Final Results (4177A)

TIDMAQT2 TIDMAQ2C

RNS Number : 4177A

Acuity Growth VCT PLC

31 January 2011

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Overview

During the year ended 30 September 2010, the Net Asset Value (NAV) of the ordinary shares decreased by 33% and the C shares decreased by 2%. In the same period the FTSE All Share Index increased by 9%.

Change of Investment Manager

On 13 December 2010, the Board announced that it was interviewing other Investment Managers with a view to appointing a new Investment Manager for the fund. An agreement has been reached in principle on a new Investment Manager, and the Board are taking independent legal advice on terms for the outgoing Investment Manager.

Ordinary Shares

On 30 September 2010 the NAV per Ordinary share was 59.1p. When cumulative dividends are included (4.5p paid since the Company's inception), the total was 63.6p per ordinary share, a decrease of 32% over the period.

The performance of the portfolio in the second half of the year has been to say the least, very disappointing. The Company's largest holding, the Fin Machine Company, experienced significant shortages of working capital in the second part of the year. A new Chairman has been appointed and corrective steps are being taken, which in due course, might lead to a recovery in the Investment. However, in line with the Company's investment methodology, Fin Machine's valuation declined by 52% on last year and accounted for the majority of the overall decline in the NAV of the fund. Further details of the movement in the investment portfolio are contained within the Investment Manager's report.

The investment portfolio is heavily weighted towards unquoted investments, which now represent over 90% of the portfolio by value. The portfolio comprises investments in 20 companies but has become increasingly concentrated, with the top five investments now representing over 58% of the total.

C shares

As at 30 September 2010 the NAV per C shares was 85.2p a decrease of 2% over the period.

Co-investment

The company in most cases co-invested alongside Acuity VCT 3 plc managed by Acuity Capital. This arrangement has enabled the fund to participate in larger unquoted investments than would otherwise have been possible

Portfolio Activity

Soon after the year ended, the Company realised its holding in Amber Taverns and received GBP3.9 million, an uplift of 2.9x of the original cost of the investment. Amber Taverns owned a number of freehold pubs aimed at the lower end of the marketplace. The original investment was made in 2006.

A further GBP1.8m was invested in the year to support existing portfolio companies, the largest of these being the Fin Machine Company and Loseley Dairy Ice Cream.

Merger with Acuity VCT Plc

In January 2010 shareholders approved the merger of the Company with Acuity VCT Plc, and the Company was renamed Acuity Growth VCT Plc. Shareholders in Acuity VCT Ordinary and C shares received new Ordinary shares in Acuity Growth VCT. Any queries about new share certificates should be addressed to Capita Registrars, whose contact details are set out in the Company Information section.

Dividends and Share Buy Backs

In light of the economic conditions over the past two years and the shortage of cash in the portfolio, difficult decisions have had to be made by the Board about dividends and share buy backs. The main priority has been to ensure that funds were available to support investee companies hit by the recession. Although the worst effects of the recession may now be behind us, the Board continues to review the liquidity position of the portfolio closely.

Top Up Offer

A top up offer was made to existing shareholders in the year. In total GBP0.3m was raised under the offer, which closed on 30 September 2010.

Self Invested Pension Plan (SIPP) service

Working with Cavendish Ware (www.cavendishware.co.uk) the Investment Manager has arranged, if desired, that shareholders will be able to place their shares in the Company in a SIPP, thereby becoming eligible for additional tax incentives. However, moving VCT shares into a SIPP is treated as a disposal for tax purposes, which has implications for investors sheltering CGT gains or whose VCTs have not yet reached the end of the minimum holding period for income tax relief.

Risks

Risks associated with the Company are set out in detail in the Report of the Directors' and in note 20 of the Notes to the Accounts. The Board recognises that opportunities for selling both quoted and unquoted investments have been reduced by the financial crisis of 2007-09, and the fair market value of its unquoted holdings may also have been affected. However, the Company believes that it has insignificant exchange risk, and only minor credit or interest rate risk.

Outlook

Although the main impact of the recession seems to have passed, smaller companies are still struggling to manage liquidity as market conditions remain tight. In addition, the full impact of the Government's budgetary measures may well have a material impact on many companies this year. In changing the Investment Manager, the board recognises that shareholders will be hoping for a significant improvement in the fortunes of their company, but realistically this may take time to come through.

Rupert Pennant-Rea

Chairman

31 January 2011

As set out in the investment strategy on page 2 of the Report, our objective is to invest in small unquoted companies with significant existing revenues and profits and to seek to add value through organic growth and buy and build strategies. Access to these types of investment is enhanced through co-investing with Acuity VCT 3 Plc.

Performance Review

Although the first half results indicated that the portfolio had weathered the worst of the economic recession, four portfolio companies have since reported difficulties in the summer which have had a significant negative impact on the year end Net Asset Value. As at 30 September 2010, the Net asset Value per share had fallen to 59.1p a reduction of 33% over the year. The main declines in the year were The Fin Machine Company, Loseley Dairy Ice Cream, Munro Global and Target Entertainment. Collectively they accounted for the majority of the overall decrease in the net asset value.

Fin Machine Company encountered a working capital stretch as a result of its expansion into China. This had a knock on impact on trading which has resulted in a disappointing year for the company. The fund invested a further GBP360,000 to bridge the working capital shortfall. We have instigated the appointment of a new Chairman. The company also replaced its Financial Director and put in place tighter internal controls. The company has started its new financial year with an improved order book, and under the new management team the long term growth prospects for the company are promising. The key driver of future growth will be the continued growth of the automotive sector in China and India and the adoption of its cooling technology by air conditioning manufacturers. To take advantage of these opportunities, the company may need further injections of capital.

Although Loseley Dairy Ice Cream attracted other investors in the year, the delay in receiving the funding meant that the company was unable to achieve the production efficiencies it had planned for and as a result profitability was below forecast. Over the last eighteen months the company has made good progress in increasing its annualised turnover and winning new customers. In particular it won a supply contract with a major national retailer, a significant milestone, which could lead to a much larger orders over the next two years. A new CEO, Neil Burchell, the former MD of Yoghurt producer Rachel's, has been appointed. Loseley has the opportunity to further grow its own label business and to use the benefits of scale to market its own higher margin ice cream brands, Loseley, Thayers and Yorkshire Dales.

Munro Global is a market research company which has demonstrated good growth both organically and through bolt on acquisitions. One of its trading subsidiaries which had established good long term contracts with the public sector has recently disappointed following the impact of the economic downturn. This has necessitated a programme of redundancies and a material shortfall in forecast profitability for the current year.

Despite Target Entertainment receiving an attractive offer, a successful negotiation between the prospective buyer and all the shareholders proved elusive. As a result, the company's bank decided to place the company into administration. The downturn in the media sector had put the company under significant pressure with its drama production business, in particular, suffering from a lack of commissions from the TV broadcasters.

On a more positive note, Amber Taverns, the pub operator, was sold to LGV in October at an uplift of 2.9x cost. Amber Taverns was an investment made by the fund in 2006 with a similar structure to Nectar Taverns which had also been a very successful deal for the fund. The key to the success of the transaction was an experienced management team who were able to acquire underperforming pubs in the North West of England at attractive prices and to drive through better operating performance in each unit.

The best performer in the period was Factory Media who have continued to show good momentum in their online website mpora.com. Factory Media has become one of Europe's largest and most innovative Action Sports media owners with 19 traditional print publications and 23 new media brands reaching over 500,000 readers and 4 million online users every month. The business currently focuses on two market segments, Boardsports and Bike, with an international footprint and multilingual products.

The results for the last six months have been disappointing largely due to trading difficulties at four portfolio companies. The investment manager has been working closely with the investee company management teams to ensure that they have reacted quickly to cut costs and where appropriate added management resource to ensure that the companies are being optimally managed. Whereas the worst of the economic downturn may well have passed the ripple effect feeding into the smaller companies market has continued to cause problems for many companies.

C shares

The net asset value of the C share showed a decline of 2% in the period.

During the year the Fund's investments were managed by Acuity Capital. Acuity Capital was established in 1981 and is authorised and regulated by the Financial Services Authority.

Acuity Capital has considerable expertise in quoted and unquoted investments and has a well developed deal flow, including unquoted company proposals that originate from its own contacts and network, pre-float finance opportunities and broker led AIM flotations.

The Investment Manager established an Investment Committee comprising three Acuity Capital executives and two independent members. The independent members of the Investment Committee are Angela Lane and Tony Everett. After 18 years working in private equity at 3i, Angela's final role was as a partner in 3i's Growth Capital business managing the UK Portfolio. Tony has a background as an entrepreneur and business owner and acts as a consultant to Fleming Family and Partners Private Equity. In addition, the Investment Committee is chaired by Hugh Mumford, a senior executive of Electra Partners Group. The Investment Committee meets as required to consider and review investment proposals.

Co-investment Arrangements with other Acuity VCTs

The Investment Manager managed three VCT pools of funds, Acuity Growth VCT Plc Ordinary Share pool, Acuity Growth VCT Plc 'C' Share pool and Acuity VCT 3 Plc (together "the Acuity VCTs"), it could use for co-investment. This allowed each fund to spread its investment risk and gain access to larger investments than it could do on its own. Where a co-investment opportunity arose between the Company and one or more of the other funds, the Company invested in an agreed and consistent proportion, on the same terms and in the same securities as the funds with which it co-invested. Costs associated with any such investment were borne by each fund pro-rata to its investment.

