14th Dec 2007 17:19
TP70 VCT Plc14 December 2007 FOR IMMEDIATE RELEASE 14 December 2007 TP70 VCT plc Condensed Consolidated Interim Financial Statements for the period from 27 November 2006 to 30 September 2007 The directors of TP70 VCT plc today announce their interim results for theperiod ended 30 September 2007. For further information, please contact : Peter Hargreaves, Company Secretary 01534 814806 TP70 VCT plcGeneral Information DirectorsMichael Gabriel SherryJames Chadwick MurrinIan David Parsons Secretary and Registered OfficePeter William Hargreaves10-11 Gray's Inn Square,London, WC1R 5JD Company Registered Number6010401 SolicitorsHoward Kennedy19 Cavendish SquareLondon, W1A 2AW BankersHSBC Bank plcPO Box 64827-32 PoultryLondon, EC2P 2BX Investment Manager and AdministratorTriple Point Investment Management LLP10-11 Grays Inn Square,London, WC1R 5JD VCT Tax AdvisorPricewaterhouseCoopers1 Embankment PlaceLondon, WC2N 6RH Independent AuditorGrant Thornton UK LLP1 Westminster WayOxford, OX2 0PZ RegistrarsNeville Registrars LimitedNeville House18 Laurel LaneHalesowenWest Midlands, B63 3DA TP70 VCT plc Condensed consolidated interim financial statementsfor the period from 27 November 2006 to 30 September 2007 Index Page Financial summary 1 Chairman's statement 1 Investment managers' report 2 Investment portfolio review 3 Independent review report 4 Condensed consolidated interim income statement 5 Condensed consolidated interim statement of changes in equity 5 Condensed consolidated interim balance sheet 6 Condensed consolidated interim cash flow statement 7 Notes to the condensed consolidated interim financial statements 8-13 TP70 VCT plc Condensed consolidated interim financial statementsfor the period from 27 November 2006 to 30 September 2007 Financial summary £'000Net assets 30,706Net loss before tax (210)Loss per share (0.71p)Net asset value per share 95.84p Chairman's statement I am pleased to be writing to you to present the unaudited interim results forTP70 VCT plc ("the Company") for the period from incorporation on 27 November2006 to 30 September 2007. The Company was admitted to the London StockExchange on 21 March 2007 and will draw up its first accounts to 31 March 2008,so whilst these interim accounts are for a period of 10 months, they representthe first 6 months of trading. The Company's investment strategy is to offer combined exposure to GAM's fund ofhedge funds, GAM Diversity Inc and venture capital investments focused oncompanies with contractual revenues from financially secure counterparties.Investment exposure in the first two years is intended to be predominantly toGAM Diversity Inc. By the end of this third year the Company's intention isthat at least 70% of the fund will be committed to VCT qualifying holdings withup to 30% remaining exposed to GAM Diversity Inc. Results The Company recorded a loss of £210,641 for the period made up of a revenue lossof £9,944 and a capital loss of £200,697. The investment manager's report explains the results to date from implementationof the strategy for non VCT qualifying holdings. As to the 70% plus to becommitted to qualifying holdings, the investment manager presently has apipeline of potential investments totalling some £65 million so the Company isrealistically optimistic of achieving its target of being 70% invested beforethe end date by which this should be achieved to ensure that the Company'sprovisional VCT status is confirmed. If you have any queries or comments, please do not hesitate to telephone TriplePoint Investment Management LLP on 020 7404 7403 or email me [email protected]. Michael SherryChairman6 December 2007 TP70 VCT plc Condensed consolidated interim financial statementsfor the period from 27 November 2006 to 30 September 2007 Investment manager's report The Company has done exactly what was contemplated in the prospectus. Asdetailed in the schedule appearing overleaf 98.7% of the company's investmentportfolio consists of non VCT qualifying holdings with the remainder being cash. £4.4 million, equivalent to 14.8% of holdings represents the subsidiary'sholding of GAM Diversity Inc, capped at this figure as VCT rules do not permitan investment in a single security of more than 15% of a VCT's funds. Over theperiod the value of the direct investment remained essentially unchanged. Thebalance of £25.7 million of non qualifying holdings represents a portfolio ofcorporate and supranational bonds managed by Barclays Capital, the return onwhich has been swapped under the derivative transaction with an indexreplicating the performance of GAM Diversity Inc. Thus the whole of the bondportfolio is indirectly also committed to Diversity's performance. Thederivative transaction is reflected in the accounts as follows:- Revenue £'000Bond income 550Payable to Barclays under the derivative transaction (553)Overall loss (3) Capital £'000Capital loss on bonds 65Return on GAM Diversity sterling index 13Unrealised gain on derivative transaction 78 As with the subsidiary's investment in GAM Diversity, this means