Circ re propsals to merge the Company's share c...

THE INCOME & GROWTH VCT PLC

2 MARCH 2010

RECOMMENDED PROPOSALS TO MERGE THE SHARE CLASSES OF THE COMPANY AND MAKE
CONSEQUENTIAL AMENDMENTS TO THE ARTICLES, APPROVE REVISED MANAGEMENT AND
ADMINISTRATION ARRANGEMENTS, AMEND THE INVESTMENT POLICY OF THE COMPANY AND
RENEW AND INCREASE THE AUTHORITY TO ISSUE AND BUY-BACK SHARES.

SUMMARY

The board of directors of the Company ("Board"), which is managed by Matrix
Private Equity Partners LLP ("Matrix Private Equity"), is pleased to advise
that they are today writing to shareholders with proposals to consolidate the
share classes of the Company into one class of share ("Share Merger")

The Share Merger, if approved, is expected to become effective on 29 March
2010. The proposal requires the approval of resolutions to be proposed to
shareholders of the Company at an extraordinary general meeting and separate
class meetings to be held on 26 March 2010 ("the Meetings").

The Board also consider it appropriate, subject to the Share Merger becoming
effective, to approve revised management, administration and performance
incentive arrangements with Matrix Private Equity and amend the existing
articles of association to reflect the Share Merger. In addition, it is also
proposed to amend the investment policy of the Company in relation to its
uninvested cash and renew and increase share issue and share repurchase
authorities. The proposals require the approval of resolutions to be proposed
to shareholders of the Company at the Meetings.

BACKGROUND

The Company was originally launched in 2000 and initially raised funds pursuant
to an issue of ordinary shares of 1p each in the capital of the Company
("Ordinary Shares"). The Company then raised further funds through the issue S
ordinary shares of 1p each in the capital of the Company ("S Shares") in 2008.
It was agreed that the Company should raise this additional capital through a
separate class of shares on the basis that it would be managed solely by Matrix
Private Equity, unlike the then Ordinary Shares which was originally managed by
multiple fund managers, including Matrix Private Equity.

It was envisaged that the Ordinary Shares fund and S Shares fund would continue
to be managed separately due to their then differing investment management
mandates and arrangements. In March 2009, Matrix Private Equity became the sole
investment manager in respect of the Ordinary Shares fund (although it assumed
responsibility for all of the Ordinary Share fund in October 2008). As a result
of Matrix Private Equity now being the sole investment manager of both the
Ordinary Shares fund and S Shares fund, the investment policies of both classes
have become aligned, thus reducing the original rationale to keep the share
classes separate.

The Board therefore propose to merge the share classes which will provide the
Company with cost savings and strategic benefits.

THE SHARE MERGER

The Share Merger will be effected by first merging the Ordinary Shares into the
S Shares and then redesignating the S Shares as Ordinary Shares (this being
referred to herein as "New Ordinary Shares").

The Share Merger will be completed by reference to the relative NAVs of the
Ordinary Shares fund and the S Shares fund (adjusted for dividends to be paid)
as at 31 December 2009.

MATRIX PRIVATE EQUITY AND THE REVISED MANAGEMENT, ADMINISTRATION AND
PERFORMANCE INCENTIVE ARRANGEMENTS

Matrix Private Equity is the Company's investment manager and it has also
assumed the responsibilities of providing administrative services in place of
Matrix-Securities Limited following a reorganisation of the Matrix Group.
Matrix Private Equity will continue to be the investment manager to the Company
following the Share Merger on, in light of the Share Merger, the revised terms
(subject to Shareholder approval) as follows:

  * The existing management and administration arrangements between the
    Company, Matrix Private Equity and Matrix-Securities Limited (amongst
    others) will be replaced with a new investment management agreement with
    Matrix Private Equity covering both management and administration services
    for an annual fee (inclusive of VAT, if any) of an amount equivalent to 2.4
    per cent. of the net assets of the Company (one-sixth of which to be
    subject to a minimum of £130,000 and a maximum of £150,000, the remainder
    of such fee not being subject to any cap).
   
  * The new agreement will be on substantially the same terms as the existing S
    Share fund management and administration arrangements, subject to being
    supplemented by any material arrangements within the Ordinary Share fund
    management and administration arrangements and the appointment being on 12
    months' notice (albeit there currently being an initial fixed period in
    respect of the S Share fund arrangements which has not expired). Matrix
    Private Equity has agreed to continue to meet the annual expenses of the
    Company in excess of 3.25 per cent. of the NAV of the Company for each
    financial period, this being the annual expenses cap as currently provided
    under the existing annual expenses deed and which will also be provided for
    in the new agreement.
   
