Registration Form • Oct 26, 2015
Registration Form
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Calculus VCT plc D Share Offer Registration Document THIS DOCUMENT IS IMPORTANT AND REQUIRES IMMEDIATE ATTENTION. IF YOU ARE IN ANY DOUBT ABOUT WHAT ACTION YOU SHOULD TAKE, YOU ARE RECOMMENDED TO SEEK YOUR OWN FINANCIAL ADVICE IMMEDIATELY FROM YOUR STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL ADVISER AUTHORISED UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 ("FSMA").
This document constitutes a registration document (the "Registration Document") dated 26 October 2015 issued by Calculus VCT plc (the "Company"), prepared in accordance with the Prospectus Rules made under Section 84 of FSMA and has been approved by the Financial Conduct Authority ("FCA") in accordance with FSMA. Additional information relating to the Company is contained in a securities note (the "Securities Note") issued by the Company of even date herewith. A brief summary written in non-technical language and conveying the essential characteristics and risks associated with the Company and the D ordinary shares of 1p each in the share capital of the Company (the "D Shares") which are being offered for subscription (the "Offer") is contained in a summary issued by the Company of even date herewith (the "Summary"). The Summary, Securities Note and this Registration Document together comprise a prospectus (the "Prospectus") which has been filed with the FCA in accordance with the Prospectus Rules and you are advised to read the Prospectus in full.
The Company and its Directors, whose names appear on page 6 of this document, accept responsibility for the information contained in this Registration Document. To the best of the knowledge of the Company and its Directors (who have taken all reasonable care to ensure that such is the case) the information contained in the Registration Document is in accordance with the facts and does not omit anything likely to affect the import of such information.
(Registered in England and Wales under company number 07142153)
In connection with the Offer, SPARK Advisory Partners Limited ("SPARK") is acting for the Company and for no-one else and will not (subject to the responsibilities and liabilities imposed by FSMA or the regulatory regime established thereunder) be responsible to anyone other than the Company for providing the protections afforded to customers of SPARK nor for providing advice in relation to the Offer. SPARK is authorised and regulated in the United Kingdom by the FCA.
Calculus Capital Limited ("Calculus Capital") is the Company's investment manager in respect of its venture capital portfolio. Calculus Capital will not be responsible to anyone other than the Company for the provision of protections afforded to customers of Calculus Capital nor for providing advice in relation to the Offer. Calculus Capital is authorised and regulated in the United Kingdom by the FCA.
Application will be made to the UKLA for the D Shares offered for subscription pursuant to the Prospectus to be listed on the premium segment of the Official List and will be made to the London Stock Exchange for such D Shares to be admitted to trading on its main market for listed securities. It is expected that admission will become effective and that trading in the D Shares will commence three Business Days following allotment.
The Offer is conditional upon the approval of the Shareholders of the Company at the general meeting and class meetings of the Company to be held on 24 November 2015.
Copies of this Registration Document, the Securities Note and the Summary (and any supplementary prospectus published by the Company) are available free of charge from the offices of the Company's manager, Calculus Capital at 104 Park Street, London, W1K 6NF and the Company's lawyers, RW Blears LLP, at 125 Old Broad Street, London, EC2N 1AR.
YOUR ATTENTION IS DRAWN TO THE RISK FACTORS ON PAGES 4 AND 5.
| Page | ||
|---|---|---|
| PART 1 | RISK FACTORS | 4 |
| CORPORATE INFORMATION | 6 | |
| DEFINITIONS | 8 | |
| INTRODUCTION | 11 | |
| THE DIRECTORS AND THE MANAGERS | 13 | |
| MEMORANDUM AND ARTICLES OF ASSOCIATION | 20 | |
| PART 2 | CALCULUS VCT PLC | 31 |
| Section A General information |
31 | |
| Section B Analysis of the portfolio |
42 | |
| Section C Financial information on the Company |
44 | |
| PART 3 | DOCUMENTS AVAILABLE FOR INSPECTION | 46 |
Shareholders and prospective shareholders should consider carefully the following risk factors in addition to the other information presented in this document and the Prospectus as a whole. If any of the risks described below 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 investors in the Company 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 and results of operations. The value of Shares could decline due to any of these risk factors, and investors could lose part or all of their investment. Investors who are in any doubt should consult their independent financial adviser. The attention of prospective investors is drawn to the following risks:
be paid to the shareholders of a particular class from the income and/or capital assets of another class provided that such amounts are accounted for no later than three years from the end of the accounting period in which the last allotment of shares of the former class took place. The Directors may, at their discretion, utilise this power to pay dividends to D Shareholders from the profits attributable to Ordinary and C Shareholders for the four years following the close of the Offer. In addition, subject to existing Shareholders' approval, the D Shares Fund may be merged with the Ordinary Shares Fund and/or the C Shares Fund, at which point the investments and other net assets attributable to each fund will be merged and the cost cap attributable to the merged fund will be equal to the aggregate of the cost caps applicable to each of the classes being merged.
| Directors | Michael O'Higgins (Chairman) Kate Cornish-Bowden Arthur John Glencross Steven Guy Meeks |
|---|---|
| Registered Office | Beaufort House 51 New North Road Exeter EX4 4EP |
| Telephone: 01392 477500 | |
| Company Registration Number | 07142153 |
| Venture Capital Investment Manager |
Calculus Capital Limited 104 Park Street London W1K 6NF |
| Telephone: 020 7493 4090 Website: www.calculuscapital.com |
|
| Structured Products Investment Manager |
Investec Structured Products 2 Gresham Street London EC2V 7QP |
| Telephone: 020 7597 4000 Website: www.investecstructuredproducts.com |
|
| Fund Administrator and Company Secretary |
Capita Sinclair Henderson Limited (trading as Capita Asset Services) Beaufort House 51 New North Road Exeter EX4 4EP |
| Registrars | Capita Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU Tel: 0371 664 0324 If you need any more help please call us on 0371 664 0324. Calls are charged at the standard geographic rate and will vary by provider. Callsfrom outside the United Kingdom are charged at the applicable international rate. Our lines are open 9am to 5.30pm, Monday to Friday, excluding public holidays in England and Wales. You can also contact us by email – [email protected] or by fax – 020 8639 2300. The helpline cannot provide advice on the merits of the Proposals nor give any financial, legal or tax advice. |
| Auditors | Grant Thornton UK LLP 30 Finsbury Square London EC2P 2YU |
| Receiving Agent | Capita Registrars |
|---|---|
| Corporate Actions | |
| The Registry | |
| 34 Beckenham Road | |
| Beckenham | |
| Kent BR3 4TU | |
| Solicitors | RW Blears LLP |
| 125 Old Broad Street | |
| London EC2N 1AR | |
| Sponsor | SPARK Advisory Partners Limited 5 St John's Lane London EC1M 4BH |
| "Admission" | the date on which the D Shares are listed on the Official List of the UKLA and admitted to dealing on the LSE's main market for listed securities; |
|---|---|
| "AIM" | the Alternative Investment Market; |
| "Application Form" | the application form for use in respect of the Offer; |
| "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 Day" | any day (other than a Saturday or Sunday) on which clearing banks are open for normal banking business in the City of London; |
| "CA 1985" | Companies Act 1985, as amended; |
| "CA 2006" | Companies Act 2006, as amended; |
| "C Shareholders" | holders of C Shares; |
| "C Shares" | C ordinary shares of 1p each in the capital of the Company; |
| "C Shares Fund" | the net assets of the Company attributable to the C Shares (including, for the avoidance of doubt, any income and/or revenue arising from or relating to such assets); |
| "Calculus Capital" | Calculus Capital Limited, which is authorised and regulated by the FCA; |
| "Capita Asset Services" | a trading name of Capita Registrars Limited; |
| "Company" | Calculus VCT plc; |
| "CREST" | the Certificateless Registry for Electronic Share Transfer, operated by Euroclear; |
| "D Shareholders" | holders of D Shares; |
| "D Shares" | D ordinary shares of 1p each in the capital of the Company being offered for subscription pursuant to the Offer; |
| "D Shares Fund" | the net assets of the Company attributable to the D Shares, if they are issued, including, for the avoidance of doubt, any income and/or revenue arising from or relating to such assets; |
| "FCA" | the Financial Conduct Authority; |
| "FSMA" | the Financial Services and Markets Act 2000, as amended; |
| "FTSE 100 Index" | a capitalisation weighted index of the 100 most highly capitalised companies traded on the London Stock Exchange; |
| "Group" | the Company and its subsidiary undertakings (if any); |
| "General Meeting" | the general meeting and class meetings of the Company to be held |
| on 24 November 2015; |
| "Interim Return Date" | 14 December 2015 (in respect of the Ordinary Shares) and 14 March 2016 (in respect of the C Shares); |
