TIDMTPO
RNS Number : 3401F
Triple Point VCT 2011 Plc
16 May 2017
Triple Point VCT 2011 plc
LEI: 213800AOOAQA5XQDEA89
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 2017.
These results were approved by the Board of Directors on 16 May
2017.
You may view the Annual Report in due course on the Triple Point
website www.triplepoint.co.uk
Financial Summary
Year ended Year ended
28 February 2017 29 February 2016
Ordinary Ordinary
Shares A Shares B Shares Total Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Net assets 2,304 10,356 6,808 19,468 7,176 10,005 - 17,181
Profit/(loss)
before tax (56) 431 (27) 348 41 137 - 178
--------- --------- --------- -------- --------- --------- --------- --------
Earnings/(loss)
per share 0.06p 3.53p (0.27p) n/a 0.33p 1.20p - n/a
--------- --------- --------- -------- --------- --------- --------- --------
Cumulative return
to shareholders
(p)
Net asset value
per share 11.32p 104.07p 99.76p 35.26p 100.54p -
Total dividends
paid 103.75p - - 79.75p - -
Net asset value
plus dividends
paid 115.07p 104.07p 99.76p 115.01p 100.54p -
--------- --------- --------- --------- --------- ---------
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 28 April 2011 the Company raised GBP19.3
million and as at the date of this report has a total of 20,349,869
Ordinary Shares in issue from that offer. By 28 February 2017 a
total of GBP21.1 million had been returned to the Ordinary
Shareholders.
-- A Shares: On 30 April 2015 a new 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 a new 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 34 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
2017.
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
2017.
During the year the Company has continued to make progress with
the realisation of the investment portfolio attributable to the
Ordinary Share Class, whilst investing funds raised through last
year's B Share Class Offer and continuing to monitor the ongoing
operation of the A Share Class investments.
Investment Portfolio
The Company's funds at 28 February 2017 were 92% 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. At 28
February 2017 qualifying investments represented 64% of the total
Investment Portfolio and 98% of the funds that are required to meet
the 70% condition.
The Investment Manager's review on pages 12 to 14 gives an
update on the portfolio of investments in 14 small unquoted
businesses.
Ordinary Share Class
The Company and the Investment Manager have successfully
realised a further GBP6.4 million of investments during the year.
The remaining assets are expected to be realised by the end of
2017.
At the year end the net asset value ("NAV") per share stood at
11.32p. Taken together with the cumulative dividends paid of
103.75p per share this gives an equivalent NAV per share total
return of 115.07p.
On 11 November 2016 a dividend of GBP4.9 million equal to 24p
per share was paid to the Ordinary Class Shareholders. Since the
year end, on 13 April 2017 a dividend of GBP1.0 million equal to 5p
per share was paid to Ordinary Class Shareholders. The Board has
resolved to pay a further dividend to Ordinary Class Shareholders
of GBP406,997 equal to 2p per share which will be paid on 23 June
2017 to shareholders on the register on 9 June 2017. When all
remaining assets have been realised the Ordinary Shares will pay a
final dividend following which the shares will be cancelled.
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. As expected six of
the schemes have been successfully commissioned and are
operational, with one due to be commissioned in June 2017.
The A Share Class has recorded a profit over the period of 3.53p
per share. At the year end the net asset value ("NAV") per share
stood at 104.07p. The Board has resolved to pay the first dividend
to A Class Shareholders of GBP398,045 equal to 4p per share which
will be paid on 23 June 2017 to shareholders on the register on 9
June 2017.
The A share class, during the initial deployment stage, is
targeting a cash return to investors of 100p by the end of year six
from a mixture of the initial income tax rebate, tax-free dividends
and a capital realisation. In the following Income Generation stage
the target is to distribute an average annual dividend of around 7%
of the NAV for nine years and a final payment of circa 50p per
share in 2030. At the outset the Board anticipated average annual
dividends of 5p per annum in the initial deployment stage. The
declared dividend is marginally lower than the anticipated average
due to its payment being restricted to the distributable profits of
the A Share Class.
B Share Class
The B Share Class has invested GBP5.1 million into companies
exploring opportunities in gas power projects ("Gas Power") in the
UK and GBP1.7 million into SME funding. During May 2017 Green Peak
Generation Ltd reached financial close on a 7.5 MW gas power plant
in Cumbria, which is expected to be commissioned during Q1
2018.
The B Share Class offer closed on 29 April 2016 with a total of
6,824,266 B Shares being issued. The B Share Class has recorded a
small loss over the period of 0.27p per share due to running costs
exceeding income while investments are being sought. The net asset
value ("NAV") per share stood at 99.76p.
Principal Risks
The Board believes that the principal risks facing the Company
are:
-- 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
The Company and the Investment Manager continue to focus on:
successful realisation of the remaining Ordinary Share Class
investments and subsequent distribution; monitoring ongoing
operation of the A Share Class investments in Hydroelectricity
generation businesses; and ensuring that the companies in which the
B Share Class has invested develop their businesses in line with
the Company's strategy and the requirements of the VCT
legislation.
If you have any questions about your investment, please do not
hesitate to contact Triple Point on 020 7201 8990.
Jane Owen
Chairman
16 May 2017
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 net asset value per share at 28
February 2017 of 11.32p and cumulative dividend payments of
103.75p, bringing the total return to date to 115.07p.
The Ordinary Share Class reported an income return of 2.71p and
a capital loss of 2.65p for the year to 28 February 2017. The
income return includes dividends received from the two companies
which resulted in a corresponding capital loss to write down the
assets by the same amount. This compares with an aggregate return
for the previous year of 0.33p.
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 3.61p and a capital loss of 0.08p for the year to
28 February 2017. The net asset value per share for the A Share
Class at 28 February 2017 stood at 104.07p.
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 0.37p and a capital profit of 0.10p for the year to
28 February 2017. The net asset value per share for the B Share
Class at 28 February 2017 stood at 99.76p.
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 12 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 Ordinary Share Fund and 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.
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 flow 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;
(i) in respect of the Ordinary Share Fund, the prospect of
achieving an exit after 5 years of the life of the Ordinary Share
Fund; and
(j) 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. The Investment Manager will make
sure that all non-qualifying investments made after that date meet
the new requirements.
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 below:
Investment Portfolio - Ordinary Share Class
VCT qualifying investments 12%
Cash 88%
Investments by Sector - Ordinary Share Class
Cinema Digitisation 97%
SME Lending - other 3%
Investment Portfolio - A Share Class
VCT qualifying investments 65%
VCT non qualifying investments 35%
Investments by Sector - A Share Class
Hydro electric power ` 64%
SME Lending - hydro electric power 20%
SME Lending - other 16%
Investment Portfolio - B Share Class
VCT qualifying investments 74%
VCT non qualifying investments 25%
Cash 1%
Investments by Sector - B Share Class
Gas power ` 75%
SME Lending - other 25%
VCT Regulation
VCTs were introduced in the Finance Act 1995 to provide a means
for private individuals to invest in unquoted companies in the UK.
The Finance Act 2004 introduced changes to VCT legislation designed
to make VCTs more attractive to investors. The tax benefits
available to eligible investors in VCTs include:
-- up-front income tax relief of 30%
-- exemption from income tax on dividends received
-- exemption from capital gains tax on disposals of shares in VCTs.
The Company was provisionally approved as a VCT by Her Majesty's
Revenue and Customs. In order to secure final approval the Company
must comply with certain requirements on a continuing basis. Within
three years from the effective date of provisional approval or
later allotment at least 70% of the Company's investments must
comprise "qualifying holdings" of which at least 30% must be in
eligible Ordinary Shares. This investment criterion 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 Company and Investment Manager are committed to ensuring a
timely exit and return of funds to Ordinary Class Shareholders and
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.
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, which is expected to
complete during 2017.
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. 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 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.
Internal control risk: the Board regularly reviews the system of
internal controls, both financial and non-financial, operated by
the Company and the Investment Manager. These include controls
designed to ensure that the Company's assets are safeguarded and
that proper accounting records are maintained.
Viability Statement
In accordance with provision C.2.2 of the 2014 revision to the
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 the new requirement,
the Board takes into account the Company's current position and the
principal risks as set out on page 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 Ordinary and B Share Class will reach their 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 56 staff of whom 31 are men and 25 are
women.
Investment Manager's Review
Sector Analysis
The unquoted investment portfolio can be analysed as
follows:
Electricity
Generation SME Funding
Hydro Total
Industry Cinema Project Hydroelectric Hydroelectric Unquoted
Sector Digitisation Management Power Other Power Other Investments
--------------- -------------- ------------ -------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- -------------- ------------ -------------- -------- -------------- -------- -------------
Investments
at 29
February
2016
---------------
Ordinary
Shares 141 1,099 1,342 2,696 - 1,265 6,543
A shares - - 6,661 - 1,805 1,000 9,466
--------------- -------------- ------------ -------- -------------
141 1,099 8,003 2,696 1,805 2,265 16,009
--------------- -------------- ------------ -------------- -------- -------------- -------- -------------
Investments
made during
the period
--------------- -------------- ------------ -------------- -------- -------------- --------
Ordinary
Shares - - - - - - -
A Shares - - 920 - 6 500 1,426
B Shares - - - 5,100 - 2,650 7,750
-------------
- - 920 5,100 6 3,150 9,176
--------------- -------------- ------------ -------------- -------- -------------- -------- -------------
Investments
disposed
of during
the period
--------------- -------------- ------------ -------- -------------
Ordinary
Shares - (1,157) (1,342) (2,726) - (1,137) (6,362)
A shares - - (1,258) - 138 - (1,120)
B Shares - - - - - (990) (990)
-------------- ------------ -------------- -------- -------------- -------- -------------
- (1,157) (2,600) (2,726) 138 (2,127) (8,472)
--------------- -------------- ------------ -------------- -------- -------------- -------- -------------
Investment
revaluations
during
the period
--------------- -------------- ------------ -------------- -------- -------------- -------- -------------
Ordinary
Shares 50 58 - 30 - (123) 15
A shares - - 12 - - 18 30
B Shares - - - - - 26 26
-------------
50 58 12 30 (79) 71
--------------- -------------- ------------ -------------- -------- -------------- -------- -------------
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
191 - 6,335 5,100 1,949 3,209 16,784
--------------- -------------- ------------ -------------- -------- -------------- -------- -------------
Unquoted
Investments
% 1.14% 0.00% 37.74% 30.39% 11.61% 19.12% 100.00%
--------------- -------------- ------------ -------------- -------- -------------- -------- -------------
The Company's funds at 28 February 2017 were 92% 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. At 28
February 2017 qualifying investments represented 64% of the total
Investment Portfolio and 98% of the funds that are required to meet
the 70% condition.
