Registration Form • Jan 29, 2020
Registration Form
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Registration Document
ProVen VCT plc
ProVen Growth & Income VCT plc
| Risk Factors | 2 |
|---|---|
| Part 1 – The Manager and the Boards | 4 |
| Part 2 – The Manager | 13 |
| Part 3 –Investment Policies | 16 |
| Part 4 – Financial Information on the Companies | 19 |
| Part 5 – Portfolio Information on the Companies | 24 |
| Part 6 – Material Contracts | 30 |
| Part 7 –Other Information Relating to the Companies | 36 |
| Definitions | 43 |
Page No.
As a prospective Investor there are a number of risk factors which you should be aware of before investing in the New Ordinary Shares. Prospective Investors should read the whole of the Prospectus and not rely solely on the information in the sections entitled "Risk Factors".
The Directors consider the following risks relating to the Companies to be material for potential Investors, but the risks listed below do not necessarily comprise all those associated with investment in the Companies. Additional risks and uncertainties currently unknown to the Directors (such as changes in legal, regulatory or tax requirements), or which the Directors currently believe are immaterial, may also have a materially adverse effect on either Company. Material risks relating to the New Ordinary Shares are set out in the Securities Note.
The Companies are managed by Beringea, which has over 30 years' experience of managing investments in unquoted companies and has managed the Companies since they were launched, in 2001 in the case of PGI VCT and in 2000 in the case of ProVen VCT. Further details of the investment management arrangements between Beringea and the Companies are set out in Part 6.
The investment management team comprises eleven executives, who have more than 90 years' combined experience of making venture capital investments. Details of the investment management team are set out in the Securities Note.
The Directors of each Company have overall responsibility for their Company's affairs, including monitoring the performance of the Manager and ensuring that the VCT status of their Company is maintained.
The Directors, all of whom are non-executive, have experience of corporate governance of listed companies. A majority of the Directors of each Company are independent of the Manager.
Neal was formerly a corporate finance partner of PwC with extensive experience as a lead adviser on M&A activity in the pharmaceuticals and healthcare sectors. Neal is currently a non-executive director and chairman of the audit committee of Octopus AIM VCT Plc, and a non-executive director of Polar Capital Global Healthcare Trust plc.
Barry has over 30 years' experience in the venture capital industry, including 14 years as Managing Director of Dresdner Kleinwort Benson Private Equity Limited, a longstanding "mid-market" private equity fund manager. He is currently a director of Downing One VCT plc and Draper Esprit VCT plc.
Malcolm is a Founding Partner of Beringea LLP. Over the last 30 years he has been responsible for the growth, development and management of Beringea in both the UK and the USA. In addition to sitting on the boards of ProVen VCT plc and ProVen Growth & Income VCT plc, he sits on the investment committees of Beringea Group's US funds.
Lorna was formerly an Executive Director of Numis Corporation plc and a Director of WestLB Panmure Limited and S G Warburg Securities. She is a non-executive Director of Euromoney Institutional Investor plc, Finsbury Growth and Income Trust plc, Jupiter UK Growth Investment Trust and Rightmove plc and chairman of Dowgate Capital Limited.
Marc started his career as a corporate financier with County NatWest in 1984. In 1991, he set up his own management consultancy specialising in the media sector. In 1997 he became Chief Executive of one of London's largest groups of theatres, cinemas and TV companies (Crescent Entertainment). Subsequently, he became Chief Executive of First Call International. He is co-founder and CEO of Pocket Living, the first private developer in London to specialise in helping hard-working city makers, on low to moderate incomes, own their first home with backing from the Mayor of London and Related Companies in New York.
Natasha Christie-Miller leads the digital intelligence brands WGSN, Coloro, Glenigan, Groundsure, DeHavilland and content and events brands Retail Week and World Retail Congress and the festival business Money20/20 at Ascential plc, the global information company. She started her career in sales and led the commercial teams on consumer brands such as Elle, Red and the EMAP parenting portfolio before taking on the role of Publishing Director of Drapers, the fashion industry bible at EMAP B2B in 2005. She then became Managing Director for the retail portfolio in 2007. Natasha was appointed CEO of EMAP in 2010 and CEO and President of Ascential in 2015.
Malcolm is a Founding Partner of Beringea LLP. Over the last 30 years he has been responsible for the growth, development and management of Beringea in both the UK and the USA. In addition to sitting on the boards of ProVen VCT plc and ProVen Growth & Income VCT plc, he sits on the investment committees of Beringea Group's US funds.
James was formerly managing director of Creditanstalt Investment Bank AG's subsidiary in London, where he had previously established Creditanstalt Bankverein's development capital activity. He has been a nonexecutive director of a number of quoted and unquoted companies and now works as an independent venture capitalist.
Anna has over 22 years of experience building and scaling successful businesses. She is currently Chief Product Officer at TotallyMoney, a fast-growing fintech that provides credit scores and reports to consumers and algorithmically matches them to suitable financial products. Previously, she has led product teams at companies including JustGiving, Evrythng, Monitise and Skype. She is also the founder of ScaleupLean, an advisory business providing strategy consultancy to technology companies.
Each Board is responsible for the overall control and management of their respective Company with responsibility for its affairs, including determining its investment policy. However, investment proposals will be originated by Beringea and formally approved by Beringea's investment committee. The investment committee has full discretion to make investment decisions on behalf of each Company.
Each Board will meet regularly throughout the year (normally at least quarterly), and all necessary information will be supplied to the Directors on a timely basis to enable them to discharge their duties effectively. Additionally, special meetings will take place or other arrangements made when Board decisions are required in advance of regular meetings.
The provisions of the UK Corporate Governance Code have been complied with by each Company for their last respective financial year and up to the date of this document except as set out below:
Each of the Boards consider that these provisions are not relevant to their respective Company, being externally managed investment companies. In particular, all of the Companies' day-to-day management and administrative functions are outsourced to third parties and the Boards understand that the Investment Manager has whistleblowing procedures in place. As a result, the Companies have no executive directors, employees or internal operations.
ProVen VCT has an Audit Committee, which in the last financial year comprised Barry Dean, as Chairman, Neal Ransome and Lorna Tilbian. The committee is expected to meet not less than twice a year and has defined terms of reference and duties. ProVen VCT's auditors and other individuals may be invited to attend meetings of the audit committee. The committee has responsibility for, among other things, planning and reviewing ProVen VCT's annual and half year financial statements, making recommendations as to the appointment, reappointment and removal of, and overseeing the relationship with, its auditors, keeping under review ProVen VCT's internal controls and risk management systems, and considering matters of corporate governance. The audit committee also oversees the ProVen VCT's compliance with legal requirements, accounting standards, financial and regulatory reporting requirements, the Listing Rules and the Disclosure Guidance and Transparency Rules and ensures that effective systems for internal financial control and for reporting nonfinancial operating data are maintained. The ultimate responsibility for reviewing and approving the annual report and accounts and half year reports of ProVen VCT will remain with its Board.
ProVen VCT has a Remuneration Committee, which in the last financial year comprised all of its independent Directors, with Neal Ransome as Chairman. It is expected to meet at least once a year. Professional advisers and other persons with relevant experience may be invited to attend meetings of this committee. The committee has responsibility for determining, within agreed terms of reference, ProVen VCT's policy on the remuneration of its Directors. Under such terms of reference the committee will have the power to review the remuneration payable to its Directors, the terms of service agreements of such Directors and the terms of their severance arrangements. The committee gives full consideration to the UK Corporate Governance Code.
ProVen VCT has a Nomination Committee, which in the last financial year comprised all independent Directors and was chaired by Neal Ransome. It is expected to meet at least once a year. The committee's primary function is to make recommendations to the Board on all new appointments and also to advise generally on issues relating to Board composition and balance.
In addition to the Company, the ProVen VCT Directors are currently, or have been within the last five years, members of the administrative, management or supervisory bodies or partners of the companies and partnerships mentioned below.
| Current Directorships/Partnerships | Past Directorships/Partnerships (five years) |
|---|---|
| Octopus AIM VCT plc | Quercus (General Partner) Limited |
| Polar Capital Global Healthcare Trust plc | Parity Group plc |
| PCGH ZDP plc |
Barry Dean
| Current Directorships/Partnerships | Past Directorships/Partnerships (five years) |
|---|---|
| Downing One VCT plc | Downing Absolute Income VCT 2 plc (dissolved) |
| Draper Esprit VCT plc | |
| St James Limited Partnership | |
| St James II Limited Partnership |
| Current Directorships/Partnerships | Past Directorships/Partnerships (five years) |
|---|---|
| ProVen Holdings Limited | Vigilant Applications Limited |
| Donatantonio Group Limited | F50080 plc |
| Cogora Group Limited | Angelina Ballerina Limited (dissolved) |
| ProVen Growth & Income VCT plc | Rapid Charge Grid Limited |
| GRF II Special Partner (GP) Limited | Cravenstreet Limited (dissolved) |
| ProVen Private Equity Limited | Watchfinder.co.uk Limited |
| Beringea Limited | Chargemaster Limited |
| ProVen Acquisition Limited | Think Limited |
| ProVen Holdings Limited | |
| Global Rights Development Limited | |
| Disposable Cubicle Curtains Limited | |
| ProVen Planned Exit VCT plc* | |
| Beringea LLP | |
| Beringea LLC | |
| Litchfield Media Limited | |
| ProVen Legacy plc |
| Current Directorships/Partnerships | Past Directorships/Partnerships (five years) |
|---|---|
| Rightmove Plc | Numis Corporation plc |
| Euromoney Institutional Investor Plc | Numis Securities Limited |
| Jupiter UK Growth Investment Trust plc | Pitchcroft Limited (in members voluntary |
|---|---|
| liquidation) | |
| Finsbury Growth & Income Trust Plc | Pitchwell Limited (in members voluntary |
| liquidation) | |
| Dowgate Capital Limited | M&C Saatchi Plc |
* in members voluntary liquidation prior to being dissolved
Save as set out above, there were no bankruptcies, receiverships or liquidations or administrations of any companies or partnerships where any of the ProVen VCT Directors were acting as (i) a member of the administrative, management or supervisory body or (ii) a senior manager, during the previous five years.
There have been no official public incriminations of and/or sanctions on any ProVen VCT Director by statutory or regulatory authorities (including designated professional bodies) and no ProVen VCT Director has ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of a company or from acting in the management or conduct of the affairs of any company during the previous five years. None of the ProVen VCT Directors have any convictions in relation to fraudulent offences during the previous five years.
