Pre-Annual General Meeting Information • Feb 15, 2013
Pre-Annual General Meeting Information
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If you are in any doubt about the action to be taken, you should immediately consult your bank manager, stockbroker, solicitor, accountant, financial or other professional adviser authorised pursuant to the Financial Services and Markets Act 2000.
If you have sold or otherwise transferred all of your shares in ProVen VCT plc (the Company), please pass this document to the purchaser or transferee or to the stockbroker, bank manager or other agent through whom the sale or transfer was arranged or effected for onward transmission to the purchaser or transferee. The Enhanced Buyback Facility is not being made, directly or indirectly, in or into a Restricted Territory. In particular, Shareholders with registered or mailing addresses in a Restricted Territory should note that this document is being sent for the purposes of the General Meeting only. The distribution of this document and/or an Enhanced Buyback Facility Application Form into certain jurisdictions other than the UK is, or may be, restricted by law and, therefore, persons into whose possession this document comes should inform themselves about, and observe, such restrictions. Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction. This document must not be forwarded to, or transmitted into, a Restricted Territory. Any person (including, without limitation, custodians, nominees and trustees) who may have a contractual or legal obligation to forward this document should read the section entitled 'Overseas Shareholders' in Part VI of this document before taking any action.
SGH Martineau LLP, which is regulated in the United Kingdom by the Solicitors Regulation Authority, is acting as legal adviser to the Company and no-one else and will not be responsible to any other person for providing advice in connection with any matters referred to in this document.
(Registered in England and Wales with registered number 03911323)
You will find set out at the end of this document notice of the General Meeting to be held at 10.00 a.m. on 21 March 2013 at the offices of Beringea LLP, 39 Earlham Street, London WC2H 9LT to approve resolutions to effect the proposals contained herein. To be valid, the form of proxy should be returned not less than 48 hours before the General Meeting, either by post or by hand (during normal business hours only) to Beringea LLP, 39 Earlham Street, London WC2H 9LT. For further information on the General Meeting or the completion of the proxy form, please telephone Beringea on 020 7845 7820 between 9.00 a.m. and 5.00 p.m. on any Business Day. Please note that Beringea cannot provide advice on the merits of the Enhanced Buyback Facility or give any financial, legal, tax or investment advice.
The procedure for, and the terms and conditions of, the Enhanced Buyback Facility are set out in this document and on the Enhanced Buyback Facility Application Form (at the end of this document). Completed Enhanced Buyback Facility Application Forms should be returned to Beringea LLP, 39 Earlham Street, London WC2H 9LT by post or hand delivered (during normal business hours only). For further information on the completion of the Enhanced Buyback Facility Application Form, please telephone Beringea on 020 7845 7820 between 9.00 a.m. and 5.00 p.m. on any Business Day. Please note that Beringea cannot provide advice on the merits of the Enhanced Buyback Facility or give any financial, legal, tax or investment advice.
Your attention is also drawn to the section entitled Action to be Taken on page 7 and to Part III (Risk Factors) of this document.
| EXPECTED TIMETABLES | 3 |
|---|---|
| PART I – LETTER FROM THE CHAIRMAN | 4 |
| PART II – THE ENHANCED BUYBACK FACILITY | 9 |
| PART III – RISK FACTORS | 17 |
| PART IV – TAX POSITION OF INVESTORS AND THE COMPANY | 20 |
| PART V – ADDITIONAL INFORMATION | 24 |
| PART VI – ENHANCED BUYBACK FACILITY APPLICATION PROCEDURES AND TERMS AND CONDITIONS |
25 |
| PART VII – DEFINITIONS | 33 |
| NOTICE OF GENERAL MEETING | 36 |
| FORM OF PROXY | 39 |
| ENHANCED BUYBACK FACILITY APPLICATION FORM | 41 |
| CORPORATE INFORMATION | 47 |
| General Meeting Latest time and date for receipt of forms of proxy |
10.00 a.m. on 19 March 2013 |
|---|---|
| General Meeting | 10.00 a.m. on 21 March 2013 |
| Enhanced Buyback Facility Enhanced Buyback Facility Record Date |
5.00 p.m. on 14 February 2013 |
| Enhanced Buyback Facility opens | 15 February 2013 |
| Enhanced Buyback Facility closes | 12.00 noon on 22 March 2013 |
| Purchase of Existing Shares and issue of New Shares 2012/2013 Tax Year Applications 2013/2014 Tax Year Applications |
27 March 2013 8 April 2013 |
| Admission of and dealings in New Shares commences | within 3 Business Days of allotment |
| Share and Tax Certificates for New Shares dispatched | within 15 Business Days of allotment |
The Enhanced Buyback Facility is conditional on the approval of Resolution 1 to be proposed at the General Meeting. If Resolution 1 is not approved, the Enhanced Buyback Facility will be withdrawn. The Board also reserves the right to extend the Enhanced Buyback Facility and to accept applications and to purchase Existing Shares and issue, and arrange for the listing of, New Shares on dates later than those stated above.
(Registered in England and Wales with registered number 03911323)
Directors: Registered Office: Andrew Davison 39 Earlham Street Barry Dean London Malcolm Moss WC2H 9LT
15 February 2013
Dear Shareholder
You will have already received details of the Top-up Offer by the Company launched on 19 November 2012 seeking to raise up to £4 million of further capital for the Company. The Board is now also pleased to be offering an opportunity for Shareholders to participate in an enhanced buyback facility.
One of the benefits of investing in a VCT is that investors are entitled to receive income tax relief on their subscription for shares (subject to an investor's personal circumstances, annual investment limits and reducing the income tax liability to nil), currently at the rate of 30%. Once these shares have been held for five years (the current required holding period), investors can sell them without losing this upfront income tax relief. Should they wish to, investors may then reinvest the proceeds into new VCT shares and obtain further income tax relief. Such sales would, however, generally be at a discount, typically around 10% (if through a normal share buyback), to the net asset value of such shares and the purchase of new shares are then subject to further issue costs.
Enhanced buyback facilities are, in effect, loyalty schemes, providing VCT shareholders with a lower cost, one step process to enable them to realise their existing holding and reinvest in the same VCT, with such reinvestment attracting upfront income tax relief (subject to a shareholder's personal circumstances). The VCT benefits from the retention of capital enabling it to continue investing in accordance with its investment policy.
Participants in an enhanced buyback facility are not adding to their existing shareholding in the Company. Shareholders interested in increasing the size of their investment in the Company may wish to consider participating in the Top-up Offer, details of which can be downloaded from www.provenvcts.com. Shareholders may participate in both the Enhanced Buyback Facility and the Top-up Offer, but should note that VCT tax reliefs will only be available for Qualifying Shareholders on aggregate investments in VCTs of up to £200,000 in any one tax year.
Full details of the Enhanced Buyback Facility are set out in this document and an Enhanced Buyback Facility Application Form can be found at the end of this document. You will also find, at the end of this document, a notice of the General Meeting, together with a proxy form for use at the meeting, at which resolutions will be proposed in connection with the Enhanced Buyback Facility and other matters, as more fully detailed below.
A summary of the terms of the Enhanced Buyback Facility is as follows:
The purchase will be subject to the Shareholder (or, where the Existing Shares are held by a nominee, the beneficial shareholder) agreeing to reinvest all of the proceeds of sale in the purchase of New Shares.
Participation in the Enhanced Buyback Facility is open to all Shareholders and, if such Shareholder is a nominee, the existing beneficial holder of Shares (with the exception of Shareholders and beneficial holders of Shares in certain overseas jurisdictions, for legal compliance reasons) on the register on 14 February 2013.
Implementation of the Enhanced Buyback Facility requires the approval of Shareholders to enable the Company both to purchase Existing Shares and to issue New Shares under CA 2006 and the Articles. Such approval is being sought pursuant to Resolution 1 to be proposed at the General Meeting. The implementation of the Enhanced Buyback Facility is, therefore, subject to the passing of Resolution 1.
Shareholders should note that participation in the Enhanced Buyback Facility may not be suitable for some Shareholders (in particular, where Existing Shares have not been held for the requisite five-year holding period to maintain any upfront income tax relief obtained on original subscription or where capital gains tax deferral relief attaches to such shares). For the purposes of the five-year holding period, Existing Shares resulting from the consolidation of the original ordinary shares and conversion of the C shares and D shares into Shares, have a deemed acquisition date of the date the original ordinary shares, C shares or D shares (as the case may be) were acquired and not the date of the consolidation or conversion (as the case may be).
