Prospectus • Sep 29, 2011
Prospectus
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Issue of Consideration Shares in connection with the scheme of reconstruction of Amati VCT 2 Plc,
Offers for Subscription to raise up to £30 million and
allocation of up to £2 million of New Shares to a Dividend Reinvestment Scheme
If you are in any doubt as to the action to be taken, you should immediately consult your bank manager, stockbroker, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000.
If you have sold or otherwise transferred all of your shares in ViCTory VCT PLC ("the Company"), you should send this document, as soon as possible, to the purchaser, transferee, stockbroker, independent financial adviser or other agent through whom the sale or transfer was effected for delivery to the purchaser or transferee.
This document, which comprises a prospectus relating to the Company dated 28 September 2011, has been prepared in accordance with the prospectus rules made under Part VI of the Financial Services and Markets Act 2000, and has been approved for publication by the Financial Services Authority as a prospectus under the prospectus rules.
The Company, the Directors and the Proposed Directors, whose names appear on page 14 of this document, accept responsibility for the information contained herein. To the best of the knowledge of the Company, the Directors and the Proposed Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.
Persons receiving this document should note that Howard Kennedy Corporate Services LLP, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as sponsor for the Company and no-one else and will not be responsible to any other person for providing the protections afforded to customers of Howard Kennedy Corporate Services LLP (subject to the responsibilities and liabilities imposed by FSMA and the regulatory regime established thereunder) or providing advice in connection with any matters referred to herein.
(Registered in England and Wales with registered number 04138683)
Sponsor Howard Kennedy Corporate Services LLP
Manager Amati Global Investors Limited
The Shares in issue at the date of this document are listed on the premium segment of the Official List of the UK Listing Authority and traded on the London Stock Exchange's main market for listed securities. Application has been made to the UK Listing Authority for all of the New Shares to be listed on the premium segment of the Official List and application will be made to the London Stock Exchange for the New Shares to be admitted to trading on its main market for listed securities. Application has been made to the UKLA and to the London Stock Exchange for an amendment to the listing and trading line of New Shares to reflect the Share Reconstruction. It is expected that such admission will become effective and that trading will commence in the New Shares, in respect of the Scheme, by 9 November 2011 and, in respect of the Share Offers, within 2 Business Days of an allotment of Offer Shares.
The Consideration Shares to be issued pursuant to the Scheme and the Offer Shares will not be registered under the United States Securities Act 1933 or the United States Investment Company Act 1990. The attention of persons receiving this document is drawn to the risk factors on pages 7 to 9 of this document. An investment in the Company is only suitable for investors who are capable of evaluating the risks and merits of such an investment and who have sufficient resources to bear any loss which might arise.
| SUMMARY | 3 | |
|---|---|---|
| RISK FACTORS | 7 | |
| FORWARD LOOKING STATEMENTS | 10 | |
| EXPECTED TIMETABLES | 11 | |
| SHARE OFFER STATISTICS | 13 | |
| DIRECTORS AND ADVISERS | 14 | |
| DEFINITIONS | 16 | |
| PART I | PROPOSED MERGER OF THE COMPANY AND AMATI VCT 2 AND THE SHARE OFFERS |
21 |
| PART II | INFORMATION ON THE COMPANY | 30 |
| PART III | FINANCIAL INFORMATION ON THE COMPANY AND AMATI VCT 2 | 39 |
| PART IV | PRO FORMA FINANCIAL INFORMATION | 41 |
| PART V | INVESTMENT PORTFOLIO AND PRINCIPAL INVESTMENTS OF THE COMPANY AND AMATI VCT 2 |
45 |
| PART VI | THE SHARE OFFERS AND THE ENHANCED SHARE BUY BACK AND REINVESTMENT FACILITY |
53 |
| PART VII | TAX POSITION OF SHAREHOLDERS | 57 |
| PART VIII | TAX POSITION OF THE COMPANY | 59 |
| PART IX | ADDITIONAL INFORMATION | 61 |
| PART X | TERMS AND CONDITIONS OF THE DIVIDEND REINVESTMENT SCHEME | 81 |
| PART XI | TERMS AND CONDITIONS OF THE SHARE OFFERS | 85 |
| PART XII | TERMS AND CONDITIONS OF THE ENHANCED SHARE BUY BACK AND REINVESTMENT FACILITY |
90 |
| FREQUENTLY ASKED QUESTIONS | 94 | |
| NOTES ON HOW TO COMPLETE THE OFFER SUBSCRIPTION FORM | 97 | |
| OFFER SUBSCRIPTION FORM | 99 |
This summary outlines the matters covered in this Prospectus. It should be read as an introduction to this Prospectus of the Company dated 28 September 2011. Any decision to invest in the New Shares should be based on consideration of the Prospectus as a whole. Where a claim relating to the information contained in this Prospectus is brought before a court, the claimant investor might, under the national legislation of the EEA States, have to bear the costs of translating this Prospectus before the legal proceedings are initiated. Civil liability attaches to those persons who are responsible for this summary including any translation of the summary if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the Prospectus.
The Company was established as a venture capital trust with the name Singer & Friedlander AIM 3 VCT plc in January 2001, and was subsequently merged with two other venture capital trusts managed by Singer & Friedlander Investment Management Limited – Singer & Friedlander AIM VCT plc and Singer & Friedlander AIM 2 VCT plc - in 2006. The Company was renamed ViCTory VCT PLC on 16 June 2009 and Amati Global Investors Limited was appointed investment manager on 22 March 2010.
The Company invests mainly in a portfolio of companies whose shares are traded on AIM, with its remaining assets invested in a portfolio of small and mid cap companies listed on the London Stock Exchange's main market, unquoted holdings and bank deposits. As at 22 September 2011, the Company's unaudited NAV was 41.78p per Share. By 18 October 2011, the Company will have paid a total of 12.75p per Share in dividends since launch.
The Company is managed by Amati Global Investors Limited (the "Manager"), an independent fund management business ultimately owned by its staff. On 22 March 2010, when the Manager was appointed investment manager to ViCTory, the Company had net assets of approximately £18 million.
On 11 February 2011, the Manager was appointed investment manager to Invesco Perpetual AIM VCT plc, which was subsequently renamed Amati VCT 2 Plc ("Amati VCT 2").
As announced on 7 July 2011, the Board and the Amati VCT 2 Board have been in discussions with a view to a merger, believing that a merger is in the best interests of both companies' shareholders. Regulations in force since 2004 have permitted VCTs to merge without shareholders losing their VCT tax relief.
The Board also believes that the Merger provides the Company with a suitable opportunity to undertake the Share Offers to raise up to £30 million and to introduce an Enhanced Share Buy Back and Reinvestment Facility for Shareholders who wish to use the proceeds from selling Shares in the Company in order to apply for Offer Shares under the Share Offers.
The Share Offers effectively mark a re-launch of the Company, and to reflect this the Directors are proposing to reconstruct the share capital of the Company in order to re-base the Net Asset Value to approximately 100p per Share to make it easier for Shareholders to monitor the progress of the Company from that point on.
The Board and the Amati VCT 2 Board believe that there are a number of advantages to both sets of shareholders of merging the companies, namely:
Both companies are managed by Amati Global Investors using the same process and approach to portfolio construction with broadly the same investment policies.
Accordingly, your Board has agreed with the Amati VCT 2 Board to merge the companies on a basis reflecting their respective net assets and on the terms set out in this Prospectus.
In addition to the Merger, the Company wishes to raise additional funds.
The Directors believe the Share Offers are attractive because:
The Scheme provides for Amati VCT 2 to be placed into members' voluntary liquidation and for all of its assets and liabilities to be transferred to the Company in consideration for Consideration Shares being issued directly to the shareholders of Amati VCT 2, such number of Consideration Shares being determined by reference to the adjusted relative net assets of the Company and Amati VCT 2. Once the Scheme is effected, the listing of Amati VCT 2 Shares will be cancelled and Amati VCT 2 will be wound up.
The number of Consideration Shares to be issued to the Amati VCT 2 Shareholders will be calculated by multiplying the number of Amati VCT 2 Shares in issue by the Merger Ratio, this being the Amati VCT 2 Roll-Over Value divided by the ViCTory Merger Value. Such Consideration Shares will be issued to Amati VCT 2 Shareholders on the register of members on the Record Date.
The holdings of dissenting Amati VCT 2 Shareholders will be purchased for cash by the Liquidators of Amati VCT 2 at the ʻbreak value' which will be an estimate of the amount a shareholder of Amati VCT 2 would receive in an ordinary winding-up of Amati VCT 2 if all its assets had to be realised. The break value is expected to be significantly below the estimated Amati VCT 2 Roll-Over Value. If Amati VCT 2 Shareholders holding over 5 per cent. of the number of Amati VCT 2 Shares in issue elect not to participate in the Merger, then it will not proceed. If the level of dissent is less than 5 per cent. then the Merger will proceed.
Subject to Shareholder approval, the Board proposes that the current investment policy is amended to allow the Manager to seek to reduce market risk in the portfolio through the use of exchange traded futures and options on index futures. The Directors believe that this policy will allow a useful additional risk management capability to be introduced, which the Manager has experience of using for Amati VCT plc.
The Manager provides investment management services to the Company (and provides or procures the provision of administration and company secretarial services) and receives a fixed management fee of 1.75 per cent. per annum of net assets, and an index linked fee of £65,000 per annum for the provision of administration and company secretarial services. In line with VCT industry practice, the Manager also receives a performance related fee on the achievement of certain performance criteria.
These investment management arrangements will be unchanged following completion of the Merger (with the exception of a technical amendment to the IMA to take into account the issue of Consideration Shares pursuant to the Scheme).
If the Scheme takes effect, the Company and the Manager have agreed to introduce a cap on the annual running costs of 3.5 per cent. of the Company's net assets, with any excess being met by the Manager by way of a reduction in future management fees.
Irrespective of whether the Scheme proceeds, the Company intends to reconstruct its share capital so that the NAV per share of the New Shares (valued as at the Calculation Date) will be approximately 100p.
The Board intends to target annual dividend payments totalling 5 to 6 per cent. of the Company's audited year end NAV. However, no profit forecast is to be inferred or implied from this statement.
The Company wishes to ensure that there is liquidity in the Shares. It is proposed that, following the Merger, the Enlarged Company will buy back shares offered for sale initially at around a 15 per cent. discount to NAV per Share, a lower discount than has been the case for the last few years, with a view to reducing the discount to 10 per cent. by the end of 2013. The making and timing of any share buy backs will remain at the absolute discretion of the Board.
The Company intends to create a dividend reinvestment scheme, giving Shareholders the option of reinvesting their dividends in New Shares.
A resolution is to be proposed at the General Meeting that, subject to the Scheme becoming effective, the name of the Company is changed to "Amati VCT 2 plc".
Following the completion of the Merger (and assuming that no funds are raised under the Share Offers), it is anticipated that the annual running costs - including management and administration fees - for the Company (anticipated to be £537,000 for the next full financial year) and Amati VCT 2 (anticipated to be £465,000 for the next full financial year) will be reduced by approximately £219,000, an annual saving of approximately 22 per cent. against the total running costs of these companies.
The total cost of the Merger is anticipated to be £212,000.
The Company has today launched the Share Offers which seek to raise up to £30 million. The 2011/12 Offer in respect of the tax year ending 5 April 2012 will close for subscriptions at 5.00 pm on 5 April 2012. The 2012/13 Offer in respect of the tax year ending 5 April 2013 will open on 6 April 2012 and close at 5.00 pm on 10 September 2012 unless extended by the Directors (but not beyond 27 September 2012). The Share Offers are not conditional on the Merger becoming effective.
Commission is payable by the Company to intermediaries, where applicable, being either:
The Company also proposes to implement an Enhanced Share Buy Back and Reinvestment Facility.
To allow the Share Offers to be made, it is proposed that the Articles of the Company be amended so that the continuation resolution to be put to Shareholders at the annual general meeting of the Company in 2013 is instead put to Shareholders at the annual general meeting in 2018 (and at each annual general meeting of the Company at five year intervals thereafter). Other amendments to the Articles are being made to facilitate the Share Reconstruction and to further update the Articles as a result of the implementation of the Companies Act 2006 and other legislation.
An investment in the Company is subject to a number of risks which could materially and adversely affect its value and a summary of the material risks is set out below:
Shareholders and prospective Shareholders should consider carefully the following risk factors in addition to the other information presented in this document. If any of the risks described below were to occur it could have a material effect on the Company's business, financial condition or results of operations. The risks and uncertainties described below are not the only ones the Company, the Board or Shareholders will face. Additional risks not currently known to the Company or the Board, or that the Company or the Board currently believe are not material, may also adversely affect the Company's business, financial condition or results of operations. The value of the New Shares could decline due to any of the risk factors described below and Shareholders could lose part or all of their investment. Shareholders and prospective Shareholders should consult an independent financial adviser authorised under the Financial Services and Markets Act 2000. References to the Company should be taken as including the Enlarged Company, if appropriate.
The Directors consider the following to be all the material known risks for potential Investors in the Company, but the risks listed do not necessarily comprise all those associated with an investment in the Company and are not set out in any particular order of priority:
• Completion of the Proposals is dependent upon a number of conditions precedent being fulfilled, including the approval of Shareholders. If the Scheme does not proceed the Company will continue to be operated and managed as hitherto and the cost savings and other benefits that could result from the Proposals will not be achieved. In such a case the Company will also have incurred professional and other fees including, in certain circumstances, those of Amati VCT 2 - in relation to the aborted transaction. The Scheme is not conditional on the Share Offers proceeding, or vice versa. The Share Offers and the Scheme are not conditional on the Share Reconstruction being approved, or vice versa.
AIM is a market designed primarily for emerging or smaller companies. Such companies may, in comparison to companies quoted on the Official List, have less mature businesses, a more restricted depth of management and a higher risk profile. The rules of the AIM market are, in relation to admission and continuing obligations, less demanding than those of the Official List.
Investments in AIM-traded companies and unquoted investments can involve a higher degree of company specific risk than investments in companies listed on the Official List. In particular, smaller companies often have limited product lines, markets or financial resources and may be dependent for their management on a smaller number of key individuals. In addition, the market for stock in smaller companies is normally less liquid than that for stock in larger companies, bringing with it potential difficulties in acquiring, valuing and disposing of such stock. Potential difficulties in dealing in illiquid stocks may be increased where orders for the Company are aggregated with other clients of the Manager.
The tax rules, or their interpretation, in relation to an investment in the Company and/or the rates of tax may change during the life of the Company and may apply retrospectively. In particular, the levels and bases of reliefs from taxation may change and could apply retrospectively. The tax reliefs referred to in this document are those currently available and their value depends on the individual circumstances of Investors.
If a Shareholder disposes of their Offer Shares within five years of issue, they will be subject to clawback by HMRC of any income tax reliefs originally claimed.
• Prospective investors should be aware that the Company may have a certain level of gearing and, whilst the use of borrowings should enhance the net asset value of the Shares where the value of the Company's underlying assets is rising, it will have the opposite effect where the underlying assets' value is falling. The use of borrowings also creates the risk that the borrower will be unable to service the interest payments or comply with the other requirements of the loan in the longer term rendering it repayable and the risk that borrowings will not be able to be refinanced in the longer term or that the terms of such refinancing may not be as favourable as the existing terms of borrowing. Increases in long term interest rates and levels of amortisation imposed by the Company's bankers may also have an adverse effect on the Company's ability to pay dividends to Shareholders.
Shareholders and potential investors should not place undue reliance on forward-looking statements. This Prospectus includes statements that are (or may be deemed to be) "forward-looking statements", which can be identified by the use of forward-looking terminology including terms such as "believes", "continues", "expects", "intends", "may", "will", "would", "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts. Forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forwardlooking statements contained in this Prospectus, based on past trends or activities, should not be taken as a representation that such trends or activities will continue in the future, These statements will be updated as and when required by the Prospectus Rules, the Listing Rules and the DTR, as appropriate.
| Latest time for receipt of forms of proxy for the General Meeting | 2.00 pm on 29 October 2011 |
|---|---|
| General Meeting | 2.00 pm on 31 October 2011 |
| Calculation Date | after 5.00 pm on 7 November 2011 |
| Effective Date for the transfer of the assets and liabilities of Amati VCT 2 to the Company and the issue of Consideration Shares to Amati VCT 2 Shareholders |
8 November 2011 |
| Announcement of the results of the Scheme | 8 November 2011 |
| Admission of and dealings in the New Shares (in respect of the Scheme) to commence |
9 November 2011 |
| CREST accounts credited with the New Shares (in respect of the Scheme) |
9 November 2011 |
| Effective date of the Share Reconstruction | after close of business on 9 November 2011 |
| Amendment to the listing of the Shares arising from the Share Reconstruction |
10 November 2011 |
| CREST accounts credited with the New Shares (in respect of the Share Reconstruction) |
10 November 2011 |
| Certificates for the New Shares dispatched | 16 November 2011 |
| (Dates subject to variation if any General Meeting is adjourned) |
| Date from which it is advised that dealings in Amati VCT 2 Shares should only be for cash settlement and immediate delivery of documents of title |
29 October 2011 |
|---|---|
| Latest time for receipt of forms of proxy for the Amati VCT 2 First General Meeting |
2.30 pm on 29 October 2011 |
| Amati VCT 2 First General Meeting | 2.30 pm on 31 October 2011 |
| Latest time for receipt of forms of proxy for the Amati VCT 2 Second General |
2.30 pm on 6 November 2011 |
| Record Date for Amati VCT 2 Shareholders' entitlements under the Scheme | 7 November 2011 |
| Amati VCT 2 Register of Members closed | 7 November 2011 |
| Calculation Date | after 5.00 pm on 7 November 2011 |
| Dealings in Amati VCT 2 Shares suspended | 7:30 am on 8 November 2011 |
| Amati VCT 2 Second General Meeting | 2.30 pm on 8 November 2011 |
| Effective Date for the transfer of the assets and liabilities of Amati VCT 2 to the Company |
8 November 2011 |
| Announcement of the results of the Scheme | 8 November 2011 |
| Cancellation of the Amati VCT 2 Shares' listing | 8.00 am on 9 November 2011 |
| (Dates subject to variation if any General Meeting is adjourned) |
2011/2012 Offer opens 29 September 2011 Closing date for 2011/12 Offer 5.00pm on Thursday 5 April 2012 2012/2013 Offer opens 6 April 2012 Closing date for applications under the Enhanced Share 5.00 pm on 5 September 2012 Buy Back and Reinvestment Facility Closing date for 2012/13 Offer unless extended 5.00 pm on 10 September 2012 by the Directors (but not beyond 27 September 2012) Allotments of Offer Shares monthly (or at other times at the Manager's discretion) Dealings in Offer Shares commence second Business Day following allotment CREST accounts credited within five Business Days of allotment Certificates for the Offer Shares dispatched within ten Business Days of allotment
Notes:
Offer Price per Offer Share The price at which Offer Shares will be allotted will be calculated on the basis of the following formula (the "Pricing Formula"): The most recent published Net Asset Value per New Share prior to the allotment (with an appropriate adjustment for any performance fee potentially payable based on the Net Asset Value at that date) divided by 0.95 to allow for issue costs of 5 per cent. calculated, in pence, rounded up to two decimal places. No allotments will be made more than four Business Days after the publication of a Net Asset Value per New Share. Maximum gross proceeds of the Share Offers £30 million Minimum subscription per investor under £2,000* each of the Share Offers
* In relation to the Enhanced Share Buy Back and Reinvestment Facility, if an existing Shareholder applies for his/her entire shareholding in the Company to be offered through that facility, and his/her application is successful, then no minimum subscription under either of the Share Offers will apply.
Commission payable by the Company to intermediaries, where applicable, being either:
In relation to Offer Shares issued under the Enhanced Share Buy Back and Reinvestment Facility, no initial commission will be payable to intermediaries and the Company will rebate 3 per cent. of the subscription value through an allocation of additional Offer Shares to Shareholders at the Offer Price (with the number of Offer Shares being rounded down to the nearest whole number). An annual trail commission of 0.375 per cent. will still, however, be payable by the Manager to the Shareholder's intermediary (limited to five years, payable by the Manager).
