TIDMTPV2
RNS Number : 0984I
TP70 2008 (ii) VCT PLC
08 June 2011
TP70 2008 (II) VCT plc
Final Results
TP70 2008 (II) VCT plc managed by Triple Point Investment
Management LLP today announces its final results for the year ended
31 March 2011.
These results were approved by the Board of Directors and
authorised for issue on 8 June 2011.
You can view the Annual Report in on the Triple Point website
www.triplepoint.co.uk at Our Products/TP70 2008/News. All other
statutory information will also be found there.
About TP70 2008 (II) VCT plc
TP70 2008 (II) VCT plc ("the Company") is a Venture Capital
Trust ("VCT"). The investment manager is Triple Point Investment
Management LLP. The Company was launched in November 2007 and
raised GBP23 million (net of expenses) through an offer for
subscription.
Details of the Company's progress are discussed in the
Chairman's Statement and Investment Manager's Review forming part
of the extract from the Financial Statements which follows.
Venture Capital Trusts (VCTs)
VCTs were introduced in the Finance Act 1995 to provide a means
for private individuals to invest in unlisted companies in the UK.
Subsequent Finance Acts have introduced changes to VCT legislation.
The tax benefits currently available to eligible new investors in
VCTs include:
-- upfront income tax relief of 30%
-- exemption from income tax on dividends paid; and
-- exemption from capital gains tax on disposals of shares in
VCTs
The Company has been provisionally approved as a VCT by HM
Revenue & Customs. In order to maintain its approval, the
Company must comply with certain requirements on a continuing
basis. Above all, the Company is required at all times to hold 70%
of its investments (as defined in the legislation) in VCT
qualifying holdings, of which at least 30% must comprise eligible
ordinary shares.
For this purpose, a 'VCT qualifying holding' consists of up to
GBP1 million invested in any one year in new shares or securities
of a UK unquoted company (which may be quoted on AIM) which is
carrying on a qualifying trade, and whose gross assets at the time
of investment do not exceed a prescribed limit. The definition of
'qualifying trade' excludes certain activities such as property
investment and development, financial services and asset leasing.
The Company will continue to ensure its compliance with these
qualification requirements.
Report of the Directors - Financial Summary
Year ended Year ended
31 March
2011 31 March 2010
GBP'000 GBP'000
Net assets 19,193 19,809
Net asset value per
share 83.96p 86.51p
--------------------- --------- --------------
Net (loss) / profit
before tax (287) 480
(Loss) / earnings (1.32p) 1.97p
per share
--------------------- --------- --------------
For a GBP1 investment per share investors with a sufficient
income tax liability in the relevant year have already received a
30p tax credit and a first dividend of 1.76p and a second dividend
of 1.23p which, taken together with the current NAV of 83.96p,
totals 116.95p.
TP70 2008 (II) VCT plc ("the Company") is a Venture Capital
Trust ("VCT"). The Investment Manager is Triple Point Investment
Management LLP ("TPIMLLP"). The Company was launched in November
2007 and raised GBP23.0 million through an offer for subscription.
Initially 70% of the Company's net assets were to be invested in
cash and liquid assets prior to investment in VCT qualifying
holdings. The remaining 30% directly or indirectly of net assets
were to be exposed to a leveraged version of GAM Diversity, a fund
of hedge funds. The Company's qualifying investment holdings are in
businesses with predictable revenue streams from financially sound
customers and aim to generate an attractive income stream and
modest growth for shareholders.
The Directors' Report on pages 11 to 15 and the Directors'
Remuneration Report on pages 16 to 17 have each been drawn up in
accordance with the requirements of English law and liability in
respect thereof is also governed by English law. In particular, the
responsibility of the Directors for these reports is owed solely to
TP70 2008 (II) VCT plc.
The Directors submit to the members their Annual Report and
Financial Statements for the Company for the year ended 31 March
2011. The Report of the Directors includes the Financial Summary,
Chairman's Statement, Details of Directors, Details of Advisers,
Shareholder Information, Investment Manager's Review, Investment
Portfolio, Directors' Report, Directors' Remuneration Report and
the Corporate Governance Statement.
Report of the Directors - Chairman's Statement
I am writing to present the audited financial statements for
TP70 2008 (II) VCT plc ("the Company") for the year ended 31 March
2011.
Investment Strategy
The Company's strategy offers combined exposure to GAM Diversity
2.5XL and to VCT-qualifying venture capital investments with
contractual revenues from financially secure counterparties.
Results
We are pleased to report that at 31 March 2011 the Company has
in place a diversified portfolio of VCT qualifying investments,
representing 74% of its net assets, which meant that the Company
met the 70% criteria for securing its VCT tax status. Further
details of the portfolio are given in the Investment Manager's
Review on page 6.
The Company's exposure to GAM Diversity 2.5XL now stands at 22%
of net assets, which with leverage
represents 56% of net assets. During the year GAM Diversity
2.5XL, contributed a loss of GBP384,000 to the Company which
overall made a loss before taxation of GBP287,000. The performance
of GAM is detailed further in the Investment Manager's Review on
page 6. At the year end the Company's Net Asset Value per share
stood at 83.96p (2010: 86.51p).
Dividend
The Board is pleased to recommend payment of a third dividend of
GBP352,000 (2010: GBP282,000) payable to shareholders on 29 July
2011 equal to 1.54 p per share.
Board Composition
Amendments to the Listing Rules requiring the majority of the
Board of an investment company to be independent of the investment
manager have made it necessary for changes to the composition of
the Board. As already advised to shareholders in the Interim
Report, Michael Stanes joined the Board on 13 September and Sir
John Lucas Tooth and Robert Reid retired from it on 15 October
2010. The Board regularly reviews the independence of its members
and as a result of its review a decision was taken that the TPIMLLP
appointee should be replaced by a director who is independent of
TPIMLLP. Therefore on 2 June, Peter Hargreaves resigned from the
Board and Baroness Jo Valentine was appointed. I am delighted to
welcome Jo to the Board. A biographical summary with details of her
distinguished career is set out on page 3.
All this means that the Board now comprises Chad Murrin, Michael
Stanes and Baroness Jo Valentine. Michael and Jo are independent of
the Investment Manager, and the Board now meets the requirement
that the majority of its members are independent.
It is also a corporate governance requirement that the Chairman
of the Board is independent of the investment manager. By reason of
me being a Director of other companies where TPIMLLP is the
investment manager, I am deemed not be independent. After
discussion with the Board, it was felt that shareholders' interests
were best served by me continuing as Chairman to provide continuity
through these considerable changes
In line with corporate governance requirements, I have to stand
for re-election by reason of being Chairman (until the change is
made) but not independent of the investment manager. Both Michael
Stanes and Baroness Jo Valentine are standing for re-election at
what will be the first AGM since their appointments.
