TIDMTP7V
RNS Number : 1408P
TP70 2010 VCT PLC
03 June 2015
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 28
February 2015.
These results were approved by the Board of Directors on 3 June
2015.
You may view the Annual Report in due course on the Triple Point
website www.triplepoint.co.uk.
Financial Summary
Year ended Year ended
28 February 28 February
2015 2014
GBP'000 GBP'000
Net assets 8,536 7,563
Profit before tax 973 (38)
------------ ------------
Movement in net asset value
per share (p)
Opening net asset value per
share 86.47p 86.91p
Earnings per share 11.13p (0.44p)
Closing net asset value per
share 97.60p 86.47p
------------ ------------
For a GBP1 investment per share investors, with a sufficient
income tax liability in the relevant year, will have already
received 30p tax relief which, taken together with the current NAV
of 97.60p, totals 127.60p.
TP70 2010 VCT plc ("the Company") is a Venture Capital Trust
("VCT"). The Investment Manager is Triple Point Investment
Management LLP ("TPIM" or "Triple Point"). 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 Strategic Report on pages 2 to 15, the Directors' Report on
pages 16 to 25 and the Directors' Remuneration Report on pages 26
to 28 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 Company for the year ended 28 February
2015.
Strategic Report
The Strategic Report, on pages 2 to 15, 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 you to present the Financial Statements for TP70
2010 VCT plc ("the Company") for the year ended 28 February
2015.
Investment Portfolio
At the year end, the Company's funds are 93% invested in a
portfolio of both VCT qualifying and non-qualifying unquoted
investments.
The Company's portfolio of qualifying investments accounts for
80% of its net assets, thus maintaining its VCT qualifying status
by satisfying the test of being at least 70% invested in VCT
qualifying investments. These investments were selected for their
ability to yield high quality, predictable cash flows.
The qualifying investment sector composition of the portfolio
has remained stable for the year, and the Investment Manager's
report on pages 8 to 9 gives an update on the investments.
We are pleased to report that subsequent to the Company's year
end the solar PV companies in which it has invested have disposed
of a significant part of their portfolios of roof-mounted solar
systems. The disposal has resulted in an uplift to the valuation of
these investee companies of an aggregate GBP0.9 million, which is
the equivalent of 10.2p per share. We expect to be able to realise
our investments in these companies and distribute the proceeds in
the coming months. More information is given in the Investment
Manager's report.
The Company has disposed of its exposure to GAM Trading. It
realised its direct investment in GAM Trading II GBP 1.25XL on 31
December 2014 and the Derivative with Exane Bank on 31 March 2015.
Both of these realisations resulted in an uplift on the valuation
at which they were held.
Net Asset Value
During the year the Company made a profit of GBP973,000 or
11.13p per share. This resulted primarily from the revaluation of
its investments in the solar sector as described above as well as
an uplift of 2.21p per share on its GAM exposure. As at 28 February
2015 the NAV per share stood at 97.60p, which is an 11.13p per
share increase from last year.
Dividend
Following the end of the period the Company announced its first
dividend. This was paid from the first portion of funds realised
from the GAM exposure. . The total dividend was GBP500,000, equal
to 5.72p per share, and was paid to shareholders on 8 May 2015.
The Board has resolved to pay a further dividend to shareholders
of GBP1.6million equal to 18.3p per share which will be paid on 3
July 2015 to shareholders on the register on 19 June 2015.
Risks
The Board believes that the principal risks facing the Company
are:
-- risk of failure to maintain approval as a VCT;
-- risk of inability to realise investments in order to return
funds to investors after the five year holding period; and
-- investment risk associated with VCT qualifying
investments.
The Board believes these risks are manageable and, with the
Investment Manager, continues to work to minimise both the
likelihood and potential impact of these risks, within the scope of
the Company's established investment strategy.
Outlook
At the date of signing, all of the Company's shareholders have
held their shares for the five years required in order to secure
the upfront income tax relief. In line with the VCT's investment
strategy, both your Board and Triple Point are planning to return
all funds to shareholders as soon as is practicable after this
point and the process of realising investments has already
begun.
These Financial Statements have been prepared on a break up
basis to reflect the intention to realise the assets of the Company
within the next six to twelve months after which the Directors will
seek shareholders' approval to place the Company into Members'
Voluntary Liquidation.
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
3 June 2015
Company Strategy and Business Model
The Directors assess the Company's success in meeting its
objectives in relation to returns, stability, VCT qualification
and, ultimately, exit.
Performance Update
At launch the Company targeted a post-tax return of 9% to 12%
pa, to be delivered from a combined exposure to a leveraged version
of GAM Trading II and unquoted qualifying investments. That
delivery strategy was later modified when the continuing liquidity
crunch meant that the planned leverage could not be secured.
On a weighted average share price a target 9% return is broadly
equivalent to a net asset value at exit of 111.1p. This compares to
a net asset value per share at 28 February 2015 of 97.60p.
The reported net asset value reflects the positive performance
of the unquoted qualifying investments offset by the under
performance resulting from the exposure to GAM strategies over the
life of the Company.
The Company reported an income loss of 1.14p per share and a
capital return of 12.27p per share for the year to 28 February
2015. This compared with an aggregate loss for the previous year of
0.44p per share. This is largely due to the revaluation within the
solar portfolio providing a valuation uplift of 10.20p as well as
an improved performance of the GAM Strategies which delivered a
return of 2.21p for the year ended 28 February 2015.
A review of the performance of the Company's investments during
the financial year, the position of the Company at the year end and
the outlook for the coming year is contained within the Chairman's
statement on pages 2 to 3 and the Investment Manager's Review on
pages 8 to 9.
Dividend Policy
The Board's dividend policy is to pay shareholders the required
distribution for VCT status. No more than 15% of income from shares
and securities may be retained. The Company has now paid its first
dividend and intends to distribute all realisations as soon as
possible.
Investment Policy
To comply with VCT rules, the Company must within a three year
period have (and subsequently maintain) at least 70% by value of
its investments represented by qualifying investments. The
Company's objective was to invest at least 70% of the net proceeds
of the offers in qualifying investments, typically in investments
ranging between GBP500,000 and GBP2,000,000, in less than three
years. Prior to investment in qualifying investments, approximately
70% of the value of its investments was to be held in cash, liquid
investments and investments similar to the qualifying investments.
No single investment by the Company represents more than 15% by
value of the Company's investments at the time of the
investment.
Qualifying Investments
The Company has pursued investments in a range of businesses but
those targeted were subject to the specific investment criteria
discussed below. The objective was to build a reasonably
diversified portfolio of young, 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 businesses, the Company's portfolio
comprises companies with certain characteristics, for example,
clear, commercial and financial objectives, strong customer
relationships and where possible tangible assets with value. TPIM
focused 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 were also considered. The
objective is to reduce the risk of losses through reliability of
cash flow or quality of asset backing and to provide investors with
a potentially attractive income stream and modest but accessible
capital growth.
Non-Qualifying Investments
Prior to the third anniversary after which the Company may have
no more than 30% of the net proceeds of the offers in
non-qualifying investments, the Company invested up to 49% of the
net asset value in a portfolio comprising directly or indirectly,
GAM Trading 1.25xl GBP, GAM Multi-Focused Macro SP USD Open, GAM
Multi-Systematic Trading USD Open and a derivative in respect of
GAM Trading II GBP Open with 2.5 times leverage (the "Index"). The
Index, through its components, provides exposure similar to that of
GAM Trading II Inc.'s fund of hedge funds, GAM Trading II- GBP
Open, leveraged one and a half times with the objective of
providing capital appreciation with diversification of risk.
The non-qualifying investments not invested in the above
portfolio consist of cash and liquid investments.
TPIM aimed to achieve the Company's objectives (relatively low
risk of capital loss, low correlation to traditional asset classes
and a rapid exit after five years) in part by investing on the
basis of certain conservative principles in both fund of hedge
funds and venture capital investments:
Fund of hedge funds ("non-qualifying" investments under the tax
rules applying to VCTs):
-- in appointing GAM as its sub-adviser to select funds of hedge
funds, TPIM selected one of the acknowledged leaders in the fund of
hedge fund management industry.
In respect of Venture Capital Investments (which represent
qualifying investments under the tax rules applying to VCTs) TPIM
sought:
-- investments in which robust due diligence has been undertaken into target investments;
-- investments in which there is a high level of access to
regular material financial and other information;
-- investments in which the risk of capital losses is minimised
through careful analysis of the collateral available to investee
companies; and
-- investments in which there is a strong relationship with the key decision makers.
The Directors intend to return cash raised from exits promptly
to shareholders, who will be given the opportunity to vote for the
Company's discontinuation after six years from 30 April 2010.
Investment classification by asset value and sector value are
shown below:
Investment Portfolio
Cash 7%
Derivative 13%
VCT Qualifying Investments* 80%
* Includes assets held for sale
Qualifying Investments by Sector
Cinema Digitisation 16%
Solar PV* 64%
Anaerobic Digestion* 11%
Landfill Gas 9%
* Assets held for sale
Tax Benefits
Investing in a VCT brings the benefit of tax-free dividends, as
well as up-front income tax relief. The Company has over 70% of its
net asset value invested in VCT qualifying investments and
continues to meet the VCT qualification requirements which are
continuously monitored by the Investment Manager and reviewed by
the Directors.
VCT Regulation
VCTs were introduced in the Finance Act 1995 to provide a means
for private individuals to invest in unquoted companies in the UK.
The Finance Act 2004 introduced changes to VCT legislation designed
to make VCTs more attractive to investors. The tax benefits
available to eligible investors in VCTs include:
-- up-front income tax relief of 30%
-- exemption from income tax on dividends received
-- exemption from capital gains tax on disposals of shares in VCTs.
The Company was provisionally approved as a VCT by Her Majesty's
Revenue and Customs. In order to secure final approval the Company
must comply with certain requirements on a continuing basis. Within
three years from the effective date of provisional approval or
later allotment at least 70% of the Company's investments must
comprise "qualifying holdings" of which at least 30% must be in
eligible ordinary shares. This investment criterion has now been
achieved.
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 Robertson Hare
LLP to undertake an independent VCT status monitoring role.
Exit Programme
The Company is committed to realising its investments and
returning funds to shareholders as soon as practicable after the
end of the five year holding period. The Directors and the Manager
have put in place a programme to manage the investment realisations
over the course of 2015. As described in the Investment Managers
Report the Company has begun the process of realising its
investments. The Investment Manager has successfully implemented
exit plans for other VCTs under its management.
Principal Risks and Risk Management
The Directors carry out a regular review of the environment in
which the Company operates. 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.
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. The Directors' and
Investment Manager aim to limit the risk attached to the portfolio
as a whole by careful selection and timely realisation of
investments, by carrying out rigorous due diligence procedures and
by maintaining a spread of holdings in terms of industry sector and
geographical location. The Board reviews the investment portfolio
with the Investment Manager on a regular basis.
Financial instrument risk: Financial Instrument risks are
described in note 16.
Financial risk: as 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.
Internal control risk: the Board regularly reviews the system of
internal controls, both financial and non-financial, operated by
the Company and the Investment Manager. These include controls
designed to ensure that the Company's assets are safeguarded and
that proper accounting records are maintained.
Share Price Discount Policy
The Company has a share buy-back facility, committing to buy
back shares at no more than a 10% discount to the prevailing NAV,
subject to the Directors' discretion. We will be asking
shareholders at the Annual General Meeting to extend the facility
for the Company to purchase shares in the market for
cancellation.
Environmental, Social, Employee and Human Rights Issues
Due to the nature of the Company's activities, there being no
employees and only 3 Non-Executive Directors, there are no Human
Rights Issues to report. Its investment in companies engaged in the
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 a female managing partner and has 44 staff
and members of whom 26 are men and 18 are women.
