TIDMTPV1
RNS Number : 9462U
TP70 2008 (i) VCT PLC
01 July 2009
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FOR IMMEDIATE RELEASE 1 JULY 2009
TP70 2008 (I) VCT PLC
Audited Results Announcement
For the period ended 31 March 2009 and notice of AGM
The directors of TP70 2008 (I) VCT Plc are pleased to announce their audited
results for the period ended 31 March 2009.
Copies of the full Report and Accounts and the notice of AGM have been
dispatched to the Shareholders.
Accounts
The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985 ("the Act"). The balance sheet as at 31 March 2009, income statement and
cash flow statement for the period then ended have been extracted from the
Company's 2009 statutory financial statements upon which the auditor's opinion
is unqualified and does not include any statement under section 327 of the Act.
The Annual Report & Accounts for the period ended 31 March 2009 will be filed
with the Registrar of Companies and has been posted to shareholders today.
Copies of the documents listed below have been submitted to the UK Listing
Authority and will be available for inspection in the UK Listing Authority's
Document Viewing Facility which is situated at:
The Financial Services Authority
25 The North Colonnade,
Canary
Wharf
London E14 5HS
Documents:
· Report and Accounts for the period ended 31 March 2009
· Annual General meeting Proxy Card
Enquiries : Triple Point Investment Management LLP
020 7201 8989
TP70 2008 (I) VCT plc
Financial statements for the period ended 31 March 2009
Company Number: 6421083 TP70 2008 (I) VCT plc Financial Statements 2009
Contents
Page
Financial summary1
Chairman's statement1
Details of Directors3
Details of Advisers4
Shareholder information5
Investment Manager's review6
Investment Portfolio7
Ten Largest VCT qualifying investments9
Directors' report11
Directors' remuneration report16
Corporate governance18
Directors' responsibility statement22
Report of the independent auditor24
Income statement26
Balance sheet27
Statement of changes in shareholders' equity28
Cash flow statement29
Notes to the financial statements30
Notice of annual general meeting40
Proxy form 42
TP70 2008 (I) VCT plc Financial Statements 2009
Financial summary
For the period ended 31 March 2009
+------------------------------------+----------+
| | GBP'000 |
| | |
+------------------------------------+----------+
| Net assets | 19,932 |
+------------------------------------+----------+
| Net loss before tax | (2,028) |
+------------------------------------+----------+
| Loss per share | (10.10p) |
+------------------------------------+----------+
| Net asset value per share | 86.28p |
| | |
+------------------------------------+----------+
TP70 2008 (I) VCT plc ("the Company") is a Venture Capital Trust ("VCT"). The
investment manager is Triple Point Investment Management LLP. The Company was
launched in November 2007 and raised GBP22 million through an offer for
subscription. Initially 70% of the Company's net assets were to be invested in
cash and liquid assets. Thereafter by the end of the third year, at least 70%
will be invested in VCT qualifying investments. The remaining 30% of net assets
are exposed to a leveraged version of GAM Diversity, a fund of hedge funds. The
Company invests in businesses with contractual revenues from financially sound
customers and aims to generate an attractive income stream and modest but
accessible capital growth for shareholders.
Chairman's statement
I am pleased to present the first audited accounts for TP70 2008 (I) VCT plc
("the Company") for the period from incorporation on 7 November 2007 to 31 March
2009.
INVESTMENT STRATEGY
The Company's strategy offers combined exposure to GAM Diversity and to
VCT-qualifying venture capital investments with contractual revenues from
financially secure counterparties. 30% of the Company's funds are currently
exposed to GAM Diversity 2.5XL. The remaining 70% is in the process of being
invested in suitable VCT-qualifying holdings. Funds not deployed are held in
money market funds.
By the end of the third accounting period, 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 remaining funds exposed to GAM Diversity 2.5XL.
Significant progress has been made in building up the portfolio of qualifying
holdings which as at 31 March 2009 comprised some 52.8% of TP70 2008 (I)'s
investment assets. The Board is pleased that the Company is on course to secure
VCT tax status. The investment manager's report details this progress.
RESULTS
The Company completed its fundraising on 30 April 2008, raising over GBP22
million. Since then, the markets have been characterised by uncertainty and
exceptional volatility. This has led to a fall in the value of GAM Diversity
2.5XL of GBP2,260,000, which has contributed to an overall loss for the period
of GBP2,071,000. The performance of GAM Diversity and 2.5XL are discussed in the
investment manager's report. At the period end the Net Asset Value (NAV) per
share stood at 86.28p.
DIVIDEND
The Board has resolved to pay a first dividend of GBP404,000 out of the revenue
profits to be paid to shareholders on the register at 17 July 2009 in respect of
the period ended 31 March 2009, equivalent to 1.75 p per share.
RISKS
The Board believes that the principal risks facing the Company are:
* investment risk associated with exposure to GAM Diversity 2.5XL
* investment risk associated with undertaking VCT qualifying investments
* failure to secure final approval as a VCT
The Board believes these risks are to be expected for a company with TP70 2008
(I) VCT plc's strategy. The Board and the Investment Manager continue to work to
minimise either the likelihood or potential impact of these risks, within the
scope of the Company's established investment strategy.
OTHER DEVELOPMENTS
Simon Acland, who has extensive experience of VCTs having been Managing Director
of Quester, replaced Andrew Stone as a director in March 2009. I would like to
express my thanks to Andrew for his contribution to the Company.
The notice period for redemption of GAM Diversity was extended from one to three
months which has resulted in a modest increase in the cost of funding the
Company's exposure to GAM Diversity through Julius Baer
Following application by the Company, the courts confirmed cancellation of the
Company's share premium account which will facilitate future distributions to
shareholders.
OUTLOOK
The Company's performance has not been unaffected by the recent unprecedented
market turmoil. However, the Board is pleased with the progress made in the
qualifying holdings and is confident that the Company is on track for VCT
qualification and that exposure to GAM Diversity 2.5XL will be profitable for
the company and shareholders over the life of the Company.
If you have any queries or comments, please do not hesitate to telephone Triple
Point Investment Management LLP on 020 7201 8989 or email me at
michael.sherry@triplepoint.co.uk.
Michael Sherry
Chairman
22 June 2009
TP70 2008 (I) VCT plc Financial Statements 2009
Details of Directors
Michael Gabriel Sherry, aged 53, is Chairman of the Board of the Company. Oxford
University educated, a Chartered Accountant and a practicing barrister. He is a
Council Member and the Treasurer of the Institute of Chartered Accountants of
England and Wales (ICAEW) and was previously Chairman of the ICAEW's Tax
Faculty. A member of the Gray's Inn Barristers' Committee, Michael has written a
number of books and numerous articles and was formerly the President of the
Institute of Indirect Taxation. Michael is a director of Triple Point VCT plc,
TP70 VCT plc and a number of unquoted companies.
Ian R J McLennan, aged 44, is a professional investor with over 20 years
experience in equities. A graduate of Glasgow University and a Chartered
Financial Analyst, Ian was most recently global equity strategist at $20bn macro
hedge fund, Bevan Howard LLP. Prior to that he was a managing director and Asian
global equity strategist at UBS Investment Bank in London. Ian is now a
corporate finance consultant and a director of Media Equals Ltd.
Simon Acland, aged 51, has over twenty years' experience in venture capital,
primarily at Quester, where he became Managing Director. When Quester was sold
in 2007 it had GBP200m under management and was one of the leading UK venture
capital and VCT investment managers. Simon was a director of over 20 companies
within Quester's portfolio, several of which achieved successful exits through
flotation or trade sales. Simon is chairman of TP 70 2009 VCT plc.
TP70 2008 (I) VCT plc Financial Statements 2009
Details of Advisers
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 ("TPIM LLP")
4-5 Grosvenor Place
London, SW1X 7HJ
VCT Tax Adviser
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
TP70 2008 (I) VCT plc Financial Statements 2009
Shareholder information
The Company
TP70 2008 (I) VCT plc is a Venture Capital Trust. The investment manager is
Triple Point Investment Management LLP ("TPIM LLP"). The Company was launched in
November 2007 and raised over GBP22 million through an offer for subscription.
The Company's annual and half yearly reports are available on the TPIM website.
Venture Capital Trusts
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% (40% from 6 April 2004 - 5 April 2006)
* exemption from income tax on dividends paid
* exemption from capital gains tax on disposals of shares in VCTs.
TP70 2008 (I) VCT has been provisionally approved as a VCT by the HM Revenue &
Customs. In order to maintain its 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. A "qualifying holding" consists of up to GBP1 million
invested in any one year in new shares or securities in an unquoted Company
(including companies listed on AIM) which is carrying on a qualifying trade and
whose gross assets do not exceed GBP8 million (GBP15 million to 5 April 2006).
The Government announced that VCTs will be exempt from paying VAT on investment
management fees with effect from 1 October 2008. This follows a European Court
of Justice judgement against the Government in a case relating to VAT payable by
investment trusts.
Financial Calendar
The Company's financial calendar is as follows:
21 July 2009 Payment of first dividend
23 July 2009 Annual General Meeting
November 2009 Interim report published
July 2010 Annual report and financial statements for the year ended 31 March
2010 published
TP70 2008 (I) VCT plc Financial Statements 2009
Investment Manager's review
Let me begin by acknowledging that the 12 months under review have been
extraordinary. The global economy and financial markets have experienced
considerable upheaval. During this most unstable and volatile of periods I am
pleased to report that TPVCT 2008 (I) ("the Company") has made significant
progress in implementing its investment strategy, gaining considerable exposure
to Triple Point VCT-qualifying investments. However, because of its substantial
hedge fund exposure to GAM Diversity GBP 2.5XL, the Company has not been
unaffected by market events and, at the 31 March 2009, has experienced a fall in
the Net Asset Value (NAV).
