TIDMTPVE TIDMTPVC TIDMTPVD
RNS Number : 5319C
Triple Point Inc VCT - TPVE
17 June 2019
Triple Point Income VCT plc
LEI: 213800IXD8S5WY88L245
The financial information set out in these statements does not
constitute the Company's statutory accounts for the year ended 31
March 2019, 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 in due
course. 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 Income VCT plc managed by Triple Point Investment
Management LLP today announces the final results for the year ended
31 March 2019.
These results were approved by the Board of Directors on 17 June
2019.
You may view the Annual Report in due course on the Triple Point
website www.triplepoint.co.uk
Financial Summary
Year ended 31
March 2019
Ord Shares A Shares C Shares D Shares E Shares Total
Net assets GBP'000 - - 18,088 16,077 29,691 63,856
Net asset value
per share Pence - - 134.58p 117.34p 102.56p n/a
--------------------- ---------- ------------ ---------- ---------- ---------- ---------- --------
Net profit before
tax GBP'000 35 - 3,652 2,083 1,263 7,033
Earnings per share Pence 0.07p - 26.74p 14.36p 4.24p n/a
--------------------- ---------- ------------ ---------- ---------- ---------- ---------- --------
Cumulative return
to shareholders
(p)
Net asset value
per share - - 134.58 117.34 102.56
Dividends paid 97.87 99.99 15.00 10.00 -
----------
Net asset value
plus dividends
paid 97.87 99.99 149.58 127.34 102.56
--------------------------------- ------------ ---------- ---------- ---------- ---------- --------
Year ended 31
March 2018
Ord Shares A Shares C Shares D Shares E Shares Total
Net assets GBP'000 12,795 - 15,166 14,794 28,463 71,218
Net asset value
per share Pence 65.74p - 112.84p 107.98p 98.32p n/a
-------------------- ---------- ------------ ---------- ---------- ---------- ---------- --------
Net profit/(loss)
before tax GBP'000 675 69 1,598 1,176 (575) 2,943
Earnings/(loss)
per share Pence 3.50p 1.51p 11.34p 7.79p (1.70p) n/a
-------------------- ---------- ------------ ---------- ---------- ---------- ---------- --------
Cumulative return
to shareholders
(p)
Net asset value
per share 65.74 - 112.84 107.98 98.32
Dividends paid 33.06 99.99 10.00 5.00 -
----------
Net asset value
plus dividends
paid 98.80 99.99 122.84 112.98 98.32
-------------------------------- ------------ ---------- ---------- ---------- ---------- --------
Triple Point Income VCT plc ("the Company") is a Venture Capital
Trust ("VCT"). The Investment Manager is Triple Point Investment
Management LLP ("TPIM"). The Company was incorporated in November
2007.
-- C Ordinary Shares: these are the shares issued in the Offer
that closed on 27 May 2014. A total of GBP14.0 million was raised
and 13,441,438 C Shares were issued.
-- D Ordinary Shares: these are the shares issued in the Offer
that closed on 30 April 2015. A total of GBP14.3 million was raised
and 13,701,636 D Shares were issued.
-- E Ordinary Shares: these are the shares issued in the Offer
that closed on 15 May 2017. Just under GBP30 million was raised and
28,949,575 E Shares were issued.
The Strategic Report on pages 3 to 28, the Directors' Report on
pages 29 to 32, the Corporate Governance report on pages 34 to 36
and the Directors' Remuneration Report on pages 39 to 43 have each
been drawn up in accordance with the requirements of English law
and liability in respect thereof is also governed by English law.
In particular, the responsibility of the Directors for these
reports is owed solely to Triple Point Income VCT plc.
Strategic Report
The Directors submit to the members their Annual Report and
Financial Statements for the Company for the year ended 31 March
2019.
The Strategic Report, on pages 3 to 28, has been prepared in
accordance with the requirements of section 414c of the Companies
Act 2006. Its purpose is to inform the members of the Company and
help them to assess how the Directors have performed their duty to
promote the success of the Company, in accordance with section 172
of the Companies Act 2006.
Chairman's Statement
I am writing to present the Financial Statements for Triple
Point Income VCT plc ("the Company") for the year ended 31 March
2019.
I am delighted to report that during the year the Company
successfully completed the realisation of the Ordinary Share Class
portfolio. The final 1.00p of share capital was distributed to the
Ordinary Shareholders on 22 March 2019. Taken together with the
cumulative dividends of 97.87p, the total returned was 98.87p per
share. This result exceeds the original minimum target return of
90.40p at launch by 8.47p per share excluding any income tax
relief.
Investment Portfolio
The Company's funds at 31 March 2019 are 92% invested in a
portfolio of VCT qualifying and non-qualifying quoted and unquoted
investments. At 31 March 2019 the Company continues to meet the
condition that at least 70% of the relevant funds must be invested
in VCT qualifying investments within three years. This minimum
threshold will increase to 80% for the Company from 1 April
2020.
The Investment Manager's review on pages 16 to 20 gives an
update on the portfolio of investments in 18 small unquoted
businesses and one quoted Real Estate Investment Trust.
C Share Class
The C Share Class has investments in three companies in the
Hydroelectric Power sector which between them own six hydroelectric
schemes in the Scottish Highlands. The C Share Class has also
invested in companies which provide SME funding to the
Hydroelectric Power sector.
The C Share Class has recorded a profit over the period of
26.74p per share. This arises from an uplift in the valuations of
the hydroelectric sector investments which reflects higher prices
and valuations in this sector.
The Company paid a third dividend to C Class Shareholders of
GBP672,072, equal to 5.00p per share, on 26 July 2018, bringing
total dividends paid to 15.00p.
At 31 March 2019 the net asset value stood at 134.58p per share.
Adding back the total dividends paid to date takes the total return
to 149.58p per share.
The Board has resolved to pay a further dividend of GBP672,072
equal to 5.00p per share on 25 July 2019 to shareholders on the
register on 12 July 2019 in line with the Company's target for this
Share Class.
D Share Class
The D Share Class has investments in six companies in the
Hydroelectric Power sector which between them own seven
hydroelectric schemes in the Scottish Highlands. The D Share Class
has also invested in two companies providing funding to SMEs, one
of which focuses on the Hydroelectric Power sector.
The D Share Class has recorded a profit over the period of
14.36p per share. This arises from an uplift in the valuations of
the hydroelectric sector investments which reflects higher prices
and valuations in this sector.
The Company paid its second dividend to D Class Shareholders of
GBP685,082, equal to 5.00p per share, on 26 July 2018.
At 31 March 2019 the net asset value stood at 117.34p per share.
Adding back the total dividends paid to date of 10.00p, takes the
total return to 127.34p per share.
The Board has resolved to pay a further dividend of GBP685,082
equal to 5.00p per share on 25 July 2019 to shareholders on the
register on 12 July 2019 in line with the Company's target for this
Share Class.
E Share Class
At the beginning of the year the E Share Class was the recipient
of a transfer of a diverse portfolio of investments previously held
by the Ordinary Share Class. This established, for the E Share
Class, an income-producing portfolio of investments spanning
Hydroelectric Power, Crematorium Management, Gas fired energy
centres, Solar PV, Vertical Growing and SME Lending.
The construction of a pioneering Vertical Growing facility is
now complete. Following delays during the construction process, the
first crop is expected to be delivered during the third quarter of
2019.
The E Share Class also has a non-qualifying investment of
GBP5.9m in Triple Point Social Housing REIT plc ("REIT"). This
investment generates income from a widespread portfolio of long
term, inflation linked, specialised supported housing property
leases and is targeting a regular dividend to investors of 5.00p
per share per annum rising in line with inflation. Further
information on this investment is included in the Investment
Manager's Review on page 19.
The E Share Class recorded a profit over the period of 4.24p per
share. At 31 March 2019 the net asset value stood at 102.56p per
share. The E Share Class is now 83% invested in a portfolio of
unquoted and quoted investments.
Specific Risks
The principal risks which the Board feel the Company is facing
are discussed in further detail on pages 13 and 14.
In particular the Board consider specific risks to be;
-- Compliance risk of failure to maintain approval as a qualifying VCT;
-- Investment risk associated with the VCTs portfolio of
unquoted investments, including the inability to invest funds
raised and the inability to realise funds to facilitate return to
investors;
-- Financial risk of investing on a medium to long-term basis;
-- Risk of failure of internal controls.
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
The Board are pleased with the progress achieved in all share
classes and the prompt exit facilitated for the Ordinary Class
Shareholders following the end of their five-year holding
period.
The Board and the Investment Manager are currently working on a
substantial capital realisation next year for both the C and D
Share Classes in line with their investment strategies.
The C Share Class and D Share Class have successfully generated
above target returns to date, and the focus will be to continue
enhancing the operational performance of the sites.
The E Share Class has deployed 83% of its funds and is expected
to pay its first dividend to Shareholders in the final quarter of
the current financial year in line with target.
The Company's focus for the E Share Class continues to be to
invest its remaining funds into suitable unquoted investments as
soon as possible and continue to monitor the operation of its
investments and focus on enhancing the operation of the assets
held.
In the Financial Accounts for the year ended 31 March 2018 we
highlighted changes to the VCT landscape with the government,
through its 'Financing Growth in Innovative Firms' consultation
("the Patient Capital Review") emphasising the importance of VCTs
in helping to provide investments into SMEs. Several changes were
introduced, including increasing a VCTs minimum qualifying
percentage threshold from 70% to 80% which will come into effect
for the Company from 1 April 2020.
The Company, along with the Investment Manager, has identified
and is currently in the process of introducing new procedures to
ensure the transition required will be successful. The Board are
pleased to report good progress has been made and the Company is on
track to implement the required changes.
The Company and the Investment Manager will endeavour to ensure
that the Company is compliant with the new rules as they come into
force.
If you have any questions or comments, please do not hesitate to
contact Triple Point on 020 7201 8989.
David Frank
Chairman
17 June 2019
Strategic Report - Company Strategy and Business Model
The Directors assess the Company's success in meeting its
objectives in relation to returns, stability, VCT qualification
and, ultimately, exit.
Performance Update
At launch the Ordinary Shares targeted a return of 8% to 10% pa
including the benefit of tax relief. At a weighted average share
price at acquisition or conversion of 83.60p and an 8% return this
is broadly equivalent to a total target return to investors in 2019
of 90.40p. This compares to the actual return to Shareholders of
98.87p, meaning the Ordinary Share Class exceeded its minimum
targeted return by 8.47p.
The C Share Class targets a return of 100.00p per share by the
end of year six. It is intended that this will comprise the income
tax rebate, tax-free dividends in years two, three, four and five
of an average 5.00p per share, followed by a substantial capital
realisation in year six. It is anticipated that from year six
investors will then receive, on average, an annual tax-free
dividend of around 3.50p per share in each of the next nine years,
and a final tax-free payment of approximately 50.00p per share in
2029, following the sale of the VCT's hydro projects.
The net asset value per share for the C Share Class at 31 March
2019 stood at 134.58p. Adding back the dividends paid to C Class
Shareholders of 15.00p per share takes the total return including
net asset value to 149.58p per share. The Company is currently
exceeding its objectives for the C Share Class.
The target for the D Share Class is to pay shareholders a return
of 100.00p per share by the end of the sixth year. It is intended
that this will comprise the income tax rebate, tax-free dividends
in years two, three, four and five of an average 5.00p per share,
followed by a substantial capital realisation in year six. It is
anticipated that from year six investors will then receive, on
average, an annual tax-free dividend of around 3.50p per share in
each of the next nine years, and a final tax-free payment of
approximately 50.00p per share in 2030, following the sale of the
VCT's hydro projects.
The net asset value per share for the D Share Class at 31 March
2019 stood at 117.34p. The Company is currently exceeding its
objectives for the D Share Class and during the year declared its
second dividend of 5p per share, which was paid on 26 July
2018.
In respect of the E Share Class, the Company aims to distribute
from income generated by its investments an average of 5.00p per E
Share for the financial year ending 31 March 2020 followed by a
regular dividend of up to 5.00p per E Share per annum for the
remaining life of the E Share Class. It is expected that the Share
Class will continue for a total of 10 to 12 years.
The net asset value per share for the E Share Class at 31 March
2019 stood at 102.56p.
The Board and the Investment Manager are both committed to
ensuring that returns on the investment portfolio are optimised and
that the VCT remains fully invested and continues to be managed in
line with the Company's investment strategy and risk profile.
The 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 pages 3
to 5 and the Investment Manager's Review on pages 16 to 20.
Dividend Policy
The Company will distribute, by way of dividend, such amount as
ensures that it retains not more than 15% of its income from shares
and securities. The Directors aim to maximise tax-free
distributions of income and/or realised gains to Shareholders. It
is envisaged that the Company will distribute most of its net
income each year by way of dividend, subject to liquidity.
Investment Policy
The Company's main focus is to generate returns from a portfolio
of investments in companies based in the UK in order to make
regular tax-free dividends.
The Company's Investment Policy was adopted and approved by
shareholders before recent changes to the rules for VCT-qualifying
investments and applies to the existing investment portfolio. The
Company recognises that it is likely that any new Qualifying
Investments would require amendment to the Investment Policy.
The key objectives of the Company are to:
a) Pay regular tax-free dividends to investors;
b) Maintain VCT status to enable investors to benefit from the associated tax reliefs;
c) Reduce the volatility normally associated with early stage
investments by applying its investment policy;
d) In respect of the C Ordinary Share Fund and the D Ordinary
Share Fund, provide investors with the opportunity to exit shortly
after 16 years following investment with a partial return of funds
to shareholders after 6 years; and
e) In respect of the E Ordinary Share Fund, provide investors
with the opportunity to exit between 10 and 12 years following
investment with a possible early partial return of funds to
shareholders if market conditions present such an opportunity.
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 Board may on occasion, where deemed appropriate, invest in less
mature or stable fields where there is the opportunity for
substantial growth and development. 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 has been 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 on which robust due diligence has been undertaken;
b) Investments where there is access to regular material financial and other information;
c) Investments where it may be possible to mitigate capital
losses 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. As mentioned in the Outlook above, this
minimum asset investment will increase to 80% from 6 April 2019.
The remaining assets will be exposed either to (i) cash or similar
cash-based liquid investments or (ii) investments originated in
line with the Company's 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
will include the following:
a) An attractive valuation at the time of the investment;
b) Managed risk of capital losses;
c) The quality of the company's cash flows;
d) The quality of the businesses' counterparties, suppliers and market position;
e) The sector in which the business is active;
f) The quality of the company's assets;
g) The opportunity to structure an investment that can produce distributable income;
h) The potential for 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) The ability to facilitate an exit which enables the Company
to meet its key investment objective of returning funds in line
with shareholder expectations.
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), shall not without the
previous sanction of an ordinary resolution of the Company exceed
30% 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 continue to make sure
that all non-qualifying investments made after that date meet the
new requirements although it is not expected this will represent a
departure from the current policy.
Valuation Policy
All unquoted investments will be valued in accordance with BVCA
or similar guidelines under which investments are not normally
re-valued above cost within twelve months of acquisition unless
third party funding has occurred. A brief summary of the BVCA
guidelines as it applies to investments is as follows:
-- Investments should be reported at fair value where this can
be reliably determined by the Board on the recommendation of the
Investment Manager;
-- that this price is a proxy for fair value;
-- In estimating fair value for an investment, the valuation
methodology applied should be the most appropriate for a particular
investment. Such methodologies, including the price of the recent
investment, earnings multiples, net assets, discounted cash flows
or earnings and industry valuation benchmarks, should be applied
consistently; and
-- If fair value cannot be reliably measured, transaction price
is used for valuing investments where it is believed that this
price is a proxy for fair value.
Any quoted investments will be valued at prevailing bid
prices.
For accounting periods commencing 1 January 2019 onwards,
updated International Private Equity and Venture Capital Valuation
("IPEV") guidelines no longer allow 'cost' and 'price of a recent
investment' as the primary methodology to be used when valuing
investments.
This is discussed further in note 10.
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 KPIs in meeting these objectives are:
-- Net Asset Value plus dividends paid; and
-- Earnings per share
A record of these indicators is detailed on page 2 entitled
Financial Summary.
