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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Triple Point Vct 2011 Plc | LSE:TPOA | London | Ordinary Share | GB00BNCBFM82 | A 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% | 1.505 | 0.01 | 3.00 | 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
TIDMTPOA TIDMTPOB
RNS Number : 4928O
Triple Point VCT 2011 PLC
17 May 2018
Triple Point VCT 2011 plc
LEI: 213800AOOAQA5XQDEA89
The financial information set out in these statements does not constitute the Company's statutory accounts for the year ended 28 February 2018, prepared in accordance with section 435 of the Companies Act 2006, but is derived from those accounts. Statutory accounts will be delivered to the Registrar of Companies on 18 May 2018. The auditors have reported on these accounts and their report was unqualified and did not contain a statement under section 498(2) of the Companies Act 2006.
Final Results
Triple Point VCT 2011 plc managed by Triple Point Investment Management LLP today announces the final results for the year ended 28 February 2018.
These results were approved by the Board of Directors on 17 May 2018.
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 28 February
2018
Ord Shares A Shares B Shares Total
Net assets GBP'000 - 10,637 6,826 17,463
Net asset value per
share Pence - 106.90p 100.00p n/a
--------- --------- -------
(Loss)/profit before
tax GBP'000 (2) 783 16 797
(Loss)/earnings per
share Pence (0.03p) 6.83p 0.24p n/a
----------- --------- --------- -------
Cumulative return to shareholders
(p)
Net asset value per
share - 106.90p 100.00p
Total dividends paid 115.05p 4.00p -
Net asset value plus
dividends paid 115.05p 110.90p 100.00p
-------------------------------------- ----------- --------- --------- -------
Year ended 28 February
2017
Ord Shares A Shares B Shares Total
Net assets GBP'000 2,304 10,356 6,808 19,468
Net asset value per
share Pence 11.32p 104.07p 99.76p n/a
----------- --------- --------- -------
(Loss)/profit before
tax GBP'000 (56) 431 (27) 348
Earnings/(loss) per
share Pence 0.06p 3.53p (0.27p) n/a
----------- --------- --------- -------
Cumulative return to shareholders
(p)
Net asset value per
share 11.32p 104.07p 99.76p
Total dividends paid 103.75p - -
Net asset value plus
dividends paid 115.07p 104.07p 99.76p
-------------------------------------- ----------- --------- --------- -------
Triple Point VCT 2011 plc ("the Company") is a Venture Capital Trust ("VCT"). The Investment Manager is Triple Point Investment Management LLP ("TPIM" and "Triple Point"). The Company was incorporated in July 2010.
-- Ordinary Shares: On 16 January 2018 the Company cancelled 20,349,869 Ordinary Shares, paying the final 1p back to Shareholders. At the date of cancellation, a total of GBP23,412,524 had been returned to the Ordinary Shareholders.
-- A Shares: On 30 April 2015 the A Share Class offer closed having raised GBP10.3 million with a total of 9,951,133 A Shares being issued.
-- B Shares: On 29 April 2016 the B Share Class offer closed having raised GBP6,972,311 with a total of 6,824,266 B Shares being issued.
The Strategic Report on pages 2 to 21, the Directors' Report on pages 22 to 26, the Corporate Governance report on pages 27 to 31 and the Directors' Remuneration Report on pages 32 to 35 have each been drawn up in accordance with the requirements of English law and liability in respect thereof is also governed by English law. In particular, the responsibility of the Directors for these reports is owed solely to Triple Point VCT 2011 plc.
The Directors submit to the members their Annual Report and Financial Statements for the Company for the year ended 28 February 2018.
Strategic Report
The Strategic Report, on pages 2 to 21, has been prepared in accordance with the requirements of section 414c of the Companies Act 2006. Its purpose is to inform the members of the Company and help them to assess how the Directors have performed their duty to promote the success of the Company, in accordance with section 172 of the Companies Act 2006.
Chairman's Statement
I am writing to present the Financial Statements for Triple Point VCT 2011 plc ("the Company") for the year ended 28 February 2018.
I am delighted to report that during the year the Company successfully completed the realisation of the Ordinary Share Class portfolio. The final 1p per share of capital was distributed to the Ordinary Class Shareholders on 31 January 2018. Taken together with the cumulative dividends of 114.05p, the total returned was 115.05p per share. This result exceeds the original target return of 108.4p at launch by 6.65p per share.
Both the A Share Class and the B Share Class portfolios remain fully invested and are performing in line with expectations. The Company continued to oversee the ongoing operation of the A Share Class investments, as well as monitoring the construction of the gas fired energy centres in the B Share Class portfolio.
Investment Portfolio
The Company's funds at 28 February 2018 were 98% invested in a portfolio of VCT qualifying and non-qualifying unquoted investments. It continues to meet the condition that 70% of relevant funds must be invested in qualifying investments.
The Investment Manager's review on pages 11 to 14 gives an update on the portfolio of investments in 12 small unquoted businesses.
A Share Class
The A Share Class has investments in six companies in the Hydroelectric Power sector which between them own seven hydroelectric schemes in the Scottish Highlands. I am pleased to report that all schemes have been successfully commissioned and are fully operational.
The A Share Class has recorded a profit over the period of 6.83p per share and as at 28 February 2018 the NAV per share stood at 106.90p, which when taken with dividends paid to date provides a total shareholder return of 110.90p - slightly ahead of target.
The Company's distributable reserves are restricted until March 2019; consequently the Board has resolved to pay a 2.75p dividend, the maximum permitted. Once the distributable reserves are no longer restricted the Board expects the Company to be able to pay dividends at higher levels in order to meet A Share Class return target.
B Share Class
The B Share Class has invested GBP5.1 million into two companies that commenced construction of two gas fired energy centers during May 2017. We are pleased to report both energy centers are now fully constructed and are due to be commissioned in the next few months.
The B Share Class has recorded a small profit over the year of 0.24p per share due to an uplift in the valuation of a Non-Qualifying Investment. Both qualifying companies will continue to be held at cost until they become operational and generating revenue. The NAV per share at 28 February 2018 was 100.00p.
Specific Risks
The principal risks which the Board feel the Company is facing are discussed in further detail on pages 9 and 10.
In particular the Board consider specific risks to be;
-- Investment risk associated with the VCT's portfolio of unquoted investments; -- Risk of failure to maintain approval as a qualifying VCT;
-- Risk of inability to realise investments in order to return funds to investors in line with expectations.
The Board believes these risks are manageable and, with the Investment Manager, continues to work to minimise either the likelihood or potential impact of these risks within the scope of the Company's established investment strategy.
Outlook
After the successful realisation of the Ordinary Share Class investments and the subsequent return of funds, the Board and the Investment Manager will continue to support the businesses in which the Company is invested, and will work with them to improve efficiencies and maximise revenues. Going forward the Board will, together with the Investment Manager, explore opportunities to grow the Company.
The Autumn Budget 2017 brought about changes to the VCT landscape with the government, through its 'Financing Growth in Innovative Firms' consultation ("the Patient Capital Review") highlighting the importance of VCTs in helping to provide investments into SMEs. The outcome of this review has seen several changes proposed, including increasing a VCT's minimum qualifying percentage threshold from 70% to 80%. This will come into effect from 6 April 2019.
Another key finding of the Patient Capital Review is that future qualifying investments (from 6 April 2018) must adhere to new deployment timelines with 30% of new funds required to be invested within the first 12 months compared to the previous timeframe of 3 years.
VCTs will also be subject to a new principles-based test that will aim to ensure they focus on investment in companies seeking investment for their long-term growth and development.
The Company, along with the Investment Manager, has begun to put in place procedures to ensure the transition required will have a minimal effect on the Company. The Board believe we are making good progress in this area and are on track to implement any required changes.
If you have any questions about your investment, please do not hesitate to contact Triple Point on 020 7201 8990.
Jane Owen
Chairman
17 May 2018
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
At launch the Company targeted post-tax returns for Ordinary Shares of 9% to 11% pa. On a weighted average share price using a 9% return this is broadly equivalent to a total return to investors of 108.4p. This compares to the actual return to Shareholders of 115.05p.
The target for the A Share Class is to pay dividends of an average 5p per share from 2017 for four years, followed by a partial realisation targeted to bring the aggregate distribution from the Company to 70p per A Share after five years. Thereafter an ongoing dividend yield of 7% per annum of net asset value is targeted for a further nine years. The A Share Class reported an income return of 4.44p and a 2.39p capital return for the year to 28 February 2018. The net asset value per share for the A Share Class at 28 February 2018 stood at 106.90p.
The target for the B Share Class is to pay dividends of an average 5p per share from 2019. The B Share Class reported an income loss of 0.01p and a capital return of 0.25p for the year to 28 February 2018. The net asset value per share for the B Share Class at 28 February 2018 stood at 100.00p.
The Board and the Investment Manager are both committed to ensuring that returns on the investment portfolio are optimised and that the VCT continues to be managed in line with the Company's investment strategy and risk profile.
The Board expects the Investment Manager to deliver a performance which meets the objective of achieving long-term investment returns, including tax-free dividends. A review of the performance of the Company's investments during the financial year, the position of the Company at the year end and the outlook for the coming year is contained within the Chairman's Statement on page 2 to 3 and the Investment Manager's Review on pages 11 to 14.
Dividend Policy
Generally, a VCT must distribute by way of dividend such amounts as to ensure that it retains not more than 15% of its income from shares and securities. The Directors aim to maximise tax free distributions to shareholders of income or realised gains. It is envisaged that the Company will distribute most of its net income each year by way of dividend, subject to liquidity.
Investment Policy
The key objectives of the Company are to:
-- Pay regular tax-free dividends to investors;
-- maintain VCT status to enable investors to benefit from the associated tax reliefs;
-- reduce the volatility normally associated with early stage investments by applying its Investment Policy; and
-- In respect of the B Share Fund, provide investors with the option to exit shortly after 5 years following investment.
The Company will not vary these objectives to any material extent without the approval of the Shareholders.
The Company's investment policy has been designed to satisfy the legislative requirements of the VCT scheme and to provide stable and readily realisable returns. The Company's investment policy is directed towards new investments into cash generative businesses which are operating in stable or mature fields with a high quality customer base and which can provide a positive return to investors. The investments will be made with the intention of growing and developing the revenues and profitability of the target businesses to enable them to be considered for traditional forms of bank finance and other funding. This, in turn, should enable the Company to benefit from refinance gains or from a favourable sale to a third party.
As identified in the Chairman's Statement, the outcome of the government's Patient Capital Review was announced in the Autumn Budget in 2017. Although the landscape of VCTs will be affected the investment policy of the Company will continue to aim for regular tax-free dividends, maintenance of the VCT qualifying status and to minimise the volatility associated with early stage investments.
In respect of Qualifying Investments the Company will seek:
(a) Investments in which robust due diligence has been undertaken into target investments;
(b) Investments where there is a high level of access to regular, material financial and other information;
(c) Investments where the risk of capital losses is minimised through careful analysis of the collateral available; and
(d) Investments where there is a strong relationship with the key decision makers.
Target Asset Allocation
At least 70% of the Company's net assets will be invested in Qualifying Investments. The remaining assets will be exposed either to (i) cash or cash-based similar liquid investments or (ii) investments originated in line with the Company's Qualifying Investment policy but with realisation dates which fit with the liquidity needs of the Company.
Qualifying Investments will typically range between GBP500,000 and GBP5,000,000 and encompass businesses with strong asset bases, predictable revenue streams or with contractual revenues from financially sound counterparties. No single investment by the Company will represent more than 15 per cent of the aggregate net asset value of the Company at the time the investment is made.
Qualifying Investments
The Company will pursue investments in a range of industries but the type of business being targeted is subject to the specific investment criteria discussed below. The objective is to build a portfolio of unquoted companies which are cash generative and, therefore, capable of producing income and capital repayments to the Company prior to their disposal by the Company.
Although invested in diverse industries, it is intended that the Company's portfolio will comprise companies with certain characteristics, for example clear commercial and financial objectives, strong customer relationships and, where possible, tangible assets with value. Triple Point will focus on identifying businesses typically with contractual revenues from financially sound counterparties or a stream of predictable transactions with multiple clients. Businesses with assets providing valuable security may also be considered. The objective is to reduce the risk of losses through reliability of cash flows or quality of asset backing and to provide investors with tax-free income.
The criteria against which investment targets would be assessed include the following:
(a) An attractive valuation at the time of the investment; (b) Minimising the risk of capital losses; (c) The predictability and reliability of the company's cash flows; (d) The quality of the business's counterparties, suppliers; (e) The sector in which the business is active; (f) The quality of the company's assets; (g) The opportunity to structure an investment to produce distributable income;
(h) Growing and developing the revenues and profitability of the Company to enable it to be considered for traditional forms of bank finance and other funding; and
(i) In respect of the B Share Fund, the prospect of achieving an exit after 5 years of the life of the B Share Fund.
As the value of investments increase the Company's Investment Manager will monitor opportunities for the Company to realise capital gains to enable the Company to make tax-free distributions to shareholders.
Non-Qualifying Investments
The Non-Qualifying Investments will be managed with the intention of generating a positive return. The Non-Qualifying Investments will comprise from time to time a variety of assets including investments following Triple Point's Navigator Strategy, quoted or unquoted investments (direct or indirect) in cash and highly liquid interest bearing investments, secured loans, bonds, equities, and collective investment schemes.
Borrowing Powers
The Company has no present intention of utilising direct borrowing as a strategy for improving or enhancing returns. To the extent that borrowing is required, the Directors will restrict the borrowings of the Company and exercise all voting and other rights or powers of control over its subsidiary undertakings (if any) to ensure that the aggregate amount of money borrowed by the group, being the Company and any subsidiary undertakings for the time being, (excluding intra-group borrowings), will not, without shareholder approval, exceed 30 per cent of its NAV at the time of any borrowing.
Risk Diversification
The Company aims to invest in a number of different businesses within different industry sectors but may focus investments in a single sector where appropriate to do so. No single investment by the Company will represent more than 15 per cent of the aggregate NAV of the Company at the time the investment is made.
The above Investment Policy does not take into account the changes to the VCT rules relating to non-qualifying investments that took effect on 6 April 2016. From that date any non-qualifying investments must be in either shares or units in alternative investment funds, undertakings for collective investment in transferable securities (UCITS) which meet certain requirements or ordinary shares / securities in a company which are acquired on a regulated market. The Investment Manager will make sure that all non-qualifying investments made after that date meet the new requirements.
Key Performance Indicators
As a VCT the Company's objectives are providing Shareholders with up front tax relief and returns through capital appreciation and the payment of dividends.