The Company's objective is to deliver underlying returns comparable to GAM
Diversity but with the substantial incremental tax benefits of a VCT. The
investment strategy is to invest at least 70% of net proceeds into Triple Point
VCT-qualifying investments and expose the remaining funds to GAM Diversity
2.5XL.
During the period under review, I am pleased to report that the Company has
invested 52.8% of funds (by value of investments) into HMRC-approved
VCT-qualifying companies. Therefore, only a further 17.2% of funds need to be
invested into VCT-qualifying investments by the end of the third accounting
period, that to 31 March 2011, to secure VCT qualification.
The portfolio of holdings built by the Company encompasses investments into
twelve unquoted companies in five industry sectors. These include investments
into companies supplying medical gas to the NHS and crematoria services to a
local authority. In the next 12 months TPIMLLP will continue to target companies
with strong, creditworthy and contractual revenues, and is confident that the
Company is on target to achieve the 70% qualifying investments threshold
required to secure VCT tax status.
30% of the Company's NAV is exposed to GAM Diversity 2.5XL. Shareholders will be
aware that this bleak period in the market has affected funds such as GAM
Diversity. Since the Company's investment activity began the FTSE All-Share
Index has fallen 30.6%, the MSCI World Index has fallen 23.2% and HFRX Global
Hedge Fund Index in USD has fallen 22.6%. GAM Diversity has substantially
outperformed these benchmarks but has still fallen 12.0%. However, taking into
account the leverage within GAM Diversity 2.5XL, this was magnified to a loss of
34.2%.
Though GAM Diversity's performance relative to its peers may have been positive,
GAM are not satisfied with its absolute performance as the fund had been
positioned for a difficult market environment at the start of 2008.
Unfortunately the scale of market dislocations resulted in even relatively
conservative strategies suffering losses.
For 2009, it is anticipated that GAM Diversity's neutral asset weighting range
will be 20-25% in equity long-short strategies, 40-45% in trading strategies and
25-35% arbitrage strategies.
Despite the loss incurred by GAM Diversity, we remain confident in its long term
performance. The twenty year track record of GAM Diversity shows that,
historically, its five year returns have been positive and the Company is likely
to benefit from the leveraged exposure of GAM Diversity 2.5XL.
David Dick,
Managing Partner Triple Point Investment Management LLP
22 June, 2009
About Triple Point Investment Management LLP
TPIMLLP is a specialist in tax-efficient investments. As well as managing
several market-leading VCTs, TPIMLLP offers investors a range of investment
products that qualify for government sponsored tax reliefs including the
Enterprise Investment Scheme (EIS) and Business Property Relief (BPR).
The Triple Point investment model - focused on capital security, liquidity and
tax-enhanced returns - has been built around the group's capabilities in
taxation, structured finance and investment to the benefit of every Triple Point
product.
For more information on TPIMLLP please call 020 7201 8990.
TP70 2008 (I) VCT plc Financial Statements 2009
Investment Portfolio
[*** UNPARSEABLE TABLE ***]
TP70 2008 (I) VCT plc Financial Statements 2009
Investment Portfolio (continued)
[*** UNPARSEABLE TABLE ***]
TP70 2008 (I) VCT plc Financial Statements 2009
Ten largest VCT qualifying investments
21st Century Cinema Ltd
Initial Investment date: 31 March 2009
Cost: GBP1,000,000
Last statutory financial statements: No statutory financial statements
available
Valuation Equity: GBP300,000
Valuation Debt: GBP700,000
Valuation Total: GBP1,000,000
Valuation Basis: Cost
Equity Held: 31.6%
Big Screen Digital Services Ltd
Initial Investment date: 31 March 2009
Cost: GBP1,000,000
Last statutory financial statements: No statutory financial statements
available
Valuation Equity: GBP300,000
Valuation Debt: GBP700,000
Valuation Total: GBP1,000,000
Valuation Basis: Cost
Equity Held: 31.6%
Cinematic Services Ltd
Initial Investment date: 31 March 2009
Cost: GBP1,000,000
Last statutory financial statements: No statutory financial statements
available
Valuation Equity: GBP300,000
Valuation Debt: GBP700,000
Valuation Total: GBP1,000,000
Valuation Basis: Cost
Equity Held: 31.6%
Digima Ltd
Initial Investment date: 31 March 2009
Cost: GBP1,000,000
Last statutory financial statements: No statutory financial statements
available
Valuation Equity: GBP300,000
Valuation Debt: GBP700,000
Valuation Total: GBP1,000,000
Valuation Basis: Cost
Equity Held: 31.6%
Digital Screen Solutions Ltd
Initial Investment date: 31 March 2009
Cost: GBP1,000,000
Last statutory financial statements: No statutory financial statements
available
Valuation Equity: GBP300,000
Valuation Debt: GBP700,000
Valuation Total: GBP1,000,000
Valuation Basis: Cost
Equity Held: 31.6%
TP70 2008 (I) VCT plc Financial Statements 2009
Ten largest VCT qualifying investments (continued)
Furnace Management Services Ltd
Initial Investment date: 17 March 2009
Cost: GBP910,136
Last statutory financial statements:No Statutory financial statements have been
produced since the investment was made by the Company
Valuation Equity: GBP273,041
Valuation Debt: GBP637,095
Valuation Total: GBP910,136
Valuation Basis: Cost
Equity Held: 24.5%
Meaujo 732 Ltd
Initial Investment date: 17 March 2009
Cost: GBP849,061
Last statutory financial statements:No Statutory financial statements have been
produced since the investment was made by the Company
Valuation Equity: GBP254,718
Valuation Debt: GBP594,343
Valuation Total: GBP849,061
Valuation Basis: Cost
Equity Held: 49.97%
MGS West Midlands Ltd
Initial Investment date: 30 October 2008
Cost: GBP798,000
Last statutory financial statements: No statutory financial statements
available
Valuation Equity: GBP248,000
Valuation Debt: GBP550,000
Valuation Total: GBP798,000
Valuation Basis: Cost
Equity Held: 24.5%
WAN Solutions Ltd
Initial Investment date: 17 March 2009
Cost: GBP611,174
Last statutory financial statements:No Statutory financial statements have been
produced since the investment was made by the Company
Valuation Equity: GBP183,352
Valuation Debt: GBP427,822
Valuation Total: GBP611,174
Valuation Basis: Cost
Equity Held: 47.5%
Wide Area Network Solutions Ltd
Initial Investment date: 17 March 2009
Cost: GBP443,469
Last statutory financial statements:No Statutory financial statements have been
produced since the investment was made by the Company
Valuation Equity: GBP133,041
Valuation Debt: GBP310,428
Valuation Total: GBP443,469
Valuation Basis: Cost
Equity Held: 47.5%
TP70 2008 (I) VCT plc Financial Statements 2009
Directors' report
The directors present their report and the audited financial statements for the
period from incorporation on 7 November 2007 to 31 March 2009. This review has
been prepared in accordance with the requirements of Section 417 of the
Companies Act 2006 and forms part of the directors' report to shareholders. The
Company's independent auditor is required by law to report on whether the
information given in the directors' report (including the business review) is
consistent with the financial statements. The auditor's opinion is given on
pages 24-25.
The principal activity of the Company during the year was the making of long
term equity and loan investments in unquoted companies.
The directors are required by s417 of the Companies Act 2006 to make a review of
the business. The business review is set out below but also includes the
Chairman's Statement on page 2 and Investment manager's Review on pages 6 to 10
by reference.
The directors have managed the affairs of the Company with the intention of
maintaining its status as an approved venture capital trust for the purposes of
Section 274 of the Income Tax Act 2007. The directors consider that the Company
was not at any time up to the date of this report a close company within the
meaning of Section 414 of the Income and Corporation Taxes Act 1988.
Key performance indicators
The Board has a number of performance measures to assess the Company's success
in meeting its objectives. Further details are provided within the Chairman's
Statement on page 1 and the Investment Manager's Review on page 6.The Board
believes that the Company will in due course satisfy all the VCT qualifying
conditions laid down by HM Revenue & Customs.
Investment Policy
The directors intend to return cash raised from exits promptly to shareholders,
who will be given the opportunity, as required by the company's articles, to
vote for the Company's discontinuance after six years.
TPIM LLP aims to achieve the Company's objectives (relatively low risk of
capital loss, low correlation to traditional asset classes and a rapid exit) in
part by investing on the basis of certain conservative principles in venture
capital investments:
Venture capital investments ("qualifying" investments under the tax rules
applying to VCTs)
* TPIM LLP seeks investments where robust due diligence has been undertaken on
target investments and where there is a high level of access to material
financial and other information on an ongoing basis;
* TPIM LLP seeks to minimise the risk of losses when investing through careful
analysis of the collateral available to investee companies and to reduce the
risk of losses by focusing on businesses typically with contractual revenues
from financially sound counterparties or a stream of predictable transactions
with multiple clients. Businesses with assets providing valuable security will
also be considered.
The Company's investment objectives and strategy are also discussed within the
Investment Manager's review on page 7.
