Prospectus • Sep 3, 2020
Prospectus
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Offer for Subscription for up to £20 million of B Ordinary Shares with an over‑allotment facility for up to a further £20 million of B Ordinary Shares
This document, which comprises a prospectus relating to Pembroke VCT plc (the "Company") dated 3 September 2020, has been prepared in accordance with the Prospectus Regulation Rules Instrument 2019 made under Part VI of the FSMA, and has been approved for publication by the Financial Conduct Authority as a prospectus under article 20 of the Prospectus Regulation.
The Company and the Directors, whose names appear on page 21 of this document, accept responsibility for the information contained herein. To the best of the knowledge of the Company and the Directors the information contained in this Prospectus is in accordance with the facts and the Prospectus makes no omission likely to affect its import. To the extent information has been sourced from a third party, this information has been accurately reproduced and, as far as the Company is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. In connection with this document, no person is authorised to give any information or make any representation other than as contained in this document.
Subject to the FSMA, the Prospectus Regulation Rules and applicable laws, the delivery of this document shall not, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this document or that the information in this document is correct as at any time after this date.
The Prospectus has been approved by the Financial Conduct Authority, as competent authority under Regulation (EU) 2017/1129. The FCA only approves the Prospectus as meeting the standards of completeness, comprehensibility and consistency imposed by Regulation (EU) 2017/1129. Such approval shall not be considered as an endorsement of the Company or the quality of the B Ordinary Shares that are the subject of this Prospectus. Investors should make their own assessment as to the suitability of investing in the B Ordinary Shares. The Prospectus has been drawn up as part of a simplified prospectus in accordance with Article 14 of Regulation (EU) 2017/1129.
Persons receiving this document should note that Howard Kennedy Corporate Services LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as sponsor for the Company and no one else and will not, subject to the responsibilities and liabilities imposed by the FSMA or the regulatory regime established thereunder, be responsible to any other person for providing the protections afforded to customers of Howard Kennedy Corporate Services LLP or providing advice in connection with any matters referred to herein.
(incorporated in England and Wales with registered number 08307631)
Prospectus relating to an offer for subscription for up to £20 million of B Ordinary Shares in the capital of Pembroke VCT plc payable in full on application with an over‑allotment facility for up to a further £20 million of B Ordinary Shares
Sponsor Howard Kennedy Corporate Services LLP
Promoter and Investment Manager Pembroke Investment Managers LLP
The B Ordinary Shares in issue at the date of this document are listed on the premium segment of the Official List of the FCA and traded on the London Stock Exchange's main market for listed securities. Application will be made to the FCA for all of the Shares to be issued pursuant to the Offer to be listed on the premium segment of the Official List and application will be made to the London Stock Exchange for those Shares to be admitted to trading on its main market for listed securities. It is expected that the Admission of such Shares will become effective, and that trading in those Shares will commence, within ten Business Days of their allotment.
The contents of this document and the information incorporated herein by reference should not be construed as legal, business or tax advice. Neither the Company nor any of its Directors or representatives are making any representation to any offeree or purchaser or acquirer of B Ordinary Shares under the Offer regarding the legality of an investment in such B Ordinary Shares by such offeree or purchaser or acquirer under the laws applicable to such offeree or purchaser or acquirer.
Your attention is drawn to the risk factors set out on pages 11 to 13 of this document. Prospective Investors should read the whole text of this document and should be aware that an investment in the Company involves a high degree of risk and should make the decision to invest only after careful consideration and, if appropriate, consultation with an independent financial adviser. All statements regarding the Company's business, financial position and prospects should be viewed in light of such risk factors.
This Prospectus does not constitute an offer of, or the solicitation of an offer to subscribe for or buy, any new Shares to any person in any jurisdiction to whom it is unlawful to make such an offer or solicitation in such jurisdiction. The Offer is not being made, directly or indirectly, in or into the United States, Canada, Australia, New Zealand, Japan, the Republic of South Africa or their respective territories or possessions or in any other jurisdiction where to do so would be unlawful, and documents should not be distributed, forwarded or transmitted in or into such territories. The new Shares have not been and will not be registered under the United States Securities Act of 1933 (as amended) and may not be offered, sold or delivered, directly or indirectly, in or into the United States, Canada, Australia, New Zealand, Japan, the Republic of South Africa or in any other jurisdiction where to do so would be unlawful.
Up to £20 million of B Ordinary Shares in the Company with an over‑allotment facility of up to a further £20 million of B Ordinary Shares, which are being offered to the public, are being made available in two different tax years (2020/2021 and 2021/2022).
The Offer will open on 3 September 2020 and may close at any time thereafter but, in any event, not later than 3.00 p.m. on Thursday 1 April 2021, in the case of the 2020/2021 offer, and at 3.00 p.m. on 30 June 2021, in the case of the 2021/2022 offer (unless, in either case, the Offer has been fully subscribed by an earlier date). The closing date of the Offer, and the deadline for receipt of applications for the final allotment with respect to the 2021/2022 offer, may be extended by the Directors at their absolute discretion to a date no later than 2 September 2021. All subscription monies will be payable in full in cash on application.
The terms and conditions of the Offer are set out on pages 72 to 74 of this document and are followed by an Application Form for use in connection with the Offer. The Offer is not underwritten.
Copies of this document may be viewed on the National Storage Mechanism (NSM) of the FCA at: https://data.fca.org.uk/#/nsm/ nationalstoragemechanism and at http://www.pembrokevct.com/investors and following the date of publication may be obtained free of charge for the duration of the Offer by collection from:
3 Cadogan Gate London SW1X 0AS
| Intro | Summary Risk Factors Forward‑looking Statements Expected Timetable for the Offer Offer Statistics Information Relating to the Company Chairman's Letter |
6 11 13 13 14 14 15 |
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| Part 1 | Overview Investment Activity and Performance Management Team Board of Directors Investment Policy Other Information Investment Review Case Study The Manager, Management Arrangements and Costs Costs of the Offer and Offer Price |
16 18 20 21 22 24 25 42 44 46 |
| Part 2 | Taxation Considerations for Investors | 48 |
| Part 3 | Taxation of the Company | 50 |
| Part 4 | Additional Information | 52 |
| Part 5 | Definitions | 68 |
| Part 6 | Terms and Conditions of Application | 72 |
| Part 7 | Terms and Conditions of the Dividend Investment Scheme | 75 |
| Part 8 | Frequently Asked Questions | 78 |
| Part 9 | Notes on the Application Form | 79 |
| Part 10 | Application Form | 81 |
| Name and ISIN of Securities |
B Ordinary shares of 1 pence each (ISIN: GB00BQVC9S79) ("B Ordinary Shares"). | ||
|---|---|---|---|
| Identity and Contact Details of Issuer |
Pembroke VCT plc (the "Company") was incorporated and registered in England and Wales on 26 November 2012 with registered number 08307631, and its registered address is 3 Cadogan Gate, London SW1X 0AS (LEI: 213800RLWAGHVUX8HR40). The Company can be contacted at [email protected] or 020 7766 6900. |
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| Competent Authority approving the Prospectus |
The Financial Conduct Authority ("FCA"), 12 Endeavour Square, London EC20 1JN, telephone 020 7066 1000. |
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| Date of Approval of the Prospectus |
3 September 2020 | ||
| Warnings | (a) This summary should be read as an introduction to the Prospectus. |
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| (b) Any decision to invest in the securities should be based on a consideration of the Prospectus as a whole by the investor. |
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| (c) An investor could lose all or part of their invested capital. |
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| (d) Where a claim relating to the information contained in the Prospectus is brought before a court, the plaintiff investor might, under national law, have to bear the costs of translating the Prospectus before the legal proceedings are initiated. |
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| (e) Civil liability attaches only to those persons who have tabled this summary including any translation thereof, but only where this summary is misleading, inaccurate or inconsistent, when read together with the other parts of the Prospectus, or where it does not provide, when read together with the other parts of the Prospectus, key information in order to aid Investors when considering whether to invest in the B Ordinary Shares. |
| Who is the Issuer of the Securities? | ||
|---|---|---|
| Domicile and legal form | The Company is domiciled in England and was incorporated and registered in England and Wales on 26 November 2012 as a public company limited by shares under the Companies Act 2006 ("CA 2006") with registered number 08307631 (LEI: 213800RLWAGHVUX8HR40). The principal legislation under which the Company operates is the CA 2006 and the regulations made thereunder. |
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| Principal Activities | The Company is a generalist venture capital trust (formed as a closed‑ended investment company) focused on early stage investments in a diversified portfolio of smaller, unquoted companies currently concentrating in the following six sectors: Wellness; Food, Beverage & Hospitality; Education; Design; Media; and Digital Services. |
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| Major Shareholders | As at 2 September 2020, Roy Nominees Limited held 4,286,085 B Ordinary Shares and UBS Private Banking Nominees Limited held 11,891,002 B Ordinary Shares being approximately 4.3% and 11.9% respectively of the issued share capital of the Company. As at the date of this document, there are no persons who directly or indirectly, jointly or severally, exercise control over the Company. |
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| Directors | The Directors of the Company (all of whom are non‑executive) are: Jonathan Simon Djanogly (Chairman); Laurence Charles Neil Blackall; and David John Till. |
| Statutory Auditors | The statutory auditor of the Company is BDO LLP, 55 Baker Street, London W1U 7EU. | |
|---|---|---|
| What is the key financial information regarding the issuer? |
Year ended 31.03.20 (audited) |
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| Profit/(loss) on ordinary activities before taxation (£000) | (3,868) | |
| Total income/(loss) before operating expenses (£000) | (1,473) | |
| Performance fee (accrued/paid)(£000) | Nil | |
| Investment Management Fee (accrued/paid) (£000) | 1,786 | |
| Any other material paid to service providers (£000) | Nil | |
| Net assets (£000) – Ordinary Shares | 20,756 | |
| Net asset value ("NAV") per Share (pence) – Ordinary Share | 114.67 | |
| Number of issued Ordinary Shares | 18,099,948 | |
| Total Return per Share (pence) – Ordinary Shares | 136.40 | |
| Earnings per Share (pence) – Ordinary Shares | (20.60) | |
| Net assets (£000) – B Ordinary Shares | 85,706 | |
| NAV per share (pence) – B Ordinary Share | 110.29 | |
| Number of issued B Ordinary Shares | 77,708,178 | |
| Total Return per Share (pence) – B Ordinary Shares | 122.53 | |
| Earnings per Share (pence) – B Ordinary Shares | (0.24) | |
| Total number of issued shares | 95,808,126 | |
| Total NAV (£000) | 106,462 | |
| What are the key risks that are specific to the issuer? |
Set out below is a summary of the most material risk factors specific to the issuer • The market for stock in smaller companies is often less liquid than that for stock in larger companies, bringing with it potential difficulties in acquiring, valuing and disposing of such stock. There may also be constraints imposed on the realisation of investments to maintain the venture capital trust ("VCT") tax status of the Company. • Investments in smaller unquoted companies (usually with limited trading records which require venture capital) carry substantially higher risks than would investments in larger or longer‑established businesses. • The spread of coronavirus (COVID‑19) was declared a global pandemic by the World Health Organisation on 11 March 2020 and is likely to have a significant impact on the UK and global economy, affecting workers and businesses of all sizes. Despite the UK government fiscal measures and additional tax benefits to support small businesses, the Company's portfolio businesses may be adversely impacted by the pandemic. • The Company may be unable to maintain its VCT status, which could result in Shareholders losing the tax reliefs available for VCT shares and the Company losing its exemption from corporation tax on capital gains. • The Company's portfolio of non‑VCT qualifying investments (e.g. money market funds) are subject to market fluctuations. Such investments are affected by the selection of funds and managers by the Pembroke Investment Managers LLP (the "Manager"), the Company's investment manager, and by investment decisions of such portfolio managers, and there can be no assurance that appreciation will occur or that losses will not be incurred. |
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| What are the main features of the securities? | ||
|---|---|---|
| Type, class and ISIN of securities |
The Company will issue new B Ordinary shares of 1 pence each under the Offer. The ISIN of the B Ordinary Shares is GB00BQVC9S79. |
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| Currency, par value and number to be issued |
The currency of the B Ordinary Shares is sterling, having a par value of 1 pence each and pursuant to the Offer the Company will issue up to £20 million of B Ordinary Shares with an over‑allotment facility for up to a further £20 million of B Ordinary Shares. |
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| Rights attaching to the securities |
As regards income: The shareholders of the Company ("Shareholders") shall be entitled to receive such dividends as the directors of the Company (the "Directors") resolve to pay out in accordance with the Company's articles of association pro rata according to the number of B Ordinary Shares held. As regards capital: On a return of capital on a winding‑up or on a return of capital (other than on a purchase by the Company of its B Ordinary Shares), the surplus capital shall be divided amongst the holders of B Ordinary Shares pro rata according to the number of B Ordinary Shares held. As regards voting and general meetings: Subject to disenfranchisement in the event of non‑compliance with a statutory notice requiring disclosure as to beneficial ownership, each Shareholder, present in person or by proxy, on a poll has one vote for each B Ordinary Share of which they are the holder. As regards redemption: None of the B Ordinary Shares are redeemable. |
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| Seniority of securities | The B Ordinary Shares that are the subject of the Offer shall rank equally with the existing Shares in the event of an insolvency of the issuer. |
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| Restrictions on the free transferability of the securities |
There are no restrictions on the free transferability of the B Ordinary Shares. | |
| Dividend policy | The B Ordinary Shares will target an annual dividend of 3 pence per B Ordinary Share, and special dividends may also be paid where significant realisations occur from the sale of portfolio assets. No forecast or projection should be implied or inferred. |
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| Where will the securities be traded? |
Applications will be made to the FCA for the B Ordinary Shares issued pursuant to the Offer to be admitted to the premium segment of the Official List and to the London Stock Exchange to be admitted to trading on the London Stock Exchange's main market for listed securities. It is expected that each such admission will become effective, and that dealings in those B Ordinary Shares will commence, within ten business days of their allotment. |
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| What are the key risks that are specific to the securities? |
Set out below is a summary of the most material risk factors specific to the securities • The market price of a B Ordinary Share may not fully reflect its underlying net asset value. The value of B Ordinary Shares depends on the performance of the Company's underlying assets. It can take a number of years for the underlying value or quality of the businesses of smaller companies, such as those in which the Company invests, to be fully reflected in their market values and their market values are often also materially affected by general market sentiment, which can be negative for prolonged periods. • Although the B Ordinary Shares are listed on the FCA's Official List and admitted to trading on the London Stock Exchange, shares in VCTs are inherently illiquid, which may, therefore, adversely affect the market price of the B Ordinary Shares and the ability to sell them. • If an investor disposes of his or her B Ordinary Shares within five years of issue, the 30% income tax relief obtained will have to be repaid. Following a loss of VCT status, an investor will be taxed on dividends paid by the Company, and in addition, a liability to capital gains tax may arise on any subsequent disposal of B Ordinary Shares. • Levels and bases of, and reliefs from, taxation are subject to change, which could be retrospective. |
| Under which conditions | Amount of the Offer |
|---|---|
| and timetable can I invest in this security? |
Up to £20 million of B Ordinary Shares are being made available at the Offer Price under the Offer, with an over‑allotment facility for up to a further £20 million of B Ordinary Shares. The B Ordinary Shares are payable by an applicant in full upon application. |
| Pricing of the Offer | |
| A fee for promoting the Offer (the "Promoter Fee") is payable to the Manager and is calculated on the value of each application for B Ordinary Shares under the Offer accepted by the Company as follows: |
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| (i) 5.5% for investors under the Offer ("Investors") who have invested directly into the Company or invested through an intermediary/platform and have not received advice; |
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| (ii) 3.0% for Investors who have invested in the Offer through an intermediary and have received upfront advice including Investors who are investing through intermediaries using financial platforms, |
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| or such lower percentage in each case as may be agreed by the Directors and the Manager. | |
| The number of B Ordinary Shares to be issued to each applicant will be calculated based on the following pricing formula (the "Pricing Formula") (rounded down to the nearest whole B Ordinary Share): |
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| Number of B Ordinary Shares = (Amount subscribed less Promoter Fee and any adviser charge) divided by latest published net asset value per B Ordinary Share. |
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| The Offer is conditional on resolutions 1 and 2 to be proposed at the general meeting of the Company to be held on 30 September 2020 (or any adjournment thereof) being passed. |
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| The Offer will open on 3 September 2020 and may close at any time thereafter, but, in any event, not later than 3.00 p.m. on 1 April 2021, in the case of the 2020/2021 offer, and 3.00 p.m. on 30 June 2021, in the case of the 2021/2022 offer (unless, in either case, the Offer has been fully subscribed by an earlier date). The closing date of the Offer, and the deadline for receipt of applications for the final allotment with respect to the 2021/2022 offer, may be extended by the Directors at their absolute discretion to a date no later than 2 September 2021. It is expected that the admission to trading on the London Stock Exchange's main market for listed securities of the B Ordinary Shares that are the subject of the Offer will become effective within ten business days of their allotment. |
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| Expenses charged to the Investor | |
| The expenses charged to the Investor are 3.0% of gross funds raised by the Company for advised Investors and 5.5% of gross funds raised for direct Investors. |
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| Adviser charges and commission | |
| Commission is not permitted to be paid to intermediaries who provide a personal recommendation to UK retail clients on investments in VCTs. Instead of commission being paid by the VCT, a fee will usually be agreed between the intermediary and investor for the advice ("Adviser Charge"). This fee can either be paid directly by the Investor to the intermediaries or, up to an amount not exceeding 4.5% of the amount subscribed by the Investor, can be facilitated by the Company. If the payment of the Adviser Charge is to be facilitated by the Company, then the Investor is required to specify the amount of the Adviser Charge on the Application Form. The Investor will be issued fewer B Ordinary Shares (to the equivalent value of the Adviser Charge) through the Pricing Formula set out above. |
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| Commission is permitted to be paid to intermediaries in certain limited situations, such as in respect of execution only clients (where no advice or personal recommendation has been provided) or where the intermediary has demonstrated to the Manager that the Investor is a professional client of the intermediary. An initial commission of up to 2.5% of the amount subscribed may be payable and, provided that the intermediary continues to act for the Investor and the Investor continues to be the beneficial owner of the B Ordinary Shares, and subject to applicable laws, regulations and FCA rules, the Company reserves the right to agree trail commission with intermediaries on an individual basis up to 0.375% of the net asset value of a B Ordinary Share at the end of each financial year commencing in 2021, for a period of up to six years. Payment of the initial commission is the Manager's responsibility and is payable out of the |
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| Promoter Fee. Trail commission is payable by the Company. |
| Expenses of the Offer Total initial expenses of the Offer are limited to 5.5% of the gross proceeds of the Offer. Dilution On the basis of full subscription under the Offer of £40 million, including full utilisation of the over allotment facility at an Offer Price of 116.7 pence per B Ordinary Share, the B Ordinary Shares in issue will be diluted by 25.5%. |
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| The reason for the Offer is to enable the Company to raise funds and use a minimum of 80% of the proceeds of the Offer to acquire over a period not exceeding three years (and subsequently maintain) a portfolio of VCT‑qualifying investments in accordance with its published investment policy. The Company intends to use the funds raised under the Offer to make new investments and to make a number of follow‑on investments in companies in which the Company has already invested. Assuming a full subscription of £40 million of B Ordinary Shares and a Promoter Fee of 5.5% on all such subscriptions (with the over‑allotment facility fully utilised), the estimated maximum net proceeds of the Offer is £37.8 million. The Offer is not subject to an underwriting agreement. No conflict of interest is material to the Offer. |
Prospective Investors should consider carefully the following risk factors, as well as the other information in this Prospectus, before investing in B Ordinary Shares. Prospective Investors should read the whole of this Prospectus and not rely solely on the information in this section entitled "Risk Factors". The business and financial condition of the Company could be adversely affected if any of the following risks were to occur and as a result the trading price of the B Ordinary Shares could decline and Investors could lose part or all of their investment.
The Directors consider the following risks to be material for potential Investors, but the risks listed below do not necessarily comprise all those associated with an investment in the Company. Additional risks and uncertainties currently unknown to the Company (such as changes in legal, regulatory or tax requirements), or which the Company currently believes are immaterial, may also have a materially adverse effect on its financial condition or prospects or the trading price of B Ordinary Shares.
The Directors draw the attention of potential Investors to the following risk factors which may affect an investment in B Ordinary Shares, the Company's performance and/or the availability of tax reliefs.