The primary KPI in meeting these objectives is:
-- Net Asset Value plus dividends paid.
A record of this indicator is detailed on page 1 entitled Financial Summary.
Tax Benefits
The Company's objective is to provide shareholders with an attractive income and capital return by investing its funds in a broad spread of unlisted UK companies which meet the relevant criteria for investment by Venture Capital Trusts.
Investing in a VCT brings the benefit of tax-free dividends, as well as up-front income tax relief. The Company continues to meet the VCT qualification requirements which are continuously monitored by the Investment Manager and reviewed by the Directors.
Investment classification by asset value and sector value are shown on the following pages:
Investment Portfolio - A Share Class
VCT Qualifying Investments 65% VCT Non-Qualifying Investments 32% Cash 3%
Investments by Sector - A Share Class
The A Shares unquoted investment portfolio by sector at 28 February 2018:
Hydro Electric Power 66% SME Funding Hydro Electric Power 18% SME Funding Other 16%
Investment Portfolio - B Share Class
VCT Qualifying Investments 74% VCT Non-Qualifying Investments 25% Cash 1%
Investments by Sector - B Share Class
The B Shares unquoted investment portfolio by sector at 28 February 2018:
Gas Power 75% SME Funding - Other 25%
VCT Regulation
VCTs were first 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 current tax benefits available to eligible investors in VCTs include:
-- Up-front income tax relief of 30% on a maximum investment of GBP200,000 per tax year on newly-issued shares;
-- exemption from income tax on dividends received; and -- exemption from capital gains tax on disposals of shares in VCTs.
Since the Finance Act 2004, the VCT rules have subsequently been amended under the Finance Act 2014 and The Finance (No 2) Act 2015. The Investment Manager, utilising advice from Philip Hare & Associates LLP, ensures continued compliance with any legislative changes.
As referred to in the Chairman's Statement on page 3, further changes are to be introduced with effect from 6 April 2019. The Company will continue to ensure its compliance with the qualification requirements.
The Company has been approved as a VCT by Her Majesty's Revenue and Customs. In order to maintain this approval the Company must comply with certain requirements on a continuing basis. Within three years from the effective date of provisional approval or later allotment at least 70% of the Company's investments must comprise "qualifying holdings" of which at least 30% must be in eligible Ordinary Shares. This investment criterion continues to be met.
FCA Regulation
On 22 July 2014 Triple Point VCT 2011 plc registered with the Financial Conduct Authority as a small Alternative Investment Fund Manager ("AIFM") under the AIFM Directive.
Exit Programme
The Directors and the Investment Manager put in place a programme to manage the investment realisations for the Ordinary Class Shareholders over the course of 2016. During the year these plans were realised and exit of the Ordinary shares was successfully completed, resulting in a total return to Shareholders of 115.05p per share.
The Company and Investment Manager continue to be committed to ensuring a timely exit and return of funds to B Class Shareholders as soon as practicable after the end of the minimum five year holding period. The Investment Manager has a strong track record in managing such exits. In relation to the A Share Class the Company is intending to secure a partial realisation after five years but plans to retain its investment in the Hydro companies until 2030.
Principal Risks and Risk Management
The Directors carry out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. The main areas of risk identified by them, along with the risks to which the Company is exposed through its operational and investing activities, are detailed below.
VCT qualifying status risk: the Company is required at all times to observe the conditions laid down in the Income Tax Act 2007 for the maintenance of approved VCT status. The loss of such approval could lead to the Company losing its exemption from corporation tax on capital gains, to investors being liable to pay income tax on dividends received from the Company and, in certain circumstances, to investors being required to repay the initial income tax relief on their investment. The Investment Manager keeps the Company's VCT qualifying status under continual review and reports to the Board on a quarterly basis. The Board has also appointed Philip Hare & Associates LLP to undertake an independent VCT status monitoring role.
Investment risk: the Company's VCT qualifying investments will be held in small and medium-sized unquoted investments which, by their nature, entail a higher level of risk and lower liquidity than investments in large quoted companies. This can make it difficult to realise investments at the end of a particular Share Class's holding period but the Directors and Investment Manager aim to limit the risk attached to the portfolio as a whole by careful selection and timely realisation of investments, by carrying out rigorous due diligence procedures and by maintaining a spread of holdings in terms of industry sector and geographical location. The Board reviews the investment portfolio with the Investment Manager on a regular basis.
Financial instrument risk: Financial Instrument risks are described in note 16.
Financial risk: as a VCT the Company is exposed to market price risk, credit risk, fair value risk, liquidity risk and interest rate risk. As most of the Company's investments will involve a medium to long-term commitment and will be relatively illiquid, the Directors consider that it is inappropriate to finance the Company's activities through borrowing, other than for short term liquidity.
Failure of Internal controls 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 2016 revision to the UK 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 this requirement, the Board takes into account the Company's current position and the principal risks as set out on pages 9 and 10 so that the Directors may state that they have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment.
To provide this assessment the Board has considered the Company's financial position and ability to meet its expenses as they fall due as well as considering longer term viability:
-- the expenses of the Company are predictable and modest in comparison with the assets and there are no capital commitments foreseen which would alter that position;
-- the Company has no employees, only Non-Executive Directors and consequently does not have redundancy
or other employment related liabilities or responsibilities;
-- most of the Company's investments will involve a medium to long-term commitment and will be relatively illiquid but the board reduces the risk as a whole by careful selection and timely realisation of investments; and
-- the Directors will continue to monitor closely changes in the VCT legislation and adapt to any changes to ensure the Company maintains approval. The Directors have appointed an independent adviser to undertake the VCT status monitoring role.
Based on the results of this review, the Directors have a reasonable expectation that the Company will be able to continue its operations and meet its expenses and liabilities as they fall due over the period of their assessment. During the next five years the B Share Class will reach its 5 year holding period and the A Share Class will partially exit, based on this the Directors believe it is reasonable to make their assessment over 5 years.
Share Price Discount Policy
The Company has a share buy-back facility, committing to buy back shares at no more than a 10% discount to the prevailing NAV, subject to the Directors' discretion. We will be asking shareholders at the Annual General Meeting to extend the facility for the Company to purchase shares in the market for cancellation. Shareholders should note that if they sell their shares within five years of subscription they forfeit any tax relief obtained. If you are considering selling your shares please contact TPIM on 020 7201 8989.
Environmental, Social, Employee and Human Rights Issues
Due to the nature of the Company's activities, there being no employees and only 3 Non-Executive Directors, there are no Human Rights Issues to report. Its investment in companies engaged in energy generation from renewable sources means it will contribute to the reduction in carbon emissions.
Gender Diversity
The Board of Directors comprises 1 female and 2 male Directors. The Investment Manager has 70 staff of whom 37 are men and 33 are women.
Investment Manager's Review
Sector Analysis
The unquoted investment portfolio can be analysed as follows:
Electricity
Generation SME Funding
Hydro Hydro Total
Cinema Electric Electric Unquoted
Industry Sector Digitisation Power Gas Power Power Other* Investments
------------------------- -------------- -------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------------- ---------- ---------- ---------- -------- -------------
Investments at
28 February 2017
-------------------------
Ordinary Shares 191 - - - 5 196
A shares - 6,335 - 1,949 1,518 9,802
B shares - - 5,100 - 1,686 6,786
-------------- --------
Total Investments 191 6,335 5,100 1,949 3,209 16,784
------------------------- -------------- ---------- ---------- ---------- -------- -------------
Investments made
during the period
------------------------- -------------- ---------- ---------- ---------- --------
Ordinary Shares - - - - - -
A Shares - - - - - -
B Shares - - - - - -
-------------
Total additions - - - - - -
------------------------- -------------- ---------- ---------- ---------- -------- -------------
Investments disposed
of during the
period
------------------------- -------------- -------- -------------
Ordinary Shares (191) - - - (5) (196)
A shares - - - (297) - (297)
B Shares - - - - - -
-------------- ---------- ---------- ---------- -------- -------------
Total disposals (191) - - (297) (5) (493)
------------------------- -------------- ---------- ---------- ---------- -------- -------------
Investment revaluations
during the period
------------------------- -------------- ---------- ---------- ---------- -------- -------------
Ordinary Shares - - - - - -
A shares - 242 - - (3) 239
B Shares - - - - 24 24
-------------
Total revaluations - 242 - - 21 263
------------------------- -------------- ---------- ---------- ---------- -------- -------------
Investments at
28 February 2018
------------------------- -------- -------------
Ordinary Shares - - - - - -
A Shares - 6,577 - 1,652 1,515 9,744
B Shares - - 5,100 - 1,710 6,810
- 6,577 5,100 1,652 3,225 16,554
------------------------- -------------- ---------- ---------- ---------- -------- -------------
Unquoted Investments
% 0.00% 39.73% 30.81% 9.98% 19.48% 100.00%
------------------------- -------------- ---------- ---------- ---------- -------- -------------
* Other SME funding includes GBP1,515,000 of A Ordinary Share Class investments and GBP1,710,000 of B Ordinary Share Class investment in to a UK based LLP which provides finance to small and medium sized enterprises.
The VCT was established to fund small and medium sized enterprises. After the exit of the Ordinary Share Class during the year, it now has two share classes with separate portfolios as detailed on page 11. At the year end the overall portfolio comprised investments in 12 small, unquoted companies focussing investments in two areas: electricity generation and SME funding.
This year the Company elected not to raise funds for new investments due to the desire to understand the implications of the Patient Capital review (mentioned in the Chairman's Report on page 3) and an uncertain investment environment. With both remaining share classes fully invested, the Company and the Investment Manager have focussed on asset optimisation and portfolio management.
A number of new requirements were put in place following the Patient Capital Review, including an increase in the threshold for qualifying investments from 70% to 80% from 6 April 2019. The Investment Manager monitors compliance with all qualification conditions closely, and maintains a forward-looking Qualifying Investment Tracker. We will endeavour to ensure continuing compliance with all conditions.
The majority of the Company's portfolio consists of businesses which are fully operational and revenue generating, with two still in the construction process and expected to be revenue generating in the next few months. Generally, performance during the year across the portfolio has been in line with expectations with the A Share Class recording an uplift in NAV (including dividends) from the performance of its portfolio from 104.07p per share to 110.90p per share. The B Share Class recorded an uplift from 99.76p per share to 100.00p per share due to a revaluation of a non-qualifying investment.
Review & Outlook
Ordinary Share Class
April 2016 marked the end of this Share Class's five year minimum VCT holding period. The successful realisation of the Ordinary Share Class investments was completed during the year and the shares were cancelled on 16 January 2018. The company subsequently made its final distribution to Shareholders which brought the total returned to Shareholders to 115.05p per share. This exceeds the original target return of 108.4p at launch by 6.65p per share.
A Share Class
The A Share Class has investments in six hydro-electric companies which between them own seven hydroelectric schemes in the Scottish Highlands. All seven schemes have been commissioned and are operational. The A Share Class also has investments in two other companies which provide funding to SMEs.
We are pleased to report that the performance of the hydro schemes has improved over the course of 2017 after the uncharacteristically dry autumn and winter period in 2016. As a result the majority of the portfolio has recorded an uplift in valuations. One company, Green Highland Shenval Ltd, has resolved a contractual dispute which has resulted in a write down. Nonetheless, the company continues to operate well and we believe that the VCT will recover its original investment. Overall the A Share Class is pleased to have recorded an increased profit of 6.83p per share for the year.
The seven hydro-electric schemes are "run of river" plants which capture river flow agreed above a certain level as determined by the Scottish Environment Protection Agency (SEPA). Water flow is generally captured before a descent and flows down the penstock (pipe) to a turbine engine which produces electricity. The water is then returned to the river. The hydro companies benefit from government backed Feed-in Tariff payments based on output and also from the sale of the electricity produced to utilities or other power companies under Power Purchase Agreements (PPAs). The contract terms were renewed during 2017 and, due to the export market rising, the companies have continued to obtain better power prices than were originally forecast, currently earning an average of 6.19 pence per kWh (2017: 6.62 pence per kWh).
The hydro companies remain strongly focussed on seeking efficiencies and operating improvements. As part of this focus, during 2017 an Asset Manager was appointed to explore ways in which the companies could further enhance the operational performance of the schemes. Their work included reviewing scheme layouts, hydrology data, performance data and reporting on any inefficiencies and making recommendations on where improvement could be made to enhance performance. The companies are currently implementing some of the recommendations made by the Asset Manager.
When the business rates review took place in 2016 there was some concern that the results would significantly increase the costs of hydro businesses which occupy comparatively large areas of very rural land compared to
the relative level of their turnover. The companies, together with other industry members and the British Hydropower Association, have continued to lobby the Scottish Government to recognise these anomalies.
In February 2017, the Scottish Government announced a 12.5% limit on business rates increases in the hydro sector for schemes up to 1 MW for the year to 31 March 2018 and, on 12 September 2017, further announced a 60% relief on business rates for small-scale hydro schemes from 1 April 2018. The Company has investments in two companies with schemes above 1MW and the position for such schemes still remains unclear. Longer term, the Scottish Government has confirmed that it will work alongside industry organisations to fast track a review of the Plant and Machinery Order, which should address these issues.
We are pleased with the performance of the portfolio to date and we believe that, as the portfolio matures, there remains the opportunity to further enhance its value through strategic operational management.
Top Holdings by The A Share fund
Qualifying
Green Highland Allt Garbh Ltd has constructed a 1,300 KW run-of-river hydro-electric power plant near Glen Affric, Cannich. The scheme completed construction and was commissioned in July 2017. The company earns Feed-in-Tariffs and other revenues from the generation and export of electricity to the National Grid.
Green Highland Allt Ladaidh (1148) Ltd operates a 1,350 KW run-of-river hydro-electric power plant near Loch Garry, Invergarry in the Scottish Highlands. The company earns Feed-in-Tariffs and other revenues from the generation and export of electricity to the National Grid.
Green Highland Allt Luaidhe (228) Ltd operates a 500 KW run-of-river hydro-electric power plant located in Knockie, Whitebridge near Inverness in the Scottish Highlands. The company earns Feed-In-Tariffs from the generation and export of electricity to the National Grid.
Green Highland Allt Phocachain (1015) Ltd operates two separate 500 KW run-of-river hydraulic power plants located in Glen Moriston, in the Scottish Highlands. The company earns Feed-in-Tariffs from generation and export of electricity to the National Grid.
Non-Qualifying
Broadpoint 2 Ltd is a VCT non-qualifying investment, which has provided investment to hydro-electric power companies.