Share Buy-Back Policy
The Company aims, but is not committed, to offer liquidity to
Shareholders through on-going buy-backs, subject to the
availability of distributable reserves and cash, at a target
discount of 10% to net asset value.
Share Realisation Policy
After an anticipated holding period of between five and seven
years, which may include follow-on investments into investee
companies as appropriate, Triple Point intends to identify
opportunities to realise investments in order to exit investors in
the most efficient way possible.
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 over the
following pages:
Investment classification for the C Share Class by asset value
and sector value are shown below:
Investment Portfolio - C Share Class
VCT Qualifying Investments 78%
VCT Non-Qualifying Investments 18%
Cash 4%
Investments by Sector - C Share Class
Hydro Electric Power 83%
SME Funding Hydro Electric Power 17%
Investment classification for the D Share Class by asset value
and sector value are shown below:
Investment Portfolio - D Share Class
VCT Qualifying Investments 86%
VCT Non-Qualifying Investments 9%
Cash 5%
Investments by Sector - D Share Class
Hydro Electric Power 92%
SME Funding Hydro Electric Power 8%
Investment classification for the E Share Class by asset value
and sector value are shown below:
Investment Portfolio - E Share Class
VCT Qualifying Investments 51%
VCT Non-Qualifying Investments 33%
Cash 16%
** Please note that the percentage of qualifying investments in
the above graph is not representative of the Company as a whole,
whose qualifying investments exceed the requisite 70%
threshold.
Investments by Sector - E Share Class
Vertical Growing 20%
Quoted Investments 24%
Hydroelectric Power 12%
SME Funding Hydro Electric Power 3%
SME Funding - Other 9%
Electricity generation - Other 32%
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 have been 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. From the 1 April 2020, the percentage of the Company's
investments held in "qualifying holdings" will increase from 70% to
80%.
FCA Regulation
On 1 April 2014 Triple Point Income VCT plc registered with the
Financial Conduct Authority as a small Alternative Investment Fund
Manager ("AIFM") under the AIFM Directive.
Exit Programme
After successfully returning funds to the Ordinary Shareholders,
the Company is now committed to securing a partial realisation for
both the C and D Share Classes. In relation to the C Share Class
the Company is intending to secure the partial realisation after
its five-year anniversary but plans to retain its investment in the
Hydro companies until 2029. In order for the Company to benefit
from economies of scale, the D Shares are also intending to secure
the partial realisation alongside the C Share Class and also plan
to retain its investment in the Hydro companies until 2030. In
relation to the E Share Class the Company is intending to return
funds to the E Shareholders as soon as practicable after their
five-year holding period.
The valuation of, and potential exit routes for, the Company's
portfolio of investments are reviewed and discussed at each Board
meeting. The Investment Manager has successfully implemented exit
plans for other VCTs under its management.
Principal Risks and uncertainties
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 could make it
difficult to realise investments in line with the relevant
strategy. 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 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. The key elements of financial risk are discussed in more
detail in note 15.
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. The Board conducted this
review for a period of five years, which was considered to be an
appropriate time horizon, as investors are required to hold their
investment for a period of five years in order to benefit from the
associated tax reliefs. The Board has determined that five years up
to 31 March 2024, is the maximum timescale over which the future
position of the Company can be forecast with a material degree of
accuracy and therefore is the appropriate period over which to
consider the viability. During the next five years both the C and D
Share Class will reach its five-year holding period and will look
to partially exit. The E Share Class will also reach their
five-year holding period, based on this the Directors believe it is
reasonable to make their assessment over five years.
In order to assess this requirement, the Board regularly
considers the Company's strategy and takes into account the
Company's current position and carries out a robust assessment of
the principal risks, including future performance and liquidity.
Consideration has also been given to the Company's reliance on, and
close working relationship with the Investment manager. This has
enabled the Directors to 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. The Board has considered both the Company's long-term
and short-term cash flow projections and considers these to be
realistic and reasonable.
More information on the principal risks of the Company is set
out on pages 13 and above.
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.
Share Buy-Back Discount Policy
The Company has a share buy-back facility, committing to buy
back shares at no more than a 10% discount to the prevailing NAV,
subject to the Directors' discretion. We will be asking
shareholders at the Annual General Meeting to extend the facility
for the Company to purchase shares in the market for cancellation.
Shareholders should note that if they sell their shares within five
years of subscription, they forfeit any tax relief obtained. If you
are considering selling your shares, please contact TPIM on 020
7201 8989.
Environmental, Social, Employee and Human Rights Issues
As an externally managed investment company with no employees
the Company does not maintain specific policies in relation to
these matters. 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 3 male Directors. The
Investment Manager has 93 staff of whom 50 are men and 43 are
women.
Strategic Report - Investment Manager's Review
Sector Analysis
The quoted and unquoted investments can be analysed as
follows
Electricity
Generation SME Funding
------------- ----------------------- ---------------------
Hydro Other Hydro
Industry Crematorium Vertical Electric Electric Electric Quoted Total
Sector Management Growing Power Power Power Other** Investments Investments
------------- ---------- ---------- ----------- ---------- ---------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ---------- ---------- ----------- ---------- --------- ------------- -------------
Investments
at 31 March
2018
---------- ----------
Ord Shares 646 - 2,806 6,846 350 450 - 11,098
C Shares - - 11,702 - 2,888 - - 14,590
D Shares - - 11,717 - 1,206 800 - 13,723
E Shares - 5,000 - - 400 1,449 5,884 12,733
Total 646 5,000 26,225 6,846 4,844 2,699 5,884 52,144
----------
Investments
made during
the period
------------- ---------- ----------
D Shares - - 400 - - - - 400
E Shares 646 - 2,806 6,478 350 50 - 10,330
---------- ---------
646 - 3,206 6,478 350 50 - 10,730
---------- ---------- ---------
Investments
realised
during the
period
------------- ---------- ---------- ---------- --------- ------------- -------------
Ord Shares (646) - (2,806) (6,846) (350) (450) - (11,098)
C Shares - - (88) - - - - (88)
D Shares - - (5) - - (800) - (805)
E Shares (124) - (437) 284 - 800 - 523
-------------
(770) - (3,336) (6,562) (350) (450) - (11,468)
----------
Investments
valued
during
the period
------------- ---------- ---------- ---------- --------- ------------- -------------
C Shares - - 2,913 - - - - 2,913
D Shares - - 1,417 - - - - 1,417
E Shares (419) - 506 1,100 - (3) 17 1,201
-------------
(419) - 4,836 1,100 - (3) 17 5,531
----------
Investments
at 31 March
2019
C Shares - - 14,527 - 2,888 - - 17,415
D Shares - - 13,529 - 1,206 - - 14,735
E Shares 103 5,000 2,875 7,862 750 2,296 5,901 24,787
Total 103 5,000 30,931 7,862 4,844 2,296 5,901 56,937
Total
investments
% 0.19% 8.78% 54.32% 13.81% 8.51% 4.03% 10.36% 100.00%
------------- ---------- ---------- ---------- ------------- -------------
** Other SME funding includes GBP2,296,000 of E Ordinary Share
Class investment into a UK based LLP which provides finance to
small and medium sized enterprises.
The VCT was established to fund small and medium sized
enterprises. At 31 March 2019 it had three share classes each
invested in their own portfolio as detailed on page 16. The overall
portfolio comprised investments in 18 small, unquoted companies and
one quoted Real Estate Investment Trust, across 5 sectors:
crematorium management; electricity generation, vertical growing,
SME Funding; and Investment Property.
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% for accounting periods
commencing after 6 April 2019. The Investment Manager monitors
compliance with all qualification conditions closely and maintains
a forward-looking Qualifying Investment Tracker. We are confident
that we can ensure continuing compliance with all conditions.
The Company's Share Class portfolio consists of businesses which
are fully operational and revenue generating. Generally,
performance during the year across the portfolio has been in line
with expectations with all share classes benefitting from an uplift
in the valuation of their investments.
Review and Outlook
Crematorium Management
The Company has an investment in a business that provides
crematory and mercury abatement services for the crematoria of a
London Borough. This investment receives revenues from local
authorities and has consistently generated a steady return over the
years it has been held. During the year, Furnace Managed Services
Limited ("FMS") repaid its loan in full to the Company. Looking
ahead, the Company is expected to receive dividends from FMS.
Solar
The Company holds an investment in four portfolios of rooftop
solar PV systems through the following investee companies:
-- Green Energy for Education Limited ("GEFE"), which owns a
portfolio of 126 systems on residential rooftops in Luton;
-- Campus Link Limited ("CMP"), which owns a portfolio of 36
systems on residential rooftops in south west England;
-- Digima ("DIG") Limited, which owns a portfolio of 82 systems
on residential rooftops in East Anglia; and
-- Digital Screen Solutions ("DSS") Limited, which owns a
portfolio of 324 systems on residential rooftops in Northern
Ireland.
The final portfolio was acquired by Digital Screen Solutions on
21 December 2018. The GEFE, CMP and DSS portfolios are currently
performing in line with, or slightly above, expectations. The DIG
portfolio is performing slightly below expectations, and Digima is
working closely with its operations & maintenance provider in
an effort to improve this performance going forward.
Hydroelectric Power
The eleven hydroelectric 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 (FiT) payments based on output and
from the sale of the electricity produced to utilities or other
power companies under Power Purchase Agreements (PPAs). The
companies have continued to obtain better power prices than were
originally forecast, currently earning an average of 6.3 pence per
kWh compared to an expected 5 pence per kWh at the outset of the
projects.
The last 12 months have seen lower than expected rainfall across
the Scottish Highlands. Rainfall variability is to be expected over
the 40-year period of generation which our investee companies are
expected to experience overall, and we continue to be pleased with
the efficiency of the hydro plants owned by them. The hydroelectric
companies remain highly focussed on improving efficiencies and
maximising output and are working alongside hydro experts to
further enhance performance.
Industry Update
The hydroelectric companies, together with other industry
members and the British Hydropower Association, are continuing to
lobby the Scottish Government to recognise the concern on business
rates in the hydro sector. For the financial year 2018/19, the
hydroelectric companies received a 60% relief and it is expected
that this relief will continue to be applied for the financial year
2019/20 and until such time as the Scottish Government address the
issues of the business rates in the hydro sector.
In July 2018, the government announced the end of the FiT scheme
for renewable energy from 31 March 2019. All businesses that
already have FiT registrations will continue to receive payments
for the remainder of their agreement. Therefore, as the companies
entered in to 20 year agreements prior to this announcement, the
eight hydroelectric companies are unaffected by this change.
Gas Power
The Company has an investment which has constructed a gas fired
energy centre which will provide a reliable and secure energy
supply. The energy centre was commissioned during May 2018 and it
consists of containerised gas combustion engines that generate
electricity for onward sale, especially at times when there is high
demand for power.
The UK 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 company has taken advantage of a gap in the market by
constructing and operating gas fired energy centre to produce and
sell electricity to customers. The energy centre utilises simple
technology, provided by Rolls Royce, to deliver a reliable and
secure energy supply.
Gas is purchased from the National Transmission System and
combusted in the engines. The electricity is then exported to the
National Grid and sold under a power purchase agreement. The
company receives revenues from the sale of electricity and
additional 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.
During the six-month period to 31 December 2018, Green Peak
Generation Ltd generated 4,483 MWh of electricity. Based on an
average of 3.8 MWh annual use per household, the energy centre
generated enough electricity for 2,359 homes during the period.
Green Peak Generation is working with the contractor to replace
the engine silencers, at no cost to Green Peak Generation, owing to
their poor acoustic performance. This is expected to be completed
in June 2019.
Industry Update
The Capacity Market consists of fixed payments to power
generators to ensure they are available during periods of high
demand. Eligible power generators must bid in an auction process to
win a contract, they will then receive these payments in exchange
for ensuring the generator is available during the peak demand
periods.
On 15 November 2018, the European Court of Justice unexpectedly
announced that it did not believe that sufficient work had been
undertaken when the European Commission ('EC') approved the UK's
Capacity Market scheme, leading to a halt to all payments under the
scheme.
The UK's Department for Business, Energy and Industrial Strategy
('BEIS') have indicated they are working closely with the EC to
secure approval and have suggested they anticipate securing this
approval by the end of 2019 (including making the currently frozen
Capacity Market payments). As the expected impact of this
announcement is only a delay in payments which will be received by
the projects, it is not anticipated that this will have a material
impact on investor returns, but there is currently uncertainty over
the timing of when these revenues will be received.
In addition, Ofgem completed its review of embedded benefits
available to small generators and announced certain planned
changes. Albeit a relatively small element of the revenue generated
by the companies, embedded benefits form another income stream
which the energy centres receive. Assuming these changes are
implemented, this will have the effect of reducing the income the
energy centres are able to earn as well as introducing a small cost
for each MWh of electricity that is generated. This is expected to
have a minor negative impact on investor returns.
Vertical Growing
Vertical Growing is the practice of producing food in an indoor
growing facility where all inputs (water, light, and nutrients)
meet the optimum needs of the crop.
Vertical growing facilities are designed to have a sealed
environment, meaning that the product is grown under controlled
conditions, with positive air pressure to prevent any pests
entering the facility. This ensures that insects and other pests
cannot attack the crop, removing both the need to use pesticides
and to wash the crop before distribution therefore increasing its
shelf life.
A large variety of produce can be grown using this method
including herbs, salad leaves, and beyond. By combining flexible
designs and short growing cycles, vertical growing facilities
enable the grower to quickly respond to the demands of customers,
switching between different products with minimal notice.
Perfectly Fresh Cheshire Limited ("PFC") has now substantially
completed construction of its first vertical growing facility,
which has also passed a critical site audit and, subject to some
final snagging issues, is ready to move into an operational
phase.
The construction of the first facility presented many
challenges, which was to be expected when considering the
innovative and high-tech nature of the build. Most of the initial
construction challenges have now been rectified and the facility is
now trialling the growth of its first crops.
PFC has also made several new hires who will run and manage the
facility and to satisfy PFC's customers. Once operations have
commenced PFC will also focus on obtaining new contracts and new
customers, with a view to constructing a second facility. In the
medium term, it is intended that PFC would seek to secure
institutional investment which will help enable it to pursue its
future development plans.
With a few big players entering the market recently, such as
Ocado, the sector is continuing to gather momentum. We believe PFC
is one of the front-runners in the industry and boasts significant
technology and know-how developed within its first facility.
Non-Qualifying
Real Estate Investment Trust ("REIT")
The Triple Point Social Housing REIT invests in social housing
assets within the UK, in particular homes in the supported housing
sector. These homes are adapted to provide care and support to
vulnerable tenants with specific requirements and provide tenants
with greater independence than institutional care
accommodation.
The REIT owns a portfolio of assets that benefit from long term
indexed linked leases of at least twenty years to Approved
Providers such as housing associations, who are bodies that receive
their funding from central and local government. Through these long
leases it is able to offer its shareholders an attractive and
consistent level of inflation-linked income.
As at 31 March 2019 the Triple Point Social Housing REIT had a
NAV per Ordinary Share of 103.72. The REIT's portfolio performed in
line with expectation and the forecast dividend for the 2019
financial period was increased by CPI, in line with target, to
5.095p.
In February 2019 the Regulator of Social Housing published an
Addendum to the Sector Risk Profile 2018 entitled "Lease-based
providers of specialist supported housing". The report did not
highlight any new risks to the lease-based model; however it has
resulted in a decrease in investor sentiment towards the sector,
and the shares are currently trading at a significant discount to
NAV.
The Company and the Investment Manager believe the REIT remains
a positive investment driven by the independent, community based
accommodation provided by the REIT that delivers significant cost
savings for Local Authorities, and better tenant outcomes, as
compared to residential nursing homes, care homes and in-patient
hospitals.
SME Funding
The Company has non-qualifying investments in four finance
companies. These four finance companies provide funding for
business-critical loans and asset finance to over 75,000 UK
Corporate and SME customers. Two of these companies,
Broadpoint 2 Ltd and Broadpoint 3 Ltd provide loan and equity
funding to the hydroelectric sector.
All of the loans are performing in line with expectations and
Broadpoint 2 is generating a steady yield for the Company.
Broadpoint 3's equity holdings support a loan from the Company and
are long term in nature.