Investment Manager's Review
Over the year the Company has continued to maintain a stable
portfolio of qualifying investments, which as at 28 February 2015,
represented 80% of net assets, ensuring that the Company continues
to satisfy the requirement to be 70% invested in qualifying
investments.
The overall portfolio at the year end comprised of investments
in 14 small, unquoted companies in two sectors: cinema digitisation
and renewable electricity generation from solar PV, anaerobic
digestion and landfill gas.
Each of these investments meets Triple Point's investment
criteria, with projected revenues generated by good quality
customers and the potential for steady returns. Investments in both
sectors have been made with the benefit of rigorous selection
criteria, including extensive due diligence and expert technical
assessment and are subject to continuous stringent review.
Following the year end the companies within the solar PV sector
sold a significant proportion of their portfolio of solar assets.
This large scale sale of solar assets was the first of its kind in
the VCT sector.
The Company first invested in solar generating companies at a
time when the Government was looking to accelerate the take-up of
solar PV and renewable electricity generation generally in the UK
and the businesses in which the Company invested were predominately
operating a large portfolio of residential roof-mounted generating
stations. Since 2011, solar PV has become a recognised technology
in this country with over 500,000 residential solar PV systems now
in operation. The solar generating companies therefore had a well
established business model and the solar assets had also developed
a successful operational track record, making them an attractive
prospect for sale, particularly to institutional funds. The latter
have shown a greater interest in renewable and solar assets
recently, as they seek long life assets with index-linked revenue
streams, an advantage identified by the VCT a number of years
ago.
This institutional appetite, combined with lower discount rates
(UK 10 year gilts yields have fallen by over 150 basis points in
the last 3 years) enabled the companies to arrange a successful
disposal, which has delivered a 10.2p per share uplift to the net
asset value.
Sector Analysis
The unquoted qualifying investment portfolio can be analysed as
follows:
Electricity Generation
Anaerobic
Solar Digestion Landfill Total Qualifying
Industry Sector Cinema Digitisation PV * * Gas Investments
------------------------------- -------------------- -----------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------------------- -------- ----------- --------- -----------------
Investments at 28 February
2014 1,079 3,508 725 650 5,962
------------------------------- -------------------- -------- ----------- --------- -----------------
Investments disposed of
during the year - - - - -
------------------------------- -------------------- -------- ----------- --------- -----------------
Investments made during
the year - - - - -
------------------------------- -------------------- -------- ----------- --------- -----------------
Investments valuations during
the year 34 893 - - 927
------------------------------- -------------------- -------- ----------- --------- -----------------
Investments at 28 February
2015 1,113 4,401 725 650 6,889
------------------------------- -------------------- -------- ----------- --------- -----------------
Qualifying Investments % 16.16% 63.88% 10.52% 9.44% 100.00%
------------------------------- -------------------- -------- ----------- --------- -----------------
* Assets held for sale
VCT Sector Portfolio
Solar PV
The portfolio comprises investments in 10 businesses in the
solar PV sector which generate renewable electricity from
residential solar PV panels. Over the six months to 28 February
2015 these businesses continued to deliver results in line with
expectations. Following the year end these companies have disposed
of a significant part of their portfolios of roof-mounted solar
systems. It is expected that this portfolio will be realised in the
coming months.
Cinema Digitisation
Over the year, TP70 2010's cinema digitisation portfolio
continued to perform as intended, with the companies benefitting
from regular and reliable revenues from their operations in the UK,
Italy and Ireland. It is expected this portfolio will be realised
during the course of the summer.
Anaerobic Digestion
In March 2012 the Company invested in a renewable energy
business, Katharos Organic Ltd. The business operates a 1 MW
on-farm anaerobic digestion plant, which generates green
electricity attracting both Feed-in Tariffs and power export
revenues. FITs provide for a long term RPI-linked revenue stream,
consistent with the objectives of the Company. The Company is
currently in discussions for a trade sale of these investments.
Landfill Gas
Craigahulliar Energy Ltd and Aeris Power Ltd each generates
renewable electricity from landfill gas at sites owned respectively
by local councils and a large waste management company in Northern
Ireland. Both businesses continue to generate electricity for
export to the National Grid, earning long term, reliable cash flows
through the sale of electricity to a utility company and
potentially to the site owners, and through the sale of the
Renewable Obligation Certificates. These long term cash flows are
attractive to potential buyers and will help in the disposals of
the portfolio.
Outlook
With the fifth anniversary being reached in June, plans for the
realisation of the Company's remaining investments are now at an
advanced stage. This programme is designed to deliver an exit for
investors as soon as practicable, and we continue to work closely
with the Board and all the portfolio companies to meet investors'
expectations.
If you have any questions, please do not hesitate to call us on
020 7201 8989.
Mike Bayer
Partner
for Triple Point Investment Management LLP
3 June 2015
Investment Portfolio Summary
28 February 2015 28 February 2014
------------------------------------ ------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unquoted Investments
Qualifying Holdings 5,665 75.46 6,889 79.63 5,665 74.97 5,962 78.36
Non Qualifying Holdings
GAM Exposure
GAM Trading II GBP 1.25XL - - - - 608 8.04 605 7.95
Derivative 1,230 16.38 1,146 13.25 1,230 16.27 988 12.98
Financial Assets at
fair value through profit
or loss 6,895 91.84 8,035 92.88 7,503 99.28 7,555 99.29
Cash and cash equivalents 615 8.16 615 7.12 55 0.72 55 0.71
7,510 100.00 8,650 100.00 7,558 100.00 7,610 100.00
======== ======= ======== ======= ======== ======= ======== =======
Unquoted Qualifying
Holdings
Cinema Digitisation
DLN Digital Ltd 1,000 13.32 1,113 12.87 1,000 13.23 1,079 14.18
Electricity Generation
Solar*
AH Power Ltd 400 5.33 502 5.80 400 5.29 401 5.27
Arraze Ltd 500 6.66 667 7.71 500 6.62 542 7.12
Bandspace Ltd 500 6.66 688 7.95 500 6.62 564 7.41
Bridge Power Ltd 250 3.33 334 3.86 250 3.31 269 3.53
Core Generation Ltd 250 3.33 343 3.97 250 3.31 270 3.55
Druman Green Ltd 250 3.33 336 3.88 250 3.31 267 3.51
Fellman Solar Ltd 250 3.33 335 3.87 250 3.31 266 3.50
Haul Power Ltd 250 3.33 345 3.99 250 3.31 265 3.48
Helioflair Ltd 400 5.33 508 5.87 400 5.29 398 5.23
Trym Power Ltd 250 3.33 343 3.97 250 3.31 266 3.50
Anaerobic Digestion* - - -
Katharos Organic Ltd 725 9.65 725 8.38 725 9.59 725 9.53
Landfill Gas - - -
Aeris Power Ltd 400 5.33 400 4.62 400 5.29 400 5.26
Craigahulliar Energy
Ltd 240 3.20 250 2.89 240 3.18 250 3.29
5,665 75.46 6,889 79.63 5,665 74.97 5,962 78.36
======== ======= ======== ======= ======== ======= ======== =======
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.
On 22 March 2015 the companies in the solar PV sector sold a
portfolio of assets resulting in an uplift in their valuation for
the Company of GBP0.9 million. At 28 February 2015 these companies
are treated as assets held for sale.
*Assets held for sale
Investment Portfolio's Ten Largest Unquoted Investments
Aeris Power Ltd *
Equity
Income recognised Held
by TP70 2010 by TP70 Equity Held
Date of Valuation Valuation for the year 2010 by TPIM managed
first investment Cost GBP GBP Method GBP'000 % funds %
Discounted
04-Apr-12 400,000 400,000 Cashflow 14 19.64 98.19
Summary of Information from Investee Company Financial
Statements ending in 2014: GBP'000
Turnover 0
Earnings before interest, tax, amortisation and depreciation
(EBITDA) (27)
Profit before tax 12
Net Assets before
VCT loans 1,983
Net Assets 793
Aeris Power Ltd was established to take advantage of the opportunity
to generate renewable electricity by extracting landfill gas at former
local authority and landfill sites in Northern Ireland, with revenues
supported by ROCs. Aeris Power Limited has provided Drumanakelly Power
Limited, its wholly owned subsidiary, with a loan facility enabling
it to construct and operate these landfill sites.
------------------------------------------------------------------------------------------------------------
AH Power
Ltd *
Equity
Income recognised Held
by TP70 2010 by TP70 Equity Held
Date of first Valuation Valuation for the year 2010 by TPIM managed
investment Cost GBP GBP Method GBP'000 % funds %
05-Dec-11 400,000 502,000 Sale price 14 19.61 98.05
Summary of Information from Investee Company Financial
Statements ending in 2014: GBP'000
Turnover 201
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 148
Profit before tax 1
Net assets before
VCT loans 1,922
Net assets 522
AH Power Ltd is a small venture capital funded business with an established
portfolio of roof mounted, residential solar PV systems which have
been generating electricity since 2011. The company has stable, long
term cash flows as a result of RPI linked revenues supported by the
UK Government Feed-in Tariff scheme. It expanded its business with
the purchase of additional solar PV systems in 2013.
-----------------------------------------------------------------------------------------------------
Arraze
Ltd *
Equity
Income recognised Held
by TP70 2010 by TP70 Equity Held
Date of Valuation Valuation for the year 2010 by TPIM managed
first investment Cost GBP GBP Method GBP'000 % funds %
30-Mar-11 500,000 667,000 Sale price 17 15.92 98.7
Summary of Information from Investee Company Financial
Statements ending in 2014: GBP'000
Turnover 345
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 255
Profit before tax 31
Net assets before
VCT loans 3,005
Net assets 1,075
Arraze Limited generates renewable electricity from its portfolio of
residential roof mounted solar PV systems which it owns and operates
at sites across the UK. The company has stable, long term cash flows
as a result of RPI linked revenues supported by the UK Government Feed-in
Tariff scheme. After its initial purchase in November 2011, the business
expanded its portfolio with further acquisitions in both 2012 and in
2013.
---------------------------------------------------------------------------------------------------------
Bandspace Ltd *
Equity
Income recognised Held
by TP70 2010 by TP70 Equity Held
Date of Valuation Valuation for the year 2010 by TPIM managed
first investment Cost GBP GBP Method GBP'000 % funds %
30-Mar-11 500,000 688,000 Sale price 17 15.43 98.75
Summary of Information from Investee Company Financial
Statements ending in 2014: GBP'000
Turnover 373
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 288
Profit before tax 57
Net assets before
VCT loans 3,221
Net assets 981
Bandspace Ltd is a small business that owns a portfolio of roof mounted
solar PV systems which have been generating renewable electricity since
2011. The company has stable, long term cash flows as a result of RPI
linked revenues supported by the UK Government Feed-in Tariff scheme.
It expanded its business with the purchase of additional solar PV systems
in both 2012 and 2013.
---------------------------------------------------------------------------------------------------------
Core Generation Ltd
*
Income recognised Equity
by TP70 2010 Held by Equity Held
Date of Valuation Valuation for the year TP70 2010 by TPIM managed
first investment Cost GBP GBP Method GBP'000 % funds %
04-Apr-11 250,000 343,000 Sale price 9 9.47 98.46
Summary of Information from Investee Company Financial
Statements ending in 2014: GBP'000
Turnover 295
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 215
Profit before tax 26
Net assets before
VCT loans 2,524
Net assets 944
Core Generation Ltd has been operating in the residential solar PV market
since 2011, when it purchased a portfolio of roof mounted solar PV systems.
The company has stable, long term cash flows as a result of RPI linked
revenues supported by the UK Government Feed-in Tariff scheme. The business
expanded its portfolio with further acquisitions in both 2012 and 2013.
