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Share Name Share Symbol Market Type Share ISIN Share Description
Puma Vct 11 Plc LSE:PU11 London Ordinary Share GB00BQVBS545 ORD GBP0.0005
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 75.00 70.00 80.00 75.00 75.00 75.00 0.00 00:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
General Financial 0.5 0.1 0.4 197.4 29

Puma VCT 11 PLC Annual Financial Report

29/06/2020 8:00am

UK Regulatory (RNS & others)


TIDMPU11

RNS Number : 2913R

Puma VCT 11 PLC

29 June 2020

HIGHLIGHTS

   --    Funds substantially invested in a diverse range of businesses and projects. 

-- 16p per share of dividends paid since inception (including 6p interim dividend paid in February 2020).

   --    NAV per share at the year-end was 92.85p (after adding back dividends paid to date). 

CHAIRMAN'S STATEMENT

Introduction

I am pleased to present the Company's fifth annual report for the year ended 29 February 2020.

Background

These final results have been prepared using the information we have available, but against the backdrop of major economic disruption. Measures to deal with COVID-19 have impacted the entire economy of the world and, most probably, touched every sector. It is too early to comment on the medium-term effects on investment markets and values. We can only at this stage comment upon the short term impacts on the Company's portfolio.

The Company was launched and began investing in Spring 2015, with a planned life of five years. In this, its fifth year, the process of realising the Company's investments and preparing to return capital to investors has commenced although it has been hindered by the current COVID-19 pandemic. We remain focused on shareholders' wish to liquidate the portfolio on reasonable terms as soon as possible following the fifth anniversary of the launch of the Company.

Dividend

As envisaged in the Company's prospectus, the Company paid a dividend of 6p per ordinary share just before the end of the year.

Investments

At the end of the year, the Company had just under GBP20 million invested in a mixture of qualifying and non-qualifying investments whilst maintaining our VCT qualifying status. Details of these investments can be found in the Investment Manager's report on pages 3 to 8. As the Board concluded that the pandemic was a non-adjusting post balance sheet event, the impact of COVID-19 is not reflected in the fair value of the Company's investments as at 29 February 2020. We understand that this treatment is being adopted by other funds with similar year-ends.

Results

The Company reported a small loss before tax of GBP63,000 for the year (2019: GBP1,621,000 loss including GBP1,500,000 provision in respect of Warm Hearth Limited), a post-tax loss of 0.21p (2019: 5.33p including 4.92p due to Warm Hearth Limited provision) per ordinary share (calculated on the weighted average number of shares). The Net Asset Value per ordinary share ("NAV") at 29 February 2020 after adding back the 16p of dividends paid to date was 92.85p (2019: 93.06p).

VCT qualifying status

PricewaterhouseCoopers LLP ("PwC") provides the board and the Investment Manager with advice on the ongoing compliance with HMRC rules and regulations concerning VCTs and has reported no issues in this regard for the Company to date. PwC will continue to assist the Investment Manager in monitoring rule compliance as the Company approaches the end of its planned life.

Annual General Meeting and Delay to Proposal to Wind-Up the Company

The Annual General Meeting of the Company will be held at Cassini House, 57 St James's Street, London, SW1A 1LD on 24(th) August 2020 at 3p.m. Notice of the Annual General Meeting and Form of Proxy will be inserted within the annual accounts.

The Company has now just passed its fifth anniversary. It was envisaged in the Company's Prospectus that the Board would convene a General Meeting of the Company at which resolutions would be proposed to place the Company into members' solvent liquidation. However, in light of the delays to realisations likely to be caused by the COVID-19 crisis, the Board has decided to delay this step, which it will keep under regular review.

Once such resolutions have been proposed and, if thought fit, passed by shareholders, for a maximum period of three years, many of the VCT rules - including the 80 per cent qualifying rule - are suspended whilst the Company retains its VCT status of tax-free distribution to UK taxpayers. The intention remains to return the balance of the capital in an orderly way, with disposals timed appropriately to enable further substantial distributions as the liquidation progresses. However, whilst discussions are underway regarding potential exits from portfolio companies, it is likely that, in light of the COVID-19 outbreak, a number of these exit processes will have to be put on hold until there is a greater degree of economic certainty.

Harold Paisner

Chairman

26 June 2020

INVESTMENT MANAGER'S REPORT

Introduction

Since the Company's year end, the global economy and financial markets have been impacted significantly by the COVID-19 pandemic. These are unprecedented times which have disrupted personal and working life for almost everyone. Since the emergence of the pandemic in the UK, we have been actively working with portfolio companies to protect Shareholder value whilst, at the same time, complying with Government guidelines. Our existing monitoring cycle involves very close contact with portfolio companies. However, we have significantly increased our level of interaction with portfolio companies and changed our portfolio review meeting from monthly to weekly, as we carefully assess each company's cash management and outlook.

During this time, we have worked closely with advisers to support our portfolio companies. This has involved providing companies with in-depth information on available support packages and hosting calls with advisers to deliver guidance on key topics such as employment law, available funding and scenario cash planning. Our aim was to ensure management teams could concentrate on running their businesses rather than scrutinising Government support schemes. Where appropriate, portfolio companies have made use of Government-led support, including the Coronavirus Job Retention Scheme and the Coronavirus Business Interruption Loan Scheme (CBILS).

As the situation has evolved, we have continued to work closely with portfolio companies to help them with strategies to conserve cash during this period of contraction and, if required, outline emergency funding options. Retaining a long-term view, the team has also worked with portfolio companies to position them to capitalise on the opportunities for growth that may arise. We have placed particular emphasis on helping them manage costs as aggressively as possible, making appropriate use of government support schemes and assessing opportunities to reopen efficiently with a focus on agile trading, adapted to new consumer and business behaviours.

Investments

Qualifying Investments

Pure Cremation - Crematorium and Direct Cremations

In November 2017, the Company invested GBP2 million in Pure Cremation Holdings Limited (as part of a GBP7.35 million qualifying investment alongside another Puma VCT). Pure Cremation is a leading provider of direct cremations, meeting the needs of a growing number of people in the United Kingdom who want a respectful cremation arranged without any funeral, leaving them free to say farewell how, where and when is right for them. The business has continued to perform strongly during the year with strong revenue growth across all of its sales channels. Reflecting the business's move into profitability and continued growth, the Board have agreed to write up the value of the holding, generating an unrealised gain of GBP391,000.