PGI VCT has an Audit Committee, comprising James Stewart, as Chairman, Marc Vlessing and Natasha Christie-Miller. The committee is expected to meet not less than twice a year and has defined terms of reference and duties. PGI VCT's auditors and other individuals may be invited to attend meetings of the audit committee. The committee has responsibility for, among other things, planning and reviewing the PGI VCT's annual and half year financial statements, making recommendations as to the appointment, re-appointment and removal of, and overseeing the relationship with, its auditors, keeping under review the PGI VCT's internal controls and risk management systems, and considering matters of corporate governance. The audit committee also oversees the PGI VCT's compliance with legal requirements, accounting standards, financial and regulatory reporting requirements, the Listing Rules and the Disclosure Guidance and Transparency Rules and ensures that effective systems for internal financial control and for reporting non-financial operating data are maintained. The ultimate responsibility for reviewing and approving the annual report and accounts and half year reports of PGI VCT will remain with its Board.
PGI VCT has a Remuneration Committee, comprising Marc Vlessing and Natasha Christie-Miller , with Marc Vlessing as Chairman. It is expected to meet at least once a year. Professional advisers and other persons with relevant experience may be invited to attend meetings of this committee. The committee has responsibility for determining, within agreed terms of reference, PGI VCT's policy on the remuneration of its Directors. Under such terms of reference the committee will have the power to review the remuneration payable to its Directors, the terms of service agreements of such Directors and the terms of their severance arrangements. The committee gives full consideration to the UK Corporate Governance Code.
The Board of PGI VCT has appointed a Nomination Committee, comprising Marc Vlessing and Natasha Christie-Miller, with Marc Vlessing as Chairman. It is expected to meet at least once a year. The committee's primary function is to make recommendations to the Board on all new appointments and also to advise generally on issues relating to Board composition and balance.
In addition to the Company, the Directors of PGI VCT are currently, or have been within the last five years, members of the administrative, management or supervisory bodies or partners of the companies and partnerships mentioned below.
| Current Directorships/Partnerships | Past Directorships/Partnerships (five years) | |
|---|---|---|
| Pocket Living (Greenwich Peninsula) Limited | Octopus Eclipse VCT 2 plc (dissolved) * | |
| Pocket Living Limited | The Aldeburgh Cinema (Property) Limited | |
| Pocket Money Limited | UB6 Sudbury Management Company Limited | |
| Pocket Living (Holdings) Limited | Pocket Living (Bath Road) Limited (dissolved) | |
| PL Marcon Place Limited | Bath Road TW4 Management Company Limited | |
| Pocket Living (Sudbury Arms) Limited | (dissolved) | |
| Pocket Living (Q1 2015) plc | Fermoy Road Management Company Limited | |
| Pocket Living (2013) LLP | 19-24 Marcon Place Management Company Limited | |
| Pocket Living (Holdings) II Limited | Vlessing & Taverne Limited | |
| Pocket Rosina Street Limited | ||
| Credon House Limited | Western Road (Ealing) Residents Management | |
| Pocket Living KX Limited | Company Limited | |
| Pocket Living Pledgeco Holdings Limited | Aldeburgh Cinema Trust Limited (The) | |
| Pocket Living Kerswell Close Limited | ||
| Pocket Living Osier Way Limited | ||
| Pocket Living Mezzanine Limited | ||
| Pocket Living 2017 Limited | ||
| Pocket Living Gardner Close Limited | ||
| Pocket Living Varcoe Road Limited | ||
| Pocket Living Whiting Avenue Limited | ||
| Pocket Living Mezzanine Holdings Limited | ||
| Pocket Living 2017 Holdco Limited | ||
| Pocket Living West Green Place Limited | ||
| Pocket Living Pledgeco Limited | ||
| Pocket Living Bollo Lane Limited | ||
| Pocket Living Gainsford Road Limited | ||
| Pocket Living Rosina St Limited | ||
| Pocket Living Leigham Court Limited | ||
| Pocket Living (Addiscombe Grove) Limited | ||
| Pocket Living Sudbury Limited | ||
| Pocket Living Mapleton Limited | ||
| Pocket Living (Weedington Road) Limited | ||
| Pocket Living Keston Depot Limited | ||
| Pocket Living Ossory Road Limited | ||
| Pocket Living Woodside Limited |
| Current Directorships/Partnerships | Past Directorships/Partnerships (five years) | |
|---|---|---|
| Groundsure Limited | EMAP Publishing Limited | |
| De Havilland Information Services Limited | MEED Media FZ LLC | |
| Glenigan Limited | Professional Publishers Association Limited | |
| FIPP Limited | ||
| Plexus Network Limited | ||
| Ascential UK Holdings Limited |
| Current Directorships/Partnerships | Past Directorships/Partnerships (five years) | |
|---|---|---|
| ProVen Holdings Limited | Vigilant Applications Limited | |
| Donatantonio Group Limited | F50080 plc | |
| Cogora Group Limited | Angelina Ballerina Limited (dissolved) | |
| ProVen Growth & Income VCT plc | Rapid Charge Grid Limited | |
| GRF II Special Partner (GP) Limited | Cravenstreet Limited (dissolved) | |
| ProVen Private Equity Limited | Watchfinder.co.uk Limited | |
| Beringea Limited | Chargemaster Limited | |
| ProVen Acquisition Limited | Think Limited | |
| ProVen Holdings Limited | ||
| Global Rights Development Limited | ||
| Disposable Cubicle Curtains Limited | ||
| ProVen Planned Exit VCT plc* | ||
| Beringea LLP | ||
| Beringea LLC | ||
| Litchfield Media Limited | ||
| ProVen Legacy plc |
| Current Directorships/Partnerships | Past Directorships/Partnerships (five years) |
|---|---|
| Scaleup Lean Limited |
James Stewart
| Current Directorships/Partnerships | Past Directorships/Partnerships (five years) |
|---|---|
| Auriol Road 37 Limited |
Save as disclosed above, there were no bankruptcies, receiverships or liquidations or administrations of any companies or partnerships where any of the Directors of PGI VCT were acting as (i) a member of the administrative, management or supervisory body, or (ii) a senior manager during the previous five years.
There have been no official public incriminations of and/or sanctions on any Director of PGI VCT by statutory or regulatory authorities (including designated professional bodies) and no Director of PGI VCT has ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of a company or from acting in the management or conduct of the affairs of any company during the previous five years. None of the Directors of PGI VCT have any convictions in relation to fraudulent offences during the previous five years.
The Companies have set an objective of paying dividends each year which will equate to a yield of approximately 5% of net asset value. Dividend payments will, however, depend on the amount and timing of profits from the realisation of investments, which cannot be guaranteed. There is no certainty that any dividends will be paid. The Companies may pay a special dividend in addition to the target 5% yield in the event of there being a realisation, or series of realisations, from the portfolio which results in an exceptionally large gain. For the three financial years ended 29 February 2017, 28 February 2018 and 28 February 2019, ProVen VCT has paid tax free dividends of 5.0p, 9.5p and 27.75p respectively and PGI VCT has paid tax free dividends of 4.5p, 12.25p and 6.5p respectively . This is equivalent to an average dividend yield of 13.9% p.a. for ProVen VCT and 9.8% p.a. for PGI VCT on the relevant net asset value at the beginning of the relevant financial year (excluding the initial 30% income tax relief). Dividend payments will, however, depend on the amount and timing of profits realised from the sale of investments, which cannot be guaranteed. There is no certainty that any dividends will be paid.
Investors should note that the New Ordinary Shares will not qualify to receive any dividends declared on or before the date on which such New Ordinary Shares are allotted to Investors under the Offer.
Beringea is each of the Company's investment manager and is a limited liability partnership incorporated and registered in England and Wales under number OC342919 pursuant to the Limited Liability Partnership Act 2000. Its telephone number is 020 7845 7820. The registered office and principal place of business of Beringea is 39 Earlham Street, London WC2H 9LT. Beringea is authorised and regulated by the Financial Conduct Authority (under number 496358). The principal legislation under which Beringea operates is the Limited Liability Partnerships Act 2000 and the applicable provisions of the 2006 Act (and regulations made thereunder). Beringea is ultimately owned by Beringea LLC which is a US limited liability company.
Beringea is paid the following fees in respect of its appointment by ProVen VCT:
The Manager is entitled to receive a performance incentive fee in relation to each ProVen Respective Offer if, at the end of a financial year, the relevant ProVen Respective Offer Performance Value exceeds the relevant ProVen Respective Offer Hurdle. In this event the performance incentive fee per ProVen Respective Offer Share will be equal to 20 per cent of the amount by which each such ProVen Respective Offer Performance Value exceeds the relevant ProVen Respective Offer Initial Net Asset Value per Share, less the aggregate amount of any performance incentive fee per ProVen Respective Offer Share already paid in respect of that ProVen Respective Offer in relation to previous financial years starting after 29 February 2012 (which shall not include ProVen Residual PIF).
The ProVen Respective Offer Performance Value in respect of the relevant financial year end is the sum of (i) the audited net asset value per ProVen Ordinary Share or Equivalent ProVen Ordinary Share for a ProVen Respective Offer at that date, (ii) ProVen Respective Offer Cumulative Dividends, (iii) all performance fees per ProVen Ordinary Share or Equivalent ProVen Ordinary Share paid by the shareholders of the ProVen Respective Offer in relation to financial years starting after 29 February 2012, and (iv) any ProVen Residual PIF Adjustment where relating to that ProVen Respective Offer (whether relating to that or any previous financial year).
If at the end of a financial year, the relevant ProVen Respective Offer Performance Value is less than or equal to the ProVen Respective Offer Hurdle, no performance fee will be payable on such ProVen Respective Offers in respect of that financial year.
The performance fee per ProVen Respective Offer Share payable for a financial year will be reduced, if necessary, to ensure that i) the cumulative performance fee per ProVen Respective Offer Share payable to the Manager in respect of a ProVen Respective Offer does not exceed 20 per cent. of the relevant ProVen Respective Offer Cumulative Dividends; and ii) the audited net asset value per ProVen Ordinary Share or Equivalent ProVen Ordinary Share at the relevant financial year end plus the relevant ProVen Respective Offer Cumulative Dividends plus any ProVen Residual PIF Adjustment relating to that Respective Offer is at least equal to the relevant ProVen Respective Offer Hurdle.
The Manager also received a performance fee linked to the profit achieved on the disposal of two of ProVen's investments, namely Espresso Group Limited and Think Limited (known as the "ProVen Residual PIF"). This performance fee was equal to 20% of the aggregate profit realised on the sale of Espresso Group Limited and Think Limited, subject to a maximum fee of £673,000 (being 20% of the aggregate unrealised profit on these investments as at 31 August 2011). Espresso Group was sold in 2013 and Think Limited was sold in 2018. To date, the Manager has been paid the ProVen Residual PIF in full up to the maximum of £673,000. All fees paid under the performance incentive arrangements will be inclusive of VAT, if applicable.
The NAV per Ordinary Share used in the Pricing Formula for each allotment of New Ordinary Shares will include a provision for any potential performance fees payable by the Company to the Investment Manager, calculated in accordance with the Company's accounting policies. However, as the performance fee will be calculated based on the audited results at the relevant financial year end, the actual performance fee paid may be greater than, or less than, the amount provided in the Company's previously announced NAVs. At the date of this Document, save for a final payment of £30,498 in relation to the ProVen Residual PIF, which was paid on 16 December 2019, no performance fee has been accrued in respect of the financial year to 29 February 2020. The actual performance fee, if any, will be calculated based on the audited results at 29 February 2020 and may be different from the amount provided for at the date of this Document.
