Prospectus • Feb 2, 2016
Prospectus
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Offer for subscription to raise up to £20 million AIM VCT PLC Offer for subscription to raise up to £10 million
If you are in any doubt about the action to be taken, you should immediately consult your bank manager, stockbroker, solicitor, accountant or other independent financial adviser authorised pursuant to the FSMA.
This document, comprising a prospectus dated 2 February 2016 issued by Unicorn AIM VCT plc (Company), has been prepared in accordance with the Prospectus Rules made under Part VI of the FSMA and has been approved for publication by the Financial Conduct Authority (FCA) under section 87 of FSMA and the Prospectus Rules. This document has been prepared for the purposes of complying with the prospectus directive, English law and the rules of the UK Listing Authority and the information disclosed may not be the same as that which would be disclosed if this document had been prepared in accordance with the laws of a jurisdiction outside England.
The Company and the Directors, whose names appear on the inside back cover of this document, accept responsibility for the information contained in this document. To the best of the knowledge and belief of the Company and the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.
Persons receiving this document should note that, in connection with the Offer, Panmure Gordon (UK) Limited (Panmure Gordon) is acting as sponsor for the Company and Unicorn Asset Management Limited (Unicorn AM) is acting as promoter to the Offer (and, in each case, for no-one else) are both authorised and regulated in the United Kingdom by the FCA and will not (subject to the responsibilities and liabilities imposed by FSMA or the regulatory regime established thereunder) be responsible to any other person for providing the protections afforded to customers of Panmure Gordon and Unicorn AM (respectively) for providing advice in connection with the Offer.
Shakespeare Martineau LLP, which is regulated in the United Kingdom by the Solicitors Regulation Authority, is acting as legal adviser to the Company and no-one else and will not be responsible to any other person for providing advice in connection with any matters referred to herein.
Application has been made to the UK Listing Authority for all of the New Shares to be admitted to the premium segment of the Official List and to the London Stock Exchange for such New Shares to be admitted to trading on its main market for listed securities. It is expected that such admission to the Official List will become effective and that dealings in the New Shares will commence within three business days following allotment. The Company's existing issued Shares are traded on the London Stock Exchange's main market for listed securities.
(Registered in England and Wales with registered number 04266437)
The attention of prospective investors in the Company who are resident in, or citizens of, territories outside the United Kingdom is drawn to the information under the heading ''Overseas Shareholders'' in paragraph 5 of Part VIII of this document. The New Shares will not be registered under the United States Securities Act 1933 or the United States Investment Company Act 1990, and no action has been, or will be, taken in any jurisdiction by, or on behalf of the Company, Unicorn AM or LGBR Capital LLP (LGBR Capital), the distributor for the Offer, which would permit a public offer of the New Shares in any jurisdiction other than the United Kingdom, nor has any such action been taken with respect to the possession or distribution of this document other than in the United Kingdom.
Copies of this Prospectus (and any supplementary prospectus published by the Company) are available free of charge from the national storage mechanism (www.morningstar.co.uk/uk/NSM) and from Unicorn AM and LGBR Capital:
| Unicorn Asset Management Limited | LGBR Capital London Limited |
|---|---|
| First Floor Office, Preachers Court | 8 Angel Court |
| The Charterhouse, Charterhouse Square | London |
| London EC1M 6AU | EC2R 7HJ |
| telephone: 020 7253 0889 | telephone: 020 3195 7100 |
| download: www.unicornam.com | download: www.lgbrcapital.com |
| email: [email protected] | email: [email protected] |
The procedure for, and the terms and conditions of, application under this Offer are set out at the end of this document together with the Application Form and Tax Residency Self Certification Form (for applicants who are not already a shareholder in the Company). Completed Application Forms (and, where relevant, the Tax Residency Self Certification Form) must be posted or delivered by hand (during normal business hours only) to the receiving agent, Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU. The Offer opens on 2 February 2016 and will close on 30 June 2016 (or as soon as the Offer is fully subscribed or otherwise at the Board's discretion).
YOUR ATTENTION IS DRAWN TO THE RISK FACTORS ON PAGES 10 AND 11.
| SUMMARY | 3 | |
|---|---|---|
| RISK FACTORS | 10 | |
| OFFER TIMETABLE, STATISTICS & COSTS | 12 | |
| LETTER FROM THE CHAIRMAN | 13 | |
| PART I | INVESTMENT OPPORTUNITY | 15 |
| PART II | THE OFFER | 18 |
| PART III | THE BOARD AND THE INVESTMENT MANAGER | 21 |
| PART IV | INVESTMENT OBJECTIVE AND POLICY | 23 |
| PART V | MANAGEMENT AND ADMINISTRATION | 24 |
| PART VI | LARGEST INVESTMENTS | 26 |
| PART VII | TAXATION | 28 |
| PART VIII | ADDITIONAL INFORMATION | 32 |
| PART IX | DEFINITIONS | 54 |
| PART X | APPLICATION FOR NEW SHARES | 56 |
| APPLICATION FORM | 63 | |
| TAX RESIDENCY SELF CERTIFICATION FORM | ||
| CORPORATE INFORMATION |
Summaries are made up of disclosure requirements known as 'Elements'. These Elements are numbered in Sections A to E.
This summary contains all of the Elements required to be included in a summary for the type of shares being issued pursuant to the prospectus issued by the Company (as defined below) (Prospectus) containing an offer for subscription (Offer) of ordinary shares in the Company (New Shares) and the Company being a closed-ended investment fund. Some of the Elements are not required to be addressed and, as a result, there may be gaps in the numbering sequence of the Elements.
Even though an Element may be required to be inserted in this summary, it is possible that no relevant information can be given regarding that Element. In these instances, a short description of the Element is included, together with an appropriate 'Not applicable' statement.
| A | Introduction and Warnings | |
|---|---|---|
| A1 | Warning | This summary should be read as an introduction to the Prospectus. Any decision to invest in the securities of the Company should be based on consideration of the Prospectus as a whole by the investor. Where a claim relating to the information contained in this Prospectus is brought before a Court, the plaintiff investor might, under the national legislation of member states of the European Union, have to bear the costs of translating this Prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled this summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the Prospectus or it does not provide, when read together with other parts of the Prospectus, key information in order to aid investors when considering whether to invest in such securities. |
| A2 | Use of Prospectus by financial intermediaries for subsequent resale or final placement |
The Company and the Directors consent to the use of the Prospectus, and accept responsibility for the content of the Prospectus, with respect to subsequent resale or final placement of securities by financial intermediaries, from the date of the Prospectus until the close of the Offer. The Offer is expected to close on or before 30 June 2016, unless previously extended by the Directors. There are no conditions attaching to this consent. Financial intermediaries must give investors information on the terms and conditions of the Offer at the time they introduce the Offer to investors. |
| B | Issuer | |
|---|---|---|
| B1 | Legal and commercial name |
Unicorn AIM VCT plc (Company) |
| B2 | Domicile / Legal form / Legislation / Country of incorporation |
The Company is a public limited liability company which is registered in England and Wales with registered number 04266437. The principal legislation under which the Company operates is the Companies Act 2006 (and regulations made thereunder). |
| B5 | Group description | Not applicable. The Company is not part of a group. |
| B6 | Material Shareholders / Differing voting rights / Control |
The Company has no material shareholders with different voting rights. Shareholders in the Company (Shareholders) have the same voting rights in respect of the existing share capital of that Company. As at 1 February 2016 (this being the latest practicable date prior to publication of this document), the Company is not aware of any person who, directly or indirectly, has or will have an interest in the capital of the Company or voting rights which is notifiable under UK law (under which, pursuant to Companies Act 2006 and the Listing Rules and Disclosure and Transparency Rules of the FCA, a holding of 3% or more in a Company will be notified to the Company). |
| Selected financial information and |
Certain selected historical information of the Company is set out below: | |||||
|---|---|---|---|---|---|---|
| statement of any significant changes |
Year ended 30 September 2013 (audited) (£'000) |
Year ended 30 September 2014 (audited) (£'000) |
Year ended 30 September 2015 (audited) (£'000) |
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| Investment income | £1,174 | £1,232 | £1,885 | |||
| Net revenue on ordinary activities before taxation | £440 | £350 | £823 | |||
| Revenue earnings per Share | 0.77p | 0.57p | 1.11p | |||
| Dividends paid per Share | 5p | 6p | 6p | |||
| Total assets | £73,992 | £92,212 | £124,616 | |||
| NAV per Share | 129.78p | 143.70p | 155.61p | |||
| The Company's net asset value per Share has increased from 129.78p as at 30 September 2013 to 155.61p as at 30 September 2015 and dividends of 12p in aggregate have been paid per Share between 1 October 2013 and 30 September 2015. The unaudited net asset value per Share as at 31 December 2015 was 163.76p and a dividend of 6.25p subject to shareholder approval, will be paid on 19 February 2016 to Shareholders on the register on 29 January 2016. There has been no significant change in the financial condition and operating results of the Company since 30 September 2015, the date to which the last audited annual financial information on the Company has been published, to the date of this document. |
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| B8 | Key pro forma financial information |
Not applicable. There is no pro forma financial information in the Prospectus. | ||||
| B9 | Profit forecast | Not applicable. There are no profit forecasts in the Prospectus. | ||||
| B10 | Qualifications in the audit report |
Not applicable. There were no qualifications in the audit reports for the Company in the years ended 30 September 2013, 2014 and 2015. |
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| B11 | Insufficient working capital |
Not applicable. The Company is of the opinion that its working capital is sufficient for its present requirements, that is for at least the twelve month period from the date of this document. |
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| B34 | Investment objective and policy, including investment restrictions |
Investment objective The Company's objective is to provide Shareholders with an attractive return from a diversified portfolio of investments, predominantly in the shares of AIM quoted companies, by maintaining a steady flow of dividend distributions to Shareholders from the income and capital gains generated by the portfolio. It is also the objective that the Company should continue to qualify as a venture capital trust, so that Shareholders benefit from the taxation advantages that this brings. To achieve this at least 70% of the Company's total assets are to be invested in qualifying investments of which 30% by value (70% for funds raised after 6 April 2011) must be in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules). |
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| Investment policy In order to achieve the Company's investment objective, the Board has agreed an investment policy which requires the Investment Manager to identify and invest in a diversified portfolio, predominantly of VCT qualifying companies quoted on AIM that display a majority of the following characteristics: experienced and well-motivated management; • products and services supplying growing markets; • sound operational and financial controls; and • good cash generation to finance ongoing development allied with a progressive dividend • |
| Asset allocation and risk diversification policies, including maximum exposures, are to an extent | ||
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| governed by prevailing VCT legislation. No single holding may represent more than 15% (by VCT value) of the Company's total investments and cash, at the date of investment. |
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| There are a number of VCT conditions which need to be met by the Company which may change form time to time. The Investment Manager will seek to make qualifying investments in accordance with such requirements. |
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| Asset mix Where capital is available for investment while awaiting suitable VCT qualifying opportunities, or is in excess of the 70% VCT qualification threshold, it may be held in cash or invested in money market funds, collective investment vehicles or non-qualifying shares and securities of quoted and unquoted companies registered in the UK. |
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| Borrowing To date the Company has operated without recourse to borrowing. The Board may however consider |
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| the possibility of introducing modest levels of gearing up to a maximum of 10% of the adjusted capital and reserves, should circumstances suggest that such action is in the interests of Shareholders. |
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| B35 | Borrowing limits | The articles of association of the Company restrict borrowings to 10% of the adjusted capital and reserves (as defined therein). The Company, however, has never borrowed and the Board currently has no plans to undertake any borrowing. |
| B36 | Regulatory status | The Company is subject to the provisions of the Companies Act 2006 and UK law generally, its Shares are listed on the premium segment of the Official List and, as a qualifying VCT, the Company is subject to regulation by HMRC in order to retain such a status. |
| B37 | Typical investor | A typical investor in the Company will be a UK taxpayer who is aged 18 or over and who already has a portfolio of VCT and non-VCT investments (such as unit trusts, OEICs, investment trusts and direct shareholdings in listed and non-listed companies). The investor should be comfortable with the risks associated with an investment in a VCT and be willing to retain the investment for at least five years (in order to retain their upfront income tax relief). |
| B38 | Investments of 20% or more in a single company |
Not applicable. The Company does not have any investments which represent more than 20% of its gross assets in a single company or group. |
| B39 | Investments of 40% or more in a single company |
Not applicable. The Company does not have any investments which represent more than 40% of its gross assets in a single company or group. |
| B40 | Service providers | Unicorn Asset Management Limited (Unicorn AM) has been appointed the investment manager to the Company and is entitled to an investment management fee of an amount equal to 2% per annum of the Company's net assets calculated and charged quarterly, save for investments made by the Company in other Unicorn AM managed funds, in which case no additional management fee is payable in respect of such investments. |
| The Investment Manager is also entitled to receive a performance incentive fee of 20% of dividends made to Shareholders over and above the Target Return in any accounting period. The Target Return for these purposes is 6p per Share (or, if the relevant accounting period is less than or greater than 12 months, an amount equal to a pro rata reduction or increase to that amount for that accounting period). Any cumulative shortfalls below the 6p per annum dividend hurdle after the financial period ended on 30 September 2010 has to be made up in later years before any incentive fee is payable in the relevant year. Such payment will be subject to maintaining NAV at 125p per Share. Although the arrangement allows for the performance incentive calculation to be adjusted in such manner as the auditors confirm in writing where the Company issues further Shares, it has been agreed that no adjustment will be made as a result of the Offer which would result in a reduction to the requirement to maintain NAV at no less than 125p per Share. |
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| ISCA Administration Services Limited was appointed to provide administration services on 1 September 2014 and is the appointed company secretary to the Company and is entitled to an annual fee of £126,000 plus VAT. |
| B41 | Regulatory status of Unicorn AM |
Unicorn AM is registered in England and Wales as a private limited liability company under number 03919499. Unicorn AM is authorised and regulated by the Financial Conduct Authority, with registered number 192164. |
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| B42 | Calculation of net asset value |
The Company's net asset value is calculated on a monthly basis, which is published on the Company's website (www.unicornaimvct.co.uk). The Company also publishes, on a monthly basis, its net asset value on an appropriate regulatory information service. If for any reason valuations are suspended, relevant shareholders will be notified in a similar manner. |
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| B43 | Umbrella collective investment scheme |
Not applicable. The Company is not part of an umbrella collective investment scheme. | |||||
| B44 | Absence of financial statements |
Not applicable. The Company has commenced operations and published financial statements. | |||||
| B45 | Investment portfolio | The Company predominantly invests in a diverse portfolio of AIM quoted companies. A summary of the Company's portfolio is set out below: |
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| Net assets* (£m) |
NAV per Share* (p) |
Dividends paid** (p) |
Unaudited Total Return (p) |
Number of investments* |
Carry value of investments * (£m) |
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| 130.98 | 163.76 | 26.0 | 189.76 | 72 | 128.74 | ||
| * as at 31 December 2015 (unaudited). ** since 9 March 2010, the date on which the Company merged with Unicorn AIM VCT II plc |
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| B46 | Most recent NAV per Share |
As at 31 December 2015, the unaudited NAV per Share was 163.76p. |
| C | Securities | |
|---|---|---|
| C1 | Description and class of securities. |
The securities being offered pursuant to the Offer are ordinary shares of 1p each in the capital of the Company (ISIN: GB00B1RTFN43) (Share). |
| C2 | Currency | The Company's share capital comprises ordinary shares of 1 penny (GBP) each. |
| C3 | Shares in issue | 86,898,157 Shares are in issue at the date of this document (all fully paid up). The maximum number of New Shares to be issued pursuant to the Offer is 10 million. |
| C4 | Description of the rights attaching to the securities |
The New Shares in the Company will rank equally in all respects with each other and the existing share capital of the Company from the date of issue of such New Shares. |
| C5 | Restrictions on transfer |
The New Shares will be listed on the premium segment of the Official List and as, a result, will be freely transferable. |
| C6 | Admission | Application has been made to the UK Listing Authority for the New Shares to be listed on the premium segment of the Official List and will be made to the London Stock Exchange for such shares to be admitted to trading on its main market for listed securities. It is anticipated that dealings in the New Shares will commence within three business days following allotment. |
| C7 | Dividend policy | The Board has a policy of maintaining a steady flow of dividend distributions to Shareholders and intends to continue with this policy. However, the ability of the Company to pay dividends in the future cannot be guaranteed and no forecast or projection is to be implied or inferred. |
| D | Risks | |
|---|---|---|
| D2 | Key information on the risks specific to the Company |
Company While it is the intention of the Board that the Company will continue to be managed so as to • qualify as a VCT, there can be no guarantee that the Company's status will be maintained. A failure to meet the qualifying requirements could result in the loss of tax reliefs previously obtained. |
| The tax rules, or their interpretation, in relation to an investment in the Company and/or the • rates of tax may change during the life of the Company and may apply retrospectively which could affect tax reliefs obtained by Shareholders and the VCT status of the Company. |
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| During the July 2015 summer budget new qualifying conditions were announced that • became effective from Royal Assent to the Finance (No2) Act 2015 on 18 November 2016. This introduced a maximum age limit for qualifying investments (generally seven years from first commercial sale), a maximum amount of Risk Finance State Aid which a qualifying company can receive over its lifetime (£12 million, or £20 million for knowledge intensive companies) and an investee company cannot use the funds it receives from a VCT to purchase existing shares in a company, an existing business or an existing trade from another company. In addition, a VCT can only buy existing shares in a company in limited circumstances. There is a risk that any investment made after 1 January 2015 and before Royal Assent in a company which exceeds the seven year age limit, has received total Risk Finance State Aid in excess of €15 million or has been used to purchase an existing business or trade from another company may result in tax relief being withdrawn. |
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| Any change in governmental, economic, fiscal, monetary or political policy, in particular • current government spending reviews and cuts, could materially affect, directly or indirectly, the operation of the Company and/or the performance of the Company and the portfolio of companies in which it invests and the value of and returns from Shares and/or its ability to maintain VCT status. |
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| Investment in AIM-traded, ISDX-traded companies and unquoted companies, by its nature, • involves a higher degree of risk than investment in companies listed on the Official List. The fact that a share is traded on AIM or ISDX markets does not guarantee its liquidity and there may be difficulties in valuing and disposing of such securities. |
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| There can be no guarantee that the Company's investment objectives will be achieved or • that investment opportunities will be available. In particular, Shareholders should be aware of the additional restrictions included in the Finance (No2) Act 2015 (as detailed above) which restrict the available opportunities for investment and, as a result, may adversely affect performance and returns. |
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| D3 | Key information on | Securities |
| the risks specific to the securities |
The value of Shares, and the income from them, can fluctuate and investors may not get back • the amount they invested. There is no certainty that the market price of the Shares will fully reflect the underlying NAV. In addition, there is no guarantee that dividends will be paid or that any dividend objective stated will be met. |
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| Although the existing Shares issued by the Company have been (and it is anticipated that • the New Shares in the Company to be issued pursuant to the Offer will be) admitted to the Official List of the UKLA and to trading on the London Stock Exchange's main market for listed securities, there may not be a liquid market and investors may find it difficult to realise their investments. Investment in the Company should be seen as a long term investment. |