-----------------------------------------------------------------------------------------------------------
DLN Digital Ltd
Income recognised Equity
by TP70 2010 Held by Equity Held
Date of Valuation Valuation for the year TP70 2010 by TPIM managed
first investment Cost GBP GBP Method GBP'000 % funds %
Discounted
30-Mar-12 1,000,000 1,113,000 cashflow 35 32.25 96.75
Summary of Information from Investee Company Financial
Statements ending in 2014: GBP'000
Turnover 1,586
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 1,390
Loss before tax (177)
Net assets before
VCT loans 4,577
Net assets 1,730
DLN Digital Ltd owns, maintains and operates digital equipment at cinemas
in the UK, Ireland and Italy, covering 131 screens. It continues to perform
in line with its objectives. Digital cinema projection conversion is
paid for under the globally recognised Virtual Print Fee model, through
which film studios pay for the cost of the deployment over a number of
years with the majority of the company's revenues derived ultimately
from the six major investment grade Hollywood Studios.
--------------------------------------------------------------------------------------------------------------
Haul Power Ltd *
Income recognised Equity
by TP70 2010 Held by Equity Held
Date of Valuation Valuation for the year TP70 2010 by TPIM managed
first investment Cost GBP GBP Method GBP'000 % funds %
04-Apr-11 250,000 345,000 Sale price 9 12.25 98.00
Summary of Information from Investee Company Financial Statements
ending in 2014: GBP'000
Turnover 225
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 152
Profit before tax 7
Net assets before
VCT loans 1,925
Net assets 525
Haul Power Ltd has been generating renewable electricity from its portfolio
of roof mounted solar PV systems since 2011. The company has stable,
long term cash flows as a result of RPI linked revenues supported by
the UK Government Feed-in Tariff scheme. It expanded its business with
the purchase of additional solar PV systems in 2013.
-----------------------------------------------------------------------------------------------------------
Helioflair
Ltd *
Equity
Income recognised Held
by TP70 2010 by TP70 Equity Held
Date of first Valuation Valuation for the year 2010 by TPIM managed
investment Cost GBP GBP Method GBP'000 % funds %
05-Dec-11 400,000 508,000 Sale price 14 19.61 98.04
Summary of Information from Investee Company Financial
Statements ending in 2014: GBP'000
Turnover 214
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 167
Profit before tax 20
Net assets before VCT
loans 1,944
Net assets 544
Helioflair Ltd generates renewable electricity from its portfolio of
residential roof mounted solar PV systems which it owns and operates
at sites across the UK. The company has stable, long term cash flows
as a result of RPI linked revenues supported by the UK Government Feed-in
Tariff scheme. Helioflair established its portfolio of solar PV systems
in 2011, since then the business has expanded with further purchases
in both 2012 and 2013.
----------------------------------------------------------------------------------------------------------
Katharos Organic
Ltd *
Equity
Income recognised Held Equity Held
Date of by TP70 2010 by TP70 by TPIM
first Valuation for the year 2010 managed
investment Cost GBP GBP Valuation Method GBP'000 % funds %
Discounted sale
30-Mar-12 725,000 725,000 price 25 19.38 98.68
Summary of Information from Investee Company Financial
Statements ending in 2014: GBP'000
Turnover 1,347
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 474
Loss before tax 193
Net assets before
VCT loans 3,300
Net assets 500
Katharos Organic Ltd has funded the construction of a farm based anaerobic
digestion plant in Essex. The plant is fully operational and utilises
agricultural feed stocks which are converted into a methane rich biogas
in order to produce green electricity using a 1 MW Jenbacher CHP (combined
heat and power) engine. The business derives its revenues from the export
and sale of the electricity it produces, as well as from Feed-in Tariffs,
which it is entitled to in respect of its production of green electricity.
These provide the company with 20 years of RPI linked cash flows.
-----------------------------------------------------------------------------------------------------
Trym Power Ltd *
Income recognised Equity Equity
by TP70 2010 Held by Held by
Date of first Valuation for the year TP70 2010 TPIM managed
investment Cost GBP GBP Valuation Method GBP'000 % funds %
14-Nov-11 250,000 343,000 Sale price 9 11.86 98.06
Summary of Information from Investee Company Financial Statements
ending in 2014: GBP'000
Turnover 252
Earnings before interest, tax, amortisation and depreciation
(EBITDA) 179
Profit before tax 20
Net assets before VCT
loans 2,127
Net assets 667
Trym Power Ltd generates renewable electricity from its portfolio of
residential roof mounted solar PV systems which it owns and operates
at sites across the UK. The company has stable, long term cash flows
as a result of RPI linked revenues supported by the UK Government Feed-in
Tariff scheme. Having established its business in 2011, Trym Power has
continued to grow and has purchased additional systems in both 2012 and
2013.
----------------------------------------------------------------------------------------------------------
* Assets held for sale
-- 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.
Charles Metcalfe
Chairman
3 June 2015
Report of the Directors
The Directors present their Report and the audited Financial
Statements for the year ended 28 February 2015.
Details of Directors
Charles Metcalfestarted his career at JPMorgan, first within the
commodities area and then emerging markets corporate finance. After
nine years he moved to investment management, first at Merrill
Lynch and later Goldman Sachs, focusing on institutional clients in
Europe and the Middle East. After an entrepreneurial spell running
a start up e-commerce investment firm, he was appointed as Deputy
CEO of Hermes Investment Management and later became CEO of First
State Investments, the Emerging Market specialist house. Until
recently he was the CEO of Nikko Asset Management Europe, an Asia
focused investment business. Charlie is a Trustee to Leukaemia
& Lymphoma Research and to the Sainsbury family Kay Kendal
Leukaemia Fund. He is also an adviser to Auden Capital, a boutique
corporate finance firm within the investment industry. He is a
graduate of Yale University.
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 Triple Point
Income VCT plc, and various other private companies and charities,
and a member of the investment committee of the British Business
Bank's Angel Co-Fund.
Professor Elroy Dimson is Professor of Finance at Cambridge
Judge Business School and Emeritus Professor of Finance at London
Business School. He is Chairman of the Strategy Council for the
Norwegian Government Pension Fund and Chairman of the FTSE Policy
Group. He previously served London Business School in a variety of
senior positions. He has held board and investment committee
positions in listed investment companies, pension funds, and
charitable endowments.
Simon Acland being a Director of another TPIM managed VCT is not
considered independent. Therefore he will retire and offer himself
for re-election at the Annual General Meeting to be held on 9 July
2015. Both Charles Metcalfe and Professor Elroy Dimson are deemed
to be independent.
The Board has considered provision B.7.2 of the UK Corporate
Governance Code (September 2012) 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 page 20 which
demonstrates the Boards compliance with the UK Corporate Governance
code.
Activities and Status
The Company is a Venture Capital Trust and its main activity is
investing.
The Company has been provisionally approved as a VCT by
HMRC.
The Company is registered in England as a Public Limited Company
(Registration number 7039066). The Directors have managed, and
intend to continue to manage, the Company's affairs in such a
manner as to comply with Section 274 of the Income Tax Act 2007
which grants approval as a VCT.
The Company was not at any time up to the date of this report a
close company within the meaning of S439 of the Corporation Tax Act
2010.
Post Balance Sheet Events
For details of post balance sheet events see note 21.
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, 6 and 7.
Corporate Governance
Full details are given in the Corporate Governance Statement,
which forms part of this Report of the Directors, and can be found
on pages 20 to 24.
Management
TPIM acts as Investment Manager to the Company. The principal
terms of the Company's management agreement with TPIM are set out
in note 5 to the Financial Statements.
The Board has evaluated the performance of the Investment
Manager based on the returns generated since taking on the
management of the Fund and a review of the management contract and
the services provided in accordance with its terms. As required by
the Listing Rules, the Directors confirm that in their opinion the
continuing appointment of TPIM as Investment Manager is in the best
interests of the shareholders as a whole. In reaching this
conclusion the Directors have taken into account the performance of
other VCTs managed by TPIM and the service provided by TPIM to the
Company.
Substantial Shareholdings
As at the date of this report no disclosures of major
shareholdings had been made to the Company under Disclosure and
Transparency Rule 5 (Vote Holder and Issuer Notification
Rules).
Global Greenhouse Gas Emissions
The Company has no greenhouse gas emissions to report from the
operations of its Company, nor does it have responsibility for any
other emission producing sources under the Companies Act 2006
(Strategic Report and Directors' Reports) Regulations 2013.
Annual General Meeting
Notice convening the 2015 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's share capital is GBP600,000 divided into
60,000,000 shares of 1p each, of which 8,746,340 shares were in
issue at 28 February 2015. As at that date none of the issued
shares was held by the Company as treasury shares. Subject to any
suspension or abrogation of rights pursuant to relevant law or the
Company's articles of association, the shares confer on their
holders (other than the Company in respect of any treasury shares)
the following principal rights:
a) the right to receive out of profits available for
distribution such dividends as may be agreed to be paid (in the
case of a final dividend in an amount not exceeding the amount
recommended by the Board as approved by shareholders in general
meeting or in the case of an interim dividend in an amount
determined by the Board). All dividends unclaimed for a period of
12 years after having become due for payment are forfeited
automatically and cease to remain owing by the Company;
b) the right, on a return of assets on a liquidation, reduction
of capital or otherwise, to share in the surplus assets of the
Company remaining after payment of its liabilities pari passu with
other holders of ordinary shares; 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 (principally the Companies Act 2006).
A member may choose whether his or her shares are evidenced by
share certificates (certificated shares) or held in electronic
(uncertificated) form in CREST (the UK electronic settlement
system). Any member may transfer all or any of his or her shares,
subject in the case of certificated shares to the rules set out in
the Company's articles of association or in the case of
uncertificated shares to the regulations governing the operation of
CREST (which allow the Directors to refuse to register a transfer
as therein set out); the transferor remains the holder of the
shares until the name of the transferee is entered in the register
of members. The Directors may refuse to register a share transfer
if it is in respect of a certificated share which is not fully paid
up or on which the Company has a lien provided that, where the
share transfer is in respect of any share admitted to the Official
List maintained by the UK Listing Authority, any such discretion
may not be exercised so as to prevent dealings taking place on an
open and proper basis, or if in the opinion of the Directors (and
with the concurrence of the UK Listing Authority) exceptional
circumstances so warrant, provided that the exercise of such power
will not disturb the market in those shares. Whilst there are no
squeeze-out and sell-out rules relating to the shares in the
Company's articles of association, shareholders are subject to the
compulsory acquisition provisions in S974 to S991 of the Companies
Act 2006.
Amendment of Articles of Association
The Company's articles of association may be amended by the
members of the Company by special resolution (requiring a majority
of at least 75% of the persons voting on the relevant
resolution).
Appointment and Replacement of Directors
A person may be appointed as a Director of the Company by the
shareholders in general meeting by ordinary resolution (requiring a
simple majority of the persons voting on the relevant resolution)
or by the Directors; no person, other than a Director retiring by
rotation or otherwise, shall be appointed or re-appointed a
Director at any general meeting unless he or she is recommended by
the Directors or, not less than 7 nor more than 42 clear days
before the date appointed for the meeting, notice is given to the
Company of the intention to propose that person for appointment or
re-appointment in the form and manner set out in the Company's
articles of association.
Each Director who is appointed by the Directors (and who has not
been elected as a Director of the Company by the members at a
general meeting held in the interval since his appointment as a
Director of the Company) is to be subject to election as a Director
of the Company by the members at the first Annual General Meeting
of the Company following his or her appointment. At each Annual
General Meeting of the Company one third of the Directors for the
time being, or if their number is not three or an integral multiple
of three the number nearest to but not exceeding one third, are to
be subject to re-election.
The Companies Act allows shareholders in general meeting by
ordinary resolution (requiring a simple majority of the persons
voting on the relevant resolution) to remove any Director before
the expiring of his or her period of office, but without prejudice
to any claim for damages which the director may have for breach of
any contract of service between him or her and the Company.
