REG - Triple Point Inc VCT - Annual Financial Report <Origin Href="QuoteRef">TPV1.L</Origin> - Part 2
15/06/2017 15:10
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(295)
Net assets before VCT loans 4,722
Net assets 2,832
Green Highland Allt Phocachain (1015) Ltd has constructed two separate 500kw run-of-river hydroelectric power plants located in Glen Moriston, Scottish Highlands. Both schemes were commissioned on schedulein December 2015. The company earns Feed-in-Tariffs from the generation and export of electricity.
Green Highland Allt Ladaidh (1148) Ltd
Date of first investment Cost £ Valuation £ Valuation Method Income recognised by TP Income for the year £'000 Equity Held by TP Income % Equity Held by TPIM managed funds %
20 March 2015 3,500,000 3,500,000 Cost 294 35.17 50.25
Summary of Information from Investee Company Financial Statements ending in 2016: £'000
Turnover 34
Earnings before interest, tax, amortisation and depreciation (EBITDA) 11
Profit before tax (28)
Net assets before VCT loans 4,855
Net assets 3,355
Green Highland Allt Ladaidh (1148) Ltd has constructed a run-of-river hydro-electric power plant near Loch Garry, Invergarry in the Scottish Highlands. The 1,300kW Allt Ladaidh scheme completed construction and was commissioned in August 2016. The company earns Feed-in-Tariffs and other revenues from the generation and export of electricity.
Green Highland Allt Choire A Bhalachain (225) Ltd
Date of first investment Cost £ Valuation £ Valuation Method Income recognised by TP Income for the year £'000 Equity Held by TP Income % Equity Held by TPIM managed funds %
18 July 2014 3,130,000 3,038,000 Discounted Cash Flow 297 49.90 100.00
Summary of Information from Investee Company Financial Statements ending in 2016: £'000
Turnover 264
Earnings before interest, tax, amortisation and depreciation (EBITDA) 124
Profit before tax (269)
Net assets before VCT loans 2,699
Net assets 1,751
Green Highland Allt Choire a Bhalachain (225) Ltd is currently operating a 740kw run-of-river hydro-electric power plant located at Tomdoun, Invergarry in the Scottish Highlands. The project started construction in July 2014 and was commissioned on schedule in November 2015. The company earns Feed-in-Tariffs and other revenues from the generation and export of
electricity.
Broadpoint 2 Ltd
Date of first investment Cost £ Valuation £ Valuation Method Income recognised by TP Income for the year £'000 Equity Held by TP Income % Equity Held by TPIM managed funds %
12 February 2015 2,834,000 2,834,000 Share of Net Assets 238 49.00 98.00
Summary of Information from Investee Company Financial Statements ending in 2016: £'000
Turnover 173
Earnings before interest, tax, amortisation and depreciation (EBITDA) 30
Profit before tax 4
Net assets before VCT loans 3,637
Net assets 3
Broadpoint 2 Ltd is a non-qualifying investment which provides finance to the Hydroelectric Power sector.
Green Highland Allt Garbh Ltd
Date of first investment Cost £ Valuation £ Valuation Method Income recognised by TP Income for the year £'000 Equity Held by TP Income % Equity Held by TPIM managed funds %
01 April 2015 2,710,000 2,710,000 Cost 208 27.46 50.25
Summary of Information from Investee Company Financial Statements ending in 2016: £'000
Turnover -
Earnings before interest, tax, amortisation and depreciation (EBITDA) (7)
Profit before tax 339
Net assets before VCT loans 4,959
Net assets 3,471
Green Highland Allt Garbh Ltd is constructing a run-of-river hydroelectric power plant near Glen Affric, Cannich. The 1,500kW Allt Garbh scheme reached commercial close and has begun construction and is scheduled to be commissioned by August 2017. The company will earn Feed-in-Tariffs and other revenues from the generation and export of electricity.
Green Peak Generation Ltd
Date of first investment Cost £ Valuation £ Valuation Method Income recognised by TP Income for the year £'000 Equity Held by TP Income % Equity Held by TPIM managed funds %
02 April 2015 2,200,000 2,200,000 Cost 12 26.97 50.25
Summary of Information from Investee Company Financial Statements ending in 2016: £'000
Turnover -
Earnings before interest, tax, amortisation and depreciation (EBITDA) (5)
Profit before tax 9
Net assets before VCT loans 4,108
Net assets 2,878
Green Peak Generation Ltdreached financial close during May 2017 on a 7.5 MW gas power plant in Cumbria, which is expected to be commissioned during Q1 2018.