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| If qualifying investors dispose of their New Shares within five years of issue, they will be subject • to clawback by HMRC of any income tax reliefs originally claimed. |
| E | Offer | ||||||
|---|---|---|---|---|---|---|---|
| E1 | Offer net proceeds | The total expenses payable by the Company in connection with the Offer (including VAT where applicable) will be an amount equal to 2.5% of the Application Amounts in respect of applications accepted under the Offer (less any fees waived by the Investment Manager in respect of particular applications), plus execution only initial commission and annual trail commission. The total expenses will, therefore, be a maximum of £550,000 (assuming that the fundraising amount is fully subscribed at £10 million and assuming that the maximum amount of initial commission of 3% is payable to execution only intermediaries in respect of all investors, but ignoring annual trail commission). The maximum net proceeds will, on the same basis, amount to at least £9,450,000. |
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| E2a | Reasons for the Offer and use of proceeds |
The Investment Manager is continuing to see attractive investment opportunities in companies seeking finance in a broad spectrum of sectors with good growth and income prospects. In order to take advantage of these opportunities, the Board is seeking to raise further funds through the Offer. |
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| The additional funds raised under the Offer will be invested as follows: | |||||||
| To make new and follow-on investments in accordance with its investment policy. • |
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| To fund payment of dividends and market purchases of Shares (subject to having unrestricted • (for VCT legislation purposes) distributable reserves. |
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| To meet annual running costs. • |
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| E3 | Terms and conditions of the Offer |
The number of New Shares allotted under the Offer by the Company will be determined by applying the following allotment formula: |
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| Number of New Shares = A - B - C NAV |
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| Where: | |||||||
| A is the Application Amount (this being the amount remitted to the Company with the investor's application, including any amount requested to be facilitated, as accepted under the Offer) |
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| B is 2.5% of the Application Amount, less any amount of the fee payable to the Investment Manager that may be waived by the Investment Manager at its discretion |
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| C is either: |
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| (i) in respect of advised investors, the amount of any initial adviser charge agreed to be facilitated (up to the maximum amount of 3% of the Application Amount); or |
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| (ii) in respect of execution only investors, the amount of any initial commission agreed to be paid to the execution only intermediary (up to a maximum of 3% of the Application Amount (i.e. 3% of A)) less any amount of initial commission agreed to be waived |
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| NAV is the most recently published NAV per Share at the time of allotment, adjusted for dividends subsequently declared |
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| The offer price per New Share will be determined by dividing the amount of the investor's application accepted to be used to subscribe for New Shares (ie the Application Amount, less any amount of initial adviser charge agreed to be facilitated in respect of an advised investor) by the number of New Shares to be issued resulting from the allotment formula. |
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| Advised investors who receive advice from their financial intermediaries can request for all or part of any initial adviser charge to be facilitated by the Company's receiving agent (subject to a maximum amount equal to 3% of the Application Amount). If facilitated, this agreed amount will be deducted from the monies received from the relevant investor. |
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| The Investment Manager and LGBR Capital may agree to pay an initial commission to execution only intermediaries (subject to an amount equal to maximum of 3% of the Application Amount). Execution only intermediaries will also normally be paid annual trail commission of an amount equal 0.375% of the net asset base of the New Share (subject to a maximum cumulative payment of 2.25% of the offer price of the New Share in question.) Initial and annual trail commission will only be paid to the extent, permitted under legislation and regulation. The Investment Manager may, with the consent of the Board, agree to pay trail commission on a different basis, providing it does not exceed the maximum cumulative payment of 2.25% of the offer price of the New Share in question. |
| E4 | Description of any interest that is material to the issue |
Not applicable. There are no interests that are material to the issue of New Shares. |
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| E5 | Name of persons selling securities |
Not applicable. No entity is selling securities in the Company. |
| E6 | Amount and percentage of dilution |
If 10 million New Shares are allotted by the Company pursuant to the Offer (this being the maximum number of New Shares that may be allotted pursuant to the Offer), the existing 86,898,157 Shares would represent 89.7% of the enlarged issued share capital. |
| E7 | Expenses charged to the investor. |
The maximum costs of the Offer to an investor (save for annual trail commission, which the Company will be responsible for) will be 2.5% of the Application Amount plus (i) in respect of execution only investors, any initial commission payable to execution only intermediaries (this being a maximum of 3% of the Application Amount) or (ii) in respect of advised investors, any amount of initial adviser charges, which is payable by the investor. |
Existing and prospective investors should consider carefully the following risk factors in addition to the other information presented in this document and the Prospectus as a whole. If any of the risks described below materialise, it could have a material effect on the Company's business, financial condition or results of operations. The risks and uncertainties described below are not the only ones the Company, the Board or investors in the Shares will face. Additional risks not currently known to the Company or the Board, or that the Company or the Board currently believes are not material, may also adversely affect the Company's business, financial condition and results of operations. The value of the Shares could decline due to any of these risk factors described below, and investors could lose part or all of their investment. Investors should consult an independent financial adviser authorised under FSMA. The attention of prospective investors is drawn to the following risks.
The value of an investment in the Company, and the income derived from it, may go down as well as up and an investor may not get back the amount they invested. In addition, there is no certainty that the market price of the Shares will fully reflect their underlying NAV nor that any dividends will be paid. Without the Company undertaking share buybacks, trading in the shares is unlikely to be active, so the bid price of the shares (the price which sellers are likely to be offered in the market) is likely to reflect the price at which the Company may decide to buy shares back for cancellation. Shareholders should not rely upon any share buy-back policy to provide any certainty of being able to sell their Shares at prices that reflect the underlying NAV.
Although the existing Shares have been (and it is anticipated that the New Shares to be issued pursuant to the Offer will be) admitted to the Official List of the UK Listing Authority and are (or will be) traded on the London Stock Exchange's main market for listed securities, it is likely that there will not be a liquid market in the New Shares (which may be due to up front tax relief not being available for VCT shares bought in the market and VCT shares generally trading at a discount to net asset value) and Shareholders may have difficulty in selling their Shares as a result. Shareholders may only be able to realise their investment at a wide discount to net asset value per share or may not be able to sell at all. An investment in the Company should, therefore, be considered as long-term.
The past performance of the Company or other funds managed or advised by the Investment Manager is not a guide to the future performance of the Company. The value of Shares in the Company largely depends on the performance of the Company's underlying assets. The value of the investment and the dividend stream can rise and fall. Shareholders may get back less than the amount originally invested, even taking into account the available tax reliefs.
There can be no guarantee that the Company's investment objectives will be achieved or that investment opportunities will be available. In particular, Shareholders should be aware of the additional restrictions included in the Finance (No2) Act 2015 (as detailed below) which restrict the available opportunities for investment and, as a result, may adversely affect performance and returns. Shareholders should be aware that as a result of the additional restrictions, new capital raised by the Company under the current Offer and under future offers of investment may be directed towards earlier stage investment which may or may not be profitable at the point of investment.
Investment in AIM-traded, ISDX market-traded and unquoted companies by its nature involves a higher degree of risk than investment in companies listed on the Official List. In particular, the viability and financial performance of small companies often depends on a narrow product range, small markets, limited financial resources, a small number of staff and counterparties, and may be more susceptible to political, exchange rate, taxation and regulatory changes. In addition, the market for securities in smaller companies may be less regulated and is usually less liquid than that for securities in larger companies, bringing with it potential difficulties in acquiring, valuing and disposing of such securities. Full information for determining their value or the risks to which they are exposed may also not be available. Investment returns will, therefore, be uncertain and are likely to involve a higher degree of risk than investment in a company listed on the Official List.
The Company's investments may be difficult to realise. The fact that a share is traded on AIM or ISDX markets does not guarantee its liquidity. The value of the Company's portfolios and opportunities for realisation will also depend on stock market conditions. There may also be constraints imposed on the realisations of investments by the need to maintain the VCT status of the Company, which may restrict the Company's ability to obtain maximum value from its investments. In addition, although the Company may receive conventional venture capital rights in connection with some investments, as a minority investor it will not be in a position fully to protect its interests.
The availability of new shares in AIM or ISDX markets is subject to market forces and there can be no certainty that there will be sufficient new share issues to enable the Company to achieve the intended level of investment in Qualifying Investments.
Changes in legislation concerning VCTs, in particular in relation to qualifying holdings and qualifying trades, may limit the number of qualifying investment opportunities and/or reduce the level of returns which might otherwise have been achievable.
During the July 2015 summer budget new qualifying conditions were announced that became effective from Royal Assent to the Finance (No2) Act 2015 on 18 November 2015. This introduced a maximum age limit for qualifying investments (seven years from first commercial sale, or ten years for 'knowledge intensive' companies), a maximum amount of state aid investment which a qualifying company can receive over its lifetime (£12 million, or £20 million for 'knowledge intensive' companies) and an investee company cannot use the funds it receives from a VCT to purchase existing shares in a company, an existing business or an existing trade from another company. In addition, a VCT can only buy existing shares in a company in limited circumstances. There is a risk that any investment made after 1 January 2015 and before Royal Assent in a company which exceeds the seven year age limit, has received total Risk Finance State Aid in excess of €15 million or has been used to purchase an existing business or trade from another company may result in tax relief being withdrawn. These changes could restrict the pipeline of potential investee companies available to the Company, the structure of those investments and the ability to make follow on investments in certain existing portfolio companies. They may also affect the profile of the Company's new investments. The Company is likely to face greater competition for a smaller number of available investment opportunities going forward as a result of these legislative changes.
Any change in governmental, economic, fiscal, monetary or political policy, in particular current government spending reviews and cuts, could materially affect, directly or indirectly, the operation of the Company and/or the performance of the Company and the portfolio of companies in which it invests and the value of and returns from Shares and/or its ability to maintain VCT status.
The information in this document is based on existing legislation, including taxation legislation. The tax reliefs described are those currently available. The tax rules or their interpretation in relation to an investment in the Company and/or rates of tax may change during the life of the Company and can be retrospective. The value of tax reliefs depends on the personal circumstances of holders of Shares in the Company, who should consult their own tax advisers before making any investment.
The Company intends to manage its affairs in respect of each accounting period so as to obtain and thereafter maintain approval as a VCT. However, there can be no guarantee that the Company will be able to maintain VCT status. Where the Company fails to maintain approval as a VCT before Qualifying Investors have held their New Shares for five years, the income tax relief obtained on the amount subscribed in the Company will have to be repaid by such investors. Dividends paid in an accounting period where VCT status is lost will become taxable and a Qualifying Investor will generally be liable to income tax on the aggregate amount of the dividend.
Where approval as a VCT is not maintained, the Company will also lose its exemption from corporation tax on capital gains. If at any time VCT status is lost, dealings in the Shares of the Company will normally be suspended until such time as the Company has published proposals either to continue as a VCT or to be wound up.
The sale of New Shares by a subscriber within five years of subscription will result in some or all of the 30% income tax relief claimed upon investment becoming repayable. On this basis, investing in New Shares should be considered a long-term investment. Further the disposal of existing Shares within six months either side of the acquisition of New Shares will result in the amount of the investment in New Shares to which VCT tax reliefs are available being reduced by an amount equal to the proceeds received on the disposal.
Prospective investors should be aware that, although the Company currently has no borrowing facilities in place, it may have from time to time a certain level of gearing (as permitted by the borrowing powers in the Articles) and, whilst the use of borrowings would enhance the net asset value of the Shares where the value of the Company's underlying assets is rising, it will have the opposite effect where the underlying asset value is falling.
The use of borrowings also involves the risk that the Company would be unable to service the interest payments or comply with the other requirements of the loan rendering it repayable and the risk that borrowings could not be refinanced upon expiry or that the terms of such refinancing may not be as favourable as the existing terms of borrowing.
Increases in interest rates and levels of amortisation imposed by a lender may also have an adverse effect on the Company's ability to pay dividends to its Shareholders.
The Company has registered itself as a small alternative investment manager with the FCA and is subject to the Alternative Investment Fund Managers Regulations 2013 (SI 2013/1773) and is subject to a reduced level of requirements under those Regulations. If the Company becomes considered leveraged for the purposes of the Regulations, it would become subject to the full requirements under the Regulations, which would have material cost implications for the Company.
The performance of the Company depends on the investment performance of the Investment Manager which in turn is dependent upon the performance and continued availability of certain key personnel. In the event that any one or more of these persons were unavailable either temporarily or permanently, the investment performance of the Company may be adversely affected resulting in capital loss, reduction in dividends and/or reduction in liquidity for Shareholders.
Offer opens 2 February 2016 Closing date (for 2015/2016 tax year) 12.00 noon 1 April 2016 Offer closes (for 2016/2017 tax year) 12.00 noon on 30 June 2016 (unless otherwise extended by the Board) Allotments monthly Effective date for the listing of New Shares three Business Days following allotment and commencement of dealings Share certificates and tax certificates to be dispatched within ten Business Days of allotment
The Board reserves the right to extend the closing date of the Offer to no later than 1 February 2017. The Offer will close earlier than the date stated above if it is fully subscribed or otherwise at the Board's discretion. Allotment of New Shares may be made more frequently than monthly or delayed at the discretion of the Board.
| Investor's minimum investment | £2,000 |
|---|---|
| Maximum amount (before costs) to be raised the Company | £10,000,000 |
| Maximum number of New Shares to be issued | 10,000,000 |
Details on how the number of New Shares and the Offer Price will be calculated, together with details relating to intermediary commission, facilitation of initial adviser charges, are set out in Part II of this document.
If you have any questions relating to this document, and the completion and return of the Application Form and, if relevant, the Tax Residency Self Certification Form, please telephone Capita Asset Services on 0371 664 0324. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9 am – 5.30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Capita Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.
Unicorn AIM VCT plc 2 Barnfield Crescent Exeter EX1 1QT Indicative Offer Timetable Letter from the Chairman
(Registered number 04266437)
2 February 2016
Following the success of the fundraisings launched by the Company in the last few years, we and Unicorn AM believe that there is further appetite for investment in the Company and good opportunities for investment. I am, therefore, pleased to invite Shareholders and new investors to subscribe for New Shares in the Company pursuant to this Offer.
The Company was launched in November 2001 and is a well established VCT. With net assets of £130.98 million (as at 31 December 2015 and unaudited), the Company is the largest AIM-focused VCT in the market. Unlike a new VCT, the Company already has a diverse portfolio of investments in 72 companies with the potential to deliver capital growth and tax-free dividends.
The Company has performed well in recent years despite challenging economic conditions, with resilience and, in many cases, significant growth in revenues and earnings being shown by many portfolio companies. The investment manager, Unicorn AM, has adopted a risk averse, longer term approach to the management of the portfolio, seeking to preserve and then grow capital. This prudent approach has proved successful, with net asset growth being maintained and the Company continuing to pay annual dividends. Despite a turbulent start to 2016 for global equity markets, the Investment Manager remains confident that the investment strategy can deliver further attractive returns over the longer term.
In addition, the Company completed the acquisition of the assets and liabilities of Rensburg AIM VCT plc on 12 January 2016 adding £11.51 million of net assets and 32 investments to the portfolio. This included increasing stakes in a number of companies already held within the portfolio that are progressing well.
With economic conditions improving, the Company has made a number of new investments in promising companies with the objective of further diversifying the portfolio and generating both growth and income. The Investment Manager is continuing to see attractive investment opportunities in companies with good growth and income prospects seeking finance in a broad spectrum of sectors. In order to take advantage of these opportunities, the Board is seeking to raise further funds through the Offer.
The Board believes that the Offer is an attractive investment opportunity for both existing Shareholders and new investors for the following reasons:
The Investment Manager was established in 2000 and is an independently owned and managed company. The Investment Manager specialises in investing in UK small and mid-cap companies, AIM and fledgling markets and has a successful track record in this area of the market.
The Investment Manager operates a team based approach to investment management and its experienced, committed and well-resourced investment team has over 100 years' of combined experience. The Investment Manager is focused on being the 'best not the biggest' and its funds aim to deliver long term outperformance. Unlike many investment firms, the Investment Manager is majority owned by its directors and managers, providing further incentive to help ensure that the funds deliver consistently strong performance.
As at 31 December 2015, the Investment Manager had approximately £1,006 million (the Company being valued at bid-price while it's other funds are valued at mid-price; adjusted for any VCT cross-holdings) under management in a range of funds designed to satisfy a variety of investor requirements. Its funds include an OEIC with 5 sub-funds, an investment trust and the Company.
The Company proposes to raise up to £10 million through the issue of New Shares under the Offer. Details on how the number of New Shares and the Offer Price will be calculated, together with details relating to intermediary commission, facilitation of initial adviser charges, are set out in Part II of this document.
This year, we are again using an Allotment Formula through which the number of New Shares to be issued to an Applicant will be calculated, which takes into account the costs incurred by investors, whether execution only intermediary commission or initial adviser charges apply or whether an investor is applying direct. The Allotment Formula continues to be based on the most recently published NAV per Share at the time of allotment. The Company publishes monthly unaudited NAVs and may publish NAVs more frequently for the purposes of the Offer.
The Offer opens on 2 February 2016 and closes on 30 June 2016 (unless fully subscribed before this date or otherwise at the Board's discretion), and allows investors to subscribe for both the 2015/2016 and 2016/2017 tax years.
The closing date (unless fully subscribed earlier or the Offer being closed otherwise at the discretion of the Board) for applications for the 2015/2016 tax year is 12.00 noon on 1 April 2016 and for the 2016/2017 tax year is 12.00 noon on 30 June 2016.