A person also ceases to be a Director if he or she resigns in
writing, ceases to be a Director by virtue of any provision of the
Companies Act, becomes prohibited by law from being a Director,
becomes bankrupt or is the subject of a relevant insolvency
procedure, or becomes of unsound mind, or if the Board so decides
following at least six months' absence without leave or if he or
she becomes subject to relevant procedures under the mental health
laws, as set out in the Company's articles of association.
Powers of the Directors
Subject to the provisions of the Companies Act, the memorandum
and articles of association of the Company and any directions given
by shareholders by special resolution, the articles of association
specify that the business of the Company is to be managed by the
Directors, who may exercise all the powers of the Company, whether
relating to the management of the business or not. In particular,
the Directors may exercise on behalf of the Company its powers to
purchase its own shares to the extent permitted by
shareholders.
Auditor
Grant Thornton UK LLP offers itself for reappointment as
auditor. In accordance with S489(4) of the Companies Act 2006 a
resolution to reappoint Grant Thornton UK LLP as auditor will be
proposed at the forthcoming Annual General Meeting.
On behalf of the Board.
Charles Metcalfe
Director
3 June 2015
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 2013) by reference to the
Association of Investment Companies Corporate Governance Guide for
Investment Companies (AIC Guide). The AIC Code 2013, as explained
by the AIC Guide, addresses all the principles set out in the UK
Corporate Governance Code (September 2012), 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
2013, by reference to the AIC Guide, which incorporates the UK
Corporate Governance Code (September 2012), will provide improved
reporting to shareholders.
The Company is committed to maintaining high standards in
corporate governance and has complied with the recommendations of
the AIC Code 2013 and the relevant provisions of the UK Corporate
Governance Code (September 2012), except as set out at the end of
this report in the Compliance Statement.
The Corporate Governance Statement forms part of the Report of
the Directors.
Board of Directors
The Company has a Board of three Non-Executive Directors. Since
all Directors are Non-Executive and day-to-day management
responsibilities are sub-contracted to the Investment Manager, the
Company does not have a Chief Executive Officer. The Directors have
a range of business and financial skills which are relevant to the
Company; these are described on page 16 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.
Any appointment of new Directors to the Board is conducted, and
appointments made, on merit and with due regard for the benefits of
diversity on the Board, including gender. All Directors are able to
allocate sufficient time to the Company to discharge their
responsibilities.
The Board meets regularly on a quarterly basis, and on other
occasions as required, to review the investment performance and
monitor compliance with the investment policy laid down by the
Board. There is a formal schedule of matters reserved for Board
decision and the agreement between the Company and the Manager has
authority limits beyond which Board approval must be sought.
The Investment Manager has authority over the management of the
investment portfolio, the organisation of custodial services,
accounting, secretarial and administrative services. In practice
the Investment Manager makes investment recommendations for the
Board's approval. In addition all investment decisions involving
other VCTs managed by the Investment Manager are taken by the Board
rather than the Investment Manager. Other matters reserved for the
Board include:
-- the consideration and approval of future developments or
changes to the investment policy, including risk and asset
allocation;
-- consideration of corporate strategy;
-- approval of any dividend or return of capital to be paid to the shareholders;
-- the appointment, evaluation, removal and remuneration of the Investment Manager;
-- the performance of the Company, including monitoring the net asset value per share; and
-- monitoring shareholder profiles and considering shareholder communications.
The Chairman leads the Board in the determination of its
strategy and in the achievement of its objectives. The Chairman is
responsible for organising the business of the Board, ensuring its
effectiveness and setting its agenda, and has no involvement in the
day to day business of the Company. He facilitates the effective
contribution of the Directors and ensures that they receive
accurate, timely and clear information and that they communicate
effectively with shareholders. The Chairman does not have
significant commitments conflicting with his obligations to the
Company.
The Company Secretary is responsible for advising the Board on
all governance matters. All of the Directors have access to the
advice and services of the Company Secretary which has
administrative responsibility for the meetings of the Board and its
committees. Directors may also take independent professional advice
at the Company's expense where necessary in the performance of
their duties. As all of the Directors are Non-Executive, it is not
considered appropriate to identify a member of the Board as the
senior Non-Executive Director of the Company.
The Company's articles of association and the schedule of
matters reserved to the Board for decision provide that the
appointment and removal of the Company Secretary is a matter for
the full Board.
The Company's articles of association require that one third of
the Directors should retire by rotation each year and seek
re-election at the Annual General Meeting and that Directors newly
appointed by the Board should seek re-appointment at the next
Annual General Meeting. The Board complies with the requirement of
the UK Corporate Governance Code (September 2012) that all
Directors are required to submit themselves for re-election at
least every three years.
During the period covered by these Financial Statements the
following meetings were held:
Directors present 4 Full Board 2 Audit Committee
Meetings Meetings
Charles Metcalfe, Chairman 4 2
Simon Acland 4 2
Professor Elroy Dimson 4 2
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 auditor to the Company. The audit
committee has reviewed the non- audit service provided by the
external auditor, being corporation tax, and does not believe it is
sufficient to influence their independence or objectivity due to
the fee being an immaterial expense.
When considering whether to recommend the reappointment of the
external auditor the audit committee takes into account their
current fee tender compared to the external audit fees paid by
other similar companies. The audit committee will then recommend to
the Board the appointment of an external auditor which is ratified
at the Annual General Meeting.
The Auditing Practices Board requires the audit partner to
rotate every five years. The audit partner rotated this year, which
is ahead of the five year requirement. No audit tender has been
undertaken since the Company was incorporated.
The effectiveness of the external audit is assessed as part of
the Board evaluation conducted annually and by the quality and
content of the audit plan provided to the audit committee by the
external auditor and the discussions then held on topics raised.
The audit committee will challenge the external auditor at the
audit committee meeting if appropriate.
The Audit Committee's terms of reference include the following
roles and responsibilities:
-- reviewing and making recommendations to the Board in relation
to the Company's published Financial Statements and other formal
announcements or regulatory returns relating to the Company's
financial performance, reviewing significant financial reporting
judgements contained in them;
-- reviewing and making recommendations to the Board in relation
to the Company's internal control (including internal financial
control) and risk management systems;
-- periodically considering the need for an internal audit function;
-- making recommendations to the Board in relation to the
appointment, re-appointment and removal of the external auditor and
approving the remuneration and terms of engagement of the external
auditor;
-- reviewing and monitoring the external auditor's independence
and objectivity and the effectiveness of the audit process, taking
into consideration relevant UK professional regulatory
requirements;
-- monitoring the extent to which the external auditor is
engaged to supply non-audit services; and
-- ensuring that the Investment Manager has arrangements in
place for the investigation and follow-up of any concerns raised
confidentially by staff in relation to propriety of financial
reporting or other matters.
The committee reviews its terms of reference and effectiveness
annually and recommends to the Board any changes required as a
result of the review. The terms of reference are available on
request from the Company Secretary.
The Board considers that the members of the committee
collectively have the skills and experience required to discharge
their duties effectively, and that the Chairman of the committee
meets the requirements of the UK Corporate Governance Code
(September 2012) as to relevant financial experience.
The Company does not have an independent internal audit function
as it is not deemed appropriate given the size of the Company and
the nature of the Company's business. However, the committee
considers annually whether there is a need for such a function and,
if there were, would recommend it be established.
In respect of the year ended 28 February 2015, the audit
committee discharged its responsibilities by:
-- reviewing and approving the external auditor's terms of
engagement and remuneration and independence;
-- reviewing the external auditor's plan for the audit of the Financial Statements, including identification of key risks and confirmation of auditor independence;
-- reviewing TPIM's statement of internal controls operated in
relation to the Company's business and assessing those controls in
minimising the impact of key risks;
-- reviewing periodic reports on the effectiveness of TPIM's compliance procedures;
-- reviewing the appropriateness of the Company's accounting policies;
-- reviewing the Company's half-yearly results and draft annual
Financial Statements prior to Board approval;
-- reviewing the external auditor's audit plan document to the
audit committee on the annual Financial Statements; and
-- reviewing the Company's going concern status.
The audit committee is responsible for considering and reporting
on any significant issues that arise in relation to the Financial
Statements.
The key areas of risk that have been identified and considered
by the audit committee in relation to the business activities and
the Financial Statements of the Company are as follows:
-- valuation and existence of unquoted investments;
-- compliance with HM Revenue & Customs conditions for
maintenance of approved Venture Capital Trust status; and
-- ability to realise unquoted investments.
The audit committee relies on the Investment Manager to assess
the valuation of unquoted investments and the existence of those
investments. The Investment Manager has a director on the board of
all the investee companies and meets regularly with the other
directors and hence has an oversight of all the investments made.
The audit committee have reviewed the valuations and discussed them
with both the Investment Manager and the external auditor to
confirm the valuation of the unquoted investments and the existence
of those investments.
The Investment Manager has confirmed to the audit committee that
the conditions for maintaining the Company's status as an approved
Venture Capital Trust had been complied with throughout the year.
The position is also reviewed by Robertson Hare LLP in its capacity
as adviser to the Company on taxation matters.
The Investment Manager and the Directors have put in place a
programme to manage the realisation of investments over the course
of 2015, which has already begun.
The audit committee has considered the whole Report and Accounts
for the year ended 28 February 2015 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 performance, business model and strategy.
Internal Control
The Directors have overall responsibility for keeping under
review the effectiveness of the Company's systems of internal
controls. The purpose of these controls is to ensure that proper
accounting records are maintained, the Company's assets are
safeguarded and the financial information used within the business
and for publication is accurate and reliable; such a system can
only provide reasonable and not absolute assurance against material
misstatement or loss. The system of internal controls is designed
to manage rather than eliminate the risk of failure to achieve
business objectives. As part of this process an annual review of
the internal control systems is carried out. The review covers all
material controls including financial, operational and risk
management systems. The Directors regularly review financial
results and investment performance with the Investment Manager.
The Directors have established an ongoing process designed to
meet the particular needs of the Company in identifying, evaluating
and managing risks to which it is exposed. The process adopted is
one whereby the Directors identify the risks to which the Company
is exposed including, among others, market risk, VCT qualifying
investment risk and operational risks which are recorded on a risk
register. The controls employed to mitigate these risks are
identified and the residual risks are rated taking into account the
impact of the mitigating factors. The risk register is updated
twice a year.
TPIM is engaged to provide administrative including accounting
services and retains physical custody of the documents of title
relating to investments.
The Directors regularly review the system of internal controls,
both financial and non-financial, operated by the Company and the
Investment Manager. These include controls designed to ensure that
the Company's assets are safeguarded and that proper accounting
records are maintained.
Internal control systems include the production and review of
quarterly bank reconciliations and management accounts. The VCT is
subject to a full annual audit. The auditors are the same auditors
as used by other VCTs managed by the Investment Manager. The
Investment Manager's procedures are subject to internal compliance
checks.
Going Concern
In advance of the completion of shareholders' five year holding
period, steps have been taken to realise the Company's investments.
After the realisation of the investments, distributions will be
made to shareholders and then the Board will propose resolutions to
place the Company into Members' Voluntary Liquidation, which will
require shareholders' approval. Thereafter all further funds will
be returned to shareholders by way of capital distribution by the
liquidators. In the circumstances these Financial Statements have
been prepared on a break-up basis taking into account the expected
costs of the Company's liquidation.
Relations with Shareholders
The Board recognises the value of maintaining regular
communications with shareholders. In addition to the formal
business of the Annual General Meeting, an opportunity is given to
all shareholders to question the Board and the Investment Manager
on matters relating to the Company's operation and performance. The
Board and the Investment Manager will also respond to any written
queries made by shareholders during the course of the year and both
can be contacted at 18 St Swithin's Lane, London EC4N 8AD or on 020
7201 8989.
Compliance Statement
The Listing Rules require the Board to report on compliance with
the UK Corporate Governance Code (September 2012) provisions
throughout the accounting period. With the exception of the limited
items outlined below, the Directors consider that the Company has
complied throughout the period under review with the provisions set
out in the UK Corporate Governance Code (September 2012).
