TIDMTP5
RNS Number : 3029P
TP5 VCT PLC
04 June 2015
TP5 VCT plc
Final Results
TP5 VCT plc managed by Triple Point Investment Management LLP
today announces the final results for the year ended 31 March
2015.
These results were approved by the Board of Directors on 4 June
2015.
You may view the Annual Report in due course on the Triple Point
website www.triplepoint.co.uk.
Financial Summary
Year ended Year ended
31 March 2015 31 March 2014
------------------------------ -----------------------------
Ord. Ord.
Shares B Shares Total Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Net assets 11,258 1,428 12,686 15,480 3,107 18,587
Net profit/(loss)
before tax 1,644 180 1,824 362 123 485
--------- --------- -------- -------- --------- --------
Movement in net
asset value per
share (p)
Opening net asset
value per share 82.50p 90.07p 85.57p 86.54p
Dividend per share
paid during the
year (31.27p) (53.90p) (5.00p) -
Earnings per share 8.77p 5.24p 1.93p 3.53p
Closing net asset
value per share 60.00p 41.41p 82.50p 90.07p
--------- --------- -------- ---------
Cumulative return
to shareholders
(p)
Net asset value
per share 60.00p 41.41p 82.50p 90.07p
Total dividends
paid 40.78p 53.90p 9.51p -
Net asset value
plus dividends
paid 100.78p 95.31p 92.01p 90.07p
--------- --------- -------- ---------
For a GBP1 investment per share, with a sufficient income tax
liability in the relevant year, shareholders will have received a
30p tax credit, which for Ordinary shareholders taken together with
the total dividends of 40.78p and the current NAV of 60.00p totals
130.78p and for B class shareholders taken together with the total
dividends of 53.90p and with the current NAV of 41.41p totals
125.31p.
TP5 VCT plc ("the Company") is a Venture Capital Trust ("VCT").
The Investment Manager is Triple Point Investment Management LLP
("TPIM" or Triple Point). The Company was launched in September
2008 and raised GBP17.8 million (net of expenses) through an offer
for subscription. In September 2009 it acquired the assets and
liabilities of TP70 2009 VCT plc with a net asset value of GBP3.3m
in exchange for the issue of B shares in the Company to the
shareholders in TP70 2009 VCT plc.
The Strategic Report on pages 2 to 16, the Directors' Report on
pages 17 to 26 and the Directors' Remuneration Report on pages 27
to 29 have each been drawn up in accordance with the requirements
of English law and liability in respect thereof is also governed by
English law. In particular, the responsibility of the Directors for
these reports is owed solely to TP5 VCT plc.
The Directors submit to the members their Annual Report and
Financial Statements for the Company for the year ended 31 March
2015.
Strategic Report
The Strategic Report, on pages 2 to 16, has been prepared in
accordance with the requirements of Section 414c of the Companies
Act 2006. Its purpose is to inform the members of the Company and
help them to assess how the directors have performed their duty to
promote the success of the Company, in accordance with Section 172
of the Companies Act 2006.
Chairman's Statement
I am writing to present the Financial Statements for TP5 VCT plc
for the year ended 31 March 2015.
Exit Programme
Firstly we are pleased to report that in line with the Company's
investment strategy to provide investors with an exit swiftly after
the fifth anniversary of the VCT which occurred on 30 June 2014,
the Company paid its first exit dividend on 1 August 2014. For the
Ordinary Share Class this represented 38% of the Net Asset Value,
and for the B Share Class 60%.
Portfolio
The Company's remaining funds are 96% invested in a portfolio of
qualifying unquoted companies which generaterenewable electricity
from solar PV and anaerobic digestion systems.
During the period the Company made a profit before tax of
GBP1,824,000 of which GBP1,644,000 was attributable to the Ordinary
Shares and GBP180,000 to the B Shares.
At 31 March 2015 the Net Asset Value ("NAV") per Ordinary Share
stood at 60.00p. Adding back the total dividends paid of 40.78p per
share the total return to the Ordinary Share Class holders is
100.78p per share.
At 31 March 2015 the NAV per B Share stood at 41.41p. Adding
back the dividend paid of 53.90p per share the total return to the
B Share Class holders is 95.31p per share.
We are pleased to report that during the year the solar PV
companies in which the Company invested have disposed of a
significant part of their portfolios of roof-mounted solar systems.
The disposal has resulted in an aggregate uplift to the valuation
of these investee companies of GBP1.7 million, which is the
equivalent of 7.93p per Ordinary Share and 5.33p per B Share. We
expect to be able to realise our investments in these companies and
distribute the proceeds in the coming months. More information is
given in the Investment Manager's report.
Dividend
On 1 August 2014 the Company paid dividends of 31.27p per share
to Ordinary Class Shareholders and 53.90p per share to B Class
Shareholders. The dividends were funded from the cash generated
from the realisation of GBP6.5 million of loans held in Cinema
Digitisation companies, and for the B Share Fund GBP1.1 million
realised from GAM Diversity.
The Board has resolved to pay a further dividend to Ordinary
Shareholders of GBP799,219 equal to 4.26p per share and B
Shareholders of GBP101,372 equal to 2.94p per share which will both
be paid on 3 July 2015 to shareholders on the register on 19 June
2015.
Risks
The Board believes that the principal risks currently facing the
Company are:
-- risk of ability to realise investments in order to return funds to investors.
-- risk of failure to continue to satisfy the requirements to qualify as a VCT; and
-- investment risk associated with undertaking VCT qualifying investments;
The Board continues to work closely with the Investment Manager
to minimise the likelihood and the potential impact of these risks,
within the scope of the Company's established investment
strategy.
Outlook
Over the coming months we will continue to work closely with
Triple Point to fulfil the Company's target of returning funds to
shareholders within the coming months. In line with this aim, these
Financial Statements have been prepared on a break up basis to
reflect the intention to realise the assets of the Company within
this timeframe and to seek shareholders approval to place the
Company into Members' Voluntary Liquidation.
If you have any queries or comments, please do not hesitate to
contact Triple Point on 020 7201 8989.
Sir John Lucas-Tooth
Chairman
4 June 2015
Company Strategy and Business Model
The Directors assess the Company's success in meeting its
objectives in relation to returns, stability, VCT qualification
and, ultimately, exit.
Performance Update
At launch the Company targeted a return of 9% to 10% pa
including the benefit of tax relief for the Ordinary Share Class to
be delivered from a combination of managed cash investments and
unquoted qualifying investments. On a weighted average share price
and using a 9% return this is broadly equivalent to a total return
to investors at exit of 109.2p. This compares to a net asset value
per share at 31 March 2015 of 60.00p and cumulative dividend
payments of 40.78p, making a total return to date of 100.78p. The
Ordinary Share Class reported an income return of 0.64p and a
capital return of 8.13p for the year to 31 March 2015. This
compared with an aggregate return for the previous year of 1.93p.
The improvement is due to the sale of assets.
At launch the Company targeted a return of 9.6% to 14.4% pa
including the benefit of tax relief for the B Share Class to be
delivered from a combination of exposure to the GAM Diversity fund
of hedge funds strategy and unquoted qualifying investments. On a
weighted average share price using a 9.6% return this is broadly
equivalent to 111.9p at exit. This compares to a net asset value
per share at 31 March 2015 of 41.41p and cumulative dividend
payments of 53.90p, making a total return to date of 95.31p The B
Share Class reported an income return of nil and a capital return
of 5.24p for the year to 31 March 2015. This compared with an
aggregate return for the previous year of 3.53p. The improvement is
due to the sale of assets.
The Board and the Investment Manager are both committed to
ensuring that returns on the investment portfolio are optimised and
that the VCT remains fully invested, in order to continue to be
managed in line with the Company's investment strategy and risk
profile.
When TP5's target returns were set in 2008, interest rates stood
at 5%, and the length and depth of the recent recession had not
been fully anticipated. The lower than targeted returns on cash,
and on some of the unquoted investments have meant that, whilst
each investment has achieved the Company's objective of capital
preservation, the combined return has not, over time, met target
returns. In addition, neither the GSAM LIBOR Plus strategy, nor the
GAM Diversity strategy has met the returns targeted in 2008.
The Board expects the Investment Manager to deliver a
performance which meets the objective of achieving long-term
investment returns, including tax free dividends. A review of the
performance of the Company's investments during the financial year,
the position of the Company at the year end and the outlook for the
coming year is contained within the Chairman's statement on pages 2
to 3 and the Investment Manager's Review on pages 9 to 10.
Dividend Policy
The Board has historically sought to deliver an annual 5%
dividend on the Ordinary shares if possible, but this depended
primarily on the Company's level of realisations and cash flow. The
Company intends to distribute all future realisations as soon as
possible.
The Board's dividend policy for the B shares is to pay
shareholders the required distribution for VCT status. No more than
15% of income from shares and securities may be retained. The first
dividend of 53.90p per share was paid on 1 August 2014.The Company
now intends to distribute all future realisations as soon as
possible.
Investment Policy
To comply with VCT rules, the Company must within a three year
period have (and subsequently maintain) at least 70% of its
investments represented by qualifying investments. It was the
Directors' objective to achieve this target, typically in
investments ranging between GBP500,000 and GBP2,000,000 between the
Ordinary Share Fund and the B Share Fund, in less than three years.
The investment strategies for the non-VCT qualifying investments
are different for the Ordinary Share Fund and the B Share Fund.
This Company's strategy for VCT qualifying holdings aimed to
deliver more secure returns than is generally the case in venture
capital investments, combined in the case of the B Share Fund with
the potential for enhanced returns through a leveraged exposure to
a fund of hedge funds.
In seeking to achieve the Company's objectives, TPIM sought to
invest in venture capital investments (which represent qualifying
investments) on the basis of certain conservative principles.
In respect of venture capital investments (which represent
qualifying investments under the tax rules applying to VCTs) TPIM
sought:
-- investments in which robust due diligence has been undertaken on target investments;
-- investments in which there is a high level of access to
material financial and other information on an ongoing basis;
-- investments in which the risk of losses is minimised through
careful analysis of the collateral available to investee companies;
and
-- investments in which there is a strong relationship with the key decision makers.
B Share Fund
In respect of fund of hedge fund investments (which represent
non-qualifying investments under the tax rules applying to VCTs)
GAM was appointed as TPIM's sub-adviser to advise on the selection
of GAM funds of hedge funds.
Ordinary Share Fund
GSAM was appointed as TPIM's sub-adviser to manage the cash and
fixed income investments of the Ordinary Share Fund, prior to
investment in qualifying companies.
The Company's investment policy and strategy are discussed in
the Investment Manager's Review on pages 9 to 10.
Investment Portfolio - Ordinary Share Class
Unquoted Qualifying Investments 96%
Cash 4%
Investment classification for the B Share Class by asset value
is shown below:
Investment Portfolio - B Share Class
Unquoted Qualifying Investments 94%
Cash 6%
Qualifying Investments by Sector for the Ordinary and B Share
Classes
Solar PV 75%
Anaerobic Digestion 25%
Tax Benefits
The Company's objective is to provide shareholders with an
attractive income and capital return by investing its funds in a
broad spread of unlisted UK companies which meet the relevant
criteria for investment by Venture Capital Trusts.
Investing in a VCT brings the benefit of tax-free dividends, as
well as up-front income tax relief. The Company has over 70% of its
net asset value invested in VCT qualifying investments and
continues to meet the VCT qualification requirements which are
continuously monitored by the Investment Manager and reviewed by
the Directors.
VCT Regulation
VCTs were introduced in the Finance Act 1995 to provide a means
for private individuals to invest in unquoted companies in the UK.
The Finance Act 2004 introduced changes to VCT legislation designed
to make VCTs more attractive to investors. The tax benefits
available to eligible investors in VCTs include:
-- up-front income tax relief of 30%
-- exemption from income tax on dividends received
-- exemption from capital gains tax on disposals of shares in VCTs.
The Company was provisionally approved as a VCT by Her Majesty's
Revenue and Customs. In order to secure final approval the Company
must comply with certain requirements on a continuing basis. Within
three years from the effective date of provisional approval or
later allotment at least 70% of the Company's investments must
comprise "qualifying holdings" of which at least 30% must be in
eligible ordinary shares. This investment criterion has been
met.
VCT qualifying status risk: the Company is required at all times
to observe the conditions laid down in the Income Tax Act 2007 for
the maintenance of approved VCT status. The loss of such approval
could lead to the Company losing its exemption from corporation tax
on capital gains, to investors being liable to pay income tax on
dividends received from the Company and, in certain circumstances,
to investors being required to repay the initial income tax relief
on their investment. The Investment Manager keeps the Company's VCT
qualifying status under continual review and reports to the Board
on a quarterly basis. The Board has also retained Robertson Hare
LLP to undertake an independent VCT status monitoring role.
Exit Programme
The Company is committed to realising its investments and
returning funds to shareholders as soon as practicable. The
Directors and the Investment Manager have put in place a programme
to manage the investment realisations over the course of 2015. As
described in the Investment Managers Report the Company has begun
the process of realising its investments. The Investment Manager
has successfully implemented exit plans for other VCTs under its
management.
Principal Risks and Risk Management
The Directors carry out a regular review of the environment in
which the Company operates. The main areas of risk identified by
them, along with the risks to which the Company is exposed through
its operational and investing activities, are detailed below.
Investment risk: the Company's VCT qualifying investments are
held in small and medium-sized unquoted companies which, by their
nature, entail a higher level of risk and lower liquidity than
investments in large quoted companies. The Directors and Investment
Manager aim to limit the risk attached to the investment portfolio
as a whole by the careful selection and timely realisation of
investments, by carrying out rigorous due diligence procedures and
by maintaining a spread of holdings in terms of industry sector and
geographical location. The Board reviews the investment portfolio
with the Investment Manager on a regular basis.
Financial instrument risk: Financial instrument risks are
described in note 16.
Financial risk: as most of the Company's investments will
involve a medium to long-term commitment and will be relatively
illiquid, the Directors consider that it is inappropriate to
finance the Company's activities through borrowing.
