Regulatory Filings • Dec 14, 2016
Regulatory Filings
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If you are in any doubt about the action to be taken, you should immediately consult your bank manager, stockbroker, solicitor, accountant or other independent financial adviser authorised pursuant to the Financial Services and Markets Act 2000, as amended ("FSMA").
If you have sold or otherwise transferred all of your shares in Hargreave Hale AIM VCT 1 plc or Hargreave Hale AIM VCT 2 plc (the "Companies"), please send this document and accompanying documents, as soon as possible, to the purchaser or transferee or to the stockbroker, independent financial adviser or other person though whom the sale or transfer was effected for delivery to the purchaser or transferee.
This document, which constitutes a registration document (the "Registration Document") relating to the Companies, has been prepared in accordance with the Prospectus Rules made by the Financial Conduct Authority pursuant to Part VI of FSMA. Additional information relating to the Companies is contained in a securities note issued by the companies (the "Securities Note"). This Registration Document, the Securities Note and a summary (the "Summary") have been approved by the Financial Conduct Authority (the "FCA") in accordance with FSMA and constitute a prospectus ("Prospectus") issued by the Companies dated 14 December 2016. The Prospectus has been filed with the FCA in accordance with the Prospectus Rules and you are advised to read the Prospectus in full.
Each of the directors of each Company, whose names are set out on page 6 of this document and the Companies, accept responsibility for the information contained in this document. To the best of the knowledge of the Directors and the Companies (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 contains no omission likely to affect the import of such information.
Howard Kennedy Corporate Services LLP (the "Sponsor"), which is authorised and regulated by the Financial Conduct Authority, is acting as sponsor for the Companies in connection with the Offers and is not advising any other person or treating any other person as a customer in relation to the Offers and will not be responsible to any such person for providing the protections afforded to customers of the Sponsor (subject to the responsibilities and liabilities imposed by FSMA and the regulatory regime established there under) or for providing advice in connection with the Offers. The Sponsor does not give any representation, warranty or guarantee that the Companies will qualify as Venture Capital Trusts or that investors will obtain any tax relief in respect of their investment.
The whole of this document should be read. In particular, your attention is drawn to the risk factors on pages 4 to 5 of this document. ____________________________________________________________________________
(Incorporated in England and Wales under the Companies Act 1985 with registered number 05206425)
(Incorporated in England and Wales under the Companies Act 1985 with registered number 05941261)
of Ordinary Shares of 1 pence each in Hargreave Hale AIM VCT 1 to raise up to £10,000,000*
and
Ordinary Shares of 1 pence each in Hargreave Hale AIM VCT 2 to raise up to £10,000,000* ____________________________________________________________________________
* If the Offers are oversubscribed, the maximum subscription may be increased at the discretion of the relevant Board in accordance with the Over-allotment Facility.
The existing Shares issued by each Company are listed on the premium segment of the Official List of the UK Listing Authority (UKLA) and traded on the London Stock Exchange's main market for listed securities. Application has also been made to the UKLA and the London Stock Exchange for the New Ordinary Shares to be issued pursuant to the Offers to be admitted to the premium segment of the Official List of the UKLA and to trading on the London Stock Exchange's market for listed securities. It is expected that such admission will become effective and that dealings in the New Ordinary Shares will commence within 10 business days of their allotment. The New Ordinary Shares will rank pari passu with the existing issued Shares from the date of issue.
The subscription list for those Ordinary Shares which are being offered to the public under the Offers will open on 14 December 2016 and may be closed at any time thereafter but, in any event, not later than 12.00 p.m. on 5 April 2017 for the 2016/17 tax year and 12.00 p.m. on 17 November 2017 for the 2017/18 tax year, unless closed prior to that date. All subscription monies will be payable in full in cash on application.
The distribution of this document in jurisdictions other than the UK may be restricted by law and therefore persons into whose possession this document comes should inform themselves about and observe any of these restrictions. Any failure to comply with any of those restrictions may constitute a violation of the securities laws of any such jurisdiction. Accordingly, no person receiving a copy of this document in any territory other than the UK may treat the same as constituting an offer or invitation to him to subscribe for or purchase New Ordinary Shares unless, in such territory, such offer or invitation could lawfully be made.
| Page | |
|---|---|
| Risk Factors | 4 |
| Directors, Investment Manager and Advisers | 6 |
| PART I | 8 |
| A. The Directors | 8 |
| B. The Companies' Investment Manager: Hargreave Hale Limited | 10 |
| C. Investment Policies of both Companies |
11 |
| D. Management of Investment Policy | 12 |
| E. Dividend History and Policy | 14 |
| F. Risk Management | 15 |
| G. Investments of Hargreave Hale AIM VCT 1 and Hargreave Hale AIM VCT 2 | 17 |
| H. Life of the Companies and Annual Accounts | 20 |
| I. VCT Status and monitoring |
20 |
| PART II | 21 |
| Financial Information on the Companies | 21 |
| PART III | 25 |
| Taxation and Conditions to be met by Venture Capital Trusts | 25 |
| PART IV | 28 |
| Additional Information | 28 |
| PART V | 54 |
| Definitions | 54 |
The following are those risk factors which are material to each Company and of which each Company's Directors are aware. Material risk factors relating to the Shares are set out in the Securities Note. If any of the risks described below were to occur, it could have a material effect on each of the Companies' businesses, financial condition or results of operations. Additional risks and uncertainties not presently known to the Directors or that the Directors currently deem immaterial, may also have an effect on their respective Company's business financial condition or results of operations.
the VCT's ability to pay dividends from realised profits; nor does it apply to funds used to redeem or repurchase shares or to assets distributed in the course of a winding up.
Sir Aubrey Thomas Brocklebank Bt. David Michael Brock Oliver Bedford in all cases of: Accurist House 44 Baker Street London W1U 7AL
David Alan Hurst-Brown Philip Simon Cammerman Oliver Bedford
Accurist House 44 Baker Street London W1U 7AL
Equiniti Aspect House Spencer Road Lancing West Sussex BN99 6DA
Stuart Brookes Talisman House Boardmans Way Blackpool FY4 5FY
The Royal Bank of Scotland plc 5th Floor Kirkstane House 139 St Vincent Street Glasgow G2 5JF
Philip Hare & Associates LLP 4 – 6 Staple Inn High Holborn London WC1V 7QH
Hargreave Hale Limited Talisman House Boardmans Way Blackpool FY4 5FY
in Relation to the Offers Hargreave Hale Limited Talisman House Boardmans Way Blackpool FY4 5FY
Howard Kennedy Corporate Services LLP No. 1 London Bridge London SE1 9BG
Hargreave Hale Limited Talisman House Boardmans Way Blackpool FY4 5FY
Howard Kennedy LLP No. 1 London Bridge London SE1 9BG
Nplus 1 Singer Advisory LLP 1 Bartholomew Lane London EC2N 2AX
Portunus Investment Solutions Suite 4, 52-54 Broadwick Street London W1F 7AH
BDO LLP 55 Baker Street London W1U 7EU
The Boards of each Company comprise three Directors, two of whom are independent of the Investment Manager. The Directors operate in a non-executive capacity and are responsible for overseeing the investment strategy of the Companies and ensuring high levels of corporate governance. Both Boards have a wide range of investment experience and are actively engaged in the management of VCTs. Whilst the Investment Manager operates under a discretionary fund management mandate, it will, where possible, disseminate an investment report for a proposed Qualifying Investment to the Boards for consideration before making an investment. The Investment Manager will not commit to an investment into a private company with no firm intention to float without the prior approval of the Boards.
Following a career in corporate finance and venture capital, Aubrey assumed his first role within the VCT industry in 1997. Since then he has gone on to become one of the most experienced directors within the industry. Aubrey maintains a wide range of business interests and has been a director of six AIM listed companies. He is non-executive chairman of Puma VCT 8 plc and senior independent director of Downing FOUR VCT plc.
An experienced company chairman in both private and public companies, and a former main board director of MFI Furniture Group plc, David joined the Board of Hargreave Hale AIM VCT 1 plc in September 2010. David is chairman of ECS Global and Elderstreet VCT plc and a non-executive director of Puma VCT 8 plc.
Oliver Bedford graduated from Durham University in 1995 with a degree in Chemistry. He served in the British Army for 9 years before joining Hargreave Hale in 2004. Oliver co-manages the Companies with Giles Hargreave and supports the other unit trusts through the investment committee.
David worked for over 25 years in the City. Much of this time was spent within the corporate finance division of UBS Warburg, where he established a small companies business unit. David has chaired the Board of Hargreave Hale AIM VCT 2 plc since incorporation in 2006. He is also non-executive chairman of Foresight Solar and Infrastructure VCT Plc.
Philip has held management roles in engineering and high-tech industries and, more recently, fund management at YFM Group. In addition to his directorship of Hargreave Hale AIM VCT 2 plc, Philip is a non-executive director of Pressure Technologies plc, British Smaller Companies VCT plc, Howmac Ltd and FCFM Group Limited.
Oliver Bedford graduated from Durham University in 1995 with a degree in Chemistry. He served in
the British Army for 9 years before joining Hargreave Hale in 2004. Oliver co-manages the Companies with Giles Hargreave and supports the other unit trusts through the investment committee.
The Companies' investment manager is Hargreave Hale Limited, a fund manager with approximately £6 billion under management as at 30 November 2016 (source: Hargreave Hale). Hargreave Hale has been managing investments in UK Small and Micro Cap companies for 18 years and VCTs for 12 years. It has a long established reputation that stems from its management of the Marlborough Special Situations Fund and the Marlborough UK Micro Cap Growth Fund, and more recently the VCTs. It has won numerous awards for its management of small cap funds, most recently the 2012 Quoted Company 'Investor of the Year' Award. In accordance with the investment policy, both Hargreave Hale AIM VCT 1 and Hargreave Hale AIM VCT 2 have made investments in the Marlborough Special Situations Fund, which has returned more than 2,250% since Giles Hargreave took responsibility for it in July 1998 (source: Hargreave Hale Limited, 30 November 2016).