Elementary Ltd
Date of first investment Cost £ Valuation £ Valuation Method Income recognised by TP Income for the year £'000 Equity Held by TP Income % Equity Held by TPIM managed funds %
18 March 2013 2,060,000 2,102,000 Discounted Cash Flow 207 49.93 99.22
Summary of Information from Investee Company Financial Statements ending in 2016: £'000
Turnover 268
Earnings before interest, tax, amortisation and depreciation (EBITDA) 180
Profit before tax (88)
Net assets before VCT loans 1,954
Net assets 414
Elementary Energy Ltd is currently operating a 500kw run-of-river hydroelectric power plant situated at Abhainn Shalachain river at Fiunary, Morven, Scotland. The plant was commissioned in January 2015 and is operating successfully and earns Feed-in-Tariffs and other revenues from the generation and export of electricity.
Funding Path Ltd
Date of first investment Cost £ Valuation £ Valuation Method Income recognised by TP Income for the year £'000 Equity Held by TP Income % Equity Held by TPIM managed funds %
29 January 2016 2,200,000 2,216,000 Share of Net Assets 171 49.00 98.00
Summary of Information from Investee Company Financial Statements ending in 2016: £'000
Turnover 275
Earnings before interest, tax, amortisation and depreciation (EBITDA) 268
Profit before tax 41
Net assets before VCT loans 3,232
Net assets 32
Funding Path Ltd provides funding for SME Leasing companies.
Digital Screen Solutions Ltd
Date of first investment Cost £ Valuation £ Valuation Method Income recognised by TP Income for the year £'000 Equity Held by TP Income % Equity Held by TPIM managed funds %
31 March 2009 2,020,000 2,070,000 Discounted Cash Flow 68 35.36 99.87
Summary of Information from Investee Company Financial £'000
Statements ending in 2016:
Turnover 1,657
Earnings before interest, tax, amortisation and depreciation 1,588
(EBITDA)
Profit before tax 539
Net assets before VCT loans 3,382
Net assets 1,968
Digital Screen Solutions Ltd is a provider of cinema
digitisation equipment. During the course of the year it
significantly added to its portfolio of projectors and now
operates digital projection equipment in the UK, Ireland and
Germany. It fully recouped its expected return on its projectors
in Italy and no longer retains an interest in these systems. At
year end the company owned a portfolio of 833 screens across the
UK, Ireland and Germany. 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 deriving ultimately from the six major investment grade
Hollywood Studios.
· All investments are held in the UK.
· The investments are a combination of debt and equity.
· Equity holding is equal to the voting rights.
The Strategic Report has been approved by the Board and signed on their behalf by the Chairman.
David Frank
Chairman
15 June 2017
Report of the Directors
The Directors present their Report and the audited Financial Statements for the year ended 31 March 2017.
Details of Directors
David Frank was a partner in Slaughter and May for twenty two years before retiring from the firm in 2008. As well as being
the firm's first Practice Partner from 2001 to 2008, his practice involved acting for several venture capital houses,
including 3i and Schroder Ventures. He was also involved in several flotations in the venture capital sector, including 3i,
Baronsmead and SVG Capital. Since retiring from legal practice, he has established a portfolio of voluntary roles. He has
been a Director and Chairman of the Company since 11 November 2010.
Simon Aclandhas over twenty five years' experience in venture capital, primarily at Quester, where he became Managing
Director. When Quester was sold in 2007 it had £200m under management and was one of the leading UK venture capital and
VCT investment managers. Simon was a director of over 20 companies in Quester's portfolio, many of which achieved
successful exits through flotation or trade sales. Simon is also a director of various other private companies and
charities, and a member of the investment committee of the British Business Bank's Angel Co-Fund. Simon was appointed a
Director on 12 March 2009.
Michael Stanes has been an Investment Director at Heartwood Investment Management, a London-based firm providing investment
management and wealth structuring services for high net worth individuals, since 2010. He began his career at Warburg
Investment Management (which became Mercury Asset Management) where he ran equity portfolios in London and Tokyo. He then
moved to the US where he founded a business on behalf of Merrill Lynch offering equity portfolio management to high net
worth individuals. In 2002 he joined Goldman Sachs Asset Management in London running global equity portfolios for a range
of institutional and individual clients before joining a new fund management partnership as CEO. Michael was appointed a
Director on 21 November 2012.