In more detail, the Board adopted a set of guidelines on its co-investment arrangements with the Acuity VCTs and the Investment Manager as follows:-

-- Other than as set out below, investments were allocated between the Company and the Acuity VCTs by reference to the size of each fund and to each fund's available cash resources.

-- Where an opportunity arose for a second or subsequent round of investment in a company in which one of the Acuity VCTs has invested at an earlier stage, the fund holding the existing investment had a preferential right to take up any pro-rata entitlement it may had in the new financing round. The amount it invested on this basis is not taken into account in determining its co-investment share thereafter.

-- The Company made investments in which one or more of the Acuity VCTs have existing investments only when the Board considers that to be in the best interests of the Company.

-- Any potential conflict of interest in a proposed investment by one or more of the Acuity VCTs was referred by the Investment Manager to the Board of the Company and the other relevant Boards.

-- In the event of a possible conflict of interest between the Investment Manager and the Company, the matter will be decided by those Directors who are independent of the Investment Manager.

The Board of the Company acknowledges that the Investment Manager may occasionally recommend an allocation of investments on a different basis from the one described above. For example, an exception may be made to ensure that one or more of the Company or Acuity VCT 3 Plc maintain their status as a HMRC approved VCT, or in the interests of balancing their portfolios. A different basis may also be necessary to meet the requirements of potential investee companies. In these cases the Directors may use their judgement.

Acuity Growth VCT Plc

Board of Directors

Rupert Pennant-Rea (Chairman)

David Donnelly

Catrina Holme

Nicholas Ross

David Sebire

Investment Manager and Administrator

Acuity Capital Management Limited

Paternoster House

65 St Paul's Churchyard

London EC4M 8AB

Telephone: [phone]

Web: www.acuitycapital.co.uk

Enquiries: [e-mail]

Secretary and Registered Office

Acuity Capital Management Limited

Paternoster House

65 St Paul's Churchyard

London EC4M 8AB

Telephone: [phone]

Company Number

5210737

Broker

Matrix Corporate Capital LLP

One Vine Street

London W1J 0AH

Registered Independent Auditors

KPMG Audit Plc

Saltire Court

20 Castle Terrace

Edinburgh EH1 2EG

Telephone: [phone]

Registrar and Transfer Office

Capita Registrars Limited

Northern House

Woodsome Park

Fenay Bridge

Huddersfield HD8 0GA

Telephone (UK): 0871 664 0300 (calls cost 10p per minute plus network extras, lines are open 8.30am-5.30pm Monday to Friday)

Telephone (Overseas): [phone]

Email: [e-mail]

Web: www.capitaregistrars.com

Any change of address of a shareholder or other relevant amendment to shareholder details should be communicated to the Company's Registrar, Capita Registrars.

If any shareholder is considering trading his or her shares in the secondary market, please contact the Company's broker Matrix Corporate Capital LLP: Chris Lloyd on 0203 206 7176 ([e-mail]) and Paul Nolan on 0203 206 7177 ([e-mail]).

 
Rupert Pennant-Rea, Chairman  Appointed a Director on 7 September 
                               2004. 
                              He is a former Deputy Governor of the 
                               Bank of England and Editor of The Economist. 
                               He is currently Chairman of Henderson 
                               and a Director of Go-Ahead and a number 
                               of other companies. He is Chairman of 
                               the Nomination Committee. 
 
David Donnelly*               Appointed a Director on 7 September 
                               2004. 
                              He is Chairman of Caithness Petroleum. 
                               Previously he was CEO of the Private 
                               Equity business of Fleming Family & 
                               Partners. Previous directorships included 
                               Highland Participants (Chairman and 
                               Chief Executive), a listed exploration 
                               company and R&W Hawthorn Leslie & Co 
                               (Executive Director), a publicly quoted 
                               shipbuilding and repair company. He 
                               was formerly a member of the London 
                               Stock Exchange. He is Chairman of the 
                               Remuneration Committee. 
 
Catrina Holme*                Appointed a Director on 26 February 
                               2009. 
                               She has had extensive experience in 
                               the venture capital and private equity 
                               industry. Initially a private equity 
                               lawyer, she has held both Executive, 
                               Non-Executive and Investment roles in 
                               the sector. Previously a member of Cazenove 
                               Private Equity and Partner at DFJEsprit, 
                               she runs a consulting business, Investor 
                               Inside, working with technology companies 
                               to maximise their investment success. 
 
Nicholas Ross                 Appointed a Director on 7 September 
                               2004. 
                              He is a founding member of Acuity Capital 
                               LLP, prior to the Management buy-out 
                               he had been at Electra Quoted Management 
                               since 1993. Previously he had several 
                               years in investment analysis and fund 
                               management. He has been responsible 
                               for the launch of the three Acuity VCT 
                               funds. He is a Managing Partner of Acuity 
                               Capital LLP and a Director of Acuity 
                               Capital and all three Acuity VCT funds. 
                               He also sits on a number of investee 
                               company boards. 
 
David Sebire*                 Appointed a Director on 7 September 
                               2004. 
                              He is a Chartered Accountant with extensive 
                               industrial and corporate finance experience. 
                               Previous chairmanships have included 
                               Bridport, PTS and Clearspeed Technology. 
                               He is Chairman of Securefast and PegasusBridge 
                               Corporate Finance and a number of private 
                               companies. He has been nominated the 
                               Senior Independent Director under the 
                               Combined Code on Corporate Governance 
                               and is additionally Chairman of the 
                               Audit Committee. 
 
                              * Member of the Audit, Remuneration 
                               and Nomination Committees 
 

To the Members of Acuity Growth VCT Plc

The Directors present the audited Accounts of the Company for the year ended 30 September 2010 and their Report on its affairs.

Investment Company Status

Throughout the year under review the Company was an investment company as defined under Section 833 of the Companies Act 2006

VCT Status

HM Revenue and Customs has granted the Company approval under Section 274 of the Income Tax Act 2007 (ITA 2007) as a VCT, the approval being effective from the first day on which the Company's ordinary shares were listed on the London Stock Exchange (being 3 December 2004). The Board continues to direct the affairs of the Company to enable it to maintain approval as a VCT.

Business Review

Objective and Investment Strategy

A review of the Company's Objective and Investment Strategy is detailed on page 2.

Current and Future Development

A review of the main features of the year is contained in the Chairman's Statement and the Investment Manager's Review on pages 5 and 7 respectively.

The Board regularly reviews the development and strategic direction of the Company. The Board's main focus continues to be on the Company's long-term investment return. Attention is paid to the integrity and success of an investment process and on factors which may have an impact on this approach. Due regard is given to the marketing and promotion of the Company, including effective communication with shareholders and other external parties.

Social, Community, Employee and Environmental Issues

In carrying out its activities and in relationships with the community, the Company aims to conduct itself responsibly, ethically and fairly. The Company has no employees and the Board is comprised entirely of Non-Executive Directors. The Company has no direct impact on the environment, however, the Company believes that it is in the shareholders interests to consider environmental, social and ethical factors when selecting and retaining investments. Further details of how the Company views socially responsible investment is set out in page 17.

Performance

A detailed review of performance during the year under review is contained in the Investment Manager's Review on page 7.

A number of performance measures are considered by the Board and Investment Manager in assessing the Company's success in achieving its objectives.

The key performance indicators ('KPIs') used to measure the progress and performance of the Company are established industry measures and are as follows:-

-- The movement in net asset value per share

-- The movement in share price

-- The movement of net asset value and share price performance compared to the FTSE All-Share Index

Details of the KPIs are shown in the Financial Highlights on page 4 and through a graph comparing the Company's total return on a share price and net asset value basis over the period since shares were first issued with the FTSE All-Share Index total return over the same period as set out in the Directors' Remuneration Report on page 25.

The Board recognises that it is in the long term interests of shareholders to reduce discount volatility and believes that the prime driver of discounts over the longer term is performance. As outlined in the Report of the Directors on page 19, the Board intends to seek renewal of its annual share buy-back authority at the Company's Annual General Meeting in 2011. As noted in the Chairman's Statement, due to the recent market turbulence, the Board has temporarily suspended the share buy back programme but are monitoring the position closely and will restore share buy backs when conditions allow.

Risk Management

Since the Company is flexible with regard to those areas in which it invests, it aims to achieve a significant degree of diversification and to spread risk by investing in unquoted, PLUS traded and AIM quoted companies. In addition, there is no emphasis on any particular industry sector and even the non-qualifying investments have quite a high level of in-built diversification. The Company is restricted to investing no more than 15% of the value of its total assets at the time of investment in any one individual qualifying investment or non-qualifying investment.

The key risks facing the Company include Market Risk, Interest Rate Risk Credit Risk and Liquidity Risk as further detailed in Note 19 of the Notes to the Accounts.

