RNS Number : 1709J
TP70 2008 (i) VCT PLC
28 November 2008
The directors of TP70 2008 (I) VCT plc are please to announce their interim results for the period ended 30 September 2008
For further information, please contact :
David Dick 020 7201 8989 or Graham Urquhart 020 3216 2000
Financial summary
�'000
Net assets 20,817
Net loss before tax (1,164)
Loss per share (6.39p)
Net asset value per share 90.12p
Chairman's statement
I am pleased to be writing to you to present the unaudited interim results for TP70 2008 (I) VCT plc ("the Company") for the period from
incorporation on 7 November 2007 to 30 September 2008.
The Company's investment strategy is to offer combined exposure to GAM's fund of hedge funds - GAM Diversity and venture capital
investments focused on companies with contractual revenues from financially secure counterparties. 30% of the Company's funds are currently
exposed to GAM Diversity 2.5XL. The remaining 70% will be invested in suitable VCT qualifying investments as they become available. In the
meantime these funds are held in deposit accounts. During the period funds were held with Royal Bank of Scotland but, subsequently half have
been moved to AIB overnight deposit accounts.
By the end of the third year, in order to meet the VCT qualifying criteria, the Company's intention is that at least 70% of the fund
will be committed to VCT qualifying holdings with up to 30% remaining exposed to GAM Diversity 2.5 XL. In this connection, as detailed in
the investment manager's report, the board is pleased to note that the first VCT qualifying investment was made following the period end.
Results
Since the Company completed fundraising on 30 April 2008, there has been unprecedented turmoil in financial markets. This has led to a
fall in the value of the Company's exposure to GAM Diversity 2.5XL, which has contributed to an overall loss for the period of �1,191,000.
Risks and Uncertainties
The board confirms that the principal risks facing the company over the remainder of the financial period are:
(a) investment risk associated with investing in small and immature businesses
(b) failure to maintain approval as a VCT.
(c) exposure to GAM Diversity 2.5 XL.
(d) the possibility that the required redemption period for GAM Diversity will be extended.
The Board believe these principal risks are manageable and to expected for a company with TP70 2008 (I) VCT plc's strategy. The Board
continues to work closely with the Investment Manager to endeavour to minimise either their likelihood or potential impact.
Conclusion
The financial markets have experienced unprecedented difficulties and the Company has not been unaffected. However, the Board is
confident that the strategy of the Company is correct, and that the Company's exposure to GAM Diversity 2.5XL will be profitable over the
longer term. Furthermore, a significant proportion of the returns to shareholders will be delivered by the VCT tax reliefs therefore the
Board is pleased that the Company is on course to secure VCT tax status.
If you have any queries or comments, please do not hesitate to telephone Triple Point Investment Management LLP on 020 7404 7403 or
email me at michael.sherry@triplepoint.co.uk.
Michael Sherry
Chairman
28 November 2008
TP70 2008 (I) VCT plc
interim financial report
for the period ended 30 September 2008
Investment manager's report
In accordance with the prospectus following launch of the company, approximately 30% of net asset value was committed to GAM Diversity
2.5 XL, half directly via the underlying company, Lorngreen Limited, and half indirectly via the Derivative Transaction with Julius Baer
explained in Note 14 to these financial statements.
Shareholders will be aware that this has been a bleak period in the markets, affecting hedge funds such as GAM Diversity which seek
absolute returns in common with other investments. For the period from investment by the company up to 30 September 2008 GAM Diversity fell
6.8% which compares with falls in the FTSE of 16.3% and in the MSCI World Index of 13.4%. However, the loss of 6.8% was increased to a loss
of 19.5%, taking into account the leverage within Diversity 2.5 XL, resulting in the overall loss recognised in the financial statements of
�1,292,000 on the company's exposure to Diversity 2.5 XL.
These short term losses are disappointing but GAM Diversity 2.5XL was chosen for the Company because of its attractiveness as a long
term investment. The investment manager remains confident that, given the extended period for which the company intends retaining its
exposure, the exposure to GAM Diversity 2.5XL will have a positive impact on shareholders' funds.
