Pre-Annual General Meeting Information • Dec 14, 2012
Pre-Annual General Meeting Information
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to any matter referred to in this document or as to the action you should take, you should seek your own personal financial advice from a stockbroker, bank manager, solicitor, accountant or other independent professional adviser authorised under the Financial Services and Markets Act 2000 if you are resident in the United Kingdom or, if you are not resident in the United Kingdom, from another appropriately authorised independent financial adviser.
If you have sold or otherwise transferred all of your shares in Standard Life European Private Equity Trust PLC (the "Company"), please pass this document, together with the accompanying documents, as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other person who arranged the sale or transfer so they can pass these documents to the person who now holds the shares.
(incorporated and registered in Scotland with registered number SC216638 and registered as an investment company under section 833 of the Companies Act 2006)
Notice of the twelfth annual general meeting of the Company, to be held at The Balmoral Hotel, 1 Princes Street, Edinburgh on 29 January 2013 at 12.30 p.m., is set out in Appendix III (pages 13 to 16) of this document.
A Form of Proxy for use at the Annual General Meeting is enclosed. Whether or not you propose to attend the Annual General Meeting, you are requested to complete and submit the Form of Proxy in accordance with the instructions printed on it. In order to be valid, the Form of Proxy must be received by the Company's registrar, Equiniti Limited, at Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA by 12.30 p.m. on 25 January 2013.
(incorporated and registered in Scotland with registered number SC216638 and registered as an investment company under section 833 of the Companies Act 2006)
Scott Dobbie, CBE (Chairman) 1 George Street Alastair Barbour Edinburgh Edmond Warner EH2 2LL David Warnock Donald Workman
Directors Registered Office
14 December 2012
Dear Shareholder,
I am writing to you to provide details of the Company's twelfth annual general meeting (the "Annual General Meeting" or "AGM") and the Directors' offer to holders of ordinary shares ("Shareholders") to elect to receive all or part of the proposed final dividend (the "Final Dividend") of 2.0p per ordinary share (an "Ordinary Share") in respect of the year ended 30 September 2012 in the form of fully paid new Ordinary Shares ("New Shares") instead of cash (the "Scrip Dividend Option").
The following sections of this document explain the details of these matters and the factors you may wish to consider in reaching your decision on each of them. Your attention is drawn to the section headed "Action to be taken to vote at the Annual General Meeting" on page 5 which sets out the details of the action you should take to cast your vote at the forthcoming AGM and to the section headed "Action to be taken to make an election for the Scrip Dividend Option" on page 6 which sets out the action you should take to receive New Shares instead of cash in respect of the Final Dividend.
The Annual General Meeting will be held at The Balmoral Hotel, 1 Princes Street, Edinburgh on 29 January 2013 at 12.30 p.m.
The formal notice of the Annual General Meeting is set out in Appendix III (pages 13 to 16) of this document.
Resolutions 1 to 10 will be proposed as ordinary resolutions. This means that for each of those resolutions to be passed, more than half of the votes cast must be in favour of the resolution. Resolutions 11 to 14 will be proposed as special resolutions. This means that for each of those resolutions to be passed, at least three-quarters of the votes cast must be in favour of the resolution. Each of these resolutions is being proposed to comply with the Company's Articles of Association and to obtain certain authorities under the Companies Act 2006 from Shareholders.
Shareholders are being asked to receive the audited accounts for the year ended 30 September 2012 together with the associated reports of the Directors and auditors.
Resolution 2 asks Shareholders to approve the Directors' remuneration report for the year ended 30 September 2012.
Shareholders are being asked to approve the Final Dividend of 2.0p per Ordinary Share for the year ended 30 September 2012. If Shareholders approve the recommended Final Dividend, it will be paid on 1 February 2013 to Shareholders on the Company's register of members at the close of business on 4 January 2013 (the "Record Date").
I have served as Chairman since the Company's launch in 2001, and I have intimated to the Board that I will step down as a Director and Chairman at the conclusion of the Annual General Meeting. I will therefore not be standing for re-election.
Each of the Company's other Directors will stand for re-election.
Biographical details of each Director standing for re-election are set out on page 17 of the annual report and accounts which accompany this document.
The Board commends to Shareholders the re-election of the Directors, each of whom the Board regards as possessing the requisite skills and attributes to continue making significant contributions in their respective roles.
The Company is required to appoint auditors at each general meeting at which accounts are presented to Shareholders and PricewaterhouseCoopers LLP have indicated their willingness to continue in office. Accordingly, Shareholders are being asked to re-appoint PricewaterhouseCoopers LLP as auditors of the Company to hold office until the conclusion of the next general meeting at which accounts are presented to Shareholders and to authorise the Directors to fix their remuneration.
Recognising that the investment objective of the Company is to achieve long-term capital gains, interest has been expressed by some Shareholders in having the option for dividends to be taken in the form of new Ordinary Shares, rather than cash. This may also assist in improving liquidity in Ordinary Shares. A similar authority has been sought from Shareholders in previous years and the Board believes that retaining this authority offers the Company and Shareholders a greater level of flexibility in relation to dividend payments.
