Annual Financial Statement and Notice of AGM

RNS Number : 5319C

Triple Point Inc VCT - TPVE

17 June 2019

 

Triple Point Income VCT plc

LEI: 213800IXD8S5WY88L245

The financial information set out in these statements does not constitute the Company's statutory accounts for the year ended 31 March 2019, prepared in accordance with section 435 of the Companies Act 2006, but is derived from those accounts.  Statutory accounts will be delivered to the Registrar of Companies in due course. The auditors have reported on these accounts and their report was unqualified and did not contain a statement under section 498(2) of the Companies Act 2006.

Final Results

Triple Point Income VCT plc managed by Triple Point Investment Management LLP today announces the final results for the year ended 31 March 2019.

These results were approved by the Board of Directors on 17 June 2019.

You may view the Annual Report in due course on the Triple Point website www.triplepoint.co.uk

Financial Summary

Year ended 31 March 2019
		Ord Shares	A Shares	C Shares	D Shares	E Shares		Total
Net assets	£'000	-	-	18,088	16,077	29,691		63,856
Net asset value per share	Pence	-	-	134.58p	117.34p	102.56p		n/a
Net profit before tax	£'000	35	-	3,652	2,083	1,263		7,033
Earnings per share	Pence	0.07p	-	26.74p	14.36p	4.24p		n/a
Cumulative return to shareholders (p)
Net asset value per share		-	-	134.58	117.34	102.56
Dividends paid		97.87	99.99	15.00	10.00	-
Net asset value plus dividends paid		97.87	99.99	149.58	127.34	102.56

Year ended 31 March 2018
		Ord Shares	A Shares	C Shares	D Shares	E Shares		Total
Net assets	£'000	12,795	-	15,166	14,794	28,463		71,218
Net asset value per share	Pence	65.74p	-	112.84p	107.98p	98.32p		n/a
Net profit/(loss) before tax	£'000	675	69	1,598	1,176	(575)		2,943
Earnings/(loss) per share	Pence	3.50p	1.51p	11.34p	7.79p	(1.70p)		n/a
Cumulative return to shareholders (p)
Net asset value per share		65.74	-	112.84	107.98	98.32
Dividends paid		33.06	99.99	10.00	5.00	-
Net asset value plus dividends paid		98.80	99.99	122.84	112.98	98.32

Triple Point Income VCT plc ("the Company") is a Venture Capital Trust ("VCT"). The Investment Manager is Triple Point Investment Management LLP ("TPIM"). The Company was incorporated in November 2007.

·    C Ordinary Shares: these are the shares issued in the Offer that closed on 27 May 2014. A total of £14.0 million was raised and 13,441,438 C Shares were issued.

·    D Ordinary Shares: these are the shares issued in the Offer that closed on 30 April 2015. A total of £14.3 million was raised and 13,701,636 D Shares were issued.

·    E Ordinary Shares: these are the shares issued in the Offer that closed on 15 May 2017. Just under £30 million was raised and 28,949,575 E Shares were issued.

The Strategic Report on pages 3 to 28, the Directors' Report on pages 29 to 32, the Corporate Governance report on pages 34 to 36 and the Directors' Remuneration Report on pages 39 to 43 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 Triple Point Income VCT plc.

Strategic Report

The Directors submit to the members their Annual Report and Financial Statements for the Company for the year ended 31 March 2019.

The Strategic Report, on pages 3 to 28, has been prepared in accordance with the requirements of section 414c of the Companies Act 2006. Its purpose is to inform the members of the Company and help them to assess how the Directors have performed their duty to promote the success of the Company, in accordance with section 172 of the Companies Act 2006.

Chairman's Statement

I am writing to present the Financial Statements for Triple Point Income VCT plc ("the Company") for the year ended 31 March 2019.

I am delighted to report that during the year the Company successfully completed the realisation of the Ordinary Share Class portfolio. The final 1.00p of share capital was distributed to the Ordinary Shareholders on 22 March 2019. Taken together with the cumulative dividends of 97.87p, the total returned was 98.87p per share. This result exceeds the original minimum target return of 90.40p at launch by 8.47p per share excluding any income tax relief.

Investment Portfolio

The Company's funds at 31 March 2019 are 92% invested in a portfolio of VCT qualifying and non-qualifying quoted and unquoted investments. At 31 March 2019 the Company continues to meet the condition that at least 70% of the relevant funds must be invested in VCT qualifying investments within three years. This minimum threshold will increase to 80% for the Company from 1 April 2020.

The Investment Manager's review on pages 16 to 20 gives an update on the portfolio of investments in 18 small unquoted businesses and one quoted Real Estate Investment Trust.

C Share Class

The C Share Class has investments in three companies in the Hydroelectric Power sector which between them own six hydroelectric schemes in the Scottish Highlands. The C Share Class has also invested in companies which provide SME funding to the Hydroelectric Power sector.

The C Share Class has recorded a profit over the period of 26.74p per share. This arises from an uplift in the valuations of the hydroelectric sector investments which reflects higher prices and valuations in this sector.

The Company paid a third dividend to C Class Shareholders of £672,072, equal to 5.00p per share, on 26 July 2018, bringing total dividends paid to 15.00p.

At 31 March 2019 the net asset value stood at 134.58p per share. Adding back the total dividends paid to date takes the total return to 149.58p per share.

The Board has resolved to pay a further dividend of £672,072 equal to 5.00p per share on 25 July 2019 to shareholders on the register on 12 July 2019 in line with the Company's target for this Share Class.

D Share Class

The D Share Class has investments in six companies in the Hydroelectric Power sector which between them own seven hydroelectric schemes in the Scottish Highlands. The D Share Class has also invested in two companies providing funding to SMEs, one of which focuses on the Hydroelectric Power sector.

The D Share Class has recorded a profit over the period of 14.36p per share. This arises from an uplift in the valuations of the hydroelectric sector investments which reflects higher prices and valuations in this sector.

The Company paid its second dividend to D Class Shareholders of £685,082, equal to 5.00p per share, on 26 July 2018.

At 31 March 2019 the net asset value stood at 117.34p per share. Adding back the total dividends paid to date of 10.00p, takes the total return to 127.34p per share. 

The Board has resolved to pay a further dividend of £685,082 equal to 5.00p per share on 25 July 2019 to shareholders on the register on 12 July 2019 in line with the Company's target for this Share Class.

E Share Class

At the beginning of the year the E Share Class was the recipient of a transfer of a diverse portfolio of investments previously held by the Ordinary Share Class. This established, for the E Share Class, an income-producing portfolio of investments spanning Hydroelectric Power, Crematorium Management, Gas fired energy centres, Solar PV, Vertical Growing and SME Lending.

The construction of a pioneering Vertical Growing facility is now complete. Following delays during the construction process, the first crop is expected to be delivered during the third quarter of 2019.

The E Share Class also has a non-qualifying investment of £5.9m in Triple Point Social Housing REIT plc ("REIT"). This investment generates income from a widespread portfolio of long term, inflation linked, specialised supported housing property leases and is targeting a regular dividend to investors of 5.00p per share per annum rising in line with inflation. Further information on this investment is included in the Investment Manager's Review on page 19.

The E Share Class recorded a profit over the period of 4.24p per share. At 31 March 2019 the net asset value stood at 102.56p per share. The E Share Class is now 83% invested in a portfolio of unquoted and quoted investments.

Specific Risks

The principal risks which the Board feel the Company is facing are discussed in further detail on pages 13 and 14.

In particular the Board consider specific risks to be;

·      Compliance risk of failure to maintain approval as a qualifying VCT;

·      Investment risk associated with the VCTs portfolio of unquoted investments, including the inability to invest funds raised and the inability to realise funds to facilitate return to investors;

·      Financial risk of investing on a medium to long-term basis;

·      Risk of failure of internal controls.

The Board believes these risks are manageable and, with the Investment Manager, continues to work to minimise either the likelihood or potential impact of these risks within the scope of the Company's established investment strategy.

Outlook

The Board are pleased with the progress achieved in all share classes and the prompt exit facilitated for the Ordinary Class Shareholders following the end of their five-year holding period.

The Board and the Investment Manager are currently working on a substantial capital realisation next year for both the C and D Share Classes in line with their investment strategies.

The C Share Class and D Share Class have successfully generated above target returns to date, and the focus will be to continue enhancing the operational performance of the sites.

The E Share Class has deployed 83% of its funds and is expected to pay its first dividend to Shareholders in the final quarter of the current financial year in line with target.  

The Company's focus for the E Share Class continues to be to invest its remaining funds into suitable unquoted investments as soon as possible and continue to monitor the operation of its investments and focus on enhancing the operation of the assets held.

In the Financial Accounts for the year ended 31 March 2018 we highlighted changes to the VCT landscape with the government, through its 'Financing Growth in Innovative Firms' consultation ("the Patient Capital Review") emphasising the importance of VCTs in helping to provide investments into SMEs. Several changes were introduced, including increasing a VCTs minimum qualifying percentage threshold from 70% to 80% which will come into effect for the Company from 1 April 2020.

The Company, along with the Investment Manager, has identified and is currently in the process of introducing new procedures to ensure the transition required will be successful. The Board are pleased to report good progress has been made and the Company is on track to implement the required changes.

The Company and the Investment Manager will endeavour to ensure that the Company is compliant with the new rules as they come into force.

If you have any questions or comments, please do not hesitate to contact Triple Point on 020 7201 8989.

David Frank

Chairman

17 June 2019

Strategic Report - Company Strategy and Business Model

The Directors assess the Company's success in meeting its objectives in relation to returns, stability, VCT qualification and, ultimately, exit.

Performance Update

At launch the Ordinary Shares targeted a return of 8% to 10% pa including the benefit of tax relief. At a weighted average share price at acquisition or conversion of 83.60p and an 8% return this is broadly equivalent to a total target return to investors in 2019 of 90.40p. This compares to the actual return to Shareholders of 98.87p, meaning the Ordinary Share Class exceeded its minimum targeted return by 8.47p.

The C Share Class targets a return of 100.00p per share by the end of year six. It is intended that this will comprise the income tax rebate, tax-free dividends in years two, three, four and five of an average 5.00p per share, followed by a substantial capital realisation in year six. It is anticipated that from year six investors will then receive, on average, an annual tax-free dividend of around 3.50p per share in each of the next nine years, and a final tax-free payment of approximately 50.00p per share in 2029, following the sale of the VCT's hydro projects.

The net asset value per share for the C Share Class at 31 March 2019 stood at 134.58p. Adding back the dividends paid to C Class Shareholders of 15.00p per share takes the total return including net asset value to 149.58p per share. The Company is currently exceeding its objectives for the C Share Class.

The target for the D Share Class is to pay shareholders a return of 100.00p per share by the end of the sixth year. It is intended that this will comprise the income tax rebate, tax-free dividends in years two, three, four and five of an average 5.00p per share, followed by a substantial capital realisation in year six. It is anticipated that from year six investors will then receive, on average, an annual tax-free dividend of around 3.50p per share in each of the next nine years, and a final tax-free payment of approximately 50.00p per share in 2030, following the sale of the VCT's hydro projects.

The net asset value per share for the D Share Class at 31 March 2019 stood at 117.34p. The Company is currently exceeding its objectives for the D Share Class and during the year declared its second dividend of 5p per share, which was paid on 26 July 2018.

In respect of the E Share Class, the Company aims to distribute from income generated by its investments an average of 5.00p per E Share for the financial year ending 31 March 2020 followed by a regular dividend of up to 5.00p per E Share per annum for the remaining life of the E Share Class. It is expected that the Share Class will continue for a total of 10 to 12 years.

The net asset value per share for the E Share Class at 31 March 2019 stood at 102.56p. 

The Board and the Investment Manager are both committed to ensuring that returns on the investment portfolio are optimised and that the VCT remains fully invested and continues to be managed in line with the Company's investment strategy and risk profile.

The Board expects the Investment Manager to deliver a performance which meets the objective of achieving long-term investment returns, including tax-free dividends. A review of the performance of the Company's investments during the financial year, the position of the Company at the year end and the outlook for the coming year is contained within the Chairman's statement on pages 3 to 5 and the Investment Manager's Review on pages 16 to 20.

Dividend Policy

The Company will distribute, by way of dividend, such amount as ensures that it retains not more than 15% of its income from shares and securities. The Directors aim to maximise tax-free distributions of income and/or realised gains to Shareholders. It is envisaged that the Company will distribute most of its net income each year by way of dividend, subject to liquidity.

Investment Policy

The Company's main focus is to generate returns from a portfolio of investments in companies based in the UK in order to make regular tax-free dividends.

The Company's Investment Policy was adopted and approved by shareholders before recent changes to the rules for VCT-qualifying investments and applies to the existing investment portfolio.  The Company recognises that it is likely that any new Qualifying Investments would require amendment to the Investment Policy.    

The key objectives of the Company are to:

a)   Pay regular tax-free dividends to investors;

b)   Maintain VCT status to enable investors to benefit from the associated tax reliefs;

c)   Reduce the volatility normally associated with early stage investments by applying its investment policy;

d)   In respect of the C Ordinary Share Fund and the D Ordinary Share Fund, provide investors with the opportunity to exit shortly after 16 years following investment with a partial return of funds to shareholders after 6 years; and

e)   In respect of the E Ordinary Share Fund, provide investors with the opportunity to exit between 10 and 12 years following investment with a possible early partial return of funds to shareholders if market conditions present such an opportunity.

The Company will not vary these objectives to any material extent without the approval of the Shareholders.

The Company's investment policy has been designed to satisfy the legislative requirements of the VCT scheme and to provide stable and readily realisable returns. The Company's investment policy is directed towards new investments into cash generative businesses which are operating in stable or mature fields with a high-quality customer base and which can provide a positive return to investors. The Board may on occasion, where deemed appropriate, invest in less mature or stable fields where there is the opportunity for substantial growth and development. The investments will be made with the intention of growing and developing the revenues and profitability of the target businesses to enable them to be considered for traditional forms of bank finance and other funding. This, in turn, should enable the Company to benefit from refinance gains or from a favourable sale to a third party.

As identified in the Chairman's Statement, the outcome of the government's Patient Capital Review was announced in the Autumn Budget in 2017. Although the landscape of VCTs has been affected the investment policy of the Company will continue to aim for regular tax-free dividends, maintenance of the VCT qualifying status and to minimise the volatility associated with early stage investments.

In respect of Qualifying Investments, the Company will seek:

a)   Investments on which robust due diligence has been undertaken;

b)   Investments where there is access to regular material financial and other information;

c)   Investments where it may be possible to mitigate capital losses through careful analysis of the collateral available; and

d)   Investments where there is a strong relationship with the key decision makers.

Target Asset Allocation

At least 70% of the Company's net assets will be invested in Qualifying Investments. As mentioned in the Outlook above, this minimum asset investment will increase to 80% from 6 April 2019. The remaining assets will be exposed either to (i) cash or similar cash-based liquid investments or (ii) investments originated in line with the Company's Qualifying Investment policy but with realisation dates which fit with the liquidity needs of the Company.

Qualifying Investments will typically range between £500,000 and £5,000,000 and encompass businesses with strong asset bases, predictable revenue streams or with contractual revenues from financially sound counterparties. No single investment by the Company will represent more than 15 per cent of the aggregate net asset value of the Company at the time the investment is made.

Qualifying Investments

The Company will pursue investments in a range of industries but the type of business being targeted is subject to the specific investment criteria discussed below. The objective is to build a portfolio of unquoted companies which are cash generative and, therefore, capable of producing income and capital repayments to the Company prior to their disposal by the Company.

Although invested in diverse industries, it is intended that the Company's portfolio will comprise companies with certain characteristics, for example clear commercial and financial objectives, strong customer relationships and, where possible, tangible assets with value. Triple Point will focus on identifying businesses typically with contractual revenues from financially sound counterparties or a stream of predictable transactions with multiple clients.

Businesses with assets providing valuable security may also be considered. The objective is to reduce the risk of losses through reliability of cash flows or quality of asset backing and to provide investors with tax-free income.

The criteria against which investment targets would be assessed will include the following:

a)   An attractive valuation at the time of the investment;

b)   Managed risk of capital losses;

c)   The quality of the company's cash flows;

d)   The quality of the businesses' counterparties, suppliers and market position;

e)   The sector in which the business is active;

f)    The quality of the company's assets;

g)   The opportunity to structure an investment that can produce distributable income;

h)   The potential for growing and developing the revenues and profitability of the company to enable it to be considered for traditional forms of bank finance and other funding; and

i)    The ability to facilitate an exit which enables the Company to meet its key investment objective of returning funds in line with shareholder expectations.

As the value of investments increase the Company's Investment Manager will monitor opportunities for the Company to realise capital gains to enable the Company to make tax-free distributions to shareholders.

Non-Qualifying Investments

The Non-Qualifying Investments will be managed with the intention of generating a positive return. The Non-Qualifying Investments will comprise from time to time a variety of assets including investments following Triple Point's Navigator Strategy, quoted or unquoted investments (direct or indirect) in cash and highly liquid interest-bearing investments, secured loans, bonds, equities, and collective investment schemes.

Borrowing Powers

The Company has no present intention of utilising direct borrowing as a strategy for improving or enhancing returns. To the extent that borrowing is required, the Directors will restrict the borrowings of the Company and exercise all voting and other rights or powers of control over its subsidiary undertakings (if any) to ensure that the aggregate amount of money borrowed by the group, being the Company and any subsidiary undertakings for the time being, (excluding intra-group borrowings), shall not without the previous sanction of an ordinary resolution of the Company exceed 30% of its NAV at the time of any borrowing.

Risk Diversification

The Company aims to invest in a number of different businesses within different industry sectors but may focus investments in a single sector where appropriate to do so. No single investment by the Company will represent more than 15 per cent of the aggregate NAV of the Company at the time the investment is made.

The above Investment Policy does not take into account the changes to the VCT rules relating to non-qualifying investments that took effect on 6 April 2016. From that date any non-qualifying investments must be in either shares or units in alternative investment funds, undertakings for collective investment in transferable securities (UCITS) which meet certain requirements or ordinary shares/securities in a company which are acquired on a regulated market. The Investment Manager will continue to make sure that all non-qualifying investments made after that date meet the new requirements although it is not expected this will represent a departure from the current policy.