Ordinary Share Class
On 26 February 2019 the Ordinary Shares were cancelled, with the
final 1.00p of share capital returned to Ordinary Class
Shareholders on 22 March 2019. The total returned to shareholders
was 98.87p per share against a target return of 90.40p per
share.
C Share Class
The Company and the Investment Manager will monitor the ongoing
operation and efficiency of the C Share Class investments. The C
Share Class has investments in three companies which between them
own six hydroelectric schemes in the Scottish Highlands.
Further updates on this sector are detailed in the Hydroelectric
Power section above. The Investment Manager is now focussing on
securing a partial realisation for the C Share Class.
D Share Class
The Company and the Investment Manager will monitor the ongoing
operation and efficiency of the D Share Class investments. The D
Share Class has investments in three companies which between them
own six hydroelectric schemes in the Scottish Highlands. Further
updates on this sector are detailed in the Hydroelectric Power
section above. The Investment Manager is now focussing on securing
a partial realisation for the D Share Class.
E Share Class
The E Share Class has made a qualifying investment of GBP5
million in a pioneering vertical growing company that has recently
completed construction of its commercial scale growing facility in
Cheshire.
Triple Point is paid an annual management fee as Investment
Manager to the REIT and consequently has agreed to rebate a
corresponding part of its management fee relating to this
investment, to ensure VCT Investors are not bearing additional
fees.
The REIT is discussed in more detail on page 19.
Brexit
The Investment Manager and the Board continue to keep the
possible impact of Brexit on the Company under review. The
Company's strategy of investing in small UK based businesses means
that it is unlikely to be directly exposed to the terms of an exit
from the EU. We are, however, going through a period of some
political and, potentially, economic uncertainty. We believe that
by investing carefully, monitoring our portfolio rigorously and
providing support to the businesses in which we have invested we
can minimise the effects of this uncertainty.
Going forward, the Company and the Investment Manager are
focused on ensuring that the remaining funds are invested in line
with the Company's strategy and the requirements of the VCT
legislation.
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 June 2019
Strategic Report - Investment Portfolio Summary
31 March 2019 31 March 2018
---------------------------------------- ----------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted qualifying holdings 33,704 62.75 42,523 69.40 33,705 50.06 37,075 52.52
Quoted non-qualifying
holdings 6,001 11.02 5,901 9.35 6,001 8.91 5,884 8.34
Unquoted non-qualifying
holdings 8,563 15.72 8,513 13.48 9,185 13.63 9,185 13.01
Financial assets at fair
value through profit or
loss 48,268 89.49 56,937 92.23 48,891 72.60 52,144 73.87
Cash and cash equivalents 6,188 10.51 6,188 7.77 18,448 27.40 18,448 26.13
54,456 100.00 63,125 100.00 67,339 100.00 70,592 100.00
========= ======== ========= ======== ========= ======== ========= ========
Qualifying Holdings
Unquoted
Solar
Digima Ltd 1,262 2.32 1,612 2.55 1,262 1.87 1,621 2.30
Digital Screen Solutions
Ltd 2,020 3.71 2,658 4.21 2,020 3.00 2,062 2.92
Green Energy for Education
Ltd 475 1.72 1,127 3.82 475 0.71 963 1.36
Hydroelectric Power
Elementary Energy Ltd 2,060 3.78 2,409 3.82 2,060 3.06 2,310 3.27
Green Highland Allt Choire
A Bhalachain (225) Ltd 3,130 5.75 3,642 5.77 3,130 4.65 3,504 4.96
Green Highland Allt Garbh
Ltd 2,710 4.98 2,710 4.29 2,710 4.02 2,710 3.84
Green Highland Allt Ladaidh
(1148) Ltd 3,500 6.43 5,010 7.94 3,500 5.20 4,092 5.80
Green Highland Allt Luaidhe
(228) Ltd 1,995 3.66 2,407 3.81 1,996 2.96 2,165 3.07
Green Highland Allt Phocachain
(1015) Ltd 3,932 7.22 4,871 7.72 3,932 5.84 4,187 5.93
Green Highland Shenval
Ltd 1,120 2.06 797 1.26 1,120 1.66 692 0.98
Green Highland Renewables
(Achnacarry) Ltd 4,300 7.90 7,857 12.45 4,300 6.39 5,569 7.89
Gas Power
Green Peak Generation
Ltd 2,200 4.04 2,423 3.84 2,200 3.27 2,200 3.12
Vertical Growing
Perfectly Fresh Cheshire
Ltd 5,000 9.18 5,000 7.92 5,000 7.43 5,000 7.08
33,704 62.75 42,523 69.40 33,705 50.06 37,075 52.52
========= ======== ========= ======== ========= ======== ========= ========
31 March 2019 31 March 2018
-------------------------------------- --------------------------------------
Cost Valuation Cost Valuation
Non-Qualifying Holdings GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Quoted
Investment property
TP Social Housing REIT
Plc Equity 6,001 11.02 5,901 9.35 6,001 8.91 5,884 8.34
6,001 11.02 5,901 9.35 6,001 8.91 5,884 8.34
========= ======= ========= ======= ========= ======= ========= =======
Unquoted
Crematorium Management
Furnace Managed Services
Ltd 496 0.91 103 0.16 620 0.92 646 0.92
Hydroelectric Power
Elementary Energy Ltd 248 0.46 248 0.39 285 0.42 285 0.40
Green Highland Allt Choire
A Bhalachain (225) Ltd 289 0.53 289 0.46 318 0.47 318 0.45
Green Highland Allt Luaidhe
(228) Ltd 180 0.33 180 0.29 185 0.27 185 0.26
Green Highland Allt Phocachain
(1015) Ltd 122 0.22 122 0.19 143 0.21 143 0.20
Green Highland Renewables
(Achnacarry) Ltd 26 0.05 27 0.04 65 0.10 65 0.09
SME Funding
Hydroelectric Power:
Broadpoint 2 Ltd 2,834 5.20 2,834 4.49 2,834 4.21 2,834 4.01
Broadpoint 3 Ltd 2,010 3.69 2,010 3.18 2,010 2.98 2,010 2.85
Other:
Aeris Power Ltd 158 0.29 500 0.79 525 0.78 499 0.71
Funding Path Ltd 2,200 4.04 2,200 3.49 2,200 3.27 2,200 3.12
8,563 15.72 8,513 13.48 9,185 13.63 9,185 13.01
--------- ------- --------- ------- --------- ------- --------- -------
Financial Assets are measured at fair value through profit or
loss. The initial best estimate of fair value of these investments
that are either quoted or not quoted on an active market is the
transaction price (i.e. cost). The fair value of these investments
is subsequently measured by reference to the enterprise value of
the investee company, which is best deemed to reflect the fair
value. Where the Board considers the investee company's enterprise
value to remain unchanged since acquisition, investments continue
to be held at cost less any loan repayments received. Where the
Board considers the investee company's enterprise value has changed
since acquisition, investments are held at a value measured using a
discounted cash flow model or the value expected to be realised on
disposal which is equivalent to fair value.
For accounting periods commencing 1 January 2019 onwards,
updated International Private Equity and Venture Capital Valuation
("IPEV") guidelines no longer allow 'cost' and 'price of a recent
investment' to be used as the primary valuation technique when
valuing investments. This is discussed further in note 10.
Strategic Report - Investment Portfolio's Ten Largest VCT
Investments
Triple Point Social Housing REIT Plc
Date of first investment Cost GBP Valuation Valuation Income Equity Equity
GBP Method recognised Held by Held by
by TP Income TP Income TPIM managed
for the % funds
year GBP'000 %
17 November 2017 6,000,886 5,901,459 Bid Price 250 1.65 1.65
Summary of Information from Investee Company Financial Statements GBP'000
ending in 2018:
Turnover 11,490
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 21,687
Profit before tax 19,897
Net assets 364,161
Triple Point Social Housing REIT Plc is a UK Real Estate Investment
Trust ("REIT") investing in UK Social Housing assets, in particular
homes in the Supported Housing sector which have been adapted to provide
care and support to vulnerable tenants.
------------------------------------------------------------------------------------------------------------------
Perfectly Fresh Cheshire Ltd
Date of first investment Cost GBP Valuation Valuation Income Equity Equity
GBP* Method recognised Held by Held by
by TP Income TP Income TPIM managed
for the % funds
year GBP'000 %
21 November 2017 5,000,000 5,000,000 Cost - 49.97 49.97
Summary of Information from Investee Company Financial Statements: GBP'000
No financial information is available as the company
has not produced meaningful financial statements since
it signed its commercial agreements.
Perfectly Fresh Cheshire Ltd has constructed a pioneering vertical growing
facility. This facility will produce premium quality fresh salads and
herbs in indoor, laboratory-like conditions.
------------------------------------------------------------------------------------------------------------------
*The directors consider the fair value to be equivalent to the
cost of the investment.
Green Highland Renewables (Achnacarry)
Ltd
Date of first Cost GBP Valuation Valuation Income Equity Equity
investment GBP Method recognised Held by Held by
by TP Income TP Income TPIM managed
for the % funds %
year GBP'000
Discounted
13 August 2014 4,300,000 8,896,000 Cash Flow 106 40.65 40.65
Summary of Information from Investee Company Financial Statements GBP'000
ending in 2018:
Turnover 2,016
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 1,477
Profit before tax 832
Net assets before VCT loans 4,358
Net assets 3,068
Green Highland Renewables (Achnacarry) Ltd is operating three separate
run-of-river hydroelectric power plants located adjacent to Loch Arkaig
near Fort William. Having reached financial close in August 2014, the
Allt Dubh site (722kw) was commissioned in November 2015 with the Loch
Blair site (1,250kw) and the Cheanna Mhuir site (500kw) both successfully
commissioned in December 2015. The company earns Feed-in-Tariffs and
other revenues from the generation and export of electricity to the
National Grid.
Green Highland Allt Phocachain (1015)
Ltd
Date of first investment Cost GBP Valuation Valuation Income Equity Equity
GBP Method recognised Held by Held by
by TP Income TP Income TPIM managed
for the % funds %
year GBP'000
Discounted
13 November 2014 3,932,000 4,871,000 Cash Flow 343 42.70 100.00
Summary of Information from Investee Company Financial Statements GBP'000
ending in 2018:
Turnover 758
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 559
Loss before tax (114)
Net assets before VCT loans 3,892
Net assets 2,455
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 Ladaidh (1148)
Ltd
Date of first Cost GBP Valuation Valuation Income Equity Equity
investment GBP Method recognised Held by Held by
by TP Income TP Income TPIM managed
for the % funds %
year GBP'000
Discounted
20 March 2015 3,500,000 5,010,000 Cash Flow 294 35.17 50.25
Summary of Information from Investee Company Financial Statements GBP'000
ending in 2018:
Turnover 644
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 476
Loss before tax (109)
Net assets before VCT loans 4,452
Net assets 2,952
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 Choire A Bhalachain
(225) Ltd
Date of first Cost GBP Valuation Valuation Income Equity Equity
investment GBP Method recognised Held by Held by
by TP Income TP Income TPIM managed
for the % funds %
year GBP'000
Discounted
18 July 2014 3,130,000 3,642,000 Cash Flow 290 49.90 100.00
Summary of Information from Investee Company Financial Statements GBP'000
ending in 2018:
Turnover 457
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 331
Loss before tax (123)
Net assets before VCT loans 2,202
Net assets 1,257
Green Highland Allt Choire a Bhalachain (225) Ltd is currently operating
a 740kw run-of-river hydro-electric power plant located at Tomdoun,
Invergarry in the Scottish Highlands. The project started construction
in July 2014 and was commissioned on schedule in November 2015. The
company earns Feed-in-Tariffs and other revenues from the generation
and export of electricity to the National Grid.
Broadpoint 2 Ltd
Date of first investment Cost GBP Valuation Valuation Income Equity Equity
GBP* Method recognised Held by Held by
by TP Income TP Income TPIM managed
for the % funds %
year GBP'000
Discounted
12 February 2015 2,834,000 2,834,000 Cash Flow 235 49.00 98.00
Summary of Information from Investee Company Financial Statements GBP'000
ending in 2018:
Turnover -
Earnings before interest, tax, amortisation and depreciation
(EBITDA) (11)
Profit before tax 3
Net assets before VCT loans 3,370
Net liabilities (14)
Broadpoint 2 Ltd is a VCT non-qualifying investment, which has provided
funding to hydro-electric power companies.
-------------------------------------------------------------------------------------------------------------------
*The directors consider the fair value to be equivalent to the
par value.
Green Highland Allt Garbh Ltd
Date of first Cost GBP Valuation Valuation Income Equity Equity
investment GBP* Method** recognised Held by Held by
by TP Income TP Income TPIM managed
for the % funds %
year GBP'000
01 April 2015 2,710,000 2,710,000 Cost 176 27.46 50.25
Summary of Information from Investee Company Financial Statements GBP'000
ending in 2018:
Turnover 581
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 394
Loss before tax (85)
Net assets before VCT loans 4,752
Net assets 3,264
Green Highland Allt Garbh Ltd completed construction in August 2017
and is currently operating a run-of-river hydroelectric power plant
near Glen Affric, Cannich. The 1,500kW Allt Garbh scheme earns Feed-in-Tariffs
and other revenues from the generation and export of electricity to
the National Grid. It is in its first year of generation and is operating
in line with expectation.
-------------------------------------------------------------------------------------------------------
**The directors consider the valuation method used appropriate,
due to the drag along rights which exist in the Investment
Agreement between the Company and Green Highland Allt Garbh
Ltd.
Funding Path Ltd
Date of first investment Cost GBP Valuation Valuation Income Equity Equity
GBP Method recognised Held by Held by
by TP Income TP Income TPIM managed
for the % funds %
year GBP'000
Share
of Net
29 January 2016 2,200,000 2,200,000 Assets 154 49.00 98.00
Summary of Information from Investee Company Financial Statements GBP'000
ending in 2018:
Turnover 279
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 269
Profit before tax (40)
Net assets before VCT loans 3,116
Net liabilities (9)
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).
------------------------------------------------------------------------------------------------------------------
Elementary Energy Ltd
Date of first Cost GBP Valuation Valuation Income Equity Equity
investment GBP Method recognised Held by Held by
by TP Income TP Income TPIM managed
for the % funds %
year GBP'000
Discounted
18 March 2013 2,060,000 2,409,000 Cash Flow 199 49.93 99.22
Summary of Information from Investee Company Financial Statements GBP'000
ending in 2018:
Turnover 314
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 234
Loss before tax (27)
Net assets before VCT loans 1,865
Net assets 325
Elementary Energy Ltd is currently operating a 500kw run-of-river hydroelectric
power plant situated at Abhainn Shalachain river at Fiunary, Morven,
Scotland. The plant was commissioned in January 2015 and is operating
successfully earning Feed-in-Tariffs and other revenues from the generation
and export of electricity to the National Grid.
