Project2 Layout 1 - ProVen VCTs€¦ · Net asset value per share 82.2 86.4 86.8 90.0 Dividends...

Managed byBeringea LLP

ProVen Growth & Income VCT plcAnnual Report and Accountsfor the year ended 29 February 2012

Growth & IncomeVCT plc

Project2_Layout 1 09/07/2012 21:00

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Contents page

Principal Investment Objectives and Financial Highlights 4Fund Overview 5Chairman’s Statement 6Investment Manager’s Review 9Investment Portfolio and Review of Investments 13Board of Directors 24Directors’ Report and Business Review 25Statement of Corporate Governance 32Directors’ Remuneration Report 36Independent Auditor’s Report 39Income Statement 41Reconciliation of Movements in Shareholders’ Funds 43Balance Sheet 44Cash Flow Statement 45Notes to the Accounts 46Shareholder Information 58Company Information 60Notice of Annual General Meeting (including the Appendix) 61Form of Proxy

ProVen Growth & Income VCT plc4

ProVen Growth & Income VCT plcPrincipal Investment Objectives

•toachieveatotalreturnsignificantlygreaterthanthatavailablefromdirectinvestmentinquotedbusinessesbyinvestinginaportfolioofcarefullyselectedsmallercompanieswithexcellentgrowthprospects;

•tominimisetheriskofeachinvestmentandtheportfolioasawhole;and

•toobtainandmaintainVCTstatusinordertosecurethesubstantialtaxbenefitsavailableforinvestmentinaVCT.

Financial Highlights

82.2p Ordinary Share net asset value pershareat29February2012

86.8p ‘D’ Share net asset value pershareat29February2012

5

Fund OverviewFinancial summary

Ordinary Shares ‘D’ Shares

As at 29 February 2012 pence

2011 pence

2012 pence

2011 pence

Netassetvaluepershare 82.2 86.4 86.8 90.0

Dividendspaidsinceshareconversion/classlaunch 4.5 – – –

Totalreturn (netassetvalueplusdividendspaidsinceshareconversion/classlaunch)

86.7 86.4 86.8 90.0

Year on year change in:

Netassetvaluepershare(adjustedfordividendspaid) 0.3% -3.6%

FTSEAllShareIndextotalreturn 1.5% 1.5%

Shareholder investment and returns analysis Thechartbelowshowstheoriginalsubscriptionprice,netcostaftertax(assumingfullincometaxreliefattheraterulingatthetimeoftheinvestment)andtotalreturn(netassetvalueanddividendspaid)foreachshareclassandtaxyearfundraising,asat29February2012.Theordinarysharefundsraisedin2011/2012wereissuedateither(1)90.6ppershare,priorto2June2011or(2)86.3ppershare,after2June2011butpriorto24August2011or(3)84.4ppershare,after24August2011.Noaccounthasbeentakenofthepossiblebenefitofanycapitalgainstaxdeferral(availablefornewinvestmentsuptoandincludingtaxyear2003/2004)orofadditionalsharesthatmayhavebeenavailablethroughearlybirdorfinancialintermediarydiscounts.

60

100105

8091 86 84

100 100

8074

5663

60 5970

200

9987

82 82

9687

0

20

40

60

80

100

120

140

160

180

200

2010/11 &2011/12 (1)

PencePer

Share

Share Class and Tax Year(s)

Ordinary

2005/06 2008/09 to2010/11

87

Ordinary Ordinary Ordinary

Subscription Price Net Cost After Tax Total Return (Dividends Paid Plus Net Asset Value)

220

Original Ordinary

Original Ordinary

Original C

2000/01 &2001/02

2007/08 &2008/09

2009/10 &2010/11

2011/12 (2)

2011/12 (3)

D


Chairman’s StatementIampleasedtopresenttheAnnualReportforProVenGrowth&IncomeVCTplcfortheyearended29February2012.

Theyearsawacontinuationofthedifficulteconomicconditions,withrenewedfearsofaEurozonecrisisfuellingmorevolatilityinstockmarketpricesandhinderingarecoveryininvestorconfidence.SomeoftheCompany’sportfoliocompanieshavebeenimpactedbythisclimate,however,anumberofthestrongerportfoliocompanieshavebeenabletomakeheadway,suchthattheOrdinarySharepoolhasbeenabletoreportanincreaseinNAVovertheyear(afteradjustingfordividendspaid).

Net asset valueOrdinary SharesAt29February2012,theCompany’sOrdinaryShareNAVstoodat82.2ppershare.Thisrepresentsanincreaseof0.3por0.3%since28February2011afteradjustingforthedividendof4.5ppersharewhichwaspaidintheyear.PerformancesinceoriginalinvestmentforthevariousgroupsofShareholdersthatnowholdOrdinarySharesissummarisedinthetableonpage5.

‘D’ SharesTheNAVoftheCompany’s‘D’Sharesstoodat86.8pat29February2012,adecreaseof3.2por3.6%since28February2011.Nodividendshavebeenpaidto‘D’Shareholderstodate.ThefallinNAVispartlyafunctionofthefactthatthe‘D’Sharepoolisstillintheprocessofbeinginvestedanduninvestedcashdoesnotprovidesufficientincometocoverrunningcosts.

Portfolio activity and valuationOrdinary Share poolHavingraisedasignificantlevelofnewfundsatthestartoftheyear,theOrdinarySharepoolhasseenareasonablelevelofinvestmentactivity.Threenewinvestmentsandthreefollow-oninvestmentswerecompletedduringtheyearatatotalcostof£2.9million.ThenewinvestmentswereCrossSolarPV,Eagle-iMusicandUtilityExchangeOnline.TheOrdinarySharepoolalsoexitedfromfourinvestments,includingCoolabiandSteakMedia,whichwasacquiredinacashtransactionandhasresultedinatotalgainof£439,000againstcost,withthepossibilityoffurtherproceedsdependentonfutureperformance.

TheBoardhasreviewedthevaluationsoftheunquotedinvestmentsattheyearendandmadeanumberofadjustmentstothepreviouscarryingvalues.Thenetmovementontheportfoliowasagainfortheyearof£88,000.FurtherdetailsareprovidedintheInvestmentManager’sReviewandtheReviewofInvestments.

‘D’ Share poolThe‘D’Sharepoolalsohasfundsavailableforinvestmentandcontinuedtomakeprogressinbuildingitsportfolioduringtheyear.Twonewinvestmentsandtwofollow-oninvestmentsweremadeatatotalcostof£610,000.

AswiththeOrdinarySharepool,theBoardhasreviewedtheunquotedvaluationsattheyearendandmadesomeadjustmentstothecarryingvalues.Thishasresultedinanetunrealisedlossof£114,000.FurtherdetailsareprovidedintheInvestmentManager’sReviewandtheReviewofInvestments.

Results Thetotal(loss)/returnonordinaryactivitiesfortheyearwasasfollows:

Revenue £’000

Capital £’000

Total £’000

Ordinary Shares 199 (77) 122

‘D’ Shares (37) (226) (263)

162 (303) (141)

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DividendsTheCompanypaidaninterimdividendof4.5pperOrdinaryShareon29July2011.TheBoardisproposingtopayafinaldividendof4.5pperOrdinaryShareinrespectoftheyearended29February2012on31August2012toOrdinaryShareholdersontheregisterat3August2012,subjecttoShareholderapprovalattheAGM.Nodividendisproposedinrespectofthe‘D’Shares.

FundraisingDuringtheyear,theCompanyraisedfundsunderitsOrdinaryShareofferforsubscriptionwhichopenedon10December2010.Theofferclosedon31October2011havingraisedgrossfundsof£10.0million.

‘D’ Shares – proposed conversion to Ordinary SharesTheBoardhasreviewedthecurrentstructureoftheCompanyandbelievestherearesignificantbenefitsforbothShareholdersandtheCompanyinmergingtheCompany’stwoshareclassestogether.HavingoneshareclasswillprovideallShareholderswithexposuretoabroaderrangeofinvestmentsandreducethepotentialimpactofunderperformanceofanyoneinvestment.Itwillalsosimplifythetaskofmanagingtheinvestments,reportingtoShareholdersandadministration.

TheBoardwillputproposalstoShareholderstoconvert‘D’SharesintoOrdinarySharesshortly.Itisproposedthatthe‘D’ShareswillbeconvertedtoOrdinarySharesbasedontherelativeNAVofeachshareclassat31August2012.Iftheseproposalsareapproved,theCompanywillhaveoneOrdinaryshareclassgoingforward.

Dividend policyThesubjectonwhichIreceivemostcorrespondenceisdividends.Inthesurveyconductedlastyear,theBoardaskedShareholderswhethertheywouldprefer(1)profitsoninvestmentdisposalstobedistributedastheyariseorfordividendstobesmoothed,and(2)distributionofthemaximumamounteachyear,evenifthisreducestheNAV,oranamountwhichmaintainsorincreasestheNAV.OftheShareholderswhoresponded,asmallmajorityofboththeOrdinaryShareholdersand‘D’Shareholdersexpressedapreferenceforrealisedprofitstobedistributedassoonaspossible.However,whenaskedifthemaximumpossibledividendshouldbepaidevenifthisreducesthenetassetvaluepershare,opinionwasalmostevenlysplit.

InanticipationofthemergeroftheOrdinaryand‘D’Shareclassesproposedforlaterthisyear,theBoardhasdecidedtoadoptaconsistentdividendpolicyforbothshareclasses.Withthediversityofopinionexpressedinthesurvey,itisimpossibletoprovideadistributionpolicywhichwillsatisfyallindividualpreferences.TheBoardhasthereforedecidedtosetanobjectiveofpayingadistributioneachyearwhichwillequatetoayieldofapproximately5%ofnetassetvalue.Theabilitytoachievethisobjectivewill,however,dependontherebeingsufficientreservesavailablefordistribution,whichinturnwilldependonthelevelandtimingofprofitablerealisations.It,therefore,cannotbeguaranteed.Intheeventoftherebeingarealisationfromtheportfoliowhichresultsinanexceptionallylargegain,theBoardmaydecidetopayaspecialdividendwhichissignificantlyinexcessofthetargetyieldof5%.

TheBoardbelievesthatthisobjectiveisconsistentwiththenetassetvaluepershareremainingbroadlystableorincreasingovertime,althoughthiswillclearlydependonthereturnsfromtheCompany’sinvestmentsandcannotbeguaranteed.

ToenableShareholderswhodonotwantdistributionstoautomaticallyreinvestdividends,theBoardhasdecidedtointroduceadividendreinvestmentscheme(“DRIS”).ShareholderswhowouldliketotakeadvantageofthisshouldcompletethemandateformenclosedwiththeseAccounts.ToprovideliquiditytoShareholderswhowishtoselltheirshares,thesharebuybackofferwillbemaintained,dependantontherebeingsufficientliquidityandsubjecttotheannuallimitof10%ofeachshareclass.

Share buybacksInordertoensureliquidityinthemarketintheCompany’sshares,theCompanyhasoperatedapolicyofbuyinginitsownsharesthatbecomeavailableinthemarket.


Duringtheyear,theCompanymademarketpurchasesof823,563OrdinarySharesforcancellationatanaveragepriceof74.0ppershareand33,097‘D’Sharesforcancellationatanaveragepriceof85.7ppershare.

TheBoardintendstocontinuetomakepurchasesofitsshareswhentheybecomeavailableinthemarketandhasacurrentpolicyofpurchasingOrdinarySharesatapriceequivalenttoa10%discounttothelatestpublishedNAVandata5%discountinrespectof‘D’Sharesinaccordancewiththepoliciessetoutintherelevantprospectuses.Iftheproposedconversionof‘D’SharesintoOrdinarySharesdescribedaboveisapprovedbyShareholders,theCompanywillonlyhaveOrdinarySharesinissuefollowingtheconversion.Thediscountof10%toNAVwillthenapplytoallsharebuybacks.

AspecialresolutiontoallowtheBoardtocontinuetopurchasesharesforcancellationwillbeproposedattheforthcomingAGM.

ShareholderswhoareconsideringsellingtheirsharesareremindedthattheCompany’sAdministrator,DowningLLP,isabletoprovidedetailsofcloseperiodsandofthepricesatwhichtheCompanyhasboughtinshares.Contactdetailscanbefoundonpage60.

Shareholdersmaybeawareof“enhancedsharebuyback”schemesthathavebeenofferedbysomeVCTs,whichallowinvestorswhohaveheldtheirshareformorethan5yearstoselltheirsharesbacktotheVCTatanilorsmalldiscounttoNAVandreinvesttheproceedsinnewsharesissuedbytheVCT.Thisallowsinvestorstoeffectivelyrollovertheirshareholdingandobtainafurther30%incometaxreliefonthecurrentvalueoftheirshares(assumingtheyholdthenewsharesforatleastafurther5years).TheBoardbelievesthisisanattractivepropositionforShareholdersandwillconsiderofferingsuchaschemeinthecomingyear.

Annual General MeetingTheAnnualGeneralMeeting(“AGM”)oftheCompanywillbeheldinTheForestRoomatTheHospitalClub,24EndellStreet,CoventGarden,LondonWC2H9HQat2:30p.m.on21August2012.Noticeofthemeetingisattheendofthisdocument.

SevenitemsofspecialbusinesswillbeproposedattheAGMasfollows:

•oneresolutioninrespectofsharebuybacks,

• tworesolutionsinconnectionwithauthorityfortheDirectorstoallotsharesand

• fourresolutionsinconnectionwiththeintroductionofthedividendreinvestmentscheme.

Shareholder eventIwouldliketotakethisopportunitytodrawyourattentiontotheInvestmentManager’sannualshareholderpresentationwhichisexpectedtobeheldincentralLondonlaterintheyear.ThiseventprovidesShareholderswithanopportunitytomeettheInvestmentManagerand,additionally,toheardirectlyfromsomeoftheportfoliocompaniesandtomeetotherVCTshareholders.FurtherdetailsoftheeventwillbecommunicatedtoShareholdersinduecourse.

OutlookTheproposedmergeroftheCompany’stwoshareclasseswill,subjecttoShareholderapproval,resultinallShareholdersholdingastakeinamorediversifiedinvestmentportfolioandinaCompanywhichhasasignificantleveloffundsavailableforinvestment.

Withthegeneraleconomicoutlookremaininggloomy,anduncertaintiescreatedbyregulatorsandlegislators,newinvestmentactivitiesareexpectedtoremainchallengingoverthecomingyear.However,IbelievethatwehaveanumberofinterestinginvestmentsthathavethepotentialtoshowmeaningfulprofitsandthattheInvestmentManagerhastheskilltodeliverthem.TheInvestmentManageralsoreportsanattractiveflowofpotentialinvestmentopportunities,albeitatfullprices,insectorswhichhavedeliveredgoodreturnsfortheCompanyinthepastandwethereforeexpecttoseetheCompanybeinganactiveinvestoroverthenext12months.

Marc Vlessing Chairman 25June2012

Chairman’s Statement (continued)

9

Investment Manager’s ReviewIntroductionBeringeaisaspecialistventurecapitalmanagementcompanywhichmanages£200millionintheUKandUSAonbehalfofanumberofclients.IntheUK,Beringeahasadedicatedinvestmentteammanagingover£90millionacrossfourVCTs.

ProVenGrowth&IncomeVCThasbeenmanagedbyBeringeasinceitsinceptionin2001.TheCompany’slaunchcoincidedwithadownturninboththegeneralstockmarketand,nodoubtasadirectconsequence,VCTfundraisinggenerally.Theinitialfundraisingwas,therefore,amodest£7million.Majorfundraisingssince2006havesinceaddednetnewfundsof£42million.Sinceinception,theCompanyhasinvested£30millionin50smallandmediumsizedcompaniesand,attheyearend,had£17millionofcashandliquidfunds,thevastmajorityofwhichcanbeusedtomakefurtherventurecapitalinvestments.Atpresent,theCompanyhasinvestmentsin28companies,averagingapproximately£630,000perinvestment.

ProVenGrowth&IncomeVCTandotherVCTslikeitcontinuetomakeanimportantcontributiontothedevelopmentofUKbusinessparticularlyatatimewhentraditionallendersarereluctanttoadvancecredit.Thissupportextendsbeyondpurelyfinancialsupportwithourinvestmentexecutivesprovidingongoingmentoringandstrategicadviceandidentifyingnewkeydirectorswhocanbothsupportindividualbusinessesanddrivethemtothenextlevel.

Review of the yearTheCompanyinvested£3.5millionduringtheyear(2011:£3.0million).Therewerefouradditionstotheportfolioandfurtherfundingwasprovidedtofiveexistingcompanies.TheCompanyrealiseditsinvestmentsinfourportfoliocompanies:Coolabi,SteakMedia,LazuriteandPreludeMedia.Thevalueoftheexistingportfoliowasoverallbroadlyunchangedovertheyear:upwardsrevaluationsfromDonatantonio,ChessTechnologiesandBlisMediawereoffsetbyvaluationreductionsforanumberofinvestmentsincludingthoseinFjordnet,SenselogixandOvertis.Itisworthpointingoutthatthesereductionscanreflectboththeperformanceoftheindividualcompaniesand/orthewiderperformanceofcomparablesectors/companiesusedinvaluingtheinvestments.

Ordinary Share pool – portfolio activity and valuationAt29February2012,theCompany’sOrdinarySharepoolcomprised22companies,ofwhich19wereunquotedand3quoted,atavaluationof£15.2millionandoriginalacquisitioncostof£14.4million.Inaddition,theOrdinarySharepoolhadcashandliquidityfundsof£12.1million,themajorityofwhichwasraisedinthefinancialyearto29February2012.

Threenewinvestmentswereaddedtotheportfolioduringtheyear:CrossSolar,aresidentialrooftopsolarenergycompany,Eagle-iMusic,amusicpublishingbusiness,andUtilityExchangewhichprovidesutility(electricity,gasandtelecommunications)pricecomparisonandcontractswitchingforsmallbusinesses.FurtherinvestmentsweremadeinOvertis,CampdenMediaandBlisMedia.


ThegenerationofrenewableenergyfromsolarinstallationswhichbenefitfromgovernmentbackedFeed-inTariffshasbeenwelldocumentedandCrossSolarismanagedbyoneofthemostexperiencedteamsinthissector.Someofthefundsforthisinvestmentcamefromanotherinvestment,Lazurite,anditalsoreceivedfundingfromotherProVenVCTs.

Eagle-iMusicisthemusicpublishingarmofEagleRockEntertainmentGroupLimitedinwhichtheProVenVCTsalreadyhaveaninvestment.Publishingremainsoneofthemostlucrativeandvaluableareaswithinthemusicindustry,inpartduetolowerrelianceonphysicalgoodssalesforrevenues.TheCompanyinvestedthroughPreludeMedia,andalongsideProVenPlannedExitVCTplc,todevelopthisdivision.

UtilityExchangehasanexperiencedteamofmanagerswithover 20years’backgrounddeliveringbusinesstelecommunications servicesand10years’experiencedeliveringbusinesselectricityandgastoallsizesofcustomers,fromSMEstolargecorporates.

WewerepleasedtoconcludethedisposalofSteakMediainMay2011whichwereportedoninlastyear’sannualreport.Theinvestmenthastodatereturned1.8timestheinitialinvestmentcostwiththepotentialforfurtherreceiptsdependentonfutureperformance.TheCompanyalsodisposedofitsholdinginCoolabiplcasaresultofitdelistingfromAIMandbecomingaprivatecompany.

TheinvestmentsinEspressoGroupandDonatantonioaccountfor16.9%ofthenetassetvalueoftheOrdinarySharepool.EspressocontinuestoperformwellasaproviderofdigitalcontenttoschoolsbothintheUKandoverseas.Thecompany’sstrongcashflowgenerationintheUKhasprovidedafirmbaseforexpansionintooverseasterritories.Donatantonio,awholesalerofMediterraneanfoods,has,afteradifficultperiodfollowingtheCompany’sinitialinvestment,madeverygoodprogressunderthedirectionofaverycompetentseniormanagementteam.GoodprogresswasalsomadebyChessTechnologiesandBlisMedia,thelatterreceivingfurtherinvestmentfromtheCompanyandanewexternalinvestortofunditsongoingdevelopment.

‘D’ Share pool – portfolio activity and valuationAt29February2012,theCompany’s‘D’Sharepoolcomprised9unquotedcompaniesatavaluationof£2.5millionandoriginalcostof£2.7million.Inaddition,theCompanyhadcashandliquidityfundsof£4.8million.

NewinvestmentsweremadeinUtilityExchange(describedabove)andAPMHealthcare.Furtherfollow-onfundingwasprovidedtoTossedandSenselogix.APMHealthcareistheholdingcompanyofCommunityPharmacies(UK)Limited(“CPL”)whichisaimingtobecomeaprominentnicheplayerintheprescriptionpharmacysectorinpartnershipwithGPpractices.Sinceourinvestment,CPLhasopenedfivenewpharmacies.Staffedbyprofessionalpharmacists,thebusinessencouragesoperatingfreedomtoalloweachoutlettoprovideexactlywhatlocalcustomersneed,withsupportandexpertguidancefromacentralisedheadoffice.

The‘D’Sharepoolisvaluednearcostalthoughattheindividualcompanyleveltherehasbeenstrongperformancefromthejewellerybrand,MonicaVinader,whichhasenabledanupwardsrevaluation.MatsSoftandTossedcollectivelyaccountfor18.5%ofthe‘D’Sharepoolnetassets.

Investment Manager’s Review (continued)

11

Post year end developmentsInApril2012,the‘D’SharepoolreceivedsharesinLongEatonHealthcareLimited,aMidlandsbasedGP-centrepharmacy,byvirtueofitsinvestmentinAPMHealthcare.FundingforthisinvestmentwasprovidedbyProVenPlannedExitVCTplcwhichisalsomanagedbyBeringea.FurtherfollowonfundingwasalsoprovideddirectlytoAPMHealthcareandtoUtilityExchange,bothinlinewiththeoriginalinvestmentproposal.

InJune2012theCompanytooktheopportunitytorealiseitsinvestmentinAshfordColourPresswithrealisationproceedsexceedingthevaluationat29February2012.

OvertisGroupwentthroughatechnicalrestructuringaftertheyearendwherebyitenteredadministrationanditsassetsandintellectualpropertywereacquiredbyanewentitycalledVigilantApplications.ProVenVCTrolledover£399,000ofitsloannoteinvestmentinOvertisGroupintothenewentity.TheinvestmentinOvertishadbeenfullyprovidedforattheyearendandthereisthereforenoimpactontheCompany’snetassetvalue.