The information in this document is based on existing legislation, including taxation legislation. The tax reliefs described are those currently available. Levels and bases of, and relief from taxation are subject to change. Such change could be retrospective. The value of tax reliefs depends on the personal circumstances of a holder of shares, who should consult their own tax adviser before making any investment.
An investment in the Company should be regarded as long‑term in nature as a sale by Investors of their Shares within five years will require a repayment of the 30% income tax relief obtained and is, therefore, not suitable for all individuals. Potential Investors should consult their professional adviser prior to making any investment decision in relation to the Offer.
The FTSE 100 and other share indices across Europe and the US initially declined in response to the spread of the virus and the restrictions imposed by governments to contain it and have since recovered. Some of the Company's portfolio companies in the Wellness and Food, Beverage & Hospitality sectors had to close temporarily in response to Government guidelines, and the Company's gains seen as a result of the strong performance of the Company's portfolio in the 11 months to February 2020 were largely reversed in March 2020 as a result of COVID‑19. Whilst the gym sites in the Company's Wellness sector and the restaurant sites in the Company's Food, Beverage & Hospitality sector have returned to trading, and whilst KX Gym has secured a re‑financing, these and the Company's other investee companies may continue to be impacted by the pandemic, the UK Government's restrictions and the resulting disruption caused to consumer demand. Whilst the UK Government has provided financial support and implemented fiscal measures to support small businesses, the UK Government may vary significantly the restrictions it has imposed on business activities, the financial support it is currently providing to businesses and the other fiscal measures it has taken. The exact effect of these on the Company's investee companies is, therefore, difficult to predict and the general disruption caused by the virus may make it more difficult to value the Company's investments in investee companies on an on‑going basis.
The Company may make investments into companies with similar trading profiles and with exposures in the same industry and/or to the same customer base. The level of returns to the Company may, therefore, be adversely affected by any downturn in those sectors or the sources within those sectors from which income is derived.
The Company does not intend to invest in a large number of Qualifying Investments or Non‑Qualifying Investments, instead concentrating on a limited number of Qualifying Investments or Non‑Qualifying Investments but at the same time ensuring that no one investment represents more than 15% (by value and at the date of investment) of its total investments. By concentrating on a smaller number of Qualifying Investments and Non‑Qualifying Investments, risk is not spread as widely but is more concentrated between a smaller number of Qualifying Investments and Non‑Qualifying Investments.
The Manager will provide discretionary and advisory investment management services to the Company in respect of its portfolio of investments. If the Manager does not perform its obligations in accordance with the agreement regulating the provision of these services, the performance of the Company and/or its ability to achieve or maintain VCT status, may be adversely affected.
The Manager, or any of its officers, employees, agents and affiliates and the Directors and any person or company with whom they are affiliated or by whom they are employed (each an "Interested Party") may be involved in other financial, investment or other professional activities which may cause conflicts of interest with the Company. An Interested Party will not be liable to account for any profit made in connection with these activities. For example, and without limitation, an Interested Party may:
(d) arrange for the Company to acquire investments from or dispose of investments to any Interested Party or any investment fund or account advised or managed by any such person.
In the event of a conflict of interest arising in relation to the above circumstances, or in any other circumstances, and so far as it is within their powers to do so, the Directors will endeavour to ensure that it is resolved fairly and approved by the Independent Board in accordance with the Conflicts Policy as set out in the Manager's compliance manual. Where potential and actual conflicts of interest are identified, the Manager's compliance team will be notified and they will prepare a note, which will then be considered by and discussed with the Independent Board, with the aim of agreeing steps to resolve or otherwise manage such conflicts.
To the extent that the Company intends to invest in a company in which another fund managed by the Manager has invested or intends to invest, the investment must be approved by the Independent Board.
This Prospectus contains forward‑looking statements, including, without limitation, statements containing the words "targets", "believes", "expects" ,"estimates", "intends", "may", "plan", "will", "anticipates"" and similar expressions (including the negative of those expressions). The Directors consider that the expectations reflected in these statements are reasonable but forward‑looking statements involve unknown risks, uncertainties and other factors which may cause the actual results, financial condition, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by those forward‑looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in the risk factors section of this document. Given these uncertainties, prospective investors are cautioned not to place any undue reliance on those forward‑looking statements. The forward‑looking statements contained in this document are made on the date of this document, and the Company is not under any obligation to update those forward‑looking statements in this document to reflect actual future events or developments. Notwithstanding the foregoing, nothing in this Prospectus shall exclude any liability for, or remedy in respect of, fraudulent misrepresentation.
| Offer opens | 3 September 2020 |
|---|---|
| Deadline for receipt of applications and cleared funds for final allotment in 2020/2021 Offer | 3.00 p.m. on 1 April 2021 |
| Deadline for receipt of applications and cleared funds for final allotment in 2021/2022 Offer | 3.00 p.m. on 30 June 2021 |
| Allotments in respect of applications under the 2020/2021 Offer | On or before 5 April 2021 |
| Anticipated final allotment in respect of applications under the 2021/2022 Offer | 30 June 2021 |
Admission and dealings expected to commence within ten Business Days of any allotment.
The deadline for receipt of applications is subject to the Offer not being fully subscribed by an earlier date. The closing date of the Offer, and the deadline for receipt of applications for the final allotment in the 2021/2022 tax year, may be extended by the Directors at their absolute discretion to a
date no later than 2 September 2021 (and the anticipated allotment date under the 2021/2022 offer will be extended accordingly). The Directors reserve the right to allot and issue B Ordinary Shares at any time whilst the Offer remains open. Definitive share and tax certificates will be dispatched and CREST accounts credited as soon as practicable following allotment of B Ordinary Shares. The Offer is not underwritten.
| Offer Price per B Ordinary Share | See page 46 |
|---|---|
| Issue costs per B Ordinary Share | See page 46 |
| Expected maximum net proceeds of the Offer if the over‑allotment facility is utilised* | £37.8 million |
| Expected maximum net proceeds of the Offer if the over‑allotment facility is not utilised* | £18.9 million |
| Maximum number of B Ordinary Shares in issue following the Offer if the over‑allotment facility is fully utilised** | 134,461,467 |
| Maximum number of B Ordinary Shares in issue following the Offer if the over‑allotment facility is not utilised** | 117,323,506 |
* assumes Promoter Fee of 5.5% paid on all subscriptions
** assuming an Offer Price of 116.7 pence per B Ordinary Share
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(capped to the first £5,000,000 of subscription monies)
1.0% B Ordinary Share bonus for completed Application Forms received and accepted by 31 October 2020
Bonus Shares (capped to the second £5,000,000 of subscription monies) 0.5% B Ordinary Share bonus for completed Application Forms received and accepted by 31 December 2020
(all non‑executive) Jonathan Simon Djanogly (Chairman) Laurence Charles Neil Blackall David John Till
London SW1X 0AS
Edinburgh EH2 4LH
Howard Kennedy Corporate Services LLP No.1 London Bridge London SE1 9BG
Pembroke Investment Managers LLP 3 Cadogan Gate London SW1X 0AS
The City Partnership (UK) Limited Suite 2 Park Valley House Park Valley Mills Meltham Road Huddersfield HD4 7BH
Howard Kennedy LLP No.1 London Bridge London SE1 9BG
Philip Hare & Associates LLP Hamilton House 1 Temple Avenue London EC4Y 0HA
BDO LLP 55 Baker Street London W1U 7EU
Portlight Limited 10 Throgmorton Avenue London EC2N 2DL
I am pleased to announce that Pembroke VCT plc has launched a new share offer to raise up to £40 million. After raising over £109 million since 2012, Pembroke has invested £74.4 million in 45 companies. The Board is pleased with the performance to date and the continued progress of the portfolio. The additional cash will allow the Company to grow its existing portfolio of investments, take advantage of a healthy pipeline of prospective investment opportunities and seek to embark on a share buyback programme.
As at March 2020 the net asset value of the B Ordinary Shares was 110.29 pence and the Total Return per B Ordinary Share was 122.53 pence.
New Investors will gain immediate access to a maturing portfolio of growing businesses and to a well‑established dividend‑paying VCT. These assets include high growth opportunities such as Plenish, Popsa and N is for Nursery. Additionally, Pembroke intends to use the funds raised to make a number of follow‑on investments in companies in which the Company has already invested – where further capital will accelerate their growth plans. Approximately 8.4% of the investments (by value) made to date, have been into businesses that are now trading profitably at the operating profit level.
On 26 August 2020 the Ordinary Shares converted into B Ordinary Shares on a relative NAV basis, namely 1.039713483 B Ordinary Shares for each Ordinary Share, such that the Company now has just one class of share, the B Ordinary Shares.
The recent social and economic impact of COVID‑19 has been felt across the portfolio companies and their staff. The Company's portfolio had seen strong performance in the 11 months to February 2020 with the gains largely reversed in March 2020 as a result of COVID‑19. Some of our portfolio companies in the Wellness and Food, Beverage & Hospitality sectors had to close temporarily in response to Government guidelines, whilst portfolio companies in the Digital Services, Design, Education and Media sectors have seen their sales grow as consumer buying patterns have moved on‑line. The position of those portfolio companies should get better as the economy improves, although for some the damage may be more lasting. We have been impressed generally speaking by the resilience and adaptability shown by the investee company founders and their teams, and Pembroke's investment strategy and sector focus will provide some resilience during this continued period of disruption.
Following the UK's departure from the EU, the Manager has been closely monitoring the portfolio for any subsequent impact. Whilst there is still uncertainty around what the UK's trading relationship with the EU will look like in a few years' time, the portfolio companies should be mostly unaffected. Given they are UK based businesses and a number sell their products internationally, the majority have benefitted from the depreciation of Sterling. This should make both their products more attractive to potential customers and the portfolio companies themselves more attractive to potential buyers. The UK boasts a significant track record in the sectors in which the Company invests; this is not expected to change.
Changes to the VCT Rules in 2015 and 2018 restricted the types of companies that VCTs can invest in. Many VCT managers have been forced to develop new investment capabilities and hire new staff. Given the Company's focus on providing development capital to high growth companies rather than 'management buy‑out' transactions and mature businesses, the Board is confident that the Manager remains well placed to manage the Company and identify suitable investment opportunities. Neither the Company's investment strategy nor the types of company it invests in has had to alter since these rule changes.
Investments made following the Finance Act 2018 are subject to a new risk‑to‑capital condition, which has two requirements, based on the views of a 'reasonable' person: (i) does the company intend to grow and develop over the long term, and (ii) is there the risk of a loss of capital to the investor of an amount greater than the net return? The Company believes its current portfolio and future pipeline meets these tests without difficulty, and will not need to make any meaningful changes to its investment strategy.
The Company's objective remains the same; Pembroke provides Investors with access to a series of carefully researched investments currently focusing on its six key investment segments being; Wellness, Food, Beverage & Hospitality, Education, Design, Media and Digital Services. Pembroke will continue to invest in a diversified portfolio of smaller unquoted companies. The objective is to generate significant returns, whilst enabling Investors to benefit from substantial tax advantages. Pembroke seeks opportunities which are capable of significant organic growth and sustainable cash generation. A key feature of this strategy is an investment bias towards consumer‑facing businesses which have an established premium consumer brand or with the potential to develop one.
The B Ordinary Shares target an annual dividend of 3 pence per B Ordinary Share. Holders of B Ordinary Shares received a 3 pence dividend per B Ordinary Share on 31 October 2019, and it is proposed that a 3 pence dividend per B Ordinary Share will be paid to holders of B Ordinary Shares in October 2020.
VCTs offer significant tax benefits over most investment products, including:
• no capital gain arises when Shares are sold.
If you are not already, I look forward to welcoming you as a Shareholder.
Jonathan Djanogly Chairman 3 September 2020
16
For its Qualifying Investments, the Company is expected to invest principally in unquoted companies, although it may also invest in companies whose shares are traded on AIM or the Aquis Stock Exchange. The Company will invest in a diverse range of smaller companies which the Manager believes provide the opportunity for value appreciation. It is likely that investment will be biased towards consumer‑facing businesses with an established brand or where brand development opportunities exist, with a concentration in sectors where the Manager has a previous track record. Investments have to date been across six sectors: Wellness, Food, Beverage & Hospitality, Education, Design, Media and Digital Services. The companies may be at any stage in their development from start‑up to established businesses. Approximately 8.4% of the investments (by value) made to date have been in businesses that are now trading profitably at the operating profit level. It is expected that a substantial proportion of the Qualifying Investments will be in the form of ordinary shares, although the Company has and may continue to invest in preference shares or provide loans as part of those investments. It is anticipated that the Company will generally take positions in its investee companies which, whilst minority interests (as required under VCT Rules), provide the Company with significant influence over key elements of each investee company's strategy and operations.
It is anticipated that, at any time, up to 20% of investments will be held in Non‑Qualifying Investments, recognising that no single investment will represent more than 15% of net assets (at the time of investment). Until suitable Qualifying Investments are identified, the net proceeds of the Offer will be invested in Non‑Qualifying Investments intended to generate a positive return, which may include certain money market securities, gilts, listed securities and cash deposits. The Company will continue to hold up to 20% of its net assets in such products after it is fully invested under the VCT Rules. To the extent that any such investment results in the Manager or another member of the Oakley group receiving an additional management fee on any assets of the Company, the Manager has agreed to refund those additional amounts to the Company, so there is no "double dipping".
VCTs offer significant tax advantages over most investment products. In summary, the main tax reliefs for Investors are:
Assume that an Investor invests £200,000 in the Company, which leads to £400,000 of capital returned to the Investor.
| Illustration | |
|---|---|
| Initial investment | £200,000 |
| 30% income tax relief | £(60,000) |
| Effective cost of initial investment | £140,000 |
| Capital returned to Investor (no capital gains tax payable on this return) |
£400,000 |
| Money multiple based on effective cost of initial investment |
2.9x (=£400,000/£140,000) |
| Overall tax saving | £100,000 |
| No capital gains tax on the capital return, so tax saved here (at 20%) |
£40,000 (=20% of £200,000) |
| 30% income tax relief | £60,000 |
However, no profit forecast is to be inferred or implied from this example.
(=30% of £200,000)
The Company proposes to raise subscriptions from Investors through both the 2020/2021 offer and the 2021/2022 offer. Investors will be able to subscribe for B Ordinary Shares both before and after the end of the current tax year (5 April 2021) in order to take advantage of the tax reliefs available in each tax year. This also means that individual Investors will be able to invest a maximum of £400,000 in the Company under the Offer by utilising their income tax relief for two tax years. Further, as spouses individually have such entitlements, a couple together could double this £400,000 amount to £800,000 in total.
Income tax relief is only available for set‑off against any income tax liability due. Investments in excess of £200,000 per tax year can be made although the amount of tax relief available will be limited to £200,000.
The above is only a very brief summary of the UK tax position of Investors in VCTs and is based on the Company's understanding of current law and practice. The tax treatment of Investors in VCTs will depend on their individual circumstances. Potential Investors are recommended to consult their own appropriate professional adviser as to the taxation consequences of their investing in a VCT.
The Company aims to exit each of its Qualifying Investments after a holding period of approximately four to seven years. The Manager will consider the likely exit options as part of its due diligence process on an investment opportunity before making a recommendation to invest.
Where possible, the Company will encourage an exit from an investee company at the same time as other shareholders as this is likely to maximise value for Investors.
As interests in the investee companies are sold, the Company intends to pay to Shareholders the net proceeds it receives from each sale, most likely in each case by way of tax free dividends, but always subject to the requirements and best interests of the Company, and the rules and regulations to which it is subject and subject to the Company having sufficient cash resources and distributable reserves. Net proceeds are calculated after deducting costs of the transaction and any Performance Fee payable.
The past and present Directors have invested £725,000 in the first issue of Ordinary Shares and a further £1,503,329 in subsequent share offers, thus creating a significant alignment of their interests with other investors in the Company, and reflecting their continued confidence in the investment strategy. The value of the Directors' investment is now £2,398,226. The Directors intend to invest a further £100,000 in aggregate under the Offer.
The Manager's investment activity up to the date of this document and performance up to 31 March 2020 is summarised below.
The Manager has developed a consistent track record of investing in small companies, targeting businesses capable of significant organic growth, as illustrated in the table below. Prior to the date of this document, the Manager has invested, in total, £72.5 million and has generated a total fair value of £95.4 million
(Source: unaudited figures provided by the Manager).
Pembroke has made a total of 45 investments and the current active portfolio consists of 40 investments.
In total, £72.5 million has been invested as at the date of this document in the current portfolio (see table below). Approximately 8.4% of the investments (by value) made to date are in businesses which are now trading profitably at the operating profit level.
With the exception of Thriva, Rubies in the Rubble, Hackney Gelato, Pasta Evangelists, Kinteract, Stitch & Story, ToucanTech and Roto VR, all investments in the Company's portfolio have been held within the Pembroke portfolio for over 12 months and, therefore, have been revalued at fair value (unaudited) either based on the most recent follow-on investment rounds or on valuation multiples applied to trading performance. Those investments have increased in value to £95.4 million representing an overall "money multiple" including realisations of 1.32x to 31 March 2020.
(Source: unaudited figures provided by the Manager*).
Summary of Pembroke investment performance**
| Maximum holding period (months) |
Equity (cost) £ |
Debt (cost) £ |
Total invested (cost) £ |
Equity fair value £ |
Loan fair value £ |
Current valuation £ |
Return | |
|---|---|---|---|---|---|---|---|---|
| B Ordinary Share portfolio | 87 | 55,807,234 | 16,651,491 | 72,458,725 | 77,056,933 | 18,361,467 | 95,418,400 | 1.32x |
| 55,807,234 | 16,651,491 | 72,458,725 | 77,056,933 | 18,361,467 | 95,418,400 | 1.32x |
*See paragraph 6.20 of Part 4.
**The relevant figures for equity and debt investments (at cost) include amounts allocated to realised investments. Equity fair values and debt balances are of those investments held at the date of this document, with audited valuations as at 31 March 2020. Proceeds realised consist of principal amounts repaid/interest paid in relation to any loan notes, together with proceeds on investments exited, prior to the date of this document.
| Holding Equity Debt invested fair accrued Current First period (cost) (cost) (cost) value interest valuation investment investment (months) £ £ £ £ £ £ Wellness Beryl Mar 15 66 552,697 – 552,697 1,770,536 – 1,770,536 Boom Cycle Jul 15 62 1,576,439 1,530,000 3,106,439 986,671 1,599,973 2,586,644 KX Gym Sep 13 84 700,000 – 700,000 1,284,831 – 1,284,831 KXU Mar 17 41 244,114 790,000 1,034,114 – 971,228 971,228 Lyma Life Dec 18 21 999,993 550,000 1,549,993 2,202,165 557,233 2,759,398 Thriva Jul 19 14 1,329,558 – 1,329,558 1,600,993 – 1,600,993 Food, Beverage & Hospitality Plenish Jul 15 62 3,295,499 100,000 3,395,499 9,101,997 147,273 9,249,270 Chilango Dec 15 57 634,850 – 634,850 – – – Five Guys UK Sep 15 60 – 2,083,200 2,083,200 3,936,023 3,344,154 7,280,177 La Bottega Aug 15 61 960,000 1,585,022 2,545,022 – – – Chucs Bar & Grill Jul 15 62 – 2,220,000 2,220,000 – 2,220,000 2,220,000 Second Home Apr 15 65 1,485,096 – 1,485,096 466,523 – 466,523 |
|
|---|---|
| Return on | |
| 3.2x | |
| 0.8x | |
| 1.8x | |
| 0.9x | |
| 1.8x | |
| 1.2x | |
| 2.7x | |
| 0.0x | |
| 3.5x | |
| 0.0x | |
| 1.0x | |
| 0.3x | |
| Sourced Market Jan 16 56 3,896,767 1,900,000 5,796,767 3,064,345 2,079,767 5,144,112 |
0.9x |
| Secret Food Tour Aug 18 25 1,000,206 – 1,000,206 1,859,890 – 1,859,890 |
1.9x |
| Rubies in the Rubble Jul 19 14 250,099 – 250,099 107,235 – 107,235 |
0.4x |
| Hackney Gelato Jan 20 8 1,000,141 – 1,000,141 1,000,141 – 1,000,141 |
1.0x |
| Pasta Evangelists Jan 20 8 2,000,000 – 2,000,000 2,000,000 – 2,000,000 |
1.0x |
| Education | |
| N Family Club Jul 18 26 3,000,084 200,000 3,200,084 4,476,220 217,699 4,693,919 |
1.5x |
| Kinteract Apr 19 17 1,250,016 – 1,250,016 1,336,872 – 1,336,872 |
1.1x |
| Stitch & Story Nov 19 10 1,999,998 – 1,999,998 3,175,104 – 3,175,104 |
1.6x |
| ToucanTech May 20 4 1,000,000 – 1,000,000 1,000,000 – 1,000,000 |
1.0x |
| Design | |
| Kat Maconie Jun 13 87 820,000 1,030,000 1,850,000 2,734,773 1,155,013 3,889,786 |
2.1x |
| Troubadour Goods Nov 15 58 1,240,000 250,000 1,490,000 1,159,776 275,068 1,434,844 |
1.0x |
| Bella Freud Jun 15 63 2,088,082 650,000 2,738,082 3,444,402 1,045,969 4,490,371 |
1.6x |
| ME+EM Aug 15 61 889,646 – 889,646 5,195,128 – 5,195,128 |
5.8x |
| Alexa Chung Apr 16 53 3,732,588 – 3,732,588 2,372,043 – 2,372,043 |
0.6x |
| Heist Jul 17 38 3,498,514 750,000 4,248,514 1,060,638 822,546 1,883,184 |
0.4x |
| PlayerLayer Dec 17 32 2,501,413 1,000,000 3,501,413 2,200,369 1,008,219 3,208,588 |
0.9x |
| Media | |
| Boat International Media May 15 64 1,700,000 1,550,000 3,250,000 2,565,677 2,387,322 4,952,999 |
1.5x |
| Stillking Films Oct 14 71 1,451,770 – 1,451,770 2,345,516 – 2,345,516 |
1.6x |
| Popsa Feb 18 30 4,400,003 – 4,400,003 7,726,774 – 7,726,774 |
1.8x |
| Roto VR Dec 19 9 1,000,000 – 1,000,000 1,071,160 – 1,071,160 |
1.1x |
| Digital Services | |
| Rated People Apr 16 53 641,218 – 641,218 1,264,791 – 1,264,791 |
2.0x |
| Wishi Fashion Sep 16 47 153,433 – 153,433 153,433 – 153,433 |
1.0x |
| Unbolted Nov 16 45 400,009 – 400,009 500,108 – 500,108 |
1.3x |
| Stylindex Feb 18 31 200,000 463,269 663,269 200,000 494,365 694,365 |
1.0x |
| HotelMap Oct 18 23 1,500,000 – 1,500,000 1,500,000 – 1,500,000 |
1.0x |
| Floom Nov 18 22 2,415,000 – 2,415,000 2,192,798 35,638 2,228,436 |
0.9x |
| Total 55,807,234 16,651,491 72,458,725 77,056,933 18,361,467 95,418,400 |
1.3x |
The Company will be managed by the Manager, which includes the management professionals described below, together with assistance from a number of specialist staff within the Oakley group.
