27th May 2010 16:13
THE INCOME & GROWTH VCT PLC
Half-Yearly Results for the six months ended 31 March 2010
27 May 2010
Investment Objective
The objective of The Income & Growth VCT plc ("I&G VCT" or "the Company") is toprovide investors with an attractive return, by maximising the stream ofdividend distributions from the income and capital gains generated by a diverseand carefully selected portfolio of investments.
The Company invests in companies at various stages of development. In some instances this may include investments in new and secondary issues of companies which may already be quoted on the Alternative Investment Market ("AiM") or PLUS.
Financial Highlights
The assets of the `O' and 'S' Share Funds were merged to form one share classof Ordinary Shares on 29 March 2010 following Shareholder approval on 26 and 29March 2010. As a consequence, the net assets of the merged VCT are £35.7million
Over the 6 month period, the highlights were:-
- Prior to the merger, dividends of 2p per `O' Share and 0.5p per `S' Share
were paid on 17 March 2010.
- Strong liquidity has been maintained despite continuing market volatility
- Increase of 2.1% in `O' Share Fund total return to shareholders over the six
month period (net asset value (NAV) basis) - Increase of 1.6% in `S' Share Fund total return to shareholders over the six month period (NAV basis) Performance Summary
The net asset value of the new class of Ordinary Shares is 94.2 pence at 31 March 2010.
To help shareholders in each former share class understand the performance oftheir investment, comparative data for each former share class is shown below:- Net asset value Cumulative NAV total return per Share (NAV) dividends paid per to shareholders (p) share (p) since launch per Share (p) `O' Share Fund As at 31 March 2010* 71.4 22.5 93.9 As at 30 September 71.5 20.5 92.02009 As at 30 September 83.6 16.5 100.12008 `S' Share Fund As at 31 March 2010* 94.2 0.5 94.7 As at 30 September 93.2 0.0 93.22009 As at 30 September 94.6 0.0 94.62008
* This data shows the return on an initial subscription price of 100p at the date of inception of each Fund
Illustration of performance of original share funds
Whilst the Company now has a single share class the table below shows the totalNAV shareholder returns at 31 March 2010 of an initial investment of £10,000 ateach Fund's inception by `O' and `S' Fund Shareholders subscribing for 10,000shares at £1 each.Fund Original investment* Number of NAV at Dividends NAV total (10,000 shares at £1 shares held received return each) post-merger 31 March 2010 `O' Share £10,000 7,578 £7,139 £2,245 £9,384Fund `S' Share £10,000 10,000 £9,420 £50 £9,470Fund * Before deducting income tax benefits of £2,000 and up to £4,000 of CapitalGains Tax (CGT) deferral for an `O' Share Fund investor, and up to £4,000 ofincome tax benefit for an `S' Share Fund investor.The merger was effected by converting the relevant `O' Shares into `S' Shares.All the `S' Shares in issue were then redesignated as Ordinary Shares. Furtherdetails explaining the basis of the merger of the two share classes can befound in Note 9 to the Half-Yearly accounts below.
As at the date of the merger, `O' Shares were trading at a discount of 32.1% to NAV while the `S' Shares were trading at a premium of 1.5% to NAV.
The difference in discounts primarily reflects that the `S' Shares are stillwithin the 5 year period that shareholders have to have held them in order toretain the relevant income tax reliefs.Upon merging into the one share class, the discount to NAV of the new OrdinaryShares became 21.4% at 31 March 2010, which represents the approximate averagediscount of the two Funds, taking into account their relative size. The Boardwill continue to pursue a share buyback policy and anticipates a significantnarrowing of this discount over time.
Chairman's Statement
I am pleased to present the Company's Half-Yearly Report for the six months ended 31 March 2010.
The last six months have been dominated by the continuing problems in theglobal economy. In the UK, economic problems were overshadowed by theuncertainty surrounding the outcome of the General Election in the UK. Therewere signs earlier in 2010 that confidence may be returning but this month hasbrought increased volatility and uncertainty.
Share Class Merger
I am pleased to report that the Company has successfully achieved a simplersingle share class structure. All the Resolutions which were proposed at theExtraordinary General Meeting of the Company held on 26 March 2010 and at theseparate class meetings held on 29 March 2010 were duly passed. For furtherinformation on the mechanics of the merger please see Note 9 in the Notes tothe Accounts below.
Following this Share Merger, there were in aggregate 38,008,712 Ordinary Shares in issue. Application was made for the existing listings of the Company's shares to be amended and that amendment became effective on 30 March 2010.
Economic Background
* In late April financial markets were caught in a two-way pull as worries
over Greece and several other eurozone members vied with mounting evidence
of US corporate strength. The deeply troubled Greek economy gave a last
gasp as nervous investors finally gave up on the country and offloaded its
government bonds. As a consequence, Greece's borrowing costs rose to their
highest level in more than a decade amid fears its sovereign debt crisis
would deteriorate further and infect several of the other southern European
nations including Ireland.
* In the United Kingdom, economic data from the Office for National
Statistics showed that Britain's recovery almost ground to a halt in the
first quarter of the year with unexpectedly slow growth of 0.2%. This means
that the outlook will continue to remain decidedly unsure. Some senior
economists are suggesting that the global economy is in uncharted territory
and that the economic environment is likely to continue to feel far from
normal for some time. There is widespread debate and uncertainty as to the
best `cure' for the UK and, indeed, the global economies. Nervousness about
the possibility of a `Hung' Parliament merely added to the uncertainty. In the event, the financial doubts and uncertainty arising from the Hung Parliament were overshadowed by the wider European fiscal problems.
Performance
Future performance data will be reported for the single share class. However,the Board also intends in future to provide data for each Shareholder Fund, bycalculating both the net asset value and share price total shareholder returneach class of shareholder has received from an original subscription of £10,000, so as to be consistent with data already reported for previous periods.This should enable shareholders to monitor the performance of their investmenton a consistent basis from now on and in respect of the period since originalinvestment.`O' SharesOn the basis outlined above, the Company has maintained its NAV per `O' Shareat 71.4p at 31 March 2010 (30 September 2009: 71.5p). This compares withincreases of 0.6% in the capital return of the FTSE SmallCap Index and 9.8% inthe capital return of the FTSE AiM All-Share Index during the same period. TheNAV Total Return per `O' Share rose in the six month period by 2.1%.
Cumulative dividends paid to date have amounted to 22.5p per `O' Share.