Notes:
The commission referred to above assumes that the Directors have not exercised their discretion as referred to in the paragraph headed "Commissions" on page 55 of this document.
| Directors (all Non-Executive) | Christopher John Leon Moorsom (Chairman) James Daryl Hambro (Retiring) Michael Sedley Killingley David Michael Page (Retiring) |
|---|---|
| Proposed Directors (both Non-Executive) | Julian Ralph Avery Christopher Anthony James Macdonald |
| Principal Place of Business and Registered Office | 27/28 Eastcastle Street London W1W 8DH |
| [email protected] | |
| Telephone | 0131 202 1895 |
| Website | www.amatiglobal.com/vict.php |
| Company Number | 04138683 |
| Company Secretary, Receiving Agent and Registrars The City Partnership (UK) Limited | Thistle House 21 Thistle Street Edinburgh EH2 1DF |
| Investment Manager and Administrator | Amati Global Investors Limited 76 George Street Edinburgh Midlothian EH2 3BU |
| Sponsor | Howard Kennedy Corporate Services LLP 19 Cavendish Square London W1A 2AW |
| Solicitors | Howard Kennedy LLP 19 Cavendish Square London W1A 2AW |
| VCT Tax Advisers | PricewaterhouseCoopers LLP 1 Embankment Place London WC2N 6RH |
| Independent Auditors | PKF (UK) LLP Farringdon Place 20 Farringdon Road London EC1M 3AP |
Reporting Accountants Lubbock Fine
Russell Bedford House City Forum 250 City Road London EC1V 2QQ
Bankers The Bank of New York Mellon SA/NV London Branch 160 Queen Victoria Street London EC4V 4LA
| "2011/2012 Offer" | the offer for subscription of Offer Shares in relation to the 2011/2012 tax year, as described in and on the terms set out in this document |
|---|---|
| "2012/2013 Offer" | the offer for subscription of Offer Shares in relation to the 2012/2013 tax year, as described in and on the terms set out in this document |
| "Admission" | the dates on which (i) the Consideration Shares are allotted pursuant to the Scheme, (ii) the Offer Shares are allotted pursuant to the Share Offers, or (iii) New Shares are allotted pursuant to the DRIS (as applicable) are listed on premium segment of the Official List of the UK Listing Authority |
| "Act" or "CA 2006" | the Companies Act 2006, as amended |
| "AIM" | AIM, the market of that name operated by the London Stock Exchange |
| "Amati VCT" | Amati VCT plc, a public limited company registered in Scotland under number SC278722, and whose registered office is at c/o The City Partnership (UK) Limited, Thistle House, 21 Thistle Street, Edinburgh, EH2 1DF |
| "Amati VCT 2" | Amati VCT 2 plc, a public limited company registered in England and Wales under number 05121438, and whose registered office is at 27/28 Eastcastle Street, London, W1W 8DH |
| "Amati VCT 2 Board" | the board of directors of Amati VCT 2 |
| "Amati VCT 2 Circular" | the circular to Amati VCT 2 Shareholders dated 28 September 2011 |
| "Amati VCT 2 First General Meeting" | the first general meeting of Amati VCT 2 to be held on 31 October 2011(or any adjournment thereof) |
| "Amati VCT 2 Meetings" | the Amati VCT 2 First General Meeting and the Amati VCT 2 Second General Meeting |
| "Amati VCT 2 Roll Over Value" | the value of a Amati VCT 2 Share calculated in accordance with Part I of this document |
| "Amati VCT 2 Second General Meeting" | the second general meeting of Amati VCT 2 expected to be held on 8 November 2011 (or any adjournment thereof) |
| "Amati VCT 2 Shareholder" | a holder of Amati VCT 2 Shares |
| "Amati VCT 2 Shares" | ordinary shares of 10p each in the capital of Amati VCT 2 |
| "Applicant" | a Shareholder participating in the Dividend Reinvestment Scheme or, where a Shareholder holds Shares as nominee, the person, being the beneficial owner of the Shares registered in the name of that Shareholder, participating in the Dividend Reinvestment Scheme |
| "Articles" | the articles of association of the Company, as amended from time to time |
| "Board" or "Directors" | the board of directors of the Company |
| "Business Days" | any day (other than a Saturday) on which clearing banks are open for normal banking business in sterling |
| "Calculation Date" | the date on which the Amati VCT 2 Roll-Over Value and the ViCTory Merger Value will be calculated, expected to be 7 November 2011 |
| "the Company" or "ViCTory" | ViCTory VCT PLC, a public limited company registered in England and Wales under number 04138683, whose registered office is at 27/28 Eastcastle Street, London, W1W 8DH |
| "Consideration Shares" | the Shares to be issued by the Company to Amati VCT 2 Shareholders pursuant to the Scheme (and each a "Consideration Share") |
| "Deed of Variation" | the deed of variation as described in paragraph 5.1.6 of Part IX of this document |
|---|---|
| "Deferred Shares" | the deferred shares of 5p each arising from the Share Reconstruction |
| "Disclosure Rules & Transparency Rules" or "DTR" |
the disclosure rules and transparency rules of the FSA |
| "Dividend Reinvestment Scheme" or "DRIS" |
the dividend reinvestment scheme proposed to be established on the DRIS Terms and Conditions |
| "DRIS Terms and Conditions" | the terms and conditions relating to the Dividend Reinvestment Scheme set out in Part X of this document |
| "EEA States" | the member states of the European Economic Area |
| "Effective Date" | the date on which the Scheme will be completed, expected to be 8 November 2011 |
| "Enhanced Share Buy Back and Reinvestment Facility" or "ESBBF" |
the offers by Shareholders to sell Shares back to the Company at a 1 per cent. discount to the most recently published Net Asset Value per Share, prior to the allotment, where Shareholders wish to use the proceeds from the sale to make a new subscription for Offer Shares, on which a rebate of 3 per cent. of the amounts subscribed will be given in the form of additional Offer Shares (with the number of Offer Shares being rounded down to the nearest whole number) |
| "Enlarged Company" | the Company, following implementation of the Scheme |
| "ESBBF Application Forms" | the application forms entitled "Enhanced Share Buy Back and Reinvestment Facility Request Form" (yellow form) and "Application Form for Offer Shares under the Enhanced Share Buy Back and Reinvestment Facility" (blue form) for use in respect of the ESBBF |
| "FSA" | the Financial Services Authority |
| "FSMA" | the Financial Services and Markets Act 2000, as amended |
| "General Meeting" | the general meeting of the Company convened for 31 October 2011 (or any adjournment thereof) |
| "HMRC" | Her Majesty's Revenue & Customs |
| "Howard Kennedy Corporate Services LLP" |
Howard Kennedy Corporate Services LLP, which is authorised and regulated by the Financial Services Authority and is a UKLA registered sponsor |
| "IA 1986" | Insolvency Act 1986, as amended |
| "ITA 2007" | Income Tax Act 2007, as amended |
| "Liquidators" | William Duncan and Sarah Louise Burge of RSM Tenon Limited, Unit 1, Calder Close, Calder Pak, Wakefield WF4 3BA |
| "Listing Rules" | the listing rules of the UKLA |
| "London Stock Exchange" | London Stock Exchange plc |
| "the Manager" or "Amati Global Investors" |
Amati Global Investors Limited, the investment manager to the Company, being a private limited company registered in Scotland under number SC199908 and whose registered office is at 76 George Street, Edinburgh, Midlothian, EH2 3BU |
| "Meetings" | the General Meeting and the Amati VCT 2 Meetings (and each a "Meeting") |
| "Memorandum" | the memorandum of association of the Company |
| "Merger Ratio" | the Amati VCT 2 Roll-Over Value divided by the ViCTory Merger Value |
| "Merger Regulations" | Venture Capital Trusts (Winding-up and Mergers) (Tax) Regulations 2004 |
|---|---|
| "Merger Values" | the Amati VCT 2 Roll Over Value and the ViCTory Merger Value |
| "NAV" | net asset value |
| "NAV Total Return" | the theoretical total return to shareholders of a VCT on a per share basis, reflecting the change in NAV per share assuming that net dividends paid to shareholders were reinvested in the VCT at the NAV prevailing on the ex-dividend date |
| "New Shares" | the Shares arising as a result of the Share Reconstruction and/or to be issued pursuant to the Scheme and/or the Share Offers and/or the Dividend Reinvestment Scheme (and each a "New Share") |
| "Non-Qualifying Holding" | shares in, or securities held by a VCT in a company which is not a Qualifying Holding |
| "Non-Qualifying Investment" | means an investment which is not a Qualifying Investment |
| "Offer Shares" | the Shares to be issued by the Company pursuant to the Share Offers |
| "Offer Subscription Form" | the subscription form for use in respect of the Share Offers set out at the end of this document |
| "Official List" | the official list of the UKLA |
| "Performance Incentive Fees" | fees payable to the Investment Manager in the event that certain target returns are achieved, as further described in Part II under the section headed "Investment Management Fees" and in paragraph 5.1.3 of Part IX |
| "PLUS" | PLUS Markets plc, a recognised investment exchange |
| "Pricing Formula" | the most recent published Net Asset Value of a New Share prior to the allotment (with an appropriate adjustment for any performance fee potentially payable based on the Net Asset Value at that date) divided by 0.95 to allow for issue costs of 5 per cent. calculated, in pence, rounded up to two decimal places |
| "Proposals" | the proposals to implement the Share Reconstruction and the Merger and pass the Resolutions |
| "Proposed Directors" | Julian Ralph Avery and Christopher Anthony James Macdonald |
| "Prospectus" | this document, being the prospectus issued by the Company dated 28 September 2011 |
| "Prospectus Rules" | the prospectus rules of the FSA |
| "Qualifying Company" | a company satisfying the requirements of Chapter 4 of Part 6 of ITA 2007 |
| "Qualifying Investment" | an investment by a VCT in shares in, or securities of, a Qualifying Company |
| "Qualifying Holding" | shares in, or securities of a Qualifying Company held by a VCT which meets the requirements described in Chapter 4 of Part 6 of ITA |
| "Qualifying Limit" | the investor's subscription limit of £200,000 per tax year |
| "Qualifying Subscriber" | an individual, aged 18 or over, who subscribes for Offer Shares within the Qualifying Limit |
| "quoted" | quoted on the London stock Exchange's market for listed securities, AIM or PLUS |
| "Receiving Agent" | The City Partnership (UK) Limited, Thistle House 21 Thistle Street Edinburgh EH2 1DF |
|
|---|---|---|
| "Record Date" | the record date with regard to which Amati VCT 2 Shareholders' entitlements will be allocated pursuant to the Scheme, expected to be 7 November 2011 |
|
| "Reinvestment Day" | a day on which any interim or final dividend on Shares is credited to the account of the Scheme Administrator on behalf of any of the Applicants or, if such day is not a dealing day on the London Stock Exchange, the next dealing day thereafter |
|
| "Resolutions" | the resolutions to be proposed at the General Meeting | |
| "Scheme" or "Merger" | the proposed merger of the Company with Amati VCT 2 by means of placing Amati VCT 2 into members' voluntary liquidation pursuant to Section 110 of IA 1986 and the acquisition by the Company of all of Amati VCT 2's assets and liabilities in consideration for Consideration Shares as set out in Part I of this document |
|
| "Scheme Administrator" or "Scheme Manager" |
The City Partnership (UK) Limited, or such other person or persons who may from time to time be appointed by the Company to administer the Dividend Reinvestment Scheme on its behalf |
|
| "Share Offers" | together, the 2011/2012 Offer and the 2012/2013 Offer on the terms described in this document |
|
| "Share Reconstruction" | the proposed reconstruction of the Shares set out on page 28 | |
| "Share Reconstruction Date" | the date and time at which the Share Reconstruction shall take effect, being |
|
| (i) if the Scheme takes effect in accordance with the provisions set out in Part I of this document, after the close of business on the day on which the New Shares in connection with the Scheme are admitted to trading; or |
||
| (ii) otherwise after close of business on the date of the Amati VCT 2 Second General Meeting (or such later date as the Directors may specify). |
||
| "Shareholders" | a holder of Shares (and each a "Shareholder") | |
| "Shares" or "ViCTory Shares" | prior to the Share Reconstruction, ordinary shares of 5p each in the capital of the Company and, following the Share Reconstruction, the New Shares (and each a "Share") |
|
| "Statutes" | means every statute (including any orders, regulations or other subordinate legislation made under it) from time to time in force concerning companies insofar as it applies to the Company |
|
| "TCGA 1992" | Taxation of Chargeable Gains Act 1992, as amended | |
| "Transfer Agreement" | the agreement between the Company and Amati VCT 2 (acting through the Liquidators) for the transfer of all of the assets and liabilities of Amati VCT 2 by the Liquidators to the Company pursuant to the Scheme |
|
| "UK" | the United Kingdom | |
| "UK Corporate Governance Code" | the UK Corporate Governance Code published by the Financial Reporting Council in June 2010 |
|
| "UKLA" or "UK Listing Authority" | the UK Listing Authority, being the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part VI of the FSMA |
| "unquoted" | private or public companies not quoted on any market or exchange |
|---|---|
| "VCT" or "venture capital trust" | a company satisfying the requirements of Chapter 3 of Part 6 of ITA 2007 for venture capital trusts |
| "VCT Rules" | Part 6 ITA 2007 and every other statute (including any orders, regulations or other subordinate legislation made under them) for the time being in force concerning VCTs and affecting the Company |
| "VCT Value" | investment calculated in accordance with Section 279 of ITA 2007 |
| "ViCTory Merger Value" | the value of a ViCTory Share calculated in accordance with Part I of this document |
This document has been published in connection with the proposed merger of the Company and Amati VCT 2 and the issue of the associated Consideration Shares pursuant to the Scheme, the issue of Offer Shares pursuant to the proposed Share Offers and the issue of the New Shares pursuant to the Dividend Reinvestment Scheme.
The Board and the Amati VCT 2 Board consider that the interests of both companies' shareholders will be better served by the Merger which will result in a single company with a larger asset base, with increased cost efficiencies and an improved spread of risk, with the ability to raise further funds whilst sustaining share buy back demand.
The Company was established as a venture capital trust with the name Singer & Friedlander AIM 3 VCT plc in January 2001, and was subsequently merged with two other venture capital trusts managed by Singer & Friedlander Investment Management Limited – Singer & Friedlander AIM VCT plc and Singer & Friedlander AIM 2 VCT plc – in 2006. The Company was renamed ViCTory VCT PLC on 16 June 2009 and Amati Global Investors Limited was appointed investment manager on 22 March 2010.
The Company invests mainly in a portfolio of companies whose shares are traded on AIM, with its remaining assets invested in a portfolio of small and mid cap companies listed on the London Stock Exchange's main market, unquoted holdings and bank deposits. As at 22 September 2011, the Company's unaudited NAV was 41.78p per Share. Since launch, the Company has paid a total of 12.75p per share in dividends (including the interim dividend to be paid on 18 October 2011).
The Company is managed by Amati Global Investors Limited, an independent fund management business owned by Amati Global Partners LLP, which is wholly owned by the staff of the Manager. The Manager was formerly called Noble Fund Managers Limited, which was the subject of a management buyout from Noble Group in January 2010, after which it changed its name to Amati Global Investors Limited. At the time of the management buyout, the Manager had two funds under management, Amati VCT and the CF Amati UK Smaller Companies Fund. Amati VCT was launched as First State AIM VCT in March 2005, and has been managed by Paul Jourdan since that date, initially at First State Investments (UK) Limited, then at Noble Fund Managers Limited, and now at Amati Global Investors Limited. Paul Jourdan and Douglas Lawson are the fund managers who are responsible for the portfolio of Amati VCT, in addition to those of ViCTory and Amati VCT 2. They also manage the CF Amati UK Smaller Companies Fund, an open ended investment company, which recently won the Small Cap Fund of the Year 2011 award from the publication, Growth Company Investor. On 22 March 2010, when the Manager was appointed investment manager to ViCTory, the Company had net assets of approximately £18 million. From this date up to 31 August 2011, the unaudited NAV Total Return of the Company has increased by 4.2 per cent., during which time the FTSE AIM All Share Total Return Index has risen by 3.7 per cent.
Since taking on the investment management contract in 2010, the Manager has substantially restructured the portfolio. The Board believes that the Manager has developed a distinctive approach to managing AIM VCTs. Its objective is, within the constraints of the VCT legislation, to build up a portfolio of holdings in UK quoted companies (which have a capitalisation of up to £2 billion) which is well diversified and balanced, whilst giving exposure to what the Manager believes to be the most attractive global investment themes, taking the Qualifying and Non-Qualifying Investments as a whole. Therefore, the Non-Qualifying Investments tend to be made in companies at the larger end of this spectrum with a strongly international dimension, providing exposure to global investment themes such as the growth of the Far Eastern economies and in Natural Resources industries. Those Qualifying Investments in equities are focussed on companies worth more than £15 million, as the Manager believes that companies of smaller value than this generally carry too high a level of risk as quoted equity investments. Where the Manager wishes to invest in companies below this value, it is the Manager's intention to do this through a mixture of convertible loans and equity investment. This has resulted in the overall unaudited weighted average market capitalisation of the equity investments in the Company's portfolio as a whole rising from £61 million as at 30 March 2010 (a week after the Manager was appointed) to £165 million as at 31 August 2011. It has also meant that since its appointment as Manager, Non-Qualifying Investments have been introduced to the portfolio giving exposure to the mining sector (with investments such as Anglo Pacific Plc), and to the growth of the Far East economies, notably that of China (with investments such as Asian Citrus Plc).
The appointment of the Manager and the restructuring of the portfolio along the lines described above has made a significant contribution to the net asset position of the Company. In the Company's last audited accounts for the year ended 31 January 2011, a comparison was given of the actual performance of the portfolio with how it would have performed had it been unaltered from the date the Manager started (22 March 2010), after deducting the expenses of income for the year. This stated that the actual net asset value per Share was some 10 per cent. higher than it would have been for the unaltered portfolio. The significant changes can be summarised as follows:
On 11 February 2011, the Manager was appointed investment manager to Invesco Perpetual AIM VCT plc, which was subsequently renamed Amati VCT 2 Plc. From this date to 22 September 2011, the unaudited NAV Total Return of Amati VCT 2 has fallen by 5.6 per cent., during which time the FTSE AIM All Share Total Return Index has fallen by 23.7 per cent.. Since taking on this mandate the Manager has restructured the portfolio with the same approach that was adopted for ViCTory. To illustrate this new approach, the unaudited weighted average market capitalisation of the equity investments in Amati VCT 2's portfolio rose from £50 million on 11 February 2011 to £153 million on 31 August 2011. At that date, eight of the newly introduced Non-Qualifying Investments purchased by Amati VCT 2 had also been purchased for the Company's portfolio. In addition to this, three new Qualifying Investments have been made by both VCTs.
Having re-structured both portfolios, the Manager now believes that both Amati VCT 2 and the Company are in a position to benefit from the mature portfolio of qualifying businesses which have been established over many years. The most successful of these investments have become substantial holdings in both VCTs as they have performed strongly, and the Manager believes that these core holdings in the portfolios look well placed to continue to do so over the comings years, even against a difficult economic backdrop.
As announced on 7 July 2011, the Board and the Amati VCT 2 Board have been in discussions with a view to a merger, believing that a merger is in the interests of both companies' shareholders. Regulations in force since 2004 have permitted VCTs to merge without shareholders losing their VCT tax relief. The Board also believes that the Merger provides the Company with a suitable opportunity to undertake the Share Offers to raise up to £30 million. It is the Board's intention that the Share Offers incorporate an Enhanced Share Buy Back and Reinvestment Facility for Shareholders who wish to use the proceeds from selling Shares in the Company in order to apply for new Offer Shares under the Share Offers. Further details of this Enhanced Share Buy Back and Reinvestment Facility are set out on page 53 of this document.
The Share Offers effectively mark a re-launch of the Company, and to reflect this the Directors are proposing to reconstruct the share capital of the Company in order to re-base the Net Asset Value to approximately 100p per Share to make it easier for Shareholders to monitor the progress of the Company from that point on.
The Board and the Amati VCT 2 Board believe that there are a number of advantages to both sets of shareholders of merging the companies, namely:
facilitating the possibility of raising new funds, and hence also being able to sustain a share buy back policy for investors who wish to exit;
introducing the Enhanced Share Buy Back and Reinvestment Facility which increases the likelihood of establishing a significant pool of shareholders committed to another five years of investment, thus increasing the longevity of the Enlarged Company; and
Both companies are managed by Amati Global Investors using the same process and approach to portfolio construction with broadly the same investment policies.
Accordingly, your Board has agreed with the Amati VCT 2 Board to merge the companies on a basis reflecting their respective net assets and on the terms set out in this Prospectus.
The Board and the Amati VCT 2 Board anticipate that there will be substantial savings in total annual running costs of the companies following completion of the Merger.
In addition to the Merger, the Company wishes to raise additional funds. The Directors believe that the success of the Manager in restructuring the portfolio and introducing a coherent set of disciplines for both Qualifying and Non-Qualifying Investments, provides a solid basis for future growth and a strong platform for attracting new investment from investors. Whilst the Directors do not believe that the Company's sustainability is dependent upon its ability to raise new money under the Share Offers, they believe that the Company's longterm prospects would be strengthened and costs per Share would be reduced further.
The Directors believe the Share Offers are attractive because:
The Share Offers will also enable the Directors to offer the Enhanced Share Buy Back and Reinvestment Facility which allows participating Shareholders to sell their Shares to the Company at a 1 per cent. discount to the most recently published Net Asset Value per Share prior to allotment if the selling Shareholder applies the net proceeds to subscribe for Offer Shares under the Share Offers. A rebate of 3 per cent. of the amounts subscribed will also be given in the form of additional Offer Shares.
The following Directors, the Proposed Directors and members of the investment management team have committed themselves to invest the following amounts in the Share Offers, and to make applications under the Enhanced Share Buy Back and Reinvestment Facility for the reinvestment of their existing Shares (or Amati VCT 2 Shares as relevant) in the Share Offers, if the Merger takes effect:
| Monies to be subscribed for Offer Shares under the Share Offers |
Existing shares to be included in the Enhanced Share Buy Back and Reinvestment Facility |
|
|---|---|---|
| Directors | ||
| Christopher Moorsom | £10,000 | - |
| Michael Killingley | £20,000 | 40,725 ViCTory Shares |
| Proposed Directors | ||
| Julian Avery | £40,000 | 81,310 Amati VCT 2 Shares |
| Christopher Macdonald | £20,000 | 29,660 Amati VCT 2 Shares |
| Investment Management Team | ||
| Paul Jourdan | £50,000 | - |
| Douglas Lawson | £10,000 | - |
The Scheme provides for Amati VCT 2 to be placed into members' voluntary liquidation and for all of their assets and liabilities to be transferred to the Company in consideration for Consideration Shares being issued directly to the Amati VCT 2 Shareholders such number of Consideration Shares being determined by reference to the adjusted relative net assets of the Company and Amati VCT 2. Once the Scheme is effected, the listing of Amati VCT 2 Shares will be cancelled and Amati VCT 2 will be wound up.
