ARMSCOTE INVESTMENT COMPANY PLC

Transcription

1 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this Document, you should consult a person authorised under the Financial Services and Markets Act 2000 who specialises in advising on the acquisition of shares and other securities. This Document has been drawn up in accordance with the requirements of the PLUS Rules for Issuers on the PLUS-quoted market ( PLUS ) and is not a prospectus for the purpose of FSMA or otherwise. The Company and the Directors of Armscote Investment Company plc, whose names appear on page 3, accept responsibility for the information contained in this Document. To the best of the knowledge and belief of the Company and its Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this Document is in accordance with the facts and does not omit anything likely to affect the import of such information. The share capital of the Company is not presently listed or dealt in on any stock exchange. PLUS, which is operated by PLUS Stock Exchange plc, a recognised investment exchange, is a market designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached than to larger or more established companies. It is not classified as a Regulated Market under EU financial services law and PLUS-quoted securities are not admitted to the Official List of the United Kingdom Listing Authority. A prospective investor should be aware of the risks of investing in PLUS-quoted securities and should make the decision to invest only after careful consideration and, if appropriate, consultation with an independent financial adviser authorised under the Financial Services and Markets Act 2000 who specialises in advising on the acquisition of shares and other securities. Armscote Investment Company plc is required by PLUS Stock Exchange plc to appoint a PLUS Corporate Adviser to apply on its behalf for admission to PLUS and must retain a PLUS Corporate Adviser at all times. The responsibility and duties of a PLUS Corporate Adviser are set out in the PLUS Rules for Issuers. The bid-offer spread of the Ordinary Shares can be wide, which indicates a lack of liquidity, resulting in it being more difficult to trade in the Ordinary Shares. It also means that share prices have to move further in order for trades to become profitable. The Ordinary Share are classed as penny shares under FSA rules. The price quoted on PLUS for the Ordinary Shares is the mid-market price. The Company can give no assurance that an active trading market for the Ordinary Shares will develop or, if developed, be sustained following their admission to PLUS. If an active trading market is not developed or maintained, the liquidity and trading price of the Ordinary Shares could be adversely affected. It is emphasised that no application is being made for admission of these securities to the Official List or to trading on AIM. Any individual wishing to buy or sell securities which are traded on PLUS must trade through a stockbroker (being a member of PLUS and regulated by the FSA) as the market s facilities are not available directly to the public. Application will be made for the entire issued share capital of the Company to be introduced to trading on PLUS. It is expected the Admission will take place on 4 July The whole of this Document should be read and in particular your attention is drawn to Part II of this Document which sets out certain risk factors. All statements regarding the Company s business, financial position and prospects should be viewed in light of such risk factors. The Company is a newly formed company which has no existing business record. ARMSCOTE INVESTMENT COMPANY PLC (Incorporated in England and Wales under the Companies Act 2006 with registered number ) Admission to PLUS PLUS Corporate Adviser and Broker Zeus Capital Limited SHARE CAPITAL ON ADMISSION Issued Ordinary Shares Amount Number 65,000 65,000,000 Zeus Capital Limited, which is authorised and regulated by the FSA and is a member of PLUS, is the Company s Corporate Adviser for the purposes of the Admission. Zeus Capital Limited has not made its own enquiries except as to matters which have come to its attention and on which it considered it necessary to satisfy itself and accepts no liability whatsoever for the accuracy of any information or opinions contained in this Document, or for the omission of any material information, for which the Directors are solely responsible. The advisers named on page 4 are acting for the Company and for no one else in relation to the arrangements proposed in this Document and will not be responsible to anyone other than the Company for providing the protections afforded to clients of such advisers or for providing advice in relation to the Admission. An investment in Armscote Investment Company plc involves a high degree of risk and prospective investors should consider carefully whether an investment in the Company is suitable for them in the light of their personal circumstances, the financial resources available to them and after receiving appropriate professional advice. This document is not for distribution outside the United Kingdom and, in particular, it should not be distributed to persons with addresses in Canada, Australia, Japan, South Africa or the Republic of Ireland or to persons with addresses in the United States of America, its territories or possessions or to any citizen thereof or to any corporation, partnership or other entity created or organised under the laws thereof. Any such distribution could result in the violation of Canadian, Australian, Japanese, South African, Irish or relevant United States of America law.

2 TABLE OF CONTENTS Page Forward-Looking Statements 2 Expected Timetable and Admission Statistics 2 Directors, Secretary and Advisers 3 Definitions 4 Summary of Key Information 6 Part I: Information on the Company 7 Part II: Risk Factors 12 Part III: Accountants Report on the Company 14 Part IV: Unaudited proforma statement of net assets 17 Part V: Statutory and General Information 18 1

