Mobeus I&g Regulatory News (MIX)

Mobeus Income & Growth VCT plc ("MIG" or the "Company" or the "VCT")

Annual Results Announcement for the year ended 31 December 2013

FINANCIAL HIGHLIGHTS

Annual results for the year ended 31 December 2013

PERFORMANCE SUMMARY

The net asset value per share of the Company at 31 December 2013 was 102.18 pence.

The table below shows the recent performance of the original funds raised in 2004/05. Performance data for all fundraising rounds and for former Matrix Income & Growth 3 VCT shareholders are shown on pages 69 - 70 of the Annual Report.

1 Source: London Stock Exchange.

2 Cumulative total return per share comprises either the NAV per share (NAV basis) or the mid-market price per share (share price basis), plus cumulative dividends paid.

3 The discount on the Company's shares at 31 December 2013 was 9.6% based on the NAV per share at 30 September 2013 of 96.75 pence, which was the latest published figure at that time.

* Proposed final dividend -The figure in the above table for dividends per share in respect of the year ended 31 December 2013 includes a proposed final dividend of 3.25 pence. This dividend comprises 1.50 pence from capital and 1.75 pence from income and will be recommended to shareholders at the Annual General Meeting of the Company to be held on 7 May 2014. If approved, the dividend will be paid on 14 May 2014 to shareholders on the Register on 22 April 2014 and will bring total dividends paid in respect of the year ended 31 December 2013 to 7.25 pence per share.

CHAIRMAN'S STATEMENT

I am pleased to present the annual results of Mobeus Income & Growth VCT plc for the year ended 31 December 2013.

Performance

This has been another positive year for the VCT. The Company produced a NAV total return per share of 14.8% (2012: 10.3%) for the year to 31 December 2013 while the total share price return was 16.2% (2012: 16.5%), continuing the good performance achieved in 2012. The share price has risen over the year from 80.50 pence at 31 December 2012 to 87.50 pence, reflecting the rise in NAV per share. For details of these calculations for the current year, please see the Strategic Report below.

Many of the companies in the portfolio have continued to achieve strong growth in their niche markets. The steady performance of your portfolio supports the view that well-managed and prudently financed businesses can succeed in differing market conditions. The portfolio is well-positioned to take advantage of the more promising near term outlook for the UK economy.

Dividends

Your Directors are pleased to recommend a final dividend in respect of 2013 of 3.25 pence (2012: 2.00 pence) per share, comprising 1.50 pence (2012: 0.50 pence) per share from capital and 1.75 pence (2012: 1.50 pence) per share from income. Subject to shareholder approval, this dividend will be paid on 14 May 2014 to shareholders on the Register on 22 April 2014.

Shareholders received an interim dividend of 4.00 pence per share in September 2013 and this, together with the proposed final dividend, will bring total dividends paid in respect of the year to 7.25 pence (2012: 7.00) per share and cumulative dividends paid since inception to 47.30 pence (2012: 40.05) per share.

The Company's target of paying a dividend of at least 4.00 pence per share in respect of each financial year has been comfortably exceeded in each of the last five years. A table showing the dividends paid in respect of each of the last five years and cumulative dividends paid is included in the Strategic Report on page 9 of the Annual Report.

Investment portfolio

During the year under review, the Company has invested a total of £9.76 million (including £5.00 million which was previously held in acquisition vehicles) to support the MBOs of Gro-Group, Veritek Global and Virgin Wines and two substantial strategic acquisitions by existing portfolio companies, Motorclean and ATG Media. This is a record level of new investment and Mobeus, the Company's Investment Adviser ("Adviser"), reports that dealflow continues to be strong. Following the year-end, the VCT has already completed one further new investment in February 2014. This was to support the MBO of Entanet International Limited, a wholesale provider of internet connectivity solutions. The prospects are good for further new investment during the current year.