Growing Fingers - Children's Nursery

As previously reported, the Company has invested GBP0.98 million (as part of a GBP2.8 million investment alongside other Puma VCTs) in Growing Fingers Limited. The investment is funding the construction and launch of a new purpose-built 108-place nursery school in Wendover, Buckinghamshire, an affluent commuter town with direct links to London. The Company benefits from first charge security over the Wendover site and the Growing Fingers business. Works are well underway on the site and the directors of Growing Fingers had expected the nursery to open in the summer of 2020.

Post year-end, the works were interrupted by the policy response to the COVID-19 pandemic and steps had to be taken to secure building materials and the site. Works have now resumed so whilst there will be a delay to opening, the directors of the business are hopeful that it will not be too significant.

Mini Rainbows - Children's Nurseries

Mini Rainbows Limited (in which the Company invested GBP2.5 million as part of a GBP5 million investment alongside other Puma VCTs) owns and operates mature children's day nurseries in Scotland - in Murrayfield, an affluent part of Edinburgh, and in Shawlands, Glasgow. During the period the business acquired a third site in Whitburn, West Lothian. Post-acquisition all three sites were performing well and contributing material EBITDA. In light of this the Board have agreed to write up the value of the holding, generating an unrealised gain of GBP189,000.

Post year-end, the nurseries were closed following Government guidelines in light of the COVID-19 pandemic. The business was able to take advantage of a range of Government support measures and has continued to receive certain state funding lines per pupil. Given this, the directors of the business chose not to ask parents to pay fees during the lockdown period and are hopeful of a rapid return to normal trading after the lockdown, albeit with complexities (and additional costs) to meet with social distancing guidelines.

Warm Hearth - Pubs with Microbreweries

As noted in the Company's last annual report, the Board decided to provide GBP1.5m against the carrying value of the Company's GBP2.5 million investment in Warm Hearth Limited, a pub business seeking to capitalise on the strong growth trends within the craft beer sub-market. Warm Hearth had entered into a franchise agreement with Brewhouse & Kitchen Limited ("B&K"), a national branded operator, offering craft micro-brewing activities within each of its pub units as a point of focus. Warm Hearth owns and operates two substantial freehold pub assets, in Chester and Wilmslow. P erformance of these units had been significantly below our expectations for some time and as a result the Board had decided to provide against the carrying value of this investment in the last annual report. As reported in the Company's last interim report, a significant planning permission was granted for Chester during the period, for the development of 17 letting rooms. Notwithstanding this, and with performance still below expectations, the Board have agreed to write down the value of the holding, generating an unrealised loss of GBP192,000.

Post year-end, the business had to close both units in light of the COVID-19 pandemic. The business is taking advantage of Government support packages including the Job Retention Scheme (furlough) and Rate Reliefs and is working on detailed scenarios and action plans for how the pubs may be allowed to operate during the different phases of lockdown release.

Signal Building Services - Construction Projects

In September 2017, the Company invested GBP1 million (as part of a total investment round of GBP2 million) into Signal Building Services Limited, a business specialising in delivering turnkey solutions to construction projects led by a management team with over 40 years of combined experience in the construction sector. Signal Building Services ("Signal") is currently working on the construction of a 14-apartment supported living scheme in Sutton-in-Ashfield. We are pleased to report that the 22-apartment supported living scheme in Wigan, which Signal has also recently been working on completed successfully during the year, generating attractive returns for Signal which will benefit the Company when its investment in Signal is repaid in due course.

Applebarn Nurseries - Children's Nursery

The Company had previously invested GBP1.1 million in Applebarn Nurseries Limited (as part of a GBP2.2 million qualifying investment alongside another Puma VCT). The management team include a successful operator of nurseries, together with an experienced developer and contractor. The business' site, a custom-built 120 place children's day nursery in Altrincham, South Manchester opened in September 2018 and has been continuing to ramp up as occupancy builds, reaching profitability in the period. Following the COVID-19 outbreak in the UK, the nursery has remained open for provision of childcare to key workers.

Knott End Pub Company - Pubs with Microbreweries

As previously noted, the Company invested GBP2.4 million (as part of a GBP4.8 million qualifying investment alongside another Puma VCT) in Knott End Pub Company Limited which has entered into a franchise agreement with Brewhouse & Kitchen Limited to roll out a portfolio of pubs offering on-site craft micro-brewing activities and good quality food. Knott End owns and operates two pub assets in Horsham and Milton Keynes. The pub in Milton Keynes had experienced some disappointing trading but was showing good year-on-year growth towards the end of the period. In light of these trading challenges, the Board have agreed to write down the value of the holding, generating an unrealised loss of GBP108,000.

Post year-end, the business had to close both units in light of the COVID-19 pandemic. It is taking advantage of Government support packages including the Job Retention Scheme (furlough) and Rate Reliefs. The business is working on detailed scenarios and their respective action plans in relation to how pubs may be allowed to operate during the different phases of lockdown release.

Kid & Play - Children's Nursery

In October 2017, the Company made a GBP1.7 million qualifying investment in Kid & Play Limited, alongside funds invested by another Puma VCT totalling GBP3.4 million. As previously reported, the company is developing a 110 place children's day nursery which was expected to open in Spring 2020. Advance interest in the nursery has been very encouraging following a well-run pre-marketing campaign.

Following the year-end, there have been interruptions to the building works on site due to COVID-19 but the site has now achieved Practical Completion and the directors of the business have well advanced plans to open the nursery in September 2020, subject to lockdown easing.

Sunlight Education Nucleus - Special Educational Needs Schools

In November 2017, the Company made a GBP1.35 million qualifying investment (as part of a GBP4.7 million investment alongside other Puma VCTs) in Sunlight Education Nucleus Limited, a company seeking to develop, own and operate a series of special educational needs schools across the United Kingdom. The business's first school in Stafford, West Midlands opened strongly and has traded ahead of budget. Development of the business's second school in Crewe is well advanced and awaits Ofsted inspection.

The school at Stafford has remained open during lockdown whilst works at Crewe have continued. However, Sunlight is expecting delays to the opening of Crewe because of a longer than normal wait for an Ofsted inspection and approval.

Welcome Health - Chain of Pharmacies

The Company had previously invested GBP2.5 million (as part of a GBP5 million investment alongside other Puma VCTs) in Welcome Health Limited. Welcome Health owns and operates a series of mature pharmacies across the North East of England, focusing on providing pharmaceutical services to a currently underserviced and relatively deprived market. During the year, the entrepreneur behind Welcome Health refinanced the group which facilitated the redemption of the Company's investment .