Risks
The Board believes that the principal risks facing the Company
are:
-- investment risk associated with exposure to GAM Diversity
2.5XL
-- investment risk associated with undertaking VCT qualifying
investments
-- failure to secure and maintain approval as a VCT
The first risk is a consequence of the Company's investment
strategy to which the Company committed in its Prospectus. The
Board and the Investment Manager continue to work to minimise
either the likelihood or potential impact of the second and third
risks which also follow from the Company's investment strategy.
Outlook
With the VCT qualifying investment portfolio in place the
Company's principal focus will be on monitoring and managing the
performance of these investments, as well as maintaining the
required level of qualifying investments taking realisations and
loan repayments into account.
If you have any queries or comments, please do not hesitate to
telephone Triple Point Investment Management LLP on 020 7201
8989.
Chad Murrin
Chairman
8 June 2011
Investment Manager's Review
TP70 2008 (II) VCT plc's objective is to deploy at least 70% of
its funds into VCT qualifying investments and, with the remainder
of its funds, to offer leveraged exposure to GAM's fund of hedge
funds, Diversity, via GAM Diversity GBP 2.5XL.
VCT Qualifying Investment Portfolio
As at 31 March 2011, I can report that the Company had 74% of
net assets deployed in VCT qualifying investments, thereby
satisfying the VCT qualification target. These investments are
spread across a range of companies and sectors, with a focus on
businesses that derive predictable revenue streams from a
financially sound customer base. All of these investments are HMRC
approved for VCT qualifying purposes.
The Company has investments in four companies active in the
renewable energy sector. Two of these companies are pursuing
opportunities in electricity generation from solar photo voltaic
panels for social housing. The panels will be placed on suitable
roofs within housing associations' stock and used to generate
electricity for the residents, with any surplus electricity
exported to the National Grid. The generation of electricity from
solar PV falls within the Government's Feed-in Tariff regime and
the companies will benefit from this framework. Feed-in Tariffs are
linked to inflation and rates for solar PV arrays installed before
2012 have been set for 25 years, which will provide the companies
with a long term, pre-determined cash flow.
The Company's other two investments in the renewable energy
sector will be pursuing opportunities in anaerobic digestion. Their
customers will be either electricity utility companies via a
National Grid connection, or a business located close to the
generators. Energy generation from biomass is also underpinned by
the Feed-in Tariff or Renewables Obligation Certificate regime.
The Company has invested in five companies which specialise in
the deployment of digital projection technology and they continue
to expand their operations in the UK and Continental Europe.
The Company's other businesses are active in satellite trading
(providing for two-way broadband communications and digital
channels access to remote, rural regions across the UK and Europe),
a business supplying medical gas services for the NHS, a
crematorium management company for a local authority, a business
providing telecommunications services to a public sector body, and
three businesses delivering telecoms services to the corporate
sector.
GAM Review
In the period the Company's gross exposure to GAM Diversity
stood at 56% of its assets, through holdings in GAM Diversity 2.5XL
and a Julius Baer derivative transaction.
GAM Diversity lost 1.77% over the year to 31 March 2011, with
positive performance in the Equity Long/Short and Trading
allocations being offset by losses in two specific funds held by
the Arbitrage sector of the portfolio during the first half of
2010. These funds both had exposure to US real estate which faced
significant challenges throughout the second quarter of 2010 due to
the weaker than expected macro environment in both Europe and the
US.
During the second half of the period under review, performance
improved with GAM Diversity GBP returning 2.93%.
GAM Outlook
GAM believe that markets may be broadly positive in 2011 but
with considerable volatility as markets react to prevailing
sentiment.
GAM believe that the outlook remains uncertain for a number of
reasons. Three years after the start of the financial crisis, the
response of global policymakers has seemingly failed to identify
and to 'resolve' the causes of the crisis (excessive leverage,
consumer spending and so on), and the unintended consequences of
their response (enormous government-sponsored spending, cheap
borrowings and lower fiscal penalties) are now becoming a reality.
The cost of this has been periodic losses of confidence among
investors ('risk off/on'), manifested in weaknesses within equity
and sovereign debt markets, and reflected most recently in the
sovereign debt problems that emerged in some of the states of
Europe at the start of the second quarter and dominated part of the
fourth quarter.
GAM report that they are likely to retain their longer-term
cautious economic view while global imbalances in trade and
economic policy remain, particularly between the US and China,
where outright 'protectionism' may result in the next recession.
QE2 was introduced in the US in the fourth quarter as the Fed gave
in to populist alarm, but this will keep the US dollar weak against
other currencies. By contrast, inflation is appearing across all
emerging markets as output gaps have vanished and unemployment
remains low. This is evident not only in China, but also in other
countries such as Brazil and Turkey.
Claire Ainsworth
Triple Point Investment Management LLP
8 June 2011
About Triple Point Investment Management LLP
Triple Point is a specialist in tax-efficient investments. As
well as managing several market-leading VCTs, Triple Point offers
investors a range of investment products that qualify for
government sponsored tax reliefs including the Enterprise
Investment Scheme (EIS) and Business Property Relief (BPR).
With its focus on capital security, liquidity and tax-enhanced
returns, the Triple Point investment model has been built around
the group's capabilities in taxation, structured finance and
investment.
For more information on Triple Point please call 020 7201
8990.