3 FORWARD-LOOKING STATEMENTS This Document contains forward-looking statements. These statements relate to the Company s future prospects, developments and business strategies. Forward-looking statements are identified by their use of terms and phrases such as believe, could, envisage, estimate, intend, may, plan, will or the negative of those, variations or comparable expressions, including references to assumptions. These statements are primarily contained in Parts I and II of this document. The forward-looking statements in this Document are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. Certain risks to and uncertainties for the Company are specifically described in Part II of this document headed Risk Factors. If one or more of these risk factors or uncertainties materialises, or if the underlying assumptions prove incorrect, the Company s actual results may vary materially from those expected, estimated or projected. Given these risks and uncertainties, potential investors should not place any reliance on forward-looking statements. These forward-looking statements speak only as at the date of this document. Neither the Directors nor the Company undertake any obligation to update forward-looking statements or risk factors other than as required by PLUS Rules or by the rules of any other securities regulatory authority, whether as a result of new information, future events or otherwise. EXPECTED TIMETABLE AND ADMISSION STATISTICS PLUS Admission Document publication date 4 July 2011 Admission and commencement of dealings on PLUS 8.00 a.m. on 4 July 2011 Total number of Ordinary Shares in issue immediately following Admission ISIN PLUS symbol 65,000,000 GB00B4XHPK05 AI.P 2

4 DIRECTORS, SECRETARY AND ADVISERS Directors Company Secretary Registered Office Adam Reynolds (Chief Executive Officer) Paul Foulger (Finance Director) Paul Foulger 14 Kinnerton Place South London SW1X 8EH Telephone Number PLUS Corporate Adviser and Broker Reporting Accountants and Auditors Solicitors to the Company Registrars Zeus Capital Limited 3 Ralli Courts West Riverside Manchester M3 5FT Jeffreys Henry LLP 5 7 Cranwood Street London EC1V 9EE BPE Solicitors LLP St James House St James Square Cheltenham GL50 3PR SLC Registrars Limited Thames House Portsmouth Road Esher Surrey KT10 9AD 3

5 DEFINITIONS The following terms apply in this Document unless the context requires otherwise: Act the Companies Act 2006 Admission AIM Articles Board or Directors Company or Armscote Corporate Governance Code CREST admission of the Ordinary Shares to trading on PLUS the market of that name operated by London Stock Exchange plc the articles of association of the Company the board of directors of the Company Armscote Investment Company plc, a company incorporated in England and Wales with company number The UK Corporate Governance Code published in May 2010 by the Financial Reporting Council the relevant system (as defined in the CREST Regulations) in accordance with which securities may be held or transferred in uncertificated form, and in respect of which Euroclear is the Operator (as defined in the CREST Regulations) CREST Regulations the Uncertificated Securities Regulations 2001 (SI 2001/3755), as amended, and any applicable rules made under those regulations Document Euroclear UK & Ireland Existing Share Capital FSA FSMA Hub Capital London Stock Exchange Ordinary Shares Panel Placing this document Euroclear UK & Ireland Limited the operator of Crest the existing Ordinary Shares as at the date of this document the Financial Services Authority the Financial Services and Markets Act 2000 (as amended) Hub Capital Partners Limited, a company incorporated in England and Wales with company number London Stock Exchange plc ordinary shares of 0.1p each in the capital of the Company the Panel on Takeovers and Mergers the placing of the Placing Shares as described in this Document 4

6 "Placing Price" "Placing Shares" PLUS PLUS Rules Shareholders Takeover Code UK Listing Authority Zeus Capital 1p per Ordinary Share 60,000,000 new Ordinary Shares issued pursuant to the Placing at the Placing Price the PLUS quoted market operated by PLUS Stock Exchange plc which allows trading of shares in unlisted companies the PLUS Rules for issuers published by PLUS Stock Exchange plc containing application requirements for admission to PLUS; requirements as to the continuing obligations of PLUS quoted issuers once admitted; and guidance notes holders of Ordinary Shares from time to time the Takeover Code published by the Panel the Financial Services Authority acting in its capacity as a competent authority for the purposes of Part VI of FSMA Zeus Capital Limited, a company incorporated in England and Wales with company number , authorised and regulated by the FSA In this Document use of the singular includes the plural and vice versa, unless the context otherwise requires. 5

7 SUMMARY OF KEY INFORMATION The following information has been derived from, and should be read in conjunction with, the full text of this Document. Investors should read the whole Document and not just rely on the key information set out below: Armscote is a newly incorporated company established by the Directors as a PLUS investment vehicle. The Directors believe there are currently a number of potentially attractive opportunities to acquire interests in small and medium sized private companies in the UK with strong management and significant growth opportunities. The Directors will use their contact base and experience, together with that of its Corporate Adviser, Zeus Capital, to source and target suitable opportunities. The Directors intend to focus on the UK service sector. The Directors are committed to seeking prior Shareholder approval for any substantive acquisition. The Directors would propose to raise additional funding by means of a placing of Ordinary Shares either prior to or at the time of any substantive acquisition or investment. Armscote has an experienced management team. The Directors believe that their collective experience in the area of mergers and acquisitions, accounting, corporate and financial management in relation to small and medium sized businesses will assist them in the identification and evaluation of acquisition opportunities. The Directors investment criteria are as follows: to acquire a controlling interest in a small to medium sized private company in the UK with strong management and significant growth opportunities; the product and/or service provided by the target companies should have growth potential; the management should have a proven track record; and the target companies should be or have the potential to be profitable and/or have significant asset values and the owners of the business should accept a significant part of the consideration for any acquisition in new Ordinary Shares or other securities issued by the Company. 6