All Directors are considered to be independent.
The Board has considered provision B.7.2 of the UK Corporate Governance Code (September 2014) and believes that all the
Directors continue to be effective and to demonstrate commitment to their roles, the Board and the Company. The Directors
are discussed further within the Corporate Governance report on pages 29 and 30 which demonstrates the Board's compliance
with the UK Corporate Governance code.
Activities and Status
The Company is a Venture Capital Trust and its main activity is investing.
The Company has been provisionally approved as a VCT by HMRC.
The Company is registered in England as a Public Limited Company (Registration number 6421083). The Directors have managed,
and intend to continue to manage, the Company's affairs in such a manner as to comply with Section 274 of the Income Tax
Act 2007 which grants approval as a VCT.
The Company was not at any time up to the date of this report a close company within the meaning of S439 of the Corporation
Tax Act 2010.
Post Balance Sheet Events
Post balance sheet events are described in 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 4 and 11.
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 inception and a
review of the management contract and the services provided in accordance with its terms. As required by the Listing Rules,
the Directors confirm that in their opinion the continuing appointment of TPIM as Investment Manager is in the best
interests of the shareholders as a whole. In reaching this conclusion the Directors have taken into account the
performance of other VCTs managed by TPIM and the service provided by TPIM to the Company.
Substantial Shareholdings
As at the date of this report no disclosures of major shareholdings had been made to the Company under Disclosure and
Transparency Rule 5 (Vote Holder and Issuer Notification Rules).
Global Greenhouse Gas Emissions
The Company has no greenhouse gas emissions to report from the operations of the Company, nor does it have responsibility
for any other emission producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations
2013.
Annual General Meeting
Notice convening the 2017 Annual General Meeting of the Company and a form of proxy in respect of that meeting can each be
found at the end of this document.
Share Capital, Rights Attaching to the Shares and Restrictions on Voting and Transfer
The Company had in issue 19,463,120 Ordinary Shares, 5,131,353 A Ordinary Shares, 13,441,438 C Ordinary Shares and
13,701,636 D Ordinary Shares at 31 March 2017 (see note 15). As at that date none of the issued shares were held by the
Company as treasury shares. Subject to any suspension or abrogation of rights pursuant to relevant law or the Company's
articles of association, the shares confer on their holders (other than the Company in respect of any treasury shares) the
following principal rights:
a) the right to receive out of profits available for distribution such dividends as may be agreed to be paid (in the case
of a final dividend in an amount not exceeding the amount recommended by the Board as approved by shareholders in general
meeting or in the case of an interim dividend in an amount determined by the Board). All dividends unclaimed for a period
of 12 years after having become due for payment are forfeited automatically and cease to remain owing by the Company;
b) the right, on a return of assets on a liquidation, reduction of capital or otherwise, to share in the surplus assets of
the Company remaining after payment of its liabilities pari passu with other holders of ordinary shares of that class; and
c) the right to receive notice of and to attend and speak and vote in person or on a poll by proxy at any general meeting
of the Company. On a show of hands every member present or represented and voting has one vote and on a poll every member
present or represented and voting has one vote for every share of which that member is the holder; the validly executed
appointment of a proxy must be received not less than 48 hours before the time of the holding of the relevant meeting or
adjourned meeting or, in the case of a poll taken otherwise than at or on the same day as the relevant meeting or adjourned
meeting, be received after the poll has been demanded and not less than 24 hours before the time appointed for the taking
of the poll.
These rights can be suspended. If a member, or any other person appearing to be interested in shares held by that member,
has failed to comply within the time limits specified in the Company's articles of association with a notice pursuant to
S793 of the Companies Act 2006 (notice by a Company requiring information about interests in its shares), the Company can
until the default ceases suspend the right to attend and speak and vote at a general meeting and if the shares represent at
least 0.25% of their class the Company can also withhold any dividend or other money payable in respect of the shares
(without any obligation to pay interest) and refuse to accept certain transfers of the relevant shares.
Shareholders, either alone or with other shareholders, have other rights as set out in the Company's articles of
association and in company law.