Resolution 10 will, if approved, give the Directors a general authority to allot new shares in the Company up to an aggregate nominal amount of £108,044 (representing approximately 33.3 per cent. of the total ordinary share capital of the Company in issue as at 12 December 2012 (being the latest practicable date prior to the publication of this document)). The Company holds no Ordinary Shares in treasury. This authority will expire on 30 March 2014 or, if earlier, at the conclusion of the annual general meeting of the Company to be held in 2014. The Directors intend to use this authority, inter alia, to issue New Shares pursuant to elections made for the Scrip Dividend Option.
As noted above, resolution 10 will, if approved, give the Directors a general authority to allot securities up to an aggregate nominal amount of £108,044. Resolution 11 will, if approved, authorise the Directors to allot new Ordinary Shares and existing Ordinary Shares which may be held by the Company in treasury up to an aggregate nominal amount of £16,222 (representing approximately 5 per cent. of the total ordinary share capital of the Company in issue as at 12 December 2012 (being the latest practicable date prior to the publication of this document)) for cash without first offering such Ordinary Shares to existing Shareholders pro rata to their existing shareholdings.
These authorities, which relate both to the issue of new Ordinary Shares and to the re-issue by the Company of any Ordinary Shares held in treasury, will expire on 30 March 2014 or, if earlier, the conclusion of the annual general meeting of the Company to be held in 2014. Other than for the purpose of issuing New Shares pursuant to elections made for the Scrip Dividend Option, the Directors will only issue new Ordinary Shares pursuant to these authorities, and will only re-issue any Ordinary Shares held in treasury pursuant to these authorities, if they believe it is advantageous to the Shareholders to do so and where the issue price exceeds the last published net asset value per Ordinary Share.
The existing buy-back authority, granted at the annual general meeting of the Company held on 2 February 2012, permits the Company to make market purchases of up to 14.99 per cent. of the Company's issued ordinary share capital as at 2 February 2012 and expires at the forthcoming Annual General Meeting. During the financial year ended 30 September 2012, no Ordinary Shares were bought back by the Company. However, on 7 December 2012 the Company purchased for cancellation 150,000 Ordinary Shares at an average price of 162.57p per Ordinary Share. The Directors consider that the Company should continue to have the authority to make market purchases of Ordinary Shares for cancellation or to be held in treasury. Resolution 12 is being proposed to authorise the Board to buy-back up to 14.99 per cent. of the Company's issued ordinary share capital (approximately 24,318,062 Ordinary Shares) as at the date on which the resolution is passed. The making and timing of any market purchases of Ordinary Shares will be at the absolute discretion of the Board. Any Ordinary Shares bought back may be cancelled or held by the Company in treasury.
As at the date of this document, 3,596,981 founder A shares of 0.2 pence each ("Founder A Shares") are in issue which are convertible into Ordinary Shares. These Founder A Shares represent approximately 2.22 per cent. of the ordinary share capital of the Company in issue. If the authority to purchase Ordinary Shares were exercised in full, the Founder A Shares which are convertible into Ordinary Shares would represent approximately 2.61 per cent. of the ordinary share capital of the Company in issue.
Purchases under any such buy-back authority will only be made through the market for cash at prices below the last published net asset value per Ordinary Share, such that purchases will enhance the net asset value of the remaining Ordinary Shares. The minimum price which may be paid for an Ordinary Share shall be 0.2p (being the nominal value of an Ordinary Share). The maximum price shall be an amount being not more than the higher of (i) 105 per cent. of the average middle market quotation of an Ordinary Share (as derived from the Daily Official List of London Stock Exchange plc) for the five business days immediately preceding the date of purchase; and (ii) the higher of the price of the last independent trade and the highest current independent bid relating to an Ordinary Share on the trading venue on which the purchase is carried out. This authority will expire on 30 March 2014 or, if earlier, at the conclusion of the annual general meeting of the Company to be held in 2014.
The Company's Articles of Association currently prohibit the distribution of capital profits as dividends. Following a recent change in taxation legislation this prohibition is no longer required. The Board has considered the most recent changes in taxation legislation and the ability of investment companies to pay dividends from realised capital profits. Although, the Board has no present intention of taking this option, it believes it is prudent for the Company to amend its Articles of Association to provide flexibility in its capital structure. Resolution 13 is therefore being proposed to remove this prohibition from the Company's Articles of Association.
This proposed change to the Company's Articles of Association has received the written consent of the holders of more than three-fourths in nominal value of the Company's Founder A Shares.
On 31 March 2012 all of the Founder A Shares which could not be converted into Ordinary Shares and all of the founder B shares converted into deferred shares which have no value. The founder shares were issued for the purposes of an incentive scheme which was put in place on the Company's launch and which expired in 2011.