Beringea is paid the following fees from the Company in respect of its appointment by PGI:
The Manager is entitled to receive a performance incentive fee in relation to each PGI Respective Offer providing that, at the end of a financial year, the relevant PGI Respective Offer Performance Value exceeds the relevant PGI Respective Offer Hurdle. In this event the performance incentive fee per PGI Respective Offer Share will be equal to 20 per cent of the amount by which each such PGI Respective Offer Performance Value exceeds the relevant PGI Respective Offer Initial Net Asset Value per Share, less the aggregate amount of any performance incentive fee per PGI Respective Offer Share already paid in respect of that PGI Respective Offer in relation to previous financial years starting after 29 February 2012, multiplied by the relevant number of Respective Offer Shares.
The PGI Respective Offer Performance Value in respect of the relevant financial year end is the sum of: (i) the audited net asset value per PGI Ordinary Share for a PGI Respective Offer at that date; (ii) PGI Respective Offer Cumulative Dividends; and (iii) all performance fees per PGI Ordinary Share paid by the shareholders of the PGI Respective Offer in relation to financial years starting after 29 February 2012.
The PGI Respective Offer Hurdle is the greater of 1.25 times the PGI Respective Offer Initial Net Asset Value per Share increased by the Bank of England base rate plus one per cent. per annum (compound) from:
If at the end of a financial year, the relevant PGI Respective Offer Performance Value is less than or equal to the PGI Respective Offer Hurdle, no performance fee will be payable for such PGI Respective Offers in respect of that financial year.
The performance fee per PGI Respective Offer Share payable in relation to a PGI Respective Offer for a financial year will be reduced, if necessary, to ensure that i) the cumulative performance fee per PGI Respective Offer Share payable in respect of a PGI Respective Offer does not exceed 20 per cent. of the relevant PGI Respective Offer Cumulative Dividends; and ii) the cumulative performance fee per PGI Respective Offer Share payable in respect of a Respective Offer does not exceed 50 per cent. of the amount by which the PGI Relevant Respective Offer Performance Value exceeds the relevant PGI Respective Offer Hurdle; and iii) the audited net asset value per PGI Ordinary Share at the relevant financial year end plus the relevant PGI Respective Offer Cumulative Dividends is at least equal to the relevant PGI Respective Offer Hurdle.
All fees paid under the performance incentive arrangements will be inclusive of VAT, if applicable.
The NAV per PGI Ordinary Share used in the Pricing Formula for each allotment of New PGI Ordinary Shares will include a provision for any potential performance fees payable by the Company to the Manager, calculated in accordance with the Company's accounting policies. However, as the performance fee will be calculated based on the audited results at the relevant financial year end, the actual performance fee paid may be greater than, or less than, the amount provided in PGI's previously announced NAVs. At the date of this Document, no performance fee has been accrued in respect of the financial year to 29 February 2020. The actual performance fee, if any, will be calculated based on the audited results at 29 February 2020 and may be different from the amount provided for at the date of this Document.
From 13 January 2015, Beringea has provided certain administration services, company secretarial and financial advisory services and services in connection with share repurchases to the Companies, for a current annual fee of c. £61,000 (plus VAT if applicable) in the case of ProVen VCT and c. £54,000 (plus VAT if applicable) in the case of PGI VCT. The fee is increased annually in line with the Retail Prices Index.
Beringea arranges for the safe custody of each Company's unquoted and quoted investments on behalf of the relevant Company in a manner satisfactory to the Board and in that capacity is responsible for ensuring safe custody and dealing with settlement arrangements.
The annual running costs (including irrecoverable VAT but excluding any performance fees payable and annual commission payable to the Manager and trail commission payable to intermediaries) of each Company for the year is subject to a cap of 3.25% of the Company's net assets. Any costs in excess of this are borne by Beringea LLP by way of a reduction in its fees. The annual running costs of ProVen VCT for the year to 28 February 2019 were 2.90% of the net asset value of ProVen VCT at the year end. The annual running costs of PGI VCT for the year to 28 February 2019 were 2.60% of the net asset value of PGI VCT at the year end.
Each of the Companies has an identical investment policy as described below.
The Companies' investment objective is to achieve long term returns greater than those available from investing in a portfolio of quoted companies, by investing in:
within the conditions imposed on all VCTs, and to minimise the risk of each investment and the portfolio as a whole.
The investment policy covers several areas as follows:
The Companies seek to make investments in VCT Qualifying companies with the following characteristics:
The Companies invest in companies at various stages of development, including those requiring capital for expansion, but not in start-ups or management buy-outs or businesses seeking to use funding to acquire other businesses. Investments are spread across a range of different sectors.
Funds not invested in qualifying investments may be invested in non-qualifying investments permitted for liquidity management purposes, which include cash, alternative investment funds ("AIFs") and UCITS which may be redeemed on no more than 7 days' notice, or ordinary shares or securities in a company that are acquired on a regulated market.
It is not the Companies' intention to have any borrowings. Each Company does, however, have the ability to borrow a maximum amount equal to the nominal capital of that Company and its distributable and undistributable reserves.
No investment will constitute more than 15% of that Company's portfolio by value at the time of investment.
Any material changes in either Company's investment policy would require their Shareholders' approval in accordance with the Listing Rules.
Over the three years following the Offer, a proportion of the funds raised will be progressively invested in Qualifying Investments with the objective that ultimately at least 82.5% of each Company's assets will be invested in Qualifying Investments. Initially, whilst suitable Qualifying Investments are being identified, the funds will be invested in permitted non-Qualifying Investments. Progressively, this portfolio will be realised in order to fund investments in Qualifying Investments. The portion of each Company's portfolio not invested in Qualifying Investments will be used to meet the annual running costs of that Company, to fund any further investments in its investee companies and to provide liquidity. The Companies must have invested at least 30% of all new funds that they have raised and allotted in Qualifying Investments within 12 months of the end of the accounting period in which the Company issued the shares.
It is expected that after investing 82.5% of their assets in Qualifying Investments, the PGI VCT portfolio will have at least 50 investments (assuming full subscription) and the ProVen VCT portfolio will have at least 50 investments (assuming full subscription), to provide diversification and risk protection. Under current VCT legislation a Qualifying Company's gross assets may not exceed £15 million immediately before and £16 million immediately after the investment, and it must have fewer than 250 employees, prior to investment (500 in the case of a Knowledge Intensive Company). The Qualifying Company cannot receive more than £12m (£20m if the company is deemed to be a Knowledge Intensive Company) of Risk Finance State Aid (including from VCTs) over the company's lifetime. The Qualifying Company's first commercial sale must be no more than 7 years before the VCT's investment (10 years for a Knowledge Intensive Company), except where previous Risk Finance State Aid was received by the company within 7 years or where a turnover test is satisfied. Funds received from an investment by a VCT cannot be used to acquire another existing business or trade. No single investment will represent more than 15% of a Company's investments at the time the investment is made.
With many years' experience of managing the risks involved in investing in unquoted companies, Beringea has implemented a number of measures designed to manage risk to the extent possible, given the investment strategy. Key risk management features include:
In order to ensure that investment opportunities are apportioned fairly between the Companies, their allocation is governed by the terms of a co-investment agreement. This broadly provides that VCT Qualifying Investments which meet the Companies' investment strategies will be apportioned to the Companies in the proportion of the amount which needs to be invested for compliance with the VCT Rules. The allocation will be impacted by a number of factors, including the chronological order in which funds were raised and disposals achieved from the portfolio. The amount which is apportioned to each VCT will be subject to certain restrictions in order to ensure good portfolio diversification.
Audited statutory accounts of ProVen VCT for the year ended 28 February 2019, in respect of which ProVen VCT's auditors, BDO LLP, registered auditor of 55 Baker Street, London W1U 7EU, members of the Institute of Chartered Accountants in England and Wales, made an unqualified report under section 495 of the 2006 Act, have been delivered to the Registrar of Companies and such report did not contain any statements under section 498(2) or (3) of the 2006 Act. A copy of these audited statutory accounts and the interim accounts for the 6 month period ended 31 August 2019 are available at 39 Earlham Street, London WC2H 9LT.
The audited statutory accounts were prepared in accordance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice) and the interim accounts for the 6 month period ended 31 August 2019 also contain a description of ProVen VCT's financial condition, changes in financial condition and results of operations for each of the above periods. The interim accounts for the 6 month period ended 31 August 2019 was also prepared in accordance with Financial Reporting Standard 102.
Historical financial information relating to ProVen VCT on the matters referred to below is included in the published annual report and audited statutory accounts for the year ended 28 February 2019 and the interim accounts for the 6 month period ended 31 August 2019 and is incorporated by reference into this document, as follows:
| Audited statutory accounts for year ended |
Unaudited interim accounts for 6 month period ended |
|
|---|---|---|
| 28 February 2019 | 31 August 2019 | |
| Nature of Information | Page No. | Page No. |
| Company information | 60 | 26 |
| Fund Overview | 3 | 2 |
| Chairman's statement | 4 | 4 |
| Investment manager's review | 6 | 7 |
| Investment portfolio and review of investments |
10-16 | 9-10 |
| Investment activity | 8 | 11 |
| Directors' report | 23 | n/a |
| Directors' remuneration report | 31 | n/a |
| Statement of Corporate Governance |
26 | n/a |
| Independent Auditors' report | 35 | n/a |
|---|---|---|
| Income statement | 40 | 12 |
| Statement of changes in equity | 41 | 14 |
| Statement of financial position | 43 | 13 |
| Statement of Cash flows | 44 | 15 |
| Notes to accounts | 45 | 16 |
| Audited statutory accounts for year ended |
Unaudited interim accounts for 6 month period ended |
|
|---|---|---|
| 28 February 2019 | 31 August 2019 | |
| Total net assets (£000) | 86,336 | 115,338 |
| Changes in net assets (£000) | (15,195) | 5,028 |
| Net asset value per share | 82.2p | 76.4p |
| Dividends paid/ proposed for the year/ period |
27.75/27.75 | 2.5/2.0 |
A description of the changes in the performance of ProVen VCT, both capital and revenue, and changes to ProVen VCT's portfolio of investments for the financial year ended 28 February 2019 is set out in the sections headed "Chairman's Statement" and "Investment Manager's Review" in the audited statutory accounts of ProVen VCT for the year 28 February 2019 and the unaudited interim accounts for the six months ended 31 August 2019.
There has been no significant change to ProVen VCT's financial position since 31 August 2019, the latest date to which unaudited interim financial information has been published by ProVen VCT.
The audited statutory accounts of ProVen VCT for the year ended 28 February 2019 and the unaudited interim accounts for the six months ended 31 August 2019 are being incorporated by reference, as set out above. Where these documents make reference to other documents, such other documents, together with those pages of the annual and interim accounts that are not referred to above, are not relevant to Investors and are not incorporated into and do not form part of this document.
