Script for Annual General Meeting 11 July 2007

Transcription

1 Script for Annual General Meeting 11 July 2007 Slide 3i logo Slide Safety announcement PATRICK DUNNE Good morning ladies and gentlemen. My name is Patrick Dunne and I am the Group Communications Director at 3i. Before we start the meeting I have a very important piece of information to give to you and I would be grateful if you will please listen to the following emergency evacuation instructions from the Mountbatten Room located on the sixth floor of the conference centre. In the event of an emergency, a two tone fire alarm will commence. An announcement over the public address system will follow; it will ask you to listen for further instructions. Take a look now for your nearest fire escape sign. Should an evacuation become necessary, instructions will be given over the public address system. When told, you should leave the building quickly by the nearest exit. Walk, do not run, do not stop for belongings, do not use the lifts. Staff from our venue today have been briefed on the evacuation procedure for people with restricted sight, hearing or impaired mobility and, in the unlikely event that it will be necessary, will come to assist you. Your assembly point is the column across the road immediately opposite the QEII Conference Centre s main entrance. You must take care when crossing the road. Thank you for listening to this announcement.

2 It would also be tremendously helpful if you could please check that your mobile phones are all switched to silent or off and if you have a BlackBerry, or similar PDA device, please switch it off as it will interfere with the microphones. I would now like to hand over to our Chairman, Baroness Hogg. Slide - Annual General Meeting title slide Page 2

3 Slide - Baroness Hogg title slide CHAIRMAN Thank you Patrick. Good morning everyone and welcome to your annual general meeting! It is now 10.30am, and I am told we have a quorum, so I declare our meeting open. May I ask if you would agree to take the notice convening the meeting as read? Thank you. There s been a lot of discussion recently about the accountability and transparency of private equity, and so I thought I should start this meeting with a few words on 3i's approach. Slide - 3i accountability Our prime accountability is of course to you - our shareholders. There are about 28,000 of you - and these include institutions responsible for the pensions and savings of many of our fellow citizens. We also manage assets owned by investors in our external funds. So 3i's performance affects, directly or indirectly, the incomes of a very large number of people. Page 3

4 Slide Share price since flotation That's why we show this chart every year, of how our share price has developed since the Group became a quoted company in Slide - Annual report and accounts 2007 We consult regularly with our major shareholders, and have done so this year again on remuneration. And to communicate fully with all our shareholders, we constantly aim to improve the transparency of our business and information about its performance in our annual report. Slide 3i disclosure And so this year, for example: we have increased disclosure on our most significant investments; our key performance indicators; our approach to corporate social responsibility; the way in which carried interest works for 3i and its employees; and our approach to the evaluation of the Board. Further copies of the report are available outside the meeting, and of course on our comprehensive website, where you can find details of our 50 top investments and case studies on many more besides. Our annual report and website are, of course, public, and we see them as important parts of our responsibility to be open and transparent about our business to the world in which we live and work. Page 4

5 Slide Reporting to the wider world So we were delighted that the Financial Times should commend us for setting best practice and that we should receive an award for the best Corporate responsibility report in the FTSE 100. It was also pleasing that the quality of our annual report was recognised by the Chairman of the Treasury Select Committee of the House of Commons just a few weeks ago. Slide Global induction day However, it's also critically important that our values are shared internally. So I'd like to share with you this slide from our global induction day for new staff. We have always believed that it is important for 3i people to be proud of what they do, and sensitive to the environment that they operate in. Through our sixty years in business we have a strong record of engagement with a wide range of interested parties, from the entrepreneurs we back and their advisers to the major corporations we work with around the world, the governments whose approvals and encouragement we need to do business and the media in many countries. Slide Corporate responsibility Key to our approach to social responsibility, however, has been the development of two sets of guidelines, on our behaviour as a company, and as an investor, which you will find detailed in the Annual report. Page 5

6 Slide Corporate responsibility And we have been pioneers for many years in the development of such socially responsible parallel activities as Business in the Community, the Enterprise Education Trust and Bridges Community Ventures. Slide - 3i governance We also aim to achieve best practice in terms of governance. We are fully compliant with the Combined Code. And I was delighted to be invited by Sir David Walker to sit on the working group set up under the auspices of the British Venture Capital Association, which is helping him devise parallel guidelines for unquoted private equity. Sir David will shortly be publishing a consultative paper on these. We also, as you can see, have a strong Board, and as there are some recent and prospective changes I would like to take this opportunity to introduce the Board to you again. Slide The Board of Directors We start on your left with someone to whom I want to give particular thanks today. Slide Danny Rosenkranz And that is Danny Rosenkranz, the former Chief Executive of BOC, who retires from the Board today. I would like to pay a special tribute to Danny for his commitment to 3i through a period of substantial change. Page 6

