Discoverie Group PLC — Capital/Financing Update 2014

Jun 5, 2014

THIS DOCUMENT AND ANY ACCOMPANYING DOCUMENTS ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION.

If you are in any doubt as to the action you should take, you are recommended to seek your own personal financial advice as soon as possible from your stockbroker, bank, solicitor, accountant, fund manager or other appropriate independent financial adviser authorised under the Financial Services and Markets Act 2000 (''FSMA'') if you are in the United Kingdom or, if not, from another appropriately authorised independent financial adviser in your own jurisdiction.

This document, which comprises a circular and a prospectus relating to the Company and the Rights Issue and the issue of the Consideration Shares prepared in accordance with the Prospectus Rules of the FCA made under section 73A of FSMA, has been approved by the FCA in accordance with section 87A of FSMA and filed with the FCA. This document is available in accordance with paragraph 3.2.1 of the Prospectus Rules by being made available free of charge on the Company's website at www.acalplc.co.uk. A printed copy of this document can also be obtained on request from the Registrar.

Subject to the restrictions set out below, if you sell or have sold or have otherwise transferred all of your Existing Shares (other than ex-rights) held in certificated form before 8.00 a.m. on 24 June 2014 (the ''Ex-Rights Date''), please send this document, together with any Provisional Allotment Letter, if and when received, as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for onward delivery to the purchaser or transferee. This document and/or the Provisional Allotment Letter should not, however, be distributed, forwarded to or transmitted in or into any jurisdiction where to do so might constitute a violation of local securities laws or regulations, including, but not limited to (subject to certain exceptions), the Excluded Territories. Please refer to Part XV (''Terms and Conditions of the Rights Issue'') if you propose to send this document and/or the Provisional Allotment Letter outside the United Kingdom. If you sell or have sold or have otherwise transferred all of your Existing Shares (other than ex-rights) held in uncertificated form before the Ex-Rights Date, a claim transaction will automatically be generated by Euroclear which, on settlement, will transfer the appropriate number of Nil Paid Rights to the purchaser or transferee. If you sell or have sold or otherwise transferred part of your holding of Existing Shares (other than ex-rights) held in certificated form before the Ex-Rights Date, you should refer to the instructions regarding split applications set out in Part XV (''Terms and Conditions of the Rights Issue'') of this document and in the Provisional Allotment Letter.

ACAL PLC

(Incorporated and registered in England and Wales with registered number 2008246)

Proposed 1 for 1 Rights Issue of 31,332,127 Rights Issue Shares at 176 pence per Rights Issue Share to raise approximately £55.1 million Proposed acquisition of Noratel

and

Notice of General Meeting

Oriel Securities Limited

Sponsor, underwriter, bookrunner and financial adviser

The Existing Shares are listed on the premium listing segment of the Official List and traded on the London Stock Exchange's main market for listed securities. Application will be made to the UK Listing Authority for the Rights Issue Shares to be admitted to the premium segment of the Official List and to the London Stock Exchange for the Rights Issue Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. It is expected that admission to listing of the Rights Issue Shares on the premium segment of the Official List will become effective, and dealings in the Rights Issue Shares, nil paid, on the London Stock Exchange's main market for listed securities will commence, at 8.00 a.m. on 24 June 2014 and that dealings in the Rights Issue Shares, fully paid, on the London Stock Exchange's main market for listed securities will commence at 8.00 a.m. on 9 July 2014. Application will be made to the UK Listing Authority for the Consideration Shares to be admitted to the premium segment of the Official List and to the London Stock Exchange for the Consideration Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. It is expected that admission to listing of the Consideration Shares on the premium segment of the Official List will become effective, and dealings in the Consideration Shares on the London Stock Exchange's main market for listed securities will commence, at 8.00 a.m. on or around 16 July 2014.

See ''Risk Factors'' in Part II of this document for a discussion of certain factors that should be considered by Shareholders and investors when considering whether or not to make an application pursuant to the Rights Issue or to invest in the Rights Issue Shares. Your attention is also drawn to the letter from the Chairman of Acal set out in Part VII (''Letter from the Chairman of Acal'') of this document. NOTWITHSTANDING THIS, YOU SHOULD READ THE ENTIRE DOCUMENT AND ANY DOCUMENTS INCORPORATED BY REFERENCE.

The latest time and date for acceptance and payment in full under the Rights Issue is expected to be 11.00 a.m. on 8 July 2014. The procedure for acceptance and payment is set out in Part XV (''Terms and Conditions of the Rights Issue'') of this document and, for Qualifying Non-CREST Shareholders only, in the Provisional Allotment Letters. Qualifying CREST Shareholders should therefore refer to Part XV (''Terms and Conditions of the Rights Issue'') of this document.

Subject to the passing of the Resolutions at the General Meeting, it is expected that Qualifying Non-CREST Shareholders (other than Excluded Shareholders) will be sent Provisional Allotment Letters on 23 June 2014 and that Qualifying CREST Shareholders (other than Excluded Shareholders) will receive a credit note to the appropriate stock accounts in CREST in respect of the Nil Paid Rights to which they are entitled on 24 June 2014. The Nil Paid Rights so credited are expected to be enabled for settlement by Euroclear as soon as practicable after Admission. Qualifying CREST Shareholders should refer to their CREST sponsors regarding the action to be taken in connection with this document and the Rights Issue.

The Provisional Allotment Letter is personal to Qualifying Non-CREST Shareholders and cannot be transferred, sold or assigned except to satisfy bona fide market claims. Applications under the Rights Issue may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.

The distribution of this document and/or the accompanying documents or any other offering or public material relating to the Rights Issue and/or the Provisional Allotment Letter and/or the transfer of Nil Paid Rights, Fully Paid Rights, Rights Issue Shares and/or Consideration Shares into a jurisdiction other than the United Kingdom may be restricted by law and therefore persons into whose possession this document and/or the accompanying documents comes should inform themselves about and observe any such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws or regulations of any such jurisdictions. In particular, this document, the accompanying documents and any other offering or publicity material should not be distributed, forwarded or transmitted in or into any Excluded Territory. Any persons (including custodians, nominees and trustees) who have a contractual or other legal obligation to forward this document or any accompanying documents to any Excluded Territory should seek appropriate advice before taking any action. The document may only be used by those persons to whom it has been distributed in connection with the Rights Issue and the issue of the Consideration Shares described herein and may neither directly nor indirectly be distributed or made available to other persons without the express consent of the Company.

NOTICE TO OVERSEAS SHAREHOLDERS

This document does not constitute an offer of, or a solicitation to subscribe for or purchase, any securities in any jurisdiction in which such offer or solicitation is unlawful or to any person to whom it is unlawful to make such offer or solicitation.

None of this document, the Provisional Allotment Letter or any related documentation constitutes, or will constitute, or forms part of, an offer of, or the solicitation of an offer to buy or subscribe for, Ordinary Shares to any person with a registered address, or who is located, or resident in any of the Excluded Territories or to any person in any jurisdiction to whom or in which such offer or solicitation is unlawful. The Nil Paid Rights, the Fully Paid Rights, the Rights Issue Shares and the Consideration Shares have not been nor will they be registered under the US Securities Act or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, in or within the United States except pursuant to an applicable exemption from, or in a transaction subject to, the registration requirements of the US Securities Act and in accordance with any applicable securities laws of any states or other jurisdiction of the United States. There will be no public offer of the Provisional Allotment Letters, the Nil Paid Rights, the Fully Paid Rights, the Rights Issue Shares or the Consideration Shares in the United States. The Provisional Allotment Letters, the Nil Paid Rights, the Fully Paid Rights, the Rights Issue Shares or Consideration Shares are being offered and sold outside the United States in reliance on Regulation S.

The Nil Paid Rights, the Fully Paid Rights, the Rights Issue Shares and the Consideraton Shares have not been and will not be registered under the relevant laws of any Excluded Territory or any state, province or territory thereof and may not be taken up, offered, sold, resold, delivered or distributed, directly or indirectly, within, into or from any other Excluded Territory or to, or for the account or benefit of, any person with a registered address in, or who is resident or ordinarily resident in, or a citizen of, any other Excluded Territory except pursuant to an applicable exemption. There will be no public offer in any Excluded Territory. Therefore, Provisional Allotment Letters will not be sent to, nor will any Rights Issue Entitlements be credited to a stock account in CREST on behalf of, any Shareholder with a registered address in an Excluded Territory.

Prospective investors must not treat the contents of this document as advice relating to any legal, taxation, investment or other matter. Prospective investors must inform themselves as to: (i) the legal requirements within their own jurisdiction for the subscription for, purchase, holding, transfer, redemption or other disposal of shares; (ii) any foreign exchange restrictions applicable to the subscription for, purchase, holding, transfer, redemption or other disposal of securities which they may encounter; and (iii) the income and other tax consequences which may apply in their own jurisdictions as a result of the purchase, holding, transfer, redemption or other disposal of securities. Prospective investors must rely on their own representatives, including their own legal advisers and accountants, as to the legal, taxation, investment or other related matters concerning the Company and an investment therein.

In making an investment decision, each investor must rely on their own examination, analysis and enquiry of the Company and the terms of the Rights Issue, including the merits and risks involved. The Ordinary Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state's securities commission in the United States or any US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the Rights Issue, Admission, Consideration Share Admission or the accuracy or adequacy of this document. Any representation to the contrary is a criminal offence in the United States.

NOTICE TO EEA INVESTORS

In relation to each EEA State which has implemented the Prospectus Directive (each a ''relevant member state''), no Nil Paid Rights, Fully Paid Rights, Rights Issue Shares or the Consideration Shares have been offered or will be offered pursuant to the Rights Issue to the public in that relevant member state prior to the publication of a prospectus in relation to the Nil Paid Rights, Fully Paid Rights, Rights Issue Shares and the Consideration Shares which has been approved by the competent authority in that relevant member state or, where appropriate, approved in another relevant member state and notified to the competent authority in the relevant member state, all in accordance with the Prospectus Directive, except that, with effect from and including the relevant implementation date, offers of Nil Paid Rights, Fully Paid Rights, Rights Issue Shares or the Consideration Shares may be made to the public in that relevant member state at any time:

• (A) to any legal entity which is a qualified investor as defined in the Prospectus Directive;
• (B) to fewer than 100 or, if the relevant member state has implemented the relevant provision of the PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) in such relevant member state; or
• (C) in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of Nil Paid Rights, Fully Paid Rights, Rights Issue Shares or the Consideration Shares shall result in a requirement for the publication by the Company or Oriel Securities of a Prospectus pursuant to Article 3 of the Prospectus Directive.

For this purpose, the expression ''offer of any Nil Paid Rights, Fully Paid Rights, Rights Issue Shares or the Consideration Shares to the public'' in relation to any Rights Issue Shares, Consideration Shares, Nil Paid Rights and Fully Paid Rights in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the Rights Issue and any Nil Paid Rights, Fully Paid Rights and Rights Issue Shares to be offered so as to enable an investor to decide to subscribe for or acquire any Nil Paid Rights, Fully Paid Rights, Rights Issue Shares or the Consideration Shares, as the same may be varied in that relevant member state by any measure implementing the Prospectus Directive in that relevant member state.

NOTICE TO ALL INVESTORS

Any reproduction or distribution of this document, in whole or in part, and any disclosure of its contents or use of any information contained in this document for any purpose other than considering an investment in the Provisional Allotment Letters, the Nil Paid Rights, the Fully Paid Rights, the Rights Issue Shares or the Consideration Shares is prohibited. By accepting delivery of this document, each offeree of the Provisional Allotment Letters, the Nil Paid Rights, the Fully Paid Rights, the Rights Issue Shares or Consideration Shares agrees to the foregoing.

Prospective investors should only rely on the information contained in this document and any documents incorporated herein by reference. No person has been authorised to give any information or make any representations other than those contained in this document and, if given or made, such information or representations must not be relied upon as having been authorised by the Company, the Directors or Oriel Securities. Neither the contents of the Company's or any other member of the Group's, nor the contents of Noratel's or any member of the Noratel Group's, websites form part of this document.

The contents of this document are not to be construed as legal, business or tax advice. Each prospective investor should consult his or its own legal adviser, financial adviser or tax adviser for legal, financial or tax advice.

Oriel Securities, which is authorised and registered in the United Kingdom by the FCA, is acting exclusively for the Company and for no one else in connection with the Rights Issue or the Acquisition, and will not regard any other person (whether or not a recipient of this document) as a client in relation to the Rights Issue or the Acquisition and will not be responsible to any other person for providing the protections afforded to its clients, or for providing advice in connection with the Rights Issue, Acquisition the contents of this document or any matter referred to in this document.

Apart from the responsibilities and liabilities, if any, which may be imposed on it by FSMA or the regulatory regime established thereunder, Oriel Securities does not accept any responsibility whatsoever or makes any representation or warranty, express or implied, for the contents of this document, including its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Ordinary Shares, the Rights Issue Admission or the Acquisition, and nothing in this document is or will be relied upon as a promise or representation in this respect, whether as to the past, present or future. Oriel Securities accordingly disclaims to the fullest extent permitted by law all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this document or any such statement.

Notice of a General Meeting of the Company, to be held at the Company's offices at 2 Chancellor Court, Occam Road, Surrey Research Park, Guildford GU2 7AH on 23 June 2014 at 11.00 a.m., to approve the Acquisition and the Rights Issue, is set out at the end of this document. The Form of Proxy for use at the General Meeting is enclosed. To be valid, Forms of Proxy for use in connection with the meeting should be completed, signed and returned as soon as possible and, in any event, so as to reach the Company's registrars, Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA by not later than 11.00 a.m. on 19 June 2014 being 48 hours (excluding non-trading days) before the time appointed for the meeting.

Alternatively, a proxy may also be appointed, for CREST members, by using the CREST electronic proxy appointment service. For further details please see the notes to the notice of the General Meeting set out at the end of this document. The appointment of a proxy will not preclude you from attending the General Meeting and voting in person if you wish to do so.

This document is dated 5 June 2014.

TABLE OF CONTENTS

PART I	Summary	6
PART II	Risk Factors	21
PART III	Important Information	30
Part IV	Rights Issue Statistics	35
PART V	Expected Timetable of Principal Events	36
PART VI	Directors, Company Secretary, Registered Office and Advisers	37
PART VII	Letter from the Chairman of Acal	39
PART VIII	Summary of the Principal Terms of the Acquisition	48
PART IX	Information on Acal, Noratel and the Enlarged Group	51
PART X	Operating and Financial Review of Acal	58
PART XI	Operating and Financial Review of Noratel Group	66
PART XII	Directors, Senior Management and Corporate Governance	74
PART XIII	Historical Financial Information	79
Section A	Historical Financial Information relating to Acal	79
Section B	Historical Financial Information relating to Noratel Group	80
PART XIV	Unaudited Pro Forma Financial Information for The Enlarged Group	103
PART XV	Terms and Conditions of the Rights Issue	109
PART XVI	Taxation	132
PART XVII	Additional Information	137
PART XVIII	Definitions and Interpretation	163
PART XIX	Notice of General Meeting	169

PART I

Summary

Summaries are made up of disclosure requirements known as ''Elements''. These Elements are numbered in Sections A – E (A.1- E.7). This summary contains all the Elements required to be included in a summary for this type of securities and the issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements.

Even though an Element may be required to be inserted in the summary because of the type of securities and the issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of ''not applicable''.

		Section A – Introduction and warnings
A.1	Introduction	This summary should be read as an introduction to this document. Any decision to invest in the securities should be based on consideration of this document as a whole by the investor. Where a claim relating to the information contained in this document is brought before a court, the plaintiff investor might, under the national legislation of the Member States, have to bear the costs of translating this document before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of this document or it does not provide, when read together with the other parts of this document, key information in order to aid investors when considering whether to invest in such securities.
A.2	Consent for Intermediaries	Not applicable. The Company is not engaging any financial intermediaries for any resale of securities or final placement of securities after publication of this document. Accordingly, no such consent is included in this document.
		Section B – Issuer
B.1	Legal and Commercial Name	Acal plc (''Acal'' or the ''Company'')
B.2	Domicile/ Legal Form/ Legislation/ Country of Incorporation	Acal was incorporated and registered in England and Wales on 9 April 1986 with registered number 2008246 under the Companies Act 1985 as a private limited company under the name Spurfame Limited. On 20 March 1987 the Company changed its name to Acal Limited. On 22 October 1987 the Company re-registered as a public limited company and changed its name to Acal plc. In March 1994, Acal was admitted to listing on the Official List and to trading on the London Stock Exchange's main market for listed securities. The principal legislation under which the Company operates, and under which the Rights Issue Shares and the Consideration Shares will be created, is the Companies Act 2006.
B.3	Key factors of issuer's current operations and principal activities	Acal Acal is a specialist electronics group supplying niche electronics to industrial manufacturers and the healthcare sector. The Group operates a number of high quality businesses which supply and create individual product solutions to meet specific customer needs. Acal is well positioned with an infrastructure to deliver a complementary range of specialist products and bespoke solutions across Europe as well as in

Asia and Africa. The Acal Group's businesses comprise Acal generated from major economies in Europe. trebling its specialist electronics revenues. These acquisitions specialist distribution offering. These acquisitions have costs of the integration) during the year ended 31 March margin) on a continuing basis. operational efficiencies. business is participating. The disposal represented the 2013. underlying profit before taxation of £6.3 million of £3.45. Noratel Noratel is a global designer and manufacturer of chokes. Noratel has a broad customer base in Europe, Asia gas sectors. transformers, Noratel is an international group of 16 B.4 Significant recent Acal trends affecting the Company and the February 2009, Acal has successfully transitioned into a industries in which it European supplier of specialist electronics to the industrial operates
		BFi, Hectronic, MTC, Myrra, RSG, Stortech and Vertec, of which Acal BFi is the largest. Approximately 70 per cent. of the Group's revenues are
		Acal has completed seven acquisitions in the last five years, more than have expanded both its design and manufacturing capabilities as well as its delivered a combined pre-tax return on investment of 24 per cent. (after including the 2014. Combined with the development of the organic performance and the disposal of the Supply Chain Division, this has led to an increase in underlying operating profits and underlying operating margin during this period from an underlying operating loss of £0.7 million (-0.4 per cent. margin) to an underlying operating profit of £7.1 million (3.4 per cent.
		Acal's strategy is to further enhance its leading position through organic growth and by acquiring complementary businesses which together create the opportunity for enhanced growth and/or the realisation of
		On 2 June 2014 Shareholders voted to approve the disposal of the Enterprise Business to a company in which the management team of that remaining business contained within the Company's Supply Chain Division and reflects Acal's continued strategy of building a specialist electronics supplier to the industrial and medical sectors. The disposal completes the Company's program of non-core business disposals, following the disposal of its UK Parts Business and the European Parts Business in
		In its 2014 Financial Results released on 5 June 2014, Acal reported for the year ended 31 March 2014 on revenues of £211.6 million. As at 31 March 2014, Acal had net assets of £48.5 million. As at the close of business on 4 June 2014, Acal had a market capitalisation of £108.1 million and a share price
		electromagnetic products, specifically low, medium and high power transformers and and increasingly in North America, and has become a preferred supplier to leading international OEMs in various markets. It has a well-establised position supplying the industrial, renewable energy, medical and oil and
		With almost sixty years of experience in designing and manufacturing companies operating in 12 countries, with more than 2,300 employees of which approximately 75 per cent. are located at the production facilities in Asia.
successful acquisition of the Myrra Group in April 2013.		Over the last five years, as a result of a change of Group strategy in leading market place with services spanning distribution, design and manufacture. This has been achieved through both a change in the focus of the underlying business towards more highly differentiated products as well as through acquisitions of complementary specialist businesses, including Acal's

		Similar to the Noratel Group, the Myrra Group designs and manufactures electromagnetic products, specifically custom transformers and inductors for the industrial sector and generated 11 per cent. constant exchange rate (''CER'') growth in sales during year ended 31 March 2014. In addition, manufacturing synergies have been achieved through production efficiency as well as purchasing savings through enhanced scale. Cross-selling synergies are also underway, with over two thousand Myrra products now listed on the Acal BFi website and promotional activities throughout a number of countries new to Myrra. For the past three financial years the Group has performed well against a challenging market backdrop. The Group has seen an increase in its market share and operating margins over this period, with a strong focus on control of operating costs and cash generation. While markets remain challenging, the Company has been encouraged by the pick-up in orders for the year ended 31 March 2014, with electronic orders 21 per cent. higher (CER) than in the previous financial year. Excluding acquisitions like for like orders were 4 per cent. higher than in the previous financial year. The current order book for future delivery, mainly covering the Group's first quarter of the next financial year, has increased by 37 per cent. from a year ago, of which organic growth accounted for 11 per cent In addition, Global and Eurozone purchasing managers index (''PMI'') data has seen an improving trend since July 2012, with the Markit Eurozone Manufacturing PMI for May 2014 at 52.2 and the JPMorgan Global Manufacturing PMI for May 2014 at 52.2 (where any reading over 50 is indicative of growth). This is a significant improvement from the low point in July 2012 of 44.0 (Eurozone PMI) and August 2012 of 48.6 (Global PMI).
		Noratel Noratel's trading for the first four months of 2014 reports revenues that have increased by 5 per cent. compared to the prior year. Rolling twelve month revenues to the end of April 2014 have grown by 2 per cent., at CER compared to prior year and rolling twelve month orders at the end of April 2014 were 1 per cent. lower, at CER, compared to the prior year. With a significant pipeline of new projects both in the industrial, renewable energy and medical sectors, the Noratel Group is well positioned for further growth, as project releases come through and global economies continue to improve.
		The general improvement in market conditions, pick up in industrial manufacturing activities and growth in the renewable energy and medical sectors presents significant growth opportunities for the Noratel Group. With a strong track record, custom design service, broad geographical presence and a low cost manufacturing base in Asia, the Noratel Group is well positioned to take advantage of these opportunities and grow further.
B.5	Group Structure	The Company acts as the holding company of the Group with headquarters in the United Kingdom, the principal activities of which are the supply and creation of specialist electronic products. Following Completion of the Acquisition, Acal will be the parent company of the Enlarged Group.

B.6	Notifiable Interests	As at the Latest Practicable Date, the Company had been notified in accordance with DTR5 of the Disclosure and Transparency Rules of the following interests in its Ordinary Shares:
	Different voting rights/controlling interests	Shareholder		Number of shares	Percentage of Total Voting rights (%)
		Aberforth Partners Aberdeen Asset Management Group Hargreave Hale Investment Management Unicorn Asset Management Curry Family Holding Legal & General Investment Management Herald Investment Management Henderson Global Investors Old Mutual Asset Managers AXA Investment Management Save as disclosed in this Element, the Company is not aware of any person who, as at the Latest Practicable Date, directly or indirectly, has a holding which is notifiable under English law. The Company is not aware of any persons who, as at the Latest Practicable Date, directly or indirectly, jointly or severally, exercise or could exercise control over the Company nor is the Company aware of any arrangements the operation of which may at a subsequent date result in a change of control of the Company. None of the Company's major shareholders has different voting rights. To the extent known to the Company, the Company is not directly or indirectly owned or controlled by any person or any group of persons.		3,949,587 3,613,251 3,275,995 2,552,547 2,043,500 1,648,637 1,407,248 1,271,087 1,135,000 1,087,000	12.61 11.53 10.46 8.15 6.52 5.26 4.49 4.06 3.62 3.47
B.7	Historical Financial Information	Acal The selected financial information set out below has been extracted without material adjustment from the 2012 Annual Report, the 2013 Annual Report and the 2014 Financial Results.
		Financial Year ended 31 March Consolidated income statement	2012 £m	2013 £m	2014 £m
		Continuing operations Revenue Operating profit Underlying operating profit Profit before tax Underlying profit before tax Profit for the year from continuing operations Profit/(loss) from discontinued operations	207.1 3.3 6.8 2.1 5.9 1.8 0.3	177.4 1.4 5.5 0.7 5.0 2.1 (4.0)	211.6 5.2 7.1 4.2 6.3 3.7 (2.4)

	Consolidated balance sheet
		2012	2013	2014
		£m	£m	£m
	Non-current assets	32.5	30.9	33.1
	Current assets	87.4	81.8	85.8
	Assets in disposal group held for
	sale	—	—	6.9
	Total assets	119.9	112.7	125.8
	Current liabilities	(59.4)	(50.9)	(56.9)
	Non-current liabilities	(11.4)	(10.3)	(19.0)
	Liabilities in disposal group held for
	sale Total liabilities	— (70.8)	— (61.2)	(1.4) (77.3)
	Net assets	49.1	51.5	48.5
	Consolidated statement of cash flows
		2012	2013	2014
		£m	£m	£m
	Net cash flows from operating
	activities	6.9	3.7	4.1
	Net cash used in investing
	activities	(5.0)	(1.6)	(10.4)
	Net cash (used in)/from financing
	activities	(3.1)	4.2	4.5
	Net (decrease)/increase in cash
	and cash equivalents	(1.2)	6.3	(1.8)
	Free cash flow Cash and cash equivalents at	10.5	7.7	7.3
	31 March	12.3	17.8	18.1
	Notes: A. The income statement for the year ended 31 March 2012 has been restated to treat the Supply Chain Division as a discontinued operation as set out in Part X (''Operating and Financial Review of Acal'');
	B. Underlying profit measures above amortisation of acquired intangible assets, results from discontinued operations and IAS19 pension charges;	exclude the	impact of exceptional	items,
	C. The balance sheet for the financial years ended 31 March 2012 and 2013 and the cash flow statement are not required to be restated for the discontinued operations under IFRS and therefore includes the discontinued operations.
	For the financial year ended 31 March 2012, Acal reported an underlying profit before taxation of £5.9	million from	continuing	operations on
	revenues of £207.1 million. During the financial year, Acal undertook the
	acquisition of Hectronic AB, a	specialist	provider of	embedded
	computing technology based in	Sweden,	and MTC	Micro Tech
	Components GmbH, a specialist components based in Germany for a total consideration of £4.1 million.	provider	of	electromagnetic
	For the financial year ended 31 March 2013, Acal reported underlying
	profit before taxation of £5.0	million from	continuing	operations on
	revenues of £177.4 million. During the financial year, Acal disposed of its UK Parts Business within the Supply Chain division for a consideration of £2.0 million.
	For the financial year ended 31 March 2014, Acal reported underlying profit before taxation of £6.3 revenues of £211.6 million. During the financial year Acal completed the acquisitions of Myrra, Young Electronics Group and RSG Electronic Components for a total up front consideration of £12.5m. Acal disposed	million from	continuing	operations on
	of its European Parts Business within the Supply Chain division for a

consideration of £3.7m. Subsequent to the year-end, the Company completed the disposal of its last remaining business in the Supply Chain division, the Enterprise Business, for a cash consideration of £6.0 million.

For the financial year ended 31 March 2014, electronic sales were 17 per cent. higher (CER) than in the previous financial year (with second half growth of 22 per cent.). Excluding acquisitions, like-for-like sales were 2 per cent. higher (with a strong second half growth of 4 per cent.). This compares to a decline of 6 per cent. experienced in the previous financial year.

Other than as set out above there has been no significant change in the financial or trading position of the Company or its subsidiaries during the period covered by the historical key financial information on Acal set out in this Element. There have been no significant changes in the financial or trading position of the Company or its subsidiaries from 31 March 2014, being the end of the last financial period for which audited annual financial statements have been published, apart from the disposal of the Enterprise Business which was approved by Shareholders on 2 June 2014.

Noratel

The selected financial information set out below has been extracted without material adjustment from Part XIII (B) (''Historical Financial Information relating to Noratel'').

Financial Year ended
31 December

31 December Consolidated income statement	2011 NOKm	2012 NOKm	2013 NOKm
Revenue	726.0	742.5	793.9
Operating profit	49.7	73.8	73.9
Underlying operating profit	55.7	75.2	81.1
Underlying EBITDA	72.7	92.1	100.3
Profit before tax	29.9	47.7	37.5
Underlying profit before tax*	35.9	49.1	44.7
Profit for the year	23.9	37.5	29.0

*NOK4.4 million (9.0 per cent.) decrease in underlying profit before tax in 2013 compared to the prior year is attributable to a NOK10.3 million increase in net finance costs resulting mainly from foreign exchange losses on debt facilities.

Consolidated balance sheet	2011 NOKm	2012 NOKm	2013 NOKm
Non-current assets	457.0	458.8	476.8
Current assets	372.2	343.4	338.2
Total assets	829.2	802.2	815.0
Current liabilities	(203.3)	(183.7)	(497.4)
Non-current liabilities	(460.1)	(428.5)	(90.7)
Total liabilities	(663.4)	(612.2)	(588.1)
Net assets	165.8	190.0	226.9
Consolidated statement of cash flows	2011 NOKm	2012 NOKm	2013 NOKm
Net cash flows from operating activities	54.0	109.2	101.6
Net cash used in investing activities Net cash used in financing	(25.0)	(29.8)	(23.7)
activities Net increase/(decrease) in cash	(14.1)	(79.4)	(80.5)
and cash equivalents Cash and cash equivalents at	14.9	—	(2.6)
31 December	27.5	31.1	23.4
Note: Underlying profit measures above exclude the impact of exceptional items.

		The Noratel Group has grown consistently over the 3 year period ending 31 December 2013 amidst challenging market conditions. Revenue has grown by 5 per cent. CAGR over the 3 year period, with underlying operating margin percentage points historical period margins and a stable cost base.	and and resulting	underlying 2.6 percentage from	EBITDA increasing	margin points revenue,	improving respectively resilient	by 2.5 over the gross
		For the financial year ended 31 December 2013, the Noratel Group has achieved growth in revenue of 6.9 per cent. and an underlying EBITDA margin of 12.6 per cent.
		Noratel's revenue performance benefitted from the acquisition of NPE in December 2012, giving the Noratel Group access to the sizeable US market and contributing NOK18.2 million of revenue to the Noratel Group in the year ended 31 December 2013.
		Other than as set out above, there have been no significant changes in the financial or trading position of Noratel or its subsidiaries, during or after the period covered by the historical key financial information on the Noratel Group set out in this Element.
B.8	Pro forma Financial Information	Selected key unaudited pro forma financial information for the Enlarged Group is set out below. The pro forma statement of net assets and pro forma income statement have been prepared on the basis set out in the notes below to illustrate the impact of: (i) the Class 1 disposal of the Enterprise Business by the Acal Group which completed on 2 June 2014; (ii) the Rights Issue; and (iii) the Acquisition, on the net assets of the Group as at 31 March 2014 as if they had taken place at that date, and on the income statement of the Group for the year ended 31 March 2014 as if they had taken place at the beginning of that financial year. The unaudited pro forma statement of net assets and the unaudited pro forma income statement have been prepared for illustrative purposes only and, by their nature, address a hypothetical situation and do not, therefore, represent the Enlarged Group's actual financial position or results and do not constitute statutory accounts for any company within					the meaning of Section 434 of the Companies Act 2006.
			Acal 31 March 2014 £m	Noratel 31 December 2013 £m	Enterprise Business disposal £m	Rights Issue £m	Acquisition adjustments £m	Total £m
			(Note 1)	(Note 2)	(Note 3)	(Note 4)	(Note 5)
		ASSETS Non-current assets	33.1	47.2	—	—	7.6	87.9
		Current assets	85.8	33.5	5.6	52.5	(52.5)	124.9
		Assets in disposal group classified as held for sale	6.9	—	(6.9)	—	—	—
		TOTAL ASSETS	125.8	80.7	(1.3)	52.5	(44.9)	212.8
		LIABILITIES
		Current liabilities Non-current liabilities	(56.9) (19.0)	(49.3) (9.0)	— —	— —	35.6 (14.7)	(70.6) (42.7)
		Liabilities in disposal group classified as held for sale	(1.4)	—	1.4	—	—	—
		TOTAL LIABILITIES	(77.3)	(58.3)	1.4	—	20.9	(113.3)
		NET ASSETS	48.5	22.4	0.1	52.5	(24.0)	99.5

	Notes 1)	The financial information relating to the Acal Group has been extracted without material adjustment from the audited financial statements of the Acal Group for the year ended 31 March 2014 which were published on 5 June 2014 and are incorporated by reference in this document.
	2)	The financial information relating to the Noratel Group has been extracted from the financial information set out in Section B of Part XIII of this document, translated at the exchange rate of NOK10.088:£1.00, being the closing rate as at 31 December 2013.
	3)	This adjustment relates to the class 1 disposal of the Enterprise Business by the Acal Group which was approved by Shareholders and completed subsequent to the date of the financial information presented above on 2 June 2014. This adjustment comprises:
		(a) The removal of the assets and liabilities relating to the Enterprise Business which, as at 31 March 2014, were classified separately as held for sale;
		(b) A £5.3 million adjustment to cash as set out in the Acal Group's circular to Shareholders dated 15 May 2014 reflecting the upfront consideration receivable by the Acal Group of £5.7 million less transaction and related costs of £0.4 million; and
		(c) A £0.3 million adjustment to trade and other receivables reflecting the deferred consideration receivable by the Acal Group on or before 31 December 2014.
	4)	A £52.5 million adjustment to cash representing the net proceeds of the Rights Issue, which are calculated on the basis set out on page 36 of this document.
	5)	This adjustment includes:
		(a) An adjustment to goodwill which has been calculated as follows:	£m
		Enterprise value	73.5
		Less financial net debt	(43.5)
		Consideration	30.0
		Less Noratel net assets acquired	(22.4)
		Pro forma adjustment to goodwill	7.6
		The enterprise value, financial net debt and consideration above are as set-out in paragraph 2 of Part VIII of this document, translated at the exchange rate of NOK9.996:£1.00, being the closing rate as at 2 June 2014.
		The Acquisition has been accounted for using the acquisition method of accounting. The excess of consideration over the book value of the net assets acquired has been reflected as goodwill. A fair value exercise of the assets and liabilities acquired, including a valuation of the intangible assets, has not yet been performed but will be undertaken following Completion to enable the Directors to identify individual intangible assets and make any fair value adjustments required.
		(b) A £35.6 million adjustment to current other financial liabilities to reflect the repayment on Completion of the Noratel Group's amortising term loan (NOK358.9 million translated at NOK10.088:£1.00).
		(c) A £14.7 million adjustment to non-current other financial liabilities to reflect the aggregate of: (i) the repayment on Completion of the Noratel Group's £6.1 million shareholder loan (NOK61.9 million translated at NOK10.088:£1.00); and (ii) £20.8 million of estimated drawings against the Facility which, together with the net proceeds from the Rights Issue, will be used to fund the Acquisition.
		(d) A £52.5 million adjustment to cash representing the aggregate of: (i) £29.2 million of cash consideration payable in respect of the Acquisition (£30.0 million Consideration as set-out above less £0.8 million of consideration which shall be settled through the Initial Consideration Shares); (ii) £2.4 million of estimated transaction costs payable in connection with the Acquisition and the Facility; (iii) the £41.7 million repayment of the Noratel Group's amortising term and shareholder loans on Completion; and (iv) the £20.8 million estimated drawings against the Facility.

		Unaudited Pro Forma Income Statement
			Acal for the year ended 31 March 2014 £m	Noratel for the year ended 31 December 2013 £m	Enterprise Business disposal £m	Acquisition adjustments £m	Total £m
		Revenue Cost of sales	(Note 1) 211.6 (148.6)	(Note 2) 86.4 (55.1)	(Note 3) — —	(Note 4) — —	298.0 (203.7)
		Operating expenses (including exceptional items)	(57.8)	(23.2)	—	(1.2)	(82.2)
		Operating profit	5.2	8.1	—	(1.2)	12.1
		Finance revenue	0.2	0.4	—	—	0.6
		Finance costs	(1.2)	(4.4)	—	2.7	(2.9)
		Profit before tax Tax expense	4.2 (0.5)	4.1 (0.9)	— —	1.5 (0.3)	9.8 (1.7)
		Profit for the year from continuing operations	3.7	3.2	—	1.2	8.1
		Loss for the year from discontinued operations	(2.4)	—	2.4	—	—
		Notes 1) The financial information relating to the Acal Group has been extracted without material adjustment from the audited financial statements of the Acal Group for the year ended 31 March 2014 which were published on 5 June 2014 and are incorporated by reference in this document. 2) The financial information relating to the Noratel Group has been extracted from the financial information set out in Section B of Part XIII of this document, translated at the exchange rate of NOK9.1931:£1.00, being the average exchange rate for the year ended 31 December 2013. 3) This adjustment relates to removal of the loss for the year ended 31 March 2014 of £2.4 million (including a provision for the estimated loss on disposal) relating to the Enterprise Business which was disposed by the Acal Group subsequent to the period covered by the financial information presented above on 2 June 2014. The results of the Enterprise Business were classified as a discontinued operation in the Acal Group's unadjusted financial information presented above. 4) The adjustments arising as a result of the Acquisition are set out below: a) A £1.2 million adjustment to operating expenses to reflect the estimated transaction costs payable in respect of the Acquisition. These costs, which are non-recurring, shall be classified as exceptional costs in the Acal Group's financial statements for the year ending 31 March 2015. b) A net £2.7 million decrease to net finance costs to remove the interest charge relating to the Noratel Group's amortising term loan and shareholder loan which are being repaid on Completion and include the estimated interest relating to the portion of Facility drawn to fund the Acquisition assuming these are drawn for a full 12 month period. Finance costs in respect of the Noratel Group in the year ended 31 December 2013 included £0.7 million relating to foreign exchange losses on financial liabilities (NOK6.1 million translated at NOK9.1931:£1.00).
		c) A £0.3 million adjustment to reflect the tax impact of the adjustment to finance costs calculated at 11.9 per cent., being the Acal Group's effective tax rate for the year to 31 March 2014.
B.9	Profit Forecast/ Estimates	Not applicable. There are no profit forecasts or estimates contained in this document.
B.10	Qualifications in the Audit Report	Not applicable. There have been no qualifications of the audit reports incorporated into this document by reference.
B.11	Insufficient Working Capital	Not applicable. Acal is of the opinion that, taking into account the net proceeds of the Rights Issue, and the bank and other facilities available to the Acal Group, the working capital available to the Acal Group is sufficient for its present requirements, that is, for at least the 12 months following the date of publication of this document. Acal is of the opinion that, taking into account the net proceeds of the Rights Issue, the Facility and the bank and other facilities available to the

		Enlarged Group, the working capital available to the Enlarged Group is sufficient for its present requirements, that is, for at least the 12 months following the date of publication of this document.
		Section C – Securities
C.1	Type and Class of Securities being offered	The Rights Issue comprises 31,332,127 Rights Issue Shares (such number of Rights Issue Shares being subject to adjustment to take account of any Ordinary Shares which may be issued between the Latest Practicable Date and the Record Date as a result of the exercise of options and awards under the Acal Share Plans). The nominal value of the total issued Ordinary Share capital of the Company immediately following the Rights Issue is expected to be £3,133,212.70 divided among 62,664,254 Ordinary Shares.
		The number of Initial Consideration Shares will be determined using the average mid-market closing price for the three trading days prior to Completion up to a maximum of 500,000 Ordinary Shares. In the event that the maximum number of Initial Consideration Shares are issued, the Ordinary Share capital of the Company immediately following Completion is expected to be £3,158,212.70 divided among 63,164,254 Ordinary Shares (assuming that no options or awards under the Acal Share Placing are exercised).
		The ISIN for the Rights Issue Shares and the Consideration Shares will be the same as that of the Existing Shares being GB0000055888. The ISIN for the Nil Paid Rights will be GB00BN573Z24 and for the Fully Paid Rights will be GB00BN574045.
C.2	Currency	All Rights Issue Shares and Consideration Shares being offered are denominated in pounds sterling.
C.3	Shares issued / Value per share	As at the Latest Practicable Date, the Company had 31,332,127 fully paid ordinary shares of 5 pence each in issue. The Company has no partly paid ordinary shares in issue. The Company holds no shares in treasury.
C.4	Rights attaching to the Securities	(i) The Rights Issue Shares and the Consideration Shares will rank pari passu with each other and with the Existing Shares for voting purposes. On a show of hands at a general meeting each Shareholder has one vote and on a poll each Shareholder has one vote per Ordinary Share held, in each case whether present in person or whether represented by a duly appointed proxy or other representative. (ii) The Rights Issue Shares and the Consideration Shares will rank
		pari passu with each other and with the Existing Shares for any distributions made on a winding up.
		(iii) The Rights Issue Shares and the Consideration Shares will rank pari passu with each other and with the Existing Shares in the right to receive a relative proportion of shares in the case of a capitalisation of reserves.
		(iv) The Rights Issue Shares and the Consideration Shares will rank pari passu with each other and with the Existing Shares in the rights to receive all distributions (if any), including dividends, declared, paid or made by the Company after Admission, but not, for the avoidance of doubt, the final dividend for the year ended 31 March 2014, the record date for which is 13 June 2014 (the ''2014 Final Dividend'').

C.5	Restrictions on Transfer	Not applicable. The Ordinary Shares are freely transferable and there are no restrictions on transfer.
		However, the making of the proposed offer of Ordinary Shares to persons who are located or resident in or who have a registered address in countries other than the United Kingdom, may be affected by the law or regulatory requirements of the relevant jurisdiction, which may include restrictions on the free transferability of the Ordinary Shares.
C.6	Admission to Trading	The Existing Shares are listed on the premium segment of the Official List and are traded on the London Stock Exchange's main market for listed securities.
		Application will be made to the UK Listing Authority and the London Stock Exchange for all of the Rights Issue Shares and the Consideration Shares to be admitted to the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities. The Rights Issue Shares and the Consideration Shares will not be listed on any other Regulated Market. It is expected that admission to listing of the Rights Issue Shares, nil paid, and dealings in the Rights Issue Shares, nil paid, on the London Stock Exchange's main market for listed securities will commence at 8.00 a.m. on 24 June 2014 and, in relation to the Consideration Shares, at 8.00 a.m. on or around 16 July 2014.
C.7	Dividend Policy	Acal has recommended the 2014 Final Dividend, which would bring total dividends payable for the year ended 31 March 2014 to 9.35 pence per Ordinary Share, which represents an increase of 10 per cent. on the previous year and a dividend cover of 1.7 times underlying earnings. In total the dividend has increased 34 per cent. over the last four years.
		The Board considers dividends to be an important component of Shareholder returns and intends to continue its progressive dividend policy, wherever practical to do so. Over the medium term, it is the Board's intention to maintain dividend cover in the range of two to three times underlying earnings.
		The Rights Issue Shares, when fully paid, and the Consideration Shares will rank pari passu with the Existing Ordinary Shares with respect to the right to receive dividends, save that they will not rank for the proposed 2014 Final Dividend.
		Section D – Risks
D.1	Key information on the	Risks associated with the Acquisition not proceeding
	risks specific to the issuer or its industry	The Acquisition is contingent on certain conditions, including approval by Shareholders of all of the Resolutions. If these conditions are not satisfied such that the Acquisition does not complete, the Company would nonetheless be obliged to pay certain costs associated with the Acquisition of approximately £1.7 million (being non-contingent adviser fees and a £0.5 million break fee granted by Acal to the Sellers).
		The Rights Issue is not conditional upon Completion of the Acquisition; if the Acquisition does not complete but the Rights Issue does, the proceeds of the Rights Issue will be retained by the Group while management explores other acquisition opportunities and, if no acquisitions can be found on acceptable terms within a suitable timeframe, the Directors will consider how best to return surplus capital to Shareholders. Such a return could result in certain costs and complexities such that any return of capital may be less than the amount subscribed in the Rights Issue.

		Risks associated with the Acquisition
		The Enlarged Group may not realise the expected benefits from the Acquisition or may encounter difficulties in achieving these anticipated benefits or unexpected costs.
		Only limited warranties are being provided by the Sellers in the Sale and Purchase Agreement which may limit the ability of the Enlarged Group to recover for potential liabilities associated with the Noratel Group.
		Following Completion, the leverage of the Enlarged Group will increase which may result in increased borrowing costs and more restrictive covenants which may limit its commercial and financial flexibility.
		Risks associated with the Group and, following Completion, the Enlarged Group
		The Enlarged Group faces operational risks (including, among others, business interruptions, theft, fraud, natural disasters, the fluctuation of prices in the supply of raw materials, and failure by third parties to perform in accordance with contractual agreements) which could impact the trading performance of the Enlarged Group.
		Demand for the Enlarged Group's products may be adversely affected by macroeconomic and market conditions beyond its control which could ultimately affect the Enlarged Group's profitability.
		The Enlarged Group's businesses are exposed to fluctuations in currency exchange rates (in particular the Euro and NOK). An adverse change in currency exchange rates may impact the Enlarged Group's results of operations, financial condition and/or growth prospects.
		The Enlarged Group may have to make additional contributions to Acal's existing closed legacy retirement benefit fund, which could have an adverse effect on the Enlarged Group's business and prospects.
		Major damage to the Enlarged Group's warehouse and production facilities from fire, malicious damage or natural disaster would result in disruption in shipments to customers and therefore impact the business for a period.
D3	Key information on the risks specific to the securities	The market price of Ordinary Shares could be volatile and subject to significant fluctuations due to a variety of factors, which could result in a decline in the market price of the Ordinary Shares.
		Shareholders who do not acquire Rights Issue Shares in the Rights Issue will experience dilution in their ownership of Acal. Shareholders will also experience dilution as a result of the issue of the Consideration Shares.
		Shareholders outside the United Kingdom may not be able to take up the Rights Issue Shares in the Rights Issue or future issues of Ordinary Shares and therefore may suffer dilution.

Section E – Offer
-------------------	--	--

E.1	Total net proceeds and estimate of total expenses of the Rights Issue, including estimated expenses charged to investors	The Company expects to raise net proceeds (after deducting commissions, other estimated offering-related fees and expenses) from the Rights Issue of approximately £52.5 million. In addition, inter-conditional on the Rights Issue and Acquisition completing, the Company is entering into a £70 million new banking facility (the ''Facility''). The Facility will be partially drawn down at Completion, to refinance all of Acal's and the Noratel Group's existing debt facilities. The Company estimates normalised net debt following
		Completion will be approximately £30 million and therefore anticipates headroom of £40 million following Completion to provide ongoing financial flexibility.

		The total costs and expenses of, and incidental to, the Acquisition, the Rights Issue and the Facility payable by the Company (relating to amongst other things underwriting commissions) are estimated to amount to £5.0 million (excluding VAT). No expenses will be charged to Shareholders who take up their rights in the Rights Issue. Shareholders who do not take up their rights in the Rights Issue may have the Rights Issue Shares to which they are entitled
		sold on their behalf. To the extent that such Rights Issue Shares are sold at a premium to the Rights Issue Price, the relevant Shareholders shall be entitled to such premium, subject to brokerage and exchange costs. No amount of less than £5.00 will be paid to such Shareholders.
E.2	Reasons for the Rights Issue, use of proceeds, and estimated net amount of expenses	The Company has conditionally agreed to acquire all the issued and to be issued and outstanding shares in Noratel, based on an enterprise value (on a debt free basis) of NOK735 million for the upfront cash consideration of NOK291.88 million (£29.2 million) and the issue of such number of Initial Consideration Shares as is equivalent to £0.8 million as determined using the average mid-market closing price for the three trading days prior to Completion. The total Consideration Shares to be issued is limited to a maximum of 500,000 Ordinary Shares (being 480,000 Initial Consideration Shares and 20,000 Additional Consideration Shares). In the event that the maximum number of Initial Consideration Shares are issued and the value of such Initial Consideration Shares is less than £0.8 million (as determined using the average mid-market closing price for the three trading days prior to Completion), Acal shall pay the Management Sellers a cash amount equivalent to the difference.
		The Company proposes to use the net proceeds of the Rights Issue and the funds raised from the Facility to fund the Acquisition. The resultant funds will be used to purchase the existing issued and to be issued share capital of Noratel and to refinance all of the Noratel Group's existing facilities. The remaining net proceeds will be used for working capital purposes and for any future acquisitions which meet the Company's strict criteria.
		The proposed acquisition of Noratel is a further step in the Group's stated growth strategy, being highly complementary to the Group's existing electromagnetics businesses. The Board believes that the Acquisition will bring a number of benefits to Acal, including:
		* further strengthening of Acal's specialist electronics business as:
		– Noratel's customised electromagnetics offering to a high quality industrial customer base is highly complementary with both Myrra (design and manufacture) and Acal BFi (specialist distribution); and
		– Noratel brings a broad long term customer base;
		* enhancing custom, design and production capabilities, noting in particular that:
		– a high proportion (c. 70 per cent.) of Noratel's products are customised or modified; and
		– Noratel provides additional design and manufacturing capabilities with production facilities in Asia, Europe and the US;
		* further developing the Group's geographic profile by:
		– expanding sales into northern and western Europe and Asia;
		– enlarging the Group's presence in Asia and the Nordic region, a core electronics market within Europe; and

		– providing an initial footprint into the US market;
		* potential operational benefits including:
		– opportunities for purchasing and development efficiencies between Acal and the Noratel Group; and
		– cross selling of products across customer and geographical segments; and
		* enhancing financial performance:
		– the acquisition of a high margin business (12.6 per cent. underlying EBITDA margin in the year ending 31 December 2013) with a track record of growth; and
		– it is expected to be immediately significantly enhancing to underlying earnings(1) per share (including the issue of Rights Issue Shares and Consideration Shares but excluding any costs and benefits of potential operational efficiencies).
		Note (1): This statement does not constitute a profit forecast.
		The Rights Issue is not conditional upon the Acquisition completing. In the unlikely event that the Rights Issue proceeds but the Acquisition does not complete, the Directors' current intention is that the proceeds of the Rights Issue will be invested and/or applied to manage the Company's debt and cash position on a short term basis while the Directors evaluate other acquisition opportunities and, if no acquisitions can be found on acceptable terms or within a suitable time period, the Directors will consider how best to return surplus capital to Shareholders. The Facility is inter-conditional on the Rights Issue and Acquisition completing.
E.3	Terms and conditions of the Rights Issue	The Rights Issue is expected to raise gross proceeds of approximately £55.1 million through the issue of 31,332,127 Rights Issue Shares at 176
		pence per Rights Issue Share (such number of Rights Issue Shares being subject to adjustment to take account of any Ordinary Shares which may be issued between the Latest Practicable Date, and the Record Date as a result of the exercise of options and awards under the Acal Share Plans). The Rights Issue Price represents a 47.97 per cent. discount to the Closing Price (adjusted for the 2014 Final Dividend) and a 30.63 per cent. discount to the theoretical ex-rights price of 261 pence on the same basis.
		Subject to the fulfilment of the terms and conditions set out in this document and, in the case of Qualifying Shareholders, the Provisional Allotment Letter, the Rights Issue Shares will be offered on the basis of one Rights Issue Share for every one Existing Ordinary Share held by way of rights to Qualifying Shareholders on the Record Date and so in proportion to any other number of Existing Ordinary Shares each Qualifying Shareholder then holds.
		The Rights Issue is fully underwritten by Oriel Securities on the terms and conditions of the Underwriting Agreement and is conditional upon (among other things) (i) passing of the Resolutions and (ii) Admission becoming effective by not later than 8.00 a.m. on 24 June 2014 (or such later date as the Company and Oriel Securities may agree but not later than 1 July 2014). The Underwriting Agreement may be terminated by Oriel Securities prior to Admission upon the occurrence of certain specified events, in which case the Rights Issue will not proceed. The Underwriting Agreement is not capable of termination following Admission. The Company reserves the right to decide not to proceed with the Rights Issue at any time prior to Admission and commencement of dealings in the Rights Issue Shares (nil paid). The latest time and date for acceptance and payment in full under the

		Qualifying Shareholders with registered addresses in the United States or in any of the other Excluded Territories will not be sent Provisional Allotment Letters and will not have their CREST stock accounts credited with Nil Paid Rights, except where the Company and Oriel Securities are satisfied that such action would not result in the contravention of any registration or other legal or regulatory requirement in such jurisidiction. If the conditions to the Underwriting Agreement are not satisfied or waived, the Rights Issue will not proceed.
E.4	Conflicts of interest	Not applicable. There are no interests (including conflicts of interest), known to the Company, which are material to the Rights Issue.
E.5	Name of person offering to sell the securities Lock-up agreement details including the parties involved and indication of the period of the lock-up	Acal plc The Management Sellers have agreed not to transfer any interest in the Consideration Shares for a period of two years from Completion pursuant to the terms of the Sale and Purchase Agreement. There are no other lock-up agreements in place.
E.6	Dilution	A Qualifying Shareholder who sells or otherwise elects not to take up or who is not permitted to take up its, his or her Nil Paid Rights (for example because they are Qualifying Shareholders in Excluded Territories) will experience a 50 per cent. dilution (i.e. its, his or her proportionate interest in the Company will drop by 50 per cent.) as a result of the Rights Issue. Shareholders will experience dilution as a result of the issue of the Consideration Shares. In the event that the maximum number of Consideration Shares are issued, Shareholders will experience a 0.79 per cent. dilution (i.e. its, his or her proportionate interest in the Company will drop by 0.79 per cent.) as a result of the issue of the Consideration Shares (by reference to their shareholding after completion of the Rights Issue). For the purposes of the foregoing, any dilution which may result from vesting or exercise of any options and awards under the Acal Share Plans (between the Latest Practicable Date and the Record Date) has been disregarded.
E.7	Expenses charged to the investor	Not applicable. There are no commissions, fees, or expenses to be charged to investors by the Company.