Finally, I am pleased to announce that following the period end the company completed its first VCT qualifying investment investing
�875,000 in MGS West Midlands Limited which will supply medical gas to the West Midlands Ambulance Trust. This investment meets the criteria
required for a Triple Point VCT qualifying investment, including contractual cash flows and a high quality counterparty, and is a
significant first step towards the Company gaining VCT approval.
David Dick
for
Triple Point Investment Management LLP
28 November 2008
TP70 2008 (I) VCT plc
Condensed interim financial report
for the period ended 30 September 2008
Investment portfolio review
Security Cost Valuation
�'000 % �'000 %
Qualifying holdings - - - -
Non-qualifying holdings 6,593 29.76 5,301 25.41
Uninvested funds 15,563 70.24 15,563 74.59
22,156 100.00 20,864 100.00
Non-qualifying holdings
Unquoted
Lorngreen Limited
Equity 2,640 40.04 1,993 37.60
Loan 660 10.01 660 12.45
Deposit with Julius Baer securing the 3,293 49.95 3,293 62.12
derivative transaction
Derivative Transaction - - (645) (12.17)
6,593 100.00 5,301 100.00
TP70 2008 (I) VCT plc
Condensed interim financial report
for the period ended 30 September 2008
Directors' Responsibility Statement
The Directors have chosen to prepare the interim financial report for the company in accordance with International Financial Reporting
Standards ("IFRS").
In preparing the summarised financial statements for the 11 month period to 30 September 2008, the Directors confirm that to the best of
their knowledge:
a) the summarised set of financial statements have been prepared in accordance with international accounting standard IAS34,"Interim
Financial Reporting" issued by the International Accounting Standards Board;
b) the interim management report includes a fair review of important events during the period and their effect on the financial
statements and a description of principal risks and uncertainties for the remainder of the accounting period;
c) the summarised set of financial statements give a true and fair view in accordance with IFRS of the assets, liabilities, financial
position and of the profit or loss of the company for the period and comply with IFRS and the Companies Acts 1985 and 2006; and
d) the interim management report includes a fair review of related party transactions and changes therein. Other than detailed in
note 16 there are no related party transactions.
This Interim Financial Report has not been audited or reviewed by the auditor.
Michael Sherry
Chairman
28 November 2008
TP70 2008 (I) VCT plc
Summary income statement
for the period ended 30 September 2008
Note Rev. Cap. Total
�'000 �'000 �'000
Investment income 5 389 - 389
Unrealised loss on investments 10 - (647) (647)
Derivative transaction 10 - (645) (645)
Investment return 389 (1,292) (903)
Investment management fees 6 50 149 199
Financial and regulatory costs 8 - 8
General administration 9 - 9
Legal and professional fees 13 - 13
Directors' remuneration 7 32 - 32
Operating expenses 112 149 261
Profit / (loss) on ordinary activities before taxation 277 (1,441) (1,164)
Taxation on ordinary activities 8 27 - 27
Profit / (loss) on ordinary activities after taxation 250 (1,441) (1,191)
Profit / (loss) per share (basic & diluted) 9 1.34p (7.74p) (6.39p)
The loss per share shown above is both basic and diluted as there are no potentially dilutive financial instruments in issue.
The total column of this statement is the company's income statement prepared in accordance with International Financial Reporting
Standards ("IFRS"). The supplementary revenue return and capital return columns have been prepared under guidance published by the
Association of Investment Companies ("AIC").
Summary statement of changes in equity (unaudited)
for the period ended 30 September 2008
Issued Capital Share Premium Capital Reserve Revenue Reserve Total
�'000 �'000 �'000 �'000 �'000
Loss for the period
-
-
(1,441)
250
(1,191)
Issue of share capital
231
22,814
-
-
23,045
Share issue costs
-
(1,037)
-
-
(1,037)
Balance at 30 September 2008
231
21,777
(1,441)
250
20,817
The accompanying notes on pages 9 to 14 form an integral part of this interim financial report.