that the valueof the company's indirect exposure to Diversity via the derivative transactionhas remained essentially unchanged over the period since the bond portfolio andderivative transaction were put in place. This compares to movements in thefollowing indices: %FTSE All Share -2.10MSCI World +0.70HFRI/HFRX Global Hedge Fund -2.65 In what has been a turbulent period the company's strategy thus appears at leastso far to have been justified. David DickforTriple Point Investment Management LLP6 December 2007 TP70 VCT plcCondensed consolidated interim financial statementsfor the period from 27 November 2006 to 30 September 2007 Investment portfolio review Security Cost Valuation £'000 % £'000 % Qualifying holdings - - - -Non-qualifying holdings 30,058 98.75 29,997 98.74Uninvested funds 382 1.25 382 1.26 30,440 100.00 30,379 100.00 Non Qualifying Holdings QuotedGAM Diversity Hedge Fund 4,465 14.85 4,469 14.90Barclays Bond PortfolioWalmart 4.75 29 Jan 2013 1,552 5.16 1,544 5.15NY Life Global Fdg 4.5 17 Jan 2013 MTN Rg 1,522 5.06 1,510 5.03MG Fund 4.625 18 Jan 2013 MTN 1,530 5.09 1,518 5.06Rabobk 4.625 31 May 2012 1,550 5.16 1,561 5.20AIG Sun 5.125 28 Jan 2013 MTN 1,569 5.22 1,545 5.15Nedgem 4.375 14 Dec 2012 MTN 1,529 5.09 1,544 5.15Eib 4.5 14 Jan 2013 1,538 5.12 1,553 5.18Eib 4.75 06 Jun 2012 1,563 5.20 1,581 5.27Kfw 4.875 15 Jan 2013 MTN 1,567 5.21 1,579 5.26Kfw Int Fin 4.75 07 Dec 2012 MTN 1,559 5.19 1,575 5.25Kommbk 4.875 10 Dec 2012 MTN 1,568 5.22 1,579 5.26Massmutual G 6.125 14 May 2013 MTN 1,652 5.50 1,627 5.42Total 5.5 29 Jan 2013 1,608 5.35 1,608 5.36GE 6.125 17 May 2012 MTN 1,645 5.47 1,635 5.45E.ON 6.375 29 May 2012 1,654 5.50 1,639 5.47RBOS 10.5 01 Mar 2013 1,987 6.61 1,930 6.44 30,058 100.00 29,997 100.00 TP70 VCT plcIndependent review report to TP70 VCT plc Introduction We have been engaged by the company to review the condensed set of financialstatements in the interim financial report for the ten months ended 30 September2007 which comprises the condensed consolidated interim income statement, thecondensed consolidated interim statement of changes in equity, the condensedconsolidated interim balance sheet, the condensed consolidated interim cash flowstatement and related notes 1 to 17. We have read the other informationcontained in the interim financial report which comprises the financial summary,the Chairman's statement and Investment Manager's report and considered whetherit contains any apparent misstatements or material inconsistencies with theinformation in the condensed set of financial statements. This report is made solely to the Company in accordance with guidance containedin ISRE (UK and Ireland) 2410, "Review of Interim Financial Informationperformed by the Independent Auditor of the Entity". Our review work has beenundertaken so that we might state to the company those matters we are requiredto state to them in a review report and for no other purpose. To the fullestextent permitted by law, we do not accept or assume responsibility to anyoneother than the company, for our review work, for this report, or for theconclusion we have formed. Directors' Responsibilities The interim financial report is the responsibility of, and has been approved by,the directors. They are responsible for preparing the interim financial reportin accordance with the Listing Rules of the United Kingdom's Financial ServicesAuthority. As disclosed in Note 2, the annual financial statements of the group are to beprepared in accordance with IFRSs as adopted by the European Union. Thecondensed set of financial statements included in this interim financial reporthas been prepared in accordance with International Accounting Standard 34,"Interim Financial Reporting," as adopted by the European Union. Our Responsibility Our responsibility is to express to the Company a conclusion on the condensedset of financial statements in the interim financial report based on our review. Scope of Review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly,we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the interim financial reportfor the ten months ended 30 September 2007 is not prepared, in all materialrespects, in accordance with International Accounting Standard 34 as adopted bythe European Union. GRANT THORNTON UK LLPAUDITOROXFORD6 December 2007 TP70 VCT plcCondensed consolidated interim income statementfor the period from 27 November 2006 to 30 September 2007 Period Ended Note 30 September 2007 Revenue Capital Total £'000 £'000 £'000 Investment income 676 - 676Unrealised loss on investments 9 - (61) (61)Derivative transaction 14 (553) 78 (475) Investment return 123 17 140 Investment management fees 5 72 217 289Financial and regulatory costs 7 - 7General administration 15 - 15Legal and professional fees 11 - 11Directors' remuneration 6 28 - 28 Operating expenses 133 217 350 Loss on ordinary activities before taxation (10) (200) (210)Taxation on ordinary activities 7 - - - Loss on ordinary activities after taxation (10) (200) (210) Loss per share 8 (0.03p) (0.68p) (0.71p) The loss per