In addition the Company is also focused on the following key risks:-

Macroeconomic risks

The performance of the Company's underlying investment portfolio is principally influenced by a combination of economic growth, interest rates, the availability of well-priced debt finance, the number of active trade and private equity buyers and the level of merger and acquisition activity. All of these factors have an impact on the Company's ability to invest and on the Company's ability to exit from its underlying portfolio or on the levels of profitability achieved on exit.

Long-term strategic risk

The Company is subject to the risk that its long-term strategy and its level of performance fails to meet the expectations of its shareholders. The Company constantly monitors the level of discount of its Net Asset Value to its share price and considers the most effective methodologies to keep this at a minimum.

In addition the Company regularly reviews its Objectives and Investment Strategy in light of prevailing investor sentiment to ensure the Company remains attractive to its shareholders

Government policy and regulation risk

The Company carries on business as a VCT under section 274 of the Income Tax Act 2007 (ITA 2007). Continuation of this status is subject to the Company directing its affairs in line with the relevant requirements of the legislation. Anticipated and actual changes in government policy and related tax treatment of VCTs are closely monitored, as are other changes which could affect results of operations or financial position.

Acuity Capital is an authorised person under the Financial Services and Markets Act 2000 and regulated by the FSA. Changes to the regulatory framework under which Acuity Capital operates are closely monitored by Acuity Capital and reported upon as necessary by Acuity Capital to the Company.

Socially Responsible Investment

The Company believes that high standards of corporate social responsibility ('CSR') make good business sense and have the potential to protect and enhance investment returns. Consequently, the investment process takes social, environmental and ethical issues into account when in the Company's view, these have a material impact on either investment risk or return.

The Company recognises and supports the view that social, environmental and ethical best practice should be encouraged. It favours investing in companies committed to high standards of CSR and to the principles of sustainable development.

The Company does not screen out companies from its investment universe purely on the grounds of poor social, environmental or ethical performance. Instead, it adopts a positive engagement approach whereby, if it is appropriate, it discusses these issues with the management of the companies in which it invests. The information gathered during these meetings is used both to assist the Company's investment decisions and also to encourage investee company management to improve procedures and attitudes. The Company strongly believes that this is the most effective way to improve the CSR polices of the businesses in which it invests and the Board endorses this view.

Investment risks

The Company operates in a very competitive market. Changes in the number of market participants, the availability of funds within the market, the pricing of assets, or in the ability of the Investment Manager to access deals on a proprietary basis, could have a significant effect on the Company's competitive position and on the sustainability of returns.

In order to source and execute good quality investments the Company is primarily dependent on the Investment Manager having the ability to attract and retain people with the requisite investment experience and whose compensation is in line with the Company's objectives.

Once invested, the performance of the Company's portfolio is dependent upon a range of factors. These include but are not limited to: (i) the quality of the initial investment decision described above; (ii) the ability of the portfolio company to execute successfully its business strategy; and (iii) actual outcomes against the key assumptions underlying the portfolio company's financial projections. Any one of these factors could have an impact on the valuation of a portfolio company and upon the Company's ability to make a profitable exit from the investment within the desired timeframe.

A rigorous process has been put in place by the Investment Manager for managing the relationship with each investee company for the period prior to anticipated realisation. This includes regular asset reviews and, in many cases, board representation by one of the Investment Manager's executives.

The Company reviews both the performance of Acuity Capital and its incentive arrangements on a regular basis to ensure that both are appropriate to the objectives of the Company. As part of this process the board has concluded that the best interests of Shareholders are served by appointing a new Investment Manager.

Operational risks

The Company's investment management, custody of assets and all administrative systems are provided or arranged for the Company by the Investment Manager. Therefore the Company is exposed to a range of operational risks at the Investment Manager which can arise from inadequate or failed processes, people and systems or from external factors affecting these.

The Company's system of internal control mainly comprises the monitoring of the services provided by the Investment Manager, including the operating controls established by them to ensure they meet the Company's business objectives. This is further detailed on page 22.

Share Capital

The current authorised share capital of the Company is GBP1,125,000 divided into 85 million ordinary shares of 1p each, 25 million C Shares of 1p each and 25 million deferred shares of 0.1p each. The Ordinary Shares and C Shares have voting rights attached, holders are entitled to receive notice of and attend shareholder meetings and to receive dividends once declared and approved. The other rights and obligations attaching to the ordinary shares, C Shares and deferred shares are set out in the Company's Articles of Association.

As part of the merger of Acuity VCT Plc and Acuity VCT 2 plc, the Company issued 22,424,733 Ordinary Shares during the year under review. The Company did not issue any C Shares or deferred shares during the year under review.

Authority to make Market Purchases of Shares

At the Annual General Meeting of the Company held on 10 March 2011, authority was given to make market purchases of up to 4,712,322 of the Company's issued ordinary share capital and up to 115,861 of the Company's issued C Share capital.

In the year no Ordinary or C Shares have been repurchased for cancellation in the year.

The Company does not hold any shares in treasury.

Accordingly, at 30 September 2010, authority remained to repurchase 4 712,322 ordinary shares and 115,861 C Shares.

At 30 September 2010 a total of 54,394,938 (2009: 31,626,320) ordinary shares of 1p each and 777,589 (2009: 777,589) C Shares of 1p each were in issue.

Results and Dividend

Revenue (losses)/returns attributable to Ordinary shareholders amounted to GBP(457,000) (2009: GBP56,000) and the Revenue losses attributable to C Shareholders amounted GBP(15,000) (2009: GBP(10,000)). Capital (losses)/returns attributable to ordinary shareholders amounted to GBP(14,953,000) (2009: GBP(1,685,000)) and to C Share shareholders of GBP4,000 (2009: GBP(12,000)). The Directors do not recommend the payment of a final dividend in respect of the year ended 30 September 2010 (2009: GBPnil).

Directors

The current Directors of the Company are listed on page 14. Mr RL Pennant-Rea, Ms C Holme, Mr DJ Donnelly, Mr NRW Ross and Mr DJ Sebire all served as Directors throughout the financial year ended 30 September 2010. Mr RL Pennant-Rea and Mr N Ross will retire at the Annual General Meeting in 2011 and, being eligible, Mr RL Pennant-Rea will offer himself for re-election. Mr N Ross will not offer himself for re-election. Short biographical details of all the Directors are provided on page 15. Following performance appraisals of all of the Directors, details of which are to be found on the page 21, the Board considers that the performance of each Director retiring at the Annual General Meeting and offering himself for re-election continues to be effective and that each Director continues to show commitment to his role. Accordingly, the Board recommends that those Directors retiring at the Annual General Meeting in 2011 and offering themselves for re-election be re-elected.

Directors' Interests

The beneficial interests of the Directors in the ordinary shares of the Company are shown below. Save as disclosed, no Director had any notifiable interest in the securities of the Company.

As a result of the merger the director's interests have changed as follows:

 
30 September 2010         30 September 
 Ordinary Shares of        2009 
 1p                        Ordinary Shares 
 each                      of 1p 
                           each 
RL Pennant-Rea  110,120   102,500 
 DJ Donnelly     -         - 
 C Holme         -         - 
 NRW Ross*       140,478   103,100 
 DJ Sebire       7,475     - 
 
 

No Director holds C Shares in the Company.

* NRW Ross also has an interest in GBP6,332 of the 4% Loan Notes issued by the Company.

Directors' Remuneration Report

An Ordinary Resolution to approve the Directors' Remuneration Report will be put to the Annual General Meeting in 2011.

Contracts with Directors

No Director has a service contract with the Company. As a result of being a Partner of Acuity Capital LLP, Mr NRW Ross is deemed to have an interest in the Management Contract between the Company and Acuity Capital.

Directors' and Officers' Liability Insurance

Directors' and Officers' Liability Insurance is maintained on behalf of the Directors in respect of their positions as Directors of the Company.

Substantial Shareholders

At 31 January 2011 the Directors had not been notified of any interests of 3% or more in the Company's issued share capital.

Independent Auditors

A resolution to reappoint KPMG Audit Plc as Auditors to the Company will be proposed at the Annual General Meeting in 2011. A separate resolution will be proposed at the Annual General Meeting in 2011 authorising the Directors to fix the remuneration of the Auditors.

The Directors confirm that so far as each Director is aware, there is no relevant audit information of which the Company's auditors are unaware and that each Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Creditor Payment Policy

The Company agrees the terms of payment with its suppliers when agreeing the terms of each agreement. Suppliers are aware of the terms of payment and the Company abides by the

terms of payment. The Company's average creditor payment period at 30 September 2010 was one day.

Investment Manager

Acuity Capital Management Limited was the Investment Manager of the Company during the year under review. The Board regularly reviews the performance of the Investment Manager. As a result, the Board has interviewed other investment managers and believes that it is in the best interests of shareholders to appoint another investment manager.

Management Fees and Arrangements

Acuity Capital was appointed as Investment Manager under an agreement dated 6 October 2004, later superseded by an updated Management Agreement dated 18 October 2007. The agreement is for an initial period of five years and thereafter until terminated by not less than one year's notice. Fees are paid quarterly in arrears, as a percentage of net assets (less a rebate of fees suffered in investments in funds managed by Acuity Capital), at the following annual rates:

Period ended 30 June 2005 1.5%

Year ended 30 June 2006 2.0%

Year ended 30 June 2007 and thereafter 2.5%

Annual running expenses of the Fund are capped at 3.6% of the net asset value as at 30 September 2010. Any excess will be reduced against the management fee payable to the Investment Manager.