7 Slide Fred Steingraber Next to Danny is Fred Steingraber. Fred, who was formerly chairman of A T Kearney Inc, has brought us a valuable perspective on business on both sides of the Atlantic. He is standing for re-election for the last time today, so this is my opportunity to thank him, too, for all he has done. Slide Robert Swannell We then have Robert Swannell who has joined the Board since the last AGM. Robert is Vice Chairman of Citigroup Europe, and also a nonexecutive director of British Land Company and is already making a big contribution to 3i. Slide Oliver Stocken We then have Oliver Stocken, who is Chairman of Home Retail and the Natural History Museum. Oliver gives me tremendous support as 3i s Deputy Chairman, Senior Independent Director and Chairman of the Audit and Compliance Committee. Slide Simon Ball Next to Oliver we have Simon Ball, our Finance Director, who you will be hearing from a little later and who I know will also be delighted to answer questions on the return of capital. Slide Philip Yea We then have our Chief Executive, Philip Yea, who has given three years of excellent leadership to 3i and will shortly be giving you his update. Page 7

8 Slide Tony Brierley Next comes Tony Brierley, our Company Secretary. I have finally, and very reluctantly, had to agree to Tony s desire to retire from his formidable load of responsibilities at 3i during the course of the year, so this will be his last AGM. It is impossible to overstate the contribution Tony has made, in supporting the Board; as General Counsel to 3i; and as Chairman of our Corporate Responsibility Committee. On behalf of 3i and its shareholders, Tony, may I simply say thank you. Slide Sir Robert Smith Next to Tony we have Sir Robert Smith, who will also be well known to many of you as Chairman of Scottish & Southern Energy and The Weir Group, and now chairs our Remuneration Committee. Slide Michael Queen Beside Robert is Michael Queen, who runs our fast-growing infrastructure business. Slide - Christine Morin-Postel and next to him, Christine Morin-Postel who, as well as being a nonexecutive Director at 3i, also sits on the board of Alcan and Royal Dutch Shell. Slide Willem Mesdag And finally, this morning we announced that Willem Mesdag will be joining the Board. Will is a former partner of Goldman Sachs and now Managing Partner of Red Mountain Capital Partners located on the West Coast of the United States. I am delighted that he has agreed to bring his wide Page 8

9 international financial experience to the Board of 3i. Slide Formal business for today So now, if I may, I will move on to the details of today s meeting. We have both an AGM, to deal with the regular business of the company, and then an EGM, to put before you matters relating to the proposed return of capital. I hope it won t be too much of a marathon and I can at least promise you some modest refreshments at the end of the proceedings. Slide Proposed return of capital A combination of a successful investment model and favourable markets has meant that the cash flow of the business has been very strong. Despite increasing investment last year by 42%, we ended the year with no gearing in our balance sheet. Whilst this is a very nice position to be in from a risk point of view, it does, however, mean that we can do more to maximise the returns to our shareholders in the longer term. The Board has decided that the right balance between capital efficiency and risk would be maintained by returning about 800m. We are proposing to use essentially the same method as last year, namely a bonus issue of listed B shares accompanied by a share consolidation. To provide further flexibility we will also be seeking shareholder approval for the renewal of the authority to make on market buyback purchases. Page 9

10 As I said at the time of our results: Slide This has been an exceptional year for 3i This has been an exceptional year for 3i. The Group has delivered a high return on shareholders funds and a strong cash flow and, most importantly of all, has taken steps to develop the business for the longer term. I would therefore now like to hand over to our Chief Executive, Philip Yea, to tell us more about how he and his team have brought these results about and give us an update on 3i s strategic progress and the outlook. He will be followed by Simon Ball, who will provide a brief financial review and a summary of the return of capital proposals. Following these short presentations, we will do our best to answer any questions you have on the results, the annual report and any of the AGM or EGM resolutions. Phil Slide - 3i logo Page 10