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,
one of whom is not considered independent. The Board regularly
reviews the independence of its Directors but does not consider it
appropriate to appoint an additional Director to the Audit
committee (C.3.1).
On behalf of the Board
Charles Metcalfe,
Chairman
3 June 2015
Directors' Responsibility Statement
The Directors are responsible for preparing the Strategic
Report, the Directors' Report, the Directors' Remuneration Report
and the Financial Statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare Financial
Statements for each financial year. Under that law the Directors
have elected to prepare the Financial Statements in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union. Under company law the Directors must not
approve the Financial Statements unless they are satisfied that
they give a true and fair view of the state of affairs and profit
or loss of the Company for that year. In preparing these Financial
Statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable IFRS have been followed, subject to
any material departures disclosed and explained in the Financial
Statements;
-- prepare the Financial Statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the Financial Statements and the Remuneration report comply with
the Companies Act 2006. They are also responsible for safeguarding
the assets of the Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors confirm that:
-- so far as each of the Directors is aware there is no relevant
audit information of which the Company's auditor is unaware;
and
-- the Directors have taken all steps that they ought to have
taken as Directors in order to make themselves aware of any
relevant audit information and to establish that the auditor is
aware of that information.
The Directors are responsible for preparing the Annual Report in
accordance with applicable law and regulations. The Directors
consider the Annual Report and the Financial Statements, taken as a
whole, provide the information necessary to assess the Company's
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 annual report including the Strategic Report includes a
fair review of the development and performance of the business and
the position of the Company, together with a description of the
principal risks and uncertainties that it faces.
On behalf of the Board
Charles Metcalfe
Chairman
3 June 2015
Directors' Remuneration Report
Introduction
This report is submitted in accordance with schedule 8 of the
Large and Medium Sized Companies and Groups (Accounts and Reports)
Regulations 2008, in respect of the year ended 28 February 2015.
This report also meets the Financial Conduct Authority's Listing
Rules and describes how the Board has applied the principles
relating to Directors' remuneration set out in UK Corporate
Governance Code (issued September 2012). The reporting requirements
require two sections to be included, a Policy Report and an Annual
Remuneration Report which are presented below.
Directors' Remuneration Policy Report
This statement of the Directors' Remuneration Policy took effect
following approval by shareholders at the Annual General Meeting on
8 July 2014. The Board currently comprises three Directors, all of
whom are Non-Executive. The Board does not have a separate
remuneration committee, as the Company has no employees or
executive directors. The Board has not retained external advisers
in relation to remuneration matters but has access to information
about Directors' fees paid by other companies of a similar size and
type. No views which are relevant to the formulation of the
Directors' remuneration policy have been expressed to the Company
by shareholders, whether at a general meeting or otherwise.
The Board's policy is that the remuneration of Non-Executive
Directors should reflect the experience of the Board as a whole, be
fair and be comparable with that of other relevant Venture Capital
Trusts that are similar in size and have similar investment
objectives and structures. Furthermore, the level of remuneration
should be sufficient to attract and retain the Directors needed to
oversee the Company properly and to reflect the specific
circumstances of the Company, the duties and responsibilities of
the Directors and the value and amount of time committed to the
Company's affairs. The articles of association provide that the
Directors shall be paid in aggregate a sum not exceeding GBP100,000
per annum. None of the Directors is eligible for bonuses, pension
benefits, share options, long-term incentive schemes or other
benefits in respect of their services as Non-Executive Directors of
the Company.
The articles of association provide that Directors shall retire
and be subject to re-election at the first Annual General Meeting
after their appointment and that any Director who has not been
re-elected for three years shall retire and be subject to
re-election at the Annual General Meeting. Also any Director not
considered independent shall retire each year and offer himself for
re-election at the Annual General Meeting. The Directors' service
contracts provide for an appointment of twelve months, after which
three months written notice must be given by either party. A
Director who ceases to hold office is not entitled to receive any
payment other than accrued fees (if any) for past services. The
same policies will apply if a new Director is appointed.
Details of each Director's contract is shown below. The Chairman
is paid more than the other Directors to reflect the additional
responsibilities of that role. There are no other fees payable to
the Directors for additional services outside of their
contracts.
Unexpired term
of contract Annual rate
at 28 February of Directors'
Date of Contract 2015 fees
GBP
Charles Metcalfe,
Chairman 04-Jan-10 none 15,000
Simon Acland 04-Jan-10 none 12,500
Professor Elroy Dimson 27-Apr-11 none 12,500
------------------------- ------------------ ----------------- ---------------
Annual Remuneration Report
The remuneration policy described above was implemented with
effect from 8 July 2014 after it was approved at the Annual General
Meeting and will remain unchanged for a three year period. The
Board will review the remuneration of the Directors in line with
the VCT industry on an annual basis, if thought appropriate.
Otherwise, only a change in role is likely to incur a change in
remuneration of any one Director.
Directors' Remuneration (audited information)
The fees paid to Directors in respect of the year ended 28
February 2015 and the prior year are shown below:
Emoluments for Emoluments for
the year ended the year ended
28 February 28 February
2015 2014
GBP GBP
Charles Metcalfe,
Chairman 15,000 15,000
Simon Acland 12,500 12,500
Professor Elroy Dimson 12,500 12,500
40,000 40,000
Employer's NI contributions 226 2,334
Total Emoluments 40,226 42,334
------------------------------ ---------------- ----------------
None of the Directors is eligible for bonuses, pension benefits,
share options, long-term incentive schemes or other benefits in
respect of their services as Non-Executive Directors of the
Company.
Information required on executive directors, including the Chief
Executive Officer and employees has been omitted because the
Company has neither and therefore it is not relevant.
Directors' emoluments compared to payments to shareholders:
28 February 28 February
2015 2014
GBP'000 GBP'000
Total Dividends paid - -
Total Directors' emoluments 40 42
Directors' Share Interests (audited information)
At 28 February 2015 Charles Metcalfe held 100,000 ordinary
shares of 1p each (2014: 100,000), Simon Acland and Professor Elroy
Dimson did not hold any shares (2014: nil). At 28 February 2015 no
connected parties to the Directors held any shares (2014: nil).
There have been no changes in the holdings of the Directors between
28 February 2015 and the date of this report. There are no
requirements or restrictions on Directors holding shares in the
Company. Any shares owned by the Directors were purchased at the
same price offered to investors.
Company Performance
There have been no trades in the Company's shares to date.
Therefore, no performance graph comparing the share price of the
Company over the year ended 28 February 2015 with the total return
from a notional investment in the FTSE All-Share index over the
same period has been included.
No market maker has been appointed and therefore no current bid
and offer price is available for the Company's shares. However the
Board's policy is to buy back shares from shareholders at a 10%
discount to net asset value. The Company will produce a graph of
its share performance once there is sufficient activity that the
graph would be meaningful to shareholders.
Statement of Voting at the Annual General Meeting
The 2014 Remuneration Report was presented to the Annual General
Meeting in July 2014 and received shareholder approval following a
vote 100% in favour and no one abstained.
The Directors' Remuneration Policy was presented to the Annual
General Meeting in July 2014 and received shareholder approval
following a vote 100% in favour and no one abstained.
Statement of the Chairman
The Directors' fees are fixed at GBP15,000 per annum for the
Chairman and GBP12,500 per annum for other Directors. There have
been no changes in their fees since the date of their appointment.
The remuneration of the Directors reflects the experience of the
Board as a whole, is fair and comparable with that of other
relevant Venture Capital Trusts that are similar in size and have
similar investment objectives and structures. The fees are
sufficient to attract and retain the Directors needed to oversee
the Company's affairs.
On behalf of the Board
Charles Metcalfe
Chairman
3 June 2015
Independent Auditor's Report to the Members of TP70 2010 VCT
plc
Our opinion on the financial statements is unmodified
In our opinion the financial statements:
-- give a true and fair view of the state of the Company's
affairs as at 28 February 2015 and of its profit for the year then
ended;
-- have been properly prepared in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European
Union; and
-- have been prepared in accordance with the requirements of the Companies Act 2006.
Emphasis of matter - basis of preparation
In forming our opinion on the Financial Statements, which is not
modified, we have considered the adequacy of the disclosure made in
note 2 to the Financial Statements. As explained in note 2, in
preparation for the completion of the shareholders' five year hold
period, steps have been taken to realise the Company's investments.
It is the Directors' present intention that as part of the
realisation process the Company should be placed into Members'
Voluntary Liquidation. The Financial Statements have not therefore
been prepared on the going concern basis, but instead have been
drawn up on a break-up basis.
Who are we reporting to
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
What we have audited
TP70 2010 VCT plc's financial statements comprise the Statement
of Comprehensive Income, the Balance Sheet, the Statement of
Changes in Shareholders' Equity, the Statement of Cash Flows and
the related notes.
The financial reporting framework that has been applied in their
preparation is applicable law and IFRSs as adopted by the European
Union.
Our assessment of risk
In arriving at our opinions set out in this report, we highlight
the following risks that are, in our judgement, likely to be most
important to users' understanding of our audit.
Valuation of unquoted investments
The risk: The investment objective was to build a diversified
portfolio of young 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. Unquoted
investments amount by value to 92.5% of the company's total assets,
and are designated as being at fair value through profit or loss.
Unquoted investments consist of derivatives of GBP1.1m (14.3%) and
other unquoted investments (which in turn consist of unquoted
equity investments and unquoted loan notes) of GBP6.9m (85.7%)
(together "unquoted investments"). Measurement of the value of an
unquoted investment includes significant assumptions and
judgements. We therefore identified the valuation of unquoted
investments as a significant risk requiring special audit
consideration.
Our response on derivatives: Our work included, but was not
restricted to, reviewing the leveraged certificate from the issuer
containing details of the valuation model, obtaining confirmation
of the value of the derivative from the issuer based on this
valuation method and assessing the reasonableness of the valuation
by checking the price of the derivatives underlying asset to
independent market data. We also attended the audit committee
meeting to discuss the review process consideration of whether the
valuations of the derivatives were made inaccordance with published
guidance, in particular the IPEVC valuation guidance.
Our response on other unquoted investments: Our audit work
included, but was not restricted to, obtaining an understanding of
how the valuations were performed by obtaining the underlying
models from the investment manager, attending the audit committee
meeting to discuss the review process consideration of whether they
were made in accordance with published guidance in particular the
IPEVC valuation guidance, discussions with the investment manager
on the choice of valuation methodology and assumptions made, and
reviewing and challenging the basis and reasonableness of the
assumptions made by the investment manager in conjunction with
available supporting information, such as the corroboration of
financial inputs to the relevant investee company management
accounts or offer letters and testing a sample of other inputs by
using our valuation specialists.
The Company's accounting policy on the valuation of unquoted
investments is included in the accounting policies in note 2, and
its disclosures about unquoted investments held at the year end are
included in notes 10 and 11. The Audit Committee also identified
and considered the valuation and existence of unquoted investments
as a key area of risk in the Corporate Governance Statement on page
22.
Revenue recognition
The risk: Revenue consists of interest earned on loans to
investee companies and cash balances, and dividend income received
from investee companies. Revenue is a key factor in demonstrating
the performance of the portfolio and its recognition is a key
issue. We therefore identified the recognition of revenue as a
significant risk requiring special audit attention.
Our response: We identified and evaluated the controls relating
to revenue recognition and undertook testing of interest income by
comparing the actual to expected income, calculated using the
interest rates in the loan instruments. We considered, reviewed and
tested the appropriateness of the accounting policy and whether the
accounting policy had been applied correctly. For accrued interest
income we reviewed management's assessment of recoverability by
checking to post year end receipts and also discussion with
management.
The company's accounting policy on income recognition is
included in note 2, and its disclosures about income recognised in
the year within note 4.