Incentive Schemes

Certain persons engaged in, the business of the Investment Manager will be entitled to receive a performance fee based upon returns to shareholders of both Ordinary and C Shares. The incentives are designed to encourage significant dividend payments to shareholders and a Net Asset Value performance that would equate to a historic top quartile industry ranking, before any performance fee payment is made. Therefore, if, by the end of a financial year, aggregate distributions of 30p per share have been declared and if the Performance Value, which is equal to the Net Asset Value plus distributions, at that date exceeds 130p per share, then the beneficiaries will be entitled to a performance fee equal to 20% of the excess of such Performance Value over 100p per share. If, on a subsequent financial year end, the performance of the Company falls short of the performance of the Company on the previous financial year end, the beneficiaries will not be entitled to any incentive.

If, on a subsequent financial year end, the performance of the Company exceeds the previous financial year's performance of the Company, the beneficiaries will be entitled to 20% of such excess. To give effect to this performance fee, Loan Notes have been issued by the Company to certain persons engaged in the business of the Investment Manager. No Loan Notes have been issued directly to the Investment Manager. Further details of the terms of the Loan Notes are set out in Note 2 and 12 of the accounts. At 30 September 2010, there was no amount due under this incentive scheme.

Going Concern

After making enquiries and bearing in mind the nature of the Company's business and assets, the Directors consider that the Company had adequate resources to continue in operational existence for the foreseeable future. In arriving at this conclusion the Directors have considered the liquidity of the Company and its ability to meet obligations as they fall due for a period of at least twelve months from the date that these financial statements were approved. As at 30 September 2010 the Company held cash balances and listed investment in Electra Private Equity plc amounting to GBP1,589,000. Cash flow projections have been reviewed and the Company has sufficient funds to meet both its contracted expenditure and its discretionary cash outflows in the form of the share buyback programme and dividend policy. The Company has no external loan finance in place and therefore is not exposed to any gearing or covenants.

Annual General Meeting

The Annual General Meeting of the Company will be held on 10 March 2011. In addition to the ordinary business, the following special business will be considered:-

Authority to allot shares: Resolution 7

An Ordinary Resolution will be proposed at the Annual General meeting in 2010 to grant the Directors authority under section 551 of the Companies Act 2006 to allot shares up to a maximum aggregate nominal value of GBP183,996.77 being one third of the nominal value of the issued share capital of the Company at the date of this Directors' Report. The authority will expire at the conclusion of the Company's Annual General Meeting in 2012. This Ordinary Resolution will also remove the concept of an authorised share capital from the Company's articles of association, in accordance with the provisions of the Companies Act 2006. The Directors recommend shareholders to vote in favour of this Ordinary Resolution.

Disapplication of pre-emption rights: Resolution 8

A Special Resolution will be proposed at the Annual General Meeting in 2011 to grant the Directors authority to allot equity securities for cash without first offering the securities to existing shareholders in connection with the allotment of up to 10% of the nominal value of the issued share capital of the Company from time to time. The Directors' authority under this resolution will expire at the conclusion of the Company's Annual General Meeting in 2011. The Directors recommend shareholders to vote in favour of this Special Resolution.

Authority to Make Market Purchases of Shares: Resolution 9

As set out in the Chairman's Statement, in the interest of all the Company's shareholders the Board suspended the Company's buy

back programme temporarily because of the exceptional economic circumstances. Nevertheless the Board wishes to have in place the authority to purchase the Company's own shares so that the buy back programme can be re-instated as and when conditions permit. Accordingly, a Special Resolution will be proposed to renew, for one year, the Board's authority to make market purchases of ordinary shares and/or C Shares provided that such authority is limited to the purchase of 14.9%of the issued ordinary share capital and/or 14.9 per cent. of the issued C Share capital of the Company from time to time, subject to the constraints set out in the Special Resolution. Should any shares be purchased under this authority, it is the intention of the Board that they be cancelled and not held as treasury shares.

The Directors do not intend to use this authority to purchase shares unless this would result in an increase in the net asset value per ordinary and/or C Share as applicable and would be in the best interests of shareholders generally. The Directors recommend shareholders to vote in favour of this Special Resolution.

Corporate Governance

Arrangements in respect of corporate governance, appropriate to a venture capital trust, have been made by the Board. The Board has considered the principles and recommendations of the Association of Investment Companies' Code of Corporate Governance issued in March 2009 ('AIC Code') by reference to the AIC Corporate Governance Guide for Investment Companies ('AIC Guide'). The AIC Code, as explained by the AIC Guide, addresses all the principles set out in Section 1 of the Combined Code on Corporate Governance issued by the Financial Reporting Council ('FRC') ('the Combined Code'), as well as setting out additional principles and recommendations on issues which are of specific relevance to the Company. The FRC confirmed in February 2009 that it remained their view that the AIC Guide was appropriate and that investment companies may report against the AIC Code.

The Board considers that reporting against the principles and recommendations of the AIC Code, and by reference to the AIC Guide (which incorporates the Combined Code) will provide better information to shareholders.

Except as disclosed below, the Company complied throughout the year with the recommendations of the AIC Code and the relevant provisions of Section 1 of the Combined Code. Since all the Directors are non-executive the provisions of the Combined Code in respect of the role of the chief executive are not relevant to the Company and, likewise, the provisions of the Combined Code relating to Directors' remuneration are not relevant except in so far as they relate specifically to non-executive Directors. For the reasons set out in the AIC Guide, and in the preamble to the Combined Code, the Board considers that these provisions are not relevant to the Company, being an externally managed venture capital trust. The Company has therefore not reported further in respect of these provisions.

The Directors confirm that during the year under review the Company has complied with Section 1 of the Combined Code on Corporate Governance ("the Code") issued by the Financial Reporting Council in June 2008.

Directors' Attendance at Scheduled Meetings of the Board and Committees of the Board

In addition, a number of Directors attended further Board meetings at short notice to address specific issues.

The Board of Directors

The Board, which meets regularly, comprised five Directors at 30 September 2010, all of whom were non-executive. All of the Directors who held office at 30 September 2010, apart from Mr NRW Ross, have been considered by the Board to be independent from the Investment Manager. The Board has nominated Mr DJ Sebire as the Senior Independent Director.

The Board believes that each of the Company's Directors, apart from Mr NRW Ross, continues to be wholly independent under the Code notwithstanding the cross-directorships detailed above. Independence is a state of mind and the character and judgement which accompany this are distinct from and, in the Board's opinion, are not compromised by having cross directorships with other Directors.

The Board agreed a schedule of matters reserved for its specific approval, which includes a regular review of the Company's Management Agreement with Acuity Capital, together with the monitoring of the performance thereunder. The Management Agreement sets out the matters over which Acuity Capital has authority in accordance with the policies and directions of the Board. The Board Meetings consider as appropriate such matters as overall strategy, investment performance, share price performance, share price discount and communication with shareholders. The Board considers that it meets sufficiently regularly to discharge its duties effectively. The numbers of scheduled meetings of the Board and the Audit Committee are shown in the table above. All of the Directors attended the Annual General Meeting.

The Board receives information that it considers to be sufficient and appropriate to enable it to discharge its duties. Each Director receives board papers several days in advance of each scheduled Board meeting and is able to consider in detail the Company's

performance and any issues to be discussed at the relevant meeting.

The Directors believe that the Board has the balance, skills and experience which enable it to provide effective strategic leadership and proper governance of the Company. Information about the Directors, including their relevant experience, can be found on page 15.

Performance Appraisal

The Board carried out a formal appraisal process of its own and of its Committees' operation and performance during the year under review. This was implemented by means of questionnaires circulated to the Directors, the results of which were then reviewed by the Board. Issues covered included board composition, meeting arrangements and communication. The process was considered by the Board to be constructive in identifying areas for improving the functioning and performance of the Board and of its Committees. The Board concluded that its performance and that of its Committees was satisfactory.

The Chairman carried out a formal appraisal of each of the Directors during the year under review and the Board, under the leadership of the Senior Independent Director, similarly appraised the Chairman. Relevant matters considered included the attendance and participation at Board and Committee meetings, commitment to Board activities and the effectiveness of the contribution made by the relevant Director. As a result of this process the Chairman has confirmed that the performance of each of the Directors continues to be effective and that each of them continues to show commitment to his role. The Senior Independent Director has also confirmed the continuing effectiveness and commitment of the Chairman.

Re-election of Directors

In accordance with the Code's provisions or the Company's Articles, Mr RL Pennant-Rea and Mr NRW Ross will retire at the Annual General Meeting to be held in 2011. Mr RL Pennant-Rea will offer himself for re-election and Mr NRW Ross will not offer himself for re-election.

Independent Professional Advice

Individual Directors may seek independent professional advice in furtherance of their duties at the Company's expense within certain parameters. All Directors have access to the advice and services of the Company Secretary. Any appointment or removal of the Company Secretary would be a matter for consideration by the entire Board.