11 PHILIP YEA Slide Philip Yea title slide Slide Chief Executive s review Thank you Chairman and good morning everyone. What I would like to do over the next couple of minutes is to provide an update on the Group s progress, particularly in the area of strategy, and thereafter to comment on the current outlook. Slide Our purpose But, let me start by making a few points about private equity. After all, as we state very clearly in our annual report, our purpose is to provide quoted access to private equity returns. Slide Advantages of private equity Our company s strategy is built upon a core belief concerning the strength of the private equity model. These strengths start with the intensive due diligence we perform in selecting our investments. This makes us fully informed shareholders. The amount of due diligence and time we spend before we invest is substantial. And so as we enter an investment we have a clear view of what is trying to be delivered we call this the value creation plan. Page 11

12 Next, is the full alignment of interests between ourselves as investors and the directors and management of the company. We are able to be sure that the shareholders, the board and the management are all working towards the same objective. Our investment teams carried interest schemes are a critical piece of this alignment. Part of the discipline is in the value creation plan, and often the capital structure, in that there are very clear, time-bound milestones. And, lastly, our experience of both business and financing enables us to put in place efficient capital structures. Slide Sources of value creation, fully-realised buyouts To illustrate this in action, this slide, which we ve used recently to illustrate the Buyouts model, shows you the recent results of this approach. What we have done here is to take all 28 of the buyouts that 3i had fully realised since 2001 and looked at how much we have invested and realised and then worked out where the growth in value, a 2.7 times money multiple, has come from. As you can see, almost two-thirds of the value creation has come from growing the earnings of the company. The next biggest proportion comes from selling the company on a higher multiple of earnings. In part, this is due to favourable market conditions, but it is also due to the fact that people are prepared to pay much higher prices for businesses with strong market positions and growing earnings. Page 12

13 You can also see that just 10% comes from debt reduction. Slide An example - SR Technics Let s look at just one example in real life. SR Technics is an investment we sold during the last financial year, where we realised four and a half times our money in the process. A very good return. How did we achieve this? Well, SR Technics was a subsidiary of Swissair Group, which failed in SR Technics maintains and repairs aircraft and was very dependent upon one customer, Swissair itself. At that time it employed around 2,900 people. Our team, together with the management, developed a very exciting plan for the business. By the time we sold the company in 2006 it had broadened its customer base, most notably with low cost carriers. It had widened its geographic reach, especially in Asia and the Middle East, and was also able to offer a service to Boeing fleets as well as Airbus. It became a vibrant independent business which had achieved significant organic growth. With our support, it had the strength to acquire a key competitor and this, combined with organic growth, meant that it employed around 5,000 people when the company was sold in October Slide Growth Capital vintage returns Sometimes people look at private equity and claim the returns are predominantly from leverage. When they make that assertion, I point them to our Growth Capital business, which provides equity to high- Page 13

14 growth companies across the world, often because they cannot borrow and grow at the same time. As you can see, this business line delivers very good returns, mainly without financial engineering. I hope that you will have seen from these statistics and also from the example of SR Technics, that our role is much more about growing companies than financial engineering. Slide Our vision Turning to our progress over the last period. I d like to start by reminding you of our vision for the company which is unchanged. Which is to become the private equity firm of choice; Operating on a world-wide scale; Producing consistent market-beating returns; Acknowledged for our partnership style; and winning through our unparalleled resources. Slide Strategy This is the strategy which we are pursuing to achieve this vision. It is to: Invest in high-return assets; Grow our own assets as well as those we manage on behalf of third parties; Page 14

15 Extend our international reach, directly through our own teams and also through investing in funds; Use our balance sheet, and human resources to develop both existing and new business lines; and Continue to build our strong culture of operating as one company across business lines, geographies and sectors. So how are we doing? Slide Strategic delivery - 3 year record As you can see from this next slide, we are making good progress. Our average gross portfolio return over the last three years has been 25%. Our 1.6bn of investment for 2007 was a significant increase on the recent past. 59% of our assets are now outside the UK and our investment in Asia, which trebled last year, now represents 9%, double that in We have successfully launched two new business lines, both of which are now public companies in their own right, 3i Infrastructure Limited, which at 700m is now Europe s largest publicly quoted infrastructure fund and, just a couple of weeks ago, we launched 3i Quoted Private Equity Limited, a 400m quoted fund to deliver private equity type returns from investing in smaller quoted companies. Page 15