`S' Shares
At 31 March 2010 the NAV per `S' Share was 94.2 pence (30 September 2009: 93.2p), an increase of 1.1%. The NAV Total Return per `S' Share rose in the six month period by 1.6%.
Cumulative dividends paid to date have amounted to 0.5p per `S' Share.
Portfolio
The performance of the portfolio overall over the this six month period hasoffered encouragement with several companies, notably DiGiCo Europe Limited,Amaldis (2008) Limited, MC440 Limited ("Westway Cooling") and Focus PharmaHoldings Limited showing good results. Those companies in the weaker sectors inthis recession have shown perhaps surprising resilience and are demonstratingsigns of a return to growth.In December 2009, the Company invested £1 million into CB Imports Group Limited("Country Baskets") an importer and distributor of artificial flowers, floralsundries and home d©cor products. The investment was made through theacquisition vehicle Calisamo Management Limited in which the Company had anexisting investment. In the same month, a new investment of £1 million was madeinto Iglu.com Holidays Limited, an on-line ski and cruise travel agent. Theinvestment was made through the acquisition vehicle Barnfield ManagementInvestments Limited.The Company also made two follow-on investments during the period. These were afurther loan stock investment of £90,909 into British International HoldingsLimited in November 2009 and, in December 2010, as part of a re-financing andRights Issue the Company invested a further £421,688 as equity and loan stockinto HWA Group Limited ("Holloway White Allom").Of considerable note and importance considering the recession we are in, theCompany disposed of its entire investment in PastaKing Holdings Limited to NBGIPrivate Equity for net proceeds of £793,853. This realisation contributed tototal proceeds of £955,042 to the Company over the life of the investment,representing a multiple of 3.27 to the Company's original investment of £292,405.In October 2009, Westway Cooling repaid £47,761 of its loan stock. Since theoriginal investment in June 2009 Westway Cooling has already repaid a total of£68,532 ahead of expectations. Then in December 2009, DiGiCo Europe Limitedmade a repayment of its loan stock of £142,804. During the same month, DCGGroup Limited also made a loan stock repayment of £54,978.
Cash available for investment
* Cash and liquidity fund balances as at 31 March 2010 amounted to some £14.4
million. During this economic turmoil, both the Board and the Manager have
continued to work hard to ensure that our cash deposits remain as secure as
possible. We have for some time been spreading our significant cash
deposits with a number of the leading global cash funds rather than
depositing direct to individual banks, thereby reducing our exposure to any
one particular bank. However, the current low level of interest rates on
cash deposits means it will continue to be difficult for the Company to pay
dividends from income. Shareholders are being asked to approve a change in
Investment Policy relating to the funds awaiting investment. This would
allow the Company to consider a wider range of alternatives in the future
should a suitable situation occur. However, the Board and Manager both
strongly believe that at this time the security and protection of capital
is more important than striving for a small increase in deposit rates at the cost of much higher risk. We will continue to keep this situation closely under review.
Revenue Account
The revenue return for the Company over the six months to 31 March 2010 was aloss of £173,592 (2009: £176,775 profit). This is the result of the continuedhistorically low interest rates, falls in loan stock income (as several loanshave been realised since last year), some exceptional dividend income last yearwhich has not been repeated this period, and exceptional costs (ofapproximately £55,000) incurred in the merging of the share classes. Somesmaller cost savings arising from the merger are expected to emerge during thesecond half of the year. In the light of present interest rate levels,dividends arising from revenue are likely to be severely limited in the shortterm.Dividend Investment Scheme`O' Shares
236 'O' Fund Shareholders, who between them held a total of 2,769,439 'O' Shares representing 8.0% of the Fund were issued 112,768 'O' Shares on 18 March 2010 in respect of the Dividend of 2 pence per share paid to 'O' Fund Shareholders on 17 March 2010. The issue price of 49.14 pence per share was equal to 70% of the latest published NAV per share adjusted for the dividend.
`S' Shares
140 'S' Fund Shareholders, who between them held a total of 1,272,814 'S'Shares representing 10.8% of the Fund were issued 6,674 'S' Shares on 18 March2010 in respect of the Dividend of 0.5 pence per share paid to 'S' FundShareholders on 17 March 2010. The issue price of 94.5 pence per share wasequal to the Official List for the five business days immediately preceding
thepayment date.The SchemeThe Dividend Investment Scheme ("the Scheme") is open to all Shareholders whohave the opportunity to re-invest their dividends into new ordinary shares inthe Company. Ordinary shares issued pursuant to the Scheme will, subject to anindividual shareholder's particular circumstances, attract the VCT tax reliefsapplicable for the tax year in which the shares are allotted (currently 30% forinvestments up to £200,000 in any one tax year). The issue price will be thehigher of the average of the middle market price for the Company's Shares takenfrom the London Stock Exchange Daily Official List for the five business daysimmediately preceding the payment date and 70% of the latest published NAV pershare as at the dividend payment date. Copies of the Scheme Rules are availableon Company's website, www.incomeandgrowthvct.co.uk, and personalisedapplication forms can be obtained from the Company's Registrars, CapitaRegistrars, tel: 0871 664 0300. Shareholders should return their applicationforms to Capita Registrars at the address given on the forms so as to arrive nolater than 15 days before the payment date in respect of a particular dividendto ensure that they qualify to receive that specific dividend and futuredividends as shares. Shareholders need only to complete the application formonce to join the Scheme.Share buy-backs * `O' Shares
* During the six months ended 31 March 2010, the Company bought back 369,937
`O' Shares (representing 1.1 per cent of the `O' Shares in issue at the
beginning of the period) at a total cost of £175,456 (inclusive of
expenses). A further 78,742 Ordinary Shares were bought back on 31 March
2010 following the merger at a total cost of £50,455. These shares were
subsequently cancelled by the Company. * `S' Shares * No `S' Shares were bought back during the period ended 31 March 2010.
Outlook
These are uncertain times in both the political and economic arena, but itremains important not to lose sight of the fact that against this backdrop amore encouraging picture is presented by the many individual company resultsthat are beating analysts' expectations. Although it may take some time for thesmoke to clear, there is a growing opinion that the US economy may have turnedthe corner.
* Against this backdrop, the Company has retained a significant cash
position. Moreover, the merger of the `O' and `S' Shares has enabled the
Company to be able to use its combined cash balance to better advantage.