Broadpoint 3 Ltd owns equity stakes in hydro-electric power companies and one rooftop solar PV company.
Funding Path Ltd is a VCT non-qualifying investment, which has invested in an LLP that provides finance to small and medium sized enterprises (SME's).
Modern Power Generation Ltd is a VCT non-qualifying investment, which has invested in an LLP that provides finance to small and medium sized enterprises (SME's).
B Share Class
The B Share Class remains fully invested with one Non-Qualifying Investment and two Qualifying Investments in companies constructing gas fired energy centres. Both energy centres are in the final stages of construction, and are due to be commissioned in the next few months.
These energy centres are containerised gas combustion engines that generate electricity for onward sale, especially at times when there is high demand for power. Britain is aiming to close its coal-fired power plants by 2025, and it is therefore expected that there will be a shortage in the supply of energy in the UK. Although renewable energy makes an increasing contribution, the irregular nature of its production means that other baseload sources will also be required to make up the deficit.
The companies have taken advantage of a gap in the market by constructing, operating and owning gas fired energy centres to produce and sell electricity to customers. The energy centres utilise simple technology, provided by Rolls Royce, to provide a reliable and secure energy supply.
Gas will be purchased from the National Transmission System and combusted in the engines. The electricity will then be exported to the National Grid and sold under a power purchase agreement. The companies will receive revenues from the sale of electricity and income from embedded benefits.
Embedded benefits cover a range of payments available to small electricity generators connected to the distribution network, rather than the transmission grid. Benefits can be earned for generating at peak times and for local distribution. In addition generators can earn additional revenues by operating outside the peak 4-7pm hours to take advantage of 'intraday' and 'post-gate closure' price volatility.
Both qualifying companies detailed below are in their infancy and have been actively managing the construction of their energy centres. A more detailed review will be included once the energy centres have sufficient operating history for meaningful analysis.
In the year ahead our focus will be on working with the companies as they become fully operational to maximise their performance in line with the return targets of the Share Class.
Top Holdings by The B Share fund
Qualifying
Distributed Generators Ltd has constructed a 5 MW gas power plant in Bedford. The 2 x 2.5 MW gas fired MTU Rolls Royce Engines have been successfully installed and construction was completed in May 2018.
Green Peak Generation Ltd has constructed a 7.5 MW gas power plant in Workington, Cumbria. The 3 containerised 2.48 MW gas fired MTU Rolls Royce Engines have been successfully installed and construction was completed in May 2018.
Non-Qualifying
Modern Power Generation Ltd: is a VCT non-qualifying investment, which has invested in an LLP that provides finance to small and medium sized enterprises (SME's).
Non Qualifying Investments
SME Funding
The Company has non-qualifying investments in four finance companies. These companies have invested in a dedicated non-bank SME lending business which aims to address the financing needs of the UK SME market by providing business critical loans and asset finance to over 60,000 UK Corporate and SME customers.
If you have any questions, please do not hesitate to call us on 020 7201 8990.
Ben Beaton
Managing Partner
For Triple Point Investment Management LLP
17 May 2018
Investment Portfolio Summary
28 February 2018 28 February 2017
------------------------------------ ------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted qualifying
holdings 11,423 68.84 11,677 69.07 11,723 63.85 11,626 63.51
Non-Qualifying holdings 4,811 29.01 4,877 28.84 5,109 27.84 5,158 28.18
Financial assets at
fair value through
profit or loss 16,234 97.85 16,554 97.91 16,832 91.69 16,784 91.69
Cash and cash equivalents 353 2.15 353 2.09 1,525 8.31 1,525 8.31
16,587 100.00 16,907 100.00 18,357 100.00 18,309 100.00
======== ======= ======== ======= ======== ======= ======== =======
Qualifying Holdings
Unquoted
Cinema Digitisation
DLN Digital Ltd - - - - 300 1.63 191 1.04
Hydro Electric Power
Green Highland Allt
Choire A Bhalachain
Ltd 30 0.18 30 0.18 30 0.16 29 0.16
Green Highland Allt
Garbh Ltd 2,250 13.56 2,250 13.31 2,250 12.26 2,250 12.29
Green Highland Allt
Ladaidh (1148) Ltd 1,470 8.86 1,802 10.66 1,470 8.01 1,470 8.03
Green Highland Allt
Luaidhe (228) Ltd 855 5.15 937 5.54 855 4.66 877 4.79
Green Highland Allt
Phocachain (1015)
Ltd 858 5.17 1,005 5.94 858 4.67 849 4.64
Green Highland Shenval
Ltd 860 5.18 553 3.27 860 4.68 860 4.70
Gas Power
Distributed Generators
Ltd 3,200 19.29 3,200 18.93 3,200 17.43 3,200 17.48
Green Peak Generation
Ltd 1,900 11.45 1,900 11.24 1,900 10.35 1,900 10.38
11,423 68.84 11,677 69.07 11,723 63.85 11,626 63.51
======== ======= ======== ======= ======== ======= ======== =======
Non-Qualifying Holdings
Unquoted
Hydro Electric Power
Green Highland Allt
Choire A Bhalachain
Ltd 3 0.02 3 0.02 3 0.02 3 0.02
Green Highland Allt
Ladaidh (1148) Ltd 30 0.18 30 0.18 30 0.16 30 0.16
Green Highland Allt
Luaidhe (228) Ltd 61 0.37 61 0.36 61 0.33 61 0.33
Green Highland Allt
Phocachain (1015)
Ltd 2 0.01 3 0.02 3 0.02 3 0.02
Kinlochteacius Hydro
Ltd - - - - 47 0.26 47 0.26
SME Funding:
Hydro Electric Power
Broadpoint 2 Ltd 550 3.32 550 3.25 800 4.36 800 4.37
Broadpoint 3 Ltd 1,005 6.06 1,005 5.94 1,005 5.47 1,005 5.49
Other
Broadpoint Ltd - - - - - - 5 0.03
Funding Path Ltd 1,000 6.03 1,000 5.91 1,000 5.45 1,010 5.52
Modern Power Generation
Ltd 2,160 13.02 2,225 13.16 2,160 11.77 2,194 11.98
4,811 29.01 4,877 28.84 5,109 27.84 5,158 28.18
======== ======= ======== ======= ======== ======= ======== =======
Financial Assets including those held for sale are measured at fair value through profit or loss. The initial best estimate of fair value of these investments that are either quoted or unquoted on an active market is the transaction price (i.e. cost). The fair value of these investments is subsequently measured by reference to the enterprise value of the investee company, which is best deemed to reflect the fair value. Where the Board considers the investee company's enterprise value to remain unchanged since acquisition, investments continue to be held at cost less any loan repayments received. Where the Board considers the investee company's enterprise value has changed since acquisition, investments are held at a value measured using a discounted cash flow model or the value to be realised on disposal which is equivalent to fair value.
Investment Portfolio Ten Largest Unquoted Investments
Distributed Generators Ltd
Date of first Cost GBP Valuation Valuation Income Equity Equity
investment GBP Method recognised Held Held
by TP11 by TP11 by TPIM
for the % managed
year funds
GBP'000 %
02-Apr-2016 3,200,000 3,200,000 Cost (1) 45.00 45.00
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover -
Earnings before interest, tax, amortisation
and depreciation (EBITDA) (92)
Loss before tax (91)
Net assets before VCT loans 3,911
Net assets 2,681
Distributed Generators Ltd has constructed a 5 MW gas
power plant in Bedford. The 2 x 2.5 MW gas fired MTU
Rolls Royce Engines have been installed and construction
was completed in May 2018. Once commissioned, the plant
will generate revenues through the sale of electricity
to the National Grid, when electricity prices are at
their highest.
---------------------------------------------------------------------------------------
Green Highland Allt Garbh
Ltd
Date of first Cost GBP Valuation Valuation Income Equity Equity
investment GBP Method recognised Held Held by
by TP11 by TP11 TPIM managed
for the % funds
year %
GBP'000
01-Apr-2015 2,250,000 2,250,000 Cost 151 22.79 50.25
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover 52
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 17
Loss before tax (82)
Net assets before VCT loans 4,876
Net assets 3,389
Green Highland Allt Garbh Ltd has constructed a 1,300
KW run-of-river hydro-electric power plant near Glen
Affric, Cannich. The scheme completed construction
and was commissioned in July 2017. The company earns
Feed-in-Tariffs and other revenues from the generation
and export of electricity to the National Grid.
--------------------------------------------------------------------------------------------
Modern Power Generations
Ltd
Date of first Cost GBP Valuation Valuation Income Equity Equity
investment GBP Method recognised Held Held by
by TP11 by TP11 TPIM managed
for the % funds
year %
GBP'000
Share
of net
04-Apr-2016 2,160,000 2,225,000 assets 107 49.90 49.90
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover 150
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 144
Profit before tax 54
Net assets before VCT loans 2,204
Net assets 1,409
Modern Power Generations Ltd is a VCT non-qualifying
investment, which has invested in an LLP that provides
finance to small and medium sized enterprises (SME's).
--------------------------------------------------------------------------------------------
Green Peak Generation Ltd
Date of first Cost GBP Valuation Valuation Income Equity Equity
investment GBP Method recognised Held Held by
by TP11 by TP11 TPIM managed
for the % funds
year %
GBP'000
02-Apr-2015 1,900,000 1,900,000 Cost (4) 41.67 89.94
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover -
Earnings before interest, tax, amortisation
and depreciation (EBITDA) (132)
Loss before tax (95)
Net assets before VCT loans 3,911
Net assets 2,681
Green Peak Generation Ltd has constructed a 7.5 MW
gas power plant in Workington, Cumbria. The 3 containerised
2.48 MW gas fired MTU Rolls Royce Engines have been
installed and construction was completed in May 2018.
Once commissioned the plant will generate revenues
through the sale of electricity to the National Grid
when electricity prices are at their highest.
--------------------------------------------------------------------------------------------
Green Highland Allt Ladaidh
(1148) Ltd
Date of first Cost GBP Valuation Valuation Income Equity Equity
investment GBP Method recognised Held Held by
by TP11 by TP11 TPIM managed
for the % funds
year %
GBP'000
Discounted
cash
19-Mar-2015 1,470,000 1,832,000 flow 126 15.07 50.25
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover 484
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 292
Loss before tax (294)
Net assets before VCT loans 4,561
Net assets 3,061
Green Highland Allt Ladaidh (1148) Ltd operates a 1,350
KW run-of-river hydro-electric power plant near Loch
Garry, Invergarry in the Scottish Highlands. The company
earns Feed-in-Tariffs and other revenues from the generation
and export of electricity to the National Grid.
---------------------------------------------------------------------------------------------
Funding Path Ltd
Date of first Cost GBP Valuation Valuation Income Equity Equity
investment GBP Method recognised Held Held by
by TP11 by TP11 TPIM managed
for the % funds
year %
GBP'000
Share
of net
29-Jan-2016 1,000,000 1,000,000 assets 78 49.00 98.00
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover 275
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 268
Profit before tax 41
Net assets before VCT loans 3,232
Net assets 32
Funding Path Ltd is a VCT non-qualifying investment,
which has invested in an LLP that provides finance
to small and medium sized enterprises (SMEs).
--------------------------------------------------------------------------------------------
Broadpoint 3 Ltd
Date of first Cost GBP* Valuation Valuation Income Equity Equity
investment GBP Method recognised Held Held by
by TP11 by TPIM managed
for the TP11 funds
year GBP'000 % %
Discounted
Cash
08-Jan-2016 1,005,000 1,005,000 Flow* - 0.00 0.00
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover -
Earnings before interest, tax, amortisation
and depreciation (EBITDA) (11)
Loss before tax (11)
Net assets before VCT loans 2,995
Net assets (20)
Broadpoint 3 Ltd owns equity stakes in hydro-electric
power companies and one rooftop solar PV company.
---------------------------------------------------------------------------------------------
*The directors consider the fair value to be equivalent to the par value.
Green Highland Allt Phocachain
(1015) Ltd
Date of first Cost Valuation Valuation Income Equity Equity
investment GBP GBP Method recognised Held Held by
by TP11 by TP11 TPIM managed
for % funds
the %
year
GBP'000
Discounted
Cash
13-Nov-2014 858,000 1,008,000 Flow 76 8 100
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover 607
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 408
Loss before tax (263)
Net assets before VCT loans 4,006
Net assets 2,569
Green Highland Allt Phocachain (1015) Ltd operates
two separate 500 KW run-of-river hydraulic power plants
located in Glen Moriston, in the Scottish Highlands.
The company earns Feed-in-Tariffs from generation and
export of electricity to the National Grid.
-------------------------------------------------------------------------------------------
Green Highland Allt Luaidhe
(228) Ltd
Date of first Cost Valuation Valuation Income Equity Equity
investment GBP GBP Method recognised Held Held by
by TP11 by TP11 TPIM managed
for the % funds
year %
GBP'000
Discounted
Cash
18-Mar-2015 855,000 998,000 Flow 74 15.08 100.00
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover 275
Earnings before interest, tax, amortisation
and depreciation (EBITDA) 23
Loss before tax (306)
Net assets before VCT loans 2,240
Net assets 1,385
Green Highland Allt Luaidhe (228) Ltd operates a 500
KW run-of-river hydro-electric power plant located
in Knockie, Whitebridge near Inverness in the Scottish
Highlands. The company earns Feed-In-Tariffs from the
generation and export of electricity to the National
Grid.
-------------------------------------------------------------------------------------------
Broadpoint 2 Ltd
Date of first Cost Valuation Valuation Income Equity Equity
investment GBP* GBP Method recognised Held Held by
by TP11 by TPIM managed
for the TP11 funds
year GBP'000 % %
Discounted
Cash
07-Jan-2016 550,000 550,000 Flow* 47 49.00 98.00
Summary of Information from Investee Company GBP'000
Financial Statements 2017:
Turnover -
Earnings before interest, tax, amortisation
and depreciation (EBITDA) (11)
Loss before tax (20)
Net assets before VCT loans 3,088
Net assets (17)
Broadpoint 2 Ltd is a VCT non-qualifying investment,
which has provided investment to hydro-electric power
companies.
-------------------------------------------------------------------------------------------
*The directors consider the fair value to be equivalent to the par value.
