Final Results

HIGHLIGHTS

· Fund substantially invested in a diverse range of high quality businesses and projects.

· Profit of £191,000 before tax for the year, a post-tax gain of 0.60p per share

· 18p per share of dividends paid since inception (including 6p interim dividend paid in March 2017), equivalent to an 8.6% per annum tax-free running yield on net investment.

CHAIRMAN'S STATEMENT

Introduction

I am pleased to present the Company's fourth Annual Report for the year ended 28 February 2017.

Results

The Company reported a profit before tax of £191,000 for the year (for the 14 month period ended 29 February 2016: £848,000) and a post-tax gain of 0.60p per ordinary share (calculated on the weighted average number of shares) (for the 14 month period ended 29 February 2016: 1.98p). The Net Asset Value per ordinary share ("NAV") at 28 February 2017 after adding back 18p dividends paid was 98.09p (2016: 97.49p). 

Dividend

As envisaged in the Company's prospectus, in March 2017, the Company has again paid a dividend of 6p per ordinary share, equivalent to an 8.6% tax-free annual running yield on shareholders' net investment.

Investments

At the end of the year, the Company had just over £19.8 million invested in a mixture of qualifying and non-qualifying investments whilst maintaining our VCT status. These investments are primarily in asset-backed businesses and projects. 

VCT qualifying status

PricewaterhouseCoopers LLP ("PwC") provides the board and the Investment Manager with advice on the ongoing compliance with HMRC rules and regulations concerning VCTs and has reported no issues in this regard for the Company to date. PwC also assists the Investment Manager in establishing the status of investments as qualifying holdings and will continue to assist the Investment Manager in monitoring rule compliance. 

Outlook

The lack of availability of bank credit has enabled the Company to assemble a portfolio of investments on attractive terms and we are pleased to report that the Company's net assets are now deployed in a diverse range of high quality businesses and projects. There may be some further changes in the composition of the portfolio but the Board expects to predominantly concentrate in the future on the monitoring of our existing investments and over the next year or so realising the portfolio to enable the liquidation of the fund after the fifth anniversary as was envisaged in the prospectus.

Egmont Kock

Chairman

29 June 2017

INVESTMENT MANAGER'S REPORT

Introduction

The Company's funds are now substantially deployed in both qualifying and non-qualifying investments and we believe our portfolio is well positioned to deliver attractive returns to shareholders within the fund's expected remaining time horizon.

Investments

Qualifying Investments

As previously reported, in July 2014, before the passing of the Finance Act 2014, the Company completed a £1.875 million qualifying investment (as part of a £5 million investment alongside other Puma VCTs) in Urban Mining Limited, a member of the Chinook Urban Mining group of companies. Chinook Urban Mining is a well-funded energy-from-waste business which is developing a flagship plant in East London to generate electricity through the gasification of municipal solid waste and will benefit from Renewable Obligations Certificates. The investment is secured with a first charge over the Chinook Urban Mining business and the eight acre site of the East London plant and is yielding an attractive return to the Company.

As reported in the Company's previous annual report, Kinloss Trading Limited and Jephcote Trading Limited (in which the Company had invested £3.5 million and £880,000 respectively) have, as members of SKPB Services LLP, been engaged in a contract with Openwide Investments Limited in relation to the construction of a new build 134 bedroom Ibis Budget Hotel and the associated infrastructure adjacent to Luton Airport. We are pleased to report that the project is nearing practical completion on time and on budget and the hotel is expected to open in the autumn.

As previously reported, a major fire occurred in February 2016 at the Materials Recycling Facility ("MRF") operated by Opes Industries Limited ("Opes"), into which the Company has invested a total of £3.6m (as part of an £8.8m investment by Puma entities). As a result of the incident, and as reported in the Company's previous annual report, the board made a provision of £532,000 against the carrying value of the Company's investment in Opes. Opes owned a 73 hectare site in north Oxfordshire with a MRF, including a landfill site for non-hazardous materials and an aggregates/gravel quarrying business. The Company's investment was to provide funding for the construction and equipping of the MRF and working capital during the build-up of the trade. The funding was provided in the form of equity and loan stock and our interests are covered by a first fixed and floating charge over Opes' assets. Following the incident, the Company appointed an administrator over Opes in order to best protect the Company's investment. We are pleased to report that shortly after the year end, the administrator exchanged contracts for the sale of the north Oxfordshire site; the cash consideration is payable in stages over a 12 month period. Moreover, discussions are continuing with Opes' insurers regarding reimbursement of the damage to the plant and the building and of the costs of business interruption. 