This position continues to place the Company in an excellent position to
take advantage of what are expected to be increasingly attractive purchase
opportunities which should become available as the economy climbs out of
recession. Therefore, while short term valuations are likely to be subject
to continuing pressures, your Board still expects to see attractive
investment opportunities and a recovery in performance and portfolio values
over the longer term. * The current level of interest rates in the United Kingdom means that it will be difficult for the Company to pay a dividend from revenue in the
forthcoming year. The market view currently is that interest rates are not
expected to rise from this historic low until the fourth quarter of 2010 at
the earliest. It is also too early to say whether and/or at what level it will be possible for the Company to pay further dividends from capital reserves.
Once again, I would like to take this opportunity to thank Shareholders for their continued support.
Colin HookChairman
Principal risks and uncertainties, Related Party Transactions, Responsibility Statement and Cautionary Statement
Principal risks and uncertainties
In accordance with D.T.R 4.2.7, the Board confirms that the principal risks anduncertainties facing the Company have not materially changed since thepublication of the Annual Report and Accounts for the year ended 30 September2009. The Board acknowledges that there is regulatory risk and continues tomanage the Company's affairs in such a manner as to comply with section 274Income Tax Act 2007. The principal risks faced by the Company are:- economic risk; - investment and strategic risk; - regulatory risk (including VCT status); - financial and operating risk;
- market risk; - asset liquidity risk; - market liquidity risk; - credit/counterparty risk.
A more detailed explanation of these can be found in the Directors' Report onpages 26 - 27 and in Note 20 on pages 77 - 82 of the Annual Report and Accountsfor the year ended 30 September 2009 copies of which are available on the VCT'swebsite: www.incomeandgrowthvct.co.uk.
Related Party Transactions
Details of related party transactions in accordance with Disclosure and Transparency Rule 4.2.8 can be found in Note 12 to the Accounts below.
Responsibility Statement
In accordance with DTR 4.2.10 the Directors confirm that to the best of their knowledge:
the condensed set of financial statements, which has been prepared in accordance with the statement, "Half-Yearly Reports", issued by the Accounting Standards Board, gives a true and fair view of the assets, liabilities, financial position and profit of the Company, as required by Disclosure and Transparency Rule (DTR) 4.2.4; and
the interim management report, included within the Chairman's Statement,
Investment Policy, Investment Portfolio Summary and the Investment Manager's Review includes a fair review of the information required by DTR 4.2.7 being an indication of the important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements.
a description of the principal risks and uncertainties facing the Company
for the remaining six months is set out above, in accordance with DTR 4.2.7; and the financial statements include a description of the related party
transactions in the first six months of the current financial year that
have materially affected the financial position or performance of the
Company during the period, and any material changes to the related party
transactions since the last Annual Report, in accordance with DTR 4.
Cautionary Statement
This report may contain forward looking statements with regards to thefinancial condition and results of the Company, which are made in the light ofcurrent economic and business circumstances. Nothing in this report should beconstrued as a profit forecast.On behalf of the BoardColin HookChairmanInvestment PolicyThe Company's policy is to invest primarily in a diverse portfolio of UKunquoted companies. Investments are structured as part loan and part equity inorder to receive regular income and to generate capital gains from trade salesand flotations of investee companies.
Investments are made selectively across a number of sectors, primarily in management buyout transactions (MBOs) i.e. to support incumbent management teams in acquiring the business they manage but do not yet own. Investments are primarily made in companies that are established and profitable.
The Company has a small legacy portfolio of investments in companies from itsperiod prior to 30 September 2008, when it was a multi-manager VCT. Thisincludes investments in early stage and technology companies and in companiesquoted on the AiM or PLUS.
Uninvested funds are held in cash and lower risk money market funds.
UK companies
The companies in which investments are made must have gross assets of no morethan £15 million in respect of funds raised prior to 6 April 2006 and £7million in respect of funds raised after this date at the time of investment tobe classed as a VCT qualifying holding.
VCT regulation
The investment policy is designed to ensure that the Company continues toqualify and is approved as a VCT by HM Revenue & Customs ("HMRC"). Amongstother conditions, the Company may not invest more than 15% of its investmentsin a single company and must have at least 70% by value of its investmentsthroughout the period in shares or securities comprised in VCT qualifyingholdings, of which a minimum overall of 30% by value must be ordinary shareswhich carry no preferential rights. In addition, although the Company caninvest less than 30% of an investment in a specific company in ordinary sharesit must have at least 10% by value of its total investments in each VCTqualifying company in ordinary shares which carry no preferential rights.
Asset mix
The Company initially holds its funds in a portfolio of readily realisable interest-bearing investments and deposits. The investment portfolio of qualifying investments is built up over a three year period with the aim of investing and maintaining at least 70% of net funds raised in qualifying investments.
Risk diversification and maximum exposures
Risk is spread by investing in a number of different businesses acrossdifferent industry sectors. To reduce the risk of high exposure to equities,each qualifying investment is structured using a significant proportion of loanstock (up to 70% of the total investment in each VCT qualifying company).Initial investments in VCT qualifying companies are generally made in amountsranging from £200,000 to £1 million at cost. No holding in any one company willrepresent more than 10% of the value of the Company's investments at the timeof investment. Ongoing monitoring of each investment is carried out by theInvestment Manager, generally through taking a seat on the board of each VCTqualifying company.Co-investmentThe Company aims to invest in larger, more mature unquoted companies throughinvesting alongside the four other VCTs advised by the Investment Manager witha similar investment policy. This enables the Company to participate incombined investments advised on by the Investment Manager of up to £5 million.