16 Underpinning all of this is our highly committed and motivated workforce. I m pleased that our latest staff survey showed exceptionally high levels of engagement at 3i. Slide Investment You can see how strong this growth in investment has been from this next slide and also how our different business lines are contributing to this. Our Growth Capital business, shown in mustard colour, a business 3i has been in for over sixty years and which is again our biggest business line by assets, grew its investment by 18% last year with a strong contribution from Asia. This business line has also recently completed its first investment in the US, another key milestone. You can also see from this slide the very important contribution our new Infrastructure business line is making. Slide Shareholder returns And we believe that this strategy is delivering good returns to our shareholders. Over the last three years net asset value has grown by 71% before dividends and dilution. Our total shareholder return has been 27% pa. And, in addition, excluding the return of cash to be considered at today s EGM, we have returned just over 40% of our market capitalisation of three years ago. Slide Interim management statement 11 July 2007 Let me close by commenting on progress since the year end. In line with the new European Union transparency directive and FSA Page 16

17 requirements, 3i is today making its first interim management statement. From the statement, which is available on our investor relations website 3igroup.com, you will see that we have made a positive start to the year. Investment in the first three months of the year totalled 591m. Realisations were 605m. Returns for the quarter represent a positive start towards achieving our return objectives for the year. We have also confirmed the successful flotation of 3i Quoted Private Equity Limited which I referred to just now and commented on today s return of capital proposals. As to outlook, at this stage we have no reason to change from what I told you in the Annual report. In particular, we believe that there continue to be good opportunities in our chosen areas. Pricing does remain high, and so we continue to be highly selective, and focus on delivering value, asset by asset. We have been broadening our investment activities and, this will contribute to growth of the Group, not just in the current year but in the years ahead. And so we look forward to reporting further progress in the delivery of our strategy. I would now like to ask Simon Ball to take us through the highlights of last year s results and the mechanics of the return of capital proposals. Page 17

18 SIMON BALL Slide Simon Ball Finance Director Thanks Phil and a very good morning everyone. I d like to take the next few minutes to recap briefly for you some of the highlights of our results for the year to 31 March 2007, and then to say a few words regarding our proposed return of capital. Slide Results for year to 31 March 2007 Let s start with the year to March With a total bottom line return of over 1bn, representing a return on opening shareholders funds of 26.8% for the year, it was pleasing that even the more demanding 3i commentators recognised these as a strong set of annual results. And with investment up by 42% to around 1.6 billion, realisations of 2.4 billion achieved at a 52% uplift to opening value, and growth in assets under management of 25%, it was a very busy year as well as a profitable one. All these factors contributed to a 26% increase in NAV per ordinary share to 932p at the year end, and as I am sure you will have noted, the Board is proposing a final dividend of 10.3p per ordinary share, giving a full year dividend of 16.1p, up 5.9% on the previous year. Slide Financial performance - total return analysis This slide shows you how that total bottom line return of 26.8% was achieved, and you can see if you look at the first line on the slide that it was the Gross Portfolio Return of 34.0%, well clear of our across-the- Page 18

19 cycle target, which we ve now exceeded in both of the last 2 years, which was the real driver of the year s result. Slide Financial performance - gross portfolio return and this Gross Portfolio Return of 34% is the result of strong performances across all three of our main return categories. The most striking of these were realised profits, being the capital profits we make on investments sold during the year, which grew by 44% last year to 830mn. With realisation proceeds from investment sales in excess of 2.4bn, including the sale, or partial sales of 4 of our 10 highest valued assets coming into the year, this realised profit represents an uplift on the opening value of those assets sold of some 52%, which is right at the top end of our historic range. And unrealised profits of 323mn were also noticeably stronger, with a large contribution here coming from value uplifts we book in anticipation of imminent sales, soon after the year end. And you ll be pleased to know that those value uplifts have now largely crystallised as completed sales. Slide Financial performance - total return analysis Coming back to the return analysis, let s look at some other areas worth noting There has been a 54% increase in fees earned from external funds in the year, largely reflecting income arising on our latest mid market Page 19