PART II

Risk Factors

This Part II addresses certain risks to which the Group and, following Completion, the Enlarged Group as appropriate are exposed, which could adversely affect the business, results of operations, cash flow, turnover, profits, assets, liquidity and/or capital resources of the Group or the Enlarged Group. The Directors consider the following risks and uncertainties to be the most significant for investors in the Company. Additional risks and uncertainties that are not presently known to the Directors, or that the Directors currently deem immaterial, may also have an adverse effect on the Group and, following Completion, the Enlarged Group. If any of these events occur, the business, financial condition, results of operations of the Group and, following Completion, the Enlarged Group could be materially and adversely affected by the manifestation of any of the risks described below. In such cases, the market price of the Ordinary Shares may decline and investors may lose all or part of their investment. Shareholders prior to voting on the Rights Issue and the Acquisition and prospective investors should consider these risks and uncertainties carefully, together with all the other information set out in this document and incorporated by reference herein. You should read the whole of this document and not rely solely on the information set out in this section

A. RISKS ASSOCIATED WITH THE ACQUISITION NOT PROCEEDING

Satisfaction of the conditions of Completion

Completion is subject to, inter alia, the approval of Acal Shareholders at the General Meeting, no material adverse change having occurred in relation to the Noratel Group, the Facility Agreement becoming unconditional and the Underwriting Agreement becoming unconditional and the satisfaction or waiver of other conditions which are considered customary for a transaction of this nature.

If Completion does not occur, the Group will experience a delay in the achievement of its strategic objectives and would nonetheless be obliged to pay certain costs (primarily due diligence and advisory fees) incurred in connection with the Acquisition. In addition, if the Acquisition does not complete then the Company is contractually obliged to pay to the Sellers a break fee of £0.5 million.

The Rights Issue is not conditional upon Completion of the Acquisition; if the Acquisition does not complete but the Rights Issue does, the proceeds of the Rights Issue will be retained by the Group while management explores alternative uses for the proceeds.

It is possible that the Acquisition could cease to be capable of Completion, in particular, if any of the conditions precedent to Completion are not satisfied in accordance with the Sale and Purchase Agreement. In the event that this occurs following Admission of the Ordinary Shares, nil paid, and the Rights Issue becoming wholly unconditional, the Rights Issue would still be completed and funds would be raised by the Group.

In the unlikely event that the Rights Issue proceeds but the Acquisition does not complete, the Directors' current intention is that the proceeds of the Rights Issue will be invested and/or applied to manage the Company's debt and cash position on a short-term basis while the Directors evaluate other acquisition opportunities and, if no acquisitions can be found on acceptable terms within a suitable timeframe, the Directors will consider how best to return surplus capital to Shareholders. Such a return could carry financial costs for certain Shareholders, will incur costs on the part of the Company and would be subject to applicable securities laws such that any return of capital may be less than the amount subscribed in the Rights Issue.

B. RISKS ASSOCIATED WITH THE ACQUISITION

Acal's ability to effectively and fully realise the benefits of the Acquisition

The Enlarged Group may not realise all the expected operational benefits from the Acquisition or may encounter difficulties in achieving these anticipated benefits or incur unexpected costs.

Acal's plan to cross-sell products from Acal and Noratel to their respective customer networks and the achievement of certain operational efficiencies could take longer and prove more difficult than anticipated. Similarly, certain development and any production process efficiencies between Acal and Noratel may take longer and cost more than expected as a result of differences in organisational structure, IT systems, language, management and local cultures and management and operational issues. This could reduce the potential benefits arising from the Acquisition, or have a negative impact on the business, operating profit or overall financial condition of the Enlarged Group.

Risk that Noratel's results will not match Acal's expectations

If the results and cash flows generated by the Noratel Group are not in line with the Company's expectations, it may materially impact on the financial performance of the Enlarged Group. Such an impact on the financial performance of the Enlarged Group may mean that the Directors' expectation that the Acquisition will be significantly enhancing to underlying earnings will not be achieved. In addition, any goodwill that arises on the Acquisition may be required to be written down, which while having no cash impact, could result in an adverse effect on the Enlarged Group's financial position and performance.

Acal will rely on certain existing key management to manage Noratel's business

The future success of the Enlarged Group will, in part, be dependent upon the successful retention and motivation of key members of Noratel's management and personnel staff.

Acal currently plans to implement a management incentive plan for the key members of Noratel's management based on the incremental performance of Noratel over the three years following Completion.

Dependence on key customers

While no individual customer represents more than 10 per cent. of Noratel's total revenues, Noratel has a number of larger customers that would account for a significant proportion of its business. A failure by the Enlarged Group to meet minimum quality and service obligations agreed with these customers, an insolvency or liquidity event in respect of one of Noratel's key customers, or a decision by one of these customers to direct their business elsewhere, could adversely affect the Enlarged Group's business, financial condition and operating results.

Risk that third parties may terminate or alter existing contracts with the Noratel Group

Certain agreements that the Noratel Group has with its key suppliers, service providers and customers contain ''change of control'' or similar clauses allowing the counterparty to terminate or change the terms of the contract. These change of control provisions may be triggered by the Acquisition. Accordingly there is a risk that the counterparties to those agreements may, following the change of control of Noratel at Completion, exercise any rights that they may have under such agreements to terminate the agreements.

Only limited and capped warranties are provided by the Sellers and certain members of management of Noratel

Limited warranties are provided by the Sellers in the Sale and Purchase Agreement. Herkules, a Norwegian private equity firm that has owned Noratel since 2004, have provided warranties only as to title and capacity. The other Sellers have additionally provided warranties on the Noratel Group, but these are not as extensive as those sometimes given by a corporate vendor and do not cover all potential liabilities associated with the Noratel Group, whether identified or unidentified (although a warranty insurance policy has been put in place which will provide cover up to a maximum amount of NOK250 million, which will cover (i) general warranties for a period of two years; and (ii) warranties relating to title or tax for a period of seven years). The liability of the Sellers is limited in time and amount and one of the Sellers, Herkules Private Equity (GP-I) Limited is due to close on or around 31 December 2014. Accordingly, the Company may not have full recourse against, or otherwise be able to recover in full from, the Sellers in respect of all losses which it may suffer in respect of a breach of warranties or under any specific indemnities. If claims arose but losses could not be recovered, this could adversely affect the Enlarged Group's business, results of operations, financial condition and prospects.

Following completion of the Acquisition, the leverage of the Enlarged Group will increase.

The Acquisition will increase the overall leverage of the Enlarged Group, which will result in increased borrowing costs and more restrictive covenants than the Company has previously operated under which could limit the Enlarged Group's commercial and financial flexibility.

There is a risk that the Group may not, over the longer term, be able to refinance the Facility or obtain additional debt financing on commercially acceptable terms, or at all which would have a material adverse effect on the Group's business, longer-term liquidity, financial condition and/or prospects.

C. RISKS ASSOCIATED WITH THE GROUP AND, FOLLOWING COMPLETION, THE ENLARGED GROUP

Operational risk

The Group faces and, following Completion, the Enlarged Group will face a risk of loss resulting from, among other factors, inadequate or flawed processes or systems, theft, fraud and natural disaster. Operational risk of this kind can occur in many forms including, among others, errors, business interruptions, fluctuations in raw material prices, inappropriate behaviour of, or misconduct by, employees of the Group, and following Completion, the Enlarged Group or those contracted to perform services for the Group, and following Completion, the Enlarged Group, and third parties that do not perform in accordance with their contractual agreements. These events could result in financial losses or other damage to the Group and, following Completion, the Enlarged Group.

The Group's approach and, following Completion, that of the Enlarged Group, to operational risk management is intended to reduce the risk of such loss. To monitor and manage operational risk, the Group maintains and, following Completion, the Enlarged Group will maintain a framework of internal systems and controls designed to provide a sound and well-controlled operational environment. The Group strives to maintain and minimise appropriate levels of operational risk relative to its businesses' strategies, its competitive and regulatory environment, and the markets in which it operates. The Group is indemnified, to the extent to which the Board considers reasonable, under insurance policies and programmes for those operating risks that can be mitigated through the purchase of insurance. Nevertheless, notwithstanding these control measures and this insurance coverage, the Group and, following Completion, the Enlarged Group remains exposed to operational risk that could negatively impact their business and results of operations.

Economic environment risk

The key external risk affecting the Group and, following Completion the Enlarged Group, remains the impact of the continuing challenging macroeconomic and market conditions, especially in Europe. These conditions which are underpinned by slow economic growth and sovereign debt problems could impact the Group in a number of ways. The operations of the Group may be adversely affected by a slowdown in orders due to lower public confidence about future economic conditions, the lack of end user demand or lack of visibility into the foreseeable future, which could ultimately affect the Group's profitability through a reduction of sales. Fundraising conditions may also become more challenging which could impact on the Group's ability to raise funds for value adding acquisitions, which is a core part of the Group's stated strategy. Difficult economic conditions in the markets in which the Group operates and, following Completion, the Enlarged Group will operate may also result in an increase in its debt arrears.

The Group's approach and, following Completion, that of the Enlarged Group, to economic environment risk is intended to reduce and mitigate this risk.

Information Technology systems risk

The Group relies and, following Completion, the Enlarged Group will rely on internal and external information technology systems to manage its operations. These systems are vulnerable to damage or interruption from various factors, including, but not limited to, power loss, telecommunications failures, data corruption, network failure, computer viruses, security breaches, theft, vandalism or other acts.

Furthermore, the Group relies on and, following Completion, the Enlarged Group will rely on internal and external information technology systems to manage its operations and is exposed to risk of loss resulting from breaches in the security, or other failures, of these systems which could have an adverse effect upon the trading performance of the Group and, following Completion, the Enlarged Group.

Although the Board believes it has put in place appropriate internal controls to provide a sound and well-controlled operational environment, it cannot guarantee the efficient and uninterrupted operation of systems used by the Group and, following Completion, the Enlarged Group. A disaster or disruption in the infrastructure that supports the Group's and, following Completion, the Enlarged Group's business could have a material adverse effect on its business, results of operations, financial condition and/or growth prospects.

Foreign currency

Foreign currency risk is the risk that the Group, and following completion, the Enlarged Group will sustain losses through adverse movements in currency exchange rates. The Group's main foreign exchange exposures relate to the translation of results and net assets denominated in overseas currencies (in particular the Euro and, following Completion, NOK) into sterling, and transactions in foreign currencies. It is Group policy to hedge identified significant foreign exchange exposure on its committed operating cash flows through forward contracts and currency borrowings where possible. Whilst this policy has in the past mitigated this risk, there can be no absolute assurance that such hedging arrangements will be effective or that all of the Group's and, following Completion, the Enlarged Group's exposure will be fully hedged. Any significant losses of such hedging positions could have a material adverse effect on the Group's and, following Completion, the Enlarged Group's business, results of operations, financial condition and/or growth prospects.

Interest rates

Interest rate risk is the risk that the Group, and following Completion, the Enlarged Group will sustain losses from adverse movements in interest bearing assets and liabilities. The Group has an exposure to interest rate risk arising principally from changes in Euro, US Dollar, NOK and Pounds Sterling interest rates. The Group does not currently hedge against its interest rate risk, although it will do so as appropriate in the future. Notwithstanding any hedging strategy, movement in interest rates could have a material adverse effect on such exposure which could materially and adversely affect the Group's and, following Completion, the Enlarged Group's business, results of operations, financial condition and/or growth prospects.

Credit

Credit risk exists in relation to customers, banks and insurers. These risks are mitigated by maintaining rigorous credit control procedures across a wide customer base. Credit risk attributable to trade and other receivables is minimised by dealing with recognised creditworthy third parties who have been through a credit verification process. To this end, a significant proportion of Acal's trade debtors, and approximately 65 per cent. of Noratel's global trade receivables, are insured. Additionally, Acal also uses online live credit systems from a third-party provider to monitor customers throughout Europe.

The maximum exposure to credit risk is also limited to the carrying value of trade and other receivables. The Group has historically experienced a low level of bad debts but there is no certainty that the Enlarged Group might not experience greater bad debt levels in the future. As well as credit risk exposures inherent within the Group's outstanding receivables the Group is, and following Completion the Enlarged Group will be, exposed to counterparty credit risk arising from the placing of deposits and entering into financial instrument contracts with banks and financial institutions. The Group manages this credit risk by entering into financial instrument contracts only with highly credit-rated counterparties which are reviewed and approved annually by the Board. Defaults by counterparties could materially and adversely affect the Group's and, following Completion, the Enlarged Group's business, results of operations, financial condition and/or growth prospects.

Competition risk

The Group and, following Completion, the Enlarged Group faces competition from local, national and international rivals, some of which have large capital resources. Competitor activity could lead to an over-supply which could result in loss of business due to weak demand levels, or lead to price and margin pressure, all of which could have an adverse effect on the financial condition or results of operations of the Group and, following Completion, the Enlarged Group.

Risk of loss of key management or personnel

The Group is and, following Completion, the Enlarged Group will continue to be reliant on the continued services of its key personnel, who have skills which are critical to the continued successful operation of the business. Failure to retain such individuals, or to attract and retain strong management and technical staff in the future, could have an adverse effect upon any part of the Group's and, following Completion, the Enlarged Group's business and its results.

The risk of injury or illness to the Group's and, following Completion, the Enlarged Group's employees could lead to the Group and, following Completion, the Enlarged Group failing to achieve its objectives, which could have an adverse effect on the financial condition or results of operations of the Group and, following Completion, the Enlarged Group.

Employment contracts have been entered into and other steps taken to encourage the retention of key personnel, but there can be no assurance that the Group and, following Completion, the Enlarged Group will be able to retain such individuals, or to attract and retain strong management and technical staff in future, and its business, results of operations, financial condition and/or growth prospects could be materially adversely effected if certain key individuals either cease to be employed by, or their services cease to be available to, the Group or, following Completion, the Enlarged Group.

Risk relating to retirements benefits funding

The funding position of the Sedgemoor Group Pension Fund (the ''Fund''), a closed legacy defined benefit fund, may be adversely effected by poor investment performance, changes in interest and inflation rates, improved mortality rates and changes in the regulatory environment. In the short term, the difference between the value of liabilities and assets may vary significantly, potentially resulting in an increased deficit having to be recognised on the Enlarged Group's balance sheet. The Group agrees deficit recovery plans with the corporate trustee of the Fund based on actuarial advice and the results of scheme valuations. Any requirement to contribute additional funds into the Fund to cover any additional deficit, could have a material adverse effect on the Group's and, following Completion, the Enlarged Group's business, results of operations, financial condition and/ or growth prospects. In addition, actions by the UK Pensions Regulator or the trustees of the Fund or any material revisions to the existing pension legislation could result in additional funding obligations, which could have a material adverse effect on the Group's and, following Completion, the Enlarged Group's business, results of operations, financial condition and/or growth prospects.

Risk of loss of key suppliers or customers

The Group relies and, following Completion, the Enlarged Group will continue to rely on independent suppliers for the products which it distributes, some of which may be available from a limited number of suppliers or distributed under agreement with a specific supplier. In addition, the Group and, following Completion, the Enlarged Group, depends almost entirely on third party transportation service providers for the delivery of products to its customers. Any disruption to the supply chain from suppliers or to customers for any reason (such as natural disasters, pandemics, or significant disruptions of services from third party providers) could cause cancellations or delays in a significant number of shipments to customers and, as a result, could have a material adverse effect on the Group's and, following Completion, the Enlarged Group's business, results of operations, financial condition and/or growth prospects. Given the nature of the Enlarged Group's operations, its future performance is reliant on the preservation or enhancement of existing relationships with its key suppliers and key customers. The loss of a major supplier or of a major customer would have a significant detrimental impact upon the performance of the Group and, following Completion, the Enlarged Group.

Risk of major damage to premises

Major damage to the Group's or following Completion, the Enlarged Group's production or warehouse facilities from fire, malicious damage or natural disaster would impact the business for a period until the damage is repaired or alternative facilities have been established. The businesses have developed plans to prevent incidents, and business contingency plans in the event such an incident occurred. Insurance policies are also in place including property, contents and business interruption cover which would mitigate the financial impact. However, the disruption caused by such an event could cause cancellations or delays in a significant number of shipments to customers and, as a result, could have a material adverse effect on the Group's and, following Completion, the Enlarged Group's business, results of operations, financial condition and/or growth prospects.

International trade risk

The Group derives and, following Completion, the Enlarged Group will continue to derive the majority of its revenue from customers outside the UK. Acal expects that its sales will continue to be made across a number of territories and as a result, in common with other multi-national organisations, the occurrence of any negative economic, political or geographical events in these locations could have a material impact on revenues. This in turn could cause the Enlarged Group's business to be harmed. These international trade risks include:

• * unexpected changes in regulatory environments;
• * imposition of tariffs and other barriers and restrictions;
• * changes in foreign company law; and
• * civil unrest, war, and/or terrorism.

Risk of declines in product demand

During an industry or general economic downturn, it is possible that demand for the Group's, or following Completion, the Enlarged Group's products may decline. The Group and, following Completion, the Enlarged Group, cannot be assured that such declines will not have a material adverse effect on its business, results of operations, financial condition and/or growth prospects.

Technological change risk

The markets in which the Group operates and, which following Completion, the Enlarged Group shall operate are subject to both rapid rates of technological development and changes in customer requirements. The Enlarged Group intends to monitor on a regular basis both technological changes and changes in market preferences and tastes, in order to facilitate early identification and development of market-leading products and services. Nevertheless, the Enlarged Group may not be able to maintain the competitive advantage of its products or develop and deliver improved technological capability in its products, which could have an adverse effect on the Enlarged Group's business, financial position and operating results.

Regulatory risk

In each of the jurisdictions in which the Group operates and in which the Enlarged Group will operate, it has to comply with laws, regulations and administrative policies which relate to, among other matters, consumer protection, provision of credit, import and export, competition, employment (including pensions), the environment, health and safety, pensions, anti-corruption, banking and tax. Each aspect of the regulatory environment in which the Group operates and in which the Enlarged Group will operate is subject to change, which may be retrospective. Complying, or failing to comply, with existing or new regulations in areas such as competition, employment, environmental and health and safety, pensions and banking could result in additional costs for, or financing or sales restrictions on, the Group and, following Completion, the Enlarged Group which could have an adverse effect on the financial condition or results of operations of the Group and, following Completion, the Enlarged Group. In addition, certain of the industries the Enlarged Group supplies will be influenced by changing regulation including, in the renewables sector, governmental subsidies, which may impact the demand for its products.

Intellectual property risk

The Group's, and following Completion, the Enlarged Group's success depends in part on its ability to protect its rights in intellectual property. The Group's, and following Completion, the Enlarged Group relies upon various intellectual property protections, including copyright, trademarks, trade secrets and contractual provisions, to preserve its intellectual property rights. Despite these precautions it may be possible for third parties to obtain and use the Group's, and following Completion the Enlarged Group's intellectual property without its authorisation.

Enforcing intellectual property rights can be difficult and expensive. To protect the Group's, and following Completion the Enlarged Group's intellectual property, the Group's, and following Completion the Enlarged Group may become involved in litigation which, even if successful, could result in substantial expense, divert the attention of its management, cause significant delays, materially disrupt the conduct of the Group's, and following Completion the Enlarged Group's business or adversely affects its revenue, financial condition and result of operations.

Tax risk

Any changes to current UK and international taxation legislation (including corporate, personal, capital and indirect taxation), the interpretation of such legislation by tax authorities as well as changes to accounting standards, may impact on the Company's and consequently the Group's and, following Completion, the Enlarged Group's projected activities, financial situation and results. There is also a risk of unexpected tax costs through the failure of tax planning or challenge by tax authorities of the bases of transfer pricing. These matters could have a material adverse effect on the Group's and, following Completion, the Enlarged Group's business, results of operations, financial condition and/or growth prospects.

Fraud or misconduct by an employee of the Group or, following Completion, the Enlarged Group or third party service providers could result in losses or reputational damage

The Group is, and the Enlarged Group will continue to be, at risk that employee fraud or other misconduct could occur and the precautions that the Group or the Enlarged Group takes to prevent this may not be effective in all cases. Employee misconduct could cause significant financial harm or reputational damage to the Group or the Enlarged Group and any liability or loss may not be fully covered by insurance. Similar issues may arise in relation to misconduct by the employees of third parties when the Group or the Enlarged Group engages third parties to provide services for customers. Such fraud or misconduct may have a material adverse effect on the Group's and, following Completion, the Enlarged Group's business, results of operations, financial condition and/ or growth prospects.

Litigation Risk

The Group, and following Completion, the Enlarged Group may be party to litigation in the course of its business. Any litigation, by the Enlarged Group or against it, may be costly and lengthy and there can be no assurance that the Enlarged Group would prevail. Litigation could also involve a significant diversion of resources and management attention and be disruptive to normal business operations and the Enlarged Group's insurance policies may not necessarily cover claims against it or may not be adequate to protect it against all liability that may be imposed. An unfavourable resolution of a particular lawsuit or the costs associated with substantial litigation could have a material adverse effect on the Enlarged Group's reputation, corporate and brand image, business, operating results and financial condition.

D. RISKS RELATING TO INVESTMENT IN ORDINARY SHARES

The market price of Ordinary Shares could be volatile and subject to significant fluctuations due to a variety of factors

The Ordinary Shares may not be a suitable investment for all the recipients of this document. Before making a final decision, investors are advised to consult an appropriate independent investment adviser authorised under the Financial Services and Markets Act 2000 (or another appropriately authorised financial adviser) who specialises in advising on the acquisition of shares and other securities.

Prospective investors should be aware that the value of an investment in Acal may go down as well as up. The market price of Ordinary Shares could be volatile and subject to significant fluctuations due to a variety of factors including changes in sentiment in the market regarding the Ordinary Shares (or securities similar to them), any regulatory changes affecting the Group's or, following Completion, the Enlarged Group's operations, variations in its operating results, business developments or its competitors, the operating and share price performance of other companies in the industries and markets in which it operates, or speculation about the Group's or, following Completion, the Enlarged Group's business in the press, media or investment community. Stock markets may experience significant price and volume fluctuations which affect the market prices for securities, including the Ordinary Shares, and which may be unrelated to the Group's and, following Completion, the Enlarged Group's operating performance or prospects. Furthermore, the Group's and, following Completion, the Enlarged Group's operating results and prospects from time to time may be below the expectations of market analysts and investors.

The market value of the Ordinary Shares may fluctuate and may not reflect the underlying asset value of the Group

There is no assurance that the public trading market price of the Ordinary Shares will not decline below the Rights Issue Price. Should that occur, relevant Shareholders will suffer an immediate loss as a result. Moreover, there can be no assurance that, following the exercise of rights, Shareholders will be able to sell their Rights Issue Shares at a price equal to or greater than the acquisition price for those shares.

Shareholders who decide not to exercise their Nil Paid Rights may also sell or transfer them. If the public trading market price of the Ordinary Shares declines below the Rights Issue Price, investors who have acquired any such Nil Paid Rights in the secondary market will suffer a loss as a result.

Shareholders who do not (or who are not permitted to) acquire Rights Issue Shares in the Rights Issue will experience dilution in their ownership of Acal

If Shareholders, including Shareholders in the United States and other jurisdictions where their participation in the Rights Issue is restricted for legal, regulatory and other reasons, do not take up the offer of Rights Issue Shares under the Rights Issue in full, their proportionate ownership and voting interests and the percentage their Ordinary Shares will represent of the total issued share capital of Acal will be reduced. Shareholders will also experience dilution as a result of the issue of the Consideration Shares. Even if any such Shareholder elects to sell his unexercised Nil Paid Rights or such Nil Paid Rights are sold on his behalf, he may not receive any consideration and any consideration he does receive may not be sufficient to compensate him fully for the dilution of his percentage ownership of Acal's share capital that may be caused as a result of the Rights Issue.

Shareholders outside the United Kingdom may not be able to take up the Rights Issue Shares in the Rights Issue or future issues of Ordinary Shares

Securities laws of certain jurisdictions may restrict the Company's ability to allow participation by shareholders in the Rights Issue. In particular, holdings of existing Ordinary Shares who are located in the United States may not be able to accept the Rights Issue unless a registration statement under the US Securities Act is effective with respect to the Rights Issue Shares or an exemption from the registration requirements is available thereunder. The Rights Issue will not be registered under the US Securities Act. Securities laws in certain other jurisdictions may restrict Acal's ability to allow participation by shareholders in such jurisdictions in the Rights Issue or any future issued of shares carried out by Acal. Qualifying Shareholders who have a registered address in or who are resident in, or who are citizens of, countries other than the UK, should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to receive Rights Issue Shares or to take up their Rights Issue Entitlements.

The share price of Acal may be negatively affected if Shareholders do not take up their Rights Issue Entitlements in full

If Shareholders do not apply for a material amount of their Rights Issue Entitlements, the share price of Acal might be affected negatively.

An active trading market in the Nil Paid Rights may not develop

An active trading market on the London Stock Exchange in the Nil Paid Rights may not develop during the trading period. In addition, because the trading price of the Nil Paid Rights depends on the trading price of the Ordinary Shares, the Nil Paid Rights price may be volatile and subject to the same risks as noted above for the Ordinary Shares. The volatility of the price of Ordinary Shares may also magnify the price volatility of the Nil Paid Rights.

The Company's ability to pay dividends will depend on the level of profits and cash flows generated by the Group and, following Completion, the Enlarged Group

Under UK company law, a company can only pay cash dividends to the extent that it has distributable reserves and cash available for this purpose. The Company's ability to pay cash dividends in the future is affected by a number of factors, including its ability to receive sufficient dividends from subsidiaries. The payment of dividends to the Company by its subsidiaries is, in turn, subject to restrictions, including certain regulatory requirements and the need for sufficient distributable reserves and cash in the Company's subsidiaries.

The ability of these subsidiaries, including the Noratel Group, to pay dividends and the Company's ability to receive distributions from its investments in other entities are subject to applicable local laws and regulatory requirements and other restrictions, including, but not limited to, applicable tax laws and covenants in some of the Company's credit facilities. These laws and restrictions could limit the payment of dividends and distributions to the Company by its subsidiaries, which could in future restrict the Company's ability to fund other operations or to pay a dividend to holders of the Ordinary Shares.

Further share issues could have an adverse effect on the market price of Ordinary Shares as a whole

Save for the proposed Rights Issue and the issue of the Consideration Shares, Acal has no current plans for an offering of Ordinary Shares. However, it is possible that Acal may decide to offer additional Ordinary Shares in the future. Any additional offering by Acal, or significant sales of Ordinary Shares by major Shareholders, could have an adverse effect on the market price of Ordinary Shares as a whole.

PART III

Important Information

1. General

The Company accepts responsibility for the completeness and accuracy of the information contained in this document. To the best knowledge of the members of the Board, who have taken all reasonable care to ensure that such is the case, the information contained in this document is in accordance with the facts and contains no omission likely to affect its import.

Any reproduction, retransmission or other redistribution of this document, in whole or in part, under any circumstances and any disclosure of its contents or use of any information in this document for any purpose other than considering an investment in the Rights Issue Shares or the Consideration Shares is prohibited. By accepting delivery of this document, you agree with the foregoing. This agreement will be relied upon by the Company, Oriel Securities and their respective affiliates and agents, as well as persons acting on their behalf.

The distribution of this document and/or the Provisional Allotment Letters into jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession these documents come should inform themselves about and observe any such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws or regulations of any such jurisdictions. In particular, such documents and any other offering or publicity material should not be distributed, forwarded or transmitted in, into or within the United States or any other Excluded Territory.

Prospective investors must not treat the contents of this document as advice relating to any legal, financial, business, taxation, investment or other matter. Prospective investors must inform themselves as to: (i) the legal requirements within their own jurisdiction for the subscription for, purchase, holding, transfer, redemption or other disposal of Shares; (ii) any foreign exchange restrictions applicable to the subscription for, purchase, holding, transfer, redemption or other disposal of Shares which they may encounter; and (iii) the income and other tax consequences which may apply in their own jurisdictions as a result of the purchase, holding, transfer, redemption or other disposal of Shares. Prospective investors must rely on their own representatives, including their own legal advisers and accountants, as to the legal, taxation, investment or other related matters concerning the Company and an investment therein. This document is for your information only and nothing in this document is intended to endorse or recommend a particular course of action. You should consult with an appropriate professional for specific advice rendered on the basis of your situation.

Prospective investors should only rely on the information contained in this document. No person has been authorised to give any information or make any representations other than those contained in this document and, if given or made, such information or representations must not be relied upon as having been authorised by Acal, the Directors or Oriel Securities. Neither the contents of the Company's or any other member of the Group's, nor the contents of Noratel or any member of the Noratel Group's, websites form part of this document. Without prejudice to any legal or regulatory obligations on the Company to publish a supplementary prospectus pursuant to section 87G of FSMA and Prospectus Rule 3.4.1, neither the delivery of this document nor any sale made pursuant to it will, under any circumstances, create any implication that there has been no change in the affairs of the Company or the Group taken as a whole, or Noratel or the Noratel Group taken as a whole, since the date of this document or that the information in this document is correct as at any time after the date of this document.

In making an investment decision each investor must rely on their own examination, analysis and enquiry of the Company and the terms of the Rights Issue, including the merits and risks involved.

NEITHER THE US SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE RIGHTS ISSUE OR HAS DETERMINED IF THIS DOCUMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.

Recipients of this document acknowledge that: (i) they have not relied on Oriel Securities or any person affiliated with Oriel Securities in connection with any investigation of the accuracy of any information contained in this document, or their investment decision; and (ii) they have only relied on the information contained in this document, and that no person has been authorised to give any information or to make any representation concerning the Company or its subsidiaries or the Ordinary Shares (other than as contained in this document) and, if given or made, any such other information or representation should not be relied upon as having been authorised by Acal or Oriel Securities.

In connection with the Rights Issue, Oriel Securities and any of its respective affiliates, acting as investors for their own accounts, may acquire Ordinary Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Ordinary Shares and other securities of the Company or other related investments in connection with the Rights Issue or otherwise. Accordingly, references in this document to the Ordinary Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, dealing or placing by, Oriel Securities and any of its affiliates acting as investors for their own accounts. Oriel Securities does not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

All Overseas Shareholders and any person (including, without limitation, a nominee or trustee) who has a contractual or legal obligation to forward this document or any Provisional Allotment Letter, if and when received, or other document to a jurisdiction outside the United Kingdom should read paragraph 7 of Part XV (''Terms and Conditions of the Rights Issue'') of this document.

The Rights Issue Shares and the Consideration Shares are transferable, except in accordance with, and subject to the restrictions relating to Overseas Shareholders set out in paragraph 7 of Part XV (''Terms and Conditions of the Rights Issue'') of this document. No action has been taken by Acal that would permit an offer of the Rights Issue Shares or the Consideration Shares or possession or distribution of this document or any other offering or publicity material in any jurisdiction where action for that purpose is required, other than in the UK. Investors should be aware that they may be required to bear the financial risks of this investment for an indefinite period of time.

The Rights Issue Shares and the Consideration Shares have not been and will not be registered under the relevant laws of any Excluded Territory and may not be offered, sold, taken up, exercised, resold, transferred or delivered, directly or indirectly, within the Excluded Territories, except pursuant to an applicable exemption from registration, and in compliance with, any applicable securities laws.

2. Presentation of financial information

The audited consolidated financial statements of the Group for the three years ended 31 March 2014 are incorporated into this document by reference as set out in Part X (''Operating and Financial Review of Acal'') of this document. Historical financial information relating to the Noratel Group for the three years ended 31 December 2013 are set out in section B of Part XIII (''Historical Financial Information'') of this document.

The Group and the Noratel Group publish their financial statements in pounds sterling and Norwegian Krone respectively. The abbreviation ''£m'' represents millions of pounds sterling. The abbreviation ''NOKm'' represents millions of Norwegian Krone. The Historical Financial Information relating to Acal and the Historical Financial Information relating to Noratel contained within this document were both prepared in accordance with IFRS.

All references to 'pounds', 'pounds sterling', 'sterling', '£', 'GBP', 'pence', 'penny' and 'p' are to the lawful currency of the United Kingdom. All references to 'Norwegian Krone' and 'NOK' are to the lawful currency of Norway. All references to 'US dollars', 'USD' and 'US\$' are to the lawful currency of the United States.

The average NOK:GBP exchange rate for the year ended 31 December 2013 was NOK9.1931: £1.00 and the exchange rate as at 31 December 2013 was NOK10.088:£1.00.

3. International Financial Reporting Standards

As required by the Companies Act 2006 and Article 4 of the European Union IAS Regulation, the consolidated financial statements of the Group are prepared in accordance with IFRS issued by the IASB and interpretations issued by the International Financial Reporting Interpretations Committee of the IASB as adopted by the European Union.

4. Non-IFRS measures

The Board assesses the financial performance of the Group's business using a variety of key financial measures of the Group's performance. Some of these measures are termed ''non-IFRS measures'' because they exclude amounts that are included in, or include amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with IFRS, or are calculated using financial measures that are not calculated in accordance with IFRS. A summary of the key performance measures discussed in this document, and of how such measures are used by the Board, is presented in Part X (''Operating and Financial Review of Acal''), including cross-references to the sections of this document in which these non-IFRS measures are reconciled to the most directly comparable measure calculated in accordance with IFRS. The Board does not regard these non-IFRS measures as a substitute for the equivalent measures calculated and presented in accordance with IFRS or those calculated using financial measures that are calculated in accordance with IFRS. The non-IFRS measures used may not be directly comparable to similarly-titled measures used by other companies, including competitors of the Company.

5. Rounding

Certain figures contained in this document, including financial information, have been subject to rounding adjustments with figures rounded to the nearest whole number or nearest decimal point. Accordingly, in certain instances, the sum of the numbers in a column or row in tables contained in this document may not conform exactly to the total figure given for that column or row. In addition, certain percentages presented in the tables in this document reflect calculations based upon the underlying information prior to rounding, and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers.

6. Sourcing of information

Certain information in this document has been sourced from third parties. Where information in this document has been sourced from third parties, the source of such information has been clearly stated adjacent to the reproduced information.

All information contained in this document which has been sourced from third parties has been accurately reproduced and, as far as the Company is aware and is able to ascertain from information published by the relevant third party, no facts have been omitted which would render the reproduced information inaccurate or misleading.

Unless otherwise indicated, all sources for industry data and statistics are estimates or forecasts contained in or derived from internal or industry sources that the Company believes to be reliable. Market data used throughout this document was obtained from independent experts, independent industry publications and other publicly available information. Although the Company believes that these sources are reliable, it has not independently verified and does not guarantee the accuracy and completeness of this information.

Market data and statistics are inherently predictive and speculative and are not necessarily reflective of actual market conditions. Such statistics are based on market research, which itself is based on sampling and subjective judgments by both the researchers and the respondents, including judgments about what types of products and transactions should be included in the relevant market. In addition, the value of comparisons of statistics for different markets is limited by many factors, including that (i) the markets are defined differently, (ii) the underlying information was gathered by different methods and (iii) different assumptions were applied in compiling the data. Accordingly, the market statistics included in this document should be viewed with caution and no representation or warranty is given by any person as to their accuracy.

7. References to time

Unless otherwise stated, all references to time in this document are to the time in London, United Kingdom.

8. No incorporation of website information

The contents of the Company's website, any website mentioned in this document or any website directly or indirectly linked to the Company's website have not been verified and do not form part of this document and investors should not rely on it, except where expressly incorporated by reference within the section 20 of Part XVII (''Additional Information'') section of this document.

9. References to defined terms

Certain terms used in this document, including certain capitalised terms and certain technical and other terms, are defined in Part XVIII (''Definitions and Interpretation'') of this document.

10. Forward-looking statements

Certain statements contained in this document, as well as in written and oral statements that the Company, its management and/or its directors may make from time to time in reports, filings, news releases, conferences, teleconferences, postings or otherwise are or may constitute ''forwardlooking statements''. Such forward looking statements include, without limitation, statements in relation to the Group's and/or the Noratel Group's financial condition, results of operations, cash flows, dividends, financing plans, business strategies, operating efficiencies, budgets, capital and other expenditures, competitive positions, growth opportunities for existing products, plans and objectives of management and other matters and other statements containing the words ''believe'', ''anticipated'', ''expected'' and similar expressions. Such forward-looking statements involve unknown risks, uncertainties and other factors which may cause the actual results, achievements or performance of the Group or the Noratel Group, in the industries in which they operate, to be materially different from any future results, achievements or performance expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors include, but are not limited to, general economic and business conditions, changes in government relations or policy, competition and the other risks described in this document. Given these uncertainties, prospective investors and Shareholders are cautioned not to place any undue reliance on such forward-looking statements. These forward-looking statements are stated as at the date of this document. Except as required by the Listing Rules, the Disclosure and Transparency Rules, the Prospectus Rules, the London Stock Exchange, the FSMA or applicable law, the Company does not have any obligation to update or publicly revise any forward-looking statement, whether as a result of new information, further events or otherwise. Except as required by the rules of the FCA, the Listing Rules, the Disclosure and Transparency Rules, the Prospectus Rules, the London Stock Exchange or by law or regulation, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this document to reflect any change in Acal's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Any forward-looking statement contained in this document based on past or current trends and/or activities of the Group or the Noratel Group should not be taken as a representation that such trends or activities will continue in the future. No statement in this document is intended to be a profit forecast or to imply that the earnings of the Group or the Noratel Group for the current year or future years will necessarily match or exceed the historical or published earnings of the Group or the Noratel Group. These forward-looking statements are further qualified by the risk factors described in Part II (''Risk Factors'') of this document. Investors should note that the contents of these paragraphs relating to forward looking statements are not intended to qualify the statement made as to sufficiency of working capital in paragraph 17 of Part XVII (''Additional Information'') of this document.

11. Enforcement of civil liabilities

The ability of an Overseas Shareholder to bring an action against Acal may be limited under law. Acal is a public limited company incorporated in England. The rights of holders of Ordinary Shares are governed by English law and by the Articles of Association. These rights differ from the rights of shareholders in typical US corporations and some other non-UK corporations.

An Overseas Shareholder may not be able to enforce a judgment against some or all of the Directors and executive officers. All of the Directors and executive officers are residents of the UK. Consequently, it may not be possible for an Overseas Shareholder to effect service of process upon the Directors and executive officers within the Overseas Shareholder's country of residence or to enforce against the Directors and executive officers judgments of courts of the Overseas Shareholder's country of residence based on civil liabilities under that country's securities laws. There can be no assurance that an Overseas Shareholder will be able to enforce any judgments in civil and commercial matters or any judgments under the securities laws of countries other than the UK against the Directors or executive officers who are residents of the UK or countries other than those in which judgment is made. In addition, English or other courts may not impose civil liability on the Directors or executive officers in any original action based solely on the foreign securities laws brought against Acal or the Directors in a court of competent jurisdiction in England or other countries.

12. Where to find help

If you have questions, please call the Shareholder Helpline on 0871 384 2869 (from within the UK) or on +44 121 415 0828 (if calling from outside the UK). Calls to the 0871 384 2869 number are charged at 8 pence per minute (excluding VAT) plus network extras. Lines are open from 8.30 a.m. to 5.30 p.m. (London time) Monday to Friday (except UK public holidays). Calls to the Shareholder Helpline from outside the UK will be charged at the applicable international rate. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. Please note that the Shareholder Helpline operators cannot provide advice on the merits of the Acquisition or Rights Issue or nor give financial, tax, investment or legal advice.

PART IV

Rights Issue Statistics

Ordinary Shares in issue as at 4 June 2014 (the last practicable date prior to publication of this document)	31,332,127 Ordinary Shares
Basis of Rights Issue	One Rights Share for every One Existing Ordinary Share
Number of Rights Issue Shares to be provisionally allotted1 pursuant to the Rights Issue	31,332,127
Rights Issue Price	176 pence
Total number of Rights Issue Shares to be issued1	31,332,127
Estimated gross proceeds of the Rights Issue1	£55.1 million
Estimated net proceeds receivable by the Company, after deduction of commissions, fees and expenses in respect of the Rights Issue and Acquisition1	£52.5 million
Rights Issue Shares as a percentage of the Company's enlarged issued share capital immediately after the Rights Issue1	50%
Ordinary Shares in issue immediately after the Rights Issue1	62,664,254 Ordinary Shares
Maximum number of Consideration Shares to be issued	500,000 Ordinary Shares
Ordinary Shares in issue immediately after Completion3	63,164,254 Ordinary Shares

Notes:

^1. As at the Latest Practicable Date an additional 1,207,462 Ordinary Shares would be required to be issued to satisfy all outstanding options and awards under the Acal Share Plans. The calculations assume no Ordinary Shares are issued as a result of the exercise of any options and awards under the Acal Share Plans between the Latest Practicable Date and the Record Date. If all such options and awards and subscription rights were to be exercised between the Latest Practicable Date and the Record Date, an additional 1,207,462 Rights Issue Shares would be issued resulting in additional proceeds of approximately £2.1 million.

^2. In order for the number of issued shares admitted to the Official List to match the Company's actual number of issued Ordinary Shares of 31,332,127, application is also being made for 290,873 Ordinary Shares to be so admitted.

^3. The number of Consideration Shares will be determined using the average mid-market closing price for the three trading days prior to Completion subject to a maximum of 500,000 Ordinary Shares. In the event that the maximum number of Consideration Shares are issued, the Ordinary Share capital of the Company immediately following Completion is expected to be £3,158,212.7 divided among 63,164,254 Ordinary Shares.

PART V

Expected Timetable of Principal Events

Each of the times and dates below is subject to change(1). References to time and day are to time in London, United Kingdom, unless otherwise stated.

Announcement of the Acquisition and Rights Issue	5 June 2014
Dispatch of this document	on or around 5 June 2014
Latest time and date for receipt of Forms of Proxy and receipt of electronic proxy appointments by Shareholders for the General Meeting	11.00 a.m. on 19 June 2014
Record date for entitlement under the Rights Issue for Qualifying Shareholders	5 p.m. on 19 June 2014
General Meeting	11.00 a.m. on 23 June 2014
Announcement of the results of the General Meeting	23 June 2014
Provisional Allotment Letters dispatched (to Qualifying Non-CREST Shareholders only)	23 June 2014
Admission to trading and commencement of dealings in the Rights Issue Shares, nil paid, on the London Stock Exchange	8.00 a.m. on 24 June 2014
Ex-entitlement date for the Rights Issue	8.00 a.m. on 24 June 2014
Nil Paid Rights credited to stock accounts in CREST (Qualifying CREST Shareholders only)	as soon as practicable after 8.00 a.m. on 24 June 2014
Nil Paid Rights and Fully Paid Rights enabled in CREST	as soon as practicable after 8.00 a.m. on 24 June 2014
Recommended latest time and date for requesting withdrawal of Nil Paid Rights and Fully Paid Rights from CREST (i.e., if your Nil Paid Rights and Fully Paid Rights are in CREST and you wish to convert them to certificated form)	4.30 p.m. on 2 July 2014
Latest time and date for depositing Provisional Allotment Letters, nil or fully paid, into CREST or for dematerialising Nil Paid Rights or Fully Paid Rights into a CREST stock account (i.e. if your Nil Paid Rights or Fully Paid Rights are represented by a Provisional Allotment Letter and you wish to convert them to uncertificated form)	3.00 p.m. on 3 July 2014
Latest time and date for splitting Provisional Allotment Letters, nil or fully paid	3.00 p.m. on 4 July 2014
Latest time and date for acceptance, payment in full and registration of renounced Provisional Allotment Letters	11.00 a.m. on 8 July 2014
Announcement of the result of the Rights Issue	by 7.00 a.m. on 9 July 2014
Dealings in Rights Issue Shares, fully paid, commence on the London Stock Exchange	8.00 a.m. on 9 July 2014
Rights Issue Shares credited to CREST stock accounts (uncertificated holders only)	as soon as possible after 8.00 am on 9 July 2014
Admission of the Consideration Shares	on or around 16 July 2014
Completion of the Acquisition	on or around 16 July 2014
Expected date of dispatch of definitive share certificates for Rights Issue Shares to be held in certificated form	17 July 2014

⁽¹⁾ The times and dates set out in the expected timetable of principal events above and mentioned throughout this document may be adjusted by the Company with the agreement of Oriel Securities in which event details of the new times and dates will be notified to the UKLA, the London Stock Exchange and, where appropriate, Qualifying Shareholders.

PART VI

Directors, Company Secretary, Registered Office and Advisers

Directors

Name Position Richard James Moon Non-Executive Chairman Nicholas John Jefferies Group Chief Executive Simon Mark Gibbins Group Finance Director Richard John Brooman Non-Executive Director Henrietta Elizabeth Marsh Non-Executive Director

Graham John Williams Senior Non-Executive Director

Company Secretary

Gary Shillinglaw FCIS

Registered Office

2 Chancellor Court, Occam Road, Surrey Research Park, Guildford, Surrey GU2 7AH

Website

www.acalplc.co.uk

Advisers and others

Financial adviser, bookrunner, underwriter and sponsor

Oriel Securities Limited 150 Cheapside London EC2V 6ET

Legal adviser to Acal in connection with the Rights Issue (as to English law)

Hogan Lovells International LLP Atlantic House Holborn Viaduct London EC1A 2FG

Legal adviser to the financial adviser, bookrunner, sponsor and underwriter (as to English law)

Travers Smith LLP

10 Snow Hill London EC1A 2AL

Auditors to Acal

Ernst & Young LLP

1 More London Place London SE1 2AF (A member firm of the Institute of Chartered Accountants of England and Wales)

Reporting Accountants to Acal

KPMG LLP Arlington Business Park Theale Reading RG7 4SD

Registrar and Receiving Agent

Equiniti Limited Aspect House Spencer Road Lancing West Sussex BN99 6DA

PART VII

Letter from the Chairman of Acal

Acal plc

(Incorporated and registered in England & Wales with registered number 2008246)

Directors

Richard Moon (Non-Executive Chairman) Nicholas Jefferies (Group Chief Executive) Simon Gibbins (Group Finance Director) Graham Williams (Senior Non-Executive Director) Richard Brooman (Non-Executive Director) Henrietta Marsh (Non-Executive Director)

Registered office 2 Chancellor Court Occam Road Surrey Research Park Guildford Surrey GU2 7AH

5 June 2014

Dear Shareholder,

Proposed acquisition of Noratel, 1 for 1 Rights Issue to raise £55.1 million and Notice of General Meeting

1. Introduction

On 5 June 2014, Acal announced that it had entered into a conditional agreement to acquire Noratel, based on an enterprise value of NOK735 million (£73.5 million) on a debt free basis. The principal terms of the Acquisition are described in more detail in paragraph 6 of this letter and Part VIII (''Summary of the Principal Terms of the Acquisition'') of this document.

The Acquisition, because of its size in relation to the Company, is a Class 1 transaction for Acal under the Listing Rules and is therefore conditional, inter alia, upon the approval of Shareholders of all of the Resolutions. A General Meeting is to be held at 2 Chancellor Court, Occam Road, Surrey Research Park, Guildford GU2 7AH at 11 a.m. on 23 June 2014 for the purpose of seeking such approval and a notice convening the General Meeting, at which the Resolutions will be proposed, is set out at the end of this document.

The Company proposes to use the net proceeds of the Rights Issue as well as funds to be drawn down from the Facility to fund the Acquisition and to refinance all of the Noratel Group's existing facilities. Any remaining net proceeds will be used for working capital purposes and for any future acquisitions which meet the Company's strict criteria. Further details on the Facility are contained in Part XVII (''Additional Information'') of this document.

The purpose of this document is to provide Shareholders with details of the Acquisition and the Rights Issue, to convene the General Meeting, to explain why the Board considers it to be in the best interests of Acal and its Shareholders as a whole to make the Acquisition and to recommend that Shareholders vote in favour of the Resolutions.

2. Background to and reasons for the Acquisition

Over the last five years, as a result of a change of Group strategy in February 2009, Acal has successfully transitioned into a leading European supplier of specialist electronics to the industrial market place with services spanning distribution, design and manufacture. This has been achieved through both a change in the focus of the underlying business towards more highly differentiated products as well as through acquisitions of complementary specialist businesses, including Acal's successful acquisition of the Myrra Group in April 2013.

The Group has performed well over these last five years, with the last three of these years being against a challenging market backdrop. The Group has seen an increase in its market share and operating margins over this period, with a strong focus on control of operating costs and cash generation. While markets remain challenging, the Company has been encouraged by the pick-up in orders for the year ended 31 March 2014, with electronic orders 21 per cent. higher CER than in the previous financial year. Excluding acquisitions, like for like orders were 4 per cent. higher than in the previous financial year. In addition, Global and Eurozone purchasing managers index (''PMI'') data has seen an improving trend since July 2012, with the Markit Eurozone Manufacturing PMI for May 2014 at 52.2 and the JP Morgan Global Manufacturing PMI for May 2014 at 52.2 (where any reading over 50 is indicative of growth). This is a significant improvement from the low point in July 2012 of 44.0 (Eurozone PMI) and August 2012 of 48.6 (Global PMI).

The proposed acquisition of Noratel is a further step in the Group's stated growth strategy, being highly complementary to the Group's existing electromagnetic business. The Board believes that the Acquisition will bring a number of benefits to Acal, including:

• * further strengthening of Acal's specialist electronics business as:
• Noratel's customised electromagnetics offering to a high quality industrial customer base is highly complementary with both Myrra (design and manufacture) and Acal BFi (specialist distribution); and
• Noratel brings a broad based, long term customer base;
• * enhancing custom design and production capabilities, noting in particular that:
• a high proportion (approximately 70 per cent.) of Noratel's products are customised or modified; and
• Noratel provides additional design and manufacturing capabilities with production facilities in Asia, Europe and the US;
• * further developing the Group's geographic profile by:
• expanding sales into northern and western Europe and Asia;
• enlarging the Group's presence in Asia and the Nordic region, a core Electronics market within Europe; and
• providing an initial footprint into the US market;
• * potential operational benefits including:
• opportunities for purchasing and development efficiencies between Acal and Noratel; and
• cross selling of products across customer and geographical segments; and
• * Enhancing financial performance:
• the acquisition of a high margin business (12.6 per cent. underlying EBITDA margin in the year ending 31 December 2013) with a track record of growth; and
• it is expected to be immediately significantly enhancing to underlying earnings per share (after taking into account the issue of Rights Issue Shares and Consideration Shares but excluding any costs and benefits of the potential operational efficiencies.)(1)

Note (1): This statement does not constitute a profit forecast.

3. Information on the Acal Group

3.1 The Acal Group

Acal is a specialist electronics group supplying niche electronics to industrial manufacturers and the healthcare sector. The Group operates a number of high quality businesses, which supply and create individual product solutions to meet specific customer needs. Acal is well positioned with an infrastructure to deliver a complementary range of specialist products and bespoke solutions across Europe as well as in Asia and Africa. The Group's businesses comprise Acal BFi, Hectronic, MTC, Myrra, RSG, Stortech and Vertec of which Acal BFi is the largest. Approximately 70 per cent. of the Group's revenues are generated from major economies in Europe.

Acal has completed seven acquisitions in the last five years, more than trebling its specialist electronics revenues. These acquisitions have expanded both its design and manufacturing capabilities as well as its specialist distribution offering. These acquisitions have delivered a combined pre-tax return on investment of 24 per cent. (after including the costs of the integration) during the year ended 31 March 2014. This combined with the development of the organic performance and the disposal of the Supply Chain Division, has led to an increase in underlying operating profits and underlying operating margin in this period from an underlying operating loss of £0.7 million (-0.4 per cent. margin) to an underlying operating profit of £7.1 million (3.4 per cent. margin) on a continuing basis.

Acal's strategy is to further enhance its leading position through organic growth and by acquiring complementary businesses which together create the opportunity for enhanced growth and/or the realisation of operational efficiencies.

On 2 June 2014 Shareholders voted to approve the disposal of the Enterprise Business to a company in which the management team of that business is participating. The disposal represented the remaining business contained within its Supply Chain Division and reflects Acal's continued strategy of building a specialist electronics supplier to the industrial and medical sectors. The disposal completes the Company's program of non-core business disposals, following the disposal of its UK Parts Business and the European Parts Business in 2013.

In its 2014 Financial Results, Acal reported underlying profit before taxation of £6.3 million for the year ended 31 March 2014 on revenues of £211.6 million. As at 31 March 2014, Acal had net assets of £48.5 million. As at the close of business on 4 June 2014, Acal had a market capitalisation of £108 million and a share price of £3.45.

4. Information on Noratel

4.1 Business overview

Noratel is a global designer and manufacturer of electromagnetic products, specifically of low, medium and high power transformers and chokes. Noratel has a broad customer base in Europe, Asia and increasingly in North America, and has become a preferred supplier to leading international OEMs in various markets. It has a well-establised position supplying the industrial, renewable energy, medical and oil and gas sectors.

With almost sixty years of experience in designing and manufacturing transformers, Noratel is an international group of 16 companies operating in 12 countries, with more than 2,300 employees of which approximately 75 per cent. are located at the production facilities in Asia.

The senior management team of the Noratel Group is led by Asle Tandberg who became CEO of the Noratel Group in 1999. Asle Tandberg joined the Noratel Group in 1993 and prior to becoming CEO held various roles, including CFO. He led the business' expansion into northern Europe and Asia.

The Company currently intends to put in place an incentivisation arrangement for Noratel's management team based on the performance of Noratel over the three years following Completion worth up to £1.2 million. The exact terms of this arrangement are yet to be finalised.

In addition, part of the consideration that Noratel's management team have elected to receive is payable in Ordinary Shares, thus further Incentivising Noratel's management team to drive performance in the Enlarged Group.