The VCT was established to fund small and medium sized
enterprises. It has three share classes each invested in their own
portfolio as detailed on page 12. At the year end the overall
portfolio comprised investments in 14 small, unquoted companies in
three sectors: cinema digitisation; electricity generation; and SME
funding.
The Company's portfolio is spread between businesses which are
at start-up stage and those which are more mature, and where the
Company is looking for potential exits. Generally performance
during the year across the portfolio has been satisfactory, with
the A and Ordinary Share Classes recording an uplift in net asset
value from the performance of their portfolios.
Review & Outlook
Ordinary Share Class
The coming year will see the Company and the Investment Manager
continuing to focus on the successful realisation of the Ordinary
Share Class investments. April 2016 marked the end of the Company's
five year minimum VCT holding period. In line with its investment
strategy we are working towards facilitating a rapid exit for
shareholders.
To date the Company has distributed to the Ordinary Class
Shareholders 108.75p per share. A further dividend of 2p per share
has been declared, payable on 23 June 2017. Over the next few
months the Investment Manager will work to collect the remaining
deferred consideration relating to the solar company sales, as well
as realise the Ordinary Share Class investment in cinema
digitisation. Once both of these have been completed the VCT will
look to pay a dividend to the Ordinary Shareholders, expected to be
before the end of the calendar year.
A Share Class
The A share class, during the initial deployment stage, is
targeting a cash return to investors of 100p by the end of year six
from a mixture of the initial income tax rebate, tax-free dividends
and a capital realisation. At the outset the Investment Manager
anticipated average annual dividends of 5p per annum in the Initial
deployment stage. The dividend declared of 4p per share is
marginally lower than the anticipated average due to its payment
being restricted to the distributable profits of the A Share
Class.
The A Share Class has investments in six companies which between
them own seven hydroelectric schemes in the Scottish Highlands. The
last scheme is due to be commissioned in June 2017.
Hydroelectric Power
2016 was a mixed year for the VCTs hydro portfolio. All the
relevant schemes were commissioned on time and within budget,
snagging issues were addressed early in the year and the schemes
performed well when operating, however, the autumn and winter
periods were uncharacteristically dry, and river levels were
significantly below the long term average. Whilst reduced
generation in the first full year of operation is frustrating, we
remain confident in our long term forecasts and the original
hydrology studies that the schemes were based on.
During the year there were major upgrade works carried out on
the Transmission Network by SSE, and consequently five of the
schemes were restricted to just 50kW of output for periods of up to
11 to 59 days. Although the majority of restricted generation
occurred on days when there was little or no river flow, it has had
a negative impact on revenue generation nonetheless. We are not
expecting this to be a continuing issue for the schemes as the
majority of works have now been completed.
In addition to earning RPI-linked Feed-in Tariffs, the schemes
have also earned revenue through the sale of electricity under
Power Purchase Agreements. At outset, the companies expected to
earn a total of 5p per kWh for the sale of electricity and embedded
benefits, and we are pleased to report that on average the schemes
have been earning 6.62p per kWh.
In December 2016, the Scottish Assessor announced new draft
business rates that in some instances were 2.5 times the current
level. Over the past few months there has been extensive lobbying
by the industry as a whole, and it is expected that existing
schemes under 1MW will be limited to an increase of 12.5%, which is
good news for the majority of the portfolio. The position of new
schemes and schemes over 1MW remains unclear.
Looking forward to the coming year, we will focus our attention
on aligning and optimising the power purchase agreements for the
portfolio of companies, looking at ways to increase performance
through asset management, and working with Green Highland
Renewables and the British Hydro Association to assess and
potentially challenge the proposed new business rates.
B Share Class
Going forward, the Company and the Investment Manager are
focused on ensuring that the proceeds of the B Share Class offer
are invested in line with the Company's strategy and the
requirements of the VCT legislation.
Gas Power
The Company has invested in two companies looking to construct
and operate gas power projects. The projects that the B Share Class
investment companies are targeting utilise simple technology,
typically provided by Clarke Energy or Rolls Royce, to provide a
reliable and secure energy supply. The first power plant is under
construction and expected to start generating in Q1 2018. The
second company is targeting construction commencement in Q3 this
year. A more detailed review will be included once the plants are
commissioned.
Non Qualifying Investments
SME Funding
The Company has investments in four finance companies which
provide short and medium term funding to a range of small and
medium sized businesses.
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
16 May 2017
Investment Portfolio Summary
28 February 2017 29 February 2016
------------------------------------ ------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted Qualifying
Holdings 11,723 63.85 11,626 63.51 10,637 65.72 10,672 65.27
Unquoted Non Qualifying
Holdings 5,109 27.84 5,158 28.18 5,208 32.19 5,337 32.65
16,832 91.69 16,784 91.69 15,845 97.91 16,009 97.92
Cash and cash equivalents 1,525 8.31 1,525 8.31 337 2.09 337 2.08
18,357 100.00 18,309 100.00 16,182 100.00 16,346 100.00
======== ======= ======== ======= ======== ======= ======== =======
Unquoted Qualifying
Holdings
Cinema Digitisation
DLN Digital Ltd * 300 1.63 191 1.04 300 1.85 141 0.86
Hydro Project Management
Highland Hydro Services
Ltd - - - - 813 5.02 1,099 6.72
Landfill Gas
Aeris Power Ltd - - - - 575 3.55 464 2.84
Craigahulliar Energy
Ltd - - - - 310 1.92 329 2.01
Hydroelectric Power
Green Highland Allt
Choire A Bhalachain
(255) Ltd 30 0.16 29 0.16 30 0.19 30 0.18
Green Highland Allt
Garbh Ltd 2,250 12.26 2,250 12.29 2,250 13.90 2,250 13.76
Green Highland Allt
Ladaidh (1148) Ltd 1,470 8.01 1,470 8.03 1,470 9.08 1,470 8.99
Green Highland Allt
Luaidhe (228) Ltd 855 4.66 877 4.79 855 5.28 855 5.23
Green Highland Allt
Phocachain (1015) Ltd 858 4.67 849 4.64 858 5.30 858 5.25
Green Highland Shenval
Ltd 860 4.68 860 4.70 1,276 7.89 1,276 7.81
Gas Power
Distributed Generators
Ltd 3,200 17.43 3,200 17.48 - - - -
Green Peak Generation
Ltd 1,900 10.35 1,900 10.38 1,900 11.74 1,900 11.62
11,723 63.85 11,626 63.51 10,637 65.72 10,672 65.27
======== ======= ======== ======= ======== ======= ======== =======
Unquoted Non Qualifying
Holdings
Hydroelectric Power
Green Highland Allt
Choire A Bhalachain
(255) Ltd 3 0.02 3 0.02 3 0.02 3 0.02
Green Highland Allt
Phocachain (1015) Ltd 3 0.02 3 0.02 3 0.02 3 0.02
Green Highland Allt
Ladaidh (1148) Ltd 30 0.16 30 0.16 30 0.19 30 0.18
Green Highland Allt
Luaidhe (228) Ltd 61 0.33 61 0.33 61 0.38 61 0.37
Kinlochteacius Hydro
Ltd 47 0.26 47 0.26 1,167 7.21 1,167 7.14
Gas Power
Green Peak Generation
Ltd - - - - 3 0.02 3 0.02
SME Funding:
Hydroelectric Power
Broadpoint 2 Ltd 800 4.36 800 4.37 800 4.94 800 4.89
Broadpoint 3 Ltd 1,005 5.47 1,005 5.49 1,005 6.21 1,005 6.15
Other
Broadpoint Ltd - - 5 0.03 1,136 7.02 1,265 7.74
Funding Path Ltd 1,000 5.45 1,010 5.52 1,000 6.18 1,000 6.12
Modern Power Generation
Ltd 2,160 11.77 2,194 11.98 - - - -
5,109 27.84 5,158 28.18 5,208 32.19 5,337 32.65
======== ======= ======== ======= ======== ======= ======== =======
* Assets held for sale
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 Cost Valuation Valuation Income recognised Equity Equity
first investment GBP GBP Method by TP11 Held Held
for the by TP11 by TPIM
year GBP'000 % managed
funds
%
02 April
2016 3,200,000 3,200,000 Cost 4 49.90 49.90
Summary of Information from Investee Company
Financial Statements:
None available
Distributed Generators Ltd is exploring opportunities
to construct and operate a Gas Power plant.
-------------------------------------------------------------------------------------- ---------
Green Highland Allt Garbh
Ltd
Date of Cost Valuation Valuation Income recognised Equity Equity
first investment GBP GBP Method by TP11 Held Held by
for the by TPIM managed
year GBP'000 TP11 funds
% %
01 April
2015 2,250,000 2,250,000 Cost 157 22.79 50.25
Summary of Information from Investee Company GBP'000
Financial Statements ending in 2016:
Turnover -
Earnings before interest, tax, amortisation
and depreciation (EBITDA) (7)
Profit before tax 339
Net assets before VCT loans 4,958
Net assets 3,471
Green Highland Allt Garbh Ltd is constructing a run-of-river
Hydroelectric Power plant near Glen Affric, Cannich.
The 1,500kW Allt Garbh scheme reached commercial close
and has begun construction and is scheduled to be
commissioned in June 2017. The company will earn Feed-in-Tariffs
and other revenues from the generation and export
of electricity.
----------------------------------------------------------------------------------------------------
Modern Power Generation
Ltd
Date of Cost Valuation Valuation Income recognised Equity Equity
first investment GBP GBP Method by TP11 Held Held by
for the by TPIM managed
year GBP'000 TP11 funds
% %
04 April Share of
2016 2,160,000 2,194,000 net assets 81 49.90 49.90
Summary of Information from Investee Company
Financial Statements
None available
Modern Power Generations Ltd is a VCT non-qualifying
investment which has invested in an LLP that provides
finance to small and medium sizes enterprises (SME's)
------------------------------------------------------------------------------------------------------
Green Peak Generation
Ltd
Date of Cost Valuation Valuation Income recognised Equity Equity
first investment GBP GBP Method by TP11 Held Held by
for the by TPIM managed
year GBP'000 TP11 funds
% %
02 April
2015 1,900,000 1,900,000 Cost 17 23.28 50.25
Summary of Information from Investee Company GBP'000
Financial Statements ending in 2016:
Turnover -
Earnings before interest, tax, amortisation
and depreciation (EBITDA) (5)
Profit before tax 9
Net assets before VCT loans 4,108
Net assets 2,878
Green Peak Generation Ltd reached financial close
during May 2017 on a 7.5 MW gas power plant in Cumbria,
which is expected to be commissioned during Q1 2018.