Valuation Policy

All unquoted investments will be valued in accordance with BVCA or similar guidelines under which investments are not normally re-valued above cost within twelve months of acquisition unless third party funding has occurred. A brief summary of the BVCA guidelines as it applies to investments is as follows:

·      Investments should be reported at fair value where this can be reliably determined by the Board on the recommendation of the Investment Manager;

·      that this price is a proxy for fair value;

·      In estimating fair value for an investment, the valuation methodology applied should be the most appropriate for a particular investment. Such methodologies, including the price of the recent investment, earnings multiples, net assets, discounted cash flows or earnings and industry valuation benchmarks, should be applied consistently; and

·      If fair value cannot be reliably measured, transaction price is used for valuing investments where it is believed that this price is a proxy for fair value.

Any quoted investments will be valued at prevailing bid prices.

For accounting periods commencing 1 January 2019 onwards, updated International Private Equity and Venture Capital Valuation ("IPEV") guidelines no longer allow 'cost' and 'price of a recent investment' as the primary methodology to be used when valuing investments.

This is discussed further in note 10.

Key Performance Indicators

As a VCT the Company's objectives are providing Shareholders with up front tax relief and returns through capital appreciation and the payment of dividends.

The primary KPIs in meeting these objectives are:

·    Net Asset Value plus dividends paid; and

·    Earnings per share

A record of these indicators is detailed on page 2 entitled Financial Summary.

Share Buy-Back Policy

The Company aims, but is not committed, to offer liquidity to Shareholders through on-going buy-backs, subject to the availability of distributable reserves and cash, at a target discount of 10% to net asset value.

Share Realisation Policy

After an anticipated holding period of between five and seven years, which may include follow-on investments into investee companies as appropriate, Triple Point intends to identify opportunities to realise investments in order to exit investors in the most efficient way possible.

Tax Benefits

The Company's objective is to provide shareholders with an attractive income and capital return by investing its funds in a broad spread of unlisted UK companies which meet the relevant criteria for investment by Venture Capital Trusts.

Investing in a VCT brings the benefit of tax-free dividends, as well as up-front income tax relief.  The Company continues to meet the VCT qualification requirements which are continuously monitored by the Investment Manager and reviewed by the Directors.  Investment classification by asset value and sector value are shown over the following pages:

Investment classification for the C Share Class by asset value and sector value are shown below:

Investment Portfolio - C Share Class

VCT Qualifying Investments             78%  

VCT Non-Qualifying Investments       18%

Cash                                               4%

Investments by Sector - C Share Class

Hydro Electric Power                            83%

SME Funding Hydro Electric Power       17%

Investment classification for the D Share Class by asset value and sector value are shown below:

Investment Portfolio - D Share Class

VCT Qualifying Investments             86%  

VCT Non-Qualifying Investments       9%

Cash                                               5%

Investments by Sector - D Share Class

Hydro Electric Power                            92%

SME Funding Hydro Electric Power       8%

Investment classification for the E Share Class by asset value and sector value are shown below:

Investment Portfolio - E Share Class

VCT Qualifying Investments             51%  

VCT Non-Qualifying Investments       33%

Cash                                               16%

** Please note that the percentage of qualifying investments in the above graph is not representative of the Company as a whole, whose qualifying investments exceed the requisite 70% threshold.

Investments by Sector - E Share Class

Vertical Growing                                   20%

Quoted Investments                              24%

Hydroelectric Power                              12%

SME Funding Hydro Electric Power       3%

SME Funding - Other                            9%

Electricity generation - Other                 32%

VCT Regulation

VCTs were first introduced in the Finance Act 1995 to provide a means for private individuals to invest in unquoted companies in the UK. The Finance Act 2004 introduced changes to VCT legislation designed to make VCTs more attractive to investors. The current tax benefits available to eligible investors in VCTs include:

·    Up-front income tax relief of 30% on a maximum investment of £200,000 per tax year on newly-issued shares;

·    exemption from income tax on dividends received; and

·    exemption from capital gains tax on disposals of shares in VCTs.

Since the Finance Act 2004, the VCT rules have subsequently been amended under the Finance Act 2014 and The Finance (No 2) Act 2015. The Investment Manager, utilising advice from Philip Hare & Associates LLP, ensures continued compliance with any legislative changes.

As referred to in the Chairman's Statement on page 3, further changes have been introduced with effect from 6 April 2019. The Company will continue to ensure its compliance with the qualification requirements. 

The Company has been approved as a VCT by Her Majesty's Revenue and Customs. In order to maintain this approval, the Company must comply with certain requirements on a continuing basis. Within three years from the effective date of provisional approval or later allotment at least 70% of the Company's investments must comprise "qualifying holdings" of which at least 30% must be in eligible Ordinary Shares. This investment criterion continues to be met. From the 1 April 2020, the percentage of the Company's investments held in "qualifying holdings" will increase from 70% to 80%.

FCA Regulation

On 1 April 2014 Triple Point Income VCT plc registered with the Financial Conduct Authority as a small Alternative Investment Fund Manager ("AIFM") under the AIFM Directive.

Exit Programme

After successfully returning funds to the Ordinary Shareholders, the Company is now committed to securing a partial realisation for both the C and D Share Classes. In relation to the C Share Class the Company is intending to secure the partial realisation after its five-year anniversary but plans to retain its investment in the Hydro companies until 2029. In order for the Company to benefit from economies of scale, the D Shares are also intending to secure the partial realisation alongside the C Share Class and also plan to retain its investment in the Hydro companies until 2030. In relation to the E Share Class the Company is intending to return funds to the E Shareholders as soon as practicable after their five-year holding period. 

The valuation of, and potential exit routes for, the Company's portfolio of investments are reviewed and discussed at each Board meeting. The Investment Manager has successfully implemented exit plans for other VCTs under its management.

Principal Risks and uncertainties

The Directors carry out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. The main areas of risk identified by them, along with the risks to which the Company is exposed through its operational and investing activities, are detailed below.

VCT qualifying status risk: The Company is required at all times to observe the conditions laid down in the Income Tax Act 2007 for the maintenance of approved VCT status. The loss of such approval could lead to the Company losing its exemption from corporation tax on capital gains, to investors being liable to pay income tax on dividends received from the Company and, in certain circumstances, to investors being required to repay the initial income tax relief on their investment.  The Investment Manager keeps the Company's VCT qualifying status under continual review and reports to the Board on a quarterly basis.  The Board has also appointed Philip Hare & Associates LLP to undertake an independent VCT status monitoring role.

Investment risk: The Company's VCT qualifying investments will be held in small and medium-sized unquoted investments which, by their nature, entail a higher level of risk and lower liquidity than investments in large quoted companies. This could make it difficult to realise investments in line with the relevant strategy. The Directors and Investment Manager aim to limit the risk attached to the portfolio as a whole by careful selection and timely realisation of investments, by carrying out rigorous due diligence procedures and by maintaining a spread of holdings in terms of industry sector and geographical location. The Board reviews the investment portfolio with the Investment Manager on a regular basis.

Financial risk: As a VCT the Company is exposed to market price risk, credit risk, fair value risk, liquidity risk and interest rate risk. As most of the Company's investments will involve a medium to long-term commitment and will be relatively illiquid, the Directors consider that it is inappropriate to finance the Company's activities through borrowing, other than for short term liquidity. The key elements of financial risk are discussed in more detail in note 15.

Failure of Internal controls risk: The Board regularly reviews the system of internal controls, both financial and non-financial, operated by the Company and the Investment Manager. These include controls designed to ensure that the Company's assets are safeguarded and that proper accounting records are maintained.

Viability Statement

In accordance with provision C.2.2 of the 2016 revision to the UK Corporate Governance Code, the Directors have assessed the prospect of the Company over a longer period than 12 months required by the Going Concern provision. The Board conducted this review for a period of five years, which was considered to be an appropriate time horizon, as investors are required to hold their investment for a period of five years in order to benefit from the associated tax reliefs. The Board has determined that five years up to 31 March 2024, is the maximum timescale over which the future position of the Company can be forecast with a material degree of accuracy and therefore is the appropriate period over which to consider the viability. During the next five years both the C and D Share Class will reach its five-year holding period and will look to partially exit. The E Share Class will also reach their five-year holding period, based on this the Directors believe it is reasonable to make their assessment over five years.

In order to assess this requirement, the Board regularly considers the Company's strategy and takes into account the Company's current position and carries out a robust assessment of the principal risks, including future performance and liquidity. Consideration has also been given to the Company's reliance on, and close working relationship with the Investment manager. This has enabled the Directors to state that they have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment. The Board has considered both the Company's long-term and short-term cash flow projections and considers these to be realistic and reasonable.

More information on the principal risks of the Company is set out on pages 13 and above.

To provide this assessment the Board has considered the Company's financial position and ability to meet its expenses as they fall due as well as considering longer term viability:

·    the expenses of the Company are predictable and modest in comparison with the assets and there are no capital commitments foreseen which would alter that position;

·    the Company has no employees, only Non-Executive Directors, and consequently does not have redundancy

or other employment related liabilities or responsibilities;

·    most of the Company's investments will involve a medium to long-term commitment and will be relatively illiquid but the board reduces the risk as a whole by careful selection and timely realisation of investments; and

·    the Directors will continue to monitor closely changes in the VCT legislation and adapt to any changes to ensure the Company maintains approval. The Directors have appointed an independent adviser to undertake the VCT status monitoring role.

Based on the results of this review, the Directors have a reasonable expectation that the Company will be able to continue its operations and meet its expenses and liabilities as they fall due over the period of their assessment.

Share Buy-Back Discount Policy

The Company has a share buy-back facility, committing to buy back shares at no more than a 10% discount to the prevailing NAV, subject to the Directors' discretion. We will be asking shareholders at the Annual General Meeting to extend the facility for the Company to purchase shares in the market for cancellation. Shareholders should note that if they sell their shares within five years of subscription, they forfeit any tax relief obtained. If you are considering selling your shares, please contact TPIM on 020 7201 8989.

Environmental, Social, Employee and Human Rights Issues

As an externally managed investment company with no employees the Company does not maintain specific policies in relation to these matters. Due to the nature of the Company's activities, there being no employees and only 3 Non-Executive Directors, there are no Human Rights Issues to report. Its investment in companies engaged in energy generation from renewable sources means it will contribute to the reduction in carbon emissions.

Gender Diversity

The Board of Directors comprises 3 male Directors. The Investment Manager has 93 staff of whom 50 are men and 43 are women.

Strategic Report - Investment Manager's Review

Sector Analysis

The quoted and unquoted investments can be analysed as follows

			Electricity Generation		SME Funding
Industry Sector	Crematorium Management	Vertical Growing	Hydro Electric Power	Other Electric Power	Hydro Electric Power	Other**	Quoted Investments	Total Investments
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Investments at 31 March 2018
Ord Shares	646	-	2,806	6,846	350	450	-	11,098
C Shares	-	-	11,702	-	2,888	-	-	14,590
D Shares	-	-	11,717	-	1,206	800	-	13,723
E Shares	-	5,000	-	-	400	1,449	5,884	12,733
Total	646	5,000	26,225	6,846	4,844	2,699	5,884	52,144
Investments made during the period
D Shares	-	-	400	-	-	-	-	400
E Shares	646	-	2,806	6,478	350	50	-	10,330
	646	-	3,206	6,478	350	50	-	10,730
Investments realised during the period
Ord Shares	(646)	-	(2,806)	(6,846)	(350)	(450)	-	(11,098)
C Shares	-	-	(88)	-	-	-	-	(88)
D Shares	-	-	(5)	-	-	(800)	-	(805)
E Shares	(124)	-	(437)	284	-	800	-	523
	(770)	-	(3,336)	(6,562)	(350)	(450)	-	(11,468)
Investments valued during the period
C Shares	-	-	2,913	-	-	-	-	2,913
D Shares	-	-	1,417	-	-	-	-	1,417
E Shares	(419)	-	506	1,100	-	(3)	17	1,201
	(419)	-	4,836	1,100	-	(3)	17	5,531
Investments at 31 March 2019
C Shares	-	-	14,527	-	2,888	-	-	17,415
D Shares	-	-	13,529	-	1,206	-	-	14,735
E Shares	103	5,000	2,875	7,862	750	2,296	5,901	24,787
Total	103	5,000	30,931	7,862	4,844	2,296	5,901	56,937
Total investments %	0.19%	8.78%	54.32%	13.81%	8.51%	4.03%	10.36%	100.00%

** Other SME funding includes £2,296,000 of E Ordinary Share Class investment into a UK based LLP which provides finance to small and medium sized enterprises.

The VCT was established to fund small and medium sized enterprises. At 31 March 2019 it had three share classes each invested in their own portfolio as detailed on page 16. The overall portfolio comprised investments in 18 small, unquoted companies and one quoted Real Estate Investment Trust, across 5 sectors: crematorium management; electricity generation, vertical growing, SME Funding; and Investment Property.

A number of new requirements were put in place following the Patient Capital Review, including an increase in the threshold for qualifying investments from 70% to 80% for accounting periods commencing after 6 April 2019. The Investment Manager monitors compliance with all qualification conditions closely and maintains a forward-looking Qualifying Investment Tracker.  We are confident that we can ensure continuing compliance with all conditions. 

The Company's Share Class portfolio consists of businesses which are fully operational and revenue generating. Generally, performance during the year across the portfolio has been in line with expectations with all share classes benefitting from an uplift in the valuation of their investments.

Review and Outlook

Crematorium Management

The Company has an investment in a business that provides crematory and mercury abatement services for the crematoria of a London Borough. This investment receives revenues from local authorities and has consistently generated a steady return over the years it has been held. During the year, Furnace Managed Services Limited ("FMS") repaid its loan in full to the Company. Looking ahead, the Company is expected to receive dividends from FMS.

Solar

The Company holds an investment in four portfolios of rooftop solar PV systems through the following investee companies:

·      Green Energy for Education Limited ("GEFE"), which owns a portfolio of 126 systems on residential rooftops in Luton;

·      Campus Link Limited ("CMP"), which owns a portfolio of 36 systems on residential rooftops in south west England;

·      Digima ("DIG") Limited, which owns a portfolio of 82 systems on residential rooftops in East Anglia; and

·      Digital Screen Solutions ("DSS") Limited, which owns a portfolio of 324 systems on residential rooftops in Northern Ireland.

The final portfolio was acquired by Digital Screen Solutions on 21 December 2018. The GEFE, CMP and DSS portfolios are currently performing in line with, or slightly above, expectations. The DIG portfolio is performing slightly below expectations, and Digima is working closely with its operations & maintenance provider in an effort to improve this performance going forward.

Hydroelectric Power

The eleven hydroelectric schemes are "run of river" plants which capture river flow agreed above a certain level as determined by the Scottish Environment Protection Agency (SEPA).  Water flow is generally captured before a descent and flows down the penstock (pipe) to a turbine engine which produces electricity. The water is then returned to the river.  The hydro companies benefit from government backed Feed-in Tariff (FiT) payments based on output and from the sale of the electricity produced to utilities or other power companies under Power Purchase Agreements (PPAs). The companies have continued to obtain better power prices than were originally forecast, currently earning an average of 6.3 pence per kWh compared to an expected 5 pence per kWh at the outset of the projects.

The last 12 months have seen lower than expected rainfall across the Scottish Highlands. Rainfall variability is to be expected over the 40-year period of generation which our investee companies are expected to experience overall, and we continue to be pleased with the efficiency of the hydro plants owned by them. The hydroelectric companies remain highly focussed on improving efficiencies and maximising output and are working alongside hydro experts to further enhance performance.

Industry Update

The hydroelectric companies, together with other industry members and the British Hydropower Association, are continuing to lobby the Scottish Government to recognise the concern on business rates in the hydro sector. For the financial year 2018/19, the hydroelectric companies received a 60% relief and it is expected that this relief will continue to be applied for the financial year 2019/20 and until such time as the Scottish Government address the issues of the business rates in the hydro sector.

In July 2018, the government announced the end of the FiT scheme for renewable energy from 31 March 2019.  All businesses that already have FiT registrations will continue to receive payments for the remainder of their agreement.  Therefore, as the companies entered in to 20 year agreements prior to this announcement, the eight hydroelectric companies are unaffected by this change.

Gas Power

The Company has an investment which has constructed a gas fired energy centre which will provide a reliable and secure energy supply. The energy centre was commissioned during May 2018 and it consists of containerised gas combustion engines that generate electricity for onward sale, especially at times when there is high demand for power.

The UK is aiming to close its coal-fired power plants by 2025, and it is therefore expected that there will be a shortage in the supply of energy in the UK. Although renewable energy makes an increasing contribution, the irregular nature of its production means that other baseload sources will also be required to make up the deficit.

The company has taken advantage of a gap in the market by constructing and operating gas fired energy centre to produce and sell electricity to customers. The energy centre utilises simple technology, provided by Rolls Royce, to deliver a reliable and secure energy supply.

Gas is purchased from the National Transmission System and combusted in the engines. The electricity is then exported to the National Grid and sold under a power purchase agreement. The company receives revenues from the sale of electricity and additional income from embedded benefits.

Embedded benefits cover a range of payments available to small electricity generators connected to the distribution network, rather than the transmission grid. Benefits can be earned for generating at peak times and for local distribution.

In addition, generators can earn additional revenues by operating outside the peak 4-7pm hours to take advantage of 'intraday' and 'post-gate closure' price volatility.

During the six-month period to 31 December 2018, Green Peak Generation Ltd generated 4,483 MWh of electricity. Based on an average of 3.8 MWh annual use per household, the energy centre generated enough electricity for 2,359 homes during the period.

Green Peak Generation is working with the contractor to replace the engine silencers, at no cost to Green Peak Generation, owing to their poor acoustic performance. This is expected to be completed in June 2019.

Industry Update

The Capacity Market consists of fixed payments to power generators to ensure they are available during periods of high demand. Eligible power generators must bid in an auction process to win a contract, they will then receive these payments in exchange for ensuring the generator is available during the peak demand periods.