8 1. INTRODUCTION PART I INFORMATION ON THE COMPANY ARMSCOTE INVESTMENT COMPANY PLC Armscote is a newly incorporated company established by the Directors as a PLUS investment vehicle. The Directors believe that there are a number of potentially attractive investment opportunities within small and medium size enterprises in the UK with strong management and significant growth opportunities and have decided to seek a PLUS trading facility for a new investment company that will look to make a reverse acquisition in due course focusing on this area. Part I of this Document describes the Company s intended strategy and its management. 2. INVESTMENT STRATEGY The Directors intend to acquire an established unquoted business that they consider to have strong management and significant growth opportunities focused on the service sector in the UK. The Directors will also seek to target businesses that would benefit from having access to the capital markets. The Directors intend to review acquisition opportunities as they arise with their advisers. The Directors are committed to seeking prior Shareholder approval for any substantive acquisition once the terms have been negotiated and finalised. The Directors propose to raise additional funding and broaden the Shareholder base either prior to or at the same time as the Company carries out any substantive acquisition or investment. All expenditure by the Company shall be kept to a minimum until an acquisition is made. At that time the remuneration of the Directors shall be reviewed and suitable remuneration arrangements shall be agreed with the Directors and any new persons appointed to the Board. The Directors will use their experience to identify appropriate targets, carry out due diligence and negotiate acquisitions and investments. It is intended that the day-to-day management of companies that are acquired by the Company will remain in the hands of existing management where that is considered appropriate. 3. INVESTMENT CRITERIA The Directors investment criteria are: to acquire a controlling interest in a small to medium sized private company in the UK with strong management and significant growth opportunities; the product and/or service provided by the target companies should have growth potential; the target companies should be or have the potential to be profitable and/or have significant asset values; management should have a proven track record; and the owners of the business should accept a significant part of the consideration for any acquisition in Ordinary Shares or other securities issued by the Company. 7

9 The Board will keep Shareholders informed of the Company s developments and are committed to seeking prior Shareholder approval for any substantive acquisition once the terms have been negotiated and finalised. The Directors intend, upon the Company making a successful acquisition, to re-consider the constitution of the Board and to make any necessary changes in order to meet the needs of the Company going forward. If the Company has not made a material investment within one year following Admission it will seek Shareholders approval for the further pursuit of the investment strategy. If the Company fails to complete any acquisition as outlined above within 24 months from the date of the start of trading on PLUS a resolution will be proposed for a members voluntary liquidation of the Company (pursuant to Part IV of the Insolvency Act 1986) and the return of funds (after payment of the expenses and liabilities of the Company) to the Shareholders pro rata to their respective shareholdings. 4. REASON FOR THE INTRODUCTION TO PLUS Following Admission, the cash held by the Company will be used, in part, as working capital for the operating costs of the Company in order to seek out and research potential acquisitions and investments. Operating costs will be maintained at the minimum level consistent with the Company s status as a publicly quoted company. The Company will not acquire premises of its own or engage any full-time employees before making a significant investment or acquisition. The Directors will seek to conserve the Company s resources. The Directors believe that the benefits of the PLUS trading facility include: the ability to enter into negotiations with vendors of businesses or companies, to whom the issue of publicly traded shares as consideration is potentially more attractive than the issue of shares in an equivalent private company for which no trading facility exists; the ability to raise further funds in the future, either to enable a proposed acquisition to be completed and/or to raise additional working or development capital for the Company once the acquisition has been completed; and the ability to attract high quality Directors and employees by offering share options. The Directors consider that the ability to grant options over PLUS quoted shares is potentially more attractive to Directors and employees than the grant of options over unquoted shares. The Directors are of the opinion that the Company has sufficient funds necessary for the Company to carry out its business plan and identify and carry out due diligence on potential acquisition and investment targets and to provide working capital for the Company s initial operations in line with its corporate strategy as set out in this Document. 5. THE DIRECTORS Adam Reynolds (Chief Executive Officer, aged 48) Adam began his career as a stockbroker before moving into investor relations. In 2000 he established Hansard Group plc, a financial PR firm, listing it on AIM in November 2000, before jointly leading a management buy-out of the business in Adam is also the chairman of Porta Communications plc, a non-executive director of EKF Diagnostics plc and Orogen Gold plc and a director of Wilton International Marketing Limited. 8

