We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Triple Point | LSE:TPV1 | London | Ordinary Share | GB00B29KPN29 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 50.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMTPV1
RNS Number : 7837A
Triple Point Income VCT PLC
09 June 2016
Triple Point Income VCT plc
Final Results
Triple Point Income VCT plc managed by Triple Point Investment Management LLP today announces the final results for the year ended 31 March 2016.
These results were approved by the Board of Directors on 9 June 2016.
You may view the Annual Report in due course on the Triple Point website www.triplepoint.co.uk
Financial Summary
Hot Features
Premium
Year ended 31 March
Year ended 31 March 2016 2015
Ord. C D Ord. A C D
Shares A Shares Shares Shares Total Shares Shares Shares Shares Total
Net assets
GBP'000 13,175 2,118 14,118 13,875 43,286 16,649 4,465 13,409 5,198 39,721
Net asset
value per
share 67.69p 41.28p 105.03p 101.26p n/a 85.49p 87.01p 99.76p 98.15p n/a
------------------ --------- --------- -------- -------- ------- ------- -------- ------- -------- -------
Net profit/(loss)
before
tax GBP'000 729 (39) 807 377 1,874 1,327 576 127 (9) 2,021
Dividend
paid (21.45p) (45.00p) - - n/a - (6.20p) - - n/a
Earnings/(loss)
per share 3.64p (0.72p) 5.27p 2.19p n/a 6.34p 11.06p 0.78p (0.72p) n/a
------------------ --------- --------- -------- -------- ------- ------- -------- ------- -------- -------
Triple Point Income VCT plc ("the Company") is a Venture Capital Trust ("VCT"). The Investment Manager is Triple Point Investment Management LLP ("TPIM" or "Triple Point").
-- Ordinary Shares: these are held by the shareholders that were in the Company prior to the merger on 21 November 2012; and by former TP70 2008(II) VCT plc shareholders; and shares that were held by the B Ordinary Shareholders which were converted to Ordinary Shares on 31 October 2013.
-- A Ordinary Shares: these are held by the former TP12(I) VCT plc shareholders prior to the merger on 21 November 2012.
-- C Ordinary Shares: these are the shares issued in the Offer that closed on 27 May 2014. A total of GBP14.0 million was raised and 13,441,438 C Shares were issued.
-- D Ordinary Shares: these are the shares issued in the Offer that closed on 30 April 2015. A total of GBP14.3 million was raised and 13,701,636 D Shares were issued.
The Strategic Report on pages 2 to 20, the Directors' Report on pages 21 to 30 and the Directors' Remuneration Report on pages 31 to 33 have each been drawn up in accordance with the requirements of English law and liability in respect thereof is also governed by English law. In particular, the responsibility of the Directors for these reports is owed solely to Triple Point Income VCT plc.
The Directors submit to the members their Annual Report and Financial Statements for the Company for the year ended 31 March 2016.
Strategic Report
The Strategic Report, on pages 2 to 20, has been prepared in accordance with the requirements of section 414c of the Companies Act 2006. Its purpose is to inform the members of the Company and help them to assess how the Directors have performed their duty to promote the success of the Company, in accordance with section 172 of the Companies Act 2006.
Chairman's Statement
I am writing to present the Financial Statements for Triple Point Income VCT plc ("the Company") for the year ended 31 March 2016. During the year the Company has made progress with investing funds raised through last year's D Share Class Offer.
Investment Portfolio
The Company's funds at 31 March 2016 are 98% invested in a portfolio of VCT qualifying and non-qualifying unquoted investments. It continues to meet the condition that 70% of funds must be invested in VCT qualifying investments within three years. At 31 March 2016 qualifying investments represented 74% of the total Investment Portfolio and 84.61% of the funds that are required to meet that condition.
The Investment Manager's review on pages 11 to 13 gives an update on the portfolio which includes companies in the renewable electricity and cinema digitisation sectors.
Ordinary Share Class and A Share Class
In June 2015, the Ordinary share class and the A share class disposed of their portfolios of investments in solar PV companies for proceeds consistent with the higher valuation attributed to the companies in the prior year.
In June 2015, the Company completed the sale of its investments in three Anaerobic Digestion companies for GBP4.8 million resulting in an up-lift to the valuation of GBP0.6 million equivalent to 2.75p per Ordinary Share and 1.76p per A Share.
Ordinary Share Class
Part of the proceeds of the disposals referred to above was re-invested with GBP1.6 million invested into a company in the hydro electric power sector, GBP2.2 million invested into a company in energy generation and infrastructure and GBP0.5 million into an SME lending company. The remainder of the proceeds were returned to shareholders in the form of a dividend of GBP3,203,618 equivalent to 16.45p per share paid on 18 December 2015. Another dividend was paid on 24 July 2015 of 5p per share, equivalent to GBP973,744.
The Ordinary Share Class has recorded a profit over the year of 3.64p per share. As at 31 March 2016 the net asset value stood at 67.69p per share. Adding back the total dividends of 25.56p paid to Ordinary Class Shareholders takes the total return including net asset value to 93.25p per share, which compares to a weighted average share price at acquisition or conversion of 83.6p.
A Share Class
Two dividends were paid to the A Class Shareholders during the period. On 24 July 2015 GBP256,568 was paid, equivalent to 5p per share and on 21 August 2015 GBP2,052,541 was paid, equivalent to 40p per share. The second dividend was a return to shareholders of funds received from the disposals.
The A Share Class has recorded a small loss over the year of 0.72p per share. After the above realisations the A Share Fund has a portfolio of three investments, two in landfill gas and one in an SME Lending company made in January 2016. The loss reported is mainly as a result of the downward valuation of an investment in a landfill gas company which is described on page 11. As at 31 March 2016 the net asset value stood at 41.28p per share. Adding back the dividends paid to A Class Shareholders of 56.2p per share takes the total return including net asset value to 97.48p per share, which compares to a weighted average share price at conversion of 86.4p.
C Share Class
The C Share Class has invested GBP10.4 million directly into companies in the hydro electric power sector and GBP3.7 million into companies providing funding to the hydro electric power sector.
The C Share Fund has recorded a profit over the year of 5.27p per share. At 31 March 2016 the net asset value stood at 105.03p per share.
The Board has resolved to pay the first dividend to C Class Shareholders of GBP672,072 equal to 5p per share which will be paid on 8 July 2016 to shareholders on the register on 24 June 2016.
D Share Class
Last year shareholders approved the proposal for a new share class. The Offer closed on 30 April 2015 with a total of 13,701,636 D Shares being issued and GBP14.3 million of funds raised.
The D Share Class has invested GBP11.1 million directly into companies in the hydro electric power sector, GBP1.2 million into companies providing funding in the hydro electric power sector and GBP0.8 million into an SME funding company.
The D Share Fund has recorded a profit over the year of 2.19p per share. At 31 March 2016 the net asset value stood at 101.26p per share.
Risks
The Board believes that the principal risks currently facing the Company are:
-- investment risk associated with holding VCT qualifying investments; -- risk of failure to maintain approval as a VCT; -- risk of ability to return funds to investors in line with expectations.
The Board and the Investment Manager continue to work to minimise the likelihood and the potential impact of these risks.
Outlook
The coming year will see the Company and the Investment Manager continue to monitor the performance of the Ordinary and A Share portfolios and where appropriate seeking exits.
The Company's focus on the C and D Share Class investments in the hydro electric power sector will be on the operation of completed sites and progress of those under construction.
If you have any questions or comments, please do not hesitate to contact Triple Point on 020 7201 8989.
David Frank
Chairman
9 June 2016
Strategic Report - Company Strategy and Business Model
The Directors assess the Company's success in meeting its objectives in relation to returns, stability, VCT qualification and, ultimately, exit.
Performance Update
Although each Share Class follows the same investment strategy overall the Company's execution of the strategy varies for each Share Class and therefore the returns may vary.
The Company targets returns for the Ordinary Share Class of 8% to 10% pa including the benefit of tax relief. At a weighted average share price at acquisition or conversion of 83.6p using an 8% return this is broadly equivalent to a total target return to investors in 2018 of 90.4p. This compares to a net asset value per share for the Ordinary Share Class at 31 March 2016 of 67.69p which together with dividend payments of 25.56p, brings the total return at 31 March 2016 to 93.25p. The Ordinary Share Class has exceeded the minimum targeted return.
The net asset value per share for the A Share Class at 31 March 2016 stood at 41.28p which together with a dividend payment of 56.20p brings the total return at 31 March 2016 to 97.48p. At launch TP12 (I) VCT plc targeted a return of 9% to 12%. On a weighted average share price at conversion of 86.4p using a 9% return this broadly equates to a total target return to investors in 2017 of 97.6p.
The net asset value per share for the C Share Class at 31 March 2016 stood at 105.03p. The target for the C Share Class is to pay dividends of 5p per share from 2016 for four years, followed by a partial realisation targeted to be 50p after five years, and an ongoing dividend yield of 7% per annum of net asset value for a further nine years. The Company is meeting these objectives and declaring its first dividend to be paid this year.
The net asset value per share for the D Share Class at 31 March 2016 stood at 101.26p. The target for the D Share Class is to pay dividends of 5p per share from 2017 for four years, followed by a partial realisation targeted to be 50p after five years, and an ongoing dividend yield of 7% per annum of net asset value for a further nine years.
The Board and the Investment Manager are both committed to ensuring that returns on the investment portfolio are optimised and that the VCT remains fully invested and continues to be managed in line with the Company's investment strategy and risk profile.
The Company's objective has been to build a portfolio of investments which target capital preservation. The Company's qualifying and non-qualifying investments are meeting this objective overall.
A review of the performance of the Company's investments during the financial year, the position of the Company at the year end and the outlook for the coming year is contained within the Chairman's statement on pages 2 to 3 and the Investment Manager's Review on pages 11 to 13.
Dividend Policy
Generally, a VCT must distribute by way of dividend such amounts to ensure that it retains not more than 15% of its income from shares and securities. The Directors aim to maximise tax free distributions to shareholders of income or realised gains. It is envisaged that the Company will distribute most of its net income each year by way of dividend, subject to liquidity.
Investment Policy
The Company's Investment Policy as set out in the prospectuses circulated to shareholders is set out below.
At least 70% of the Company's net assets will be invested in unquoted companies. The remaining assets will be exposed either to (i) cash or similar cash-based liquid investments or (ii) investments originated in line with the Company's VCT qualifying investment policy.
To comply with VCT Rules, the Company seeks to acquire (and subsequently maintain) a portfolio of VCT qualifying company investments equivalent to a minimum of 70% of the value of its investments over a period not exceeding three years. These VCT qualifying investments are typically in investments ranging between GBP500,000 and GBP5,000,000 and encompass businesses with cash generative ability, arising from a niche position or the market in which they operate. No single investment by the Company represents more than 15% of the aggregate value of all the investments of the Company at the time any investment is made or added to. It is possible that investments may be made in more than one company in the same sector.
In seeking to achieve its objectives, the Company invests on the basis of the following conservative principles:
(a) TPIM seeks investments where robust due diligence has been undertaken;
(b) TPIM favours investments where there is a high level of access to material financial and other information on an ongoing basis (as a condition for investing in a company, the Company may nominate directors to the boards of investee companies);
(c) TPIM seeks to minimise the risk of losses when investing through careful analysis of the collateral available to investee companies;
(d) TPIM targets investments where there is a strong relationship with the key decision makers.
Qualifying Investments
The Company pursues investments in a range of sectors that meet its investment criteria. The objective is to build a diversified portfolio of unquoted companies which are cash generative and, therefore, capable of producing predictable income for the Company prior to their realisation or exit.
Although investments may be sought in a range of diverse industries, the Company's portfolio will comprise companies with certain characteristics, for example clear commercial and financial objectives, strong contractual customer relationships and, where possible, tangible assets with value. The Company focuses on identifying businesses typically with predictable revenues from a high-quality customer base. Businesses with assets providing valuable security may also be considered. The objective is to reduce the risk of capital value volatility by selecting businesses with stable valuation characteristics and to provide investors with an attractive income stream.
The criteria against which investment targets are assessed will include the following:
(a) an attractive valuation at the time of the investment; (b) managed risk of capital losses; (c) predictability and reliability of the company's cash flows; (d) the quality of the business's counterparties, suppliers and market position;
(e) the sector in which the business is active. The Company will focus on sectors where its capital can be used to create growth but not where returns are speculative. Key target sectors include energy, entertainment and social enterprise;
(f) the quality of the company's assets; (g) the opportunity to structure an investment that can produce distributable income; (h) the prospect of achieving an exit or refinancing after 5 years.
Non-Qualifying Investments
The non-qualifying investments consist of cash, cash-based similar liquid investments and investments of a similar profile to the qualifying investments with an expected realisation date which meets the liquidity requirements of the VCT.
Borrowing Powers
The Company has utilised direct borrowing as a strategy to manage short term liquidity. To the extent that borrowing is required, the Directors will restrict the borrowings of the Company and exercise all voting and other rights or powers of control over its subsidiary undertakings (if any) to ensure that the aggregate amount of money borrowed by the group, being the Company and any subsidiary undertakings for the time being, (excluding intra-group borrowings), shall not without the previous sanction of an ordinary resolution of the Company exceed 30% of its net asset value at the time of any borrowing. The Company does not intend to utilise borrowing as a strategy for enhancing returns.
The above Investment Policy does not take into account the changes to the VCT rules relating to non qualifying investments that took effect on 6 April 2016. The Investment Manager will make sure that all non qualifying investments made after that date meet the new requirements.
Investment classification for the Ordinary Share Class by asset value and sector value are shown below:
Investment Portfolio - Ordinary Share Class
Qualifying Investments 85% Non Qualifying Investments 12% Cash 3%
Qualifying Investments by Sector - Ordinary Share Class
Hydro Electric Power 34% Cinema Digitisation 30% Energy Generation and Infrastructure 20% Solar PV 16%
Investment classification for the A Share Class by asset value and sector value are shown below:
Investment Portfolio - A Share Class
Qualifying Investments 44% Non Qualifying Investments 52% Cash 4%
Qualifying Investments by Sector - A Share Class
At 31 March 2016 all the A Share Class Qualifying Investments were in Landfill Gas.
Investment Portfolio - C Share Class
Qualifying Investments 68% Non Qualifying Investments 30% Cash 2%
Qualifying Investments by Sector- C Share Class
At 31 March 2016 all the C Share Class Qualifying Investments were in Hydro Electric Power.
Investment Portfolio - D Share Class
Qualifying Investments 75% Non Qualifying Investments 22% Cash 3%
Qualifying Investments by Sector - D Share Class
At 31 March 2016 all the D Share Class Qualifying Investments were in Hydro Electric Power.
VCT Regulation and Tax Benefits
VCTs were introduced in the Finance Act 1995 to provide a means for private individuals to invest in unquoted companies in the UK. The Finance Act 2004 introduced changes to VCT legislation designed to make VCTs more attractive to investors. The tax benefits available to eligible investors in VCTs include:
-- up-front income tax relief of 30% -- exemption from income tax on dividends received -- exemption from capital gains tax on disposals of shares in VCTs.
The Company was provisionally approved as a VCT by Her Majesty's Revenue and Customs. In order to secure final approval the Company must comply with certain requirements on a continuing basis. Within three years from the effective date of provisional approval or later allotment at least 70% of the Company's investments must comprise "qualifying holdings" of which at least 30% must be in eligible ordinary shares.
FCA Regulation
On 1 April 2014 Triple Point Income VCT plc registered with the Financial Conduct Authority as a small Alternative Investment Fund Manager ("AIFM") under the AIFM Directive.
Exit Programme
The Company is committed to realising its investments and returning funds to Ordinary Shareholders and A Shareholders as soon as practicable after the end of the five year holding period which will be April 2017 for the A Shares and May 2018 for the Ordinary Shares. In relation to the C Share Class the Company is intending to secure a partial realisation after five years but plans to retain its investment in the Hydro companies until 2029. In relation to the D Share Class the Company is intending to secure a partial realisation after five years but plans to retain its investment in the Hydro companies until 2030.
The valuation of and potential exit routes for the Company's portfolio of investments are reviewed and discussed at each Board meeting. The Investment Manager has successfully implemented exit plans for other VCTs under its management.
Principal Risk and Risk Management
The Directors carry out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. The main areas of risk identified by them, along with the risks to which the Company is exposed through its operational and investing activities, are detailed below.
VCT qualifying status risk: the Company is required at all times to observe the conditions laid down in the Income Tax Act 2007 for the maintenance of approved VCT status. The loss of such approval could lead to the Company losing its exemption from corporation tax on capital gains, to investors being liable to pay income tax on dividends received from the Company and, in certain circumstances, to investors being required to repay the initial income tax relief on their investment. The Investment Manager keeps the Company's VCT qualifying status under continual review and reports to the Board on a quarterly basis. The Board has also appointed Philip Hare & Associates LLP to undertake an independent VCT status monitoring role.
Investment risk: the Company's VCT qualifying investments are held in small and medium-sized unquoted companies which, by their nature, entail a higher level of risk and lower liquidity than investments in large quoted companies. The Directors and Investment Manager aim to limit the risk attached to the portfolio as a whole by the careful selection and timely realisation of investments, by carrying out rigorous due diligence procedures and by maintaining a spread of holdings in terms of industry sector and geographical location. The Board reviews the investment portfolio with the Investment Manager on a regular basis.
