Hargreave Hale AIM VCT 1 plc : Final Results

Preliminary Announcement of Final Results for the year ended 30 September 2017

FINANCIAL HIGHLIGHTS

Ordinary Shares (as at 30 September):	2017	2016
Net asset value per share	80.82p	75.93p
Cumulative distributions paid per share since launch	46.00p	42.00p
Total Return per share	126.82p	117.93p
Annual Returns per share (basic and diluted):
Revenue return	(0.13)p	(0.11)p
Capital return	8.99p	5.69p
Combined return	8.86p	5.58p
Dividends per share:
Interim paid	1.75p	1.75p
Final proposed/paid	2.25p	2.25p
Total dividend for year	4.00p	4.00p
Ongoing Expense Ratio*	1.86%	1.99%
Performance Benchmark:
FTSE AIM All-share Index (results rebased to 100 at 29 October 2004)	104.19	84.98

* Calculated as total expenses minus ad hoc legal costs and adjusted for trail commission written off, divided by year end net assets

CHAIRMAN'S STATEMENT

INTRODUCTION
Following the success of our joint offer for subscription I would like to welcome a large number of new shareholders.

At 30 September 2017, the Net Asset Value (NAV) was 80.82 pence which after adjusting for the dividends paid gives a Total Return since inception of 126.82 pence. The earnings per share gain for the year was 8.86 pence (comprising a revenue loss of 0.13 pence and capital gains of 8.99 pence). The NAV Total Return (NAV plus dividends paid) for the period was a gain of 11.7% compared to a gain of 24.4% in the FTSE AIM All-share Total Return Index. We are pleased with this performance given the constraints placed on managers of VCT funds and note that the AIM index is heavily influenced by a handful of companies.

INVESTMENTS
The investment manager, Hargreave Hale Limited, invested a further £8.29 million in 21 Qualifying Companies during the year. The fair value of Qualifying Investments at 30 September 2017 was £38.01 million invested in 64 AIM companies and 13 unquoted companies. £28.12 million was held in a mix of cash and non-qualifying equities; more detail can be found in the investment manager's report.

DIVIDEND
An interim dividend of 1.75 pence was paid on 30 June 2017 (Interim 2016: 1.75 pence).

A final dividend of 2.25 pence is proposed (2016: 2.25 pence) which, subject to shareholder approval at the Annual General Meeting, will be paid on 30 January 2018 to ordinary shareholders on the register on 29 December 2017.

The Directors continue to maintain their policy of targeting a tax free dividend yield equivalent to 5% of the year end NAV.

BUYBACKS
In total, 880,040 shares were purchased during the year at a weighted average price of 75.33 pence per share. A further 1,056,883 shares have been purchased since the year end at a weighted average price of 79.27 pence per share.

The Board continues to target a share price discount of 5% to the NAV per share (as measured against the mid-price) for market purchases. It should be emphasised that this target is non-binding and depends upon a range of factors, including the Company's liquidity, it's shareholder permissions and market conditions.

JOINT OFFER FOR SUBSCRIPTION - 2015
On 17 November 2016, the joint offer for subscription for new shares in Hargreave Hale AIM VCT 1 plc and Hargreave Hale AIM VCT 2 plc (launched in December 2015) was closed with £12.46 million raised for Hargreave Hale AIM VCT 1 plc.

JOINT OFFER FOR SUBSCRIPTION - 2016
The Directors of the Company announced on 14 December 2016 the launch of a new joint offer for subscription for shares in both Hargreave Hale AIM VCTs to raise up to £10 million in the Company and up to £10 million in Hargreave Hale AIM VCT 2 plc. The offer was approved by shareholders of the Company at a general meeting on 12 January 2017 and was open to both new and existing shareholders.

On 9 March 2017 Hargreave Hale AIM VCT 1 plc announced that it had received applications in excess of £10 million and, accordingly, the Directors of Hargreave Hale AIM VCT 1 plc announced that they intended to utilise the £5 million over-allotment facility.

On 15 March 2017, the Company announced that the offer was fully subscribed, resulting in gross funds being received of £15 million and the issue of 18.96 million new shares in the Company.

AUDIT TENDER
As announced in the annual report and accounts for the year ended 30 September 2016, BDO LLP is approaching the maximum 10-year term permitted under mandatory audit tendering legislation for public listed entities. The audit committee led a review process with invitations to tender extended to 10 accountancy practices with relevant knowledge and experience as auditors of Venture Capital Trusts and/or investments trusts. The Board noted personal recommendations, prior experience and industry reputation in identifying which 5 practices should be taken forward to the second round, which included a meeting with the Board. The audit committee defined and documented the objectives of the review, including the selection criteria and a scorecard to be used when assessing each application. Each of the five applicants made written and verbal representations to the Board, after which they were scored by each Director against the selection criteria. The review process found BDO LLP to be the strongest candidate and the Board moved to re-appoint them as statutory auditor for the Company.

VCT STATUS
To maintain its status as a Venture Capital Trust, the Company is required to invest at least 70% of the net funds raised in any one accounting period into Qualifying Companies by the start of the accounting period containing the third anniversary of the date on which the funds were raised, often referred to as the 'investment test'. I am pleased to report that we continue to perform well against this test and, at the year end, the investment test was 88.59% when measured using HMRC's methodology. The Company satisfied all other tests relevant to its status as a Venture Capital Trust.

REGULATORY UPDATE
Through the budget delivered on 22 November 2017, the government announced substantial changes to the legislation governing the management of Venture Capital Trusts. Broadly speaking, the proposed changes are designed to bring greater focus to the scheme and encourage more investment into small British companies. These changes will come into effect in stages over the period to 5 April 2019.

Some of these changes will have little or no impact on the management of your Company. The most significant of the proposed changes will be the increase in the investment test (as described above) with the minimum percentage of the Company that must be invested into Qualifying Companies increasing from 70% to 80% with effect from 1 October 2019. To assist with this change, the period of disregard for the disposal of Qualifying Investments will be increased from 6 months to 12 months with effect from 6 April 2019.

As described above, Venture Capital Trusts have between two and three years to invest new funds into Qualifying Companies before those new funds are included within the investment test. The draft legislation includes an additional condition to encourage early investment into Qualifying Companies. The new condition will apply to all new funds raised after 5 April 2018, with 30% of the new funds to be invested into Qualifying Companies within 12 months of the end of the accounting period in which the VCT issues the new shares.

The budget did not propose any changes to the tax reliefs available to new or existing shareholders, nor did it propose a change to the 5-year minimum holding period required by those claiming the 30% income tax relief. The first draft of the Finance Bill was published on 1 December 2017.

OUTLOOK
As I suggested last year, the devaluation of the pound has provided support to parts of the UK economy. However, the resulting increase in inflation has put the UK consumer under pressure and consumer confidence is brittle. We have seen evidence of this through reports of weak trading within the retail and casual dining sectors. Perhaps ironically, another casualty of the weakness in sterling has been the UK Government which, through the MOD, is a substantial buyer of USD denominated aircraft and other assets. The resulting squeeze on the defence budget has rippled through the sector and its supply chain.

It is difficult to look at the economic outlook without reference to Brexit. Whilst it is pleasing to see that future negotiations will now include our trade relationship with the European Union, it is a challenge to see how a 'Canada Plus Plus Plus' type arrangement (as recently described by David Davis) can be reached by March 2019. Clearly, there are many obstacles that are yet to be overcome and it is far from clear on what basis we will trade with the European Union or, for that matter, the rest of the world as we transition out of our current trade agreements. It seems the only thing we can be confident of is that the fog of uncertainty will not lift any time soon.