The Company provides Qualifying Investors with access to the attractive tax benefits associated with an investment in a VCT. Qualifying Investors will receive up to 30% income tax relief on amounts subscribed (subject to (i) a maximum investment in VCTs of £200,000 in a tax year, (ii) an investor's tax liability being reduced to nil and (iii) provided the New Shares are held for at least five years). Distributions for Qualifying Investors will also be tax-free and capital gains exempt (subject to the annual investment limits).
Potential investors should note that the disposal of existing Shares within six months either side of the acquisition of New Shares will result in the amount of the investment in New Shares to which VCT tax reliefs are available being reduced by an amount equal to the proceeds received on the disposal.
If you wish to invest, please read the full Prospectus and then complete the Application Form and, if you are not already a shareholder in the Company, a Tax Residency Self Certification Form at the end of this document.
If you have any questions regarding the Offer you should contact your financial adviser or call Unicorn AM on 020 7253 0889 or LGBR Capital (the distributor for the Offer) on 020 3195 7100. Please note that neither Unicorn AM nor LGBR Capital are able to provide you with investment, financial or tax advice. Your attention is also drawn to the Risk Factors on pages 10 and 11 of this document.
We look forward to welcoming you as a Shareholder.
Peter Dicks Chairman
The Company is an established VCT which currently meets the qualification requirements set out by HMRC. Unlike a new VCT, the Company has a strong track record of delivering both capital growth and regular tax-free dividend income from an established portfolio of existing investments. The Company's strategy is to invest primarily in businesses which have a demonstrable record of profitability and positive cash generation.
Shareholders should be aware that as a result of the new qualifying conditions which became effective from Royal Assent to the Finance (No2) Act 2015 on 18 November 2015, new capital raised by the Company under the current Offer and under future offers of investment may be directed towards earlier stage investment which may or may not be profitable at the point of investment.
The Company's assets are currently invested in a VCT qualifying diversified portfolio of investments both by sector and by number of investments held. The portfolio allocation, based on valuations as at 31 December 2015, are shown below.
The existing portfolio is, by VCT Value (which is calculated on a different basis to the accounting value), comfortably above the threshold required to retain VCT qualifying status (over 70% as at 31 December 2015). The Investment Manager's team will continue to maintain a highly selective approach to new investment opportunities. With an established and diversified portfolio and a flexible structure, the Company now displays many of the characteristics of a smaller companies investment trust.
The Board believes that:
In March 2010 the Company merged with Unicorn AIM VCT II plc to create what is now the largest AIM-focused VCT in the market. In addition, the Company also recently completed the acquisition of the assets and liabilities of Rensburg AIM VCT plc on 12 January 2016 adding £11.51 million of net assets and 32 investments to the portfolio.
The performance of the Company since 2010 has been strong, with the NAV per Share having increased from 104.2p as at 30 September 2010 to 155.6p as at 30 September 2015. In addition, the Company has paid, in aggregate, 26p per Share of dividends in respect of the last five financial years as shown in the graph overleaf.
* The past performance of the Company is not a guide to the future performance of the Company. The above represents the return on shares from 30 September 2010. Shares in issue before this date or issued after this date may have different performance statistics.
The Company's earnings per Share for the year ended 30 September 2015, together with those of the previous five financial years, are outlined in the graph below:
* Total earnings including unrealised gains/(losses) on investments after taxation divided by the weighted average number of Shares in issue. The past performance of the Company is not a guide to the future performance of the Company.
The Company is seeking to raise up to £10 million through the issue of up to 10 million New Shares pursuant to the Offer.
There is no minimum subscription level for the Offer to proceed and the Offer is not underwritten.
The minimum investment by an investor under the Offer is £2,000 (net of any amount of initial adviser charge to be facilitated) and multiples of £500 thereafter (though investors are reminded that VCT upfront income tax relief is only available in respect of investments of up to £200,000 in VCTs in any one tax year).
New Shares will rank pari passu with the existing Shares in issue in respect of dividends with record dates after the date of issue of the relevant New Shares.
Applications under the Offer will normally be accepted on a first come, first served basis (provided cheques are not post-dated), subject always to the discretion of the Board. Subscribers are encouraged to submit their Application Form early in order to be confident that their application will be successful.
The Offer will be suspended if at any time the Company is prohibited by statute or other regulations from issuing New Shares or has insufficient Shareholder authority to allot Shares.
The full terms and conditions of the Offer can be found at the end of this document.
The Offer opens on 2 February 2016 and will close (unless fully subscribed or otherwise at the discretion of the Board) on 30 June 2016 (unless extended by the Board to no later than 1 February 2017).
Subject to the Offer not being closed earlier, applications for the 2015/2016 and 2016/2017 tax year should be received by:
The number of New Shares to be allotted to a successful Applicant will be determined by the following Allotment Formula:
Number of New Shares =
$$
\frac{A - B - C}{NAV}
$$
Where:
NAV is the most recently published NAV per Share at the time of allotment, adjusted for dividends subsequently declared.
The number of New Shares to be allotted by the Company will be rounded down to the nearest whole number and fractions of New Shares will not be allotted.
The Allotment Formula, which is based on the latest published NAV and takes account of the costs of the Offer, avoids a diminution in the net asset value of the existing Shares (ignoring the dilution caused by any trail commission paid by the Company, which is considered to be small when compared to the Company's total funds). Potential investors should note that the NAV per Share may rise or fall during the Offer period.
The Offer Price is determined by dividing the Investment Amount (this being the amount of the investor's application accepted to be used to subscribe for New Shares (ie the Application Amount, less any amount of any initial adviser charge agreed to be facilitated in respect of an advised investor)) by the number of New Shares to be issued.
The Company will announce the number of New Shares issued and the range of Offer Prices by way of a Regulatory Information Service announcement following each allotment.
Qualifying Investors will be able to benefit from the tax reliefs applicable in respect of subscriptions for VCT Shares in respect of the Investment Amount (ie the Application Amount, less any amount of any initial adviser charge agreed to be facilitated in respect of an advised investor). This includes up to 30% income tax relief on the Investment Amount, which would not be available if Shares were purchased in the secondary market.
The Investment Manager, as promoter of the Offer will be paid a fee equal to 2.5% of the Application Amounts in respect of applications accepted under the Offer, plus an amount equal to any execution only initial intermediary commissions. In consideration, the Investment Manager has agreed to meet all Offer costs payable by the Company (other than annual trail commission), including any initial execution only intermediary commissions and fees payable in respect of LGBR Capital. Annual trail commission will be payable by the Company. Any amount of initial adviser charge agreed to be facilitated is paid by the investor from the monies received with the investor's application and is not paid by the Company.
The Investment Manager may agree to waive any part of its fee represented by 2.5% of the Application Amounts in respect of applications accepted under the Offer as referred to above (this being (B) in the Allotment Formula) in respect of any part of this element of its fee in respect of any specific or group of investors for the benefit of such investors. The benefit of any waiver will be applied by reducing (B) in the Allotment Formula by an equivalent amount, which will reduce the costs applied for those investors, thereby increasing the number of New Shares to be allotted to such investors. The Investment Manager has further agreed that, to the extent that the actual costs of the Offer are less than the amount of the promotion fee payable to it, the Investment Manager will rebate the excess amount to the Company.
Assuming that the Offer is fully subscribed, the Offer costs payable by the Company will be a maximum of £550,000 (excluding annual trail commission and assuming that the maximum amount of initial commission of 3% is payable to execution only intermediaries in respect of all investors) and the net proceeds, on the same basis, will amount to at least £9,450,000.
Investors who receive advice from their financial advisers can request for an initial adviser charge (in whole or part) to be facilitated by the Company's receiving agent (subject to a maximum facilitation amount equal to 3% of the Application Amount).
If facilitated, this agreed amount will be deducted from the monies received from the relevant investor and the net amount invested. The Allotment Formula continues to take the facilitated amount into account in determining the number of New Shares to be allotted. Any additional initial adviser charges in excess of the amount agreed to be facilitated, as well as any annual adviser charges, will need to be met by advised investors separately.
It should be noted that the maximum amount of initial charges which may be facilitated as outlined above should not be considered as a recommendation as to the appropriate levels of an initial adviser charge. This is for the investor and the financial adviser to agree depending on the advice and service being provided.
The Investment Manager may (on behalf of the Company) agree with intermediaries providing 'execution-only' services that, in respect of any application accepted from a client for whom the execution only intermediary acts, to pay an initial commission (subject to a maximum of 3% of the amount subscribed for New Shares by their clients). Intermediaries may waive all or part of the initial commission due for the benefit of their client (such amount will be taken into account in determining the number of New Shares to be allotted under the Allotment Formula).
In addition, provided that the 'execution-only' intermediaries' clients continue to hold their New Shares, such intermediaries will normally be paid an annual trail commission of 0.375% of the net asset base value for each such New Share by the Company. For this purpose, 'net asset base value' means the net assets attributable to such New Share as determined from the audited annual accounts of the Company as at the end of the preceding financial year. No payment of trail commission will (save as referred to below) be made to the extent that the cumulative trail commission would exceed 2.25% of the Offer Price of the New Share in question. The Investment Manager may, with the consent of the Board, agree to pay trail commission on a different basis, providing it does not exceed the maximum cumulative payment of 2.25% of the offer price of the New Share in question.
Commissions will only be paid if, and to the extent, they are permitted under legislation and regulations. Annual trail commission will be paid shortly after the later of the annual general meeting of the Company and, where applicable, the date of payment of the final dividend in each year.
Should an execution only investor subsequently decide to seek financial advice from their 'execution-only' intermediary in respect of their holding in the Company, any annual trail commission in respect of an investment under the Offer should cease and either the Company, the Investment Manager or ISCA Administration Services must be notified accordingly.
Should an Existing Shareholder decide to seek financial advice from their existing intermediary in respect of participating in the Offer, any trail commission which is currently being paid to that Shareholder's intermediary pursuant to an existing holding in the Company will need to cease and one of the Company, the Investment Manager or ISCA Administration Services must be notified accordingly.
Below is an example of how the Allotment Formula works for a direct investor, an advised investor where the amount to be facilitated is 3% of the Application Amount and for an execution only investor where an initial commission of 3% of the Application Amount has been agreed (in one case payable to the intermediary, but in the other waived by the intermediary), in each case where the amount remitted to the Company with the investor's application is £10,000, the investor is an Existing Shareholder and based on an NAV per Share of 163.76p (as at 31 December 2015, this being the most recently published NAV per Share prior to the publication of this document).
| Application | Offer Costs | Adviser & Intermediary Charges (C) |
||||
|---|---|---|---|---|---|---|
| Amount (A) (£) |
(B) (2.5%) (£) |
Facilitation Amount (£) |
Commission Amount (£) |
NAV per Share (£) |
Number of New Shares |
|
| Advised investor | 10,000 | (250) | (300) | - | 1.6376 | 5,770 |
| Execution only investor (initial commission payable) |
10,000 | (250) | - | (300) | 1.6376 | 5,770 |
| Execution only investor (initial commission waived) |
10,000 | (250) | - | - | 1.6376 | 5,953 |
| Direct investor | 10,000 | (250) | - | - | 1.6376 | 5,953 |
The net proceeds of the Offer will be pooled with the existing cash resources of the Company and utilised as follows:
The Board comprises four non-executive directors, all of whom are independent of the Investment Manager: Peter Dicks (Chairman), James Grossman, Jeremy Hamer and Jocelin Harris.
The Board sets the Company's policies and objectives and ensures that its obligations to the Shareholders are met. The Company has appointed Unicorn AM as its investment manager and ISCA Administration Services as Company Secretary and administrator, subject to the overall control and direction of the Board. As a result, the Board has overall responsibility for the Company's affairs, including approving valuations (prepared by the Investment Manager) and NAVs (calculated by ISCA Administration Services). The Board has significant relevant experience of similar investment funds, regulatory organisations, corporate governance of listed companies, the private equity industry and investing in small companies.
Peter Dicks was a founder director of Abingworth plc, a successful venture capital company. He is currently a director of a number of quoted and unquoted companies, including Graphite Enterprise Trust plc, Mears Group plc, Interactive Investor plc and Private Equity Investor plc, where he is a chairman. In addition, he is a director of Foresight VCT plc, Foresight 3 VCT plc and Foresight 4 VCT plc.
James Grossman is an international business lawyer and arbitrator with over 35 years' experience in mergers and acquisitions and venture capital transactions. He is a director of Applaud Inc, a medical device company based in San Francisco, Mendocina Brewery Co Inc, a publicly traded brewery company based in Northern Columbia and JHG Solar Limited, a tax advantaged solar company based in the UK. James Grossman has informed the Board that he intends to retire as a Director of the Company at the Company's annual general meeting in 2017.
Jeremy Hamer is a chartered accountant who spent 16 years in industry before spending five years as a VCT investment manager. Currently, he is chairman of SnackTime plc and also has a portfolio of non-executive director roles particularly with AIM listed companies, such as Avingtrans plc and SQS Software Quality Systems AG. He is also a qualified executive coach.
Jocelin Harris is a qualified solicitor and runs Durrington Corporation Limited, where he has worked since 1986. Durrington provides management and financial support services to small and developing businesses. He was previously a director of private bank Rea Brothers in the City. He is a non-executive director of Foresight VCT plc and also a non-executive chairman or director of a number of private companies in the UK and US.
The Investment Manager is an independently owned and managed investment management company. The Investment Manager was incorporated and registered in England and Wales on 4 February 2000 as a private limited liability company with registered number 03919499. The Investment Manager's registered office and principal place of business is at First Floor Office, Preacher's Court, The Charterhouse, Charterhouse Square, London EC1M 6AU (telephone 020 7253 0889). The Investment Manager is authorised and regulated by the FCA to provide investment management services with registered number 192164. The principal legislation under which the Investment Manager operates is the CA 2006 (and regulations made thereunder).
The Investment Manager operates a team based approach to investment management and its experienced, committed and well-resourced investment team has over 100 years' of combined experience. The Investment Manager is focused on being the 'best not the biggest' and its funds aim to deliver long term outperformance. Unlike many investment firms, the Investment Manager is majority owned by its directors and managers, providing further incentive for the funds to deliver consistently strong performance.
Members of the team follow a traditional and conservative approach to fund management, focusing on bottom-up stock selection based on fundamental research. They aim to deliver superior long term performance by adhering to a disciplined investment process and to reduce risk by focusing investment resource on those businesses which are led by experienced management teams, which have an established history of profitability and cash generation and which are capable of delivering sustained growth.
As at 31 December 2015, the Investment Manager's funds under management are allocated across three fund classes:
* adjusted for investments made by the Company in Unicorn AM managed OEICs.
The Company remains an integral part of the Investment Manager's business, with a significant number of VCT qualifying investments managed for the Company, on behalf of the Shareholders.
Chris Hutchinson is the senior investment manager at Unicorn AM and has been the lead manager of the Company, since joining the firm in 2005. Chris is also the lead manager of the Unicorn Outstanding British Companies Fund and a senior member of Unicorn AM's Investment Committee. Chris has approximately 18 years' experience managing portfolios of UK smaller companies.
Paul Harwood is the chairman of Unicorn AM's Investment Committee and has over 40 years' investment experience. Before joining Unicorn AM, Paul held positions at Phillips & Drew, Richards Longstaff and Mercury Asset Management/Merrill Lynch, where he was a director, the joint head of the European Equity Investment Team and latterly the head of the UK Smaller Companies Team.
Fraser Mackersie is the co-manager of the Unicorn UK Income Fund and the lead manager of the Unicorn UK Growth Fund. Fraser qualified as a Chartered Certified Accountant (ACCA) in October 2006 having graduated with a BSc (Hons) in Economics and Management from the University of St. Andrews in 2003. He then spent two years with F&C Asset Management plc before joining Unicorn AM in 2008.
Simon Moon is the co-manager of the Unicorn UK Income Fund and the lead manager of the Unicorn UK Smaller Companies Fund. Having completed the NHS graduate training scheme, Simon joined JM Finn & Co (Stockbrokers), where he spent a year working as a researcher before joining Unicorn AM in 2008. Simon is a member of The Chartered Institute for Securities & Investment (CISI).
Alex Game joined Unicorn AM in 2014 and provides research and fund management support to the Unicorn AM investment team. Prior to joining Unicorn AM, Alex worked for two years as a client advisor at Stanhope Capital. Alex graduated with a BSc (Hons) in Physics from Durham University in 2010.
Max Ormiston joined Unicorn AM in 2014 and provides research and fund management support to the Unicorn AM investment team. Prior to joining Unicorn AM, Max spent four years with Brewin Dolphin, where he worked as an investment manager. Max graduated with First Class (Hons) in Agribusiness Management from Newcastle University in 2009 and is a CFA Charterholder.
The Company's objective is to provide Shareholders with an attractive return from a diversified portfolio of investments, predominantly in the shares of AIM quoted companies, by maintaining a steady flow of dividend distributions to Shareholders from the income and capital gains generated by the portfolio.
It is also the objective that the Company should continue to qualify as a venture capital trust, so that Shareholders benefit from the taxation advantages that this brings. To achieve this at least 70% of the Company's total assets by VCT Value are to be invested in qualifying investments of which 30% by VCT Value (70% for funds raised after 6 April 2011) must be in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules).
In order to achieve the Company's investment objective, the Board has agreed an investment policy which requires the Investment Manager to identify and invest in a diversified portfolio, predominantly of VCT qualifying companies quoted on AIM that display a majority of the following characteristics:
Asset allocation and risk diversification policies, including maximum exposures, are to an extent governed by prevailing VCT legislation. No single holding may represent more than 15% (by VCT value) of the Company's total investments and cash, at the date of investment.
There are a number of VCT conditions which need to be met by the Company which may change from time to time. The Investment Manager will seek to make qualifying investments in accordance with such requirements.
Where capital is available for investment while awaiting suitable VCT qualifying opportunities, or is in excess of the 70% VCT qualification threshold, it may be held in cash or invested in money market funds, collective investment vehicles or non-qualifying shares and securities of quoted and unquoted companies registered in the UK.
To date the Company has operated without recourse to borrowing. The Board may however consider the possibility of introducing modest levels of gearing up to a maximum of 10% of the adjusted capital and reserves, should circumstances suggest that such action is in the interests of Shareholders.
The Investment Manager receives an annual management fee of an amount equal to 2.0% of the net asset value of the Company (together with any applicable VAT) calculated and charged quarterly, save for investments made by the Company in other Unicorn AM managed funds, in which case no additional management fee will be payable in respect of such investments.