TP70 2008 (I) VCT plc Financial Statements 2009
Directors' report (continued)
Directors
The directors of the Company, appointed on 30 November 2007 following its
incorporation, were Michael Sherry (Chairman), Ian R J McLennan and Andrew
Stone. Andrew Stone resigned on 13 March 2009 and Simon Acland was appointed to
fill the vacancy. Other than Michael Sherry who held 50,000 shares, the
directors of the Company during the period held no shares in the Company (in
respect of which transactions are notifiable to the Company under Disclosure and
Transparency Rule 3.1.2R).
In order to confirm their appointment the full Board will retire at the
forthcoming Annual General Meeting and, being eligible, offer themselves for
re-election.
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).
Directors' and officers' liability insurance
The Company has, as permitted by S232 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
the Company.
Policy on payment of payables
The Company's payment policy for the forthcoming financial year is to agree
terms of payment before business is transacted and to settle accounts in
accordance with those terms. The Company does not follow any code or standard
with regard to creditor payment practice. At 31 March 2009 there were no overdue
trade payables.
Management
TPIM LLP has acted as investment advisers and Investment Manager to the Company
since incorporation. The principal terms of the Company's management agreement
with TPIM LLP are set out in note 7 to the financial statements.
The Board has evaluated the performance of the investment manager based on the
return generated since taking on the Fund, a review of the management contract
and the services provided therein and benchmarking the performance of the
investment manager to other service providers. The Board believes that it is in
the interest of the shareholders as a whole and of the Company to continue the
appointment of the investment manager for the following year.
Annual General Meeting
Notice convening the second 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.
Financial risk management objectives and policies
The Board carries out a regular review of the environment in which the Company
operates. The main areas of risk identified by the Board are as follows:
Investment risk: the Company's VCT qualifying investments are all 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 attaching 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 wide
spread of holdings in terms of financing, industry sector and geographical
location. The Board reviews the investment portfolio with the Investment Manager
on a regular basis.
TP70 2008 (I) VCT plc Financial Statements 2009
Directors' report (continued)
Financial risk management objectives and policies (continued)
Financial risk: as most of the Company's investments involve a medium to
long-term commitment and are relatively illiquid, the directors consider that it
is inappropriate to finance the Company's activities through borrowing.
Accordingly, they seek to maintain a proportion of the Company's assets in cash
or cash equivalents in order to be in a position to take advantage of new
unquoted investment opportunities as they arise. The Company has no exposure to
foreign currency risk.
Internal control risk: the Board regularly reviews the system of internal
controls, both financial and non-financial, operated by the Company and the
manager. These include controls designed to ensure that the Company's assets are
safeguarded and that proper accounting records are maintained.
VCT qualifying status risk: the Company is required at all times to observe the
conditions laid down in the Income Tax Act 2007 for the maintenance of approved
VCT status. The loss of such approval could lead to the Company losing its
exemption from corporation tax on capital gains, to investors being liable to
pay income tax on dividends received from the Company and, in certain
circumstances, to investors being required to repay the initial income tax
relief on their investment. The investment manager keeps the Company's VCT
qualifying status under continual review and reports to the Board on a quarterly
basis. The Board has also retained PricewaterhouseCoopers LLP to undertake an
independent VCT status monitoring role.
The performance of the Company's underlying investment portfolio is influenced
by a combination of economic growth, interest rates, the number of trade and
private equity buyers and the level of merger and acquisition activity. All of
these factors have an impact on the Company's ability to invest and on the
Company's ability to exit from its underlying portfolios or on the levels of
profitability achieved on exit.
Further details of the risks identified by the Board, along with the risks to
which the Group is exposed through its operational and investing activities, are
detailed in note 18 and in the Chairman's Statement.
Share capital, rights attaching to the shares and restrictions on voting and
transfer
The Company's share capital is GBP500,000 divided into 50,000,000 shares of 1p
each, of which as at 31 March 2009 23,099,898 shares were in issue. 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; and
c) the right to receive notice of and to attend and speak and vote in person or
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.
TP70 2008 (I) VCT plc Financial Statements 2009
Directors' report (continued)
Share capital, rights attaching to the shares and restrictions on voting and
transfer (continued)
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 Section 793 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.
Due to the nature of the Company's activities, environmental, social and
employee issues do not apply to it directly and therefore no disclosures in
respect of these matters have been included in the financial statements.
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 and, so far as still applicable, the Companies Act 1985).
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 Sections 974 to 991 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.
TP70 2008 (I) VCT plc Financial Statements 2009
Directors' report (continued)
Appointment and replacement of directors (continued)
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 expiration 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 Acts, the memorandum and articles of
association of the Company and any directions given by shareholders by special
resolution, the articles of association specify that the business of the Company
is to be managed by the directors, who may exercise all the powers of the
Company, whether relating to the management of the business or not. In
particular, the directors may exercise on behalf of the Company its powers to
purchase its own shares to the extent permitted by shareholders.
Auditor
Grant Thornton UK LLP was appointed as auditor on 6 February 2008. 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.
Ian McLennan
Director
22 June 2009
TP70 2008 (I) VCT plc Financial Statements 2009
Directors' remuneration report
Introduction
This report has been prepared by the directors in accordance with the
requirements of Section 439 to the Companies Act 2006. A resolution to approve
the report will be proposed at the Annual General Meeting.
The Company's independent auditor is required to give their opinion on certain
information included in this report, as indicated below. The auditor's report on
these and other matters is set out on pages 24-25.
Consideration by the directors of matters relating to directors' remuneration
The Board as a whole considers directors' remuneration and has not appointed a
separate committee in this respect. The Board has not sought advice or services
from any person in respect of its consideration of directors' remuneration
during the year (although the directors expect from time to time to review the
fees paid to the Boards of directors of other Venture Capital Trusts).
Statement of the Company's policy on directors' remuneration
The Board consists entirely of non-executive directors, who meet at least four
times a year and on other occasions as necessary, to deal with important aspects
of the Company's affairs. Directors are appointed with the expectation that they
will serve for a period of three years. Directors' appointments are reviewed
formally every three years thereafter by the Board as a whole.
Each director has a service contract. Each director has a notice period of three
months and a director may resign by notice in writing to the Board at any time.
None of the directors is entitled to compensation payable upon early termination
of their contract other than in respect of any unexpired notice period.
+--------------------------+-----------+--------------+-------------+-------+---------+
| The information within this table | | | | |
| is audited: | | | | |
+--------------------------------------+--------------+-------------+-------+---------+
| | | Unexpired | | | |
+--------------------------+-----------+--------------+-------------+-------+---------+
| | | term of | Annual | | |
+--------------------------+-----------+--------------+-------------+-------+---------+
| | Date | contract at | rate of | Emoluments |
| | of | | | |
+--------------------------+-----------+--------------+-------------+-----------------+
| | contract | 31 March | directors' | in period |
| | | 2009 | fees | |
+--------------------------+-----------+--------------+-------------+-----------------+
| | | | GBP | | GBP |
| | | | | | |
+--------------------------+-----------+--------------+-------------+-------+---------+
| | | | | | |
+--------------------------+-----------+--------------+-------------+-------+---------+
| M G Sherry (Chairman) |14-Dec-07 | None | 12,500 | | 16,224 |
+--------------------------+-----------+--------------+-------------+-------+---------+
| A J Stone, resigned | - | - | - | | 15,600 |
| 13-Mar-09 | | | | | |
+--------------------------+-----------+--------------+-------------+-------+---------+
| S Acland |13-Mar-09 | 1 year | 12,500 | | - |
+--------------------------+-----------+--------------+-------------+-------+---------+
| I R J McLennan |14-Dec-07 | None | 15,000 | | 19,469 |
+--------------------------+-----------+--------------+-------------+-------+---------+
| | | | | | 51,293 |
+--------------------------+-----------+--------------+-------------+-------+---------+
The Company's policy is that the fees payable to the directors should reflect
the time spent by the Board on the Company's affairs and the responsibilities
borne by the directors and should be sufficient to enable candidates of high
calibre to be recruited. The policy is to review these rates from time to time,
although such review will not necessarily result in any changes to the rates.
The Company's policy is for the directors to be remunerated in the form of fees,
payable quarterly in arrears, to the directors personally. The fees are not
specifically related to the directors' performance, either individually or
collectively. There are no long-term incentive schemes, share option schemes or
pension schemes in place. No other remuneration or compensation was paid or
payable by the Company during the year to any of the current directors.
TP70 2008 (I) VCT plc Financial Statements 2009
Directors' remuneration report (continued)
Remuneration Committee
Since the Company consists solely of non-executive directors, a Remuneration
Committee is not considered necessary.
Share dealings
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 period ended
31 March 2009 with the return from a notional investment in the FTSE all-share
index over the same period has been included. The directors do not believe such
information would be of benefit to the users of financial statements.
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 and effect such
trades through Mansion House Securities Limited.
.
On behalf of the Board
Ian McLennan
Director
22 June 2009
TP70 2008 (I) VCT plc Financial Statements 2009
Corporate governance
The Board of TP70 2008 (I) VCT plc has considered the principles and
recommendations of the Association of Investment Companies Code of Corporate
Governance (AIC Code) by reference to the Association of Investment Companies
Corporate Governance Guide for Investment Companies (AIC Guide). The AIC Code,
as explained by the AIC Guide, addresses all the principles set out in Section 1
of the Combined Code, 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, by reference to the AIC Guide (which incorporates the Combined Code), will
provide better information to shareholders.