Report of the Directors - Investment Portfolio
31 March 2011 31 March 2010
------------------------------------ ------------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Qualifying holdings 14,365 66.87 14,365 73.66 10,342 47.05 10,342 51.43
Non-qualifying
holdings 3,308 15.39 2,158 11.23 3,501 15.92 2,549 12.67
Money market funds 398 1.85 398 2.07 3,360 15.28 3,360 16.71
18,071 84.11 16,921 86.96 17,203 78.25 16,251 80.81
Derivative 3,292 15.32 2,175 10.12 3,292 14.97 2,361 11.74
Fixed assets at
fair value through
profit or loss 21,363 99.43 19,096 97.08 20,495 93.22 18,612 92.55
Cash and cash
equivalents 125 0.57 125 2.92 1,493 6.78 1,493 7.45
21,488 100.00 19,221 100.00 21,988 100.00 20,105 100.00
======== ======= ======== ======= ======== ======= ======== =======
Unquoted Qualifying Holdings
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Provision of satellite capacity
Beam Carrier Ltd 563 2.62 563 2.93 563 2.56 563 2.80
Satellite Broadband
Access Solutions
Ltd 871 4.05 871 4.53 871 3.96 871 4.33
Telecommunications
Per Port Services
Ltd 310 1.44 310 1.61 310 1.41 310 1.54
WAN Solutions Ltd 184 0.86 184 0.96 436 1.98 436 2.17
Wide Area Network
Services Ltd 231 1.08 231 1.20 564 2.57 564 2.81
Wide Area Network
Solutions Ltd 146 0.68 146 0.76 357 1.62 357 1.78
Cinema digitisation
21 Century Cinema
Ltd 2,000 9.31 2,000 10.41 1,000 4.55 1,000 4.97
Big Screen Digital
Services Ltd 1,400 6.52 1,400 7.28 1,000 4.55 1,000 4.97
Cinematic Services
Ltd 1,000 4.65 1,000 5.20 1,000 4.55 1,000 4.97
Digima Ltd 2,000 9.31 2,000 10.41 1,000 4.55 1,000 4.97
Digital Screen
Solutions Ltd 2,000 9.31 2,000 10.41 1,000 4.55 1,000 4.97
-------- ------- -------- ------- -------- ------- -------- -------
Balance carried
forward 10,705 49.83 10,705 55.70 8,101 36.85 8,101 40.28
Report of the Directors - Investment Portfolio (continued)
31 March 2011 31 March 2010
---------------------------------- ----------------------------------
Cost Valuation Cost Valuation
GBP'000 % GBP'000 % GBP'000 % GBP'000 %
Unqouted
Qualifying
Holdings
(continued)
Balance
brought
forward 10,705 49.83 10,705 55.70 8,101 36.85 8,101 40.28
Crematorium management
Furnace
Management
Services
Ltd 910 4.23 910 4.73 910 4.14 910 4.53
Medical gas
supplies
MGS NW Ltd 420 1.95 420 2.19 703 3.20 703 3.50
MGS WM Ltd 330 1.54 330 1.72 628 2.86 628 3.12
Electricity
generation
Archimedes
Power Ltd 500 2.33 500 2.33 - - - -
Biomass
Future
Generations
Ltd 500 2.33 500 2.33 - - - -
Katharos
Organic
Ltd 500 2.33 500 2.33 - - - -
Convertibox
Services
Ltd 500 2.33 500 2.33 - - - -
14,365 66.87 14,365 73.66 10,342 47.05 10,342 51.43
======== ====== ======== ====== ======== ====== ======== ======
Unquoted Non-qualifying
Holdings
Ambulance refurbishment
Cranmer
Lawrence
Engineering
Services
Limited - - - - 196 0.89 196 0.97
Investment
holding
Lorngreen
Limited * 3,308 15.39 2,158 11.23 3,305 15.03 2,353 11.70
3,308 15.39 2,158 11.23 3,501 15.92 2,549 12.67
======== ====== ======== ====== ======== ====== ======== ======
* The 50% holding in Lorngreen has not been accounted for as a
subsidiary as TP70 2008 (II) is not deemed to have control over the
company. In accordance with the exception within IAS 28,
"Investments in Associates", those undertakings in which the
Company holds more than 20% of the equity are not regarded as
associated undertakings. Therefore these investments are measured
at fair value in accordance with IAS 39, "Financial Instruments,
Recognition and Measurement". They are instead treated as portfolio
investments. Lorngreen holds 50% of the Company's exposure to GAM
Diversity 2.5XL GBP.
VCT investments are measured at fair value. The initial best
estimate of fair value of these investments that are either quoted
or not quoted in an active market is the transaction price (i.e.
cost). The fair value of these investments is subsequently measured
by reference to the enterprise value of the investee company, which
is deemed to best reflect the fair value. Where the Board consider
the investee company's enterprise value to remain unchanged since
acquisition, investments continue to be held at cost less any loan
repayments received.
Report of the Directors - Investment Portfolio (continued)
Additional Information
Equity
held
by
TP70 Equity
2008 held by
(I) all funds
VCT managed by
Last Statutory Financial Statements plc TPIMLLP
-------------------------------------------------------
Profit
/ Total
(loss) assets
Initial before before
Investment int & VCT VCT
Date Date Tax loans loans Net Assets
GBP'000 GBP'000 GBP'000 GBP'000 % %
Qualifying Holdings
Beam Carrier Ltd 02-Apr-09 31-Mar-10 (129) 781 781 - 45.80 95.70
Satellite Broadband
Access Solutions Ltd 17-Mar-09 31-Mar-10 (16) 1,398 1,310 88 43.50 93.40
Per Port Services Ltd 17-Mar-09 31-Mar-10 (74) 467 372 95 47.50 95.00
WAN Solutions Ltd 17-Mar-09 31-Mar-10 (12) 663 506 157 47.50 95.00
Wide Area Network
Services Ltd 17-Mar-09 31-Mar-10 (47) 156 18 138 49.97 49.97
Wide Area Network
Solutions Ltd 17-Mar-09 31-Mar-10 (92) 475 448 27 47.50 95.00
21 Century Cinema Ltd 31-Mar-09 31-Mar-10 (725) 4,528 4,200 328 32.49 97.47
Big Screen Digital
Services Ltd 31-Mar-09 31-Mar-10 (318) 4,668 3,780 888 22.74 97.47
Cinematic Services Ltd 31-Mar-09 31-Mar-10 (332) 4,641 3,920 721 16.24 97.45
Digima Ltd 31-Mar-09 31-Mar-10 (318) 5,088 4,200 888 32.49 97.47
Digital Screen
Solutions Ltd 31-Mar-09 31-Mar-10 (165) 5,088 4,200 888 32.49 97.47
Furnace Management
Services Ltd 17-Mar-09 31-Dec-09 149 1,689 1,274 415 24.50 49.00
MGS NW Ltd 23-Dec-08 31-Mar-10 166 820 207 613 24.49 49.00
MGS WM Ltd 30-Oct-08 30-Oct-09 286 791 163 628 24.50 49.00
No financial statements
Archimedes Power Ltd 30-Mar-11 available 14.92 98.78
Biomass Future No financial statements
Generations Ltd 30-Mar-11 available 14.53 95.88
No financial statements
Katharos Organic Ltd 30-Mar-11 available 19.26 98.22
Convertibox Services No financial statements
Ltd 30-Mar-11 available 24.76 99.51
Non-qualifying Holdings
Lorngreen Limited 17-Jun-08 31-Mar-09 (2,268) 4,331 1,320 3,011 50.00 100.00
Report of the Directors - Corporate Governance
The Board of TP70 2008 (II) VCT plc has considered the
principles and recommendations of the Association of Investment
Companies Code of Corporate Governance (AIC Code) by reference to
the Association of Investment Companies Corporate Governance Guide
for Investment Companies (AIC Guide). The AIC Code, as explained by
the AIC Guide, addresses all the principles set out in Section 1 of
the Combined Code, as well as setting out additional principles and
recommendations on issues that are of specific relevance to the
Company. The Board considers that reporting in accordance with
principles and recommendations of the AIC Code, by reference to the
AIC Guide (which incorporates the Combined Code), will provide
better information to shareholders.
The Company is committed to maintaining high standards in
corporate governance and has complied with the recommendations of
the AIC Code and the relevant provisions of Section 1 of the
Combined Code, except as set out and explained at the end of this
report in the Compliance Statement.
The Corporate Governance Report forms an integral part of the
Report of the Directors.
Board of Directors
The Board regularly reviews the independence of its members and
as a result of their review a decision was taken that the TPIMLLP
appointee should be replaced by a director who is independent of
TPIMLLP. Therefore Peter Hargreaves resigned as a Director and
Baroness Jo Valentine was appointed on 2 June 2011.