20 Buyout fund, Eurofund V, which we raised in the Summer of At 5bn this is the largest such fund 3i has raised and even though it was only in place for part of the financial year it contributed over half of our total Group fund fee income in the period. You will also see that net carried interest returned to its more conventional payable status in the year, reflecting its direct alignment with our strong portfolio performance. And operating expenses increased as we developed our two new business lines, expanded our activities in Asia and the US and increased the level of performance related bonus payments to our staff in line with the strong returns to shareholders. These features, together with the very strong investment performance we looked at earlier, were the key factors that enabled us to report a 26.8% return on opening equity, and that you ll recall was after starting the year with virtually no balance sheet gearing. Slide 5 year view - investment and realisation proceeds But as I said earlier, it wasn t just a profitable year, it was also a very busy one right across the portfolio. This slide sets out the investment figures Phil referred to earlier, in red, and our realisation proceeds, in blue over the past 5 years. And as you can see, 2007 represented a recent record year in both respects. But the other clear message here is that despite the increase in investment, the continuing very strong realisations from the sale of previous investments means that we again generated considerably more cash from the portfolio than we deployed last year. Page 20

21 Slide Balance sheet So, largely as a consequence of this strong portfolio exit activity, the balance sheet as summarised on this slide shows that once again, we had little or no borrowings at year end. And it was in anticipation of this situation, that we announced our intention to propose to you a further return of capital as part of our year announcement and it s that proposal which we ll be inviting you to support today. Slide Proposed return of capital key facts So let s now turn to the proposal. As I told you last year, our target across the cycle gearing for the Group is in the range of 30%-40%, reflecting what we the Board consider an appropriate level of leverage in the Group to enhance your shareholder returns. As at March 2007, notwithstanding the capital return you approved last year, as you ve just seen we had 0% gearing reflecting just how strong our net realisations have been. So to bring our gearing closer to that target range, we are now proposing to return a further 807m to you by way of a bonus issue of B shares, accompanying purchase offers and a further share consolidation. All in all, a very similar structure to the proposals you approved last year, and which you will be considering again at the EGM today. Slide Proposed return of capital key dates Full details of the B share issue, expected offers and share consolidation, were set out in the circular you should have received from the Chairman last month, but let me remind you of some of the key dates and events relating to the proposal. Page 21

22 Subject to your approval today, the record date for entitlement to new B shares will be 6pm on 13 July, that s this coming Friday. And at 4.30pm that same day is the time by which the registrars need to have received your completed form of election in respect of the initial purchase offer, which by the way you can submit to the registrars representatives here today if you wish. We would then expect dealings in the new B shares and the consolidated ordinary shares to commence on 16 July (that s next Monday). Those B shares for which you elect to accept the brokers offer, being the offer we would expect to be treated as capital for UK tax purposes, should be settled with cheques sent out on or around 26 July. If you elect to retain your new B shares, you will be sent a second form of election around the end of July, which you will need to return if you want to accept the Company offer, being the offer we would expect to be treated as income for UK tax purposes. You should then receive proceeds of any sale under that offer shortly after 29 August. For those of you who have detailed questions regarding the mechanics of these processes, there is a telephone helpline which you can call, details of which are included in the Chairman s circular. Or, if you d prefer, there are helpdesks here today manned by some of our legal and technical teams and they ll do their very best to answer any further questions you may have and can provide you with additional copies of the Chairman s circular if you require. Page 22

23 Ladies and gentlemen, thank you for your attention and I d now like to hand you back to the Chairman for the remainder of our business. Thank you. Slide 3i logo Page 23

24 CHAIRMAN Thank you, Simon, and thank you, Phil. Before asking for questions, I should ask Roger Perkin from our auditors, Ernst & Young, to read a summary of the Auditors Report. Roger. Slide Roger Perkin, Ernst & Young ROGER PERKIN Thank you Chairman. Ladies and gentlemen Ernst & Young LLP s report on the Group annual accounts, which is dated 9 May 2007, is set out on page 73 of the annual report. Our report sets out our responsibilities, as independent auditors, which are established in the United Kingdom by statute, the Auditing Practices Board, the Listing Rules of the Financial Services Authority, and by our profession s ethical guidance. Our report includes confirmation that we conducted our audit in accordance with International Standards on Auditing (UK and Ireland). We planned and performed our audit so as to obtain all the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are Page 24