The Company is committed to maintaining high standards in corporate governance
and has complied with the recommendations of the AIC Code and the relevant
provisions of Section 1 of the Combined Code, 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, two of whom are
considered to be independent of the Company's investment manager (the exception
being Michael Sherry). During part of the financial year Ian McLennan, a
director of the Company, was engaged by Triple Point LLP which is a designated
partner in TPIM LLP, under a temporary consulting contract, to investigate a new
and separate business opportunity for them. 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. The Board has a formal schedule of matters specifically reserved for its
decision and the agreement between the Company and the Investment manager has
authority and 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 the appropriate dividend 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
- and approving shareholder communications.
The chairman leads the Board in the determination of its strategy and in the
achievement of its objectives. The chairman is responsible for organising the
business of the Board, ensuring its effectiveness and setting its agenda, and
has no involvement in the day to day business of the Company. He facilitates the
effective contribution of the directors and ensures that they receive accurate,
timely and clear information and that they communicate effectively with
shareholders.
The Company Secretary is responsible for advising the Board through the Chairman
on all governance matters. All of the directors have access to the advice and
services of the Company Secretary, who 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.
.
TP70 2008 (I) VCT plc Financial Statements 2009
Corporate governance (continued)
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 Combined Code that all directors are required to submit
themselves for re-election at least every three years.
The Board regularly reviews the independence of its members and is satisfied
that (with the exception of Michael Sherry who is beneficially interested in
TPIM LLP, the Company's investment manager) the Company's directors are
independent in character and judgement and there are no relationships or
circumstances which could affect their objectivity.
During the period ended 31 March 2009 the following meetings were held:
+------------------------+-----------+--------------+
| Directors present | 17 Full | 1 Audit |
| | Board | Committee |
| | Meetings | Meetings |
+------------------------+-----------+--------------+
| M G Sherry (Chairman) | 13 | 1 |
+------------------------+-----------+--------------+
| A J Stone | 5 | - |
+------------------------+-----------+--------------+
| S Acland | 3 | N/A |
+------------------------+-----------+--------------+
| I R J McLennan | 14 | 1 |
+------------------------+-----------+--------------+
Audit Committee
(Ian McLennan Chairman)
The Board has appointed an Audit Committee, comprising the full Board, 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 committee met once in the period ended 31
March 2009.
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 auditors of the Company, seeking to balance objectivity and value for
money.
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 relating to the
Company's financial performance;
* 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 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;
* 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.
TP70 2008 (I) VCT plc Financial Statements 2009
Corporate governance (continued)
The Board considers that the members of the committee are independent and
collectively have the skills and experience required to discharge their duties
effectively, and that the chairman of the committee meets the requirements of
the Combined Code 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 so would recommend this to the Board.
During the year ended 31 March 2009, the audit committee discharged its
responsibilities by:
* reviewing and approving the external auditor's terms of engagement and
remuneration;
* 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 LLP'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 LLP's compliance
procedures;
* reviewing the appropriateness of the Company's accounting policies;
* reviewing the Company's half-yearly results statements and interim management
statements prior to Board approval; and
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. The Board
regularly reviews financial results and investment performance with its
investment manager.
Triple Point Investment Management LLP is engaged to provide administrative
including accounting services and retains physical custody of the documents of
title relating to investments.
The Directors confirm that they have established a continuing process throughout
the year and up to the date of this report for identifying, evaluating and
managing the significant potential risks faced by the Company and have reviewed
the effectiveness of the internal control systems. As part of this process an
annual review of the internal control systems is carried out in accordance with
"Internal Controls: Guidance for Directors on the Combined Code", published by
the Institute of Chartered Accountants in England and Wales. This process has
been in place throughout and subsequent to the accounting period under review.
Risk management
TPIM LLP carries out management of liquid funds in accordance with the policy
guidelines laid down and regularly reviewed by the Board. In general the
guidelines require that uninvested cash will be held in money market funds. The
Company has no borrowing facilities nor has it entered into derivative
transactions.
Risk management is discussed in greater detail in the directors' report on
pages 12-13.
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
the foreseeable future. The directors therefore believe that it is appropriate
to continue to apply the going concern basis in preparing the financial
statements. There are no borrowings or banking facilities in place nor are they
anticipated to be required going forward.
TP70 2008 (I) VCT plc Financial Statements 2009
Corporate governance (continued)
.
Relations with shareholders
The Board recognise 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. Proxy voting figures for each resolution will be announced at the
annual general meeting. The Board will also respond to any written queries made
by shareholders during the course of the year and can be contacted at 4-5
Grosvenor Place, London, SW1X 7HJ. Alternatively, the Investment Manager may be
contacted on 020 7201 8989.
Compliance statement
The Listing Rules require the Board to report on compliance with the Combined
Code provisions throughout the accounting year. With the exception of the
limited items outlined below, the directors consider that the Company has
complied throughout the year under review with the provisions set out in Section
1 of the Combined Code of Corporate Governance published by the UK Listing
Authority in 2006:
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
(A5.1).
1. 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 (A1.3, A6.1).
3. The Company has a majority of independent directors, as defined by the
Combined Code issued in 2006. The Board considers that all directors have
sufficient experience to be able to exercise proper judgement within the meaning
of the Combined Code (A3.2).
1. The Company does not have a senior independent director. The Board does not
consider such an appointment appropriate for a Company such as TP70 2008 (I) VCT
plc (A3.3).
5. The Company does not conduct 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 (C3 .5).
6. As all the directors are non-executive, it is not considered appropriate
to appoint a Nomination or Remuneration Committee (A4.1 and B2.1).
TP70 2008 (I) VCT plc Financial Statements 2009
Directors' responsibility statement
The directors are responsible for preparing the annual 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 as adopted by the European Union (IFRS).
The financial statements are required by law to give a true and fair view
of the state of affairs of the Company at the end of the financial period and of
the return of the Company for that period.
In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable IFRS have been followed, subject to any material
departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The directors confirm that to the best of their knowledge the financial
statements for the period ended 31 March 2009 comply with the requirements set
out above and that suitable accounting policies, consistently applied and
supported by reasonable and prudent judgement, have been used in their
preparation. They also confirm that the annual report includes a fair review of
the business together with a description of the principal risks and
uncertainties faced by the Company.
The directors are responsible for keeping proper accounting records that
disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that its financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of the
Company and taking reasonable steps for the prevention and detection of fraud
and other irregularities.
In so far as the Directors are 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 to make
themselves aware of any relevant audit information and to establish that the
auditor is aware of that information.
Under applicable law and regulations, the directors are also responsible for
preparing a directors' report, directors' remuneration report and corporate
governance statement that comply with that law and those regulations.
The Company's financial statements are published on the TPIM LLP website,
www.triplepoint.co.uk. The maintenance and integrity of this website is the
responsibility of TPIM LLP and not of the Company. The work carried out by Grant
Thornton UK LLP as independent auditor of the Company does not involve
consideration of the maintenance and integrity of the website and accordingly
they accept no responsibility for any changes that have occurred to the
financial statements since they were initially presented on the website.
Visitors to the website should be aware that legislation in the United Kingdom
governing the preparation and dissemination of the financial statements may
differ from legislation in their jurisdiction.
TP70 2008 (I) VCT plc Financial Statements 2009
Directors' responsibility statement (continued)
To the best of my Knowledge:
- The financial statements prepared in accordance with the applicable set of
accounting standards give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company; and
- the Directors' 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 it faces.
On behalf of the Board
Ian McLennan
Director
22 June 2009
TP70 2008 (I) VCT plc Financial Statements 2009
Report of the independent auditor to the members of TP70 2008 (I) VCT plc
We have audited the financial statements of TP70 2008 (I) VCT plc for the period
ended 31 March 2009 which comprise the income statement, the balance sheet, the
statement of changes in shareholders' equity, the cash flow statement and notes
1 to 22. These financial statements have been prepared under the accounting
policies set out therein. We have also audited the information in the Directors'
Remuneration Report that is described as having been audited.
This report is made solely to the Company's members, as a body, in accordance
with Section 235 of the Companies Act 1985. 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 auditors' 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.
Respective responsibilities of Directors and auditors
The directors' responsibilities for preparing the Annual Report, the Directors'
Remuneration Report and the Financial Statements in accordance with United
Kingdom law and International Financial Reporting Standards (IFRS) as adopted by
the European Union are set out in the Statement of Directors' Responsibilities.
Our responsibility is to audit the financial statements and the part of the
Directors' Remuneration Report to be audited in accordance with relevant legal
and regulatory requirements and International Standards on Auditing (UK and
Ireland).
We report to you our opinion as to whether the financial statements give a true
and fair view and whether the financial statements and the part of the
Directors' Remuneration Report to be audited have been properly prepared in
accordance with the Companies Act 1985. We also report to you whether in our
opinion the information given in the Directors' Report is consistent with the
financial statements. The information given in the Directors' Report includes
that specific information presented in the Chairman's and Investment manager's
Reports that is cross referred from the Business Review section of the
Directors' Report.
In addition we report to you if, in our opinion, the Company has not kept
proper accounting records, if we have not received all the information and
explanations we require for our audit, or if information specified by law
regarding directors' remuneration and other transactions is not disclosed.
We review whether the Corporate Governance Statement reflects the Company's
compliance with the nine provisions of the 2006 Combined Code specified for our
review by the Listing Rules of the Financial Services Authority, and we report
if it does not. We are not required to consider whether the Board's statements
on internal control cover all risks and controls, or form an opinion on the
effectiveness of the Company's corporate governance procedures or its risk and
control procedures.