Internal control risk: the Board regularly reviews the system of
internal controls, both financial and non-financial, operated by
the Company and the Investment Manager. These include controls
designed to ensure that the Company's assets are safeguarded and
that proper accounting records are maintained.
Share Buy-Back Discount Policy
The Company has a share buy-back facility, committing to buy
back shares at no more than a 10% discount to the prevailing NAV,
subject to the Directors' discretion. We will be asking
shareholders at the Annual General Meeting to extend the facility
for the Company to purchase shares in the market for
cancellation.
Environmental, Social, Employee and Human Rights Issues
Due to the nature of the Company's activities and having no
employees and only 3 Non-Executive Directors, there are no Human
Rights Issues to report. Investment portfolio companies engaged in
the energy generation from renewable sources means the Company
contributes to the reduction of carbon emissions.
Gender Diversity
The Board of Directors comprises 3 male Directors. The
Investment Manager has a female Managing Partner and has 44
employees and members of whom 26 are men and 18 are women.
Investment Manager's Review
At 31 March 2015, qualifying investments represented 96% of net
assets, ensuring that the Company continues to satisfy the
requirement to be 70% invested in qualifying investments.
In the first few months of this period, the first investment
realisations were made as part of the programme to return funds to
investors following the end of the five year VCT holding period.
The first tranche of investments to be realised represented the
majority of the Company's holdings in cinema digitisation
companies. The remaining portfolio of small, unquoted investments
is split between 11 companies across one sector being renewable
electricity generation both from both solar PV and anaerobic
digestion.
On 25March 2015, the companies within the solar PV sector sold a
significant proportion of their portfolio of solar assets. This
large scale sale of solar assets was the first of its kind in the
VCT sector.
The Company first invested in solar generating companies at a
time when the Government was looking to accelerate the take-up of
solar PV and renewable electricity generation generally in the UK
and the businesses in which the Company invested were predominately
operating large portfolios of residential roof-mounted generating
stations. Since 2011, solar PV has become a recognised technology
in this country with over 500,000 residential solar PV systems now
in operation. The solar generating companies therefore had a well
established business model and the solar assets had also developed
a successful operational track record, making them an attractive
prospect for sale, particularly to institutional funds. The latter
have shown a greater interest in renewable and solar assets
recently, as they seek long life assets with index-linked revenue
streams, an advantage identified by the Company a number of years
ago.
This institutional appetite, combined with lower discount rates
(UK 10 year gilts yields have fallen by over 150 basis points in
the last 3 years) enabled the companies to arrange a successful
disposal, which has delivered a 7.93p per Ordinary Share, and a
5.33p per B Share, uplift to the net asset value a result which
justifies the consequent postponement of the Company's realisation
of these investments.
Sector Analysis
The unquoted investment portfolio can be analysed as
follows:
Electricity Generation
Total Unquoted
Anaerobic Qualifying
Industry Sector Cinema Digitisation Solar PV Digestion Investments
-------------------------- -------------------- ----------- ------------ ---------------
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------------------- ---------------
Investments at 31 March
2014 6,691 7,469 3,079 17,239
-------------------------- -------------------- ---------------
Investments revaluations
during the year 44 1,672 (1) 1,715
-------------------------- -------------------- ----------- ------------ ---------------
Investments disposed of
during the year (6,735) - (3) (6,738)
-------------------------- -------------------- ----------- ------------ ---------------
Investments at 31 March
2015 - 9,141 3,075 12,216
-------------------------- -------------------- ----------- ------------ ---------------
Unquoted Investments % 0.00% 74.83% 25.17% 100.00%
-------------------------- -------------------- ----------- ------------ ---------------
VCT Sector Portfolio
Cinema Digitisation
The Company disposed of its holding in four cinema digitisation
companies as part of the exit programme to return funds to
shareholders on 1 August 2014.
Solar PV
The portfolio comprises investments in 8 businesses in the solar
PV sector which generate renewable electricity from residential
solar PV panels. Over the six months to 31 March, these businesses
continued to deliver results in line with expectations. On 25 March
2015, these companies have disposed of a significant proportion of
their roof-mounted solar systems. It is expected that the Company's
holdings in the solar businesses will be realised in the coming
months.
Anaerobic Digestion
The Company has investments in three renewable energy
businesses, GreenTec Energy Ltd, Katharos Organic Ltd and Biomass
Future Generation Ltd. These businesses each operate a 1 MW on-farm
anaerobic digestion plant, which generates green electricity
attracting both Feed in Tariffs and power export revenues. FITs
provide for a long term RPI-linked revenue stream, consistent with
the objectives of the Company. It is expected that these
investments will be realised in the coming months.
Outlook
The Company's strategy remains to return funds to shareholders
as soon as possible and we will continue work to realise the
remainder of the investment portfolio as soon as possible.
If you have any questions, please do not hesitate to call Triple
Point on 020 7201 8989.
Mike Bayer
Partner
for Triple Point Investment Management LLP
4 June 2015
Investment Portfolio Summary
Year ended Year ended
31 March 2015 31 March 2014
------------------------------------ ------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted Qualifying
Holdings 10,270 95.01 12,216 95.76 16,875 95.45 17,235 95.83
Unquoted Non Qualifying
Holdings - - - - 60 0.34 4 0.02
Financial assets at
fair value through profit
or loss 10,270 95.01 12,216 95.76 16,935 95.79 17,239 95.85
Cash and cash equivalents 540 4.99 540 4.24 747 4.21 747 4.15
10,810 100.00 12,756 100.00 17,682 100.00 17,986 100.00
======== ======= ======== ======= ======== ======= ======== =======
Unquoted Qualifying Holdings
Electricity Generation:
Solar
Campus Link Ltd 1,310 12.12 1,694 13.28 1,310 7.41 1,445 8.03
Convertibox Services
Ltd 1,000 9.25 1,170 9.17 1,000 5.66 950 5.28
Flowers Power Ltd 1,000 9.25 1,365 10.70 1,000 5.66 1,077 5.99
Green Energy for Education
Ltd 1,310 12.12 1,477 11.58 1,310 7.41 1,282 7.13
Helioflair Ltd 200 1.85 254 1.99 200 1.13 199 1.11
New Energy Network Ltd 1,000 9.25 1,337 10.48 1,000 5.66 1,063 5.91
Ranmore Environmental
Ltd 375 3.47 471 3.69 375 2.12 374 2.08
September Star Energy
Ltd 1,000 9.25 1,373 10.76 1,000 5.66 1,079 6.00
Anaerobic Digestion
Biomass Future Generation
Ltd 1,300 12.03 1,300 10.19 1,300 7.35 1,300 7.23
GreenTec Energy Ltd 500 4.63 500 3.92 500 2.83 500 2.78
Katharos Organic Ltd 1,275 11.79 1,275 10.00 1,275 7.21 1,275 7.09
Cinema Digitisation
:
Cinematic Services Ltd - - - - 2,000 11.31 1,964 10.92
Digima Ltd - - - - 1,647 9.31 1,648 9.16
Digital Screen Solutions
Ltd - - - - 1,648 9.32 1,662 9.24
DLN Digital Ltd - - - - 1,310 7.41 1,417 7.88
10,270 95.01 12,216 95.76 16,875 95.45 17,235 95.83
======== ======= ======== ======= ======== ======= ======== =======
Cost Valuation Cost Valuation
Unquoted Non Qualifying
Holdings GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Anaerobic digestion
Drumnahare Biogas Ltd - - - - 60 0.34 4 0.02
- - - - 60 0.34 4 0.02
======== ======= ======== ======= ======== ======= ======== =======
Financial Assets are measured at fair value through profit or
loss. The initial best estimate of fair value of these investments
that are either quoted or not quoted on an active market is the
transaction price (i.e. cost). The fair value of these investments
is subsequently measured by reference to the enterprise value of
the investee company, which is best deemed to reflect the fair
value. Where the Board considers the investee company's enterprise
value to remain unchanged since acquisition, investments continue
to be held at cost less any loan repayments received. Where the
Board considers the investee company's enterprise value has changed
since acquisition, investments are held at a value measured using a
discounted cash flow model or the value expected to be realised on
disposal which is equivalent to fair value.
On 22 March 2015 the companies in the solar PV sector sold a
portfolio of assets resulting in an uplift in their valuation for
the Company of GBP1.7 million. At 31 March 2015 all the above
companies are treated as assets held for sale.
A breakdown of investments between the Ordinary Share Class and
the B Share Class is shown in note 10. When an investment is made
the split between the Ordinary Shares the B Shares is calculated
using the net asset value of each share class at the time of
investment.
Investment Portfolio's Ten Largest Unquoted Investments
Biomass Future Generation
Ltd*
Equity
Income recognised Held Equity Held
Date of Valuation Valuation by TP5 for by TP5 by TPIM managed
first investment Cost GBP GBP Method the year GBP'000 % funds %
Discounted
24-Feb-10 1,300,000 1,300,000 sale price 45 28.31 96.92
Summary of Information from Investee Company Financial
Statements ending in 2014: GBP'000
Turnover 1,272
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 375
Profit before tax 96
Net assets before
VCT loans 2,847
Net assets 572
Biomass Future Generation Ltd has funded the construction of a farm
based anaerobic digestion plant in Hertfordshire. The plant is fully
operational and utilises agricultural feed stocks, which are converted
into a methane rich biogas, in order to produce green electricity using
a 1 MW Jenbacher CHP (combined heat and power) engine. The business
derives its revenues from the export and sale of the electricity it
produces, as well as from Feed-in Tariffs, which it is entitled to in
respect of its production of green electricity. These provide the company
with 20 years of RPI linked cash flows.
----------------------------------------------------------------------------------------------------------
Campus Link Ltd*
Equity
Income recognised Held Equity Held
Date of Valuation Valuation by TP5 for by TP5 by TPIM managed
first investment Cost GBP GBP Method the year GBP'000 % funds %
24-Feb-10 1,310,000 1,694,000 Sale price 46 32.89 98.66
Summary of Information from Investee Company Financial
Statements ending in 2014: GBP'000
Turnover 350
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 284
Profit before tax 65
Net assets before
VCT loans 2,853
Net assets 753
Campus Link Ltd is a small venture capital funded business with an
established portfolio of roof mounted, residential solar PV systems
which have been generating electricity since 2011. During the year
the company received stable, long term cash flows as a result of RPI
linked revenues supported by the UK Government Feed-in Tariff scheme.
Campus Link expanded its business with the purchase of additional solar
PV systems in 2012.
-----------------------------------------------------------------------------------------------------------
Convertibox Services
Ltd*
Equity
Income recognised Held Equity Held
Date of Valuation Valuation by TP5 for by TP5 by TPIM managed
first investment Cost GBP GBP Method the year GBP'000 % funds %
30-Mar-11 1,000,000 1,170,000 Sale price 42 48.48 96.96
Summary of Information from Investee Company Financial
Statements ending in 2014: GBP'000
Turnover 194
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 156
Profit before tax 1
Net assets before
VCT loans 1,779
Net assets 379
Convertibox Services Limited has been generating renewable electricity
from its portfolio of roof mounted solar PV systems since 2011. During
the year the company received stable, long term cash flows as a result
of RPI linked revenues supported by the UK Government Feed-in Tariff
scheme.
---------------------------------------------------------------------------------------------------------
Flowers Power Ltd*
Equity
Income recognised Held Equity Held
Date of Valuation Valuation by TP5 for by TP5 by TPIM managed
first investment Cost GBP GBP Method the year GBP'000 % funds %
14-Nov-11 1,000,000 1,365,000 Sale price 35 49.02 98.04
Summary of Information from Investee Company Financial
Statements ending in 2014: GBP'000
Turnover 223
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 151
Profit before tax 5
Net assets before
VCT loans 1,921
Net assets 521
Flowers Power Ltd has been generating renewable electricity from its
portfolio of roof mounted solar PV systems since 2011. During the year
the company received stable, long term cash flows as a result of RPI
linked revenues supported by the UK Government Feed-in Tariff scheme.
It expanded its business with the purchase of additional solar PV systems
in 2013.
---------------------------------------------------------------------------------------------------------
Green Energy for Education
Ltd*
Equity
Income recognised Held Equity Held
Date of Valuation Valuation by TP5 for by TP5 by TPIM managed
first investment Cost GBP GBP Method the year GBP'000 % funds %
26-Feb-10 1,310,000 1,477,000 Sale price 46 49.23 98.47
Summary of Information from Investee Company Financial
Statements ending in 2014: GBP'000
Turnover 254
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 208
Profit before tax (15)
Net assets before
VCT loans 1,843
Net assets 262
Green Energy for Education Ltd generates renewable electricity from
its portfolio of residential roof mounted solar PV systems which it
owns and operates at sites across the UK. During the year the company
received stable, long term cash flows as a result of RPI linked revenues
supported by the UK Government Feed-in Tariff scheme. Green Energy
for Education established its portfolio of solar PV systems in 2011
and made further acquisitions in 2012.
---------------------------------------------------------------------------------------------------------
GreenTec Energy
Ltd *
Income recognised Equity
Date of by TP5 for Held Equity Held
first Valuation the year by TP5 by TPIM managed
investment Cost GBP Valuation GBP Method GBP'000 % funds %
Discounted
27-Feb-12 500,000 500,000 sale price 21 12.32 97.54
Summary of Information from Investee Company Financial
Statements ending in 2014: GBP'000
Turnover 0
Earnings before interest, tax, amortisation and depreciation
(EBITDA) (65)
Profit before tax (19)
Net assets before
VCT loans 3,980
Net assets 1,180
GreenTec Energy Ltd is a holding company which owns a 100% stake in
Trinity Hall Biogas Limited ('THB'). THB owns and operates a farm-based
anaerobic digestion plant in Bedfordshire which utilises agricultural
feed stocks that are converted into a methane rich biogas, in order
to produce green electricity using a 1 MW Jenbacher CHP (combined heat
and power) engine. The business derives its revenues from the export
and sale of the electricity it produces, as well as from Feed-in Tariffs,
which it is entitled to in respect of its production of green electricity.
These provide the company with 20 years of RPI linked cash flows.