The Directors who own shares in the Company are considered
independent under the Listing Rules. Since all Directors are
non-executive and day-to-day management responsibilities are
sub-contracted to the Investment Manager, the Company does not have
a Chief Executive Officer. The Directors have a range of business
and financial skills which are relevant to the Company; these are
described on page 3 of this report. Directors are provided with key
information on the Company's activities, including regulatory and
statutory requirements by the Investment Manager. The Board has
direct access to company secretarial advice and compliance services
provided by the Investment Manager, which is responsible for
ensuring that Board procedures are followed and applicable
regulations complied with. All Directors are able to take
independent professional advice in furtherance of their duties.
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. The Board has a formal schedule of matters specifically
reserved for its decision and the agreement between the Company and
the Investment Manager has authority and limits beyond which Board
approval must be sought.
The Investment Manager has authority over the management of the
investment portfolio, the organisation of custodial services,
accounting, secretarial and administrative services. In practice
the Investment Manager makes investment recommendations for the
Board's approval. In addition all investment decisions involving
other VCTs managed by the Investment Manager are taken by the Board
rather than the Investment Manager. Other matters reserved for the
Board include:
-- the consideration and approval of future developments or
changes to the investment policy, including risk and asset
allocation;
-- consideration of corporate strategy;
-- approval of the appropriate dividend and any return of
capital to be paid to the shareholders;
-- the appointment, evaluation, removal and remuneration of the
Investment Manager;
-- the performance of the Company, including monitoring the net
asset value per share; and
-- monitoring shareholder profiles and considering shareholder
communications.
The Chairman leads the Board in the determination of its
strategy and in the achievement of its objectives. The Chairman is
responsible for organising the business of the Board, ensuring its
effectiveness and setting its agenda, and has no involvement in the
day to day business of the Company. He facilitates the effective
contribution of the Directors and ensures that they receive
accurate, timely and clear information and that they communicate
effectively with shareholders.
The Company Secretary is responsible for advising the Board
through the Chairman on all governance matters. All of the
Directors have access to the advice and services of the Company
Secretary, who 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 Combined Code that all Directors are required to submit
themselves for re-election at least every three years and where a
Director is not considered to be independent submit themselves for
re-election every year.
During the year ended 31 March 2011 the following meetings were
held:
2 Audit
5 Full Board Committee
Directors present Meetings Meetings
Chad Murrin (Chairman) 5 2
Michael Stanes (appointed 13
September 2010) 2 1
Peter Hargreaves 4 2
Sir John Lucas Tooth (resigned
15 October 2010) 4 2
Robert Reid (resigned 13 September
2010) 2 1
Audit Committee
The Board has appointed an Audit Committee, of which Chad Murrin
is chairman, comprising the full Board, which deals with matters
relating to audit, financial reporting and internal control
systems. The committee meets as required and has direct access to
Grant Thornton UK LLP, the Company's auditor. The Audit Committee
safeguards the objectivity and independence of the auditor by
reviewing the nature and extent of non-audit services supplied by
the external auditors of the Company, seeking to balance
objectivity and value for money.
The Audit Committee's terms of reference include the following
roles and responsibilities:
-- reviewing and making recommendations to the Board in relation
to the Company's published Financial Statements and other formal
announcements relating to the Company's financial performance;
-- reviewing and making recommendations to the Board in relation
to the Company's internal control (including internal financial
control) and risk management systems;
-- periodically considering the need for an internal audit
function;
-- making recommendations to the Board in relation to the
appointment, re-appointment and removal of 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 Combined Code 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 so would recommend this to the Board.
During the year ended 31 March 2011, the audit committee
discharged its responsibilities by:
-- reviewing and approving the external auditor's terms of
engagement and remuneration;
-- reviewing the external auditor's plan for the audit of the
financial statements, including identification of key risks and
confirmation of auditor independence;
-- reviewing 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 TPIMLLP's
compliance procedures;
-- reviewing the appropriateness of the Company's accounting
policies;
Internal Control
The Directors have overall responsibility for keeping under
review the effectiveness of the Company's systems of internal
controls. The purpose of these controls is to ensure that proper
accounting records are maintained, the Company's assets are
safeguarded and the financial information used within the business
and for publication is accurate and reliable; such a system can
only provide reasonable and not absolute assurance against material
misstatement or loss. The system of internal controls is designed
to manage rather than eliminate the risk of failure to achieve
business objectives. The Board regularly reviews financial results
and investment performance with its Investment Manager.
TPIMLLP is engaged to provide administrative including
accounting services and retains physical custody of the documents
of title relating to investments.
The Directors confirm that they have established a continuing
process throughout the year and up to the date of this report for
identifying, evaluating and managing the significant potential
risks faced by the Company and have reviewed the effectiveness of
the internal control systems. 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.
Risk Management
TPIMLLP carries out management of liquid funds in accordance
with the policy guidelines laid down and regularly reviewed by the
Board. In general the guidelines require that un-invested cash will
be held in money market funds. The particular risks they have
identified are detailed in the Directors' Report on page 13. The
Company has entered into a derivative transaction, further details
of which are given in the Chairman's Statement and in note 12 to
the Financial Statements.
Going Concern
After making the necessary enquiries, the Directors confirm that
they are satisfied that the Company has adequate resources to
continue in business for the foreseeable future. The Directors
therefore believe that it is appropriate to continue to apply the
going concern basis in preparing the financial statements. There
are no borrowings or banking facilities in place nor are they
anticipated to be required going forward.
Relations with Shareholders
The Board recognises the value of maintaining regular
communications with shareholders. In addition to the formal
business of the Annual General Meeting, an opportunity is given to
all shareholders to question the Board and the investment manager
on matters relating to the Company's operation and performance.
Proxy voting figures for each resolution will be announced at the
Annual General Meeting. The Board will also respond to any written
queries made by shareholders during the course of the year and can
be contacted at 4-5 Grosvenor Place, London, SW1X 7HJ.
Alternatively, the Investment Manager may be contacted on 020 7201
8989.
Compliance Statement
The Listing Rules require the Board to report on compliance with
the Combined Code provisions throughout the accounting year. With
the exception of the limited items outlined and explained below,
the directors consider that the Company has complied throughout the
year under review with the provisions set out in Section 1 of the
Combined Code of Corporate Governance published by the Financial
Reporting Council in 2008:
1. Whilst there is a process for briefing new directors they do
not receive a full, formal and tailored induction on joining the
Board. Such matters are addressed on an individual basis as they
arise (A5.1).
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 (A1.3, A6.1).
3. The Company does not have a senior independent director. The
Board does not consider such an appointment appropriate for the
Company.(A3.3).
4. The Company does not conduct a formal review as to whether
there is a need for an internal audit function. The directors do
not consider that an internal audit would be an appropriate control
for a venture capital trust (C3 .5).
5. As all the Directors are non-executive, it is not considered
appropriate to appoint a Nomination or Remuneration Committee (A4.1
and B2.1).