Investment Portfolio Summary
as at 31 March 2010 Total cost at Valuation at Additional Valuation at 31 March 2010 30 September investments 31 March 2010 2009 in the (unaudited) (audited) period (unaudited) £ £ £ £ Camwood Limited 1,028,181 1,013,233 - 1,961,818 Provider of software repackaging services
Image Source Group Limited 305,000 2,259,232 -
1,959,369 Royalty free picture library Amaldis (2008) Limited 80,313 1,586,734 - 1,866,587(Original Additions) Manufacturer and distributor of beauty products DiGiCo Europe Limited 371,291 1,131,870 - 1,086,451
Designer and manufacturer
of audio mixing desks
ATG Media Holdings Limited 1,000,000 1,000,000 -
1,040,948 Publisher and online
auction platform operator IGLU.com Holidays Limited 1,000,000 - 1,000,000
1,000,000 Online ski and cruise travel agent Apricot Trading Limited 1,000,000 1,000,000 - 1,000,000
Company seeking to acquire businesses in the marketing
services and media sector
Aust Construction Investors 1,000,000 1,000,000 -
1,000,000Limited
Company seeking to acquire
businesses in the construction sector CB Imports Group Limited 1,000,000 1,000,000 - 1,000,000
(Country Baskets) (formerly
Calisamo Management Limited)
Importer and distributor of artificial flowers, floral sundries and home dec³r
products MC440 Limited (Westway 490,654 559,186 - 982,923Cooling)
Installation, service and
maintenance of air conditioning systems IDOX plc 872,625 796,250 - 939,167 Provider of document storage systems VSI Limited 245,596 794,146 - 885,759
Provider of software for CAD and CAM vendors Youngman Group Limited 1,000,052 700,992 -
700,992
Manufacturer of ladders and
access towers Tikit Group plc 500,000 595,651 - 643,477 Provider of consultancy services and software solutions for law firms Focus Pharma Holdings 516,900 525,858 - 621,179Limited
Licensor and distributor of
generic pharmaceuticals British International 590,909 359,765 90,909 562,998Holdings Limited
Helicopter service operator
Monsal Holdings Limited 471,605 353,704 - 477,618 Supplier of engineering
services to water and waste
sectors Blaze Signs Holdings 1,338,500 132,589 - 443,855Limited
Manufacturer and installer
of signs
HWA Limited (Holloway White 456,241 1,457,407 421,688
425,284Allom) Specialist contractor in
the high-value residential
and heritage property refurbishment market Brookerpaks Limited 55,000 324,447 - 404,547
Importer and distributor of
garlic and vacuum-packed vegetables Vectair Holdings Limited 215,914 375,136 - 377,436
Designer and distributor of
washroom products
Aquasium Technology Limited 700,000 564,739 -
344,533 Design, manufacture and marketing of bespoke
electron beam welding and vacuum furnace equipment
Racoon International 550,852 79,496 - 236,378Holdings Limited Supplier of hair extensions, hair care products and training
Biomer Technology Limited 137,170 226,585 -
226,585
Developer of biomaterials
for medical devices Letraset Limited 650,000 - - 219,150 Manufacturer and
distributor of graphic art
products
BG Consulting Group Limited 1,153,976 115,027 -
207,492/Duncary 4 Limited
Technical training business
ANT plc 462,816 275,770 - 177,281 Provider of embedded
browser/email software for
consumer electronics and internet appliances Nexxtdrive Limited 812,014 203,004 - 162,500
Developer and exploiter of
patented transmission technologies Sarantel Group plc 1,881,253 153,175 - 136,156
Developer and manufacturer of antennae for mobile phones and other wireless
devices Campden Media Limited 334,880 44,438 - 116,447 Magazine publisher and conference organiser The Plastic Surgeon 406,082 101,521 - 101,521Holdings Limited
Supplier of snagging and
finishing services to property sector DCG Group Limited 257,096 262,861 - 85,221 Design, supply and
integration of data storage
solutions Legion Group plc 150,000 53,571 - 75,000 Design, supply and installation of quality kitchens to house developers Corero plc 600,000 34,381 - 35,363 Provider of e-business technologies Alaric Systems Limited 595,802 30,647 - 30,647 Software development,
implementation and support in the credit/debit card authorisation and payments
market Oxonica plc 2,524,527 - - -
International nanomaterials
group PXP Holdings Limited 920,176 - - -(Pinewood Structures)
Designer, manufacturer and supplier of timber frames
for buildings Aigis Blast Protection 272,120 - - -Limited Specialist blast containment materials company
PastaKing Holdings Limited - 778,913 - - Manufacturer and supplier
of fresh pasta meals
Other investments in the 350,000 - -
-portfolio * --------------- --------------- ------------- --------------- Total 26,297,545 19,890,328 1,512,597 21,534,682 --------------- --------------- ------------- ---------------
* `Other investments in the portfolio' comprises Inca Interiors Limited (in administration)
Investment Manager's Review
Following the recent economic instability both in the UK and worldwide we wereencouraged in the first half of the period to see some indications that therate of new deal activity was starting to increase, leading to the completionof two new investments in the period. There continue to be many high qualitycompanies that are sufficiently attractively priced to catch our attention.However, the continuing precarious economic conditions and the doubtssurrounding the outcome of the general election meant that activity levels inthe period under review remained low. We remain cautious and selective in ourconsideration of new investments and think this caution has been a significantfactor in maintaining value in the portfolio through a very volatile period.There are signs that the economy may have stabilised in the short term but alsoconsiderable doubts as to whether this is sustainable over the longer term. Weare therefore committed to continue a highly selective approach to the newinvestment market, only seeking investments in businesses which can demonstratedefensible market strength in a fragile economic environment.As evidence that high quality investments remain in demand, the Companysuccessfully sold its investment in PastaKing, the Newton Abbot basedfoodservice company to a buy-in management team for initial proceeds of £793,853 in November. This realisation and a small final payment of £5,379 inJanuary contributed to total returns of £955,042 to the Fund throughout thelife of the investment, representing a 3.27 fold return on the Company'soriginal investment of £292,405.Two new investments were made in December. The first of these was an investmentof £1 million, using the acquisition vehicle Calisamo Management (now re-namedCB Imports Group), to support the management buy-out of Country Baskets aleading importer and distributor of artificial flowers, floral sundries,glassware, giftware, basket ware and Christmas decorations. The investmentcomprises loan stock of £825,000 and a 6% equity stake. Founded in 1990 andoperating from a national distribution centre in Leeds, the company has aturnover of circa £20 million. The company is planning to roll out furtheroutlets across the UK as part of a new growth phase to be funded by thisinvestment.The second new investment was into Iglu.com Holidays, the UK's largest onlinespecialist ski holiday operator and fastest growing cruise holiday travelagent. The investment, totalling £1 million, comprised loan stock of £848,000and an equity stake of 8.1%. Based in Wimbledon, Iglu.com is a profitable andcash generative business with a strong management team that has a successfultrack record of building a profitable niche business. The investment was madethrough the acquisition vehicle Barnfield Management Investments.
Although both of these investments have got off to a strong start and are ahead of investment plan, on balance we have retained these for the time being at cost.