The Company's investment of £3.4 million (alongside other Puma VCTs) into Saville Services Limited continues to perform well. Saville Services has been working on a series of projects, including most recently the construction of a 77-bed, purpose-built care home in Chester. We understand that the development is progressing well and the care home is scheduled to open in the first quarter of 2018.

As previously reported, the Company had invested £3.2 million (alongside other Puma VCTs) into Alyth Trading Limited, a nationwide provider of contracting services. During the year, Alyth Trading has been working on two contracts. The first is in connection with the construction of a 112 bed purpose built care home in Hamilton, Scotland. We are pleased to report that the project has recently completed successfully generating attractive returns for Alyth Trading which will benefit the Company when its investment is repaid in due course. The second is a contract in connection with the construction of a 68 bed purpose built care home in Egham, Windsor. We understand that construction is behind schedule due to issues with the main builder but this is being addressed by the team at Alyth Trading. 

Non-Qualifying Investments

In January 2017, a £1 million loan (as part of a total facility of £17.5 million) was advanced (through an affiliate, Latimer Lending Limited) to Cudworth Limited to fund the construction of a mixed residential and commercial development in Bloomsbury, London, close to the British Museum and 600m from King's Cross station. The development includes 8 flats, 2 houses and 11,800 square feet of B1 commercial space. The loan is secured with a first charge over the site.

As noted in the Company's interim report, the £1.41 million loan to Kingsmead Care Home Limited, (made through an affiliate, Latimer Lending Limited), which owns and operates a care and dementia treatment facility in Mytchett, Surrey, was repaid in full during the year giving a good return to the Company.

The Company's loan of £1 million (advanced through affiliate Valencia Lending Limited) to various entities within the Citrus Group continues to perform well. These loans, together with loans from other vehicles managed and advised by the Investment Manager, form part of a series of revolving credit facilities to provide working capital to the Citrus PX business. Citrus PX operates a property part exchange service facilitating the rapid purchase of properties for developers and homeowners. The facility provides a series of loans to Citrus PX, with the benefit of a first charge over a geographically diversified portfolio of residential properties on conservative terms.

In December 2016, loans of £400,000 were advanced (through an affiliate, Latimer Lending Limited) to HPC (Wickford) Limited which, together with loans from other vehicles managed and advised by the Investment Manager totalling £2.85 million, will facilitate the development and initial trading of a purpose-built IVF Fertility Clinic in Wickford, Essex. HPC (Wickford) Limited has entered into a lease with Bourn Hall Limited, one of the UK's largest independent fertility clinic groups. Construction has commenced on site and is progressing well.

As previously reported, Lothian Lending Limited (a lending business in which the Company had previously invested) had extended a £1.3 million loan which, together with another Puma VCT, provided a facility of £2.6 million to RPE FL1 Limited, a member of the Renewable Power Exchange group. The facility provided funding towards the construction of a 1.5MW wind farm in East Lothian, Scotland, with the electricity once generated, used to supply those on low incomes in the local community. The loan is secured on the site in East Lothian and is earning an attractive rate of interest. We are pleased to report that the turbines are operating well, generating electricity and EBITDA is in line with forecasts. In accordance with the planned amortisation schedule, the loan balance now stands at £1.09 million.

To further manage liquidity, the Company had exposure to a £1.02 million bond issued by J Sainsbury plc and earning 6.5%. This was sold during the year.

Investment Strategy

We are pleased now to have invested the Company's funds in both qualifying and non-qualifying secured investments. We remain focused on generating strong returns for the Company in both the qualifying and non-qualifying portfolios whilst balancing these returns with maintaining an appropriate risk exposure and ensuring compliance with the HMRC VCT rules. We are now primarily focusing on the monitoring of our existing investments and preparing the portfolio for realisation in due course.

Puma Investment Management Limited

29 June 2017

Investment Portfolio Summary

As at 28 February 2017

Of the investments held at 28 February 2017, all are incorporated in England and Wales.

Income Statement

For the year ended 28 February 2017

All items in the above statement derive from continuing operations. 

There are no gains or losses other than those disclosed in the Income Statement.

The total column of this statement is the Statement of Total Comprehensive Income of the Company prepared in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. The supplementary revenue and capital columns are prepared in accordance with the Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in November 2014 by the Association of Investment Companies and updated in January 2017.

