Annual Financial Report

Annual Financial Report

Hargreave Hale AIM 1

Hargreave Hale AIM VCT 1 plc announced its results for the year ended 30 September 2012 on 19 December 2012. The full Financial Statements can be accessed on the Company's website http://www.hargreave-hale.co.uk/fund-management/venture-capital-trusts/hargreave-hale-aim-vct-1/factsheets-and-reports/ or alternatively by following the link at the bottom of this report.

FINANCIAL HIGHLIGHTS

Ordinary Shares (as at 30 September):	Â	2012	Â	2011
					Â
Net asset value per share		61.35p		61.14p
Cumulative distributions paid per share since launch		26.5p		23.0p
Total return		87.85p		84.14p
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Discount to Net Asset Value (based on bid-market price at balance sheet date)		7.1%		13.3%
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Annual Returns per share:
Revenue return		(0.30)p		(0.25)p
Capital return		3.94p		2.31p
Combined Return		3.64p		2.06p
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Dividends per share:
Interim paid		1.5p		2.0p
Final proposed		1.75p		2.0p
Total dividend for year		3.25p		4.0p
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Performance Benchmark:
Total Return		92.5%		88.6%
FTSE AIM All-share Index		73.2%		72.7%
(results rebased to 100 at 29 October 2004)

CHAIRMAN’S STATEMENT

Introduction

At 30 September 2012 the NAV was 61.35 pence which after adding back the dividends paid gives a total return since inception of 87.85 pence. The gain per ordinary share for the year was 3.64 pence per share (comprising revenue loss of 0.30 pence and capital gains of 3.94 pence).

Investments

The Investment Manager, Hargreave Hale Limited, invested a further £1.93 million in 9 qualifying companies during the year. The Fair Value of qualifying investments at 30 September 2012 was £12.65 million invested in 38 AIM companies and 4 unquoted companies. £2.83 million was held in a mix of cash, fixed income and other non-qualifying equities; more detail can be found in the Investment Manager’s Report on page 8.

Dividend

An interim dividend of 1.5 pence was paid on 4 July 2012 (Interim 2011 – 2 pence).

A final dividend of 1.75 pence is proposed (2011 – 2 pence) which, subject to shareholder approval at the AGM will be paid on 25 January 2013, to ordinary shareholders on the register on 4 January 2013.

The directors have maintained a dividend policy of at least 5% of the year end NAV. Subject to market conditions they expect that this will continue.

Buybacks

We were pleased that we were able to maintain our policy of offering our shareholders an efficient exit route through the buyback scheme. In total, 1,292,345 shares were purchased during the year at an average price of 56.4 pence per share. In addition to this 8,326,006 shares were repurchased through the Enhanced Share Buy Back.

Offer for Subscription of Ordinary Shares

On the 29 February 2012 the Directors of Hargreave Hale AIM VCT 1 plc and Hargreave Hale AIM VCT 2 plc announced the launch of a new offer for subscription of new shares in both VCT’s. The companies also launched Enhanced Share Buy Backs for existing shareholders who have held their shares for at least 5 years.

Both the offers for subscription and the Enhanced Share Buy Back were approved by shareholders of the Company at a General Meeting on 26 March 2012.

The Enhanced Share Buy Back for the 2011/12 tax year resulted in 8,326,006 Ordinary shares being purchased by the Company for cancellation and 8,068,056 new Ordinary shares being issued by the Company raising gross proceeds of £5.16 million under the terms of the Enhanced Share Buy Back. A maximum of 9,000,000 Ordinary Shares could be repurchased by the Company and so all applications have been accepted in full.

On the 5 April 2012 the Company announced that as the minimum subscription condition required for the C Share Offer to proceed had not been satisfied by 12pm on 5 April 2012 in accordance with the terms of the C Share Offer set out in the prospectus issued by the Company dated 29 February 2012 (the "Prospectus"), the C Share Offer would not proceed. All subscription monies received by the Company for C Shares were returned to investors in accordance with the terms of the Prospectus.

VCT Status

To maintain its VCT qualifying status we must invest at least 70% of the net funds raised in any one accounting period in qualifying investments within three years. At the yearend we have achieved 93.85% per cent. and have satisfied all the relevant tests.

Outlook

In spite of the dire financial position of many countries in the EU the stock market has been remarkably resilient over the last 12 months. The FTSE 100 rose by 11.96% however the AIM index only rose by 0.77% which may be an indication that in turbulent times investors flee to the perceived quality of larger companies.

The probability of one or more EU countries defaulting on its loans seems to be highly likely. The resulting fall-out from this is difficult to predict. Such upheaval will inevitably have an impact on our portfolio valuations but one would hope that it will be short lived. However the more financially secure countries appear to be committed to ensuring that any one country’s financial crash will be contained. This seems to be the main driver of confidence. Whether this confidence is misplaced will become apparent in due course.

It seems likely that the UK economy is set for a period of low or no growth for several years to come. This itself is not a reason for gloom, most companies in which your fund is invested have sound business models and good management which are not solely dependent on general economic growth for their prosperity.

Sir Aubrey Brocklebank

Chairman

Date: 19 December 2012

For further information, please contact:-

Stuart Brookes

Company Secretary

Hargreave Hale AIM VCT 1 Plc

01253 754740

Annual Report and Accounts - Year ended September 2012