As at 30 November 2019 (the latest date in respect of which ProVen VCT has published its unaudited NAV per Ordinary Share), the unaudited NAV per Ordinary Share was 73.6p.
Audited statutory accounts of PGI VCT for the year ended 28 February 2019, in respect of which PGI VCT's auditors, BDO LLP, registered auditor of 55 Baker Street, London W1U 7EU, members of the Institute of Chartered Accountants in England and Wales, made unqualified reports under section 495 of the 2006 Act, have been delivered to the Registrar of Companies and such reports did not contain any statements under section 498(2) or (3) of the 2006 Act. A copy of these audited statutory accounts and the interim accounts for the 6 month period ended 31 August 2019 are available at 39 Earlham Street, London WC2H 9LT.
The audited statutory accounts were prepared in accordance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice) and the interim accounts for the 6 month period ended 31 August 2019 also contain a description of ProVen VCT's financial condition, changes in financial condition and results of operations for each of the above periods. The interim accounts for the 6 month period ended 31 August 2019 were also prepared in accordance with Financial Reporting Standard 102.
Historical financial information relating to PGI VCT on the matters referred to below is included in the published annual report and audited statutory accounts for the year ended 28 February 2019 and the interim accounts for the 6 month period ended 31 August 2019 and is incorporated by reference into this document, as follows:
| Audited statutory accounts for year ended 28 February 2019 |
Unaudited interim accounts for 6 month period ended 31 August 2019 |
|
|---|---|---|
| Nature of Information | Page No. | Page No. |
| Company information | 60 | 26 |
| Fund Overview | 3 | 2 |
| Chairman's statement | 4 | 4 |
| Investment manager's review | 6 | 7 |
| Investment portfolio and review of investments |
10-16 | 9-10 |
| Investment activity | 8 | 11 |
| Directors' report | 23 | n/a |
| Directors' remuneration report | 31 | n/a |
| Statement of Corporate Governance |
26 | n/a |
| Independent Auditors' report | 35 | n/a |
| Income statement | 40 | 12 |
| Statement of changes in equity | 41 | 14 |
|---|---|---|
| Statement of financial position | 43 | 13 |
| Statement of Cash flows |
44 | 15 |
| Notes to accounts | 45 | 16 |
| Audited statutory accounts for year ended 28 February 2019 |
Unaudited interim accounts for 6 month period ended 31 August 2019 |
|
|---|---|---|
| Total net assets (£000) | 98,473 | 118,881 |
| Changes in net assets (£000) | (5,417) | 12,238 |
| Net asset value per share | 68.4p | 63.2p |
| Dividends paid/ proposed for the year/ period |
6.5/6.5 | 2.0/1.5 |
A description of the changes in the performance of PGI VCT, both capital and revenue, and changes to PGI VCT's portfolio of investments for the financial year ended 28 February 2019 is set out in the sections headed "Chairman's Statement" and "Investment Manager's Review" in the audited statutory accounts of PGI VCT for the year 28 February 2019 and the unaudited interim accounts for the six months ended 31 August 2019.
Save for for the issue of 13,690,880 PGI Shares at subscription prices of 68.6p, 66.0p and 61.7p on 6 September 2019, 30 October 2019 and 6 December 2019 , there has been no significant change to PGI VCT's financial position since 31 August 2019, the latest date to which unaudited interim financial information has been published by PGI VCT.
The audited statutory accounts of PGI VCT for the year ended 28 February 2019 and the unaudited interim accounts for the six months ended 31 August 2019 are being incorporated by reference, as set out above. Where these documents make reference to other documents, such other documents, together with those pages of the annual and interim accounts that are not referred to above, are not relevant to Investors and are not incorporated into and do not form part of this document.
As at 30 November 2019 (the latest date in respect of which PGI VCT has published its unaudited NAV per Ordinary Share), the unaudited NAV per Ordinary Share was 61.3p.
At 30 November 2019, the latest date for which unaudited valuations have been announced, ProVen VCT's portfolio comprised 45 venture capital investments with a cost of £72.7 million and a valuation of £68.1million and cash of £43.6million.
Since 30 November 2019, ProVen VCT has made the following equity investment additions (valued at cost):
| Additions | |
|---|---|
| OurPath Limited | - £1,200,000 |
| Festicket Limited | - £384,000 |
ProVen VCT has not made any material equity investment disposals since 30 November 2019.
An interim cash dividend of 2p per ProVen Share was paid on 6 December 2019.
The list of active current investments (unaudited) in the ProVen VCT portfolio set out in the table below constitutes a comprehensive and meaningful analysis of ProVen VCT's portfolio as at the date of this document, representing approximately 50 per cent by value of ProVen VCT's portfolio. The (unaudited) valuations are as at 30 November 2019, the latest date for which valuations have been announced, for investments in the portfolio at that date. All venture capital investments are registered in England and Wales except for InContext Solutions, Inc., Picasso Labs Inc., Thread, Inc. and Whistle Sports, Inc. which are Delaware registered corporations in the United States of America and Mycs GmbH, which is registered in Germany.
| Name | Cost (£'000) | Valuation | % of portfolio | Holding |
|---|---|---|---|---|
| (£'000) | by value | (Debt/Shares) | ||
| Infinity Reliance Limited (t/a My | Shares | |||
| 1st Years) | 4,731 | 5,172 | 4.6% | |
| Mycs GmbH | Shares | |||
| 4,084 | 4,197 | 3.8% | ||
| Litchfield Media Limited | Debt and | |||
| 3,580 | 4,194 | 3.8% | Shares | |
| Poq Studio Limited | Shares | |||
| 3,152 | 3,986 | 3.6% | ||
| Access Systems Inc. (t/a | Shares | |||
| Access Pay) | 3,500 | 3,500 | 3.1% | |
| Zoovu Limited | Shares | |||
| 3,487 | 3,467 | 3.1% | ||
| Written Byte Limited (t/a | Shares | |||
| DeepCrawl) | 1,888 | 3,373 | 3.0% | |
| Thread, Inc. | Shares | |||
| 3,351 | 3,354 | 3.0% | ||
| Monica Vinader Limited | Shares | |||
| 534 | 3,342 | 3.0% | ||
| Festicket Limited | 3,248 | 2.9% | Shares |
| 3,248 | ||||
|---|---|---|---|---|
| ContactEngine Limited | Shares | |||
| 1,266 | 2,789 | 2.5% | ||
| MPB Group Limited | Shares | |||
| 2,511 | 2,725 | 2.4% | ||
| Rapid Charge Grid Limited | Shares | |||
| 3,150 | 2,671 | 2.4% | ||
| Exonar Limited | Shares | |||
| 2,496 | 2,496 | 2.2% | ||
| Aistemos Limited | Shares | |||
| 1,819 | 1,821 | 1.6% | ||
| Response Tap Limited | Shares | |||
| 1,060 | 1,784 | 1.6% | ||
| Lupa Foods Limited | Shares | |||
| 1,078 | 1,679 | 1.5% | ||
| Blis Media Limited | Shares | |||
| 841 | 1,624 | 1.5% | ||
| Other venture capital | Shares | |||
| investments | 26,923 | 12,717 | ||
| 11.4% | ||||
| 72,699 | 68,139 | 61.0% | ||
| Cash at bank and in hand | 43,569 | 43,569 | 39.0% | |
| 116,268 | 111,708 | 100% |
Further details of all of ProVen VCT's venture capital investments referred to in the table above are as follows:
My 1st Years is an e-commerce site for personalised items for babies and children, with products from their Royal Range having been worn by Prince George.
Mycs is an online furniture retailer that specialises in creating fully-customisable furniture. Founded in Berlin, the retailer has developed technology that provides shoppers with the tools to customise the design, size, material and colour of its entire product range of wardrobes, sofas, shelving, tables and chairs.
Litchfield Media is a company that seeks to take advantage of investment opportunities across a range of sectors.
POQ is a platform provider for mobile e-commerce apps used by major fashion retailers.
AccessPay is a BACS approved software provider aiming to simplify the payment processing system by offering a range of payment and cash management products such as Direct Debit, SEPA, Faster Payments and SWIFT.
Zoovu is a provider of interactive guided selling software that assists the online buying process.
DeepCrawl is a marketing analytics and insights company whose web crawler and associated software provides brands with a comprehensive overview of their websites' technical health.
Thread is a menswear e-commerce site which recommends styles and items based on an individual's tastes and preferences.
Monica Vinader is a British company that creates ready-to-wear contemporary designer jewellery. The business, which is managed by sisters Monica and Gabriela Vinader, began trading in 2007 and has quickly become a well-known, international jewellery brand.
Festicket is a website that packages together festival tickets with travel, accommodation and add-ons to create complete festival trips that can be booked in one click.
ContactEngine produces software that automates conversations between corporates and their customers. It improves key interactions ensuring that crucial moments such as sales, deliveries and appointments are executed with precision and minimum effort.
MPB is a marketplace for buying and selling used photographic equipment.
Rapid Charge Grid Limited is an owner of electric vehicle charging points.
Exonar is a provider of data governance and security technology that enables companies to understand what information they hold throughout their digital infrastructure.
Aistemos is a provider of patent analytics software and supports the likes of BAE Systems, ARM and ABB to tap into competitive intelligence from global patent data.
Response Tap provides call-based marketing automation, helping brands understand the impact their marketing activities are having on inbound calls.
Lupa Foods is an importer and distributor of fine foods, supplying retailers, wholesalers and restaurants across the UK with global ingredients and produce.
Blis is the pioneer behind an advanced mobile location data technology for advertisers. Using its patented technology, Blis provides the most accurate location data, combined with rich contextualized, high quality consumer behavioural insights.
At 30 November 2019, the latest date for which unaudited valuations have been announced, PGI VCT's portfolio comprised 45 venture capital investments with a cost of £80.2million and a valuation of £76.0 million and cash of £49.4 million.
Since 30 November 2019, PGI VCT has made the following equity investment additions (valued at cost):
| Additions | |
|---|---|
| OurPath Limited | - £2,800,000 |
| Festicket Limited | - £896,000 |
PGI VCT has not made any material equity investment disposals since 30 November 2019.
An interim cash dividend of 1.5p per PGI Share was paid on 6 December 2019.