Strategic Report -Significant Influence and Control
The principal undertakings in which the Company's interest at
the year-end is 20% or more are as follows:
Name Registered address Holding
30 Camp Road, Farnborough, Hampshire,
Aeris Power Limited GU14 6EW 100.00%
1 King William Street, London, EC4N
Broadpoint 2 Limited 7AF 49.00%
------------------------------------------- ---------
30 Camp Road, Farnborough, Hampshire,
Digima Limited GU14 6EW 30.87%
------------------------------------------- ---------
Digital Screen Solutions 30 Camp Road, Farnborough, Hampshire,
Limited GU14 6EW 35.36%
------------------------------------------- ---------
1 King William Street, London, EC4N
Elementary Energy Limited 7AF 49.93%
------------------------------------------- ---------
1 King William Street, London, EC4N
Funding Path Limited 7AF 49.00%
------------------------------------------- ---------
Furnace Managed Services 30 Buckland Gardens, Ryde, Isle
Limited of Wight, PO33 3AG 40.05%
------------------------------------------- ---------
Green Energy for Education 1 King William Street, London, EC4N
Limited 7AF 50.00%
------------------------------------------- ---------
Green Highland Allt Choire Q Court, 3 Quality Street, Edinburgh,
A Bhalachain Limited EH4 5BP 49.90%
------------------------------------------- ---------
Green Highland Allt Garbh Inveralmond Road, Inveralmond Industrial
Limited Estate, Perth, PH1 3TW 27.46%
------------------------------------------- ---------
Green Highland Allt Ladaidh Q Court, 3 Quality Street, Edinburgh,
(1148) Limited EH4 5BP 35.17%
------------------------------------------- ---------
Green Highland Allt Luaidhe Q Court, 3 Quality Street, Edinburgh,
(228) Limited EH4 5BP 35.18%
------------------------------------------- ---------
Green Highland Allt Phochachain Q Court, 3 Quality Street, Edinburgh,
(1015) Limited EH4 5BP 42.70%
------------------------------------------- ---------
Green Highland Renewables Inveralmond Road, Inveralmond Industrial
(Achnacarry) Limited Estate, Perth, PH1 3TW 40.65%
------------------------------------------- ---------
Q Court, 3 Quality Street, Edinburgh,
Green Highland Shenval Limited EH4 5BP 28.16%
------------------------------------------- ---------
Q Court, 3 Quality Street, Edinburgh,
Green Peak Generation Limited EH4 5BP 48.26%
------------------------------------------- ---------
Perfectly Fresh Cheshire 1 King William Street, London, EC4N
Limited 7AF 49.97%
------------------------------------------- ---------
-- All investments are held in the UK.
-- The investments are a combination of debt and equity.
-- Equity holding is equal to the voting rights.
The Strategic Report has been approved by the Board and signed
on their behalf by the Chairman.
David Frank
Chairman
17 June 2019
Report of the Directors
The Directors present their Report and the audited Financial
Statements for the year ended 31 March 2019.
Details of Directors
David Frank was a partner in Slaughter and May for twenty-two
years before retiring from the firm in 2008. As well as being the
firm's first Practice Partner from 2001 to 2008, his practice
involved acting for several venture capital houses, including 3i
and Schroder Ventures. He was also involved in several flotations
in the venture capital sector, including 3i, Baronsmead and SVG
Capital. Since retiring from legal practice, he has established a
portfolio of voluntary roles. He has been a Director and Chairman
of the Company since 11 November 2010.
Simon Acland has over twenty-five years' experience in venture
capital, primarily at Quester, where he became Managing Director.
When Quester was sold in 2007 it had GBP200m under management and
was one of the leading UK venture capital and VCT investment
managers. Simon was a director of over 20 companies in Quester's
portfolio, many of which achieved successful exits through
flotation or trade sales. Simon is also a director of various other
private companies and charities, and a member of the investment
committee of the Angel Co-Fund. Simon is also an Executive Director
of Green Angel Syndicate, the UK's only business angel group
focussed on investing in the green economy. Simon was appointed a
Director on 12 March 2009.
Michael Stanes has been an Investment Director at Heartwood
Investment Management, a London-based firm providing investment
management and wealth structuring services for high net worth
individuals, since 2010. He began his career at Warburg Investment
Management (which became Mercury Asset Management) where he ran
equity portfolios in London and Tokyo. He then moved to the US
where he founded a business on behalf of Merrill Lynch offering
equity portfolio management to high net worth individuals. In 2002
he joined Goldman Sachs Asset Management in London running global
equity portfolios for a range of institutional and individual
clients before joining a new fund management partnership as CEO.
Michael was appointed a Director on 21 November 2012.
Simon Acland also sits on the TP Impact Enterprise Investment
Scheme ("EIS") Advisory Committee, therefore he is not considered
to be independent of the Investment Manager. The EIS Advisory
Committee is for an area of TPIMs business which is not directly
related to the Company, therefore the Board as a whole 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 34 to 36
which demonstrates the Board's compliance with the UK Corporate
Governance code.
Activities and Status
The Company is a Venture Capital Trust and its main activity is
investing. The Company has chosen to focus its investing activities
towards companies involved in renewable energy, energy production,
innovative vertical growing 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 6421083). The Directors have managed, and
intend to continue to manage, the Company's affairs in such a
manner as to comply with Section 274 of the Income Tax Act 2007
which grants approval as a VCT.
The Company was not at any time up to the date of this report a
close company within the meaning of S439 of the Corporation Tax Act
2010.
Post Balance Sheet Events
For details of post balance sheet events see note 20 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.
Matters Covered in the Strategic Report
Dividends and financial risk management have both been discussed
within the Strategic Report on pages 2,3 and 13.
Management
TPIM acts as Investment Manager to the Company. The principal
terms of the Company's management agreement with TPIM are set out
in note 5 to the Financial Statements.
The Board has evaluated the performance of the Investment
Manager based on the returns generated since taking on the
management of the Fund and a review of the management contract and
the services provided in accordance with its terms. As required by
the Listing Rules, the Directors confirm that in their opinion the
continuing appointment of TPIM as Investment Manager is in the best
interests of the shareholders as a whole. In reaching this
conclusion the Directors have taken into account the performance of
other VCTs managed by TPIM and the service provided by TPIM to the
Company.
Substantial Shareholdings
As at the date of this report no disclosures of major
shareholdings had been made to the Company under Disclosure and
Transparency Rule 5 (Vote Holder and Issuer Notification
Rules).
Global Greenhouse Gas Emissions
The Company has no greenhouse gas emissions to report from the
operations of the Company, nor does it have responsibility for any
other emission producing sources under the Companies Act 2006
(Strategic Report and Directors' Reports) Regulations 2013.
Annual General Meeting
Notice convening the 2019 Annual General Meeting of the Company
and a form of proxy in respect of that meeting can each be found at
the end of this document.
Share Capital, Rights Attaching to the Shares and Restrictions
on Voting and Transfer
The Company had in issue 13,441,438 C Ordinary Shares,13,701,636
D Ordinary Shares and 28,949,575 E Ordinary Shares at 31 March 2019
(see note 14). As at that date none of the issued shares were held
by the Company as treasury shares. Subject to any suspension or
abrogation of rights pursuant to relevant law or the Company's
articles of association, the shares confer on their holders (other
than the Company in respect of any treasury shares) the following
principal rights:
a) the right to receive out of profits available for
distribution such dividends as may be agreed to be paid (in the
case of a final dividend in an amount not exceeding the amount
recommended by the Board as approved by shareholders in general
meeting or in the case of an interim dividend in an amount
determined by the Board). All dividends unclaimed for a period of
12 years after having become due for payment are forfeited
automatically and cease to remain owing by the Company;
b) the right, on a return of assets on a liquidation, reduction
of capital or otherwise, to share in the surplus assets of the
Company remaining after payment of its liabilities pari passu with
other holders of ordinary shares of that class; and
c) the right to receive notice of and to attend and speak and
vote in person or on a poll by proxy at any general meeting of the
Company. On a show of hands every member present or represented and
voting has one vote and on a poll every member present or
represented and voting has one vote for every share of which that
member is the holder; the validly executed appointment of a proxy
must be received not less than 48 hours before the time of the
holding of the relevant meeting or adjourned meeting or, in the
case of a poll taken otherwise than at or on the same day as the
relevant meeting or adjourned meeting, be received after the poll
has been demanded and not less than 24 hours before the time
appointed for the taking of the poll.
These rights can be suspended. If a member, or any other person
appearing to be interested in shares held by that member, has
failed to comply within the time limits specified in the Company's
articles of association with a notice pursuant to S793 of the
Companies Act 2006 (notice by a Company requiring information about
interests in its shares), the Company can until the default ceases
suspend the right to attend and speak and vote at a general meeting
and if the shares represent at least 0.25% of their class the
Company can also withhold any dividend or other money payable in
respect of the shares (without any obligation to pay interest) and
refuse to accept certain transfers of the relevant shares.
Shareholders, either alone or with other shareholders, have
other rights as set out in the Company's articles of association
and in company law.
A member may choose whether his or her shares are evidenced by
share certificates (certificated shares) or held in electronic
(uncertificated) form in CREST (the UK electronic settlement
system). Any member may transfer all or any of his or her shares,
subject in the case of certificated shares to the rules set out in
the Company's articles of association or in the case of
uncertificated shares to the regulations governing the operation of
CREST (which allow the Directors to refuse to register a transfer
as therein set out); the transferor remains the holder of the
shares until the name of the transferee is entered in the register
of members. The Directors may refuse to register a share transfer
if it is in respect of a certificated share which is not fully paid
up or on which the Company has a lien provided that, where the
share transfer is in respect of any share admitted to the Official
List maintained by the UK Listing Authority, any such discretion
may not be exercised so as to prevent dealings taking place on an
open and proper basis, or if in the opinion of the Directors (and
with the concurrence of the UK Listing Authority) exceptional
circumstances so warrant, provided that the exercise of such power
will not disturb the market in those shares. Whilst there are no
squeeze-out and sell-out rules relating to the shares in the
Company's articles of association, shareholders are subject to the
compulsory acquisition provisions in S974 to S991 of the Companies
Act 2006.
Amendment of Articles of Association
The Company's articles of association may be amended by the
members of the Company by special resolution (requiring a majority
of at least 75% of the persons voting on the relevant
resolution).
Appointment and Replacement of Directors
A person may be appointed as a Director of the Company by the
shareholders in general meeting by ordinary resolution (requiring a
simple majority of the persons voting on the relevant resolution)
or by the Directors; no person, other than a Director retiring by
rotation or otherwise, shall be appointed or re-appointed a
Director at any general meeting unless he is recommended by the
Directors or, not less than seven nor more than 42 clear days
before the date appointed for the meeting, notice is given to the
Company of the intention to propose that person for appointment or
re-appointment in the form and manner set out in the Company's
articles of association.
Each Director who is appointed by the Directors (and who has not
been elected as a Director of the Company by the members at a
general meeting held in the interval since his appointment as a
Director of the Company) is to be subject to election as a Director
of the Company by the members at the first Annual General Meeting
of the Company following his or her appointment. At each Annual
General Meeting of the Company one third of the Directors for the
time being, or if their number is not three or an integral multiple
of three the number nearest to but not exceeding one-third, are to
be subject to re-election.
The Companies Act allows shareholders in general meeting by
ordinary resolution (requiring a simple majority of the persons
voting on the relevant resolution) to remove any Director before
the expiry of his or her period of office, but without prejudice to
any claim for damages which the Director may have for breach of any
contract of service between him or her and the Company.
A person also ceases to be a Director if he or she resigns in
writing, ceases to be a Director by virtue of any provision of the
Companies Act, becomes prohibited by law from being a Director,
becomes bankrupt or is the subject of a relevant insolvency
procedure, or becomes of unsound mind, or if the Board so decides
following at least six months' absence without leave or if he or
she becomes subject to relevant procedures under the mental health
laws, as set out in the Company's articles of association.
Powers of the Directors
Subject to the provisions of the Companies Act, the memorandum
and articles of association of the Company and any directions given
by shareholders by special resolution, the articles of association
specify that the business of the Company is to be managed by the
Directors, who may exercise all the powers of the Company, whether
relating to the management of the business or not. In particular,
the Directors may exercise on behalf of the Company its powers to
purchase its own shares to the extent permitted by
shareholders.
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
BDO LLP is the appointed auditor of the Company and offer
themselves for re-appointment. In accordance with section 489 (4)
of the Companies Act 2006 a resolution to reappoint 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.
David Frank
Director
17 June 2019
Directors' Responsibilities Statement
The Directors are responsible for preparing the Strategic
Report, the Directors' Report, the Directors' Remuneration Report
and the Financial Statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare Financial
Statements for each financial year. Under that law the Directors
have elected to prepare the Financial Statements in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union. Under company law the Directors must not
approve the Financial Statements unless they are satisfied that
they give a true and fair view of the state of affairs and profit
or loss of the Company for that year. In preparing these Financial
Statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable IFRS have been followed, subject to
any material departures disclosed and explained in the Financial
Statements; 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.
David Frank
Chairman
17 June 2019
Corporate Governance
This Corporate Governance Report forms part of the Directors'
Report on pages 29-32.
The Financial Conduct Authority requires through the listing
rules, 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 Income VCT 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 36 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.
The 2018 Corporate Governance code will apply from the next
financial reporting period. The Board are currently taking steps to
ensure the requirements of the code are met.
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 29 of this report. Directors
are provided with key information on the Company's activities,
including regulatory and statutory requirements, by the Investment
Manager. The Board has direct access to company secretarial advice
and compliance services provided by the Investment Manager which is
responsible for ensuring that Board procedures are followed and
applicable regulations complied with. All Directors are able to
take independent professional advice in furtherance of their
duties.
Any appointment of new Directors to the Board is conducted, and
appointments made, on merit and with due regard for the benefits of
diversity on the Board, including gender. All Directors are able to
allocate sufficient time to the Company to discharge their
responsibilities.
The Board meets regularly on a quarterly basis, and on other
occasions as required, to review the investment performance and
monitor compliance with the investment policy laid down by the
Board. There is a formal schedule of matters reserved for Board
decision and the agreement between the Company and the Investment
Manager has authority limits beyond which Board approval must be
sought.
The Investment Manager has authority over the management of the
investment portfolio, the organisation of custodial services,
accounting, secretarial and administrative services. In practice
the Investment Manager makes investment recommendations for the
Board's approval. In addition all investment decisions involving
other VCTs managed by the Investment Manager are taken by the Board
rather than the Investment Manager. Other matters reserved for the
Board include:
-- the consideration and approval of future developments or
changes to the investment policy, including risk and asset
allocation;
-- consideration of corporate strategy;
-- approval of any dividend or return of capital to be paid to the shareholders;
-- the appointment, evaluation, removal and remuneration of the Investment Manager;
-- the performance of the Company, including monitoring the net asset value per share; and
-- monitoring shareholder profiles and considering shareholder communications.
The Chairman leads the Board in the determination of its
strategy and in the achievement of its objectives. The Chairman is
responsible for organising the business of the Board, ensuring its
effectiveness and setting its agenda and has no involvement in the
day to day business of the Company. He facilitates the effective
contribution of the
Directors and ensures that they receive accurate, timely and
clear information and that they communicate effectively with
shareholders. The Chairman does not have significant commitments
conflicting with his obligations to the Company.
The Company Secretary is responsible for advising the Board on
all governance matters. All of the Directors have access to the
advice and services of the Company Secretary which has
administrative responsibility for the meetings of the Board and its
committees. Directors may also take independent professional advice
at the Company's expense where necessary in the performance of
their duties. As all of the Directors are Non-Executive, it is not
considered appropriate to identify a member of the Board as the
senior Non-Executive Director of the Company.
The Company's articles of association and the schedule of
matters reserved to the Board for decision provide that the
appointment and removal of the Company Secretary is a matter for
the full Board.
The Company's articles of association require that one third of
the Directors should retire by rotation each year and seek
re-election at the Annual General Meeting and that Directors newly
appointed by the Board should seek re-appointment at the next
Annual General Meeting. The Board complies with the requirement of
the UK Corporate Governance Code (April 2016) that all Directors
are required to submit themselves for re-election at least every
three years.
Under provision B.7.1 of the UK Corporate Governance Code
Non-Executive Directors who have served longer than nine years
should be subject to annual re-election. After the current period,
Simon Acland will have served as a Non-Executive Director for nine
years and will offer himself for re-election annually.
During the period covered by these Financial Statements the
following meetings were held:
Directors present 4 Full Board 2 Audit Committee
Meetings Meetings
David Frank, Chairman 4 2
Simon Acland 4 2
Michael Stanes 3 2
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; and
-- 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 Investment Manager and the
Directors believe that, as no material uncertainties leading to
significant doubt about going concern have been identified, it is
appropriate to continue to apply the going concern basis in
preparing the Financial Statements.
Relations with Shareholders
The Board recognises the value of maintaining regular
communications with shareholders. In addition to the formal
business of the Annual General Meeting, an opportunity is given to
all shareholders to question the Board and the Investment Manager
on matters relating to the Company's operation and performance. The
Board and the Investment Manager will also respond to any written
queries made by shareholders during the course of the year and both
can be contacted at 1 King William Street, London, EC4N 7AF 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. The UK Corporate Governance Code does,
however, acknowledge that some provisions may have less relevance
for investment companies, adding that the AIC Code and AIC Guide
can assist in meeting the obligations under The UK Corporate
Governance Code. 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). The section
references to The UK Corporate Governance Code are shown in
brackets.
