TIDMTPOA TIDMTPOB
RNS Number : 4928O
Triple Point VCT 2011 PLC
17 May 2018
Triple Point VCT 2011 plc
LEI: 213800AOOAQA5XQDEA89
The financial information set out in these statements does not
constitute the Company's statutory accounts for the year ended 28
February 2018, prepared in accordance with section 435 of the
Companies Act 2006, but is derived from those accounts. Statutory
accounts will be delivered to the Registrar of Companies on 18 May
2018. The auditors have reported on these accounts and their report
was unqualified and did not contain a statement under section
498(2) of the Companies Act 2006.
Final Results
Triple Point VCT 2011 plc managed by Triple Point Investment
Management LLP today announces the final results for the year ended
28 February 2018.
These results were approved by the Board of Directors on 17 May
2018.
You may view the Annual Report in due course on the Triple Point
website www.triplepoint.co.uk
Financial Summary
Year ended 28 February
2018
Ord Shares A Shares B Shares Total
Net assets GBP'000 - 10,637 6,826 17,463
Net asset value per
share Pence - 106.90p 100.00p n/a
--------- --------- -------
(Loss)/profit before
tax GBP'000 (2) 783 16 797
(Loss)/earnings per
share Pence (0.03p) 6.83p 0.24p n/a
----------- --------- --------- -------
Cumulative return to shareholders
(p)
Net asset value per
share - 106.90p 100.00p
Total dividends paid 115.05p 4.00p -
Net asset value plus
dividends paid 115.05p 110.90p 100.00p
-------------------------------------- ----------- --------- --------- -------
Year ended 28 February
2017
Ord Shares A Shares B Shares Total
Net assets GBP'000 2,304 10,356 6,808 19,468
Net asset value per
share Pence 11.32p 104.07p 99.76p n/a
----------- --------- --------- -------
(Loss)/profit before
tax GBP'000 (56) 431 (27) 348
Earnings/(loss) per
share Pence 0.06p 3.53p (0.27p) n/a
----------- --------- --------- -------
Cumulative return to shareholders
(p)
Net asset value per
share 11.32p 104.07p 99.76p
Total dividends paid 103.75p - -
Net asset value plus
dividends paid 115.07p 104.07p 99.76p
-------------------------------------- ----------- --------- --------- -------
Triple Point VCT 2011 plc ("the Company") is a Venture Capital
Trust ("VCT"). The Investment Manager is Triple Point Investment
Management LLP ("TPIM" and "Triple Point"). The Company was
incorporated in July 2010.
-- Ordinary Shares: On 16 January 2018 the Company cancelled
20,349,869 Ordinary Shares, paying the final 1p back to
Shareholders. At the date of cancellation, a total of GBP23,412,524
had been returned to the Ordinary Shareholders.
-- A Shares: On 30 April 2015 the A Share Class offer closed
having raised GBP10.3 million with a total of 9,951,133 A Shares
being issued.
-- B Shares: On 29 April 2016 the B Share Class offer closed
having raised GBP6,972,311 with a total of 6,824,266 B Shares being
issued.
The Strategic Report on pages 2 to 21, the Directors' Report on
pages 22 to 26, the Corporate Governance report on pages 27 to 31
and the Directors' Remuneration Report on pages 32 to 35 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 Triple Point VCT 2011 plc.
The Directors submit to the members their Annual Report and
Financial Statements for the Company for the year ended 28 February
2018.
Strategic Report
The Strategic Report, on pages 2 to 21, 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 Triple
Point VCT 2011 plc ("the Company") for the year ended 28 February
2018.
I am delighted to report that during the year the Company
successfully completed the realisation of the Ordinary Share Class
portfolio. The final 1p per share of capital was distributed to the
Ordinary Class Shareholders on 31 January 2018. Taken together with
the cumulative dividends of 114.05p, the total returned was 115.05p
per share. This result exceeds the original target return of 108.4p
at launch by 6.65p per share.
Both the A Share Class and the B Share Class portfolios remain
fully invested and are performing in line with expectations. The
Company continued to oversee the ongoing operation of the A Share
Class investments, as well as monitoring the construction of the
gas fired energy centres in the B Share Class portfolio.
Investment Portfolio
The Company's funds at 28 February 2018 were 98% invested in a
portfolio of VCT qualifying and non-qualifying unquoted
investments. It continues to meet the condition that 70% of
relevant funds must be invested in qualifying investments.
The Investment Manager's review on pages 11 to 14 gives an
update on the portfolio of investments in 12 small unquoted
businesses.
A Share Class
The A Share Class has investments in six companies in the
Hydroelectric Power sector which between them own seven
hydroelectric schemes in the Scottish Highlands. I am pleased to
report that all schemes have been successfully commissioned and are
fully operational.
The A Share Class has recorded a profit over the period of 6.83p
per share and as at 28 February 2018 the NAV per share stood at
106.90p, which when taken with dividends paid to date provides a
total shareholder return of 110.90p - slightly ahead of target.
The Company's distributable reserves are restricted until March
2019; consequently the Board has resolved to pay a 2.75p dividend,
the maximum permitted. Once the distributable reserves are no
longer restricted the Board expects the Company to be able to pay
dividends at higher levels in order to meet A Share Class return
target.
B Share Class
The B Share Class has invested GBP5.1 million into two companies
that commenced construction of two gas fired energy centers during
May 2017. We are pleased to report both energy centers are now
fully constructed and are due to be commissioned in the next few
months.
The B Share Class has recorded a small profit over the year of
0.24p per share due to an uplift in the valuation of a
Non-Qualifying Investment. Both qualifying companies will continue
to be held at cost until they become operational and generating
revenue. The NAV per share at 28 February 2018 was 100.00p.
Specific Risks
The principal risks which the Board feel the Company is facing
are discussed in further detail on pages 9 and 10.
In particular the Board consider specific risks to be;
-- Investment risk associated with the VCT's portfolio of unquoted investments;
-- Risk of failure to maintain approval as a qualifying VCT;
-- Risk of inability to realise investments in order to return
funds to investors in line with expectations.
The Board believes these risks are manageable and, with the
Investment Manager, continues to work to minimise either the
likelihood or potential impact of these risks within the scope of
the Company's established investment strategy.
Outlook
After the successful realisation of the Ordinary Share Class
investments and the subsequent return of funds, the Board and the
Investment Manager will continue to support the businesses in which
the Company is invested, and will work with them to improve
efficiencies and maximise revenues. Going forward the Board will,
together with the Investment Manager, explore opportunities to grow
the Company.
The Autumn Budget 2017 brought about changes to the VCT
landscape with the government, through its 'Financing Growth in
Innovative Firms' consultation ("the Patient Capital Review")
highlighting the importance of VCTs in helping to provide
investments into SMEs. The outcome of this review has seen several
changes proposed, including increasing a VCT's minimum qualifying
percentage threshold from 70% to 80%. This will come into effect
from 6 April 2019.
Another key finding of the Patient Capital Review is that future
qualifying investments (from 6 April 2018) must adhere to new
deployment timelines with 30% of new funds required to be invested
within the first 12 months compared to the previous timeframe of 3
years.
VCTs will also be subject to a new principles-based test that
will aim to ensure they focus on investment in companies seeking
investment for their long-term growth and development.
The Company, along with the Investment Manager, has begun to put
in place procedures to ensure the transition required will have a
minimal effect on the Company. The Board believe we are making good
progress in this area and are on track to implement any required
changes.
If you have any questions about your investment, please do not
hesitate to contact Triple Point on 020 7201 8990.
Jane Owen
Chairman
17 May 2018
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 post-tax returns for Ordinary
Shares of 9% to 11% pa. On a weighted average share price using a
9% return this is broadly equivalent to a total return to investors
of 108.4p. This compares to the actual return to Shareholders of
115.05p.
The target for the A Share Class is to pay dividends of an
average 5p per share from 2017 for four years, followed by a
partial realisation targeted to bring the aggregate distribution
from the Company to 70p per A Share after five years. Thereafter an
ongoing dividend yield of 7% per annum of net asset value is
targeted for a further nine years. The A Share Class reported an
income return of 4.44p and a 2.39p capital return for the year to
28 February 2018. The net asset value per share for the A Share
Class at 28 February 2018 stood at 106.90p.
The target for the B Share Class is to pay dividends of an
average 5p per share from 2019. The B Share Class reported an
income loss of 0.01p and a capital return of 0.25p for the year to
28 February 2018. The net asset value per share for the B Share
Class at 28 February 2018 stood at 100.00p.
The Board and the Investment Manager are both committed to
ensuring that returns on the investment portfolio are optimised and
that the VCT continues to be managed in line with the Company's
investment strategy and risk profile.
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 page 2
to 3 and the Investment Manager's Review on pages 11 to 14.
Dividend Policy
Generally, a VCT must distribute by way of dividend such amounts
as to ensure that it retains not more than 15% of its income from
shares and securities. The Directors aim to maximise tax free
distributions to shareholders of income or realised gains. It is
envisaged that the Company will distribute most of its net income
each year by way of dividend, subject to liquidity.
Investment Policy
The key objectives of the Company are to:
-- Pay regular tax-free dividends to investors;
-- maintain VCT status to enable investors to benefit from the
associated tax reliefs;
-- reduce the volatility normally associated with early stage
investments by applying its Investment Policy; and
-- In respect of the B Share Fund, provide investors with the
option to exit shortly after 5 years following investment.
The Company will not vary these objectives to any material
extent without the approval of the Shareholders.
The Company's investment policy has been designed to satisfy the
legislative requirements of the VCT scheme and to provide stable
and readily realisable returns. The Company's investment policy is
directed towards new investments into cash generative businesses
which are operating in stable or mature fields with a high quality
customer base and which can provide a positive return to investors.
The investments will be made with the intention of growing and
developing the revenues and profitability of the target businesses
to enable them to be considered for traditional forms of bank
finance and other funding. This, in turn, should enable the Company
to benefit from refinance gains or from a favourable sale to a
third party.
As identified in the Chairman's Statement, the outcome of the
government's Patient Capital Review was announced in the Autumn
Budget in 2017. Although the landscape of VCTs will be affected the
investment policy of the Company will continue to aim for regular
tax-free dividends, maintenance of the VCT qualifying status and to
minimise the volatility associated with early stage
investments.
In respect of Qualifying Investments the Company will seek:
(a) Investments in which robust due diligence has been undertaken into target investments;
(b) Investments where there is a high level of access to
regular, material financial and other information;
(c) Investments where the risk of capital losses is minimised
through careful analysis of the collateral available; and
(d) Investments where there is a strong relationship with the key decision makers.
Target Asset Allocation
At least 70% of the Company's net assets will be invested in
Qualifying Investments. The remaining assets will be exposed either
to (i) cash or cash-based similar liquid investments or (ii)
investments originated in line with the Company's Qualifying
Investment policy but with realisation dates which fit with the
liquidity needs of the Company.
Qualifying Investments will typically range between GBP500,000
and GBP5,000,000 and encompass businesses with strong asset bases,
predictable revenue streams or with contractual revenues from
financially sound counterparties. No single investment by the
Company will represent more than 15 per cent of the aggregate net
asset value of the Company at the time the investment is made.
Qualifying Investments
The Company will pursue investments in a range of industries but
the type of business being targeted is subject to the specific
investment criteria discussed below. The objective is to build a
portfolio of unquoted companies which are cash generative and,
therefore, capable of producing income and capital repayments to
the Company prior to their disposal by the Company.
Although invested in diverse industries, it is intended that the
Company's portfolio will comprise companies with certain
characteristics, for example clear commercial and financial
objectives, strong customer relationships and, where possible,
tangible assets with value. Triple Point will focus on identifying
businesses typically with contractual revenues from financially
sound counterparties or a stream of predictable transactions with
multiple clients. Businesses with assets providing valuable
security may also be considered. The objective is to reduce the
risk of losses through reliability of cash flows or quality of
asset backing and to provide investors with tax-free income.