Where the Tender Price is greater than the Original Issue Price, Shareholders may be subject to an income tax charge in respect of the amount by which the Tender Price exceeds the Original Issue Price. In addition, where Existing Shares were bought from a third party, and were not within the annual VCT investments limits, there may also be a capital gains tax charge in respect of the amount by which the Original Issue Price, at which the Existing Shares were issued by the Company, exceeds the purchase price from such third party.
A share premium account and a capital redemption reserve form part of a company's capital and, save with the approval of shareholders by special resolution and the approval of the Court, those reserves may not be used to fund distributions, assist in writing-off losses or finance repurchases of a public company's shares. Cancelling share premium and capital redemption reserves allows a company to create a special reserve that can assist in writing-off losses, which in turn will enhance the ability for a company to make distributions and implement share buybacks.
The Company has previously cancelled its share premium for these purposes. However, the issue of Shares pursuant to recent offers has resulted in, and the New Shares to be issued pursuant to the Enhanced Buyback Facility and current offer will result in, the creation of further share premium. The Enhanced Buyback Facility will also increase the existing capital redemption reserves resulting from buybacks undertaken by the Company.
The Board, therefore, also proposes pursuant to Resolution 2 at the General Meeting to seek the approval of Shareholders, such approval being required pursuant to CA 2006, to cancel the amounts standing to the credit of the share premium account and the capital redemption reserve of the Company as at a future date (as will be determined by the Board) when sanction of this additional authority by the Court is obtained. This resolution will enable the Company to cancel any share premium and capital redemption reserves which may arise as a result of the Enhanced Buyback Facility and will provide the Board with flexibility in managing the Company's reserves in a manner which it believes will best promote the interests of the Company and the Shareholders.
Notice of the General Meeting to be held at the offices of Beringea LLP, 39 Earlham Street, London WC2H 9LT at 10.00 a.m. on 21 March 2013 is set out at the end of this document.
Resolution 1 is a composite resolution which will provide the authorities to implement the Enhanced Buyback Facility.
Paragraph (i) of Resolution 1 will authorise the Board to purchase Shares at a fixed price equal to the latest published net asset value per Share prior to the date of purchase, rounded down to the nearest 0.1p.
Paragraph (ii) of Resolution 1 will authorise the Board to issue New Shares at a fixed price equal to the latest published net asset value per Share prior to the date of allotment, divided by 0.97 (to take into account the costs of the Enhanced Buyback Facility), rounded up to the nearest 0.1p and the proceeds of which may be used in whole or in part by the Company to purchase shares in the capital of the Company.
Paragraph (iii) of Resolution 1 disapplies pre-emption rights in connection with the issue of such New Shares.
The maximum number of Shares which may be bought back and issued under this authority is 11,445,910 shares (representing 24.99% of the issued share capital as at 14 February 2013, this being the latest practicable date prior to publication of this document) and the authority will only be used for the Enhanced Buyback Facility. The shares purchased pursuant to this authority will be cancelled. The authority conferred by Resolution 1 will be in addition to the existing general allotment and buyback authorities and will lapse on the conclusion of the annual general meeting of the Company to be held in 2013.
Resolution 2 will authorise the cancellation of the amount standing to the credit of the share premium account and the capital redemption reserve of the Company as at the date an order is made confirming such cancellation by the Court.
Each Resolution will be proposed as a special resolution requiring the approval of 75% or more of the votes cast at the General Meeting.
Before taking any action, you are recommended to read the further information set out in this document.
The address for returning the Enhanced Buyback Facility Application Form and the form of proxy is Beringea LLP, 39 Earlham Street, London WC2H 9LT. A reply paid envelope is provided for your convenience and you may, if you wish, return all the forms in the same envelope. Please remember, however, that to be effective, the forms need to have been returned by the following dates:
Enhanced Buyback Facility Application Form: 12.00 noon on 22 March 2013
Proxy Form: 10.00 a.m. on 19 March 2013
The Board believes that the Proposals are in the best interests of the Shareholders as a whole and unanimously recommends you to vote in favour of the Resolutions, as they intend to do in respect of their own holdings of 50,076 Shares, representing approximately 0.11% of the issued share capital of the Company.
Yours faithfully
Andrew Davison Chairman
If a Shareholder does not wish to participate or is not eligible to participate in the Enhanced Buyback Facility no further action is required.
The Enhanced Buyback Facility is conditional on the approval of Resolution 1 to be proposed at the General Meeting. If this resolution is not approved, the Enhanced Buyback Facility will be withdrawn. The Board believes it will have sufficient reserves and/or available proceeds from a fresh issue of shares in the Company to implement the Enhanced Buyback Facility in full. However, as the Tender Price is dependent on the NAV per Share at the time of purchase, the Enhanced Buyback Facility will only be implemented to the extent the Board believes that the Company has sufficient reserves and/or available proceeds to effect the purchase of Existing Shares pursuant to the Enhanced Buyback Facility and for ongoing purposes.
Participation in an enhanced buyback facility in respect of Existing Shares which have not been held or deemed held for five years is considered for tax purposes as a disposal and is, therefore, subject to clawback by HMRC of any upfront income tax reliefs obtained on original subscription. Shareholders should be aware that HMRC operate on a 'first in, first out' basis in respect of which Shares in your aggregate holding have been sold.
There could also be an income tax charge for Shareholders on any excess of the Tender Price above the Original Issue Price and any capital gains tax deferral relief obtained on subscription for the existing Shares issued before 6 April 2004 in the Company will also be crystallised for payment. Shareholders should, therefore, seek professional advice.
The Enhanced Buyback Facility comprises a tender offer by the Company to purchase Existing Shares and an offer of New Shares in the Company to be effected as follows:
Applications under the Enhanced Buyback Facility can be in respect of one or both of the 2012/2013 and 2013/2014 tax years.
The Tender Price will be a price equal to the most recently published net asset value per Share at the time of purchase (adjusted for any dividends subsequently paid), rounded down to the nearest 0.1p.
The net effect for participating Shareholders is that they will 'substitute' 1,000 Existing Shares with approximately 970 New Shares in the Company (the reduction in the value of the investment holding representing the estimated costs of implementing the Enhanced Buyback Facility), with the reinvestment qualifying for upfront income tax relief of up to 30% of the amount reinvested for Qualifying Shareholders, which has been confirmed by HMRC.
There is no requirement for any application monies to be sent by participating Shareholders who apply under the Enhanced Buyback Facility as the cost of the subscription for New Shares will be met from the proceeds of the sale of the Existing Shares.
The maximum number of Existing Shares to be purchased pursuant to the Enhanced Buyback Facility is 11,445,910 (this being 24.99% of the issued share capital of the Company as at 14 February 2013). If the Board considers that the Company does not have sufficient reserves and/or available proceeds from a fresh issue of shares in the Company to lawfully implement the Enhanced Buyback Facility in full or that implementing the Enhanced Buyback Facility in respect of valid applications received would result in the Company having insufficient reserves and/or available proceeds for ongoing purposes (taking into account reserves expected to be created), the Board may reduce the maximum number of Existing Shares to be purchased under the Enhanced Buyback Facility and a Shareholder's entitlement to participate up to his or her Basic Entitlement will be reduced accordingly.
The Enhanced Buyback Facility opens on 15 February 2013 and will close at 12.00 noon on 22 March 2013, although there will be two separate buybacks and issues to enable applications to be made in respect of one or both of the 2012/2013 and 2013/2014 tax years. The Board expects the purchase of Existing Shares and the issue of New Shares pursuant to the Enhanced Buyback Facility to take place on 27 March 2013 in respect of 2012/2013 tax year applications and 8 April 2013 in respect of 2013/2014 tax year applications. Application will be made to the UK Listing Authority for the New Shares to be admitted to the premium segment of the Official List of the UK Listing Authority and to the London Stock Exchange for such shares to be admitted to trading on the London Stock Exchange's main market for listed securities. Admission is expected to take place within three Business Days of allotment. The Board reserves the right to extend the Enhanced Buyback Facility and to accept applications and to purchase Existing Shares and issue, and arrange for the listing of, New Shares beyond the dates stated above.
The New Shares will be issued in certificated form (though such New Shares can subsequently be admitted to CREST) and will rank, from the date of issue, pari passu in all respects with the existing issued share capital of the Company.
The results of the Enhanced Buyback Facility, including the Tender Price(s) and Issue Price(s), will be announced to the London Stock Exchange through a Regulatory Information Service.
Shareholders should note that participation in the Enhanced Buyback Facility may not be suitable for some Shareholders and you are strongly recommended to consult with your financial or other professional adviser before completing the Enhanced Buyback Facility Application Form.