6. A smaller company should have at least two independent
non-executive directors. The Board regularly reviews the
independence of its members and as a result of their review a
decision was taken that the TPIMLLP appointee should be replaced by
a director who is independent of TPIMLLP. (A.3.2)
On behalf of the Board
Chad Murrin,
Chairman
8 June 2011
Report of the Directors - Directors' Responsibility
Statement
The Directors are responsible for preparing the Report of the
Directors and the Financial Statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare Financial
Statements for each financial year. Under that law the Directors
elect to prepare the Financial Statements in accordance with
International Financial Reporting Standards as adopted by the
European Union (IFRSs). Under company law the Directors must not
approve the Financial Statements unless they are satisfied that
they give a true and fair view of the state of affairs and profit
or loss of the Company for that period. In preparing these
Financial Statements, the Directors are required to:
-- select suitable accounting policies and then apply them
consistently;
-- make judgements and accounting estimates that are reasonable
and prudent;
-- state whether applicable IFRSs have been followed, subject to
any material departures disclosed and explained in the Financial
Statements;
-- prepare the Financial Statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the Financial Statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
In so far as each of the Directors is aware:
-- there is no relevant audit information of which the Company's
auditor is unaware; and
-- the Directors have taken all steps that they ought to have
taken to make themselves aware of any relevant audit information
and to establish that the auditor is aware of that information.
The Company's Financial Statements are published on the TPIMLLP
website, www.triplepoint.co.uk. The maintenance and integrity of
this website is the responsibility of TPIMLLP 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 my knowledge:
-- the Financial Statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company; and
-- the management 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
Chad Murrin
Chairman
8 June 2011
Statement of Comprehensive Income
for the year ended 31 March 2011
31 March 2011 31 March 2010
---------------------------- ----------------------------
Note Rev. Cap. Total Rev. Cap. Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment
income 5 553 - 553 584 - 584
Realised (loss)
on
investments - (5) (5) - - -
Unrealised
(loss) / gain
on
investments - (198) (198) - 182 182
Unrealised
(loss) / gain
on derivative
transaction - (186) (186) - 195 195
Investment
return 553 (389) 164 584 377 961
-------- -------- -------- -------- -------- --------
Investment
management
fees 6 84 252 336 88 263 351
Financial and
regulatory
costs 23 - 23 24 - 24
General
administration 17 - 17 11 - 11
Legal and
professional
fees 7 34 - 34 32 23 55
Directors'
remuneration 8 41 - 41 40 - 40
Operating
expenses 199 252 451 195 286 481
-------- -------- -------- -------- -------- --------
Profit/ (loss)
before
taxation 354 (641) (287) 389 91 480
Taxation 9 (68) 53 (15) (107) 77 (30)
Profit / (loss)
after
taxation 286 (588) (302) 282 168 450
-------- -------- -------- -------- -------- --------
Total
comprehensive
income /
(loss) 286 (588) (302) 282 168 450
-------- -------- -------- -------- -------- --------
Basic and
diluted
earnings /
(loss) per
share 10 1.25p (2.57p) (1.32p) 1.23p 0.74p 1.97p
-------- -------- -------- -------- -------- --------
The total column of this statement is the statement of
comprehensive income of the Company prepared in accordance with
International Financial Reporting Standards (IFRS). The
supplementary revenue return and capital return columns have been
prepared under guidance published by the Association of Investment
Companies.
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 this
statement.
Balance Sheet
as at 31 March 2011
31 March
Note 2011 31 March 2010
GBP'000 GBP'000
Non current assets
Financial assets at fair value through the
income statement 11 19,096 18,612
--------- --------------
Current assets
Receivables 13 46 71
Cash and cash equivalents 14 125 1,493
171 1,564
--------- --------------
Total assets 19,267 20,176
--------- --------------
Current liabilities
Payables and accrued expenses 15 53 339
Current taxation payable 21 28
74 367
--------- --------------
Net assets 19,193 19,809
========= ==============
Equity attributable to equity
holders of the Company
Share capital 16 229 229
Capital redemption reserve 2 2
Special distributable reserve 21,576 21,608
Capital reserve (2,901) (2,313)
Revenue reserve 287 283
Total equity 19,193 19,809
--------- --------------
Net asset value per share 17 83.96p 86.51p
(pence)
========= ==============
The statements were approved by the Directors and authorised for
issue on 8 June 2011 and are signed on their behalf by:
Chad Murrin
Chairman
8 June 2011
Company registration number: 6421355
The accompanying notes are an integral part of this
statement.
Statement of Changes in Shareholders' Equity
for the year ended 31 March 2011
Share Special
Issued Redemption Distributable Capital Revenue
Capital Reserve Reserve Reserve Reserve Total
GBP\'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 31 March 2011
Opening
balance 229 2 21,608 (2,313) 283 19,809
Purchase of
own shares - - (32) - - (32)
Dividend paid - - - - (282) (282)
Transactions
with owners - - (32) - (282) (314)
-------- ----------- -------------- -------- -------- --------
(Loss) /
profit for
the year - - - (588) 286 (302)
Total
comprehensive
(loss) / year
for the
period - - - (588) 286 (302)
-------- ----------- -------------- -------- -------- --------
Balance at 31
March 2011 229 2 21,576 (2,901) 287 19,193
======== =========== ============== ======== ======== ========
Capital
reserve
consists of:
Unrealised
losses on
investments (2,267)
Other realised
losses (634)
(2,901)
========
Year ended 31
March 2010
Opening
balance 229 2 21,608 (2,481) 404 19,762
Dividend paid - - - - (403) (403)
Transactions
with owners - - - - (403) (403)
-------- ----------- -------------- -------- -------- --------
Profit for the
year - - - 168 282 450
Total
comprehensive
income for
the year - - - 168 282 450
-------- ----------- -------------- -------- -------- --------
Balance at 31
March 2010 229 2 21,608 (2,313) 283 19,809
======== =========== ============== ======== ======== ========
Capital
reserve
consists of:
Unrealised
losses on
investments (1,883)
Other realised
losses (430)
(2,313)
========
The special distributable reserve arises from the cancellation
of the share premium. The capital reserve is non-distributable. The
revenue reserve is distributable by way of dividend. The special
distributable reserve can be used to fund buy-backs of shares.
The accompanying notes are an integral part of this
statement.