South-West Cliffe - Children's Nursery

The Company has invested GBP2.1 million (as part of a GBP4.2 million qualifying investment alongside another Puma VCT) in South-West Cliffe Limited, supporting an experienced management team to roll out a portfolio of purpose-built day nurseries. As previously reported, despite best efforts, the management team have been unable to agree terms on a site and therefore, during the year, took the decision to place South-West Cliffe Limited into a solvent members' liquidation. Subsequent to the year end, the Company received 97p in the pound invested.

Non-Qualifying Investments

Supported Living, Nottingham and Liverpool

During the year, a loan of GBP1,623,000 was advanced (through an affiliate, Mayfield Lending Limited) to various entities within the Carislease group of companies to facilitate the acquisition and development of a series of supported living schemes in Nottingham and Liverpool. This loan, together with loans from other vehicles managed and advised by the Investment Manager totalling GBP4.8 million, are secured with a first charge over the sites, many of which have already been pre-sold.

Care Homes for the Elderly, Willenhall and Lichfield

A loan of GBP1,926,000 was advanced during the year (through affiliates, Mayfield Lending Limited and Meadow Lending Limited) to various entities within the Macc Care group of companies to support the stabilisation of a newly built 73-bed care home in Willenhall (between Wolverhampton & Walsall) and the acquisition of a site in Lichfield which is the subject of a planning application for a 90-bed care home. This loan, together with loans from other vehicles managed and advised by the Investment Manager totalling GBP7.7 million, is secured with a first charge over the two sites. Occupancy at Willenhall is ahead of budget and the planning application at Lichfield is expected to be determined in the coming months.

Purpose Built Student Accommodation, Brighton

During the year, a loan of GBP1,250,000 was agreed (through an affiliate, Meadow Lending Limited) to Alumno Student Brighton Living (Brighton) Limited to facilitate the acquisition and development of a 71-unit purpose built student accommodation unit in Brighton. This loan, together with loans from other vehicles managed and advised by the Investment Manager totalling GBP8.47 million, is secured with a first charge over the site. Brighton is one of the university towns which has had a strong demand for new-build quality student accommodation and the developer has a long track record, having developed over 5,000 units to date.

Aparthotel, Glasgow

A pre-development bridge loan of GBP836,000 was advanced during the year (through affiliates, Palmer Lending Limited and Meadow Lending Limited) to Citihome Glasgow Limited against a site with planning permission for a 156-room aparthotel in central Glasgow. This loan, together with loans from other vehicles managed and advised by the Investment Manager totalling GBP3.3 million, is secured with a first charge over the site and is backed by a personal guarantee from the developer. Since the loan was advanced, the developer successfully increased the planning permission to 204 rooms.

Supported Living, Atherstone

During the year, a loan of GBP540,000 was agreed (through affiliates, Meadow Lending Limited and Sloane Lending Limited) to HBP Group Limited to facilitate the development of 16 supported-living flats in Atherstone, Warwickshire. This loan, together with loans from other vehicles managed and advised by the Investment Manager totalling GBP1.7 million, is secured with a first charge over the property which benefits from a pre-let with a leading housing association and a rental void agreement with a large care provider.

Mixed Residential Commercial Development, Bloomsbury

As previously reported, a GBP1.2 million loan (as part of a total facility of GBP17.97 million) was advanced to Cudworth Limited (through the VCT's affiliate Mayfield Lending Limited and Meadow Lending Limited) to fund the construction of a mixed residential and commercial development in Bloomsbury, London, close to the British Museum and 600m from King's Cross station. We are pleased to report that the loan was repaid in full following the year end.

Supported Living, Northumberland

In June 2018 the Company committed loans (through affiliates, Mayfield Lending Limited and Latimer Lending Limited) of GBP1.46 million to Homelife Developments Hexham Ltd to facilitate the construction of a 9-apartment supported living scheme in Northumberland. We are pleased to report that the loan was repaid in full following the year end.

Care Home for the Elderly, Formby

We are pleased to report that the GBP800,000 loan to New Care (Sefton) Limited (through an affiliate, Sloane Lending Limited) in connection with the development and initial trading of a 75-bed purpose-built care home in Formby, Merseyside, was repaid in full during the year.

Construction of Airport Hotel, Edinburgh

In June 2017, GBP1.6 million of loans (as part of an overall facility of GBP16 million) were advanced to Ability Hotels (Edinburgh) Limited (through affiliates, Meadow Lending Limited and Palmer Lending Limited) to fund the development of a new 240-room Hampton by Hilton hotel at Edinburgh Airport. We are pleased to report that the hotel opened last year and that the loans were repaid in full during the year.

Care Home for the Elderly, Egham

As previously reported, a loan of GBP1,208,000 had been advanced (through an affiliate, Meadow Lending Limited) to Windsar Care (UK) LLP to fund the development and initial trading of a 68-bed purpose-built care home in Egham, Windsor. This loan, together with loans from other vehicles managed and advised by the Investment Manager totalling GBP7.2 million, are secured with a first charge over the site. We are pleased to report that, following completion of the development during the year, the loan has been repaid in full.

Investment Strategy

The Company's funds are invested in a balanced portfolio of both qualifying and non-qualifying investments. Whilst the COVID-19 pandemic has presented a number of significant unforeseen economic and social challenges for the UK and global economy, the management teams in our portfolio companies and the developers who have received loans from our affiliates have responded and we hope to report on more normal trade in due course. The objective remains to achieve an orderly winding up of the Company's assets at the end of its life, subject to shareholder approval at the forthcoming General Meeting.

