TIDMTP7V
RNS Number : 5942D
TP70 2010 VCT PLC
17 May 2012
TP70 2010 VCT plc
Final Results
TP70 2010 VCT plc, managed by Triple Point Investment Management
LLP today announces the final results for the year ended 29
February 2012.
These results were approved by the Board of Directors on 16 May
2012.
You may view the Annual Report in on the Triple Point website
www.triplepoint.co.uk at
http://www.triplepoint.co.uk/investment-products/venture-capital-trust/tp70-range/tp70-2010-trading/.
About TP70 2010 VCT plc
TP70 2010 VCT plc ("the Company") is a Venture Capital Trust
("VCT"). The investment manager is Triple Point Investment
Management LLP. The Company was launched in October 2009 and raised
GBP8.3 million (net of expenses) through an offer for
subscription.
Details of the Fund's progress are discussed in the Chairman's
Statement and Investment Manager's Review forming part of the
extract from the Financial Statements which follows.
Venture Capital Trusts (VCTs)
VCTs were introduced in the Finance Act 1995 to provide a means
for private individuals to invest in unlisted companies in the UK.
Subsequent Finance Acts have introduced changes to VCT legislation.
The tax benefits currently available to eligible new investors in
VCTs include:
-- upfront income tax relief of 30%
-- exemption from income tax on dividends paid; and
-- exemption from capital gains tax on disposals of shares in VCTs
The Company has been approved as a VCT by HM Revenue &
Customs. In order to maintain its approval, the Company must comply
with certain requirements on a continuing basis. Above all, the
Company is required at all times to hold 70% of its investments (as
defined in the legislation) in VCT qualifying holdings, of which at
least 30% must comprise eligible ordinary shares.
For this purpose, a 'VCT qualifying holding' consists of up to
GBP1 million invested in any one year in new shares or securities
of a UK unquoted company (which may be quoted on AIM) which is
carrying on a qualifying trade, and whose gross assets at the time
of investment do not exceed a prescribed limit. The definition of
'qualifying trade' excludes certain activities such as property
investment and development, financial services and asset leasing.
The Company will continue to ensure its compliance with these
qualification requirements.
Report of the Directors - Consolidated Financial Summary
Year ended 29 February Period ended
2012 28 February 2011
GBP'000 GBP'000
Net assets 7,532 8,077
Net asset value per share 86.12p 92.35p
--------------------------- ------------------------------ ------------------------
Net loss before tax (545) (235)
Loss per share (6.24p) (4.68p)
--------------------------- ------------------------------ ------------------------
For a GBP1 investment per share investors, with a sufficient
income tax liability in the relevant year, have already received
30p tax relief which, taken together with the current NAV of
86.12p, totals 116.12p.
TP70 2010 VCT plc ("the Company") is a Venture Capital Trust
("VCT"). The Investment Manager is Triple Point Investment
Management LLP ("TPIM"). The Company was launched in October 2009
and raised GBP8.3 million (net of expenses), through an offer for
subscription which closed on 31 May 2010.
The Directors' Report on pages 10 to 15 and the Directors'
Remuneration Report on pages 16 to 17 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
TP70 2010 VCT plc.
The Directors submit to the members their Annual Report and
Financial Statements for the Group for the year ended 29 February
2012 and comparatives for the 16 month period ended 28 February
2011. The Report of the Directors includes the Consolidated
Financial Summary, Chairman's Statement, Details of Advisers,
Shareholder Information, Directors' Report, Directors' Remuneration
Report and the Corporate Governance Statement.
Report of the Directors - Chairman's Statement
I am writing to present the Financial Statements for TP70 2010
VCT plc ("the Company") for the year ended 29 February 2012.
Results
We are pleased to announce that following the year end in March
the Company secured its VCT qualifying status by satisfying the
test of being 70% invested in VCT qualifying investments, which at
the year end represented 50% of net assets and by April had risen
to 76%. The Board is pleased that its investment portfolio has been
constructed a year ahead of the target date for its investment
strategy.
In selecting its qualifying investments the Company has been
able to take advantage of a number of attractive investment
opportunities. These include renewable electricity generated from
roof mounted solar photovoltaic panels (investments which will
benefit from long-term, index linked revenues) and cinema
digitisation yielding high quality, predictable cash flows.
More information on the Company's investment portfolio is given
in the Investment Manager's Review.
Over the year the Company made a loss of GBP545,000 or 6.24p per
share of which GBP327,000 was attributable to the performance of
the GAM portfolio. As at 29 February 2012 the NAV per share stood
at 86.12p.
Board Composition
The Board regularly reviews the independence of its members and
as a result of their review a decision was taken that the TPIM
appointee should be replaced by a director who is independent of
TPIM. Therefore Chris Tottle resigned as a Director and Professor
Elroy Dimson was appointed on 27 April 2011. Details of Elroy's
curriculum vitae appear on page 3. We are delighted to welcome
someone of Elroy's expertise and experience to the Board.
Risks
The Board believes that the principal risks facing the Company
are:
-- investment risk associated with exposure to GAM;
-- investment risk associated with VCT qualifying investments;
and
-- failure to maintain approval as a VCT.
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. Further details of
how these risks are managed are detailed within the Directors'
Report.
Outlook
Despite the unpredictability of the short-term economic
prospects, having secured its VCT qualifying portfolio and status,
the Board is confident in its outlook and believes the Company is
well placed to deliver returns to shareholders over the longer
term.
If you have any queries or comments, please do not hesitate to
telephone Triple Point Investment Management LLP on 020 7201
8989.
Charles Metcalfe
Chairman
16 May 2012
Investment Manager's Review
Over the year the Company reduced its exposure to GAM funds in
order to fund construction of its portfolio of VCT qualifying
holdings, in line with its investment strategy.
We are pleased to report that during the year the Company made
substantial progress in building its portfolio of VCT qualifying
investments, investing GBP3.8million, so that as at 29 February
2012 qualifying investments represented 50% of net assets.
Following the year end a further GBP2.3 million was invested
increasing the size of the VCT qualifying portfolio to 75% of net
assets. This means that the Company has satisfied the requirement
of being 70% invested in qualifying investments a year ahead of its
target date.
The portfolio of qualifying investments is split between 14
companies across cinema digitisation and electricity generation
from solar PV, anaerobic digestion and landfill gas.
Each of these investments meets Triple Point's investment
criteria, with projected revenue generated by good quality
customers and the potential for attractive returns. Investments in
each sector have been made with the benefit of rigorous selection
criteria, including extensive due diligence and expert technical
assessment.
Investment Programme Summary
The table below summarises the sector split and investment level
in the portfolio.