Financial instrument risk: Financial Instrument risks are described in note 16.
Financial risk: as most of the Company's investments will involve a medium to long-term commitment and will be relatively illiquid, the Directors consider that it is inappropriate to finance the Company's activities through borrowing unless it is to manage short term liquidity. Accordingly a proportion of the Company's assets are maintained in cash or cash equivalents in order to be in a position to take advantage of unquoted investment opportunities as they arise.
Internal control risk: the Board regularly reviews the system of internal controls, both financial and non-financial, operated by the Company and the Investment Manager. These include controls designed to ensure that the Company's assets are safeguarded and that proper accounting records are maintained.
Viability Statement
In accordance with provision C.2.2 of the 2014 revision to the Corporate Governance Code, the Directors have assessed the prospect of the Company over a longer period than 12 months required by the Going Concern provision. In order to assess the new requirement, the Board takes into account the Company's current position and the principal risks as set out on page 9 so that the Directors may state that they have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment.
To provide this assessment the Board has considered the Company's financial position and ability to meet its expenses as they fall due as well as considering longer term viability:
-- the expenses of the Company are predictable and modest in comparison with the assets and there are no capital commitments foreseen which would alter that position;
-- the Company has no employees, only Non-Executive Directors and consequently does not have redundancy or other employment related liabilities or responsibilities;
-- most of the Company's investments will involve a medium to long-term commitment and will be relatively illiquid but the board reduces the risk as a whole by careful selection and timely realisation of investments; and
-- the Directors will continue to monitor closely changes in the VCT legislation and adapt to any changes to ensure the Company maintains approval. The Directors have appointed an independent adviser to undertake the VCT status monitoring role.
Based on the results of this review, the Directors have a reasonable expectation that the Company will be able to continue its operations and meet its expenses and liabilities as they fall due over the period of their assessment. During the next five years the Ordinary and A Share Class will reach their 5 year holding period and the C and D Share Class will partially exit, based on this the Directors believe it is reasonable to make their assessment over 5 years.
Share Buy-Back Discount Policy
The Company has a share buy-back facility, committing to buy back shares at no more than a 10% discount to the prevailing NAV, subject to the Directors' discretion. We will be asking shareholders at the Annual General Meeting to extend the facility for the Company to purchase shares in the market for cancellation.
Shareholders should note that if they sell their shares within five years of subscription they forfeit any tax relief obtained. If you are considering selling your shares please contact TPIM on 020 7201 8989.
Environmental, Social, Employee and Human Rights Issues
The Company has nothing to report in relation to social, employee or human rights issues. It has no employees and its three directors are Non-Executive.
Gender Diversity
The Board of Directors comprises 3 male Directors. The Investment Manager has 49 employees and members of whom 28 are men and 21 are women.
Strategic Report - Investment Manager's Review
During June 2015 the Company's interest in companies which generated renewable electricity from residential solar PV panels were sold. The sale realised GBP7.1m from the portfolio which equated to 22.5p per Ordinary Share and 52.2p per A Share reflecting an uplift of 4.38p per Ordinary Share and 10.15p per A Share both recorded last year. Three companies generating electricity through anaerobic digestion were also sold in June 2015. The sale realised GBP4.8m which contributed to an uplift of 2.75p per Ordinary Share equivalent to GBP535,000 and 1.76p per A Share equivalent to GBP90,000.
The Company's funds at 31 March 2016 are 98% invested in a portfolio of VCT qualifying and non-qualifying unquoted investments. It continues to meet the condition that 70% of funds must be invested in VCT qualifying investments within three years. At 31 March 2016 qualifying investments represented 74% of the total Investment Portfolio and 82% of the funds that are required to meet that condition.
The VCT was established to fund small and medium sized enterprises and at the year end the overall portfolio comprised investments in 21 small, unquoted companies in four sectors: cinema digitisation; crematorium management; renewable electricity generation; and SME lending and investment.
Portfolio Review
Cinema Digitisation
The Company maintains two holdings in cinema digitisation businesses which provide cinema digitisation services in the UK, Germany, Italy and Ireland. These businesses continue to look for opportunities to grow and acquire projectors.
Crematorium Management
Through the Ordinary Share Class portfolio, the Company has an investment in a business that provides crematory and mercury abatement services for the crematoria of a London Borough.
Renewable Electricity Generation:
Solar
The Company holds an investment in Green Energy For Education Limited ("GEFE"), a company that owns a portfolio of rooftop PV systems. The PV systems have been outperforming in their electricity generation and the investment continues to provide an attractive exposure to a business benefitting from low risk Feed in Tariffs. The Company also holds an investment in Cmore Energy Limited ("Cmore") a ground mount solar farm located in Herefordshire. Revenues are earned from the sale of renewable obligation certificates and the sale of electricity. Cmore's revenues have been protected from the wider decline in wholesale electricity prices due to a long term Power Purchase Agreement.
Landfill Gas
Craigahulliar Energy Ltd ("CEL") and Aeris Power Ltd ("APL") each generates renewable electricity from landfill gas at sites operated respectively by local councils and a large waste management company in Northern Ireland. Both businesses continue to generate electricity for export to the Grid, earning long term cash flows through the sale of electricity to a utility company and potentially to the site owners, and through the sale of the Renewables Obligation Certificates. CEL is generating in line with expectations while APL's generation is running lower than expected due to lower than expected gas extraction. Management have taken actions to address this and APL continues to be able comfortably to meet the VCT's interest payments. The Company is in discussions with a potential acquirer of its holdings in both these companies and the valuation for CEL is at the expected sale price whereas APL is calculated on a discounted expected sales price.
Hydro Electric Power
The company has investments in 9 companies which own 11 hydroelectric schemes in the Scottish Highlands. Eight of the schemes were successfully commissioned during 2015, and the remainder, which are in construction, are due to be commissioned in June and September 2016 and May 2017.
Energy Generation and Infrastructure
The Ordinary Share Class has an investment in a company pursuing opportunities in energy generation and infrastructure.
SME Lending and Investment
The Company has investment in finance companies which provide short and medium term funding to a range of small and medium sized businesses.
Sector Analysis
The unquoted investments can be analysed as follows:
Electricity
Generation SME Funding
Hydro Hydro Total
Industry Cinema Crematorium Electric Electric Unquoted
Sector Digitisation Management Power Other Power Other Investments
------------------- -------------- ------------ ---------- --------- ---------- -------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- -------------- ------------ ---------- --------- ---------- -------- -------------
Investments
at 31 March
2015
---------- ---------
Ord Shares 3,319 988 2,452 9,685 - - 16,444
A Shares - - - 4,188 - - 4,188
C Shares - - 9,706 - 3,420 - 13,126
D Shares - - 7,432 - - - 7,432
Total 3,319 988 19,590 13,873 3,420 - 41,190
------------------- -------------- ------------ ---------- --------- ---------- -------- -------------
Investments
made during
the period
------------------- -------------- ------------ ---------- ---------
Ord Shares - - 1,624 3,804 - 450 5,878
A Shares - - - - - 950 950
C Shares - - 433 - 1,078 - 1,511
D Shares - - 6,362 - 1,206 800 8,368
- - 8,419 3,804 2,284 2,200 16,707
------------------- -------------- ------------ ---------- --------- ---------- -------- -------------
Investments
realised
during the
period
------------------- -------------- ------------ ---------- --------- ---------- -------- -------------
Ord Shares - (200) (48) (9,896) - - (10,144)
A Shares - - - (2,936) - - (2,936)
C Shares - - (30) - (800) - (830)
D Shares - - (2,711) - - - (2,711)
- (200) (2,789) (12,832) (800) - (16,621)
------------------- -------------- ------------ ---------- --------- ---------- -------- -------------
Investments
valued during
the period
------------------- -------------- ------------ ---------- --------- ---------- -------- -------------
Ord Shares (25) - 70 377 - - 422
A Shares - - - (463) - - (463)
C Shares - - 325 - - - 325
D Shares - - 1 - - 1
(25) - 395 (85) - - 285
------------------- -------------- ------------ ---------- --------- ---------- -------- -------------
Investments
at 31 March
2016
-------------------
Ord Shares 3,294 788 4,098 3,970 - 450 12,600
A Shares - - - 789 - 950 1,739
C Shares - - 10,434 - 3,698 - 14,132
D Shares - - 11,083 1 1,206 800 13,090
---------- --------- ---------- -------------
Total 3,294 788 25,615 4,760 4,904 2,200 41,561
------------------- -------------- ------------ -------- -------------
Total investments
% 7.93% 1.90% 61.63% 11.45% 11.80% 5.29% 100.00%
------------------- -------------- ------------ ---------- --------- ---------- -------- -------------
Outlook
The coming year will see the Company and the Investment Manager continue to monitor the performance of the Ordinary and A Share portfolios and where appropriate seeking exits.
Our focus on the C and D Share Class investments in the hydro electric power sector will be on the operation of completed sites and progress of those under construction.
If you have any questions, please do not hesitate to call Triple Point on 020 7201 8989.
Claire Ainsworth
Partner
for Triple Point Investment Management LLP
9 June 2016
Strategic Report - Investment Portfolio Summary
31 March 2016 31 March 2015
------------------------------------ ------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted Holdings
Unquoted qualifying
holdings 31,088 73.99 31,695 74.42 34,244 84.89 36,109 85.58
Unquoted non-qualifying
holdings 9,898 23.56 9,866 23.23 5,113 12.66 5,081 12.04
Financial assets at
fair value through
profit or loss 40,986 97.55 41,561 97.65 39,357 97.55 41,190 97.62
Cash and cash equivalents 1,032 2.45 1,032 2.35 993 2.45 993 2.38
42,018 100.00 42,593 100.00 40,350 100.00 42,183 100.00
======== ======= ======== ======= ======== ======= ======== =======
Unquoted Qualifying
Holdings GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Cinema digitisation
Digima Ltd 1,262 3.00 1,274 2.99 1,262 3.13 1,291 3.06
Digital Screen Solutions
Ltd 2,020 4.81 2,020 4.74 2,020 5.01 2,028 4.81
Electricity Generation
Solar
Arraze Ltd - - - - 600 1.49 800 1.90
Bandspace Ltd - - - - 1,200 2.97 1,650 3.91
Bridge Power Ltd - - - - 725 1.80 968 2.29
Campus Link Ltd - - - - 690 1.71 892 2.11
Convertibox Services
Ltd - - - - 1,000 2.48 1,170 2.77
Core Generation Ltd - - - - 600 1.49 823 1.95
C More Energy Ltd 1,000 2.38 1,153 2.71 1,000 2.48 1,123 2.66
Green Energy for Education
Ltd* 475 1.13 608 1.43 1,000 2.48 1,128 2.67
PJC Renewable Energy
Ltd 5 0.01 5 0.01 5 0.01 5 0.01
Trym Power Ltd - - - - 200 0.50 274 0.65
Anaerobic Digestion
Biomass Future Generation
Ltd - - - - 2,150 5.33 2,150 5.10
GreenTec Energy Ltd - - - - 1,000 2.48 1,000 2.37
Katharos Organic Ltd - - - - 1,000 2.48 1,000 2.37
Landfill Gas *
Aeris Power Ltd 525 1.25 424 1.00 525 1.30 525 1.24
Craigahulliar Energy
Ltd 350 0.83 365 0.86 350 0.87 365 0.87
Hydro Electric Power
Elementary Energy
Ltd 2,060 4.90 2,130 5.00 2,060 5.11 2,060 4.88
Green Highland Allt
Choire A Bhalachain
(225) Ltd 3,130 7.45 3,130 7.35 3,130 7.76 3,130 7.42
Green Highland Allt
Garbh Ltd 2,710 6.45 2,710 6.36 - - - -
Green Highland Allt
Ladaidh (1148) Ltd 3,500 8.33 3,500 8.22 3,500 8.67 3,500 8.30
Green Highland Allt
Luaidhe (228) Ltd 1,995 4.75 1,995 4.68 1,995 4.94 1,995 4.73
Green Highland Allt
Phocachain (1015)
Ltd 3,932 9.36 3,932 9.23 3,932 9.74 3,932 9.32
Green Highland Shenval
Ltd 1,624 3.87 1,624 3.81 - - - -
Green Highland Renewables
(Achnacarry) Ltd 4,300 10.23 4,625 10.86 4,300 10.66 4,300 10.19
Energy Generation
and Infrastructure
Green Highland Hydro
Generation Ltd 2,200 5.24 2,200 5.17 - - - -
31,088 73.99 31,695 74.42 34,244 84.89 36,109 85.58
======== ======= ======== ======= ======== ======= ======== =======
*Assets held for sale
31 March 2016 31 March 2015
---------------------------------- ----------------------------------
Unquoted Non-Qualifying
Holdings Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Crematorium Management
Furnace Managed Services
Ltd 820 1.95 788 1.85 1,020 2.53 988 2.34
Hydro Electric Power
Elementary Energy Ltd 344 0.82 344 0.81 392 0.97 392 0.93
Green Highland Allt
Choire A Bhalachain
(225) Ltd 341 0.81 341 0.80 162 0.40 162 0.38
Green Highland Allt
Garbh Ltd ST Loan 30 0.07 30 0.07 30 0.07 30 0.07
Green Highland Allt
GNF (385) ST Loan - - - - 30 0.07 30 0.07
Green Highland Allt
Luaidhe (228) Ltd 185 0.44 185 0.43 5 0.01 5 0.01
Green Highland Allt
Phocachain (1015) Ltd 175 0.42 175 0.41 54 0.13 54 0.13
Green Highland Shenval
Ltd - - - - - - - -
Kinlochteacius Hydro
Limited 762 1.81 762 1.79 - - - -
Green Highland Renewables
(Achnacarry) Ltd 133 0.32 133 0.31 - - - -
Energy Generation and
Infrastructure
Green Highland Hydro
Generation Ltd 4 0.01 4 0.01 - - - -
SME Lending and Investment:
Hydro Electric Power
Broadpoint 2 Ltd 2,894 6.89 2,894 6.79 3,420 8.48 3,420 8.11
Broadpoint 3 Ltd 2,010 4.78 2,010 4.72 - - - -
Other
Funding Path Ltd 2,200 5.24 2,200 5.24 - - - -
9,898 23.56 9,866 23.23 5,113 12.66 5,081 12.04
-------- ------ -------- ------ -------- ------ -------- ------
Financial Assets are measured at fair value through profit or loss. The initial best estimate of fair value of these investments that are either quoted or not quoted on an active market is the transaction price (i.e. cost). The fair value of these investments is subsequently measured by reference to the enterprise value of the investee company, which is best deemed to reflect the fair value. Where the Board considers the investee company's enterprise value to remain unchanged since acquisition, investments continue to be held at cost less any loan repayments received. Where the Board considers the investee company's enterprise value has changed since acquisition, investments are held at a value measured using a discounted cash flow model or the value expected to be realised on disposal which is equivalent to fair value.
Strategic Report - Investment Portfolio's Ten Largest VCT Unquoted Investments
Green Highland Renewables (Achnacarry) Ltd
Equity
Held
Income recognised by TP Equity
Date of by TP Income Income Held by
first Cost Valuation Valuation for the year VCT TPIM managed
investment GBP GBP Method GBP'000 % funds %
Discounted
13-Aug-14 4,300,000 4,625,000 cash flow 106 40.65 40.65
Summary of Information from Investee Company
Financial Statements ending in 2015: GBP'000
Turnover 0
Earnings before interest, tax, amortisation
and depreciation (EBITDA) (75)
Profit before
tax (79)
Net assets before VCT
loans 4,899
Net assets 3,609
Green Highland Renewables (Achnacarry) Ltd is operating
three separate run-of-river hydro-electric power plants
located adjacent to Loch Arkaig near Fort William, having
reached financial close in August 2014. The Cheanna Mhuir
site (500kw) was commissioned in November 2015, the Loch
Blair site (1,250kw) and the Allt Dubh site were both
successfully commissioned in December 2015. The company
earns Feed-in-Tariffs and other revenues from the generation
and export of electricity.
Green Highland Allt Phocachain (1015) Ltd
Equity
Held
Income recognised by TP Equity
Date of by TP Income Income Held by
first Cost Valuation Valuation for the year VCT TPIM managed
investment GBP GBP Method GBP'000 % funds %
Discounted
13-Nov-14 3,932,000 3,932,000 cash flow 166 42.70 100.00
Summary of Information from Investee Company
Financial Statements ending in 2015: GBP'000
Turnover 0
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 66
Profit before
tax (125)
Net assets before VCT
loans 4,665
Net assets 3,228
Green Highland Allt Phocachain (1015) Ltd has constructed
two separate run-of-river hydro-electric power plants
located in Glen Moriston, Scottish Highlands. The Allt
Laraidh 500kw scheme and the Allt Phocachain 500kw scheme
were both commissioned on schedule in December 2015.
The company earns Feed-in-Tariffs and other revenues
from the generation and export of electricity.