----------------------------------------------------------------------------------------------------
Green Highland Allt Ladaidh
(1148) Ltd
Date of Cost Valuation Valuation Income recognised Equity Equity
first investment GBP GBP Method by TP11 Held Held by
for the by TPIM managed
year GBP'000 TP11 funds
% %
19 March
2015 1,470,000 1,470,000 Cost 120 15.07 50.25
Summary of Information from Investee Company GBP'000
Financial Statements ending in 2016:
Turnover 34
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 11
Profit before tax (28)
Net assets before VCT loans 4,855
Net assets 3,355
Green Highland Allt Ladaidh (1148) Ltd has constructed
a run-of-river Hydroelectric Power plant near Loch
Garry, Invergarry in the Scottish Highlands. The 1,300kW
Allt Ladaidh scheme completed construction and was
commissioned in August 2016. The company earns Feed-in-Tariffs
and other revenues from the generation and export
of electricity.
----------------------------------------------------------------------------------------------------
Funding Path Ltd
Date of first Cost Valuation Valuation Income recognised Equity Equity
investment GBP GBP Method by TP11 Held Held by
for the by TPIM managed
year GBP'000 TP11 funds
% %
29 January Share of
2016 1,000,000 1,010,000 net assets 77 49.00 98.00
Summary of Information from Investee Company GBP'000
Financial Statements ending in 2016:
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 (SME's)
--------------------------------------------------------------------------------------------------
Broadpoint 3 Ltd
Date of first Cost Valuation Valuation Income recognised Equity Equity
investment GBP GBP Method by TP11 Held Held by
for the by TPIM managed
year GBP'000 TP11 funds
% %
08 January Share of
2016 1,005,000 1,005,000 net assets - 0.00 0.00
Summary of Information from Investee Company GBP'000
Financial Statements ending in 2016:
Turnover -
Earnings before interest, tax, amortisation
and depreciation (EBITDA) (8)
Profit before tax (8)
Net assets before VCT loans 3,007
Net assets (8)
Broadpoint 3 Ltd owns equity stakes in Hydroelectric
Power companies, DDC companies and one Landfill Gas
company.
--------------------------------------------------------------------------------------------------
Green Highland Allt Luaidhe
(228) Ltd
Date of first Cost Valuation Valuation Income recognised Equity Equity
investment GBP GBP Method by TP11 Held Held by
for the by TPIM managed
year GBP'000 TP11 funds
% %
18 March Discounted
2015 855,000 877,000 Cash Flow 74 15.08 100.00
Summary of Information from Investee Company GBP'000
Financial Statements ending in 2016:
Turnover 218
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 151
Profit before tax (179)
Net assets before VCT loans 2,546
Net assets 1,691
Green Highland Allt Luaidhe (228) Ltd has constructed
a run-of-river Hydroelectric Power plant located in
Knockie, Whitebridge near Inverness in the Scottish
Highlands. The 500kw Allt Luaidhe scheme was commissioned
in December 2015. The company earns Feed-in-Tariffs
from the generation and export of electricity.
-----------------------------------------------------------------------------------------------
Green Highland Shenval
Ltd
Date of Cost Valuation Valuation Income recognised Equity Equity
first investment GBP GBP Method by TP11 Held Held by
for the by TPIM managed
year GBP'000 TP11 funds
% %
01 April
2015 860,000 860,000 Cost 5 22.09 50.25
Summary of Information from Investee Company GBP'000
Financial Statements ending in 2016:
Turnover -
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 334
Profit before tax 339
Net assets before VCT loans 1,969
Net assets 1,369
Green Highland Shenval Ltd has acquired a subsidiary
Kinlochteacius Ltd which has constructed a 300kW hydro
site near the Morvern Peninsula. The scheme was commissioned
in September 2016. The company will earn Feed-in-Tariffs
and other revenues from the generation and export
of electricity.
--------------------------------------------------------------------------------------------------
Green Highland Allt Phocachain
(1015) Ltd
Date of first Cost Valuation Valuation Income recognised Equity Equity
investment GBP GBP Method by TP11 Held Held by
for the by TPIM managed
year GBP'000 TP11 funds
% %
13 November Discounted
2014 858,000 849,000 Cash Flow 76 7.97 100.00
Summary of Information from Investee Company GBP'000
Financial Statements ending in 2016:
Turnover 383
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 259
Profit before tax (295)
Net assets before VCT loans 4,722
Net assets 2,832
Green Highland Allt Phocachain (1015) Ltd has constructed
two separate 500kw run-of-river Hydroelectric Power
plants located in Glen Moriston, Scottish Highlands.
Both schemes were commissioned on schedule in December
2015. The company will earn Feed-in-Tariffs from the
generation and export of electricity.
-----------------------------------------------------------------------------------------------
-- 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
16 May 2017
Report of the Directors
The Directors present their Report and the audited Financial
Statements for the year ended 28 February 2017.
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 of Sir Andrew Leggatt (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 Beard Construction, Procom-IM
Limited and other companies.
Tim Clarke is a graduate of Oxford University in PPE. He joined
Panmure Gordon & Co plc in 1979 as an equities analyst,
subsequently becoming a Partner and Head of Research. He moved to
Bass plc in 1990 and worked in a number of roles in the hotel, pub
and restaurant divisions and became Chief Executive in 2000.
Following its demerger he was Chief Executive of Mitchells &
Butlers plc until 2009. He is currently the Senior Independent
Non-Executive Director of Associated British Foods plc, and a
Non-Executive Director of Hall & Woodhouse Ltd and Timothy
Taylor & Co Ltd. He is a Trustee Director and 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 (September 2014) and believes that all the
Directors continue to be effective and to demonstrate commitment to
their roles, the Board and the Company. The Directors are discussed
further within the Corporate Governance report on page 27 which
demonstrates the Boards compliance with the UK Corporate Governance
code.
Activities and Status
The Company is a Venture Capital Trust and its main activity is
investing.
The Company has been provisionally approved as a VCT by
HMRC.
The Company is registered in England as a Public Limited Company
(Registration number 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 on page 63
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.
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 2017 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 is GBP600,000 divided into 60,000,000
shares of 1p each, of which 20,349,869 shares were in issue at 28
February 2017. 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 2017. 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 2017. 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 Ordinary Shares of that class and A Shares of that
class; and
c) the right to receive notice of and to attend and speak and
vote in person or on a poll by proxy at any general meeting of the
Company. On a show of hands every member present or represented and
voting has one vote and on a poll every member present or
represented and voting has one vote for every share of which that
member is the holder; the validly executed appointment of a proxy
must be received not less than 48 hours before the time of the
holding of the relevant meeting or adjourned meeting or, in the
case of a poll taken otherwise than at or on the same day as the
relevant meeting or adjourned meeting, be received after the poll
has been demanded and not less than 24 hours before the time
appointed for the taking of the poll.
These rights can be suspended. If a member, or any other person
appearing to be interested in shares held by that member, has
failed to comply within the time limits specified in the Company's
articles of association with a notice pursuant to S793 of the
Companies Act 2006 (notice by a Company requiring information about
interests in its shares), the Company can until the default ceases
suspend the right to attend and speak and vote at a general meeting
and if the shares represent at least 0.25% of their class the
Company can also withhold any dividend or other money payable in
respect of the shares (without any obligation to pay interest) and
refuse to accept certain transfers of the relevant shares.
Shareholders, either alone or with other shareholders, have
other rights as set out in the Company's articles of association
and in company law. (Principally, the Companies Act 2006).
A member may choose whether his or her shares are evidenced by
share certificates (certificated shares) or held in electronic
(uncertificated) form in CREST (the UK electronic settlement
system). Any member may transfer all or any of his or her shares,
subject in the case of certificated shares to the rules set out in
the Company's articles of association or in the case of
uncertificated shares to the regulations governing the operation of
CREST (which allow the Directors to refuse to register a transfer
as therein set out); the transferor remains the holder of the
shares until the name of the transferee is entered in the register
of members. The Directors may refuse to register a share transfer
if it is in respect of a certificated share which is not fully paid
up or on which the Company has a lien provided that, where the
share transfer is in respect of any share admitted to the Official
List maintained by the UK Listing Authority, any such discretion
may not be exercised so as to prevent dealings taking place on an
open and proper basis, or if in the opinion of the Directors (and
with the concurrence of the UK Listing Authority) exceptional
circumstances so warrant, provided that the exercise of such power
will not disturb the market in those
shares. Whilst there are no squeeze-out and sell out rules
relating to the shares in the Company's articles of association,
shareholders are subject to the compulsory acquisition provisions
in S974 to S991 of the Companies Act 2006.
Amendment of Articles of Association
The Company's articles of association may be amended by the
members of the Company by special resolution (requiring a majority
of at least 75% of the persons voting on the relevant
resolution).
Appointment and Replacement of Directors
A person may be appointed as a Director of the Company by the
shareholders in general meeting by ordinary resolution (requiring a
simple majority of the persons voting on the relevant resolution)
or by the Directors. No person, other than a Director retiring by
rotation or otherwise, shall be appointed or re-appointed a
Director at any general meeting unless he 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 offers itself for reappointment as
auditor. In accordance with S489(4) of the Companies Act 2006 a
resolution to reappoint Grant Thornton UK LLP as auditor 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
16 May 2017
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;
-- 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
16 May 2017
Corporate Governance
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 2015) by reference
to the Association of Investment Companies Corporate Governance
Guide for Investment Companies (AIC Guide). The AIC Code 2015, as
explained by the AIC Guide, addresses all the principles set out in
the UK Corporate Governance Code (September 2014), 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 2015, by reference to the AIC Guide, which incorporates the UK
Corporate Governance Code (September 2014), will provide improved
reporting to shareholders.
The Company is committed to maintaining high standards in
corporate governance and has complied with the recommendations of
the AIC Code 2015 and the relevant provisions of the UK Corporate
Governance Code (September 2014), 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 (September 2014) 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 Grant Thornton UK LLP, the
Company's auditor.