The investments of the Companies are co-managed by Giles Hargreave and Oliver Bedford, with support from Joshua Northrop and the rest of the firm's investment team of 14, who manage approximately £3.5 billion, of which approximately £2.3 billion is invested in small companies, many of which are quoted on AIM. The breadth of the investment team, the scale of investment in small companies and the Investment Manager's track record help attract deal flow.
Hargreave Hale Limited provides discretionary investment management and advisory services to both Companies in respect of their portfolio of Qualifying Investments and Non-Qualifying Investments.
For Hargreave Hale AIM VCT 1, the Investment Manager receives investment management fees equal to 1.5% per annum of the Net Asset Value of the relevant Company and a Performance Incentive Fee.
For Hargreave Hale AIM VCT 2, the Investment Manager receives investment management fees equal to 1.5% per annum of the Net Asset Value of the Company and a Performance Incentive Fee.
The appointment may be terminated on 12 calendar months' notice by either party.
In line with normal VCT practice, a performance related incentive fee will be payable subject to certain criteria. This will be payable at the rate of 20% of any dividends paid to Ordinary Shareholders in excess of 6p per Ordinary Share per annum, provided that the Net Asset Value per Ordinary Share is at least 95p, with any cumulative shortfalls below 6p per Ordinary Share having to be made up in subsequent years.
A maximum of 75% of the Investment Manager's annual fee (plus irrecoverable VAT, but excluding any incentive fee) will be chargeable against capital reserves, with the remainder of the Investment Manager's annual fee being chargeable against revenue.
Hargreave Hale Limited (a company incorporated with limited liability in England under the Act with registered number 03146580 having its registered office at Talisman House, Boardmans Way, Blackpool, FY4 5FY and telephone number +44 (0) 1253 754700) acts as custodian to the Companies and, in that capacity, is responsible for ensuring safe custody and dealing with settlement arrangements in respect of each Companies' equity and fixed income assets, and certain cash deposits in a client deposit account. All other assets, including cash, are held by the Companies directly. Hargreave Hale Limited is authorised and regulated by the FCA.
The Company's investment objectives are:
The Company will have a range of investments in three distinct asset classes:
The Investment Manager will maintain a diversified and fully invested portfolio of Qualifying Investments, primarily in small UK companies with a quotation on AIM. The primary purpose of the investment strategy is to ensure the Company maintains its status as a VCT. To achieve this, the Company must have 70% of all funds raised from the issue of shares invested in Qualifying Investments throughout accounting periods of the VCT beginning no later than three years after the date on which those shares are issued.
Although VCTs are required to invest and maintain a minimum of 70% of their funds invested in
Qualifying Investments as measured by the VCT rules, it is likely that the Investment Manager will target a higher threshold of approximately 80% in order to provide some element of protection against an inadvertent breach of the VCT rules. The Company's maximum exposure to a single Qualifying Investment is limited to 15% of net assets.
The key selection criteria used by the Investment Manager in deciding which Qualifying Investments to make include, inter alia:
The Investment Manager will follow a stock specific, rather than sector specific, investment approach and is more likely to provide growth and development capital than seed capital.
The Investment Manager will primarily focus on investments in companies with a quotation on AIM or companies planning to trade on AIM. The Investment Manager prefers to participate in secondary issues of companies that are quoted on AIM as such companies have an established track record that can be more readily assessed and greater disclosure of financial performance. Secondary issues are often priced at an attractive discount to the market price.
The Companies will have non-qualifying equity exposure to UK and international equities through targeted investments made on an opportunistic basis. This will vary in accordance with the Investment Manager's view of the equity markets and may fluctuate between nil and 30% of the net assets of the Company. The Investment Manager will also invest in fixed income securities and cash. The Investment Manager will invest up to 75% of the net proceeds of any issue of new shares into the Marlborough Special Situations Fund subject to a maximum of 20% of the gross assets of the Company. This will enable the Companies to maintain their exposure to small companies indirectly, whilst the Investment Manager identifies opportunities to invest directly into small UK companies through a suitable number of Qualifying Investments.
The allocation between asset classes in the non-qualifying portfolio will vary depending upon opportunities that arise with a maximum exposure of 100% of the non-qualifying portfolio to any individual asset class.
It is not the Companies' intention to have any borrowings. The Companies do, however, have the ability to borrow a maximum amount up to 15% of the "Adjusted Capital and Reserves" amount (as such term is defined in the Articles of Association of each of the Companies), which is effectively the aggregate of the nominal capital of the Company issued and paid up and the amount standing to the credit of the consolidated reserves of the Company, less specified adjustments, exclusions and deductions. There are no plans to utilise this ability at the current time.
Hargreave Hale manages in total approximately £6 billion. The fund management team has
approximately £3.5 billion under management, of which approximately £2.3 billion is invested in small companies, many of which are quoted on AIM. The breadth of the investment team, the scale of investment in small companies and the Investment Manager's track record and many years of investing in AIM and ISDX-quoted (formerly PLUS) companies help attract deal flow.
The investment team has regular meetings, typically 27 per week, with small companies, a number of which would be suitable for investment by the Funds. These relationships, along with the ability to co-invest alongside the other funds managed by the Investment Manager, should increase the quality and quantity of the investment pipeline.
In the 12 months prior to the date of this document, the Companies made 20 Qualifying Investments totalling £10 million.
The Investment Manager monitors each investment closely and usually expects to meet with the management of investee companies twice a year.
As the values of underlying investments increase, the Investment Manager will monitor opportunities for the Companies to realise a proportion of the capital gain, and to make tax-free distributions to Shareholders.
The Investment Manager manages other funds that can invest in the same companies as Hargreave Hale AIM VCT 1 and Hargreave Hale AIM VCT 2, including the Marlborough Special Situations Fund and the Marlborough UK Micro Cap Growth Fund. Therefore, in appropriate circumstances, the Companies will invest alongside other funds managed by the Investment Manager. When contemplating a co-investment, the Investment Manager will first consider factors such as the risk profiles and investment strategies of the participating funds, the size of the fund raising and anticipated allocations when deciding on how much each fund will subscribe for. Any scaling back of applications made by the Investment Manager for shares in investee companies, on behalf of the different funds it manages, will be pro rata to the amount originally applied for by each fund.
Where the Companies intend to invest in the same companies as other funds managed by the Investment Manager, any such investment must first be approved by at least one Director of the Board who is independent of the Investment Manager, unless the investment is made either at the same time and on the same terms, or there is insufficient time to gain prior approval, or the investment is made in accordance with a pre-existing agreement between the Companies and the Investment Manager.
When the investee company has listed as a shareholder a unit trust or another fund also managed by the Investment Manager, and the Investment Manager does not intend to make a further investment into the investee company through that unit trust or other fund, the Investment Manager is to inform a Director of the Company who is independent of the Investment Manager of the proposed investment and the potential conflict of interest prior to making the investment. Where possible, this will be the Chairman. The Investment Manager will notify the Chairman of his obligations as someone who is in possession of inside information and pass his name to the Investment Manager's compliance department to be entered into the register of insiders. The Chairman will not pass on details of the proposed investment to other members of the Board.
The Chairman will notify the Investment Manager of his decision. If in his opinion the proposed investment requires further discussion with other members of the Board and there is sufficient time, the Chairman will ask the Investment Manager to convene a Board meeting to discuss the proposed investment. The Investment Manager will circulate the details of the Board Meeting and will notify the remaining Directors of the proposed investment, along with their obligations as persons who are in possession of inside information. The Investment Manager will notify its compliance department of those additional Directors who are to be entered into the register of insiders.
It is the responsibility of the Investment Manager to notify the Board, depending on the circumstances, and seek prior approval for the co-investment.
It is the responsibility of the Board to monitor compliance with this co-investment policy on a quarterly basis.
Both Companies have well established track records of paying out tax free dividends to their Shareholders. The table below shows the cumulative dividend distributions paid to date to holders of Ordinary Shares. The yields listed are calculated with reference to the closing Net Asset Value per Share in the financial year to which the dividends relate.
| Financial Year |
Dividends Paid |
Year End NAV Yield |
Cumulative Total |
Comments |
|---|---|---|---|---|
| 2005/6 | 5p | 4.7% | 5p | First full financial year |
| 2006/7 | 5p | 4.8% | 10p | |
| 2007/8 | 5p | 7.6% | 15p | |
| 2008/9 | 2p | 3.1% | 17p | No final dividend was paid in January 2010 in respect of the financial year ended 30 September 2009 |
| 2009/10 | 4p | 6.4% | 21p | |
| 2010/11 | 4p | 6.5% | 25p | |
| 2011/12 | 3.25p | 5.3% | 28.25p | |
| 2012/13 | 3.75p | 5.2% | 32p | |
| 2013/14 | 4.25p | 5.3% | 36.25p | |
| 2014/15 | 4p | 5.4% | 40.25p | |
| 2015/16 | 1.75p | - | 42p | A final dividend of 2.25p per share was declared on 7 December 2016, payable on 17 January 2017 |
Hargreave Hale AIM VCT 1 Ordinary Shareholders
| Financial Year |
Dividends Paid |
Year End NAV Yield |
Cumulative Total |
Comments |
|---|---|---|---|---|
| 2007/81 | 4p | 4.1% | 4p | |
| 2008/9 | 5p | 5.2% | 9p | No interim dividend was paid in November 2008 in respect of the half-year ended 31 August 2008. |
| 2009/10 | 5p | 4.9% | 14p | |
| 2010/11 | 5p | 4.6% | 19p | |
| 2011/12 | 5p | 5.2% | 24p | |
| 2012/13 | 5p | 5.2% | 29p | |
| 2013/14 | 6p | 5.0% | 35p |
| 2014/15 | 6p | 5.4% | 41p | |
|---|---|---|---|---|
| 2015/16 | 6p | 5.9% | 47p | |
| 2016/17 | 2p | - | 49p | Interim dividend only |
The intention is to continue the existing policy of targeting a 5% distribution yield (referenced to the Net Asset Value of each Company), although the ability to pay dividends will clearly be influenced by the underlying investment performance of the Ordinary Shares and the relevant Company's available reserves and cash resources, the Act and the Listing Rules. In good years, the Directors may consider a higher dividend payment; in poor years, the Directors may reduce or even pay no dividend.
