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 2015 on 10 December 2015. The full Financial Statements can be accessed on the Company's website http://www.hargreaveaimvcts.co.uk or alternatively by following the link at the bottom of this report.

FINANCIAL HIGHLIGHTS

Ordinary Shares (as at 30 September):	Â	2015	Â	2014
					Â
Net asset value per share		74.64p		80.31p
Cumulative distributions paid per share since launch		38.00p		33.75p
Total return per share		112.64p		114.06p
					Â
Annual Returns per share (basic and diluted):
Revenue return		(0.40)p		(0.41)p
Capital return		(0.66)p		10.91p
Combined return		(1.06)p		10.50p
					Â
Dividends per share:
Interim paid		1.75p		1.75p
Final proposed/paid		2.25p		2.50p
Total dividend for year		4.00p		4.25p
					Â
Ongoing Expense Ratio		2.24%		2.39%
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Performance Benchmark:
FTSE AIM All-share Index (results rebased to 100 at 29 October 2004)		75.24		77.82

CHAIRMAN’S STATEMENT

Introduction

At 30 September 2015 the net asset value (“NAV”) was 74.64 pence which after adjusting for the dividends paid gives a Total Return since inception of 112.64 pence. The loss per ordinary share for the year was 1.06 pence per share (comprising a revenue loss of 0.40 pence and capital losses of 0.66 pence).

Investments

The investment manager, Hargreave Hale Limited, invested a further £4.84 million in 18 Qualifying Companies

during the year. The fair value of Qualifying Investments at 30 September 2015 was £25.53 million invested in 63 AIM companies and 7 unquoted companies. £10.59 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.

Dividend

An interim dividend of 1.75 pence was paid on 17 July 2015 (interim 2014 – 1.75 pence).

A final dividend of 2.25 pence is proposed (2014 – 2.50 pence) which, subject to shareholder approval at the Annual General Meeting will be paid on 20 January 2016, to ordinary shareholders on the register on 18 December 2015.

Provided the underlying investment performance of the Company remains acceptable and the liquidity position allows, it remains our policy to target a 5% distribution yield referenced to the year end NAV per share of the Company.

Buybacks

In total, 1,173,259 shares were purchased during the year at an average price of 72.38 pence per share. A

further 172,797 shares have been purchased since the year end at an average price of 73.46 pence per share.

The Board continues to target a share price discount of 5% of the NAV per share (as measured against the

mid-price) for market purchases. It should be emphasised that this target is non-binding and dependent on

circumstances including the Company’s liquidity from time to time and market conditions.

Issue of Equity

On 18 August 2015 the joint offer for subscription for new shares in Hargreave Hale AIM VCT 1 plc and AIM

VCT 2 plc (launched in October 2014) was closed fully subscribed with £10m raised for Hargreave Hale AIM

VCT 1 plc.

New Joint Offer for Subscription of ordinary shares

The Directors of the Company announced on 2 December 2015 the launch of a new joint offer for subscription

for new shares in both Hargreave Hale AIM VCTs to raise up to £15 million in Hargreave Hale AIM VCT 1 plc

and £10 million in Hargreave Hale AIM VCT 2 plc.

The offer is to be approved by shareholders of the Company at a General Meeting on 12 January 2016 and is

open to both new and existing shareholders.

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 by the start of the accounting period containing the third anniversary of the

date on which the funds were raised. I am pleased to report that we continue to make good progress against

this test and, at the year end, we had achieved 89.35% and have satisfied all the relevant tests.

Administration Charges

As disclosed in the Interim Report your Board, together with that of Hargreave Hale AIM VCT 2 plc, has agreed

to an increase in the Company’s administration fee of £20,000 per annum per VCT. The proposed increase in

the administration fee is the first since the company was incorporated in 2004.

Changes to VCT Rules

You may be aware that considerable changes have been made to the VCT rules in order for the VCT scheme to

be granted a State Aid exemption by the EU and some of these changes have more draconian consequences,

than hitherto. We have examined the effects that these might have on your Company and conclude that of

the companies in which we invested in the fourteen months to 31 August 2015 over 80 per cent. would have

qualified under the new rules. We think that the only major change that will affect us is that we will no longer be

able to make non qualifying investments in AIM listed companies. However until HMRC issue their guidance

notes we will proceed with caution.

Outlook

Having emerged from the political uncertainties of a general election and the prospect of a Greek exit from

the Eurozone we were hit by the decision of the Chinese authorities to make a downward realignment of

their currency to the US dollar. The markets have been turbulent on the back of the evident slowdown in the

Chinese economy. Your Company still has a significant amount of non-qualifying investments held in cash

and other readily realisable investments which would allow the Company to adopt a more defensive posture

should market sentiment further deteriorate.

The UK and US economies seem to be making satisfactory progress and whilst a rise in interest rates on either

side of the Atlantic may dampen growth this seems set to carry on for the next couple of years. However the

markets look to be volatile as some of our other trading partners go through periods of turmoil, in particular

the Eurozone and China. The Chinese curse “May you live in interesting times” seems particularly apposite at

the moment.

The manager invests for the long term in good quality, well run companies with strong growth prospects,

which in the long term should prosper even if the share prices fluctuate in the meantime.

Sir Aubrey Brocklebank BT

Chairman

Date: 10 December 2015

For further information, please contact:-

Stuart Brookes

Company Secretary

Hargreave Hale AIM VCT 1 Plc

01253 754740

Annual Report and Accounts - year ended 30 September 2015

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