OutlookWecontinuetoseeanattractiveflowofinvestmentopportunitiesinavarietyofsectors.Digitalmediacontinuestobeanattractiveareaandoneinwhichwehavehistoricallydonewell,withcompaniessuchasMergermarket,SaffronMediaandILGDigital,andinwhichwethinktherearefurthergoodopportunities.Ourexperienceandnetworkofcontactsinthesectormakesusanaturalchoiceforthosedigitalmediabusinessesseekingfunding.DespitethechallengesfacingmanyUKbusinesses,theportfoliocontinuestoperformwelloverall.Wearealsoconfidentthatfurthergoodinvestmentopportunitieslieahead.

Beringea LLP 25June2012


Investmentactivityduringtheyearissummarisedasfollows:

Additions

Cost £’000

Ordinary Share pool

CrossSolarPVLimited** 978

Eagle-iMusicLimited 804

BlisMediaLimited** 375

OvertisGroupLimited 366

UtilityExchangeOnlineLimited 268

CampdenMediaLimited 113

2,904

‘D’ Share pool

UtilityExchangeOnlineLimited 234

APMHealthcareLimited 187

TossedLimited 120

SenselogixLimited 69

610

Total 3,514

Disposals

Cost £’000

Market value at 01/03/11

£’000Proceeds

£’000

Profit/(loss) vs cost

£’000

Realised gain/(loss) £’000

Ordinary Share pool

LazuriteLimited 1,000 930 902 (98) (28)

PreludeMediaLimited 1,000 925 876 (124) (49)

Coolabiplc** 450 108 112 (338) 4

SteakMediaLimited** 621 725 1,060 439 335

3,071 2,688 2,950 (121) 262

**Partiallynon-qualifyinginvestment

The‘D’Sharepooldidnotmakeanydisposalsduringtheyear.

Alloftheaboveinvestments,withtheexceptionofEagle-iMusicLimited,werealsoheldbyProVenVCTplc.

CrossSolarPVLimited,Eagle-iMusicLimitedandCampdenMediaLimitedwerealsoheldbyProVenPlannedExitVCTplc.

APMHealthcareLimitedwasalsoheldbyProVenHealthVCTplc.

ProvenVCTplc,ProVenHealthVCTplcandProVenPlannedExitVCTplcareallmanagedbyBeringeaLLP.

Investment Manager’s Review (continued)

13

Investment Portfolio – Ordinary Share Pool as at 29 February 2012

Ordinary Share portfolio of investmentsThefollowinginvestmentswereheldat29February2012:

Cost £’000

Valuation £’000

Valuation movement

in year £’000

% of portfolio by value

Top ten venture capital investments (by value)

EspressoGroupLimited** 1,582 2,435 88 8.9%

DonatantonioLimited 1,366 2,337 627 8.6%

FjordnetLimited 1,400 1,646 (777) 6.0%

BlisMediaLimited** 621 1,373 651 5.0%

ChessTechnologiesLimited 900 1,096 414 4.0%

CharterhouseLeisureLimited** 1,000 1,057 87 3.9%

CrossSolarPVLimited** 978 978 – 3.6%

EagleRockEntertainmentGroupLimited 680 805 (102) 3.0%

Eagle-iMusicLimited 804 804 – 2.9%

CampdenMediaLimited 757 776 79 2.8%

10,088 13,307 1,067 48.7%

Other venture capital investments 4,262 1,861 (979) 6.8%

Total venture capital investments 14,350 15,168 88 55.5%

Liquidityfunds 1,250 4.6%

Cashatbankandinhand 10,897 39.9%

Total Ordinary Share investments 27,315 100.0%

Otherventurecapitalinvestmentsasat29February2012comprise: AshfordColourPressLimited,BabyInnovationsS.A.t/aSteribottle*,DianomiLimited,ImmediaGroupplc,Isango!Limited,MatsSoftLimited**,OvertisGroupLimited,PilatMediaGlobalplc**,SPCInternationalLimited,SportsHoldingsLimited*,UBCMediaGroupplc**andUtilityExchangeOnlineLimited.

* Non-qualifyinginvestment ** Partiallynon-qualifyinginvestment

WiththeexclusionofPilatMediaGlobalplc,UBCMediaGroupplcandImmediaGroupplc,whicharequotedonAIM,allventurecapitalinvestmentsareunquoted.

Alloftheaboveinvestments,withtheexclusionofEagle-iMusicLimitedandImmediaGroupplc,werealsoheldbyProVenVCTplc.

CrossSolarPVLimited,Eagle-iMusicLimitedandCampdenMediaLimitedwerealsoheldbyProVenPlannedExitVCTplc.

ProvenVCTplcandProVenPlannedExitVCTplcarebothmanagedbyBeringeaLLP.

AllventurecapitalinvestmentsaboveareregisteredinEnglandandWales,withtheexceptionofBabyInnovationsS.A.,whichisregisteredinMadeira.


Review of Investments – Ordinary Share Pool as at 29 February 2012

Furtherdetailsofthetenlargestventurecapitalinvestments(byvalue)withintheOrdinarySharepoolareasfollows:

Espresso Group LimitedEspressoGroupdevelopsanddeliversmultimediaeducationcontentforschools.Over9,000primaryschools,equaltoapproximately45%oftheUKprimaryschoolmarket,nowsubscribetoitsflagship“EspressoforSchools”product.Followingtheacquisitionof4Learning,theeducationalbusinessofChannel4,thecompanyexpandedintotheUKsecondaryschoolsmarket.Thecompanyhasnowembarkedonaninternationalexpansionstrategy.IthasanestablishedpresenceinSwedenandarapidlygrowingmarketpenetrationintheUS.

Cost: £1,582,000 Valuation at 29/02/12: £2,435,000

Investment comprises: Valuation at 28/02/11: £2,347,000

Ordinary shares: £260,000 Valuation method: Earningsmultiple

‘A’ ordinary shares: £220,000

‘B’ ordinary shares: £2,000

Loan stock: £1,100,000

www.espresso.co.uk Audited accounts: 31/07/11 31/07/10 Dividend income: –

Turnover: £13.3m £13.3m Loan note income: £110,000

Loss before tax: £(669,000) £(3,000) Proportion of equity held: 7.5%

Net assets: £5.8m £6.5m Diluted equity: 7.3%

Donatantonio LimitedDonatantonioLimitedistheUKmarketleaderintheimportanddistributionofpremiumquality,authenticMediterraneaningredientstotheUKfoodmanufacturingandfoodservicesectors.Donatantonio’sstate-of-the-artfacilitiesallowittoprovidecertificationoffoodqualityoncethegoodsreachtheUK.Thismeansthattheproductssuppliedtofoodmanufacturersarereadyforimmediateincorporationintofinishedproductsanddonotrequirefurthertestingbythemanufacturerbeforeproductioncanbegin.





Preference shares: £45,000

www.donatantonio.com Loan stock: £1,096,000

Audited accounts: 31/01/11 31/01/10 Dividend income: –

Turnover: £18.7m £17.9m Loan note income: –

Profit/(loss) before tax:

£87,000 £(150,000) Proportion of equity held: 24.1%

Net liabilities: £(156,000) £(159,000) Diluted equity: 24.1%

15

Fjordnet LimitedFjordisanestablisheddigitaldesignagencyworkingacrossmanysectorsincludingtelecommunications,media,financeandhealthcare.Ithasworkedonmarketleadingflagshipprojects-includingprojectsfortheBBC,Nokia,Orange,SwisscomandYahoo!.Itwasinstrumentalinbringingthehugelysuccessfulaward-winningBBCiPlayertomobile.ThecompanyhasofficesinLondon,Helsinki,Berlin,Paris,Madrid,Stockholm,NewYorkandSanFrancisco.





‘B’ preference shares: £400,000

www.fjordnet.com Audited accounts: 31/12/10 31/12/09 Dividend income: –

Turnover: £15.3m £11.9m Loan note income: n/a

Profit before tax: £1.1m £1.4m Proportion of equity held: 14.6%


Blis Media Limited (formerly Breeze Tech (UK) Limited)BlisMediaisaleadingmobilemarketingspecialistfeaturingarosterofblue-chipclients.ItwasoneofthefirstplayersintheUKtospecializeinlocationbasedmedia,andretainsastrongbaseofproprietaryIP.Itscuttingedgetechnologyprovidescustomerswithanunprecedentedlevelofaudiencegranularity.

Cost: £621,000 Valuation at 29/02/12: £1,373,000

Investment comprises: Valuation at 28/02/11: £347,000

Ordinary shares: £23,000 Valuation method: Priceofrecentinvestment


‘C’ ordinary shares £374,000

www.blismedia.com Preference shares £101,000

Loan stock: £101,000

Audited accounts*: 31/12/11 31/12/10 Dividend income: –

Turnover: £1,883,000 £1,131,000 Loan note income: £8,100

Profit/(loss) before tax:

£108,000 £(141,000) Proportion of equity held:

20.5%

Net assets: £1,428,000 £449,000 Diluted equity: 20.5%

*Thecompanyfiledfullauditedaccountsforthefirsttimeto31December2011;comparativefiguresfortheprioryearhavethereforebeenprovided


Chess Technologies LimitedChessdesignsandmanufactureselectro-opticalsystemsforuseindefenceapplicationsworldwide.Chess’sleadingedgeengineeringskillsandin-housedevelopmentofinnovativetechnologiesenableittoproduceanextensiverangeofstandardandcustomisedsolutionsforland,seaandairapplications.

Cost: £900,000 Valuation at 29/02/12: £1,096,000





www.chess-dynamics.com Turnover: Unpublishedinformation Loan note income: £36,000

Profit before tax: Unpublishedinformation Proportion of equity held: 18.0%


Charterhouse Leisure LimitedCharterhouseLeisuretradesunderthename“CoalGrill&Bar”,agrowingrestaurantchainprovidinginformaldininganddrinkinginacomfortableandmodernatmosphere.Thecompanyhassevenbranchesandhasplanstorolloutthechainnationwide.Thecoremanagementteamdevelopedandranthe“MaPotters”restaurantchain,aformerProVenGrowth&IncomeVCTinvestmentthatwassoldin2007foratotalreturnofover2.5timestheinitialinvestment.






www.coalgrillandbar.co.uk Turnover: £7.6m £4.9m Loan note income: £75,409


Net (liabilities)/assets:

£(48,000) £611,000 Diluted equity: 21.0%

Cross Solar PV LimitedCrossSolarisaresidentialrooftopsolarPVdevelopermanagedbyISISSolar.ISISisoneoftheUK’slargestresidentialPVdevelopers,beingoneofthefirsttomarkettoofferinstallationsfreetohomeowners.Throughthescheme,homeownersreceivealloftheirelectricityforfreeforupto25years,andinreturnCrossSolarbenefitsfrom25yearguaranteedFeed-inTariffs.

Cost: £978,000 Valuation at 29/02/12: £978,000

Investment comprises: Valuation at 28/02/11: n/a

Ordinary shares: £271,000 Valuation method: Costasreviewedforimpairment


Audited accounts: Noaccountsfiled Dividend income: –

Loan note income: –

Proportion of equity held: 18.5%

Diluted equity: 18.5%

Review of Investments – Ordinary Share Pool (continued)

17

Eagle Rock Entertainment Group LimitedEagleRockisaleadingindependentproducer,publisheranddistributorofmusicprogrammingfortelevisionandDVD,comprisingliveconcertsanddocumentaries.Eaglehasanextensivecatalogueofaudio-visualIPR,whichisavailableformulti-mediaexploitationincludingbroadcast,broadbandandtelephony.





Audited accounts: 31/12/10 31/12/09 Dividend income: £21,420

www.eaglerockent.com Turnover: £27.0m £27.3m Loan note income: n/a



Eagle-i Music LtdEagle-iMusicisthemusicpublishingarmoftheportfoliocompany,EagleRockEntertainmentGroup.ProVenGrowth&IncomeVCTplcinvested£804,000inFebruary2012.



Ordinary shares: £244,000 Valuation method: Costasreviewedforimpairment


Audited accounts: Noaccountsfiled Dividend income: –

www.eagle-imusic.com Loan note income: –

Proportion of equity held: 23.2%

Diluted equity: 23.2%

Campden Media LimitedCampdenMediaisamagazinepublisherandeventorganiserinthehealthcareandprivatewealthmanagementsectors.Thecompanypublishesarangeoftitles,manyofwhichareendorsedbytherelevantprofessionalbodies.Thebusinesshasastrongandprovenmanagementteamandoperatesinsectorswhichareregardedasmoreresilienttoadversemacro-economicmovements.






www.campdenmedia.com Audited accounts: 31/12/10 31/12/09 Dividend income: –

Turnover: £6.8m £5.6m Loan note income: £37,814

Profit before tax: £(94,000) £(651,000) Proportion of equity held: 5.5%

Net assets: £(1.3)m £(1.2)m Diluted equity: 5.5%


ReferencestothelatestaccountsrefertothelatestannualreportandaccountspublishedbytheinvesteecompanyfollowingthedateofinvestmentbyProVenGrowth&IncomeVCTplc.

PortfoliocompanyfinancialinformationisbasedonpubliclyavailableinformationfiledatCompaniesHouseintheUK(orequivalentlocationsinoverseasjurisdictions).Certaininformationmaynotberequiredtobefiled,dependent,forexample,onthecompany’ssize,and,intheinterestsofportfoliocompanyconfidentiality,isnotdisclosedhere.

TheproportionofequityheldineachinvestmentalsorepresentsthelevelofvotingrightsheldbytheCompanyinrespectoftheinvestment.

Analysis of investments by commercial sectorThesplitoftheOrdinarySharepoolventurecapitalinvestmentsbycommercialsector(byvalueandcostat 29February2012)issummarisedasfollows:

Analysis of investments by investment typeAt29February2012,theOrdinarySharepoolassetsemployedwerebroadlyinlinewiththetargetswithintheinvestmentpolicy.Thesearesummarisedasfollows:

Type of investment (by fair value)

VCTqualifyinginvestments 54.6%

Otherinvestments,includingcashatbankandinhandandliquidityfunds 45.4%

100%

Review of Investments – Ordinary Share Pool (continued)

Spread of Investments by Sector

Cost

Valuation

9.0

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

£ M

illio

n

Media & entertainment

Support services

Healthcare Travel and Leisure

Software and computer services

Food and Beverage

TechnologyHardware

Environmental

Sectors

19

Investment Portfolio – ‘D’ Share Pool as at 29 February 2012

‘D’ Share portfolio of investmentsThefollowinginvestmentswereheldat29February2012:

Cost £’000

Valuation £’000

Valuation movement in

year £’000

% of portfolio by value

Venture capital investments

TossedLimited 624 671 47 9.3%

MatsSoftLimited** 650 650 – 9.0%

MonicaVinaderLimited 138 315 177 4.4%

UtilityExchangeOnlineLimited 234 234 – 3.2%

APMHealthcareLimited 187 187 – 2.6%

Speed-TrapHoldingsLimited 295 181 (114) 2.5%

CinergyInternationalLimited 115 113 (2) 1.6%

FjordnetLimited* 276 102 (84) 1.4%

SenselogixLimited 138 – (138) 0.0%

Total venture capital investments 2,657 2,453 (114) 34.0%

Liquidityfunds 1,250 17.4%

Cashatbankandinhand 3,505 48.6%

Total ‘D’ Share investments 7,208 100.0%

* Non-qualifyinginvestment ** Partiallynon-qualifyinginvestment

Allventurecapitalinvestmentsaboveareunquoted.

AlloftheaboveinvestmentswerealsoheldbyProVenVCTplc.

APMHealthcareLimitedwasalsoheldbyProVenHealthVCTplc.

ProvenVCTplcandProVenHealthVCTplcarebothmanagedbyBeringeaLLP.

AllventurecapitalinvestmentsaboveareregisteredinEnglandandWales.


Review of Investments – ‘D’ Share Pool Furtherdetailsoftheventurecapitalinvestments(byvalue)withintheDSharepoolareasfollows:

Tossed LimitedTossedoperatesaseriesoftakeawayfocusedhealthyeatingestablishments.Therearecurrentlyeightlocationsinoperation,includingonefranchiselocation,allbasedinLondon.ProVenGrowth&IncomeVCTinvested£504,000inApril2010andafurther£120,000inJuly2011alongsideProVenVCTplc.






www.tosseduk.com Audited accounts: 31/03/11 Dividend income: –

Turnover: Unpublishedinformation Loan note income: £1,156


Net assets: £1.0m Diluted equity: 11.6%

MatsSoft LimitedMatsSoftisasoftwarecompanyspecialisingindevelopinghostedSoftwareasaService(“SaaS”)businessprocessmanagement,workflowandcustomerandcommunicationssolutions,completewithacomprehensivesuiteofmanagementinformationandconfigurationtools.MatsSofthasbuiltastrongreputationbyprovidingsolutionsforenterprisecustomersthatdeliverdramaticprocessingefficiencieswhilstkeepingcustomersatisfactionhighthroughproactivecommunication



Ordinary shares: £197,000 Valuation method: Priceofrecentinvestment



www.matssoft.co.uk Audited accounts: 31/12/10 31/12/09 Dividend income: –

Turnover: Unpublishedinformation Loan note income: £4,820


Net assets: £219,000 £192,000 Diluted equity: 10.0%

21

Monica Vinader LimitedMonicaVinaderisahighend,award-winningfashionjewellerybrand.DesignerMonicaVinaderbeganproducingjewelleryin2002andcommercialisedthebrandin2006.ThebrandisregularlyfeaturedinglossymagazinessuchasVogue,HarpersandGraziaandboastsacelebrityfollowingofCameronDiaz,KeiraKnightleyandCherylCole.



Ordinary shares: £69,000 Valuation method: Revenuemultiple



www.monicavinader.com Turnover: Unpublishedinformation Loan note income: –



Utility Exchange Online LimitedUtilityExchangeOnlineprovidespricecomparisonservicesforutilities,includingheatingandelectricity,forsmallbusinesses.Unlikethedomesticandlargecorporatemarkets,thesmallbusinessmarketforutilitycomparisonisunderservedasaresultofitscomplexityandmanuallyintensiveprocesses.UEO’sautomatedquotingenginewillbethefirstofitskindforbusinessutilitypricecomparison.



‘A’ ordinary shares: £95,000 Valuation method: Costasreviewedforimpairment



www.utility-exchange.co.uk Turnover: Unpublishedinformation Loan note income: –


Net liabilities: £(1.2)m £(232,000) Diluted equity: 10.2%

APM Healthcare LimitedAPMHealthcareistheholdingcompanyofCommunityPharmacies(UK)Limited,aproviderofintegratedpharmacyservices.Thepharmaciesoperateattheheartofprimarycareinpartnershipwithlocalsurgerypractices,butwithexpertsupportfromacentralheadoffice.



‘A’ ordinary shares: £57,000 Valuation method: Costasreviewedforimpairment



www.apmhealthcare.co.uk Turnover: Unpublishedinformation Loan note income: £12,224


Net assets: £Nil £2,000 Diluted equity: 5.0%


Speed-Trap Holdings LimitedSpeed-TrapisasoftwarecompanyprovidingenterpriseandSaaSsolutions,whichallowscorporatedigitalplatformownerstocapture,analyseandinterpretdigitalinteractionswithusersoftheirplatforms.Thesoftwarealsoallowsthecustomertomakerealtimedecisionsandtotakeproactiveactionsinresponsetothisinformationviathedigitalplatform.



‘A’ ordinary shares: £115,000 Valuation method: Priceofrecentinvestmentwith

provisionLoan stock: £180,000


www.speed-trap.com Turnover: – – Loan note income: £10,852

Loss before tax: £(72,000) – Proportion of equity held: 3.0%


Cinergy International LimitedCinergyprovidescompetitiveintelligenceforMNOsandMNVOsregardingmobiledealsavailableinthemarketaswellaspricecomparisonservicesformobilephonepackagesforconsumers



Ordinary shares: £11,000 Valuation method: Revenuemultiple



www.cinergize.com Turnover: £1.2m £784,000 Loan note income: –


Net liabilities: £(117,000) £(47,000) Diluted equity: 0.3%

Fjordnet LimitedFjordisanestablisheddigitaldesignagencyworkingacrossmanysectorsincludingtelecommunications,media,financeandhealthcare.Ithasworkedonmarketleadingflagshipprojects–includingprojectsfortheBBC,Nokia,Orange,SwisscomandYahoo!.Itwasinstrumentalinbringingthehugelysuccessfulaward-winningBBCiPlayertomobile.ThecompanyhasofficesinLondon,Helsinki,Berlin,Paris,Madrid,Stockholm,NewYorkandSanFrancisco.



‘A’ ordinary shares: £276,000 Valuation method: Earningsmultiple


Turnover: £15.3m £11.9m Loan note income: n/a

www.fjordnet.com Profit before tax: £1.1m £1.4m Proportion of equity held: 1.9%


Review of Investments – ‘D’ Share Pool (continued)

23

Spread of Investments by Sector

Cost

Valuation

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

£ M

illio

n

Media & entertainment

Support services

Healthcare Travel and Leisure

Software and computer services

Retail Environmental

Sectors

Senselogix LimitedSenselogix™isanawardwinningproviderofenergyreductionforthebuildingsmarket.Senselogixdeliverrobust,intuitivehardwareandsoftwaresolutionsdesignedtomeasureandmanageelectricityincommercialbusinesses,publicsector,educationandotherofficebasedenvironments,toeliminateelectricalwaste.

Cost: £138,000 Valuation at 29/02/12: –


Ordinary shares: £138,000 Valuation method: Fullprovision


Turnover: Unpublishedinformation Loan note income: n/a

www.senselogix.com Profit before tax: Unpublishedinformation Proportion of equity held: 6.1%


ReferencestothelatestaccountsrefertothelatestannualreportandaccountspublishedbytheinvesteecompanyfollowingthedateofinvestmentbyProVenGrowth&IncomeVCTplc.

PortfoliocompanyfinancialinformationisbasedonpubliclyavailableinformationfiledatCompaniesHouseintheUK(orequivalentlocationsinoverseasjurisdictions).Certaininformationmaynotberequiredtobefiled,dependent,forexample,onthecompany’ssize,and,intheinterestsofportfoliocompanyconfidentiality,isnotdisclosedhere.

TheproportionofequityheldineachinvestmentalsorepresentsthelevelofvotingrightsheldbytheCompanyinrespectoftheinvestment.