Puma Investment Management Limited

26 June 2020

Investment Portfolio Summary

As at 29 February 2020

 
                                                                       Valuation 
                                                                       as a % of 
                                 Valuation      Cost   Gain/(loss)    Net Assets 
                                   GBP'000   GBP'000       GBP'000 
 
 Qualifying Investments 
 Applebarn Nurseries 
  Limited                            1,133     1,133             -            5% 
 Growing Fingers Limited               980       980             -            4% 
 Kid& Play Limited                   1,694     1,694             -            7% 
 Knott End Pub Company 
  Limited                            2,292     2,400         (108)           10% 
 Mini Rainbows Limited               2,689     2,500           189           11% 
 Pure Cremation Holdings 
  Limited                            2,391     2,000           391           10% 
 Signal Building Services 
  Limited                              971     1,000          (29)            4% 
 Sunlight Education Nucleus 
  Limited                            1,350     1,350             -            6% 
 Warm Hearth Limited                   808     2,500       (1,692)            3% 
 South-West Cliffe Limited           2,040     2,100          (60)            9% 
 
 Total Qualifying Investments       16,348    17,657       (1,309)           69% 
                                ----------  --------  ------------  ------------ 
 
 Non-Qualifying Investments 
 Palmer Lending Limited                260       260             -            1% 
 Mayfield Lending Limited            1,160     1,160             -            5% 
 Latimer Lending Limited                 1         1             -            0% 
 Meadow Lending Limited              1,448     1,448             -            6% 
 Sloane Lending Limited                780       780             -            3% 
 
 Total Non-Qualifying 
  Investments                        3,649     3,649             -           15% 
                                ----------  --------  ------------  ------------ 
 
 
 Total Investments                  19,997    21,306       (1,309)           84% 
 Balance of Portfolio                3,451     3,451             -           16% 
 
 Net Assets                         23,448    24,757       (1,309)          100% 
                                ----------  --------  ------------  ------------ 
 

Of the investments held at 29 February 2020, all are incorporated in England and Wales.

Income Statement

For the year ended 29 February 2020

 
                                               Year ended 29 February             Year ended 28 February 
                                                        2020                                2019 
                               Note               Revenue   Capital     Total   Revenue   Capital     Total 
                                                  GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000 
 Gain/(Loss) on investments    8 (b)                    -       166       166         -   (1,500)   (1,500) 
 Income                          2                    505         -       505       698         -       698 
 
                                                      505       166       671       698   (1,500)     (802) 
                                      -------------------  --------            --------  --------  -------- 
 
 Investment management 
  fees                           3                  (125)     (374)     (499)     (143)     (431)     (574) 
 Other expenses                  4                  (235)         -     (235)     (245)         -     (245) 
 
                                                    (360)     (374)     (734)     (388)     (431)     (819) 
                                      -------------------  --------            --------  --------  -------- 
 
 (Loss)/profit before 
  taxation                                            145     (208)      (63)       310   (1,931)   (1,621) 
 Taxation                        5                   (28)        28         -      (59)        54       (5) 
 
 (Loss)/profit and total 
  comprehensive income 
  for the year                                        117     (180)      (63)       251   (1,877)   (1,626) 
                                      ===================  ========  ========  ========  ========  ======== 
 
 Basic and diluted 
 (Loss)/profit per Ordinary 
  Share (pence)                  6                  0.38p   (0.59p)   (0.21p)     0.82p   (6.15p)   (5.33p) 
                                      ===================  ========  ========  ========  ========  ======== 
 

All items in the above statement derive from continuing operations.

There are no gains or losses other than those disclosed in the Income Statement.

The total column of this statement is the Statement of Total Comprehensive Income of the Company prepared in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. The supplementary revenue and capital columns are prepared in accordance with the Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued by the Association of Investment Companies.

Balance Sheet

As at 29 February 2020

 
                                                As at          As at 
                                          29 February    28 February 
                                 Note            2020           2019 
                                              GBP'000        GBP'000 
 Fixed Assets 
 Investments                     8 (a)         19,997         22,556 
                                        -------------  ------------- 
 
 
 Current Assets 
 Debtors                           9            3,307          2,920 
 Cash                                             214             42 
                                        -------------  ------------- 
                                                3,521          2,962 
 Creditors - amounts falling 
  due within one year             10             (70)          (176) 
 
 Net Current Assets                             3,451          2,786 
                                        -------------  ------------- 
 
 Net Assets                                    23,448         25,342 
                                        =============  ============= 
 
 Capital and Reserves 
 Called up share capital          12               19             19 
 Capital reserve - realised                   (1,817)        (1,446) 
 Capital reserve - unrealised                 (1,309)        (1,500) 
 Revenue reserve                               26,555         28,269 
 
 Total Equity                                  23,448         25,342 
                                        =============  ============= 
 
 
 Net Asset Value per Ordinary 
  Share                           13           76.85p         83.06p 
                                        =============  ============= 
 

The financial statements on pages 36 to 51 were approved and authorised for issue by the Board of Directors on 26 June 2020 and were signed on their behalf by:

Harold Paisner

Chairman

Statement of Cash Flows

For the year ended 29 February 2020

 
                                                 Year ended     Year ended 
                                                29 February    28 February 
                                                       2020           2019 
                                                    GBP'000        GBP'000 
 
 Loss after tax                                        (63)        (1,626) 
 Tax charge for the year                                  -              5 
 Realised loss on investment                             25              - 
 Unrealised (gain)/loss on investments                (191)          1,500 
 Increase in debtors                                  (387)          (555) 
 Decrease in creditors                                (106)            (7) 
 
 Cash outflow from operations                         (722)          (683) 
                                              -------------  ------------- 
 
 Corporation tax paid                                     -           (57) 
 
 Net cash outflow from operating activities           (722)          (740) 
                                              -------------  ------------- 
 
 Cash flow from investing activities 
 Proceeds from disposal of investments 
  and repayments of loans                             2,725          2,720 
 
 Net cash generated from investing 
  activities                                          2,725          2,720 
                                              -------------  ------------- 
 
 Cash flow from financing activities 
 Dividends paid                                     (1,831)        (2,136) 
 
 Net cash used for financing activities             (1,831)        (2,136) 
                                              -------------  ------------- 
 
 Net increase/(decrease) in cash and 
  cash equivalents                                      172          (156) 
 Cash and cash equivalents at the beginning 
  of the year                                            42            198 
 Cash and cash equivalents at the end 
  of the year                                           214             42 
                                              =============  ============= 
 

Statement of Changes in Equity

For the year ended 29 February 2020

 
                                 Called      Share       Capital         Capital 
                               up share    premium       reserve         reserve    Revenue 
                                capital    account    - realised    - unrealised    reserve     Total 
                                GBP'000    GBP'000       GBP'000         GBP'000    GBP'000   GBP'000 
 
 Balance as at 1 March 
  2018                               19     29,473       (1,069)               -        681    29,104 
 Total comprehensive 
  income for the year                 -          -         (377)         (1,500)        251   (1,626) 
 Cancellation of share 
  premium account                     -   (29,473)             -               -     29,473         - 
 Dividends paid                                                                     (2,136)   (2,136) 
                             ----------  ---------  ------------  --------------  ---------  -------- 
 Balance as at 28 February 
  2019                               19          -       (1,446)         (1,500)     28,269    25,342 
 Total comprehensive 
  income for the year                 -          -         (371)             191        117      (63) 
 Dividends paid                       -          -             -               -    (1,831)   (1,831) 
 
 Balance as at 29 February 
  2020                               19          -       (1,817)         (1,309)     26,555    23,448 
                             ==========  =========  ============  ==============  =========  ======== 
 

Distributable reserves comprise: Capital reserve-realised, Capital reserve-unrealised (excluding gains on unquoted investments) and the Revenue reserve. At the year end, distributable revenue reserves were GBP26,555,000 (2019: GBP28,269,000).