|---|---|
| "Investec Bank plc" | Investec Bank plc, a wholly owned indirect subsidiary of Investec plc, which is part of an international banking group with operations in three principal markets: the United Kingdom and Europe, Asia and Australia, and South Africa; |
| "Investec Structured Products team" | the Investec Structured Productsteam within Investec Bank plc and a trading name of Investec Bank plc; |
| "Investor" | a person who subscribes for D Shares pursuant to the Offer; |
| "ISDX-listed" | a company listed on the ICAP Securities and Derivatives Exchange, ISDX Growth Market, a prescribed market for the purposes of section 118 of Financial Services and Markets Act 2000 operated by ICAP; |
| "ITA 2007" | Income Tax Act 2007, as amended; |
| "Listing Rules" | listing rules issued by the FCA, acting as the UK Listing Authority, pursuant to Part VI of the FSMA; |
| "London Stock Exchange" or "LSE" | London Stock Exchange plc; |
| "Managers" | Calculus Capital and Investec Structured Products (and each a "Manager"); |
| "Memorandum" | the memorandum of association of the Company; |
| "NAV" or "net asset value" | the net asset value of a company calculated in accordance with that company's normal accounting policies; |
| "Offer" | the offer for subscription of D Shares as described in the Prospectus; |
| "Official List" | the official list of the UKLA; |
| "Ordinary Shareholders" | holders of Ordinary Shares; |
| "Ordinary Shares" | ordinary shares of 1p each in the capital of the Company; |
| "Ordinary Shares Fund" | the net assets of the Company attributable to the Ordinary Shares (including, for the avoidance of doubt, any income and/or revenue arising from or relating to such assets); |
| "Performance Incentive" | the proposed performance incentive arrangements with Calculus Capital described in paragraph 4.9 of Part 2 of this document; |
| "Prospectus" | the Securities Note, the Summary and this document; |
| "Prospectus Rules" | the prospectus rules of the UK Listing Authority; |
| "Qualifying Company" | an unquoted company carrying on a qualifying trade wholly or mainly in the UK and which satisfies certain other conditions as defined in Chapter 4 Part 6 of the ITA 2007; |
| "Qualifying Investors" | an individual aged 18 or over who subscribes for D Shares within the investor's qualifying subscription limit of £200,000 per tax year; |
| "Qualifying Investment" | an investment of the Company which meets the requirements for a qualifying investment under Chapter 4 of Part 6 of the ITA 2007; |
|---|---|
| "Receiving Agent" | Capita Asset Services, in its capacity as receiving agent to the Offer; |
| "Registrar" | Capita Asset Services, in its capacity as registrars to the Company; |
| "Registration Document" | this document, being a registration document published by the Company dated 26 October 2015 which forms part of the Prospectus; |
| "Securities Note" | the securities note published by the Company dated 26 October 2015 which forms part of the Prospectus; |
| "Shareholder" | a holder of Shares; |
| "Shareholder Proceeds" | amounts paid by way of dividends or other distributions, share buy-backs, proceeds on a sale or liquidation of the Company and any other proceeds or value received, or deemed to be received, by Shareholders in the Company, excluding any income tax relief on subscription; |
| "Shares" | shares in the capital of the Company; |
| "SPARK" or the "Sponsor" | SPARK Advisory Partners Limited, the Company's sponsor; |
| "Structured Product(s)" | notes and/or deposits and/or securities whose cash flow characteristics reflect the performance of an index or indices (which may or may not be linked to a market); |
| "Summary" | the summary published by the Company dated 26 October 2015 which forms part of the Prospectus; |
| "UK" | the United Kingdom; |
| "UKLA" or "UK Listing Authority" | the UK Listing Authority, being the Financial Conduct Authority acting in its capacity as the competent authority for the purposes of Part 6 of the Financial Services and Market Act 2000; |
| "Venture Capital Investments" | shares in, or securities of, a Qualifying Company held by a venture capital trust which meets the requirements described in Parts 6, Chapters 3 and 4 to the ITA 2007; |
| "VCT" or "venture capital trust" | a company satisfying the requirements of Chapter 3 of Part 6 of ITA 2007 for venture capital trusts; and |
| "VCT Rules" | the legislation, rules and HMRC interpretation and practice regulating the establishment and operation of venture capital trusts. |
VCTs were introduced in 1995 to encourage individuals to invest indirectly in a range of small and growing UK trading companies. VCTs are investment companies whose shares are listed on the Official List and traded on the London Stock Exchange. To date, over £5 billion has been raised by VCTs (source: AIC Statistics).
VCTs were created so that their investors could benefit from a spread of Qualifying Investments under the supervision of professional managers who can contribute valuable experience, contacts and advice to the businesses in which they invest. For the tax benefits to be available, VCTs are required to be approved by HM Revenue & Customs for the purposes of the venture capital trust legislation. VCTs are entitled to exemption from corporation tax on any gains arising on the disposal of their investments and such gains may be distributed tax-free to investors. Dividends and capital distributions from VCTs are currently tax-free, subject to a maximum investment of £200,000 per individual per tax year and no change in VCT regulations.
The Company was originally designed for investors seeking to invest through a tax efficient vehicle in two distinct investment classes:
However, following a change in investment policy and strategy, rather than making further Investments in Structured Products, the Board intends that funds not employed in VCT qualifying investments, or pending such employment, may be invested in a variety of investments selected to preserve capital, whilst generating income, which may include:
No new investments are to be made in the Structured Products portfolio and all capital raised by the Offer will be invested in line with an amended investment policy set out at Part 2 of this document.
The Offer opens on 26 October 2015 and will close at 11.00am on 29 April 2016, unless extended. The Offer is conditional upon the relevant resolutions being passed by Shareholders at the General Meeting and Class Meetings and on valid applications being received to invest, in total, a minimum of £1 million, which latter condition may be waived by the Board. Applications will be accepted (in whole or part) at the discretion of the Board, but the Board intends to meet applications on a 'first come, first served' basis.
The D Shares will be issued at an initial NAV of £1.00 per share at a price determined for each investor by reference to a pricing formula which takes into account the level of Promoter's Fee, Adviser Charge/commission and early application and loyalty discount which is applicable to that Investor.
Investors whose applications are received by 18 December 2015 will benefit from a 1.0% early application discount (0.5% where applications are received after 18 December but before 29 January 2016). Additionally, existing shareholders who apply will receive a 0.5% loyalty discount.
The minimum investment by an investor under the Offer is £5,000 (subject to the Directors' discretion to accept any lower amount) and thereafter in multiples of £1,000.
Fractions of D Shares will not be issued. Subscription monies of £1 or more not used to acquire D Shares will be refunded.
The issue costs in respect of the Offer, chiefly the Promoter's Fee and adviser commission, will be borne by Investors through the application of a pricing formula with the exception of annual trail commission, the cost of which will be borne directly by the Company. The Promoter shall bear the other costs of the Offer from its Promoter's Fee.
The net proceeds for the Company from the Offer, assuming full subscription, Offer costs of 5.0% and ignoring reinvested commission, will therefore amount to approximately £7,600,000.
The Board comprises four non-executive Directors, three of whom (including the Chairman) are independent of the Managers. The Board has substantial experience of venture capital businesses and overall responsibility for the Company's affairs, including determining the investment policy of the Company. John Glencross is a director of Calculus Capital.
Michael is an experienced private investor with significant VCT and EIS holdings. In his business career, Michael was a Managing Partner with PA Consulting (successfully leading its Government and IT Consulting Groups), a Partner at Price Waterhouse (now PricewaterhouseCoopers), and a Principal Administrator at the OECD. He began his working career as an academic at London School of Economics and the University of Bath, and more recently has been a Visiting Professor at both, as well as having held visiting appointments at Harvard University and the Australian National University. In October 2015, he became chairman of the Lancashire and London Pensions Partnership and an Independent Person for Tunbridge Wells Borough Council. He is also until 31 October 2015 chairman of the NHS Confederation, a nonexecutive director of Network Rail and chair of its Remuneration Committee and vice-chairman of Hedgehog, a pensions company. He was a non-executive director of HM Treasury and chair of the Treasury Group Audit Committee until March 2014. He was chair of The Pensions Regulator between January 2011 and March 2014, chairman of the Audit Commission for the six years to September 2012 and of the charity Centrepoint for eight years until December 2011.