Peter is an entrepreneur who started his career in his early twenties by successfully acquiring, growing and selling a number of small businesses and subsequently gained experience building larger businesses in the public markets in the early 2000s. He founded Oakley Capital ("Oakley") in 2002 to be a best of breed, entrepreneurially driven investment house, creating an ecosystem that supports companies through investment, whether they are early-stage (through the venture capital businesses) or more established companies (through the private equity funds). The vision of Oakley has always been to encourage and back entrepreneurship.
Oakley Capital Private Equity is a Western Europe-focused private equity firm with c.€3.0 billion of assets under management. Oakley's private equity funds invest in mid-market companies across the region within three core sectors – Consumer, Education and Technology.
Oakley is able to deliver differentiated investment opportunities and superior returns by leveraging its entrepreneurial mindset and considerable sector expertise. The Oakley team works closely with a unique network of entrepreneurs and successful management teams to help source primary, proprietary opportunities and gain valuable insights into the businesses in which it invests. Its ability to overcome complexity, and a flexible approach to value creation, allow Oakley to support its portfolio companies to achieve sustainable growth and as a result generate strong returns.
Peter has been a consistent supporter of smaller entrepreneurial endeavours over many years and, as well as making personal investments, he has backed venture capital teams to support emerging firms. Oakley established Pembroke in 2013 to support the development of smaller, early-stage high-growth businesses.
Partner and Co‑Founder of Oakley
See paragraph headed "Board of Directors" on page 21.
Andrew is responsible for executing Pembroke's strategy, leading the investment team, deal origination and supporting portfolio companies.
Andrew sits on the board of a number of Pembroke's current investments and helps the founders and management teams develop their strategies and support them in delivering their goals. Prior to becoming Chief Investment Officer of the Manager, Andrew worked with a number of Oakley's earlier stage portfolio companies including KX and James Perse. Before joining Oakley, Andrew headed a number of businesses working across a breadth of sectors from hospitality to manufacturing and telecoms. Andrew is also a director of Benesco Charity Limited, and a trustee of The Charles Wolfson Charitable Trust.
Chris joined Pembroke in 2019. Prior to joining Pembroke he was CFO at Downing LLP. During his ten years at Downing, the business expanded considerably and diversified from managing VCTs into EIS, inheritance tax planning, lending and other investment products. He became a Partner and CFO in 2014.
Chris graduated from University College London and spent nine years with KPMG where he qualified as a chartered accountant. He has also worked at EY and has been CFO of a London family office.
Investment Director
Simon joined the Oakley group in 2015 as an Analyst and subsequently Associate in the Group's corporate finance division, before joining Pembroke in 2017. Simon is responsible for conducting due diligence on investment opportunities and assisting with a wide range of transactions across the portfolio. Before joining Oakley he worked as an Equity Analyst for two specialist equity investors.
Simon holds an MEng and Ph.D. in Mechanical Engineering from the University of Bristol.
Portfolio Director
Will joined Pembroke in September 2017 to oversee portfolio management. He is responsible for the performance of Pembroke's investments whilst helping them to achieve their goals through using Pembroke's resources and network where possible.
Will founded his own business in 2010 in the environmental sanitation space and successfully sold it in 2012. Following this, Will trained and qualified as a Chartered Accountant with Beever & Struthers in London before moving to Anthemis Group as group financial controller.
Will has a MEng in Civil Engineering from the University of Bristol and is an ACA chartered accountant.
Katrina joined Pembroke in 2020. Prior to joining she was an investment manager at a venture capital fund. She started her career at KPMG, initially within deal advisory and latterly as its UK nutrition lead. Katrina graduated from the University of Bristol in 2008 with a degree in modern languages and qualified as a chartered accountant in 2011.
Fred joined Pembroke in 2019 as an Investment Analyst. He is responsible for conducting due diligence on investment opportunities and assisting with a wide range of transactions across the portfolio. Before joining Pembroke he worked at Grant Thornton UK LLP. At Grant Thornton, he was an Executive in a Corporate Finance team in London, operating within their market leading Growth Finance practice.
Fred holds a first class BA (Hons) in Business Studies with Finance from London South Bank University and has passed CFA Level 1.
Portfolio Analyst
Orla joined Pembroke in 2019 and works in the portfolio team. She is responsible for all financial reporting and monitoring of the portfolio companies. Prior to joining Pembroke, Orla worked in audit at Deloitte LLP, focusing on privately owned and private equity backed businesses. She qualified as an ACA Chartered Accountant in 2018.
Marketing Executive
Rosie joined Pembroke in 2019. Before joining the Pembroke team, Rosie worked in London as a PR Account Executive with a focus on consumer brands. She graduated from the University of Nottingham in 2016 where she read English.
Executive Team Assistant
Ellie joined Pembroke in 2020, having previously worked at Oakley Capital. She graduated in 2019 from Newcastle University with a degree in Ancient History and Archaeology.
The Board comprises three Directors, all of whom are non‑executive. Jonathan Djanogly and Laurence Blackall are independent of the Manager. The third Director, David Till, is a member of the Manager and is, therefore, not considered independent. Although the management of the Company's portfolio has been delegated to the Manager and the Manager acts as the Alternative Investment Fund Manager, the Directors retain overall responsibility for the Company's affairs.
Independent non‑executive Chairman
Jonathan is a non‑practicing solicitor and was, for over ten years, a corporate partner at City law firm SJ Berwin LLP. He specialised in mergers and acquisitions, private equity and joint ventures as well as fund raising on public markets. Jonathan has been a Member of Parliament since 2001, in which capacity he served for approximately four years as a member of the Trade and Industry Select Committee. Between 2005 and 2010, he also served on the Opposition front bench as shadow Solicitor General and as a shadow Minister for Trade and Industry with responsibility for employment law and corporate governance.
From 2010 he served as a Justice Minister for over two years and was a member of the Exiting the EU Select Committee.
Independent non‑executive Director
Laurence has had a 30‑year career in the information, media and communication industries. After an early career at Virgin and the SEMA Group he was a director of Frost & Sullivan before moving to McGraw Hill where he was a vice‑president in its computer and communications group. He then went on to found AIM listed Internet Technology Group plc in 1995 and successfully negotiated its sale in 2000 for a consideration of almost £150 million. Laurence was also instrumental in the creation of Pipex Communications plc.
He has interests in a range of leisure and TMT businesses and currently holds a number of directorships in public and private UK companies.
Non‑independent non‑executive Director
David Till co-founded the Oakley Capital Group in 2002. He plays a key role within the group and has overall responsibility for the businesses' operations.
David worked with Peter Dubens on the development of 365 Media Group plc and Pipex Communications plc where he led all 26 acquisitions and disposals between 2002 and 2007. In 2007, following the sale of both 365 Media Group plc and Pipex Communications plc, Peter and David launched Oakley Capital Private Equity.
David holds a BA (Hons) in Economics from Essex University. He started his career in the British Army, then later qualified as a chartered accountant with Coopers & Lybrand and worked in industry as a finance director before returning to the profession holding senior M&A roles.
The past and present Directors have already invested £2,228,329 in the Company, and the Directors intend to invest a further £100,000 in aggregate under the Offer. Members of the Manager intend to invest between £200,000 and £300,000 under the Offer.
22
As at 31 March 2020, over 87.4% of the portfolio (as measured by VCT Rules) was invested in VCT‑qualifying investments as reviewed and confirmed by Philip Hare & Associates LLP, significantly above the 80% current VCT‑qualifying threshold. The funds raised by the issue of B Ordinary Shares under the Offer will be invested in accordance with the Company's published investment policy.
The Company's current investment policy is set out below:
The Company will seek to invest in a diversified portfolio of smaller companies, principally unquoted companies but possibly also including stocks quoted on AIM or the Aquis Stock Exchange, selecting companies which the Investment Manager believes provide the opportunity for value appreciation. Pending investment in suitable Qualifying Investments, the Investment Manager will invest in investments intended to generate a positive return, which may include certain money market securities, gilts, listed securities and cash deposits. The Company will continue to hold up to 30% of its net assets (20% from 1 April 2020) in such products after it is fully invested under the VCT Rules.
For its "qualifying investments" (being investments which comprise Qualifying Investments for a venture capital trust as defined in Chapter 4 Part 6 of the Income Tax Act 2007) ("Qualifying Investments"), the Company is expected to invest primarily in unquoted companies, although it may also invest in companies whose shares are traded on AIM or the Aquis Stock Exchange. The Company will invest in a diverse range of businesses, predominantly those which the Investment Manager considers are capable of organic growth and, in the long term, sustainable cash flow generation. It is likely that investment will be biased towards consumer facing businesses with an established brand or where brand development opportunities exist. The Company will invest
in a small portfolio of carefully selected Qualifying Investments where the Investment Manager should be able to exert influence over key elements of each investee company's strategy and operations. The companies may be at any stage in their development from start-up to established businesses.
It is anticipated that, at any time, up to 30% of investments (20% from 1 April 2020) will be held in non-VCT qualifying investments, recognising that no single investment will represent more than 15% of net assets (at the time of investment). Until suitable Qualifying Investments are identified, up to 30% of the net proceeds of any offer (20% from 1 April 2020) will be invested in other funds, with the balance being invested in other investments which may include certain money market securities, and cash deposits.
Under current VCT legislation, the Company must at all times hold at least 80% of its funds in Qualifying Investments. Funds raised in a period of up to three years are excluded from this requirement, but at least 30% of funds raised in any accounting period must be invested in Qualifying Investments by the anniversary of the end of the accounting period in which those funds were raised.
For its Qualifying Investments, the Company will invest primarily in companies whose shares are not traded on any exchange, although it may also invest in companies whose shares are traded on AIM or the Aquis Stock Exchange, and will invest up to a maximum of 15% (at the time of investment) in any single Qualifying Investment. The Investment Manager will seek to construct a portfolio comprising a diverse range of businesses. It is expected that a substantial proportion of the Qualifying Investments will be in the form of ordinary shares, and in some cases preference shares or loans.
Under current VCT legislation, the Company must have invested at least 80% of funds raised in Qualifying Investments within three years of the funds being raised. However, this programme of investment in Qualifying Investments will take time to complete; thus in the first three years following a fund raise, a considerable proportion of those funds will need to be invested elsewhere, in Non‑Qualifying Investments such as certain money market securities, listed securities and cash deposits. At any time after the end of the three years of initial investment in Qualifying Investments, the Company will hold no more than 20% of its funds in Non‑Qualifying Investments.
The portfolio of Non‑Qualifying Investments will be managed with the intention of generating a positive return. Until suitable Qualifying Investments are identified, up to 20% of the net proceeds of any offer will be invested in other funds, with the balance being invested in other investments which may include money market securities and cash deposits.
The Directors will control the overall risk of the portfolio by ensuring that the Company has exposure to a diversified range of unquoted companies, in particular, through targeting a variety of sectors.
The Company may invest in a diverse range of securities: unquoted Qualifying Investments will typically be structured as a combination of ordinary shares, preference shares, convertible shares and loans.
In order to limit concentration risk in the portfolio, at the time of investment, no more than 15% by value of the relevant share pool of the Company will be invested in any single portfolio company. Further, at the time the investment is made, no more than 10% in aggregate of the NAV of the Company may be invested in other listed closed ended investment funds.
In common with many other VCTs, although currently the Board does not intend that the Company will borrow funds, the Company has the ability to borrow funds provided that the aggregate principal amount outstanding at any time does not exceed 25% of the value of the adjusted capital and reserves of the Company at the time the borrowings are incurred. In summary, this is when the aggregate of (a) the issued share capital, plus (b) any amount standing to the credit of the Company's reserves less (c) any distributions declared and intangible assets and adjusting for any variation to the above since the date of the relevant balance sheet.
The Board is responsible for determining the Company's investment policy and will have overall responsibility for the Company's activities. Should a material change in the investment policy be deemed appropriate by the Board, in accordance with the requirements of the Listing Rules this will only be effected with the prior approval of Shareholders.
The Manager, or any of its officers, employees, agents and affiliates and the Directors and any person or company with whom they are affiliated or by whom they are employed (each an "Interested Party") may be involved in other financial, investment or other professional activities which may cause conflicts of interest with the Company. An Interested Party will not be liable to account for any profit made in connection with these activities. For example, and without limitation, an Interested Party may:
In the event of a conflict of interest arising in relation to the above circumstances, or in any other circumstances, and so far as it is within their powers to do so, the Directors will endeavour to ensure that it is resolved fairly and approved by the Independent Board in accordance with the Conflicts Policy as set out in the Manager's compliance manual. Where potential and actual conflicts of interest are identified, the Manager's compliance team will be notified and they will prepare a note, which will then be considered by and discussed with the Independent Board, with the aim of agreeing steps to resolve or otherwise manage such conflicts.
To the extent that the Company intends to invest in a company in which another fund managed by the Manager has invested or intends to invest, the investment must be approved by the Independent Board. The Company's advisers may be involved in other financial, investment or other professional activities which may conflict with the interests of the Company.
When conflicts occur between the Manager and the Company because of other activities and relationships of the Manager, the Manager will ensure that the Company receives fair treatment. Such conflicts will be disclosed to the Company.
The Manager may make investments on behalf of the Company in collective investment vehicles of which it is manager or in companies where the Manager has been involved in the provision of services to those companies and may receive commissions, benefits, charges or advantage from so acting. Any fees arising in connection with investments made by the Company in any Oakley Funds will be discharged by the Manager. There will be no duplication of fees in such situations.
If situations arise where the Company proposes to invest in the same companies as other funds managed by the Oakley group, but at a different time or on different terms, any such proposed investment will require approval from the Independent Board.
No member of the Oakley group is obliged to offer co‑investment opportunities to the Company.
The Board will be responsible for determining the Company's investment policy and will have overall responsibility for the Company's activities. In accordance with the Listing Rules, a material change in the investment policy of the Company will only be effected with the prior approval of Shareholders.
The Manager will monitor each investment regularly and will expect to meet with the management of investee companies on a regular basis.
As the values of underlying investments increase, the Manager will monitor opportunities for the Company to realise gains, and make tax free distributions to Shareholders.
The Manager will advise the Company on the disposal of any underperforming investments if it believes that there is unlikely to be any capital appreciation in these investments in the short to medium term.
Investments in AIM‑ and Aquis Stock Exchange‑traded shares will be valued at prevailing bid prices in the market, unless it is thought necessary to make any adjustment for illiquidity.
Investments in hedge funds and funds of hedge funds will be valued on the basis of net asset value per share as reported by the administrator of each fund held. These funds typically permit investors to redeem their shares at net asset value per share using the next valuation published after the redemption notice period (typically 30 days).
All other investments will be valued by the Directors on the recommendation of the Manager in accordance with International Private Equity and Venture Capital Valuation ("IPEVC") guidelines. IPEVC guidelines have replaced BVCA guidelines for investment companies investing in unquoted investments and reporting under Financial Reporting Standards ("FRS").
The underlying principle of FRS is that investments should be reported at fair value. Fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's‑length transaction.
In estimating fair value for an investment, the methodology applied must be appropriate to the nature, facts and circumstances of the investment and its materiality, based on reasonable assumptions and estimates.
The Manager will be responsible for determination and calculation of the net asset value of the Company in accordance with the policies set out above.
The Company announces its net asset value per Share half yearly through its annual reports and interim accounts, which will be communicated to Shareholders through Regulatory Information Service announcements.
The calculation of the net asset value per Share will only be suspended in circumstances where the underlying data necessary to value the investments of the Company cannot readily, or without undue expenditure, be obtained. Details of any suspension in making such calculations will be announced through a Regulatory Information Service.
At the date of this document, the Company has investments in 40 companies across six sectors, investing £72.5 million, as summarised below.
Beryl designs products which enhance bike safety. Their flagship product is the Laserlight, which projects a laser image onto the ground as featured throughout London's current and forthcoming new Santander Cycle fleet. They launched a new data enabled cycle hire bike in early 2019 that removes the need for the traditional infrastructure and has been installed in Bournemouth, Poole, Hereford and London with approval to launch e‑scooter hire schemes in the near future to aid the COVID-19 transport response.
| Cost | £552,697 |
|---|---|
| Valuation | £1,770,536 |
| Basis of valuation | Last round |
| Equity holding | 4.19% |
Boom Cycle is an indoor cycling concept which offers a fun, high‑intensity cardiovascular workout.
