Arc Growth Company VCT plc - The Tax Shelter Report

Arc Growth Company VCT plc
Offer for Subscription
for the tax year 2006/07
Issue of up to 158,250 New Shares

IMPORTANT NOTICE
This Document, which constitutes a financial promotion for the purposes of section 21 of the Financial Services and Markets Act
2000 (FSMA 2000), has been approved, for the purposes of that section only, by Arc Fund Management Limited (“Arc”), which
is authorised and regulated by the Financial Services Authority. Arc will not regard any person other than the Company as its
customer.There is no guarantee that the Company’s investment objectives will be attained. If you are in any doubt as to what
action to take, you should contact an independent financial adviser.The levels and bases of reliefs from taxation described in this
Document are those currently available.These may change and their value depends on an Investor’s individual circumstances. No
person has been authorised to issue any advertisements or give any information, or make any representations in connection with
the Offer, other than those contained in this Document and, if issued, given or made, such advertisements, information or
representations must not be relied upon as having been authorised by the Company. Arc has given, and not withdrawn, its
consent to the inclusion of its name in the form and context in which it is included.
To download a copy of this Document, go to www.arcfundmanagement.com.
This document does not constitute a prospectus for the purposes of the Prospectus Rules.Therefore this document is not an
approved prospectus for the purposes of, and as defined in, section 85 of FSMA 2000, and has not been approved by the FSA
or by any authority which could be a competent authority for the purposes of the Prospectus Directive.
Arc Growth Company VCT plc and the Directors accept responsibility for the information contained in this Document.To the
best of their knowledge and belief of the Company and 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 does not omit anything likely to affect
the impact of such information.
ENQUIRIES
Arc Fund Management Limited (“Arc”) Tel: 020 7623 3345
22 Lovat Lane Fax: 020 7623 3362
London EC3R 8EB
Email: info@arcfundmanagement.com
Website: www.arcfundmanagement.com
OFFER TIMETABLE AND STATISTICS
Minimum individual investment £2,000
Maximum number of New Ordinary Shares to be issued under the Offer 158,250
Subscription price per Share £1.00
Closing Date – 2006/07 Offer (unless fully subscribed earlier) 11 August 2006
The Terms and Conditions of this Application, which should be read in full, are set out in Appendix V and in the Notes on the
Application Form, which are included at the back of this Document, together with an Application Form, which should be sent or
hand delivered to Woodside Corporate Services, 21-22 Grosvenor Street, London W1K 4QJ.
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CONTENTS
Page
Important Notice, Enquiries, Offer Timetable and Statistics, Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Letter from Chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Appendix I – Background information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Appendix II – Other information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Appendix III – Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Appendix IV – Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Appendix V – Terms and Conditions of Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Application Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Notes on the Application Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2

ARC GROWTH COMPANY VCT PLC
(Incorporated in England and Wales under the Companies Act 1985 with registered number 5323692)
Directors Registered Office
Richard Lawrence Hargreaves, Non-Executive Chairman
Kevin Thomas Morley, Non-Executive Director
Renwick Robert Haddow, Non-Executive Director
Dear Investor
22 Lovat Lane
London
EC3R 8EB
11 July 2006
OFFER FOR SUBSCRIPTION OF UP TO 158,250 NEW ORDINARY
SHARES AT A SUBSCRIPTION PRICE OF £1.00 PER SHARE.
Introduction
The Directors would like to offer Investors the opportunity to subscribe for New Ordinary Shares in Arc Growth Company VCT plc.
Under this Offer, Investors may subscribe for up to 158,250 New Ordinary Shares in the Company. In doing so they will be investing
in a portfolio with the benefit of 30 per cent. income tax relief, provided that they hold the investment for a minimum of five years.
Background
Arc Growth Company VCT plc launched in February 2005 and was admitted to the Official List on 30 June 2005, having raised
approximately £1.13 million by way of an offer for subscription.The Company raised a further £517,000 by way of an additional
offer for subscription in April 2006. The Company’s issued share capital is currently listed on the Official List and traded on the
London Stock Exchange.
Unlike a number of other VCTs currently on the market, the Company intends to invest mainly in companies not currently listed or
traded on any market or exchange, including AIM and OFEX, but may seek such a listing in the future.The Directors believe that
companies in this position have significant growth potential and an investment in them can be made at more attractive valuations
than in companies that are already listed.
Arc Fund Management Limited acts as an investment manager and runs a series of EIS funds which focus on unquoted investments.
New Investors will have the benefit of investing in a portfolio of Companies one of which has already received a cash offer of over
double the Company’s initial investment.
Reasons for the Offer for Subscription
The Board believes that it is in the interests of all Shareholders for the Company to raise additional funds in order to participate in
new investment opportunities. The funds raised under the Offer will be managed in the same way as funds raised by existing
Ordinary Shares.
This Offer may be attractive to Investors as it affords them the opportunity to:
• Obtain income tax relief at 30 per cent. on the amount subscribed;
• Participate in a market sector which presents new investment opportunities; and
• Invest in a VCT company with an experienced management team.
Further details regarding the background of the Company and the Offer can be found in Appendices I to V. If you have any questions
regarding the Offer, please contact Arc Fund Management Limited on 020 7623 3345.
Yours faithfully
Richard Hargreaves
Chairman
3
3

RISK FACTORS
Prospective Investors should be aware that the value of New Ordinary Shares and the income from them can fluctuate. In addition,
there is no guarantee that the market price of New Ordinary Shares will fully reflect their underlying net asset value or the ability
to buy and sell at that price. Furthermore, in the opinion of the Directors, investing in the Company carries particular risks, of which
the principal risks are set out below:
• Although it is intended that the Company will be managed so as to retain its VCT status, there is no guarantee that such status
will be maintained. Further details of the taxation implications of an investment in the Company are set out in Appendix III of
this Document. However, if the Company fails to meet the qualifying requirements for a VCT, this could result in:
(i)
(ii)
(iii)
(iv)
(v)
Investors being required to repay the 30 per cent. income tax relief received on subscription for New Ordinary Shares;
the loss of income tax relief on dividends paid (or subsequently payable) to Investors;
the loss of tax relief previously obtained in relation to corporation tax on capital gains made by the Company;
a liability to tax on capital gains on any disposal of New Ordinary Shares; and
the loss of the Company’s listing on the Official List and the ability of its Ordinary Shares to be traded on the London
Stock Exchange.
• The levels and bases of reliefs from taxation may change. The tax reliefs referred to in this Document are those currently
available and their value depends on the individual circumstances of Investors.
• An investment in a VCT is free from tax on capital gains. Consequently, any realised losses on disposal of New Ordinary Shares
cannot be used to create an allowable loss for capital gains tax purposes.
• Although the New Ordinary Shares will be listed on the Official List and traded on the London Stock Exchange, it is unlikely
that a liquid market in the New Ordinary Shares will develop and there may never be two competitive market makers. It may,
therefore, prove difficult for Shareholders to sell their New Ordinary Shares.
• Some of the Company’s investments may be in companies whose securities are not publicly traded or freely marketable and
may, therefore, be difficult to realise.
• In order to comply with VCT legislation, the VCT Qualifying Companies, in which the Company invests, must have gross assets
of not more than £7 million prior to investment and £8 million after investment. Such companies generally have a higher risk
profile than larger companies.
• There is no guarantee that the Company’s objectives will be met or that suitable investment opportunities will be available.
• The Company’s ability to obtain maximum value from its investments (for example, through sale) may be limited by the
requirements imposed in order to maintain the VCT tax status of the Company (such as the obligation to have at least 70 per
cent. by value of its investments in VCT Qualifying Investments).
• Investors should be aware that the sale of New Ordinary Shares within five years of their subscription will require repayment
of the 30 per cent. income tax relief available upon investment to the extent of the amount received from such sale.Accordingly,
investment in the Company is not suitable as a short or medium term investment.
• An Investor’s initial income tax relief will be withdrawn if a Shareholder, or any person associated with the Shareholder, takes
out a loan which would not have been made, or would not have been made on the same terms, save for the acquisition of
New Ordinary Shares.
• The past performance of the Company and/or investments managed by the Manager should not be regarded as an indication
of the future performance of the Company.
• Changes in legislation concerning VCTs in general,VCT Qualifying Investments and qualifying trades in particular, may restrict or
adversely affect the ability of the Company to meet its objectives and/or reduce the level of returns which would otherwise
have been achievable.
• The value of New Ordinary Shares may go down as well as up and Shareholder(s) may not receive back the full amount
invested.
4 4