Solar Anaerobic Total Qualifying
Industry Sector Cinema Digitisation PV Digestion Landfill Investments
------------------------------------ -------------------- -------- ----------- --------- -----------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ -------------------- -------- ----------- --------- -----------------
Investments made during the
year - 3,300 500 - 3,800
------------------------------------ -------------------- -------- ----------- --------- -----------------
Investments made since 29 February
2012 1,000 - 725 640 2,365
------------------------------------ -------------------- -------- ----------- --------- -----------------
Investments disposed of since
29 February 2012 - - (500) - (500)
------------------------------------ -------------------- -------- ----------- --------- -----------------
Investments at the date of
this report 1,000 3,300 725 640 5,665
------------------------------------ -------------------- -------- ----------- --------- -----------------
VCT Investment Portfolio
Anaerobic Digestion
The Company has invested in two companies pursuing opportunities
in the generation of electricity from Anaerobic Digestion (AD). AD
is the production of biogas through the biological treatment of
organic materials using naturally occurring organisms. The
businesses in which the Company has invested are engaged in
farm-based AD. The process takes place inside sealed tanks and
principally produces methane, which is burned to generate
electricity, which is then sold to utility companies via a National
Grid connection, or to businesses located close to the generator.
Income will be derived from the production and sale of electricity
which will attract Feed-in Tariffs (FITs). The technology used in
AD is tried and tested and the equipment is supplied by one of
Europe's leading technology suppliers, Envitech.
Cinema Digitisation
Since the year end the Company has invested in a company that
deploys, maintains and operates digital equipment in cinemas in the
UK and Continental Europe. The digitisation of cinema projection
equipment has enabled significant industry-wide print and
distribution cost savings and has enhanced box office receipts
through 3D technology. Digital cinema projection conversion is paid
for under the globally recognised Virtual Print Fee model, through
which Film Studios pay for the cost of the deployment over a number
of years. The majority of the revenues are paid by the six major
investment grade Hollywood Studios.
Landfill Gas
Two investments were made after the year end in companies
pursuing the generation of electricity from landfill gas in
Northern Ireland. The technology used to recover landfill gas is
highly efficient and well-established. Landfill gas is recovered by
drilling a series of wells into the waste in a grid pattern across
a site.
The gas then powers electricity generators and the electricity
is exported to the grid. The companies' revenues are derived from
the generation of electricity supported by the Renewable Obligation
incentive.
Solar PV
The Company has invested in 10 companies that own solar PV
panels which are installed on residential properties. These were
all installed and generating electricity before 12 December 2011,
so they are in receipt of the higher Feed-in Tariffs (FITs)
applicable to installations made before that date. These tariffs
are index-linked and have been set for 25 years, providing the
companies with a long term, predictable cash flow. The combined
generation capacity of the companies is 3.4GWh per annum.
GAM
Following the adoption of the revised investment strategy in
October 2010 for the GAM funds, funds were deployed as follows:
-- GBP1.25 million investment in GAM Trading II GBP 1.25XL;
-- a GBP1.52 million investment into two GAM funds, the Multi
Focused Macro Fund and the Multi Systematic Trading Fund; and
-- GBP1.23 million investment in a 2.5 x leveraged note in
respect of GAM Trading II GBP Open provided by Exane Derivatives, a
subsidiary of Credit Agricole (S&P A-, Moody's A3).
The investments in the Multi Focused Macro Fund and the Multi
Systematic Trading Fund were sold during the year to enable
qualifying investments to be made. At the year end the net exposure
to GAM funds was 30% with a gross exposure of 55%. On 7 March 2012
GBP550,000 of the investment in GAM Trading II GBP 1.25XL was
redeemed in order to fund further VCT qualifying investments.
GAM report that 2011 was a challenging year for GAM Trading II.
GAM Trading II fell by 3.4% for the period from 29 February 2011 to
31 December 2011, although this outperformed the HFRI/HFRX Global
Hedge Fund index which fell 10.0% in sterling terms. GAM
acknowledge that while disappointing, 2011 falls within their range
of short-term performance expectations and believe that the
adjustments made in the portfolio over the year will help achieve
returns more consistent with its longer-term track record.
GAM state that although the portfolio as a whole experienced
modest losses, there were some allocations that performed well.
Specialised managers tended to outperform larger managers, as they
were able to find market or sector-specific opportunities, and
managers with a longer time horizon, such as systematic trend
strategies, fared better as they held positions in a size
appropriate to withstand market volatility.
GAM have summarised that there is no doubt the year ended 29
February 2012 has been challenging. While the current environment
is difficult, they have adjusted the portfolio through strategy
allocation and manager selection to increase their weighting to
those managers they expect to outperform in an uncertain
environment. These adjustments will help managers weather the
existing uncertainty, with the expectation that they will increase
risk when markets present more persistent trends. GAM believe these
factors will allow GAM Trading II to deliver a performance
consistent with its longer-term track record.
Outlook
With the VCT qualifying portfolio now in place, our focus turns
to portfolio management, and we are confident that the Company is
well positioned to benefit from the business's performance. We will
also continue to monitor the performance of its investments with
GAM.
Claire Ainsworth
Managing Partner
for Triple Point Investment Management LLP
16 May 2012
Report of the Directors- Investment Portfolio
29 February 2012 28 February 2011
------------------------------------ ------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Qualifying Holdings 3,800 49.24 3,800 50.32 - - - -
Non-qualifying Holdings
Money Market funds 900 11.67 900 11.91 - - - -
GAM Exposure
GAM Trading II GBP 1.25XL 1,238 16.03 1,265 16.75 1,238 15.29 1,307 16.11
GAM Multi-Focused Macro SP
USD Open - - - - 1,200 14.82 1,157 14.26
GAM Multi-Systematic Trading
USD Open - - - - 320 3.95 325 4.00
Derivative 1,230 15.93 1,032 13.67 1,230 15.19 1,216 14.98
Financial Assets at fair
value through profit or loss 7,168 92.87 6,997 92.65 3,988 49.25 4,005 49.35
Cash and cash equivalents 554 7.13 554 7.35 4,110 50.75 4,110 50.65
7,722 100.00 7,551 100.00 8,098 100.00 8,115 100.00
======== ======= ======== ======= ======== ======= ======== =======
Qualifying Holdings (all
Unquoted)
Electricity generation
Solar
AH Power Ltd 400 5.18 400 5.30 - - - -
Arraze Ltd 500 6.48 500 6.62 - - - -
Bandspace Ltd 500 6.48 500 6.62 - - - -
Bridge Power Ltd 250 3.24 250 3.31 - - - -
Core Generation Ltd 250 3.24 250 3.31 - - - -
Druman Green Ltd 250 3.24 250 3.31 - - - -
Fellman Solar Ltd 250 3.24 250 3.31 - - - -
Haul Power Ltd 250 3.24 250 3.31 - - - -
Helioflair Ltd 400 5.18 400 5.30 - - - -
Trym Power Ltd 250 3.24 250 3.31 - - - -
Anaerobic Digestion
Nanuq Power Ltd 500 6.48 500 6.62 - - - -
3,800 49.24 3,800 50.32 - - - -
======== ======= ======== ======= ======== ======= ======== =======
Non-qualifying Holdings
Money Market Funds
Deutsche Global Liquidity
Managed Sterling Fund 300 3.89 300 3.97
Ignis Sterling Liquidity
Fund Share 300 3.89 300 3.97
Insight GBP Liquidity Fund 300 3.89 300 3.97
900 11.67 900 11.91 - - - -
======== ======= ======== ======= ======== ======= ======== =======
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 deemed best 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.