The criteria against which investment targets would be assessed
include the following:
(a) An attractive valuation at the time of the investment;
(b) Minimising the risk of capital losses;
(c) The predictability and reliability of the company's cash flows;
(d) The quality of the business's counterparties, suppliers;
(e) The sector in which the business is active;
(f) The quality of the company's assets;
(g) The opportunity to structure an investment to produce distributable income;
(h) Growing and developing the revenues and profitability of the
Company to enable it to be considered for traditional forms of bank
finance and other funding; and
(i) In respect of the B Share Fund, the prospect of achieving an
exit after 5 years of the life of the B Share Fund.
As the value of investments increase the Company's Investment
Manager will monitor opportunities for the Company to realise
capital gains to enable the Company to make tax-free distributions
to shareholders.
Non-Qualifying Investments
The Non-Qualifying Investments will be managed with the
intention of generating a positive return. The Non-Qualifying
Investments will comprise from time to time a variety of assets
including investments following Triple Point's Navigator Strategy,
quoted or unquoted investments (direct or indirect) in cash and
highly liquid interest bearing investments, secured loans, bonds,
equities, and collective investment schemes.
Borrowing Powers
The Company has no present intention of utilising direct
borrowing as a strategy for improving or enhancing returns. To the
extent that borrowing is required, the Directors will restrict the
borrowings of the Company and exercise all voting and other rights
or powers of control over its subsidiary undertakings (if any) to
ensure that the aggregate amount of money borrowed by the group,
being the Company and any subsidiary undertakings for the time
being, (excluding intra-group borrowings), will not, without
shareholder approval, exceed 30 per cent of its NAV at the time of
any borrowing.
Risk Diversification
The Company aims to invest in a number of different businesses
within different industry sectors but may focus investments in a
single sector where appropriate to do so. No single investment by
the Company will represent more than 15 per cent of the aggregate
NAV of the Company at the time the investment is made.
The above Investment Policy does not take into account the
changes to the VCT rules relating to non-qualifying investments
that took effect on 6 April 2016. From that date any non-qualifying
investments must be in either shares or units in alternative
investment funds, undertakings for collective investment in
transferable securities (UCITS) which meet certain requirements or
ordinary shares / securities in a company which are acquired on a
regulated market. The Investment Manager will make sure that all
non-qualifying investments made after that date meet the new
requirements.
Key Performance Indicators
As a VCT the Company's objectives are providing Shareholders
with up front tax relief and returns through capital appreciation
and the payment of dividends.
The primary KPI in meeting these objectives is:
-- Net Asset Value plus dividends paid.
A record of this indicator is detailed on page 1 entitled
Financial Summary.
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 continues to meet
the VCT qualification requirements which are continuously monitored
by the Investment Manager and reviewed by the Directors.
Investment classification by asset value and sector value are
shown on the following pages:
Investment Portfolio - A Share Class
VCT Qualifying Investments 65%
VCT Non-Qualifying Investments 32%
Cash 3%
Investments by Sector - A Share Class
The A Shares unquoted investment portfolio by sector at 28
February 2018:
Hydro Electric Power 66%
SME Funding Hydro Electric Power 18%
SME Funding Other 16%
Investment Portfolio - B Share Class
VCT Qualifying Investments 74%
VCT Non-Qualifying Investments 25%
Cash 1%
Investments by Sector - B Share Class
The B Shares unquoted investment portfolio by sector at 28
February 2018:
Gas Power 75%
SME Funding - Other 25%
VCT Regulation
VCTs were first 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 current tax
benefits available to eligible investors in VCTs include:
-- Up-front income tax relief of 30% on a maximum investment of
GBP200,000 per tax year on newly-issued shares;
-- exemption from income tax on dividends received; and
-- exemption from capital gains tax on disposals of shares in VCTs.
Since the Finance Act 2004, the VCT rules have subsequently been
amended under the Finance Act 2014 and The Finance (No 2) Act 2015.
The Investment Manager, utilising advice from Philip Hare &
Associates LLP, ensures continued compliance with any legislative
changes.
As referred to in the Chairman's Statement on page 3, further
changes are to be introduced with effect from 6 April 2019. The
Company will continue to ensure its compliance with the
qualification requirements.
The Company has been approved as a VCT by Her Majesty's Revenue
and Customs. In order to maintain this 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 continues to be
met.
FCA Regulation
On 22 July 2014 Triple Point VCT 2011 plc registered with the
Financial Conduct Authority as a small Alternative Investment Fund
Manager ("AIFM") under the AIFM Directive.
Exit Programme
The Directors and the Investment Manager put in place a
programme to manage the investment realisations for the Ordinary
Class Shareholders over the course of 2016. During the year these
plans were realised and exit of the Ordinary shares was
successfully completed, resulting in a total return to Shareholders
of 115.05p per share.
The Company and Investment Manager continue to be committed to
ensuring a timely exit and return of funds to B Class Shareholders
as soon as practicable after the end of the minimum five year
holding period. The Investment Manager has a strong track record in
managing such exits. In relation to the A Share Class the Company
is intending to secure a partial realisation after five years but
plans to retain its investment in the Hydro companies until
2030.
Principal Risks and Risk Management
The Directors carry out a robust assessment of the principal
risks facing the Company, including those that would threaten its
business model, future performance, solvency or liquidity. 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.
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 appointed Philip Hare
& Associates LLP to undertake an independent VCT status
monitoring role.
Investment risk: the Company's VCT qualifying investments will
be held in small and medium-sized unquoted investments which, by
their nature, entail a higher level of risk and lower liquidity
than investments in large quoted companies. This can make it
difficult to realise investments at the end of a particular Share
Class's holding period but 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.
Financial instrument risk: Financial Instrument risks are
described in note 16.
Financial risk: as a VCT the Company is exposed to market price
risk, credit risk, fair value risk, liquidity risk and interest
rate 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, other than for short term
liquidity.
Failure of Internal controls 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.
Viability Statement
In accordance with provision C.2.2 of the 2016 revision to the
UK Corporate Governance Code, the Directors have assessed the
prospect of the Company over a longer period than 12 months
required by the Going Concern provision. In order to assess this
requirement, the Board takes into account the Company's current
position and the principal risks as set out on pages 9 and 10 so
that the Directors may state that they have a reasonable
expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the period of their
assessment.
To provide this assessment the Board has considered the
Company's financial position and ability to meet its expenses as
they fall due as well as considering longer term viability:
-- the expenses of the Company are predictable and modest in
comparison with the assets and there are no capital commitments
foreseen which would alter that position;
-- the Company has no employees, only Non-Executive Directors
and consequently does not have redundancy
or other employment related liabilities or responsibilities;
-- most of the Company's investments will involve a medium to
long-term commitment and will be relatively illiquid but the board
reduces the risk as a whole by careful selection and timely
realisation of investments; and
-- the Directors will continue to monitor closely changes in the
VCT legislation and adapt to any changes to ensure the Company
maintains approval. The Directors have appointed an independent
adviser to undertake the VCT status monitoring role.
Based on the results of this review, the Directors have a
reasonable expectation that the Company will be able to continue
its operations and meet its expenses and liabilities as they fall
due over the period of their assessment. During the next five years
the B Share Class will reach its 5 year holding period and the A
Share Class will partially exit, based on this the Directors
believe it is reasonable to make their assessment over 5 years.
Share Price 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.
Shareholders should note that if they sell their shares within five
years of subscription they forfeit any tax relief obtained. If you
are considering selling your shares please contact TPIM on 020 7201
8989.
Environmental, Social, Employee and Human Rights Issues
Due to the nature of the Company's activities, there being no
employees and only 3 Non-Executive Directors, there are no Human
Rights Issues to report. Its investment in companies engaged in
energy generation from renewable sources means it will contribute
to the reduction in carbon emissions.
Gender Diversity
The Board of Directors comprises 1 female and 2 male Directors.
The Investment Manager has 70 staff of whom 37 are men and 33 are
women.
Investment Manager's Review
Sector Analysis
The unquoted investment portfolio can be analysed as
follows:
Electricity
Generation SME Funding
Hydro Hydro Total
Cinema Electric Electric Unquoted
Industry Sector Digitisation Power Gas Power Power Other* Investments
------------------------- -------------- -------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------------- ---------- ---------- ---------- -------- -------------
Investments at
28 February 2017
-------------------------
Ordinary Shares 191 - - - 5 196
A shares - 6,335 - 1,949 1,518 9,802
B shares - - 5,100 - 1,686 6,786
-------------- --------
Total Investments 191 6,335 5,100 1,949 3,209 16,784
------------------------- -------------- ---------- ---------- ---------- -------- -------------
Investments made
during the period
------------------------- -------------- ---------- ---------- ---------- --------
Ordinary Shares - - - - - -
A Shares - - - - - -
B Shares - - - - - -
-------------
Total additions - - - - - -
------------------------- -------------- ---------- ---------- ---------- -------- -------------
Investments disposed
of during the
period
------------------------- -------------- -------- -------------
Ordinary Shares (191) - - - (5) (196)
A shares - - - (297) - (297)
B Shares - - - - - -
-------------- ---------- ---------- ---------- -------- -------------
Total disposals (191) - - (297) (5) (493)
------------------------- -------------- ---------- ---------- ---------- -------- -------------
Investment revaluations
during the period
------------------------- -------------- ---------- ---------- ---------- -------- -------------
Ordinary Shares - - - - - -
A shares - 242 - - (3) 239
B Shares - - - - 24 24
-------------
Total revaluations - 242 - - 21 263
------------------------- -------------- ---------- ---------- ---------- -------- -------------
Investments at
28 February 2018
------------------------- -------- -------------
Ordinary Shares - - - - - -
A Shares - 6,577 - 1,652 1,515 9,744
B Shares - - 5,100 - 1,710 6,810
- 6,577 5,100 1,652 3,225 16,554
------------------------- -------------- ---------- ---------- ---------- -------- -------------
Unquoted Investments
% 0.00% 39.73% 30.81% 9.98% 19.48% 100.00%
------------------------- -------------- ---------- ---------- ---------- -------- -------------
* Other SME funding includes GBP1,515,000 of A Ordinary Share
Class investments and GBP1,710,000 of B Ordinary Share Class
investment in to a UK based LLP which provides finance to small and
medium sized enterprises.
The VCT was established to fund small and medium sized
enterprises. After the exit of the Ordinary Share Class during the
year, it now has two share classes with separate portfolios as
detailed on page 11. At the year end the overall portfolio
comprised investments in 12 small, unquoted companies focussing
investments in two areas: electricity generation and SME
funding.
This year the Company elected not to raise funds for new
investments due to the desire to understand the implications of the
Patient Capital review (mentioned in the Chairman's Report on page
3) and an uncertain investment environment. With both remaining
share classes fully invested, the Company and the Investment
Manager have focussed on asset optimisation and portfolio
management.
A number of new requirements were put in place following the
Patient Capital Review, including an increase in the threshold for
qualifying investments from 70% to 80% from 6 April 2019. The
Investment Manager monitors compliance with all qualification
conditions closely, and maintains a forward-looking Qualifying
Investment Tracker. We will endeavour to ensure continuing
compliance with all conditions.
The majority of the Company's portfolio consists of businesses
which are fully operational and revenue generating, with two still
in the construction process and expected to be revenue generating
in the next few months. Generally, performance during the year
across the portfolio has been in line with expectations with the A
Share Class recording an uplift in NAV (including dividends) from
the performance of its portfolio from 104.07p per share to 110.90p
per share. The B Share Class recorded an uplift from 99.76p per
share to 100.00p per share due to a revaluation of a non-qualifying
investment.