Your Company has a high level of liquid funds and is sufficiently advanced against the investment test to not feel under pressure to invest to achieve the 70% investment test. The portfolio is well diversified and comprises a good number of high quality companies that are well placed to prosper despite the current uncertainties.

SIR AUBREY BROCKLEBANK
Chairman
Date: 19 December 2017

STRATEGIC REPORT

The purpose of the strategic report is to inform shareholders on key matters and help them to assess how the directors have performed in their duty to promote the success of the Company. The report has been prepared by the Directors in accordance with the requirements of Section 414A of the Companies Act 2006. The Company's independent auditor is required by law to report on whether the information given within the strategic report is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.

THE COMPANY AND ITS BUSINESS MODEL
The Company was incorporated and registered in England and Wales on 16 August 2004 under the Companies Act 1985, registered number 5206425.

The Company has been approved as a Venture Capital Trust by HMRC under Section 259 of the Income Taxes Act 2007. The shares of the Company were first admitted to the Official List of the UK Listing Authority and trading on the London Stock Exchange on 29 October 2004 and can be found under the TIDM code "HHV". The Company is premium listed.

In common with many other VCTs, the Company revoked its status as an investment company as defined in Section 266 of the Companies Act 1985 on 23 May 2006 to facilitate the payment of dividends out of capital profits.

The Company's principal activity is to invest in a diversified portfolio of qualifying small UK based companies, primarily trading on AIM, with a view to maximising tax free dividend distributions to shareholders.

The Company is an externally managed fund with a Board comprising of three non-executive directors. Hargreave Hale Limited acts as investment manager, administrator and custodian to the Company and provide the company secretary.

The Board has overall responsibility for the Company's affairs including the determination of its investment policy, however, the Board may exercise these responsibilities through delegation to Hargreave Hale as it considers appropriate.

The Directors have managed and continue to manage the Company's affairs in such a manner as to comply with Section 259 of the Income Taxes Act 2007.

INVESTMENT OBJECTIVES
The Company's investment objectives are:

• to invest in a diversified portfolio of small UK based companies on a high risk, medium term capital growth basis, primarily being companies which are traded on AIM and which have the opportunity for significant value appreciation;
• to invest in smaller companies which may not be readily accessible to private individuals and which also tend to be more risky;
• to maximise distributions to shareholders from capital gains and income generated from the Company's funds;
• targeted investment in equities which are non-qualifying investments on an opportunistic basis; and
• to maintain the Company's exposure to small companies through an initial investment of new capital into the Marlborough Special Situations Fund pending investment into qualifying companies.

ASSET ALLOCATION
The Company will have a range of investments in four distinct asset classes:

• Equity investments in qualifying companies, referred to as "Qualifying Investments". Qualifying Investments will:
  • comprise qualifying holdings for a VCT as defined in Chapter 4 Part 6 of the Income Tax Act 2007;
  • primarily be made in AIM companies, but the Company's investment manager will also consider NEX-quoted companies (formally ISDX) and private companies that meet the investment criteria summarised below; and
  • vary in size from £50,000 to £1 million;
• Quasi-sovereign debt, bonds and other fixed income securities;
• Bank deposits that are readily realisable; and
• Non qualifying equity exposure in the form of equity exposure to UK and international equities through targeted investments made on an opportunistic basis or through an investment into the Marlborough Special Situations Fund.

INVESTMENT MANAGER
The Company is managed by Hargreave Hale Limited who have been managing investments in UK Small and Micro Cap companies for 19 years and VCTs for 13 years. Hargreave Hale has a long-established reputation as a substantial investor in and a supporter of small British Companies through the main market of the London Stock Exchange and AIM. As well as the two Venture Capital Trusts, the investment team manages 6 unit trusts including the Marlborough Special Situations Fund, the Marlborough UK Micro-Cap Growth Fund and the Marlborough Multi-Cap Income Fund. The investments of the Company are co-managed by Giles Hargreave and Oliver Bedford with support from the rest of the firm's investment team. The breadth of the investment team, the scale of investment into small companies and the investment manager's track record help attract deal flow.

In accordance with the investment policy, both Hargreave Hale AIM VCT 1 and Hargreave Hale AIM VCT 2 have made investments in the Marlborough Special Situations Fund, which has returned 2,884% (to 30 September 2017) since Giles Hargreave took responsibility for it in July 1998.

INVESTMENT STRATEGY

QUALIFYING INVESTMENTS
The investment manager will maintain a diversified and fully invested portfolio of Qualifying Investments, primarily in small UK companies with a quotation on AIM. The primary purpose of the investment strategy is to ensure the Company maintains its status as a VCT. To achieve this, the Company must have 70% of all funds raised from the issue of shares invested in Qualifying Investments throughout accounting periods of the VCT beginning no later than three years after the date on which those shares are issued.

Although VCTs are required to invest and maintain a minimum of 70% of their funds invested in Qualifying Investments as measured by the VCT rules, it is likely that the investment manager will target a higher threshold of approximately 80% in order to provide some element of protection against an inadvertent breach of the VCT rules. The Company's maximum exposure to a single Qualifying Investment is limited to 15% of net assets.

The key selection criteria used in deciding which Qualifying Investments to make include, inter alia:

• the strength and credibility of the management team;
• the business plan;
• the risk/reward profile of the investment opportunity;
• the quality of the finance function and budgetary process;
• the strength of the balance sheet relative to anticipated cash flow from operations; and
• the existing balance of investments within the portfolio of Qualifying Investments.

The investment manager follows a stock specific, rather than sector specific, investment approach and is more likely to provide expansionary capital than seed capital.

The investment manager will primarily focus on investments in companies with a quotation on AIM or plans to trade on AIM. The investment manager prefers to participate in secondary issues of companies that are quoted on AIM as such companies have an established track record that can be more readily assessed and greater disclosure of financial performance. Secondary issues are often priced at an attractive discount to the market price.

NON-QUALIFYING INVESTMENTS
The Company will have additional non-qualifying equity exposure to UK and international equities through targeted investments made on an opportunistic basis. This will vary in accordance with the investment manager's view of the equity markets and may fluctuate between nil and 30% of the net assets of the Company. The investment manager will also invest in fixed income securities and cash.

The investment manager may invest up to 75% of the net proceeds of any issue of new shares into the Marlborough Special Situations Fund subject to a maximum of 20% of the gross assets of the Company. This will enable the Company to maintain their exposure to small companies indirectly, whilst the investment manager identifies opportunities to invest directly into small UK companies through a suitable number of Qualifying Investments.

The allocation between asset classes in the non-qualifying portfolio will vary depending upon opportunities that arise with a maximum exposure of 100% of the non-qualifying portfolio to any individual asset class.

BUSINESS REVIEW
The chairman's statement and investment manager's report contain a balanced and comprehensive analysis of the business during the financial year and the position of the investments at the year end. The financial position of the Company at 30 September 2017 was strong with no debt or gearing.

KEY PERFORMANCE INDICATORS
At each board meeting, the Directors consider a number of performance measures to assess the investment manager's performance, thereby helping shareholders to assess how the Company is performing against its objectives. The key performance indicators (KPIs) are established industry measures and are as follows:

• Net asset value;
• Total Return;
• Ongoing Expense Ratio;
• Earnings and dividend per share; and
• Percentage invested in Qualifying Companies.

Commentary on the performance of these KPIs has been discussed in the chairman's statement and investment manager's report. In addition to the above, the Board considers peer group comparative performance. Performance is also measured against the Company's closest benchmark, The FTSE AIM All-share Index. The performance measures for the year are included in the financial highlights.

