venture matters Spring 2010

In this issue

The Albion Track Record

Harrogate Hotel Offer

Portfolio Updates

It is now a year since Albion Ventures was launched, and its management acquired Close’s VCT business.

Happy 1st Birthday Albion Ventures

our news

Albion in the press

VCTs vs Pensions

Welcome to the sPRing 2010 issue of Venture Matters

02 VenTURe MATTeRs

Albion Development VCTs D share issue was recently rated 9/10 in a review in Money Marketing Magazine. For a full copy of the article, please visit the news section of our website www.albion-ventures.co.uk

As pension contributions become less tax-efficient for high earners due to the last Budget’s change in the rules on tax relief, VCTs have continued to appear in the national and trade press as an alternative to pension contributions with their combined benefits of tax-free dividends and initial tax relief at 30%.

Why AlBIon? The Albion Ventures investment strategy with a proven track record

The Albion Ventures team are experienced investors with varied backgrounds in strategy consulting, healthcare, media and investment banking. They have specialised in the management of VCTs since 1996 following an established investment philosophy.

❊ ReDuCeD InVesTMenT RIsk: It is our policy for our investments to have no external gearing, which often enables the VCT to have first charge on any assets of a company in which we invest

❊ BAlAnCeD PoRTFolIo: our portfolio is balanced between lower-risk, often asset backed companies and innovative, higher risk businesses

❊ DIVeRsIFIeD PoRTFolIo: our portfolios do not focus only in one area or industry, allowing diversification of the portfolios across a range of sectors, including healthcare and increasingly the environmental sectors

Bed & Breakfast Offer: £30 per person per night, includes full cooked English or continental breakfast. All readers will also receive a complimentary bottle of house wine awaiting in their room on arrival.

This offer is based on two people sharing a standard double or twin room and is subject to availability.

To take advantage of this offerplease call 01423 706604 or email laura.walker@crownhotelharrogate.com and quote ‘Albion Ventures’. Please visit the hotels website at www.crownhotelharrogate.com

03

our news sPring 2010

There is still time to invest in the award winning Albion Development VCTs D share issue.

To be certain your application for the 2009/10 tax year is accepted, please ensure we receive your application by Monday 5 April 2010. Applications for the tax year 2010/11 can be received up to Friday 30 April 2010. Albion Development VCT’s D share issue aims to generate both long term growth and a regular tax-free dividend stream.

Invest now in the Albion Development VCTs D Share Offer

Hotel Offer

in late 2005 we acquired the historic 110 bedroom Crown Hotel in the centre of Harrogate. The hotel has since been fully refurbished, making it ideal for business or leisure trips to the historic spa town of Harrogate, with its Turkish Baths, tea rooms and many independent shops.we are pleased to be able to offer readers of Venture Matters the following:

investment news

Happy 1st Birthday Albion Ventures. Over the year we have continued to seek out strong investment opportunities for our range of VCTs and over the last few months, many of our portfolio companies have successfully won new business.

helveta

helveta wins a major contract in Africa

Helveta has won a multi-year contract with the government of the Democratic Republic of Congo (DRC) to implement a national traceability system. The World Bank has committed over $60m to improving DRC’s

forestry sector, and a proportion of this has been set aside to improve governance, sustainability and legality in the industry.

DRC is home to the world’s second largest tropical rainforest, representing 80% of Africa’s rainforest cover. As is the case in many tropical timber producing nations, illegal logging is a significant threat to sustainable development of the sector as well as to DRC’s economy. The national forest management project will enable DRC to meet the requirements of international agreements, such as the eU’s FLegT initiative, and prevent trade in illegal timber.

The project will utilise helveta’s unique technology to map, record inventory, and track wood produced from the Congolese forestry sector, from the standing tree in the forest, through wood processing plants, and finally to the nation’s export gates and local wholesale markets.

lowcosttravel

04

Albion has invested £3.4 million in lowcosttravel since 2005

Despite the credit crunch affecting the travel market worldwide, Lowcost Travel group had a record month of trading in January 2010 with their business lowcostbeds.com seeing a 123% rise in business compared to January 2009. Lowcostbeds.com offers high quality, competitively priced hotel accommodation in 3,000 hotels, apartments and villas around the world, including the Mediterranean, Carribean, Central America, UsA, Middle, east, india, south east Asia and the indian Ocean.