TP70 2008 (I) VCT plc
Summary balance sheet
as at 30 September 2008
Note �'000
Non Current Assets
Financial assets at fair value through profit and loss 10 5,301
Current assets:
Other receivables 9
Cash and cash equivalents 11 15,563
15,572
TOTAL ASSETS 20,873
Current Liabilities
Other payables 29
Current taxation payable 8 27
56
NET ASSETS 20,817
EQUITY
Equity attributable to equity holders of the parent
Share capital 12 231
Share premium 21,777
Capital reserve (1,441)
Revenue reserve 250
Total equity 20,817
Net asset value per share (pence) 13 90.12p
These financial statements were agreed by the board and authorised for issue on 13 November 2008 and were signed on its behalf by:
Michael Sherry
Director
The accompanying notes on pages 9 to 14 form an integral part of this interim financial report
TP70 2008 (I) VCT plc
Condensed interim cash flow statement
for the period ended 30 September 2008
�'000
Cash flows from operating activities
Loss before taxation (1,164)
Unrealised loss in investment values
1,292
128
Increase in other receivables
(9)
Increase in current liabilities
29
Cash generated from operations
148
Cash flow from investing activities
Purchase of financial assets at fair value through profit and loss account
(6,593)
Net cash flows from investing activities
(6,593)
Cash flows from financing activities
Proceeds from issue of share capital
23,045
Share issue expenses
(1,037)
Net cash flows from financing activities
22,008
Net increase in cash and cash equivalents
15,563
Reconciliation of net cash flow to movements in cash and cash equivalents
Cash and cash equivalents at 30 September 2008
15,563
The accompanying notes on pages 9 to 14 form an integral part of this interim financial report.
TP70 2008 (I) VCT plc
Notes to the summarised set of financial statements
for the period ended 30 September 2008
1. Corporate Information
The interim condensed financial statements of the company for the period from incorporation on 7 November 2007 to 30 September 2008 were
authorised for issue in accordance with a resolution of the directors on 28 November 2008.
The company was admitted for listing on the London Stock Exchange on 6 February 2008.
The company is incorporated and domiciled in Great Britain. The address of its registered office, which is also it's principal place of
business, is 4-5 Grosvenor Place, London, SW1X 7HJ.
The company's summarised financial statements are presented in Pounds Sterling (�) which is also the functional currency of the parent
company.
The financial information set out in this interim report does not constitute statutory accounts as defined in Section 240 of the
Companies Act 1985.
The principal activity of the company is investment. The company's investment strategy is to offer combined exposure to GAM Diversity
Inc (GAM's fund of hedge 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
The interim condensed financial statements of the Company for the period to 30 September 2008 have been prepared in accordance with IAS
34: Interim Financial Reporting and other accounting policies consistent with IFRS adopted for use in the European Union and therefore
complies with the articles of the EU IAJ regulation and with the statement of recommended practice: Financial Statements of Investment Trust
Companies (SORP) issued by the Association of Investment Companies ("AIC") in January 2003 and revised in December 2005, in so far as this
does not conflict with IFRS. The information in this document does not include all of the disclosures required by IFRS and the SORP in full
annual financial statements. The interim financial information has been prepared applying the accounting policies and presentation that will
be adopted in the preparation of the company's financial statements for the period ending 31 March 2009.
The summarised set of financial statements has been prepared on a historical cost basis except that investments are shown at fair value
through profit and 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 judgements about the carrying value of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these judgements.
The key judgements made by directors are in the valuation of non-current assets where they accept the independent expert valuation of
professional valuers and the independently prepared summary of market prices for equity investments. 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.