A maximum of 75% of the Company's management expenses is currently charged against capital, with the balance to be met from income.
The Investment Manager is also entitled to receive performance incentive fees of 20% of dividends paid to Shareholders over and above the Target Return in any accounting period. The Target Return for these purposes is 6p per Share (or, if the relevant accounting period is less than or greater than 12 months, an amount equal to a pro rata reduction or increase to that amount for that accounting period). Any cumulative shortfalls below the 6p per annum dividend hurdle after the financial period ended on 30 September 2010 has to be made up in later years before any incentive fee is payable in the relevant year. Such payment will be subject to maintaining NAV at 125p per Share. Although the arrangement allows for the performance incentive calculation to be adjusted in such manner as the auditors confirm in writing where the Company issues further Shares, it has been agreed that no adjustment will be made as a result of the Offer.
As at 31 December 2015, the unaudited NAV per Share was 163.76p and the dividend shortfall to be made up was 4p. The Investment Manager has not received a performance incentive fee since the above arrangements were put in place.
ISCA Administration Services (appointed on 1 September 2014) provides administration services and is the appointed Company Secretary, and is entitled to an annual fee of £126,000 plus VAT. ISCA Administration Services offers specialist accounting, fund administration and company secretarial services to closed end structures such as investment trusts, venture capital trusts and other types of specialist funds. Its senior staff have over thirty years' experience in the industry.
The annual expenses of the Company are approximately 2.2% of the net assets of the Company but are, in any event, capped at an amount equal to 3.6% of net assets. Any excess over this amount will be borne by the Investment Manager. Annual expenses include expenses incurred by the Company in the ordinary course of its business (including management and administration fees, Directors' remuneration, fees payable to the registrar, stockbroker, auditor, solicitors and the VCT status adviser). Annual expenses include costs incurred in the ordinary course of business, but do not include performance incentive fees (in the event of any becoming payable) and trail commission.
PricewaterhouseCoopers LLP is the Company's VCT status adviser. It carries out reviews of the Company's investment portfolio to ensure compliance and, when requested to do so by the Board or the Investment Manager, reviews prospective investments to ensure that they are qualifying investments.
Bank of New York Mellon (being incorporated and registered in the United States, but whose UK establishment has its registered office at One Canada Square, London E14 5AL with registered number FC005522, its telephone number being 020 7570 1784 and being authorised and regulated by the FCA) acts as custodian of the Company's quoted assets and, in that capacity, is responsible for ensuring safe custody and dealing and settlement arrangements. The Company is responsible for the safekeeping of certificates in relation to unquoted investments.
The Board has a policy of maintaining a steady flow of dividend distributions to Shareholders and intends to continue with this policy. The Company has paid dividends (tax free to Qualifying Shareholders) of 5p, 6p and 6p per Share in each of the past three financial years and has recommended a dividend of 6.25p which, subject to shareholder consent, will be paid on 19 February 2016 to Shareholders on the register on 29 January 2016.
The ability to pay dividends and the amount of such dividends depends on the performance of the Company's investments, available reserves and cash, as well as the need to retain funds for further investment and ongoing expenses.
The Board believes that it is in the best interests of the Company and its Shareholders to make market purchases of its Shares, given the limited secondary market for VCT shares generally, and to seek both to enhance NAV and to help reduce to a degree any prevailing discount to NAV in the current market price that might otherwise prevail. The Board agrees the discount to NAV at which Shares will be bought back and keeps this under regular review.
The Board intends to continue with the above buy-back policy. Any such future repurchases will be made in accordance with guidelines established by the Board from time to time and will be subject to the Company having the appropriate authorities from Shareholders and sufficient funds available for this purpose.
Share buy-backs will also be subject to the Listing Rules and any applicable law at the relevant time. Shares bought back in the market will ordinarily be cancelled.
The Articles provide for a resolution to be proposed for the continuation of the Company as a VCT at the annual general meeting falling after the fifth anniversary of the last issue of Shares and thereafter at five-yearly intervals.
All unquoted investment valuations are subject to approval by the Directors on the recommendation of the Investment Manager in accordance with IPEVC Valuation Guidelines under which investments are valued at fair value, as defined in those guidelines. Any AIM or other quoted investment will be valued at the closing bid price of its shares, in accordance with generally accepted accounting practice. The net asset value of the Shares is calculated monthly and published on an appropriate regulatory information service, as well as being published on the Company's website (www.unicornaimvct.co.uk). If for any reason valuations are suspended, relevant shareholders will be notified in a similar manner.
The Board believes that open communication with Shareholders is very important and is always ready to consider suggestions or matters of concern raised by Shareholders outside formal shareholder meetings. In addition to the announcement and publication of the annual report and accounts and the half-yearly results for the Company as detailed below, the Company also voluntarily publishes interim management statements.
| Year end | 30 September |
|---|---|
| Announcement and publication of annual report and accounts to Shareholders | December |
| Announcement and publication of half-yearly results | May |
Set out below are the largest investments held by the Company (all of which are based in the UK) with a value of greater than 5% of its gross assets and an aggregate value greater than 50% of the Company's gross assets, as at the date of this document.
The current cost is the original investment cost made by both the Company and Unicorn AIM VCT II plc, less capital repayments to 31 December 2015.
| Abcam plc Cost (£'000) Valuation (£'000) Valuation basis % of portfolio Market sector: Pharmaceuticals and biotechnology Location: Cambridge, England |
597 11,825 Bid price 9.0 |
Interactive Investor plc Cost (£'000) Valuation (£'000) Valuation basis % of portfolio Market sector: Financial Services Location: London, England |
3,447 3,797 Bid price 2.9 |
|---|---|---|---|
| Tracsis plc Cost (£'000) Valuation (£'000) Valuation basis % of portfolio Market sector: Software and computer services Location: Derby, England |
768 8,926 Bid price 6.8 |
NCC Group plc Cost (£'000) Valuation (£'000) Valuation basis % of portfolio Market sector: Software and computer services Location: Manchester, England |
400 2,802 Bid price 2.1 |
| Anpario plc Cost (£'000) Valuation (£'000) Valuation basis % of portfolio |
1,585 7,143 Bid price 5.4 |
Animalcare Group plc Cost (£'000) Valuation (£'000) Valuation basis % of portfolio |
689 2,776 Bid price 2.1 |
| Market sector: Pharmaceuticals and biotechnology | Market sector: Pharmaceuticals and biotechnology | ||
| Location: Nottinghamshire, England | Location: York, England | ||
| Mattioli Woods plc Cost (£'000) Valuation (£'000) Valuation basis % of portfolio Market sector: Financial Services Location: Leicestershire, England |
1,680 6,453 Bid price 4.9 |
Stride Gaming Cost (£'000) Valuation (£'000) Valuation basis % of portfolio Market sector: Travel and leisure Location: Jersey |
1.400 2.652 Bid price 2.0 |
| Crawshaw Group plc Cost (£'000) Valuation (£'000) Valuation basis % of portfolio Market sector: Food and drug retailers |
2,000 5,967 Bid price 4.6 |
IDOX plc Cost (£'000) Valuation (£'000) Valuation basis % of portfolio Market sector: Software and computer services |
375 2,550 Bid price 1.9 |
| Location: South Yorkshire, England | Location: Reading, England | ||
| Cohort plc Cost (£'000) Valuation (£'000) Valuation basis % of portfolio |
1,414 4,955 Bid price 3.8 |
ULS Technology plc Cost (£'000) Valuation (£'000) Valuation basis % of portfolio |
1,500 2,325 Bid price 1.8 |
| Market sector: Aerospace and defence | Market sector: Aerospace and defence | ||
| Location: Reading, England | Location: Reading, England |
| Tristel plc | |
|---|---|
| Cost (£'000) | 887 |
| Valuation (£'000) | 2,273 |
| Valuation basis | Bid price |
| % of portfolio | 1.7 |
| Market sector: Aerospace and defence | |
| Location: Reading, England |
| Cash | |
|---|---|
| Cost (£'000) | 2,347 |
| Valuation (£'000) | 2,347 |
| Valuation basis | -- |
| % of portfolio | 1.8 |
| Unicorn UK Smaller Companies Fund | |
|---|---|
| Cost (£'000) | 839 |
| Valuation (£'000) | 2,140 |
| Valuation basis | Bid price |
| % of portfolio | 1.6 |
| Unicorn Mastertrust Fund | |
|---|---|
| Cost (£'000) | 1,031 |
| Valuation (£'000) | 2,191 |
| Valuation basis | Bid price |
| % of portfolio | 1.7 |
| Unicorn UK Growth Fund | |
|---|---|
| Cost (£'000) | 828 |
| Valuation (£'000) | 2,093 |
| Valuation basis | Bid price |
| % of portfolio | 1.6 |
| Unicorn Outstanding British Companies Fund | |
|---|---|
| Cost (£'000) | 2,033 |
| Valuation (£'000) | 2,187 |
| Valuation basis | Bid price |
| % of portfolio | 1.6 |
Investment and portfolio information in this Part VI has been extracted from the Company's unaudited management accounts as at 31 December 2015. As at the date of this document, there has been no material change in the valuations of investments set out in this Part VI since 31 December 2015, other than as set out below.
In connection with the acquisition of the assets and liabilities of Rensburg AIM VCT plc, the Company acquired on 12 January 2016:
• a further holding in Tracsis at a value of £816,000 (original Rensburg AIM VCT plc cost of £72,009);
• a further holding in Animalcare Group at a value of £961,130 (original Rensburg AIM VCT plc cost of £247,108);
• a further holding in IDOX at a value of £741,520 (original Rensburg AIM VCT plc cost of £106,962);
The Company disposed of its investment in Unicorn Outstanding British Companies Fund for of £2.05m on 26 January 2016 which is now held in cash.
The following is only a summary of the law concerning the tax position of individual investors in VCTs and does not constitute legal or tax advice. Potential investors are recommended to consult a professional adviser as to the taxation consequences of an investment in a VCT.
The tax reliefs set out below are those currently available to individuals who are UK tax payers and aged 18 or over who subscribe for New Shares under the Offer and will be dependent on personal circumstance. Whilst there is no specific limit on the amount of an individual's acquisition of shares in a VCT, tax reliefs will only be given to the extent that the total of an individual's subscriptions or other acquisitions of shares in VCTs in any tax year do not exceed £200,000 (including shares purchased in the secondary market). Qualifying Investors who intend to invest more than £200,000 in VCTs in any one tax year should consult their professional advisers.
A Qualifying Investor subscribing for New Shares will be entitled to claim income tax relief on amounts subscribed up to a maximum of £200,000 invested in VCTs in any tax year.
The relief is given at the rate of 30% on the amount subscribed regardless of whether the Qualifying Investor is a higher rate, additional rate or basic rate tax payer, provided that the relief is limited to the amount which reduces the Qualifying Investor's income tax liability to nil. Investments to be used as security for or financed by loans may not qualify for relief, depending on the circumstances.
A Qualifying Investor, who acquires shares in VCTs in any tax year costing up to a maximum of £200,000, will not be liable to income tax on dividends paid on those shares and there is no withholding tax thereon.
A Qualifying Investor who purchases existing shares in the market will be entitled to claim dividend relief (as described in paragraph 1.1(ii) above) but not relief from income tax on the investment (as described in paragraph 1.1(i) above).
Relief from income tax on a subscription for VCT shares will be withdrawn if the VCT shares are disposed of (other than between spouses or on death) within five years of issue or if the VCT loses its approval within this period, as detailed below.
Dividend relief ceases to be available if the VCT loses its approval within this period, as detailed below, or if shares are no longer owned by a Qualifying Investor.
A disposal by a Qualifying Investor of VCT shares will give rise to neither a chargeable gain nor an allowable loss for the purposes of UK capital gains tax. The relief is limited to the disposal of VCT shares acquired within the limit of £200,000 for any tax year and does not apply where VCT shares were issued after 5 April 2014 and are repurchased by the VCT directly from the shareholder within three years of issue.
An individual purchaser of existing VCT shares in the market will be entitled to claim relief from capital gains tax on disposal (as described in paragraph 1.2(i) above).
The disposal of existing shares in a VCT within six months before or after subscription for new shares in the same VCT (or otherwise where the disposal and subscription is linked) will result in the amount of the investment in the new shares in the VCT to which VCT tax reliefs are available being reduced by an amount equal to the proceeds received on the disposal.
For a company to be fully approved as a VCT, it must meet the various requirements as set out below.
If a company which has been granted approval as a VCT subsequently fails to comply with the conditions for approval, approval as a VCT may be withdrawn. In these circumstances, relief from income tax on the initial investment is repayable unless loss of approval occurs more than five years after the issue of the relevant VCT shares. In addition, relief ceases to be available on any dividend paid in respect of profits or gains in any accounting period ending when VCT status has been lost and any gains on the VCT shares up to the date from which loss of VCT status is treated as taking effect will be exempt, but gains thereafter will be taxable.
The table below has been prepared for illustrative purposes only and does not form part of the summary of the tax reliefs contained in this section. The table shows how the initial tax reliefs available can reduce the effective cost of an investment of £10,000 in a VCT by a Qualifying Investor subscribing for VCT shares to only £7,000:
| Tax relief | Effective cost | |
|---|---|---|
| Investor unable to claim any tax reliefs | Nil | £10,000 |
| Qualifying Investor able to claim full 30% income tax relief | £3,000 | £7,000 |
The combined effect of the initial income tax relief, tax free dividends and tax-free capital growth can substantially improve the net returns of an investor in a VCT.
The Company will provide to each Qualifying Investor a certificate which Qualifying Investors may use to claim income tax relief, either by obtaining from HMRC an adjustment to their tax coding under the PAYE system or by waiting until the end of the tax year and using their tax return to claim relief.
Investors not resident in the UK should seek their own professional advice as to the consequences of making an investment in a VCT as they may be subject to tax in other jurisdictions as well as in the UK.
To qualify as a VCT, a company must be approved as such by HMRC. To obtain such approval it must:
Conditions (i) to (j) do not apply to investments in shares listed on a recognised stock exchange or to certain investment funds/vehicles.
The approved status of a VCT may also be affected where an investee company uses any VCT investment to acquire another company or trade in the five years after that investment.
The term 'eligible shares' means ordinary shares which do not carry any rights to be redeemed or preferential rights to assets on a winding up or dividends (other than certain non-cumulative fixed preferential rights).
A qualifying investment consists of shares or securities first issued to the VCT (and held by it ever since) by a company satisfying the conditions set out in Chapters 3 and 4 of Part 6 of ITA 2007.
The conditions are detailed, but include the following:
In certain circumstances, an investment in a company by a VCT can be split into a part which is a qualifying holding and a part which is a non-qualifying holding.
From 6 April 2012 there is a 'disqualifying purpose' test under which an investment will not be a qualifying investment if the investee company has been set up for the purpose of accessing tax reliefs or is in substance a financing business.
A Qualifying Company must be unquoted (for VCT purposes companies whose shares are traded on the ISDX and AIM markets are considered to be unquoted) and must carry on a qualifying trade. For this purpose certain activities are excluded (such as dealing in land or shares or providing financial services). The qualifying trade must either be carried on by, or be intended to be carried on by, the Qualifying Company or by a qualifying subsidiary at the time of the issue of shares or securities to the VCT (and at all times thereafter).
The company must have a permanent establishment in the UK, but the company need not be UK resident. A company intending to carry on a qualifying trade must begin to trade within two years of the issue of shares or securities to the VCT and continue it thereafter.
A Qualifying Company may have no subsidiaries other than qualifying subsidiaries which must, in most cases, be at least 51% owned.
A VCT must be approved at all times by HMRC. Approval has effect from the time specified in the approval.
A VCT cannot be approved unless the tests detailed above are met throughout the most recent complete accounting period of the VCT and HMRC is satisfied that they will be met in relation to the accounting period of the VCT which is current when the application is made. However, where a VCT raises further funds, VCTs are given grace periods to invest those funds before such further funds become subject to the tests.
However, to aid the launch of a VCT, HMRC may give provisional approval if satisfied that conditions (b), (c), (f) and (g) in paragraph 1 above will be met throughout the current or subsequent accounting period and condition (d) in paragraph 1 above will be met in relation to an accounting period commencing no later than three years after the date of provisional approval.
The Company has obtained approval as a VCT from HMRC.
Approval of a VCT (full or provisional) may be withdrawn by HMRC if the various tests set out above are not satisfied. The exemption from corporation tax on capital gains will not apply to any gain realised after the point at which VCT status is lost.
Withdrawal of approval generally has effect from the time when notice is given to the VCT but, in relation to capital gains of the VCT only, can be backdated to not earlier than the first day of the accounting period commencing immediately after the last accounting period of the VCT in which all of the tests were satisfied.
Withdrawal of provisional approval has effect as if provisional approval had never been given (including the requirement to pay corporation tax on prior gains).
Investments made by VCTs in underlying portfolio companies are regarded as state aid. Where the European Commission believes that state aid has been provided which is unlawful, in particular if it is not consistent with the Risk Finance Guidelines, it may require the Government to recover that state aid. Such recovery may be from the investee company, the VCT or the VCT's investors.
The Government has announced that it intends to seek state aid approval for VCTs to be able to participate in investments which include an element of replacement capital. If approved, the Government will implement changes to the existing legislation through secondary legislation.
The above is only a summary of the conditions to be satisfied for a company to be treated as a VCT.