Cash Flow Statement
for the year ended 31 March 2011
Year ended Year ended
31 March 2011 31 March 2010
GBP'000 GBP'000
Cash flows from operating
activities
(Loss) / profit before taxation (287) 480
Realised loss on investments 5 -
Unrealised loss / (gain) on
investments 384 (377)
Cash flows generated by operations 102 103
Decrease in receivables 25 2,452
(Decrease) / increase in payables (286) 224
Taxation paid (22) (50)
Net cash flows from operating
activities (181) 2,729
-------------- --------------
Cash flows from investing
activities
Purchase of financial assets
at fair value through profit
or loss (5,403) (2,385)
Proceeds of sale of financial
assets at fair value through
profit or loss 1,568 950
Purchase of money market funds (1,160) (3,360)
Proceeds from disposal of
money market funds 4,122 -
Net cash flows from investing
activities (873) (4,795)
-------------- --------------
Cash flows from financing
activities
Purchase of own shares (32) -
Dividends paid (282) (403)
Net cash flows from financing
activities (314) (403)
-------------- --------------
Net (decrease) in cash and
cash equivalents (1,368) (2,469)
============== ==============
Reconciliation of net cash
flows to movements in cash
and cash equivalents
Opening cash and cash equivalents 1,493 3,962
Net (decrease) in cash and
cash equivalents (1,368) (2,469)
Closing cash and cash equivalents 125 1,493
============== ==============
The accompanying notes are an integral part of this
statement.
Notes to the Financial Statements
1. Corporate Information
The Financial Statements of the Company for the year ended 31
March 2011 were authorised for issue in accordance with a
resolution of the Directors on 2 June 2011.
The Company was admitted for listing on the London Stock
Exchange on 6 February 2008.
The Company is incorporated and domiciled in Great Britain. The
address of its registered office, which is also its principal place
of business, is 4-5 Grosvenor Place, London, SW1X 7HJ.
The Company's Financial Statements are presented in Pounds
Sterling (GBP) which is also the functional currency of the
Company.
The principal activity of the Company is investment. The
Company's investment strategy is to offer combined exposure to GAM
Diversity 2.5XL (a leveraged version of GAM's fund of hedge funds)
and venture capital investments focused on companies with
contractual revenues from financially secure counterparties.
2. Basis of preparation and accounting policies
Basis of preparation
After making the necessary enquiries, the Directors confirm that
they are satisfied that the Company has adequate resources to
continue in business for the foreseeable future. The Directors
therefore believe that it is appropriate to continue to apply the
going concern basis in preparing the financial statements. There
are no borrowings or banking facilities in place nor are they
anticipated to be required going forward.
The Financial Statements of the Company for the year ended 31
March 2011 have been prepared in accordance with accounting
policies consistent with International Financial Reporting
Standards (IFRS) adopted for use in the European Union and
therefore comply with the articles of the EU (IAS) regulation and
with the statement of recommended practice ("SORP"), "Financial
Statements of Investment Companies and Venture Capital Trusts"
issued by the Association of Investment Companies ("AIC") in
January 2009, in so far as this does not conflict with IFRS.
The Financial Statements have been prepared on a historical cost
basis except that investments are shown at fair value through
profit or loss.
The preparation of Financial Statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of policies and the reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
various other factors believed to be reasonable under the
circumstances, the results of which form the basis of making
judgements about the carrying value 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 appropriateness of the allocation of management expenses
between revenue and capital, which is based on the split of the
long-term anticipated return between revenue and capital of net
income, will impact on the value of distributable reserves.
The key judgements made by Directors are in the valuation of
non-current assets. The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the
revision affects that period or in the period of revision and
future periods if the revision affects both current and future
periods. The carrying value of investments is disclosed in note
11.
Another key judgement made by the Board is that the Company owns
50% of the issued share capital of Lorngreen Ltd but does not have
control over the company and therefore does not consolidate the
results of Lorngreen Limited.
These accounting policies have been applied consistently for the
purposes of preparation of these Financial Statements.
Standards issued but not yet effective
The following new standards, amendments to standards and
interpretations are not yet effective for the period ended 31 March
2011, and have not been applied in preparing these Financial
Statements.
-- IAS 24 (Revised 2009) Related Party Disclosures (effective 1
January 2011)
-- Improvements to IFRS issued May 2010 (some changes effective
1 July 2010, others effective 1 January 2011)
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 the statement of comprehensive income
In order to better reflect the activities of an investment trust
company, 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
Statement of Comprehensive Income. In accordance with the Company's
status as a UK investment Company under sS833 of the Companies Act
2006, net capital returns may not be distributed by way of
dividend.
Capital Management
The Company's objectives when managing capital are:
-- to safeguard its ability to continue as a going concern, so
that it can continue to provide returns to shareholders and
benefits for other stakeholders;
-- to ensure sufficient liquid resources are available to meet
the funding requirements of its investments and to fund new
investments where identified.
The Company has no external debt; consequently all capital is
represented by the value of share capital, distributable and other
reserves. Total Shareholder equity at 31 March 2011 was GBP19.2
million (2010: GBP19.8 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 a documented investment
strategy, and information about the portfolio is provided
internally on that basis to the Company's Board of Directors.
Accordingly upon initial recognition the investments and loan notes
are designated as "at fair value through profit or loss" ("FVTPL")
with the exception of the derivative transactions which do not need
to be designated. They are included initially at fair value which
is taken to be their cost (excluding expenses incidental to the
acquisition which are written off in the statement of comprehensive
income and allocated to "capital" at the time of acquisition).
Subsequently the investments are valued at "fair value" which is
measured as follows:
-- Unlisted investments are fair valued by the Directors in
accordance with the International Private Equity and Venture
Capital Valuation Guidelines and IAS 39. Fair value is established
by using measurements of value such as price of recent
transactions, earnings multiples and net assets.
-- Listed investments are fair valued at bid price on the
relevant date.
Where securities are designated upon initial recognition as at
fair value through the profit or loss, gains and losses arising
from changes in fair value are included in net profit or loss for
the period as a capital item in accordance with the AIC SORP. The
profit or loss on disposal is calculated net of transaction costs
of disposal.
Money market funds are designated as non-current asset
investments at fair value through profit or loss due to the
Company's investment policy of holding a combination of VCT
qualifying holdings and monetary assets. Money market funds are
valued based on the bid price quoted on the balance sheet date.
Previously money market funds were classified as current
investments.
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. Transaction costs
are expensed to profit or loss as incurred.
The 50% shareholding in Lorngreen has not been accounted for as
a subsidiary as TP70 2008 (I) VCT plc is not deemed to have control
over the company. In accordance with the exception within IAS 28,
"Investments in Associates", those undertakings in which the
Company holds more than 20% of the equity are not regarded as
associated undertakings. Therefore these investments are measured
at fair value in accordance with IAS 39, "Financial Instruments,
Recognition and Measurement".
Derivatives, comprising income swaps, are classified at fair
value through profit or loss.
Income
Investment income includes interest earned on bank balances and
money market securities and includes income tax withheld at source.
Dividend income is shown net of any related tax credit and is
brought into account on the ex-dividend date.
Fixed returns on investment loans, debt and money market
securities are recognised on a time apportionment basis so as to
reflect the effective interest rate, provided there is no
reasonable doubt that payment will be received in due course.
Expenses
All expenses are accounted for on the accruals basis. Expenses
are charged to revenue with the exception of the investment
management fee, which has been charged 25% to the revenue account
and 75% to the capital account to reflect, in the Directors'
opinion, the expected long term split of returns in the form of
income and capital gains respectively from the investment
portfolio.