Investments in AIM and ISDX-quoted (formally PLUS) shares will be valued at the prevailing bid price.
All other investments will be valued in accordance with EVCA guidelines.
The structure of the Companies' investment portfolios and their investment strategies, has been developed to mitigate risk where possible.
A typical investor for whom the Offers are designed is an individual who is a UK income taxpayer over 18 years of age with an investment range of between £5,000 and £200,000 per tax year who considers the investment policy as detailed in Paragraph C of Part I of this document to be attractive and can accept the high level of risk associated with an investment into a VCT. Investment in a VCT will not be suitable for every type of Investor and should be considered as a medium to long term investment with a minimum holding period of five years.
Before deciding whether to subscribe for New Ordinary Shares, Investors are strongly encouraged to consult an independent adviser authorised under FSMA and to carefully consider the suitability of an investment into the Companies in light of their personal circumstances.
As at 30 November 2016, the unaudited NAV per Ordinary Share of Hargreave Hale AIM VCT 1 was 74.80p.
Set out below are those investments of Hargreave Hale AIM VCT 1 as at the date of this document (the values being at 30 November 2016) which have an aggregate value of at least 50 per cent. of its net assets (all of which information is unaudited). There has been no material change to the aggregate value of Hargreave Hale AIM VCT 1's investment portfolio since 30 November 2016.
| Sector | Book Cost £000 |
(Unaudited) Valuation £000 |
(Unaudited) Valuation % |
|
|---|---|---|---|---|
| Qualifying Investments | ||||
| Cohort plc | Industrials | 619 | 1,876 | 3.9% |
| Abcam plc | Health Care | 55 | 1,365 | 2.9% |
| Portr Ltd | Information Technology | 722 | 1,275 | 2.7% |
| Animalcare Group plc | Health Care | 220 | 1,220 | 2.6% |
| Quixant plc | Consumer Discretionary | 160 | 1,113 | 2.3% |
| Idox plc | Information Technology | 135 | 1,090 | 2.3% |
| DP Poland plc | Consumer Discretionary | 347 | 1,011 | 2.2% |
| Learning Technologies Group plc | Information Technology | 663 | 994 | 2.1% |
| Craneware plc | Health Care | 125 | 980 | 2.1% |
| Science in Sport plc | Consumer Discretionary | 778 | 952 | 2.0% |
| K3 Business Tech Group plc | Information Technology | 270 | 930 | 2.0% |
| Zappar Ltd | Information Technology | 902 | 902 | 1.9% |
| Creo Medical Group plc | Health Care | 802 | 802 | 1.7% |
| Mexican Grill Ltd (A Preference Shares) | Consumer Discretionary | 185 | 769 | 1.6% |
| Ideagen plc | Information Technology | 410 | 676 | 1.4% |
| TLA Worldwide plc | Consumer Discretionary | 300 | 525 | 1.1% |
| TrakM8 Holdings plc | Information Technology | 106 | 503 | 1.1% |
| Intercede Group plc | Information Technology | 247 | 435 | 0.9% |
| ULS Technology plc | Information Technology | 221 | 426 | 0.9% |
| Vertu Motors plc | Consumer Discretionary | 600 | 405 | 0.9% |
| Aquis Ltd | Information Technology | 401 | 400 | 0.8% |
| Surface Transforms plc | Industrials | 273 | 400 | 0.8% |
| Tasty plc | Consumer Discretionary | 288 | 393 | 0.8% |
| Instem plc | Health Care | 297 | 371 | 0.8% |
| Non Qualifying Equity Investments | ||||
| Fulcrum Utility Services plc | Utilities | 125 | 682 | 1.4% |
| FCFM Group Ltd | Financials | 300 | 565 | 1.2% |
| Melrose Industries plc | Industrials | 371 | 549 | 1.2% |
| Royal Dutch Shell plc | Energy | 427 | 424 | 0.9% |
| Merlin Entertainments plc | Consumer Discretionary | 386 | 380 | 0.8% |
| MFM Special Situations Fund | 1,484 | 1,692 | 3.6% |
TOTAL 50.9%
| Portfolio Breakdown (by Asset Class) | Qualifying Investments by Sector (GICS) | ||||
|---|---|---|---|---|---|
| Information Technology | 39.1% | ||||
| Qualifying Investments: | 63.6% | Health Care | 24.2% | ||
| Non-Qualifying Equities: | 14.9% | Consumer Discretionary | 20.2% | ||
| Marlborough Special Situations: | 3.6% | Industrials | 10.1% | ||
| Net Cash: | 17.9% | Materials | 2.7% | ||
| Financials | 2.1% | ||||
| Energy | 1.2% | ||||
| Telecommunication Services | 0.4% | ||||
| Total: | 100.0% | Total | 100.0% |
As at 30 November 2016, the unaudited NAV per Ordinary Share of Hargreave Hale AIM VCT 2 was 104.45p.
Set out below are those investments of Hargreave Hale AIM VCT 2 as at the date of this document (the values being at 30 November 2016) which have an aggregate value of at least 50 per cent. of its net assets (all of which information is unaudited). There has been no material change to the aggregate value of Hargreave Hale AIM VCT 2's investment portfolio since 30 November 2016.
| Book Cost | (Unaudited) | (Unaudited) | ||
|---|---|---|---|---|
| Sector | £000 | Valuation £000 | Valuation % | |
| Qualifying Investments | ||||
| Mexican Grill Ltd (A Preference |
||||
| Shares) | Consumer Discretionary | 277 | 1,154 | 3.1% |
| DP Poland plc | Consumer Discretionary | 328 | 999 | 2.8% |
| Portr Ltd | Information Technology | 538 | 950 | 2.6% |
| Quixant plc | Consumer Discretionary | 120 | 835 | 2.3% |
| Learning Technologies Group plc | Information Technology | 534 | 801 | 2.2% |
| Ideagen plc | Information Technology | 190 | 770 | 2.1% |
| Creo Medical Group plc | Health Care | 701 | 701 | 1.9% |
| Zappar Ltd | Information Technology | 701 | 701 | 1.9% |
| Science in Sport plc | Consumer Discretionary | 518 | 635 | 1.7% |
| Animalcare Group plc | Health Care | 100 | 555 | 1.5% |
| Fulcrum Utility Services plc | Utilities | 100 | 500 | 1.4% |
| TrakM8 Holdings plc | Information Technology | 91 | 434 | 1.2% |
| Aquis Ltd | Information Technology | 401 | 400 | 1.1% |
| Gfinity plc | Information Technology | 290 | 342 | 0.9% |
| ECSC Group plc | Information Technology | 341 | 341 | 0.9% |
| Tristel plc | Health Care | 79 | 324 | 0.9% |
| Osirium Technologies plc | Information Technology | 301 | 312 | 0.8% |
| Hardide plc | Materials | 227 | 310 | 0.8% |
| Loop Up Group plc | Information Technology | 257 | 310 | 0.8% |
| Maxcyte Inc | Health Care | 160 | 302 | 0.8% |
| Laundrapp Ltd | Consumer Discretionary | 301 | 300 | 0.8% |
| Surface Transforms plc | Industrials | 201 | 294 | 0.8% |
| Royal Dutch Shell plc | Energy | 333 | 424 | 1.1% |
|---|---|---|---|---|
| Cohort plc | Industrials | 176 | 415 | 1.1% |
| RPC Group plc | Materials | 253 | 399 | 1.1% |
| BP plc | Energy | 388 | 391 | 1.1% |
| Merlin Entertainments plc | Consumer Discretionary | 386 | 380 | 1.0% |
| Melrose Industries plc | Industrials | 223 | 366 | 1.0% |
| Atkins (WS) plc | Industrials | 304 | 328 | 0.9% |
| Scottish Amicable 8.5% 2049 | 154 | 158 | 0.4% | |
| MFM Special Situations Fund | 2,848 | 3,448 | 9.3% |
| Qualifying Investments | 51.9% |
|---|---|
| Non-Qualifying Investments | 15.7% |
| Corporate Bond | 0.4% |
| Marlborough Special Situations | 9.3% |
| Net Cash | 22.7% |
| Total: | 100.0% | Total | 100.0% |
|---|---|---|---|
| Energy | 0.0% | ||
| Telecommunication Services | 0.5% | ||
| Financials | 2.0% | ||
| Utilities | 2.6% | ||
| Net Cash | 22.7% | Materials | 3.6% |
| Marlborough Special Situations | 9.3% | Industrials | 5.2% |
| Corporate Bond | 0.4% | Health Care | 19.1% |
| Non-Qualifying Investments | 15.7% | Consumer Discretionary | 25.7% |
| Qualifying Investments | 51.9% | Information Technology | 41.3% |
19
Hargreave Hale AIM VCT 1's annual report and accounts are made up to 30 September in each year and are normally sent to Shareholders in December of each year. It is the current intention of the Directors that the first report to be sent to Investors after the close of the Offers will be the audited annual accounts for the year ending 30 September 2017.
It is intended that Hargreave Hale AIM VCT 1 should have an unlimited life, but the Directors consider that it is desirable for Shareholders to have the opportunity to review the future of the Company at appropriate intervals. Hargreave Hale AIM VCT 1's Articles of Association require the Directors to put a proposal to Shareholders concerning the continuation of that company at the annual general meeting in 2021 and, if passed, at every fifth anniversary thereafter. As there is a risk for new Shareholders under the Offers that if the continuation vote is passed in favour of discontinuance, they will thereby be deemed to have disposed within their five year holding period, it is proposed that Shareholder approval will be sought at each Company's General Meeting to delay the continuation vote until 2023 and to adopt new articles of association accordingly.