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 with the exception of Simon
Acland. More information on this is included on page 29. David
Frank, 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
David Frank
Chairman
17 June 2019
Report of the Audit Committee
The Board has appointed an audit committee of which David Frank
is Chairman, which deals with matters relating to audit, financial
reporting and internal control systems. The Committee meets as
required and has direct access to 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 re-appointment of the
external auditor the audit committee considers their current fee
compared to the external audit fees paid by other similar
companies. The quality and competence of the external auditor is
also taken into consideration. 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. The first audit engagement for BDO LLP was for
the year ended 31 March 2018.
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 31 March 2019, the audit committee
discharged its responsibilities by:
-- 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 findings 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 unquoted 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 31 March 2019 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.
On behalf of the Board.
David Frank
Audit Committee Chairman
17 June 2019
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)
(amendment) Regulations 2013, in respect of the year ended 31 March
2019. 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.
The Company's auditor, BDO LLP, is required to give their
opinion on certain information included in this report; comprising
the Directors' emoluments section and their shareholdings below.
Their report on these and other matters is set out on pages 44 to
49.
Directors' Remuneration Policy Report
This statement of the Directors' Remuneration Policy was
effective following approval by shareholders at the Annual General
Meeting on 24 August 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 are shown below. The
Chairman is paid more than the other Directors to reflect the
additional responsibilities of that role. There are no other fees
payable to the Directors for additional services outside of their
contracts.
Unexpired term Policy on
of contract at Annual rate of payment of
Date of Contract 31 March 2019 Directors' fees loss of office
GBP
David Frank, Chairman 11-Nov-10 None 20,000 None
Simon Acland 12-Mar-09 None 17,500 None
Michael Stanes 21-Nov-12 None 17,500 None
----------------------- ----------------- ----------------- ------------------ -----------------
Annual Remuneration Report
The remuneration policy described above was approved on 24
August 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 31 March
2019 and the prior year are shown below:
Emoluments Emoluments
for the year for the year
ended 31 March ended 31 March
2019 2018
GBP GBP
David Frank 20,000 20,000
Simon Acland 17,500 17,500
Michael Stanes 17,500 17,500
55,000 55,000
Employers' NI contributions 1,102 1,210
Total Emoluments 56,102 56,210
------------------------------- -----------------
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:
Unaudited 31 March 2019 31 March 2018
GBP'000 GBP'000
Dividends paid:
* Ordinary Shareholders 12,615 1,460
* A Shareholders - 2,196
* C Shareholders 672 672
* D Shareholders 685 685
Total paid to shareholders 13,972 5,013
---------------
Directors' emoluments 56 56
------------------------------------ --------------- ----------------
Directors' Share Interests (audited information)
At 31 March 2019 the Directors held no shares in the Company
(2018: Nil). At 31 March 2019 Simon Acland's wife held 48,750 D
Class Shares (2018: 48,750). There have been no changes in the
holdings of the Directors or their connected parties between 31
March 2019 and the date of this report. There are no requirements
or restrictions on Directors holding shares in the Company.
Company Performance
The following performance graphs compare the Net Asset Value of
the Company's established share classes over the period from issue
to 31 March 2019 with the total return from a notional investment
in the FTSE Small-Cap index over the same period.
These charts have been prepared in accordance with part 3 to
schedule 8 of the Companies Act 2006. The Company measures its
performance against its target returns as detailed in the Strategic
Report on page 6.
** The charts above do not take in to account the tax benefit of
investing in a VCT.
Statement of Voting at the Annual General Meeting
The 2018 Remuneration Report was presented to the Annual General
Meeting in August 2018 and received shareholder approval following
a vote 99.9% of those voting were in favour and 4,899 shares
abstained.
The 2017 Remuneration Policy was presented to the Annual General
Meeting in August 2017 and received shareholder approval following
a vote 99.1% in favour and 30,143 shares abstained.
Statement of the Chairman
At 31 March 2019 the Directors' fees are fixed at GBP20,000 for
the Chairman and GBP17,500 for each of the other Directors. The
remuneration of the Directors reflects the experience of the Board
as a whole and is fair and comparable with that of other relevant
Venture Capital Trusts that are similar in size and have similar
investment objectives and structures.
On behalf of the Board
David Frank
Chairman
17 June 2019
Independent auditor's report to the members of Triple Point
Income VCT Plc
Opinion
We have audited the financial statements of Triple Point Income
VCT Plc (the 'company') for the year ended 31 March 2019, which
comprise the Statement of Comprehensive Income, the Balance Sheet,
the Statement of Changes in Shareholders' Equity, the Statement of
Cash Flows, and notes to the financial statements, including a
summary of significant accounting policies. We have not audited the
non-statutory information set out on pages 54-61 which does not
form part of the financial statements. The financial reporting
framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards (IFRSs) as
adopted by the European Union.
In our opinion the financial statements:
-- give a true and fair view of the state of the company's
affairs as at 31 March 2019 and of its profit for the year then
ended;
-- have been properly prepared in accordance with IFRSs as adopted by the European Union; and
-- have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
and the parent company in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the
UK, including the FRC's Ethical Standard as applied to listed
public interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Conclusions relating to principal risks, going concern and
viability statement
We have nothing to report in respect of the following
information in the annual report, in relation to which the ISAs
(UK) require us to report to you whether we have anything material
to add or draw attention to:
-- the disclosures in the annual report that describe the
principal risks and explain how they are being managed or
mitigated;
-- the directors' confirmation in the annual report that they
have carried out a robust assessment of the principal risks facing
the group, including those that would threaten its business model,
future performance, solvency or liquidity;
-- the directors' statement in the financial statements about
whether the directors considered it appropriate to adopt the going
concern basis of accounting in preparing the financial statements
and the directors' identification of any material uncertainties to
the group and the parent company's ability to continue to do so
over a period of at least twelve months from the date of approval
of the financial statements;
-- whether the directors' statement relating to going concern
required under the Listing Rules in accordance with Listing Rule
9.8.6R(3) is materially inconsistent with our knowledge obtained in
the audit; or
-- the directors' explanation in the annual report as to how
they have assessed the prospects of the group, over what period
they have done so and why they consider that period to be
appropriate, and their statement as to whether they have a
reasonable expectation that the group will be able to continue in
operation and meet its liabilities as they fall due over the period
of their assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of resources
in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
The valuation of investments in the underlying renewables
portfolio was the risk that had the greatest impact on our audit
strategy and scope, including the allocation of resources in the
audit.
Risk description How our audit addressed the risk
The valuation of investments is a highly In respect of the investments valued
subjective accounting estimate where using discounted cash flow models ("DCF")
there is an inherent risk of management (representing 61% of the portfolio),
override arising from the investment we performed the following specific
valuations being prepared by the Investment procedures:
Manager, who is remunerated based on
the net asset value of the company. * Challenged the appropriateness of the key assumptions
including discount factors, inflation, asset life,
90% of the underlying investment portfolio energy yield and power price applied by benchmarking
is represented by unquoted equity and to available industry data and consulting with our
loan stock. Further information is internal valuations specialists where appropriate
disclosed in notes 2 and 10 to the
financial statements.
* Vouched significant inputs to independent evidence
where appropriate
* Utilised spreadsheet analysis tools to assess the
integrity of the model
* Vouched cash and other net assets to bank statements
and investee company management accounts
* Considered the accuracy of forecasting by comparing
previous forecasts to actual results with regards to
the power generation assumptions included in the
model
* Formed an expectation of the acceptable range of
valuations based on the range of reasonably
alternative inputs and considered whether the
valuations were appropriate and within the acceptable
range
For those investments valued using
a methodology other than a DCF method
(representing 39% of the portfolio),
we performed the following procedures
* Considered whether the valuation methodology is the
most appropriate in the circumstances under the
International Private Equity and Venture Capital
Valuation ("IPEV") Guidelines and Accounting
standards
* Re-performed the calculation of the value
attributable to the company
* Verified and benchmarked key inputs and estimates to
independent information and our own research
* Reviewed and challenged the inputs to the valuation
and assessed the impact of the estimation uncertainty
concerning these assumptions.
-------------------------------------------------------------
Our application of materiality
We apply the concept of materiality both in planning and
performing our audit, and in evaluating the effect of
misstatements. For planning, we consider materiality to be the
magnitude by which misstatements, including omissions, could
influence the economic decisions of reasonable users that are taken
on the basis of the financial statements. Importantly,
misstatements below this level will not necessarily be evaluated as
immaterial as we also take account of the nature of identified
misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial
statements as a whole.
The quantum of the materiality level applied during our audit is
tabulated below.
Materiality Purpose Basis and Key Quantum 2018 Quantum
measure considerations (GBP) 2019 (GBP)
Financial statement Assessing whether 2% of the value GBP1,000,000 GBP1,140,000
materiality the financial of non- current
statements as asset investments
a whole present
a true and fair
view
-------------------------- --------------------------- ------------- -------------
Performance Lower level of Based on financial GBP650,000 GBP855,000
materiality materiality applied statement materiality,
in performance taking into consideration
of the audit when the risk and control
determining the environment and
nature and extent history of prior
of testing applied errors (if any)
to individual
balances and classes
of transactions.
-------------------------- --------------------------- ------------- -------------
Specific materiality Assessing those 10% of revenue GBP130,000 GBP220,000
- classes of classes of transactions, return before
transactions balances or disclosures tax
and balances for which misstatements
which impact of lesser amounts
on the realised than materiality
return for the financial
statements as
a whole could
reasonably be
expected to influence
the economic decisions
of users taken
on the basis of
the financial
statements.
-------------------------- --------------------------- ------------- -------------
Performance materiality is application of materiality at the
individual account or balance level set at an amount to reduce to
an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessment together with our assessment
of the company's overall control environment, our judgment was that
overall performance materiality for the company should be 75%
(2018: 65%).
We agreed with the Audit Committee that we would report to the
Audit Committee all audit differences in excess of GBP11,000, as
well as differences below that threshold that, in our view,
warranted reporting on qualitative grounds.
An overview of the scope of our audit
We carried out a full scope audit. Our audit approach was
developed by obtaining an understanding of the Company's activities
and the overall control environment. Based on this understanding we
assessed those aspects of the Company's transactions and balances
which were most likely to give rise to a material misstatement.
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the directors made
subjective judgements, for example in respect of the valuation of
investments which have a high level of estimation uncertainty
involved in determining the unquoted investment valuations.
We gained an understanding of the legal and regulatory framework
applicable to the company and the industry in which it operates and
considered the risk of acts by the company which were contrary to
applicable laws and regulations, including fraud. These included
but were not limited to compliance with Companies Act 2006, the FCA
listing and DTR rules, the principles of the UK Corporate
Governance Code, industry practice represented by the SORP and IFRS
accounting standards. We also considered the Company's
qualification as a VCT under UK tax legislation as any breach of
this would lead to the company losing various deductions and
exemptions from corporation tax.
We designed audit procedures to respond to the risk, recognising
that the risk of not detecting a material misstatement due to fraud
is higher than the risk of not detecting one resulting from error,
as fraud may involve deliberate concealment by, for example,
forgery, misrepresentations or through collusion.
We focused on laws and regulations that could give rise to a
material misstatement in the company financial statements. Our
tests included, but were not limited to:
-- agreement of the financial statement disclosures to underlying supporting documentation;
-- enquiries of management;
-- review of minutes of board meetings throughout the period; and
-- considering the effectiveness of control environment in
monitoring compliance with laws and regulations.
There are inherent limitations in the audit procedures described
above and the further removed noncompliance with laws and
regulations is from the events and transactions reflected in the
financial statements, the less likely we would become aware of it.
As in all of our audits we also addressed the risk of management
override of internal controls, including testing journals and
evaluating whether there was evidence of bias by the directors that
represented a risk of material misstatement due to fraud.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of the other information, we are required to report that fact.
We have nothing to report in this regard.
In this context, we also have nothing to report in regard to our
responsibility to specifically address the following items in the
other information and to report as uncorrected material
misstatements of the other information where we conclude that those
items meet the following conditions:
-- Fair, balanced and understandable - the statement given by
the directors that they consider the annual report and financial
statements taken as a whole is fair, balanced and understandable
and provides the information necessary for shareholders to assess
the group's performance, business model and strategy, is materially
inconsistent with our knowledge obtained in the audit; or
-- Audit committee reporting - the section describing the work
of the audit committee does not appropriately address matters
communicated by us to the audit committee; or
-- Directors' statement of compliance with the UK Corporate
Governance Code - the parts of the directors' statement required
under the Listing Rules relating to the company's compliance with
the UK Corporate Governance Code containing provisions specified
for review by the auditor in accordance with Listing Rule
9.8.10R(2) do not properly disclose a departure from a relevant
provision of the UK Corporate Governance Code.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, the part of the directors' remuneration report
to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
parent company and its environment obtained in the course of the
audit, we have not identified material misstatements in the
strategic report or the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements and the part of the
directors' remuneration report to be audited are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group's and the parent company's
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the
group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Other matters which we are required to address
Following the recommendation of the audit committee, we were
appointed by the Audit Committee in November 2017 to audit the
financial statements for the year ending 31 March 2018 and
subsequent financial periods. The period of total uninterrupted
engagement is 2 years, covering the years ending 31 March 2018 to
31 March 2019.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the company and we remain independent of the
company in conducting our audit.
Our audit opinion is consistent with the additional report to
the audit committee.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
parent company's members those matters we are required to state to
them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the parent
company's members as a body, for our audit work, for this report,
or for the opinions we have formed.
Peter Smith (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London
United Kingdom
17 June 2019
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
Statement of Comprehensive Income
For the year ended 31 March 2019
Year ended Year ended
31 March 2019 31 March 2018
------------------------------- -------------------------------
Note Rev. Cap. Total Rev. Cap. Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income
Investment income 4 2,923 - 2,923 2,620 - 2,620
Gain arising on the
disposal of investments
during the year 10 - 420 420 - 108 108
Gain arising on the
revaluation of investments
at the year end 10 - 5,049 5,049 - 2,096 2,096
Investment return 2,923 5,469 8,392 2,620 2,204 4,824
--------- --------- --------- --------- --------- ---------
Expenses
Investment management
fees 5 771 257 1,028 986 329 1,315
Financial and regulatory
costs 37 - 37 42 - 42
General administration 184 - 184 191 153 344
Legal and professional
fees 6 55 - 55 86 38 124
Directors' remuneration 7 55 - 55 56 - 56
Operating expenses 1,102 257 1,359 1,361 520 1,881
--------- --------- --------- --------- --------- ---------
Profit before taxation 1,821 5,212 7,033 1,259 1,684 2,943
Taxation 8 (264) 35 (229) (189) 99 (90)
Profit after taxation 1,557 5,247 6,804 1,070 1,783 2,853
--------- --------- --------- --------- --------- ---------
Profit and total comprehensive
income for the period 1,557 5,247 6,804 1,070 1,783 2,853
--------- --------- --------- --------- --------- ---------
Basic and diluted
earnings/(loss) per
share (pence)
Ordinary Share 9 0.13p (0.06p) 0.07p 0.73p 2.77p 3.50p
A Share 9 - - - (0.22p) 1.74p 1.52p
C Share 9 5.53p 21.21p 26.74p 5.02p 6.32p 11.34p
D Share 9 3.93p 10.43p 14.36p 3.85p 3.94p 7.79p
E Share 9 0.86p 3.38p 4.24p (0.92p) (0.78p) (1.70p)
The total column of this statement is the Statement of
Comprehensive Income of the Company prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union. The supplementary revenue return and capital
columns have been prepared in accordance with the Association of
Investment Companies Statement of Recommended Practice (AIC
SORP).
All revenue and capital items in the above statement derive from
continuing operations.
This Statement of Comprehensive Income includes all recognised
gains and losses.The accompanying notes are an integral part of
these statements.