Report of the Directors- Investment Portfolio Additional
Information
29 February 2012 Investee Company Financial Statements
------------------------------- ---------------------------------------------------------
Ending in 2011**
Equity
held
Income by Equity
recognised TP70 held by Net
by TP70 2010 all Profit/loss assets
Initial 2010 VCT VCT funds before Profit/loss before
Investment plc for plc managed interest before VCT Net
Date the year * by TPIM Turnover and tax tax loans assets
--------- ------------ ------------ -------- --------
GBP'000 % % GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Nanuq Power
Ltd 30-Mar-11 2 24.75 98.01 n/a
AH Power
Ltd 05-Dec-11 3 19.61 98.05 n/a
Arraze Ltd 30-Mar-11 6 24.75 98.01 n/a
Bandspace
Ltd 30-Mar-11 6 24.75 98.01 n/a
Bridge
Power
Ltd 04-Apr-11 3 12.25 98.00 n/a
Core
Generation
Ltd 04-Apr-11 3 12.25 98.00 n/a
Druman
Green
Ltd 14-Nov-11 3 12.25 98.03 n/a
Fellman
Solar
Ltd 14-Nov-11 2 12.25 98.03 n/a
Haul Power
Ltd 04-Apr-11 3 12.25 98.00 n/a
Helioflair
Ltd 05-Dec-11 3 27.78 97.23 n/a
Trym
PowerLtd 04-Apr-11 3 12.25 98.00 n/a
----------- ------- --------- ---------------------------------------------------------
The basis of valuation for all investments is the transaction price. Financial
assets are measured at fair value.
* The Equity held by the VCT is equal to their voting rights.
** Companies that were not incorporated until 2011 will not produce financial statements
until accounting dates ending no earlier than in 2012.
Report of the Directors - Corporate Governance
The Board of TP70 2010 VCT plc has considered the principles and
recommendations of the Association of Investment Companies Code of
Corporate Governance (AIC Code) by reference to the Association of
Investment Companies Corporate Governance Guide for Investment
Companies (AIC Guide). The AIC Code, as explained by the AIC Guide,
addresses all the principles set out in the UK Corporate Governance
Code (June 2010), as well as setting out additional principles and
recommendations on issues that are of specific relevance to the
Company. The Board considers that reporting against principles and
recommendations of the AIC Code, by reference to the AIC Guide
(which incorporates the UK Corporate Governance Code (June 2010)),
will provide better information to shareholders.
The Company is committed to maintaining high standards in
corporate governance and has complied with the recommendations of
the AIC Code and the relevant provisions of the UK Corporate
Governance Code (June 2010), except as set out at the end of this
report in the Compliance Statement.
The Corporate Governance Report forms part of the Report of the
Directors.
Board of Directors
The Board regularly reviews the independence of its members and
as a result of their review a decision was taken that the TPIM
appointee should be replaced by a director who is independent of
TPIM. Therefore Chris Tottle resigned as a Director and Elroy
Dimson was appointed on 27 April 2011. The Directors who own shares
in the Company are considered independent under the Listing
Rules.
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 3 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 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.
There is a formal, rigorous and transparent procedure for the
appointment of new directors to the board. The search for board
candidates is conducted, and appointments made, on merit, against
objective criteria 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 meet 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 the appropriate dividend and any 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
through the Chairman 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 (June 2010) that all Directors are
required to submit themselves for re-election at least every three
years.
During the year covered by these financial statements the
following meetings were held:
Directors present 4 Full Board 2 Audit Committee
Meetings Meeting
Charles Metcalfe, Chairman 3 (of 4) 1 (of 2)
Simon Acland 4 2
Chris Tottle 1 (of 1) 1 (of 1)
Elroy Dimson 2 (of 3) 1 (of 1)
Audit Committee
The Board has appointed an Audit Committee of which Charles
Metcalfe is Chairman, which deals with matters relating to audit,
financial reporting and internal control systems. The committee
meets as required and has direct access to Grant Thornton UK LLP,
the Company's Auditor. The Audit Committee safeguards the
objectivity and independence of the auditor by reviewing the nature
and extent of non-audit services supplied by the external auditors
of the Company, seeking to balance objectivity and value for
money.
The Audit Committee's terms of reference include the following
roles and responsibilities:
-- reviewing and making recommendations to the Board in relation
to the Company's published Financial Statements and other formal
announcements relating to the Company's financial performance;
-- reviewing and making recommendations to the Board in relation
to the Company's internal control (including internal financial
control) and risk management systems;
-- periodically considering the need for an internal audit function;
-- making recommendations to the Board in relation to the
appointment, re-appointment and removal of 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 are
independent and collectively have the skills and experience
required to discharge their duties effectively, and that the
Chairman of the committee meets the requirements of the UK
Corporate Governance Code (June 2010) 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 it was would recommend this to the Board.
In respect of the year ended 29 February 2012, the Audit
Committee discharged its responsibilities by:
-- reviewing and approving the external auditor's terms of engagement and remuneration;
-- reviewing the external auditor's plan for the audit of the
Financial Statements, including identification of key risks and
confirmation of auditor independence;
-- reviewing TPIM'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; and
-- reviewing the appropriateness of the Company's accounting policies.
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 all of 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
once a year.
TPIM is engaged to provide administrative including accounting
services and retains physical custody of the documents of title
relating to investments.
Internal control systems include the production and review of
quarterly bank reconciliations and management accounts. The VCT is
subject to a full annual audit. The auditors are the same auditors
as other VCTs managed by the Investment Manager. The Audit Partner
has access to the Directors of the VCT. The Investment Manager's
procedures are subject to internal compliance checks.
Risk Management
TPIM carries out management of liquid funds in accordance with
the policy guidelines laid down and regularly reviewed by the
Board. The Board carries out a regular review of the risk
environment in which the Company operates. The particular risks
they have identified are detailed in the Directors' Report on page
13.
Going Concern
After making the necessary enquiries, the Directors confirm that
they are satisfied that the Company has adequate resources to
continue in business for the foreseeable future. The Board receives
regular reports from the Manager and the Directors believe that, as
no material uncertainties leading to significant doubt about going
concern have been identified, it is appropriate to continue to
apply the going concern basis in preparing the Financial
Statements. There are no borrowings or banking facilities in place
nor are they anticipated to be required in future.
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.
Proxy voting figures for each resolution will be announced at the
Annual General Meeting. 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 4-5 Grosvenor
Place, London, SW1X 7HJ or on 020 7201 8989.
Compliance Statement
The Listing Rules require the Board to report on compliance with
the UK Corporate Governance Code (June 2010) throughout the
accounting period. With the exception of the limited items outlined
below, the Directors consider that the Company has complied
throughout the year under review with the provisions set out in UK
Corporate Governance Code (June 2010).
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, 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 (A4.1).
4. The Company regularly 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 (C3 .5).
5. As all the Directors are non-executive, it is not considered
appropriate to appoint a Nomination or Remuneration Committee
(D.2.1 and B.2.1).