Balance Sheet

As at 28 February 2017

The financial statements on pages 26 to 41 were approved and authorised for issue by the Board of Directors on 29 June 2017 and were signed on their behalf by:

Egmont Kock

Chairman

29 June 2017

Statement of Cash Flows

For the year ended 28 February 2017

Statement of Changes in Equity

For the year ended 28 February 2017

Distributable reserves comprise: Capital reserve-realised, Capital reserve-unrealised (excluding gains on unquoted investments) and the Revenue reserve. At the year-end distributable revenue reserves were £24,196,000 (2016: £25,511,000).

The Capital reserve-realised includes gains/losses that have been realised in the year due to the sale of investments, net of related costs. The Capital reserve-unrealised represents the investment holding gains/losses and shows the gains/losses on investments still held by the Company not yet realised by an asset sale.

The revenue reserve represents the cumulative revenue earned less cumulative distributions.

1. Accounting Policies

Accounting convention

Puma VCT 9 plc ("the Company") was incorporated, registered and is domiciled in England. The Company's registered number is 08238812. The registered office is Bond Street House, 14 Clifford Street, London W1S 4JU. The Company is a public limited company whose shares are listed on LSE with a premium listing. The company's principal activities and a description of the nature of the Company's operations are disclosed in the Strategic Report.

The financial statements have been prepared under the historical cost convention, modified to include investments at fair value, and in accordance with the requirements of the Companies Act 2006, including the provisions of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' ("FRS 102") and the Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in November 2014 by the Association of Investment Companies and updated in January 2017 ("the SORP").

Monetary amounts in these financial statements are rounded to the nearest whole £1,000, except where otherwise indicated.

Investments

All investments are measured at fair value. They are all held as part of the Company's investment portfolio and are managed in accordance with the investment policy set out on page 13.

Listed investments are stated at bid price at the reporting date.

Unquoted investments are stated at fair value by the Directors with reference to the International Private Equity and Venture Capital Valuation Guidelines ("IPEV") as follows:

· Investments which have been made within the last twelve months or where the investee company is in the early stage of development will usually be valued at the price of recent investment except where the company's performance against plan is significantly different from expectations on which the investment was made in which case a different valuation methodology will be adopted.

· Investments in debt instruments will usually be valued by applying a discounted cash flow methodology based on expected future returns of the investment.

· Alternative methods of valuation such as net asset value may be applied in specific circumstances if considered more appropriate.

Realised surpluses or deficits on the disposal of investments are taken to realised capital reserves, and unrealised surpluses and deficits on the revaluation of investment are taken to unrealised capital reserves.

Income

Dividends receivable on listed equity shares are brought into account on the ex-dividend date. Dividends receivable on unquoted equity shares are brought into account when the Company's right to receive payment is established and there is no reasonable doubt that payment will be received. Interest receivable is recognised wholly as a revenue item on an accruals basis.

1. Accounting Policies (continued)

Performance fees

Upon its inception, the Company agreed performance fees payable to the Investment Manager, Puma Investment Management Limited, and members of the investment management team at 20% of the aggregate excess of the amounts realised over £1 per Ordinary Share returned to Ordinary Shareholders. This incentive will only be exercisable once the holders of Ordinary Shares have received distributions of £1 per share. The performance fee is accounted for as an equity-settled share-based payment.

Section 26 of FRS 102 "Share-Based Payment" requires the recognition of an expense in respect of share-based payments in exchange for goods or services. Entities are required to measure the goods or services received at their fair value, unless that fair value cannot be estimated reliably in which case that fair value should be estimated by reference to the fair value of the equity instruments granted.

At each balance sheet date, the Company estimates that fair value by reference to any excess of the net asset value, adjusted for dividends paid, over £1 per share in issue at the balance sheet date. Any change in fair value is recognised in the Income Statement with a corresponding adjustment to equity.

Expenses

All expenses (inclusive of VAT) are accounted for on an accruals basis. Expenses are charged wholly to revenue, with the exception of:

· expenses incidental to the acquisition or disposal of an investment charged to capital; and

· the investment management fee, 75% of which has been charged to capital to reflect an element which is, in the directors' opinion, attributable to the maintenance or enhancement of the value of the Company's investments in accordance with the Board's expected long-term split of return; and

· the performance fee which is allocated proportionally to revenue and capital based on the respective contributions to the Net Asset Value.