The list of active current investments (unaudited) in the PGI VCT portfolio set out in the table below constitutes a comprehensive and meaningful analysis of PGI VCT's portfolio as at the date of this document, representing approximately 50 per cent by value of PGI VCT's portfolio. The (unaudited) valuations are as at 30 November 2019, the latest date for which valuations have been announced, for investments in the portfolio at that date. All venture capital investments are registered in England and Wales except for InContext Solutions, Inc., Picasso Labs, Inc., Thread, Inc. and Whistle Sports, Inc. which are Delaware registered corporations in the United States of America and Mycs GmbH, which is registered in Germany.
| Cost (£'000) | Valuation | % of portfolio | Holding | |
|---|---|---|---|---|
| Name | (£'000) | by value | (Debt/Shares) | |
| Sannpa Limited (t/a | Shares | |||
| fnatic) | 5,946 | 5,946 | 4.7% | |
| ContactEngine | Shares | |||
| Limited | 2,330 | 4,814 | 3.8% | |
| Dryden Holdings | Debt and | |||
| Limited | 5,000 | 4,761 | 3.8% | Shares |
| Sealskinz holdings | Debt and | |||
| Limited | 3,116 | 4,516 | 3.6% | Shares |
| D3O Holdings | Shares | |||
| Limited | 3,550 | 3,796 | 3.0% | |
| Zoovu Limited | 3,653 | 3,619 | 2.9% | Shares |
| Mycs GmbH | 2,520 | 3,532 | 2.8% | Shares |
| Poq Studio Limited | 2,848 | 3,497 | 2.8% | Shares |
| Thread, Inc. | 3,309 | 3,302 | 2.6% | Shares |
| Written Byte Limited | Shares | |||
| (t/a DeepCrawl) | 1,612 | 3,254 | 2.6% | |
| Papier Limited | 3,150 | 3,150 | 2.5% | Shares |
| Infintiy Reliance | Shares | |||
| Limited (t/a My First | ||||
| Years) | 2,769 | 3,147 | 2.5% | |
| Arctic Shores Limited | 2,450 | 2,450 | 2.0% | Shares |
| Response Tap | ||||
| Limited | 1,440 | 2,424 | 1.9% | Shares |
| Blis Media Limited | 1,083 | 2,091 | 1.7% | Shares |
| Been There Done | ||||
| That Global Limited | 1,448 | 2,044 | 1.6% | Shares |
| MPB Group Limited | 1,489 | 1,987 | 1.6% | Shares |
| Aistemos Limited | 1,681 | 1,679 | 1.3% | Shares |
| Litchfield Media | Debt and | |||
|---|---|---|---|---|
| Limited | 1,420 | 1,664 | 1.3% | Shares |
| Lupa Foods Limited | Debt and | |||
| 1,003 | 1,564 | 1.2% | Shares | |
| Other venture | Debt and | |||
| capital investments | 28,426 | 12,726 | 10.0% | Shares |
| 80,243 | 75,963 | 60.4% | ||
| Cash at bank and in | ||||
| hand | 49,405 | 49,405 | 39.6% | |
| 129,648 | 125,368 | 100% |
Further details of all of PGI VCT's venture capital investments referred to in the table above are as follows:
Fnatic is an esports company that manages professional gaming teams, produces branded hardware and merchandise, and provides commercial sponsorship and partnership opportunities in esports.
ContactEngine produces software that automates conversations between corporates and their customers. It improves key interactions ensuring that crucial moments such as sales, deliveries and appointments are executed with precision and minimum effort.
Dryden Holdings is a company that seeks to take advantage of investment opportunities across a range of sectors.
Sealskinz develops and manufactures endurance accessories. From the company's inception it has worked in partnership with athletes including mountaineers, explorers, cyclists, skiers, runners, sailors and horse riders to ensure its products deliver the very best in comfort and performance.
D3O is an impact protection solutions company that licenses a range of patented smart materials. The marketchanging D3O® technology is used to produce a shock absorbing material which can be found in a range of products across the motorcycle, sport, footwear, electronics, military and workwear sectors.
Zoovu is a provider of interactive guided selling software that assists the online buying process.
POQ is a platform provider for mobile e-commerce apps used by major fashion retailers.
Thread is a menswear e-commerce site which recommends styles and items based on an individual's tastes and preferences.
DeepCrawl is a marketing analytics and insights company whose web crawler and associated software provides brands with a comprehensive overview of their websites' technical health.
Papier is an online retailer of personalised stationery, with a range of products including notebooks, writing paper, invitations and prints.
My 1st Years is an e-commerce site for personalised items for babies and children, with products from their Royal Range having been worn by Prince George.
Arctic Shores provides software for psychometric assessments used by organisations to improve the quality and diversity of recruits.
Response Tap provides call-based marketing automation, helping brands understand the impact their marketing activities are having on inbound calls.
Blis is the pioneer behind an advanced mobile location data technology for advertisers. Using its unique, patented technology, Blis provides accurate location data, combined with rich contextualized, high quality consumer behavioural insights.
Been There Done That is a network of around 200 advertising professionals. Bringing together expert planning and creative directors, the network offers clients immediate access to strategic insights on complex briefs.
MPB is a marketplace for buying and selling used photographic equipment.
Mycs GmbH is an online furniture retailer that specialises in creating fully-customisable furniture. Founded in Berlin, the retailer has developed technology that provides shoppers with the tools to customise the design, size, material and colour of its entire product range of wardrobes, sofas, shelving, tables and chairs.
Aistemos is a provider of patent analytics software and supports the likes of BAE Systems, ARM and ABB to tap into competitive intelligence from global patent data.
Litchfield Media is a company that seeks to take advantage of investment opportunities across a range of sectors.
Lupa Foods is an importer and distributor of fine foods, supplying retailers, wholesalers and restaurants across the UK with global ingredients and produce.
The following is a summary of all contracts (not being contracts entered into in the ordinary course of business) to which the Companies are a party for the two years preceding publication of this document which are or may be material and all other contracts (not being contracts entered into in the ordinary course of business) entered into by the Companies which contain a provision or provisions under which the Companies have an obligation or entitlement which is material to it as at the date of this document:
1. Investment Management Agreement
An investment management agreement (the "ProVen IMA") dated 9 February 2000 between ProVen VCT and the Manager, as amended by deeds of variation dated 31 May 2006, 14 November 2006, 19 November 2008, 19 November 2009, 8 December 2011, 8 November 2012, 27 June 2013, 22 October 2013, 3 December 2015, 11 January 2019 and 27 January 2020 under which the Manager has agreed to provide investment management services to the Company in respect of its investments. The ProVen IMA is terminable by either party at any time by one year's prior written notice. The ProVen IMA is subject to earlier termination in the event of, inter alia, a party committing a material breach of the ProVen IMA and or becoming insolvent, and by ProVen VCT if the Manager is guilty of fraud, wilful deceit or gross negligence or ceases to carry on business or materially fulfil its obligations under the ProVen IMA or the Directors resolve that it is desirable to terminate the ProVen IMA to preserve the status of ProVen VCT as a venture capital trust.
The Manager will receive a fee equal to 2 per cent per annum of the net assets of the Company (exclusive of VAT).
The Manager is also entitled to receive the performance fee set out on pages 13 and 14 and is to be compensated in the event that the ProVen IMA is terminated early by the Company in certain circumstances.
The annual running costs of ProVen VCT (including irrecoverable VAT but excluding any performance related fees and annual commission payable to the Manager and trail commissions payable to intermediaries) are capped at 3.25 per cent. of its net assets, any excess will either be paid by the Manager or refunded by way of a reduction to its fees.
A deed of variation to the ProVen IMA was entered into on 7 June 2017 pursuant to which the previous performance fee arrangements were terminated and the revised performance fee arrangements set out on pages 13 and 14 were established.
A deed of variation to the ProVen IMA dated 11 January 2019 provides that if the ProVen IMA is terminated by ProVen VCT, other than in accordance with the terms of the ProVen IMA, the Manager shall be entitled to compensation relating to the fees that it would have been entitled to under the ProVen IMA in connection with the Offer, provided such compensation shall not exceed £1,900,000.
A deed of variation to the ProVen IMA dated 27 January 2020 provides that if the ProVen IMA is terminated by ProVen VCT, other than in accordance with the terms of the ProVen IMA, the Manager shall be entitled to compensation relating to the fees that it would have been entitled to under the ProVen IMA in connection with 1) the Offer from the date of such termination until 28 February 2023, and 2) the fees that it would have been entitled to in connection with an offer for subscription for up to £4,400,000 launched on 20 October 2017 from the date of such termination until 28 February 2021.
For the financial period ended 28 February 2019, ProVen VCT paid £7.659m (including VAT) (of which £5,614 constituted performance fees) to Beringea for its investment services to ProVen VCT under the ProVen IMA. .
An administration agreement dated 13 January 2015 entered into between the Company and Beringea
(the "ProVen Administration Agreement") whereby Beringea provides certain administration, company secretarial and financial advisory services and services in connection with share repurchases to ProVen VCT, for an annual fee of £55,681 (plus VAT if applicable and which increases in line with the Retail Prices Index). Beringea's appointment shall continue for a period of two years from the date of the ProVen Administration Agreement and thereafter either party shall be able to terminate the ProVen Administration Agreement at any time by one year's prior written notice, subject to earlier termination by either party in the event of, inter alia, the other becoming insolvent or committing a material breach of the ProVen Administration Agreement and, by ProVen VCT if, inter alia, it ceases to be a VCT for tax purposes, or if Beringea is materially unable to carry out its obligations under the ProVen Administration Agreement. The ProVen Administration Agreement contains provisions whereby ProVen VCT indemnifies Beringea against certain liabilities arising in respect of their appointment.
For the financial period ended 28 February 2019, ProVen VCT paid c. £61,000 (including VAT) to Beringea for its services pursuant to the ProVen Administration Agreement.
Letters of appointment between ProVen VCT and each of its Directors, dated 25 August 2017 in the case of Neal Ransome, 10 May 2006 in the case of Barry Dean, 31 December 2007 in the case of Malcolm Moss and 24 September 2013 in the case of Lorna Tilbian, under which each Director is required to devote such time to the affairs of ProVen VCT as the Board reasonably requires consistent with his role as a non-executive Director. The letters are terminable on 3 months notice either side. Other than these letters, none of the Directors has a service contract with the Company. Neal Ransome, Lorna Tilbian, Barry Dean and Malcolm Moss are entitled to receive £37,500, £30,000, £30,000 and £15,000 respectively. The total amount expected to payable to the Directors for the year ending 29 February 2020 will be £112,500. No amount has been set aside or accrued by the Company to provide pension, retirement or similar benefits to any of the Directors. No benefits are provided for on termination.
A co-investment agreement (the "Co-investment Agreement") dated 17 October 2011, as amended by a deed of variation dated 22 June 2012, between ProVen VCT, PGI VCT, ProVen Health VCT plc and ProVen Planned Exit VCT plc. In order to ensure that investment opportunities are apportioned fairly between the Companies, their allocation is governed by the terms of a co-investment agreement. This broadly provides that VCT Qualifying Investments which meet the Companies' investment strategies will be apportioned to the Companies in the proportion of the amount which needs to be invested for compliance with the VCT Rules. The allocation will be impacted by a number of factors, including the chronological order in which funds were raised and disposals achieved from the portfolio. The amount which is apportioned to each VCT will be subject to certain restrictions in order to ensure good portfolio diversification.