10 Paul Foulger (Finance Director, aged 41) Paul is a qualified certified accountant with extensive public and private company experience having been finance director at First Africa Oil plc, Cielo Holdings plc and Elsevier Science. He jointly led a management buy-out of financial communications group Hansard in 2004 and is Finance Director of EKF Diagnostics Holdings plc and Porta Communications plc. Paul holds an MBA at Warwick Business School. The Directors have considerable experience of making investments and applying financial and management techniques to improve the performance of acquired companies. They will use this experience to identify appropriate targets, carry out due diligence and negotiate acquisitions, bringing in external consultants who are specialists in the relevant industrial and business sectors, where appropriate. 6. PLACING AND WARRANTS Prior to Admission the Company undertook and completed a placing of 60,000,000 new Ordinary Shares at 1p per share to raise 600,000, before costs. The Placing Shares rank equally with the Ordinary Shares and in full for any dividends and other distributions paid or made in respect of the Ordinary Shares after Admission. The Company has granted warrants over 2,500,000 Ordinary Shares to each of Zeus Capital and Hub Capital which are exercisable, in whole or in part, at the Placing Price. Adam Reynolds and Paul Foulger are both directors and shareholders in Hub Capital, and, are each respectively interested in 3,375 ordinary shares of 1p each in Hub Capital, representing per cent. of the ordinary shares of Hub Capital in issue. 7. EMPLOYEE SHARE OPTIONS In order to incentivise the management of the Company and the management of any other interest that the Company acquires, the Directors will, at an appropriate time, consider adopting a suitable share option scheme or schemes, although no such schemes are presently in place. 8. CORPORATE GOVERNANCE AND INTERNAL CONTROLS The Directors recognise the importance of sound corporate governance, whilst taking into account the size and nature of the Company. As the Company grows, the Directors intend that the Company should develop policies and procedures, which reflect the principles set out in the Corporate Governance Code to the extent that they are appropriate to the size of the Company. The Directors (including members of their family and connected persons) will comply with Paragraphs 46 and 72 and Appendix 3 of the PLUS Rules relating to Directors Dealings and will take all reasonable steps to ensure compliance by the Company s applicable employees as well. The Company has adopted, and will operate where applicable, a share dealing code for directors and senior executives under the same terms as the Model Code on directors dealings in securities, published from time to time by the UK Listing Authority. At present, due to the Company s size, the risk and audit management will be addressed by the Board. As the Company grows, the Board will consider establishing an audit and risk management committee. 9

11 9. DIVIDEND POLICY The Company has not yet commenced trading and the Directors believe that it is inappropriate to give an indication of the likely time of payment or level of future dividends. 10. TAXATION Information regarding taxation in relation to the Admission to PLUS is set out in paragraph 13 of Part V of this Document. If you are in any doubt as to your tax position you should consult your own professional adviser immediately. 11. ADMISSION TO PLUS The share capital of the Company is not presently listed or dealt in on any stock exchange. An application will be made for the Company's issued Ordinary Shares to be admitted to trading on PLUS. Dealings in the Ordinary Shares are expected to commence on or around 4 July 2011 or such later date as the Company and Zeus Capital shall agree but no later than 1 August It is emphasised that no application is being made for the admission of these securities to trading on AIM, or the Official List of the UK Listing Authority. The Company has entered into appropriate arrangements with one or more Primary Information Providers approved by the FSA to disseminate regulatory information to the market. This information is currently distributed by Bloomberg, Thomson Financial, Reuters, Telekurs, ADVFN and FT Interactive Data Europe. It is also available to private investors through the Internet at and via other licensed Internet vendors. Any individual wishing to buy or sell PLUS-quoted shares, must trade through a stockbroker regulated by the FSA (and who is a member of PLUS), as the market cannot deal directly with the public. 12. LOCK-IN ARRANGEMENTS On Admission, the Directors will be interested in 13,500,000 Ordinary Shares representing approximately per cent. of the Existing Share Capital. The Directors, have undertaken to the Company and to Zeus Capital that, in accordance with paragraph four of the PLUS Rules they and their connected persons will not during a period of twelve months from the date of the Admission, dispose of any interest in Ordinary Shares held by them, and for a further 12 months thereafter only with the consent of Zeus Capital. 13. FINANCIAL INFORMATION An Accountants Report on the Company, which has no trade or business, is set out in Part III of this Document. The information provided comprises a short form report prepared by Jeffreys Henry LLP, based on the unaudited management accounts of the Company for the period from its incorporation on 2 February 2011 to 31 March An unaudited pro forma statement of net assets is included in Part IV for illustrative purposes only to show the effect of the issuance of shares as detailed in Part V Paragraph 2.4. The Company s accounting reference date is 31 December. 14. CREST The Company s Articles permit the Company to issue shares in uncertificated form in accordance with the Uncertificated Securities Regulations Application has been made for the Ordinary Shares to be admitted to CREST upon the start of trading on PLUS. 10

12 15. RISK FACTORS Your attention is drawn to the risk factors set out in Part II of this Document. Potential investors should carefully consider the risks described in Part II before making a decision to invest in the Company. 11