The business currently has five studios based in London (City, Holborn, Hammersmith, Battersea and Waterloo), where they combine indoor spin cycling with various exercise classes for both upper and lower body work‑outs. They have this year secured a contract to produce the digital content for an at-home digital spin company Apex. Boom Cycle is one of the foremost dedicated spinning studios in London, and is intent on replicating the success of some of the larger players in the US. Following closure due to the pandemic, Boom has now opened up Battersea, with Waterloo due to open in the first week of September. The company budgeted and had cash to see it through to 2021 without re‑opening any sites.
| Cost | £3,106,439 |
|---|---|
| Valuation | £2,586,644 |
| Basis of valuation | Multiples |
| Equity holding | 44.21% |
KX Gym, founded in 2002, is a private members' gym and spa, which includes a restaurant and clubroom, located in Chelsea, London. KX offers members an exclusive holistic approach to wellbeing, incorporating fitness, diet and relaxation. The gym has fully re‑opened following its forced closure due to the pandemic having put in place measures to ensure it is COVID-secure.
| Cost | £700,000 |
|---|---|
| Valuation | £1,284,831 |
| Basis of valuation | Multiples |
| Equity holding | 11.76% |
KX Urban (KX U) is a pay-as-you-go development of the established KX luxury gym brand. It offers a range of gym classes including Hiit & Run, BodyBarre, yoga, boxing and spinning within a high quality gym environment with a healthy food and beverage offering. The gym has fully re‑opened following its forced closure due to the pandemic having put in place measures to ensure it is COVID-secure and classes are filling up again as clients return to London.
| Cost | £1,034,114 |
|---|---|
| Valuation | £971,228 |
| Basis of valuation | Fair value |
| Equity holding | 10.27% |
Lyma was founded in February 2017 with an aspiration to develop a luxury wellness brand. The company worked closely with industry experts and the world's leading nutritional scientists, combining intensive R&D with the latest technological advances to produce a unique and high‑quality, evidence‑based nutritional supplement. Lyma has seen sales increase during the pandemic as people have focused on health.
| Cost | £1,549,993 |
|---|---|
| Valuation | £2,759,398 |
| Basis of valuation | Multiples |
| Equity holding | 14.50% |
Thriva is a proactive healthcare service, which offers at-home blood tests for a range of health markers such as Vitamin B12, Vitamin D, liver function, folate and iron. Consumers receive the testing kit in the post, and use the apparatus included to take a blood sample via a simple pinprick. The sample is sent to the lab in a return envelope; results are NHS-grade and available within 48 hours. They also have a range of supplements they can recommend and sell to you based on your test results.
| Cost | £1,329,558 |
|---|---|
| Valuation | £1,600,993 |
| Basis of valuation | Multiples |
| Equity holding | 5.64% |
Plenish, founded in 2012, is one of the leading providers supermarket in the UK and is a fast growing product category. They launched a new range of flavoured grab-and-go nut milk bottles in early 2019. They also offer cold pressed juices in the UK, offering 100% raw
| Cost | £3,395,499 |
|---|---|
| Valuation | £9,249,270 |
| Basis of valuation | Multiples |
| Equity holding | 37.73% |
Five Guys was founded in 1986 in the US. The company serves a range of hand made burgers made with fresh locally sourced beef and cooked on a grill, along with fresh cut fries, served with unlimited toppings. It now has over 100 outlets in the UK with the estate now close to reaching maturity. The company was able to keep some stores open during the pandemic providing delivery only and has since re‑opened all its stores in a COVID-secure way.
| Cost | £2,083,200 |
|---|---|
| Valuation | £7,280,177 |
| Basis of valuation | Multiples |
| Equity holding | 4.24% |
Chucs Bar & Grill is a restaurant concept reflecting the style and branding of the Italian Riviera. The first restaurant opened on Dover Street in Mayfair, London in 2014 and has since expanded to two more in Westbourne Grove and Belgravia. Chucs now also has two cafes in the family, Kensington and Chelsea. The chain was forced to close during the pandemic and had to undergo an emergency fundraise which Pembroke was unable to participate in due to HMRC limits having been reached. The company has however, since re‑opened its sites and trade is up on last summer as people take advantage of the good weather and the eat‑out to help-out scheme.
29
| Cost | £2,220,000 |
|---|---|
| Valuation | £2,220,000 |
| Basis of valuation | Multiples |
| Equity holding | 25.00% |
Second Home offers flexible and modern office space for fast growing technology firms and creative businesses. Combining architectural design with first class amenities, Second Home provides users with an impressive office environment in which to locate their business for the short, medium and long term. The company now has sites in London, Lisbon and Los Angeles.
| Cost | £1,485,096 |
|---|---|
| Valuation | £466,523 |
| Basis of valuation | Multiples |
| Equity holding | 3.21% |
Sourced Market, launched in 2007, is a retail, café and restaurant concept that offers a curated selection of locally sourced fresh produce replicating the products and ambience found at a farmers' market. The company's flagship site at St Pancras International in King's Cross has been complemented by two further sites; one in Barbican and a second opening in September 2020 at MSA Extras new flagship service station at Leeds Skelton.
| Cost | £5,796,767 |
|---|---|
| Valuation | £5,144,112 |
| Basis of valuation | Multiples |
| Equity holding | 46.08% |
Secret Food Tours is a rapidly growing food and beverage tour company that has developed a scalable and profitable approach to global expansion. Its flagship events centre on high‑end food tours, culinary events and nightlife tours. The company operates in 58 top‑tier cities across four continents. COVID-19 has mothballed the tours being operated and the company has pivoted to providing online tours. It is currently awaiting clearance to re‑open and has cash to see it through to 2021.
| Cost | £1,000,206 |
|---|---|
| Valuation | £1,859,890 |
| Basis of valuation | Multiples |
| Equity holding | 9.09% |
Rubies in the Rubble was founded in 2012 and produces sustainable condiments. Every Rubies product makes use of otherwise discarded ingredients: aesthetically rejected fruit and vegetables, or under‑utilised by‑products of food production. They have focussed on the out‑of‑home market, whilst also being stocked in leading supermarkets. Their range includes mayo, relishes and a ketchup that contains 3x more fruit and 50% less sugar than competitors.
| Cost | £250,099 |
|---|---|
| Valuation | £107,235 |
| Basis of valuation | Multiples |
| Equity holding | 3.38% |
Hackney Gelato is a new investment in the year that was established in 2015 by two chefs. The brand has quickly become a leading supplier to high‑end London restaurants, as well as The company was able to pivot from supplying restaurants during COVID-19 to increasing production for retailers like Ocado who saw their online and instore sales increase.
NEW
| Cost | £1,000,141 |
|---|---|
| Valuation | £1,000,141 |
| Basis of valuation | Cost |
| Equity holding | 17.39% |
Founded in 2016, Pasta Evangelists sells quality fresh, created and sold over 200 pasta recipes since launch, with bestsellers including the pappardelle with wild tortelloni. They have kiosks in Harrods, two large M&S stores and sell online direct from their website. The company saw a significant spike in sales over COVID-19 as people started dining in as opposed to dining out.
| Cost | £2,000,000 | |
|---|---|---|
| Valuation | £2,000,000 | |
| Basis of valuation | Cost | |
| Equity holding | 12.12% |
32
N Nursery & Family Club is a 7‑day‑a‑week neighbourhood club, which offers a nursery (N Nursery) during the week and a family club space (N Family Club) at weekends. N Nursery & Family Club is open 51 weeks, closing only between Christmas and New Year, to provide parents with a flexible offering, the nursery is open from 7.00 a.m. to 7.00 p.m. The company was fully insured for COVID-19 and as such, was able to offer parents a reduction of 90% of the fees whilst it was closed. Sites have now re‑opened as children come back to Nursery.
Kinteract is a digital education platform that enables collaboration between teachers, students and parents, and provides guidance to aid child development. It is aimed at those in the early years and schooling sector, both in the UK and internationally. Kinteract is delivered through a simple and elegant interface on desktop, tablet and mobile versions, and allows practitioners, parents and students to record events linked to their learning and development in a collaborative way.
| Cost | £1,250,016 |
|---|---|
| Valuation | £1,336,872 |
| Basis of valuation | Last round |
| Equity holding | 23.25% |
33
Stitch & Story, founded in 2012, sells a range of knitting kits, equipment and yarns accompanied by a range of online tutorial videos to teach viewers knitting techniques. Stitch & Story sells its products mainly in the UK, both online and through third‑party retailers such as John Lewis, Liberty, Fenwick and Amazon, alongside over 100 boutique gift stores nationwide; it also sells its kits to customers in the US via its website. The company had to temporarily close during the pandemic as its orders were so high it was struggling to fulfil them in a timely manner. The company has since moved to a new third-party logistics provider that is able to meet a much increased demand.
| Cost | £1,999,998 |
|---|---|
| Valuation | £3,175,104 |
| Basis of valuation | Multiples |
| Equity holding | 26.00% |
ToucanTech was founded in November 2013 and launched in October 2016 by successful entrepreneurs Kate Jillings and Sian Morley‑Smith, who previously founded and exited graduate management education platform BusinessBecause.com. ToucanTech is a software‑as‑a‑service (SaaS) CRM and website‑builder used by schools, charities and companies to run their communities. It allows organisations to manage marketing, fundraising, alumni communications and events in one easy‑to‑use, vertically integrated platform.
| Cost | £1,000,000 |
|---|---|
| Valuation | £1,000,000 |
| Basis of valuation | Cost |
| Equity holding | 12.15% |
34
Kat Maconie, founded in 2008, designs and manufactures distinctive ladies' boots and shoes which are sold online, in department stores and in boutiques globally. In Summer 2017 the company collaborated with a Korean cosmetics major, resulting in significant launch of the Kat Maconie make-up range in 2019. The company opened its first retail concept store in Bermondsey in early 2019, for shopping and women's beauty treatments.
| Cost | £1,850,000 |
|---|---|
| Valuation | £3,889,786 |
| Basis of valuation | Last round |
| Equity holding | 26.05% |
Troubadour Goods is a London‑based luxury men's and women's accessories brand specialising in designing and creating superior handcrafted leather and textile goods. They launched a wider more affordable range in 2019 which has increased their market presence.
| Cost | £1,490,000 |
|---|---|
| Valuation | £1,434,844 |
| Basis of valuation | Multiples |
| Equity holding | 37.20% |
Bella Freud is a fashion designer producing a range of high‑end men's and women's clothing and homeware, focusing on knitwear. Currently her products are available at her own flagship store on Chilton Street in London, online and through a range of luxury boutiques and department stores in the UK, and around the world.
| Cost | £2,738,082 |
|---|---|
| Valuation | £4,490,371 |
| Basis of valuation | Multiples |
| Equity holding | 42.47% |
ME+EM, founded in 2008, is a contemporary womenswear brand founded by Clare Hornby, designing and producing its collections primarily through catalogues and online, with two retail sites in Connaught Street, Bayswater and Elizabeth Street, Belgravia. The range now consists of dresses, knitwear, denim, separates and accessories. The brand targets women aged 30-55 who are busy and fashion conscious, offering a classic aesthetic embodying designer quality at an affordable price.
| Cost | £889,646 |
|---|---|
| Valuation | £5,195,128 |
| Basis of valuation | Multiples |
| Equity holding | 12.81% |
The iconic model and designer, launched her own fashion label in May 2017. It offers accessible luxury womenswear and has already achieved substantial first season wholesale orders. It will produce four in‑season collections per year internationally, with stockists in more than 15 countries.
| Cost | £3,732,588 |
|---|---|
| Valuation | £2,372,043 |
| Basis of valuation | Multiples |
| Equity holding | 24.80% |
Established in 2015, Heist is a premium hosiery manufacturer that seeks to redefine how tights can feel and wear. It launched its first shape-wear item, the Outerbody, in Autumn 2018 to rave reviews and positive customer reviews selling out its first batch ahead of schedule.
| Cost | £4,248,514 |
|---|---|
| Valuation | £1,883,184 |
| Basis of valuation | Multiples |
| Equity holding | 22.73% |
PlayerLayer designs and manufactures customised sports kit for universities, sports clubs and schools. Since it was founded in 2008, it has become a leader in the premium education market providing clothing for some of the top schools, universities and professional clubs.
| Cost | £3,501,413 |
|---|---|
| Valuation | £3,208,588 |
| Basis of valuation | Multiples |
| Equity holding | 14.28% |
Recognised as a significant worldwide media group serving the superyacht industry, Boat International Media provides information and data services across traditional print, digital media and high‑quality events. The company continues to innovate and in 2019 launched Boat Pro, a superyacht database leveraging its large collection of information on superyachts and the industry.
| Cost | £3,250,000 |
|---|---|
| Valuation | £4,952,999 |
| Basis of valuation | Multiples |
| Equity holding | 21.60% |
Stillking Films is a prolific producer of commercials, TV series, feature films and music videos. The company has created commercials for almost all Dow Jones and FTSE advertisers. They have co-produced a number of successful feature films, including Casino Royale, Narnia, Mission Impossible 4 and The Bourne Identity, and created music videos for artists including Beyoncé, Kanye West, Blur, Madonna and One Direction.
| Cost | £1,451,770 |
|---|---|
| Valuation | £2,345,516 |
| Basis of valuation | Multiples |
| Equity holding | 4.96% |
Popsa is a photobook app that, through the use of proprietary machine learning algorithms, has reduced the time it takes for customers to produce photobooks from two hours to an average of just six minutes. Popsa operates in a £5 billion global industry that has been built on a clunky and frustrating process by automating the selection of a customer's most relevant photos, Popsa's disruptive software removes this frustration and offers an easy-to-use customer experience.
| Cost | £4,400,003 |
|---|---|
| Valuation | £7,726,774 |
| Basis of valuation | Multiples |
| Equity holding | 14.16% |
Roto VR's flagship product is an interactive virtual reality (VR) chair, which has been developed over a three‑year period. It syncs what users feel with what they see, a phenomenon known as gravitational presence. It does this by auto‑rotating wherever the user looks – this is achieved by incorporating accelerometers, gyroscopes and magnetometers inside the Roto Headtracker, a small device that clips on to the user's own VR headset.
| Cost | £1,000,000 |
|---|---|
| Valuation | £1,071,160 |
| Basis of valuation | Multiples |
| Equity holding | 13.16% |
Rated People, founded in 2005, is one of the UK's leading online marketplaces for homeowners to find tradesmen for home improvement work. The company recently secured new funding to grow its market presence and marketed adverts on television.
| £641,218 |
|---|
| £1,264,791 |
| Multiples |
| 1.43% |
Wishi is an innovative fashion technology business that brings together personal styling and online wardrobe management functionality to help fully exploit an individual's current wardrobe and provide new clothing suggestions personalised to their look.
| £153,433 |
|---|
| £153,433 |
| Cost |
| 1.46% |
Unbolted provides a platform for peer‑to‑peer secured lending, offering short‑term liquidity to individuals seeking bridging facilities, or advance sale loans for personal or small business use. In late 2019 they launched a mortgage product to compliment their existing asset back lending product.
| Cost | £400,009 |
|---|---|
| Valuation | £500,108 |
| Basis of valuation | Last round |
| Equity holding | 5.33% |
Stylindex is a platform that helps content producers find the best models, creative talent, and production resources for photoshoots, videos, and events. Stylindex's cloud‑based platform allows brand teams to manage shoots and assets in one place and manage the whole process of media asset creation, right down to billing, rights allocation and embargos.
| £663,269 |
|---|
| £694,365 |
| Cost |
| 6.42% |
Founded in 2014, HotelMap is a worldwide platform for managing hotel bookings exclusively for business events such as conferences, professional congresses, conventions and trade shows. The company seeks to exploit advantages associated with hotel booking for business events by creating a completely autonomous on‑demand platform. HotelMap aims to become the dominant global brand in the sector, enabling the platform to aggregate huge buying power with hotel suppliers as a result of its ability to manoeuvre the world's largest audience of business event delegates to HotelMap's official hotels.
| Cost | £1,500,000 |
|---|---|
| Valuation | £1,500,000 |
| Basis of valuation | Cost |
| Equity holding | 5.24% |
Founded in July 2015, Floom is a curated global marketplace platform for independent florists; its mission is to become the primary destination for customers looking to send flowers worldwide. It also encompasses FloomX which provides a complete back office function for independent florists to make their work more streamlined, efficient and ultimately enjoyable.
| Cost | £2,415,000 |
|---|---|
| Valuation | £2,228,436 |
| Basis of valuation | Last round |
| Equity holding | 21.79% |
The cost figures and valuations set out on pages 18 and 19 and 25 to 41 as at 31 March 2020 are audited (or, in the case of later investments or follow‑on investments since that date, at cost (unaudited)), and have been provided by the Manager (see paragraph 6.20 of Part 4).
La Bottega and Chilango are currently in the portfolio but are not included above as they are in an administration process, but are included in the detailed information on page 19.
The following case study from the Pembroke portfolio is intended to provide indicative information as to the type of investment the Manager might consider alongside the rationale and investment structures used for the investment. The following represents one of the Qualifying Investments from the Company's portfolio. The valuation is unaudited and provided by the Manager.
Plenish, founded in 2012, is one of the leading providers of nut milks that are now stocked in all but one major supermarket in the UK and is a fast growing product category. They launched a new range of flavoured grab and go nut milk bottles in early 2019. They also offer cold pressed juices in the UK, offering 100% raw organic (unpasteurised) juice.
The investment has been structured primarily as equity, with a small debt component.
| Initial investment: | June 2013 |
|---|---|
| Investment cost: | £3,395,499 |
| Equity acquired: | 37.73% |
| Fair value at 31 March 2020: | £9,249,270 |
| Board seat: | Yes |
| Valuation uplift: | +172% |
Pembroke Investment Managers LLP, which is authorised and regulated by the Financial Conduct Authority to conduct investment business, is the manager of the Company under the terms of an investment management agreement entered into on 15 February 2013, novated to the Manager on 1 July 2014 and varied on 3 October 2014, 1 December 2017 and 16 July 2020 (the "IMA"). Pursuant to the IMA, the Manager provides discretionary and advisory investment management services to the Company in respect of its portfolio of investments. The Manager acts as the Alternative Investment Fund Manager to the Company.
The Manager provides services in accordance with the IMA for which it receives a management fee of 2% of the Company's NAV. The Manager also contributes to, and caps the Annual Running Costs of the Company, such that they will not exceed £350,000 whilst the NAV remains below £100 million. If the NAV exceeds £100 million the cap increases to £500,000.
In the year to 31 March 2020 the total expense to NAV ratio was 0.6% and is expected to be less than 0.4% in the year to 31 March 2021. In the event of a full subscription of £40 million the total expense to NAV ratio is expected to be approximately 0.3%.
Unlike many other VCTs, the Manager does not take any arrangement fees, monitoring fees or exit fees from the Company or from any of the portfolio companies. To align themselves with investors, the Manager does not take any performance incentive fees until the conditions set out below have been met.
As is customary in the venture capital industry, the Manager will be incentivised with a Performance Fee to align the interests of the Manager and Shareholders.
Generally under the VCT Rules, a VCT must distribute by way of dividend such amount as to ensure that it retains not more than 15% of its income from shares and securities. The Directors aim to maximise tax free distributions to Shareholders by way of dividends paid out of income received and from capital gains received following successful realisations, subject to the requirements and best interests of the Company. All distributions are expected to be free of UK income tax to individuals aged 18 or over who acquire their shares within the annual £200,000 limit.
The B Ordinary Shares will target an annual dividend of 3 pence per B Ordinary Share and will also aim to pay special dividends where significant realisations occur from the sale of its portfolio assets. However, this is a target, and no forecast or projection should be implied or inferred.
| Payment date | Amount paid |
|---|---|
| September 2014 | 3.0p |
| October 2015 | 0.6p |
| October 2016 | 2.0p |
| June 2017 | 1.0p |
| October 2018 | 3.0p |
| October 2019 | 3.0p |
| Payment date | Amount paid |
|---|---|
| October 2016 | 2.0p |
| June 2017 | 1.0p |
| October 2017 | 2.0p |
| October 2018 | 3.0p |
| October 2019 | 3.0p |
It is proposed that a dividend of 3 pence per B Ordinary Share will be paid to holders of B Ordinary Shares in respect of the year ended 31 March 2020.
Although it is anticipated that the Shares will be admitted to the premium segment of the Official List and to trading on the London Stock Exchange's market for listed securities, there is likely to be an illiquid market and in such circumstances Shareholders may find it difficult to sell their Shares in the market. In order to try to improve the liquidity in the Shares, the Company intends to operate a share buy‑back policy, subject to authority from Shareholders, the Listing Rules and the Company having the necessary cash resources and distributable reserves available for the purchase. The Company may repurchase shares which Shareholders wish to sell, at a discount of no more than 5% to net asset value per Share, less transaction costs payable. Any purchase of Shares will be at the discretion of the Board who must believe it to be in the best interests of the Company at the relevant time. Shares bought back by the Company may be cancelled or held in treasury for later sale in the market. Shares disposed which have not been held for five years are considered for tax purposes to be a disposal and, therefore, subject to clawback by HMRC of any upfront income tax reliefs obtained on subscription. Shareholders should seek professional advice in relation to any disposal of Shares. The Company has an authority to buy back up to 14.99% of its B Ordinary Shares. Investors should note that tax relief on subscriptions for shares in a VCT is restricted where an investor has disposed of shares in that VCT within six months (before or after) that subscription and that a disposal of Shares to the Company within these periods could, therefore, put their income tax relief at risk.
The Directors believe that communication with Shareholders is important. In addition to announcements being released through a Regulatory Information Service, Shareholders will receive a copy of the Company's annual report and accounts (expected to be published in July each year) and a copy of the Company's interim results (expected to be published in December each year).
The UK Corporate Governance Code (the "Code") published by the Financial Reporting Council in July 2018 applies to the Company. The Directors note that the Code acknowledges that it does not set out a rigid set of rules and that some provisions may have less relevance for investment companies and, in particular, consider some areas inappropriate due to the size and nature of the business of the Company.