An offer agreement (the "2013 HK Offer Agreement") dated 22 October 2013 between ProVen VCT (1), the Directors (2), Howard Kennedy (3), Beringea (4) and Beringea LLC (5) whereby Howard Kennedy agreed to act as sponsor to the 2013 Offer. Under the 2013 HK Offer Agreement, which may be terminated by Howard Kennedy in certain circumstances of breach, the Company, the Directors and the Company gave certain limited warranties to Howard Kennedy. The Company has also agreed to indemnify Howard Kennedy in respect of its role as sponsor and in respect of certain losses arising under the 2013 HK Offer Agreement. The Manager's ultimate parent, Beringea LLC, guaranteed the Manager's liability under the 2013 HK Offer Agreement.
An offer agreement (the "2013 Beringea Offer Agreement") dated 22 October 2013 between ProVen VCT
(1), the Directors (2), Beringea (3) and Beringea LLC (4) whereby Beringea agreed to use its reasonable endeavours to procure subscribers for ordinary shares under the 2013 Offer. The Manager was entitled to receive 2.5% (in the case of advised investors) and 5.5% (in the case of applications received directly or through execution only brokers) of the gross proceeds of the 2013 Offer, out of which it agreed to pay the costs of the 2013 Offer, including professional fees, marketing expenses and commission to authorised financial advisors. The Manager's ultimate parent, Beringea LLC, guaranteed the Manager's liability under the 2013 Beringea Offer Agreement.
An offer agreement dated 3 December 2015 between ProVen VCT (1), the Directors (2), Howard Kennedy (3), and Beringea (4) whereby Howard Kennedy agreed to act as sponsor to an offer for subscription launched on 2 December 2015 (the "2015 Offer") and Beringea agreed to use its reasonable endeavours to procure subscribers for ordinary shares under the Offer (the "2015 Offer Agreement"). Under the 2015 Offer Agreement, which could be terminated by Howard Kennedy in certain circumstances of breach, the Directors and the Manager gave certain limited warranties to Howard Kennedy and ProVen VCT agreed to indemnify Howard Kennedy in respect of its role as sponsor and under the agreement, both the warranties and the indemnity being customary for this type of agreement. As is customary for an agreement of this nature, the agreement could be terminated if any statement in the Prospectus for the 2015 Offer was untrue, any material omission from the Prospectus arose or any breach of warranty occurred. The Manager was entitled to receive 3.0% (in the case of Advised Investors) and 5.5% (in the case of applications received directly or through Execution Only Brokers) of the gross proceeds of the 2015 Offer, out of which it agreed to pay all the costs of the Offer, including professional fees, marketing expenses and initial commission to Execution Only Brokers. Any trail commission payable to Execution Only Brokers were to be paid by the Company. The Manager's ultimate parent, Beringea LLC, guaranteed the Manager's liability under the 2015 Offer Agreement.
An offer agreement dated 11 January 2019 between ProVen VCT (1), the Directors (2), Howard Kennedy (3), and Beringea (4) whereby Howard Kennedy agreed to act as sponsor to the offer for subscription launched on 11 January 2019 (the "2019 Offer) and Beringea agreed to use its reasonable endeavours to procure subscribers for ordinary shares under the 2019 Offer (the "2019 Offer Agreement"). Under the agreement, which could be terminated by Howard Kennedy in certain circumstances of breach, the Directors and the Manager gave certain limited warranties to Howard Kennedy and ProVen VCT agreed to indemnify Howard Kennedy in respect of its role as sponsor and under the agreement, both the warranties and the indemnity being customary for this type of agreement. As is customary for an agreement of this nature, the agreement could be terminated if any statement in the Prospectus was untrue, any material omission from the Prospectus arose or any breach of warranty occured. The Manager was entitled to receive 3.0% (in the case of Advised Investors) and 5.5% (in the case of applications received directly or through Execution Only Brokers) of the gross proceeds of the 2019 Offer, out of which it agreed to pay all the costs of the 2019 Offer, including professional fees, marketing expenses and initial commission to Execution Only Brokers. Any trail commission payable to Execution Only Brokers were to be paid by ProVen VCT. The Manager's ultimate parent, Beringea LLC, guaranteed the Manager's liability under the 2019 Offer Agreement.
An offer agreement dated 27 January 2020 between ProVen VCT (1), the Directors (2), Howard Kennedy (3), and Beringea (4) whereby Howard Kennedy agreed to act as sponsor to the Offer and Beringea agreed to use its reasonable endeavours to procure subscribers for ordinary shares under the Offer (the "Offer Agreement"). Under the agreement, which may be terminated by Howard Kennedy in certain circumstances of breach, the Directors and the Manager gave certain limited warranties to Howard Kennedy and ProVen VCT agreed to indemnify Howard Kennedy in respect of its role as sponsor and under the agreement, both the warranties and the indemnity being customary for this type of agreement. As is customary for an agreement of this nature, the agreement may be terminated if any statement in the Prospectus is untrue, any material omission from the Prospectus arises or any breach of warranty occurs. The Manager is entitled to receive 3.0% (in the case of Advised Investors or through Execution Only Brokers) and 5.5% (in the case of applications received directly) of the gross proceeds of the Offer, out of which it has agreed to pay all the costs of the Offer, including professional fees, marketing expenses and initial commission to Execution Only Brokers. Any trail commission payable to Execution Only Brokers will be paid by ProVen VCT. The Manager's ultimate parent, Beringea LLC, has guaranteed the Manager's liability under the Offer Agreement.
An investment management agreement (the "PGI VCT IMA") dated 22 November 2005 between PGI VCT and the Manager, as amended by deeds of variation dated 5 September 2007, 19 November 2008, 19 November 2009, 10 December 2010, 23 January 2013, 24 October 2014, 21 September 2016 11 January 2019, 27 January 2020 and a side letter dated 23 September 2014 whereby the Manager agreed to provide investment management services to PGI VCT in respect of its portfolios of qualifying investments. Beringea provides custodian services relating to the PGI VCT's investments. Under the PGI VCT IMA the Manager is entitled to receive an annual management fee equal to 2% of PGI VCT's net assets which is payable quarterly in arrears. The PGI VCT IMA is for a minimum period of three years commencing on 22 November 2005, and is terminable by either party at any time thereafter by one year's prior written notice. The PGI VCT IMA is subject to earlier termination in the event of, inter alia, a party committing a material breach of the PGI VCT IMA and/or becoming insolvent, and PGI VCT if the Manager is guilty of fraud, wilful deceit or gross negligence or ceases to carry on business or materially fulfil its obligations under the PGI VCT IMA or the Directors resolve that it is desirable to terminate the PGI VCT IMA to preserve the status of PGI VCT as a venture capital trust.
The Manager is also entitled to receive the performance fee set out on pages 14 and 15 and is to be compensated in the event that the PGI VCT IMA is terminated early by the Company in certain circumstances.
A deed of variation to the PGI VCT IMA dated 21 September 2016 provides that if the ProVen Growth & Income VCT IMA is terminated by the Company, other than in accordance with the terms of the ProVen Growth & Income VCT IMA, the Manager shall be entitled to compensation relating to the fees that it would have been entitled to under the PGI VCT IMA in connection with the Offer, provided such compensation shall not exceed £1,080,000.
A deed of variation to the PGI VCT IMA was entered into on 7 June 2017 pursuant to which the previous performance fee arrangements were terminated and the revised performance fee arrangements set out on pages 14 and 15 were established.
A deed of variation to the PGI VCT IMA dated 11 January 2019 provides that if the PGI VCT IMA is terminated by PGI VCT, other than in accordance with the terms of the PGI VCT IMA, the Manager shall be entitled to compensation relating to the fees that it would have been entitled to under the PGI VCT IMA in connection with the Offer, provided such compensation shall not exceed £2,500,000.
A deed of variation to the PGI VCT IMA dated 27 January 2020 provides that if the PGI VCT IMA is terminated by PGI VCT, other than in accordance with the terms of the PGI VCT IMA, the Manager shall be entitled to compensation relating to 1) the fees that it would have been entitled to under the PGI VCT IMA in connection with the Offer from the date of such termination until 28 February 2023, and 2) the fees that it would have been entitled to in connection with an offer for subscription for up to £4,400,000 launched on 20 October 2017 from the date of such termination until 28 February 2021.
The annual running costs (excluding any performance fees payable) of PGI VCT are capped at 3.6% of its net assets, any excess will either be paid by the Manager or refunded by way of a reduction to its fees.
2. For the financial period ended 28 February 2019, PGI VCT paid £2.414m (including VAT) (of which £331,000 constituted performance fees) to Beringea for its investment services to the Company under the PGI VCT IMA. Administration Agreement
On 24 October 2014 an administration agreement (the "PGI VCT Administration Agreement") was entered into between PGI VCT and Beringea whereby Beringea provides certain administration, company secretarial and financial advisory services and services in connection with share repurchases to PGI VCT, for an annual fee of £49,550 (plus VAT if applicable and which increases in line with the Retail Prices Index). Beringea's appointment shall continue for a period of two years from the date of the PGI VCT Administration Agreement and thereafter either party shall be able to terminate the PGI VCT Administration Agreement at any time by one year's prior written notice, subject to earlier termination by either party in the event of, inter alia, the other becoming insolvent or committing a material breach of the PGI VCT Administration Agreement and, by PGI VCT if, inter alia, it ceases to be a VCT for tax purposes, or if Beringea is materially unable to carry out its obligations under the PGI VCT Administration Agreement. The PGI VCT Administration Agreement contains provisions whereby PGI VCT indemnifies Beringea against certain liabilities arising in respect of their appointment.
For the financial period ended 28 February 2019, PGI VCT paid c. £54,000 (including VAT) to Beringea for its services pursuant to the PGI Administration Agreement.
Letters of appointment between PGI VCT and each of its Directors, dated 16 February 2001 in the case of James Stewart and Marc Vlessing, 1 October 2008 in the case of Malcolm Moss, 24 August 2011 in the case of Natasha Christie-Miller, and 23 October 2019 in the case of Anna Kuriakose under which each Director is required to devote such time to the affairs of PGI VCT as the Board reasonably requires consistent with his or her role as a non-executive Director. The letters are terminable on 3 months notice either side. Other than these letters of appointment, none of the Directors have a service contact with the Company. The total amount expected to be payable to the Directors of PGI VCT for the year ending 29 February 2020 is £122,500. In the previous financial year James Stewart received £30,000, Marc Vlessing received £37,500, Natasha Christie-Miller received £30,000 and Beringea, on behalf of Malcolm Moss, received £15,000. Anna Kuriakose is entitled to a fee of £30,000 per annum. No amount has been set aside or accrued by PGI VCT to provide pension, retirement or similar benefits to any of the Directors. No benefits are provided for on termination.
PGI is party to the Co-investment Agreement, (as amended) referred to in paragraph 4 of the section of this Part 6 headed "ProVen VCT" on page 31 above.