Kate worked for Morgan Stanley Investment Management for 12 years between 1992 and 2004, where she was Managing Director and head of Morgan Stanley Investment Management's Global Core Equity team. Before joining Morgan Stanley, Kate spent two years at M&G Investment Management as a financial analyst. More recently Kate has acted as a consultant providing financial research to private equity and financial training firms. Kate is a non-executive director and chairman of the Remuneration Committee of Scancell Holdings plc, and a non-executive director of Arcis Biotechnology Holdings Ltd. She is a Chartered Financial Analyst (CFA), holds a Masters in Business Administration (MBA), and has completed the Financial Times Non-Executive Director Diploma.
John co-founded Calculus Capital in 1999, creating one of the UK's most successful, independent private equity firms focused on investing in smaller, proven companies. John has over 30 years' experience in private equity, corporate finance, and operational management. During that time, he has invested in, advised on or negotiated more than 100 transactions and served on publicly quoted and private corporate boards. He is a director of Neptune-Calculus Income and Growth VCT plc and Terrain Energy and was formerly a director of Human Race and Hembuild Group Limited. Terrain, Human Race and Hembuild Group Limited are companies in which this Company has invested. He is also a board member of the Enterprise Investment Scheme Association and a member of its Tax and Technical and its Regulatory Committees. Before co-founding Calculus Capital, John served as an Executive Director of European Corporate Finance for UBS for nine years where he advised on M&A, IPOs, restructurings and recapitalisations, strategic alliances and private equity. Prior to this, John was headhunted to be Head of the Mergers & Acquisitions Group of Philips and Drew, a 100 year old London based financial institution. At the start of his career, John qualified as a Chartered Accountant with Peat Marwick (subsequently KPMG), where he then went on to be recruited as a founder member of Deloitte's newly established Corporate Finance practice in London. John graduated from Oxford University with an MA (Hons) in Philosophy, Politics and Economics.
Steve has had a successful 30 year career in the financial markets with NatWest, UBS and Santander with a specialisation in structured products. Steve is also a former consultant to Investec, having assisted the Investec Structured Products team with the design and launch of the Company. Following a brief retirement, Steve is currently Executive Chairman of Smart Carbon Control Limited, a software business that provides energy management solutions to the commercial property and data centre market. Steve is also chairman of Get Smarter Energy Limited an energy procurement business.
The Directors are currently or have been within the last 5 years, a member of the administrative, management or supervisory bodies or partners of the companies and partnerships mentioned below:
| Name | Current | Past 5 Years |
|---|---|---|
| Michael O'Higgins | Lancashire and London Pensions Partnership Hedgehog (1) Limited The NHS Confederation (Services) Company Limited The NHS Confederation Network Rail Infrastructure Limited Network Rail Limited Calculus VCT plc Millers Wharf Management Company Limited |
Archimed LLP Oxford Medical Diagnostics Limited Centrepoint Soho National Centre for Social Research ANU (UK) Foundation The NHS Confederation Group Company Limited |
| Steve Meeks | Canley Consulting Limited Calculus VCT plc Get Smarter Energy Limited Smart Carbon Control Limited |
|
| Kate Cornish- Bowden | Calculus VCT plc Scancell Holdings PLC Arcis Biotechnology Holdings Limited KCB Research Limited |
|
| John Glencross | Calculus Advisory Limited Calculus Asset Management Limited Calculus Capital Limited Calculus Capital Partners Limited Calculus Holdings Limited Calculus Nominees Limited Calculus VCT plc McDonald Glencross Limited Terrain Energy Limited Neptune-Calculus Income and Growth VCT plc The EIS Association Limited The Alchemy Circle Ltd |
Hembuild Group Limited Human Race Group Limited Investec SPV Limited Neptune-Calculus SPV Limited Chepstow Place Limited |
Save as set out below, as at 25 October 2015 (this being the latest practicable date prior to publication of this document), the Company is not aware of any person who, directly or indirectly, has an interest in the Company's capital or voting rights which is notifiable under UK law (under which, pursuant to CA 2006 and the Listing Rules and the Disclosure & Transparency Rules of the FCA, a holding of 3 per cent. or more must be notified to the Company). No shareholders have different voting rights. To the best of the knowledge and belief of the Directors, the Company is not directly controlled by any other party and at the date of the Prospectus, there are no arrangements in place that may, at a subsequent date, result in a change of control of the Company.
| Ordinary | % of Ordinary | ||
|---|---|---|---|
| Shares held | share capital | ||
| Michael O'Higgins | 205,500 | 4.34 |
As at 25 October 2015 (the latest practicable date prior to the publication of this document), the interests of the Directors (and their immediate families) in the issued Ordinary Share capital of the Company were as follows:
| % of total issued | ||
|---|---|---|
| Director | Shares held | share capital |
| Kate Cornish-Bowden | 10,000 C Shares | 0.15 |
| John Glencross | 25,000 Ordinary Shares | 0.37 |
| Steven Meeks | 20,550 Ordinary Shares | 0.31 |
| Michael O'Higgins | 205,500 Ordinary Shares | 3.08 |
Save as set out above, no Director nor any member of their respective immediate families has an interest in the capital of the Company which is or would, immediately following the Offer, be required to be entered in the register maintained under section 809 of the CA 2006 nor does any person connected with any Director within the meaning of section 252 of the CA 2006) have any such interest which would, if the connected person were a Director, be required to be disclosed and the existence of which is known to or could with reasonable diligence be ascertained by such Director.
The Directors, other than Kate Cornish-Bowden, were appointed under letters of appointment dated 22 February 2010. Kate Cornish-Bowden was appointed under a letter of appointment dated 10 February 2011. The appointments are subject to an initial period expiring immediately following the first annual general meeting, and (subject to re-election at the first annual general meeting) thereafter the appointments may be terminated on 3 months' notice. No arrangements have been entered into by the Company entitling the Directors to compensation for loss of office, nor have any amounts been set aside to provide pension, retirement or similar benefits. The total annual remuneration receivable by Michael O'Higgins as chairman is £20,000 (plus applicable employers' National Insurance Contributions). The total annual remuneration receivable by Steve Meeks and Kate Cornish-Bowden is £15,000 each (plus applicable employers' National Insurance Contributions). John Glencross does not receive any remuneration from the Company in respect of his appointment. Aggregate Directors' emoluments for the year ending 29 February 2016 is expected to be £50,000 (plus applicable employers' National Insurance Contributions).
The Directors, other than John Glencross (for the reasons set out in the paragraph below), act and will continue to act independently of Calculus Capital and Investec Structured Products. No majority of the Directors will be directors or employees of, or former directors or employees of, or professional advisers to Calculus Capital or Investec Structured Products or any other company in the same group as Calculus Capital or Investec Structured Products.
John Glencross is Chief Executive of Calculus Capital. Save for the management arrangements, performance incentive arrangements and promoters arrangement set out in paragraphs 4.1 – 4.9 of Part 2 of this document, under which Calculus Capital and Investec Structured Products are entitled to fees and pursuant to which Investec Structured Products is appointed to make investments on behalf of the Company in Structured Products issued by Investec Bank plc, as at 25 October 2015 (this being the latest practicable date prior to publication of this document) there were no other potential conflicts of interest between the duties of any Director and their private interests and/or duties.
Except as stated above, no Director is or has been interested in any transaction which is or was unusual in its nature or conditions or significant to the business of the Company and which was effected by the Company in the period since its incorporation and remains in any respect outstanding or unperformed.
No loan or guarantee has been granted or provided by the Company to or for the benefit of any of the Directors.
The Company has taken out directors' and officers' liability insurance for the benefit of its directors, which is renewable on an annual basis.
The Directors are currently, or have been within the last 5 years, a member of the administrative, management or supervisory bodies or directors of the companies or partners of the partnerships as set out on page 14.
No Director has any convictions in relation to fraudulent offences during the previous five years.
Save as disclosed in this paragraph, in the five years prior to the publication of this document, there were no bankruptcies, receiverships or liquidations of any companies or partnership where any of the Directors were acting as (i) a member of the administrative, management or supervisory body, (ii) a partner with unlimited liability, in the case of a limited partnership with a share capital, (iii) a founder where the company had been established for fewer than five years nor (iv) a senior manager during the previous 5 years.
There has been no official public incrimination and/or sanction of any Director by statutory or regulatory authorities (including designated professional bodies) and no Director has ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of a company or from acting in the management or conduct of the affairs of any company during the previous five years.
When the Company was launched, the Board appointed two investment managers to manage two distinct investment portfolios. The VCT qualifying Venture Capital Investments are managed by Calculus Capital, whilst the non-VCT qualifying Structured Products are managed by the Investec Structured Products team. However, having given notice to the Company of the termination of their appointment on 23 June 2015, Investec Structured Products will cease to act as discretionary investment manager of the Company, which will instead focus exclusively on Venture Capital Investments under the sole management of Calculus Capital.