Review & Outlook
Ordinary Share Class
April 2016 marked the end of this Share Class's five year
minimum VCT holding period. The successful realisation of the
Ordinary Share Class investments was completed during the year and
the shares were cancelled on 16 January 2018. The company
subsequently made its final distribution to Shareholders which
brought the total returned to Shareholders to 115.05p per share.
This exceeds the original target return of 108.4p at launch by
6.65p per share.
A Share Class
The A Share Class has investments in six hydro-electric
companies which between them own seven hydroelectric schemes in the
Scottish Highlands. All seven schemes have been commissioned and
are operational. The A Share Class also has investments in two
other companies which provide funding to SMEs.
We are pleased to report that the performance of the hydro
schemes has improved over the course of 2017 after the
uncharacteristically dry autumn and winter period in 2016. As a
result the majority of the portfolio has recorded an uplift in
valuations. One company, Green Highland Shenval Ltd, has resolved a
contractual dispute which has resulted in a write down.
Nonetheless, the company continues to operate well and we believe
that the VCT will recover its original investment. Overall the A
Share Class is pleased to have recorded an increased profit of
6.83p per share for the year.
The seven hydro-electric schemes are "run of river" plants which
capture river flow agreed above a certain level as determined by
the Scottish Environment Protection Agency (SEPA). Water flow is
generally captured before a descent and flows down the penstock
(pipe) to a turbine engine which produces electricity. The water is
then returned to the river. The hydro companies benefit from
government backed Feed-in Tariff payments based on output and also
from the sale of the electricity produced to utilities or other
power companies under Power Purchase Agreements (PPAs). The
contract terms were renewed during 2017 and, due to the export
market rising, the companies have continued to obtain better power
prices than were originally forecast, currently earning an average
of 6.19 pence per kWh (2017: 6.62 pence per kWh).
The hydro companies remain strongly focussed on seeking
efficiencies and operating improvements. As part of this focus,
during 2017 an Asset Manager was appointed to explore ways in which
the companies could further enhance the operational performance of
the schemes. Their work included reviewing scheme layouts,
hydrology data, performance data and reporting on any
inefficiencies and making recommendations on where improvement
could be made to enhance performance. The companies are currently
implementing some of the recommendations made by the Asset
Manager.
When the business rates review took place in 2016 there was some
concern that the results would significantly increase the costs of
hydro businesses which occupy comparatively large areas of very
rural land compared to
the relative level of their turnover. The companies, together
with other industry members and the British Hydropower Association,
have continued to lobby the Scottish Government to recognise these
anomalies.
In February 2017, the Scottish Government announced a 12.5%
limit on business rates increases in the hydro sector for schemes
up to 1 MW for the year to 31 March 2018 and, on 12 September 2017,
further announced a 60% relief on business rates for small-scale
hydro schemes from 1 April 2018. The Company has investments in two
companies with schemes above 1MW and the position for such schemes
still remains unclear. Longer term, the Scottish Government has
confirmed that it will work alongside industry organisations to
fast track a review of the Plant and Machinery Order, which should
address these issues.
We are pleased with the performance of the portfolio to date and
we believe that, as the portfolio matures, there remains the
opportunity to further enhance its value through strategic
operational management.
Top Holdings by The A Share fund
Qualifying
Green Highland Allt Garbh Ltd has constructed a 1,300 KW
run-of-river hydro-electric power plant near Glen Affric, Cannich.
The scheme completed construction and was commissioned in July
2017. The company earns Feed-in-Tariffs and other revenues from the
generation and export of electricity to the National Grid.
Green Highland Allt Ladaidh (1148) Ltd operates a 1,350 KW
run-of-river hydro-electric power plant near Loch Garry, Invergarry
in the Scottish Highlands. The company earns Feed-in-Tariffs and
other revenues from the generation and export of electricity to the
National Grid.
Green Highland Allt Luaidhe (228) Ltd operates a 500 KW
run-of-river hydro-electric power plant located in Knockie,
Whitebridge near Inverness in the Scottish Highlands. The company
earns Feed-In-Tariffs from the generation and export of electricity
to the National Grid.
Green Highland Allt Phocachain (1015) Ltd operates two separate
500 KW run-of-river hydraulic power plants located in Glen
Moriston, in the Scottish Highlands. The company earns
Feed-in-Tariffs from generation and export of electricity to the
National Grid.
Non-Qualifying
Broadpoint 2 Ltd is a VCT non-qualifying investment, which has
provided investment to hydro-electric power companies.
Broadpoint 3 Ltd owns equity stakes in hydro-electric power
companies and one rooftop solar PV company.
Funding Path Ltd is a VCT non-qualifying investment, which has
invested in an LLP that provides finance to small and medium sized
enterprises (SME's).
Modern Power Generation Ltd is a VCT non-qualifying investment,
which has invested in an LLP that provides finance to small and
medium sized enterprises (SME's).
B Share Class
The B Share Class remains fully invested with one Non-Qualifying
Investment and two Qualifying Investments in companies constructing
gas fired energy centres. Both energy centres are in the final
stages of construction, and are due to be commissioned in the next
few months.
These energy centres are containerised gas combustion engines
that generate electricity for onward sale, especially at times when
there is high demand for power. Britain is aiming to close its
coal-fired power plants by 2025, and it is therefore expected that
there will be a shortage in the supply of energy in the UK.
Although renewable energy makes an increasing contribution, the
irregular nature of its production means that other baseload
sources will also be required to make up the deficit.
The companies have taken advantage of a gap in the market by
constructing, operating and owning gas fired energy centres to
produce and sell electricity to customers. The energy centres
utilise simple technology, provided by Rolls Royce, to provide a
reliable and secure energy supply.
Gas will be purchased from the National Transmission System and
combusted in the engines. The electricity will then be exported to
the National Grid and sold under a power purchase agreement. The
companies will receive revenues from the sale of electricity and
income from embedded benefits.
Embedded benefits cover a range of payments available to small
electricity generators connected to the distribution network,
rather than the transmission grid. Benefits can be earned for
generating at peak times and for local distribution. In addition
generators can earn additional revenues by operating outside the
peak 4-7pm hours to take advantage of 'intraday' and 'post-gate
closure' price volatility.
Both qualifying companies detailed below are in their infancy
and have been actively managing the construction of their energy
centres. A more detailed review will be included once the energy
centres have sufficient operating history for meaningful
analysis.
In the year ahead our focus will be on working with the
companies as they become fully operational to maximise their
performance in line with the return targets of the Share Class.
Top Holdings by The B Share fund
Qualifying
Distributed Generators Ltd has constructed a 5 MW gas power
plant in Bedford. The 2 x 2.5 MW gas fired MTU Rolls Royce Engines
have been successfully installed and construction was completed in
May 2018.
Green Peak Generation Ltd has constructed a 7.5 MW gas power
plant in Workington, Cumbria. The 3 containerised 2.48 MW gas fired
MTU Rolls Royce Engines have been successfully installed and
construction was completed in May 2018.
Non-Qualifying
Modern Power Generation Ltd: is a VCT non-qualifying investment,
which has invested in an LLP that provides finance to small and
medium sized enterprises (SME's).
Non Qualifying Investments
SME Funding
The Company has non-qualifying investments in four finance
companies. These companies have invested in a dedicated non-bank
SME lending business which aims to address the financing needs of
the UK SME market by providing business critical loans and asset
finance to over 60,000 UK Corporate and SME customers.
If you have any questions, please do not hesitate to call us on
020 7201 8990.
Ben Beaton
Managing Partner
For Triple Point Investment Management LLP
17 May 2018
Investment Portfolio Summary
28 February 2018 28 February 2017
------------------------------------ ------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted qualifying
holdings 11,423 68.84 11,677 69.07 11,723 63.85 11,626 63.51
Non-Qualifying holdings 4,811 29.01 4,877 28.84 5,109 27.84 5,158 28.18
Financial assets at
fair value through
profit or loss 16,234 97.85 16,554 97.91 16,832 91.69 16,784 91.69
Cash and cash equivalents 353 2.15 353 2.09 1,525 8.31 1,525 8.31
16,587 100.00 16,907 100.00 18,357 100.00 18,309 100.00
======== ======= ======== ======= ======== ======= ======== =======
Qualifying Holdings
Unquoted
Cinema Digitisation
DLN Digital Ltd - - - - 300 1.63 191 1.04
Hydro Electric Power
Green Highland Allt
Choire A Bhalachain
Ltd 30 0.18 30 0.18 30 0.16 29 0.16
Green Highland Allt
Garbh Ltd 2,250 13.56 2,250 13.31 2,250 12.26 2,250 12.29
Green Highland Allt
Ladaidh (1148) Ltd 1,470 8.86 1,802 10.66 1,470 8.01 1,470 8.03
Green Highland Allt
Luaidhe (228) Ltd 855 5.15 937 5.54 855 4.66 877 4.79
Green Highland Allt
Phocachain (1015)
Ltd 858 5.17 1,005 5.94 858 4.67 849 4.64
Green Highland Shenval
Ltd 860 5.18 553 3.27 860 4.68 860 4.70
Gas Power
Distributed Generators
Ltd 3,200 19.29 3,200 18.93 3,200 17.43 3,200 17.48
Green Peak Generation
Ltd 1,900 11.45 1,900 11.24 1,900 10.35 1,900 10.38
11,423 68.84 11,677 69.07 11,723 63.85 11,626 63.51
======== ======= ======== ======= ======== ======= ======== =======
Non-Qualifying Holdings
Unquoted
Hydro Electric Power
Green Highland Allt
Choire A Bhalachain
Ltd 3 0.02 3 0.02 3 0.02 3 0.02
Green Highland Allt
Ladaidh (1148) Ltd 30 0.18 30 0.18 30 0.16 30 0.16
Green Highland Allt
Luaidhe (228) Ltd 61 0.37 61 0.36 61 0.33 61 0.33
Green Highland Allt
Phocachain (1015)
Ltd 2 0.01 3 0.02 3 0.02 3 0.02
Kinlochteacius Hydro
Ltd - - - - 47 0.26 47 0.26
SME Funding:
Hydro Electric Power
Broadpoint 2 Ltd 550 3.32 550 3.25 800 4.36 800 4.37
Broadpoint 3 Ltd 1,005 6.06 1,005 5.94 1,005 5.47 1,005 5.49
Other
Broadpoint Ltd - - - - - - 5 0.03
Funding Path Ltd 1,000 6.03 1,000 5.91 1,000 5.45 1,010 5.52
Modern Power Generation
Ltd 2,160 13.02 2,225 13.16 2,160 11.77 2,194 11.98
4,811 29.01 4,877 28.84 5,109 27.84 5,158 28.18
======== ======= ======== ======= ======== ======= ======== =======
Financial Assets including those held for sale are measured at
fair value through profit or loss. The initial best estimate of
fair value of these investments that are either quoted or unquoted
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 to be realised on disposal which is equivalent to fair
value.
Investment Portfolio Ten Largest Unquoted Investments
Distributed Generators Ltd
Date of first Cost GBP Valuation Valuation Income Equity Equity
investment GBP Method recognised Held Held
by TP11 by TP11 by TPIM
for the % managed
year funds
GBP'000 %
02-Apr-2016 3,200,000 3,200,000 Cost (1) 45.00 45.00
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover -
Earnings before interest, tax, amortisation
and depreciation (EBITDA) (92)
Loss before tax (91)
Net assets before VCT loans 3,911
Net assets 2,681
Distributed Generators Ltd has constructed a 5 MW gas
power plant in Bedford. The 2 x 2.5 MW gas fired MTU
Rolls Royce Engines have been installed and construction
was completed in May 2018. Once commissioned, the plant
will generate revenues through the sale of electricity
to the National Grid, when electricity prices are at
their highest.