25 free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion, we also evaluated the overall adequacy of the presentation of information. Our report concludes that in our opinion: The Group financial statements have been properly prepared in accordance with the Companies Act 1985 and Article 4 of the IAS Regulation, - the Group financial statements give a true and fair view of the Group s state of affairs as at the balance sheet date and of the profit of the Group for the accounting period then ended; and - the information given in the directors report is consistent with the financial statements. Page 25

26 Slide The Resolutions CHAIRMAN Thank you Roger. Now, perhaps I should explain a few points of procedure. At today s meeting we shall, as last year, be voting on all our resolutions on a poll. This is now seen as best practice as it gives all shareholders the same opportunity to participate in company decisions and have their votes recorded. I will go through the exact mechanics of the poll before we start the voting. We have 15 AGM resolutions today. These relate to regular annual business, the accounts, the remuneration report, the proposed final dividend, the reappointment of directors and auditors, and so forth. Each of the resolutions in turn will be shown on the screen behind me, together, as usual, with the breakdown of the proxy votes we have received. Slide Resolutions commentary Perhaps you might find some more explanation useful on a few of the resolutions. We have yet again a couple of resolutions relating to political expenditure. I can assure you that we have no intention of making donations to either political parties or political campaigns but, like many Page 26

27 other companies, we have been legally advised that we should have such a resolution because the legislation is so loosely written that it might capture, for example, the attendance of a 3i employee at a parish council meeting. Then there are two resolutions with respect to the Company s authority to purchase its own shares; the first relates to the ordinary shares and is subject to a limit of 10% of its share capital. This resolution is intended to provide the flexibility to continue to enhance shareholder returns during the year. The second resolution relates to the authority to purchase B shares and will, as set out in the EGM Notice last year, enable the Company to make a Further Purchase Offer this July for the remaining B shares issued as part of last year s return of capital. Turning to the EGM, at that we have only one resolution, authorising the various steps necessary to our return of capital, which Simon described earlier. Slide - Questions As last year, when some of you will remember, we also had an AGM and an EGM on the same morning, I am happy to take questions on anything to do with either set of resolutions at this stage. Please feel free to ask questions on any of these, or on Phil and Simon s presentations. We will, of course, consider all questions carefully, so if we cannot answer them fully today, I promise you we will come back to you as soon as possible. Page 27

28 If you have specific questions about the B share issue you may already have seen there is an enquiry desk in the refreshment area. It will be staffed again after the meeting too. So, if you have detailed questions on how the return of capital operates, the people at that desk will be able to help you. However, if you wish to ask a question now, would you be kind enough to hold up your blue card, wait for a microphone and then give your name or the name of the company you represent before asking your question? Are there any questions? If there are no more questions, I will turn to the mechanics of the poll. Slide Two poll cards Everyone should have the two poll cards on this slide; the poll card for the AGM, which is on the reverse of your AGM admission card, and the poll card for the EGM, which is on the reverse side of your EGM admission card. If you have lost one of your poll cards since arriving, please just raise your hand and one of our stewards will provide you with new ones. On the poll cards, you will see that you have three options for each resolution to vote for the resolution, against it, or to abstain. Once the meetings are over, and you have completed your poll cards, please remember to sign them and then put them in one of the ballot boxes at the back of the room. There s no rush: the poll will be open for Page 28

29 a further 30 minutes after both of today s meetings end. Should you require any further help, our Company Secretary, Tony Brierley, will be on hand at the end of the meeting, as will the registrars. The total vote, both proxies and by those here today, will be published on our website by tomorrow morning. If you have already lodged proxy forms you do not, of course, need to complete poll cards unless you wish to change your vote. So now, if I may, I will put to the meeting each of the resolutions as set out in the Notice of the meeting. Slide Resolution 1 Resolution one relates to the accounts and is shown on the screen behind me. The next resolution on your poll card, Slide Resolution 2 Resolution two, relates to the approval of the Directors remuneration report. Resolution three Page 29

30 Slide Resolution 3 authorises the declaration of a final dividend. Resolutions four to seven authorise reappointment of Directors who are due to retire by rotation under 3i s Articles of Association. Resolution four Slide Resolution 4 relates to the reappointment of Robert Swannell as a Director of the Company. Slide Resolution 5 We now come to a resolution five concerning my reappointment. I will therefore hand over to Oliver Stocken, the Deputy Chairman. OLIVER STOCKEN Thank you, Chairman. I would like to put to the meeting resolution 5 which relates to the reappointment of Baroness Hogg as a Director of the Company. CHAIRMAN Thank you. Resolution six Page 30