4.2 Key strengths

The Company considers that Noratel's key strengths include:

• * Product quality, development and customisation: Product development and customisation is an essential part of Noratel's business and is typically performed in close co-operation with its customers. Although the basic construction principle behind a transformer has not changed significantly over the years, Noratel's customers continually demand smaller, more efficient and lower cost products. The engineers at Noratel are able to design, manufacture and test transformer and choke products according to specific performance, safety and environmental requirements.
• * Geographic platform: Noratel has more than 2,300 employees worldwide, with the majority engaged in the manufacturing process in low-cost countries in Asia and Poland. Noratel is well-known in many markets for its technical knowledge and innovation. An experienced staff of more than 40 engineers, largely based in Norway and Germany, are involved in product development and customisation.
• * Manufacturing capacity and customer base: As a diversified manufacturer Noratel delivers to a range of customers in selected industries and geographical locations. Over recent years Noratel has been able to acquire an increasing share of international blue chip customers, and has become a preferred supplier to many leading international OEMs.

Noratel sells its products primarily to seven main end-market segments:

* motor drives and automation;

• * installation and wholesale;
• * wind and solar energy;
• * medical;
• * ship and offshore oil and gas platforms; and
• * other (for example audio and mobility)
• * Long term customer relationships: In the last year, Noratel had approximately 2,500 customers. No one customer represents a significant proportion of total revenue with the top 30 customers accounting for 45 per cent. of total revenue for the year ended 31 December 2013. Whilst orders will fluctuate from year to year, Noratel has had a relationship with most of its customers for at least five years and in some cases up to twenty years.
• * Stable management with long term service: Management have an average length of service of 16 years with the Noratel Group and are therefore highly experienced with a track record of growing the business.

5. Summary financial information on Noratel

The following table sets out a summary of certain key financial information on Noratel derived from Part XIII (B) (''Historical Financial Information relating to the Noratel Group'') which contains the historical financial information of Noratel for the three years ended 31 December 2011, 2012 and 2013 as reported on by the Reporting Accountants to Acal.

Summary Financial Information

NOKm	Financial year ended, 31 December
	2011	2012	2013
Sales	726	743	794
Operating profit	50	74	74
Underlying operating profit	56	75	81
Underlying operating margin	7.7%	10.1%	10.2%
Underlying EBITDA	73	92	100
Underlying EBITDA margin	10.0%	12.4%	12.6%
Profit before tax	30	48	38
Underlying profit before tax	36	49	45

Note: Underlying profit measures above exclude the impact of exceptional items.

As at 31 December 2013, Noratel had gross assets of NOK815 million (£80.7 million) and net assets of NOK227 million (£22.4 million).

The Noratel Group has experienced solid growth over the 3 year period ending 31 December 2013 amidst challenging market conditions. Revenue has grown by 5 per cent. CAGR over the 3 year period, with underlying operating margin and underlying EBITDA margin improving by 2.5 percentage points and 2.6 percentage points respectively over the historical period resulting from increasing revenues, resilient gross margins and a stable cost base. Noratel's revenue performance benefitted from the acquisition of NPE in December 2012, giving the Noratel Group access to the sizeable US market and contributing NOK18.2 million of revenue to the Noratel Group in the year ended 31 December 2013.

The NOK4.4 million (9.0 per cent.) decrease in underlying profit before tax in 2013 compared to the prior year is attributable to a NOK10.3 million increase in net finance costs resulting mainly from foreign exchange losses on financial liabilities.

Shareholders should read the whole of this document and not just rely on the summarised information above.

6. Principal terms of the Acquisition

Under the terms of the Sale and Purchase Agreement, which was signed on 4 June 2014, the Purchaser, a wholly owned subsidiary of Acal, has agreed to acquire the entire issued and to be issued share capital of Noratel based on an enterprise value (on a debt free basis) of NOK735 million. The up front cash consideration payable by the Purchaser to the Sellers at Completion is NOK291.88 million (£29.2 million). Certain members of the Noratel management team have also elected to receive a portion their consideration (equal to £812,000 in aggregate) in the form of Ordinary Shares in Acal with a view to sharing in the future growth and success of the Acal Group. Stefan Larsson, the Chief Financial Officer of Noratel, also has committed to acquire Ordinary Shares with a value of £33,000 at Completion.

The Acquisition is conditional, inter alia, upon obtaining the approval of Shareholders at the General Meeting, the completion of the Rights Issue and the satisfaction or waiver of other conditions which are considered customary for a transaction of this nature.

The Sale and Purchase Agreement includes commercial and tax warranties and indemnities from the Sellers to the Purchaser. Claims by the Purchaser against the Sellers under the warranties and indemnities are subject to certain financial thresholds and caps, matters disclosed by the Sellers, and a survival period, which are customary for a transaction of this nature.

Herkules, a Norwegian private equity firm, has owned Noratel since 2004. Herkules Private Equity (GP-I) Limited, which owns approximately 67.5 per cent. of the share capital of Noratel, is expected to be wound up on or around 31 December 2014, as the fund reaches the end of its term. Accordingly, in order to provide additional cover for the potential liabilities of the Sellers in respect of the warranties under the Sale and Purchase Agreement, Acal has taken out an insurance policy. Subject to certain customary exceptions, this insurance policy will respond to any claims by Acal against the Sellers under the warranties up to a cap of NOK250 million.

In the event that the Resolutions are not passed on or before 30 June 2014, or the Underwriting Agreement is terminated prior to Admission or Admission does not occur, save in certain limited circumstances, the Company will be required to pay the Sellers c0.6 million (£0.5 million) under the break fee for costs and expenses incurred by the Sellers in connection with the Acquisition.

Further details of the Sale and Purchase Agreement, including the terms of the break fee, are set out in Part VIII (''Summary of the Principal Terms of the Acquisition'') of this document.

7. Financial impact of the Acquisition and the use of proceeds of the Rights Issue

The upfront cash consideration for the Acquisition is NOK291.88 million (£29.2 million). In addition, the Company will incur commission, adviser fees and expenses of approximately £5.0 million in connection with the Acquisition, the Rights Issue and the Facility.

The Company has entered into the Facility which is a new facility agreement in respect of a £70 million revolving facility with the Banks, which is available in part to finance the Acquisition, partly to refinance Acal's existing committed facilities (which stood at £24 million on 31 March 2014), refinance Noratel's existing debt and also for general corporate purposes. Further details on the Facility are set out in Part XVII (''Additional Information'') of this document.

It is intended that the cash consideration for the Acquisition and associated expenses will be met from the proceeds of the Rights Issue. The proceeds of the Rights Issue will also be used to repay Noratel's existing debt.

The Acquisition is expected to be immediately enhancing to underlying earnings per share, taking into account the issue of the Rights Issue Shares and the Consideration Shares but excluding any cost or benefits from potential operational efficiencies arising from the Acquisition. This statement does not constitute a profit forecast.

Your attention is drawn to Part XIV (''Unaudited Pro Forma Financial Information'') of this document which contains an unaudited pro forma statement of net assets and an unaudited pro forma income statement of the Enlarged Group assuming that the disposal of the Enterprise Business by the Acal Group, the Acquisition, and the Rights Issue had occurred on 31 March 2014 and at the beginning of that financial year, respectively. As more fully described in Part XIV of this document, on a pro forma basis and based on the assumptions described therein, the unaudited pro forma revenues and underlying operating profit of the Enlarged Group would be £298 million and £16 million respectively, while the pro forma net assets of the Enlarged Group would be £99.5 million.

The Company estimates that the net debt of the Enlarged Group following Completion will be approximately £30 million (based on an assumed seasonally adjusted normalised net debt level for the Enlarged Group) and therefore expects headroom under the Facility of approximately £40 million to provide ongoing financial flexibility. The Board expects leverage on Completion of the Acquisition to be approximately 1.6 times net debt/underlying EBITDA (based on the pro forma profits for the 2014 Financial Year). The Enlarged Group is expected to generate strong free cash flow and the Board expects that this leverage ratio will reduce over time.

Shareholders should read the whole of this document and not rely solely on the summarised financial information contained in this letter.

8. Principal Terms of the Rights Issue

The Company has entered into an Underwriting Agreement with Oriel Securities pursuant to which Oriel Securities has agreed to fully underwrite any Rights Issue Shares not taken up by existing Shareholders pursuant to the Rights Issue. The Rights Issue will raise net proceeds of £52.5 million which will be used to finance the Acquisition. The Rights Issue is not conditional upon completion of the Acquisition.

Subject to the terms and conditions set out below (and, in the case of Qualifying Non-CREST Shareholders, the Provisional Allotment Letter), the Rights Issue Shares will be offered for subscription by way of a rights issue to Qualifying Shareholders on the following basis:

One Rights Issue Share at 176 pence each for every one Ordinary Share

registered in the name of each Qualifying Shareholder at the close of business on the Record Date and so in proportion for any other number of Ordinary Shares then registered.

The Rights Issue Price represents a discount of approximately 49 per cent. to the closing middle market price on 4 June 2014 (being the last business day prior to the announcement of the Rights Issue) and a 32.45 per cent. discount to the theoretical ex-rights price of 261 pence per Rights Issue Share calculated by reference to that Closing Price on the same basis. This represents a 47.97 per cent. discount to that closing middle market price adjusted for the 2014 Final Dividend of 6.85 pence per Ordinary Share, which will be paid to Shareholders on the register of members at the close of business on 13 June 2014, and a discount of 30.63 per cent. to the theoretical exrights price on the same basis.

Upon completion of the Rights Issue, the Rights Issue Shares will represent 100 per cent. of the Company's existing issued share capital and 50 per cent. of the Company's enlarged issued share capital following the Rights Issue and prior to the issue of the Consideration Shares.

The above calculations assume that no Ordinary Shares are issued as a result of the exercise of any options or awards under the Acal Share Plans between the Latest Practicable Date and the Record Date.

The Rights Issue Shares will be credited as fully paid and will rank pari passu in all respect with the Existing Shares, including the right to receive all dividends and other distributions declared, made or paid on the Existing Shares after Admission, save that the Rights Issue Shares will not qualify for the 2014 Final Dividend. The Rights Issue Shares may be held in certificated or uncertificated form.

Application will be made to the UK Listing Authority for the Rights Issue Shares to be admitted to the premium segment of the Official List and to the London Stock Exchange for the Rights Issue Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. It is expected that admission to listing and admission to trading of the Rights Issue Shares, nil paid, on the premium segment of the Official List will become effective, and dealings for normal settlement in the Rights Issue Shares, nil paid, on the London Stock Exchange will commence at 8.00 a.m. on 24 June 2014. It is further expected that admission to trading of the Rights Issue Shares, fully paid, will become effective, and dealings for normal settlement in the Rights Issue Shares, fully paid, on the London Stock Exchange will commence at 8.00 a.m. on 9 July 2014.

The offer of Nil Paid Rights, Fully Paid Rights and/or Rights Issue Shares to persons resident in, or who are citizens of, or who have a registered address in countries other than the United Kingdom may be affected by the laws of the relevant jurisdiction. Subject to certain exceptions, the Rights Issue is not being made in the Excluded Territories. Persons in Excluded Territories should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their rights.

The Rights Issue is being fully underwritten by Oriel Securities on the terms and conditions of the Underwriting Agreement (which is summarised in Part XVII (''Additional Information'') of this document).

The Underwriting Agreement is not subject to any right of termination after Admission (including in respect of any statutory withdrawal rights). The Company reserves the right to decide not to proceed with the Rights Issue at any time prior to Admission. If the conditions to the Underwriting Agreement are not satisfied or waived, the Rights Issue will not proceed.

9. Current trading and prospects

9.1 The Acal Group

In its 2014 Financial Results released on 5 June 2014, Acal reported underlying profit before taxation of £6.3 million for the year ended 31 March 2014 on revenues of £211.6 million on a continuing basis. As at 31 March 2014, Acal had net assets of £48.5 million. As at the close of business on 4 June 2014, Acal had a market capitalisation of £108 million and a share price of £3.45.

The 2014 Financial Results contained the following commentary in relation to the Company's current trading and prospects:

''The business performed well over the last year. Organic performance returned to growth and operating margins have further improved, generating a healthy cash flow. All seven of our acquisitions made in the last five years are performing well, including Myrra, YEG and RSG acquired this year, bringing new capabilities and products, as well as access to new geographies. With the disposal of the Enterprise business completed, Acal is now wholly focused on specialist electronics.

Trading conditions improved through the year and we continue to perform ahead of the broader market, as customers increasingly recognise and appreciate the value of our differentiated offering.

The new financial year has started well as expected. Sales growth continues, driven by the high order book, whilst orders remain at levels similar to those of last year. The proposed major acquisition of the Noratel Group, announced today, will enhance our product capabilities and expand our geographic presence. Whilst overall market growth rates remain relatively low, the business is well positioned to benefit from improving market conditions, enhanced by further quality acquisitions.''

There has been no change in the Company's assessment of the matters described above since 5 June 2014.

9.2 Noratel

Noratel's trading for the first four months of 2014 reports revenues that have increased by 5 per cent. compared to the prior year. Rolling twelve month revenues to the end of April 2014 have grown by 2 per cent., at CER compared to prior year and rolling twelve month orders at the end of April 2014 were 1 per cent. lower, at CER compared to the prior year. With a significant pipeline of new projects both in the industrial, renewable energy and medical sectors, the Group is well positioned for further growth, as project releases come through and global economies continue to improve.

The general improvement in market conditions, pick up in industrial manufacturing activities and growth in the renewable energy and medical sectors presents significant growth opportunities for the Noratel Group. With a strong track record, custom design service, broad geographical presence and a low cost manufacturing base in Asia, the Noratel Group is well positioned to take advantage of these opportunities and grow further.

10. Risk factors

Shareholders should consider fully and carefully the risk factors associated with the Group and the Enlarged Group. Your attention is drawn to the risk factors set out in Part II (''Risk Factors'') of this document.

11. Dividend and dividend policy

The Board has recommended the 2014 Final Dividend of 6.85 pence per Ordinary Share giving a total dividend for the financial year ended 31 March 2014 of 9.35 pence per Ordinary Share, which represents an increase of 10 per cent. on the previous year and a dividend cover of 1.7 times underlying earnings. In total, the dividend has been increased by 34 per cent. over the last four years. The dividend will be payable on 31 July 2014 to shareholders on the register as at 13 June 2014.

The Board continues to consider dividends to be an important component of Shareholder returns and intends to continue its progressive dividend policy, wherever practical to do so. Following the Acquisition it is the Board's intention to maintain dividend cover over the medium term in the range of two to three times underlying earnings.

12. Potential revised incentivisation arrangements for Acal's senior management

Following Completion, it is the Board's intention to review the incentive plans for Acal's senior management to take into account the importance of the Acquisition. Following best practice, the Company will consult with key Shareholders before finalising the details and will seek Shareholders' approval for any changes to the existing LTIP or to the remuneration policy.

13. Taxation

Information on UK taxation with regard to the Rights Issue is set out in Part XVI (''Taxation'') of this document. This information is intended only as a general guide to the current tax position in those jurisdictions.

If you are in any doubt as to your own tax position, or are subject to tax in a jurisdiction other than the UK, you should consult your own independent professional adviser without delay.

14. Resolutions, authorisations and approvals relating to the Rights Issue

Part XIX (''Notice of General Meeting'') of this document contains a notice convening the General Meeting to be held at 2 Chancellor Court, Occam Road, Surrey Research Park, Guildford, Surrey, GU2 7AH on 23 June 2014 at 11.00 a.m. and contains the Resolutions which Shareholders will be asked to approve to allow the Rights Issue to proceed and to approve the Acquisition.

The Acquisition is conditional on Shareholders approving the Resolutions set out below in relation to the Rights Issue and the Acquisition. In addition, the Acquisition and the Facility are interconditional.

In summary, Resolution 1 (which is a special resolution) seeks the approval of Shareholders:

• (a) to the terms of the Rights Issue as set out in this document and to direct the Directors to exercise all powers of the Company to implement the Rights Issue;
• (b) to grant the Board authority to allot the Ordinary Shares to be issued pursuant to the Rights Issue and as Consideration Shares pursuant to section 550 of the Companies Act 2006; and
• (c) to grant the Board authority to allot the Rights Issue Shares and the Additional Consideration Shares for cash for the purposes of the proposed Rights Issue and the issue of the Additional Consideration Shares as if section 561 of the Companies Act 2006 did not apply.

In summary, Resolution 2 (which is an ordinary resolution) seeks the approval of Shareholders to the Acquisition and to authorise the Directors to take the necessary actions in order to effect the Acquisition.

15. Actions to be taken

A Form of Proxy for use at the General Meeting is enclosed with this document. Whether or not you intend to be present at the General Meeting, you are requested to complete and return the Form of Proxy, in accordance with the instructions printed thereon, as soon as possible and in any event so that it is received by the Company's UK transfer agent, Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, not later than 11.00 a.m. on 19 June 2014. Completion and return of the Form of Proxy will not preclude Shareholders from attending and voting in person at the General Meeting should they wish to do so. You may also submit your proxies electronically by email. To be valid, this electronic proxy appointment must be signed, dated* and a scanned copy of the original sent by email to the Company's Registrars, Equiniti, to proxy.votes@equiniti.com, to be received by the Company no later than 11.00 a.m. on 29 May 2014 (or 48 hours before the adjourned meeting at which the person named on the form is proposed to vote). Please note the Company will not accept any communication that is found to

^* A scanned copy of any power of attorney or other authority (if any) under which the appointment is made must also be sent by email.

contain a computer virus. If you hold shares in CREST, you may appoint a proxy by completing and transmitting a CREST Proxy Instruction to the issuer's agent, IDRA90, so that it is received no later than 11.00 a.m. on 19 June 2014.

16. Further information

The expected timetable of principal events for the Acquisition is set out in Part V (''Expected Timetable of Principal Events'') of this document. Your attention is drawn to the further information set out in Parts VIII to XVII and the Notice of General Meeting set out at the end of this document. You are advised to read the whole of this document and not to rely solely on the summarised information contained within this letter.

Please call the Shareholder Helpline on 0871 384 2869 (from within the UK) or on +44 121 415 0828 (if calling from outside the UK). Calls to the 0871 384 2869 number are charged at 8 pence per minute (excluding VAT) plus network extras. Lines are open from 8.30 a.m. to 5.30 p.m. (London time) Monday to Friday (except UK public holidays). Calls to the Shareholder Helpline from outside the UK will be charged at the applicable international rate. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. Please note that the Shareholder Helpline operators cannot provide advice on the merits of the Acquisition or Rights Issue or nor give financial, tax, investment or legal advice.

17. Directors' Intentions

Each of the Directors who holds Ordinary Shares has undertaken to take up in full his or her rights to subscribe for Rights Issue Shares under the Rights Issue in respect of his or her holdings, which together amount to 66,263 Ordinary Shares, representing 0.21 per cent. of Acal's issued ordinary share capital as at the Latest Practicable Date.

18. Recommendation

The Board believes that the Acquisition and Rights Issue are in the best interests of the Company and of Shareholders as a whole and accordingly unanimously recommends that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting to approve the Acquisition and the Rights Issue as the Directors intend to do in respect of their own beneficial holdings amounting, in aggregate, to 66,263 Ordinary Shares, representing approximately 0.21 per cent. of the issued ordinary share capital of Acal as at the Latest Practicable Date.

Yours faithfully

Richard Moon Non-Executive Chairman

PART VIII

Summary of the Principal Terms of the Acquisition

Summarised below are the principal terms and conditions of the Acquisition:

1. Background

• 1.1 The Sale and Purchase Agreement, dated 4 June 2014, is for the sale and purchase of the entire issued share capital of Noratel free and clear of all encumbrances, together with all rights attaching to the Shares, including the right to vote and represent the Shares and right to receive all dividends or distributions and other benefits deriving.
• 1.2 The parties to the Sale and Purchase Agreement are (1) the Purchaser; (2) the Company (as guarantor for the Purchaser); (3) Herkules Private Equity (GP-I) Limited; and (4) Herkules Private Equity (GP-II) Limited (''Herkules''); and (5) the Minority Shareholders (Herkules and the Minority Shareholders together the ''Sellers'') (as vendors).

2. Consideration

2.1 The consideration payable in respect of the purchase of the entire issued share capital of the Noratel shall be NOK300 million (the ''Purchase Price'') being the net sum of an enterprise value of NOK735 million and consolidated financial net debt of NOK435 million as at 31 December 2013.

Cash Consideration

2.2 At Completion, the Purchaser shall make a cash payment to the Sellers of NOK291.88 million.

Share Consideration

• 2.3 An amount equal to NOK8,120,000 of the Purchase Price (the ''Share Consideration Amount'') shall be settled by the Purchaser procuring that the Management Shareholders are issued the Initial Consideration Shares.
• 2.4 The number of Initial Consideration Shares to be issued to each of the relevant Management Shareholders shall be calculated on the following basis:
• (a) the Share Consideration Amount shall be converted into GBP based on an NOK/GBP exchange rate of 10/1, resulting in the ''GBP Share Consideration Amount'' of £812,000;
• (b) the GBP Share Consideration Amount shall be divided by the average mid-market closing price for Ordinary Shares for the three trading days prior to the Completion, to determine the number of Initial Consideration Shares to be delivered on Completion up to a maximum of 480,000 Ordinary Shares in aggregate;
• (c) the Initial Consideration Shares shall be assigned among the relevant Management Shareholders in accordance with their relative portion of the Share Consideration Amount;
• (d) the number of Initial Consideration Shares to be assigned to any Management Shareholder shall be rounded down to the nearest whole Initial Consideration Share.

Purchase of Ordinary Shares

2.5 Stefan Larsson shall on Completion have an obligation to subscribe for a number of Ordinary Shares equal to a value of NOK330,000 (the ''Additional Consideration Shares''), at the same share price and at the same currency conversion rate that applies to the Initial Consideration Shares up to a maximum of 20,000 Ordinary Shares.

Limitation on number of Consideration Shares

2.6 In no event shall the Company be obliged to deliver more than 500,000 Consideration Shares. Should the number of Consideration Shares to be delivered exceed 500,000, the number of Initial Consideration Shares will be reduced pro rata among the recipients of such Initial Consideration Shares such that the total number of Initial Consideration Shares and Additional Consideration Shares is 500,000 and any balance of the amount of the Share Consideration Amount not able to be settled by means of the issue of Initial Consideration Shares shall be cash settled.

Lock-in of Consideration Shares

2.7 Subject to certain customary exceptions, the Management Shareholders each undertake to the Company that they will not, for the two year period from Completion, without the prior written consent of the Company, sell, transfer, charge, pledge or otherwise dispose of (or any interest in) any of the Consideration Shares.

3. Conditions and completion

• 3.1 Completion of the Acquisition is conditional upon:
• (a) there having been no material breach of the Sellers' warranties which (individually or taken together) would have a material adverse effect on the condition, assets, operations, performance, prospects or the financial position of the Noratel Group taken as a whole;
• (b) the Sellers having complied in all material respects with its obligations under the Sale and Purchase Agreement;
• (c) no Noratel Group company having, following the date on which the Sale and Purchase Agreement is signed (the ''Signing Date'') and up until the Closing Date (as defined below), received notice of termination from customers who, individually or in aggregate, represent more than NOK40 million in current annual sales based on the 'Locked Box Accounts' (those being the actual and audited consolidated accounts of the Noratel Group for the year 2013 ended on 31 December 2013, including the balance sheet, the income statement, the cash flow statement and the notes, the directors' report and the auditors' report);
• (d) each of Asle Braathen Tandberg or Thomas Larsson not having terminated or in any other way ceased his employment with the Noratel Group;
• (e) no material adverse change occurring since the signing date;
• (f) there being in effect no injunction, order or decree of any nature issued, ordered or granted by any Governmental Body of competent jurisdiction that prohibits the closing of the Acquisition;
• (g) the passing of the resolutions at the General Meeting of the Company;
• (h) admission having taken place;
• (i) (a) the Underwriting Agreement having been duly entered into, having become unconditional in accordance with its terms and not having lapsed or been terminated in accordance with its terms, and the Acceptance Date (as defined therein) having passed;
  • (b) settlement in full of the Rights Issue Proceeds having occurred pursuant to the Underwriting Agreement; and
• (j) the Facility Agreement having become unconditional in accordance with its terms (except as regards any condition relating to closing of the Sale and Purchase Agreement) and not having lapsed or been terminated in accordance with its terms.
• 3.2 The Sale and Purchase Agreement will terminate if the conditions referred to above are not satisfied by 17:00 (CET) on 31 August 2014. The Purchaser shall pay the Sellers the sum of c600,000 as a break fee in the event that any of the conditions in paragraph 3.1 (g) to (j) above are not satisfied by that time.
• 3.3 The Sale and Purchase Agreement contains certain customary restrictions upon the operation of the Noratel Group during the period between the signing date and Completion.
• 3.4 Assuming prior satisfaction of all other conditions precedent, the Sale and Purchase Agreement will become unconditional in all respects on satisfaction of the condition relating to completion of the Facility Agreement. Completion will occur on the 6th business day after satisfaction of the conditions in paragraph 3.1 above. Completion is expected to occur on or around 16 July 2014 (the ''Completion Date'').

4. Warranties and Indemnities

• 4.1 The Sale and Purchase Agreement includes warranties given by all the Sellers.
• (a) The warranties given include: commercial warranties (which are customary for a transaction of this nature), including corporate, accounts receivables, commercial contracts, employment, litigation, operation of business, data protection, intellectual property rights, real estate and tax; and
• (b) customary warranties relating to the capacity and authority of the Sellers and title to the shares in Noratel.
• 4.2 The Sale and Purchase Agreement also contains certain specific indemnities in addition to the warranties as set out above in relation to:
• (a) any leakage by way of payments or other disbursements by the Noratel Group to any Seller since 31 December 2013 (other than those payments expressly approved by the Purchaser); and
• (b) any and all liabilities of any kind, on a NOK for NOK basis, arising from the defined benefit pension scheme or with respect to the conversion from the defined benefit scheme to a defined contributions scheme or created through or in connection with such conversion.
• 4.3 The warranties in the Sale and Purchase Agreement are subject to matters that have been disclosed to the Purchaser. The Sale and Purchase Agreement includes disclosure schedules pursuant to which the Sellers have made certain disclosures against the warranties.
• 4.4 The liability of the Sellers for claims under warranties and indemnities is subject to certain customary time limitations as to the period for making claims and financial limitations on the amount that may be claimed, including thresholds and an aggregate financial cap.
• 4.5 The liabilities under warranties contained in the Sale and Purchase Agreement have been insured subject to a cap of NOK250 million and the terms and conditions of an insurance policy dated 4 June 2014 entered into between AIG and the Company.

5. Protective Covenants

The Sale and Purchase Agreement includes certain post-Completion restrictions on the Sellers, including non-compete and non-solicitation of employees of the Noratel Group for a period of two years and three years respectively from the date of Completion.

6. Lock-up Arrangements

The Management Sellers have agreed not to transfer any interest in the Consideration Shares for a period of two years from the date of Completion. After the expiry of such two year period any disposal must be made in accordance with agreed orderly market principles.

PART IX

Information on Acal, Noratel and the Enlarged Group

1. History, development and overview of the Group

1.1. Business overview

Acal is a specialist electronics group supplying niche electronics to industrial manufacturers and the healthcare sector. The Group operates a number of high quality businesses, which supply and create individual product solutions to meet specific customer needs. Acal is well positioned with an infrastructure to deliver a complementary range of specialist products and bespoke solutions across Europe as well as in Asia and Africa. The Acal Group's businesses comprise Acal BFi, Hectronic, MTC, Myrra, RSG, Stortech and Vertec of which Acal BFi is the largest. Approximately 70 per cent. of the Group's revenues are generated from major economies in Europe.

Acal has completed seven acquisitions in the last five years, more than trebling its specialist electronics revenues. These acquisitions have expanded both its design and manufacturing capabilities as well as its specialist distribution offering. These acquisitions have delivered a combined pre-tax return on investment of 24 per cent. (after including the costs of the integration) during the year ended 31 March 2014. This combined with the development of the organic performance and the disposal of the Supply Chain Division, has led to an increase in underlying operating profits and underlying operating margin in this period from an underlying operating loss of £0.7 million (-0.4 per cent. margin) to an underlying operating profit of £7.1 million (3.4 per cent. margin) on a continuing basis.

Acal's strategy is to further enhance its leading position through organic growth and by acquiring complementary businesses which together create the opportunity for enhanced growth and/or the realisation of operational efficiencies.

On 2 June 2014, Shareholders voted to approve the disposal of the Enterprise Business, to a company in which the management team of that business is participating. The disposal represented the remaining business contained within its Supply Chain Division and reflects Acal's continued strategy of building a specialist electronics supplier to the industrial and medical sectors. The disposal completes the Company's program of non-core business disposals, following the disposal of its UK Parts Business and the European Parts Business in 2013.

In its 2014 Financial Results, Acal reported underlying profit before taxation of £6.3 million for the year ended 31 March 2014 on revenues of £211.6 million on an ongoing basis. As at 31 March 2014, Acal had net assets of £48.5 million. As at the close of business on 4 June 2014, Acal had a market capitalisation of £108 million and a share price of £3.45.

Industrial customer base

The Company's customers develop and manufacture innovative products in the general industrial, healthcare, communications, renewable energy, transportation, automotive, aerospace and defence sectors. Acal companies support customers by providing specialist technical design capability across a range of products, helping them to fulfil their design ambitions.

Most products are supplied to meet customers' manufacturing demand. As such, there is a significant proportion of recurring demand for future months and, in some cases, several years. In the short term, revenue levels are determined by customers' levels of production demand, as well as by the release into production of new projects and their subsequent demand levels. Over the longer term it is anticipated that markets and demand levels will be determined by the range of differentiated technologies and specialist products provided.

With over 20,000 customers, mostly throughout Europe, the business has the size and infrastructure to provide specialist engineering support across a range of products and countries that is difficult for smaller companies to provide economically.

The Company's markets and customers' product offerings often rely on differentiated technology as key drivers for their new product innovation. Technology therefore continues to be adopted into industrial markets at a rate ahead of overall GDP.

Specialist products

The Group supplies specialist electronic products which require a high degree of technical knowledge in the sales process. Adopting a consultative sales approach, engineers develop technical solutions that meet customers' specific application requirements. Solutions range from the recommendation of an existing product, through modification of existing products, up to full design and development of a custom solution. In some cases, solutions involve the integration of suppliers' products into end unit design assemblies. The Group's engineers have technical knowledge, and are supported by in-house application and design engineers. By developing solutions which are specific and highly valued by customers, the business is able to generate attractive and sustainable margins.

Distribution, design and manufacturing

The Group comprises a number of high quality specialist businesses, operating in specialist distribution, design and manufacturing. Distribution businesses have a number of key suppliers with which they work, often exclusively, to develop specialist customer solutions, which are frequently customised and unique. Design and manufacturing businesses design the product in-house and manufacture it either internally or externally (on an outsourced basis). Both types of businesses have design, customisation and development capability.

All businesses share the same attributes:

• (a) they sell niche products;
• (b) the products require a high level of technical knowledge to facilitate and achieve sales; and
• (c) a significant proportion of sales come from customised solutions.

1.2. History and development of the Group

Originally known as Spurfame Limited, Acal was incorporated on 9 April 1986. In December 1986, Acal acquired the European subsidiaries of Auriema International Group, Inc., which focused on the supply of electronic components. In February 1987, Acal further acquired Centre Industries Limited and its subsidiaries, which also focused on the supply of electronics products and components.

In March 1994, Acal was admitted to listing on the Official List and to trading on the London Stock Exchange's main market for listed securities. In the years since, it has grown both organically and by a succession of acquisitions, coupled with strategic disposals of certain non-core businesses:

• * Acal acquired Segdemoor plc in June 1999, a specialist distributor of electronic components.
• * Acal disposed of its air conditioning and refrigeration business in July 2006 and then its IT solutions business in December 2007.
• * In 2009, Acal acquired Service Source Europe Limited, which has since been renamed Acal Supply Chain Limited.
• * In December 2009, Acal acquired Financie`re BFi Optilas SAS, a specialist electronics and photonic component distributor, to enhance the Group's ability in key European Markets to serve its customers' and suppliers' requirements.
• * In 2010, Acal completed the disposal of ATM Parts Company Limited, a business within its Supply Chain division.
• * In January 2011, Acal acquired CompoTRON GmbH, a specialist provider of electronic communication and fibre optic components to the European industrial electronic markets, based in Munich with operations in the UK and Denmark.
• * In June 2011, the Company completed the acquisition of Hectronic, a Swedish electronics business, which specialises in providing embedded computing technology to industrial electronic markets.

• * In October 2011, the Company completed the acquisition of MTC, a specialist provider of Electromagnetic shielding products to the European and Asian industrial electronic markets.

• * In January 2012, Acal completed the disposal of its Retail Parts business, a small business within its Supply Chain Division.

• * In January 2013, the Company disposed of its subsidiary Acal Supply Chain Limited to the management team of Acal Supply Chain Limited.
• * In April 2013, the Company completed the acquisition of the Myrra Group, a specialist in the design and manufacture of custom electro-magnetic products based in France.
• * In August 2013, the Company completed the acquisition of YEG, a specialist distributor of electronic components, LEDs and optoelectronics, power supplies, IT products, powercords and electronics manufacturing services.
• * In October 2013, the Company disposed of EAF Computer Service Supplies GmbH to EAF Holding GmbH (a company in which the EAF Management Team participated).
• * In November 2013 the Company completed the acquisition of RSG Electronic Components GmbH, a distribution partner for high quality manufacturers of electronic components.
• * In June 2014, Acal disposed of its subsidiary, Acal Enterprise Solutions Limited, to the management team of Acal Enterprise Solutions Limited. The transaction was approved by Shareholders at the Company's general meeting on 2 June 2014.

1.3. The Myrra Group acquisition

Acal acquired the Myrra Group in 2013 in order to expand its design and manufacture of custom transformers and inductors for industrial electronic use. The Myrra Group has been successfully incorporated into the Group as a standalone business unit and has since delivered organic sales growth of 11 per cent. and order growth of 23 per cent. in the year ended 31 March 2014 at CER.

Initiatives have been undertaken to generate synergies with other parts of the Group. Specifically, production efficiencies have been achieved by transferring production of some customer magnetic parts made for Acal BFi's existing magnetics business to Myrra from external subcontractors.

A cross-selling programme is underway with the objective of identifying opportunities for the sale of Myrra products to existing customers of other Group businesses and in other territories. In addition, over two thousand Myrra products are now displayed on the Acal BFi website, thereby providing greater visibility to the market of its products and capabilities.

Given the complementary nature of Noratel to the Myrra Group, the Company expects additional purchasing efficiencies can be achieved following completion of the Acquisition.

1.4. Key strengths

The Directors consider that the Group's key strengths include:

• * a differentiated, niche strategy;
• * leading market position in Europe for specialist electronic products;
• * a wide and well established range of specialist products;
• * a record of achieving organic growth ahead of market;
• * highly capable engineering sales force;
• * long established customer relationships, with over 20,000 customers in Europe;
• * innovative product design, development and customisation supported by technological expertise;
• * a record of successfully acquiring and integrating high quality complementary businesses; and
• * a strong and experienced management team.

1.5. Strategy

The Group strategy is to build its position in the specialist electronics market. With both specialist distribution and a growing proportion of design and manufacturing businesses, this is being achieved through organic growth, acquisition and the realisation of synergies.

Organic growth

The Group seeks to deliver organic growth ahead of GDP over the economic cycle. This is achieved through growth in the number and value of customer projects, the cross selling of other Group products into existing customers and the acquisition of new customers.

The Company operates across twelve specialist technology groups. Each technology group employs a team of specialist sales and support engineers, whose role is to identify and develop customer opportunities. Through the launch of the web, the business is able to present to a wider audience than before, the full range of products and capabilities on offer, whilst the business is more accurately able to identify and develop particular product and application areas of interest.

During the year ended 31 March 2014, like for like Electronics sales and orders grew by 2 per cent. and 4 per cent. respectively, and the order book for future delivery increased by 11 per cent. on a like-for-like basis excluding acquisitions.

Acquisitions

The Group seeks to acquire well-established, niche electronics businesses which have the potential for further organic growth, as well as benefiting from cross-selling and operational synergies through the Group's existing infrastructure. During the year ended 31 March 2014, £12.5 million was spent on the acquisitions of Myrra (design and manufacture), the trade and assets of YEG (specialist distribution) and RSG (specialist distribution, design and manufacture). All three acquisitions were immediately value enhancing.

Synergies

The Group seeks to realise value-enhancing synergies, both in sales and in operations, through the acquisition of complementary businesses. The level and type of synergies varies, according to the circumstances. Operating synergies are achieved through the integration of, for example, office and warehouse facilities, manufacturing capabilities, IT systems and common purchasing, freight and logistics. The integration of YEG into Acal BFi was completed following the financial year ended 31 March 2014, and Myrra assumed production of certain existing custom products for Acal BFi, which were previously produced by a third party.

In executing this strategy, the Group has a number of core operational objectives:

1. Sales growth ahead of GDP over the business cycle

Electronics sales in the year ended 31 March 2014 grew by 17 per cent. at CER. On a like-for-like basis, organic sales for the year ended 31 March 2014 grew by 2 per cent., with a 1 per cent. reduction in the first half of the year ended 31 March 2014 accelerating in the second half to 4 per cent. enhanced by the delivery of a number of large orders. Over a similar period, GDP in the UK and Europe grew by around 0.3 per cent.

2 Develop sustainable & attractive operating margins

The Group's underlying operating margin (EBIT) improved to 3.4 per cent. from 3.1 per cent. in the year ended 31 March 2014, with the second half of this period reporting 3.7 per cent, up from 3.2 per cent.. Acal's objective remains to achieve and exceed 5 per cent. Group underlying operating margin in the medium term. With increasing volumes seen in the last year in the existing businesses, combined with continuing tight control of operating expenses, the Group believes it is on track to achieve this objective. Further acquisitions, and the realisation of synergies from such acquisitions, are expected to accelerate progress towards this goal.

• 1. Create value through efficient and effective use of capital ROTCE(*) was 24 per cent. for the year ended 31 March 2014 (24 per cent. in the previous year), slightly below the Group medium term target of 25 per cent. The Group continues to achieve well above average working capital efficiency, with working capital at 9.9 per cent. on annualised second half ongoing sales, reducing from 10.1 per cent. in the 2013 Financial Year.

• (*) Return on trading capital employed is defined as underlying operating profit as a percentage of net operating assets (being tangible and intangible assets excluding goodwill plus working capital).

• Acquisitions that enhance earnings

Accelerating growth through acquisitions is an important part of the Group strategy and is expected to further enhance the Group's medium and long term performance. Acal's objective is to achieve a Return on Investment (''ROI'') of at least 15 per cent. after including acquisition and integration costs. Seven businesses have been acquired over the last five years and these acquisitions have generated an ROI of 24 per cent. in the current year ended 31 March 2014. Three acquisitions were completed during the year ended 31 March 2014, with total upfront consideration of £12.5 million.

1. Growth in cash flow to fund future acquisitions, organic growth and dividend growth

The Group targets free cash flow exceeding 60 per cent. of underlying operating profit over the cycle. Free cash flow for the year ended 31 March 2014 was £7.3 million (103 per cent. of underlying operating profit) with £32.5 million generated over the last five years (129 per cent. of underlying operating profit over that period).

1. Growth in value for shareholders

Total Shareholder Return (''TSR'') is targeted to be above the median and ideally within the upper quartile, when compared with the constituents of the FTSE Small Cap Index. In the five year period to 31 March 2014, TSR grew by 303 per cent. being in the top 30th percentile performance respectively compared with the FTSE Small Cap Index.

The Group has a progressive dividend policy, with the intention to maintain dividend cover at 2 to 3 times underlying earnings. The full year dividend for the year ended 31 March 2014 has been increased by 10 per cent., for a total increase of 34 per cent. in the last four years.

2. History, development and overview of the Noratel Group

2.1. Business overview

Noratel is a global designer and manufacturer of electromagnetic products specifically low, medium and high power transformers and chokes. Noratel has a broad base of customers in Europe, Asia and increasingly in North America and has become a preferred supplier to leading international OEMs in various markets. It has a well-establised position supplying the industrial, renewable energy, medical and oil and gas sectors.

2.2. History and development of the Noratel Group

Noratel was founded in 1925, originally as a manufacturer of radio transmitters and receivers for ship communication, and later also as a manufacturer of loudspeakers for public arenas and radios for residential use. From 1956, Noratel has concentrated solely on manufacturing transformers.

In 2004, Noratel was acquired by Herkules, a Norwegian private equity firm. In 2005, Noratel acquired Toroid International, a long established and leading manufacturer of toroidal transformers to the European market with manufacturing facilities in Sri Lanka, India and Sweden, in addition to sales offices in Germany, England, Sweden, Spain and India.

In 2011, Noratel established a sales office in the US, followed one year later by the acquisition of Power Engineering Industries (now named NPE) in December 2012.

Today, with almost sixty years of experience in designing and manufacturing transformers, Noratel has developed into an international group of 16 companies operating in 12 countries, with more than 2,300 employees of which approximately 75 per cent. are located at the production facilities in Asia.

2.3. Key strengths

The Company considers that Noratel's key strengths include:

* Product quality, development and customisation: Product development and customisation is an essential part of Noratel's business and is typically performed in close co-operation with its customers. Although the basic construction principle behind a transformer has not changed significantly over the years, Noratel's customers continually demand smaller, more efficient and lower cost products. The engineers at Noratel are able to design, manufacture and test transformer and choke products according to specific performance, safety and environmental requirements.

• * Geographic platform: Noratel has more than 2,300 employees worldwide, with the majority engaged in the manufacturing process in low-cost countries in Asia. Noratel is well-known in many markets for its technical knowledge and innovation. An experienced staff of more than 40 engineers, largely based in Norway and Germany, are involved in product development and customisation.
• * Manufacturing capacity and customer base: As a diversified manufacturer Noratel delivers to a range of customers in selected industries and geographical locations. Over recent years Noratel has been able to acquire an increasing share of international blue chip customers and has become a preferred supplier to many leading international OEMs.

Noratel sells its products primarily to seven main end-market segments:

• motor drives and automation;
• installation and wholesale;
• wind and solar energy;
• medical;
• ship and offshore oil and gas platforms; and
• other (for example audio and mobility).
• * Long term, stable customer relationships: In the last year, Noratel had approximately 2,500 customers. No one customer represents a significant proportion of total revenue with the top 30 customers accounting for 45 per cent. of total revenue for the year ended 31 December 2013. Noratel has had relationships with most of its customers for at least five years and in some cases up to twenty years.
• * Stable management with long term service: Management have an average length of service of 16 years with the Noratel Group and are therefore highly experienced with a track record of growing the business.

2.4. Strategy

Noratel's strategy is to continue building its position as a leading manufacturer of custom transformers and chokes by focusing on key markets and sectors, and by expanding in Europe and internationally through organic growth and by acquisitions.

3. The Enlarged Group

3.1. Integration

It is envisaged that Noratel will operate on a stand-alone basis but in close co-operation with Myrra and the Acal BFi Magnetics division with a view to generating operational benefits, in particular operational efficiencies. The following operational efficiencies are being targeted:

• * cross selling with the magnetics businesses;
• * raw material purchasing efficiencies; and
• * production efficiencies.

It is anticipated that financial reporting and cash management will be integrated into the Group's established processes in the course of the next financial year and is expected to be immediately enhancing to underlying earnings per share (including the issue of the Rights Issue Shares and Consideration Shares but excluding any costs and benefits of potential synergies). This statement does not constitute a profit forecast.

3.2. Competition

Acal competes with a broad range of different companies across its product and service portfolio and in the geographies in which it operates. The Group has, over the last few years, transitioned into a supplier of specialist components and systems with an increasing focus on value-add services, design and manufacturing. This market positioning distinguishes the Group from the larger global competitors who typically focus on either the higher volume, lower margin or the lower volume, higher service distribution sectors. Within its specialist electronics sector, the majority of the Group's competitors are of a smaller scale to Acal, with a more restricted product and service focus. Acal believes there are few, if any, European competitors who match, or have the infrastructure to support the breadth of its specialised electronics supply offering.

The Noratel Group has a strong market position within the European electromagnetic product sector and competes with either international or local players which are predominately of a smaller scale than the Noratel Group. The market is relatively fragmented, which may provide further consolidation opportunities for the Enlarged Group.

PART X

Operating and Financial Review of Acal

The following is a discussion of the Group's results of operations and financial condition for the 2012 Financial Year, the 2013 Financial Year and the 2014 Financial Year. Prospective investors should read the following discussion, together with the whole of this document and any documents incorporated by reference herein, including Part II (''Risk Factors''), the Group's historical consolidated financial statements incorporated by reference and should not just rely on the key or summarised information contained in this Part X.

This section contains ''forward-looking statements''. Those statements, although based on assumptions that the Directors consider to be reasonable, are subject to risks, uncertainties and other factors that could cause the Group's future results of operations or cash flows to differ materially from the results of operations or cash flows expressed or implied in such forward-looking statements. Among the important factors that could cause the Group's actual results, performance or achievements to differ materially from those expressed in such forward-looking statements are included in those sections headed ''Important Information'' and ''Risk Factors'' in this document. All statements other than statements of historical fact, such as statements regarding the Group's future financial position, risks and uncertainties related to the Group's business, plans and objectives for future operations, are forward-looking statements.

Unless otherwise stated, in this Part X and the information incorporated by reference that forms a part of this section, revenue, operating profit, operating margin, net finance costs, profit before tax and earnings per share refer to the Group's underlying results from continuing operations, before amortisation of acquired intangibles, exceptional items, loss on disposal of businesses and the IAS19 pension charge relating to a legacy defined benefit scheme.

A reconciliation of statutory to underlying results is provided below. The Directors feel that the underlying figures provide a consistent measure of business performance year to year thereby facilitating comparison and understanding of the Group's financial performance across financial periods.

1. Overview

Acal is a specialist electronics group supplying niche electronics to industrial manufacturers and the healthcare sector. The Group operates a number of high quality businesses, which supply and create individual product solutions to meet specific customer needs. Acal is well positioned with an infrastructure to deliver a complementary range of specialist products and bespoke solutions across Europe as well as in Asia and Africa. The Acal Group's businesses comprise Acal BFi, Hectronic, MTC, Myrra, RSG, Stortech and Vertec of which Acal BFi is the largest. Approximately 70 per cent. of the Group's revenues are generated from major economies in Europe.

Acal has completed seven acquisitions in the last five years, more than trebling its specialist electronics revenues. These acquisitions have expanded both its design and manufacturing capabilities as well as its specialist distribution offering. These acquisitions have delivered a combined pre-tax return on investment of 24 per cent. (after including the costs of the integration) during the year ended 31 March 2014. This combined with the development of the organic performance and the disposal of the Supply Chain Division has led to an increase in underlying operating profits and underlying operating margin in this period from an underlying operating loss of £0.7 million (-0.4 per cent. margin) to an underlying operating profit of £7.1 million (3.4 per cent. margin) on a continuing basis.

Acal's strategy is to further enhance its leading position through organic growth and by acquiring complementary businesses which together create the opportunity for enhanced growth and/or the realisation of operational efficiencies.

On 2 June 2014 Shareholders voted to approve the disposal of the Enterprise Business to a company in which the management team is participating. The disposal represented the remaining business contained within its Supply Chain Division and reflects Acal's continued strategy of building a specialist electronics supplier to the industrial and medical sectors. The disposal completes the Company's program of non-core business disposals, following the disposal of its UK Parts Business and the European Parts Business in the year 2013.

In its 2014 Financial Results, for continuing operations, Acal reported underlying profit before taxation of £6.3 million for the year ended 31 March 2014 on revenues of £211.6 million on an ongoing basis. As at 31 March 2014, Acal had net assets of £48.5 million. As at 4 June 2014, Acal had a current market capitalisation of £108 million and a share price of £3.45.

2. Key Performance Indicators

The following table sets forth certain key performance indicators for the Acal Group for the years ended 31 March 2012, 2013 and 2014.

	For the year ended 31 March
	2012	2013	2014
	(in £ millions except percentages)
Sales growth (CER)	(3%)	(11%)	17%
Underlying operating profit(1)	6.8	5.5	7.1
Underlying profit before tax(1)	5.9	5.0	6.3
Underlying operating margin(1)	3.3%	3.1%	3.4%
Underlying diluted earnings per share(1)	16.9p	13.5p	16.2p
Working capital to sales	10.0%	10.1%	9.9%
Return on trading capital employed(2)	21.7%	24.0%	24.0%
Pre tax return on investment in acquisitions	26%	24%	24%
Free cash flow(3)	10.5	7.7	7.3
Free cash flow (% of underlying operating profit)(3)	154%	140%	103%

(1) 'Underlying operating profit', 'Underlying profit before tax' and 'Underlying diluted earnings per share' are non-IFRS financial measures used by the Directors to assess the underlying performance of the Group. These measures exclude exceptional costs, amortisation of acquired intangible assets, results from discontinued operations and the IAS19 pension charge relating to the Group's legacy defined benefit pension scheme.

(2) Return on trading capital employed is defined as underlying operating profit as a percentage of net operating assets. Net operating assets are defined as tangible and intangible assets (excluding goodwill and deferred tax) plus working capital.

(3) Free cash flow is defined as net cash flow before payment of exceptional items, payments to the legacy defined benefit pension fund, dividend payments, net proceeds from equity fund raising, the cost of acquisitions and the proceeds from disposals.

3. Results of operations

3.1. Selected Statutory Financial Information

The financial information in the table below setting forth the Group's results of continuing operations for the 2012, 2013 and 2014 Financial Years has been extracted without material adjustment from the Group's Historical Financial Information. For the 2012 Financial Year the financial information has been restated to exclude the results of the discontinued Supply Chain division. Please refer to paragraph 11 of this Part X for details.

		For the year ended 31 March
	2012	2013	2014
	(in £ millions)
Group revenue	207.1	177.4	211.6
Group operating profit Net finance costs	3.3 (1.2)	1.4 (0.7)	5.2 (1.0)
Profit before tax Tax	2.1 (0.3)	0.7 1.4	4.2 (0.5)
Profit from continuing operations	1.8	2.1	3.7
Profit/(loss) from discontinued operations	0.3	(4.0)	(2.4)

3.2. Underlying Financial Information

The following tables show a reconciliation of the Group's statutory results of continuing operations for the 2014, 2013 and 2012 Financial Years, as derived from the Group's Historical Financial Information, to the underlying results of operations for the periods indicated.

	Continuing operations statutory	Exceptional items	Amortisation of acquired intangibles	IAS 19 charge	Continuing operations underlying
			(In £ millions)
For the year ended 31 March 2014 Revenue	211.6	—	—	—	211.6
Operating profit Net finance cost	5.2 (1.0)	0.7 —	1.0 —	0.2 0.2	7.1 (0.8)
Profit before tax Tax	4.2 (0.5)	0.7 —	1.0 (0.3)	0.4 (0.1)	6.3 (0.9)
Profit after tax	3.7	0.7	0.7	0.3	5.4

	Continuing operations statutory	Exceptional items	Amortisation of acquired intangibles	IAS 19 charge	Continuing operations underlying
			(In £ millions)
For the year ended 31 March 2013
Revenue	177.4	—	—	—	177.4
Operating profit	1.4	3.1	0.7	0.3	5.5
Net finance cost	(0.7)	—	—	0.2	(0.5)
Profit before tax	0.7	3.1	0.7	0.5	5.0
Tax	1.4	(2.1)	(0.2)	(0.1)	(1.0)
Profit after tax	2.1	1.0	0.5	0.4	4.0

	Continuing operations statutory	Exceptional items	Amortisation of acquired intangibles	IAS 19 charge	Continuing operations underlying
			(In £ millions)
For the year ended 31 March 2012
Revenue	207.1	—	—	—	207.1
Operating profit	3.3	2.8	0.7	—	6.8
Net finance cost	(1.2)	—	—	0.3	(0.9)
Profit before tax	2.1	2.8	0.7	0.3	5.9
Tax	(0.3)	(0.3)	(0.2)	(0.1)	(0.9)
Profit after tax	1.8	2.5	0.5	0.2	5.0

3.3. Period to Period Discussion

The table below sets forth the sections of Acal's 2014 Financial Results, 2013 Annual Report and 2012 Annual Report which contain information in respect of Acal's operating and financial review that are incorporated by reference into, and form part of, this document.

The information in the 2013 Annual Report and the 2012 Annual Report is based on the results for the 2013 Financial Year and the 2012 Financial Year, before the restatement of those results for the classification of the Supply Chain Division as a discontinued business, as set out in the Group's 2014 Financial Results. The 2014 Financial Results show the impact of the restatement on both the 2014 Financial Year and the 2013 Financial Year and the management commentary for all three financial years provides a separate discussion of the performance of the Electronics Division, which since the disposal of the Enterprise Business is the only business within the Group. The restatement will only impact the Group's income statements and not its balance sheet or cash flow statement. The impact of the restatement on the 2012 Financial Year is set out at paragraph 11 of this Part X.

Reference document	Information in respect of Acal's operating and financial review	Page number in reference document
Acal 2014 Financial Results	* All of the information from the ''Operating Review'' section commencing on page 6.	6
	* All of the information from the ''Financial Review'' section commencing on page 16	16
Acal Annual Report 2013	* The following information from the ''Operating review'' section commencing on page 6:	6
	– the sub-section titled ''Divisional performance'';	7
	– the sub-section titled ''Operating performance'';	7
	– the sub-section titled ''Electronics Division'';	7
	– the sub-section titled ''Acquisition of Myrra Group'';	9
	– the sub-section titled ''Supply Chain Division''.	9
	* All of the information from the ''Financial review'' section commencing on page 18.	18
Acal Annual Report 2012	* All of the information from the ''Financial review'' section commencing on page 20.	20

4. Liquidity and Capital Resources

4.1. Management of liquidity risk

The Group manages its exposure to liquidity risk and ensures maximum flexibility in meeting changing business needs by managing the cash generation of its operations, combined with bank borrowings and access to long-term debt. In its funding strategy, the Group's objective is to maintain a balance between the continuity of funding and flexibility through the use of overdrafts, bank loans and facilities. Excess cash used in managing liquidity is placed on interest bearing deposit with approved counterparties, with maturities fixed at no more than three months.