The Board would like to tidy up the Company's share structure by cancelling the deferred shares but this step cannot be taken until the deferred shares have been paid up. Resolution 14 authorises the Directors to pay up the unpaid nominal capital of £29,828.50 on the deferred shares by capitalising this amount from the Company's special reserve.
Once this capitalisation is completed the Company will acquire the deferred shares for no consideration and cancel these shares.
If you would like to vote on the resolutions to be considered at the Annual General Meeting but cannot attend the meeting then you can appoint a proxy to exercise all or any of your rights to attend, speak and vote at the meeting by completing the Form of Proxy sent to you with this document and returning it to our registrar in the reply paid envelope provided so that it is received no later than 12.30 p.m. on 25 January 2013. Shareholders holding shares in CREST may appoint a proxy through the CREST system in accordance with the instructions set out in Note 4 to the notice of AGM in Appendix III (pages 13 to 16) of this document.
On 3 December 2012, the Directors announced their recommendation of the Final Dividend of 2.0p per Ordinary Share in respect of the year ended 30 September 2012. The Final Dividend is expected to be paid to Shareholders on the Company's register of members at the close of business on 4 January 2013. The Final Dividend is subject to the approval of Shareholders at the Company's forthcoming Annual General Meeting.
At the annual general meeting of the Company held in February 2012, Shareholder approval was obtained to offer Shareholders the opportunity to take dividends in the form of New Shares rather than cash. Accordingly, the Directors are now offering Shareholders the opportunity to elect to receive all or part of the Final Dividend in the form of New Shares instead of cash (known as the "Scrip Dividend Option").
The information you will need to decide whether you want to make an election for the Scrip Dividend Option is set out below.
Shareholders who elect to take New Shares rather than cash in respect of the Final Dividend will increase their shareholding without incurring dealing costs or stamp duty. To the extent that Shareholders elect to take New Shares, the Company will also benefit from retaining the cash that would otherwise have been paid out as a dividend.
Shareholders should note that, on the basis of the Company's share price as at the date of this document, it is expected that New Shares will be issued at a discount to the last announced diluted net asset value per Ordinary Share, which was 224.9p as at 30 September 2012. Accordingly, it is expected that the issue of the New Shares will have a marginally dilutive effect on the net asset value attributable to the shareholdings of Shareholders who elect to receive all or part of the Final Dividend in cash.
The entitlement of Shareholders who elect for the Scrip Dividend Option will be calculated using the average of the middle market quotations of an Ordinary Share as shown in the Daily Official List published by London Stock Exchange plc for the five dealing days from and including the ex-dividend date, being 2 January 2013.
For illustrative purposes only and on the basis of the average of the middle market quotations of an Ordinary Share as shown in the Daily Official List published by London Stock Exchange plc for the five dealing days from and including 12 December 2012 (being the latest practicable date prior to the publication of this document), a Shareholder electing for the Scrip Dividend Option rather than cash would receive one New Share for every 164.45p otherwise payable as a cash dividend on Ordinary Shares registered in his name on the Record Date in respect of which he has elected for the Scrip Dividend Option. For the avoidance of doubt, the actual entitlement of Shareholders who elect for the Scrip Dividend Option may be greater or lower than this illustrative amount, depending upon the Company's share price at the relevant time.
Fractions of an Ordinary Share cannot be issued and any cash balance will be paid.
Applications will be made for the New Shares to be admitted to listing on the Premium Segment of the Official List of the UK Listing Authority and to trading on the London Stock Exchange plc's main market for listed securities ("Admission"). The Scrip Dividend Option is conditional upon Admission becoming effective on or before 31 March 2013. If this condition is not met the Scrip Dividend Option will be withdrawn and the Final Dividend will be paid in cash to all Shareholders.
The Directors reserve the right at any time prior to Admission, and at their discretion, to withdraw the Scrip Dividend Option and pay the Final Dividend entirely in cash.
The detailed terms of the Scrip Dividend Option are set out in Appendix I (pages 7 to 9) of this document. A personalised Form of Election is enclosed. Should you wish to make an election for the Scrip Dividend Option, please consider the detailed terms carefully and the likely tax consequences for you.
A non-exhaustive outline of the likely tax consequences for most UK resident Shareholders in electing to receive New Shares is set out in Appendix II (pages 10 to 12) of this document. If you are in doubt about your tax position, you should consult your professional adviser before taking any action.
The attention of overseas Shareholders is drawn to paragraph 6 of Appendix I of this document.
If you wish to elect to receive all or part of the Final Dividend in the form of New Shares rather than cash, you must complete the Form of Election in accordance with the instructions printed on it and return it to our registrar in the reply paid envelope provided so that it is received by no later than 5.00 p.m. on 11 January 2013. Shareholders should be aware that the price of shares can go down as well as up. If you are in any doubt about what course of action to take in relation to your shareholding, you should seek advice from a stockbroker, bank manager, solicitor, accountant or other independent professional adviser authorised under the Financial Services and Markets Act 2000 if you are resident in the UK or, if you are not resident in the UK, from another appropriately authorised independent financial adviser.