-------------------------------------------------------------------------------------------------------
Green Highland Allt Ladaidh (1148) Ltd
Equity
Held
Income recognised by TP Equity
Date of by TP Income Income Held by
first Cost Valuation Valuation for the year VCT TPIM managed
investment GBP GBP Method GBP'000 % funds %
20-Mar-15 3,500,000 3,500,000 Cost 295 35.17 50.25
Summary of Information from Investee Company
Financial Statements ending in 2015: GBP'000
Turnover 0
Earnings before interest, tax, amortisation
and depreciation (EBITDA) (12)
Profit before
tax (12)
Net assets before VCT
loans 4,988
Net assets 3,488
Green Highland Allt Ladaidh (1148) Ltd is constructing
a run-of-river hydro-electric power plant near Loch Garry,
Invergarry in the Scottish Highlands. The 1300kW Allt
Ladaidh scheme started construction during March 2015
and is scheduled to be commissioned by the end June 2016.
The company earns Feed-in-Tariffs and other revenues
from the generation and export of electricity.
------------------------------------------------------------------------------------------------------
Green Highland Allt Choire A Bhalachain (225) Ltd
Equity
Held
Income recognised by TP Equity
Date of by TP Income Income Held by
first Cost Valuation Valuation for the year VCT TPIM managed
investment GBP GBP Method GBP'000 % funds %
Discounted
18-Jul-14 3,130,000 3,130,000 cash flow 278 49.90 100.00
Summary of Information from Investee Company
Financial Statements ending in 2015: GBP'000
Turnover 0
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 67
Profit before
tax (125)
Net assets before VCT
loans 3,035
Net assets 2,087
Green Highland Allt Choire a Bhalachain (225) Ltd is
currently operating a 750kw run-of-river hydro-electric
power plant located at Tomdoun, Invergarry in the Scottish
Highlands. The project started construction in July 2014
and was commissioned on schedule in November 2015. The
company earns Feed-in-Tariffs and other revenues from
the generation and export of electricity.
-------------------------------------------------------------------------------------------------------
Broadpoint 2 Ltd
Equity
Held Equity
Income recognised by TP Held by
by TP Income Income TPIM managed
Date of Cost Valuation Valuation for the year VCT funds
first investment GBP GBP Method GBP'000 % %
12-Feb-15 2,893,637 2,893,637 Cost 0 49.00 98.00
This company has not yet prepared any Financial
Statements
Broadpoint 2 Ltd is a VCT non-qualifying investment
which provides finance to the hydro electric power sector.
Green Highland Allt Garbh Ltd
Equity
Held
Income recognised by TP Equity
Date of by TP Income Income Held by
first Cost Valuation Valuation for the year VCT TPIM managed
investment GBP GBP Method GBP'000 % funds %
01-Apr-15 2,710,000 2,710,000 Cost 18 27.46 50.25
This company has not yet prepared any
Financial Statements
Green Highland Allt Garbh Ltd is constructing a run-of-river
hydro-electric power plant near Glen Affric, SW of Lodge,
Cannich. The 1,479kW Allt Garbh scheme begun construction
earlier this year and is scheduled to be commissioned
by May 2017. The company will earn Feed-in-Tariffs and
other revenues from the generation and export of electricity.
Funding Path
Ltd
Equity
Held
Income recognised by TP Equity
by TP Income Income Held by
Date of Cost Valuation Valuation for the year VCT TPIM managed
first investment GBP GBP Method GBP'000 % funds %
29-Jan-16 2,200,000 2,200,000 Cost 28 49.00 98.00
This company has not yet prepared any Financial
Statements
Funding Path Ltd provides funding for SME Leasing companies.
Green Highland Hydro Generation Ltd
Equity
Income recognised Held Equity
by TP Income by TP Held by
Date of Cost Valuation Valuation for the year Income TPIM managed
first investment GBP GBP Method GBP'000 VCT % funds %
02-Apr-15 2,200,000 2,200,000 Cost 0 26.97 50.25
This company has not yet prepared any
Financial Statements
Green Highland Generation Ltd is exploring opportunities
in the energy generation and infrastructure sector.
Elementary Energy
Ltd
Equity
Held
Income recognised by TP Equity
Date of by TP Income Income Held by
first Cost Valuation Valuation for the year VCT TPIM managed
investment GBP GBP Method GBP'000 % funds %
Discounted
18-Mar-13 2,060,000 2,130,000 cash flow 209 49.33 99.22
Summary of Information from Investee Company
Financial Statements ending in 2015: GBP'000
Turnover 184
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 124
Profit before
tax (74)
Net assets before VCT
loans 2,085
Net assets 545
Elementary Energy Ltd is currently operating a 500kw
run-of-river hydro-electric power plant near Fort William.
The plant was commissioned in January 2015 and is operating
successfully and earns Feed-in-Tariffs and other revenues
from the generation and export of electricity.
Digital Screen Solutions Ltd
Equity
Held
Income recognised by TP Equity
Date of by TP Income Income Held by
first Cost Valuation Valuation for the year VCT TPIM managed
investment GBP GBP Method GBP'000 % funds %
Discounted
31-Mar-09 2,020,000 2,020,000 cash flow 102 35.36 99.87
Summary of Information from Investee Company
Financial Statements ending in 2015: GBP'000
Turnover 1,779
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 1,581
Profit before
tax 342
Net assets before VCT
loans 3,162
Net assets 1,323
Digital Screen Solutions Ltd is a provider of cinema
digitisation equipment maintaining and operating digital
projection equipment in the UK and Italy. The company
owns a portfolio of 179 screens across the UK and Italy.
Digital cinema projection conversion is paid for under
the globally recognised Virtual Print Fee model, through
which film studios pay for the cost of the deployment
over a number of years with the majority of the company's
revenues deriving ultimately from the six major investment
grade Hollywood Studios.
-- All investments are held in the UK.
-- The investments are a combination of debt and equity.
-- Equity holding is equal to the voting rights.
The Strategic Report has been approved by the Board and signed on their behalf by the Chairman.
David Frank
Chairman
9 June 2016
Report of the Directors
The Directors present their Report and the audited Financial Statements for the year ended 31 March 2016.
Details of Directors
David Frank was a partner in Slaughter and May for twenty two years before retiring from the firm in 2008. As well as being the firm's first Practice Partner from 2001 to 2008, his practice involved acting for several venture capital houses, including 3i and Schroder Ventures. He was also involved in several flotations in the venture capital sector, including 3i, Baronsmead and SVG Capital. Since retiring from legal practice, he has established a portfolio of voluntary roles, ranging from a governorship of a hospital to a trusteeship of a community foundation. He has been a Director and Chairman of the Company since 11 November 2010.
Simon Acland has over twenty five 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 in Quester's portfolio, many of which achieved successful exits through flotation or trade sales. Simon is also a director of various other private companies and charities, and a member of the investment committee of the British Business Bank's Angel Co-Fund. Simon was appointed a Director on 12 March 2009.
Michael Stanes has been an Investment Director at Heartwood Investment Management, a London-based firm providing investment management and wealth structuring services for high net worth individuals, since 2010. He began his career at Warburg Investment Management (which became Mercury Asset Management) where he ran equity portfolios in London and Tokyo. He then moved to the US where he founded a business on behalf of Merrill Lynch offering equity portfolio management to high net worth individuals. In 2002 he joined Goldman Sachs Asset Management in London running global equity portfolios for a range of institutional and individual clients before joining a new fund management partnership as CEO. Michael was appointed a Director on 21 November 2012.
All Directors are considered to be independent.
The Board has considered provision B.7.2 of the UK Corporate Governance Code (September 2014) and believes that all the Directors continue to be effective and to demonstrate commitment to their roles, the Board and the Company. The Directors are discussed further within the Corporate Governance report on pages 25 and 26 which demonstrates the Board's compliance with the UK Corporate Governance code.
Activities and Status
The Company is a Venture Capital Trust and its main activity is investing.
The Company has been provisionally approved as a VCT by HMRC.
The Company is registered in England as a Public Limited Company (Registration number 6421083). The Directors have managed, and intend to continue to manage, the Company's affairs in such a manner as to comply with Section 274 of the Income Tax Act 2007 which grants approval as a VCT.
The Company was not at any time up to the date of this report a close company within the meaning of S439 of the Corporation Tax Act 2010.
Post Balance Sheet Events
There were no post balance sheet events.
Directors' and Officers' Liability Insurance
The Company has, as permitted by S233 of the Companies Act 2006, maintained insurance cover on behalf of the Directors and Company Secretary, indemnifying them against certain liabilities which may be incurred by them in relation to their offices with the Company.
Matters Covered in the Strategic Report
Dividends and financial risk management have both been discussed within the Strategic Report on pages 4 and 9.
Corporate Governance
Full details are given in the Corporate Governance Statement, which forms part of this Report of the Directors, and can be found on pages 25 to 29.
Management
TPIM acts as Investment Manager to the Company. The principal terms of the Company's management agreement with TPIM are set out in note 5 to the Financial Statements.
The Board has evaluated the performance of the Investment Manager based on the returns generated since taking on the management of the Fund and a review of the management contract and the services provided in accordance with its terms. As required by the Listing Rules, the Directors confirm that in their opinion the continuing appointment of TPIM as Investment Manager is in the best interests of the shareholders as a whole. In reaching this conclusion the Directors have taken into account the performance of other VCTs managed by TPIM and the service provided by TPIM to the Company.
Substantial Shareholdings
As at the date of this report no disclosures of major shareholdings had been made to the Company under Disclosure and Transparency Rule 5 (Vote Holder and Issuer Notification Rules).
Global Greenhouse Gas Emissions
The Company has no greenhouse gas emissions to report from the operations of the Company, nor does it have responsibility for any other emission producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013.
Annual General Meeting
Notice convening the 2016 Annual General Meeting of the Company and a form of proxy in respect of that meeting can each be found at the end of this document.
Share Capital, Rights Attaching to the Shares and Restrictions on Voting and Transfer
The Company had in issue 19,463,120 Ordinary Shares, 5,131,353 A Ordinary Shares, 13,441,438 C Ordinary Shares and 13,701,636 D Ordinary Shares at 31 March 2016 (see note 15). As at that date none of the issued shares was held by the Company as treasury shares. Subject to any suspension or abrogation of rights pursuant to relevant law or the Company's articles of association, the shares confer on their holders (other than the Company in respect of any treasury shares) the following principal rights:
a) the right to receive out of profits available for distribution such dividends as may be agreed to be paid (in the case of a final dividend in an amount not exceeding the amount recommended by the Board as approved by shareholders in general meeting or in the case of an interim dividend in an amount determined by the Board). All dividends unclaimed for a period of 12 years after having become due for payment are forfeited automatically and cease to remain owing by the Company;
b) the right, on a return of assets on a liquidation, reduction of capital or otherwise, to share in the surplus assets of the Company remaining after payment of its liabilities pari passu with other holders of ordinary shares of that class; and
c) the right to receive notice of and to attend and speak and vote in person or on a poll by proxy at any general meeting of the Company. On a show of hands every member present or represented and voting has one vote and on a poll every member present or represented and voting has one vote for every share of which that member is the holder; the validly executed appointment of a proxy must be received not less than 48 hours before the time of the holding of the relevant meeting or adjourned meeting or, in the case of a poll taken otherwise than at or on the same day as the relevant meeting or adjourned meeting, be received after the poll has been demanded and not less than 24 hours before the time appointed for the taking of the poll.
These rights can be suspended. If a member, or any other person appearing to be interested in shares held by that member, has failed to comply within the time limits specified in the Company's articles of association with a notice pursuant to S793 of the Companies Act 2006 (notice by a Company requiring information about interests in its shares), the Company can until the default ceases suspend the right to attend and speak and vote at a general meeting and if the shares represent at least 0.25% of their class the Company can also withhold any dividend or other money payable in respect of the shares (without any obligation to pay interest) and refuse to accept certain transfers of the relevant shares.
Shareholders, either alone or with other shareholders, have other rights as set out in the Company's articles of association and in company law.
A member may choose whether his or her shares are evidenced by share certificates (certificated shares) or held in electronic (uncertificated) form in CREST (the UK electronic settlement system). Any member may transfer all or any of his or her shares, subject in the case of certificated shares to the rules set out in the Company's articles of association or in the case of uncertificated shares to the regulations governing the operation of CREST (which allow the Directors to refuse to register a transfer as therein set out); the transferor remains the holder of the shares until the name of the transferee is entered in the register of members. The Directors may refuse to register a share transfer if it is in respect of a certificated share which is not fully paid up or on which the Company has a lien provided that, where the share transfer is in respect of any share admitted to the Official List maintained by the UK Listing Authority, any such discretion may not be exercised so as to prevent dealings taking place on an open and proper basis, or if in the opinion of the Directors (and with the concurrence of the UK Listing Authority) exceptional circumstances so warrant, provided that the exercise of such power will not disturb the market in those shares. Whilst there are no squeeze-out and sell-out rules relating to the shares in the Company's articles of association, shareholders are subject to the compulsory acquisition provisions in S974 to S991 of the Companies Act 2006.
Amendment of Articles of Association
The Company's articles of association may be amended by the members of the Company by special resolution (requiring a majority of at least 75% of the persons voting on the relevant resolution).
Appointment and Replacement of Directors
A person may be appointed as a Director of the Company by the shareholders in general meeting by ordinary resolution (requiring a simple majority of the persons voting on the relevant resolution) or by the Directors; no person, other than a Director retiring by rotation or otherwise, shall be appointed or re-appointed a Director at any general meeting unless he is recommended by the Directors or, not less than seven nor more than 42 clear days before the date appointed for the meeting, notice is given to the Company of the intention to propose that person for appointment or re-appointment in the form and manner set out in the Company's articles of association.
Each Director who is appointed by the Directors (and who has not been elected as a Director of the Company by the members at a general meeting held in the interval since his appointment as a Director of the Company) is to be subject to election as a Director of the Company by the members at the first Annual General Meeting of the Company following his or her appointment. At each Annual General Meeting of the Company one third of the Directors for the time being, or if their number is not three or an integral multiple of three the number nearest to but not exceeding one-third, are to be subject to re-election.
The Companies Act allows shareholders in general meeting by ordinary resolution (requiring a simple majority of the persons voting on the relevant resolution) to remove any Director before the expiry of his or her period of office, but without prejudice to any claim for damages which the Director may have for breach of any contract of service between him or her and the Company.
A person also ceases to be a Director if he or she resigns in writing, ceases to be a Director by virtue of any provision of the Companies Act, becomes prohibited by law from being a Director, becomes bankrupt or is the subject of a relevant insolvency procedure, or becomes of unsound mind, or if the Board so decides following at least six months' absence without leave or if he or she becomes subject to relevant procedures under the mental health laws, as set out in the Company's articles of association.
Powers of the Directors
Subject to the provisions of the Companies Act, the memorandum and articles of association of the Company and any directions given by shareholders by special resolution, the articles of association specify that the business of the Company is to be managed by the Directors, who may exercise all the powers of the Company, whether relating to the management of the business or not. In particular, the Directors may exercise on behalf of the Company its powers to purchase its own shares to the extent permitted by shareholders.
Auditor
Grant Thornton UK LLP offers itself for reappointment as auditor. In accordance with S489(4) of the Companies Act 2006 a resolution to reappoint Grant Thornton UK LLP as auditor will be proposed at the forthcoming Annual General Meeting.
On behalf of the Board.
David Frank
Director
9 June 2015
Corporate Governance
The Board of Triple Point Income VCT plc has considered the principles and recommendations of the Association of Investment Companies Code of Corporate Governance (AIC Code 2015) by reference to the Association of Investment Companies Corporate Governance Guide for Investment Companies (AIC Guide). The AIC Code 2015, as explained by the AIC Guide, addresses all the principles set out in the UK Corporate Governance Code (September 2014), as well as setting out additional principles and recommendations on issues that are of specific relevance to the Company. The Board considers that reporting against principles and recommendations of the AIC Code 2015, by reference to the AIC Guide, which incorporates the UK Corporate Governance Code (September 2014), will provide improved reporting to shareholders.
The Company is committed to maintaining high standards in corporate governance and has complied with the recommendations of the AIC Code 2015 and the relevant provisions of the UK Corporate Governance Code (September 2014), except as set out at the end of this report in the Compliance Statement.
The Corporate Governance Report forms part of the Report of the Directors.
Board of Directors
The Company has a Board of three Non-Executive Directors. Since all Directors are Non-Executive and day-to-day management responsibilities are sub-contracted to the Investment Manager, the Company does not have a Chief Executive Officer. The Directors have a range of business and financial skills which are relevant to the Company; these are described on page 21 of this report. Directors are provided with key information on the Company's activities, including regulatory and statutory requirements, by the Investment Manager. The Board has direct access to company secretarial advice and compliance services provided by the Investment Manager which is responsible for ensuring that Board procedures are followed and applicable regulations complied with. All Directors are able to take independent professional advice in furtherance of their duties.
Any appointment of new Directors to the Board is conducted, and appointments made, on merit and with due regard for the benefits of diversity on the Board, including gender. All Directors are able to allocate sufficient time to the Company to discharge their responsibilities.
The Board meets regularly on a quarterly basis, and on other occasions as required, to review the investment performance and monitor compliance with the investment policy laid down by the Board. There is a formal schedule of matters reserved for Board decision and the agreement between the Company and the Investment Manager has authority limits beyond which Board approval must be sought.