At 31 March 2014, the Group had net cash of £1.8 million (excluding £0.5 million cash included in assets in disposal group classified as held for sale). The Group has an £8 million revolving capital facility (''RCF'') and total working capital facilities available of £30 million with a number of major UK and overseas banks of which approximately £24 million were committed facilities (including the RCF). The Group had drawn £16.3 million against total facilities at 31 March 2014. The committed facilities were taken out as a policy to decrease the Group's exposure to uncommitted and short term financing. The maturity of committed facilities ranges from December 2014 to March 2016. The facilities are subject to certain performance covenants, which on review at 31 March 2014 gave significant headroom.

The consolidated leverage of the Enlarged Group will be significantly higher than that of the Acal Group as of 31 March 2014.

As at 31 December 2013, Noratel's net debt outstanding (excluding unamortised debt costs) was NOK435 million. Acal intends to refinance all of this debt from the proceeds of the Rights Issue as well as funds drawn down from the Facility. As a result, following Completion the Company estimates the consolidated leverage of the Enlarged Group (on an assumed seasonally adjusted normalised basis) will be increased to approximately 1.6 times underlying EBITDA (based on pro forma profits for the 2014 Financial Year).

4.2. Capitalisation and Indebtedness Capitalisation

The table below sets out the capitalisation of the Acal Group as at 31 March 2014.

	As at 31 March 2014
Shareholders' equity(1)	(in £ millions)
Share capital	1.6
Share premium	40.7
Other reserves(2)	3.2
Total	45.5

⁽¹⁾ Shareholders' equity does not include the profit and loss account reserve.

⁽²⁾ Other reserves include a merger reserve and a currency translation reserve.

Indebtedness

The following tables set out the gross and net financial indebtedness of the Group as at 31 March 2014:

Gross indebtedness

	As at 31 March 2014
	(in £ millions)
Total current debt – Guaranteed	—
– Secured	—
– Unsecured (including overdrafts)	(6.8)
	(6.8)
Total non-current debt
– Guaranteed	—
– Secured	(7.8)
– Unsecured	(1.7)
	(9.5)
Total gross indebtedness	(16.3)
Net financial indebtedness

	As at 31 March 2014
Cash(1) Cash equivilents	(in £ millions) 18.1 —
Liquidity	18.1
Current bank debt Current portion of non current debt Other current financial debt	(0.1) — (6.7)
Current financial indebtedness	(6.8)
Net current financial indebtedness	11.3
Non-current bank loan Bonds issued Other non-current financial debt	(9.5) — —
Non-current financial indebtedness	(9.5)
Net financial indebtedness	1.8

(1) Excludes £0.5 million cash included within assets in disposal group classified as held for sale.

4.3. Borrowings

(a) Existing Facility Agreement

A description of the principal terms of the loan facility entered into by Acal with Clydesdale Bank on 5 March 2013 is set out in paragraph 13.6 (Material contracts of Acal) of Part XVII (''Additional Information'') of this document.

(b) The Facility

A description of the principal terms of the loan facility entered into by Acal with the Banks on 3 June 2014 is set out in paragraph 13.14 (''Material Contracts of Acal'') of Part XVII (''Additional Information'') of this document.

(c) Other debt arrangements

As at 31 March 2014, the Group has a number of local working capital facilities available totalling £30 million with a number of major UK and overseas banks of which £16 million were committed facilities. The maturity of committed facilities ranges from December 2014 to March 2016.

4.4. Working capital

See paragraph 17 of Part XVII (''Additional Information'') of this document.

5. Capital Expenditure

Capital expenditure in the year ended 31 March 2014 totalled £1.4 million (2013 and 2012: £1.3 million), mainly relating to an upgrade of the Group's ERP system, manufacturing capacity expansion and fixtures and fittings within the Group's warehousing and offices.

With the Acquisition, the Enlarged Group's capital expenditure is expected to increase by approximately £2 million per annum going forward.

6. Contractual Obligations and Commitments

The following table summarises the maturity profile of the Group's non-cancellable operating leases as at 31 March 2014.

		Payments due by period
	Total	Less than one year	1 to 5 years	More than five years
(in £ million)
Operating lease commitments	8.1	2.6	4.7	0.8

7. Contingent Liabilities

There are no contingent liabilities of the Group as at 31 March 2014. The 2014 Financial Results Announcement is incorporated by reference into this document as further described in Part XIII (''Historical Financial Information Relating to Acal'').

8. Critical Accounting Policies

See ''Critical accounting estimates and judgements'' in note 2 to the 2014 Financial Results incorporated by reference into this document. The 2014 Financial Results is incorporated by reference into this document as further described in Part XIII Section A (''Historical Financial Information Relating to Acal'').

9. Related Party Transactions

See paragraph 15 of Part XVII (''Additional Information'') and note 35 to the 2014 Financial Results, note 34 to the 2013 Annual Report and the 2012 Annual Report described therein (all of which are incorporated by reference), for information on related party transactions entered into by the Acal Group in the last three financial years.

10. Qualitative and Quantitative Disclosures about Market Risk

A description of key market risks to which the Group is exposed are set out in note 28 to the 2014 Financial Results, note 27 to the 2013 Annual Report and the 2012 Annual Report incorporated by reference into this document. The financial information is incorporated by reference into this document as further described in Part XIII Section A (''Historical Financial Information Relating to Acal'').

11. Restatement as a result of Discontinuation of Supply Chain Division

The impact of the restatement for the classification of the Supply Chain Division as a discontinued business on the results of the 2012 Financial Year are summarised below.

	Financial performance before restatement	Impact of restatement	Financial performance post restatement
		(In £ millions)
For the year ended 31 March 2012 Revenue	257.8	(50.7)	207.1
Operating profit Net finance cost	3.9 (1.2)	(0.6) —	3.3 (1.2)
Profit before tax Tax	2.7 (0.6)	(0.6) 0.3	2.1 (0.3)
Profit from continuing operations	2.1	(0.3)	1.8

PART XI

Operating and Financial Review of Noratel

1. Overview of the Noratel Group

Noratel is a global designer and manufacturer of electromagnetic products, specifically low, medium and high power transformers and chokes. Noratel has a broad base of customers in Europe, Asia and increasingly in North America, and has become a preferred supplier to leading international OEMs in various markets. It has a well-established position supplying the industrial, renewable energy, medical and oil and gas sectors.

With almost sixty years of experience in designing and manufacturing transformers, Noratel is an international group of 16 companies operating in 12 countries, with more than 2,300 employees of which approximately 75 per cent. are located at the production facilities in Asia.

2. Key drivers of performance and factors potentially affecting the future

For the financial year ended 31 December	2011	2012	2013
Revenue growth	1.1%	2.3%	6.9%
Underlying operating profit margin	7.7%	10.1%	10.2%
Underlying EBITDA margin	10.0%	12.4%	12.6%

Order book

At 31 December 2013 the order book of the Noratel Group was NOK204 million representing approximately 3 months of sales, compared to an order book of NOK183million at 31 December 2012. Rolling twelve month orders at the end of April 2014 were 1 per cent. lower at CER, compared to the prior year and sales were 2 per cent. higher at CER. On a reported basis revenues were 5 per cent. higher, with a significant pipeline of new projects both in the industrial, renewable energy and medical sectors, the Noratel Group is well positioned for further growth, as project releases come through and global economies continue to improve.

The general improvement in market conditions, pick up in industrial manufacturing activities and growth in the renewable energy and medical sectors presents significant growth opportunities for the Noratel Group. With a strong track record, custom design service, broad geographical presence and a low cost manufacturing base in Asia, the Noratel Group is well positioned to take advantage of these opportunities and grow further.

Business model

Much of the Noratel Group's strong performance can be explained by its ability to design and deliver consistently high quality, cost effective customer solutions. Key elements of achieving this include:

Product quality and manufacturing capacity

The Noratel Group has a well-functioning and efficient business model which allows it to meet its customers' requirements. The business model covers every step in the value chain from the initial design phase and series production to the final delivery and after sales service. The Noratel Group has more than 2,300 employees worldwide, with the majority engaged in the manufacturing process mostly in low-cost countries in Asia. The Noratel Group is well-known in many markets for its technical knowledge and innovation.

An experienced staff of more than 40 engineers is involved in product development and customisation, which forms an essential part of the Noratel Group's offering and is typically performed in close co-operation with the customer. Though the basic construction principle behind a transformer has changed little over the years, Noratel's customers continually demand smaller, more efficient and cheaper products. The engineers at Noratel represent an important step in the value chain in terms of ensuring a high quality product. The engineers are able to design, manufacture and test a broad range of products according to relevant standards and requirements with regard to safety, health and environment.

Approximately 70 per cent. of the Noratel Group's sales are customised, or modified standard products. The Noratel Group strives to deliver high-quality products and a professional after sales service to all its customers.

The Noratel Group has its own production facilities in Asia (Sri Lanka, India and China), in Europe (Norway, Sweden, Finland and Poland) and in the US. The Sri Lankan and Polish production facilities are the largest, with a site of approximately 8,000 square metres and over 1,200 employees in Sri Lanka and approximately 9,800 square metres and over 340 employees in Poland. The facility in China is in the process of being upgraded from a site of approximately 2,600 square metres to approximately 6,000 square metres. The majority of the production facilities are leased, however certain facilities in Europe (including the Poland facility) are owned by the Noratel Group.

Geographic platform

The Noratel Group is an international group with an extensive local reach. The Noratel Group emphasises the importance of building its customer relations functions and each local sales office is responsible for a detailed follow-up of each individual customer in its respective geographical markets.

Long term stable customers relationships

The Noratel Group has a broad customer base, stretching from the retail segment purchasing standardised transformers to large multinational customers ordering large volumes of customised products. This customer mix varies depending on segment and geography. At 31 December 2013 Noratel had approximately 2,500 customers. Noratel has had relationships with most of its customers for at least five years and in some cases up to twenty years.

Stable management with long term service

The Noratel Group has more than 2,300 employees worldwide, with approximately 75 per cent. engaged in the manufacturing process in low-cost countries in Asia, (Sri Lanka, India and China), 23 per cent. based in Europe and 2 per cent. based in the US.

Management have an average length of service of 16 years with the Noratel Group and are therefore highly experienced with a track record of growing the business.

The Noratel Group currently operates a defined benefit pension scheme for 70 of its employees in Norway. Noratel is in the process of converting this to a defined contribution scheme and it is expected that this will be completed in August 2014.

Other factors with the potential to affect the Noratel Group's operational performance

General macro-economic environment and trend for increased use of electronics in industrial applications

The Noratel Group is dependent on the general macro-economic environment and principally the levels of industrial output in the key geographies in which it operates. Its main customers are industrial OEMs in Europe and any change in the levels of demand for its customers' products will impact the Noratel's Group's level of activity.

There has been a developing trend for the increasing use of electronics in industrial applications as well as demand from Noratel's customers for smaller, more efficient and lower cost products. This trend has played to the Noratel Group's competitive advantage of being able to provide high quality, customised products. Were this trend to change then the Noratel Group may face increasing competition from standardised product manufacturers.

Project based revenue streams

The Noratel Group typically works with its customers on longer term projects which have a larger average order size and the potential for repeat orders. Given the larger average order size, financial performance in any period can be affected by the timing and phasing of the orders received.

Continued operations of the Noratel Group's production facilities

The Noratel Group is dependent on the continued operation of its production facilities. Any interruption in the operation of these facilities, including disruption arising from fire or natural disaster, could cause cancellations or delays in product shipments to the Noratel Group's customers and impact its operational performance.

The Noratel Group has not experienced any significant interruption in its production facilities over the last three years. Were any interruption to occur, the Noratel Group would have the potential capability (depending on the product line affected) to shift production to another operational facility as a short term measure to mitigate the impact of any such interruption.

Foreign Currency

The Noratel Group is exposed to currency fluctuations due to its operations taking place in many countries and with different base currencies. In order to reduce exposure to currency fluctuations the Noratel Group has a policy under which assets are primarily financed in the same currency in which they are entered in the accounts. Further, every effort is made to achieve a balance between income and costs in the same currency. Currency hedging is not undertaken but the Noratel Group makes every effort to avoid long-term contracts with customers when it is not possible to make adjustments for changes in currency exchange rates and the cost of raw materials.

3. Financial Review of Results and Operations

Underlying operating profit, underlying profit before tax and underlying EBITDA are supplemental measures of performance.

Underlying operating profit, underlying profit before tax and underlying EBITDA are not financial measures that are required by, or presented in accordance with, IFRS. For additional information on the use of non-IFRS financial measures, see paragraph 3 (Presentation of Financial Information) of ''Important Information'' in this document.

For the year ended 31 December	2011 NOKm	2012 NOKm	2013 NOKm
Revenue Cost of sales	726.0 (476.3)	742.5 (474.1)	793.9 (506.6)
Operating expenses (including exceptional items)	(200.0)	(194.6)	(213.4)
Operating profit Finance income Finance costs	49.7 1.0 (20.8)	73.8 3.6 (29.7)	73.9 3.7 (40.1)
Profit before tax	29.9	47.7	37.5
Tax expense	(6.0)	(10.2)	(8.5)
Profit for the year	23.9	37.5	29.0

Underlying Performance Measure	2011	2012	2013
	NOKm	NOKm	NOKm
Operating profit	49.7	73.8	73.9
Add back: Exceptional items	6.0	1.4	7.2
Underlying operating profit	55.7	75.2	81.1
Underlying operating profit margin	7.7%	10.1%	10.2%
Profit before tax	29.9	47.7	37.5
Add back: Exceptional items	6.0	1.4	7.2
Underlying profit before tax	35.9	49.1	44.7
Underlying operating profit	55.7	75.2	81.1
Add back: Depreciation and amortisation	17.0	16.9	19.2
Underlying EBITDA	72.7	92.1	100.3
Underlying EBITDA margin	10.0%	12.4%	12.6%

3.1. Year ended 31 December 2013 compared to year ended 31 December 2012

Group revenue

The Noratel Group's revenue increased by NOK51.4 million (6.9 per cent.), compared to the prior year. NOK18.2 million of this increase relates to impact of the NPE business acquired in the US. Other increases in revenue was mainly driven by increased demand in the shipping & offshore, medical and motor drives/automation segments being partially offset by a decline in the installation/wholesale segment.

The following table sets forth the Noratel Group's revenue according to geographical segment for the periods indicated.

			Variation
For the year ended 31 December	2013 NOKm	2012 NOKm	2013/2012 NOKm	2013/2012 %
Europe	635.4	620.3	15.1	2.4%
Asia	99.0	80.1	18.9	23.6%
North America	57.2	39.1	18.1	46.3%
Rest of the world	2.3	3.0	(0.7)	(23.3)%
Total	793.9	742.5	51.4	6.9%

Group underlying operating profit

The Noratel Group had a NOK5.9 million (7.8 per cent.) increase in group underlying operating profit compared to the prior year which was driven by the increase in revenue on stable gross margins. Operating expenses increased by 6 per cent. (excluding the impact of the acquisition of NPE), resulting from investment in staff and facilities to support growth in the business.

Exceptional costs

During 2013, the Noratel Group wrote off NOK7.2 million worth of specific inventory for a customer that no longer trades with the Noratel Group. This cost was recognised in cost of sales.

During 2012, the Noratel Group incurred costs of NOK1.4 million in relation to strategic initiatives which was treated as an exceptional cost.

Group operating profit

The Noratel Group had a NOK0.1 million (0.1 per cent.) increase in group operating profit compared to the prior year. The group operating profit was impacted by the exceptional costs described above.

Group underlying profit before tax

The Noratel Group had a NOK4.4 million (9.0 per cent.) decrease in group underlying profit before tax compared to the prior year. The decrease was primarily driven by a NOK10.3 million increase in net finance costs resulting mainly from foreign exchange losses on financial assets and liabilities (loss of NOK6.1 million in 2013 compared to a gain of NOK6.4 million in 2012).

3.2 Year ended 31 December 2012 compared to year ended 31 December 2011

The Noratel Group's revenue increased by NOK16.5 million (2.3 per cent.), compared to the prior year. The increase in revenue was mainly driven by increased demand in the renewable (solar and wind) segment.

The following table sets forth the Noratel Group's revenue according to geographical segment for the periods indicated.

			Variation
For the year ended 31 December	2012 NOKm	2011 NOKm	2012/2011 NOKm	2012/2011 %
Europe	620.3	585.9	34.4	5.9%
Asia	80.1	90.1	(10.0)	(11.1%)
North America	39.1	47.8	(8.7)	(18.2%)
Rest of the world	3.0	2.2	0.8	36.4%
Total	742.5	726.0	16.5	2.3%

Group underlying operating profit

The Noratel Group had a NOK19.5 million (35 per cent.) increase in group underlying operating profit compared to the prior year which was driven by:

• * a 2.3 per cent. increase in revenue;
• * 1.8 percentage point improvement in gross margin driven by product mix; and
• * a stable underlying cost base.

Exceptional costs

The Noratel Group incurred costs of NOK1.4 million in 2012 and NOK6.0 million in 2011 in relation to strategic initiatives which were treated as an exceptional cost.

Group operating profit

The Noratel Group had a NOK24.1 million (48.5 per cent.) increase in group operating profit compared to the prior year. The growth in group operating profit reflects the factors supporting the growth in underlying operating profit described above as well as the reduction in exceptional costs during the year ended 31 December 2012.

Group underlying profit before tax

The Noratel Group had a NOK13.2m (36.8 per cent.) increase in group underlying profit before tax compared to the prior year. The increase was primarily driven by an increase in revenue and gross margin and partially offset by a NOK6.3 million increase in net finance costs.

4. Capital and Indebtedness

4.1 Capitalisation

The table below sets out the capitalisation of the Noratel Group as at 31 December 2013.

	As at 31December 2013 NOKm
Shareholders' equity(1)
Share capital	0.3
Share premium	130.7
Currency translation reserve	5.4
Total	136.4

Note 1: Shareholders' equity does not include the profit and loss account reserve.

There has been no material change to the capitalisation of the Noratel Group since 31 December 2013.

4.2 Indebtedness

The following tables set out the gross and net financial indebtedness of the Noratel Group as at 31 March 2014:

Gross financial indebtedness

	As at 31 March 2014 (unaudited) NOKm
Total current debt
– Guaranteed – Secured – Unsecured	(0.7) (356.5) (84.4)
	(441.6)
Total non-current debt – Guaranteed – Secured(1) – Unsecured	(4.1) — —
	(4.1)
Total gross indebtedness	(445.7)

⁽¹⁾ Secured debt comprises bank loans, including accrued interest, unamortised debt issue costs and finance leases.

The term loan will be extinguished on Completion and Acal will enter into the Facility, the details of which can be found in paragraph 13.14 of Part XVII (''Additional Information''). All costs relating to the termination of the existing debt will be borne by the Sellers.

Unsecured debt at 31 March 2014 includes NOK63.4 million relating to a shareholder loan, which will be repaid to the Sellers on Completion.

The secured debt as at 31 March 2014 includes NOK357.7 million relating to an amortising term loan facility with final maturity in December 2014. The term loan is subject to leverage and interest cover covenants. There have been no breaches of covenants during the last three financial years.

Net financial indebtedness

	As at 31 March 2014 (Unaudited) NOKm
Cash Cash equivilents	31.2 —
Liquidity	31.2
Current bank debt Current portion of non current debt Other current financial debt(1)	(377.3) (0.6) (63.7)
Current financial indebtedness	(441.6)
Net current financial indebtedness	(410.4)
Non-current bank loan Bonds issued Other non-current financial debt(1)	(3.4) — (0.7)
Non-current financial indebtedness	(4.1)
Net financial indebtedness	(414.5)

(1) Other current and non-current financial debt includes shareholder loans and finance leases.

5. Liquidity and Cash Flow Review

During the periods under review, the Noratel Group financed its operations principally by using a combination of cash flows from operating activities and borrowings. The cash inflow from operating activities has been used to service debt obligations and fund capital expenditure.

For the year ended 31 December	2011 NOKm	2012 NOKm	2013 NOKm
Net cash flows from operating activities	54.0	109.2	101.6
Net cash used in investing activities	(25.0)	(29.8)	(23.7)
Net cash used in financing activities	(14.1)	(79.4)	(80.5)
Net increase/(decrease) in cash and cash equivalents	14.9	—	(2.6)
Cash and cash equivalents at 1 January	15.8	27.5	31.1
Effect of exchange rate fluctuations	(3.2)	3.6	(5.1)
Cash and cash equivalents at 31 December	27.5	31.1	23.4
Net debt	478.6	442.1	431.2
Leverage (Net debt/underlying EBITDA)	6.6	4.8	4.3

In 2013, Noratel generated net cash from operating activities of NOK101.6 million (2012: NOK109.2 million, 2011: NOK54.0 million). The difference between Noratel's net income and cash flow from operating activities is principally due to depreciation and amortisation expenses of NOK19.2 million (2012: NOK16.9 million, 2011: NOK17.0 million) and interest expense of NOK36.4 million (2012: NOK26.1 million, 2011: NOK19.8 million).

Short-term borrowings including the current portion of long term debt at 31 December 2013 were NOK389.0 million and long-term debt was NOK65.6 million inclusive of a NOK61.9 million shareholder loan, resulting in a net debt of NOK431.2 million.

The cash flows used of NOK23.7 million in respect of investing activities in 2013 (2012: NOK29.8 million, 2011: NOK25.0 million) were mainly due to investments in property and equipment (new production facilities and machinery) and routine replacement expenditure.

The cash flows used of NOK80.5 million in respect of financing activities in 2013 (2012: NOK79.4 million, 2011: NOK14.1 million) were mainly in relation to repayment of borrowings and interest on the Noratel Group's debt. During 2011 the Noratel Group refinanced its existing facilities due to investments in property and equipment (new production facilities and machinery) and routine replacement expenditure.

The level of net debt at 31 December 2013 was NOK431.2 million (2012: NOK442.1 million, 2011: NOK478.6 million) leading to a decrease in net debt to EBITDA ratio from 6.6 in 2011 to 4.3 in 2013. The decrease was mainly due to the 40% increase in EBITDA in the 3 year period ending 31 December 2013. There is no significant seasonality with respect to the Noratel Group's borrowing requirements.

6. Capital Expenditure

The following table sets forth the Noratel Group's capital expenditure cash outflow for the periods indicated.

For the year ended 31 December	2011	2012	2013
	NOKm	NOKm	NOKm
Tangible fixed assets	27.7	23.5	17.4
Intangible fixed assets	1.3	6.3	6.3
Total	29.0	29.8	23.7

The capital expenditure of the Noratel Group relates mainly to the purchase of plant and equipment, leasehold and building improvements primarily in relation to the Noratel Group's Sri Lankan and Polish facilities.

In the current financial year, the Noratel Group is expanding its Chinese production facility as well as investing in its Sri Lankan facility, but expects full year capital expenditure to be broadly in line with historical periods.

7. Operating lease commitments

The Noratel Group leases various buildings, vehicles and equipment under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights.

Future minimum rentals payable under non-cancellable operating leases are as follows:

	2011	2012	2013
	NOKm	NOKm	NOKm
Due after one year but not more than six years	12.6	11.4	13.4

8. Contingent liabilities

There were no material contingent liabilities at 31 December 2013.

9. Critical Accounting Policies

See ''Accounting policies'' in note 2 to the Noratel Group's Historical Financial Information which can be found in Part XIII Section B (''Historical Financial Information Relating to the Noratel Group'') for information on the Noratel Group's critical accounting policies.

PART XII

Directors, Senior Management and Corporate Governance

1. Directors and Senior Management

1.1. The Board

The Board comprises four Non-Executive Directors (including the Chairman) and two Executive Directors. Their names and positions are as follows:

Director	Position
Richard James Moon	Non-Executive Chairman
Nicholas John Jefferies	Group Chief Executive
Simon Mark Gibbins	Group Finance Director
Graham John Williams	Senior Non-Executive Director
Richard John Brooman	Non-Executive Director
Henrietta Elizabeth Marsh	Non-Executive Director

There are no family relationships between any members of the Board or any member of the Senior Management.

The usual business address of all the Directors is Acal plc, 2 Chancellor Court, Occam Road, Surrey Research Park, Guildford, Surrey GU2 7AH.

Brief biographical details of the Directors are as follows:

Richard James Moon, Non-Executive Chairman, Chairman of the Nomination Committee and member of the Remuneration Committee

Richard Moon joined the Board in September 2004 and became Chairman in April 2005. Formally a Director of Racal Electronics plc and Chief Executive of Thales plc, he is Non-Executive Chairman of Seven Technologies Holdings Limited and is Chairman of Synergie Business Limited.

In addition to his directorship at Acal and any directorships of Group companies, Richard Moon holds or has held the following directorships and is or has been a member of the following partnerships, in the last five years:

Company	Position	Still held?
Seven Technologies Holdings Limited	Chairman	Yes
St Michael's House (Lyme Regis) Management Limited	Director	Yes
Synergie Business Limited	Director	Yes
Synergie Global Limited	Director	Yes
Synvest Limited	Director	Yes
Kylmar (Holdings) Limited	Director	No
OBS Medical Limited	Director	No
Planit Holdings Limited	Director	No
Software Radio Technology PLC	Director	No
T+ Medical Holdings Limited	Director	No
T+ Medical Limited	Director	No
Velocity Acquisitions Limited	Director	No
Velocity Holdings Corporate Trustee Limited	Director	No
Velocity Holdings Limited	Director	No
Velocity Investco Limited	Director	No

Nicholas John Jefferies, Group Chief Executive, Chairman of the Group Executive Committee and member of the Nomination Committee

Nicholas Jefferies joined Acal as Group Chief Executive in January 2009. Formerly General Manager for Electronics at Electrocomponents plc, and having previously held senior positions at Arrow Electronics plc, he started his career training as an Electronics Design Engineer with RACAL Defence (now part of Thales plc).

In addition to his directorship at Acal and any directorships of Group companies, Nicholas holds or has held the following directorships and is or has been a member of the following partnerships, in the last five years:

Company	Position	Still held?
Scope 4 Developments Limited	Director	Yes

Simon Mark Gibbins ACA, Group Finance Director and member of the Group Executive Committee

Simon Gibbins was appointed as Group Finance Director in July 2010. A Chartered Accountant, Simon was previously Global Head of Finance and Deputy CFO at Shire plc. Prior to joining Shire in 2000, he spent six years with ICI plc in various senior finance roles, both in the UK and overseas. Simon's earlier career was spent with Coopers & Lybrand in London.

In addition to his directorship at Acal and any directorships of Group companies, Simon holds or has held the following directorships and is or has been a member of the following partnerships, in the last five years:

Company	Position	Still held?
Pancreatic Cancer UK	Trustee	Yes

Graham John Williams MBA CA, Senior Non-Executive Director, Chairman of the Remuneration Committee and member of the Audit Committee and Nomination Committee

Graham Williams was appointed to the Board in December 2003. A Chartered Accountant, Graham's early business experience was gained in private equity with Charterhouse and Barclays Private Equity, both in the UK and France. Graham was a board member of Hays plc for 19 years and now serves on their pension fund's investment committee.

In addition to his directorship at Acal and any directorships of Group companies, Graham Williams holds or has held the following directorships and is or has been a member of the following partnerships, in the last five years:

Company	Position	Still held?
Boorsgreen Farm Limited	Director	Yes
Hawthorns Educational Trust Limited (The)	Director	Yes
Hawthorns (Pendell Court) Limited (The)	Director	Yes
Community Foundation for Surrey	Trustee	Yes
Cranleigh Foundation	Trustee	Yes
Royal Alexandra and Albert School	Trustee	Yes
The Gatton Park Tennis Centre	Director	No
Provenplan Limited	Director	No

Richard John Brooman, Non-Executive Director, Chairman of the Audit Committee and a member of the Remuneration Committee

Richard Brooman, a Chartered Accountant, became a Non-Executive Director of Acal in January 2013. He is also a Non-Executive Director and Chairman of the Audit Committees, at Hg Capital Trust plc and Invesco Perpetual UK Smaller Companies Investment Trust plc. Richard is a Director or Trustee of several businesses and charities. During his executive career he was Group Finance Director of Sherwood International Plc and VCI Plc.

In addition to his directorship at Acal and any directorships of Group companies, Richard holds or has held the following directorships and is or has been a member of the following partnerships, in the last five years:

Company	Position	Still held?
Berry Starquest Limited	Director	Yes
HG Capital Trust PLC	Director	Yes
Incrementum Limited	Director	Yes
Invesco Perpetual UK Smaller Companies
Investment Trust PLC	Director	Yes
Leonard Cheshire Disability	Director	Yes
Merchant Taylors' School	Director	Yes
British Youth Opera	Director	Yes
SVM UK Active Fund PLC	Director	No

Henrietta Elizabeth Marsh, Non-Executive Director and member of the Remuneration Committee

Henrietta Marsh was appointed a Non-Executive Director of Acal in May 2013. Henrietta is also a Non-Executive Director of Dods (Group) Plc, where she chairs the Remuneration Committee, a Non-Executive Director of Electric Word plc, an Operating Partner of ISIS Equity Partners (''ISIS'') and a member of the London Stock Exchange's AIM Advisory Group. Previously, Henrietta was a Fund Manager at ISIS and a Director of 3i plc.

In addition to her directorship at Acal and any directorships of Group Companies, Henrietta holds or has held the following directorships and is or has been a member of the following partnerships, in the last five years:

Company	Position	Still held?
Dods (Group) PLC	Director	Yes
Henrietta Marsh Consulting Limited	Director	Yes
Electric Word plc	Director	Yes

1.2. Senior Management

The following persons are considered relevant to establishing the Company with the appropriate expertise and experience for the management of the Company's business:

Martin Pangels

Group Strategy and Development Director

Martin is Group Strategy and Development Director. Martin joined Acal in July 2010 after working as an advisor to the business. Prior to joining Acal, Martin spent 9 years at Electrocomponents plc, where he was Regional General Manager for Europe, and 6 years with Bain & Company as a strategy consultant.

Paul Webster

Group Product Management and Operations Director

Paul joined Acal in June 2010 as Managing Director, Acal BFi UK. Paul has many years' experience in senior management roles, including Head of Product Management for Electronics globally at Electrocomponents plc. Paul began his career as a design engineer for Plessey Avionics (now part of BAE Systems).

Paul Neville ACA

Group Commercial Director

Paul was appointed Group Commercial Director in March 2009. A Chartered Accountant, Paul has many years experience of working in senior management positions for listed public companies, including Wincanton plc and Uniq plc. Prior to joining Acal, Paul was Group Chief Executive of an AIM listed software development company.

Gary Shillinglaw FCIS Group Company Secretary

Gary joined Acal as Group Company Secretary in August 2008. Gary is a qualified Chartered Secretary and has previously held the position of Group Company Secretary in a number of listed and non-listed public companies, including Countryside Properties plc, B&Q plc and First Leisure Corporation plc.

2. Corporate governance

2.1. Corporate Governance Code

The Corporate Governance Code recommends that at least half the members of the board of directors (excluding the Chairman) of a public limited company incorporated in the United Kingdom should be independent in character and judgment and free from relationships or circumstances which are likely to affect, or could appear to affect, their judgment.

Currently, the Board is comprised of six members, consisting of the Non-Executive Chairman, two Executive Directors and three Non-Executive Directors, all of whom are independent. Richard Moon and Graham Williams have served on the Board for more than nine years and accordingly are not deemed independent under the UK Corporate Governance Code. The Board, though, is of the view that their objectivity and willingness to challenge management have not been compromised in any way by their tenure on the Board and that they therefore remain independent.

The Board is responsible for the strategy, effective control and management of the Group. There is a formal schedule of matters specifically reserved for Board approval, which includes the determination of the Group's overall strategy, the approval of financial statements, dividends, significant accounting policies, annual operating plans, financial matters, major capital expenditure and any litigation of a material nature. The Non-Executive Directors challenge management proposals where appropriate and monitor management performance and reporting throughout the year.

The Board is firmly committed to high standards of corporate governance. The Company complies with all the provisions of the Corporate Governance Code set out in section 1 of Corporate Governance Code and for which the Board is accountable to shareholders.

The Board has established Audit, Remuneration and Nomination Committees which operate within defined terms of reference, which are available on request and are on the Company's website (www.acalplc.com).

2.2. Board Committees

(a) Executive Committee

The Group Chief Executive is supported by the Group Executive Committee, which has delegated authority to approve certain defined and routine matters between Board meetings. The committee consists of two Executive Directors in Nicholas Jefferies and Simon Gibbins, as well as Gary Shillinglaw (Group Company Secretary), Paul Neville (Group Commercial Director), Martin Pangels (Group Strategy and Development Director), and Paul Webster (Group Product Management and Operations Director).

(b) Audit Committee

The Audit Committee comprises Richard Brooman (Chairman), Graham Williams and Henrietta Marsh. All members have recent and relevant financial experience, and both Graham Williams and Richard Brooman are Chartered Accountants. The Group Finance Director also attends meetings of the Audit Committee, although no Executive Director has a right of attendance.

The Audit Committee is responsible for reviewing the scope and results of the audit, the accounting policies and systems of internal control of the Group, as well as the effectiveness and cost-efficiency of the audit. In addition, it considers and monitors the independence and objectivity of the auditors as well as the extent of any non-audit services provided by the auditors and the need or otherwise for an internal audit function. The interim statement, the preliminary announcement of results and the annual financial statements are considered by the Audit Committee prior to their approval by the Board. The Chairman of the Audit Committee maintains direct communication with the external auditors, independently of the management of the Company.

Part of at least one Audit Committee meeting a year is held with only representatives from the external auditors present, providing an opportunity for any concerns to be raised without executive management present.

The Chairman of the Audit Committee reports to the Board on any significant matters arising from the activities of the Committee.

Tax advice is provided by KPMG LLP.

The Audit Committee has written terms of reference which are available on request and are on the Company's website at www.acalplc.co.uk.

(c) Nomination Committee

The Nomination Committee is comprised of Richard Moon (Chairman), Graham Williams and Nicholas Jefferies.

The Nomination Committee is responsible for making recommendations on new appointments to the Board and for ensuring that the process for all appointments is formal, rigorous and transparent. Further, it leads the process for ensuring that an appropriate balance of skills is retained on the Board and that appropriate succession planning is in place.

Before any appointment to the Board is considered, a job specification is prepared and agreed by the Nomination Committee. Unless the appointment is as an Executive Director for which a suitable candidate is available from within the Group, appropriate executive search or other organisations with databases of candidates are consulted before a short-list of suitable candidates is produced for agreement by the Nomination Committee. Candidates meet all members of the Nomination Committee which then makes recommendations to the Board. All members of the Board would usually meet with the relevant candidate before an appointment is finally made.

The Nomination Committee has written terms of reference which are available on request and are on the Company's website at www.acalplc.co.uk.

(d) Remuneration Committees

The Remuneration Committee consists of Graham Williams (Chairman), Richard Moon, Richard Brooman, and Henrietta Marsh.

The Remuneration Committee determines the remuneration of Executive Directors on behalf of the Board and monitors the level and structure of senior management remuneration, while taking into account pay and employment conditions elsewhere in the Group. The remuneration of Executive Directors centres on ensuring that packages are sufficiently competitive in both fixed and variable terms to attract, retain and motivate senior management of the right calibre. The incentive structure for senior management does not raise environmental, social or governance risks by inadvertently motivating irresponsible behaviour.

The Remuneration Committee takes advice from external consultants as and when it is deemed necessary. MM&K Limited currently provide this service. It is the Committee's policy that any consultants that are used do not provide other services to the Group.

The remuneration of the Non-Executive Directors is determined on behalf of the Board by the Non-Executive Directors' Remuneration Committee (comprised solely of the Executive Directors).

The Remuneration Committee has written terms of reference which are available on request and are on the Company's website at www.acalplc.co.uk.

PART XIII

Historical Financial Information

Section A Historical Financial Information relating to Acal

The following documents, all of which have been filed with the National Storage Mechanism or announced through a Regulatory Information Service, are incorporated in full into this document by reference:

• (a) The audited consolidated financial statements of Acal plc included in the 2013 Annual Report and the 2012 Annual Report, together with the audit reports thereon; and
• (b) Acal's 2014 audited accounts, comprising Acal's audited consolidated financial statements for the year ended 31 March 2014, under IFRS together with relevant notes. The independent auditors' report in respect of the Group is on page 35 and in respect of the Company is on page 104, the consolidated balance sheet as at 31 March 2014 is on page 60, the consolidated income statement for the financial year ended 31 March 2014 is on page 59, the consolidated statement of changes in Shareholders' equity is on page 61, the consolidated cash flow statement is on page 62 and the explanatory notes to the Group financial statements are on pages 63.

Acal will provide without charge to each person to whom a copy of this document has been delivered, upon the written or oral request of such person, a copy of any documents incorporated by reference in this document, except that exhibits to such documents will not be provided unless they are specifically incorporated by reference into this document. Requests for copies of any such documents should be directed to:

Acal plc, 2 Chancellor Court, Ocean Road, Surrey Research Park, Guildford, Surrey GU2 7AH

Att: Gary Shillinglaw Company Secretary

Telephone: +44 (0) 1483 544500

Section B Historical Financial Information relating to the Noratel Group

PART A

Consolidated income statements

	For the year ended 31 December
2011 NOKm	2012 NOKm	2013 NOKm
726.0 (476.3)	742.5 (474.1)	793.9 (506.6)
(200.0)	(194.6)	(213.4)
49.7 1.0	73.8 3.6	73.9 3.7
(20.8)	(29.7)	(40.1)
29.9	47.7	37.5
(6.0)	(10.2)	(8.5)
23.9	37.5	29.0
notes 4 6 8 9

The results for the current and prior periods relate solely to continuing operations.

Consolidated statement of comprehensive income

			For the year ended 31 December
	notes	2011 NOKm	2012 NOKm	2013 NOKm
Profit for the year		23.9	37.5	29.0
Items that will never be reclassified to profit or loss:
Actuarial loss on defined benefit pension scheme Deferred tax relating to defined benefit pension		(3.7)	(4.3)	(4.4)
scheme		1.0	(0.7)	1.1
Items that may be reclassified subsequently to profit or loss:
Exchange differences on retranslation of foreign
subsidiaries		—	(8.3)	17.5
Other comprehensive (loss)/profit for the year net of tax		(2.7)	(13.3)	14.2
Total comprehensive profit for the year net of tax		21.2	24.2	43.2

Consolidated statement of financial positions

			As at 31 December
	notes	2011 NOKm	2012 NOKm	2013 NOKm
Non-current assets
Property, plant and equipment	10	96.9	95.9	108.0
Goodwill	11	348.1	351.6	351.8
Other intangible assets		6.5	7.7	12.5
Financial assets		0.2	1.1	2.5
Deferred tax assets		5.3	2.5	2.0
		457.0	458.8	476.8
Current assets
Inventories	12	201.3	177.5	177.4
Trade and other receivables	13	143.4	134.8	137.4
Cash and cash equivalents	14	27.5	31.1	23.4
		372.2	343.4	338.2
Total assets		829.2	802.2	815.0
Current liabilities
Trade and other payables	25	(120.8)	(106.3)	(101.0)
Other financial liabilities	15	(75.8)	(68.0)	(389.0)
Current tax liabilities	15	(6.7)	(9.4)	(7.4)
		(203.3)	(183.7)	(497.4)
Non-current liabilities
Other financial liabilities	15	(430.3)	(405.2)	(65.6)
Pension		(7.3)	(4.7)	(8.5)
Deferred tax liabilities		(16.7)	(12.8)	(8.6)
Provisions	18	(5.8)	(5.8)	(8.0)
		(460.1)	(428.5)	(90.7)
Total liabilities		(663.4)	(612.2)	(588.1)
Net assets		165.8	190.0	226.9
Equity
Share capital	26	0.3	0.3	0.3
Share premium		137.0	137.0	130.7
Currency translation reserve		(3.8)	(12.1)	5.4
Retained earnings		32.3	64.8	90.5
Total equity		165.8	190.0	226.9

Consolidated statement of changes in equity

	Equity attributable to equity holders of Noratel
	Share capital	Share premium	Currency translation reserve	Retained earnings	Total
	NOKm	NOKm	NOKm	NOKm	NOKm
At 1 January 2011	0.3	137.0	(3.8)	11.1	144.6
Profit for the year	—	—	—	23.9	23.9
Other comprehensive income	—	—	—	(2.7)	(2.7)
At 31 December 2011	0.3	137.0	(3.8)	32.3	165.8
Profit for the year	—	—	—	37.5	37.5
Other comprehensive income	—	—	(8.3)	(5.0)	(13.3)
At 31 December 2012	0.3	137.0	(12.1)	64.8	190.0
Profit for the year	—	—	—	29.0	29.0
Share repurchase	—	(6.3)	—	—	(6.3)
Other comprehensive income	—	—	17.5	(3.3)	14.2
At 31 December 2013	0.3	130.7	5.4	90.5	226.9

Consolidated statement of cash flows

	For the year ended 31 December
notes	2011 NOKm	2012 NOKm	2013 NOKm
Net cash flows from operating activities 17 Cash flows from investing activities	54.0	109.2	101.6
Purchases of property, plant and equipment	(27.7)	(23.5)	(17.4)
Disposal of property, plant and equipment	4.0	—	—
Purchases of intangible assets	(1.3)	(6.3)	(6.3)
Net cash used in investing activities	(25.0)	(29.8)	(23.7)
Cash flows from financing activities
Increase/(decrease) in borrowings	2.5	(46.9)	(50.1)
Net interest cash flow	(16.6)	(32.5)	(30.4)
Net cash used in financing activities	(14.1)	(79.4)	(80.5)
Net increase in cash and cash equivalents	14.9	—	(2.6)
Cash and cash equivalents at 1 January	15.8	27.5	31.1
Effect of exchange rate fluctuations	(3.2)	3.6	(5.1)
Cash and cash equivalents at 31 December	27.5	31.1	23.4

Section B Notes to the financial information

1. Basis of preparation

The historical financial information has been prepared specifically for the purpose of the combined circular and prospectus and is prepared:

• * In accordance with the requirements of the Listing Rules;
• * In accordance with IFRS as adopted for use in the European Union (IFRSs).

IFRS have been applied for the first time to this financial information with a transition date of 1 January 2010 as set out below. The financial information has been prepared on the historical cost basis and presented in Norwegian Kroner (NOK) with all values are rounded to the nearest 0.1m except when otherwise indicated.

The companies covered by the historical financial information are:

Business	Country of incorporation
Trafo Holding AS (Parent Company)	Norway
Noratel Holding AS	Norway
Noratel AS	Norway
Noratel Sweden AB	Sweden
Noratel Finland Oy	Finland
Noratel Denmark A/S	Denmark
Danselbud N.T.Sp.z.o.o	Poland
Noratel Netherlands	Netherlands
Noratel Germany AG	Germany
Noratel Sp. zo.o.	Poland
Noratel UK Ltd.	UK
Noratel Spain S.L.	Spain
Noratel Power Components Pvt Ltd	India
Noratel Lanka (pvt) Ltd.	Sri Lanka
Noratel International (pvt) Ltd.	Sri Lanka
Toroid Asia (pvt) Ltd.	Sri Lanka
Foshan Noratel China	China
Zhuhai Noratel Electric Ltd	China
Noratel North America Inc.	US
Noratel Power Engineering Inc	US

The combined financial information has been prepared for the three years ended 31 December 2013.

The financial statements have been prepared on a going concern basis.

2. Accounting policies

The accounting policies used in preparing the historical financial information for each of the periods presented are set out below. These accounting policies have been applied consistently to all the periods presented unless otherwise stated and are consistent with those applied by Acal in preparing its consolidated financial information for the year ended 31 March 2014.

Transition to IFRS

The annual financial statements of the Noratel Group were prepared under Norwegian GAAP. In preparing this historical information under IFRS, the Directors of Acal have applied the rules for first-time adoption of IFRS which are set out in IFRS 1 – First-time Adoption of International Financial Reporting Standards, with a transition date of 1 January 2011. The rules allow certain exemptions in the application of particular standards to prior periods in order to assist companies with the transition to IFRS. The Directors of Acal have applied the following exemptions:

• * Cumulative translation differences for foreign operations have been deemed to be zero at the date of transition;
• * IFRS 3 is applied as from 1 January 2011 and not retrospectively to past business combinations.

Basis of consolidation

The Noratel Group's financial statements consolidate the financial statements of Noratel, entities controlled by Noratel (its subsidiaries) and include the Noratel Group's share of the results of associates.

The Noratel Group was headed by Noratel Holding AS until 31 August 2011 on which date Trafo Holding AS became the ultimate parent company of the group in a transaction which saw no change of controlling party. As IFRS do not include standards for accounting for common control transactions, the Directors of Acal have applied the principles of UK GAAP for merger accounting in this historical financial information in relation to the insertion of Trafo Holding AS at the top of the group. Under merger accounting, the results, changes in shareholders' equity and cash flows for the year ended 31 December 2011 are presented as if Trafo Holding AS had been the ultimate parent company from 1 January 2011. In selecting this approach, the Directors of Acal took into account the requirement to present the historical financial information in an easily analysable and comprehensible form.

Subsidiaries and associates

Subsidiaries are consolidated from the date of their acquisition, being the date on which the Noratel Group obtains control, and continue to be consolidated until the date such control ceases. Control comprises the power to govern the financial and operating policies of the investee so as to obtain benefit from its activities. The existence and effect of potential voting rights that are presently exercisable or presently convertible are considered when assessing whether the Noratel Group controls another entity. All intra-Noratel Group transactions, balances, income and expenses are eliminated on consolidation.

Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. The choice of measurement of non-controlling interest, either at fair value or at the proportionate share of the acquiree's identifiable net assets is determined on a transaction by transaction basis. Acquisition costs incurred are expensed and included in operating expenses.

When the group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions at the acquisition date.

Goodwill is initially measured at cost being the excess of the aggregate of the acquisition-date fair value of the consideration transferred and the amount recognised for the non-controlling interest (and where the business combination is achieved in stages, the acquisition-date fair value of the acquirer's previously held equity interest in the acquiree) over the net identifiable amounts of the assets acquired and the liabilities assumed in exchange for the business combination.

If the aggregate of the acquisition-date fair value of the consideration transferred and the amount recognised for the non-controlling interest (and where the business combination is achieved in stages, the acquisition-date fair value of the acquirer's previously held equity interest in the acquiree) is lower than the fair value of the assets, liabilities and contingent liabilities and the fair value of any pre-existing interest held in the business acquired, the difference is recognised in the income statement.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the group's cash-generating units (or groups of cash generating units) that are expected to benefit from the business combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Each unit or group of units to which goodwill is allocated shall represent the lowest level within the entity at which the goodwill is monitored for internal management purposes and not be larger than an operating segment before aggregation.

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.

Intangible assets – other

All intangible assets, excluding goodwill arising on a business combination, are stated at their amortised cost or fair value less any provision for impairment.

Exceptional items

The Noratel Group discloses as exceptional items those items which are exceptional by virtue of their size or incidence so as to allow a better understanding of the underlying trading performance of the Noratel Group.

Property, plant and equipment

Property, plant and equipment assets are carried at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is provided to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows:

Land No depreciation Freehold buildings 25-50 years Plant and Machinery 10-15 years straight line Fixtures and Fittings 10 years Motor Vehicles 7 year straight line

Leasehold improvements Shorter of life of lease and useful economic life Office equipment 3-10 years straight line

Impairment of assets

At each balance sheet date, the Noratel Group reviews the carrying value of its assets to determine whether there is any indication that the assets have suffered an impairment loss. If any such indication exists, or when annual testing for an asset is required, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any.

Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, an impairment loss is reversed to the extent that the asset's carrying value does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Such reversals are recognised in the income statement.

Financial assets

Loans and receivables are non-derivative financial assets with fixed or determinable payments. They are included in current assets, except for those with maturities greater than twelve months after the balance sheet date which are classified as non-current assets. Loans and receivables are included in trade and other receivables in the balance sheet.

Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is calculated using the FIFO method. In the case of manufactured inventories and work in progress, cost includes direct labour and an allocation of indirect overheads based on normal operating activity. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. No element of profit is include in the valuation of work in progress.

Trade and other receivables

Trade receivables are recognised and carried at original invoice amount less an allowance for any uncollectable amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. The decision to make a provision for doubtful debts is determined by using profiles, based on past practice in addition to assessment of the credit worthiness of each customer and related aging of over due balances. Bad debts are written off when identified.

Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and shortterm deposits with an original maturity of three months or less. For the purposes of the consolidated cash flow statement, cash and cash equivalents comprise cash and cash equivalents as defined above, net of outstanding bank overdrafts to the extent that offsetting agreements are in place.

Borrowings

Borrowings are initially recognised at fair value net of any associated issue costs. Borrowings are subsequently recorded at amortised cost, with any difference between the amount initially recorded and the redemption value recognised in the income statement as Finance Expense using the effective interest rate method.

Provisions

A provision is recognised when the Noratel Group has a present legal or constructive obligation as a result of a past event; it is probable that an outflow of resources will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation. In relation to provision for onerous contracts an assessment is made for impairment of any related assets.

Provisions are discounted to present value where the effect is material using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the liability. The amortisation of the discount is recognised as a finance cost.

Foreign currency translation

Transactions denominated in foreign currencies are translated at the foreign exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into NOK at the exchange rates ruling at the balance sheet date. Foreign exchange differences arising on translation are recognised in the income statement.

On consolidation, the balance sheets of foreign entities are translated into NOK at the rate of exchange ruling at the balance sheet date. Income statements and cash flows of foreign entities are translated into NOK at the average exchange rate for the period.

Revenue recognition

Revenue represents the invoiced value of goods, commission and other services provided to third parties, after deducting discounts, VAT and similar taxes levied overseas. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Noratel Group and the revenue can be reliably measured. In particular:

• * Revenue from the sale of products is recognised upon transfer to the customer of the significant risks and rewards of ownership. This is generally when goods are dispatched to customers.
• * Interest income is recognised as the interest accrues using the effective interest method.

Segment reporting

A business segment is a group of assets and operations engaged in providing products or services that are subject to different risks and rewards from those of other business segments. The Noratel Group has one operating segment being transformers.

A geographical segment comprises a segment engaged in providing products or services within a particular economic environment that are subject to different risks and rewards from those operating in other economic environments. Geographical segments comprise Europe, Asia and Rest of the World.

In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of the customers. Segment assets are based on the geographical location of the assets.

Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets of the Noratel Group at their fair value or, if lower, at the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligations so as to achieve a constant rate of interest on the remaining balance of the liability.

Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.

Pensions

Payments to defined contribution schemes are charged as an expense in the income statement as they fall due.

In respect of the defined benefit pension scheme in Norway, the obligation recognised in the consolidated statement of financial position represents the present value of the defined benefit obligation as adjusted for any unrecognised past service cost, reduced by the fair value of the scheme assets. The cost of providing benefits is determined using the projected unit credit actuarial valuation method. Actuarial gains and losses are recognised in full in the period in which they occur in the statement of comprehensive income.

Taxation

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted by the balance sheet date.

Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements, with the following exceptions:

• * where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss;
• * in respect of taxable temporary differences associated with investments in subsidiaries and associates, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future; and
• * deferred tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carried forward tax credits or tax losses can be utilised.

Deferred tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

Income tax is charged or credited directly to equity if it relates to items that are credited or charged to equity, otherwise income tax is recognised in the income statement.

Derivative financial instruments

The Noratel Group principally uses interest rate swaps to hedge risks associated with interest cost of borrowings.

Interest rate swaps on borrowings are initially recognised at fair value on the date on which a contract is entered into and where material are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.

Any gains or losses arising from changes in the fair value of the interest rate swaps are recorded in the income statement.

Significant accounting judgements and estimates

Key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The most significant areas in which assumptions are made and estimates used are in determining:

• * In the course of normal trading activities, judgement is used to establish the net realisable value of various elements of working capital, principally inventory and trade receivables. Provisions are made against obsolete or slow-moving inventories, bad or doubtful debts.
• * The provisions are based on the facts available at the time the financial statements are approved and are also determined by using profiles, based on past practice, applied to certain aged inventory and trade receivables categories.

Taxation

The Noratel Group operates in a number of tax jurisdictions around the world. Tax regulations generally are complex and in some jurisdictions agreeing tax liabilities with local tax authorities can take several years. Consequently, at the balance sheet date tax liabilities and assets are based on management's best estimate of the future amounts that will be settled. While the Noratel Group aims to ensure that the estimates recorded are accurate, the actual amounts could be different from those expected.