An offer agreement dated 24 October 2014 between PGI VCT (1), the Directors (2), Howard Kennedy (3), Beringea LLP (4) and Beringea LLC (5) whereby Howard Kennedy agreed to act as sponsor to PGI VCT's offer for subscription that was launched on 24 October 2014 (the "2014 Offer"). Under the agreement, which could have been terminated by Howard Kennedy in certain circumstances of breach, the Directors and the Manager gave certain limited warranties to Howard Kennedy and PGI VCT agreed to indemnify Howard Kennedy in respect of its role as sponsor and under the agreement, both the warranties and the indemnity being customary for this type of agreement. Further, as is customary for an agreement of this nature, the agreement may have been terminated if any statement in the prospectus relating to the 2014 Offer was untrue, any material omission from the prospectus arose or any breach of warranty occurred.
An offer agreement dated 21 September 2016 (the "2016 Offer Agreement") between PGI VCT (1), the Directors (2), Howard Kennedy (3), Beringea (4) and Beringea LLC (5) whereby Howard Kennedy agreed to act as sponsor to an offer for subscription launched by PGI VCT on 21 September 2016 (the "2016 Offer") and Beringea agreed to use its reasonable endeavours to procure subscribers for ordinary shares under the 2016 Offer (the "2016 Offer Agreement"). Under the 2016 Offer Agreement, which could be terminated by Howard Kennedy in certain circumstances of breach, the Directors and the Manager gave certain limited warranties to Howard Kennedy and PGI VCT agreed to indemnify Howard Kennedy in respect of its role as sponsor and under the 2016 Offer Agreement, both the warranties and the indemnity being customary for this type of agreement. As is customary for an agreement of this nature, the 2016 Offer Agreement could be terminated if any statement in the Prospectus was untrue, any material omission from the Prospectus arose or any breach of warranty occurred. The Manager was entitled to receive 3.0% (in the case of Advised Investors) and 5.5% (in the case of applications received directly or through Execution Only Brokers) of the gross proceeds of the 2016 Offer, out of which it agreed to pay all the costs of the Offer, including professional fees, marketing expenses and initial commission to Execution Only Brokers. Any trail commission payable to Execution Only Brokers was to be paid by PGI VCT. The Manager's ultimate parent, Beringea LLC, guaranteed the Manager's liability under the 2016 Offer Agreement.
An offer agreement dated 11 January 2019 between PGI VCT (1), the Directors (2), Howard Kennedy (3), and Beringea (4) whereby Howard Kennedy agreed to act as sponsor to the offer for subscription launched on 11 January 2019 (the "2019 Offer") and Beringea agreed to use its reasonable endeavours to procure subscribers for ordinary shares under the 2019 Offer (the "2019 Offer Agreement"). Under the agreement, which could be terminated by Howard Kennedy in certain circumstances of breach, the Directors and the Manager gave certain limited warranties to Howard Kennedy and PGI VCT agreed to indemnify Howard Kennedy in respect of its role as sponsor and under the agreement, both the warranties and the indemnity being customary for this type of agreement. As is customary for an agreement of this nature, the agreement could be terminated if any statement in the Prospectus was untrue, any material omission from the Prospectus arose or any breach of warranty occured. The Manager was entitled to receive 3.0% (in the case of Advised Investors) and 5.5% (in the case of applications received directly or through Execution Only Brokers) of the gross proceeds of the 2019 Offer, out of which it agreed to pay all the costs of the 2019 Offer, including professional fees, marketing expenses and initial commission to Execution Only Brokers. Any trail commission payable to Execution Only Brokers were to be paid by PGI VCT. The Manager's ultimate parent, Beringea LLC, guaranteed the Manager's liability under the 2019 Offer Agreement.
An offer agreement dated 27 January 2020 between PGI VCT (1), the Directors (2), Howard Kennedy (3), and Beringea (4) whereby Howard Kennedy agreed to act as sponsor to the Offer and Beringea agreed to use its reasonable endeavours to procure subscribers for ordinary shares under the Offer (the "Offer Agreement"). Under the agreement, which may be terminated by Howard Kennedy in certain circumstances of breach, the Directors and the Manager gave certain limited warranties to Howard Kennedy and PGI VCT agreed to indemnify Howard Kennedy in respect of its role as sponsor and under the agreement, both the warranties and the indemnity being customary for this type of agreement. As is customary for an agreement of this nature, the agreement may be terminated if any statement in the Prospectus is untrue, any material omission from the Prospectus arises or any breach of warranty occurs. The Manager is entitled to receive 3.0% (in the case of Advised Investors or through Execution Only Brokers) and 5.5% (in the case of applications received directly) of the gross proceeds of the Offer, out of which it has agreed to pay all the costs of the Offer, including professional fees, marketing expenses and initial commission to Execution Only Brokers. Any trail commission payable to Execution Only Brokers will be paid by PGI VCT. The Manager's ultimate parent, Beringea LLC, has guaranteed the Manager's liability under the Offer Agreement.
2.1 The issued fully paid share capital of the Company as at the date of this document and as it is expected to be after the Offer has closed (assuming the Offer is fully subscribed, issue costs of 3% of gross funds raised and a NAV of 73.6p (being the NAV at 30 November 2019) for the purpose of the Pricing Formula) is set out below, together with the issued fully paid share capital of the Company as expected after the Offer, assuming a 15% increase and decrease in the current NAV (NAVs of 84.6p and 62.6p, respectively):
| Date of this document | Issued | ||
|---|---|---|---|
| Amount | |||
| Ordinary Shares | Number 150,898,025 |
£15,089,803 | |
| After the Offer (NAV of 73.6p) | |||
| Issued | |||
| Number | Amount | ||
| Ordinary Shares | 177,256,720 | 17,725,672 | |
| After the Offer (NAV of 84.6p) | Issued | ||
| Number | Amount | ||
| Ordinary Shares | 173, 818, 629 | £17, 381, 863 | |
| After the Offer (NAV of 62.6p) | Issued |
| Number | Amount | ||
|---|---|---|---|
| Ordinary Shares | 181,908,255 | £18,190,826 | |
| N Ransome | 38,238 |
|---|---|
| B Dean | 29,252 |
| M. Moss | 82,541 |
| L Tilbian | nil |
2.1 The issued fully paid share capital of PGI VCT as at the date of this document and as it is expected to be after the Offer has closed (assuming the Offer is fully subscribed, issue costs of 3% of gross funds raised and a NAV of 61.3p (being the NAV at 30 November 2019 for the purpose of the Pricing Formula) is set out below, together with the issued fully paid share capital of the Company as expected after the Offer, assuming a 15% increase and decrease in the current NAV (NAVs of 70.5p and 52.1p, respectively):
| Date of this document | Issued | |
|---|---|---|
| Number | Amount | |
| Ordinary Shares | 201,065,151 | £3,254,642 |
| 36 |
| After the Offer (NAV of 61.3p) | Issued | ||
|---|---|---|---|
| Ordinary Shares | Number 232,712,785 |
Amount £3,766,922 |
|
| After the Offer (NAV of 70.5p) | Issued | ||
| Ordinary Shares | Number 228,584,833 |
Amount £3,700,103 |
|
| After the Offer (NAV of 52.1p) | Issued | ||
| Ordinary Shares | Number 238,297,662 |
Amount £3,857,324 |
| J. Stewart | 35,375 |
|---|---|
| M.Vlessing | 231,065 |
| M. Moss | 96,394 |
| N. Christie-Miller | 48,400 |
| A Kuriakose | 0 |
Additional information relating to the Companies is contained in a securities note issued by the Companies (Securities Note). A brief summary written in non-technical language conveying the essential characteristics of and risks associated with the Companies and ordinary shares in the capital of each of the Companies which are being offered for subscription (Offer Shares) (the Offers and each an Offer), is contained in a summary issued by the Companies (Summary).
The Securities Note, Registration Document and Summary have been prepared in accordance with Regulation (EU 2017/1129) and have been approved by the FCA as competent authority under Regulation (EU 2017/1129).
The FCA only approves this Registration Document as meeting the standards of completeness, comprehensibility and consistency imposed by Regulation (EU 2017/1129) and such approval shall not be considered as an endorsement of the issuers that are the subject of this Registration Document. This Registration Document, the Securities Note and the Summary together comprise a prospectus issued by the Companies dated 27 January 2020 (Prospectus).
The Prospectus has been drawn up as part of a simplified prospectus in accordance with Article 14 of Regulation (EU 2017/1129), and has been filed with the FCA in accordance with the Prospectus Regulation Rules and you are advised to read the prospectus in full. Summary information on each Company is also contained in its key information document (KID and together the KIDs).
Investments will usually be valued by the Boards as at 28 February, 31 May, 31 August and 30 November of each year and these net asset values will be communicated to Shareholders through a Regulatory News Service. The Companies will also announce when there has been a major change to their respective net asset value, for instance as a result of a disposal of an investment or if a Company undertakes a fundraising and needs to announce an interim valuation. The calculation of net asset value of a Company's investments will only be suspended in circumstances where the underlying data necessary to value the investments of that Company cannot readily, or without undue expenditure, be obtained. Details of any suspension would be announced through a Regulatory News Service.
Further details of these agreements and the fees paid to Beringea thereunder are set out in Part 6 of this document. Beringea is a related party as it is the Company's investment manager.
For the financial period ended 28 February 2019 and for the current financial year to date, apart from the agreements referred to in this paragraph, the Company has not been a party to any related party transactions for the purposes of Regulation (EC) No. 1606 / 2002.
1.13 PGI VCT entered into deeds of variation to an investment management agreement with Beringea on 11 January 2019 and 27 January 2020, the offer agreement referred to at paragraph 7 of Part 6 of this document dated 11 January 2019 and the offer agreement referred to at paragraph 8 of Part 6 of this document dated 27 January 2020.
Further details of these agreements and the fees paid to Beringea thereunder are set out in Part 6 of this document. Beringea is a related party as it is the Company's investment manager.
For the financial period ended 28 February 2019 and for the current financial year to date, apart from the agreements referred to in this paragraph, the Company has not been a party to any related party transactions for the purposes of Regulation (EC) No. 1606 / 2002.
and
(b) the Prospectus.