The Capital reserve-realised includes gains/losses that have been realised in the year due to the sale of investments, net of related costs. The Capital reserve-unrealised represents the investment holding gains/losses and shows the gains/losses on investments still held by the Company not yet realised by an asset sale.

The revenue reserve represents the cumulative revenue earned less cumulative distributions.

The company cancelled its share premium account in September 2018.

   1.       Accounting Policies 

Accounting convention

Puma VCT 11 plc ("the Company") was incorporated, registered and is domiciled in England. The Company's registered number is 09197956. The registered office is Cassini House, 57 St James's Street, London SW1A 1LD. The Company is a public limited company (limited by shares) whose shares are listed on LSE with a premium listing. The Company's principal activities and a description of the nature of the Company's operations are disclosed in the Strategic Report.

The financial statements have been prepared under the historical cost convention, modified to include investments at fair value, and in accordance with the requirements of the Companies Act 2006, including the provisions of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 and with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' ("FRS 102") and the Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in October 2019 by the Association of Investment Companies ("the SORP").

Monetary amounts in these financial statements are rounded to the nearest whole GBP1,000, except where otherwise indicated.

Going concern

The Directors have considered a period of 12 months from the date of this report for the purposes of determining the Company's going concern status which has been assessed in accordance with the guidance issued by the Financial Reporting Council. After making enquiries, including consideration of the impact of COVID-19 on the Company's current financial position and expected cash flows for the period of the review, the Directors believe that it is appropriate to continue to apply the going concern basis in preparing the financial statements. This is appropriate as the Company has access to cash reserves greater than the anticipated annual running costs of the Company.

Investments

All investments are measured at fair value. They are all held as part of the Company's investment portfolio and are managed in accordance with the investment policy set out on page 18.

Unquoted investments are stated at fair value by the Directors with reference to the International Private Equity and Venture Capital Valuation Guidelines ("IPEV") as follows:

-- Investments which have been made within the last twelve months or where the investee company is in the early stage of development will usually be valued at either the price of recent investment or cost except where the company's performance against plan is significantly different from expectations on which the investment was made, in which case a different valuation methodology will be adopted.

-- Investments in debt instruments will usually be valued by applying a discounted cash flow methodology based on expected future returns of the investment.

-- Alternative methods of valuation such as multiples or net asset value may be applied in specific circumstances if considered more appropriate.

Realised surpluses or deficits on the disposal of investments are taken to realised capital reserves, and unrealised surpluses and deficits on the revaluation of investments are taken to unrealised capital reserves.

Income

Dividends receivable on listed equity shares are brought into account on the ex-dividend date. Dividends receivable on unquoted equity shares are brought into account when the Company's right to receive payment is established and there is no reasonable doubt that payment will be received. Interest receivable is recognised wholly as a revenue item on an accruals basis.

Performance fees

Upon its inception, the Company agreed performance fees payable to the Investment Manager, Puma Investment Management Limited, and members of the investment management team at 20% of the aggregate excess of the amounts realised over GBP1 per Ordinary Share returned to Ordinary Shareholders. This incentive will only be effective once the other holders of Ordinary Shares have received distributions of GBP1 per share.

The performance incentive has been satisfied through the issue of 7,627,992 Ordinary Shares (as set out in note 11 to the financial statements) to the Investment Manager and members of the investment management team being 20% of the total issued Ordinary Share capital of 38,139,963. Under the terms of the incentive arrangement, all rights to dividends will be waived until the GBP1 per Ordinary Share performance target has been met. The performance fee is accounted for as an equity-settled share-based payment.

Section 26 of FRS 102 "Share-Based Payment" requires the recognition of an expense in respect of share-based payments in exchange for goods or services. Entities are required to measure the goods or services received at their fair value unless that fair value cannot be estimated reliably, in which case that fair value should be estimated by reference to the fair value of the equity instruments granted.

At each balance sheet date, the Company estimates that fair value by reference to any excess of the net asset value, adjusted for dividends paid, over GBP1 per share in issue at the balance sheet date. Any change in fair value is recognised in the Income Statement with a corresponding adjustment to equity.

Expenses

All expenses (inclusive of VAT) are accounted for on an accruals basis. Expenses are charged wholly to revenue, with the exception of:

   --      expenses incidental to the acquisition or disposal of an investment charged to capital; and 

-- the investment management fee, 75% of which has been charged to capital to reflect an element which is, in the directors' opinion, attributable to the maintenance or enhancement of the value of the Company's investments in accordance with the Board's expected long-term split of return; and

-- the performance fee which is allocated proportionally to revenue and capital based on the respective contributions to the Net Asset Value.

Taxation

Corporation tax is applied to profits chargeable to corporation tax, if any, at the applicable rate for the year. The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue return on the marginal basis as recommended by the SORP.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more, or right to pay less, tax in the future has occurred at the balance sheet date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the financial statements which are capable of reversal in one or more subsequent periods. Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

Reserves

Realised losses and gains on investments, transaction costs, the capital element of the investment management fee and taxation are taken through the Income Statement and recognised in the Capital Reserve - Realised on the Balance sheet. Unrealised losses and gains on investments and the capital element of the performance fee are also taken through the Income Statement and are recognised in the Capital Reserve - Unrealised.

Debtors

Debtors include other debtors and accrued income which are recognised at amortised cost, equivalent to the fair value of the expected balance receivable.

Creditors

Creditors are initially measured at the transaction price and subsequently measured at amortised cost, being the transaction price less any amounts settled.

Dividends

Final dividends payable are recognised as distributions in the financial statements when the Company's liability to make payment has been established. The liability is established when the dividends proposed by the Board are approved by the Shareholders. Interim dividends are recognised when paid.