  * The existing S Share fund performance incentive arrangement will be
    terminated while the performance incentive arrangement of the Ordinary
    Share fund shall continue but be amended fin light of the Share Merger to
    cover the amalgamated share class. New investments made (i.e. no
    performance incentive fees will be payable on the S Share fund investments
    made) by the Company following the Share Merger will be added to the
    calculation in respect of 70 per cent. only (both in terms of cost and in
    assessing gains and losses over (this being the current investment
    allocation between the Ordinary Shares fund and the S Shares fund). In
    addition, the "High Watermark Test" will be amended to provide that the
    losses of the S Shares fund existing investments as at 31 December 2009
    will need to be made up before any payment is due to Matrix Private Equity.
   
The ongoing entitlement of Foresight Group to performance incentive fees in
respect of the portfolio of the Ordinary Shares fund they previously managed
will continue in its current form.

The Board believes that these arrangements are the most appropriate for the
Company at the current time and considers that they best achieve the principle
of Shareholders not being disadvantaged. Shareholders should be aware that any
future incentive payments will only crystallise in the event of a significant
increase in the current value of the investment portfolio.

Matrix Private Equity, created by a merger between GLE Development Capital
Limited and Matrix Private Equity Limited, is the private equity arm of Matrix
Group and manages funds primarily through a range of VCTs raised from private
investors. Total funds under management are circa £120 million across six funds
with the portfolio of equity investments in companies currently numbering
forty.

Matrix Private Equity specialises in backing management buy outs and takes a
partnership approach to investing, working alongside ambitious, entrepreneurial
management teams wishing to buy businesses. Equity investments, typically up to
£7 million, are made in UK privately owned companies across a broad range of
industries and sectors, helping entrepreneurial management teams to achieve
substantial gains for all shareholders. Matrix Private Equity often works with
a highly experienced operating partner who has direct management experience and
a wide range of contacts. Matrix Private Equity is recognised as one of the
most experienced teams and active investors in this segment of the private
equity market.

Matrix Private Equity (telephone: [phone]) was incorporated and
registered in England and Wales as a limited liability partnership on 27 June
2006. Matrix Private Equity's registered office and principal place of business
is at One Vine Street, London W1J 0AH. Matrix Private Equity is authorised and
regulated by the FSA to provide investment management services. The principal
legislation under which Matrix Private Equity operates is the provisions of the
Limited Liability Partnership Act 2000 and the relevant provisions of the
Companies Act 2006 (and regulations made thereunder).

AMENDMENT TO THE INVESTMENT POLICY

The Board believes that the current investment policy on the uninvested funds
constrains them from considering a wider range of alternatives to the current
holdings in money-market funds and, accordingly, shareholders are being asked
to approve a change in investment policy relating to the funds awaiting
investment, so that the Company's cash and liquid resources be invested to
maximise income returns in a range of instruments of varying maturities,
subject to the overriding criterion that the risk of loss of capital be
minimised.

The Board will consider whether the Company's cash resources could be invested
in a wider range of opportunities, to aim to achieve a higher rate of income
return, while still aiming to safeguard the Company's capital. The Board wishes
to emphasise strongly that it is not their present intention to increase the
level of risk associated with higher levels of income. However, the Board would
like to be able to consider a wider range of alternatives in the future should
a suitable situation occur, subject to the general aim of safeguarding the
Company's capital being maintained.

EXPECTED TIMETABLE

Share Merger NAV Reference Date                                31 December 2009
                                                                               
Extraordinary General Meeting                         10.30 am on 26 March 2010
                                                                               
Ordinary Share Class Meeting                          10.40 am on 26 March 2010
                                                                               
S Share Class Meeting                                 10.45 am on 26 March 2010
                                                                               
Record Date for the Share Merger                  close of business on 26 March
                                                                           2010
                                                                               
Effective Date for the Share Merger               close of business on 29 March
                                                                           2010
                                                                               
Amendment to the listing of Shares                                30 March 2010
                                                                               
CREST accounts re-credited                                        31 March 2010
                                                                               
Certificates for the New Ordinary Shares                           5 April 2010
dispatched                                                                     

FURTHER INFORMATION

Shareholders will receive a copy of a circular convening the Meetings to be
held on 26 March 2010 at which shareholders will be invited to approve
resolutions in connection with the proposals. A copy of the circular for the
Company has also been submitted to the UK Listing Authority and will be shortly
available for inspection at the UK Listing Authority's Document Viewing
Facility which is situated at:

Financial Services Authority

25 The North Colonnade

Canary Wharf

London E14 5HS

Telephone: [phone]

For further information, please contact:

Investment Manager to the Company

Matrix Private Equity Partners LLP

Mark Wignall

Telephone: [phone]

Administrator to the Company

Matrix Private Equity Partners LLP/Matrix-Securities Limited

Robert Brittain/Sarah Penfold

Telephone: [phone]

Solicitors to the Company

Martineau

Kavita Patel

Telephone: [phone]