The Scheme is conditional upon:
Amati VCT 2, instructed by the Liquidators, will be required to calculate the Amati VCT 2 Roll-Over Value and the ViCTory Merger Value as set out below on or immediately prior to the Effective Date.
On the Effective Date, the Liquidators will receive all the cash, undertakings and other assets, and will assume all the liabilities of Amati VCT 2 and will deliver to the Company:
On the Effective Date, the Company will enter into the Transfer Agreement (subject to such modifications as may be agreed between the parties thereto) pursuant to which the Liquidators will procure the transfer of all of the assets and liabilities of Amati VCT 2 to the Company in consideration of the issue of Consideration Shares to the Amati VCT 2 Shareholders on the basis set out below. Under the Transfer Agreement, the Company undertakes to pay all liabilities incurred by the Liquidators including but not limited to the implementation of the Scheme, the winding-up of Amati VCT 2 and the purchase for cash of any holdings of dissenting Amati VCT 2 Shareholders.
For the purposes of calculating the Amati VCT 2 Roll-Over Value, the ViCTory Merger Value and the number of Consideration Shares to be issued, the following provisions will apply:
The Amati VCT 2 Roll-Over Value will be calculated as:
$$
\frac{\mathsf{A}+\mathsf{B}+\mathsf{C}-\mathsf{D}-\mathsf{E}}{\mathsf{F}}
$$
where:
The ViCTory Merger Value will be calculated as follows:
$$
\frac{G+H+I-J}{K}
$$
where:
Date (including, for the avoidance of doubt, acquisitions and disposals of investments, income from securities and running costs of the Company);
If the Scheme is not implemented for any reason, the Share Reconstruction will continue to be implemented. In such a case, and for the purposes of the Share Reconstruction only, the ViCTory Merger Value which results from the formula above will be adjusted by disregarding any costs taken into account in calculating J if such costs will not be incurred by the Company (e.g. stamp duty payable by the Company on the transfer of the assets and liabilities of Amati VCT 2), and any abort costs payable by the Company will be deemed to be a cost of the Scheme.
The number of Consideration Shares to be issued to Amati VCT 2 Shareholders (save for any dissenting Amati VCT 2 Shareholders) will be calculated as follows:
$$
\left(\frac{L}{M}\right) \times N
$$
Where:
The Consideration Shares to be issued pursuant to the Scheme will be issued directly to Amati VCT 2 Shareholders (save for any dissenting Amati VCT 2 Shareholders) pro rata to their existing holdings on the instruction of the Liquidators.
Entitlements will be rounded down to the nearest whole number and any fractional entitlements (which will not exceed £5) will be sold in the market and the proceeds retained for the benefit of the Enlarged Company.
The Consideration Shares will be issued in registered form. Consideration Shares are eligible for electronic settlement and can be held within the CREST system. If, following issue, recipients of Consideration Shares pursuant to the Scheme should wish to hold their Consideration Shares in uncertificated form they should contact their broker or independent financial adviser. Any dividend payment mandates provided for Amati VCT 2 will, unless Amati VCT 2 Shareholders advise otherwise, be transferred to the Company.
On the Share Reconstruction Date the Company will reconstruct its share capital by the rateable redesignation of a proportion of the Shares then in issue (including the Consideration Shares) as Deferred Shares. The Deferred Shares shall carry rights which render such shares economically worthless. Immediately after the Share Reconstruction the Company will repurchase the Deferred Shares for a nominal consideration of one pence in aggregate. The number of issued Shares to be so redesignated and repurchased shall be such as to ensure, as nearly as practicable, that the net asset value per share of the remaining Shares shall be 100 pence.
Application has been made to the UKLA for the Consideration Shares to be listed on the premium segment of the Official List and will be made to the London Stock Exchange for such Consideration Shares to be admitted to trading on its market for listed securities. The Consideration Shares will rank pari passu with the New Shares from the date of issue. Application has been made to the UKLA and to the London Stock Exchange for an amendment to the listing and trading line of Shares to reflect the Share Reconstruction.
The following information is based on current UK law and practice, is subject to changes therein, is given by way of general summary and does not constitute legal or tax advice. The following paragraphs apply to the Company and to persons holding Consideration Shares as an investment in the Company who are the absolute beneficial owners of such Consideration Shares and are resident in the UK. They may not apply to certain classes of persons, such as dealers in securities.
The implementation of the Scheme should not affect the status of the Company as a VCT or the tax reliefs obtained by Shareholders on subscription of existing Shares. It is the intention of the Board to continue to comply with the requirements of ITA 2007 following implementation of the Scheme so as to continue to qualify as a VCT.
If you are in any doubt about your position, or if you may be subject to tax in a jurisdiction other than the UK, you should consult your independent financial adviser.
The effective exchange of existing Amati VCT 2 Shares for Consideration Shares will not constitute a disposal of the existing Amati VCT 2 Shares for the purposes of UK taxation. Instead, the new holding of Consideration Shares will be treated as having been acquired at the same time and at the same cost as the existing shares from which they are derived. Amati VCT 2 Shareholders will receive a new share certificate in respect of the Consideration Shares issued pursuant to the Scheme as varied by the Share Reconstruction.
Shareholders in the Company will be afforded the usual tax reliefs available to shareholders in VCTs. Qualifying shareholders should continue to receive tax-free dividends and will not be subject to UK taxation on any capital gains on the disposal of Consideration Shares.
Dissenting Amati VCT 2 Shareholders' holdings will be purchased for cash at the ʻbreak value', which will be an estimate of the amount a shareholder of Amati VCT 2 would receive in an ordinary winding-up of Amati VCT 2 if all the assets of Amati VCT 2 had to be realised. The break value is expected to be significantly less than the estimated Amati VCT 2 Roll-Over Value.
Dissenting Amati VCT 2 Shareholders whose Amati VCT 2 Shares are purchased will be treated as having disposed of their existing Amati VCT 2 Shares. Amati VCT 2 Shareholders will still be able to claim the benefit of VCT status whilst in liquidation under the Merger Regulations and the dissenting Amati VCT 2 Shareholders will not be subject to any UK taxation in respect of any capital gains arising on disposal of their New Shares under the Scheme. However, the purchase will constitute a disposal of the existing holding in Amati VCT 2 Shares and dissenting Amati VCT 2 Shareholders will be liable to repay any initial income tax relief obtained on Amati VCT 2 Shares not held for the requisite holding period.
The implementation of the Scheme should not affect the status of the Company as a VCT or the tax reliefs obtained by Shareholders on subscription of existing Shares.
Application for clearance has been made to HMRC in respect of the Scheme under Section 701 ITA 2007 and Section 138 TCGA 1992 such that the receipt of Consideration Shares should not, except in the case of dealers, be regarded as an income receipt for the purposes of UK taxation.
Clearance has been obtained from HMRC that the Scheme meets the requirements of the Merger Regulations and as such the receipt by Amati VCT 2 Shareholders of Consideration Shares should not prejudice tax reliefs obtained by Amati VCT 2 Shareholders on their existing Amati VCT 2 Shares.
No UK stamp duty or stamp duty reserve tax will be payable by Amati VCT 2 Shareholders as a result of the implementation of the Scheme.
As at 22 September 2011, the unaudited net asset value of the Company was £16.5 million. As at 22 September 2011, the unaudited net asset value of Amati VCT 2 was £11.6 million. Following completion of the Scheme, the Company's unaudited net assets are expected to be approximately £28 million.
The number of Consideration Shares to be issued to the shareholders of Amati VCT 2 will be calculated by multiplying the number of Amati VCT 2 Shares in issue by the Merger Ratio, this being the Amati VCT 2 Roll-Over Value divided by the ViCTory Merger Value. Such Consideration Shares will be issued to Amati VCT 2 Shareholders on the register of members on the Record Date.
Holdings of dissenting Amati VCT 2 Shareholders will be purchased for cash by the Liquidators of Amati VCT 2 at the ʻbreak value' which will be an estimate of the amount a shareholder of Amati VCT 2 would receive in an ordinary winding-up of Amati VCT 2 if all the assets of Amati VCT 2 had to be realised. The break value will be significantly below the estimated Amati VCT 2 Roll-Over Value.
Subject to the above, the Scheme shall become effective immediately after the passing of the special resolutions for the winding up of Amati VCT 2 to be proposed at the Amati VCT 2 Second General Meeting. If it becomes effective, the Scheme shall be binding on all Shareholders and all persons claiming through or under them.
If the conditions set out above have not been satisfied by 31 December 2011, the Scheme shall not become effective.
The Directors consider that the launch of the Share Offers effectively marks a re-launch of the Company, and believe that re-basing the NAV per share to 100p will make the New Shares more attractive to potential new investors under the Share Offers and make it easier for Shareholders to monitor the progress of the Company from this point. The Directors propose that the Share Reconstruction be implemented irrespective of whether the Scheme proceeds or not.
Accordingly, the Directors propose to reconstruct the share capital of the Company following the implementation of the Scheme (or following the Amati VCT 2 Second General Meeting if the Scheme is not approved at that meeting) so that immediately following the Share Reconstruction the NAV of each Share (valued as at the Calculation Date) will be, as nearly as practicable, 100p. This will be achieved by the rateable redesignation of a proportion of the Shares then in issue as Deferred Shares. These Deferred Shares will be economically worthless, since as a new class of share they will have restricted rights (see below).
The number of Shares to be redesignated into Deferred Shares will be calculated in accordance with the formula below:
| Deferred Shares | = | N – X |
|---|---|---|
| where: | ||
| N | = | the number of Shares in issue at the relevant time on the Share Reconstruction Date |
| X | = | N/Y |
| Y | = | 100/Z |
| Z | = | the ViCTory Merger Value in pence per Share |
By way of example of the effect of the Share Reconstruction only, if the Share Reconstruction had been implemented on 31 July 2011 (the date of the unaudited interim accounts of the Company) with the ViCTory Merger Value being equal to the unaudited NAV per Share as at that date (46.7p), the Share Reconstruction would be as follows:
| where: | ||||
|---|---|---|---|---|
| N | = | 39,562,549 Shares in issue on 31 July 2011 | ||
| X | = | N/Y (39,562,549/2.141) | = | 18,475,710 |
| Y | = | 100/Z (100/46.7) | = | 2.141 |
| Z | = | 46.7 | ||
| Deferred Shares | = | N – X (39,562,549 - 18,475,710) | ||
| = | 21,086,839 | |||
Revised net asset value per Share 100p
The Deferred Shares will have restricted dividend rights, will not have rights to receive notice of, or attend or vote at, general meetings, will on a winding up will only be entitled only to 1p for every 1,000,000 Deferred Shares (with no further right to participate in any further surplus assets of the Company), and will be capable of being repurchased by the Company at any time for an aggregate consideration of 1p.
The Directors propose to seek Shareholder authority for the Company to enter into an off-market contract to purchase all the issued Deferred Shares for an aggregate amount of 1p and cancelled as issued. A copy of the contract for this off-market purchase of Deferred Shares may be inspected at the registered office of the Company for the period of 15 days prior to the General Meeting and at the meeting itself.
The Company intends, subject to regulatory and Court approval, to cancel the capital redemption reserve arising on the issue of Deferred Shares pursuant to the Share Reconstruction, and to establish a new reserve which may be treated as distributable, which can be used inter alia to fund the Company's buy back of New Shares and the payment of dividends. A special resolution will be proposed at the General Meeting dealing with this proposed cancellation.
Shareholders will receive replacement share certificates in respect of the New Shares arising from the Share Reconstruction and existing share certificates will no longer be valid.
The Company has today launched the Share Offers, which seek to raise up to £30 million. The 2011/12 Offer in respect of the tax year ending 5 April 2012 will close for subscriptions at 5.00 pm on 5 April 2012. The 2012/13 Offer in respect of the tax year ending 5 April 2013 will open on 6 April 2012 and close at 5.00 pm on 10 September 2012, unless extended by the Directors (but not beyond 27 September 2012). The Share Offers may close earlier than the dates stated if they are fully subscribed by an earlier date. The Share Offers are not conditional on the Merger becoming effective.
The Share Offers will also enable the Directors to offer the Enhanced Share Buy Back and Reinvestment Facility, which allows participating Shareholders to sell their Shares to the Company at a 1 per cent. discount to the most recently published Net Asset Value per Share prior to the allotment if the selling Shareholder applies the net proceeds to subscribe for Offer Shares under the Share Offers. A rebate of 3 per cent. of the amounts subscribed will also be given in the form of additional Offer Shares. Further details of the Share Offers and Enhanced Share Buy Back and Reinvestment Facility are set out in Part VI of this document.
To apply under the Enhanced Share Buy Back and Reinvestment Facility, Shareholders will need to complete the ESBBF Application Forms (both the yellow form and the blue form) which were sent to them with this Prospectus. If Shareholders do not have these, or would like replacements, they should contact The City Partnership (UK) Limited on 0131 202 1895. The yellow form relates the sale of Shareholders' existing Shares. The blue form relates to the application for Offer Shares using the proceeds from the sale of a Shareholders' existing Shares. Shareholders are referred to the "Frequently Asked Questions" section on page 94 of this document in relation to the operation of that facility.
The Company was incorporated and registered in England and Wales on 1 January 2001 with limited liability as a public limited company under Companies Act 1985 with registered number 04138683. A resolution has been proposed at the General Meeting that, subject to the Scheme becoming effective, the name of the Company will be changed to "Amati VCT 2 plc".
The Company is domiciled in the United Kingdom. The Company revoked its status as an investment company for the purposes of the Acts on 22 August 2006. The Company operates under the Acts and the regulations made thereunder.
VCTs are unregulated but are required to manage their affairs to obtain and maintain approval as a VCT under the provisions of chapter 3 of Part 6 of ITA 2007. HMRC granted provisional approval of the Company as a VCT in January 2001 and approval has not since been withdrawn. The Company is not authorised and/or regulated by the FSA or an equivalent overseas regulator. The Shares are listed on the Official List.
The business of the Company has been, and it is intended will be, carried on so as to continue to comply with that section to maintain full approval.
Certain selected financial information is set out below:
| Report and Accounts (audited) for the year ended 31 January |
Half-year Accounts (unaudited) for six months ended 31 July |
||||
|---|---|---|---|---|---|
| 2009 (restated) |
2010 (restated) |
2011 | 2011 | ||
| Investment income and deposit interest | £590,000 | £342,000 | £248,000 | £124,000 | |
| Revenue return on ordinary activities before tax | £351,000 | £(32,000) | £(109,000) | £(56,000) | |
| Revenue return/(loss) per Share | 0.79p | (0.07)p | (0.25)p | (0.13)p | |
| Dividends per Share paid | 2.5p | nil | nil | 2.0p | |
| Net assets | £19,303,000 | £18,330,000 | £20,692,000 | £18,513,000 | |
| NAV per Share | 44.32p | 42.08p | 47.51p | 46.70p |
As at 31 July 2011, the unaudited NAV of the Company was £18.5 million or 46.70p per Share (taken from the unaudited half-year accounts of the Company for six months ended 31 July 2011).
The Board comprises four Directors, all of whom are non-executive and independent of the Manager. Although the management of the Company's portfolio has been delegated to the Manager, the Directors retain overall responsibility for the Company's affairs. On completion of the Merger, James Hambro and David Page will resign from the Board and two of the existing directors of the Amati VCT 2 Board, Julian Avery and Chris Macdonald, will join the Board. Julian Avery will become Chairman of the Enlarged Company.
A short biography on each of the Directors and the Proposed Directors is set out below:
Christopher Moorsom (Chairman) - Christopher has more than 40 years experience in the financial services industry and is a member of the Securities Institute. In 1969 he became a partner of B S Stock, a Bristol firm of stockbrokers. He later became managing director of Albert E Sharp, joint managing director of Gerrard and was chairman of Gerrard Investment Funds. He is currently chairman of The Bath Building Society and a director of the Royal Welsh College of Music and Drama. He is a trustee of several charities and has recently served as a director of Weston Area NHS Trust, Northern Races Ltd, Bath Racecourse Ltd and Chepstow Racecourse Ltd. James Hambro - James is chairman of J O Hambro Capital Management Limited. He has over 25 years' experience in the merchant banking and investment management industry. He was a founder shareholder in 1986 of the J O Hambro Group and former managing director of J O Hambro Magan & Company Limited. He is also chairman of Hansteen Holdings Plc, a director of Primary Health Properties Plc and a number of other companies.
Michael Killingley - Michael is non-executive chairman of Beale plc and a non-executive director of AIM-quoted Falkland Islands Holdings plc. He was a senior partner with KPMG, chartered accountants, from 1988 until retiring from the firm in 1998 and is a former non-executive chairman of Southern Vectis plc, Conder Environmental plc and Advanced Technology (UK) plc. He is also treasurer of the University of Southampton.
David Page - David was from 1976 to 1993 a major shareholder in the largest franchisee of Pizza Express. In 1993 his franchise group merged with the franchisor at the same time as an IPO. David was appointed CEO of Pizza Express on flotation and chairman in 1996. In 2003 he founded and was chairman of the Clapham House Group plc which acquired and operated a number of restaurant brands. The Clapham House Group plc floated on AIM in November 2003. David is a non-executive director of Young & Co's Brewery Plc, an AIM quoted company.
Julian Avery - Julian is chairman of Amati VCT 2. He is a solicitor and was chief executive of Wellington Underwriting plc until September 2004. He was a non-executive director of Aspen Insurance Holdings Limited until May 2007 and chairman of Equity Insurance Group until its acquisition by the Australian insurance group, IAG in January 2007. He is currently a non-executive director of Warner Estate Holdings plc and Charles Taylor Consulting plc. He is senior adviser to Fenchurch Advisory Partners and is also a Trustee and Treasurer of the Butler Trust and chairman of St. Michael's Hospice, Hastings.
Christopher Macdonald - Christopher is chief executive officer of Brooks Macdonald Group plc, a private client fund management group. He is also a director of Brooks Macdonald Asset Management Limited, Brooks Macdonald Financial Consulting Limited, Brooks Macdonald Asset Management (Tunbridge Wells) Limited and Braemar Group Limited.
The Board, which meets regularly, comprises four Directors, all of whom are non-executive and all of whom are considered independent of the Manager. The Company complies with the Association of Investment Companies Code of Corporate Governance ("AIC Code") and has done so during the year ended 31 January 2011. As at the date of this document, the Company also complies with the relevant provisions of the UK Corporate Governance Code except as set out below.
The Board has constituted one standing committee to make recommendations to the Board - the Audit Committee. This has been established with appropriate terms of reference, and the committee's membership comprises all of the directors of the Company.
The Board does not have a separate remuneration committee as the Company has no employees or executive directors. Also, as the Board is small and consists of non-executive directors, and in view of the nature of the Company as a venture capital trust, it has been decided that a Nomination Committee does not need to be formed. The appointment of new directors is decided by the whole Board. There have been no new appointments during the financial year to 31 January 2011.
The UK Corporate Governance Code includes provisions relating to the role of the chief executive, executive directors' remuneration and the need for an internal audit function. For the reasons set out in the AIC Guide, and in the preamble to the UK Corporate Governance Code, the Board considers these provisions are not relevant to the position of the Company, which is an externally managed venture capital trust.
Amati Global Investors (formerly Noble Fund Managers Limited) is an independent fund management business, and was appointed as investment manager to the Company on 22 March 2010. Amati Global Investors Limited was incorporated and registered in Scotland on 15 September 1999 as a private company with registered number SC199908. The Company's previous investment manager was Williams de Broë Limited.
The Manager is a wholly owned subsidiary of Amati Global Partners LLP, which was established by Paul Jourdan and Douglas Lawson to effect the management buy-out of Noble Fund Managers Limited. Amati Global Partners LLP is wholly owned by the staff of the Manager.
In addition to the Company and Amati VCT 2, Amati Global Investors manages Amati VCT, the CF Amati UK Smaller Companies Fund and the Amati Systematic Trend Fund. From launch on 24 March 2005 to 31 August 2011, Amati VCT has generated an unaudited NAV Total Return of 3.6 per cent. (excluding subscription costs and tax rebate, assuming dividends reinvested at the ex-dividend date), during which time the FTSE AIM All Share Total Return Index has fallen by 26.6 per cent. This equates to a 63.6 per cent. total return for investors who bought the fund at launch, paying the full initial costs, and receiving the full available tax relief (which was 40 per cent. in 2005), assuming that the 26.3p of dividends paid were reinvested at the ex-dividend date.
The CF Amati UK Smaller Companies Fund has been managed by Paul Jourdan since 2000 and co-managed by Douglas Lawson since 2009, and was awarded the Small Cap Fund of the Year 2011 award from the publication, Growth Company Investor. Over a ten year period to 31 August 2011 this fund produced a total return of 200.6 per cent., during which time its benchmark (the RBS HGSC Index, including AIM, excluding investment trusts) rose by 84.2 per cent.
The Amati Systematic Trend Fund is a managed futures fund established in May 2011 and managed by Chris Allen and Jason Rolf, who joined Amati Global Investors in October 2010, and Gordon Izatt who joined in January 2011.