We read other information contained in the Annual Report and consider whether it
is consistent with the audited financial statements. The other information
comprises only the Financial Summary, the Chairman's Statement, details of
Directors, details of advisors, the Shareholder information, the Investment
Manager's Review, the Investment Portfolio, the review of the 10 Largest Venture
Capital Investments, the Directors' Report, the unaudited part of the Directors'
Remuneration Report and the Corporate Governance Statement. We consider the
implications for our report if we become aware of any apparent misstatements or
material inconsistencies with the financial statements. Our responsibilities do
not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing
(UK and Ireland) issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements and the part of the Directors'
Remuneration Report to be audited. It also includes an assessment of the
significant estimates and judgments made by the Directors in the preparation of
the financial statements, and of whether the accounting policies are appropriate
to the Company's circumstances, consistently applied and adequately disclosed.
TP70 2008 (I) VCT plc Financial Statements 2009
Report of independent auditor to the members of TP70 2008 (I) VCT
plc (continued)
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
and the part of the Directors' Remuneration Report to be audited are free from
material misstatement, whether caused by fraud or other irregularity or error.
In forming our opinion we also evaluated the overall adequacy of the
presentation of information in the financial statements and the part of the
Directors' Remuneration Report to be audited.
Opinion
In our opinion:
* the financial statements give a true and fair view, in accordance with IFRS as
adopted by the European Union as applied in accordance with the provisions of
the Companies Act 1985, of the state of the Company's affairs as at 31 March
2009 and of its result for the period then ended; and
* the financial statements and the part of the Directors' Remuneration Report to
be audited have been properly prepared in accordance with the Companies Act
1985; and
* the information given in the Directors' Report is consistent with the financial
statements.
GRANT THORNTON UK LLP
REGISTERED AUDITOR
CHARTERED ACCOUNTANTS
OXFORD
22 June 2009
TP70 2008 (I) VCT plc Financial Statements 2009
Income statement
for the period 7 November 2007 to 31 March 2009
+-------------------------+---------+---------+---------+----------+----------+
| | | Note | Rev. | Cap. | Total |
+-------------------------+---------+---------+---------+----------+----------+
| | | | GBP'000 | GBP'000 | GBP'000 |
+-------------------------+---------+---------+---------+----------+----------+
| | | | | | |
+-------------------------+---------+---------+---------+----------+----------+
| Investment income | 5 | 724 | - | 724 |
+-----------------------------------+---------+---------+----------+----------+
| Unrealised loss on investments | 11 | - | (1,134) | (1,134) |
+-----------------------------------+---------+---------+----------+----------+
| Derivative transaction | 11 | - | (1,126) | (1,126) |
+-----------------------------------+---------+---------+----------+----------+
| Investment return | | 724 | (2,260) | (1,536) |
+-----------------------------------+---------+---------+----------+----------+
| | | | | |
+-----------------------------------+---------+---------+----------+----------+
| Investment management fees | 6 | 93 | 279 | 372 |
+-----------------------------------+---------+---------+----------+----------+
| Financial and regulatory costs | | 13 | - | 13 |
+-----------------------------------+---------+---------+----------+----------+
| General administration | | 21 | - | 21 |
+-----------------------------------+---------+---------+----------+----------+
| Legal and professional fees | 7 | 35 | - | 35 |
+-----------------------------------+---------+---------+----------+----------+
| Directors' remuneration | 8 | 51 | - | 51 |
+-----------------------------------+---------+---------+----------+----------+
| Operating expenses | | 213 | 279 | 492 |
+-----------------------------------+---------+---------+----------+----------+
| Profit / (loss) before taxation | | 511 | (2,539) | (2,028) |
+-----------------------------------+---------+---------+----------+----------+
| Taxation | 9 | (107) | 59 | (48) |
+-----------------------------------+---------+---------+----------+----------+
| Profit / (loss) after taxation | | 404 | (2,480) | (2,076) |
+-----------------------------------+---------+---------+----------+----------+
| Profit / (loss) per share (basic | 10 | 1.97p | (12.07p) | (10.10p) |
| & diluted) | | | | |
+-------------------------+---------+---------+---------+----------+----------+
The total column of this statement is the income statement of this Company
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.
There are no recognised gains or losses other than those disclosed in the income
statement
All revenue and capital items in the above statement derive from continuing
operations
The accompanying notes are an integral part of this statement.
TP70 2008 (I) VCT plc Financial Statements 2009
Balance sheet
as at 31 March 2009
+---------------------------------------+----------+----------+----------+
| | Note | | GBP'000 |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| Non Current Assets | | | |
+---------------------------------------+----------+----------+----------+
| Financial assets at fair value | 11 | | 13,579 |
| through profit and loss | | | |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| Current assets: | | | |
+---------------------------------------+----------+----------+----------+
| Receivables | 13 | | 2,522 |
+---------------------------------------+----------+----------+----------+
| Cash and cash equivalents | | | 3,916 |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| | | | 6,438 |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| TOTAL ASSETS | | | 20,017 |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| Current Liabilities | | | |
+---------------------------------------+----------+----------+----------+
| Trade and other payables | 14 | | 37 |
+---------------------------------------+----------+----------+----------+
| Current taxation payable | 9 | | 48 |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| | | | 85 |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+ +----------+----------+
| NET ASSETS | | | 19,932 |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| EQUITY | | | |
+---------------------------------------+----------+----------+----------+
| Share capital | 15 | | 231 |
+---------------------------------------+----------+----------+----------+
| Special distributable reserve | 16 | | 21,777 |
+---------------------------------------+----------+----------+----------+
| Capital reserve | 16 | | (2,480) |
+---------------------------------------+----------+----------+----------+
| Revenue reserve | 16 | | 404 |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| Total equity | | | 19,932 |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| Net asset value per share (pence) | 17 | | 86.28p |
+---------------------------------------+----------+----------+----------+
The statements were approved by the directors and authorised for issue on 22
June 2009 and are signed on their behalf by:
Ian McLennan
Chairman
22 June 2009
The accompanying notes are an integral part of this statement.
TP70 2008 (I) VCT plc Financial Statements 2009
Statement of changes in shareholders' equity
for the period 7 November 2007 to 31 March 2009
+---------------------+---------+----------+------------+---------+---------+---------+
| | Issued | Share | Special | Capital | Revenue | Total |
| | Capital | Premium | Distrib'le | Reserve | Reserve | |
| | | | Reserve | | | |
+---------------------+---------+----------+------------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------------+---------+----------+------------+---------+---------+---------+
| | | | | | | |
+---------------------+---------+----------+------------+---------+---------+---------+
| Issue of share | 231 | 22,814 | - | - | - | 23,045 |
| capital | | | | | | |
+---------------------+---------+----------+------------+---------+---------+---------+
| Share issue costs | - | (1,037) | - | - | - | (1,037) |
+---------------------+---------+----------+------------+---------+---------+---------+
| Cancellation of | - | (21,777) | 21,777 | - | - | - |
| share premium | | | | | | |
+---------------------+---------+----------+------------+---------+---------+---------+
| Profit / (loss) for | - | - | | (2,480) | 404 | (2,076) |
| the period | | | | | | |
+---------------------+---------+----------+------------+---------+---------+---------+
| Balance at 31 March | 231 | - | 21,777 | (2,480) | 404 | 19,932 |
| 2009 | | | | | | |
+---------------------+---------+----------+------------+---------+---------+---------+
| | | | | | | |
+---------------------+---------+----------+------------+---------+---------+---------+
| | | | | | | |
+---------------------+---------+----------+------------+---------+---------+---------+
| Profit / (loss) for the period shown above is | | | |
| made up of: | | | |
+-------------------------------------------------------+---------+---------+---------+
| Recognised income for the | | | - | 724 | 724 |
| period | | | | | |
+-------------------------------+----------+------------+---------+---------+---------+
| Recognised expenses for the | | | (279) | (213) | (492) |
| period | | | | | |
+-------------------------------+----------+------------+---------+---------+---------+
| Taxation | | | | 59 | (107) | (48) |
+---------------------+---------+----------+------------+---------+---------+---------+
| Recognised changes in the fair value of | (2,260) | - | (2,260) |
| investments | | | |
+-------------------------------------------------------+---------+---------+---------+
| | | | | (2,480) | 404 | (2,076) |
+---------------------+---------+----------+------------+---------+---------+---------+
The accompanying notes are an integral part of this statement
TP70 2008 (I) VCT plc Financial Statements 2009
Cash flow statement
for the period 7 November 2007 to 31 March 2009
+---------------------------------------+----------+----+----------+
| | | | GBP'000 |
+---------------------------------------+----------+----+----------+
| Cash flows from operating activities | | | |
+---------------------------------------+----------+----+----------+
| Loss before taxation | | (2,028) |
+--------------------------------------------------+----+----------+
| Unrealised loss on investments | | 2,260 |
| | | |
+--------------------------------------------------+----+----------+
| Cashflow generated by operations | | | 232 |
+---------------------------------------+----------+----+----------+
| Increase in receivables | | | (2,522) |
+---------------------------------------+----------+----+----------+
| Increase in payables | | | 37 |
+---------------------------------------+----------+----+----------+
| Net cash absorbed from operating | | | (2,253) |
| activities | | | |
+---------------------------------------+----------+----+----------+
| | | | |
+---------------------------------------+----------+----+----------+
| Cash flow from investing activities | | | |
+---------------------------------------+----------+----+----------+
| Purchase of financial assets at fair | | | (15,839) |
| value through profit and loss account | | | |
+---------------------------------------+----------+----+----------+
| Net cash flows from investing | | | (15,839) |
| activities | | | |
+---------------------------------------+----------+----+----------+
| | | | |
+---------------------------------------+----------+----+----------+
| Cash flows from financing activities | | | |
+---------------------------------------+----------+----+----------+
| Proceeds from issue of share capital | | | 23,045 |
+---------------------------------------+----------+----+----------+
| Share issue expenses | | | (1,037) |
+---------------------------------------+----------+----+----------+
| Net cash flows from financing | | | 22,008 |
| activities | | | |
+---------------------------------------+----------+----+----------+
| Net increase in cash and cash | | | 3,916 |
| equivalents | | | |
+---------------------------------------+----------+----+----------+
| | | | |
+---------------------------------------+----------+----+----------+
| | | | |
+---------------------------------------+----------+----+----------+
| | | | |
+---------------------------------------+----------+----+----------+
| Reconciliation of net cash flow to | | | |
| movements in cash and cash | | | |
| equivalents | | | |
+---------------------------------------+----------+----+----------+
| Cash and cash equivalents at 31 March | | | 3,916 |
| 2009 | | | |
+---------------------------------------+----------+----+----------+
The accompanying notes are an integral part of this statement
TP70 2008 (I) VCT plc Financial Statements 2009
Notes to the financial statements
1. Corporate Information
The financial statements of the Company for the period from incorporation on 7
November 2007 to 31 March 2009 were authorised for issue in accordance with a
resolution of the directors on 22 June 2009.