31 Slide Resolution 6 relates to the reappointment of Fred Steingraber as a Director of the Company. Resolution seven. Slide Resolution 7 relates to the reappointment of Phil Yea as a Director of the Company. Resolution eight Slide Resolution 8 concerns the appointment of the Auditors. Ernst & Young LLP have indicated their willingness to be reappointed as Auditors of the Company, and we propose their reappointment. Resolution nine Slide Resolution 9 concerns the remuneration of the Auditors. The next two resolutions are to renew the respective authorities of 3i Group plc and 3i plc to incur political expenditure. As I stressed earlier, this is simply to protect the Company from inadvertently infringing the law. Resolution ten Page 31

32 Slide Resolution 10 provides authorisation, or should I say protection, for 3i Group plc. Resolution eleven Slide Resolution 11 provides the same for 3i plc. Resolution twelve Slide Resolution 12 is an Ordinary Resolution to renew the Board s authority to allot unissued shares of the Company. The last three resolutions are Special Resolutions. Resolution thirteen Slide - Resolution 13. is a Special Resolution in relation to the pre-emption rights. Resolution fourteen Slide Resolution 14 is a Special Resolution to authorise the Company to purchase its own ordinary shares up to a limit of ten per cent. Page 32

33 Resolution fifteen Slide Resolution 15 is a Special Resolution to authorise the Company to purchase its own B shares. Slide - 3i logo That concludes the AGM resolutions. We will now close the AGM, so that we can move on to the EGM business. Slide Commencement of Extraordinary General Meeting I see that we still have a quorum present, so I declare the EGM open. May I ask the Members present if they would agree to take the Notice of EGM as read? Thank you. Slide Special Resolution At this meeting we have only the Special Resolution detailed in the Notice of EGM, authorising the various steps necessary for the return of capital. We have discussed this in some detail already today, but if you have any more questions, please feel free to ask them now. Does anyone have anything they would like to ask? Page 33

34 If there are no further questions, we will move on. You should all have a different poll card for this meeting, which is on the back of your admittance card for the EGM. Does everybody have that? The resolution is before you. Would you please all mark your EGM poll cards in respect of this resolution. That concludes the formal business of the EGM and the meeting is now closed. Just a few final points. First, to thank Phil and everyone at 3i for delivering such good results for shareholders this year. Secondly, to thank shareholders for coming today and taking part in the meeting. We greatly value your participation and the use of the poll method is designed to ensure it doesn t go unrecorded! Thirdly, just to remind any of you with any problems with your poll cards that the polls are still open for another 30 minutes, and I am leaving Tony Brierley, our Company Secretary, behind to deal with any queries. Finally, when you can release him, and yourselves, you will find some modest refreshments in the room where you had coffee, and I look forward to seeing you there. Thank you again for coming. Slide 3i logo Page 34

35 TONY BRIERLEY Thank you Chairman. As the Chairman has explained, you should be holding two poll cards. Shareholders who have already lodged proxy forms appointing the Chairman as their proxy will not need to complete poll cards unless they wish to change their vote. Taking the AGM poll card first, which is this smaller card, you need to mark your card for the 15 AGM resolutions. Place a cross in the for or against boxes of resolutions to indicate how you wish to vote. Alternatively, if you wish to abstain from voting for any resolution, place a cross in the Abstain box. Then sign the poll card and next we will deal with the EGM resolution. Mark your EGM poll card in the same way, for the EGM resolution. This is the long thin card. Place a cross in the for or against boxes to indicate how you wish to vote. Alternatively, if you wish to abstain from voting for any resolution, place a cross in the Abstain box. Please then sign the EGM poll card and then place both cards in either of the ballot boxes at the back of the room. You may leave when you have voted. The poll will remain open for 30 minutes. The Registrars have been appointed to conduct the count. The results of the polls will be released to the London Stock Exchange later today or tomorrow morning, and they will also be published on the Company s website. Page 35

36 If anyone has any questions on the poll procedure, please ask one of the stewards who are standing at the back of the room now. If you have lost your poll cards, please speak to one of the registrar representatives straight after the meeting, who will also be standing at the back of the room. Thank you. Page 36