Dr Paul Jourdan and Douglas Lawson are the principal fund managers responsible for the investment portfolio. Details on these individuals are set out below.
Dr Paul Jourdan - Paul is an award-winning fund manager with a strong track record in small cap investment. He co-founded Amati Global Investors following the management buyout of Noble Fund Managers from Noble Group in January 2010. Paul joined Noble Fund Managers in 2007 as Head of Equities. He moved to Edinburgh in 1998, joining Stewart Ivory to work on UK, emerging market and global equities. In 2000 Stewart Ivory was taken over by Colonial First State (subsequently First State Investments). From September 2000 Paul became manager of what is now CF Amati UK Smaller Companies Fund, winning a number of awards for this fund in 2004/05 and Growth Company Investors Small Cap Fund of the Year award in 2011. In November 2004 he was appointed Head of UK Equities at First State. In early 2005 he launched what is now Amati VCT. Prior to 1998 Paul worked as a professional violinist, including a four year period with the City of Birmingham Symphony Orchestra.
Douglas Lawson - Douglas co-founded Amati Global Investors following the management buyout of Noble Fund Managers from Noble Group in January 2010. Prior to this he worked in corporate finance and private equity, initially as an associate focusing on middle market UK private equity and listed company M&A at British Linen Advisers, and latterly as an investment manager in the private equity team at Noble. Douglas has comanaged the CF Amati UK Smaller Companies Fund since 2009, winning Growth Company Investors "Small Cap Fund of the Year Award 2011". He has also been co-manager of Amati VCT since 2009 and the Company and Amati VCT 2 since these investment management contracts moved to Amati Global Investors. Douglas started his career at Ernst & Young in London, where he qualified as a Chartered Accountant in 2002.
Under the Investment Management and Administration Agreement (the "IMA"), the Company has agreed to pay to the Manager a fixed management fee of 1.75 per cent. per annum of the net asset value of the Company, payable in arrears, together with a performance fee further details of which are set out at paragraph 5.1.3 of Part IX of this document. Under the IMA, the Manager has also agreed to provide secretarial and administration services for the Company. A fee of £65,000 per annum is payable by the Company to the Manager for these services, subject to an annual increase in line with the retail prices index. The current fee for the period ending 31 July 2012 is £68,384 per annum. The appointment of the Manager as administrator and company secretary may be terminated on one year's notice. The Manager has engaged The City Partnership (UK) Limited to act as company secretary and Capita Financial Group as administrator.
These investment management arrangements will be unchanged following completion of the Merger with the exception of a technical amendment to the IMA so that the Consideration Shares to be issued pursuant to the Scheme shall be treated as a separate "Pool" for the purposes of the share performance fee arrangements in the IMA (see paragraph 5.1.3 of Part IX of this document).
If the Scheme takes effect, the Company and the Manager have agreed to introduce a cap on the annual running costs of 3.5 per cent. of the Company's net assets, with any excess being met by the Manager by way of a reduction in future management fees. The annual running costs include the Directors' and Manager's fees, professional fees and the costs incurred by the Company in the ordinary course of its business (but excluding any commissions paid by the Company in relation to any offers for subscription, any performance fees payable to the Manager, irrecoverable VAT and exceptional costs, including winding-up costs).
The Company's current investment policy is set out below:
The investment objectives of the Company are to generate tax free capital gains and income on investors' funds through investment primarily in AIM-traded companies whilst mitigating risk appropriately within the framework of the structural requirements imposed on all VCTs.
Portfolio risk will be mitigated through appropriate diversification of holdings within the relevant portfolio. Within the 3 year VCT investment period for each pool of Ordinary Shares, the Company intends to have invested between 70 and 85 per cent. in Qualifying Investments (AIM/PLUS Market listed or to be listed companies, or companies that are likely to be the subject of a sale within 24 months), 0 to 30 per cent. in Non-Qualifying Investments (companies quoted in London on the LSE or AIM or likely to be quoted in London within 12 months or companies likely to be the subject of a trade sale within 24 months) and 0 to 30 per cent. in cash, cash equivalents, government and investment grade bonds.
The Manager intends that by the date from which all funds raised are required to meet the VCT qualifying rules, the Company's investment profile will be approximately:
In accordance with the conditions for eligibility as an investment company under the Act, any holdings by the Company in shares or other securities in a company will not represent more than 15 per cent. by value of the Company's investments.
While Qualifying investments are being sourced, the assets of the portfolio which are not in Qualifying Companies will be actively invested by the Manager in a combination of the above (always ensuring that no more than 15 per cent. of the Company's funds are invested in any one entity).
The Company may, within the limits set out in its Articles, utilise borrowings to provide flexibility in its investment and dividend policies. The Articles allow the Company to borrow up to an amount equal to its adjusted capital and reserves (as defined in the Articles). The Board will restrict the borrowings of the Company to an amount which will not, without the previous sanction of an ordinary resolution of the Company, exceed an amount equal to 25 per cent. of the adjusted capital and reserves. There were no borrowings at the year end.
Any material changes to the Company's investment policy are required to be approved by Shareholders.
The Board is seeking Shareholder approval for an amendment to the investment policy to allow the Manager to use exchange traded derivative instruments in order to reduce the market risk inherent in the Company's investment portfolio.
The reason for wishing to change the investment policy relates to the specific constraints imposed on the Manager by the VCT legislation. The Directors believe that this policy will allow a useful additional risk management capability to be introduced, which the Manager has experience of using for Amati VCT. The ability to mitigate risk in VCTs is restricted by the need to maintain a minimum of 70 per cent. of the Company's assets in Qualifying Holdings after the initial three year period after subscription has expired. A VCT's ability to invest and mitigate risk is therefore restricted in three important respects:
In relation to the risks inherent in investing in Qualifying Holdings, the Company seeks to address some of the issues outlined above through its Non-Qualifying Investment strategy, which introduces investments with far greater liquidity, with a greater diversity of geographic exposure, and from sectors not generally seen in Qualifying Investments.
However, in relation to reducing market risk, the manager of a VCT will always be constrained. Amati VCT introduced into its investment policy the ability to hedge market risk via derivatives on exchange-traded index futures at its inception in 2005. Since then the use of such instruments have been limited to particular periods when the Manager believed the market looked vulnerable to set-backs, and the Manager has not used them at all over the last two years. However, the Manager believes that over the next five years the ability to hedge market risk in this manner could prove important for preserving value in the face of a prolonged downturn in the stock market as a whole, and has, therefore, encouraged the Board to propose this change to Shareholders. There is no guarantee, however, that the adoption of this investment policy will mean that market risk in the Company's portfolio is hedged during a fall in the stock market as a whole.
The use of derivatives will not prevent the Company from losing money overall in a falling market. However, the Manager's objective is to partially reduce losses and also to provide cash for investment at moments when the market is weak. The Company will only enter into such transactions for the purposes of efficient portfolio management in line with conventional practice. Strict internal guidelines on the use of derivatives will be put in place by the Manager. Additionally, such derivatives as are used, are required to offer both good liquidity and, in the Manager's opinion, reasonable correlation to the AIM market. The Manager is under no obligation to use any one of these approaches and provides no guarantee that market risk management will be in place during a falling market. The use of any or all of these instruments will reflect the Manager's view of the market risks which may be taken at any time.
Your attention is drawn to the risk factors relating to the use of derivatives set out on page 9 of this document.
If approved by the Shareholders at the General Meeting, the Company's investment policy will be as follows:
The Investment objectives of the Company are to generate tax free capital gains and income on investors' funds through investment primarily in AIM-traded companies whilst mitigating risk appropriately within the framework of the structural requirements imposed on all VCTs.
Portfolio risk will be mitigated through appropriate diversification of holdings within the relevant portfolio. Within the 3 year VCT investment period for each pool of Ordinary Shares, the Company intends to have invested between 70 and 85 per cent. in Qualifying Investments (AIM/PLUS Market listed or to be listed companies, or companies that are likely to be the subject of a sale within 24 months), 0 to 30 per cent. in Non-Qualifying Investments (companies quoted in London on the LSE or AIM or likely to be quoted in London within 12 months or companies likely to be the subject of a trade sale within 24 months) and 0 to 30 per cent. in cash, cash equivalents, government and investment grade bonds.
The Manager may use exchanged-traded derivatives with a view to reducing overall market risk in the portfolio as a whole. The Manager shall only seek to hedge a limited amount of market risk and shall always be covered by the assets of the portfolio. The Manager will at no time seek to hedge more than 40 per cent. of the Company's net asset value through a combination of futures and options positions. Put options may be bought up to a maximum value of 1.5 per cent. of the Company's net asset value. The use of derivatives is on a strictly controlled basis only and is part of a total risk mitigation exercise, not a separate investment policy. The Company's overriding investment principle in relation to the use of derivatives is to seek to reduce any potential capital loss in the equity portions of the Qualifying and Non-Qualifying Investment portfolios in a falling market.
The Manager intends that by the date from which all funds raised are required to meet the VCT qualifying rules, the Company's investment profile will be approximately:
In accordance with the conditions for eligibility as an investment company under the Act, any holdings by the Company in shares or other securities in a company will not represent more than 15 per cent. by value of the Company's investments.
While Qualifying investments are being sourced, the assets of the portfolio which are not in Qualifying Companies will be actively invested by the Manager in a combination of the above (always ensuring that no more than 15 per cent. of the Company's funds are invested in any one entity).
As described above, the Manager will also have the facility to seek to reduce market risk from the equity portfolio held by the Company through the use of derivatives. The derivatives used will be exchange-traded. They will be in highly liquid markets bearing a reasonable level of correlation to the Company's benchmark index, ensuring that the value is normally transparent, and enabling positions to be closed rapidly when needed.
The Company may, within the limits set out in its Articles, utilise borrowings to provide flexibility in its investment and dividend policies. The Articles allow the Company to borrow up to an amount equal to its adjusted capital and reserves (as defined in the Articles). The Board will restrict the borrowings of the Company to an amount which will not, without the previous sanction of an ordinary resolution of the Company, exceed an amount equal to 25 per cent. of the adjusted capital and reserves.
Any material changes to the Company's investment policy are required to be approved by Shareholders.
The Company will also comply with the investment restrictions set out under the legislation relating to VCTs, further details of which are set out in Part VIII, and with the Listing Rules, further details of which are set out in paragraph 9.17 of Part IX.
The Company's dividend policy is to maximise tax free dividend distributions, primarily from the successful cash realisation of investments and also partly from income. Since its launch the Company has paid dividends equivalent to 12.75p per Share (including the interim dividend to be paid on 18 October 2011).
The Board intends to target annual dividend payments totalling 5 to 6 per cent. of the Company's audited year end NAV. However, no profit forecast is to be inferred or implied from this statement.
The Company intends, subject to regulatory and Court approval, to cancel the share premium account arising on the issue of the New Shares pursuant to the Scheme and the Share Offers, and to establish a new reserve which may be treated as distributable, which can be used, inter alia, to fund the Company's buyback of Shares and the payment of dividends. Accordingly, resolution 10 set out in the notice of General Meeting deals with this proposed cancellation.
In addition to the Enhanced Share Buy Back and Reinvestment Facility (described on page 53), the Company wishes to ensure there is liquidity in the Shares. The Company has a stated policy of buying back Shares in the market at a 20 per cent. discount to NAV. It is proposed that, following the Merger, the Enlarged Company will offer a share buy back facility initially at around a 15 per cent. discount to NAV, with a view to reducing the discount to 10 per cent. by the end of 2013, subject to applicable legislation governing the Company, market conditions at the time and the Company having both funds and distributable reserves available for the purpose. The making and timing of any share buy backs will remain at the absolute discretion of the Board.
It is likely that during the twelve month period following the Merger the Directors will seek to re-structure the Company's reserves to increase the proportion of reserves which are distributable. This may result in a period of time when share buy backs are not possible.
The Company intends to create a Dividend Reinvestment Scheme, enabling Shareholders to use all of their dividends to subscribe for further New Shares in a cost effective manner.
The price at which New Shares will be issued is the NAV per New Share as close as reasonably practical to the dividend payment date. The Company bears all of the costs of operating the Dividend Reinvestment Scheme. Dividend reinvestment enables Shareholders to increase their total holding in the Company without incurring dealing costs, issue costs or stamp duty. Subject to the limits on investments in VCTs, New Shares issued under the DRIS should qualify for the VCT tax reliefs that are applicable to subscriptions for new VCT shares. The Dividend Reinvestment Scheme may be appropriate for those Shareholders who are investing primarily for capital growth.
The Directors are proposing to allocate up to £2 million of New Shares for the Dividend Reinvestment Scheme pursuant to the Prospectus. New Shares subscribed for under the Dividend Reinvestment Scheme will form part of the relevant Shareholder's annual limit for investing in venture capital trusts. Shareholders wishing to reinvest their dividends should tick the box on the Offer Subscription Form. The terms and conditions of the Dividend Reinvestment Scheme are set out in Part X of this document.
In order to obtain the tax relief from income tax, it is necessary that the investor subscribes for New Shares in his or her own name and not in the name of a nominee. The shares may subsequently be transferred into the name of a nominee. If the revised Articles are adopted (see below), consideration of the duration of the Company will take place at the annual general meeting in 2018. If the Shareholders vote in favour of the Company not continuing as a VCT, then the Directors will take steps to wind the Company up. In effecting such steps, the Company shall take into account the need for the New Shares issued under the Dividend Reinvestment Scheme in the 2011/12 and 2012/13 tax years to have been held for a sufficient period of time before any winding up takes effect to allow participants in that scheme to retain their VCT income tax relief.
Following the completion of the Merger (and assuming that no funds are raised under the Share Offers), it is anticipated that the annual running costs - including management and administration fees - for the Company (anticipated to be £537,000 for the next full financial year) and Amati VCT 2 (anticipated to be £465,000 for the next full financial year) will be reduced by approximately £219,000, an annual saving of approximately 22 per cent. against the total running costs of these companies.
The total cost of the Merger is anticipated to be £212,000 (including VAT), which will be split equally between the Company and Amati VCT 2.
A resolution is to be proposed at the General Meeting that, subject to the Scheme becoming effective, the name of the Company is changed to "Amati VCT 2 plc".
Shareholders will be sent both half yearly and year end results, and the Company will publish interim management statements. The Company's financial calendar is as follows:-
| Financial year end | 31 January |
|---|---|
| Final results announcement | May |
| Annual general meeting | June |
| Final dividend payable (if any) | June |
| Half yearly results announcement | September |
The Company intends to continue to comply with Part 6 ITA to maintain its VCT status and has retained PricewaterhouseCoopers LLP to advise it on VCT taxation matters.
Listed investments and investments traded on AIM will be stated at closing bid prices. Unquoted investments and investments traded on PLUS will be stated at fair value as determined by the Directors. In valuing unquoted investments, the Directors will follow the valuation guidelines of the International Private Equity and Venture Capital Association.
The Shares are in registered form and are eligible for electronic settlement. The Shares can be held within the CREST system so that, should they so wish, Shareholders are able to hold their Shares in uncertificated form. The Consideration Shares issued pursuant to the Scheme will be in registered form. If, following issue, recipients of Consideration Shares pursuant to the Scheme and Offer Shares should wish to hold their Shares in uncertificated form they should contact their broker or independent financial adviser.
In continuing to maintain its VCT status, the Company complies with a number of regulations as set out in Part 6 of the Income Tax Act 2007. How the main regulations currently apply to the Company is summarised as follows:
In accordance with the Listing Rules:
Audited financial information on the Company is published in the annual reports for the years ended 31 January 2009, 31 January 2010 and 31 January 2011 and unaudited information in the half-yearly reports for the six month periods ended 31 July 2010 and 31 July 2011. Audited financial information on Amati VCT 2 is published in the annual reports for the years ended 31 May 2009, 31 May 2010 and 31 May 2011.
The annual reports for the Company for the years ended 31 January 2009 and 31 January 2010 were audited by PricewaterhouseCoopers LLP (which resigned as auditors on 12 January 2011). The annual report for the Company for the year ended 31 January 2011 was audited by PKF (UK) LLP. All these annual reports for the Company were unqualified under either the Companies Act 1985 or the Acts (as applicable).
All the annual reports for Amati VCT 2 were audited by Ernst & Young LLP of 1 More London Place, London SE1 2AF and were unqualified under either the Companies Act 1985 or the Acts (as applicable).
These annual reports were all prepared in accordance with UK generally accepted accounting practice (GAAP) and the Statement of Recommended Practice ʻFinancial Statements of Investment Trust Companies' and each contains a description of the relevant company's financial condition, changes in financial condition and results of operation for each relevant financial year end, together with half year reports referred to.
All the audited annual reports and the unaudited half-yearly reports referred to above are being incorporated by reference and can be accessed at the following website:
and
Where these documents make reference to other documents, such other documents are not incorporated into and do not form part of this document.
Such information includes the following:
| Description | 31 January 31 January 2009 Annual Report |
2010 Annual Report |
2010 Half-year Report |
31 July 31 January 2011 Annual Report |
31 July 2011 Half-year Report |
|---|---|---|---|---|---|
| Financial Overview | Page 3 | Page 2 | Page 1 | Page 1 | Page 1 |
| Income Statement | Page 30 | Page 32 | Page 16 | Page 34 | Page 14 |
| Dividend per Share | Page 3 | Page 2 | Page 21 | Page 1 | Page 1 |
| Balance Sheet | Page 32 | Page 34 | Page 19 | Page 36 | Page 17 |
| Cash Flow Statement | Page 33 | Page 35 | Page 20 | Page 37 | Page 18 |
| Notes to the Financial Statements | Page 34 | Page 36 | Page 21 | Page 38 | Page 19 |
| Independent Auditors' Report | Page 29 | Page 31 | n/a | Page 32 | n/a |
| Related Party Transactions | Page 50 | Page 53 | Page 25 | n/a | Page 23 |
This information in the annual reports 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.
A description of the changes in the performance of the Company, both capital and revenue, and changes to the Company's portfolio of investments is set out in the sections of the published audited statutory accounts of the Company for the periods stated as follows:
| Description | 31 January 31 January 2009 Annual Report |
2010 Annual Report |
2010 Half-year Report |
31 July 31 January 2011 Annual Report |
31 July 2011 Half-year Report |
|---|---|---|---|---|---|
| Chairman's Statement/Board Review | Page 4 | Page 4 | Page 4 | Page 2 | Page 2 |
| Report of Directors/Business Review | Page 21 | Page 23 | n/a | Page 18 | n/a |
| Investment Portfolio | Page 6 | Page 9 | Page 9 | Page 10 | Page 8 |
As at 31 July 2011, the date to which the most recent unaudited financial information on the Company has been drawn up, the Company had unaudited net assets of £18.5 million or 46.70p per Share.
| Description | 31 May 2009 Annual Report |
31 May 2010 Annual Report |
31 May 2011 Annual Report |
|---|---|---|---|
| Financial Overview | Page 2 | Page 2 | Page 1 |
| Income Statement | Page 29 | Page 30 | Page 30 |
| Dividend per Share | Page 2 | Page 2 | Page 1 |
| Balance Sheet | Page 30 | Page 31 | Page 32 |
| Cash Flow Statement | Page 31 | Page 32 | Page 33 |
| Notes to the Financial Statements | Page 32 | Page 33 | Page 34 |
| Independent Auditors' Report | Page 27 | Page 28 | Page 29 |
| Related Party Transactions | Page 38 | Page 39 | Page 19 |
A description of the changes in the performance of Amati VCT 2, both capital and revenue, and changes to Amati VCT 2's portfolio of investments is set out in the sections headed "Chairman's Statement", "Business Review" and "Investment Portfolio" in the published audited statutory accounts of the Company for the periods stated as follows:
| Description | 31 May 2009 Annual Report |
31 May 2010 Annual Report |
31 May 2011 Annual Report |
|---|---|---|---|
| Chairman's Statement | Page 3 | Page 3 | Page 2 |
| Report of Directors/Business Review | Page 10 | Page 11 | Page 16 |
| Investment Portfolio | Page 6 | Page 7 | Page 8 |
As at 31 May 2011, the date to which the most recent audited financial information on Amati VCT 2 has been drawn up, Amati VCT 2 had net assets of £13.8 million or 31.7p per Amati VCT 2 Share.
The following is the full text of a report on the Company from Lubbock Fine, the Reporting Accountants to the Directors.
The Directors ViCTory VCT PLC 27/28 Eastcastle Street London W1W 8DH
28 September 2011
Dear Sirs
We report on the unaudited pro forma statement of net assets of the Company (the "Pro Forma Financial Information") set out in Part IV of the prospectus dated 28 September 2011 (the "Prospectus"), which has been prepared on the basis described therein, for illustrative purposes only, to provide information about how the Share Offers and the Scheme (as such terms are defined in the Prospectus) might have affected the financial information presented in the Company's unaudited financial statements for the six month period ended 31 July 2011 in a manner which is consistent with the accounting policies adopted by the Company in preparing its statutory financial statements for the year ended 31 January 2011. This report has been prepared in accordance with the requirements of paragraph 20.2 of Annex I of Appendix 3.1.1 of the Prospectus Rules and is given for the purpose of complying with that paragraph and for no other purpose.
Save for any responsibility arising under paragraph 5.5.3 (2)(f) of the Prospectus Rules to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with paragraph 23.1 of Annex I of the Prospectus Rules, consenting to its inclusion in the Prospectus.