The following is given as a summary of the material factors for consideration, but should not be regarded as an exhaustive list, nor should it be considered financial, legal, tax or investment advice.
• Where Existing Shares have not been held or deemed held for the requisite five-year holding period (i.e. Shares issued after 27 March 2008 in respect of applications in respect of the 2012/2013 tax year and Shares issued after 8 April 2008 in respect of applications in respect of the 2013/2014 tax year), any upfront income tax relief obtained on original subscription will be subject to clawback by HMRC. HMRC operate a first in, first out basis.
The costs of the Enhanced Buyback Facility will be paid by the Company. Costs include professional fees, administration and processing fees (including an administration fee to Beringea of £8,000 plus VAT) and stamp duty. The costs (including stamp duty) are expected to amount to approximately 3% of the proceeds of sale of Existing Shares (assuming approximately 5% of the Existing Shares are tendered for purchase). This cost is applied to participating Shareholders through the allotment process, as referred to above, so that the number of New Shares subscribed for will be approximately 3% less than the number of Existing Shares purchased pursuant to the Enhanced Buyback Facility. Therefore, although there will be a corresponding reduction to the net assets of the Company, the net asset value per Share is not expected to be materially adversely affected, unless the costs of the Enhanced Buyback Facility are greater than 3% of the proceeds (in which event, such reduction would only be of a nominal amount).
No intermediary commission will be payable to financial advisers pursuant to the Enhanced Buyback Facility.
Based on the most recently published unaudited net asset value of the Shares as at 30 November 2012, the following is an illustration of the effect for a Shareholder who successfully tenders 10,000 Existing Shares and qualifies for the full amount of upfront tax relief.
| Purchase | Reinvestment | ||||||
|---|---|---|---|---|---|---|---|
| Tender | Gross | Amount 30% income | New | ||||
| Existing | NAV | Price | proceeds | Issue Price | reinvested | tax relief | Shares |
| Shares held | (p) | (p) | (£) | (p) | (£) | (£) | issued |
| 10,000 | 102.7 | 102.7 | 10,270 | 105.9 | 10,269.12 | 3,080.73 | 9,697 |
The Tender Price and Issue Price used above are for illustrative purposes only as the NAV per Share may be different for the purposes of calculating the actual Tender Price(s) and Issue Price(s) (which may be higher or lower than in the example above).
Shareholders (and, beneficial holders of Shares, where relevant) with registered or mailing addresses outside the UK, or who are citizens or nationals of, or resident in, a jurisdiction other than the UK, should read the section entitled 'Overseas Shareholders' and Overseas Beneficial Holders in Part VI of this document and the relevant provisions of the Enhanced Buyback Facility Application Form. It is the responsibility of all Overseas Shareholders and Overseas Beneficial Holders to satisfy themselves as to the observance of any legal requirements in their jurisdiction, including, without limitation, any requirements in relation to the ability of such holders to complete and return an Enhanced Buyback Facility Application Form.
In respect of existing trail commission arrangements to financial intermediaries, recent regulations introduced by the Financial Services Authority permit such payments to continue, save where subsequent financial advice in respect of the holding is given. As a result, should you decide to seek financial advice from your existing financial intermediary in respect of participating in the Enhanced Buyback Facility, any trail commission which is currently being paid to your financial intermediary pursuant to that holding should cease. In addition, trail commission arrangements are only payable to the financial intermediary where that financial intermediary continues to act in respect of the holding.
To the extent that a holding is disposed of as part of the Enhanced Buyback Facility, the Board has agreed to continue to honour any applicable payment of trail commission to the financial intermediary (subject to the above) in respect of the new holding resulting from the reinvestment (i.e. as if it were the original holding, less the small reduction to the holding representing the costs of participating in the Enhanced Buyback Facility).
The full terms and conditions of the Enhanced Buyback Facility are set out in Part VI of this document. Shareholders' attention is also drawn to the risk factors set out in Part III of this document and the potential tax consequences set out in Part IV of this document. Please also refer to the "Frequently Asked Questions" below for further information.
The Board believes the following Shareholders should consider participating in the Enhanced Buyback Facility (though all Shareholders are recommended to consult their financial intermediary or other professional adviser):
The Board would like to remind Shareholders that the date entered on their share certificate(s) may not represent the date on which those shares were originally acquired. Shareholders who are unsure of the original acquisition date are recommended to seek professional advice from an authorised financial intermediary or other professional adviser and/or contact Capita Registrars (the Company's registrars) on the contact details provided in response to question 15.
The net effect for participating Shareholders is that they will 'substitute' 1,000 Existing Shares with approximately 970 New Shares in the Company (the reduction in the value of the investment holding representing the costs of implementing the Enhanced Buyback Facility), though the reinvestment will qualify for upfront income tax relief of up to 30% of the amount reinvested for Qualifying Shareholders. As a result of this reduction to a Shareholders' holding, there will be a small reduction to the investment value and on any subsequent dividend payments.
If a Shareholder participates in the Enhanced Buyback Facility, the Shareholder will acquire new VCT shares. If that Shareholder qualifies for any upfront income tax relief on the reinvestment in New Shares, the Shareholder will need to hold these shares for five years from the date of issue in order to retain such relief. Sale (or other disposal) of the New Shares prior to the requisite minimum five-year holding period will result in a clawback of such relief by HMRC.
There could also be an income tax charge/clawback and/or a capital gains tax charge on the disposal of the Shareholders' Existing Shares (see paragraph 2 on pages 21 and 22).
Existing Shares resulting from consolidation of the original ordinary shares and conversion of the C shares and D shares into Shares, have a deemed acquisition date of the date the original ordinary shares, C shares or D shares (as the case may be) were acquired and not the date of the consolidation or conversion (as the case may be) or the date on the share certificate.
Former ordinary, C and D shareholders should note that they will have received a new certificate dated either 30 October 2012 or 31 October 2012 when the relevant share classes were consolidated/converted as Shares. This certificate replaced their original share certificate and depending on when such ordinary shares, C shares or D shares were originally acquired may or may not represent a holding which has been held for over five years at the time of purchase pursuant to the Enhanced Buyback Facility. Shareholders are strongly advised to seek professional advice from an authorised financial intermediary or other professional adviser and/or contact Capita Registrars (the Company's registrars) on the contact details provided in response to question 15.
Tax reliefs attaching to the original ordinary shares, C shares or D shares are deemed split proportionately between the Existing Shares arising on the share consolidation or conversion (as the case may be).
Shareholders eligible to participate can apply to sell some or all of their Existing Shares in what is a two step process.
Firstly, Shareholders will, subject to receipt of a valid Enhanced Buyback Facility Application Form, be entitled to sell up to their Basic Entitlement (this being up to 24.99% of their holding on the register on 14 February 2013, rounded down to the nearest whole Existing Share).
Secondly, Shareholders may also tender additional Existing Shares in excess of their Basic Entitlement, up to the maximum available amount, to the extent other Shareholders do not participate for their Basic Entitlement. The excess will be allocated pro rata to the number of Existing Shares in excess of the Basic Entitlement tendered, subject to the discretion of the Board.
VCTs have different rules from normal companies. The first shares bought in the Company by a Shareholder are the first to be sold (i.e. a first in, first out basis). Shareholders are reminded that Existing Shares may have been issued by the Company and/or acquired from another party at different dates. In particular, Shareholders should take into account any Existing Shares issued or resulting from participation in the dividend investment scheme operated by the Company.
Shareholders are referred to paragraph 2 on pages 21 and 22 in respect of the tax consequences of participating in the Enhanced Buyback Facility. Please note, in particular, the tax consequences of disposing of Existing Shares within the requisite five year holding period or if the Tender Price is greater than the Original Issue Price. Shareholders should seek professional advice from an authorised financial intermediary or other professional adviser.
If a Shareholder wishes to participate in the Enhanced Buyback Facility and the Existing Shares are held by a nominee and through CREST, please see the answer to the question 8 below.
If Existing Shares are personally held in CREST, holdings will first need to be rematerialised into certificated form in order to participate. Shareholders are recommended to contact their broker or speak with the Company's registrar, Capita Registrars, for assistance in rematerialising holdings. Due to the time it may take to rematerialise holdings, Shareholders are advised to factor in at least two weeks for this process to be effected.
Once in receipt of the share certificate, this must then be submitted, together with the Enhanced Buyback Facility Application Form.