share shown above is both basic and diluted as there are nopotentially dilutive financial instruments in issue. Condensed consolidated interim statement of changes in equityfor the period from 27 November 2006 to 30 September 2007 Issued Share Capital Revenue Total Capital Premium Reserve Reserve £'000 £'000 £'000 £'000 £'000 Changes in equity in the periodLoss for the period - - (200) (10) (210)Issue of share capital 320 31,717 - - 32,037Share issue costs - (1,121) - - (1,121) Balance at 30 September 2007 320 30,596 (200) (10) 30,706 The accompanying notes on pages 8 to 13 form an integral part of these financialstatements. TP70 VCT plc Condensed consolidated interim balance sheetas at 30 September 2007 Note £'000Non Current AssetsFinancial assets at fair value through profit and loss 9 29,997 Current assets:Other receivables 787Cash and cash equivalents 10 382 1,169 TOTAL ASSETS 31,166 Current LiabilitiesOther payables 456Current taxation payable 7 -Short term provisions 4 460 NET ASSETS 30,706 EQUITYEquity attributable to equity holders of the parentShare capital 11 320Share premium 30,596Capital reserve (200)Revenue reserve (10) Total equity 30,706 Net asset value per share (pence) 13 95.84p The accompanying notes on pages 8 to 13 form an integral part of these financialstatements. TP70 VCT plc Condensed consolidated interim cash flow statementfor the period from 27 November 2006 to 30 September 2007 £'000Cash flows from operating activitiesLoss before taxation (210) Unrealised depreciation in investment 61values Cash generated from operations (149) Increase in other receivables (787) Increase in current liabilities 460 Net cash outflow from operating activities (476) Cash flow from investing activitiesPurchase of financial assets at fair value through profit and loss account (30,058) Net cash (30,058)flows from investing activities Cash flows from financing activitiesProceeds 32,037from issue of share capitalShare issue (1,121)expenses Net cash 30,916flows from financing activities Net increase 382in cash and cash equivalents Reconciliation of net cash flow to movements in cash and cash equivalentsCash and cash 382equivalents at 30 September 2007 The accompanying notes on pages 8 to 13 form an integral part of these financialstatements. TP70 VCT plc Notes to the condensed consolidated interim financial statements for the period from 27 November 2006 to 30 September 2007 1. Corporate Information The interim condensed financial statements of the company for the period fromincorporation on 27 November 2006 to 30 September 2007 were authorised for issuein accordance with a resolution of the directors on 6 December 2007. The company was admitted for listing on the London Stock Exchange on 21 March2007. TP70 VCT Plc is the Group's ultimate parent company. It is incorporated anddomiciled in Great Britain. The address of TP70 VCT plc's registered office,which is also it's principal place of business, is 10-11 Gray's Inn Square,London, WC1R 5JD. TP70 VCT plc's consolidated interim financial statements are presented in PoundsSterling (£) which is also the functional currency of the parent company. The financial information set out in this interim report does not constitutestatutory accounts as defined in Section 240 of the Companies Act 1985. The principal activity of the company is investment. The company's investmentstrategy is to offer combined exposure to GAM Diversity Inc (GAM's fund of hedgefunds) and venture capital investments focused on companies with contractualrevenues from financially secure counterparties. 2. Basis of preparation and accounting policies Basis of preparation The interim condensed financial statements of the Company for the period to 30September 2007 have been prepared in accordance with IAS 34: Interim FinancialReporting. The interim condensed financial statements do not include all the informationand disclosures required for annual financial statements. The accounting policies used for the preparation of the interim condensedfinancial statements of the Company for the period ended 30 September 2007 willbe applied for the annual financial statements. The interim condensed financial statements have been prepared on a historicalcost basis except that investments are shown at fair value through profit andloss. These condensed consolidated interim financial statements (the interim financialstatements) have been prepared in accordance with the accounting policies setout below which are based on the recognition and measurement principles of IFRSin issue as adopted by the European Union (EU) and are effective at 31 March2008 or are expected to be adopted and effective at 31 March 2008, our firstannual reporting date at which we are required to use IFRS accounting standardsadopted by the EU. These accounting policies have been applied consistently throughout the Groupfor the purposes of preparation of these condensed consolidated interimfinancial statements. Basis of consolidation The interim condensed consolidated financial statements comprise the financialstatements