The Board considers that all the resolutions to be considered at the Annual General Meeting are in the best interests of the Company and the Shareholders as a whole. Your Board will be voting in favour of them in respect of their entire beneficial holdings of Ordinary Shares which amount, in aggregate, to 357,168 Ordinary Shares (representing approximately 0.22 per cent. of the ordinary share capital of the Company in issue) and unanimously recommends that you do so as well.
Yours faithfully
Scott Dobbie, CBE Chairman
Shareholders on the register at the close of business on the Record Date may elect to receive New Shares, credited as fully paid, instead of the cash dividend of 2.0p per Ordinary Share otherwise payable on 1 February 2013 (the "Final Dividend"). All elections will be subject to fulfilment of the conditions specified in the Form of Election and this document. An election for the Scrip Dividend Option, once received, cannot be revoked or withdrawn. However, the Directors reserve the right at any time prior to Admission, and at their discretion, to withdraw the Scrip Dividend Option and pay the Final Dividend entirely in cash.
An election may be made by a Shareholder in respect of all or part of his holding of Ordinary Shares.
The number of New Shares to be allotted to electing Shareholders is calculated by multiplying the number of Ordinary Shares in respect of which an election has been made by the cash dividend per Ordinary Share (being 2.0p) and dividing by the cash equivalent Ordinary Share price. New Shares will be allotted up to the maximum whole number possible. Fractions of Ordinary Shares cannot be allotted and any fractional entitlement will be dealt with in accordance with these detailed terms. The number of New Shares to be allotted in respect of the Final Dividend is calculated as follows:
Where: N is the number of Ordinary Shares in respect of which the Shareholder has elected for the Scrip Dividend Option;
D is the declared cash dividend per Ordinary Share, expressed in pence; and
P is the cash equivalent Ordinary Share price, expressed in pence.
For illustrative purposes only if the cash dividend is 2.0p per Ordinary Share, your shareholding is 100,000 Ordinary Shares and the cash equivalent Ordinary Share price is 164.45p then:
| • | Value of cash dividend: | 100,000 x 2.0p | = | £2,000 |
|---|---|---|---|---|
| • | Number of New Shares: | £2,000 ÷ 164.45p | = | 1,216.18, rounded down to 1,216 New Shares |
| • | Value of New Shares: | 1,216 x 164.45p | = | £1,999.71 leaving a cash balance of £0.29 which will be paid |
As provided by the Company's Articles of Association, the cash equivalent Ordinary Share price will be calculated using the average of the middle market quotations of an Ordinary Share, as shown in the Daily Official List published by London Stock Exchange plc, for the five dealing days from and including the ex-dividend date of 2 January 2013.
For illustrative purposes only and on the basis of the average of the middle market quotations of an Ordinary Share as shown in the Daily Official List published by London Stock Exchange plc for the five dealing days from and including 6 December 2012 (being the latest practicable date prior to the publication of this document), if all eligible Shareholders elected to receive the Final Dividend in the form of New Shares rather than in cash in respect of their entire holdings, 1,972,983 New Shares would be issued (ignoring any reduction in respect of fractions). This would represent an increase of approximately 1.2 per cent. in the ordinary share capital of the Company in issue (as at the date of this document). If no elections for the Scrip Dividend Option were received, the total cash dividend payable by the Company would be £3,244,571. The tax effects of the payment of a dividend, including any tax credits, will depend on each Shareholder's situation.
No fraction of a New Share will be allotted. The fractional entitlement is the difference between the full cash dividend payable on the shareholding and the value of the New Shares, which is calculated by multiplying the number of New Shares by the cash equivalent Ordinary Share price. Any cash balance will be paid to the Shareholder.
The taxation effect of an election for the Scrip Dividend Option on Shareholders will depend on individual circumstances and a non-exhaustive outline of the likely tax consequences for most UK resident Shareholders is set out in Appendix II (pages 10 to 12) of this document.
If you are not sure how you will be affected, you should consult your professional adviser before taking any action.
If you hold your Ordinary Shares in certificated form and you wish to receive the Final Dividend in the form of New Shares rather than in cash in respect of all or part of your shareholding, you should complete the enclosed Form of Election and return it to our registrar in the reply paid envelope provided so as to be received not later than 5.00 p.m. on 11 January 2013. Your right to elect to receive the Final Dividend in the form of New Shares is non-transferable. If the Form of Election is not received by 5.00 p.m. on that day, the Final Dividend will be paid in cash in respect of all Ordinary Shares registered in your name on the Record Date. No acknowledgement of receipt of a Form of Election will be issued.
If you return the Form of Election but you do not specify in box 1 the number of Ordinary Shares in respect of which you wish to elect for the Scrip Dividend Option, you will be deemed to have elected for the Scrip Dividend Option in respect of your entire shareholding on the Record Date.