Analysis of investments by commercial sectorThesplitofthe‘D’Sharepoolventurecapitalinvestmentsbycommercialsector(byvalueandcostat29February2012)issummarisedasfollows:

Analysis of investments by investment typeAt29February2012,the‘D’Sharepoolassetswereinvestedasfollows;broadlyinlinewiththeinvestmentpolicy.

Type of investment (by fair value)

VCTqualifyinginvestments 29.9%

Otherinvestments,includingcashatbankandinhandandliquidityfunds 70.1%

100.0%


Board of Directors

Marc Vlessing, Chairman MarcstartedhiscareerasacorporatefinancierwithCountyNatWest.In1991,hesetupMediaFinance,amanagementconsultancybusinessspecialisinginthemediasector.In1997,hebecameChiefExecutiveofCrescentEntertainment,whichranagroupofLondontheatresandcinemas;subsequentlyhebecameChiefExecutiveofFirstCallInternational,theUK'slargestindependentticketingbusiness.HeiscurrentlyChairmanofOctopusEclipseVCT2plcandaprincipalinPocket,adeveloperwhichhelpspeopleonlowtomoderateincomesowntheirfirsthome.

Natasha Christie-Miller Natashahasworkedinthemediasectorfor17years.Forthelast11yearsshehasbeenatEMAP,recentlyrebrandedastheTopRightGroupplc.AtEMAPNatashahasworkedonawiderangeofmagazinetitlessuchasElle,RedandHeatandbecameManagingDirectoroftheRetailportfolioin2007.In2010,NatashabecameCEOofEMAP.NatashajoinedtheBoardofProVenGrowth&IncomeVCTasanon-executivedirectorin2011.

Malcolm Moss MalcolmisaSeniorManagingDirectorofBeringeaLLCandafounderofBeringeaLLP.Overthelast20yearshehasbeenresponsibleforthegrowth,developmentandmanagementoftheprivateequitybusinessofBeringeainboththeUKandtheUSA.InadditiontosittingontheboardsofProVenVCTplc,ProVenGrowth&IncomeVCTplcandProVenPlannedExitVCTplc,hesitsontheinvestmentcommitteesofBeringea’sthreeotherventurecapitalfundsandasanon-executivedirectoronseveralotherportfolioinvestments.PriortofoundingBeringea,MalcolmgainedEurope-wideindustrial,planningandanalyticalexperienceinhealthcare,engineeringandfinancialserviceswith,respectively,BaxterInternational,UniroyalInc.andLloydsTSBGroup.

James Stewart JameswasformerlymanagingdirectorofCreditanstaltInvestmentBankAG'ssubsidiaryinLondon,where hehadpreviouslyestablishedCreditanstaltBankverein'sdevelopmentcapitalactivity.Hehasbeena non-executivedirectorofanumberofquotedandunquotedcompaniesandhenowworksasanindependentventurecapitalist.

AlltheDirectorsarenon-executiveand,withtheexceptionofMalcolmMoss,areconsideredbytheBoardtobeindependentoftheInvestmentManagerastheBoardconsidersthateachofthemhassuitableexperiencetobeabletoexerciseproperjudgement.

25

Directors’ Report and Business Review TheDirectorspresenttheAnnualReportandFinancialStatementsoftheCompanyfortheyearended 29February2012.

Principal activity and statusTheprincipalactivityoftheCompanyisthatofaventurecapitaltrust.IthasbeenapprovedbyHMRevenueandCustoms(“HMRC”)asaventurecapitaltrustinaccordancewithPart6oftheIncomeTaxAct2007andintheopinionoftheDirectors,theCompanyhasconducteditsaffairssoastoenableittomaintainsuchapproval.Approvalfortheyearended29February2012issubjecttoreviewshouldtherebeanysubsequentenquiryundercorporationtaxself-assessment.

TheDirectorsconsiderthattheCompanywasnotatanytime,uptothedateofthisreport,aclosecompanywithinthemeaningofSection414oftheIncomeandCorporationTaxesAct1988.

TheCompanyhasnoemployeesotherthantheDirectors.Thesamewastrueinthepreviousyear.

Business review and developmentsTheCompany’sbusinessreviewanddevelopmentsduringtheyeararereviewedintheChairman’sStatementandtheInvestmentManager’sReview.

ThetotalrunningcostsoftheCompanyexceededrevenuearisingfromtheinvestmentsheld(includingcashatbankandliquidityfunds)by£377,000(2011:£269,000).Thetotalexpenseratio(excludingperformancefees,recoverableVATandprovisionforloanstockinterest)inrespectoftheyearended29February2012,comparedtonetassetsattheyearendwas2.9%(2011:2.8%).

Results and distributions

£’000 Pence per share

(Loss)/returnonordinaryactivitiesaftertaxfortheyearended29February2012splitas:

Ordinary Shares 122 0.4p

‘D’ Shares (263) (3.2p)

(141)

Duringtheyearended29February2012,theCompanypaidaninterimdividendof4.5pperOrdinaryShareofwhich0.5pwasrevenueand4.0pwascapital(2011:nodividendswerepaidbytheCompany).

TheBoardisproposingtopayafinaldividendof4.5pperOrdinarySharefortheyearended29February2012.

DirectorsTheDirectorsoftheCompanyduringtheyearandtheirbeneficialinterestsintheissuedOrdinarySharesand‘D’SharesoftheCompany,at28February2011,29February2012andatthedateofthisreportwereasfollows:

Director At the date of this report 29 Feb 2012 28 Feb 2011

MalcolmMoss Ords 14,058 14,058 14,058

‘D’ Shares 3,165 3,165 3,165

JamesStewart Ords 7,103 7,103 7,103

MarcVlessing Ords 15,682 15,682 15,682

‘D’ Shares 4,148 4,148 4,148


NatashaChristie-Millerwasappointedasdirectoron24August2011.ShedoesnotholdanyOrdinarySharesor‘D’Sharesat29February2012oratthedateofthisreport.NicholasLewisresignedasdirectoron24August2011.Heheld14,957OrdinarySharesat28February2011.

Inaccordancewithdevelopmentsincorporategovernancepractice,theBoardhasdecidedthatitisbestpracticeforallDirectorstoretireateachAnnualGeneralMeeting.Accordingly,alltheDirectorswillretireattheforthcomingAnnualGeneralMeetingand,beingeligible,areofferingthemselvesforre-election.TheBoardrecommendsthatShareholderstakeintoconsiderationeachDirector’sconsiderableexperienceinVCTsandotherareas,asshownintheirrespectivebiographiesonpage24togetherwiththeresultsfortheperiodtodate,inordertosupporttheresolutionstoreappointallfourDirectors.

EachoftheDirectorshassignedaletterofappointmentwhichisterminablebythreemonths’rollingnoticeoneitherside.TotheextentpermittedundertheCompaniesAct2006,theCompanyindemnifieseachoftheDirectorsagainstallcosts,charges,losses,expensesandliabilitieswhichmightariseintheexecutionoftheirduties,saveforcertainexceptions.EachDirectorisrequiredtodevotesuchtimetotheaffairsoftheCompanyastheBoardrequires.

AtthelastAGM,on24August2011,Directorsweregrantedtheauthoritytomakemarketpurchasesofupto14.9%oftheissuedsharecapitaloftheCompanyandtodisapplypre-emptionrightsandallotuptoamaximumnominalamountof£55,660forOrdinarySharesand£8,255for‘D’Shares.Theauthoritytomakemarketpurchaseswasusedasdescribedonpage29.

Investment policyTheCompany’sinvestmentpolicycoversseveralareasasfollows:

Qualifying investmentsTheCompanyseekstomakeinvestmentsinVCT-qualifyingcompanieswiththefollowingcharacteristics:

• astrong,balancedandwell-motivatedmanagementteamwithaproventrackrecordofachievement;

• adefensiblemarketposition;

• goodgrowthpotential;

• anattractiveentrypricefortheCompany;

• theabilitytostructuretheinvestmentwithaproportionofsecuredloannotesinordertoreducerisk;and

• aclearlyidentifiedrouteforaprofitablerealisationwithina3-4yearperiod.

TheCompanyinvestsincompaniesatvariousstagesofdevelopment,includingthoserequiringcapitalforexpansionandinmanagementbuy-outs,butnotinstart-ups.Investmentsarespreadacrossarangeofdifferentsectors.

Inrespectofthe‘D’Sharepoolonly,itisintendedthat75%ofthefirsttrancheoffundsraisedunderthefirst‘D’ShareLinkedofferareinvestedinqualifyinginvestmentsfrom29February2012onwardsandthatby28February2013,75%ofthefundsraisedunderthesecond‘D’ShareLinkedofferwillalsobeinvestedinqualifyinginvestments.

Other investmentsFundsnotinvestedinqualifyinginvestmentswillbeheldincash,liquidityfunds,fixedinterestsecuritiesofA-ratingorbetterorininvestmentsoriginatedinlinewiththeCompany'squalifyingVCTpolicybutwhichdonotqualifyundertheVCTrulesfortechnicalreasons.

Directors’ Report and Business Review (continued)

27

Venture capital trust regulationsIncontinuingtomaintainitsVCTstatus,theCompanycomplieswithanumberofregulationsassetoutinPart6oftheIncomeTaxAct2007.HowthemainregulationsapplytotheCompanyissummarisedasfollows:

1. TheCompanyholdsatleast70%ofitsinvestmentsinqualifyingcompanies(asdefinedbyPart6oftheIncomeTaxAct2007);

2. Atleast30%(70%inthecaseoffundsraisedafter5April2011)oftheCompany’squalifyinginvestments(byvalue)areheldin“eligibleshares”–(“eligibleshares”generallybeingordinarysharecapital);

3. Atleast10%ofeachinvestmentinaqualifyingcompanyisheldin“eligibleshares”(bycostattimeofinvestment);

4. Noinvestmentconstitutesmorethan15%oftheCompany’sportfolio(byvalueattimeofinvestment);

5. TheCompany’sincomeforeachfinancialyearisderivedwhollyormainlyfromsharesandsecurities;

6. TheCompanydistributessufficientrevenuedividendstoensurethatnotmorethan15%oftheincomefromsharesandsecuritiesinanyoneyearisretained;and

7. Amaximumunitsizeof£1millionineachVCTqualifyinginvestmentpertaxyear(inrespectoffundsraisedpriorto6April2012).

BorrowingsItisnottheCompany’sintentiontohaveanyborrowings.TheCompanydoes,however,havetheabilitytoborrowamaximumamountwhichisequaltothenominalcapitaloftheCompanyanditsdistributableandundistributablereserves,currentlyequalto£35.4million(2011:£28.2million).Therearenoplanstoutilisethisfacilityatthecurrenttime.

Environmental and social policyTheBoardseekstoconducttheCompany’saffairsresponsiblyandconsidersrelevantsocialandenvironmentalmatterswhereappropriate.

Investment management and administration feesBeringeaLLP(“Beringea”)providesinvestmentmanagementservicestotheCompanyforanannualfeeof2.0%oftheOrdinarySharenetassetsandthe‘D’Sharenetassetsperannum.Beringeaisalsoentitledtoreceiveperformanceincentivefeesasdescribedfurtherbelow.Theinvestmentmanagementagreementisterminablebyeitherpartyatanytimebyoneyear’spriorwrittennotice.

TheBoardissatisfiedwithBeringea’sapproachandproceduresinprovidinginvestmentmanagementservicestotheCompany.TheDirectorshavethereforeconcludedthatthecontinuingappointmentofBeringeaLLPasinvestmentmanagerremainsinthebestinterestofShareholders.

InJune2011,DowningManagementServicesLimited(“DMS”)transferreditsbusinesstoalimitedliabilitypartnership,DowningLLP.TheCompany’sAdministrationAgreementwithDMSwasnovatedtoDowningLLP.Thetermsoftheagreement,servicesprovidedbyDowningLLPandtheprovisionofarunningcostscapareidenticaltothoseprovidedundertheoriginalagreement.

DowningLLPprovidesadministrationservicestotheCompanyforafeeof£37,000(plusVATandRPIadjustment)perannum.

Theannualrunningcosts(excludinganyperformancefeespayable)oftheCompany,fortheyear,alsosubjecttoacapof3.6%oftheCompany’snetassets.AnycostsinexcessofthisarebornebyBeringeaLLP.


Performance incentive feesOrdinary SharesSubjecttotheexceptionsnotedbelow,BeringeaisentitledtoperformanceincentivefeesiftheCompanyhasreturnedtoinvestorsacumulativedividendequaltoatleast4pperOrdinaryShareperannumforthefinancialyearsstarting1March2009andtheperformancevalueperOrdinaryShareisatleast130p.Beringeaisentitledtoreceiveaperformanceincentivefeeequalto15%ofthecumulativedividendspaidontheOrdinarySharesafter1March2009upto4pperOrdinaryShareperannum,plus20%ofthecumulativedividendspaidafter1March2009inexcessof4pperOrdinaryShareperannum,lesstheamountofanyincentivefeepreviouslypaidtoBeringeainrelationtotheOrdinaryShares.Dividendspaidonthe‘C’SharespriortotheirconversionintoOrdinarySharesinOctober2009shallbetreatedasdividendsontheOrdinaryShares.

InrelationtodividendspaidastheresultoftherealisationofinvestmentsmadefromtheOriginalOrdinarySharefund,Beringeaisentitledtoreceiveanincentivefeeequalto15%ofthecumulativedividendspaidfrom1March2006upto4pperOriginalOrdinaryShareperannum,plus20%ofthecumulativedividendspaidfrom1March2006inexcessof4pperOriginalOrdinaryShareperannum,lesstheamountofanyincentivefeepreviouslypaidtoBeringeainrelationtotheOriginalOrdinaryShares.ForthepurposesofcalculatingthiselementoftheperformanceincentivefeefordividendspaidfollowingtheexchangeofOriginalOrdinarySharesforOrdinaryShares,apro-formadividendperOriginalOrdinarySharewillbecalculated,basedonthenumberofOriginalOrdinarySharesinissueimmediatelypriortotheshareconversion.

InrelationtoOrdinarySharesissuedundertheofferforsubscriptionlaunchedon10December2010(“theOffer”),providingthattheCompanyhaspaidcumulativedividendsequaltoatleast4%oftheweightedaveragesubscriptionpriceofsuchsharesperannumforthefinancialyearsstarting1March2014andtheperformancevalueperOrdinaryShareofsuchsharesisatleast1.3timestheweightedaveragesubscriptionpriceofsuchshares,Beringeaisentitledtoreceiveaperformanceincentivefeeequalto15%ofthecumulativedividendspaidontheOrdinarySharesissuedundertheOfferafter1March2014upto4%oftheweightedaveragesubscriptionpricepershareperannum,plus20%ofthecumulativedividendspaidafter1March2014inexcessof4%oftheweightedaveragesubscriptionpricepershareperannum,lesstheamountofanyincentivefeepreviouslypaidtoBeringeainrelationtosuchshares.

NosuchfeeswerepaidinrespectoftheOrdinarySharesintheyearunderreview(2011:£nil).

‘D’ SharesBeringeaisentitledtoreceiveperformanceincentivefeesinrespectofthe‘D’Shares.Thesearefirstcalculatedinrelationtothefinancialyearstartingon1March2012andprovidedthat:

(i) theCompanyhasreturnedtoholdersof‘D’Shareswhosubscribedunderthe‘D’Shareprospectusinaggregateanamountequalto25pper£1sosubscribed;and

(ii) thesumofthenetassetvalueper‘D’Shareplusdistributionsper‘D’Sharepaidsincelaunchexceeds130p,

anannualperformanceincentivefee(inclusiveofVATifapplicable)ispayableequalto:

(i) 33%ofthecumulativedividendspaidinrelationtothefinancialyearsstartingonorafter1March2012overandabove3penceper‘D’Shareperannumbutlessthan6penceper‘D’Shareperannum;plus

(ii) 20%ofthecumulativedividendspaidinrelationtothefinancialyearsstartingonorafter1March2012inexcessof6penceper‘D’Shareperannum,

lessthecumulativeamountofanyincentivefeepreviouslypaidtotheInvestmentManager.

Nosuchfeeswerepaidinrespectofthe‘D’Sharesintheyearunderrevieworintheprioryear.

VCT statusTheCompanyhasretainedPricewaterhouseCoopersLLPtoadviseitoncompliancewithVCTrequirements,includingevaluationofinvestmentopportunitiesasappropriate,andregularreviewoftheportfolio.AlthoughPricewaterhouseCoopersworkscloselywiththeInvestmentManagerandAdministrationManager,theyreportdirectlytotheBoard.


29

CompliancewiththemainVCTRegulationsasat29February2012andfortheyearthenendedissummarisedasfollows:

1. 70%ofitsinvestmentsinqualifyingcompanies: 78.6%

2. Atleast30%oftheCompany’squalifyinginvestmentsin“eligibleshares”: 40.8%

3. Atleast10%ofeachinvestmentheldin“eligibleshares”: Complied

4. Noinvestmentconstitutesmorethan15%oftheCompany’sportfolio: Complied

5. Incomeisderivedwhollyormainlyfromsharesandsecurities: 79.3%

6. Nomorethan15%oftheincomefromsharesandsecuritiesisretained: 0.0%

7. Amaximumunitsizeof£1millionineachVCTqualifyinginvestment(pertaxyear): Complied

Share capitalTheCompanyhastwoclassesofshares:Ordinarysharesof1.6187peach(“OrdinaryShares”)and‘D’sharesof1peach(“‘D’Shares”).Eachshareclasshasaseparatepoolofassetsattributabletoit,witheachclassbearingaproportionoftherunningcostsoftheCompany.OrdinarySharesand‘D’Sharesrankpari passu witheachotherintermsofvotingandotherrights.TheproportionoftheCompany’snetassetsattributabletotheOrdinarySharesand‘D’Sharesare79.8%and20.2%respectively.

Atthe2011AGM,ShareholdersauthorisedtheCompanytomakemarketpurchasesofitsownsharesofupto14.9%ofthesharecapitalinissueatthatdateandtowaivepre-emptionrightsandtoissueOrdinarySharesuptoamaximumnominalamountof£55,660and‘D’Sharesuptoamaximumnominalamountof£8,255.

Duringtheyear,theCompanyrepurchased823,563OrdinarySharesforaconsiderationof£612,355andforanaggregatenominalamountof£13,331.Theaveragepricewas74.0pperOrdinarySharebeing3.4%oftheOrdinarySharecapital.TheCompanyalsorepurchased33,097‘D’Sharesforaconsiderationof£28,520andforanaggregatenominalamountof£331.Theaveragepricewas85.7pper‘D’Sharebeing0.4%ofthe‘D’Sharecapital.Thesesharesweresubsequentlycancelled.

Between18March2011and31October2011,theCompanyissued10,489,428OrdinarySharesat90.6ppershare,172,212OrdinarySharesat86.3ppershareand435,156Ordinaryat84.4ppershareunderthetermsoftheprospectusdated10December2010.Theaggregatenominalvalueoftheshareswas£179,000andtheaggregateconsiderationfortheshareswas£10,020,000.

Creditor payment policyTheCompany’spaymentpolicyistopaycreditorswithinthirtydaysofreceiptofaninvoiceexceptwhereothertermshavebeenagreed.TradecreditorsoftheCompanyattheyearendamountedto£nil(2011:£nil).

Key performance indicatorsAteachBoardmeeting,theDirectorsconsideranumberofperformancemeasurestoassesstheCompany’ssuccessinmeetingitsinvestmentobjectives(asshownonpage4).TheBoardbelievestheCompany’skeyperformanceindicatorsareNAVtotalreturn(NAVpluscumulativedividendspaidtodate)anddividendspershare(seepage5).

Inaddition,theBoardconsiderstheCompany’sperformanceinrelationtootherVCTs.

Principal risks and uncertaintiesTheprincipalfinancialrisksfacedbytheCompany,whichincludemarketpricerisk,interestraterisk,creditriskandliquidityrisk(beingminimal)aresummarisedwithinnote18tothefinancialstatements.

Inadditiontotheserisks,theCompany,asafullylistedCompanyontheLondonStockExchangeandasaventurecapitaltrust,operatesinacomplexregulatoryenvironmentandthereforefacesanumberofrelatedrisks.AbreachoftheVCTRegulationscouldresultinthelossofVCTstatusandconsequentlossoftaxreliefscurrentlyavailabletoShareholdersandtheCompanybeingsubjecttocapitalgainstax.Seriousbreachesofotherregulations,suchastheListingRulesoftheFinancialServicesAuthorityandtheCompaniesAct2006,couldleadtosuspensionfromtheStockExchangeanddamagetotheCompany’sreputation.


TheBoardreviewsandagreespoliciesformanagingeachoftheserisks.TheDirectorsreceivequarterlyreportsfromtheManagerswhichmonitorthecomplianceoftheserisks,andplacerelianceontheManagerstogiveupdatesintheinterveningperiods.Thesepolicieshaveremainedunchangedsincethebeginningofthefinancialperiod.

AuditorDeloitteLLPresignedasauditortotheCompanyinMarch2012.TheBoardappointedPKF(UK)LLPastheCompany’sauditorwitheffectfromMarch2012.Aresolutiontore-appointPKF(UK)LLPastheCompany’sauditorwillbeproposedattheforthcomingAGM.

Annual General MeetingTheAnnualGeneralMeetingwillbeheldinTheForestRoomatTheHospitalClub,24EndellStreet,CoventGarden,LondonWC2H9HQat2:30p.m.on21August2012.TheNoticeoftheAnnualGeneralMeetingandFormofProxyareattheendofthisdocument.

Substantial interestsAsat29February2012,andthedateofthisreport,theCompanywasnotawareofanybeneficialinterestexceeding3%oftheissuedOrdinarySharecapitalor‘D’Sharecapital.

Future developmentsTheDirectorsdonotforeseeanymajorchangesintheactivityundertakenbytheCompanyinthecomingyear.TheCompanycontinueswithitsobjectivetoinvestinunquotedcompaniesthroughouttheUnitedKingdomwithaviewtominimisingtherisksofinvestmentandprovidingbothcapitalgrowthanddividendincometoShareholdersoverthelongtermwhilstmaintainingVCTqualifyingstatus.IntheChairman’sStatementonpage7,theCompanyhasannouncedplanstoconvertthe‘D’SharesintonewOrdinarySharessuchthattheCompanywillultimatelyhaveoneshareclass.