Both the nominee and the beneficial shareholder will need to complete the same Enhanced Buyback Facility Application Form confirming that they wish to proceed by the nominee selling the holding in Existing Shares on behalf of the beneficial shareholder and the beneficial shareholder applying for the New Shares in his or her own name (so as to be able to obtain the income tax relief associated therewith).
A separate Enhanced Buyback Facility Application Form can be requested from Beringea where a nominee holds Existing Shares in one holding for multiple beneficial shareholders or, alternatively, the form at the end of this document can be photocopied.
If Existing Shares are held through CREST, then the nominee will need to liaise with their broker or Capita Registrars (as the case may be) to rematerialise the Existing Shares first (as detailed above). Due to the time it may take to rematerialise holdings, Shareholders and their nominees are advised to factor in at least two weeks for this process to be effected. The New Shares (and the tax certificate) and share certificate will be issued in the name of the beneficial shareholder but the New Shares can then be transferred back to the nominee as required.
New Shares issued as part of the Enhanced Buyback Facility will be in certificated form. Shareholders can then arrange through their broker or nominees for these New Shares to be subsequently admitted to CREST.
Over time it is possible for a Shareholder to have a number of different registered holdings on the Company's register of members (for example, if different personal details are provided each time new shares are acquired in the Company). An indication of whether a Shareholder has more than one registered holding would be receiving duplicate copies of this Circular for each such holding and potentially having more than one Shareholder Reference Number with Capita Registrars.
If Existing Shares are held in different registered holdings, the maximum participation is up to 24.99% of each holding (i.e. which will amount to 24.99% of Shareholders' aggregate holdings in the Company) and any excess Existing Shares which may be tendered to the extent other Shareholders do not participate or tender up to their basic entitlement. A separate Enhanced Buyback Facility Application Form must be returned in respect of each such holding (together with the relevant share certificate). Additional Enhanced Buyback Facility Application Forms can be requested from Beringea or alternatively the form at the end of this document can be photocopied.
Shareholders should note that the register of members of the Company (which is held by Capita Registrars) is the absolute record of Shareholders' holdings and, as a result, share certificates (whilst an indication of a holding) may not reflect any subsequent transaction undertaken by the Company or a Shareholder.
If a Shareholder has a query as to whether they have more than one registered holding, please contact Capita Registrars (the Company's registrars) on the contact details provided in response to question 15.
Completed Enhanced Buyback Facility Application Forms with a postal address inserted on page 1 of the Enhanced Buyback Facility Application Form which does not match an address of a holding on the Company's register of members will, unless Box 1C is completed, be rejected.
Shareholders who have changed their address or moved house, such that the address for their registered holding(s) on the Company's register of members is not the current address at which such Shareholder now resides (i.e. the address completed on page 1 of the Enhanced Buyback Facility Application Form), are kindly requested to insert the address at which their holding(s) is registered in Box 1C of the Enhanced Buyback Facility Application Form.
Shareholders should note that the register of members of the Company (which is held by Capita Registrars) is the absolute record of Shareholders' registered addresses and, as a result, share certificates may not reflect any change of address which is subsequently advised to Capita Registrars by the Shareholder.
If Box 1C is completed Shareholders will be authorising Capita Registrars to update their registered holding with their new address details and new Share certificates (together with all other future Company literature) will be posted to these new addresses.
If a Shareholder has previously held more than one registered holding on the Company's register of members and that Shareholder has elected to consolidate this holding, such that only one copy of this Circular is received, only one Enhanced Buyback Facility Application Form in respect of that holding will need to be completed. To understand which Existing Shares within a consolidated holding will be deemed to be sold pursuant to the Enhanced Buyback Facility please see the response to question 5. If a Shareholder has a query as to whether they have consolidated their registered holdings, please contact Capita Registrars (the Company's registrars) on the contact details provided in response to question 15.
Shareholders should note that the register of members of the Company (which is held by Capita Registrars) is the absolute record of Shareholders' holdings and, as a result, share certificates (whilst an indication of a holding) may not reflect any subsequent transaction undertaken by the Company or a Shareholder.
The Enhanced Buyback Facility is being completed using a tender offer with a record date to set participation for Basic Entitlements prior to the date of this document. If Existing Shares have been transferred and such transfer has been recorded in the Company's register of members prior to the Record Date, then the transferee should be entitled to participate. However, if the transfer has not been recorded in the Company's register of members prior to the Record Date, then the transferee will not be entitled to participate.
No. The terms of the Enhanced Buyback Facility do not allow Shareholders to obtain cash from the buyback of their Existing Shares. The process requires a Shareholder to agree to reinvest all of the proceeds of sale in New Shares.
Shareholders who have queries about their holdings and/or date(s) of acquisition should contact Capita Registrars to confirm holdings and date(s) of registration on the Register of Members (please telephone Capita Registrars between 9.00 a.m. and 5.30 p.m. (GMT time) Monday to Friday on 0871 664 0300 from within the UK or +44 20 8639 3399 if calling from outside the UK. Calls to the 0871 664 0300 number cost 10 pence per minute (including VAT) plus your service provider's network extras. Calls to the helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. The helpline cannot provide advice on the merits of the Enhanced Buyback Facility nor give any financial, legal, tax or investment advice. Alternatively Shareholders can review details of their holding by registering online with the Registrar at www.capitashareportal.com and entering the relevant Shareholders' Investor Code shown on their share certificate.
If Shareholders have any additional queries on the Enhanced Buyback Facility, please contact Beringea on 020 7845 7820 between 9.00 a.m. and 5.00 p.m., Monday to Friday. Beringea cannot provide advice on the merits of the Enhanced Buyback Facility or give any financial, legal, tax or investment advice.
To apply to participate in the Enhanced Buyback Facility, Shareholders must complete and return the Enhanced Buyback Facility Application Form (at the end of this document), together with their relevant share certificate(s) to Beringea LLP, 39 Earlham Street, London WC2H 9LT post or hand delivered (during normal business hours only) by 12.00 noon on 22 March 2013.
Shareholders should contact Capita Registrars (contact details provided in response to question 15) to arrange to receive a replacement certificate or to complete an indemnity in respect of the lost certificate. Please note that there may be a charge for this service.
Shareholders should consider carefully the following risk factors in addition to the other information presented in this document. If any of the risks described below were to occur, it could have a material effect on the Company's business, financial condition or result of operations. The risks and uncertainties described below (such as changes in legal, regulatory or tax requirements) are not the only ones the Company or Shareholders will face. Additional risks not currently known to the Company or the Board, or that the Company or the Board currently believe are not material, may also adversely affect the Company's business, financial condition or result of operations. The value of the Shares could decline due to any of the risk factors described below, and Shareholders could lose part or all of their investment. Shareholders are strongly recommended to consult a financial or other professional adviser before applying to participate in the Enhanced Buyback Facility.
Levels, bases of, and relief from, taxation are subject to change. Such changes could be retrospective. The tax reliefs described are based on current legislation, practice and interpretation. The ability of Qualifying Investors to secure the tax reliefs available to investors in VCTs depends on their individual circumstances.
Changes in legislation concerning VCTs, in relation to what constitutes qualifying holdings, qualifying trades and qualifying use of funds, may restrict or adversely affect the Company's ability to meet its objectives, and may reduce the returns to Shareholders.
• Whilst it is the intention of the Board that the Company will, ordinarily, buy back New Shares at a discount to NAV of not more than 10%, there can be no guarantee that the Company will buy back New Shares or that if it does the discount to NAV will not be greater than 10%. Share buy backs will be subject to applicable legislation and VCT regulations and the availability of sufficient cash in the Company for followon investments and operational requirements. The number of Shares bought back in each year by the Company will be a maximum of 10% of the number of Shares in issue.
The following paragraphs apply to the Company and to persons holding Shares as an investment who are the absolute beneficial owners of such Shares and are resident in the UK. They may not apply to certain classes of persons, such as dealers in securities. The following information is based on current UK law and practice, is subject to changes therein, is given by way of general summary and does not constitute financial, legal, tax or investment advice.
The tax reliefs set out below are those currently available to individuals aged 18 or over who subscribe for New Shares under the Enhanced Buyback Facility and will be dependent on personal circumstance. Whilst there is no specific limit on the amount of an individual's acquisition of shares in a VCT, tax reliefs will only be given to the extent that the total of an individual's subscriptions or other acquisitions of shares in VCTs in any tax year do not exceed £200,000 (including shares issued pursuant to the Enhanced Buyback Facility). Qualifying Investors who intend to invest more than £200,000 in VCTs in any one tax year should consult their professional advisers.