Hargreave Hale AIM VCT 2's annual report and accounts are made up to 28 February in each year and are normally sent to Shareholders in June of each year. It is the current intention of the Directors that the first report to be sent to Investors after the close of the Offers will be the audited annual accounts for the year ending 28 February 2018.
It is intended that Hargreave Hale AIM VCT 2 should have an unlimited life, but the Directors consider that it is desirable for Shareholders to have the opportunity to review the future of the Company at appropriate intervals. Hargreave Hale AIM VCT 2's Articles of Association require the Directors to put a proposal to Shareholders concerning the continuation of the Company at the annual general meeting in 2021 and, if passed, at every fifth anniversary thereafter. As there is a risk for new Shareholders under the Offers that if the continuation vote is passed in favour of discontinuance, they will thereby be deemed to have disposed within their five year holding period, it is proposed that Shareholder approval will be sought at each Company's General Meeting to delay the continuation vote until 2023 and to adopt the new articles of association accordingly.
Hargreave Hale AIM VCT 1 and Hargreave Hale AIM VCT 2 have appointed Philip Hare & Associates LLP to advise on tax matters generally and, in particular, on the maintenance of VCT status. HMRC has confirmed that both of the Companies qualify as VCTs, Philip Hare & Associates LLP will assist the Investment Manager in establishing the status of investments as Qualifying Investments and monitoring these investments and will report directly to the Board. In order to continue to comply with VCT requirements, both Companies must have 70% of all net funds raised from the issue of shares invested in Qualifying Investments throughout accounting periods beginning no later than three years after the date on which those shares are issued.
As at 30 November 2016 Hargreave Hale AIM VCT 1 was 91.67% invested in Qualifying Investments. As at 30 November 2016 Hargreave Hale AIM VCT 2 was 86.22% invested in Qualifying Investments (as defined in the Income Tax Act 2007).
Full audited financial information on the Company for the accounting years ended 30 September 2014, 30 September 2015 and 30 September 2016 are available free of charge at the Company's registered office or can be downloaded at www.hargreaveaimvcts.co.uk.
The annual reports for the years ended 30 September 2014, 30 September 2015 and 30 September 2016 were audited by BDO LLP of 55 Baker Street, London W1U 7EU. All audit reports were unqualified under the Act.
The annual reports for the years ended 30 September 2014 and 30 September 2015 were prepared in accordance with UK generally accepted accounting practice (GAAP). The annual report for the year ended 30 September 2016 was prepared in accordance with Financial Reporting Standard 102. In all cases the annual reports referred to above were prepared in accordance with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies'. The annual reports contain a description of the relevant Company's financial condition, changes in financial condition and results of operation for each relevant financial year, as well as further information in relation to the Company's investments, and are being incorporated by reference and can be accessed at the following website:
Where these documents make reference to other documents, such other documents are not incorporated into and do not form part of this document. The non-incorporated parts of these annual reports and accounts are either not relevant to investors or covered elsewhere in this document.
The information indicated below is incorporated by reference into this document (excluding such other information as may be included in those documents):
| Audited financial statements for the period ended 30 September 2014 |
Audited financial statements for the period ended 30 September 2015 |
Audited financial statements for the period ended 30 September 2016 |
|
|---|---|---|---|
| Page numbers | Page numbers | Page numbers | |
| Income statements | 33 | 38 | 43 |
| Statement of changes in equity | 35-36 | 40-41 | 45 |
| Balance sheets | 34 | 39 | 44 |
| Cash flow statements | 35 | 40 | 46 |
| Accounting policies | 37-38 | 42-43 | 47-49 |
| Notes to the accounts | 37-48 | 42-52 | 47-58 |
| Independent auditor's report | 30-32 | 34-37 | 39-42 |
| Audited financial statements for the period ended 30 September 2014 |
Audited financial statements for the period ended 30 September 2015 |
Audited financial statements for the period ended 30 September 2016 |
|
|---|---|---|---|
| Page numbers | Page numbers | Page numbers | |
| Chairman's statement | 4-5 | 3-4 | 3-4 |
| Investment Manager's report | 10-11 | 10-11 | 14-15 |
This information in the annual reports for the years ended 30 September 2014 and 30 September 2015 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 (which will be prepared under Financial Reporting Standard 102) in so far as there are no material differences between the financial statements for these years prepared under these two accounting frameworks.
As at 30 September 2016, the date to which the most recent audited financial statements of the Company have been drawn up, the Company had net assets of £47.1 million or 75.93 pence per Ordinary Share.
As at the date of this document, there has been no significant change in the financial or trading position of Hargreave Hale AIM VCT 1 since 30 September 2016 (being the date on which unaudited interim financial information was last published).
Full audited financial information on the Company for the accounting years ended 28 February 2014, 28 February 2015 and 29 February 2016 and unaudited information for the half-year accounts for the six months ended 31 August 2015 and 31 August 2016 are available free of charge at the Company's registered office or can be downloaded at www.hargreaveaimvcts.co.uk.
The annual reports for the years ended 28 February 2014, 28 February 2015 and 29 February 2016 were audited by BDO LLP of 55 Baker Street, London W1U 7EU. All audit reports were unqualified under the Act.
The annual reports for the years ended 28 February 2014 and 28 February 2015 were prepared in accordance with UK generally accepted accounting practice (GAAP) The annual report for the year ended 29 February 2016 was prepared in accordance with Financial Reporting Standard 102. In all cases the annual reports referred to above were prepared in accordance with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies'. The annual reports and half-yearly accounts contain a description of the relevant Company's financial condition, changes in financial condition and results of operation for each relevant financial year, as well as further information in relation to the Company's investments, and, together with the half-yearly reports referred to, are being incorporated by reference into this document and can be accessed at the following website:
Where these documents make reference to other documents, such other documents are not
incorporated into and do not form part of this document. The non-incorporated parts of these annual and half-yearly reports and accounts are either not relevant to investors or covered elsewhere in this document.
The information indicated below is incorporated by reference into this document (excluding such other information as may be included in those documents):
| Audited financial statements for the period ended 28 February 2014 |
Audited financial statements for the period ended 28 February 2015 |
Unaudited half yearly financial statements for the six months ended 31 August 2015 |
Audited financial statements for the period ended 29 February 2016 |
Unaudited half yearly financial statements for the six months ended 31 August 2016 |
|
|---|---|---|---|---|---|
| Page numbers | Page numbers | Page numbers | Page numbers | Page numbers | |
| Income statements | 32 | 35 | 13 | 38 | 17-18 |
| Statement of changes in equity | 34-35 | 37-38 | 15-16 | 40 | 20-21 |
| Balance sheets | 33 | 36 | 14 | 39 | 19 |
| Cash flow statements | 34 | 37 | 16 | 41 | 22 |
| Accounting policies | 36-37 | 39-40 | 17-19 | 42-43 | 23-27 |
| Notes to the accounts | 36-47 | 39-49 | 17-21 | 42-52 | 23-29 |
| Independent auditor's report | 29-31 | 32-34 | n/a | 34-37 | n/a |
| Audited financial statements for the period ended 28 February 2014 |
Audited financial statements for the period ended 28 February 2015 |
Unaudited half yearly financial statements for the six months ended 31 August 2015 |
Audited financial statements for the period ended 29 February 2016 |
Unaudited half yearly financial statements for the six months ended 31 August 2016 |
|
|---|---|---|---|---|---|
| Page numbers | Page numbers | Page numbers | Page numbers | Page numbers | |
| Chairman's statement | 4-5 | 4-5 | 3 | 3-4 | 3-4 |
| Investment Manager's report | 10-11 | 10-11 | 4-5 | 10-11 | 5-7 |
This information in the annual reports for the years ended 28 February 2014 and 28 February 2015 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 (which will be prepared under Financial Reporting Standard 102) in so far as there are no material differences between the financial statements for these years prepared under these two accounting frameworks.
As at 29 February 2016, the date to which the most recent audited financial statements of the Company have been drawn up, the Company had net assets of £29.9 million or 101.18 pence per Ordinary Share. As at 31 August 2016, the date to which the most recent unaudited half yearly financial statements for the Company have been drawn, the Company had net assets of £35.7 million or 104.58 pence per Ordinary Share.
As at the date of this document, there has been no significant change in the financial or trading position of Hargreave Hale AIM VCT 2 since 31 August 2016 (being the date on which unaudited financial statements were last published).
The following paragraphs, which are intended as a general guide only and are based on current legislation and HMRC practice, summarise advice received by the Directors as to the position of the Shareholders who hold shares other than for trading purposes. Any person who is in any doubt as to his taxation position or is subject to taxation in any jurisdiction other than the United Kingdom should consult his professional advisers.
The Companies have to satisfy a number of tests to qualify as VCTs. A summary of these tests is set out below.
To qualify as a VCT, a company must be approved as such by HMRC. To obtain such approval it must:
than a VCT or a company which would, if its shares were listed, qualify as a VCT);
Conditions (i), (k), (l) and (m) do not apply to investments in certain money market securities, or shares and securities listed on a recognised stock exchange.
A Qualifying Investment consists of shares or securities first issued to the VCT (and held by it ever since) by a company satisfying certain conditions. The conditions are detailed but include that the company must be a Qualifying Company, have gross assets not exceeding £15 million immediately before and £16 million immediately after the investment, apply the money raised for the purposes of a qualifying trade within a certain time period and not be controlled by another company. In any twelve month period the company can receive no more than £5 million from VCT funds and Enterprise Investment Schemes, and any other European Stateaided risk finance source. A company may not receive a total of more than £12 million of Stateaided risk finance (£20 million for a "knowledge intensive company"). The company must have fewer than 250 full time (or equivalent) employees at the time of making the investment. VCT funds cannot be used by a Qualifying Company to fund the purchase of a trade or business, or of shares in another company.
There is also a 'no disqualifying arrangements' requirement 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, although the Boards believe that these measures are unlikely to affect the Companies.