On 15 November 2018, the European Court of Justice unexpectedly announced that it did not believe that sufficient work had been undertaken when the European Commission ('EC') approved the UK's Capacity Market scheme, leading to a halt to all payments under the scheme. 

The UK's Department for Business, Energy and Industrial Strategy ('BEIS') have indicated they are working closely with the EC to secure approval and have suggested they anticipate securing this approval by the end of 2019 (including making the currently frozen Capacity Market payments). As the expected impact of this announcement is only a delay in payments which will be received by the projects, it is not anticipated that this will have a material impact on investor returns, but there is currently uncertainty over the timing of when these revenues will be received.

In addition, Ofgem completed its review of embedded benefits available to small generators and announced certain planned changes. Albeit a relatively small element of the revenue generated by the companies, embedded benefits form another income stream which the energy centres receive. Assuming these changes are implemented, this will have the effect of reducing the income the energy centres are able to earn as well as introducing a small cost for each MWh of electricity that is generated. This is expected to have a minor negative impact on investor returns.

Vertical Growing

Vertical Growing is the practice of producing food in an indoor growing facility where all inputs (water, light, and nutrients) meet the optimum needs of the crop.

Vertical growing facilities are designed to have a sealed environment, meaning that the product is grown under controlled conditions, with positive air pressure to prevent any pests entering the facility. This ensures that insects and other pests cannot attack the crop, removing both the need to use pesticides and to wash the crop before distribution therefore increasing its shelf life.

A large variety of produce can be grown using this method including herbs, salad leaves, and beyond. By combining flexible designs and short growing cycles, vertical growing facilities enable the grower to quickly respond to the demands of customers, switching between different products with minimal notice.

Perfectly Fresh Cheshire Limited ("PFC") has now substantially completed construction of its first vertical growing facility, which has also passed a critical site audit and, subject to some final snagging issues, is ready to move into an operational phase.

The construction of the first facility presented many challenges, which was to be expected when considering the innovative and high-tech nature of the build. Most of the initial construction challenges have now been rectified and the facility is now trialling the growth of its first crops.

PFC has also made several new hires who will  run and manage the facility and to satisfy PFC's customers. Once operations have commenced PFC will also focus on obtaining new contracts and new customers, with a view to constructing a second facility. In the medium term, it is intended that PFC would seek to secure institutional investment which will help enable it to pursue its future development plans.

With a few big players entering the market recently, such as Ocado, the sector is continuing to gather momentum. We believe PFC is one of the front-runners in the industry and boasts significant technology and know-how developed within its first facility.

Non-Qualifying  

Real Estate Investment Trust ("REIT")

The Triple Point Social Housing REIT invests in social housing assets within the UK, in particular homes in the supported housing sector. These homes are adapted to provide care and support to vulnerable tenants with specific requirements and provide tenants with greater independence than institutional care accommodation.

The REIT owns a portfolio of assets that benefit from long term indexed linked leases of at least twenty years to Approved Providers such as housing associations, who are bodies that receive their funding from central and local government. Through these long leases it is able to offer its shareholders an attractive and consistent level of inflation-linked income.

As at 31 March 2019 the Triple Point Social Housing REIT had a NAV per Ordinary Share of 103.72. The REIT's portfolio performed in line with expectation and the forecast dividend for the 2019 financial period was increased by CPI, in line with target, to 5.095p.  

In February 2019 the Regulator of Social Housing published an Addendum to the Sector Risk Profile 2018 entitled "Lease-based providers of specialist supported housing". The report did not highlight any new risks to the lease-based model; however it has resulted in a decrease in investor sentiment towards the sector, and the shares are currently trading at a significant discount to NAV.

The Company and the Investment Manager believe the REIT remains a positive investment driven by the independent, community based accommodation provided by the REIT that delivers significant cost savings for Local Authorities, and better tenant outcomes, as compared to residential nursing homes, care homes and in-patient hospitals.  

SME Funding

The Company has non-qualifying investments in four finance companies. These four finance companies provide funding for business-critical loans and asset finance to over 75,000 UK Corporate and SME customers. Two of these companies,

Broadpoint 2 Ltd and Broadpoint 3 Ltd provide loan and equity funding to the hydroelectric sector. 

All of the loans are performing in line with expectations and Broadpoint 2 is generating a steady yield for the Company.  Broadpoint 3's equity holdings support a loan from the Company and are long term in nature.

Ordinary Share Class

On 26 February 2019 the Ordinary Shares were cancelled, with the final 1.00p of share capital returned to Ordinary Class Shareholders on 22 March 2019. The total returned to shareholders was 98.87p per share against a target return of 90.40p per share.

C Share Class

The Company and the Investment Manager will monitor the ongoing operation and efficiency of the C Share Class investments. The C Share Class has investments in three companies which between them own six hydroelectric schemes in the Scottish Highlands.

Further updates on this sector are detailed in the Hydroelectric Power section above. The Investment Manager is now focussing on securing a partial realisation for the C Share Class.

D Share Class

The Company and the Investment Manager will monitor the ongoing operation and efficiency of the D Share Class investments. The D Share Class has investments in three companies which between them own six hydroelectric schemes in the Scottish Highlands. Further updates on this sector are detailed in the Hydroelectric Power section above. The Investment Manager is now focussing on securing a partial realisation for the D Share Class.

E Share Class

The E Share Class has made a qualifying investment of £5 million in a pioneering vertical growing company that has recently completed construction of its commercial scale growing facility in Cheshire.  

Triple Point is paid an annual management fee as Investment Manager to the REIT and consequently has agreed to rebate a corresponding part of its management fee relating to this investment, to ensure VCT Investors are not bearing additional fees.

The REIT is discussed in more detail on page 19.

Brexit

The Investment Manager and the Board continue to keep the possible impact of Brexit on the Company under review.  The Company's strategy of investing in small UK based businesses means that it is unlikely to be directly exposed to the terms of an exit from the EU.  We are, however, going through a period of some political and, potentially, economic uncertainty. We believe that by investing carefully, monitoring our portfolio rigorously and providing support to the businesses in which we have invested we can minimise the effects of this uncertainty.   

Going forward, the Company and the Investment Manager are focused on ensuring that the remaining funds are invested in line with the Company's strategy and the requirements of the VCT legislation.

If you have any questions, please do not hesitate to call us on 020 7201 8990.

Ben Beaton

Managing Partner

for Triple Point Investment Management LLP

17 June 2019

Strategic Report - Investment Portfolio Summary

	31 March 2019					31 March 2018
	Cost		Valuation			Cost		Valuation
	£'000	%	£'000	%		£'000	%	£'000	%
Unquoted qualifying holdings	33,704	62.75	42,523	69.40		33,705	50.06	37,075	52.52
Quoted non-qualifying holdings	6,001	11.02	5,901	9.35		6,001	8.91	5,884	8.34
Unquoted non-qualifying holdings	8,563	15.72	8,513	13.48		9,185	13.63	9,185	13.01
Financial assets at fair value through profit or loss	48,268	89.49	56,937	92.23		48,891	72.60	52,144	73.87
Cash and cash equivalents	6,188	10.51	6,188	7.77		18,448	27.40	18,448	26.13
	54,456	100.00	63,125	100.00		67,339	100.00	70,592	100.00
Qualifying Holdings
Unquoted
Solar
Digima Ltd	1,262	2.32	1,612	2.55		1,262	1.87	1,621	2.30
Digital Screen Solutions Ltd	2,020	3.71	2,658	4.21		2,020	3.00	2,062	2.92
Green Energy for Education Ltd	475	1.72	1,127	3.82		475	0.71	963	1.36
Hydroelectric Power
Elementary Energy Ltd	2,060	3.78	2,409	3.82		2,060	3.06	2,310	3.27
Green Highland Allt Choire A Bhalachain (225) Ltd	3,130	5.75	3,642	5.77		3,130	4.65	3,504	4.96
Green Highland Allt Garbh Ltd	2,710	4.98	2,710	4.29		2,710	4.02	2,710	3.84
Green Highland Allt Ladaidh (1148) Ltd	3,500	6.43	5,010	7.94		3,500	5.20	4,092	5.80
Green Highland Allt Luaidhe (228) Ltd	1,995	3.66	2,407	3.81		1,996	2.96	2,165	3.07
Green Highland Allt Phocachain (1015) Ltd	3,932	7.22	4,871	7.72		3,932	5.84	4,187	5.93
Green Highland Shenval Ltd	1,120	2.06	797	1.26		1,120	1.66	692	0.98
Green Highland Renewables (Achnacarry) Ltd	4,300	7.90	7,857	12.45		4,300	6.39	5,569	7.89
Gas Power
Green Peak Generation Ltd	2,200	4.04	2,423	3.84		2,200	3.27	2,200	3.12
Vertical Growing
Perfectly Fresh Cheshire Ltd	5,000	9.18	5,000	7.92		5,000	7.43	5,000	7.08
	33,704	62.75	42,523	69.40		33,705	50.06	37,075	52.52

	31 March 2019					31 March 2018
	Cost		Valuation			Cost		Valuation
Non-Qualifying Holdings	£'000	%	£'000	%		£'000	%	£'000	%
Quoted
Investment property
TP Social Housing REIT Plc Equity	6,001	11.02	5,901	9.35		6,001	8.91	5,884	8.34
	6,001	11.02	5,901	9.35		6,001	8.91	5,884	8.34
Unquoted
Crematorium Management
Furnace Managed Services Ltd	496	0.91	103	0.16		620	0.92	646	0.92
Hydroelectric Power
Elementary Energy Ltd	248	0.46	248	0.39		285	0.42	285	0.40
Green Highland Allt Choire A Bhalachain (225) Ltd	289	0.53	289	0.46		318	0.47	318	0.45
Green Highland Allt Luaidhe (228) Ltd	180	0.33	180	0.29		185	0.27	185	0.26
Green Highland Allt Phocachain (1015) Ltd	122	0.22	122	0.19		143	0.21	143	0.20
Green Highland Renewables (Achnacarry) Ltd	26	0.05	27	0.04		65	0.10	65	0.09
SME Funding
Hydroelectric Power:
Broadpoint 2 Ltd	2,834	5.20	2,834	4.49		2,834	4.21	2,834	4.01
Broadpoint 3 Ltd	2,010	3.69	2,010	3.18		2,010	2.98	2,010	2.85
Other:
Aeris Power Ltd	158	0.29	500	0.79		525	0.78	499	0.71
Funding Path Ltd	2,200	4.04	2,200	3.49		2,200	3.27	2,200	3.12
	8,563	15.72	8,513	13.48		9,185	13.63	9,185	13.01

Financial Assets are measured at fair value through profit or loss. The initial best estimate of fair value of these investments that are either quoted or not quoted on an active market is the transaction price (i.e. cost). The fair value of these investments is subsequently measured by reference to the enterprise value of the investee company, which is best deemed to reflect the fair value. Where the Board considers the investee company's enterprise value to remain unchanged since acquisition, investments continue to be held at cost less any loan repayments received. Where the Board considers the investee company's enterprise value has changed since acquisition, investments are held at a value measured using a discounted cash flow model or the value expected to be realised on disposal which is equivalent to fair value.

For accounting periods commencing 1 January 2019 onwards, updated International Private Equity and Venture Capital Valuation ("IPEV") guidelines no longer allow 'cost' and 'price of a recent investment' to be used as the primary valuation technique when valuing investments. This is discussed further in note 10.

Strategic Report - Investment Portfolio's Ten Largest VCT Investments

Triple Point Social Housing REIT Plc
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 %
17 November 2017	6,000,886	5,901,459	Bid Price	250	1.65	1.65
Summary of Information from Investee Company Financial Statements ending in 2018:						£'000
Turnover						11,490
Earnings before interest, tax, amortisation and depreciation (EBITDA)						21,687
Profit before tax						19,897
Net assets						364,161
Triple Point Social Housing REIT Plc is a UK Real Estate Investment Trust ("REIT") investing in UK Social Housing assets, in particular homes in the Supported Housing sector which have been adapted to provide care and support to vulnerable tenants.

Perfectly Fresh Cheshire 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 %
21 November 2017	5,000,000	5,000,000	Cost	-	49.97	49.97
Summary of Information from Investee Company Financial Statements:						£'000
No financial information is available as the company has not produced meaningful financial statements since it signed its commercial agreements.
Perfectly Fresh Cheshire Ltd has constructed a pioneering vertical growing facility. This facility will produce premium quality fresh salads and herbs in indoor, laboratory-like conditions.

*The directors consider the fair value to be equivalent to the cost of the investment.

Green Highland Renewables (Achnacarry) 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 %
13 August 2014	4,300,000	8,896,000	Discounted Cash Flow	106	40.65	40.65
Summary of Information from Investee Company Financial Statements ending in 2018:						£'000
Turnover						2,016
Earnings before interest, tax, amortisation and depreciation (EBITDA)						1,477
Profit before tax						832
Net assets before VCT loans						4,358
Net assets						3,068
Green Highland Renewables (Achnacarry) Ltd is operating three separate run-of-river hydroelectric power plants located adjacent to Loch Arkaig near Fort William. Having reached financial close in August 2014, the Allt Dubh site (722kw) was commissioned in November 2015 with the Loch Blair site (1,250kw) and the Cheanna Mhuir site (500kw) both successfully commissioned in December 2015. The company earns Feed-in-Tariffs and other revenues from the generation and export of electricity to the National Grid.

Green Highland Allt Phocachain (1015) 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 %
13 November 2014	3,932,000	4,871,000	Discounted Cash Flow	343	42.70	100.00
Summary of Information from Investee Company Financial Statements ending in 2018:						£'000
Turnover						758
Earnings before interest, tax, amortisation and depreciation (EBITDA)						559
Loss before tax						(114)
Net assets before VCT loans						3,892
Net assets						2,455
Green Highland Allt Phocachain (1015) Ltd operates two separate 500 KW run-of-river hydraulic power plants located in Glen Moriston, in the Scottish Highlands.  The company earns Feed-in-Tariffs from generation and export of electricity to the National Grid.

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	5,010,000	Discounted Cash Flow	294	35.17	50.25
Summary of Information from Investee Company Financial Statements ending in 2018:						£'000
Turnover						644
Earnings before interest, tax, amortisation and depreciation (EBITDA)						476
Loss before tax						(109)
Net assets before VCT loans						4,452
Net assets						2,952
Green Highland Allt Ladaidh (1148) Ltd operates a 1,350 KW run-of-river hydro-electric power plant near Loch Garry, Invergarry in the Scottish Highlands.  The company earns Feed-in-Tariffs and other revenues from the generation and export of electricity to the National Grid.

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	3,642,000	Discounted Cash Flow	290	49.90	100.00
Summary of Information from Investee Company Financial Statements ending in 2018:						£'000
Turnover						457
Earnings before interest, tax, amortisation and depreciation (EBITDA)						331
Loss before tax						(123)
Net assets before VCT loans						2,202
Net assets						1,257
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 to the National Grid.

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	Discounted Cash Flow	235	49.00	98.00
Summary of Information from Investee Company Financial Statements ending in 2018:						£'000
Turnover						-
Earnings before interest, tax, amortisation and depreciation (EBITDA)						(11)
Profit before tax						3
Net assets before VCT loans						3,370
Net liabilities						(14)
Broadpoint 2 Ltd is a VCT non-qualifying investment, which has provided funding to hydro-electric power companies.

*The directors consider the fair value to be equivalent to the par value.

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	176	27.46	50.25
Summary of Information from Investee Company Financial Statements ending in 2018:						£'000
Turnover						581
Earnings before interest, tax, amortisation and depreciation (EBITDA)						394
Loss before tax						(85)
Net assets before VCT loans						4,752
Net assets						3,264
Green Highland Allt Garbh Ltd completed construction in August 2017 and is currently operating a run-of-river hydroelectric power plant near Glen Affric, Cannich. The 1,500kW Allt Garbh scheme earns Feed-in-Tariffs and other revenues from the generation and export of electricity to the National Grid. It is in its first year of generation and is operating in line with expectation.

**The directors consider the valuation method used appropriate, due to the drag along rights which exist in the Investment Agreement between the Company and Green Highland Allt Garbh Ltd. 

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	2,200,000	Share of Net Assets	154	49.00	98.00
Summary of Information from Investee Company Financial Statements ending in 2018:						£'000
Turnover						279
Earnings before interest, tax, amortisation and depreciation (EBITDA)						269
Profit before tax						(40)
Net assets before VCT loans						3,116
Net liabilities						(9)
Funding Path Ltd is a VCT non-qualifying investment, which has invested in an LLP that provides finance to small and medium sized enterprises (SMEs).

Elementary Energy 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	2,409,000	Discounted Cash Flow	199	49.93	99.22
Summary of Information from Investee Company Financial Statements ending in 2018:						£'000
Turnover						314
Earnings before interest, tax, amortisation and depreciation (EBITDA)						234
Loss before tax						(27)
Net assets before VCT loans						1,865
Net assets						325
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 earning Feed-in-Tariffs and other revenues from the generation and export of electricity to the National Grid.