Accordingly, the Company will comply with all the provisions of the Code save that (i) the Company does not conduct on an annual basis a formal review as to whether there is a need for an internal audit function, as the Directors do not consider that an internal audit would be an appropriate control for a
venture capital trust, (ii) as all the Directors are non‑executive, it is not considered appropriate to appoint a nomination or remuneration committee and in light of the responsibilities delegated to the Manager, its VCT status adviser and Company Secretary, the Company has not appointed a chief executive, deputy chairman or a senior independent non‑executive Director and (iii) in view of its non‑executive nature, to ensure continuity of experience amongst members of a small Board and the requirement under the Articles that all Directors are subject to election by Shareholders at the first annual general meeting after their appointment and thereafter at every third annual general meeting, the Board considers that it is not appropriate for the Directors to be subject to annual re‑election or appointed for a fixed term.
In light of the responsibilities retained by the Board and the Audit Committee and of the responsibilities delegated to the Manager, Philip Hare & Associates LLP and the Company Secretary, the Company has not appointed a chief executive, deputy chairman or a senior independent non‑executive director.
The Company is unregulated although VCTs need to meet a number of conditions set out in tax legislation in order for tax reliefs to apply.
The Directors intend to manage the Company's affairs in order that it continues to comply with the legislation applicable to VCTs. In this regard Philip Hare & Associates LLP has been appointed to advise on tax matters generally and, in particular, on VCT status. HM Revenue & Customs has granted the Company approval as a VCT, and Philip Hare & Associates LLP will assist the Manager (but report directly to the Board) in monitoring compliance with the VCT requirements. The Company must continue to satisfy the requirements of HMRC in relation to VCTs, or it is likely to lose its VCT approval. The Company has received confirmation that the B Ordinary Shares will be regarded as VCT eligible shares. Tax legislation in the Investor's home state may have an impact on the income received from the B Ordinary Shares.
Given the changes made to the VCT Rules in 2015 and the consequent shortage of 'evergreen' VCTs unaffected by the new rules, the Directors sought, and were granted, Shareholder approval to extend the life of the Company on a rolling basis (such that it became 'evergreen' with no fixed termination date). However, the Directors intend to keep under review whether it is in the best interest of Shareholders for the Company to continue on a rolling basis.
46
The costs of the Offer to be met by the Company will be:
The Promoter Fee is calculated on the value of each application for B Ordinary Shares under the Offer accepted by the Company as follows:
or such lower percentage in each case as may be agreed by the Board and the Manager. The Manager will pay all other costs of the Offer, including the cost of Bonus Shares, from the Promoter Fee.
It is proposed to raise in aggregate up to £40 million by means of the Offer, being the principal offer of £20 million and the over‑allotment facility of a further £20 million which may be utilised at the Board's discretion where it believes it is in the best interests of the Company to do so. Subscription amounts are payable in full, by cheque or banker's draft or electronic transfer, on subscription. The Offer will open on 3 September 2020 and it is expected to remain open until 3.00 p.m. on 1 April 2021 in relation to the 2020/2021 tax year, and until 3.00 p.m. on 30 June 2021 in relation to the 2021/2022 tax year. The Offer may close in advance of these dates in the event that the maximum subscription is reached. The closing date of the Offer, and the deadline for receipt of applications for the final allotment with respect to the 2021/2022 offer, may be extended by the Directors at their absolute discretion to a date no later than 2 September 2021.
Investors must ensure that any subscriptions in relation to the 2020/2021 tax year, and cleared funds in respect of those subscriptions, are received before 3.00 p.m. on 1 April 2021 and that subscriptions in relation to the 2021/2022 tax year, and cleared funds in respect of those subscriptions made by separate cheque, bank transfer or banker's draft, are received before 3.00 p.m. on the closing date of the Offer.
The Offer is not underwritten. The maximum net proceeds of the Offer, assuming full subscription and a Promoter Fee on all such subscriptions of 5.5% (including the over‑allotment facility) will be £37.8 million. There is no minimum aggregate subscription below which the Offer will not proceed. The Promoter Fee is based on the value of accepted applications for B Ordinary Shares under the Offer.
The profile of a typical Investor is a UK tax resident individual who seeks a venture capital strategy focused on capital appreciation with sufficient income and capital available to be able to commit an investment in the Company for over five years and who is attracted by the income tax relief available for a VCT investment. Investors may include retail, institutional and sophisticated investors and high net‑worth individuals (however, the decision to invest may be influenced by the availability of tax reliefs to such an Investor).
Applications will be accepted on a "first come, first served" basis (provided cheques are not post‑dated), subject always to the discretion of the Directors. If the Offer is over‑subscribed (or over‑subscribed after use of the over‑allotment facility), an Applicant's application may be rejected or may be accepted for fewer B Ordinary Shares than the number actually applied for. In these cases, the amount paid on application, or the balance, will be returned, without interest, by cheque sent through the post at the Applicant's risk to the address stated in the Applicant's Application Form. Investors are, therefore, encouraged to submit their Application Forms early in order to be confident that their subscriptions will be successful. Multiple applications are permitted.
The minimum application level under the Offer is £5,000. The maximum aggregate investment in all VCTs in any one tax year on which tax relief is available is £200,000 per Investor (spouses have separate limits and, therefore, together can invest up to £400,000 in aggregate in each tax year).
The Offer may not be withdrawn after dealings in the B Ordinary Shares issued under the Offer have commenced. In the event of any requirement for the Company to publish a supplementary prospectus, Investors who have yet to be entered onto the Company's register of members will be given two business days to withdraw from their subscription. Investors should note, however, that such withdrawal rights are a matter of law that is yet to be tested in the Courts of England and Wales and Investors should, therefore, rely on their own legal advice in this regard.
The full terms and conditions of application are set out in Part 6 of this document, together with an Application Form and details of the application procedure.
The Offer Price will be calculated by reference to the most recently published net asset value of the existing B Ordinary Shares as at the date of allotment, adjusted for any dividend paid or declared (and in respect of which no adjustment has been made to that net asset value) and for the expenses of the Offer charged to Investors, being the Adviser Charge, if any, and Promoter Fee.
The number of B Ordinary Shares to be issued to each Applicant will be calculated based on the following Pricing Formula (rounded down to the nearest whole B Ordinary Share):
| Number of B Ordinary Shares | = | Amount subscribed, less: (i) Promoter Fee1 and (ii) Adviser Charge (if any) |
÷ | Latest published NAV per B Ordinary Share2 |
|
|---|---|---|---|---|---|
| ----------------------------- | --- | -------------------------------------------------------------------------------------- | --- | -------------------------------------------------- | -- |
Less any reduction agreed by the Promoter for any specific investor or group of investors (where applicable).
Adjusted for any dividends paid or declared (and in respect of which no adjustment has been made to that latest published NAV per B Ordinary Share).
Illustrative examples of the number of B Ordinary Shares to be issued to each Applicant under the Pricing Formula (based on a subscription under the Offer of £10,000, a NAV per B Ordinary Share of £1 and no additional Bonus Shares):
| Initial | Adviser Charge (Facilitated) | Number of B Ordinary Shares | |
|---|---|---|---|
| (i) | 5.5% | N/A | (10,000 – 550 – 0) ÷ 1 = 9,450 |
| (ii) | 3.0% | 2.25% | (10,000 – 300 – 225) ÷ 1 = 9,475 |
| (iii) 3.0% | 4.5% | (10,000 – 300 – 450) ÷ 1 = 9,250 |
It should be noted that the example Adviser Charges set out above have been provided to illustrate the pricing of the Offer and should not be considered as a recommendation as to the appropriate levels of Adviser Charges.
1
Application has been made to the FCA for the B Ordinary Shares to be issued pursuant to the Offer to be admitted to the premium listing on the Official List and will be made to the London Stock Exchange for those B Ordinary Shares to be admitted to trading on its main market for listed securities.
It is intended that allotments of B Ordinary Shares under the Offer will be made every 4‑6 weeks during the Offer. Successful applicants will be notified by post or email.
It is expected that the Admission of B Ordinary Shares will become effective, and that trading in those B Ordinary Shares will commence, within ten Business Days of their allotment.
B Ordinary Shares will be issued in registered form, will be freely transferable in both certificated and uncertificated form and are not redeemable. It is anticipated that definitive share certificates will be issued within ten Business Days of each allotment.
B Ordinary Shares will be capable of being transferred by means of the CREST system. Investors who wish to take account of the ability to trade their B Ordinary Shares in uncertificated form (and who have access to a CREST account) may arrange through their professional adviser to convert their holding into dematerialised form.
An initial commission of up to 2.5% of the amount subscribed may be payable where there is an execution‑only transaction and no advice has been provided by the Intermediary to the Investor or where the Intermediary has demonstrated to the Promoter that the Investor is a Professional Client of the Intermediary. Payment of the initial commission is the Manager's responsibility and is payable out of the Promoter Fee.
Additionally, provided that the Intermediary continues to act for the Investor and the Investor continues to be the beneficial owner of the B Ordinary Shares, and subject to applicable laws, regulations and FCA rules, the Company reserves the right to agree trail commission with Intermediaries on an individual basis up to 0.375% of the net asset value of a B Ordinary Share at the end of each financial year commencing in 2021, for a period of up to six years. Trail commission is payable by the Company.
Commission is not permitted to be paid to Intermediaries who provide a personal recommendation to UK retail clients on investments in VCTs. Instead of commission being paid by the Company, a fee will usually be agreed between the Intermediary and Investor for the advice and related services ("Adviser Charge"). This fee can either be paid directly by the Investor to the Intermediary, when it will not form part of an Investor's subscription amount, or the payment of such fee, up to an amount not exceeding 4.5% of the amount subscribed by the Investor, may be facilitated from the Investor's funds received by the Company and when it will form part of an Investor's subscription amount. If the payment of the Adviser Charge is to be facilitated by the Company, then the Investor is required to specify the amount of the charge on the Application Form (see Section 7). The Investor will be issued fewer B Ordinary Shares (to the equivalent value of the Adviser Charge) through the Pricing Formula. The Adviser Charge is inclusive of VAT, if applicable.
Income tax relief should be available on the total amount subscribed, subject to VCT regulations and personal circumstances.
The following is a summary of the tax benefits available to VCTs and their individual Shareholders who are either Qualifying Subscribers or Qualifying Purchasers.
The tax treatment of Investors in VCTs will depend on their individual circumstances. Investors who are in any doubt as to their tax position are recommended to take professional advice.
A number of tax benefits are available to individuals, aged 18 or over, who invest in shares in a VCT. The tax benefits available to those individuals are different, depending on whether the individual subscribes for shares or acquires shares otherwise than by way of subscription. There is also a limit (the Qualifying Limit) on the amount which, in any tax year, an individual may invest in VCTs which will qualify for any tax benefits. The current limit is £200,000 in any one tax year. It is, therefore, possible to invest £400,000 with an investment of £200,000 before 6 April 2021 for the tax year 2020/2021 and £200,000 on or after 6 April 2021 for the tax year 2021/2022. Spouses have separate limits and each, therefore, has an annual limit of £200,000 meaning that together spouses may invest up to £400,000 per tax year in aggregate, or up to £800,000 in aggregate over two tax years.
Investments in ordinary shares in VCTs in excess of the Qualifying Limit will not be eligible for any tax benefits. Set out below is a summary of the tax benefits available to Qualifying Subscribers and Qualifying Purchasers.
The tax relief is available on aggregate investments in VCTs of up to £200,000 in any one tax year. Where advantage is taken of this relief, a Qualifying Subscriber will be able to obtain total initial tax relief of up to 30% of the amount of his/her investment, as shown in the table below.
Maximum effect of initial tax relief
| No VCT tax relief | 30% income tax relief | |
|---|---|---|
| Initial investment | £100,000 | £100,000 |
| 30% income tax relief | – | (£30,000) |
| Effective current cost of the investment | £100,000 | £70,000 |
Relief from income tax up to 30% will be available on subscriptions for shares in a VCT, subject to the Qualifying Limit (currently £200,000 in each tax year). The relief, which will be available in the year of subscription, cannot exceed the amount which reduces the income tax liability of the Qualifying Subscriber in that year to nil. Relief may not be available if there is a loan linked with the investment.
Relief will not be available, or, where given, will be withdrawn, either in whole or in part, where there is any disposal (except on death) of the shares (or of an interest in them or right over them) before the end of the period of five years beginning with the date on which the shares were issued to the Qualifying Subscriber.
With effect from 6 April 2014 income tax relief is not available in respect of a subscription for shares in a VCT where the investor has sold shares in that VCT and the sale was conditional upon the subscription, or the subscription was conditional upon the sale, or the subscription was made within six months of the sale (before or after). This will also have effect in relation to a subscription for shares in a VCT which is deemed to be a successor or predecessor of the VCT because there has been a merger of VCTs, or a restructuring of a group of companies of which the VCT is a member, where it was known at the time of the subscription that the VCTs were expected to merge. The measure will not affect subscriptions for shares where the monies being subscribed represent dividends which the investor has elected to reinvest.
The tax reliefs below are only available on investments up to a maximum of £200,000 in VCTs in any one tax year.
Any gain or loss accruing to Qualifying Subscribers or Qualifying Purchasers on a disposal of shares in a company which was a VCT at the time he, or she, acquired the shares, and remained a VCT throughout his, or her, period of ownership, will neither be a chargeable gain, nor an allowable loss, for the purposes of capital gains tax.
Dividend income will be exempt from tax. No tax credits will be repayable in respect of dividends paid.
All Qualifying Subscribers will automatically be provided with certificates enabling them to claim income tax relief. The certificate will specify details of the Shareholder, the date on which the shares were issued and the amount paid for the shares, and also will also certify that the shares have been issued to a Qualifying Subscriber, and that certain other conditions are met to the best of the VCT's knowledge and belief. The relief may not be available unless the Qualifying Subscriber holds such a certificate.
The investor may use the certificate to claim income tax relief either by obtaining from HMRC an adjustment to his/her tax coding under the PAYE system or by waiting until the end of the tax year and using a Self Assessment Tax Return to claim the relief.
Dividends received on shares acquired in VCTs up to the qualifying maximum value of £200,000 per tax year need not be shown in the investor's Self Assessment Tax Return.
The following is a summary of the tax consequences for VCTs and their shareholders resulting from a loss of VCT status.
Exemption from corporation tax on chargeable gains will not be available in relation to any gain realised after the VCT status is lost (and on any gain realised by the VCT if approval is deemed never to have been given).
Where VCT approval is treated as never having been given, or where it is withdrawn before the shares have been held for five years, the relief will be withdrawn in full, and the Qualifying Subscriber will be assessed to tax in the tax year in which the relief was given on an amount equal to that relief. Interest on overdue tax may arise.
Dividend income will not be exempt from tax if the dividend is paid in respect of profits or gains arising or accruing in any accounting period in which the VCT is not approved as such.
Where VCT approval is treated as never having been given, any gains and losses arising on a disposal of shares in the VCT will be taxable and allowable in the ordinary way. Where VCT approval is withdrawn at any time (whether or not the shares have been held for five years), the Qualifying Subscriber or the Qualifying Purchaser will be treated as having disposed of his/her shares immediately before the VCT ceased to be approved, for an amount equal to their market value at that time, and as having immediately reacquired them at that value. Thus, any capital gain up to that date will be exempt from tax, but any gains arising after that date will be taxable in the ordinary way.
The information in this Part 2 is based on existing legislation, including taxation legislation. The tax legislation of the UK and of any other jurisdiction to which an Investor is subject may have an impact on the income received from the securities. The tax reliefs described are those currently available. Levels and bases of, and relief from taxation are subject to change and such change could be retrospective.
The company's first commercial sale must be no more than seven years before the VCT's investment (ten years for a Knowledge Intensive Company) prior to the date of investment, except where previous Risk Finance State Aid was received by the company within those seven years or where the company is entering a new market and a turnover test is satisfied. Funds received from an investment by a VCT cannot be used to acquire another existing business or trade.
Qualifying Investments are limited to aggregate investments of £5 million in the 12 months ending on the date of the investment (from 6 April 2018, £10 million for a Knowledge Intensive Company) and £12 million in total (£20 million for a Knowledge Intensive Company).
The information in this Part 3 is based on existing legislation, which may change and which change could be retrospective.
52
Subject to any disenfranchisement as provided in paragraph 3.2.4 below and subject to any special terms as to voting on which any shares may be issued, on a show of hands every member present in person (or being a corporation, present by an authorised representative) shall have one vote and, on a poll, every member who is present in person or by proxy shall have one vote for every share of which he is the holder. The shares shall rank pari passu as to rights to attend and vote at any general meeting of the Company.
Subject to paragraph 3.2.13 below, the Shares are in registered form and will be freely transferable. All transfers of Shares must be effected by a transfer in writing in any usual form or any other form approved by the Directors. The instrument of transfer of a Share shall be executed by or on behalf of the transferor and, in the case of a partly paid share by or on behalf of the transferee. The Directors may refuse to register any transfer of a partly paid Share, provided that such refusal does not prevent dealings taking place on an open and proper basis and may also refuse to register any instrument of transfer unless:
The Company may in general meeting by ordinary resolution declare dividends in accordance with the respective rights of the members, provided that no dividend shall be payable in excess of the amount recommended by the Directors. The Directors may pay such interim dividends as appear to them to be justified. No dividend or other monies payable in respect of a Share shall bear interest as against the Company. There are no fixed dates on which entitlement to a dividend arises.
All dividends unclaimed for a period of six years after being declared or becoming due for payment shall be forfeited and shall revert to the Company.
If any member or other person appearing to be interested in Shares of the Company is in default in supplying within 42 days (or 28 days where the Shares represent at least 0.25% of its share capital) after the date of service of a notice requiring such member or other person to supply to the Company in writing all or any such information as is referred to in Section 793 of the CA 2006, the Directors may, for such period as the default shall continue, impose restrictions upon the relevant Shares.
The restrictions available are the suspension of voting or other rights conferred by membership in relation to meetings of the Company in respect of the relevant Shares and additionally in the case of a Shareholder representing at least 0.25% by nominal value of any class of Shares of the Company then in issue, the withholding of payment of any dividends on, and the restriction of transfer of, the relevant Shares.
On a winding‑up, any surplus assets of the Company will be divided amongst the holders of its Shares according to the respective numbers of Shares held by them in the Company and in accordance with the provisions of the CA 2006, subject to the rights of any Shares which may be issued with special rights or privileges. The Articles of Association provide that the liquidator may, with the sanction of a resolution and any other sanction required by the CA 2006, divide amongst the members in specie the whole or any part of the assets of the Company in such manner as he may determine.
Whenever the capital of the Company is divided into different classes of Shares, the rights attached to any class may (unless otherwise provided by the terms of issue of that class) be varied or abrogated either with the consent in writing of the holders of not less than three‑fourths of the nominal amount of the issued Shares of the class or with the sanction of a resolution passed at a separate meeting of such holders.
Unless and until otherwise determined by the Company in general meeting, the number of Directors shall not be less than two or more than ten. The continuing Directors may act notwithstanding any vacancy in their body, provided that if the number of the Directors be less than the prescribed minimum the remaining Director or Directors shall forthwith appoint an additional Director or additional Directors to make up such minimum or shall convene a general meeting of the Company for the purpose of making such appointment.
Any Director may in writing under his hand appoint (a) any other Director, or (b) any other person who is approved by the Board of Directors to be his alternate. A Director may at any time revoke the appointment of an alternate appointed by him. Every person acting as an alternate Director shall be an officer of the Company, and shall alone be responsible to the Company for his own acts and defaults, and he shall not be deemed to be the agent of or for the Director appointing him.
Subject to the provisions of the CA 2006, the Directors may from time to time appoint one or more of their body to be Managing Director or Joint Managing Directors of the Company or to hold such other executive office in relation to the management of the business of the Company as they may decide.
A Director of the Company may continue or become a director or other officer, servant or member of any company promoted by the Company or in which it may be interested as a vendor shareholder, or otherwise, and no such Director shall be accountable for any remuneration or other benefits derived as director or other officer, servant or member of such company.
The Directors may from time to time appoint a president of the Company (who need not be a Director of the Company) and may determine his duties and remuneration and the period for which he is to hold office.
The Directors may from time to time provide for the management and transaction of the affairs of the Company in any specified locality, whether at home or abroad, in such manner as they think fit.
3.2.9.4 When proposals are under consideration concerning the appointment of two or more Directors to offices or employment with the Company or any company in which the Company is interested, the proposals may be divided and considered in relation to each Director separately and (if not otherwise precluded from voting) each of the Directors concerned shall be entitled to vote and be counted in the quorum in respect of each resolution except that concerning his own appointment.
A Director shall also retire from office at or before the third annual general meeting following the annual general meeting at which he last retired and was re‑elected. A retiring Director shall be eligible for re‑election. A Director shall be capable of being appointed or re‑appointed a Director despite having attained any particular age.