The audit committee safeguards the objectivity and independence
of the auditor by reviewing the nature and extent of non-audit
services supplied by the external auditor to the Company. The audit
committee has reviewed the non- audit service provided by the
external auditor, being the corporation tax return for the year
ended 29 February 2016, and does not believe it is sufficient to
influence their independence or objectivity due to the fee being an
immaterial expense.
When considering whether to recommend the reappointment of the
external auditor the audit committee takes into account their
current fee tender compared to the external audit fees paid by
other similar companies. The audit committee will then recommend to
the Board the appointment of an external auditor which is ratified
at the Annual General Meeting.
The Auditing Practices Board requires the audit partner to
rotate every five years. The audit partner has completed three
years. No audit tender has been undertaken since the Company was
incorporated.
The effectiveness of the external audit is assessed as part of
the Board evaluation conducted annually and by the quality and
content of the audit plan provided to the audit committee by the
external auditor and the discussions then held on topics raised.
The audit committee will challenge the external auditor at the
audit committee meeting if appropriate.
The Audit Committee's terms of reference include the following
roles and responsibilities:
-- reviewing and making recommendations to the Board in relation
to the Company's published Financial Statements and other formal
announcements or regulatory returns relating to the Company's
financial performance, reviewing significant financial reporting
judgements contained in them;
-- reviewing and making recommendations to the Board in relation
to the Company's internal control (including internal financial
control) and risk management systems;
-- periodically considering the need for an internal audit function;
-- making recommendations to the Board in relation to the
appointment, re-appointment and removal of the external auditor and
approving the remuneration and terms of engagement of the external
auditor;
-- reviewing and monitoring the external auditor's independence
and objectivity and the effectiveness of the audit process, taking
into consideration relevant UK professional regulatory
requirements;
-- monitoring the extent to which the external auditor is
engaged to supply non-audit services; and
-- ensuring that the Investment Manager has arrangements in
place for the investigation and follow-up of any concerns raised
confidentially by staff in relation to propriety of financial
reporting or other matters.
The committee reviews its terms of reference and effectiveness
annually and recommends to the Board any changes required as a
result of the review. The terms of reference are available on
request from the Company Secretary.
The Board considers that the members of the committee
collectively have the skills and experience required to discharge
their duties effectively, and that the Chairman of the committee
meets the requirements of the UK Corporate Governance Code
(September 2014) 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 2017, the audit
committee discharged its responsibilities by:
-- reviewing and approving the external auditor's terms of
engagement and remuneration and independence;
-- reviewing the external auditor's plan for the audit of the Financial Statements, including identification of key risks and confirmation of auditor independence;
-- reviewing TPIM's statement of internal controls operated in
relation to the Company's business and assessing those controls in
minimising the impact of key risks;
-- reviewing periodic reports on the effectiveness of TPIM's compliance procedures;
-- reviewing the appropriateness of the Company's accounting policies;
-- reviewing the Company's half-yearly results and draft annual
Financial Statements prior to Board approval;
-- reviewing the external auditor's audit plan document to the
audit committee on the annual Financial Statements; and
-- reviewing the Company's going concern status.
The audit committee is responsible for considering and reporting
on any significant issues that arise in relation to the Financial
Statements.
The key areas of risk that have been identified and considered
by the audit committee in relation to the business activities and
the Financial Statements of the Company are as follows:
-- valuation and existence of unquoted investments; 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 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 2017 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 VCT is
subject to a full annual audit. The auditors are the same auditors
as other VCTs managed by the Investment Manager. The Investment
Manager's procedures are subject to internal compliance checks.
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 (September 2014) provisions
throughout the accounting period. With the exception of the limited
items outlined below, the Directors consider that the Company has
complied throughout the period under review with the provisions set
out in the UK Corporate Governance Code (September 2014).
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
16 May 2017
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 2017.
This report also meets the Financial Conduct Authority's Listing
Rules and describes how the Board has applied the principles
relating to Directors' remuneration set out in UK Corporate
Governance Code (issued September 2014). The reporting requirements
require two sections to be included, a Policy Report and an Annual
Remuneration Report which are presented below.
Directors' Remuneration Policy Report
This statement of the Directors' Remuneration Policy took effect
following approval by shareholders at the Annual General Meeting on
24 July 2014. The Board currently comprises three Directors, all of
whom are Non-Executive. The Board does not have a separate
remuneration committee, as the Company has no employees or
executive directors. The Board has not retained external advisers
in relation to remuneration matters but has access to information
about Directors' fees paid by other companies of a similar size and
type. No views which are relevant to the formulation of the
Directors' remuneration policy have been expressed to the Company
by shareholders, whether at a general meeting or otherwise.
The Board's policy is that the remuneration of Non-Executive
Directors should reflect the experience of the Board as a whole, be
fair and be comparable with that of other relevant Venture Capital
Trusts that are similar in size and have similar investment
objectives and structures. Furthermore, the level of remuneration
should be sufficient to attract and retain the Directors needed to
oversee the Company properly and to reflect the specific
circumstances of the Company, the duties and responsibilities of
the Directors and the value and amount of time committed to the
Company's affairs. The articles of association provide that the
Directors shall be paid in aggregate a sum not exceeding GBP100,000
per annum. None of the Directors is eligible for bonuses, pension
benefits, share options, long-term incentive schemes or other
benefits in respect of their services as Non-Executive Directors of
the Company.
The articles of association provide that Directors shall retire
and be subject to re-election at the first Annual General Meeting
after their appointment and that any Director who has not been
re-elected for three years shall retire and be subject to
re-election at the Annual General Meeting. Also any Director not
considered independent shall retire each year and offer himself for
re-election at the Annual General Meeting. The Directors' service
contracts provide for an appointment of 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.
Policy
Unexpired Annual rate on payment
Date term of of Directors' for loss
of Contract contract fees 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 has not changed during
the last three years. Approval to renew the policy will be sought
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 2017 and the prior year are shown below:
Emoluments Emoluments
for the for the
year ended year ended
28 February 29 February
2017 2016
GBP GBP
Jane Owen,
Chairman 17,269 15,000
Chad Murrin 14,769 12,500
Tim Clarke 14,769 12,500
46,807 40,000
Employers'
NI contributions 101 162
Total Emoluments 46,908 40,162
-------------------- ------------- -------------
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 29 February
2017 2016
GBP'000 GBP'000
Total Dividends
paid 4,884 13,445
Total Directors'
emoluments 47 40
Directors' Share Interests (audited information)
At the 28 February 2017 Jane Owen held 25,375 Ordinary Shares,
24,624 A Ordinary Shares and 24,378 B Ordinary Shares (2016: 25,375
Ordinary Shares; 24,624 A Ordinary Shares) and Tim Clarke held
15,300 Ordinary Shares and 24,624 B Shares (2016: 15,300 Ordinary
Shares) and Chad Murrin held 24,874 A Ordinary Shares and 24,624 B
Ordinary Shares (2016: 24,874 A Ordinary Shares). At 28 February
2017 Jane Owen's husband held 25,375 Ordinary Shares (2016:
25,375). No other connected parties to the Directors held any
shares at 28 February 2017 (2016: 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.
Company Performance
There have been no trades in the Company's shares to date.
Therefore, no performance graph comparing the share price of the
Company over the year ended 28 February 2017 with the total return
from a notional investment in the FTSE All-Share index over the
same period has been included.
No market maker has been appointed and therefore no current bid
and offer price is available for the Company's shares. However the
Board's policy is to buy back shares from shareholders at a 10%
discount to net asset value. The Company will produce a graph of
its share performance once there is sufficient activity that the
graph would be meaningful to shareholders.
Statement of Voting at the Annual General Meeting
The 2016 Remuneration Report was presented to the Annual General
Meeting in July 2016 and received shareholder approval following a
vote 100% in favour and none abstained.
The 2014 Remuneration Policy was presented to the Annual General
Meeting in July 2014 and received shareholder approval following a
vote 100% 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 Director's increased by GBP2,500 for each
Director when the B Share Offer became effective on 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
16 May 2017
Independent auditor's report to the members of Triple Point VCT
2011 plc
Our opinion on the financial statements is unmodified
In our opinion the financial statements:
* give a true and fair view of the state of the
Company's affairs as at 28 February 2017 and of its
profit for the year then ended;
* have been properly prepared in accordance with
International Financial Reporting Standards (IFRSs)
as adopted by the European Union; and
* have been prepared in accordance with the
requirements of the Companies Act 2006.
============================================================
Who we are reporting to
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
What we have audited
Triple Point VCT 2011 plc's financial statements for the year
ended 28 February 2017 comprise the Statement of Comprehensive
Income, the Balance Sheet, the Statement of Changes in
Shareholders' Equity, the Statement of Cash Flows and the related
notes.
The financial reporting framework that has been applied in their
preparation is applicable law and IFRSs as adopted by the European
Union.
Overview of our audit approach
* Overall materiality: GBP195,000, which represents
approximately 1% of the Company's net assets; and
* Key audit risks were identified as valuation of
unquoted investments and completeness of investment
income.
===========================================================
Our assessment of risk
In arriving at our opinions set out in this report, we highlight
the following risks that, in our judgement, had the greatest effect
on our audit:
Audit risk How we responded to the
risk
------------------------------------- --------------------------------------------------------------
Valuation of unquoted investments
The Company's objective Our audit work included,
is to build a portfolio but was not restricted
of unquoted companies which to:
are cash generative and, * assessing whether the Company's accounting policy for
therefore, capable of producing unquoted investments is in accordance with the
income and capital repayments requirements of IFRSs as adopted by the European
to the Company prior to Union and the Association of Investment Companies
their disposal by the Company. (AIC) Statement of Recommended Practice (SORP) and
Unquoted investments amount, testing whether the Company has accounted for
by value, to 85% of the unquoted investments in accordance with the policy;
Company's total assets,
and are designated as being
at fair value through profit * ascertaining an understanding of how the valuations
or loss. Measurement of were performed by obtaining the underlying models
the value of an unquoted from the investment manager, discussing the review
investment includes significant process and consideration of whether they were made
assumptions and judgements. in accordance with published guidance, in particular
We therefore identified the International Private Equity and Venture Capital
the valuation of unquoted (IPEVC) Valuation Guidelines;
investments as a significant
risk requiring special
audit consideration. * reviewing and challenging the basis and
reasonableness of the assumptions made by the
investment manager in conjunction with available
supporting information, such as the corroboration of
financial inputs to the relevant investee company
management accounts or offer letters from the
potential buyer as applicable; and
* engaging our valuation specialists to test a sample
of investments, their inputs and assumptions.