Key accounting estimates and assumptions

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets within the next financial year relate to the fair value of unquoted investments, especially due to the impact of COVID-19, which is a non-adjusting post balance sheet event as disclosed in note 18. Further details of the unquoted investments are disclosed in the Investment Manager's Report on pages 3 to 8 and notes 8 and 14 to the financial statements.

   2.       Income 
 
                            Year ended 29 February   Year ended 28 February 
                                              2020                     2019 
                                           GBP'000                  GBP'000 
 Income from investments 
 Loan stock interest                           503                      697 
 Other income 
 Bank deposit income                             2                        1 
                                               505                      698 
                           =======================  ======================= 
 
   3.      Investment Management Fees 
 
                          Year ended 29 February   Year ended 28 February 
                                            2020                     2019 
                                         GBP'000                  GBP'000 
 Puma Investments fees                       499                      574 
                                             499                      574 
                         =======================  ======================= 
 

Puma Investment Management Limited ("Puma Investments") has been appointed as the Investment Manager of the Company for an initial period of five years, which can be terminated by not less than twelve months' notice, given at any time by either party, on or after the fifth anniversary. The Board is satisfied with the performance of the Investment Manager. Under the terms of this agreement, Puma Investments will be paid an annual fee of 2% of the Net Asset Value payable quarterly in arrears calculated on the relevant quarter end NAV of the Company. These fees are capped, the Investment Manager having agreed to reduce its fee (if necessary to nothing) to contain total annual costs (excluding performance fee and trail commission) to within 3.5% of funds raised. Total costs this year were 2.5% (2019: 2.8 %) of the funds raised. Graham Shore (a director) holds a Directorship of the parent of the Investment Manager.

   4.       Other expenses 
 
                               Year ended 29 February   Year ended 28 February 
                                                 2020                     2019 
                                              GBP'000                  GBP'000 
 PI Administration Services 
  fees                                             88                      100 
 Directors' remuneration                           48                       48 
 Social security costs                              2                        2 
 Auditor's remuneration 
  for statutory audit                              29                       25 
 Legal and professional 
  fees                                             24                       25 
 Other expenses                                    44                       45 
 
                                                  235                      245 
                              =======================  ======================= 
 

PI Administration Services Limited provides administrative services to the Company for an aggregate annual fee of 0.35% of the Net Asset Value of the Fund, payable quarterly in arrears.

Remuneration for each Director for the year is disclosed in the Directors' Remuneration Report on page 25. The Company had no employees (other than Directors) during the year (2019: none). The average number of non-executive Directors during the year was 3 (2019: 3). The non-executive Directors are considered to be the Key Management Personnel of the Company with total remuneration for the year of GBP50,000 (2019: GBP50,000) including social security costs.

The Auditor's remuneration of GBP24,000 (2019: GBP21,000) has been grossed up in the table above to be inclusive of VAT. Non-audit fees charged during the year were GBP250 (2019: GBP250) for iXBRL tagging of the 2019 (2019: 2018) financial statements.

   5.      Taxation 
 
                                Year ended 29    Year ended 28 
                                February 2020    February 2019 
                                      GBP'000          GBP'000 
 UK corporation tax charged 
  to revenue reserve                       28               59 
 UK corporation tax charged 
  to capital reserve                     (28)             (54) 
 
 UK corporation tax charge 
  for the period                            -                5 
                              ===============  =============== 
 
 Factors affecting tax 
  charge for the period 
 Loss before taxation                    (63)          (1,621) 
                              ===============  =============== 
 
 Tax charge calculated 
  on loss before taxation 
  at the applicable rate 
  of 19%                                 (12)            (308) 
 (Gain)/loss on investments              (32)              285 
 Tax losses carried forward                44               23 
 Adjustments relating to 
  prior periods                             -                5 
 
                                            -                5 
                              ===============  =============== 
 

Capital returns are not taxable as the Company is exempt from tax on realised capital gains whilst it continues to comply with the VCT regulations, so no corporation tax is recognised on capital gains or losses. Due to the intention to continue to comply with the VCT regulations, the Company has not provided for deferred tax on any realised or unrealised capital gains and losses. No deferred tax asset has been recognised in respect of the tax losses carried forward due to the uncertainty as to recovery.

   6.       Basic and diluted return/(loss) per Ordinary Share 
 
                                      Year ended 29 February 2020 
                                    Revenue        Capital         Total 
 
 Total comprehensive income 
  for the year                   GBP117,000   (GBP180,000)   (GBP63,000) 
 Weighted average number 
  of shares in issue for 
  the year                       38,139,963     38,139,963    38,139,963 
 Less: management incentive 
  shares (see note 11)          (7,627,992)    (7,627,992)   (7,627,992) 
 
 Weighted average number 
  of shares for purposes 
  of return/(loss) per share 
  calculations                   30,511,971     30,511,971    30,511,971 
                               ------------  -------------  ------------ 
 
 Return/(loss) per share              0.38p        (0.59p)       (0.21p) 
 
 
   6.       Basic and diluted return/(loss) per Ordinary Share (continued) 
 
                                         Year ended 28 February 2019 
                                    Revenue          Capital            Total 
 
 Total comprehensive income 
  for the year                   GBP251,000   (GBP1,877,000)   (GBP1,626,000) 
 Weighted average number 
  of shares in issue for 
  the year                       38,139,963       38,139,963       38,139,963 
 Less: management incentive 
  shares (see note 11)          (7,627,992)      (7,627,992)      (7,627,992) 
 
 Weighted average number 
  of shares for purposes 
  of return/(loss) per share 
  calculations                   30,511,971       30,511,971       30,511,971 
                               ------------  ---------------  --------------- 
 
 Return/(loss) per share              0.82p          (6.15p)          (5.33p) 
 
 
   7.       Dividends 

The Directors do not propose a final dividend in relation to the year ended 29 February 2020 (2019: GBPnil). An interim dividend of 6p (2019: 5p) per ordinary share was paid from revenue reserves in the year ended 29 February 2020 totalling GBP1,831,000 (2019: GBP1,526,000). In addition, during the year ended 28 February 2019, a final dividend of 2p was paid in relation to the year ended 28 February 2018 totalling GBP610,000, which was approved at the 2018 Annual General Meeting.