13 PART II RISK FACTORS The attention of prospective investors is drawn to the fact that ownership of shares in the Company will involve a variety of risks which, if any of them occur, may have a materially adverse effect on the Company's business or financial condition, results or future operations. In such case, the market price of the Ordinary Shares could decline and an investor might lose all or part of his or her investment. Investors should also be aware of the risks associated with an investment in a business which is in the early stages of development. In addition to the information set out in this Document, the following risk factors should be considered carefully in evaluating whether to make an investment in the Company. The following factors do not purport to be an exhaustive list or explanation of all the risk factors involved in investing in the Company and they are not set out in any order of priority. In particular, the Company's performance might be affected by changes in market and/or economic conditions and in legal, regulatory and tax requirements. Additionally, there may be other additional risks of which the Directors are not aware or believe to be immaterial which may, in the future, adversely affect the Company s business and the market price of the Ordinary Shares. (i) (ii) (iii) (iv) (v) (vi) The Company s success will depend on the retention of the Directors and any future management team, and on its ability to continue to attract and retain highly skilled and qualified personnel. There can be no assurance that the Company will retain the services of any of the Directors, or attract or retain any senior managers or skilled employees; The value of an investment in the Company is largely dependent upon the expertise of the Directors and their ability to identify and acquire or invest in suitable companies or businesses. There can be no certainty that the Company will be able to identify suitable acquisition targets or complete the purchase of any identified targets at a price the Directors consider acceptable. In the event of an aborted acquisition it is likely that resources may have been expended on investigative work and due diligence, which cannot be recovered. The acquisition of other businesses can involve significant commercial and financial risks and there can be no certainty that any acquired business will not have a material adverse effect on the operations, results or financial position of the Company; The Ordinary Shares are not listed or traded on any stock exchange. Notwithstanding the fact that an application will be made for the Ordinary Shares to be quoted through PLUS this should not be taken as implying that there will be a liquid market in the Ordinary Shares. An investment in the Ordinary Shares may thus be difficult to realise. The value of the Ordinary Shares may go down as well as up. Investors may therefore realise less than their original investment, or sustain a total loss of their investment; Continued membership of PLUS is entirely at the discretion of PLUS Stock Exchange plc; PLUS is not AIM or the Official List. Consequently, it may be more difficult for an investor to sell his or her Ordinary Shares and he or she may receive less than the amount paid. The market price of the Ordinary Shares may not reflect the underlying value of the Company s net assets or operations; The share prices of public companies are often subject to significant fluctuations. In particular, the market for shares in smaller public companies is less liquid than for larger public companies. Consequently, the Company s share price may be subject to greater fluctuation and the Ordinary Shares may be difficult to sell; 12

14 (vii) (viii) (ix) It is likely that the Company will need to raise further funds in the future, either to fund preliminary investigation and due diligence, to complete a proposed acquisition or to raise further working or development capital for such an acquisition. There is no guarantee that the then prevailing market conditions will allow for such a fundraising or that new investors will be prepared to subscribe for Ordinary Shares at the same price as the price paid by an investor, or higher. Shareholders may be materially diluted by any further issue of Ordinary Shares by the Company; The Company s Ordinary Shares are intended for capital growth and therefore may not be suitable as a short-term investment. Investors may therefore not realise their original investment at all, or within the time-frame they had originally anticipated; Any changes to the regulatory environment, in particular the PLUS Rules for Issuers regarding companies such as Armscote could, for example, affect the ability of the Company to maintain a trading facility on PLUS; (x) If the Company has not undertaken an acquisition or a significant investment within 24 months of the start of trading on PLUS, a resolution will be proposed for a members voluntary liquidation of the Company and although funds will be returned to the Shareholders pro rata to their respective shareholdings this will be after payment of the expenses and liabilities of the Company; and (xi) It is the Company s intention to issue Ordinary Shares to satisfy all or part of any consideration payable on an acquisition, but vendors of suitable companies or businesses may not be prepared to accept shares traded on PLUS or may not be prepared to accept Ordinary Shares at the quoted market price. The investment opportunity offered in this Document may not be suitable for all recipients of this Document. Investors are therefore strongly recommended to consult an adviser authorised under the Financial Services and Markets Act 2000, who specialises in investments of this nature before making their decision to invest. Investors should consider carefully whether an investment in the Company is suitable in the light of their personal circumstances and the financial resources available to them. 13

15 PART III FINANCIAL INFORMATION ON THE COMPANY ACCOUNTANTS REPORT ON THE COMPANY 4 July 2011 The Directors Armscote Investment Company Plc 14 Kinnerton Place South London SW1X 8EX and The Directors Zeus Capital Limited 3 Ralli Courts West Riverside Manchester M3 5FT Dear Sirs, Armscote Investment Company Plc (the Company ) Introduction We report in connection with the admission ( Admission ) of the Company to PLUS referred to in the document ( Admission Document ) dated 4 July We report on the financial information set out below relating to Armscote Investment Company Plc. The financial information has been prepared for inclusion in the Admission Document dated 4 July The Company was incorporated as BCOMP 422 Limited on 2 February 2011, with the registered number The Company changed its name to Armscote Investment Company Limited on 10 February 2001 and re-registered as a public limited company on 1 July The Company has not traded, paid dividends or made any other distribution since incorporation. The total issued share capital of the Company on incorporation was 1 comprising 1 ordinary shares of 1 each. On 21 March 2011 the share capital was sub-divided into 1,000 ordinary shares of 0.1p each. Basis of preparation The financial information set out in Sections 1 to 3 is based on audited dormant financial statements of the Company for the period ended 31 March 2011 ("the Relevant Period") on the basis described in Note 3, to which no adjustments were considered necessary. A non-statutory audit was prepared for the Company for the period from 2 February 2011 to 31 March Audited financial statements have not been prepared in respect of any period subsequent to this. 14