A member may choose whether his or her shares are evidenced by share certificates (certificated shares) or held in
electronic (uncertificated) form in CREST (the UK electronic settlement system). Any member may transfer all or any of his
or her shares, subject in the case of certificated shares to the rules set out in the Company's articles of association or
in the case of uncertificated shares to the regulations governing the operation of CREST (which allow the Directors to
refuse to register a transfer as therein set out); the transferor remains the holder of the shares until the name of the
transferee is entered in the register of members. The Directors may refuse to register a share transfer if it is in respect
of a certificated share which is not fully paid up or on which the Company has a lien provided that, where the share
transfer is in respect of any share admitted to the Official List maintained by the UK Listing Authority, any such
discretion may not be exercised so as to prevent dealings taking place on an open and proper basis, or if in the opinion of
the Directors (and with the concurrence of the UK Listing Authority) exceptional circumstances so warrant, provided that
the exercise of such power will not disturb the market in those shares. Whilst there are no squeeze-out and sell-out rules
relating to the shares in the Company's articles of association, shareholders are subject to the compulsory acquisition
provisions in S974 to S991 of the Companies Act 2006.
Amendment of Articles of Association
The Company's articles of association may be amended by the members of the Company by special resolution (requiring a
majority of at least 75% of the persons voting on the relevant resolution).
Appointment and Replacement of Directors
A person may be appointed as a Director of the Company by the shareholders in general meeting by ordinary resolution
(requiring a simple majority of the persons voting on the relevant resolution) or by the Directors; no person, other than a
Director retiring by rotation or otherwise, shall be appointed or re-appointed a Director at any general meeting unless he
is recommended by the Directors or, not less than seven nor more than 42 clear days before the date appointed for the
meeting, notice is given to the Company of the intention to propose that person for appointment or re-appointment in the
form and manner set out in the Company's articles of association.
Each Director who is appointed by the Directors (and who has not been elected as a Director of the Company by the members
at a general meeting held in the interval since his appointment as a Director of the Company) is to be subject to election
as a Director of the Company by the members at the first Annual General Meeting of the Company following his or her
appointment. At each Annual General Meeting of the Company one third of the Directors for the time being, or if their
number is not three or an integral multiple of three the number nearest to but not exceeding one-third, are to be subject
to re-election.
The Companies Act allows shareholders in general meeting by ordinary resolution (requiring a simple majority of the persons
voting on the relevant resolution) to remove any Director before the expiry of his or her period of office, but without
prejudice to any claim for damages which the Director may have for breach of any contract of service between him or her and
the Company.
A person also ceases to be a Director if he or she resigns in writing, ceases to be a Director by virtue of any provision
of the Companies Act, becomes prohibited by law from being a Director, becomes bankrupt or is the subject of a relevant
insolvency procedure, or becomes of unsound mind, or if the Board so decides following at least six months' absence without
leave or if he or she becomes subject to relevant procedures under the mental health laws, as set out in the Company's
articles of association.
Powers of the Directors
Subject to the provisions of the Companies Act, the memorandum and articles of association of the Company and any
directions given by shareholders by special resolution, the articles of association specify that the business of the
Company is to be managed by the Directors, who may exercise all the powers of the Company, whether relating to the
management of the business or not. In particular, the Directors may exercise on behalf of the Company its powers to
purchase its own shares to the extent permitted by shareholders.
Directors Responsibilities
The Directors confirm that:
· so far as each of the Directors is aware there is no relevant audit information of which the Company's auditor is
unaware; and
· the Directors have taken all steps that they ought to have taken as Directors in order to make themselves aware of
any relevant audit information and to establish that the auditor is aware of that information.
Auditor
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.
David Frank
Director
15 June 2017
Directors' Responsibilities Statement
The Directors are responsible for preparing the Strategic Report, the Directors' Report, the Directors' Remuneration Report
and the Financial Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each financial year. Under that law the Directors
have elected to prepare the Financial Statements in accordance with International Financial Reporting Standards (IFRS) as
adopted by the European Union. Under company law the Directors must not approve the Financial Statements unless they are
satisfied that they give a true and fair view of the state of affairs and profit or loss of the Company for that year. In
preparing these Financial Statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgments and accounting estimates that are reasonable and prudent;
· state whether applicable IFRS have been followed, subject to any material departures disclosed and explained in the
Financial Statements;
· prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company
will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to
ensure that the Financial Statements and the Remuneration report comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for preparing the Annual Report in accordance with applicable law and regulations. The
Directors consider the Annual Report and the Financial Statements, taken as a whole, provide the information necessary to
assess the Company's position, performance, business model and strategy and are fair, balanced and understandable.