A Qualifying Investor subscribing for New Shares will be entitled to claim income tax relief on amounts subscribed up to a maximum of £200,000 invested in VCTs in any tax year. To obtain relief, a Qualifying Investor must subscribe on their own behalf, although the New Shares may subsequently be transferred to a nominee. The relief is given at the rate of 30% on the amount subscribed regardless of whether the Qualifying Investor is a higher rate, additional rate or basic rate tax payer, provided that the relief is limited to the amount which reduces the Qualifying Investor's income tax liability to nil. Investments to be used as security for or financed by loans may not qualify for relief, depending on the circumstances.
A Qualifying Investor, who acquires shares in VCTs in any tax year costing up to a maximum of £200,000, will not be liable to income tax on dividends paid on those shares and there is no withholding tax thereon.
A Qualifying Investor who purchases existing shares in the market will be entitled to claim dividend relief (as described in paragraph 1(a)(ii) above) but not relief from income tax on the investment (as described in paragraph 1(a)(i) above).
Relief from income tax on a subscription for VCT shares (including New Shares) will be withdrawn if the VCT shares are disposed of (other than between spouses or on death) within five years of issue or if the VCT loses its approval within this period, as detailed below.
Dividend relief ceases to be available once the Qualifying Investor ceases to own VCT shares in respect of which it has been given or if the VCT loses its approval within this period, as detailed below.
A disposal by a Qualifying Investor of VCT shares will give rise to neither a chargeable gain nor an allowable loss for the purposes of UK capital gains tax. The relief is limited to the disposal of VCT shares acquired within the limit of £200,000 for any tax year.
An individual purchaser of existing shares in the market will be entitled to claim relief from capital gains tax on disposal (as described in paragraph b(i) above).
For a company to be fully approved as a VCT, it must meet the various requirements for full approval as set out below.
If a company which has been granted approval as a VCT subsequently fails to comply with the conditions for approval, approval as a VCT may be withdrawn. In these circumstances, relief from income tax on the initial investment is repayable unless loss of approval occurs more than five years after the issue of the relevant VCT shares. In addition, relief ceases to be available on any dividend paid in respect of profits or gains in any accounting period ending when VCT status has been lost and any gains on the VCT shares up to the date from which loss of VCT status is treated as taking effect will be exempt, but gains thereafter will be taxable.
Investors not resident in the UK should seek professional advice as to the consequences of making an investment in a VCT or in the UK generally.
The disposal of Existing Shares by the Company will be treated, for tax purposes, as a disposal.
Shareholders are reminded that, although Qualifying Investors will receive initial income tax relief of up to 30% of the amount reinvested, no cash proceeds will be received by participating in the Enhanced Buyback Facility.
The disposal is treated as a repayment of the amount originally subscribed for each Existing Share. To the extent that the proceeds of the disposal per Existing Share are greater than the amount originally subscribed in respect of each Existing Share (i.e. not the re-sale price where Existing Shares were purchased from a third party), the Company will be treated as having made a distribution of the amount of the excess (if any). This amount of excess is a distribution received by a Shareholder which is subject to income tax. The whole payment, including the distribution element, may be treated as a capital receipt where the Shareholder is a company.
The Tender Price of an Existing Share, based on the latest published net asset value of the Shares as at 30 November 2012 would be 102.7p. Shareholders will be subject to an income tax charge on any excess of the Tender Price that is above the Original Issue Price of the Shares that are bought back.
A disposal of Existing Shares which have not been held or deemed held for the minimum five-year holding period will be subject to clawback by HMRC of any upfront income tax reliefs obtained on original subscription.
Any capital gains tax deferral relief obtained on subscription for Existing Shares issued before 6 April 2004 in the Company will be crystallised for payment upon their disposal. Where relevant, Shareholders may be able to utilise their annual capital gains tax allowance.
If a Shareholder qualifies for VCT reliefs in respect of the Existing Shares sold, the disposal will give rise to neither a chargeable gain nor an allowable loss for the purposes of capital gains tax. The relief is limited to the disposal of VCT shares acquired within the limit of £200,000 for any tax year.
In respect of other Existing Shares, capital gains tax could be payable where shares were acquired from a third party. If the participating Shareholder acquired the Existing Shares for an amount ("the Purchase Price") less than the Original Issue Price, the part of the Tender Price in excess of the Purchase Price up to the Original Issue Price will be subject to capital gains tax.
If the Tender Price for Existing Shares, which do not qualify for the capital gains tax disposal exemption, is less than the Purchase Price for those shares, Shareholders should be entitled to an allowable loss.
Where a Shareholder acquired Existing Shares on more than one occasion, Existing Shares acquired earlier are treated as having been disposed of prior to Existing Shares acquired later (i.e. first in, first out).
No stamp duty is payable by Shareholders in respect of the Existing Shares sold or the New Shares subscribed.
The Company will pay stamp duty at the rate of 0.5% of the aggregate amount paid for Existing Shares purchased from Shareholders under the Enhanced Buyback Facility.
HMRC have confirmed that usual VCT tax reliefs, including the upfront income tax relief, will be available on the New Shares issued pursuant to the Enhanced Buyback Facility.
The Company will provide to each Qualifying Investor a certificate which the Qualifying Investors may use to claim income tax relief, either by obtaining from HMRC an adjustment to their tax coding under the PAYE system or by waiting until the end of the tax year and using their tax return to claim relief.
Shareholders not resident in the UK should seek their own professional advice as to the consequences of making and holding an investment in a VCT, as they may be subject to tax in other jurisdictions as well as in the UK.
To qualify as a VCT, a company must be approved as such by HMRC. To obtain such approval it must:
The term 'eligible shares' means ordinary shares which do not carry any rights to be redeemed or a preferential right to assets on a winding-up or dividends (in respect of the latter, where the right to the dividend is cumulative or, where the amount or dates of payment of the dividend may be varied by the company, a shareholder or any other person).
A Qualifying Investment consists of shares or securities first issued to a VCT (and held by it ever since) by a company satisfying the conditions set out in Chapters 3 and 4 of Part 6 of the Tax Act.
The conditions are detailed, but include that the company: is a Qualifying Company; has gross assets not exceeding £15 million immediately before and £16 million immediately after the investment; applies the money raised for the purposes of a qualifying trade within certain time periods; cannot be controlled by another company; has fewer than 250 full-time (equivalent) employees; and, including the investment, has not obtained more than £5 million of investment from state aided risk capital measures in any rolling 12 month period. In certain circumstances, an investment in a company by a VCT can be split into a part which is a qualifying holding and a part which is a non-qualifying holding.
From 6 April 2012 there is a 'disqualifying purpose' test under which an investment will not be a qualifying investment if the investee company has been set up for the purpose of accessing tax reliefs or is in substance a financing business.
VCT funds raised after 5 April 2012 cannot be used by a qualifying company to fund the purchase of existing shares in another company.
A Qualifying Company must be unquoted (for VCT purposes this includes companies whose shares are traded on ISDX and AIM) and must carry on a qualifying trade. For this purpose certain activities are excluded (such as dealing in land or shares or providing financial activities). The qualifying trade must either be carried on by, or be intended to be carried on by, the Qualifying Company or by a qualifying subsidiary at the time of the issue of shares or securities to the VCT (and at all times thereafter).
The company must have a permanent establishment in the UK, but the company need not be UK resident. A company intending to carry on a qualifying trade must begin to trade within two years of the issue of shares or securities to the VCT and continue it thereafter.
A Qualifying Company may have no subsidiaries other than qualifying subsidiaries which must, in most cases, be at least 51% owned.
A VCT must be approved at all times by HMRC. Approval has effect from the time specified in the approval by HMRC.
A VCT cannot be approved unless the tests detailed above are met throughout the most recent complete accounting period of the VCT and HMRC is satisfied that they will be met in relation to the accounting period of the VCT which is current when the application is made. However, where a VCT raises further funds, VCTs are given grace periods to invest those funds before such further funds become subject to the tests.
However, to aid the launch of a VCT, HMRC may give provisional approval if satisfied that conditions (b), (c), (f) and (g) in paragraph 1 above will be met throughout the current or subsequent accounting period and condition (d) in paragraph 1 above will be met in relation to an accounting period commencing no later than three years after the date of provisional approval.
The Company has obtained approval as a VCT from HMRC. The Board considers that the Company has conducted its affairs and will continue to do so to enable it to qualify as a VCT.
Approval of a VCT (full or provisional) may be withdrawn by HMRC if the various tests set out above are not satisfied. The exemption from corporation tax on capital gains will not apply to any gain realised after the point at which VCT status is lost.