Taxation

Corporation tax is applied to profits chargeable to corporation tax, if any, at the applicable rate for the year. 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.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more, or right to pay less, tax in the future has occurred at the balance sheet date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the financial statements which are capable of reversal in one or more subsequent years. Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

Reserves

Realised losses and gains on investments, transaction costs, the capital element of the investment management fee and taxation are taken through the Income Statement and recognised in the Capital Reserve - Realised on the Balance sheet. Unrealised losses and gains on investments and the capital element of the performance fee are also taken through the Income Statement and are recognised in the Capital Reserve - Unrealised.

Debtors

Debtors include accrued income which is recognised at amortised cost, equivalent to the fair value of the expected balance receivable.

1. Accounting Policies (continued)

Dividends

Final dividends payable are recognised as distributions in the financial statements when the Company's liability to make payment has been established. The liability is established when the dividends proposed by the Board are approved by the Shareholders. Interim dividends are recognised as liabilities from the ex-dividend date.

Key accounting estimates and assumptions

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets within the next financial year relate to the fair value of unquoted investments. Further details of the unquoted investments are disclosed in the Investment Manager's Report on pages 3 to 5 and notes 8 and 14 of the financial statements.

2. Income

3. Investment Management Fees

Puma Investment Management Limited ("Puma Investments") has been appointed as the Investment Manager of the Company for an initial period of five years, which can be terminated by not less than twelve months' notice, given at any time by either party, on or after the fifth anniversary. The Board is satisfied with the performance of the Investment Manager. Under the terms of this agreement Puma Investments will be paid an annual fee of 2% of the Net Asset Value ("NAV") payable quarterly in arrears calculated on the relevant quarter end NAV of the Company. These fees are capped, the Investment Manager having agreed to reduce its fee (if necessary to nothing) to contain total annual costs (excluding performance fee and trail commission) to within 3.5% of funds raised. Total costs this year were 2.8% of the funds raised (for the 14 month period ended 29 February 2016: 2.7%).

4. Other expenses

Shore Capital Fund Administration Services Limited provides administrative services to the Company for an aggregate annual fee of 0.35% of the Net Asset Value of the Fund, payable quarterly in arrears.

Remuneration for each Director for the year is disclosed in the Directors' Remuneration Report on page 18. The Company had no employees (other than Directors) during the year (2016: none). The average number of non-executive Directors during the year was 3 (2016: 3). The non-executive Directors are considered to be the Key Management Personnel of the Company with total remuneration for the year of £63,000 (14 month period ended 29 February 2016: £70,000), including social security costs.

The Auditor's remuneration of £19,500 (2016: £18,750) has been grossed up in the table above to be inclusive of VAT.

5. Taxation

Capital returns are not taxable as the Company is exempt from tax on realised capital gains whilst it continues to comply with the VCT regulations, so no corporation tax is recognised on capital gains or losses. Due to the intention to continue to comply with the VCT regulations, the Company has not provided for deferred tax on any realised or unrealised capital gains and losses.

6. Basic and diluted return/(loss) per Ordinary Share

7. Dividends

No interim dividends were paid in the year (14 month period ended 29 February 2016: two interims dividends of 6p each were paid totalling £3,390,000). The Directors do not propose a final dividend in relation to the year ended 28 February 2017 (2016: £nil). An interim dividend of 6p per ordinary share, with an ex-dividend date of 16 February 2017, was paid on 3 March 2017 totalling £1,695,000.

8. Investments

As previously reported, a major fire occurred in February 2016 at the Materials Recycling Facility ("MRF") operated by Opes Industries Limited ("Opes"), into which the Company has invested a total of £3.6m (as part of an £8.8m investment by Puma entities). As a result of the incident, and as reported in the Company's previous annual report, the board made a provision of £532,000 against the carrying value of the Company's investment in Opes. Opes owned a 73 hectare site in north Oxfordshire with a MRF, including a landfill site for non-hazardous materials and an aggregates/gravel quarrying business. The Company's investment was to provide funding for the construction and equipping of the MRF and working capital during the build-up of the trade. The funding was provided in the form of equity and loan stock and our interests are covered by a first fixed and floating charge over Opes' assets. Following the incident, the Company appointed an administrator over Opes in order to best protect the Company's investment. We are pleased to report that shortly after the year end, the administrator exchanged contracts for the sale of the north Oxfordshire site; the cash consideration is payable in stages over a 12 month period. Moreover, discussions are continuing with Opes' insurers regarding reimbursement of the damage to the plant and the building and of the costs of business interruption. 