Significant Influence
The principal undertakings in which the company's interest at the year-end is 20% or more are as follows:
Name Registered address Holding
18 St Swithin's Lane, London,
Broadpoint 2 Limited EC4N 8AD 49.00%
------------------------- --------------------------------------- --------
Distributed Generators 18 St Swithin's Lane, London,
Limited EC4N 8AD 45.00%
------------------------- --------------------------------------- --------
18 St Swithin's Lane, London,
Funding Path Limited EC4N 8AD 49.00%
------------------------- --------------------------------------- --------
Inveralmond Road, Inveralmond
Green Highland Industrial Estate, Perth, PH1
Alt Garbh Limited 3TW 22.79%
------------------------- --------------------------------------- --------
Green Highland Q Court, 3 Quality Street, Edinburgh,
Shenval Limited EH4 5BP 22.09%
------------------------- --------------------------------------- --------
Green Peak Generation Q Court, 3 Quality Street, Edinburgh,
Limited EH4 5BP 41.67%
------------------------- --------------------------------------- --------
Modern Power Generation 18 St Swithin's Lane, London,
Limited EC4N 8AD 49.90%
------------------------- --------------------------------------- --------
-- The investments are a combination of debt and equity.
-- Equity holding is equal to the voting rights.
-- All investments are held in the UK.
The Strategic Report has been approved by the Board and signed on their behalf by the Chairman.
Jane Owen
Chairman
17 May 2018
Report of the Directors
The Directors present their Report and the audited Financial Statements for the year ended 28 February 2018.
Details of Directors
Jane Owen is the Chairman of the Board of the Company. After graduating in law from Oxford University, Jane was called to the Bar in 1978 and until 1989 was a practising barrister in the chambers that are now 3 Verulam Buildings. Subsequently Jane became UK group legal director at Alexander & Alexander Services, and was appointed Aon's General Counsel in the UK in 1997, a position she held until 2008, where she was also a director of Aon Limited from 2001 to 2008. She is also a Non-Executive Director of TWG Europe Ltd and related companies and a Governor of James Allen's Girls' School.
Chad Murrin graduated in law from Cambridge University, and then qualified as a barrister. He worked for 3i Group plc from 1986-2004, the last five years as 3i's Corporate Development Director. In 2004, he set up his own corporate advisory business, Murrin Associates Limited. He holds the Advanced Diploma in Corporate Finance from The Corporate Finance Faculty of the ICAEW. He is a Non-Executive Director of Keytask Management Limited, E.W. Beard (Holdings) Limited, Procom-IM Limited and other companies.
Tim Clarke graduated in PPE from Oxford University. He joined Panmure Gordon & Co as an equities analyst, subsequently becoming a Partner and Head of Research. He joined Bass PLC in 1990, holding a number of operating roles in the Hotels, Pub and Restaurant divisions before becoming Chief Executive in 2000. Following its demerger he was Chief Executive of Mitchells & Butlers PLC until 2009. He was a Non-Executive Director of Associated British Foods PLC from 2004 until 2017. He is currently Chairman of Birmingham Airport, Chairman of Timothy Taylor & Co Ltd, and a Non-Executive Director of Hall & Woodhouse Ltd. He is Vice-Chairman of the Foundation of the Schools of King Edward VI in Birmingham.
All Directors are considered to be independent.
The Board has considered provision B.7.2 of the UK Corporate Governance Code (April 2016) 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 27 and 28 which demonstrates the Boards compliance with the UK Corporate Governance code.
Activities and Status
The Company is a Venture Capital Trust and its main activity is investing. The Company has chosen to focus its investing activities towards companies involved in renewable energy, energy production and SME funding.
The Company has been approved as a VCT by HMRC and, in the opinion of the Directors, has conducted its affairs so as to enable it to continue to obtain such approval.
The Company is registered in England as a Public Limited Company (Registration number 07324448). The Directors have managed, and intend to continue to manage, the Company's affairs in such a manner as to comply with Section 274 of the Income Tax Act 2007 which grants approval as a VCT.
The Company was not at any time up to the date of this report a close company within the meaning of S439 of the Corporation Tax Act 2010.
Post Balance Sheet Events
For details of post balance sheet events see note 21 to the Financial Statements.
Directors' and Officers' Liability Insurance
The Company has, as permitted by S233 of the Companies Act 2006, maintained insurance cover on behalf of the Directors and Company Secretary, indemnifying them against certain liabilities which may be incurred by them in relation to their offices with the Company.
Report of the Directors
Matters Covered in the Strategic Report
Dividends and financial risk management have both been discussed within the Strategic Report on pages 4 and 10.
Management
TPIM acts as Investment Manager to the Company. The principal terms of the Company's management agreement with TPIM are set out in note 5 to the Financial Statements.
The Board has evaluated the performance of the Investment Manager based on the returns generated since taking on the management of the Fund and a review of the management contract and the services provided in accordance with its terms. As required by the Listing Rules, the Directors confirm that in their opinion the continuing appointment of TPIM as Investment Manager is in the best interests of the shareholders as a whole. In reaching this conclusion the Directors have taken into account the performance of other VCTs managed by TPIM and the service provided by TPIM to the Company.
Substantial Shareholdings
As at the date of this report no disclosures of major shareholdings had been made to the Company under Disclosure and Transparency Rule 5 (Vote Holder and Issuer Notification Rules).
Global Greenhouse Gas Emissions
The Company has no greenhouse gas emissions to report from the operations of its Company, nor does it have responsibility for any other emission producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013.
Annual General Meeting
Notice convening the 2018 Annual General Meeting of the Company and a form of proxy in respect of that meeting can each be found at the end of this document.
Share Capital, Rights Attaching to the Shares and Restrictions on Voting and Transfer
The Ordinary Share capital was cancelled on 16 January 2018. The A Share capital is GBP100,000 divided into 10,000,000 shares of 1p each, of which 9,951,133 shares were in issue at 28 February 2018. The B Share capital is GBP100,000 divided into 10,000,000 shares of 1p each, of which 6,824,266 shares were in issue at 28 February 2018. As at that date none of the issued shares were held by the Company as treasury shares. Subject to any suspension or abrogation of rights pursuant to relevant law or the Company's articles of association, the shares confer on their holders (other than the Company in respect of any treasury shares) the following principal rights:
a) the right to receive out of profits available for distribution such dividends as may be agreed to be paid (in the case of a final dividend in an amount not exceeding the amount recommended by the Board as approved by shareholders in general meeting or in the case of an interim dividend in an amount determined by the Board). All dividends unclaimed for a period of 12 years after having become due for payment are forfeited automatically and cease to remain owing by the Company;
b) the right, on a return of assets on a liquidation, reduction of capital or otherwise, to share in the surplus assets of the Company remaining after payment of its liabilities pari passu with other holders of A Shares of that class and B Shares of that class.
c) the right to receive notice of and to attend and speak and vote in person or on a poll by proxy at any general meeting of the Company. On a show of hands every member present or represented and voting has one vote and on a poll every member present or represented and voting has one vote for every share of which that member is the holder; the validly executed appointment of a proxy must be received not less than 48 hours before the time of the holding of the relevant meeting or adjourned meeting or, in the case of a poll taken otherwise than at or on the same day as the relevant meeting or adjourned meeting, be received after the poll has been demanded and not less than 24 hours before the time appointed for the taking of the poll.
These rights can be suspended. If a member, or any other person appearing to be interested in shares held by that member, has failed to comply within the time limits specified in the Company's articles of association with a notice pursuant to S793 of the Companies Act 2006 (notice by a Company requiring information about interests in its shares), the Company can, until the default ceases, suspend the right to attend and speak and vote at a general meeting and if the shares represent at least 0.25% of their class the Company can also withhold any dividend or other money payable in respect of the shares (without any obligation to pay interest) and refuse to accept certain transfers of the relevant shares.
Shareholders, either alone or with other shareholders, have other rights as set out in the Company's articles of association and in company law. (Principally, the Companies Act 2006).
A member may choose whether his or her shares are evidenced by share certificates (certificated shares) or held in electronic (uncertificated) form in CREST (the UK electronic settlement system). Any member may transfer all or any of his or her shares, subject in the case of certificated shares to the rules set out in the Company's articles of association or in the case of uncertificated shares to the regulations governing the operation of CREST (which allow the Directors to refuse to register a transfer as therein set out); the transferor remains the holder of the shares until the name of the transferee is entered in the register of members. The Directors may refuse to register a share transfer if it is in respect of a certificated share which is not fully paid up or on which the Company has a lien provided that, where the share transfer is in respect of any share admitted to the Official List maintained by the UK Listing Authority, any such discretion may not be exercised so as to prevent dealings taking place on an open and proper basis, or if in the opinion of the Directors (and with the concurrence of the UK Listing Authority) exceptional circumstances so warrant, provided that the exercise of such power will not disturb the market in those shares. Whilst there are no squeeze-out and sell out rules relating to the shares in the Company's articles of association, shareholders are subject to the compulsory acquisition provisions in S974 to S991 of the Companies Act 2006.
Amendment of Articles of Association
The Company's articles of association may be amended by the members of the Company by special resolution (requiring a majority of at least 75% of the persons voting on the relevant resolution).
Appointment and Replacement of Directors
A person may be appointed as a Director of the Company by the shareholders in general meeting by ordinary resolution (requiring a simple majority of the persons voting on the relevant resolution) or by the Directors. No person, other than a Director retiring by rotation or otherwise, shall be appointed or re-appointed a Director at any general meeting unless he is recommended by the Directors or, not less than seven nor more than 42 clear days before the date appointed for the meeting, notice is given to the Company of the intention to propose that person for appointment or re-appointment in the form and manner set out in the Company's articles of association.
Each Director who is appointed by the Directors (and who has not been elected as a Director of the Company by the members at a general meeting held in the interval since his appointment as a Director of the Company) is to be subject to election as a Director of the Company by the members at the first Annual General Meeting of the Company following his or her appointment. At each Annual General Meeting of the Company one third of the Directors for the time being, or if their number is not three or an integral multiple of three the number nearest to but not exceeding one-third, are to be subject to re-election.
The Companies Act allows shareholders in general meeting by ordinary resolution (requiring a simple majority of the persons voting on the relevant resolution) to remove any Director before the expiring of his or her period of office, but without prejudice to any claim for damages which the Director may have for breach of any contract of service between him or her and the Company.
A person also ceases to be a Director if he or she resigns in writing, ceases to be a Director by virtue of any provision of the Companies Act, becomes prohibited by law from being a Director, becomes bankrupt or is the subject of a relevant insolvency procedure, or becomes of unsound mind, or if the Board so decides following at least six months' absence without leave or if he or she becomes subject to relevant procedures under the mental health laws, as set out in the Company's articles of association.
Powers of the Directors
Subject to the provisions of the Companies Act, the memorandum and articles of association of the Company and any directions given by shareholders by special resolution, the articles of association specify that the business of the Company is to be managed by the Directors, who may exercise all the powers of the Company, whether relating to the management of the business or not. In particular, the Directors may exercise on behalf of the Company its powers to purchase its own shares to the extent permitted by shareholders.
Directors Responsibilities
The Directors confirm that:
-- so far as each of the Directors is aware there is no relevant audit information of which the Company's auditor is unaware; and
-- the Directors have taken all steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.
Auditor
Grant Thornton UK LLP resigned as the company's auditor during the year following the conclusion of a formal tender process led by the Company's audit committee. The directors appointed BDO LLP to fill the casual vacancy. BDO LLP will offer themselves for appointment as auditor in accordance with S489(4) of the Companies Act 2006. A resolution to appoint BDO LLP as auditor and to authorise the Directors to fix their remuneration will be proposed at the forthcoming annual General Meeting.
On behalf of the Board.
Jane Owen
Director
17 May 2018
Directors' Responsibility Statement
The Directors are responsible for preparing the Strategic Report, the Directors' Report, the Directors' Remuneration Report and the Financial Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each financial year. Under that law the Directors have elected to prepare the Financial Statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the Company for that year. In preparing these Financial Statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently; -- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable IFRS have been followed, subject to any material departures disclosed and explained in the Financial Statements; and
-- prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements and the Remuneration report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for preparing the Annual Report in accordance with applicable law and regulations. The Directors consider the Annual Report and the Financial Statements, taken as a whole, provide the information necessary to assess the Company's position, performance, business model and strategy and are fair, balanced and understandable.
The Company's Financial Statements are published on the TPIM website, www.triplepoint.co.uk. The maintenance and integrity of this website is the responsibility of TPIM and not of the Company. Legislation in the United Kingdom governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.
To the best of our knowledge:
-- The Financial Statements, prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
-- The Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.
On behalf of the Board.
Jane Owen
Chairman
17 May 2018
Corporate Governance
This Corporate Governance Report forms part of the Directors' Report on pages 22-25.
The Financial Conduct Authority requires all listed companies to disclose how they have applied the principles and complied with the provisions of the UK Corporate Governance Code (the 'Code') issued by the Financial Reporting Council (FRC) in 2016.
The Board of Triple Point VCT 2011 plc has considered the principles and recommendations of the Association of Investment Companies Code of Corporate Governance (AIC Code 2016) by reference to the Association of Investment Companies Corporate Governance Guide for Investment Companies (AIC Guide). The AIC Code 2016, as explained by the AIC Guide, addresses all the principles set out in the UK Corporate Governance Code (April 2016), 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 2016, by reference to the AIC Guide, which incorporates the UK Corporate Governance Code (April 2016), will provide improved reporting to shareholders. The Company has complied with the recommendations of the AIC Code and the relevant provisions of the code, except as set out on page 31 under the heading Compliance Statement.
The Company is committed to maintaining high standards in corporate governance and has complied with the recommendations of the AIC Code 2016 and the relevant provisions of the UK Corporate Governance Code (April 2016), except as set out at the end of this report in the Compliance Statement.
Board of Directors
The Company has a Board of three Non-Executive Directors. Since all Directors are Non-Executive and day-to-day management responsibilities are sub-contracted to the Investment Manager, the Company does not have a Chief Executive Officer. The Directors have a range of business and financial skills which are relevant to the Company; these are described on page 22 of this report. Directors are provided with key information on the Company's activities, including regulatory and statutory requirements, by the Investment Manager. The Board has direct access to company secretarial advice and compliance services provided by the Investment Manager which is responsible for ensuring that Board procedures are followed and applicable regulations complied with. All Directors are able to take independent professional advice in furtherance of their duties.
Any appointment of new Directors to the Board is conducted, and appointments made, on merit and with due regard for the benefits of diversity on the Board, including gender. All Directors are able to allocate sufficient time to the Company to discharge their responsibilities.
The Board meets regularly on a quarterly basis, and on other occasions as required, to review the investment performance and monitor compliance with the investment policy laid down by the Board. There is a formal schedule of matters reserved for Board decision and the agreement between the Company and the Manager has authority limits beyond which Board approval must be sought.