APPENDIX I
BACKGROUND INFORMATION
This Document provides details of an Offer for Subscription for up to 158,250 New Ordinary Shares in Arc
Growth Company VCT plc.
1. Background Information on the Company
Current Trading and Investment Progress
The Company’s preliminary results for the period to 28 February 2006 were announced on 27 June 2006 and copies of the
announcement are available from Arc (see page 1 for contact details). At 28 February 2006, the VCT had made two investments.
The net asset value per ordinary share of 94.63p primarily reflects the VCT’s cash balances after the fundraising costs of 5.5 per
cent. and running costs which are capped at the rate of 3.6 per cent. per annum.
Arc Growth Company VCT plc was launched in February 2005 and was admitted to the Official List on 30 June 2005, and has
raised approximately £1.65 million by way of offers for subscription.The Company is currently listed on the Official List and traded
on the London Stock Exchange.
Investment Strategy
The Company intends to invest predominantly in unquoted companies which have the following characteristics:
• Early stage businesses and start up companies which are seeking development capital or funding for management buy-outs;
• A strong, balanced and well motivated management team; and
• Investments where Arc can typically act as a lead investor and have an active involvement in the business through a board
position.
2. Summary of Investments and Performance to date
Arc Growth Company VCT plc has invested in six companies to date, and intends to invest in smaller private companies with
good growth prospects.
The investments made by Arc Growth Company VCT plc so far are as follows:
Arc Growth Company VCT plc made its first investment of £50,000 in Talisker, acquiring an interest of approximately 1 per cent.
of the company.Talisker is an early stage pharmaceutical company specialising in the central nervous system market which intends
to operate in drug licensing and development.
Talisker received a formal offer on 1 July 2006 from EUSA, a US based pharmaceutical Company. EUSA will acquire 100 per cent.
of the share capital of Talisker.The return is estimated to be over 100 per cent. £95,585 will payable to Arc Growth Company
VCT on completion and £6,996 will be held in escrow for 12 months.
The second investment of £60,000 was made by Arc Growth Company VCT plc on 8 February 2006 in B Fresh by way of a
£54,000 convertible loan at an interest rate of 7 per cent. per annum plus an investment of £6,000 for 0.81 per cent. of the
company. B Fresh is a vending machine company which sells miniature toiletries in gyms and budget hotels.
CV plc acquired 100 per cent. of B Fresh on the 23 June 2006 in consideration for the issue of 32,200,000 shares of 0.1p. In
exchange B Fresh shareholders received 31.25 per cent. of shares in CV plc.The Directors believe that this will benefit B Fresh
as it has now joined a larger vending group.
5

A third investment of £100,000 was made by Arc Growth Company VCT plc on 5 June in Simultane Limited for an interest of
14.3 per cent. of the issued share capital of that company. Simultane is a Brighton based clothing store and fashion label. The
company’s wholesale label ‘Arnett for Simultane’ is available at Liberty as well as other outlets throughout the UK and Ireland.
The fourth investment of £149,600 was made by Arc Growth Company VCT plc on 14 June 2006 in Traction Technology Holdings
plc. Traction Technology designs, develops and manufactures environmentally friendly vehicle propulsion systems utilising both
hybrid and all-electric technology.Traction Technology has installed and tested its medium duty system in an Optare Solo bus on
the London Transport Bus Cycle which later became the first vehicle to be awarded the Government’s Low Carbon Bus status.
The fifth investment of £158,000 was made by Arc Growth Company VCT plc on 23 June 2006 in Consolidated Vending plc for
an interest of 6.0 per cent. of the issued share capital of the company. CV plc was established by Arc as an acquisition vehicle to
acquire established vending businesses CV plc acquired, SNAP which provides instant photographs for passports, driving licences
and photo ID cards. On 23 June 2006 B Fresh was acquired by CV plc.This transaction has led to the shares in B Fresh being
exchanged for shares in CV plc.The board of CV plc intends to seek an admission to trading on AIM in due course.
The sixth investment of £100,000 was made by Arc Growth Company VCT plc on 4 June 2006 in Arc plc for an interest of 2.78
per cent. of the issued share capital of the Company and at a price of 5.85p per share. Arc plc was established in 1999 and is a
fund management group, combining fund management and corporate finance, and specialises in funds which invest in early stage
private companies. Arc plc’s entire share capital was listed on AIM on 11 June 2006.The Company’s investment was made at a
ten per cent. discount to Arc plc’s listing price of 6.5p. Renwick Haddow is a director and shareholder of Arc plc. Richard
Hargreaves and Kevin Morley are also shareholders of Arc Plc.
The directors of Arc Growth Company VCT plc are actively pursuing further suitable VCT qualifying investments.
6

3. Investment Management
The Board consists of three directors, two of whom are independent of Arc.The Board has overall responsibility for the Company
and its investment policies and has appointed Arc as the investment manager. Arc is assisted by the four members of the Investment
Committee.
The Board
Richard Hargreaves, 60
Non-Executive Chairman
Richard has invested in smaller companies since 1973 and is a former Chairman of the British Venture Capital Association (1989-
1990). In 1982, after nearly ten years working at 3i, he founded Baronsmead plc, which launched one of the first VCTs, Baronsmead
VCT plc in 1995. Following the sale of Baronsmead to Ivory & Sime (now F&C Asset Management plc) that year, his team was
responsible for all Ivory & Sime’s unquoted investment activities.
On leaving Ivory & Sime in 1997, he consulted in the small companies’ field before co-founding Classic Fund Management Limited,
where he was involved in managing four VCTs (now merged and called Chrysalis VCT plc) until May 2004. He has also been a nonexecutive
director of Elderstreet VCT plc and chairman of Pennine Downing AIM VCT plc. Richard now actively manages his own
portfolio of unquoted investments and has co-founded a “business angels” investment club. He has a BA in Electrical Sciences from
Queens’ College in Cambridge and an M.Sc. and PhD in Electrical Materials Science from Imperial College, London.
Renwick Haddow, 37
Non-Executive Director
Renwick is a director of Arc Fund Management Limited which manages EIS and VCT Funds as well as The Arc European Property
Fund. Renwick is a qualified accountant and holds the Investment Management Certificate (the qualification for investment
professionals overseen by the UK Society of Investment Professionals). He sits on the Boards of a number of small companies
including six AIM listed companies. Renwick has been instrumental in identifying and transacting over 40 investments in the last four
years in pre-IPO companies.
Professor Kevin Morley, 56
Non-Executive Director
Kevin was a member of the Advisory Board of Alchemy Partners from its foundation in 1996 until November 2004. He began his
career in marketing at the Ford Motor Company in 1977 before moving to the Rover Group as marketing director in 1986. Kevin
was appointed managing director of Rover Cars in 1990, a position he held until 1992, when he left to start his own marketing
consultancy which he sold to Interpublic Group in 1995. Kevin is currently chairman of a number of private companies. He also owns
several marketing agencies and continues to work as a consultant on marketing issues. Kevin Morley has an MBA from Aston
University Business School, is an honorary professor at Warwick University and a Freeman of the City of London.
The Investment Committee
Simon Smith, 44
Chairman of the Investment Committee
Simon is the Chairman of the Investment Committee. Simon has been a fund manager managing retail funds since 1991, his
experience covers quoted and unquoted companies. In January 2001, Simon joined Springboard plc, an early stage venture capital
company that is quoted on AIM and is a member of the British Venture Capital Association (“BVCA”). He was appointed Chief
7