---------------------------------------------------------------------------------------
Green Highland Allt Garbh
Ltd
Date of first Cost GBP Valuation Valuation Income Equity Equity
investment GBP Method recognised Held Held by
by TP11 by TP11 TPIM managed
for the % funds
year %
GBP'000
01-Apr-2015 2,250,000 2,250,000 Cost 151 22.79 50.25
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover 52
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 17
Loss before tax (82)
Net assets before VCT loans 4,876
Net assets 3,389
Green Highland Allt Garbh Ltd has constructed a 1,300
KW run-of-river hydro-electric power plant near Glen
Affric, Cannich. The scheme completed construction
and was commissioned in July 2017. The company earns
Feed-in-Tariffs and other revenues from the generation
and export of electricity to the National Grid.
--------------------------------------------------------------------------------------------
Modern Power Generations
Ltd
Date of first Cost GBP Valuation Valuation Income Equity Equity
investment GBP Method recognised Held Held by
by TP11 by TP11 TPIM managed
for the % funds
year %
GBP'000
Share
of net
04-Apr-2016 2,160,000 2,225,000 assets 107 49.90 49.90
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover 150
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 144
Profit before tax 54
Net assets before VCT loans 2,204
Net assets 1,409
Modern Power Generations Ltd is a VCT non-qualifying
investment, which has invested in an LLP that provides
finance to small and medium sized enterprises (SME's).
--------------------------------------------------------------------------------------------
Green Peak Generation Ltd
Date of first Cost GBP Valuation Valuation Income Equity Equity
investment GBP Method recognised Held Held by
by TP11 by TP11 TPIM managed
for the % funds
year %
GBP'000
02-Apr-2015 1,900,000 1,900,000 Cost (4) 41.67 89.94
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover -
Earnings before interest, tax, amortisation
and depreciation (EBITDA) (132)
Loss before tax (95)
Net assets before VCT loans 3,911
Net assets 2,681
Green Peak Generation Ltd has constructed a 7.5 MW
gas power plant in Workington, Cumbria. The 3 containerised
2.48 MW gas fired MTU Rolls Royce Engines have been
installed and construction was completed in May 2018.
Once commissioned the plant will generate revenues
through the sale of electricity to the National Grid
when electricity prices are at their highest.
--------------------------------------------------------------------------------------------
Green Highland Allt Ladaidh
(1148) Ltd
Date of first Cost GBP Valuation Valuation Income Equity Equity
investment GBP Method recognised Held Held by
by TP11 by TP11 TPIM managed
for the % funds
year %
GBP'000
Discounted
cash
19-Mar-2015 1,470,000 1,832,000 flow 126 15.07 50.25
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover 484
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 292
Loss before tax (294)
Net assets before VCT loans 4,561
Net assets 3,061
Green Highland Allt Ladaidh (1148) Ltd operates a 1,350
KW run-of-river hydro-electric power plant near Loch
Garry, Invergarry in the Scottish Highlands. The company
earns Feed-in-Tariffs and other revenues from the generation
and export of electricity to the National Grid.
---------------------------------------------------------------------------------------------
Funding Path Ltd
Date of first Cost GBP Valuation Valuation Income Equity Equity
investment GBP Method recognised Held Held by
by TP11 by TP11 TPIM managed
for the % funds
year %
GBP'000
Share
of net
29-Jan-2016 1,000,000 1,000,000 assets 78 49.00 98.00
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover 275
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 268
Profit before tax 41
Net assets before VCT loans 3,232
Net assets 32
Funding Path Ltd is a VCT non-qualifying investment,
which has invested in an LLP that provides finance
to small and medium sized enterprises (SMEs).
--------------------------------------------------------------------------------------------
Broadpoint 3 Ltd
Date of first Cost GBP* Valuation Valuation Income Equity Equity
investment GBP Method recognised Held Held by
by TP11 by TPIM managed
for the TP11 funds
year GBP'000 % %
Discounted
Cash
08-Jan-2016 1,005,000 1,005,000 Flow* - 0.00 0.00
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover -
Earnings before interest, tax, amortisation
and depreciation (EBITDA) (11)
Loss before tax (11)
Net assets before VCT loans 2,995
Net assets (20)
Broadpoint 3 Ltd owns equity stakes in hydro-electric
power companies and one rooftop solar PV company.
---------------------------------------------------------------------------------------------
*The directors consider the fair value to be equivalent to the
par value.
Green Highland Allt Phocachain
(1015) Ltd
Date of first Cost Valuation Valuation Income Equity Equity
investment GBP GBP Method recognised Held Held by
by TP11 by TP11 TPIM managed
for % funds
the %
year
GBP'000
Discounted
Cash
13-Nov-2014 858,000 1,008,000 Flow 76 8 100
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover 607
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 408
Loss before tax (263)
Net assets before VCT loans 4,006
Net assets 2,569
Green Highland Allt Phocachain (1015) Ltd operates
two separate 500 KW run-of-river hydraulic power plants
located in Glen Moriston, in the Scottish Highlands.
The company earns Feed-in-Tariffs from generation and
export of electricity to the National Grid.
-------------------------------------------------------------------------------------------
Green Highland Allt Luaidhe
(228) Ltd
Date of first Cost Valuation Valuation Income Equity Equity
investment GBP GBP Method recognised Held Held by
by TP11 by TP11 TPIM managed
for the % funds
year %
GBP'000
Discounted
Cash
18-Mar-2015 855,000 998,000 Flow 74 15.08 100.00
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover 275
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 23
Loss before tax (306)
Net assets before VCT loans 2,240
Net assets 1,385
Green Highland Allt Luaidhe (228) Ltd operates a 500
KW run-of-river hydro-electric power plant located
in Knockie, Whitebridge near Inverness in the Scottish
Highlands. The company earns Feed-In-Tariffs from the
generation and export of electricity to the National
Grid.
-------------------------------------------------------------------------------------------
Broadpoint 2 Ltd
Date of first Cost Valuation Valuation Income Equity Equity
investment GBP* GBP Method recognised Held Held by
by TP11 by TPIM managed
for the TP11 funds
year GBP'000 % %
Discounted
Cash
07-Jan-2016 550,000 550,000 Flow* 47 49.00 98.00
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover -
Earnings before interest, tax, amortisation
and depreciation (EBITDA) (11)
Loss before tax (20)
Net assets before VCT loans 3,088
Net assets (17)
Broadpoint 2 Ltd is a VCT non-qualifying investment,
which has provided investment to hydro-electric power
companies.
-------------------------------------------------------------------------------------------
*The directors consider the fair value to be equivalent to the
par value.
Significant Influence
The principal undertakings in which the company's interest at
the year-end is 20% or more are as follows:
Name Registered address Holding
18 St Swithin's Lane, London,
Broadpoint 2 Limited EC4N 8AD 49.00%
------------------------- --------------------------------------- --------
Distributed Generators 18 St Swithin's Lane, London,
Limited EC4N 8AD 45.00%
------------------------- --------------------------------------- --------
18 St Swithin's Lane, London,
Funding Path Limited EC4N 8AD 49.00%
------------------------- --------------------------------------- --------
Inveralmond Road, Inveralmond
Green Highland Industrial Estate, Perth, PH1
Alt Garbh Limited 3TW 22.79%
------------------------- --------------------------------------- --------
Green Highland Q Court, 3 Quality Street, Edinburgh,
Shenval Limited EH4 5BP 22.09%
------------------------- --------------------------------------- --------
Green Peak Generation Q Court, 3 Quality Street, Edinburgh,
Limited EH4 5BP 41.67%
------------------------- --------------------------------------- --------
Modern Power Generation 18 St Swithin's Lane, London,
Limited EC4N 8AD 49.90%
------------------------- --------------------------------------- --------
-- The investments are a combination of debt and equity.
-- Equity holding is equal to the voting rights.
-- All investments are held in the UK.
The Strategic Report has been approved by the Board and signed
on their behalf by the Chairman.
Jane Owen
Chairman
17 May 2018
Report of the Directors
The Directors present their Report and the audited Financial
Statements for the year ended 28 February 2018.
Details of Directors
Jane Owen is the Chairman of the Board of the Company. After
graduating in law from Oxford University, Jane was called to the
Bar in 1978 and until 1989 was a practising barrister in the
chambers that are now 3 Verulam Buildings. Subsequently Jane became
UK group legal director at Alexander & Alexander Services, and
was appointed Aon's General Counsel in the UK in 1997, a position
she held until 2008, where she was also a director of Aon Limited
from 2001 to 2008. She is also a Non-Executive Director of TWG
Europe Ltd and related companies and a Governor of James Allen's
Girls' School.
Chad Murrin graduated in law from Cambridge University, and then
qualified as a barrister. He worked for 3i Group plc from
1986-2004, the last five years as 3i's Corporate Development
Director. In 2004, he set up his own corporate advisory business,
Murrin Associates Limited. He holds the Advanced Diploma in
Corporate Finance from The Corporate Finance Faculty of the ICAEW.
He is a Non-Executive Director of Keytask Management Limited, E.W.
Beard (Holdings) Limited, Procom-IM Limited and other
companies.
Tim Clarke graduated in PPE from Oxford University. He joined
Panmure Gordon & Co as an equities analyst, subsequently
becoming a Partner and Head of Research. He joined Bass PLC in
1990, holding a number of operating roles in the Hotels, Pub and
Restaurant divisions before becoming Chief Executive in 2000.
Following its demerger he was Chief Executive of Mitchells &
Butlers PLC until 2009. He was a Non-Executive Director of
Associated British Foods PLC from 2004 until 2017. He is currently
Chairman of Birmingham Airport, Chairman of Timothy Taylor & Co
Ltd, and a Non-Executive Director of Hall & Woodhouse Ltd. He
is Vice-Chairman of the Foundation of the Schools of King Edward VI
in Birmingham.
All Directors are considered to be independent.
The Board has considered provision B.7.2 of the UK Corporate
Governance Code (April 2016) 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 pages 27 and 28
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 chosen to focus its investing activities
towards companies involved in renewable energy, energy production
and SME funding.
The Company has been approved as a VCT by HMRC and, in the
opinion of the Directors, has conducted its affairs so as to enable
it to continue to obtain such approval.
The Company is registered in England as a Public Limited Company
(Registration number 07324448). 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
For details of post balance sheet events see note 21 to the
Financial Statements.
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.
Report of the Directors
Matters Covered in the Strategic Report
Dividends and financial risk management have both been discussed
within the Strategic Report on pages 4 and 10.
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 2018 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 Ordinary Share capital was cancelled on 16 January 2018. The
A Share capital is GBP100,000 divided into 10,000,000 shares of 1p
each, of which 9,951,133 shares were in issue at 28 February 2018.
The B Share capital is GBP100,000 divided into 10,000,000 shares of
1p each, of which 6,824,266 shares were in issue at 28 February
2018. As at that date none of the issued shares were 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 to receive out of profits available for
distribution 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, on a return of assets on a liquidation, reduction
of capital or otherwise, to share in the surplus assets of the
Company remaining after payment of its liabilities pari passu with
other holders of A Shares of that class and B Shares of that
class.
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 is recommended by the
Directors or, not less than seven 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 expiring 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.
Directors Responsibilities
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.
Auditor
Grant Thornton UK LLP resigned as the company's auditor during
the year following the conclusion of a formal tender process led by
the Company's audit committee. The directors appointed BDO LLP to
fill the casual vacancy. BDO LLP will offer themselves for
appointment as auditor in accordance with S489(4) of the Companies
Act 2006. A resolution to appoint BDO LLP as auditor and to
authorise the Directors to fix their remuneration will be proposed
at the forthcoming annual General Meeting.
On behalf of the Board.
Jane Owen
Director
17 May 2018
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 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
position, 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 IFRSs
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 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.
Jane Owen
Chairman
17 May 2018
Corporate Governance
This Corporate Governance Report forms part of the Directors'
Report on pages 22-25.