Sale proceeds for the year have totaled £5.87 million, including £2.26 million received from Newquay Helicopters (formerly British International) as part of this company's realisation strategy, £0.40 million received from Faversham House and £3.21 million received from other portfolio companies making partial loan stock repayments. Following the year-end, in April 2014, the VCT received £1.56 million in cash proceeds from the successful realisation of Machineworks. A number of companies are pursuing their options for possible exits and we expect that some of these will complete during 2014.

Strategic Report

Shareholders may be aware that a number of significant changes have been introduced by recent legislation which affects the way in which companies are now required to present information in the narrative sections of their annual reports. In particular, you will see that this year's Annual Report contains a Strategic Report for the first time. The purpose of this Report is to inform shareholders and help them to assess how the Directors have performed their duty to promote the success of the Company. The Report sets out the Company's Objective, Investment Policy and Business Model. The Performance section provides information on how, and to what extent, the Company has achieved its Objective during the year and over the longer term, together with a description of the key performance indicators which the Directors monitor in order to measure the success of the Company. That section is followed by the Investment Review, which includes key data on the top ten investments and an analysis of the full investment portfolio. The Report goes on to provide context to this performance, giving information on what the Board regards as the key risks faced by the Company, how those risks are dealt with and the Company's other key policies. In summary this Report should give shareholders an overview of your Company's progress in the year, supported by further detail that you can review, as you wish, in other sections of the Annual Report.

To avoid repetition, much of the detail that would previously have been included in the Chairman's Statement can now be found within the Strategic Report. I would be interested to receive shareholders' views on whether you find this new format helpful and informative as well as your suggestions on any improvements you believe could be made.

Review of longer term performance

Shareholders who invested in 2004 at the launch of the Company have seen a total return of 146.23 pence per share compared with their initial investment cost of 100 pence per share, or a net cost (after initial income tax relief of 40 pence) of 60 pence per share. As part of this return 44.05 pence in dividends have been received. This is an average annual yield upon that initial 60 pence net investment of 7.9%. The balance of the total return, the underlying net asset value, is 102.18 pence per share.

Legislative and regulatory developments

The Finance Bill 2014 ("the Bill") has introduced measures to discourage VCT shareholders from selling their existing shares within six months before or after the date of making a new investment in the same VCT. Investors are now only able to claim income tax relief to the extent that the value of the new shares they subscribe for in respect of that VCT exceeds the proceeds from the shares which were sold. The Bill also contains measures that will prevent VCTs from returning share capital to investors within three years of the end of the accounting period in which the VCT issued the shares. Distributions made from realised profits will not be affected by this change. These changes will apply to shares issued after 6 April 2014.

The VCT is required to appoint an Alternative Investment Fund Manager ("AIFM") before July 2014 to comply with new legislation which implements the European Commission's Alternative Investment Fund Managers' Directive. This development has tightened the rules on alternative investments. The Board is considering the Company's options in respect of the new legislation and is seeking clarification of the requirements. However, at the current time, given the information currently available, the nature of the Company's business and the fact that the Adviser has been appointed under a non-discretionary mandate, the Board believes that the most appropriate action will probably be for the Company to appoint itself as its own AIFM to comply with the specific requirements of the legislation. Mobeus will continue to provide investment advisory and administrative services to the Company under the current agreement.

Recent changes to the European Commission's Transparency Directive will mean that the Company will shortly no longer be required to publish quarterly Interim Management Statements. However, the Board intends to continue to announce the NAV per share on a quarterly basis.

Board of Directors

Following a review of the composition of the Board by the Nomination and Remuneration Committee, the Board intends to appoint a new Director as part of its succession planning shortly.

Fundraising

The Company raised £8.28 million (£8.09 million after issue costs) in the Mobeus Linked VCT Offer launched on 29 November 2012, which closed on 30 June 2013. The Company launched a further linked fundraising with the other three Mobeus VCTs on 28 November 2013 to raise up to £24 million, which has since been increased to £34 million, across the four VCTs. The funds raised for the VCT will further improve the Company's liquidity, ensuring it can take part in the expected increased dealflow and enabling it to spread its fixed running costs over a larger asset base. The monies raised will provide a fund of new money which may be used to pay ongoing expenses, including dividends and share buybacks, thus preserving money raised prior to 6 April 2012 to support the Company's strategy of investing in MBO deals. Details of the Offer were posted to shareholders in December 2013. This Offer has been well received and a total of £8.09 million of applications has been received by this VCT to date, representing one quarter of the funds raised.