The Audit Committee

The Board has an Audit Committee established in compliance with the Code. It comprises all the Directors other than the Chairman of the Board and Mr NRW Ross, with Mr DJ Sebire as Chairman of the Committee. The Board has taken note of the suggestion that at least one member of the Committee should have recent and relevant experience and is satisfied that the Committee is properly constituted in this respect. Its authority and duties are clearly defined in its written terms of reference which is available on Acuity Capital's website.

The Committee's Responsibilities include:

-- monitoring and reviewing the integrity of the financial statements, the internal financial controls and the independence, objectivity and effectiveness of the external auditors;

-- making recommendations to the Board in relation to the appointment of the external auditors and approving the remuneration and terms of their engagement;

-- developing and implementing the Company's policy on the provision of non-audit services by the external auditors;

-- reviewing the arrangements in place within Acuity Capital whereby their staff may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters insofar as they may affect the Company and

-- considering annually whether there is a need for the Company to have its own internal audit function.

The Committee has reviewed the provision of non-audit services provided by the external auditors and believes them to be cost effective and not an impediment to the external auditors' objectivity and independence. It has been agreed that all non-audit work to be carried out by the external auditors, must be approved by the Audit Committee and that any special projects must be approved in advance.

The Committee annually reviews the performance of KPMG Audit Plc, the Company's external auditor. In doing so, the Committee considers a range of factors including the quality of service, the auditor's specialist expertise and the level of audit fees. There are no contractual obligations restricting the choice of external auditor. Under Company Law the reappointment of the external auditor is subject to shareholder approval at the AGM.

Internal Audit

Following the review carried out by the Audit Committee as to whether there is a need for the Company to have its own internal audit function, the Board has considered and continues to believe that the internal control systems in place within Acuity Capital provide sufficient assurance that a sound system of internal control, which safeguards shareholders' investment and the Company's assets is maintained. An internal audit function, specific to the Company, is therefore considered unnecessary.

The Remuneration Committee

During the year under review the Remuneration Committee comprised all the Directors of the Company other than the Chairman of the Board and Mr NRW Ross, with Mr DJ Donnelly as Chairman of the Committee. There was a meeting of the Remuneration Committee during the year. The Directors have now agreed future directors' fees, following the change in Investment Manager, will be GBP25,000 for the Chairman and Mr D Sebire and GBP20,000 for Mr D Donnelly and Ms C Holme. The Committee has written terms of reference which are available on Acuity Capital's website. Full details of its role are set out in the Directors' Remuneration Report.

The Nomination Committee

The Nomination Committee meets on an ad hoc basis to consider suitable candidates for appointment as Director. It comprises all the Directors apart from Mr NRW Ross, with Mr RL Pennant-Rea as Chairman of the Committee.

The current Directors of the Company were appointed with regard to their independence, suitability for the position and their experience in related business areas.

Induction and Training

New Directors are provided with an induction programme which is tailored to the particular circumstances of the appointee and which includes being briefed fully about the Company by the Chairman and senior executives of Acuity Capital. Following appointment, Directors continue to receive other relevant training and advice as necessary to enable them to discharge their duties.

The Company's Relationship with its Shareholders

The Company places great importance on communication with the Company's shareholders. In addition to the Annual and Interim Reports, shareholders will be sent regular newsletters from the Investment Manager.

At the Annual General Meeting all shareholders are welcome to attend and have the opportunity to put questions to the Board.

The notice of the Annual General Meeting and related papers are sent to shareholders at least 21 working days before the meeting.

A separate resolution is proposed on each substantially separate issue including the annual report and accounts.

All proxy votes are counted and, except where a poll is called, the level of proxies lodged for each resolution is announced at the Meeting and is published on Acuity Capital's website.

The Chairman and the Senior Independent Director can always be contacted either through the Company Secretary or care of the Company's registered office at Paternoster House, 65 St Paul's Churchyard, London EC4M 8AB.

Internal Control

The Code requires the Directors to review the effectiveness of the Company's system of internal control and report to shareholders that they have done so. The Code extended the earlier reporting requirements and now includes financial, operational and compliance controls and risk management.

The Board confirms that it has an ongoing process for identifying, evaluating and managing the significant risks faced by the Company. This process has been in place throughout the year and has continued since the year end and up to the date of this report. It is reviewed at regular intervals by the Board and accords with the Financial Reporting Council's 'Internal Control: Revised Guidance for Directors on the Combined Code'.

The Board is responsible for the Company's system of internal control and it has reviewed its effectiveness for the year ended 30 September 2010. The system of internal control is designed to manage, rather than eliminate, the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss.

Since investment management, custody of assets and all administrative services are provided or arranged for the Company by Acuity Capital, the Company's system of internal control mainly comprises the monitoring of services provided by Acuity Capital, including the operating controls established by them, to ensure they meet the Company's business objectives. The key elements designed to provide effective internal control for the Company are as follows:

-- Financial Reporting - Regular and comprehensive review by the Board of key investment and financial data including management accounts, revenue projections, analyses of transactions and performance comparisons.

-- Investment Strategy - Agreement by the Board of the Company's investment strategy and monitoring of all large investments.

-- Management Agreements - The Board regularly monitors the performance of Acuity Capital to ensure that the Company's assets and affairs are managed in accordance with the guidelines determined by the Board.

-- Investment Performance - The investment transactions and performance of the Company's assets and affairs are managed in accordance with the guidelines determined by the Board.

-- Management Systems - Acuity Capital's system of internal control includes clear lines of responsibility, delegated authority, control procedures and systems. Acuity Capital's compliance department monitors compliance with the Financial Services Authority rules. The Board keeps under review the effectiveness of the

-- Company's system of internal control by monitoring the operation of key controls of Acuity Capital as follows:

-- The Board reviews the terms of the Management Agreement and receives regular reports from Acuity Capital executives.

-- The Board reviews the certificates provided by Acuity Capital on a six monthly basis, verifying compliance with documented controls.

Voting Policy

The Company's investee companies are principally a mixture of quoted and unquoted companies in which the Company is a significant shareholder and the Company is usually a party to all issues requiring shareholder approval. The Company has given discretionary voting power to Acuity Capital to vote on its behalf.

Acuity Capital's voting policy as agent for the Company has adopted and applies the Statement of Principles drawn up by the Institutional Shareholders Committee when it considers these in its reasonable judgement to best serve the financial interests of the Company's shareholders. Acuity Capital's voting policy has been reviewed and endorsed by the Board.

Acuity Capital Management Limited

Secretary

Registered Office:

Paternoster House

65 St Paul's Churchyard

London EC4M 8AB

31 January 2011

The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law they have elected to prepare the Financial Statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice).

The Financial Statements are required by law to give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

In preparing these Financial Statements, the Directors are required to:

-- select suitable accounting policies and then apply them consistently;

-- make judgements and estimates that are reasonable and prudent;

-- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Financial Statements; and

-- prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the directors are also responsible for preparing a Directors' Report and Directors' Remuneration Report that complies with that law and those regulations.

The accounts of the Company are published on www.acuitycapital.co.uk which is a website maintained by the Company's Investment Manager, Acuity Capital.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Management Company's website. Legislation in the UK governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.

In accordance with the FSA's Disclosure and Transparency Rules, the Directors confirm to the best of their knowledge that:-

(a) the accounts, prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

(b) the Report of the Directors includes a fair review of the development and performance of the business and position of the Company together with a description of the principal risks and uncertainties that it faces.

By order of the Board of Directors

Rupert Pennant-Rea, Chairman

Registered Office:

Paternoster House

65 St Paul's Churchyard

London EC4M 8AB

31 January 2011

The Directors submit this report in accordance with the requirements of Schedule 8 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulations 2008. An Ordinary Resolution for the approval of this report will be put to members at the forthcoming Annual General Meeting. The law requires the Company's Auditors to audit certain of the disclosures provided. Where disclosures have been audited they are indicated as such.

Remuneration Committee

During the year under review the Remuneration Committee comprised all the Directors of the Company other than the Chairman of the Board and Mr NRW Ross. Mr DJ Donnelly was Chairman of the Remuneration Committee throughout the year.

During the year the Committee met once to consider directors' fees following the merger of Acuity VCT plc and Acuity VCT 2 plc, renamed Acuity Growth VCT plc. It set fee rates of GBP40,000 for the Chairman and GBP30,000 for each of the Directors, apart from Mr D Sebire who is paid an additional GBP10,000 per annum in respect of further duties undertaken in relation to the production of the Company's Report and Accounts, and Mr NRW Ross who receives no remuneration from the Company. The Directors have now agreed future directors' fees, following the change in Investment Manager, will be GBP25,000 for the Chairman and Mr D Sebire and GBP20,000 for Mr D Donnelly and Ms C Holme.

Policy of Directors Remuneration

In accordance with the Articles of Association of the Company, the aggregate remuneration of the Directors may not exceed GBP140,000 per annum or such higher amount as may from time to time be determined by an Ordinary Resolution of the Company. Subject to this overall limit, the Remuneration Committee's policy is that remuneration of non-executive Directors should be sufficient to attract and retain the Directors needed to oversee the Company and reflect the specific circumstances of the Company, the duties and responsibilities of the Directors and the value and amount of time committed to the Company's affairs. It is intended that this policy will continue for the year ended 30 September 2011 and subsequent years. Non-executive Directors are not eligible to receive bonuses, pension benefits, share options and other benefits.