Our application of materiality and an overview of the scope of
our audit
Materiality
We define materiality as the magnitude of misstatement in the
financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or
influenced. We determined materiality for the audit of the
financial statements as a whole to be GBP64,000, which is 0.75% of
the Company's net assets. This benchmark is considered the most
appropriate because total assets, which are primarily composed of
the company's investment portfolio are the key driver in the
Company. We use a different level of materiality, performance
materiality, to drive the extent of our testing and this was set at
75% of financial statement materiality. We also determine a lower
level of specific materiality for certain areas such as expenses,
investment income, directors' remuneration and related party
transactions.
We determined the threshold at which we will communicate
misstatements to the audit committee to be GBP3,200. In addition we
will communicate misstatements below that threshold that, in our
view, warrant reporting on qualitative grounds.
Overview of the scope of our audit
We conducted our audit in accordance with International
Standards on Auditing (ISAs) (UK and Ireland). Our responsibilities
under those standards are further described in the
'Responsibilities for the financial statements and the audit'
section of our report. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
We are independent of the Company in accordance with the
Auditing Practices Board's Ethical Standards for Auditors, and we
have fulfilled our other ethical responsibilities in accordance
with those Ethical Standards.
Our audit approach was based on a thorough understanding of the
Company's business and is risk-based. The day-to-day management of
the Company's investment portfolio, the custody of its investments
and the maintenance of the Company's accounting records is
outsourced to a third-party service provider. Accordingly, our
audit work is focussed on obtaining an understanding of, and
evaluating, internal controls at the Company and the third-party
service provider, and inspecting records and documents held by the
third-party service provider. We undertook substantive testing on
significant transactions, balances and disclosures, the extent of
which was based on various factors such as our overall assessment
of the control environment, the design effectiveness of controls
over individual systems and the management of specific risks.
Other reporting required by regulations
Our opinion on other matters prescribed by the Companies Act
2006 is unmodified
In our opinion:
-- the part of the Directors' Remuneration Report to be audited
has been properly prepared in accordance with the Companies Act
2006; and
-- the information given in the Strategic Report and Report of
the Directors for the financial year for which the financial
statements are prepared is consistent with the financial
statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the ISAs (UK and Ireland), we are required to report to
you if, in our opinion, information in the annual report is:
-- materially inconsistent with the information in the audited financial statements; or
-- apparently materially incorrect based on, or materially
inconsistent with, our knowledge of the Company acquired in the
course of performing our audit; or
-- otherwise misleading.
In particular, we are required to report to you if:
-- we have identified any inconsistencies between our knowledge
acquired during the audit and the directors' statement that they
consider the annual report is fair, balanced and understandable;
or
-- the annual report does not appropriately disclose those
matters that were communicated to the audit committee which we
consider should have been disclosed.
Under the Companies Act 2006 we are required to report to you
if, in our opinion:
-- adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the financial statements and the part of the Directors'
Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Under the Listing Rules, we are required to review:
-- the directors' statement, set out on page 23, in relation to going concern; and
-- the part of the Corporate Governance Statement relating to
the Company's compliance with the ten provisions of the UK
Corporate Governance Code specified for our review.
Responsibilities for the financial statements and the audit
What an audit of financial statements involves:
A description of the scope of an audit of financial statements
is provided on the Financial Reporting Council's website at
www.frc.org.uk/auditscopeukprivate
What the directors are responsible for:
As explained more fully in the Directors' Responsibilities
Statement set out on page 25, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view.
What are we responsible for:
Our responsibility is to audit and express an opinion on the
financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board's
Ethical Standards for Auditors.
Nicholas Page
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
3 June 2015
Statement of Comprehensive Income
` Year ended Year ended
28 February 2015 28 February 2014
---------------------------- ----------------------------
Note Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income
Investment income 4 198 - 198 186 - 186
Gain/(loss) arising on
the disposal of investments
during the year - 35 35 - (12) (12)
Gain arising on the revaluation
of investments at the
year end - 1,085 1,085 - 58 58
Investment return 198 1,120 1,318 186 46 232
-------- -------- -------- -------- -------- --------
Expenses
Investment management
fees 5 142 47 189 125 42 167
Financial and regulatory
costs 20 - 20 24 - 24
General administration 4 - 4 9 - 9
Legal and professional
fees 6 92 - 92 30 - 30
Directors' remuneration 7 40 - 40 40 - 40
Operating expenses 298 47 345 228 42 270
-------- -------- -------- -------- -------- --------
(Loss)/profit before taxation (100) 1,073 973 (42) 4 (38)
Taxation 8 - - - - - -
(Loss)/profit after taxation (100) 1,073 973 (42) 4 (38)
-------- -------- -------- -------- -------- --------
Profit and total comprehensive
(loss)/profit for the
year (100) 1,073 973 (42) 4 (38)
-------- -------- -------- -------- -------- --------
Basic & diluted (loss)/profit
per share 9 (1.14p) 12.27p 11.13p (0.48p) 0.04p (0.44p)
-------- -------- -------- -------- -------- --------
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
2009).
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
28 February 28 February
2015 2014
Note GBP'000 GBP'000
Non current assets
Financial assets at fair
value through profit or
loss 10 2,909 7,555
2,909 7,555
------------ ------------
Current assets
Assets held for sale 11 5,126 -
Receivables 12 34 95
Cash and cash equivalents 13 615 55
5,775 150
------------ ------------
Total assets 8,684 7,705
------------ ------------
Current liabilities
Payables and accrued expenses 14 148 142
148 142
------------ ------------
Net assets 8,536 7,563
============ ============
Equity attributable to
equity holders
Share capital 15 87 87
Special distributable
reserve 8,225 8,225
Capital reserve 632 (441)
Revenue reserve (408) (308)
Total equity 8,536 7,563
============ ============
Net asset value per share
(pence) 17 97.60p 86.47p
============ ============
The statements were approved by the Directors and authorised for
issue on 3 June 2015 and are signed on their behalf by:
Charles Metcalfe
Chairman
3 June 2015
Company registration number 7039066.
The accompanying notes are an integral part of this
statement.
Statement of Changes in Shareholders' Equity
Special
Issued Distributable Capital Revenue
Capital Reserve Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 28 February
2015
Opening balance 87 8,225 (441) (308) 7,563
-------- -------------- -------- -------- --------
Profit/(loss) after tax - - 1,073 (100) 973
Total comprehensive income
for the year - - 1,073 (100) 973
-------- -------------- -------- -------- --------
Balance at 28 February
2015 87 8,225 632 (408) 8,536
======== ============== ======== ======== ========
Capital Reserve consists
of:
Investment holding gains 1,140
Other realised losses (508)
632
--------
Special
Issued Distributable Capital Revenue
Capital Reserve Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 28 February
2014
Opening balance 87 8,225 (445) (266) 7,601
Profit/(loss) after tax - - 4 (42) (38)
Total comprehensive income
for the year - - 4 (42) (38)
-------- -------------- -------- -------- --------
Balance at 28 February
2014 87 8,225 (441) (308) 7,563
======== ============== ======== ======== ========
Capital Reserve consists
of:
Investment holding gains 52
Other realised losses (493)
(441)
--------
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
capital reserve is not 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.
Statement of Cash Flows
Year ended Year ended
28 February 28 February
2015 2014
GBP'000 GBP'000
Cash flows from operating activities
Profit/(loss) before taxation 973 (38)
(Gain)/loss arising on the disposal
of investments during the year (35) 12
(Gain) arising on the revaluation
of investments at the year end (1,085) (58)
Cash absorbed by operations (147) (84)
Decrease/(increase) in receivables 61 (27)
Increase in creditors 6 19
Net cash flows from operating activities (80) (92)
------------ ------------
Cash flows from investing activities
Disposal proceeds of financial
assets at fair value through profit
or loss 640 95
Net cash flows from investing activities 640 95
------------ ------------
Net increase in cash and cash equivalents 560 3
============ ============
Reconciliation of net cash flow
to movements in cash and cash equivalents
Cash and cash equivalents at 1
March 2014 55 52
Net increase in cash and cash equivalents 560 3
Cash and cash equivalents at 28
February 2015 615 55
============ ============
The accompanying notes are an integral part of these
statements.
Notes to the Financial Statements
1. Corporate Information
The Financial Statements of the Company for the year ended 28
February 2015 were authorised for issue in accordance with a
resolution of the Directors on 3 June 2015.
The Company applied for listing on the London Stock Exchange on
1 April 2010.
TP70 2010 VCT plc was incorporated and is domiciled in Great
Britain and registered in England and Wales. The address of TP70
2010 VCT plc's registered office, which is also its principal place
of business, is 18 St Swithin's Lane, London EC4N 8AD.
TP70 2010 VCT plc's 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
In preparation for the completion of shareholders five year
holding period, steps have been taken to realise the Company's
investments. The Board's intention will be to propose resolutions
to place the Company into Members Voluntary Liquidation after
completion of the realisation of unquoted investments which will
require shareholders' approval. Thereafter all funds will be
returned to shareholders by way of capital distribution by the
liquidators. In the circumstances these Financial Statements have
been prepared on a break up basis taking into account the expected
costs of the Company's liquidation.
The Financial Statements of the Company for the year to 28
February 2015 have been prepared in accordance with International
Financial Reporting Standards ("IFRS") adopted for use in the
European Union and complied with the Statement of Recommended
Practice: "Financial Statements of Investment Trust Companies and
Venture Capital Trusts" (SORP) issued by the Association of
Investment Companies (AIC) in January 2009, in so far as this does
not conflict with IFRS.
The preparation of Financial Statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of policies and the reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
various other factors believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ
from these judgements.
The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities relate to:
-- the valuation of unlisted financial investments held at fair
value through profit or loss, which are valued on the basis noted
below (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 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
10.
The Directors do not believe that there are any further key
judgements made in applying accounting policies or estimates in
respect of the Financial Statements.
These Financial Statements have been prepared in accordance with
the accounting policies set out below which are based on the
recognition and measurement principles of IFRS in issue as adopted
by the European Union (EU).
These accounting policies have been applied consistently in
preparing these Financial Statements.
Standards issued but not yet effective
The following new standards, amendments to standards and
interpretations are not yet effective for the year ended 28
February 2015, and have not been applied in preparing these
Financial Statements.
-- IFRS 9 Financial Instruments (effective 1 January 2018)
-- IFRS 14 Regulatory Deferral Accounts (effective 1 January
2016)
-- Amendments to IFRS 11: Accounting for Acquisitions of
Interests in Joint Operations (effective 1 January 2016)
-- Clarification of Acceptable Methods of Depreciation and
Amortisation - Amendments to IAS 16 and IAS 38
(effective 1 January 2016)
-- Annual Improvements to IFRSs 2010-2012 Cycle (effective 1
July 2014)
-- Annual Improvements to IFRSs 2011-2013 Cycle (effective 1
July 2014)
-- Annual Improvements to IFRSs 2012-2014 Cycle (effective 1
January 2016)
-- Amendments to IAS 27: Equity Method in Separate Financial
Statements (effective 1 January 2016)
-- Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture - Amendments to IFRS 10
and IAS 28 (effective 1 January 2016)
All of these changes will be applied by the Company from the
effective date but none of them are expected to have a significant
impact on the Company's Financial Statements.
Presentation of Statement of Comprehensive Income
In order 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.
Capital Management
Capital management is monitored and controlled using the
internal control procedures set out on page 23. The capital being
managed includes equity and fixed interest VCT qualifying
investments, cash balances and liquid resources including debtors
and creditors.
The Company has no external debt; consequently all capital is
represented by the value of share capital, distributable and other
reserves. Total Shareholder equity at 28 February 2015 was GBP8.5
million(2014: GBP7.6 million).