The Offer will remain open until 30 April 2014 although the Directors of the four VCTs reserve the right to extend the closing date at their discretion. It will close earlier if fully subscribed.

The Board is currently of the view that regular fundraisings are needed, to provide adequate levels of capital to enable the Company to pursue its Objective. Therefore, subject to any changes in the regulatory and/or investment environment, the Board is considering a further fundraising to be launched during the 2014/15 tax year.

Annual General Meeting

The Annual General Meeting of the Company will be held at 2.00 pm on Wednesday, 7 May 2014 at the offices of SGH Martineau LLP, One America Square, Crosswall, London EC3N 2SG. Both the Board and the Adviser look forward to welcoming shareholders to the meeting which will provide shareholders with the opportunity to ask questions and to receive a presentation from the Adviser on the investment portfolio.

Industry award for the Company

We are pleased to report to shareholders that the Company was awarded VCT of the Year 2013 at last year's Investment Week Investment Company Awards. The award recognised the strong and consistent all-round performance of the Company.

Future prospects

We have seen clear signs of improvement in the outlook for the UK economy since the end of the half-year in June 2013. Some business surveys reveal a cautious optimism in the corporate sector and the Office for Budget Responsibility is currently forecasting growth of 2.7% for 2014. Against this more optimistic tone, other commentators are concerned about how solid such a recovery may be in the medium term, while others argue that interest rates should be raised sooner rather than later, to prevent certain parts of the economy from overheating.

Despite these concerns and the increased tensions between Russia and the West, the Board and the Adviser believe that the recent pick-up in growth in the UK economy will be sustainable and that interest rates and inflation will remain relatively low for the foreseeable future.

The Adviser is also of the view that there are many promising new opportunities to invest in established, profitable businesses on attractive terms. In addition, there continue to be several opportunities to provide further finance to certain businesses in the portfolio to enable them to make acquisitions. The VCT's strong cash position will enable it to capitalise on the opportunities for new investment.

The Board continues to believe that its Investment Policy mitigates many of the risks inherent in investing in smaller UK companies and that it should continue to generate attractive returns for shareholders.

Finally, I would like to express my thanks to all shareholders for their continuing support of the Company.

Keith Niven

Chairman

STRATEGIC REPORT

Introduction

The Directors are pleased to present the Strategic Report of the Company for the year ended 31 December 2013. The purpose of this Report is to inform shareholders and help them to assess how the Directors have performed their duty to promote the success of the Company.

The Report has been prepared by the Directors in accordance with section 414 of the Companies 2006 ("the Act").

Company Objective

The Objective of the Company is to provide investors with a regular income stream, by way of tax-free dividends generated from income and capital returns.

The Company and its business model

The Company is a Venture Capital Trust ("VCT"). Its Investment Policy is designed to ensure that the VCT continues to qualify and is approved as a VCT by HM Revenue & Customs ("HMRC") whilst maximising returns to shareholders from both income and capital. One of the rules to remain a VCT is that it must remain a fully listed company on the London Stock Exchange, and thus must also comply with the listing rules governing such companies.

The Company is an externally advised fund with a Board comprising non-executive Directors. The Board has overall responsibility for the Company's affairs including the determination of its Investment Policy. Investment advisory and operational support are outsourced to external service providers including the Adviser, Company Secretary and Administrator and Registrar, with the key strategic and operational framework and key policies set and monitored by the Board. Investment and divestment proposals are originated, negotiated and recommended by the Adviser and are then subject to comment and approval by the Directors.

Private individuals invest in the Company to benefit from both income and capital returns generated by investment performance. By investing in a VCT they also receive immediate income tax relief (currently 30% of the amount subscribed for new shares by an investor), as well as tax-free dividends received from the Company and are not liable for any capital gains tax upon the eventual sale of the shares.