The Investment Manager has authority over the management of the investment portfolio, the organisation of custodial services, accounting, secretarial and administrative services. In practice the Investment Manager makes investment recommendations for the Board's approval. In addition all investment decisions involving other VCTs managed by the Investment Manager are taken by the Board rather than the Investment Manager. Other matters reserved for the Board include:
-- The consideration and approval of future developments or changes to the investment policy, including risk and asset allocation;
-- consideration of corporate strategy; -- approval of any dividend or return of capital to be paid to the shareholders; -- the appointment, evaluation, removal and remuneration of the Investment Manager; -- the performance of the Company, including monitoring the net asset value per share; and -- monitoring shareholder profiles and considering shareholder communications.
The Chairman leads the Board in the determination of its strategy and in the achievement of its objectives. The Chairman is responsible for organising the business of the Board, ensuring its effectiveness and setting its agenda and has no involvement in the day to day business of the Company. She facilitates the effective contribution of the Directors and ensures that they receive accurate, timely and clear information and that they communicate effectively with shareholders. The Chairman does not have significant commitments conflicting with her obligations to the Company.
The Company Secretary is responsible for advising the Board on all governance matters. All of the Directors have access to the advice and services of the Company Secretary which has administrative responsibility for the meetings of the Board and its committees. Directors may also take independent professional advice at the Company's expense where necessary in the performance of their duties. As all of the Directors are Non-Executive, it is not considered appropriate to identify a member of the Board as the senior Non-Executive Director of the Company.
The Company's articles of association and the schedule of matters reserved to the Board for decision provide that the appointment and removal of the Company Secretary is a matter for the full Board.
The Company's articles of association require that one third of the Directors should retire by rotation each year and seek re-election at the Annual General Meeting and that Directors newly appointed by the Board should seek re-appointment at the next Annual General Meeting. The Board complies with the requirement of the UK Corporate Governance Code (April 2016) that all Directors are required to submit themselves for re-election at least every three years.
During the period covered by these Financial Statements the following meetings were held:
Directors present 4 Full Board 2 Audit Committee
Meetings Meetings
Jane Owen, Chairman 4 2
Chad Murrin 4 2
Tim Clarke 4 2
Audit Committee
The Board has appointed an audit committee of which Jane Owen is Chairman, which deals with matters relating to audit, financial reporting and internal control systems. The Committee meets as required and has direct access to BDO 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. BDO LLP do not provide any non-audit services to the company.
When considering whether to recommend the reappointment of the external auditor the audit committee takes into account their current fee tender compared to the external audit fees paid by other similar companies. The audit committee will then recommend to the Board the appointment of an external auditor which is ratified at the Annual General Meeting.
The FRC's Ethical Standard requires the audit partner to rotate every five years. During the year an audit tender process was undertaken. This resulted in the resignation of Grant Thornton UK LLP and the directors appointing BDO LLP to fill the casual vacancy.
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 (April 2016) as to relevant financial experience.
The Company does not have an independent internal audit function as it is not deemed appropriate given the size of the Company and the nature of the Company's business. However, the committee considers annually whether there is a need for such a function and, if there were, would recommend it be established.
In respect of the year ended 28 February 2018, the audit committee discharged its responsibilities by:
-- conducting a formal audit tender process and making a recommendation to the board in relation to the removal of Grant Thornton UK LLP and the appointment and approval of remuneration and terms of engagement of BDO LLP;
-- reviewing the external auditor's plan for the audit of the Financial Statements, including identification of key risks and confirmation of auditor independence;
-- reviewing TPIM's statement of internal controls operated in relation to the Company's business and assessing those controls in minimising the impact of key risks;
-- reviewing periodic reports on the effectiveness of TPIM's compliance procedures; -- reviewing the appropriateness of the Company's accounting policies;
-- reviewing the Company's half-yearly results and draft annual Financial Statements prior to Board approval;
-- reviewing the external auditor's audit plan document to the audit committee on the annual Financial Statements; and
-- reviewing the Company's going concern status.
The audit committee is responsible for considering and reporting on any significant issues that arise in relation to the Financial Statements.
The key areas of risk that have been identified and considered by the audit committee in relation to the business activities and the Financial Statements of the Company are as follows:
-- valuation and existence of unquoted investments; and
-- compliance with HM Revenue & Customs conditions for maintenance of approved Venture Capital Trust status.
The audit committee relies on the Investment Manager to assess the valuation of unquoted investments and the existence of those investments. The Investment Manager has a director on the board of all the investee companies and meets regularly with the other directors and hence has an oversight of all the investments made. The audit committee have reviewed the valuations and discussed them with both the Investment Manager and the external auditor to confirm their assessment of the valuation of the unquoted investments and the existence of those investments.
The Investment Manager has confirmed to the audit committee that the conditions for maintaining the Company's status as an approved Venture Capital Trust had been complied with throughout the year. The position has been reviewed by Philip Hare & Associates LLP in its capacity as adviser to the Company on taxation matters.
The audit committee has considered the whole Report and Accounts for the year ended 28 February 2018 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 Investment Manager's procedures are subject to internal compliance checks.
Capital management is monitored and controlled by the Investment Manager. 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.
Going Concern
After making the necessary enquiries, the Directors confirm that they are satisfied that the Company has adequate resources to continue in business for at least the next 12 months. The Board receives regular reports from the Manager and the Directors believe that, as no material uncertainties leading to significant doubt about going concern
have been identified, it is appropriate to continue to apply the going concern basis in preparing the Financial Statements.
Relations with Shareholders
The Board recognises the value of maintaining regular communications with shareholders. In addition to the formal business of the Annual General Meeting, an opportunity is given to all shareholders to question the Board and the Investment Manager on matters relating to the Company's operation and performance. The Board and the Investment Manager will also respond to any written queries made by shareholders during the course of the year and both can be contacted at 18 St Swithin's Lane, London, EC4N 8AD or on 020 7201 8989.
Compliance Statement
The Listing Rules require the Board to report on compliance with the UK Corporate Governance Code (April 2016) 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 (April 2016).
1. New Directors do not receive a full, formal and tailored induction on joining the Board. Such matters are addressed on an individual basis as they arise (B.4.1).
2. Due to the size of the Board and the nature of the Company's business, a formal performance evaluation of the Board, its committees, the individual Directors and the Chairman has not been undertaken. Specific performance issues are dealt with as they arise (B.6.1, B.6.3).
3. The Company does not have a senior independent director. The Board does not consider such an appointment appropriate for the Company (A.4.1).
4. The Company conducts a formal review as to whether there is a need for an internal audit function. The Directors do not consider that an internal audit would be an appropriate control for a Venture Capital Trust (C.3.6).
5. As all the Directors are Non-Executive, it is not considered appropriate to appoint a Nomination or Remuneration Committee (B.2.1 and D.2.1).
6. The Audit committee includes three Non-Executive Directors, all of whom are considered independent. Jane Owen who is chairman is also chairman of the audit committee but it is not considered appropriate to appoint another independent Director. The Board regularly reviews the independence of its Directors (C.3.1).
On behalf of the Board.
Jane Owen
Chairman
17 May 2018
Directors' Remuneration Report
Introduction
This report is submitted in accordance with schedule 8 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulations 2008, in respect of the year ended 28 February 2018. 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 April 2016). The reporting requirements require two sections to be included, a Policy Report and an Annual Remuneration Report which are presented below.
Directors' Remuneration Policy Report
This statement of the Directors' Remuneration Policy took effect following approval by shareholders at the Annual General Meeting on 13 July 2017. 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 are eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits in respect of their services as Non-Executive Directors of the Company.
The articles of association provide that Directors shall retire and be subject to re-election at the first Annual General Meeting after their appointment and that any Director who has not been re-elected for three years shall retire and be subject to re-election at the Annual General Meeting. Also any Director not considered independent shall retire each year and offer himself for re-election at the Annual General Meeting. The Directors' service contracts provide for an appointment of 12 months, after which three months written notice must be given by either party. A Director who ceases to hold office is not entitled to receive any payment other than accrued fees (if any) for past services. The same policies will apply if a new Director is appointed.
Details of each Director's contract is shown below. The Chairman is paid more than the other Directors to reflect the additional responsibilities of that role. There are no other fees payable to the Directors for additional services outside of their contracts.
Annual rate Policy on
Date Unexpired of Directors' payment for
of Contract term of contract fees loss of office
GBP
Jane Owen,
Chairman 23-Sep-10 none 17,500 none
Chad Murrin 23-Sep-10 none 15,000 none
Tim Clarke 05-May-11 none 15,000 none
Annual Remuneration Report
The remuneration policy described above was approved on 13 July 2017 at the Annual General Meeting and will remain unchanged for another three year period. The Board will review the remuneration of the Directors in line with the VCT industry on an annual basis, if thought appropriate. Otherwise, only a change in role is likely to incur a change in remuneration of any one Director.
Directors' Remuneration (audited information)
The fees paid to Directors in respect of the year ended 28 February 2018 and the prior year are shown below:
Emoluments Emoluments
for the for the
Year ended year ended
28 February 28 February
2018 2017
GBP GBP
Jane Owen,
Chairman 17,500 17,269
Chad Murrin 15,000 14,769
Tim Clarke 15,000 14,769
47,500 46,807
Employers'
NI contributions 175 101
Total Emoluments 47,675 46,908
-------------------- ------------- -------------
None of the Directors are eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits in respect of their services as Non-Executive Directors of the Company.
Information required on executive Directors, including the Chief Executive Officer and employees has been omitted because the Company has neither and therefore it is not relevant.
Directors' emoluments compared to payments to shareholders:
28 February 28 February
Unaudited 2018 2017
GBP'000 GBP'000
Total Dividends
paid 2,495 4,884
Total Directors'
emoluments 48 47
Directors' Share Interests (audited information)
At the 28 February 2018 Jane Owen held no Ordinary Shares, 24,624 A Ordinary Shares and 24,378 B Ordinary Shares (2017: 25,375 Ordinary Shares; 24,624 A Ordinary Shares; B Shares 24,378) and Tim Clarke held no Ordinary Shares and 24,624 B Shares (2017: 15,300 Ordinary Shares; B Shares 24,624) and Chad Murrin held 24,874 A Ordinary Shares and 24,624 B Ordinary Shares (2017: 24,874 A Ordinary Shares; B Shares 24,624). At 28 February 2018 Jane Owen's husband held no Ordinary Shares (2017: 25,375). No other connected parties to the Directors held any shares at 28 February 2018 (2017: nil). Any shares owned by the Directors were purchased at the same price offered to investors. There are no requirements or restrictions on Directors holding shares in the Company.
Statement of Voting at the Annual General Meeting
The 2017 Remuneration Report was presented to the Annual General Meeting in July 2017 and received shareholder approval following a vote 99% in favour and none abstained.
The 2017 Remuneration Policy was presented to the Annual General Meeting in July 2017 and received shareholder approval following a vote 99% in favour and none abstained.
Statement of the Chairman
The Directors' fees were GBP17,500 per annum for the Chairman and GBP15,000 per annum for other Directors from 5 April 2016. The remuneration of the Directors reflects the experience of the Board as a whole, is fair and comparable with that of other relevant Venture Capital Trusts that are similar in size and have similar investment objectives and structures.
On behalf of the Board.
Jane Owen
Chairman
17 May 2018
Statement of Comprehensive Income
For the year ended 28 February 2018
Year ended Year ended
28 February 2018 28 February 2017
---------------------------- ----------------------------
Note Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 4 715 - 715 1,437 - 1,437
Loss arising on
the realisation
of investments
during the period 10/11 - (17) (17) - (429) (429)
Gain/(loss) arising
on the revaluation
of investments
at the period
end 10 - 264 264 - (18) (18)
Investment return 715 247 962 1,437 (447) 990
-------- -------- -------- -------- -------- --------
Investment management
fees 5 24 8 32 285 94 379
Financial and
regulatory costs 26 - 26 28 - 28
General administration 42 (19) 23 49 70 119
Legal and professional
fees 6 38 (2) 36 69 - 69
Directors' remuneration 7 48 - 48 47 - 47
Operating expenses 178 (13) 165 478 164 642
-------- -------- -------- -------- -------- --------
Profit/(loss)
before taxation 537 260 797 959 (611) 348
Taxation 8 (102) (2) (104) (73) 72 (1)
Profit/(loss)
after taxation 435 258 693 886 (539) 347
-------- -------- -------- -------- -------- --------
Other comprehensive
income - - - - - -
-------- -------- -------- -------- -------- --------
Profit and total
comprehensive
income/(loss)
for the period 435 258 693 886 (539) 347
-------- -------- -------- -------- -------- --------
Basic & diluted earnings
per share (pence)
Ordinary Share 9 (0.04p) 0.01p (0.03p) 2.71p (2.65p) 0.06p
A Share 9 4.44p 2.39p 6.83p 3.61p (0.08p) 3.53p
B Share 9 (0.01p) 0.25p 0.24p (0.37p) 0.10p (0.27p)
The total column of this statement is the Statement of Comprehensive Income of the Company prepared in accordance with International Financial Reporting Standards (IFRS). The supplementary revenue return and capital columns have been prepared in accordance with the Association of Investment Companies Statement of Recommended Practice (AIC SORP) in so far as it does not conflict with IFRS.
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 on pages 51 to 64 form an integral part of these statements.
Balance Sheet
At 28 February 2018
Company No: 07324448
28 February 28 February
2018 2017
Note GBP'000 GBP'000
Non-current assets
Financial assets at
fair value through profit
or loss 10 16,554 16,593
------------ ------------
Current assets
Assets held for sale 11 - 191
Receivables 12 779 1,375
Cash and cash equivalents 13 353 1,525
1,132 3,091
------------ ------------
Total assets 17,686 19,684
------------ ------------
Current liabilities
Payables and accrued
expenses 14 120 215
Current taxation payable 103 1
223 216
------------ ------------
Net assets 17,463 19,468
============ ============
Equity attributable
to equity holders
Share capital 15 168 371
Share Premium 16,683 16,683
Share redemption reserve - 1
Special distributable
reserve - 255
Capital reserve 319 1,443
Revenue reserve 293 715
Total equity 17,463 19,468
============ ============
Shareholders' funds
Net asset value per
Ordinary Share 17 - 11.32p
Net asset value per
A Share 17 106.90p 104.07p
Net asset value per
B Share 17 100.00p 99.76p
The statements were approved by the Directors and authorised for issue on 17 May 2018 and are signed on their behalf by:
Jane Owen
Chairman
17 May 2018
The accompanying notes on pages 51 to 64 form an integral part of these statements.