The Financial Conduct Authority requires all listed companies to
disclose how they have applied the principles and complied with the
provisions of the UK Corporate Governance Code (the 'Code') issued
by the Financial Reporting Council (FRC) in 2016.
The Board of Triple Point VCT 2011 plc has considered the
principles and recommendations of the Association of Investment
Companies Code of Corporate Governance (AIC Code 2016) by reference
to the Association of Investment Companies Corporate Governance
Guide for Investment Companies (AIC Guide). The AIC Code 2016, as
explained by the AIC Guide, addresses all the principles set out in
the UK Corporate Governance Code (April 2016), 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 2016, by reference to the AIC
Guide, which incorporates the UK Corporate Governance Code (April
2016), will provide improved reporting to shareholders. The Company
has complied with the recommendations of the AIC Code and the
relevant provisions of the code, except as set out on page 31 under
the heading Compliance Statement.
The Company is committed to maintaining high standards in
corporate governance and has complied with the recommendations of
the AIC Code 2016 and the relevant provisions of the UK Corporate
Governance Code (April 2016), except as set out at the end of this
report in the Compliance Statement.
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 22 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 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. She 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 her 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. Directors may also take independent professional advice
at the Company's expense where necessary in the performance of
their duties. 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 (April 2016) 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
Jane Owen, Chairman 4 2
Chad Murrin 4 2
Tim Clarke 4 2
Audit Committee
The Board has appointed an audit committee of which Jane Owen 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 BDO 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. BDO LLP
do not provide any non-audit services to the company.
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 FRC's Ethical Standard requires the audit partner to rotate
every five years. During the year an audit tender process was
undertaken. This resulted in the resignation of Grant Thornton UK
LLP and the directors appointing BDO LLP to fill the casual
vacancy.
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 (April
2016) 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 28 February 2018, the audit
committee discharged its responsibilities by:
-- conducting a formal audit tender process and making a
recommendation to the board in relation to the removal of Grant
Thornton UK LLP and the appointment and approval of remuneration
and terms of engagement of BDO LLP;
-- 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; and
-- compliance with HM Revenue & Customs conditions for
maintenance of approved Venture Capital Trust status.
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 have reviewed the valuations and discussed them
with both the Investment Manager and the external auditor to
confirm their assessment of 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 has been reviewed by Philip Hare & Associates LLP
in its capacity as adviser to the Company on taxation matters.
The audit committee has considered the whole Report and Accounts
for the year ended 28 February 2018 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 position, 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 Investment Manager's procedures are subject to internal
compliance checks.
Capital management is monitored and controlled by the Investment
Manager. The capital being managed includes equity and fixed
interest VCT qualifying investments, cash balances and liquid
resources including debtors and creditors.
The Company's objectives when managing capital are:
-- to safeguard its ability to continue as a going concern, so
that it can continue to provide returns to shareholders and
benefits for other stakeholders;
-- to ensure sufficient liquid resources are available to meet
the funding requirements of its investments and to fund new
investments where identified.
Going Concern
After making the necessary enquiries, the Directors confirm that
they are satisfied that the Company has adequate resources to
continue in business for at least the next 12 months. The Board
receives regular reports from the Manager and the Directors believe
that, as no material uncertainties leading to significant doubt
about going concern
have been identified, it is appropriate to continue to apply the
going concern basis in preparing the Financial Statements.
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 (April 2016) 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 (April 2016).
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,
all of whom are considered independent. Jane Owen who is chairman
is also chairman of the audit committee but it is not considered
appropriate to appoint another independent Director. The Board
regularly reviews the independence of its Directors (C.3.1).
On behalf of the Board.
Jane Owen
Chairman
17 May 2018
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 28 February 2018.
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 April 2016). 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
13 July 2017. 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 are 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 12 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 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.
Annual rate Policy on
Date Unexpired of Directors' payment for
of Contract term of contract fees loss of office
GBP
Jane Owen,
Chairman 23-Sep-10 none 17,500 none
Chad Murrin 23-Sep-10 none 15,000 none
Tim Clarke 05-May-11 none 15,000 none
Annual Remuneration Report
The remuneration policy described above was approved on 13 July
2017 at the Annual General Meeting and will remain unchanged for
another 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 28
February 2018 and the prior year are shown below:
Emoluments Emoluments
for the for the
Year ended year ended
28 February 28 February
2018 2017
GBP GBP
Jane Owen,
Chairman 17,500 17,269
Chad Murrin 15,000 14,769
Tim Clarke 15,000 14,769
47,500 46,807
Employers'
NI contributions 175 101
Total Emoluments 47,675 46,908
-------------------- ------------- -------------
None of the Directors are 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:
28 February 28 February
Unaudited 2018 2017
GBP'000 GBP'000
Total Dividends
paid 2,495 4,884
Total Directors'
emoluments 48 47
Directors' Share Interests (audited information)
At the 28 February 2018 Jane Owen held no Ordinary Shares,
24,624 A Ordinary Shares and 24,378 B Ordinary Shares (2017: 25,375
Ordinary Shares; 24,624 A Ordinary Shares; B Shares 24,378) and Tim
Clarke held no Ordinary Shares and 24,624 B Shares (2017: 15,300
Ordinary Shares; B Shares 24,624) and Chad Murrin held 24,874 A
Ordinary Shares and 24,624 B Ordinary Shares (2017: 24,874 A
Ordinary Shares; B Shares 24,624). At 28 February 2018 Jane Owen's
husband held no Ordinary Shares (2017: 25,375). No other connected
parties to the Directors held any shares at 28 February 2018 (2017:
nil). Any shares owned by the Directors were purchased at the same
price offered to investors. There are no requirements or
restrictions on Directors holding shares in the Company.
Statement of Voting at the Annual General Meeting
The 2017 Remuneration Report was presented to the Annual General
Meeting in July 2017 and received shareholder approval following a
vote 99% in favour and none abstained.
The 2017 Remuneration Policy was presented to the Annual General
Meeting in July 2017 and received shareholder approval following a
vote 99% in favour and none abstained.
Statement of the Chairman
The Directors' fees were GBP17,500 per annum for the Chairman
and GBP15,000 per annum for other Directors from 5 April 2016. 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.
On behalf of the Board.
Jane Owen
Chairman
17 May 2018
Statement of Comprehensive Income
For the year ended 28 February 2018
Year ended Year ended
28 February 2018 28 February 2017
---------------------------- ----------------------------
Note Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 4 715 - 715 1,437 - 1,437
Loss arising on
the realisation
of investments
during the period 10/11 - (17) (17) - (429) (429)
Gain/(loss) arising
on the revaluation
of investments
at the period
end 10 - 264 264 - (18) (18)
Investment return 715 247 962 1,437 (447) 990
-------- -------- -------- -------- -------- --------
Investment management
fees 5 24 8 32 285 94 379
Financial and
regulatory costs 26 - 26 28 - 28
General administration 42 (19) 23 49 70 119
Legal and professional
fees 6 38 (2) 36 69 - 69
Directors' remuneration 7 48 - 48 47 - 47
Operating expenses 178 (13) 165 478 164 642
-------- -------- -------- -------- -------- --------
Profit/(loss)
before taxation 537 260 797 959 (611) 348
Taxation 8 (102) (2) (104) (73) 72 (1)
Profit/(loss)
after taxation 435 258 693 886 (539) 347
-------- -------- -------- -------- -------- --------
Other comprehensive
income - - - - - -
-------- -------- -------- -------- -------- --------
Profit and total
comprehensive
income/(loss)
for the period 435 258 693 886 (539) 347
-------- -------- -------- -------- -------- --------
Basic & diluted earnings
per share (pence)
Ordinary Share 9 (0.04p) 0.01p (0.03p) 2.71p (2.65p) 0.06p
A Share 9 4.44p 2.39p 6.83p 3.61p (0.08p) 3.53p
B Share 9 (0.01p) 0.25p 0.24p (0.37p) 0.10p (0.27p)
The total column of this statement is the Statement of
Comprehensive Income of the Company prepared in accordance with
International Financial Reporting Standards (IFRS). The
supplementary revenue return and capital columns have been prepared
in accordance with the Association of Investment Companies
Statement of Recommended Practice (AIC SORP) in so far as it does
not conflict with IFRS.
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 on pages 51 to 64 form an integral part
of these statements.
Balance Sheet
At 28 February 2018
Company No: 07324448
28 February 28 February
2018 2017
Note GBP'000 GBP'000
Non-current assets
Financial assets at
fair value through profit
or loss 10 16,554 16,593
------------ ------------
Current assets
Assets held for sale 11 - 191
Receivables 12 779 1,375
Cash and cash equivalents 13 353 1,525
1,132 3,091
------------ ------------
Total assets 17,686 19,684
------------ ------------
Current liabilities
Payables and accrued
expenses 14 120 215
Current taxation payable 103 1
223 216
------------ ------------
Net assets 17,463 19,468
============ ============
Equity attributable
to equity holders
Share capital 15 168 371
Share Premium 16,683 16,683
Share redemption reserve - 1
Special distributable
reserve - 255
Capital reserve 319 1,443
Revenue reserve 293 715
Total equity 17,463 19,468
============ ============
Shareholders' funds
Net asset value per
Ordinary Share 17 - 11.32p
Net asset value per
A Share 17 106.90p 104.07p
Net asset value per
B Share 17 100.00p 99.76p
The statements were approved by the Directors and authorised for
issue on 17 May 2018 and are signed on their behalf by:
Jane Owen
Chairman
17 May 2018
The accompanying notes on pages 51 to 64 form an integral part
of these statements.
Statement of Changes in Shareholders' Equity
For the year ended 28 February 2018
Share Special
Issued Share Redemption Distributable Capital Revenue
Capital Premium Reserve Reserve Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended
28 February
2018
Opening balance 371 16,683 1 255 1,443 715 19,468
--------- --------- ------------ --------------- --------- --------- --------
Issue of share
capital - - - - - - -
Cost of issue
of shares - - - - - - -
Purchase of
own shares - - - - - - -
Cancellation
of shares (203) - (1) - 1 - (203)
Dividends paid - - - (255) (1,383) (857) (2,495)
Transactions
with owners (203) - (1) (255) (1,382) (857) (2,698)
--------- --------- ------------ --------------- --------- --------- --------
(Loss)/profit
before taxation - - - - 260 537 797
Taxation - - - - (2) (102) (104)
(Loss)/profit
after taxation - - - - 258 435 693
Other comprehensive
income - - - - - - -
Total comprehensive
(loss)/profit
for the period - - - - 258 435 693
--------- --------- ------------ --------------- --------- --------- --------
Balance at
28 February
2018 168 16,683 - - 319 293 17,463
========= ========= ============ =============== ========= ========= ========
The Capital
Reserve consists
of:
Investment
holding gains 320
Other realised losses (1)
319
---------
Year ended
28 February
2017
Opening balance 303 9,927 1 4,900 1,982 68 17,181
--------- --------- ------------ --------------- --------- --------- --------
Issue of share
capital 68 6,904 - - - - 6,972
Cost of issue
of shares - (148) - - - - (148)
Dividend Paid - - - (4,645) - (239) (4,884)
Transactions
with owners 68 6,756 - (4,645) - (239) 1,940
--------- --------- ------------ --------------- --------- --------- --------
(Loss)/profit
after taxation - - - - (539) 886 347
Total comprehensive
(loss)/profit
for the period - - - - (539) 886 347
--------- --------- ------------ --------------- --------- --------- --------
Balance at
28 February
2017 371 16,683 1 255 1,443 715 19,468
========= ========= ============ =============== ========= ========= ========
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
unrealised capital reserve is not distributable. The special
distributable reserve was created on court cancellation of the
share premium account. The revenue reserve, realised capital
reserve and special distributable reserve are distributable by way
of dividend.
At 28 February 2018 the total reserves available for
distribution are GBP292,363. This consists of the distributable
revenue reserve net of the realised capital loss.