Calculus Capital is the Venture Capital Investments portfolio manager.
Calculus Capital was established in 1999 and is authorised and regulated by the FCA. A pioneer in tax efficient investing, Calculus Capital created the UK's first approved Enterprise Investment Scheme fund. Since then, it has successfully launched a further 15 EIS funds and four VCT offers for subscription (including offers for subscription for shares in the Company). As at 30 September 2015, it had £120.5 million of funds under management or advice (including the qualifying assets of the Company).
Calculus Capital is a generalist investor and has extensive experience investing across a multitude ofsectors, examples include hosted software, life sciences, leisure and hospitality, manufacturing, energy and transportation. Calculus Capital's focus is to find and back capable management teams in established companies which are already successfully selling products and services.
Calculus Capital is recognised as a leading manager of Venture Capital Investments and has been awarded the EIS Association 'Best EIS Fund Manager' Award three times, the latest at the 2015 Awards ceremony. Calculus Capital also attained the title of 'Best EIS Investment Exit' in 2012. Calculus Capital's success is underpinned by a disciplined investment process, strong risk management and very close monitoring of and partnership with portfolio companies.
John Glencross Chief Executive Details for John Glencross can be found on page 13.
Susan is one of the UK's leading experts on investing in smaller companies and the government's Enterprise Investment Scheme. A pioneer of the EIS industry, in 1999/2000, she structured and launched the UK's first HM Revenue & Customs approved EIS fund with John Glencross. Susan has over 28 years of experience and has personally directed investment to over 80 companies in the last 17 years covering a diverse range of sectors. She has regularly served as board member of the firm's private equity-backed companies. Before co-founding Calculus Capital, Susan was Director and Head of Asian Equity Sales at Banco Santander. Prior to this, she gained over 12 years' experience in company analysis, flotations and private placements with Jardine Fleming in Hong Kong, Robert Fleming (London) and Peregrine Securities (UK) Limited. Susan has an MBA from the University of Arizona and a BSc from the University of Florida. Before entering the financial services industry, Susan worked for Conoco National Gas Products Division and with Abbott Laboratories Diagnostics Division.
Lesley joined Calculus Capital in 2002. She has over 18 years' experience in investment banking and held senior posts at three international investment banks, where her responsibilities included advising several companies in the FTSE 100. Most recently, she was Managing Director, Global Investment Banking at Deutsche Bank, which took over BT Alex Brown, where she was a Managing Director in the UK Equity Advisory Division. Before that, Lesley spent 14 years at UBS, where she was a Managing Director in the Corporate Finance Division. She has extensive experience of fundraising, flotations, mergers and acquisitions, disposals and restructurings for her clients. Lesley was a Non-Executive Council Member of the Competition Commission from 2009 to 2014, and in 2011 she was appointed as a non-executive director of Panmure Gordon. She is a fellow of the Institute of Chartered Accountants.
Alexander joined Calculus Capital in 2015, and has over 25 years' advisory experience, incorporating M&A, capital raising in both public and private markets, and other strategic advice. He spent ten years with Robert Fleming & Co, Evercore Partners and JP Morgan in London, New York and Johannesburg, where he advised the South Africa government on the privatisation of their incumbent telecoms operator. He was more recently a Managing Director at Pall Mall Capital. As a senior member of the investment team, Alexander's role is to source and execute new deals, as well as managing some of the existing portfolio companies through to exit. Alexander has an MA in Mathematics from Cambridge University and qualified as a Chartered Accountant with KPMG.
Robert joined Calculus Capital in 2014 with responsibility for working with the portfolio companies in helping to build value and, importantly, guiding them towards a successful exit. Robert has over 25 years' advisory experience covering the full spectrum of corporate and capital raising transactions, but with a particular expertise in M&A. Most recently he was Head of the European business of Avendus Capital, an Indian investment bank, and previously was the Head of European M&A at Nomura International for eight years. He has also held positions at JP Morgan and Robert/Jardine Fleming. As well as London, he has also worked in Hong Kong, Sydney and Mumbai. Robert qualified as a Chartered Accountant with Price Waterhouse and, prior to his career in finance, served in the British army. He holds an MA from the University of Cambridge.
Alexandra joined Calculus Capital in 2008. She specialises in the valuation of investment opportunities, focusing on the energy, life sciences and services sectors. Her recent projects include oil and gas exploration and production and synthetic biology. Alexandra is responsible for project management from proposal through due diligence to completion. Prior to joining Calculus Capital, she worked on the hedge fund team at Apollo Management International where she conducted research into companies and markets. She graduated from University College London with a first class degree in History of Art having previously studied Engineering Science at Wadham College, Oxford. Alexandra is a CFA charterholder.
Richard joined Calculus Capital in 2013. Prior to this he was a Director at Citigroup, which he joined in 2005, and previously worked at JPMorgan and Strata Technology Partners. Richard has over 14 years corporate finance experience advising public and private corporations and financial sponsors on a range of M&A and capital raising transactions. Richard began his investment banking career in the UK mid-cap advisory team at Flemings (acquired by JPMorgan in 2000), working with companies across a broad a range of sectors. More recently Richard has specialised in advising companies in the technology industry. Richard has advised on a wide range of transactions including buy-side and sell-side M&A mandates, public equity and debt offerings, private equity investments and leveraged buy outs in the UK, Europe, US and Asia. Richard began his career at KPMG where he qualified as a Chartered Accountant, and remains a member of the ICAEW. He has a BA (Hons) in Politics and Economics from Durham University.
Roshan joined Calculus Capital in 2013. Prior to this, he qualified as a Chartered Accountant with Ernst & Young where he gained experience in transaction advisory, tax and audit. He has worked on structuring numerous domestic and international mergers and acquisitions and corporate restructuring transactions, modelling the transaction implications and project managing the transaction implementation. Roshan has significant experience advising businesses on tax efficient transactions including; intellectual property optimisation, efficient capital and corporate structuring. Roshan has a wide range of industry experience and since joining Calculus Capital, has worked with businesses within the leisure, healthcare and software sectors.
Claire joined the investment team in September 2013 and assists with financial modelling, primary due diligence and valuations. Preceding this she worked in the Finance and Fund Administration department. Prior to joining Calculus Capital, Claire worked for Oculus Investment Managers Limited where she was responsible for investment research and composing the quarterly market commentary. She also dealt with client queries and portfolio performance reporting. Claire graduated from Durham University with a BSc (Hons) in Natural Sciences and has passed CFA Level III.
James joined Calculus at the end of 2014 as an analyst in the investment team. Prior to this James worked in Madrid in mergers and acquisitions, first as an intern before taking on a full-time analyst role, gaining experience across a variety of sectors and the deal-cycle, with a particular focus on origination. Preceding his time in Spain, James attended Nottingham University, attaining both a BA (Hons) in Industrial Economics and an MSc with distinction in Risk Management. James is a CFA Level I candidate.
Natalie joined Calculus in 2010 and is responsible for financial management and planning. Until recently Natalie was Head of Fund Administration and she still overseas all areas of EIS and VCT fund administration, operations and reporting. Natalie's VCT responsibilities include supporting the statutory reporting process and preparing forecasts to assist in cash management. Natalie has a CIMA Advanced Diploma in Management Accounting and a first class Bachelor of Law degree. Prior to this Natalie graduated with a Masters of Modern Languages from the University of Manchester.
The team at Investec Structured Products (a trading name of Investec Bank plc, which is part of the Investec group of companies and is regulated by the FCA and the Prudential Regulation Authority) is the Structured Products portfolio manager. Investec Structured Products' appointment will come to an end on the earlier of 24 June 2016 and the sale of the final Structured Product Investment in the Company's Ordinary Share Fund (in respect of the Ordinary Shares) and on the earlier of 14 March 2017 and the sale of the final Structured Product Investment in the Company's C Share Fund (in respect of the C Shares).
The objects of the Company are not limited by any provisions of the Memorandum or the Articles of the Company.
The Company's Articles currently contain provisions, inter alia, to the following effect (certain of which in relation to the D Shares are subject to the approval of Shareholders at the General Meeting):
"C Share Surplus" means the net assets of the Company attributable to the C Shares (including, for the avoidance of doubt, any income and/or revenue arising from or relating to such assets) less such proportion of the Company's liabilities, including the fees and expenses of liquidation or return of capital (as the case may be) as the Directors or the liquidator (as the case may be) shall reasonably allocate to the assets of the Company attributable to the C Shareholders.
"D Share Surplus" means the net assets of the Company attributable to the D Shares (including, for the avoidance of doubt, any income and/or revenue arising from or relating to such assets) less such proportion of the Company's liabilities, including the fees and expenses of liquidation or return of capital (as the case may be), as the Directors or the liquidator (as the case may be) shall reasonably allocate to the assets of the Company attributable to the D Shareholders.