The Company's Financial Statements are published on the TPIM website, www.triplepoint.co.uk. The maintenance and integrity
of this website is the responsibility of TPIM and not of the Company. Legislation in the United Kingdom governing the
preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.
To the best of our knowledge:
· the Financial Statements, prepared in accordance with IFRS 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
David Frank
Chairman
15 June 2017
Corporate Governance
The Board of Triple Point Income VCT plc has considered the principles and recommendations of the Association of Investment
Companies Code of Corporate Governance (AIC Code 2015) by reference to the Association of Investment Companies Corporate
Governance Guide for Investment Companies (AIC Guide). The AIC Code 2015, as explained by the AIC Guide, addresses all the
principles set out in the UK Corporate Governance Code (September 2014), 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 2015, by reference to the AIC Guide, which incorporates the UK Corporate
Governance Code (September 2014), 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 2015 and the relevant provisions of the UK Corporate Governance Code (September 2014), except as set out at
the end of this report in the Compliance Statement.
Board of Directors
The Company has a Board of three Non-Executive Directors. Since all Directors are Non-Executive and day-to-day management
responsibilities are sub-contracted to the Investment Manager, the Company does not have a Chief Executive Officer. The
Directors have a range of business and financial skills which are relevant to the Company; these are described on page 24
of this report. Directors are provided with key information on the Company's activities, including regulatory and
statutory requirements, by the Investment Manager. The Board has direct access to company secretarial advice and compliance
services provided by the Investment Manager which is responsible for ensuring that Board procedures are followed and
applicable regulations complied with. All Directors are able to take independent professional advice in furtherance of
their duties.
Any appointment of new Directors to the Board is conducted, and appointments made, onmerit and with due regard for the
benefits of diversity on theBoard, including gender. All Directors are able to allocate sufficient time to the Company
todischarge their responsibilities.
The Board meets regularly on a quarterly basis, and on other occasions as required, to review the investment performance
and monitor compliance with the investment policy laid down by the Board. There is a formal schedule of matters reserved
for Board decision and the agreement between the Company and the Investment Manager has authority limits beyond which Board
approval must be sought.
The Investment Manager has authority over the management of the investment portfolio, the organisation of custodial
services, accounting, secretarial and administrative services. In practice the Investment Manager makes investment
recommendations for the Board's approval. In addition all investment decisions involving other VCTs managed by the
Investment Manager are taken by the Board rather than the Investment Manager. Other matters reserved for the Board
include:
· the consideration and approval of future developments or changes to the investment policy, including risk and asset
allocation;
· consideration of corporate strategy;
· approval of any dividend or return of capital to be paid to the shareholders;
· the appointment, evaluation, removal and remuneration of the Investment Manager;
· the performance of the Company, including monitoring the net asset value per share; and
· monitoring shareholder profiles and considering shareholder communications.
The Chairman leads the Board in the determination of its strategy and in the achievement of its objectives. The Chairman is
responsible for organising the business of the Board, ensuring its effectiveness and setting its agenda and has no
involvement in the day to day business of the Company. He facilitates the effective contribution of the Directors and
ensures that they receive accurate, timely and clear information and that they communicate effectively with shareholders.
The Chairman does not have significant commitments conflicting with his obligations to the Company.
The Company Secretary is responsible for advising the Board on all governance matters. All of the Directors have access to
the advice and services of the Company Secretary which has administrative responsibility for the meetings of the Board and
its committees. Directors may also take independent professional advice at the Company's expense where necessary in the
performance of their duties. As all of the Directors are Non-Executive, it is not considered appropriate to identify a
member of the Board as the senior Non-Executive Director of the Company.
The Company's articles of association and the schedule of matters reserved to the Board for decision provide that the
appointment and removal of the Company Secretary is a matter for the full Board.
The Company's articles of association require that one third of the Directors should retire by rotation each year and seek
re-election at the Annual General Meeting and that Directors newly appointed by the Board should seek re-appointment at the
next Annual General Meeting. The Board complies with the requirement of the UK Corporate Governance Code (September 2014)
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
David Frank, Chairman 4 2
Simon Acland 3 2
Michael Stanes 4 2
Audit Committee
The Board has appointed an audit committee of which David Frank is Chairman, which deals with matters relating to audit,
financial reporting and internal control systems. The Committee meets as required and has direct access to 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 the corporation tax return for the year ended 31 March 2016, and
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