2.3.1 in substitution for any existing authorities, the Directors were generally and unconditionally authorised pursuant to section 551 of the CA 2006 to exercise all the powers of the Company to allot Shares and to grant rights to subscribe for, or convert any security into, Shares up to an aggregate nominal amount of £339,930, provided that this authority shall expire (unless renewed, varied or revoked by the Company in a general meeting) on the date falling 15 months after the passing of this resolution, or if earlier, at the conclusion of the annual general meeting of the Company to be held in 2016 but so that the authority shall allow the Company to make before the expiry of this authority, offers or agreements which would or might require Shares to be allotted or rights to be granted after such expiry and the Directors shall be entitled to allot Shares or grant rights pursuant to any such offers or agreements as if the authority conferred by this resolution had not expired;
2.3.2 in substitution for any existing authorities, the Directors were empowered in accordance with sections 570 and 573 of the CA 2006 to allot or make offers or agreements to allot equity securities (as defined in section 560 of the CA 2006) for cash, pursuant to the authority conferred upon them by the resolution detailed at paragraph 2.3.1 above, or by way of a sale of treasury shares, as if section 561(1) of the CA 2006 did not apply to any such sale or allotment, provided that the power provided by this resolution shall be limited to: 1. The Company
in each case where the proceeds may be used, in whole or in part, to purchase the Company's Shares in the market provided that this authority shall expire (unless renewed, varied or revoked by the Company in a general meeting) on the date falling 15 months after the passing of this resolution, or if earlier, at conclusion of the annual general meeting to be held in 2016, except that the Company may, before expiry of this authority, make offers or agreements which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of such offer or agreement as if the authority conferred had not expired; and
(ii) the allotment, otherwise than pursuant to sub-paragraph (i) above, of equity securities with an aggregate nominal value of up to, but not exceeding, 10% of the issued share capital of the Company from time to time
in each case where the proceeds may be used, in whole or in part, to purchase the Company's shares in the market and provided further that this authority shall expire (unless renewed, varied or revoked by the Company in a general meeting), on the date falling 15 months after the passing of this resolution, except that the Company may, before the expiry of this authority, make offers or agreements which would or might require Shares to be allotted or rights to be granted after such expiry and the directors shall be entitled to allot Shares and grant rights pursuant to any such offer or agreement as if the authority conferred by this resolution had not expired; and
In this paragraph 3, reference to ''Directors'' means the directors of the Company from time to time, reference to the ''Board'' means the board of directors of the Company from time to time and reference to "Group" means the Company and its subsidiaries from time to time, and "Group Company" means any company in the Group.
The Memorandum, which, by virtue of section 28 of the CA 2006, is now treated as being part of the Articles, provides that the Company's principal object and purpose is to carry on the business of a VCT.
The following is a summary of the current Articles.
The liability of the members of the Company is limited to the amount, if any, unpaid on the shares held by them.
Subject to the provisions of the Companies Acts general meetings, including annual general meetings, shall be held at such time and place as the Board may determine.
General meetings shall be convened by such minimum period of notice as may be required by the Companies Acts.
Every notice convening a general meeting shall specify:
The notice shall be given to the members (other than any who under the provisions of the Articles or of any restrictions imposed on any shares are not entitled to receive notice from the Company), to the Directors and to the Auditors and if more than one for the time being, to each of them.
2.4 Omission to send notice
The accidental omission to send a notice of meeting or, in cases where it is intended that it be sent out with the notice, any document relating to a meeting including an instrument of proxy, to, or the non-receipt of either by, any person entitled to receive the same shall not invalidate the proceedings at that meeting.
No business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business but the absence of a quorum shall not preclude the choice or appointment of a chairman which shall not be treated as part of the business of the Meeting. Two persons entitled to attend and to vote on the business to be transacted, each being a member present in person or a proxy for a member or a duly authorised representative of a corporation which is a member, shall be a quorum.
3.2 If quorum not present
If within 15 minutes (or such longer interval as the Chairman in his absolute discretion thinks fit) from the time appointed for the holding of a general meeting a quorum is not present, or if during a meeting such a quorum ceases to be present, the meeting, if convened on the requisition of members, shall be dissolved. In any other case, the meeting shall stand adjourned to such day and at such time and place as the Chairman (or, in default, the Board) may determine, being not less than ten clear days thereafter. lf at such adjourned meeting a quorum is not present within 15 minutes from the time appointed for holding the meeting one member present in person or by proxy or (being a corporation) by a duly authorised representative shall be a quorum. If no such quorum is present or if during the adjourned meeting a quorum ceases to be present, the adjourned meeting shall be dissolved.
4.1 Method of voting
At any general meeting a resolution put to a vote of the meeting shall be decided on a show of hands unless (before or immediately after the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is duly demanded. Subject to the provisions of the Companies Acts, a poll may be demanded by:
(d) a member or members present in person or by proxy holding shares conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one tenth of the total sum paid up on all the shares conferring that right, and a demand for a poll by a person as proxy for a member shall be as valid as if the demand were made by the member himself.
The Chairman may also demand a poll before a resolution is put to the vote on a show of hands.
4.2 Chairman's declaration conclusive on show of hands
Unless a poll is duly demanded and the demand is not withdrawn a declaration by the Chairman of the meeting that a resolution has on a show of hands been carried or carried unanimously or by a particular majority or lost or not carried by a particular majority shall be conclusive, and an entry to that effect in the book containing the minutes of proceedings of the Company shall be conclusive evidence thereof, without proof of the number or proportion of the votes recorded in favour of or against such resolution.
Subject to any rights or restrictions attached to any shares:
Subject to the provisions of the Companies Acts, if at any time the share capital of the Company is divided into shares of different classes any of the rights for the time being attached to any share or class of shares in the Company (and notwithstanding that the Company may be or be about to be wound up) may (unless otherwise provided by the terms of issue of the shares of that class) be varied or abrogated in such manner (if any) as may be provided by such rights or, in the absence of any such provision, either with the consent in writing of the holders of not less than three quarters in nominal value of the issued shares of the class or with the sanction of a special resolution passed at a separate general meeting of the holders of shares of the class duly convened and held as provided in the Articles (but not otherwise).
All the provisions in the Articles as to general meetings shall mutatis mutandis apply (with any necessary modifications) to every meeting of the holders of any class of shares save that:
Except as may be provided in the Articles, each member may transfer all or any of his shares by instrument of transfer in writing in any usual form or in any form approved by the Board. Such instrument shall be executed by or on behalf of the transferor and (in the case of a transfer of a share which is not fully paid up) by or on behalf of the transferee. The transferor shall be deemed to remain the holder of such share until the name of the transferee is entered in the Register in respect of it.
The Board may in its absolute discretion and without giving any reason refuse to register any share transfer unless:
(c) it is in respect of only one class of shares;
(d) it is in favour of a single transferee or not more than four joint transferees;
Subject to the provisions of the Companies Acts and of the Articles, the Company may by ordinary resolution declare that out of profits available for distribution, dividends be paid to members according to their respective rights and interests in the profits of the Company available for distribution. However, no dividend shall exceed the amount recommended by the Board.
9.2 Entitlement to dividends
Except as otherwise provided by the rights attached to shares, all dividends shall be declared and paid according to the amounts paid up (otherwise than in advance of calls) on the shares on which the dividend is paid. Subject as aforesaid, all dividends shall be apportioned and paid pro rata according to the amounts paid up or credited as paid up on the shares during any portion or portions of the period in respect of which the dividend is paid but if any share is issued on terms providing that it shall rank for dividend as from a particular date or be entitled to dividends declared after a particular date it shall rank for or be entitled to dividends accordingly.
All dividends and interest shall be paid (subject to any lien of the Company) to those members whose names shall be on the register at the date at which such dividend shall be declared or at the date at which such interest shall be payable respectively, or at such other date as the Company by ordinary resolution or the Board may determine, notwithstanding any subsequent transfer or transmission of shares.
The Board may pay the dividends or interest payable on shares in respect of which any person is by transmission entitled to be registered as holder to such person upon production of such certificate and evidence as would be required if such person desired to be registered as a member in respect of such shares.
all as shown in the latest audited balance sheet of the Group (prepared on the historical cost basis, modified to the extent as may be stated in the accounting policies used for the preparation of such balance sheet) but after:
(iv) the principal amount of any preference share capital of any subsidiary beneficially owned otherwise than by a Group Company;
(v) any fixed or minimum premium payable on final repayment of any borrowing or deemed borrowing (but any premium payable on final repayment of an amount not to be taken into account as moneys borrowed shall not be taken into account); and
and in paragraphs (vii) to (xii) above references to amounts of moneys borrowed include references to amounts which, but for the exclusion under those paragraphs, would fall to be included;
virtue of the provisions of the Companies Acts), and Group and Group Company and references to any company which becomes a Group Company or to companies comprising the Group shall in such case be construed so as to include subsidiary undertakings except a subsidiary undertaking which is excluded from consolidation as aforesaid and equity share capital shall be construed in relation to a subsidiary undertaking without a share capital in the same manner as shares are defined in relation to an undertaking without a share capital under the Companies Acts.
11.1 Conflicts of interest requiring Board authorisation
The Board may, provided the quorum and voting requirements set out below are satisfied, authorise any matter that would otherwise involve a Director breaching his duty under the Companies Act 2006 to avoid conflicts of interest:
Subject to the provisions of the Companies Acts and the paragraph 11.1 above and further provided that the Articles are complied with, a Director, notwithstanding his office:
(b) may hold any other office or place of profit under the Company (except that of Auditor or of auditor of a subsidiary of the Company) in conjunction with the office of Director and may act by itself or through his firm in a professional capacity for the Company and in any such case on such terms as to remuneration and otherwise as the Remuneration Committee may arrange either in addition to or in lieu of any remuneration provided for by any other Article;
(c) may be a member of or a director or other officer, or employed by, or a party to any transaction or arrangement with or otherwise interested in, any body corporate promoted by or promoting the Company or in which the company is otherwise interested or as regards which the Company has any powers of appointment; and
The Board may with the authority of an ordinary resolution of the Company:
(b) appropriate the sum resolved to be capitalised on the date specified in the resolution to the holders of ordinary shares in proportion to the nominal amount of the shares (whether or not fully paid) held by them respectively which would entitle them to participate in a distribution of that sum if the shares were fully paid and the sum were then distributable and were distributed by way of dividend and apply such sum on their behalf either in or towards paying up the amount, if any, for the time being unpaid on any share held by them respectively or in paying up in full unissued shares or debentures of the Company of a nominal amount equal to that sum and allot the shares or debentures credited as fully paid to those holders of ordinary shares or as they may direct in those proportions or partly in one way and partly in the other provided that:
(i) the share premium account, the capital redemption reserve, any other undistributable reserve and any profits which are not available for distribution may, for these purposes, only be applied in paying up unissued shares to be allotted to holders of ordinary shares credited as fully paid; and
(any agreement made under such authority being effective and binding on all such holders); and
At any time when the Company has given notice in the prescribed form (which has not been revoked) to the registrar of companies of its intention to carry on business as an investment company (a Relevant Period) distribution of the Company's capital profits shall be prohibited. The Board shall establish a reserve to be called the capital reserve. During a Relevant Period all surpluses arising from the realisation or revaluation of investments and all other monies realised on or derived from the realisation, payment off of or other dealing with any capital asset in excess of the book value thereof and all other monies which are considered by the Board to be in the nature of accretion to capital shall be credited to the capital reserve. Subject to the Companies Acts, the Board may determine whether any amount received by the Company is to be dealt with as income or capital or partly one way and partly the other. During a Relevant Period, any loss realised on the realisation or payment off of or other dealing with any investments or other capital assets and, subject to the Companies Acts, any expenses, loss or liability (or provision therefor) which the Board considers to relate to a capital item or which the Board otherwise considers appropriate to be debited to the capital reserve shall be carried to the debit of the capital reserve. During a Relevant Period, all sums carried and standing to the credit of the capital reserve may be applied for any of the purposes for which sums standing to any revenue reserve are applicable except and provided that notwithstanding any other provision of the Articles during a Relevant Period no part of the capital reserve or any other money in the nature of accretion to capital shall be transferred to the revenue reserves of the Company or be regarded or treated as profits of the Company available for distribution or be applied in paying dividends on any shares in the Company. In periods other than a Relevant Period any amount standing to the credit of the capital reserve may be transferred to the revenue reserves of the Company or be regarded or treated as profits of the Company available for distribution or be applied in paying dividends on any shares in the Company.
The Board shall have power in the name and on behalf of the Company to present a petition to the court for the Company to be wound up.
If the Company is wound up, the surplus assets remaining after payment of all creditors are to be divided among the members in proportion to the capital which at the commencement of the winding up is paid up on the shares held by them respectively and, if such surplus assets are insufficient to repay the whole of the paid up capital, they are to be distributed so that as nearly as may be the losses are borne by the members in proportion to the capital paid up at the commencement of the winding up on the shares held by them respectively. The above is subject to the rights attached to any shares which may be issued on special terms or conditions.
If the Company is wound up the liquidator may, with the sanction of a special resolution of the Company and any other sanction required by law, divide among the members in specie the whole or any part of the assets of the Company and may for that purpose value any assets and determine how the division shall be carried out as between the members or different classes of members. Any such division may be otherwise than in accordance with the existing rights of the members but if any division is resolved otherwise than in accordance with such rights the members shall have the same right of dissent and consequential rights as if such resolution were a special resolution passed pursuant to section 110, Insolvency Act 1986. The liquidator may with the like sanction vest the whole or any part of the whole of the assets in trustees on such trusts for the benefit of the members as he with the like sanction shall determine but no member shall be compelled to accept any assets on which there is a liability.
15.2 Duration of the Company
In order for the future of the Company to be considered by the members, the Board shall at the annual general meeting of the Company falling after the fifth anniversary of the last allotment of shares in the Company and thereafter at five yearly intervals, invite the members to consider and debate the future of the Company (including, without limitation, whether the Company should be wound up, sold or unitised) and as soon as practicable following that meeting shall convene a general meeting to propose such resolution as the members attending the annual general meeting may by ordinary resolution require.
The Board may make such arrangements as it sees fit, subject to the CA 2006, to deal with the Transfer, allotment and holding of shares in uncertificated form and related issues.
The Company shall indemnify the directors to the extent permitted by law and may take out and maintain insurance for the benefit of the directors.
| Director | Shares | % of Share Capital |
|---|---|---|
| Peter Dicks | 151,131 | 0.17 |
| James H Grossman | 8,000 | 0.01 |
| Jeremy Hamer | 28,254 | 0.03 |
| Jocelin Harris | 80,350 | 0.09 |
| Director | Fees Paid in the Year Ended 30 September 2015 (£) |
|---|---|
| Peter Dicks | 25,500 |
| James H Grossman | 20,400 |
| Jeremy Hamer | 22,950 |
| Jocelin Harris | 22,950 |
4.5 Directors' fees for the current year ending 30 September 2016 are estimated to be £100,050. No amounts have been put aside to provide pensions, retirement or similar benefits to any Directors.
4.6 The Directors are shareholders in the following companies in which the Company has invested:
| Director | Investee Company |
|---|---|
| Peter Dicks | Interactive Investor plc Mears Group plc |
| James H Grossman | Anpario plc Crawshaw Group plc Tristel plc |
| Jeremy Hamer | Access Intelligence plc Avingtrans plc SnackTime plc |
| Jocelin Harris | Interactive Investor plc Vianet Group plc Mears Group plc |
4.9 No loan or guarantee has been granted or provided by the Company to or for the benefit of any of the Directors.
4.10 The Company has taken out directors' and officers' liability insurance for the benefit of its Directors, which is renewable on an annual basis.
4.11 The Directors are currently or have been within the last five years, a member of the administrative, management or supervisory bodies or partners of the companies and partnerships mentioned below:
| Director | Current | Past 5 Years |
|---|---|---|
| Peter Dicks | Foresight VCT plc Foresight 2 VCT plc (in liquidation) Foresight 3 VCT plc Foresight 4 VCT plc Graphite Enterprise Trust plc Interactive Investor plc Mears Group plc Mercia Fund 1 General Partner Limited Miton UK MicroCap Trust plc Private Equity Investor plc SVM UK Emerging Fund plc Unicorn AIM VCT plc |
Committed Capital VCT plc (dissolved) Daniel Stewart Securities plc Enterprise Capital Trust plc (dissolved) Foresight Clearwater VCT plc (dissolved) Foresight 5 VCT plc (dissolved) GFT Dealing Limited (dissolved) London Trust Productions Limited (dissolved) Miton Income Opportunities Trust plc (dissolved) PCT Finance Limited (dissolved) Second London American Trust plc (dissolved) Polar Capital Technology Trust plc Sportingbet plc (now Sportingbet Limited) Champion Communications Services Inc (USA) |
| James H Grossman | Applaud Medical, Inc. (USA) JHG Solar Limited Mendocino Brewery Co. Inc. (USA) Unicorn AIM VCT plc |
Canoel International Energy Limited (Canada) Fresh T Limited Thalassa Holdings Limited (British Virgin Islands) |
| Jeremy Hamer | Avingtrans plc Fin Dec Limited Port Regis School Limited Snacktime plc SQS Software Quality Systems AG Unicorn AIM plc Westminster Coaching LLP |
Access Intelligence plc Breathe on UK Drinkmaster Limited Drinkmaster Holdings Limited Integer (VBD) Limited (dissolved) RB Sport & Leisure Holdings plc Simply Drinks Limited Snack in the Box Limited Snacktime UK Limited Unicorn AIM VCT II plc (dissolved) Vendia UK Limited V.M.I (Blackburn) Limited Zero 9ine Limited (dissolved) |
| Jocelin Harris | Durrington Corporation Limited Eeonyx Corporation (USA) Foresight 2 VCT plc (in liquidation) Foresight VCT plc Halkin Secretaries Limited Lightfoot Solutions UK Limited Millennium Mats Limited Lightfoot Solutions Group Limited Mintec Limited Obillex Limited Roil Foods Limited Roilvest Limited Serres Limited The St Peter's College Foundation The Millennium Mat Company LLC (USA) Tudor Roof Tile Co. Limited Unicorn AIM VCT plc Unipower Solutions Europe Limited (in liquidation) |
Brandbank Limited Keycom plc Nishana Investments Limited (BVI) Obillex UK Limited Queen Mary, University of London Foundation The Webb Partnership Limited |
4.12 None of the Directors have had any convictions in relation to fraudulent offences during the previous five years.
4.13 Save those companies which have an asterisk next to their name in the table above, which are all companies that have been voluntarily struck off from the Register of Companies and save as disclosed in this paragraph, there were no bankruptcies, receiverships or liquidations of any companies or partnership where any of the Directors were acting as (i) a member of the administrative, management or supervisory body, (ii) a partner with unlimited liability, in the case of a limited partnership with a share capital, (iii) a founder where the company had been established for fewer than five years or (iv) a senior manager during the previous five years:
Save as disclosed in this paragraph, the Company has not entered, other than in the ordinary course of business, into any contract which is or may be material to the Company within the two years immediately preceding the publication of this document or into any contract containing provisions under which the Company has any obligation or entitlement which is material to the Company as at the date of this document:
6.1 A management agreement dated 1 October 2001 (as supplemented by agreements/deeds dated 20 January 2004, 19 February 2007, 9 March 2010 and 12 April 2010) between the Company (1) and Unicorn AM (2) pursuant to which Unicorn AM provides certain investment management services to the Company for an annual management fee of an amount equal to 2% per annum of the net asset value of the Company (together with any applicable VAT) calculated and charged quarterly, save for investments made by the Company in other Unicorn AM managed funds, in which case no additional management fee will be payable in respect of such investments.