OVERVIEW OF THE YEAR
In the financial year under review, net assets increased from £47.1m to £66.0m. In this period the NAV per share increased from 75.93p to 80.82p. This resulted in a gain to ordinary shareholders of 8.89 pence per share after adjusting for dividends paid of 4.00 pence per share, which translates to a gain of 11.7%.

ONGOING EXPENSES
The ongoing charges of the Company for the financial year under review represented 1.86% (2016: 1.99%) of year end net assets, which remains competitive when compared with other AIM focused VCTs. Shareholders should note this ratio has been calculated as total expenses minus ad hoc legal costs, adjusted for trail commission written off in the year, and divided by year end net assets.

EARNINGS PER SHARE
The Company's earnings per share for the year ended 30 September 2017 was 8.86 pence per share (2016 5.58 pence per share. The Board is pleased with the Company's performance over the period under review.

DIVIDENDS
An interim dividend of 1.75 pence was paid on 30 June 2017 and a final dividend of 2.25p has been proposed.

INVESTMENTS
As a whole, during the year, the qualifying portfolio increased from £28.7m to £38.0m. The Company made 22 Qualifying Investments at a cost of £8.3m, of which 12 were investments into new Qualifying Companies.

For further details please refer to the investment managers report.

BORROWINGS
It is not the Company's present intention to have any borrowings. The Company does, however, have the ability to borrow a maximum amount up to 15% of the "Adjusted Capital and Reserves" amount (as such term is defined in the Articles of Association of the Company), which is effectively the aggregate of the nominal capital of the Company issued and paid up and the amount standing to the credit of the consolidated reserves of the Company, less specified adjustments, exclusions and deductions. There are no plans to utilise this at the current time.
      
BUYBACKS
In total, 880,040 shares were purchased during the year at a weighted average price of 75.33 pence per share.

PRINCIPAL RISKS AND UNCERTAINTIES
The Directors acknowledge that they are responsible for the effectiveness of the Company's risk management and internal controls and periodically review the principal risks faced by the Company at the quarterly board meetings. The Board may exercise these responsibilities through delegation to Hargreave Hale Limited as it considers appropriate.

The principal risks facing the Company relate to the Company's investment activities and include risks stated below:

Risk	How the Board mitigates risk
Venture Capital Trust approval risk - the Company operates in a complex regulatory environment and faces a number of related risks. A breach of Section 259 of the Income Taxes Act 2007 could result in the disqualification of the Company as a VCT and the loss of tax reliefs for the Company and individual shareholders.	To reduce this risk, the Board has appointed the investment manager, who has significant experience in venture capital trust management and reports to the Board regularly throughout the year. In addition, to provide further formal assurance, the Board has appointed Philip Hare & Associates LLP to monitor compliance with regulations and provide half yearly compliance reports to the Board.
Investment risk - Many of the Company's investments are held in high risk companies which are either listed on AIM or privately held.	The investment manager maintains a broad portfolio of investments and holds regular company meetings to monitor investments and identify potential risk. Regular board meetings and dialogue with the Directors support strong governance. Whilst tax legislation limits each Company's maximum exposure to a single Qualifying Investment to 15% of net assets (at cost), the investment manager's preference for portfolio diversification means that Qualifying Investments rarely exceed 5% of net assets.
Discount volatility - Venture Capital Trust shares tend to trade at discounts to their underlying net asset values, which can fluctuate considerably.	To minimise the impact of such fluctuations, the Company has a share buyback policy whereby the Company purchases shares for cancellation.
Compliance risk - The Company is required to comply with the rules of the UK Listing Authority, the Companies Act, Accounting Standards and other legislation. The Company is also a small registered Alternative Investment Fund Manager ("AIFM") and has to comply with the requirements of the AIFM Directive.	Failure to comply with these regulations could result in a delisting of the Company's shares, financial penalties, a qualified audit report or loss of shareholder trust. Board members and the investment manager have considerable experience of operating at senior levels within quoted businesses. Regulatory requirements are continually reviewed and the Board seek legal advice when appropriate.
Economic risk - Events such as economic recession and movement in interest rates could affect smaller companies' valuations.	The investment manager constantly monitors the markets and the portfolio companies and reports to the Board at each meeting. The risk that the value of a security or portfolio of securities could decline in the future is mitigated by holding a diversified portfolio, across a broad range of sectors.
Fraud - Fraud may occur enacted by a third party, the investment manager or administrator.	Internal controls are documented and periodically reviewed on a quarterly basis by senior management. The investment management and administration functions are segregated by department and location.
Operational risk - Failure of the investment manager/administrator's systems or disruption to their business could result in the inability to provide accurate reporting.	The Board regularly reviews the system of internal controls, both financial and non-financial, operated by the Company and Hargreave Hale Ltd. Hargreave Hale Ltd has in place its own internal policies and procedures including a documented business continuity plan and a regularly tested disaster recovery plan to mitigate risk.
Reputational risk - Inadequate or failed controls might result in breaches of regulations or loss of shareholder trust.	The investment manager operates a robust risk management system which is reviewed regularly to ensure controls remain effective in mitigating risks to the Company.
Liquidity risk - Investments in small companies are often illiquid and may be difficult to realise.	The funds liquidity is monitored on a monthly basis.
Outsourcing risk - The risk that quality standards may be reduced through lack of understanding or loss of control.	Reputable firms are used and documents are reviewed internally.

Additional risks and further details of the above risks and how they are managed are explained in Note 16 of the financial statements. Trends affecting future developments are discussed in the chairman's statement and the investment manager's report.

ENVIRONMENTAL AND SOCIAL RESPONSIBILITY
The Board conducts the Company's affairs responsibly and expects the investment manager to consider social and environmental matters when appropriate, particularly with regard to investment decisions. The Company offers electronic communications where acceptable to reduce the volume of paper it uses.

HUMAN RIGHTS
The Board conducts the Company's affairs responsibly and expects the investment manager to consider human rights when fulfilling their role, particularly with regard to investment decisions.

LONG TERM VIABILITY STATEMENT
In accordance with provision C.2.2 of the UK Corporate Governance Code, the Directors have carried out a robust assessment of the principal risks relating to the Company. This assessment has been carried out over a longer period than the 12 months required by the 'Going Concern' provision. The Board conducted this review for a period of five years, which was selected because it:

• falls in line with the Company continuation vote and investors minimum holding period to retain tax relief; and
   
• covers a sufficient period for all funds raised to comply with HMRC investment test rules.

The Board considers the viability of the Company as part of its continuing programme of monitoring risk. The Company has a detailed risk control framework, documented procedures and forecasting model in place to reduce the likelihood and impact of risk taking that exceeds the agreed levels by the Board. These controls are reviewed by the Board and Hargreave Hale on a quarterly basis.

The Board has considered severe but reasonable scenarios and the effect of any mitigating actions, the potential impact of these risks on the business model, future performance and liquidity of the Company.

The Directors consider the Company to be viable for a further five years for the following reasons:

• The Company maintains a broad portfolio of investments including approximately £20.1 million invested in non-qualifying investments and a further £8.0 million in cash. The Company therefore has sufficient liquidity which is monitored monthly;
   
• The Company is well invested against the VCT status test and ended the year at 88.59% invested in qualifying companies. The Board anticipate that there will continue to be suitable Qualifying Investments available over the next five years;
   
• The ongoing expense ratio of the Company for the year end was 1.86%, which is competitive for the VCT sector;
   
• The financial position of the Company at 30 September 2017 was strong with no debt or gearing; and
   
• The Company has sufficient procedures in place to identify, monitor and control risk.

Based on this assessment the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next five years.