Strategic Report -Significant Influence and Control

The principal undertakings in which the Company's interest at the year-end is 20% or more are as follows:

Name	Registered address	Holding
Aeris Power Limited	30 Camp Road, Farnborough, Hampshire, GU14 6EW	100.00%
Broadpoint 2 Limited	1 King William Street, London, EC4N 7AF	49.00%
Digima Limited	30 Camp Road, Farnborough, Hampshire, GU14 6EW	30.87%
Digital Screen Solutions Limited	30 Camp Road, Farnborough, Hampshire, GU14 6EW	35.36%
Elementary Energy Limited	1 King William Street, London, EC4N 7AF	49.93%
Funding Path Limited	1 King William Street, London, EC4N 7AF	49.00%
Furnace Managed Services Limited	30 Buckland Gardens, Ryde, Isle of Wight, PO33 3AG	40.05%
Green Energy for Education Limited	1 King William Street, London, EC4N 7AF	50.00%
Green Highland Allt Choire A Bhalachain Limited	Q Court, 3 Quality Street, Edinburgh, EH4 5BP	49.90%
Green Highland Allt Garbh Limited	Inveralmond Road, Inveralmond Industrial Estate, Perth, PH1 3TW	27.46%
Green Highland Allt Ladaidh (1148) Limited	Q Court, 3 Quality Street, Edinburgh, EH4 5BP	35.17%
Green Highland Allt Luaidhe (228) Limited	Q Court, 3 Quality Street, Edinburgh, EH4 5BP	35.18%
Green Highland Allt Phochachain (1015) Limited	Q Court, 3 Quality Street, Edinburgh, EH4 5BP	42.70%
Green Highland Renewables (Achnacarry) Limited	Inveralmond Road, Inveralmond Industrial Estate, Perth, PH1 3TW	40.65%
Green Highland Shenval Limited	Q Court, 3 Quality Street, Edinburgh, EH4 5BP	28.16%
Green Peak Generation Limited	Q Court, 3 Quality Street, Edinburgh, EH4 5BP	48.26%
Perfectly Fresh Cheshire Limited	1 King William Street, London, EC4N 7AF	49.97%

·      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

17 June 2019

Report of the Directors

The Directors present their Report and the audited Financial Statements for the year ended 31 March 2019.

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 Acland has over twenty-five years' experience in venture capital, primarily at Quester, where he became Managing Director.  When Quester was sold in 2007 it had £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 Angel Co-Fund. Simon is also an Executive Director of Green Angel Syndicate, the UK's only business angel group focussed on investing in the green economy. 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.

Simon Acland also sits on the TP Impact Enterprise Investment Scheme ("EIS") Advisory Committee, therefore he is not considered to be independent of the Investment Manager. The EIS Advisory Committee is for an area of TPIMs business which is not directly related to the Company, therefore the Board as a whole are considered to be independent.

The Board has considered provision B.7.2 of the UK Corporate Governance Code (April 2016) 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 34 to 36 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 chosen to focus its investing activities towards companies involved in renewable energy, energy production, innovative vertical growing and SME funding.

The Company has been approved as a VCT by HMRC and, in the opinion of the Directors, has conducted its affairs so as to enable it to continue to obtain such approval.

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

For details of post balance sheet events see note 20 to the Financial Statements.

Directors' and Officers' Liability Insurance

The Company has, as permitted by S233 of the Companies Act 2006, maintained insurance cover on behalf of the Directors and Company Secretary, indemnifying them against certain liabilities which may be incurred by them in relation to their offices with the Company.

Matters Covered in the Strategic Report

Dividends and financial risk management have both been discussed within the Strategic Report on pages 2,3 and 13.

Management

TPIM acts as Investment Manager to the Company. The principal terms of the Company's management agreement with TPIM are set out in note 5 to the Financial Statements.

The Board has evaluated the performance of the Investment Manager based on the returns generated since taking on the management of the Fund and a review of the management contract and the services provided in accordance with its terms. As required by the Listing Rules, the Directors confirm that in their opinion the continuing appointment of TPIM as Investment Manager is in the best interests of the shareholders as a whole.  In reaching this conclusion the Directors have taken into account the performance of other VCTs managed by TPIM and the service provided by TPIM to the Company.

Substantial Shareholdings

As at the date of this report no disclosures of major shareholdings had been made to the Company under Disclosure and Transparency Rule 5 (Vote Holder and Issuer Notification Rules).

Global Greenhouse Gas Emissions

The Company has no greenhouse gas emissions to report from the operations of 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 2019 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 13,441,438 C Ordinary Shares,13,701,636 D Ordinary Shares and 28,949,575 E Ordinary Shares at 31 March 2019 (see note 14). 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

BDO LLP is the appointed auditor of the Company and offer themselves for re-appointment. In accordance with section 489 (4) of the Companies Act 2006 a resolution to reappoint BDO LLP as auditor and to authorise the Directors to fix their remuneration will be proposed at the forthcoming Annual General Meeting.

On behalf of the Board.

David Frank

Director

17 June 2019

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; and

·      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 IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

·      The 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

17 June 2019

Corporate Governance

This Corporate Governance Report forms part of the Directors' Report on pages 29-32.

The Financial Conduct Authority requires through the listing rules, all listed companies to disclose how they have applied the principles and complied with the provisions of the UK Corporate Governance Code (the 'Code') issued by the Financial Reporting Council (FRC) in 2016.

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 2016) by reference to the Association of Investment Companies Corporate Governance Guide for Investment Companies (AIC Guide).  The AIC Code 2016, as explained by the AIC Guide, addresses all the principles set out in the UK Corporate Governance Code (April 2016), 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 2016, by reference to the AIC Guide, which incorporates the UK Corporate Governance Code (April 2016), will provide improved reporting to shareholders. The Company has complied with the recommendations of the AIC Code and the relevant provisions of the code, except as set out on page 36 under the heading Compliance Statement.

The Company is committed to maintaining high standards in corporate governance and has complied with the recommendations of the AIC Code 2016 and the relevant provisions of the UK Corporate Governance Code (April 2016), except as set out at the end of this report in the Compliance Statement.

The 2018 Corporate Governance code will apply from the next financial reporting period. The Board are currently taking steps to ensure the requirements of the code are met.

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 29 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, on merit and with due regard for the benefits of diversity on the Board, including gender. All Directors are able to allocate sufficient time to the Company to discharge their responsibilities.

The Board meets regularly on a quarterly basis, and on other occasions as required, to review the investment performance and monitor compliance with the investment policy laid down by the Board. There is a formal schedule of matters reserved for Board decision and the agreement between the Company and the 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 (April 2016) that all Directors are required to submit themselves for re-election at least every three years.

Under provision B.7.1 of the UK Corporate Governance Code Non-Executive Directors who have served longer than nine years should be subject to annual re-election. After the current period, Simon Acland will have served as a Non-Executive Director for nine years and will offer himself for re-election annually.

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	4	2
Michael Stanes	3	2

Internal Control

The Directors have overall responsibility for keeping under review the effectiveness of the Company's systems of internal controls. The purpose of these controls is to ensure that proper accounting records are maintained, the Company's assets are safeguarded, and the financial information used within the business and for publication is accurate and reliable; such a system can only provide reasonable and not absolute assurance against material misstatement or loss. The system of internal controls is designed to manage rather than eliminate the risk of failure to achieve business objectives. As part of this process an annual review of the internal control systems is carried out. The review covers all material controls including financial, operational and risk management systems. The Directors regularly review financial results and investment performance with the Investment Manager.

The Directors have established an ongoing process designed to meet the particular needs of the Company in identifying, evaluating and managing risks to which it is exposed. The process adopted is one whereby the Directors identify the risks to which the Company is exposed including, among others, market risk, VCT qualifying investment risk and operational risks which are recorded on a risk register. The controls employed to mitigate these risks are identified and the residual risks are rated taking into account the impact of the mitigating factors. The risk register is updated twice a year.

TPIM is engaged to provide administrative (including accounting) services and retains physical custody of the documents of title relating to investments.

The Directors regularly review the system of internal controls, both financial and non-financial, operated by the Company and the Investment Manager. These include controls designed to ensure that the Company's assets are safeguarded and that proper accounting records are maintained.

Internal control systems include the production and review of quarterly bank reconciliations and management accounts.

The Investment Manager's procedures are subject to internal compliance checks.

Capital management is monitored and controlled by the Investment Manager. The capital being managed includes equity and fixed interest VCT qualifying investments, cash balances and liquid resources including debtors and creditors.

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; and

·      to ensure sufficient liquid resources are available to meet the funding requirements of its investments and to fund new investments where identified.

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 at least the next 12 months. The Board receives regular reports from the Investment Manager and the Directors believe that, as no material uncertainties leading to significant doubt about going concern have been identified, it is appropriate to continue to apply the going concern basis in preparing the Financial Statements.

Relations with Shareholders

The Board recognises the value of maintaining regular communications with shareholders. In addition to the formal business of the Annual General Meeting, an opportunity is given to all shareholders to question the Board and the Investment Manager on matters relating to the Company's operation and performance. The Board and the Investment Manager will also respond to any written queries made by shareholders during the course of the year and both can be contacted at 1 King William Street, London, EC4N 7AF or on 020 7201 8989.

Compliance Statement

The Listing Rules require the Board to report on compliance with the UK Corporate Governance Code (April 2016) provisions throughout the accounting period. The UK Corporate Governance Code does, however, acknowledge that some provisions may have less relevance for investment companies, adding that the AIC Code and AIC Guide can assist in meeting the obligations under The UK Corporate Governance Code. With the exception of the limited items outlined below, the Directors consider that the Company has complied throughout the period under review with the provisions set out in the UK Corporate Governance Code (April 2016). The section references to The UK Corporate Governance Code are shown in brackets. 

1.  New Directors do not receive a full, formal and tailored induction on joining the Board. Such matters are addressed on an individual basis as they arise (B.4.1).

2.  Due to the size of the Board and the nature of the Company's business, a formal performance evaluation of the Board, its committees, the individual Directors and the Chairman has not been undertaken. Specific performance issues are dealt with as they arise (B.6.1, B.6.3).

3.  The Company does not have a senior independent director. The Board does not consider such an appointment appropriate for the Company (A.4.1).

4. The Company conducts a formal review as to whether there is a need for an internal audit function. The Directors do not consider that an internal audit would be an appropriate control for a Venture Capital Trust (C.3.6).

5.  As all the Directors are Non-Executive, it is not considered appropriate to appoint a Nomination or Remuneration Committee (B.2.1 and D.2.1).

6. The Audit committee includes three Non-Executive Directors, all of whom are considered independent with the exception of Simon Acland. More information on this is included on page 29. David Frank, who is chairman, is also chairman of the audit committee but it is not considered appropriate to appoint another independent Director. The Board regularly reviews the independence of its Directors (C.3.1).

On behalf of the Board

David Frank

Chairman 

17 June 2019

Report of the 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 BDO 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. BDO LLP do not provide any non-audit services to the company.

When considering whether to recommend the re-appointment of the external auditor the audit committee considers their current fee compared to the external audit fees paid by other similar companies. The quality and competence of the external auditor is also taken into consideration. The audit committee will then recommend to the Board the appointment of an external auditor which is ratified at the Annual General Meeting.

The FRC's Ethical Standard requires the audit partner to rotate every five years. The first audit engagement for BDO LLP was for the year ended 31 March 2018.

The effectiveness of the external audit is assessed as part of the Board evaluation conducted annually and by the quality and content of the audit plan provided to the audit committee by the external auditor and the discussions then held on topics raised. The audit committee will challenge the external auditor at the audit committee meeting if appropriate.

The Audit Committee's terms of reference include the following roles and responsibilities:

·      reviewing and making recommendations to the Board in relation to the Company's published Financial Statements and other formal announcements or regulatory returns relating to the Company's financial performance, reviewing significant financial reporting judgements contained in them;

·      reviewing and making recommendations to the Board in relation to the Company's internal control (including internal financial control) and risk management systems;

·      periodically considering the need for an internal audit function;

·      making recommendations to the Board in relation to the appointment, re-appointment and removal of the external auditor and approving the remuneration and terms of engagement of the external auditor;

·      reviewing and monitoring the external auditor's independence and objectivity and the effectiveness of the audit process, taking into consideration relevant UK professional regulatory requirements;

·      monitoring the extent to which the external auditor is engaged to supply non-audit services; and

·      ensuring that the Investment Manager has arrangements in place for the investigation and follow-up of any concerns raised confidentially by staff in relation to propriety of financial reporting or other matters.

The committee reviews its terms of reference and effectiveness annually and recommends to the Board any changes required as a result of the review.  The terms of reference are available on request from the Company Secretary.

The Board considers that the members of the committee collectively have the skills and experience required to discharge their duties effectively, and that the Chairman of the committee meets the requirements of the UK Corporate Governance Code (April 2016) as to relevant financial experience.

The Company does not have an independent internal audit function as it is not deemed appropriate given the size of the Company and the nature of the Company's business.  However, the committee considers annually whether there is a need for such a function and, if there were, would recommend it be established.

In respect of the year ended 31 March 2019, the audit committee discharged its responsibilities by:

·      reviewing the external auditor's plan for the audit of the Financial Statements, including identification of key risks and confirmation of auditor independence;

·      reviewing TPIM's statement of internal controls operated in relation to the Company's business and assessing those controls in minimising the impact of key risks;

·      reviewing periodic reports on the effectiveness of TPIM's compliance procedures;

·      reviewing the appropriateness of the Company's accounting policies;

·      reviewing the Company's half-yearly results and draft annual Financial Statements prior to Board approval;

·      reviewing the external auditor's audit findings document to the audit committee on the annual Financial Statements; and

·      reviewing the Company's going concern status.

The audit committee is responsible for considering and reporting on any significant issues that arise in relation to the Financial Statements.

The key areas of risk that have been identified and considered by the audit committee in relation to the business activities and the Financial Statements of the Company are as follows:

·     valuation and existence of unquoted investments; and

·    compliance with HM Revenue & Customs conditions for maintenance of approved Venture Capital Trust status.

The audit committee relies on the Investment Manager to assess the valuation of unquoted investments and the existence of those investments. The Investment Manager has a director on the board of all the unquoted investee companies and meets regularly with the other directors and hence has an oversight of all the investments made. The audit committee have reviewed the valuations and discussed them with both the Investment Manager and the external auditor to confirm their assessment of the valuation of the unquoted investments and the existence of those investments.

The Investment Manager has confirmed to the audit committee that the conditions for maintaining the Company's status as an approved Venture Capital Trust had been complied with throughout the year. The position has been reviewed by Philip Hare & Associates LLP in its capacity as adviser to the Company on taxation matters.

The audit committee has considered the whole Report and Accounts for the year ended 31 March 2019 and has reported to the Board that it considers them to be fair, balanced and understandable providing the information necessary for shareholders to assess the Company's position, performance, business model and strategy.

On behalf of the Board.

David Frank

Audit Committee Chairman 

17 June 2019

Directors' Remuneration Report

Introduction

This report is submitted in accordance with schedule 8 of the Large and Medium Sized Companies and Groups (Accounts and Reports) (amendment) Regulations 2013, in respect of the year ended 31 March 2019. This report also meets the Financial Conduct Authority's Listing Rules and describes how the Board has applied the principles relating to Directors' remuneration set out in UK Corporate Governance Code (issued April 2016). The reporting requirements require two sections to be included, a Policy Report and an Annual Remuneration Report which are presented below.

The Company's auditor, BDO LLP, is required to give their opinion on certain information included in this report; comprising the Directors' emoluments section and their shareholdings below. Their report on these and other matters is set out on pages 44 to 49.

Directors' Remuneration Policy Report

This statement of the Directors' Remuneration Policy was effective following approval by shareholders at the Annual General Meeting on 24 August 2017. The Board currently comprises three Directors, all of whom are Non-Executive. The Board does not have a separate remuneration committee as the Company has no employees or executive directors. The Board has not retained external advisers in relation to remuneration matters but has access to information about Directors' fees paid by other companies of a similar size and type. No views which are relevant to the formulation of the Directors' remuneration policy have been expressed to the Company by shareholders, whether at a general meeting or otherwise.

The Board's policy is that the remuneration of Non-Executive Directors should reflect the experience of the Board as a whole, be fair and be comparable with that of other relevant Venture Capital Trusts that are similar in size and have similar investment objectives and structures. Furthermore, the level of remuneration should be sufficient to attract and retain the Directors needed to oversee the Company properly and to reflect the specific circumstances of the Company, the duties and responsibilities of the Directors and the value and amount of time committed to the Company's affairs. The articles of association provide that the Directors shall be paid in aggregate a sum not exceeding £100,000 per annum. None of the Directors are eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits in respect of their services as Non-Executive Directors of the Company.

The articles of association provide that Directors shall retire and be subject to re-election at the first Annual General Meeting after their appointment and that any Director who has not been re-elected for three years shall retire and be subject to re-election at the Annual General Meeting. Also, any Director not considered independent shall retire each year and offer himself for re-election at the Annual General Meeting. The Directors' service contracts provide for an appointment of 12 months, after which three months' written notice must be given by either party. A Director who ceases to hold office is not entitled to receive any payment other than accrued fees (if any) for past services. The same policies will apply if a new Director is appointed.

Details of each Director's contract are shown below. The Chairman is paid more than the other Directors to reflect the additional responsibilities of that role. There are no other fees payable to the Directors for additional services outside of their contracts.

	Date of Contract	Unexpired term of contract at                31 March 2019	Annual rate of Directors' fees	Policy on payment of loss of office
			£
David Frank, Chairman	11-Nov-10	None	20,000	None
Simon Acland	12-Mar-09	None	17,500	None
Michael Stanes	21-Nov-12	None	17,500	None

Annual Remuneration Report

The remuneration policy described above was approved on 24 August 2017 at the Annual General Meeting and will remain unchanged for another three-year period. The Board will review the remuneration of the Directors in line with the VCT industry on an annual basis, if thought appropriate.  Otherwise, only a change in role is likely to incur a change in remuneration of any one Director.

Directors' Remuneration (audited information)

The fees paid to Directors in respect of the year ended 31 March 2019 and the prior year are shown below:

		Emoluments for the year ended   31 March 2019	Emoluments for the year ended 31 March 2018
		£	£
David Frank		20,000	20,000
Simon Acland		17,500	17,500
Michael Stanes		17,500	17,500
		55,000	55,000
Employers' NI contributions		1,102	1,210
Total Emoluments		56,102	56,210

None of the Directors are eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits in respect of their services as Non-Executive Directors of the Company.

Information required on executive Directors, including the Chief Executive Officer and employees, has been omitted because the Company has neither and therefore it is not relevant.