"Issue Date" means the day on which the Company receives the net proceeds of the first issue of C Shares.
"Ordinary Share Surplus" means the net assets of the Company (including, for the avoidance of doubt, any income and/or revenue arising from or relating to such assets) less (i) such proportion of the Company's liabilities (including the fees and expenses of liquidation or return of capital (as the case may be) as the Directors or the liquidator (as the case may be) shall reasonably allocate to the assets of the Company attributable to the Ordinary Shareholders and (ii) the C Share Surplus and the D Share Surplus.
"Statutes" means the CA 2006 as amended and supplemented, and every other statute for the time being in force concerning companies affecting the Company.
Without prejudice to its obligations under the Statutes, the Company shall, without prejudice to its obligations under the Statutes (i) procure that the Company's records and bank accounts shall be operated so that the assets attributable to the Ordinary Shareholders, C Shareholders and D Shareholders can, at all times, be separately identified and, in particular but without prejudice to the generality of the foregoing, the Company shall procure that a separate income and expenditure account (or, if applicable, profit and loss account) balance sheet and cash flow account and such other separate accounts as may, in the opinion of the Board, be desirable to ensure compliance by the Company with the provisions of section 259 of ITA 2007 as amended, shall be created and maintained in the books of the Company for the assets attributable to the Ordinary Shareholders, C Shareholders and D Shareholders, (ii) allocate to the assets attributable to the Ordinary Shareholders, C Shareholders and D Shareholders such proportion of the expenses and liabilities of the Company incurred or accrued following the Issue Date as the Directors fairly consider to be allocable to the Ordinary Shares, C Shares and D Shares and (iii) give appropriate instructions to the Company's investment managers and advisers to manage the Company's assets so that such undertakings can be complied with by the Company.
Subject to paragraph (f) below 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 by proxy (or being a corporation, represented by an authorised representative) shall have one vote and on a poll every member who is present in person or by proxy shall have one vote for every share of which he is the holder. The Ordinary Shares, C Shares and the D Shares shall rank pari passu as to rights to attend and vote at any general meeting of the Company
The rights of members to receive dividends are as follows:
At the discretion of the Board, acting in the interests of the Company as a whole, Shareholders of any class (the "Recipient Class") may additionally receive dividends paid from the net income derived from the assets attributable to one or more other share classes (the "Paying Class(es)") (or from the capital of such class(es) including amounts representing cancelled share premium), subject to the requirement that the Recipient Class account to the Paying Class(es) for any amount so distributed no later than four years from the end of the accounting period in which the last allotment of shares of the Recipient Class took place. Until the relevant amount is accounted for, the Paying Class shall have first call on the revenue and capital profits (after expenses) of the Recipient Class.
The capital and assets of the Company shall on a winding up or on a return of capital be applied as follows:
The holders of Ordinary Shares as a class, the holders of C Shares as a class and the holders of the D Shares as a class shall be required to approve and, accordingly, without such approval, the special rights attached to the Ordinary Shares, C Shares and the D Shares shall be deemed to be varied, inter alia, by:
terms of the share options granted or to be granted in relation to performance related incentive fees to the investment manager(s) of the Company from time to time; or
(iv) the selection of any accounting reference date other than 28 February.
The Company may issue shares which are liable to be redeemed on such terms and conditions as the Board may determine.
Shareholders shall have the right to receive notice of, attend and vote at all general meetings.
If any shareholder, or any other person appearing to the Directors to be interested in any shares in the capital of the Company held by such shareholder, has been duly served with a notice under section 793 of the CA 2006 and is in default for a period of 14 days from the date of service of the notice in supplying to the Company the information thereby required, then the Company may (at the absolute discretion of the Directors) at any time thereafter by notice (a "restriction notice") to such shareholder direct that, in respect of the shares in relation to which the default occurred and any other shares held at the date of the restriction notice by the shareholder, or such of them as the Directors may determine from time to time (the "restricted shares" which expression shall include any further shares which are issued in respect of any restricted shares), the shareholder shall not, nor shall any transferee to which any of such shares are transferred other than pursuant to a permitted transfer, be entitled to be present or to vote on any question, either in person or by proxy, at any general meeting of the Company or separate general meeting of the holders of any class of shares of the Company, or to be reckoned in a quorum.
Where the restricted shares represent at least 0.25% in nominal value of the issued shares of the same class as the restricted shares (excluding any shares of that class held as treasury shares) the restriction notice may in addition direct, inter alia, that any dividend or other money which would otherwise be payable on the restricted shares shall be retained by the Company without liability to pay interest; any election by such member to receive shares instead of cash in respect of any dividends on such restricted shares will not be effective; and no transfer of any of the shares held by the shareholder shall be registered unless the shareholder is not himself in default in supplying the information requested and the transfer is part only of the member's holding and is accompanied by a certificate given by the member in a form satisfactory to the Directorsto the effect that after due and careful enquiry the member issatisfied that none of the shares which are the subject of the transfer are restricted shares.
The Board shall be entitled to make calls for the sums, if any, remaining unpaid on any shares, subject to the terms of allotment of such shares. If any call remains unpaid then the Board may, after giving not less than 14 clear days' notice, forfeit such share and sell or transfer such forfeited shares on such terms as the Board may determine.
The Board shall convene annual general meetings and may convene other general meetings whenever it thinks fit. A general meeting shall also be convened on such requisition or in default may be convened by such requisitionists as provided by the CA 2006. At any meeting convened on such requisition or by such requisitionists no business shall be transacted except that stated by the requisition or proposed by the Board. If there are not within the UK sufficient members of the Board to convene a general meeting, any Director may call a general meeting. The Board may make arrangements to ensure the orderly conduct of general meetings and to preserve the security of attendees.
General meetings shall be convened by the minimum period of notice required by the CA 2006. Every notice convening a general meeting shall specify:
(a) whether the meeting is an annual general meeting or an extraordinary general meeting;
The accidental omission to send a notice of meeting or, in cases where it is intended that it be sent out with the notice, an instrument of proxy or any other document, to, or the non-receipt of either by, any person entitled to receive the same shall not invalidate the proceedings at that meeting.
No business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business but the absence of a quorum shall not preclude the choice or appointment of a chairman which shall not be treated as part of the business of the Meeting. Two persons entitled to attend and to vote on the business to be transacted, each being a member present in person or a proxy for a member or a duly authorised representative of a corporation which is a member, shall be a quorum.
If within 15 minutes (or such longer interval as the Chairman in his absolute discretion thinks fit) from the time appointed for the holding of a general meeting a quorum is not present, or if during a meeting such a quorum ceases to be present, the meeting, if convened on the requisition of members, shall be dissolved. In any other case, the meeting shall stand adjourned to the same day in the next week at the same time and place, or to such other day and at such time and place as the Chairman (or, in default, the Board) may determine, being not less than 10 clear days thereafter. lf at such adjourned meeting a quorum is not present within 15 minutes from the time appointed for holding the meeting one member present in person or by proxy or (being a corporation) by a duly authorised representative shall be a quorum. If no such quorum is present or if during the adjourned meeting a quorum ceases to be present, the adjourned meeting shall be dissolved.
At any general meeting a resolution put to a vote of the meeting shall be decided on a show of hands unless (before or immediately after the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is duly demanded. Subject to the provisions of the CA 2006, a poll may be demanded by:
Subject to the provisions of the CA 2006 and to any special terms as to voting on which any shares may have been issued or may for the time being be held and to any suspension or abrogation of voting rights pursuant to the Articles, at any general meeting every member who (being an individual) is present in person or by proxy or (being a corporation) is present by a duly authorised representative, not being himself a member entitled to vote, shall on a show of hands have one vote and on a poll shall have one vote for each share of which he is the holder.
Subject to the provisions of the CA 2006, if at any time the share capital of the Company is divided into shares of different classes any of the rights for the time being attached to any share or class of shares in the Company (and notwithstanding that the Company may be or be about to be in liquidation) may (unless otherwise provided by the terms of issue of the shares of that class) be varied or abrogated in such manner (if any) as may be provided by such rights or, in the absence of any such provision, either with the consent in writing of the holders of not less than three quarters in nominal value of the issued shares of the class or with the sanction of a special resolution passed at a separate general meeting of the holders of shares of the class duly convened and held as provided in these Articles (but not otherwise).