   8.      Investments 
 
                                   Qualifying   Non qualifying 
 (a) Movements in investments     investments      investments     Total 
                                      GBP'000          GBP'000   GBP'000 
 Purchased at cost                     20,157            3,899    24,056 
 Unrealised losses                    (1,500)                -   (1,500) 
 
 Valuation as at 1 March 
  2019                                 18,657            3,899    22,556 
 
 Disposal of investments 
  and repayments of loans 
  and loan notes 
 - Proceeds                           (2,475)            (250)   (2,725) 
 - Realised loss                         (25)                -      (25) 
 Unrealised gain                          191                -       191 
 
 Valuation at 29 February 
  2020                                 16,348            3,649    19,997 
                                =============  ===============  ======== 
 
 Book cost at 29 February 
  2020                                 17,657            3,649    21,306 
 Unrealised losses at 
  29 February 2020                    (1,309)                -   (1,309) 
 
 Valuation at 29 February 
  2020                                 16,348            3,649    19,997 
                                =============  ===============  ======== 
 

(b) Gains and losses on investments

The gains and losses on investments for the year shown in the Income Statement is analysed as follows:

 
                              Year ended     Year ended 
                             29 February    28 February 
                                    2020           2019 
                                 GBP'000        GBP'000 
 Realised losses in year            (25)              - 
 Unrealised losses in 
  year                               191        (1,500) 
 
                                     166        (1,500) 
                           =============  ============= 
 

During the year, the Company's investment of GBP2,500,000 in Welcome Health Limited was realised for GBP2,475,000. This investment was held at a fair value of GBP2,500,000 as at 28 February 2019, so a loss of GBP25,000 was realised in the year. The Company's investments are revalued each year, so until they are sold any unrealised gains or losses are included in the fair value of the investments.

(c) Quoted and unquoted investments

 
                         Market value   Market value 
                             as at 29       as at 28 
                             February       February 
                                 2020           2019 
                              GBP'000        GBP'000 
 Unquoted investments          19,997         22,556 
                        =============  ============= 
 

Further details of these investments (including the unrealised loss in the year) are disclosed in the Chairman's Statement, Investment Manager's Report, Investment Portfolio Summary and Significant Investments on pages 1 to 16 of the Annual Report.

   9.       Debtors 
 
                            As at 29 February   As at 28 February 
                                         2020                2019 
                                      GBP'000             GBP'000 
 
 Other debtors                              -                   8 
 Prepayments and accrued 
  income                                3,307               2,912 
 
                                        3,307               2,920 
                           ==================  ================== 
 
   10.     Creditors - amounts falling due within one year 
 
                    As at 29 February   As at 28 February 
                                 2020                2019 
                              GBP'000             GBP'000 
 Accruals                          56                 162 
 Other creditors                   14                  14 
 
                                   70                 176 
                   ==================  ================== 
 
   11.    Management Performance Incentive Arrangement 

On 11 September 2014, the Company entered into an Agreement with the Investment Manager and members of the investment management team (together "the Management Team") such that the Management Team will be entitled in aggregate to share in 20 per cent of the aggregate excess on any amounts realised by the Company in excess of GBP1 per Ordinary Share, the Performance Target.

This incentive is effective through the issue of ordinary shares in the Company, such that the Management Team hold 7,627,992 ordinary shares being 20% of the issued share capital of 38,139,963.

The Management Team will waive all rights to dividends until a return of GBP1 per share (whether capital or income) has been paid to the other shareholders.

The performance incentive structure provides a strong incentive for the Investment Manager to ensure that the Company performs well, enabling the Board to approve distributions as high and as soon as possible.

   12.     Called Up Share Capital 
 
                                                2020      2019 
                                             GBP'000   GBP'000 
 
 38,139,963 ordinary shares of 0.05p each         19        19 
                                            ========  ======== 
 
   13.     Net Asset Value per Ordinary Share 
 
                                                  As at               As at 
                                       29 February 2020    28 February 2019 
 Net assets                               GBP23,448,000       GBP25,342,000 
                                     ------------------  ------------------ 
 
 Number of shares in issue                   38,139,963          38,139,963 
 
 Less: management incentive 
  shares (see note 11)                      (7,627,992)         (7,627,992) 
                                     ------------------  ------------------ 
 
 Number of shares in issue 
  for purposes of Net 
 Asset Value per share calculation           30,511,971          30,511,971 
                                     ------------------  ------------------ 
 
 Net asset value per share 
 Basic and diluted                               76.85p              83.06p 
 
   14.     Financial Instruments 

The Company's financial instruments comprise its investments, cash balances, debtors and certain creditors. The fair value of all of the Company's financial assets and liabilities is represented by the carrying value in the Balance Sheet. Excluding cash balances, the Company held the following categories of financial instruments at 29 February 2020:

 
                                          2020      2019 
                                       GBP'000   GBP'000 
 
 Financial assets at fair value 
  through profit or loss                19,997    22,556 
 Financial assets that are debt 
  instruments measured at amortised 
  cost                                   3,307     2,920 
 Financial liabilities measured 
  at amortised cost                       (70)     (176) 
 
                                        23,234    25,300 
                                      ========  ======== 
 

Management of risk

The main risks the Company faces from its financial instruments are market price risk, being the risk that the value of investment holdings will fluctuate as a result of changes in market prices caused by factors other than interest rate or currency movements, liquidity risk, credit risk and interest rate risk. The Board regularly reviews and agrees policies for managing each of these risks. The Board's policies for managing these risks are summarised below and have been applied throughout the year.

Credit risk

Credit risk is the risk that the counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. The Investment Manager monitors counterparty risk on an ongoing basis. The Company's maximum exposure to credit risk is as follows:

 
                                  2020      2019 
                               GBP'000   GBP'000 
 
 Investments in loans, loan 
  notes and bonds                8,646     9,646 
 Cash at bank and in hand          214        42 
 Interest, dividends and 
  other receivables              3,307     2,920 
 
                                12,167    12,608 
                              ========  ======== 
 

The cash held by the Company at the year-end is held in one U.K. bank. Bankruptcy or insolvency of the bank may cause the Company's rights with respect to the receipt of cash held to be delayed or limited. The Board monitors the Company's risk by reviewing regularly the financial position of the bank and should it deteriorate significantly the Investment Manager will, on instruction of the Board, move the cash holdings to another bank.

Credit risk associated with interest, dividends and other receivables are predominantly covered by the investment management procedures.

Investments in loans and loan notes comprises a fundamental part of the Company's venture capital investments, therefore credit risk in respect of these assets is managed within the Company's main investment procedures.

Market price risk

Market price risk arises mainly from uncertainty about future prices of financial instruments held by the Company. It represents the potential loss the Company might suffer through holding investments in the face of price movements. The Investment Manager actively monitors market prices and reports to the Board, which meets regularly in order to consider investment strategy.