Under this agreement, the Investment Manager has agreed to meet the normal annual expenses of the Company (excluding performance incentive fees and trail commission) in excess of an amount equal to 3.6% of the net assets of the Company as at the end of each financial year.
The Investment Manager may retain any director's fees which it receives in connection with an investment made by the Company subject to prior written approval of the Board. The Investment Manager is required to account to the Company for all syndication, arrangement and transaction fees, commissions, refunds of commissions and interest received by the Investment Manager in connection with the management of the investments of the Company.
The agreement is terminable by either party on 12 months' notice to expire on or after 12 April 2012, subject to earlier termination by either party in the event of, inter alia, a party having a receiver, administrator or liquidator appointed or committing a material breach of the agreement or by the Company if it fails to become, or ceases to be, a VCT for tax purposes or where the Investment Manager ceases to be authorised by the Financial Conduct Authority or if there is a change in control of the Investment Manager. The agreement contains provisions indemnifying the Investment Manager against any liability not due to its default, gross negligence, fraud or breach of the Financial Services and Markets Act 2000.
6.2 A performance incentive agreement dated 12 April 2010 (as amended by a deed of variation dated 12 April 2010 and as supplemented by a side letter dated 14 December 2010) between the Company (1) and the Investment Manager (2) pursuant to which the Investment Manager is also entitled to receive performance incentive fees of 20% of dividends made to Shareholders and above the Target Return in any accounting period. The Target Return for these purposes is 6p per Share (or, if the relevant accounting period is less than or greater than 12 months, an amount equal to a pro rata reduction or increase to that amount for that accounting period). Any cumulative shortfalls below the 6p per annum dividend hurdle after the financial period ended on 30 September 2010 has to be made up in later years before any incentive fee is payable in the relevant year. Such payment will be subject to maintaining NAV at 125p per Share.
Although the arrangement allows for the performance incentive calculation to be adjusted in such manner as the auditors confirm in writing where the Company issues further Shares, it has been agreed that no adjustment will be made which would result in a reduction in the requirement to maintain NAV at no less than 125p per Share.
The Investment Manager has not received a performance incentive fee since the above arrangements were put in place.
The agreement will terminate automatically if the Company enters into liquidation or if a receiver or manager is appointed or if a resolution is passed that the Company is voluntarily wound up in accordance with the Articles.
6.5 A letter dated 1 February 2016 from the Investment Manager to the Company pursuant to which the Investment Manager has agreed to act as the promoter of the Offer and to underwrite all of the costs and expenses of the Offer (save for permissible annual trail commission and any facilitated initial adviser charges) in consideration for a promotion fee of 2.5% of the Application Amounts in respect of the applications accepted under the Offer, plus an amount equal to any execution only intermediary commissions. The Investment Manager has further agreed that, to the extent that the actual costs of the Offer are less than the amount of the promotion fee payable to it, the Investment Manager will rebate this amount to the Company.
6.6 A letter dated 1 February 2016 from the Investment Manager to LGBR Capital pursuant to which the Investment Manager has appointed LGBR Capital to provide distribution services in respect of the Offer. The fees payable to LGBR Capital are payable by the Investment Manager.
The Investment Manager, under the arrangements set out at paragraph 6.1, was paid £1,060,000, £1,527,235 and £1,907,204 in the years ended 30 September 2013, 2014 and 2015 respectively. In the current financial year ending 30 September 2016 the Investment Manager has been paid fees of £1,193,462 in respect of the six month period to 31 March 2016. The Investment Manager also received fees of £nil in respect of share offer promotion services it provided to the Company in the year to date (nil, £293,428 and £458,089 for the years ended 30 September 2013, 2014 and 2015, respectively). These fees were paid in order to enable the Investment Manager to meet the costs related to the promotion of former offers for subscription and any surplus was returned to the Company. Save for the payments to the Investment Manager set out above in paragraphs 6.1 to 6.3 and the Directors' remuneration on the basis set out in paragraph 4.4 above, there were no related party transactions or fees paid during the years ended 30 September 2013, 2014 and 2015 (and disclosed in the financial statements for the relevant financial years) or to date in the current financial year.
The Board adopts the Association of Investment Companies Code of Corporate Governance 2013 (AIC Code). The AIC Code addresses all principles set out in the UK Corporate Governance Code (the UK Code), as well as setting out additional principles and recommendations on issues that are of specific relevance to the Company. The Financial Reporting Council (FRC) has confirmed that in complying with the AIC Code the Company will meet its obligations in relation to the UK Code and paragraph 9.8.6 of the Listing Rules. The Board believes that reporting against the principles of the AIC Code will provide more relevant information to shareholders.
As at the date of this document, the Company has complied with the recommendations of the AIC Code and the relevant provisions of the UK Code except where noted below. There are certain areas of the UK Code that the AIC does not consider relevant to investment companies and with which the Company does not specifically comply, for which the AIC Code provides dispensation. These areas are as follows:
As an externally managed investment company, the Company does not employ a chief-executive nor any executive directors. The systems and procedures of the Investment Manager and ISCA Administration Services, the provision of VCT monitoring services by PricewaterhouseCoopers LLP, and the annual statutory audit as well as the size of the Company's operations, gives the Board confidence that an internal audit function is not appropriate.
At least four formal Board meetings are scheduled every year and other meetings are held as necessary. Matters specifically reserved for decision by the Board have been defined. These include compliance with the requirements of CA 2006, the UK Listing Authority, Alternative Investment Fund Manager's Directive (AIFMD), London Stock Exchange and UK Accounting Standards; changes relating to the Company's capital structure or its status as a public limited company; Board and committee appointments and terms of reference of committees; material contracts of the Company and contracts of the Company not in the ordinary course of business. The Board as a whole considers management engagement, nomination and remuneration matters rather than delegating these to committees, as all of the current Directors are considered independent of the Investment Manager. Management engagement matters include an annual review of the Company's service providers, with a particular emphasis on reviewing the Investment Manager in terms of investment performance, quality of information provided to the Board and remuneration. The Board as a whole considers Board and committee appointments and the remuneration of individual directors.
The primary focus at each quarterly Board meeting is governance, overall strategy and a review of investment performance, including but not limited to investor relations, peer group information and issues affecting the investment industry as a whole. The Board, with the Investment Manager and the Company's broker, monitors the level of the share price discount and, if considered appropriate, takes action to reduce it. A procedure has been adopted for individual Directors, in the furtherance of their duties, to take independent professional advice at the expense of the Company. The Directors have access to the advice and services of the Company Secretary, which is responsible to the Board for ensuring board procedures are followed. Both the appointment and removal of the Company Secretary are matters for the Board as a whole. Where Directors have concerns which cannot be resolved about the running of the Company or a proposed action, they are asked to ensure that their concerns are recorded in the Board minutes. On resignation, a Director who has any such concerns should provide a written statement to the Chairman, for circulation to the Board. The Board has satisfied itself that the Audit Committee has sufficient resources to undertake its duties.
All Directors are subject to election by Shareholders at the first annual general meeting following their appointment. Each Director retires by rotation at an annual general meeting if they have held office as a director at the two immediately preceding annual general meetings and did not retire at either of those meetings in accordance with the Articles.
In terms of overall length of tenure, the AIC Code does not explicitly make recommendations. Some market practitioners feel that considerable length of service (which has generally been defined as a limit of nine years) may lead to the compromise of a director's independence. The Board does not believe that a director should be appointed for a finite period. Peter Dicks has now served the Company for fourteen years and Jocelin Harris has served nine years and the Board considers that they remain independent of the Investment Manager as they continue to offer independent, professional judgement and constructive challenge of the Investment Manager. In accordance with the AIC Code, however, Peter Dicks and Jocelin Harris will offer themselves for re-election annually. James Grossman will retire by rotation and offers himself for re-election.
The Board has considered whether each Director is independent in character and judgement and whether there are any relationships or circumstances which are likely to affect, or could appear to affect, the Director's judgement and has concluded that, all of the Directors are independent of the Investment Manager. Peter Dicks is a non-executive director and shareholder in Mears Group plc and Interactive Investor plc, two of the Company's investee companies. Jocelin Harris has a beneficial interest in Mears Group plc, Interactive Investor plc and Vianet Group. James Grossman has a shareholding in Anpario plc, Crawshaw Group plc and Tristel plc. Jeremy Hamer is the non-executive chairman of SnackTime plc, holding 0.4% of the issued share capital and is also a director of the investee company Avingtrans plc, holding 0.4% of its respective issued share capital, and a shareholder in Access Intelligence plc.
The Directors, who were each independent of each conflict noted above, considered the circumstances and agreed that all of the relevant Directors in each case remain independent of the Investment Manager, as these relationships are not of a material size to their assets and other business activities nor to those of the Company. There are no other contracts or investments in which the Directors have declared an interest.
The above conflicts, along with other potential conflicts, have been reviewed by the Board in accordance with the procedures under the Articles and applicable rules and regulations and have been authorised by the Board in accordance with these procedures. The Articles allow the Directors not to disclose information relating to the conflict where to do so would amount to a breach of confidence. The Board places great emphasis on the requirement for the Directors to disclose their interests in investments (and potential investments) and has instigated a procedure whereby a Director declaring such an interest does not participate in any decisions relating to such investments. The Directors inform the Board of changes to their other appointments as necessary. The Board reviews the authorisations relating to conflicts annually. Authorisation will be reviewed should there be a material change in an authorised conflict. Future conflicts of interest will be considered by the Board under the above procedures and will be reported upon accordingly.
The Board aims to include a balance of skills and experience that the Directors believe to be appropriate to the management of the Company. The Chairman fully meets the independence criteria as set out in the AIC Code. The effectiveness of the Board and the Chairman is reviewed annually as part of the internal control process led by the Board. During the year to 30 September 2015, the Board also carried out a performance evaluation by way of an independent third party review, which considered performance in relation to specific headings such as, balance of skills, experience, independence and knowledge of the Company. No deficiencies were identified in this process. The senior independent director evaluates all responses and provides feedback to the Board. In the year to 30 September 2015, he concluded that the composition and performance of the Board was effective. The Directors monitor the continuing independence of the Chairman and inform him of their discussions.
As noted above the Board as a whole considers matters relating to management engagement, nomination and remuneration.
The Audit Committee comprises all of the Directors and Jeremy Hamer acts as Chairman. The Board is satisfied that Jeremy Hamer has recent and relevant financial experience. The Committee meets at least twice a year to review the internal financial and nonfinancial controls, accounting policies and contents of the half-yearly and annual reports to Shareholders. It has primary responsibility for making recommendations on the appointment and removal of the external auditors. The Committee reviews the independence of the auditors and the effectiveness of the audit process annually. Should the Committee be dissatisfied with the standard of service received from the incumbent auditor, a tender process would be undertaken. The Company's external auditors are invited to attend meetings as appropriate.
The Board has overall responsibility for the Company's affairs including the determination of its investment policy. Risk is spread by investing in a number of different businesses across different industry sectors. The Investment Manager is responsible for managing sector and stock specific risk and the Board does not impose formal limits in respect of such exposures. However, in order to maintain compliance with HMRC rules and to ensure that an appropriate spread of investment risk is achieved, the Board receives and reviews comprehensive reports from the Investment Manager and the administrator on a quarterly basis for the purposes of board meetings, as well as additional monthly reports in between. When the investment manager proposes to make an investment in an unquoted company, the prior approval of the Board is required. ISCA Administration Services provides company secretarial and accountancy services to the Company.
Audited financial information on the Company is published in the annual reports for the years ended 30 September 2013, 2014 and 2015, which were audited by BDO LLP of 55 Baker Street, London W1U 7EU (which acquired PKF (UK) LLP) and were reported on without qualification and contained no statements under Chapter 3 of Part 16 of CA 2006.
The annual reports referred to above were prepared in accordance with UK generally accepted accounting practice (GAAP), the fair value rules of the Companies Acts and the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies'.
The most recent two years' financial information (prepared under UK GAAP) has been presented and prepared in a form which is consistent with that which will be adopted in the Company's next published annual financial statements (FRS 102) having regard to accounting standards, policies and legislation applicable to such annual financial statements so far as there are no material differences between the financial statements for these years prepared under these two accounting frameworks.
The annual reports referred to above contain a description of the Company's financial condition, changes in financial condition and results of operation for each relevant financial year and are being incorporated by reference (which contain the information as detailed below) and can be accessed at the following website:
and are available for inspection at the National Storage Mechanism, which can be accessed at:
Where these documents make reference to other documents, such other documents are not incorporated into and do not form part of this Prospectus. The two tables below comprise a cross-referenced list of information incorporated by reference. The parts of these documents which are not being incorporated by reference are either not relevant for an investor or are covered elsewhere in the Prospectus.
The annual report includes the following information:
| Description | 2013 Annual Report |
2014 Annual Report |
2015 Annual Report |
|---|---|---|---|
| Balance Sheet | Page 43 | Page 44 | Page 44 |
| Income Statement (or equivalent) | Page 42 | Page 43 | Page 43 |
| Statement showing all changes in equity (or equivalent note) | Page 44 | Page 45 | Page 45 |
| Cash Flow Statement | Page 44 | Page 45 | Page 45 |
| Accounting Policies and Notes | Pages 45-60 | Pages 46-62 | Page 46-61 |
| Auditor's Report | Page 40 | Page 41 | Page 40 |
This information has been prepared in a form consistent with that which will be adopted in the Company's next published annual financial statements having regard to accounting standards and policies and legislation applicable to those financial statements.
The annual report also includes operating/financial reviews as follows:
| 2013 | 2014 | 2015 | |
|---|---|---|---|
| Description | Annual Report | Annual Report | Annual Report |
| Objective | inside front cover inside front cover inside front cover | ||
| Performance Summary | Page 1 | Page 1 | Page 1 |
| Results and Dividend | Page 1 | Page 1 | Page 1 |
| Investment Policy | Page 10 | Page 11 inside front cover | |
| Outlook | Page 2 | Pages 2-3 | Page 3 |
| Investment Manager's Review | Pages 11-15 | Pages 12-17 | Page 11-17 |
| Portfolio Summary | Pages 16-23 | Pages 18-25 | Page 18-25 |
| Business Review | Page 3 | Page 4 | Page 4 |
| Valuation Policy | Page 45 | Page 46 | Page 46 |
As at 30 September 2015, the date to which the most recent audited annual financial information on the Company has been drawn up, the Company had net assets of £124.6 million (156.6p per Share). The unaudited net assets of the Company as at 31 December 2015 (taken from the Company's unaudited financial information to 31 December 2015) were £131.0 million (163.76p per Share).
11.1 The Company is of the opinion that its working capital is sufficient for its present requirements, that is for at least the twelve month period from the date of this document.
| £'000 |
|---|
| 800 |
| 38 |
| 37,206 |
| 56,594 |
| 26,386 |
| 9,953 |
| 130,977* |
*Other than as a result of the acquisition of the assets and liabilities of Rensburg AIM VCT plc, there has been no material change in the capitalisation of the Company between 31 December 2015, the date of the Company's latest unaudited management accounts and 1 February 2016, the latest practicable date before the date of publication of this document.
11.6 Save as set out below, there are no material potential conflicts of interest which any of the service providers to the Company may have as between their duty to the Company and the duties owed to third parties and their other interests.
11.6.1 Unicorn AM is the investment manager both to the Company and a number of other funds, including open ended investment companies in which the Company invests. The Investment Manager received from these other funds fees in respect of the Company's investment in the funds of £114,941, £69,465 and £51,667 in the years ended 30 September 2013, 2014 and 2015 and £15,836 in the current year to date respectively, for the management services provided to them and calculated on the value of the Company's holding in each OEIC on a daily basis. To ensure that the Investment Manager does not receive a double payment of management fees in respect of these other funds, the Company and the Investment Manager have put in place arrangements whereby the Company does not pay the Investment Manager (under the management arrangements with the Company set out in paragraph 6.1 above) management fees in relation to the Company's investments in these other funds.