Directors' emoluments compared to payments to shareholders:

Unaudited		31 March 2019	31 March 2018
		£'000	£'000
Dividends paid:
·      Ordinary Shareholders		12,615	1,460
·      A Shareholders		-	2,196
·      C Shareholders		672	672
·      D Shareholders		685	685
Total paid to shareholders		13,972	5,013
Directors' emoluments		56	56

Directors' Share Interests (audited information)

At 31 March 2019 the Directors held no shares in the Company (2018: Nil). At 31 March 2019 Simon Acland's wife held 48,750 D Class Shares (2018: 48,750). There have been no changes in the holdings of the Directors or their connected parties between 31 March 2019 and the date of this report. There are no requirements or restrictions on Directors holding shares in the Company.

Company Performance

The following performance graphs compare the Net Asset Value of the Company's established share classes over the period from issue to 31 March 2019 with the total return from a notional investment in the FTSE Small-Cap index over the same period.

These charts have been prepared in accordance with part 3 to schedule 8 of the Companies Act 2006. The Company measures its performance against its target returns as detailed in the Strategic Report on page 6.

** The charts above do not take in to account the tax benefit of investing in a VCT.

Statement of Voting at the Annual General Meeting

The 2018 Remuneration Report was presented to the Annual General Meeting in August 2018 and received shareholder approval following a vote 99.9% of those voting were in favour and 4,899 shares abstained.

The 2017 Remuneration Policy was presented to the Annual General Meeting in August 2017 and received shareholder approval following a vote 99.1% in favour and 30,143 shares abstained.

Statement of the Chairman

At 31 March 2019 the Directors' fees are fixed at £20,000 for the Chairman and £17,500 for each of the other Directors. The remuneration of the Directors reflects the experience of the Board as a whole and is fair and comparable with that of other relevant Venture Capital Trusts that are similar in size and have similar investment objectives and structures.

On behalf of the Board

David Frank

Chairman 

17 June 2019

Independent auditor's report to the members of Triple Point Income VCT Plc

Opinion

We have audited the financial statements of Triple Point Income VCT Plc (the 'company') for the year ended 31 March 2019, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Shareholders' Equity, the Statement of Cash Flows, and notes to the financial statements, including a summary of significant accounting policies. We have not audited the non-statutory information set out on pages 54-61 which does not form part of the financial statements. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

In our opinion the financial statements:

•    give a true and fair view of the state of the company's affairs as at 31 March 2019 and of its profit for the year then ended;

•    have been properly prepared in accordance with IFRSs as adopted by the European Union; and

•    have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and the parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to principal risks, going concern and viability statement

We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs (UK) require us to report to you whether we have anything material to add or draw attention to:

·    the disclosures in the annual report that describe the principal risks and explain how they are being managed or mitigated;

·    the directors' confirmation in the annual report that they have carried out a robust assessment of the principal risks facing the group, including those that would threaten its business model, future performance, solvency or liquidity;

·    the directors' statement in the financial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting in preparing the financial statements and the directors' identification of any material uncertainties to the group and the parent company's ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements;

·    whether the directors' statement relating to going concern required under the Listing Rules in accordance with Listing Rule 9.8.6R(3) is materially inconsistent with our knowledge obtained in the audit; or

·    the directors' explanation in the annual report as to how they have assessed the prospects of the group, over what period they have done so and why they consider that period to be appropriate, and their statement as to whether they have a reasonable expectation that the group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The valuation of investments in the underlying renewables portfolio was the risk that had the greatest impact on our audit strategy and scope, including the allocation of resources in the audit.

Risk description

How our audit addressed the risk

The valuation of investments is a highly subjective accounting estimate where there is an inherent risk of management override arising from the investment valuations being prepared by the Investment Manager, who is remunerated based on the net asset value of the company. 90% of the underlying investment portfolio is represented by unquoted equity and loan stock. Further information is disclosed in notes 2 and 10 to the financial statements.

In respect of the investments valued using discounted cash flow models ("DCF") (representing 61% of the portfolio), we performed the following specific procedures: ·    Challenged the appropriateness of the key assumptions including discount factors, inflation, asset life, energy yield and power price applied by benchmarking to available industry data and consulting with our internal valuations specialists where appropriate ·    Vouched significant inputs to independent evidence where appropriate ·    Utilised spreadsheet analysis tools to assess the integrity of the model ·    Vouched cash and other net assets to bank statements and investee company management accounts ·    Considered the accuracy of forecasting by comparing previous forecasts to actual results with regards to the power generation assumptions included in the model ·    Formed an expectation of the acceptable range of valuations based on the range of reasonably alternative inputs and considered whether the valuations were appropriate and within the acceptable range For those investments valued using a methodology other than a DCF method (representing 39% of the portfolio), we performed the following procedures ·    Considered whether the valuation methodology is the most appropriate in the circumstances under the International Private Equity and Venture Capital Valuation ("IPEV") Guidelines and Accounting standards ·    Re-performed the calculation of the value attributable to the company ·    Verified and benchmarked key inputs and estimates to independent information and our own research ·    Reviewed and challenged the inputs to the valuation and assessed the impact of the estimation uncertainty concerning these assumptions.

Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. For planning, we consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements. Importantly, misstatements below this level will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole. 

The quantum of the materiality level applied during our audit is tabulated below.

Materiality measure	Purpose	Basis and Key considerations	Quantum 2018 (£)	Quantum 2019 (£)
Financial statement materiality	Assessing whether the financial statements as a whole present a true and fair view	2% of the value of non- current asset investments	£1,000,000	£1,140,000
Performance materiality	Lower level of materiality applied in performance of the audit when determining the nature and extent of testing applied to individual balances and classes of transactions.	Based on financial statement materiality, taking into consideration the risk and control environment and history of prior errors (if any)	£650,000	£855,000
Specific materiality - classes of transactions and balances which impact on the realised return	Assessing those classes of transactions, balances or disclosures for which misstatements of lesser amounts than materiality for the financial statements as a whole could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.	10% of revenue return before tax	£130,000	£220,000

Performance materiality is application of materiality at the individual account or balance level set at an amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.

On the basis of our risk assessment together with our assessment of the company's overall control environment, our judgment was that overall performance materiality for the company should be 75% (2018: 65%).

We agreed with the Audit Committee that we would report to the Audit Committee all audit differences in excess of £11,000, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.

An overview of the scope of our audit

We carried out a full scope audit. Our audit approach was developed by obtaining an understanding of the Company's activities and the overall control environment. Based on this understanding we assessed those aspects of the Company's transactions and balances which were most likely to give rise to a material misstatement.

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the directors made subjective judgements, for example in respect of the valuation of investments which have a high level of estimation uncertainty involved in determining the unquoted investment valuations.

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company which were contrary to applicable laws and regulations, including fraud. These included but were not limited to compliance with Companies Act 2006, the FCA listing and DTR rules, the principles of the UK Corporate Governance Code, industry practice represented by the SORP and IFRS accounting standards. We also considered the Company's qualification as a VCT under UK tax legislation as any breach of this would lead to the company losing various deductions and exemptions from corporation tax.

We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion.

We focused on laws and regulations that could give rise to a material misstatement in the company financial statements. Our tests included, but were not limited to:

·    agreement of the financial statement disclosures to underlying supporting documentation;

·    enquiries of management;

·    review of minutes of board meetings throughout the period; and

·    considering the effectiveness of control environment in monitoring compliance with laws and regulations.

There are inherent limitations in the audit procedures described above and the further removed noncompliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. As in all of our audits we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.

We have nothing to report in this regard.

In this context, we also have nothing to report in regard to our responsibility to specifically address the following items in the other information and to report as uncorrected material misstatements of the other information where we conclude that those items meet the following conditions:

·    Fair, balanced and understandable - the statement given by the directors that they consider the annual report and financial statements taken as a whole is fair, balanced and understandable and provides the information necessary for shareholders to assess the group's performance, business model and strategy, is materially inconsistent with our knowledge obtained in the audit; or

·    Audit committee reporting - the section describing the work of the audit committee does not appropriately address matters communicated by us to the audit committee; or

·    Directors' statement of compliance with the UK Corporate Governance Code - the parts of the directors' statement required under the Listing Rules relating to the company's compliance with the UK Corporate Governance Code containing provisions specified for review by the auditor in accordance with Listing Rule 9.8.10R(2) do not properly disclose a departure from a relevant provision of the UK Corporate Governance Code.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, the part of the directors' remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

·    the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

·    the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

·    adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

·    the parent company financial statements and the part of the directors' remuneration report to be audited are not in agreement with the accounting records and returns; or

·    certain disclosures of directors' remuneration specified by law are not made; or

·    we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities.  This description forms part of our auditor's report.

Other matters which we are required to address

Following the recommendation of the audit committee, we were appointed by the Audit Committee in November 2017 to audit the financial statements for the year ending 31 March 2018 and subsequent financial periods. The period of total uninterrupted engagement is 2 years, covering the years ending 31 March 2018 to 31 March 2019.

The non-audit services prohibited by the FRC's Ethical Standard were not provided to the company and we remain independent of the company in conducting our audit.

Our audit opinion is consistent with the additional report to the audit committee.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.  Our audit work has been undertaken so that we might state to the parent company's members those matters we are required to state to them in an auditor's report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Peter Smith (Senior Statutory Auditor)

For and on behalf of BDO LLP, Statutory Auditor

London

United Kingdom

17 June 2019

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

Statement of Comprehensive Income

For the year ended 31 March 2019

		Year ended				Year ended
		31 March 2019				31 March 2018
	Note	Rev.	Cap.	Total		Rev.	Cap.	Total
		£'000	£'000	£'000		£'000	£'000	£'000
Income
Investment income	4	2,923	-	2,923		2,620	-	2,620
Gain arising on the disposal of investments during the year	10	-	420	420		-	108	108
Gain arising on the revaluation of investments at the year end	10	-	5,049	5,049		-	2,096	2,096
Investment return		2,923	5,469	8,392		2,620	2,204	4,824
Expenses
Investment management fees	5	771	257	1,028		986	329	1,315
Financial and regulatory costs		37	-	37		42	-	42
General administration		184	-	184		191	153	344
Legal and professional fees	6	55	-	55		86	38	124
Directors' remuneration	7	55	-	55		56	-	56
Operating expenses		1,102	257	1,359		1,361	520	1,881
Profit before taxation		1,821	5,212	7,033		1,259	1,684	2,943
Taxation	8	(264)	35	(229)		(189)	99	(90)
Profit after taxation		1,557	5,247	6,804		1,070	1,783	2,853
Profit and total comprehensive income for the period		1,557	5,247	6,804		1,070	1,783	2,853
Basic and diluted earnings/(loss) per share (pence)
Ordinary Share	9	0.13p	(0.06p)	0.07p		0.73p	2.77p	3.50p
A Share	9	-	-	-		(0.22p)	1.74p	1.52p
C Share	9	5.53p	21.21p	26.74p		5.02p	6.32p	11.34p
D Share	9	3.93p	10.43p	14.36p		3.85p	3.94p	7.79p
E Share	9	0.86p	3.38p	4.24p		(0.92p)	(0.78p)	(1.70p)

The total column of this statement is the Statement of Comprehensive Income of the Company prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The supplementary revenue return and capital columns have been prepared in accordance with the Association of Investment Companies Statement of Recommended Practice (AIC SORP).

All revenue and capital items in the above statement derive from continuing operations.

This Statement of Comprehensive Income includes all recognised gains and losses.The accompanying notes are an integral part of these statements.

Balance Sheet

at 31 March 2019

Company No: 0642108

		31 March 2019		31 March 2018
	Note	£'000		£'000
Non-current assets
Financial assets at fair value through profit or loss	10	56,937		52,144
Current assets
Receivables	11	1,250		1,376
Cash and cash equivalents	12	6,188		18,448
		7,438		19,824
Total Assets		64,375		71,968
Current liabilities
Payables and accrued expenses	13	327		659
Current taxation payable		193		91
		520		750
Net Assets		63,855		71,218
Equity attributable to equity holders of the parent
Share capital	14	561		756
Share redemption reserve		-		2
Share premium		28,661		44,968
Special distributable reserve		26,887		23,968
Capital reserve		6,189		942
Revenue reserve		1,557		582
Total equity		63,855		71,218
Net asset value per share		n/a		n/a
Shareholder' funds
Ordinary Share	16	-		65.74p
A Share	16	-		-
C Share	16	134.58p		112.84p
D Share	16	117.34p		107.98p
E Share	16	102.56p		98.32p

The statements were approved by the Directors and authorised for issue on 17 June 2019 and are signed on their behalf by:

David Frank

Chairman

17 June 2019

The accompanying notes are an integral part of this statement.

Statement of Changes in Shareholders' Equity

For the year ended 31 March 2019

	Issued Capital	Share Redemption Reserve	Share Premium	Special Distributable Reserve	Capital Reserve	Revenue Reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Year ended 31 March 2019
Opening balance	756	2	44,968	23,968	942	582	71,218
Cancellation of shares	(195)	195	-	-	-	-	-
Cancellation of share premium	-	-	(16,307)	16,307	-	-	-
Dividends paid	-	-	-	(13,390)	-	(582)	(13,972)
Transfer on share redemption	-	(2)	-	2	-	-	-
Repayment of capital	-	(195)	-	-	-	-	(195)
Transactions with owners	(195)	(197)	(16,307)	2,919	-	(582)	(14,167)
Profit for the year	-	-	-	-	5,247	1,557	6,804
Other comprehensive income	-	-	-	-	-	-	-
Profit and total comprehensive income for the year	-	-	-	-	5,247	1,557	6,804
Balance at 31 March 2019	561	-	28,661	26,887	6,189	1,557	63,855
Capital reserve consists of:
Investment holding gains					8,671
Other realised losses					(2,482)
					6,189
Year ended 31 March 2018
Opening balance	518	2	16,307	27,301	(841)	1,192	44,479
Issue of new shares	289	-	29,441	-	-	-	29,730
Cost of issue	-	-	(780)	-	-	-	(780)
Purchase of own shares	(51)	-	-	-	-	-	(51)
Dividend paid	-	-	-	(3,333)	-	(1,680)	(5,013)
Transactions with owners	238	-	28,661	(3,333)	-	(1,680)	23,886
Profit for the year	-		-	-	1,783	1,070	2,853
Profit and total comprehensive income for the year	-		-	-	1,783	1,070	2,853
Balance at 31 March 2018	756	2	44,968	23,968	942	582	71,218
Capital reserve consists of:
Investment holding gains					3,250
Other realised losses					(2,308)
					942

The capital reserve represents the proportion of Investment Management fees charged against capital and realised/unrealised gains or losses on the disposal/revaluation of investments. The unrealised element of the capital reserve is not distributable. The special distributable reserve was created on court cancellation of the share premium account. The revenue, special distributable and realised capital reserves are distributable by way of dividend.

At 31 March 2019 the total reserves available for distribution are £25,962,000. This consists of the distributable revenue reserve net of the realised capital loss and the special distributable reserve.

Statement of Cash Flows

For the year ended 31 March 2019

Year ended			Year ended
	31 March 2019		31 March 2018
	£'000		£'000
Cash flows from operating activities
Profit before taxation	7,033		2,943
(Gain) arising on the disposal of investments during the period	(420)		(108)
(Gain) arising on the revaluation of investments at the period end	(5,049)		(2,096)
Cashflow generated by operations	1,564		739
Decrease/(increase) in receivables	126		(210)
(Decrease)/increase in payables	(332)		406
Cash flows from operating activities	1,358		935
Tax paid	(127)		(263)
Net cash flows from operating activities	1,231		672
Cash flow from investing activities
Purchase of financial assets at fair value through profit or loss	-		(11,001)
Proceeds of sale of financial assets at fair value through profit or loss	676		2,357
Net cash flows from investing activities	676		(8,644)
Cash flows from financing activities
Issue of new shares	-		28,950
Repayment of capital	(195)		(51)
Dividends paid	(13,972)		(5,013)
Net cash flows from financing activities	(14,167)		23,886
Net decrease/(increase) in cash and cash equivalents	(12,260)		15,914
Reconciliation of net cash flow to movements in cash and cash equivalents
Opening cash and cash equivalents	18,448		2,534
Net (decrease)/increase in cash and cash equivalents	(12,260)		15,914
Closing cash and cash equivalents	6,188		18,448

The accompanying notes are an integral part of these statements.