The Investment Manager has authority over the management of the investment portfolio, the organisation of custodial services, accounting, secretarial and administrative services. In practice the Investment Manager makes investment recommendations for the Board's approval. In addition all investment decisions involving other VCTs managed by the Investment Manager are taken by the Board rather than the Investment Manager. Other matters reserved for the Board include:
-- the consideration and approval of future developments or changes to the investment policy, including risk and asset allocation;
-- consideration of corporate strategy; -- approval of any dividend or return of capital to be paid to the shareholders; -- the appointment, evaluation, removal and remuneration of the Investment Manager; -- the performance of the Company, including monitoring the net asset value per share; and -- monitoring shareholder profiles and considering shareholder communications.
The Chairman leads the Board in the determination of its strategy and in the achievement of its objectives. The Chairman is responsible for organising the business of the Board, ensuring its effectiveness and setting its agenda and has no involvement in the day to day business of the Company. He facilitates the effective contribution of the Directors and ensures that they receive accurate, timely and clear information and that they communicate effectively with shareholders. The Chairman does not have significant commitments conflicting with his obligations to the Company.
The Company Secretary is responsible for advising the Board on all governance matters. All of the Directors have access to the advice and services of the Company Secretary which has administrative responsibility for the meetings of the Board and its committees. Directors may also take independent professional advice at the Company's expense where necessary in the performance of their duties. As all of the Directors are Non-Executive, it is not considered appropriate to identify a member of the Board as the senior Non-Executive Director of the Company.
The Company's articles of association and the schedule of matters reserved to the Board for decision provide that the appointment and removal of the Company Secretary is a matter for the full Board.
The Company's articles of association require that one third of the Directors should retire by rotation each year and seek re-election at the Annual General Meeting and that Directors newly appointed by the Board should seek re-appointment at the next Annual General Meeting. The Board complies with the requirement of the UK Corporate Governance Code (September 2014) that all Directors are required to submit themselves for re-election at least every three years.
During the period covered by these Financial Statements the following meetings were held:
Directors present 4 Full Board 2 Audit Committee
Meetings Meetings
David Frank, Chairman 4 2
Simon Acland 3 1
Michael Stanes 3 2
Audit Committee
The Board has appointed an audit committee of which David Frank is Chairman, which deals with matters relating to audit, financial reporting and internal control systems. The Committee meets as required and has direct access to Grant Thornton UK LLP, the Company's auditor.
The audit committee safeguards the objectivity and independence of the auditor by reviewing the nature and extent of non-audit services supplied by the external auditor to the Company. The audit committee has reviewed the non-audit service provided by the external auditor, being corporation tax, and does not believe it is sufficient to influence its independence or objectivity due to the fee being an immaterial expense.
When considering whether to recommend the reappointment of the external auditor the audit committee takes into account its current fee tender compared to the external audit fees paid by other similar companies. The audit committee will then recommend to the Board the appointment of an external auditor which is ratified at the Annual General Meeting.
The Auditing Practices Board requires the audit partner to rotate every five years. The audit partner rotated in the prior year. No audit tender has been undertaken since the Company was incorporated.
The effectiveness of the external audit is assessed as part of the Board evaluation conducted annually and by the quality and content of the audit plan provided to the audit committee by the external auditor and the discussions then held on topics raised. The audit committee will challenge the external auditor at the audit committee meeting if appropriate.
The audit committee's terms of reference include the following roles and responsibilities:
-- reviewing and making recommendations to the Board in relation to the Company's published Financial Statements and other formal announcements or regulatory returns relating to the Company's financial performance, reviewing significant financial reporting judgements contained in them;
-- reviewing and making recommendations to the Board in relation to the Company's internal control (including internal financial control) and risk management systems;
-- periodically considering the need for an internal audit function;
-- making recommendations to the Board in relation to the appointment, re-appointment and removal of the external auditor and approving the remuneration and terms of engagement of the external auditor;
-- reviewing and monitoring the external auditor's independence and objectivity and the effectiveness of the audit process, taking into consideration relevant UK professional regulatory requirements;
-- monitoring the extent to which the external auditor is engaged to supply non-audit services; and
-- ensuring that the Investment Manager has arrangements in place for the investigation and follow-up of any concerns raised confidentially by staff in relation to propriety of financial reporting or other matters.
The committee reviews its terms of reference and effectiveness annually and recommends to the Board any changes required as a result of the review. The terms of reference are available on request from the Company Secretary.
The Board considers that the members of the committee collectively have the skills and experience required to discharge their duties effectively, and that the Chairman of the committee meets the requirements of the UK Corporate Governance Code (September 2014) as to relevant financial experience.
The Company does not have an independent internal audit function as it is not deemed appropriate given the size of the Company and the nature of the Company's business. However, the committee considers annually whether there is a need for such a function and, if there were, would recommend it be established.
In respect of the year ended 31 March 2016, the audit committee discharged its responsibilities by:
-- reviewing and approving the external auditor's terms of engagement and remuneration and independence;
-- reviewing the external auditor's plan for the audit of the Financial Statements, including identification of key risks and confirmation of auditor independence;
-- reviewing TPIM's statement of internal controls operated in relation to the Company's business and assessing those controls in minimising the impact of key risks;
-- reviewing periodic reports on the effectiveness of TPIM's compliance procedures; -- reviewing the appropriateness of the Company's accounting policies;
-- reviewing the Company's half-yearly results and draft annual Financial Statements prior to Board approval;
-- reviewing the external auditor's audit plan document to the audit committee on the annual Financial Statements; and
-- reviewing the Company's going concern status.
The audit committee is responsible for considering and reporting on any significant issues that arise in relation to the Financial Statements.
The key areas of risk that have been identified and considered by the audit committee in relation to the business activities and the Financial Statements of the Company are as follows:
-- valuation and existence of unquoted investments; and
-- compliance with HM Revenue & Customs conditions for maintenance of approved Venture Capital Trust status.
Corporate Governance
The audit committee relies on the Investment Manager to assess the valuation of unquoted investments and the existence of those investments. The Investment Manager has a director on the board of all the investee companies and meets regularly with the other directors and hence has an oversight of all the investments made. The audit committee have reviewed the valuations and discussed them with both the Investment Manager and the external auditor to confirm the valuation of the unquoted investments and the existence of those investments.
The Investment Manager has confirmed to the audit committee that the conditions for maintaining the Company's status as an approved Venture Capital Trust had been complied with throughout the year. The position is also reviewed by Philip Hare & Associates LLP in its capacity as adviser to the Company on taxation matters.
The audit committee has considered the whole Report and Accounts for the year ended 31 March 2016 and has reported to the Board that it considers them to be fair, balanced and understandable providing the information necessary for shareholders to assess the Company's position, performance, business model and strategy.
Internal Control
The Directors have overall responsibility for keeping under review the effectiveness of the Company's systems of internal controls. The purpose of these controls is to ensure that proper accounting records are maintained, the Company's assets are safeguarded and the financial information used within the business and for publication is accurate and reliable; such a system can only provide reasonable and not absolute assurance against material misstatement or loss. The system of internal controls is designed to manage rather than eliminate the risk of failure to achieve business objectives. As part of this process an annual review of the internal control systems is carried out. The review covers all material controls including financial, operational and risk management systems. The Directors regularly review financial results and investment performance with the Investment Manager.
The Directors have established an ongoing process designed to meet the particular needs of the Company in identifying, evaluating and managing risks to which it is exposed. The process adopted is one whereby the Directors identify the risks to which the Company is exposed including, among others, market risk, VCT qualifying investment risk and operational risks which are recorded on a risk register. The controls employed to mitigate these risks are identified and the residual risks are rated taking into account the impact of the mitigating factors. The risk register is updated twice a year.
TPIM is engaged to provide administrative including accounting services and retains physical custody of the documents of title relating to investments.
The Directors regularly review the system of internal controls, both financial and non-financial, operated by the Company and the Investment Manager. These include controls designed to ensure that the Company's assets are safeguarded and that proper accounting records are maintained.
Internal control systems include the production and review of quarterly bank reconciliations and management accounts. The VCT is subject to a full annual audit. The auditors are the same auditors as other VCTs managed by the Investment Manager. The Investment Manager's procedures are subject to internal compliance checks.
Going Concern
After making the necessary enquiries, the Directors confirm that they are satisfied that the Company has adequate resources to continue in business for at least the next 12 months. The Board receives regular reports from the Investment Manager and the Directors believe that, as no material uncertainties leading to significant doubt about going concern have been identified, it is appropriate to continue to apply the going concern basis in preparing the Financial Statements.
Relations with Shareholders
The Board recognises the value of maintaining regular communications with shareholders. In addition to the formal business of the Annual General Meeting, an opportunity is given to all shareholders to question the Board and the Investment Manager on matters relating to the Company's operation and performance. The Board and the Investment Manager will also respond to any written queries made by shareholders during the course of the year and both can be contacted at 18 St Swithin's Lane, London, EC4N 8AD or on 020 7201 8989.
Compliance Statement
The Listing Rules require the Board to report on compliance with the UK Corporate Governance Code (September 2014) provisions throughout the accounting period. With the exception of the limited items outlined below, the Directors consider that the Company has complied throughout the period under review with the provisions set out in the UK Corporate Governance Code (September 2014).
1. New Directors do not receive a full, formal and tailored induction on joining the Board. Such matters are addressed on an individual basis as they arise (B.4.1).
2. Due to the size of the Board and the nature of the Company's business, a formal performance evaluation of the Board, its committees, the individual Directors and the Chairman has not been undertaken. Specific performance issues are dealt with as they arise (B.6.1, B.6.3).
3. The Company does not have a senior Independent Director. The Board does not consider such an appointment appropriate for the Company (A.4.1).
4. The Company conducts a formal review as to whether there is a need for an internal audit function. The Directors do not consider that an internal audit would be an appropriate control for a Venture Capital Trust (C.3.6).
5. As all the Directors are Non-Executive, it is not considered appropriate to appoint a Nomination or Remuneration Committee (B.2.1 and D.2.1).
6. The Audit committee includes three Non-Executive Directors all of whom are considered independent. David Frank is Chairman of the Company and is also chairman of the audit committee but it is not considered appropriate to appoint another independent director. The Board regularly reviews the independence of its Directors (C.3.1).
On behalf of the Board
David Frank
Chairman
9 June 2016
Directors' Responsibilities Statement
The Directors are responsible for preparing the Strategic Report, the Directors' Report, the Directors' Remuneration Report and the Financial Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each financial year. Under that law the Directors have elected to prepare the Financial Statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the Company for that year. In preparing these Financial Statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently; -- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable IFRS have been followed, subject to any material departures disclosed and explained in the Financial Statements;
-- prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements and the Remuneration report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors confirm that:
-- so far as each of the Directors is aware there is no relevant audit information of which the Company's auditor is unaware; and
-- the Directors have taken all steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.
The Directors are responsible for preparing the Annual Report in accordance with applicable law and regulations. The Directors consider the Annual Report and the Financial Statements, taken as a whole, provide the information necessary to assess the Company's position, performance, business model and strategy and are fair, balanced and understandable.
The Company's Financial Statements are published on the TPIM website, www.triplepoint.co.uk. The maintenance and integrity of this website is the responsibility of TPIM and not of the Company. Legislation in the United Kingdom governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.
To the best of our knowledge:
-- the Financial Statements, prepared in accordance with IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
-- the annual report including the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.
On behalf of the Board
David Frank
Chairman
9 June 2016
Directors' Remuneration Report
Introduction
This report is submitted in accordance with schedule 8 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulations 2008, in respect of the year ended 31 March 2016. This report also meets the Financial Conduct Authority's Listing Rules and describes how the Board has applied the principles relating to Directors' remuneration set out in UK Corporate Governance Code (issued September 2014). The reporting requirements require two sections to be included, a Policy Report and an Annual Remuneration Report which are presented below.
Directors' Remuneration Policy Report
This statement of the Directors' Remuneration Policy was effective following approval by shareholders at the Annual General Meeting on 24 July 2014. The Board currently comprises three Directors, all of whom are Non-Executive. The Board does not have a separate remuneration committee as the Company has no employees or executive directors. The Board has not retained external advisers in relation to remuneration matters but has access to information about Directors' fees paid by other companies of a similar size and type. No views which are relevant to the formulation of the Directors' remuneration policy have been expressed to the Company by shareholders, whether at a general meeting or otherwise.
The Board's policy is that the remuneration of Non-Executive Directors should reflect the experience of the Board as a whole, be fair and be comparable with that of other relevant Venture Capital Trusts that are similar in size and have similar investment objectives and structures. Furthermore, the level of remuneration should be sufficient to attract and retain the Directors needed to oversee the Company properly and to reflect the specific circumstances of the Company, the duties and responsibilities of the Directors and the value and amount of time committed to the Company's affairs. The articles of association provide that the Directors shall be paid in aggregate a sum not exceeding GBP100,000 per annum. None of the Directors is eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits in respect of their services as Non-Executive Directors of the Company.
The articles of association provide that Directors shall retire and be subject to re-election at the first Annual General Meeting after their appointment and that any Director who has not been re-elected for three years shall retire and be subject to re-election at the Annual General Meeting. Also any Director not considered independent shall retire each year and offer himself for re-election at the Annual General Meeting. The Directors' service contracts provide for an appointment of 12 months, after which three months' written notice must be given by either party. A Director who ceases to hold office is not entitled to receive any payment other than accrued fees (if any) for past services. The same policies will apply if a new Director is appointed.
Details of each Director's contract are shown below. The Chairman is paid more than the other Directors to reflect the additional responsibilities of that role. There are no other fees payable to the Directors for additional services outside of their contracts.
Annual rate
Annual rate of Directors'
Unexpired of Directors' fees if
term of fees if net assets Policy
contract net assets are less on payment
Date of at 31 March exceed GBP25 than GBP25 of loss
Contract 2016 million million of office
GBP GBP
David Frank,
Chairman 11-Nov-10 None 17,500 15,000 None
Simon Acland 12-Mar-09 None 15,000 12,500 None
Michael
Stanes 21-Nov-12 None 15,000 12,500 None
-------------- ------------ -------------- --------------- --------------- ------------
It was agreed that the Directors' remuneration would increase, in the case of David Frank, to GBP17,500 and in the case of the other Directors to GBP15,000 if the Company's net asset value exceeds GBP25 million. After the C share allotment on 28 March 2014 the net asset value exceeded GBP25 million and therefore the annual rate of Directors' fees increased to the higher level.
Annual Remuneration Report
The remuneration policy described above was implemented on 24 July 2014 after approval at the Annual General Meeting and remains unchanged for a three year period. The Board will review the remuneration of the Directors in line with the VCT industry on an annual basis, if thought appropriate. Otherwise, only a change in role is likely to incur a change in remuneration of any one Director.
Directors' Remuneration (audited information)
The fees paid to Directors in respect of the year ended 31 March 2016 and the prior year are shown below:
Emoluments
for the Emoluments
year ended for the year
31 March ended 31
2016 March 2015
GBP GBP
David Frank 17,500 17,500
Simon Acland 15,000 15,000
Michael Stanes 15,000 15,000
47,500 47,500
Employers' NI contributions 1,197 1,261
Total Emoluments 48,697 48,761
------------------------------ ------------ --------------
None of the Directors is eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits in respect of their services as Non-Executive Directors of the Company.
Information required on executive Directors, including the Chief Executive Officer and employees, has been omitted because the Company has neither and therefore it is not relevant.
Directors' emoluments compared to payments to shareholders:
31 March 31 March
2016 2015
GBP'000 GBP'000
Dividends paid:
* Ordinary Shareholders 4,177 -
* A Shareholders 2,310 318
Share buy-backs 11 179
--------- ----------
Total paid to shareholders 6,498 497
--------- ----------
Directors' emoluments 48 48
------------------------------------ --------- ----------
Directors' Share Interests (audited information)
At 31 March 2016 the Directors held no shares in the Company (2015: none). At 31 March 2016 Simon Acland's wife held 48,750 D Class Shares (2015: none). There have been no changes in the holdings of the Directors or their connected parties between 31 March 2016 and the date of this report. There are no requirements or restrictions on Directors holding shares in the Company.
Company Performance
There have been no material trades in the Company's shares in the period under review. Therefore, no performance graph comparing the share price of the Company over the year ended 31 March 2016 with the total return from a notional investment in the FTSE All-Share index over the same period has been included.
No market maker has been appointed and therefore no current bid and offer price is available for the Company's shares. However the Board's policy is to buy back shares from shareholders at a 10% discount to net asset value. The Company will produce a graph of its share performance once there is sufficient activity that the graph would be meaningful to shareholders.
Statement of Voting at the Annual General Meeting
The 2015 Remuneration Report was presented to the Annual General Meeting in July 2015 and received shareholder approval following a vote. 97% of those voting were in favour and no one abstained.
Statement of the Chairman
The Directors' fees are fixed at GBP17,500 for the Chairman and GBP15,000 for each of the other Directors. Directors' fees will stay at these levels as long as the Company's net asset value remains in excess of GBP25 million. If net assets fall below GBP25 million then their fees will reduce to GBP15,000 for the Chairman and GBP12,500 for each of the other Directors. The remuneration of the Directors reflects the experience of the Board as a whole and is fair and comparable with that of other relevant Venture Capital Trusts that are similar in size and have similar investment objectives and structures.