A Qualifying Company must be unquoted (for VCT purposes this includes companies whose shares are traded on certain ISDX (formally PLUS) markets and AIM) and must carry on a qualifying trade. For this purpose certain activities are excluded (such as dealing in land or shares or providing financial services). The qualifying trade must either be carried on by, or be intended to be carried on by, the Qualifying Company or by a relevant qualifying subsidiary (see below) at the time of the issue of shares or securities to the VCT (and at all times thereafter). The company's first commercial sale must be no more than 7 years before the VCT's investment (10 years for a "knowledge intensive company") prior to the date of investment, except where previous Risk Finance State Aid was received by the company within 7 years or where a turnover test is satisfied. A Qualifying Company must have a permanent establishment in the UK. 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 be more than 50% owned.
A relevant qualifying subsidiary must be a 90% directly held subsidiary of the company invested in, its wholly owned subsidiary, or a wholly owned subsidiary of a 90% directly held subsidiary.
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, in order to facilitate the launch of a VCT, HMRC may approve a VCT notwithstanding that certain of the tests are not met at the time of application, provided HMRC is satisfied that the tests will be met within certain time limits. In particular, in the case of the tests described at (d) and (e) under the heading "Qualification as a VCT" above, approval may be given if HMRC is satisfied that these will be met throughout an accounting period of the VCT beginning no more than three years after the date on which approval takes effect.
The Directors intend to conduct the affairs of the Companies so that they satisfy the conditions for approval as VCTs and that such approval will be maintained. HMRC has granted the Companies approval under section 274 ITA as VCTs. The Companies intend to comply with section 274 ITA and have retained Philip Hare & Associates LLP to advise them on VCT taxation matters.
Approval of a VCT may be withdrawn by HMRC if the various tests set out above are not satisfied. 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.
The above is only a summary of the conditions to be satisfied for a company to be treated as a VCT.
under Section 551 of the Act;
passed to:
3.14.1 authorise the Directors to allot shares and grant rights to subscribe for shares
under Section 551 of the Act;
3.18.1 to authorise the Directors to allot shares and grant rights to subscribe for Shares under Section 551 of the Act;
3.18.2 to authorise the Directors pursuant to Section 570 of the Act to allot equity securities for cash without regards to pre-emption rights; and
| Class of shares | Nominal value | Issued (fully paid) | ||
|---|---|---|---|---|
| £ | number | |||
| Hargreave Hale AIM VCT 1 | Ordinary Shares | £0.01 | 635,686 | 63,568,645 |
| Hargreave Hale AIM VCT 2 | Ordinary Shares | £0.01 | 353,492 | 35,349,219 |
3.20 The issued fully paid share capital of the Companies immediately after the Offers have closed (assuming the Offers are fully subscribed and the Over-allotment Facility is utilised in full) will be as follows:
| Class of shares | Nominal value | Issued (fully paid)* | ||
|---|---|---|---|---|
| £ | number | |||
| Hargreave Hale AIM VCT 1 | Ordinary Shares | £0.01 | 829,210 | 82,920,986 |
| Hargreave Hale AIM VCT 2 | Ordinary Shares | £0.01 | 494,775 | 49,477,503 |
* using an Offer Price based on the NAV as at 30 November 2016
any share or loan capital of the Companies in the three years immediately preceding the date of this document.
Subject to any special terms as to voting on which any Shares may be issued, on a show of hands every member present in person (or being a corporation, present by authorised representative) shall have one vote and, on a poll, every member who is present in person or by proxy shall have one vote for every Share of which he is the holder. The Shares shall rank pari passu as to rights to attend and vote at any general meeting of the relevant Company.
4.4 Transfer of Shares
The Ordinary Shares are in registered form and will be freely transferable. All transfers of Ordinary Shares must be effected by a transfer in writing in any usual form or any other form approved by the Directors. The instrument of transfer of an Ordinary Share shall be executed by or on behalf of the transferor and, in the case of a partly paid share by or on behalf of the transferee. The Directors may refuse to register any transfer of a partly paid Share, provided that such refusal does not prevent dealings taking place on an open and proper basis and may also refuse to register any instrument of transfer unless: it is in respect of a fully paid share; it is in respect of shares on which the relevant Company does not have a lien; it is in respect of only one class of share; and the transferees do not exceed four in number.
4.5 Dividends
Each Company may in general meeting declare dividends in accordance with the respective rights of the members, provided that no dividend shall be payable in excess of the amount recommended by the Directors. The Directors may pay such interim dividends as appear to them to be justified. No dividend or other monies payable in respect of an Ordinary Share shall bear interest as against the relevant Company. There are no fixed dates on which entitlement to a dividend arises.
All dividends unclaimed for a period of twelve years after being declared or becoming due for payment shall be forfeited and shall revert to the relevant Company.
If any member or other person appearing to be interested in shares of either of the Companies is in default in supplying within 42 days (or 28 days where the shares represent at least 0.25% of its the share capital) after the date of service of a notice requiring such member or other person to supply to the relevant Company in writing all or any such information as is referred to in section 793 of the Act, the Directors may, for such period as the default shall continue, impose restrictions upon the relevant shares.
The restrictions available are the suspension of voting or other rights conferred by membership in relation to meetings of the Companies in respect of the relevant shares and additionally in the case of a shareholder representing at least 0.25% by nominal value of any class of shares of the relevant Company then in issue, the withholding of payment of any dividends on, and the restriction of transfer of, the relevant shares.
On a winding-up any surplus assets of each Company respectively will be divided amongst the holders of its Shares according to the respective numbers of Shares held by them in the relevant Company and in accordance with the provisions of the Act, subject to the rights of any shares which may be issued with special rights or privileges. The Articles of Association provide that the liquidator may, with the sanction of a resolution and any other sanction required by the Act, divide amongst the members in specie the whole or any part of the assets of the relevant Company in such manner as he may determine.
Whenever the capital of either Company is divided into different classes of shares, the rights attached to any class may (unless otherwise provided by the terms of issue of that class) be varied or abrogated either with the consent in writing of the holders of not less than three-fourths of the nominal amount of the issued shares of the class or with the sanction of a special resolution passed at a separate meeting of such holders.
Unless and until otherwise determined by either Company in General Meeting pursuant to Article 120 the number of Directors shall not be less than two nor more than ten. The continuing Directors may act notwithstanding any vacancy in their body, provided that if the number of the Directors be less than the prescribed minimum the remaining Director or Directors shall forthwith appoint an additional Director or additional Directors to make up such minimum or shall convene a General Meeting of that Company for the purpose of making such appointment.
Any Director may in writing under his hand appoint (a) any other Director, or (b) any other person who is approved by the Board of Directors as hereinafter provided to be his alternate. A Director may at any time revoke the appointment of an alternate appointed by him. Every person acting as an alternate Director shall be an officer of the Company, and shall alone be responsible to the Company for his own acts and defaults, and he shall not be deemed to be the agent of or for the Director appointing him.
Subject to the provisions of the Act, the Directors may from time to time appoint one or more of their body to be Managing Director or Joint Managing Directors of either Company or to hold such other executive office in relation to the management of the business of that Company as they may decide.
A Director of a Company may continue or become a Director or other officer, servant or member or any company promoted by that Company or in which it may be interested as a vendor shareholder, or otherwise, and no such Director shall be accountable for any remuneration or other benefits derived as director or other officer, servant or member of such company.
The Directors may from time to time appoint a President of a Company (who need not be a Director of the Company) and may determine his duties and remuneration and the period for which he is to hold office.
The Directors may from time to time provide for the management and transaction of the affairs of the Company in any specified locality, whether at home or abroad, in such manner as they think fit.
underwriting of an offer of such shares, debentures or other securities;
A Director shall also retire from office at or before the third annual general meeting following the annual general meeting at which he last retired and was re-elected. A retiring Director shall be eligible for re-election. A Director shall be capable of being appointed or re-appointed a Director despite having attained any particular age.
4.14 Borrowing powers
Subject as provided below, the Directors may exercise all the powers of each Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital.
The Directors shall restrict the borrowings of each Company and exercise all voting and
other rights or powers of control over its subsidiary undertakings (if any) so as to secure that the aggregate amount at any time outstanding in respect of money borrowed by the group, being that Company and its subsidiary undertakings for the time being (excluding intra-group borrowings), shall not without the previous sanction of an ordinary resolution of the Company exceed a sum equal to 15% of the aggregate total amount received from time to time on the subscription of shares of that Company.
At any time when either 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") the distribution of that Company's capital profits (within the meaning of section 833 of the Act) 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 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 Act, the Board may determine whether any amount received by the relevant 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 or other dealing with investments, or other capital losses, and, subject to the Act, any expenses, loss or liability (subscription therefore) 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 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 relevant Company or be regarded or treated as profits of that Company available for distribution (as defined in section 829 of the Act) or be applied in paying dividends on any shares in that 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 relevant Company or be regarded or treated as profits of the Company available for distribution (as defined by section 829 of the Act) or applied in paying dividends on any shares in the Company.
Annual general meetings shall be held at such time and place as may be determined by the Directors and within a period of six months beginning on the day following the relevant Company's accounting reference date.
The Directors may, whenever they think fit, convene a general meeting of a Company, and general meetings shall also be convened on such requisition or in default may be convened by such requisitionists as are provided by the Act. Any meeting convened under this Article by requisitionists shall be convened in the same manner as near to as possible as that in which meetings are to be convened by the Directors.
An annual general meeting shall be called by not less than twenty-one days' notice in writing, and all other general meetings of a Company shall be called by not less than fourteen days' notice in writing. The notice shall be exclusive of the day on which it is given and of the day of the meeting and shall specify the place, the day and hour of meeting, and in case of special business the general nature of such business. The notice shall be given to the members, other than those who, under the provisions of the articles or the terms of issue of the shares they hold, are not entitled to receive notice from the Company, to the Directors and to the Auditors. A notice calling an annual general meeting shall specify the meeting as such and the notice convening a meeting to pass a special resolution or an ordinary resolution as the case may be shall specify the intention to propose the resolution as such.