Executive of Springboard plc in December 2003, a position he held until leaving in October 2004. Simon was responsible for the
management of its portfolio that focused in making investments between £250,000 and £1million in early stage businesses and
acted as managing investor or lead investor on all deals.The investment criteria used by Springboard plc for those investments
closely resembles those of the Company, thus Simon’s experience will be invaluable to the Investment Manager when making
investment decisions in respect of the Company’s funds.
In the period from March 1991 to December 2000 Simon was a director of Albert E Sharp Limited and set up and ran the AES
Smaller Companies Unit Trust, a fund that invested in smaller fully listed quoted companies as well as unquoted businesses traded
on the AIM and OFEX markets. Simon is currently an investment director of Nova Capital Management Limited, a secondary
buyer of venture capital portfolios. Simon is also the managing director of Pathbrae Ventures Limited, a business formed to work
with experienced Chairmen and CEOs to acquire small and medium sized businesses.
Linnet Cotterill, 40
Linnet is a fund manager at Arc Fund Management Limited having held a similar position in other companies for over 15 years.
She started her career with N.M. Rothschild & Sons Limited in 1986, where she managed various pension funds covering UK
equities. Linnet later managed the Govett UK Smaller Companies Fund and was co-manager of the Govett Strategic Investment
Trust plc. Most recently she worked as fund manager at Morley Fund Management Limited, where she specialised in Ethical Retail
Funds and US equities. Linnet graduated from Cambridge University in 1986 with a BA and MA in Biotechnology.
Renwick Haddow, see above.
Christopher Rowe, 61
Christopher is the Chairman of Arc Fund Management Holdings plc and has some 36 years experience in equity markets as a
stockbroker originally with Bain & Co. and latterly with Scrimgeour Vickers Limited. Christopher helped to found Arc Fund
Management Limited which originally provided institutional broking services. He has established a successful track record of raising
capital for small to mid-cap international listed companies. He was co-founder of a global equity hedge fund, which was sold in
2001.
4. Current VCT Tax Relief and increase in VCT Investment limit
For the 2006/2007 tax year the Chancellor introduced 30 per cent. income tax relief for subscriptions to VCTs. For an Investor
with sufficient tax liabilities, this means that for each £1 invested in New Ordinary Shares in the Company, the net cost is only
70p.
The principal tax reliefs, which are available on a maximum investment of £200,000 per individual (across all VCT investments) in
the tax year 2006/07, are set out below:
• Income tax relief at 30 per cent. of the amount subscribed provided that the VCT shares are held for at least five years. It
is not necessary for an Investor’s marginal tax rate to be 30 per cent. in order for the Investor to obtain 30 per cent. income
tax relief of the amount subscribed. Relief will be restricted to the amount which reduces the Investor’s income tax liability
to nil;
• Tax-free dividends and capital distributions from a VCT; and
• Capital gains tax exemption on the disposal of ordinary shares in a VCT. Further details of tax reliefs are provided in
Appendix III on pages 13 to 15.
The above is only a brief summary of the law concerning the tax position of Investors in VCTs and is based
on Arc’s understanding of current law and practice in relation to VCTs. Potential Investors are recommended
to consult their own independent professional adviser as to the taxation consequences of their investment in
a VCT.
8

5. Offer Timetable and Statistics
Minimum individual investment £2,000
Maximum number of New Ordinary Shares to be issued under the Offer 158,250
Subscription price per New Share £1.00
Closing Date – 2006/07 Offer (unless fully subscribed earlier) 11 August 2006
The Terms and Conditions of Application, which should be read in full, are set out in Appendix V and in the Notes on the
Application Form, are included at the back of this Document, together with an Application Form, which should be sent
or hand delivered to Woodside Corporate Services, 21-22 Grosvenor Street, London W1K 4QJ.
9

APPENDIX II
GENERAL INFORMATION
Details of Offer for
Subscription
It is proposed to allot up to 158,250 New Shares pursuant
to the Offer for Subscription.The New Ordinary Shares will
be offered at £1.00 per share payable in full, by cheque or
bankers’ draft, on application.The Offer for Subscription has
not been underwritten.
The Offer for Subscription will be open from 11 July 2006
until the earlier of noon on 11 August 2006 and the date on
which the maximum subscription is reached.
The terms and condition of the Offer for Subscription are
set out in Appendix V of this document and an Application
Form, together with details of the application procedure, is
set out at the end of this document.
Application will be made to the UK Listing Authority for the
New Ordinary Shares to be admitted to the Official List.
Application will also be made to the London Stock Exchange
for the New Shares to be admitted to trading on its main
market for listed securities.
The Directors will allot New Ordinary Shares in respect of
valid acceptances received on the final business day of each
month from the opening of the Offer for Subscription and
on the day immediately following the closing of the Offer for
Subscription.
It is expected that Admission will become effective, and that
trading in all of the New Ordinary Shares to be issued in
respect of valid applications pursuant to the Offer for
Subscription will have commenced by no later than 11
August 2006 unless the offer for Subscription is closed
earlier in which case the final application for Admission will
take place as soon as practicable following the closing date.
The New Ordinary Shares will rank pari passu with the
existing Ordinary Shares in all respects, including the rights
to all dividends declared, made or paid after the date of their
issue.
In the event that the Offer for Subscription is fully
subscribed, Existing Shareholders’ relative holdings in the
Company will be diluted by less than 10 per cent.
Management Fees
Arc has been appointed as the manager of the aggregate
funds raised by the Company and available for investment.
Under the terms of the management agreement, Arc has
been appointed to act as manager for a minimum of 3 years
from 30 June 2005, after which time the management
agreement may be terminated by the giving of 12 months
notice by either party.
Arc receives a fee equivalent to a maximum of 2.5 per cent.
of the net asset value of the Company as published every six
months, plus VAT, per annum, payable quarterly in advance.
The total annual costs of the Company in respect of
ordinary activities will not exceed 3.6 per cent. of the value
of the fund and the fee receivable by Arc will be reduced to
ensure this limit is not breached. In the event that total costs
exceed 3.6 per cent., the excess will be met by the
Investment Manager.
Under the management agreement, Arc will receive
commission equal to 5.5 per cent. of the proceeds of the
Offer for Subscription and shall indemnify the Company in
respect of all costs connected with the Offer for
Subscription.
Performance Related Incentive
Fee
It is VCT practice to reward exceptional performance by the
investment manager, thus aligning the interests of the
manager with those of the shareholders. Arc is entitled to a
performance fee of up to 17 per cent. of all distributions to
investors over £1 per share and the independent nonexecutive
directors of the Company will each be entitled to
a performance fee, payable by the Company, of 1.5 per cent.
of all distributions to investors over £1 per share.
Charging of Expenses
75 per cent. of management fees will be charged to capital;
the balance will be charged to revenue.All other operational
costs will be charged to revenue. All other operational costs
will be charged to revenue.
Intermediary Commission
Authorised financial intermediaries will be entitled to receive
an initial, commission based on the amount invested by their
clients.Additionally, provided that the intermediary continues
to act for the client and the client continues to hold
Ordinary Shares, intermediaries will be paid an annual trail
commission. Arc intends to offer authorised financial
intermediaries an initial commission of 3.0 per cent. and a
trail commission of 0.33 per cent. per annum for a maximum
10