On behalf of the Board
David Frank
Chairman
9 June 2016
Independent Auditor's Report to the Members of Triple Point Income VCT plc
Our opinion on the financial statements is unmodified
In our opinion the financial statements:
* give a true and fair view of the state of the
company's affairs as at 31 March 2016 and of its
profit for the year then ended;
* have been properly prepared in accordance with
International Financial Reporting Standards (IFRSs)
as adopted by the European Union; and
* have been prepared in accordance with the
requirements of the Companies Act 2006.
============================================================
Who we are reporting to
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
What we have audited
Triple Point Income VCT plc's financial statements for the year ended 31 March 2016 comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Shareholders' Equity, the Statement of Cash Flows and the related notes.
The financial reporting framework that has been applied in their preparation is applicable law and IFRSs as adopted by the European Union.
Overview of our audit approach
* Overall materiality: GBP432,000 which represents 1%
of the company's net assets; and
* Key audit risks were identified as valuation of
unquoted investments, revenue recognition and
management override of controls.
=================================================================
Our assessment of risk
In arriving at our opinions set out in this report, we highlight the following risks that, in our judgement, had the greatest effect on our audit:
Audit risk How we responded to the
risk
----------------------------------- ------------------------------------------------------------
Valuation of unquoted investments Our audit work included,
(including assets held but was not restricted
for sale) to:
* Ascertaining an understanding of how the valuations
The company's objective were performed by obtaining the underlying models
is to build a portfolio from the investment manager, discussing the review
of unquoted companies which process and consideration of whether they were made
are cash generative and, in accordance with published guidance, in particular
therefore, capable of producing the IPEVC valuation guidance;
income and capital repayments
to the company prior to
their disposal by the company. * Discussions were held with the investment manager on
Unquoted investments amount, the choice of valuation methodology and assumptions
by value, to 91.7% of the made;
company's total assets,
and are designated as being
at fair value through profit
or loss. Measurement of
the value of an unquoted
investment includes significant
assumptions and judgements.
We therefore identified
the valuation of unquoted
investments as a significant
risk requiring special
audit consideration.
----------------------------------- ------------------------------------------------------------
Audit risk How we responded to the risk
----------------------------------- --------------------------------------------------------------
* Reviewing and challenging the basis and
reasonableness of the assumptions made by the
investment manager in conjunction with available
supporting information, such as the corroboration of
financial inputs to the relevant investee company
management accounts or offer letters from the
potential buyer; and
* Engaging our valuation specialists to test a sample
of investments, their inputs and assumptions.
The company's accounting
policies on non-current asset
investments and assets held
for sale are included in
note 2, and its disclosures
about unquoted investments
held at the year end and
assets held for sale are
included in notes 10 and
11 respectively. The Audit
Committee also identified
and considered the valuation
and existence of unquoted
investments as a key area
of risk in the Corporate
Governance Statement on page
26.
----------------------------------- --------------------------------------------------------------
Revenue recognition
Revenue consists of interest Our audit work included,
earned on loans to investee but was not restricted to:
companies and cash balances, * Identifying and evaluating the design of controls
and dividend income received relating to revenue recognition and undertaking
from investee companies. testing of interest income by comparing the actual to
Revenue is a key factor expected income, calculated using the interest rates
in demonstrating the performance in the loan instruments;
of the portfolio and its
recognition is a key issue.
We therefore identified * Considering, reviewing and testing the
revenue recognition as appropriateness of the accounting policy and whether
a significant risk requiring the accounting policy had been applied correctly; and
special audit consideration.
* For accrued interest income, reviewing management's
assessment of recoverability by checking to post year
end receipts and also discussion with management.
The company's accounting
policy on revenue, including
its recognition, is included
in note 2, and its disclosures
about revenue recognised
in the year are included
in note 4.
----------------------------------- --------------------------------------------------------------
Management override of
controls
Our audit work included,
Under International Standards but was not restricted to:
on Auditing (ISAs) (UK * Tests of journal entries at the year end;
and Ireland), we are required
to perform procedures designed
to address the risk of * Evaluating judgements and assumptions in management's
management override of estimates and their consistent application since
controls. Due to the nature prior periods. The main part of this involved
of this risk we assess judgements and estimates with regards to valuation of
this as a significant risk unquoted investments. Our response to the risk of
requiring special audit valuation of unquoted investments is described above;
consideration. and
* Testing any significant transactions or adjustments
outside of the normal course of business.
----------------------------------- --------------------------------------------------------------
Our application of materiality and an overview of the scope of our audit
Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality in determining the nature, timing and extent of our audit work and in evaluating the results of that work.
We determined materiality for the audit of the financial statements as a whole to be GBP432,000 which is 1% of net assets. This benchmark is considered the most appropriate because net assets, which are primarily composed of the company's investment portfolio, is considered to be the key driver of the company's total return performance.
Materiality for the current year is higher than the level that we determined for the year ended 31 March 2015 to reflect the increase in the measurement percentage, from 0.75% of net assets last year to 1% of net assets for this year. The increase reflects our professional judgement formed considering our understanding of the company and is consistent with the rate we apply to other VCTs of similar size and similar risk profile.
We use a different level of materiality, performance materiality, to drive the extent of our testing and this was set at 75% of financial statement materiality. We also determine a lower level of specific materiality for certain areas such as statement of total comprehensive income, directors' remuneration and related party transactions.
We determined the threshold at which we will communicate misstatements to the audit committee to be GBP21,600. In addition we will communicate misstatements below that threshold that, in our view, warrant reporting on qualitative grounds.
Overview of the scope of our audit
A description of the generic scope of an audit of financial statements is provided on the Financial Reporting Council's website at www.frc.org.uk/auditscopeukprivate.
We conducted our audit in accordance with ISAs (UK and Ireland). Our responsibilities under those standards are further described in the 'Responsibilities for the financial statements and the audit' section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the company in accordance with the Auditing Practices Board's Ethical Standards for Auditors, and we have fulfilled our other ethical responsibilities in accordance with those Ethical Standards.
Our audit approach was based on a thorough understanding of the company's business and is risk-based. The day-to-day management of the company's investment portfolio, the custody of its investments and the maintenance of the company's accounting records is outsourced to Triple Point Investment Management LLP (TPIM), who is the company's investment manager, administrator and secretary. Our audit work included:
-- obtaining an understanding of, and evaluating, internal controls at the company and TPIM. This was achieved through discussions with the clients to update our understanding from previous year and performance of walkthrough procedures; and
-- undertaking substantive testing on significant transactions, balances and disclosures, the extent of which was based on various factors such as our overall assessment of the control environment, the effectiveness of controls over individual systems and the management of specific risks.
Other reporting required by regulations
Our opinion on other matters prescribed by the
Companies Act 2006 is unmodified
In our opinion:
* the part of the Directors' Remuneration Report to be
audited has been properly prepared in accordance with
the Companies Act 2006; and
* the information given in the Strategic Report and
Directors' Report for the financial year for which
the financial statements are prepared is consistent
with the financial statements.
==============================================================
Matters on which we are required to report by exception
Under the Companies Act 2006 we are required to report to you if, in our opinion:
-- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-- the financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Under the Listing Rules, we are required to review:
-- the directors' statements in relation to going concern and longer-term viability, set out on pages 29 and page 10 respectively ; and
-- the part of the Corporate Governance Statement relating to the company's compliance with the provisions of the UK Corporate Governance Code specified for our review.
Under the ISAs (UK and Ireland), we are required to report to you if, in our opinion, information in the annual report is:
-- materially inconsistent with the information in the audited financial statements; or
-- apparently materially incorrect based on, or materially inconsistent with, our knowledge of the company acquired in the course of performing our audit; or
-- otherwise misleading.
In particular, we are required to report to you if:
-- we have identified any inconsistencies between our knowledge acquired during the audit and the directors' statement that they consider the annual report is fair, balanced and understandable; or
-- the annual report does not appropriately disclose those matters that were communicated to the audit committee which we consider should have been disclosed.
We have nothing to report in respect of the above.
We also confirm that we do not have anything material to add or to draw attention to in relation to:
-- the directors' confirmation in the annual report that they have carried out a robust assessment of the principal risks facing the company including those that would threaten its business model, future performance, solvency or liquidity;
-- the disclosures in the annual report that describe those risks and explain how they are being managed or mitigated;
-- the directors' statement in the financial statements about whether they have considered it appropriate to adopt the going concern basis of accounting in preparing them, and their identification of any material uncertainties to the company's ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements; and
-- the directors' explanation in the annual report as to how they have assessed the prospects of the company, over what period they have done so and why they consider that period to be appropriate, and their statement as to whether they have a reasonable expectation that the company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.
Responsibilities for the financial statements and the audit
What the directors are responsible for:
As explained more fully in the Directors' Responsibilities Statement set out on page 30, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.
What we are responsible for:
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and ISAs (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
Nicholas Page
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
9 June 2016
Unaudited Non-Statutory Analysis of - The Ordinary Share Fund
Statement of Comprehensive
Income
Year ended Year ended
Note 31 March 2016 31 March 2015
---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 694 - 694 702 - 702
Realised gain on
investments - 342 342 - - -
Unrealised gain
on investments - 80 80 - 926 926
Investment return 694 422 1,116 702 926 1,628
Investment management
fees (183) (61) (244) (175) (58) (233)
Other expenses (127) (16) (143) (68) - (68)
Profit before taxation 384 345 729 459 868 1,327
Taxation (33) 12 (21) (99) 13 (86)
Profit after taxation 351 357 708 360 881 1,241
-------- -------- -------- -------- -------- --------
Total comprehensive
income for the
year 351 357 708 360 881 1,241
-------- -------- -------- -------- -------- --------
Basic and diluted
earnings per share 9 1.80p 1.84p 3.64p 1.84p 4.50p 6.34p
-------- -------- -------- -------- -------- --------
Balance Sheet Note 31 March 2016 31 March 2015
GBP'000 GBP'000
Non-current assets
Financial assets
at fair value through
profit or loss 11,992 7,887
-------- --------
Current assets
Assets held for
sale 608 8,557
Receivables 333 33
Cash and cash equivalents 326 334
1,267 8,924
-------- --------
Current liabilities
Payables (84) (162)
-------- --------
Net assets 13,175 16,649
-------- --------
Equity attributable
to equity holders 13,175 16,649
-------- --------
Net asset value
per share 17 67.69p 85.49p
-------- --------
Statement of Changes
in Shareholders'
Equity
31 March
31 March 2016 2015
GBP'000 GBP'000
Opening shareholders'
funds 16,649 15,587
Purchase of own
shares (7) (179)
Issue of new shares 3 -
Profit for the
year 708 1,241
Dividends paid (4,178) -
Closing shareholders'
funds 13,175 16,649
-------- --------
Investment Portfolio 31 March 2016 31 March 2015
------------------------------------ ------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted qualifying
holdings 10,646 84.54 11,014 85.21 13,912 88.87 15,064 89.78
Unquoted non-qualifying
holdings 1,618 12.84 1,586 12.27 1,412 9.01 1,380 8.23
Financial assets at
fair value through
profit or loss 12,264 97.38 12,600 97.48 15,324 97.88 16,444 98.01
Cash and cash equivalents 326 2.62 326 2.52 334 2.12 334 1.99
12,590 100.00 12,926 100.00 15,658 100.00 16,778 100.00
======== ======= ======== ======= ======== ======= ======== =======
Unquoted Qualifying
Holdings GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Cinema digitisation
Digima Ltd 1,262 10.02 1,274 9.86 1,262 8.06 1,291 7.69
Digital Screen Solutions
Ltd 2,020 16.04 2,020 15.63 2,020 12.90 2,028 12.09
Solar
Bandspace Ltd - - - - 1,200 7.66 1,650 9.83
Bridge Power Ltd - - - - 125 0.80 167 1.00
Campus Link Ltd - - - - 690 4.41 892 5.32
Convertibox Services
Ltd - - - - 1,000 6.39 1,170 6.97
C More Energy Ltd 1,000 7.94 1,153 8.92 1,000 6.39 1,123 6.69
Green Energy for Education
Ltd 475 3.77 608 4.70 1,000 6.39 1,128 6.72
PJC Renewable Energy
Ltd 5 0.04 5 0.04 5 0.03 5 0.03
Anaerobic Digestion
Biomass Future Generation
Ltd - - - - 1,550 9.90 1,550 9.24
GreenTec Energy Ltd - - - - 1,000 6.39 1,000 5.96
Katharos Organic Ltd - - - - 1,000 6.39 1,000 5.96
Hydro Electric Power
Elementary Energy
Ltd 2,060 16.36 2,130 16.48 2,060 13.16 2,060 12.28
Green Highland Shenval
Ltd 1,624 12.90 1,624 12.56 - - - -
Energy Generation
and Infrastructure
Green Highland Hydro
Generation Ltd 2,200 17.47 2,200 17.02 - - - -
Green Highland Hydro
Power Ltd - - - - - - - -
10,646 84.54 11,014 85.21 13,912 88.87 15,064 89.78
======== ======= ======== ======= ======== ======= ======== =======
Unquoted Non-Qualifying
Holdings GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Crematorium Management
Furnace Managed Services
Ltd 820 6.51 788 6.10 1,020 6.51 988 5.89
Hydro Electric Power
Elementary Energy
Ltd 344 2.73 344 2.66 392 2.50 392 2.34
Green Highland Shenval
Ltd - - - - - - - -
Energy Generation
and Infrastructure
Green Highland Hydro
Generation Ltd 4 0.03 4 0.03 - - - -
SME Lending
Other:
Funding Path Ltd 450 3.57 450 3.48 - - - -
1,618 12.84 1,586 12.27 1,412 9.01 1,380 8.23
======== ======= ======== ======= ======== ======= ======== =======
Unaudited Non-Statutory Analysis of - The A Ordinary Share Fund
Statement of Comprehensive
Income
Year ended Year ended
Note 31 March 2016 31 March 2015
---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 490 - 490 124 - 124
Realised loss on
investments - (362) (362) - (1) (1)
Unrealised (loss)/gain
on investments - (101) (101) - 541 541
Investment return 490 (463) 27 124 540 664
Investment management
fees (39) (13) (52) (53) (17) (70)
Other expenses (10) (4) (14) (18) - (18)
Profit/(loss) before
taxation 441 (480) (39) 53 523 576
Taxation (1) 2 1 (12) 4 (8)
Profit/(loss) after
taxation 440 (478) (38) 41 527 568
-------- -------- -------- -------- -------- --------
Total comprehensive
(loss)/income for
the year 440 (478) (38) 41 527 568
-------- -------- -------- -------- -------- --------
Basic and diluted
(loss)/earnings
per share 9 8.57p (9.29p) (0.72p) 0.82p 10.24p 11.06p
-------- -------- -------- -------- -------- --------
Balance Sheet Note 31 March 2016 31 March 2015
GBP'000 GBP'000
Non-current assets
Financial assets
at fair value through
profit or loss 950 890
-------- --------
Current assets
Assets held for
sale 789 3,298
Receivables 313 5
Cash and cash equivalents 78 301
1,180 3,604
-------- --------
Current liabilities
Payables (12) (29)
-------- --------
Net assets 2,118 4,465
-------- --------
Equity attributable
to equity holders 2,118 4,465
-------- --------
Net asset value
per share 17 41.28p 87.01p
-------- --------
Statement of Changes
in Shareholders' 31 March
Equity 31 March 2016 2015
GBP'000 GBP'000
Opening shareholders'
funds 4,465 4,215
Issue of new shares - -