The Company's accounting
policies on non-current
asset investments and
assets held for sale are
included in note 2, and
its disclosures about
unquoted investments held
at the year end are included
in note 10. The Audit
Committee also identified
and considered the valuation
and existence of unquoted
investments as a key area
of risk in the Corporate
Governance Statement on
page 29.
------------------------------------- --------------------------------------------------------------
Completeness of investment
income Our audit work included,
Revenue consists of interest but was not restricted
earned on loans and cash to:
balances, and dividend * assessing whether the Company's accounting policy for
income received from investee revenue recognition is in accordance with the IFRSs
companies. Under International as adopted by the European Union and the AIC SORP and
Standard on Auditing (ISA) testing its correct application during the year;
240 'The auditor's responsibilities
relating to fraud in an
audit of financial statements', * performing substantive audit testing on interest
there is a presumed risk income recognised during the year by comparing the
of fraud in revenue recognition. actual to expected income, calculated using the
Revenue is also a key factor interest rates in the loan instruments;
in demonstrating the performance
of the Company's portfolio
and considered a significant * testing recorded dividend income to the Company' bank
risk requiring special statements, agreeing the amounts to the minutes of
audit consideration. the meetings of the relevant investee companies and
corroborating the amounts to the respective
underlying investee companies' accounts; and
* for accrued interest income, reviewing management's
assessment of recoverability by checking to post year
end receipts and also discussion with management.
The Company's accounting
policy on income, including
its recognition, is included
in note 2, and its disclosures
about investment income
recognised in the year
are included in note 4.
------------------------------------- --------------------------------------------------------------
Our application of materiality and an overview of the scope of
our audit
Materiality
We define materiality as the magnitude of misstatement in the
financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or
influenced. We use materiality in determining the nature, timing
and extent of our audit work and in evaluating the results of that
work.
We determined materiality for the audit of the financial
statements as a whole to be GBP195,000, which is approximately 1%
of the Company's net assets. This benchmark is considered the most
appropriate because net assets, which are primarily composed of the
Company's investment portfolio, is considered to be the key driver
of the Company's total return performance.
Materiality for the current year is higher than the level that
we determined for the year ended 29 February 2016 to reflect the
increase in the Company's net assets.
We use a different level of materiality, performance
materiality, to drive the extent of our testing and this was set at
75% of financial statement materiality. We also determine a lower
level of specific materiality for certain areas such as the
statement of total comprehensive income, directors' remuneration
and related party transactions.
We determined the threshold at which we will communicate
misstatements to the audit committee to be GBP9,000. In addition,
we will communicate misstatements below that threshold that, in our
view, warrant reporting on qualitative grounds.
Overview of the scope of our audit
A description of the generic scope of an audit of financial
statements is provided on the Financial Reporting Council's website
at www.frc.org.uk/auditscopeukprivate.
We conducted our audit in accordance with International
Standards on Auditing (ISAs) (UK and Ireland). Our responsibilities
under those standards are further described in the
'Responsibilities for the financial statements and the audit'
section of our report. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
We are independent of the Company in accordance with the
Auditing Practices Board's Ethical Standards for Auditors, and we
have fulfilled our other ethical responsibilities in accordance
with those Ethical Standards.
Our audit approach was based on a thorough understanding of the
Company's business and is risk based. The day-to-day management of
the Company's investment portfolio and the maintenance of the
Company's accounting records is outsourced to third-party service
providers. Accordingly, our audit work included:
-- obtaining an understanding of and evaluating design and
implementation of controls in place at the relevant third party
service providers around key audit risks areas; and
-- undertaking substantive testing on significant transactions,
balances and disclosures, the extent of which was based on various
factors such as our overall assessment of risk of material
misstatement and the effectiveness of design and implementation of
controls around such areas.
Other reporting required by regulations
Our opinions on other matters prescribed by the
Companies Act 2006 are unmodified
In our opinion, the part of the Directors' Remuneration
Report to be audited has been properly prepared
in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in
the course of the audit:
* the information given in the Strategic Report and the
Report of the Directors for the financial year for
which the financial statements are prepared is
consistent with the financial statements;
* the Strategic Report and the Report of the Directors
have been prepared in accordance with applicable
legal requirements;
* the information about internal control and risk
management systems in relation to financial reporting
processes and about share capital structures, given
in compliance with rules 7.2.5 and 7.2.6 in the
Disclosure Rules and Transparency Rules sourcebook
made by the Financial Conduct Authority (the FCA
Rules), is consistent with the financial statements
and has been prepared in accordance with applicable
legal requirements; and
* information about the Company's corporate governance
code and practices and about its administrative,
management and supervisory bodies and their
committees complies with rules 7.2.2, 7.2.3 and 7.2.7
of the FCA Rules.
===============================================================
Matter on which we are required to report under the Companies
Act 2006
In the light of the knowledge and understanding of the Company
and its environment obtained in the course of the audit, we have
not identified material misstatements in the Strategic Report or
the Report of the Directors.
Matters
Under the Companies Act 2006 we are required to report to you
if, in our opinion:
-- adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the financial statements and the part of the Directors'
Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Under the Listing Rules, we are required to review:
-- the directors' statements in relation to going concern and
longer-term viability set out on pages 30 and 11 respectively;
and
-- the part of the Corporate Governance Statement relating to
the Company's compliance with the provisions of the UK Corporate
Governance Code specified for our review.
Under the ISAs (UK and Ireland), we are required to report to
you if, in our opinion, information in the annual report is:
-- materially inconsistent with the information in the audited financial statements; or
-- apparently materially incorrect based on, or materially
inconsistent with, our knowledge of the Company acquired in the
course of performing our audit; or
-- otherwise misleading.
In particular, we are required to report to you if:
-- we have identified any inconsistencies between our knowledge
acquired during the audit and the directors' statement that they
consider the annual report is fair, balanced and understandable;
or
-- the annual report does not appropriately disclose those
matters that were communicated to the audit committee which we
consider should have been disclosed.
We have nothing to report in respect of any of the above
matters.
We also confirm that we do not have anything material to add or
to draw attention to in relation to:
-- the directors' confirmation in the annual report that they
have carried 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 disclosures in the annual report that describe those
risks and explain how they are being managed or mitigated;
-- the directors' statement in the financial statements about
whether they have considered it appropriate to adopt the going
concern basis of accounting in preparing them, and their
identification of any material uncertainties to the Company's
ability to continue to do so over a period of at least twelve
months from the date of approval of the financial statements;
and
-- the directors' explanation in the annual report as to how
they have assessed the prospects of the Company, over what period
they have done so and why they consider that period to be
appropriate, and their statement as to whether 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, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
Responsibilities for the financial statements and the audit
What the directors are responsible for:
As explained more fully in the Directors' Responsibilities
Statement set out on page 26, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view.
What we are responsible for:
Our responsibility is to audit and express an opinion on the
financial statements in accordance with applicable law and ISAs (UK
and Ireland). Those standards require us to comply with the
Auditing Practices Board's Ethical Standards for Auditors.
Nicholas Page
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
16 May 2017
Unaudited Non-Statutory Analysis of - The Ordinary Share
Fund
Statement of
Comprehensive Year ended 28 February Year ended 29
Income 2017 February 2016
---------------------------- -----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 685 - 685 1,943 - 1,943
Realised (loss)
on investments - (429) (429) - (1,589) (1,589)
Unrealised (loss)/gain
on investments - (74) (74) - 228 228
Investment return 685 (503) 182 1,943 (1,361) 582
Investment management
fees (80) (92) (172) (267) (171) (438)
Other expenses (66) - (66) (96) (7) (103)
Profit/(loss)
before taxation 539 (595) (56) 1,580 (1,539) 41
Taxation 11 57 68 16 11 27
Profit/(loss)
after taxation 550 (538) 12 1,596 (1,528) 68
Profit and total
comprehensive
income/(loss)
for the year 550 (538) 12 1,596 (1,528) 68
Basic and diluted