16 The financial statements for the Relevant Period did not include statements of cash flows in accordance with Financial Reporting Standard No. 1 as the Company was exempt from the requirement to do so. The Statements of Cash Flows included in this report have therefore been specifically prepared for inclusion in this report. Responsibility Such financial statements are the responsibility of the Directors of the Company. The Directors of the Company are responsible for the contents of the Admission Document dated 4 July 2011 in which this report is included. It is our responsibility as reporting accountants to compile the financial information set out in our report from the financial statements, to form an opinion as to whether the financial information gives a true and fair view, for the purposes of the Admission Document, and to report our opinion to you. Basis of Opinion We conducted our work in accordance with the Statement of Investment Circular Reporting Standards issued by the Auditing Practices Board. Our work included an assessment of evidence relevant to the amounts and disclosures in the financial information. The evidence included that previously recorded by us relating to the audit of the financial information. It also included an assessment of the significant estimates and judgments made by those responsible for the preparation of the financial statements underlying the financial information and whether the accounting policies are appropriate to the Company's circumstances and have been consistently applied and adequately disclosed. We planned and performed our examination 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 information contained in our report is free from material misstatement, whether caused by fraud, other irregularity or error. Opinion In our opinion the financial information gives, for the purposes of the Admission Document, a true and fair view of the results of the Company for the period ended 31 March 2011 and of the state of affairs of the Company at the end of the period. BALANCE SHEET Current assets Notes As at 31 March 2011 Unpaid share capital 5,000 Capital and reserves Called up share capital 2 5,000 Notes to the financial statements 1. Accounting policies The principal accounting policies which have been consistently applied in the Company s financial information throughout the period under review, are as follows: 15

17 Basis of accounting The financial information has been prepared under the historical cost convention and in accordance with accounting standards in the United Kingdom. 2. Share capital As at 31 March ,000,000 ordinary shares of 0.1p each 5,000 The total issued share capital of the Company on incorporation was 1 comprising 1 ordinary shares of 1 each. On 21 March 2011 the share capital was sub-divided into 1,000 ordinary shares of 0.1p each. The Company allotted 4,999,000 ordinary shares of 0.1p each on 28 March 2011 for a consideration of 0.1p per share. Subsequent to the period end on 31 March 2011 the Company issued 60,000,000 Ordinary Shares at 1p per Ordinary Share credited as fully paid. The Company has granted warrants over 5,000,000 Ordinary Shares at 1p per Ordinary Share exercisable at any time in the ten year period following Admission. 3. Nature of financial information The financial information presented above in respect of the period ended 31 March 2011 does not constitute statutory accounts for that period. 4. Auditors The auditors during this period were Jeffreys Henry LLP whose address is Finsgate, 5-7 Cranwood Street, London, EC1V 9EE. Yours faithfully Jeffreys Henry LLP Chartered Accountants 16

18 PART IV UNAUDITED PRO FORMA STATEMENT OF NET ASSETS Set out below is an unaudited pro forma statement of net assets based on the net assets of Armscote Investment Company Plc. This unaudited pro forma statement of net assets is provided for illustrative purposes only to show the effect of the issuance of shares, details of which are set out in Part V Paragraph 2.4, and the payment of the subscriber shares as if they had both occurred on 31 March Because of the nature of pro forma information, this information addresses a hypothetical situation and does not therefore represent the actual financial position or results of the Company. Unaudited pro forma statement of net assets as at 31 March 2011 As at 31 March 2011 Note (1) Adjustment Notes (2 & 3) Pro forma net assets of the Company s s s Current assets Unpaid share capital 5,000 (5,000) - Cash at bank - 605, ,000 Net assets 5, , ,000 Notes: 1. The financial information in respect of the Company as at 31 March 2011 has been extracted, without adjustment, from the audited annual financial statements as at 31 March 2011, as set out in Part III of this document. 2. The pro forma net asset statement has been prepared on the basis that the issue of 60,000,000 Ordinary Shares at 1p per Ordinary Share, as set out in Part V Paragraph 2.4, took place on 31 March The pro forma net asset statement has been prepared on the basis that the receipt of monies in respect of the subscriber share capital, as set out in Part V Paragraphs 2.2 and 2.3, took place on 31 March The pro forma financial information does not constitute statutory accounts within the meaning of section 485 of CA Apart from the above, no other adjustments have been made to reflect any changes in working capital or other movements since 31 March 2011 for the Company. 17