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 its principal place of business, is 4-5
Grosvenor Place, London, SW1X 7HJ.
The Company's financial statements are presented in Pounds Sterling (GBP) which
is also the functional currency of the Company.
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 financial statements of the Company for the period to 31 March 2009 have
been prepared in accordance with accounting policies consistent with
International Financial Reporting Standards (IFRS) adopted for use in the
European Union and therefore comply with the articles of the EU (IAS) regulation
and with the statement of recommended practice ("SORP"), "Financial Statements
of Investment Trust Companies" 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 financial statements have 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.
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 directors do not believe that there are any further key judgements made in
applying accounting policies or estimates in respect of the financial
statements.
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 833 of the Companies Act 2006,
net capital returns may not be distributed by way of dividend.
TP70 2008 (I) VCT plc Financial Statements 2009
Notes to the financial statements (continued)
2. Basis of preparation and accounting policies (continued)
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
In accordance with the exception within IAS 28, "Investments in Associates",
those undertakings in which the Company holds more than 20% of the equity are
not regarded as associated undertakings. Therefore these investments are
measured at fair value in accordance with IAS 39, "Financial Instruments:
Recognition and Measurement".
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.
Taxation
Corporation tax payable is applied to profits chargeable to corporation tax, if
any, at the current rate in accordance with IAS12, "Income Taxes". The tax
effect of different items of income / gain and expenditure / loss is allocated
between capital and revenue on the same basis as the particular item to which it
arises using the Company's effective rate of tax for the accounting period.
TP70 2008 (I) VCT plc Financial Statements 2009
Notes to the financial statements (continued)
2. Basis of preparation and accounting policies (continued)
Taxation (Continued)
In accordance with IAS12, "deferred tax" is recognised in respect of all
temporary 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. These temporary differences are due to differences between the
carrying amount and the tax base of assets and liabilities using the Balance
Sheet method. The Directors have considered the requirements of IAS12 and do not
believe that any provision should be made.
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, comprising income swaps, 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. Issue costs associated
with the allotment of shares have been deducted from the share premium account
in accordance with IAS 32, "Financial Instruments: Presentation".
Cash
Cash represents cash on hand and demand deposits.
Receivables
Receivables are included at fair value on initial recognition and subsequently
at amortised cost. An impairment loss is recognised whenever the carrying amount
of an asset exceeds the receivable amount. The recoverable amount is only
determined when objective evidence of impairment exists.
Trade and other payables
Trade and other payables are included at fair value on initial recognition and
subsequently at amortised cost.
TP70 2008 (I) VCT plc Financial Statements 2009
Notes to the financial statements (continued)
2. Basis of preparation and accounting policies (continued)
Standards issued but not yet effective
The following new standards, amendments to standards and interpretations are not
yet effective for the period ended 31 March 2009, and have not been applied in
preparing these consolidated financial statements:
IAS 1 Presentation of Financial Statements (revised 2007) (effective 1 January
2009)
IAS 23 Borrowing Costs (revised 2007) (effective 1 January 2009)
Amendment to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation
of Financial Statements - Puttable Financial Instruments and Obligations Arising
on Liquidation (effective 1 January 2009)
IAS 27 Consolidated and Separate Financial Statements (Revised 2008) (effective
1 July 2009)
Amendment to IFRS 2 Share-based Payment - Vesting Conditions and Cancellations
(effective 1 January 2009)
Amendments to IFRS 1 First-time Adoption of International Financial Reporting
Standards and IAS 27 Consolidated and Separate Financial Statements - Costs of
Investment in a Subsidiary, Jointly Controlled Entity or Associate (effective 1
January 2009)
Amendment to IAS 39 Financial Instruments: Recognition and Measurement -
Eligible Hedged Items (effective 1 July 2009)
Amendment to IFRS 7 Financial Instruments: Disclosures - Improving Disclosures
About Financial Instruments (effective 1 January 2009)
Embedded Derivatives - Amendments to IAS 39 and IFRIC 9 (effective for annual
periods ending on or after 30 June 2009)
Improvements to IFRSs (effective 1 January 2009 other than certain amendments
effective 1 July 2009)
IFRS 3 Business Combinations (Revised 2008) (effective 1 July 2009)
IFRS 8 Operating Segments (effective 1 January 2009)
IFRIC 13 Customer Loyalty Programmes (IASB effective date 1 July 2008)
IFRIC 15 Agreements for the Construction of Real Estate (effective 1 January
2009)
IFRIC 16 Hedges of a Net Investment in a Foreign Operation (effective 1 October
2008)
IFRIC 17 Distributions of Non-cash Assets to Owners (effective 1 July 2009)
IFRIC 18 Transfers of Assets from Customers (effective prospectively for
transfers on or after 1 July 2009)
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.
3. Seasonality of operations
The Company's operations are not seasonal.
4. Segmental reporting
The Company currently has only one class of business, investment activity, and
its only geographical segment is the United Kingdom.
5.Investment Income
+-----------------------------------------------+----------+---------+
| | | GBP'000 |
+-----------------------------------------------+----------+---------+
| Income from short term investments | | 337 |
+-----------------------------------------------+----------+---------+
| Bank interest | | 387 |
+-----------------------------------------------+----------+---------+
| Total | | 724 |
+-----------------------------------------------+----------+---------+
TP70 2008 (I) VCT plc Financial Statements 2009
Notes to the financial statements (continued)
6. Investment Management Fees
TPIM LLP provides investment management and administration services to the
Company under an Investment Management Agreement effective 6 February 2008 which
runs until 6 February 2013 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
payable quarterly in arrears. Should such notice be given the Investment manager
would continue to perform its duties under the investment management agreement
and to receive its management fee during the notice period.
7. Legal and professional fees
Legal and professional fees include the following remuneration paid to the
Group's auditor, Grant Thornton UK LLP:
+-----------------------------------------------+----------+---------+
| | | GBP'000 |
+-----------------------------------------------+----------+---------+
| Fees payable to the Company's auditor for the | | 12 |
| audit of the Company and Group accounts | | |
+-----------------------------------------------+----------+---------+
| Other services supplied pursuant to such | | 1 |
| legislation | | |
+-----------------------------------------------+----------+---------+
| Other services related to taxation | | - |
+-----------------------------------------------+----------+---------+
| | | 13 |
+-----------------------------------------------+----------+---------+
8.Directors' Remuneration
+-----------------------------------------------+----------+---------+
| | | GBP'000 |
+-----------------------------------------------+----------+---------+
| M G Sherry (Chairman) | | 16 |
+-----------------------------------------------+----------+---------+
| A J Stone | | 16 |
+-----------------------------------------------+----------+---------+
| I R J McLennan | | 19 |
+-----------------------------------------------+----------+---------+
| Total | | 51 |
+-----------------------------------------------+----------+---------+
None of the directors received any other remuneration or benefit from the
Company during the period, receiving only fees in the form of short term
employee benefits. The Company has no employees other than the non-executive
directors. The average number of non-executive directors in the year was 3.
9.Tax on return on ordinary activities
+-----------------------------------------------+----------+---------+
| | | GBP'000 |
+-----------------------------------------------+----------+---------+
| Loss on ordinary activities before tax | | (2,028) |
+-----------------------------------------------+----------+---------+
| Add back capital losses | | 2,260 |
+-----------------------------------------------+----------+---------+
| Taxable income | | 232 |
+-----------------------------------------------+----------+---------+
| UK corporation tax at 21% | | (48) |
+-----------------------------------------------+----------+---------+
The directors are not aware of any matters which may affect the tax charges in
future periods.
Approved venture capital trusts are exempt from tax on capital gains within the
Company. Since the directors intend that the Company will continue to conduct
its affairs so as to maintain its approval as a venture capital trust, no
current or deferred tax will be provided in respect of any capital gains or
losses arising on the revaluation or disposal of investments.
TP70 2008 (I) VCT plc Financial Statements 2009
Notes to the financial statements (continued)
10.Loss per share
The loss per share is based on a loss from ordinary activities after tax of
GBP2,076,000 and on the weighted average number of shares in issue during the
period of 20,565,089.