6. A smaller company should have at least two independent
non-executive directors. The Board regularly reviews the
independence of its members and as a result of their review a
decision was taken that the TPIM appointee should be replaced by a
director who is independent of TPIM. (A.4)
On behalf of the Board
Charles Metcalfe,
Chairman
16 May 2012 Report of the Directors - Directors' Responsibility
Statement
The Directors are responsible for preparing the Report of the
Directors 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 to prepare the Group Financial Statements and have elected to
prepare the Company Financial Statements in accordance with
International Financial Reporting Standards as adopted by the
European Union (IFRSs). 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 of the Group
and Company and profit or loss of the Group for that period. In
preparing these Financial Statements, the Directors are required
to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable IFRSs 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 comply with the Companies Act 2006 and
Article 4 of the IAS Regulation. 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.
In 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 to make themselves aware of any relevant audit information
and to establish that the auditor is aware of that information.
The Group'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 the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company and the undertakings included in the consolidation
taken as a whole; and
-- the Directors' report includes a fair review of the
development and performance of the business and the position of the
Company and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that it faces.
On behalf of the board Charles Metcalfe Chairman 16 May 2012
Consolidated Statement of Comprehensive Income
For the year ended 29 February 2012
` Year ended Period ended
29 February 2012 28 February 2011
---------------------------- ----------------------------
Note Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income
Investment income 4 50 - 50 37 - 37
(Loss)/gain arising on
the disposal of investments
in the year 5 - (139) (139) - 4 4
(Loss)/gain arising on
the revaluation of investments
at the year end 5 - (188) (188) - 31 31
Investment return 50 (327) (277) 37 35 72
-------- -------- -------- -------- -------- --------
Expenses
Investment management
fees 6 39 117 156 46 138 184
Financial and regulatory
costs 20 - 20 22 - 22
General administration 22 - 22 16 - 16
Legal and professional
fees 7 30 - 30 39 - 39
Directors' remuneration 8 40 - 40 46 - 46
Operating expenses 151 117 268 169 138 307
-------- -------- -------- -------- -------- --------
Loss before taxation (101) (444) (545) (132) (103) (235)
Taxation 9 - - - - - -
Loss after taxation (101) (444) (545) (132) (103) (235)
-------- -------- -------- -------- -------- --------
Loss and total comprehensive
loss for the year (101) (444) (545) (132) (103) (235)
-------- -------- -------- -------- -------- --------
Basic & diluted loss
per share 10 (1.17p) (5.07p) (6.24p) (2.42p) (2.26p) (4.68p)
-------- -------- -------- -------- -------- --------
The total column of this statement represents the Company's
Statement of Comprehensive Income, prepared in accordance with
International Financial Reporting Standards ("IFRS"). The
supplementary revenue and capital columns are 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.
The loss for the year and the total comprehensive loss are
attributable to the equity holders of the Parent Company.
The Company has taken advantage of S408 of the Companies Act
2006 not to publish its own Statement of Comprehensive Income in
these Financial Statements. The Parent Company's loss for the year
was GBP545,372.
This Consolidated Statement of Comprehensive Income includes all
recognised gains and losses.
The accompanying notes are an integral part of this
statement.
Balance Sheets: Consolidated and Parent Company
at 29 February 2012
29 February 2012 28 February 2011
------------------- -------------------
Parent Parent
Group Company Group Company
Note GBP'000 GBP'000 GBP'000 GBP'000
Non current assets
Financial assets at fair
value through profit or
loss 11 6,997 6,976 4,005 3,995
6,997 6,976 4,005 3,995
-------- --------- -------- ---------
Current assets
Receivables 12 43 56 32 31
Forward contracts 13 - - 17 17
Cash and cash equivalents 14 554 554 4,110 4,108
597 610 4,159 4,156
-------- --------- -------- ---------
Total assets 7,594 7,586 8,164 8,151
-------- --------- -------- ---------
Current liabilities
Payables and accrued expenses 15 62 54 87 74
62 54 87 74
-------- --------- -------- ---------
Net assets 7,532 7,532 8,077 8,077
======== ========= ======== =========
Equity attributable to
equity holders
Share capital 16 87 87 87 87
Share premium - - 8,225 8,225
Special distributable
reserve 8,225 8,225 - -
Capital reserve (547) (569) (103) (113)
Revenue reserve (233) (211) (132) (122)
Total equity 7,532 7,532 8,077 8,077
======== ========= ======== =========
Net asset value per share
(pence) 19 86.12p 86.12p 92.35p 92.35p
======== ========= ======== =========
The statements were approved by the Directors and authorised for
issue on 16 May 2012 and are signed on their behalf by:
Charles Metcalfe
Chairman
16 May 2012
Company registration number: 7039066
The accompanying notes are an integral part of this
statement.
Statement of Changes in Shareholders' Equity - Consolidated and
Parent Company
For the year ended 29 February 2012
Special
Issued Share Distributable Capital Revenue
Capital Premium Reserve Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 29 February
2012
Group
Balance at 1 March
2011 87 8,225 - (103) (132) 8,077
-------- -------- -------------- -------- -------- --------
Cancellation of share
premium (8,225) 8,225 - - -
--------
Transactions with
owners - (8,225) 8,225 - - -
-------- -------- -------------- -------- -------- --------
Loss after tax - - - (444) (101) (545)
Total comprehensive
loss for the year - - - (444) (101) (545)
-------- -------- -------------- -------- -------- --------
Balance at 29 February
2012 87 - 8,225 (547) (233) 7,532
======== ======== ============== ======== ======== ========
Capital Reserve consists
of:
Investment holding
losses (157)
Other realised losses (390)
(547)
--------
Parent Company
Balance at 1 March
2011 87 8,225 - (113) (122) 8,077
-------- -------- -------------- -------- -------- --------
Cancellation of share
premium - (8,225) 8,225 - - -
Transactions with
owners - (8,225) 8,225 - - -
-------- -------- -------------- -------- -------- --------
Loss after tax - - - (456) (89) (545)
Total comprehensive
loss for the year - - - (456) (89) (545)
-------- -------- -------------- -------- -------- --------
Balance at 29 February
2012 87 - 8,225 (569) (211) 7,532
======== ======== ============== ======== ======== ========
Capital Reserve consists
of:
Investment holding
losses (266)
Other realised losses (303)
(569)
--------
The share premium represents the excess of the issue price net
of issue costs over the par value of shares.
Neither the share premium nor capital reserve are distributable.
The capital reserve represents the gains/(losses) on holding
investments and the proportion of Investment Management fees
charged against capital. The special distributable reserve was
created on court cancellation of the share premium account. The
revenue and special distributable reserve are distributable by way
of dividend.