Unaudited Non-Statutory Analysis of - The Ordinary Share Fund

Statement of Comprehensive Income		Year ended				Year ended
		31 March 2019				31 March 2018
		Revenue	Capital	Total		Revenue	Capital	Total
		£'000	£'000	£'000		£'000	£'000	£'000
Investment income		23	-	23		382	-	382
Realised gain on investments		-	-	-		-	76	76
Unrealised gain on investments		-	-	-		-	639	639
Investment return		23	-	23		382	715	1,097
Investment management fees		9	3	12		(175)	(179)	(354)
Other expenses		-	-	-		(30)	(38)	(68)
Profit before taxation		32	3	35		177	498	675
Taxation		(6)	(14)	(20)		(34)	41	7
Profit/(loss) after taxation		26	(11)	15		143	539	682
Profit and total comprehensive income/(loss) for the period		26	(11)	15		143	539	682
Basic and diluted earnings/(loss) per share		0.13p	(0.06p)	0.07p		0.73p	2.77p	3.50p
Balance Sheet			Year ended				Year ended
		31 March 2019				31 March 2018
				£'000				£'000
Non-current assets
Financial assets at fair value through profit or loss				-				11,098
Current assets
Receivables				-				62
Cash and cash equivalents				-				1,868
Corporation tax				-				7
				-				1,937
Current liabilities
Payables				-				(240)
Corporation tax				-				-
Net assets				-				12,795
Equity attributable to equity holders				-				12,795
Net asset value per share				-				65.74p
Statement of Changes in Shareholders' Equity
			Year ended				Year ended
		31 March 2019					31 March 2018
				£'000				£'000
Opening shareholders' funds				12,795				13,573
Purchase of own shares				(195)				-
Profit for the period				15				682
Dividends paid				(12,615)				(1,460)
Closing shareholders' funds				-				12,795

Investment Portfolio	31 March 2019					31 March 2018
	Cost		Valuation			Cost		Valuation
	£'000	%	£'000	%		£'000	%	£'000	%
Unquoted qualifying holdings	-	-	-	-		8,376	70.10	9,367	72.25
Unquoted non-qualifying holdings	-	-	-	-		1,705	14.28	1,731	13.35
Financial assets at fair value through profit or loss	-	-	-	-		10,081	84.38	11,098	85.60
Cash and cash equivalents	-	-	-	-		1,868	15.62	1,868	14.40
	-	-	-	-		11,949	100.00	12,966	100.00
Qualifying Holdings
Unquoted
Solar
Digima Ltd	-	-	-	-		1,262	10.56	1,621	12.50
Digital Screen Solutions Ltd	-	-	-	-		2,020	16.91	2,062	15.90
Solar
Green Energy for Education Ltd	-	-	-	-		475	3.98	963	7.43
Hydroelectric Power
Elementary Energy Ltd	-	-	-	-		2,060	17.24	2,310	17.82
Green Highland Shenval Ltd	-	-	-	-		359	3.00	211	1.63
Gas Power
Green Peak Generation Ltd	-	-	-	-		2,200	18.41	2,200	16.97
	-	-	-	-		8,376	70.10	9,367	72.25
Non-Qualifying Holdings
Unquoted
Crematorium Management
Furnace Managed Services Ltd	-	-	-	-		620	5.19	646	4.98
Hydroelectric Power
Elementary Energy Ltd	-	-	-	-		285	2.39	285	2.20
SME Funding
Hydroelectric Power:
Broadpoint 2 Ltd	-	-	-	-		350	2.93	350	2.70
Other:
Funding Path Ltd	-	-	-	-		450	3.77	450	3.47
	-	-	-	-		1,705	14.28	1,731	13.35

Unaudited Non-Statutory Analysis of - The C Ordinary Share Fund

Statement of Comprehensive Income
		Year ended				Year ended
		31 March 2019				31 March 2018
		Revenue	Capital	Total		Revenue	Capital	Total
		£'000	£'000	£'000		£'000	£'000	£'000
Investment income		1,127	-	1,127		1,048	-	1,048
Unrealised gain on investments		-	2,913	2,913		-	907	907
Investment return		1,127	2,913	4,040		1,048	907	1,955
Investment management fees		(273)	(76)	(349)		(251)	(72)	(323)
Other expenses		(39)	-	(39)		(34)	-	(34)
Profit before taxation		815	2,837	3,652		763	835	1,598
Taxation		(72)	14	(58)		(88)	14	(74)
Profit after taxation		743	2,851	3,594		675	849	1,524
Profit and total comprehensive income for the period		743	2,851	3,594		675	849	1,524
Basic and diluted earnings per share		5.53p	21.21p	26.74p		5.02p	6.32p	11.34p
Balance Sheet			Year ended				Year ended
		31 March 2019				31 March 2018
				£'000				£'000
Non-current assets
Financial assets at fair value through profit or loss				17,415				14,590
Current assets
Receivables				83				187
Cash and cash equivalents				759				551
				842				738
Current liabilities
Payables				(103)				(87)
Corporation tax				(66)				(75)
Net assets				18,088				15,166
Equity attributable to equity holders				18,088				15,166
Net asset value per share				134.58p				112.84p
Statement of Changes in			Year ended				Year ended
Shareholders' Equity		31 March 2019					31 March 2018
				£'000				£'000
Opening shareholders' funds				15,166				14,314
Profit for the period				3,594				1,524
Dividends paid				(672)				(672)
Closing shareholders' funds				18,088				15,166

Investment Portfolio	31 March 2019					31 March 2018
	Cost		Valuation			Cost		Valuation
	£'000	%	£'000	%		£'000	%	£'000	%
Unquoted qualifying holdings	9,430	69.78	14,089	77.52		9,430	70.40	11,176	73.81
Unquoted non-qualifying holdings	3,325	24.60	3,326	18.30		3,414	25.49	3,414	22.54
Financial assets at fair value through profit or loss	12,755	94.38	17,415	95.82		12,844	95.89	14,590	96.35
Cash and cash equivalents	759	5.62	759	4.18		551	4.11	551	3.65
	13,514	100.00	18,174	100.00		13,395	100.00	15,141	100.00
Qualifying Holdings
Unquoted
Hydroelectric Power
Green Highland Allt Choire A Bhalachain (225) Ltd	3,130	23.16	3,642	20.04		3,130	23.37	3,504	23.14
Green Highland Allt Phocachain (1015) Ltd	2,000	14.80	2,590	14.25		2,000	14.93	2,103	13.89
Green Highland Renewables (Achnacarry) Ltd	4,300	31.82	7,857	43.23		4,300	32.10	5,569	36.78
	9,430	69.78	14,089	77.52		9,430	70.40	11,176	73.81
Non-Qualifying Holdings
Unquoted
Hydroelectric Power
Green Highland Allt Choire A Bhalachain (225) Ltd	289	2.14	289	1.59		318	2.37	318	2.10
Green Highland Allt Phocachain (1015) Ltd	122	0.90	122	0.67		143	1.07	143	0.94
Green Highland Renewables (Achnacarry) Ltd	26	0.19	27	0.15		65	0.49	65	0.43
SME Funding
Hydroelectric Power:
Broadpoint 2 Ltd	2,084	15.42	2,084	11.47		2,084	15.56	2,084	13.76
Broadpoint 3 Ltd	804	5.95	804	4.42		804	6.00	804	5.31
	3,325	24.60	3,326	18.30		3,414	25.49	3,414	22.54

Unaudited Non-Statutory Analysis of - The D Ordinary Share Fund

		31 March 2019				31 March 2018
		Revenue	Capital	Total		Revenue	Capital	Total
		£'000	£'000	£'000		£'000	£'000	£'000
Investment income		919	-	919		933	-	933
Unrealised gain on investments		-	1,475	1,475		-	598	598
Investment return		919	1,475	2,394		933	598	1,531
Investment management fees		(215)	(58)	(273)		(250)	(71)	(321)
Other expenses		(38)	-	(38)		(34)	-	(34)
Profit/(loss) before taxation		666	1,417	2,083		649	527	1,176
Taxation		(126)	11	(115)		(124)	14	(110)
Profit after taxation		540	1,428	1,968		525	541	1,066
Profit and total comprehensive income for the period		540	1,428	1,968		525	541	1,066
Basic and diluted earnings/(loss) per share		3.93p	10.43p	14.36p		3.85p	3.94p	7.79p
Balance Sheet		Year ended				Year ended
		31 March 2019				31 March 2018
				£'000				£'000
Non-current assets
Financial assets at fair value through profit or loss				14,735				13,723
Current assets
Receivables				821				1,093
Cash and cash equivalents				719				253
				1,540				1,346
Current liabilities
Payables				(82)				(165)
Corporation tax				(116)				(110)
Net assets				16,077				14,794
Equity attributable to equity holders				16,077				14,794
Net asset value per share				117.34p				107.98p
Statement of Changes in			Year ended				Year ended
Shareholders' equity		31 March 2019					31 March 2018
				£'000				£'000
Opening shareholders' funds				14,794				14,413
Profit for the period				1,968				1,066
Dividends paid				(685)				(685)
Closing shareholders' funds				16,077				14,794

Investment Portfolio	31 March 2019					31 March 2018
	Cost		Valuation			Cost		Valuation
	£'000	%	£'000	%		£'000	%	£'000	%
Unquoted qualifying holdings	11,240	84.23	13,349	86.39		10,899	81.68	11,532	82.51
Unquoted non-qualifying holdings	1,386	10.39	1,386	8.96		2,191	16.43	2,191	15.67
Financial assets at fair value through profit or loss	12,626	94.62	14,735	95.35		13,090	98.11	13,723	98.18
Cash and cash equivalents	719	5.38	719	4.65		253	1.89	253	1.82
	13,345	100.00	15,454	100.00		13,343	100.00	13,976	100.00
Qualifying Holdings
Unquoted
Hydroelectric Power
Elementary Energy	342	2.56	400	2.59		-	-	-	-
Green Highland Allt Garbh Ltd	2,710	20.31	2,710	17.54		2,710	20.31	2,710	19.39
Green Highland Allt Ladaidh (1148) Ltd	3,500	26.23	5,010	32.42		3,500	26.23	4,092	29.28
Green Highland Allt Luaidhe (228) Ltd	1,995	14.95	2,407	15.58		1,996	14.96	2,165	15.49
Green Highland Allt Phocachain (1015) Ltd	1,932	14.48	2,281	14.76		1,932	14.48	2,084	14.91
Green Highland Shenval Ltd	761	5.70	541	3.50		761	5.70	481	3.44
	11,240	84.23	13,349	86.39		10,899	81.68	11,532	82.51
Non-Qualifying Holdings
Unquoted
Hydroelectric Power
Green Highland Allt Luaidhe (228) Ltd	180	1.35	180	1.16		185	1.39	185	1.32
SME Funding
Hydroelectric Power:
Broadpoint 3 Ltd	1,206	9.04	1,206	7.80		1,206	9.04	1,206	8.63
Other:
Funding Path Ltd	-	-	-	-		800	6.00	800	5.72
	1,386	10.39	1,386	8.96		2,191	16.43	2,191	15.67

Unaudited Non-Statutory Analysis of - The E Ordinary Share Fund

Statement of Comprehensive Income
		Year ended				Year ended
		31 March 2019				31 March 2018
		Revenue	Capital	Total		Revenue	Capital	Total
		£'000	£'000	£'000		£'000	£'000	£'000
Investment income		855	-	855		225	-	225
Realised gain on investments		-	420	420		-	-	-
Unrealised gain/(loss) on investments		-	660	660		-	(113)	(113)
Investment return		855	1,080	1,935		225	(113)	112
Investment management fees		(460)	(126)	(586)		(483)	(137)	(620)
Other expenses		(86)	-	(86)		(67)	-	(67)
Profit/(loss) before taxation		309	954	1,263		(325)	(250)	(575)
Taxation		(59)	24	(35)		62	26	88
Profit/(loss) after taxation		250	978	1,228		(263)	(224)	(487)
Profit/(loss) and total comprehensive income for the period		250	978	1,228		(263)	(224)	(487)
Basic and diluted earnings/(loss) per share		0.86p	3.38p	4.24p		(0.92p)	(0.78p)	(1.70p)
Balance Sheet		Year ended				Year ended
		31 March 2019				31 March 2018
				£'000				£'000
Non-current assets
Financial assets at fair value through profit or loss				24,787				12,733
Current assets
Receivables				346				34
Cash and cash equivalents				4,711				15,776
Corporation tax				-				87
				5,057				15,897
Current liabilities
Payables				(143)				(167)
Corporation tax				(10)				-
Net assets				29,691				28,463
Equity attributable to equity holders				29,691				28,463
Net asset value per share				102.56p				98.32p
Statement of Changes in			Year ended				Year ended
Shareholders' equity		31 March 2019					31 March 2018
				£'000				£'000
Opening shareholders' funds				28,463				-
Issue of new shares				-				28,950
Profit for the period				1,228				(487)
Closing shareholders' funds				29,691				28,463

Investment Portfolio	31 March 2019					31 March 2018
	Cost		Valuation			Cost		Valuation
	£'000	%	£'000	%		£'000	%	£'000	%
Unquoted qualifying holdings	13,034	47.23	15,085	51.13		5,000	17.45	5,000	17.45
Quoted non-qualifying holdings	6,001	21.75	5,901	20.01		6,001	20.94	5,884	20.54
Unquoted non-qualifying holdings	3,852	13.96	3,801	12.89		1,875	6.55	1,849	6.46
Financial assets at fair value through profit or loss	22,887	82.94	24,787	84.03		12,876	44.94	12,733	44.45
Cash and cash equivalents	4,710	17.06	4,710	15.97		15,776	55.06	15,776	55.55
	27,597	100.00	29,497	100.00		28,652	100.00	28,509	100.00
Qualifying Holdings
Unquoted
Solar
Digima Ltd	1,262	4.57	1,612	5.46		-	-	-	-
Digital Screen Solutions Ltd	2,020	7.32	2,658	9.01		-	-	-	-
Green Energy for Education Ltd	475	1.72	1,127	3.82		-	-	-	-
Hydroelectric Power
Elementary Energy Ltd	1,718	6.23	2,009	6.81		-	-	-	-
Green Highland Shenval Ltd	359	1.30	256	0.87		-	-	-	-
Gas Power
Green Peak Generation Ltd	2,200	7.97	2,423	8.21		-	-	-	-
Vertical Growing
Perfectly Fresh Cheshire Ltd	5,000	18.12	5,000	16.95		5,000	17.45	5,000	17.45
	13,034	47.23	15,085	51.13		5,000	17.45	5,000	17.45
Non-Qualifying Holdings
Quoted
Investment Property
TP Social Housing REIT Plc Equity	6,001	21.75	5,901	20.01		6,001	20.94	5,884	20.54
	6,001	21.75	5,901	20.01		6,001	20.94	5,884	20.54
Unquoted
Crematorium Management
Furnace Managed Services Ltd	496	1.80	103	0.35		-	-	-	-
Hydroelectric Power
Elementary Energy Ltd	248	0.90	248	0.84		-	-	-	-
SME Funding
Hydroelectric Power:
Broadpoint 2 Ltd	750	2.72	750	2.54		400	1.40	400	1.40
Other:
Funding Path Ltd	2,200	7.97	2,200	7.46		950	3.32	950	3.32
Aeris Power Ltd	158	0.57	500	1.70		525	1.83	499	1.74
	3,852	13.96	3,801	12.89		1,875	6.55	1,849	6.46

Notes to the Financial Statements

1.      Corporate Information

The Financial Statements of the Company for the year ended 31 March 2019 were authorised for issue in accordance with a resolution of the Directors on 17 June 2019.

The Company was admitted for listing on the London Stock Exchange on 6 February 2008.

The Company is incorporated and domiciled in Great Britain and registered in England and Wales.  The address of its registered office, which is also its principal place of business, is 1 King William Street, London EC4N 7AF.

The Company is required to nominate a functional currency, being the currency in which the Company predominantly operates. The functional and reporting currency is sterling, reflecting the primary economic environment in which the Company operates.

The principal activity of the Company is investment. The Company's investment strategy is to offer combined exposure to cash or cash-based 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 Board receives regular reports from the Investment Manager and the Directors believe that, as no material uncertainties leading to significant doubt about going concern have been identified, it is appropriate to continue to apply the going concern basis in preparing the Financial Statements.

The Financial Statements of the Company for the year to 31 March 2019 have been prepared in accordance with International Financial Reporting Standards ("IFRS") adopted for use in the European Union and comply with the Statement of Recommended Practice: "Financial Statements of Investment Trust Companies and Venture Capital Trusts" (SORP) issued by the Association of Investment Companies (AIC) in November 2014 and updated in January 2017, in so far as this does not conflict with IFRS.

The Financial Statements are prepared on a historical cost basis except that investments are shown at fair value through profit or loss ("FVTPL").

The preparation of Financial Statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these judgements.

The judgements, 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 (under the heading Non-Current Asset Investments) and in note 10; and

·      the recognition or otherwise of accrued income on loan notes and similar instruments granted to investee companies, which are assessed in conjunction with the overall valuation of unlisted financial investments as noted above.

The key judgements made by Directors are in the valuation of non-current assets and the assessment of realised losses. The estimates and underlying assumptions are reviewed on an ongoing basis.  Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects that period or in the period of revision and future periods if the revision affects both current and future periods. The carrying value of investments is disclosed in note 10.

The Directors do not believe that there are any further key judgements made in applying accounting policies or estimates in respect of the Financial Statements.

These Financial Statements have been prepared in accordance with the accounting policies set out below which are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU).

These accounting policies have been applied consistently in preparing these Financial Statements.

New and amended standards and interpretations applied

IFRS 9 was issued to replace IAS 39 "Financial Instruments: Recognition and Measurement" and became effective for accounting periods beginning on or after 1 January 2018 and has been first adopted in these financial statements.

The Company has chosen not to restate comparatives.

The Company's financial instruments predominantly comprise equity and loan investments held at fair value through profit and loss. Having considered the classification of the Company's financial instruments by applying the business model test under IFRS 9, it has been concluded that it is still appropriate for the Company to hold its equity and loan investments at fair value through profit and loss.

IFRS 15 "Revenue from contracts with customers" was issued and became effective for accounting periods beginning on or after 1 January 2018. As the Company's investments are held at fair value through profit or loss, the introduction of IFRS 15 has had no impact on the reported results and financial position of the Company.

New and amended standards and interpretations not applied

At the date of authorisation of these financial statements, IFRS 16 "Leases" was issued but will not become effective until accounting periods beginning on or after 1 January 2019. As the Company's investments are held at fair value through profit or loss and any leases are held at investee company level, the introduction of IFRS 16 is not expected to have a material impact on the reported results and financial position of the Company.

Presentation of Statement of Comprehensive Income

In order to better reflect the activities of a Venture Capital Trust, and in accordance with the guidance issued by the Association of Investment Companies, supplementary information which analyses the Statement of Comprehensive Income between items of a revenue and capital nature has been presented alongside the Income Statement.

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 2019 was £63.8 million (2018: £71.2 million).

Non-Current Asset Investments

The Company invests in financial assets with a view to profiting from their total return through income and capital growth. These investments are managed, and their performance is evaluated on a fair value basis in accordance with the investment policy detailed in the Strategic Report on pages 6 and 7 and information about the portfolio is provided internally on that basis to the Company's Board of Directors.  Accordingly, upon initial recognition the investments are classified by the Company as "at fair value through profit or loss" in accordance with IFRS 9. They are included initially at fair value, which is taken to be their cost (excluding expenses incidental to the acquisition which are written off in the Statement of Comprehensive Income and allocated to "capital" at the time of acquisition). Subsequently the investments are valued at "fair value" which is the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. This is measured as follows:

·      unlisted investments are fair valued by the Directors in accordance with the International Private Equity and Venture Capital Valuation Guidelines.  Fair value is established by using measurements of value such as price of recent transactions, discounted cash flows, cost, and initial cost of investment; and

·      listed investments are fair valued at bid price on the relevant date.

The Board believe that those investments valued based on the transaction price are done so because the transaction price is still representative of fair value.