In every notice calling a meeting of a Company or any class of the members of a Company there shall appear with reasonable prominence a statement that a member entitled to attend and vote is entitled to appoint one or more proxies to attend and, on a poll, vote instead of him, and that a proxy need not also be a member.
If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if convened by or upon the requisition of members, shall be dissolved. In any other case it shall stand adjourned to such time and at such place as the Chairman shall appoint. At any such adjourned meeting the member or members present in person or by proxy and entitled to vote shall have power to decide upon all matters which could properly have been disposed of at the meeting from which the adjournment took place. A Company shall give not less than seven clear days' notice of any meeting adjourned for the want of a quorum and the notice shall state that the member or members present as aforesaid shall form a quorum.
The Chairman may, with the consent of the meeting (and shall, if so directed by the meeting) adjourn any meeting from time to time and from place to place. No business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.
The Directors shall put an ordinary resolution to the annual general meeting of the Company in 2021 and, if passed, to every fifth subsequent annual general meeting, proposing that the Company should continue as a Venture Capital Trust for a further five year period. If any such resolution is not passed, the Directors shall draw up proposals for the reorganisation, reconstruction or voluntary winding up of the Company for submission to the members of the Company at an extraordinary general meeting to be convened by the Directors on a date not more than 9 months after such annual general meeting. The Directors shall use all reasonable endeavours to ensure that the proposals for the reorganisation, reconstruction or voluntary winding up of the Company as are approved by special resolution are implemented as soon as is reasonably practicable after passing of such a resolution.
For the purposes of this, an ordinary resolution will not have been carried only if those members in person or by proxy who vote against such resolution hold in aggregate not less than twenty five per cent. of the issued share capital of the Company at such time entitled to attend and vote at such a meeting.
Holders of C shares are entitled to receive notice of, to attend, speak and vote at any General Meeting, pari passu, in such respect to the holders of Ordinary Shares. The holders of the Ordinary Shares and the C shares shall have the following rights to be paid dividends:
1 No C shares are in issue and no C shares will be issued pursuant to the Offer.
The capital and assets of the Company shall on a winding up or on a return of capital be applied amongst the ordinary shareholders pro rata according to the nominal capital paid up on their holdings of ordinary shares after having deducted an amount calculated by a defined conversion ratio.
CREST is a paperless settlement procedure enabling securities to be evidenced otherwise than by a certificate and transferred otherwise than by a written instrument.
6.1 As at the date of this document the interests of the Directors and their immediate families (all of which are beneficial) in the share capital of the Companies which (i) are or will be notified to the Companies in accordance with rule 3 of the Disclosure Guidance and Transparency Rules ("DTR 3") by each Director; or (ii) are interests of a connected person (within the meaning in DTR 3) of a Director which are or will be required to be disclosed under DTR 3 and the existence of which is known to or could with reasonable diligence be ascertained by that Director; are or are expected to be as follows:
| As at 13 December 2016 (being the latest practical date prior to the publication of this document) |
After the Offers have closed* |
||||
|---|---|---|---|---|---|
| Company | Director | Number of Ordinary Shares |
Percentage of issued share capital |
Number of Ordinary Shares |
Percentage of issued share capital |
| Hargreave Hale AIM VCT 1 |
Aubrey Brocklebank | 4,845 | 0.01% | 4,845 | 0.01% |
| Hargreave Hale AIM VCT 1 |
David Brock | 29,147 | 0.05% | 42,048 | 0.05% |
| Hargreave Hale AIM VCT 1 |
Oliver Bedford** | 6,003 | 0.01% | 6,003 | 0.01% |
| Hargreave Hale AIM VCT 2 |
David Hurst-Brown*** | 45,836 | 0.13% | 45,836 | 0.09% |
| Hargreave Hale AIM VCT 2 |
Philip Cammerman | 8,190 | 0.02% | 8,190 | 0.02% |
| Hargreave Hale AIM VCT 2 |
Oliver Bedford**** | 4,298 | 0.01% | 4,298 | 0.01% |
* assuming that the Maximum Subscription is achieved in relation to Ordinary Shares, taking account of the Over-allotment Facility, and that all the allotments are made on the basis of the NAV per Ordinary Share for the relevant Company as at 30 November 2016.
** Includes 3,185 Ordinary Shares held by Catherine Bedford.
*** Includes 25,435 Ordinary Shares held by Jacqueline Mary Hurst-Brown. David Hurst-Brown also holds 24,952 shares in Hargreave Hale AIM VCT 1.
**** Includes 2,295 Ordinary Shares held by Catherine Bedford.
6.2 As at 13 December 2016 (being the latest practical date prior to the publication of this document) and after the Offers have closed, the Companies are aware of the following persons who hold or will hold, directly or indirectly, voting rights representing 3% or more of the issued share capital of the Companies to which voting rights are attached (assuming that the Offers are fully subscribed):
| Company | Name | Number of Ordinary Shares |
Percentage of voting rights |
Number of Ordinary Shares* |
Percentage of voting rights of the Ordinary Shares* |
|---|---|---|---|---|---|
| Hargreave Hale AIM VCT 1 |
Hargreave Hale Nominees |
2,871,184 | 4.52% | 2,871,184 | 3.46% |
| Hargreave Hale AIM VCT 1 |
Hargreaves Lansdowne Nominees Limited |
3,210,049 | 5.05% | 3,210,049 | 3.87% |
| Hargreave Hale AIM VCT 2 |
Hargreave Hale Nominees |
2,211,320 | 6.26% | 2,211,320 | 4.47% |
| Hargreave Hale AIM VCT 2 |
Hargreaves Lansdowne Nominees Limited |
2,264,902 | 6.41% | 2,264,902 | 4.58% |
* assuming that the Maximum Subscription is achieved, taking account of the Over-allotment Facility, and that all the Shareholders listed above do not subscribe for any shares under the Offers.
| Name | Current Directorships/Partnership Interests |
Past Directorships/ Partnership Interests |
|---|---|---|
| Sir Aubrey Brocklebank | Aubrey Brocklebank & Associates Limited | Downing Distribution VCT 1 Plc |
| Grasshopper Management LLP (dissolved) | ||
| Hargreave Hale AIM VCT 1 Plc | Octopus Second AIM VCT Plc (dissolved) | |
| Puma VCT 8 Plc | Pennine AIM VCT VI Plc (dissolved) | |
| The Classic 2CV Racing Club Limited | Puma VCT Plc (dissolved) | |
| Puma VCT II Plc (dissolved) | ||
| Puma VCT III Plc (in members' voluntary liquidation) |
||
| NGS Corporation Plc | Puma VCT IV plc (in members' voluntary liquidation) |
|
| Top Ten Holdings Plc | ||
| Salt International Limited (In Liquidation) | Urban and Country Leisure Limited | |
| Downing FOUR VCT plc | Premier Fireserve Engineering Ltd (in administration) |
|
| Mast Investment Holdings Ltd (Guernsey) | Premier Fireserve Ltd (in administration) | |
| Continental Shelf 547 Limited (dissolved) | ||
| Continental Shelf 548 Limited (dissolved) | ||
| AB and A Investments Limited (dissolved) |
| The Media Vehicle Group Limited (dissolved) |
||
|---|---|---|
| Inventive Property Holdings Limited | ||
| Epiquestlive Inc | ||
| Epiquestlive UK Limited | ||
| David Hurst-Brown | Hargreave Hale AIM VCT 2 Plc | Anite Plc |
| Leadhall Bay Limited | Acuity VCT 3 Plc (in members' voluntary liquidation) |
|
| Foresight Solarand Infrastructure VCT Plc | Imagination Technologies Group Plc | |
| Zone App Limited | Keydata Income VCT 2 Plc (in members' voluntary liquidation) |
|
| Keydata Income VCT 1 Plc (in members' voluntary liquidation) |
||
| Woodham School Limited | ||
| FFastfill Plc | ||
| Oliver Bedford | Hargreave Hale AIM VCT 1 Plc | |
| Hargreave Hale AIM VCT 2 Plc | ||
| Philip Cammerman | British Smaller Companies VCT Plc | British Smaller Companies VCT 2 Plc |
| Clarendon Fund Managers Limited | Connect Yorkshire Limited | |
| Clarendon Fund Nominees Limited | ||
| Hargreave Hale AIM VCT 2 Plc | ||
| Howmac Limited | ||
| N I Venture Partners Limited | ||
| Nitech Venture Partners Limited | ||
| Pressure Technologies Plc | ||
| Evince Technology Limited | ||
| FCFM Group Limited | ||
| David Michael Brock | Elderstreet VCT Plc | Ossian Retail Group Limited (dissolved) |
| ECS Global | Puma VCT Plc (dissolved) | |
| Hargreave Hale AIM VCT 1 Plc | Puma VCT II Plc (dissolved) | |
| Puma VCT 8 Plc | Puma VCT III Plc (in members' voluntary liquidation) |
|
| Park Regis Birmingham LLP | Puma VCT IV Plc (in members' voluntary liquidation) |
|
| Leeson Limited |
The business address of all the Directors is: Accurist House, 44 Baker Street, London, W1U 7AL.
in the management or conduct of the affairs of any company;
The Companies do not have any subsidiaries.
The following are the only contracts (not being contracts entered into in the ordinary course of business) which have been entered into by the Companies in the two years immediately preceding the date of this document or which are expected to be entered into prior to Admission and which are, or may be, material or which have been entered into at any time by the Companies and which contain any provision under which either Company has any obligation or entitlement which is, or may be, material to the relevant Company at the date of this document:
9.1 Under the Offer Agreement dated on or around 14 December 2016 and made between the Companies (1), the Directors (2), the Sponsor (3), and the Investment Manager (4), the Sponsor has agreed to act as sponsor to the Offers and the Investment Manager has undertaken as agent of the Companies to use its reasonable endeavours to procure subscribers under the Offers. Under the Offer Agreement, the Companies will pay the Investment Manager a commission of 3.5% of the aggregate value of accepted applications for Ordinary Shares received pursuant to the Offers. Out of this fee, the Investment Manager will pay all other costs and expenses of or incidental to the Offers.