------------------------------------------------------------------------------------------------------------------
Katharos Organic
Ltd*
Equity
Income recognised Held Equity Held
Date of Valuation Valuation by TP5 for by TP5 by TPIM managed
first investment Cost GBP GBP Method the year GBP'000 % funds %
Discounted
26-Feb-10 1,275,000 1,275,000 sale price 45 29.96 98.68
Summary of Information from Investee Company Financial
Statements ending in 2014: GBP'000
Turnover 1,347
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 474
Profit before tax 193
Net assets before
VCT loans 3,300
Net assets 500
Katharos Organic Ltd has funded the construction of a farm based anaerobic
digestion plant in Essex. The plant is fully operational and utilises
agricultural feed stocks which are converted into a methane rich biogas
in order to produce green electricity using a 1 MW Jenbacher CHP (combined
heat and power) engine. The business derives its revenues from the
export and sale of the electricity it produces, as well as from Feed-in
Tariffs, which it is entitled to in respect of its production of green
electricity. These provide the company with 20 years of RPI linked
cash flows.
----------------------------------------------------------------------------------------------------------
New Energy Network
Ltd*
Equity
Income recognised Held Equity Held
Date of Valuation Valuation by TP5 for by TP5 by TPIM managed
first investment Cost GBP GBP Method the year GBP'000 % funds %
14-Nov-11 1,000,000 1,337,000 Sale price 35 49.02 98.04
Summary of Information from Investee Company Financial
Statements ending in 2014: GBP'000
Turnover 225
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 153
Profit before tax 8
Net assets before
VCT loans 1,922
Net assets 522
New Energy Network Ltd generates renewable electricity from its portfolio
of residential roof mounted solar PV systems which it owns and operates
at sites across the UK. During the year the company received stable,
long term cash flows as a result of RPI linked revenues supported
by the UK Government Feed-in Tariff scheme. New Energy Network established
its portfolio of solar PV systems with acquisitions in 2011 and 2013.
---------------------------------------------------------------------------------------------------------
Ranmore Environmental
Ltd *
Income recognised Equity Equity Held
Date of Valuation Valuation by TP5 for Held by by TPIM managed
first investment Cost GBP GBP Method the year GBP'000 TP5 % funds %
05-Dec-11 375,000 471,000 Sale price 13 18.38 98.04
Summary of Information from Investee Company Financial Statements
ending in 2014: GBP'000
Turnover 199
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 148
Profit before tax 1
Net assets before
VCT loans 1,920
Net assets 520
Ranmore Environmental Limited generates renewable electricity from
its portfolio of residential roof mounted solar PV systems which it
owns and operates at sites across the UK. During the year the company
received stable, long term cash flows as a result of RPI linked revenues
supported by the UK Government Feed-in Tariff scheme. Ranmore Environmental
established its portfolio of solar PV systems through acquisitions
in both 2011 and 2013.
---------------------------------------------------------------------------------------------------------
September Star Energy
Ltd*
Equity
Income recognised Held Equity Held
Date of Valuation Valuation by TP5 for by TP5 by TPIM managed
first investment Cost GBP GBP Method the year GBP'000 % funds %
14-Nov-11 1,000,000 1,373,000 Sale price 35 49.02 98.04
Summary of Information from Investee Company Financial
Statements ending in 2014: GBP'000
Turnover 224
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 151
Profit before tax 5
Net assets before
VCT loans 1,921
Net assets 521
September Star Energy Ltd is a small venture capital funded business
with an established portfolio of roof mounted, residential solar PV
systems which have been generating electricity since 2011. During the
year the company received stable, long term cash flows as a result of
RPI linked revenues supported by the UK Government Feed-in Tariff scheme.
September Star Energy Ltd went on to further expanded its business with
the purchase of additional solar PV systems in 2013.
---------------------------------------------------------------------------------------------------------
* Assets held for sale
-- The investments are a combination of debt and equity.
-- Equity holding is equal to the voting rights.
The Strategic Report has been approved by the Board and signed
on their behalf by the Chairman.
Sir John Lucas-Tooth
Chairman
4 June 2015
Report of the Directors
The Directors present their Report and the audited Financial
Statements for the year ended 31 March 2015.
Details of Directors
Sir John Lucas-Tooth is Chairman of the Company. After selling
his scientific instrument business, Telsec, to Bausch & Lomb,
he became a consultant for Lazard Brothers and a director of Lazard
Investments Limited, a subsidiary for their private equity
holdings. Sir John was previously managing director of various
companies in the Loewenstein Company. Latterly, he assisted in the
setting up of Cunningham Loewenstein Asset Management plc which is
FCA authorised. He is now semi-retired but maintains interests in
several small high technology enterprises and is a trustee of
several charities.
Robert Reid, is the founder of an independent corporate
development advisory business. After graduating from the European
Business School, he joined S.G. Warburg & Co. and has over 17
years corporate finance experience in both the corporate and
advisory fields. His most recent roles include director of
corporate finance at Avis Europe plc and director of corporate
finance at Hurst Morrison Thomson, Chartered Accountants. Robert is
a Director of TP10 VCT plc and was previously a Director of TP70
2008(II) VCT plc.
Christopher Harris graduated in Social and Political Sciences
from Cambridge University. He then trained as a lawyer with
Slaughter and May before joining a law practice in Jersey. He has
specialised in tax work involving complex trust structures, captive
insurance and the management of holding companies for UK quoted
entities. Following the sale of the firm's trust company to
Rathbone Brothers plc he became managing director of Rathbone Trust
Company (Jersey) Limited from 2002 to 2004 and a director of
Rathbone Investment Management (Channel Islands) Limited from 2003
to 2006.
Robert Reid being a Director of another TPIM managed VCT is not
considered independent. Therefore he will retire and offer himself
for re-election at the Annual General Meeting to be held on 24
September 2015. Both Sir John Lucas-Tooth and Christopher Harris
are considered independent.
The Board has considered provision B.7.2 of the UK Corporate
Governance Code (September 2012) and believes that all the
Directors continue to be effective and to demonstrate commitment to
their roles, the Board and the Company. The Directors are discussed
further within the Corporate Governance report on page 21 which
demonstrates the Boards compliance with the UK Corporate Governance
code.
Activities and Status
The Company is a Venture Capital Trust and its main activity is
investing.
The Company has been provisionally approved as a VCT by
HMRC.
The Company is registered in England as a Public Limited Company
(Registration number 6614532). The Directors have managed, and
intend to continue to manage, the Company's affairs in such a
manner as to comply with Section 274 of the Income Tax Act 2007
which grants approval as a VCT.
The Company was not at any time up to the date of this report a
close company within the meaning of S439 of the Corporation Tax Act
2010.
Post Balance Sheet Events
Post balance sheet events are detailed in note 21.
Directors' and Officers' Liability Insurance
The Company has, as permitted by S233 of the Companies Act 2006,
maintained insurance cover on behalf of the Directors and Company
Secretary, indemnifying them against certain liabilities which may
be incurred by them in relation to their offices with the
Company.
Matters Covered in the Strategic Report
Dividends and financial risk management have both been discussed
within the Strategic Report on pages 2, 7 and 8.
Corporate Governance
Full details are given in the Corporate Governance Statement,
which forms part of this Report of the Directors, and can be found
on pages 21 to 25.
Management
TPIM acts as Investment Manager to the Company. The principal
terms of the Company's management agreement with TPIM are set out
in note 5 to the Financial Statements.
The Board has evaluated the performance of the Investment
Manager based on the returns generated since taking on the
management of the Fund and a review of the management contract and
the services provided in accordance with its terms. As required by
the Listing Rules, the Directors confirm that in their opinion the
continuing appointment of TPIM as Investment Manager is in the best
interests of the shareholders as a whole. In reaching this
conclusion the Directors have taken into account the performance of
other VCTs managed by TPIM and the service provided by TPIM to the
Company.
Substantial Shareholdings
As at the date of this report no disclosures of major
shareholdings had been made to the Company under Disclosure and
Transparency Rule 5 (Vote Holder and Issuer Notification
Rules).
Global Greenhouse Gas Emissions
The Company has no greenhouse gas emissions to report from the
operations of its Company, nor does it have responsibility for any
other emission producing sources under the Companies Act 2006
(Strategic Report and Directors' Reports) Regulations 2013.
Annual General Meeting
Notice convening the 2015 Annual General Meeting of the Company
and a form of proxy in respect of that meeting can each be found at
the end of this document.
Share Capital, Rights Attaching to the Shares and Restrictions
on Voting and Transfer
The Company's authorised share capital is GBP600,000 divided
into 55,000,000 Ordinary shares of 1p each and 5,000,000 B shares
of 1p each. 18,761,011 Ordinary shares and 3,448,044 B shares were
in issue at 31 March 2015. As at that date none of the issued
shares was held by the Company as treasury shares. Subject to any
suspension or abrogation of rights pursuant to relevant law or the
Company's articles of association, the shares confer on their
holders (other than the Company in respect of any treasury shares)
the following principal rights:
a) the right of Ordinary and B class shareholders to receive out
of profits available for distribution respectively from the assets
available from the Ordinary and B class share funds such dividends
as may be agreed to be paid (in the case of a final dividend in an
amount not exceeding the amount recommended by the Board as
approved by shareholders in general meeting or in the case of an
interim dividend in an amount determined by the Board). All
dividends unclaimed for a period of 12 years after having become
due for payment are forfeited automatically and cease to remain
owing by the Company;
b) the right of Ordinary and B class shareholders on a return of
assets on a liquidation, reduction of capital or otherwise, to
share in the surplus assets respectively from the assets available
from the Ordinary and B class share funds of the Company remaining
after payment of its liabilities; and
c) the right to receive notice of and to attend and speak and
vote in person or on a poll by proxy at any general meeting of the
Company. On a show of hands every member present or represented and
voting has one vote and on a poll every member present or
represented and voting has one vote for every share of which that
member is the holder; the validly executed appointment of a proxy
must be received not less than 48 hours before the time of the
holding of the relevant meeting or adjourned meeting or, in the
case of a poll taken otherwise than at or on the same day as the
relevant meeting or adjourned meeting, be received after the poll
has been demanded and not less than 24 hours before the time
appointed for the taking of the poll.
These rights can be suspended. If a member, or any other person
appearing to be interested in shares held by that member, has
failed to comply within the time limits specified in the Company's
articles of association with a notice pursuant to S793 of the
Companies Act 2006 (notice by a Company requiring information about
interests in its shares), the Company can until the default ceases
suspend the right to attend and speak and vote at a general meeting
and if the shares represent at least 0.25% of their class the
Company can also withhold any dividend or other money payable in
respect of the shares (without any obligation to pay interest) and
refuse to accept certain transfers of the relevant shares.
Shareholders, either alone or with other shareholders, have
other rights as set out in the Company's articles of association
and in company law, principally the Companies Act 2006.
A member may choose whether his or her shares are evidenced by
share certificates (certificated shares) or held in electronic
(uncertificated) form in CREST (the UK electronic settlement
system). Any member may transfer all or any of his or her shares,
subject in the case of certificated shares to the rules set out in
the Company's articles of association or in the case of
uncertificated shares to the regulations governing the operation of
CREST (which allow the Directors to refuse to register a transfer
as therein set out); the transferor remains the holder of the
shares until the name of the transferee is entered in the register
of members. The Directors may refuse to register a share transfer
if it is in respect of a certificated share which is not fully paid
up or on which the Company has a lien provided that, where the
share transfer is in respect of any share admitted to the Official
List maintained by the UK Listing Authority, any such discretion
may not be exercised so as to prevent dealings taking place on an
open and proper basis, or if in the opinion of the Directors (and
with the concurrence of the UK Listing Authority) exceptional
circumstances so warrant, provided that the exercise of such power
will not disturb the market in those shares. Whilst there are no
squeeze-out and sell-out rules relating to the shares in the
Company's articles of association, shareholders are subject to the
compulsory acquisition provisions in S974 to S991 of the Companies
Act 2006.
Amendment of Articles of Association
The Company's articles of association may be amended by the
members of the Company by special resolution (requiring a majority
of at least 75% of the persons voting on the relevant
resolution).
Appointment and Replacement of Directors
A person may be appointed as a Director of the Company by the
shareholders in general meeting by ordinary resolution (requiring a
simple majority of the persons voting on the relevant resolution)
or by the Directors; no person, other than a Director retiring by
rotation or otherwise, shall be appointed or re-appointed a
Director at any general meeting unless he or she is recommended by
the Directors or, not less than 7 nor more than 42 clear days
before the date appointed for the meeting, notice is given to the
Company of the intention to propose that person for appointment or
re-appointment in the form and manner set out in the Company's
articles of association.
Each Director who is appointed by the Directors (and who has not
been elected as a Director of the Company by the members at a
general meeting held in the interval since his appointment as a
Director of the Company) is to be subject to election as a Director
of the Company by the members at the first Annual General Meeting
of the Company following his or her appointment. At each Annual
General Meeting of the Company one third of the Directors for the
time being, or if their number is not three or an integral multiple
of three the number nearest to but not exceeding one-third, are to
be subject to re-election.
The Companies Act allows shareholders in general meeting by
ordinary resolution (requiring a simple majority of the persons
voting on the relevant resolution) to remove any Director before
the expiry of his or her period of office, but without prejudice to
any claim for damages which the Director may have for breach of any
contract of service between him or her and the Company.
A person also ceases to be a Director if he or she resigns in
writing, ceases to be a Director by virtue of any provision of the
Companies Act, becomes prohibited by law from being a Director,
becomes bankrupt or is the subject of a relevant insolvency
procedure, or becomes of unsound mind, or if the Board so decides
following at least six months' absence without leave or if he or
she becomes subject to relevant procedures under the mental health
laws, as set out in the Company's articles of association.
Powers of the Directors
Subject to the provisions of the Companies Act, the memorandum
and articles of association of the Company and any directions given
by shareholders by special resolution, the articles of association
specify that the business of the Company is to be managed by the
Directors, who may exercise all the powers of the Company, whether
relating to the management of the business or not. In particular,
the Directors may exercise on behalf of the Company its powers to
purchase its own shares to the extent permitted by
shareholders.