Taxation
Corporation tax payable is applied to profits chargeable to
corporation tax, if any, at the current rate in accordance with IAS
12 "Income Taxes". The tax effect of different items of income/gain
and expenditure/loss is allocated between capital and revenue
return 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
temporary difference can be utilised. Deferred tax is measured at
the tax rates that are expected to be applied to the temporary
differences when they reverse, based on the laws that have been
enacted or substantively enacted by the reporting date. The
directors have considered the requirements of IAS 12 and do not
believe that any provision should be made.
Financial instruments
The Company's principal financial assets are its investments and
the policies in relation to those assets are set out above.
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the entity after deducting all
of its financial liabilities. Where the contractual terms of share
capital do not have any terms meeting the definition of a financial
liability then this is classed as an equity instrument. Dividends
and distributions relating to equity instruments are debited direct
to equity.
Provisions
A provision is recognised when the Company has a legal or
constructive obligation as a result of a past event and it is
probable that an outflow of economic benefits will be required to
settle the obligation. If the effect is material, expected future
cash flows are discounted using a current pre-tax rate that
reflects, where appropriate, the risks specific to the
liability.
Where the Company expects some or all of a provision to be
reimbursed, for example under an insurance policy, the
reimbursement is recognised as a separate asset but only when
recovery is virtually certain. The expense relating to any
provision is presented in the statement of comprehensive income net
of any reimbursement. Where discounting is used, the increase in
the provision due to unwinding the discount is recognised as a
finance cost.
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,
"Financial Instruments: Presentation".
Cash and cash equivalents
Cash and cash equivalents represents cash available at less than
three months' notice.
Receivables
Receivables are included at fair value on initial recognition
and subsequently at amortised cost. An impairment loss is
recognised whenever the carrying amount of an asset exceeds the
receivable amount. The recoverable amount is only determined when
objective evidence of impairment exists.
Trade and other payables
Trade and other payables are included at fair value on initial
recognition and subsequently at amortised cost.
Reserves
The revenue reserve and capital reserve reflect the guidance
published by the Association of Investment Companies. The capital
reserve is non-distributable. The revenue reserve is distributable
by way of dividend. The special distributable reserve arises from
the cancellation of share premium.
3. Seasonality of operations
The Company's operations are not seasonal.
4. Segmental reporting
The Company only has one class of business, being investment
activity. All revenues and assets are generated and held in the
UK.
5. Investment Income
Year ended Year ended
31 March 2011 31 March 2010
---------------------------- ----------------------------
Rev. Cap. Total Rev. Cap. Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loan stock
interest 537 - 537 558 - 558
Income receivable
on money market
funds 16 - 16 25 - 25
Interest
receivable on
bank balances - - - 1 - 1
Total 553 - 553 584 - 584
-------- -------- -------- -------- -------- --------
6. Investment Management Fees
TPIMLLP provides investment management and administration
services to the Company under an Investment Management Agreement
effective 6 February 2008 which runs until 6 February 2013 and may
be terminated at any time thereafter by not less than twelve
months' notice given by either party and which provides for an
administration and investment management fee of 1.75% per annum of
net assets payable quarterly in arrears. Should such notice be
given the Investment Manager would continue to perform its duties
under the investment management agreement and to receive its
management fee during the notice period.
7. Legal and professional fees
Legal and professional fees include the following remuneration
paid to the Company's auditor, Grant Thornton UK LLP:
Year ended Year ended
31 March 2011 31 March 2010
---------------------------- ----------------------------
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 20 - 20 10 - 10
Other services
related to
taxation 4 - 4 4 - 4
24 - 24 14 - 14
-------- -------- -------- -------- -------- --------
8. Directors' Remuneration
The only remuneration received by the Directors was their
directors' fees. The Company has no employees other than the
non-executive Directors. The average number of non-executive
Directors in the year was 3.
Year ended Year ended
31 March 2011 31 March 2010
---------------------------- ----------------------------
Rev. Cap. Total Rev. Cap. Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Chad Murrin
(Chairman) 15 - 15 15 - 15
Peter Hargreaves 6 - 6 - - -
Michael Stanes 6 - 6 - - -
Sir John
Lucas-Tooth 8 - 8 13 - 13
Robert Reid 6 - 6 12 - 12
Total 41 - 41 40 - 40
-------- -------- -------- -------- -------- --------
9. Taxation
Year ended Year ended
31 March 2011 31 March 2010
---------------------------- ----------------------------
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 354 (641) (287) 389 91 480
Capital losses /
(gains) not
taxable - 389 389 - (377) (377)
354 (252) 102 389 (286) 103
-------- -------- -------- -------- -------- --------
UK corporation
tax at an
effective rate
of 21% (27%) 74 (53) 21 105 (77) 28
Adjustment re
prior year (6) - (6) 2 - 2
Total charged in
Statement of
comprehensive
income 68 (53) 15 107 (77) 30
-------- -------- -------- -------- -------- --------
10. (Loss) / Earnings per share
The loss per share is based on the loss after tax of GBP302,000
(2010: GBP450,000 profit) and on the weighted average number of
shares in issue during the period of 22,894,571 (2010:
22,898,626).
The weighted average number of shares during the year were:
Shares Weighted
No. of
Issued Days Average
No of Shares
01-Apr-10 In Issue 22,898,626 365 22,898,626
23-Feb-11 Buy back (40,000) 37 (4,055)
No of Shares
31-Mar-11 In Issue 22,858,626 365 22,894,571
----------- -----------
There are no potentially dilutive capital instruments in issue
and, therefore, no diluted return per share figures are included in
these financial statements.
11. Financial assets at fair value through profit or loss
The Board's assessment of the key financial instrument risks of
the Company is disclosed on page 13 of the Directors' Report.
Investments
For financial instruments that are measured in the balance sheet
at fair value, IFRS 7 requires disclosure of fair value
measurements by level of the following fair value measurement
hierarchy:
Level 1: quoted prices in active markets for identical assets or
liabilities. The fair value of financial instruments traded in
active markets is based on quoted market prices at the balance
sheet date. A market is regarded as active if quoted prices are
readily and regularly available, and those prices represent actual
and regularly occurring market transactions on an arms' length
basis. The quoted market price used for financial assets held by
the Company is the current bid price.
Level 2: the fair value of financial instruments that are not
traded in active markets is determined by using valuation
techniques. These valuation techniques maximise the use of
observable market data where it is available and rely as little as
possible on entity specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument
is included in level 2.
Level 3: the fair value of financial instruments that are not
traded in an active market (for example, investments in unquoted
companies) is determined by using valuation techniques such. If one
or more of the significant inputs is not based on observable market
data, the instrument is included in level 3.
There have been no transfers between these classifications in
the period and the movement in Level 3 instruments is disaggregated
below. The 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.
All items held at fair value through profit or loss were
designated as such upon initial recognition.
Level 3 valuations include assumptions based on non-observable
data, such as discounts applied either to reflect impairment of the
financial assets of the investee company, held at a price of recent
investments, or valuations of investments based on their net asset
values.