All the provisions in the Articles as to general meetings shall mutatis mutandis apply to every meeting of the holders of any class of shares save that the quorum at every such meeting shall be not less than 2 persons holding or representing by proxy at least one-third of the nominal amount paid up on the issued shares of the class; every holder of shares of the class present in person or by proxy may demand a poll; each such holder shall on a poll be entitled to one vote for every share of the class held by him; and if at any adjourned meeting of such holders, such quorum as aforesaid is not present, not less than one person holding shares of the class who is present in person or by proxy shall be a quorum.
The Company in general meeting may from time to time by ordinary resolution:
Except as may be provided by any procedures implemented for shares held in uncertificated form, each member may transfer all or any of his shares by instrument of transfer in writing in any usual form or in any form approved by the Board. Such instrument shall be executed by or on behalf of the transferor and (in the case of a transfer of a share which is not fully paid up) by or on behalf of the transferee. The transferor shall be deemed to remain the holder of such share until the name of the transferee is entered in the Register in respect of it.
The Board may in its absolute discretion refuse to register any share transfer (as to which it shall provide reasons) unless:
(e) it is delivered for registration to the registered office of the Company, or such other place as the Board may from time to time determine, accompanied (except in the case of a transfer by a recognised person where a certificate has not been issued) by the certificate for the shares to which it relates and such other evidence as the Board may reasonably require to prove the title of the transferor and the due execution by him of the transfer or if the transfer is executed by some other person on his behalf, the authority of that person to do so, provided that such discretion may not be exercised in such a way as to prevent dealings in shares admitted to the Official List from taking place on an open and proper basis.
Subject to the provisions of the CA 2006 and of the Articles, the Company may by ordinary resolution declare that, out of profits available for distribution, dividends be paid to members according to their respective rights and interests in the profits of the Company available for distribution. However, no dividend shall exceed the amount recommended by the Board.
Except as otherwise provided by the rights attached to shares, all dividends shall be declared and paid according to the amounts paid up (otherwise than in advance of calls) on the shares on which the dividend is paid. Subject as aforesaid, all dividends shall be apportioned and paid pro rata according to the amounts paid up or credited as paid up on the shares during any portion or portions of the period in respect of which the dividend is paid but if any share is issued on terms providing that it shall rank for dividend as from a particular date or be entitled to dividends declared after a particular date it shall rank for or be entitled to dividends accordingly.
All dividends and interest shall be paid (subject to any lien of the Company) to those members whose names shall be on the register at the date at which such dividend shall be declared or at the date at which such interest shall be payable respectively, or at such other date as the Company by ordinary resolution or the Board may determine, notwithstanding any subsequent transfer or transmission of shares.
The Board may pay the dividends or interest payable on shares in respect of which any person is by transmission entitled to be registered as holder to such person upon production of such certificate and evidence as would be required if such person desired to be registered as a member in respect of such shares.
Subject as provided in the Articles, the Board may exercise all the powers of the Company to borrow money and to mortgage or charge all or any part of the undertaking, property and assets (present or future) and uncalled capital of the Company and, subject to the provisions of the CA 2006, to issue debentures and othersecurities whether outright or as collateralsecurity for any debt, liability or obligation of the Company or of any third party.
The Board shall restrict the borrowings of the Company and exercise all voting and other rights and powers of control exercisable by the Company in respect of its subsidiaries so as to procure (as regards its subsidiaries in so far as it can procure by such exercise) that the aggregate principal amount at any one time outstanding in respect of net moneys borrowed by the Group (exclusive of moneys borrowed by one Group (being the Company and itssubsidiariesfrom time to time) company from another and after deducting cash deposited) shall not at any time without the previous sanction of an ordinary resolution of the Company exceed an amount equal to 25% of the value of the gross assets of the Company.
For these purposes only:
(a) in calculating the value of the gross assets of the Company, the value of securities listed or dealt on a reputable stock exchange shall be based on the closing mid market price and the value of other securities shall be determined by the Board on the basis of valuation principles recommended by the auditors of the Company for the time being.
but do not include:
A report or certificate of the auditors of the Company as to the amount of gross assets of the Company or the amount of moneys borrowed falling to be taken into account for the purposes of this article or to the effect that the limit imposed by this article has not been or will not be exceeded at any particular time or times or as a result of any particular transaction or transactions shall be conclusive evidence of the amount or of that fact the Directors may at any time act in reliance on a bona fide estimate of the amount of the gross assets of the Company and if in consequence the limit set out in the Articles is inadvertently exceeded, an amount borrowed equal to the excess may be disregarded until the expiration of 3 months after the date on which by reason of a determination of the auditors or otherwise the Directors become aware that such a situation has or may have arisen.
No debt incurred or security given in respect of moneys borrowed in excess of the limit imposed by the Articles shall be invalid or ineffectual except in the case of express notice to the lender or recipient of the security at the time when the debt was incurred or security given that the limit had been or would thereby be exceeded but no lender or other person dealing with the Company shall be concerned to see or enquire whether such limit is observed.
Unless otherwise determined by the Company the maximum number of directors shall be 10 and the minimum shall be 2. The quorum for meetings of the Board shall be 2 and the Chairman shall have a second or casting vote on a tie.
The Directors shall be entitled to be paid fees for their services as Directors in such sums as the Board may determine from time to time but not exceeding £100,000 (or such larger amount as the Company may determine) per annum.
Each Director may appoint as an alternate Director either another Director or a person approved by the Board and to terminate such appointment.
At every annual general meeting, there shall retire from office any Director who shall have been a Director at each of the preceding two annual general meetings and who was not appointed or re-appointed by the Company in general meeting at, or since, either such meeting. A retiring Director shall be eligible for re-appointment. A Director retiring at a meeting shall, if he is not re-appointed at such meeting, retain office until the meeting appoints someone in his place, or if it does not do so, until the conclusion of such meeting.
The Board may, provided the quorum and voting requirements set out below are satisfied, authorise any matter that would otherwise involve a Director breaching his duty under CA 2006 to avoid conflicts of interest except that the Director concerned and any other Director with a similar interest:
Where the Board gives authority in relation to such a conflict:
Directors are obliged to declare any material interest which they may have in any transaction or arrangement involving the Company. Such directors shall not vote or be counted in the quorum in relation to any resolution to any transaction or arrangement in which he is to his knowledge materially interested save that a Director shall (in the absence of some other material interest than is indicated below) be entitled to vote (and be counted in the quorum) in respect of any resolution concerning any of the following matters, namely:
If any question shall arise at any meeting as to an interest or as to the entitlement of any Director to vote such question shall be referred to the chairman of the meeting and his ruling in relation to any Director other than himself shall be final and conclusive except in a case where the nature or extent of the interests of the Director concerned have not been fairly disclosed.
Subject to the provisions of CA 2006 and further provided that a Director declares his interest, a Director, notwithstanding his office:
corporate; and no such contract, arrangement, transaction or proposal shall be avoided on the grounds of any such interest or benefit.
The Company shall be entitled to sell at the best price reasonably obtainable any share of a member or any share to which a person is entitled by transmission if and provided that:
To give effect to any sale of shares pursuant to this article the Board may authorise some person to transfer the shares in question and may enter the name of the transferee in respect of the transferred shares in the register notwithstanding the absence of any share certificate being lodged in respect of it and may issue a new certificate to the transferee. An instrument of transfer executed by that person shall be as effective as if it had been executed by the holder of, or the person entitled by transmission to, the shares. The purchaser shall not be bound to see to the application of the purchase moneys nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale.
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 realisation on or derived from the realisation, payment off of or 32 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 realisation on the realisation or payment off of or other dealing with any investments or other capital assets and, subject to the CA 2006, any expenses, loss or liability (or provision thereof) which the Board considers to relate to a capital item or which the Board otherwise considers appropriate to be debited to the capital reserve shall be carried to the debit of the capital reserve. During a Relevant Period, all sums carried and standing to the credit of the capital reserve may be applied for any of the purposes for which sums standing to any revenue reserve are applicable except and provided that notwithstanding any other provision of the Articles during a Relevant Period no part of the capital reserve or any other money in the nature of accretion to capital shall be transferred to the revenue reserves of the Company or be regarded or treated as profits of the Company available for distribution or be applied in paying dividends on any shares in the Company. In periods other than a Relevant Period any amount standing to the credit of the capital reserve may be transferred to the revenue reserves of the Company or be regarded or treated as profits of the Company available for distribution or be applied in paying dividends on any shares in the Company.
A special resolution sanctioning a transfer or sale to another company duly passed pursuant to section 110, Insolvency Act 1986 may in the like manner authorise the distribution of any shares or other consideration receivable by the liquidator among the members otherwise than in accordance with their existing rights and any such determination shall be binding on all the members, subject to the right of dissent and consequential rights conferred by the said section.