The quantification of provisions

Judgement is used in determining the value of provisions carried. Provisions are estimated based on factors such as historical experience and expectations of future events that management believe to be reasonable

3. New accounting standard and financial reporting requirements

New standards and interpretations not applied

The following standards and interpretations, which have been issued by the IASB and are relevant for the Noratel Group, become effective after the current year end and have not been early adopted in this historical financial information:

International Accounting Standards (IAS/IFRS/IFRIC)		Effective date
IFRS 10	IFRS 10 Consolidated Financial Statements	1 January 2014
IFRS 11	Joint arrangements	1 January 2014
IFRS 12	Disclosure of Interests in Other Entities	1 January 2014
IAS 28(R)	Investments in Associates and Joint Ventures	1 January 2014
IAS 27(R)	Separate financial statements	1 January 2014
IAS 32	Amendment – offsetting of financial assets and financial liabilities	1 January 2014
IFRS 9	Financial Instruments: Classification and Measurement	1 January 2015

It is not anticipated that the adoption of these standards and interpretations will have a material impact on the Noratel Group's financial statements in the period of initial application.

4. Operating segment information

Geographical information

The Noratel Group's revenue from external customers and information about its segment assets (non current assets) by geographical location are detailed below:

	Revenue from external customers			Non current assets (excluding goodwill)
	2011	2012	2013	2011	2012	2013
	NOKm	NOKm	NOKm	NOKm	NOKm	NOKm
Europe	585.9	620.3	635.4	62.7	68.9	86.7
Rest of the World	140.1	122.2	158.5	46.2	38.3	38.3
	726.0	742.5	793.9	108.9	107.2	125.0

5. Exceptional items

	2011 NOKm	2012 NOKm	2013 NOKm
Operating expenses: Transaction costs Inventory write off	6.0 —	1.4 —	— 7.2
Net operating exceptional costs	6.0	1.4	7.2

6. Operating profit

Amounts charged to the income statement are as follows:

	2011 NOKm	2012 NOKm	2013 NOKm
Employee costs	183.5	184.6	207.9
Depreciation and amortisation	17.0	16.9	19.2
Net foreign exchange differences	2.6	2.6	1.5
Inventories (amounts included in cost of sales)	411.3	408.6	430.0
Operating lease rentals:
Minimum lease payments recognised as
an operating lease expense	17.0	16.1	17.9
The auditors' remuneration for the year totalled NOK1.7	million (2012:	NOK1.5 million,	2011:

7. Employee costs

NOK1.7 million).

	2011 NOKm	2012 NOKm	2013 NOKm
Wages and salaries	146.3	147.7	167.5
Social security costs	37.2	36.9	40.4
	183.5	184.6	207.9

The average monthly number of employees during the year was as follows:

	2011	2012	2013
	NOKm	NOKm	NOKm
Direct manufacturing	1,546	1,510	1,555
Administration	803	790	801
	2,349	2,300	2,356

Details of key management personnel remuneration are disclosed in note 24.

8. Net finance costs

	2011	2012	2013
	NOKm	NOKm	NOKm
Finance revenue	1.0	3.6	3.7
Interest expense on bank loans and overdrafts	(20.8)	(29.7)	(40.1)
Finance costs	(19.8)	(26.1)	(36.4)

9. Taxation

The major components of corporation tax expense are:

Consolidated income statement for total operations	2011 NOKm	2012 NOKm	2013 NOKm
Current taxation: Corporation tax	12.4	15.0	13.4
Total current taxation	12.4	15.0	13.4
Deferred taxation Origination and reversal of temporary differences	(6.4)	(4.8)	(4.9)
Total deferred taxation	(6.4)	(4.8)	(4.9)
Tax charge reported in the consolidated income statement	6.0	10.2	8.5

Taxation for the year is lower than the standard rate of taxation in Norway of 28 per cent. (2011: 28 per cent., 2011: 28 per cent.). A reconciliation of the tax charge applicable to profit before tax at the statutory tax rate to the actual tax charge at the Noratel Group's effective tax rate for the years ended 31 December 2011, 31 December 2012 and 31 December 2013 respectively was as follows:

	2011 NOKm	2012 NOKm	2013 NOKm
Profit on continuing operations before tax	29.9	47.7	37.5
Profit before taxation multiplied by standard rate of corporation
tax in Norway of 28% (2012: 28%, 2011 28%)	8.4	13.4	10.5
Effect of:
Non-deductible costs	—	3.7	2.3
Non-taxable income	—	(2.6)	(0.1)
Deficit for the year without deferred tax advantage	—	1.6	1.6
Effect of tax rate differences abroad	—	(3.8)	(3.2)
Effect of change in tax rate	—	(0.6)	(0.1)
Other items	(1.4)	(1.5)	(2.5)
	(1.4)	(3.2)	(2.0)
Tax reported in the consolidated income statement	6.0	10.2	8.5

Deferred tax assets and liabilities comprise:

Assets	2011 NOKm	2012 NOKm	2013 NOKm
Other temporary differences	3.5	1.3	2.0
Pensions	1.8	1.2	2.3
	5.3	2.5	4.3

Liabilities	2011	2012	2013
	NOKm	NOKm	NOKm
Accelerated capital allowances	(10.6)	(9.7)	(8.6)
Other temporary differences	(6.1)	(3.1)	—
	(16.7)	(12.8)	(8.6)
Net liability at 31 December	(11.4)	(10.3)	(4.3)

Movements in the net liability comprise:

Assets	2011 NOKm	2012 NOKm	2013 NOKm
Net liability at 1 January
Recognised in profit and loss	6.4	4.8	4.9
Recognised in other comprehensive income	1.0	(3.7)	1.1
	7.4	1.1	6.0

10. Property, plant and equipment

	Buildings and property NOKm	Plant and equipment NOKm	Office equipment NOKm	Motor Vehicles NOKm	Total NOKm
Cost At 1 January 2011 Additions Disposals Exchange movement	55.9 1.6 — (2.3)	127.4 24.8 (10.7) (2.4)	16.3 0.6 (0.6) (0.1)	6.5 0.7 (1.4) (0.3)	206.1 27.7 (12.7) (5.1)
At 31 December 2011 Additions Disposals Exchange movement	55.2 1.4 — (1.6)	139.1 21.0 (5.9) (14.0)	16.2 1.1 (0.7) 2.0	5.5 — — 0.2	216.0 23.5 (6.6) (13.4)
At 31 December 2012 Additions Disposals Reclassifcation Exchange movement	55.0 — — 9.8 6.2	140.2 16.4 (0.3) (11.0) 12.1	18.6 0.3 (0.1) 1.2 1.6	5.7 0.7 (1.0) — 0.5	219.5 17.4 (1.4) — 20.4
At 31 December 2013	71.0	157.4	21.6	5.9	255.9
Depreciation At 1 January 2011 Charge for the year Disposals Exchange differences	16.0 1.9 — (0.5)	78.4 11.4 (2.2) (1.8)	12.1 1.0 (0.3) (0.1)	3.8 0.8 (1.3) (0.1)	110.3 15.1 (3.8) (2.5)
At 31 December 2011 Charge for the year Disposals Exchange differences	17.4 2.0 — (0.3)	85.8 10.7 (4.9) (6.3)	12.7 1.2 (0.7) 1.8	3.2 0.7 (0.1) 0.4	119.1 14.6 (5.7) (4.4)
At 31 December 2012 Charge for the year Disposals Reclassification Exchange differences	19.1 2.2 — 0.3 2.0	85.3 11.2 (0.1) (1.2) 7.3	15.0 1.5 — 0.9 0.4	4.2 0.5 (0.8) — 0.1	123.6 15.4 (0.9) — 9.8
At 31 December 2013	23.6	102.5	17.8	4.0	147.9
Net book amount at 31 December 2013	47.4	54.9	3.8	1.9	108.0
Net book amount at 31 December 2012	35.9	54.9	3.6	1.5	95.9
Net book amount at 31 December 2011	37.8	53.3	3.5	2.3	96.9

11. Intangible assets – goodwill

Assets	2011	2012	2013
	NOKm	NOKm	NOKm
Goodwill	348.1	351.6	351.8

Impairment testing of goodwill

The directors of Acal have considered impairment risk for the goodwill under the first time adoption requirements of IFRS 1. Having calculated an indicative fair value less costs to sell as at the transition date of 1 January 2011, based on earnings, they are satisfied that no impairment of goodwill was required on transition. They also considered the same calculation for the subsequent balance sheet dates presented in this historical financial information and were satisfied that no subsequent impairment arose.

12. Inventories

	2011 NOKm	2012 NOKm	2013 NOKm
Raw materials	104.8	93.0	92.6
Work in progress	18.3	18.0	19.3
Finished goods	78.2	66.5	65.5
	201.3	177.5	177.4

13. Trade and other receivables

	2011 NOKm	2012 NOKm	2013 NOKm
Trade receivables	124.6	118.6	122.9
Other receivables and prepayments	18.8	16.2	14.5
	143.4	134.8	137.4

Trade receivables are non-interest bearing and are generally on 30-60 days' terms and are shown net of a provision for impairment.

14. Cash and cash equivalents

	2011	2012	2013
	NOKm	NOKm	NOKm
Cash at bank and in hand	27.5	31.1	23.4

15. Financial liabilities

			Current			Non-current
	Effective interest rate %	2011 NOKm	2012 NOKm	2013 NOKm	2011 NOKm	2012 NOKm	2013 NOKm
Bank overdrafts Bank loans Unamortised debt issue costs	Variable Variable	33.1 43.3 (0.6)	24.8 43.9 (0.7)	31.1 361.2 (3.3)	— 431.8 (1.5)	— 406.0 (0.8)	— 65.6 —
Total borrowings Trade and other payables Provisions		75.8 120.8 —	68.0 106.3 —	389.0 101.0 —	430.3 — 5.8	405.2 — 5.8	65.6 — 8.0
Total		196.6	174.3	490.0	436.1	411.0	73.6

The maturity of financial liabilities is as follows:

At 31 December 2013	Within 1 year NOKm	2-5 years NOKm	Total NOKm
Bank overdrafts	31.1	—	31.1
Bank loans	357.9	65.6	423.5
Trade and other payables	101.0	—	101.0
	490.0	65.6	555.6

The carrying amount of the Noratel Group's borrowings is denominated in NOK, US Dollars and Euros.

16. Movements in cash and net debt

Year to 31 December 2013	31 December 2012 NOKm	Cash flow NOKm	Foreign exchange NOKm	30 December 2013 NOKm
Cash and cash equivalents	31.1	(7.7)	—	23.4
Overdrafts	(24.8)	(6.3)		(31.1)
Bank loans	(449.9)	47.0	(23.9)	(426.8)
Net debt (excluding unamortised
debt issue costs)	(443.6)	33.0	(23.9)	(434.5)

17. Reconciliation of cash flows from operating activities

	2011 NOKm	2012 NOKm	2013 NOKm
Profit for the year	23.9	37.5	29.0
Taxation expense	6.0	10.2	8.5
Net finance costs	19.8	26.1	36.4
Depreciation and amortisation	17.0	16.9	19.2
Operating cash flows before changes in working capital	66.7	90.7	93.1
Net movement in working capital	(3.6)	25.2	17.9
Cash generated from operations	63.1	115.9	111.0
Income taxes paid	(9.1)	(6.7)	(9.4)
Net cash flow from operating activities	54.0	109.2	101.6

18. Provisions

	Severance indemnity NOKm
At 1 January 2010	4.8
Arising during the year	1.0
At 31 December 2011	5.8
Arising during the year	—
At 31 December 2012	5.8
Arising during the year	2.2
At 31 December 2013	8.0

Provisions include amounts payable to employees in certain countries on cessation of employment, whether the cessation of employment is initiated by the employee or employer. These amounts are included in provisions due to the uncertainty as to timing.

19. Financial risk controls

The main financial risks faced by the Noratel Group are liquidity risk, interest rate risk, exchange risk on foreign currencies and customer credit risk. The Noratel Group regularly reviews these risks and approves written policies covering the use of financial instruments to manage these risks and sets overall risk limits.

20. Liquidity risk

The Noratel Group covers this risk by maintaining adequate banking facilities, by monitoring forecast and actual cash flows to ensure that liquidity requirements will be met.

21. Interest rate risk

The Noratel Group has bank debts as set out in note 15. Of the total interest-bearing debt approximately 75 per cent. has fixed interest arrangements using interest rate swaps with the remainder having floating interest arrangements. Hedge accounting has not been applied in this historical financial information.

The interest rate swaps held at each balance sheet date presented have been valued using observable inputs other than quoted prices (Level2).

22. Exchange risk on foreign currencies

The Noratel Group's shareholders' equity, earnings and cash flows are exposed to foreign exchange risks due to the mismatch between the currencies in which it incurs manufacturing costs and purchases raw materials and the final currency of sale to its customers.

The following table demonstrates the sensitivity to a reasonably possible change in the US Dollar, Euro and Polish Zloty rates against the NOK, with all other variables remaining constant, of the Noratel Group's profit before tax for 2013, due to changes in the value of monetary assets and liabilities.

	US Dollar currency impact	Euro currency impact	Polish Zloty currency impact
	2013	2013	2013
	NOKm	NOKm	NOKm
Profit before tax	37.5	37.5	37.5
10% appreciation	(0.2)	(0.5)	(1.5)
10% depreciation	0.2	0.5	1.5

23. Credit risk

Credit risk arises on financial instruments such as trade receivables and short-term bank deposits. Short-term bank deposits are executed only with highly credit-rated counter parties.

The Noratel Group has a wide range of customers but deals with recognised creditworthy third parties.

The Noratel Group monitors this risk by applying very strict rules for credit checking and having adequate insurance in place against third party defaults.

24. Financial assets and liabilities

The carrying value of the Noratel Group's short term receivables and payables is a reasonable approximation of their fair values. The fair value of all other financial instruments carried within the group's historical financial information is not materially different from their carrying values.

25. Trade and other payables

	2011	2012	2013
	NOKm	NOKm	NOKm
Trade payables	71.2	71.5	67.0
Other payables	49.6	34.8	34.0
	120.8	106.3	101.0

26. Share capital

Authorised, allotted, called up	2011	2011	2012	2012	2013	2013
and fully paid	Number	NOKm	Number	NOKm	Number	NOKm
Ordinary shares of NOK 1 each	317,000	0.3	317,000	0.3	304,000	0.3

During 2013, the company purchased 12,858 shares from certain shareholders for a consideration of NOK 6.1 million.

27. Commitments and contingencies

Operating lease commitments

The Noratel Group leases various buildings, vehicles and equipment under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights.

Future minimum rentals payable under non-cancellable operating leases are as follows:

	2011	2012	2013
	NOKm	NOKm	NOKm
Due after one year but not more than six years	12.6	11.4	13.4

Contingent liabilities

There were no material contingent liabilities at 31 December 2013.

28. Related party disclosures

The Noratel Group's principal subsidiaries are listed in the following table:

			Noratel Group effective shareholding held
Name and nature of business	Country of incorporation and registration	Type of share	By parent company (%)	By subsidiary undertaking (%)
Manufacturing and distribution
Noratel Holding AS	Norway	Ordinary Shares	100	100
Noratel AS	Norway	Ordinary Shares	—	100
Noratel Sweden AB	Sweden	Ordinary Shares	—	100
Noratel Finland Oy	Finland	Ordinary Shares	—	100
Noratel Denmark A/S	Denmark	Ordinary Shares	—	100
Danselbud N.T.Sp.z.o.o	Poland	Ordinary Shares	—	100
Noratel Netherlands	Netherlands	Ordinary Shares	—	100
Noratel Germany AG	Germany	Ordinary Shares	—	100
Noratel Sp. zo.o.	Poland	Ordinary Shares	—	100
Noratel UK Ltd.	UK	Ordinary Shares	—	100
Noratel Spain S.L.	India	Ordinary Shares	—	100
Noratel Power Components Pvt Ltd	Sri Lanka	Ordinary Shares	—	100
Noratel Lanka (pvt) Ltd.	Sri Lanka	Ordinary Shares	—	100
Noratel International (pvt) Ltd.	Sri Lanka	Ordinary Shares	—	100
Toroid Asia (pvt) Ltd.	Sri Lanka	Ordinary Shares	—	100
Foshan Noratel China	China	Ordinary Shares	—	100
Zhuhai Noratel Electric Ltd	China	Ordinary Shares	—	100
Noratel North America Inc.	US	Ordinary Shares	—	100
Noratel Power Engineering Inc	US	Ordinary Shares	—	100

All subsidiaries operate in their country of incorporation. All subsidiaries have a 31 December year end and have the same voting rights as the effective interest.

29. Related parties

Remuneration of key management personnel

The remuneration of the Directors, who are the key management personnel of the Noratel Group, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.

	2011	2012	2013
	NOKm	NOKm	NOKm
Short term employee benefits	2.5	2.1	2.8

30. Pensions

Defined benefit scheme

Noratel AS operates a defined benefit pension scheme encompassing a total of 74 people. The scheme provides the right to defined future benefits. These are mainly dependent on the number of accrual years, wage level at retirement age and the amount paid under the state pension scheme. The benefits are funded via an insurance company.

The defined benefit scheme is in the process of being converted to a defined contribution scheme and is expected to be completed in August 2014.

The main actuarial assumptions used are set out as follows:

	2011	2012	2013
Rate of increase of salaries	3.50%	3.50%	3.75%
Rate of increase of pensions in payment	3.25%	3.25%	3.50%
Discount rate	4.4%	4.4%	4.1%

At 31 December 2013 the scheme had a deficit of NOK8.1 million (2012: NOK4.1 million, 2011: NOK6.5 million).

31. Exchange rates

The profit and loss accounts of foreign currency denominated companies have been translated into NOK at average rates of exchange for the period and balance sheets are translated at period end rates. Details of the exchange rates used are as follows:

		Year to 31 December 2011		Year to 31 December 2012		Year to 31 December 2013
	Closing rate	Average rate	Closing rate	Average rate	Closing rate	Average rate
USD	6.018	5.607	5.5822	5.820	6.0614	5.878
EUR	7.775	7.797	7.3823	7.478	8.3630	7.807
GBP	9.280	8.986	8.9885	9.221	10.088	9.193
SEK	0.869	0.863	0.8568	0.859	0.9440	0.902
DKK	1.046	1.047	0.9897	1.005	1.1212	1.047
PLN	1.765	1.896	1.8144	1.789	2.0131	1.860
INR	0.113	0.120	0.1018	0.109	0.0980	0.100
LKR	0.053	0.051	0.0440	0.046	0.0464	0.046
CNY	0.956	0.868	0.8958	0.922	1.0017	0.956

Section C Accountant's report on the Historical Financial Information relating to the Noratel Group

The Directors Acal plc 2 Chancellor Court Occam Road Surrey Research Park Guildford GU2 7AH

5 June 2014

Dear Sirs

Trufo Holdings AS

We report on the financial information set out on pages 80 to 100 of the combined circular and prospectus dated 5 June 2014 of Acal plc (the 'Document') for the three years ended 31 December 2013. This financial information has been prepared for inclusion in the Document relating to the acquisition of Trafo Holding AS on the basis of the accounting policies set out in note 2. This report is required by paragraph 13.5.21R of the Listing Rules and is given for the purpose of complying with that paragraph and for no other purpose.

Responsibilities

The Directors of Acal plc are responsible for preparing the financial information on the basis of preparation set out in note 1 to the financial information and in accordance with International Financial Reporting Standards as adopted by the European Union.

It is our responsibility to form an opinion on the financial information and to report our opinion to you.

Save for any responsibility arising under Prospectus Rule 5.5.3R (2)(f) 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 Listing Rule 13.4.1R(6) and paragraph 23.1 of Annex I of the Prospectus Directive Regulation, consenting to its inclusion in the Document.

Basis of opinion

We conducted our work in accordance with Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. Our work included an assessment of evidence relevant to the amounts and disclosures in the financial information. It also included an assessment of the significant estimates and judgments made by those responsible for the preparation of the financial information and whether the accounting policies are appropriate to the entity's circumstances, consistently applied and adequately disclosed.

We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial information is free from material misstatement whether caused by fraud or other irregularity or error.

Opinion on financial information

In our opinion, the financial information gives, for the purposes of the Document, a true and fair view of the state of affairs of Trafo Holding AS as at 31 December 2011, 31 December 2012 and 31 December 2013 and of its profits, other comprehensive income, cash flows and changes in equity for the three years ended 31 December 2013 in accordance with the basis of preparation set out in note 1 and in accordance with International Financial Reporting Standards as adopted by the European Union.

Declaration

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 the Prospectus Directive Regulation.

Yours faithfully

KPMG LLP

PART XIV

PART A: UNAUDITED PRO FORMA FINANCIAL INFORMATION FOR THE ENLARGED GROUP

The unaudited pro forma statement of net assets and unaudited pro forma income statement of the Enlarged Group set out below have been prepared on the basis set out in the notes below to illustrate the impact of (i) the Class 1 disposal of the Enterprise Business by the Acal Group which completed on 2 June 2014; (ii) the Rights Issue; and (iii) the Acquisition on the net assets of the Acal Group as at 31 March 2014 as if they had taken place on that date, and on the income statement of the Acal Group for the year ended 31 March 2014 as if they had taken place at the beginning of that financial year.

The unaudited pro forma information has been prepared for illustrative purposes only and, by its nature, addresses a hypothetical situation and therefore does not represent the Enlarged Group's actual financial position or results.

The unaudited pro forma information does not constitute financial statements within the meaning of Section 434 of the Companies Act 2006. Shareholders should read the whole of this document and not rely solely on the summarised financial information contained in this Part XIV.

The unaudited pro forma statement of net assets and income statement do not reflect any changes in the trading performance of either the Acal Group since 31 March 2014 or of the Noratel Group since 31 December 2013.

In addition to the matters noted above, the unaudited pro forma financial information does not reflect the effect of anticipated synergies and efficiencies associated with the Acquisition.

Unaudited Pro Forma Net Asset Statement

	Acal 31 March 2014 £m	Noratel 31December 2013 £m	Enterprise Business disposal £m	Rights Issue £m	Acquisition adjustments £m	Total £m
	(Note 1)	(Note 2)	(Note 3)	(Note 4)	(Note 5)
ASSETS
Non-current assets
Property, plant and equipment	3.5	10.7	—	—	—	14.2
Intangible assets – goodwill	21.2	34.9	—	—	7.6	63.7
Intangible assets – other	4.3	1.2	—	—	—	5.5
Financial assets	—	0.2	—	—	—	0.2
Deferred tax assets	4.1	0.2	—	—	—	4.3
	33.1	47.2	—	—	7.6	87.9
Current assets
Inventories	19.4	17.6	—	—	—	37.0
Trade and other receivables	48.3	13.6	0.3	—	—	62.2
Cash and cash equivalents	18.1	2.3	5.3	52.5	(52.5)	25.7
	85.8	33.5	5.6	52.5	(52.5)	124.9
Assets in disposal group classified as
held for sale	6.9	—	(6.9)	—	—	—
TOTAL ASSETS	125.8	80.7	(1.3)	52.5	(44.9)	212.8
LIABILITIES
Current liabilities
Trade and other payable	(45.7)	(10.0)	—	—	—	(55.7)
Other financial liabilities	(6.8)	(38.6)	—	—	35.6	(9.8)
Current tax liabilities	(2.7)	(0.7)		—	—	(3.4)
Provisions	(1.7)	—	—	—	—	(1.7)
	(56.9)	(49.3)	—	—	35.6	(70.6)
Non-current liabilities
Other financial liabilities	(9.5)	(6.5)	—	—	(14.7)	(30.7)
Pension liability	(6.5)	(0.8)	—	—	—	(7.3)
Deferred tax liabilities	(1.0)	(0.9)		—	—	(1.9)
Provisions	(2.0)	(0.8)	—	—	—	(2.8)
	(19.0)	(9.0)	—	—	(14.7)	(42.7)
Liabilities in disposal group classified as held for sale	(1.4)	—	1.4	—	—	—
TOTAL LIABILITIES	(77.3)	(58.3)	1.4	—	20.9	(113.3)
NET ASSETS	48.5	22.4	0.1	52.5	(24.0)	99.5

Notes

1) The financial information relating to the Acal Group has been extracted without material adjustment from the audited financial statements of the Acal Group for the year ended 31 March 2014 which were published on 5 June 2014 and are incorporated by reference in this document.

2) The financial information relating to the Noratel Group has been extracted from the financial information set out in Section B of Part XIII of this document, translated at the exchange rate of NOK10.088:£1.00, being the closing rate as at 31 December 2013.

(3) This adjustment relates to the class 1 disposal of the Enterprise Business by the Acal Group which was approved by Shareholders and completed subsequent to the date of the financial information presented above on 2 June 2014. This adjustment comprises:

(a) The removal of the assets and liabilities relating to the Enterprise Business which, as at 31 March 2014, were classified separately as held for sale;

(b) A £5.3 million adjustment to cash as set out in the Acal Group's circular to Shareholders dated 15 May 2014 reflecting the upfront consideration receivable by the Acal Group of £5.7 million less transaction and related costs of £0.4 million; and

(c) A £0.3 million adjustment to trade and other receivables reflecting the deferred consideration receivable by the Acal Group on or before 31 December 2014.

• 4) A £52.5 million adjustment to cash representing the net proceeds of the Rights Issue, which are calculated on the basis set out on page 35 of this document.
• 5) This adjustment includes:
• (a) An adjustment to goodwill which has been calculated as follows:

Enterprise value Less financial net debt	£m 73.5 (43.5)
Consideration Less Noratel net assets acquired	30.0 (22.4)
Pro forma adjustment to goodwill	7.6

The enterprise value, financial net debt and consideration above are as set-out in paragraph 2 of Part VIII of this document, translated at the exchange rate of NOK9.996:£1.00, being the closing rate as at 2 June 2014. The Acquisition has been accounted for using the acquisition method of accounting. The excess of consideration over the

book value of the net assets acquired has been reflected as goodwill. A fair value exercise of the assets and liabilities acquired, including a valuation of the intangible assets, has not yet been performed but will be undertaken following Completion to enable the Directors to identify individual intangible assets and make any fair value adjustments required. (b) A £35.6 million adjustment to current other financial liabilities to reflect the repayment on Completion of the Noratel Group's amortising term loan (NOK358.9 million translated at NOK10.088:£1.00).

• (c) A £14.7 million adjustment to non-current other financial liabilities to reflect the aggregate of: (i) the repayment on Completion of the Noratel Group's £6.1 million shareholder loan (NOK61.9 million translated at NOK10.088:£1.00); and (ii) £20.8 million of estimated drawings against the Facility which, together with the net proceeds from the Rights Issue, will be used to fund the Acquisition.
• (d) A £52.5 million adjustment to cash representing the aggregate of: (i) £29.2 million of cash consideration payable in respect of the Acquisition (£30.0 million Consideration as set-out above less £0.8 million of consideration which shall be settled through the Initial Consideration Shares); (ii) £2.4 million of estimated transaction costs payable in connection with the Acquisition and the Facility; (iii) the £41.7 million repayment of the Noratel Group's amortising term and shareholder loans on Completion; and (iv) the £20.8 million estimated drawings against the Facility.

Unaudited Pro Forma Income Statement

	Acal for the year ended 31 March 2014 £m	Noratel for the year ended 31December 2013 £m	Enterprise Business disposal £m	Acquisition adjustments £m	Total £m
	(Note 1)	(Note 2)	(Note 3)	(Note 4)	(Note 5)
Revenue	211.6	86.4	—	—	298.0
Cost of sales Operating expenses (including	(148.6)	(55.1)	—	—	(203.7)
exceptional items)	(57.8)	(23.2)	—	(1.2)	(82.2)
Operating profit	5.2	8.1	—	(1.2)	12.1
Finance revenue	0.2	0.4	—	—	0.6
Finance costs	(1.2)	(4.4)	—	2.7	(2.9)
Profit before tax	4.2	4.1	—	1.5	9.8
Tax expense	(0.5)	(0.9)	—	(0.3)	(1.7)
Profit for the year from continuing operations	3.7	3.2	—	1.2	8.1
Loss for the year from discontinued operations	(2.4)	—	2.4	—	—

Notes

1) The financial information relating to the Acal Group has been extracted without material adjustment from the audited financial statements of the Acal Group for the year ended 31 March 2014 which were published on 5 June 2014 and are incorporated by reference in this document.

2) The financial information relating to the Noratel Group has been extracted from the financial information set out in Section B of Part XIII of this document, translated at the exchange rate of NOK9.1931:£1.00, being the average exchange rate for the year ended 31 December 2013.

3) This adjustment relates to removal of the loss for the year ended 31 March 2014 of £2.4 million (including a provision for the estimated loss on disposal) relating to the Enterprise Business which was disposed by the Acal Group subsequent to the period covered by the financial information presented above on 2 June 2014. The results of the Enterprise Business were classified as a discontinued operation in the Acal Group's unadjusted financial information presented above.

4) The adjustments arising as a result of the Acquisition are set out below:

a) A £1.2 million adjustment to operating expenses to reflect the estimated transaction costs payable in respect of the Acquisition. These costs, which are non-recurring, shall be classified as exceptional costs in the Acal Group's financial statements for the year ending 31 March 2015.

b) A net £2.7 million decrease to net finance costs to remove the interest charge relating to the Noratel Group's amortising term loan and shareholder loan which are being repaid on Completion and include the estimated interest relating to the portion of Facility drawn to fund the Acquisition assuming these are drawn for a full 12 month period. Finance costs in respect of the Noratel Group in the year ended 31 December 2013 included £0.7 million relating to foreign exchange losses on financial liabilities (NOK6.1 million translated at NOK9.1931:£1.00).

c) A £0.3 million adjustment to reflect the tax impact of the adjustment to finance costs calculated at 11.9 per cent., being the Acal Group's effective tax rate for the year to 31 March 2014.

PART B: ACCOUNTANT'S REPORT ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION FOR THE ENLARGED GROUP

The Directors Acal plc 2 Chancellor Court Occam Road Surrey Research Park Guildford GU2 7AH

5 June 2014

Dear Sirs

Acal plc

We report on the pro forma net asset statement and the pro forma income statement (together, the 'Pro Forma Financial Information') set out in Part XIV of the combined circular and prospectus dated 5 June 2014 (the 'Document'), which has been prepared on the basis described in the notes to the Pro Forma Financial Information, for illustrative purposes only, to provide information about how the proposed rights issue by Acal plc and the acquisition by Acal plc of Trafo Holding AS might have affected the financial information presented on the basis of the accounting policies adopted by Acal plc in preparing the financial statements for the year ended 31 March 2014. This report is required by paragraph 13.3.3R of the Listing Rules of the Financial Conduct Authority and paragraph 20.2 of Annex 1 of the Prospectus Directive Regulation and is given for the purpose of complying with those paragraphs and for no other purpose.

Responsibilities

It is the responsibility of the directors of Acal plc to prepare the Pro Forma Financial Information in accordance with paragraph 13.3.3R of the Listing Rules of the Financial Conduct Authority and paragraph 20.2 of Annex I of the Prospectus Directive Regulation.

It is our responsibility to form an opinion, as required by paragraph 7 of Annex II of the Prospectus Directive Regulation, as to the proper compilation of the Pro Forma Financial Information and to report that opinion to you.

Save for any responsibility arising under Prospectus Rule 5.5.3R (2)(f) 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 Listing Rule 13.4.1R(6) and paragraph 23.1 of Annex I of the Prospectus Directive Regulation, consenting to its inclusion in the Document.

Basis of opinion

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 Acal plc.

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 Acal plc.

Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in the United States of America or other jurisdictions and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.

Opinion

In our opinion:

• * the Pro Forma Financial Information has been properly compiled on the basis stated; and
• * such basis is consistent with the accounting policies of Acal plc.

Declaration

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 the Prospectus Directive Regulation.

Yours faithfully

KPMG LLP

PART XV

Terms and Conditions of the Rights Issue

1. Summary of the Rights Issue

Acal is proposing to raise approximately £52.5 million net of expenses, by way of a rights issue of 31,332,127 Rights Issue Shares.

The Rights Issue Price of 176p per Rights Issue Share represents a discount of approximately 49 per cent. to the Closing Price on 4 June 2014 (being the last business day prior to the announcement of the Rights Issue) and a 32.45 per cent. discount to the theoretical ex-rights price of 261p per Rights Issue Share calculated by reference to that Closing Price on the same basis. This represents a 47.97 per cent. discount to that Closing Price adjusted for the 2014 Final Dividend of 6.85 pence per Ordinary Share, which will be paid to Shareholders on the register of members at the close of business on 13 June 2014, and a discount of 30.63 per cent. to the theoretical ex-rights price on the same basis.

2. Terms and Conditions of the Rights Issue

2.1. Subject to the terms and conditions set out below (and, in the case of Qualifying Non-CREST Shareholders, the Provisional Allotment Letter), the Rights Issue Shares will be offered for subscription by way of a rights issue to Qualifying Shareholders on the following basis:

One Rights Issue Share at 176 pence each for every One Existing Ordinary Share

registered in the name of each Qualifying Shareholder at the close of business on the Record Date and so in proportion for any other number of Ordinary Shares then registered.

The Nil Paid Rights are entitlements to buy Rights Issue Shares at the Rights Issue Price. The Fully Paid Rights are entitlements to receive Rights Issue Shares for which subscription and payment has already been made.

Holdings of Existing Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Rights Issue.

Qualifying Shareholders who do not take up their Nil Paid Rights in full will experience dilution of their shareholdings by 50 per cent. as a result of the Rights Issue. Further dilution of 0.79 per cent. will result from the issue of the Consideration Shares.

The attention of Qualifying Shareholders and any other person (including, without limitation, custodians, nominees and trustees) who has a contractual or legal obligation to forward this document into a jurisdiction other than the UK is drawn to section 7 of this Part XV below. Subject to certain exceptions, Qualifying Shareholders who have a registered address in the Excluded Territories or who are otherwise located in the Excluded Territories will not be sent this document or Provisional Allotment Letters and will not have their CREST accounts credited with Nil Paid Rights.

The Existing Shares are listed on the premium segment of the Official List and traded on the London Stock Exchange's main market for listed securities. Application will be made to the UK Listing Authority and to the London Stock Exchange for the Rights Issue Shares to be admitted to the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities, respectively. It is expected that Admission will become effective on 24 June 2014 and that dealings in the Rights Issue Shares, nil paid, will commence at 8.00 a.m. on the same day.

The Rights Issue Shares and the Existing Shares are in registered form and can be held in certificated and uncertificated form.

The Existing Shares are already admitted to CREST. No further application for admission to CREST is accordingly required for the Rights Issue Shares. All such Rights Issue Shares, when issued and fully paid, may be held and transferred by means of CREST.

The Rights Issue Shares will be issued pursuant to the authority to be granted under the Resolutions being proposed at the General Meeting. The Rights Issue Shares, when fully paid, will rank pari passu with the Existing Ordinary Shares, save that they will not rank for the proposed 2014 Final Dividend. Further details of the rights attaching to the Rights Issue Shares are set out in paragraph 8 of Part VII (''Letter from the Chairman of Acal'') of this document.

The ISIN for the Rights Issue Shares will be the same as that of the Existing Shares being GB0000055888. The ISIN for the Nil Paid Rights is GB00BN573Z24, and the ISIN for the Fully Paid Rights is GB00BN574045.

None of the Rights Issue Shares are being made available to the public other than pursuant to the Rights Issue on the terms and subject to the conditions set out in this document and, in the case of Qualifying Non-CREST Shareholders holding certificated shares, any relevant Provisional Letter.

The Rights Issue has been fully underwritten by Oriel Securities in accordance with the terms of the Underwriting Agreement and is conditional on, inter alia:

• (a) the Underwriting Agreement becoming unconditional in all respects (other than as to Admission);
• (b) the Underwriting Agreement not being terminated in accordance with its terms, prior to Admission;
• (c) the publication of a press release relating to the Rights Issue and the Acquisition in the approved terms through a Regulatory Information Service by not later than 7.00 a.m. on the date of the Underwriting Agreement;
• (d) the FCA agreeing to admit the Rights Shares to the Official List and the London Stock Exchange agreeing to admit the Rights Issue Shares to trading on its market for listed securities (subject only to allotment);
• (e) the passing of the Resolutions at the General Meeting without material amendment not previously approved in writing by Oriel Securities.
• (f) the Sale and Purchase Agreement not being terminated or rescinded prior to Admission;
• (g) no situation arising to give rise to a right to terminate the Facility Agreement and the Facility Agreement not being terminated or rescinded prior to Admission;
• (h) Admission of the Nil Paid Rights becoming effective by not later than 8.00 a.m. on 24 June 2014 (or such later time and/or date as Acal and Oriel Securities may determine, not being later than 8.00 a.m. on 1 July 2014); and
• (i) Acal having applied to Euroclear UK & Ireland for admission of the Nil Paid Rights and Fully Paid Rights to CREST as participating securities and no notification having been received from Euroclear UK & Ireland on or before Admission that such admission or facility for holding and settlement has been or is to be refused.

The Underwriting Agreement is not capable of termination following Admission. A summary of the principal terms of the Underwriting Agreement is set out in Part XVII (''Additional Information'') of this document.

Oriel Securities may, in accordance with the applicable legal and regulatory provisions, engage in transactions in relation to the Nil Paid Rights, the Fully Paid Rights or the Rights Issue Shares and/or related instruments for its own account for the purpose of hedging its underwriting exposure or otherwise. Except as required by applicable law or regulation, Oriel Securities does not propose to make any public disclosure in relation to such transactions.

In connection with the Rights Issue, Oriel Securities and its affiliates, acting as an investor for its own account, may take up Rights Issue Shares in the Rights Issue and in that capacity may retain, purchase or sell for their own account such securities and any Rights Issue Shares or related investments and may offer to sell such Rights Issue Shares or other investments otherwise than in connection with a Rights Issue. Accordingly, references in this document to Rights Issue Shares being offered or placed should be read as including any offering or placement of Rights Issue Shares to Oriel Securities or any of its affiliates acting in such capacity. Neither Oriel Securities or its affiliates intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so.

Applications will be made for the Nil Paid Rights and the Fully Paid Rights to be admitted to CREST. Euroclear requires Acal to confirm to it that certain conditions are satisfied before Euroclear will admit any security to CREST. As soon as practicable after Admission, Acal will confirm this to Euroclear. It is expected that these conditions will be satisfied on Admission.

Subject, inter alia, to the conditions referred to in paragraphs (a) to (i) above being satisfied and save as provided in section 4.3 of this Part XV, it is intended that:

• (a) Provisional Allotment Letters (which constitute temporary documents of title) in respect of Nil Paid Rights will be dispatched to Qualifying Non-CREST Shareholders (other than Qualifying Shareholders with a registered address in the Excluded Territories, or who are otherwise located in any Excluded Territory; or any agent or intermediary of those Qualifying Shareholders, except where Acal is satisfied that such action would not result in the contravention of any registration or other legal requirement in any jurisdiction) on 23 June 2014;
• (b) the Receiving Agent will instruct Euroclear UK & Ireland to credit the appropriate stock accounts of Qualifying CREST Shareholders (other than Qualifying CREST Shareholders with a registered address in the Excluded Territories or who are otherwise located in the United States, or any agent or intermediary of those Qualifying CREST Shareholders, except where Acal is satisfied that such action would not result in the contravention of any registration or other legal requirement in any jurisdiction) with their entitlements to Nil Paid Rights with effect from 24 June 2014;
• (c) the Nil Paid Rights and Fully Paid Rights will be enabled for settlement by Euroclear UK & Ireland on 24 June 2014, as soon as practicable after Acal has confirmed to Euroclear UK & Ireland that all the conditions for admission of the Nil Paid Rights and the Fully Paid Rights to CREST have been satisfied;
• (d) the Rights Issue Shares will be credited to the appropriate CREST accounts of Qualifying CREST Shareholders (or relevant renouncees) who validly take up their Nil Paid Rights as soon as practicable after 8.00 a.m. on 24 June 2014; and
• (e) share certificates in respect of Rights Issue Shares taken up are expected to be posted to Qualifying Non-CREST Shareholders (or relevant renouncees) on or around 17 July 2014.

This document constitutes the offer of Rights Issue Shares to all Qualifying CREST Shareholders (other than Qualifying CREST Shareholders with a registered address in the Excluded Territories or who are otherwise located in any Excluded Territory, or any agent or intermediary of those Qualifying Shareholders, except where Acal is satisfied that such action would not result in the contravention of any registration or other legal requirement in any jurisdiction) by way of enablement of the Nil Paid Rights and the Fully Paid Rights (as set out in paragraph (c) above); and to Qualifying Non-CREST Shareholders (other than Qualifying Non-CREST Shareholders with a registered address in the Excluded Territories or who are otherwise located in any Excluded Territory; or any agent or intermediary of those Qualifying Shareholders, except where Acal is satisfied that such action would not result in the contravention of any registration or other legal requirement in any jurisdiction) by way of a Provisional Allotment Letter (as set out in paragraph (a) above).

All documents and cheques posted to or by Qualifying Shareholders and/or their respective transferees or renouncees (or their agents, as appropriate) will be posted at their own risk. Any person accepting and/or renouncing a Provisional Allotment Letter or requesting registration of the Rights Issue Shares comprised therein and any CREST member or CREST sponsored member who makes a valid acceptance in accordance with the procedures set out in sections 4.2 and 5.2 of this Part XV of this document is deemed to have made the representations and warranties set out in section 5.2(d) of this Part XV of this document.

If for any reason it becomes necessary to adjust the expected timetable as set out in this document, Acal will make an appropriate announcement to a Regulatory Information Service giving details of the revised dates.

The attention of Overseas Shareholders is drawn to paragraph 7 of this Part XV (''Terms and Conditions of the Rights Issue'').

3. Action to be Taken

The action to be taken in respect of Rights Issue Shares depends on whether, at the relevant time, the Nil Paid Rights or Fully Paid Rights in respect of which action is to be taken are in certificated form (that is, are represented by Provisional Allotment Letters) or in uncertificated form (that is, are in CREST).

If you are a Qualifying Non-CREST Shareholder and (subject to certain limited exceptions, as set out in paragraph 7 of this Part XV) do not have a registered address in the Excluded Territories, please refer to paragraphs 1, 2, 4 and 7 to 14 (inclusive) of this Part XV.

If you hold your Existing Shares in CREST and (subject to certain limited exceptions, as set out in paragraph 7 of this Part XV) do not have a registered address in the Excluded Territories, please refer to paragraphs 1, 2, 5 and 7 to 14 (inclusive) of this Part XV and to the CREST Manual for further information on the CREST procedures referred to below.

CREST sponsored members should refer to their CREST sponsors, as only their CREST sponsors will be able to take the necessary actions specified below to take up the entitlements or otherwise to deal with the Nil Paid Rights or Fully Paid Rights of CREST sponsored members.

All enquiries in relation to the Provisional Allotment Letters should be addressed to the Shareholder Helpline which is available from 8.30 a.m. to 5.30 p.m. (UK time) on any Business Day.

Please call the Shareholder Helpline on 0871 384 2869 (from within the UK) or on +44 121 415 0828 (if calling from outside the UK). Calls to the 0871 384 2869 number are charged at 8 pence per minute (excluding VAT) plus network extras. Lines are open from 8.30 a.m. to 5.30 p.m. (London time) Monday to Friday (except UK public holidays). Calls to the Shareholder Helpline from outside the UK will be charged at the applicable international rate. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. Please note that the Shareholder Helpline operators cannot provide advice on the merits of the Acquisition or Rights Issue or nor give financial, tax, investment or legal advice.

4. Action to be taken by Qualifying Non-CREST Shareholders in relation to Nil Paid Rights represented by Provisional Allotment Letters

4.1. General

Acal intends that the Provisional Allotment Letters will be dispatched to Qualifying Non-CREST Shareholders (other than, subject to certain limited exceptions, as set out in paragraph 6 of this Part XV, Qualifying Non-CREST Shareholders with registered addresses in the Excluded Territories) on 23 June 2014.

The Provisional Allotment Letter will set out:

• (a) the holding of Existing Shares on which a Qualifying Non-CREST Shareholder's entitlement to Rights Issue Shares has been based;
• (b) the aggregate number (and cost) of Rights Issue Shares provisionally allotted to such Qualifying Non-CREST Shareholder;
• (c) the procedures to be followed if a Qualifying Non-CREST Shareholder wishes to dispose of all or part of his entitlement or to convert all or part of his entitlement into uncertificated form; and
• (d) instructions regarding acceptance and payment, consolidation, splitting and registration of renunciation.

If you sell or have sold or otherwise transferred all of your Existing Shares (other than exrights) in certificated form before the Ex-Rights Date, please send any Provisional Allotment Letter, if and when received, at once to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for delivery to the purchaser or transferee except that no Provisional Allotment Letter should be distributed, forwarded to or transmitted in or into any jurisdiction where to do so might constitute a violation of local securities laws or regulations, including but not limited to the United States or any of the other Excluded Territories.

If you sell or transfer or have sold or otherwise transferred only part of your holding of Existing Shares (other than ex-rights) held in certificated form before the Ex-Rights Date, you should refer to the instruction regarding split applications in paragraph 4.8 of this Part XV.

If you do not receive a Provisional Allotment letter or you think that the holding of Existing Shares in certificated form on which your entitlement to Rights Issue Shares in the Provisional Allotment Letter has been based does not reflect your holding of Existing Ordinary Shares in certificated form on the Record Date, please telephone the Shareholder Helpline on the numbers set out in paragraph 3 of this Part XV.

If the Rights Issue is delayed so that Provisional Allotment Letters cannot be dispatched on 23 June 2014, the expected timetable at the front of this document will be adjusted accordingly and the revised dates will be set out in the Provisional Allotment Letters and announced through a Regulatory Information Service. References to dates and times in this document should be read as subject to any such adjustment.

On the basis that Provisional Allotment Letters are posted on 23 June 2014 and that dealings commence at 8.00 a.m. on 24 June 2014, the latest time and date for acceptance and payment in full will be 11.00 a.m. on 8 July 2014.

4.2. Procedure for acceptance and payment

(a) Qualifying Non-CREST Shareholders who wish to accept in full

Holders of Provisional Allotment Letters who wish to take up all of their Nil Paid Rights must return the Provisional Allotment Letter in accordance with the instructions thereon, together with a cheque or banker's draft, made payable to ''Equiniti Limited re Acal plc Rights Issue'' for the full amount payable on acceptance, in accordance with the instructions printed on the Provisional Allotment Letter, by post or by hand (during normal business hours) to Corporate Actions, Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA, so as to be received as soon as possible and, in any event, not later than 11.00 a.m. on 8 July 2014. A reply-paid envelope is enclosed for use within the United Kingdom only. If you post your Provisional Allotment Letter, it is recommended that you allow sufficient time for delivery. Please note that payments via CHAPS, BACS or electronic transfer will not be accepted. Once your Provisional Allotment Letter duly completed and payment have been received by the Registrar in accordance with the above, you will have accepted the offer to subscribe for the number of Rights issue Shares specified on your Provisional Allotment Letter.

(b) Qualifying Non-CREST Shareholders who do not wish to take up their rights at all

Holders of Provisional Allotment Letters who do not wish to take up their rights at all do not need to do anything. If Qualifying Non-CREST Shareholders do not return the Provisional Allotment Letter by 11.00 a.m. on 8 July 2014, Acal has made arrangements under which Oriel Securities will try to find investors to take up such Shareholders' rights. If they do find investors and are able to achieve a premium over the Rights Issue Price and the related expenses of procuring those investors (including any applicable brokerage and commissions and amounts in respect of VAT which are not recoverable), Qualifying Non-CREST Shareholders so entitled will be sent a cheque for the amount of that aggregate premium above the Rights Issue Price less related expenses (including any applicable brokerage and commissions and amounts in respect of VAT which are not recoverable), so long as the amount in question is at least £5.00.

(c) Qualifying Non-CREST Shareholders who wish to accept in part

Holders of Provisional Allotment Letters who wish to take up some but not all of their rights should refer to paragraph 4.8 of this Part XV.

4.3. Discretion as to validity of acceptances

If payment is not received in full by 11.00 a.m. on 8 July 2014, the provisional allotment will be deemed to have lapsed. However, Acal and Oriel Securities may, but shall not be obliged to, treat as valid: (a) Provisional Allotment Letters and accompanying remittances that are received through the post not later than 8.00 a.m. on 8 July 2014 (the cover bearing a legible postmark not later than 11.00 a.m. on 8 July 2014); and (b) acceptances in respect of which a remittance is received prior to 11.00 a.m. on 8 July 2014 from an authorised person (as defined in section 31(2) of FSMA) specifying the number of Rights Issue Shares to be acquired and undertaking to lodge the relevant Provisional Allotment Letter, duly completed, in due course.

Acal may also (in its absolute discretion) treat a Provisional Allotment Letter as valid and binding on the person(s) by whom or on whose behalf it is lodged even if it is not completed in accordance with the relevant instructions or is not accompanied by a valid power of attorney where required.

The Company, having first consulted with Oriel Securities, reserves the right to treat as invalid any acceptance or purported acceptance of the Rights issue Shares that appears to the Company to have been executed in, dispatched from or that provides an address for delivery of share certificates for Rights Issue Shares in the United States or any other Excluded Territory.

A Qualifying Non-CREST Shareholder who makes a valid acceptance and payment in accordance with this section 4.3 is deemed to request that the Rights Issue Shares to which they will become entitled be issued to them on the terms set out in this document and subject to the Memorandum and the Articles of Association.

All Qualifying Shareholders will also be deemed to have agreed and acknowledged that:

• (a) Oriel Securities: (i) are acting exclusively for the Company and no one else in connection with the Rights Issue and the listing of the Rights Issue Shares on the premium segment of the Official List; and (ii) will not be responsible to anyone other than the Company for providing the protections afforded to their clients for providing advice in connection with the Rights Issue, the listing of the Rights Issue Shares on the premium segment of the Official List or the contents of this document;
• (b) apart from the responsibilities and liabilities, if any, which may be imposed on by FSMA, the regulatory regime established thereunder or otherwise under law: (i) Oriel Securities do not have any responsibility or liability for the contents of this document; (ii) Oriel Securities make no representation or warranty, express or implied, as to the contents of this document (including as to its accuracy, completeness or verification) or for any other statement made or purported to be made by or on behalf of any of them, by the Company or on its behalf or by any other person in connection with the Company, the Rights Issue Shares or the Rights Issue, and nothing in this document shall be relied upon as a promise or representation in this respect (whether as to the past or the future); and (iii) Oriel Securities shall not have any liability whatsoever to such Qualifying Shareholders, whether arising in tort, contract or otherwise (save as referred to above) in respect of this document or any such statement;
• (c) such Qualifying Shareholder has not relied on Oriel Securities or any person affiliated with them in connection with any investigation as to the accuracy of any information contained in this document or their investment decision; and
• (d) such Qualifying Shareholder has relied only on the information contained in this document, and that no person has been authorised to give any information or to make any representation concerning the Group or the Nil Paid Rights, the Fully Paid Rights or the Rights Issue Shares (other than as contained in this document) and, if given or made, any such other information or representation should not be relied upon as having been authorised by the Company or Oriel Securities.

4.4. Payments

All payments must be made in pounds sterling by cheque or banker's draft made payable to ''Equiniti Limited re Acal plc Rights Issue'', and crossed ''A/C payee only''. Third-party cheques may not be accepted. Such payments will be held by the Registrar to the order of Acal. Cheques or banker's drafts must be drawn on an account at a branch (which must be in the United Kingdom, the Channel Islands or the Isle of Man) of a bank or building society which is either a settlement member of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing Company Limited or which has arranged for its cheques and banker's drafts to be cleared through facilities provided by either of these companies. Such cheques and banker's drafts must bear the appropriate sorting code in the top right-hand corner. Neither post-dated cheques nor payments via CHAPS, BACS or electronic transfer will be accepted.

Cheques and banker's drafts will be presented for payment on receipt. No interest will be allowed on payments made before they are due and any interest on such payments ultimately will accrue for the benefit of Acal. It is a term of the Rights Issue that cheques shall be honoured on first presentation, and Acal may elect to treat as invalid any acceptances in respect of which cheques are not so honoured. Return of this PAL with a cheque will constitute a warranty that the cheque will be honoured on first presentation. All documents, cheques, and banker's drafts sent through the post will be sent at the risk of the sender. If Rights Issue Shares have already been issued to Qualifying Shareholders prior to any payment not being so honoured or such Qualifying Shareholders' acceptances being treated as invalid, Acal may (in its absolute discretion as to manner, timing and terms) make arrangements for the sale of such Rights Issue Shares on behalf of those Qualifying Shareholders and hold the proceeds of sale (net of Acal's reasonable estimate of any loss that they have suffered as a result of the acceptance being treated as invalid and of the expenses of sale, and of all amounts payable by such Qualifying Shareholders pursuant to the provisions of this Part XV in respect of the acquisition of such Rights Issue Shares) on behalf of such Qualifying Shareholders. None of Acal, Oriel Securities or any other person shall be responsible for, or have any liability for, any loss, expenses or damage suffered by Qualifying Shareholders as a result.

4.5. Money Laundering Regulations

To ensure compliance with the Money Laundering Regulations, the Registrar may require, at its absolute discretion, verification of the identity of the person by whom or on whose behalf the Provisional Allotment Letter is lodged with payment (which requirements are referred to below as the ''verification of identity requirements''). If the Provisional Allotment Letter is submitted by a UK regulated broker or intermediary acting as agent and which is itself subject to the Money Laundering Regulations, any verification of identity requirements are the responsibility of such broker or intermediary and not of the Registrar. In such case, the lodging agent's stamp should be inserted on the Provisional Allotment Letter.

The person lodging the Provisional Allotment Letter with payment and in accordance with the other terms as described above (the ''acceptor''), including any person who appears to the Registrar to be acting on behalf of some other person, shall thereby be deemed to agree to provide the Registrar with such information and other evidence as the Registrar may require to satisfy the verification of identity requirements.

The Registrar may therefore undertake electronic searches for the purposes of verifying identity. To do so, the Registrar may verify the details against the applicant's identity, but also may request further proof of identity.