Further investments were completed in November and January into BritishInternational Holdings of £90,909 by way of loan stock and HWA Group (tradingas Holloway White Allom) of £421,688. The VCT made a further investment in HWAto provide additional working capital to bridge the company's lower thanexpected revenues in 2010, arising from delays by clients in commissioningprojects. Despite its current under-performance which has resulted in a a largereduction in its valuation HWA has been a very successful investment for theVCT, returning £5 million in cash to date and we remain confident of its futureprospects.All but two investments in the MPEP invested portfolio have either maintainedor increased in value compared to the year-end. We have been working activelywith the management teams of investee companies encouraging them to take costcutting measures and looking with them at planning, forecasting and costingsystems, where appropriate, to ensure that they are as resilient as possible. Anumber of companies, notwithstanding the challenging economic conditions, haveincreased profits, many to record levels. Foremost among these are Amaldis,DiGiCo, Westway and Focus. Racoon also has shown a significant improvement inprofitability in the period and a number of investments exposed to theconstruction and housebuilding sectors are showing early indications ofimproving trading conditions. We envisage that the overall additional fundingrequired to support the portfolio will be minimal for the remainder of thefinancial year.Most of our investee companies have managed their cash flow well and remainprofitable. Some of the companies in the portfolio in particular continue to bestrongly cash generative, and amongst these Westway prepaid £68,532 of loanstock in October. DiGiCo Europe has continued to roll out new products and thishas led to sustained profit growth since investment. The company repaid afurther £142,804 of loan stock in December plus the premium due.Within the legacy Foresight portfolio there has been a strong earningsperformance from Camwood, resulting in a material increase in valuation. Thishas been due to increased market acceptance of an applications software tooldeveloped by the company over recent years.
The VCT's significant cash reserves place it in an excellent position both to capitalise on attractive new investment opportunities as they arise and to support its existing portfolio should the need arise.
Unaudited Income Statement
for the six months ended 31 March 2010
Six months ended 31 March 2010 Six months ended 31 March 2009 (unaudited) (unaudited) Notes Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ Unrealised gains/ 7 - 1,187,618 1,187,618 - (1,052,863) (1,052,863)(losses) on investments Net gains on 7 - 37,442 37,442 - 20,000 20,000realisation of investments Income 277,682 - 277,682 585,951 67,950 653,901 Investment 2 (96,270) (288,811) (385,081) (99,769) (299,305) (399,074)
management expense Other expenses (355,004) - (355,004) (259,272) - (259,272) -------------- -------------- --------------
------------ -------------- --------------
(Loss)/profit on (173,592) 936,249 762,657 226,910 (1,264,218) (1,037,308)ordinary activities before taxation Tax on profit/ 3 - - - (50,135) 50,135 -(loss) on ordinary activities -------------- -------------- --------------
------------ -------------- --------------
(Loss)/profit on (173,592) 936,249 762,657 176,775 (1,214,083) 1,037,108ordinary activities after taxation -------------- -------------- --------------
------------ -------------- --------------
Basic and diluted 6 (0.04)p (0.38)pearnings per Ordinary Share (formerly 'S' Share) Basic and diluted 6 2.22*p (2.81)pearnings per 'O' Share: Year ended 30 September 2009 (audited) Notes Revenue Capital Total £ £ £ Unrealised gains/ - (3,547,286) (3,547,286) (losses) on investments Net gains on - 597,637 597,637 realisation of investments Income 931,359 67,950 999,309 Investment 2 (192,882) (578,645) (771,527) management expense Other expenses (511,764) - (511,764) -------------- -------------- -------------- (Loss)/profit on 226,713 (3,460,344) (3,233,631) ordinary activities before taxation Tax on profit/ 3 (33,030) 33,030 - (loss) on ordinary activities -------------- -------------- -------------- (Loss)/profit on 193,683 (3,427,314) (3,233,631) ordinary activities after taxation -------------- -------------- -------------- Basic and diluted 6 (1.41)p earnings per Ordinary Share (formerly 'S' Share) Basic and diluted 6 (8.73)p earnings per 'O' Share:
\* This relates to the period up to 29 March 2010
Unaudited Balance Sheetas at 31 March 2010 31 March 2010 31 March 2009 30 September 2009 (unaudited) (unaudited) (audited) Notes £ £ £ Non-current assets Investments 7 21,534,682 23,005,554 19,890,328 Current assets Debtors and prepayments 168,229 504,760 185,876 Investments at fair value 8 14,385,083 14,747,534 15,962,070 Cash at bank 20,385 41,302 55,638 ----------------- ------------------ ----------------- 14,573,697 15,293,596 16,203,584
Creditors: amounts falling due (378,229) (107,530)
(210,815)within one year ----------------- ------------------ ----------------- Net current assets 14,195,468 15,186,066 15,992,769 ----------------- ------------------ ----------------- Net assets 35,730,150 38,191,620 35,883,097 ----------------- ------------------ ----------------- Capital and reserves 10 Called up share capital 379,300 468,618 466,309 Share premium account 369,141 11,361,834 308,614 Capital redemption 161,220 70,708 73,017reserve Revaluation reserve (4,208,921) (2,073,406) (5,279,832) Special reserve 27,059,018 17,743,304 27,952,006 Profit and loss account 11,970,392 10,620,562 12,362,983 ----------------- ------------------ ----------------- Equity shareholders' 35,730,150 38,191,620 35,883,097funds ----------------- ------------------ ----------------- Basic and diluted net asset value: per Ordinary Share 11 94.20p 94.21p 93.18p(previously 'S' Share) per 'O' Share 11 - 77.22p 71.45p
The financial information for the six months ended 31 March 2010 and the six months ended 31 March 2009 has not been audited.
