upon as necessary
by Acuity Capital to the Company.
Socially Responsible Investment
The Company believes that high standards of corporate social
responsibility ('CSR') make good business sense and have the
potential to protect and enhance investment returns. Consequently,
the investment process takes social, environmental and ethical
issues into account when in the Company's view, these have a
material impact on either investment risk or return.
The Company recognises and supports the view that social,
environmental and ethical best practice should be encouraged. It
favours investing in companies committed to high standards of CSR
and to the principles of sustainable development.
The Company does not screen out companies from its investment
universe purely on the grounds of poor social, environmental or
ethical performance. Instead, it adopts a positive engagement
approach whereby, if it is appropriate, it discusses these issues
with the management of the companies in which it invests. The
information gathered during these meetings is used both to assist
the Company's investment decisions and also to encourage investee
company management to improve procedures and attitudes. The Company
strongly believes that this is the most effective way to improve
the CSR polices of the businesses in which it invests and the Board
endorses this view.
Investment risks
The Company operates in a very competitive market. Changes in
the number of market participants, the availability of funds within
the market, the pricing of assets, or in the ability of the
Investment Manager to access deals on a proprietary basis, could
have a significant effect on the Company's competitive position and
on the sustainability of returns.
In order to source and execute good quality investments the
Company is primarily dependent on the Investment Manager having the
ability to attract and retain people with the requisite investment
experience and whose compensation is in line with the Company's
objectives.
Once invested, the performance of the Company's portfolio is
dependent upon a range of factors. These include but are not
limited to: (i) the quality of the initial investment decision
described above; (ii) the ability of the portfolio company to
execute successfully its business strategy; and (iii) actual
outcomes against the key assumptions underlying the portfolio
company's financial projections. Any one of these factors could
have an impact on the valuation of a portfolio company and upon the
Company's ability to make a profitable exit from the investment
within the desired timeframe.
A rigorous process has been put in place by the Investment
Manager for managing the relationship with each investee company
for the period prior to anticipated realisation. This includes
regular asset reviews and, in many cases, board representation by
one of the Investment Manager's executives.
The Company reviews both the performance of Acuity Capital and
its incentive arrangements on a regular basis to ensure that both
are appropriate to the objectives of the Company. As part of this
process the board has concluded that the best interests of
Shareholders are served by appointing a new Investment Manager.
Operational risks
The Company's investment management, custody of assets and all
administrative systems are provided or arranged for the Company by
the Investment Manager. Therefore the Company is exposed to a range
of operational risks at the Investment Manager which can arise from
inadequate or failed processes, people and systems or from external
factors affecting these.
The Company's system of internal control mainly comprises the
monitoring of the services provided by the Investment Manager,
including the operating controls established by them to ensure they
meet the Company's business objectives. This is further detailed on
page 22.
Share Capital
The current authorised share capital of the Company is
GBP1,125,000 divided into 85 million ordinary shares of 1p each, 25
million C Shares of 1p each and 25 million deferred shares of 0.1p
each. The Ordinary Shares and C Shares have voting rights attached,
holders are entitled to receive notice of and attend shareholder
meetings and to receive dividends once declared and approved. The
other rights and obligations attaching to the ordinary shares, C
Shares and deferred shares are set out in the Company's Articles of
Association.
As part of the merger of Acuity VCT Plc and Acuity VCT 2 plc,
the Company issued 22,424,733 Ordinary Shares during the year under
review. The Company did not issue any C Shares or deferred shares
during the year under review.
Authority to make Market Purchases of Shares
At the Annual General Meeting of the Company held on 10 March
2011, authority was given to make market purchases of up to
4,712,322 of the Company's issued ordinary share capital and up to
115,861 of the Company's issued C Share capital.
In the year no Ordinary or C Shares have been repurchased for
cancellation in the year.
The Company does not hold any shares in treasury.
Accordingly, at 30 September 2010, authority remained to
repurchase 4 712,322 ordinary shares and 115,861 C Shares.
At 30 September 2010 a total of 54,394,938 (2009: 31,626,320)
ordinary shares of 1p each and 777,589 (2009: 777,589) C Shares of
1p each were in issue.
Results and Dividend
Revenue (losses)/returns attributable to Ordinary shareholders
amounted to GBP(457,000) (2009: GBP56,000) and the Revenue losses
attributable to C Shareholders amounted GBP(15,000) (2009:
GBP(10,000)). Capital (losses)/returns attributable to ordinary
shareholders amounted to GBP(14,953,000) (2009: GBP(1,685,000)) and
to C Share shareholders of GBP4,000 (2009: GBP(12,000)). The
Directors do not recommend the payment of a final dividend in
respect of the year ended 30 September 2010 (2009: GBPnil).
Directors
The current Directors of the Company are listed on page 14. Mr
RL Pennant-Rea, Ms C Holme, Mr DJ Donnelly, Mr NRW Ross and Mr DJ
Sebire all served as Directors throughout the financial year ended
30 September 2010. Mr RL Pennant-Rea and Mr N Ross will retire at
the Annual General Meeting in 2011 and, being eligible, Mr RL
Pennant-Rea will offer himself for re-election. Mr N Ross will not
offer himself for re-election. Short biographical details of all
the Directors are provided on page 15. Following performance
appraisals of all of the Directors, details of which are to be
found on the page 21, the Board considers that the performance of
each Director retiring at the Annual General Meeting and offering
himself for re-election continues to be effective and that each
Director continues to show commitment to his role. Accordingly, the
Board recommends that those Directors retiring at the Annual
General Meeting in 2011 and offering themselves for re-election be
re-elected.
Directors' Interests
The beneficial interests of the Directors in the ordinary shares
of the Company are shown below. Save as disclosed, no Director had
any notifiable interest in the securities of the Company.
As a result of the merger the director's interests have changed
as follows:
30 September 2010 30 September
Ordinary Shares of 2009
1p Ordinary Shares
each of 1p
each
RL Pennant-Rea 110,120 102,500
DJ Donnelly - -
C Holme - -
NRW Ross* 140,478 103,100
DJ Sebire 7,475 -
No Director holds C Shares in the Company.
* NRW Ross also has an interest in GBP6,332 of the 4% Loan Notes
issued by the Company.
Directors' Remuneration Report
An Ordinary Resolution to approve the Directors' Remuneration
Report will be put to the Annual General Meeting in 2011.
Contracts with Directors
No Director has a service contract with the Company. As a result
of being a Partner of Acuity Capital LLP, Mr NRW Ross is deemed to
have an interest in the Management Contract between the Company and
Acuity Capital.
Directors' and Officers' Liability Insurance
Directors' and Officers' Liability Insurance is maintained on
behalf of the Directors in respect of their positions as Directors
of the Company.
Substantial Shareholders
At 31 January 2011 the Directors had not been notified of any
interests of 3% or more in the Company's issued share capital.
Independent Auditors
A resolution to reappoint KPMG Audit Plc as Auditors to the
Company will be proposed at the Annual General Meeting in 2011. A
separate resolution will be proposed at the Annual General Meeting
in 2011 authorising the Directors to fix the remuneration of the
Auditors.
The Directors confirm that so far as each Director is aware,
there is no relevant audit information of which the Company's
auditors are unaware and that each Director has taken all the steps
that he ought to have taken as a Director in order to make himself
aware of any relevant audit information and to establish that the
Company's auditors are aware of that information.