TP70 2008 (I) VCT plc
Notes to the summarised set of financial statements
for the period ended 30 September 2008
2. Basis of preparation and accounting policies (continued)
Presentation of income statement
In order to better reflect the activities of an investment trust company, and in accordance with the guidance issued by the AIC,
supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the
Income Statement. In accordance with the Company's status as a UK investment company under section 266 of the Companies Act 1985, net
capital returns may not be distributed by way of dividend.
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 a documented investment strategy, and
information about the portfolio is provided internally on that basis to the company's board of directors. Accordingly upon initial
recognition the investments and loan notes are designated as "at fair value through the profit and loss" ("FVTPL"). 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
income statement and allocated to "capital" at the time of acquisition). Subsequently the investments are valued at "fair value" which is
measured as follows:
Unlisted investments are fair valued by the Directors in accordance with the International Private Equity and Venture Capital Valuation
Guidelines.
Listed investments are fair valued at bid price.
Where securities are designated upon initial recognition as at fair value through the profit or loss, gains and losses arising from
changes in fair value are included in net profit or loss for the period as a capital item in accordance with the AIC SORP. 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.
It is not the Group's policy to exercise control or significant influence over investee companies. Therefore, in accordance with IAS 27
Consolidated and separate financial statements, those undertakings in which the Group holds more than 20% of the equity are not regarded as
associated undertakings.
Income
Investment income includes interest earned on bank balances and money market securities and includes income tax withheld at source.
Dividend income is shown net of any related tax credit.
Dividends receivable are brought into account on the ex-dividend date. Fixed returns on debt and money market securities are recognised
on a time apportionment basis so as to reflect the effective yield, provided there is no reasonable doubt that payment will be received in
due course.
Expenses
All expenses are accounted for on the accruals basis. Expenses are charged to revenue with the exception of the investment management
fee, which has been charged 25% to the revenue account and 75% 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.
TP70 2008 (I) VCT plc
Notes to the summarised set of financial statements
for the period ended 30 September 2008
2. Basis of preparation and accounting policies (continued)
Taxation
Corporation tax payable is applied to profits chargeable to corporation tax, if any, at the current rate.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where
transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less tax, with the
exception that deferred tax assets are recognised only to the extent that the Directors consider that it is more likely than not that there
will be suitable taxable profits from which the future reversal of the underlying timing can be deducted.
Financial instruments
The Company's principal financial assets are its investments and the 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.
Derivatives are classified at fair value through profit and loss.
Provisions
A provision is recognised when the Company has a legal or constructive obligation as a result of a past event and it is probable that an
outflow of economic benefits will be required to settle the obligation. If the effect is material, expected future cash flows are discounted
using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability.
Where the Company expects some or all of a provision to be reimbursed, for example under an insurance policy, the reimbursement is
recognised as a separate asset but only when recovery is virtually certain. The expense relating to any provision is presented in the income
statement net of any reimbursement. Where discounting is used, the increase in the provision due to unwinding the discount is recognised as
a finance cost.
Issued share capital
Ordinary shares are classified as equity because they do not contain an obligation to transfer cash or another financial asset.
Cash
Cash represents cash available at less than 3 months notice.
TP70 2008 (I) VCT plc
Notes to the summarised set of financial statements
for the period ended 30 September 2008
2. Basis of preparation and accounting policies (continued)
Other receivables
Other receivables are recognised at fair value on initial recognition and subsequently at amortised cost. An impairment loss is
recognised whenever the carrying amount of an asset exceeds its recoverable amount.
Other payables
Other payables are recognised at fair value on initial recognition and subsequently at amortised cost.
Segment reporting
A segment is a distinguishable component of the group that is engaged in generating income and expenses (business segment) which is
subject to risks and rewards that are different from those of other segments.
3 Seasonality of operations
The companies operations are not seasonal.
4 Segmental reporting
The Company currently has only one class of business, investment activity, and its only geographical segment is Europe.