earnings/(loss)
per share 2.71p (2.65p) 0.06p 7.84p (7.51p) 0.33p
-------- -------- -------- -------- -------- ---------
Balance Sheet 28 February 2017 29 February 2016
GBP'000 GBP'000
Non-current
assets
Financial assets
at fair value
through profit
or loss 5 5,750
-------- ---------
Current assets
Assets held
for sale 191 793
Receivables 674 681
Corporation
Tax 68 -
Cash and cash
equivalents 1,448 30
2,381 1,504
-------- ---------
Current liabilities
Payables (82) (78)
-------- ---------
Net assets 2,304 7,176
-------- ---------
Equity attributable
to equity holders 2,304 7,176
-------- ---------
Net asset value
per share 11.32p 35.26p
-------- ---------
Statement of
Changes in Shareholders'
Equity
29 February
28 February 2017 2016
GBP'000 GBP'000
Opening shareholders'
funds 7,176 20,553
Profit/(loss)
for the year 12 68
Dividend paid (4,884) (13,445)
Closing shareholders'
funds 2,304 7,176
-------- ---------
Investment Portfolio
28 February 2017 29 February 2016
------------------------------------ ------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted Qualifying
Holdings 300 17.16 191 11.62 5,234 81.68 5,269 80.18
Unquoted Non Qualifying
Holdings - - 5 0.30 1,145 17.88 1,274 19.40
300 17.16 196 11.92 6,379 99.56 6,543 99.58
Cash and cash equivalents 1,448 82.84 1,448 88.08 30 0.44 30 0.42
1,748 100.00 1,644 100.00 6,409 100.00 6,573 100.00
======== ======= ======== ======= ======== ======= ======== =======
Unquoted Qualifying
Holdings
Cinema Digitisation
DLN Digital Ltd 300 17.16 191 11.62 300 4.68 141 2.15
Hydro Project Management
Highland Hydro Services
Ltd - - - - 813 12.69 1,099 16.72
Landfill Gas
Aeris Power Ltd - - - - 575 8.97 464 7.06
Craigahulliar Energy
Ltd - - - - 310 4.84 329 5.01
Hydroelectric Power
Green Highland Allt
Choire A Bhalachain
(255) Ltd - - - - 30 0.47 30 0.46
Green Highland Allt
Phocachain (1015)
Ltd - - - - 30 0.47 30 0.46
Green Highland Shenval
Ltd - - - - 1,276 19.91 1,276 19.41
Gas Power
Green Peak Generation
Ltd - - - - 1,900 29.65 1,900 28.91
300 17.16 191 11.62 5,234 81.68 5,269 80.18
======== ======= ======== ======= ======== ======= ======== =======
28 February 2017 29 February 2016
------------------------------------ ------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted Non Qualifying
Holdings
Hydroelectric Power
Green Highland Allt
Choire A Bhalachain
(255) Ltd - - - - 3 0.05 3 0.05
Green Highland Allt
Phocachain (1015)
Ltd - - - - 3 0.05 3 0.05
Gas Power
Green Peak Generation
Ltd - - - - 3 0.05 3 0.05
SME funding:
Other
Broadpoint Ltd - - 5 0.30 1,136 17.73 1,265 19.25
- 0.00 5 0.30 1,145 17.88 1,274 19.40
======== ======= ======== ======= ======== ======= ======== =======
Unaudited Non-Statutory Analysis of - The A Share Fund
Statement of
Comprehensive Year ended 28 February Year ended 29
Income 2017 February 2016
---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 663 - 663 322 - 322
Realised gain
on investments - - - - 1 1
Unrealised gain
on investments - 30 30 - - -
Investment return 663 30 693 322 1 323
Investment management
fees (163) (47) (210) (65) (22) (87)
Other expenses (52) - (52) (87) (12) (99)
Profit/(loss)
before taxation 448 (17) 431 170 (33) 137
Taxation (90) 10 (80) (34) 7 (27)
Profit/(loss)
after taxation 358 (7) 351 136 (26) 110
Profit and total
comprehensive
income/(loss)
for the year 358 (7) 351 136 (26) 110
Basic and diluted
earnings/(loss)
per share 3.61p (0.08p) 3.53p 1.49p (0.29p) 1.20p
-------- -------- -------- -------- -------- --------
Balance Sheet 28 February 2017 29 February 2016
GBP'000 GBP'000
Non-current assets
Financial assets
at fair value
through profit
or loss 9,802 9,466
-------- --------
Current assets
Receivables 678 276
Cash and cash
equivalents 29 307
707 583
-------- --------
Current liabilities
Payables (73) (44)
Corporation Tax (80) -
-------- --------
Net assets 10,356 10,005
-------- --------
Equity attributable
to equity holders 10,356 10,005
-------- --------
Net asset value
per share 104.07p 100.54p
-------- --------
Statement of
Changes in Shareholders'
Equity
29 February
28 February 2017 2016
GBP'000 GBP'000
Opening shareholders'
funds 10,005 -
Issue of new
shares - 9,895
Profit for the
year 351 110
Closing shareholders'
funds 10,356 10,005
-------- --------
Investment Portfolio 28 February 2017 29 February 2016
------------------------------------ ------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted Qualifying
Holdings 6,323 64.51 6,335 64.44 5,403 55.28 5,403 55.28
Unquoted Non Qualifying
Holdings 3,449 35.18 3,467 35.27 4,063 41.57 4,063 41.57
9,772 99.69 9,802 99.71 9,466 96.85 9,466 96.85
Cash and cash equivalents 29 0.31 29 0.29 307 3.15 307 3.15
9,801 100.00 9,831 100.00 9,773 100.00 9,773 100.00
======== ======= ======== ======= ======== ======= ======== =======
Unquoted Qualifying
Holdings
Hydroelectric Power
Green Highland Allt
Choire A Bhalachain
Ltd 30 0.31 29 0.29 - - - -
Green Highland Allt
Garbh Ltd 2,250 22.96 2,250 22.89 2,250 23.02 2,250 23.02
Green Highland Allt
Ladaidh (1148) Ltd 1,470 15.00 1,470 14.95 1,470 15.04 1,470 15.04
Green Highland Allt
Luaidhe (228) Ltd 855 8.72 877 8.92 855 8.75 855 8.75
Green Highland Allt
Phocachain (1015)
Ltd 858 8.75 849 8.64 828 8.47 828 8.47
Green Highland Shenval
Ltd 860 8.77 860 8.75 - - - -
6,323 64.51 6,335 64.44 5,403 55.28 5,403 55.28
======== ======= ======== ======= ======== ======= ======== =======
28 February 2017 29 February 2016
------------------------------------ ------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted Non Qualifying
Holdings
Hydroelectric Power
Green Highland Allt
Choire A Bhalachain
Ltd 3 0.03 3 0.03 - - - -
Green Highland Allt
Ladaidh (1148) Ltd 30 0.31 30 0.31 30 0.31 30 0.31
Green Highland Allt
Luaidhe (228) Ltd 61 0.62 61 0.62 61 0.62 61 0.62
Green Highland Allt
Phocachain (1015)
Ltd 3 0.03 3 0.03 - - - -
Kinlochteacius Hydro
Ltd 47 0.48 47 0.48 1,167 11.94 1,167 11.94
SME Funding: - -
Hydroelectric Power - -
Broadpoint 2 Ltd 800 8.16 800 8.14 800 8.19 800 8.19
Broadpoint 3 Ltd 1,005 10.25 1,005 10.22 1,005 10.28 1,005 10.28
Other - -
Funding Path Ltd 1,000 10.20 1,010 10.27 1,000 10.23 1,000 10.23
Modern Power Generation
Ltd 500 5.10 508 5.17 - - - -
3,449 35.18 3,467 35.27 4,063 41.57 4,063 41.57
======== ======= ======== ======= ======== ======= ======== =======
Unaudited Non-Statutory Analysis of - The B Share Fund
Statement of
Comprehensive Year ended 28 February Year ended 29
Income 2017 February 2016
---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 89 - 89 - - -
Unrealised gain
on investments - 26 26 - - -
Investment return 89 26 115 - - -
Investment management
fees (87) (25) (112) - - -
Other expenses (30) - (30) - - -
(Loss)/gain
before taxation (28) 1 (27) - - -
Taxation 6 5 11 - - -
(Loss)/gain
after taxation (22) 6 (16) - - -
Loss and total
comprehensive
(loss)/income
for the year (22) 6 (16) - - -
Basic and diluted
(loss)/earnings
per share (0.37p) 0.10p (0.27p) - - -
-------- -------- -------- -------- -------- --------
Balance Sheet 28 February 2017 29 February 2016
GBP'000 GBP'000
Non-current
assets
Financial assets
at fair value
through profit
or loss 6,786 -
-------- --------
Current assets
Assets held
for sale - -
Receivables 23 -
Corporation
Tax 11
Cash and cash
equivalents 48 -
82 -
-------- --------
Current liabilities
Payables (60) -
-------- --------
Net assets 6,808 -
-------- --------
Equity attributable
to equity holders 6,808 -
-------- --------
Net asset value
per share 99.76p -
-------- --------
Statement of
Changes in Shareholders'
Equity
29 February
28 February 2017 2016
GBP'000 GBP'000
Opening shareholders'
funds - -
Issue of new
shares 6,824 -
Loss for the
year (16) -
Closing shareholders'
funds 6,808 -
-------- --------
Investment Portfolio
28 February 2017 29 February 2016
------------------------------------ --------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted Qualifying
Holdings 5,100 74.91 5,100 74.62 - - - -
Unquoted Non Qualifying
Holdings 1,660 24.38 1,686 24.67 - - - -
6,760 99.29 6,786 99.29 - - - -
Cash and cash equivalents 48 0.71 48 0.71 - - - -
6,808 100.00 6,834 100.00 - - - -
======== ======= ======== ======= ========== ============
Unquoted Qualifying
Holdings
Gas Power
Distributed Generators
Ltd 3,200 47.00 3,200 46.82 - - - -
Green Peak Generation
Ltd 1,900 27.91 1,900 27.80 - - - -
5,100 74.91 5,100 74.62 - - - -
======== ======= ======== ======= ========== ============
28 February 2017 29 February 2016
------------------------------------ --------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted Non Qualifying
Holdings
SME Funding
Other
Modern Power Generation
Ltd 1,660 24.38 1,686 24.67 - - - -
1,660 24.38 1,686 24.67 - - - -
======== ======= ======== ======= ========== ============
Statement of Comprehensive Income
Year ended Year ended
28 February 29 February
2017 2016
---------------------------- ----------------------------
Note Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 4 1,437 - 1,437 2,265 - 2,265
Loss arising on
the realisation
of investments
during the year - (429) (429) - (1,588) (1,588)
(Loss)/gain arising
on the revaluation
of investments
at the year end - (18) (18) - 228 228
Investment return 1,437 (447) 990 2,265 (1,360) 905
-------- -------- -------- -------- -------- --------
Investment management
fees 5 330 164 494 332 193 525
Financial and regulatory
costs 28 - 28 27 - 27
General administration 4 - 4 12 - 12
Legal and professional
fees 6 69 - 69 46 19 65
Directors' remuneration 7 47 - 47 40 - 40
Interest payable - - - 58 - 58
Operating expenses 478 164 642 515 212 727
-------- -------- -------- -------- -------- --------
Profit/(loss) before
taxation 959 (611) 348 1,750 (1,572) 178
Taxation 8 (73) 72 (1) (18) 18 -
Profit/(loss) after
taxation 886 (539) 347 1,732 (1,554) 178
-------- -------- -------- -------- -------- --------
Profit and total
comprehensive income/(loss)
for the year 886 (539) 347 1,732 (1,554) 178
-------- -------- -------- -------- -------- --------
Basic & diluted
earnings per share 9 n/a n/a n/a n/a n/a n/a
-------- -------- -------- -------- -------- --------
The total column of this statement is the Statement of
Comprehensive Income of the Company prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union. The supplementary revenue return and capital
columns have been prepared in accordance with the Association of
Investment Companies Statement of Recommended Practice (AIC SORP
2014).
All revenue and capital items in the above statement derive from
continuing operations.
This Statement of Comprehensive Income includes all recognised
gains and losses.
The accompanying notes are an integral part of these
statements.