Auditor
Grant Thornton UK LLP offers itself for reappointment as
auditor. In accordance with S489(4) of the Companies Act 2006 a
resolution to reappoint Grant Thornton UK LLP as auditor will be
proposed at the forthcoming Annual General Meeting.
On behalf of the Board.
Sir John Lucas-Tooth
Director
4 June 2015
Corporate Governance
The Board of TP5 VCT plc has considered the principles and
recommendations of the Association of Investment Companies Code of
Corporate Governance (AIC Code 2013) by reference to the
Association of Investment Companies Corporate Governance Guide for
Investment Companies (AIC Guide). The AIC Code 2013, as explained
by the AIC Guide, addresses all the principles set out in the UK
Corporate Governance Code (September 2012), as well as setting out
additional principles and recommendations on issues that are of
specific relevance to the Company. The Board considers that
reporting against principles and recommendations of the AIC Code
2013, by reference to the AIC Guide, which incorporates the UK
Corporate Governance Code (September 2012), will provide improved
reporting to shareholders.
The Company is committed to maintaining high standards in
corporate governance and has complied with the recommendations of
the AIC Code 2013 and the relevant provisions of the UK Corporate
Governance Code (September 2012), except as set out at the end of
this report in the Compliance Statement.
The Corporate Governance Statement forms part of the Report of
the Directors.
Board of Directors
The Company has a Board of three Non-Executive Directors. Since
all Directors are Non-Executive and day-to-day management
responsibilities are sub-contracted to the Investment Manager, the
Company does not have a Chief Executive Officer. The Directors have
a range of business and financial skills which are relevant to the
Company; these are described on page 17 of this report. Directors
are provided with key information on the Company's activities,
including regulatory and statutory requirements, by the Investment
Manager. The Board has direct access to company secretarial advice
and compliance services provided by the Investment Manager which is
responsible for ensuring that Board procedures are followed and
applicable regulations complied with. All Directors are able to
take independent professional advice in furtherance of their
duties.
Any appointment of new Directors to the Board is conducted, and
appointments made, on merit and with due regard for the benefits of
diversity on the Board, including gender. All Directors are able to
allocate sufficient time to the Company to discharge their
responsibilities.
The Board meets regularly on a quarterly basis, and on other
occasions as required, to review the investment performance and
monitor compliance with the investment policy laid down by the
Board. There is a formal schedule of matters reserved for Board
decision and the agreement between the Company and the Investment
Manager has authority limits beyond which Board approval must be
sought.
The Investment Manager has authority over the management of the
investment portfolio, the organisation of custodial services,
accounting, secretarial and administrative services. In practice
the Investment Manager makes investment recommendations for the
Board's approval. In addition all investment decisions involving
other VCTs managed by the Investment Manager are taken by the Board
rather than the Investment Manager. Other matters reserved for the
Board include:
-- the consideration and approval of future developments or
changes to the investment policy, including risk and asset
allocation;
-- consideration of corporate strategy;
-- approval of any dividend or return of capital to be paid to the shareholders;
-- the appointment, evaluation, removal and remuneration of the Investment Manager;
-- the performance of the Company, including monitoring the net asset value per share; and
-- monitoring shareholder profiles and considering shareholder communications.
The Chairman leads the Board in the determination of its
strategy and in the achievement of its objectives. The Chairman is
responsible for organising the business of the Board, ensuring its
effectiveness and setting its agenda and has no involvement in the
day to day business of the Company. He facilitates the effective
contribution of the Directors and ensures that they receive
accurate, timely and clear information and that they communicate
effectively with shareholders. The Chairman does not have
significant commitments conflicting with his obligations to the
Company.
The Company Secretary is responsible for advising the Board on
all governance matters. All of the Directors have access to the
advice and services of the Company Secretary which has
administrative responsibility for the meetings of the Board and its
committees. As all of the Directors are Non-Executive, it is not
considered appropriate to identify a member of the Board as the
senior Non-Executive Director of the Company.
The Company's articles of association and the schedule of
matters reserved to the Board for decision provide that the
appointment and removal of the Company Secretary is a matter for
the full Board.
The Company's articles of association require that one third of
the Directors should retire by rotation each year and seek
re-election at the Annual General Meeting and that Directors newly
appointed by the Board should seek re-appointment at the next
Annual General Meeting. The Board complies with the requirement of
the UK Corporate Governance Code (September 2012) that all
Directors are required to submit themselves for re-election at
least every three years.
During the period covered by these Financial Statements the
following meetings were held:
Directors present 4 Full Board 2 Audit Committee
Meetings Meetings
Sir John Lucas-Tooth,
Chairman 4 2
Robert Reid 4 2
Christopher Harris 4 2
Audit Committee
The Board has appointed an audit committee of which Sir John
Lucas-Tooth is Chairman, which deals with matters relating to
audit, financial reporting and internal control systems. The
Committee meets as required and has direct access to Grant Thornton
UK LLP, the Company's auditor.
The audit committee safeguards the objectivity and independence
of the auditor by reviewing the nature and extent of non-audit
services supplied by the external auditor to the Company. The audit
committee has reviewed the non-audit service provided by the
external auditor, being corporation tax, and does not believe it is
sufficient to influence their independence or objectivity due to
the fee being an immaterial expense.
When considering whether to recommend the reappointment of the
external auditor the audit committee takes into account their
current fee tender compared to the external audit fees paid by
other similar companies. The audit committee will then recommend to
the Board the appointment of an external auditor which is ratified
at the Annual General Meeting.
The Auditing Practices Board requires the audit partner to
rotate every five years. The audit partner rotated this year, which
is a year ahead of the five year requirement. No audit tender has
been undertaken since the Company was incorporated.
The effectiveness of the external audit is assessed as part of
the Board evaluation conducted annually and by the quality and
content of the audit plan provided to the audit committee by the
external auditor and the discussions then held on topics raised.
The audit committee will challenge the external auditor at the
audit committee meeting if appropriate.
The audit committee's terms of reference include the following
roles and responsibilities:
-- reviewing and making recommendations to the Board in relation
to the Company's published Financial Statements and other formal
announcements or regulatory returns relating to the Company's
financial performance, reviewing significant financial reporting
judgements contained in them;
-- reviewing and making recommendations to the Board in relation
to the Company's internal control (including internal financial
control) and risk management systems;
-- periodically considering the need for an internal audit function;
-- making recommendations to the Board in relation to the
appointment, re-appointment and removal of the external auditor and
approving the remuneration and terms of engagement of the external
auditor;
-- reviewing and monitoring the external auditor's independence
and objectivity and the effectiveness of the audit process, taking
into consideration relevant UK professional regulatory
requirements;
-- monitoring the extent to which the external auditor is
engaged to supply non-audit services; and
-- ensuring that the Investment Manager has arrangements in
place for the investigation and follow-up of any concerns raised
confidentially by staff in relation to propriety of financial
reporting or other matters.
The committee reviews its terms of reference and effectiveness
annually and recommends to the Board any changes required as a
result of the review. The terms of reference are available on
request from the Company Secretary.
The Board considers that the members of the committee
collectively have the skills and experience required to discharge
their duties effectively, and that the Chairman of the committee
meets the requirements of the UK Corporate Governance Code
(September 2012) as to relevant financial experience.
The Company does not have an independent internal audit function
as it is not deemed appropriate given the size of the Company and
the nature of the Company's business. However, the committee
considers annually whether there is a need for such a function and,
if there were, would recommend it be established.
In respect of the year ended 31 March 2015, the audit committee
discharged its responsibilities by:
-- reviewing and approving the external auditor's terms of
engagement and remuneration and independence;
-- reviewing the external auditor's plan for the audit of the Financial Statements, including identification of key risks and confirmation of auditor independence;
-- reviewing TPIM's statement of internal controls operated in
relation to the Company's business and assessing those controls in
minimising the impact of key risks;
-- reviewing periodic reports on the effectiveness of TPIM's compliance procedures;
-- reviewing the appropriateness of the Company's accounting policies;
-- reviewing the Company's half-yearly results and draft annual
Financial Statements prior to Board approval;
-- reviewing the external auditor's audit plan document to the
audit committee on the annual Financial Statements; and
-- reviewing the Company's going concern status.
The audit committee is responsible for considering and reporting
on any significant issues that arise in relation to the Financial
Statements.
The key areas of risk that have been identified and considered
by the audit committee in relation to the business activities and
the Financial Statements of the Company are as follows:
-- valuation and existence of unquoted investments;
-- compliance with HM Revenue & Customs conditions for
maintenance of approved Venture Capital Trust status; and
-- ability to realise unquoted investments.
The audit committee relies on the Investment Manager to assess
the valuation of unquoted investments and the existence of those
investments. The Investment Manager has a director on the board of
all the investee companies and meets regularly with the other
directors and hence has an oversight of all the investments made.
The audit committee has reviewed the valuations and discussed them
with both the Investment Manager and the external auditor to
confirm the valuation of the unquoted investments and the existence
of those investments.
The Investment Manager has confirmed to the audit committee that
the conditions for maintaining the Company's status as an approved
Venture Capital Trust had been complied with throughout the year.
The position is also reviewed by Robertson Hare LLP in its capacity
as adviser to the Company on taxation matters.
The Investment Manager and the Directors have put in place a
programme to manage the realisation of investments over the course
of 2015, which has already begun.
The audit committee has considered the whole Report and Accounts
for the year ended 31 March 2015 and has reported to the Board that
it considers them to be fair, balanced and understandable providing
the information necessary for shareholders to assess the Company's
performance, business model and strategy.
Internal Control
The Directors have overall responsibility for keeping under
review the effectiveness of the Company's systems of internal
controls. The purpose of these controls is to ensure that proper
accounting records are maintained, the Company's assets are
safeguarded and the financial information used within the business
and for publication is accurate and reliable; such a system can
only provide reasonable and not absolute assurance against material
misstatement or loss. The system of internal controls is designed
to manage rather than eliminate the risk of failure to achieve
business objectives. As part of this process an annual review of
the internal control systems is carried out. The review covers all
material controls including financial, operational and risk
management systems. The Directors regularly review financial
results and investment performance with the Investment Manager.
The Directors have established an ongoing process designed to
meet the particular needs of the Company in identifying, evaluating
and managing risks to which it is exposed. The process adopted is
one whereby the Directors identify the risks to which the Company
is exposed including, among others, market risk, VCT qualifying
investment risk and operational risks which are recorded on a risk
register. The controls employed to mitigate these risks are
identified and the residual risks are rated taking into account the
impact of the mitigating factors. The risk register is updated
twice a year.
TPIM is engaged to provide administrative including accounting
services and retains physical custody of the documents of title
relating to investments.
The Directors regularly review the system of internal controls,
both financial and non-financial, operated by the Company and the
Investment Manager. These include controls designed to ensure that
the Company's assets are safeguarded and that proper accounting
records are maintained.
Internal control systems include the production and review of
quarterly bank reconciliations and management accounts. The VCT is
subject to a full annual audit. The auditors are the same auditors
as used by other VCTs managed by the Investment Manager. The
Investment Manager's procedures are subject to internal compliance
checks.
Going Concern
In line with the completion of shareholders' five year holding
period, the Company has begun the realisation of its investments.
Distributions will be made to shareholders and then the Board will
propose resolutions to place the Company into Members' Voluntary
Liquidation, which will require shareholders' approval. Thereafter
all further funds will be returned to shareholders by way of
capital distribution by the liquidators. In the circumstances these
Financial Statements have been prepared on a break-up basis taking
into account the expected costs of the Company's liquidation.
Relations with Shareholders
The Board recognises the value of maintaining regular
communications with shareholders. In addition to the formal
business of the Annual General Meeting, an opportunity is given to
all shareholders to question the Board and the Investment Manager
on matters relating to the Company's operation and performance. The
Board and the Investment Manager will also respond to any written
queries made by shareholders during the course of the year and both
can be contacted at 18 St Swithin's Lane, London, EC4N 8AD or on
020 7201 8989.
Compliance Statement
The Listing Rules require the Board to report on compliance with
the UK Corporate Governance Code (September 2012) provisions
throughout the accounting period. With the exception of the limited
items outlined below, the Directors consider that the Company has
complied throughout the period under review with the provisions set
out in the UK Corporate Governance Code (September 2012).
1. New Directors do not receive a full, formal and tailored
induction on joining the Board. Such matters are addressed on an
individual basis as they arise (B.4.1).
2. Due to the size of the Board and the nature of the Company's
business, a formal performance evaluation of the Board, its
committees, the individual Directors and the Chairman has not been
undertaken. Specific performance issues are dealt with as they
arise (B.6.1, B.6.3).
3. The Company does not have a senior Independent Director. The
Board does not consider such an appointment appropriate for the
Company (A.4.1).
4. The Company conducts a formal review as to whether there is a
need for an internal audit function. The Directors do not consider
that an internal audit would be an appropriate control for a
Venture Capital Trust (C.3.6).
5. As all the Directors are Non-Executive, it is not considered
appropriate to appoint a Nomination or Remuneration Committee
(B.2.1 and D.2.1).
6. The audit committee includes three Non-Executive Directors,
one of which is not considered independent. The Board regularly
reviews the independence of its Directors but does not consider it
appropriate to appoint an additional Director to the audit
committee (C.3.1).
On behalf of the Board
Sir John Lucas-Tooth
Chairman
4 June 2015
Directors' Responsibility Statement
The Directors are responsible for preparing the Strategic
Report, the Directors' Report, the Directors' Remuneration Report
and the Financial Statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare Financial
Statements for each financial year. Under that law the Directors
have elected to prepare the Financial Statements in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union. 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 and profit
or loss of the Company for that year. In preparing these Financial
Statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable IFRS have been followed, subject to
any material departures disclosed and explained in the Financial
Statements; and
-- prepare the Financial Statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
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 and the Remuneration report 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 confirm that:
-- so far as each of the Directors is aware there is no relevant
audit information of which the Company's auditor is unaware;
and
-- the Directors have taken all steps that they ought to have
taken as Directors in order to make themselves aware of any
relevant audit information and to establish that the auditor is
aware of that information.