The largest area of growth for the business is bookings for travel in June, July and August where lowcostbeds.com and Resorthoppa the uk’s leading independent holiday transfer business, are experiencing over 200% growth year-on-year.

Albion Ventures LLP is a leading venture capital investor which has been managing investments since 1996. The team previously worked together at Close Ventures before becoming an independent business in January 2009.

VenTure MATTers 05

inVesTMenT news sPring 2010

According to the latest UK Film Council statistics, 2009 had the highest cinema attendance in the last six years; good news for the six ‘art house’ cinemas we own in conjunction with City screen, located in Brixton, greenwich, Cambridge, Liverpool, exeter and norwich.

2009 proved to be a strong year for cinema in Britain, thanks to blockbusters such as Harry Potter and the Half Blood Prince, slumdog Millionaire and Avatar. The introduction of 3D films saw both children and adults alike visiting their local cinema, special glasses in hand, to enjoy the phenomenon.

Blackbay City Screen

Demand for Blackbay Solutions Drives Expansion to North America

Blackbay, an Albion backed company, provides mobiledata applications to businesses in the logistics and delivery sectors and has recently expanded its operations into north America.

Blackbay has delivered solutions to blue chip organisations such as DHL, royal Mail, Hermes and Dyson. Blackbay is differentiated from its perceived competitors by how it has used its extensive industry knowledge and expertise to deliver robust highly scalable solutions.

One area where they have demonstrated the depth of their experience is in the postal market. Blackbay has a strong relationship with royal Mail, which utilises the mobile technology in 25,000 of its vehicles, enabling staff to collect proof of delivery via electronic hand-held devices. The system captures event and time stamping throughout the delivery process providing visibility to royal Mail’s operations and customers in real-time and reducing the cost of administering its services.

Albion Ventures LLP 1 King’s Arms Yard, London, eC2R 7AF T: 020 7601 1850 e: info@albion-ventures.co.uk www.albion-ventures.co.uk

This newsletter is not a prospectus and should not be relied upon in making a decision to invest in any of our funds. That decision should be based solely on the relevant prospectus or fund raising document. none of the figures quoted herein should be regarded as a dividend or profit forecast. Past performance is not a reliable indicator of future results. This newsletter is issued by Albion Ventures LLP which is authorised and regulated by the Financial services Authority.

Albion Venture Capital Trust PLC Apr 96 189.60p 62.5p 2.5p paid on 6/1/10 – Ordinary shares*

Albion Protected VCT PLC Apr 97 111.35p 53.0p 1.0p paid on 6/1/10

Albion Development VCT PLC Jan 99 127.05p 64.0p 4.0p paid on 25/9/09– Ordinary shares*

Albion Development VCT PLC Dec 09 94.50p 95.0p – D shares***

Albion Technology & general VCT PLC Jan 01 140.80p 72.0p 8.0p paid on 30/12/08– Ordinary shares

Albion Technology & general VCT PLC Jan 06 80.80p 56.5p 1.0p paid on 18/9/09– C shares

Albion income & growth VCT PLC Oct 04 81.74p 51.0p 1.25p paid on 1/2/10

Albion enterprise VCT PLC Apr 07 91.95p 74.0p 1.0p paid on 6/1/10

Crown Place VCT PLC** Apr 98 69.18p 27.5p 1.25p paid on 6/11/09

Launch date

Mid-market share price††Fund

Total return since launch†

Last dividend paid/declared per share

Performance of VCTs managed by Albion Ventures llP

source: Albion Ventures. All data is prepared as at 8 February 2010, using the last published net asset value of the relevant fund.* The Albion VCT PLC C shares were converted to Ordinary shares at a rate of 1 Ordinary share for each C share and the Albion Development VCT PLC C shares

were converted to Ordinary shares at a rate of 1.0715 Ordinary shares for each C share.

** Albion Ventures took over the management of this VCT in April 2005.

*** The Albion Development VCT PLC D shares were issued at 100 pence each. The total return since

launch of 94.5 pence is after deducting fundraising costs of 5.5 pence per share.

† Dividends paid/declared plus nAV. Please note: the above excludes all tax reliefs.

††As at 8 February 2010.

performance

Albion Ventures has paid over £80 million of income tax free dividends to its VCT investors, and has approximately £200 million under management in 7 VCTs.

The VCTs managed by Albion Ventures have a policy of buying back their shares in the market. in such circumstances the VCTs will look to buy-back shares at a discount to their net asset value, subject to certain conditions.