Movements in investments held at fair value through profit or
loss during the year to 31 March 2011 and included in profit or
loss were as follows:
Year ended 31 March
2011
Level 3 Level 2 Level 1
Unquoted Derivative Money Total
Investments Transaction Market Funds Investments
GBP'000 GBP'000 GBP'000 GBP'000
Opening cost 13,843 3,292 3,360 20,495
Opening unrealised
loss (952) (931) - (1,883)
Opening fair value
at 1 April 2010 12,891 2,361 3,360 18,612
Purchases at cost 5,403 - 1,160 6,563
Disposal proceeds (1,568) - (4,122) (5,690)
Realised loss on
investments (5) - - (5)
Unrealised loss on
investments (198) (186) - (384)
Closing fair value
at 31 March 2011 16,523 2,175 398 19,096
============ ============ ============= ============
Closing cost 17,673 3,292 398 21,363
Closing unrealised
loss (1,150) (1,117) - (2,267)
------------ ------------ ------------- ------------
Year ended 31 March
2010
Level 3 Level 2 Level 1
Unquoted Derivative Money Total
Investments Transaction Market Funds Investments
GBP'000 GBP'000 GBP'000 GBP'000
Opening cost 12,408 3,292 - 15,700
Opening unrealised
loss (1,134) (1,126) - (2,260)
Opening fair value
at 1 March 2009 11,274 2,166 - 13,440
Purchases at cost 2,385 - 3,950 6,335
Disposal proceeds (950) - (590) (1,540)
Unrealised gain on
investments 182 195 - 377
Closing fair value
at 31 March 2010 12,891 2,361 3,360 18,612
============ ============ ============= ============
Closing cost 13,843 3,292 3,360 20,495
Closing unrealised
loss (952) (931) - (1,883)
------------ ------------ ------------- ------------
Included in the above is an investment of GBP2,175,243 (2010:
GBP2,361,000) in the derivative transaction with Bank Julius Baer
described in note 12.
Further details of these investments are provided in the
Investment portfolio review.
All investments are designated as fair value through profit or
loss at the time of acquisition and all capital gains or losses
arising on investments are so designated. Given the nature of the
Company's venture capital investments, the changes in fair values
of such investments recognised in these Financial Statements are
not considered to be readily convertible to cash in full at the
balance sheet date and accordingly any gains are or losses on these
items are treated as unrealised.
Sensitivity
An increase of 1% in the value of investments would increase the
capital profits for the period and the net asset value at 31 March
2011 by GBP187,000 (31 March 2010: GBP152,000). A decrease of 1%
would reduce the capital profits and net asset value by the same
amount.
An increase of interest rates by 1% would have no significant
impact.
The following table discloses the financial assets and
liabilities of the company in the categories defined by IAS 39:
Financial Instruments, Recognition and Measurement.
Designated
at fair
value
through
Held for Loans and Amortised profit or
Book value Trading receivables cost loss
2011
Assets:
Financial
assets at
fair value
through
profit or
loss 16,523 - - - 16,523
Derivative 2,175 2,175 - - -
Money market
funds 398 - - - 398
Receivables 44 - 44 - -
Prepaid
expenses 2 - 2 - -
Cash and
cash
equivalents 125 - 125 - -
19,267 2,175 171 - 16,921
----------- ----------- ------------ ---------- -----------
Liabilities:
Other
payables 35 - - 35 -
Taxation
payable 21 - - 21 -
Accrued
expenses 18 - - 18 -
74 - - 74 -
----------- ----------- ------------ ---------- -----------
2010
Assets:
Financial
assets at
fair value
through
profit or
loss 12,891 - - - 12,891
Derivative 2,361 2,361 - -
Money market
funds 3,360 - - - 3,360
Receivables 68 - 68 - -
Prepaid
expenses 3 - 3 - -
Cash and
cash
equivalents 1,493 - 1,493 - -
20,176 2,361 1,564 - 16,251
----------- ----------- ------------ ---------- -----------
Liabilities:
Other
payables 318 - - 318 -
Taxation
payable 28 - - 28 -
Accrued
expenses 21 - - 21 -
367 - - 367 -
----------- ----------- ------------ ---------- -----------
Analysis of money market funds:
31-Mar-11 31-Mar-10
GBP'000 GBP'000
Deutsche Global Liquidity
Managed Sterling Fund 231 1,680
Ignis Liquidity Fund 230 1,680
461 3,360
---------- ----------
Money market funds are offshore funds which invest in money
markets and distribute all net income. The value of the investments
remains constantly at par and they are realisable on demand.
12. Derivative transaction
The Company has made a payment of GBP3,292,000 to Bank Julius
Baer and in return will receive back an equivalent sum plus or
minus the performance in the intervening time of GAM Diversity
2.5XL. The transaction will run for a maximum of five years but may
be terminated by the Company on three months' notice before the
period expires. The loss on this investment in the year is deemed
to be a capital item and is therefore included in the capital
column of the income statement.
The value shown for the derivative transaction represents the
amount payable to the Company if the derivative transaction were
closed on the balance sheet date.
13. Receivables
31 March 2011 31 March 2010
GBP'000 GBP'000
Receivables 44 68
Prepayments and accrued
income 2 3
Total 46 71
-------------- --------------
14. Cash and cash equivalents
Cash and cash equivalents comprise deposits with The Royal Bank
of Scotland plc.
15. Payables
31 March 2011 31 March 2010
GBP'000 GBP'000
Payables 35 318
Accrued expenses 18 21
Total 53 339
-------------- --------------
16. Share capital
31 March 2011 31 March 2010
Ordinary Shares of 1p
Authorised
No. Of Shares 50,000,000 50,000,000
Par Value GBP'000 500 500
Issued & Fully Paid
No. Of Shares 22,858,626 22,898,626
Par Value GBP'000 229 229
17. Net asset value per share
The calculation of net asset value per share is based on Net
Assets ofGBP19,193,000 (2010: GBP19,809,000) divided by the
22,858,626 (2010: 22,898,626) Ordinary Shares in issue.
18. Related party transactions
Peter Hargreaves has an equity interest in TPIMLLP. During the
year TPIMLLP provided investment management and administration
services to the Company amounting to GBP336,000 (2010: GBP351,000).
GBP7,000 was due to TPIMLLP at 31 March 2011 (2010: GBP7,000).
During the year 40,000 shares were repurchased at a price of 79p
per share and then cancelled. The shares were held by the late
David Dick who had an equity interest in TPIMLLP
19. Contingent liabilities
There were no contingent liabilities at 31 March 2011 or at 31
March 2010.
20. Capital commitments
There were no capital commitments at 31 March 2011 or at 31
March 2010.
21. Dividends
During the year a dividend of 1.23p per share was paid on
22,898,626 shares, which totalled GBP282,000.
It has been proposed that a further dividend will be paid on 29
July 2011 of 1.54p per share on 22,858,626 shares, which totals
GBP352, 000.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FPMJTMBAMBRB
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