Directors' Service Contracts

None of the Directors has a service contract with the Company. No arrangements have been entered into between the Company and the Directors to entitle any of the Directors for compensation for loss of office.

Directors' Remuneration for the Year (audited)

The Directors who served during the year received the following emoluments in the form of fees:

 
For the year                   For the 
ended 30                        year ended 
September                       30 September 
2010                            2009 
 GBP'000                        GBP'000 
RL Pennant-Rea 
 (Chairman & joint 
 highest paid Director) 
 DJ Donnelly              33   20 
 Catrina Holme             25   15 
 NRW Ross                  25   7 
 DJ Sebire (Joint          -    - 
 highest paid Director)    33   20 
Total                     117  70 
 

A Settlement of GBP55,000 was also accrued as a settlement to HMRC for prior year National Insurance payments.

As a former executive of the Electra Partners Group and as a current executive of Acuity Capital, NRW Ross has an interest in the Management Contract between the Company and Acuity Capital (formerly Electra Quoted Management). NRW Ross has waived his right to receive directors' fees from the Company.

By order of the Board of Directors

Mr DJ Donnelly,

Chairman of the Remuneration Committee, Registered Office:

Paternoster House, 65 St Paul's Churchyard. London EC4M 8AB

31 January 2011

Independent Auditors' Report to the Members of Acuity Growth VCT Plc

We have audited the financial statements of Acuity Growth VCT Plc for the period ended 30 September 2010 which comprise the Income Statement, the Reconciliation of Movements in Shareholders' Funds, the Balance Sheet, the Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice).

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

As explained more fully in the Directors' Responsibilities Statement set out on page 24, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB's web-site at www.frc.org.uk/apb/scope/UKP.

Opinion on financial statements

In our opinion the financial statements:

-- give a true and fair view of the state of the company's affairs as at 30 September 2010 and of its loss for the year then ended;

-- have been properly prepared in accordance with UK Generally Accepted Accounting Practice; and

-- have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion:

-- the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and

-- the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

Under the Companies Act 2006 we are required to report to you if, in our opinion:

-- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-- the financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns; or

-- certain disclosures of directors' remuneration specified by law are not made; or

-- we have not received all the information and explanations we require for our audit.

Under the Listing Rules we are required to review:

-- the directors' statement, set out on page 19, in relation to going concern; and

-- the part of the Corporate Governance Statement relating to the company's compliance with the nine provisions of the June 2008 Combined Code specified for our review.

Simon Pashby (Senior Statutory Auditor)

for and on behalf of

KPMG Audit Plc,

Statutory Auditor

Chartered Accountants

Edinburgh

31 January 2011

The information on pages 33 to 51 forms an integral part of these financial statements.

 
For the year ended  Ordinary  C Shares  Total 
 30 September 2009   shares 
 

Revenue Capital Total Revenue Capital Total Revenue Capital Total Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000

Realised losses on investments sold 9 - (94) (94) - - - - (94) (94)

Investment holding losses 9 - (1,139) (1,139) - (3) (3) - (1,142) (1 142)

Income 1 563 - 563 - - - 563 - 563

Recoverable VAT 2 32 98 130 - - - 32 98 130

595 (1,135) (540) - (3) (3) 595 (1,138) (543)

Investment management fees 2 (217) (620) (837) (4) (13) (17) (221) (633) (854)

Other expenses 3 (265) 45 (220) (5) 4 (1) (270) 49 (221)

(482) (575) (1,057) (9) (9) (18) (491) (584) (1,075)

Return/(Loss) on Ordinary Activities before

interest and Taxation 113 (1,710) (1,597) (9) (12) (21) 104 (1,722) (1 618)

Finance Cost 4 (32) - (32) (1) - (1) (33) - (33)

Return/(Loss) on Ordinary Activities before taxation 81 (1,710) (1,629) (10) (12) (22) 71 (1,722) (1,651)

Tax on ordinary activities 6 (25) 25 - - - - (25) 25 -

Net Return/(Loss) on Ordinary Activities

after Taxation 56 (1,685) (1,629) (10) (12) (22) 46 (1,697) (1,651)

Return/(Loss)

per Share 7 0.2p (5.4)p (5.2)p (1.3)p (1.5)p (2.8)p

The total column of this statement represents the Company's Income Statement, prepared in accordance with UK GAAP. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above statement.

The information on pages 33 to 51 forms an integral part of these financial statements.

The information on pages 33 to 49 forms part of these Financial Statements.

The Financial Statements on pages 29 to 49 were approved and authorised for issue by the Board of Directors on xx December 2010 and were

signed on their behalf by:

RL Pennant-Rea

Chairman

Basis of Accounting

The accounts are prepared on a going concern basis and on the historical cost basis of accounting, modified to include the revaluation of fixed asset investments, in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice (UK GAAP) and the Statement of Recommended Practice for Investment Trust Companies and Venture Capital Trusts issued by the Association of Investment Companies in December 2005 and revised in January 2009 (the "SORP").

In order to reflect the activities of an investment company, supplementary information which analyses the financial statements between items of a revenue and capital nature has been presented alongside the financial statements. In analysing total income between capital and revenue returns, the Directors have followed the guidance contained in the SORP.

The management fee is allocated between revenue and capital in accordance with the Board's expected long term split of returns, and other expenses are charged to capital only to the extent that a clear connection with the maintenance or enhancement of the value of investments can be demonstrated.

A summary of the principal accounting policies, all of which have been applied consistently throughout the current year, follows:

Investments

Purchases and sales of quoted investments are recognised on the trade date where a contract exists whose terms require delivery within a timeframe determined by the relevant market. Purchases and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional. Investments are designated at fair value through profit and loss on initial recognition (described in the Accounts as investments held at fair value) and are subsequently measured at reporting dates at fair value. The fair value of direct unquoted investments is calculated in accordance with the Principles of Valuation of Investments below. Changes in the fair value of investments are recognised in the income statement through the capital account.

Quoted Investments

Quoted investments are stated at the bid market prices on the balance sheet date without discount.

Principles of Valuation of Investments

General

In valuing investments, the Directors follow the principles recommended in the International Private Equity and Venture Capital Valuation Guidelines issued in September 2009. Investments are valued at fair value at the reporting date.

Fair value represents the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction. In estimating fair value, the Directors use a methodology which is appropriate in light of the nature, facts and circumstances of the investment. Methodologies are applied consistently from one period to another except where a change results in a better estimate of fair value. Because of the inherent uncertainties in estimating the value of private equity investments, the Directors exercise appropriate prudence in applying the various methodologies.

As part of the valuation process, the proposed valuations are reviewed by the independent members of the Investment Committee before being examined by the auditors and then approved by the Directors.

Unquoted Investments

The principal methodologies applied in valuing unquoted investments, including PLUS investments (a UK market focussed on small and medium companies) include, but not exclusively, the following:

-- Earnings multiple

-- Price of recent investment

-- Net assets

In applying the Earnings Multiple methodology, the Directors apply a market based multiple that is appropriate and reasonable to the maintainable earnings of the company. In the majority of cases the Enterprise Value of the underlying business is derived by the use of an Earnings before Interest, Tax and Depreciation multiple applied to current year's earnings where these can be forecast with a reasonable degree of certainty and are deemed to represent the best estimate of maintainable earnings. Where this is not the case, historic earnings will generally be used in their place. In the case of unquoted investments, fair value is established by using measurements of value such as price of recent transaction, earnings multiple and net assets; where no reliable fair value can be estimated using such techniques.

Where a recent investment has been made, either by the Company or by a third party in one of Company's investments, this price will be used as the estimate of fair value from the date on which the investment was made. One of the principal methodologies, as above, may be used at any time if this is deemed to provide a better assessment of the fair value of the investment. Unquoted investments may be subject to an impairment adjustment to valuation where necessary.

The fair value of an investment in a company will be arrived at through the following process:

-- The Enterprise Value of the underlying business will be calculated using one of the above methodologies;

-- The Enterprise Value of the underlying business will then be adjusted for surplus assets or excess liabilities to arrive at an Enterprise Value for the company; and

-- The valuation of the Company's investment will be calculated from the Enterprise Value for the company after deduction of prior ranking debt and other financial instruments and an appropriate discount.

In terms of the discount, this will normally be in the range of 10-30% (in steps of 5%) applied to the comparable multiple of the company.

The amount of the discount is a question of judgement and will reflect several factors including the ability of the Company to influence the timing and nature of any realisation. Where the Company has the ability to influence an exit, or is part of a syndicate of like-minded investors who initiate the exit, a smaller discount will be applied. This may vary according to market and investee company circumstances. Where the likelihood of an exit is high, the discount is likely to be lower. Where there is no ability to initiate an exit and exit is not under discussion the discount is likely to be higher. In cases where no exit is contemplated by controlling shareholders, the investment may be valued by discounting the cash flow from the investment itself.

Although the Company holds more than 20% of the equity of certain companies, it is considered that the investments are held as part of the investment portfolio. Accordingly, and as permitted by FRS 9 'Associates and joint ventures', their value to the Company lies in their marketable value as part of that portfolio. It is not considered that any of the holdings represent investments in associated undertakings.