It is the responsibility of the directors of the Company to prepare the Pro Forma Financial Information in accordance with paragraph 20.2 of Annex I of Appendix 3.1.1 of the Prospectus Rules.
It is our responsibility to form an opinion, as required by paragraph 7 of Annex II of Appendix 3.1.1 of the Prospectus Rules, as to the proper compilation of the Pro Forma Financial Information and to report that opinion to you.
In providing this opinion we are not updating or refreshing any reports or opinions previously made by us on any financial information used in the compilation of the Pro Forma Financial Information, nor do we accept responsibility for such reports or opinions beyond that owed to those to whom those reports or opinions were addressed by us at the dates of their issue.
We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. The work that we performed for the purpose of making this report, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the pro forma financial information with the directors of the Company.
We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Pro Forma Financial Information has been properly compiled on the basis stated and that such basis is consistent with the accounting policies of the Company.
Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in any jurisdiction other than the United Kingdom and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.
In our opinion:
For the purposes of Prospectus Rule 5.5.3R(2)(f) we are responsible for this report as part of the Prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the Prospectus in compliance with paragraph 1.2 of Annex I of Appendix 3.1.1 of the Prospectus Rules and paragraph 1.2 of Annex III of Appendix 3.1.1 of the Prospectus Rules.
Yours faithfully
Lubbock Fine Regulated by the Institute of Chartered Accountants in England and Wales
Lubbock Fine is a partnership registered in England and Wales.
A list of the names of partners is open to inspection at the office at Russell Bedford House, City Forum, 250 City Road London EC1V 2QQ.
The following unaudited pro forma statement of net assets of the Company has been prepared for illustrative purposes only, to show the impact of the Share Offers and the Scheme on the Company's net assets as at 31 July 2011 on the basis that the Share Offers and the Scheme and the acquisition of the investment portfolio and all of the other assets and liabilities of Amati VCT 2 by the Company as if they had been completed on that date.
The pro forma financial information has been prepared for illustrative purposes only and, because of its nature, addresses a hypothetical situation and, therefore, does not represent the Company's actual financial position or results.
| Adjustments | ||||||
|---|---|---|---|---|---|---|
| (as at 31 July 2011) (£'000) (Notes 1 and 2) |
Acquisition of Company the assets and liabilities of Amati VCT 2 |
Expenses of the Scheme |
Funds raised under the share |
Enlarged Company |
||
| (£'000) | (£'000) | offers (£'000) |
pro forma (£'000) |
|||
| (Notes 3 and 4) |
(Note 5) | (Note 6) | (Notes 7 and 8) |
|||
| Fixed Assets | ||||||
| Investments (at fair value) | 17,818 | 11,637 | 29,455 | |||
| Current assets | ||||||
| Debtors | 310 | 42 | 352 | |||
| Cash and deposits | 321 | 1,136 | 28,500 | 29,957 | ||
| Creditors: amounts falling due within one year (334) | (345) | (212) | (891) | |||
| Net current assets | 297 | 833 | (212) | 28,500 | 29,418 | |
| Net assets | 18,115 | 12,470 | (212) | 28,520 | 58,873 | |
| Capital and reserves | ||||||
| Called-up equity share capital | 1,982 | 1,473 | 1,500 | 4,955 | ||
| Share premium | 2,955 | 10,997 | 27,000 | 40,952 | ||
| Merger reserve | 3,018 | 3,018 | ||||
| Special reserve | 15,788 | 15,788 | ||||
| Capital redemption reserve | 754 | 754 | ||||
| Capital reserve | (6,327) | (6,327) | ||||
| Revenue reserve | (55) | (212) | (267) | |||
| Total equity shareholders funds | 18,115 | 12,470 | (212) | 28,500 | 58,873 | |
| Net asset value per share | 45.70p | 59.41p |
Notes:
The investment portfolio of the Company as at the date of this document is as follows(all of which information is unaudited):
| Company | Book Cost (£) |
Valuation (£) (as at 31 August 2011) |
|---|---|---|
| FTSE Sector | ||
| Oil & Gas | ||
| DEO Petroleum plc | 181,583 | 133,161 |
| Egdon Resources plc† | 206,410 | 198,007 |
| Mycelx Technologies* | 281,400 | 288,100 |
| Basic materials | ||
| Anglo Pacific Group plc | 461,703 | 480,000 |
| Elementis plc | 236,230 | 308,200 |
| Industrials | ||
| Avingtrans plc* | 528,333 | 276,833 |
| Bglobal plc* | 256,164 | 75,838 |
| Corac Group plc* | 186,144 | 120,994 |
| Green Compliance plc† | 440,231 | 516,360 |
| Hargreaves Services plc | 258,755 | 370,192 |
| Hightex Group plc* | 175,353 | 93,937 |
| Manroy plc* | 180,631 | 184,434 |
| Microsaic plc† | 228,486 | 192,734 |
| Quadnetics Group plc* | 341,381 | 269,078 |
| RPC Group plc | 264,659 | 329,628 |
| RTC Group plc* | 220,375 | 37,625 |
| SKIL Ports & Logistics Ltd | 238,630 | 164,177 |
| The Sportsweb.com Ltd*# | 352,128 | 316,915 |
| Symphony Environmental Technologies plc* | 428,379 | 382,010 |
| Waterlogic plc | 139,306 | 155,638 |
| Zytronic plc* | 610,958 | 456,067 |
| Consumer goods | ||
| Asian Citrus Holdings Ltd | 456,489 | 429,616 |
| China Food Company plc Convertible 8% Loan Note# | 624,000 | 627,357 |
| New Britain Palm Oil Ltd | 162,067 | 230,850 |
| Sorbic International Convertible 10% Loan Stock# | 276,000 | 277,026 |
| Health care | ||
| Sinclair IS Pharma plc*† | 425,678 | 393,105 |
| Deltex Medical plc* | 199,500 | 126,000 |
| Futura Medical plc* | 185,775 | 187,151 |
| Omega Diagnostics Group plc* | 200,000 | 125,000 |
| Synergy Health plc* | 142,567 | 853,050 |
| Tristel plc* | 422,208 | 296,286 |
| Company | Book Cost (£) |
Valuation (£) (as at 31 August 2011) |
|---|---|---|
| Consumer services | ||
| Cello Group plc* | 257,625 | 69,750 |
| Conexion Media Group plc* | 183,750 | 5,404 |
| Coolabi plc* | 298,596 | 202,909 |
| Dods Group plc (formerly Huveaux plc)* | 595,868 | 135,000 |
| Ebiquity plc* | 729,005 | 241,850 |
| Entertainment One Ltd | 27,323 | 66,746 |
| Eros International plc | 332,465 | 294,000 |
| Expansys plc* | 449,500 | 19,375 |
| Fuse 8 plc (formerly Award International Holdings)* | 209,990 | 4,830 |
| Music Festivals plc* | 38,693 | 37,502 |
| Music Festivals 8% Convertible Loan Note*# | 340,000 | 344,690 |
| Just Car Clinics Group plc* | 69,216 | 57,002 |
| Lo-Q plc† | 749,806 | 1,213,704 |
| Prezzo plc† | 151,327 | 792,075 |
| Skywest Airlines Ltd | 146,488 | 168,820 |
| Tasty plc* | 540,376 | 304,078 |
| UBC Media Group plc* | 614,268 | 51,669 |
| Financials | ||
| Brookwell Ltd | 116,201 | 81,341 |
| Fulcrum Utility Services Ltd†* | 620,193 | 697,620 |
| London Capital Group Holdings plc | 358,745 | 300,174 |
| Technology | ||
| IDOX plc† | 270,902 | 784,947 |
| Parseq plc (formerly Intelligent Environments Group)* | 116,123 | 232,247 |
| Tikit Group plc* | 366,420 | 806,124 |
| Ubisense Group plc* | 393,603 | 471,959 |
| Utilities | ||
| OPG Power Venture plc | 185,767 | 126,341 |
| Holdings with nil value | ||
| Lilestone Holdings Ltd*# | 1,238,655 | - |
| Ovidia Investments plc# | 518,312 | - |
| Camaxys Group plc# | 254,825 | - |
| Total | 19,485,565 | 16,405,526 |
Key:
* Qualifying Holdings.
† Part Qualifying Holdings.
All investment quoted on AIM or London Stock Exchange Full List unless otherwise stated
Since 31 August 2011, there has been no significant change in the value and composition of the investments in the portfolio of the Company.
The investment portfolio of Amati VCT 2 as at the date of this document is as follows (all of which information is unaudited):
| Company | Book Cost (£) |
Valuation (£) (as at 31 August 2011) |
|---|---|---|
| FTSE Sector | ||
| Oil & Gas | ||
| GETECH Group plc* | 251,944 | 116,280 |
| Mycelx Technlogies Corp* | 210,399 | 215,408 |
| Basic materials | ||
| African Barrick Gold plc | 141,105 | 191,275 |
| Altona Energy plc | 104,500 | 78,375 |
| Anglo Pacific Group plc | 352,899 | 328,200 |
| Elementis plc | 200,317 | 189,543 |
| Inditherm plc* | 400,000 | 120,000 |
| Oxford Catalysts Group plc* | 250,000 | 83,333 |
| Industrials | ||
| Augean plc* | 299,988 | 49,165 |
| Bglobal plc* | 174,800 | 51,750 |
| Brulines Group plc* | 315,000 | 235,610 |
| Cohort plc* | 383,298 | 252,880 |
| Datong plc* | 156,000 | 37,781 |
| Green Compliance plc* | 280,000 | 310,700 |
| Hangar8 plc* | 250,000 | 188,334 |
| Hargreaves Services plc | 349,935 | 310,378 |
| Manroy plc* | 134,423 | 137,253 |
| Petards Group plc* | 34,422 | 6,896 |
| RPC Group plc | 253,578 | 252,587 |
| Sabien Technology Group plc* | 415,895 | 297,000 |
| Staffline Group plc*† | 181,206 | 506,250 |
| XP Power Ltd | 316,545 | 227,000 |
| Waterlogic plc | 199,509 | 212,721 |
| Consumer goods | ||
| Asian Citrus Holdings Ltd@ | 489,773 | 331,188 |
| New Britain Palm Oil Ltd | 188,135 | 176,130 |
| PhotonStar LED Group plc* | 262,000 | 31,814 |
| Health care | ||
| Allergy Therapeutics plc* | 194,097 | 25,218 |
| EKF Diagnostics Holdings plc* | 150,000 | 246,250 |
| Futura Medical plc* | 150,000 | 340,000 |
| Kiotech International plc* | 550,005 | 489,754 |
| Proximagen Group plc* | 296,000 | 244,000 |
| Synairgen plc* | 213,687 | 37,806 |
| Company | Book Cost (£) |
Valuation (£) (as at 31 August 2011) |
|---|---|---|
| Syntopix Group plc* | 416,249 | 100,096 |
| Tristel plc* | 197,992 | 186,490 |
| Consumer services | ||
| BrainJuicer Group plc* | 189,000 | 458,500 |
| Cupid plc*† | 176,106 | 720,417 |
| DM plc* | 356,749 | 40,197 |
| Hasgrove plc* | 439,999 | 198,000 |
| Mission Marketing Group (The) plc* | 408,000 | 53,550 |
| Telecommunications | ||
| AdEPT Telecom plc* | 326,411 | 74,605 |
| Antenova Ltd A Preference*# | 100,118 | 100,117 |
| Zamano plc* | 386,000 | 28,146 |
| Financials | ||
| Brooks Macdonald Group plc† | 127,382 | 933,750 |
| Brookwell Ltd Redeemable Preference | 408,255 | 285,779 |
| London Capital Group Holdings plc | 200,849 | 204,050 |
| Technology | ||
| Cyan Holdings plc* | 220,000 | 6,500 |
| FFastFill plc* | 182,000 | 299,000 |
| Infrared Integrated Systems Ltd*# | 300,000 | 680,000 |
| Netcall plc* | 267,857 | 144,234 |
| PROACTIS Holdings plc* | 344,000 | 160,000 |
| Publishing Technology plc* | 441,500 | 174,000 |
| Sanderson Group plc* | 200,000 | 132,000 |
| Software Radio Technology plc* | 712,568 | 608,000 |
| Ubisense Group plc* | 150,385 | 162,917 |
| Holdings with nil value | ||
| Antenova Ltd Ord | 525,000 | - |
| Celoxica Holdings plc*# | 198,125 | - |
| Total | 15,424,005 | 12,071,227 |
* Qualifying Holdings.
† Part Qualifying Holdings.
All investment quoted on AIM or London Stock Exchange Full List unless otherwise stated
Note:
Since 31 August 2011, Amati VCT 2 has sold its holdings in the following holdings:
(i) African Barrick Gold plc £204,225
(ii) Elementis plc £179,580
Since 31 August 2011, there has been no significant change in the value and composition of the investments in the portfolio of Amati VCT 2.
Set out below is a comprehensive and meaningful analysis of the investment portfolio of the Company as at 31 August 2011 (being the latest practical date prior to publication of this document). All of this information is unaudited.
The thirteen largest investments of the Company by valuation as at 31 August 2011 (representing 56.6 per cent. of the unaudited net assets of the Company) are set out below:
| Sector | Consumer services | ||
|---|---|---|---|
| Market capitalisation | £27.0 million | Year to 31 October 2010 | £ million |
| Cost | £749,806 | Profit before tax | 2.3 |
| Valuation | £1,213,704 | Profit after tax | 1.9 |
| Valuation basis | Bid price | Net assets | 7.3 |
Lo-Q designs, installs and operates systems that reduce queuing times for visitors to theme parks. Users of Lo-Q's systems reserve their place in a queue electronically and are then notified when their turn is up. The system has been installed in some of the world's leading theme parks such as those operated by Six Flags, Legoland and Parque Reunidos. The park operators benefit from high customer satisfaction, incremental revenue streams from the system and additional revenue streams as visitors spend more time in park restaurants and gift shops rather than queues.
| Sector | Health care | ||
|---|---|---|---|
| Market capitalisation | £481.86 million | Year to 31 March 2011 | £ million |
| Cost | £142,567 | Profit before tax | 36.7 |
| Valuation | £853,050 | Profit after tax | 28.8 |
| Valuation basis | Bid price | Net assets | 289.2 |
Synergy Health provides healthcare related services to customers worldwide. The company's main activities are decontamination (which is operated on an outsourced and managed basis for reprocessing surgical and re-usable hospital equipment); sterilisation (which operates through the Isotron brand to sterilise single use medical products); healthcare solutions (which provides a wide range of products for infection prevention and control, patient hygiene, surgical and wound care); laboratory services (which provides health screening and clinical pathology support) and linen management.
| Sector | Technology | ||
|---|---|---|---|
| Market capitalisation | £37.56million | Year to 31 December 2010 | £million |
| Cost | £366,420 | Profit before tax | 2.9 |
| Valuation | £806,124 | Profit after tax | 2.2 |
| Valuation basis | Bid price | Net assets | 16.2 |
Tikit is a provider of IT consultancy, software services and technology to legal and accounting firms. The company operates through 3 principal divisions – Managed Services (which provides clients with a fully outsourced IT service); Software (which sells 3rd party and proprietary software solutions); and Consultancy (which provides clients with project based IT expertise). The group's revenues are increasingly moving towards higher margin proprietary software as well as software bundles consisting of own and 3rd party applications that offer all the functionality required by legal firms.
| Sector | Consumer services | ||
|---|---|---|---|
| Market capitalisation | £135.8 million | Year to 2 January 2011 | £ million |
| Cost | £151,327 | Profit before tax | 14.0 |
| Valuation | £792,075 | Profit after tax | 9.8 |
| Valuation basis | Bid price | Net assets | 67.2 |
Prezzo is a branded restaurant operator offering a contemporary menu with an Italian flavour. Prezzo opened 20 new restaurants in 2010 including several in prime, city-centre locations. Some of this growth came from Prezzo's acquisition of 11 leasehold sites from Caffe Uno Brasseries. These restaurants are being re-branded in-line with the group's existing estate and Prezzo has agreed to acquire a further six leasehold sites from Caffee Uno. Despite a difficult retail backdrop, Prezzo has grown earnings through high levels of service delivery, an evolving menu and an appealing value for money proposition.
| Sector Market capitalisation |
Technology £77.69 million |
Year to 31 October 2010 | £ million |
|---|---|---|---|
| Cost | £270,902 | Profit before tax | 4.9 |
| Valuation | £784,947 | Retained profit | 3.6 |
| Valuation basis | Bid price | Net assets | 31.0 |
IDOX is a provider of software and services to the UK public sector. It is a leading applications provider to local government for core functions relating to land, people and property, for example planning systems and election management software. Over 90 per cent. of UK local authorities are customers of IDOX. The group's products enable local authorities to manage information, knowledge, documents and content. The company recently acquired McLaren Software, which provides document management applications to the oil and gas, mining, utilities, pharmaceuticals and transport sectors.
| Sector | Financials | Period from 4 December 2010 | |
|---|---|---|---|
| Market capitalisation | £21.6 million | to 31 March 2011 | £ million |
| Cost | 620,193 | Loss before tax | (16.7) |
| Valuation | £697,620 | Loss after tax | (11.8) |
| Valuation basis | Bid price | Net assets | (4.9) |
Fulcrum was formerly a division of National Grid before reversing into Marwyn Capital 1 Limited, an AIM traded cash shell. The company designs and manages gas connections to large scale projects such as Heathrow's Terminal 5 and to smaller scale commercial projects. In over 50 years, the company has connected an average of 140,000 properties to the national gas distribution network each year. Fulcrum is also a licensed Independent Gas Transporter, operating pipelines connecting over 16,000 properties to the gas mains. The management team has significant industry experience and is implementing a turnaround strategy based on growth in market share, improved operational efficiency and cost control.
| Sector | Consumer goods | ||
|---|---|---|---|
| Market capitalisation | £29.11 million | Year to 31 December 2010 | £ million |
| Cost | £624,000 | Profit before tax | 3.8 |
| Valuation | £627,357 | Profit after tax | 2.3 |
| Valuation basis | Discounted cash flow | Net assets | 34.5 |
China Food Company is based in Weifang in Shandong province, China where it manufactures and distributes soya sauce and other condiments as well as animal feeds. The company recently completed the construction of a modern, dedicated soya sauce facility, which increases the company's condiments production capability to 50,000 tonnes. China Food has also launched a new, premium soya sauce brand – Xaka - to address the growing demand for upmarket products in China. China Food's products are distributed through major food retailers such as Tesco, Wal Mart and Carrefour.
| Sector | Support Services | ||
|---|---|---|---|
| Market capitalisation | £22.03 million | Year to 31 March 2011 | £ million |
| Cost | £440,231 | Loss before tax | (2.3) |
| Valuation | £516,360 | Loss after tax | (2.8) |
| Valuation basis | Bid price | Net assets | 14.8 |
Green Compliance has raised several rounds of equity finance to acquire compliance and regulatory services businesses. Acquisitions to date include companies providing hygiene, pest control and fire protection services. The business was founded by professionals with extensive experience in running large divisions of major support services organisations. The market is growing due to increasing regulatory requirements and increased awareness amongst organisations of the need to comply with such legislation.
| Sector | Basic materials | ||
|---|---|---|---|
| Market capitalisation | £31.2 million | Year to 31 December 2010 | £ million |
| Cost | £461,703 | Profit before tax | 65.8 |
| Valuation | £480,000 | Retained profit | 56.3 |
| Valuation basis | Bid price | Net assets | 345.9 |
Anglo Pacific owns mining and exploration interests in coal, uranium, gold, diamond, base metals and oil and gas. The continuing demand for raw materials, driven by the Asian economies, has led to a significant rise in commodity prices, which have been beneficial for Anglo Pacific's royalty and mining interests. The group's strategy is focused on securing new royalties through the acquisition of further mining interests.
| Sector | Automobiles & Parts | ||
|---|---|---|---|
| Market capitalisation | £42.01 million | Year to 31 December 2010 | £ million |
| Cost | £393,603 | Profit before tax | 0.4 |
| Valuation | £471,959 | Retained profit | 0.4 |
| Valuation basis | Bid price | Net assets | 11.5 |
Ubisense provides end to end real-time location solutions to companies allowing them to track people and assets with a high degree of accuracy. The group installs its proprietary technology onsite at the factories of high value manufacturing businesses such as BMW and Boeing. The system is used to track assets such as tools and vehicles with accuracy that satellite based systems cannot achieve. The company also has a division, called Geospatial, that delivers network planning and design applications and software to customers, principally in the utilities and telecom sectors.
| Sector | Electric and Electrical Equipment | ||
|---|---|---|---|
| Market capitalisation | £31.6 million | Year to 30 September 2010 | £ million |
| Cost | £610,958 | Profit before tax | 2.9 |
| Valuation | £456,067 | Profit after tax | 2.2 |
| Valuation basis | Bid price | Net assets | 11.5 |
Zytronic is a specialist manufacturer of touch sensors and optical filters for electronic displays. The products use an embedded sensing element based on projected capacitive technology (PCT). PCT provides durability, environmental stability and optical enhancement benefits to designers of integrated electronic displays. Zytronic operates from three modern factories near Newcastle, where it assembles the touch sensors, optical filters and other laminates in environmentally controlled clean rooms.
| Sector | Consumer goods | ||
|---|---|---|---|
| Market capitalisation | £531.63 million | Year to 30 June 2010 | £ million |
| Cost | £456,489 | Profit before tax | 108.2 |
| Valuation | £429,616 | Profit after tax | 107.1 |
| Valuation basis | Bid price | Net assets | 751.0 |
Asian Citrus is the largest independent orange plantation owner and operator in China. The company has three plantations – one is fully developed with approximately 1.3 million orange trees; the second is fully planted with 1.6 million orange trees; and another has been cleared and planting has commenced. Asian Citrus recently expanded into the concentrated juice market with the acquisition of a 92 per cent. interest in Beihai Perfuming Garden Juice Company and intends to expand production through the construction of a new facility by the end of 2011.
| Sector | Pharmaceuticals and Biotechnology | |||
|---|---|---|---|---|
| Market capitalisation | £99.01 million | Year to 30 June 2010 | £ million | |
| Cost | £425,678 | Loss before tax | 5.0 | |
| Valuation | £393,105 | Loss after tax | 4.3 | |
| Valuation basis | Bid price | Net assets | £66.4 |
Sinclair IS Pharma is a speciality pharma business with products focused in oncology, critical care and neurology. The company is the result of the merger of Sinclair Pharma and IS Pharma, in which ViCTory was a shareholder. The IS Pharma strategy was based on developing, acquiring and commercialising late-stage pharmaceuticals and medical devices. Sinclair viewed the IS Pharma portfolio as an attractive addition to its existing product offering and saw benefits to integrating these products into its distribution network.