The Directors are responsible for preparing the Annual Report in
accordance with applicable law and regulations. The Directors
consider the Annual Report and the Financial Statements, taken as a
whole, provide the information necessary to assess the Company's
performance, business model and strategy and are fair balanced and
understandable.
The Company's Financial Statements are published on the TPIM
website, www.triplepoint.co.uk. The maintenance and integrity of
this website is the responsibility of TPIM and not of the Company.
Legislation in the United Kingdom governing the preparation and
dissemination of Financial Statements may differ from legislation
in other jurisdictions.
To the best of our knowledge:
-- the Financial Statements, prepared in accordance with IFRS as
adopted by the European Union, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
Company; and
-- the annual report including the Strategic Report includes a
fair review of the development and performance of the business and
the position of the Company, together with a description of the
principal risks and uncertainties that it faces.
On behalf of the Board
Sir John Lucas-Tooth
Chairman
4 May 2015
Directors' Remuneration Report
Introduction
This report is submitted in accordance with schedule 8 of the
Large and Medium Sized Companies and Groups (Accounts and Reports)
Regulations 2008, in respect of the year ended 31 March 2015. This
report also meets the Financial Conduct Authority's Listing Rules
and describes how the Board has applied the principles relating to
Directors' remuneration set out in UK Corporate Governance Code
(issued September 2012). The reporting requirements require two
sections to be included, a Policy Report and an Annual Remuneration
Report which are presented below.
Directors' Remuneration Policy Report
This statement of the Directors' Remuneration Policy took effect
following approval by shareholders at the Annual General Meeting on
24 July 2014. The Board currently comprises three Directors, all of
whom are Non-Executive. The Board does not have a separate
remuneration committee as the Company has no employees or executive
directors. The Board has not retained external advisers in relation
to remuneration matters but has access to information about
Directors' fees paid by other companies of a similar size and type.
No views which are relevant to the formulation of the Directors'
remuneration policy have been expressed to the Company by
shareholders, whether at a general meeting or otherwise.
The Board's policy is that the remuneration of Non-Executive
Directors should reflect the experience of the Board as a whole, be
fair and be comparable with that of other relevant Venture Capital
Trusts that are similar in size and have similar investment
objectives and structures. Furthermore, the level of remuneration
should be sufficient to attract and retain the Directors needed to
oversee the Company properly and to reflect the specific
circumstances of the Company, the duties and responsibilities of
the Directors and the value and amount of time committed to the
Company's affairs. The articles of association provide that the
Directors shall be paid in aggregate a sum not exceeding GBP100,000
per annum. None of the Directors is eligible for bonuses, pension
benefits, share options, long-term incentive schemes or other
benefits in respect of their services as Non-Executive Directors of
the Company.
The articles of association provide that Directors shall retire
and be subject to re-election at the first Annual General Meeting
after their appointment and that any Director who has not been
re-elected for three years shall retire and be subject to
re-election at the Annual General Meeting. Also any Director not
considered independent shall retire each year and offer himself for
re-election at the Annual General Meeting. The Directors' service
contracts provide for an appointment of twelve months, after which
three months written notice must be given by either party. A
Director who ceases to hold office is not entitled to receive any
payment other than accrued fees (if any) for past services. The
same policies will apply if a new Director is appointed.
Details of each of the Director's contract is shown below. The
Chairman is paid more than the other Directors to reflect the
additional responsibilities of that role. There are no other fees
payable to the Directors for additional services outside of their
contracts.
Unexpired term Annual rate
Date of of contract at of Directors'
Contract 31 March 2015 fees
GBP
Sir John Lucas-Tooth
(Chairman) 12-Sep-2008 none 15,000
Robert Reid 12-Sep-2008 none 12,500
Christopher Harris 02-Jun-2011 none 12,500
---------------------- -------------- ----------------- ---------------
Annual Remuneration Report
The remuneration policy described above was implemented on 24
July 2014 after approval at the Annual General Meeting and will
remain unchanged for a three year period. The Board will review the
remuneration of the Directors in line with the VCT industry on an
annual basis, if thought appropriate. Otherwise, only a change in
role is likely to incur a change in remuneration of any one
Director.
Directors' Remuneration (audited information)
The fees paid to Directors in respect of the year ended 31 March
2015 and the prior year are shown below:
Emoluments for Emoluments for
the year ended the year ended
31 March 2015 31 March 2014
GBP GBP
Sir John Lucas-Tooth
(Chairman) 15,000 15,000
Robert Reid 12,500 12,500
Christopher Harris 12,500 12,500
40,000 40,000
Employers' NI contributions - 1,671
Total Emoluments 40,000 41,671
------------------------------ ---------------- ----------------
None of the Directors is eligible for bonuses, pension benefits,
share options, long-term incentive schemes or other benefits in
respect of their services as Non-Executive Directors of the
Company.
Information required on executive Directors, including the Chief
Executive Officer and employees, has been omitted because the
Company has neither and therefore it is not relevant.
Directors emoluments compared to payments to shareholders:
31 March 2015 31 March 2014
GBP'000 GBP'000
Dividends paid:
Ordinary Shareholders 5,867 941
B Shareholders 1,858 -
-------------- ---------------
Total Dividends paid 7,725 941
Share buy-backs - 38
-------------- ---------------
Total payments to
shareholders 7,725 979
-------------- ---------------
Total Directors' emoluments 40 40
-------------- ---------------
Directors' Share Interests (audited information)
At 31 March 2015 The Directors held no shares in the Company
(2014: none). At 31 March 2015 no connected parties to the
Directors held any shares (2014: nil). There have been no changes
in the holdings of the Directors between 31 March 2015 and the date
of this report. There are no requirements or restrictions on
Directors holding shares in the Company.
Company Performance
There have been no trades in the Company's shares to date.
Therefore, no performance graph comparing the share price of the
Company over the year ended 31 March 2015 with the total return
from a notional investment in the FTSE All-Share index over the
same period has been included.
No market maker has been appointed and therefore no current bid
and offer price is available for the Company's shares. However the
Board's policy is to buy back shares from shareholders at a 10%
discount to net asset value. The Company will produce a graph of
its share performance if there is sufficient activity that the
graph would be meaningful to shareholders.
Statement of Voting at the Annual General Meeting
The 2014 Remuneration Report was presented to the Annual General
Meeting in July 2014 and received shareholder approval following a
vote 90% were in favour and no one abstained.
The Directors Remuneration Policy was presented to the Annual
General Meeting in July 2014 and received shareholder approval
following a vote 90% were in favour and no one abstained.
Statement of the Chairman
The Directors' fees are fixed at GBP15,000 per annum for the
Chairman and GBP12,500 per annum for other Directors. There have
been no changes in their fees since the date of their appointment.
The remuneration of the Directors reflects the experience of the
Board as a whole, is fair and comparable with that of other
relevant Venture Capital Trusts that are similar in size and have
similar investment objectives and structures. The fees are
sufficient to attract and retain the Directors needed to oversee
the Company's affairs.
On behalf of the Board
Sir John Lucas-Tooth
Chairman
4 June 2015
Independent Auditor's Report to the Members of TP5 VCT plc
Our opinion on the financial statements is unmodified
In our opinion the financial statements:
-- give a true and fair view of the state of the Company's
affairs as at 31 March 2015 and of its profit for the year then
ended;
-- have been properly prepared in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European
Union; and
-- have been prepared in accordance with the requirements of the
Companies Act 2006.
Emphasis of matter - basis of preparation
In forming our opinion on the Financial Statements, which is not
modified, we have considered the adequacy of the disclosure made in
note 2 to the Financial Statements. As explained in note 2,
following completion of the shareholders' five year hold period,
steps have been taken to realise the Company's investments. It is
the Directors' present intention that as part of the realisation
process the Company should be placed into Members' Voluntary
Liquidation. The Financial Statements have not therefore been
prepared on the going concern basis, but instead have been drawn up
on a break-up basis.
Who are we reporting to
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16
of the Companies Act 2006. Our audit work has been undertaken so
that we might state to the Company's
members those matters we are required to state to them in an
auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the
Company and the Company's members as a body, for our audit work,
for this report, or for the opinions
we have formed.
What we have audited
TP5 VCT plc's financial statements comprise the Statement of
Comprehensive income, the Balance Sheet, the Statement of Changes
in Shareholders' Equity, the Statement of Cash Flows and the
related notes.
The financial reporting framework that has been applied in their
preparation is applicable law and IFRSs as adopted by the European
Union.
Our assessment of risk
In arriving at our opinions set out in this report, we highlight
the following risks that are, in our judgement, likely to be most
important to users' understanding of our audit.
Valuation of unquoted investments
The risk: The investment objective was to deliver more secure
returns than is generally the case in venture capital investments,
combined in the case of the B Share Fund with the potential for
enhanced returns through a leveraged exposure to a fund of hedge
funds. Unquoted investments amount by value to 95.8% of the
company's total assets, and are designated as being at fair value
through profit or loss. Measurement of the value of an unquoted
investment includes significant assumptions and judgements. We
therefore identified the valuation of unquoted investments as a
significant risk requiring special audit consideration.
Our response: Our audit work included, but was not restricted
to, obtaining an understanding of how the valuations were performed
by obtaining the underlying models from the investment manager,
attending the audit committee meeting to discuss the review
process, consideration of whether the valuations were made in
accordance with published guidance, in particular the IPEVC
valuation guidance, discussions with the investment manager on the
choice of valuation methodology and assumptions made, and reviewing
and challenging the basis and reasonableness of the assumptions
made by the investment manager in conjunction with available
supporting information, such as the corroboration of financial
inputs to the relevant investee company management accounts or
offer letter and testing a sample of other inputs by using our
valuation specialists.
The Company's accounting policy on the valuation of unquoted
investments is included in the accounting policies in note 2, and
its disclosures about unquoted investments held at the year end are
included in notes 10 and 11. The Audit Committee also identified
and considered the valuation and existence of unquoted investments
as a key area of risk in the Corporate Governance Statement on page
23.
Revenue recognition
The risk: Revenue consists of interest earned on loans to
investee companies and cash balances, and dividend income received
from investee companies. Revenue is a key factor in demonstrating
the performance of the portfolio and its recognition is a key
issue. We therefore identified the recognition of revenue as a
significant risk requiring special audit attention.
Our response: We identified and evaluated the controls relating
to revenue recognition and undertook testing of interest income by
comparing the actual to expected income, calculated using the
interest rates in the loan instruments. We reviewed and tested the
appropriateness of the accounting policy and whether the accounting
policy had been applied correctly. For accrued interest income we
reviewed management's assessment of recoverability by checking to
post year end receipts and also discussion with management.
The company's accounting policy on income recognition is
included in note 2, and its disclosures about income recognised in
the year within note 4.
Our application of materiality and an overview of the scope of
our audit
Materiality
We define materiality as the magnitude of misstatement in the
financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or
influenced. We determined materiality for the audit of the
financial statements as a whole to be GBP95,000, which is 0.75% of
the Company's net assets. This benchmark is considered the most
appropriate because net assets, which are primarily composed of the
company's investment portfolio are the key driver for the Company's
business. We use a different level of materiality, performance
materiality, to drive the extent of our testing and this was set at
75% of financial statement materiality. We also determine a lower
level of specific materiality for certain areas such as expenses,
investment income, directors' remuneration and related party
transactions.
We determined the threshold at which we will communicate
misstatements to the audit committee to be GBP4,800. In addition we
will communicate misstatements below that threshold that, in our
view, warrant reporting on qualitative grounds.
Overview of the scope of our audit
We conducted our audit in accordance with International
Standards on Auditing (ISAs) (UK and Ireland). Our responsibilities
under those standards are further described in the
'Responsibilities for the financial statements and the audit'
section of our report. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
We are independent of the Company in accordance with the
Auditing Practices Board's Ethical Standards for Auditors, and we
have fulfilled our other ethical responsibilities in accordance
with those Ethical Standards.
Our audit approach was based on a thorough understanding of the
Company's business and is risk-based. The day-to-day management of
the Company's investment portfolio, the custody of its investments
and the maintenance of the Company's accounting records is
outsourced to a third-party service provider. Accordingly, our
audit work is focussed on obtaining an understanding of, and
evaluating, internal controls at the Company and the third-party
service provider, and inspecting records and documents held by the
third-party service provider. We undertook substantive testing on
significant transactions, balances and disclosures, the extent of
which was based on various factors such as our overall assessment
of the control environment, the design effectiveness of controls
over individual systems and the management of specific risks.
Other reporting required by regulations
Our opinion on other matters prescribed by the Companies Act
2006 is unmodified
In our opinion:
-- the part of the Directors' Remuneration Report to be audited
has been properly prepared in accordance with the Companies Act
2006; and
-- the information given in the Strategic Report and Report of
the Directors for the financial year for which the financial
statements are prepared is consistent with the financial
statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the ISAs (UK and Ireland), we are required to report to
you if, in our opinion, information in the annual report is:
-- materially inconsistent with the information in the audited financial statements; or
-- apparently materially incorrect based on, or materially
inconsistent with, our knowledge of the Company acquired in the
course of performing our audit; or
-- otherwise misleading.
In particular, we are required to report to you if:
-- we have identified any inconsistencies between our knowledge
acquired during the audit and the directors' statement that they
consider the annual report is fair, balanced and understandable;
or
-- the annual report does not appropriately disclose those
matters that were communicated to the audit committee which we
consider should have been disclosed.
Under the Companies Act 2006 we are required to report to you
if, in our opinion:
-- adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the financial statements and the part of the Directors'
Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
-- certain disclosures of directors' remuneration specified by
law are not made; or
-- we have not received all the information and explanations we
require for our audit.
Under the Listing Rules, we are required to review:
-- the directors' statement, set out on page 24, in relation to
going concern; and
-- the part of the Corporate Governance Statement relating to
the Company's compliance with the ten provisions of the UK
Corporate Governance Code specified for our review.
Responsibilities for the financial statements and the audit
What an audit of financial statements involves:
A description of the scope of an audit of financial statements
is provided on the Financial Reporting Council's website at
www.frc.org.uk/auditscopeukprivate
What the directors are responsible for:
As explained more fully in the Directors' Responsibilities
Statement set out on page 26, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view.