Dematerialised holders should make any election for the Scrip Dividend Option using the Euroclear UK & Ireland functionality for electronic dividend elections. Any elections made using the Form of Election which relate to dematerialised holdings are submitted wholly at the risk of the submitting party and our registrar, Equiniti Limited, reserves the right to reject any such elections.
It is the responsibility of any Shareholder wishing to elect to receive New Shares under the Scrip Dividend Option to satisfy himself as to full observance of the laws of any relevant territory in connection with such election, including obtaining any requisite governmental or other consent or approval, observing any other requisite formalities and paying any issue, transfer or other taxes due in such territory.
Shareholders who are in any doubt as to their position should consult a professional adviser. No person receiving this document and/or the Form of Election in any territory other than the UK may treat it as constituting an invitation or offer to elect to receive any shares, nor should he in any event use such Form of Election unless, in the relevant territory, such an invitation or offer could lawfully be made to him and such Form of Election could lawfully be used by him without contravention of any registration or other regulatory or legal requirement. In such circumstances, this document and/or the Form of Election are sent for information only, are confidential and should not be copied or distributed.
The Company (acting in its absolute discretion) reserves the right to reject any election made for the Scrip Dividend Option which is made by or on behalf of a person outside the UK or if it appears that the election may constitute a breach of any relevant securities legislation.
Notwithstanding any other statement in this document, the Company reserves the right to permit a Shareholder to take up New Shares if the Company is satisfied (acting in its absolute discretion) that such action would not result in contravention of any applicable legal or regulatory requirements.
This document has not been submitted to the clearance procedures of any authorities and the Company's shares have not been and will not be registered under the United States Securities Act of 1933, as amended, or under the securities laws of any State of the United States of America and they are not being offered in the United States of America and its territories and possessions, in Canada or in Australia, or their respective states, territories or possessions.
If, for any reason, your holding is registered in more than one way and as a result you have received more than one Form of Election, then, unless you are able on or before 11 January 2013 to make arrangements with Equiniti Limited to have your holdings consolidated, those holdings will be treated for all purposes as separate and you should complete separate Forms of Election. In order to consolidate your holdings you should write as soon as possible to Equiniti Limited at Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA stating that you wish them to effect the same and enclosing all Forms of Election, which should be completed if you wish to elect for the Scrip Dividend Option.
If, on or before 2 January 2013 (the ex-dividend date), you have sold or transferred all or some of your holding of Ordinary Shares or you have purchased Ordinary Shares, you should contact, as soon as possible, your stockbroker, your bank or other person who arranged the sale or transfer. They will then advise you as to how to deal with the Form of Election and accompanying documents.
Applications will be made for the New Shares to be issued pursuant to the Scrip Dividend Option to be admitted to listing on the Premium Segment of the Official List of the UK Listing Authority and to trading on the London Stock Exchange plc's main market for listed securities. The Scrip Dividend Option is conditional upon Admission becoming effective on or before 31 March 2013. The New Shares will, on issue, rank pari passu in all respects with the existing issued Ordinary Shares in the capital of the Company and will rank for all future dividends on such shares.
Subject to Admission, dealings in the New Shares are expected to begin on 1 February 2013. In the unlikely event that Admission does not become effective on or before 31 March 2013, Forms of Election will be disregarded and the Final Dividend will be paid in cash in the normal way.
The New Shares will be issued in registered form and may be held either in certificated form or settled through CREST. It is expected that certificates for the New Shares will be posted, at the risk of the persons entitled thereto, on 31 January 2013. Temporary documents of title will not be issued. Pending despatch of such certificates, transfers will be certified against the register. If you are a CREST member, it is expected that your CREST account will be credited directly with New Shares on 1 February 2013.
| 3 December 2012 | Final Dividend announced |
|---|---|
| 14 December 2012 | Posting of Forms of Election |
| 2 January 2013 | Ordinary Shares quoted ex-dividend |
| 4 January 2013 | Record date for Final Dividend |
| 9 January 2013 | Announcement of the cash equivalent Ordinary Share price |
| 11 January 2013 | Final date for consolidation of holdings (see paragraph 7 above) |
| 11 January 2013 | Final date for receipt of Forms of Election |
| 30 January 2013 | Posting of tax vouchers for cash dividends |
| 31 January 2013 | Posting of definitive share certificates/CREST statements and cheques for cash dividends |
| 1 February 2013 | First day of dealings in the New Shares, dividend payment date and CREST member accounts credited with New Shares |
Further copies of Forms of Election may be obtained from Share Dividend Operations, Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA up to and including 11 January 2013.
This summary of the taxation treatment is not exhaustive and does not deal with every Shareholder's situation nor does it consider the position of any Shareholder not resident in the UK or who holds their Ordinary Shares for purposes other than investment. If you are not sure how you will be affected or if you are a UK resident and a citizen of any nation other than the UK, you should consult your professional adviser before deciding whether or not to make an election for the Scrip Dividend Option.