Creditor Payment Policy
The Company agrees the terms of payment with its suppliers when
agreeing the terms of each agreement. Suppliers are aware of the
terms of payment and the Company abides by the
terms of payment. The Company's average creditor payment period
at 30 September 2010 was one day.
Investment Manager
Acuity Capital Management Limited was the Investment Manager of
the Company during the year under review. The Board regularly
reviews the performance of the Investment Manager. As a result, the
Board has interviewed other investment managers and believes that
it is in the best interests of shareholders to appoint another
investment manager.
Management Fees and Arrangements
Acuity Capital was appointed as Investment Manager under an
agreement dated 6 October 2004, later superseded by an updated
Management Agreement dated 18 October 2007. The agreement is for an
initial period of five years and thereafter until terminated by not
less than one year's notice. Fees are paid quarterly in arrears, as
a percentage of net assets (less a rebate of fees suffered in
investments in funds managed by Acuity Capital), at the following
annual rates:
Period ended 30 June 2005 1.5%
Year ended 30 June 2006 2.0%
Year ended 30 June 2007 and thereafter 2.5%
Annual running expenses of the Fund are capped at 3.6% of the
net asset value as at 30 September 2010. Any excess will be reduced
against the management fee payable to the Investment Manager.
Incentive Schemes
Certain persons engaged in, the business of the Investment
Manager will be entitled to receive a performance fee based upon
returns to shareholders of both Ordinary and C Shares. The
incentives are designed to encourage significant dividend payments
to shareholders and a Net Asset Value performance that would equate
to a historic top quartile industry ranking, before any performance
fee payment is made. Therefore, if, by the end of a financial year,
aggregate distributions of 30p per share have been declared and if
the Performance Value, which is equal to the Net Asset Value plus
distributions, at that date exceeds 130p per share, then the
beneficiaries will be entitled to a performance fee equal to 20% of
the excess of such Performance Value over 100p per share. If, on a
subsequent financial year end, the performance of the Company falls
short of the performance of the Company on the previous financial
year end, the beneficiaries will not be entitled to any
incentive.
If, on a subsequent financial year end, the performance of the
Company exceeds the previous financial year's performance of the
Company, the beneficiaries will be entitled to 20% of such excess.
To give effect to this performance fee, Loan Notes have been issued
by the Company to certain persons engaged in the business of the
Investment Manager. No Loan Notes have been issued directly to the
Investment Manager. Further details of the terms of the Loan Notes
are set out in Note 2 and 12 of the accounts. At 30 September 2010,
there was no amount due under this incentive scheme.
Going Concern
After making enquiries and bearing in mind the nature of the
Company's business and assets, the Directors consider that the
Company had adequate resources to continue in operational existence
for the foreseeable future. In arriving at this conclusion the
Directors have considered the liquidity of the Company and its
ability to meet obligations as they fall due for a period of at
least twelve months from the date that these financial statements
were approved. As at 30 September 2010 the Company held cash
balances and listed investment in Electra Private Equity plc
amounting to GBP1,589,000. Cash flow projections have been reviewed
and the Company has sufficient funds to meet both its contracted
expenditure and its discretionary cash outflows in the form of the
share buyback programme and dividend policy. The Company has no
external loan finance in place and therefore is not exposed to any
gearing or covenants.
Annual General Meeting
The Annual General Meeting of the Company will be held on 10
March 2011. In addition to the ordinary business, the following
special business will be considered:-
Authority to allot shares: Resolution 7
An Ordinary Resolution will be proposed at the Annual General
meeting in 2010 to grant the Directors authority under section 551
of the Companies Act 2006 to allot shares up to a maximum aggregate
nominal value of GBP183,996.77 being one third of the nominal value
of the issued share capital of the Company at the date of this
Directors' Report. The authority will expire at the conclusion of
the Company's Annual General Meeting in 2012. This Ordinary
Resolution will also remove the concept of an authorised share
capital from the Company's articles of association, in accordance
with the provisions of the Companies Act 2006. The Directors
recommend shareholders to vote in favour of this Ordinary
Resolution.
Disapplication of pre-emption rights: Resolution 8
A Special Resolution will be proposed at the Annual General
Meeting in 2011 to grant the Directors authority to allot equity
securities for cash without first offering the securities to
existing shareholders in connection with the allotment of up to 10%
of the nominal value of the issued share capital of the Company
from time to time. The Directors' authority under this resolution
will expire at the conclusion of the Company's Annual General
Meeting in 2011. The Directors recommend shareholders to vote in
favour of this Special Resolution.
Authority to Make Market Purchases of Shares: Resolution 9
As set out in the Chairman's Statement, in the interest of all
the Company's shareholders the Board suspended the Company's
buy
back programme temporarily because of the exceptional economic
circumstances. Nevertheless the Board wishes to have in place the
authority to purchase the Company's own shares so that the buy back
programme can be re-instated as and when conditions permit.
Accordingly, a Special Resolution will be proposed to renew, for
one year, the Board's authority to make market purchases of
ordinary shares and/or C Shares provided that such authority is
limited to the purchase of 14.9%of the issued ordinary share
capital and/or 14.9 per cent. of the issued C Share capital of the
Company from time to time, subject to the constraints set out in
the Special Resolution. Should any shares be purchased under this
authority, it is the intention of the Board that they be cancelled
and not held as treasury shares.
The Directors do not intend to use this authority to purchase
shares unless this would result in an increase in the net asset
value per ordinary and/or C Share as applicable and would be in the
best interests of shareholders generally. The Directors recommend
shareholders to vote in favour of this Special Resolution.
Corporate Governance
Arrangements in respect of corporate governance, appropriate to
a venture capital trust, have been made by the Board. The Board has
considered the principles and recommendations of the Association of
Investment Companies' Code of Corporate Governance issued in March
2009 ('AIC Code') by reference to the AIC Corporate Governance
Guide for Investment Companies ('AIC Guide'). The AIC Code, as
explained by the AIC Guide, addresses all the principles set out in
Section 1 of the Combined Code on Corporate Governance issued by
the Financial Reporting Council ('FRC') ('the Combined Code'), as
well as setting out additional principles and recommendations on
issues which are of specific relevance to the Company. The FRC
confirmed in February 2009 that it remained their view that the AIC
Guide was appropriate and that investment companies may report
against the AIC Code.
The Board considers that reporting against the principles and
recommendations of the AIC Code, and by reference to the AIC Guide
(which incorporates the Combined Code) will provide better
information to shareholders.
Except as disclosed below, the Company complied throughout the
year with the recommendations of the AIC Code and the relevant
provisions of Section 1 of the Combined Code. Since all the
Directors are non-executive the provisions of the Combined Code in
respect of the role of the chief executive are not relevant to the
Company and, likewise, the provisions of the Combined Code relating
to Directors' remuneration are not relevant except in so far as
they relate specifically to non-executive Directors. For the
reasons set out in the AIC Guide, and in the preamble to the
Combined Code, the Board considers that these provisions are not
relevant to the Company, being an externally managed venture
capital trust. The Company has therefore not reported further in
respect of these provisions.
The Directors confirm that during the year under review the
Company has complied with Section 1 of the Combined Code on
Corporate Governance ("the Code") issued by the Financial Reporting
Council in June 2008.