PROSPECTS
The prospects and future development of the Company are discussed in detail in the outlook section of the chairman's statement.

EMPLOYEES
The Company had no employees during the year. Board members are appointed according to knowledge and expertise. The Board currently comprises three male non-executive directors who confirm they will consider gender diversity when making future appointments.

By order of the Board of Directors.

STUART BROOKES
Company Secretary

Date: 19 December 2017

INVESTMENT MANAGER'S REPORT

INTRODUCTION
This report covers the 2016/17 financial year, 1 October 2016 to 30 September 2017. The investment manager's report contains references to movements in the Net Asset Value (NAV) per share and Total Return per share (NAV per share plus distributed earnings per share). Movements in the NAV per share do not necessarily mirror the earnings per share (EPS) reported in the accounts and elsewhere, which convey the profit after tax of the Company within the reported period as a function of the weighted average number of shares in issue for the period.

INVESTMENT REPORT
In contrast to the volatility of last year, the year under review was one of stability and consistent NAV appreciation amid evidence of a sustained and coordinated recovery in the global economy. US equities have led the way as macroeconomic data continues to be supportive and US technology large caps continue to deliver impressive returns. In the UK, the economy has proved more resilient than expected against the backdrop of Brexit, and the equity markets have delivered good returns.

We continue to grapple with the potential impact of Brexit on our portfolio which, for now, is most apparent through the devaluation of sterling and the impact on those that export and/or import material amounts of goods and services to or from the EU27. We expect the next 12 months to bring greater clarity on this, at which point we will be better placed to assess the implications for the companies within the portfolio. The good news is that Brexit related uncertainty is yet to weigh on the appetite for capital and we continue to find ourselves in front of many interesting companies with positive stories of secular growth and innovation. Although we would be far from immune to the negative effects that would flow from a poorly constructed exit from the European Union, for now positivity wins the day. To that end, we intend to continue with business as usual while keeping a close eye on events as they unfold.

PERFORMANCE
In the twelve months to 30 September 2017, the NAV increased from 75.93p to 80.82p. A total of 4 pence per share was paid in dividends, giving investors a combined return of 8.89 pence per share, which translates to a gain of 11.7%. During the same period, the FTSE AIM All-Share Total Return gained 24.4%, whilst the FTSE 100 Total Return gained 11.2%. It is worth touching on the particularly impressive performance of the FTSE AIM All-Share index, which is heavily influenced by the performance of the ten largest companies on AIM who account for nearly one quarter of the total index despite a membership that extends to nearly one thousand companies. Strip out the top 10 and the performance of the index was materially lower. The impact of the top 10 on AIM can be seen in the outperformance of AIM against the FTSE Small Cap Index, which returned 17.8% over the same period.

The Qualifying Investments made a net contribution of 5.25 pence per share. The balance was the net of non-qualifying portfolio gains, running costs and investment income.

Zoo Digital was the top performing qualifying investment (+311.1%, +1.81 pence per share) as the shares responded to a set of strong results in March 2017, an encouraging trading update in July 2017 and director's buying. Learning Technologies Group (LTG) was another strong performer (+66.4%, +0.93 pence per share) following the well received and earnings enhancing acquisition of Net Dimensions, coupled with high double digit organic growth across the broader LTG portfolio. Quixant (+63.0%, +0.81 pence per share), Gfinity (+180.0%, +0.75 pence per share) and Cohort (+28.1%, +0.71 pence per share) were also significant contributors over the period.

The biggest loss within the period came from TrakM8 (-59.0%, -0.87 pence per share) after the company announced a significant profit warning in November 2016 following the delayed launch of a material new contract, with the impact magnified by investments made in anticipation of increased volumes that then failed to materialise. Other losses came from K3 (-55.7%, -0.82 pence per share), TLA (-63.4%, -0.55 pence per share), Portr (-30.0%, -0.52 pence per share) and Tasty (-76.8%, -0.44 pence per share).

We invested £8.29m into 22 Qualifying Investments over the period, including 10 further investments into existing Qualifying Companies (2 private); 4 IPOs; 3 secondary placings into listed companies and 5 additional private investments.

Within the qualifying portfolio we reduced our investments in Zoo Digital, Creo, Gfinity, Faron Pharma, Abcam, DP Poland, Loop Up, Surface Transforms, Maxcyte and Craneware. All 10 companies experienced strong runs in the market. We completely exited ECSC, Free Agent, Audioboom, Directa Plus, Haydale Graphene and Synairgen following prolonged periods of poor progress. We also exited Kalibrate and Electrical Geodesics through trade sales.

PORTFOLIO STRUCTURE
The VCT is comfortably through the HMRC defined investment test and ended the period at 88.59% invested as measured by the HMRC investment test. By market value, the VCT had a 57.6% weighting to Qualifying Investments.

The allocation to non-qualifying equity investments increased from 15.4% to 19.6%. We continued to make use of the Marlborough Special Situations Fund as a temporary home for proceeds from fundraising; the allocation increased from 4.7% to 10.9%. The non-qualifying investments contributed +4.52 pence per share to the overall gains. Fixed income as a percentage of the fund decreased from 0.9% to 0.0% and cash decreased from 18.4% to 12.1%.

The HMRC investment tests are set out in Chapter 3 of Part 6 Income Tax Act 2007, which should be read in conjunction with this section of the annual report. Funds raised by VCTs are first included in the investment tests from the start of the accounting period containing the third anniversary of the date on which the funds were raised. Therefore, the allocation of Qualifying Investments as defined by the legislation can be different to the portfolio weighting as measured by market value relative to the net assets of the VCT.

POST PERIOD END UPDATE
Deal flow has been good since period end with 7 new Qualifying Investments made. Of these, 4 (Angle, Cloudcall, Faron Pharma and Hardide) were follow on investments into existing Qualifying Companies, whilst 3 (Beeks Financial, Fusion Antibodies and Mirriad Advertising) were into new investments made at the time of the IPO.

For further information please contact:

STUART BROOKES

Company Secretary

Registered office: Hargreave Hale AIM VCT 1 plc, 41 Lothbury London EC2R 7AE  01253 754740

Date: 19 December 2017

STATEMENT OF DIRECTORS' RESPONSIBILITIES
In respect of the financial statements

The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations. They are also responsible for ensuring that the annual report includes information required by the Listing Rules of the Financial Conduct Authority.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare the financial statements and have elected to prepare the company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice ("UK GAAP") (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss for the Company for that period.

In preparing these financial statements, the Directors are required to:

•   select suitable accounting policies and then apply them consistently;

•   make judgements and accounting estimates that are reasonable and prudent;

•   state whether they have been prepared in accordance with UK GAAP; subject to any material departures disclosed and explained in the financial statements;

•   prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and

•   prepare a director's report, a strategic report and director's remuneration report which comply with the requirements of the Companies Act 2006.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for ensuring that the annual report and accounts, taken as a whole, are fair, balanced, and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

WEBSITE PUBLICATION
The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

DIRECTORS' RESPONSIBILITY STATEMENT PURSUANT TO DTR4
Sir Aubrey Brocklebank (Chairman), David Brock and Oliver Bedford, the Directors confirm to the best of their knowledge that:

• The financial statements have been prepared in accordance with UK GAAP and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company; and
   
• The annual report includes a fair review of the development and performance of the business and the financial position of the Company, together with a description of the principal risks and uncertainties that it faces.

        
For and on behalf of the Board

SIR AUBREY BROCKLEBANK BT
Chairman
Date: 19 December 2017

DIRECTORS' REMUNERATION
The directors' remuneration report was approved by the Board of Directors on 19 December 2017 and will be further subject to an advisory vote at the Annual General Meeting being held on 25 January 2018 and every year thereafter.