Unaudited Reconciliation of Movements in Shareholders' Funds
for the six months ended 31 March 2010
Six months ended Six months ended Year ended 31 March 2010 31 March 2009 30 September 2010 (unaudited) (unaudited) (audited) Notes £ £ £ Opening shareholders' 35,883,097 40,791,712 40,791,712funds Net share capital 10 (164,190) (144,725) (256,925)(bought back)/ subscribed for in the period Profit/(Loss) for the 762,657 (1,037,308) (3,233,631)period Dividends paid in 5 (751,414) (1,418,059) (1,418,059)period ----------------- ------------------ ----------------- Closing shareholders' 35,730,150 38,191,620 35,883,097funds ----------------- ------------------ -----------------
Analysis for the period to 31 March 2010 per share class
Six months ended Six months ended Six months ended Six months ended 31 March 2010 31 March 2010 31 March 2010 31 March 2010 Total per `O' Share per `S' Share New Ordinary Shares Notes £ £ £ £ Opening 35,883,097 24,881,881 11,001,216 -shareholders' funds Net share capital (164,190) (164,190) - -(bought back)/ subscribed for in the period Profit/(Loss) for 762,657 767,073 (4,416) -the period Dividends paid in 5 (751,414) (692,438) (58,976) -period Conversion into `S' - (24,792,326) 24,792,326 -Shares ----------------- ------------------
----------------- -----------------
35,730,150 - 35,730,150 - ----------------- ------------------
----------------- -----------------
Redesignation of `S' - - (35,730,150) 35,730,150Shares as Ordinary shares ----------------- ------------------
----------------- -----------------
Closing 10 35,730,150 - - 35,730,150shareholders' funds ----------------- ------------------
----------------- -----------------
Unaudited Cash Flow Statement
for the six months ended 31 March 2010
Six months ended Six months ended Year ended 31 March 2010 31 March 2009 30 September 2010 (unaudited) (unaudited) (audited) £ £ £ Operating activities Investment income received 185,905 730,106 1,081,127 Investment management fees (381,259) (825,088) (1,200,016)paid Recoverable VAT and interest 143,757 130,470 408,305received thereon Other income 4,053 12,377 - Other cash payments (262,947) (338,927) (477,847) ----------------- ------------------ ----------------- Net cash outflow from (310,491) (291,062) (188,431)operating activities Investing activities Acquisitions of investments (1,512,597) (176,422) (735,608) Disposals of investments 1,093,303 417,400 2,215,027 ----------------- ------------------ -----------------
Net cash (outflow)/inflow from (419,294) 240,978
1,479,419investing activities Dividends Equity dividends paid (751,414) (1,418,059) (1,418,059) ----------------- ------------------ -----------------
Cash outflow before financing (1,481,199) (1,468,143) (127,071) and liquid resource management
Management of liquid resources
Increase in current 1,576,987 1,588,480 373,944investments Financing Issue of Ordinary shares 61,722 96,826 96,826 Purchase of own shares (192,763) (241,551) (353,751) ----------------- ------------------ ----------------- (131,041) (144,725) (256,925) ----------------- ------------------ ----------------- Decrease in cash for the (35,253) (24,388) (10,052)period ----------------- ------------------ -----------------
Reconciliation of profit/(loss) on ordinary activities before taxation to net cash outflow from operating activities
for the six months ended 31 March 2010
Six months ended Six months ended Year ended 30 31 March 2010 31 March 2009 September 2010 (unaudited) (unaudited) (audited) £ £ £ Profit/(loss) on ordinary 762,657 (1,037,308) (3,233,631)activities before taxation Net unrealised (gains)/losses (1,187,618) 1,052,863 3,547,286on investments Net gains on realisations of (37,442) (20,000) (597,637)investments Decrease in debtors 17,647 165,615 412,760 Increase/(decrease) in 134,265 (452,232) (317,209)creditors ----------------- ------------------ ----------------- Net cash outflow from (310,491) (291,062) (188,431)operating activities ----------------- ------------------ -----------------
Notes to the Unaudited Financial Statements
1. Principal accounting policies
The following accounting policies have been applied consistently throughout theperiod. Full details of principal accounting policies will be disclosed in
theAnnual Report.a) Basis of accountingThe unaudited results cover the six months to 31 March 2010 and have beenprepared under UK Generally Accepted Accounting Practice (UK GAAP), consistentwith the accounting policies set out in the statutory accounts for the yearended 30 September 2009 and the 2009 Statement of Recommended Practice,`Financial Statements of Investment Trust Companies and Venture Capital Trusts'("the SORP").The Half-yearly Report has not been audited, nor has it been reviewed by theauditors pursuant to the Auditing Practices Board (APB)'s guidance on Review ofInterim Financial Information.The results for the six months to 31 March 2010 reflect the activities of theCompany. On 29 March 2010, the 'O' Share Fund and the 'S' Share Fund wereconsolidated. New 'S' Shares were issued to 'O' Fund Shareholders in proportionto its net assets relative to the 'S' Share Fund. The new 'S' Shares were thenredesignated as new Ordinary Shares. Further details are contained in note 9below.
b) Presentation of the Income Statement
In order to better reflect the activities of a VCT and in accordance with theSORP, supplementary information which analyses the Income Statement betweenitems of a revenue and capital nature has been presented alongside the IncomeStatement. The revenue column of profit attributable to equity shareholders isthe measure the Directors believe appropriate in assessing the Company'scompliance with certain requirements set out in Section 274 Income Tax Act2007.
c) Investments
For investments actively traded in organised financial markets, fair value isgenerally determined by reference to Stock Exchange market quoted bid prices atthe close of business on the balance sheet date. Purchases and sales of quotedinvestments are recognised on the trade date where a contract of sale existswhose terms require delivery within a time frame determined by the relevantmarket. Purchases and sales of unlisted investments are recognised when thecontract for acquisition or sale becomes unconditional.
Unquoted investments are stated at fair value by the Directors in accordance with the following rules, which are consistent with the IPEVCV guidelines:
All investments are held at the price of a recent investment for an appropriateperiod where there is considered to have been no change in fair value. Wheresuch a basis is no longer considered appropriate, the following factors will beconsidered:
(i) Where a value is indicated by a material arms-length transaction by an independent third party in the shares of a company, this value will be used.
(ii) In the absence of i), and depending upon both the subsequent trading performance and investment structure of an investee company, the valuation basis will usually move to either:-
a. an earnings multiple basis. The shares may be valued by applying a suitable
price-earnings ratio to that company's historic, current or forecast
post-tax earnings before interest and amortisation (the ratio used being
based on a comparable sector but the resulting value being adjusted to
reflect points of difference identified by the Investment Manager compared
to the sector including, inter alia, a lack of marketability).
or:-
b. where a company's underperformance against plan indicates a diminution in
the value of the investment, provision against cost is made, as
appropriate. Where the value of an investment has fallen permanently below
cost, the loss is treated as a permanent impairment and as a realised loss,
even though the investment is still held. The Board assesses the portfolio
for such investments and, after agreement with the Investment Manager, will
agree the values that represent the extent to which an investment has
become realised. This is based upon an assessment of objective evidence of
that investment's future prospects, to determine whether there is potential
for the investment to recover in value.
(iii) Premiums on loan stock investments are accrued at fair value when the Company receives the right to the premium and when considered recoverable.
(vi) Where an earnings multiple or cost less impairment basis is not appropriate and overriding factors apply, discounted cash flow or net asset valuation bases may be applied.