Directors' Attendance at Scheduled Meetings of the Board and
Committees of the Board
In addition, a number of Directors attended further Board
meetings at short notice to address specific issues.
The Board of Directors
The Board, which meets regularly, comprised five Directors at 30
September 2010, all of whom were non-executive. All of the
Directors who held office at 30 September 2010, apart from Mr NRW
Ross, have been considered by the Board to be independent from the
Investment Manager. The Board has nominated Mr DJ Sebire as the
Senior Independent Director.
The Board believes that each of the Company's Directors, apart
from Mr NRW Ross, continues to be wholly independent under the Code
notwithstanding the cross-directorships detailed above.
Independence is a state of mind and the character and judgement
which accompany this are distinct from and, in the Board's opinion,
are not compromised by having cross directorships with other
Directors.
The Board agreed a schedule of matters reserved for its specific
approval, which includes a regular review of the Company's
Management Agreement with Acuity Capital, together with the
monitoring of the performance thereunder. The Management Agreement
sets out the matters over which Acuity Capital has authority in
accordance with the policies and directions of the Board. The Board
Meetings consider as appropriate such matters as overall strategy,
investment performance, share price performance, share price
discount and communication with shareholders. The Board considers
that it meets sufficiently regularly to discharge its duties
effectively. The numbers of scheduled meetings of the Board and the
Audit Committee are shown in the table above. All of the Directors
attended the Annual General Meeting.
The Board receives information that it considers to be
sufficient and appropriate to enable it to discharge its duties.
Each Director receives board papers several days in advance of each
scheduled Board meeting and is able to consider in detail the
Company's
performance and any issues to be discussed at the relevant
meeting.
The Directors believe that the Board has the balance, skills and
experience which enable it to provide effective strategic
leadership and proper governance of the Company. Information about
the Directors, including their relevant experience, can be found on
page 15.
Performance Appraisal
The Board carried out a formal appraisal process of its own and
of its Committees' operation and performance during the year under
review. This was implemented by means of questionnaires circulated
to the Directors, the results of which were then reviewed by the
Board. Issues covered included board composition, meeting
arrangements and communication. The process was considered by the
Board to be constructive in identifying areas for improving the
functioning and performance of the Board and of its Committees. The
Board concluded that its performance and that of its Committees was
satisfactory.
The Chairman carried out a formal appraisal of each of the
Directors during the year under review and the Board, under the
leadership of the Senior Independent Director, similarly appraised
the Chairman. Relevant matters considered included the attendance
and participation at Board and Committee meetings, commitment to
Board activities and the effectiveness of the contribution made by
the relevant Director. As a result of this process the Chairman has
confirmed that the performance of each of the Directors continues
to be effective and that each of them continues to show commitment
to his role. The Senior Independent Director has also confirmed the
continuing effectiveness and commitment of the Chairman.
Re-election of Directors
In accordance with the Code's provisions or the Company's
Articles, Mr RL Pennant-Rea and Mr NRW Ross will retire at the
Annual General Meeting to be held in 2011. Mr RL Pennant-Rea will
offer himself for re-election and Mr NRW Ross will not offer
himself for re-election.
Independent Professional Advice
Individual Directors may seek independent professional advice in
furtherance of their duties at the Company's expense within certain
parameters. All Directors have access to the advice and services of
the Company Secretary. Any appointment or removal of the Company
Secretary would be a matter for consideration by the entire
Board.
The Audit Committee
The Board has an Audit Committee established in compliance with
the Code. It comprises all the Directors other than the Chairman of
the Board and Mr NRW Ross, with Mr DJ Sebire as Chairman of the
Committee. The Board has taken note of the suggestion that at least
one member of the Committee should have recent and relevant
experience and is satisfied that the Committee is properly
constituted in this respect. Its authority and duties are clearly
defined in its written terms of reference which is available on
Acuity Capital's website.
The Committee's Responsibilities include:
-- monitoring and reviewing the integrity of the financial
statements, the internal financial controls and the independence,
objectivity and effectiveness of the external auditors;
-- making recommendations to the Board in relation to the
appointment of the external auditors and approving the remuneration
and terms of their engagement;
-- developing and implementing the Company's policy on the
provision of non-audit services by the external auditors;
-- reviewing the arrangements in place within Acuity Capital
whereby their staff may, in confidence, raise concerns about
possible improprieties in matters of financial reporting or other
matters insofar as they may affect the Company and
-- considering annually whether there is a need for the Company
to have its own internal audit function.
The Committee has reviewed the provision of non-audit services
provided by the external auditors and believes them to be cost
effective and not an impediment to the external auditors'
objectivity and independence. It has been agreed that all non-audit
work to be carried out by the external auditors, must be approved
by the Audit Committee and that any special projects must be
approved in advance.
The Committee annually reviews the performance of KPMG Audit
Plc, the Company's external auditor. In doing so, the Committee
considers a range of factors including the quality of service, the
auditor's specialist expertise and the level of audit fees. There
are no contractual obligations restricting the choice of external
auditor. Under Company Law the reappointment of the external
auditor is subject to shareholder approval at the AGM.
Internal Audit
Following the review carried out by the Audit Committee as to
whether there is a need for the Company to have its own internal
audit function, the Board has considered and continues to believe
that the internal control systems in place within Acuity Capital
provide sufficient assurance that a sound system of internal
control, which safeguards shareholders' investment and the
Company's assets is maintained. An internal audit function,
specific to the Company, is therefore considered unnecessary.
The Remuneration Committee
During the year under review the Remuneration Committee
comprised all the Directors of the Company other than the Chairman
of the Board and Mr NRW Ross, with Mr DJ Donnelly as Chairman of
the Committee. There was a meeting of the Remuneration Committee
during the year. The Directors have now agreed future directors'
fees, following the change in Investment Manager, will be GBP25,000
for the Chairman and Mr D Sebire and GBP20,000 for Mr D Donnelly
and Ms C Holme. The Committee has written terms of reference which
are available on Acuity Capital's website. Full details of its role
are set out in the Directors' Remuneration Report.
The Nomination Committee
The Nomination Committee meets on an ad hoc basis to consider
suitable candidates for appointment as Director. It comprises all
the Directors apart from Mr NRW Ross, with Mr RL Pennant-Rea as
Chairman of the Committee.
The current Directors of the Company were appointed with regard
to their independence, suitability for the position and their
experience in related business areas.
Induction and Training
New Directors are provided with an induction programme which is
tailored to the particular circumstances of the appointee and which
includes being briefed fully about the Company by the Chairman and
senior executives of Acuity Capital. Following appointment,
Directors continue to receive other relevant training and advice as
necessary to enable them to discharge their duties.
The Company's Relationship with its Shareholders
The Company places great importance on communication with the
Company's shareholders. In addition to the Annual and Interim
Reports, shareholders will be sent regular newsletters from the
Investment Manager.
At the Annual General Meeting all shareholders are welcome to
attend and have the opportunity to put questions to the Board.
The notice of the Annual General Meeting and related papers are
sent to shareholders at least 21 working days before the
meeting.
A separate resolution is proposed on each substantially separate
issue including the annual report and accounts.
All proxy votes are counted and, except where a poll is called,
the level of proxies lodged for each resolution is announced at the
Meeting and is published on Acuity Capital's website.
The Chairman and the Senior Independent Director can always be
contacted either through the Company Secretary or care of the
Company's registered office at Paternoster House, 65 St Paul's
Churchyard, London EC4M 8AB.