of three years, giving a maximum commission payable of 4
per cent. of the amount invested. In addition, the Investment
Manager intends to offer authorised financial intermediaries
one quarter of the performance fee it is entitled to, in
respect of distributions over £1 per share to investors for
whom the intermediary acts.
All commissions and performance fees to authorised
financial intermediaries are payable by Arc and will not be
charged to the Company.
Minimum and Maximum
Investment
The minimum subscription level under the Offer for
Subscription will be £2,000 per applicant. Applications in
excess of £2,000 maybe made for any higher amount in
multiples of £1,000, subject to availability (up to £158,250).
Custody Arrangements
Woodside Corporate Services will act as custodian of the
Company’s quoted assets, and in that capacity is responsible
for ensuring safe custody and dealing with settlement
arrangements. Woodside Secretaries Limited is also
responsible for ensuring the safe custody of cash and for the
safe custody and dealing with settlement arrrangements for
unquoted investments.
Woodside Corporate Services is the trading name of
Woodside Secretaries Limited which is a company
incorporated in England and Wales as a limited company
under the Companies Act 1985 on 23 June 1988 with
number 02270497. The registered office is at 61 Woodside
Road, New Malden, Surrey KT3 3AW and the principal place
of business is 21-22 Grosvenor Street, London W1K 4QJ.
The telephone number of the principal place of business is
020 7495 1500.
Dividend and Distribution
Policy
All distributions from qualifying VCTs are free from income
tax to Qualifying Subscribers.
intend to adopt a policy of distributing, over time, a
substantial proportion of cash returns from the portfolio as
dividends, includng realised capital gains. The timing and
amount of realised profits cannot be predicted and the
Directors intend to pay dividends at a rate they believe will
be sustainable, taking into account the level of cash returns
achieved from the portfolio and prevailing market
conditions.
Life of the Fund, Borrowing
Policy and Annual Accounts
It is not intended that the Company shall have a limited life
but the Board will put a proposal for the continuation of the
Company as a venture capital trust to shareholders at the
Company’s annual general meeting in 2011 and thereafter at
annual intervals.
The Ordinary Shares are traded and the New Ordinary
Shares will be traded on the London Stock Exchange and
may be sold at any time. Qualifying Subscribers should
however note that they will lose income tax relief in whole
or in part if the New Ordinary Shares (or any existing
Ordinary Shares) are sold and have been held for less than
three years.
The Company can borrow an amount up to 15 per cent. of
its adjusted capital and reserves. This power has been
included in ICTA to provide flexibility should unforeseen
circumstances arise in the future. There is no current
intention to use these borrowing powers.
The Company’s annual report and accounts will be made up
to 28 February in each year. Shareholders will also receive
unaudited half-year accounts made up to 31 August.
The Directors consider that the Company should have the
ability to purchase its own shares, in order to assist liquidity
in the market from time to time.
Special resolutions were passed at an extraordinary general
meeting of the Company held on 11 February 2005 granting
the Company authority to make purchases of up to 14.99
per cent. of the Ordinary Shares in issue from not more than
5 per cent. above the average of the market values of
Ordinary Shares for the ten business days before the
Ordinary Shares are contracted to be purchased.
The Company intends to maximise dividends payable from
investment income and capital. When the portfolio is more
fully invested and as capital profits are realised, the Directors
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Valuation Policy
The value of the Company’s portfolio will be regularly
updated and the net asset value of the Company will be
determined twice a year, in connectin with the publication of
the audited full year and unaudited interim accounts.The net
asset value of the Company will be communicated to
Shareholders by way of an announcement through a UK RIS.
The audited net asset value as at 28 February 2006 (the latest
date for which the net asset value has been announced prior
to the date of this document) was 94.63p per Ordinary Share.
In the events of any suspension of trading in publicly quoted
investments, their valuation will be held at the suspended
price and a view will be taken with consideration to best
market practice and information from advisors. Should the
determination of net asset value differ from that set out
above or any of the valuations of investments held by the
Company be suspended or materially changed, then this will
be communicated to Shareholders via an announcement on
a UK RIS.
VCT Status Monitoring
Rosenblatts Solicitors, have been retained to monitor the
status of the Company’s investments. In particular they will
provide the board with an annual report on the investments
in terms of the various VCT requirements with which the
Company must comply. In respect of any breach of the VCT
requirements, the Company, together with Rosenblatts
Solicitors, will report directly and immediately to HM
Revenue & Customs to rectify the breach and disclose the
same to the Shareholders.
Taxation and HM Revenue &
Customs Approval
The Directors intend to continue to conduct the affairs of
the Company so that it satisfies the conditions for approval
as a VCT and that such approval will be maintained. HM
Revenue & Customs granted the Company provisional
approval under Section 842AA ICTA as a VCT when the
Company launched and the Company has continued to
meet the requirements for maintaining approval since that
date. The Company intends to continue to comply with
Section 842AA ICTA and has retained Spofforths to advise
it on VCT taxation matters.
Co-Investment Policy
All funds managed by Arc are given an opportunity to invest
in companies consistent with those funds’ investment
objectives. In appropriate circumstances, therefore, the
Company will co-invest with existing funds managed by Arc.
Where Arc is given the opportunity to co-invest in
companies with other Arc manged funds, the percentage of
the total investment offered to Arc will be pro rated on the
basis of the net asset values of the funds investing, although
the Directors may elect to invest a greater or lesser figure at
their discretion.
Corporate Governance
The Directors support the principles of the Combined
Code on Corporate Goverance (the Code) issued in July
2003, annexed to the Listing Rules of the UK Listing
Authority.The Board meets at least four times each year and
on other occasions as required. The Board as a whole is
responsible for the appointment of its own members and
professional adviers. Nominations, audit and remuneration
committees have not been appointed as the Directors
consider the Board is too small. The Board will carefully
review the proposed and actual allocation of investments by
the Investment Manager between the Company and its
other managed funds, in accordance with established
guidelines. Due to the small size of the Board and the lack of
complex business, none of the directors has been nominated
as a senior independent director.The articles of Association
of the Company (the Articles) require that all Directors be
subject to re-election procedures by rotation at the Annual
General Meeting. All directors, in accordance with the Code,
will subject themselves to re-election at least every three
years.
All Directors have access to the advice and services of the
Company Secretary and are able to take independent advice
in futherance of their duties, if necessary.
12

APPENDIX III
TAXATION
1. Taxation and Approval of a
VCT
VCTs are exempt from corporation tax on chargeable gains.
There is no restriction on the distribution of realised capital
gains by a VCT, subject to the requirements of company law.
The Company will be subject to corporation tax on its
income (excluding dividends received from UK companies)
after deduction of attributable expenses.
To obtain VCT status a company must be approved by HM
Revenue & Customs as a VCT. HM Revenue & Customs has
granted the Company provisional approval under Section
842AA of ICTA as a VCT.
To maintain approval, the conditions summarised below have
to be satisfied in relation to the accounting period of the
company which is current when the application for approval
is made, or in any event must be satisfied by no later than the
beginning of the VCT’s next accounting period and must
continue to be satisfied throughout the life of the VCT:
(i)
(ii)
(iii)
the VCT’s income must have been derived wholly or
mainly from shares and securities (in the case of
securities issued by a company, meaning loans with a
five-year or greater maturity period);
no holding in a company (other than a VCT or a
company which would, if its shares were listed, qualify
as a VCT) by the VCT may represent more than 15 per
cent., by value, of the VCT’s total investments at the
time of investment; and
the VCT must not have retained more than 15 per
cent. of the income derived from shares or securities in
any accounting period.
The VCT must not be a close company. Its ordinary share
capital must be quoted on the London Stock Exchange by
no later than the beginning of the accounting period
following that in which the application for approval is made.
The following conditions also have to be satisfied by no later
than the beginning of the VCT’s accounting period which
commences no later than three years after provisional
approval takes effect and must continue to be satisfied
throughout the life of the VCT:
(i)
(ii)
at least 70 per cent., by value, of its investments is
represented by shares or securities comprising
qualifying investments; and
at least 30 per cent., by value, of its qualifying
investments is represented by holdings of ordinary
shares which carry no present or future preferential
rights to dividends, return of capital or any redemption
rights.
On a second or subsequent issue by an approved VCT, the
money raised is disregarded for the purposes of the
accounting period of the further issue and late accounting
periods ending no more than three years after the making of
the further issue.
“Qualifying investments” comprise shares or securities
(including loans with a five year or greater maturity period
but excluding guaranteed loans and securities) issued by
unquoted trading companies which exist wholly or mainly
for the purpose of carrying on one or more qualifying trades.
The trade must be carried on by, or be intended to be
carried on by, the investee company or a qualifying subsidiary
at the time of the issue of the shares or securities to the VCT
(and by such company or by any other subsidiary in which
the investee company has not less than a 90 per cent.
interest at all times thereafter).A company intending to carry
on a qualifying trade must begin to trade within two years of
the issue of shares or securities to the VCT and continue it
thereafter. The definition of a qualifying trade excludes
dealing in property, shares, securities, commodities or futures.
It also excludes banking, insurance, receiving royalties or
licence fees in certain circumstances, leasing, the provision of
legal and accounting services, farming and market gardening,
forestry and timber production, property development and
operating or managing hotels, guest houses, nursing and
residential care homes. The funds raised by the investment
must be used for the purposes of the qualifying trade within
certain time limits.
Qualifying investments are limited to investments of up to £1
million per investee company in any one tax year or in any
six month period straddling two tax years. A qualifying
investment can also be made in a company which is a parent
company of a trading group where the activities of the
group, taken as a whole, consist of carrying on one or more
qualifying trades, one of which is carried on wholly or mainly
in the United Kingdom. The subsidiary carrying on the
qualifying trade in question must be at least 90 per cent.
owned by the parent company.The investee company’s gross
assets (or those of a group, if applicable) must not exceed £7
million immediately prior to the investment. Neither the VCT
nor any other company may control the investee company.
At least 10 per cent. of the VCT’s total investment in the
13