Under FRS 2 'Accounting for subsidiary undertakings' control is presumed to exist when the parent owns, directly or indirectly more than half of the voting power by a number of means. The Company does not hold more than 50% of the equity of any of the companies within the portfolio. In addition, it does not control any of the companies held as part of the investment portfolio. It is not considered that any of the holdings represent investments in subsidiary undertakings.

Income

Dividends receivable from equity investments are brought into account on the ex-dividend date or, where no ex-dividend date is quoted, are brought into account when the Company's right to receive payment is established. Fixed returns on non-equity investments and on debt securities are recognised on an effective interest rate basis. Where there is reasonable doubt that a return, which falls within the accounting period, will actually be received by the Company, the recognition of the return is deferred until the reasonable doubt has been removed.

Interest receivable on cash deposits is accounted for on an accruals basis.

Expenses

All expenses are accounted for on an accruals basis. Expenses are charged through the revenue account except for expenses in connection with the purchase and disposal of fixed asset investments, which are deducted from the disposal proceeds of the investment and investment management and incentive fees which are dealt with below. A split of expenses is made between Ordinary and C Shares in proportion to the Net Asset Value.

Investment Management and Incentive Fees

The investment management fees for the Investment Manager's services are charged 25% to the revenue account and 75% to the capital account. This is in line with the Board's long-term expected split of returns from the investment portfolio of the Company. Incentive fees are fully charged to the capital account. The incentive fee on realisations in the period is charged to the realised capital reserve and the incentive fee provision in respect of unrealised value growth in the portfolio is charged to the unrealised capital reserve.

Revenue and Capital Reserves

The revenue return in the Income Statement is taken to the revenue reserve.

Gains and losses on the realisation of investments are taken to the realised capital reserve. Gains and losses arising from changes in fair value are considered to be realised only to the extent that they are readily convertible to cash in full at the balance sheet date. Otherwise Gains and Losses are treated as unrealised.

Taxation

The tax effects of different items in the Income Statement are allocated between capital and revenue on the same basis as the particular item to which they relate using the Company's effective rate of tax for the accounting period.

Due to the Company's status as a venture capital trust and the continued intention to meet the conditions required to comply with Section 274 of the Income Tax Act 2007 (ITA 2007), no provision for taxation is required in respect of any realised or unrealised appreciation of the Company's investments.

Deferred tax is provided on all timing differences that have originated but not reversed by the balance sheet date. Deferred tax assets are only recognised to the extent that they are recoverable.

Dividends Payable

Dividend distributions to shareholders are recognised as a liability in the period in which they are paid in respect of interim dividends or when approved by members in respect of final dividends.

Foreign Currency

The Company does not hold any assets or liabilities denominated in foreign currencies at the year end.

Trail Commission

The fair value of trail commission payable on new share issues is estimated on the date the new shares are issued based on the net asset value of the trust at that time, an estimate of annualised growth in NAV over the life of the contract and an appropriate discount rate. Subsequent to initial recognition, changes in the value of the creditor arising through the unwinding of the discount rate are recognised in the revenue column of the Income Statement and movements in the value of the creditor resulting from changes in assumptions are recognised in the capital column of the Income Statement.

C Shares

Unless and until C Shares are converted into Ordinary Shares, all investments and returns attributable to this class of share will be accounted for separately from Ordinary Shares. All residual expenses will be allocated on the basis of total funds raised for each class of share.

Acuity Capital also received an administration fee of GBP70,000 (2009: GBP70,000), net of VAT, which increases each year in line with RPI. The administration fee is included in the administration expenses of GBP258 000 in Note 3.

HM Revenue & Customs has accepted that under European Union VAT law the exemption of VCT management fees from VAT should have applied from January 1990 onwards and has indicated that claims may be made for repayment of VAT previously suffered by VCTs on management fees, subject to such claims being limited to a period of three years prior to the date of claim. During the year ended 30 September 2009 the Company received a repayment of GBP130,000 in respect of VAT previously suffered on management fees and this amount has been recognised as a separate credit in the income statement, allocated between revenue and capital return in the same proportion as that in which the irrecoverable VAT was originally charged. The directors also agreed that the Investment Manager would be refunded for the reduction in Management fees paid during the same period as disclosed above.

Annual running expenses of the Fund are capped at 3.6% of the net asset value as of 30 September 2010. Any excess will be reduced against the management fee payable to the Investment Manager. During the year to 30 September 2009 an exceptional payment of GBP140,000 was made to the Investment Manager in respect of unpaid Management Fees for past periods on receipt of the VAT repayment referred to above.

Management Fees and Arrangements

Acuity Capital was appointed as Investment Manager under an agreement dated 6 October 2004, later superseded by an updated Management Agreement dated 18 October 2007. The Agreement is for an initial period of five years and thereafter until terminated by not less than one year's notice to expire at any time after the initial period. Fees for Ordinary and C Share pools are paid quarterly in advance, as a percentage of net assets (less a rebate of fees suffered in the investment in CF Real Active Management which is managed by Acuity Capital), at the following annual rates:

Period ended 30 June 2005 1.5%

Year ended 30 June 2006 2.0%

Year ended 30 June 2007 and thereafter 2.5%

Incentive Schemes

Ordinary Shares

The Investment Manager will receive a performance fee based on returns to Ordinary shareholders. If the Company's net asset value per share in a relevant calculation period increases so that it exceeds GBP1, less the value of distributions per share plus notional interest at 7% per annum compounded annually, the Investment Manager will receive 20% of the excess. For ordinary shares the first period expired on 30 September 2004. Subsequent periods are of one year's duration. In the event that the performance of the Company falls short of the target in any period the shortfall must be made up before the Investment Manager is entitled to a performance fee for subsequent periods.

C Shares

Certain employees of, and persons engaged in, the business of the Investment Manager, will be entitled to receive a performance fee based upon returns to shareholders. The incentives are designed to encourage significant dividend payments to shareholders and a NAV performance that would equate to a historic top decile industry ranking, before any performance fee payment is made. Therefore, if by the end of a financial year, aggregate distributions of 30p per share have been declared and if the Performance Value, which is equal to the Net Asset Value plus distributions, at that date exceeds 130p per share, then the beneficiaries will be entitled to an incentive equal to 20% of the excess of such Performance Value over 100p per share. If, on a subsequent financial year end, the performance of the Company falls short of the performance of the Company on the previous financial year end, the beneficiaries will not be entitled to any incentive. If, on a subsequent financial year end, the performance of the Company exceeds the previous performance of the Company, the beneficiaries will be entitled to 20% of such excess.

At 30 September 2009 there was no amount due under the incentive schemes.

In addition to the audit fees above, an amount of GBP3,000 was settled by Acuity Capital in relation to the period to 30 September 2010.

The purchases and sales proceeds figures above include transaction costs of GBPnil (2009: GBPnil) and GBP5,000 (2009: GBP5,000) respectively.

All investments are designated as fair value through profit or loss on initial recognition; therefore all gains and losses arise on investments designated as fair value through profit or loss.

C Shares

C Share issues are used for fund raisings by the Company in order to enable shares to be issued at a consistent price to all applicants, rather than by reference to a net asset value per share which may fluctuate over the period of the offer; and ensure that existing ordinary shareholders are not disadvantaged by the dilution of a mature investment portfolio through a large injection of cash and near cash assets.

Management of Capital

The Capital of the Company is managed in accordance with the Company's investment objective, detailed in the Investment Strategy detailed on page 2.

The Company does not have any externally imposed capital requirements.

As at 30 September 2010, reserves distributable by way of a dividend amounted to GBP28,988,000 (2009: GBP29,445,000), comprising the revenue reserve and special reserve.

As at 30 September 2010 there were no reserves to distribute as a dividend (2009: Nil)

20. Geographical Analysis

The operations of the Company are wholly in the United Kingdom.

21. Transactions with the Investment Manager

During the year ended 30 September 2010 the fees payable to Acuity Capital, the Investment Manager, totalled GBP1,089,000 (2009: GBP924 000), with GBP881,000 relating to fees chargeable for the year. At 30 September 2010, the Company owed GBPnil (2009: GBP340,000) to the Investment Manager. Amounts due from the Investment Manager at 30 September 2010 were GBP200,000 (2009: GBPnil). Details of the Investment Manager's fee arrangements are included in Note 2.

Notice is hereby given that the 2011 Annual General Meeting of Acuity Growth VCT Plc will be held on 10 March 2011 at 9.00 am to be held at Osborn Clarke, 1 London Wall, City of London, EC2Y 5BD for the purpose of considering and, if thought fit, passing the following Resolutions (of which, Resolutions 1 to 6 will be proposed as Ordinary Resolutions and Resolutions 7 and 8 will be proposed as Special Resolutions):

Ordinary Resolutions

1 To receive, consider and adopt the Reports of the Directors and Auditors and the Company's Accounts for the year ended 30 September 2010.

2 To approve the Directors' Remuneration Report for the year ended 30 September 2010.

3 To re-elect Mr R Pennant-Rea as a Director of the Company.

4 To re-appoint KPMG Audit Plc as Auditors of the Company to hold office until the conclusion of the next general meeting at which accounts are laid before the members.