If the Registrar determines that the verification of identity requirements apply to any acceptor or application, the relevant Rights Issue Shares (notwithstanding any other term of the Rights Issue) will not be issued to the relevant acceptor unless and until the verification of identity requirements have been satisfied in respect of that acceptor or application. The Registrar is entitled, in its absolute discretion, to determine whether the verification of identity requirements apply to any acceptor or application and whether such requirements have been satisfied, and neither the Registrar, Oriel Securities, nor Acal will be liable to any person for any loss or damage suffered or incurred (or alleged), directly or indirectly, as a result of the exercise of such discretion.

If the verification of identity requirements apply, failure to provide the necessary evidence of identity within a reasonable time may result in delays and potential rejection of an application. If, within a reasonable time and in any event by not later than 8 July 2014 following a request for verification of identity, the Registrar has not received evidence satisfactory to it as aforesaid, Acal may, in its absolute discretion, treat the relevant application as invalid, in which event the application monies will be returned (at the acceptor's risk) without interest to the account of the bank or building society on which the relevant cheque or banker's draft was drawn (without prejudice to the right of Acal to take proceedings to recover the amount by which the net proceeds of sale of the relevant Rights Issue Shares fall short of the amount payable thereon).

Submission of a Provisional Allotment Letter with the appropriate remittance will constitute a warranty to each of Acal, the Registrar, and Oriel Securities from the applicant that the Money Laundering Regulations will not be breached by application of such remittance.

The verification of identity requirements will not usually apply for the UK purposes if:

• (a) the applicant is an organisation required to comply with the Money Laundering Directive (the Council Directive on prevention of the use of the financial system for the purpose of money laundering (no.91/308/EEC)) as amended;

• (b) the acceptor is a regulated United Kingdom broker or intermediary acting as agent and is itself subject to the Money Laundering Regulations;

• (c) the applicant is a company whose securities are listed on a regulated market subject to specified disclosure obligations;

• (d) the applicant (not being an applicant who delivers his/her application in person) makes payment through an account in the name of such applicant with a credit institution which is subject to the Money Laundering Regulations or with a credit institution situated in a non-EEA State which imposes requirements equivalent to those laid down in that directive; or
• (e) the aggregate subscription price for the Rights Issue Shares is less than c15,000 (or its pounds sterling equivalent).

In other cases the verification of identity requirements may apply. The following guidance is provided in order to assist in satisfying the verification of identity requirements and to reduce the likelihood of difficulties or delays and potential rejection of an application (but does not limit the right of the Registrar to require verification of identity as stated above). Satisfaction of these requirements may be facilitated in the following ways:

• (a) if payment is made by cheque or banker's draft in pounds sterling drawn on a branch in the United Kingdom of a bank or building society which bears a UK bank sort code number in the top right-hand corner the following applies. Cheques, which must be drawn on the personal account of the individual investor where they have sole or joint title to the funds, should be payable to ''Equiniti Limited re Acal plc Rights Issue'' in respect of an application by a Qualifying Shareholder and crossed ''A/C Payee Only''. Third party cheques may not be accepted with the exception of building society cheques or banker's drafts where the building society or bank has confirmed the name of the account holder by stamping or endorsing the cheque/banker's draft to such effect. The account name should be the same as that shown on the Provisional Allotment Letter; or
• (b) if the Provisional Allotment Letter is lodged with payment by an agent which is an organisation of the kind referred to in 4.5(a) above or which is subject to anti-money laundering regulation in a country which is a member of the Financial Action Task Force (the non-European Union members of which are Argentina, Australia, Brazil, Canada, China, Gibraltar, Hong Kong, Iceland, Japan, Mexico, New Zealand, Norway, Russian Federation, Singapore, South Africa, Switzerland, Turkey, UK Crown Dependencies and the United States and, by virtue of their membership of the Gulf Co-operation Council, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates), the agent should provide with the Provisional Allotment Letter written confirmation that it has that status and a written assurance that it has obtained and recorded evidence of the identity of the person for whom it acts and that it will on demand make such evidence available to the Registrar and/or any relevant regulatory or investigatory authority, or if the agent is not such an organisation, it should contact the Registrar at the address set out in Part VI (''Directors, Company Secretary, Registered Office and Advisers'') of this document; or
• (c) if a Provisional Allotment Letter is lodged by hand by the applicant in person, he should ensure that he has with him evidence of identity bearing his photograph (for example, his passport) and evidence of his address.

Please call the Shareholder Helpline on 0871 384 2869 (from within the UK) or on +44 121 415 0828 (if calling from outside the UK). Calls to the 0871 384 2869 number are charged at 8 pence per minute (excluding VAT) plus network extras. Lines are open from 8.30 a.m. to 5.30 p.m. (London time) Monday to Friday (except UK public holidays). Calls to the Shareholder Helpline from outside the UK will be charged at the applicable international rate. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. Please note that the Shareholder Helpline operators cannot provide advice on the merits of the Acquisition or Rights Issue or nor give financial, tax, investment or legal advice.

4.6. Dealings in Nil Paid Rights

Subject to the fulfilment of the conditions set out in paragraph 2 of this Part XV, dealings on the London Stock Exchange in the Nil Paid Rights are expected to commence at 8.00 a.m. on 24 June 2014. A transfer of Nil Paid Rights can be made by renunciation of the Provisional Allotment Letter in accordance with the instructions printed on it and delivery of the Provisional Allotment Letter to the transferee or to a stockbroker, bank or other appropriate financial adviser. The latest time for registration of renunciation of Provisional Allotment Letters, nil paid, is expected to be 11.00 a.m. on 8 July 2014.

4.7. Dealings in Fully Paid Rights

After acceptance of the provisional allotment and payment in full in accordance with the provisions set out in this document and in the Provisional Allotment Letter, the Fully Paid Rights may be transferred by renunciation of the relevant Provisional Allotment Letter and lodging of the same, by post or by hand (during normal business hours only) to Corporate Actions, Equiniti Limited at Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA, so as to be received not later than 11.00 a.m. on 8 July 2014. To do this, Qualifying Non-CREST Shareholders will need to have their fully paid Provisional Allotment Letter returned to them after their acceptance has been effected by the Registrar. However, fully paid Provisional Allotment Letters will not be returned to Qualifying Non-CREST Shareholders unless their return is requested by ticking the appropriate box on the Provisional Allotment Letter. Thereafter, the Rights Issue Shares will be registered and transferable in the usual common form or, if they have been issued in or converted into uncertificated form, in electronic form under the CREST system.

4.8. Renunciation and splitting of Provisional Allotment Letters

The Provisional Allotment Letters are fully renounceable (save as required by the laws of certain overseas jurisdictions) and may be split up to 3.00 p.m. on 4 July 2014 nil paid and fully paid.

Qualifying Non-CREST Shareholders who wish to transfer all of their Nil Paid Rights or, after acceptance of the provisional allotment and payment in full, Fully Paid Rights comprised in a Provisional Allotment Letter may (save as required by the laws of certain overseas jurisdictions) renounce such allotment by completing and signing Form X on page 5 of the Provisional Allotment Letter (if it is not already marked ''Original Duly Renounced'') and passing the entire Provisional Allotment Letter to their stockbroker or bank or other appropriate financial adviser or to the transferee. Once a Provisional Allotment Letter has been so renounced, it will become a negotiable instrument in bearer form and the Nil Paid Rights or Fully Paid Rights (as appropriate) comprised in such letter may be transferred by delivery of such letter to the transferee, provided that a transferee must not have a registered address in, or be resident or located in, the United States or any other Excluded Territory. The latest time and date for registration of renunciation of Provisional Allotment Letters is 11.00 a.m. on 8 July 2014 and after such date the Rights Issue Shares will be in registered form, transferable by written instrument of transfer in the usual common form or, if they have been issued in or converted into uncertificated form, in electronic form under the CREST system. Qualifying Non-CREST Shareholders should note that fully paid Provisional Allotment Letters will not be returned to Qualifying Non-CREST Shareholders unless their return is requested.

If a holder of a Provisional Allotment Letter wishes to have only some of the Rights Issue Shares registered in his name and to transfer the remainder, or wishes to transfer all the Nil Paid Rights, or (if appropriate) Fully Paid Rights but to different persons, he may have the Provisional Allotment Letter split, for which purpose he must sign and date Form X on page 5 of the Provisional Allotment Letter. The Provisional Allotment Letter must then be delivered by post or by hand (during normal business hours only) to the appropriate address as set out in paragraph 4.2 of this Part XV by no later than 3.00 p.m. on 4 July 2014, to be cancelled and exchanged for the split Provisional Allotment Letters required. The number of split Provisional Allotment Letters required and the number of Nil Paid Rights or (as appropriate) Fully Paid Rights to be comprised in each split Provisional Allotment Letter should be stated in an accompanying letter. Form X on page 5 of split Provisional Allotment Letters will be marked ''Original Duly Renounced'' before issue. The holder of the split Provisional Allotment Letters should then follow the instructions in the preceding paragraph in relation to transferring the Nil Paid Rights or (if appropriate) Fully Paid Rights represented by each of the Provisional Allotment Letters.

Alternatively, Qualifying Non-CREST Shareholders who wish to take up some of their rights, without transferring the remainder, should complete Form X on page 5 of the original Provisional Allotment Letter and return it by post or by hand (during normal business hours only) to the Registrar at the appropriate address as set out in paragraph 4.2 of this Part XV, together with a covering letter confirming the number of Rights Issue Shares to be taken up and a cheque or banker's draft in pound sterling for the appropriate amount made payable to ''Equiniti Limited re Acal plc Rights Issue'' and crossed ''A/C payee only'' detailing the allotment number (which is on page 1 of the Provisional Allotment Letter) written on the reverse of the cheque or banker's draft to pay for this number of shares. In this case, the Provisional Allotment Letter and the cheque or banker's draft must be received by the Registrar by 11.00 am on 8 July 2014, being the last date and time for acceptance.

Acal reserves the right to refuse to register any renunciation in favour of any person in respect of which Acal believes such renunciation may violate applicable legal or regulatory requirements including (without limitation) any renunciation in the name of any person with an address outside the United Kingdom.

4.9. Registration in the names of Qualifying Non-CREST Shareholders

A Qualifying Non-CREST Shareholder who wishes to have all his entitlement to Rights Issue Shares registered in his name must accept and make payment for such allotment prior to the latest time for acceptance and payment in full, which is 11.00 a.m. on 8 July 2014, in accordance with the provisions set out in the Provisional Allotment Letter and this document, but need take no further action. A share certificate shall be sent to such Shareholder by post not later than 17 July 2014.

4.10. Registration in the names of persons other than Qualifying Non-CREST Shareholders originally entitled

A renouncee who wishes to have the Rights Issue Shares comprised in a Provisional Allotment Letter registered in his name, or his agent's name, must complete Form Y on page 5 of the Provisional Allotment Letter (unless the renouncee is a CREST member who wishes to hold such shares in uncertificated form, in which case the CREST Deposit Form must be completed – as set out in paragraph 5.2 of this Part XV) and lodge the entire letter when fully paid by post or by hand (during normal business hours only) with the Receiving Agent at the appropriate address as set out in paragraph 4.7 of this Part XV not later than the latest time for registration of renunciation which is 11.00 a.m. on 8 July 2014. Registration cannot be effected unless and until the Rights Issue Shares comprised in a Provisional Allotment Letter are fully paid.

The Rights Issue Shares comprised in two or more Provisional Allotment Letters (duly renounced where applicable) may be registered in the name of one holder (or joint holder) if Form X is completed on page 5 of one of the Provisional Allotment Letters (the ''Principal Letter'') and all other relevant Provisional Allotment Letters are delivered in one batch. Details of each relevant Provisional Allotment Letter (including the Principal Letter) should be listed in an attached letter and the allotment number of the Principal Letter should be entered into the space provided on each of the other Provisional Allotment Letters.

4.11. Deposit of Nil Paid Rights or Fully Paid Rights into CREST

The Nil Paid Rights or Fully Paid Rights represented by a Provisional Allotment Letter may be converted into uncertificated form, that is deposited into CREST (whether such conversion arises as a result of a renunciation of those rights or otherwise). Similarly, Nil Paid Rights or Fully Paid Rights held in CREST may be converted into certificated form, that is withdrawn from CREST. Subject as provided in the next paragraph or in the Provisional Allotment Letter, normal CREST procedures and timings apply in relation to any such conversion. You are recommended to refer to the CREST Manual for details of such procedures.

The procedure for depositing the Nil Paid Rights or Fully Paid Rights represented by a Provisional Allotment Letter into CREST, whether such rights are to be converted into uncertificated form in the name(s) of the person(s) whose name(s) and address(es) appear on page 1 of the Provisional Allotment Letter or in the name of a person or persons to whom the Provisional Allotment Letter has been renounced, is as follows: Form X and the CREST Deposit Form (both set out on page 5 of the Provisional Allotment Letter) will need to be completed and the Provisional Allotment Letter deposited with the ''CCSS''; in addition, the normal CREST stock deposit procedures will need to be carried out, except that: (a) it will not be necessary to complete and lodge a separate CREST Transfer Form (prescribed under the Stock Transfer Act 1963) with the CCSS; and (b) only the whole of the Nil Paid Rights or Fully Paid Rights represented by the Provisional Allotment Letter may be deposited into CREST. If you wish to deposit only some of the Nil Paid Rights or Fully Paid Rights represented by the Provisional Allotment Letter into CREST, you must first apply for split Provisional Allotment Letters. If the rights represented by more than one Provisional Allotment Letter are to be deposited, the CREST Deposit Form on each Provisional Allotment Letter must be completed and deposited. A Consolidation Listing Form must not be used.

A holder of the Nil Paid Rights or Fully Paid Rights represented by a Provisional Allotment Letter who is proposing to convert those rights into uncertificated form (whether following a renunciation of such rights or otherwise) is recommended to ensure that the conversion procedures are implemented in sufficient time to enable the person holding or acquiring the Nil Paid Rights or Fully Paid Rights in CREST following the conversion to take all necessary steps in connection with taking up the entitlement prior to 11.00 a.m. on 8 July 2014. In particular, having regard to processing times in CREST and on the part of the Receiving Agent, the latest recommended time for depositing a renounced Provisional Allotment Letter (with Form X and the CREST Deposit Form on page 5 of the Provisional Allotment Letter duly completed) with the CCSS (to enable the person acquiring the Nil Paid Rights or Fully Paid Rights in CREST as a result of the conversion to take all necessary steps in connection with taking up the entitlement prior to 11.00 a.m. on 8 July 2014) is 3.00 p.m. on 3 July 2014.

When Form X and the CREST Deposit Form (both set out on page 5 of the Provisional Allotment Letter) have been completed, the title to the Nil Paid Rights or the Fully Paid Rights represented by the relevant Provisional Allotment Letter will cease forthwith to be renouncable or transferable by delivery and, for the avoidance of doubt, any entries in Form X on page 5 of such Provisional Allotment Letter will not be recognised or acted upon by the Registrar. All renunciations or transfers of the Nil Paid Rights or Fully Paid Rights must be effected through the means of the CREST system once such rights have been deposited into CREST.

CREST sponsored members should contact their CREST sponsor as only their CREST sponsor will be able to take the necessary action to take up their entitlement or otherwise to deal with the Nil Paid Rights or Fully Paid Rights of the CREST sponsored member.

Note: Surrender of this PAL with (a) Form X purporting to have been signed by the same person(s) in whose name(s) it was issued or, in the case of a split PAL, marked ''Original Duly Renounced'', and (b) where applicable, Form Y or the CREST Deposit Form duly completed, shall be conclusive evidence in favour of Acal plc and Equiniti of: (i) the right of the person(s) named in Form Y or the CREST Deposit Form of this PAL to be registered as the holder(s) of the Rights Issue Shares comprised in this PAL; (ii) the title of the person(s) lodging this PAL to deal with the same and to receive split PALs and/or a share certificate or a deposit to their CREST member's account (as appropriate); and (iii) the authority of the person(s) completing Form Y or the CREST Deposit Form. All documents will be despatched by post at the risk of the person(s) entitled to them. For the avoidance of doubt, each PAL deposited with the CCSS is not considered to be a bearer document unless delivered. Liability is limited to standard stock deposit replacement costs in accordance with Euroclear UK's standard terms and conditions.

4.12. Issue of Rights Issue Shares in definitive form

Definitive share certificates in respect of the Rights Issue Shares to be held in certificated form are expected to be dispatched by post by no later than 17 July 2014 at the risk of the person(s) entitled to them, to accepting Qualifying Non-CREST Shareholders and renouncees or their agents or, in the case of joint holdings, to the first-named Shareholder at their registered address (unless lodging agent details have been completed in box 5 on page 5 of the Provisional Allotment Letter). After dispatch of definitive share certificates, Provisional Allotment Letters will cease to be valid for any purpose whatsoever. Pending dispatch of definitive share certificates and the inscription of the member in Acal's register of members, instruments of transfer of the Rights Issue Shares will be certified by the Registrar against the lodgement of fully paid Provisional Allotment Letters and/or, in the case of renunciations, against the Provisional Allotment Letters held by the Registrar.

5. Action to be taken by Qualifying Crest Shareholders in Relation to Nil Paid Rights in Crest

5.1. General

Subject as provided in paragraph 7 of this Part XV in relation to certain Overseas Shareholders, each Qualifying CREST Shareholder is expected to receive a credit to his CREST stock account of his entitlement to Nil Paid Rights as soon as practicable after 8.00 a.m. on 24 June 2014. For Qualifying CREST Shareholders, the CREST stock account to be credited will be an account under the participant ID and member account ID that apply to the Existing Shares held on the Record Date by the Qualifying CREST Shareholder in respect of which the Nil Paid Rights are provisionally allotted.

The Nil Paid Rights will constitute a separate security and can accordingly be transferred, in whole or in part, by means of CREST in the same manner as any other security that is admitted to CREST.

If for any reason it is impracticable to credit the stock accounts of Qualifying CREST Shareholders or to enable the Nil Paid Rights by 8.00 on 24 June 2014, the Provisional Allotment Letters shall, unless Acal decides otherwise, be sent out in substitution for the Nil Paid Rights which have not been so credited or enabled and the expected timetable as set out in this document may be adjusted as appropriate. References to dates and times in this document should be read as subject to any such adjustment. Acal will make an appropriate announcement to a Regulatory Information Service giving details of the revised dates but Qualifying CREST Shareholders may not receive any further written communication.

CREST members who wish to take up all or part of, or otherwise to transfer all or part of, their Rights held by them in CREST, should refer to the CREST Manual for further information on the CREST procedures referred to below. If you are a CREST sponsored member, you should consult your CREST sponsor if you wish to take up your entitlement as only your CREST sponsor will be able to take the necessary action to take up your entitlements or otherwise deal with your Nil Paid Rights or Fully Paid Rights.

5.2. Procedure for acceptance and payment

(a) MTM instructions

CREST members who wish to take up all or part of their entitlement in respect of Nil Paid Rights in CREST must send (or, if they are CREST sponsored members, procure that their CREST sponsor sends) an MTM instruction to Euroclear which, on its settlement, will have the following effect:

• i. the crediting of a stock account of the Receiving Agent under the participant ID and member account ID specified below, with the number of Nil Paid Rights to be taken up;
• ii. the creation of a settlement bank payment obligation (as this term is defined in the CREST Manual), in accordance with the RTGS payment mechanism (as this term is defined in the CREST Manual), in favour of the RTGS settlement bank (as this term is defined in the CREST Manual) of the Receiving Agent in pounds sterling, in respect of the full amount payable on acceptance in respect of the Nil Paid Rights referred to in sub-paragraph (i) above; and
• iii. the crediting of a stock account of the accepting CREST member (being an account under the same participant ID and member account ID as the account from which the Nil Paid Rights are to be debited on settlement of the MTM instruction) of the corresponding number of Fully Paid Rights to which the CREST member is entitled on taking up his Nil Paid Rights referred to in sub-paragraph (i) above.

(b) Contents of MTM instructions

• i. The MTM instruction must be properly authenticated in accordance with Euroclear's specifications and must contain, in addition to the other information that is required for settlement in CREST, the following details:
• ii. the number of Nil Paid Rights to which the acceptance relates;
• iii. the participant ID of the accepting CREST member;
• iv. the member account ID of the accepting CREST member from which the Nil Paid Rights are to be debited;
• v. the participant ID of Equiniti, in its capacity as a CREST receiving agent. This is 2RA28;
• vi. the member account ID of Equiniti, in its capacity as a CREST receiving agent. This is RA174901;
• vii. the number of Fully Paid Rights that the CREST member is expecting to receive on settlement of the MTM instruction. This must be the same as the number of Nil Paid Rights to which the acceptance relates;
• viii. the amount payable by means of the CREST assured payment arrangements on settlement of the MTM instruction. This must be the full amount payable on acceptance in respect of the number of Nil Paid Rights to which the acceptance relates;
• ix. the intended settlement date (which must be on or before 11.00 a.m. on 8 July 2014);
• x. the Nil Paid Rights ISIN. This is GB00BN573Z24;
• xi. the Fully Paid Rights ISIN. This is GB00BN574045;
• xii. the Corporate Action Number (as this term is defined in the CREST Manual) to the Rights Issue. This will be available by viewing the relevant corporate action details in CREST;
• xiii. contact name and telephone numbers in the shared notes field.

(c) Valid acceptance

An MTM instruction complying with each of the requirements as to authentication and contents set out in sub-paragraph (b) of this paragraph 5.2 will constitute a valid acceptance where either:

• i. the MTM instruction settles by not later than 11.00 a.m. on 8 July 2014; or
• ii. at the discretion of Acal and Oriel Securities: (A) the MTM instruction is received by Euroclear by not later than 11.00 a.m. on 8 July 2014; and (B) the number of Nil Paid Rights inserted in the MTM instruction is credited to the CREST stock member account of the accepting CREST member specified in the MTM instruction at 11.00 a.m. on 8 July 2014; and (C) the relevant MTM instruction settles by 2.00 p.m. on 8 July 2014 (or such later date as Acal and Oriel Securities have determined).

An MTM instruction will be treated as having been received by Euroclear for these purposes at the time at which the instruction is processed by the Network Provider's Communications Host (as this term is defined in the CREST Manual) at Euroclear of the network provider used by the CREST member (or by the CREST sponsored member's CREST sponsor). This will be conclusively determined by the input time stamp applied to the MTM instruction by the Network Provider's Communications Host.

(d) Representations, warranties and undertakings of CREST members

A CREST member, or CREST sponsored member who makes a valid acceptance in accordance with this paragraph 5.2, represents, warrants and undertakes to Acal and the Underwriter that he/she has taken (or procured to be taken), and will take (or will procure to be taken), whatever action is required to be taken by him/her or by his/her CREST sponsor (as appropriate) to ensure that the MTM instruction concerned is capable of settlement at 11.00 a.m. on 8 July 2014 and remains capable of settlement at all times after that until 2.00 p.m. on 8 July 2014 (or until such later time and date as Acal and Oriel Securities may determine). In particular, the CREST member or CREST sponsored member represents, warrants and undertakes that at 11.00 a.m. on 8 July 2014 and at all times thereafter until 2.00 p.m. on 8 July 2014 (or until such later time and date as Acal and Oriel Securities may determine) there will be sufficient Headroom within the Cap (as those terms are defined in the CREST Manual) in respect of the cash memorandum account to be debited with the amount payable on acceptance to permit the MTM instruction to settle. CREST sponsored members should contact their CREST sponsor if they are in any doubt.

If there is insufficient Headroom within the Cap in respect of the cash memorandum account of a CREST member or CREST sponsored member for such amount to be debited or the CREST member's or CREST sponsored member's acceptance is otherwise treated as invalid and Rights Issue Shares have already been allotted to such CREST member or CREST sponsored member, Acal and Oriel Securities may (in their absolute discretion as to manner, timing and terms) make arrangements for the sale of such shares on behalf of that CREST member or CREST sponsored member and hold the proceeds of sale (net of Acal's reasonable estimate of any loss that it has suffered as a result of the acceptance being treated as invalid and of the expenses of sale, and of all amounts payable by the CREST member or CREST sponsored member pursuant to the provisions of this Part XV in respect of the acquisition of such shares) on behalf of such CREST member or CREST sponsored member. None of Acal or Oriel Securities or any other person shall be responsible for, or have any liability for, any loss, expenses or damage suffered by such CREST member or CREST sponsored member as a result.

A Qualifying CREST Shareholder will be deemed to have made the representations and warranties set out in section 5.2(d) of this Part XV and the agreement and acknowledgement set out in section 4.3 of this Part XV.

(e) CREST procedures and timings

CREST members and CREST sponsors (on behalf of CREST sponsored members) should note that Euroclear does not make available special procedures in CREST for any particular corporate action. Normal system timings and limitations will therefore apply in relation to the input of an MTM instruction and its settlement in connection with the Rights Issue. It is the responsibility of the CREST member concerned to take (or, if a CREST sponsored member, to procure that his CREST sponsor takes) the action necessary to ensure that a valid acceptance is received as stated above by 11.00 a.m. on 8 July 2014. In this connection, CREST members and (where applicable) CREST sponsors are referred in particular to those sections of the CREST Manual concerning the practical limitations of the CREST system and timings.

(f) CREST member's undertaking to pay

A CREST member or CREST sponsored member who makes a valid acceptance in accordance with the procedures set out in this paragraph 5.2 undertakes to pay to the Registrar, or to procure the payment to the Registrar of, the amount payable in pounds sterling on acceptance in accordance with the above procedures or in such other manner as Acal may require (it being acknowledged that, where payment is made by means of the RTGS payment mechanism (as defined in the CREST Manual), the creation of a RTGS settlement bank (as this term is defined in the CREST Manual) payment obligation in pounds sterling in favour of the Registrar's RTGS settlement bank, in accordance with the RTGS payment mechanism, shall, to the extent of the obligation so created, discharge in full the obligation of the CREST member (or CREST sponsored member) to pay the amount payable on acceptance); and requests that the Fully Paid Rights and/or Rights Issue Shares to which they will become entitled be issued to them on the terms set out in this document and subject to Acal's Articles. If the payment obligations of the relevant CREST member in relation to such Rights Issue Shares are not discharged in full and such Rights Issue Shares have already been issued to the CREST member or CREST sponsored member, Acal and Oriel Securities may (in their absolute discretion as to the manner, timing and terms) make arrangements for the sale of such shares on behalf of that CREST member or CREST sponsored member and hold the proceeds of sale (net of expenses, and all amounts payable by the CREST member or CREST sponsored member pursuant to the provisions of this Part XV in respect of the acquisition of such shares) or an amount equal to the original payment of the CREST member or CREST sponsored member (whichever is lower) on trust for such CREST member or CREST sponsored member. In these circumstances, none of Oriel Securities or Acal shall be responsible for, or have any liability for, any losses, expenses or damages arising as a result.

(g) Discretion as to rejection and validity of acceptances

Acal may in its absolute discretion (after consulting with Oriel Securities):

• (i) reject any acceptance constituted by an MTM instruction, which is otherwise valid, in the event of breach of any of the representations, warranties and undertakings set out or referred to in this Part XV. Where an acceptance is made as described in this paragraph 5.2(g) which is otherwise valid, and the MTM instruction concerned fails to settle by 2.00 p.m. on 8 July 2014 (or by such later time and date as Acal may determine), Acal shall be entitled to assume, for the purposes of its right to reject an acceptance as described in this paragraph 5.2(g), that there has been a breach of the representations, warranties and undertakings set out or referred to in this paragraph 5.2(g) unless Acal are aware of any reason outside the control of the CREST member or CREST sponsor (as appropriate) concerned for the MTM instruction to settle;
• (ii) treat as valid (and binding on the CREST member or CREST sponsored member concerned) an acceptance which does not comply in all respects with the requirements as to validity set out or referred to in this paragraph 5.2;
• (iii) accept an alternative properly authenticated dematerialised instruction from a CREST member or (where applicable) a CREST sponsor as constituting a valid acceptance in substitution for, or in addition to, an MTM instruction and subject to such further terms and conditions as Acal may determine;
• (iv) treat a properly authenticated dematerialised instruction (the ''First Instruction'') as not constituting a valid acceptance if, at the time at which the Registrar receives a properly authenticated dematerialised instruction giving details of the first instruction, either Acal or the Registrar has received actual notice from Euroclear of any of the matters specified in CREST Regulation 35(5)(a) in relation to the first instruction. These matters include notice that any information contained in the first instruction was incorrect or notice of lack of authority to send the first instruction; and
• (v) accept an alternative instruction or notification from a CREST member or (where applicable) a CREST sponsor, or extend the time for acceptance and/or settlement of an MTM instruction or any alternative instruction or notification, if, for reasons or due to circumstances outside the control of any CREST member or CREST sponsored member or (where applicable) CREST sponsor, the CREST member or CREST sponsored member is unable validly to take up all or part of his/her Nil Paid Rights by means of the above procedures. In normal circumstances, this discretion is only likely to be exercised in the event of any interruption, failure or breakdown of CREST (or of any part of CREST) or on the part of facilities and/or systems operated by the Receiving Agent in connection with CREST.

5.3. Money Laundering Regulations

If you hold your Nil Paid Rights in CREST and apply to take up all or part of your entitlement as agent for one or more persons and you are not a UK or EU regulated person or institution (e.g. a bank, a broker or another UK financial institution), then, irrespective of the value of the application, the Registrar is required to take reasonable measures to establish the identity of the person or persons on whose behalf you are making the application. Such Qualifying CREST Shareholders must therefore contact the Registrar before sending any MTM instruction or other instruction so that appropriate measures may be taken.

Submission of an MTM instruction which constitutes, or which may on its settlement constitute, a valid acceptance as described above constitutes a warranty and undertaking by the applicant to provide promptly to the Registrar any information the Registrar may specify as being required for the purposes of the Money Laundering Regulations. Pending the provision of evidence satisfactory to the Registrar as to identity, the Registrar, having consulted with Acal and Oriel Securities, may take, or omit to take, such action as it may determine to prevent or delay settlement of the MTM instruction. If satisfactory evidence of identity has not been provided within a reasonable time, the Registrar will not permit the MTM instruction concerned to proceed to settlement; but without prejudice to the right of Acal and Oriel Securities to take proceedings to recover any loss suffered by it/them as a result of failure by the applicant to provide satisfactory evidence.

5.4. Dealings in Nil Paid Rights

Subject to the fulfillment of the conditions set out in paragraph 2 of this Part XV, dealings in the Nil Paid Rights on the London Stock Exchange are expected to commence at 8.00 a.m. on 24 June 2014. Dealings in Nil Paid Rights can be made by means of CREST in the same manner as any other security that is admitted to CREST. The Nil Paid Rights are expected to be disabled in CREST after the close of CREST business on 8 July 2014.

5.5. Dealings in Fully Paid Rights

After acceptance and payment in full in accordance with the provisions set out in this document, the Fully Paid Rights may be transferred (in whole or in part) by means of CREST in the same manner as any other security that is admitted to CREST. The last time for settlement of any transfer of Fully Paid Rights in CREST is expected to be 11.00 a.m. on 8 July 2014. The Fully Paid Rights are expected to be disabled in CREST after the close of CREST business on 8 July 2014.

After 9 July 2014, the Rights Issue Shares will be registered in the name(s) of the person(s) entitled to them in Acal's register of members and will be transferable in the usual way.

5.6. Withdrawal of Nil Paid Rights or Fully Paid Rights from CREST

Nil Paid Rights or Fully Paid Rights held in CREST may be converted into certificated form, that is withdrawn from CREST. Normal CREST procedures (including timings) apply in relation to any such conversion.

The recommended latest time for receipt by Euroclear of a properly authenticated dematerialised instruction requesting withdrawal of Nil Paid Rights from CREST is 4.30 p.m. on 2 July 2014, so as to enable the person acquiring or (as appropriate) holding the Nil Paid Rights following the conversion to take all necessary steps in connection with taking up the entitlement prior to 11.00 a.m. on 8 July 2014. You are recommended to refer to the CREST Manual for details of such procedures.

5.7. Issue of Rights Issue Shares in CREST

Rights Issue Shares will be issued in uncertificated form to those persons registered as holding Fully Paid Rights in CREST at the close of business on the date on which the Fully Paid Rights are disabled. The Registrar will instruct Euroclear to credit the appropriate stock accounts of those persons (under the same participant ID and member account ID that applied to the Fully Paid Rights held by those persons) with their entitlements to Rights Issue Shares with effect from the next Business Day (expected to be 9 July 2014).

5.8. Right to allot/issue in certificated form

Despite any other provision of this document, Acal reserves the right to allot and to issue any Nil Paid Rights, Fully Paid Rights or Rights Issue Shares in certificated form. In normal circumstances, this right is only likely to be exercised in the event of an interruption, failure or breakdown of CREST (or of any part of CREST) or of a part of the facilities and/or systems operated by the Receiving Agent in connection with CREST.

6. Procedure in Respect of Rights not taken up

If an entitlement to Rights Issue Shares is not validly taken up by 11.00 a.m. on 8 July 2014 in accordance with the procedure laid down for acceptance and payment, then that provisional allotment will be deemed to have been declined and will lapse. Oriel Securities will endeavour to procure, by not later than 4.30 p.m. on the second dealing day after the last date for acceptance of the Rights Issue, subscribers for all (or as many as possible) of those Rights Issue Shares not taken up if a premium over the total of the Rights Issue Price and the expenses of procuring such subscribers (including any applicable brokerage and commissions and amounts in respect of VAT which are not recoverable) can be obtained.

Notwithstanding the above, Oriel Securities may cease to endeavour to procure any such subscribers if, in the reasonable opinion of Oriel Securities, there is no reasonable likelihood that any such subscribers can be so procured at such a price by such time. If and to the extent that subscribers cannot be procured on the basis outlined above, the relevant Rights Issue Shares will be subscribed for by Oriel Securities as principal pursuant to the Underwriting Agreement or by the sub-underwriters (if any) procured by Oriel Securities, in each case, at the Rights Issue Price on the terms and subject to the conditions of the Underwriting Agreement.

Any premium over the aggregate of the Rights Issue Price and the expenses of procuring subscribers (including any applicable brokerage and commissions and amounts in respect of VAT which are not recoverable) shall be paid (subject as provided in this paragraph 6):

• (a) where the provisional allotment was, at the time of its lapsing, represented by a Provisional Allotment Letter, to the person whose name and address appeared on page 1 of the Provisional Allotment Letter;
• (b) where the Nil Paid Rights were, at the time they lapsed, in uncertificated form, to the person registered as the holder of those Nil Paid Rights at the time of their disablement in CREST; and
• (c) to the extent not provided above, where an entitlement to Rights Issue Shares was not taken up by an Overseas Shareholder (including for the avoidance of doubt an Excluded Shareholder), to that Overseas Shareholder.

Rights Issue Shares for which subscribers are procured on this basis will be re-allotted to such subscribers and the aggregate of any premiums (being the amount paid by such subscribers after deducting the price at which the Rights Issue Shares are offered pursuant to the Rights Issue and the expenses of procuring such subscribers including any applicable brokerage and commissions and amounts in respect of VAT which are not recoverable tax), if any, will be paid (without interest) to those persons entitled (as referred to above) pro rata to the entitlements not taken up, save that no payment will be made of amounts of less than £5, which amounts will be aggregated and ultimately paid to Acal. Cheques for the amounts due will be sent in pounds sterling, by first class post, at the risk of the person(s) entitled, to their registered addresses (the registered address of the first named in the case of joint holders), provided that where any entitlement concerned was held in CREST, the amount due will, unless Acal (in its absolute discretion) otherwise determines, be satisfied by Acal procuring the creation of an assured payment obligation in favour of the relevant CREST member's (or CREST sponsored member's) RTGS settlement bank in respect of the cash amount concerned in accordance with the RTGS payment mechanism.

Any transactions undertaken pursuant to this paragraph 6 shall be deemed to have been undertaken at the request of the persons who did not take up their entitlements and none of Acal, Oriel Securities nor any other person procuring subscribers shall be responsible for any loss or damage (whether actual or alleged) arising from the terms of or timing of any such acquisition, any decision not to endeavour to procure subscribers or the failure to procure subscribers on the basis described above.

Shareholders will not be entitled to apply for Rights Issue Shares in excess of their entitlement.

7. Overseas Shareholders and Selling and Transfer Restrictions

7.1. General

Whilst Overseas Shareholders (other than those in Excluded Territories) are entitled to participate in the Rights Issue, the offer of Nil Paid Rights, Fully Paid Rights, Provisional Allotment Letters and/or Rights Issue Shares pursuant to the Rights Issue and the distribution of this document or any other document relating to the Rights Issue (including the Provisional Allotment Letter) to persons resident in, or who are citizens of, or who have a registered address in a jurisdiction other than the United Kingdom, may be affected by the laws of the relevant jurisdiction. Those persons should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their rights under the Rights Issue. It is the responsibility of all persons outside the United Kingdom (including, without limitation, custodians, nominees and trustees) receiving this document and/or a Provisional Allotment Letter and/or a credit of Nil Paid Rights to a stock account in CREST and wishing to accept the offer of Rights Issue Shares to satisfy themselves as to full observance of the laws of the relevant territory, including obtaining all necessary governmental or other consents which may be required, observing all other requisite formalities needing to be observed and paying any issue, transfer or other taxes due in such territory.

This paragraph 7.1 is intended as a general guide only. Any Overseas Shareholder who is in doubt as to his position should consult his own Independent Professional Adviser without delay. It sets out certain restrictions applicable to Qualifying Shareholders who have registered addresses outside the United Kingdom, who are citizens or residents of countries other than the United Kingdom, or who are persons (including, without limitation, custodians, nominees and trustees) who have a contractual or legal obligation to forward this document to a jurisdiction outside the United Kingdom or who hold Existing Shares for the account or benefit of any such person. The restrictions set out in this paragraph 7 will also apply to any investors who acquire Rights Issue Shares in connection with the placement of Rights Issue Shares not subscribed for in the Rights Issue.

Receipt of this document and/or a Provisional Allotment Letter or the crediting of Nil Paid Rights to a stock account in CREST will not constitute an offer of securities for subscription, sale or purchase in those jurisdictions in which it would be illegal to make such an invitation or offer and, in those circumstances, this document and/or a Provisional Allotment Letter must be treated as sent for information only and should not be copied or redistributed. Rights Issue Shares will be provisionally allotted (nil paid) to all Qualifying Shareholders, including all Qualifying Shareholders with registered addresses in any of the Excluded Territories. A Provisional Allotment Letter will not be sent to, and Nil Paid Rights will not be credited to CREST accounts of, persons with registered addresses in the United States or an Excluded Territory or their agent or intermediary, except where Acal is satisfied that such action would not result in the contravention of any registration or other legal requirement in any jurisdiction.

No person receiving a copy of this document and/or an Provisional Allotment Letter and/or receiving a credit of Nil Paid Rights to a stock account in CREST in any territory other than the United Kingdom may treat the same as constituting an invitation or offer to him nor should he in any event use the Provisional Allotment Letter or deal with Nil Paid Rights or Fully Paid Rights in CREST unless, in the relevant territory, such an invitation or offer could lawfully be made to him or the Provisional Allotment Letter could lawfully be used or dealt with without contravention of any registration or other legal requirements.

Accordingly, persons receiving a copy of this document and/or a Provisional Allotment Letter or whose stock account in CREST is credited with Nil Paid Rights or Fully Paid Rights should not, in connection with the Rights Issue, distribute or send the same in or into, or transfer Nil Paid Rights or Fully Paid Rights to any person in or into, the United States or an Excluded Territory. If a Provisional Allotment Letter or credit of Nil Paid Rights or Fully Paid Rights in CREST is received by any person in any Excluded Territory, or by their agent or nominee in any such territory, he must not seek to take up the rights referred to in the Provisional Allotment Letter or in this document or renounce the Provisional Allotment Letter or transfer the Nil Paid Rights or Fully Paid Rights in CREST unless Acal determines that such actions would not violate applicable legal or regulatory requirements. Any person who does forward this document or a Provisional Allotment Letter into any such territories (whether under contractual or legal obligation or otherwise) should draw the recipient's attention to the contents of this paragraph 7.1.

Subject to this paragraph 7.1, any person (including, without limitation, nominees, agents and trustees) outside the United Kingdom wishing to take up his rights under the Rights Issue (or to do so on behalf of someone else) must satisfy himself as to full observance of the applicable laws of any relevant territory including obtaining any requisite governmental or other consents, observing any other requisite formalities and paying any issue, transfer or other taxes due in such territories.

None of Acal, Oriel Securities, nor either of their respective representatives, is making any representation to any offeree or purchaser of the Rights Issue Shares, Nil Paid Rights or Fully Paid Rights regarding the legality of an investment in the Rights Issue Shares, Nil Paid Rights or Fully Paid Rights by such offeree or purchaser under the laws applicable to such offeree or purchaser.

Acal reserves the right to treat as invalid any acceptance or purported acceptance of the offer of Nil Paid Rights, Fully Paid Rights, Provisional Allotment Letters or Rights Issue Shares that appears to Acal or its agents to have been executed, effected or dispatched from any Excluded Territory or in a manner that may involve a breach of the laws or regulations of any jurisdiction or if Acal or its agents believe that the same may violate applicable legal or regulatory requirements or if it provides an address for delivery of the share certificates of the Rights Issue Shares or, in the case of a credit of Rights Issue Shares in CREST, to a CREST member whose registered address would be in any Excluded Territory or any other jurisdiction outside the United Kingdom in which it would be unlawful to deliver such share certificates or make such a credit.

The attention of Overseas Shareholders is drawn to sections 7.2 to 7.6 below.

Notwithstanding any other provision of this document or the Provisional Allotment Letter Acal reserves the right to permit any Qualifying Shareholder to take up rights, if in its sole and absolute discretion, it is satisfied that the transaction in question is exempt from, or not subject to, the legislation or regulations giving rise to the restrictions in question.

Those Shareholders who wish, and are permitted, to take up their entitlement should note that payments must be made as described in paragraph 4.4 in relation to Qualifying Non-CREST Shareholders and paragraph 5.2 in relation to Qualifying CREST Shareholders of this Part XV.

The provisions of paragraph 6 of this Part XV will apply generally to Qualifying Shareholders with registered addresses in the Excluded Territories who do not or are unable to take up Rights Issue Shares provisionally allotted to them.

7.2. Offering and transfer restrictions relating to the United States

The Nil Paid Rights, the Fully Paid Rights and the Rights Issue Shares have not been nor will they be registered under the US Securities Act or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, in or within the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in accordance with any applicable securities laws of any states or other jurisdiction of the United States.

Acal is not extending the Rights Issue into the United States and none of this document and the Provisional Allotment Letters constitute or will constitute an offer or invitation to apply for an offer or an invitation to acquire any Nil Paid Rights, the Fully Paid Rights and the Rights Issue Shares in the United States. Neither this document nor any Provisional Allotment Letters will be sent to any Shareholders with a registered address in the United States.

Provisional Allotment Letters or renunciations thereof sent from or post-marked in the United States will be deemed to be invalid and all persons acquiring Rights Issue Shares and wishing to hold such Rights Issue Shares in registered form must provide an address for registration of the Rights Issue Shares outside the United States.

Any person who acquires Nil Paid Rights, the Fully Paid Rights and the Rights Issue Shares will be deemed to have declared, warranted and agreed, by accepting delivery of this document or the Provision Allotment Letters, taking up their entitlement or accepting delivery of the Nil Paid Rights, the Fully Paid Rights and the Rights Issue Shares, that they are not, and that at the time of acquiring the Nil Paid Rights, the Fully Paid Rights and the Rights Issue Shares they will not be, in the United States or acting on a non-discretionary basis for a person located within the United States and that they are not acquiring the Nil Paid Rights, the Fully Paid Rights and the Rights Issue Shares with a view to the offer, sale, resale, transfer, deliver or distribution, directly or indirectly, of any Nil Paid Rights, the Fully Paid Rights and the Rights Issue Shares in the United States or where the Company believes will result in the contravention of any applicable legal requirements in any jurisdiction.

Each such person further will be deemed to have declared, warranted and agreed that: it acknowledges (or if it is a broker-dealer acting on behalf of a customer, its customer has confirmed to it that such customer acknowledges) that the Nil Paid Rights, the Fully Paid Rights and the Rights Issue Shares have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and are being distributed and offered outside the United States in reliance on Regulation S; it is acquiring the Nil Paid Rights, the Fully Paid Rights or the Rights Issue Shares from Acal in an ''offshore transaction'' as defined in and meeting the requirements of Regulation S; and the Nil Paid Rights, the Fully Paid Rights and the Rights Issue Shares have not been offered to it by Acal by means of any ''directed selling efforts'' as defined in Regulation S.

Acal, having first consulted with Oriel Securities, reserves the right to treat as invalid any acceptance or purported acceptance of Rights issue Shares that appears to Acal to have been executed in, dispatched from or that provides an address for delivery of share certificates for Rights Issue Shares in the United States. Acal will not be bound to allot (on a non-provisional basis) or issue any Nil Paid Rights, the Fully Paid Rights and the Rights Issue Shares to any person with an address in, or who is otherwise located in, the United States in whose favour a Provisional Allotment Letter or any Nil Paid Rights, the Fully Paid Rights and the Rights Issue Shares may be transferred or renounced.

7.3. Other overseas territories

Provisional Allotment Letters will be posted to Qualifying Non-CREST Shareholders (other than, subject to certain limited exceptions, all Qualifying Shareholders with registered addresses in the Excluded Territories) and Nil Paid Rights will be credited to the CREST stock accounts of Qualifying CREST Shareholders with registered addresses in any country other than the United States or an Excluded Territory. No offer of or invitation to subscribe for Rights Issue Shares is being made by virtue of this document or the Provisional Allotment Letters into any of the Excluded Territories. Qualifying Shareholders in jurisdictions other than the Excluded Territories may, subject to the laws of their relevant jurisdiction, accept their rights under the Rights Issue in accordance with the instructions set out in this document and, in the case of Qualifying Non-CREST Shareholders only, the Provisional Allotment Letters.

Qualifying Shareholders who have registered addresses in or who are resident in, or who are citizens of, countries other than the United Kingdom should consult their appropriate professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their Nil Paid Rights or to acquire Fully Paid Rights or Rights Issue Shares. If you are in any doubt as to your eligibility to accept the offer of Rights Issue Shares or to deal with Nil Paid Rights or Fully Paid Rights, you should contact your appropriate professional adviser immediately.

(a) EEA States

In relation to the EEA States that have implemented the Prospectus Directive (each, a ''Relevant Member State''), with effect from and including the date on which the Prospectus Directive was implemented in that relevant member state (the ''Relevant Implementation Date''), no Rights Issue Shares, Nil Paid Rights or Fully Paid Rights have been offered or will be offered pursuant to the Rights Issue to the public in that relevant member state prior to the publication of a prospectus in relation to the Rights Issue Shares, Nil Paid Rights and Fully Paid Rights which has been approved by the competent authority in that relevant member state or, where appropriate, approved in another relevant member state and notified to the competent authority in the relevant member state, all in accordance with the Prospectus Directive, except that with effect from and including the relevant implementation date, offers of Rights Issue Shares, Nil Paid Rights or Fully Paid Rights may be made to the public in that relevant member state at any time under the following exemptions under the Prospectus Directive, if they are implemented in that relevant member state:

(i) to any legal entity which is a qualified investor, as defined in the Prospectus Directive;

• (ii) to fewer than 100, or if the relevant member state has implemented the relevant provisions of the PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) in such relevant member states; or
• (iii) in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of Rights Issue Shares, Nil Paid Rights or Fully Paid Rights shall result in a requirement for the publication by Acal, Oriel Securities, a prospectus pursuant to Article 3 of the Prospectus Directive.

For this purpose, the expression ''an offer of any Rights Issue Shares, Nil Paid Rights or Fully Paid Rights to the public'' in relation to any Rights Issue Shares, Nil Paid Rights and Fully Paid Rights in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the Rights Issue and any Rights Issue Shares, Nil Paid Rights and Fully Paid Rights to be offered so as to enable an investor to decide to acquire any Rights Issue Shares, Nil Paid Rights or Fully Paid Rights, as the same may be varied in that relevant member state by any measure implementing the Prospectus Directive in that relevant member state.

7.4. Representations and warranties relating to Overseas Shareholders

(a) Qualifying Non-CREST Shareholders

Any person accepting and/or renouncing a Provisional Allotment Letter or requesting registration represents and warrants to Acal and Oriel Securities that, except where proof has been provided to Acal's satisfaction that such person's use of the Provisional Allotment Letter will not result in the contravention of any applicable legal requirements in any jurisdiction:

• (i) such person is not accepting and/or renouncing the Provisional Allotment Letter from within the any Excluded Territory;
• (ii) such person is not in any territory in which it is unlawful to make or accept an offer to subscribe for Rights Issue Shares or to use the Provisional Allotment Letter in any manner in which such person has used or will use it;
• (iii) such person is not acting on a non-discretionary basis for a person located within any Excluded Territory (except as agreed with Acal) or any territory referred to in (ii) above at the time the instruction to accept or renounce was given; and
• (iv) such person is not acquiring Rights Issue Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Rights Issue Shares into any Excluded Territory.

Acal may treat as invalid any acceptance or purported acceptance of the allotment of Rights Issue Shares comprised in, or renunciation or purported renunciation of, a Provisional Allotment Letter if it:

• (i) appears to Acal or Oriel Securities to have been executed in or dispatched from the United States or any other Excluded Territory or otherwise in a manner which may involve a breach of the laws of any jurisdiction or if they believe the same may violate any applicable legal or regulatory requirement;
• (ii) provides an address in the United States or any other Excluded Territory for delivery of definitive share certificates for Rights Issue Shares (or any jurisdiction outside the United Kingdom in which it would be unlawful to deliver such certificates);
• (iii) purports to exclude the warranty required by this paragraph.

(b) Qualifying CREST Shareholders

A Qualifying CREST Shareholder who makes a valid acceptance in accordance with paragraph 5.2 of this Part XV represents and warrants to Acal and Oriel Securities that, except where proof has been provided to Acal's satisfaction that such person's acceptance will not result in the contravention of any applicable legal requirement in any jurisdiction:

(i) he or she is not within any Excluded Territory;

• (ii) he or she is not in any territory in which it is unlawful to make or accept an offer to acquire or subscribe for Nil Paid Rights, Fully Paid Rights or Rights Issue Shares;
• (iii) he or she is not accepting on a non-discretionary basis for a person located within any Excluded Territory or any territory referred to in (ii) above at any time the instruction to accept was given; and
• (iv) he or she is not acquiring any Nil Paid Rights, Fully Paid Rights or Rights Issue Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Nil Paid Rights, Fully Paid Rights or Rights Issue Shares into any Excluded Territory or into any territory referred to at (ii) above.

Acal may, having first consulted with Oriel Securities, treat as invalid any MTM instruction which (a) appears to Acal to have been dispatched from the United States or an Excluded Territory or otherwise in a manner which may involve a breach of the laws of any jurisdiction or they or their agents believe may violate any applicable legal or regulatory requirement; or (b) purports to exclude the warranty required by this paragraph.

7.5. Waiver

The provisions of this section and of any other terms of the Rights Issue relating to all Qualifying Shareholders with registered addresses in any of the Excluded Territories may be waived, varied or modified as regards specific Shareholders or on a general basis by Acal in its absolute discretion. Subject to this, the provisions of this section 7 supersede any terms of the Rights Issue inconsistent herewith. References in this section 7 to Qualifying Shareholders shall include references to the person or persons executing a Provisional Allotment Letter and, in the event of more than one person executing a Provisional Allotment Letter, the provisions of this section 7 shall apply to them jointly and to each of them.

7.6. Payment

All payments must be made in the manner set out in paragraph 4.4 and 5.2 of this Part XV (as applicable).

8. Withdrawal rights

Persons who have the right to withdraw their acceptances under Section 87Q(4) of the FSMA after a supplementary prospectus (if any) has been published and who wish to exercise such right of withdrawal must do so by lodging a written notice of withdrawal (which shall not include a notice sent by facsimile), which must include the full name and address of the person wishing to exercise such statutory withdrawal rights and, if such person is a CREST member, the participant ID and the member account ID of such CREST member, with Equiniti Limited, at Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA so as to be received no later than two Business Days after the date on which the supplementary prospectus was published, withdrawal being effective upon receipt of the written notice of withdrawal. Notice of withdrawal given by any other means or which is deposited with or received by Equiniti Limited after the expiry of such period will not constitute a valid withdrawal. Furthermore, the Company will not permit the exercise of withdrawal rights after payment by the relevant Shareholder of its subscription amount in full and the allotment of the Rights Issue Shares to such Shareholder becoming unconditional. In such circumstances, Shareholders are advised to consult their professional advisers.

Provisional allotments of entitlements to Rights Issue Shares which are the subject of a valid withdrawal notice will be deemed to be declined. Such entitlements to Rights Issue Shares will be subject to the provisions of paragraph 6 above as if the entitlement had not been validly taken up.

9. Times and dates

Acal shall, at its discretion and after consultation with its financial and legal advisers, be entitled to amend the dates that Provisional Allotment Letters are dispatched or dealings in Nil Paid Rights commence and amend or extend the latest date for acceptance under the Rights Issue and all related dates set out in this document and in such circumstances shall notify the UKLA, via a Regulatory Information Service approved by the UKLA and, if appropriate, Qualifying Shareholders. However, Qualifying Shareholders may not receive any further written communication.