Balance Sheet
at 31 March 2019
Company No: 0642108
31 March 2019 31 March 2018
Note GBP'000 GBP'000
Non-current assets
Financial assets at fair value
through profit or loss 10 56,937 52,144
--------------- ---------------
Current assets
Receivables 11 1,250 1,376
Cash and cash equivalents 12 6,188 18,448
7,438 19,824
--------------- ---------------
Total Assets 64,375 71,968
--------------- ---------------
Current liabilities
Payables and accrued expenses 13 327 659
Current taxation payable 193 91
520 750
--------------- ---------------
Net Assets 63,855 71,218
=============== ===============
Equity attributable to equity
holders of the parent
Share capital 14 561 756
Share redemption reserve - 2
Share premium 28,661 44,968
Special distributable reserve 26,887 23,968
Capital reserve 6,189 942
Revenue reserve 1,557 582
Total equity 63,855 71,218
=============== ===============
Net asset value per share n/a n/a
=============== ===============
Shareholder' funds
Ordinary Share 16 - 65.74p
A Share 16 - -
C Share 16 134.58p 112.84p
D Share 16 117.34p 107.98p
E Share 16 102.56p 98.32p
The statements were approved by the Directors and authorised for
issue on 17 June 2019 and are signed on their behalf by:
David Frank
Chairman
17 June 2019
The accompanying notes are an integral part of this
statement.
Statement of Changes in Shareholders' Equity
For the year ended 31 March 2019
Special
Issued Share Redemption Share Distributable Capital Revenue
Capital Reserve Premium Reserve Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 31
March
2019
Opening balance 756 2 44,968 23,968 942 582 71,218
---------- ------------------ ---------- ---------------- ---------- ---------- ----------
Cancellation of
shares (195) 195 - - - - -
Cancellation of
share
premium - - (16,307) 16,307 - - -
Dividends paid - - - (13,390) - (582) (13,972)
Transfer on share
redemption - (2) - 2 - - -
Repayment of
capital - (195) - - - - (195)
Transactions with
owners (195) (197) (16,307) 2,919 - (582) (14,167)
---------- ------------------ ---------- ---------------- ---------- ---------- ----------
Profit for the
year - - - - 5,247 1,557 6,804
Other
comprehensive
income - - - - - - -
Profit and total
comprehensive
income
for the year - - - - 5,247 1,557 6,804
---------- ------------------ ---------- ---------------- ---------- ---------- ----------
Balance at 31
March
2019 561 - 28,661 26,887 6,189 1,557 63,855
========== ================== ========== ================ ========== ========== ==========
Capital reserve
consists
of:
Investment holding
gains 8,671
Other realised
losses (2,482)
6,189
==========
Year ended 31
March
2018
Opening balance 518 2 16,307 27,301 (841) 1,192 44,479
---------- ------------------ ---------- ---------------- ---------- ---------- ----------
Issue of new
shares 289 - 29,441 - - - 29,730
Cost of issue - - (780) - - - (780)
Purchase of own
shares (51) - - - - - (51)
Dividend paid - - - (3,333) - (1,680) (5,013)
Transactions with
owners 238 - 28,661 (3,333) - (1,680) 23,886
---------- ------------------ ---------- ---------------- ---------- ---------- ----------
Profit for the
year - - - 1,783 1,070 2,853
Profit and total
comprehensive
income
for the year - - - 1,783 1,070 2,853
---------- ------------------ ---------- ---------------- ---------- ---------- ----------
Balance at 31
March
2018 756 2 44,968 23,968 942 582 71,218
========== ================== ========== ================ ========== ========== ==========
Capital reserve
consists
of:
Investment holding
gains 3,250
Other realised
losses (2,308)
942
==========
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 element of the capital reserve is not distributable. The
special distributable reserve was created on court cancellation of
the share premium account. The revenue, special distributable and
realised capital reserves are distributable by way of dividend.
At 31 March 2019 the total reserves available for distribution
are GBP25,962,000. This consists of the distributable revenue
reserve net of the realised capital loss and the special
distributable reserve.
Statement of Cash Flows
For the year ended 31 March 2019
Year ended Year ended
31 March
31 March 2019 2018
GBP'000 GBP'000
Cash flows from operating activities
Profit before taxation 7,033 2,943
(Gain) arising on the disposal of
investments during the period (420) (108)
(Gain) arising on the revaluation
of investments at the period end (5,049) (2,096)
Cashflow generated by operations 1,564 739
Decrease/(increase) in receivables 126 (210)
(Decrease)/increase in payables (332) 406
Cash flows from operating activities 1,358 935
--------------- ------------
Tax paid (127) (263)
Net cash flows from operating activities 1,231 672
--------------- ------------
Cash flow from investing activities
Purchase of financial assets at fair
value through profit or loss - (11,001)
Proceeds of sale of financial assets
at fair value through profit or loss 676 2,357
Net cash flows from investing activities 676 (8,644)
--------------- ------------
Cash flows from financing activities
Issue of new shares - 28,950
Repayment of capital (195) (51)
Dividends paid (13,972) (5,013)
Net cash flows from financing activities (14,167) 23,886
--------------- ------------
Net decrease/(increase) in cash and
cash equivalents (12,260) 15,914
=============== ============
Reconciliation of net cash flow to
movements in cash and cash equivalents
Opening cash and cash equivalents 18,448 2,534
Net (decrease)/increase in cash and
cash equivalents (12,260) 15,914
Closing cash and cash equivalents 6,188 18,448
=============== ============
The accompanying notes are an integral part of these
statements.
Unaudited Non-Statutory Analysis of - The Ordinary Share
Fund
Statement of Comprehensive
Income Year ended Year ended
31 March 2019 31 March 2018
-------------------------------- -------------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 23 - 23 382 - 382
Realised gain on investments - - - - 76 76
Unrealised gain on investments - - - - 639 639
Investment return 23 - 23 382 715 1,097
Investment management
fees 9 3 12 (175) (179) (354)
Other expenses - - - (30) (38) (68)
Profit before taxation 32 3 35 177 498 675
Taxation (6) (14) (20) (34) 41 7
Profit/(loss) after taxation 26 (11) 15 143 539 682
--------- --------- ---------- --------- --------- ---------
Profit and total comprehensive
income/(loss) for the
period 26 (11) 15 143 539 682
--------- --------- ---------- --------- --------- ---------
Basic and diluted earnings/(loss)
per share 0.13p (0.06p) 0.07p 0.73p 2.77p 3.50p
--------- --------- ---------- --------- --------- ---------
Balance Sheet Year ended Year ended
31 March 2019 31 March 2018
GBP'000 GBP'000
Non-current assets
Financial assets at fair
value through profit or
loss - 11,098
---------- ---------
Current assets
Receivables - 62
Cash and cash equivalents - 1,868
Corporation tax - 7
- 1,937
---------- ---------
Current liabilities
Payables - (240)
Corporation tax - -
---------- ---------
Net assets - 12,795
---------- ---------
Equity attributable to
equity holders - 12,795
---------- ---------
Net asset value per share - 65.74p
---------- ---------
Statement of Changes in
Shareholders' Equity
Year ended Year ended
31 March 2019 31 March 2018
GBP'000 GBP'000
Opening shareholders'
funds 12,795 13,573
Purchase of own shares (195) -
Profit for the period 15 682
Dividends paid (12,615) (1,460)
Closing shareholders'
funds - 12,795
---------- ---------
Investment Portfolio 31 March 2019 31 March 2018
-------------------------------------- ----------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted qualifying holdings - - - - 8,376 70.10 9,367 72.25
Unquoted non-qualifying
holdings - - - - 1,705 14.28 1,731 13.35
Financial assets at fair
value through profit or
loss - - - - 10,081 84.38 11,098 85.60
Cash and cash equivalents - - - - 1,868 15.62 1,868 14.40
- - - - 11,949 100.00 12,966 100.00
=========== ==== ============= ===== ========= ======== ========= ========
Qualifying Holdings
Unquoted
Solar
Digima Ltd - - - - 1,262 10.56 1,621 12.50
Digital Screen Solutions
Ltd - - - - 2,020 16.91 2,062 15.90
Solar
Green Energy for Education
Ltd - - - - 475 3.98 963 7.43
Hydroelectric Power
Elementary Energy Ltd - - - - 2,060 17.24 2,310 17.82
Green Highland Shenval
Ltd - - - - 359 3.00 211 1.63
Gas Power
Green Peak Generation
Ltd - - - - 2,200 18.41 2,200 16.97
- - - - 8,376 70.10 9,367 72.25
=========== ==== ============= ===== ========= ======== ========= ========
Non-Qualifying Holdings
Unquoted
Crematorium Management
Furnace Managed Services
Ltd - - - - 620 5.19 646 4.98
Hydroelectric Power
Elementary Energy Ltd - - - - 285 2.39 285 2.20
SME Funding
Hydroelectric Power:
Broadpoint 2 Ltd - - - - 350 2.93 350 2.70
Other:
Funding Path Ltd - - - - 450 3.77 450 3.47
- - - - 1,705 14.28 1,731 13.35
=========== ==== ============= ===== ========= ======== ========= ========
Unaudited Non-Statutory Analysis of - The C Ordinary Share
Fund
Statement of Comprehensive
Income
Year ended Year ended
31 March 2019 31 March 2018
------------------------------- -------------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 1,127 - 1,127 1,048 - 1,048
Unrealised gain on investments - 2,913 2,913 - 907 907
Investment return 1,127 2,913 4,040 1,048 907 1,955
Investment management
fees (273) (76) (349) (251) (72) (323)
Other expenses (39) - (39) (34) - (34)
Profit before taxation 815 2,837 3,652 763 835 1,598
Taxation (72) 14 (58) (88) 14 (74)
Profit after taxation 743 2,851 3,594 675 849 1,524
Profit and total comprehensive
income for the period 743 2,851 3,594 675 849 1,524
Basic and diluted earnings
per share 5.53p 21.21p 26.74p 5.02p 6.32p 11.34p
Balance Sheet Year ended Year ended
31 March 2019 31 March 2018
GBP'000 GBP'000
Non-current assets
Financial assets at
fair value through profit
or loss 17,415 14,590
Current assets
Receivables 83 187
Cash and cash equivalents 759 551
842 738
Current liabilities
Payables (103) (87)
Corporation tax (66) (75)
Net assets 18,088 15,166
Equity attributable
to equity holders 18,088 15,166
Net asset value per
share 134.58p 112.84p
Statement of Changes
in Year ended Year ended
Shareholders' Equity 31 March 2019 31 March 2018
GBP'000 GBP'000
Opening shareholders'
funds 15,166 14,314
Profit for the period 3,594 1,524
Dividends paid (672) (672)
Closing shareholders'
funds 18,088 15,166
Investment Portfolio 31 March 2019 31 March 2018
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted qualifying holdings 9,430 69.78 14,089 77.52 9,430 70.40 11,176 73.81
Unquoted non-qualifying
holdings 3,325 24.60 3,326 18.30 3,414 25.49 3,414 22.54
Financial assets at fair
value through profit or loss 12,755 94.38 17,415 95.82 12,844 95.89 14,590 96.35
Cash and cash equivalents 759 5.62 759 4.18 551 4.11 551 3.65
13,514 100.00 18,174 100.00 13,395 100.00 15,141 100.00
Qualifying Holdings
Unquoted
Hydroelectric Power
Green Highland Allt Choire
A Bhalachain (225) Ltd 3,130 23.16 3,642 20.04 3,130 23.37 3,504 23.14
Green Highland Allt Phocachain
(1015) Ltd 2,000 14.80 2,590 14.25 2,000 14.93 2,103 13.89
Green Highland Renewables
(Achnacarry) Ltd 4,300 31.82 7,857 43.23 4,300 32.10 5,569 36.78
9,430 69.78 14,089 77.52 9,430 70.40 11,176 73.81
Non-Qualifying Holdings
Unquoted
Hydroelectric Power
Green Highland Allt Choire
A Bhalachain (225) Ltd 289 2.14 289 1.59 318 2.37 318 2.10
Green Highland Allt Phocachain
(1015) Ltd 122 0.90 122 0.67 143 1.07 143 0.94
Green Highland Renewables
(Achnacarry) Ltd 26 0.19 27 0.15 65 0.49 65 0.43
SME Funding
Hydroelectric Power:
Broadpoint 2 Ltd 2,084 15.42 2,084 11.47 2,084 15.56 2,084 13.76
Broadpoint 3 Ltd 804 5.95 804 4.42 804 6.00 804 5.31
3,325 24.60 3,326 18.30 3,414 25.49 3,414 22.54
Unaudited Non-Statutory Analysis of - The D Ordinary Share
Fund
31 March 2019 31 March 2018
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 919 - 919 933 - 933
Unrealised gain on investments - 1,475 1,475 - 598 598
Investment return 919 1,475 2,394 933 598 1,531
Investment management
fees (215) (58) (273) (250) (71) (321)
Other expenses (38) - (38) (34) - (34)
Profit/(loss) before
taxation 666 1,417 2,083 649 527 1,176
Taxation (126) 11 (115) (124) 14 (110)
Profit after taxation 540 1,428 1,968 525 541 1,066
Profit and total comprehensive
income for the period 540 1,428 1,968 525 541 1,066
Basic and diluted earnings/(loss)
per share 3.93p 10.43p 14.36p 3.85p 3.94p 7.79p
Balance Sheet Year ended Year ended
31 March 2019 31 March 2018
GBP'000 GBP'000
Non-current assets
Financial assets at fair
value through profit
or loss 14,735 13,723
Current assets
Receivables 821 1,093
Cash and cash equivalents 719 253
1,540 1,346
Current liabilities
Payables (82) (165)
Corporation tax (116) (110)
Net assets 16,077 14,794
Equity attributable to
equity holders 16,077 14,794
Net asset value per share 117.34p 107.98p
Statement of Changes
in Year ended Year ended
Shareholders' equity 31 March 2019 31 March 2018
GBP'000 GBP'000
Opening shareholders'
funds 14,794 14,413
Profit for the period 1,968 1,066
Dividends paid (685) (685)
Closing shareholders'
funds 16,077 14,794
Investment Portfolio 31 March 2019 31 March 2018
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted qualifying holdings 11,240 84.23 13,349 86.39 10,899 81.68 11,532 82.51
Unquoted non-qualifying
holdings 1,386 10.39 1,386 8.96 2,191 16.43 2,191 15.67
Financial assets at fair value
through profit or loss 12,626 94.62 14,735 95.35 13,090 98.11 13,723 98.18
Cash and cash equivalents 719 5.38 719 4.65 253 1.89 253 1.82
13,345 100.00 15,454 100.00 13,343 100.00 13,976 100.00
========= ======== ========= ========= ======== ========= ========
Qualifying Holdings
Unquoted
Hydroelectric Power
Elementary Energy 342 2.56 400 2.59 - - - -
Green Highland Allt Garbh
Ltd 2,710 20.31 2,710 17.54 2,710 20.31 2,710 19.39
Green Highland Allt Ladaidh
(1148) Ltd 3,500 26.23 5,010 32.42 3,500 26.23 4,092 29.28
Green Highland Allt Luaidhe
(228) Ltd 1,995 14.95 2,407 15.58 1,996 14.96 2,165 15.49
Green Highland Allt Phocachain
(1015) Ltd 1,932 14.48 2,281 14.76 1,932 14.48 2,084 14.91
Green Highland Shenval Ltd 761 5.70 541 3.50 761 5.70 481 3.44
11,240 84.23 13,349 86.39 10,899 81.68 11,532 82.51
========= ======== ========= ========= ======== ========= ========
Non-Qualifying Holdings
Unquoted
Hydroelectric Power
Green Highland Allt Luaidhe
(228) Ltd 180 1.35 180 1.16 185 1.39 185 1.32
SME Funding
Hydroelectric Power:
Broadpoint 3 Ltd 1,206 9.04 1,206 7.80 1,206 9.04 1,206 8.63
Other:
Funding Path Ltd - - - - 800 6.00 800 5.72
1,386 10.39 1,386 8.96 2,191 16.43 2,191 15.67
========= ======== ========= ========= ======== ========= ========
Unaudited Non-Statutory Analysis of - The E Ordinary Share
Fund
Statement of Comprehensive
Income
Year ended Year ended
31 March 2019 31 March 2018
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 855 - 855 225 - 225
Realised gain on
investments - 420 420 - - -
Unrealised gain/(loss)
on investments - 660 660 - (113) (113)
Investment return 855 1,080 1,935 225 (113) 112
Investment management
fees (460) (126) (586) (483) (137) (620)
Other expenses (86) - (86) (67) - (67)
Profit/(loss) before
taxation 309 954 1,263 (325) (250) (575)
Taxation (59) 24 (35) 62 26 88
Profit/(loss) after
taxation 250 978 1,228 (263) (224) (487)
Profit/(loss) and
total comprehensive
income for the period 250 978 1,228 (263) (224) (487)
Basic and diluted
earnings/(loss) per
share 0.86p 3.38p 4.24p (0.92p) (0.78p) (1.70p)
Balance Sheet Year ended Year ended
31 March 2019 31 March 2018
GBP'000 GBP'000
Non-current assets
Financial assets
at fair value through
profit or loss 24,787 12,733
Current assets
Receivables 346 34
Cash and cash equivalents 4,711 15,776
Corporation tax - 87
5,057 15,897
Current liabilities
Payables (143) (167)
Corporation tax (10) -
Net assets 29,691 28,463
Equity attributable
to equity holders 29,691 28,463
Net asset value per
share 102.56p 98.32p
Statement of Changes
in Year ended Year ended
Shareholders' equity 31 March 2019 31 March 2018
GBP'000 GBP'000
Opening shareholders'
funds 28,463 -
Issue of new shares - 28,950
Profit for the period 1,228 (487)
Closing shareholders'
funds 29,691 28,463
Investment Portfolio 31 March 2019 31 March 2018
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted qualifying holdings 13,034 47.23 15,085 51.13 5,000 17.45 5,000 17.45
Quoted non-qualifying holdings 6,001 21.75 5,901 20.01 6,001 20.94 5,884 20.54
Unquoted non-qualifying
holdings 3,852 13.96 3,801 12.89 1,875 6.55 1,849 6.46
Financial assets at fair value
through profit or loss 22,887 82.94 24,787 84.03 12,876 44.94 12,733 44.45
Cash and cash equivalents 4,710 17.06 4,710 15.97 15,776 55.06 15,776 55.55
27,597 100.00 29,497 100.00 28,652 100.00 28,509 100.00
Qualifying Holdings
Unquoted
Solar
Digima Ltd 1,262 4.57 1,612 5.46 - - - -
Digital Screen Solutions Ltd 2,020 7.32 2,658 9.01 - - - -
Green Energy for Education
Ltd 475 1.72 1,127 3.82 - - - -
Hydroelectric Power
Elementary Energy Ltd 1,718 6.23 2,009 6.81 - - - -
Green Highland Shenval Ltd 359 1.30 256 0.87 - - - -
Gas Power
Green Peak Generation Ltd 2,200 7.97 2,423 8.21 - - - -
Vertical Growing
Perfectly Fresh Cheshire Ltd 5,000 18.12 5,000 16.95 5,000 17.45 5,000 17.45
13,034 47.23 15,085 51.13 5,000 17.45 5,000 17.45
Non-Qualifying Holdings
Quoted
Investment Property
TP Social Housing REIT Plc
Equity 6,001 21.75 5,901 20.01 6,001 20.94 5,884 20.54
6,001 21.75 5,901 20.01 6,001 20.94 5,884 20.54
Unquoted
Crematorium Management
Furnace Managed Services Ltd 496 1.80 103 0.35 - - - -
Hydroelectric Power
Elementary Energy Ltd 248 0.90 248 0.84 - - - -
SME Funding
Hydroelectric Power:
Broadpoint 2 Ltd 750 2.72 750 2.54 400 1.40 400 1.40
Other:
Funding Path Ltd 2,200 7.97 2,200 7.46 950 3.32 950 3.32
Aeris Power Ltd 158 0.57 500 1.70 525 1.83 499 1.74
3,852 13.96 3,801 12.89 1,875 6.55 1,849 6.46
Notes to the Financial Statements
1. Corporate Information
The Financial Statements of the Company for the year ended 31
March 2019 were authorised for issue in accordance with a
resolution of the Directors on 17 June 2019.