The following definitions are used throughout this document and, except where the context requires otherwise, have the following meanings.
| 2013 Offer | ProVen VCT's offer for subscription in respect of the 2013/2014 and 2014/2015 tax years as described in the Prospectus issued by ProVen VCT dated 22 October 2013 |
|---|---|
| 2014 Offer | PGI VCT's offer for subscription in respect of the 2014/2015 tax year as described in the prospectus issued by ProVen VCT dated 24 October 2014 |
| 2015 Offer | ProVen VCT's offer for subscription in respect of the 2015/2016 tax year as described in the prospectus issued by ProVen VCT dated 2 December 2015 |
| 2016 Offer | PGI VCT's offer for subscription in respect of the 2016/2017 tax year as described in the prospectus issued by ProVen VCT dated 21 September 2016 |
| 2006 Act | Companies Act 2006, as amended and to the extent in force from time to time |
| Adviser Charges | the amount an Investor agrees to pay a Financial Adviser in respect of the Offer |
| Beringea Group | Beringea LLC and its subsidiaries (which subsidiaries include Beringea) |
| Company | Proven VCT plc or PGI VCT, as the context permits , and together, the "Companies" |
| Directors or Board | the directors of each Company from time to time (as the context permits) |
| Equivalent ProVen Ordinary Share |
ProVen Ordinary Shares resulting from the conversion or consolidation of ProVen Original Shares on 30 October 2012 |
| Execution Only Broker | an intermediary, authorised by the Financial Conduct Authority, which does not provide advice to its clients |
| HMRC | Her Majesty's Revenue and Customs |
| Investor | an individual aged 18 or over who is resident in the United Kingdom who subscribes for New Ordinary Shares under the Offer |
| ITA | Income Tax Act 2007 (as amended) |
|---|---|
| Knowledge Intensive Company | a company satisfying the conditions in Section 331 A of Part 6 ITA |
| London Stock Exchange | London Stock Exchange plc |
| Manager or Beringea | Beringea LLP |
| Money Laundering Regulations |
the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 |
| NAV | the net asset value of the Ordinary Shares |
| New Ordinary Shares | new Ordinary Shares to be issued under the Offer |
| Offer | the offer for subscription of New Ordinary Shares described in the Prospectus |
| Official List | the Official List of the FCA Authority |
| Ordinary Shares | PGI Ordinary Shares and ProVen Ordinary Shares, including New Ordinary Shares where the context permits |
| PGI Buyback Adjustment | an adjustment to reflect PGI Ordinary Shares repurchased by PGI VCT for cancellation after 21 August 2014, made firstly against the PGI Original Offer and thereafter against successive PGI Subsequent Offers in the order in which they were raised provided that a PGI Subsequent Offer will only be used for the PGI Buyback Adjustment if all the share capital allotted under a PGI Subsequent Offer was allotted more than five years before the date the PGI Ordinary Shares were repurchased and where there are outstanding PGI Ordinary Shares in respect of that PGI Subsequent Offer. |
| PGI DRIS Adjustment | an adjustment to reflect PGI Ordinary Shares allotted by PGI VCT in respect of its dividend re-investment scheme after 21 August 2014, made firstly against any open PGI Subsequent Offer at the time of the associated dividend payment or secondly against the most recently raised PGI Subsequent Offer. |
| PGI Ordinary Shares or PGI Shares |
ordinary shares of 1.6187p each in the capital of PGI VCT |
| PGI Respective Offer Hurdle | the greater of: (i) 1.25 times the PGI Respective Offer Initial Net Asset Value per Share; |
| and | |
|---|---|
| (ii) the PGI Respective Offer Initial Net Asset Value per Share increased by the Bank of England base rate plus one per cent, per annum (compound) from: • 31 August 2012 in respect of the PGI Original Offer; or • the date of the first allotment of PGI Ordinary Shares under |
|
| each PGI Subsequent Offer in respect of all PGI Subsequent Offers. |
|
| the net asset value per PGI Ordinary Share of the Company as at: | |
| PGI Respective Offer Initial Net Asset Value per Share |
(i) 31 August 2012, in respect of the PGI Original Offer, being 78.5p; or |
| (ii) the date of the first allotment of PGI Ordinary Shares under each PGI Subsequent Offer, in respect of all PGI Subsequent Offers. |
|
| PGI Respective Offer | in respect of each PGI Respective Offer, at the relevant financial year end, the sum of: |
| Performance Value | (i) the audited net asset value per PGI Ordinary Share for a PGI Respective Offer at that date; |
| (ii) PGI Respective Offer Cumulative Dividends; and |
|
| (iii) all performance fees per PGI Ordinary Share paid by the shareholders of the PGI Respective Offer in relation to financial years starting after 29 February 2012. |
|
| PGI Respective Offer Shares | at the relevant financial year end, the number of issued and outstanding PGI Ordinary Shares attributable to each PGI Respective Offer being: |
| (i) in respect of the PGI Original Offer, the number of PGI Ordinary Shares in issue as at 21 August 2014, being 62,063,191, less any relevant PGI Buyback Adjustment plus any relevant PGI DRIS Adjustment; and |
|
| (ii) in respect of PGI Subsequent Offers, the aggregate number of PGI Ordinary Shares allotted under the PGI Subsequent Offer, less any relevant PGI Buyback Adjustment plus any relevant PGI DRIS Adjustment. |
|
| PGI Subsequent Offer | an issue of PGI Ordinary Shares by PGI VCT as part of an offer for subscription or top up offer after 21 August 2014, but excluding PGI Ordinary Shares issued under the terms of PGI VCT's dividend reinvestment scheme |
| PGI VCT | ProVen Growth & Income VCT plc |
|---|---|
| Pricing Formula | the formula used to calculate the number of New Ordinary Shares to be issued to an Investor, as set out on page 29 of the Securities Note |
| ProVen Buyback Adjustment | an adjustment to reflect ProVen Original Shares or ProVen Ordinary Shares repurchased by ProVen VCT for cancellation after 29 February 2012, made firstly against the ProVen Original Offer where there are outstanding Equivalent ProVen Ordinary Shares in respect of the ProVen Original Offer and thereafter against successive ProVen Subsequent Offers in the order in which they were raised provided that a ProVen Subsequent Offer will only be used for the ProVen Buyback Adjustment if all the share capital allotted under a ProVen Subsequent Offer was allotted more than five years before the date the ProVen Original Shares or ProVen Ordinary Shares were repurchased and where there are outstanding Equivalent ProVen Ordinary Shares or ProVen Ordinary Shares in respect of that Subsequent Offer. |
| ProVen DRIS Adjustment | an adjustment to reflect ProVen Ordinary Shares allotted by the ProVen VCT in respect of its dividend re-investment scheme after 29 February 2012, made firstly against any open ProVen Subsequent Offer at the time of the associated dividend payment or secondly against the most recently raised ProVen Subsequent Offer. |
| ProVen Ordinary Shares or ProVen Shares |
ordinary shares of 10p each in the capital of the ProVen VCT |
| ProVen Original Offer | the Equivalent ProVen Ordinary Shares in issue as at 29 February 2012 |
| ProVen Original Shares | 5p ordinary shares, 25p 'C' shares and 1p 'D' shares in the capital of ProVen VCT in issue prior to 30 October 2012 |
| ProVen Residual PIF | has the meaning given to it on page 14 |
| ProVen Residual PIF Adjustment |
the ProVen Residual PIF divided by 37,271,751 |
| ProVen Respective Offer | the ProVen Original Offer and each separately identifiable ProVen Subsequent Offer |
| ProVen Respective Offer Cumulative Dividends |
the cumulative dividends per ProVen Ordinary Share paid by the Company from: (i) 29 February 2012, in respect of the ProVen Original Offer; or (ii) the date of the first allotment of ProVen Original |
| Shares or ProVen Ordinary Shares under a ProVen Subsequent Offer, in respect of all ProVen Subsequent Offers. |
|
|---|---|
| in respect of the ProVen Original Offer the greater of: | |
| ProVen Respective Offer Hurdle |
i) 117.2p; or |
| ii) the ProVen Respective Offer Initial Net Asset Value per Share increased by the Bank of England base rate plus one per cent, per annum (compound) from 31 August 2011 |
|
| in respect of each ProVen Subsequent Offer the greater of: | |
| (i) 1.25 times the ProVen Respective Offer Initial Net Asset Value per Share; and |
|
| (ii) the ProVen Respective Offer Initial Net Asset Value per Share increased by the Bank of England base rate plus one per cent, per annum (compound) from the date of the first allotment of ProVen Original Shares or ProVen Ordinary Shares under that Subsequent Offer. |
|
| ProVen Respective Offer Initial Net Asset Value per Share |
the net asset value per ProVen Ordinary Share or Equivalent ProVen Ordinary Share of the Company as at: |
| i) 29 February 2012, in respect of the ProVen Original Offer, being 92.9p; or |
|
| ii) the date of the first allotment of ProVen Original Shares or ProVen Ordinary Shares under each ProVen Subsequent Offer, in respect of all ProVen Subsequent Offers. |
|
| ProVen Respective Offer Performance Value |
in respect of each ProVen Respective Offer, at the relevant financial year end, the sum of: |
| (i) the audited net asset value per ProVen Ordinary Share or ProVen Equivalent Ordinary Share for a ProVen Respective Offer at that date; |
|
| (ii) ProVen Respective Offer Cumulative Dividends; |
|
| (iii) all performance fees per ProVen Ordinary Share or Equivalent ProVen Ordinary Share paid by the shareholders of the ProVen Respective Offer in relation to financial years starting after 29 February 2012;and |
|
| (iv) any ProVen Residual PIF Adjustment where relating to that ProVen Respective Offer (whether relating to that or any previous financial year) |
|
| ProVen Respective Offer Shares |
at the relevant financial year end, the number of issued and outstanding ProVen Ordinary Shares or Equivalent ProVen Ordinary Shares attributable to each ProVen Respective Offer being: |
| i) in respect of the ProVen Original Offer, the number of Equivalent ProVen Ordinary Shares in issue as at 29 February 2012, less any relevant ProVen Buyback Adjustment plus any relevant ProVen DRIS Adjustment; and ii) In respect of ProVen Subsequent Offers, the aggregate number of ProVen Ordinary Shares or Equivalent ProVen Ordinary Shares allotted under the ProVen Subsequent Offer, less any relevant ProVen Buyback Adjustment plus any relevant ProVen DRIS Adjustment. |
|
|---|---|
| ProVen Subsequent Offer | an issue of ProVen Original Shares or ProVen Ordinary Shares by ProVen VCT as part of an offer for subscription or top up offer after 29 February 2012, but excluding ProVen Ordinary Shares issued under the terms of ProVen VCT's dividend reinvestment scheme. |
| ProVen VCT | Proven VCT plc |
| Prospectus | together, this document, the Securities Note and the Summary |
| Qualifying Company | a company satisfying the conditions as described in Part 3 of the Securities Note |
| Qualifying Investment | an investment satisfying the conditions as described in Part 3 of the Securities Note |
| Qualifying Trade | a trade complying with the requirements of Chapter 4 of Part 6 ITA |
| Registration Document | this document |
| Risk Finance State Aid | State aid received by a company as defined in Section 280B (4) of ITA |
| Securities Note | the securities note that, together with this document and the Summary, constitutes the Prospectus |
| Shares | shares in the capital of the Company |
| Shareholder | a holder of Shares |
| Sponsor | Howard Kennedy Corporate Services LLP |
| Summary | the summary that, together with this document and the Securities Note, constitutes the Prospectus |
| The Risk Finance Guidelines | guidelines on state aid to promote risk finance investments 2014/C 19/04 |
| Venture Capital Trust or VCT | a venture capital trust as defined by section 259 ITA |
|---|---|
| ------------------------------ | ------------------------------------------------------- |
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