In order for the future of the Company to be considered by the members, the Board shall at the annual general meeting of the Company falling after the tenth anniversary of the last allotment of shares in the Company and thereafter at five yearly intervals, invite the members to consider whether the Company should continue as a venture capital trust and if such resolution is not carried the Board shall within 9 months of that meeting convene a general meeting to propose:
The Board may make such arrangements as it sees fit, subject to the CA 2006, to deal with the transfer, allotment and holding of shares in uncertificated form and related issues.
The Company shall indemnify the directors to the extent permitted by law and may take out and will maintain insurance for the benefit of the directors.
2.7 Following the issue of the D Shares pursuant to the Offer (assuming full subscription and ignoring costs) the issued share capital of the Company is expected to be approximately:
| Shares Issued | ||
|---|---|---|
| Nominal | ||
| Class | Number | Value £ |
| Ordinary | 4,738,463 | 47,384.63 |
| C Shares | 1,931,095 | 19,310.95 |
| D Shares | 8,000,000 | 80,000.00 |
issuer of the relevant Structured Product. Further details regarding this arrangement fee are available upon request. No arrangement fee will be paid to Investec Structured Products in respect of any decision to invest in Investec Issued Structured Products. Investec Structured Products will not receive any annual management fees.
Annual running costs include, inter alia, Directors' fees, fund administration fees, fees for audit, taxation and legal advice, registrar's fees, costs of communicating with Shareholders and annual trail commission and the annual fees payable to Calculus Capital, but not the performance incentive (as set out below). Assuming full subscription, the Board estimates that the annual running costs of the Company will be approximately 3.6 per cent. (excluding annual trail commission) of its net assets (excluding irrecoverable VAT) in the first accounting period (calculated on an annualised basis).
reviewing the Company's internal control and risk management systems;
making recommendations to the Directors in relation to the appointment of the external auditor;
Set out below is a summary of all contracts (not being contracts entered into in the ordinary course of business) entered into by the Company since incorporation that are material and all other contracts (not being contracts entered into in the ordinary course of business) that contain any provision under which the Company has an obligation or entitlement which is material to the Company as at the date of this document.
Pursuant to a letter to the Company dated 23 June 2015, Investec Structured Products' engagement as manager of the C Shares Fund will determine no later than 14 March 2017.
agreement the terms of the Ordinary Share Fund agreement set out at paragraph 4.3 above will apply, mutatis mutandis, to the C Shares Fund (pursuant to which, for the avoidance of doubt, Calculus Capital's entitlement to receive an annual management fee of 1 per cent. of the net assets of the Company is in respect of investment management services provided across both the Ordinary Shares Fund and the C Shares Fund).
provided in each case that C Shareholders have received or been offered a C Shares Fund interim return of at least 70p per C Share on or before 14 March 2017 and at a least a further 45p per C Share having been received or offered for payment on or before 14 March 2019. In addition, performance incentive fees in respect of the C Shares Fund will only be payable in respect of dividends and distributions paid or offered on or before 14 March 2019. The terms of this agreement will otherwise be materially the same as those for the arrangements for the Ordinary Shares Fund and as is more particularly described in paragraph 4.5 above.
4.7 A sponsor's agreement dated 24 August 2015 between the Company (1) and SPARK Advisory Partners Limited (2) whereby SPARK Advisory Partners Limited agreed to act as sponsor. The agreement contained warranties given by the Company and the Directors to SPARK. The Company will pay a fee to SPARK of £30,000 for sponsor services relating to the Offer.
The following contracts will be entered into, subject, inter alia, to the approval by Shareholders of the resolutions numbered 5, 6 and 10 at the General Meeting and confirmation at the Class Meetings.
4.8 A promoter's agreement dated 26 October 2015 between the Company (1), the Directors (2) and Calculus Capital (3), whereby Calculus Capital agreed to act as promoter in connection with the offer for subscription of D Shares. The agreement contained warranties given by the Company and the Directors to Calculus Capital (as the promoter). The Company will pay to Calculus Capital a promoters fee of 3.0 per cent. (in respect of Investors through intermediaries) or 5.0 per cent. (in respect of director Investors) of the gross amount subscribed under the offer for subscription of D Shares out of which certain costs, charges and expenses of or incidental to the offer for subscription of D Shares will be paid. The Company will bear the costs of paying commission to the authorised intermediaries of Investors under the Offer.
5.5 The issue premium for the D Shares will be the difference between the issue price of the D Shares under the Offer and their nominal value of 1 penny. The Offer is not underwritten.
5.6 The Company has paid dividends amounting to 48.25p per Ordinary Share and 18p per C Share since incorporation to date. And on 26 October declared a further dividend of 21.8p per Ordinary Share to be paid on 11 December 2015 to Ordinary Shareholders on the register on 20 November 2015.
Subject to Shareholder approval, the Company intends to adopt the following Investment Policy from the date of the issue of the D Shares pursuant to the Offer.
The Company's principal objectives for investors are to:
It is intended that approximately 75 per cent. of the monies raised by the Company in relation to the D Shares will be invested within 60 days in a variety of investments selected to preserve capital value, whilst generating income, which may include:
The balance will be used to meet initial costs and invested in cash or near cash assets (as directed by the Board) and will be available to invest in Venture Capital Investments and to fund ongoing expenses.
The Company's policy is to build a diverse portfolio of Venture Capital Investments primarily in established unquoted companies across different industries and investments may be by way of loan stock and/or fixed rate preference shares as well as ordinary shares to generate income. The amount invested in any one sector and any one company will be no more than 20 per cent. and 10 per cent. respectively of the Venture Capital Investments portfolio. These percentages are measured as at the time of investment. The Board and Calculus Capital will review the portfolio of investments on a regular basis to assess asset allocation and the need to realise investments to meet the Company's objectives or maintain VCT status.
Where investment opportunities arise in one asset class which conflicts with assets held or opportunities in another asset class, the Board will make the investment/divestment decision. Under its Articles, the Company has the ability to borrow a maximum amount equal to 25 per cent. of the aggregate amount paid on all shares issued by the Company (together with any share premium thereon). The Board will consider borrowing if it isin the Shareholders' intereststo do so. In particular, because the Board intendsto minimise cash balances, the Company may borrow on a short-term to medium-term basis for cashflow purposes and to facilitate the payment of dividends and expenses in the early years.
The Company will not vary the investment objective or the investment policy, to any material extent, without the approval of Shareholders. The Company intends to be a generalist VCT investing in a wide range of sectors.
The Board controls the overall risk of the Company. Calculus Capital will ensure the Company has exposure to a diversified range of Venture Capital Investments from different sectors.
The Company is subject to the investment restrictions relating to a venture capital trust in the ITA 2007, as more particularly detailed in Part 5 of the Securities Note, and in the Listing Rules which specify that (i) the Company must, at all times, invest and manage its assets in a way which is consistent with its object of spreading investment risk and in accordance with its published investment policy as set out in paragraph 5 in this Part 3 above; (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 its total assets at the time an investment is made in other listed closed-ended investment funds. Any material change to the investment policy of the Company will require the approval of the 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:
(a) the Company's income is intended to be derived wholly or mainly from shares or other securities, as this phrase is interpreted by HMRC;
In the event of a breach of the investment restrictions which apply to the Company as described in this paragraph, Shareholders will be informed by means of the interim and/or the annual report or through a public announcement.
Calculus Capital has a co-investment policy between its various funds whereby investment allocations are generally offered to each party in proportion to their respective funds available for investment, subject to: (i) a priority being given to any of the funds in order to maintain their tax status; (ii) the time horizon of the investment opportunity being compatible with the exit strategy of each fund; and (iii) the risk/reward profile of the investment opportunity being compatible with the target return for each fund. The terms of the investments may differ between the parties. In the event of any conflicts between the parties, the issues will be resolved at the discretion of the independent directors, designated members and committees. It is not intended that the Company will co-invest with Directors or members of the Calculus Capital management team) including family members).