investee company must be in ordinary non-preferential
shares.
Companies whose shares are traded on AIM are treated as
unquoted companies for the purposes of calculating
qualifying investments. Shares in an unquoted company
which subsequently become listed may still be regarded as a
qualifying investment for a further five years following listing,
provided all other conditions are met.
2. Tax Reliefs for Individual
Investors Resident in the
UK
Individuals who subscribe for new ordinary shares must be
aged 18 or over to qualify for the tax reliefs outlined below.
Relief from income tax
An investor subscribing up to £200,000 in any tax year for
new ordinary shares in a VCT will be entitled to claim
income tax relief on the investment, in the year in which the
investment is made, at the rate of 30 per cent., although this
relief will be withdrawn if either the shares are sold within
five years or an investor takes out a loan which would not
have been made, or would not have been made on the same
terms, save for the acquisition of such shares. Relief is
restricted to the amount which reduces the investor’s
income tax liability to nil. Tax credits on dividends are
notional and cannot be repaid, and therefore Investors
should take this into account when calculating the value of
the income tax relief.
Dividend relief
An investor who subscribes for or acquires ordinary shares
in a VCT will not be liable for UK income tax on dividends
paid by the VCT in respect of investments of up to a
maximum of £200,000 in any one tax year. Dividends carry
a tax credit at the rate of one-ninth of the net dividend
which is not repayable and which cannot be utilised in any
other way. The income received by the VCT will usually
constitute either interest (on which the VCT may be subject
to tax) or a dividend from a UK company (on which the VCT
would not be subject to tax).The VCT’s income, reduced by
the payment of tax (if applicable), can then be distributed
tax- free to investors who benefit from this dividend relief.
Capital gains tax relief
A disposal by an individual investor of his shares in a VCT will
give rise to neither a chargeable gain nor an allowable loss
for the purposes of UK capital gains tax. This relief is also
limited to disposals of shares acquired within the £200,000
limit described above.
Loss of tax reliefs
(i)
(ii)
If a company which has been granted approval or
provisional approval as a VCT subsequently fails to
comply with the conditions for approval, VCT status
may be withdrawn or treated as never having been
given.The exemptions from corporation tax on capital
gains will not apply to any gain realised after the time
from which full approval is lost.
For investors, the withdrawal of VCT status may
(depending upon the timing of such withdrawal) result
in:
• repayment of the 30 per cent. income tax relief
on subscription for new VCT shares;
• income tax becoming payable on payments of
dividends by the company; and
• a liability to tax on capital gains being suffered in
the normal way on the disposal of shares in the
company, except that any part of the gain
attributable to the period for which the VCT was
approved would be exempt.
3. Consequences of an
investor dying or a transfer of
shares between spouses
(i)
Initial income tax
If an investor dies within three years of making an
investment in a VCT, the transfer of shares on death is
not treated as a disposal and, therefore, the initial
income tax relief is not withdrawn. However, the shares
will become part of the deceased’s estate for
inheritance tax purposes. The executors of the estate
are free to deal with the VCT shares in any way they
see fit.
14

(ii) Tax implications for the beneficiary
Provided a number of conditions are met, the
beneficiary of any VCT shares will be entitled to taxfree
dividends and will not pay capital gains tax on any
disposal, but will not be entitled to any initial income
tax relief.
(iii) Transfer of shares between spouses
A transfer of shares in a VCT between spouses living
together is not deemed to be a disposal and therefore
all tax reliefs will be retained.
4. General
(i)
Investors who are not resident in the UK
Non-resident investors, or investors who may become
non-resident, should seek their own professional advice
as to the consequences of making an investment in the
Company, as they may be subject to tax in other
jurisdictions.
(v) VCT Regulations
The VCT Regulations came into force on 17 September
2004. Under the VCT Regulations, monies raised by any
further issue of shares by an existing VCT must be
applied by that VCT for the purposes of investment
which meets the 70 per cent. and 30 per cent. tests
described in paragraph 1 above. These tests will be
deemed not to have been met if any of the money
raised (except for amounts which HM Revenue &
Customs agrees are insignificant in the context of the
whole issued ordinary share capital of the VCT) is used
by the VCT to purchase its own shares.
The above is only a summary of the law concerning
the tax position of VCTs and individual investors in
VCTs and is based on the understanding of current
law and practice in relation to VCTs. Potential
investors are recommended to consult an
independent professional adviser as to the taxation
consequences of their investing in a VCT.
(ii) Non-availability of relief
VCT relief is only available for individuals over 18 years
of age at the time of issue of shares. It is not available
where the issue is part of tax avoidance arrangements.
Shares must not be issued to nominees of the beneficial
owner.
(iii) Stamp duty and stamp duty reserve tax
No stamp duty or (unless shares in a VCT are issued to
a nominee for a clearing system or a provider of
depositary receipts) stamp duty reserve tax will be
payable on the issue of such shares.The transfer on the
sale of shares would normally be subject to ad valorem
stamp duty or (if an unconditional agreement to
transfer such shares is not completed by a duly
stamped transfer within two months) stamp duty
reserve tax generally, in each case at the rate of 50p for
every £100 or part of £100 of the consideration paid.
Such duties would be payable by a person who
purchases such shares from the original subscriber.
(iv) Purchases in the market after listing
Any subsequent purchaser of existing shares, as
opposed to a subscriber for New Ordinary Shares, will
not qualify for income tax relief on investment.
15

APPENDIX IV
DEFINITIONS
In this Document the following words and expressions shall, unless the context requires otherwise, have the following meanings:
“AIM”
“Applicant”
“Application”
“Application Amount”
“Application Form”
“Arc” or “Investment Manager”
“Arc plc”
“Articles”
AIM, a market operated by the London Stock Exchange, formerly known as the
Alternative Investment Market;
an investor whose name appears in an Application Form;
offer to subscribe for New Ordinary Shares under the Offer made by an
Applicant by completing an Application Form;
amount (in pounds sterling) due from an Applicant in respect of his Application
or such part (if any) of his Application as is accepted;
application form contained at the end of this Document;
Arc Fund Management Limited, registered in England and Wales under number
03701705;
Arc Fund Management Holdings plc, registered in England and Wales under
number 05535356;
Articles of Association of the Company;
“B Fresh” B Fresh Limited;
“BVCA”
“CGT”
“Company”
“CV plc”
“Directors” or “Board”
“Document”
“EUSA”
“FSA”
“ICTA”
“Investor”
“Listed”
“London Stock Exchange”
British Venture Capital Association;
capital gains tax;
Arc Growth Company VCT plc;
Consolidated Vending plc;
Directors of the Company as at the date of this Document;
this document, which describes the Offer in full;
EUSA Pharma Inc;
Financial Services Authority;
Income and Corporation Taxes Act 1988 (as amended);
individual Investor, who is aged 18 or over, investing no more than £400,000 in
VCTs in any one tax year;
admitted to the Official List of the UK Listing Authority and to the trading on
London Stock Exchange’s main market for listed securities;
London Stock Exchange plc;
“Net Assets” gross assets less all liabilities (excluding contingent liabilities) of the Company ;
“New Ordinary Shares”
“Offer Price”
“Offer” or “Offer for Subscription”
“Official List”
up to 158,250 New Ordinary Shares available for subscription pursuant to the
Offer the price paid by Applicants for each New Share issued under the Offer
being £1.00 per New Share;
£1 per Ordinary Share;
2006/07 Offer for subscription of New Ordinary Shares pursuant to the terms
of this Document;
official list of the UK Listing Authority;
16