The Company was admitted for listing on the London Stock
Exchange on 6 February 2008.
The Company is incorporated and domiciled in Great Britain and
registered in England and Wales. The address of its registered
office, which is also its principal place of business, is 1 King
William Street, London EC4N 7AF.
The Company is required to nominate a functional currency, being
the currency in which the Company predominantly operates. The
functional and reporting currency is sterling, reflecting the
primary economic environment in which the Company operates.
The principal activity of the Company is investment. The
Company's investment strategy is 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 31 March
2019 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 ("FVTPL").
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.
New and amended standards and interpretations applied
IFRS 9 was issued to replace IAS 39 "Financial Instruments:
Recognition and Measurement" and became effective for accounting
periods beginning on or after 1 January 2018 and has been first
adopted in these financial statements.
The Company has chosen not to restate comparatives.
The Company's financial instruments predominantly comprise
equity and loan investments held at fair value through profit and
loss. Having considered the classification of the Company's
financial instruments by applying the business model test under
IFRS 9, it has been concluded that it is still appropriate for the
Company to hold its equity and loan investments at fair value
through profit and loss.
IFRS 15 "Revenue from contracts with customers" was issued and
became effective for accounting periods beginning on or after 1
January 2018. As the Company's investments are held at fair value
through profit or loss, the introduction of IFRS 15 has had no
impact on the reported results and financial position of the
Company.
New and amended standards and interpretations not applied
At the date of authorisation of these financial statements, IFRS
16 "Leases" was issued but will not become effective until
accounting periods beginning on or after 1 January 2019. As the
Company's investments are held at fair value through profit or loss
and any leases are held at investee company level, the introduction
of IFRS 16 is not expected to have a material impact on the
reported results and financial position of the Company.
Presentation of Statement of Comprehensive Income
In order to better 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 31 March 2019 was GBP63.8
million (2018: GBP71.2 million).
Non-Current Asset Investments
The Company invests in financial assets with a view to profiting
from their total return through income and capital growth. These
investments are managed, and their performance is evaluated on a
fair value basis in accordance with the investment policy detailed
in the Strategic Report on pages 6 and 7 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 classified by the Company as "at fair value through
profit or loss" in accordance with IFRS 9. 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.
The Board believe that those investments valued based on the
transaction price are done so because the transaction price is
still representative of fair value.
Where securities are classified 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 2017. 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. Fair value is
calculated on an unlevered, discounted cashflow basis or share of
net assets in accordance with IFRS 13 and IFRS 9.
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.
Property income includes tax which is withheld at source.
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 2017.
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.
An equity instrument is any contract that evidences a residual
interest in the assets of the entity after deducting all of its
financial liabilities.
Financial Instruments (continued)
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.
Financial assets and financial liabilities are recognised in the
Company's Statement of Financial Position when the Company becomes
a party to the contractual provisions of the instrument. At 31
March 2019 and 2018 the carrying amounts of cash and cash
equivalents, receivables, payables, accrued expenses and short-term
borrowings reflected in the financial statements are reasonable
estimates of fair value in view of the nature of these instruments
or the relatively short period of time between the original
instruments and their expected realisation.
Issued Share Capital
Ordinary Shares, C Shares, D Shares and E 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 and subject to an insignificant risk of
changes in fair value are classified at amortised cost.
Reserves
The revenue reserve (retained earnings) and capital reserve
reflect the guidance in the AIC SORP 2017. The capital reserve
represents the proportion of Investment Management fees charged
against capital and realised/unrealised gains or losses on the
disposal/revaluation of investments. The unrealised capital
reserve, share redemption reserve and share premium reserve are not
distributable. The special distributable reserve was created on
court cancellation of the share premium account. The revenue,
special distributable and realised capital reserves are
distributable by way of dividend.
Consolidated Financial Statements
The Directors have concluded that the Company has control over
two companies in which it has invested, as prescribed by IFRS 10
"Consolidated Financial Statements". The Company continues to
satisfy the criteria to be regarded as an investment entity as
defined in IFRS 10.
Subsidiaries are therefore measured at fair value through profit
or loss, in accordance with IFRS 13 "Fair Value measurement" and
IFRS 9 "Financial Instruments".
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
Ord Shares A Shares C Shares D Shares E Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 31 March 2019
Loan stock interest 4 - 733 918 531 2,186
Dividends receivable - - 393 - - 393
Interest receivable on
bank balances 19 - 1 1 42 63
Other Investment income - - - - 123 123
Property income - - - - 158 158
23 - 1,127 919 854 2,923
Ord Shares A Shares C Shares D Shares E Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 31 March 2018
Loan stock interest 379 31 748 933 93 2,184
Dividends receivable - - 299 - - 299
Interest receivable on
bank balances 3 1 1 - 103 108
Other Investment income - - - - 9 9
Property income - - - - 20 20
382 32 1,048 933 225 2,620
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 6
February 2008 and deeds of variation to that agreement effective 21
November 2012, 28 October 2014 and 7 October 2016.
C shares: The agreement provides for an administration and
investment management fee of 2% per annum of net assets payable
quarterly in arrear for an appointment of at least six years from
the admission of those shares. Subject to distributions to the C
Shareholders exceeding the C Share hurdle of 100 pence per share,
the Investment Manager will be entitled to a performance incentive
fee of 20%.
D shares: The agreement provides for an administration and
investment management fee of 2% per annum of net assets payable
quarterly in arrear for an appointment of at least six years from
the admission of those shares. Subject to distributions to the D
Shareholders exceeding the D Share hurdle of 100 pence per share,
the Investment Manager will be entitled to a performance incentive
fee of 20%.
E shares: The agreement provides for an administration and
investment management fee of 2% per annum of net assets payable
quarterly in arrear for an appointment of at least six years from
the admission of those shares. Subject to distributions to the E
Shareholders exceeding the E Share hurdle of 100 pence per share,
the Investment Manager will be entitled to a performance incentive
fee of 20%.
To date there have been no performance fees paid.
An administration fee equal to 0.25% per annum of the Company's
net assets is payable quarterly in arrear.
Ord Shares A Shares C Shares D Shares E Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 31 March
2019
Investment Management
fees (12) - 305 231 504 1,028
(12) - 305 231 504 1,028
Year ended 31 March
2018
Investment Management
fees 191 3 287 285 549 1,315
191 3 287 285 549 1,315
Fees paid to the Investment Manager for administrative and other
services during the year were GBP177,000 (2018: GBP331,000). The
investment Manager also received fees of GBPNil (2018: GBP145,961)
for services provided to investee companies. During the year TPIM
waived management fees in the sum of GBP84,849 in relation to the
Company's investment in Green Highland Shenval Ltd.
Disclosure by share class is unaudited
6. Legal and Professional Fees
Legal and professional fees include remuneration paid to the
Company's auditor, BDO LLP as shown in the following table:
Ord Shares A Shares C Shares D Shares E Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 31 March
2019
Fees payable to the
Company's auditor:
- for the audit of
the financial statements - - 6 7 16 29
- - 6 7 16 29
Year ended 31 March
2018
Fees payable to the
Company's auditor:
- for the audit of
the financial statements 5 1 5 5 11 27
5 1 5 5 11 27
Disclosure by share class is unaudited
7. Directors' Remuneration
Ord Shares A Shares C Shares D Shares E Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 31 March 2019
David Frank - - 5 5 10 20
Simon Acland - - 4 4 10 18
Michael Stanes - - 4 3 10 17
- - 13 12 30 55
Year ended 31 March 2018
David Frank 4 - 4 4 8 20
Simon Acland 3 - 4 3 8 18
Michael Stanes 3 1 3 4 7 18
10 1 11 11 23 56
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.
Disclosure by share class is unaudited
8. Taxation
Ord Shares A Shares C Shares D Shares E Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 31 March 2019
Profit on ordinary activities
before tax 35 - 3,652 2,083 1,263 7,033
Corporation tax @ 19% 7 - 694 396 240 1,337
Effect of:
Capital (gains) not taxable - - (553) (280) (205) (1,038)
Income received not taxable - - (75) - - (75)
Unrelieved tax losses arising
in the year - - - - (1) (1)
Prior year adjustment 13 - (7) - - 6
Tax charge/(credit) 20 - 59 116 34 229
Year ended 31 March 2018
Profit/(loss) on ordinary
activities before tax 675 69 1,598 1,176 (575) 2,943
Corporation tax @ 20% 129 13 304 224 (110) 560
Effect of:
Capital (gains) not taxable (136) (18) (173) (114) 22 (419)
Income received not taxable - - (57) - - (57)
Disallowed expenditure - 6 - - - 6
Tax charge (7) 1 74 110 (88) 90
Capital gains and losses are exempt from corporation tax due to
the Company's status as a Venture Capital Trust.
Disclosure by share class is unaudited
9. Earnings/(loss) per Share
On 26 February 2019, the Ordinary Shares were cancelled. During
the period to cancellation the profit per Ordinary Share was 0.07p
(2018: 3.50p) and was based on a profit from ordinary activities
after tax of GBP15,000 (2018: GBP682,000) and on the weighted
average number of Ordinary Shares in issue during the period of
17,650,117 (2018: 19,463,120).
Earnings per C Share are 26.74p (2018: 11.34p) based on the
profit after tax of 3,593,000 (2018: GBP1,524,000) and on the
weighted average number of shares in issue during the period of
13,441,438 (2018: 13,441,438).
Earnings per D Share are 14.37p (2018: 7.79p) based on the
profit after tax of GBP1,967,000 (2018: GBP1,066,000) and on the
weighted average number of shares in issue during the period of
13,701,636 (2018: 13,701,636).
Earnings per E Share are 4.24p (2018: loss per share 1.70p)
based on the profit after tax of GBP1,226,000 (2018: loss after tax
GBP487,000) and on the weighted average number of shares in issue
during the period of 28,949,575 (2018: 28,536,456).
With the exception of the Ordinary Shares, the weighted average
number of shares are equal to the number of shares in issue at 31
March 2019.
Other than the cancellation of the Ordinary Shares there were no
other changes to the number of shares in issue during the year.
There are no potentially dilutive capital instruments in issue
and, therefore, no diluted return per share figures are included in
these Financial Statements.
Disclosure by share class is unaudited
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, with the
exception of the investment in Triple Point Social Housing REIT Plc
which is classified as level 1. Further details of the types of
investments are provided in the Investment Manager's Review on
pages 16 to 20.
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.
Unconsolidated subsidiaries consist of Aeris Power Limited,
included in investments as per the company's accounting policy. The
Company has a loan investment totalling GBP157,500 in this company.
The loan has an interest rate of 11.66%.
Valuation techniques and unobservable
inputs:
Inter relationship
between significant
Significant unobservable unobservable inputs
Sector Valuation Techniques inputs and fair value 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.
(2018: 7.25%)
* Inflation rate: OBR 5-year forecast, * The inflation rate was higher/(lower)
2.75% long term
(2018: 2.5%).
Gas Power
* Discounted cash flows: The valuation model considers * Discount rate 8.5% * The discount rate was lower/(higher)
the present value of expected payment, discounted
using a risk-adjusted discount rate.
(2018: n/a)
* Inflation rate: OBR 5-year forecast,
2.75% long term * The inflation rate was higher/(lower)
(2018: n/a).
Solar
* Discounted cash flows: The valuation model considers * Discount rate 6.75% (2018: 6.75%) * The discount rate was lower/(higher)
the present value of expected payment, discounted
using a risk-adjusted discount rate.
* Inflation rate: OBR 5-year forecast, * The inflation rate was higher/(lower)
2.75% long
term(2018: 2.5%).
IPEV issued updated valuations guidance in December 2018 and
removed cost and price of recent investment as recognised primary
valuation methodologies. No investments remain valued at cost, with
the exception of Perfectly Fresh Cheshire Ltd. In the Board's
opinion, having followed guidance in the IPEV guidelines, fair
value is deemed to still be represented by the price on the date of
transaction.
At the year end, the Company valued its Gas Power asset on a
discounted cash flow basis for the first time, having been
previously held at cost. This resulted in an uplift in valuation of
GBP223,000 representing the decrease in construction risk. The
Board consider the change appropriate as the company has been
operational for just under 12 months. This has allowed forecasts to
be assessed for reasonableness against the trading performance of
the assets to date.