11.17 The Company is subject to the investment restrictions relating to a venture capital trust in ITA 2007 (as amended and supplemented from time to time), as more particularly detailed in Part VIII of this document, and in the Listing Rules which specify that (i) the Company must, at all times, invest and manage its assets in a way which is consistent with its object of spreading investment risk and in accordance with its published investment policy as set out in page 23 of this document; (ii) the Company must not conduct any trading activity which is significant in the context of its group as a whole; and (iii) the Company may not invest more than 10%, in aggregate, of the value of total assets at the time an investment is made in other listed closed-ended investment funds. Any material change to the investment policy of the Company will require the approval of Shareholders pursuant to the Listing Rules. The Company intends to direct its affairs in respect of each of its accounting periods so as to qualify as a venture capital trust and accordingly:
11.17.1 the Company's income is intended to be derived wholly or mainly from shares or other securities, as this phrase is interpreted by HMRC;
Copies of the following documents will be available for inspection during normal business hours on any day (Saturdays, Sundays and public holidays excepted) from the date of this document until the offer closes at the offices of Shakespeare Martineau LLP, One America Square, Crosswall, London EC3N 2SG and also at the registered office of the Company:
2 February 2016
| ''Admission'' | admission of the New Shares allotted under the Offer to the premium tier of the Official List and to trading on the London Stock Exchange becoming effective |
|---|---|
| "advised investor" | an investor who received advice from a financial adviser in respect of an investment under the Offer |
| ''AIM" | the Alternative Investment Market of the London Stock Exchange |
| ''Allotment Formula'' | the formula, pursuant to which the number of New Shares to be allotted to an applicant under the Offer, as further detailed in Part II of this document |
| "Application Amount" | the amount remitted to the Company with the investor's application, including any amount requested to be facilitated, as accepted under the Offer |
| ''Application Form'' | an application form for use in respect of the Offer as set out in this document or otherwise made available by the Company |
| ''Articles'' | the articles of association of the Company |
| ''Board'' | the board of Directors of the Company |
| ''Business Day" | means any day on which banks are generally open for business in London, other than a Saturday |
| ''CA 2006'' | the Companies Act 2006 (as amended) |
| "Capita Asset Services" | a trading name of Capita Registrars Limited |
| "Common Reporting Standard" | the OECD Common Reporting Standard for Automatic Exchange of Financial Account Information |
| "Companies Acts" | CA 2006 and the Companies Act 1985 and regulations made thereunder (as amended) (as applicable) |
| ''Company'' | Unicorn AIM VCT plc |
| "Company Secretary" | the company secretary of the Company from time to time |
| ''CREST'' | the computerised settlement system to facilitate the transfer of title to securities in uncertified form operated by Euroclear UK & Ireland Limited |
| ''Directors'' | the directors of the Company (and each a ''Director'') |
| "Disclosure and Transparency Rules" | the Disclosure and Transparency Rules of the UKLA |
| "EEA States" | the member states of the European Economic Area |
| "Existing Beneficial Shareholders" | beneficial holders of Shares (and each an "Existing Beneficial Shareholder") |
| "Existing Shareholders" | existing registered Shareholders (and each an "Existing Shareholder") |
| "Execution only investor" | an investor who invests under the Offer through an execution only intermediary |
| ''FCA'' | the Financial Conduct Authority |
| ''FSMA" | the Financial Services and Markets Act 2000 and regulations made thereunder (as amended) |
| ''HMRC'' | HM Revenue & Customs |
| "Investment Amount" | the amount of the investor's application accepted to be used to subscribe for New Shares (ie the Application Amount, less any amount of any initial adviser charge agreed to be facilitated in respect of an advised investor) |
| ''Investment Manager'' or ''Unicorn AM" | Unicorn Asset Management Limited |
| ''IPEVC Valuation Guidelines'' | International Private Equity and Venture Capital Valuation Guidelines |
|---|---|
| "ISCA Administration Services" | ISCA Administration Services Limited |
| "ISDX" | the ICAP Securities & Derivatives Exchange, a prescribed market for the purposes of section 118 of FSMA |
| ''ITA 2007'' | the Income Tax Act 2007 (as amended) |
| "LGBR Capital" | LGBR Capital London Limited |
| ''Memorandum" | the memorandum of association of the Company |
| ''NAV'' or ''net asset value'' | the net asset value of a company calculated in accordance with that company's accounting policy |
| "New Investors" | new investors (who are not Existing Shareholders) who subscribe for New Shares pursuant to the Offer (and each a "New Investor") |
| ''New Shares'' | new Shares to be issued pursuant to the Offer (and each a "New Share") |
| "OEIC" | open-ended investment company |
| ''Offer'' | the offer for subscription to raise up to £10 million, through the issue of up to, in aggregate, 10 million New Shares as set out in this document |
| ''Offer Price" | the price at which New Shares will be determined by dividing the Investment Amount by the number of New Shares to be issued as calculated pursuant to the Allotment Formula |
| ''Official List'' | the Official List maintained by the UKLA |
| "Panmure Gordon" | Panmure Gordon (UK) Limited |
| ''Prospectus'' | this document |
| ''Qualifying Company'' | an unquoted (including an AIM-listed) company which satisfies the requirements of Chapter 4 of Part 6 of the ITA 2007 |
| ''Qualifying Investors" | individuals aged 18 or over who are resident in the United Kingdom and who invest in the Company (and each a "Qualifying Investor") |
| ''Receiving Agent'' | Capita Asset Services |
| "Risk Finance Guidelines" | European Commission communication C(2014) 34/2 – Guidelines on state aid to promote risk finance investments |
| ''Shareholders" | holders of Shares (and each a ''Shareholder') |
| ''Shares'' | ordinary shares of 1p each in the capital of the Company (and each a ''Share'') |
| "Tax Residency Self Certification Form" | an individual tax residency self-certification – sole holding form for use by those who are not already a shareholder in the Company in respect of the Offer as set out in this document |
| ''UK Listing Authority'' or ''UKLA'' | the FCA acting in its capacity as the competent authority for the purposes of Part VI of the FSMA |
| "United Kingdom" or "UK" | the United Kingdom of Great Britain and Northern Ireland |
| "United States" or "US" | the United States of America, its states, territories and possessions (including the District of Columbia) |
| "VCT Value" | the value of an investment calculated in accordance with section 278 of the Tax Act |
| "Venture Capital Investments" | shares in, or securities of, a Qualifying Company held by a venture capital trust which meets the requirements described in Chapter 4 of Part 6 of the ITA 2007 |
| ''venture capital trust'' or ''VCT'' | a venture capital trust as defined in section 259 ITA 2007 |
The Offer is open to all existing Shareholders and new investors.
The Application Form for use in connection with the Offer is attached at the end of this document. Additional copies of the Application Form can be obtained from www.unicornam.com or by contacting Unicorn AM (the investment manager of the Company) on 020 7253 0889 or LGBR Capital (the distributor for the Offer) on 020 3195 7100 between the hours of 9.00am and 5.30pm on any Business Day.
To apply to participate in the Offer, please complete and return the Application Form to Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU by post or hand delivered (during normal business hours only) by 12.00 noon on 1 April 2016 (in respect of applications for the 2015/2016 tax year) and 12.00 noon on 30 June 2016 (in respect of applications for the 2016/2017 tax year).
If you are not already a shareholder in the Company, in addition to completing and returning the Application Form to Capita Asset Services, you will also need to complete and return a Tax Residency Self Certification Form. The "individual tax residency self-certification – sole holding" form can be found at the end of this prospectus, can be downloaded from the Company website (www.unicornaimvct.co.uk), or by request from Capita Asset Services on 0371 664 0324. It is a condition of the application that (where applicable) a completed version of that form is provided with the Application Form before any application can be accepted. Existing shareholders will be contacted separately by the Company to provide these details.
If you have any questions relating to this document, and the completion and return of the Application Form or, if relevant, the Tax Residency Self Certification Form, please telephone Capita Asset Services on 0371 664 0324. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9 am – 5.30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Capita Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.
Please complete all parts of the Application Form in accordance with the following instructions. The Applicant should complete Boxes 1 to 6 (as applicable), while the Applicant's financial adviser or intermediary, if any, should complete Boxes 7 and 8 (as applicable).
If you are an Existing Beneficial Shareholder, please provide confirmation from the registered holder that you are the beneficiary of the Shares held by such registered holder.
If facilitation of an initial adviser charge is being requested. The Company will only facilitate where your financial adviser has provided advice to you in respect of your investment in the Company, your financial adviser should complete Box 7b (as further detailed below) to confirm that financial advice has been provided and the amount of any initial adviser charge to be facilitated by the Receiving Agent has been agreed with you (and by signing this form you confirm the amount inserted by your financial adviser).
Pin your cheque or banker's draft to the Application Form which must be made payable to ''Capita Registrars Limited re Unicorn AIM VCT plc 2016 Offer For Subscription A/C'' and crossed ''A/C Payee only''. Your payment must relate solely to this application. Cheques may be presented for payment on receipt. Alternatively, you can make payment via bank transfer to the following account:
Capita Registrars Ltd re Unicorn AIM VCT plc 2016 – Offer for subscription account
Bank Name: Royal Bank of Scotland Sort Code: 15-10-00 Account Number: 32317912 Account Name: Capita Registrars Ltd re Unicorn AIM VCT plc 2016 – Offer for subscription account Swift No: RBOSGB2L IBAN: GB17RBOS15100032317912
If you wish to pay by electronic transfer, payments must be made by CHAPS or SWIFT in sterling. Details of the bank being instructed to make such electronic transfer must be entered in Box 3 of the Application Form. Payments in electronic form must come from a UK bank account and from a personal account in the name of the individual investor where they have sole or joint title to the funds. The account name should be the same as that shown in Box 1 of the Application Form. Payments must relate solely to your Application.
Where an electronic transfer is being made the investor must provide a certified copy of their passport and a recent bank statement. No receipt in respect of electronic payments or acknowledgement of Applications will be issued. Please note the electronic facility for tax year 2015/2016 will close at 5.00 pm on 31 March 2016. Offer Application Procedures
Please reference bank transfers with your initials and telephone contact number.
Subject always to the discretion of the Directors, applications under the Offer will normally be accepted on a first come, first served basis, save that applications accompanied by a post-dated cheque will not be processed until the cheque can be presented and will not be treated as being received by the Receiving Agent until that date.
Your cheque or banker's draft must be drawn in Sterling on an account with a United Kingdom or European Union regulated credit institution, and which is in the sole or joint name of the investor and must bear the appropriate sort code in the top right-hand corner.
The right is reserved to reject any application in respect of which the investor's cheque or banker's draft has not been cleared on first presentation. Any monies returned will be sent by cheque crossed ''A/C Payee only'' in favour of the investor without interest.
The verification requirements of the Money Laundering Regulations 2007 will apply and verification of the identity of the applicant may be required. Failure to provide the necessary evidence of identity may result in your application being treated as invalid or in a delay of confirmation.
If the application is for the Sterling equivalent of €15,000 or more (or is one of a series of linked applications the value of which exceeds that amount):
Copies should be certified by a solicitor or bank. Original documents will be returned by post at your risk.
Availability of initial commission and commission options are set out on pages 19 and 20 of this document and must be agreed with the Investment Manager and/or LGBR Capital in advance. Commissions will only be paid if, and to the extent, they are permitted under legislation and regulations and the 'execution-only' intermediary's client continues to hold their New Shares. Execution only Intermediaries can waive some or all of the initial commission for the benefit of their clients. If the commission is to be waived this should be indicated by completing Box 7a accordingly.
If there is no indication in Box 7a of how commission is to be treated, the intermediary identified in Box 6 will (to the extent permitted under legislation and regulations) be paid the commission due.
7b. Financial advisers who have provided advice to their clients should ONLY complete Box 7b.
If you have agreed to pay your financial adviser an initial adviser charge direct, your financial adviser should tick option A within Box 7b, confirming that they have provided financial advice to you but that no facilitation service is required by Capita Asset Services pursuant to this application. There is no requirement for such adviser to sign the form in Box 7b.
If you have agreed with your financial adviser that the payment of an initial adviser charge (in whole or part) should be facilitated by Capita Asset Services from the monies provided with the application, your financial adviser should:
Please note the financial advisers' obligation to advise their clients of the Risk Factors found on pages 10 and 11 of this document. Financial advisers should take particular notice of the notes to Box 7b and advise their client accordingly. In particular, if the amount provided by the applicant is less than the aggregate amount required to meet the investment amount in Box 3 and the amount of the initial adviser charge in Box 7b, the amount of investment as inserted in Box 3 may be reduced accordingly.
If Box 7b is not completed, then the Company will assume no facilitation of an initial adviser charge is required.
If you are not already a shareholder in the Company, please complete and return the Tax Residency Self Certification Form along with the Application Form and deliver to Capita Asset Services.
It is a condition of the application that (where applicable) a completed version of the Tax Residency Self Certification Form is provided with the Application Form before any application can be accepted.
The following terms and conditions apply to the Offer, save as set out below.
Save where the context otherwise requires, words and expressions defined in the Definitions section of this document have the same meanings when used in these terms and conditions and the Application Form.
The section headed ''Offer Application Procedures'' and "Application Form Instructions" in this Part X and the Application Form form part of these terms and conditions of application to the Offer.
(k) confirm that you have reviewed the restrictions contained in paragraph 5 below and warrant as provided therein;
(l) warrant that you are not under the age of 18 years;
respect of any application accepted from a client for whom the execution only intermediary acts, to pay an initial commission (subject to a maximum of 3% of the amount subscribed for New Shares by their clients). Intermediaries may waive all or part of the initial commission due for the benefit of their client (such amount will be taken into account in determining the number of New Shares to be allotted under the Allotment Formula). In addition, provided that the 'execution-only' intermediaries' clients continue to hold their New Shares, such intermediaries will normally be paid an annual trail commission of 0.375% of the net asset base value for each such New Share by the Company. For this purpose, 'net asset base value' means the net assets attributable to such New Share as determined from the audited annual accounts of the Company as at the end of the preceding financial year. No payment of trail commission (save as referred to below) will be made to the extent that the cumulative trail commission would exceed 2.25% of the Offer Price of the New Share in question. The Investment Manager may, with the consent of the Board, agree to pay trail commission on a different basis, providing it does not exceed the maximum cumulative payment of 2.25% of the offer price of the New Share in question. Commissions will only be paid if, and to the extent, they are permitted under legislation and regulations. Annual trail commission will be paid shortly after the later of the annual general meeting of the Company and, where applicable, the date of payment of the final dividend in each year and, in respect of annual trail commission, provided no subsequent financial advice is provided by them to the client, and the client continues to hold such New Shares on the funds invested). For this purpose, 'net asset base value' means the net assets attributable to such New Share as determined from the audited annual accounts of the Company as at the end of the preceding financial year. The first payment will be for the year ending 30 September 2016. No payment of commission by the Company shall be made to the extent that the cumulative annual trail commission per New Share would exceed 2.25% of the Offer Price for each such New Share held by the applicant. Confirmation that no advice has been given must be provided on the Application Form. For the avoidance of doubt, initial and annual trail commission will not be payable where execution only intermediaries have provided advice, though an initial adviser charge may be facilitated as referred to below.
Initial commissions will be paid out of the costs of the Offer. Annual trail commission will be paid by the Company. It is expected that annual trail commission will be paid approximately five months after the year-end of the Company. Initial commission will be paid by way of cheque. The administration of annual trail commission will be managed on behalf of the Company by ISCA Administration Services which will maintain a register of execution only intermediaries entitled to trail commission.
Execution only Intermediaries should keep a record of Application Forms submitted bearing their stamp or full address details to substantiate any claim for commission. The Receiving Agent will collate the Application Forms bearing the intermediaries' stamps or full address details and calculate the initial commission payable which will be paid following the relevant allotment of New Shares pursuant to the Offer to such intermediary's client.
Investors and execution only intermediaries should note that trail commission is not payable if the intermediary subsequently then gives advice in respect of a holding. The Company should be immediately notified that trail commission payments should cease. It is the responsibility of the investor and the execution only intermediary to notify the Company if advice is given and payments for this (or for any other reason) should cease (though the Company also reserves the right to cease payments if it believes advice may have been given or for any other reason in its absolute discretion).
In respect of existing trail commission arrangements to intermediaries, such payments will continue (to the extent permitted under legislation and regulations), but not if subsequent financial advice in respect of the holding is given. As a result, should a Shareholder decide to seek financial advice from their existing execution only intermediary in respect of participating in the Offer, any trail commission which is currently being paid to that intermediary pursuant to an existing holding in the Company should cease and the Investment Manager and/or the Company should be notified accordingly.
Completed Application Forms with the appropriate remittance must be posted or delivered by hand (during normal business hours only) to Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU. The Offer will be open from 2 February 2016 and will close at 12.00 noon 30 June 2016 (unless it is fully subscribed earlier or otherwise at the Board's discretion). The Board in its absolute discretion may decide to extend the Offer (but not later than 12 months after the publication of the Prospectus).
Applications in respect of the 2015/2016 tax year should be received by 12.00 noon on 1 April 2016. If electronic payments are being made then electronic payment will only be accepted up to 5.00 pm on 31 March 2016 for the 2015/2016 tax year.
If you post your Application Form, you are recommended to use first class post and to allow at least two Business Days for delivery.
Unless otherwise agreed by the Company, the New Shares will be issued in certificated form (though such New Shares can subsequently be admitted to CREST).
It is expected that dealings in the New Shares will commence within three Business Days following allotment and that share certificates will be dispatched within ten Business Days of allotment of the New Shares. Allotments will be announced on an appropriate Regulatory Information Service Provider.
Temporary documents of title will not be issued. Dealings prior to receipt of share certificates will be at the risk of applicants. A person so dealing must recognise the risk that an application may not have been accepted to the extent anticipated or at all.