Subject as provided below, the Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital.
The Company's power to borrow money is subject to the aggregate principal amount outstanding not exceeding 25% of the value of the adjusted capital and reserves of the Company (being, in summary, the aggregate of the issued share capital, plus any amount standing to the credit of the Company's reserves, deducting any distributions declared and intangible assets and adjusting for any variations to the above since the date of the relevant balance sheet). The test shall be the aggregate principal amount outstanding at the time of borrowing rather than from time to time.
CREST, a paperless settlement system enabling securities to be evidenced otherwise than by a certificate and transferred otherwise than by a written instrument, was introduced in July 1996. The Articles are consistent with CREST membership and allow for the holding and transfer of Shares in uncertificated form pursuant to the Uncertificated Securities Regulations 2001. The new B Ordinary Shares to be issued under the Offers have been made eligible for settlement in CREST.
Annual general meetings shall be held at such time and place as may be determined by the Directors and not more than fifteen months shall elapse between the date of one annual general meeting and that of the next.
The Directors may, whenever they think fit, convene a general meeting of the Company, and general meetings shall also be convened on such requisition or in default may be convened by such requisitions as are provided by the CA 2006. Any meeting convened by requisitions shall be convened in the same manner as near to as possible as that in which meetings are to be convened by the Directors.
An annual general meeting shall be called by not less than twenty‑one days' notice in writing, and all other general meetings of the Company shall be called by not less than fourteen days' notice in writing. The notice shall be exclusive of the day on which it is given and of the day of the meeting and shall specify the place, the day and hour of meeting, and in case of special business the general nature of such business. The notice shall be given to the members, other than those who, under the provisions of the articles or the terms of issue of the Shares they hold, are not entitled to receive notice from the Company, to the Directors and to the auditor. A notice calling an annual general meeting shall specify the meeting as such and the notice convening a meeting to pass a Special Resolution or an Ordinary Resolution as the case may be shall specify the intention to propose the resolution as such.
In every notice calling a meeting of the Company or any class of the members of the Company there shall appear with reasonable prominence a statement that a member entitled to attend and vote is entitled to appoint one or more proxies to attend and, on a poll, vote instead of him, and that a proxy need not also be a member of the Company.
If within 30 minutes of the time appointed for the meeting a quorum is not present, the meeting, if convened by or upon the requisition of members, shall be dissolved. In any other case it shall stand adjourned to such time (being not less than 14 days and not more than 28 days hence) and at such place as the Chairman shall appoint. At any such adjourned meeting the member or members present in person or by proxy and entitled to vote shall have power to decide upon all matters which could properly have been disposed of at the meeting from which the adjournment took place.
The Company shall give not less than ten clear days' notice of any meeting adjourned for the want of a quorum and the notice shall state that the member or members present as aforesaid shall form a quorum.
The Chairman may, with the consent of the meeting (and shall, if so directed by the meeting) adjourn any meeting from time to time and from place to place. No business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.
| Director | Current | Number of B Ordinary shares Following Offer |
Current | % of B Ordinary shares in issue Following Offer |
|---|---|---|---|---|
| Jonathan Djanogly | 75,992 | 75,992 | 0.08% | 0.06% |
| Laurence Blackall | 307,942 | 307,942 | 0.30% | 0.23% |
| David Till | 238,664 | 324,353 | 0.24% | 0.24% |
All the B Ordinary Shares have the same rights relative to each other and there are no different rights attaching to the Shares held by the Directors.
4.10 During the five years immediately prior to the date of this document, the Directors have been members of the administrative, management or supervising bodies or parties of the companies and partnerships specified below (excluding subsidiaries of any company of which he is also a member of the administrative, management or supervisory body):
| Current directorships and partnership interests | Previous directorships and partnership interests |
|---|---|
| Jonathan Djanogly 2 & 3 Angel Court Management Company Limited CGLV Limited Pembroke VCT plc The Djanogly Family LLP |
|
| Laurence Blackall Cybertrends Limited Double Digit Media Limited Hypersonica Limited Manoir Hotels Limited* Pembroke VCT plc |
EXMS 11 Limited (dissolved) Blackweir Inns Limited (dissolved) Colourweir Inns Limited (dissolved) Send for Help Limited Shadeweir Inns Limited (dissolved) Whiteweir Inns Limited (dissolved) Flora Park General Partner Limited (dissolved) Oakley Capital Investments Limited |
| David Till D.C. Nominees Limited Kearsley Nominees Limited Duncan Clark Limited LPEC Limited SPP Wombwell Limited 6D UK Lease Limited KX Cafe UK Limited KX Holdings Limited KX Spa UK Limited KXDNA Limited KX Gym UK Limited BF 55 Limited BGM 55 Limited BGE 55 Limited Oakley Capital Management Limited XWDP Limited Pembroke Investment Managers LLP Pembroke Managers Limited JP‑UK Limited Boat Bidco Limited Boat International Group Limited KX Group Holding Limited Oakley Advisory Limited Ocean Family Foundation KX U Limited Lechlade Capital Limited Oakley Capital Interests Limited |
KX Chelsea Limited (dissolved) SPP Residential (General Partner) Limited (dissolved) KX Covent Garden Limited (dissolved) Stonehill Founder Shares Corporate Member Limited (dissolved) Janlex Advisers Corporate Member Limited (dissolved) Broadstone Financial Planning Limited (dissolved) Fitzwilliam Asset Management Limited (dissolved) Profounders Capital Limited (dissolved) Oakley Capital 5th Floor Limited (dissolved) EXMS 11 Limited (dissolved) JP‑UK Delivery Limited (dissolved) MDR Business Solutions Limited (dissolved) Healthy & Eatali Limited Principia Investment Management Limited BPI 55 Limited Penfield Inc Limited Broadstone Corporate Benefits Limited Broadstone Risk & Healthcare Limited Damoco Bidco Limited Damoco Holdco Limited Damoco Midco Limited Emplane Limited (dissolved) Freedom4 Limited (dissolved) EXMSG Limited (dissolved) Oakley Capital 8th Floor Limited (dissolved) Flora Park General Partner Limited (dissolved)* |
| Palmer Capital LLP Oakley Capital Limited |
HEIG (UK) Limited SPP (General Partner) Limited continues over |
* In solvent liquidation
** In solvent liquidation prior to dissolution
| Current directorships and partnership interests | Previous directorships and partnership interests |
|---|---|
| David Till (continued) Palmer Capital Associates Limited Oakley Capital Partners LLP Pembroke VCT plc Temeraire Capital Limited Oakley Capital GmbH Oakley Capital Investments Limited VVX (Bermuda) Limited Chucs Restaurants Limited KX International Holdings Limited Oakley Capital I Limited Oakley Capital III FM Limited Oakley Capital (Bermuda) Limited Oakley Capital Founder Member Limited Oakley Capital FM GP II Limited Palmer Capital Associates International Limited Palmer Capital Associates Investments Limited Lancaster Management (Jersey) Limited Peter Dubens Foundation LPEQ Limited The Royal Anglian Regiment Benevolent Charity |
|
4.19 The audit committee of the Company (the "Committee") comprises Laurence Blackall (Chairman) and Jonathan Djanogly and meets at least twice a year. The Company's auditor may be required to attend such meetings. The Committee shall prepare a report each year addressed to the Shareholders for inclusion in the Company's annual report and accounts. The duties of the Committee are, inter alia:
4.19.1 to review and approve the interim and annual results of the Company and the statutory accounts before submission to the Board;
The following constitutes a summary of the principal contents of each material contract entered into by the Company, otherwise than in the ordinary course of business, in the two years immediately preceding the date of this document, or any other contract which contain any provision under which the Company has an obligation or entitlement which is material to the Company as at the date of this document:
5.1 Offer Agreement – Offer
Under an offer agreement dated 3 September 2020 and made between the Company (1), the Directors (2), Howard Kennedy (3) and the Manager (4), Howard Kennedy agreed to act as sponsor to the Offer and the Manager undertook as agent of the Company to use its reasonable endeavours to procure subscribers under the Offer. The Company will be entitled to any interest earned on subscription monies prior to the allotment of B Ordinary Shares under the Offer. Under the Offer Agreement, the Manager will be paid a Promoter Fee of (i) 5.5% for Investors who have invested directly into the Company or invested through an Intermediary/platform and have not received advice and (ii) 3.0% for Investors; who have invested in the Offer through an Intermediary and have received upfront advice including Investors who are investing through Intermediaries/advisers using financial platforms, or such lower percentage in each case as may be agreed by the Board and the Manager.
The Manager will pay all costs and expenses of or incidental to the Offer and Admission, excluding any annual trail commission but including commission payable to the Distributor. Total initial costs payable by the Company under the Offer Agreement are limited to 5.5% of the gross proceeds of the Offer.
Under the Offer Agreement, which may be terminated by the parties in certain circumstances, the Manager, the Company and the Directors have given certain warranties and indemnities. Warranty claims must be made by no later than 60 days after the date of the publication of the audited accounts of the Company for the accounting year ending 31 March 2022. The warranties and indemnities are in usual form for a contract of this type and the warranties are subject to limits in aggregate of £2,000,000 (or 10% of gross funds raised under the Offer (whichever is higher)) for the Manager, £10,000 for Jonathan Djanogly and £7,500 for each of the other Directors. The Company has also agreed to indemnify Howard Kennedy in respect of its role as sponsor and under the Offer Agreement. The Offer Agreement may be terminated, inter alia, if any material statement in the Prospectus is untrue, any material omission from the Prospectus arises or any material breach of warranty occurs.
Under an offer agreement dated 2 September 2019 (the "2019 Offer Agreement") and made between the Company (1), the Directors (2), Howard Kennedy (3) and the Manager (4), Howard Kennedy agreed to act as sponsor to the 2019 Offer and the Manager undertook as agent of the Company to use its reasonable endeavours to procure subscribers under the 2019 Offer. The Company was entitled to any interest earned on subscription monies prior to the allotment of B Ordinary Shares under the 2019 Offer. Under the 2019 Offer Agreement, the Manager was paid a promoter fee of 3.5% of the value of each application under the 2019 Offer accepted by the Company.
The Manager paid all costs and expenses of or incidental to the 2019 Offer and admission, excluding any annual trail commission but including commission paid to the Distributor. Total initial costs paid by the Company under the 2019 Offer Agreement were limited to 3.5% of the gross proceeds of the 2019 Offer.
Under the 2019 Offer Agreement, which could be terminated by the parties in certain circumstances, the Manager, the Company and the Directors gave certain warranties and indemnities. Warranty claims must be made by no later than 60 days after the date of the publication of the audited accounts of the Company for the accounting year ending 31 March 2021. The warranties and indemnities were in usual form for a contract of this type and the warranties were subject to limits of £2,000,000 (or 70% of gross funds raised under the 2019 Offer (whichever is higher)) for the Manager and one‑half year's director's fees for each Director. The Company also agreed to indemnify Howard Kennedy in respect of its role as sponsor and under the 2019 Offer Agreement. The 2019 Offer Agreement could be terminated, inter alia, if any material statement in the prospectus relating to the 2019 Offer was untrue, any material omission from that prospectus arose or any material breach of warranty occurred.
Under an offer agreement dated 29 August 2018 (the "2018 Offer Agreement") and made between the Company (1), the Directors (2), Howard Kennedy (3) and the Manager (4), Howard Kennedy agreed to act as sponsor to the 2018 Offer and the Manager undertook as agent of the Company to use its reasonable endeavours to procure subscribers under the 2018 Offer. The Company was entitled to any interest earned on subscription monies prior to the allotment of B Ordinary Shares under the 2018 Offer. Under the 2018 Offer Agreement, the Manager was paid a promoter fee of 3.5% of the value of each application under the 2018 Offer accepted by the Company.
The Manager paid all costs and expenses of or incidental to the 2018 Offer and admission, excluding any annual trail commission but including commission paid to the Distributor. Total initial costs paid by the Company under the 2018 Offer Agreement were limited to 3.5% of the gross proceeds of the 2018 Offer.
Under the 2018 Offer Agreement, which could be terminated by the parties in certain circumstances, the Manager, the Company and the Directors gave certain warranties and indemnities. Warranty claims must be made by no later than 60 days after the date of the publication of the audited accounts of the Company for the accounting year ending 31 March 2020. The warranties and indemnities were in usual form for a contract of this type and the warranties were subject to limits of £2,000,000 (or 70% of gross funds raised under the 2018 Offer (whichever is higher)) for the Manager and one‑half year's director's fees for each Director. The Company also agreed to indemnify Howard Kennedy in respect of its role as sponsor and under the 2018 Offer Agreement. The 2018 Offer Agreement could be terminated, inter alia, if any material statement in the prospectus relating to the 2018 Offer was untrue, any material omission from that prospectus arose or any material breach of warranty occurred.
Under an offer agreement dated 1 December 2017 and made between the Company (1), the Directors (2), the Sponsor (3), the Manager (4), Oakley (5) and Kin Capital (6), the Sponsor agreed to act as sponsor to the 2017 Offer and Oakley and Kin Capital undertook as agents of the Company to use their respective reasonable endeavours to procure subscribers under the 2017 Offer. The Company was entitled to any interest earned on subscription monies prior to the allotment of B Ordinary Shares. Under the offer agreement, with the exception of those investors who made applications under the 2017 Offer that were received on or before 5 p.m. on 12 January 2018 ("2017 Early Applications") (see below), Oakley was paid a promoter fee of 2.5% on accepted applications under the 2017 Offer (where it is not required to pay commission to an Intermediary). If Oakley was required to pay commission to an Intermediary, Oakley was paid a promoter fee of 5.5% on accepted applications.
In the case of investors who made 2017 Early Applications (with no Intermediary commission), Oakley received a promoter fee of 1.5% on any applications except those through direct investments (which attracted a promoter fee of 3.0%).
Oakley agreed to pay all costs and expenses of or incidental to the 2017 Offer and admission of B Ordinary Shares issued under the 2017 Offer including commission payable to Kin Capital. The Company paid a promoter fee on the value of each application for B Ordinary Shares accepted by the Company. Total initial costs payable by the Company under the offer agreement were limited to 5.5% of the gross proceeds of the 2017 Offer.
Under the offer agreement, which may be terminated by the parties in certain circumstances, the Manager, Oakley, Kin Capital, the Company and the Directors gave certain warranties and indemnities. Warranty claims must be made by no later than 60 days after the date of the publication of the audited accounts of the Company for the accounting year ending 31 March 2019. The warranties and indemnities were in usual form for a contract of this type and the warranties were subject to limits of £100,000 for Oakley, £100,000 for Kin Capital and £2,000,000 (or 70% of gross funds raised under the 2017 Offer (whichever is higher)) for the Manager and one half‑year's director's fees for each Director. The Company also agreed to indemnify the Sponsor in respect of its role as sponsor and under the offer agreement. The offer agreement may be terminated, inter alia, if any material statement in the prospectus relating to the 2017 Offer was untrue, any material omission from that prospectus arose or any material breach of warranty occurred.
Under an offer agreement dated 30 November 2016 made between the Company (1), the Directors (2), the Sponsor (3), the Manager (4), Oakley (5) and Kin Capital (6), the Sponsor agreed to act as sponsor to the 2016 Offer and Oakley and Kin Capital undertook as agents of the Company to use their respective reasonable endeavours to procure subscribers under the 2016 Offer. The Company was entitled to any interest earned on subscription monies prior to the allotment of B Ordinary Shares. Under this offer agreement, the Company paid Oakley a commission of either 2% or 5% of the aggregate value of accepted applications for B Ordinary Shares received pursuant to the 2016 Offer.
Oakley paid all costs and expenses of or incidental to the 2016 Offer and subsequent admission of B Ordinary Shares including commission payable to Kin Capital. The Company paid a promoter fee on the value of each application for B Ordinary Shares accepted by the Company under the 2016 Offer. Total initial costs payable by the Company under the offer agreement were limited to 5% of the gross proceeds of the 2016 Offer.
Under this offer agreement, which could be terminated by the parties in certain circumstances, the Manager, Oakley, Kin Capital, the Company and the Directors gave certain warranties and indemnities. Warranty claims must be made by no later than 60 days after the date of the publication of the audited accounts of the Company for the accounting year ending 31 March 2019. The warranties and indemnities were in usual form for a contract of this type and the warranties were subject to limits of £100,000 for Oakley, £100,000 for Kin Capital and £2,000,000 (or 70% of gross funds raised
under the 2016 Offer (whichever is higher)) for the Manager and one half‑year's director's fees for each Director. The Company also agreed to indemnify the Sponsor in respect of its role as sponsor and under the offer agreement. The offer agreement could be terminated, inter alia, if any material statement in the prospectus relating to the 2016 Offer was untrue, any material omission from that prospectus arose or any material breach of warranty occurred.
An agreement (the "IMA") dated 15 February 2013 and made between the Company and the Original Manager whereby the Original Manager agreed to provide discretionary investment management and advisory services to the Company in respect of its portfolio of Qualifying Investments and Non‑Qualifying Investments. On 1 July 2014 the IMA was novated to the Manager and on 3 October 2014, 1 December 2017 and 16 July 2020 the IMA was varied.
The Manager has agreed to act as Alternative Investment Fund Manager to the Company.
The Manager has agreed with the Company that it will indemnify the Company if the total Annual Running Costs of the Company are more than 2% of net asset value. Otherwise the Manager will receive an annual management fee only if, and to the extent that, the Annual Running Costs (disregarding any annual management fee payable) amount to less than 2% of the Company's NAV. In such a case the management fee (exclusive of VAT) will be payable quarterly. The Manager is also entitled to reimbursement of expenses incurred in performing its obligations.
The Manager will also receive a performance fee as follows:
The Manager is entitled to receive and retain entirely for its own use and benefit all other transaction fees, directors' fees, monitoring fees, consultancy fees, corporate finance fees, introductory fees, syndication fees, exit fees, commissions and refunds of commission received by the Manager in connection with the management of the investment portfolio of the Company.
Pursuant to the IMA, the Manager will provide custodian services to the Company and will hold the assets in the name of the Company The Company or the Manager (as applicable) may, under the IMA, enter into a separate direct agreement with a custodian or depositary (as applicable) for the provision to the Company or the Manager (as applicable) of custody or depositary services (as applicable) relating to the Company's assets. The terms of such an agreement will regulate, inter alia
As at the date of the Prospectus neither the Company nor the Manager has entered into a separate direct agreement with a custodian or depositary and the Manager is the only custodian in respect of the Company's investments.
The appointment will continue until terminated on 12 months' notice in writing given by either party at any time after 16 April 2023, although the Manager will have the benefit of a five year term in relation to any new funds raised by the Company after the 2019 Offer (and any investments acquired from such funds), with the term in relation to those funds/investments reverting to a rolling term with termination on one‑year's notice by either the Company or the Manager after the expiry of the relevant five year period. The IMA is subject to earlier termination by either party in certain circumstances.
When conflicts occur between the Manager and the Company because of other activities and relationships of the Manager, the Manager will ensure that the Company receives fair treatment. Such conflicts will be disclosed to the Company.
The Manager may make investments on behalf of the Company in collective investment vehicles of which it is manager or in companies where the Manager has been involved in the provision of services to those companies and may receive commissions, benefits, charges or advantage from so acting.
Any fees arising in connection with investments made by the Company in Oakley Funds (if any) will be discharged by the Manager. There will be no duplication of fees in such situations.
On 1 December 2017, the Manager and the Company entered into a further amendment agreement to the IMA providing that the definition of Annual Running Costs be amended so that it also excludes auditors' fees, administration, accounting and company secretarial costs, share registrars' fees, London Stock Exchange fees, printing and mailing costs in respect of the year end audited accounts, interim accounts and circulars to Shareholders, fees in respect of regulatory announcements made through a Regulatory Information Service, corporate broking fees, insurance premiums, and remuneration of the Board (including employers' national insurance contributions) where the aggregate of such fees in any rolling period of 12 months, for such time as the Net Asset Value of the Company is £100,000,000 or less, is less than £350,000 and, for such time as the Net Asset Value of the Company exceeds £100,000,000, is less than £500,000.