There are no potentially dilutive capital instruments in issue and, therefore,
no diluted return per share figures are included in these financial statements.
11.Financial assets at fair value through profit and loss
+-----------------------------------------------+----------+----------------+
| | Unquoted Investments |
+-----------------------------------------------+---------------------------+
| | | GBP'000 |
+-----------------------------------------------+----------+----------------+
| Purchases at cost | | 15,839 |
+-----------------------------------------------+----------+----------------+
| Unrealised loss on revaluation | | (2,260) |
+-----------------------------------------------+----------+----------------+
| Valuation as at 31 March 2009 | | 13,579 |
+-----------------------------------------------+----------+----------------+
| Cost as at 31 March 2009 | | 15,839 |
+-----------------------------------------------+----------+----------------+
| Unrealised loss at 31 March 2009 | | (2,260) |
+-----------------------------------------------+----------+----------------+
The Company holds 50% of the issued share capital of Lorngreen Ltd, but is
accounting for it in accordance with IAS 28, "investments in associates", which
provides an exception for VCTs thereby allowing this not to be treated as an
associated undertaking.
Included in the above is a deposit of GBP3,292,000 with Julius Baer, which is
the subject of the derivative transaction described in note 12. Due to the
nature of this investment the deposit held by Julius Baer is an integral part of
the transaction, therefore the directors consider that it is appropriate to
disclose this as part of the investment portfolio.
Further details of these investments are provided in the Investment portfolio
review.
All investments are designated as fair value through 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 are or losses on these items are
treated as unrealised.
12. Derivative transaction
The Company has made a payment of GBP3,292,000 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 on three months' notice before the period
expires. The loss on this investment in the period is deemed to be a capital
item and is therefore included in the capital column of the income statement.
13.Receivables
+-----------------------------------------------+----------+---------+
| | | GBP'000 |
+-----------------------------------------------+----------+---------+
| Receivables | | 2,500 |
+-----------------------------------------------+----------+---------+
| Prepayments and accrued income | | 22 |
+-----------------------------------------------+----------+---------+
| Total | | 2,522 |
+-----------------------------------------------+----------+---------+
Other receivables comprise a loan advanced to TP70 VCT plc, a venture capital
trust which is under the management of TPIM LLP. The loan carries interest at
LIBOR + 3% and was repaid in full following the period end.
TP70 2008 (I) VCT plc Financial Statements 2009
Notes to the financial statements (continued)
14.Trade and other payables
+-----------------------------------------------+----------+---------+
| | | GBP'000 |
+-----------------------------------------------+----------+---------+
| Trade payables | | 3 |
+-----------------------------------------------+----------+---------+
| Other payables | | 7 |
+-----------------------------------------------+----------+---------+
| Accrued expenses | | 27 |
+-----------------------------------------------+----------+---------+
| Total | | 37 |
+-----------------------------------------------+----------+---------+
15. Share capital
+--------------------------------------+-------------+---------------+
| | Authorised | Issued & |
| | | Fully Paid |
+--------------------------------------+-------------+---------------+
| Ordinary Shares of 1p | | |
+--------------------------------------+-------------+---------------+
| No. Of Shares | 50,000,000 | 23,099,898 |
+--------------------------------------+-------------+---------------+
| Par Value GBP'000 | 500 | 231 |
+--------------------------------------+-------------+---------------+
During the period the Company issued 23,099,896 ordinary shares of 1p each at a
price of between 99p and GBP1 each and 2 ordinary shares at par.
16. Reserves
+--------------------------+-----------+---------------+-----------+-----------+
| | Share | Special | Capital | Revenue |
| | Premium | Distributable | Reserve | Reserve |
| | | Reserve | | |
+--------------------------+-----------+---------------+-----------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+-----------+---------------+-----------+-----------+
| Issue of share capital | 22,814 | - | - | - |
+--------------------------+-----------+---------------+-----------+-----------+
| Share issue costs | (1,037) | - | - | - |
+--------------------------+-----------+---------------+-----------+-----------+
| Cancellation of share | (21,777) | 21,777 | - | - |
| premium | | | | |
+--------------------------+-----------+---------------+-----------+-----------+
| Profit / (loss) for the | - | - | (2,480) | 404 |
| period | | | | |
+--------------------------+-----------+---------------+-----------+-----------+
| Balance at 31 March 2009 | - | 21,777 | (2,480) | 404 |
+--------------------------+-----------+---------------+-----------+-----------+
Following the Company's petition, the Companies Court ordered that the special
resolution passed by the shareholders to effect the cancellation of the share
premium account be confirmed. The order relating to the cancellation was duly
registered by the Registrar of Companies on 16 December 2008. The purpose of the
cancellation was to create a reserve which will be capable of being used by the
Company for the purpose of making repurchases of its own shares in the market.
17. Net asset value per share
The calculation of net asset value per share is based on Net Assets
of GBP19,932,000 divided by the 23,099,898 Ordinary Shares in issue.
18. Financial instruments and management of risk
The Company's financial instruments comprise equity and fixed-interest
investments, cash balances and liquid resources including debtors and creditors.
The Company holds financial assets in accordance with its investment policy of
investing in a portfolio of unquoted companies whilst holding a proportion of
its assets in cash or near-cash investments in order to provide a reserve of
liquidity.
TP70 2008 (I) VCT plc Financial Statements 2009
Notes to the financial statements (continued)
18. Financial instruments and management of risk (continued)
Fixed asset investments (note 11) are valued at fair value. Unquoted investments
are carried at fair value 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.
In carrying on its investment activities, the Company is exposed to various
types of risk associated in the financial instruments and markets in which it
invests. The most significant types of financial risk facing the Company are
market risk, interest rate risk, credit risk and liquidity risk. The Company's
approach to managing these risks is set out below together with a description of
the nature and amount of the financial instruments held at the balance sheet
date.
Market risk
The Company's strategy for managing investment risk is determined with regard to
the Company's investment objectives, as outlined in the investment manager's
review on page 6. The management of market risk is part of the investment
management process and is a central feature of venture capital investment with
the Company being most exposed to price risk within this risk area. The
Company's portfolio is managed in accordance with the policies and procedures
described in the corporate governance statement on pages 18 to 21, having regard
to the possible effects of adverse price movements, with the objective of
maximising overall returns to shareholders. Investments in unquoted companies,
by their nature, usually involve a higher degree of risk than investments in
companies quoted on a recognised stock exchange, though the risk can be
mitigated to a certain extent by diversifying the portfolio across business
sectors and asset classes. The overall disposition of the Company's assets is
monitored by the Board on a quarterly basis.
Details of the Company's investment portfolio at the balance sheet date,
including an analysis of investments between debt and equity instruments, is
given on pages 7-8.
46.4% by value of the Company's net assets comprise investments in unquoted
companies held at fair value. The assets are being held at cost, being the
directors' best approximation of fair value at the year end. This is in
accordance with venture capital industry guidelines. A 5% overall increase in
the valuation of the unquoted investments at 31 March 2009 would have increased
net assets and the total return for the period by GBP462,000: an equivalent
change in the opposite direction would have reduced net assets and the total
return for the period by the same amount
Interest rate risk
Some of the Company's financial assets are interest-bearing, of which some are
at fixed rates and some variable. As a result, the Company is exposed to fair
value interest rate risk due to fluctuations in the prevailing levels of market
interest rates.
a) Fixed rate investments
The table below summarises weighted average effective interest rates for the
Company's fixed rate interest-bearing financial instruments:
+------------------------------+-----------+-----------+-----------+
| | | | Weighted |
+------------------------------+-----------+-----------+-----------+
| | | Weighted | average |
+------------------------------+-----------+-----------+-----------+
| | Total | average | period |
| | | | for |
+------------------------------+-----------+-----------+-----------+
| | fixed | interest | which |
| | rate | | rate |
+------------------------------+-----------+-----------+-----------+
| | portfolio | rate | is fixed |
+------------------------------+-----------+-----------+-----------+
| | GBP'000s | % | Years |
+------------------------------+-----------+-----------+-----------+
| Fixed rate investments in | 6,368 | 7.10 | 4.96 |
| qualifying unquoted | | | |
| companies | | | |
+------------------------------+-----------+-----------+-----------+
Due to the relatively short period to maturity of the fixed rate investments
held within the portfolio, it is considered that an increase or decrease of 25
basis points in interest rates as at the reporting date would not have had a
significant effect on the Company's net assets or total return for the period.
TP70 2008 (I) VCT plc Financial Statements 2009
Notes to the financial statements (continued)
18.Financial instruments and management of risk (continued)
b) Floating rate investments
The Company's floating rate investments comprise investments in money market
funds and cash held in interest-bearing deposit accounts. The benchmark rate
which determines the rate of interest receivable on such investments is the UK
bank base rate, which was 0.5% at 31 March 2009. The amounts held in floating
rate investments at the balance sheet date were as follows:
+------------------------------+-----------+-----------+-----------+
| | | | GBP'000 |
+------------------------------+-----------+-----------+-----------+
| Investments in money market funds | - |
+------------------------------------------------------+-----------+
| Interest bearing deposit accounts | 3,916 |
+------------------------------------------------------+-----------+
| | | | 3,916 |
+------------------------------+-----------+-----------+-----------+
Due to the relatively small proportion of funds invested in floating rate
securities the fair value interest rate risk is not considered to be
significant.
Credit risk
Credit risk is the risk that a counterparty to a financial instrument 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 values of fixed rate loans and interest bearing
deposits represent the maximum credit risk exposure at the balance sheet date.