Directors’ responsibilities statementThedirectorsareresponsibleforpreparingthedirectors'report,thedirectors'remunerationreportandthefinancialstatementsinaccordancewithapplicablelawandregulations.TheyarealsoresponsibleforensuringthattheannualreportincludesinformationrequiredbytheListingRulesoftheFinancialServicesAuthority.

Companylawrequiresthedirectorstopreparefinancialstatementsforeachfinancialyear.UnderthatlawthedirectorshaveelectedtopreparethefinancialstatementsinaccordancewithUnitedKingdomGenerallyAcceptedAccountingPractice(UnitedKingdomaccountingstandardsandapplicablelaw).Undercompanylawthedirectorsmustnotapprovethefinancialstatementsunlesstheyaresatisfiedthattheygiveatrueandfairviewofthestateofaffairsofthecompanyandoftheprofitorlossofthecompanyforthatperiod.

Inpreparingthesefinancialstatements,theDirectorsarerequiredto:

• selectsuitableaccountingpoliciesandthenapplythemconsistently;

•makejudgmentsandaccountingestimatesthatarereasonableandprudent;

• statewhetherapplicableUKaccountingstandardshavebeenfollowed,subjecttoanymaterialdeparturesdisclosedandexplainedinthefinancialstatements;and

•preparethefinancialstatementsonthegoingconcernbasisunlessitisinappropriatetopresumethattheCompanywillcontinueinbusiness.

Thedirectorsareresponsibleforkeepingadequateaccountingrecordsthataresufficienttoshowandexplainthecompany'stransactions,todisclosewithreasonableaccuracyatanytimethefinancialpositionoftheCompanyandtoenablethemtoensurethatthefinancialstatementscomplywiththeCompaniesAct2006.TheyarealsoresponsibleforsafeguardingtheassetsoftheCompanyandhencefortakingreasonablestepsforthepreventionanddetectionoffraudandotherirregularities.


31

TheDirectorsareresponsibleforthemaintenanceandintegrityofthecorporateandfinancialinformationincludedontheManager'swebsite.LegislationintheUnitedKingdomgoverningthepreparationanddisseminationofthefinancialstatementsandotherinformationincludedinannualreportsmaydifferfromlegislationinotherjurisdictions.

Directors’ statement pursuant to the Disclosure and Transparency RulesEachoftheDirectors,whosenamesandfunctionsarelistedonpage24,confirmsthattothebestofeachperson’sknowledge:

• thatthefinancialstatements,whichhavebeenpreparedinaccordancewithUKGenerallyAcceptedAccountingPractice,giveatrueandfairviewoftheassets,liabilities,financialpositionandprofitorlossoftheCompany;and

• thatthemanagementreportincludedwithintheDirectors’ReportandBusinessReview,Chairman’sStatement,InvestmentManager’sReviewandReviewofInvestmentsincludesafairreviewofthedevelopmentandperformanceofthebusinessandthepositionoftheCompany,togetherwithadescriptionoftheprincipalrisksanduncertaintiesthatitfaces.

Electronic publicationThefinancialstatementsarepublishedonwww.provenvcts.co.uk(maintainedbytheInvestmentManager)andalsoonwww.downing.co.uk.

Corporate governanceTheCompany’scompliancewith,anddeparturefrom,theFinancialReportingUKCorporateGovernanceCode(www.frc.org.uk)isshownonpages32to35.

TheCorporateGovernanceStatementdescribeshowtheprinciplesandsupportingprincipleswithintheUKCorporateGovernanceCode,publishedinJune2010,havebeenappliedbytheCompanythroughouttheyearended29February2012,exceptwheredisclosedwithintheCorporateGovernanceStatement.

Statement as to disclosure of information to the AuditorTheDirectorsinofficeatthedateofthereporthaveconfirmed,asfarastheyareaware,thatthereisnorelevantauditinformationofwhichtheAuditorisunaware.EachoftheDirectorshasconfirmedthattheyhavetakenallthestepsthattheyoughttohavetakenasDirectorsinordertomakethemselvesawareofanyrelevantauditinformationandtoestablishthatithasbeencommunicatedtotheAuditor.Thisconfirmationisgivenandshouldbeinterpretedinaccordancewiththeprovisionsofsection418oftheCompaniesAct2006.

ByorderoftheBoard

Grant Whitehouse CompanySecretary 39EarlhamStreet LondonWC2H9LT

25June2012


Statement of Corporate Governance TheDirectorssupporttherelevantprinciplesoftheUKCorporateGovernanceCodeissuedinJune2010,beingtheprinciplesofgoodgovernanceandthecodeofbestpractice,assetoutintheUKCorporateGovernanceCode.

Application of the Principles of the CodeTheBoardattachesimportancetomatterssetoutintheUKCorporateGovernanceCodeandappliesitsprinciples.However,asaventurecapitaltrustcompany,mostoftheCompany’sday-to-dayresponsibilitiesaredelegatedtothirdpartiesandtheDirectorsareallnon-executive.

The BoardTheCompanyhasaBoardcomprisingfournonexecutivedirectors.TheChairmanandseniordirectorisMarcVlessing.NatashaChristie-Miller,JamesStewartandMarcVlessingareconsideredtobeindependentdirectorsbytheBoard.BiographicaldetailsofallBoardmembers(includingthesignificantcommitmentsoftheChairman)areshownonpage24.

InaccordancewithCompanypolicy,alloftheDirectorsareofferingthemselvesforre-electionatthenextAGM.

FullBoardmeetingstakeplacequarterlyandtheBoardmeetsmoreregularlytoaddressspecificissuesincludingconsideringrecommendationsfromtheInvestmentManagerandreviews,periodically,thetermsofengagementofallthirdpartyadvisers(includingtheInvestmentManagerandAdministrationManager).TheBoardhasaformalscheduleofmattersspecificallyreservedforitsdecision.

ThefollowingtablesetsouttheDirectors’attendanceatfullBoardandCommitteemeetingsheldduringtheyearended29February2012.

Board meetingsAudit Committee

meetingsRemuneration

Committee meetings

Director held attended held attended held attended

MarcVlessing 4 4 1 1 1 1

NatashaChristie-Miller 3 3 – – – –

NicholasLewis 1 1 1 1 1 1

MalcolmMoss 4 4 1 1 1 –

JamesStewart 4 4 1 1 1 1

TheBoardhasalsoestablishedprocedureswherebyDirectorswishingtodosointhefurtheranceoftheirdutiesmaytakeindependentprofessionaladviceattheCompany’sexpense.

AllDirectorshaveaccesstotheadviceandservicesoftheCompanySecretary.TheCompanySecretaryprovidestheBoardwithfullinformationontheCompany’sassetsandliabilitiesandotherrelevantinformationrequestedbytheChairman,inadvanceofeachBoardmeeting.

TheBoardhasnotappointedanominationcommitteeasitconsidersitselftobesmallanditcompriseswhollynon-executivedirectors.AppointmentsofnewdirectorsaredealtwithbythefullBoard.

Board performance evaluationAnevaluationoftheperformanceoftheBoard,eachofitscommitteesandofthenon-executivedirectorswasconductedusingaseriesofquestionnaires.AbroadrangeofstandardtopicswascoveredincludingtheprogrammeofregularBoardorCommitteebusiness,Boardbehavioursandstrategy.Differentquestions

33

areusedforassessingtheskillsandcontributionsofeachoftheChairmanandnon-executivedirectors.Thesurveywillbeupdatedeachyearincludingtheapproachtorisk,BoardtrainingandDirectors’abilitytoprovideeffectivechallenge.

TheBoardconsideredwhethertointroduceanexternalfacilitatortomanagetheevaluation.However,itconcludedthattheCompanySecretarywaswellplacedtodeviseupdatedquestionsthatarerelevantandappropriatetotheCompanyandthat,havingattendedBoardandCommitteemeetingsthroughouttheyear,heandtheChairmanwouldalsounderstandandensureafullandfrankdiscussionaroundanyconcernsraised.TheChairmanhasreviewedtheresultsofthequestionnaireandfolloweduprelevantmatterswitheachDirector.Theoutcomeofthe2012BoardreviewhasconfirmedthattheDirectorsconsidertheBoardtohaveagoodbalanceofskillsandtobeworkingwell.

Remuneration CommitteeTheBoardhasappointedaremunerationcommitteecomprisingofallDirectorsandchairedbyMarcVlessing.Thecommitteegenerallymeetsonceayearandatothertimesasrequiredandhasspecifictermsofreferenceinordertofulfilitsdutiesinrespectofmattersrelatingtoremuneration.

Audit CommitteeTheCompanyhasanauditcommitteecomprisingJamesStewartasChairman,NatashaChristie-MillerandMarcVlessing.ThisCommitteehasdefinedtermsofreferenceandduties.TheCommitteemetonceduringtheyearwithallmembersbeinginattendance.EachofthemembersoftheAuditCommitteehasrecentandrelevantfinancialexperienceasevidencedbytheirbiographiesonpage24.

TheAuditCommitteeisresponsibleforreviewingtheannualaccountsandnormallywillalsoreviewthehalfyearlyaccounts.ItisalsoresponsibleforreviewingthetermsofappointmentoftheAuditor,togetherwith theirremuneration,aswellasreviewingtheeffectivenessoftheCompany’sinternalcontrolandriskmanagementsystems.

Anynon-auditservicesprovidedbytheAuditorarereviewedandapprovedbytheCommitteepriortobeingundertakentoensurethatauditorobjectivityandindependenceissafeguarded.Duringtheyear,inadditiontotheaudit,PKF(UK)LLPprovidedcorporationtaxcomplianceservicesonbehalfoftheCompany.TheCommitteeconsidersthatPKF(UK)LLPiswellplacedtoprovidethisservicegiventheknowledgegainedfromtheworkundertakenduringtheauditoftheCompany.

Aspartofitsannualreviewprocedures,theCommitteehasobtainedsufficientassurancefromtheirownevaluation,theauditfeedbackdocumentationandfromcorrespondenceanddiscussionswiththeengagementpartnerofPKF(UK)LLP.Basedontheassuranceobtained,theCommitteeissatisfiedwiththeperformance ofthecurrentAuditorandrecommendstoShareholdersthattheybere-appointedasAuditorfortheforthcomingyear.

TheCommitteereviewedtheinternalfinancialcontrolsandconcludedthattheywerestillappropriatetotheCompany.Theyalsoconsideredtheneedforaninternalauditfunctionandconcludedthatthisfunctionwouldnotbeanappropriatecontrolforaventurecapitaltrust.

AstheCompanyhashadnostaff,otherthantheDirectors,therearenoproceduresinplaceinrespectofC3.4oftheUKCorporateGovernanceCode.

Relations with ShareholdersShareholdershavetheopportunitytomeettheBoardattheAGM.TheBoardisalsohappytorespondtoanywrittenqueriesmadebyShareholdersduringthecourseoftheyear,ortomeetwithmajorshareholdersifsorequested.AshareholderpresentationforalltheProVenVCTsisalsoheldeachyearandShareholdersareinvitedtoattend.

InadditiontotheformalbusinessoftheAGM,representativesofthemanagementteamandtheBoardareavailabletoansweranyquestionsaShareholdermayhave.


SeparateresolutionsareproposedattheAGMoneachsubstantiallyseparateissue.TheAdministrationManagerortheInvestmentManagercollatesproxyvotesandtheresults(togetherwiththeproxyforms)areforwardedtotheCompanySecretaryimmediatelypriortotheAGM.InordertocomplywiththeUKCorporateGovernanceCode,proxyvotesareannouncedattheAGM,followingeachvoteonashowofhands,exceptintheeventofapollbeingcalled.ThenoticeofthenextAGMandproxyformcanbefoundattheendofthesefinancialstatements.

ThetermsofreferenceoftheAuditandRemunerationCommitteesandtermsandconditionsofappointmentofnon-executivedirectorsareavailabletoShareholdersuponrequest.

Financial reportingTheDirectors’statementofresponsibilitiesforpreparingtheaccountsissetoutintheDirectors’Reportonpages30and31andastatementbytheAuditorabouttheirreportingresponsibilitiesissetoutintheIndependentAuditor’sReportonpage39.

Internal controlTheBoardhasadoptedanInternalControlManual(“Manual”)forwhichtheyareresponsible,whichhasbeencompiledtocomplywiththeUKCorporateGovernanceCode.TheManualisdesignedtoprovidereasonable,butnotabsolute,assuranceagainstmaterialmisstatementorloss,whichitachievesbydetailingtheperceivedrisksandcontrolsinplacetomitigatethem.TheBoardreviewstheperceivedrisksinlinewithrelevantguidanceonanannualbasisandimplementsadditionalcontrolsasappropriate.

TheBoardisresponsibleforensuringthattheprocedurestobefollowedbytheadvisersandthemselvesareinplace,anditreviewstheeffectivenessoftheManual,basedonthereportfromtheAuditCommittee,onanannualbasistoensurethatthecontrolsremainrelevantandwereinoperationthroughouttheyear.TheBoarddidnotundertakeaformalreviewoftheManualduringtheyearbuthasrevieweditsincetheyearend.

AlthoughtheBoardisultimatelyresponsibleforsafeguardingtheassetsoftheCompany,theBoardhasdelegated,throughwrittenagreements,theday-to-dayoperationoftheCompanytothefollowingadvisers:

InvestmentManagement BeringeaLLP Administration DowningLLP

Share capitalTherightsandobligationsattachingtotheCompany’sshares,includingthepoweroftheCompanytobuybacksharesanddetailsofanysignificantshareholders,aresetoutintheChairman’sStatementonpages7and8andtheDirectors’Reportonpage30respectively.

Going concernTheCompany’sbusinessactivities,togetherwiththefactorslikelytoaffectitsfuturedevelopment,performanceandposition,aresetoutintheChairman’sStatementonpage6,theInvestmentManager’sReviewonpage9,andtheDirectors’ReportandBusinessReviewonpage25.ThefinancialpositionoftheCompany,itscashflows,liquiditypositionandborrowingfacilitiesareshownintheBalanceSheetonpage44,theCashFlowStatementonpage45andtheDirectors’Reportonpage27.Inaddition,note18tothefinancialstatementsincludetheCompany’sobjectives,policiesandprocessesformanagingitscapital;itsfinancialriskmanagementobjectives;detailsofitsfinancialinstruments;anditsexposurestocreditriskandliquidityrisk.

TheCompanyhasconsiderablefinancialresourcesbothattheyearendandatthedateofthisreport,andholdsadiversifiedportfolioofinvestments.Asaconsequence,theDirectorsbelievethattheCompanyiswellplacedtomanageitsbusinessriskssuccessfullydespitethecurrentuncertaineconomicoutlook.

TheDirectorshaveareasonableexpectationthattheCompanyhasadequateresourcestocontinueinoperationalexistencefortheforeseeablefuture.Thus,theycontinuetoadoptthegoingconcernbasisofaccountinginpreparingtheannualfinancialstatements.

Statement of Corporate Governance (continued)

35

Compliance statementTheListingRulesrequiretheBoardtoreportoncompliancewiththefifty-twoUKCorporateGovernanceCodeprovisionsthroughouttheaccountingperiod.Withtheexceptionofthelimiteditemsoutlinedbelow,theCompanyhascompliedthroughouttheaccountingyearended29February2012withtheprovisionssetoutinSection1oftheUKCorporateGovernanceCode:

a. NewDirectorsdonotreceiveafull,formalandtailoredinductiononjoiningtheBoard.Suchmattersareaddressedonanindividualbasisastheyarise.AlsotheCompanyhasnomajorShareholderssoShareholdersarenotgiventheopportunitytomeetanynewnon-executiveDirectorsataspecificmeetingotherthanattheAnnualGeneralMeeting.(B.4.1,B.4.2,E.1.1)

b. TheDirectorsdonothaveservicecontractsinplace(B.2.3).TheDirectorshaveagreedlettersofappointmentinplacewithathreemonthnoticeperiod

c. DuetothesizeoftheBoard,theCompanydoesnothaveaformalnominationcommittee.RelevantmattersweredealtwithbythefullBoard.(B.2.1)

d. AstheCompanyhashadnostaff,otherthanDirectors,therearenoproceduresinplacerelatingtowhistleblowing.(C.3.4)

e. DuetothesizeoftheCompany,theAuditCommitteehasconcludedthataninternalauditfunctionisnotappropriate.(C.3.5)

ByorderoftheBoard

Grant Whitehouse Secretary 39EarlhamStreet LondonWC2H9LT

25June2012


Directors’ Remuneration Report TheBoardandRemunerationCommitteehavepreparedthisreportinaccordancewiththerequirementsoftheCompaniesAct2006.AresolutiontoapprovethisreportwillbeputtothemembersattheAnnualGeneralMeetingtobeheldon21August2012.

UndertherequirementsofSection497,theCompany’sAuditorisrequiredtoauditcertaindisclosurescontainedwithinthereport.ThesedisclosureshavebeenhighlightedandtheauditopinionthereoniscontainedwithintheAuditor’sReportonpages39and40.

Remuneration CommitteeTheRemunerationCommitteecomprisesallmembersoftheBoardandischairedbyMarcVlessing.

Directors’ remuneration policyDirectors’remunerationiscalculatedinaccordancewiththeCompany’sArticlesofAssociationasfollows:

• TheDirectorsshallbepaidoutofthefundsoftheCompany,bywayoffeesfortheirservices,anaggregatesumnotexceeding£100,000perannum.TheDirectorsshallalsoreceivebywayofadditionalfeessuchfurthersums(ifany)astheCompanyinGeneralMeetingmayfromtime-to-timedetermine.SuchfeesandadditionalfeesshallbedividedamongtheDirectorsinsuchproportionandmannerastheymaydetermineandindefaultofdeterminationequally.

• TheDirectorsshallbeentitledtoberepaidallreasonabletravel,hotelandotherexpensesincurredbythemrespectivelyinorabouttheperformanceoftheirdutiesasDirectors,includinganyexpensesincurredinattendingmeetingsoftheBoardorofCommitteesoftheBoardorGeneralMeetingsandifintheopinionoftheDirectors,itisdesirablethatanyoftheirnumbershouldmakeanyspecialjourneysorperformanyspecialservicesonbehalfoftheCompanyoritsbusiness,suchDirectororDirectorsmaybepaidreasonableadditionalremunerationandexpensesastheDirectorsmayfromtime-to-timedetermine.

Directors’remuneration,asshowninthefollowingtable,issetataleveldesignedtoreflectthetimecommitmentandhighlevelresponsibilitybornebythenon-executivedirectorsandshouldbebroadlycomparablewiththatpaidbysimilarcompanies.

Directors’ agreementsEachoftheDirectorshasanagreedletterofappointmentwherebytheyarerequiredtodevotesuchtimetotheaffairsoftheCompanyastheBoardreasonablyrequiresconsistentwiththeirroleasanon-executiveDirector.Athreemonthrollingnoticeapplies.

37

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Directors’ remuneration (audited)Directors’remunerationfortheyearunderreviewwasasfollows:

Year ended 29 Feb 2012

£’000

Year ended 28 Feb 2011

£’000

MarcVlessing(Chairmanfrom24August2010) 30.0 25.2

AndrewDavison(formerChairman,resigned24August2010) – 9.5

NatashaChristie-Miller(Directorfrom24August2011) 11.6 –

NicholasLewis(formerDirector,resigned24August2011) 10.9 19.0

MalcolmMoss 15.0 15.0

JamesStewart 22.5 21.3

90.0 90.0

NootheremolumentsorpensioncontributionswerepaidbytheCompanyto,oronbehalfof,anyDirector.Theremunerationlevelsfortheforthcomingyearareexpectedtobeatthefollowingrates:

Annual Rate £’000

MarcVlessing(Chairman) 30.0

NatashaChristie-Miller 22.5

JamesStewart 22.5

MalcolmMoss 15.0

90.0

Insurance coverDirectors’andOfficers’liabilityinsurancecoverisheldbytheCompanyinrespectoftheDirectors.

Performance graphThechartsbelowrepresenttheCompany’sOrdinaryShareand‘D’Shareperformanceoverthereportingperiodssinceshareconversionorlaunchoftherespectiveshareclasses.ThechartscomparetheNetAssetValueTotalReturnandtheSharePriceTotalReturntoarebasedFTSEAllShareIndexTotalReturn(source:FTSEInternationalLimited).NetAssetValueTotalReturniscalculatedasNetAssetValueplusdividendsreinvestedintheCompanyattheNetAssetValueprevailingatthedatethedividendswerepaid.SharePriceTotalReturniscalculatedinasimilarway,butreinvestingdividendsatthemid-marketsharepriceatthedatedividendsarepaid.TheFTSEAllShareIndexisnotconsideredtobeabenchmarkfortheCompanybuthasbeenselectedasitisconsideredtobethemostrelevantpubliclyavailableindex.Allserieshavebeenrebasedto100attherelevantlaunchdates.

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ByorderoftheBoard

Grant Whitehouse CompanySecretary 39EarlhamStreet LondonWC2H9LT

25June2012

Directors’ Remuneration Report (continued)

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39

Independent Auditor’s Report to the Members of ProVen Growth & Income VCT plc

WehaveauditedthefinancialstatementsofProVenGrowth&IncomeVCTplcfortheyearended29February2012whichcomprisetheIncomeStatement,theReconciliationofMovementsinShareholders'Funds,theBalanceSheet,theCashFlowStatementandtherelatednotes.ThefinancialreportingframeworkthathasbeenappliedintheirpreparationisapplicablelawandUnitedKingdomAccountingStandards(UnitedKingdomGenerallyAcceptedAccountingPractice).

ThisreportismadesolelytotheCompany'smembers,asabody,inaccordancewithChapter3ofPart16oftheCompaniesAct2006.OurauditworkhasbeenundertakensothatwemightstatetotheCompany'smembersthosematterswearerequiredtostatetotheminanauditor'sreportandfornootherpurpose.Tothefullestextentpermittedbylaw,wedonotacceptorassumeresponsibilitytoanyoneotherthantheCompanyandtheCompany'smembersasabody,forourauditwork,forthisreport,orfortheopinionswehaveformed.

Respective responsibilities of directors and auditorAsexplainedmorefullyinthedirectors’responsibilitiesstatement,thedirectorsareresponsibleforthepreparationofthefinancialstatementsandforbeingsatisfiedthattheygiveatrueandfairview.OurresponsibilityistoauditandexpressanopiniononthefinancialstatementsinaccordancewithapplicablelawandInternationalStandardsonAuditing(UKandIreland).ThosestandardsrequireustocomplywiththeAuditingPracticesBoard'sEthicalStandardsforAuditors.