Non-Current Asset Investments
The Company invests in financial assets with a view to profiting
from their total return through income and capital growth. These
investments are managed and their performance is evaluated on a
fair value basis in accordance with the investment policy detailed
in the Strategic Report on page 4 and information about the
portfolio is provided internally on that basis to the Company's
Board of Directors. Accordingly upon initial recognition the
investments are designated by the Company as "at fair value through
profit or loss" in accordance with IAS39 "Financial instruments
recognition and measurement". They are included initially at fair
value, which is taken to be their cost (excluding expenses
incidental to the acquisition which are written off in the
Statement of Comprehensive Income and allocated to "capital" at the
time of acquisition). Subsequently the investments are valued at
"fair value" which is the price that would be received to sell an
asset or paid to transfer a liability (exit price) in an orderly
transaction between market participants at the measurement date.
This is measured as follows:
-- unlisted investments are fair valued by the Directors in
accordance with the International Private Equity and Venture
Capital Valuation Guidelines. Fair value is established by using
measurements of value such as price of recent transactions,
discounted cash flows, cost, and initial cost of investment.
-- listed investments are fair valued at bid price on the relevant date.
Where securities are designated upon initial recognition as at
fair value through profit or loss, gains and losses arising from
changes in fair value are included in the Statement of
Comprehensive Income for the year as capital items in accordance
with the AIC SORP 2009. 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.
Due to the intention of the Board to put the Company into
Members' Voluntary Liquidation, all investments are held at the
value expected to be realised on disposal. Assets disposed of since
the year end have been valued in the Financial Statements at the
price achieved.
Assets Held for Sale
Current assets classified as held for sale are presented
separately and measured at the value expected to be realised on
disposal, which is equivalent to fair value.
Income
Investment income includes interest earned on bank balances and
investment loans and includes income tax withheld at source.
Dividend income is shown net of any related tax credit and is
brought into account on the ex-dividend date.
Fixed returns on investment loans and debt are recognised on a
time apportionment basis so as to reflect the effective yield,
provided there is no reasonable doubt that payment will be received
in due course.
Expenses
All expenses are accounted for on the accruals basis. Expenses
are charged to revenue with the exception of the investment
management fee which has been charged 75% to the revenue account
and 25% to the capital account (2014: 75% revenue, 25% capital) to
reflect, in the Directors' opinion, the expected long term split of
returns in the form of income and capital gains respectively from
the investment portfolio.
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 the
temporary difference can be utilised. Deferred tax is measured at
the tax rates that are expected to be applied to the temporary
differences when they reverse, based on the laws that have been
enacted or substantively enacted by the reporting date. The
Directors have considered the requirements of IAS 12 and do not
believe that any provision should be made.
Financial Instruments
The Company's principal financial assets are its investments and
the accounting policies in relation to those assets are set out
above. Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the entity after deducting all
of its financial liabilities. Where the contractual terms of share
capital do not have any terms meeting the definition of a financial
liability then this is classed as an equity instrument. Dividends
and distributions relating to equity instruments are debited direct
to equity.
Issued Share Capital
Ordinary shares are classified as equity because they do not
contain an obligation to transfer cash or another financial asset.
Issue costs associated with the allotment of shares have been
deducted from the share premium account in accordance with IAS
32.
Cash and Cash Equivalents
Cash and cash equivalents representing cash available at less
than 3 months' notice are classified as loans and receivables under
IAS 39.
Reserves
The revenue reserve (retained earnings) and capital reserve
reflect the guidance in the AIC SORP 2009. 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 capital reserve is not
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
The Company only has one class of business, being investment
activity. All revenues and assets are generated and held in the
UK.
4. Investment Income
Year ended Year ended
28 February
28 February 2015 2014
---------------------------- ----------------------------
Rev. Cap. Total Rev. Cap. Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loan interest receivable 198 - 198 186 - 186
198 - 198 186 - 186
-------- -------- -------- -------- -------- --------
5. Investment Management Fees
Triple Point Investment Management LLP provides investment
management and administration services to the Company under an
Investment Management Agreement effective 2 February 2010. The
agreement provides for an administration and investment management
fee of 2.25% per annum of net assets, subject to a cap of 3.50% per
annum on overall running costs as a percentage of net assets. It is
calculated and payable quarterly in arrear and 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. Should such
notice be given, the Investment Manager would perform its duties
under the Investment Management Agreement and receive its
contracted fee during the notice period.
6. Legal and Professional Fees
Legal and professional fees include remuneration paid to the
Company's auditor, Grant Thornton UK LLP, as shown in the following
table:
Year ended Year ended
28 February
28 February 2015 2014
---------------------------- ----------------------------
Rev. Cap. Total Rev. Cap. 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 accounts 18 - 18 18 - 18
for other services
related to taxation 3 - 3 2 - 2
21 - 21 20 - 20
-------- -------- -------- -------- -------- --------
7. 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. Full disclosure of Directors'
remuneration is included in the Directors' Remuneration report.
Year ended Year ended
28 February
28 February 2015 2014
---------------------------- ----------------------------
Rev. Cap. Total Rev. Cap. Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Charles Metcalfe, Chairman 15 - 15 15 - 15
Simon Acland 13 - 13 13 - 13
Professor Elroy Dimson 12 - 12 12 - 12
40 - 40 40 - 40
-------- -------- -------- -------- -------- --------
8. Taxation
Capital gains and losses are exempt from corporation tax due to
the Company's status as a Venture Capital Trust.
Year ended Year ended
28 February
28 February 2015 2014
---------------------------- ----------------------------
Rev. Cap. Total Rev. Cap. Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
(Loss)/profit on ordinary
activities before tax (100) 1,073 973 (42) 4 (38)
-------- -------- -------- -------- -------- --------
Corporation tax @ 20% (20) 215 195 (8) 1 (7)
Effect of:
Capital (gains) not
taxable - (224) (224) - (9) (9)
Unrelieved tax losses
arising in the year 20 9 29 8 8 16
Tax charge/credit for
the period - - - - - -
-------- -------- -------- -------- -------- --------
Excess management charges of GBP789,000 (2014: GBP642,000) have
been carried forward at 28 February 2015 and are available for
offset against future taxable income subject to agreement with HM
Revenue & Customs.
9. Earnings/(loss) per Share
The earnings per share is based on a profit from ordinary
activities after tax of GBP972,988 (2014: loss of GBP38,231), and
on the weighted average number of shares in issue during the period
of 8,746,340 (2014: 8,746,340).
10. Financial Assets at Fair Value through Profit or Loss
Investments
Fair Value Hierarchy:
Level 1: quoted prices on active markets for identical assets or
liabilities. The fair value of financial instruments traded on
active markets is based on quoted market prices at the balance
sheet date. A market is regarded as active where the market in
which transactions for the asset or liability takes place with
sufficient frequency and volume to provide pricing information on
an ongoing basis. The quoted market price used for financial assets
held by the Company is the current bid price. These instruments are
included in level 1.
Level 2: the fair value of financial instruments that are not
traded on active markets is determined by using valuation
techniques. These valuation techniques maximise the use of
observable inputs including market data where it is available
either directly or indirectly and rely as little as possible on
entity specific estimates. If all significant inputs required to
fair value an instrument are observable, the instrument is included
in level 2.
Level 3: the fair value of financial instruments that are not
traded on an active market (for example, investments in unquoted
companies) is determined by using valuation techniques such as
discounted cash flows. If one or more of the significant inputs is
based on unobservable inputs including market data, the instrument
is included in level 3.
There have been no transfers between these classifications in
the period. Any change in fair value is recognised through the
Statement of Comprehensive Income.
Further details of these investments are provided in the
Investment Manager's Review and Investment Portfolio.
The Company's Investment Manager performs valuations of
financial items for financial reporting purposes, including Level 3
fair values. Valuation techniques are selected based on the
characteristics of each instrument, with the overall objective of
maximising the use of market-based information.
Level 3 valuations include assumptions based on non-observable
data with the majority of investments being valued on discounted
cashflows or price of recent transactions.
Consideration has been given whether the effect of changing one
or more inputs to reasonably possible alternative assumptions would
result in a significant change to the fair value measurement. Each
unquoted portfolio company has been reviewed in order to identify
the sensitivity of the valuation methodology to using alternative
assumptions. Where discount rates have been applied to 27% of
unquoted investments, alternative discount rates have been
considered. Two alternative scenarios for each investment have been
modelled, a more prudent assumption (downside case) and a more
optimistic assumption (upside case). Applying the downside
alternative to the aggregate value of the unquoted investments
would be GBP23,000 or 0.3 per cent lower. Using the upside
alternative the aggregate value of unquoted investments would be
GBP24,000 or 0.4 per cent higher.
The Company's derivative is not traded on an active market. It
is a leveraged note that tracks the performance of the fund GAM
Trading II and it has been fair valued using data from the
leveraged index for that fund. The effects of non-observable inputs
are not significant.
Movements in investments held at fair value through the profit
or loss during the year to 28 February 2015 were as follows:
Level Level
1 2 Level 3
Quoted Unquoted
Year ended 28 February 2015 Investments Derivative Investments Total
GBP'000 GBP'000 GBP'000 GBP'000
Opening cost 608 1,230 5,665 7,503
Opening investment holding
(losses)/gains (3) (242) 297 52
605 988 5,962 7,555
Disposal proceeds (640) - - (640)
Gains arising from the disposal
of investments 35 - - 35
Investment holding gains - 158 927 1,085
Reclassification as financial
assets held for sale - - (5,126) (5,126)
Closing fair value at 28
February 2015 - 1,146 1,763 2,909
============ =========== ============ ========
Closing cost - 1,230 1,640 2,870
Closing investment holding
(losses)/gains - (84) 123 39
------------ ----------- ------------ --------
Level Level
1 2 Level 3
Quoted Unquoted
Year ended 28 February 2014 Investments Derivative Investments Total
GBP'000 GBP'000 GBP'000 GBP'000
Opening cost 711 1,230 5,665 7,606
Opening investment holding
gains/(losses) 32 (126) 92 (2)
743 1,104 5,757 7,604
Disposal Proceeds (100) - 5 (95)
Losses arising from the disposal
of investments (7) - (5) (12)
Investment holding (losses)/gains (31) (116) 205 58
Closing fair value at 28
February 2014 605 988 5,962 7,555
============ =========== ============ ========
Closing cost 608 1,230 5,665 7,503
Closing investment holding
(losses)/gains (3) (242) 297 52
------------ ----------- ------------ --------
All investments are designated as fair value through the profit
or loss at the time of acquisition and all capital gains or losses
arising on investments are so designated. Given the nature of the
Company's venture capital investments, the changes in fair values
of such investments recognised in these Financial Statements are
not considered to be readily convertible to cash in full at the
balance sheet date and accordingly any gains or losses on these
items are treated as unrealised.
Material disposals during
the year
Opening Realised
Unquoted Investments Cost Valuation Disposal Gain
GBP'000 GBP'000 GBP'000 GBP'000
GAM Trading II GBP 1.25XL 608 605 640 35
608 605 640 35
-------- ----------- --------- ---------
11. Assets Held for Sale
On 22 March 2015, some of the assets owned by the solar PV
investee companies were sold. These companies were previously
treated as 'Financial Assets at Fair Value through Profit or Loss'
but have been reclassified as 'Financial Assets Held for Sale' as
of the 28 February 2015 following the Investment Manager's
commitment to realise the investments. Prior to reclassification on
28 February 2015, the investments in the solar PV companies were
valued at fair value of GBP4.4 million (derived from the value
expected to be realised on disposal), giving rise to an unrealised
gain at 28 February 2015 of GBP0.9 million. Subsequent to
reclassification, in line with IFRS 5, the Solar PV companies will
continue to be measured in line with IAS 39. Income for the year
relating to these investments amount to GBP116,000 and expenses
were GBPnil. These assets are fair value through profit and loss
and are classified as Level 3 (2014: Level 3). There is no
sensitivity in the assumptions.