At 31 March 2009 the Company's financial assets exposed to credit risk comprised
the following:
+------------------------------+-----------+-----------+-----------+
| | | | GBP'000 |
+------------------------------+-----------+-----------+-----------+
| Fixed rate investments in qualifying unquoted | 6,368 |
| companies | |
+------------------------------------------------------+-----------+
| Fixed rate investments in unqualifying unquoted | 660 |
| companies | |
+------------------------------------------------------+-----------+
| Interest bearing deposit accounts | 3,916 |
+------------------------------------------------------+-----------+
| | | | 10,944 |
+------------------------------+-----------+-----------+-----------+
Credit risk relating to loans to unquoted companies is considered to be part of
market risk.
The Company's interest-bearing deposit accounts are maintained with major UK
clearing banks.
There were no significant concentrations of credit risks to counterparties at 31
March 2009. No individual investment exceeded 10.9% of the Company's net assets
at 31 March 2009, thereby assuring that the company had appropriately spread the
counterparty risk.
At the period end there were no assets that were considered to be either post
due or impaired.
Liquidity risk
The Company's financial assets include investments in unquoted equity securities
which are not traded on a recognised stock exchange and which generally may be
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, or to respond to specific events
such as a deterioration in the creditworthiness of any particular issuer.
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 on a quarterly basis by the
Board.
The Company maintains sufficient investments in cash and readily realisable
securities to pay accounts payable and accrued expenses. At 31 March 2009 cash
and readily realisable securities totalled GBP3,916,000.
TP70 2008 (I) VCT plc Financial Statements 2009
Notes to the financial statements (continued)
19. Related party transactions
Michael Sherry, chairman of the Company, is an equity partner in Triple Point
LLP which is a designated partner in TPIM LLP. During the year TPIM LLP provided
investment management and administration services to the Company amounting to
GBP372,000.
During part of the financial year Ian McLennan, a director of the Company, was
engaged by Triple Point LLP which is a designated partner in TPIM LLP, under a
temporary consulting contract, to investigate a new and separate business
opportunity for them.
During the period the Company has made available a loan facility of GBP5 million
to TP70 VCT plc, a venture capital trust which is also under the management of
TPIM LLP. The loan carries interest at LIBOR + 3%. At 31 March 2009 GBP2,500,000
had been drawn down under this facility. The loan was repaid in full following
the period end.
20. Contingent liabilities
There were no contingent liabilities at 31 March 2009.
21. Capital commitments
There were no capital commitments at 31 March 2009.
22. Post balance sheet events
The Board has resolved to pay a first dividend of GBP404,000 out of the revenue
profits to be paid to shareholders on the register at 17 July 2009 in respect of
the period ended 31 March 2009, equivalent to 1.75 p per share.
TP70 2008 (I) VCT plc Financial Statements 2009
Notice of Annual General Meeting
NOTICE is hereby given that the second Annual General Meeting of TP70 2008 (I)
VCT plc will be held at 4-5 Grosvenor Place, London SW1X 7HJ at 10am on 23 July
2009 for the following purposes:
Ordinary Business
1. To receive, consider and adopt the Report of the directors and Financial
Statements for the period ended 31 March 2009. (Ordinary Resolution)
1. To approve the directors' remuneration report for the period ended 31 March
2009. (Ordinary Resolution)
1. To re-elect Mr Simon Acland as a director of the Company. (Ordinary resolution)
1. To re-appoint Grant Thornton UK LLP as auditor and that the directors be
authorised to agree their remuneration. (Ordinary Resolution)
5. "That the Directors be generally and unconditionally authorised for the
purposes of Section 80 of the Companies Act 1985 ("the Act") to exercise all the
powers of the Company to allot relevant securities up to an aggregate nominal
amount of the authorised but as yet unissued share capital of the Company from
time to time provided that this authority shall expire at the conclusion of the
next Annual General Meeting of the Company or 15 months following the date of
the passing of this Resolution, whichever is the first to occur, save that the
Company may before such expiry make an offer or agreement which would or might
require relevant securities to be allotted after such expiry and the Directors
may allot relevant securities pursuant to such offer or agreement
notwithstanding that the authority conferred hereby has expired, and the
expression "relevant securities" and reference to the allotment of relevant
securities shall bear the same respective meanings as in Section 80 of the Act."
(Ordinary Resolution)
6. "That the Directors be and they are hereby empowered pursuant to Section
95 of the Act to allot equity securities wholly for cash pursuant to the
authority conferred on them as if Section 89(1) of the Act did not apply to any
such allotment, provided that this power shall be limited to the allotment of
equity securities in connection with or pursuant to either, (i) an offer by way
of rights, open offer or other pre-emptive offer to the holders of shares in the
Company and other persons entitled to participate therein in proportion (as
nearly as may be practicable) to their respective holdings of such shares, but
subject to such exclusions or other arrangements as the Directors may deem
necessary or expedient in relation to fractional entitlement or any legal or
practical problems under the laws of any territory, or the requirements of any
regulatory body or stock exchange, and/or, (ii) an offer of up to an aggregate
nominal value of 10% of the issued share capital of the Company at any one time
as at the date of such allotment, and in either case such power shall expire at
the conclusion of the next Annual General Meeting of the Company or 15 months
following the passing of this Resolution, whichever is the first to occur, save
that the Company may, before such expiry make an offer or agreement which would
or might require equity securities to be allotted after such expiry and the
Directors may allot equity securities pursuant to any such offer or agreement
notwithstanding that the power conferred hereby has expired, (Special
Resolution)
7. "That the Company generally and unconditionally authorised, pursuant to
Section 166 of the Act, to make market purchases (as defined in Section 163 of
the Act) of up to 10% of the Company's issued ordinary shares on such terms and
in such manner as the Directors of the Company may from time to time determine,
provided that the amount paid for each share (exclusive of expenses) shall not
be more than 5% above the average of the middle market quotation for the
Company's Ordinary Shares as derived from the Daily Official List of London
Stock Exchange Plc for the 5 business days before the purchase is made, and in
any event not less than 1 penny per Ordinary Share; and the authority herein
contained shall expire at the conclusion of the next Annual General Meeting of
the Company or 15 months following the date of the passing of this Resolution,
whichever is the first to occur, 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 pursuant of such contract as if the authority hereby
conferred had not expired." (Special Resolution)
+--------------+--------+
| By | 22 |
| Order | June |
| of the | 2009 |
| Board | |
| Peter | |
| Hargreaves | |
| Company | |
| Secretary | |
| Registered | |
| Office: | |
| 4-5 | |
| Grosvenor | |
| Place | |
| London, SW1X | |
| 7HJ | |
+--------------+--------+
Notes:
* 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.
* 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 completed and
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 or she so wishes.
* 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, and the
register of Directors' interests in shares of the Company under section 809 of
the Companies Act 2006, will be available for inspection at the registered offer
of the Company during usual business hours on any week day (Saturdays 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 2009 Annual General Meeting of TP70 2008 (I) VCT plc
I/We..........................................................................................................................................
BLOCK CAPITALS PLEASE - Name in which shares registered
of.............................................................................................................................................
hereby appoint...........................................................................................................................
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 23 July, 2009, notice of which was sent to shareholders with the Directors'
report and the financial statements for the period ended 31 March 2009, 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 financial | | | |
| | statements for the period ended 31 March 2009 | | | |
+----+-------------------------------------------------------+--------+---------+----------+
| | | | | |
+----+-------------------------------------------------------+--------+---------+----------+
| 2 | To approve the directors' remuneration report | | | |
+----+-------------------------------------------------------+--------+---------+----------+
| | | | | |
+----+-------------------------------------------------------+--------+---------+----------+
| 3 | To re-elect Mr Simon Acland as a director | | | |
+----+-------------------------------------------------------+--------+---------+----------+
| | | | | |
+----+-------------------------------------------------------+--------+---------+----------+
| 4 | To re-appoint Grant Thornton UK LLP as auditor and | | | |
| | authorise the directors to agree their remuneration | | | |
+----+-------------------------------------------------------+--------+---------+----------+
| | | | | |
+----+-------------------------------------------------------+--------+---------+----------+
| 5 | To authorise the directors to allot shares under | | | |
| | section 80 (Ordinary Resolution) | | | |
+----+-------------------------------------------------------+--------+---------+----------+
| | | | | |
+----+-------------------------------------------------------+--------+---------+----------+
| 6 | To disapply Section 89(1) of the Companies Act 1985 | | | |
| | and to allot shares on a non rights issue basis | | | |
| | (Special Resolution) | | | |
+----+-------------------------------------------------------+--------+---------+----------+
| | | | | |
+----+-------------------------------------------------------+--------+---------+----------+
| 7 | To authorise the directors to make market purchases | | | |
| | of the Company's own shares (special resolution) | | | |
+----+-------------------------------------------------------+--------+---------+----------+
Signed: Dated: ..2009
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.
1. Use of the proxy form does not preclude a member from attending and voting in
person.
1. 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.
1. 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.
1. To be valid, the proxy form must be completed and received by the Registrars at
Neville House, 18 Laurel Lane, Halesowen, and West Midlands B63 3DA no later
than 48 hours before the commencement of the meeting.
Third fold and tuck in
Neville Registrars Limited
Registrars for TP70 2008 (I) VCT plc
Neville House
18 Laurel Lane
Halesowen
West Midlands B63 3DA
Second f
This information is provided by RNS
The company news service from the London Stock Exchange
END
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