Statement of Cash Flows
For the year ended 28 February 2018
Year ended Year ended
28 February
28 February 2018 2017
GBP'000 GBP'000
Cash flows from operating
activities
Profit before taxation 797 348
Loss arising on the disposal
of investments during
the period 17 429
(Gain)/loss arising on
the revaluation of investments
at the period end (264) 18
Cash generated by operations 550 795
Decrease/(increase) in
receivables 596 (424)
(Decrease)/increase in
payables (97) 93
Net cash flows from operating
activities 1,049 464
----------- ------------
Cash flows from investing
activities
Purchase of financial
assets at fair value through
profit or loss - (5,850)
Sales of financial assets
at fair value through
profit or loss 477 4,634
Net cash flows from investing
activities 477 (1,216)
----------- ------------
Cash flows from financing
activities
Issue of shares - 6,824
Distribution of proceeds
from share cancellation (203) -
Dividends paid (2,495) (4,884)
Net cash flows from financing
activities (2,698) 1,940
----------- ------------
Net (decrease)/increase
in cash and cash equivalents (1,172) 1,188
=========== ============
Reconciliation of net
cash flow to movements
in cash and cash equivalents
Cash and cash equivalents
at 1 March 2017 1,525 337
Net (decrease)/increase
in cash and cash equivalents (1,172) 1,188
Cash and cash equivalents
at 28 February 2018 353 1,525
=========== ============
The accompanying notes on pages 51 to 64 form an integral part
of these statements.
Unaudited Non-Statutory Analysis of - The Ordinary Share
Fund
Statement of
Comprehensive Year ended 28 February Year ended 28
Income 2018 February 2017
---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income (1) - (1) 685 - 685
Realised (loss)
on investments - (17) (17) - (429) (429)
Unrealised (loss)
on investments - - - - (74) (74)
Investment return (1) (17) (18) 685 (503) 182
Investment management
fees (2) 19 17 (80) (92) (172)
Other expenses (5) 4 (1) (66) - (66)
(Loss)/profit
before taxation (8) 6 (2) 539 (595) (56)
Taxation 2 (4) (2) 11 57 68
(Loss)/profit
after taxation (6) 2 (4) 550 (538) 12
Profit and total
comprehensive
(loss)/income
for the year (6) 2 (4) 550 (538) 12
Basic and diluted
(loss)/earnings
per share (0.04p) 0.01p (0.03p) 2.71p (2.65p) 0.06p
-------- -------- -------- -------- -------- --------
Balance Sheet 28 February 2018 28 February 2017
GBP'000 GBP'000
Non-current
assets
Financial assets
at fair value
through profit
or loss - 5
-------- --------
Current assets
Assets held
for sale - 191
Receivables - 674
Corporation
tax - 68
Cash and cash
equivalents - 1,448
- 2,381
-------- --------
Current liabilities
Payables - (82)
-------- --------
Net assets - 2,304
-------- --------
Equity attributable
to equity holders - 2,304
-------- --------
Net asset value
per share - 11.32p
-------- --------
Statement of
Changes in Shareholders'
Equity
28 February
28 February 2018 2017
GBP'000 GBP'000
Opening shareholders'
funds 2,304 7,176
Cancellation
of shares (203) -
(Loss)/profit
for the year (4) 12
Dividend paid (2,097) (4,884)
Closing shareholders'
funds - 2,304
-------- --------
Unaudited Non-Statutory Analysis of - The Ordinary Share
Fund
Investment Portfolio 28 February 2018 28 February 2017
------------------------------------ ------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted qualifying
holdings - - - - 300 17.16 191 11.62
Non-Qualifying
holdings - - - - - - 5 0.30
Financial assets
at fair value through
profit or loss - - - - 300 17.16 196 11.92
Cash and cash equivalents - - - - 1,448 82.84 1,448 88.08
- - - - 1,748 100.00 1,644 100.00
=========== === ============= ==== ======== ======= ======== =======
Qualifying Holdings
Unquoted
Cinema Digitisation
DLN Digital Ltd - - - - 300 17.16 191 11.62
- - - - 300 17.16 191 11.62
=========== === ============= ==== ======== ======= ======== =======
Non-Qualifying
Holdings
Unquoted
Other
Broadpoint Ltd - - - - - - 5 0.30
- - - - - - 5 0.30
=========== === ============= ==== ======== ======= ======== =======
Unaudited Non-Statutory Analysis of - The A Share Fund
Statement of
Comprehensive Year ended 28 February Year ended 28
Income 2018 February 2017
---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 634 - 634 663 - 663
Unrealised gain
on investments - 240 240 - 30 30
Investment return 634 240 874 663 30 693
Investment management
fees (22) - (22) (163) (47) (210)
Other expenses (67) (2) (69) (52) - (52)
Profit/(loss)
before taxation 545 238 783 448 (17) 431
Taxation (104) - (104) (90) 10 (80)
Profit/(loss)
after taxation 441 238 679 358 (7) 351
Profit and total
comprehensive
income/(loss)
for the year 441 238 679 358 (7) 351
Basic and diluted
earnings/(loss)
per share 4.44p 2.39p 6.83p 3.61p (0.08p) 3.53p
-------- -------- -------- -------- -------- --------
Balance Sheet 28 February 2018 28 February 2017
GBP'000 GBP'000
Non-current assets
Financial assets
at fair value
through profit
or loss 9,744 9,802
-------- --------
Current assets
Receivables 764 678
Cash and cash
equivalents 274 29
1,038 707
-------- --------
Current liabilities
Payables (40) (73)
Corporation Tax (105) (80)
-------- --------
Net assets 10,637 10,356
-------- --------
Equity attributable
to equity holders 10,637 10,356
-------- --------
Net asset value
per share 106.90p 104.07p
-------- --------
Statement of
Changes in Shareholders'
Equity
28 February
28 February 2018 2017
GBP'000 GBP'000
Opening shareholders'
funds 10,356 10,005
Profit for the
year 679 351
Dividend paid (398) -
Closing shareholders'
funds 10,637 10,356
-------- --------
28 February 2018 28 February 2017
---------------------------------- ----------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted qualifying
holdings 6,323 64.86 6,577 65.65 6,323 64.51 6,335 64.44
Non-Qualifying holdings 3,151 32.33 3,167 31.61 3,449 35.18 3,467 35.27
Financial assets
at fair value through
profit or loss 9,474 97.19 9,744 97.26 9,772 99.69 9,802 99.71
Cash and cash equivalents 274 2.81 274 2.74 29 0.31 29 0.29
9,748 100.00 10,018 100.00 9,801 100.00 9,831 100.00
Qualifying Holdings
Unquoted
Hydro Electric Power
Green Highland Allt Choire A Bhalachain Ltd 30 0.31 30 0.30 30 0.31 29 0.29
Green Highland Allt
Garbh Ltd 2,250 23.08 2,250 22.46 2,250 22.96 2,250 22.89
Green Highland Allt
Ladaidh (1148) Ltd 1,470 15.08 1,802 17.99 1,470 15.00 1,470 14.95
Green Highland Allt
Luaidhe (228) Ltd 855 8.77 937 9.35 855 8.72 877 8.92
Green Highland Allt
Phocachain (1015)
Ltd 858 8.80 1,005 10.03 858 8.75 849 8.64
Green Highland Shenval
Ltd 860 8.82 553 5.52 860 8.77 860 8.75
6,323 64.86 6,577 65.65 6,323 64.51 6,335 64.44
28 February 2018 28 February 2017
Cost Valuation Cost Valuation
Non-Qualifying Holdings GBP'000 % GBP'000% GBP'000 % GBP'000%
Unquoted
Hydro Electric Power
Green Highland Allt Choire A Bhalachain Ltd 3 0.03 3 0.03 3 0.03 3 0.03
Green Highland Allt
Ladaidh (1148) Ltd 30 0.31 30 0.30 30 0.31 30 0.31
Green Highland Allt
Luaidhe (228) Ltd 61 0.63 61 0.61 61 0.62 61 0.62
Green Highland Allt
Phocachain (1015)
Ltd 2 0.02 3 0.03 3 0.03 3 0.03
Kinlochteacius Hydro
Ltd - - - - 47 0.48 47 0.48
SME Funding:
Hydro Electric Power
Broadpoint 2 Ltd 550 5.64 550 5.49 800 8.16 800 8.14
Broadpoint 3 Ltd 1,005 10.31 1,005 10.03 1,005 10.25 1,005 10.22
Other
Funding Path Ltd 1,000 10.26 1,000 9.98 1,000 10.20 1,010 10.27
Modern Power Generation
Ltd 500 5.13 515 5.14 500 5.10 508 5.17
3,151 32.33 3,167 31.61 3,449 35.18 3,467 35.27
Unaudited Non-Statutory Analysis of - The B Share Fund
Statement of
Comprehensive Year ended 28
Income Year ended 28 February 2018 February 2017
---------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 82 - 82 89 - 89
Unrealised gain
on investments - 24 24 - 26 26
Investment return 82 24 106 89 26 115
Investment management
fees (38) (8) (46) (87) (25) (112)
Other expenses (44) - (44) (30) - (30)
(Loss)/profit
before taxation - 16 16 (28) 1 (27)
Taxation - 2 2 6 5 11
(Loss)/profit
after taxation - 18 18 (22) 6 (16)
Loss and total
comprehensive
(loss)/income
for the year - 18 18 (22) 6 (16)
Basic and diluted
(loss)/earnings
per share (0.01p) 0.25p 0.24p (0.37p) 0.10p (0.27p)
---------- ---------
Unaudited Audited
Balance Sheet 28 February 2018 28 February 2017
GBP'000 GBP'000
Non-current
assets
Financial assets
at fair value
through profit
or loss 6,810 6,786
Current assets
Receivables 15 23
Corporation
Tax 2 11
Cash and cash
equivalents 79 48
96 82
Current liabilities
Payables (80) (60)
Net assets 6,826 6,808
Equity attributable
to equity holders 6,826 6,808
Net asset value
per share 100.00p 99.76p
Statement of
Changes in Shareholders'
Equity
Unaudited Audited
28 February 2018 28 February 2017
GBP'000 GBP'000
Opening shareholders'
funds 6,808 -
Issue of new
shares - 6,824
Loss for the
year 18 (16)
Closing shareholders'
funds 6,826 6,808
Investment Portfolio
28 February 2018 28 February 2017
---------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted qualifying holdings 5,100 74.57 5,100 74.03 5,100 74.91 5,100 74.62
Non-Qualifying holdings 1,660 24.27 1,710 24.82 1,660 24.38 1,686 24.67
Financial assets at fair value through profit
or loss 6,760 98.84 6,810 98.85 6,760 99.29 6,786 99.29
Cash and cash equivalents 79 1.16 79 1.15 48 0.71 48 0.71
6,839 100.00 6,889 100.00 6,808 100.00 6,834 100.00
Qualifying Holdings
Unquoted
Gas Power
Distributed Generators Ltd 3,200 46.79 3,200 46.45 3,200 47.00 3,200 46.82
Green Peak Generation Ltd 1,900 27.78 1,900 27.58 1,900 27.91 1,900 27.80
5,100 74.57 5,100 74.03 5,100 74.91 5,100 74.62
28 February 2018 28 February 2017
Cost Valuation Cost Valuation
Non-Qualifying Holdings GBP'000 % GBP'000% GBP'000 % GBP'000%
Unquoted
SME Funding
Other
Modern Power Generation Ltd 1,660 24.27 1,710 24.82 1,660 24.38 1,686 24.67
1,660 24.27 1,710 24.82 1,660 24.38 1,686 24.67
Notes to the Financial Statements
1. Corporate Information
The Financial Statements of the Company for the year ended 28
February 2018 were authorised for issue in accordance with a
resolution of the Directors on 17 May 2018.