Investment and portfolio information in this Part V has been derived from the Company's accounting records (taken from its unaudited management accounts to 31 July 2011) and, in respect of the information on the portfolio companies, from the latest financial year end accounts published by those companies. In respect of the information published by third parties that has been reproduced in this document, including information on the portfolio companies, the Company confirms that this information has been accurately reproduced and, as far as the Company is aware and able to ascertain from the information published, no facts have been omitted which would render the reproduced information inaccurate or misleading. All portfolio companies are valued in Sterling.
The Company is proposing to raise up to a further £30 million by way of the Share Offers. This will provide investors with the opportunity to make an investment in the Company and benefit from the available VCT tax reliefs. The Company also proposes to offer Shareholders an Enhanced Share Buy Back and Reinvestment Facility in relation to the Share Offers (details of which are set out below).
The net proceeds of the Share Offers will be invested in accordance with the Company's investment policy (whether or not the Company's investment policy is amended in accordance with the proposals set out in this document).
In addition to the Merger, the Company wishes to raise additional funds. The Directors believe that the success of the Manager in restructuring the portfolio and introducing a coherent set of disciplines for both Qualifying and Non-Qualifying Investments provides a solid basis for future growth and a better platform for attracting new investment from existing investors and new investors. Whilst the Directors do not believe that the VCT's sustainability is dependent upon its ability to raise new money under the Share Offers, they believe that the Company's long-term prospects would be strengthened and costs per share would be reduced further. Also, further investment under the Share Offers would allow the Company to take advantage of the attractive investment opportunities which the Directors believe can be found on AIM. AIM VCTs have raised little money over the past few years and pricing of newly issued stock on AIM should remain attractive due to the relative lack of capital available to small, AIM-traded companies.
The Directors also believe that recent changes to tax rates and pension contributions make VCT subscriptions very attractive.
The Share Offers will also enable the Directors to offer the Enhanced Share Buy Back and Reinvestment Facility which allows participating Shareholders to sell their Shares to the Company at a 1 per cent. discount to the most recently published Net Asset Value per Share prior to the allotment if the selling Shareholder applies the net proceeds to subscribe for Offer Shares under the Share Offers.
Under the Share Offers, investors are invited to subscribe an amount in pounds sterling rather than apply for a particular number of Offer Shares. The Directors have agreed that the price of Offer Shares will be calculated on the basis of the Pricing Formula.
The Pricing Formula is:
The most recent published Net Asset Value per New Share prior to the allotment (with an appropriate adjustment for any performance fee potentially payable based on the Net Asset Value at that date) divided by 0.95 to allow for issue costs of 5 per cent., calculated, in pence, rounded up to two decimal places.
No allotments will be made more than four Business Days after the publication of a Net Asset Value per share.
Based on an illustrative NAV of New Shares of 100p immediately following the Share Reconstruction and completion of the Scheme (and assuming no performance fee adjustment), Offer Shares will be allotted at 105.26p per Offer Share.
The subscription list for the 2011/12 Offer will open on 29 September 2011 and may close at any time thereafter but in any event not later than 5.00 pm on 5 April 2012. The 2012/13 Offer will open and will close on 10 September 2012, unless previously extended by the Directors (but not beyond 27 September 2012). The Share Offers may close earlier than the dates stated above if they are fully subscribed by an earlier date. Dealings in respect of the Offer Shares are expected to commence on the second day following allotment of such Offer Shares. Share certificates (where applicable) and certificates to enable a claim for tax reliefs to be made in respect of the Offer Shares will be posted to Shareholders within 14 days of each allotment. No temporary documents of title will be issued. No notification will be made to successful applicants prior to despatch of definitive share certificates. Prior to despatch of definitive share certificates (where applicable), transfers (if any) will be certified against the register.
Offer Shares in respect of the 2011/12 tax year will be allotted and issued in respect of the value of applications on 5 April 2012 and on any other date on which the Directors decide on or before 5 April 2012 and Offer Shares in respect of the 2012/2013 tax year will be allotted and issued in respect of the value of applications on 10 September 2012.
The Share Offers are not underwritten. Your attention is drawn to the risk factors set out on pages 7 to 9 of this document.
The costs of the Share Offers, with the exception of annual trail commission payable to authorised financial advisers, will be borne by the Company.
To allow the Share Offers to be made, it is proposed that the Articles of the Company be amended so that the continuation resolution to be put to Shareholders at the annual general meeting of the Company in 2013 is instead put to Shareholders at the annual general meeting in 2018 (and at each annual general meeting of the Company at five year intervals thereafter). Other amendments to the Articles are being made to further update the Articles as a result of the implementation of the Companies Act 2006 and other legislation.
A maximum of £30 million of Offer Shares are being made available under the Share Offers. In the event that applications are received in excess of the maximum subscription under the Share Offers, the Directors reserve the right to use their absolute discretion in the allocation of successful applications. The minimum investment per applicant is £2,000 (this minimum does not apply In relation to the Enhanced Share Buy Back and Reinvestment Facility, if an existing Shareholder applies for his/her entire shareholding in the Company to be offered through that facility, and his/her application is successful). There is no maximum investment, although tax reliefs are available on a maximum investment of £200,000 per individual in all VCTs in the 2011/12 tax year. A husband and wife can each invest up to £200,000 in each tax year.
In relation to the allotment date an announcement will be released through a Regulatory Information Service, including details of the issue price and total number of Offer Shares allotted.
Application will be made to the UK Listing Authority for the Offer Shares to be listed on the Official List and will be made to the London Stock Exchange for such shares to be admitted to trading on its market for listed securities. The Offer Shares will be issued in registered form and be transferable in both certificated and uncertificated form. The Offer Shares will rank for all dividends and other distributions declared, paid or made by the Company thereafter. It is anticipated that dealings in the Offer Shares will commence on the second Business Day following allotment. Dealings may not begin before notification of allotments is made. Revocation of the Share Offers cannot occur after dealings in the Offer Shares has commenced. The Company has applied for the Offer Shares to be admitted to CREST and it is expected that the Offer Shares will be so admitted, and, accordingly, enabled for settlement in CREST, as soon as practicable after Admission has occurred. Accordingly, settlement of transactions in the Offer Shares following Admission may take place within the CREST system if Shareholders wish. CREST is a voluntary system and Shareholders who wish to receive and retain share certificates will be able to do so.
As the initial costs of the Share Offers are fixed at 5 per cent. of the gross proceeds, the net proceeds of the Share Offers will be 95 per cent. of the amount subscribed per Offer Share. The maximum gross proceeds of the Share Offers (assuming subscription in full) will be £30 million. The net proceeds of the Share Offers (assuming subscription in full) are estimated to be £28.5 million before the payment or reinvestment of commissions.
The result of the Share Offers will be announced to the London Stock Exchange through a Regulatory Information Service provider authorised by the Financial Services Authority.
Applications for Offer Shares will be payable in full by cheque or banker's draft, to be submitted with the Offer Subscription Form(s). Applications will be accepted on a first-come first-served basis (provided cheques are not post-dated), subject always to the discretion of the Directors. Subscribers should, therefore, return their completed Offer Subscription Form(s), which are contained at the end of this document, as soon as possible. The Company intends to send a letter to each successful applicant (and his authorised financial intermediary where appropriate) acknowledging receipt of his Offer Subscription Form(s).
Completed Offer Subscription Forms (including cheques) should be sent to the Receiving Agent, The City Partnership (UK) Limited, Thistle House, 21 Thistle Street, Edinburgh, EH2 1DF.
The commission payable to intermediaries is as follows:
Authorised financial intermediaries may agree to waive all or part of the initial commission available to them and, by marking the relevant box on the Offer Subscription Form, authorise the Company to apply an amount equal to the amount of commission that would otherwise be payable to the authorised financial intermediary in a subscription for further Offer Shares in the Company for the account of their clients. All initial commission is payable by the Company and trail commission is payable by the Manager. The Manager reserves the right to negotiate bespoke commission arrangements in respect of trail commission. All trail commission arrangements are entered into subject to the final publication of regulations arising from the Retail Distribution Review by the Financial Services Authority. Whilst it is not anticipated that such rules will affect investments made prior to 1 January 2013, no commission payments will be made which infringe these regulations. The Directors reserve the right to negotiate bespoke commission arrangements with particular distributors where they believe it is in the interests of the Company to do so, anticipated not to exceed 3.5 per cent., in respect of initial commission.
Shareholders are advised to consult their professional advisors before investing in the Share Offers. Shareholders applying in the Share Offers will be eligible to receive a rebate of initial commission of 3.0 per cent. in the form of additional shares subscribed for under the Share Offers with 0.375 per cent. trail commissions payable to their intermediary (limited to five years, payable by the Manager). However, initial commission payable to an intermediary (up to 3 per cent.) will be deducted from the amount rebated. No initial commission will be payable to intermediaries from applications made under the Enhanced Share Buy Back and Reinvestment Facility, but trail commission will be paid at 0.375 per cent. (limited to five years, payable by the Manager).
In order to receive the correct rebates, Shareholders must make sure that they tick the box on the Offer Subscription Form to indicate that they are existing Shareholders, and that any relevant details regarding the intermediary are completed on the form. If no details for an intermediary are given then Shareholder will receive the full 3 per cent. rebate as above.
The Share Offers are only being made in the United Kingdom. In particular, this document does not constitute an offer to subscribe for, or the solicitation of an offer to subscribe for, Offer Shares in any jurisdiction in which such offer or solicitation is unlawful. The Offer Shares have not been, and will not be, registered under the United States Securities Act of 1933 (as amended) ("The Securities Act') or qualify for sale under the laws of any state of the United States or under applicable laws in Canada, Australia, the Republic of South Africa the Republic of Ireland or Japan and, subject to certain exceptions, may not be offered or sold in the United States or to, or for the benefit of, US persons (as such term is defined in Regulation S under the Securities Act) or to any national, resident or citizen of Canada, Australia the Republic of South Africa, the Republic of Ireland or Japan. Neither this document, nor any copy, may be sent to or taken into the United States, Canada, Australia or Japan or any other jurisdiction where to do so would violate the laws of that jurisdiction, nor may any of them be distributed to any US person (within the meaning of Regulation S under the Securities Act).
Full terms and conditions are set out in Part XI of this Prospectus.
The Company proposes to implement an Enhanced Share Buy Back and Reinvestment Facility following the launch of the Share Offers. The Company will buy back Shares at a 1 per cent. discount to the most recently published Net Asset Value per Share prior to the allotment, where the selling Shareholder subscribes for new Offer Shares under the Share Offers with the net proceeds from the share buy back. The costs of the Share Offers will be 5 per cent., of which up to 3 per cent. initial commission is normally payable to IFAs. However, in the case of Shareholders reinvesting proceeds from the sale of their Shares under the Enhanced Share Buy Back and Reinvestment Facility, no initial IFA commissions will be payable and the Company will rebate 3 per cent. of the subscription value through an allocation of additional Offer Shares to Shareholders at the Offer Price (with the number of Offer Shares being rounded down to the nearest whole number), with 0.375 per cent. trail commissions being payable to their intermediary (limited to five years, payable by the Manager) if the details regarding the intermediary are completed on the relevant form. Subscriptions which arise as a result of the Enhanced Share Buy Back and Reinvestment Facility will serve to re-establish the long-term nature of the Company's funding.
Shareholders who sell their Shares back to the Company and subsequently subscribe for Offer Shares under the Share Offers should not regard this, for tax purposes, as continuing with their existing holding. They will be subscribing for Offer Shares which will carry relief from income tax of up to 30 per cent., but which will also carry the requirement to hold the Offer Shares for five years from the date of subscription. Shareholders who sell the Offer Shares earlier than this time (except in the event of death) will have to repay some or all of the 30 per cent. income tax relief. Income tax relief on subscription is limited to an amount which reduces the investor's income tax liability to nil.
Shareholders can obtain ESBBF Application Forms from the Manager's website, or on request from the Company Secretary, The City Partnership (UK) Limited, on 0131 202 1895. Both forms need to be completed in order to utilise the Enhanced Share Buy Back and Reinvestment Facility. If in any doubt, in considering their intended course of action, Shareholders should consult their independent financial adviser as to whether they have already held their Shares for longer than the minimum three or five year period for income tax relief purposes, and whether they are willing to commit the funds for a further five years. They should also note the Risk Factors on pages 7 to 9 of this document and the tax position as outlined in Part VII of this document (see page 57).
Full terms and conditions of the Enhanced Share Buy Back and Reinvestment Facility are set out in Part XI of this document.
The following paragraphs apply to the Company and to persons holding Shares as an investment who are the absolute beneficial owners of such Shares and are resident in the UK. They may not apply to certain classes of persons, such as dealers in securities. The following information is based on current UK law and practice, is subject to changes therein, is given by way of general summary and does not constitute legal or tax advice.
The tax reliefs set out below are available to individuals aged 18 or over who receive Consideration Shares under the Scheme.
The Company has obtained approval as a VCT under Chapter 3 of Part 6 ITA 2007.
The Board considers that the Company has conducted its affairs and will continue to do so to enable it to qualify as a VCT. The implementation of the Scheme will not affect the VCT status of the Company.
The effective exchange of existing Amati VCT 2 Shares for Consideration Shares should not constitute a disposal of such shares for the purposes of UK taxation. Instead, the new holding of Consideration Shares should be treated as having been acquired at the same time and at the same cost as the existing Amati VCT 2 Shares from which they are derived.
For Amati VCT 2 Shareholders holding (together with their associates) more than 5 per cent. in the Amati VCT 2 Shares in issue, application for clearance has been made to HMRC in terms of Section 138 of TCGA 1992 that the treatment described above for persons who (together with their associates) own less than 5 per cent. of the Amati VCT 2 Shares in issue should also apply to them.
Existing Shareholders and New Shareholders under the Share Offers, Enhanced Share Buy Back and Reinvestment Facility and/or pursuant to the Scheme should all be afforded the usual tax reliefs as shareholders of a VCT.
Relief from income tax on a subscription for VCT shares will be withdrawn if the VCT shares are disposed of (other than between spouses) within five years of issue (or three years if issued after 5 April 2000 but before 6 April 2006) or if the VCT loses its approval within this period. Dividend relief ceases to be available once the investor ceases to own the VCT shares in respect of which it has been given.
A disposal by a shareholder of VCT shares will give rise to neither a chargeable gain nor an allowable loss for the purposes of UK capital gains tax. The relief is limited to the disposal of VCT shares acquired within the annual limit for any tax year.
An individual purchaser of existing VCT shares in the market will be entitled to claim relief from capital gains tax on disposal (as described in the paragraph "Receipt by Amati VCT 2 Shareholders of Consideration Shares under the Scheme" above).
Subscribers under the Share Offers should be entitled to income tax relief at 30 per cent. on the amount subscribed (provided the Offer Shares are held for at least five years, on a maximum of £200,000 per individual tax year), tax free dividends and capital distributions, and capital gains tax exemption on any gain realised on a disposal of the Offer Shares.
If a company which has been granted approval as a VCT subsequently fails to comply with the conditions for approval as a VCT, approval may be withdrawn or treated as never having been given. In these circumstances, reliefs from income tax on the initial investment are repayable unless loss of approval occurs more than five years after the issue (three years if issued after 5 April 2000 but before 6 April 2006) of the relevant VCT shares. In addition, relief ceases to be available on any dividend paid in respect of profits or gains in an accounting period ending when VCT status has been lost and any gains on the VCT shares up to the date from which loss of VCT status is treated as taking effect will be exempt, but gains thereafter will be taxable.
Shareholders not resident in the UK should seek their own professional advice as to the consequences of making an investment in a VCT as they may be subject to tax in other jurisdictions as well as in the UK.
The Company has to satisfy a number of tests to continue to qualify as a VCT. A summary of these tests is set out below. The following information is based on current UK law and practice, is subject to changes therein, is given by way of general summary and does not constitute legal or tax advice.
To qualify as a VCT, a company must be approved as such by HMRC. To obtain such approval it must:
A Qualifying Holding consists of shares or securities first issued to the VCT (and held by it ever since) by a company satisfying certain conditions and for which not more than £1 million was subscribed in any one tax year (nor more than £1 million in, broadly, any period of six months straddling two tax years). The conditions are detailed but include for funds raised before 6 April 2006, that the company must be a qualifying company, that it has gross assets not exceeding £15 million immediately before and not exceeding £16 million immediately after the investment and £7 million and £8 million immediately after the investment for funds raised thereafter that it applies the money raised for the purposes of a qualifying trade within certain time periods and that it is not controlled by another company. In certain circumstances, an investment in a company by a VCT can be split into a part which is a Qualifying Holding and a part which is a Non-Qualifying Holding.
A Qualifying Company must be unquoted (for VCT purposes this includes companies whose shares are traded on AIM and the PLUS Markets) 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 be carried on by, or be intended to be carried on by, the Qualifying Company or by a qualifying subsidiary at the time of the issue of shares or securities to the VCT (and at all times thereafter). The Qualifying Company must at all times 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 per cent. owned.
For the investment of funds raised after 5 April 2007 a Qualifying Company is one with less than 50 full-time equivalent employees and has not had more than £2 million of VCT funds raised after 5 April 2007 (together with funds under the Enterprise Incentive Scheme) in any rolling 12 month period.
A VCT must be approved at all times by HMRC. Approval has effect from the time specified in the approval. A VCT cannot be approved unless the tests detailed above are met throughout the most recent complete accounting period of the VCT and HMRC is satisfied that they will be met in relation to the accounting period of the VCT which is current when the application is made. However, where a VCT raises further funds, VCTs are given grace periods to invest those funds before such funds need to meet the relevant tests.
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 time to time when notice is given to the VCT but, in relation to capital gains tax 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.
Changes in legislation concerning VCTs in general, and VCT Qualifying Investments and qualifying trades in particular, may limit the number of new Qualifying Investment opportunities and/or reduce the level of returns which would otherwise have been achievable.
Shareholders are currently given the opportunity to review the future of the Company at regular intervals. The Articles contain provisions requiring the Directors to propose an ordinary resolution at the annual general meeting of the Company to be held in 2013, proposing that the Company shall continue in being as a VCT. If the Company has not then been liquidated, unitised, or reconstructed as a result of that ordinary resolution not being passed, the Directors will propose the same ordinary resolution at each fifth subsequent annual general meeting thereafter.
In view of the Share Offers, it is proposed that the Articles be amended so that the continuation resolution be put to Shareholders at the annual general meeting in 2018, and at subsequent annual general meetings at five year intervals thereafter. A circular which, inter alia, contains a resolution to amend the Articles, has been sent to Shareholders.