During the year, the Company sold its quoted bonds in J Sainsbury plc for £1,102,000, which were originally acquired for £1,048,000. These bonds were stated at £1,023,000 as at 29 February 2016.

(b) Gains and losses on investments

The gains and losses on investments for the year shown in the Income Statement is analysed as follows:

8. Investments (continued)

(c) Quoted and unquoted investments

Further details of these investments are disclosed in the Investment Portfolio Summary on pages 6 to 11 of the Annual Report.

9. Debtors

Other debtors include £1,695,000 (2016: £nil) of monies paid to the registrar to enable the interim dividend to be paid on 3 March 2017 (see note 7).

10. Creditors - amounts falling due within one year

11. Creditors - amounts falling due after more than one year

On 30 October 2012, the Company issued Loan Notes in the amount of £1,000 to a nominee on behalf of the Investment Manager and members of the investment management team. The Loan Notes accrue interest of 5% per annum.

The Loan Notes entitle the Investment Manager and members of the investment management team to receive a performance related incentive of 20% of the aggregate amounts realised by the Company in excess of £1 per Ordinary Share. The Shareholders will be entitled to the balance. This incentive, to be effected through the issue of shares in the Company, will only be exercised once the holders of Ordinary Shares have received dividends of £1 per share (whether capital or income). The performance incentive structure provides a strong incentive for the Investment Manager to ensure that the Company performs well, enabling the Board to approve distributions as high and as soon as possible.

In the event that distributions to the holders of Ordinary Shares totalling £1 per share have been made the Loan Notes will convert into sufficient Ordinary Shares to represent 20% of the enlarged number of Ordinary Shares. The amount of the performance fee will be calculated as 20% of the excess of the net asset value (adjusted for dividends paid) over £1 per issued share.

12. Called Up Share Capital

13. Net Asset Value per Ordinary Share

14. Financial Instruments

The Company's financial instruments comprise its investments, cash balances, debtors and certain creditors. The fair value of all of the Company's financial assets and liabilities is represented by the carrying value in the Balance Sheet. Excluding cash balances, the Company held the following categories of financial instruments at 28 February 2017:

Management of risk

The main risks the Company faces from its financial instruments are market price risk, being the risk that the value of investment holdings will fluctuate as a result of changes in market prices caused by factors other than interest rate or currency movements, liquidity risk, credit risk and interest rate risk. The Board regularly reviews and agrees policies for managing each of these risks. The Board's policies for managing these risks are summarised below and have been applied throughout the year.

Credit risk

Credit risk is the risk that the counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. The Investment Manager monitors counterparty risk on an ongoing basis. The carrying amount of financial assets best represents the maximum credit risk exposure at the balance sheet date. The Company's financial assets and maximum exposure to credit risk is as follows:

The cash held by the Company at the year end is split between two U.K. banks. Bankruptcy or insolvency of either bank may cause the Company's rights with respect to the receipt of cash held to be delayed or limited. The Board monitors the Company's risk by reviewing regularly the financial position of the banks and should it deteriorate significantly the Investment Manager will, on instruction of the Board, move the cash holdings to another bank.

Other debtors includes £1,695,000 of monies advanced to the registrar for payment of the interim dividend on 3 March 2017.

Credit risk associated with accrued interest income and balance of other debtors are predominantly covered by the investment management procedures.

14. Financial Instruments (continued)

Investments in loans, loan notes and bonds comprises a fundamental part of the Company's venture capital investments, therefore credit risk in respect of these assets is managed within the Company's main investment procedures.

Market price risk

Market price risk arises mainly from uncertainty about future prices of financial instruments held by the Company. It represents the potential loss the Company might suffer through holding investments in the face of price movements. The Investment Manager actively monitors market prices and reports to the Board, which meets regularly in order to consider investment strategy.

The Company's strategy on the management of market price risk is driven by the Company's investment policy as outlined in the Strategic Report on page 13. The management of market price risk is part of the investment management process. The portfolio is managed with an awareness of the effects of adverse price movements through detailed and continuing analysis, with an objective of maximising overall returns to shareholders.

Holdings in unquoted investments may pose higher price risk than quoted investments. Some of that risk can be mitigated by close involvement with the management of the investee companies along with review of their trading results.