Statement of Changes in Shareholders' Equity
For the year ended 28 February 2018
Share Special
Issued Share Redemption Distributable Capital Revenue
Capital Premium Reserve Reserve Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended
28 February
2018
Opening balance 371 16,683 1 255 1,443 715 19,468
--------- --------- ------------ --------------- --------- --------- --------
Issue of share
capital - - - - - - -
Cost of issue
of shares - - - - - - -
Purchase of
own shares - - - - - - -
Cancellation
of shares (203) - (1) - 1 - (203)
Dividends paid - - - (255) (1,383) (857) (2,495)
Transactions
with owners (203) - (1) (255) (1,382) (857) (2,698)
--------- --------- ------------ --------------- --------- --------- --------
(Loss)/profit
before taxation - - - - 260 537 797
Taxation - - - - (2) (102) (104)
(Loss)/profit
after taxation - - - - 258 435 693
Other comprehensive
income - - - - - - -
Total comprehensive
(loss)/profit
for the period - - - - 258 435 693
--------- --------- ------------ --------------- --------- --------- --------
Balance at
28 February
2018 168 16,683 - - 319 293 17,463
========= ========= ============ =============== ========= ========= ========
The Capital
Reserve consists
of:
Investment
holding gains 320
Other realised losses (1)
319
---------
Year ended
28 February
2017
Opening balance 303 9,927 1 4,900 1,982 68 17,181
--------- --------- ------------ --------------- --------- --------- --------
Issue of share
capital 68 6,904 - - - - 6,972
Cost of issue
of shares - (148) - - - - (148)
Dividend Paid - - - (4,645) - (239) (4,884)
Transactions
with owners 68 6,756 - (4,645) - (239) 1,940
--------- --------- ------------ --------------- --------- --------- --------
(Loss)/profit
after taxation - - - - (539) 886 347
Total comprehensive
(loss)/profit
for the period - - - - (539) 886 347
--------- --------- ------------ --------------- --------- --------- --------
Balance at
28 February
2017 371 16,683 1 255 1,443 715 19,468
========= ========= ============ =============== ========= ========= ========
The capital reserve represents the proportion of Investment Management fees charged against capital and realised/unrealised gains or losses on the disposal/revaluation of investments. The unrealised capital reserve is not distributable. The special distributable reserve was created on court cancellation of the share premium account. The revenue reserve, realised capital reserve and special distributable reserve are distributable by way of dividend.
At 28 February 2018 the total reserves available for distribution are GBP292,363. This consists of the distributable revenue reserve net of the realised capital loss.
Statement of Cash Flows
For the year ended 28 February 2018
Year ended Year ended
28 February
28 February 2018 2017
GBP'000 GBP'000
Cash flows from operating
activities
Profit before taxation 797 348
Loss arising on the disposal
of investments during
the period 17 429
(Gain)/loss arising on
the revaluation of investments
at the period end (264) 18
Cash generated by operations 550 795
Decrease/(increase) in
receivables 596 (424)
(Decrease)/increase in
payables (97) 93
Net cash flows from operating
activities 1,049 464
----------- ------------
Cash flows from investing
activities
Purchase of financial
assets at fair value through
profit or loss - (5,850)
Sales of financial assets
at fair value through
profit or loss 477 4,634
Net cash flows from investing
activities 477 (1,216)
----------- ------------
Cash flows from financing
activities
Issue of shares - 6,824
Distribution of proceeds
from share cancellation (203) -
Dividends paid (2,495) (4,884)
Net cash flows from financing
activities (2,698) 1,940
----------- ------------
Net (decrease)/increase
in cash and cash equivalents (1,172) 1,188
=========== ============
Reconciliation of net
cash flow to movements
in cash and cash equivalents
Cash and cash equivalents
at 1 March 2017 1,525 337
Net (decrease)/increase
in cash and cash equivalents (1,172) 1,188
Cash and cash equivalents
at 28 February 2018 353 1,525
=========== ============
The accompanying notes on pages 51 to 64 form an integral part of these statements.
Unaudited Non-Statutory Analysis of - The Ordinary Share Fund
Statement of
Comprehensive Year ended 28 February Year ended 28
Income 2018 February 2017
---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income (1) - (1) 685 - 685
Realised (loss)
on investments - (17) (17) - (429) (429)
Unrealised (loss)
on investments - - - - (74) (74)
Investment return (1) (17) (18) 685 (503) 182
Investment management
fees (2) 19 17 (80) (92) (172)
Other expenses (5) 4 (1) (66) - (66)
(Loss)/profit
before taxation (8) 6 (2) 539 (595) (56)
Taxation 2 (4) (2) 11 57 68
(Loss)/profit
after taxation (6) 2 (4) 550 (538) 12
Profit and total
comprehensive
(loss)/income
for the year (6) 2 (4) 550 (538) 12
Basic and diluted
(loss)/earnings
per share (0.04p) 0.01p (0.03p) 2.71p (2.65p) 0.06p
-------- -------- -------- -------- -------- --------
Balance Sheet 28 February 2018 28 February 2017
GBP'000 GBP'000
Non-current
assets
Financial assets
at fair value
through profit
or loss - 5
-------- --------
Current assets
Assets held
for sale - 191
Receivables - 674
Corporation
tax - 68
Cash and cash
equivalents - 1,448
- 2,381
-------- --------
Current liabilities
Payables - (82)
-------- --------
Net assets - 2,304
-------- --------
Equity attributable
to equity holders - 2,304
-------- --------
Net asset value
per share - 11.32p
-------- --------
Statement of
Changes in Shareholders'
Equity
28 February
28 February 2018 2017
GBP'000 GBP'000
Opening shareholders'
funds 2,304 7,176
Cancellation
of shares (203) -
(Loss)/profit
for the year (4) 12
Dividend paid (2,097) (4,884)
Closing shareholders'
funds - 2,304
-------- --------
Unaudited Non-Statutory Analysis of - The Ordinary Share Fund
Investment Portfolio 28 February 2018 28 February 2017
------------------------------------ ------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted qualifying
holdings - - - - 300 17.16 191 11.62
Non-Qualifying
holdings - - - - - - 5 0.30
Financial assets
at fair value through
profit or loss - - - - 300 17.16 196 11.92
Cash and cash equivalents - - - - 1,448 82.84 1,448 88.08
- - - - 1,748 100.00 1,644 100.00
=========== === ============= ==== ======== ======= ======== =======
Qualifying Holdings
Unquoted
Cinema Digitisation
DLN Digital Ltd - - - - 300 17.16 191 11.62
- - - - 300 17.16 191 11.62
=========== === ============= ==== ======== ======= ======== =======
Non-Qualifying
Holdings
Unquoted
Other
Broadpoint Ltd - - - - - - 5 0.30
- - - - - - 5 0.30
=========== === ============= ==== ======== ======= ======== =======
Unaudited Non-Statutory Analysis of - The A Share Fund
Statement of
Comprehensive Year ended 28 February Year ended 28
Income 2018 February 2017
---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 634 - 634 663 - 663
Unrealised gain
on investments - 240 240 - 30 30
Investment return 634 240 874 663 30 693
Investment management
fees (22) - (22) (163) (47) (210)
Other expenses (67) (2) (69) (52) - (52)
Profit/(loss)
before taxation 545 238 783 448 (17) 431
Taxation (104) - (104) (90) 10 (80)
Profit/(loss)
after taxation 441 238 679 358 (7) 351
Profit and total
comprehensive
income/(loss)
for the year 441 238 679 358 (7) 351
Basic and diluted
earnings/(loss)
per share 4.44p 2.39p 6.83p 3.61p (0.08p) 3.53p
-------- -------- -------- -------- -------- --------
Balance Sheet 28 February 2018 28 February 2017
GBP'000 GBP'000
Non-current assets
Financial assets
at fair value
through profit
or loss 9,744 9,802
-------- --------
Current assets
Receivables 764 678
Cash and cash
equivalents 274 29
1,038 707
-------- --------
Current liabilities
Payables (40) (73)
Corporation Tax (105) (80)
-------- --------
Net assets 10,637 10,356
-------- --------
Equity attributable
to equity holders 10,637 10,356
-------- --------
Net asset value
per share 106.90p 104.07p
-------- --------
Statement of
Changes in Shareholders'
Equity
28 February
28 February 2018 2017
GBP'000 GBP'000
Opening shareholders'
funds 10,356 10,005
Profit for the
year 679 351
Dividend paid (398) -
Closing shareholders'
funds 10,637 10,356
-------- --------
28 February 2018 28 February 2017
---------------------------------- ----------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted qualifying
holdings 6,323 64.86 6,577 65.65 6,323 64.51 6,335 64.44
Non-Qualifying holdings 3,151 32.33 3,167 31.61 3,449 35.18 3,467 35.27
Financial assets
at fair value through
profit or loss 9,474 97.19 9,744 97.26 9,772 99.69 9,802 99.71
Cash and cash equivalents 274 2.81 274 2.74 29 0.31 29 0.29
9,748 100.00 10,018 100.00 9,801 100.00 9,831 100.00
Qualifying Holdings
Unquoted
Hydro Electric Power
Green Highland Allt Choire A Bhalachain Ltd 30 0.31 30 0.30 30 0.31 29 0.29
Green Highland Allt
Garbh Ltd 2,250 23.08 2,250 22.46 2,250 22.96 2,250 22.89
Green Highland Allt
Ladaidh (1148) Ltd 1,470 15.08 1,802 17.99 1,470 15.00 1,470 14.95
Green Highland Allt
Luaidhe (228) Ltd 855 8.77 937 9.35 855 8.72 877 8.92
Green Highland Allt
Phocachain (1015)
Ltd 858 8.80 1,005 10.03 858 8.75 849 8.64
Green Highland Shenval
Ltd 860 8.82 553 5.52 860 8.77 860 8.75
6,323 64.86 6,577 65.65 6,323 64.51 6,335 64.44
28 February 2018 28 February 2017
Cost Valuation Cost Valuation
Non-Qualifying Holdings GBP'000 % GBP'000% GBP'000 % GBP'000%
Unquoted
Hydro Electric Power
Green Highland Allt Choire A Bhalachain Ltd 3 0.03 3 0.03 3 0.03 3 0.03
Green Highland Allt
Ladaidh (1148) Ltd 30 0.31 30 0.30 30 0.31 30 0.31
Green Highland Allt
Luaidhe (228) Ltd 61 0.63 61 0.61 61 0.62 61 0.62
Green Highland Allt
Phocachain (1015)
Ltd 2 0.02 3 0.03 3 0.03 3 0.03
Kinlochteacius Hydro
Ltd - - - - 47 0.48 47 0.48
SME Funding:
Hydro Electric Power
Broadpoint 2 Ltd 550 5.64 550 5.49 800 8.16 800 8.14
Broadpoint 3 Ltd 1,005 10.31 1,005 10.03 1,005 10.25 1,005 10.22
Other
Funding Path Ltd 1,000 10.26 1,000 9.98 1,000 10.20 1,010 10.27
Modern Power Generation
Ltd 500 5.13 515 5.14 500 5.10 508 5.17
3,151 32.33 3,167 31.61 3,449 35.18 3,467 35.27
Unaudited Non-Statutory Analysis of - The B Share Fund
Statement of
Comprehensive Year ended 28
Income Year ended 28 February 2018 February 2017
---------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 82 - 82 89 - 89
Unrealised gain
on investments - 24 24 - 26 26
Investment return 82 24 106 89 26 115
Investment management
fees (38) (8) (46) (87) (25) (112)
Other expenses (44) - (44) (30) - (30)
(Loss)/profit
before taxation - 16 16 (28) 1 (27)
Taxation - 2 2 6 5 11
(Loss)/profit
after taxation - 18 18 (22) 6 (16)
Loss and total
comprehensive
(loss)/income
for the year - 18 18 (22) 6 (16)
Basic and diluted
(loss)/earnings
per share (0.01p) 0.25p 0.24p (0.37p) 0.10p (0.27p)
---------- ---------
Unaudited Audited
Balance Sheet 28 February 2018 28 February 2017
GBP'000 GBP'000
Non-current
assets
Financial assets
at fair value
through profit
or loss 6,810 6,786
Current assets
Receivables 15 23
Corporation
Tax 2 11
Cash and cash
equivalents 79 48
96 82
Current liabilities
Payables (80) (60)
Net assets 6,826 6,808
Equity attributable
to equity holders 6,826 6,808
Net asset value
per share 100.00p 99.76p
Statement of
Changes in Shareholders'
Equity
Unaudited Audited
28 February 2018 28 February 2017
GBP'000 GBP'000
Opening shareholders'
funds 6,808 -
Issue of new
shares - 6,824
Loss for the
year 18 (16)
Closing shareholders'
funds 6,826 6,808
Investment Portfolio
28 February 2018 28 February 2017
---------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted qualifying holdings 5,100 74.57 5,100 74.03 5,100 74.91 5,100 74.62
Non-Qualifying holdings 1,660 24.27 1,710 24.82 1,660 24.38 1,686 24.67
Financial assets at fair value through profit
or loss 6,760 98.84 6,810 98.85 6,760 99.29 6,786 99.29
Cash and cash equivalents 79 1.16 79 1.15 48 0.71 48 0.71
6,839 100.00 6,889 100.00 6,808 100.00 6,834 100.00
Qualifying Holdings
Unquoted
Gas Power
Distributed Generators Ltd 3,200 46.79 3,200 46.45 3,200 47.00 3,200 46.82
Green Peak Generation Ltd 1,900 27.78 1,900 27.58 1,900 27.91 1,900 27.80
5,100 74.57 5,100 74.03 5,100 74.91 5,100 74.62
28 February 2018 28 February 2017
Cost Valuation Cost Valuation
Non-Qualifying Holdings GBP'000 % GBP'000% GBP'000 % GBP'000%
Unquoted
SME Funding
Other
Modern Power Generation Ltd 1,660 24.27 1,710 24.82 1,660 24.38 1,686 24.67
1,660 24.27 1,710 24.82 1,660 24.38 1,686 24.67
Notes to the Financial Statements
1. Corporate Information
The Financial Statements of the Company for the year ended 28 February 2018 were authorised for issue in accordance with a resolution of the Directors on 17 May 2018.
The Company applied for listing on the London Stock Exchange on 24 December 2010.
Triple Point VCT 2011 plc is incorporated and domiciled in Great Britain and registered in England and Wales. The address of the Company's registered office, which is also its principal place of business, is 18 St Swithin's Lane, London, EC4N 8AD.