| UNICORN AIM VCT PLC UNICORN AIM VCT PLC Definitions used in the prospectus published by the Company dated 20 September 2013 ("Prospectus") (copies of which can be downloaded Definitions used in the prospectus published by the Company dated 2 February 2016 (Prospectus) (copies of which can be downloaded from from www.unicornam.com) apply herein. www.unicornam.com) apply herein. Before completing this Application Form you should read the Offer Application Procedures and Terms and Conditions contained in the Prospectus. Please send the completed Application Form with your cheque or banker's draft and, if necessary, proof of identity to Capita necessary, proof of identity to Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU. Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU. Cheques should be made payable to "Capita Registrars Limited re Unicorn AIM VCT plc 2016 Offer For Subscription A/C". Cheques should be made payable to "Capita Registrars Limited re Unicorn AIM VCT plc OFS A/C". The Offer opens on 20 September 2013 and will close at 12.00 noon on 30 June 2014. The Offer may close earlier if fully subscribed or otherwise at the Board's discretion. The Offer may be extended by the Board in its absolute discretion (but not later than 12 months after the publication of the Prospectus). If tax relief is to be applied for in respect of the subscription monies in the tax year 2013/2014, the 12.00 noon on 1 April 2016. closing date will be 12.00 noon on 4 April 2014. The Company and the Receiving Agent cannot accept responsibility if any details provided by you are incorrect. completed version of that form is provided with the Application Form before any application can be accepted. Please complete in BLOCK CAPITALS. The Company and the Receiving Agent cannot accept responsibility if any details provided by you are incorrect. 1. Title: Mr/Mrs/Miss/Ms/Dr/Other Please complete in BLOCK CAPITALS. Forenames: TO BE COMPLETED BY THE INVESTOR. Surname(s): 1 Title: Mr/Mrs/Miss/Ms/Dr/Other Address: Forename(s): Surname(s): Postcode: Existing Shareholder (please tick if relevant): Registered holder Beneficial holder Email address: Existing Shareholder Investor Code: Telephone (work); Telephone (home): Address: National Insurance Number: Date of Birth: I wish to subscribe the amount in the Company, divided between tax years 2013/2014 and 2014/2015 as set out in Box 2 below or such lesser amount for which this subscription will be accepted, on the terms and conditions set out on pages 53 to 56 of the Prospectus. £ 2. Tax year 2013/2014 Post code: £ Tax year 2014/2015 Email address: £ Total (to equal at least £2,000) Telephone (work): Telephone (home): I enclose a cheque or banker's draft drawn on a UK clearing bank made payable to "Capita Registrars Limited re Unicorn AIM VCT plc Date of Birth: National Insurance Number OFS A/C" for the amount of the subscription monies in the Total Box above and the amount, if any, of the initial adviser charge to be facilitated, as inserted in Box 8b below. I wish to invest under the Offer the amount in respect of the tax years 2015/2016 and 2016/2017 as set out in Box 3 below, or such lesser amount(s) for which this subscription will be accepted, on the terms and conditions set out on pages 58 to 62 of the Prospectus. 3. By signing this form I HEREBY DECLARE THAT I have read the terms and conditions of the Offer set out on pages 53 to 56 of the Prospectus (and as further contained herein) and agree to be bound by them. I understand this is a long term investment Please tick the relevant box if you are an existing shareholder and provide your investor code if you are a registered shareholder and have read the Risk Factors set out on pages 9 and 10 of the Prospectus and the Prospectus as a whole. to avoid duplicate shareholder accounts being created. Signature: Date: 2 By signing this form I HEREBY DECLARE THAT I have read the terms and conditions of the Offer set out on pages 58 to 62 of the Prospectus (and as further contained herein) and agree to be bound by them. I understand this is a long term investment and have read the Risk Factors set out on pages 10 to 11 of the Prospectus and the Prospectus as a whole. Signature Date of applicant 57 |
Application Form Application Form |
|---|---|
| Before completing this Application Form you should read the Offer Application Procedures and Terms and Conditions contained in the Prospectus. Please send the completed Application Form with your electronic payment transfer details, cheque or banker's draft and, if The Offer opens on 2 February 2016 and will close at 12.00 noon on 30 June 2016. The Offer may close earlier if fully subscribed or otherwise at the Board's discretion. The Offer may be extended by the Board in its absolute discretion (but not later than 12 months after the publication of the Prospectus). If tax relief is to be applied for in respect of the subscription monies in the tax year 2015/2016, the closing date will be If you are not already a shareholder in the Company, in addition to completing and returning the Application Form to Capita Asset Services, you will also need to complete and return a Tax Residency Self Certification Form. It is a condition of the application that (where applicable) a |
|
| 63 | |
| Unicorn AIM VCT plc Unicorn AIM VCT plc |
| 3 | Tax year 2015/2016 | £ |
|---|---|---|
| Tax year 2016/2017 | £ | |
| Total (to equal at least £2,000) | £ | |
| Please tick one box only: VCT plc 2016 Offer For Subscription A/C" Bank Name: Royal Bank of Scotland Sort Code: 15-10-00 Account Number: 32317912 Swift No: RBOSGB2L IBAN: GB17RBOS15100032317912 instructions in the Prospectus for further instructions) requested to be facilitated (as inserted in Box 7b below) |
I enclose a cheque or banker's draft drawn on a UK clearing bank made payable to "Capita Registrars Limited re Unicorn AIM I confirm that I will make an electronic transfer to Capita Registrars Limited to the following account: Account Name: Capita Registrars Ltd re Unicorn AIM VCT plc 2016 – Offer for subscription account and I will provide all necessary identity verification evidence (transfers should be made after first sending in your completed application form with a payment reference of your surname and initials - please see section 2 of the application form for the amount of the subscription monies in the Total Box above, together with the amount, if any, of the initial adviser charge |
|
| Complete the section below only if you are tendering payment by electronic transfer | ||
| Name of Bank | ||
| Branch Sort Code |
||
| Account Name | ||
| Account Number | ||
| Reference – your initials and telephone number |
||
| Telephone: | ||
| (where an electronic transfer is being made the investor must provide a certified copy of their passport and a recent bank statement) | ||
| VII on page 28 of the Prospectus for further details. | The Finance Act 2014 which came into force with effect from 6 April 2014 restricts the availability of income tax relief on a subscription for shares in a VCT issued after 5 April 2014 where it is 'linked' to a sale of shares in the same VCT or if an investor subscribes for shares in a VCT within six months before or after selling any shares in that same VCT. Please see section 1.3 of Part |
|
| 4 | Investor Services | |
| How would you like to receive copies of statutory communications, such as annual and half-yearly reports: | ||
| Email Post |
All dividends on any Shares held in the Company may be paid directly into bank and building society accounts. In order to facilitate this, please complete the mandate instruction form in Box 5. Dividends paid directly into your account will be paid in cleared funds on the dividend payment date. Your bank or building society statement will identify details of the dividends as well as the dates and amounts paid.
| UNICORN AIM VCT PLC | ||
|---|---|---|
| 5 | Dividend Mandate Definitions used in the prospectus published by the Company dated 20 September 2013 ("Prospectus") (copies of which can be downloaded |
|
| Please forward, until further notice, all dividends that may from time to time become due to any shares now standing or which may from www.unicornam.com) apply herein. |
||
| hereafter stand, in my name in the register of members of the Company to: | ||
| a. | Before completing this Application Form you should read the Offer Application Procedures and Terms and Conditions contained in the Name of Bank or Building Society: Prospectus. Please send the completed Application Form with your cheque or banker's draft and, if necessary, proof of identity to Capita |
|
| b. | Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU. Account Number: |
|
| c. | Cheques should be made payable to "Capita Registrars Limited re Unicorn AIM VCT plc OFS A/C". Sort Code: |
|
| d. | The Offer opens on 20 September 2013 and will close at 12.00 noon on 30 June 2014. The Offer may close earlier if fully subscribed or Account Name (BLOCK capitals please): otherwise at the Board's discretion. The Offer may be extended by the Board in its absolute discretion (but not later than 12 months after |
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| e. | the publication of the Prospectus). If tax relief is to be applied for in respect of the subscription monies in the tax year 2013/2014, the closing date will be 12.00 noon on 4 April 2014. Signature: |
|
| f. | The Company and the Receiving Agent cannot accept responsibility if any details provided by you are incorrect. Date: |
|
| g. | Please complete in BLOCK CAPITALS. Applicant's Name (BLOCK capitals please): 1. Title: Mr/Mrs/Miss/Ms/Dr/Other |
|
| h. | Post code of applicant: Forenames: |
| UNICORN AIM VCT PLC | Application Form | |||
|---|---|---|---|---|
| 5 | Dividend Mandate from www.unicornam.com) apply herein. |
Definitions used in the prospectus published by the Company dated 20 September 2013 ("Prospectus") (copies of which can be downloaded Please forward, until further notice, all dividends that may from time to time become due to any shares now standing or which may hereafter stand, in my name in the register of members of the Company to: |
||
| a. | Before completing this Application Form you should read the Offer Application Procedures and Terms and Conditions contained in the Name of Bank or Building Society: Prospectus. Please send the completed Application Form with your cheque or banker's draft and, if necessary, proof of identity to Capita |
|||
| b. | Account Number: | Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU. | ||
| c. | Sort Code: | Cheques should be made payable to "Capita Registrars Limited re Unicorn AIM VCT plc OFS A/C". | ||
| d. | The Offer opens on 20 September 2013 and will close at 12.00 noon on 30 June 2014. The Offer may close earlier if fully subscribed or Account Name (BLOCK capitals please): otherwise at the Board's discretion. The Offer may be extended by the Board in its absolute discretion (but not later than 12 months after the publication of the Prospectus). If tax relief is to be applied for in respect of the subscription monies in the tax year 2013/2014, the |
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| e. | Signature: | closing date will be 12.00 noon on 4 April 2014. | ||
| f. | Date: | The Company and the Receiving Agent cannot accept responsibility if any details provided by you are incorrect. | ||
| g. | Please complete in BLOCK CAPITALS. 1. Title: Mr/Mrs/Miss/Ms/Dr/Other |
Applicant's Name (BLOCK capitals please): | ||
| h. | Post code of applicant: Forenames: |
|||
| Surname(s): | THE REMAINDER OF THIS FORM SHOULD ONLY BE COMPLETED BY YOUR INTERMEDIARY (IF ANY). | |||
| 6 | Address: | Intermediary Contact Details | ||
| Firm name: | FCA number: | Postcode: | ||
| Adviser contact: Email address: |
IFA administrator contact: | |||
| E-mail(s): Telephone (work); |
Telephone (home): | |||
| Address: | National Insurance Number: | Date of Birth: | ||
| I wish to subscribe the amount in the Company, divided between tax years 2013/2014 and 2014/2015 as set out in Box 2 below or such lesser amount for which this subscription will be accepted, on the terms and conditions set out on pages 53 to 56 of the Prospectus. |
||||
| Post code: | ||||
| 2. Tax year 2013/2014 | £ | |||
| Telephone: Tax year 2014/2015 |
Fax: £ Payment Details (to be used if your commission(s)/charge is to be paid to a network or other third party) |
|||
| Name | Total (to equal at least £2,000) | £ I enclose a cheque or banker's draft drawn on a UK clearing bank made payable to "Capita Registrars Limited re Unicorn AIM VCT plc |
||
| Contact | OFS A/C" for the amount of the subscription monies in the Total Box above and the amount, if any, of the initial adviser charge to be facilitated, as inserted in Box 8b below. |
|||
| Address | 3. By signing this form I HEREBY DECLARE THAT I have read the terms and conditions of the Offer set out on pages 53 to 56 of the Prospectus (and as further contained herein) and agree to be bound by them. I understand this is a long term investment and have read the Risk Factors set out on pages 9 and 10 of the Prospectus and the Prospectus as a whole. |
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| Signature: | Post Code | Date: | ||
| Telephone: | ||||
| What type of investment is this? (tick one box only) | ||||
| This is a non-advised investment (execution only) – please go to box 7a | ||||
| This is an advised investment – please go to box 7b | ||||
| Unicorn AIM VCT plc Unicorn AIM VCT plc 65 57 |
| 7a Execution Only Intermediaries |
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|---|---|
| ------------------------------------- | -- |
Commission Options (to be agreed with Unicorn Asset Management Limited and/or LGBR Capital London Limited (subject to a maximum amount equal to 3% of the of the Application Amount)
| A | Amount of initial commission to be paid to intermediary | % |
|---|---|---|
| B | Amount of initial commission to be waived and re-invested for client | % |
| Total A + B (A + B must total no more than 3%) | % |
Please tick one of the following boxes to confirm that financial advice has been provided by you to your client in respect of this application and whether or not an initial adviser charge is required to be facilitated.
| Initial adviser charge (please complete one box only) | £ |
|---|---|
| % of the Application Amount |
8 By signing this form I HEREBY DECLARE THAT I have read the terms and conditions of the Offer set out on pages 58 to 62 of the Prospectus (and as further contained herein) and agree to be bound by them. I further confirm that the amount inserted above has been agreed with my client and that I have identified and verified the identity of the subscriber and the source of the subscription funds to the standard required by the Money Laundering Regulations 2007 within the guidance for the UK Capital Financial Sector issued by the Joint Money Laundering Steering Group.
| Signature | Date | |
|---|---|---|
The amount requested to be facilitated for adviser will be divided proportionately between the amounts for each tax year (if applicable) or, if the application is only accepted in part, reduced accordingly to ensure it is not greater than the maximum stated above.
VCT tax reliefs will only be available in respect of the actual amount invested in the Company and will not include facilitated initial adviser charges.
The charging of VAT on an initial adviser charge is the sole responsibility of the adviser. Should any charge facilitated by Capita Asset Services not include the payment of any such VAT, the investor will, at all times, remain solely responsible to make up such VAT deficit (if any) to the adviser.
| from www.unicornam.com) apply herein. UNICORN AIM VCT PLC |
FULL NAME: Before completing this Application Form you should read the Offer Application Procedures and Terms and Conditions contained in the |
|
|---|---|---|
| Prospectus. Please send the completed Application Form with your cheque or banker's draft and, if necessary, proof of identity to Capita Individual holder tax residency self-certification form – sole holding Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU. |
||
| Instructions for completion closing date will be 12.00 noon on 4 April 2014. exchange-of-information-account-holders |
Cheques should be made payable to "Capita Registrars Limited re Unicorn AIM VCT plc OFS A/C". The Offer opens on 20 September 2013 and will close at 12.00 noon on 30 June 2014. The Offer may close earlier if fully subscribed or The law requires us to collect, retain and report certain information about our shareholders, including their tax residence. For this purpose, otherwise at the Board's discretion. The Offer may be extended by the Board in its absolute discretion (but not later than 12 months after the shareholder is the person whose name appears on the share register. This may not necessarily be the same as the person who is entitled the publication of the Prospectus). If tax relief is to be applied for in respect of the subscription monies in the tax year 2013/2014, the to dividends or the sale proceeds of the shares, for example where shares are held by a nominee. For further information, please see HMRC's Quick Guide: Automatic Exchange of Information – information for account holders https://www.gov.uk/government/publications/ The Company and the Receiving Agent cannot accept responsibility if any details provided by you are incorrect. |
|
| • | Please complete in BLOCK CAPITALS. | To enable Unicorn AIM VCT plc to comply with its obligation to report to HMRC which may then share it with other tax authorities, you are required to provide certain information, including your country of residence for tax purposes. |
| • | 1. Title: Mr/Mrs/Miss/Ms/Dr/Other | Please complete the sections below as directed and provide any additional information requested. |
| • | Forenames: Surname(s): |
If your declared country/countries of residence for tax purposes is not the UK and is on the OECD list of countries with which the UK has agreed to exchange information (http://www.oecd.org/tax/exchange-of-tax-information/MCAA-Signatories.pdf) Unicorn AIM VCT plc will be obliged to share this information with HMRC who may then share it with other relevant local tax authorities. |
| • | Address: | Failure to validly complete this form will result in you being reported onwards to the relevant local tax authority. |
| • | Definitions of terms used in this form can be found in the Notes. | |
| • | contact your tax adviser. | If you have any remaining questions about how to complete this form or about how to determine your tax residency status you should Postcode: |
| • A. |
Telephone (work); self-certification form within 30 days of such change in circumstances. National Insurance Number: Part 1 – Identification of Individual Shareholder Please provide the Residence Address (if different from address carrier above) |
If any of the information below about your tax residency changes, you are required to provide Unicorn AIM VCT plc with a new, updated, Telephone (home): Date of Birth: I wish to subscribe the amount in the Company, divided between tax years 2013/2014 and 2014/2015 as set out in Box 2 below or such lesser amount for which this subscription will be accepted, on the terms and conditions set out on pages 53 to 56 of the Prospectus. |
| £ 2. Tax year 2013/2014 |
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| House Name | ||
| Number & Street / Road Name £ Tax year 2014/2015 |
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| Town / City £ Total (to equal at least £2,000) County |
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| Country | I enclose a cheque or banker's draft drawn on a UK clearing bank made payable to "Capita Registrars Limited re Unicorn AIM VCT plc OFS A/C" for the amount of the subscription monies in the Total Box above and the amount, if any, of the initial adviser charge to be |
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| facilitated, as inserted in Box 8b below. Postal or ZIP Code |
||
| B. Date of Birth | 3. By signing this form I HEREBY DECLARE THAT I have read the terms and conditions of the Offer set out on pages 53 to 56 of DD/MM/YY |
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| Part 2 – Country/Countries of Residence for Tax Purposes | the Prospectus (and as further contained herein) and agree to be bound by them. I understand this is a long term investment and have read the Risk Factors set out on pages 9 and 10 of the Prospectus and the Prospectus as a whole. |
|
| Signature: Country of residence for tax purposes |
Date: Tax Identification Number (see Definition) |
|
| Unicorn AIM VCT plc Unicorn AIM VCT plc 67 57 |
| Signature: Country of residence for tax purposes |
Date: Tax Identification Number (see Definition) |
|---|---|
I acknowledge that the information contained in this form and information regarding my shares may be reported to the local tax authority and exchanged with tax authorities of another country or countries in which I may be tax resident where those countries have entered into Agreements to exchange Financial Account information.
I undertake to advise Unicorn AIM VCT plc within 30 days of any change in circumstances which causes the information contained herein to become incorrect and to provide Unicorn AIM VCT plc with a suitably updated Declaration within 30 days of such change in circumstances.
I certify that I am the shareholder (or am authorised to sign for the shareholder).
I declare that all statements made in this declaration are, to the best of my knowledge and belief, correct and complete.
| Signature: | |
|---|---|
| Print Name: | |
| Date: |
If signing under a power of attorney, please also attach a copy of the power of attorney.
The OECD Common Reporting Standard for Automatic Exchange of Financial Account Information (The Common Reporting Standard) http://www.oecd.org/tax/automatic-exchange/common-reporting-standard/ contains definitions for the terms used within it. However, the following definitions are for general guidance only to help you in completing this form.
"Country/Countries of residence for tax purposes" You are required to list the country or countries in which you are resident for tax purposes, together with the tax reference number which has been allocated to you, often referred to as a tax identification number (TIN). Special circumstances (such as studying abroad, working overseas, or extended travel) may cause you to be resident elsewhere or resident in more than one country at the same time (dual residency). The country/countries in which you might be obliged to submit a tax return are likely to be your country/countries of tax residence. If you are a US citizen or hold a US passport or green card, you will also be considered tax resident in the US even if you live outside the US.
"Tax Identification Number or TIN" The number used to identify the shareholder in the country of residence for tax purposes. Some jurisdictions do not issue a TIN or do not issue a TIN to all residents. Depending on the country or jurisdiction these can include functional equivalent references such as a National Insurance number, social security number or resident registration number. Some jurisdictions that do issue TINs have domestic law that does not require the collection of the TIN for domestic reporting purposes so that a TIN is not required to be completed by a shareholder resident in such jurisdictions.
Peter Frederick Dicks (Chairman) James H Grossman Jeremy John Hamer Jocelin Montague St John Harris (all of the registered office)
2 Barnfield Crescent Exeter EX1 1QT Telephone: 01392 487056 Email: [email protected] Website: www.unicornaimvct.co.uk
04266437
Unicorn Asset Management Limited First Floor Office Preacher's Court The Charterhouse Charterhouse Square London EC1M 6AU
Capita Asset Services Corporate Actions The Registry 34 Beckenham Road Beckenham Kent BR3 4TU
ISCA Administration Services Limited Suite 8, Bridge House Courtenay Street Newton Abbot TQ12 2QS
Shakespeare Martineau LLP One America Square Crosswall London EC3N 2SG
Panmure Gordon (UK) Limited One New Change London EC4M 9AF
LGBR Capital London Limited 8 Angel Court London EC2R 7HJ
Capita Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU
BDO LLP 55 Baker Street London W1U 7EU
The Bank of New York Mellon One Canada Square London E14 5AL
National Westminster Bank plc City of London Office PO Box 12264 1 Princes Street London EC2R 8PB
Unicorn Asset Management Limited First Floor Offi ce, Preacher's Court, The Charterhouse Charterhouse Square, London EC1M 6AU 0207 253 0889 www.unicornam.com
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