What are we responsible for:
Our responsibility is to audit and express an opinion on the
financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board's
Ethical Standards for Auditors.
Nicholas Page
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
4 June 2015
Unaudited Non-Statutory Analysis of - The Ordinary Share
Fund
Year ended Year ended
Statement of Comprehensive
Income Note 31 March 2015 31 March 2014
---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 4 392 - 392 585 - 585
Realised gain on investments - 38 38 - - -
Unrealised gain on investments - 1,488 1,488 - 303 303
Investment return 392 1,526 1,918 585 303 888
Investment management
fees 5 (136) (45) (181) (290) (97) (387)
Other expenses (93) - (93) (139) - (139)
Profit before taxation 163 1,481 1,644 156 206 362
Taxation 8 (44) 44 - (31) 31 -
Profit after taxation 119 1,525 1,644 125 237 362
-------- -------- -------- -------- -------- --------
Profit and total comprehensive
income for the year 119 1,525 1,644 125 237 362
-------- -------- -------- -------- -------- --------
Basic and diluted earnings
per share 9 0.64p 8.13p 8.77p 0.67p 1.26p 1.93p
-------- -------- -------- -------- -------- --------
Balance Sheet Note 31 March 2015 31 March 2014
GBP'000 GBP'000
Non-current assets
Financial assets at fair
value through profit
or loss 10 - 15,343
-------- --------
Current assets
Assets held for sale 11 10,872 -
Receivables 12 25 115
Cash and cash equivalents 13 447 101
11,344 216
-------- --------
Current liabilities
Payables 14 (86) (79)
-------- --------
Net assets 11,258 15,480
-------- --------
Equity attributable to equity
holders 11,258 15,480
-------- --------
Net asset value per share 17 60.00p 82.50p
-------- --------
Statement of Changes
in Shareholders' Equity
31 March
31 March 2015 2014
GBP'000 GBP'000
Opening shareholders'
funds 15,480 16,097
Purchase of own shares - (38)
Profit for the year 1,644 362
Dividend paid (5,866) (941)
Closing shareholders'
funds 11,258 15,480
-------- --------
Unaudited Non-Statutory Analysis of - The B Share Fund
Year ended Year ended
Statement of Comprehensive
Income Note 31 March 2015 31 March 2014
---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 4 48 - 48 72 - 72
Realised gain on investments - 5 5 - 123 123
Unrealised gain on investments - 184 184 - 37 37
-------- --------
Investment return 48 189 237 72 160 232
Investment management
fees 5 (24) (8) (32) (57) (19) (76)
Other expenses (25) - (25) (33) - (33)
(Loss)/profit before taxation (1) 181 180 (18) 141 123
Taxation 8 - - - - - -
(Loss)/profit after taxation (1) 181 180 (18) 141 123
-------- -------- -------- -------- -------- --------
Profit and total comprehensive
income for the year (1) 181 180 (18) 141 123
-------- -------- -------- -------- -------- --------
Basic and diluted earnings/(loss)
per share 9 - 5.24p 5.24p (0.56p) 4.09p 3.53p
-------- -------- -------- -------- -------- --------
Balance Sheet
Note 31 March 2015 31 March 2014
Non-current assets GBP'000 GBP'000
Financial assets at fair
value through profit or
loss 10 - 1,896
-------- --------
Current assets
Assets held for sale 11 1,344 -
Receivables 12 3 576
Cash and cash equivalents 13 93 646
1,440 1,222
-------- --------
Current liabilities
Payables 14 (12) (11)
-------- --------
Net assets 1,428 3,107
-------- --------
Equity attributable to
equity holders 1,428 3,107
-------- --------
Net asset value per share 17 41.41p 90.07p
-------- --------
Statement of Changes in
Shareholders' Equity
31 March 2015 31 March 2014
GBP'000 GBP'000
Opening shareholders'
funds 3,107 2,984
Profit for the year 180 123
Dividends paid (1,859) -
Closing shareholders'
funds 1,428 3,107
-------- --------
Statement of Comprehensive Income
Year ended Year ended
31 March 2015 31 March 2014
---------------------------- ----------------------------
Note Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income
Investment income 4 440 - 440 657 - 657
Gain arising on the
disposal of investments
during the year - 43 43 - 123 123
Gain arising on the
revaluation of investments
at the year end - 1,672 1,672 - 340 340
Investment return 440 1,715 2,155 657 463 1,120
-------- -------- -------- -------- -------- --------
Expenses
Investment management
fees 5 160 53 213 347 116 463
Financial and regulatory
costs 23 - 23 27 - 27
General administration 7 - 7 13 - 13
Legal and professional
fees 6 48 - 48 92 - 92
Directors' remuneration 7 40 - 40 40 - 40
Operating expenses 278 53 331 519 116 635
-------- -------- -------- -------- -------- --------
Profit before taxation 162 1,662 1,824 138 347 485
Taxation 8 (44) 44 - (31) 31 -
Profit after taxation 118 1,706 1,824 107 378 485
-------- -------- -------- -------- -------- --------
Profit and total comprehensive
income for the year 118 1,706 1,824 107 378 485
-------- -------- -------- -------- -------- --------
Basic & diluted (loss)/profit
per share 9 n/a n/a n/a n/a n/a n/a
-------- -------- -------- -------- -------- --------
The total column of this statement is the Statement of
Comprehensive Income of the Company prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union. The supplementary revenue return and capital
columns have been prepared in accordance with the Association of
Investment Companies Statement of Recommended Practice (AIC SORP
2009).
All revenue and capital items in the above statement derive from
continuing operations.
This Statement of Comprehensive Income includes all recognised
gains and losses.
The accompanying notes are an integral part of these
statements.
Balance Sheet
31 March
Notes 31 March 2015 2014
GBP'000 GBP'000
Non-current assets
Financial assets
at fair value through
profit or loss 10 - 17,239
-------------- ---------
Current assets
Assets held for sale 11 12,216 -
Receivables 12 28 691
Cash and cash equivalents 13 540 747
12,784 1,438
-------------- ---------
Total assets 12,784 18,677
-------------- ---------
Current liabilities
Payables 14 (98) (90)
-------------- ---------
Net assets 12,686 18,587
-------------- ---------
Equity attributable
to equity holders
Share capital 15 221 221
Capital redemption
reserve 2 2
Share premium - 3,230
Special distributable
reserve 11,546 15,936
Capital reserve 797 (909)
Revenue reserve 120 107
Total equity 12,686 18,587
-------------- ---------
The statements were approved by the Directors and authorised for
issue on 4 June 2015 and are signed on their behalf by:
Sir John Lucas-Tooth
Chairman
4 June 2015
Company registration number 6614532.
The accompanying notes are an integral part of this
statement.
Statement of Changes in Shareholders' Equity
Capital Special
Year ended 31 March Share Redemption Share Distributable Capital Revenue
2015 Capital Reserve Premium Reserve Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening Balance 221 2 3,230 15,936 (909) 107 18,587
--------- ------------ --------- --------------- --------- --------- --------
Cancellation of
share premium - (3,230) 3,230 - - -
Dividend paid - - (7,620) (105) (7,725)
Transactions with
owners - - (3,230) (4,390) - (105) (7,725)
--------- ------------ --------- --------------- --------- --------- --------
Profit for the year - - - - 1,706 118 1,824
--------- ------------ --------- --------------- --------- ---------
Total comprehensive
income for the year - - - 1,706 118 1,824
--------- ------------ --------- --------------- --------- --------- --------
Balance at 31 March
2015 221 2 - 11,546 797 120 12,686
========= ============ ========= =============== ========= ========= ========
Capital reserve Investment holding
consists of: gains 1,946
Other realised
losses (1,149)
797
=========
Capital Special
Year ended 31 March Share Redemption Share Distributable Capital Revenue
2014 Capital Reserve Premium Reserve Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening Balance 222 1 3,230 16,827 (1,287) 88 19,081
--------- ------------ --------- --------------- --------- --------- --------
Purchase of own
shares (1) 1 - (38) - - (38)
Dividends paid - - - (853) - (88) (941)
Transactions with
owners (1) 1 - (891) - (88) (979)
--------- ------------ --------- --------------- --------- --------- --------
Profit for the year - - - - 378 107 485
--------- ------------ --------- --------------- --------- ---------
Total comprehensive
income for the year - - - - 378 107 485
--------- ------------ --------- --------------- --------- --------- --------
Balance at 31 March
2014 221 2 3,230 15,936 (909) 107 18,587
========= ============ ========= =============== ========= ========= ========
Capital reserve
consists of: Investment holding gains 360
Other realised losses (1,269)
(909)
=========
On 6 June 2014 the remaining balance on the share premium
account was cancelled. The special distributable reserve was
created on court cancellation of the share premium account on 18
August 2011 and 6 June 2014. The capital reserve represents the
proportion of Investment Management fees charged against capital
and realised/unrealised gains or losses on the disposal/revaluation
of investments. The capital reserve is not distributable. The
revenue and special distributable reserve are distributable by way
of dividend.
Statement of Cash Flows
Year ended Year ended
31 March 2015 31 March 2014
GBP'000 GBP'000
Cash flow from operating activities
Profit before tax 1,824 485
(Gain) arising on the disposal
of investments during the year (43) (123)
(Gain) arising on the revaluation
of investments at the year end (1,672) (340)
Cash generated by operations 109 22
Decrease/(increase) in receivables 102 (60)
Increase in payables 8 62
Net cash flows from operating
activities 219 24
-------------- --------------
Cash flow from investing activities
Purchase of financial assets
at fair value through profit
or loss - (2,000)
Proceeds of sale of financial
assets at fair value through
profit or loss 7,299 3,467
Net cash flows from investing
activities 7,299 1,467
-------------- --------------
Cash flow from financing activities
Purchase of own shares - (38)
Dividends paid (7,725) (941)
Net cash flow from financing (7,725) (979)
-------------- --------------
Net cash (decrease)/increase
in cash and cash equivalents (207) 512
-------------- --------------
Reconciliation of net cash flow
to movements in cash and cash
equivalents
Cash and cash equivalents brought
forward 747 235
Net cash (decrease)/increase
in cash and cash equivalents (207) 512
Cash and cash equivalents 540 747
-------------- --------------
The accompanying notes are an integral part of these
statements.
Notes to the Financial Statements
1. Corporate Information
The Financial Statements of the Company for the year ended 31
March 2015 were authorised for issue in accordance with a
resolution of the Directors on 4 June 2015.
The Company was admitted for listing on the London Stock
Exchange on 14 November 2008.
TP5 VCT Plc is incorporated and domiciled in Great Britain and
registered in England and Wales. The address of TP5 VCT plc's
registered office, which is also its principal place of business,
is 18 St Swithin's Lane, London EC4N 8AD.
TP5 VCT plc's Financial Statements are presented in Pounds
Sterling (GBP), rounded to the nearest thousand.
The principal activity of the Company is investment.
The Ordinary Share Fund's investment policy from launch has been
to invest at least 70% of its funds into VCT qualifying companies
within three years and a maximum of 30% of its funds into
non-qualifying investments. Prior to deployment in VCT qualifying
investments, the Fund's objective was to expose all of its
investments to non-qualifying Goldman Sachs Assets Management
("GSAM") managed funds, with the objective of generating returns
equivalent to or greater than LIBOR, (the 'LIBOR plus'
portfolio).
The investment policy for the B Share Fund follows TP70 2009 VCT
plc's original investment policy of investing 70% of its funds into
VCT qualifying companies within three years. Prior to deployment in
VCT qualifying investments, 70% of the Fund was to be invested into
cash and fixed interest funds selected for credit qualifying,
liquidity and returns. The remaining 30% of the B Share Fund
remained exposed directly or indirectly to GAM Diversity GBP 2.5XL
until 31 March 2014.
2. Basis of Preparation and Accounting Policies
Basis of Preparation
Following completion of shareholders five year holding period,
steps have been taken to realise the Company's investments. The
Board's intention will be to propose resolutions to place the
Company into Members Voluntary Liquidation after completion of the
realisation of unquoted investments which will require shareholders
approval. Thereafter all funds will be returned to shareholders by
way of capital distribution by the liquidators. In the
circumstances these Financial Statements have been prepared on a
break up basis taking into account the expected costs of the
Company's liquidation.
The Financial Statements of the Company for the year to 31 March
2015 have been prepared in accordance with International Financial
Reporting Standards ("IFRS") adopted for use in the European Union
and comply with the Statement of Recommended Practice: "Financial
Statements of Investment Trust Companies and Venture Capital
Trusts" (SORP) issued by the Association of Investment Companies
(AIC) in January 2009, in so far as this does not conflict with
IFRS.
The Board will be proposing resolutions to place the Company
into Members' Voluntary Liquidation (when the investment
realisation programme is complete) which will require shareholders'
approval. As such, these Financial Statements have been prepared on
a break up basis, taking into account the expected costs of the
Company's liquidation.
The preparation of Financial Statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of policies and the reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
various other factors believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ
from these judgements.
The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities relate to:
-- the valuation of unlisted financial investments held at fair
value through profit or loss which are valued on the basis noted
below (in the section headed "non-current asset investments");
-- the recognition or otherwise of accrued income on loan notes
and similar instruments granted to investee companies which is
assessed in conjunction with the overall valuation of unlisted
financial investments as noted above.
The key judgements made by Directors are in the valuation of
non-current assets. The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the
revision affects that period or in the period of revision and
future periods if the revision affects both current and future
periods. The carrying value of investments is disclosed in note 10
and 11.
The Directors do not believe that there are any further key
judgements made in applying accounting policies or estimates in
respect of the Financial Statements.
These Financial Statements have been prepared in accordance with
the accounting policies set out below which are based on the
recognition and measurement principles of IFRS in issue as adopted
by the European Union (EU).
These accounting policies have been applied consistently in
preparing these Financial Statements.