If a supplementary prospectus is issued by Acal two or fewer Business Days prior to the latest time and date for acceptance and payment in full under the Rights Issue specified in this document, the latest date for acceptance under the Rights Issue shall be extended to the date that is three Business Days after the date of issue of the supplementary prospectus (and the dates and times of principal events due to take place following such date shall be extended accordingly).

10. Taxation

The information contained in Part XVI is intended as a general guide only to the current tax position in the United Kingdom and Qualifying Shareholders should consult their own tax advisers regarding the tax treatment of the Rights Issue in light of their own circumstances.

Certain statements regarding United Kingdom taxation in respect of the Rights Issue are set out in Part XVI (''Taxation'') of this document. Shareholders who are in any doubt as to their tax position in relation to taking up their entitlements under the Rights Issue, or who are subject to tax in any jurisdiction other than the United Kingdom should immediately consult a suitable professional adviser.

11. Acal Share Plans

The Board may, if it determines that it is appropriate, and subject to the necessary approvals, adjust the exercise price per Ordinary Share (if relevant) and the number of Ordinary Shares under outstanding options or awards granted under the Acal Share Plans, in accordance with the rules of each of the Acal Share Plans.

12. Dilution

Qualifying Shareholders who do not take up their Nil Paid Rights in full will experience dilution of their shareholdings by 50 per cent. as a result of the Rights Issue. Further dilution of 0.79 per cent. will result from the issue of the Consideration Shares.

13. Governing law and jurisdiction

This document, the Provisional Allotment Letters and any non-contractual obligation related thereto shall be governed by, and construed in accordance with, the laws of England and Wales. The Rights Issue Shares will be created and issued pursuant to Acal's Articles and under the Company's Act 2006. The courts of England and Wales are to have exclusive jurisdiction to settle any dispute which may arise out of or in connection with the Rights Issue, this document or the Provisional Allotment Letter including, without limitation, disputes relating to any non-contractual obligations arising out of or in connection with the Rights Issue, this document or the Provisional Allotment Letter. By taking up Rights Issue Shares under the Rights Issue in accordance with the instructions set out in this document and, in the case of Qualifying Non-CREST Shareholders only, the Provisional Allotment Letter, Qualifying Shareholders irrevocably submit to the jurisdiction of the courts of England and Wales and waive any objection to proceedings in any such court on the ground of venue or on the ground that proceedings have been brought in an inconvenient forum.

14. Further information

Your attention is drawn to the further information set out in this document and also, in the case of Qualifying Non-CREST Shareholders and other Qualifying Shareholders to whom Acal has sent Provisional Allotment Letters, to the terms, conditions and other information printed on the accompanying Provisional Allotment Letter.

PART XVI

Taxation

1. General

1.1. The following statements:

• (a) do not constitute tax advice and are intended to apply only as a general guide to the position under current UK tax law and the published practice of HMRC as at the date of this document, either of which is subject to change at any time (possibly with retrospective effect);
• (b) assume that the Finance Bill 2014 will be enacted in substantially its current form;
• (c) relate only to certain limited aspects of the UK taxation treatment of Qualifying Shareholders and are intended to apply only to Qualifying Shareholders who:
• (i) are resident in (and only in) the UK for UK tax purposes (unless the context otherwise requires) and to whom split-year treatment does not apply;
• (ii) hold their Ordinary Shares as investments; and
• (iii) are the beneficial owners of their Ordinary Shares; and
• (d) may not apply to certain classes of Qualifying Shareholders such as, for example, dealers in securities, insurance companies, collective investment schemes and Qualifying Shareholders who have (or who are deemed to have) acquired their Ordinary Shares by virtue of an office or employment.

Any person who is in any doubt as to his or her tax position or who may be subject to tax in any jurisdiction other than the United Kingdom should consult an appropriate professional tax adviser without delay.

2. Taxation of chargeable gains

2.1. Rights Issue

(a) Issue of Rights Issue Shares

For the purposes of UK taxation of chargeable gains, the issue of Rights Issue Shares by the Company to Qualifying Shareholders who take up their rights under the Rights Issue should constitute a reorganisation of the Company's share capital. On that basis, a Qualifying Shareholder should not be treated as making a disposal of any part of his existing holding to the extent the Qualifying Shareholder takes up his entitlement to acquire Rights Issue Shares under the Rights Issue. No liability to UK taxation on chargeable gains should therefore arise in respect of the Rights Issue for a Qualifying Shareholder who takes up his full entitlement to Rights Issue Shares. For the purposes of the taxation of chargeable gains, if a Qualifying Shareholder takes up all or any of his rights to the Rights Issue Shares, his existing holding and his Rights Issue Shares should be treated as the same asset, acquired at the time he acquired his existing holding. The amount of subscription money paid for the Rights Issue Shares will be added to the base cost of his existing holding when computing any gain or loss on any subsequent disposal of shares.

In the case of a Qualifying Shareholder within the charge to corporation tax, in calculating the chargeable gain or allowable loss arising on a subsequent disposal of Rights Issue Shares indexation allowance will apply to the amount paid for the Rights Issue Shares only from, generally, the date the subscription monies for the Rights Issue Shares were payable. In the case of Qualifying Shareholders not within the charge to corporation tax, indexation allowance is not available.

• (b) Disposal or lapse of rights to acquire Rights Issue Shares
• If a Qualifying Shareholder:
• (i) sells or otherwise disposes of all or some of his rights to subscribe for the Rights Issue Shares; or
• (ii) allows or is deemed to allow all or any part of his rights to subscribe for Rights Issue Shares to lapse and receives a cash payment in respect of them,

the proceeds will be treated as a capital distribution to that Qualifying Shareholder by the Company, he shall be treated as if he had disposed of a part of his existing holding and he may, depending on his circumstances, incur a liability to taxation on any chargeable gains. However, if the proceeds resulting from a lapse or disposal of rights to subscribe for Rights Issue Shares are ''small'' as compared with the market value (on the date of lapse or disposal) of that Qualifying Shareholder's existing holding, such a Qualifying Shareholder should not generally be treated as making a disposal for the purposes of the taxation of chargeable gains. The proceeds will instead reduce the base cost of the relevant existing holding to compute any chargeable gain or allowable loss on a subsequent disposal. This treatment will not apply where such proceeds are greater than the base cost of the existing holding.

The current practice of HMRC is to treat proceeds as ''small'' where either (i) the proceeds of the disposal or lapse of rights do not exceed five per cent. of the market value (at the date of the disposal or lapse) of the existing holding in respect of which the rights arose or (ii) the amount of the proceeds is £3,000 or less, regardless of whether the five per cent. test is satisfied.

2.2. Subsequent Disposals of Rights Issue Shares

(a) Individual Shareholders

A disposal of Rights Issue Shares may, depending on the circumstances and subject to any available exemption or relief, give rise to a chargeable gain (or an allowable loss) for the purposes of UK capital gains tax.

An individual Shareholder who is resident in the UK for UK tax purposes and whose total taxable gains and income in a given tax year, including any gains made on the disposal or deemed disposal of his Rights Issue Shares, are less than or equal to the upper limit of the income tax basic rate band applicable in respect of that tax year (the ''Band Limit'') will generally be subject to capital gains tax at the flat rate of 18 per cent. in respect of any gain arising on a disposal or deemed disposal of his Rights Issue Shares.

An individual Shareholder who is resident in the UK for UK tax purposes and whose total taxable gains and income in a given tax year, including any gains made on the disposal or deemed disposal of his Rights Issue Shares, are more than the Band Limit will generally be subject to capital gains tax at the flat rate of 18 per cent. in respect of any gain arising on a disposal or deemed disposal of his Rights Issue Shares (to the extent that, when added to the Shareholder's other taxable gains and income in that tax year, the gain is less than or equal to the Band Limit) and at the flat rate of 28 per cent., in respect of the remainder.

No indexation allowance will be available to an individual Shareholder in respect of any disposal of Rights Issue Shares. However, each individual has an annual exemption, such that capital gains tax is chargeable only on gains arising from all sources during the tax year in excess of this figure. The annual exemption is £11,000 for the tax year 2014 – 2015.

Individuals who are temporarily non-resident may, in certain circumstances, be subject to tax in respect of gains realised while they are not resident in the UK.

(b) Corporate Shareholders

Where a Shareholder is within the charge to UK corporation tax, a disposal of Rights Issue Shares may, depending on the circumstances and subject to any available exemption or relief, give rise to a chargeable gain (or an allowable loss) for the purposes of corporation tax.

Corporation tax is charged on chargeable gains at the rate of corporation tax applicable to that company. It should be noted for the purposes of calculating an indexation allowance available on a disposal of Rights Issue Shares that generally the expenditure incurred in acquiring the Rights Issue Shares will be treated as incurred only when the Shareholder made, or became liable to make, payment, and not at the time those shares are otherwise deemed to have been acquired.

3. Taxation of dividends

The Company is not required to withhold tax at source from dividend payments it makes.

3.1. Individual Shareholders

A Shareholder who is an individual resident in the UK for tax purposes and who receives a dividend from the Company will be entitled to a tax credit which may be set off against his total income tax liability. The tax credit will be equal to 10 per cent. of the aggregate of the dividend and the tax credit (the ''gross dividend''), which is also equal to one-ninth of the amount of the cash dividend received.

In the case of such a Shareholder who is not liable to UK income tax at either the higher or the additional rate, that Shareholder will be subject to UK income tax on the gross dividend at the rate of 10 per cent. The tax credit will, in consequence, satisfy in full the Shareholder's liability to UK income tax on the gross dividend.

In the case of a Shareholder who is liable to UK income tax at the higher rate, the Shareholder will be subject to UK income tax on the gross dividend at the rate of 32.5 per cent. to the extent that the gross dividend falls above the threshold for the higher rate of UK income tax but below the threshold for the additional rate of UK income tax when it is treated as the top slice of the Shareholder's income. The tax credit will, in consequence, satisfy only part of the Shareholder's liability to UK income tax on the gross dividend and the Shareholder will have to account for UK income tax equal to 22.5 per cent. of the gross dividend (which is also equal to 25 per cent. of the cash dividend received). For example, if the Shareholder received a cash dividend of £80 from the Company, the dividend received would carry a tax credit of £8.89 and therefore represent a gross dividend of £88.89. The Shareholder would then be required to account for UK income tax of £20 on the gross dividend (being £28.89 (i.e. 32.5 per cent. of £88.89) less £8.89 (i.e. the amount of the tax credit)).

In the case of a Shareholder who is liable to UK income tax at the additional rate, the Shareholder will be subject to UK income tax on the gross dividend at the rate of 37.5 per cent. for the 2014 – 2015 tax year, to the extent that the gross dividend falls above the threshold for the additional rate of UK income tax when it is treated as the top slice of the Shareholder's income. After setting off the tax credit comprised in the gross dividend, the Shareholder will, accordingly, have to account for UK income tax equal to 27.5 per cent. of the gross dividend (which is also equal to 30.56 per cent. of the cash dividend received). For example, if the Shareholder received a cash dividend of £80 from the Company, the dividend received would carry a tax credit of £8.89 and therefore represent a gross dividend of £88.89. The Shareholder would then be required to account for UK income tax of £24.44 on the gross dividend (being £33.33 (i.e. 37.5 per cent. of £88.89) less £8.89 (i.e. the amount of the tax credit)).

A UK resident individual Shareholder whose liability to UK income tax in respect of a dividend received from the Company is less than the tax credit attaching to the dividend will not be entitled to any payment from HMRC in respect of any part of the tax credit attaching to the dividend.

3.2. Corporate Shareholders

A Shareholder within the charge to UK corporation tax which is a ''small company'' (for the purposes of UK taxation of dividends) will not generally be subject to tax on dividends from the Company, provided certain conditions are met.

Other Shareholders within the charge to UK corporation tax will not be subject to tax on dividends from the Company so long as the dividends fall within an exempt class and do not fall within certain specified anti-avoidance provisions and the Shareholder has not elected for the dividends not to be exempt. Each Shareholder's position will depend on its own individual circumstances, although it would normally be expected that dividends paid by the Company would fall within an exempt class. Examples of dividends that are within an exempt class are dividends in respect of portfolio holdings, where the recipient owns less than 10 per cent. of the issued share capital of the payer (or any class of that share capital), and dividends paid in respect of non-redeemable ordinary share capital

4. Stamp duty and Stamp Duty Reserve Tax (''SDRT'')

The following statements are intended as a general and non-exhaustive guide to the current UK stamp duty and SDRT position and apply regardless of whether or not a Qualifying Shareholder is resident or ordinarily resident in the UK.

(a) Issue of Rights Issue Shares and issue or crediting of rights to Rights Issue Shares

No stamp duty or SDRT will generally be payable on the issue of Provisional Allotment Letters, split Provisional Allotment Letters or definitive share certificates, on the crediting of Nil Paid Rights or Fully Paid Rights to accounts in CREST, or on the issue in uncertificated form of Rights Issue Shares.

Where Rights Issue Shares represented by such documents or rights are registered in the name of the Qualifying Shareholder entitled to such shares, or where Rights Issue Shares are credited in uncertificated form to CREST, no liability to stamp duty or SDRT will generally arise.

Following the decision of the ECJ in HSBC Holdings and Vidacos Nominees (Case 569/07) and the First-tier Tax Tribunal decision in HSBC Holdings and The Bank of New York Mellon, HMRC has confirmed that 1.5 per cent. SDRT is no longer payable when Rights Issue Shares are issued into a clearance service or depositary receipt service.

(b) Purchase of rights to Rights Issue Shares

Persons who purchase (or are treated as purchasing) rights to Rights Issue Shares represented by Provisional Allotment Letters (whether nil paid or fully paid), or Nil Paid Rights or Fully Paid Rights held in CREST, on or before the latest time for registration of renunciation, will not generally be liable to pay stamp duty. However, such a purchaser will normally be liable to pay SDRT at the rate of 0.5 per cent. of the actual consideration paid. Where such a purchase is effected through a stockbroker or other financial intermediary, that person will normally account to HMRC for the SDRT and should indicate that this has been done in any contract note issued to the purchaser. In other cases, the purchaser of the rights to the Rights Issue Shares represented by the Provisional Allotment Letters is liable to pay the SDRT and must account for it to HMRC. Any SDRT arising on the transfer of Nil Paid Rights or Fully Paid Rights held in CREST should be collected and accounted for to HMRC by CREST.

No stamp duty or SDRT will be payable on the registration of Provisional Allotment Letters or split Provisional Allotment Letters, whether by the original holders or their renouncees.

(c) Subsequent dealings in Rights Issue Shares

Except in relation to depositary receipt systems and clearance services (to which the special rules outlined below apply), any subsequent dealings in Rights Issue Shares will be subject to stamp duty or SDRT in the normal way. Subject to an exemption for certain low value transactions, the transfer on sale of Rights Issue Shares effected outside CREST will generally be liable to UK stamp duty at the rate of 0.5 per cent. of the amount or value of the consideration payable (rounded up to the nearest multiple of £5) or, if an unconditional agreement to transfer the Rights Issue Shares is not completed by a duly stamped transfer, or where the transfer is effected in CREST, SDRT at the rate of 0.5 per cent. of the amount or value of the consideration payable.

Where Rights Issue Shares are transferred (a) to, or to a nominee or an agent for, a person whose business is or includes the provision of clearance services or (b) to, or to a nominee or an agent for, a person whose business is or includes issuing depositary receipts, stamp duty or SDRT will generally be payable at the higher rate of 1.5 per cent. of the amount or value of the consideration given or, in certain circumstances, the value of the Rights Issue Shares. There is an exception from the 1.5 per cent. charge on the transfer to, or to a nominee or agent for, a clearance service where the clearance service has made and maintained an election under section 97A(1) of the Finance Act 1986, which has been approved by HMRC. In these circumstances, SDRT at the rate of 0.5 per cent. of the amount or value of the consideration payable for the transfer will arise on any transfer of Rights Issue Shares into such clearance and on subsequent agreements to transfer such shares within such service. Any liability for stamp duty or SDRT in respect of a transfer into a clearance service or depositary receipt system, or in respect a transfer within such a service, which does arise will strictly be accountable by the clearance service or depositary receipt system operator or their nominee, as the case may be, but will, in practice, be payable by the participants in the clearance service or depositary receipt system.

PART XVII

Additional Information

1. Persons responsible

The Directors, whose names are set out in section 1.1 of Part XII (''Directors, Senior Management and Corporate Governance'') of this document and Acal accept responsibility for the information contained in this document. To the best of the knowledge and belief of the Directors and Acal (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.

2. Incorporation and registered office

• (a) Acal's legal and commercial name is Acal plc. Acal was incorporated and registered in England and Wales on 9 April 1986 as a private company limited by shares with the name Spurfame Limited and with the registered number 2008246. Its name was changed to Acal Limited on 20 March 1987. On 22 October 1987, the Company re-registered under the Company's Act 2006 as a public company limited by shares with the name Acal plc. Its Ordinary Shares are listed on the premium listing segment of the Official List and traded on the main market of the London Stock Exchange.
• (b) The Company is domiciled in the United Kingdom and the registered and head office of the Company is 2 Chancellor Court, Occam Road, Surrey Research Park, Guildford GU2 7AH. The telephone number of the registered office is 01483 544500 or if dialling from outside the UK, +44 (0) 483 544500.
• (c) The principal legislation under which the Company operates, and under which the Ordinary Shares have been created, is the Company's Act 2006 and the regulations made thereunder.

3. Principal subsidiaries

The Company is the ultimate holding company of the Group. The following table shows details of the significant subsidiaries of the Group and the undertakings of the Group which the Directors consider are likely to have a significant effect on the assessment of the Group's assets and liabilities, financial position or profit and losses:

Name of subsidiary	Country of incorporation	Percentage held by the Group
Acal BFi UK Ltd	England	100%
Acal BFi Central Procurement UK Ltd	England	100%
Acal Enterprise Solutions Ltd	England	100%
Stortech Electronics Ltd	England	100%
Vertech Scientific Ltd	England	100%
Vertech Scientific SA	South Africa	100%
Acal BFi NV/SA	Belgium	100%
Acal BFi GmbH	Germany	100%
Acal BFi Nordic AB	Sweden	100%
Hectronic AB	Sweden	100%
Acal BFi Technology BV	Netherlands	100%
Acal BFi Italia Srl	Italy	100%
Acal BFi Iberia SL	Spain	100%
MTC Micro Tech Components GmbH	Germany	100%
EMC Innovation Limited	South Korea	100%
Acal Management Services Ltd	England	100%
Myrra Hong Kong Limited	Hong Kong	100%
Zongshan Myrra Electronic Ltd.	Hong Kong	100%
Myrra SAS	France	100%
Myrra Deutschland Gmbh	Germany	100%
Myrra Hispania	Spain	100%
Myrra Power SP	Poland	100%
RSG Electronic Components GmbH	Germany	100%

4. Summary of principal investments

Details of the Company's principal investments for the financial years ended 31 March 2014, 2013 and 2012 together with any future investments on which the board of directors have already made commitments are as follows:

• * In June 2011, the Company completed the acquisition of Hectronic, a Swedish electronics business, which specialises in providing embedded computing technology to industrial electronic markets.
• * In October 2011, the Company completed the acquisition of MTC, a specialist provider of Electromagnetic shielding products to the European and Asian industrial electronic markets.
• * In April 2013, the Company completed the acquisition of the Myrra Group, a French headquartered specialist in the design and manufacturer of custom magnetic electronic products.
• * In August 2013, the Company completed the acquisition of YEG, a specialist distributor of electronic components, LEDs and optoelectronics, power supplies, IT products, powercords and electronics manufacturing services.
• * In November 2013 the Company completed the acquisition of RSG, a distribution partner for high quality manufacturers of electronic components.

5. Share capital of the Company

5.1. Share capital

As at 4 June 2014 (the Latest Practicable Date), the issued and fully paid share capital of Acal was as follows:

	Authorised		Issued and fully paid
Class of share	shares	Amount (£m)	shares	Amount (£m)
Ordinary Shares	44,000,000	2.20	31,332,127	1.60

5.2. Issued share capital immediately following completion of the Acquisition and the Rights Issue

The issued and fully paid ordinary share capital of the Company immediately following completion of the Rights Issue will be as follows (excluding any Ordinary Shares issued under the Acal Share Plans after 4 June 2014) and assuming the maximum number of Consideration Shares have been issued:

		Nominal
		value
Shares	Number	£m
Ordinary Shares	63,164,254	3.3

5.3. History of share capital

On incorporation, the Company had an authorised share capital of £100 ordinary shares of £1 each.

As at 1 April 2009 (being the first day of the Group Financial Information incorporated by reference into this document) the authorised share capital was 35,000,000 ordinary shares of 5p each.

The following table shows the movements in authorised and called-up share capital over the last three years up to 4 June 2014 (the latest practicable date before publication of this document):

	Authorised	Issued and fully paid
Date	shares	£m	shares	£m
1 April 2012	44,000,000	2.20	28,479,804	1.423399
1 April 2013	44,000,000	2.20	31,295,878	1.564794
1 April 2014	44,000,000	2.20	31,332,127	1.566606

5.4. Options and awards under the Acal Share Plans

Options have been granted to certain Directors, Senior Management and other employees of the Company to acquire Ordinary Shares in the Company. As at the Latest Practicable Date options over 2,619,453 Ordinary Shares in the Company were outstanding, including those granted to Directors, as disclosed in section 11.1 of Part XVII (''Additional Information'').

A summary of outstanding options over Ordinary Shares granted under the 1998 Approved Executive Share Option Plan (''Approved Plan'') and under the 1998 Unapproved Executive Share Option Plan (''Unapproved Plan'') and remain outstanding as at 31 March 2014 is given below:

	Outstanding at 1 April 2013	Lapsed during the year	Exercised during the year	Outstanding at 31 March 2014	Exercise price per Share (pence)	Exercise dates
Approved
Plan	12,000	12,000	NIL	NIL	N/A	N/A
Approved
Plan	5,729	1,500	NIL	4,229	387.25	June 2010-June 2014
Unapproved
Plan	17,500	17,500	NIL	NIL	N/A	N/A
Unapproved
Plan	54,271	5,000	NIL	49,271	387.25	June 2010-June 2014
	89,500	36,000	NIL	53,500	N/A	N/A

For a description of the terms of the Approved Plan and Unapproved Plan, see section 11.1 of Part XVII (''Additional Information'').

A summary of the outstanding awards granted under the Acal 2008 Long Term Incentive Plan (''2008 LTIP'') and the Acal 2008 Renewed Long Term Incentive Plan (''Renewed LTIP'') as at 31 March 2014 is given below:

	Outstanding at 1 April 2013	Granted during the year	Lapsed during the year	Exercised during the year	Outstanding at 31 March 2014	Exercise dates
2008 LTIP	378,500	NIL	17,096	36,249	325,155	March 2013-March 2020
2008 LTIP	77,272	NIL	19,478	NIL	57,794	July 2013- July 2020
2008 LTIP	297,194	NIL	297,194	NIL	NIL	N/A
2008 LTIP	515,212	NIL	NIL	NIL	515,212	March 2015-March 2022
2008 LTIP	20,731	NIL	NIL	NIL	20,731	May 2015-May 2022
2008 LTIP	481,164	NIL	NIL	NIL	481,164	March 2016-March 2023
Renewed
LTIP	NIL	347,835	NIL	NIL	347,835	March 2019-March 2024
	1,770,073	347,835	333,768	36,249	1,747,891

For a description of the 2008 LTIP and Renewed LTIP, see section 11.2 of Part XVII (''Additional Information'').

A summary of the outstanding special awards granted to Nicholas Jefferies and Simon Gibbins as at 31 March 2014 is given below:

	Outstanding at 1 April 2013	Lapsed during the year	Exercised during the year	Outstanding at 31 March 2014	Exercise dates
Special Award	584,777	NIL	NIL	584,777	March 2012- March 2019
Special Award	179,447	39,587	NIL	139,860	March 2013-March 2020

For a description of the terms of the special awards, see section 11.4 of Part XVII (''Additional Information'').

A summary of the options over Ordinary Shares that have been granted under the Acal 2010 Company Share Option Plan (''CSOP'') and remain outstanding as at 31 March 2014 is given below:

Outstanding at 1 April 2013	Granted during the year	Lapsed during the year	Exercised during the year	Outstanding at 31 March 2014	Exercise dates
					September 2013 -
73,525	NIL	5,135	27,356	41,034	September 2020
18,180	NIL	18,180	NIL	NIL	N/A
5,342	NIL	NIL	NIL	5,342	June 2014 – June 2021
18,035	NIL	NIL	NIL	18,035	July 2015 – July 2022
NIL	15,789	NIL	NIL	15,789	August 2016-August 2023
NIL	13,225	NIL	NIL	13,225	March 2017-March 2024
115,082	29,014	23,315	27,356	93,425

For a description of the terms of the CSOP, see section 11.3 of Part XVII (''Additional Information'').

Save as disclosed in this XVII:

• (a) no share or loan capital of the Company has, within three years of the date of this document, been issued or agreed to be issued, or is now proposed to be issued (other than pursuant to the Rights Issue), fully or partly paid, either for cash or for consideration other than cash, to any person;
• (b) no commissions, discounts, brokerages or other special terms have been granted by the Company in connection with the issue or sale of any share or loan capital; and
• (c) no share or loan capital of the Company or any other member of the Group is under option or agreed conditionally or unconditionally to be put under option.

5.5. Ordinary Shares held by or on behalf of Acal

As at the date of this document, no Ordinary Shares were held by or on behalf of Acal.

5.6. Ordinary Shares held by or on behalf of experts

As at the Latest Practicable Date, none of the experts named in this document had any shareholding in any member of the Group or any right to subscribe for securities in any members of the Group.

5.7. Interests of natural and legal persons involved in the Acquisition and Rights Issue

Save as disclosed in this Part XVII, no person involved in the Acquisition or Rights Issue has an interest which is material to the Acquisition or Rights Issue.

6. Major shareholders

None of Acal's major Shareholders has different voting rights from any other holder of Ordinary Shares in respect of Ordinary Shares held by them.

As at the Latest Practicable Date, Acal was not aware of any persons who, directly or indirectly, jointly or severally, will exercise or could exercise control over Acal.

The Directors have no knowledge of any arrangements, the operation of which may at a subsequent date result in a change of control of the Company.

As at the Latest Practicable Date, Acal had been notified by the following companies of their interests (both direct and indirect) in the total voting rights of Acal:

Shareholder	Number of shares	Percentage of Total Voting rights (%)
Aberforth Partners	3,949,587	12.61
Aberdeen Asset Management Group	3,613,251	11.53
Hargreave Hale Investment Management	3,275,995	10.46
Unicorn Asset Management	2,552,547	8.15
Curry Family Holding	2,043,500	6.52
Legal & General Investment Management	1,648,637	5.26
Herald Investment Management	1,407,248	4.49
Henderson Global Investors	1,271,087	4.06
Old Mutual Asset Managers	1,135,000	3.62
AXA Investment Management	1,087,000	3.47

So far as Acal is aware, as at the completion of the Rights Issue the following persons (other than the Directors) will hold directly or indirectly 3 per cent. or more of Acal's voting rights, assuming that the major shareholders listed above acquire their entitlements to Rights Issue Shares in full:

Shareholder	Number of shares	Percentage of Total Voting rights (%)
Aberforth Partners	7,899,174	12.61
Aberdeen Asset Management Group	7,226,502	11.53
Hargreave Hale Investment Management	6,551,990	10.46
Unicorn Asset Management	5,105,094	8.15
Curry Family Holding	4,087,000	6.52
Legal & General Investment Management	3,297,274	5.26
Herald Investment Management	2,814,496	4.49
Henderson Global Investors	2,542,174	4.06
Old Mutual Asset Managers	2,270,000	3.62
AXA Investment Management	2,174,000	3.47

7. Summary of the Articles

The following is a summary of the Articles, which are available for inspection as set out in section 21 of this Part XVII.

7.1. Memorandum

The objects of the Company are unrestricted.

7.2. Articles

The Articles, which were adopted on 29 July 2010, contain (amongst others) provisions to the following effect:

(a) Share rights

Subject to statute, and without prejudice to any rights attached to any existing shares or class of shares, a share in the Company may be issued with such rights or restrictions as the Company may by ordinary resolutions decide (or failing such determination, as the Board may determine). A share may be issued on the terms that it is to be, or has an option that the Company or the shareholder may exercise, to be, redeemed on such terms and conditions and in such a manner as the Board decides.

(b) Voting rights

Subject to any special rights or restrictions as to voting attached to any shares, on a vote on a resolution on a show of hands each member who (being an individual) is present in person at any meeting of the Company and entitled to vote has one vote, each duly authorised representative of a corporation (which is a member) who is present has the same voting rights as the corporation would be entitled to, each proxy present who has been properly appointed by one or more members who is entitled to vote has one vote, and each proxy present who has been appointed by more than one member entitled to vote has one vote for and one vote against the resolution. On a vote on a resolution on a poll, each member who (being an individual) is present in person or by proxy or (being a corporation) is present by one or more duly authorised representatives or by proxy has one vote for each share held by him.

In the case of joint holders of a share, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members in respect of the share.

(c) Restrictions on voting

No member shall, unless the Board otherwise determines, be entitled in respect of any share held by him to vote either personally or by proxy at any general meeting or to exercise any other right conferred by membership at such a meeting unless all calls or other sums presently payable by him in respect of shares in the Company have been paid.

If any member, or any other person appearing to be interested in any shares of the Company, has been duly served with a notice in writing under section 793 of the 2006 Act and is in default at the end of the time specified in such notice by not supplying to the Company the information thereby required, then at any time thereafter the Board may, for such period as the default continues, impose restrictions upon the relevant shares. The restrictions available are the suspension of voting or other rights conferred by membership in relation to meetings of the Company in respect of the relevant shares and additionally, in the case of a shareholding representing at least one quarter of a 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 transfers of, the relevant shares. The restrictions will continue until not more than seven days after the information required by such notice is supplied to the Company or the Company has received notice that the shares in question have been transferred. section 793 of the 2006 Act provides a public company with the statutory means to ascertain the persons who are, or have within the last three years been, interested in its relevant share capital and the nature of such interests.

(d) Dividends and other distribution

Subject to statute, the Company may by ordinary resolution declare dividends not exceeding the amount recommended by the Board and such dividends shall be paid to the members in accordance with their respective rights. Subject to statute, the Board may resolve to pay to the members such interim dividends as appear to the Board to be justified by the profits of the Company. If the share capital of the Company is divided into different classes, the Board may pay interim dividends on shares which confer deferred or non-preferred rights as well as in respect of those shares which confer preferential rights with regard to dividends. Provided that the Board acts in good faith the Directors shall not incur any responsibility to the holders of shares conferring a preference for any damage that they may suffer by reason of the payment of an interim dividend on any shares in the capital of the Company having deferred or non-preferred rights.

The Company may pay any such dividend or interest through a computer-based system in the case of shares in uncertificated form, subject to receiving the relevant shareholder's consent and subject also to the provisions of the Uncertificated Securities Regulations 1995. The Company may otherwise pay dividends by cheque or warrant sent through the post to the registered address of the member or entitled person or by intra-bank transfer or other electronic means as approved by the Board.

Except insofar as the rights attaching to, or the terms of issue of, any share otherwise provide, all dividends shall be apportioned and paid pro rata according to the amounts paid up on the share during any portion of the period in respect of which the dividend is paid. The Board may deduct from any dividend payable to a member all sums of money presently owed to the Company on account of calls or otherwise in relation to the shares of the Company.

Any dividend unclaimed after a period of 12 years from the date when it was declared or became due for payment shall be forfeited and revert to the Company.

The Company may cease to send cheques, warrants or similar financial instruments by post or to employ any other means of payment for dividends if either (i) at least two consecutive payments have remained uncashed or are returned undelivered or that means of payment has failed or (ii) one payment remains uncashed or is returned undelivered or that means of payment has failed and reasonable inquiries have failed to establish any new postal address or account of the holder. The Company must resume sending cheques, warrants or similar financial instruments or employing such other means of payment if the person entitled to payment notifies the Company of an address for that purpose.

A general meeting declaring a dividend may, upon the recommendation of the Board, direct payment of such dividend wholly or in part by the distribution of specific assets, including paid up shares, debentures or debenture stock of any other company.

The Board may, in respect of any dividend if authorised by an ordinary resolution of the Company, offer Shareholders the right to elect to receive Ordinary Shares by way of share dividend, instead of cash.

(e) Variation of rights

Subject to statute and unless otherwise provided for in the terms of issue, rights attached to any class of shares may be varied with the written consent of the holders of not less than three-fourths of the nominal value of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the members of that class. At every such separate meeting the necessary quorum shall be two members of that class of shareholder present in person or by proxy holding not less than one-third in nominal value of the issued shares of that class (or, if at any adjourned class meeting of such holders a quorum as defined above is not present, any one person present holding shares of the class in question or his proxy shall be a quorum). At such a meeting any holder of shares of the class present in person or by proxy may demand a poll and every such holder shall, on a poll, have one vote for every share of the class held by him.

The rights attached to a class or shares are not, unless otherwise expressly provided in the rights attaching to those shares, deemed to be varied by the creation or issue of further shares ranking pari passu with or subsequent to them but in no respect in priority to them.

(f) Transfer of Shares

Subject to statute and the requirements of the FCA, the Board may permit title to shares of any class to be evidenced otherwise than by a certificate and title to shares of such a class to be transferred by means of a computer-based system. Provisions of the Articles do not apply to any shares in uncertificated form to the extent that such provisions are inconsistent with the holding of shares in uncertificated form or with the transfer of shares by means of a relevant system.

Any member may transfer all or any of his shares in certificated form by a written instrument of transfer in any usual form or in any other form which the Board may approve. The instrument of transfer must be signed by or on behalf of the transferor and (in the case of a partly-paid share) the transferee. The transferor will continue to be treated as the shareholder until the name of the transferee is entered in the register of members for the relevant share or shares.

No fee will be charged by the Company on the registration of the transfer.

The Board may decline to register any transfer of a share in certificated form on which the Company has a lien or which is not a fully paid share, to the extent that this does not prevent dealings in such shares from taking place on an open and proper basis and, in respect of shares in uncertificated form, to the extent permitted by the Uncertificated Securities Regulations 1995. If the Board declines to register a share in certificated form it shall then send to the transferee notice of the refusal as soon as practicable.

The Board may also decline to register a transfer of a share in certificated form unless the instrument of transfer:

• * is duly stamped or certified or otherwise shown to the satisfaction of the Board to be exempt from stamp duty and is accompanied by the relevant share certificate and such other evidence of the right to transfer as the Board may reasonably require;
• * is in respect of only one class of share; and
• * is in favour of not more than four transferees jointly.

(g) Pre-emption rights

Pursuant to a special resolution passed on 26 July 2013, the Board is authorised to allot equity securities (as defined in the Company's Act 2006) for cash as if section 561 of the Company's Act 2006 did not apply, up to an aggregate nominal amount of 521,597 until the conclusion of Acal's next annual general meeting or, if earlier, 25 October 2014.

(h) Alteration of share capital

The Company may, in accordance with the Company's Act 2006, make such alterations to the Company's share capital as the members may approve by ordinary resolutions.

(i) Forfeiture

The Company may serve, not less than 14 days, notice on the members in respect of any amounts unpaid on their shares, to pay the unpaid amount, together with any interest and all expenses incurred by the Company. In the event of non-compliance, a share in respect of which the notice is given may be forfeited by resolutions of the Directors.

(j) Mandatory takeover bids, squeeze-out and sell-out rules

Other than as provided by the Company's Act 2006 and The City Code on Takeovers and Mergers, there are no rules or provisions relating to mandatory bids or squeeze-out or sell-out rules in relation to the Ordinary Shares.

(k) Return of capital

If the Company is wound up the liquidator may, with the authority of a special resolution and any other sanction required by statute, divide among the members in specie the whole or any part of the assets of the Company, whether or not the assets shall consist of property of one kind, and may for such purposes set such value as he deems fair upon any one or more class or classes of property, and may determine how such division shall be carried out as between the members or different classes of members. The liquidator may, with the like authority, vest any part of the assets in trustees upon such trusts for the benefit of members as the liquidator, with the like authority, shall think fit, and the liquidation of the Company may be closed and the Company dissolved, but so that no member shall be compelled to accept any shares in respect of which there is a liability.

(l) General meetings

The Board many call a general meeting of the Company at any time, to take place at such time and place as it decides. For the purpose of appointing a director, two or more members may call a general meeting. At least 14 days' notice must be given of any a general meeting (other than an adjourned meeting). The Company must also hold an annual general meeting, for which at least 21 days' notice must be given. Notice of a general meeting must be sent to every member, every Director and the Company's auditors. It must state the time and date and the place of the meeting and the general nature of the business to be dealt with at the meeting. A notice calling an annual general meeting must state that the meeting is an annual general meeting. Save as otherwise provided by the Articles two members present in person or by proxy and entitled to vote shall be a quorum.

The Board or the Chairman may, notwithstanding the specification in the notice for the place of meeting, make arrangements for simultaneous attendance and participation (including by way of video link) at other places by members and proxies entitled to attend the general meeting.

A resolution to be voted on at a general meeting must be decided on a show of hands unless, before or on the declaration of the result of such a vote, a poll is demanded. A poll may be demanded by the chairman, any five members present and entitled to vote on the resolution, a member or members present and entitled to vote on the resolution holding not less than one tenth of the total voting rights of all the members being entitled to vote on the resolution, or a member or members present and holding paid up shares which in aggregate are not less than one tenth of the paid up share capital of the Company.

(m) Directors

Number of Directors

The Directors shall be at least two. The Company may by ordinary resolution vary this restriction.

Directors' shareholding qualification

Neither a Director nor an alternate Director shall be required to hold any shares as qualification for office.

Appointment of Directors

The Board may appoint any person to be a Director, either to fill a casual vacancy or as an additional Director. Subject to the provisions of the Articles, any Director so appointed shall hold office only until the next following annual general meeting and is then eligible for re-appointment.

The Board may from time to time appoint one or more Directors to hold any employment or executive office with the Company for such period and on such terms as they may determine and may also revoke or terminate any such appointment.

Retirement of Directors

Subject to the provisions of the Articles, at each annual general meeting, each Director who was appointed by the Board since the last annual general meeting using the power above, was appointed or last re-appointed (or treated as so by statute) at or before the annual general meeting held in the calendar year which is three years before the current year, or is a Non-Executive Director who has held office with the Company for a continuous period of nine years or more, must retire from office.

A Director who retires at an annual general meeting for any of the reasons above is eligible for re-appointment, and if re-appointed at the same annual general meeting as he retires at, continues in office without a break. The Company may by ordinary resolution fill the vacancy of a Director retiring in accordance with the above by appointing the retiring Director or another person, subject to statute or the Articles.

Removal of Directors

A Director may be removed from office by written notice signed by all other Directors. The Company may by ordinary resolution remove any Director before the expiration of his period of office.

Vacation of office

• * The office of a Director shall be vacated as soon as:
• * he becomes prohibited by law from acting as a Director, or he ceases to be a Director by virtue of the Articles;
• * not being an Executive Director holding that office for a fixed term, he resigns by notice and that notice is given to the Board, or he tenders his resignation (orally or by notice) and the Board resolves to accept it;
• * the term of his office expires if he was appointed for a fixed term;
• * if he becomes bankrupt, an interim order is made in respect of him, he enters into an arrangement or composition with his creditors generally or he is unable to pay his debts within the meaning of section 268 of the Insolvency Act 1986 or pursuant to any similar legislation in any other jurisdiction;
• * a registered medical practitioner gives a written opinion to the Company that he has become physically or mentally incapable of acting as a Director and may remain so for more than three months or he becomes a patient of the purposes of any statute relating to mental health and, in each case, the Board resolves that his office is vacated;
• * an order is made by a court of competent jurisdiction on the ground (however formulated) of mental disorder for his detention or for the appointment of a guardian, receiver or other person to exercise powers with respect to his property or affairs; or
• * he and the alternate Director appointed by him (if any) are absent from meetings of the Board for six consecutive months and the Board resolves that his office be vacated.

Proceedings of the Board

The quorum necessary for the transaction of the business of the Board may be fixed by the Board and, unless otherwise fixed, is two individuals. A person attending a board meeting as an alternate director may only count in the quorum if his appointing Director is not present. Any alternate director who is present as an alternate director for more than one Director is only entitled to count as one for the purposes of the quorum.

Questions arising at any meeting shall be determined by a majority of votes. Each Director participating has one vote (subject to the Articles and to statute). A Director who is also an alternate director is entitled to a separate vote in his capacity as an alternate director. In case of an equality of votes the chairman of the meeting shall have a second or casting vote. The Directors may pass resolution by way of written resolution.

Where the number of Directors drops below the minimum required by the Articles or as approved by an ordinary resolution of the Company, the Directors may only act for the purpose of filling vacancies or summoning a general meeting of the Company.

Remuneration of Directors

The Board may appoint any one or more of their body to any executive office for such period and on such terms as to remuneration (or otherwise) as it thinks fit, as far as statute permits, and subject to the provisions of any contract, the Board may vary or revoke such appointment.

The Non-Executive Directors shall be entitled to remuneration by way of fees for their services as Non-Executive Directors in an aggregate amount not exceeding £500,000 per annum or such other higher amount as may be determined by ordinary resolution of the Company, such remuneration to be divided amongst the Non-Executive Directors as the Board may by resolution determine, or in default of agreement, equally. Any remuneration payable to any Non-Executive Director may, if the Non-Executive Director concerned so requires and if the Board so agrees, consist in whole or in part of payments by way of pension contributions or premiums.

The Board may decide to pay extra remuneration in addition to the above (whether by salary, commission, percentage of profits or otherwise) to any Director who serves on a committee, acts as a chairman or deputy chairman, devotes special attention to the Company's business, goes or resides abroad in connection with the Company's business or who otherwise performs services which the Board decides are outside the scope of his ordinary duties.

Any Director may be paid such reasonable travelling and other expenses as he may properly incur in connection with the discharge of his duties.

Pensions and gratuities for Directors

The Board may (either alone or with an Associated Company) exercise the powers of the Company to provide benefits either by the payment of gratuities or pensions or by insurance or in any other manner for, among others, Directors current and former and spouses, relatives and dependents of such persons.

Directors' interests

The Board may, to the fullest extent permitted by law, authorise any matter which would otherwise involve a Director breaching his duty under the 2006 Act to avoid conflicts of interest. Subject to the Company's Act 2006, and provided he has declared the nature and extent of his interest to the Board as required by the Company's Act 2006 and the Articles, a Director may:

• * hold any other office or place of profit under the Company in conjunction with his office of Director on such terms as to tenure of office, remuneration or otherwise as the Board decides;
• * act, directly or through a body corporate or firm in which he is (directly or indirectly) interested, in a professional capacity for the Company (other than as auditor) on such terms as to tenure of office, remuneration or otherwise as the Board decides;
• * be a party to or otherwise directly or indirectly interested in any other proposed or existing transaction or arrangement involving the Company;
• * continue to be or become a director (executive or non-executive), managing director, manager or other officer of, or employee or member of, or holder (directly or indirectly) of any other place of profit under a body corporate or firm which the Company controls or in which it is (directly or indirectly) interested; and
• * be a party to or otherwise directly or indirectly interested in any other proposed or existing transaction or arrangement (whether or not constituting a contract) with, or entered into by any body corporate or firm in which the Company is (directly or indirectly) interested.

A Director shall not, by reason of his office, be liable to account to the Company for any benefit realised by reason of having an interest permitted as described above or by reason of having a conflict of interest authorised by the Board and no contract shall be liable to be avoided on the grounds of a Director having any such interest.

Restrictions on voting

Subject to certain limited exceptions set out in the Articles, no Director may vote on, or be counted in a quorum in relation to, any rResolution of the Board in respect of any contract, transaction or arrangement in which he has an interest (which may reasonably be regarded as likely to give rise to a conflict of interest) and, if he does so, his vote shall not be counted.

If a question arises at any meeting as to a Director's entitlement to vote and such question is not resolved by his voluntarily agreeing to abstain from voting, such question shall be referred to the chairman of the meeting.

Borrowing and other powers

Subject to the Articles and statute, and any directions given by the Company by special resolution, the business of the Company will be managed by the Board who may exercise all the powers of the Company, whether relating to the management of the business of the Company or not. The Board may delegate any of its powers to individuals, committees or local boards, by such means (including power of attorney) and to the extent it thinks fit.

A Director may appoint, by written notice to the Company, an alternate director to exercise the powers and carry out the responsibilities of that appointing Director in relation to decisions taken by the Directors. Where the proposed alternate director is not a Director, his appointment must be approved by a majority of two thirds of the Directors. The appointment of an alternate director may be terminated in a number of ways including, written resolution by the appointing Director or by unanimous decision of all of the Directors.

Subject to the Articles, the Directors may make any rule they consider appropriate about how the Directors take decisions and how such rules are recorded or communicated to the Directors.

The Board may exercise all the powers of the Company to borrow money and to mortgage or charge any of its undertaking, property, assets (present and future) and uncalled capital and to issue debentures and other securities and to give security for any debt, liability or obligation of the Company or of any third party.

The Directors must restrict the borrowings of the Company so as to secure as far as their powers enable that the total outstanding principal amount of all money borrowed by the Group less the total amount of current asset investments does not at any time, without the previous sanction of an ordinary resolution of the Company, exceed an amount equal to two times the adjusted capital and reserves, as shown by the relevant balance sheet.

Indemnity of Directors

To the extent permitted by statute, the Company may indemnify any Director of the Company or any associated company against any liability and may purchase and maintain for any Director of the Company or any associated company insurance against any liability.

(n) Communications

Subject to statue and the Articles, a member or other person may send documents or information to the Company in hard copy form, electronic form or any other form permitted by statute. The Articles do not provide a general or specific agreement by the Company for the use of a particular form of communication (other than hard copy) for a particular type of document or information sent to it.

The Company may, unless required otherwise by statute or the Articles, decide to send documents or information in hard copy form, electronic form or through a website. The Company has the right to offer Shareholders the opportunity to have documents and information made available to them through Acal's website and in electronic form.

8. Directors and Senior Management

• (a) The biographies of each of the Directors and Senior Management are set out in Part XII (''Directors, Senior Management and Corporate Governance'').
• (b) In addition to their directorships in the Company and any directorships of Group companies, the Directors and Senior Management hold or have held in the previous five years the following directorships and partnerships:

Name	Current directorships and partnerships outside the Group	Previous directorships and partnerships outside the Group T+ Medical Limited OBS Medical Limited Software Radio Technology PLC T+ Medical Holdings Limited Kylmar (Holdings) Limited Velocity Acquisitions Limited Velocity Holdings Limited Velocity Investco Limited Velocity Holdings Corporate Trustee Limited Planit Holdings Limited
Richard Moon	Synergie Business Limited St Michael's House (Lyme Regis) Management Limited Synvest Limited Synergie Global Limited Seven Technologies Holdings Limited
Nicholas Jefferies	Scope 4 Developments Limited
Simon Gibbins	Pancreatic Cancer UK
Graham Williams	Hawthorns Educational Trust Limited (The) Hawthorns (Pendel Court) Limited (The) Boorsgreen Farm Limited Cranleigh Foundation Community Foundation for Surrey	The Gatton Park Tennis Centre Provenplan Limited
Richard Brooman	Berry Starquest Limited British Youth Opera HG Capital Trust PLC Incrementum Limited Invesco Perpetual UK Smaller Companies Investment Trust PLC Leonard Cheshire Disability Merchant Taylors' School	SVM UK Active Fund PLC
Henrietta Marsh	Dods Group PLC Electric Word PLC Henrietta Marsh Consulting Limited

• (c) There are no family relationships between any Directors or any members of the Senior Management.
• (d) Within the period of five years preceding the date of this document, and save as disclosed in section 1.1 above, none of the Directors and no member of Senior Management:
• * has any convictions in relation to fraudulent offences;
• * has been declared bankrupt or entered into an individual voluntary arrangement;
• * has been a member of the administrative, management, supervisory bodies or director or senior manager (who is relevant to establishing that a company has the appropriate expertise and experience for the management of that company) of a company at the time of any bankruptcy, receivership or liquidation of such company; or

• * has been subject to any official public incrimination and/or sanction by any statutory or regulatory authorities (including designated professional bodies) or 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 a company.

• (e) None of the Directors or Senior Managers was appointed to their respective positions pursuant to arrangements or understandings with major Shareholders, customers, suppliers or others.

• (f) Save as set out in paragraph 11.4(a) and 11.4(b) below, no restrictions have been agreed by any Director or Senior Manager on the disposal within a certain period of his holding in Ordinary Shares.
• (g) Save for increase in Nicholas Jefferies' shareholding of 163 Ordinary Shares, in the twelve months preceding the date of this document, no Directors or Senior Managers have acquired new shares in the previous year.

9. Directors' terms of appointment

9.1. Executive Director service contracts

It is the Company's policy that Executive Directors should have service contracts incorporating a maximum notice period of one year. However, it may be necessary occasionally to apply this policy flexibly and offer longer initial notice periods to new Directors.

Under the terms of their service contracts, any termination payments are not pre-determined but are determined in accordance with the Director's contractual rights taking account of the circumstances and the Director's duty to mitigate loss. The Company's objective is to protect itself from exposure to the risk of a termination payment in the event of failure.

Nicholas John Jefferies has a service contract with a company within the Group dated 26 November 2008 incorporating a notice period of one year on a rolling basis. Simon Gibbins has a service contract with a company within the Group dated 10 June 2010 incorporating a notice period of one year on a rolling basis.

9.2. Non-Executive Director letters of appointment

The following letters of appointment are in place in relation to the Chairman and Non-Executive Directors:

• (a) an agreement with Synergie Business Limited for the provision of the services of Richard James Moon dated 31 March 2005 (as amended) which expires on 31 March 2015 and which may be terminated by six months' notice.
• (b) an agreement with Graham John Williams for his services dated 29 September 2003 (as amended) which expires on 30 June 2015 and which may be terminated by three months' notice.
• (c) an agreement with Richard Brooman for his services dated 7 December 2012 which expires on 31 December 2014 and which may be terminated before this date under certain contractual conditions
• (d) an agreement with Henrietta Marsh for her services dated on 22 April 2013 which expires on 30 April 2015 which may be terminated before this date under certain contractual conditions.

Other than their service contracts, no contract of significance to which any member of the Group is a party and in which a Director is or was materially interested, subsisted at the end of, or during, the year.

10. Director and Senior Management remuneration

• (a) Under the terms of their service contracts, letters of appointments and applicable cash incentive plans, in the year ended 31 March 2014 the aggregate remuneration and benefits paid to the Directors who served during 1 April 2013 to 31 March 2014, consisting of six individuals, was £1,082,684.
• (b) In the year ended 31 March 2014, the aggregate remuneration and benefits paid to Senior Management was £775,071.
• (c) The total amount set aside or accrued by the Group to provide pension, retirement or similar benefits for the Directors and Senior Management for the year ended 31 March 2014 was £77,130.

(d) Under the terms of their service contracts and applicable incentive plans, in the year ended 31 March 2014, the Directors were entitled to the remuneration and benefits set out below:

	Salaries and fees £	Bonus £	Benefits £	Total emoluments £	Pension contribution £
Executive Directors Nicholas John
Jefferies	320,000	64,000	10,530*	394,530	22,400
Simon Mark Gibbins	206,000	41,200	13,232*	260,432	13,390
	526,000	105,200	23,762	654,962	35,790
Non-Executive
Directors
Richard James Moon	101,000**	—	—	101,000	—
Graham John Williams	34,300	—	—	34,300	—
Richard John Brooman Henrietta Elizabeth	33,300	—	—	33,300	—
Marsh	25,000	—	—	25,000	—
	193,600	—	—	193,600
Total	719,600	105,200	23,762	848,562	35,790

* includes a car allowance of £9,000 p.a.

** paid to Synergie Business Limited, a company chaired by Richard Moon and in which he is a shareholder

All the Executive Directors receive benefits comprising the provision of health insurance, life insurance and a company car.

(e) There is no arrangement under which any Director has waived or agreed to waive future emoluments or nor has there been any waiver of emoluments during the financial year immediately preceding the date of this document.

10.1. Interests of the Directors and Senior Management in Shares

(a) The interests of the Directors and Senior Management in the share capital of the Company (all of which, unless otherwise stated, are beneficial or are interests of a person connected with a Director or member of Senior Management) as at the date of this document and as they are expected to be immediately following Admission are as follows:

	Immediately prior to Admission(1)		Immediately following Admission
Name	Number of Shares	Percentage of existing Share capital	Number of Shares(1)	Percentage of existing Share capital(1)
Richard James Moon	65,100(2)	0.21	74,900(3)	0.12
Nicholas John Jefferies	36,898	0.12	73,796	0.12
Simon Mark Gibbins	14,365	0.05	28,730	0.05
Graham John Williams	1,200	0.004	2,400	0.004
Richard John Brooman	4,000	0.01	8,000	0.01
Henrietta Elizabeth Marsh	0	0	0	0

Notes:

(1) Assuming the relevant Shareholder takes up their Rights Issue Shares in full.

(2) Of these 65,100 Ordinary Shares:

(a) 9,800 are held by Richard Moon in his personal capacity;

(b) 10,000 are held by Synergie Business Ltd (a company of which Richard Moon holds 32.5 per cent. of the issued share capital); and

(c) 45,300 are held by Synvest Ltd (a company in which Richard Moon holds 1 share, and which is a subsidiary of Synergie Business Ltd.