The Company applied for listing on the London Stock Exchange on
24 December 2010.
Triple Point VCT 2011 plc is incorporated and domiciled in Great
Britain and registered in England and Wales. The address of the
Company's registered office, which is also its principal place of
business, is 18 St Swithin's Lane, London, EC4N 8AD.
The Company is required to nominate a functional currency, being
the currency in which the Company predominately operates. The
functional and reporting currency is pounds sterling (GBP),
reflecting the primary economic environment in which the Company
operates.
The principal activity of the Company is investment. The
Company's investment strategy is to offer combined exposure to cash
or cash based funds and venture capital investments focused on
companies with contractual revenues from financially secure
counterparties.
2. Basis of Preparation and Accounting Policies
Basis of Preparation
After making the necessary enquiries, the Directors confirm that
they are satisfied that the Company has adequate resources to
continue in business for the foreseeable future. The Board receives
regular reports from the Investment Manager and the Directors
believe that, as no material uncertainties leading to significant
doubt about going concern have been identified, it is appropriate
to continue to apply the going concern basis in preparing the
Financial Statements.
The Financial Statements of the Company for the year to 28
February 2018 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 November 2014 and updated in January
2017, in so far as this does not conflict with IFRS.
The Financial Statements are prepared on a historical cost basis
except that investments are shown at fair value through profit or
loss.
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 judgements, 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 (under the heading Non-Current Asset Investments) and in note
10; and
-- the recognition or otherwise of accrued income on loan notes
and similar instruments granted to investee companies, which are
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 and the assessment of realised losses. 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.
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 are not yet effective for the year
ended 28 February 2018, and have not been applied in preparing
these Financial Statements.
-- IFRS 9 Financial Instruments (1 January 2018)
-- IFRS 15 Revenue from contracts with customers (1 January
2018)
-- IFRS 16 Leases (1 January 2019)
The Directors have assessed the impact and are of the opinion
that these standards will not have a material effect on the
Financial Statements because investments will continue to be
measured at fair value through profit and loss and there will be no
material impact from the new impairment model.
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.
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 28 February 2018 was GBP17.46
million (2017: GBP19.47 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 to sell an
asset 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 2014. 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.
The Company has taken the exemption permitted by IAS 28
"Investments in Associates and Joint Ventures" and, upon initial
recognition, will measure its investments in Associates at fair
value with subsequent changes to fair value recognised in the
income statement in the period of change.
Income
Investment income includes interest earned on bank balances and
investment loans and 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 exit fee which has been charged to the capital account
and the investment management fee which has been charged 75% to the
revenue account and 25% to the capital account 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 Share
Classes using the net asset 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 AIC SORP 2014.
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
A Shares and B 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 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 unrealised capital reserve
is not distributable. The special distributable reserve was created
on court cancellation of the share premium account. The revenue
reserve, realised capital reserve and special distributable reserve
are distributable by way of dividend.
3. Segmental Reporting
The Directors are of the opinion that the Company only has a
single operating segment of business, being investment activity.
All revenues and assets are generated and held in the UK.
4. Investment Income
Year ended 28 February 2018 Year ended 28 February 2017
Ord Shares A Shares B Shares Total Ord Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loan interest (4) 634 82 712 52 663 89 804
Other investment income 3 - - 3 - - - -
Dividends received - - - - 633 - - 633
(1) 634 82 715 685 663 89 1,437
Disclosure by share class is unaudited.
5. Investment Management Fees
TPIM provides investment management and administration services
to the Company under an Investment Management Agreement effective
23 September 2010 and a deed of variation to that agreement
effective 23 December 2015.
A Shares: The agreement provides for an investment management
fee of 2.00% per annum of net assets payable quarterly in arrear
for A Shares. For A Shares the appointment shall continue for a
period of at least 6 years from the admission of those shares.
B Shares: The agreement provides for an investment management
fee of 1.90% per annum of net assets payable quarterly in arrear
for B Shares. For B Shares the appointment shall continue for a
period of at least 6 years from the admission of those shares.
An administration fee of GBP37,500 per annum is payable
quarterly in arrear.
Year ended 28 February 2018 Year ended 28 February 2017
Ord Shares A Shares B Shares Total Ord Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment Management Fees - - 32 32 90 189 100 379
TPIM agreed not to charge their management fees for the A share
class for the financial year ending 28 February 2018, to build up
distributable reserves improving the ability of the share class to
make dividend payments.
TPIM agreed not to charge their management fees from 1 January
2017 on the amounts invested in gas power projects, which
represents circa 75% of the B Share Class NAV, until these
investments started to generate income.
The total amount waived for both share classes was GBP303,300
which subject to available distributable reserves and the agreement
of the Board maybe recoverable in future periods.
Fees paid to the Investment Manager for administrative and other
services during the year was GBP19,000 (2017: GBP115,000). The
investment Manager also received fees of GBP67,000 (2017:
GBP290,000) for services provided to investee companies.
6. Legal and Professional Fees
Legal and professional fees include remuneration paid to the
Company's auditor, BDO LLP (2017 fees payable to Grant Thornton
LLP) as shown in the following table:
Year ended 28 February 2018 Year ended 28 February 2017
Ord Shares A Shares B Shares Total Ord Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fees payable to the Company's auditor:
for the audit of the Financial
Statements 1 10 7 18 5 8 4 17
1 10 7 18 5 8 4 17
Disclosure by share class is unaudited.
7. Directors' Remuneration
Year ended 28 February 2018 Year ended 28 February 2017
Ord Shares A Shares B Shares Total Ord Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Jane Owen 1 11 6 18 4 8 5 17
Chad Murrin 1 9 5 15 4 7 4 15
Tim Clarke - 8 7 15 4 7 4 15
2 28 18 48 12 22 13 47
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.
8. Taxation
Year ended 28 February 2018 Year ended 28 February 2017
Ord Shares A Shares B Shares Total Ord Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
(Loss)/profit on ordinary
activities before tax (2) 783 16 797 (55) 431 (27) 348
Corporation tax @ 19%/(20%) - 152 3 155 (11) 86 (5) 70
Effect of:
Utilisation of tax losses
brought forward - - - - (38) - - (38)
Capital losses/(gains) not
taxable 3 (46) (4) (47) 100 (6) (6) 88
Dividends received not taxable - - - - (126) - - (126)
Disallowed expenditure (1) - - (1) 7 - - 7
Tax (charge)/credit for the
period 2 104 (2) 104 (68) 80 (11) 1
Capital gains and losses are exempt from corporation tax due to
the Company's status as a Venture Capital Trust.
9. Earnings per Share
On the 16 January 2018, the Ordinary Shares were cancelled.
During the period to cancellation the loss per O Share was 0.03p
(2017: earnings 0.06p) and was based on a loss from ordinary
activities after tax of GBP4,714 (2017: profit GBP12,675) and on
the weighted average number of Ordinary shares in issue during the
period 17,896,734 (2017: 20,349,869).
The earnings per A Share is 6.83p and is based on a profit from
ordinary activities after tax of GBP679,845 (2017: GBP350,664) and
on the weighted average number of A Shares in issue during the
period of 9,951,133 (2017: 9,951,133).
The earnings per B Share is 0.24p (2017: 0.27p), and is based on
a profit from ordinary activities after tax of GBP16,275 (2017:
16,246) and on the weighted average number of B Shares in issue
during the period of 6,824,266 (2017: 6,109,517).
Other than the cancellation of the Ordinary shares, there were
no other share issues or disposals.
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.
There have been no transfers between these classifications in
the period. Any change in fair value is recognised through the
Statement of Comprehensive Income.
The portfolio of the Company is classified as level 3 and
further details of the types of investments are provided in the
Investment Manager's Review and Investment Portfolio on pages 11
and 15.
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 majority of investments being valued on discounted
cash flows or price of recent transactions.
Valuation techniques and unobservable inputs:
Inter relationship between significant
Significant unobservable unobservable inputs and fair value
Sector Valuation Techniques inputs measurement
Estimated fair value would
increase/(decrease) if:
Hydroelectric
Power * Discounted cash flows: The valuation model considers * Discount rate 7.25% * The discount rate was lower/(higher)
the present value of expected payment, discounted
using a risk-adjusted discount rate.
(2017: 10.00%)
* Inflation rate 2.5%
* The inflation rate was higher/(lower)
(2017: 2.0%)
The Board considers the discount rates used reflect the current
levels of risk and life expectancy of the investments and to be in
line with Market expectations. However, consideration has been
given whether the effect of changing one or more inputs to
reasonably possible alternative assumptions would result in a
significant change to the fair value measurement. Each unquoted
portfolio company has been reviewed in order to identify the
sensitivity of the valuation methodology to using alternative
assumptions.
On this basis, where discount rates have been applied to the
unquoted investments, alternative discount rates have been
considered, an upside case and a downside case. For the upside
case, the assumptions were flexed 1% and for the downside scenarios
the assumptions were flexed by 0.5%. No sensitivity has been
performed on other key assumptions such as asset life, P50 and
power price forecasts because the directors do not believe there
are reasonable alternative assumptions.
The two alternative scenarios for each investment have been
modelled with the resulting movements as follows:
Applying the downside alternative, the aggregate change in value
of the unquoted investments would be a reduction in the value of
the portfolio of GBP163,058 or 1% per cent.
Using the upside alternative the aggregate value of the unquoted
investments would be an increase of GBP360,646 or 2.18% per
cent.
It is considered that, due to the prudent selection of discount
rates by the board, the sensitivity discussed above provides the
most meaningful potential impact of the possible changes across the
portfolio.
Movements in investments held at fair value through the profit
or loss during the year to 28 February 2018 were as follows:
Year ended 28 February 2018 Year ended 28 February 2017
Ord Shares A Shares B Shares Total Ord Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening Cost - 9,772 6,760 16,532 5,494 9,466 - 14,960
Opening unrealised gains 5 30 26 61 256 - - 256
Opening fair value at 1 March
2017 5 9,802 6,786 16,593 5,750 9,466 - 15,216
Purchases at cost - - - - - - 5,850 5,850
Disposal proceeds (2) (298) - (300) (2,195) (1,120) (490) (3,805)
Transfers between share
classes - - - - (2,826) 1,426 1,400 -
Realised loss on disposal (3) - - (3) (459) - - (459)
Investment holding gains - 240 24 264 (124) 30 26 (68)
Reclassification as assets
held for sale - - - - (141) - - (141)
Closing fair value at 28
February 2018 - 9,744 6,810 16,554 5 9,802 6,786 16,593
Closing cost - 9,474 6,760 16,234 - 9,772 6,760 16,532
Closing investment holding
gains - 270 50 320 5 30 26 61
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.
Further details of the types of investments are provided in the
Investment Manager's review and investment portfolio on pages
11-20, and details of entities over which the VCT has significant
influence are included on page 21.
Material disposals during the year
During the year a non-qualifying investment repaid part of its
loan of GBP250,000.
Deferred consideration for the sale of a portfolio of solar
assets, which were disposed of in the prior year was realised and
GBP25,000 was written off as it was deemed irrecoverable.
Disclosure by share class is unaudited.
11. Assets Held for Sale
Assets held for Sale are measured at fair value through profit
or loss at the discounted price expected to be achieved through the
sale after the year end and are classified as Level 3 Unquoted
Investments.
Disposal of assets held for sale during the year
Investee Company Cost Opening Valuation Disposal Realised Gain
GBP'000 GBP'000 GBP'000 GBP'000
DLN Digital Equity - 191 (199) 8
- 191 (199) 8
There were no income or expenses for the year relating to these
disposals.
The investment was disposed of on 26 July 2017.
12. Receivables
28 February 2018 28 February 2017
Ord Shares A Shares B Shares Total Ord Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Accrued income - 101 13 114 2 102 18 122
Prepaid expenses - 3 2 5 2 2 1 5
Other debtors - 660 - 660 670 574 4 1,248
- 764 15 779 674 678 23 1,375
Other debtors relate to interest receivable on investment
loans.