Under the Offer Agreement, which may be terminated by the parties in certain circumstances, the Investment Manager, the Companies and the Directors have given certain warranties and indemnities to the Sponsor. Warranty claims must be made by no later than 3 months after the second annual general meeting of the relevant Company following the closing date of the Offers at which Shareholders approve the relevant Company's accounts or by the date the relevant Company is subject to a takeover. The warranties and indemnities are in usual form for a contract of this type and the warranties are subject to limits of the lesser of (i) £10 million or (ii) the total proceeds of the Offers for the Investment Manager and in respect of the Directors one year's director fees for each Director. The Companies have also agreed to indemnify the Sponsor in respect of its role as Sponsor and under the Offer Agreement. The Offer Agreement may be terminated, inter alia, if any statement in this Prospectus is untrue, any material omission from this Prospectus arises or any breach of warranty occurs.
9.2 Under an offer agreement dated on 1 December 2015 (the "2015 Offer Agreement") and made between the Companies (1), the Directors (2), the Sponsor (3), and the Investment Manager (4), the Sponsor agreed to act as sponsor to the share offers in 2015 (the "2015 Offers") and the Investment Manager undertook as agent of the Companies to use its reasonable endeavours to procure subscribers under the 2015 Offers. Under the 2015 Offer Agreement, the Companies each paid the Investment Manager a commission of 3.5% of the aggregate value of accepted applications for Ordinary Shares received pursuant to the 2015 Offers. Out of this fee, the Investment Manager paid all other costs and expenses of or incidental to the 2015 Offers.
Under the 2015 Offer Agreement, which could be terminated by the parties in certain circumstances, the Investment Manager, the Companies and the Directors gave certain warranties and indemnities to the Sponsor. Warranty claims must be made by no later than 3 months after the second annual general meeting of the relevant Company following the closing date of the 2015 Offers at which Shareholders approve the relevant Company's accounts or by the date the relevant Company is subject to a takeover. The warranties and indemnities are in usual form for a contract of this type and the warranties are subject to limits of the lesser of (i) £10 million or (ii) the total proceeds of the 2015
Offers for the Investment Manager and in respect of the Directors one year's director fees for each Director. The Companies also agreed to indemnify the Sponsor in respect of its role as Sponsor and under the 2015 Offer Agreement. The 2015 Offer Agreement may be terminated, inter alia, if any statement in the prospectus for the 2015 Offers was untrue, any material omission from such prospectus arises or any breach of warranty occurs.
9.3 Under an offer agreement dated 2 October 2014 (the "2014 Offer Agreement") made between the Companies (1), the Directors (2), Nplus 1 Singer Advisory LLP, (3), and the Investment Manager (4), Nplus 1 Singer Advisory LLP agreed to act as sponsor to the share offers in 2014 (the "2014 Offers") and the Investment Manager undertook as agent of the Companies to use its reasonable endeavours to procure subscribers under the 2014 Offers. Under the 2014 Offer Agreement, the Companies each paid the Investment Manager a commission of 3.5% of the aggregate value of accepted applications for Ordinary Shares received pursuant to the 2014 Offers.
Out of this fee, the Investment Manager paid all other costs and expenses of or incidental to the 2014 Offers.
Under the 2014 Offer Agreement, the Investment Manager, the Companies and the Directors gave certain warranties and indemnities to Nplus 1 Singer Advisory LLP. Warranty claims must be made by no later than 3 months after the second annual general meeting of the relevant Company following the closing date of the Offers at which Shareholders approve the relevant Company's accounts or by the date the relevant Company is subject to a takeover. The warranties and indemnities are in usual form for a contract of this type and the warranties are subject to limits of the total proceeds of the 2014 Offers for the Investment Manager, and one year's director fees for each Director. The Companies also agreed to indemnify Nplus 1 Singer Advisory LLP in respect of its role as sponsor and under the 2015 Offer Agreement. The 2014 Offer Agreement may be terminated, inter alia, if any statement in the prospectus issued in relation to the 2014 Offers is untrue, any material omission from the prospectus in relation to the 2014 Offers arises or any breach of warranty occurs.
9.4 Under an offer agreement dated 31 October 2013 (the "2013 Offer Agreement") made between the Companies (1), the Directors (2), Nplus 1 Singer Advisory LLP (3), and the Investment Manager (4), Nplus 1 Singer Advisory LLP agreed to act as sponsor to the share offers in 2013 (the "2013 Offers") and the Investment Manager undertook as agent of the Companies to use its reasonable endeavours to procure subscribers under the 2013 Offers. Under the 2013 Offer Agreement, the Companies each paid the Investment Manager a commission of 3.5% of the aggregate value of accepted applications for Ordinary Shares received pursuant to the 2013 Offers.
Out of this fee, the Investment Manager paid all other costs and expenses of or incidental to the 2013 Offers.
Under the 2013 Offer Agreement, the Investment Manager, the Companies and the Directors gave certain warranties and indemnities to Nplus 1 Singer Advisory LLP. Warranty claims must be made by no later than 3 months after the second annual general meeting of the relevant Company following the closing date of the Offers at which Shareholders approve the relevant Company's accounts or by the date the relevant Company is subject to a takeover. The warranties and indemnities are in usual form for a contract of this type and the warranties are subject to limits of the total proceeds of the 2013 Offers for the Investment Manager, and one year's director fees for each Director. The Companies also agreed to indemnify Nplus 1 Singer Advisory LLP in respect of its role as sponsor and under the 2013 Offer Agreement. The 2013 Offer Agreement may be terminated, inter alia, if any statement in the prospectus issued in relation to the 2013 Offers is untrue, any material omission from the prospectus in relation to the 2013 Offers arises or any breach of warranty occurs.
9.5 An agreement (the "Hargreave Hale AIM VCT 1 Investment Management Agreement") dated 10 September 2004 (as amended) between Hargreave Hale AIM VCT 1 (1) and the Investment Manager (2) under which the Investment Manager agreed to provide discretionary investment management and advisory services to the Company in respect of its portfolio of Qualifying Investments and Non-Qualifying Investments. This was amended by a deed of variation dated 13 October 2005 in relation to the previous offer of C shares (which have since converted into Ordinary Shares).
Under the agreement, the Investment Manager received fees (exclusive of VAT) equal to 0.9% per annum of the net asset value of the Company until the termination of the HH1 Investment Management Agreement, payable quarterly in arrears. The Investment Manager is also entitled to receive the Performance Incentive Fees and reimbursement of expenses incurred in performing its obligations. In respect of investments made in companies that are not quoted on AIM, the Investment Manager is entitled to charge expenses and initial management fees to investee companies that, without the Board's consent, will not exceed 1% of the value of the total investment by the Company (and any other investor to whom the Company syndicates any part of its investment) plus, in the case of periodical fees, £10,000 per annum (plus VAT, if applicable).
In line with normal VCT practice, a performance related incentive fee will be payable to the Investment Manager. This annual performance related incentive fee will payable at the rate of 20% of any dividends paid to Shareholders in excess of 6p per Ordinary Share per annum, provided that the Net Asset Value per Ordinary Share is at least 95p. The first payment of the performance related incentive fee was payable after 30 September 2007 and would be payable provided cumulative distributions in the first three accounting periods exceeded 18p per Ordinary Share. Thereafter, a performance related incentive fee will be payable annually, provided the hurdles have been exceeded, with any cumulative shortfalls below 6p per Ordinary Share having to be made up in subsequent years before the incentive fee becomes payable. No performance related incentive fee will be payable unless the NAV per Ordinary Share is at least 95p.
The appointment may be terminated on 12 calendar months' notice by either party. No benefits are payable on termination.
between KIS and Hargreave Hale AIM VCT 1 dated 10 September 2004, notwithstanding that that agreement was terminated by reason of the appointment of the administrator. KIS and Hargreave Hale AIM VCT 1 also agreed that the Company shall, out of the £60,000 due to KIS referred to above, assume responsibility to pay the trail commissions referred to above in this paragraph on behalf of KIS, and to pay to Hargreave Hale AIM VCT 2 £20,000 due to be paid to KIS in relation to the agreement referred to in paragraph 12.12 below. The Company also agreed to assume liability for all trail commissions payable after 29 September 2010, with KIS undertaking to indemnify the Hargreave Hale AIM VCT 1 and the directors against all claims resulting from inaccuracy of information provided by KIS to the Company, with the waiver of certain obligations of KIS under the 2004 and 2005 Offer Agreements (including the giving of an indemnity provided to the Company by KIS in relation to Annual Running Costs exceeding 3.5% of the company's net asset value).
Hargreave Hale AIM VCT 2
Under the agreement, the Investment Manager received fees (exclusive of VAT) equal to 0.9% per annum of the net asset value of the Company until the termination of the Hargreave Hale AIM VCT 2 Investment Management Agreement, payable quarterly in arrears. The Investment Manager is also entitled to receive Performance Incentive Fees and reimbursement of expenses incurred in performing it obligations. In respect of investments made in companies that are not quoted on AIM, the Investment Manager is entitled to charge expenses and initial management fees to investee companies that, without the Board's consent, will not exceed 1% of the value of the total investment by the Company (and any other investor to whom the Company syndicates any part of its investment) plus, in the case of periodical fees, £10,000 per annum (plus VAT, if applicable).
In line with normal VCT practice, a performance related incentive fee will be payable to the Investment Manager. This annual performance related incentive fee will be payable at the rate of 20% of any dividends paid to Shareholders in excess of 6 pence per Ordinary Share per annum, provided that the Net Asset Value per Ordinary Share is at least 95p. The first payment of the performance related incentive fee was payable after 28 February 2010 and would be payable provided cumulative distributions in the first three accounting periods exceeded 18 pence per Ordinary Share. Thereafter, a performance related incentive fee will be payable annually, provided the hurdles have been exceeded, with any cumulative shortfalls below 6 pence per Ordinary Share having to be made up in subsequent years before the incentive fee becomes payable. No performance related incentive fee will be payable unless the NAV per Ordinary Share is at least 95p.