Statement of Changes in Shareholders' Equity - Consolidated and
Parent Company (continued)
For the year ended 28 February 2012
Issued Share Capital Revenue
Capital Premium Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Period ended 28 February
2011
Group
Issue of share capital 87 8,659 - - 8,746
Cost of issue of shares - (434) - - (434)
Transactions with owners 87 8,225 - - 8,312
---------- --------- -------- -------- --------
Loss after tax - - (103) (132) (235)
Total comprehensive
loss for the year - - (103) (132) (235)
---------- --------- -------- -------- --------
Balance at 28 February
2011 87 8,225 (103) (132) 8,077
========== ========= ======== ======== ========
Capital Reserve consists
of:
Investment holding gains/ 31
Realised losses (134)
(103)
--------
Parent Company
Issue of share capital 87 8,659 - - 8,746
Cost of issue of shares - (434) - - (434)
Transactions with owners 87 8,225 - - 8,312
---------- --------- -------- -------- --------
Loss after tax - - (113) (122) (235)
Total comprehensive
loss for the year - - (113) (122) (235)
---------- --------- -------- -------- --------
Balance at 28 February
2011 87 8,225 (113) (122) 8,077
========== ========= ======== ======== ========
Capital Reserve consists
of:
Investment holding losses (53)
Realised losses (60)
(113)
--------
The accompanying notes are an integral part of these
statements.
Statement of Cash Flows - Consolidated and Parent Company
For the year ended 29 February 2012
Year ended Period ended
29 February 28 February
2012 2011
------------------ ------------------
Parent Parent
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Loss before taxation (545) (545) (235) (235)
Loss/(gain) arising on the disposal
of investments in the year 100 100 - (73)
Loss/(gain) arising on the revaluation
of investments at the year end 188 199 (31) 53
Cash absorbed by operations (257) (246) (266) (255)
Increase in receivables (11) (25) (32) (31)
Decrease/(increase) in forward
contracts 17 17 (4) (4)
(Decrease)/increase creditors (25) (20) 87 74
Net cash flows from operating activities (276) (274) (215) (216)
-------- -------- -------- --------
Cash flow from investing activities
Purchase of financial assets at
fair value through profit or loss (4,773) (4,773) (3,988) (3,988)
Disposal proceeds of financial
assets at fair value through profit
or loss 1,493 1,493 - -
Cash acquired on acquisition of
subsidiary undertaking - - 1 -
Net cash flows from investing activities (3,280) (3,280) (3,987) (3,988)
-------- -------- -------- --------
Cash flows from financing activities
Issue of shares - - 8,746 8,746
Cost of share issue - - (434) (434)
Net cash flows from financing activities - - 8,312 8,312
-------- -------- -------- --------
Net (decrease)/increase in cash
and cash equivalents (3,556) (3,554) 4,110 4,108
======== ======== ======== ========
Reconciliation of net cash flow
to movements in cash and cash equivalents
Cash and cash equivalents at 1
March 2011 4,110 4,108 - -
Net (decrease)/increase in cash
and cash equivalents (3,556) (3,554) 4,110 4,108
Cash and cash equivalents at 29
February 2012 554 554 4,110 4,108
======== ======== ======== ========
The accompanying notes are an integral part of these
statements.
Notes to the Financial Statements
1. Corporate Information
The consolidated Financial Statements of the Company for the
year ended 29 February 2012 were authorised for issue in accordance
with a resolution of the Directors on 16 May 2012.
The Company applied for listing on the London Stock Exchange on
1 April 2010.
TP70 2010 VCT plc is the Group's ultimate parent Company. It is
incorporated and domiciled in Great Britain. The address of TP70
2010 VCT plc's registered office, which is also its principal place
of business, is 4-5 Grosvenor Place, London, SW1X 7HJ.
TP70 2010 VCT plc's consolidated and Parent Company Financial
Statements are presented in Pounds Sterling (GBP) which is also the
functional currency of the Company, rounded to the nearest
thousand.
The principal activity of the Company is investment. The
Company's investment strategy is to offer combined exposure to GAM
Trading strategy 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 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. There are no borrowings or banking facilities in place
nor are they anticipated to be required in future.
The consolidated Financial Statements of the Company and its
subsidiary and the Financial Statements of the Company for the year
ended 29 February 2012 have been prepared in accordance with
International Financial Reporting Standards ("IFRS") adopted for
use in the European Union. They therefore comply with the Articles
of the EU IAS regulation and 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 January 2009, in so far as this does
not conflict with IFRS.
The Consolidated Financial Statements and the Company Financial
Statements have been prepared on a historical cost basis except
that investments are shown at fair value through profit or
loss.
The preparation of Financial Statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of policies and the reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
various other factors believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ
from these judgements. Further details are provided in the
"non-current asset investments" section below.
The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying values 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 (in the section headed Non-current asset investments).
-- 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 appropriateness of the allocation of management expenses
between revenue and capital, which is based on the split of the
long-term anticipated return between revenue and capital of net
income, will impact on the value of distributable reserves.
The key judgements made by Directors are in the valuation of
non-current assets. The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the
revision affects that period or in the period of revision and
future periods if the revision affects both current and future
periods. The carrying value of investments is disclosed in note
11.
These accounting policies have been applied consistently
throughout the Company for the purposes of preparation of these
consolidated Financial Statements.
Standards Issued but not yet Effective
The following new standards, amendments to standards and
interpretations are not yet effective for the year ended 29
February 2012, and have not been applied in preparing these
Financial Statements:
-- IFRS 9 Financial Instruments (effective 1 January 2015)
-- IFRS 13 Fair Value Measurement (effective 1 January 2013)
-- Presentation of Items of Other Comprehensive Income -
Amendments to IAS 1 (effective 1 July 2012)
-- Disclosures - Offsetting Financial Assets and Financial
Liabilities - Amendments to IFRS 7 (effective 1 January 2013)
-- Offsetting Financial Assets and Financial Liabilities -
Amendments to IAS 32 (effective 1 January 2014)
-- Mandatory Effective Date and Transition Disclosures -
Amendments to IFRS 9 and IFRS 7 (effective 1 January 2015)
All of these changes will be applied by the Company from the
effective date but none of them is expected to have a significant
impact on the Company's Financial Statements.
Basis of Consolidation
The consolidated Financial Statements comprise the Financial
Statements of the Group on the last day of February each year. The
Financial Statements of the subsidiary are prepared to the same
reporting year end as the Parent Company, using consistent
accounting policies.
All intra-group balances, transactions, income and expenses and
profits and losses resulting from intra-group transactions that are
recognised in assets, are eliminated in full.
Subsidiaries are fully consolidated from the date of
acquisition, being the date on which the Company obtains control,
and continue to be consolidated until the date that such control
ceases.
There are no minority interests.
Presentation of the Consolidated Statement of Comprehensive
Income
In order better to reflect the activities of a Venture Capital
Trust, and in accordance with the guidance issued by the
Association of Investment Companies, supplementary information
which analyses the Statement of Comprehensive Income between items
of a revenue and capital nature has been presented alongside the
Income Statement. Prior to 6 April 2012 in accordance with the
Company's status as a UK Investment Company under S833 of the
Companies Act 2006, net capital returns could not be distributed by
way of dividend. This restriction has been removed which means that
distributions can now be made from capital returns. The Company has
taken advantage of S408 of the Companies Act 2006 not to publish
its own Statement of Comprehensive Income in these Financial
Statements.