INCOME STATEMENT

For the year ended 30 September 2017

		Revenue	Capital	Total
Note		£000	£000	£000
Net gain on investments held at fair value through profit or loss		-	7,349	7,349
Income		446	15	461
		446	7,364	7,810
Management fee		(216)	(648)	(864)
Other expenses		(325)	(49)	(374)
		(541)	(697)	(1,238)
(Loss)/gain on ordinary activities before taxation		(95)	6,667	6,572
Taxation		-	-	-
(Loss)/gain after taxation		(95)	6,667	6,572
(Loss)/gain per share basic and diluted	2	(0.13)p	8.99p	8.86p

INCOME STATEMENT
For the year ended 30 September 2016
(Comparative Information)

		Revenue	Capital	Total
Note		£000	£000	£000
Net gain on investments held at fair value through profit or loss		-	3,645	3,645
Income		369	-	369
		369	3,645	4,014
Management fee		(156)	(467)	(623)
Other expenses		(276)	-	(276)
		(432)	(467)	(899)
(Loss)/gain on ordinary activities before taxation		(63)	3,178	3,115
Taxation		-	-	-
(Loss)/gain after taxation		(63)	3,178	3,115
(Loss)/gain per share basic and diluted	2	(0.11)p	5.69p	5.58p

The total column of these statements is the income statement of the Company. All revenue and capital items in the above statements derive from continuing operations. There was no other comprehensive income other than the gain/loss for the year.

BALANCE SHEET                                
Company Registration Number 5206425 (In England and Wales)
As at 30 September 2017                                                                  

		2017	2016
	Note	£000	£000
Fixed assets
Investments at fair value through profit or loss		58,125	38,572
Current assets
Debtors		63	44
Cash at bank		8,007	8,647
		8,070	8,691
Creditors: amounts falling due within one year		(206)	(191)
Net current assets		7,864	8,500
Total assets less current liabilities		65,989	47,072
Capital and Reserves
Called up share capital		816	620
Share premium		37,515	21,845
Capital redemption reserve		37	28
Special reserve		15,522	19,052
Capital reserve - realised		(4,644)	(3,725)
Capital reserve - unrealised		17,237	9,651
Revenue reserve		(494)	(399)
Total shareholders' funds		65,989	47,072
Net asset value per share	3	80.82p	75.93p

These financial statements were approved and authorised for issue by the Board of Directors on 19 December 2017 and signed on its behalf by

SIR AUBREY BROCKLEBANK BT
Chairman

19 December 2017

STATEMENT OF CHANGES IN EQUITY
For the year ending 30 September 2017

	Share Capital	Share Premium	Capital Redemption Reserve	Special Reserve	Capital Reserve Realised	Capital Reserve Unrealised	Revenue Reserve	Total
	£000	£000	£000	£000	£000	£000	£000	£000
At 1 October 2016	620	21,845	28	19,052	(3,725)	9,651	(399)	47,072
Share buybacks	(9)		9	(668)				(668)
Share Issues	205	16,013						16,218
Issue Costs		(343)						(343)
Equity dividends paid				(2,862)				(2,862)
Realised losses on investments					(237)			(237)
Unrealised gains on investments						7,586		7,586
Management fee charged to capital					(648)			(648)
Arrangement fee income					15			15
Due diligence investments costs					(49)			(49)
Revenue loss after taxation for the year							(95)	(95)
Total gain after taxation					(919)	7,586	(95)	6,572
At 30 September 2017	816	37,515	37	15,522	(4,644)	17,237	(494)	65,989

Reserves available for distribution are capital reserve realised, special reserve and revenue reserve. Total distributable reserves at 30 September 2017 were £10.4 million.

STATEMENT OF CHANGES IN EQUITY

For the year ending 30 September 2016

(Comparative Information)

	Share Capital	Share Premium	Capital Redemption Reserve	Special Reserve	Capital Reserve Realised	Capital Reserve Unrealised	Revenue Reserve	Total
	£000	£000	£000	£000	£000	£000	£000	£000
At 1 October 2015	482	10,987	16	22,044	(3,506)	6,254	(336)	35,941
Share buybacks	(12)		12	(846)				(846)
Share Issues	150	11,093						11,243
Issue Costs		(235)						(235)
Equity dividends paid				(2,146)				(2,146)
Realised gains on investments					248			248
Unrealised gains on investments						3,397		3,397
Management fee charged to capital					(467)			(467)
Revenue loss after taxation for the year							(63)	(63)
Total gain after taxation					(219)	3,397	(63)	3,115
At 30 September 2016	620	21,845	28	19,052	(3,725)	9,651	(399)	47,072

Reserves available for distribution are capital reserve realised, special reserve and revenue reserve.  Total distributable reserves at 30 September 2016 were £14.9 million. 

STATEMENT OF CASH FLOWS
For the year ending 30 September 2017

		2017	2016
		£000	£000
Total gain on ordinary activities before taxation Realised loss/(gain) on investments Unrealised (gain) on investments (Increase) in debtors Increase/(decrease) in creditors		6,572 237 (7,586) (19) 15	3,115 (248) (3,397) (12) (17)
Net cash (outflow) from operating activities		(781)	(559)
Purchase of investments Sale of investments		(22,657) 10,453	(13,410)  10,836
Net cash (outflow) from investment activities		(12,204)	(2,574)
Share buybacks Issue of share capital Dividends paid		(668) 15,875 (2,862)	(846) 11,008 (2,146)
Net cash inflow from financing activities		12,345	8,016
(Decrease)/increase in cash		(640)	4,883
Opening cash Cash movement		8,647 (640)	3,764 4,883
Closing cash		8,007	8,647

1. Basis of Preparation

      The financial information set out in this preliminary announcement does not constitute the Company's statutory accounts for the years ended 30 September 2017 or 30 September 2016. Statutory accounts for the year ended 30 September 2016 have been filed with the Registrar of Companies and those of the year ended 30 September 2017 will be delivered to the Registrar in due course; both have been reported on by the independent auditors. The independent auditor's reports on the Statutory accounts for the years ended 30 September 2016 and 30 September 2017 were unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
       
      The accounts of the Company are prepared in accordance with Accounting Standards applicable in the United Kingdom. The Company's financial statements are prepared in accordance with FRS 102 and the Statement of Recommended Practice (SORP) for Financial Statements of Investment Trust Companies issued in November 2014.
       
      The accounting policies used in preparing this preliminary announcement are consistent with those used in the preparation of the financial statements.
       
      All AIM investments are valued at bid price. Unquoted companies are included at fair value. Where cost is no longer considered appropriate the Company will use a value indicated by a material arms-length transaction by an independent third party in the shares of a company. Where no such transaction exists the Company will use the most appropriate valuation technique including discounted cash flow analysis, earnings multiples, net assets and industry valuation benchmarks. The fair value of such assets or liabilities will be reviewed on a 6 monthly basis and more frequently if events occur that could have a material impact on the investment.
       
      The accounting policies adopted in these preliminary results have been consistently applied to all the years presented and are consistent with the policies used in the preparation of the statutory accounts for the years ended 30 September 2017 and 30 September 2016. The full statutory annual accounts will be published in December 2017. Copies may in due course be obtained during normal business hours from Hargreave Hale Limited, Talisman House, Boardmans Way, Blackpool, FY4 5FY.
       
      The Annual General Meeting of the Company will be held at the Company's registered office on 25 January 2018 at 2.00pm.
       