Profit for the
year (38) 568
Dividends paid (2,309) (318)
Closing shareholders'
funds 2,118 4,465
-------- --------
Investment Portfolio
31 March 2016 31 March 2015
------------------------------------ ------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted qualifying
holdings 875 45.98 789 43.43 3,475 92.03 4,188 93.29
Unquoted non-qualifying
holdings 950 49.92 950 52.28 - - - -
Financial assets at
fair value through
profit or loss 1,825 95.90 1,739 95.71 3,475 92.03 4,188 93.29
Cash and cash equivalents 78 4.10 78 4.29 301 7.97 301 6.71
1,903 100.00 1,817 100.00 3,776 100.00 4,489 100.00
======== ======= ======== ======= ======== ======= ======== =======
Unquoted Qualifying
Holdings GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Electricity Generation
Solar
Arraze Ltd - - - - 600 15.89 800 17.82
Bridge Power Ltd - - - - 600 15.89 801 17.84
Core Generation Ltd - - - - 600 15.89 823 18.33
Trym Power Ltd - - - - 200 5.30 274 6.10
Anaerobic Digestion -
BioMass Future Generation
Ltd - - - - 600 15.89 600 13.37
Landfill Gas* -
Aeris Power Ltd 525 27.59 424 23.34 525 13.90 525 11.70
Craigahulliar Energy
Ltd 350 18.39 365 20.09 350 9.27 365 8.13
875 45.98 789 43.43 3,475 92.03 4,188 93.29
======== ======= ======== ======= ======== ======= ======== =======
Unquoted Non-Qualifying
Holdings GBP'000 % GBP'000 % GBP'000 % GBP'000 %
SME Lending
Other: - -
Funding Path Ltd 950 49.92 950 52.28 - - - -
950 49.92 950 52.28 - - - -
======== ======= ======== ======= ======== ======= ======== =======
* Assets held for sale
Unaudited Non-Statutory Analysis of - The C Ordinary Share Fund
Statement of Comprehensive
Income Year ended Year ended
Note 31 March 2016 31 March 2015
---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 832 - 832 467 - 467
Unrealised gain
on investments - 325 325 - - -
Investment return 832 325 1,157 467 - 467
Investment management
fees (230) (77) (307) (217) (72) (289)
Other expenses (43) - (43) (51) - (51)
Profit/(loss) before
taxation 559 248 807 199 (72) 127
Taxation (113) 15 (98) (40) 14 (26)
Profit/(loss) after
taxation 446 263 709 159 (58) 101
-------- -------- -------- -------- -------- --------
Total comprehensive
income for the year 446 263 709 159 (58) 101
-------- -------- -------- -------- -------- --------
Basic and diluted
earnings/(loss)
per share 9 3.31p 1.96p 5.27p 1.22p (0.44p) 0.78p
-------- -------- -------- -------- -------- --------
Balance Sheet Note 31 March 2016 31 March 2015
GBP'000 GBP'000
Non current assets
Financial assets
at fair value through
profit or loss 14,132 13,126
-------- --------
Current assets
Receivables 2 65
Cash and cash equivalents 246 331
248 396
-------- --------
Current liabilities
Payables (262) (113)
-------- --------
Net assets 14,118 13,409
-------- --------
Equity attributable
to equity holders 14,118 13,409
-------- --------
Net asset value
per share 17 105.03p 99.76p
-------- --------
Statement of Changes
in Shareholders' 31 March
Equity 31 March 2016 2015
GBP'000 GBP'000
Opening shareholders'
funds 13,409 6,873
Issue of new shares - 6,435
Profit for the year 709 101
Closing shareholders'
funds 14,118 13,409
-------- --------
Investment Portfolio
31 March 2016 31 March 2015
---------------------------------------------- ----------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted qualifying
holdings 9,430 67.10 9,755 67.85 9,430 70.07 9,430 70.07
Unquoted
non-qualifying
holdings 4,377 31.15 4,377 30.45 3,696 27.45 3,696 27.45
Financial assets
at fair value
through profit
or loss 13,807 98.25 14,132 98.30 13,126 97.52 13,126 97.52
Cash and cash
equivalents 246 1.75 246 1.70 331 2.48 331 2.48
14,053 100.00 14,378 100.00 13,457 100.00 13,457 100.00
========= ======== =============== ======== ========= ======== ========= ========
Unquoted Qualifying
Holdings GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Hydro Electric
Power
Green Highland
Allt Choire A
Bhalachain (225)
Ltd 3,130 22.27 3,130 21.77 3,130 23.26 3,130 23.26
Green Highland
Allt Phocachain
(1015) Ltd 2,000 14.23 2,000 13.91 2,000 14.86 2,000 14.86
Green Highland
Renewables
(Achnacarry)
Ltd 4,300 30.60 4,625 32.17 4,300 31.95 4,300 31.95
9,430 67.10 9,755 67.85 9,430 70.07 9,430 70.07
========= ======== =============== ======== ========= ======== ========= ========
Unquoted
Non-Qualifying
Holdings GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Hydro Electric
Power
Green Highland
Allt Choire A
Bhalachain (225)
Ltd 341 2.43 341 2.37 162 1.20 162 1.20
Green Highland
Allt Garbh Ltd
ST Loan 30 0.21 30 0.21 30 0.22 30 0.22
Green Highland
Allt GNF (385)
ST Loan - - - - 30 0.22 30 0.22
Green Highland
Allt Phocachain
(1015) Ltd 175 1.25 175 1.22 54 0.40 54 0.40
Green Highland
Renewables
(Achnacarry)
Ltd 133 0.95 133 0.93 - - - -
SME Lending and
Investment
Hydro Electric
Power: -
Broadpoint 2
Ltd 2,894 20.59 2,894 20.13 3,420 25.41 3,420 25.41
Broadpoint 3
Ltd 804 5.72 804 5.59 - - - -
4,377 31.15 4,377 30.45 3,696 27.45 3,696 27.45
========= ======== =============== ======== ========= ======== ========= ========
Unaudited Non-Statutory Analysis of - The D Ordinary Share Fund
Statement of Comprehensive
Income
Year ended Year ended
Note 31 March 2016 31 March 2015
---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 687 - 687 20 - 20
Realised gain on
investments - 1 1 - - -
Investment return 687 1 688 20 - 20
Investment management
fees (141) (46) (187) (15) (5) (20)
Other expenses (76) (48) (124) (9) - (9)
Profit/(loss) before
taxation 470 (93) 377 (4) (5) (9)
Taxation (94) 9 (85) 1 1 2
Profit/(loss) after
taxation 376 (84) 292 (3) (4) (7)
-------- -------- -------- -------- -------- --------
Total comprehensive
income/(loss) for
the year 376 (84) 292 (3) (4) (7)
-------- -------- -------- -------- -------- --------
Basic and diluted
earnings/(loss)
per share 9 2.82p (0.63p) 2.19p (0.28p) (0.44p) (0.72p)
-------- -------- -------- -------- -------- --------
Balance Sheet Note 31 March 2016 31 March 2015
GBP'000 GBP'000
Non current assets
Financial assets
at fair value through
profit or loss 13,090 7,432
-------- --------
Current assets
Receivables 561 62
Cash and cash equivalents 382 27
943 89
-------- --------
Current liabilities
Payables (158) (2,323)
-------- --------
Net assets 13,875 5,198
-------- --------
Equity attributable
to equity holders 13,875 5,198
-------- --------
Net asset value
per share 17 101.26p 98.15p
-------- --------
Statement of Changes
in Shareholders' 31 March
Equity 31 March 2016 2015
GBP'000 GBP'000
Opening shareholders'
funds 5,198 -
Issue of new shares 8,385 5,205
Profit/(loss) for
the year 292 (7)
Closing shareholders'
funds 13,875 5,198
-------- --------
Investment Portfolio
31 March 2016 31 March 2015
------------------------------------ ------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted qualifying
holdings 10,137 75.25 10,137 75.25 7,427 99.57 7,427 99.57
Unquoted non-qualifying
holdings 2,953 21.92 2,953 21.92 5 0.07 5 0.07
-------- ------- -------- -------
Financial assets at
fair value through
profit or loss 13,090 97.17 13,090 97.17 7,432 99.64 7,432 99.64
Cash and cash equivalents 382 2.83 382 2.83 27 0.36 27 0.36
13,472 100.00 13,472 100.00 7,459 100.00 7,459 100.00
======== ======= ======== ======= ======== ======= ======== =======
Unquoted Qualifying
Holdings GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Hydro Electric Power
Green Highland Allt
Garbh Ltd 2,710 20.12 2,710 20.12 - - - -
Green Highland Allt
Ladaidh (1148) Ltd 3,500 25.98 3,500 25.98 3,500 46.92 3,500 46.92
Green Highland Allt
Luaidhe (228) Ltd 1,995 14.81 1,995 14.81 1,995 26.75 1,995 26.75
Green Highland Allt
Phocachain (1015)
Ltd 1,932 14.34 1,932 14.34 1,932 25.90 1,932 25.90
10,137 75.25 10,137 75.25 7,427 99.57 7,427 99.57
======== ======= ======== ======= ======== ======= ======== =======
Unquoted Non-Qualifying
Holdings GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Hydro Electric Power
Green Highland Allt
Luaidhe (228) Ltd 185 1.37 185 1.37 5 0.07 5 0.07
Kinlochteacius Hydro
Limited 762 5.66 762 5.66 - - - -
SME Lending and Investment - - - -
Hydro Electric Power:
Broadpoint 3 Ltd 1,206 8.95 1,206 8.95 - - - -
Other:
Funding Path Ltd 800 5.94 800 5.94 - - - -
2,953 21.92 2,953 21.92 5 0.07 5 0.07
======== ======= ======== ======= ======== ======= ======== =======
Statement of Comprehensive Income
For the year ended 31 March 2016
Year ended Year ended
31 March 31 March
2016 2015
---------------------------- ----------------------------
Note Rev. Cap. Total Rev. Cap. Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income
Investment income 4 2,703 - 2,703 1,313 - 1,313
(Loss) arising on the
disposal of investments
during the year - (19) (19) - (1) (1)
Gain arising on the revaluation
of investments at the
year end - 304 304 - 1,467 1,467
Investment return 2,703 285 2,988 1,313 1,466 2,779
-------- -------- -------- -------- -------- --------
Expenses
Investment management
fees 5 593 197 790 460 152 612
Financial and regulatory
costs 24 - 24 23 - 23
General administration 16 - 16 15 - 15
Legal and professional
fees 6 55 68 123 54 - 54
Directors' remuneration 7 48 - 48 48 - 48
Interest payable 113 - 113 6 - 6
Operating expenses 849 265 1,114 606 152 758
-------- -------- -------- -------- -------- --------
Profit before taxation 1,854 20 1,874 707 1,314 2,021
Taxation 8 (241) 38 (203) (150) 32 (118)
Profit after taxation 1,613 58 1,671 557 1,346 1,903
-------- -------- -------- -------- -------- --------
Profit and total comprehensive
income for the year 1,613 58 1,671 557 1,346 1,903
-------- -------- -------- -------- -------- --------
Basic and diluted earnings
per share n/a n/a n/a n/a n/a n/a
-------- -------- -------- -------- -------- --------
The total column of this statement is the Statement of Comprehensive Income of the Company prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The supplementary revenue return and capital columns have been prepared in accordance with the Association of Investment Companies Statement of Recommended Practice (AIC SORP 2014).
All revenue and capital items in the above statement derive from continuing operations.
This Statement of Comprehensive Income includes all recognised gains and losses.
The accompanying notes are an integral part of these statements.
Balance Sheet
at 31 March 2016
31 March 31 March
2016 2015
Note GBP'000 GBP'000
Non-current assets
Financial assets
at fair value through
profit or loss 10 40,164 29,335
--------- ---------
Current assets
Assets held for
sale 11 1,397 11,855
Receivables 12 1,210 165
Cash and cash equivalents 13 1,032 993
3,639 13,013
--------- ---------
Total Assets 43,803 42,348
--------- ---------
Current liabilities
Payables and accrued
expenses 14 316 2,511
Current taxation
payable 201 116
517 2,627
--------- ---------
Net Assets 43,286 39,721
========= =========
Equity attributable
to equity holders
Share capital 15 518 434
Share redemption
reserve 2 451
Share premium 16,307 32,405
Special distributable
reserve 27,447 6,997
Capital reserve (1,515) (1,573)
Revenue reserve 527 1,007
Total equity 43,286 39,721
========= =========
The statements were approved by the Directors and authorised for issue on 9 June 2016 and are signed on their behalf by:
David Frank
Chairman
9 June 2016
Company registration number 6421083.
The accompanying notes are an integral part of this statement.
Statement of Changes in Shareholders' Equity
For the year ended 31 March 2016
Share Special
Issued Redemption Share Distributable Capital Revenue
Capital Reserve Premium Reserve Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 31
March 2016
Opening balance 434 451 32,405 6,997 (1,573) 1,007 39,721
--------- ------------ --------- --------------- --------- --------- --------
Issue of new
shares 84 - 8,687 (383) - - 8,388
Purchase of own
shares - - - (7) - - (7)
Cancellation
of share premium
and share redemption - (449) (24,785) 25,234 - - -
Dividends paid - - - (4,394) - (2,093) (6,487)
Transactions
with owners 84 (449) (16,098) 20,450 - (2,093) 1,894
--------- ------------ --------- --------------- --------- --------- --------
Profit for the
year - - - - 58 1,613 1,671
Other comprehensive
income - - - - - - -
Profit and total
comprehensive
income for the
year - - - - 58 1,613 1,671
--------- ------------ --------- --------------- --------- --------- --------
Balance at 31
March 2016 518 2 16,307 27,447 (1,515) 527 43,286
========= ============ ========= =============== ========= ========= ========
Capital reserve
consists of:
Investment holding
gains 575
Other realised losses (2,090)
(1,515)
=========
Year ended 31
March 2015
Opening balance 318 449 20,875 7,502 (2,919) 450 26,675
--------- ------------ --------- --------------- --------- --------- --------
Issue of new
shares 118 - 11,530 (8) - - 11,640
Purchase of own
shares (2) 2 - (179) - - (179)
Dividend paid - - - (318) - - (318)
Transactions
with owners 116 2 11,530 (505) - - 11,143
Profit for the
year - - - 1,346 557 1,903
Profit and total comprehensive
income for the year - - - 1,346 557 1,903
Balance at 31
March 2015 434 451 32,405 6,997 (1,573) 1,007 39,721
Capital reserve consists of:
Investment holding
gains 1,833
Other realised
losses (3,406)
(1,573)
The capital reserve represents the proportion of Investment Management fees charged against capital and realised/unrealised gains or losses on the disposal/revaluation of investments. The unrealised capital reserve, share redemption reserve and share premium reserve are not distributable. The special distributable reserve was created on court cancellation of the share premium account. The revenue, special distributable and realised capital reserves are distributable by way of dividend.
Statement of Cash Flows
For the year ended 31 March 2016
Year ended Year ended
31 March 2016 31 March 2015
GBP'000 GBP'000
Cash flows from operating activities
Profit before taxation 1,874 2,021
Loss arising on the disposal of investments during the period 19 1
(Gain) arising on the revaluation of investments at the period end (304) (1,467)
Cash flow generated by operations 1,589 555
(Increase)/decrease in receivables (428) 5
(Decrease)/Increase in payables (2,196) 2,353
Taxation (118) (102)
Net cash flows from operating activities (1,153) 2,811
Cash flow from investing activities
Purchase of financial assets at fair value through profit or loss (16,707) (20,907)
Proceeds of sale of financial assets at fair value through profit or loss 16,005 520
Net cash flows from investing activities (702) (20,387)
Cash flows from financing activities
Issue of new shares 8,388 11,640
Purchase of own shares (7) (179)
Dividends paid (6,487) (318)
Net cash flows from financing activities 1,894 11,143
Net increase/(decrease) in cash and cash equivalents 39 (6,433)
Reconciliation of net cash flow to movements in cash and cash equivalents
Opening cash and cash equivalents 993 7,426
Net increase/(decrease) in cash and cash equivalents 39 (6,433)
Closing cash and cash equivalents 1,032 993
The accompanying notes are an integral part of these statements.
Notes to the Financial Statements
1. Corporate Information
The Financial Statements of the Company for the year ended 31 March 2016 were authorised for issue in accordance with a resolution of the Directors on 9 June 2016.
The Company was admitted for listing on the London Stock Exchange on 6 February 2008.
The Company is incorporated and domiciled in Great Britain and registered in England and Wales. The address of its registered office, which is also its principal place of business, is 18 St Swithin's Lane, London EC4N 8AD.
The Company is required to nominate a functional currency, being the currency in which the Company predominately operates. The functional and reporting currency is sterling, reflecting the primary economic environment in which the Company operates.
The principal activity of the Company is investment. The Company's investment strategy is that at least 70% of the Company's net assets are or will be invested in VCT qualifying unquoted companies. The remaining assets are exposed either to cash or cash-based similar liquid investments or investments originated in line with the Company's VCT Qualifying Investment Policy.
2. Basis of Preparation and Accounting Policies
Basis of Preparation
After making the necessary enquiries, the Directors confirm that they are satisfied that the Company has adequate resources to continue in business for the foreseeable future. The Board receives regular reports from the Investment Manager and the Directors believe that, as no material uncertainties leading to significant doubt about going concern have been identified, it is appropriate to continue to apply the going concern basis in preparing the Financial Statements.
The Company entered into one loan agreement during the year to enhance short term liquidity. It is not anticipated that borrowings or banking facilities will be required in the future.
The Financial Statements of the Company for the year to 31 March 2016 have been prepared in accordance with International Financial Reporting Standards ("IFRS") adopted for use in the European Union and complied with the Statement of Recommended Practice: "Financial Statements of Investment Trust Companies and Venture Capital Trusts" (SORP) issued by the Association of Investment Companies (AIC) in November 2014, in so far as this does not conflict with IFRS.
The Financial Statements are prepared on a historical cost basis except that investments are shown at fair value through profit or loss.
The preparation of Financial Statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these judgements.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities relate to:
-- the valuation of unlisted financial investments held at fair value through profit or loss, which are valued on the basis noted below (under the heading Non Current Asset Investments) and in note 10.
-- the recognition or otherwise of accrued income on loan notes and similar instruments granted to investee companies which is assessed in conjunction with the overall valuation of unlisted financial investments as noted above.
The key judgements made by Directors are in the valuation of unquoted investments. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects that period or in the period of revision and future periods if the revision affects both current and future periods. The carrying value of investments is disclosed in note 10 and 11.
The Directors do not believe that there are any further key judgements made in applying accounting policies or estimates in respect of the Financial Statements.