of The Group at 30 September each year. The financial statements ofthe subsidiaries are prepared for the same reporting year as the parent company,using consistent accounting policies. TP70 VCT plc Notes to the condensed consolidated interim financial statements for the period from 27 November 2006 to 30 September 2007 2. Basis of preparation and accounting policies (continued) Basis of preparation (continued) All intra-group balances, transactions, income and expenses and profits andlosses resulting from intra-group transactions that are recognised in assets,are eliminated in full. Subsidiaries are fully controlled from the date of acquisition, being the dateon which the Group obtains control, and continue to be consolidated until thedate that such control ceases. There are no minority interests. Presentation of income statement In order to better reflect the activities of an investment trust company, and inaccordance with the guidance issued by the AIC, supplementary information whichanalyses the Income Statement between items of a revenue and capital nature hasbeen presented alongside the Income Statement. In accordance with the Company'sstatus as a UK investment company under section 266 of the companies Act 1985,net capital returns may not be distributed by way of dividend. Statement of compliance The interim condensed financial statements of the Company have been prepared inaccordance with IAS 34: Interim Financial Reporting. Fixed Asset Investments The Company invests in financial assets with a view to profiting from theirtotal return through income and capital growth. These investments are managedand their performance is evaluated on a fair value basis in accordance with adocumented investment strategy. Accordingly as permitted by IAS 39, theinvestments and loan notes are designated as fair value through the profit andloss ("FVTPL"). Unlisted investments are fair valued by the Directors in accordance with theInternational Private Equity and Venture Capital Valuation Guidelines. Listed investments are fair valued at bid price. Where securities are designated upon initial recognition as at fair valuethrough the profit and loss account, gains and losses arising from changes infair value are included in net profit or loss for the period as a capital item.The profit or loss on disposal is calculated net of transaction costs ofdisposal. Income Investment income includes interest earned on bank balances and money marketsecurities and includes income tax withheld at source. Dividend income is shownnet of any related tax credit. Dividends receivable are brought into account on the ex-dividend date. Fixedreturns on debt and money market securities are recognised on a timeapportionment basis so as to reflect the effective yield, provided there is noreasonable doubt that payment will be received in due course. Expenses All expenses are accounted for on the accruals basis. Expenses are charged torevenue with the exception of the investment management fee, which has beencharged 25% to the revenue account TP70 VCT plc Notes to the condensed consolidated interim financial statements for the period from 27 November 2006 to 30 September 2007 2. Basis of preparation and accounting policies (continued) Expenses (continued) and 75% to the capital account to reflect, in the Directors' opinion, theexpected long term split of returns in the form of income and capital gainsrespectively from the investment portfolio. Taxation Corporation tax payable is applied to profits chargeable to corporation tax, ifany, at the current rate. The tax effect of different items of income/gain andexpenditure/loss is allocated between capital and revenue on the same basis asthe particular item to which it relates, using the Company's effective rate oftax for the accounting period. Deferred tax is recognised in respect of all timing differences that haveoriginated but not reversed at the balance sheet date where transactions orevents have occurred at that date that will result in an obligation to pay more,or a right to pay less tax, with the exception that deferred tax assets arerecognised only to the extent that the Directors consider that it is more likelythan not that there will be suitable taxable profits from which the futurereversal of the underlying timing can be deducted. Financial instruments The Company's principal financial assets are its investments and the policies inrelation to those assets are set out above. Financial liabilities and equityinstruments are classified according to the substance of the contractualarrangements entered into. An equity instrument is any contract that evidences aresidual interest in the assets of the entity after deducting all of itsfinancial liabilities. Where the contractual terms of share capital do not haveany terms meeting the definition of a financial liability then this is classedas an equity instrument. Dividends and distributions relating to equityinstruments are debited direct to equity. Derivatives, comprising income swaps, are classified at fair value