Capital Management
The Company's objectives when managing capital are:
-- to safeguard its ability to continue as a going concern, so
that it can continue to provide returns to shareholders and
benefits for other stakeholders;
-- to ensure sufficient liquid resources are available to meet
the funding requirements of its investments and to fund new
investments where identified.
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 29 February 2012 was
GBP7.5million.
The Company has met its objectives in achieving the exposure to
GAM as detailed in the circular issued 14 September 2010. The funds
have now been deployed into qualifying investments and its focus is
to manage these investments.
Non-Current Asset Investments
The Company invests in financial assets with a view to profiting
from their total return through income and capital growth. These
investments are managed and their performance is evaluated on a
fair value basis in accordance with a documented investment
strategy detailed on page 10. Information about the portfolio is
provided internally on that basis to the Company's Board of
Directors. Accordingly upon initial recognition the investments are
designated by the Company as "at fair value through profit or loss"
with the exception of derivative transactions which do not need to
be designated. 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
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,
earnings multiples and net assets.
-- listed investments are fair valued at bid price on the relevant date.
-- the investment held in the unquoted subsidiary company is
valued on the basis of the fair value of the subsidiary's net
assets. The Company has elected to value its investment in its
subsidiary undertaking at fair value (on the basis of the fair
value of the subsidiary's net assets), and furthermore has elected
to account for movements in its fair value using the fair value
through profit or loss method. This approach is permitted under
both IAS 27 Consolidated and Separate Financial Instruments and IAS
39 Financial Instruments: Presentation and disclosure on the basis
that the underlying investment of the subsidiary is part of a
portfolio of identified financial instruments which are managed
together by the Company.
Where securities are designated upon initial recognition as at
fair value through profit or loss, gains and losses arising from
changes in fair value are included in the consolidated statement of
comprehensive income for the year as capital items in accordance
with the AIC SORP. The profit or loss on disposal is calculated net
of transaction costs of disposal.
Investments are recognised as financial assets on legal
completion of the investment contract and are de-recognised on
legal completion of the sale of an investment.
The derivative, providing leveraged exposure to GAM Trading is
classified at fair value through profit or loss.
Whether gains or losses on derivative transactions fall to be
treated as capital or revenue will depend on the nature of the
transaction. Both the underlying motives for the transaction and
its circumstances are considered to be important in determining
whether changes in its value are of a capital or revenue nature. In
some circumstances gains or losses may have to be apportioned
between capital and revenue to reflect the nature of the
transaction.
Income
Investment income includes interest earned on bank balances and
money market funds in the period and includes income tax withheld
at source. Dividend income is shown net of any related tax credit
and is brought into account on the ex-dividend date.
Fixed returns on investment loans, debt and money market funds
are recognised on a time apportionment basis so as to reflect the
effective yield, provided there is no reasonable doubt that payment
will be received in due course.
Expenses
All expenses are accounted for on the accruals basis. Expenses
are charged to revenue with the exception of the investment
management fee, which has been charged 25% to the revenue account
and 75% to the capital account to reflect, in the Directors'
opinion, the expected long term split of returns in the form of
income and capital gains respectively from the investment
portfolio.
Taxation
Corporation Tax payable is applied to profits chargeable to
Corporation Tax, if any, at the current rate in accordance with 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 SORP.
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 a
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 policies in relation to those assets are set out above.
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the entity after deducting all
of its financial liabilities. Where the contractual terms of share
capital do not have any terms meeting the definition of a financial
liability then this is classed as an equity instrument. Dividends
and distributions relating to equity instruments are debited direct
to equity.
Issued Share Capital
Ordinary shares are classified as equity because they do not
contain an obligation to transfer cash or another financial asset.
Issue costs associated with the allotment of shares have been
deducted from the share premium account in accordance with IAS
32.
Cash and Cash Equivalents
Cash and cash equivalents represent cash available at less than
3 months' notice are classified as loans and receivables under
IAS39.
Receivables
Receivables are classified as loans and receivables under IAS39
and are recognised at fair value on initial recognition and
subsequently at amortised cost. An impairment loss is recognised
whenever the carrying amount of an asset exceeds its recoverable
amount.
Trade and Other Payables
Trade and other payables are recognised at fair value on initial
recognition and subsequently at amortised cost.
Reserves
The revenue reserve (retained earnings) and capital reserve
reflect the guidance in the AIC SORP. The share premium represents
the excess of the issue price net of issue costs over the par value
of shares. The capital reserve represents the gains/(losses) on
holding investments and the proportion of Investment Management
fees charged against capital. Neither the share premium nor capital
reserve are distributable. The special distributable reserve was
created on court cancellation of the share premium account. The
revenue and special distributable reserve are distributable by way
of dividend.
3. Segmental Reporting - Group
The Group only has one class of business, being investment
activity. All revenues and assets are generated and held in the
UK.
4. Investment Income
Year ended Period ended
29 February 2012 28 February 2011
---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Interest receivable on
bank balances 7 - 7 37 - 37
Dividends receivable on
money market funds 6 - 6 - - -
Loan interest receivable 37 - 37 - - -
50 - 50 37 - 37
-------- -------- -------- -------- -------- --------
5. (Loss)/Gains on Investments
Year ended Period ended
29 February 2012 28 February 2011
----------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Realised (loss)/gain on
forward contract - (39) (39) - 4 4
Unrealised gain on forward
contract - - - - 13 13
Loss arising on the disposal
of investments in the year - (100) (100) - - -
(Loss)/gain arising on
the revaluation of investments
at the year end - (188) (188) - 18 18
- (327) (327) - 35 35
------------------------------------------- -------- -------- -------- -------- --------
6. Investment Management Fees
Triple Point Investment Management LLP provides investment
management and administration services to the Group under an
Investment Management Agreement effective 2 February 2010 which
runs for a period of 5 years and may be terminated at any time
thereafter by not less than twelve months' notice given by either
party and which provides for an administration and investment
management fee of 2.5% per annum of net assets calculated and
payable quarterly in arrears. Should such notice be given, the
Investment Manager would perform its duties under the Investment
Management Agreement and receive its management fee during the
notice period.
7. Legal and Professional Fees
Legal and professional fees include remuneration paid to the
Company's auditor, Grant Thornton UK LLP as shown in the following
table:
Year ended Period ended
29 February 2012 28 February 2011
---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fees payable to the Company's
auditor:
* for the audit of the Company and Group accounts 12 - 12 10 - 10
* for other services related to taxation - - - 4 - 4
12 - 12 14 - 14
-------- -------- -------- -------- -------- --------
8. Directors' Remuneration
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. The Directors are considered to be
the entity's key management personnel. Full disclosure of key
management personnel's remuneration is included in the Directors'
Remuneration report.