Standards issued but not yet effective
The following new standards, amendments to standards and
interpretations are not yet effective for the year ended 31 March
2015, and have not been applied in preparing these Financial
Statements
-- IFRS 9 Financial Instruments (effective 1 January 2018)
-- IFRS 14 Regulatory Deferral Accounts (effective 1 January
2016)
-- Amendments to IFRS 11: Accounting for Acquisitions of
Interests in Joint Operations (effective 1 January 2016)
-- Clarification of Acceptable Methods of Depreciation and
Amortisation - Amendments to IAS 16 and IAS 38
(effective 1 January 2016)
-- Annual Improvements to IFRSs 2010-2012 Cycle (effective 1
July 2014)
-- Annual Improvements to IFRSs 2011-2013 Cycle (effective 1
July 2014)
-- Annual Improvements to IFRSs 2012-2014 Cycle (effective 1
January 2016)
-- Amendments to IAS 27: Equity Method in Separate Financial
Statements (effective 1 January 2016)
-- Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture - Amendments to IFRS 10
and IAS 28 (effective 1 January 2016)
All of these changes will be applied by the Company from the
effective date but none of them are expected to have a significant
impact on the Company's Financial Statements.
Presentation of Statement of Comprehensive Income
In order better to reflect the activities of a Venture Capital
Trust, and in accordance with the guidance issued by the
Association of Investment Companies, supplementary information
which analyses the Statement of Comprehensive Income between items
of a revenue and capital nature has been presented alongside the
Income Statement.
Capital Management
Capital management is monitored and controlled using the
internal control procedures set out on page 24. The capital being
managed includes equity and fixed interest VCT qualifying
investments, cash balances and liquid resources including debtors
and creditors.
The Company has no external debt; consequently all capital is
represented by the value of share capital, distributable and other
reserves. Total shareholder equity at 31 March 2015 was GBP12.7
million (2014: GBP18.6 million).
Non-Current Asset Investments
The Company invests in financial assets with a view to profiting
from their total return through income and capital growth. These
investments are managed and their performance is evaluated on a
fair value basis in accordance with the investment policy detailed
in the Strategic Report on page 4 and information about the
portfolio is provided internally on that basis to the Company's
Board of Directors. Accordingly upon initial recognition the
investments are designated by the Company as "at fair value through
profit or loss" in accordance with IAS39, "Financial instruments
recognition and measurement". They are included initially at fair
value, which is taken to be their cost (excluding expenses
incidental to the acquisition which are written off in the
Statement of Comprehensive Income and allocated to "capital" at the
time of acquisition). Subsequently the investments are valued at
"fair value" which is the price that would be received if an asset
is sold or paid to transfer a liability (exit price) in an orderly
transaction between market participants at the measurement date.
This is measured as follows:
-- unlisted investments are fair valued by the Directors in
accordance with the International Private Equity and Venture
Capital Valuation Guidelines. Fair value is established by using
measurements of value such as price of recent transactions,
discounted cash flows, cost, and initial cost of investment;
and
-- listed investments are fair valued at bid price on the relevant date.
Where securities are designated upon initial recognition as at
fair value through profit or loss, gains and losses arising from
changes in fair value are included in the Statement of
Comprehensive Income for the year as capital items in accordance
with the AIC SORP 2009. The profit or loss on disposal is
calculated net of transaction costs of disposal.
Investments are recognised as financial assets on legal
completion of the investment contract and are de-recognised on
legal completion of the sale of an investment.
Due to the intention of the Board to put the Company into
Members' Voluntary Liquidation, all investments are held at the
value expected to be realised on disposal. Assets disposed of since
the year end have been valued in the Financial statements at the
price achieved.
Assets Held for Sale
Current assets classified as held for sale are presented
separately and measured at the value expected to be realised on
disposal, which is equivalent to fair value.
Income
Investment income includes interest earned on bank balances
includes income tax withheld at source. Dividend income is shown
net of any related tax credit and is brought into account on the
ex-dividend date.
Fixed returns on investment loans and debt are recognised on a
time apportionment basis so as to reflect the effective yield,
provided there is no reasonable doubt that payment will be received
in due course.
Expenses
All expenses are accounted for on the accruals basis. Expenses
are charged to revenue with the exception of the investment
management fee, which has been charged 75% to the revenue account
and 25% to the capital account (2014: 75% revenue, 25% capital) to
reflect, in the Directors' opinion, the expected long term split of
returns in the form of income and capital gains respectively from
the investment portfolio.
The Company's general expenses are split between the Ordinary
Share Fund and B Share Fund using the original net assets value of
each Share Class divided by the total net asset value of the
Company.
Taxation
Corporation tax payable is applied to profits chargeable to
corporation tax, if any, at the current rate in accordance with IAS
12, "Income Taxes". The tax effect of different items of
income/gain and expenditure/loss is allocated between capital and
revenue on the "marginal" basis as recommended by the SORP.
In accordance with IAS 12, deferred tax is recognised using the
balance sheet method providing for temporary differences between
the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. A
deferred tax asset is recognised to the extent that it is probable
that future taxable profits will be available against which the
temporary difference can be utilised. Deferred tax is measured at
the tax rates that are expected to be applied to the temporary
differences when they reverse, based on the laws that have been
enacted or substantively enacted by the reporting date. The
Directors have considered the requirements of IAS 12 and do not
believe that any provision should be made.
Financial Instruments
The Company's principal financial assets are its investments and
the accounting policies in relation to those assets are set out
above. Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the entity after deducting all
of its financial liabilities. Where the contractual terms of share
capital do not have any terms meeting the definition of a financial
liability then this is classed as an equity instrument. Dividends
and distributions relating to equity instruments are debited direct
to equity.
Issued Share Capital
Ordinary shares are classified as equity because they do not
contain an obligation to transfer cash or another financial asset.
Issue costs associated with the allotment of shares have been
deducted from the share premium account in accordance with IAS
32.
Cash and Cash Equivalents
Cash and cash equivalents representing cash available at less
than 3 months' notice are classified as loans and receivables under
IAS 39.
Reserves
The revenue reserve (retained earnings) and capital reserve
reflect the guidance in the AIC SORP 2009. On 6 June 2014 the
remaining balance on the share premium account was cancelled. The
special distributable reserve was created on court cancellation of
the share premium account on 18 August 2011 and 6 June 2014. The
capital reserve represents the proportion of Investment Management
fees charged against capital and realised/unrealised gains or
losses on the disposal/revaluation of investments. The capital
reserve is not distributable. The revenue and special distributable
reserve are distributable by way of dividend.
3. Segmental Reporting
The Company only has one class of business, being investment
activity. All revenues and assets are generated and held in the
UK.
4. Investment Income
Year ended Year ended
31 March 2015 31 March 2014
----------------------------- -----------------------------
Ord. Ord.
Shares B Shares Total Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loan Stock Interest 390 48 438 584 72 656
Bank interest 2 - 2 1 - 1
392 48 440 585 72 657
-------- --------- -------- -------- --------- --------
5. Investment Management Fees
TPIM provides investment management and administration services
to the Company under an Investment Management Agreement effective
14 November 2008. The agreement provides for an administration fee
of 0.25% and an investment management fee of 2.25% per annum of net
assets for both Ordinary and B shares. The investment management
fee was calculated and payable quarterly in arrear and ran for the
period up to 1 October 2014, whereas the administration fee
continues to be paid.
6. Legal and Professional Fees
Legal and professional fees include remuneration paid to the
Company's auditor, Grant Thornton UK LLP as shown in the following
table:
Year ended Year ended
31 March 2015 31 March 2014
----------------------------- -----------------------------
Ord. Ord.
Shares B Shares Total Shares B Shares Total
Fees payable to the
Company's auditor: GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
- for the audit of
the Financial Statements 16 3 19 15 3 18
- for taxation compliance
services 3 - 3 2 - 2
19 3 22 17 3 20
7. Directors' Remuneration
The only remuneration received by the Directors was their
Directors' fees. The Company has no employees other than the
Non-Executive Directors. The average number of Non-Executive
Directors in the year was three. Full disclosure of Directors'
remuneration is included in the Directors' Remuneration report.
Year ended Year ended
31 March 2015 31 March 2014
----------------------------- -----------------------------
Ord. Ord.
Shares B Shares Total Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Sir John Lucas-Tooth
(Chairman) 13 2 15 13 2 15
Robert Reid 11 2 13 11 2 13
Christopher Harris 10 2 12 10 2 12
34 6 40 34 6 40
-------- --------- -------- -------- --------- --------
8. Taxation
Capital gains and losses are exempt from corporation tax due to
the Company's status as a Venture Capital Trust.
Year ended Year ended
31 March 2015 31 March 2014
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Total
Profit before taxation 162 1,662 1,824 138 347 485
Corporation tax at 20% 33 332 365 27 69 96
Effect of:
Capital losses not taxable - (343) (343) - (92) (92)
Utilisation of tax losses brought
forward 11 (33) (22) 4 (8) (4)
Tax charge/(credit) in the year 44 (44) - 31 (31) -
Excess management charges of GBP728,000 (2014: GBP838,000) have
been carried forward at 31 March 2015 and are available for offset
against future taxable income subject to agreement with HM Revenue
& Customs.
9. Earnings/(loss) per Share
The profit per share is not included on a total basis in the
Statement of Comprehensive Income as the profit per share by class
is deemed to be a more accurate reflection of the results. The
profit per share for Ordinary shares is based on the profit after
tax of GBP1,644,000 (2014: GBP362,000), and on the weighted average
number of shares in issue during the period of 18,761,011 (2013:
18,780,737).
The profit per share for B shares is based on the profit after
tax of GBP180,000 (2014: GBP123,000), and on the weighted average
number of shares in issue during the period of 3,448,044 (2014:
3,448,044).
10. Financial Assets at Fair Value through Profit or Loss
Investments
Fair Value Hierarchy:
Level 1: quoted prices on active markets for identical assets or
liabilities. The fair value of financial instruments traded on
active markets is based on quoted market prices at the balance
sheet date. A market is regarded as active where the market in
which transactions for the asset or liability takes place with
sufficient frequency and volume to provide pricing information on
an ongoing basis. The quoted market price used for financial assets
held by the Company is the current bid price. These instruments are
included in level 1.
Level 2: the fair value of financial instruments that are not
traded on active markets is determined by using valuation
techniques. These valuation techniques maximise the use of
observable inputs including market data where it is available
either directly or indirectly and rely as little as possible on
entity specific estimates. If all significant inputs required to
fair value an instrument are observable, the instrument is included
in level 2.
Level 3: the fair value of financial instruments that are not
traded on an active market (for example, investments in unquoted
companies) is determined by using valuation techniques such as
discounted cash flows. If one or more of the significant inputs is
based on unobservable inputs including market data, the instrument
is included in level 3.
Assets held for Sale are measured at fair value through profit
and loss at the expected price achieved through the sale after the
year end.
There have been no transfers between these classifications in
the period. Any change in fair value is recognised through the
Statement of Comprehensive Income.
Further details of these investments are provided in the
Investment Manager's Review and Investment Portfolio.
The Company's Investment Manager performs valuations of
financial items for financial reporting purposes, including Level 3
fair values. Valuation techniques are selected based on the
characteristics of each instrument, with the overall objective of
maximising the use of market-based information.
Level 3 valuations include assumptions based on non-observable
data with the investments being valued on price of recent
transactions or the expected sale price at 31 March 2015.
All investments have been transferred to assets held for sale
(note 11) as of the year end.
Movements in investments held at fair value through the profit
or loss during the year to 31 March 2015 were as follows:
Year ended 31 March 2015 Level 3 Unquoted Investments
Ord Shares B Shares Total
GBP'000 GBP'000 GBP'000
Opening cost 15,023 1,856 16,879
Opening investment holding
gains 320 40 360
Opening fair value 15,343 1,896 17,239
Disposal proceeds (5,997) (741) (6,738)
Reclassification as assets
held for sale (10,872) (1,344) (12,216)
Realised gain 38 5 43
Investment holding gains 1,488 184 1,672
Closing fair value at 31
March 2015 - - -
Year ended 31 March 2014 Level 1 Unquoted Investments
Ord Shares B Shares Total
GBP'000 GBP'000 GBP'000
Opening cost - 877 877
Opening investment holding
gains - 127 127
Opmening fair value - 1,004 1,004
Disposal proceeds - (1,133) (1,133)
Realised gain - 129 129
Closing fair value at 31
March 2014 - - -
Level 3 Unquoted Investments
Ord Shares B Shares Total
GBP'000 GBP'000 GBP'000
Opening cost 15,824 1,956 17,780
Opening investment holding
gains 18 2 20
Opening fair value 15,842 1,958 17,800
Purchases at cost 1,780 220 2,000
Disposal proceeds (2,582) (313) (2,895)
Realised (losses) - (6) (6)
Investment holding gains 303 37 340
Closing fair value at 31
March 2014 15,343 1,896 17,239
Closing cost 15,023 1,856 16,879
Closing investment holding
losses 320 40 360
All investments are designated as fair value through the profit
or loss at the time of acquisition and all capital gains or losses
arising on investments are so designated. Given the nature of the
Company's venture capital investments, the changes in fair values
of such investments recognised in these Financial Statements are
not considered to be readily convertible to cash in full at the
balance sheet date and accordingly any gains or losses on these
items are treated as unrealised.
Material disposals during
the year
Opening Realised
Unquoted Investments Cost Valuation Disposal Gain
GBP'000 GBP'000
Cinematic Services Ltd 2,000 1,964 1,971 7
Digima Ltd 1,647 1,648 1,675 27
Digital Screen Solutions Ltd 1,648 1,662 1,671 9
DLN Digital Ltd 1,310 1,417 1,420 3
6,605 6,691 6,737 46
11. Assets Held for Sale
On 22 March 2015, some of the assets owned by the solar PV
investee companies were sold. These companies were previously
treated as 'Financial Assets at Fair Value through Profit or Loss'
but have been reclassified as 'Financial Assets Held for Sale' as
of the 31 March 2015 following the Investment Manager's commitment
to realise the investments. Prior to reclassification on 31 March
2015, the investments in the solar PV companies were valued at fair
value of GBP9.1 million (derived from the value expected to be
realised on disposal), giving rise to an unrealised gain at 31
March 2015 of GBP1.7 million. Subsequent to reclassification, in
line with IFRS 5, the Solar PV companies will continue to be
measured in line with IAS 39. Income for the year relating to these
investments amount to GBP259,000 and expenses were GBPnil. These
assets are fair value through profit and loss and are classified as
Level 3 (2014: Level 3). There is no sensitivity in the
assumptions.