“Ordinary Shares”
“Shareholder(s)”
“Simultane”
“Talisker”
ordinary shares of £0.10 each in the capital of the Company;
holder(s) of Ordinary Shares;
Simultane Limited;
Talisker Pharma Limited;
“Terms and Conditions” terms and conditions of Application as set out in Appendix V;
“Traction Technology”
“UK Listing Authority”
“VCT Qualifying Company”
“VCT Qualifying Investment”
“Venture Capital Trust” or “VCT”
Traction Technology Holdings plc;
Financial Services Authority acting in its capacity as the competent authority for
the purposes of the Financial Services and Markets Act 2000;
unquoted Company carrying on a qualifying trade wholly or mainly in the United
Kingdom and which satisfies certain other conditions as defined in schedule 28B
of ICTA;
Investments in unquoted Company which comprises a qualifying holding for VCT
as defined in schedule 28B of ICTA;
a venture capital trust as defined in section 842AA of the Income and
Corporation Taxes Act 1988.
17

APPENDIX V
TERMS AND CONDITIONS OF
APPLICATION
1. Save where the context otherwise requires, words and expressions
defined in this document have the same meanings when used in the
Application Form and explanatory notes in relation thereto. The
section headed “Application procedure” forms part of these Terms and
Conditions of Application.
2. The contract created by the acceptance of an Application under the
Offer for Subscription will be conditional on Admission becoming
effective.
3. The right is reserved to reject any Application or to accept in part only.
If any Application is not accepted or if any contract created by
acceptance does not become unconditional, the application monies or,
as the case may be, the balance paid on application will be returned
without interest by returning each relevant Applicant’s cheque or
banker’s draft or by crossed cheque (for the full amount, or part only
if the Application is accepted in part only), in favour of the Applicant,
through the post at the risk of the Applicant. In the meantime,
application monies will be retained by Woodside Corporate Services
or the Company in a separate account.
4. The right is reserved by the Company to present all cheques and
bankers’ drafts for payment on receipt and to retain share certificates
and application monies pending clearance of successful Applicants’
cheques and bankers’ drafts.
5. The Company may treat Applications as valid and binding even if not
made in all respects in accordance with the prescribed instructions and
the Company may, at its discretion, accept an Application in respect of
which payment is not received by the Company prior to the closing of
the Offer for Subscription.
6. By completing and delivering an Application Form, you (the Applicant):
(i)
(ii)
(iIi)
offer to subscribe for the number of New Ordinary Shares
specified in your Application Form (or any smaller numbers of
shares for which your Application is accepted) at the Offer Price
on the terms of and subject to this Document, including these
Terms and Conditions, and subject to the Memorandum and
Articles of the Company;
agree, in consideration of the Company agreeing that it will not
on or prior to the closing date of the Offer for Subscription,
issue, allot or offer any Ordinary Shares to any person other
than by means of the procedures referred to in this Document,
that your Application may not be revoked and that this
paragraph shall constitute a collateral contract between you and
the Company which will become binding upon despatch by post
or by delivery by hand of your Application Form to Woodside
Corporate Services;
agree and warrant that your cheque or banker’s draft may be
presented for payment on receipt and will be honoured on first
presentation and agree that if it is not so honoured you will not
be entitled to receive a certificate in respect of the New
Ordinary Shares until you make payment in cleared funds for
such New Ordinary Shares and such payment is accepted by the
Company in its absolute discretion (which acceptance shall be
(iv)
(v)
(vi)
(vii)
(viii)
on the basis that you indemnify it, and Woodside Corporate
Services against all costs, damages, losses, expenses and liabilities
arising out of or in connection with the failure of your
remittance to be honoured on first presentation) and you agree
that, at any time prior to the unconditional acceptance by the
Company of such late payment in respect of such shares, the
Company may (without prejudice to its other rights) avoid the
agreement to subscribe such New Ordinary Shares and may
issue or allot such New Ordinary Shares to some other person,
in which case you will not be entitled to any payment in respect
of such New Ordinary Shares, other than the refund to you, at
your risk, of the proceeds (if any) of the cheque or banker’s draft
accompanying your Application, without interest;
agree that, in respect of those New Ordinary Shares for which
your Application has been received and is not rejected, your
Application may be accepted at the election of the Company
either by notification to the London Stock Exchange of the basis
of allocation or by notification of acceptance thereto to the
Woodside Corporate Services;
agree that any monies refundable to you may be retained by
Woodside Corporate Services pending clearance of your
remittance and any verification of identity which is, or which the
Company or Woodside Corporate Services may consider to be,
required for the purposes of the Money Laundering Regulations
2003 and that such monies will not bear interest;
authorise Woodside Corporate Services, your financial adviser
or whoever he directs, Park Circus Registrars Limited or the
Company to send share certificate(s) in respect of the number
of New Ordinary Shares for which your Application is accepted
and/or a crossed cheque for any monies returnable, by post at
your own risk, without interest, to your address set out in the
Application Form and to procure that your name is placed on
the register of members of the Company in respect of such
New Ordinary Shares;
agree that all Applications, acceptances of Applications and
contracts resulting therefrom shall be governed by and
construed in accordance with English law, and that you submit to
the jurisdiction of the English courts and agree that nothing shall
limit the right of the Company to bring any action, suit or
proceedings arising out of or in connection with any such
Applications, acceptances of Applications and contracts in any
other manner permitted by law or any court of competent
jurisdiction;
confirm that, in making such Application, you are not relying on
any information or representation in relation to the Company
other than the information contained in this Document and
accordingly you agree that no person responsible solely or
jointly for the Document or any part thereof or involved in the
preparation thereof shall have any liability for such information
or representation;
18
18