Funds attributable to separate share classes will co-invest (i.e. pro rata allocation per fund unless as otherwise approved by the Board). Any potential conflict of interest arising will be resolved on a basis which the Board believes to be equitable and in the best interests of all Shareholders.
| Ordinary Shares | C Shares | Total | ||
|---|---|---|---|---|
| £'000 | £'000 | £'000 | % | |
| Structured products | ||||
| Investec Bank plc | 920 | 521 | 1,441 | 35% |
| Qualifying Investments | ||||
| Human Race Group Limited | 300 | 150 | 450 | 11% |
| AnTech Limited | 323 | – | 323 | 8% |
| Hampshire Cosmetics Limited | 153 | 162 | 315 | 8% |
| Terrain Energy Limited | 173 | 81 | 254 | 6% |
| Metropolitan Safe Custody Limited | 155 | 69 | 224 | 5% |
| Tollan Energy Limited | 164 | – | 164 | 4% |
| Quai Administration Services Limited | – | 150 | 150 | 4% |
| MicroEnergy Services Limited | 147 | – | 147 | 3% |
| The One Place Capital Limited | – | 127 | 127 | 3% |
| Scancell Holdings plc | – | 119 | 119 | 3% |
| Brigantes Energy Limited | 108 | - | 108 | 3% |
| Horizon Discovery Limited | – | 83 | 83 | 2% |
| Pico's Limited | – | 64 | 64 | 2% |
| Hembuild Group Limited | 63 | 63 | 1% | |
| Venn Life Sciences Limited | – | 56 | 56 | 1% |
| Corfe Energy Limited | 45 | – | 45 | 1% |
| Dryden Human Capital Group Limited | 7 | – | 7 | 0% |
| Other non-qualifying investments | ||||
| Aberdeen Sterling Liquidity Fund | – –––––––– |
1 –––––––– |
1 –––––––– |
0% –––––––– |
| 2,558 | 1,583 | 4,141 | 100% | |
| –––––––– | –––––––– | –––––––– | –––––––– |
Set out below are investments with a value of greater than 5% of the Company's gross assets and an aggregate value greater than 50% of the Company's portfolio. The portfolio relates to the Ordinary Shares and C Shares of the Company as no funds have yet been raised or invested for the D Shares. This unaudited investment portfolio is that carried by the Company as at the date of this document. The valuations below have been sourced from the Company's unaudited interim financial statements for the six months ended 31 August 2015, these being the most recent valuations of the relevant companies.
Human Race operates over 60 mass participation sports events in the UK. The company's events include triathlon, cycling, running, duathlon, aquathlon and open water swimming for over 90,000 participants of all abilities and ages, making it the largest such operator in the UK. Two new flagship events have been successfully launched in 2015: the London Winter Run, the largest inaugural 10k run ever in the UK with 14,000 entries, and the Tour de Yorkshire, a 3 day pro ride in partnership with ASO (organisers of the Tour de France).
AnTech is a specialist engineering company providing products and services to the upstream oil and gas industry. The company's Products Division offers specialist products across a range of applications including coiled lubing, completion equipment, wireline and drilling. It continues to grow and operate profitably; despite the oil price fall. Antech's Services Division has a new generation of directional coiled tubing drilling tools for effective intervention in existing wells to enhance production yield and extend well life. This is attractive in a low oil price environment.
Hampshire Cosmetics manufactures fragrances, body treatments, skincare products and shampoos for third party customers including Bodyshop, Philip Kingsley and Penhaligon. Our investment was made to back a new management turning around this established manufacturer. This has been successfully achieved and the company is now seeking to further grow and diversify its revenue base, including the continuing integration of Mr Pets (an on-line retailer of veterinary and ancillary pet products).
Terrain currently has interests in nine petroleum licences; Keddington, Kirklington, Dukes Wood and Burton on the Wolds in the East Midlands, Larne and an offshore licence to the north of Larne in Northern Ireland, Brockham in Surrey and Egmating and Starnberger See in Germany. Terrain has taken advantage of attractive prices in the current market and will shortly complete transactions to acquire interests in two new licences and increase its interest in one existing licence. The company is currently producing from wells at Keddington and Brockham. New wells at Larne and one of its new licences as well as sidetracks at Keddington and Brockham are due to be drilled in H1 2016.
Metropolitan runs two safe custody sites, one in Knightsbridge, the other in St. John's Wood. These profitable, stable businesses serve several thousand customers providing access to the vaults seven days a week. The company has experienced strong year on year growth. Metropolitan upgraded systems and added capacity during the financial year just ended.
| Return/ | |||||||
|---|---|---|---|---|---|---|---|
| Issuer | Strike | FTSE 100 | Price as at | Capital | |||
| Date | Initial Index | Notional | Purchase 30 September | Maturity | at Risk | ||
| Level | Investment | Price | 2015 | Date | ("CAR") | ||
| Investec Bank plc | |||||||
| (Ordinary Share Fund) 14/05/2010 | 5,262.85 | £500,000 | £0.98 | £1.840032 19/11/2015 | 185% if FTSE 100 higher*; CAR if FTSE 100 falls more than 50% |
||
| Investec Bank plc (C Share Fund) |
05/08/2011 | 5,246.99 | £328,000 | £1.00 | £1.588735 10/03/2017 | 182% if FTSE 100 higher*; CAR if FTSE 100 falls more than 50% |
* The Final Index Level is calculated using 'averaging', meaning that the average of the closing levels of the FTSE 100 is taken on each Business Day over the last 2-6 months of the Structured Product plan term (the length of the averaging period differs for each plan). The use of averaging to calculate the return can reduce adverse effects of a falling market or sudden market falls shortly before maturity. Equally, it can reduce the benefits of an increasing market or sudden market rises shortly before maturity.
Audited financial information on the Company is published in its annual reports for the last three financial years as set out below. The auditors, Grant Thornton UK LLP, made unqualified reports under section 495 of the 2006 Act for each of these financial years, and such reports did not contain any statements under section 498(2) or (3) of the 2006 Act.
The annual reports referred to above were all prepared in accordance with UK generally accepted accounting practice (GAAP) and in accordance with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" January 2009 (SORP). The Company confirms that that the annual financial statements of the Company for the years ended 28 February 2014 and 28 February 2015, which were prepared under UK GAAP, have been presented and prepared in a form which is consistent with that which will be adopted in the next annual financial statements to be published (which will be prepared under FRS 102) having regard to accounting standards, policies and legislation applicable to such annual financial statements, in so far as there are no material differences between the financial statements for this year prepared under these two accounting frameworks.
The annual reports contain a description of the relevant company's financial condition, changes in financial condition and results of operations for each relevant year. The annual reports (which contain the information as detailed below) and the unaudited half yearly report for the six months ended 31 August 2015 are incorporated in full by reference and can be accessed at the Calculus website (www.calculuscapital.com) and are available for inspection through the national storage mechanism, which can be accessed at www.morningstar.co.uk/uk/NSM.
| 2015 Unaudited | ||||
|---|---|---|---|---|
| Half Yearly | 2015 Annual | 2014 Annual | 2013 Annual | |
| Description | Report | Report | Report | Report |
| Balance sheet | pages 20-23 | page 46-47 | page 49-50 | page 41-42 |
| Income statement (or equivalent) | pages 13-15 | page 42-43 | page 45-46 | page 36 |
| Statement showing all changes in | ||||
| equity (or equivalent) | pages 16-19 | pages 44-45 | pages 47-48 | pages 38-40 |
| Cash flow statement | pages 24-27 | page 49 | page 52-53 | page 44-45 |
| Accounting policies and notes | pages 28-35 | pages 51-71 | pages 54-74 | pages 46-66 |
| Auditors' report | N/A | pages 39-41 | page 42-44 | page 34-35 |
This information has been prepared in a form consistent with that which will be adopted in the Company's next published annual financial statements having regard to accounting standards and policies and legislation applicable to those financial statements.
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 headed "Chairman's Statement", "Manager's Report" and "Portfolio Summary" in the published audited statutory accounts of the Company for the periods stated.
The annual reports also include operating/financial reviews as follows:
| 2015 Unaudited | 2015 Annual | 2014 Annual | 2013 Annual | |
|---|---|---|---|---|
| Description | Half Yearly Report | Report | Report | Report |
| Objectives | page 1 | Inside front | Inside front | Inside front |
| cover | cover | cover | ||
| Financial highlights | page 1 | page 1 | page 1 | page 1 |
| Chairman's statement | N/A | pages 2-3 | pages 2-3 | pages 2 |
| Manager's report (Ordinary Shares) | pages 2-5 | pages 4-17 | pages 4-18 | pages 3-13 |
| Manager's report (C Shares) | pages 2-5 | pages 4-17 | pages 4-18 | pages 3-13 |
| Portfolio summary (Ordinary Shares) | pages 6-10 | page 18 | page 19 | page 14 |
| Portfolio summary (C Shares) | pages 11-12 | page 19 | page 20 | page 15 |
| Investment policy | page 1 | pages 20-22 | pages 21-23 | pages 19-20 |
In the opinion of the Company the working capital is sufficient for the Company's present requirements, being at least 12 months from the date of this document.
The Offer will have a positive impact on the net assets of the Company by increasing its net assets by the same amount as the net funds raised and is expected to have a positive impact on earnings.
Copies of the following documents will be available for inspection during usual business hours on weekdays at the Company's registered office and the offices of RW Blears LLP, 125 Old Broad Street, London EC2N 1AR whilst the Offer is open:
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