Material Gains recognised
during the Year
Opening Closing
Unquoted Investments Valuation Gain Valuation
GBP'000 GBP'000 GBP'000
Campus Link Ltd 1,445 249 1,694
Convertibox Services Ltd 950 220 1,170
Flowers Power Ltd 1,077 288 1,365
Green Energy for Education
Ltd 1,282 195 1,477
Helioflair Ltd 199 55 254
New Energy Network Ltd 1,063 274 1,337
Ranmore Environmental Ltd 374 97 471
September Star Energy Ltd 1,079 294 1,373
Discussions for the sale of the Company's investments in
Anaerobic Digestion businesses to a trade buyer are well advanced.
These companies were previously treated as 'Financial Assets at
Fair Value through Profit or Loss' but have been reclassified as
'Financial Assets Held for Sale' as of the 31 March 2015 following
the Investment Manager's commitment to realise the investments.
Subsequent to reclassification, in line with IFRS 5, the companies
will continue to be measured in line with IAS 39. Income for the
year relating to these investments amount to GBP111,000 and
expenses were GBPnil. These assets are fair value through profit
and loss and are classified as Level 3 (2014: Level 3).
12. Receivables
Year ended Year ended
31 March 2015 31 March 2014
Ord.Shares B Shares Total Ord.Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Receivables 24 3 27 112 574 686
Prepaid expenses 1 - 1 3 2 5
25 3 28 115 576 691
13. Cash and Cash Equivalents
Cash and cash equivalents comprise deposits with The Royal Bank
of Scotland plc.
14. Payables and Accrued Expenses
Year ended Year ended
31 March 2015 31 March 2014
Ord.Shares B Shares Total Ord.Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Other taxation and Social
Security 6 (3) 3 6 (3) 3
Accrued expenses & deferred
income 80 15 95 73 14 87
86 12 98 79 11 90
15. Share Capital
31 March
31 March 2015 2014
Ordinary Shares of GBP0.01
each
Authorised
Number of shares 55,000,000 55,000,000
Par Value GBP'000 550 550
Issued & Fully Paid
Number of shares 18,761,011 18,761,011
Par Value GBP'000 187 187
B Shares of GBP0.01 each
Authorised
Number of shares 5,000,000 5,000,000
Par Value GBP'000 50 50
Issued & Fully Paid
Number of shares 3,448,044 3,448,044
Par Value GBP'000 34 34
The rights attached to each class of share are disclosed in the
Directors' Report on page 18.
16. Financial Instruments and Risk Management
The following table discloses the financial assets and
liabilities of the Company in the categories defined by
IAS 39, "Financial Instruments; Recognition &
Measurement."
Financial liabilities Fair value
Loan and held at amortised through profit
Total Value receivables cost or loss
GBP'000 GBP'000 GBP'000 GBP'000
Year ended 31 March
2015
Assets:
Assets held for sale 12,216 - - 12,216
Receivables 27 27 - -
Cash and cash equivalents 540 540 - -
Total 12,783 567 - 12,216
Liabilities:
Taxation payable (3) - (3) -
Accrued expenses (95) - (95) -
Total (98) - (98) -
Year ended 31 March
2014
Assets:
Financial assets at
fair value through
profit or loss 17,239 - - 17,239
Receivables 686 686 - -
Cash and cash equivalents 747 747 - -
Total 18,672 1,433 - 17,239
Liabilities:
Taxation payable (3) - (3) -
Accrued expenses (87) - (87) -
Total (90) - (90) -
The Company's financial instruments comprise VCT qualifying
investments, cash balances and liquid resources including debtors
and creditors. The Company holds financial assets in accordance
with its investment policy detailed in the Strategic Report on page
4.
Non current asset investments (see note 10) and assets held for
sale (see note 11) are valued at fair value. Unquoted investments
are carried at fair value as determined by the Directors in
accordance with current venture capital industry guidelines. The
fair value of all other financial assets and liabilities is
represented by their carrying value in the balance sheet. The
Directors believe that where an investee company's enterprise
value, which is equivalent to fair value, remains unchanged since
acquisition that investment should continue to be held at cost less
any loan repayments received. Where they consider the investee
company's enterprise value has changed since acquisition, that
should be reflected by the investment being held at a value
measured using a discounted cash flow model.
In carrying out its investment activities, the Company is
exposed to various types of risk associated with the financial
instruments and markets in which it invests. The Company's approach
to managing its risks is set out below together with a description
of the nature of the financial instruments held at the balance
sheet date.
Market Risk
The Company's VCT qualifying investments are held in small and
medium-sized unquoted companies which, by their nature, entail a
higher level of risk and lower liquidity than investments in large
quoted companies. The Directors and Investment Manager aim to limit
the risk attached to the portfolio as a whole by careful selection
and timely realisation of investments, by carrying out rigorous due
diligence procedures and by maintaining a spread of holdings in
terms of industry sector and geographical location. The Board
reviews the investment portfolio with the Investment Manager on a
regular basis. Details of the Company's investment portfolio at the
balance sheet date are set out on pages 8 to 9.
An increase of 1% in the value of investments would increase the
capital profits for the period and the net asset value at 31 March
2015 by GBP122,000. A decrease of 1% would reduce the capital
profits and net asset value by the same amount. A movement of 1% is
used as a multiple to demonstrate the impact of varying changes on
the capital profits and net asset value of the Company.
Interest Rate Risk
Some of the Company's financial assets are interest bearing, of
which some are at fixed rates and some at variable rates. As a
result, the Company is exposed to interest rate risk arising from
fluctuations in the prevailing levels of market interest rates.
Investments made into VCT qualifying holdings are part equity
and part loan. The loan element of investments totals GBP7,189,000
(2014: GBP11,601,000) and is subject to fixed interest rates for
the five year loan terms and as a result there is no cashflow
interest rate risk. As the loans are held in conjunction with
equity and are valued in combination as part of the enterprise
value, fair value risk is considered part of market risk.
The amounts held in variable rate investments at the balance
sheet date are as follows:
31 March 2015 31 March 2014
GBP'000 GBP'000
Cash on deposit 540 747
540 747
An increase or decrease in interest rates of 1% would not have a
material effect on the revenue profits for the year and the net
asset value at 31 March 2015. The Board believes that in the
current economic climate a movement of 1% is a reasonable
illustration.
Credit Risk
Credit risk is the risk that a counterparty will fail to
discharge an obligation or commitment that it has entered into with
the Company. The Investment Manager and the Board carry out a
regular review of counterparty risk. The carrying value of the
financial assets represent the maximum credit risk exposure at the
balance sheet date.
31 March
2015 31 March 2014
GBP'000 GBP'000
Qualifying Investments
- Loans 7,189 11,601
Cash on deposit 540 747
Receivables 27 686
7,756 13,034
The Company's bank accounts are maintained with The Royal Bank
of Scotland plc ("RBS"). Should the credit quality or financial
position of RBS deteriorate significantly, the Investment Manager
will move the cash holdings to another bank.
Credit risk arising on unquoted loan stock held within unlisted
investments is considered to be part of market risk as disclosed
above.
Liquidity Risk
The Company's financial assets include investments in unquoted
equity securities which are not traded on a recognised stock
exchange and which are illiquid. The Company's unquoted investments
have been valued at GBP12.2 million based on the sale price.
The Company's liquidity risk is managed on a continuing basis by
the Investment Manager in accordance with policies and procedures
laid down by the Board. The Company's overall liquidity risks are
monitored by the Board on a quarterly basis.
The Board maintains a liquidity management policy in which cash
and future cash flows for operating activities will be sufficient
to pay expenses. At 31 March 2015 cash amounted to GBP541,000
(2014: GBP747,000).
Foreign Currency Risk
The Company does not have exposure to material foreign currency
risks.
17. Net Asset Value per Share
The net asset value per share on a total basis is not included
on the balance sheet as the value by class of share is deemed to be
a more accurate reflection of the position of the Company.
The calculation of the Company's net asset value per share for
Ordinary shares is based on the Company's net assets attributable
to the Ordinary shares of GBP11,258,000 (2014: GBP15,480,000)
divided by the 18,761,011 (2014: 18,761,011) Ordinary shares in
issue.
The calculation of the Company's net asset value per share for B
shares is based on the Company's net assets attributable to the B
shares of GBP1,428,000 (2014: GBP3,107,000) divided by the
3,448,044 (2014: 3,448,044) B shares in issue.
18. Commitments and Contingencies
The Company has no outstanding commitments or contingent
liabilities.
19. Relationship with Investment Manager
During the year the Investment Manager, TPIM, received
GBP213,813 (2014: GBP463,000) for providing management and
administrative services to the Company. At 31 March 2015 GBP8,640
(2014: GBP114,000) was due to TPIM.
20. Related Party Transactions
There are no related party transactions which require
disclosure.
21. Post Balance Sheet Events
There were no post balance sheet events.
22. Dividends
On 1 August 2014 the Company paid dividends of 31.27p per share
to Ordinary Class Shareholders and 53.90p per share to B Class
Shareholders. The dividends were funded from the cash generated
from the realisation of GBP6.5 million of loans in Cinema
Digitisation companies and for the B Share Fund GBP1.1 million
realised from GAM Diversity.
The Board has resolved to pay a further dividend to Ordinary
Shareholders of GBP799,219 equal to 4.26p per share and B
Shareholders of GBP101,372 equal to 2.94p per share which will both
be paid on 3 July 2015 to shareholders on the register on 19 June
2015.
The Company
TP5 VCT plc is a Venture Capital Trust. The Investment Manager
is Triple Point Investment Management LLP. The Company was launched
in September 2008 and raised GBP17.8 million after issue costs
through an offer for subscription.
The Company's investment strategy is to invest at least 70% of
its funds into VCT qualifying companies within three years of
launch and a maximum of 30% of its funds into non-qualifying
investments. Prior to deployment in VCT qualifying investments, the
fund's objective for the Ordinary shares was to expose all of its
investments to non-VCT qualifying Goldman Sachs Assets Management
("GSAM") managed funds with the objective of generating returns
equivalent to or greater than LIBOR, (the 'LIBOR plus' portfolio).
For the B shares up to 70% was to be invested into cash and fixed
interest funds selected for credit quality, liquidity and returns.
The remaining 30% of the B Share Fund was to have an exposure
directly or indirectly to GAM Diversity GBP 2.5XL.
Financial Calendar
The Company's financial calendar is as follows:
24 September 2015 Annual General Meeting
Notice of Annual General Meeting
NOTICE is hereby given that the Annual General Meeting of TP5
VCT plc will be held at 18 St. Swithin's Lane, EC4N 8AD at 10.30am
on Thursday, 24 September 2015 for the following purposes:
Ordinary Business
1. To receive, consider and adopt the Report of the Directors
and Financial Statements for the year ended 31 March 2015 (Ordinary
Resolution).
2. To approve the policy set out in the Directors' Remuneration
Report for the year ended 31 March 2015(Ordinary Resolution).
3. To approve the implementation report set out in the
Directors' Remuneration Report for the year ended 31 March
2015.
4. To re-elect Robert Reid as a Director (Ordinary
Resolution).
5. To re-appoint Grant Thornton UK LLP as auditor and authorise
the Directors to agree their remuneration (Ordinary
Resolution).
Special Business
6. That the Company be and is hereby authorised in accordance
with s701 of the Companies Act 2006 (the "Act") to make one or more
market purchases (as defined in s693(4) of the Act) of Ordinary
Shares and B Shares of 1 pence each in the Company provided
that:
(i) the maximum aggregate number of Ordinary Shares authorised
to be purchased is an amount equal to 10% of the issued capital as
at the date hereof;
(ii) the minimum price which may be paid for an Ordinary Share is 1 pence;
(iii) the maximum price which may be paid for an Ordinary Share
is an amount, exclusive of expenses, equal to 105 per cent. of the
average of the middle market prices for the Ordinary Shares as
derived from the Daily Official List of the UK Listing Authority
for the five business days immediately preceding the day on which
the Ordinary share is purchased; and
(iv) this authority shall expire at the conclusion of the next
Annual General meeting of the Company or 15 months following the
date of the passing of this Resolution, whichever is the first to
occur (unless previously renewed, varied or revoked by the Company
in general meeting), provided that the Company may, before such
expiry, make a contract to purchase its own shares which would or
might be executed wholly or partly after such expiry, and the
Company may make a purchase of its own shares in pursuance of such
contract as if the authority hereby conferred had not expired.
(Special Resolution).
Notice of Annual General Meeting
By Order of the Board
Sir John Lucas-Tooth
Director
4 June 2015
Registered Office:
18 St Swithin's Place
London
EC4N 8AD
Notes:
(i) A member entitled to vote at the Meeting is entitled to
appoint one or more proxies to attend and, on a poll, vote on his
or her behalf. A proxy need not be a member of the Company.
(ii) A form of proxy is enclosed. To be effective, the
instrument appointing a proxy (together with the power of attorney
or other authority, if any, under which it is signed, or a
certified copy of such power or authority) must be deposited at or
posted to the office of the registrars of the Company, Neville
Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, West
Midlands B63 3DA, so as to be received not less than 48 hours
before the time fixed for the Meeting. Completion and return of the
form of proxy will not preclude a member from attending or voting
at the Meeting in person if he or she so wishes.
(iii) Members who hold their shares in uncertificated form must
be entered in the Company's register of Members 48 hours before the
Meeting to be entitled to attend or vote at the Meeting. Such
shareholders may only cast votes in respect of Ordinary Shares held
by them at such time.
(iv) Copies of the service contracts of each of the Directors,
the register of Directors' interests in shares of the Company kept
in accordance with the Listing Rules and a copy of the Memorandum
and Articles of Association of the Company, will be available for
inspection at the registered offer of the Company during usual
business hours on any week day (Saturdays. Sundays and public
holidays excepted) from the date of this notice until the date of
the Annual General Meeting and at the place of the Annual General
Meeting from at least 15 minutes prior to and until the conclusion
of the Annual General Meeting.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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