Scope of the audit of the financial statementsAnauditinvolvesobtainingevidenceabouttheamountsanddisclosuresinthefinancialstatementssufficienttogivereasonableassurancethatthefinancialstatementsarefreefrommaterialmisstatement,whethercausedbyfraudorerror.Thisincludesanassessmentof:whethertheaccountingpoliciesareappropriatetothecompany'scircumstancesandhavebeenconsistentlyappliedandadequatelydisclosed;thereasonablenessofsignificantaccountingestimatesmadebythedirectors;andtheoverallpresentationofthefinancialstatements.Inaddition,wereadallthefinancialandnon-financialinformationintheannualreporttoidentifymaterialinconsistencieswiththeauditedfinancialstatements.Ifwebecomeawareofanyapparentmaterialmisstatementsorinconsistenciesweconsidertheimplicationsforourreport.

Opinion on financial statementsInouropinionthefinancialstatements:

• giveatrueandfairviewofthestateoftheCompany’saffairsasat29February2012andofitslossfortheyearthenended;

• havebeenproperlypreparedinaccordancewithUnitedKingdomGenerallyAcceptedAccountingPractice;and

•havebeenpreparedinaccordancewiththerequirementsoftheCompaniesAct2006.

Opinion on other matters prescribed by the Companies Act 2006Inouropinion:

• thepartoftheDirectors’RemunerationReporttobeauditedhasbeenproperlypreparedinaccordancewiththeCompaniesAct2006;

• theinformationgivenintheDirectors’Reportforthefinancialyearforwhichthefinancialstatementsarepreparedisconsistentwiththefinancialstatements;and


• theinformationgivenintheStatementofCorporateGovernancesetoutonpages32to35incompliancewithrules7.2.5and7.2.6intheDisclosureRulesandTransparencyRulessourcebookissuedbytheFinancialServicesAuthority(informationaboutinternalcontrolandriskmanagementsystemsinrelationtofinancialreportingprocessesandaboutsharecapitalstructures)isconsistentwiththefinancialstatements.

Matters on which we are required to report by exceptionWehavenothingtoreportinrespectofthefollowing:

UndertheCompaniesAct2006wearerequiredtoreporttoyouif,inouropinion:

• adequateaccountingrecordshavenotbeenkept,orreturnsadequateforouraudithavenotbeenreceivedfrombranchesnotvisitedbyus;or

• thefinancialstatementsandthepartoftheDirectors’RemunerationReporttobeauditedarenotinagreementwiththeaccountingrecordsandreturns;or

• certaindisclosuresofdirectors’remunerationspecifiedbylawarenotmade;or

•wehavenotreceivedalltheinformationandexplanationswerequireforouraudit;or

• acorporategovernancestatementhasnotbeenpreparedbytheCompany.

UndertheListingRuleswearerequiredtoreview:

• theDirectors’statement,setoutonpage34,inrelationtogoingconcern;and

• thepartoftheStatementofCorporateGovernancerelatingtotheCompany’scompliancewiththenineprovisionsofthetheUKCorporateGovernanceCodespecifiedforourreview;and

• certainelementsofthereporttotheshareholdersbytheBoardonDirectors’remuneration.

Rhodri Whitlock (Senior statutory auditor)forandonbehalfofPKF(UK)LLP,StatutoryauditorLondon,UK

25June2012

Independent Auditor’s Report to the Members of ProVen VCT plc (continued)

41

Income Statement for the year ended 29 February 2012

Company

Year ended 29 February 2012 Year ended 28 February 2011

NoteRevenue

£’000Capital

£’000Total

£’000Revenue

£’000Capital

£’000Total

£’000

Income 2 663 – 663 517 – 517

Gainsoninvestments 9 – 236 236 – 2,919 2,919

663 236 899 517 2,919 3,436

Investmentmanagementfees 3 (179) (539) (718) (132) (393) (525)

Otherexpenses 4 (322) – (322) (261) – (261)

(Loss)/return on ordinary activities before tax 162 (303) (141) 124 2,526 2,650

Taxonordinaryactivities 6 – – – – – –

(Loss)/return attributable to equity shareholders 162 (303) (141) 124 2,526 2,650

Basicanddilutedreturn/(loss)pershare:

Ordinary Share 8 0.6p (0.2p) 0.4p 0.7p 11.2p 11.9p

‘D’ Share 8 (0.5p) (2.7p) (3.2p) (0.6p) (2.5p) (3.1p)

Allrevenueandcapitalitemsinthestatementsonpage42andabovederivefromcontinuingoperations.Nooperationswereacquiredordiscontinuedduringtheyear.ThetotalcolumnwithintheIncomeStatementrepresentstheprofitandlossaccountoftheCompany,preparedinaccordancewiththeaccountingpoliciesdetailedinnote1tothefinancialstatements.ThesupplementaryrevenueandcapitalcolumnsarepresentedforinformationpurposesinaccordancewiththeStatementofRecommendedPracticeissuedbyTheAssociationofInvestmentCompanies.

AStatementofTotalRecognisedGainsandLossesrelatingtoeachclassofsharehasnotbeenpreparedasallgainsandlossesarerecognisedintherelevantIncomeStatementsinthecurrentandprioryearasshownonpage42andabove.

OtherthanrevaluationmovementsarisingoninvestmentsheldatfairvaluethroughtheIncomeStatement,therewerenodifferencesbetweenthereturnasstatedonpage42andaboveandathistoricalcost.

The accompanying notes are an integral part of these financial statements.


Split as: Ordinary Shares


Revenue £’000

Capital £’000

Total £’000

Revenue £’000

Capital £’000

Total £’000

Income 585 – 585 466 – 466

Gainsoninvestments – 350 350 – 3,009 3,009

585 350 935 466 3,009 3,475

Investmentmanagementfees (143) (427) (570) (94) (281) (375)

Otherexpenses (243) – (243) (199) – (199)

Return/(loss) on ordinary activities before tax 199 (77) 122 173 2,728 2,901

Taxonordinaryactivities – – – – – –

Return/(loss) attributable to equity shareholders 199 (77) 122 173 2,728 2,901

‘D’ Shares


Revenue £’000

Capital £’000

Total £’000

Revenue £’000

Capital £’000

Total £’000

Income 78 – 78 51 – 51

Lossesoninvestments – (114) (114) – (90) (90)

78 (114) (36) 51 (90) (39)

Investmentmanagementfees (36) (112) (148) (38) (112) (150)

Otherexpenses (79) - (79) (62) – (62)

Loss on ordinary activities before tax (37) (226) (263) (49) (202) (251)

Taxonordinaryactivities – – – – – –

Loss attributable to equity shareholders (37) (226) (263) (49) (202) (251)

Income Statement for the year ended 29 February 2012 (continued)


43

Reconciliation of Movements in Shareholders’ Funds for the year ended 29 February 2012

Year ended 29 February 2012


Note

Ordinary Shares £’000

‘D’ Shares £’000

Total £’000



Total £’000

Openingshareholders’funds 20,799 7,442 28,241 17,561 5,099 22,660

Issueofshares 10,020 – 10,020 737 2,800 3,537

Share issue costs (549) – (549) (41) (154) (195)

Purchaseofownshares (612) (28) (640) (359) (52) (411)

Distributions 7 (1,547) – (1,547) – – –

Totalrecognisedgains/(losses)fortheyear 122 (263) (141) 2,901 (251) 2,650

Closing shareholders’ funds 28,233 7,151 35,384 20,799 7,442 28,241



Balance Sheet as at 29 February 2012

29 February 2012 28 February 2011

Note



Total £’000



Total £’000

Fixed assets Investments 9 15,168 2,453 17,621 14,865 1,956 16,821

Current assets Debtors 10 1,189 19 1,208 345 16 361

Currentinvestments 11 1,250 1,250 2,500 1,250 1,250 2,500

Cashatbankandinhand 10,897 3,505 14,402 5,851 4,282 10,133

13,336 4,774 18,110 7,446 5,548 12,994

Creditors:amountsfallingduewithinoneyear 12 (271) (76) (347) (1,512) (62) (1,574)

Net current assets 13,065 4,698 17,763 5,934 5,486 11,420

Total assets less current liabilities/ Net assets 28,233 7,151 35,384 20,799 7,442 28,241

Capital and reserves Calledupsharecapital 13 556 82 638 390 82 472

Capitalredemptionreserve 14 965 1 966 952 1 953

Sharepremium 14 9,973 7,785 17,758 681 7,785 8,466

Specialreserve 14 14,513 – 14,513 15,940 – 15,940

Capitalreserve–realised 14 1,752 (293) 1,459 2,860 (181) 2,679

Revaluationreserve 14 818 (204) 614 347 (90) 257

Revenuereserve 14 (344) (220) (564) (371) (155) (526)

Total equity shareholders’ funds 28,233 7,151 35,384 20,799 7,442 28,241

Basic and diluted net asset value per share 15 82.2p 86.8p 86.4p 90.0p

Thefinancialstatementsonpages41to57wereapprovedandauthorisedforissuebytheBoardofDirectorson25June2012andweresignedonitsbehalfby:

Marc Vlessing ChairmanProVenGrowth&IncomeVCTplcCompanynumber:4125326


45

Cash Flow Statement for the year ended 29 February 2012



Note



Total £’000



Total £’000

Net cash (outflow)/inflow from operating activities 16 (1,510) (139) (1,649) 850 (23) 827

Capital expenditure Purchaseofinvestments (2,904) (610) (3,514) (1,014) (2,047) (3,061)

Saleofinvestments 2,019 – 2,019 4,429 – 4,429

Net cash (outflow)/inflow from capital expenditure (885) (610) (1,495) 3,415 (2,047) 1,368

Equity dividends paid (1,547) – (1,547) – – –

Net cash (outflow)/inflow before financing (3,942) (749) (4,691) 4,265 (2,070) 2,195

Financing Proceedsfromshareissue 10,020 – 10,020 737 2,800 3,537

Share issue costs (549) – (549) (41) (154) (195)

Purchaseofownshares (483) (28) (511) (359) (52) (411)

Net cash inflow/(outflow) from financing 8,988 (28) 8,960 337 2,594 2,931

Increase/(decrease) in cash 17 5,046 (777) 4,269 4,602 524 5,126



Notes to the Accounts for the year ended 29 February 2012

1 Accounting policies

Basis of accountingTheCompanyhasprepareditsfinancialstatementsunderUKGenerallyAcceptedAccountingPractice(“UKGAAP”)andinaccordancewiththeStatementofRecommendedPractice“FinancialStatementsofInvestmentTrustCompaniesandVentureCapitalTrusts”revisedJanuary2009(“SORP”).

Thefinancialstatementsarepreparedunderthehistoricalcostconventionexceptforcertainfinancialinstrumentsmeasuredatfairvalue.

TheCompanyimplementsnewFinancialReportingStandards(“FRS”)issuedbytheAccountingStandardsBoardwhenrequired.

Going concernTheDirectorshave,atthetimeofapprovingthefinancialstatements,areasonableexpectationthattheCompanyhasadequateresourcestocontinueinoperationalexistencefortheforeseeablefuture.Thus,theycontinuetoadoptthegoingconcernbasisofaccountinginpreparingthefinancialstatements.FurtherdetailiscontainedintheStatementofCorporateGovernanceonpage34.

Presentation of Income StatementInordertobetterreflecttheactivitiesofaninvestmentcompanyand,inaccordancewithguidanceissuedbytheAssociationofInvestmentCompanies(“AIC”),supplementaryinformationwhichanalysestheIncomeStatementbetweenitemsofarevenueandcapitalnaturehasbeenpresentedalongsidetheIncomeStatement.ThenetrevenueisthemeasuretheDirectorsbelieveappropriateinassessingtheCompany'scompliancewithcertainrequirementssetoutinPart6oftheIncomeTaxAct2007.

Fixed assets investmentsInvestmentsaredesignatedas“fairvaluethroughprofitorloss”assetsduetoinvestmentsbeingmanagedandperformanceevaluatedonafairvaluebasis.Afinancialassetisdesignatedwithinthiscategoryifitisbothacquiredandmanaged,withaviewtosellingafteraperiodoftime,inaccordancewiththeCompany’sdocumentedinvestmentpolicy.Thefairvalueofaninvestmentuponacquisitionisdeemedtobecost.Thereafter,investmentsaremeasuredatfairvalueinaccordancewiththeInternationalPrivateEquityandVentureCapitalValuationGuidelines(“IPEVGuidelines”)togetherwithFRS26-FinancialInstruments:RecognitionandMeasurement.

PubliclytradedinvestmentsaremeasuredusingbidpricesinaccordancewiththeIPEVGuidelines.

ThevaluationmethodologiesusedbytheDirectorsforassessingthefairvalueofunquotedinvestmentsareasfollows:

•Priceofrecentinvestment;

•Multiples;

•Netassets;

•Discountedcashflowsorearnings(ofunderlyingbusiness);

•Discountedcashflows(fromtheinvestment);and

• Industryvaluationbenchmarks.

Themethodologyappliedtakesaccountofthenature,factsandcircumstancesoftheindividualinvestmentandusesreasonabledata,marketinputs,assumptionsandestimatesinordertoascertainfairvalue.

47

Fixedassetinvestmentsarederecognisedwhenthecontractualrightstothecashflowsfromtheassetexpireorittransferstheassetandsubstantiallyalltherisksandrewardsofownershipoftheassettoanotherentity.

Whereaninvesteecompanyhasgoneintoreceivershiporliquidation,orthereislittlelikelihoodofarecoveryfromacompanyinadministration,thelossontheinvestment,althoughnotphysicallydisposedof,istreatedasbeingrealised.

GainsandlossesarisingfromchangesinfairvalueareincludedintheIncomeStatementfortheyearasacapitalitem.

ItisnottheCompany’spolicytoexercisesignificantinfluenceoverinvesteecompanies.Therefore,theresultsofthesecompaniesarenotincorporatedintotheIncomeStatementexcepttotheextentofanyincomeaccrued.ThisisinaccordancewiththeSORPthatdoesnotrequireportfolioinvestmentstobeaccountedforusingtheequitymethodofaccounting.

Current asset investmentsCurrentassetinvestments,whichcompriseinvestmentsinliquidityfundswithAAArating,areheldatfairvaluethroughprofitandlossandaremarked-to-market.Theseassetsarepurchasedandredeemedunderacontractandtheassetsarerecognisedandderecognisedonthetradedate.Theseassetsareinitiallymeasuredatcostandsubsequentlyvaluedatfairvalue,beingtheclosingpriceofthefundasissuedbytheprovider.

Income Dividendincomefrominvestmentsisrecognisedwhentheshareholders’rightstoreceivepaymenthasbeenestablished,normallytheex-dividenddateor,wherenoex-dividenddateisestablished,whentheCompany’srighttoreceivepaymentisestablished.

Interestincomeisaccruedonatimebasis,byreferencetotheprincipaloutstandingandattheeffectiveinterestrateapplicableandonlywherethereisreasonablecertaintyofcollection.Incomewhichisnotcapableofbeingreceivedwithinareasonableperiodoftimeisreflectedinthecapitalvalueoftheinvestments.

ExpensesAllexpensesareaccountedforonanaccrualsbasis.InrespectoftheanalysisbetweenrevenueandcapitalitemspresentedwithintheIncomeStatement,allexpenseshavebeenpresentedasrevenueitemsexceptasfollows:

• expenseswhichareincidentaltotheacquisitionofaninvestmentaredeductedfromtheCapitalAccount;

• expenseswhichareincidentaltothedisposalofaninvestmentaredeductedfromthedisposalproceedsoftheinvestment;and

•expensesaresplitandpresentedpartlyascapitalitemswhereaconnectionwiththemaintenanceorenhancementofthevalueoftheinvestmentsheldcanbedemonstratedandaccordinglytheinvestmentmanagementfeehasbeenallocated25%torevenueand75%tocapital,inordertoreflecttheDirectors’expectedlong-termviewofthenatureoftheinvestmentreturnsoftheCompany.

TaxationThetaxeffectsofdifferentitemsintheIncomeStatementareallocatedbetweencapitalandrevenueonthesamebasisastheparticularitemtowhichtheyrelateusingtheCompany’seffectiverateoftaxfortheaccountingperiod.

DuetotheCompany’sstatusasaventurecapitaltrustandthecontinuedintentiontomeettheconditionsrequiredtocomplywithPart6oftheIncomeTaxAct2007,noprovisionfortaxationisrequiredinrespectofanyrealisedorunrealisedappreciationoftheCompany’sinvestmentswhicharises.

Deferredtaxationisprovidedinfullontimingdifferencesthatresultinanobligationatthebalancesheetdatetopaymoretax,orarighttopaylesstax,atafuturedate,atratesexpectedtoapplywhentheycrystallisebasedoncurrenttaxratesandlaw.Timingdifferencesarisefromtheinclusionofitemsofincomeandexpenditureintaxationcomputationsinperiodsdifferentfromthoseinwhichtheyareincludedinthefinancialstatements.Deferredtaxassetsarerecognisedtotheextentthatitisregardedasmorelikelythannotthattheywillberecovered.Deferredtaxassetsandliabilitiesarenotdiscounted.


Other debtors and other creditorsOtherdebtors(includingaccruedincome),othercreditorsandloannotesareincludedwithintheaccountsatamortisedcost.

Share issue costsExpensesinrelationtoshareissuesaredeductedfromtheSharePremiumAccountuponallotmentofshares.

2 Income

2012 £’000

2011 £’000

Income from investments

Loanstockinterest 480 406

Dividendincome 27 51

Liquidityfundinterest 19 14

526 471

Other income

Depositinterest 136 46

Otherincome 1 –

663 517

TheDirectorsconsiderthattheCompanyhasoneclassofbusinessandthatallitsactivitiesariseintheUnitedKingdom.

3 Investment management fees

2012 £’000

2011 £’000

Investmentmanagementfees 718 525

TheCompanyhasanagreementwithBeringeaLLPfortheprovisionofinvestmentmanagementservicesinrespectofitsportfolioofventurecapitalinvestmentswhichisterminablewithoneyear’swrittennotice.Themanagementfeeisbaseduponanannualamountof2.0%ofnetassets.TheannualrunningcostsoftheCompany,excludingperformancefeesandtrailcommission,aresubjecttoacapat3.6%oftheCompany’snetassets.

4 Other expenses

2012 £’000

2011 £’000

Administrationservices 52 49

Directors’remuneration 90 100

SocialsecuritycostsandirrecoverableVATon Directors’remuneration 11 1

Trailcommission 74 33

Auditor’sremunerationforauditofCompany’sannualaccounts 19 19

Auditor’sremunerationfornon-auditservices(taxation) 4 –

Otherexpenses 72 59

322 261

Notes to the Accounts (continued)

49

5 Directors’ remunerationDetailsofremunerationoftheDirectors(excludingemployers’NIandVAT)canbefoundintheDirectors’RemunerationReportonpages36and37.

TheCompanyhadnoemployeesotherthantheDirectorsduringeitheryear.CostsinrespectofDirectorsaredisclosedinnote4.

6 Taxation on ordinary activities2012

£’0002011

£’000

(a) Tax charge for year

Current year

UKcorporationtax(chargedtotherevenueaccount) – –

Chargedtocapitalexpenses – –

Chargeforyear – –

(b) Factors affecting tax charge for the year

Returnonordinaryactivitiesbeforetax (141) 2,650

Taxchargecalculatedonoperatingprofitattheapplicablerateof26%(2011:21%) (37) 557

Effectsof:

UKdividendincome (7) (11)

Gainsoninvestments (62) (613)

Expensesdisallowedfortaxpurposes 19 7

Excessmanagementfees 87 60

– –

(c) Excess management fees

Excessmanagementfees,whichareavailabletobecarriedforwardandsetoffagainstfuturetaxableincome,amountedto£1,955,000(2011:£1,624,000).Adeferredtaxassetof£488,000(2011:£341,000)hasnotbeenrecognisedduetothefactthatitisunlikelytheexcessmanagementfeeswillbesetoffintheforeseeablefuture.

7 DividendsYear ended 29 February 2012 Year ended 28 February 2011

PenceRevenue

£’000Capital

£’000Total £’000

Revenue £’000

Capital £’000

Total £’000

Ordinary Share dividends Paid in year

2012Interim(paid29/07/2011) 4.5 172 1,375 1,547 – – –

172 1,375 1,547 – – –

TheCompanyisproposingtopayafinaldividendof4.5pperOrdinarySharefortheyearended29February2012,ofwhich0.5pisrevenueand4.0piscapital,on31August2012.Itisestimatedthattheaggregateamountofthedividendwillbe£1,545,000basedontheOrdinarySharesinissueatthedateofthisreport.


8 Basic and diluted return per shareYear ended 29 February 2012 Year ended 28 February 2011



Revenuereturnpersharebasedon:

Netrevenueaftertaxation(£’000) 199 (37) 173 (49)

Weightedaveragenumberofsharesinissue 33,425,600 8,246,968 24,319,643 7,970,999

Pencepershare 0.6p (0.5p) 0.7p (0.6p)

Capitalreturn/(loss)persharebasedon:

Netcapitalgain/(loss)forthefinancialyear(£‘000) (77) (226) 2,728 (202)

Weightedaveragenumberofsharesinissue 33,425,600 8,246,968 24,319,643 7,970,999

Pencepershare (0.2p) (2.7p) 11.2p (2.5p)

AstheCompanyhasnotissuedanyconvertiblesecuritiesorshareoptions,thereisnodilutiveeffectonreturnpershare.Thereturnpersharedisclosedthereforerepresentsbothbasicanddilutedreturnpershare.