2. Investment Management Expense
Six months Six months ended Year ended ended 31 March 2010 31 March 2009 30 September 2009 Ordinary `O' Share `S' Share `O' `S' Share shares Share Total Fund Fund Fund Fund £ £ £ £ £ Investment 385,081 291,016 108,058 555,088 216,439management fee The Directors have charged 75% of the fees payable under the investmentadviser's agreement, and 100% of the amounts payable under the IncentiveAgreement, to the capital reserve. The Directors believe it is appropriate tocharge the incentive fee wholly against the capital return, as any fee payabledepends on capital performance, as explained below.After the merger, the Investment Manager's Incentive Agreement for the former'O' Share Fund has been continued while the former 'S' Share Fund's IncentiveAgreement has been terminated. Under the terms of the pre-merger 'O' Share FundIncentive Agreement, each of the ongoing Investment Manager, Matrix PrivateEquity Partners LLP ("MPEP") and a former Investment Manager, Foresight GroupLLP ("Foresight") are entitled to a performance fee equal to 20% of the excessof the value of any realisation of an investment made after 30 June 2007, overthe value of that investment in an Investment Manager's portfolio at that date("the Embedded Value"), which value is itself uplifted at the rate of 6% perannum. No fee is payable in any year if the value of that Investment Manager'sportfolio at that year-end plus the cumulative value of any realisations madeup to that year-end is less than the value of that Investment Manager'sportfolio at 30 June 2007, "the High Watermark test".However, two amendments were made to this agreement for MPEP the ongoingInvestment Manager. Firstly, the High Watermark was increased by £811,430,being the 'S Share Fund's shortfall in total net assets from net asset value of£1 per 'S' Share, at 31 December 2009. Secondly, only 70% of any new investmentmade by MPEP after the merger will be added to the calculation of the EmbeddedValue and value of the Investment Manager's portfolio, for the purposes ofassessing any excess. No fee is payable for the period ended 31 March 2010.
3. Taxation
There is no tax charge for the period, as the Company has incurred taxable losses.
4. Recoverable VAT
As at 30 September 2008, the directors considered it reasonably certain thatthe Company would obtain a repayment of VAT of not less than £462,702. This wasbased upon information supplied by the Company's current and former InvestmentManagers, and discussions with the Company's professional advisors as a resultof the European Court of Justice ruling and subsequent HMRC briefing thatmanagement fees be exempt for VAT purposes. All of this amount has now beenrecovered (£124,779 was received in the period to 31 March 2010 with no amountscharged to the Income Statement in the period). The Board believe it ispossible that additional amounts of VAT will be recoverable in due course butare unable at this stage to quantify the sums involved. Once this matter hasbeen resolved, it is possible that further, relatively small amounts of VATwill be agreed as due to the Company, and recognised in these accounts.
5. Dividends on equity shares paid and payable
Six months ended Six months ended Year ended 31 March 2010 31 March 2009 30 September 2009 £ £ £ `O' Share Fund `O' Shares - final paid 696,488 1,418,059 1,418,059of 2p (31 March 2009 : 2p; 30 September 2009 : 4p) pence per share Under/(over) provision (4,050) - -re prior year OrdinaryShares (formerly 59,032 - -`S' Share Fund) Under/(over) provision (56) - -re prior year ------------------ ----------------- ----------------- 751,414 1,418,059 1,418,059 ------------------ ----------------- -----------------
6. Basic and diluted earnings and return per share
Six months ended 31 March 2010 Six months ended 31 March 2009 `O' Share `S' Share `O' Share `S' Share Fund * Fund * Total Fund Fund Total £ £ £ £ £ £ i) Total earnings 767,073 (4,416) 762,657 (992,616) (44,692) (1,037,308)after taxation: Basic earnings per 2.22 p (0.04)p (2.81)p (0.38)p share ii) Net revenue (84,695) (88,897) 132,488 44,287 from ordinary activities after taxation Revenue return per (0.24)p (0.75)p 0.38 p 0.38 p share Net unrealised 1,021,916 165,702 (1,028,110) (24,753) capital gains/ (losses) Net realised 36,403 1,039 20,000 - capital gains Income from - - 67,950 - capital dividends Recoverable VAT - - - - Capital expenses (206,551) (82,260) (184,944) (64,226) (net of taxation) -------------- -------------- --------------
-------------- -------------- --------------
iii) Total capital 851,768 84,481 (1,125,104) (88,979) return Capital return per 2.45 p 0.71 p (3.19)p (0.76)p share iv) Weighted 34,578,490 11,807,017 35,317,847 11,806,467 average number of shares in issue in the period Year ended 30 September 2009 `O' Share `S' Share Fund Fund Total £ £ £ i) Total earnings (3,067,355) (166,276) (3,233,631) after taxation: Basic earnings per (8.73)p (1.41)p share ii) Net revenue 182,551 11,132 from ordinary activities after taxation Revenue return per 0.52 p 0.09 p share Net unrealised (3,522,533) (24,753) capital gains/ (losses) Net realised 597,637 - capital gains Income from 67,950 - capital dividends Recoverable VAT - - Capital expenses (392,960) (152,655) (net of taxation) ---------------- ---------------- iii) Total capital (3,249,906) (177,408) return Capital return per (9.25)p (1.50)p share iv) Weighted 35,148,192 11,806,467 average number of shares in issue in the period Other than the performance related incentive, there are no instruments in placethat will increase the number of shares in issue in future. Accordingly, theabove figures currently represent both basic and diluted returns.
*Due to the merger taking place on 29 March 2010, it has been deemed more informative to show figures on a per share basis.