Internal Control
The Code requires the Directors to review the effectiveness of
the Company's system of internal control and report to shareholders
that they have done so. The Code extended the earlier reporting
requirements and now includes financial, operational and compliance
controls and risk management.
The Board confirms that it has an ongoing process for
identifying, evaluating and managing the significant risks faced by
the Company. This process has been in place throughout the year and
has continued since the year end and up to the date of this report.
It is reviewed at regular intervals by the Board and accords with
the Financial Reporting Council's 'Internal Control: Revised
Guidance for Directors on the Combined Code'.
The Board is responsible for the Company's system of internal
control and it has reviewed its effectiveness for the year ended 30
September 2010. The system of internal control is designed to
manage, rather than eliminate, the risk of failure to achieve
business objectives and can only provide reasonable and not
absolute assurance against material misstatement or loss.
Since investment management, custody of assets and all
administrative services are provided or arranged for the Company by
Acuity Capital, the Company's system of internal control mainly
comprises the monitoring of services provided by Acuity Capital,
including the operating controls established by them, to ensure
they meet the Company's business objectives. The key elements
designed to provide effective internal control for the Company are
as follows:
-- Financial Reporting - Regular and comprehensive review by the
Board of key investment and financial data including management
accounts, revenue projections, analyses of transactions and
performance comparisons.
-- Investment Strategy - Agreement by the Board of the Company's
investment strategy and monitoring of all large investments.
-- Management Agreements - The Board regularly monitors the
performance of Acuity Capital to ensure that the Company's assets
and affairs are managed in accordance with the guidelines
determined by the Board.
-- Investment Performance - The investment transactions and
performance of the Company's assets and affairs are managed in
accordance with the guidelines determined by the Board.
-- Management Systems - Acuity Capital's system of internal
control includes clear lines of responsibility, delegated
authority, control procedures and systems. Acuity Capital's
compliance department monitors compliance with the Financial
Services Authority rules. The Board keeps under review the
effectiveness of the
-- Company's system of internal control by monitoring the
operation of key controls of Acuity Capital as follows:
-- The Board reviews the terms of the Management Agreement and
receives regular reports from Acuity Capital executives.
-- The Board reviews the certificates provided by Acuity Capital
on a six monthly basis, verifying compliance with documented
controls.
Voting Policy
The Company's investee companies are principally a mixture of
quoted and unquoted companies in which the Company is a significant
shareholder and the Company is usually a party to all issues
requiring shareholder approval. The Company has given discretionary
voting power to Acuity Capital to vote on its behalf.
Acuity Capital's voting policy as agent for the Company has
adopted and applies the Statement of Principles drawn up by the
Institutional Shareholders Committee when it considers these in its
reasonable judgement to best serve the financial interests of the
Company's shareholders. Acuity Capital's voting policy has been
reviewed and endorsed by the Board.
Acuity Capital Management Limited
Secretary
Registered Office:
Paternoster House
65 St Paul's Churchyard
London EC4M 8AB
31 January 2011
The Directors are responsible for preparing the Annual Report
and the Financial Statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law they have
elected to prepare the Financial Statements in accordance with UK
Accounting Standards and applicable law (UK Generally Accepted
Accounting Practice).
The Financial Statements are required by law to give a true and
fair view of the state of affairs of the Company and of the profit
or loss of the Company for that period.
In preparing these Financial Statements, the Directors are
required to:
-- select suitable accounting policies and then apply them
consistently;
-- make judgements and estimates that are reasonable and
prudent;
-- state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the Financial Statements; and
-- prepare the Financial Statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping proper accounting
records that disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
its financial statements comply with the Companies Act 2006. They
have general responsibility for taking such steps as are reasonably
open to them to safeguard the assets of the Company and to prevent
and detect fraud and other irregularities.
Under applicable law and regulations, the directors are also
responsible for preparing a Directors' Report and Directors'
Remuneration Report that complies with that law and those
regulations.
The accounts of the Company are published on
www.acuitycapital.co.uk which is a website maintained by the
Company's Investment Manager, Acuity Capital.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Management Company's website. Legislation in the UK governing the
preparation and dissemination of Financial Statements may differ
from legislation in other jurisdictions.
In accordance with the FSA's Disclosure and Transparency Rules,
the Directors confirm to the best of their knowledge that:-
(a) the accounts, prepared in accordance with applicable
accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company;
and
(b) the Report of the Directors includes a fair review of the
development and performance of the business and position of the
Company together with a description of the principal risks and
uncertainties that it faces.
By order of the Board of Directors
Rupert Pennant-Rea, Chairman
Registered Office:
Paternoster House
65 St Paul's Churchyard
London EC4M 8AB
31 January 2011
The Directors submit this report in accordance with the
requirements of Schedule 8 of the Large and Medium Sized Companies
and Groups (Accounts and Reports) Regulations 2008. An Ordinary
Resolution for the approval of this report will be put to members
at the forthcoming Annual General Meeting. The law requires the
Company's Auditors to audit certain of the disclosures provided.
Where disclosures have been audited they are indicated as such.
Remuneration Committee
During the year under review the Remuneration Committee
comprised all the Directors of the Company other than the Chairman
of the Board and Mr NRW Ross. Mr DJ Donnelly was Chairman of the
Remuneration Committee throughout the year.
During the year the Committee met once to consider directors'
fees following the merger of Acuity VCT plc and Acuity VCT 2 plc,
renamed Acuity Growth VCT plc. It set fee rates of GBP40,000 for
the Chairman and GBP30,000 for each of the Directors, apart from Mr
D Sebire who is paid an additional GBP10,000 per annum in respect
of further duties undertaken in relation to the production of the
Company's Report and Accounts, and Mr NRW Ross who receives no
remuneration from the Company. The Directors have now agreed future
directors' fees, following the change in Investment Manager, will
be GBP25,000 for the Chairman and Mr D Sebire and GBP20,000 for Mr
D Donnelly and Ms C Holme.
Policy of Directors Remuneration
In accordance with the Articles of Association of the Company,
the aggregate remuneration of the Directors may not exceed
GBP140,000 per annum or such higher amount as may from time to time
be determined by an Ordinary Resolution of the Company. Subject to
this overall limit, the Remuneration Committee's policy is that
remuneration of non-executive Directors should be sufficient to
attract and retain the Directors needed to oversee the Company and
reflect the specific circumstances of the Company, the duties and
responsibilities of the Directors and the value and amount of time
committed to the Company's affairs. It is intended that this policy
will continue for the year ended 30 September 2011 and subsequent
years. Non-executive Directors are not eligible to receive bonuses,
pension benefits, share options and other benefits.
Directors' Service Contracts
None of the Directors has a service contract with the Company.
No arrangements have been entered into between the Company and the
Directors to entitle any of the Directors for compensation for loss
of office.
Directors' Remuneration for the Year (audited)
The Directors who served during the year received the following
emoluments in the form of fees:
For the year For the
ended 30 year ended
September 30 September
2010 2009
GBP'000 GBP'000
RL Pennant-Rea
(Chairman & joint
highest paid Director)
DJ Donnelly 33 20
Catrina Holme 25 15
NRW Ross 25 7
DJ Sebire (Joint - -
highest paid Director) 33 20
Total 117 70
A Settlement of GBP55,000 was also accrued as a settlement to
HMRC for prior year National Insurance payments.