PERFORMANCE

The Board has identified six key performance indicators that it uses in its own assessment of the Company's progress. These are intended to provide shareholders with sufficient information to assess how the Company has performed in 2013 and over the longer term against its Objective, resulting from the application of its investment and other principal policies:

Total shareholder returns per share for the year

The NAV and share price total returns per share for the year ended 31 December 2013 were 14.8% and 16.2% respectively, as shown below:

The Board considers both the NAV and share price returns for the year to be satisfactory.

For similar performance data to that shown above for each allotment in each fundraising since the inception of the Company (including the former Matrix Income & Growth 3 VCT), please see the Performance Data Appendix in the Annual Report.

Review of financial results for the year

The positive capital return of £4.90 million for the year is due to a healthy uplift in portfolio valuations of a net £4.83 million on investments held at the year-end and gains realised in the year from disposals of £0.73 million. Management fees charged to capital returns were a net £0.66 million.

The increase in the revenue return for the year of £1.29 million is mainly due to a rise in income of £1.66 million, from £1.80 million to £3.46 million, explained in the table below:

2. The VCT's performance compared with its peer group

The Board places emphasis on benchmarking the Company's performance against its peer group of VCTs. Statistics produced by the AIC demonstrate that the Company's total return per share on a NAV basis has been maintained in the first or second quartile of the VCT's peer group on a one, three and five year basis.

Industry awards for the Company and the Investment Adviser

The Company was awarded VCT of the Year 2013 at last year's Investment Week Investment Company Awards. The performance of the Adviser was also recognised in the unquote" British Private Equity Awards 2013, where Mobeus was named VCT House of the Year 2013 for the second consecutive year. These awards recognised the high level of consistency achieved by the Company and the Adviser during the year in maintaining high standards in all areas of its activity including deals, exits, portfolio management and fundraising.

3. Compliance with VCT legislation

In order to comply with VCT tax legislation, the Company must meet a number of tests set by HMRC as detailed below under VCT Regulation within the Investment Policy. At 31 December 2013, the Company continued to meet these tests.

4. Costs

The Board monitors costs using the Ongoing Charges Ratio which is as set out in the table below.

The Ongoing Charges Ratio has been calculated using the AIC recommended methodology. This figure shows shareholders the annual percentage reduction in shareholder returns as a result of recurring operational expenses, assuming markets remain static and the portfolio is not traded. Although the ongoing charges figure is based upon historical information, it provides shareholders with an indication of the likely level of costs that will be incurred in managing the fund in the future.

The Ongoing Charges Ratio replaces the Total Expense Ratio previously reported, although the latter will still form the basis of any expenses in excess of the expense cap, that would be borne by the Adviser. There was no breach of the expense cap for the year ended 31 December 2013 (2012: £nil).

The fall in the ratio over the year reflects the benefit of spreading the element of costs that are fixed across a larger asset base.

Management fees and other expenses

In line with the rise in net assets, Adviser fees charged to both revenue and capital have increased from £0.97 million to £1.15 million whilst other expenses have risen slightly from £0.26 million to £0.29 million

In addition to its Investment Policy, the Board also monitors the key performance indicators arising from applying its Dividend and Share Buyback Discount Policies. These indicators are respectively dividends paid in respect of each year and the discount to NAV at which shares are bought back by the Company.

5. Dividend policy

The Company has a target of paying an annual dividend of at least 4.00 pence per share in respect of each financial year. It has comfortably exceeded this target in each of its last five financial years.

However, the ability of the Company to pay dividends in the future cannot be guaranteed and will be subject to performance and available cash and reserves.

6. Share buyback and discount policy

Subject to the Company having sufficient available funds and distributable reserves, it is the Board's current intention to pursue a buyback policy with the objective of maintaining the discount to the latest published NAV at which the shares trade at approximately 10%. Continuing shareholders benefit from the difference between the net asset value and the price at which the shares are bought back and cancelled. The discount of approximately 10% has been maintained for much of the last three years, since the Board stated its intent to target such a discount level.