2. Earnings per share (basic and diluted)

Revenue return per ordinary share is based on a net revenue loss on ordinary activities after taxation of £95,107 (2016: loss £62,763) and on 74,161,478 (2016: 55,810,087) ordinary shares, being the weighted average number of ordinary shares in issue during the year.  Capital return per ordinary share is based on a net capital gain of £6,667,203 (2016: gain £3,177,775) for the year and on 74,161,478 (2016: 55,810,087) ordinary shares, being the weighted average number of ordinary shares in issue during the year. Total return per ordinary share is based on a net gain of £6,572,097 (2016: gain £3,115,012) for the year and on 74,161,478 (2016: 55,810,087) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

3. Net asset value per ordinary share

The net asset value per ordinary share at 30 September 2017 of 80.82 pence (2016: 75.93 pence) is based on net assets of £65,988,872 at the year-end (2016: £47,071,964) and on 81,653,218 ordinary shares, being the number of shares in issue at year end (2016: 61,995,274).

4. Principal Risks and Uncertainties

      The principal risks facing the Company relate to the Company's investment activities and include venture capital trust approval risk, Investment risk, discount volatility, compliance risk, economic risk, fraud, operational risk, reputational risk, liquidity risk and outsourcing risk. Other risks faced by the Company include market risk, currency risk, interest rate risk and credit risk. These risks and the way in which they are managed are described in more detail in the Strategic Report.
       

5. Related party transactions

Hargreave Hale Limited
Hargreave Hale Limited is considered to be a related party to the Company. Oliver Bedford, a non-executive director of the Company and a member of its key management personnel, is an employee of Hargreave Hale Limited. In addition, Hargreave Hale Limited acts as investment manager, administrator and custodian to the Company and it provides the company secretary. All of the support functions performed by Hargreave Hale Limited are segregated by department and location and are independent of each other.

      Hargreave Hale Limited in its capacity as investment manager of the fund receives annual fees of 1.5% per annum of the net asset value of the Company, calculated and payable quarterly in arrears. Fees for the year are £864,075 (2016: £622,596). In relation to the other support functions described above, Hargreave Hale Limited received fees of £100,000 (2016: £81,667). Of those combined fees, £99,095 (2016: £72,089) was still owed at the year end.
       
Hargreave Hale Limited has agreed to indemnify the Company against annual running costs (such costs excluding VAT, any performance incentive fee and any trail commissions the payment of which is the responsibility of the Company) exceeding 3.5% of its net assets. No fees were waived between 1 October 2016 and 30 September 2017 under the indemnity.

6.       Shares Issued
      During the year, the Company issued 20,537,984 ordinary shares of 1 pence per share (nominal value £205,380) which resulted in funds being received of £16,217,665. The 3.5% premium of £567,618 was payable to Hargreave Hale Limited to cover the cost of additional shares allotted of £225,101 and introducer commission of £990 resulting in net fees payable to Hargreave Hale Limited of £341,527.

7. Capital Structure

      Share Capital
      Ordinary shares are classed as equity. The ordinary shares in issue have a nominal value of one pence and carry one vote each. Substantial holdings in the Company are disclosed in the directors' report.
       
      Share Premium
      This reserve represents the difference between the issue price of shares and the nominal value of shares at the date of issue, net of related issue costs.
       
      Capital Redemption Reserve
      This reserve is used for the cancellation of shares bought back under the buyback facility.
       
      Special Reserve
      Distributable reserve used to pay dividends and re-purchase shares under the buyback facility.
       
      Capital Reserve Realised
      Gains/losses on disposal of investments, due diligence costs and income from private company investments, permanent impairment of financial assets and 75% of the investment management fee are accounted for in the capital reserve realised.
       
      Capital Reserve Unrealised
      Unrealised gains and losses on investments held at the year end arising from movements in fair value are taken to the capital reserve unrealised.
       
      Revenue Reserve
       Net revenue profits and losses of the Company.

INVESTMENT PORTFOLIO SUMMARY
ORDINARY SHARE FUND

AS AT 30 SEPTEMBER 2017

Qualifying Investments	Cost £000	Valuation £000	Valuation %	Net Assets %	Sector
Cohort plc	619	1,886	3.24	2.86	Industrials
Learning Technologies Group plc	663	1,681	2.89	2.55	Information Technology
Abcam plc	55	1,680	2.89	2.54	Health Care
Zoo Digital Group plc	393	1,612	2.77	2.44	Information Technology
Quixant plc	160	1,530	2.63	2.32	Consumer Discretionary
AnimalCare Group plc	220	1,400	2.41	2.12	Health Care
Craneware plc	125	1,274	2.19	1.93	Health Care
Eagle Eye Solutions Ltd	967	1,201	2.07	1.82	Information Technology
Idox plc	135	1,162	2.00	1.76	Information Technology
SCA Investments Ltd (Gousto)**	1,002	1,000	1.72	1.52	Consumer Discretionary
Portr Ltd**	873	998	1.72	1.51	Information Technology
Science in Sport plc	778	981	1.69	1.49	Consumer Staples
DP Poland plc	594	970	1.67	1.47	Consumer Discretionary
Ideagen plc	410	965	1.66	1.46	Information Technology
Hardide plc	786	932	1.60	1.41	Materials
Zappar Ltd**	902	900	1.55	1.36	Information Technology
Laundrapp Ltd**	802	884	1.52	1.34	Information Technology
Gfinity plc	384	835	1.44	1.27	Information Technology
ULS Technology plc	221	705	1.21	1.07	Information Technology
Creo Medical Group plc	659	701	1.21	1.06	Health Care
Escape Hunt plc	618	644	1.11	0.98	Consumer Discretionary
Loopup Group plc	236	637	1.10	0.97	Information Technology
Faron Pharmaceuticals Oy	201	600	1.03	0.91	Health Care
Maxcyte Inc Com Stk USD0.01 (DI)	173	590	1.02	0.89	Health Care
Mexican Grill Ltd (A Preference Shares)**	185	552	0.95	0.84	Consumer Discretionary
Honest Brew Ltd**	501	500	0.86	0.76	Consumer Discretionary
Infinity Reliance Ltd (My 1st Years)**	501	500	0.86	0.76	Consumer Discretionary
CentralNic Group plc	293	476	0.82	0.72	Information Technology
Vertu Motors plc	600	473	0.81	0.72	Consumer Discretionary
K3 Business Technology Group plc	270	468	0.81	0.71	Information Technology
EKF Diagnostics Holdings plc	300	460	0.79	0.70	Health Care
Intercede Group plc	247	420	0.72	0.64	Information Technology
Aquis Exchange Ltd**	401	400	0.69	0.61	Information Technology
WANDisco plc	89	400	0.69	0.61	Information Technology
Belvoir Lettings plc	513	386	0.66	0.58	Real Estate
TrakM8 Holdings plc	106	383	0.66	0.58	Information Technology
Fairfx Group plc	295	365	0.63	0.55	Information Technology
Surface Transforms plc	373	358	0.62	0.54	Industrials
Everyman Media Group plc	171	355	0.61	0.54	Consumer Discretionary
Clearstar Inc	449	315	0.54	0.48	Industrials
Cloudcall Group plc	259	311	0.54	0.47	Telecommunication Services
Globaldata plc	173	309	0.53	0.47	Information Technology
Velocity Composites plc	332	308	0.53	0.47	Industrials
Plastics Capital plc	250	295	0.51	0.45	Materials
The Property Franchise Group plc	225	288	0.50	0.44	Real Estate
Instem plc	297	272	0.47	0.41	Health Care
Osirium Technologies plc	301	263	0.45	0.40	Information Technology
Satellite Solutions Worldwide Group plc	154	258	0.44	0.39	Telecommunication Services
Premaitha Health plc	432	253	0.44	0.38	Health Care
Universe Group plc	210	240	0.41	0.36	Information Technology
TLA Worldwide plc	300	225	0.39	0.34	Consumer Discretionary
Angle plc	348	187	0.32	0.28	Health Care
Porta Communications plc	505	177	0.30	0.27	Consumer Discretionary
Imaginatik plc	323	166	0.29	0.25	Information Technology
Reneuron Group plc	534	166	0.29	0.25	Health Care
Verona Pharma plc	127	156	0.27	0.24	Health Care
APC Technology Group plc	155	155	0.27	0.23	Information Technology
Lidco Group plc	220	151	0.26	0.23	Health Care
Pressure Technologies plc	170	130	0.22	0.20	Energy
Mycelx Technologies Corporation plc	300	129	0.22	0.19	Industrials
Maxcte Inc Com Stk USD0.01 (DI/REG S)	141	123	0.21	0.19	Health Care
Egdon Resources plc	158	116	0.20	0.18	Energy
Ilika plc	218	107	0.18	0.16	Industrials
Tasty plc	288	100	0.17	0.15	Consumer Discretionary
TP Group plc	185	87	0.15	0.13	Industrials
Medaphor Group plc	250	78	0.13	0.12	Consumer Discretionary
Mirada plc	65	65	0.11	0.10	Information Technology
Mexican Grill Ltd (Ordinary Shares)**	21	61	0.11	0.09	Consumer Discretionary
Genedrive plc	140	60	0.10	0.09	Health Care
Fusionex International plc**	138	58	0.10	0.09	Information Technology
Redcentric plc	42	42	0.07	0.06	Information Technology
Midatech Pharma plc	37	37	0.06	0.06	Health Care
Flowgroup plc	25	25	0.04	0.04	Industrials
Mporium Group plc	23	23	0.04	0.03	Information Technology
Microsaic Systems plc	10	10	0.02	0.02	Information Technology
Brigantes Energy Ltd*	-	-	-	-	Energy
Infoserve Group plc*	-	-	-	-	Consumer Discretionary
Invocas Group plc*	-	-	-	-	Health Care
Total Qualifying Investments	24,626	38,010	65.40	57.62