These Financial Statements have been prepared in accordance with the accounting policies set out below which are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU).
These accounting policies have been applied consistently in preparing these Financial Statements.
Standards issued but not yet effective
The following new standards, amendments to standards and interpretations are not yet effective for the year ended 31 March 2016, and have not been applied in preparing these Financial Statements.
-- IFRS 9 Financial Instruments (effective 1 January 2018)
-- IFRS 14 Regulatory Deferral Accounts (effective 1 January 2016)
-- Amendments to IFRS 11: Accounting for Acquisitions of Interests in Joint Operations (effective 1 January 2016)
-- Annual Improvements to IFRSs 2012-2014 Cycle (effective 1 January 2016)
-- Amendments to IAS 27: Equity Method in Separate Financial Statements (effective 1 January 2016)
-- Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - Amendments to IFRS 10
and IAS 28 (effective 1 January 2016)
All of these changes will be applied by the Company from the effective date but none of them are expected to have a significant impact on the Company's Financial Statements.
Presentation of Statement of Comprehensive Income
In order better to reflect the activities of a Venture Capital Trust, and in accordance with the guidance issued by the Association of Investment Companies, supplementary information which analyses the Statement of Comprehensive Income between items of a revenue and capital nature has been presented alongside the Income Statement.
Capital Management
Capital management is monitored and controlled using the internal control procedures set out on page 28. The capital being managed includes equity and fixed interest VCT qualifying investments, cash balances and liquid resources including debtors and creditors.
The Company's objectives when managing capital are:
-- to safeguard its ability to continue as a going concern, so that it can continue to provide returns to shareholders and benefits for other stakeholders;
-- to ensure sufficient liquid resources are available to meet the funding requirements of its investments and to fund new investments where identified.
-- to enter into short term finance only to enhance short term liquidity.
All capital is represented by the value of share capital, distributable and other reserves. Total Shareholder equity at 31 March 2016 was GBP43.3 million (2015: GBP39.7 million).
Non-Current Asset Investments
The Company invests in financial assets with a view to profiting from their total return through income and capital growth. These investments are managed and their performance is evaluated on a fair value basis in accordance with the investment policy detailed in the Strategic Report on pages 4 and 5 and information about the portfolio is provided internally on that basis to the Company's Board of Directors. Accordingly upon initial recognition the investments are designated by the Company as "at fair value through profit or loss" in accordance with IAS39 "Financial instruments recognition and measurement". They are included initially at fair value, which is taken to be their cost (excluding expenses incidental to the acquisition which are written off in the Statement of Comprehensive Income and allocated to "capital" at the time of acquisition). Subsequently the investments are valued at "fair value" which is the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. This is measured as follows:
-- unlisted investments are fair valued by the Directors in accordance with the International Private Equity and Venture Capital Valuation Guidelines. Fair value is established by using measurements of value such as price of recent transactions, discounted cash flows, cost, and initial cost of investment.
-- listed investments are fair valued at bid price on the relevant date.
Where securities are designated upon initial recognition as at fair value through profit or loss, gains and losses arising from changes in fair value are included in the Statement of Comprehensive Income for the year as capital items in accordance with the AIC SORP 2014. The profit or loss on disposal is calculated net of transaction costs of disposal.
Investments are recognised as financial assets on legal completion of the investment contract and are de-recognised on legal completion of the sale of an investment.
Assets Held for Sale
Current assets classified as held for sale are presented separately and measured at the value expected to be realised on disposal, which is equivalent to fair value.
Income
Investment income includes interest earned on bank balances and investment loans and includes income tax withheld at source. Dividend income is shown net of any related tax credit and is brought into account on the ex-dividend date.
Fixed returns on investment loans and debt are recognised on a time apportionment basis so as to reflect the effective yield, provided there is no reasonable doubt that payment will be received in due course.
Expenses
All expenses are accounted for on the accruals basis. Expenses are charged to revenue with the exception of the investment management fee, which has been charged 75% to the revenue account and 25% to the capital account (2015: 75% revenue, 25% capital) to reflect, in the Directors' opinion, the expected long term split of returns in the form of income and capital gains respectively from the investment portfolio.
The Company's general expenses are split between the share classes using their net asset value divided by the Company's net asset value.
Taxation
Corporation tax payable is applied to profits chargeable to corporation tax, if any, at the current rate in accordance with IAS 12 "Income Taxes". The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue on the "marginal" basis as recommended by the AIC SORP 2014.
In accordance with IAS 12, deferred tax is recognised using the balance sheet method providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. The Directors have considered the requirements of IAS 12 and do not believe that any provision should be made.
Financial Instruments
The Company's principal financial assets are its investments and the accounting policies in relation to those assets are set out above. Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities. Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.
Issued Share Capital
Ordinary Shares are classified as equity because they do not contain an obligation to transfer cash or another financial asset. Issue costs associated with the allotment of shares have been deducted from the share premium account in accordance with IAS 32.
Cash and Cash Equivalents
Cash and cash equivalents representing cash available at less than 3 months' notice are classified as loans and receivables under IAS 39.
Reserves
The revenue reserve (retained earnings) and capital reserve reflect the guidance in the AIC SORP 2014. The capital reserve represents the proportion of Investment Management fees charged against capital and realised/unrealised gains or losses on the disposal/revaluation of investments. The unrealised capital reserve, share redemption reserve and share premium reserve are not distributable. The special distributable reserve was created on court cancellation of the share premium account. The revenue, special distributable and realised capital reserves are distributable by way of dividend.
3. Segmental Reporting
The Company only has one class of business, being investment activity. All revenues and assets are generated and held in the UK.
4. Investment Income
Year ended Year ended
31 March 2016 31 March 2015
Ord. A C D Ord. A C D
Shares Shares Shares Shares Total Shares Shares Shares Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loan stock interest 458 55 828 683 2,024 690 121 458 20 1,289
Dividends received 232 434 - - 666 - - - - -
Interest receivable on
bank balances 4 1 4 4 13 12 3 9 - 24
694 490 832 687 2,703 702 124 467 20 1,313
5. Investment Management Fees
TPIM provides investment management and administration services to the Company under an Investment Management Agreement effective 6 February 2008 and two deeds of variation to that agreement effective 21 November 2012 and 28 October 2014. The agreement provides for an administration and investment management fee of 1.75% per annum of net assets payable quarterly in arrear for both Ordinary Shares and A Shares. For the Ordinary Shares issued under the 2007 offer the agreement ran until 6 February 2014 after which the management fee proportion of 1.5% has not been charged. For all other Ordinary Shares the appointment shall continue until at least 30 April 2018. For A Shares the appointment shall continue until at least 30 April 2017. The agreement provides for an administration and investment management fee of 2.25% per annum of net assets payable quarterly in arrear for C Shares and D Shares. For C Shares and D Shares the appointment shall continue for a period of at least 6 years from the admission of those shares.
6. Legal and Professional Fees
Legal and professional fees include remuneration paid to the Company's auditor, Grant Thornton UK LLP as shown in the following table:
Year ended Year ended
31 March 2016 31 March 2015
Ord. A C D Ord. A C D
Shares Shares Shares Shares Total Shares Shares Shares Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fees payable to the
Company's auditor:
- for the audit of the
financial statements 10 2 8 7 27 11 3 8 1 23
- for taxation compliance
services 1 - 1 1 3 1 - 1 - 2
11 2 9 8 30 12 3 9 1 25
7. Directors' Remuneration
Year ended Year ended
31 March 2016 31 March 2015
Ord. A C D Ord. A C D
Shares Shares Shares Shares Total Shares Shares Shares Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
David Frank 6 2 5 5 18 9 2 7 - 18
Simon Acland 5 1 4 5 15 7 2 6 - 15
Michael Stanes 6 1 5 3 15 7 2 5 1 15
Total 17 4 14 13 48 23 6 18 1 48
The only remuneration received by the Directors was their Directors' fees. The Company has no employees other than the Non-Executive Directors. The average number of Non-Executive Directors in the year was three. Full disclosure of Directors' remuneration is included in the Directors' Remuneration report.
8. Taxation
Year ended Year ended
31 March 2016 31 March 2015
Ord. A C D Ord. A C D
Shares Shares Shares Shares Total Shares Shares Shares Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Profit/(loss) on ordinary
activities before tax 729 (39) 807 377 1,874 1,327 576 127 (9) 2,021
Corporation tax @ 20% 146 (8) 162 75 375 265 115 26 (2) 404
Effect of: - -
Capital (gains)/losses not
taxable (84) 93 (65) - (56) (185) (108) - - (293)
Income received not
taxable (46) (87) - - (133) - - - - -
Disallowed expenditure 3 1 10 14 - - - - -
Unrelieved tax losses
arising in the year (1) - (1) - - - - -
Prior year adjustment 3 - 1 - 4 6 1 - - 7
Tax charge/credit 21 (1) 98 85 203 86 8 26 (2) 118
Capital gains and losses are exempt from corporation tax due to the Company's status as a Venture Capital Trust.
9. Earnings/(loss) per Share
Earnings per Ordinary Share are 3.69p based on the profit after tax of GBP708,000 (2015: GBP1,241,000) and on the weighted average number of shares in issue during the period of 19,474,787 (2015:19,573,483). Loss per A Share is 0.72p based on the loss after tax of GBP38,000 (2015: profit GBP568,000) and on the weighted average number of shares in issue during the period of 5,131,353 (2015: 5,131,353). The earnings per C Share are 5.27p based on the profit after tax of GBP709,000 (2015: GBP101,000) and on the weighted average number of shares in issue during the period of 13,441,438 (2015: 13,010,787). The earnings per D Share are 2.19p based on the profit after tax of GBP292,000 (2015: loss GBP7,000) and on the weighted average number of shares in issue during the period of 13,325,044 (2015: 881,097).
The weighted average number of shares in issue during the period for the Ordinary Shares, the A Shares, the C Shares and the D Shares were:
Ordinary Shares A Shares
Shares No. Of Weighted Shares No. Of Weighted
Issued Days Average Issued Days Average
Current Year
01-Apr-15 19,474,883 366 19,474,883 5,131,353 366 5,131,353
29-Mar-16 (11,763) 3 (96) 3
31-Mar-16 19,463,120 366 19,474,787 5,131,353 366 5,131,353
C Shares D Shares
Shares No. Of Weighted Shares No. Of Weighted
Issued Days Average Issued Days Average
Current Year
01-Apr-15 13,441,438 366 13,441,438 8,467,598 366 8,467,598
02-Apr-15 - 365 - 382,400 365 381,355
14-Apr-15 - 353 - 579,246 353 558,672
01-May-15 - 336 - 4,097,567 336 3,761,701
11-May-15 - 326 - 174,825 326 155,718
31-Mar-16 13,441,438 366 13,441,438 13,701,636 366 13,325,044
There are no potentially dilutive capital instruments in issue and, therefore, no diluted return per share figures are included in these Financial Statements.
10. Financial Assets at Fair Value through Profit or Loss
Investments
Fair Value Hierarchy:
Level 1: quoted prices on active markets for identical assets or liabilities. The fair value of financial instruments traded on active markets is based on quoted market prices at the balance sheet date. A market is regarded as active where the market in which transactions for the asset or liability takes place with sufficient frequency and volume to provide pricing information on an ongoing basis. The quoted market price used for financial assets held by the Company is the current bid price. These instruments are included in level 1.
Level 2: the fair value of financial instruments that are not traded on active markets is determined by using valuation techniques. These valuation techniques maximise the use of observable inputs including market data where it is available either directly or indirectly and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: the fair value of financial instruments that are not traded on an active market (for example, investments in unquoted companies) is determined by using valuation techniques such as discounted cash flows. If one or more of the significant inputs is based on unobservable inputs including market data, the instrument is included in level 3.
There have been no transfers between these classifications in the period. Any change in fair value is recognised through the Statement of Comprehensive Income.
Further details of these investments are provided in the Investment Manager's Review and Investment Portfolio.
The Company's Investment Manager performs valuations of financial items for financial reporting purposes, including Level 3 fair values. Valuation techniques are selected based on the characteristics of each instrument, with the overall objective of maximising the use of market-based information.
Level 3 valuations include assumptions based on non-observable data with the majority of investments being valued on discounted cash flows or price of recent transactions.
Valuation techniques and unobservable inputs:
Inter relationship between significant
unobservable inputs and fair value
Sector Valuation Techniques Significant unobservable inputs measurement
Estimated fair value would
increase/(decrease) if:
Cinema
Digitisation * Discounted cash flows: The valuation model considers * Discount rate 4.50% * The discount rate was lower/(higher)
the present value of expected payment, discounted
using a risk-adjusted discount rate.
Hydro
Electric * Discounted cash flows: The valuation model considers * Discount rate between 9% and 11.10% * The discount rate was lower/(higher)
Power the present value of expected payment, discounted
using a risk-adjusted discount rate.
* Inflation rate 2%
* The inflation rate was higher/(lower)
Solar
* Discounted cash flows: The valuation model considers * Discount rate 8% * The discount rate was lower/(higher)
the present value of expected payment, discounted
using a risk-adjusted discount rate.
* The inflation rate was higher/(lower)
* Inflation rate 2%
Consideration has been given whether the effect of changing one or more inputs to reasonably possible alternative assumptions would result in a significant change to the fair value measurement. Each unquoted portfolio company has been reviewed in order to identify the sensitivity of the valuation methodology to using alternative assumptions.
Where discount rates have been applied to the unquoted investments, alternative discount rates have been considered. Two alternative scenarios for each investment have been modelled, a more prudent assumption (downside case) and a more optimistic assumption (upside case). Applying the downside alternative, the aggregate change in value of the unquoted investments would be GBP1.3 million or 6.3 per cent lower. Using the upside alternative the aggregate value of the unquoted investments would be GBP2.5 million or 12 per cent higher.
Movements in investments held at fair value through the profit or loss during the year to 31 March 2016 were as follows:
Year ended 31 March 2016 Level 3 Unquoted Investments
Ord Shares A Shares C Shares D Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening cost 7,759 875 13,126 7,432 29,192
Opening investment holding losses 128 15 - - 143
Opening fair value 7,887 890 13,126 7,432 29,335
Purchases at cost 5,878 950 1,511 8,368 16,707
Disposal proceeds (1,849) - (830) (2,711) (5,390)
Realised gains 1 - - 1 2
Investment holding gains 75 (101) 325 - 299
Reclassification as assets held for sale - (789) - - (789)
Closing fair value at 31 March 2016 11,992 950 14,132 13,090 40,164
Closing cost 11,789 950 13,807 13,090 39,636
Closing investment holding gains 203 - 325 - 528
Year ended 31 March 2015 Level 3 Unquoted Investments
Ord Shares A Shares C Shares D Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening cost 15,275 3,696 - - 18,971
Opening investment holding (losses)/gains 194 172 - - 366
Opening fair value 15,469 3,868 - - 19,337
Purchases at cost 199 - 13,276 7,432 20,907
Disposal proceeds (150) (220) (150) - (520)
Realised gains/(losses) - (1) - - (1)
Investment holding losses 926 541 - - 1,467
Reclassification as assets held for sale (8,557) (3,298) - - (11,855) Closing fair value at 31 March 2015 7,887 890 13,126 7,432 29,335 Closing cost 7,759 875 13,126 7,432 29,192 Closing investment holding losses 128 15 - - 143
All investments are designated as fair value through the profit or loss at the time of acquisition and all capital gains or losses arising on investments are so designated. Given the nature of the Company's venture capital investments, the changes in fair values of such investments recognised in these Financial Statements are not considered to be readily convertible to cash in full at the balance sheet date and accordingly any gains or losses on these items are treated as unrealised.
Material disposals during the year
Investee Company Cost Disposal Realised Gain
GBP'000 GBP'000 GBP'000
Green Highland Hydro Power Ltd 1,600 1,601 1
Green Highland AGN Fiadh (365) Ltd 2,710 2,711 1
Broadpoint 2 Ltd 800 800 -
Furnace Managed Services Ltd 200 200 -
5,310 5,312 2
11. Assets Held for Sale
31 March 2016 31 March 2015
Ord. Ord.
Shares A Shares C Shares D Shares Total Shares A Shares C Shares D Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Landfill Gas
Aeris Power
Ltd - 424 - - 424 - - - - -
Craigahulliar
Energy Ltd - 365 - - 365 - - - - -
Solar
Arraze Ltd - - - - - 800 - - 800
Bandspace Ltd - - - - - 1,650 - - - 1,650
Bridge Power
Ltd - - - - - 167 801 - - 968
Campus Link
Ltd - - - - - 892 - - - 892
Convertibox
Services Ltd - - - - - 1,170 - - - 1,170
Core
Generation
Ltd - - - - - - 823 - - 823
Green Energy
for Education
Ltd 608 - - - 608 1,128 - - - 1,128
Trym Power Ltd - - - - - - 274 - - 274
Anaerobic
Digestion
Biomass Future
Generation
Ltd - - - - - 1,550 600 - - 2,150
GreenTec
Energy Ltd - - - - - 1,000 - - - 1,000
Katharos
Organic Ltd - - - - - 1,000 - - - 1,000
608 789 - - 1,397 8,557 3,298 - - 11,855
The Landfill Gas companies that were previously treated as Financial Assets at Fair Value through profit or loss have been reclassified as Financial Assets Held for Sale as at 29 February 2016 following the Investment Manager's commitment to sell these companies. A third party buyer has been identified and negotiations are taking place and it is highly probable that a sale will complete within 12 months.