Where securities are classified upon initial recognition as at fair value through profit or loss, gains and losses arising from changes in fair value are included in the Statement of Comprehensive Income for the year as capital items in accordance with the AIC SORP 2017.  The profit or loss on disposal is calculated net of transaction costs of disposal.

Investments are recognised as financial assets on legal completion of the investment contract and are de-recognised on legal completion of the sale of an investment. Fair value is calculated on an unlevered, discounted cashflow basis or share of net assets in accordance with IFRS 13 and IFRS 9.

The Company has taken the exemption permitted by IAS 28 "Investments in Associates and Joint Ventures" and, upon initial recognition, will measure its investments in Associates at fair value with subsequent changes to fair value recognised in the income statement in the period of change.

Income

Investment income includes interest earned on bank balances and investment loans and includes income tax withheld at source. Dividend income is shown net of any related tax credit and is brought into account on the ex-dividend date.

Property income includes tax which is withheld at source.

Fixed returns on investment loans and debt are recognised on a time apportionment basis so as to reflect the effective yield, provided there is no reasonable doubt that payment will be received in due course.

Expenses

All expenses are accounted for on the accruals basis. Expenses are charged to revenue with the exception of the investment management exit fee which has been charged to the capital account and the investment management fee which has been charged 75% to the revenue account and 25% 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.

The Company's general expenses are split between the Share Classes using the net asset value of each Share Class divided by the total net asset value of the Company.

Taxation

Corporation tax payable is applied to profits chargeable to corporation tax, if any, at the current rate in accordance with IAS 12 "Income Taxes". The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue on the "marginal" basis as recommended by the AIC SORP 2017.

In accordance with IAS 12, deferred tax is recognised using the balance sheet method providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised.  Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. The Directors have considered the requirements of IAS 12 and do not believe that any provision should be made.

Financial Instruments                                                                                                                                     

The Company's principal financial assets are its investments and the accounting policies in relation to those assets are set out above. Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities.

Financial Instruments (continued)

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.

Financial assets and financial liabilities are recognised in the Company's Statement of Financial Position when the Company becomes a party to the contractual provisions of the instrument. At 31 March 2019 and 2018 the carrying amounts of cash and cash equivalents, receivables, payables, accrued expenses and short-term borrowings reflected in the financial statements are reasonable estimates of fair value in view of the nature of these instruments or the relatively short period of time between the original instruments and their expected realisation.

Issued Share Capital

Ordinary Shares, C Shares, D Shares and E shares are classified as equity because they do not contain an obligation to transfer cash or another financial asset. Issue costs associated with the allotment of shares have been deducted from the share premium account in accordance with IAS 32.

Cash and Cash Equivalents

Cash and cash equivalents representing cash available at less than 3 months' notice and subject to an insignificant risk of changes in fair value are classified at amortised cost.

Reserves

The revenue reserve (retained earnings) and capital reserve reflect the guidance in the AIC SORP 2017. The capital reserve represents the proportion of Investment Management fees charged against capital and realised/unrealised gains or losses on the disposal/revaluation of investments. The unrealised capital reserve, share redemption reserve and share premium reserve are not distributable. The special distributable reserve was created on court cancellation of the share premium account. The revenue, special distributable and realised capital reserves are distributable by way of dividend.

Consolidated Financial Statements

The Directors have concluded that the Company has control over two companies in which it has invested, as prescribed by IFRS 10 "Consolidated Financial Statements". The Company continues to satisfy the criteria to be regarded as an investment entity as defined in IFRS 10.

Subsidiaries are therefore measured at fair value through profit or loss, in accordance with IFRS 13 "Fair Value measurement" and IFRS 9 "Financial Instruments".

3.      Segmental Reporting

The Directors are of the opinion that the Company only has a single operating segment of business, being investment activity.  All revenues and assets are generated and held in the UK. 

4.           Investment Income

	Ord Shares	A Shares	C Shares	D Shares	E Shares		Total
	£'000	£'000	£'000	£'000	£'000		£'000
Year ended 31 March 2019
Loan stock interest	4	-	733	918	531		2,186
Dividends receivable	-	-	393	-	-		393
Interest receivable on bank balances	19	-	1	1	42		63
Other Investment income	-	-	-	-	123		123
Property income	-	-	-	-	158		158
	23	-	1,127	919	854		2,923

	Ord Shares	A Shares	C Shares	D Shares	E Shares		Total
	£'000	£'000	£'000	£'000	£'000		£'000
Year ended 31 March 2018
Loan stock interest	379	31	748	933	93		2,184
Dividends receivable	-	-	299	-	-		299
Interest receivable on bank balances	3	1	1	-	103		108
Other Investment income	-	-	-	-	9		9
Property income	-	-	-	-	20		20
	382	32	1,048	933	225		2,620

Disclosure by share class is unaudited

5.      Investment Management Fees

TPIM provides investment management and administration services to the Company under an Investment Management Agreement effective 6 February 2008 and deeds of variation to that agreement effective 21 November 2012, 28 October 2014 and 7 October 2016.

C shares: The agreement provides for an administration and investment management fee of 2% per annum of net assets payable quarterly in arrear for an appointment of at least six years from the admission of those shares. Subject to distributions to the C Shareholders exceeding the C Share hurdle of 100 pence per share, the Investment Manager will be entitled to a performance incentive fee of 20%.

D shares: The agreement provides for an administration and investment management fee of 2% per annum of net assets payable quarterly in arrear for an appointment of at least six years from the admission of those shares. Subject to distributions to the D Shareholders exceeding the D Share hurdle of 100 pence per share, the Investment Manager will be entitled to a performance incentive fee of 20%.

E shares: The agreement provides for an administration and investment management fee of 2% per annum of net assets payable quarterly in arrear for an appointment of at least six years from the admission of those shares. Subject to distributions to the E Shareholders exceeding the E Share hurdle of 100 pence per share, the Investment Manager will be entitled to a performance incentive fee of 20%.

To date there have been no performance fees paid.

An administration fee equal to 0.25% per annum of the Company's net assets is payable quarterly in arrear.

	Ord Shares	A Shares	C Shares	D Shares	E Shares		Total
	£'000	£'000	£'000	£'000	£'000		£'000
Year ended 31 March 2019
Investment Management fees	(12)	-	305	231	504		1,028
	(12)	-	305	231	504		1,028
Year ended 31 March 2018
Investment Management fees	191	3	287	285	549		1,315
	191	3	287	285	549		1,315

Fees paid to the Investment Manager for administrative and other services during the year were £177,000 (2018: £331,000). The investment Manager also received fees of £Nil (2018: £145,961) for services provided to investee companies. During the year TPIM waived management fees in the sum of £84,849 in relation to the Company's investment in Green Highland Shenval Ltd.

Disclosure by share class is unaudited

6.      Legal and Professional Fees

Legal and professional fees include remuneration paid to the Company's auditor, BDO LLP as shown in the following table:

	Ord Shares	A Shares	C Shares	D Shares	E Shares		Total
	£'000	£'000	£'000	£'000	£'000		£'000
Year ended 31 March 2019
Fees payable to the Company's auditor:
- for the audit of the financial statements	-	-	6	7	16		29
	-	-	6	7	16		29
Year ended 31 March 2018
Fees payable to the Company's auditor:
- for the audit of the financial statements	5	1	5	5	11		27
	5	1	5	5	11		27

Disclosure by share class is unaudited

7.      Directors' Remuneration

	Ord Shares	A Shares	C Shares	D Shares	E Shares		Total
	£'000	£'000	£'000	£'000	£'000		£'000
Year ended 31 March 2019
David Frank	-	-	5	5	10		20
Simon Acland	-	-	4	4	10		18
Michael Stanes	-	-	4	3	10		17
	-	-	13	12	30		55
Year ended 31 March 2018
David Frank	4	-	4	4	8		20
Simon Acland	3	-	4	3	8		18
Michael Stanes	3	1	3	4	7		18
	10	1	11	11	23		56

The only remuneration received by the Directors was their Directors' fees. The Company has no employees other than the Non-Executive Directors. The average number of Non-Executive Directors in the year was three. Full disclosure of Directors' remuneration is included in the Directors' Remuneration report.

Disclosure by share class is unaudited

8.      Taxation

	Ord Shares	A Shares	C Shares	D Shares	E Shares		Total
	£'000	£'000	£'000	£'000	£'000		£'000
Year ended 31 March 2019
Profit on ordinary activities before tax	35	-	3,652	2,083	1,263		7,033
Corporation tax @ 19%	7	-	694	396	240		1,337
Effect of:
Capital (gains) not taxable	-	-	(553)	(280)	(205)		(1,038)
Income received not taxable	-	-	(75)	-	-		(75)
Unrelieved tax losses arising in the year	-	-	-	-	(1)		(1)
Prior year adjustment	13	-	(7)	-	-		6
Tax charge/(credit)	20	-	59	116	34		229
Year ended 31 March 2018
Profit/(loss) on ordinary activities before tax	675	69	1,598	1,176	(575)		2,943
Corporation tax @ 20%	129	13	304	224	(110)		560
Effect of:
Capital (gains) not taxable	(136)	(18)	(173)	(114)	22		(419)
Income received not taxable	-	-	(57)	-	-		(57)
Disallowed expenditure	-	6	-	-	-		6
Tax charge	(7)	1	74	110	(88)		90

Capital gains and losses are exempt from corporation tax due to the Company's status as a Venture Capital Trust.

Disclosure by share class is unaudited

9.      Earnings/(loss) per Share

On 26 February 2019, the Ordinary Shares were cancelled. During the period to cancellation the profit per Ordinary Share was 0.07p (2018: 3.50p) and was based on a profit from ordinary activities after tax of £15,000 (2018: £682,000) and on the weighted average number of Ordinary Shares in issue during the period of 17,650,117 (2018: 19,463,120).

Earnings per C Share are 26.74p (2018: 11.34p) based on the profit after tax of 3,593,000 (2018: £1,524,000) and on the weighted average number of shares in issue during the period of 13,441,438 (2018: 13,441,438).

Earnings per D Share are 14.37p (2018: 7.79p) based on the profit after tax of £1,967,000 (2018: £1,066,000) and on the weighted average number of shares in issue during the period of 13,701,636 (2018: 13,701,636).

Earnings per E Share are 4.24p (2018: loss per share 1.70p) based on the profit after tax of £1,226,000 (2018: loss after tax £487,000) and on the weighted average number of shares in issue during the period of 28,949,575 (2018: 28,536,456).

With the exception of the Ordinary Shares, the weighted average number of shares are equal to the number of shares in issue at 31 March 2019.

Other than the cancellation of the Ordinary Shares there were no other changes to the number of shares in issue during the year.

There are no potentially dilutive capital instruments in issue and, therefore, no diluted return per share figures are included in these Financial Statements.

Disclosure by share class is unaudited

10.    Financial Assets at Fair Value through Profit or Loss

Investments

Fair Value Hierarchy:

Level 1: quoted prices on active markets for identical assets or liabilities. The fair value of financial instruments traded on active markets is based on quoted market prices at the balance sheet date. A market is regarded as active where the market in which transactions for the asset or liability takes place with sufficient frequency and volume to provide pricing information on an ongoing basis. The quoted market price used for financial assets held by the Company is the current bid price. These instruments are included in level 1.

Level 2: the fair value of financial instruments that are not traded on active markets is determined by using valuation techniques. These valuation techniques maximise the use of observable inputs including market data where it is available either directly or indirectly and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: the fair value of financial instruments that are not traded on an active market (for example, investments in unquoted companies) is determined by using valuation techniques such as discounted cash flows. If one or more of the significant inputs is based on unobservable inputs including market data, the instrument is included in level 3.

There have been no transfers between these classifications in the period. Any change in fair value is recognised through the Statement of Comprehensive Income.

The portfolio of the Company is classified as level 3, with the exception of the investment in Triple Point Social Housing REIT Plc which is classified as level 1. Further details of the types of investments are provided in the Investment Manager's Review on pages 16 to 20.

The Company's Investment Manager performs valuations of financial items for financial reporting purposes, including Level 3 fair values. Valuation techniques are selected based on the characteristics of each instrument, with the overall objective of maximising the use of market-based information.

Level 3 valuations include assumptions based on non-observable data with the majority of investments being valued on discounted cash flows or price of recent transactions.

Unconsolidated subsidiaries consist of Aeris Power Limited, included in investments as per the company's accounting policy. The Company has a loan investment totalling £157,500 in this company. The loan has an interest rate of 11.66%.  

Valuation techniques and unobservable inputs:
Sector	Valuation Techniques	Significant unobservable inputs	Inter relationship between significant unobservable inputs and fair value measurement
			Estimated fair value would increase/(decrease) if:
Hydroelectric Power	·    Discounted cash flows: The valuation model considers the present value of expected payment, discounted using a risk-adjusted discount rate.	·    Discount rate 7.25% (2018: 7.25%) ·    Inflation rate: OBR 5-year forecast, 2.75% long term (2018: 2.5%).	·    The discount rate was lower/(higher) ·    The inflation rate was higher/(lower)
Gas Power	·    Discounted cash flows: The valuation model considers the present value of expected payment, discounted using a risk-adjusted discount rate.	·    Discount rate 8.5% (2018: n/a) ·    Inflation rate: OBR 5-year forecast, 2.75% long term (2018: n/a).	·    The discount rate was lower/(higher) ·    The inflation rate was higher/(lower)
Solar	·    Discounted cash flows: The valuation model considers the present value of expected payment, discounted using a risk-adjusted discount rate.	·    Discount rate 6.75% (2018: 6.75%) ·    Inflation rate: OBR 5-year forecast, 2.75% long term(2018: 2.5%).	·    The discount rate was lower/(higher) ·    The inflation rate was higher/(lower)

IPEV issued updated valuations guidance in December 2018 and removed cost and price of recent investment as recognised primary valuation methodologies. No investments remain valued at cost, with the exception of Perfectly Fresh Cheshire Ltd. In the Board's opinion, having followed guidance in the IPEV guidelines, fair value is deemed to still be represented by the price on the date of transaction.

At the year end, the Company valued its Gas Power asset on a discounted cash flow basis for the first time, having been previously held at cost. This resulted in an uplift in valuation of £223,000 representing the decrease in construction risk. The Board consider the change appropriate as the company has been operational for just under 12 months. This has allowed forecasts to be assessed for reasonableness against the trading performance of the assets to date.

The Board considers the discount rates used reflect the current levels of risk and life expectancy of the investments and to be in line with market expectations. However, consideration has been given whether the effect of changing one or more inputs to reasonably possible alternative assumptions would result in a significant change to the fair value measurement. Each unquoted portfolio company has been reviewed in order to identify the sensitivity of the valuation methodology to using alternative assumptions.

On this basis, where discount rates have been applied to the unquoted investments, alternative discount rates have been considered, an upside case and a downside case. For the upside case, the assumptions were flexed 1% and for the downside scenarios the assumptions were flexed by 0.5%. No sensitivity has been performed on other key assumptions such as asset life and P50 because the directors believe the asset life assumptions and discount rate applied interact appropriately with one another to give an appropriate valuation.

The two alternative scenarios for each investment have been modelled with the resulting movements as follows:

Applying the downside alternative, the aggregate change in value of the unquoted investments would be a reduction in the value of the portfolio of £1,500,923 or 2.63% per cent. Using the upside alternative, the aggregate value of the unquoted investments would be an increase of £3,413,217 or 5.99% per cent.  

It is considered that, due to the prudent selection of discount rates by the board, the sensitivity discussed above provides the most meaningful potential impact of the possible changes across the portfolio.

The gain on disposal included in the Statement of Comprehensive Income relates to a redemption premium received from Furnace Managed Services Limited.

Movements in investments held at fair value through the profit or loss during the year to 31 March 2019 were as follows:

Year ended 31 March 2019
	Level 1 Quoted Investments
	Ord Shares	A Shares	C Shares	D Shares	E Shares	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Opening cost	-	-	-	-	6,001	6,001
Opening investment holding gains	-	-	-	-	(117)	(117)
Opening fair value	-	-	-	-	5,884	5,884
Investment holding gains	-	-	-	-	17	17
Closing fair value at 31 March 2019	-	-	-	-	5,901	5,901
Closing cost	-	-	-	-	6,001	6,001
Closing investment holding gains	-	-	-	-	(100)	(100)

Year ended 31 March 2019	Level 3 Unquoted Investments
	Ord Shares	A Shares	C Shares	D Shares	E Shares	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Opening cost	10,081	-	12,844	13,089	6,875	42,889
Opening investment holding gains	1,017	-	1,746	634	(26)	3,371
Opening fair value	11,098	-	14,590	13,723	6,849	46,260
Transfers between share classes	(11,098)	-	-	(457)	11,555	-
Disposal proceeds	-	-	(89)	(6)	(581)	(676)
Realised gains	-	-	-	-	420	420
Investment holding gains	-	-	2,913	1,475	643	5,031
Closing fair value at 31 March 2019	-	-	17,414	14,735	18,886	51,035
Closing cost	-	-	12,755	12,626	16,883	42,264
Closing investment holding gains	-	-	4,659	2,109	2,003	8,771

Year ended 31 March 2018	Level 1 Quoted Investments
	Ord Shares	A Shares	C Shares	D Shares	E Shares	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Opening cost	-	-	-	-	-	-
Opening investment holding gains	-	-	-	-	-	-
Opening fair value	-	-	-	-	-	-
Purchases at cost	-	-	-	-	6,001	6,001
Investment holding gains	-	-	-	-	(117)	(117)
					-
Closing fair value at 31 March 2018	-	-	-	-	5,884	5,884
Closing cost	-	-	-	-	6,001	6,001
Closing investment holding gains	-	-	-	-	(117)	(117)

Year ended 31 March 2018	Level 3 Unquoted Investments
	Ord Shares	A Shares	C Shares	D Shares	D Shares	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Opening cost	11,111	950	13,321	13,089	-	38,471
Opening investment holding gains	594	7	839	36	-	1,476
Opening fair value	11,705	957	14,160	13,125	-	39,947
Transfers between share classes	-	(1,446)	(400)	-	1,846	-
Purchases at cost	-	-	-	-	5,000	5,000
Disposal proceeds	(1,322)	(7)	(77)	-	-	(1,406)
Realised gains/(losses)	76	7	-	-	-	83
Investment holding losses	639	65	907	598	3	2,212
Reclassification from assets held for sale	-	424	-	-	-	424
Closing fair value at 31 March 2018	11,098	-	14,590	13,723	6,849	46,260
Closing cost	10,081	-	12,844	13,089	6,875	42,889
Closing investment holding losses	1,017	-	1,746	634	(26)	3,371

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 or losses on these items are treated as unrealised.