5 To authorise the Directors to fix the remuneration of the Auditors.

6 THAT for the purposes of section 551 of the Companies Act 2006 (the "Act") (and so that expressions used in this resolution shall bear the same meanings as in the said section 551):

(a) the Directors be and are generally and unconditionally authorised to exercise all powers of the Company to allot shares and to grant such subscription and conversion rights as are contemplated by sections 551(1)(a) and (b) of the Act respectively up to an aggregate nominal amount of GBP183,908.42 to such persons and at such times and on such terms as they think proper during the period expiring at the conclusion of the Company's Annual General Meeting in 2012; and

(b) the Company be and is hereby authorised to make prior to the expiry of such period any offer or agreement which would or might require such shares or rights to be allotted or granted after the expiry of the said period and the Directors may allot such shares or grant such rights in pursuance of any such offer or agreement notwithstanding the expiry of the authority given by this resolution;

so that all previous authorities of the Directors pursuant to section 551 of the Act and are hereby revoked.

Special Resolutions

7 THAT, subject to the passing of Resolution 6, the Directors be and are empowered in accordance with section 570 of the Act to allot equity securities (as defined in section 560(1) and 560(2) of the Act) for cash pursuant to the authority conferred on them to allot such shares or grant such rights by that resolution as if section 561(1) of the Act did not apply to the allotment, provided that the power conferred by this resolution shall be limited to:

(a) the allotment of equity securities in connection with an issue or offering in favour of holders of equity securities and any other persons entitled to participate in such issue or offering where the equity securities respectively attributable to the interests of such holders and persons are proportionate (as nearly as may be) to the respective number of equity securities held by or deemed to be held by them on the record date of such allotment, subject only to such exclusions or other arrangements as the Directors may consider necessary or expedient

to deal with fractional entitlements or legal or practical problems arising in connection with the laws of, or requirements of, any recognised regulatory body or stock exchange in, any territory; and

(b) the allotment, otherwise than pursuant to sub-paragraph (a) above, of equity securities up to an aggregate nominal value not exceeding GBP55,172.53

(i) and this power, unless renewed, shall expire at the conclusion of the Company's Annual General Meeting in 2012 but shall extend to the making, before such expiry, of an offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of such offer or agreement as if the authority conferred hereby had not expired.

8 THAT the Company be and is hereby generally and unconditionally authorised in accordance with Section 701 of the Companies Act 2006 (the "Act") to make market purchases (within the meaning of Section 693(4) of the Act) of Ordinary Shares of 1p each in the capital of the Company ("Ordinary Shares") and C Shares of 1p each in the capital of the Company ("C Shares"), provided that:

(a) the maximum number of Ordinary Shares hereby authorised to be purchased is such number of Ordinary Shares as is equal to 14.9% of the total number of Ordinary Shares in issue from time to time and the maximum number of C Shares hereby authorised to be purchased is such number of C Shares as is equal to 14.9% of the total number of C Shares in issue from time to time;

(b) the minimum price (exclusive of expenses) which may be paid for an Ordinary Share or for a C Share shall be 1p;

(c) the maximum price (exclusive of expenses) which the Company may pay for each Ordinary Share or C Share cannot be more than the higher of:

(i) 105% of the average market value of an Ordinary Share or C Share (as defined by reference to the middle market quotations for such shares taken from The London Stock Exchange Daily Official List) for the five business days prior to the day on which the Ordinary Share or C Share is contracted to be purchased; and

(ii) the value of an Ordinary Share or C Share calculated on the basis of the higher of the price quoted for: (a) the last independent trade of; or (b) the highest current independent bid for, any number of the Ordinary Shares or C Shares on the trading venue where the purchase is carried out;

(d) unless previously renewed or revoked, the authority hereby conferred shall expire on the earlier of 9 June 2012 and the conclusion of the Company's Annual General Meeting in 2012 save that the Company may, prior to such expiry, enter into a contract to purchase Ordinary Shares or C Shares which will or may be completed or executed wholly or partly after such expiry.

By order of the Board of Directors

Acuity Capital Management Limited

Secretary

Registered Office:

Paternoster House

65 St Paul's Churchyard

London EC4M 8AB

31 January 2011

Notes

A Holders of Ordinary and/or C Shares, or their duly appointed representatives, are entitled to attend and vote at the Annual General Meeting (the "Meeting" or the "AGM"). Shareholders are entitled to appoint a proxy to exercise all or any of their rights to attend and speak and vote on their behalf at the Meeting. A shareholder can appoint the Chairman of the Meeting or anyone else to be his/her proxy at the Meeting. A proxy need not be a shareholder. More than one proxy can be appointed in relation to the AGM provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder. To appoint more than one proxy, the Proxy Form should be photocopied and completed for each proxy holder (or you may contact the Registrars to obtain additional proxy forms). The proxy holder's name should be written on the Proxy Form together with the number of Ordinary Shares and/or C Shares in relation to which the proxy is authorised to act. Please also indicate if the proxy instruction is one of multiple instructions being given. All Proxy Forms must be signed and to be effective, must be lodged with Capita as set out in Note B below.

B A Form of Proxy is provided. To be effective, the Form of Proxy and any power of attorney under which it is executed (or a duly certified copy of such power) must reach the Company's Registrars, Capita Registrars, P.O. Box 25, Beckenham, Kent BR3 4BR, not less than 48 hours before the time of the Meeting or adjourned Meeting or (in the case of a poll taken otherwise than at or on the same day as the Meeting or adjourned Meeting) not less hat 24 hours before the time appointed for the taking of the poll at which it is to be used. Completion and return of the Form of Proxy will not prevent a member from attending and voting at the Meeting. You can also deliver by hand during normal business hours to The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU.

C In accordance with Regulation 41 of the Uncertificated Securities Regulations 2001, only those holders of Ordinary Shares and or C Shares entered on the register of members of the Company as at 6.00pm on 8 March 2011 (the "Specified Time") shall be entitled to attend and vote at the Meeting in respect of the number of Ordinary Shares and or C Shares registered in their name at that time. Changes to entries on the register of members after the Specified Time shall be disregarded in determining the rights of any person to attend and vote at the Meeting.

D If the Meeting is adjourned to a time not more than 48 hours after the Specified Time applicable to the original Meeting, that time will also apply for the purposes of determining the entitlement of members to attend and vote (and for the purposes of determining the number of votes they may cast) at the adjourned Meeting. If, however, the Meeting is adjourned for a longer period, then to be so entitled, members must be entered on the Company's register of members at a time which is not more than 48 hours before the time fixed for the adjourned Meeting or, if the Company gives notice of the adjourned Meeting, at the time specified in that notice.

E If you are a person nominated to enjoy information rights in respect of the Company pursuant to section 146 of the Companies Act 2006, you should be aware that you may have a right under an agreement between yourself and the member who nominated you to be appointed, or to have someone else appointed, as a proxy entitled to attend and speak and vote at the Meeting. You are advised to contact the member who nominated you for further information on this and the procedure for appointing any such proxy. If you have no right to be appointed, or to have someone else appointed, as a proxy for the Meeting, or you do not wish to exercise such right, you may still have the right under an agreement between yourself and the member who nominated you to give instructions to the member as to the exercise of voting rights at the Meeting. You are advised to contact the member who nominated you for further information on this.

F In order to facilitate voting by corporate representatives at the AGM, arrangements will be put in place at the AGM so that: (i) if a corporate

shareholder has appointed the Chairman of the Meeting as its corporate representative to vote on a poll in accordance with the directions of all of the other corporate representatives for that shareholder at the Meeting, then on a poll those corporate representatives will give voting directions to the Chairman and the Chairman will vote (or withhold a vote) as corporate representative in accordance with those directions; and (ii) if more than one corporate representative for the same corporate shareholder attends the Meeting but the corporate shareholder has not appointed the Chairman of the Meeting as its corporate representative, a designated corporate representative will be nominated, from those corporate representatives who attend, who will vote on a poll and the other corporate representatives will give voting directions to that designated corporate representative. Corporate shareholders are referred to the guidance issued by the Institute of Chartered Secretaries and Administrators on proxies and corporate representatives (www.icsa.org.uk) for further details of this procedure. The guidance includes a sample form of appointment letter if the Chairman is being appointed as described in (i) above.

G The following documents will be available for inspection at the registered office of the Company during usual business hours on any weekday (Saturdays and public holidays excepted) from the date of this notice until the close of the Annual General Meeting and will be available at the place of the Annual General Meeting from 8.00am until the conclusion of the Meeting:

(a) the Memorandum and current Articles of Association of the Company; and

(b) the terms and conditions of appointment of all Directors.

H The total number of issued Ordinary Shares and C Shares in the Company on 31 January 2011, which is the latest practicable date before the publication of this document, is 54,394,938 Ordinary Shares and 777,589 C Shares carrying one vote each. The Company has not granted any options over shares in the Company or issued any warrants in the Company.

I Short biographical details of all of the Directors are contained in the Report & Accounts for the year ended 30 September 2010 on page 15.

If you have sold or otherwise transferred all your Shares in Acuity Growth VCT Plc, you should pass this document and other relevant accompanying documents, to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was made, for transmission to the purchaser or transferee.

This information is provided by RNS

The company news service from the London Stock Exchange

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