Assets held for Sale are measured at fair value through profit and loss at the discounted price expected to be achieved through the expected sale after the year end.
During June 2015 the investee companies which generated renewable electricity from residential solar PV panels were sold and as a result of this sale, a total of GBP7.1 million was realised, of which GBP0.7 million was received as dividend income and not included in the table below but treated as investment income.
* The Company's investments in three Anaerobic Digestion businesses were sold in June 2015. The sale realised GBP4.8 million which contributed to an uplift of 2.75p per Ordinary Share and 1.76p per A Share, equivalent to GBP646,000.
Material disposals during the year
Investee Company Cost Opening Valuation Disposal Realised Gain/(loss)
**Solar GBP'000 GBP'000 GBP'000 GBP'000
Arraze Ltd 600 800 677 (123)
Bandspace Ltd 1,200 1,650 1,460 (190)
Bridge Power Ltd 725 968 805 (163)
Campus Link Ltd 690 892 901 9
Convertibox Services Ltd 1,000 1,170 1,165 (5)
Core Generation Ltd 600 823 652 (171)
Green Energy for Education Ltd 525 525 525 0
Trym Power Ltd 200 274 250 (24)
* Anaerobic Digestion
Biomass Future Generation Ltd 2,150 2,150 2,484 334
GreenTec Energy Ltd 1,000 1,000 1,156 156
Katharos Organic Ltd 1,000 1,000 1,156 156
9,690 11,252 11,231 (21)
**In the above table the loss shown on the sale of the solar companies was due to a dividend being declared by these companies prior to the sale. The dividends received were GBP666,183 which offsets the losses on the solar companies shown above.
12. Receivables
31 March 2016 31 March 2015
Ord. Shares A Shares C Shares D Shares Total Ord. Shares A Shares C Shares D Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Receivables 321 313 1 545 1,180 32 5 64 62 163
Prepayments
and accrued
income 13 - 1 16 30 1 - 1 - 2
334 313 2 561 1,210 33 5 65 62 165
13. Cash and Cash Equivalents
Cash and cash equivalents comprise deposits with The Royal Bank of Scotland plc.
14. Payables and Accrued Expenses
31 March 2016 31 March 2015
Ord. Shares A Shares C Shares D Shares Total Ord. Shares A Shares C Shares D Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Payables - - 77 - 77 3 - - 2,296 2,299
Accrued
expenses 67 14 90 68 239 77 21 86 28 212
67 14 167 68 316 80 21 86 2,324 2,511
15. Share Capital
Issued & Fully Paid Ordinary Shares A Shares C Shares D Shares Total
Number of Shares in issue at 1 April 2015 19,474,883 5,131,353 13,441,438 5,296,574 43,344,248
Movements during the period:
Share buyback (11,763) (11,763)
Shares issued under the D share Offer - - - 8,405,062 8,405,062
Number of Shares in issue at 31 March 2016 19,463,120 5,131,353 13,441,438 13,701,636 51,737,457
Nominal value GBP'000 at 31 March 2016 195 51 135 137 518
The nominal value for each share is GBP0.01 each.
The rights attached to each class of share are disclosed in the Directors Report on pages 22 and 23.
On 30 March 2016 11,763 Ordinary shares were purchased by the Company for cancellation.
16. Financial Instruments and Risk Management
The Company's financial instruments comprise VCT qualifying investments and non qualifying investments, cash balances and liquid resources including debtors and creditors. The Company holds financial assets in accordance with its investment policy detailed in the Strategic Report on page 4.
The following table discloses the financial assets and liabilities of the Company in the categories defined by
IAS 39, "Financial Instruments; Recognition & Measurement."
Financial liabilities held Designated at fair value
Total value Loan and receivables at amortised cost through profit or loss
31 March 2016
Assets:
Financial assets at fair
value through profit or
loss 40,164 - - 40,164
Assets held for Sale 1,397 - - 1,397
Receivables 1,180 1,180 - -
Cash and cash equivalents 1,032 1,032 - -
43,773 2,212 - 41,561
Liabilities:
Other payables 77 - 77 -
77 - 77 -
31 March 2015
Assets:
Financial assets at fair
value through profit or
loss 29,335 - - 29,335
Assets held for Sale 11,855 - - 11,855
Receivables 163 163 - -
Cash and cash equivalents 993 993 - -
42,346 1,156 - 41,190
Liabilities:
Other payables 2,299 - 2,299 -
2,299 - 2,299 -
Fixed Asset Investments (see note 10 and note 11) are valued at fair value. Unquoted investments are carried at fair value as determined by the Directors in accordance with current venture capital industry guidelines. The fair value of all other financial assets and liabilities is represented by their carrying value in the balance sheet. The Directors believe that where an investee company's enterprise value, which is equivalent to fair value, remains unchanged since acquisition, that investment should continue to be held at cost less any loan repayments received. Where they consider the investee company's enterprise value has changed since acquisition, that should be reflected by the investment being held at a value measured using a discounted cash flow model.
In carrying out its investment activities, the Company is exposed to various types of risk associated with the financial instruments and markets in which it invests. The Company's approach to managing its risks is set out below together with a description of the nature of the financial instruments held at the balance sheet date:
Market Risk
The Company's VCT qualifying investments are held in small and medium-sized unquoted companies which, by their nature, entail a higher level of risk and lower liquidity than investments in large quoted companies. The Directors and Investment Manager aim to limit the risk attached to the portfolio as a whole by careful selection and timely realisation of investments by carrying out rigorous due diligence procedures and by maintaining a spread of holdings in terms of industry sector and geographical location. The Board reviews the investment portfolio with the Investment Manager on a regular basis. Details of the Company's investment portfolio at the balance sheet date are set out on pages 14 to 20.
An increase of 1% in the value of investments would increase the capital profits for the period and the net asset value at 31 March 2016 by GBP416,000. A decrease of 1% would reduce the capital profits and net asset value by the same amount. A movement of 1% is used as a multiple to demonstrate the impact of varying changes on the capital profits and net asset value of the Company.
Interest Rate Risk
Some of the Company's financial assets are interest bearing, of which some are at fixed rates and some at variable rates. As a result, the Company is exposed to interest rate risk arising from fluctuations in the prevailing levels of market interest rates.
Investments made into VCT qualifying holdings are part equity and part loan. The loan element of investments totals GBP19,252,000 (2015: GBP15,092,000) and is subject to fixed interest rates for the five year loan terms and as a result there is no cashflow interest rate risk. As the loans are held in conjunction with equity and are valued in combination as part of the enterprise value, fair value risk is considered part of market risk.
The amounts held in variable rate investments at the balance sheet date are as follows:
31 March 2016 31 March 2015
GBP'000 GBP'000
Cash on deposit 1,032 993
1,032 993
An increase in interest rates of 1% per annum would not have a material effect either on the revenue for the year or the net asset value at 31 March 2016. The Board believes that in the current economic climate a movement of 1% is a reasonable illustration.
Credit Risk
Credit risk is the risk that a counterparty will fail to discharge an obligation or commitment that it has entered into with the Company. The Investment Manager and the Board carry out a regular review of counterparty risk. The carrying value of the financial assets represent the maximum credit risk exposure at the balance sheet date.
31 March 2016 31 March 2015
GBP'000 GBP'000
Investments - Loans 19,252 15,092
Cash on deposit 1,032 993
Receivables 1,180 163
21,464 16,248
The Company's bank accounts are maintained with The Royal Bank of Scotland plc ("RBS") whose credit quality and financial position are monitored by the Investment Manager.
Credit risk arising on unquoted loan stock held within unlisted investments is considered to be part of market risk as disclosed above.
Foreign Currency Risk
The Company does not have exposure to material foreign currency risks.
Liquidity Risk
The Company's financial assets include investments in unquoted equity securities which are not traded on a recognised stock exchange and which are illiquid. As a result the Company may not be able to realise some of its investments in these instruments quickly at an amount close to their fair value in order to meet its liquidity requirements.
The Company's liquidity risk is managed on a continuing basis by the Investment Manager in accordance with policies and procedures laid down by the Board. The Company's overall liquidity risks are monitored by the Board on a quarterly basis.
The Board maintains a liquidity management policy where cash and future cash flows from operating activities will be sufficient to pay expenses. At 31 March 2016 cash amounted to GBP1,032,000 (2015: GBP993,000).
17. Net Asset Value per Share
The calculation of net asset value per share for the Ordinary Shares is based on Net Assets of GBP13,175,000 (2015: GBP16,649,000) divided by the 19,463,120 (2015: 19,474,883) Ordinary Shares in issue.
The calculation of net asset value per share for the A Ordinary Shares is based on Net Assets of GBP2,118,000 (2015: GBP4,465,000) divided by the 5,131,353 (2015: 5,131,353) A Ordinary Shares in issue.
The calculation of net asset value per share for the C Ordinary Shares is based on Net Assets of GBP14,118,000 (2015: GBP13,409,000) divided by the 13,441,438 (2015: 13,441,438) C Ordinary Shares in issue.
The calculation of net asset value per share for the D Ordinary Shares is based on Net Assets of GBP13,875,000 (2015: GBP5,198,000) divided by the 13,701,636 (2015: 5,296,574) D Ordinary Shares in issue.
18. Commitments and Contingencies
The Company has no outstanding commitments or contingent liabilities.
19. Relationship with Investment Manager
During the period, TPIM received GBP790,444 which has been expensed (2015: GBP612,188) for providing management and administrative services to the Company. At 31 March 2016 GBP278,385 was owing to TPIM (2015: GBP288,397).
20. Related Party Transactions
During the year the Company entered into a short term loan agreement with Triple Point Lease Partners ("TPLP"). TPIM is the Investment Manager of the Company and is the operator of TPLP.
The Directors Remuneration Report on pages 31 to 33 discloses the Directors remuneration and shareholdings.
21. Post Balance Sheet Events
There were no post balance sheet events.
22. Dividends
During the year there were two dividends paid to Ordinary Share Class holders. On 24 July 2015 a dividend of 5p per share and on 18 December 2015 a dividend of 16.45p per share was paid, bringing the total dividends paid to Ordinary Shareholders to 25.56p per share.
During the year there were two dividends paid to A Share Class holders. On 24 July 2015 a dividend of 5p per share and on 21 August 2015 a dividend of 40p per share was paid, bringing the total dividends paid to A Shareholders to 56.20p per share.
The Board has resolved to pay the first dividend to C Class Shareholders of GBP672,072 equal to 5p per share which will be paid on 8 July 2016 to shareholders on the register on 24 June 2016.
Registrars
Shareholder Information
The Company
Triple Point Income VCT plc (formerly TP70 2008(I) VCT plc) is a Venture Capital Trust. The Investment Manager is Triple Point Investment Management LLP.
The Company's investment strategy is to offer combined exposure to cash or cash based funds and venture capital investments focused on companies with contractual revenues from financially secure counterparties. Initially investment exposure was intended to be predominantly to cash and cash based funds. By the end of the accounting period commencing no more than three years after VCT approval was given it was intended that at least 70% of the fund would be committed to VCT qualifying holdings with up to 30% remaining exposed to cash and cash based funds. During the year this was achieved with 82% invested in VCT qualifying holdings.
Financial Calendar
The Company's financial calendar is as follows:
28 July 2016 Annual General Meeting November 2016 Interim report for the six months ending 30 September 2016 despatched
June 2017 Results for the year to 31 March 2017 announced; Annual Report and Financial Statements published.
Notice of Annual General Meeting
NOTICE is hereby given that the Annual General Meeting of Triple Point Income VCT plc will be held at 18 St. Swithin's Lane, EC4N 8AD at 10.15 am on Thursday, 28 July 2016 for the following purposes:
Ordinary Business
1. To receive, consider and adopt the Report of the Directors and Financial Statements for the year ended 31 March 2016 together with the Independent Auditors Report thereon (Ordinary Resolution).
2. To approve the the Directors' Remuneration Report for the year ended 31 March 2016 (Ordinary Resolution).
3. To re-elect Michael Stanes as a Director (Ordinary Resolution).
4. To re-appoint Grant Thornton UK LLP as auditor and determine their remuneration (Ordinary Resolution).
Special Business
5. That the Company be and is hereby authorised in accordance with s701 of the Companies Act 2006 (the "Act") to make one or more market purchases (as defined in section 693(4) of the Act) of Ordinary Shares, A Shares, C Shares and D Shares provided that:
(i) the maximum aggregate number of Ordinary Shares authorised to be purchased is an amount equal to 10% of the issued Ordinary Shares as at the date of this Resolution;
(ii) the maximum aggregate number of A Shares authorised to be purchased is an amount equal to 10% of the issued A Shares as at the date of this Resolution;
(iii) the maximum aggregate number of C Shares authorised to be purchased is an amount equal to 10% of the issued C Shares as at the date of this Resolution;
(iv) the maximum aggregate number of D Shares authorised to be purchased is an amount equal to 10% of the issued D Shares as at the date of this Resolution;
(v) the minimum price which may be paid for an Ordinary Share, A Share, C Share or D Share is 1 pence;
(vi) the maximum price which may be paid for an Ordinary Share, A Share, C Share or D Share is an amount, exclusive of expenses, equal to 105 per cent. of the average of the middle market prices for the Ordinary Shares, A Shares, C Shares and D Shares as derived from the Daily Official List of the UK Listing Authority for the five business days immediately preceding the day on which that Ordinary Share, A Share, C Share or D Share (as applicable) is purchased; and
(vii) this authority shall expire either at the conclusion of the next Annual General Meeting of the Company or 15 months following the date of the passing of this Resolution, whichever is the first to occur (unless previously renewed, varied or revoked by the Company in general meeting), provided that the Company may, before such expiry, make a contract to purchase its own shares which would or might be executed wholly or partly after such expiry, and the Company may make a purchase of its own shares in pursuance of such contract as if the authority hereby conferred had not expired. (Special Resolution).
Notice of Annual General Meeting
By Order of the Board
David Frank
Director
Registered Office:
18 St Swithin's Lane
London
EC4N 8AD
9 June 2016
Notes:
(i) A member entitled to vote at the Meeting is entitled to appoint one or more proxies to attend and, on a poll, vote on his or her behalf. A proxy need not be a member of the Company.
(ii) A form of proxy is enclosed. To be effective, the instrument appointing a proxy (together with the power of attorney or other authority, if any, under which it is signed, or a certified copy of such power or authority) must be deposited at or posted to the office of the registrars of the Company, Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, West Midlands B63 3DA, so as to be received not less than 48 hours before the time fixed for the Meeting. Completion and return of the form of proxy will not preclude a member from attending or voting at the Meeting in person if he or she so wishes.
(iii) Members who hold their shares in uncertificated form must be entered in the Company's register of Members 48 hours before the Meeting to be entitled to attend or vote at the Meeting. Such shareholders may only cast votes in respect of Ordinary Shares held by them at such time.
(iv) Copies of the service contracts of each of the Directors, the register of Directors' interests in shares of the Company kept in accordance with the Listing Rules and a copy of the Memorandum and Articles of Association of the Company, will be available for inspection at the registered office of the Company during usual business hours on any week day (Saturdays, Sundays and public holidays excepted) from the date of this notice until the date of the Annual General Meeting and at the place of the Annual General Meeting from at least 15 minutes prior to and until the conclusion of the Annual General Meeting.
Form of Proxy
Relating to the 2016 Annual General Meeting of Triple Point Income 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 at 10.15am on Thursday 28 July 2016, notice of which was sent to shareholders with the Directors' Report and the Accounts for the period ended 31 March 2016, and at any adjournment thereof. The proxy will vote as indicated below in respect of the resolutions set out in the notice of meeting:
Resolution number For Against Withheld
1. To receive, consider and adopt the Report of the Directors and the Financial Statements
for
the year ended 31 March 2016 together with the Independent Auditors Report.
2. To approve the report set out in the Directors' Remuneration Report for the year ended 31
March 2016.
3. To re-elect Michael Stanes as a Director.
4. To re-appoint Grant Thornton UK LLP as auditor and determine their remuneration.
5. To authorise the Directors to make market purchases of the Company's own shares (Special
Resolution).
Signed: ....................................................................... Dated: ................................................ ..2016
Notes
1. A member wishing to appoint a person other than the Chairman of the meeting as proxy should insert the name and address of such person in the space provided.
2. Use of the proxy form does not preclude a member from attending and voting in person.
3. Where this form of proxy is executed by a corporation it must be either under its seal or under the hand of an officer or attorney duly authorised.
4. If the proxy form is signed and returned without any indication as to how the proxy shall vote, the proxy will exercise his/her discretion as to whether and how he/she votes.
5. To be valid, the proxy form must be received by Neville Registrars at Neville House, 18 Laurel Lane, Halesowen, West Midlands B63 3DA no later than 48 hours before the commencement of the meeting.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SSEFLUFMSELM
(END) Dow Jones Newswires
June 09, 2016 11:06 ET (15:06 GMT)
1 Year Triple Point Chart |
1 Month Triple Point Chart |
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