9 Investments “Fair value through profit or loss” assets

Investments quoted on AIM

£'000

Unquoted investments

£'000Total £'000

Openingcostat1March2011 1,070 15,495 16,565

Unrealisedgains/(losses)/(impairments)at1March2011 (779) 1,035 256

Openingfairvalueat1March2011 291 16,530 16,821

Movement in year Purchases at cost – 3,514 3,514

Sales -proceeds (112) (2,838) (2,950)

-realisedgain/(losses)onsales 4 258 262

Gains/(losses)intheincomestatement (56) 30 (26)

Closingfairvalueat29February2012 127 17,494 17,621

Closingcostat29February2012 620 16,387 17,007

Unrealisedgains/(losses)/(impairments)at29February2012 (493) 1,107 614

Closingfairvalueat29February2012 127 17,494 17,621

Thebasisofvaluationwaschangedforanumberofinvestmentsheldthroughouttheyear.Thecombinedeffectofthesechangeswasanupliftof£79,000inthevaluationoftheOrdinarySharepoolandareductionof£30,000inthevaluationofthe‘D’Sharepool,relativetotheprioryear.SignificantvaluationchangesintheOrdinarySharepoolincludethefollowing:thevaluationofCampdenMedia(29February2012valuation£776,000,upliftof£79,000)waschangedfromapriceofrecentinvestmentbasistoanearningsmultiplebasis.Significantvaluationchangesinthe‘D’Sharepoolincludethefollowing:thevaluationofMonicaVinader(29February2012valuation£315,000,upliftof£177,000)waschangedfromapriceofrecentinvestmentbasistoarevenuemultiplebasis;thevaluationofSpeed-Trap(29February2012valuation£180,000,decreaseof£114,000)waschangedfromapriceofrecentinvestmentbasistoapriceofrecentinvestmentwithprovisionbasis;thevaluationofSenselogix(29February2012valuation£nil,decreaseof£138,000)waschangedfromapriceofrecentinvestmentbasistoafullprovisionbasis.TheDirectorsconsiderthesechangeswerenecessarytoenableabetterassessmentofthefairvalueoftherelevantinvestments.

AnanalysisofventurecapitalinvestmentsbetweenOrdinaryand‘D’Sharesclassesissetoutinthereviewoftheinvestmentsonpages13to23.

10 Debtors2012

£’0002011

£’000Other debtors 1,111 306PrepaymentsandaccruedIncome 97 55

1,208 361

Otherdebtorsincludesmoniesduefromthesaleofinvestments.


51

11 Current investments“Fair value through profit and loss” assets

2012 £’000

2011 £’000

BlackRockLiquidityFund(formerlyBGISterlingLiquidityFirstFund) 1,250 1,250

InsightLiquidityFund 1,250 1,250

2,500 2,500

12 Creditors: amounts falling due within one year2012

£’0002011

£’000

Unallottedsharecapital – 1,279

Corporationtax 4 4

Othertaxesandsocialsecurity 4 –

Accrualsanddeferredincome 339 291

347 1,574

13 Called up share capital2012

£’0002011

£’000

Issued, allotted, called up and fully-paid:

34,341,341(2011:24,068,108)Ordinarysharesof1.6187peach 556 390

8,236,814(2011:8,269,911)‘D’sharesof1peach 82 82

638 472

Management of capitalTheCompany’scapitalismanagedinaccordancewithitsinvestmentpolicyasshownintheDirector’sReport,inpursuitofitsprincipalinvestmentobjectivesasstatedonpage4.Therehasbeennosignificantchangeintheobjectives,policiesorprocessesformanagingcapitalfromthepreviousyear.

Byitsnature,theCompanyhasanamountofcapital,atleast70%(asmeasuredundertaxlegislation)ofwhichmustbeinvested,andretained,intherelativelyhighriskassetclassofsmallUKcompaniesbroadlywithinthreeyearsofthatcapitalbeingsubscribed.TheCompanyaccordinglyhaslimitedscopetomanageitscapitalstructureinlightofchangesineconomicconditionsandtheriskcharacteristicsoftheunderlyingassets.Subjecttothisoverallconstraintuponthechangingcapitalstructure,theCompanymayadjusttheamountofdividendspaidtoShareholders,purchaseitsownshares,issuenewsharesorsellassetsifsorequiredtomaintainalevelofliquiditytoremainagoingconcern.AlthoughtheCompanyispermittedtoborrowtogiveadegreeofflexibility,therearenocurrentplanstodoso.

AstheCompanyhasalowlevelofliabilities,theBoardconsiderstheCompany’snetassetstobeitscapital.TheCompanydoesnothaveanyexternallyimposedcapitalrequirements.

TheCompanyhastheauthoritytobuybacksharesasdescribedintheDirectors’Report.

Duringtheyear,theCompanyrepurchased823,563OrdinarySharesof1.6187peach(“OrdinaryShares”)withanaggregatenominalvalueof£13,331andforanaggregateconsiderationof£612,355,beinganaveragepriceof74.0pperOrdinaryShare,andrepresenting3.4%oftheissuedOrdinarySharecapital.Thesesharesweresubsequentlycancelled.

Duringtheyear,10,489,428OrdinaryShareswereissuedat90.6ppershare,172,212OrdinaryShareswereissuedat86.3ppershareand435,156OrdinaryShareswereissuedat84.4ppershareallpursuanttotheofferforsubscriptionandprospectusdated10December2010.Theaggregatenominalvalueoftheshareswas£179,000andtheaggregateconsiderationfortheshareswas£10,020,000,whichincludesissuecostsof£549,000.

Duringtheyear,theCompanyrepurchased33,097‘D’sharesof1peach(“‘D’Shares”)withanaggregatenominalvalueof£331andforanaggregateconsiderationof£28,520,beinganaveragepriceof85.7pper‘D’Share,andrepresenting0.4%oftheissued‘D’Sharecapital.Thesesharesweresubsequentlycancelled.


14 ReservesCapital

redemption reserve

£’000

Share premium

£’000

Special reserve

£’000

Capital reserve - realised

£’000

Revaluation reserve

£’000

Revenue reserve

£’000Total £’000

At1March2011 953 8,466 15,940 2,679 257 (526) 27,769

Purchaseofownshares 13 – (612) – – (28) (627)

Issueofnewshares – 9,292 – – – – 9,292

Expensescapitalised – – – (539) – – (539)

Gainsoninvestments – – – 262 (26) – 236

Retainedrevenue – – – – – 162 162

Distributionspaid – – – (1,375) – (172) (1,547)

Transferbetweenreserves – – (815) 432 383 – –

At29February2012 966 17,758 14,513 1,459 614 (564) 34,746

Split between:

Ordinary Shares

At1March2011 952 681 15,940 2,860 347 (371) 20,409

Purchaseofownshares 13 – (612) – – – (599)

Issueofnewshares – 9,292 – – – – 9,292


Gainsoninvestments – – – 262 88 – 350

Retainedrevenue – – – – – 199 199

Distributionspaid – – – (1,375) – (172) (1,547)

Transferbetweenreserves – – (815) 432 383 – –

At29February2012 965 9,973 14,513 1,752 818 (344) 27,677

‘D’ Shares

At1March2011 1 7,785 – (181) (90) (155) 7,360

Purchaseofownshares – – – – – (28) (28)


Lossesoninvestments – – – – (114) – (114)

Retainedrevenue – – – – – (37) (37)

At29February2012 1 7,785 – (293) (204) (220) 7,069

ThespecialreserveisadistributablereservethatallowstheCompanytomakemarketpurchasesofitsownsharesandtopaydistributions.Thespecialreserve,capitalreserve–realisedandrevenuereservearealldistributablereserves.Thedistributablereservesarereducedbylossesof£2,971,000whichareincludedintherevaluationreserve.Reservesavailablefordistributionthereforeamountto£12,437,000.

15 Basic and diluted net asset value per share

Shares in Issue2012

Net asset value2011

Net asset value

2012 2011pence

per share £'000pence

per share £'000

Ordinary Shares 34,341,341 24,068,108 82.2p 28,233 86.4p 20,799

‘D’ Shares 8,236,814 8,269,911 86.8p 7,151 90.0p 7,442

35,384 28,241

AstheCompanyhasnotissuedanyconvertiblesecuritiesorshareoptions,thereisnodilutiveeffectonnetassetpershare.Thenetassetvaluepersharedisclosedthereforerepresentsbothbasicanddilutedreturnpershare.


53

16 Reconciliation of return on ordinary activities before taxation to net cash flow from operating activities

2012 2011

Ordinary Shares

£'000

‘D’ Shares

£'000Total

£0'00

Ordinary Shares/

‘C’ Shares £'000

‘D’ Shares

£'000Total

£0'00

Returnonordinaryactivitiesbeforetax 122 (263) (141) 2,901 (251) 2,650

(Gains)/lossesoninvestments (350) 114 (236) (3,009) 90 (2,919)

(Increase)/decreaseinprepayments,accruedincomeandotherdebtors (41) (4) (45) 34 574 608

(Decrease)/increaseinaccrualsandother creditors (1,241) 14 (1,227) 924 (436) 488

Netcash(outflow)/inflowfromoperatingactivities (1,510) (139) (1,649) 850 (23) 827

17 Reconciliation of net cash flow to movement in net funds2012

£’0002011

£’000

Beginningofyear 10,133 5,007

Netcashinflowfortheyear 4,269 5,126

Endofyear 14,402 10,133

18 Financial instruments TheCompany’sfinancialinstrumentscompriseinvestmentsheldatfairvaluethroughtheprofitandloss,beingequityandloanstockinvestmentsinquotedcompaniesandunquotedcompaniesandliquidityfunds;loansandreceivables(beingcashdepositsandshorttermdebtors);andfinancialliabilities(beingcreditorsarisingfromitsoperations).Themainpurposeofthesefinancialinstrumentsistogeneratecashflow,revenueandcapitalappreciationfortheCompany’soperations.TheCompanyhasnogearingorotherfinancialliabilitiesapartfromshort-termcreditorsanddoesnotuseanyderivatives.

Principal risks and management objectives TheCompany’sinvestmentactivitiesexposetheCompanytoanumberofrisksassociatedwithfinancialinstrumentsandthesectorsinwhichtheCompanyinvests.TheprincipalfinancialrisksarisingfromtheCompany’soperationsare:

•Marketrisks;

•Creditrisk;and

• Liquidityrisk.

TheBoardregularlyreviewstheserisksandthepoliciesinplaceformanagingthem.TherehavebeennosignificantchangestothenatureoftherisksthattheCompanyisexposedtoovertheyearandtherehavealsobeennosignificantchangestothepoliciesformanagingthoserisksduringtheyear.

TheriskmanagementpoliciesusedbytheCompanyinrespectoftheprincipalfinancialrisksandareviewofthefinancialinstrumentsheldattheyearendareprovidedbelow:

Market risksAsaVCT,theCompanyisexposedtomarketrisksintheformofpotentiallossesandgainsthatmayariseontheinvestmentsitholds.ThemanagementofthesemarketrisksisafundamentalpartofinvestmentactivitiesundertakenbytheInvestmentManagerandoverseenbytheBoard.TheManagermonitorsinvestmentsthroughregularcontactwithmanagementofinvesteecompanies,regularreviewofmanagementaccountsandotherfinancialinformationandattendanceatinvesteecompanyboardmeetings.ThisenablestheManagertomanagetheinvestmentriskinrespectofindividualinvestments.Marketriskisalsomitigatedbyholdingaportfoliodiversifiedacrossseveralbusinesssectorsandassetclasses.


ThekeymarketriskstowhichtheCompanyisexposedare:

•Marketpricerisk;and

• Interestraterisk.

Market price riskMarketpriceriskarisesfromuncertaintyaboutthefuturepricesandvaluationsoffinancialinstruments.ItrepresentsthepotentiallossthattheCompanymightsufferthroughmarketpricemovementsinrespectofquotedinvestmentsandthroughchangesinthefairvalueofunquotedinvestments.

At29February2012,theAIM-quotedportfoliowasvaluedat£127,000(2011:£291,000).

TheCompany’ssensitivitytofluctuationsinthesharepricesofitsAIM-quotedinvestmentsissummarisedbelow.A10%movementinthesharepriceofalloftheAIM-quotedstocksheldbytheCompanywouldhaveaneffectasfollows:

25% movement in AIM-quoted stocks

Impact on net assets

£'000

2012 Impact on

NAV per share pence


£'000

2011 Impact on

NAV per share pence

Ordinary Shares 32 0.1p 73 0.3p

‘D’ Shares – – – –

At29February2012,theunquotedportfoliowasvaluedat£17,494,000(2011:£16,530,000).

AsmanyoftheCompany’sunquotedinvestmentsarevaluedusingrevenueorearningsmultiplesofcomparablecompaniesorsectors,afallinsharepricesgenerallywouldimpactonthevaluationoftheunquotedportfolio.A10%movementinthevaluationsofalloftheunquotedinvestmentsheldbytheCompanywouldhaveaneffectasfollows:

10% movement in unquoted investment valuations


£'000

2012 Impact on

NAV per share pence


£'000

2011 Impact on

NAV per share pence

Ordinary Shares 1,504 4.4p 1,457 6.1p

‘D’ Shares 245 3.0p 196 2.4p

Thesensitivityanalysisforunquotedvaluationsaboveassumesthateachofthesub-categoriesoffinancialinstruments(ordinaryshares,preferencesharesandloanstocks)heldbytheCompanyproducesanoverallmovementof10%.Shareholdersshouldnotethatequalcorrelationbetweenthesesub-categoriesisunlikelytobethecaseinreality,particularlyinthecaseofloanstockinstruments.Wheresharepricesarefalling,theequityinstrumentcouldfallinvaluebeforetheloanstockinstrument.Itisnotconsideredpracticaltoassessthesensitivityoftheloanstockinstrumentstomarketpriceriskinisolation.

Interest rate riskTheCompanyisexposedtointerestrateriskonfloating-ratefinancialassetsthroughtheeffectofchangesinprevailinginterestrates.TheCompanyreceivesinterestonitscashdepositsatarateagreedwithitsbankersandonliquidityfundsatratesbasedontheunderlyinginvestments.Investmentsinloanstockandfixedinterestinvestmentsattractinterestpredominatelyatfixedrates.AsummaryoftheinterestrateprofileoftheCompany’sfinancialinstrumentsisshownbelow.

TherearethreecategoriesinrespectofinterestwhichareattributabletothefinancialinstrumentsheldbytheCompanyasfollows:

• “Fixedrate”assetsrepresentinvestmentswithpredeterminedyieldtargetsandcomprisecertainloannoteinvestmentsandPreferenceShares.


55

• “Floatingrate”assetspredominantlybearinterestatrateslinkedtoBankofEnglandbaserateorLIBORandcomprisecashatbankandliquidityfundinvestmentsandcertainloannoteinvestments.

• “Nointerestrate”assetsdonotattractinterestandcompriseequityinvestments,certainloannoteinvestments,loansandreceivables(excludingcashatbank)andotherfinancialliabilities.

Average interest rate

Average period until maturity

2012 £’000

2011 £’000

Fixedrate 6.6% 1,105days 8,153 6,150

Floatingrate 0.6% 1,421days 17,291 13,609

No interest rate 9,940 8,482

35,384 28,241

TheCompanymonitorsthelevelofincomereceivedfromfixed,floatingandnointerestrateassetsand,ifappropriate,maymakeadjustmentstotheallocationbetweenthecategories,inparticularshouldthisberequiredtoensurecompliancewiththeVCTregulations.

Basedontheassumptionthattheyieldofallfloatingratefinancialinstrumentswouldchangebyanamountequaltothemovementinprevailinginterestrates,itisestimatedthatanincreaseof1%ininterestrateswouldhaveincreasedtotalreturnbeforetaxationfortheyearby£180,000.AstheBankofEnglandbaseratestoodat0.5%perannumthroughouttheyear,itisnotbelievedthatareductionfromthislevelislikely.

Credit riskCreditriskistheriskthatacounterpartytoafinancialinstrumentisunabletodischargeacommitmenttotheCompanymadeunderthatinstrument.TheCompanyisexposedtocreditriskthroughitsholdingsofloanstockininvesteecompanies,investmentsinliquidityfunds,cashdepositsanddebtors.Creditriskrelatingtoloanstockinvesteecompaniesisconsideredtobepartofmarketrisk.

TheCompanyisexposedtocreditriskasfollows:

2012 £’000

2011 £’000

Investmentsinliquidityfunds 2,500 2,500

Investmentsinloanstocks 8,542 8,339

Cashandcashequivalents 14,402 10,133

Interest,dividendsandotherreceivables 152 214

25,596 21,186

Creditriskinrespectofloanstockof£8,542,000ispartiallymitigatedbyregisteringfloatingchargesovertheassetsoftherespectiveinvesteecompanies.Thestrengthofthissecurityineachcaseisdependentonthenatureoftheinvesteecompanies’businessanditsidentifiableassets.Similarly,themanagementofcreditriskassociatedwithinterest,dividendsandotherreceivablesiscoveredwithintheinvestmentmanagementprocedures.

CreditriskinrespectofinvestmentsinliquidityfundsisminimisedbyinvestinginAAA-ratedfunds.

CashismainlyheldbyBankofScotlandplcandRoyalBankofScotlandplc,bothofwhichareA-ratedfinancialinstitutionsandbothalsoultimatelypart-ownedbytheUKGovernment.Consequently,theDirectorsconsiderthattheriskprofileassociatedwithcashdepositsislow.

Therehavebeennochangesinfairvalueduringtheyearthataredirectlyattributabletochangesincreditrisk.

Liquidity riskLiquidityriskistheriskthattheCompanyencountersdifficultiesinmeetingobligationsassociatedwithitsfinancialliabilities.Liquidityriskmayalsoarisefromeithertheinabilitytosellfinancialinstrumentswhenrequiredattheirfairvaluesorfromtheinabilitytogeneratecashinflowsasrequired.TheCompanymaintainsarelativelylowlevelofcreditors(£347,000at29February2012)andhasnoborrowings.Also,


liquidityfundsandsomequotedinvestmentsheldbytheCompanyareconsideredtobereadilyrealisable.TheCompanyalwaysholdssufficientlevelsoffundsascashandreadilyrealisableinvestmentsinordertomeetexpensesandothercashoutflowsasrequired.Forthesereasons,theBoardbelievesthattheCompany’sexposuretoliquidityriskisminimal.

TheCompany’sliquidityriskismanagedbytheInvestmentManagerinlinewithguidanceagreedwiththeBoardandisreviewedbytheBoardatregularintervals.

AlthoughtheCompany’sinvestmentsarenotheldtomeettheCompany’sliquidityrequirements,thetablebelowshowsananalysisoftheloannotes,highlightingthelengthoftimethatitcouldtaketheCompanytorealiseitsassetsifitwererequiredtodoso.

Thecarryingvalueofloanstockinvestmentsat29February2012asanalysedbyexpectedmaturitydateisasfollows:

As at 29 February 2012

Not later than 1

year £’000

Between 1 and 2

years £’000

Between 2 and 3

years £’000

Between 3 and 5

years £’000

More than 5 years

£’000Total

£’000

Fullyperformingloanstock 445 1,709 2,005 1,832 1,812 7,803

Pastdueloanstock 81 131 132 263 132 739

526 1,840 2,137 2,095 1,944 8,542

As at 28 February 2011

Fullyperformingloanstock 81 374 3,476 3,604 804 8,339

Pastdueloanstock – – – – – –

81 374 3,476 3,604 804 8,339

Oftheloanstockclassifiedas“pastdue”above,£81,000relatestotheprincipalofloannoteswheretheprincipalhaspasseditsmaturitydate.Asatthebalancesheetdate,theextenttowhichtheprincipalispastitsmaturitydategivingrisetotheclassificationoftheloannotesaspastduefallswithinthebandingofnolaterthanoneyearpastdue.Notwithstandingthattheprincipalhaspasseditsmaturitydate,theDirectorsdonotconsiderthattheloannoteitselfhasbeenimpairedorthematurityoftheprincipalhasaltered.

Oftheloanstockclassifiedas“pastdue”above,£658,000relatestotheprincipalofloannoteswhere,althoughtheprincipalremainswithinterm,theinvesteecompanyisnotfullyservicingtheinterestobligationsundertheloannoteandisthusinarrears.Asatthebalancesheetdate,theinterestgivingrisetotheclassificationoftheloannotesaspastduefellwithinthebandingof18to24months.Notwithstandingthearrearsofinterest,theDirectorsdonotconsiderthattheloannoteitselfhasbeenimpairedorthematurityoftheprincipalhasaltered.

Fair Value of Financial InstrumentsFair value measurements recognised in the balance sheetInvestmentsarevaluedatfairvalueasdeterminedusingthemeasurementpoliciesdescribedinnote1.Thecarryingvalueoffinancialassetsandliabilitiesrecordedatamortisedcost,whichincludesshorttermdebtorsandcreditors,isconsideredbyDirectorstobeequivalenttotheirfairvalue.

TheCompanyhascategoriseditsfinancialinstrumentsthataremeasuredsubsequenttoinitialrecognitionatfairvalueusingthefairvaluehierarchyasfollows:

Level1 Reflectsfinancialinstrumentsquotedinanactivemarket(liquidityfundinvestments,investmentslistedontheMainMarketandinvestmentsquotedonAIM);

Level2 Reflectsfinancialinstrumentsthathavepricesthatareobservableeitherdirectlyorindirectly(nosuchinvestmentscurrentlyheld);and

Level3 Reflectsfinancialinstrumentsthathavepricesthatarenotbasedonobservablemarketdata(unquotedequityinvestmentsandloannoteinvestments).


57

2012 2011

Level 1 £'000

Level 2 £'000

Level 3 £'000

Total £'000

Level 1 £'000

Level 2 £'000

Level 3 £'000

Total £'000

AIMquoted 127 – – 127 291 – – 291

Loan notes – – 8,542 8,542 – – 8,339 8,339

Preferenceshares – – 1,625 1,625 – – – –

Unquotedequity – – 7,327 7,327 – – 8,191 8,191

Liquidityfund 2,500 – – 2,500 2,500 – – 2,500

2,627 – 17,494 20,121 2,791 – 16,530 19,321

DuringtheyeartoFebruary2012aholdingof19,000unquotedloannotes,costing£40,000,wereconvertedatparintounquotedshares.Therewerenotransfersbetweenlevelsduringtheyear(2011:none).

Reconciliation of fair value for Level 3 financial instruments held at the year end:Loan Notes

£'000Unquoted Equity

£'000Total £'000

Balanceat28February2011 8,339 8,191 16,530

Movementsintheincomestatement:

Unrealisedgainsintheincomestatement (200) 230 30

(Losses)/gainsintheincomestatement (24) 282 258

8,115 8,703 16,818

Purchases at cost 2,243 1,271 3,514

Salesproceeds (1,776) (1,062) (2,838)

Loanstockconvertedtoshares (40) 40 –

Balanceat29February2012 8,542 8,952 17,494

FRS29requiresdisclosuretobemadeifchangingoneormoreoftheassumptionsusedinvaluinginvestmentswouldresultinasignificantchangeinthefairvalueoftheinvestments.Theportfoliohasbeenreviewedandbothdownsideandupsidealternativeassumptionsidentified.Theseresultinanoverallincreaseof£395,000(OrdinarySharepool-£378,000and‘D’Sharepool-£17,000)tothevalueoftheunquotedinvestmentsforanupsidescenarioandanoveralldecreaseof£216,000(OrdinarySharepool–£55,000and‘D’Sharepool-£161,000)tothevalueoftheunquotedinvestmentsforadownsidescenario.