The Company is required to nominate a functional currency, being the currency in which the Company predominately operates. The functional and reporting currency is pounds sterling (GBP), reflecting the primary economic environment in which the Company operates.
The principal activity of the Company is investment. The Company's investment strategy is to offer combined exposure to cash or cash based funds and venture capital investments focused on companies with contractual revenues from financially secure counterparties.
2. Basis of Preparation and Accounting Policies
Basis of Preparation
After making the necessary enquiries, the Directors confirm that they are satisfied that the Company has adequate resources to continue in business for the foreseeable future. The Board receives regular reports from the Investment Manager and the Directors believe that, as no material uncertainties leading to significant doubt about going concern have been identified, it is appropriate to continue to apply the going concern basis in preparing the Financial Statements.
The Financial Statements of the Company for the year to 28 February 2018 have been prepared in accordance with International Financial Reporting Standards ("IFRS") adopted for use in the European Union and comply with the Statement of Recommended Practice: "Financial Statements of Investment Trust Companies and Venture Capital Trusts" (SORP) issued by the Association of Investment Companies (AIC) in November 2014 and updated in January 2017, in so far as this does not conflict with IFRS.
The Financial Statements are prepared on a historical cost basis except that investments are shown at fair value through profit or loss.
The preparation of Financial Statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these judgements.
The judgements, 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; and
-- the recognition or otherwise of accrued income on loan notes and similar instruments granted to investee companies, which are assessed in conjunction with the overall valuation of unlisted financial investments as noted above.
The key judgements made by Directors are in the valuation of non-current assets and the assessment of realised losses. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects that period or in the period of revision and future periods if the revision affects both current and future periods. The carrying value of investments is disclosed in note 10.
The Directors do not believe that there are any further key judgements made in applying accounting policies or estimates in respect of the Financial Statements.
These Financial Statements have been prepared in accordance with the accounting policies set out below which are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU).
These accounting policies have been applied consistently in preparing these Financial Statements.
Standards issued but not yet effective
The following new standards are not yet effective for the year ended 28 February 2018, and have not been applied in preparing these Financial Statements.
-- IFRS 9 Financial Instruments (1 January 2018)
-- IFRS 15 Revenue from contracts with customers (1 January 2018)
-- IFRS 16 Leases (1 January 2019)
The Directors have assessed the impact and are of the opinion that these standards will not have a material effect on the Financial Statements because investments will continue to be measured at fair value through profit and loss and there will be no material impact from the new impairment model.
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.
The Company has no external debt; consequently all capital is represented by the value of share capital, distributable and other reserves. Total shareholder equity at 28 February 2018 was GBP17.46 million (2017: GBP19.47 million).
Non-Current Asset Investments
The Company invests in financial assets with a view to profiting from their total return through income and capital growth. These investments are managed and their performance is evaluated on a fair value basis in accordance with the investment policy detailed in the Strategic Report on page 4 and information about the portfolio is provided internally on that basis to the Company's Board of Directors. Accordingly upon initial recognition the investments are designated by the Company as "at fair value through profit or loss" in accordance with IAS39 "Financial instruments recognition and measurement". They are included initially at fair value, which is taken to be their cost (excluding expenses incidental to the acquisition which are written off in the Statement of Comprehensive Income and allocated to "capital" at the time of acquisition). Subsequently the investments are valued at "fair value" which is the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. This is measured as follows:
-- unlisted investments are fair valued by the Directors in accordance with the International Private Equity and Venture Capital Valuation Guidelines. Fair value is established by using measurements of value such as price of recent transactions, discounted cash flows, cost, and initial cost of investment; and
-- 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.
The Company has taken the exemption permitted by IAS 28 "Investments in Associates and Joint Ventures" and, upon initial recognition, will measure its investments in Associates at fair value with subsequent changes to fair value recognised in the income statement in the period of change.
Income
Investment income includes interest earned on bank balances and investment loans and includes income tax withheld at source. Dividend income is shown net of any related tax credit and is brought into account on the ex-dividend date.
Fixed returns on investment loans and debt are recognised on a time apportionment basis so as to reflect the effective yield, provided there is no reasonable doubt that payment will be received in due course.
Expenses
All expenses are accounted for on the accruals basis. Expenses are charged to revenue with the exception of the investment management exit fee which has been charged to the capital account and the investment management fee which has been charged 75% to the revenue account and 25% to the capital account to reflect, in the Directors' opinion, the expected long term split of returns in the form of income and capital gains respectively from the investment portfolio.
The Company's general expenses are split between the Share Classes using the net asset value of each Share Class divided by the total net asset value of the Company.
Taxation
Corporation tax payable is applied to profits chargeable to corporation tax, if any, at the current rate in accordance with IAS 12 "Income Taxes". The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue on the "marginal" basis as recommended by the AIC SORP 2014.
In accordance with IAS 12, deferred tax is recognised using the balance sheet method providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. The Directors have considered the requirements of IAS 12 and do not believe that any provision should be made.
Financial Instruments
The Company's principal financial assets are its investments and the accounting policies in relation to those assets are set out above. Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities. Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.
Issued Share Capital
A Shares and B Shares are classified as equity because they do not contain an obligation to transfer cash or another financial asset. Issue costs associated with the allotment of shares have been deducted from the share premium account in accordance with IAS 32.
Cash and Cash Equivalents
Cash and cash equivalents representing cash available at less than 3 months' notice are classified as loans and receivables under IAS 39.
Reserves
The revenue reserve (retained earnings) and capital reserve reflect the guidance in the AIC SORP 2014. The capital reserve represents the proportion of Investment Management fees charged against capital and realised/unrealised gains or losses on the disposal/revaluation of investments. The unrealised capital reserve is not distributable. The special distributable reserve was created on court cancellation of the share premium account. The revenue reserve, realised capital reserve and special distributable reserve are distributable by way of dividend.
3. Segmental Reporting
The Directors are of the opinion that the Company only has a single operating segment of business, being investment activity. All revenues and assets are generated and held in the UK.
4. Investment Income
Year ended 28 February 2018 Year ended 28 February 2017
Ord Shares A Shares B Shares Total Ord Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loan interest (4) 634 82 712 52 663 89 804
Other investment income 3 - - 3 - - - -
Dividends received - - - - 633 - - 633
(1) 634 82 715 685 663 89 1,437
Disclosure by share class is unaudited.
5. Investment Management Fees
TPIM provides investment management and administration services to the Company under an Investment Management Agreement effective 23 September 2010 and a deed of variation to that agreement effective 23 December 2015.
A Shares: The agreement provides for an investment management fee of 2.00% per annum of net assets payable quarterly in arrear for A Shares. For A Shares the appointment shall continue for a period of at least 6 years from the admission of those shares.
B Shares: The agreement provides for an investment management fee of 1.90% per annum of net assets payable quarterly in arrear for B Shares. For B Shares the appointment shall continue for a period of at least 6 years from the admission of those shares.
An administration fee of GBP37,500 per annum is payable quarterly in arrear.
Year ended 28 February 2018 Year ended 28 February 2017
Ord Shares A Shares B Shares Total Ord Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment Management Fees - - 32 32 90 189 100 379
TPIM agreed not to charge their management fees for the A share class for the financial year ending 28 February 2018, to build up distributable reserves improving the ability of the share class to make dividend payments.
TPIM agreed not to charge their management fees from 1 January 2017 on the amounts invested in gas power projects, which represents circa 75% of the B Share Class NAV, until these investments started to generate income.
The total amount waived for both share classes was GBP303,300 which subject to available distributable reserves and the agreement of the Board maybe recoverable in future periods.
Fees paid to the Investment Manager for administrative and other services during the year was GBP19,000 (2017: GBP115,000). The investment Manager also received fees of GBP67,000 (2017: GBP290,000) for services provided to investee companies.
6. Legal and Professional Fees
Legal and professional fees include remuneration paid to the Company's auditor, BDO LLP (2017 fees payable to Grant Thornton LLP) as shown in the following table:
Year ended 28 February 2018 Year ended 28 February 2017
Ord Shares A Shares B Shares Total Ord Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fees payable to the Company's auditor:
for the audit of the Financial
Statements 1 10 7 18 5 8 4 17
1 10 7 18 5 8 4 17
Disclosure by share class is unaudited.
7. Directors' Remuneration
Year ended 28 February 2018 Year ended 28 February 2017
Ord Shares A Shares B Shares Total Ord Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Jane Owen 1 11 6 18 4 8 5 17
Chad Murrin 1 9 5 15 4 7 4 15
Tim Clarke - 8 7 15 4 7 4 15
2 28 18 48 12 22 13 47
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 28 February 2018 Year ended 28 February 2017
Ord Shares A Shares B Shares Total Ord Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
(Loss)/profit on ordinary
activities before tax (2) 783 16 797 (55) 431 (27) 348
Corporation tax @ 19%/(20%) - 152 3 155 (11) 86 (5) 70
Effect of:
Utilisation of tax losses
brought forward - - - - (38) - - (38)
Capital losses/(gains) not
taxable 3 (46) (4) (47) 100 (6) (6) 88
Dividends received not taxable - - - - (126) - - (126)
Disallowed expenditure (1) - - (1) 7 - - 7
Tax (charge)/credit for the
period 2 104 (2) 104 (68) 80 (11) 1
Capital gains and losses are exempt from corporation tax due to the Company's status as a Venture Capital Trust.
9. Earnings per Share
On the 16 January 2018, the Ordinary Shares were cancelled. During the period to cancellation the loss per O Share was 0.03p (2017: earnings 0.06p) and was based on a loss from ordinary activities after tax of GBP4,714 (2017: profit GBP12,675) and on the weighted average number of Ordinary shares in issue during the period 17,896,734 (2017: 20,349,869).
The earnings per A Share is 6.83p and is based on a profit from ordinary activities after tax of GBP679,845 (2017: GBP350,664) and on the weighted average number of A Shares in issue during the period of 9,951,133 (2017: 9,951,133).
The earnings per B Share is 0.24p (2017: 0.27p), and is based on a profit from ordinary activities after tax of GBP16,275 (2017: 16,246) and on the weighted average number of B Shares in issue during the period of 6,824,266 (2017: 6,109,517).
Other than the cancellation of the Ordinary shares, there were no other share issues or disposals.
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.
The portfolio of the Company is classified as level 3 and further details of the types of investments are provided in the Investment Manager's Review and Investment Portfolio on pages 11 and 15.
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
Significant unobservable unobservable inputs and fair value
Sector Valuation Techniques inputs measurement
Estimated fair value would
increase/(decrease) if:
Hydroelectric
Power * Discounted cash flows: The valuation model considers * Discount rate 7.25% * The discount rate was lower/(higher)
the present value of expected payment, discounted
using a risk-adjusted discount rate.
(2017: 10.00%)
* Inflation rate 2.5%
* The inflation rate was higher/(lower)
(2017: 2.0%)
The Board considers the discount rates used reflect the current levels of risk and life expectancy of the investments and to be in line with Market expectations. However, 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.
On this basis, where discount rates have been applied to the unquoted investments, alternative discount rates have been considered, an upside case and a downside case. For the upside case, the assumptions were flexed 1% and for the downside scenarios the assumptions were flexed by 0.5%. No sensitivity has been performed on other key assumptions such as asset life, P50 and power price forecasts because the directors do not believe there are reasonable alternative assumptions.
The two alternative scenarios for each investment have been modelled with the resulting movements as follows:
Applying the downside alternative, the aggregate change in value of the unquoted investments would be a reduction in the value of the portfolio of GBP163,058 or 1% per cent.
Using the upside alternative the aggregate value of the unquoted investments would be an increase of GBP360,646 or 2.18% per cent.
It is considered that, due to the prudent selection of discount rates by the board, the sensitivity discussed above provides the most meaningful potential impact of the possible changes across the portfolio.
Movements in investments held at fair value through the profit or loss during the year to 28 February 2018 were as follows:
Year ended 28 February 2018 Year ended 28 February 2017
Ord Shares A Shares B Shares Total Ord Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening Cost - 9,772 6,760 16,532 5,494 9,466 - 14,960
Opening unrealised gains 5 30 26 61 256 - - 256
Opening fair value at 1 March
2017 5 9,802 6,786 16,593 5,750 9,466 - 15,216
Purchases at cost - - - - - - 5,850 5,850
Disposal proceeds (2) (298) - (300) (2,195) (1,120) (490) (3,805)
Transfers between share
classes - - - - (2,826) 1,426 1,400 -
Realised loss on disposal (3) - - (3) (459) - - (459)
Investment holding gains - 240 24 264 (124) 30 26 (68)
Reclassification as assets
held for sale - - - - (141) - - (141)
Closing fair value at 28
February 2018 - 9,744 6,810 16,554 5 9,802 6,786 16,593
Closing cost - 9,474 6,760 16,234 - 9,772 6,760 16,532
Closing investment holding
gains - 270 50 320 5 30 26 61
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.
Further details of the types of investments are provided in the Investment Manager's review and investment portfolio on pages 11-20, and details of entities over which the VCT has significant influence are included on page 21.
Material disposals during the year
During the year a non-qualifying investment repaid part of its loan of GBP250,000.
Deferred consideration for the sale of a portfolio of solar assets, which were disposed of in the prior year was realised and GBP25,000 was written off as it was deemed irrecoverable.
Disclosure by share class is unaudited.
11. Assets Held for Sale
Assets held for Sale are measured at fair value through profit or loss at the discounted price expected to be achieved through the sale after the year end and are classified as Level 3 Unquoted Investments.
Disposal of assets held for sale during the year
Investee Company Cost Opening Valuation Disposal Realised Gain
GBP'000 GBP'000 GBP'000 GBP'000
DLN Digital Equity - 191 (199) 8
- 191 (199) 8
There were no income or expenses for the year relating to these disposals.
The investment was disposed of on 26 July 2017.
12. Receivables
28 February 2018 28 February 2017
Ord Shares A Shares B Shares Total Ord Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Accrued income - 101 13 114 2 102 18 122
Prepaid expenses - 3 2 5 2 2 1 5
Other debtors - 660 - 660 670 574 4 1,248
- 764 15 779 674 678 23 1,375
Other debtors relate to interest receivable on investment loans.
13. Cash and Cash Equivalents
Cash and cash equivalents comprise deposits with The Royal Bank of Scotland plc and Cater Allen Private Bank.
14. Payables and Accrued Expenses
28 February 2018 28 February 2017
Ord Shares A Shares B Shares Total Ord Shares A Shares B Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Trade Creditors - 23 69 92 5 59 51 115
Other taxation and social
security - 3 2 5 2 2 1 5
Accrued expenses & deferred
income - 14 9 23 75 12 8 95
- 40 80 120 82 73 60 215
Disclosure by share class is unaudited.