Year ended Period ended
29 February 2012 28 February 2011
---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Charles Metcalfe, Chairman 15 - 15 17 - 17
Simon Acland 13 - 13 15 - 15
Prof. Elroy Dimson 10 - 10 - - -
Chris Tottle 2 - 2 6 - 6
David Dick - - - 8 - 8
40 - 40 46 - 46
-------- -------- -------- -------- -------- --------
9. Taxation
Year ended Year ended
29 February 2012 28 February 2011
---------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loss on ordinary activities
before tax (101) (444) (545) (132) (103) (235)
-------- -------- -------- -------- -------- --------
Corporation tax @ 20%
(2011: 28%) (20) (89) (109) (37) (29) (66)
Effect of:
Non taxable (losses)/gains - 65 65 - (10) (10)
Unrelieved tax losses
arising in the year 20 24 44 37 39 76
Tax charge/credit for
the period - - - - - -
-------- -------- -------- -------- -------- --------
Capital gains and losses are exempt from corporation tax due to
the Company's status as a Venture Capital Trust.
Excess management charges of GBP447,000 (2011: GBP197,000) have
been carried forward at 29 February 2012 and are available for
offset against future taxable income subject to arrangement with HM
Revenue & Customs.
10. Loss per Share
The loss per share is based on a loss from ordinary activities
after tax of GBP545,372 (2011: GBP235,030), and on the weighted
average number of shares in issue during the year of 8,746,340
(2011: 5,017,174)
There are no potentially dilutive capital instruments in issue
and, therefore, no diluted return per share figures are included in
these Financial Statements.
11. Financial Assets at Fair Value through Profit 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 if quoted prices are
readily and regularly available, and those prices represent actual
and regularly occurring market transactions on an arm's length
basis. The quoted market price used for financial assets held by
the Group is the current bid price.
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 market data where it is available 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 in an active market (for example, investments in unquoted
companies) is determined by using valuation techniques such as
earnings multiples. If one or more of the significant inputs is not
based on observable market data, the instrument is included in
level 3.
There have been no transfers between these classifications in
the year and the movement in Level 3 instruments is disaggregated
below. The change in fair value is recognised through the
consolidated statement of comprehensive income.
Investments (continued)
Further details of these investments are provided in the
Investment Manager's Review and Investment Portfolio.
All items held at fair value through profit or loss were
designated as such upon initial recognition.
Level 3 valuations include assumptions based on non-observable
data, such as discounts applied either to reflect impairment of
financial assets held at a price of recent investments, or to
adjust earnings multiples. This includes valuations of investments
based on their net asset values.
Movements in investments held at fair value through profit or
loss during the year ended 29 February 2012 were as follows:
Level
Level 1 2 Level 3
Quoted Unquoted
Year ended 29 February 2012 Investments Derivative Investments Total
GBP'000 GBP'000 GBP'000 GBP'000
Group
Opening cost 2,758 1,230 3,988
Opening investment holding
gains/(losses) 31 (14) 17
2,789 1,216 - 4,005
Purchases at cost 973 - 3,800 4,773
Disposal proceeds (1,493) - - (1,493)
Losses arising from the disposal
of investment (100) - - (100)
Investment holding losses (4) (184) - (188)
Closing fair value at 29
February 2012 2,165 1,032 3,800 6,997
============ =========== ============ ========
Closing cost 2,138 1,230 3,800 7,168
Closing investment holding
gains/(losses) 27 (198) - (171)
------------ ----------- ------------ --------
Parent Company
Opening cost 1,520 1,230 1,311 4,061
Opening investment holding
losses (38) (14) (14) (66)
1,482 1,216 1,297 3,995
Purchases at cost 973 - 3,800 4,773
Disposal proceeds (1,493) - - (1,493)
Losses arising from the disposal
of investment (100) - - (100)
Investment holding gains/(losses) 38 (184) (53) (199)
Closing fair value at 29
February 2012 900 1,032 5,044 6,976
============ =========== ============ ========
Closing cost 900 1,230 5,111 7,241
Closing investment holding
losses - (198) (67) (265)
------------ ----------- ------------ --------
Level
Level 1 2 Level 3
Quoted Unquoted
Period ended 28 February
2011 Investments Derivative Investments Total
GBP'000 GBP'000 GBP'000 GBP'000
Group
Purchases at cost 2,758 1,230 - 3,988
Investment holding gains/(losses) 31 (14) - 17
Closing fair value at 28
February 2011 2,789 1,216 - 4,005
============ =========== ============ ========
Closing cost 2,758 1,230 3,988
Closing investment holding
gains/(losses) 31 (14) 17
------------ ----------- ------------ --------
Parent Company
Purchases at cost 2,758 1,230 1,311 5,299
Disposal Proceeds (1,311) - - (1,311)
Gains arising from the disposal
of investment 73 - - 73
Investment holding losses (38) (14) (14) (66)
Closing fair value at 28
February 2011 1,482 1,216 1,297 3,995
============ =========== ============ ========
Closing cost 1,520 1,230 1,311 4,061
Closing investment holding
losses (38) (14) (14) (66)
------------ ----------- ------------ --------
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
Group'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. Details of the nature of the investments are
given in the Investment Manager's Review on pages 6 to 7.
An analysis of money market funds is shown on page 8 in the
investment portfolio analysis. Money market funds are offshore
funds which invest in money markets and distribute all net income.
The value of the investments remains constantly at par and they are
realisable on demand.
The initial best estimate of fair value for the investments made
during the year is the transaction price which is cost.
12. Receivables
29 February 28 February
2012 2011
Parent Parent
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
Accrued income 1 1 27 27
Prepaid expenses 11 9 5 4
Other debtors 31 46 - -
43 56 32 31
-------- -------- -------- --------
13. Forward Contracts
Foreign currency forward contracts are recognised at fair value
within current assets based on the date of maturity. Changes to the
fair value of the contract are taken through the consolidated
statement of comprehensive income. During the year a loss of
GBP38,720 (2011: gain of GBP16,958) has been taken to capital
reserve through the consolidated statement of comprehensive income.
At 29 February 2012 the Group did not hold any forward contracts as
their purpose was to hedge foreign currency risk on the Group's
exposure to GAM Multi-Focused Macro SP USD Open and GAM
Multi-Systematic Trading USD Open, both of which have been sold
during the year.
14. Cash and Cash Equivalents
Cash and cash equivalents comprise deposits with The Royal Bank
of Scotland Plc.
15. Payables
29 February 2012 28 February 2011
Parent Parent
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
Payables 32 26 21 8
Accrued expenses 30 28 66 66
62 54 87 74
--------- -------- --------- --------
16. Share Capital- Group and Company
29 February 2012 28 February 2011
------------------------ ------------------------
Issued Issued
& &
Authorised Fully Paid Authorised Fully Paid
Ordinary Shares
of 1p
Number of shares 60,000,000 8,746,340 60,000,000 8,746,340
Par Value GBP'000 600 87 600 87
----------- ----------- ----------- -----------
On 24 February 2010 the Company issued 50,000 redeemable
preference shares of GBP1 each at 25p paid. These shares were
redeemed on 4 June 2010 and each redeemed share was redesignated
and redenominated as 100 Ordinary Shares of 1p.