Withdrawal of approval generally has effect from the time when notice is given to the VCT but, in relation to capital gains of the VCT only, can be backdated to not earlier than the first day of the accounting period commencing immediately after the last accounting period of the VCT in which all of the tests were satisfied.
Withdrawal of provisional approval has effect as if provisional approval had never been given (including the requirement to pay corporation tax on prior gains).
As at 14 February 2013 (this being the latest practicable date prior to the publication of this document), the issued share capital of the Company was as follows:
| Issued and fully paid | ||
|---|---|---|
| No. of Shares | £ | |
| Shares (10p each) | 45,801,961 | 4,580,196.10 |
As at 14 February 2013 (this being the latest practicable date prior to the publication of this document), no share or loan capital of the Company was under option or had been agreed, conditionally or unconditionally, to be put under option, nor did the Company hold any share capital in treasury.
As at 14 February 2013 (this being the latest practicable date prior to publication of this document), the interests of the Directors (and their immediate families) in the issued share capital of the Company were as follows:
| % of Issued | ||
|---|---|---|
| Director | No. of Shares | Share Capital |
| Andrew Davison | 27,563 | 0.06 |
| Barry Dean | 19,753 | 0.04 |
| Malcolm Moss | 2,760 | 0.01 |
As at 14 February 2013 (this being the latest practicable date prior to publication of this document), the Company is not aware of any person who has, directly or indirectly, an interest in the Company's capital or voting rights which is notifiable under UK law (under which, pursuant to CA 2006 and the Listing Rules and the Disclosure & Transparency Rules of the FSA, a holding of 3% or more must be notified to the Company).
Save for the launch by the Company of the Top-up Offer, including the allotment of Shares pursuant thereto on 21 December 2012, there has been no significant change in the financial or trading position of the Company since 31 August 2012, the date to which the Half-Yearly Report was made up to, and the date of this document.
To apply to participate in the Enhanced Buyback Facility, please complete and return the Enhanced Buyback Facility Application Form (at the end of this document), together with your relevant share certificate(s) to Beringea LLP, 39 Earlham Street, London WC2H 9LT by post or hand delivered (during normal business hours only) by 12.00 noon on 22 March 2013.
Please complete all relevant parts of the Enhanced Buyback Facility Application Form(s) in accordance with the following instructions. If multiple registered holdings are applicable please complete separate Enhanced Buyback Facility Application Forms for each such holding by copying the form as necessary.
You are strongly recommended to consult with your financial adviser or seek other professional advice before completing the Enhanced Buyback Facility Application Form, in particular if Existing Shares have not been held or deemed held for five years or capital gains tax deferral attached to the Existing Shares.
A Shareholder should insert in BLOCK CAPITALS, their personal details, including full name, current residential address, date of birth, national insurance number and contact details.
If Existing Shares are held jointly between Shareholders, please insert the first name and address presented on the registered holding.
Completed Enhanced Buyback Facility Application Forms with an address which does not match the address of the holding(s) on the Company's register of members will, save as set out below, be rejected.
Shareholders who have changed their address or moved house, such that the address for their registered holding(s) on the Company's register of members is not the current address at which Shareholders now reside (i.e. the address completed on page 1 of the Enhanced Buyback Facility Application Form), should insert the address at which their holding(s) is registered in Box 1C of the Enhanced Buyback Facility Application Form. If the address inserted in Box 1C does not match the address of the holding(s) on the Company's register of members, the application will be rejected.
By completing Box 1C, Shareholders will be authorising Capita Registrars to update their registered holding with the new address details and new Share certificates (together with all future literature published by the Company) will be posted to this new address.
A Shareholder should insert the number of Existing Shares that they wish to tender in the Enhanced Buyback Facility into Box 1A of the Enhanced Buyback Facility Application Form and Box 1B should be left blank.
If a Shareholder wishes to apply for their Basic Entitlement only to be tendered (i.e. 24.99% of their shareholding as at the Record Date), a cross [x] should be placed in Box 1B of the Enhanced Buyback Facility Application Form and Box 1A should be left blank.
The Enhanced Buyback Facility is open for both the 2012/13 and 2013/14 tax years. Shareholders are requested to complete the two boxes to confirm what number of their Existing Shares tendered pursuant to the Enhanced Buyback Facility are to be bought back and reinvested in which tax year. If neither box is completed then your application will be deemed to be in respect of the 2012/2013 tax year only.
Please sign/execute and date the form in accordance with the instructions thereon. By signing and dating the form, Shareholders will agree to sell Existing Shares and subscribe in their own name or, if completed, the name of the person detailed in Section 3 for New Shares under the terms and conditions of the Enhanced Buyback Facility as set out in this Part VI.
Individual shareholders will need to have their form witnessed by someone that does not have a vested interest in their Shares or is not a family member. For joint shareholders, please ensure all individual registered holders sign and each has their signatures witnessed.
By signing an Enhanced Buyback Facility Application Form, a Shareholder DECLARES THAT:
Shareholders who currently participate in the dividend reinvestment scheme operated by the Company in respect of their Existing Shares will automatically continue in such scheme in respect of their holding of New Shares. Should Shareholders not wish their New Shares to continue in the dividend reinvestment scheme, they should notify the Company's registrars, Capita Registrars accordingly on the details set out on page 16 of this document.
Please insert, in BLOCK CAPITALS, the personal details relating to the beneficial shareholder (please ensure full details are provided including full name, address, date of birth, national insurance number and contact details).
The beneficial shareholder must sign/execute and date the form and in doing so DECLARES that (a) they are the beneficial owner of the Existing Shares being tendered under the Enhanced Buyback Facility, (b) they are not resident in any Restricted Territory, or in any territory in which it is lawful to make or participate, in the Enhanced Buyback Facility or to use the Enhanced Buyback Facility Application Form in any manner in which the person has used or will use it and (c) agrees to use the proceeds of sale of the Existing Shares to subscribe for New Shares, such sale and subscription to be under the terms and conditions of the Enhanced Buyback Facility as set out in this Part VI.
Please provide contact details for the nominee to assist with queries in relation to the application.
Applicants under the Enhanced Buyback Facility should return completed Enhanced Buyback Facility Application Forms, together with share certificates, by 12.00 noon on 22 March 2013 to Beringea LLP, 39 Earlham Street, London WC2H 9LT by post or hand delivered (during normal business hours only).
The following terms and conditions apply to the Enhanced Buyback Facility.
Save where the context otherwise requires, words and expressions defined in the Definitions section of this document have the same meanings when used in these terms and conditions and the Enhanced Buyback Facility Application Form.
The section headed "Enhanced Buyback Facility Application Procedure" in this Part VI and the Enhanced Buyback Facility Application Form form part of these terms and conditions of application.
(ii) also entitled to apply to tender additional Existing Shares in excess of their Basic Entitlement up to 100% of their holding and which will be satisfied to the extent other Shareholders do not participate for their Basic Entitlement up to the maximum amount available for purchase under the Enhanced Buyback Facility (i.e. 11,445,910 Existing Shares) (such excess available will be allocated pro rata to the number of Existing Shares in excess of Basic Entitlements tendered, rounded down to the nearest whole number of shares and subject to the discretion of the Board).
(h) If the Board considers that the Company does not have sufficient reserves and/or available proceeds from a fresh issue of shares in the Company to lawfully implement the Enhanced Buyback Facility in full or that implementing the Enhanced Buyback Facility in respect of valid applications received would result in the Company having insufficient reserves and/or available proceeds for ongoing purposes (taking into account reserves expected to be created), the Board may reduce the maximum number of Existing Shares to be purchased under the Enhanced Buyback Facility and a Shareholder's entitlement to participate up to his or her Basic Entitlement will be reduced accordingly.
mails or any such means, instrumentality or facility in connection with the Enhanced Buyback Facility and so doing will render invalid any related purported acceptance of the Enhanced Buyback Facility. All accepting Shareholders (and, where relevant, all beneficial holders of Existing Shares) must provide addresses outside the Restricted Territories for the return of documents lodged pursuant to the Enhanced Buyback Facility.
referred to in the Circular and the Enhanced Buyback Facility Application Form and that, once lodged, such offers are irrevocable;
further agrees that, having had the opportunity to read this document, it will be deemed to have had notice of all information in relation to the Company contained in the Circular;
event of more than one person executing an Enhanced Buyback Facility Application Form, the provisions of this paragraph shall apply to them jointly and to each of them.