Balance Sheet
28 February 29 February
2017 2016
Note GBP'000 GBP'000
Non current assets
Financial assets
at fair value through
profit or loss 10 16,593 15,216
------------ ------------
Current assets
Assets held for sale 11 191 793
Receivables 12 1,375 957
Cash and cash equivalents 13 1,525 337
3,091 2,087
------------ ------------
Total assets 19,684 17,303
------------ ------------
Current liabilities
Payables and accrued
expenses 14 215 122
Current taxation
payable 1 -
216 122
------------ ------------
Net assets 19,468 17,181
============ ============
Equity attributable
to equity holders
Share capital 15 371 303
Share Premium 16,683 9,927
Share redemption
reserve 1 1
Special distributable
reserve 255 4,900
Capital reserve 1,443 1,982
Revenue reserve 715 68
Total equity 19,468 17,181
============ ============
Net asset value per
share (pence) 17 n/a n/a
The statements were approved by the Directors and authorised for
issue on 16 May 2017 and are signed on their behalf by:
Jane Owen
Chairman
16 May 2017
Company registration number 07324448.
The accompanying notes are an integral part of this
statement.
Statement of Changes in Shareholders' Equity
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
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)
Dividends 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 year - - - - (539) 886 347
---------- ---------- ------------- ---------------- ---------- ---------- ----------
Balance at 28
February 2017 371 16,683 1 255 1,443 715 19,468
========== ========== ============= ================ ========== ========== ==========
The Capital
Reserve consists
of:
Investment holding
losses (48)
Other realised gains 1,491
1,443
----------
Year ended 29
February 2016
Opening balance 203 - 1 16,630 3,536 183 20,553
---------- ---------- ------------- ---------------- ---------- ---------- ----------
Issue of share
capital 100 10,168 - - - - 10,268
Cost of issue
of shares - (241) - (132) - - (373)
Dividend Paid - - - (11,598) - (1,847) (13,445)
Transactions
with owners 100 9,927 - (11,730) - (1,847) (3,550)
---------- ---------- ------------- ---------------- ---------- ---------- ----------
(Loss)/profit
after taxation - - - - (1,554) 1,732 178
Total comprehensive
(loss)/profit
for the year - - - - (1,554) 1,732 178
---------- ---------- ------------- ---------------- ---------- ---------- ----------
Balance at 29
February 2016 303 9,927 1 4,900 1,982 68 17,181
========== ========== ============= ================ ========== ========== ==========
The Capital
Reserve consists
of:
Investment holding
gains 164
Other realised gains 1,818
1,982
----------
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.
Statement of Cash Flows
Year ended Year ended
29 February
28 February 2017 2016
GBP'000 GBP'000
Cash flows from operating
activities
Profit before taxation 348 178
Loss arising on the disposal of investments during the year 429 1,588
Loss/(gain) arising on the revaluation of investments at the year end 18 (228)
Cash generated by operations 795 1,538
(Increase) in receivables (424) (187)
Increase/(decrease)
in payables 93 (16)
Net cash flows from operating activities 464 1,335
Cash flows from investing activities
Purchase of financial assets at fair value through profit or loss (5,850) (17,636)
Sales of financial assets at fair value through profit or loss 4,634 20,171
Net cash flows from investing activities (1,216) 2,535
Cash flows from financing activities
Issue of shares 6,824 9,895
Dividends paid (4,884) (13,445)
Net cash flows from
financing activities 1,940 (3,550)
Net increase in cash and cash equivalents 1,188 320
Reconciliation of net cash flow to movements in cash and cash equivalents
Cash and cash equivalents at 1 March 2016 337 17
Net increase in cash and cash equivalents 1,188 320
Cash and cash equivalents at 28 February 2017 1,525 337
The accompanying notes are an integral part of these
statements.
Notes to the Financial Statements
1. Corporate Information
The Financial Statements of the Company for the year ended 28
February 2017 were authorised for issue in accordance with a
resolution of the Directors on 16 May 2017.
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 sterling, 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 2017 have been prepared in accordance with International
Financial Reporting Standards ("IFRS") adopted for use in the
European Union and complied 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 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.
-- 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. 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, amendments to standards and
interpretations are not yet effective for the year ended 28
February 2017, 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)
All of these changes will be applied by the Company from the
effective date but none of them are expected to have a significant
impact on the Company's Financial Statements.
Presentation of Statement of Comprehensive Income
In order better to reflect the activities of a Venture Capital
Trust, and in accordance with the guidance issued by the
Association of Investment Companies, supplementary information
which analyses the Statement of Comprehensive Income between items
of a revenue and capital nature has been presented alongside the
Income Statement.
Capital Management
Capital management is monitored and controlled using the
internal control procedures set out on page 30. 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.
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 2017 was GBP19.5
million (2016: GBP17.2 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.
-- 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.
Assets Held for Sale
Current assets classified as held for sale are presented
separately and measured at the value expected to be realised on
disposal which is equivalent to its fair value.
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
Ordinary Shares, 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 Company only has one class of business, being investment
activity. All revenues and assets are generated and held in the
UK.
4. Investment Income
Year ended Year ended
28 February 2017 29 February 2016
Ordinary Shares A Shares B Shares Total Ordinary Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Interest receivable on
bank balances - - - - 3 2 - 5
Loan stock interest 52 663 89 804 281 320 - 601
Dividend Income 633 - - 633 1,659 - - 1,659
685 663 89 1,437 1,943 322 - 2,265
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.
Ordinary Shares: The agreement provides for an investment
management fee of 2.25% per annum of net assets payable quarterly
in arrear for Ordinary Shares until 1 October 2016 and thereafter a
1% exit fee on all funds returned to shareholders.
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. The administration fee for the year ended 28
February 2017 includes a fee relating to the prior year that was
not charged, explaining why it is a higher value in the table
below.
Investment Management
Fees Year ended Year ended
28 February 2017 29 February 2016
Ordinary Shares A Shares B Shares Total Ordinary 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 90 189 100 379 320 76 - 396
Administration Fees 12 21 12 45 36 11 - 47
Exit fees 70 - - 70 82 - - 82
Total 172 210 112 494 438 87 - 525
6. Legal and Professional Fees
Legal and professional fees include remuneration paid to the
Company's auditor, Grant Thornton UK LLP as shown in the following
table:
Year ended Year ended
28 February 2017 29 February 2016
Ordinary A B Ordinary A B
Shares Shares Shares Total Shares Shares 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 5 8 4 17 12 15 - 27
* for taxation compliance services - - - - 2 2 - 4
5 8 4 17 14 17 - 31
7. Directors' Remuneration
Year ended Year ended
28 February 2017 29 February 2016
Ordinary Shares A Shares B Shares Total Ordinary Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Jane Owen 4 8 5 17 8 7 - 15
Chad Murrin 4 7 4 15 7 6 - 13
Tim Clarke 4 7 4 15 5 7 - 12
Total 12 22 13 47 20 20 - 40
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 Year ended
28 February 2017 29 February 2016
Ordinary Shares A Shares B Shares Total Ordinary Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Profit/(loss) on
ordinary activities
before tax (55) 431 (27) 348 41 137 - 178
Corporation tax @ 20% (11) 86 (5) 70 8 27 - 35
Effect of: - - - - -
Utilisation of tax
losses brought forward (38) - - (38) - - - -
Capital losses/(gains)
not taxable 100 (6) (6) 88 272 - - 272
Dividends received not
taxable (126) - - (126) (332) - - (332)
Disallowed expenditure 7 - - 7 - - - -
Unrelieved tax losses
arising in the year - - - - 25 - - 25
Tax charge / credit for
the year (68) 80 (11) 1 (27) 27 - -
Capital gains and losses are exempt from corporation tax due to
the Company's status as a Venture Capital Trust.
Disclosure by share class is unaudited
9. Earnings per Share
The earnings per Ordinary Share is 0.06p (2016: 0.33p) and is
based on a profit from ordinary activities after tax of GBP12,675
(2016: GBP67,915), and on the weighted average number of Ordinary
Shares in issue during the period of 20,349,869 (2016:
20,349,869).
The earnings per A Share is 3.53p (2016: 1.20p) and is based on
a profit from ordinary activities after tax of GBP350,664 (2016:
GBP109,838), and on the weighted average number of A Shares in
issue during the period of 9,951,133 (2016: 9,117,520).
The loss per B Share is 0.27p (2016: nil) and is based on a loss
from ordinary activities after tax of GBP16,246 (2016: GBPnil), and
on the weighted average number of B Shares in issue during the
period of 6,109,517 (2016: nil).
The table below shows the calculation of the weighted average
number of shares.
Ordinary Shares A Shares B Shares
Shares No. of Weighted Shares No. of Weighted Shares No. of Weighted
Issued Days Average Issued Days Average Issued Days Average
01-Mar-16 20,349,869 365 20,349,869 9,951,133 365 9,951,133 - 365 -
04-Apr-16 - 331 - - 331 - 5,768,291 331 5,230,971
05-Apr-16 - 330 - - 330 - 63,037 330 56,992
03-May-16 - 302 - - 302 - 992,938 302 821,554
28-Feb-17 20,349,869 365 20,349,869 9,951,133 365 9,951,133 6,824,266 365 6,109,517
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.
Further details of these investments are provided in the
Investment Manager's Review and Investment Portfolio.
The Company's Investment Manager performs valuations of
financial items for financial reporting purposes, including Level 3
fair values. Valuation techniques are selected based on the
characteristics of each instrument, with the overall objective of
maximising the use of market-based information.
Level 3 valuations include assumptions based on non-observable
data with the majority of investments being valued on discounted
cashflows or price of recent transactions.
Valuation techniques and
unobservable inputs:
Inter relationship between significant
Valuation Significant unobservable unobservable inputs and fair value
Sector Techniques inputs measurement
Estimated fair value would
increase/(decrease) if:
Cinema -- Discounted
Digitisation cash flows: * Discount rate 4.50% * The discount rate was lower/(higher)
The valuation
model
considers the
present value
of expected
payment,
discounted
using a
risk-adjusted
discount rate.
Hydroelectric -- Discounted
Power cash flows: The * Discount rate 10% * The discount rate was lower/(higher)
valuation model
considers the
present value of
expected * Inflation rate 2%
payment, * The inflation rate was higher/(lower)
discounted using
a risk-adjusted
discount rate.
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.
Discount rates have been applied reflecting levels of risk and
life expectancy of the investment.
Where discount rates have been applied to the unquoted
investments, alternative discount rates have been considered. Two
alternative scenarios for each investment have been modelled, a
more prudent assumption (downside case) and a more optimistic
assumption (upside case). Applying the downside alternative, the
aggregate change in value of the unquoted investments would be
GBP115,000 or 5.9 per cent lower. Using the upside alternative the
aggregate value of the unquoted investments would be GBP255,000 or
13.1 per cent higher.
