MXC Capital : Annual Report for the year to 31 August 2016

mxc capital limited

annual RepoRt for the year to 31 august 2016 london'S tecHnoloGY meRcHant BanK

MXC is a quoted (aIM: MXCP) merchant bank specialising in investing in technology companies, building value in the companies we invest in as well as for our own shareholders.

MXC's merchant banking model, investing as a principal, sharing in the risk as well as the reward, unambiguously aligns our management directly with the interests of our shareholders.

MXC Capital Limited is a guernsey based and incorporated permanent capital vehicle that is responsible for the company's strategy, capital raising and investment decisions as well as the supervision of our London based merchant banking activities. MXC's advisory Board comprises a number of the company's key professionals all of whom are significant investors in the company. the advisory Board is responsible for originating investment opportunities and contributing to the day to day management of our investments.

contentS

1. highlights

2. our management

04 strategic report

16 Directors' report

1. statement of directors' responsibilities

2. Independent auditor's report to the members of MXC Capital Limited

1. Consolidated statement of profit or loss

2. Consolidated statement of comprehensive income

3. Consolidated statement of financial position 25 Consolidated statement of changes in equity 26 Consolidated statement of cash flows

27 Notes to the consolidated financial statements

1. appendix

2. Company information

www.mxccapital.com

HiGHliGHtS

a YeaR oF SteadY pRoGReSS

"I am pleased to report a year of steady progress with further strengthening of the business and its portfolio of investments. MXC benefitted from the increasing number of investments in its portfolio and a higher level of activity in corporate finance.

We have a promising pipeline of opportunities which will allow us to continue to drive the growth of our investee companies, as well as provide us with completely new investment prospects to consider. I look forward to the future with confidence".

peteR RiGG cHaiRman

• underlying trading eBItDa* of £3.1 million

  (2015: £1.0 million), £1.2 million (2015: £0.3 million) on a consolidated basis**

• growth in NaV per share over the year of 11% (2015: 34%); over two years of 49%

• NaV per share growth reflects balance between recent and mature investments in portfolio

• gross revenues from Capital Markets and advisory businesses for the year of £6.2 million,

  £4.6 million on a consolidated basis (2015: £2.1 million)

• Net assets of £80.7 million as at 31 august 2016 (31 august 2015: £49.9 million)

• £31.5 million of investments and loans made during the year across six businesses; portfolio now eleven investments, six of which are quoted

• £3.8 million of capital returns to shareholders announced during the year

*underlying trading eBItDa comprises the trading eBItDa** of the Capital Markets and advisory businesses pre-consolidation; an element of the results from both businesses is eliminated on consolidation.

**earnings from trading activities before interest, tax, depreciation, amortisation, restructuring and non-recurring costs, share-based payments and realised and unrealised gains on investments.

£80.7m

net aSSetS (2015 : £49.9m)

£31.5m

inveSted duRinG YeaR

£3.8m

RetuRned to SHaReHoldeRS

49%

GRowtH in nav peR SHaRe oveR two YeaRS

mxc capital ltd annual RepoRt for the year to 31 august 2016 01

ouR manaGement

mxc capital limited BoaRd

MXC Capital Limited is a guernsey based and incorporated permanent capital vehicle ("PCV") quoted on aIM with a Board of experienced independent directors setting strategy. the Board is responsible for capital raising, making investment decisions, dividend policy and supervision of the Company's capital markets business and the company's advisory Board.

peteR RiGG

non-executive cHaiRman

Peter rigg is an experienced chairman with a background in investment banking. Currently serving as chairman of Polarcus Limited, an oslo listed marine seismic survey company, Peter is also an independent non-executive director of schroders oriental Income fund Ltd and a director of Cartesius advisory Network. Peter was formerly head of asian equity Capital Markets and head of Investment Banking North asia at Credit suisse first Boston.

maRc YounG executive diRectoR

Marc is a corporate financier and corporate broker with a decade of experience leading numerous M&a mandates, IPos and secondary fundraisings for quoted companies, following experience at both specialist brokerages and an investment bank. Latterly, Marc was a Director and head of technology at finnCap Limited. Marc is a chartered accountant, having trained in the Information, Communication and entertainment division at KPMg.

paul GuilBeRt

independent non-executive diRectoR Paul is an experienced non-executive Director with specific long term expertise serving on the boards

of both quoted and unquoted investment companies, and private equity fund businesses including Permira, apollo, alchemy and schroders. through his previous executive role of sVP/global head of Private equity fund administration at Northern trust he was exposed to over 60 separate investment groups. Paul is therefore well placed to both sit on the board of MXC and head the audit and remuneration committees.

meRiel lenFeSteY

independent non-executive diRectoR Meriel has significant experience in both technology and investment with more than 17 years' experience at Board level. she worked at Microsoft and the BBC before becoming a successful entrepreneur. Meriel

is currently a strategic adviser to Jersey telecom and a non-executive director of JVM PCC, a Microsoft Ventures backed, early stage technology fund.

mxc adviSoRY BoaRd

MXC advisory is the advisory and consultancy division of the company responsible for originating investment opportunities, making recommendations on them

and providing operational and strategic guidance

to our investee companies. It comprises the advisory Board which reports to its parent, MXC Capital Limited in guernsey. the advisory Board is driven by MXC founders Ian smith and tony Weaver who are employed full-time by MXC advisory to lead

its activities.

maRtin Bolland cHaiRman

Martin founded the private equity group alchemy, serving as a Partner for 11 years. Martin is currently chairman of Capita plc, a ftse 100 company. Martin previously held a number of senior operational roles in Lonrho and is a chartered accountant.

ian SmitH FoundeR

Ian has an extensive track record of investing in and managing tech companies. he co-founded the advisory subgroup of MXC Capital. Ian has sat on numerous boards and either led or been involved in a large number of transactions in the tMt sector. Ian has recently led strategic change and value accretion at redstone plc and accumuli plc. Ian is also an operational partner and is currently executive Deputy Chairman of Castleton technology plc.

tonY weaveR FoundeR

tony has significant experience of sales, operations and management in the tMt sector. he co-founded the advisory subgroup of MXC Capital with Ian smith. tony has founded and managed a number of successful private technology companies and tony has served on

the boards of a number of publically quoted companies, including Xploite plc and redstone plc. tony is also

an operational partner and until recently was a non- executive director of redcentric plc, having recently stepped down as Ceo, a role which he held since IPo.

maRtin cHapman

Martin was previously head of corporate banking in London for hsBC Bank plc. Martin provides MXC with a wealth of experience in debt advisory and structuring in support of working capital, leverage and acquisition finance. Martin also serves as a

non-executive director of Weston group plc, the erith group and fulham shore plc.

02 mxc capital ltd annual RepoRt for the year to 31 august 2016