(z) The terms of the Enhanced Buyback Facility shall have effect subject to such non-material modifications as the Board sees fit.
| "Admission" | the date(s) on which New Shares allotted pursuant to the Enhanced Buyback Facility are listed on the Official List of the UK Listing Authority and admitted to trading on the London Stock Exchange's main market for listed securities |
|---|---|
| "AIM'' | the Alternative Investment Market, a market operated by the London Stock Exchange |
| "Articles'' | the articles of association of the Company, as amended from time to time |
| "Basic Entitlement" | the entitlement of each Shareholder to tender 24.99% of their Existing Shares pursuant to the Enhanced Buyback Facility, rounded down to the nearest whole number |
| "Beringea" | Beringea LLP |
| "Board" | the board of directors of the Company |
| "Broker" | Panmure Gordon (UK) Limited (or such other broker as the Company may appoint to act as its agent to implement the Enhanced Buyback Facility) |
| "Business Day" | any day (other than a Saturday) on which clearing banks are open for normal banking business in Sterling |
| "CA 2006" | the Companies Act 2006, as amended from time to time |
| "Capita Registrars" | a trading name of Capita Registrars Limited, the Company's registrars |
| "Circular" | this document |
| "Company'' | ProVen VCT plc |
| "CREST" | the central securities depository for the UK markets |
| "Directors" | the directors of the Company (and each a "Director") |
| "Enhanced Buyback Facility" | the enhanced buyback facility in respect of Existing Shares as contained in this document |
| "Enhanced Buyback Facility Application Form" |
the application form in respect of the Enhanced Buyback Facility at the end of this document |
| "Enhanced Buyback Facility Terms and Conditions" |
the terms and conditions of the Enhanced Buyback Facility set out in Part VI of this document |
| "Existing Shares" | Shares on the register at 5.00 p.m. on 14 February 2013 (and each an "Existing Share") |
| "FSA'' | the Financial Services Authority |
| "FSMA'' | the Financial Services and Markets Act 2000, as amended |
| "General Meeting" | the general meeting of the Company to be held on 21 March 2013 |
| "Half-Yearly Report" | the unaudited half-yearly report and accounts of the Company for the six month period ended 31 August 2012 |
| "HMRC" | HM Revenue & Customs |
|---|---|
| "ISDX" | the ICAP Securities & Derivatives Exchange, a prescribed market for the purposes of section 118 of FSMA |
| "Issue Price" | a price equal to the most recently published net asset value per Share at the time of issue of New Shares pursuant to the Enhanced Buyback Facility (adjusted for any dividends subsequently paid), divided by 0.97 and rounded up to the nearest 0.1p |
| "Listing Rules'' | the listing rules of the UKLA |
| "London Stock Exchange'' | London Stock Exchange plc |
| "NAV'' or ''net asset value'' | net asset value of the Company or as applicable, a Share, calculated in accordance with the Company's normal accounting policies |
| "New Shares" | new Shares to be issued by the Company pursuant to the Enhanced Buyback Facility (and each a ''New Share'') |
| "Official List" | the Official List of the UKLA |
| "Original Issue Price" | the price at which Existing Shares were originally issued by the Company (adjusted to reflect any consolidation or conversion of the Existing Shares) |
| "Overseas Beneficial Holders" | beneficial holders of Shares who are resident in, or citizens of, a jurisdiction outside the UK (and each an "Overseas Beneficial Holder") |
| "Overseas Shareholders" | Shareholders who are resident in, or citizens of, a jurisdiction outside the UK (and each an "Overseas Shareholder") |
| "Panmure Gordon" | Panmure Gordon (UK) Limited |
| "Proposals" | the Enhanced Buyback Facility, the cancellation of share premium and capital redemption reserves and the Resolutions to be proposed at the General Meeting |
| "Qualifying Companies" | unquoted (including an AIM or ISDX listed) companies which satisfy the requirements of Chapter 4 of Part 6 of the Tax Act (and each a "Qualifying Company") |
| "Qualifying Investments" | investments in a Qualifying Company satisfying the requirements of Chapter 4 of Part 6 of the Tax Act (and each a "Qualifying Investment") |
| "Qualifying Investors" | individuals aged 18 or over who satisfy the conditions of eligibility for VCT tax reliefs (and each a "Qualifying Investor") |
| "Qualifying Shareholders" | Qualifying Investors who hold Shares (and each a "Qualifying Shareholder") |
| "Receiving Agent" | Beringea, in its capacity as the receiving agent to the Enhanced Buyback Facility |
| "Record Date" | the record date pursuant to which Shareholders' entitlements will be allocated pursuant to the Enhanced Buyback Facility, this being 5.00 p.m. on 14 February 2013 |
| "Resolutions'' | the resolutions to be proposed at the General Meeting (and each a "Resolution") |
|---|---|
| "Restricted Territories" | United States of America, Canada, Australia, Japan and South Africa (and each a "Restricted Territory") |
| "Shareholders'' | holders of Shares (and each a "Shareholder") |
| "Shares'' | ordinary shares of 10p each in the capital of the Company (and each a "Share'') |
| "Sterling" | the official name for the standard monetary unit of the UK |
| "Tax Act" | Income Tax Act 2007, as amended from time to time |
| "Tender Price" | a price equal to the most recently published net asset value per Share at the time of purchase of Existing Shares pursuant to the Enhanced Buyback Facility (adjusted for any dividends subsequently paid), rounded down to the nearest 0.1p |
| "Top-up Offer" | the top-up offer for subscription for Shares, as described in the top up offer issued by the Company dated 19 November 2012 |
| "UK" | the United Kingdom of Great Britain and Northern Ireland |
| "UKLA'' or "UK Listing Authority'' | the UK Listing Authority, being the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part VII of the Financial Services and Markets Act 2000 |
| "United States" | the United States of America, its states, territories and possessions including the District of Columbia |
| "VCT'' or "venture capital trust" | a company satisfying the requirements of Chapter 3 of Part 6 of the Tax Act for venture capital trusts |
| "VCT Value" | the value of an investment calculated in accordance with Section 279 of the Tax Act |
Notice is hereby given that a general meeting of ProVen VCT plc ("the Company") will be held at the offices of Beringea LLP, 39 Earlham Street, London WC2H 9LT at 10.00 a.m. on 21 March 2013, for the purposes of considering and, if thought fit, passing the following resolutions which will be proposed as special resolutions.
That, in addition to existing authorities:
(i) the Company be generally and unconditionally authorised pursuant to Section 701 of the Companies Act 2006 ("the Act") to make market purchases (within the meaning of Section 693(4) of the Act) of its shares of up to 11,445,910 of its own shares at a fixed price equal to the latest published net asset value per share prior to the date of purchase (adjusted for any dividends subsequently paid and rounded down to the nearest 0.1p), and such fixed price shall, for the purposes of Section 701(3)(b) of the Act, constitute both the maximum and minimum price that may be paid for the shares purchased, pursuant to, or in contemplation of, an enhanced buyback facility;
and the authority and powers conferred by this resolution shall expire on the conclusion of the annual general meeting of the Company to be held in 2013, save that the Company may, before such expiry, make offers or agreements which would or might require shares to be allotted and purchased and the directors may allot and purchase shares in pursuance of such offer or agreement notwithstanding that the authority conferred by this resolution has expired.
Dated 15 February 2013
By order of the Board Registered Office: Grant Whitehouse 39 Earlham Street Company Secretary London
WC2H 9LT
In either case the revocation notice must be received by Beringea LLP before the General Meeting or the holding of a poll subsequently thereto. If a member attempts to revoke his or her proxy appointment but the revocation is received after the time specified then, subject to Note (d) directly below, the proxy appointment will remain valid.
(g) As at 14 February 2013, the Company's issued share capital comprised 45,801,961 Shares. The total number of voting rights in the Company as at 14 February 2013 is, therefore, 45,801,961. Information on the number of Shares and voting rights can be found at www.provenvcts.com.
(h) If you are a person who has been nominated under section 146 of the Companies Act 2006 to enjoy information rights ("Nominated Person"):
| I/We* (Block Capitals Please) |
|
|---|---|
| of being a shareholder(s) of the above-named Company, appoint the Chairman of the General Meeting or |
|
for the following number of shares (insert number or all)
to act as my/our* proxy to vote for me/us* and on my/our* behalf at the General Meeting of the Company to be held at the offices of Beringea LLP, 39 Earlham Street, London WC2H 9LT at 10.00 a.m. on 21 March 2013 (see note 1 below) and at every adjournment thereof and to vote for me/us on my/our behalf as directed below.