19 PART V STATUTORY AND GENERAL INFORMATION Responsibility The Directors of the Company (whose names appear on page 3 of this Document) accept responsibility, both individually and collectively, for the information contained in this Document, and for compliance with the PLUS Rules for Issuers. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Document is in accordance with the facts and there are no other facts which, if omitted, would affect the import of such information. All Directors accept responsibility accordingly. 1. The Company 1.1 The Company was incorporated and registered in England and Wales on 2nd February 2011 under the Act as BCOMP 422 Limited, a private company limited by shares and with registered number On 10 February 2011, the Company changed its name to Armscote Investment Company Limited. On 1 July 2011 the Company was re-registered as a public limited company and changed its name to Armscote Investment Company plc. 1.2 The principal legislation under which the Company operates is the Act and the regulations made thereunder. The liability of the members of the Company is limited. 1.3 The Company is domiciled in the United Kingdom and its registered office and principal place of business is at 14 Kinnerton Place South, London SW1X 8EH. The telephone number at the Company s principal place of business is The principal activity of the Company is that of an investment company. 1.5 The Company has no subsidiaries and there are no undertakings in which the Company holds a proportion of the capital likely to have a significant effect on the assessment of its own assets and liabilities, financial position or profit and losses. 1.6 Since incorporation the Company has not acquired or disposed of any companies or businesses and there are no companies in which the Company has an interest. 2. Share Capital 2.1 Upon incorporation the issued share capital of the Company was 1 divided into 1 ordinary share of On 21 March 2011, each of the ordinary shares of 1 each was subdivided into 1,000 ordinary shares of 0.1p each. 2.3 On 28 March 2011, each of Hub Capital and Zeus Capital subscribed for 2,500,000 Ordinary Shares of 0.1p each at 0.1p per Ordinary Share credited as fully paid. 2.4 On 30 June 2011, the Company issued 60,000,000 Ordinary Shares at 1p per Ordinary Share credited as fully paid. 2.5 The Company has granted warrants over 5,000,000 Ordinary Shares (none of which have lapsed) further details of which are set out in paragraph 3 of this Part V. 2.6 Save for the warrants referred to in paragraph 2.5 of this Part V, the Company does not 18

20 have in issue any securities not representing share capital and there are no outstanding convertible securities, exchangeable securities or securities with warrants issued or proposed to be issued by the Company. 2.7 By written resolution of the Shareholders of the Company passed on 7 June 2011 resolutions of the Company were passed that the Directors be given power in accordance with section 570 of the Act (until the next annual general meeting of the company) to allot equity securities (as defined in section 560 of the Act) for cash pursuant to such authority as if section 561 of the Act did not apply to any such allotment save that the power will be limited to: (a) the allotment of equity securities pursuant to a rights issue or similar offer to shareholders of the Company where the interests of all shareholders of the Company were proportionate or as nearly proportionate as practical to the numbers of Ordinary Shares held by them subject only to such exclusions or other arrangements as the directors may consider appropriate to deal with fractional elements or legal or practical difficulties; and (b) the allotment (otherwise than pursuant to paragraph 2.7 (a) above) for cash of equity securities up to an aggregate nominal amount of 65, The provisions of section 570 of the Act, which confer on Shareholders rights of preemption in respect of the allotment of equity securities which are, or are to be, paid up in cash (other than by way of allotment to employees under an employees share scheme), will apply to the extent not disapplied as described in paragraph 2.7 above. 2.9 The movements in the Company s ordinary share capital since incorporation have been:- Ordinary shares of 1 each in issue at incorporation 1 Ordinary Shares resulting from the share capital reorganisation 1,000 Ordinary Shares issued to Zeus Capital and Hub Capital 5,000,000 Placing Shares Issued 60,000,000 Ordinary Shares in issue at the date of this Document 65,000,000 Par value of Ordinary Shares 0.1p Total issued ordinary share capital 65, The Company s issued Ordinary Share capital as at the date of this document and immediately following Admission, is: Number of Ordinary Shares Amount ( ) 65,000,000 65,000 19

21 3. Warrants As at the date of this Document the Company has issued the following warrants: Interested Party Ordinary Shares Price per share Date of Grant Exercise Period under warrant (p) Zeus Capital 2,500, June June 2021 Hub Capital 2,500, June June Articles of Association 4.1 Articles of Association The Articles were adopted pursuant to a special resolution of the Company passed on 7 June They contain provisions, inter alia, to the following effect: Share Rights The Ordinary Shares rank pari passu in all respects. Voting Rights Subject to any rights or restrictions as to any shares, on a show of hands every member who (being an individual) is present in person (or by proxy) or (being a corporation) is present by its duly authorised representative shall have one vote and on a poll every member present in person or by proxy shall have one vote for every share in the capital of the Company held by him. A proxy need not be a member of the Company. Variation of Rights If at any time the capital of the Company is divided into different classes of shares, all or any of the special rights attached to any class of shares in the Company may be altered or abrogated with the consent in writing of the holders of three-fourths in nominal value of the issued shares of that class or with the sanction of an extraordinary resolution passed at a separate general meeting of the holders of the shares of that class. At every such separate general meeting, the quorum shall be not less than two persons holding or representing by proxy no less than one-third in nominal value of the issued shares of that class, unless there is from time to time only one person. Alteration of Capital The Company may by ordinary resolution increase its share capital, consolidate and divide all or any of its share capital into shares of a larger amount, sub-divide all or any of its shares into shares of a smaller amount and cancel any shares not taken, or agreed to be taken, by any person. The Company may, subject to the Act, by special resolution reduce or cancel its share capital or any capital redemption reserve or share premium account in any way. Subject to and in accordance with the provisions of the Act and to any rights for the time being attached to any share, the Company may purchase its own shares of any class (including any redeemable shares). 20