As a former executive of the Electra Partners Group and as a
current executive of Acuity Capital, NRW Ross has an interest in
the Management Contract between the Company and Acuity Capital
(formerly Electra Quoted Management). NRW Ross has waived his right
to receive directors' fees from the Company.
By order of the Board of Directors
Mr DJ Donnelly,
Chairman of the Remuneration Committee, Registered Office:
Paternoster House, 65 St Paul's Churchyard. London EC4M 8AB
31 January 2011
Independent Auditors' Report to the Members of Acuity Growth VCT
Plc
We have audited the financial statements of Acuity Growth VCT
Plc for the period ended 30 September 2010 which comprise the
Income Statement, the Reconciliation of Movements in Shareholders'
Funds, the Balance Sheet, the Cash Flow Statement and the related
notes. The financial reporting framework that has been applied in
their preparation is applicable law and UK Accounting Standards (UK
Generally Accepted Accounting Practice).
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditors' report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members, as a body,
for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of directors and auditors
As explained more fully in the Directors' Responsibilities
Statement set out on page 24, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view. Our responsibility is to audit
the financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board's
(APB's) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements
is provided on the APB's web-site at
www.frc.org.uk/apb/scope/UKP.
Opinion on financial statements
In our opinion the financial statements:
-- give a true and fair view of the state of the company's
affairs as at 30 September 2010 and of its loss for the year then
ended;
-- have been properly prepared in accordance with UK Generally
Accepted Accounting Practice; and
-- have been prepared in accordance with the requirements of the
Companies Act 2006.
Opinion on other matters prescribed by the Companies Act
2006
In our opinion:
-- the part of the Directors' Remuneration Report to be audited
has been properly prepared in accordance with the Companies Act
2006; and
-- the information given in the Directors' Report for the
financial year for which the financial statements are prepared is
consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you
if, in our opinion:
-- adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the financial statements and the part of the Directors'
Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
-- certain disclosures of directors' remuneration specified by
law are not made; or
-- we have not received all the information and explanations we
require for our audit.
Under the Listing Rules we are required to review:
-- the directors' statement, set out on page 19, in relation to
going concern; and
-- the part of the Corporate Governance Statement relating to
the company's compliance with the nine provisions of the June 2008
Combined Code specified for our review.
Simon Pashby (Senior Statutory Auditor)
for and on behalf of
KPMG Audit Plc,
Statutory Auditor
Chartered Accountants
Edinburgh
31 January 2011
The information on pages 33 to 51 forms an integral part of
these financial statements.
For the year ended Ordinary C Shares Total
30 September 2009 shares
Revenue Capital Total Revenue Capital Total Revenue Capital
Total Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
GBP'000 GBP'000
Realised losses on investments sold 9 - (94) (94) - - - - (94)
(94)
Investment holding losses 9 - (1,139) (1,139) - (3) (3) -
(1,142) (1 142)
Income 1 563 - 563 - - - 563 - 563
Recoverable VAT 2 32 98 130 - - - 32 98 130
595 (1,135) (540) - (3) (3) 595 (1,138) (543)
Investment management fees 2 (217) (620) (837) (4) (13) (17)
(221) (633) (854)
Other expenses 3 (265) 45 (220) (5) 4 (1) (270) 49 (221)
(482) (575) (1,057) (9) (9) (18) (491) (584) (1,075)
Return/(Loss) on Ordinary Activities before
interest and Taxation 113 (1,710) (1,597) (9) (12) (21) 104
(1,722) (1 618)
Finance Cost 4 (32) - (32) (1) - (1) (33) - (33)
Return/(Loss) on Ordinary Activities before taxation 81 (1,710)
(1,629) (10) (12) (22) 71 (1,722) (1,651)
Tax on ordinary activities 6 (25) 25 - - - - (25) 25 -
Net Return/(Loss) on Ordinary Activities
after Taxation 56 (1,685) (1,629) (10) (12) (22) 46 (1,697)
(1,651)
Return/(Loss)
per Share 7 0.2p (5.4)p (5.2)p (1.3)p (1.5)p (2.8)p
The total column of this statement represents the Company's
Income Statement, prepared in accordance with UK GAAP. The revenue
return and capital return columns are supplementary to this and are
prepared under guidance published by the Association of Investment
Companies. All revenue and capital items in the above statement
derive from continuing operations. No operations were acquired or
discontinued in the year. A Statement of Total Recognised Gains and
Losses is not required as all gains and losses of the Company have
been reflected in the above statement.
The information on pages 33 to 51 forms an integral part of
these financial statements.
The information on pages 33 to 49 forms part of these Financial
Statements.
The Financial Statements on pages 29 to 49 were approved and
authorised for issue by the Board of Directors on xx December 2010
and were
signed on their behalf by:
RL Pennant-Rea
Chairman
Basis of Accounting
The accounts are prepared on a going concern basis and on the
historical cost basis of accounting, modified to include the
revaluation of fixed asset investments, in accordance with the
Companies Act 2006, United Kingdom Generally Accepted Accounting
Practice (UK GAAP) and the Statement of Recommended Practice for
Investment Trust Companies and Venture Capital Trusts issued by the
Association of Investment Companies in December 2005 and revised in
January 2009 (the "SORP").
In order to reflect the activities of an investment company,
supplementary information which analyses the financial statements
between items of a revenue and capital nature has been presented
alongside the financial statements. In analysing total income
between capital and revenue returns, the Directors have followed
the guidance contained in the SORP.
The management fee is allocated between revenue and capital in
accordance with the Board's expected long term split of returns,
and other expenses are charged to capital only to the extent that a
clear connection with the maintenance or enhancement of the value
of investments can be demonstrated.
A summary of the principal accounting policies, all of which
have been applied consistently throughout the current year,
follows:
Investments
Purchases and sales of quoted investments are recognised on the
trade date where a contract exists whose terms require delivery
within a timeframe determined by the relevant market. Purchases and
sales of unlisted investments are recognised when the contract for
acquisition or sale becomes unconditional. Investments are
designated at fair value through profit and loss on initial
recognition (described in the Accounts as investments held at fair
value) and are subsequently measured at reporting dates at fair
value. The fair value of direct unquoted investments is calculated
in accordance with the Principles of Valuation of Investments
below. Changes in the fair value of investments are recognised in
the income statement through the capital account.
Quoted Investments
Quoted investments are stated at the bid market prices on the
balance sheet date without discount.
Principles of Valuation of Investments
General
In valuing investments, the Directors follow the principles
recommended in the International Private Equity and Venture Capital
Valuation Guidelines issued in September 2009. Investments are
valued at fair value at the reporting date.
Fair value represents the amount for which an asset could be
exchanged between knowledgeable, willing parties in an arm's length
transaction. In estimating fair value, the Directors use a
methodology which is appropriate in light of the nature, facts and
circumstances of the investment. Methodologies are applied
consistently from one period to another except where a change
results in a better estimate of fair value. Because of the inherent
uncertainties in estimating the value of private equity
investments, the Directors exercise appropriate prudence in
applying the various methodologies.
As part of the valuation process, the proposed valuations are
reviewed by the independent members of the Investment Committee
before being examined by the auditors and then approved by the
Directors.