The appointment may be terminated on 12 calendar months' notice by either party. No benefits are payable on termination.
paragraph 9.11 above whereby that agreement was varied so that the annual management fee payable to the Investment Manager was increased to 1.5% of the net asset of the Company with effect from 28 March 2012.
Other than the agreements, deeds and shareholdings referred to in paragraphs 9.1, 9.2, 9.3, 9.4, (in the case of both Companies), 9.5, 9.6, 9.8, 9.9 and 9.10 (in the case of Hargreave Hale AIM VCT 1) and 9.10, 9.11, 9.12, 9.13, 9.14 and 9.15(in the case of Hargreave Hale AIM VCT 2), there have been no related party transactions relating to the Companies between 1 October 2013 (in the case of Hargreave Hale AIM VCT 1) and 1 March 2013 (in the case of Hargreave Hale AIM VCT 2) and the date of this document.
spreading investment risk and in accordance with their published investment policies. The Companies will also invest and manage their assets to ensure compliance with the Listing Rules, the Prospectus Rules and the VCT rules and restrictions.
13.1 Each Board is accountable to Shareholders for the governance of each Company's affairs and is committed to maintaining the highest standards of corporate governance. Accordingly, each Board has adopted the Corporate Governance Code published by the Financial Reporting Council in April 2016 (in the case of Hargreave Hale AIM VCT 1) and in September 2014 (in the case of Hargreave Hale AIM VCT 2) and reports against the principles and recommendations of this Code (the "Code"). Considering the principles detailed in the version of the Code applicable to each Company, the Boards believe that each Company as at the date of this document complies, save as disclosed below in relation to committees, with the provisions of the Code throughout the financial year (in the case of Hargreave Hale AIM VCT 1 ended 30 September 2016 (as detailed on page 32 of its Annual Report and Accounts for the period ended 30 September 2016) and in the case of Hargreave Hale AIM VCT 2 ended 29 February 2016 (as detailed on page 27 of its Annual Report and Accounts for the period ended 29 February 2016) which can both be downloaded at www.hargreaveaimvcts.co.uk. These Accounts are incorporated by reference, as set out below:
| Hargreave Hale AIM VCT 1 Audited financial statements for the period ended 30 September 2016 |
Hargreave Hale AIM VCT 2 Audited financial statements for the period ended 298 February 2016 |
|
|---|---|---|
| Page numbers | Page numbers | |
| Corporate Governance Statement: | 32-37 | 27-32 |
| Departures from the Code: | 32 | 27 |
There are no governmental, legal or arbitration proceedings (including any such
proceedings which are pending or threatened of which the Companies are aware) during the 12 months preceding the date of this document, which may have, or have had in the recent past, significant effects on either of the Companies' financial positions or profitability.
Copies of the following documents will be available for inspection during normal business
hours on any weekday (Saturdays, Sundays and public holidays excepted) at the registered office of each Company at Accurist House, 44 Baker Street, London W1U 7AL whilst the Offers remain open:
Dated: 14 December 2016
| "Act" | the Companies Act 2006 (as amended) |
|---|---|
| "Admission" | the admission of the New Ordinary Shares issued, and to be issued, pursuant to the Offers to the premium segment of the Official List and to trading on the London Stock Exchange becoming effective |
| "AIFM" | means an AIFM as defined in Regulation 4 of the AIFM Regulations |
| "AIFM Regulations 2013" | The Alternative Investment Fund Managers Regulations 2013 (SI 2013/1773) |
| "Annual Running Costs" |
means the running costs of the relevant Company and include the management fees payable to the Investment Manager (excluding any performance incentive fee), accounting and administration fees, as well as fees for directors, auditors, taxation advisers, sponsor, registrar, and the costs of communicating with shareholders; however, such costs shall exclude any VAT payable thereon (the payment of which is the responsibility of the respective Company) |
| "AIM" | the AIM Market operated by the London Stock Exchange |
| "Articles of Association" | the articles of association of each Company in force from time to time |
| "Companies" or "Funds" | Hargreave Hale AIM VCT 1 and/or Hargreave Hale AIM VCT 2 and "Company" or "Fund" means either one of them, as the context requires |
| "CREST" | the relevant system (as defined in the Regulations) operated by Euroclear |
| "Directors" or "Board" | the directors of each Company |
| "Disclosure Guidance and Transparency Rules" or "DTR" |
the Disclosure Guidance and Transparency Rules published by the FCA from time to time |
| "Equiniti" | Equiniti Limited |
| "EVCA" | the European Private Equity and Venture Capital Association |
| "FCA" | the Financial Conduct Authority in the United Kingdom and/or any successor or replacement body or bodies from time to time |
| "FSMA" | the Financial Services and Markets Act 2000, as amended |
| "General Meeting" | the general meeting of HH1 and/or HH2 (as appropriate) to be held on 12 January 2017 or any adjournment thereof) |
| "Hargreave Hale AIM VCT 1" or "HH1" |
Hargreave Hale AIM VCT 1 plc |
| "Hargreave Hale AIM VCT 2" or "HH2" |
Hargreave Hale AIM VCT 2 plc |
| "HMRC" | HM Revenue & Customs |
|---|---|
| "ISDX" | ICAP Securities and Derivatives Exchange (formally PLUS) |
| "ITA" | Income Tax Act 2007, as amended |
| "Investment Manager" or "Hargreave Hale" |
Hargreave Hale Limited, which is authorised and regulated by the FCA |
| "Investor(s)" | subscriber for New Ordinary Shares under the Offers |
| "Knowledge Intensive Company" |
a company satisfying the conditions in Section 331(A) of Part 6 ITA. |
| "Listing Rules" | the listing rules prescribed by the UK Listing Authority |
| "London Stock Exchange" | London Stock Exchange plc |
| "Marlborough Special Situations Fund" |
the Marlborough Special Situations Fund launched on 12 July 1995 being an authorised collective investment scheme as defined in FSMA |
| "Management Agreements" | the agreement dated 10 September 2004 (as amended) between Hargreave Hale AIM VCT 1 and Hargreave Hale Limited governing the management of Hargreave Hale AIM VCT 1's investments and the agreement dated 8 December 2006 (as amended) between Hargreave Hale AIM VCT 2 and Hargreave Hale Limited governing the management of Hargreave Hale AIM VCT 2's investments |
| "Maximum Subscription" | the receipt of the maximum subscription monies under the Offer, being an aggregate amount of £15,000,000 in relation to Hargreave Hale AIM VCT 1, and an aggregate amount of £15,000,000 in relation to Hargreave Hale AIM VCT 2 (including, in each case, the Over allotment Facility) |
| "Net Asset Value" or "NAV" | the value of each Company's assets and/or the relevant share pool, less its liabilities (divided by the appropriate number of shares in issue) |
| "New Ordinary Shares" | New Ordinary Shares in Hargreave Hale AIM VCT 1 and/or Hargreave Hale AIM VCT 2 issued pursuant to the Offer |
| "Non-Qualifying Investment" |
investments made by the Companies which do not qualify as Qualifying Investments |
| "Offer Agreement" | the offer agreement detailed in paragraph 9 of Part IV of this document |
| "Offer(s)" | any one or more of the offers for subscription by Hargreave Hale AIM VCT 1 and Hargreave Hale AIM VCT 2 as described in this document |
| "Offer Price" | the relevant offer price for the New Ordinary Shares in each Company as determined by the Pricing Formula |
| "Official List" | the Official List of the UK Listing Authority |
| "Ongoing Expense Ratio" | the total costs of managing and operating each Company divided by its NAV (including VAT where applicable) |
| "Over-allotment Facility" | the ability of the Directors of a Company (at their discretion), if the relevant Offer is oversubscribed, to increase the number of Shares available for subscription under that Offer to raise further amounts under the Offers of up to £5 million in the case of HH1 and £5 million in the case of HH2 |
|---|---|
| "Performance Incentive Fee" |
the fee payable to the Investment Manager, as described in paragraphs 9.5 and 9.11 of Part IV of this document |
| "Pricing Formula" | the last Net Asset Value of an existing Ordinary Share (with an appropriate adjustment for any dividends declared and not yet paid if the allotment occurs whilst the shares are classified as ex-dividend) as published by the relevant Company prior to the date of allotment divided by 0.965 to allow for issue costs of 3.5% calculated, in pence, to two decimal places |
| "Prospectus" | this document |
| "Prospectus Rules" | as defined in section 73A(4) of the Financial Services and Markets Act 2000, rules expressed to relate to transferable securities |
| "Qualifying Investment" or "Qualifying Company" |
an investment made by a venture capital trust in a trading company which comprises a qualifying holding under Chapter 4 of Part 6 ITA |
| "Regulations" | the Uncertificated Securities Regulations 2001 (S.I. 2001/3755) |
| "Risk Finance State Aid" | State aid received by a company as defined in Section 280B (4) of ITA |
| "Risk Finance Guidelines" | The guidelines on State aid to promote risk finance investments published by the European Commission |
| "Shareholder" | a holder of Shares |
| "Share(s)" | shares in the capital of Hargreave Hale AIM VCT 1 and/or Hargreave Hale AIM VCT 2 |
| "Sponsor" | Howard Kennedy Corporate Services LLP, which is authorised and regulated by the FCA and is a member of the London Stock Exchange |
| "Subscription" | means the amount in pounds sterling that the Investor has subscribed for in Shares |
| "UK Listing Authority" | the Financial Conduct Authority acting in its capacity as the competent authority for the purposes of Part VI of the Financial Markets and Services Act 2000 |
| "VCT" or "Venture Capital Trust" |
venture capital trust as defined in section 259 ITA |
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