The taxation effect for a United Kingdom resident Shareholder making an election for the Scrip Dividend Option will depend on the circumstances of that Shareholder. The Directors have been advised that, under current UK legislation and HM Revenue & Customs' practice, the taxation consequences for such Shareholders will be broadly as outlined below.
To the extent that an individual elects to receive a cash dividend it will be taxed in the normal manner as dividend income. The tax treatment of the issue of New Shares is outlined below.
Where individuals make an election for the Scrip Dividend Option, they will be treated as having received gross income of an amount per share (the "gross dividend") which, when reduced by income tax at the dividend ordinary rate (currently 10 per cent.), is equal to the "Cash Equivalent"* (as defined below). The individual will also be treated as having paid income tax at the rate of 10 per cent. of that gross dividend (the "tax credit"). For example, an individual electing to receive New Shares of which the Cash Equivalent* is £90 will be treated as receiving gross income of £100 and as having paid dividend ordinary rate tax of £10 on that grossed up amount. Dividend income is treated as the 'top slice' of an individual's income.
Individuals who (after taking account of their receipt of New Shares and any cash dividend) pay only basic rate income tax should have no further liability to tax on the receipt of the New Shares.
Individuals who do not pay income tax, or whose liability to income tax does not exceed the tax credit attaching to the dividend, are not entitled to claim repayment of the tax credit attaching to any dividend, whether it is paid in cash or if they elect to receive New Shares.
An individual who (after taking into account the receipt of New Shares and any cash dividend) is liable to pay income tax at the higher rate will be subject to income tax at the dividend upper rate (currently 32.5 per cent.). Such Shareholder will be treated as having paid tax at the dividend rate of 10 per cent. on the dividend but will be liable to pay additional tax, calculated by multiplying the grossed up amount of the Cash Equivalent* by the percentage difference between the dividend upper rate and the dividend ordinary rate (currently 22.5 per cent.). For example, such a Shareholder in receipt of New Shares with a Cash Equivalent* of £90 (that is, a gross dividend of £100) will be liable to additional tax of £22.50 (an effective tax rate of 25 per cent. on the Cash Equivalent* amount).
An additional rate of income tax is payable by taxpayers with taxable income in excess of £150,000 per annum. An individual who (after taking into account the receipt of New Shares and any cash dividend) is liable to pay income tax at the additional rate will be subject to income tax at the dividend additional rate (currently 42.5 per cent.). Such Shareholder will be treated as having paid tax at the dividend rate of 10 per cent. on the dividend but will be liable to pay additional tax, calculated by multiplying the grossed up amount of the Cash Equivalent* by the percentage difference between the dividend additional rate and the dividend ordinary rate (currently 32.5 per cent.). For example, such a Shareholder in receipt of New Shares with a Cash Equivalent of £90 (that is, a gross dividend of £100) will be liable to additional tax of £32.50 (an effective rate of 36.11 per cent. on the Cash Equivalent amount).
For capital gains tax purposes, individual Shareholders who make an election for the Scrip Dividend Option are not treated as having made a disposal of their existing Ordinary Shares. The New Shares will be treated as a separate asset for capital gains tax purposes acquired for an amount equal to the Cash Equivalent* which will represent the base cost of those New Shares. Chargeable gains realised on any future disposal of the New Shares will be subject to a single rate of capital gains tax (currently at a rate of 18 per cent. for basic rate taxpayers and 28 per cent. for higher rate taxpayers). An individual Shareholder may be able to make use of the annual exemption which is set at £10,600 for the financial year 2012/13.
Trustees, who are liable to income tax at the rate applicable to trusts (currently 40 per cent.), will pay tax on dividends at the dividend trust rate (currently 32.5 per cent.). Where such trustees elect to receive New Shares, the same grossing up procedure as outlined above for individuals will apply. Thus, the trustees will be treated as having received gross income of an amount which, when reduced by income tax at the dividend ordinary rate, is equal to the Cash Equivalent*. The trustees will be liable to pay additional tax of 22.5 per cent. of the grossed up amount of the Cash Equivalent*, being the difference between the dividend ordinary rate and the dividend trust rate.
For capital gains tax purposes, trustees who elect to receive New Shares instead of a cash dividend are not treated as having made a disposal of their existing Ordinary Shares. The New Shares will be treated as a separate asset for capital gains tax purposes acquired for an amount equal to the Cash Equivalent* which will represent the base cost of those shares. Chargeable gains realised on any future disposal of the New Shares will in general be subject to capital gains tax currently at a rate of 28 per cent. Trustees may be able to make use of the annual exemption which is set at £5,300 for the financial year 2012/13.
When a Shareholder which is a corporate entity and resident in the UK makes an election for the Scrip Dividend Option, the New Shares will not be treated as franked investment income for corporation tax purposes. Corporation tax will not be chargeable on New Shares issued. For the purposes of corporation tax on chargeable gains, no consideration will be treated as having been given for the New Shares.