Non-Qualifying Investments	Cost £000	Valuation £000	Valuation %	Net Assets %	Sector
Marlborough Special Situations Fund**	6,062	7,173	12.34	10.87
Total - Unit Trusts	6,062	7,173	12.34	10.87
Melrose Industries plc	926	872	1.50	1.32	Industrials
NMC Health plc	426	770	1.32	1.17	Health Care
Fulcrum Utility Services Ltd	125	688	1.18	1.04	Utilities
Royal Dutch Shell plc	652	688	1.18	1.04	Energy
Dechra Pharmaceuticals plc	461	652	1.12	0.99	Health Care
FCFM Group Ltd**	300	652	1.12	0.99	Financials
BP plc	600	621	1.07	0.94	Energy
Sanne Group plc	511	597	1.03	0.90	Financials
On the Beach Group plc	391	531	0.91	0.80	Consumer Discretionary
Quixant plc	159	495	0.85	0.75	Consumer Discretionary
JD Sports Fashion plc	463	494	0.85	0.75	Consumer Discretionary
Anglo American plc	422	455	0.78	0.69	Materials
Merlin Entertainments plc	386	388	0.67	0.59	Consumer Discretionary
Ascential plc	326	369	0.64	0.56	Consumer Discretionary
Horizon Discovery Group plc	261	345	0.59	0.52	Health Care
Wizz Air Holdings plc	220	343	0.59	0.52	Consumer Discretionary
RPC Group plc	289	317	0.55	0.48	Materials
XP Power Ltd	292	305	0.53	0.46	Industrials
Renishaw plc	276	286	0.49	0.43	Information Technology
Hilton Food Group plc	252	276	0.48	0.42	Consumer Discretionary
Lloyds Banking Group plc	285	271	0.47	0.41	Financials
Clipper Logistics plc	234	262	0.45	0.40	Consumer Discretionary
Finsbury Food Group plc	140	257	0.44	0.39	Consumer Staples
Sportech plc	231	255	0.44	0.39	Consumer Discretionary
Learning Technologies Group plc	76	226	0.39	0.34	Information Technology
Micro Focus International plc	141	221	0.38	0.33	Information Technology
Everyman Media Group plc	85	172	0.30	0.26	Consumer Discretionary
Alfa Financial Software Holdings plc	92	143	0.25	0.22	Information Technology
Eurocell plc	119	141	0.24	0.21	Industrials
Mexican Grill Ltd (A Preference Shares)**	128	141	0.24	0.21	Consumer Discretionary
Medica Group plc	95	139	0.24	0.21	Health Care
Mycelx Technologies Corporation plc	200	120	0.21	0.18	Industrials
Just Eat plc	82	100	0.17	0.15	Information Technology
Regent Pacific Group Ltd	150	78	0.13	0.12	Health Care
Eagle Eye Solutions Ltd	44	63	0.11	0.10	Information Technology
Amerisur Resources plc	167	61	0.10	0.09	Energy
Reneuron Group plc	104	60	0.10	0.09	Health Care
The Fulham Shore plc	38	44	0.08	0.07	Consumer Discretionary
Midatech Pharma plc	25	25	0.04	0.04	Health Care
Mexican Grill Ltd (Ordinary Shares)**	26	19	0.03	0.03	Consumer Discretionary
Total - Non-Qualifying equities	10,200	12,942	22.26	19.60
Total -Non-Qualifying Investments	16,262	20,115	34.60	30.47
Total investments	40,888	58,125	100.00	88.09
Cash at bank		8,007		12.13
Prepayments & Accruals		(143)		(0.22)
Net Assets		65,989		100.00
*These are actual holdings of less than £500.
**Unquoted Companies

Investments held within the portfolio are listed and headquartered in the UK with the exception of the following:

	Listed	Headquartered	Registered
AIM listed Investments:
Clearstar Inc	UK	Cayman Islands	Cayman Islands
DP Poland plc	UK	Poland	UK
Faron Pharmaceuticals Oy	UK	Finland	Finland
Fulcrum Utility Services Ltd	UK	UK	Cayman Islands
Maxcyte Inc	UK	USA	USA
Mycelx Technologies Corporation plc	UK	USA	USA
Regent Pacific Group Ltd	Hong Kong	Hong Kong	Cayman Islands
Royal Dutch Shell plc	UK	Netherlands	UK
Sanne Group plc	UK	Jersey	Jersey
WANDisco plc	UK	UK and USA	Jersey
Wizz Air Holdings plc	UK	Switzerland	Jersey
XP Power plc	UK	Singapore	Singapore
Unlisted private companies:
Aquis Exchange Ltd	-	UK	UK
Brigantes Energy Ltd	-	UK	UK
FCFM Group Ltd	-	UK	UK
Fusionex International plc	-	UK	Jersey
Honest Brew Ltd	-	UK	UK
Infoserve Group plc	-	UK	UK
Infinity Reliance Ltd (My 1st Years)	-	UK	UK
Invocas Group plc	-	UK	UK
Laundrapp Ltd	-	UK	UK
Mexican Grill Ltd	-	UK	UK
Portr Ltd	-	UK	UK
SCA Investments Ltd (Gousto)	-	UK	UK
Zappar Ltd	-	UK	UK
Authorised unit trust:
Marlborough Special Situations Fund	-	UK	UK

TOP TEN INVESTMENTS
As at 30 September 2017 (By Market Value)

The top 10 equity investments are shown below; each is valued by reference to the bid price, or in the case of unquoted companies, values are either based on the last arm's length transaction or valuation techniques, such as earnings multiples. Forecasts, where given, are drawn from a combination of broker research and/or Bloomberg consensus forecasts and exclude amortisation, share based payments and exceptional items. Forecasts are in relation to a period end for which the company results are yet to be released. Forecasts are not shown for private companies. The net asset figures are drawn from audited accounts and net cash values are from published accounts in most cases.