22 Transfer of shares A member of the Company may transfer all or any of his shares (1) in the case of certificated shares by instrument in writing in any usual or common form or in such other form as the Directors may approve; and (2) in the case of uncertificated shares, in accordance with the terms of the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) (as amended) and the facilities and requirements of the relevant system concerned. The instrument of transfer of a share in certificated form shall be executed by or on behalf of the transferor and, if the share is not fully paid, by or on behalf of the transferee. The Directors may in their absolute discretion refuse to register the transfer of any share which is not fully paid or on which the Company has a lien, provided that dealings in the shares are not prevented from taking place on an open and proper basis. The Directors may also refuse to register the transfer of a share which is in favour of more than four transferees, or which is in respect of more than one class of share or which has not been presented for registration duly stamped accompanied by the share certificates for the shares to which the transfer relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer. If the Directors refuse to register a transfer, they shall within two months of the date on which the instrument of transfer was lodged with the Company (or in the case of uncertificated shares the operator-instruction was received by the Company), send to the transferee notice of the refusal. The registration of transfers of shares or of any class of shares may be suspended (in accordance with the Act) at such times and for such periods as the Directors may determine provided that it shall not be closed for more than thirty days in any year and so that such a suspension shall only apply to uncertificated shares with the prior consent of the operator. No fee shall be payable to the Company for the registration of any transfer or any other document relating to or affecting the title to any share or for otherwise making an entry in the register of members relating to any share. Dividends The Company may (subject to the provision of the Act) by ordinary resolution in general meeting declare dividends to be paid to members in accordance with their respective rights and their respective interests in the profits available for distribution. No dividend shall exceed the amount recommended by the Directors. Except as otherwise provided by the rights attached to or the terms of issue of shares, all dividends shall be declared on the Ordinary Share capital according to the amounts paid or credited as paid on such shares during any portion or portions of the period in respect of which the dividend is paid. No amount paid or credited as paid in advance of calls shall be regarded as paid on shares for this purpose. The Company may by ordinary resolution, upon the recommendation of the Directors, direct payment or satisfaction of such dividend wholly or partly out of specific assets and, in particular, of fully paid up shares or debentures of any other company. Any difficulty with such a distribution may be settled by the Directors as they think expedient and in particular they may issue fractional certificates or authorise any person to sell or transfer any fractions, or they may ignore the fractions all together. The Directors may from time to time pay such interim dividends as appear to the Directors 21

23 to be justified by the distributable profits of the Company and the position of the Company, subject to the provisions of the Act. If the share capital is divided into different classes, the Directors may pay interim dividends on shares which confer deferred or nonpreferred rights with regard to dividends as well as on shares which confer preferential rights with regard to a dividend. No interim dividend shall be paid on shares carrying deferred or non-preferred rights if, at the time of payment, any preferential dividend is in arrears. The Directors may also pay a dividend payable at a fixed rate at such intervals settled by them if it appears to them that the profits available justify the payment. The Directors shall not incur any liability to the holders of shares conferring any preferential rights for any loss that they may suffer by reason of the payment of an interim dividend on any shares having deferred on non-preferential rights provided that they act in good faith. The Company may deduct from any dividend payable all sums of money (if any) due to the Company by the member on account of calls or otherwise and use such monies to satisfy such amount payable. All dividends unclaimed for a period of 12 years after having been declared shall if the Directors so resolve be forfeited and shall revert to the Company and the Company shall not be constituted a trustee thereof. All dividends unclaimed for a period of 12 months shall be invested or otherwise made use of by the Directors for the benefit of the Company until claimed. There is no fixed date on which an entitlement to dividend arises. The Board may, if authorised by an ordinary resolution of the Company and subject to such terms and conditions as the Board may determine, offer any holders of Ordinary Shares the right to elect to receive additional Ordinary Shares, credited as fully paid, in lieu of cash in respect of any dividend or any part of any dividend specified by the ordinary resolution. Suspension of rights If a member or any other person appearing to be interested in shares held by such shareholder has been duly served with notice under Section 793 of the Act and is in default in supplying to the Company within 28 days (or such other period as may be specified in such notice) the information thereby required, then (unless the directors otherwise determine) such member shall not be entitled to vote or to exercise any right conferred by membership in relation to meetings of the Company in respect of the shares which are the subject of such notice. Where the holding represents more than 0.25 per cent. of the issued shares of that class, the payment of dividends may be withheld, and such member shall not be entitled to transfer such shares otherwise than by an arm s length sale. Return of capital Subject to any preferred, deferred or other special rights, or subject to such conditions or restrictions to which any shares in the capital of the Company may be issued, on a winding-up or other return of capital, the holders of ordinary shares are entitled to share in any surplus assets pro rata to the amount paid up on their ordinary shares. 22