19 Contingencies, guarantees and financial commitmentsTheCompanyhadguaranteedbankborrowingsofoneofitsinvestments,DonatantonioLimited,amountingto£225,000.AthirdpartyhadprovidedaguaranteetotheCompanyamountingto£112,500inrespectoftheaboveguarantee.Thisguaranteewasdischargedon1March2012.

TheCompanyhasnocontingentliabilities,guaranteesandfinancialcommitmentsattheyearend.

20 Controlling party and related party transactionsIntheopinionoftheDirectorsthereisnoimmediateorultimatecontrollingparty.

BeringeaLLP,ofwhichMalcolmMossisapartner,actedaspromoterfortheOrdinaryShareofferlaunchedinDecember2010.BeringeaLLPreceived5.5%ofthegrossproceedsoftheoffer,outofwhichitpaidthecostsoftheofferincludinginitialcommissions.Thefeesintheyearamounted£549,000.Noissuecostsweredueoroutstandingattheyearend.

BeringeaLLPwasalsotheinvestmentmanagerduringtheyear.Thetotalfeesrelatingtothisserviceamountedto£718,000(2011:£525,000)(allinclusiveofVAT),ofwhich£187,000(2011:£150,000)wasoutstandingattheyearend.

NicholasLewis,aformerDirectorwhoservedduringtheyear,isapartnerofDowningLLP,whichprovidesadministrationservicestotheCompany.Duringtheyear,£52,000(2011:£49,000)(inclusiveofVAT)wasduetoDowningLLPinrespectoftheseservices,ofwhich£13,000(2011:£12,000)remainedoutstandingattheyearend.


Shareholder Information

WebsitesLatestfinancialinformation,includinginformationonrecentinvestmenttransactions,newslettersandelectroniccopiesofAnnualReports,HalfYearlyFinancialStatementsandInterimManagementStatementscanbefoundontheInvestmentManager’swebsite:

www.provenvcts.co.ukDividendhistory,linkstoCompanyannouncementsandotherfinancialinformationcanbefoundonDowning’swebsiteatwww.downing.co.uk.ShareholderscanalsocheckdetailsoftheirshareholdingsusingCapitaRegistrar’swebsiteatwww.capitaregistrars.com,byclickingon“Shareholders”.

DividendsDividendsarepaidbytheRegistraronbehalfoftheCompany.Shareholderswhowishtohavedividendspaiddirectlyintotheirbankaccountratherthanbychequetotheirregisteredaddresscancompleteamandate formforthispurpose(formscanbedownloadedfromwww.capitaregistrars.com).QueriesrelatingtodividendsandrequestsformandateformsshouldbedirectedtotheCompany’sRegistrar,CapitaRegistrars,bycalling08716640324(callscost10pperminuteplusnetworkextras),orbywritingtothematTheRegistry,34BeckenhamRoad,Beckenham,KentBR34TU.

Share pricesTheCompany’ssharepricescanbefoundonvariousfinancialwebsiteswiththefollowingTIDM/EPICcodes:


TIDM/EPICcode “PGOO” “PGOD”

Latestshareprice(22June2012): 63.25ppershare 80.0ppershare

Selling sharesTheCompany’ssharescanbeboughtandsoldinthesamewayasanyothercompanylistedontheLondonStockExchangeviaastockbroker.ShareholderswhoinvestedintheCompanyinthe2008/2009taxyearandsubsequenttaxyearsshouldbeawarethattheyneedtoholdtheirsharesforaminimumperiodoftimetoretaintheincometaxrelieftheyreceivedoninvestment.Sellingyoursharesmayhavetaxconsequences,therefore,youshouldcontactyourindependentfinancialadviserifyouhaveanyqueries.

TheCompanyoperatesapolicyofbuyingitsownsharesforcancellationastheybecomeavailableinthemarket.TheCompanyis,however,unabletobuybacksharesdirectfromShareholders,soyouwillneedtouseastockbrokertosellyourshares.DowningLLPisabletoprovidedetailsofcloseperiods(whentheCompanyisprohibitedfrombuyinginshares)anddetailsofthepriceatwhichtheCompanyhasboughtinshares.Contactdetailsareshownonpage60ofthisdocument.

Financial calendar21August2012 AnnualGeneralMeeting October2012 Announcementofhalf-yearresults

59

Unsolicited communication with ShareholdersWeareawareofcasesofshareholdersinVCTshavingreceivedunsolicitedphonecalls,e-mailsorcorrespondenceconcerninginvestmentmatters.PleasenotethatitisveryunlikelythattheCompany,BeringeaortheCompany’sRegistrar,CapitaRegistrars,wouldmakeunsolicitedtelephonecallsorsende-mailstoShareholders.Shareholderscan,however,expectofficialdocumentationinconnectionwiththeCompanyandmayreceivedetailsofinvestmentactivityandnewVCToffersfromtheInvestmentManager.Furthermore,pleasebeassuredthattheCompanylimitsaccesstotheCompany’sshareregisterbythirdpartiestothemaximumextentpermissibleundertheCompaniesAct2006.Ifyoureceiveeitheranunexpectedtelephonecallorcorrespondenceaboutwhichyouhaveconcerns,pleasecontactGrantWhitehouse,theCompanySecretary,on02074167780.

Notification of change of addressCommunicationswithShareholdersaremailedtotheregisteredaddressheldontheshareregister.Intheeventofachangeofaddress,orotheramendment,thisshouldbenotifiedtotheCompany’sregistrar,CapitaRegistrars,underthesignatureoftheregisteredholder.


Company Information Directors Company SecretaryMarc Vlessing (Chairman) Grant Whitehouse

Natasha Christie-Miller 39EarlhamStreet

Malcolm Moss LondonWC2H9LT

James Stewart

allof:

39EarlhamStreet

LondonWC2H9LT

Investment manager Registered officeBeringea LLP 39EarlhamStreet

39EarlhamStreet LondonWC2H9LT

LondonWC2H9LT Tel:02078457820

Tel:02078457820

www.provenvcts.com

Registrars Administration managerCapita Registrars Downing LLP

TheRegistry 10LowerGrosvenorPlace

34BeckenhamRoad LondonSW1W0EN

Beckenham Tel:02074167780

KentBR34TU www.downing.co.uk

Tel:08716640324

(callscost10pperminuteplusnetworkextras)

www.capitaregistrars.com

Auditor VCT status adviserPKF (UK) LLP PricewaterhouseCoopers LLP

FarringdonPlace 1EmbankmentPlace

20FarringdonRoad LondonWC2N6RH

LondonEC1M3AP

Solicitors BankersHoward Kennedy Bank of Scotland

19CavendishSquare 33 Old Broad Street

LondonW1A2AW LondonEC2N1HZ

Company number Royal Bank of Scotland

4125326 LondonVictoriaBranch

119/121VictoriaStreet

LondonSW1E6RA

61

Notice of the Annual General Meeting of ProVen Growth & Income VCT plc

NOTICE IS HEREBY GIVENthattheAnnualGeneralMeetingofProVenGrowth&IncomeVCTplcwillbeheldinTheForestRoomatTheHospitalClub,24EndellStreet,CoventGarden,LondonWC2H9HQat2:30p.m.on21August2012forthetransactionofthefollowingbusiness:

AsOrdinary Business,toconsiderand,ifthoughtfit,passthefollowingresolutionswhichwillbeproposedasOrdinaryResolutions:

1. ToreceiveandadopttheReportoftheDirectorsandAccountsoftheCompanyfortheyearended29February2012,togetherwiththereportoftheauditorsthereon.

2. ToapprovetheDirectors’RemunerationReport.

3. Toapprovethepaymentofafinaldividendof4.5pperOrdinaryShare.

4. Tore-appointPKF(UK)LLPasAuditorsoftheCompanytoholdofficeuntiltheconclusionofthenextAnnualGeneralMeetingatwhichaccountsoftheCompanyarepresentedandtoauthorisetheDirectorstodeterminetheirremuneration.

5. Tore-electasDirector,MarcVlessing,whoretiresinaccordancewiththeCompany’spolicyand,beingeligible,offershimselfforre-election.

6. Tore-electasdirector,MalcolmMoss,whoretiresinaccordancewiththeCompany’spolicyand,beingeligible,offershimselfforre-election.

7. Tore-electasdirector,JamesStewart,whoretiresinaccordancewiththeCompany’spolicyand,beingeligible,offershimselfforre-election.

8. Tore-electasDirector,NatashaChristie-Miller,whoretiresinaccordancewiththeCompany’spolicyand,beingeligible,offersherselfforre-election.

AsSpecial Business,toconsiderand,ifthoughtfit,passthefollowingresolutions:

Ordinary Resolutions

9. ThattheDirectorsbegenerallyandunconditionallyauthorisedinaccordancewithSection551oftheCompaniesAct2006(“theAct”)toallotOrdinarySharesuptoamaximumnominalamountof£404,675(representingapproximately73%oftheOrdinarySharecapitalinissueattoday’sdate).ThisauthoritytoexpireatthelateroftheconclusionoftheCompany’sAnnualGeneralMeetingnextfollowingthepassingofthisresolutionandtheexpiryof15monthsfromthepassingoftherelevantresolution(unlesspreviouslyrevoked,variedorextendedbytheCompanyingeneralmeetingbutsothatsuchauthorityallowstheCompanytomakeOffersoragreementsbeforetheexpirythereofwhichwouldormightrequirerelevantsecuritiestobeallottedaftertheexpiryofsuchauthority).

10.Thatpursuanttoarticle151(1)oftheCompany’sarticlesofassociation,theDirectorsbeandareherebyauthorisedtoofferholdersofsharesintheCompanytherighttoreceivesharespursuanttotheCompany’sdividendreinvestmentscheme,creditedasfullypaid,insteadofcashinrespectofthewhole(orsomeparttobedeterminedbytheBoard)ofalloranydividenddeclaredintheperiodcommencingonthedateofthisresolutionandending,subjecttothepassingofresolution15below,oneitherthefifthanniversaryofthisresolutionor,ifresolution15isnotpassed,thedateoftheCompany’snextannualgeneralmeeting.

11.ThattheDirectorsbeandareherebygenerallyandunconditionallyauthorisedinaccordancewithSection551oftheActtoexerciseallthepowersoftheCompanytoallotsharesintheCompanyinconnectionwithadividendreinvestmentschemeduringtheperiodcommencingonthepassingofthisresolutionandexpiringonthefifthanniversaryofthisresolution(unlesspreviouslyrevoked,variedorextendedbytheCompanyingeneralmeeting),butsothatthisauthorityshallallowtheCompanytomakebeforetheexpiryofthisauthorityoffersoragreementswhichwouldormightrequiresharestobeallottedaftersuchexpiryandthatallpreviousauthoritiesgiventotheDirectorsbeandtheyareherebyrevoked,providedthatsuchrevocationshallnothaveretrospectiveeffect.


Special Resolutions

12.ToempowertheDirectorspursuanttoSection570(1)oftheActtoallotormakeoffersoragreementstoallotequitysecurities(asdefinedinSection560(1)oftheAct)forcashpursuanttotheauthorityreferredtoinresolution9asifSection561(1)oftheActdidnotapplytoanysuchallotmentsandsothat:

(a) referencetoallotmentinthisresolutionshallbeconstruedinaccordancewithSection94ofthesaidAct;and

(b)thepowerconferredbythisresolutionshallenabletheCompanytomakeanyofferoragreementbeforetheexpiryofthesaidpowerwhichwouldormightrequireequitysecuritiestobeallottedaftertheexpiryofthesaidpowerandthedirectorsmayallotequitysecuritiesinpursuanceofsuchofferoragreementnotwithstandingtheexpiryofsuchpower;andthispower,unlesspreviouslyvaried,revokedorrenewed,shallcometoanendattheconclusionoftheAnnualGeneralMeetingoftheCompanynextfollowingthepassingofthisresolutionor,ifearlier,ontheexpiryof15monthsfromthepassingofthisresolution.

13.That,theCompanybeandisherebygenerallyandunconditionallyauthorisedforthepurposeofsection701oftheActtomakeoneormoremarketpurchases(asdefinedinsection693(4)oftheAct)ofOrdinarySharesand‘D’Sharesprovidedthat:

(i) themaximumnumberofOrdinarySharesherebyauthorisedtobepurchasedis5,116,345representingapproximately14.9%ofthepresentissuedOrdinarySharecapitaloftheCompany,andthemaximumnumberof‘D’Sharesherebyauthorisedtobepurchasedis1,226,704representingapproximately14.9%ofthepresentissued‘D’SharecapitaloftheCompany;

(ii) theminimumprice(exclusiveofexpenses)whichmaybepaidforsuchOrdinarySharesis1.6187pand‘D’Shareis1pbeingthenominalamountthereof;

(iii) themaximumprice(exclusiveofexpenses)whichmaybepaidforsuchOrdinarySharesand‘D’Sharesshallbeanamountequalto5percent.abovetheaverageofthemiddlemarketquotationsforsuchclassoftheCompany’sshares,asderivedfromtheDailyOfficialListoftheLondonStockExchange,forthefivebusinessdaysimmediatelyprecedingthedayonwhichthepurchasewasmade;

(iv) theCompanymaymakeacontracttopurchaseitsownOrdinarySharesor’D’Sharesunderthisauthoritypriortotheexpiryofthisauthority,andsuchcontractwillormaybeexecutedwhollyorpartlyaftertheexpiryofthisauthority,andtheCompanymaymakeapurchaseofitsownOrdinarySharesor‘D’Sharesinpursuanceofanysuchcontract;

andthispower,unlesspreviouslyvaried,revokedorrenewed,shallcometoanendattheconclusionoftheAnnualGeneralMeetingoftheCompanynextfollowingthepassingofthisresolutionor,ifearlier,ontheexpiryof15monthsfromthepassingofthisresolution.

14.ThattheDirectorsbeandareherebyempoweredinaccordancewithsection570(1)oftheActduringtheperiodcommencingonthepassingofthisresolutionandexpiringonthefifthanniversaryofthisresolution(unlesspreviouslyrevoked,variedorextendedbytheCompanyingeneralmeeting),toallotequitysecurities(asdefinedinSection560(i)oftheAct)forcashpursuanttothegeneralauthorityconferredupontheDirectorsinresolution10aboveasifsection561(i)oftheActdidnotapplytoanysuchallotmentprovidedthatthispowerislimitedtotheallotmentofequitysecuritiesinconnectionwithadividendreinvestmentschemebutsothatthisauthorityshallallowtheCompanytomakeoffersoragreementsbeforetheexpiryandtheDirectorsmayallotequitysecuritiesinpursuanceofsuchoffersoragreementsasifthepowersconferredherebyhadnotsoexpired.

15.Thatarticle151(1)oftheCompany’sarticlesofassociationbeamendedtodeletethewords“dateoftheAnnualGeneralMeetingnextfollowing”andsubstitutingthewords“fifthanniversaryof”therefore.

ByorderoftheBoard

Grant WhitehouseCompanySecretaryRegisteredOffice:39EarlhamStreet,LondonWC2H9LT25June2012

Notice of the Annual General Meeting of ProVen Growth & Income VCT plc (continued)

63

Rules of the Dividend Reinvestment Scheme 1. Shareholdersontheregisterofmembersatthecloseofbusinessontherelevantrecorddatemayelect

toreceiveShares,creditedasfullypaid,insteadofreceivingthedividendincashfortherelevantfinancialperiod(“thefullcashdividend”).TheelectionmayonlybemadebyShareholdersinrespectofthewhole(andnotpartonly)oftheirshareholdingsandshall,subjecttoCondition7,operateasamandateinrespectofallsubsequentdividendsunlessanduntiltheShareholdergivesnoticetoterminatehisorherparticipationintheSchemeinaccordancewiththetermsoftheScheme.

2. ShareholdersmayonlyjointheSchemeinrespectofanyclassofSharesifalldividendsonallSharesintheCompanyregisteredintheirname,ofwhatevershareclass,aremandatedtotheScheme.ThenumberofSharesheldbysuchShareholder(a“ParticipatingShareholder”)whicharemandatedtotheSchemeshallbealteredimmediatelyfollowinganychangetothenumberofSharesinrespectofwhichsuchShareholderistheregisteredholderasenteredontotheregisterofmembersoftheCompanyfromtimetotime.

3. TheCompanyshallinvestthemoniesheldwithintheScheme(beingdividendspaidonSharesby,oronbehalfof,ParticipatingShareholders)inthesubscriptionofSharesofthesameclassintheCompany.TheCompanyshallnothavethediscretiontovarysuchinvestmentsandShareholdersmaynotinstructtheCompanyortheSchemeAdministratortomakeanyotherinvestments.

4. (a)OnorassoonaspracticableafteradayonwhichanydividendispaidtoShareholders(a“ReinvestmentDay”),thefundsheldbytheCompanyonbehalfofeachParticipatingShareholdershallbeappliedonbehalfofthatShareholderinthesubscriptionforthemaximumnumberofSharesascanbeacquiredwiththosefunds.(b)ThenumberofSharesissuedtoaParticipatingShareholderpursuanttocondition4(a)aboveshallbecalculatedbydividingtheaggregatevalueofthedividendspaidontheSharestowhichtheParticipatingShareholderisentitledbythegreaterof(i)themostrecentlyannouncedunauditednetassetvalueperShare,lesstheamountofthedividendandanyrelatedperformanceincentive(unlessaccountedforinthemostrecentlyannouncednetassetvalueperShare);and(ii)thenominalvalueperShare.(c)NofractionsofShareswillbeissuedundertheSchemeandsubjecttocondition4(d)belowtheelectionmayonlybemadebyShareholdersinrespectofthewholeandnotpartoftheirshareholdings.AnybalanceofcashremainingwiththeCompanyafterthesubscriptionshallbeheldbytheCompanyonbehalfoftheParticipatingShareholdertowhomitrelatesandaddedtothecashavailableinrespectofthatShareholderforthesubscriptionoftherelevantclassofSharesonthenextrelevantReinvestmentDay.NointerestshallaccrueorbepayablebytheCompanyinfavourofanyShareholderonanysuchcashbalances.(d)TheSchemeinvolvesthereinvestmentofthewholedividendpaidoneachshareholdingeachtimeadividendispaidbytheCompany,togetherwithanycashresiduebroughtforwardfromthepreviousdividend.Partialreinvestmentofdividendsisonlypermittedbynominees,whoneedtolodgeaMandateFormforeachReinvestmentDayquotingthenumberofSharesinrespectofwhichtheirelectionismade.ShareholderswillremainintheSchemesothatallfuturedividendswillbereinvestedinthesameway,untiltheygivenoticeinwritingtotheSchemeAdministratorthattheywishtoterminatetheirparticipationintheScheme.

5. TheSchemeAdministratorshallontherelevantReinvestmentDaytakeallnecessarystepstoensurethattheParticipatingShareholdersareenteredontotheshareregisteroftheCompanyastheregisteredholdersoftheShares,issuedtothemundertheScheme,andthatsharecertificatesinrespectofsuchsharesissuedarepostedtotheParticipatingShareholdersattheirownriskassoonasisreasonablypractical,unlesssuchsharesaretobeuncertificated.

6. ToassistParticipatingShareholderswiththeirtaxreturns,theSchemeAdministratorwillattachtothenewsharecertificatesaStatementofEntitlement,orifsharesareheldinuncertificatedform,aStatementofEntitlementwillbesenttoaParticipatingShareholderseparately,detailingthefollowing:-(i)thetotaldividendpayable;(ii)thesubscriptionpriceperShare;(iii)thenumberofSharesallottedtoaParticipating

Appendix to Resolution 10


Shareholder;(iv)theresidualcashbalance(ifany)representinganentitlementtoafractionofaSharetobecarriedforwardtothenextdividend;and(v)thecashequivalentoftheSharesissued,togetherwithanysuchotherinformationasshallberequiredundertheListingRulesoftheFinancialServicesAuthority.

7. ApplicationtojointheSchemecanbemadeatanytimebyreturningacompletedMandateForm.However,MandateFormsneedtohavebeenreceivedbyBeringeaLLP,39EarlhamStreet,London,WC2H9LTatleast20BusinessDayspriortothepaymentofadividendwhichistobereinvested.MandateFormsreceivedafterthatdateshallbeeffectiveinrelationtoanyfuturedividendsinrespectofwhichtheDirectorsofferadividendreinvestmentalternative.

8. If,priortothedayonwhichtheSharesbecameex-dividend,aShareholderhassoldallorsomeofhisorherholdingsinShares,theShareholdershouldconsulthisorherstockbrokeroragentwithoutdelay.

9. AnapplicationwillbemadetotheUKListingAuthorityforadmissionoftheSharesissuedundertheSchemetotheOfficialListandtotheLondonStockExchangeplcforadmissiontotradingontheLondonStockExchangeplc’smainmarketforlistedsecurities(together“Admission”).Onissue,theShareswillrankparipassuinallrespectswiththeexistingissuedSharesofthatclassandwillrankforfuturedividends.SubjecttoAdmission,definitivesharecertificatesfortheShareswillbepostedassoonaspracticablefollowingAdmissionattheriskofthepersonsentitledtothem.WhereSharesareissuedasuncertificatedshares,assoonaspracticablefollowingAdmissiontheCompanywillarrangefortherelevantParticipatingShareholders’stockaccountsinCRESTtobecreditedwiththeirentitlementtoSharesandaStatementofEntitlementwillbepostedtothem.ShareswillbeallottedasandwhentheDirectorsdetermineitappropriate,withAdmissionandDealingsexpectedwithin10BusinessDaysofallotment.ShareCertificateswillnotbeissuedandCRESTaccountswillnotbecrediteduntilAdmissionbecomeseffective.IntheeventthatAdmissiondoesnotbecomeeffective,MandateFormswillbedisregardedinrespectofthedividendandthefullcashdividendwillbepaidassoonaspossibleintheusualway.

10.Furthercopiesofthisdocumentand/orMandateFormsmaybeobtainedfromBeringeaLLP,39EarlhamStreet,London,WC2H9LT.

11.AllcostsandexpensesincurredbytheSchemeAdministratorinadministeringtheSchemewillbebornebytheCompany.