Unquoted Investments
The principal methodologies applied in valuing unquoted
investments, including PLUS investments (a UK market focussed on
small and medium companies) include, but not exclusively, the
following:
-- Earnings multiple
-- Price of recent investment
-- Net assets
In applying the Earnings Multiple methodology, the Directors
apply a market based multiple that is appropriate and reasonable to
the maintainable earnings of the company. In the majority of cases
the Enterprise Value of the underlying business is derived by the
use of an Earnings before Interest, Tax and Depreciation multiple
applied to current year's earnings where these can be forecast with
a reasonable degree of certainty and are deemed to represent the
best estimate of maintainable earnings. Where this is not the case,
historic earnings will generally be used in their place. In the
case of unquoted investments, fair value is established by using
measurements of value such as price of recent transaction, earnings
multiple and net assets; where no reliable fair value can be
estimated using such techniques.
Where a recent investment has been made, either by the Company
or by a third party in one of Company's investments, this price
will be used as the estimate of fair value from the date on which
the investment was made. One of the principal methodologies, as
above, may be used at any time if this is deemed to provide a
better assessment of the fair value of the investment. Unquoted
investments may be subject to an impairment adjustment to valuation
where necessary.
The fair value of an investment in a company will be arrived at
through the following process:
-- The Enterprise Value of the underlying business will be
calculated using one of the above methodologies;
-- The Enterprise Value of the underlying business will then be
adjusted for surplus assets or excess liabilities to arrive at an
Enterprise Value for the company; and
-- The valuation of the Company's investment will be calculated
from the Enterprise Value for the company after deduction of prior
ranking debt and other financial instruments and an appropriate
discount.
In terms of the discount, this will normally be in the range of
10-30% (in steps of 5%) applied to the comparable multiple of the
company.
The amount of the discount is a question of judgement and will
reflect several factors including the ability of the Company to
influence the timing and nature of any realisation. Where the
Company has the ability to influence an exit, or is part of a
syndicate of like-minded investors who initiate the exit, a smaller
discount will be applied. This may vary according to market and
investee company circumstances. Where the likelihood of an exit is
high, the discount is likely to be lower. Where there is no ability
to initiate an exit and exit is not under discussion the discount
is likely to be higher. In cases where no exit is contemplated by
controlling shareholders, the investment may be valued by
discounting the cash flow from the investment itself.
Although the Company holds more than 20% of the equity of
certain companies, it is considered that the investments are held
as part of the investment portfolio. Accordingly, and as permitted
by FRS 9 'Associates and joint ventures', their value to the
Company lies in their marketable value as part of that portfolio.
It is not considered that any of the holdings represent investments
in associated undertakings.
Under FRS 2 'Accounting for subsidiary undertakings' control is
presumed to exist when the parent owns, directly or indirectly more
than half of the voting power by a number of means. The Company
does not hold more than 50% of the equity of any of the companies
within the portfolio. In addition, it does not control any of the
companies held as part of the investment portfolio. It is not
considered that any of the holdings represent investments in
subsidiary undertakings.
Income
Dividends receivable from equity investments are brought into
account on the ex-dividend date or, where no ex-dividend date is
quoted, are brought into account when the Company's right to
receive payment is established. Fixed returns on non-equity
investments and on debt securities are recognised on an effective
interest rate basis. Where there is reasonable doubt that a return,
which falls within the accounting period, will actually be received
by the Company, the recognition of the return is deferred until the
reasonable doubt has been removed.
Interest receivable on cash deposits is accounted for on an
accruals basis.
Expenses
All expenses are accounted for on an accruals basis. Expenses
are charged through the revenue account except for expenses in
connection with the purchase and disposal of fixed asset
investments, which are deducted from the disposal proceeds of the
investment and investment management and incentive fees which are
dealt with below. A split of expenses is made between Ordinary and
C Shares in proportion to the Net Asset Value.
Investment Management and Incentive Fees
The investment management fees for the Investment Manager's
services are charged 25% to the revenue account and 75% to the
capital account. This is in line with the Board's long-term
expected split of returns from the investment portfolio of the
Company. Incentive fees are fully charged to the capital account.
The incentive fee on realisations in the period is charged to the
realised capital reserve and the incentive fee provision in respect
of unrealised value growth in the portfolio is charged to the
unrealised capital reserve.
Revenue and Capital Reserves
The revenue return in the Income Statement is taken to the
revenue reserve.
Gains and losses on the realisation of investments are taken to
the realised capital reserve. Gains and losses arising from changes
in fair value are considered to be realised only to the extent that
they are readily convertible to cash in full at the balance sheet
date. Otherwise Gains and Losses are treated as unrealised.
Taxation
The tax effects of different items in the Income Statement are
allocated between capital and revenue on the same basis as the
particular item to which they relate using the Company's effective
rate of tax for the accounting period.
Due to the Company's status as a venture capital trust and the
continued intention to meet the conditions required to comply with
Section 274 of the Income Tax Act 2007 (ITA 2007), no provision for
taxation is required in respect of any realised or unrealised
appreciation of the Company's investments.
Deferred tax is provided on all timing differences that have
originated but not reversed by the balance sheet date. Deferred tax
assets are only recognised to the extent that they are
recoverable.
Dividends Payable
Dividend distributions to shareholders are recognised as a
liability in the period in which they are paid in respect of
interim dividends or when approved by members in respect of final
dividends.
Foreign Currency
The Company does not hold any assets or liabilities denominated
in foreign currencies at the year end.
Trail Commission
The fair value of trail commission payable on new share issues
is estimated on the date the new shares are issued based on the net
asset value of the trust at that time, an estimate of annualised
growth in NAV over the life of the contract and an appropriate
discount rate. Subsequent to initial recognition, changes in the
value of the creditor arising through the unwinding of the discount
rate are recognised in the revenue column of the Income Statement
and movements in the value of the creditor resulting from changes
in assumptions are recognised in the capital column of the Income
Statement.
C Shares
Unless and until C Shares are converted into Ordinary Shares,
all investments and returns attributable to this class of share
will be accounted for separately from Ordinary Shares. All residual
expenses will be allocated on the basis of total funds raised for
each class of share.
Acuity Capital also received an administration fee of GBP70,000
(2009: GBP70,000), net of VAT, which increases each year in line
with RPI. The administration fee is included in the administration
expenses of GBP258 000 in Note 3.
HM Revenue & Customs has accepted that under European Union
VAT law the exemption of VCT management fees from VAT should have
applied from January 1990 onwards and has indicated that claims may
be made for repayment of VAT previously suffered by VCTs on
management fees, subject to such claims being limited to a period
of three years prior to the date of claim. During the year ended 30
September 2009 the Company received a repayment of GBP130,000 in
respect of VAT previously suffered on management fees and this
amount has been recognised as a separate credit in the income
statement, allocated between revenue and capital return in the same
proportion as that in which the irrecoverable VAT was originally
charged. The directors also agreed that the Investment Manager
would be refunded for the reduction in Management fees paid during
the same period as disclosed above.
Annual running expenses of the Fund are capped at 3.6% of the
net asset value as of 30 September 2010. Any excess will be reduced
against the management fee payable to the Investment Manager.
During the year to 30 September 2009 an exceptional payment of
GBP140,000 was made to the Investment Manager in respect of unpaid
Management Fees for past periods on receipt of the VAT repayment
referred to above.