Please indicate with an 'X' if this is one of multiple proxy instructions being given
The proxy is directed to vote as follows:
| Resolutions | For | Against | Discretion | Vote Withheld |
||
|---|---|---|---|---|---|---|
| 1. | Composite resolution to approve the issue and repurchase of shares in connection with an enhanced buyback facility |
Special | ||||
| 2. | Approve the cancellation of the share premium account and capital redemption reserve |
Special |
Signature .................................................................................................. Dated ...................................... 2013
* Delete as appropriate.
Notes:
✃
Before completing this Enhanced Buyback Facility Application Form you should read the circular issued by the Company dated 15 February 2013 ("Circular"). Definitions used in the Circular apply herein.
This document is important and requires your immediate attention. If you are in any doubt as to what action you should take, in particular if you have not held or deemed to have held your Existing Shares for five years or capital gains tax deferral attached to the Existing Shares, you are recommended to consult a person authorised under the Financial Services and Markets Act 2000 who specialises in advising upon investment in shares and other securities, without delay.
The Enhanced Buyback Facility is only being made available to Shareholders (other than certain Overseas Shareholders) on the register on 14 February 2013. The Enhanced Buyback Facility is not being made, directly or indirectly, in or into a Restricted Territory. The distribution of this and any accompanying documents into a Restricted Territory is or may be restricted by law and therefore persons into whose possession this form and accompanying documents come should inform themselves about, and observe, such restrictions. Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction. Any person (including, without limitation, custodians, nominees and trustees) who may have a contractual or legal obligation to forward this Enhanced Buyback Facility Application Form and its accompanying documents should read the section headed 'Overseas Shareholders and Overseas Beneficial Holders' in Part VI of the Circular before taking any action.
The Enhanced Buyback Facility is conditional on the approval of Resolution 1 to be proposed at the General Meeting to be held on 21 March 2013. If this resolution is not approved, the Enhanced Buyback Facility will be withdrawn.
AN APPLICATION UNDER THE ENHANCED BUYBACK FACILITY MAY ONLY BE MADE BY ELIGIBLE SHAREHOLDER(S) ON THE REGISTER ON 14 FEBRUARY 2013. IT IS NOT A NEGOTIABLE DOCUMENT OR A DOCUMENT OF TITLE AND CANNOT BE TRADED. This Enhanced Buyback Facility Application Form is for use by eligible Shareholder(s) only and cannot be sold, assigned, transferred, or split. Nominees who wish to participate in respect of multiple beneficial shareholders may photocopy this form and/or can contact Beringea on the details below.
| SECTION 1 – EXISTING SHARES TO BE TENDERED TO BE COMPLETED BY ALL SHAREHOLDERS PARTICIPATING IN THE ENHANCED BUYBACK FACILITY |
||
|---|---|---|
| Title: Mr/Mrs/Miss/Dr/Other: | Telephone (mobile): | |
| Forename(s): | Telephone (home): | |
| Surname: | Email address: | |
| Current address:* | National insurance number: | |
| Date of Birth: |
* If this is not the address shown on the Company's register of members, please also complete Box 1C below.
✃
| Box 1A (see note 1 below) Insert in this box the number of Existing Shares for which your application is made |
OR | Box 1B (see note 2 below) Place a cross [x] in this box to apply for your Basic Entitlement only |
|---|---|---|
| Tax year to which your application relates: | ||
| Insert in this box the number of Existing Shares for which your application is for the 2012/2013 tax year or insert 'All' |
Insert in this box the number of Existing Shares for which your application is for the 2013/2014 tax year or insert 'All' |
Completed application forms for the Enhanced Buyback Facility must be returned by no later than 12.00 noon on 22 March 2013, together with existing share certificates, to Beringea LLP, 39 Earlham Street, London WC2H 9LT by post or hand delivered (during normal business hours).
Shareholders who have queries in respect of their holdings and/or date(s) of acquisition should contact the Company registrars, Capita Registrars between 9.00 a.m. and 5.30 p.m. (GMT time) Monday to Friday on 0871 664 0300 from within the UK or +44 20 8639 3399 if calling from outside the UK. Calls to the 0871 664 0300 number cost 10 pence per minute (including VAT) plus your service provider's network extras. Calls to the helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. The helpline cannot provide advice on the merits of the Enhanced Buyback Facility nor give any financial, legal, tax or investment advice.
For all other additional queries on the Enhanced Buyback Facility, please contact Beringea on 020 7845 7820 between the hours of 9.00 a.m. and 5.00 p.m. on any Business Day. No financial, legal, tax or investment advice will be given.
ALL SHAREHOLDERS - PLEASE SIGN AND DATE THE ENHANCED BUYBACK FACILITY APPLICATION FORM AT SECTION 2.
APPLICATIONS BY A NOMINEE WHERE THE PROCEEDS ARE TO BE REINVESTED FOR A BENEFICIAL SHAREHOLDER - PLEASE ARRANGE FOR THE BENEFICIAL SHAREHOLDER TO ALSO COMPLETE, SIGN AND DATE SECTION 3.
If the address you have completed in the above section of this Enhanced Buyback Facility Application Form is not the address which is on the Company's register of members in respect of the Existing Shares for which your application is being made, please insert in the box below the address which is on the Company's register of members for identification purposes. Please note that, by completing Box 1C, you will be authorising Capita Registrars to update the address details of your registered holding on the Company's register of members with the new address details inserted above and your new Share certificate(s) (together with all future literature published by the Company) will be posted to this new address.
Address:
By signing this Enhanced Buyback Facility Application Form at Section 2 or 3, you agree to sell the number of Existing Shares detailed in Box 1A or 1B at the Tender Price and have the proceeds of sale used to purchase New Shares at the Issue Price in your name or, if completed, the name of the person detailed in Section 3, on the terms and conditions of the Enhanced Buyback Facility contained in the Circular. In the event of inadequate share certificates being received, applications will be rejected.
| Signature(s) of Applicant(s) | Signature(s) of Witness(es) | Name and address of Witness(es) |
|---|---|---|
Individual shareholders will need to have their form witnessed by someone that does not have a vested interest in the Shares or is not a family member. Where Section 3 has been completed, a nominee should also countersign this Section 2.
(*delete as appropriate)
OR
| Name | Signature | |
|---|---|---|
| Director |
AND
| Signature(s) of Applicant(s) | Signature(s) of Witness(es) | Name and address of Witness(es) |
|---|---|---|
Data Protection
Beringea LLP and Capita Registrars may use the information you give for administration, research and statistical purposes. Information provided by you will be held in confidence by Beringea LLP and Capita Registrars and will not be passed on to any other product or service companies. Your details may be used by Beringea LLP and Capita Registrars to send you information on other products and services they offer. If you would prefer not to receive such information, please tick this box.
Beneficial shareholder to complete details.
| Title: Mr/Mrs/Miss/Dr/Other: | Telephone (mobile): | |
|---|---|---|
| Forename(s): | Telephone (home): | |
| Surname: | Email address: | |
| Current address: | National insurance number: | |
| Date of Birth: |
By signing this Enhanced Buyback Facility Application Form the beneficial shareholder agrees to subscribe for New Shares at the Issue Price (such subscription monies to be satisfied from the proceeds of sale of the Shares) on the terms and conditions of the Enhanced Buyback Facility contained in the Circular. In the event of inadequate information being received, applications will be rejected. Evidence of identity may be requested.
| Signature(s) of Applicant(s) | Signature(s) of Witness(es) | Name and address of Witness(es) |
|---|---|---|
| Telephone: | Email: |
|---|---|
The nominee should have also counter signed this form in Section 2.
✃
Directors Andrew Davison (Chairman) Barry Dean Malcolm Moss
39 Earlham Street London WC2H 9LT
Enhanced Buyback Facility enquiries to Beringea: Telephone: 020 7845 7820
Company Number: 03911323
Beringea LLP Grant Whitehouse 39 Earlham Street 39 Earlham Street London London WC2H 9LT WC2H 9LT
Website: www.provenvcts.com
No.1 Colmore Square One New Change Birmingham London B4 6AA EC4M 9AF
Capita Registrars PKF (UK) LLP The Registry Farringdon Place 34 Beckenham Road 20 Farringdon Road Beckenham London Kent EC1M 3AP BR3 4TU
Website: www.capitaregistrars.com
Shareholder Helpline: 0871 664 0300
SGH Martineau LLP Panmure Gordon (UK) Limited
Calls cost 10p per minute plus network extras From outside the UK: +44 (0) 20 8639 3399 Calls from outside the UK will be charged at applicable international rates Lines open from 9.00 a.m. until 5.30 p.m. (Monday to Friday) Email: [email protected]
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