The Articles allow the Company to borrow up to an amount equal to the adjusted capital and reserves of the Company. The Directors have no present intention of using this power, but it has been made available to provide the Company with flexibility, if required, in future. A summary of the borrowing powers of the Company contained in the Articles is set out in paragraph 3 below.
| Date Share buy-back entered in register of members |
Number of Shares |
Price per Share (pence) |
|---|---|---|
| 30/5/2008 | 801,569 | 66.2 |
| 27/06/2008 | 391,808 | 60.5 |
| 17/07/2008 | 155,685 | 57.75 |
| 31/07/2008 | 62,595 | 52.75 |
| 30/02/2009 | 378,384 | 27.25 |
| 08/06/2009 | 175,000 | 23.25 |
| 14/07/2009 | 46,904 | 37.75 |
| 14/07/2009 | 99,146 | 37.25 |
| 09/10/2009 | 250,000 | 35.5 |
| 30/10/2009 | 304,312 | 38.25 |
| 11/11/2009 | 115,000 | 38 |
| 06/01/2010 | 116,856 | 34.25 |
| 12/02/2010 | 113,285 | 32.5 |
| 03/06/2010 | 117,250 | 32.25 |
| 07/06/2010 | 310,502 | 33.8 |
| 22/06/2010 | 35,977 | 31.5 |
| 30/07/2010 | 152,477 | 33.64 |
| 30/07/2010 | 78,879 | 33.53 |
| 03/08/2010 | 20,000 | 34.35 |
| 19/08/2010 | 22,525 | 34.35 |
| 25/08/2010 | 33,000 | 34.5 |
| 06/09/2010 | 20,000 | 34.5 |
| 09/12/2010 | 123,000 | 33.0 |
| 09/12/2010 | 58,952 | 33.0 |
| 10/12/2010 | 431,539 | 36.0 |
| 22/12/2010 | 50,000 | 37.37 |
| 27/01/2010 | 187,576 | 39.16 |
| 23/02/2011 | 58,459 | 39.00 |
| 04/03/2011 | 51,000 | 38.375 |
| 11/03/2011 | 91,294 | 38.38 |
| 19/05/2011 | 14,448 | 37.37 |
| 23/05/2011 | 322,451 | 37.575 |
| 24/05/2011 | 18,447 | 37.37 |
| 21/06/2011 | 41,120 | 37.82 |
| 18/07/2011 | 41,670 | 36.625 |
| 27/07/2011 | 35,322 | 37.875 |
| 02/08/2011 | 30,000 | 37.3958 |
| 22/08/2011 | 50,000 | 34.5 |
| 20/09/2011 | 31,428 | 34.5 |
| Shares repurchased in period | 5,437,860 |
| DS | = | N – X |
|---|---|---|
where:
and accordingly a pro rata number of Shares of each Shareholder shall redesignated (any fraction of a Deferred Share being rounded up) and such Deferred Shares so arising shall then be immediately repurchased by the Company as set out in paragraph (iv) below;
"ʻʻDeferred Shares'' deferred ordinary shares of 5 pence each in the capital of the Company''
securities for cash pursuant to the authority given in accordance with section 551 of the Act by resolutions 2.6.1 and 2.6.2 as if section 561(1) of the Act did not apply to such allotments, provided that the power provided by this resolution shall expire on the fifth anniversary of the date of the passing of this resolution unless renewed, varied or revoked by the Company in general meeting;
the Company may make a contract to purchase Shares under the authority conferred by this resolution prior to the expiry of such authority which will or may be executed wholly or partly after the expiration of such authority, and may make a purchase of such shares pursuant to any such contract or contracts;
The resolutions described at 2.6.1 to 2.6.4 (inclusive) will be proposed as ordinary resolutions and the resolution described at 2.6.5 to 2.6.12 (inclusive) will be proposed as special resolutions.
The Memorandum of the Company provides that the Company's principal object is to carry on the business of a VCT and to undertake all kinds of investment business.
The Articles currently contain provisions, inter alia, to the following effect:
Subject to any disenfranchisement as provided in the Articles and 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 a duly authorised representative) shall have one vote and, on a poll, every member present in person or by proxy shall have one vote for every share of which he is the holder.
All transfers of 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 a 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:
The Company may in general meeting by ordinary resolution 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 a share shall bear interest as against the Company. 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 Company.
If any member or other person appearing to be interested in shares of the Company is in default in supplying within 14 days after the date of service of a notice requiring such member or other person to supply to the Company in writing all or any such information as is referred to in section 793 of the CA 2006, 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 and rights of attendance at meetings of the Company in respect of the relevant shares and, additionally, in the case of a shareholder representing at least 0.25 per cent. by nominal value of any class of shares of the 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 will be divided amongst the holders of the shares according to the respective numbers of shares held by them and in accordance with the provisions of the Acts, subject to the rights of any shares which may be issued with special rights or privileges. The Articles provide that the liquidator may, with the sanction of a special resolution and any other sanction required by the IA 1986, divide amongst the members in specie the whole or any part of the assets of the Company in such manner as he may determine.
Whenever the capital of the 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 three-fourths of the issued shares of the class or with the sanction of a special resolution passed at a separate general meeting of such holders.
A Director who is in any way, directly or indirectly, interested in any transaction or arrangement with the Company shall, at a meeting of the Directors, declare, in accordance with the Acts, the nature of his interest.
3.9.1 The ordinary remuneration of the Directors (other than an executive director appointed under the Articles) shall be such amount as the Directors shall from time to time determine (provided that unless otherwise approved by the Company in general meeting, the aggregate of the ordinary remuneration of such Directors shall not exceed £90,000 per annum. The Directors shall also be paid by the Company all travelling, hotel and other expenses they may incur in attending meetings of the Directors or general meetings or otherwise in connection with the discharge of their duties.
At the annual general meeting of the Company next following the appointment of a Director he shall retire from office. 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 reappointed a Director.
The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital. The Directors shall restrict the borrowings of the Company and, by the exercise of the Company's voting and other rights or powers of control over its subsidiary undertakings (if any), secure that they restrict their borrowings, so that the aggregate amount at any time outstanding in respect of money borrowed by the group, being the Company and its subsidiary undertakings for the time being, shall not, without the previous sanction of an ordinary resolution of the Company, exceed the amount standing to the credit of the reserves of the Company (all as shown by the latest published audited balance sheet of the Company) subject to certain adjustments and deductions as set out in the Articles.
At any time when the Company has given notice in the prescribed form (which has not been revoked) to the Registrar of Companies of its intention to carry on business as an investment company (a Relevant Period), distribution of the Company's capital profits (within the meaning of section 833 of the CA 2006) 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 CA 2006, the Board may determine whether any amount received by the Company is to be dealt with as income or capital or partly one way and partly the other. During a Relevant Period, any loss realised on the realisation or payment or other dealing with any investments or other capital assets and, subject to the CA 2006, any expenses, loss or liability (or provision therefor) which the Board considers to relate to capital 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 Company or be regarded or treated as profits of the Company available for distribution (as defined by section 829 of the CA 2006) except to the extent that the requirements for investment company status under the CA 2006 do not require a company to prohibit the distribution of capital profits in its articles of association or be applied in paying dividends on any shares in the Company. In periods other than a Relevant Period any amount standing to the credit of the capital reserve may be transferred to the revenue reserves of the Company or be regarded or treated as profits of the Company available for distribution (as defined by section 829 of the CA 2006) or be applied in paying distributions on any shares in the Company.
The Articles contain provisions requiring the Board to propose an ordinary resolution at the annual general meeting of the Company to be held in 2013 and at the annual general meetings at five year intervals thereafter, proposing that the Company shall continue in being as a VCT. If such resolution is not passed, the Board shall within nine months of such meeting convene a general meeting where two special resolutions shall be proposed: 1) a special resolution for the reorganisation or reconstruction of the Company; and if such resolution is not passed, 2) a special resolution requiring the VCT to be wound up voluntarily. If neither resolution is passed, the Company shall continue as a venture capital trust.
CREST, a paperless settlement system enabling securities to be evidenced otherwise than by a certificate and transferred otherwise than by a written instrument, was introduced in July 1996. The Articles are consistent with CREST membership and allow for the holding and transfer of shares in uncertified form pursuant to the Regulations.
An annual general meeting shall be held once a year (and specified as such in the notice convening the meeting) at such time (within a period of six months beginning on the day following the Company's accounting reference date) and place as may be determined by the Directors.
An annual general meeting and any general meeting at which it is proposed to pass a special resolution or (except as provided by statute) a resolution of which special notice has been given to the Company, shall be called by at least 21 clear days' notice in writing. Any other general meeting shall be called by at least 14 clear days' notice given by the Company. Notice shall be given to all members, other than those who are not entitled under the Articles to receive notice.
Every notice calling a general meeting shall specify the place, day and time of the meeting. Every notice must include a prominent statement that a member entitled to attend and vote is entitled to appoint a proxy or proxies to attend and, on a poll, vote instead of him and that a proxy need not be a member of the Company.
Subject to the provisions of the Acts relating to authority, pre-emption rights and otherwise and of any resolution of the Company in general meeting passed pursuant thereto, all unissued shares shall be at the disposal of the Directors, and they may allot (with or without conferring a right of renunciation), grant options over or otherwise dispose of them to such persons, at such times and on such terms as they think proper.
| Percentage | ||
|---|---|---|
| Directors | Number of Shares |
of issued Share capital |
| Christopher Moorsom | 65,741 | 0.17 |
| James Hambro | 31,926 | 0.08 |
| Michael Killingley | 40,725 | 0.10 |
| David Page | 38,309 | 0.10 |
| Percentage | ||
|---|---|---|
| Proposed Directors | Number of Shares |
of issued Share capital |
| Julian Avery | nil | nil |
| Christopher Macdonald | nil | nil |
Save as disclosed in this paragraph 4, no Director nor any person (to the extent the same is known to, or could with reasonable diligence be ascertained by, that Director) connected with any Director has any interest in the share or loan capital of the Company.
| Directors | Annual Fees |
|---|---|
| Christopher Moorsom | £18,000 |
| James Hambro | £15,000 |
| Michael Killingley | £15,000 |
| David Page | £15,000 |
| Proposed Directors | Annual Fees |
|---|---|
| Julian Avery | £22,000 |
| Christopher Macdonald | £14,000 |
The fees paid to the Directors by the Company for the financial period ended 31 January 2011 under the arrangements in force at the date of this document were £15,000 for each Director and £18,000 for the Chairman, Christopher Moorsom plus NIC/VAT (where applicable).
In respect of the year ending 31 January 2012, it is estimated that aggregate fees payable to the Directors and Proposed Directors will be approximately £65,000.
4.7 The Company maintains directors' and officers' liability insurance for the benefit of the Directors and the Company Secretary.
4.8 The following are directorships (unless otherwise stated) and partnerships held by the Directors in the five years prior to the date of this document and the principal activities of the Directors other than in relation to the Company where these are significant with respect to the Company: Directorships and partnerships
| Directors | Current | Previous |
|---|---|---|
| Christopher Moorsom | Bath Building Society Royal Welsh College of Music and Drama Singer & Friedlander AIM 3 VCT Limited ViCTory VCT PLC |
Chepstow Races Limited Northern Races Limited Bath Racecourse Company Limited |
| James Hambro | AHG (2006) Limited Anchor Meadow Limited Barratt & Cooke Limited CCH Advisers Limited Circle Property Management Limited Enterprise Capital Trust PLC Franco's Limited Health Investments Limited Henniker Mews Residents' Association Limited Hansteen Holdings PLC I Hennig & Co Limited J O Hambro Capital Limited J O Hambro Capital Management Group Limited J O Hambro Capital Management Limited J O Hambro Capital Management Unit Trust Managers J O Hambro Unit Trust Managers Limited JOHCMG Share Trustee Limited Kimberley Farms Limited Merchant Properties General Partner Limited Merchant Properties Nominees Limited Merchant Properties Two General Partner Limited Merchant Properties Two Nominee 1 Limited Merchant Properties Two Nominee 2 Limited Motorstep Limited Patientfirst (Burnley) Limited Patientfirst (GPFC) Holdings Limited Patientfirst (Hinckley) Limited Patientfirst (Leamington Spa) Limited Patientfirst (RBS) Holdings Limited Patientfirst (Wingate) Limited Patientfirst Partnerships Limited PHIP (5) Limited PHIP (6) Limited PHIP (Hetherington Road) Limited PHIP (Hoddesdon) Limited PHIP (Milton Keynes) Limited PHIP (RHL) Limited PHIP (Sheerness) Limited PHIP (SSG Norwich) Limited PHIP CH Limited PHIP CHH Limited PHP Empire Holdings Limited Primary Health Investment Properties (No. 2) Limited Primary Health Investment Properties (No. 3) Limited Primary Health Investment Properties (NO. 4) Limited Primary Health Investment Properties Limited Primary Health Properties PLC Ryder Court Properties Limited |
|
| SPCD (Northwich) Limited SPCD (Shavington) Limited ViCTory VCT PLC Wilton (St. James's) Limited Wiltons Holdings Limited |
| Michael Killingley | Beale plc Falkland Islands Holdings PLC JE Beale plc Singer & Friedlander AIM 3 VCT Limited The Portsmouth Harbour Ferry Company Limited University of Southampton Holdings Limited ViCTory VCT PLC |
Atkins ABG Limited Conder Environmental Public Limited Company (in liquidation) |
|---|---|---|
| David Page | Aveyron Capital Partners Limited Best Hatts Limited Boxlane Limited CHG Brands Limited Crestgale Limited Dellasud Limited Franco Manca 2 UK Limited KEFI Ltd KIMSSAM Ltd Meatailer Limited Rocca LTD Sophie and May Ltd South Park Capital Limited Souvalaki & Bar Limited The Real Greek Food Company Limited Tootsies Restaurants Limited (in administration) ViCTory VCT PLC Young & Co's Brewery PLC |
CHG 3 Limited CHG 5 Limited GBK Franchises Limited GBK Restaurants Limited GBK Retail Limited Gourmet Burger Kitchen Limited Soho Equity LLP |
| Julian Avery | Amati VCT 2 plc Charles Taylor Consulting PLC EIG (Acquisitions) Limited EIG (Investments) Limited Fenchurch Partners LLP St Michaels Hospice (Trading) Limited St Michaels Hospice Hastings St Michaels Hospice Lottery Limited Warner Estate Holdings PLC |
Aspen Insurance Holdings Limited (a Bermudan company) EIG (Finance) Limited IAG UK Holdings Limited The High Sheriffs' Association of England & Wales RYE Golf Club Company Limited |
|---|---|---|
| Christopher Macdonald Amati VCT 2 plc | Braemar Group Limited Brooks Macdonald Asset Management (Tunbridge Wells) Limited Brooks Macdonald Asset Management Limited Brooks Macdonald Financial Consulting Limited Brooks Macdonald Funds Limited Brooks Macdonald Group PLC Brooks Macdonald Nominees Limited Brooks Macdonald Tax Services Limited Plastic Propaganda Limited |
Moulsford Preparatory School Trust Limited |
4.9.4 been a partner or senior manager in any partnership which, at the time of or within 12 months following his being a partner, has been subject to a compulsory liquidation, administration, or partnership voluntary arrangement;
4.9.5 owned any assets which have been subject to a receivership or been a partner in partnership subject to a receivership where he was a partner at the time or within the 12 months preceding such event; or
The value of dividends paid since the merger is 6.5p per Share. In order to exceed the targeted return which triggers the entitlement of SFIML to subscribe for additional Shares, a further 40.7p of dividends would require payment by 31 January 2013. In the audited statutory accounts of the Company for the year ended 31 January 2011 the Directors stated that regardless of performance over this period, the Directors would not sanction this level of dividend within that period and, therefore, do not foresee any circumstances under which the option would crystalise.
5.1.3 An investment management and administration agreement (the "IMA") dated 19 March 2010 between the Company and the Manager whereby the Manager agreed to manage the investments and other assets of the Company on a discretionary basis subject to the overall policy of the Directors. The Company will pay to the Manager under the terms of the IMA a quarterly fee of 0.4375 per cent. of the net asset value of the Company in arrears (i.e. 1.75 per cent. annum).
The Manager will also be entitled to receive a performance related fee on the achievement of certain performance criteria. The performance fee is calculated at the end of each performance period (each being a period which corresponds to the Company's half yearly financial periods) and becomes payable upon publication of the results of the Company for that performance period. The current performance period commenced on 1 August 2011.
A formula is used in order to arrive at the amount of the total performance fee based on the Company's starting NAV as at 22 March 2010 (adjusted for the write-downs for unquoted holdings within three months of this date) of 42.83p per Share ("Starting NAV per Share"), the weighted average NAV per Share of any subsequent allotment of Shares (for instance, under any share offers or under a dividend reinvestment scheme), and the relevant performance hurdles. Returns are defined by comparing the Starting NAV per Share and the weighted average NAV per Share adjusted for prior dividends ("Returns"). At the date of this document, there is only one pool and the formula allows for the creation of further pools, referred to as additional pools. The ordinary shares issued under any subsequent share offer (including the New Shares issued in respect of Merger, and each allotment of New Shares in respect of the proposed Share Offers and the Dividend Reinvestment Scheme) will each form separate pools for this purpose, based on a weighted average subscription price per New Share across the Share Offers as a whole, adjusted to deduct issue costs. The IMA will be amended by the Deed of Variation (see below) – so that the Consideration Shares to be issued pursuant to the Scheme will also be included as a separate pool.
The principle followed is that no performance fees are payable on the first 20 per cent. of Returns from the Starting NAV per share (which is 8.57p, so the minimum threshold for NAV plus dividends paid is 51.40p per share), and that the Returns from each pool are also subject to a hurdle rate test of 8 per cent. simple interest. In addition, fees are only paid where the Returns are sustained for at least six months. The fee itself is based on 20 per cent. of the Returns per Share in excess of the first 20 per cent. of Returns, multiplied by the number of Shares in pools which have passed the 8 per cent. hurdle rate, less any previous performance fees paid.
Under the terms of the IMA, the Manager has also agreed to provide certain company secretarial and administrative services to the Company. The Company agreed to pay to the Manager a fee of £65,000 (subject to an annual increase in line with the retail prices index) annually in arrears in respect of the provision of these services. The appointment of the Manager as investment manager and/or administrator and company secretary may be terminated on one year's notice.
respective roles in relation to the Share Offers or the Scheme (other than loss which arises as a result of their negligence, wilful default or their failure to comply with statutory requirements or their obligations under the agreement), all of which are customary provisions in an agreement of this nature. The facilitation agreement may be terminated by either the Company or the Manager upon the material breach by the other of any of the warranties, or the material breach of their obligations contained within the agreement.
7.1 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 Board as to the position of the Company's Shareholders who hold Shares other than for trading purposes. Any person who is in any doubt as to his taxation position or may be subject to taxation in any jurisdiction other than the United Kingdom should consult his professional advisers.
| Shares | £'000 |
|---|---|
| Shareholders' equity | |
| Share capital | 1,982 |
| Share premium | 2,955 |
| Capital redemption reserve | 754 |
| Revenue reserve | (55) |
| Merger Reserve | 3,018 |
| Special Reserve | 16,186 |
| Capital reserve – realised | (4,738) |
| Revaluation reserve | (1,589) |
| 18,513 |
There has been no material change in the capitalisation of the Company since 31 July 2011.
The following table shows the Company's net indebtedness as at 31 July 2011:
| £'000 | ||
|---|---|---|
| A | Cash | 719 |
| B | Cash equivalents | 0 |
| C | Trading securities | 0 |
| D | Liquidity (A+B+C) | 719 |
| E | Current financial receivable | 310 |
| F | Current bank debt | 0 |
| G | Current position of non-current debt | 0 |
| H | Other current financial debt | (334) |
| I | Current financial debt (F+G+H) | (24) |
| J | Net current financial indebtedness (I-E-D) | 695 |
| K | Non-current bank loans | 0 |
| L | Bonds issued | 0 |
| M | Other non-current loans | 0 |
| N | Non-current financial indebtedness (K+L+M) | 0 |
| O | Net financial indebtedness (J+N) | 695 |
8.3 There is no indirect or contingent indebtedness.
9.7 Howard Kennedy Corporate Services LLP and the Liquidators have given and not withdrawn their written consent to the issue of this document and the inclusion of their names and the references to them in this document in the form and context in which they appear.
9.8 The total costs and expenses of the Scheme are anticipated to be £212,000, including any irrecoverable value added tax, which will be split equally between the Company and Amati VCT 2. The costs of the Share Offers are 5 per cent. of the gross amount raised (including all fees and commissions payable). At full subscription the aggregate costs of the Share Offers and the Scheme are estimated to be £360,000.
9.17 The Company is subject to the investment restrictions relating to a venture capital trust in ITA 2007, as more particularly detailed in Part VIII of this document, and in the Listing Rules which specify that (i) the Company must, at all times, invest and manage its assets in a way which is consistent with its object of spreading investment risk and in accordance with its published investment policy as set out on page 33 of this document; (ii) the Company must not conduct any trading activity which is significant in the context of its group as a whole; and (iii) the Company may not invest more than 10 per cent., in aggregate, of the value of the total assets of the issuer at the time an investment is made in other listed closed-ended investment funds. Any material change to the investment policy of the Company will require the approval of Shareholders pursuant to the Listing Rules. The Company intends to direct its affairs in respect of each of its accounting periods so as to qualify as a venture capital trust and accordingly:
9.17.1 the Company's income is intended to be derived wholly or mainly from shares or other securities, as this phrase is interpreted by HMRC;
Copies of the following documents will be available for inspection during normal business hours on any day (Saturdays, Sundays and public holidays excepted) from the date of this document until the Effective Date at the offices of Howard Kennedy Corporate Services LLP, 19 Cavendish Square, London W1A 2AW and also at the registered office of the Company:
28 September 2011
Please read these terms and conditions carefully and keep them in case you need to refer to them in the future.
This information should not be regarded as a recommendation to buy or hold Shares in the Company. The value of Shares and the income from them can fall as well as rise and you may not recover the amount of money you invest.
If you are in any doubt about what you should do, you should consult an independent financial adviser. If you have any questions about the Dividend Reinvestment Scheme, you can write to: DRIS Administration, The City Partnership (UK) Limited, Thistle House, 21 Thistle Street, Edinburgh EH2 1DF.
(d) the cash to be carried forward for investment on the next Reinvestment Day.
(a) agrees to provide the Company with any information which it may request in connection with such application and to comply with legislation relating to venture capital trusts or other relevant legislation (as the same may be amended from time to time); and
(b) declares that a loan has not been made to the Applicant or any associate of the Applicant which would not have been made, or would not have been made on the same terms, but for the Applicant offering to subscribe for, or acquiring, Shares and that the Shares are being acquired for bona fide commercial purposes and not as part of a scheme or arrangement the main purpose of which, or one of the main purposes of which, is the avoidance of tax.
The Scheme Administrator and its agents (including any broker) may effect transactions notwithstanding that they have a direct or indirect material interest or a relationship of any description with another party which may involve a conflict with its duty to DRIS participants under the DRIS.