None (2016: 5%) of the Company's investments are listed on the London Stock Exchange and 100% (2016: 95%) are unquoted investments.

Liquidity risk

Details of the Company's unquoted investments are provided in the Investment Portfolio summary on page 6. By their nature, unquoted investments may not be readily realisable, the Board considers exit strategies for these investments throughout the period for which they are held. As at the year end, the Company had no borrowings, other than loan notes amounting to £1,000 (2016: £1,000) (see note 11).

The Company's liquidity risk associated with investments is managed on an ongoing basis by the Investment Manager in conjunction with the Directors and in accordance with policies and procedures in place as described in the Strategic Report and the Report of the Directors. The Company's overall liquidity risks are monitored on a quarterly basis by the Board. The Company maintains sufficient investments in cash and readily realisable securities to pay accounts payable and accrued expenses.

Fair value interest rate risk

The benchmark that determines the interest paid or received on the current account is the Bank of England base rate, which was 0.25% at 28 February 2017 (2016: 0.5%). All of the loan and loan note investments are unquoted and hence not directly subject to market movements as a result of interest rate movements.

Cash flow interest rate risk

The Company has exposure to interest rate movements primarily through its cash deposits and loan notes which track either the Bank of England base rate or LIBOR.

14. Financial Instruments (continued)

Interest rate risk profile of financial assets

The following analysis sets out the interest rate risk of the Company's financial assets as at 28 February 2017.

The following analysis sets out the interest rate risk of the Company's financial assets as at 29 February 2016.

Foreign currency risk

The reporting currency of the Company is Sterling. The Company has not held any non-Sterling investments during the year.

Fair value hierarchy

Financial assets and liabilities measured at fair value are disclosed using a fair value hierarchy that reflects the significance of the inputs used in making the fair value measurements, as follows:-

· Level 1 - Fair value is measured using the unadjusted quoted price in an active market.

· Level 2 - Fair value is measured using inputs other quoted prices that are observable using market data.

· Level 3 - Fair value is measured using unobservable inputs.

The Company has early adopted the changes to FRS 102 published by the FRC in March 2016 in relation to these disclosures.

14. Financial Instruments (continued)

Fair values have been measured at the end of the reporting year as follows:-

The Level 3 investments have been valued in line with the Company's accounting policies and IPEV guidelines. Further details of these investments are provided in the Significant Investments section of the Annual Report.

15. Capital management

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern, so that it can provide an adequate return to shareholders by allocating its capital to assets commensurate with the level of risk.

By its nature, the Company has an amount of capital, at least 70% (as measured under the tax legislation) of which must be, and remain, invested in the relatively high risk asset class of small UK companies within three years of that capital being subscribed.

The Company accordingly has limited scope to manage its capital structure in the light of changes in economic conditions and the risk characteristics of the underlying assets. Subject to this overall constraint upon changing the capital structure, the Company may adjust the amount of dividends paid to shareholders, issue new shares, or sell assets to maintain a level of liquidity to remain a going concern.

The Board has the opportunity to consider levels of gearing, however there are no current plans to do so. It regards the net assets of the Company as the Company's capital, as the level of liabilities is small and the management of those liabilities is not directly related to managing the return to shareholders.

16. Contingencies, Guarantees and Financial Commitments

There were no commitments, contingencies or guarantees of the Company at the year-end (2016: none).

17. Controlling Party

In the opinion of the Directors there is no immediate or ultimate controlling party.

The financial information set out in this announcement does not constitute the Company's statutory financial statements in accordance with section 434 Companies Act 2006 for the year ended 28 February 2017, but has been extracted from the statutory financial statements for the year ended 28 February 2017 which were approved by the Board of Directors on 29 June 2017 and will be delivered to the Registrar of Companies. The Independent Auditor's Report on those financial statements was unqualified and did not contain any statements under s 498(2) and (3) of the Companies Act 2006. The Independent Auditor's Report included an emphasis of matter paragraph highlighting the uncertainties associated with the fair value of investment in Opes Industries Limited.

The statutory accounts for the period ended 29 February 2016 have been delivered to the Registrar of Companies and received an Independent Auditors report which was unqualified and did not contain any emphasis of matter nor statements under s 498(2) and (3) of the Companies Act 2006.

Copies of the full annual report and financial statements for the year ended 28 February 2017 will be available to the public at the registered office of the Company at Bond Street House, 14 Clifford Street, London, W1S 4JU and will be available for download from www.pumainvestments.co.uk.