Quixant plc				440.0p
Investment date	May 2013		Forecasts for the year to	December 2017
Equity Held	0.70%	Turnover ($'000)		102,300
Av Purchase Price	69.3p	Profit/(loss) before tax ($'000)		15,800
Cost (£'000)	319	Net Cash ($'000)		(69)
Valuation (£'000)	2,025	Net Assets December 2016 ($'000)		34,306
COMPANY DESCRIPTION
Quixant designs and manufactures complete advanced hardware and software solutions for the pay-for-play gaming and slot machine industry. Quixant's specialised products provide an all-in-one solution, based on PC technology but with additional hardware features and operating software developed specifically to address the requirements of the gaming industry.

Learning Technologies Group plc				53.3p
Investment date	November 2014		Forecasts for the year to	December 2017
Equity Held	0.63%	Turnover (£'000)		51,500
Av Purchase Price	20.6p	Profit/(loss) before tax (£'000)		11,300
Cost (£'000)	739	Net Cash (£'000)		(8,486)
Valuation (£'000)	1,907	Net Assets December 2016 (£'000)		30,710
COMPANY DESCRIPTION
Learning Technologies Group (LTG) provides a comprehensive and integrated range of e-learning services and technologies to corporate and government clients. LTG is making good progress towards its goal of establishing a substantial global organisation of specialist digital learning businesses from Europe, US, Latin America and Asia to form a market-leading technologies agency.

Cohort plc				397.0p
Investment date	February 2006		Forecasts for the year to	April 2018
Equity Held	1.16%	Turnover (£'000)		119,600
Av Purchase Price	130.3p	Profit/(loss) before tax (£'000)		15,500
Cost (£'000)	619	Net Cash (£'000)		8,472
Valuation (£'000)	1,886	Net Assets April 2017 (£'000)		73,988
COMPANY DESCRIPTION
Cohort is the parent company of four businesses providing a wide range of services and products for British, Portuguese and international customers in defence and related markets. It aims to add value through the experience of its senior team while providing a light-touch but effective governance framework.

Abcam plc				1,018.0p
Investment date	October 2005		Forecasts for the year to	June 2018
Equity Held	0.08%	Turnover (£'000)		237,500
Av Purchase Price	33.3p	Profit/(loss) before tax (£'000)		69,500
Cost (£'000)	55	Net Cash (£'000)		84,752
Valuation (£'000)	1,680	Net Assets June 2017 (£'000)		307,119
COMPANY DESCRIPTION
Abcam is a global life sciences company providing highly validated antibodies and other binders and assays to the research and clinical communities to help advance the understanding of biology and cause of disease.  The company's customers include universities, research institutes, and pharmaceutical and biotechnology companies in countries around the world.

Zoo Digital Group plc				37.0p
Investment date	April 2017		Forecasts for the year to	March 2018
Equity Held	5.93%	Turnover ($'000)		26,000
Av Purchase Price	9.0p	Profit/(loss) before tax ($'000)		200
Cost (£'000)	393	Net Cash ($'000)		(5,621)
Valuation (£'000)	1,612	Net Assets March 2017 ($'000)		2,561
COMPANY DESCRIPTION
Zoo is a leading provider of subtitling and digital distribution services for the global entertainment industry. Zoo combine their own technology with talented client teams across the globe to translate original video programmes into more than 50 foreign languages. Their technology helps process the edited digital materials to meet the technical delivery requirements of a growing number of online video services.

AnimalCare Group plc				350.0p
Investment date	December 2007		Forecasts for the year to	June 2018
Equity Held	0.67%	Turnover (£'000)		97,300
Av Purchase Price	55.0p	Profit/(loss) before tax (£'000)		9,300
Cost (£'000)	220	Net Cash (£'000)		6,264
Valuation (£'000)	1,400	Net Assets June 2017 (£'000)		23,845
COMPANY DESCRIPTION
AnimalCare Group markets and sells a wide range of pharmaceutical and other premium products and services to vets and vet wholesalers.

Craneware plc				1,300.0p
Investment date	September 2007		Forecasts for the year to	June 2018
Equity Held	0.36%	Turnover ($'000)		66,533
Av Purchase Price	127.6p	Profit/(loss) before tax ($'000)		19,800
Cost (£'000)	125	Net Cash ($'000)		53,170
Valuation (£'000)	1,274	Net Assets June 2016 ($'000)		59,355
COMPANY DESCRIPTION
Craneware develops and sells billing software analysis tools for the United States healthcare services sector. The company's software automates the checking process, aids in cash flow and revenue generation, and ensures accurate submission of claims and management of compliance risks.

Eagle Eye Solutions Group plc				253.0p
Investment date	April 2014		Forecasts for the year to	June 2018
Equity Held	1.97%	Turnover (£'000)		15,900
Av Purchase Price	202.3p	Profit/(loss) before tax (£'000)		(3,600)
Cost (£'000)	1,011	Net Cash (£'000)		3,724
Valuation (£'000)	1,264	Net Assets June 2017 (£'000)		8,862
COMPANY DESCRIPTION
Eagle Eye Solutions operates in the e-commerce industry. The company provides a digital platform that enables retailers to connect with customers to deliver offers, rewards and services that can be redeemed.

Idox plc					64.5p
Investment date	May 2007		Forecasts for the year to		October 2017
Equity Held	0.43%	Turnover (£'000)			92,700
Av Purchase Price	7.5p	Profit/(loss) before tax (£'000)			17,000
Cost (£'000)	135	Net Cash (£'000)			(25,048)
Valuation (£'000)	1,162	Net Assets October 2016 (£'000)			65,232
COMPANY DESCRIPTION
Idox is a supplier of specialist information management solutions and services to the public sector and to highly regulated asset intensive industries around the world in the wider corporate sector.
SCA Investments Ltd (Gousto)						2,988.0p
Investment date	July 2017			Results for the year to		December 2016
Equity Held	1.53%			Turnover (£'000)		12,755
Av Purchase Price	2,994.0p			Profit/(loss) before tax (£'000)		(6,739)
Cost (£'000)	1,002			Net Cash (£'000)		5,407
Valuation (£'000)	1,000			Net Assets December 2016 (£'000)		6,512
Income recognised in period (£)	0
COMPANY DESCRIPTION
Founded in February 2012, Gousto is an e-commerce company offering recipe kit boxes which include fresh ingredients for step-by-step chef designed recipes to be made at home. Shoppers select meals from a variety of options on Gousto's e-commerce platform. Gousto then delivers the pre-proportioned ingredients to the doorstep, along with instructions on how to prepare the meal.

CO-INVESTMENT As at 30 September 2017, other funds managed by Hargreave Hale Ltd were also invested in all of the investments held within the Company's portfolio with the exception of the following: Infoserve Group plc, Invocas Group plc, Redcentric plc, Tasty plc, Universe Group plc and Vertu Motors plc.

STUART BROOKES
Company Secretary

Registered office:
Hargreave Hale AIM VCT 1 plc,
41 Lothbury
London
EC2R 7AE

Date: 19 December 2017

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Source: Hargreave Hale AIM VCT 1 plc via Globenewswire