During the year ended 31 December2013, shareholders holding 1.22 million shares expressed their desire to sell their investments. The Company instructed its brokers, Panmure Gordon (UK) Limited ("Panmure Gordon"), to purchase these shares at prices representing discounts of approximately 10% to the previously announced NAV per share. The Company subsequently purchased these shares at prices of between 80.00-87.00 pence per share and cancelled them.

In total, the Company has bought back 2.7% of the issued share capital of the Company at the beginning of the year during the year.

INVESTMENT REVIEW

The strong dealflow reported at the half-yearly stage has continued in the second half of the year. The Adviser is increasingly confident that new investment activity will continue at a high rate in 2014. The Adviser believes the healthy level of dealflow reflects both improved business confidence and the continued perception that the UK banking industry remains unable to meet the funding needs of smaller businesses.

The valuation of the portfolio has increased by 16.0% during the year on a like-for-like basis. This is due to the strong trading performance of, and repayment of borrowings by, a number of companies in the portfolio.

Investments remain diversified across a number of sectors primarily in support services, general retailers, media and technology.

New investment

A total of £9.76* million was invested into new deals during the year under review, including substantial new investments to support the MBOs of Gro-Group, Veritek Global and Virgin Wines.

The Adviser has also focussed on opportunities for expansion by acquisition within the existing portfolio. As a result of this, the VCT has funded two substantial strategic acquisitions by Motorclean and ATG Media. The additional investment in Motorclean was provided to support its ambitions as a consolidator in its market, increasing its depth and range of geographical coverage. For ATG Media, the acquisition finance enabled it to acquire an established position in the USA and broaden its sector coverage.

Principal new investments in the year

* Each of the above investments utilised £1 million from one of the Company's acquisition vehicles, totalling £5 million, which is included in the above figures. For further details please see the Investment Portfolio Summary below.

Post year-end

The VCT made a new investment to support the MBO of Entanet International Limited, including £1 million from an acquisition vehicle.

Realisations in the year

Post year-end

Investment outlook

The increase in the number and the continuing quality of investment opportunities that we have seen in recent months is encouraging. We see this as a result of the upturn in business confidence as the UK consolidates its emergence from recession. We are being approached by sellers with much more realistic expectations of the value of their businesses and the commitment to see deals through to completion. As a result of our prudent approach to new investment during the downturn, the Company still retains a strong level of liquidity which will enable it to take advantage of this more positive environment. We believe that the current encouraging performance of the portfolio, and the improved outlook for new investment, should create value for shareholders in the medium term.

INVESTMENT PORTFOLIO SUMMARY

as at 31 December 2013

KEY POLICIES

The Board has put in place the following policies to be applied to meet the Company's overall objective and to cover specific areas of the Company's business.

INVESTMENT POLICY

The VCT's policy is to invest primarily in a diverse portfolio of UK unquoted companies. Investments are usually structured as part loan and part equity in order to receive regular income and to generate capital gains from realisations.

Investments are made selectively across a number of sectors, primarily in MBOs i.e. to support incumbent management teams in acquiring the business they manage but do not own. Investments are primarily made in companies that are established and profitable.

Uninvested funds are held in cash and lower risk money market funds.

VCT regulation

The Investment Policy is designed to ensure that the VCT continues to qualify and is approved as a VCT by HMRC. Amongst other conditions, the VCT may not invest more than 15% of its investments in a single company or group of companies and must have at least 70% by value of its investments throughout the period in shares or securities comprising VCT qualifying holdings, of which a minimum overall of 30% by value (70% for funds raised on or after 6 April 2011) must be in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules). The VCT can invest less than 30% by value (70% for funds raised on or after 6 April 2011) of an investment in a specific company in ordinary shares. It must, however, have at least 10% by value of its total investments in each VCT qualifying company in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules).

UK Companies

The companies in which investments are made must have no more than £15 million of gross assets at the time of investment and £16 million immediately following the investment to be classed as a VCT qualifying holding.

Asset Mix

The VCT holds its liquid funds in a portfolio of readily realisable interest- bearing investments and deposits. The investment portfolio of qualifying investments has been built up over time with the aim of investing and maintaining around 80% of net funds raised in qualifying investments.