12.EachShareholderapplyingtoparticipateintheSchemewillbedeemedtowarranttotheSchemeAdministratorandtheCompanyintheMandateFormthat(i)saveinthecaseofaShareholderholdinghisSharesasnominee,duringthecontinuanceofhisorherparticipationintheSchemeheorshewillremainthesolebeneficialowneroftheSharesmandatedtotheSchemefreefromencumbrancesorsecurityinterests;and(ii)allinformationsetoutintheMandateFormiscorrectand,totheextentanyoftheinformationchanges,heorshewillnotifythechangestotheSchemeAdministrator.

13.EachParticipatingShareholderacknowledgesthatnoneoftheCompany,theSchemeAdministratornorBeringeaLLPisprovidingadiscretionarymanagerservice.NeithertheSchemeAdministrator,BeringeaLLPortheCompanyshallberesponsibleforanylossordamagetoParticipatingShareholdersasaresultoftheirparticipationintheSchemeunlessduetothenegligenceordefaultoftheSchemeAdministratorortheCompany(respectively),itsservantsoragents.

14.Thefinancialcalendarandprocedureforfuturedividendsbothastoanyfinaland/orinterimdividendwillbenotifiedinwritingtoShareholdersand/orpublishedthroughanRIS.

15.TheParticipatingShareholdermayatanytime,bynoticeofnotlessthan20BusinessDayspriortotherelevantReinvestmentDaytotheSchemeAdministrator,terminatehisorherparticipationinthisScheme.IfaParticipatingShareholdershallatanytimeceasetoholdanySharesofaparticularclassintheCompany,heorsheshallbedeemedtohaveservedsuchanoticeinrespectofhisorherparticipationintheSchemeinrespectofthatclassofShares.

16.TheCompanyandtheSchemeAdministratorshallbeentitled,atanytimeandfromtimetotime,tosuspendtheoperationoftheSchemeinwholeorinpartand/ortoterminatetheSchemewithoutnoticetotheParticipatingShareholders.CircumstancesunderwhichtheDirectorsmightsuspendorterminatetheSchemeinclude,butarenotlimitedtochangesinlegislationgoverningVCTs(includingchangesinavailabletaxreliefs)andadversemarketconditionsinthepublicmarkets.


65

17.AllnoticesandinstructionstobegiventotheSchemeAdministratorshallbeinwritinganddeliveredorpostedtoCapitaRegistrarsLimited,TheRegistry,34BeckenhamRoad,BeckenhamBR34TU.ApplicationstoparticipateintheSchemewillbemadebywayofMandateFormintheprescribedformasprovidedbyBeringeaLLPortheSchemeAdministrator.

18.SubjecttotheprioragreementoftheSchemeAdministrator,theDirectorsshallbeentitledtoamendtheSchemetermsandconditionsongivingonemonth’snoticeinwritingtoallParticipatingShareholders.Ifsuchamendmentshavearisenasaresultofanychangeinstatutoryorotherregulatoryrequirements,noticeofsuchamendmentwillnotbegiventoParticipatingShareholdersunless,intheSchemeAdministrator’sopinion,thechangemateriallyaffectstheinterestsofParticipatingShareholders.AmendmentstotheSchemeTermsandConditionswhichareofaformal,minorortechnicalnature,ormadetocorrectamanifesterrorandwhichdonotadverselyaffecttheinterestsofParticipatingShareholders,maybeeffectedwithoutnotice.

19.BycompletinganddeliveringtheMandateFormprovidedbytheSchemeAdministrator,theParticipatingShareholderwill(i)agreetoprovidetheCompanywithanyinformationwhichitmayrequestinconnectionwithsuchapplicationandtocomplywithlegislationrelatingtoVCTsorotherrelevantlegislation(asthesamemaybeamendedfromtimetotime);and(ii)declarethatnoloanhasbeenmadetotheParticipatingShareholderoranyassociate,whichwouldnothavebeenmade,ornothavebeenmadeonthesametermsbutfortheParticipatingShareholderofferingtosubscribefor,oracquiring,Shares,andthattheSharesarebeingacquiredforbonafidecommercialpurposesandnotaspartofaschemeorarrangement,themainpurposeofwhichistheavoidanceoftax.

20.SubscriptionsforVCTsharesonlyattracttaxreliefsifinanytaxyearsubscriptionstoallVCTsdonotexceed£200,000(includingsubscriptionspursuanttodividendreinvestmentschemes).WhereSharesareheldbyanomineeasattherelevantrecorddate,thatnominee’sbeneficiarywillnotbeentitledtoreceivethetaxreliefsotherwiseavailabletoParticipatingShareholdersundertheScheme.ParticipatingShareholdersundertheSchemeareresponsibleforascertainingtheirowntaxstatusandliabilitiesandneithertheSchemeAdministratornortheCompanycanacceptanyliabilityintheeventtheydonotreceiveanyVCTtaxreliefs,orsuchreliefsarereducedorrestrictedinanyway.

21.DividendsonSharesacquiredinexcessof£200,000inanytaxyearwillnotbeexemptedfromincometaxinthesamewayasSharesacquiredwithinthislimit,thereforeParticipatingShareholderswillgenerallybeliabletotaxonsuchdividends.

22.TheelectiontoreceiveSharesinplaceofthecashdividendisnotbeingofferedto,orforthebenefitof,anycitizenoftheUnitedStates,CanadaorAustralia,anycorporation,partnershiporotherentitycreatedororganisedin,orunderthelawsoftheUnitedStates,CanadaorAustraliaoranypoliticalsub-divisionthereoforwitharegisteredofficeinanyofthesecountriesoranyestateortrust,theincomeofwhichissubjecttoUnitedStatesFederal,orCanadian,orAustralianincometaxationregardlessofitssource.“UnitedStates”meansUnitedStatesofAmerica(includingtheDistrictofColumbia).ReferencestotheUnitedStates,CanadaandAustraliaincludetheirterritories,possessionsandallareassubjecttotheirjurisdiction.NopersonreceivingacopyoftheCircularand/orMandateForminanyterritoryotherthantheUnitedKingdommaytreatitasconstitutinganinvitationtohimunlessintherelevantterritorysuchaninvitationcouldlawfullybemadetohimwithoutcomplyingwithanyregistrationorotherlegalrequirements.

It is the responsibility of the Shareholder outside the United Kingdom wishing to elect to receive Shares to satisfy himself as to the full observance of the laws of the relevant territory in connection with the offer, including obtaining any governmental or other consents which may be necessary and observing any other formalities requiring to be observed in such territory.

23.TheCompanyshallnotberequiredtoissueShareshereunderiftheDirectorssodecideintheirabsolutediscretion.IftheDirectorsdecidenottoissueShareshereunder,thefullcashdividendwillbepaidassoonaspossibleintheusualway.

24.TheseSchemetermsandconditionsshallbegovernedby,andconstruedinaccordancewith,EnglishlawandeachParticipatingShareholdersubmitstothejurisdictionoftheEnglishcourtsandagreesthatnothingshalllimittherightoftheCompanytobringanyaction,suitorproceedingarisingoutoforinconnectionwiththeSchemeinanyothermannerpermittedbylaworinanycourtofcompetentjurisdiction.Shareholders in any doubt about their tax position should consult their independent adviser.


DEFINITIONS

“theCompany” ProVenGrowthandIncomeVCTplc,registeredwiththeRegistrarofCompaniesofEnglandandWaleswithregisterednumber4125326andwhoseregisteredofficeis39EarlhamStreet,LondonWC2H9LT;

“CREST” therelevantsystem(asdefinedintheRegulations)inrespectofwhichEuroclearistheOperator(asdefinedintheRegulations);

“Directors” directorsoftheCompany

“Euroclear” EuroclearUKandIrelandLimited;

"ListingRules” thelistingrulesoftheFinancialServicesAuthoritymadeundersection73AofFSMA;

“MandateForm” theformattheendofthisdocumentwhichenablesShareholderstoparticipateintheDividendReinvestmentScheme;

“Regulations” theUncertificatedSecuritiesRegulations2001(SI2001/3755);

“Scheme”or“DividendReinvestmentScheme” thedividendreinvestmentschemethetermsandconditionsofwhicharedescribedinthisdocument;

“SchemeAdministrator” CapitaRegistrarsLimited,TheRegistry,34BeckenhamRoad,Beckenham,KentBR34TU;

“Shares” sharesinthecapitaloftheCompany;

“Shareholders” holdersofthesharesinthecapitaloftheCompany;

“VCT” VentureCapitalTrust.

InformationregardingtheAnnualGeneralMeeting,includingtheinformationrequiredbysection311AoftheCompaniesAct2006,isavailablefromwww.downing.co.uk.

Note: Please see the notes set out on page 67 and 68 which contain important information about the Annual General Meeting.


67

Notesa. AnymemberoftheCompanyentitledtoattendandvoteattheAnnualGeneralMeetingisalsoentitledto

appointoneormoreproxiestoattend,speakandvoteinsteadofthatmember.AmembermayappointmorethanoneproxyinrelationtotheAnnualGeneralMeetingprovidedthateachproxyisappointedtoexercisetherightsattachedtoadifferentshareorsharesheldbythatmember.Aproxymaydemand,orjoinindemanding,apoll.AproxyneednotbeamemberoftheCompanybutmustattendtheAnnualGeneralMeetinginordertorepresenthisappointor.AmemberentitledtoattendandvoteattheAnnualGeneralMeetingmayappointtheChairmanoranotherpersonashisproxyalthoughtheChairmanwillnotspeakforthemember.Amemberwhowisheshisproxytospeakforhimshouldappointhisownchoiceofproxy(nottheChairman)andgiveinstructionsdirectlytothatperson.IfyouarenotamemberoftheCompanybutyouhavebeennominatedbyamemberoftheCompanytoenjoyinformationrights,youdonothavearighttoappointanyproxiesundertheproceduressetoutintheseNotes.PleasereadNote(h)below.Undersection319AoftheAct,theCompanymustansweranyquestionamemberasksrelatingtothebusinessbeingdealtwithattheAnnualGeneralMeetingunless:

• answeringthequestionwouldinterfereundulywiththepreparationfortheAnnualGeneralMeetingorinvolvethedisclosureofconfidentialinformation;

• theanswerhasalreadybeengivenonawebsiteintheformofananswertoaquestion;or

• itisundesirableintheinterestsoftheCompanyorthegoodorderoftheAnnualGeneralMeetingthatthequestionbeanswered.

b. Tobevalid,aFormofProxyandthepowerofattorneyorotherwrittenauthority,ifany,underwhichitissignedoranofficeornotariallycertifiedcopyoracopycertifiedinaccordancewiththePowersofAttorneyAct1971ofsuchpowerandwrittenauthority,mustbedeliveredtoDowningLLP,10LowerGrosvenorPlace,[email protected],ineachcasenotlessthan48hours(excludingweekendsandpublicholidays)beforethetimeappointedforholdingtheAnnualGeneralMeetingoradjournedmeetingatwhichthepersonnamedintheFormofProxyproposestovote.Inthecaseofapolltakenmorethan48hours(excludingweekendsandpublicholidays)afteritisdemanded,thedocument(s)mustbedeliveredasaforesaidnotlessthan24hours(excludingweekendsandpublicholidays)beforethetimeappointedfortakingthepoll,orwherethepollistakennotmorethan48hours(excludingweekendsandpublicholidays)afteritwasdemanded,bedeliveredatthemeetingatwhichthedemandismade.

c. InordertorevokeaproxyinstructionamemberwillneedtoinformtheCompanyusingoneofthefollowingmethods:

•bysendingasignedhardcopynoticeclearlystatingtheintentiontorevoketheproxyappointmenttoDowningLLP,10LowerGrosvenorPlace,LondonSW1W0EN.Inthecaseofamemberwhichisacompany,therevocationnoticemustbeexecutedunderitscommonsealorsignedonitsbehalfbyanofficerofthecompanyoranattorneyforthecompany.Anypowerofattorneyoranyotherauthorityunderwhichtherevocationnoticeissigned(oradulycertifiedcopyofsuchpowerorauthority)mustbeincludedwiththerevocationnotice;or

•[email protected].

Ineithercase,therevocationnoticemustbereceivedbyDowningLLPbeforetheAnnualGeneralMeetingortheholdingofapollsubsequentlythereto.Ifamemberattemptstorevokehisorherproxyappointmentbuttherevocationisreceivedafterthetimespecifiedthen,subjecttoNote(d)directlybelow,theproxyappointmentwillremainvalid.

Notes for the Notice of Annual General Meeting


d. CompletionandreturnofaFormofProxywillnotprecludeamemberoftheCompanyfromattendingandvotinginperson.IfamemberappointsaproxyandthatmemberattendstheAnnualGeneralMeetinginperson,theproxyappointmentwillautomaticallybeterminated.

e. CopiesoftheDirectors’LettersofAppointmentandtheRegisterofDirectors’interestsintheOrdinarySharesand‘D’SharesoftheCompany,willbeavailableforinspectionattheregisteredofficeoftheCompanyduringusualbusinesshoursonanyweekday(weekendsandpublicholidaysexcluded)fromthedateofthisnoticeuntiltheconclusionoftheAnnualGeneralMeetingandattheplaceofthemeetingforatleast15minutespriortothemeetinguntilitsconclusion.

f. PursuanttoRegulation41oftheUncertificatedSecuritiesRegulations2001,theCompanyhasspecifiedthatonlythoseholdersoftheCompany’ssharesregisteredontheRegisterofMembersoftheCompanyasat2:30p.m.on17August2012or,intheeventthattheAnnualGeneralMeetingisadjourned,ontheRegisterofMembers48hoursbeforethetimeofanyadjournedmeeting,shallbeentitledtoattendandvoteatthesaidAnnualGeneralMeetinginrespectofsuchsharesregisteredintheirnameattherelevanttime.ChangestoentriesontheRegisterofMembersafter11:00p.m.on17August2012or,intheeventthattheAnnualGeneralMeetingisadjourned,ontheRegisterofMemberslessthan48hoursbeforethetimeofanyadjournedmeeting,shallbedisregardedindeterminingtherightofanypersontoattendandvoteattheAnnualGeneralMeeting.

g. Asat9:00a.m.on25June2012,theCompany’sissuedsharecapitalcomprised34,337,891OrdinarySharesand8,232,914‘D’SharesandthetotalnumberofvotingrightsintheCompanywere42,570,805.Informationonthenumberofsharesandvotingrightscanbefoundatwww.downing.co.uk.

h. Ifyouareapersonwhohasbeennominatedundersection146oftheActtoenjoyinformationrights(“NominatedPerson”):

• YoumayhavearightunderanagreementbetweenyouandthememberoftheCompanywhohasnominatedyoutohaveinformationrights(“RelevantMember”)tobeappointedortohavesomeoneelseappointedasaproxyfortheAnnualGeneralMeeting;

• Ifyoueitherdonothavesucharightorifyouhavesucharightbutdonotwishtoexerciseit,youmayhavearightunderanagreementbetweenyouandtheRelevantMembertogiveinstructionstotheRelevantMemberastotheexerciseofvotingrights;and

•YourmainpointofcontactintermsofyourinvestmentintheCompanyremainstheRelevantMember(or,perhapsyourcustodianorbroker)andyoushouldcontinuetocontactthem(andnottheCompany)regardinganychangesorqueriesrelatingtoyourpersonaldetailsandyourinterestintheCompany(includinganyadministrativematters).TheonlyexceptiontothisiswheretheCompanyexpresslyrequestsaresponsefromyou.

i. Acorporationwhichisamembercanappointoneormorecorporaterepresentativeswhomayexercise,onitsbehalf,allitspowersasamemberprovidedthatnomorethanonecorporaterepresentativeexercisespowersoverthesameshare.

j. Avotewithheldisnotavoteinlaw,whichmeansthatthevotewillnotbecountedinthecalculationofvotesfororagainsttheresolution.Ifnovotingindicationisgiven,theproxywillvoteorabstainfromvotingathisorherdiscretion.Theproxywillvote(orabstainfromvoting)asheorshethinksfitinrelationtoanyothermatterwhichisputbeforetheAnnualGeneralMeeting.

k. Exceptasprovidedabove,memberswhohavegeneralqueriesabouttheAnnualGeneralMeetingshouldwritetotheChairmanattheregisteredofficesetoutabove.

l. MembersmaynotuseanyelectronicaddressprovidedeitherinthisnoticeofAnnualGeneralMeeting,oranyrelateddocuments(includingtheChairman'sletterandFormofProxy),tocommunicatewiththeCompanyforanypurposesotherthanthoseexpresslystated.

Notes for the Notice of Annual General Meeting (continued)

Form of Proxy – ProVen Growth & Income VCT plc

ForuseattheAnnualGeneralMeetingoftheabove-namedCompanytobeheldon21August2012,inTheForestRoomatTheHospitalClub,24EndellStreet,CoventGarden,LondonWC2H9HQat2:30p.m.

I/We* (BLOCKCAPITALSplease)

of

beingtheholder(s)*ofOrdinaryShares/‘D’Sharesinthecapitaloftheabove-namedCompany,herebyappointtheChairmanofthemeeting(seenote1)

or

of

asmy/our*proxytoattendforme/us*onmy/our*behalfattheAnnualGeneralMeetingoftheCompanytobeheldinTheForestRoomatTheHospitalClub,24EndellStreet,CoventGarden,LondonWC2H9HQon21August2012oratanyadjournmentthereof.

I/We*desiretovoteontheresolutionsasindicatedintheappropriatecolumnbelow.Pleaseindicatewithan“X”howyouwishyourvotetobecast.

DetailsoftheresolutionsaresetoutintheNoticeoftheAnnualGeneralMeeting.

ORDINARY BUSINESS FOR AGAINST WITHHELD

1. ToreceiveandadopttheDirectors’ReportandAccounts.

2. ToapprovetheDirectors’RemunerationReport.

3. Toapprovethepaymentofafinaldividendof4.5pperOrdinaryShare.

4. Tore-appointtheauditorandauthorisetheDirectorstodeterminetheirremuneration.

5. Tore-electMarcVlessingasadirector.

6. Tore-electMalcolmMossasadirector.

7. Tore-electJamesStewartasadirector.

8. Tore-electNatashaChristie-Millerasadirector.

SPECIAL BUSINESS

9. ToauthorisetheDirectorstoallotshares.

10. ToadopttheDividendReinvestmentScheme.

11. ToauthorisetheDirectorstoallotOrdinarySharesinconnectionwith

theDividendReinvestmentScheme.

12. Todisapplypre-emptionrights.

13. ToauthorisetheCompanytomakemarketpurchasesofitsshares.

14. Todisapplypre-emptionrightsinrespectofsharesallottedpursuantto

theDividendReinvestmentScheme.

15. Toamendarticle151(1)oftheCompany'sarticlesofassociationwithrespect

totheallotmentofsharespursuanttotheDividendReinvestmentScheme.

Signature(s) Date

NOTES AND INSTRUCTIONS:

1. AnymemberoftheCompanyentitledtoattendandvoteattheMeetingisalsoentitledtoappointoneormoreproxiestoattend,speakandvoteinsteadofthatmember.AmembermayappointmorethanoneproxyinrelationtotheAnnualGeneralMeetingprovidedthateachproxyisappointedtoexercisetherightsattachedtoadifferentshareorsharesheldbythatmember.Aproxymaydemand,orjoinindemanding,apoll.AproxyneednotbeamemberoftheCompanybutmustattendtheMeetinginordertorepresenthisappointor.AmemberentitledtoattendandvoteatthemeetingmayappointtheChairmanoranotherpersonashisproxy,althoughtheChairmanwillnotspeakforthemember.Amemberwhowisheshisproxytospeakforhimshouldappointhisownchoiceofproxy(nottheChairman)andgiveinstructionsdirectlytothatperson.

2. Delete“theChairmanofthemeeting”ifitisdesiredtoappointanyotherpersonandinserthisorhernameandaddress.Ifnonameisinserted,theproxywillbedeemedtohavebeengiveninfavouroftheChairmanofthemeeting.IfthisFormofProxyisreturnedwithoutstatinghowtheproxyshallvoteonanyparticularmattertheproxywillexercisehisdiscretionastowhether,andifsohow,hevotes.

3. AnyalterationstotheFormofProxyshouldbeinitialled.

4. Tobevalid,thisFormofProxyandthepowerofattorneyorotherwrittenauthority,ifany,underwhichitissignedoranofficeornotariallycertifiedcopyoracopycertifiedinaccordancewiththePowersofAttorneyAct1971ofsuchpowerandwrittenauthority,mustbedeliveredtoDowningLLP,10LowerGrosvenorPlace,LondonSW1W0ENnotlessthan48hours(excludingweekendsandpublicholidays)beforethetimeappointedforholdingtheMeetingoradjournedmeetingatwhichthepersonnamedinthisFormofProxyproposestovote.Inthecaseofapolltakenmorethan48hours(excludingweekendsandpublicholidays)afteritisdemanded,thedocument(s)mustbedeliveredasaforesaidnotlessthan24hours(excludingweekendsandpublicholidays)beforethetimeappointedfortakingthepoll,orwherethepollistakennotmorethan48hours(excludingweekendsandpublicholidays)afteritwasdemanded,andbedeliveredatthemeetingatwhichthedemandismade.

5. Inthecaseofacorporation,thisformmustbeunderitscommonsealorunderthehandofsomeofficerorattorneydulyauthorisedonthatbehalf.

6. Inthecaseofjointholders,thevoteoftheseniorholdertenderingavotewillbeacceptedtotheexclusionofthevotesoftheotherjointholders.Senioritydependsontheorderinwhichthenamesstandintheregisterofmembers.

7. ThecompletionandreturnofthisFormofProxywillnotprecludeyoufromattendingandvotingattheAnnualGeneralMeetingshouldyousubsequentlydecidetodoso.IfamemberappointsaproxyandthatmemberattendstheAnnualGeneralMeetinginperson,theproxyappointmentwillautomaticallybeterminated.

8. Avotewithheldisnotavoteinlaw,whichmeansthatthevotewillnotbecountedinthecalculationofvotesfororagainsttheresolution.Ifnovotingindicationisgiven,theproxywillvoteorabstainfromvotingathisorherdiscretion.Theproxywillvote(orabstainfromvoting)asheorshethinksfitinrelationtoanyothermatterwhichisputbeforetheAnnualGeneralMeeting.

*Deleteasappropriate

Project2 Layout 1 - ProVen VCTs€¦ · Net asset value per share 82.2 86.4 86.8 90.0 Dividends...

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Transcript of Project2 Layout 1 - ProVen VCTs€¦ · Net asset value per share 82.2 86.4 86.8 90.0 Dividends...