Management Fees and Arrangements
Acuity Capital was appointed as Investment Manager under an
agreement dated 6 October 2004, later superseded by an updated
Management Agreement dated 18 October 2007. The Agreement is for an
initial period of five years and thereafter until terminated by not
less than one year's notice to expire at any time after the initial
period. Fees for Ordinary and C Share pools are paid quarterly in
advance, as a percentage of net assets (less a rebate of fees
suffered in the investment in CF Real Active Management which is
managed by Acuity Capital), at the following annual rates:
Period ended 30 June 2005 1.5%
Year ended 30 June 2006 2.0%
Year ended 30 June 2007 and thereafter 2.5%
Incentive Schemes
Ordinary Shares
The Investment Manager will receive a performance fee based on
returns to Ordinary shareholders. If the Company's net asset value
per share in a relevant calculation period increases so that it
exceeds GBP1, less the value of distributions per share plus
notional interest at 7% per annum compounded annually, the
Investment Manager will receive 20% of the excess. For ordinary
shares the first period expired on 30 September 2004. Subsequent
periods are of one year's duration. In the event that the
performance of the Company falls short of the target in any period
the shortfall must be made up before the Investment Manager is
entitled to a performance fee for subsequent periods.
C Shares
Certain employees of, and persons engaged in, the business of
the Investment Manager, will be entitled to receive a performance
fee based upon returns to shareholders. The incentives are designed
to encourage significant dividend payments to shareholders and a
NAV performance that would equate to a historic top decile industry
ranking, before any performance fee payment is made. Therefore, if
by the end of a financial year, aggregate distributions of 30p per
share have been declared and if the Performance Value, which is
equal to the Net Asset Value plus distributions, at that date
exceeds 130p per share, then the beneficiaries will be entitled to
an incentive equal to 20% of the excess of such Performance Value
over 100p per share. If, on a subsequent financial year end, the
performance of the Company falls short of the performance of the
Company on the previous financial year end, the beneficiaries will
not be entitled to any incentive. If, on a subsequent financial
year end, the performance of the Company exceeds the previous
performance of the Company, the beneficiaries will be entitled to
20% of such excess.
At 30 September 2009 there was no amount due under the incentive
schemes.
In addition to the audit fees above, an amount of GBP3,000 was
settled by Acuity Capital in relation to the period to 30 September
2010.
The purchases and sales proceeds figures above include
transaction costs of GBPnil (2009: GBPnil) and GBP5,000 (2009:
GBP5,000) respectively.
All investments are designated as fair value through profit or
loss on initial recognition; therefore all gains and losses arise
on investments designated as fair value through profit or loss.
C Shares
C Share issues are used for fund raisings by the Company in
order to enable shares to be issued at a consistent price to all
applicants, rather than by reference to a net asset value per share
which may fluctuate over the period of the offer; and ensure that
existing ordinary shareholders are not disadvantaged by the
dilution of a mature investment portfolio through a large injection
of cash and near cash assets.
Management of Capital
The Capital of the Company is managed in accordance with the
Company's investment objective, detailed in the Investment Strategy
detailed on page 2.
The Company does not have any externally imposed capital
requirements.
As at 30 September 2010, reserves distributable by way of a
dividend amounted to GBP28,988,000 (2009: GBP29,445,000),
comprising the revenue reserve and special reserve.
As at 30 September 2010 there were no reserves to distribute as
a dividend (2009: Nil)
20. Geographical Analysis
The operations of the Company are wholly in the United
Kingdom.
21. Transactions with the Investment Manager
During the year ended 30 September 2010 the fees payable to
Acuity Capital, the Investment Manager, totalled GBP1,089,000
(2009: GBP924 000), with GBP881,000 relating to fees chargeable for
the year. At 30 September 2010, the Company owed GBPnil (2009:
GBP340,000) to the Investment Manager. Amounts due from the
Investment Manager at 30 September 2010 were GBP200,000 (2009:
GBPnil). Details of the Investment Manager's fee arrangements are
included in Note 2.
Notice is hereby given that the 2011 Annual General Meeting of
Acuity Growth VCT Plc will be held on 10 March 2011 at 9.00 am to
be held at Osborn Clarke, 1 London Wall, City of London, EC2Y 5BD
for the purpose of considering and, if thought fit, passing the
following Resolutions (of which, Resolutions 1 to 6 will be
proposed as Ordinary Resolutions and Resolutions 7 and 8 will be
proposed as Special Resolutions):
Ordinary Resolutions
1 To receive, consider and adopt the Reports of the Directors
and Auditors and the Company's Accounts for the year ended 30
September 2010.
2 To approve the Directors' Remuneration Report for the year
ended 30 September 2010.
3 To re-elect Mr R Pennant-Rea as a Director of the Company.
4 To re-appoint KPMG Audit Plc as Auditors of the Company to
hold office until the conclusion of the next general meeting at
which accounts are laid before the members.
5 To authorise the Directors to fix the remuneration of the
Auditors.
6 THAT for the purposes of section 551 of the Companies Act 2006
(the "Act") (and so that expressions used in this resolution shall
bear the same meanings as in the said section 551):
(a) the Directors be and are generally and unconditionally
authorised to exercise all powers of the Company to allot shares
and to grant such subscription and conversion rights as are
contemplated by sections 551(1)(a) and (b) of the Act respectively
up to an aggregate nominal amount of GBP183,908.42 to such persons
and at such times and on such terms as they think proper during the
period expiring at the conclusion of the Company's Annual General
Meeting in 2012; and
(b) the Company be and is hereby authorised to make prior to the
expiry of such period any offer or agreement which would or might
require such shares or rights to be allotted or granted after the
expiry of the said period and the Directors may allot such shares
or grant such rights in pursuance of any such offer or agreement
notwithstanding the expiry of the authority given by this
resolution;
so that all previous authorities of the Directors pursuant to
section 551 of the Act and are hereby revoked.
Special Resolutions
7 THAT, subject to the passing of Resolution 6, the Directors be
and are empowered in accordance with section 570 of the Act to
allot equity securities (as defined in section 560(1) and 560(2) of
the Act) for cash pursuant to the authority conferred on them to
allot such shares or grant such rights by that resolution as if
section 561(1) of the Act did not apply to the allotment, provided
that the power conferred by this resolution shall be limited
to:
(a) the allotment of equity securities in connection with an
issue or offering in favour of holders of equity securities and any
other persons entitled to participate in such issue or offering
where the equity securities respectively attributable to the
interests of such holders and persons are proportionate (as nearly
as may be) to the respective number of equity securities held by or
deemed to be held by them on the record date of such allotment,
subject only to such exclusions or other arrangements as the
Directors may consider necessary or expedient
to deal with fractional entitlements or legal or practical
problems arising in connection with the laws of, or requirements
of, any recognised regulatory body or stock exchange in, any
territory; and
(b) the allotment, otherwise than pursuant to sub-paragraph (a)
above, of equity securities up to an aggregate nominal value not
exceeding GBP55,172.53
(i) and this power, unless renewed, shall expire at the
conclusion of the Company's Annual General Meeting in 2012 but
shall extend to the making, before such expiry, of an offer or
agreement which would or might require equity securities to be
allotted after such expiry and the Directors may allot equity
securities in pursuance of such offer or agreement as if the
authority conferred hereby had not expired.