The Scheme Administrator is authorised to disclose any information regarding Shareholders or their participation in the DRIS to any relevant authority, or as required by such authority, whether by compulsion of law or not. The Scheme Administrator shall not be liable for any disclosure made in good faith provided that the Scheme Administrator believes that such disclosure has been made in accordance with the foregoing requirements.
Each of the provisions of the DRIS shall be severable and distinct from one another and if one or more of such provisions is invalid or unenforceable the remaining provisions shall not in any way be affected.
The Scheme Administrator has procedures to help resolve all complaints from customers effectively. If an Applicant has any complaints about the service provided to him or her or wishes to receive a copy of the Scheme Administrator's complaints procedure please write to the Scheme Administrator at the address stated at the bottom of this Prospectus.
This service is a Company sponsored scheme which means that the Scheme Administrator charges the Company a fee which is representative to the costs of operating it. This arrangement means that DRIS participants are not charged an annual fee. If an Applicant would like more detail on this arrangement please write to the Scheme Administrator at the address below.
The Scheme Administrator will take reasonable care in operating the DRIS, and will be responsible to an Applicant for any losses or expenses (including loss of shares) suffered or incurred by him or her as a direct result of breach by the Scheme Administrator of these DRIS Terms and Conditions, negligence, wilful default or fraud. The Scheme Administrator does not accept liability for any indirect or consequential loss suffered by an Applicant or for any loss which does not arise as a result of its breach of these DRIS Terms and Conditions, negligence, wilful default or fraud.
The Scheme Administrator shall not be responsible for delays or failure to perform any of its obligations due to acts beyond its control. Such acts shall include, but not be limited to, acts of God, strikes, lockout, riots, acts of war, terrorist acts, epidemics, governmental regulations superimposed after the fact, communication line failures, power failure, earthquakes or other disasters.
Any personal data obtained from an Applicant in providing this service will be held by the Scheme Administrator in accordance with the relevant legislation. The Scheme Administrator will only hold, use or otherwise process such personal data of an Applicant as is necessary to provide him or her with the service. The Applicant's details will only be disclosed in accordance with the principles set out in the Data Protection Act 1998:
An Applicant has a right to request to view the personal data that the Scheme Administrator holds on him or her. The Scheme Administrator may charge an Applicant a small fee for providing him or her access to this information,
All communications between the Scheme Administrator and an Applicant will be conducted in the English language.
These DRIS Terms and Conditions are governed by and shall be construed in accordance with the laws of England and Wales.
Save where the context otherwise requires, words and expressions defined in the Prospectus have the same meanings when used in these terms and conditions and in the Offer Subscription Form and the section headed "Notes on how to complete the Offer Subscription Form" set out below.
the terms, and subject to the conditions, set out in the Prospectus including these terms and conditions, and subject to the Articles of the Company;
Prospectus (as may be supplemented by a supplementary prospectus), or any part thereof and accordingly you agree that no person responsible solely or jointly for the Prospectus or any part thereof or involved in the preparation thereof shall have any liability for any such other information or representation and you acknowledge that no person is authorised in connection with the Share Offers to give any information or make any representation other than as contained in the Prospectus (as may be supplemented by a supplementary prospectus) and, if given or made, any information or representation must not be relied upon as having been authorised by the Company or any of its agents;
(xxi) agree that a failure to receive, process or accept your application for Offer Shares does not give rise to any right of action by any person against the Company, Howard Kennedy Corporate Services LLP, the Receiving Agent or any other person;
(xxii) agree that any error in the register of members of the Company arising as a result of your remittance not being honoured on first presentation or as a result of any other error in connection with your application for Offer Shares, or as a result of termination or avoidance of any agreement to allocate Offer Shares pursuant to these terms and conditions of subscription may be rectified and, in addition and without prejudice to the foregoing, you hereby irrevocably authorise the Company, or any person appointed by it for this purpose, to execute on your behalf any instrument of transfer which may be necessary to effect any re-allocation or sale of Offer Shares to any other person arising as a result of the foregoing. The right to rectify the register of members of the Company and/or the power to re-allocate or sell Offer Shares contained in this paragraph are in addition to any other rights, powers and remedies which would otherwise be available to the Company in the event of a breach by you of these terms and conditions of Subscription;
Authorised financial intermediaries who, acting on behalf of their clients, return valid Offer Subscription Forms bearing their name and FSA number will be paid either of the following, based on the amount paid in respect of the Offer Shares allocated for each such Offer Subscription Form:
The Directors reserve the right to negotiate bespoke commission arrangements with particular distributors where they believe it is in the interests of the Company to do so, anticipated not to exceed 3.5 per cent. in respect of initial commission. Shareholders investing in the Share Offers are entitled to receive a rebate of up to 3% of the amount subscribed, less any commission payable to an intermediary, which will be reinvested in the Company through application for additional Offer Shares under the Share Offers (with the number of Offer Shares being rounded down to the nearest whole number).
The Manager will pay annual trail commission of 0.375 per cent., limited to five years, or such other commission as agreed by the Manager (where the trail commission option has been chosen by authorised financial intermediaries) of the net asset value attributable to financial intermediaries' clients' holdings. Trail commission is expected to be calculated annually based on holdings at the Company's year end date and paid annually in May of each year following the publication of the year end accounts of the Company, or as otherwise determined by the Manager (the first such payment being expected to be made in May 2012). In calculating the trail commission a quarter of the annual rate shall be applied to each quarter end's NAV per Share, and this shall be multiplied by the relevant number of Shares held by a financial intermediary's client. The Manager will be entitled to rely on a notification from an investor that he has changed his adviser, in which case the trail commissions will cease to be payable. In the event of the termination of the Manager's appointment as investment manager to the Company, any continued obligation of the Manager to pay further annual trail commissions will also terminate, The Manager's calculation of trail commissions shall be conclusive.
Shareholders in ViCTory and Amati VCT 2 should vote either by attending the relevant general meeting in person or using the Form of Proxy which is contained within their respective circular (enclosed with this Prospectus).
Shareholders can choose to vote for or against each resolution or choose to withhold their vote. Completion and return of the Form of Proxy does not preclude a shareholder from subsequently attending the relevant general meeting and voting in person.
Nothing. However, as you will not have voted on the resolutions your preferences will not have been taken into account and you will be carried by the majority vote. As stated in each circular, your directors recommend that you vote in favour of the resolutions.
The proposals for the Merger and Share Offers are aimed at re-launching ViCTory, and the Share Reconstruction makes it easier for shareholders to monitor the performance of their investment from this point onwards.
In common with the other funds managed by Amati Global Investors, it is proposed that the merged VCT should contain the name "Amati" to be consistent and to underline the relationship between ViCTory and the Manager.
Yes, both ViCTory Shareholders and Amati VCT 2 Shareholders will receive new share certificates in ViCTory. The old share certificates held by ViCTory shareholders will cease to be valid. The old share certificates held by Amati VCT 2 Shareholders will remain valid, but will in effect be worthless.
The Share Offers are open now, and run until 10 September 2012. If you wish to subscribe for Offer Shares during the 2011/12 tax year you must ensure that your correctly completed application reaches The City Partnership (UK) Limited by 5.00pm on 5 April 2012. The minimum investment is £2,000 under each of the Share Offers.
You need to follow the instructions on page 97 and complete the Offer Subscription Form on page 99 of the Prospectus. You are advised to seek advice from an independent financial adviser before investing.
Subscription monies are invested at price per Offer Share which takes in to account 5 per cent. issue costs incurred by ViCTory, and makes allowance for commission payments to intermediaries. However, existing Shareholders investing in the Share Offers are entitled to receive a rebate of 3 per cent. of the amount subscribed, less any commission payable to an intermediary, which will be reinvested in ViCTory through application for additional Offer Shares.
Please tick the box in section 2 of the Offer Subscription Form in order to show that you are eligible for this rebate.
You simply need to complete sections 2, 3 and 5 of the Offer Subscription Form in the Prospectus. You do not have to be applying for Offer Shares under the Share Offers to elect for your existing shares to join the Dividend Reinvestment Scheme. Alternatively, send a signed letter clearly stating your name, address and how many Shares you hold in ViCTory, requesting that you join the Dividend Reinvestment Scheme. You can also join the DRIS if you are taking part in the Enhanced Share Buy Back and Reinvestment Facility and complete section 5 of the blue form.
No Shareholder in ViCTory is still subject to a minimum holding period for income tax relief purposes. Those who expect to be taxpayers in the UK should consider using the facility (including Amati VCT 2 Shareholders who receive shares in ViCTory after the Merger has taken effect). Those who do so will be selling their existing shares and making a new investment in ViCTory, and will be able to claim income tax relief on the value of the investment in these new Offer Shares, subject to their tax status, which will be subject to holding the Offer Shares for five years. Investors should note that VCT income tax relief is subject to an investment limit of £200,000 in each tax year. ViCTory Shareholders should also note that in selling their original Shares, any Capital Gains Tax deferral relief which they utilised when they bought their Shares will be lost. If in any doubt, Shareholders should seek advice from an independent financial adviser.
The cost is 3.2 per cent., and this is paid for from the proceeds of the sale of the Shareholder's existing shareholding. Shares are bought back at a 1 per cent. discount to the most recently published NAV per Share prior to the allotment. The proceeds are then used to re-invest in the Share Offers which are priced at NAV per Share divided by 0.95 (to take into account 5 per cent. issue costs), with 3 per cent. of the value of the subscription being rebated and used to apply for additional Offer Shares at this price.
You should complete both the yellow form and the blue form which were sent to ViCTory Shareholders with this Prospectus. If you do not have these, or would like replacements, please contact City Partnership. The yellow form relates the sale of your existing shares. The blue form relates to the application for Offer Shares using the proceeds from the sale of your existing shares. These forms will need to be returned together with the relevant share certificates. Amati VCT 2 Shareholders will receive the forms after the Merger is implemented.
If you are a ViCTory shareholder you will receive a new share certificate in November 2011 following the Share Reconstruction. However, Shareholders can apply for the Enhanced Share Buy Back and Reinvestment Facility before this date with their current share certificate. If Shareholders apply with their existing share certificate after the new one has been sent out, they will be asked to return the new share certificate before the forms can be processed.
If you are an Amati VCT 2 Shareholder, you can participate in the Enhanced Share Buy Back and Reinvestment Facility once the Scheme has taken effect and you have received your new share certificate.
If Shareholders have lost their share certificates they should contact The City Partnership (UK) Limited, the Company Secretary of ViCTory on 0131 202 1895, who will send them a form of indemnity. The proposed changes to the Articles mean that this form no longer requires countersignature from a bank. When a shareholder has completed and returned this form the registrars will be instructed to issue replacement share certificates. Alternatively this form of indemnity can be sent with the yellow and blue forms in lieu of a share certificate.
ViCTory will endeavour to process applications as soon as practicable. There are a number of constraints that will affect the timing. ViCTory will only be able to allot Offer Shares when it has a sufficient number of applicants to justify the cost of the allotment. If there is heavy demand then ViCtory may need to restructure its reserves so as to increase the level of distributable reserves, or it may need to renew its buy back authority through a shareholder vote. Both of these would take time and cause a significant delay in processing further applications. Therefore ViCTory does not guarantee any specific time frame for dealing with applications, but will at all times use its best efforts to deal with them in a timely manner.
No, for the reasons set out in answer to the previous question. If you wish the allotment to be in tax year 2011/12 you are encouraged you to submit the forms as early as possible.
Yes. If you wish to do so, you should apply using the Offer Subscription Form contained on page 99 of the Prospectus in the normal way, following the instructions which precede it. There is no need to do this at the same time as completing the blue and yellow forms. All forms that you do complete, including the Form of Proxy, can be returned to The City Partnership (UK) Limited in the envelope provided.
The forms can be witnessed by anybody over the age of 18, including family members.
You should contact the administrator of the Nominee Account and request that the shares are transferred back into your own name in certificated form, prior to applying.
For investment advice you should speak to your independent financial adviser. For any other matters please contact the Company Secretary and Receiving Agent, The City Partnership (UK) Limited, on 0131 202 1895, or by email at [email protected].
The following notes should be read in conjunction with the Offer Subscription Form and the Terms and Conditions of the Share Offers. Save where the context otherwise requires, words and expressions defined in the Prospectus dated 28 September 2011 have the same meanings when used in these notes
Before making an application to acquire Offer Shares you are strongly recommended to consult an independent financial adviser authorised under the Financial Services and Markets Act 2000. It is essential that you complete all parts of the Offer Subscription Form in accordance with the instructions in these notes. Please send the completed Offer Subscription Form, together with your cheque or bankers' draft by post, or deliver it by hand, to The City Partnership (UK) Limited, 21 Thistle Street, Edinburgh EH2 1DF.
If you have any questions on how to complete the Offer Subscription Form please contact The City Partnership (UK) Limited on 0131 202 1895 or your independent financial adviser.
Insert (in figures) the amounts you are applying to invest in the Share Offers in the relevant Boxes (state nil if appropriate). You may post-date your cheque (prior to the closing date of the Shares Offers) if you elect the tax year 2012/2013. Please add the total sum subscribed in the final box.
Insert in BLOCK CAPITALS your full name, permanent address, daytime telephone number, date of birth, National Insurance number and, if you have one, your email address. Joint applications are not permitted.
Read the declaration and sign and date the Offer Subscription Form in Section 3. If someone other than the applicant named in Box 2 signs on such applicant's behalf, such signatory must ensure that the declaration given on behalf of such applicant is correct.
Authorised intermediaries who are entitled to receive commission should stamp and complete Section 4, giving their full name and address, telephone number and details of their authorisation under the Financial Services and Markets Act 2000. The right is reserved to withhold payment of commission if the Company is not, at its sole discretion, satisfied that the agent is so authorised. Intermediaries should indicate which commission option they prefer by ticking one of the boxes. Intermediaries can choose to waive some or all of their upfront commission, which will be invested in additional Offer Shares for their clients.
Please tick the box in Section 5 if you wish to take part in the Dividend Reinvestment Scheme.
If you wish to have your dividends paid directly into a bank or building society please complete the dividend mandate and sign where indicated.
Please note that the minimum investment is £2,000 under each of the Share Offers. The maximum investment, on which tax reliefs on investments in VCTs are available, is £200,000 in each of the 2011/12 and 2012/13 tax years. Please attach your cheque or bankers' draft to the Offer Subscription Form for the exact amount shown in Section 1. Your cheque or bankers' draft must be made payable to "ViCTory VCT PLC Offer Account" and crossed "A/C Payee only". Your payment must relate solely to this Offer Subscription Form. No receipt will be issued.
If the value of the Offer Shares applied for is £11,000 or more (or is one of a series of linked applications, the value of which exceeds that amount) payment should be made by means of a cheque drawn on an account in the name of the applicant. If this is not practicable and you use a cheque drawn by a third party or a building society cheque or bankers' draft, you should write the name, address and date of birth of the applicant on the back of the cheque or bankers' draft and:
Alternatively, verification of the applicant's identity may be provided by means of a "Letter of Introduction" in the prescribed form from a UK or European Economic Area financial institution (such as a bank or stockbroker) or other regulated person (such as a solicitor, accountant or appropriate independent financial adviser) who is required to comply with the ML Regulations. The relevant financial institution or regulated person will be familiar with the requirements and the relevant form.
(one item from List A AND one item from List B)
| List A (Verification of Identity) | List B (Verification of Address) |
|---|---|
| Current signed passport | Recent* utility bill (but not a mobile telephone bill) |
| Current UK Driving Licence | Recent* local authority tax bill |
| HM Revenue and Customs Tax Notification | Recent* bank or building society statement |
| Firearms Certificate | Recent* mortgage statement from a recognised lender |
Please send original (not passport or driving licence) or certified copies of the documents. Certified as a true copy of the original by a UK lawyer, banker, authorised financial intermediary (e.g. financial adviser or an FSA authorised mortgage broker), accountant, teacher, doctor, minister of religion, postmaster or sub-postmaster. The person certifying the document should state that the copy is a true copy of the original, print their name, address, telephone number and profession and sign and date the copy. *"Recent" means within the last three months.
No Money Laundering verification is required to be enclosed if the application is for less than £11,000 or if payment is by means of a cheque drawn on an account in the name of the applicant (provided that (a) the cheque includes details of the applicant's bank account or building society account (as applicable) and (b) the cheque is drawn on a UK or European Union authorised bank or credit institution). Please note, however, that ViCTory VCT PLC may, in its absolute discretion, require Money Laundering verification and that Money Laundering verification will be required by introducing financial advisers.
PLEASE COMPLETE SECTION 5 OR 6 EVEN IF YOU ARE NOT TAKING PART IN THE SHARE OFFERS BUT WISH FUTURE DIVIDENDS PAID ON YOUR EXISTING SHAREHOLDEING REINVESTED (SECTION 5) OR PAID DIRECTLY TO A BANK OR BUILDING SOCIETY ACCOUNT (SECTION 6)
| Pin or staple your |
|---|
| cheque(s) |
| and/or banker's |
| draft(s) here. |
If you are in any doubt about the action you should take you are recommended to consult a person authorised under the Financial Services and Markets Act 2000 who specialises in advising on the acquisition of shares and other securities. IMPORTANT: before completing this form please read the Terms and Conditions of the Share Offers and the accompanying notes (both as set out in the set out in the prospectus of the Company dated 28 September 2011 (the "Prospectus")).
PLEASE USE BLOCK CAPITALS TO COMPLETE THIS FORM. The 2011/12 Offer closes at 5.00 pm on 5 April 2012 (or earlier if the maximum subscription has been reached). The 2012/13 Offer closes at 5.00 pm on 10 September 2012 or such later date as the Directors may determine in their absolute discretion (but not beyond 27 September 2012).
Make your cheque or banker's draft out to "ViCTory VCT PLC Offer Account' and cross it with the words "A/C payee only". Return this form by post or by hand (during normal business hours) to The City Partnership (UK) Limited, Thistle House, 21 Thistle Street, Edinburgh EH2 IDF.
1
✃
I offer to subscribe the following amount (minimum £2,000 under each of the Share Offers) or such lesser amount for which this subscription may be accepted, on the Terms and Conditions of the Share Offers.
| For tax year 2011/12 | For tax year 2012/13 | Total |
|---|---|---|
| £ | £ | £ |
NB: No declaration had been made at the date of this Prospectus as to what tax reliefs, if any, will be available in respect of investments made during the tax year 2012/13.
Please tick this box if you are an existing shareholder in ViCTory VCT plc By signing this form I HEREBY DECLARE THAT I have read the Terms and Conditions of the Share Offers contained in the Prospectus and agree to be bound by them. I understand this is a LONG-TERM investment and have read the RISK FACTORS. Title: First Name: Surname: Address: Postcode: Daytime Telephone Number: Date of Birth: National Insurance Number: Email Address: Signature Date 3 4 2 Intermediaries to complete. FSA Number must be quoted All intermediaries MUST advise their clients of the Risk Factors set out on pages 7 to 9 of the Prospectus. FSA Number: Firm Name: Address: Postcode: Contact: Telephone No: Fax No: Email Address: (A) To apply for the 3.00% initial commission option, place a tick in this box. Insert ʻALL' or the percentage of the subscription in respect of which you wish the initial 3.00% commission to be waived and reinvested in additional Offer Shares. OR (b) To apply for the 2.25% commission and annual trail commission option, place a tick in this box. Insert ʻALL' or the percentage of the subscription in respect of which you wish the initial 2.25% commission to be waived and reinvested in additional Offer Shares.
ViCTory VCT PLC and The City Partnership (UK) Limited cannot accept responsibility if any details quoted by you are incorrect. For assistance on the completion of this Offer Subscription Form, please contact The City Partnership (UK) Limited on weekdays between 9.00 am and 5.30 pm on 0131 202 1895 or email [email protected]. No investment advice can be given.
Tick Box 5 if you would like to participate in the Dividend Reinvestment Scheme (this will also apply to any existing shareholding you have in ViCTory VCT PLC). If you are subscribing for Offer Shares which you intend to transfer into a nominee name and wish to re-invest your dividends, please contact your nominee to ensure that they will permit dividend re-investment for the Offer Shares that they hold on your behalf. You or your nominee can contact The City Partnership (UK) Limited on 0131 202 1895 if you have any questions regarding dividend reinvestment.
Dividends that are not reinvested under the Dividend Reinvestment Scheme will be paid by cheque sent to the Shareholder's registered address. Alternatively, dividends paid in cash may be paid directly into bank or building society accounts. In order to facilitate this, please complete the mandate form. Do not complete the mandate form if you wish to participate in the Dividend Reinvestment Scheme.
5
Only complete the mandate form if you DO NOT wish to participate in the Dividend Reinvestment Scheme.
All dividends on any Shares held in ViCTory VCT PLC may be paid directly into bank and building society accounts. In order to facilitate this, please complete the mandate instructions form below.
Dividends paid directly into your account will be cleared funds on the dividend payment date. Your bank or building society statement will identify details of the dividends as well as the dates and amounts paid.
Please forward, until further notice, all dividends that may from time to time become due on any Shares now standing, or which may hereafter stand, in my name in the register of members of ViCTory VCT PLC to: Bank or Building Society reference number and details:
| Name of Bank: | ||
|---|---|---|
| Address of Bank: | ||
| Account Number (Please quote all digits including zeros) Sort Code Number - - |
||
| Signature | Date | |
| Shareholder Title and Full Name (BLOCK CAPITALS PLEASE) | Postcode |
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