Risk diversification and maximum exposures

Risk is reduced by investing in a number of different businesses across different industry sectors. To reduce the risk of high exposure to equities, each qualifying investment is structured to maximise the amount which may be invested in loan stock.

Co-investment

The VCT aims to invest in larger, more mature, unquoted companies through investing alongside three other VCTs advised by Mobeus with similar investment policies. This enables the VCT to participate in combined investments by the Adviser of up to £5 million in each business year.

Borrowing

The Company's Articles of Association ("Articles") permit borrowings of amounts up to 10% of the adjusted capital and reserves (as defined therein). The VCT has never borrowed and the Board has no current plans to undertake any borrowing.

OTHER KEY POLICIES

Cash available for investment and liquidity

The Company's cash and liquid resources are held in a range of instruments of varying maturities including liquid, low risk Money Market Funds and bank deposits, subject to the overriding criterion that the risk of loss of capital be minimised. The Company has participated in the Mobeus VCTs' annual linked fundraising since 2010 in order to maintain a sufficient level of funds that can be deployed in meeting the day-to-day expenses of the Company, dividends distributions and purchases of the Company's own shares. This enables money raised prior to 6 April 2012 to be allocated for future MBO investment.

Diversity

The Directors have considered diversity in relation to the composition of the Board and have concluded that its membership is diverse in relation to gender and breadth of experience. The Board comprises two men and one woman.

The Company does not have any senior managers or employees. The Board has made a commitment to consider diversity in making future appointments.

Further policies

In addition to the Investment Policy above and the policies on payment of dividends and share buybacks which are discussed earlier in this Strategic Report, the Company has adopted a number of further policies relating to:

- Human rights

- Anti-bribery policy

- Environmental and social responsibility

- Global greenhouse gas emissions

and these are set out in the Directors' Report on page 25 of the Annual Report.

PRINCIPAL RISKS

The Directors acknowledge the Board's responsibilities for the Company's internal control systems and have instigated systems and procedures for identifying, evaluating and managing the significant risks faced by the Company. This includes a key risk management review which takes place at each quarterly Board meeting. Further details of these are contained in the Corporate Governance Statement on pages 35 - 36 of the Annual Report. The principal risks identified by the Board are set out below:

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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 the Directors have elected to prepare the Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss for the Company for that period.

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

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud

and other irregularities.

Website publication

The Directors are responsible for ensuring the Annual Report and the Financial Statements are made available on a website. Financial Statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Directors' responsibilities pursuant to Disclosure and Transparency Rule 4 of the UK Listing Authority

The Directors confirm to the best of their knowledge that:

Having taken advice from the Audit Committee, the Board considers the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable and that it provides the information necessary for shareholders to assess the Company's performance, business model and strategy.

Neither the Company nor the Directors accept any liability to any person in relation to the Annual Report except to the extent that such liability could arise under English law. Accordingly, any liability to a person who has demonstrated reliance on any untrue or misleading statement or omission shall be determined in accordance with section 90A and schedule 10A of the Financial Services and Markets Act 2000.

The names and functions of the Directors are stated on page 23 of the Annual Report.

For and on behalf of the Board:

Keith Niven

Chairman

FINANCIAL STATEMENTS

Income Statement

for the year ended 31 December 2013

All the items in the above statement derive from continuing operations of the Company. No operations were acquired or discontinued in the year. The total column is the Profit and Loss Account of the Company. There were no other recognised gains and losses in the year.

Other than revaluation movements arising on investments held at fair value through the profit and loss account, there were no differences between the return as stated above and at historical cost.

Balance Sheet

As at 31 December 2013

Reconciliation of Movements in Shareholders' Funds

for the year ended 31 December 2013

Cash Flow Statement

for the year ended 31 December 2013

NOTES TO THE ACCOUNTS

2 Income

3 Investment Adviser's fees

4 Tax on profit/(loss) on ordinary activities

5 Dividends paid and payable

6 Basic and diluted earnings per share