13. Cash and Cash Equivalents
Cash and cash equivalents comprise deposits with The Royal Bank
of Scotland plc and Cater Allen Private Bank.
14. Payables and Accrued Expenses
28 February 2018 28 February 2017
Ord Shares A Shares B Shares Total Ord Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Trade Creditors - 23 69 92 5 59 51 115
Other taxation and social
security - 3 2 5 2 2 1 5
Accrued expenses & deferred
income - 14 9 23 75 12 8 95
- 40 80 120 82 73 60 215
Disclosure by share class is unaudited.
15. Share Capital
28 February 2018 28 February 2017
Ordinary Shares of GBP0.01 each
Issued & Fully Paid
Number of shares - 20,349,869
Par Value GBP'000 - 203
Authorised
Number of shares - 60,000,000
Par Value GBP'000 - 600
A Ordinary Shares of GBP0.01 each
Issued & Fully Paid
Number of shares 9,951,133 9,951,133
Par Value GBP'000 100 100
Authorised
Number of shares 10,000,000 10,000,000
Par Value GBP'000 100 100
B Ordinary Shares of GBP0.01 each
Issued & Fully Paid
Number of shares 6,824,266 6,824,266
Par Value GBP'000 68 68
Authorised
Number of shares 10,000,000 10,000,000
Par Value GBP'000 100 100
Company Total Shares of GBP0.01 each
Issued & Fully Paid
Number of shares 16,775,399 37,125,268
Par Value GBP'000 168 371
On 16 January 2018 the Ordinary Shares were cancelled.
16. Financial Instruments and Risk Management
The Company's financial instruments comprise VCT qualifying
investments and non-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.
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 held Fair value through profit
Total value Loan and receivables at amortised cost or loss
GBP'000 GBP'000 GBP'000 GBP'000
Year ended 28 February 2018
Assets:
Financial assets at fair
value through profit or
loss 16,554 - - 16,554
Assets held for sale - -
Receivables 774 774 - -
Cash and cash equivalents 353 353 - -
17,681 1,127 - 16,554
Liabilities:
Other Payables 120 - 120 -
120 - 120 -
Year ended 28 February 2017
Assets:
Financial assets at fair
value through profit or
loss 16,593 - - 16,593
Assets held for sale 191 - - 191
Receivables 1,370 1,370 - -
Cash and cash equivalents 1,525 1,525 - -
19,679 2,895 - 16,784
Liabilities:
Other Payables 210 - 210 -
210 - 210 -
Fixed Asset Investments (see note 10) 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 on 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 or a recent
transaction price.
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 investments 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 15 to 21.
An increase of 1% in the value of investments would increase the
capital profits for the period and the net asset value at 28
February 2018 by GBP165,535. 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 qualifying holdings are part equity and
part loan. The loan element of investments totals GBP3,397,000
(2017: GBP3,397,000) and is subject to fixed interest rates of
between 21.6% and 29.5% for between 5 - 20 years and, as a result,
there is no cash flow 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 Company also has non-qualifying loan investments of
GBP3,380,000 (2017: GBP3,677,000) which carry interest rates
between 7.75 and 13.5% for between 5 - 15 years.
The amounts held in variable rate investments at the balance
sheet date are as follows:
28 February 2018 29 February 2017
GBP'000 GBP'000
Cash on Deposit 353 1,525
353 1,525
An increase in interest rates of 1% per annum would not have a
material effect either on the revenue for the year or the net asset
value at 28 February 2018. The Board believes that in the current
economic climate a movement of 1% is reasonably possible.
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.
28 February
2018 28 February 2017
GBP'000 GBP'000
Non Qualifying investment loans 3,446 3,744
Qualifying investment loans 3,406 3,397
Cash on Deposit 353 1,525
Receivables 774 1,370
7,979 10,036
The Directors do not consider any investment loan included above
to be past due or impaired and no issues have been identified which
would be cause for concern with regards the quality of credit for
any investee company.
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. As a result the Company may not be
able to realise some of its investments in these instruments
quickly at an amount close to their fair value in order to meet its
liquidity requirements.
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 where cash and
future cash flows from operating activities will be sufficient to
pay expenses. At 28 February 2018 cash held by the Company amounted
to GBP353,000.
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 for the A Shares is 106.90p and is
calculated based on net assets of GBP10,638,000 divided by the
9,951,133 A Shares in issue.
The net asset value per share for the B Shares is 1.00p and is
calculated on net assets of GBP6,824,000 divided by the 6,824,266 B
Shares in issue.
18. Commitments and Contingencies
The Company has no contingent liabilities or commitments.
19. Relationship with Investment Manager
During the period, TPIM received GBP51,394 (which has been
expensed by the Company) for providing management and
administrative services to the Company. TPIM have agreed not to
charge their management fees for the A Share Class for the current
financial year ending 28 February 2018, to enable the A Share Class
to build up distributable reserves. TPIM have agreed not to charge
their management fees from 1 January 2017 on the amounts invested
into two companies constructing gas power plants, which represents
circa 75% of the B Share Class NAV, until these investments start
to generate income for the B Share Class.
20. Related Party Transactions
The Directors Remuneration Statement on pages 32 to 33 discloses
the Directors' remuneration and shareholdings.
There were no other related party transactions during the
period.
21. Post Balance Sheet Events
There were no post balance sheet events.
22. Dividend
Ordinary Share Class:
On 13 April 2017 a dividend of GBP1,017,493 equal to 5p per
share was paid to the Ordinary Class Shareholders.
On 23 June 2017 a dividend of GBP406,997 equal to 2p per share
was paid to the Ordinary Class Shareholders. On 24 November a
dividend of GBP671,546 equal to 3.30p per share was paid to the
Ordinary Class Shareholders.
During the year dividends of GBP255,843 were paid out of the
Special Distributable Reserve, GBP1,381,390 from the Realised
Capital Reserve and GBP458,803 from Revenue Reserve.
Following the final dividend, the shares were cancelled and a
final payment of GBP203,499 equal to 1p per share was paid to the
Ordinary Shareholders, bringing the total return to Ordinary
Shareholders to 115.05p.
A Share Class:
On 23 June 2017 a dividend of GBP398,045 equal to 4p per share
was paid to the A Class Shareholders. This was paid entirely from
the Revenue Reserve.
The Board has resolved to pay a second dividend to A Class
Shareholders of GBP273,656 equal to 2.75p per share which will be
paid on 28 June 2018 to shareholders on the register on 15 June
2018.
Information
Details of Advisers
Secretary and Registered Office:
Triple Point Investment Management LLP
18 St Swithin's Lane
London
EC4N 8AD
Registered Number
07324448
FCA Registration number
659605
Investment Manager and Administrator
Triple Point Investment Management LLP
18 St Swithin's Lane
London
EC4N 8AD
Tel: 020 7201 8989
Independent Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Solicitors
Howard Kennedy LLP
No. 1 London Bridge
London
SE1 9BG
Registrars
Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
West Midlands
B63 3DA
VCT Taxation Advisers
Philip Hare & Associates LLP
First floor
4-6 Staple Inn
Holborn
London
WC1V 7QH
Bankers
The Royal Bank of Scotland plc
54 Lime Street
London
EC3M 7NQ
Shareholder Information
The Company
Triple Point VCT 2011 plc is a Venture Capital Trust. The
Investment Manager is Triple Point Investment Management LLP. The
Company was incorporated on 23 July 2010.
The Company's investment strategy is to offer combined exposure
to cash or cash based funds and venture capital investments focused
on companies with contractual revenues from financially secure
counterparties. The Company continues to meet the condition that
70% of relevant funds must be invested in qualifying
investments.
Financial Calendar
The Company's financial calendar is as follows:
12 July 2018 Annual General Meeting
October 2018 Interim report for the six months ending 31 August 2018 despatched
May 2019 Results for the year to 28 February 2019 announced;
Annual Report and Financial
Statements published.
Notice of Annual General Meeting
NOTICE is hereby given that the Annual General Meeting of Triple
Point VCT 2011 plc will be held at 18 St Swithin's Lane, London,
EC4N 8AD at 10.45am on Thursday 12 July 2018 for the following
purposes:
Ordinary Business
1. To receive, consider and adopt the Report of the Directors
and Financial Statements of the Company for the year ended 28
February 2018 together with the Independent Auditors Report thereon
(Ordinary Resolution).
2. To approve the Directors' Remuneration Report for the year
ended 28 February 2018 (Ordinary Resolution).
3. To re-elect Jane Owen as a Director (Ordinary
Resolution).).
4. To appoint BDO LLP as Auditor and determine their
remuneration (Ordinary Resolution).
Special Business
5. 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 section 693(4) of the Act) of A
Shares or B Shares provided that:
(i) the maximum aggregate number of A Shares authorised to be
purchased is an amount equal to 10% of the issued A Shares as at
the date of this Resolution;
(ii) the maximum aggregate number of B Shares authorised to be
purchased is an amount equal to 10% of the issued B Shares as at
the date of this Resolution;
(iii) the minimum price which may be paid for an A Share or B Share is 1 pence;
(iv) the maximum price which may be paid for an A Share or B
Share is an amount, exclusive of expenses, equal to 105 per cent.
of the average of the middle market prices for the A Shares and B
Shares as derived from the Daily Official List of the UK Listing
Authority for the five business days immediately preceding the day
on which that A Share or B Share (as applicable) is purchased;
and
(v) this authority shall expire either 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).
By Order of the Board
Jane Owen
Director
Registered Office:
18 St Swithin's Lane
London EC4N 8AD 17 May 2018
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.
(v) Form of Proxy
Relating to the 2018 Annual General Meeting of Triple Point VCT
2011 plc
I/We..........................................................................................................................................
BLOCK CAPITALS PLEASE - Name in which shares registered
of.............................................................................................................................................
................................................................................................................................................
or failing him/her the Chairman of the meeting to be my/our
proxy and vote for me/us on my/our behalf at the Annual General
Meeting of the Company to be held on 10.45am on Thursday 12 July
2018, notice of which was sent to shareholders with the Directors'
Report and the accounts for the period ended 28 February 2018, and
at any adjournment thereof. The proxy will vote as indicated below
in respect of the resolutions set out in the notice of meeting:
Resolution number For Against Withheld
1. To receive, consider and adopt the Report of the Directors and the Financial Statements
for
the year ended 28 February 2018.
2. To approve the implementation report set out in the Directors' Remuneration Report for the
year ended 28 February 2018.
3. To re-elect Jane Owen as a Director
4. To appoint BDO LLP as auditor and authorise the Directors to agree their remuneration.
5. To authorise the Directors to make market purchases of the Company's own shares (Special
Resolution).
Signed:
.......................................................................
Dated: ................................................ ..2018
Notes
1. A member wishing to appoint a person other than the Chairman
of the meeting as proxy should insert the name and address of such
person in the space provided.
2. Use of the proxy form does not preclude a member from attending and voting in person.
3. Where this form of proxy is executed by a corporation it must
be either under its seal or under the hand of an officer or
attorney duly authorised.
4. If the proxy form is signed and returned without any
indication as to how the proxy shall vote, the proxy will exercise
his/her discretion as to whether and how he/she votes.
5. To be valid, the proxy form must be received by Neville
Registrars at Neville House, 18 Laurel Lane, Halesowen, West
Midlands B63 3DA no later than 48 hours before the commencement of
the meeting.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UBONRWRAVAAR
(END) Dow Jones Newswires
May 17, 2018 12:40 ET (16:40 GMT)
Triple Point Vct 2011 (LSE:TPOA)
Historical Stock Chart
From Apr 2024 to May 2024
Triple Point Vct 2011 (LSE:TPOA)
Historical Stock Chart
From May 2023 to May 2024