throughprofit and loss. Provisions A provision is recognised when the Company has a legal or constructiveobligation as a result of a past event and it is probable that an outflow ofeconomic benefits will be required to settle the obligation. If the effect ismaterial, expected future cash flows are discounted using a current pre-tax ratethat reflects, where appropriate, the risks specific to the liability. Where the Company expects some or all of a provision to be reimbursed, forexample under an insurance policy, the reimbursement is recognised as a separateasset but only when recovery is virtually certain. The expense relating to anyprovision is presented in the income statement net of any reimbursement. Wherediscounting is used, the increase in the provision due to unwinding the discountis recognised as a finance cost. Issued share capital Ordinary shares are classified as equity because they do not contain anobligation to transfer cash or another financial asset. Segment reporting A segment is a distinguishable component of the group that is engaged ingenerating income and expenses (business segment) which is subject to risks andrewards that are different from those of other segments. TP70 VCT plc Notes to the condensed consolidated interim financial statements for the period from 27 November 2006 to 30 September 2007 3 Seasonality of operations The companies operations are not seasonal. 4 Segmental reporting The Company currently has only one class of business, investment activity, andits only geographical segment is Europe. 5 Investment management fees Triple Point Investment Management LLP provides investment management andadministration services to the Company under an Investment Management Agreementeffective 5 April 2007 which runs for a period of 5 years and may be terminatedat any time thereafter by not less than twelve months' notice given by eitherparty and which provides for an administration and investment management fee of1.75% per annum of net assets calculated and payable quarterly in arrears. 6 Directors' remuneration £'000 M G Sherry (Chairman) 9J C Murrin 10I D Parsons 9 Total 28 7 Taxation on ordinary activities £'000 Loss on ordinary activities before tax (10)UK corporation tax at 0% - Capital gains and losses are exempt from corporation tax due to the company'sstatus as a Venture Capital Trust. 8 Loss per share The loss per share is based on a loss from ordinary activities after tax of£210,641, and on the weighted average number of shares in issue during the yearof 29,658,826. TP70 VCT plc Notes to the condensed consolidated interim financial statements for the period from 27 November 2006 to 30 September 2007 9 Financial assets at fair value through profit and loss account Quoted Investments £'000Purchases at cost 30,058Unrealised loss on revaluation (61) Valuation as at 30 September 2007 29,997Cost as at 30 September 2007 30,058Unrealised loss at 30 September 2007 (61) Further details of these investments are provided in the Investment portfolioreview. 10 Cash and cash equivalents Cash and cash equivalents comprise deposits with HSBC Bank plc. 11 Share Capital Authorised Issued & Fully PaidOrdinary Shares of 1pNumber of shares 50,000,000 32,037,546 Par Value £'000 500 320 During the period the Company issued 32,037,544 ordinary shares of 1p each at aprice of £1 each and 2 ordinary shares at par. 12 Subsidiary At 30 September 2007 the Company had the following subsidiary company: Class of share Country of Cost of Proportion of capital Incorporation Investment shares held by the parent company £ %Starshell Limited Ordinary Cyprus 4,481,357 100 13 Net asset value per share The calculation of net asset value per share is based on net assets of£30,705,588 divided by the 32,037,546 shares in issue. TP70 VCT plc Notes to the condensed consolidated interim financial statements for the period from 27 November 2006 to 30 September 2007 14 Derivative transaction Under the terms of the derivative transaction, the return on the company'sportfolio of bonds, managed by Barclays Capital, has been swapped for that on anequivalent investment in GAM Diversity Inc. The element of the swap thatrelates to revenue is included in the revenue column of the income statement andthe element that relates to capital is included in the capital column. Theliability under the derivative transaction, net of interest received on the bondportfolio and paid over to Barclays Capital, is included in current liabilities. 15 Commitments and contingencies The company has no outstanding commitments or contingent liabilities. 16 Related party transactions Michael Sherry, Chairman of the Company, is an equity Member of Triple Point LLP(TPLLP). TPLLP in turn has a controlling interest in Triple Point InvestmentManagement LLP (TPIMLLP). During the period, TPIMLLP received £289,456 forproviding management and administrative services to the Company. 17 Post balance sheet events There have been no significant post balance sheet events. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Triple Point Ve