(ix)
(x)
(xi)
(xii)
(xiii)
(xiv)
(xv)
(xvi)
irrevocably authorise the Company, Woodside Corporate
Services, Park Circus Registrars Limited and/or Arc Fund
Management Limited or any person authorised by any of them,
as your agent, to do all things necessary to effect registration of
any New Ordinary Shares subscribed by or issued to you into
your name and authorise any representative of Park Circus
Registrars Limited to execute any document required therefor;
agree that, having had the opportunity to read this Document
you shall be deemed to have had notice of all information and
statements concerning the Company and the New Ordinary
Shares contained therein;
confirm that you have reviewed the restrictions contained in
paragraph 12 below and warrant that you are not a “US Person”
as defined in the United States Securities Act of 1933
(“Securities Act”) (as amended), nor a resident of Canada,
Australia or Japan and that you are not applying for any New
Ordinary Shares with a view to their offer, sale or delivery to or
for the benefit of any US Person or a resident of Canada,
Australia or Japan;
warrant that you are an individual aged 18 or over;
agree that all documents and cheques sent by post to, by or on
behalf of the Company or Woodside Corporate Services will be
sent at the risk of the person entitled thereto;
agree, on request by the Company, or Woodside Corporate
Services, on behalf of the Company, to disclose promptly in
writing to the Company, any information which the Company
may reasonably request in connection with your Application
including, without limitation, satisfactory evidence of identify to
ensure compliance with the Money Laundering Regulations
2003 and authorise the Company to disclose any information
relating to your Application as it considers appropriate;
where applicable, authorise the Company to make on your
behalf any claim to relief from income tax in respect of any
dividends paid by the Company;
declare that the Application Form has been completed to the
best of your knowledge and is accurate;
(xvii) undertake that you will notify the Company if you are not or
cease to be either a Qualifying Applicant or beneficially entitled
to the New Ordinary Shares;
(xviii) declare that a loan has not been made to you or any associate,
which would not have been made or not have been made on
the same terms, but for you offering to subscribe for, or
acquiring, New Ordinary Shares and that the New Ordinary
Shares are being acquired for bona fide commercial purposes
and not as part of a scheme or arrangement the main purpose
of which is the avoidance of tax. Obtaining tax reliefs given under
the VCT legislation contained in the Finance Act 1996 is not in
itself tax avoidance;
(xix)
agree that, in respect of those New Ordinary Shares for which
your application has been received and processed and not
rejected, acceptance of your application shall be constituted by
the Company instructing Park Circus Registrars Limited to enter
your name on the share register;
(xx)
(xxi)
warrant that, in connection with your application, you have
observed the laws of all requisite territories, obtained any
requisite governmental or other consents, complied with all
requisite formalities and paid any issue, transfer or other taxes
due in connection with your application in any territory and that
you have not taken any action which will or may result in the
Company, or Woodside Corporate Services acting in breach of
the regulatory or legal requirements of any territory in
connection with the Offer for Subscription or your application;
if the laws of any territory or jurisdiction outside the United
Kingdom are applicable to your application, warrant that you
have complied with all such laws and none of the Company, or
Woodside Corporate Services or any of their respective agents
will infringe any laws of any such territory or jurisdiction directly
or indirectly as a result or in consequence of any acceptance of
your application;
(xxii) agree that your Application Form is addressed to the Company;
and
(xxiii) warrant that if you sign the Application Form on behalf of
somebody else or yourself and another or others jointly or a
corporation you have the requisite power to make such
investments as well as the authority to do so and such person
will also be bound accordingly and will be deemed also to have
given the confirmations, warranties and undertakings contained
in these terms and conditions of application and undertake to
enclose a power of attorney or a copy thereof duly certified by
a solicitor with the Application Form.
7. This application is addressed to the Company.The rights and remedies
of the Company under these Terms and Conditions of Application are
in addition to any rights and remedies which would otherwise be
available to it, and the exercise or partial exercise of one will not
prevent the exercise of others.
8. The dates and times referred to in these Terms and Conditions of
Application may be altered by the Company.
9. Authorised financial advisers who, acting on behalf of their clients,
return valid Application Forms bearing their stamp and FSA number
will be entitled to commission on the amount payable in respect of the
New Ordinary Shares allocated for each such Application Form at the
rates specified in the paragraph headed “Intermediary Commission” in
Appendix II of this document. Authorised financial advisers may agree
to waive part or all of their initial commission in respect of an
application. If this is the case, then such application will be treated as an
application to apply for the number of New Ordinary Shares stated in
Section 2 of the Application Form together with a number of additional
New Ordinary Shares equivalent to the amount of commission waived
at £1.00 per share, which waived commission will be applied in paying
for such New Ordinary Shares.
Woodside Corporate Services or Park Circus Registrars Limited is
authorised to amend such Section 2 to include any such additional
New Ordinary Shares. Financial advisers should keep a record of
Application Forms submitted bearing their stamp to substantiate any
claim for their commission.
10. The section headed Notes on Application Form forms part of these
Terms and Conditions of Application.
19 19