UK pension funds are not entitled to claim repayment of the tax credit attaching to any dividend. If a UK pension fund has made an election for the Scrip Dividend Option, no tax credit will attach to the New Shares and no repayment claim can be made in respect thereof. Therefore a UK pension fund will not be able to claim repayment of the tax credit whether it receives the dividend in the form of New Shares or cash.
No stamp duty or stamp duty reserve tax is payable in respect of the allotment and issue of the New Shares.
The "Cash Equivalent" of one Ordinary Share for these purposes will be announced on 9 January 2013. If, on the first day of trading on the London Stock Exchange, the market value of one Ordinary Share exceeds the Cash Equivalent by 15 per cent. or more the Cash Equivalent is taken to be that market value instead.
The summary of taxation treatment set out above is not exhaustive and, in particular, does not consider the position of any Shareholder not resident in the UK or a Shareholder that holds Ordinary Shares for purposes other than investment. If you are not sure how you will be affected or you are a UK resident and a citizen of any nation other than the UK, you should consult your professional adviser before deciding whether or not to make an election for the Scrip Dividend Option.
(incorporated and registered in Scotland with registered number SC216638 and registered as an investment company under section 833 of the Companies Act 2006)
Notice is hereby given that the twelfth annual general meeting of Standard Life European Private Equity Trust PLC (the "Company") will be held at The Balmoral Hotel, 1 Princes Street, Edinburgh on 29 January 2013 at 12.30 p.m. to consider and, if thought fit, pass the resolutions set out below. Resolutions 1 to 10 (inclusive) will be proposed as ordinary resolutions and resolutions 11 to 14 (inclusive) will be proposed as special resolutions.
(i) expires on 30 March 2014 or, if earlier, at the conclusion of the annual general meeting of the Company to be held in 2014, save that the Company may, at any time prior to the expiry of such authority, make an offer or enter into an agreement which would or might require equity securities to be allotted after expiry of this power and the Directors may allot equity securities in pursuance of that offer or agreement as if this power had not expired; and
This power applies in relation to a sale of shares which is an allotment of equity securities by virtue of section 724 of the Act as if in the first paragraph of this resolution 11 the words "pursuant to the authority under section 551 of the Act conferred by resolution 10 in this notice of annual general meeting" were omitted.
The directors shall establish a reserve to be called the "capital reserve" and shall either, at the discretion of the directors, carry to the credit of such reserve from time to time all capital profits or appreciations arising on the sale, realisation, repayment or revaluation of any investment or other capital asset of the Company in excess of the book value thereof or apply the same in providing for depreciation or contingencies. For the avoidance of doubt, accrued but unpaid interest or any sum received in respect of accrued but unpaid interest shall not be treated as capital profits or appreciations arising on the sale, realisation, repayment or revaluation of any investment or other capital asset. Any losses realised on the sale, realisation, repayment or revaluation of any investment or other capital asset and any other expenses, loss or liability (or provision therefor) considered by the directors to be of a capital nature may be carried to the debit of the capital reserve. All sums carried and standing to the credit of the capital reserve may be applied for any of the purposes to which sums standing to any revenue reserve are applicable."
1 George Street Edinburgh EH2 2LL
14 December 2012
If you wish to attend the Annual General Meeting in person, you should arrive at the venue for the Annual General Meeting in good time to allow your attendance to be registered. It is advisable to have some form of identification with you as you may be asked to provide evidence of your identity prior to being admitted to the Annual General Meeting.
Members are entitled to appoint one or more proxies to exercise all or any of their rights to attend, speak and vote at the Annual General Meeting. A proxy need not be a member of the Company but must attend the Annual General Meeting to represent a member. To be validly appointed, a proxy must be appointed using the procedures set out in these notes and in the notes to the accompanying Form of Proxy.
If a member wishes a proxy to speak on their behalf at the meeting, the member will need to appoint their own choice of proxy (not the Chairman of the Annual General Meeting) and give their instructions directly to them. Such an appointment can be made using the Form of Proxy accompanying this notice of Annual General Meeting or through CREST.
Members can only appoint more than one proxy where each proxy is appointed to exercise rights attached to different shares. Members cannot appoint more than one proxy to exercise the rights attached to the same share(s). If a member wishes to appoint more than one proxy, they should contact the Company's registrar Equiniti Limited (the "Registrar") at Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA.
A member may instruct their proxy to abstain from voting on a particular resolution to be considered at the meeting by marking the "Vote withheld" option in relation to that particular resolution when appointing their proxy. It should be noted that an abstention is not a vote in law and will not be counted in the calculation of the proportion of votes "For" or "Against" the resolution.
The appointment of a proxy will not prevent a member from attending the Annual General Meeting and voting in person if he or she wishes.