• (3) Assuming Richard Moon takes up his rights in relation to shares held in his personal capacity only.
• (b) As at the date of this document, the Directors held the following options and awards to subscribe for Ordinary Shares or were allocated Ordinary Shares under the Share Plans which may be satisfied by a subscription of Ordinary Shares:

Name and date of grant	Number of Ordinary Shares under option or award	Percentage of share capital	Exercise price per share (pence)	Exercise period
2010 CSOP Nicholas John Jefferies (01.09.2010)	13,678	0.04	204	01.09.2013 – 01.09.2020
Special Awards Nicholas John Jefferies (31.03.2009)	584,777	1.87	N/A	31.03.2012 – 31.03.2019
Simon Mark Gibbins (20.07.2010)	139,860	0.45	N/A	20.07.2013 – 20.07.2020
2008 LTIP Awards Nicholas John Jefferies (31.03.2010)	247,190	0.79	N/A	31.03.2013 – 31.03.2020
Nicholas John Jefferies (28.03.2012)	192,307	0.61	N/A	28.03.2015 – 28.03.2022
Simon Mark Gibbins (28.03.2012)	89,134	0.28	N/A	28.03.2015 – 28.03.2022
Nicholas John Jefferies	169,851	0.54	N/A	28.03.2016 – 28.03.2023
(28.03.2013) Simon Mark Gibbins (28.03.2013)	78,726	0.25	N/A	28.03.2016 – 28.03.2023
Renewed LTIP Awards Nicholas John Jefferies (31.03.2014)	133,064	0.42	N/A	31.03.2019 – 31.03.2024
Simon Mark Gibbins (31.03.2014)	61,548	0.20	N/A	31.03.2019 – 31.03.2024

Options held by senior managers

Name and date of grant	Number of Ordinary Shares under option or award	Percentage of share capital	Exercise price per share (pence)	Exercise period
2010 CSOP
Martin Pangels
(1 September 2010)	13,678	0.04	204	1 September 2013 – 1 September 2020
Paul Neville
(1 September 2010)	13, 678	0.04	204	1 September 2013 – 1 September 2020
2008 LTIP Awards
Martin Pangels
(1 July 2010)	47,363	0.15	N/A	1 July 2013 – 1 July 2020
Martin Pangels
(01.09.2010)	10,431	0.03	N/A	01.09.2013 – 01.09.2020
Martin Pangels
(28.03.2012)	77,884	0.25	N/A	28.03.2015 – 28.03.2022
Martin Pangels
(28.03.2013)	68,789	0.22	N/A	28.03.2016 – 28.03.2023
Paul Neville
(31.03.2010)	67,534	0.22	N/A	31.03.2013 – 31.03.2020
Paul Neville (01.09.2010)	10,431	0.03	N/A	01.09.2013 – 01.09.2020
Paul Neville
(28.03.2012)	77,884	0.25	N/A	28.09.2015 – 28.09.2022
Paul Neville
(28.03.2013)	68,789	0.22	N/A	28.03.2016 – 28.03.2023
Paul Webster
(28.03.2012)	38,461	0.12	N/A	28.03.2015 – 28.03.2022
Paul Webster
(28.03.2013)	33,970	0.11	N/A	28.03.2016 – 28.03.2023
Gary Shillinglaw
(28.03.2012)	27,884	0.09	N/A	28.03.2015 – 28.03.2022
Gary Shillinglaw
(28.03.2013)	24,628	0.08	N/A	28.03.2016 – 28.03.2023
Renewed LTIP Awards
Martin Pangels
(31.03.2014)	53,709	0.17	N/A	31.03.2019 – 31.03.2024
Paul Neville
(31.03.2014)	53,709	0.17	N/A	31.03.2019 – 31.03.2024
Paul Webster
(31.03.2014)	26,612	0.09	N/A	31.03.2019 – 31.03.2024
Gary Shillinglaw (31.03.2014)	19,193	0.06	N/A	31.03.2019 – 31.03.2024

(c) there are no outstanding loans granted by any member of the Group to any Director or member of Senior Management, nor has any guarantee been provided by any member of the Group for their benefit.

• (d) There are no:
• (i) potential conflicts of interest between any duties to the Company of the Directors or Senior Management and their private interests and/or other duties; or
• (ii) arrangements or understandings with major Shareholders, customers of or suppliers to the Group, or any other person, pursuant to which any Director or member of Senior Management was appointed.
• (e) Except as set out in section 11.4(a) and 11.4(b) of this Part XVII and in Part XV (''Terms and Conditions of the Rights Issue''), there are no restrictions agreed with any Director or any member of Senior Management on the disposal of the holdings of the Company's securities.

10.2. Number of Acal employees

The Acal Group aims to attract and retain the best people by committing to excellent employment standards and enabling employees to enhance their experience and capabilities and reach their full potential. The Acal Group employs people across Europe and Asia and the recruitment, retention and management of high calibre employees is critical to its continued success and sustained growth. The Acal Group recognises the key contribution its employees make to the business. Ensuring their wellbeing and making them feel motivated and valued are important priorities.

The number of employees of the Acal Group for each financial year for the period covered by the historical financial information is as follows:

• (a) 898 at 31 March 2012;
• (b) 719 at 31 March 2013; and
• (c) 1,301 at 31 March 2014.

10.3. Number of Noratel employees

Details of the number of employees of Noratel for the years ended 31 December 2011, 31 December 2012, and 31 December 2013 are set out below:

• (a) 2,349 at 31 December 2011;
• (b) 2,300 at 31 December 2012; and
• (c) 2,357 at 31 December 2013.

As at the Latest Practicable Date Noratel employed more than 2,300 persons.

11. Acal Share Plans

The Company operates the following Acal Share Plans:

11.1. 1998 Approved and Unapproved Share Option Plans

The 1998 Approved and Unapproved Executive Share Option Plans, the rules of which are similar in all material respects, were approved by shareholders on 5 January 1998 and expired in 2008. No further options may be granted under these plans. Options lapse seven years from the date of grant. The exercise price per Ordinary Share for each option was set at the time of grant and was equal to the closing mid-market price of the Ordinary Shares on the trading day immediately before the date of grant. Outstanding options granted in 2007, the last options granted under the Approved and Unapproved Executive Share Option Plans, will lapse on 7 June 2014.

11.2. 2008 Long Term Incentive Plan

The 2008 Long Term Incentive Plan was approved by shareholders on 24 July 2008 as a replacement for the 1998 Approved and Unapproved Executive Share Option Plans. This plan was renewed in 2013 on substantially the same terms with the approval of shareholders on 26 July 2013. The Renewed 2008 Long-Term Incentive Plan expires on 26 July 2018. Under this plan, executive directors and senior managers selected by the Remuneration Committee on the basis of such factors as their contribution to the Group's success, are eligible each year to receive an award of up to 150 per cent. of base salary. Subject to this limitation, actual grant levels are determined by the Remuneration Committee.

Awards are currently made in the form of nil-cost options. From 1 March 2014, awards may normally be exercised between five and ten years from the date of grant if the performance condition set by the Remuneration Committee is met. The performance condition is measured over a three-year period from the date of grant and applies as follows:

• * for 50 per cent. of the Ordinary Shares under award, the target is based on the total shareholder return (''TSR'') performance of the Company as measured against a comparator group consisting of the FTSE Small Cap Index. Vesting is as follows: Median = 25 per cent. vesting; Upper Quartile = 100 per cent. vesting; and
• * for 50 per cent. of the Ordinary Shares under award, the target is based on the Company's absolute TSR as measured against the Consumer Price Index (''CPI''). Vesting is as follows CPI + 10 per cent. = 25 per cent. vesting; CPI + 20 per cent. = 100 per cent. vesting.

The performance condition is kept under review by the Remuneration Committee to ensure that it is supportive of the Company's strategy. Awards granted after 1 March 2014 will become exercisable after five years over a number of Ordinary Shares determined at the end of the three year performance period. An additional number of shares equal to the value of dividends that would have been paid on the vested shares between the end of the performance period and the date of exercise will be released on exercise.

Special rules apply on termination of employment and on a change of control.

In the event of a variation of share capital of the Company, including the Rights Issue, option awards must be adjusted in the manner that the Remuneration Committee determines to be appropriate and the advisors to the Company have confirmed in writing to be in their opinion fair and reasonable.

11.3. 2010 Company Share Option Plan

The 2010 Company Share Option is a company share option plan which was adopted by the Board on 18 June 2010 and expires on 18 June 2020 and which meets the requirements of Schedule 4 to the Income Tax (Earnings and Pensions) Act 2003. Options may be granted to eligible employees and executive directors selected by the Remuneration Committee.

The exercise price per Share is set at the date of grant and is equal to the closing midmarket price of the Ordinary Shares on the trading day immediately before the date of grant. Options may normally be exercised between three and ten years from the date of grant if any performance condition set by the Remuneration Committee is met. For the options granted to date, the performance condition is as follows, measured over a three-year period from the date of grant:

• * for 50 per cent. of the Ordinary Shares under option, the target is based on the TSR performance of the Company as measured against a comparator group consisting of the FTSE Small Cap Index. Vesting is as follows: Median = 25 per cent. vesting; Upper Quartile = 100 per cent. vesting; and
• * for 50 per cent. of the Ordinary Shares under option, the target is based on the Company's absolute TSR as measured against RPI. Vesting is as follows: RPI + 15 per cent. = 25 per cent. vesting; RPI + 30 per cent. = 100 per cent. vesting.

Special rules apply on termination of employment and on a change of control.

In the event of a variation of share capital of the Company, including the Rights Issue, the Board may make any adjustment it considers appropriate to the exercise price per Share and/ or the description of the Ordinary Shares and/or number of Ordinary Shares comprised in outstanding options, with the agreement of HMRC.

11.4. Special awards

(a) Nicholas Jefferies' special award

On 31 March 2009, Mr Jefferies was granted an award in the form of a nil-cost option over 620,498 Ordinary Shares in order to facilitate his appointment as Group Chief Executive. The fair value of the award was equivalent to 200 per cent. of Mr Jefferies' base salary at the date of grant. The number of Ordinary Shares under the award was determined using a Share price of 90.25 pence per Share, being the closing price of the Ordinary Shares on 30 March 2009, the trading day immediately before the date of grant.

The award was made on similar terms to awards granted under the 2008 Long Term Incentive Plan. The award vested in part on 31 March 2012 (94.2432 per cent. of the award vested) following independent testing by MM&K Limited on the basis of an analysis produced by JP Morgan Cazenove. The award is exercisable over 584,777 Ordinary Shares. He has undertaken to retain, on a cumulative basis, Ordinary Shares acquired on any future exercise of options equal to his basic annual salary (based on the market value of the shares at the date of vesting).

In the event of a variation of share capital of the Company, including the Rights Issue, the Board may make any adjustment it considers appropriate to the number of Ordinary Shares in the award and/or the terms and conditions applying to the award.

(b) Simon Gibbins' special award

On 20 July 2010, Mr Gibbins was granted an award in the form of a nil-cost option over 179,447 Ordinary Shares to facilitate his appointment as Group Finance Director. The fair value of the award was equivalent to 150 per cent. of Mr Gibbins' base salary at the date of grant. The number of Ordinary Shares under the award was determined using a Share price of 163 pence per Ordinary Share, being the closing price of the Ordinary Shares on 19 July 2010, the trading day immediately before the date of grant.

The award was made on similar terms to awards granted under the 2008 Long Term Incentive Plan. The award vested in part on 20 July 2013 (77.94 per cent. of the award vested) following independent testing by MM&K Limited on the basis of an analysis produced by JP Morgan Cazenove. The award is exercisable over 139,860 shares. Mr Gibbins has undertaken to retain at least 50 per cent. of the vested shares when combined with any Ordinary Shares that he receives under the 2008 Long Term Incentive Plan or the Renewed 2008 Long-Term Incentive Plan, to build up a holding of Ordinary Shares equivalent in market value (at the point of vesting) to 100 per cent. of his annual basic salary.

In the event of a variation of share capital of the Company, including the Rights Issue, the Board may make any adjustment it considers appropriate to the number of Ordinary Shares in the award and/or the terms and conditions applying to the award.

12. Pensions and other retirement benefits

The Group makes payments to various defined contribution pension schemes. In the United Kingdom, the relevant scheme is the Acal Group Employment Pension Scheme. Contributions by both employees and Group companies are held in externally invested trustee-administered funds. Members are required to contribute at a minimum rate of 2.5 per cent. of contributory salary, but can contribute at a higher rate in 0.5 per cent. steps. The Company's contribution depends on each member's level of contribution, but is generally capped at 6.5 per cent. of contributory salary. No fluctuating payments made to Executive Directors are pensionable.

The acquisition of the Sedgemoor Group in June 1999 brought with it certain defined benefit pension schemes (the ''Sedgemoor Scheme''), of which the principal one was the Sedgemoor Group Pension Fund. The Sedgemoor Scheme is funded by the Company and provides benefits based on final pensionable salary and its assets are held in a separate trustee-administered fund. The Sedgemoor Scheme is closed to new members. Employees were given the opportunity to join the Acal Group Employment Pension Scheme and future service benefits ceased to accrue to members under the Sedgemoor Scheme. Contributions to the Sedgemoor Scheme are determined in accordance with the advice of independent, professionally qualified actuaries.

13. Material contracts of Acal

13.1. A sale and purchase agreement between Acal Supply Chain Holdings Limited and JCCO 313 Limited, dated 5 December 2012 pursuant to which Acal Supply Chain Holdings Limited sold the entire issued share capital of Acal Supply Chain Limited for an initial consideration of £2.0 million on a debt free basis. This amount is subject to certain adjustments calculated in accordance with the provisions of the sale and purchase agreement. An additional payment, equal to 25 per cent. of any sale proceeds in excess of £2.0 million (and capped at £9.0 million), will be payable to Acal Supply Chain Holdings Limited if Acal Supply Chain Limited or its business is sold to a third party.

• 13.2. An asset purchase agreement between Acal Supply Chain Limited and the Acal Group, dated 4 December 2012 pursuant to which Acal Supply Chain Limited agreed to sell its Enterprise Business to the Acal Group.
• 13.3. A transitional services agreement between Acal Supply Chain Ltd and the Acal Group, dated 31 December 2012 pursuant to which Acal Supply Chain Limited will provide finance and accounting services to the Enterprise Business.
• 13.4. A sale and purchase agreement between Acal BFi Nordic AB and the shareholders of Hectronic AB, dated 31 May 2011 pursuant to which Acal BFi Nordic AB agreed to buy the entire issued share capital of Hectronic AB for a total consideration of SEK 12,105,740 (£1.2 million) in cash at completion.
• 13.5. A sale and purchase agreement between Acal Electronics Holdings Limited and the shareholders of MTC Micro Tech Components GmbH and the shareholder of EMC Innovation Co. Ltd, dated 4 October 2011 pursuant to which Acal Electronics Holdings Limited agreed to acquire the entire issued share capital of MTC Micro Tech Components GmbH and EMC Innovation Co. Ltd for consideration of £2.4 million subject to a working capital adjustment, which was calculated as a further £0.2 million and was paid in November 2011. A further £0.8 million of a maximum of £1.1 million earn out was paid in March 2013 based on EBIT targets achieved over the 12 month periods to 31 December 2011 and 31 December 2012.
• 13.6. On 5 March 2013, Acal Newco Limited entered into a facility agreement with Clydesdale Bank PLC the purpose of which was to provide loans to Acal Newco Limited to enable it to pay the initial consideration in connection with the purchase of the entire issued share capital of Aramys SAS (''Aramys'') and for general corporate purposes. Advances under the facility are guaranteed by Acal and various other members of the Acal Group. Advances under the facility will attract a rate of interest for each interest period equal to the applicable Libor rate for the corresponding period (or EURIBOR in relation to any loans in euro) plus a margin of 3 per cent. plus mandatory costs. If Acal NewCo Limited or any of the Acal guarantors fails to pay any amount payable when due, an additional default interest of 2 per cent. is chargeable. The facility agreement contains customary conditions to utilisation and certain representations, warranties and undertakings customary for facilities of this nature in relation to five Acal Group companies. The facility agreement also contains customary mandatory prepayment events. The facility may be required to be prepaid in full in the event that there is change of control of Acal. Certain arrangement and commitment fees are payable under the facility.
• 13.7. A sale and purchase agreement, dated 7 March 2013, pursuant to which Acal NewCo Limited agreed to acquire the entire issued share capital of Aramys and all outstanding warrants issued by Aramys. The parties to the sale and purchase agreement were Acal Newco Limited, Acal (as guarantor for Acal Newco Limited) and Yrix Capital Conseil, Initiative & Finance Investissement (represented by its managing company, Initiative Finance Gestion), Christian Roux and certain management sellers and family members. The upfront consideration payable by Acal Newco Limited, according to the sale and purchase agreement, was c9.5 million free of all debt and all cash and assuming all convertible bonds had previously converted and all warrants not being purchased had already been converted. In addition to the upfront consideration, a maximum of up to c1.8 million may be payable based on Aramys achieving certain EBIT performance conditions in the financial years ending 31 December 2013, 31 December 2014 and 31 December 2015.
• 13.8. A warranty agreement, dated 7 March 2013, between Yrix Capital Conseil, Initiative & Finance Investissement (represented by its managing company, Initiative Finance Gestion), Christian Roux, Mr Georges Gener, Mr Jean-Pierre March and Acal Newco Limited containing commercial warranties (customary for a transaction of this nature) and certain specific indemnities. The warranties in the warranty agreement are subject to matters that have been disclosed to Acal Newco Limited. The liability of the warrantors for claims under warranties and indemnities is subject to certain customary time limitations as to the period for making claims and financial limitations on the amount that may be claimed, including thresholds and an aggregate financial cap. The liability under warranties contained in the sale and purchase

agreement and the warranty agreement were insured, subject to a cap of c3 million and the terms and conditions of an insurance policy dated 7 March 2013 entered into between Acal Newco Limited and Zurich Insurance plc (French Branch).

• 13.9. On 8 March 2013, Oriel Securities and Acal entered into a placing agreement under which Oriel Securities agreed, subject to certain conditions, to procure purchasers for, or failing which, itself to purchase, New Ordinary Shares at a predetermined placing price. The placing agreement provided, inter alia, for the payment of commission by Acal to Oriel Securities and all reasonable costs, charges and expenses incidental to the issue of New Ordinary Shares by Acal. The placing agreement also contained certain customary undertakings, warranties and indemnities by Acal in favour of Oriel Securities. In connection with the placing agreement, Acal, Oriel Securities and Montecristo Funding Limited entered into (i) a subscription agreement; and (ii) an option agreement, each dated 8 March 2013, in respect of the subscription and transfer of ordinary shares and redeemable preference shares in Montecristo Funding Limited in connection with the placing referred to above and to fund the acquisition referred to in sub-paragraph (f) above.
• 13.10. A sale and purchase agreement dated 6 August 2013 between Acal BFi UK Ltd, H. Young (Operations) Limited and H. Young Holdings Plc whereby Acal BFi UK Ltd acquired the trade and assets of YEG for a total cash consideration of £1.7 million before completion adjustments and expenses.
• 13.11. A share purchase agreement dated 14 October 2013, pursuant to which Acal Supply Chain Holdings Limited transferred all the issued shares in EAF Computer Service Supplies GmbH to EAF Holding GmbH (a company in which the EAF Management Team participated) for the aggregate sum of c4.4 million.
• 13.12. A share purchase agreement between Acal GmBH and Mr H Gotta dated 28 November 2013 pursuant to which Acal plc acquired RSG for an upfront cash consideration of c3.0 million (£2.5 million) before expenses and a deferred cash consideration of c0.25 million (£0.2 million) payable after 18 months.
• 13.13. A share purchase agreement between Acal and Agilitas Holdings Limited (''Agilitas'') dated 15 May 2014, pursuant to which Acal disposed of Acal Enterprise Solutions Limited (''AES Limited'') (the remaining business contained within its Supply Chain Division) for a cash consideration of £6.0 million, of which £0.3 million was to be deferred, at Agilitas' option, until no later than 31 December 2014. This amount is subject to certain adjustments calculated in accordance with the provisions of the share purchase agreement. An additional payment, equal to 20 per cent of any sale proceeds in excess of £8.5 million will be payable to Acal if AES Limited or its business is sold to a third party in the 12 months following completion of the disposal by Acal.

13.14. The Facility Agreement

Acal plc (among others) has entered into the Facility Agreement with certain lenders for the provision of the Facility of up to £70 million. The purpose of the Facility is to provide loans to the Purchaser to enable it to directly or indirectly finance or refinance the Acquisition and certain existing indebtedness of any member of the Group including (following completion of the Acquisition) the Noratel Group, to fund future permitted acquisitions and to provide certain group-wide working capital facilities.

The Termination Date under the Facility is the date falling 5 years from the date on which the Acquisition completes and the lenders' commitments under the Facility will reduce by £625,000 every six months commencing June 2015.

Advances under the Facility will attract a rate of interest for each interest period equal to 2.40 per cent. per annum (subject to margin ratchet) plus LIBOR (or the equivalent rate for the applicable currency). Advances under the Facility are intended to be guaranteed by Acal and various other members of the Enlarged Group. Until these guarantees are in place, Acal will grant security over its shares in Acal Electronics Holdings Ltd and the Purchaser.

Certain fees are payable in respect of the Facility including facility agent and security trustee fees, commitment fees and letter of credit fees. Also included is an up-front arrangement fee.

The Facility is committed, conditional on customary conditions to utilisation including completion of the Acquisition and the Rights Issue. If the Acquisition does not close by 30 September 2014, then the Facility will be automatically cancelled, subject to lender approval to continue.

The Facility Agreement contains certain representations, warranties and undertakings and other obligations which include an undertaking to provide certain information in relation to the Enlarged Group and to maintain certain financial ratios. The financial ratio levels are tested on a quarterly basis and require that Interest Cover (as defined in the Facility Agreement) must be not less than 4.00 and Leverage (as defined in the Facility Agreement) must not be more than 3.25 (in respect of the quarter date falling on or around 31 December 2014) and 3.00 (thereafter).

Other undertakings include, with certain exceptions and carve-outs, restrictions on (i) mergers, (ii) disposals, (iii) the granting of security, (iv) acquisitions, (v) financial indebtedness, (vi) certain loans and guarantees, and (vii) waivers or amendments of the Sale and Purchase Agreement.

The Facility Agreement contains customary mandatory prepayment events. The Facility may also be required to be prepaid in full in the event that there is change of control of Acal or a removal of its shares from the Official List.

The Facility Agreement includes customary events of default. At any time after the occurrence of an event of default, lenders holding 66² /3 per cent of the commitments under the Facility may instruct the facility agent and/ or security trustee to cancel, accelerate and take certain other action in relation to the Facility and any related security.

13.15. The Underwriting Agreement

On 5 June 2014, Oriel Securities and Acal entered into the Underwriting Agreement under which Oriel Securities has agreed, subject to the conditions referred to below, to procure purchasers for, or failing which, itself to purchase, Rights Issue Shares.

The Underwriting Agreement provides, inter alia, for the payment of the following amounts by Acal to Oriel Securities:

• (i) a commission of 3.5 per cent. on a sum equal to the number of the Rights Issue Shares multiplied by the relevant issue price; and
• (ii) a discretionary commission of 0.25 per cent. on a sum equal to the number of the Rights Issue Shares multiplied by the Issue Price, which may be paid to Oriel Securities at the discretion of Acal.

Acal will pay all reasonable costs, charges and expenses of, or incidental to, the issue of Rights Issue Shares, including the fees of the London Stock Exchange, printing costs, registrars' fees, Oriel Securities' legal (subject to certain caps), accountancy, actuarial, settlement underwriting and other out-of-pocket expenses, and all related irrecoverable VAT, if applicable.

The Underwriting Agreement, which contains certain customary undertakings, warranties and indemnities by Acal in favour of Oriel Securities, is conditional (inter alia) on:

• (i) the passing of the Resolutions; and
• (ii) the admission of the Rights Issue Shares (nil paid) to the Official List of the London Stock Exchange and such admission becoming effective by 8.00 a.m. on 24 June 2014 (or such later time and date as the Company and Oriel Securities may agree, but not later than 1 July 2014).

Oriel Securities has certain rights to terminate the Underwriting Agreement prior to Admission including in the event of breach of warranty or other material breach of the Underwriting Agreement by Acal and upon certain force majeure events.

• 13.16 The Sale and Purchase Agreement which is summarised in Part VIII (Summary of Principal Terms of the Acquisition) of this document.
• 13.17. Save as set out in paragraphs 13.1 to 13.16, there are no contracts, other than contracts entered into in the ordinary course of business, which have been entered into by any member of the Group within the period of two years immediately preceding the issue of this document

which are, or may be, material or that contain any provisions under which any member of the Group has any obligation or entitlement which is material to the Group as at the date of this document.

14. Material contracts of Noratel

There are no contracts, other than contracts entered into in the ordinary course of business, which have been entered into by Noratel within the period of two years immediately preceding the issue of this document, which are, or may be, material or that contain any provisions under which any member of the Group has any obligation or entitlement which is material to the Group as at the date of this document.

15. Related party transactions

A description of the related party transactions the Group entered into for the 2012 Financial Year are disclosed in accordance with the respective standard adopted according to Regulation (EC) No1606/2002 in note 34 on pages 83 and 84 of the 2012 Annual Report.

During the 2012 Financial Year the Company disposed of its subsidiary Acal Supply Chain Limited to the management team of Acal Supply Chain Limited. The management team was considered a related party of the Company for the purposes of the Listing Rules and the disposal was therefore a related party transaction and subject to shareholder approval. Shareholder approval was granted and the transaction completed on 3 January 2013.

During the 2013 Financial Year the only related party transactions entered into by the Group was between the Company and Aberforth Partners LLP in respect to the participation in the equity placing which took place in March 2013. The placing of Ordinary Shares to Aberforth Partners LLP constituted a smaller related party transaction under LR.11.1.10 of the Listing Rules.

During the 2014 Financial Year, the Company disposed of its German subsidiary, EAF Computer Service Supplies GmBH (''EAF GmBH'') to a company, in which the EAF GmBH management team participated, together with certain third party investors for a consideration of 4.4 million euros (£3.7 million), comprising of an up-front payment of c4 million (£3.4 million), and a differed consideration of c0.4 million (£0.3 million). Under the Listing Rules, the EAF GmBH management team was considered to be a related party of the Company, and the disposal was therefore a related party transaction, and subject to shareholder approval.

In addition, during the 2014 Financial Year the Company also disposed of AES Limited, the remaining business contained within its Supply Chain, to Agilitas Holdings Limited, a company in which the AES management team participated, together with certain third party investors for a cash consideration of £6.0 million, comprising an up-front payment of £5.7 million, and a deferred consideration of £0.3 million. Under the Listing Rules, the AES management team was considered to be a related party of the Company, and the disposal was therefore a related party transaction, and approved by Shareholders.

16. Litigation and claims

There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which Acal is aware) which may have or have had in the recent past (covering the 12 months immediately preceding the date of this document) a significant effect on Acal and/or the Acal Group's financial position or profitability.

There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which Acal is aware) which may have or have had in the recent past (covering the 12 months immediately preceding the date of this document) a significant effect on Noratel and/or the Noratel Group's financial position or profitability.

17. Working capital

Acal is of the opinion that, taking into account the net proceeds of the Rights Issue, and the bank and other facilities available to the Acal Group, the working capital available to the Acal Group is sufficient for its present requirements, that is, for at least the 12 months following the date of publication of this document.

Acal is of the opinion that, taking into account the net proceeds of the Rights Issue, the Facility and the bank and other facilities available to the Enlarged Group, the working capital available to the Enlarged Group is sufficient for its present requirements, that is, for at least the 12 months following the date of publication of this document.

18. No significant change

There has been no significant change in the financial or trading position of Acal since 31 March 2014 (the date to which the last published accounts of Acal were prepared) except for the disposal of AES Limited, which was approved by Shareholders on 2 June 2014, the details of which are set out in paragraph 13.13 of this Part XVII.

There has been no significant change in the financial or trading position of Noratel since 31 December 2013 (the date to which the historical financial information of the Noratel Group, as set out in Part XIII (B) of this document, was prepared).

19. Consent

Oriel Securities has given and has not withdrawn its written consent to the issue of this document with the inclusion herein of the references to its name in the form and context in which it appears.

KPMG LLP has given and has not withdrawn its written consent to the inclusion of its reports in Part XIII and Part XIV of this document in the form and context in which they appear.

20. Information incorporated by reference

This document should be read and construed in conjunction with the following documents which have been previously published and filed with the FCA and which shall be deemed to be incorporated in, and form part of, this document.

To the extent that any document or information incorporated by reference or attached to this document itself incorporated any information by reference, either expressly or impliedly, such information will not form part of this document for the purposed of the Prospectus Rules, except where such information or documents are stated within this document as specifically being incorporated by reference or where this document is specifically defined as including such information.

Any statement contained in a document which is deemed to be incorporated by reference into the is document shall be deemed to be modified or superceded for the purpose of this document to the extent that a statement contained in this document (or in a later document which is incorporated by reference into this document) modifies or supercedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modified or superceded shall not be deemed, except as so modified or superseded, to constitute a part of this document.

Section A of Part XIII (''Historical Financial Information''), Part X (''Operating and Financial Review of Acal'') and the table below list the various sections of certain documents which are incorporated by reference into this document in compliance with Prospectus Rule 2.4.1.These documents are also available for inspection as set forth in paragraph 21 of this Part XVII (''Additional Information'') and also available on the Company's website at www.acalplc.co.uk.

Information incorporated by reference into this document	Page numbers in such document	Location of incorporation in this document
The following sections for the 2014 Final Result:
Acal Group Audited Accounts	55	79
Independent Auditors Report	56	79
Consolidated statement of changes in Shareholders' equity	61	79
Consolidated cash flow statement	62	79
Notes to the Audited Accounts	63	79
Financial Review	16	61
The following sections for the 2013 Annual Report:
Operating Review	6-9	61
Financial Review	18-20	61
Consolidated financial statements	41-80	79
Auditors Report	42	79

Information incorporated by reference into this document	Page numbers in such document	Location of incorporation in this document
The following sections for the 2012 Annual Report:
Financial Review	20-24	61
Consolidated financial statements	43-84	79
Auditors Report	44	79

Except as set out above, no other portion of these documents is incorporated by reference into this document and those portions which are not specifically incorporated by reference in this document are either not relevant for the prospective investors or the relevant information is included elsewhere in this document.

21. Documents available for inspection

Copies of the following documents will be available for inspection during normal working hours on any weekday (Saturdays, Sundays and public holidays excepted) at the offices of Hogan Lovells International LLP, Atlantic House, Holborn Viaduct, London, EC1A 2FG and at the registered office of the Company, from the date of this document until the conclusion of the General Meeting on 23 June 2014:

• (a) the articles of association of the Company;
• (b) the Sale and Purchase Agreement;
• (c) the Underwriting Agreement;
• (d) the report from KPMG LLP on the historical financial information in relation to Noratel set out in Section B of Part XIII of this document;
• (e) the report from KPMG LLP on the pro forma financial information of the Enlarged Group set out in Part XIV of this document;
• (f) the Company's 2014 annual report, the Company's 2013 annual report and accounts and the Company's 2012 annual report and accounts;
• (g) the letters of consent set out in paragraph 18 of this Part XVI; and
• (h) a copy of this document and the Form of Proxy.

22. Announcement on results of the Acquisition and Rights Issue

The Company will make appropriate announcements to a Regulatory Information Service giving details of the results of the Acquisition and the Rights Issue.

Date: 5 June 2014

PART XVIII

Definitions and Interpretation

The definitions set out below apply throughout this document, unless the context requires otherwise.

''1998 Approved and Unapproved Executive Share Option Plans''	the 1998 Approved Executive Share Option Plan and the 1998 Unapproved Executive Share Option Plans operated by Acal
''2012 Annual Report''	the annual report and accounts for the Group for the 2012 Financial Year
''2012 Financial Year''	1 April 2011 to 31 March 2012
''2013 Annual Report''	the annual report and accounts for the Group for the 2013 Financial Year
''2013 Financial Year''	1 April 2012 to 31 March 2013
''2014 Final Dividend''	The proposed final dividend for the year ended 31 March 2014 of 6.85 pence per Ordinary Share
''2014 Financial Results''	The final audited results of the Company for the year ended 31 March 2014 released on 5 June 2014
''2014 Financial Year''	1 April 2013 to 31 March 2014
''Acal BFi'' or ''Acal BFi Group''	Acal BFi UK Ltd, Acal Bfi NV/SA, Acal Bfi GmbH, Acal Bfi France Holdings SAS, Acal Bfi Nordic AB, Acal Bfi Technology BV, Acal Bfi Italia Srl, and Acal Bfi Iberia SL
''Acal Share Plans''	the 1998 Approved Executive Share Option Plan, the 1998 Unapproved Executive Share Option Plan, the 2008 Long Term Incentive Plan, the Renewed 2008 Long-Term Incentive Plan, the 2010 Company Share Option Plan, Nick Jefferies' special award granted on 31 March 2009, and Simon Gibbins' special award granted on 20 July 2010.
''Acquisition''	the proposed acquisition by Acal of the entire Noratel Shares pursuant to the Sale and Purchase Agreement
''Additional Consideration Shares''	the new Ordinary Shares to be subscribed for by Stefan Larsson for cash at Completion pursuant to the Sale and Purchase Agreement
''Admission''	the admission of the Rights Issue Shares, nil paid, to the premium listing segment of the Official List and to trading on the London Stock Exchange's main market for listed securities becoming effective in accordance with, respectively, the Listing Rules and the Admission and Disclosure Standards
''Admission and Disclosure Standards''	the rules published by the London Stock Exchange containing, amongst other things, the admission requirements to be observed by companies seeking admission to trading on the London Stock Exchange's Main Market for listed securities
''Articles''	the articles of association of the Company, details of which are set out in section 5.2 of Part XVII (''Additional Information'') of this document
''Audit Committee''	the audit committee of the Company
''Banks''	HSBC Bank plc, Clydesdale Bank plc and Danske Bank A/S
''Board''	the board of Directors of the Company
''Business Day''	any day on which banks are generally open for the transaction of normal business other than a Saturday or Sunday or public holiday in London

CAGR the compound annual growth rate calculated as follows: ¹ beginning value ending value CAGR No. of years 1 ''CER'' constant exchange rate ''CCSS'' the CREST Courier and Sorting Service established by Euroclear to facilitate, among other things, the deposit and withdrawal of securities ''Certificated form'' where a share or other security is not in uncertificated form ''Closing Price'' the closing middle market quotation of a Share as derived from the Daily Official List on a given day ''Company'' or ''Acal'' Acal plc ''Completion'' completion of the Acquisition in accordance with the terms of the Sale and Purchase Agreement ''Consideration Shares'' the Initial Consideration Shares and the Additional Consideration Shares

the admission of the Consideration Shares to the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities becoming effective in accordance with respectively, the Listing Rules and the Admission and Disclosure Rules

''Corporate Governance Code'' the UK Corporate Governance Code published by the Financial Reporting Council in June 2010, as amended

''CREST'' the system for the paperless settlement of trades in securities and the holding of uncertificated securities operated by Euroclear

''CREST Manual'' the rules governing the operation of CREST, consisting of the CREST Reference Manual, CREST International Manual, CREST Central Counterparty Service Manual, CREST Rules, Registrars Service Standards, Settlement Discipline Rules, CCSS Operations Manual, Daily Timetable, CREST Application Procedure and CREST Glossary of Terms (all as defined in the CREST Glossary of Terms promulgated by Euroclear on 15 July 1996 and as amended)

''CREST member'' a person who has been admitted to Euroclear as a systemmember (as defined in the CREST Regulations)

''CREST participant'' a person who is, in relation to CREST, a system participant (as defined in the CREST Regulations)

''CREST Regulations'' the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended

''CREST sponsor'' a CREST participant admitted to CREST as a CREST sponsor

''CREST sponsored member'' a CREST member admitted to CREST as a sponsored member

''Directors'' the directors of the Company, whose names are set out in Part XII (''Directors, Senior Management and Corporate Governance'') of this document

''Disclosure and Transparency Rules'' the disclosure rules and transparency rules produced by the FCA under Part VI of FSMA, as amended

''Enlarged Group'' Acal as enlarged by the Acquisition

''Enterprise Business'' a non-core business within the Acal Group, primarily supporting end of service life, mid-range and mainframe enterprise systems, such as computer servers and data centres

''Euroclear'' Euroclear UK & Ireland Limited, the operator of CREST

''Consideration Share Admission''

''European Parts Business''	the European IT parts distribution business sold by Acal to EAF Holding GmbH on 11 November 2013 for gross proceeds of c4.4 million
''Excluded Shareholders''	Shareholders with a registered address in (subject to certain exceptions) an Excluded Territory
''Excluded Territories''	the United States of America, Canada, Australia and Japan and any other jurisdiction where the extension or availability of the Rights Issue (and any other transaction contemplated thereby) would breach any applicable law or regulation
''Executive Directors''	the executive directors of the Company, who are Nicholas Jefferies and Simon Gibbins
''Existing Ordinary Shares''	in relation to a particular date, the Ordinary Shares existing as at that date
''Existing Shares''	the Ordinary Shares in issue as at the Record Date
''Ex-Rights Date''	The date on which the Rights Issue Shares are expected to commence trading ex-rights, being, 24 June 2014
''Facility''	the term and revolving multi-currency debt facility, including new working capital facilities for the Group granted in relation to the Acquisition and the refinancing of certain Group-wide indebtedness pursuant to the Facility Agreement
''Facility Agreement''	the facility agreement dated 3 June 2014 to be entered into by certain members of the Group conditional on the Acquisition, as further described in Part XVII of this document
''FCA'' or ''Financial Conduct Authority''	Financial Conduct Authority of the United Kingdom
''Form of Proxy''	the form of proxy for use by Shareholders in connection with the General Meeting
''FSMA''	the Financial Services and Markets Act 2000, as amended
''Fully Paid Rights''	rights to acquire Rights Issue Shares, fully paid
''General Meeting''	the general meeting of the Company to be held at 2 Chancellor Court, Occam Road, Surrey Research Park, Guildford, Surrey, GU2 7AH at 11 a.m. on 23 June 2014, notice of which is set out at the end of this document
''Group or Acal Group''	the Company together with its subsidiaries and subsidiary undertakings
''Group Financial Information''	the 2012 Annual Report, the 2013 Annual Report and the 2014 Financial Results
''Hectronic''	Hectronic AB
''Herkules''	Herkules Private Equity (GP-I) Limited and Herkules Private Equity (GP-II) Limited, both private limited liability companies organised under the laws of Jersey, with registered office at 11-15 Seaton Place, St Helier, Jersey, JE4 0QH, Channel Islands, acting in their capacity as general partners to Herkules Private Equity (Jersey-I) L.P. and Herkules Private Equity (Jersey II) L.P.
''IASB''	the Information Accounting Standards Board
''IFRS''	International Financial Reporting Standards as adapted for use in the European Union
''Initial Consideration Shares''	the new Ordinary Shares to be issued to Management Sellers as consideration pursuant to the Sale and Purchase Agreement
''Latest Practicable Date''	4 June 2014, being the last practicable date prior to finalisation of this Prospectus for purposes of the Listings Requirements

''Listing Rules''	the listing rules made by the FCA under Part VI of FSMA, as amended
''London Stock Exchange''	London Stock Exchange plc
''Management Sellers''	Asle Tandberg (through ALT Holding AS), Thomas Larsson, Chris Buser, Jarle Gommerud, Reidar Kjaer and Stefan Larsson
''Member account ID''	the identification code or number attached to any member account in CREST
''Member State''	a member state of the EEA
''Memorandum''	the memorandum of association of the Company
''Money Laundering Regulations''	the Money Laundering Regulations 2007 (SI 2007 No. 2157), as amended
''MTC''	MTC Micro Tech Components GmbH
''Myrra'' or ''Myrra Group''	Myrra Hong Kong Limited, Zongshan Myrra Electronic Ltd, Myrra SAS Myrra Deutschland Gmbh, Myrra Hispania, and Myrra Power SP
''Nil Paid Rights''	Rights Issue Shares in nil paid form provisionally allotted to Qualifying Shareholders pursuant to the Rights Issue
''Nomination Committee''	the nomination committee of the Company
''Non-Executive Directors''	the non-executive directors of the Company, who are Richard Moon, Graham Williams, Richard Brooman and Henrietta Marsh
''Noratel''	Trafo Holdings AS, registered in Norway under number 996755193 whose registered office is at Elektrovere 7, 3300 Hokksund
''Noratel Group''	Noratel, its subsidiaries and subsidiary undertakings
''Noratel Shares''	the unconditionally allotted or issued and fully paid ordinary shares of NOK 1 each in the capital of Noratel
''Notice of General Meeting''	the notice of General Meeting set out at the end of this document
''NPE''	Noratel Power Engineering
''OEM''	Original Equipment Manufacturer
''Official List''	the Official List of the FCA
''Ordinary Shares or Shares''	the ordinary shares of 5p each in the share capital of the Company
''Oriel Securities''	Oriel Securities Limited, a company incorporated in England and Wales with registered number 04373759 whose registered office is at 150 Cheapside, London, EC2V 6ET, acting as bookrunner, sponsor and financial adviser in connection with the Rights Issue
''Overseas Shareholders''	Shareholders with a registered address outside the United Kingdom or who are a citizen or resident of a country other than the United Kingdom
''Participant ID''	the identification code or membership number used in CREST to identify a particular CREST member or other CREST participant
''Prospectus Directive''	Directive 2003/71/EC of the European Parliament and of the Council of the European Union
''Prospectus Rules''	the prospectus rules made by the FCA under Part VI of FSMA, as amended
''Provisional Allotment Letter''	the provisional allotment letter to be issued to Qualifying Non CREST Shareholders
''Purchaser''	Acal Nordic Holdings Limited, a subsidiary of the Company

''Qualifying CREST Shareholders''	Qualifying Shareholders whose Existing Shares on the register of members of the Company at the Record Date are in uncertificated form and held through CREST
''Qualifying Non-CREST Shareholders''	Qualifying Shareholders whose Existing Shares on the register of members of the Company at the Record Date are in certificated form
''Qualifying Shareholders''	Shareholders on the register of members of the Company at the Record Date, other than Excluded Shareholders
''Record Date''	5.00 p.m. on 19 June 2014
''Registrar'' or ''Receiving Agent''	Corporate Actions, Equiniti Limited, Aspect House, Spencer Road, Lancing BN99 6DA
''Regulation S''	Regulation S under the US Securities Act
''Regulatory Information Service''	any information service approved by the FCA as meeting the Primary Information Provider criteria and that is on the FCA's list of Regulatory Information Services
''Remuneration Committee''	the remuneration committee of the Company
''Reporting Accountants''	KPMG LLP
''Resolutions''	the Resolutions to be proposed at the General Meeting (and set out in the Notice of General Meeting)
''Rest of World''	a geographic location other than Europe, Asia or North America, where a business segment is engaged in providing products or services
''Rights Issue''	the offer to Qualifying Shareholders, constituting an invitation to apply for Rights Issue Shares, on the terms and subject to the conditions set out in this document and, in the case of Qualifying Non-CREST Shareholders, the Provisional Allotment Letters
''Rights Issue Price''	176 pence per Rights Issue Share
''Rights Issue Entitlement''	the entitlement of a Qualifying Shareholder to apply for Rights Issue Shares on the basis of One Rights Issue Share for every one Existing Share held and registered in their name on the record date
''Rights Issue Shares''	the 31,332,127 new Ordinary Shares being offered to Qualifying Shareholders pursuant to the Rights Issue
''RSG''	RSG Electronic Components GmbH
''Sale and Purchase Agreement''	the conditional sale and purchase agreement dated 4 June 2014 between the Purchaser and the Sellers relating to the Acquisition as described in paragraph 6 of Part VII of this document, a copy of which will be on display at the addresses specified in paragraph 21 of Part XVII of this document
''Sellers''	Herkules and the Minority Sellers
''Senior Management''	Martin Pangels, Paul Webster, Paul Neville and Gary Shillinglaw
''Shareholders''	holders of Ordinary Shares whose names are registered on the Company's register of members
''Stock account''	an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited
''Stortech''	Stortech Electronics Ltd
''UK Listing Authority'' or ''UKLA''	the Financial Conduct Authority acting in its capacity as the competent authority for listing under Part VI of FSMA
''UK Parts Business''	the new and refurbished parts and outsourcing business sold by Acal to EAF Supply Chain Limited (formerly Acal Supply Chain

	Limited) on 3 January 2013 for gross proceeds of £2.0 million (on a debt free basis)
''Uncertificated form''	recorded on the relevant register of Ordinary Shares as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST
''Underwriting Agreement''	the underwriting agreement dated 5 June between the Company and Oriel Securities in relation to the Rights Issue, details of which are set out in section 13.15 of Part XVII (''Additional Information'')
''United Kingdom'' or ''UK''	the United Kingdom of Great Britain and Northern Ireland
''United States'' or ''US''	the United States of America, its territories and possessions, any state of the United States and the District of Columbia
''US Securities Act''	the US Securities Act of 1933, as amended
''Vertec''	Vertec Scientific Ltd and Vertec Scientific SA
''YEG''	Young Electronics Group

PART XIX

Notice of General Meeting

NOTICE OF GENERAL MEETING

of

ACAL PLC

(Incorporated and registered in England and Wales with registered number 2008246)

NOTICE IS HEREBY GIVEN THAT a general meeting (the ''General Meeting'') of Acal plc (the ''Company'') will be held at 2 Chancellor Court, Occam Road, Surrey Research Park, Guildford, Surrey, GU2 7AH on 23 June 2014 at 11.00 a.m. for the purpose of considering and, if thought fit, passing the following resolutions (in which capitalised terms shall have the meanings given in the circular to Shareholders dated 5 June 2014 in connection with the Rights Issue of which this notice forms part (the ''Prospectus'') save where specified to the contrary herein):

RESOLUTION 1 (SPECIAL RESOLUTION)

THAT:

• (a) the terms of the Rights Issue be and are hereby approved and the Directors be and are hereby directed to implement the Rights Issue on the basis described in the Prospectus and be and are generally and unconditionally authorised to exercise all powers of the Company as necessary in connection with the implementation of the Rights Issue;
• (b) without prejudice to the authority conferred on the Directors at the last annual general meeting of the Company, the Directors be and are hereby generally and unconditionally authorised to exercise all the powers of the Company to allot or grant rights to subscribe for or to convert any security into shares in the Company in connection with the Rights Issue and the Acquisition up to an aggregate nominal amount of £1,651,979.45, such authority to apply until the end of the Company's next Annual General Meeting save that the Company may before such expiry make an offer or agreement which would or might require shares to be allotted or rights to be granted after such expiry and the Board may allot shares or grant such rights in pursuance of those offers or agreements as if this authority had not expired;
• (c) without prejudice to the authority conferred on the Directors at the last annual general meeting of the Company, the Directors be authorised to allot equity securities (as defined by section 560(1) of the Companies Act 2006) in the Company for cash up to 32,559,589 ordinary shares for the purposes of the Rights Issue and the Acquisition as if section 561 of the Companies Act 2006 did not apply, such authority to apply until the end of the Company's next Annual General Meeting, save that the Company may make offers and enter into agreements during the relevant period which would, or might, require equity securities to be allotted after the authority ends and the Directors may allot equity securities under any such offers or agreements as if the authority had not ended.

RESOLUTION 2 (ORDINARY RESOLUTION)

THAT the proposed acquisition of the entire issued and to be issued share capital (the ''Acquisition'') of Noratel on the terms and subject to the conditions contained in the Sale and Purchase Agreement (as defined in the Prospectus) be and is hereby approved and the Directors (or any duly constituted committee thereof) be authorised to: (i) take all steps necessary or desirable to execute, complete and give effect to the Sale and Purchase Agreement and the documents referred to in the Sale and Purchase Agreement in accordance with their respective terms and conditions, or otherwise in connection with, and to implement, the Acquisition; and (ii) to make such non-material modifications, variations, revisions, waivers, amendments or extensions of any of the terms and conditions of the Acquisition, the Sale and Purchase Agreement and/or any other documents or arrangements relating thereto, in either case as the Directors or any committee shall in their absolute discretion deem fit.

By order of the Board

G P SHILLINGLAW Group Company Secretary

Registered Office 2 Chancellor Court Occam Road Surrey Research Park Guildford GU2 7AH

5 June 2014

NOTES

• 1. A member of the Company entitled to attend, speak and vote at the meeting convened by the notice set out above may appoint a proxy to exercise all or any of his rights to attend, speak and vote at the meeting on his/her behalf. A proxy need not be a member of the Company. A member may appoint more than one proxy provided that each proxy is appointed to exercise the rights attached to different shares held by the member. To appoint more than one proxy you should contact Equiniti's shareholder helpline on 0871 384 2869 from within the UK (or +44 121 415 0828 from outside the UK) between 8.30 a.m. and 5.30 p.m. (London time) Monday to Friday. Calls to 0871 numbers cost 8p per mintue plus extra network costs.
• 1. To be valid, Forms of Proxy must be received by post or (during normal business hours only) by hand at the offices of the Company's registrars, Equiniti Limited, at Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA not later than 11.00 a.m. on 19 June 2014 (or not less than 48 hours before the time fixed for any adjourned meeting, excluding any part of a day that is not a working day and must be accompanied by any power of attorney or other authority). The Form of Proxy is enclosed.
• 1. Completion and return of a Form of Proxy will not prevent a member from attending and voting at the meeting in person should he wish to do so.
• 1. As an alternative to completing the Form of Proxy enclosed, you can appoint a proxy electronically by visiting www.sharevote.co.uk where details of the procedure to be followed are given. The Voting ID, Task ID and Shareholder Reference Number shown on the face of the Form of Proxy enclosed will be required to complete the procedure. For an electronic proxy appointment to be valid, it must be received no later than 48 hours before the time fixed for holding the meeting (excluding any part of a day that is not a working day). It will not be accepted if found to contain a computer virus.
• 1. As an alternative to completing this hard-copy proxy form or using the CREST service, you can appoint a proxy electronically by email. To be valid, this electronic proxy appointment must be signed, dated* and a scanned copy of the original sent by email to the Company's Registrars, Equiniti, to proxy.votes@equiniti.com, to be received by the Company no later than 11.00 a.m. on 29 May 2014 (or 48 hours before the adjourned meeting (excluding any part of a day that is not a working day) at which the person named on the form is proposed to vote). Please note the Company will not accept any communication that is found to contain a computer virus.
• * A scanned copy of any power of attorney or other authority (if any) under which the appointment is made must also be sent by email.

The right to appoint a proxy does not apply to persons whose Ordinary Shares are held on their behalf by another person and who have been nominated to receive communications from the Company in accordance with section 146 of the Companies Act 2006 (''nominated persons''). Nominated persons may have a right under an agreement with the registered shareholder who holds the Ordinary Shares on their behalf to be appointed (or to have someone else appointed) as a proxy. Alternatively, if nominated persons do not have such a right, or do not wish to exercise it, they may have a right under such agreement to give instructions to the person holding the Ordinary Shares as to the exercise of voting rights.

• 1. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the General Meeting to be held on 23 June 2014 and any adjournment(s) thereof by using the procedures described in the CREST Manual which can be viewed at www.euroclear.com. CREST Personal Members, sponsored CREST members and CREST members who have appointed a voting service provider(s) should refer to their CREST sponsor or voting service provider(s) who will be able to take the appropriate action for them.
• 1. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a CREST Proxy Instruction) must be properly authenticated in accordance with Euroclear's specifications and must contain the information required for such instructions, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer's agent (IDRA19) by 11.00 a.m. on 19 June 2014. The time of receipt of the instruction will be the time (as determined by the timestamp applied to the message by the CREST Application Host) from which Equiniti is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the proxy another way.
• 1. CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will apply to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by a particular time. CREST members and, where applicable, their CREST sponsors or voting service providers should refer to the sections of the CREST Manual concerning practical limitations of the CREST system and timings.
• 1. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5) (a) of the Uncertified Securities Regulations 2001.
• 1. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that to be entitled to attend and vote at the General Meeting or any adjournment thereof (and for the purposes of determining the number of votes that may be cast) a person must be entered on the Company's register of members at 11.00 a.m. on 19 June 2014 (or, in the case of an adjourned meeting excluding any part of a day that is not a working day, 11.00 a.m. on the day which is 2 days

before the time of the adjourned meeting). Changes to entries on the register of members after this time shall be disregarded in determining the rights of any person to attend or vote at the General Meeting or any adjourned meeting (as the case may be).

• 1. As at 4 June 2014 (being the last business day prior to the publication of this General Meeting Notice) the Company's issued share capital consists of 31,332,127 Ordinary Shares shares carrying one vote each. Therefore the total voting rights in the Company as at 4 June 2014 are 31,332,127 Ordinary Shares.
• 1. Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided that they do not do so in relation to the same shares. In the case of joint holders, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company's register of members in respect of the joint holding (the first-named being the most senior).
• 1. Any member attending the meeting has the right to ask questions. The Company must cause to be answered any such question relating to the business being dealt with at the meeting but no such answer need be given if (a) to do so would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information, (b) the answer has already been given on a website in the form of an answer to a question, or (c) it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.
• 1. Members who wish to communicate with the Company in relation to the meeting should do so using the following means: (i) by writing to the Group Company Secretary at the registered office address or (ii) by writing to the Company's registrars, Equiniti, at Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA. No other methods of communication will be accepted. In particular you may not use any electronic address provided either in this Notice of General Meeting or in any related documents to communicate with the Company for any purposes other than those expressly stated.
• 1. A copy of this notice, and other information required by section 311A of the Companies Act 2006, can be found at www.Acalplc.co.uk.