17. Subsidiary
At 29 February 2012 and 28 February 2011 the Company had the
following subsidiary company:
Proportion of shares
held and voting
Country of rights by the parent
Nature of Activities Class of share capital Incorporation company
%
Starshell Limited Investment Ordinary Cyprus 100
18. Financial Instruments and Risk Management
The Group's financial instruments comprise VCT qualifying
investments, exposure to a hedge fund, money market instruments,
cash balances and liquid resources including debtors and creditors.
The Group holds financial assets in accordance with its investment
policy detailed in the Directors' Report on page 10.
The following table discloses the financial assets and
liabilities of the Group in the categories defined by IAS 39,
"Financial Instruments; Recognition & Measurement."
Financial
liabilities Fair value
held at through
Total Loan and amortised profit
value receivables cost or loss
GBP'000 GBP'000 GBP'000 GBP'000
Year ended 29 February
2012
Assets:
Financial assets at
fair value through
profit or loss 6,997 - - 6,997
Receivables 31 31 - -
Forward contracts - - - -
Accrued income 1 1 - -
Cash and cash equivalents 554 554 - -
7,583 586 - 6,997
-------- ------------- ------------- -----------
Liabilities:
Other payables 32 - 32 -
Accrued expenses 30 - 30 -
62 - 62 -
-------- ------------- ------------- -----------
Period ended 28 February
2011
Assets:
Financial assets at
fair value through
profit or loss 4,005 - - 4,005
Receivables - - - -
Forward contracts 17 17 - -
Accrued income 27 27 - -
Cash and cash equivalents 4,110 4,110 - -
8,159 4,154 - 4,005
-------- ------------- ------------- -----------
Liabilities:
Other payables 21 - 21 -
Accrued expenses 66 - 66 -
87 - 87 -
-------- ------------- ------------- -----------
Fixed Asset Investments (see note 11) are valued at fair value
through profit or loss. Unquoted investments are carried at fair
value as determined by the Directors in accordance with current
venture capital industry guidelines. The fair value of all other
financial assets and liabilities is represented by their carrying
value in the balance sheet.
In carrying out its investment activities, the Group is exposed
to various types of risk associated with the financial instruments
and markets in which it invests. The Group's approach to managing
its risks is set out below together with a description of the
nature of the financial instruments held at the balance sheet
date:
Market Risk
The Group'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 page 8.
The Group has an investment in a leveraged note issued by Exane
which, after leverage delivers exposure to GAM Trading. This
exposure is subject to market fluctuations affecting the underlying
hedge fund investments. In turn the effect of such fluctuations is
magnified by the leverage in the note. Both the Board and the
Investment Manager receive regular written reports and oral
briefings from GAM.
The Company through its subsidiary holding, Starshell Limited,
has a direct holding in GAM Trading II GBP 1.25XL, which carries
equivalent risks.
An increase of 1% in the value of investments would increase the
capital profits for the period and the net asset value at 29
February 2012 by GBP80,000. A decrease of 1% would reduce the
capital profits and net asset value by the same amount. A movement
of 1% is used as it is easy to use this as a multiple to
demonstrate the impact of varying changes on the capital profits
and net asset value of the Group.
At 29 February 2012 VCT qualifying investments accounted for 50%
of the Group's investments and the investment exposure in GAM
Trading accounted for 30%, and with leverage, exposure was 55%.
Interest Rate Risk
Some of the Group's financial assets are interest bearing, of
which some are at fixed rates and some at variable rates. As a
result, the Group is exposed to interest rate risk due to
fluctuations in the prevailing levels of market interest rates.
Investments made into qualifying holdings are part equity and
part loan. The loan element is subject to a fixed interest rate for
five years and therefore other than fair value risk there is not an
interest rate risk associated with these loans.
The amounts held in variable rate investments at the balance
sheet date are as follows:
29 February 2012 28 February 2011
GBP'000 GBP'000
Cash on deposit 554 4,110
Money market funds 900 -
1,454 4,110
----------------- -----------------
An increase in interest rates of 1% per annum would not have a
material effect on the revenue profits for the period and the net
asset value at 29 February 2012. The Board believes that in the
current economic climate a movement of 1% per annum 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 Group. 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.
29 February 2012 28 February 2011
GBP'000 GBP'000
Qualifying investments - loans 2,660 -
Cash on deposit 554 4,110
Money market funds 900 -
GAM Trading II GBP 1.25XL 1,265 1,307
GAM Multi-Focused Macro SP
USD Open - 1,157
GAM Multi-Systematic Trading
USD Open - 325
Exane Note 1,032 1,216
----------------- -----------------
6,411 8,115
----------------- -----------------
The Group's bank accounts are maintained with the Royal Bank of
Scotland ("RBS"). Should the credit quality or financial position
of RBS deteriorate significantly, the Investment Manager would
endeavour to move the cash holdings to another bank.
Credit risk relating to listed money market funds is mitigated
by the funds themselves investing in a portfolio of investment
instruments of high credit quality.
The Group is exposed to the credit risk of Exane through the
leveraged note. Should the credit quality or financial position of
Exane deteriorate significantly the Investment Manager could
(subject to notice periods) terminate the note.
Credit risk arising on unquoted loan stock held within unlisted
investment is considered to be part of market risk as disclosed
above.
Liquidity Risk
The Group'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 Group's money market funds are considered to be readily
realisable as they are of high credit quality as outlined
above.
The GAM exposure may have redemption periods that result in
investments being illiquid and not readily realisable.
The Group'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 Group's overall liquidity risks are
monitored by the Board on a quarterly basis.
The Board maintains a capital management policy in which
sufficient investments in cash and readily realisable money market
funds will be available to pay expenses. At 29 February 2012 these
amounted to GBP1,454,000 (28 February 2011: GBP4,110,000).
Currency Risk
The Group's exposure to the GAM Multi-Focused Macro SP USD Open
and the GAM Multi-Systematic Trading USD Open would have resulted
in an exposure to currency risk but this exposure was hedged with a
foreign currency forward contract. At 29 February 2012 the funds
had been sold and the forward contract closed.
19. Net Asset Value per Share
The calculation of Group and Company net asset value per share
is based on net assets of GBP7,532,208 (2011: GBP8,077,580) divided
by the 8,746,340 (2011: 8,746,340) shares in issue.
20. Commitments and Contingencies
The Group and the Company have no outstanding commitments or
contingent liabilities, other than for the additional VCT
qualifying investments listed on page 6.
21. Related Party Transactions
Chris Tottle, who was a director of the Company, has equity
interests in Triple Point LLP (TPLLP). TPLLP in turn has a
controlling interest in Triple Point Investment Management LLP
(TPIM). During the year, TPIM received GBP155,498 (2011:
GBP183,786), which has been expensed, for providing management and
administrative services to the Company.
22. Post Balance Sheet Events
The additional VCT qualifying investments detailed in the
Investment Manager's Review on page 6 are the only post balance
sheet events.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR ARMJTMBJBBIT
TP70 2010 Vct (LSE:TP7V)
Historical Stock Chart
Von Mai 2024 bis Jun 2024
TP70 2010 Vct (LSE:TP7V)
Historical Stock Chart
Von Jun 2023 bis Jun 2024