Each of Jonathan Djanogly and Laurence Blackall has entered into an agreement with the Company dated 15 February 2013, and David Till has entered into an agreement with the Company dated 28 August 2018, as referred to in paragraph 4.8 above, whereby he is required to devote such time to the affairs of the Company as the Board reasonably requires consistent with his role as non‑executive Director. Under the letters of appointment the Chairman of the Company was entitled to receive an annual fee of £20,000 and each other Director an annual fee of £15,000. From 1 April 2020 the fees of Jonathan Djanogly and Laurence Blackall were increased to £30,000 and £25,000 per annum respectively in accordance with the terms of their respective agreements and David Till agreed to waive his fee from 1 April 2020. Each party can terminate the relevant agreement by giving to the others at least three months' notice in writing to expire at any time on or after the date 15 months from the respective commencement date of the letter. In respect of the last reporting period to 31 March 2020, Jonathan Djanogly received £20,000, Laurence Blackall received £15,000 and David Till received £15,000.
An agreement dated 15 February 2013 (as varied on 3 October 2014) and made between the Company and The City Partnership (UK) Limited (the "Administrator") whereby the Administrator provides certain administration, accounting and company secretarial services to the Company in respect of the period from admission of the former Ordinary Shares until the termination of the Administration Agreement. Further to an amendment agreement entered into between the Company and the Administrator on 3 October 2014, following the launch of the Initial B Share Offer the annual fee was increased to take into account the creation of the B Ordinary Share class (with it being agreed that the annual fee would be based upon gross funds raised by the Company under all of its offers). The administration fee is currently charged at a rate of £82,275 per annum (subject to increase by an amount equal to 0.05% of any further funds raised by the Company in any future share issues), plus VAT at the relevant rate. The annual fee is payable quarterly in advance and increases annually in line with RPI.
The Administration Agreement is terminable by either party giving six months' written notice, on or after the initial one‑year period, but subject to early termination in certain circumstances.
promoters and none is intended to be paid or given.
6.8 The Offer is not underwritten. The expenses of and incidental to the Offer and the listing of the B Ordinary Shares including registration and listing fees, printing, advertising and distribution costs, legal and accounting fees and expenses will be payable by the Manager on the terms set out in the Offer Agreement. If the maximum of £20 million is raised under the Offer (with the over‑allotment facility not being utilised and a Promoter Fee of 5.5% on all such subscriptions) the net proceeds will amount to £18.9 million. If the over‑allotment facility is utilised, and the maximum of £40 million is raised, the net proceeds will amount to £37.8 million.
6.9 Save in connection with the Offer, B Ordinary Shares have not been marketed to and are not available to the public. Market makers will be offered the opportunity to subscribe for B Ordinary Shares under the Offer.
| Shareholders' equity | £ |
|---|---|
| Called up share capital | 994,667 |
| Legal reserve (share premium account) | 89,510,054 |
| Other reserves (includes revenue reserve) | 19,631,184 |
| Total | 110,135,905 |
There has been no material change in the capitalisation of the Company since 31 July 2020.
The Company's auditor is BDO LLP, registered auditor, of 55 Baker Street, London W1U 7EU and regulated by the Institute of Chartered Accountants in England and Wales and was appointed auditor of the Company on 12 December 2019. The Company's auditor from its incorporation until 11 December 2019 was Grant Thornton UK LLP, 30 Finsbury Square, London EC2P 2YU.
The financial information in relation to the Company contained in the following section of this Part 4 has been extracted without material adjustment from the audited statutory accounts of the Company for the period ended 31 March 2020 (the "Reporting Period") and, in respect of these statutory accounts, the Company's auditor made an unqualified report under Section 495, Section 496 and Section 497 of the CA 2006 and which has been delivered to the Registrar of Companies and such accounts did not contain any statements under Section 498(2) or (3) of the CA 2006, as applicable.
The statutory accounts of the Company for the period ended 31 March 2020 were prepared under Financial Reporting Standard 102.
The audited statutory accounts for the Reporting Period contain descriptions of the Company's financial condition, changes in financial condition and results of operation for the Reporting Period and the pages referred to below are being incorporated by reference.
Where only certain parts of a document are incorporated by reference, the non‑incorporated parts are either not relevant for an Investor or covered elsewhere in the Prospectus.
The information in the audited statutory accounts of the Company for the Reporting Period that is being incorporated by reference includes the following:
| Nature of information | 31 March 2020 |
|---|---|
| Income statement | Page 53 |
| Reconciliation of movements in shareholders' funds | n/a |
| Statement of changes in equity | Pages 56‑57 |
| Balance sheet | Pages 54‑55 |
| Cash flow statement | Pages 58‑59 |
| Accounting policies | Pages 61‑63 |
| Notes to the accounts | Pages 61‑72 |
| Independent auditor's reports | Pages 48‑51 |
| Nature of information | 31 March 2020 |
|---|---|
| Chairman's statement | Pages 8‑9 |
| Investment Manager's Review | Pages 12‑13 |
| Statutory Reports | Pages 34‑51 |
Copies of the above statutory accounts are available free of charge at the Company's registered office or from its website, the address of which is http://www.pembrokevct.com/investors. The announcement of these results of the Company is available on the website of the London Stock Exchange at http://www.londonstockexchange.com/exchange/ prices‑and‑markets.
The Company's treasury activities are controlled by the Manager, subject always to the direction and supervision of the Board. Cash and cash equivalents are held only in Sterling and no other currencies. The Company does not have any borrowing. Financial instruments may from time to time be used for hedging purposes as described in more detail in the description of the Company's investment policy. The Company requires liquidity in order to meet its operating costs of which the most significant is the investment management fee. The Company maintains cash reserves suitable to meet its operating commitments.
There has been no significant change in the financial performance of the Company since 31 March 2020 (being the end of the last financial year of the Company for which audited financial information has been published) to the date of this Prospectus.
Save in respect of the sum of £34.5 million raised by the Company under the offer subscription that was launched on 2 September 2019, since 31 March 2020 (being the end of the last financial year of the Company for which audited financial information has been published), there has been no significant change in the financial position of the Company.
The investment portfolio of the Company as at the date of this document is as follows (the valuations being the audited valuations as at 31 March 2020 together with additions to the portfolio since that date shown at cost):
| Total cost | Total valuation | % | |
|---|---|---|---|
| £ | £ | equity | |
| Wellness | |||
| Beryl | 552,697 | 1,770,536 | 4.19 |
| Boom Cycle | 3,106,439 | 2,586,644 | 44.21 |
| KX Gym | 700,000 | 1,284,831 | 11.76 |
| KXU | 1,034,114 | 971,228 | 10.27 |
| Lyma Life | 1,549,993 | 2,759,398 | 14.50 |
| Thriva | 1,329,558 | 1,600,993 | 5.64 |
| Food, Beverage & Hospitality | |||
| Plenish | 3,395,499 | 9,249,270 | 37.73 |
| Chilango | 634,850 | – | 2.88 |
| Five Guys UK | 2,083,200 | 7,280,177 | 4.24 |
| La Bottega | 2,545,022 | – | 87.60 |
| Chucs Bar & Grill | 2,220,000 | 2,220,000 | 25.00 |
| Second Home | 1,485,096 | 466,523 | 3.21 |
| Sourced Market | 5,796,767 | 5,144,112 | 46.08 |
| Secret Food Tour | 1,000,206 | 1,859,890 | 9.09 |
| Rubies in the Rubble | 250,099 | 107,235 | 3.38 |
| Hackney Gelato | 1,000,141 | 1,000,141 | 17.39 |
| Pasta Evangelists | 2,000,000 | 2,000,000 | 12.12 |
| Education | |||
| N Family Club | 3,200,084 | 4,693,919 | 13.54 |
| Kinteract | 1,250,016 | 1,336,872 | 23.25 |
| Stitch & Story | 1,999,998 | 3,175,104 | 26.00 |
| ToucanTech | 1,000,000 | 1,000,000 | 12.15 |
| Design | |||
| Kat Maconie | 1,850,000 | 3,889,786 | 26.05 |
| Troubadour Goods | 1,490,000 | 1,434,844 | 37.20 |
| Bella Freud | 2,738,082 | 4,490,371 | 42.47 |
| ME+EM | 889,646 | 5,195,128 | 12.81 |
| Alexa Chung | 3,732,588 | 2,372,043 | 24.80 |
| Heist | 4,248,514 | 1,883,184 | 22.73 |
| PlayerLayer | 3,501,413 | 3,208,588 | 14.28 |
| Media | |||
| Boat International Media | 3,250,000 | 4,952,999 | 21.60 |
| Stillking Films | 1,451,770 | 2,345,516 | 4.96 |
| Popsa | 4,400,003 | 7,726,774 | 14.16 |
| Roto VR | 1,000,000 | 1,071,160 | 13.16 |
| Digital Services | |||
| Rated People | 641,218 | 1,264,791 | 1.43 |
| Wishi Fashion | 153,433 | 153,433 | 1.46 |
| Unbolted | 400,009 | 500,108 | 5.33 |
| Stylindex | 663,269 | 694,365 | 6.42 |
| HotelMap | 1,500,000 | 1,500,000 | 5.24 |
| Floom | 2,415,000 | 2,228,436 | 21.79 |
| Total | 72,458,725 | 95,418,400 |
Since 31 March 2020, the Company has made further investments totalling £7.3 million, consisting of £1 million into a new investment in ToucanTech and £6.3 million of follow-on investments into PlayerLayer, Bella Freud, N Family Club, Kat Maconie, Sourced Market, Alexa Chung, Stitch & Story, Boom and Pospsa. Since 31 March 2020 the Company has disposed of one investment totalling £1.2 million, consisting of Chucs Ltd that was dissolved.
The City Code on Takeovers and Mergers (the "Code") applies to all takeover and merger transactions in relation to the Company and operates principally to ensure that shareholders are treated fairly and are not denied an opportunity to decide on the merits of a takeover and that shareholders of the same class are afforded equivalent treatment. The Code provides an orderly framework within which takeovers are conducted and the Panel on Takeovers and Mergers has now been placed on a statutory footing. The Takeovers Directive was implemented in the UK in May 2006 and since 6 April 2007 has effect through the CA 2006. The Directive applies to takeovers of companies registered in an EU member state and admitted to trading on a regulated market in the EU or EEA.
The Code is based upon a number of General Principles which are essentially statements of standards of commercial behaviour. General Principle One states that all holders of securities of an offeree company of the same class must be afforded equivalent treatment and if a person acquires control of a company the other holders of securities must be protected. This is reinforced by Rule 9 of the Code which requires that a person, together with persons acting in concert with him, who acquires shares carrying voting rights which amount to 30% or more of the voting rights to make a general offer. "Voting rights" for these purposes means all the voting rights attributable to the share capital of a company which are currently exercisable at a general meeting. A general offer will also be required where a person, who, together with persons acting in concert with him, holds not less than 30% but not more than 50% of the voting rights, acquires additional shares which increase his percentage of the voting rights. Unless the Panel consents, the offer must be made to all other shareholders, be in cash (or have a cash alternative) and cannot be conditional on anything other than the securing of acceptances which will result in the offeror and persons acting in concert with him holding shares carrying more than 50% of the voting rights. There are not in existence any current mandatory takeover bids in relation to the Company.
Section 979 of the CA 2006 provides that if, within certain time limits, an offer is made for the share capital of the Company, the offeror is entitled to acquire compulsorily any remaining shares if it has, by virtue of acceptances of the offer, acquired or unconditionally contracted to acquire not less than 90% in value of the shares to which the offer relates and in a case where the shares to which the offer relates are voting shares, not less than 90%, of the voting rights carried by those shares. The offeror would effect the compulsory acquisition by sending a notice to outstanding shareholders telling them that it will compulsorily acquire their shares and then, six weeks from the date of the notice, pay the consideration for the shares to the relevant Company to hold on trust for the outstanding shareholders. The consideration offered to shareholders whose shares are compulsorily acquired under the CA 2006 must, in general, be the same as the consideration available under the takeover offer.
Section 983 of the CA 2006 permits a minority shareholder to require an offeror to acquire its shares if the offeror has acquired or contracted to acquire shares in a company which amount to not less than 90% in value of all the voting shares in the company and carry not less than 90%, of the voting rights. Certain time limits apply to this entitlement. If a shareholder exercises its rights under these provisions, the offeror is bound to acquire those shares on the terms of the offer or on such other terms as may be agreed.
The Company's memorandum and Articles are available for inspection at the Company's registered office at 3 Cadogan Gate, London SW1X 0AS during normal business hours on any weekday (Saturdays, Sundays and public holidays excepted) from the date of this document until the closing of the Offer.
Dated: 3 September 2020
| "2016 Offer" | the offer for subscription of B Ordinary Shares as described in the prospectus issued by the Company dated 30 November 2016 |
|
|---|---|---|
| "2017 Offer" | the offer for subscription of B Ordinary Shares as described in the prospectus issued by the Company on 1 December 2017 |
|
| "2018 Offer" | the offer for subscription of B Ordinary Shares as described in the prospectus issued by the Company on 29 August 2018 |
|
| "2019 Offer" | the offer for subscription of B Ordinary Shares as described in the prospectus issued by the Company on 2 September 2019 |
|
| "Administration Agreement" | the administration, accounting and company secretarial services agreement between the Company and The City Partnership (UK) Limited dated 15 February 2013 (as amended from time to time) |
|
| "Admission" | the admission of the B Ordinary Shares allotted pursuant to the Offer to the premium segment on the Official List and to trading on the London Stock Exchange's market for listed securities |
|
| "Adviser Charge" | the fee (inclusive of VAT) payable to an Intermediary, agreed with the Investor for the provision of a personal recommendation and/or related services in relation to an investment in B Ordinary Shares under the Offer, and detailed on the Application Form |
|
| "AIM" | AIM, the market of that name operated by the London Stock Exchange | |
| "Annual Running Costs" | the annual costs and expenses incurred by or on behalf of the Company in the ordinary course of its business (excluding (i) management fees payable to the Manager pursuant to the IMA (ii) any performance incentive fees payable pursuant to this agreement and (iii) in any rolling period of 12 months, the lesser of X, as defined in paragraph (a) below, and the aggregate of the items set out in paragraph (b) below), together with any irrecoverable value added tax on those annual costs and expenses. For the purposes of this definition of "Annual Running Costs": (a) X is, for such time as the Net Asset Value of the Company is £100,000,000 or less, £350,000 and, for such time as the Net Asset Value of the Company exceeds £100,000,000, X is £500,000; and (b) the items referred to above are: (i) auditor's fees; (ii) administration, accounting and company secretarial fees; (iii) share registrars' fees; (iv) London Stock Exchange fees; (v) printing and mailing costs in respect of the year end audited accounts, interim accounts and circulars to shareholders; (vi) fees in respect of regulatory announcements made through a Regulatory Information Service; (vii) corporate broking fees; (viii) insurance premiums; and (ix) remuneration of the Board (including employers' national insurance contributions) |
|
| "Applicant" | a person who makes an application under the Offer whether by lodging an Application Form or otherwise in accordance with the Terms and Conditions |
|
| "Application Form" | the application form for use in respect of the Offer set out at the end of this document | |
| "Aquis Stock Exchange" | the market operated by Aquis Exchange plc, registered in England and Wales with company number 07909192 whose registered office is at Palladium House, 1‑4 Argyll Street, London W1F 7LD |
| "Articles" or "Articles of Association" |
the articles of association of the Company (as amended from time to time) |
|---|---|
| "B Ordinary Shares" or "Shares" | B Ordinary shares of 1 pence each in the capital of the Company (and each a "B Ordinary Share" or "Share") |
| "Bonus Shares" | additional B Ordinary Shares to be allotted to certain Investors whose Application Forms are received and accepted within the time periods set out on page 14 of this document |
| "Board" or "Directors" | the board of directors of the Company (and each a "Director") |
| "Business Days" | any day (other than Saturdays, Sundays and public holidays) on which clearing banks are open for normal banking business in Sterling |
| "CA 2006" | Companies Act 2006 (as amended) |
| "Circular" | the circular to Shareholders dated 3 September 2020 |
| "Company" or "Pembroke" | Pembroke VCT plc |
| "Conflicts Policy" | the conflicts policy of the Manager from time to time |
| "DIS" | the dividend investment scheme proposed to be established on the DIS Terms and Conditions |
| "DIS Terms and Conditions" | the terms and conditions relating to the Dividend Investment Scheme set out in Part 7 of this document |
| "Disclosure Guidance & Transparency Rules" |
the disclosure guidance and transparency rules of the FCA |
| "Distributor" | Portlight Limited |
| "EBITDA" | earnings before interest, tax, depreciation and amortisation |
| "EEA States" | the member states of the European Economic Area |
| "EV" | enterprise value |
| "FCA" | the Financial Conduct Authority |
| "FSMA" | the Financial Services and Markets Act 2000 (as amended) |
| "General Meeting" | the general meeting of Shareholders convened by the Company for 30 September 2020 at 9.30 a.m. at 3 Cadogan Gate, London SW1X 0AS (and any adjournment thereof) |
| "HMRC" | Her Majesty's Revenue & Customs |
| "IMA" | the investment management agreement between the Company and the Original Manager dated 15 February 2013 (novated to the Manager on 1 July 2014) and amended on 3 October 2014, 1 December 2017 and 16 July 2020 (as amended from time to time) and as described more fully in Part 4 of this document |
| "Independent Board" | those members of the Board from time to time who are independent of the Manager |
| "Initial B Share Offer" | the offer for subscription of B Ordinary Shares as described in the prospectus issued by the Company dated 3 October 2014 |
| "Intermediary" | a firm who signs the Application Form and whose details are set out in Section 10 of the Application Form |
| "Investors" | individuals aged 18 or over who subscribe for B Ordinary Shares under the Offer (and "Investor" means any one of them) |
|---|---|
| "ITA 2007" | Income Tax Act 2007 (as amended) |
| "Kin Capital" | Kin Capital Limited |
| "Knowledge Intensive Company" | a company satisfying the conditions in Section 331(A) of Part 6 ITA of the proposed draft legislation |
| "Listing Rules" | the listing rules of the FCA |
| "London Stock Exchange" | London Stock Exchange plc |
| "Manager" or "Promoter" | Pembroke Investment Managers LLP, which is authorised and regulated by the FCA |
| "ML Regulations" | The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended) |
| "NAV" or "net asset value" | net asset value |
| "Non‑Qualifying Investments" | the assets of the Company that are not Qualifying Investments |
| "Oakley" | Oakley Capital Limited, which is authorised and regulated by the FCA |
| "Oakley group" | together Oakley Capital Limited, Oakley Capital Management Limited, Pembroke Investment Managers LLP and their associated group of businesses from time to time |
| "Oakley Funds" | any funds managed by the Oakley group from time to time |
| the "Offer" | the offer for subscription for up to £20 million of B Ordinary Shares with an over‑allotment facility for up to a further £20 million of B Ordinary Shares, as described in the Prospectus |
| "Offer Price" | the subscription price for B Ordinary Shares issued under the Offer as set out on pages 46 and 47 |
| "Official List" | the official list of the FCA |
| "Ordinary Share Admission Date" | 16 April 2013, being the date on which the Ordinary Shares were first listed on the premium segment of the Official List and admitted to trading on the London Stock Exchange's main market for listed securities |
| "Ordinary Shares" | the former ordinary shares of 1 pence each in the capital of the Company which were converted into B Ordinary Shares on 26 August 2020 |
| "Original Manager" | Oakley Capital Management Limited |
| "Performance Fee" | the performance related incentive fee payable to the Manager as described on page 44 |
| "Pricing Formula" | mechanism by which the pricing of the Offer may be adjusted according to the latest published NAV, the level of the Promoter Fee and Adviser Charge, as described on page 47 |
| "Professional Client" | a Professional Client (as defined in section 3.5 of the FCA's Conduct of Business Sourcebook) |
| "Promoter Fee" | the fee payable by the Company to the Manager, calculated as a percentage of each Applicant's gross subscription in the Offer |
|---|---|
| "Prospectus" | this document dated 3 September 2020 relating to the Offer |
| "Prospectus Regulation" | Regulation (EU) 2017/1129 |
| "Prospectus Regulation Rules" | the Prospectus Regulation rules of the FCA |
| "Qualifying Company" | a company satisfying the requirements of Chapter 4 of Part 6 of ITA 2007 |
| "Qualifying Investments" | shares in, or securities of, a Qualifying Company held by a VCT which meets the requirements described in Chapter 4 of Part 6 ITA 2007 |
| "Qualifying Limit" | the Investor's subscription limit of £200,000 per tax year |
| "Qualifying Purchaser" | an individual who purchases Shares from an existing Shareholder and is aged 18 or over and satisfies the conditions of eligibility for tax relief available to investors in a VCT |
| "Qualifying Subscriber" | an individual, aged 18 or over, who subscribes for Shares within the Qualifying Limit |
| "Regulatory Information Service" | a regulatory information service that is on the list of regulatory information services maintained by the FCA |
| "Risk Finance State Aid" | State aid received by a company as defined in Section 280B (4) of ITA 2007 |
| "Scheme Administrator" | The City Partnership (UK) Limited, or such other person or persons who may from time to time be appointed by the Company to administer the Dividend Investment Scheme on its behalf |
| "Shareholder" | a holder of Shares |
| "Special Reserve" | the special distributable reserve created by the cancellation of the Company's share premium account on 26 March 2014 |
| "Statutes" | means every statute (including any orders, regulations or other subordinate legislation made under it) from time to time in force concerning companies insofar as it applies to the Company |
| "Sterling" | the lawful currency of the United Kingdom of Great Britain and Northern Ireland |
| "Terms and Conditions" | the terms and conditions of the Offer set out in Part 6 |
| "Total Return" | NAV adjusted for dividend or other distributions, share buy-backs, proceeds on a sale or liquidation of the Company and any other proceeds or value received or deemed to be have been received by Shareholders since 31 March 2020, net of performance incentive fees paid but excluding Performance Fee provisions |
| "unquoted" | private or public companies not quoted on any market or exchange |
| "VCT" or "venture capital trust" | a company satisfying the requirements of Chapter 3 of Part 6 of ITA 2007 for venture capital trusts |
| "VCT Rules" | Part 6 ITA 2007 and every other statute (including any orders, regulations or other subordinate legislation made under them) for the time being in force concerning VCTs |
i) offer to subscribe for the amount specified on your Application Form plus any commission waived for extra shares or any smaller sum for which such application is accepted at the Offer Price, on the terms and subject to the Prospectus, these Terms and Conditions of application and the Articles of the Company;
on any information and representation other than those contained in the Prospectus and you accordingly agree that no person responsible solely or jointly for the Prospectus or any part thereof or involved in the preparation thereof will have any liability for any such other information or representation;
Please read these Terms and Conditions carefully and keep them in case you need to refer to them in the future.