7. Summary of movement on investments during the period
Traded on AiM Unlisted or Preference Qualifying loans Total traded on PLUS Shares MARKETS £ £ £ £ £ Valuation at 1,908,798 9,000,829 25,403 8,955,298 19,890,328 30 September 2009 Purchases at cost - 245,184 2,326 1,568,177 1,815,687 Sales - proceeds - (873,539) (824) (532,118) (1,406,481) - realised gains - 27,446 - 20,084 47,530 Unrealised gains 97,645 198,227 8,333 883,413 1,187,618 ---------------- ---------------- ----------------
---------------- ----------------
Valuation at 2,006,443 8,598,147 35,238 10,894,854 21,534,682 31 March 2010 Book cost at 4,466,693 8,972,139 169,190 12,689,523 26,297,545 31 March 2010 Unrealised losses (2,460,250) (290,182) (132,062) (1,326,427) (4,208,921)at 31 March 2010 Permanent - (83,811) (1,890) (468,241) (533,942)impairment of valuation of investments ---------------- ---------------- ----------------
---------------- ----------------
2,006,443 8,598,146 35,238 10,894,855 21,534,682 Gains on investments Realised losses - 98,101 - 66,136 164,237based on historical cost Less amounts - 70,655 - 46,052 116,707recognised as unrealised losses in previous years ---------------- ---------------- ----------------
---------------- ----------------
Realised gains - 27,446 - 20,084 47,530based on carrying value at 30 September 2009 Net movement in 97,645 198,227 - 883,413 1,187,618unrealised depreciation in the period ---------------- ---------------- ----------------
---------------- ----------------
Gains on 97,645 225,673 8,333 903,497 1,235,148investments for the period ended 31 March 2010 Transaction costs of £10,088 were incurred in the period and are treated asrealised gains on investments in the Income Statement. Deducting these fromrealised gains above gives £37,442 of gains as shown in the Income Statement.8. Current asset investmentsMonies held pending 31 March 2010 31 March 2009 30 Septemberinvestment 2009 Company Company Total Total Total £ £ £ Royal Bank of Scotland 2,642,764 3,084,750 4,251,045Sterling Liquidity Fund Royal Bank of Scotland 93,725 92,983 93,515Sterling Liquidity Fund plus Blackrock Investment 2,460,113 3,131,570 3,149,166Management (UK) Institutional Sterling Fund Fidelity Institutional Cash 4,173,115 4,151,931 4,164,843Fund Prime Rate Capital 1,002,346 - -Management LLP (UK based) Scottish Widows Investment 4,013,020 4,286,300 4,303,501Partnership Sterling Liquidity Fund ---------------- ---------------- ---------------- Monies held pending 14,385,083 14,747,534 15,962,070investment ---------------- ---------------- ----------------These comprise investments in five Dublin based OEIC money market funds and oneUK based as shown in the table above. £14,291,358 (31 March 2009: £14,654,551;30 September 2009: £15,868,555) of this sum is subject to same day access,while £93,725 (31 March 2009: £92,983; 30 September 2009: £93,515) is subjectto two day access.
9. Consolidation of 'O' and 'S' Share classes
On 29 March 2010, the ordinary shares of 1p each in the capital of the Company(" 'O' Shares") were consolidated with the S ordinary shares of 1p each in thecapital of the Company (" 'S' Shares"). A proportion of the 'O' Shares wereredesignated as 'S' Shares, calculated by reference to the relative net assetvalues of each Share class as at 31 December 2009, adjusted for subsequentdividends paid to each class before the merger. The resultant 38,008,712 `S'Shares in issue, being 11,813,141 already in issue plus 26,195,571 created bythe conversion, were then re-designated as Ordinary Shares in the capital ofthe Company. The residual balance of 8,371,657 'O' Fund shares not redesignatedas 'S' shares were instead redesignated as deferred shares and bought back bythe Company for an aggregate amount of 1p, cancelled as issued and redesignatedas Ordinary Shares.The net asset values (NAV) of each Fund used for the purposes of conversion atthe calculation date of 29 March 2010, and the resultant conversion ratios intoOrdinary Shares were: NAV per share Conversion ratio applied to each 'O' Share to obtain new number of 'S' Shares 'O' Share Fund 70.20p 0.75784526 'S' Share Fund 92.63p 1.00000000
Share certificates reflecting the new shareholdings totalling 38,008,712 Ordinary Shares in the capital of the Company were sent to Shareholders on 5 April 2010.
10. Capital and reserves for the six months ended 31 March 2010
Called-up Share Capital Revaluation Special Profit &loss Total share premium redemption reserve reserve capital account reserve account £ £ £ £ £ £ £ At 1 October 466,309 308,614 73,017 (5,279,832) 27,952,006 12,362,983 35,883,0972009 Shares bought (4,487) - 4,487 - (225,911) - (225,911)back Shares issued - - - - - - - Dividends 1,194 60,527 - - - - 61,721re-invested into new shares Dividends paid - - - - - (751,414) (751,414) Loss - - - - (667,077) 667,077 -transferred between reserves Other expenses - - - - - (288,811) (288,811)net of taxation Net unrealised - - - 1,187,618 - - 1,187,618gains on investments Deferred shares (83,716) - 83,716 - - - -bought back Gains on - - - - - 37,442 37,442disposal of investments (net of transaction costs) Realisation of - - - (116,707) - 116,707 -previously unrealised appreciation Capital element - - - - - - -of VAT recoverable Loss for the - - - - - (173,592) (173,592)period --------- ---------- ------------- -------------
-------------- ------------- -------------
At 31 March 379,300 369,141 161,220 (4,208,921) 27,059,018 11,970,392 35,730,1502010 --------- ---------- ------------- -------------
-------------- ------------- -------------
11. Net asset value per share
31 March 2010 31 March 2009 30 September 2009 Ordinary Shares `O' Share `S' Share `O' Share `S' Share Total Fund Fund Fund Fund Net assets £ £ £ £ £ 35,730,150 27,068,820 11,122,800 24,881,881 11,001,216 Number of shares 37,929,970 35,055,303 11,806,467 34,824,397 11,806,467in issue Net asset value 94.20p 77.22p 94.21p 71.45p 93.18pper share Diluted net asset 94.20p 77.22p 94.21p 71.45p 93.18pvalue per share Diluted NAV per share assumes that the Investment Manager's incentive fee issatisfied by the issue of additional shares. No incentive fee is expected to betriggered for the Company for the foreseeable future.
12. Related party transactions
Christopher Moore is a shareholder in Oxonica plc ("Oxonica" in which the Company has invested £2,524,527 to the end of the year (total carrying value: £ nil). He owns 0.21% of the equity of Oxonica.
Additionally, it has been agreed that Christopher Moore will cede 128,972options into ordinary shares of Oxonica out of his options pool. These optionsare subject to performance conditions and lock in restrictions. The exerciseprice of the options is 45p. Oxonica ordinary shares are no longer listed onthe AiM and the Company's own holding has been valued at nil.
13. The financial information for the six months ended 31 March 2010 and the six months ended 31 March 2009 has not been audited.
The financial information contained in this half-yearly report does notconstitute statutory accounts as defined in Section 434 of the Companies Act2006.The financial statements for the year ended 30 September 2009 have beenfiled with the Registrar of Companies. The auditors have reported on thesefinancial statements and that report was unqualified and did not contain astatement under either section 498(2) or 498(3) of the Companies Act 2006.
14. Copies of this statement are being sent to all shareholders. Further copies are available free of charge from the Company's registered office, One Vine Street, London, W1J OAH.
THE INCOME & GROWTH VCT PLCRelated Shares:
Inc&gwth Vct