Movements in investments held at fair value through the profit
or loss during the year to 28 February 2017 were as follows:
Level 3 Unquoted Investments Ordinary Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000
Year ended 28 February 2017
Opening Cost 5,494 9,466 - 14,960
Opening unrealised profit 256 - - 256
Opening fair value at 1 March 2016 5,750 9,466 - 15,216
Purchases at cost - - 5,850 5,850
Disposal proceeds (2,195) (1,120) (490) (3,805)
Transfers between share classes (2,826) 1,426 1,400 -
Realised loss on disposal (459) - - (459)
Investment holding losses (124) 30 26 (68)
Reclassification as assets held for sale (141) - - (141)
Closing fair value at 28 February 2017 5 9,802 6,786 16,593
Closing cost - 9,772 6,760 16,532
Closing investment holding gains 5 30 26 61
Year ended 29 February 2016
Opening Cost 4,311 - - 4,311
Opening unrealised (loss) (64) - - (64)
Opening fair value at 1 March 2015 4,247 - - 4,247
Purchases at cost 5,919 11,717 - 17,636
Disposal proceeds (3,852) (2,252) - (6,104)
Realised gain on disposals 1 1 - 2
Investment holding gains 228 - - 228
Reclassification as assets held for sale (793) - - (793)
Closing fair value at 29 February 2016 5,750 9,466 - 15,216
Closing cost 5,494 9,466 - 14,960
Closing investment holding gains 256 - - 256
All investments are designated as fair value through the profit
or loss at the time of acquisition and all capital gains or losses
arising on investments are so designated. Given the nature of the
Company's venture capital investments, the changes in fair values
of such investments recognised in these Financial Statements are
not considered to be readily convertible to cash in full at the
balance sheet date and accordingly any gains or losses on these
items are treated as unrealised.
Material disposals during the year
Cost Opening Valuation Disposal Realised Loss
GBP'000 GBP'000 GBP'000 GBP'000
Green Highland Shenval Ltd 416 416 416 -
Highland Hydro Services Ltd 813 1,099 640 (459)
1,229 1,515 1,056 (459)
The loss shown on the sale of Highland Hydro Services Ltd was
due to a dividend of GBP515,064 being declared prior to the sale
and subsequently received. The realised losses shown in the table
above and the realised gain shown in note 11 under Assets Held for
Sale equal the total realised losses shown in the Statement of
Comprehensive Income on page 46.
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.
Material disposals during the year
Investee Company Cost Opening Valuation Disposal Realised Gain
GBP'000 GBP'000 GBP'000 GBP'000
Aeris Power Ltd 575 464 494 30
Craigahulliar Energy Ltd 310 329 329 -
885 793 823 30
Income for the year relating to these disposals amounted to
GBP10,000 and expenses were GBPnil.
DLN Digital Ltd, a cinema digitisation company previously
treated as Financial Assets at fair value through profit or loss
has been reclassified as an asset held for sale at 28 February 2017
following the Investment Managers commitment to sell this company.
It is highly probable that a sale will complete within 12 months.
Subsequent to reclassification, in line with IFRS 5, the company
will continue to be measured in line with IAS 39. Income for the
year relating to the investment amounted to GBPnil and expenses
were GBPnil. This asset is fair value through profit and loss and
classified as Level 3 (2016: Level 3).
12. Receivables
28 February 2017 29 February 2016
Ordinary Shares A Shares B Shares Total Ordinary Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Accrued income 2 102 18 122 17 85 - 102
Prepaid expenses 2 2 1 5 3 1 - 4
Other debtors 670 574 4 1,248 661 190 - 851
674 678 23 1,375 681 276 - 957
13. Cash and Cash Equivalents
Cash and cash equivalents comprise deposits with The Royal Bank
of Scotland plc.
14. Payables and Accrued Expenses
Year ended Year ended
28 February 2017 29 February 2016
Ordinary Shares A Shares B Shares Total Ordinary Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Trade Creditors 5 59 51 115 - - - -
Other taxation and
social security 2 2 1 5 3 1 - 4
Accrued expenses &
deferred income 75 12 8 95 75 43 - 118
82 73 60 215 78 44 - 122
Disclosure by share class is unaudited
15. Share Capital
28 February 2017 29 February 2016
Ordinary Shares of GBP0.01 each
Issued & Fully Paid
Number of shares 20,349,869 20,349,869
Par Value GBP'000 203 203
Authorised
Number of shares 60,000,000 60,000,000
Par Value GBP'000 600 600
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 6,824,256 -
Par Value GBP'000 68 -
Authorised
Number of shares 10,000,000 -
Par Value GBP'000 100 -
Company Total Shares of GBP0.01 each
Issued & Fully Paid
Number of shares 371,252,258 303,010,002
Par Value GBP'000 371 303
On 29 April 2016 the B Share Class offer closed with a total of
6,824,266 B Shares being issued.
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 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:
Taxation payable 5 - 5 -
Other Payables 210 - 210 -
215 - 215 -
Year ended 29 February 2016
Assets:
Financial assets at fair
value through profit or
loss 15,216 - - 15,216
Assets held for sale 793 - - 793
Receivables 953 953 - -
Cash and cash equivalents 337 337 - -
17,299 1,290 - 16,009
Liabilities:
Taxation payable 3 - 3 -
Other Payables 119 - 119 -
122 - 122 -
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 in the balance
sheet. The Directors believe that where an investee company's
enterprise value, which is equivalent to fair value, remains
unchanged since acquisition that investment should continue to be
held at cost less any loan repayments received. Where they consider
the investee company's enterprise value has changed since
acquisition, that should be reflected by the investment being held
at a value measured using a discounted cash flow model 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 2017 by GBP16,800. 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 GBP7,141,000
(2016: GBP8,399,000) and is subject to fixed interest rates for the
five year loan terms 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 amounts held in variable rate investments at the balance
sheet date are as follows:
28 February 2017 29 February 2016
GBP'000 GBP'000
Cash on Deposit 1,525 337
1,525 337
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 2017. 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 2017 29 February 2016
GBP'000 GBP'000
Non Qualifying investment loans 3,744 5,209
Qualifying Investment loans 3,397 3,190
Cash on Deposit 1,525 337
Receivables 1,370 953
10,036 9,689
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 2017 cash held by the Company amounted
to GBP1,525,000.
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 Ordinary Share is 11.32p (2016: 35.26p)
and is based on net assets of GBP2,304,000 (2016: GBP7,176,000)
divided by the 20,349,869 (2016: 20,349,869) Ordinary Shares in
issue.
The net asset value per A Share is 104.07p (2016: 100.54p) and
is based on net assets of GBP10,356,000 (2016: GBP10,005,000)
divided by the 9,951,133 (2016: 9,951,133) A Shares in issue.
The net asset value per B Share is 99.76p (2016: nil) and is
based on net assets of GBP6,808,000 (2016: GBPnil) divided by the
6,824,256 (2016: nil) B Shares in issue.
18. Commitments and Contingencies
The Company has no outstanding commitments or contingent
liabilities.
19. Relationship with Investment Manager
During the period, TPIM received GBP494,509 which has been
expensed (2016: GBP525,210), for providing management and
administrative services, to the Company. At 28 February 2017
GBP115,441 was owing to TPIM (2016: GBP85,020).
20. Related Party Transactions
The Directors Remuneration Statement on pages 32 to 34 discloses
the Directors' remuneration and shareholdings.
21. Post Balance Sheet Events
Since the year end, on 13 April 2017 a dividend of GBP1.0
million equal to 5p per share has been paid to Ordinary Class
Shareholders.
22. Dividend
On 11 November 2016 a dividend of GBP4.9 million equal to 24p
per share was paid to the Ordinary Class Shareholders. Since the
year end, on 13 April 2017 a dividend of GBP1.0 million equal to 5p
per share has been paid to Ordinary Class Shareholders. The Board
has resolved to pay a further dividend to Ordinary Class
Shareholders of GBP406,997 equal to 2p per share which will be paid
on 23 June 2017 to shareholders on the register on 9 June 2017.
This will bring the total paid by way of dividends to the Ordinary
Class Shareholders to 110.75p per share.
The Board has resolved to pay the first dividend to A Class
Shareholders of GBP398,045 equal to 4p per share which will be paid
on 23 June 2017 to shareholders on the register on 9 June 2017.
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
Grant Thornton UK LLP
Chartered Accountants and Statutory Auditor
30 Finsbury Square
London
EC2P 2YU
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:
13 July 2017 Annual General Meeting
October 2017 Interim report for the six months ending 31 August 2017 despatched
May 2018 Results for the year to 28 February 2018 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 13 July 2017 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 2017 together with the Independent Auditors Report thereon
(Ordinary Resolution).
2. To approve the Directors' Remuneration Report for the year
ended 28 February 2017 (Ordinary Resolution).
3. To approve the Directors' Remuneration Policy (Ordinary
Resolution)
4. To re-elect Chad Murrin as a Director (Ordinary
Resolution).
5. To re-elect Tim Clarke as a Director (Ordinary
Resolution).
6. To re-appoint Grant Thornton UK LLP as Auditor and determine
their remuneration (Ordinary Resolution).
Special Business
7. 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
Ordinary Shares, A Shares or B Shares provided that:
(i) the maximum aggregate number of Ordinary Shares authorised
to be purchased is an amount equal to 10% of the issued Ordinary
Shares as at the date of this Resolution;
(ii) 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;
(iii) 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;
(iv) the minimum price which may be paid for an Ordinary Share,
A Share or B Share is 1 pence;
(v) the maximum price which may be paid for an Ordinary Share, 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
Ordinary Shares, 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 Ordinary Share, A
Share or B Share (as applicable) is purchased; and
(vi) 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 16 May 2017
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.
Form of Proxy
Relating to the 2017 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 13 July
2017, notice of which was sent to shareholders with the Directors'
Report and the accounts for the period ended 28 February 2017, 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 2017.
2. To approve the implementation report set out in the Directors' Remuneration Report for the
year ended 28 February 2017.
3. To approve the Directors' Remuneration Policy
4. To re-elect Chad Murrin as a Director
5. To re-elect Tim Clarke as a Director
6. To re-appoint Grant Thornton UK LLP as auditor and authorise the Directors to agree their
remuneration.
7. To authorise the Directors to make market purchases of the Company's own shares (Special
Resolution).
Signed:
.......................................................................
Dated: ................................................ ..2017
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
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