5 Investment Income
�'000
Investment income 107
Bank interest 282
Total 389
6 Investment management fees
Triple Point Investment Management LLP provides investment management and administration services to the Company under an Investment
Management Agreement dated 14 December 2007 which runs for a period of 6 years and may be terminated at any time thereafter by not less than
twelve months' notice given by either party and which provides for an administration and investment management fee of 1.75% per annum of net
assets calculated and payable quarterly in arrears.
TP70 2008 (I) VCT plc
Notes to the summarised set of financial statements
for the period ended 30 September 2008
7 Directors' remuneration
�'000
M G Sherry (Chairman) 10
A J Stone 10
I R J McLennan 12
Total 32
8 Taxation on ordinary activities
�'000
Loss on ordinary activities before tax (1,164)
Add back capital losses 1,292
Taxable income 128
UK corporation tax at 21% 27
Capital gains and losses are exempt from corporation tax due to the company's status as a Venture Capital Trust.
9 Loss per share
The loss per share is based on a loss from ordinary activities after tax of �1,191,000, and on the weighted average number of shares in
issue during the period of 18,626,703.
10 Financial assets at fair value through profit and loss account
Unquoted Investments
�'000
Purchases at cost 6,593
Unrealised loss on revaluation (1,292)
Valuation as at 30 September 2008 5,301
Cost as at 30 September 2008 6,593
Unrealised loss at 30 September 2008 (1,292)
The company holds 50% of the issued share capital of Lorngreen Ltd, but is accounting for this in accordance with IAS 27 as it does not
exercise control.
Included in Unquoted investments is a deposit of �3,293,000 with Julius Baer, which is the subject of the derivative transaction
described in note 14.
Further details of these investments are provided in the Investment portfolio review.
TP70 2008 (I) VCT plc
Notes to the summarised set of financial statements
for the period ended 30 September 2008
11 Cash and cash equivalents
Cash and cash equivalents comprise deposits with Royal Bank of Scotland plc.
12 Share Capital
No. Of Shares Par Value
�'000
Ordinary Shares of 1p
Authorised 50,000,000 500
Issued & Fully Paid 23,099,896 231
During the period the Company issued 23,099,894 ordinary shares of 1p each at a price of �1 each and 2 ordinary shares at par.
13 Net asset value per share
The calculation of net asset value per share is based on net assets of �20,817,000 divided by the 23,099,894 shares in issue.
14 Derivative transaction
The company has made a payment of �3,293.000 to Julius Baer and in return will receive back an equivalent sum plus or minus the
performance in the intervening time of GAM Diversity 2.5XL. The transaction will run for a maximum of 5 years but may be terminated by the
company at any time before then.
15 Commitments and contingencies
The company has no outstanding commitments or contingent liabilities.
16 Related party transactions
Michael Sherry, Chairman of the Company, is an equity Member of Triple Point LLP (TPLLP). TPLLP in turn has a controlling interest in
Triple Point Investment Management LLP (TPIMLLP). During the period, TPIMLLP received �198,770 for providing management and administrative
services to the Company.
17 Post balance sheet events
There have been no significant post balance sheet events.
TP70 2008 (I) VCT plc
Company Information
Directors
Michael Gabriel Sherry
Andrew Jonathan Stone
Ian R J McLennan
Secretary and Registered Office
Peter William Hargreaves
4-5 Grosvenor Place
London, SW1X 7HJ
Company Registered Number
6421083
Solicitors
Howard Kennedy
19 Cavendish Square
London, W1A 2AW
Bankers
Royal Bank of Scotland PLC Allied Irish Bank
54 Lime Street 4 Tenterden Street
London, EC3M 7NQ London, W1S 1TE
Investment Manager and Administrator
Triple Point Investment Management LLP
4-5 Grosvenor Place
London, SW1X 7HJ
VCT Tax Advisor
PricewaterhouseCoopers
1 Embankment Place
London, WC2N 6RH
Independent Auditor
Grant Thornton UK LLP
1 Westminster Way
Oxford, OX2 0PZ
Registrars
Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
West Midlands, B63 3DA
This information is provided by RNS
The company news service from the London Stock Exchange
END
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