Material Gains recognised during
the Year
Opening Closing
Unquoted Investments Valuation Gain Valuation
GBP'000 GBP'000 GBP'000
AH Power Ltd 401 101 502
Arraze Ltd 542 125 667
Bandspace Ltd 564 124 688
Bridge Power Ltd 269 65 334
Core Generation Ltd 270 73 343
Druman Green Ltd 267 69 336
Fellman Solar Ltd 266 69 335
Haul Power Ltd 265 80 345
Helioflair Ltd 398 110 508
Trym Power Ltd 266 77 343
Exane Bank Derivative 988 158 1,146
Discussions for the sale of the Company's investments in
Anaerobic Digestion businesses to a trade buyer are well advanced.
These companies were previously treated as 'Financial Assets at
Fair Value through Profit or Loss' but have been reclassified as
'Financial Assets Held for Sale' as of the 28 February 2015
following the Investment Manager's commitment to realise the
investments. Subsequent to reclassification, in line with IFRS 5,
the companies will continue to be measured in line with IAS 39.
Income for the year relating to these investments amount to
GBP25,000 and expenses were GBPnil. These assets are fair value
through profit and loss and are classified as Level 3 (2014: Level
3).
12. Receivables
28 February
28 February 2015 2014
GBP'000 GBP'000
Accrued income 32 -
Prepaid expenses 2 8
Other debtors - 87
34 95
----------------- ------------
13. Cash and Cash Equivalents
Cash and cash equivalents comprise deposits with The Royal Bank
of Scotland plc.
14. Payables and Accrued Expenses
28 February
28 February 2015 2014
GBP'000 GBP'000
Payables - 46
Taxation 5 6
Deferred income - 17
Accrued expenses 143 73
148 142
----------------- ------------
15. Share Capital
28 February 28 February
2015 2014
Ordinary Shares
of 1p
Authorised
Number of shares 60,000,000 60,000,000
Par Value GBP'000 600 600
Issued & Fully
Paid
Number of shares 8,746,340 8,746,340
Par Value GBP'000 87 87
16. Financial Instruments and Risk Management
The Company's financial instruments comprise VCT qualifying
investments, cash balances and liquid resources including debtors
and creditors. The Company holds financial assets in accordance
with its investment policy detailed in the Strategic Report on page
4.
The following table discloses the financial assets and
liabilities of the Company in the categories defined by
IAS 39, "Financial Instruments; Recognition &
Measurement."
Financial liabilities Fair value
Loan and held at amortised through profit
Total value receivables cost or loss
GBP'000 GBP'000 GBP'000 GBP'000
28 February 2015
Assets:
Financial assets at
fair value through
profit or loss 2,909 - - 2,909
Assets held for sale 5,126 - - 5,126
Accrued income 32 32 - -
Cash and cash equivalents 615 615 - -
8,682 647 - 8,035
------------ ------------- ---------------------- ----------------
Liabilities:
Taxation 5 - 5 -
Accrued expenses 143 - 143 -
148 - 148 -
------------ ------------- ---------------------- ----------------
28 February 2014
Assets:
Financial assets at
fair value through
profit or loss 7,555 - - 7,555
Receivables 87 87 - -
Cash and cash equivalents 55 55 - -
7,697 142 - 7,555
------------ ------------- ---------------------- ----------------
Liabilities:
Other payables 46 - 46 -
Taxation 7 - 7 -
Accrued expenses 73 - 73 -
126 - 126 -
------------ ------------- ---------------------- ----------------
Fixed Asset Investments (see note 10 and 11) are valued at fair
value. Unquoted investments are carried at fair value as determined
by the Directors in accordance with current venture capital
industry guidelines. The fair value of all other financial assets
and liabilities is represented by their carrying value in the
balance sheet. The Directors believe that where an investee
company's enterprise value, which is equivalent to fair value,
remains unchanged since acquisition, that investment should
continue to be held at cost less any loan repayments received.
Where they consider the investee company's enterprise value has
changed since acquisition, that should be reflected by the
investment being held at a value measured using a discounted cash
flow model.
In carrying out its investment activities, the Company is
exposed to various types of risk associated with the financial
instruments and markets in which it invests. The Company's approach
to managing its risks is set out below together with a description
of the nature of the financial instruments held at the balance
sheet date.
Market Risk
The Company's VCT qualifying investments are held in small and
medium-sized unquoted 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 10 to 15.
An increase of 1% in the value of investments would increase the
capital profits for the period and the net asset value at 28
February 2015 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 a multiple to demonstrate the impact of varying
changes on the capital profits and net asset value of the
Company.
Interest Rate Risk
Some of the Company's financial assets are interest bearing, of
which some are at fixed rates and some at variable rates. As a
result, the Company is exposed to interest rate risk arising from
fluctuations in the prevailing levels of market interest rates.
Investments made into qualifying holdings are part equity and
part loan. The loan element of investments totals GBP3,966,000
(2014: GBP3,966,000) and is subject to fixed interest rates for the
five year loan terms and as a result there is no cashflow interest
rate risk. As the loans are held in conjunction with equity and are
valued in combination as part of the enterprise value, fair value
risk is considered part of market risk.
The amounts held in variable rate investments at the balance
sheet date are as follows:
28 February 28 February
2015 2014
GBP'000 GBP'000
Cash on Deposit 615 55
615 55
------------- -------------
An increase in interest rates of 1% per annum would not have a
material effect either on the revenue for the year or the net asset
value at 28 February 2015. The Board believes that in the current
economic climate a movement of 1% is a reasonable expectation.
Credit Risk
Credit risk is the risk that a counterparty will fail to
discharge an obligation or commitment that it has entered into with
the Company. The Investment Manager and the Board carry out a
regular review of counterparty risk. The carrying value of the
financial assets represent the maximum credit risk exposure at the
balance sheet date.
28 February 28 February
2015 2014
GBP'000 GBP'000
Qualifying Investments
- loans * 3,966 3,966
Cash on Deposit 615 55
Receivables - 87
GAM Trading II GBP 1.25XL - 605
Exane Note 1,146 988
5,727 5,701
------------- -------------
* Includes loans for assets held for sale.
The Company's bank accounts are maintained with The Royal Bank
of Scotland plc ("RBS"). Should the credit quality or financial
position of RBS deteriorate significantly, the Investment Manager
will move the cash holdings to another bank.
Credit risk arising on unquoted loan stock held within unlisted
investments is considered to be part of market risk as disclosed
above.
Liquidity Risk
The Company's financial assets include investments in unquoted
equity securities which are not traded on a recognised stock
exchange and which are illiquid. As a result the Company may not be
able to realise some of its investments in these instruments
quickly at an amount close to their fair value in order to meet its
liquidity requirements.
The Company's liquidity risk is managed on a continuing basis by
the Investment Manager in accordance with policies and procedures
laid down by the Board. The Company's overall liquidity risks are
monitored by the Board on a quarterly basis.
The Board maintains a liquidity management policy where cash and
future cashflows from operating activities and realisation of
investments will be sufficient to pay expenses. At 28 February 2015
cash held by the Company amounted to GBP615,000 (28 February 2014:
GBP55,000).
Foreign Currency Risk
The Company does not have exposure to material foreign currency
risks.
17. Net Asset Value per Share
The calculation of net asset value per share is based on net
assets of GBP8,536,000 (2014: GBP7,563,000) divided by the
8,746,340 (2014: 8,746,340) shares in issue.
18. Commitments and Contingencies
The Company has no outstanding commitments or contingent
liabilities.
19. Relationship with Investment Manager
During the period, TPIM received GBP189,254 which has been
expensed (2014: GBP166,893) for providing management and
administrative services to the Company. At 28 February 2015
GBP57,687 was owing to TPIM (2014: GBP90,557).
20. Related Party Transactions
There are no related party transactions which require
disclosure.
21. Post Balance Sheet Events
On 22 March 2015 the solar PV investee companies in which the
Company had invested sold a significant proportion of their assets
resulting in an uplift in the investee companies' valuation of
GBP0.9 million. At 28 February 2015 these investments are treated
as assets held for sale and have been valued at the value expected
to be realised on disposal which is equivalent to its fair
value.
On 31 March 2015 the Company realised the derivative held with
Exane Bank for GBP1.17 million resulting in an uplift in the
valuation of GBP158,000.
22. Dividend
The first dividend was paid to shareholders of GBP500,000, equal
to 5.72p per share, on 8 May 2015.
The Board has resolved to pay a further dividend to shareholders
of GBP1.6million equal to 18.3p per share which will be paid on 3
July 2015 to shareholders on the register on 19 June 2015.
Financial Calendar
The Company's financial calendar is as follows:
9 July 2015 Annual General Meeting
October 2015 Interim report for the six months ending 31 August 2015 despatched
Notice of Annual General Meeting
NOTICE is hereby given that the Annual General Meeting of TP70
2010 VCT plc will be held at 18 St Swithin's Lane, London, EC4N 8AD
at 9.45 am on Thursday, 9 July 2015 for the following purposes:
Ordinary Business
1. To receive, consider and adopt the Report of the Directors
and Financial Statements for the year ended 28 February 2015
(Ordinary Resolution).
2. To approve the policy set out in the Directors' Remuneration
Report for the year ended 28 February 2015(Ordinary
Resolution).
3. To approve the implementation report set out in the
Directors' Remuneration Report for the year ended 28 February
2015.
4. To re-elect Simon Acland as a Director (Ordinary
Resolution).
5. To re-appoint Grant Thornton UK LLP as auditor and authorise
the Directors to agree 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 s693(4) of the Act) of Ordinary
Shares of 1 pence each in the Company provided that:
(i) the maximum aggregate number of Ordinary Shares authorised
to be purchased is an amount equal to 10% of the issued capital as
at the date hereof;
(ii) the minimum price which may be paid for an Ordinary Share is 1 pence;
(iii) the maximum price which may be paid for an Ordinary Share
is an amount, exclusive of expenses, equal to 105 per cent. of the
average of the middle market prices for the Ordinary Shares as
derived from the Daily Official List of the UK Listing Authority
for the five business days immediately preceding the day on which
the Ordinary share is purchased; and
(iv) this authority shall expire at the conclusion of the next
Annual General meeting of the Company or 15 months following the
date of the passing of this Resolution, whichever is the first to
occur (unless previously renewed, varied or revoked by the Company
in general meeting), provided that the Company may, before such
expiry, make a contract to purchase its own shares which would or
might be executed wholly or partly after such expiry, and the
Company may make a purchase of its own shares in pursuance of such
contract as if the authority hereby conferred had not expired.
(Special Resolution).
Notice of Annual General Meeting
By Order of the Board
Charles Metcalfe
Director
Registered Office:
18 St Swithin's Lane
London, EC4N 8AD 3 June 2015
Notes:
(i) A member entitled to vote at the Meeting is entitled to
appoint one or more proxies to attend and, on a poll, vote on his
or her behalf. A proxy need not be a member of the Company.
(ii) A form of proxy is enclosed. To be effective, the
instrument appointing a proxy (together with the power of attorney
or other authority, if any, under which it is signed, or a
certified copy of such power or authority) must be deposited at or
posted to the office of the registrars of the Company, Neville
Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, West
Midlands B63 3DA, so as to be received not less than 48 hours
before the time fixed for the Meeting. Completion and return of the
form of proxy will not preclude a member from attending or voting
at the Meeting in person if he or she so wishes.
(iii) Members who hold their shares in uncertificated form must
be entered in the Company's register of Members 48 hours before the
Meeting to be entitled to attend or vote at the Meeting. Such
shareholders may only cast votes in respect of Ordinary Shares held
by them at such time.
(iv) Copies of the service contracts of each of the Directors,
the register of Directors' interests in shares of the Company kept
in accordance with the Listing Rules and a copy of the Memorandum
and Articles of Association of the Company, will be available for
inspection at the registered offer of the Company during usual
business hours on any week day (Saturdays, Sundays and public
holidays excepted) from the date of this notice until the date of
the Annual General Meeting and at the place of the Annual General
Meeting from at least 15 minutes prior to and until the conclusion
of the Annual General Meeting.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FJMITMBIMBAA
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