8 THAT the Company be and is hereby generally and
unconditionally authorised in accordance with Section 701 of the
Companies Act 2006 (the "Act") to make market purchases (within the
meaning of Section 693(4) of the Act) of Ordinary Shares of 1p each
in the capital of the Company ("Ordinary Shares") and C Shares of
1p each in the capital of the Company ("C Shares"), provided
that:
(a) the maximum number of Ordinary Shares hereby authorised to
be purchased is such number of Ordinary Shares as is equal to 14.9%
of the total number of Ordinary Shares in issue from time to time
and the maximum number of C Shares hereby authorised to be
purchased is such number of C Shares as is equal to 14.9% of the
total number of C Shares in issue from time to time;
(b) the minimum price (exclusive of expenses) which may be paid
for an Ordinary Share or for a C Share shall be 1p;
(c) the maximum price (exclusive of expenses) which the Company
may pay for each Ordinary Share or C Share cannot be more than the
higher of:
(i) 105% of the average market value of an Ordinary Share or C
Share (as defined by reference to the middle market quotations for
such shares taken from The London Stock Exchange Daily Official
List) for the five business days prior to the day on which the
Ordinary Share or C Share is contracted to be purchased; and
(ii) the value of an Ordinary Share or C Share calculated on the
basis of the higher of the price quoted for: (a) the last
independent trade of; or (b) the highest current independent bid
for, any number of the Ordinary Shares or C Shares on the trading
venue where the purchase is carried out;
(d) unless previously renewed or revoked, the authority hereby
conferred shall expire on the earlier of 9 June 2012 and the
conclusion of the Company's Annual General Meeting in 2012 save
that the Company may, prior to such expiry, enter into a contract
to purchase Ordinary Shares or C Shares which will or may be
completed or executed wholly or partly after such expiry.
By order of the Board of Directors
Acuity Capital Management Limited
Secretary
Registered Office:
Paternoster House
65 St Paul's Churchyard
London EC4M 8AB
31 January 2011
Notes
A Holders of Ordinary and/or C Shares, or their duly appointed
representatives, are entitled to attend and vote at the Annual
General Meeting (the "Meeting" or the "AGM"). Shareholders are
entitled to appoint a proxy to exercise all or any of their rights
to attend and speak and vote on their behalf at the Meeting. A
shareholder can appoint the Chairman of the Meeting or anyone else
to be his/her proxy at the Meeting. A proxy need not be a
shareholder. More than one proxy can be appointed in relation to
the AGM provided that each proxy is appointed to exercise the
rights attached to a different share or shares held by that
shareholder. To appoint more than one proxy, the Proxy Form should
be photocopied and completed for each proxy holder (or you may
contact the Registrars to obtain additional proxy forms). The proxy
holder's name should be written on the Proxy Form together with the
number of Ordinary Shares and/or C Shares in relation to which the
proxy is authorised to act. Please also indicate if the proxy
instruction is one of multiple instructions being given. All Proxy
Forms must be signed and to be effective, must be lodged with
Capita as set out in Note B below.
B A Form of Proxy is provided. To be effective, the Form of
Proxy and any power of attorney under which it is executed (or a
duly certified copy of such power) must reach the Company's
Registrars, Capita Registrars, P.O. Box 25, Beckenham, Kent BR3
4BR, not less than 48 hours before the time of the Meeting or
adjourned Meeting or (in the case of a poll taken otherwise than at
or on the same day as the Meeting or adjourned Meeting) not less
hat 24 hours before the time appointed for the taking of the poll
at which it is to be used. Completion and return of the Form of
Proxy will not prevent a member from attending and voting at the
Meeting. You can also deliver by hand during normal business hours
to The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU.
C In accordance with Regulation 41 of the Uncertificated
Securities Regulations 2001, only those holders of Ordinary Shares
and or C Shares entered on the register of members of the Company
as at 6.00pm on 8 March 2011 (the "Specified Time") shall be
entitled to attend and vote at the Meeting in respect of the number
of Ordinary Shares and or C Shares registered in their name at that
time. Changes to entries on the register of members after the
Specified Time shall be disregarded in determining the rights of
any person to attend and vote at the Meeting.
D If the Meeting is adjourned to a time not more than 48 hours
after the Specified Time applicable to the original Meeting, that
time will also apply for the purposes of determining the
entitlement of members to attend and vote (and for the purposes of
determining the number of votes they may cast) at the adjourned
Meeting. If, however, the Meeting is adjourned for a longer period,
then to be so entitled, members must be entered on the Company's
register of members at a time which is not more than 48 hours
before the time fixed for the adjourned Meeting or, if the Company
gives notice of the adjourned Meeting, at the time specified in
that notice.
E If you are a person nominated to enjoy information rights in
respect of the Company pursuant to section 146 of the Companies Act
2006, you should be aware that you may have a right under an
agreement between yourself and the member who nominated you to be
appointed, or to have someone else appointed, as a proxy entitled
to attend and speak and vote at the Meeting. You are advised to
contact the member who nominated you for further information on
this and the procedure for appointing any such proxy. If you have
no right to be appointed, or to have someone else appointed, as a
proxy for the Meeting, or you do not wish to exercise such right,
you may still have the right under an agreement between yourself
and the member who nominated you to give instructions to the member
as to the exercise of voting rights at the Meeting. You are advised
to contact the member who nominated you for further information on
this.
F In order to facilitate voting by corporate representatives at
the AGM, arrangements will be put in place at the AGM so that: (i)
if a corporate
shareholder has appointed the Chairman of the Meeting as its
corporate representative to vote on a poll in accordance with the
directions of all of the other corporate representatives for that
shareholder at the Meeting, then on a poll those corporate
representatives will give voting directions to the Chairman and the
Chairman will vote (or withhold a vote) as corporate representative
in accordance with those directions; and (ii) if more than one
corporate representative for the same corporate shareholder attends
the Meeting but the corporate shareholder has not appointed the
Chairman of the Meeting as its corporate representative, a
designated corporate representative will be nominated, from those
corporate representatives who attend, who will vote on a poll and
the other corporate representatives will give voting directions to
that designated corporate representative. Corporate shareholders
are referred to the guidance issued by the Institute of Chartered
Secretaries and Administrators on proxies and corporate
representatives (www.icsa.org.uk) for further details of this
procedure. The guidance includes a sample form of appointment
letter if the Chairman is being appointed as described in (i)
above.
G The following documents will be available for inspection at
the registered office of the Company during usual business hours on
any weekday (Saturdays and public holidays excepted) from the date
of this notice until the close of the Annual General Meeting and
will be available at the place of the Annual General Meeting from
8.00am until the conclusion of the Meeting:
(a) the Memorandum and current Articles of Association of the
Company; and
(b) the terms and conditions of appointment of all
Directors.
H The total number of issued Ordinary Shares and C Shares in the
Company on 31 January 2011, which is the latest practicable date
before the publication of this document, is 54,394,938 Ordinary
Shares and 777,589 C Shares carrying one vote each. The Company has
not granted any options over shares in the Company or issued any
warrants in the Company.
I Short biographical details of all of the Directors are
contained in the Report & Accounts for the year ended 30
September 2010 on page 15.
If you have sold or otherwise transferred all your Shares in
Acuity Growth VCT Plc, you should pass this document and other
relevant accompanying documents, to the purchaser or transferee or
to the stockbroker, bank or other agent through whom the sale or
transfer was made, for transmission to the purchaser or
transferee.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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