11. No person receiving a copy of this Document or an Application Form
in any territory other than the U.K. may treat the same as constituting
an invitation or offer to him, nor should he in any event use such
Application Form unless, in the relevant territory, such an invitation or
offer could lawfully be made to him or such Application Form could
lawfully be used without contravention of any regulations or other legal
requirements. It is the responsibility of any person outside the U.K.
wishing to make an Application to satisfy himself as to full observance
of the laws of any relevant territory in connection therewith, including
obtaining any requisite governmental or other consents, observing any
other formalities requiring to be observed in such territory and paying
any issue, transfer or other taxes required.
12. The New Ordinary Shares have not been and will not be registered
under the Securities Act, as amended, and may not be offered or sold
in the United States of America, its territories or possessions or other
areas subject to its jurisdiction (“the USA”). In addition, the Company
has not been and will not be registered under the United States
Investment Company Act of 1940, as amended. The Investment
Manager will not be registered under the United States Investment
Advisers Act of 1940, as amended. No application will be accepted if it
bears an address in the USA.
13. The basis of allocation will be determined by the Company in its
absolute discretion.The right is reserved to reject in whole or in part
and scale down any Application or any part thereof including, without
limitation. Applications in respect of which any verification of identity
which the Company or Woodside Corporate Services consider may be
required for the purposes of the Money Laundering Regulations 2003
has not been satisfactorily supplied. Dealings prior to the issue of
certificates for the New Ordinary Shares will be at the risk of
Applicants. A person so dealing must recognise the risk that an
Application may not have been accepted to the extent anticipated or
at all.Applicants will be notified of the number of New Ordinary Shares
which they have been allotted by way of the issue of certificates for the
New Ordinary Shares.
allotment relating to or constituted by such Application Form (in which
event the money payable or paid in respect of the application will be
returned (without interest) to the account of the drawee bank from
which sums were originally debited) and/or to endeavour to procure
other subscribers for the New Ordinary Shares in question (but in
each case without prejudice to any rights the Company may have to
take proceedings to recover in respect of loss or damage suffered or
incurred by it as a result of the failure to produce satisfactory evidence
as aforesaid).The submission of an Application Form will constitute an
undertaking by the Applicant to provide promptly to Woodside
Corporate Services such information as may be specified by it as being
required for the purpose of the Money Laundering Regulations 2003.
15. The right is also reserved to treat as valid any application not complying
fully with these Terms and Conditions of Application for the Offer for
Subscription or not in all respects complying with the Notes on
Application Form. In particular, but without limitation, the Company
may accept applications made otherwise than by completion of an
Application Form where the applicant has agreed in some other
manner acceptable to the Company to apply in accordance with these
Terms and Conditions of Application.
Copies of this Document and Application Forms will be available free of
charge on request until the Offer for Subscription closes from the registered
office of the Company and the following addresses:
Arc Fund Management Limited
22 Lovat Lane
London EC3R 8EB
14. It is a condition of the Offer for Subscription to ensure compliance with
the Money Laundering Regulations 2003. Arc is entitled to require, at
its absolute discretion, verification of identity from any Applicant
including, without limitation, any person who either (i) tenders payment
by way of a cheque or banker’s draft drawn on an account in the name
of a person or persons other than the Applicant or (ii) appears to the
Company to be acting on behalf of some other person. Pending the
provision of evidence satisfactory to the Company as to the identity of
the Applicant and/or any person on whose behalf the Applicant
appears to be acting, the Company may, in its absolute discretion, retain
an Application Form lodged by an Applicant and/or the cheque or
other remittance relating thereto and/or Park Circus Registrars Limited
may not enter the Applicant on the register of members or issue any
share certificates in respect of such application. If verification of identity
is required, this may result in delay in dealing with an Application and in
rejection of the Application. The Company reserves the right, in its
absolute discretion, for it or Woodside Corporate Services to reject
any Application in respect of which Woodside Corporate Services
considers that, having requested verification of identity it has not
received evidence of such identity satisfactory to it by such time as was
specified in the request for verification of identity or in any event within
a reasonable period. In the event of an Application being rejected in any
such circumstances, the Company reserves the right in its absolute
discretion, but shall have no obligation, to terminate any contract of
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Application Form
Make cheques payable to
“ARC GROWTH COMPANY VCT PLC” and crossed “A/C payee only”.
Cheques must be from a recognised bank account and your payment must relate solely to this application. No receipt
will be issued.This Offer for Subscription opens on 11 July 2006 and the closing date will be Noon on 11 August 2006
(or earlier if the maximum application has been reached).
Section 1: PLEASE USE BLOCK CAPITALS
Dr/Mr/Mrs/Miss/Other First Name in full Surname
Address
Telephone (Work)
Telephone (Home)
Postcode
E-mail
Date of Birth
National Insurance Number
Section 2
I am applying for: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .New Ordinary Shares
The total amount I am paying for
the shares (at £1 per share) is:
£ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The minimum application is £2,000 and then in multiples of £1,000 thereafter.
Section 3
If this form is completed and signed by the investor named in Section 1:
By signing this form I HEREBY DECLARE THAT:
i. I have received the document dated 11 July 2006 and have had the opportunity to read the
terms and conditions of application therein and agree to be bound by them;
ii. I will be the beneficial owner of the New Ordinary Shares in ARC GROWTH COMPANY VCT
PLC issued to me under this Offer; and
iii. to the best of my knowledge and belief, the personal details I have given to ARC GROWTH
COMPANY VCT PLC are correct.
If the form is completed and signed by an independent financial advisor or any other person apart
from the investor:
By signing this form on behalf of the individual whose details are shown above, I make a declaration on behalf of such
individual on the terms of sub-paragraphs (i) to (iii) above.
HM Revenue & Customs may inspect this declaration. It is a serious offence to make a false
declaration.
Signature:
Date: DD/MM/YYYY
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Section 4: To be completed by Independent Financial Advisers
Due completion of the agent’s box indicates that the agent is duly authorised to transact investments of this type
under the Financial Services and Markets Act 2000 and confirms that the requirements of the Money Laundering
Regulations 2003 have been complied with.
Financial Adviser:
Allenbridge Group plc
Dr/Mr/Mrs/Miss/Other First Name Surname Tel
Mr Richard Allen 020 7318 6304
Administrator:
Allenbridge Group plc
Dr/Mr/Mrs/Miss/Other First Name Surname Tel
Miss Jeanne du Preez 020 7318 6323
I wish to waive £____________________ 3%
commission, which will be used to satisfy an additional allotment of Shares
to the investor named in Section 1 at no greater cost to the company or the investor.
FSA Number and Company Stamp:
Allenbridge Group plc
17 Hill Street
London, W1J 5NZ
TEL: 0800 - 33 99 99
FSA: 137716
Section 5
Payment of dividends directly to Bank or Building Society Accounts
Dividends on shares held in Arc Growth Company VCT plc can be paid into bank or building society accounts.To
arrange for all future dividend payments to be paid directly into your account, please complete the mandate
instructions form below.
Dividends paid directly to your account will be paid in cleared funds on the dividend payment date (you will receive
the corresponding tax voucher by post advising you of the payment amount and date).Your bank or building society
statement will identify details of the dividend as well as date and amount paid.
Please forward, until further notice, all dividends that may from time to time become due on any Ordinary Shares
now standing or which may hereafter stand, in my name in the register of member Arc Growth Company VCT plc to:
Bank or Building Society reference number and details
Sort code number
Name of Bank or Building Society
Title of Branch
Address of Branch
Account number
Please quote all digits including zeros
Signature
Date (DD/MM/YYYY)
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NOTES ON HOW TO COMPLETE
THE APPLICATION FORM
Before making an application to acquire shares you are strongly recommended to consult an independent financial adviser
authorised under the Financial Services and Markets Act 2000.The following instructions should be read in conjunction with
the Application Form and the Terms and conditions of application.
Please send the completed Application Form together with your cheque or bankers draft to Woodside Corporate
Services, 21-22 Grosvenor Street, London,W1K 4QJ.
If you have any questions on how to complete the Application Form please contact Woodside Corporate Services on 020
7495 1500 or your financial advisor.
SECTION 1
Please insert in BLOCK CAPITALS your full name,
permanent address, daytime telephone number, date of
birth, National Insurance Number and your email address if
you have one in Section 1.You must be the beneficial
owner of the New Ordinary Shares issued to you pursuant
to the Offer for Subscription.You must not use a nominee
name as this will jeopardise your entitlement to tax reliefs.
You must also give your own address and full postcode and
telephone number.Your National Insurance Number, which
you will find on your pay slip, is required to ensure you
obtain your income tax relief. Joint applications are not
permitted but husbands and wives may apply separately.
SECTION 2
Insert (in figures) the number of shares you are applying
for and the total amount of your investment. Please note
that the minimum investment is £2,000. The
maximum investment on which tax reliefs on investments
in VCTs are available is £200,000 per individual.
Attach your cheque or bankers’ draft to the Application
Form for the total amount of your investment.
Make cheques payable to “ARC GROWTH
COMPANY VCT PLC” and crossed “A/C Payee
only”. Cheques must be from a recognised UK bank
account and your payment must relate solely to this
application. No receipt will be issued.
Money Laundering Regulations 2003 – Important
note for Applications of £9,000 or more
The verification of identity requirements in the Money
Laundering Regulations 2003 will apply and verification of
the identity of the Applicant may be required. Failure to
provide the necessary evidence of identity may result in
your Application being treated as invalid or result in a delay.
If the value of the New Ordinary Shares applied for is
£9,000 or more (or is one of a series of linked applications,
the value of which exceeds that amount), payment should
be made by means of a cheque drawn on an account in
the name of the Applicant. If this is not practicable and you
use a cheque drawn by a third party or a building society
cheque or bankers’ draft, you should write the name,
address and date of birth of the applicant on the back of
the cheque or banker’s draft and the building society or
bank must also endorse on the cheque or draft the name
and account number of the person whose account is being
debited.
If the amount of your application is £9,000 or more (or is
one of a series of linked applications, the value of which
exceeds that amount) or if the value of the New Ordinary
Shares applied for is between £3,000 and £9,000 but is
drawn on a third party cheque, you must also ensure that
enclosed with the Application Form is one document from
list A below and one document from list B below. Original
documents will be returned by post at your risk. Please do
not send your original passport or driving licence.
Alternatively, verification of the Applicant’s identity may be
provided by means of a “Letter of Introduction” in the
prescribed form from a UK or European Economic Area
financial institution (such as a bank or stockbroker) or
other regulated person (such as a solicitor, accountant or
independent financial adviser) who is required to comply
23

with the Money Laundering Regulations 2003.The relevant
financial institution or regulated person will be familiar with
the requirements and the relevant form.
For Applications of £9,000 or more or between
£3,000 and £9,000 but is drawn on a third party
cheque.
(one item from List A AND one item from List B)
List A (Verification of Identity)
Certified copy of current signed passport.
Certified copy of current UK Photo Card Driving Licence.
Certified copy of current UK Driving Licence(old version)
(a provisional licence is not acceptable).
Original Inland Revenue Tax
Notification Original Firearms Certificate.
Frequently asked questions
Q:Who should I make the cheque payable to?
A: Cheques should be made payable to “Arc Growth
Company VCT plc”.
Q:Where should I send my application?
A:Your application form and cheque should be sent to
Woodside Corporate Services, 21-22 Grosvenor Street,
London W1K 4QJ.
Q:What happens after I invest?
A: We will send you confirmation that we have received
your application by return of post.You should expect to
receive your share certificate and tax certificate within a
few weeks of making your investment.
List B (Verification of Address)
Original recent utility bill (but not a mobile telephone bill)
Original recent local authority tax bill.
Original most recent mortgage statement from a
recognised lender/Original recent bank or building society
statement.
SECTION 3
Read the declaration below and sign and date the
Application Form.
SECTION 4
Authorised financial intermediaries who are entitled to
receive commission should stamp and complete Section 4,
giving their full name and address, telephone number and
details of their authorisation under the Financial Services
and Markets Act 2000.The right is reserved to withhold
payment of commission if Arc Growth Company VCT plc is
not, in its sole discretion, satisfied that the financial
intermediary is authorised.
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