Canadian Science and Technology Growth Fund Inc.

Canadian Science and Technology Growth Fund Inc.

July 26, 2005 12:19 ET

Canadian Science and Technology Growth Fund Announces Changes to Fund Policies; Fund Sales Resume

TORONTO, ONTARIO--(CCNMatthews - July 26, 2005) - Canadian Science and Technology Growth Fund ("CSTGF" or the "Fund") announced today that it has revised its valuation policies to conform with the recommended valuation guidelines published by Canada's Venture Capital & Private Equity Association ("CVCA").

CSTGF's previous valuation policies and procedures were generally similar to the CVCA guidelines so the change in valuation policies did not result in a change in the price of the Fund's Class A shares.

Also, the Fund's Board has approved an amendment to CSTGF's investment approval process, which gives the CEO and CFO of the Fund the authority to approve follow-on investments of up to $1 million. All initial investments and follow-on investments greater than $1 million will remain subject to approval by the Investment Committee of the Board.

The Board also approved the adoption of a cash management policy that favours the preservation of cash for funding follow-on investments, redemptions and ongoing operating expenses over making venture investments in new portfolio companies. This policy may be revisited from time to time.

Under the recently introduced National Instrument 81-106, Investment Fund Continuous Disclosure, the Fund was required by July 1, 2005 to have guidelines in place governing how shares in all portfolio companies are voted, and to begin maintaining a proxy voting record regarding public portfolio companies. The Board approved the adoption of proxy voting guidelines whereby CSTGF will vote the proxies associated with the Fund's investments in a manner which it believes to be in the best interests of the Fund.

Particulars of the proxy voting guidelines will be disclosed in the Fund's prospectus amendment to be filed July 26, 2005 and a full copy of the proxy voting guidelines is available from the Fund on request.

As previously announced, the Fund went off-sale on March 11, 2005 to deal with interim operational changes relating to the change of control of its Manager, Fullarton Capital Corporation. With these changes now largely completed, sales of the Fund's Class A shares will resume on or about August 3, 2005.

Before sales resume, the Fund will take a write-down of approximately 13.6% of its net asset value. The write-down is due to internal developments affecting certain of the Fund's private venture portfolio companies. At the request of the Fund's valuation committee, the valuation group of the Fund's auditors today confirmed that the values for the Fund's portfolio of private companies have been determined in accordance with the Fund's valuation policies. None of the adjustments were related to the change in control of the Fund's Manager or to changes to the Fund's valuation policies.

Contact Information

  • Fullarton Capital
    Tracey Morrison
    (604) 862-6098