A person who is not a member of the Company but who has been nominated by a member to enjoy information rights does not have a right to appoint any proxies under the procedures set out in these notes and should read note 8 below.
A Form of Proxy for use in connection with the Annual General Meeting is enclosed. To be valid any Form of Proxy or other instrument appointing a proxy, together with any power of attorney or other authority under which it is signed or a certified copy thereof, must be received by post or (during normal business hours only) by hand by the Registrar at Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA at least 48 hours (excluding non-working days) before the time of the Annual General Meeting or any adjournment of that meeting.
If you do not have a Form of Proxy and believe that you should have one, or you require additional Forms of Proxy, please contact the Registrar at Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA.
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual and by logging on to the following website: www.euroclear.com/CREST. CREST personal members or other CREST sponsored members, and those CREST members who have appointed (a) voting service provider(s), should refer to their CREST sponsor or voting service provider(s) who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear UK & Ireland Limited's specifications, and must contain the information required for such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the Registrar (ID RA19) no later than 48 hours (excluding non-working days) before the time of the Annual General Meeting or any adjournment of that meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Application Host) from which the Registrar is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service provider(s) should note that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed (a) voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
In the case of joint holders, where more than one of the joint holders purports to appoint one or more proxies, only the purported appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company's register of members in respect of the joint holding (the first named being the most senior).
Any corporation which is a member can appoint one or more corporate representatives. Members can only appoint more than one corporate representative where each corporate representative is appointed to exercise rights attached to different shares. Members cannot appoint more than one corporate representative to exercise the rights attached to the same share(s).
To be entitled to attend and vote at the Annual General Meeting (and for the purpose of determining the votes they may cast), members must be registered in the Company's register of members at 6.00 p.m. on 25 January 2013 (or, if the Annual General Meeting is adjourned, at 6.00 p.m. on the day two days (excluding non-working days) prior to the adjourned meeting). Changes to the Company's register of members after the relevant deadline will be disregarded in determining the rights of any person to attend and vote at the Annual General Meeting.
Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 (the "2006 Act") to enjoy information rights (a "Nominated Person") may, under an agreement between him or her and the member by whom he or she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the Annual General Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he or she may, under any such agreement, have a right to give instructions to the member as to the exercise of voting rights.
Information regarding the Annual General Meeting, including information required by section 311A of the 2006 Act, and a copy of this notice of Annual General Meeting is available from www.slcapital.com/products.
Members should note that it is possible that, pursuant to requests made by members of the Company under section 527 of the 2006 Act, the Company may be required to publish on a website a statement setting out any matter relating to: (a) the audit of the Company's accounts (including the auditor's report and the conduct of the audit) that are to be laid before the Annual General Meeting; or (b) any circumstance connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual accounts and reports were laid in accordance with section 437 of the 2006 Act. The Company may not require the members requesting any such website publication to pay its expenses in complying with sections 527 or 528 of the 2006 Act. Where the Company is required to place a statement on a website under section 527 of the 2006 Act, it must forward the statement to the Company's auditor not later than the time when it makes the statement available on the website. The business which may be dealt with at the Annual General Meeting includes any statement that the Company has been required under section 527 of the 2006 Act to publish on a website.
As at 12 December 2012 (being the latest practicable date prior to the publication of this notice) the Company's issued share capital consisted of 162,228,566 ordinary shares of 0.2p each, 3,596,981 founder A shares of 0.2p each and 30,145,021 deferred shares of 0.2p each. The Company held no shares in treasury. Only holders of ordinary shares are entitled to attend and vote at the Annual General Meeting. Each ordinary share carries one vote. Therefore, the total voting rights in the Company as at 12 December 2012 were 162,228,566 votes.
Any person holding 3 per cent. or more of the total voting rights of the Company who appoints a person other than the Chairman of the Annual General Meeting as his proxy will need to ensure that both he, and his proxy, comply with their respective disclosure obligations under the UK Disclosure Rules and Transparency Rules.
Under section 319A of the 2006 Act, the Company must cause to be answered any question relating to the business being dealt with at the Annual General Meeting put by a member attending the meeting unless answering the question would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information, or the answer has already been given on a website in the form of an answer to a question, or it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.
Members may not use any electronic address provided in this notice or in any related documents (including the accompanying document, Form of Proxy or Form of Election) to communicate with the Company for any purpose other than those expressly stated.
The following documents will be available for inspection at the registered office of the Company and at the offices of Dickson Minto W.S. at Broadgate Tower, 20 Primrose Street, London EC2A 2EW during normal business hours on any weekday (Saturdays, Sundays and public holidays excepted) from the date of this notice until the conclusion of the Annual General Meeting and on the date of the Annual General Meeting at The Balmoral Hotel, 1 Princes Street, Edinburgh from 12.15 p.m. until the conclusion of the Annual General Meeting:
14.1 the Company's Memorandum of Association and Articles of Association; and
14.2 copies of the letters of appointment of the Company's non-executive directors.
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