This information should not be regarded as a recommendation to buy or hold Shares in the Company. The value of Shares and the income from them can fall as well as rise and you may not recover the amount of money you invest.
If you are in any doubt about what you should do, you should consult an independent financial adviser. If you have any questions about the Dividend Investment Scheme ("DIS"), you can write to: DIS Administration, The City Partnership (UK) Limited, Suite 2 Park Valley House, Park Valley Mills, Meltham Road, Huddersfield HD4 7BH.
76
Shareholders in any doubt about their tax position should consult their independent professional adviser.
The Scheme Administrator and its agents (including any broker) may effect transactions notwithstanding that they have a direct or indirect material interest or a relationship of any description with another party which may involve a conflict with its duty to DIS participants under the DIS.
The Scheme Administrator is authorised to disclose any information regarding Shareholders or their participation in the DIS to any relevant authority, or as required by such authority, whether by compulsion of law or not. The Scheme Administrator shall not be liable for any disclosure made in good faith provided that the Scheme Administrator believes that such disclosure has been made in accordance with the foregoing requirements.
Each of the provisions of the DIS shall be severable and distinct from one another and if one or more of such provisions is invalid or unenforceable, the remaining provisions shall not in any way be affected.
The Scheme Administrator has procedures to help resolve all complaints from customers effectively. If an Applicant has any complaints about the service provided to him or her or wishes to receive a copy of the Scheme Administrator's complaints procedure, please write to the Scheme Administrator at the address set out in paragraph 13.
This service is a Company sponsored scheme which means that the Scheme Administrator charges the Company a fee which is representative to the costs of operating it. This arrangement means that DIS participants are not charged an annual fee. If an Applicant would like more detail on this arrangement please write to the Scheme Administrator at the address set out in paragraph 13.
The Scheme Administrator will take reasonable care in operating the DIS, and will be responsible to an Applicant for any losses or expenses (including loss of shares) suffered or incurred by him or her as a direct result of breach by the Scheme Administrator of these DIS Terms and Conditions, negligence, wilful default or fraud. The Scheme Administrator does not accept liability for any indirect or consequential loss suffered by an Applicant or for any loss which does not arise as a result of its breach of these DIS Terms and Conditions, negligence, wilful default or fraud.
The Scheme Administrator shall not be responsible for delays or failure to perform any of its obligations due to acts beyond its control. Such acts shall include, but not be limited to, acts of God, strikes, lockout, riots, acts of war, terrorist acts, epidemics, governmental regulations superimposed after the fact, communication line failures, power failure, earthquakes or other disasters.
Any personal data obtained from an Applicant in providing this service will be held by the Scheme Administrator in accordance with the relevant legislation. The Scheme Administrator will only hold, use or otherwise process such personal data of an Applicant as is necessary to provide him or her with the service. The Applicant's details will only be disclosed in accordance with the principles set out in the Data Protection Act 1998:
i) to any person if that person has legal or regulatory powers over the Scheme Administrator; and
ii) to any other person or body in order to facilitate the operation of the DIS.
An Applicant has a right to request to view the personal data that the Scheme Administrator holds on him or her.
All communications between the Scheme Administrator and an Applicant will be conducted in the English language.
These DIS Terms and Conditions are governed by and shall be construed in accordance with the laws of England and Wales.
There is no upper limit on the amount that you can invest in the Company. However, there is a limit on the amount which, in any tax year, you may invest in VCTs which will qualify for any tax reliefs. The current limit is £200,000 in any one tax year. As the Offer spans two tax years (2020/2021 and 2021/2022) on current limits you can subscribe up to a maximum of £400,000. Each spouse has his or her own limit and so together spouses can invest up to £400,000 in respect of each tax year or up to £800,000 in aggregate over two tax years.
The minimum subscription is £5,000 per application (net of any facilitated Adviser Charges).
Cheques should be made payable to "The City Partnership – Pembroke VCT". Please ensure you reference the back of the cheque with a combination of your initial(s) and phone number. Such a reference will allow the Receiving Agent to match your payment with your Application Form more easily.
Yes, to the following account: Account name: The City Partnership – Pembroke VCT Account number: 11010368 Sort code: 80‑22‑60
Please ensure you reference your payment with a combination of your initial(s) and phone number. Such a reference will allow the Receiving Agent to match your payment with your Application Form more easily.
Online applications: Your online application will be submitted directly to the Receiving Agent. Scanned applications by email: You can scan your signed hard copy application form and email it to [email protected]. If you submit a scanned copy, please do NOT send the original hard copy by post.
Postal applications: Your signed Application Form should be sent to The City Partnership (UK) Limited, Suite 2 Park Valley House, Park Valley Mills, Meltham Road, Huddersfield HD4 7BH.
For an allotment into a certificated holding, the Company will dispatch to you within ten Business Days from the allotment date, an allotment letter, a share certificate and an income tax relief certificate.
For an allotment into a dematerialised holding, the Company will dispatch to you, within ten Business Days from the allotment date, an allotment letter and an income tax relief certificate.
The current rate of income tax relief for VCT investors is 30% of the amount invested, so long as you have sufficient income tax payable in the year in which the shares are issued to you to cover the relief. Therefore, depending on your circumstances, you can get a maximum of £60,000 income tax relief per tax year being 30% on subscriptions for shares in VCTs of £200,000 in any tax year.
In order to claim back your tax relief you can write to HMRC and ask them to amend your tax code so you can receive your tax relief via the PAYE system. Alternatively, you can claim the relief in your tax return for the year in which the Shares are issued to you.
You may complete and submit your Application Form online at https://www.pembrokevct.com/current-offer
Payments associated with an online Application Form may be made by electronic transfer, cheque or banker's draft. Please see note 2 below for further details.
Please send the completed Application Form, together with your cheque or banker's draft, by post, or deliver it by hand (during normal business hours), to The City Partnership (UK) Limited, Suite 2 Park Valley House, Park Valley Mills, Meltham Road, Huddersfield HD4 7BH
If you have any questions on how to complete the Application Form please contact The City Partnership (UK) Limited on telephone 01484 240910, or email [email protected], or speak to your financial intermediary.
Payment can be made by electronic transfer, cheque or banker's draft. Your payment must relate solely to this application. If you wish to pay by electronic transfer, please transfer the required funds to:
Account name: The City Partnership – Pembroke VCT Account number: 11010368 Sort code: 80‑22‑60
Please ensure you reference your payment with a combination of your initial(s) and phone number. Such a reference will allow the Receiving Agent to match your payment with your Application Form more easily.
If you are submitting an Application Form by post/hand and wish to pay by cheque or banker's draft, please attach a cheque or banker's draft to the Application Form for the exact amount shown in the Total box in Section 2. Cheques associated with online Application Form submissions should be sent to The City Partnership (UK) Limited, Suite 2 Park Valley House, Park Valley Mills, Meltham Road, Huddersfield HD4 7BH. In either case, your cheque or banker's draft must be made payable to "The City Partnership – Pembroke VCT" and crossed "A/C Payee only". Please ensure you reference the back of the cheque with a combination of your initial(s) and phone number. Such a reference will allow the Receiving Agent to match your payment with your Application Form more easily. Your payment must relate solely to this application. Cheques may be presented for payment on receipt. Application Forms accompanied by a post‑dated cheque will not be processed until the cheque can be presented and will not be treated as being received by the Receiving Agent until that date.
Your electronic transfer, cheque or banker's draft must be drawn in Sterling on an account with a United Kingdom or European Union regulated credit institution, and which is in the sole or joint name of the Applicant and must bear, if a cheque, the appropriate sort code in the top right‑hand corner.
The right is reserved to reject any application in respect of which the Applicant's electronic transfer, cheque or banker's draft has not been cleared on first presentation. Any monies returned will be sent through the post at the risk of the persons entitled thereto by cheque crossed "A/C Payee only" in favour of the Applicant without interest.
If you have any questions, please contact The City Partnership (UK) Limited at email [email protected] or telephone 01484 240910.
Important procedures for applications of at least the Sterling equivalent of €15,000 (for these purposes approximately £13,500, as at the date of this document, or more). The verification of identity requirements in the ML Regulations will apply. By completing this application you consent to the company, or a third party acting on the Company's behalf, undertaking an online identity check, where necessary, for the purposes of the ML regulations. Failure to provide the necessary evidence of identity may result in your application being treated as invalid or result in a delay.
If the amount of your application is for the Sterling equivalent of €15,000 or more (for these purposes approximately £13,500, as at the date of this document) or is one of a series of linked applications, the value of which exceeds that amount then please provide the information set out in A or B below (as appropriate).
Copies should be certified by a solicitor or a bank. Original documents will be returned by post at your risk.
If your Application is made directly (not through a financial intermediary), and suitable AML documentation is received with your Application, then the Receiving Agent will arrange for a third party acting on the Company's behalf to undertake an online identity check for the purposes of the ML Regulations. The Company still reserves the right, however, to request identity documentation if needed.
Application is made through a financial intermediary: verification of the Applicant's identity is provided by the financial intermediary firm through the completion of Section 11.
Or
B
Application is made directly (not through a financial intermediary): Please ensure the following documents are enclosed with the Application Form:
Copies should be certified by a solicitor or a bank. Original documents will be returned by post at your risk.
Before completing this Application Form, please read the Prospectus dated 3 September 2020 including the Terms and Conditions of the Offer and the Notes given in Part 6. If you are at all unsure this Offer is suitable for you, please seek professional advice.
Please complete in full, leaving blank any questions that do not apply to you. If you are a nominee applying on behalf of a block of investors, please do not use this form. Instead, please contact the Receiving Agent for alternative instructions. If you need any help completing this form, please contact The City Partnership (UK) Limited by email at [email protected] or by telephone on 01484 240910.
Payment can be made by electronic transfer, cheque or banker's draft.
Please transfer the required funds to:
| Account name: | The City Partnership – Pembroke VCT |
|---|---|
| Account number: | 11010368 |
| Sort code: | 80‑22‑60 |
| Reference: | Initial(s) and phone number (e.g. JB01484240910) |
Note: Payments need to come from a personal bank account in the Applicant's name (including joint accounts). We do not accept payments from business accounts or third parties, including a spouse.
Please make your cheque or banker's draft payable to "The City Partnership – Pembroke VCT" and cross "A/C Payee only". Reference (mark back of cheque): Initial(s) and phone number (e.g. JB01484240910)
Note: Cheques must be from a personal bank account in the Applicant's name (including joint accounts). We do not accept cheques from business accounts, third parties (including a spouse) or post-dated cheques. Banker's drafts and building society cheques must specifically mention the Applicant's name. Further, please note that funds may require to be cleared prior to allotting, which for cheques, takes six working days after the date of banking.
Once completed, please send this form, along with your cheque or banker's draft, if applicable, to:
The City Partnership (UK) Limited Suite 2 Park Valley House Park Valley Mills Meltham Road Huddersfield HD4 7BH
Deadline for receipt of applications for final allotment in 2020/21 Offer 3.00 p.m. on 1 April 2021 Deadline for receipt of applications for final allotment in 2021/22 Offer 3.00 p.m. on 30 June 2021
Offer opens 3 September 2020
The deadline for receipt of applications is subject to the Offer not being fully subscribed by an earlier date. The closing date of the Offer, and the deadline for receipt of applications for the final allotment in the 2021/22 tax year, may be extended by the Directors at their absolute discretion to a date no later than 2 September 2021.
Please complete this form in BLOCK CAPITALS using black ink and ensure you answer all the questions marked with an asterisk (*).
| Title Forenames |
Surname* |
|---|---|
| Address* | |
| Postcode* | Telephone number* |
| Previous address (if less than three years at current address) |
|
| Date of birth* | National Insurance number* |
| Registered holder ID (CIN) | Are you a US citizen? (Please tick)* Yes No |
Please list below any country(ies), other than the UK, in which you are resident for tax purposes and the relevant Taxpayer Identification Number (TIN)
| Country 1 | TIN 1 |
|---|---|
| Country 2 | TIN 2 |
| Country 3 | TIN 3 |
The minimum subscription per Investor is £5,000 (net of any facilitated Adviser Charges).
I hereby offer to subscribe the following amount(s) in Sterling for new B Ordinary Shares at the Offer Price on the Terms and Conditions of the Offer – if you are not subscribing for one of the tax years, please enter "NIL" in the associated box:
| 2020/2021 Tax year* |
£ |
|---|---|
| 2021/2022 Tax year* |
£ |
| Total* | £ |
Cheque drawn from an account in my own or joint name / Banker's Draft which I have referenced using my initial(s) and the phone number provided in Section 1
Electronic transfer from an account in my own or joint name, which I have referenced using my initial(s) and the phone number provided in Section 1
If you wish that any Offer Shares for which your subscription is accepted are issued to your CREST/non‑CREST nominee, please provide the relevant details below.
| Nominee name | Nominee email |
|---|---|
| Nominee address | |
| Nominee contact name | Nominee contact phone number |
| CREST participant ID | CREST member account ID |
If you would like to receive statutory information from the Company albeit that your shares are to be held in a nominee account please tick the relevant box:
By email to the email address provided in Section 5 By post to the address provided in Section 1
If the amount of your application is less than the Sterling equivalent of €15,000 (for these purposes, approximately £13,500, as at the date of the Prospectus), or is one of a series of linked applications, the value of which is less than that amount, then you do not need to provide further verification of your identity.
If the amount of your application is greater than or equal to the Sterling equivalent of €15,000, (for these purposes, approximately £13,500, as at the date of the Prospectus), or is one of a series of linked applications, the value of which is greater than or equal to that amount, then please provide verification of your identity through:
A: The signed certificate provided in Section 11 of this Application Form
B: The documents enclosed with this Application Form as stated in Section 3B in Notes on the Application Form
By completing and signing this Application Form, you consent to the Company, or a third party acting on the Company's behalf, undertaking an online identity check for the purpose of the ML Regulations where necessary.
Please complete either A OR B below. Dividend payments will be paid directly to your bank account and will not be sent by cheque.
Please provide details below
| Account in name of |
Bank or Building Society name |
|
|---|---|---|
| Sort code | Account number |
Building Society reference or roll number (if applicable) |
If you are existing shareholder in the Dividend Investment Scheme (DIS) and wish to receive future dividends as cash, please tick the box on the right to confirm your withdrawal from the DIS.
By ticking this box I confirm that I wish to participate in the Dividend Investment Scheme and I hereby accept its terms and conditions:
Note: for existing Shareholders the DIS will apply to all share classes currently held within the CIN given in Section 1 of this Application Form. If you have multiple CINs you need to apply separately for each CIN. If you hold your shares in a Nominee you must contact the Nominee to participate in the DIS. If you wish to receive dividends in cash, do not tick this box.
The Company would like to communicate with you electronically in respect of your shareholding in the Company. The Articles of the Company provide authority to use electronic means to convey information to Shareholders, including, but not limited to, sending and supplying documents or information to Shareholders by making them available on a website. This means that you will receive notifications by email (where you have provided an email address below) or by letter that information and/or documents are available on the Company's website.
We will notify you when documents and information are available to access on the website and we will provide you with:
Please complete either A OR B below:
A. Please confirm your agreement to the Company sending or supplying documents and information to you in electronic form by providing your email address for these purposes. If you do not provide an email address in the box below and do not complete B, we are obliged to send you notifications by letter, to the address in Section 1.
| Email address |
|
|---|---|
| OR | |
B. If you would prefer to receive hard copy documents please tick the box here
You have the right to opt out of electronic communication at any time and to revert to paper format by contacting [email protected] or writing to The City Partnership (UK) Ltd, Suite 2 Park Valley House, Park Valley Mills, Meltham Road, Huddersfield HD4 7BH
If you have provided an email address, you shall receive electronic acknowledgement of your application. Otherwise you shall receive a letter.
Please indicate below if you have received financial advice in relation to your application.
Adviser Charge (£) or write "NIL"
If you have agreed an Adviser Charge with your financial intermediary, and do NOT want the Company to facilitate payment of that charge, YOU MUST insert "NIL" below.
If you have agreed an Adviser Charge with your financial intermediary and want the Company to facilitate payment of that fee, please insert the sum to be paid in the box.
The Adviser Charge will be deducted from your subscription so the number of shares issued will reduce accordingly. If the Adviser Charge includes VAT, you may remain liable for the VAT element.
Your personal data will be used by Pembroke Investment Managers LLP, Portlight Limited, The City Partnership (UK) Limited, Pembroke VCT plc and any other third-party advisers or intermediaries to:
Please read our full Privacy Policy at www.pembrokevct.com/privacy-policy
If we rely on your consent as our legal basis for processing your personal information you have the right to withdraw that consent at any time by contacting us by telephone on 0207 766 6900, by email at [email protected] or in writing to Pembroke VCT plc, 3 Cadogan Gate, London SW1X 0AS.
We will not share your data with any other party other than those listed above unless required to do so by law.
By signing this Application Form, I hereby irrevocably declare that:
I have decided to invest on the basis of the information in the Pembroke VCT plc Prospectus and Key Information Document (KID);
| Investor name* (print) |
||
|---|---|---|
| Signature* | Date* |
| Network firm name | Network firm FCA number |
|---|---|
| Financial intermediary firm details | |
| Firm name | Firm FCA number |
| Individual Adviser / Intermediary name |
|
| Individual Adviser / Intermediary FCA number |
Individual Adviser / Intermediary partner reference (if applicable) |
| Administrative contact |
Telephone number |
| Financial intermediary firm address | Postcode |
You will receive from the Receiving Agent an acknowledgement of receipt of your client's application by email sent to the email address you have provided above.
| Account in name of |
Bank or Building Society name |
|||||
|---|---|---|---|---|---|---|
| Sort code | Account number |
|||||
| Building society reference or roll number (if applicable) | Financial intermediary firm fee reference number (if applicable) | |||||
| Finance department email (required for the issue of fee statements)1 |
1 Please note that a £5 charge shall be levied by the Receiving Agent against any financial intermediary firm requesting copies of fee statements that have previously been issued.
Please note – if you have ticked the "I have provided financial advice" box below, you can charge a fee as in Section 7 but you cannot take commission as well.
I have provided financial advice to the applicant, who is not a Professional Client and agreed an up-front Adviser Charge which complies with COBS 6.1a
I have acted in an execution only capacity in respect of this offer or I have provided advice and chosen commission because the applicant is a Professional Client
I agree to waive initial commission – please enter the amount to the right.
Initial commission waived (% of subscription)
By submitting this application form, we, the financial intermediary firm identified in Section 10 above confirm that:
| Name of authorised signatory of financial intermediary firm* (print) |
|||||
|---|---|---|---|---|---|
| Signature* | Date* |
3 Cadogan Gate, London SW1X 0AS
Incorporated in England and Wales with registered number 08307631
PEMBROKEVCT.COM
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