The Company's strategy on the management of market price risk is driven by the Company's investment policy as outlined in the Strategic Report on page 18. The management of market price risk is part of the investment management process. The portfolio is managed with an awareness of the effects of adverse price movements through detailed and continuing analysis, with an objective of maximising overall returns to shareholders.

Holdings in unquoted investments may pose higher price risk than quoted investments. Some of that risk can be mitigated by close involvement with the management of the investee companies along with review of their trading results.

100% (2019: 100%) of the Company's investments are unquoted investments.

Liquidity risk

Details of the Company's unquoted investments are provided in the Investment Portfolio summary on page 9. By their nature, unquoted investments may not be readily realisable and the Board considers exit strategies for these investments throughout the period for which they are held. As at the year end, the Company had no borrowings.

The Company's liquidity risk associated with investments is managed on an ongoing basis by the Investment Manager in conjunction with the Directors and in accordance with policies and procedures in place as described in the Strategic Report and the Directors' Report. The Company's overall liquidity risks are monitored on a quarterly basis by the Board. The Company maintains access to cash reserves sufficient to pay accounts payable and accrued expenses.

Fair value interest rate risk

The benchmark that determines the interest paid or received on the current account is the Bank of England base rate, which was 0.75% at 29 February 2020 (2019: 0.75%). All of the loan and loan note investments are unquoted and hence not directly subject to market movements as a result of interest rate movements.

Cash flow interest rate risk

The Company has exposure to interest rate movements primarily through its cash deposits and loan notes which track either the Bank of England base rate or LIBOR.

Interest rate risk profile of financial assets

The following analysis sets out the interest rate risk of the Company's financial assets as at 29 February 2020.

 
                                           Average 
                                          interest            Period 
                           Rate status        rate    until maturity     Total 
                                                                       GBP'000 
 Cash at bank - RBS           Floating       0.01%                 -       214 
 
 Loans and loan notes         Floating       2.75%          8 months     1,500 
 Loans and loan notes            Fixed      16.45%         23 months     7,146 
                          Non-interest 
 Balance of assets             bearing                             -    14,658 
 
                                                                        23,518 
                                                                      ======== 
 

The following analysis sets out the interest rate risk of the Company's financial assets as at 28 February 2019.

 
                                        Average 
                                       interest            Period 
                        Rate status        rate    until maturity     Total 
                                                                    GBP'000 
 Cash at bank - 
  RBS                      Floating       0.01%                 -        42 
 
 Loans and loan 
  notes                    Floating       2.65%         20 months     2,250 
 Loans and loan 
  notes                       Fixed      12.67%         33 months     7,396 
                       Non-interest 
 Balance of assets          bearing                             -    15,830 
 
                                                                     25,518 
                                                                   ======== 
 

Foreign currency risk

The reporting currency of the Company is Sterling. The Company has not held any non-Sterling investments during the year.

Fair value hierarchy

Financial assets and liabilities measured at fair value are disclosed using a fair value hierarchy that reflects the significance of the inputs used in making the fair value measurements, as follows:-

-- Level 1 - Fair value is measured using the unadjusted quoted price in an active market for identical assets.

-- Level 2 - Fair value is measured using inputs other than quoted prices that are observable using market data.

   --      Level 3 - Fair value is measured using unobservable inputs. 

Fair values have been measured at the end of the reporting year as follows:-

 
                            2020      2019 
                         GBP'000   GBP'000 
 
 Level 3 
 Unquoted investments     19,997    22,556 
 
                          19,997    22,556 
                        ========  ======== 
 

The Level 3 investments have been valued in line with the Company's accounting policies and IPEV guidelines. Further details of these investments are provided in the significant investments section of the Annual Report on pages 10 to 16.

   15.    Capital management 

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern, so that it can provide an adequate return to shareholders by allocating its capital to assets commensurate with the level of risk.

By its nature, the Company has an amount of capital, at least 70% (as measured under the tax legislation) of which must be, and remain, invested in the relatively high risk asset class of small UK companies within three years of that capital being subscribed. For accounting periods commencing after 5 April 2019 this has risen to 80%.

The Company accordingly has limited scope to manage its capital structure in the light of changes in economic conditions and the risk characteristics of the underlying assets. Subject to this overall constraint upon changing the capital structure, the Company may adjust the amount of dividends paid to shareholders, issue new shares, or sell assets to maintain a level of liquidity to remain a going concern.

The Board has the opportunity to consider levels of gearing, however there are no current plans to do so. It regards the net assets of the Company as the Company's capital, as the level of liabilities is small and the management of those liabilities is not directly related to managing the return to shareholders.

   16.     Contingencies, Guarantees and Financial Commitments 

There were no commitments, contingencies or guarantees of the Company at the year-end (2019: none).

   17.    Controlling Party 

In the opinion of the Directors there is no immediate or ultimate controlling party.

   18.    Post Balance Sheet Events 

On 11 March 2020, the World Health Organisation declared COVID-19 a global pandemic and on 23 March 2020, the UK Government imposed a lockdown on the whole population. The Directors consider that COVID-19 is a non-adjusting post balance sheet event. The pandemic will significantly impact the UK economy and may materiality impact the prospects of a number of the Company's investments and cause a material reduction in the fair value of the Company's investments. The Directors are unable to quantify the full financial impact of COVID-19 on the fair value of its investment portfolio as a material proportion of the investments remains remain in lockdown. Further details of the investments are set out in the Investment Manager's Report on pages 3 to 8.

The financial information set out in this announcement does not constitute the Company's statutory financial statements in accordance with section 434 Companies Act 2006 for the year ended 29 February 2020, but has been extracted from the statutory financial statements for the year ended 29 February 2020 which were approved by the Board of Directors on 26 June 2020 and will be delivered to the Registrar of Companies. The Independent Auditor's Report on those financial statements was unqualified and did not contain any emphasis of matter nor statements under s 498(2) and (3) of the Companies Act 2006.

The statutory accounts for the year ended 28 February 2019 have been delivered to the Registrar of Companies and received an Independent Auditors report which was unqualified and did not contain any emphasis of matter nor statements under s 498(2) and (3) of the Companies Act 2006.

Copies of the full annual report and financial statements for the year ended 29 February 2020 will be available to the public at the registered office of the Company at Cassini House, 57 St James's Street, London, SW1A 1LD and will be available for download from www.pumainvestments.co.uk.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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