15. Share Capital
28 February 2018 28 February 2017
Ordinary Shares of GBP0.01 each
Issued & Fully Paid
Number of shares - 20,349,869
Par Value GBP'000 - 203
Authorised
Number of shares - 60,000,000
Par Value GBP'000 - 600
A Ordinary Shares of GBP0.01 each
Issued & Fully Paid
Number of shares 9,951,133 9,951,133
Par Value GBP'000 100 100
Authorised
Number of shares 10,000,000 10,000,000
Par Value GBP'000 100 100
B Ordinary Shares of GBP0.01 each
Issued & Fully Paid
Number of shares 6,824,266 6,824,266
Par Value GBP'000 68 68
Authorised
Number of shares 10,000,000 10,000,000 Par Value GBP'000 100 100 Company Total Shares of GBP0.01 each Issued & Fully Paid Number of shares 16,775,399 37,125,268 Par Value GBP'000 168 371
On 16 January 2018 the Ordinary Shares were cancelled.
16. Financial Instruments and Risk Management
The Company's financial instruments comprise VCT qualifying investments and non-qualifying investments, cash balances and liquid resources including debtors and creditors. The Company holds financial assets in accordance with its investment policy detailed in the Strategic Report on page 4.
The following table discloses the financial assets and liabilities of the Company in the categories defined by IAS 39, "Financial Instruments; Recognition & Measurement."
Financial Liabilities held Fair value through profit
Total value Loan and receivables at amortised cost or loss
GBP'000 GBP'000 GBP'000 GBP'000
Year ended 28 February 2018
Assets:
Financial assets at fair
value through profit or
loss 16,554 - - 16,554
Assets held for sale - -
Receivables 774 774 - -
Cash and cash equivalents 353 353 - -
17,681 1,127 - 16,554
Liabilities:
Other Payables 120 - 120 -
120 - 120 -
Year ended 28 February 2017
Assets:
Financial assets at fair
value through profit or
loss 16,593 - - 16,593
Assets held for sale 191 - - 191
Receivables 1,370 1,370 - -
Cash and cash equivalents 1,525 1,525 - -
19,679 2,895 - 16,784
Liabilities:
Other Payables 210 - 210 -
210 - 210 -
Fixed Asset Investments (see note 10) are valued at fair value. Unquoted investments are carried at fair value as determined by the Directors in accordance with current venture capital industry guidelines. The fair value of all other financial assets and liabilities is represented by their carrying value on the balance sheet. The Directors believe that where an investee company's enterprise value, which is equivalent to fair value, remains unchanged since acquisition that investment should continue to be held at cost less any loan repayments received. Where they consider the investee company's enterprise value has changed since acquisition, that should be reflected by the investment being held at a value measured using a discounted cash flow model or a recent transaction price.
In carrying out its investment activities, the Company is exposed to various types of risk associated with the financial instruments and markets in which it invests. The Company's approach to managing its risks is set out below together with a description of the nature of the financial instruments held at the balance sheet date.
Market Risk
The Company's VCT qualifying investments are held in small and medium-sized unquoted investments which, by their nature, entail a higher level of risk and lower liquidity than investments in large quoted companies. The Directors and Investment Manager aim to limit the risk attached to the portfolio as a whole by careful selection and timely realisation of investments, by carrying out rigorous due diligence procedures and by maintaining a spread of holdings in terms of industry sector and geographical location. The Board reviews the investment portfolio with the Investment Manager on a regular basis. Details of the Company's investment portfolio at the balance sheet date are set out on pages 15 to 21.
An increase of 1% in the value of investments would increase the capital profits for the period and the net asset value at 28 February 2018 by GBP165,535. A decrease of 1% would reduce the capital profits and net asset value by the same amount. A movement of 1% is used as a multiple to demonstrate the impact of varying changes on the capital profits and net asset value of the Company.
Interest Rate Risk
Some of the Company's financial assets are interest bearing, of which some are at fixed rates and some at variable rates. As a result, the Company is exposed to interest rate risk arising from fluctuations in the prevailing levels of market interest rates.
Investments made into qualifying holdings are part equity and part loan. The loan element of investments totals GBP3,397,000 (2017: GBP3,397,000) and is subject to fixed interest rates of between 21.6% and 29.5% for between 5 - 20 years and, as a result, there is no cash flow interest rate risk. As the loans are held in conjunction with equity and are valued in combination as part of the enterprise value, fair value risk is considered part of market risk.
The Company also has non-qualifying loan investments of GBP3,380,000 (2017: GBP3,677,000) which carry interest rates between 7.75 and 13.5% for between 5 - 15 years.
The amounts held in variable rate investments at the balance sheet date are as follows:
28 February 2018 29 February 2017
GBP'000 GBP'000
Cash on Deposit 353 1,525
353 1,525
An increase in interest rates of 1% per annum would not have a material effect either on the revenue for the year or the net asset value at 28 February 2018. The Board believes that in the current economic climate a movement of 1% is reasonably possible.
Credit Risk
Credit risk is the risk that a counterparty will fail to discharge an obligation or commitment that it has entered into with the Company. The Investment Manager and the Board carry out a regular review of counterparty risk. The carrying value of the financial assets represent the maximum credit risk exposure at the balance sheet date.
28 February
2018 28 February 2017
GBP'000 GBP'000
Non Qualifying investment loans 3,446 3,744
Qualifying investment loans 3,406 3,397
Cash on Deposit 353 1,525
Receivables 774 1,370
7,979 10,036
The Directors do not consider any investment loan included above to be past due or impaired and no issues have been identified which would be cause for concern with regards the quality of credit for any investee company.
The Company's bank accounts are maintained with The Royal Bank of Scotland plc ("RBS"). Should the credit quality
or financial position of RBS deteriorate significantly, the Investment Manager will move the cash holdings to another bank. Credit risk arising on unquoted loan stock held within unlisted investments is considered to be part of Market risk as disclosed above.
Liquidity Risk
The Company's financial assets include investments in unquoted equity securities which are not traded on a recognised stock exchange and which are illiquid. As a result the Company may not be able to realise some of its investments in these instruments quickly at an amount close to their fair value in order to meet its liquidity requirements.
The Company's liquidity risk is managed on a continuing basis by the Investment Manager in accordance with policies and procedures laid down by the Board. The Company's overall liquidity risks are monitored by the Board on a quarterly basis.
The Board maintains a liquidity management policy where cash and future cash flows from operating activities will be sufficient to pay expenses. At 28 February 2018 cash held by the Company amounted to GBP353,000.
Foreign Currency Risk
The Company does not have exposure to material foreign currency risks.
17. Net Asset Value per Share
The net asset value per share for the A Shares is 106.90p and is calculated based on net assets of GBP10,638,000 divided by the 9,951,133 A Shares in issue.
The net asset value per share for the B Shares is 1.00p and is calculated on net assets of GBP6,824,000 divided by the 6,824,266 B Shares in issue.
18. Commitments and Contingencies
The Company has no contingent liabilities or commitments.
19. Relationship with Investment Manager
During the period, TPIM received GBP51,394 (which has been expensed by the Company) for providing management and administrative services to the Company. TPIM have agreed not to charge their management fees for the A Share Class for the current financial year ending 28 February 2018, to enable the A Share Class to build up distributable reserves. TPIM have agreed not to charge their management fees from 1 January 2017 on the amounts invested into two companies constructing gas power plants, which represents circa 75% of the B Share Class NAV, until these investments start to generate income for the B Share Class.
20. Related Party Transactions
The Directors Remuneration Statement on pages 32 to 33 discloses the Directors' remuneration and shareholdings.
There were no other related party transactions during the period.
21. Post Balance Sheet Events
There were no post balance sheet events.
22. Dividend
Ordinary Share Class:
On 13 April 2017 a dividend of GBP1,017,493 equal to 5p per share was paid to the Ordinary Class Shareholders.
On 23 June 2017 a dividend of GBP406,997 equal to 2p per share was paid to the Ordinary Class Shareholders. On 24 November a dividend of GBP671,546 equal to 3.30p per share was paid to the Ordinary Class Shareholders.
During the year dividends of GBP255,843 were paid out of the Special Distributable Reserve, GBP1,381,390 from the Realised Capital Reserve and GBP458,803 from Revenue Reserve.
Following the final dividend, the shares were cancelled and a final payment of GBP203,499 equal to 1p per share was paid to the Ordinary Shareholders, bringing the total return to Ordinary Shareholders to 115.05p.
A Share Class:
On 23 June 2017 a dividend of GBP398,045 equal to 4p per share was paid to the A Class Shareholders. This was paid entirely from the Revenue Reserve.
The Board has resolved to pay a second dividend to A Class Shareholders of GBP273,656 equal to 2.75p per share which will be paid on 28 June 2018 to shareholders on the register on 15 June 2018.
Information
Details of Advisers
Secretary and Registered Office:
Triple Point Investment Management LLP
18 St Swithin's Lane
London
EC4N 8AD
Registered Number
07324448
FCA Registration number
659605
Investment Manager and Administrator
Triple Point Investment Management LLP
18 St Swithin's Lane
London
EC4N 8AD
Tel: 020 7201 8989
Independent Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Solicitors
Howard Kennedy LLP
No. 1 London Bridge
London
SE1 9BG
Registrars
Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
West Midlands
B63 3DA
VCT Taxation Advisers
Philip Hare & Associates LLP
First floor
4-6 Staple Inn
Holborn
London
WC1V 7QH
Bankers
The Royal Bank of Scotland plc
54 Lime Street
London
EC3M 7NQ
Shareholder Information
The Company
Triple Point VCT 2011 plc is a Venture Capital Trust. The Investment Manager is Triple Point Investment Management LLP. The Company was incorporated on 23 July 2010.
The Company's investment strategy is to offer combined exposure to cash or cash based funds and venture capital investments focused on companies with contractual revenues from financially secure counterparties. The Company continues to meet the condition that 70% of relevant funds must be invested in qualifying investments.
Financial Calendar
The Company's financial calendar is as follows:
12 July 2018 Annual General Meeting October 2018 Interim report for the six months ending 31 August 2018 despatched
May 2019 Results for the year to 28 February 2019 announced; Annual Report and Financial
Statements published.
Notice of Annual General Meeting
NOTICE is hereby given that the Annual General Meeting of Triple Point VCT 2011 plc will be held at 18 St Swithin's Lane, London, EC4N 8AD at 10.45am on Thursday 12 July 2018 for the following purposes:
Ordinary Business
1. To receive, consider and adopt the Report of the Directors and Financial Statements of the Company for the year ended 28 February 2018 together with the Independent Auditors Report thereon (Ordinary Resolution).
2. To approve the Directors' Remuneration Report for the year ended 28 February 2018 (Ordinary Resolution).
3. To re-elect Jane Owen as a Director (Ordinary Resolution).).
4. To appoint BDO 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 A Shares or B Shares provided that:
(i) 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;
(ii) the maximum aggregate number of B Shares authorised to be purchased is an amount equal to 10% of the issued B Shares as at the date of this Resolution;
(iii) the minimum price which may be paid for an A Share or B Share is 1 pence;
(iv) the maximum price which may be paid for an A Share or B Share is an amount, exclusive of expenses, equal to 105 per cent. of the average of the middle market prices for the A Shares and B Shares as derived from the Daily Official List of the UK Listing Authority for the five business days immediately preceding the day on which that A Share or B Share (as applicable) is purchased; and
(v) this authority shall expire either at the conclusion of the next Annual General Meeting of the Company or 15 months following the date of the passing of this Resolution, whichever is the first to occur (unless previously renewed, varied or revoked by the Company in general meeting), provided that the Company may, before such expiry, make a contract to purchase its own shares which would or might be executed wholly or partly after such expiry, and the Company may make a purchase of its own shares in pursuance of such contract as if the authority hereby conferred had not expired. (Special Resolution).
By Order of the Board
Jane Owen
Director
Registered Office:
18 St Swithin's Lane
London EC4N 8AD 17 May 2018
Notes:
(i) A member entitled to vote at the Meeting is entitled to appoint one or more proxies to attend and, on a poll, vote on his or her behalf. A proxy need not be a member of the Company.
(ii) A form of proxy is enclosed. To be effective, the instrument appointing a proxy (together with the power of attorney or other authority, if any, under which it is signed, or a certified copy of such power or authority) must be deposited at or posted to the office of the registrars of the Company, Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, West Midlands B63 3DA, so as to be received not less than 48 hours before the time fixed for the Meeting. Completion and return of the form of proxy will not preclude a member from attending or voting at the Meeting in person if he or she so wishes.
(iii) Members who hold their shares in uncertificated form must be entered in the Company's register of Members 48 hours before the Meeting to be entitled to attend or vote at the Meeting. Such shareholders may only cast votes in respect of Ordinary Shares held by them at such time.
(iv) Copies of the service contracts of each of the Directors, the register of Directors' interests in shares of the Company kept in accordance with the Listing Rules and a copy of the Memorandum and Articles of Association of the Company, will be available for inspection at the registered offer of the Company during usual business hours on any week day (Saturdays, Sundays and public holidays excepted) from the date of this notice until the date of the Annual General Meeting and at the place of the Annual General Meeting from at least 15 minutes prior to and until the conclusion of the Annual General Meeting.
(v) Form of Proxy
Relating to the 2018 Annual General Meeting of Triple Point VCT 2011 plc
I/We..........................................................................................................................................
BLOCK CAPITALS PLEASE - Name in which shares registered
of.............................................................................................................................................
................................................................................................................................................
or failing him/her the Chairman of the meeting to be my/our proxy and vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held on 10.45am on Thursday 12 July 2018, notice of which was sent to shareholders with the Directors' Report and the accounts for the period ended 28 February 2018, and at any adjournment thereof. The proxy will vote as indicated below in respect of the resolutions set out in the notice of meeting:
Resolution number For Against Withheld
1. To receive, consider and adopt the Report of the Directors and the Financial Statements
for
the year ended 28 February 2018.
2. To approve the implementation report set out in the Directors' Remuneration Report for the
year ended 28 February 2018.
3. To re-elect Jane Owen as a Director
4. To appoint BDO LLP as auditor and authorise the Directors to agree their remuneration.
5. To authorise the Directors to make market purchases of the Company's own shares (Special
Resolution).
Signed: ....................................................................... Dated: ................................................ ..2018
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 UBONRWRAVAAR
(END) Dow Jones Newswires
May 17, 2018 12:40 ET (16:40 GMT)
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