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 and P50
because the directors believe the asset life assumptions and
discount rate applied interact appropriately with one another to
give an appropriate valuation.
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 GBP1,500,923 or 2.63% per cent. Using the upside
alternative, the aggregate value of the unquoted investments would
be an increase of GBP3,413,217 or 5.99% 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.
The gain on disposal included in the Statement of Comprehensive
Income relates to a redemption premium received from Furnace
Managed Services Limited.
Movements in investments held at fair value through the profit
or loss during the year to 31 March 2019 were as follows:
Year ended 31 March
2019
Level 1 Quoted Investments
Ord Shares A Shares C Shares D Shares E Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening cost - - - - 6,001 6,001
Opening investment
holding gains - - - - (117) (117)
Opening fair value - - - - 5,884 5,884
Investment holding
gains - - - - 17 17
Closing fair value
at 31 March 2019 - - - - 5,901 5,901
Closing cost - - - - 6,001 6,001
Closing investment
holding gains - - - - (100) (100)
Year ended 31 March
2019 Level 3 Unquoted Investments
Ord Shares A Shares C Shares D Shares E Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening cost 10,081 - 12,844 13,089 6,875 42,889
Opening investment
holding gains 1,017 - 1,746 634 (26) 3,371
Opening fair value 11,098 - 14,590 13,723 6,849 46,260
Transfers between
share classes (11,098) - - (457) 11,555 -
Disposal proceeds - - (89) (6) (581) (676)
Realised gains - - - - 420 420
Investment holding
gains - - 2,913 1,475 643 5,031
Closing fair value
at 31 March 2019 - - 17,414 14,735 18,886 51,035
Closing cost - - 12,755 12,626 16,883 42,264
Closing investment
holding gains - - 4,659 2,109 2,003 8,771
Year ended 31 March
2018 Level 1 Quoted Investments
Ord Shares A Shares C Shares D Shares E Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening cost - - - - - -
Opening investment
holding gains - - - - - -
Opening fair value - - - - - -
Purchases at cost - - - - 6,001 6,001
Investment holding
gains - - - - (117) (117)
-
Closing fair value
at 31 March 2018 - - - - 5,884 5,884
Closing cost - - - - 6,001 6,001
Closing investment
holding gains - - - - (117) (117)
Year ended 31 March
2018 Level 3 Unquoted Investments
Ord Shares A Shares C Shares D Shares D Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening cost 11,111 950 13,321 13,089 - 38,471
Opening investment holding
gains 594 7 839 36 - 1,476
Opening fair value 11,705 957 14,160 13,125 - 39,947
Transfers between share
classes - (1,446) (400) - 1,846 -
Purchases at cost - - - - 5,000 5,000
Disposal proceeds (1,322) (7) (77) - - (1,406)
Realised gains/(losses) 76 7 - - - 83
Investment holding losses 639 65 907 598 3 2,212
Reclassification from
assets held for sale - 424 - - - 424
Closing fair value at
31 March 2018 11,098 - 14,590 13,723 6,849 46,260
Closing cost 10,081 - 12,844 13,089 6,875 42,889
Closing investment holding
losses 1,017 - 1,746 634 (26) 3,371
All investments are designated as fair value through profit or
loss at the time of acquisition and all capital gains or losses
arising on investments are so designated. Given the nature of the
Company's venture capital investments, the changes in fair values
of such investments recognised in these Financial Statements are
not considered to be readily convertible to cash in full at the
balance sheet date and accordingly any gains 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
16-27, and details of entities over which the VCT has significant
influence are included on page 28.
Disclosure by share class is unaudited
11. Receivables
Ord Shares A Shares C Shares D Shares E Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
31 March 2019
Other debtors - - 78 816 270 1,164
Prepayments and
accrued income - - 5 5 76 86
- - 83 821 346 1,250
31 March 2018
Other debtors 60 - 185 1,091 - 1,336
Prepayments and
accrued income 2 - 2 2 34 40
62 - 187 1,093 34 1,376
Other debtors relate to interest receivable on investment
loans.
12. Cash and Cash Equivalents
Cash and cash equivalents comprise deposits with The Royal Bank
of Scotland plc and Cater Allen Private Bank.
13. Payables and Accrued Expenses
Ord Shares A Shares C Shares D Shares E Shares Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
31 March 2019
Payables - - 91 72 123 286
Other taxes - - 2 2 3 7
Accrued expenses - - 10 8 16 34
- - 103 82 142 327
31 March 2018
Payables 52 - 80 158 153 443
Other taxes 1 - 1 1 3 6
Accrued expenses 187 - 6 6 11 210
240 - 87 165 167 659
Disclosure by share class is unaudited
14. Share Capital
31 March 2019 31 March 2018
Ordinary Shares of GBP0.01
each
Issued & Fully Paid
No. Of Shares - 19,463,120
Par Value GBP'000 - 195
C Ordinary Shares of GBP0.01
each
Issued & Fully Paid
Number of shares 13,441,438 13,441,438
Par Value GBP'000 134 134
D Ordinary Shares of GBP0.01
each
Issued & Fully Paid
Number of shares 13,701,636 13,701,636
Par Value GBP'000 137 137
E Ordinary Shares of GBP0.01
each
Issued & Fully Paid
Number of shares 28,949,575 28,949,575
Par Value GBP'000 290 290
Total Shares of GBP0.01 each
Issued & Fully Paid
Number of shares 56,092,649 75,555,769
Par Value GBP'000 561 756
The rights attached to each class of share are disclosed in the
Directors' Report on pages 30 and 31.
On 26 February 2019 the Ordinary Shares were cancelled.
15. 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 pages 6 and 7.
The following table discloses the financial assets and
liabilities of the Company in the categories defined by IFRS 9,
"Financial Instruments".
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.
Financial Financial Designated
assets held liabilities at fair value
at amortised held at amortised through profit
Total value cost cost or loss
31 March 2019
Assets:
Financial assets at fair
value through profit
or loss 56,937 - - 56,937
Receivables 1,164 1,164 - -
Cash and cash equivalents 6,188 6,188 - -
64,289 7,352 - 56,937
Liabilities:
Other payables 286 - 286 -
Accrued expenses 34 - 34 -
320 - 320 -
31 March 2018
Assets:
Financial assets at fair
value through profit
or loss 52,144 - - 52,144
Receivables 1,336 1,336 - -
Cash and cash equivalents 18,448 18,448 - -
71,928 19,784 - 52,144
Liabilities:
Other payables 443 - 443 -
Accrued expenses 210 210 -
653 - 653 -
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 21 to 27.
The Directors have considered the impact of an increase or
decrease in the power price assumptions across the Hydro portfolio.
The power prices have been stressed by 5%, 5% was chosen to
represent a potential significant move in power prices. A 5%
increase in power prices across the portfolio would lead to an
increase of GBP417,507 in the value of the unquoted investment
portfolio. A reduction of 5% in power prices would result in a
decrease of GBP417,507 of the unquoted investment portfolio.
An increase of 1% in the value of investments would increase the
capital profits for the period and the net asset value at 31 March
2019 by GBP569,000 A decrease of 1% would reduce the capital
profits and net asset value by the same amount. A movement of 1% is
used as a multiple to demonstrate the impact of varying changes on
the capital profits and net asset value of the Company.
Interest Rate Risk
Some of the Company's financial assets are interest bearing, of
which some are at fixed rates and some at variable rates. As a
result, the Company is exposed to interest rate risk arising from
fluctuations in the prevailing levels of market interest rates.
Investments made into qualifying holdings are part equity and
part loan. The loan element of investments totals GBP12,239,000
(2018: GBP12,239,000) 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
GBP8,067,000 (2018: GBP8,272,000) 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:
31 March
31 March 2019 2018
GBP'000 GBP'000
Cash on deposit 6,188 18,448
6,188 18,448
An increase in interest rates of 1% per annum would not have a
material effect either on the revenue for the year or the net asset
value at 31 March 2019. The Board believes that in the current
economic climate a movement of 1% is a reasonable illustration.
Credit Risk
Credit risk is the risk that a counterparty will fail to
discharge an obligation or commitment that it has entered into with
the Company. The Investment Manager and the Board carry out a
regular review of counterparty risk. The carrying value of the
financial assets represent the maximum credit risk exposure at the
balance sheet date.
31 March 2019 31 March 2018
GBP'000 GBP'000
Qualifying Investment loans 26,215 12,239
Non-Qualifying Investment
loans 14,411 8,272
Cash on deposit 6,188 18,448
Receivables 1,164 1,336
47,969 40,295
The Company's loan to Broadpoint 3 Limited was due for repayment
on 31 March 2019. After discussions between the Board of the
Company and that of Broadpoint 3 Limited, it was agreed to extend
the due date on a rolling basis to be repayable on demand. Any
impact of this extension has been considered in deriving the fair
value of the instrument.
No other issues have been identified which would be cause for
concern with regards the quality of credit for any other investee
company.
The Company's bank accounts are maintained with The Royal Bank
of Scotland plc ("RBS") and Cater Allen Private Bank. Should the
credit quality or financial position of RBS or Cater Allen
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 31 March 2019 cash amounted to GBP6,188,000 (2018:
GBP18,448,000).
Foreign Currency Risk
The Company does not have exposure to material foreign currency
risks.
16. Net Asset Value per Share
The net asset value per C Ordinary Share is 134.58p (2018:
112.84p) and is based on Net Assets of GBP18,088,000 (2018:
GBP15,166,000) divided by the 13,441,438 (2018: 13,441,438) C
Ordinary Shares in issue.
The net asset value per D Ordinary Share is 117.34p
(2018:107.98p) and is based on Net Assets of GBP16,077,000 (2018:
GBP14,794,000) divided by the 13,701,636 (2018: 13,701,636) D
Ordinary Shares in issue.
The net asset value per E Ordinary Share is 102.56p (2018:
98.32p) and is based on Net Assets of GBP29,610,000 (2018:
GBP28,463,000) divided by the 28,949,575 (2018:28,949,575) A
Ordinary Shares in issue.
17. Relationship with Investment Manager
During the period, TPIM received GBP1,195,410 which has been
expensed (2018: GBP1,640,212) for providing management and
administrative services to the Company. At 31 March 2019 GBP284,451
was owing to TPIM (2018: GBP443,427). During the year TPIM waived
management fees in the sum of GBP84,849 in relation to the
Company's investment in Green Highland Shenval Ltd.
18. Related Party Transactions
The Directors' Remuneration Report on pages 39 to 43 discloses
the Directors' remuneration and shareholdings.
There were no other related party transactions during the
period.
19. Post Balance Sheet Events
There were no other post balance sheet events.
20. Dividends
Ordinary Shares:
The Company paid dividends to Ordinary Class Shareholders of
GBP11,821,899, equal to 60.74p per share and GBP792,149 equal to
4.07 p per share on the 26 July 2018 and 14 December respectively.
The final 1.00p of capital was repaid to Shareholders on 22 March
2019.
C Shares:
The Company paid a dividend to C Class Shareholders of
GBP672,072, equal to 5p per share, on 26 July 2018. The Board has
resolved to pay a fourth dividend of GBP672,072 equal to 5p per
share on 25 July 2019 to shareholders on the register on 12 July
2019.
D Shares:
The Company paid a dividend to D Class Shareholders of
GBP685,082, equal to 5p per share, on 26 July 2018. The Board has
resolved to pay a third dividend of GBP685,082 equal to 5p per
share on 25 July 2019 to shareholders on the register on 12 July
2019.
Information
Details of Advisers
Secretary and Registered Office:
Triple Point Investment Management LLP
1 King William Street
London
EC4N 7AF
Registered Number
07324448
FCA Registration number
659605
Investment Manager and Administrator
Triple Point Investment Management LLP
1 King William Street
London
EC4N 7AF
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
Steelpark Road
Halesowen
West Midlands
B62 8HD
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 Income VCT plc (formerly TP70 2008(I) VCT plc) is a
Venture Capital Trust. The Investment Manager is Triple Point
Investment Management LLP.
Financial Calendar
The Company's financial calendar is as follows:
26 July 2019 Annual General Meeting.
November 2019 Interim report for the six months ending 30 September 2019 despatched.
June 2020 Results for the year to 31 March 2020 announced;
Annual Report and Financial
Statements published.
Notice of Annual General Meeting
NOTICE is hereby given that the Annual General Meeting of Triple
Point Income VCT plc will be held at 1 King William Street, EC4N
8AD at 10.00am on Friday 26 July 2019, for the following
purposes:
Ordinary Business
1. To receive, consider and adopt the Report of the Directors
and Financial Statements for the year ended 31 March 2019 together
with the Independent Auditors Report thereon (Ordinary
Resolution).
2. To approve the Directors' Remuneration Report for the year
ended 31 March 2019 (Ordinary Resolution).
3. To re-elect Simon Acland as a Director (Ordinary
Resolution).
4. To re-elect Michael Stanes as a Director (Ordinary
Resolution).
5. To re-appoint BDO LLP as auditor and determine their
remuneration (Ordinary Resolution).
Special Business
6. 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 C
Shares, D Shares and E Shares provided that:
(i) the maximum aggregate number of C Shares authorised to be
purchased is an amount equal to 10% of the issued C Shares as at
the date of this Resolution;
(ii) the maximum aggregate number of D Shares authorised to be
purchased is an amount equal to 10% of the issued D Shares as at
the date of this Resolution;
(iii) the maximum aggregate number of E Shares authorised to be
purchased is an amount equal to 10% of the issued E Shares as at
the date of this Resolution;
(iv) the minimum price which may be paid for a C Share, D Share or E Share is 1 pence;
(v) the maximum price which may be paid for a C Share, D Share
or E Share is an amount, exclusive of expenses, equal to 105 per
cent. of the average of the middle market prices for the C Shares,
D Shares or E 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 C Share, D Share or E Shares (as
applicable) is purchased; and
(vi) 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
David Frank
Director
Registered Office:
1 King William Street
London
EC4N 7AF
17 June 2019
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, Steelpark Road, Halesowen, West
Midlands B62 8HD, 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) Only those members registered in the Company's Register of
Members 48 hours before the Meeting (or in the event of an
adjournment, 48 hours prior to the adjourned meeting) or their duly
appointed proxy, shall be entitled to attend or vote at the
Meeting. Such shareholders may only cast votes in respect of Shares
held by them at such time.
(iv) Copies of the service contracts of each of the Directors,
the register of Directors' interests in shares of the Company kept
in accordance with the Listing Rules and a copy of the Memorandum
and Articles of Association of the Company, will be available for
inspection at the registered office of the Company during usual
business hours on any week day (Saturdays, Sundays and public
holidays excepted) from the date of this notice until the date of
the Annual General Meeting and at the place of the Annual General
Meeting from at least 15 minutes prior to and until the conclusion
of the Annual General Meeting.
Form of Proxy
Relating to the 2019 Annual General Meeting of Triple Point
Income VCT plc
I/We..........................................................................................................................................
BLOCK CAPITALS PLEASE - Name in which shares registered
of.............................................................................................................................................
hereby
appoint............................................................................................................................
or failing him/her the Chairman of the meeting to be my/our
proxy and vote for me/us on my/our behalf at the Annual General
Meeting of the Company to be held at 10.00am on Friday 26 July
2019, notice of which was sent to shareholders with the Directors'
Report and the Accounts for the year ended 31 March 2019, and at
any adjournment thereof. The proxy will vote as indicated below in
respect of the resolutions set out in the notice of meeting:
Resolution number For Against Withheld
1. To receive, consider and adopt the
Report of the Directors and the Financial
Statements for the year ended 31 March
2019 together with the Independent
Auditors Report.
2. To approve the Directors' Remuneration
Report.
3. To re-elect Simon Acland as a Director.
4. To re-elect Michael Stanes as a Director.
5. To re-appoint BDO LLP as auditor and
determine their remuneration.
6. To authorise the Directors to make
market purchases of the Company's
own shares (Special Resolution).
Signed:
......................................................................
Dated: ................................................ ..2019
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, Steelpark Road, Halesowen, West
Midlands B62 8HD no later than 48 hours before the commencement of
the meeting.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR LLFVRRFIDLIA
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June 17, 2019 12:47 ET (16:47 GMT)
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