Further details of the types of investments are provided in the Investment Manager's review and investment portfolio on pages 16-27, and details of entities over which the VCT has significant influence are included on page 28.

Disclosure by share class is unaudited

11.    Receivables

	Ord Shares	A Shares	C Shares	D Shares	E Shares		Total
	£'000	£'000	£'000	£'000	£'000		£'000
31 March 2019
Other debtors	-	-	78	816	270		1,164
Prepayments and accrued income	-	-	5	5	76		86
	-	-	83	821	346		1,250
31 March 2018
Other debtors	60	-	185	1,091	-		1,336
Prepayments and accrued income	2	-	2	2	34		40
	62	-	187	1,093	34		1,376

Other debtors relate to interest receivable on investment loans.

12.    Cash and Cash Equivalents

Cash and cash equivalents comprise deposits with The Royal Bank of Scotland plc and Cater Allen Private Bank.   

13.         Payables and Accrued Expenses

	Ord Shares	A Shares	C Shares	D Shares	E Shares		Total
	£'000	£'000	£'000	£'000	£'000		£'000
31 March 2019
Payables	-	-	91	72	123		286
Other taxes	-	-	2	2	3		7
Accrued expenses	-	-	10	8	16		34
	-	-	103	82	142		327
31 March 2018
Payables	52	-	80	158	153		443
Other taxes	1	-	1	1	3		6
Accrued expenses	187	-	6	6	11		210
	240	-	87	165	167		659

Disclosure by share class is unaudited

14.    Share Capital

31 March 2019 31 March 2018 Ordinary Shares of £0.01 each Issued & Fully Paid No. Of Shares -   19,463,120 Par Value £'000 -   195 C Ordinary Shares of £0.01 each Issued & Fully Paid Number of shares 13,441,438 13,441,438 Par Value £'000 134 134 D Ordinary Shares of £0.01 each Issued & Fully Paid Number of shares 13,701,636 13,701,636 Par Value £'000 137 137 E Ordinary Shares of £0.01 each Issued & Fully Paid Number of shares 28,949,575 28,949,575 Par Value £'000 290 290 Total Shares of £0.01 each Issued & Fully Paid Number of shares 56,092,649 75,555,769 Par Value £'000 561 756

The rights attached to each class of share are disclosed in the Directors' Report on pages 30 and 31.

On 26 February 2019 the Ordinary Shares were cancelled.

15.    Financial Instruments and Risk Management

The Company's financial instruments comprise VCT qualifying investments and non-qualifying investments, cash balances and liquid resources including debtors and creditors. The Company holds financial assets in accordance with its investment policy detailed in the Strategic Report on pages 6 and 7.

The following table discloses the financial assets and liabilities of the Company in the categories defined by IFRS 9, "Financial Instruments".

Fixed Asset Investments (see note 10) are valued at fair value. Unquoted investments are carried at fair value as determined by the Directors in accordance with current venture capital industry guidelines. The fair value of all other financial assets and liabilities is represented by their carrying value on the balance sheet.

The Directors believe that where an investee company's enterprise value, which is equivalent to fair value, remains unchanged since acquisition that investment should continue to be held at cost less any loan repayments received. Where they consider the investee company's enterprise value has changed since acquisition, that should be reflected by the investment being held at a value measured using a discounted cash flow model or a recent transaction price.

In carrying out its investment activities, the Company is exposed to various types of risk associated with the financial instruments and markets in which it invests. The Company's approach to managing its risks is set out below together with a description of the nature of the financial instruments held at the balance sheet date.

	Total value	Financial assets held at amortised cost	Financial liabilities held at amortised cost	Designated at fair value through profit or loss
31 March 2019
Assets:
Financial assets at fair value through profit or loss	56,937	-	-	56,937
Receivables	1,164	1,164	-	-
Cash and cash equivalents	6,188	6,188	-	-
	64,289	7,352	-	56,937
Liabilities:
Other payables	286	-	286	-
Accrued expenses	34	-	34	-
	320	-	320	-
31 March 2018
Assets:
Financial assets at fair value through profit or loss	52,144	-	-	52,144
Receivables	1,336	1,336	-	-
Cash and cash equivalents	18,448	18,448	-	-
	71,928	19,784	-	52,144
Liabilities:
Other payables	443	-	443	-
Accrued expenses	210		210	-
	653	-	653	-

Market Risk

The Company's VCT qualifying investments are held in small and medium-sized unquoted investments which, by their nature, entail a higher level of risk and lower liquidity than investments in large quoted companies.  The Directors and Investment Manager aim to limit the risk attached to the portfolio as a whole by careful selection and timely realisation of investments, by carrying out rigorous due diligence procedures and by maintaining a spread of holdings in terms of industry sector and geographical location. The Board reviews the investment portfolio with the Investment Manager on a regular basis. Details of the Company's investment portfolio at the balance sheet date are set out on pages 21 to 27.

The Directors have considered the impact of an increase or decrease in the power price assumptions across the Hydro portfolio. The power prices have been stressed by 5%, 5% was chosen to represent a potential significant move in power prices. A 5% increase in power prices across the portfolio would lead to an increase of £417,507 in the value of the unquoted investment portfolio. A reduction of 5% in power prices would result in a decrease of £417,507 of the unquoted investment portfolio.

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 2019 by £569,000 A decrease of 1% would reduce the capital profits and net asset value by the same amount. A movement of 1% is used as a multiple to demonstrate the impact of varying changes on the capital profits and net asset value of the Company.

Interest Rate Risk

Some of the Company's financial assets are interest bearing, of which some are at fixed rates and some at variable rates. As a result, the Company is exposed to interest rate risk arising from fluctuations in the prevailing levels of market interest rates.

Investments made into qualifying holdings are part equity and part loan. The loan element of investments totals £12,239,000 (2018: £12,239,000) and is subject to fixed interest rates of between 21.6% and 29.5% for between 5 - 20 years and, as a result, there is no cash flow interest rate risk. As the loans are held in conjunction with equity and are valued in combination as part of the enterprise value, fair value risk is considered part of market risk.

The Company also has non-qualifying loan investments of £8,067,000 (2018: £8,272,000) which carry interest rates between 7.75 and 13.5% for between 5 - 15 years.

The amounts held in variable rate investments at the balance sheet date are as follows:    

	31 March 2019	31 March 2018
	£'000	£'000
Cash on deposit	6,188	18,448
	6,188	18,448

An increase in interest rates of 1% per annum would not have a material effect either on the revenue for the year or the net asset value at 31 March 2019. The Board believes that in the current economic climate a movement of 1% is a reasonable illustration.

Credit Risk

Credit risk is the risk that a counterparty will fail to discharge an obligation or commitment that it has entered into with the Company. The Investment Manager and the Board carry out a regular review of counterparty risk. The carrying value of the financial assets represent the maximum credit risk exposure at the balance sheet date.

	31 March 2019	31 March 2018
	£'000	£'000
Qualifying Investment loans	26,215	12,239
Non-Qualifying Investment loans	14,411	8,272
Cash on deposit	6,188	18,448
Receivables	1,164	1,336
	47,969	40,295

The Company's loan to Broadpoint 3 Limited was due for repayment on 31 March 2019. After discussions between the Board of the Company and that of Broadpoint 3 Limited, it was agreed to extend the due date on a rolling basis to be repayable on demand. Any impact of this extension has been considered in deriving the fair value of the instrument.

No other issues have been identified which would be cause for concern with regards the quality of credit for any other investee company.

The Company's bank accounts are maintained with The Royal Bank of Scotland plc ("RBS") and Cater Allen Private Bank. Should the credit quality or financial position of RBS or Cater Allen deteriorate significantly, the Investment Manager will move the cash holdings to another bank. Credit risk arising on unquoted loan stock held within unlisted investments is considered to be part of Market risk as disclosed above.

Liquidity Risk

The Company's financial assets include investments in unquoted equity securities which are not traded on a recognised stock exchange and which are illiquid. As a result, the Company may not be able to realise some of its investments in these instruments quickly at an amount close to their fair value in order to meet its liquidity requirements.

The Company's liquidity risk is managed on a continuing basis by the Investment Manager in accordance with policies and procedures laid down by the Board. The Company's overall liquidity risks are monitored by the Board on a quarterly basis.

The Board maintains a liquidity management policy where cash and future cash flows from operating activities will be sufficient to pay expenses. At 31 March 2019 cash amounted to £6,188,000 (2018: £18,448,000).

Foreign Currency Risk

The Company does not have exposure to material foreign currency risks.

16.    Net Asset Value per Share

The net asset value per C Ordinary Share is 134.58p (2018: 112.84p) and is based on Net Assets of £18,088,000 (2018: £15,166,000) divided by the 13,441,438 (2018: 13,441,438) C Ordinary Shares in issue.

The net asset value per D Ordinary Share is 117.34p (2018:107.98p) and is based on Net Assets of £16,077,000 (2018: £14,794,000) divided by the 13,701,636 (2018: 13,701,636) D Ordinary Shares in issue.

The net asset value per E Ordinary Share is 102.56p (2018: 98.32p) and is based on Net Assets of £29,610,000 (2018: £28,463,000) divided by the 28,949,575 (2018:28,949,575) A Ordinary Shares in issue.

17.    Relationship with Investment Manager                          

During the period, TPIM received £1,195,410 which has been expensed (2018: £1,640,212) for providing management and administrative services to the Company. At 31 March 2019 £284,451 was owing to TPIM (2018: £443,427). During the year TPIM waived management fees in the sum of £84,849 in relation to the Company's investment in Green Highland Shenval Ltd.

18.    Related Party Transactions

The Directors' Remuneration Report on pages 39 to 43 discloses the Directors' remuneration and shareholdings.

There were no other related party transactions during the period.

19.    Post Balance Sheet Events

There were no other post balance sheet events. 

20.    Dividends

Ordinary Shares:

The Company paid dividends to Ordinary Class Shareholders of £11,821,899, equal to 60.74p per share and £792,149 equal to 4.07 p per share on the 26 July 2018 and 14 December respectively. The final 1.00p of capital was repaid to Shareholders on 22 March 2019.

C Shares:

The Company paid a dividend to C Class Shareholders of £672,072, equal to 5p per share, on 26 July 2018. The Board has resolved to pay a fourth dividend of £672,072 equal to 5p per share on 25 July 2019 to shareholders on the register on 12 July 2019.        

D Shares:

The Company paid a dividend to D Class Shareholders of £685,082, equal to 5p per share, on 26 July 2018. The Board has resolved to pay a third dividend of £685,082 equal to 5p per share on 25 July 2019 to shareholders on the register on 12 July 2019.

Information

Details of Advisers

Secretary and Registered Office:  

Triple Point Investment Management LLP

1 King William Street

London

EC4N 7AF

Registered Number

07324448

FCA Registration number

659605

Investment Manager and Administrator

Triple Point Investment Management LLP

1 King William Street

London

EC4N 7AF

Tel: [phone]

Independent Auditor

BDO LLP

55 Baker Street

London

W1U 7EU

Solicitors

Howard Kennedy LLP

No. 1 London Bridge

London

SE1 9BG

Registrars

Neville Registrars Limited

Neville House

Steelpark Road

Halesowen

West Midlands

B62 8HD

VCT Taxation Advisers

Philip Hare & Associates LLP

First floor

4-6 Staple Inn

Holborn

London

WC1V 7QH

Bankers

The Royal Bank of Scotland plc                                      

54 Lime Street                                                      

London

EC3M 7NQ

Shareholder Information

The Company

Triple Point Income VCT plc (formerly TP70 2008(I) VCT plc) is a Venture Capital Trust. The Investment Manager is Triple Point Investment Management LLP.

Financial Calendar

The Company's financial calendar is as follows:

26 July 2019                Annual General Meeting.

November 2019     Interim report for the six months ending 30 September 2019 despatched.

June 2020                  Results for the year to 31 March 2020 announced; Annual Report and Financial                                                   Statements published.

Notice of Annual General Meeting

NOTICE is hereby given that the Annual General Meeting of Triple Point Income VCT plc will be held at 1 King William Street, EC4N 8AD at 10.00am on Friday 26 July 2019, for the following purposes:

Ordinary Business

1.  To receive, consider and adopt the Report of the Directors and Financial Statements for the year ended 31 March 2019 together with the Independent Auditors Report thereon (Ordinary Resolution).

2.  To approve the Directors' Remuneration Report for the year ended 31 March 2019 (Ordinary Resolution).

3.  To re-elect Simon Acland as a Director (Ordinary Resolution).

4.  To re-elect Michael Stanes as a Director (Ordinary Resolution).

5.  To re-appoint BDO LLP as auditor and determine their remuneration (Ordinary Resolution).

Special Business

6.  That the Company be and is hereby authorised in accordance with s701 of the Companies Act 2006 (the "Act") to make one or more market purchases (as defined in section 693(4) of the Act) of C Shares, D Shares and E Shares provided that:

(i)         the maximum aggregate number of C Shares authorised to be purchased is an amount equal to 10% of the issued C Shares as at the date of this Resolution;

(ii)         the maximum aggregate number of D Shares authorised to be purchased is an amount equal to 10% of the issued D Shares as at the date of this Resolution;

(iii)        the maximum aggregate number of E Shares authorised to be purchased is an amount equal to 10% of the issued E Shares as at the date of this Resolution;

(iv)        the minimum price which may be paid for a C Share, D Share or E Share is 1 pence;

(v)        the maximum price which may be paid for a C Share, D Share or E Share is an amount, exclusive of expenses, equal to 105 per cent. of the average of the middle market prices  for the C Shares, D Shares or E Shares as derived from the Daily Official List of the UK Listing Authority for the five business days immediately preceding the day on which that C Share, D Share or E Shares (as applicable) is purchased; and

(vi)        this authority shall expire either at the conclusion of the next Annual General Meeting of the Company or 15 months following the date of the passing of this Resolution, whichever is the first to occur (unless previously renewed, varied or revoked by the Company in general meeting), provided that the Company may, before such expiry, make a contract to purchase its own shares which would or might be executed wholly or partly after such expiry, and the Company may make a purchase of its own shares in pursuance of such contract as if the authority hereby conferred had not expired. (Special Resolution).

By Order of the Board

David Frank

Director

Registered Office:

1 King William Street

London

EC4N 7AF

                                                                                                                             17 June 2019               

Notes:

(i)         A member entitled to vote at the Meeting is entitled to appoint one or more proxies to attend and, on a poll, vote on his or her behalf. A proxy need not be a member of the Company.

(ii)        A form of proxy is enclosed. To be effective, the instrument appointing a proxy (together with the power of attorney or other authority, if any, under which it is signed, or a certified copy of such power or authority) must be deposited at or posted to the office of the registrars of the Company, Neville Registrars Limited, Neville House, Steelpark Road, Halesowen, West Midlands B62 8HD, so as to be received not less than 48 hours before the time fixed for the Meeting. Completion and return of the form of proxy will not preclude a member from attending or voting at the Meeting in person if he or she so wishes.

(iii)       Only those members registered in the Company's Register of Members 48 hours before the Meeting (or in the event of an adjournment, 48 hours prior to the adjourned meeting) or their duly appointed proxy, shall be entitled to attend or vote at the Meeting. Such shareholders may only cast votes in respect of Shares held by them at such time.

(iv)     Copies of the service contracts of each of the Directors,  the register of Directors' interests in shares of the Company kept in accordance with the Listing Rules and a copy of the Memorandum and Articles of Association of the Company, will be available for inspection at the registered office of the Company during usual business hours on any week day (Saturdays, Sundays and public holidays excepted) from the date of this notice until the date of the Annual General Meeting and at the place of the Annual General Meeting from at least 15 minutes prior to and until the conclusion of the Annual General Meeting. 

Form of Proxy

Relating to the 2019 Annual General Meeting of Triple Point Income VCT plc

I/We…………………………………………………………………………………………………………………………

BLOCK CAPITALS PLEASE - Name in which shares registered

of……………………………………………………………………………………………………………………………

hereby appoint…………………………………………………………………………………………………………….

or failing him/her the Chairman of the meeting to be my/our proxy and vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at 10.00am on Friday 26 July 2019, notice of which was sent to shareholders with the Directors' Report and the Accounts for the year ended 31 March 2019, and at any adjournment thereof. The proxy will vote as indicated below in respect of the resolutions set out in the notice of meeting:

Resolution number		For	Against	Withheld
1.	To receive, consider and adopt the Report of the Directors and the Financial Statements for the year ended 31 March 2019 together with the Independent Auditors Report.
2.	To approve the Directors' Remuneration Report.
3.	To re-elect Simon Acland as a Director.
4.	To re-elect Michael Stanes as a Director.
5.	To re-appoint BDO LLP as auditor and determine their remuneration.
6.	To authorise the Directors to make market purchases of the Company's own shares (Special Resolution).

Signed: ...................................................................... Dated: ................................................ ..2019

Notes

1.   A member wishing to appoint a person other than the Chairman of the meeting as proxy should insert the name and address of such person in the space provided.

2.   Use of the proxy form does not preclude a member from attending and voting in person.

3.   Where this form of proxy is executed by a corporation it must be either under its seal or under the hand of an officer or attorney duly authorised.

4.   If the proxy form is signed and returned without any indication as to how the proxy shall vote, the proxy will exercise his/her discretion as to whether and how he/she votes.

5.   To be valid, the proxy form must be received by Neville Registrars at Neville House, Steelpark Road, Halesowen, West Midlands B62 8HD no later than 48 hours before the commencement of the meeting.

 

END

 

 

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