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TP70 2008(ii) VCT (TPV2)

  Print   

Friday 27 November, 2009

TP70 2008(ii) VCT

Interim Results

RNS Number : 1986D
TP70 2008 (ii) VCT PLC
27 November 2009
 



INTERIM RESULTS



The directors of TP70 2008 (ii) VCT plc are pleased to announce its Interim Results for the six months ended 30 September 2009.



For further information, please contact :


Triple Point Investment Management LLP on 020 7201 8989








TP70 2008 (II) VCT plc

Summarised interim financial report (unaudited)

for the six months ended 30 September 2009





  TP70 2008 (II) VCT plc



Company Information


    

    

Directors                                        

Chad Murrin

Sir John Lucas-Tooth

Robert Reid    

Peter Hargreaves


    

Secretary and Registered Office

Triple Pont Investment Management LLP ("TPIM LLP")

4-5 Grosvenor Place

London, SW1X 7HJ



Company Registered Number

6421355



Solicitors

Howard Kennedy

19 Cavendish Square

London, W1A 2AW



Bankers

Royal Bank of Scotland PLC                        

54 Lime Street               

London, EC3M 7NQ                 

 

Allied Irish Bank

4 Tenterden Street

London

W1S 1TE



Investment Manager and Administrator

Triple Point Investment Management LLP

4-5 Grosvenor Place

London, SW1X 7HJ    



VCT Tax Advisor 

PricewaterhouseCoopers

1 Embankment Place

London, WC2N 6RH 


    

Independent Auditor

Grant Thornton UK LLP

1 Westminster Way

Oxford, OX2 0PZ



Registrars

Neville Registrars Limited

Neville House

18 Laurel Lane

Halesowen

West Midlands, B63 3DA


  TP70 2008 (II) VCT plc

Summarised interim financial report

for the six months ended 30 September 2009


Index                                                                                                        Page



Financial summary                                                                                            1


Chairman's statement                                                                                        1


Investment managers' review                                                                               3


Investment portfolio review                                                                                  4


Responsibility statement                                                                                    6


Summary statement of comprehensive income                                                     7


Summary balance sheet                                                                                    8


Summary statement of changes in equity                                                            9


Summary cash flow statement                                                                          10


Notes to the summarised financial report                                                           11-16



TP70 2008 (II) VCT plc

Summarised interim financial report

for the six months ended 30 September 2009



Financial summary


£'000 

Net assets

19,703 

Profit before tax

358 

Earnings per share

1.51p 

Net asset value per share

86.05p 


For a £1 investment per share investors, with a sufficient income tax liability in the relevant tax year, can expect to have received a 30p tax credit and a first dividend of 1.76p, which taken together with the current NAV of 86.05p per share totals 117.81p. 


Chairman's statement    


I am pleased to be writing to you to present the unaudited interim results for TP70 2008 (II) VCT plc ("the Company") for the six months ended 30 September 2009.


Investment Strategy 


The Company's investment strategy offers combined exposure to GAM's fund of hedge funds - GAM Diversity - and venture capital investments focused on companies with contractual revenues from financially secure counterparties.  30% of the Company's funds at cost were exposed to GAM Diversity 2.5XL. 


By March 2011 in order to meet the VCT-qualifying criteria, the Company's intention is that at least 70% of the original cost of investments will be committed to VCT-qualifying holdings with the balance of up to 30% exposed to GAM Diversity 2.5 XL. As detailed in the investment manager's review, the Board is pleased to note that during the period further VCT-qualifying investments were made. VCT-qualifying investments now account for some 51% of original cost and as such the company is on course to meet the 70% threshold. In the meantime, pending deployment into qualifying investments, 17% of funds by value are held in money market funds.


Results


I am pleased to report that the post-tax profits during the six months were £345,000. During the period the Company also paid its first dividend of £404,000 representing revenue profits from the audited financial statements to 31 March 2009 equivalent to 1.76p per share. As at 30 September 2009, the Net Asset Value per share stood at 86.05p.


Risks and Uncertainties


The Board believes that the principal risks facing the company over the remainder of the financial period are:

  • investment risk associated with exposure to GAM Diversity 2.5 XL

  • investment risk associated with undertaking VCT-qualifying investments 

  • failure to secure final approval as a VCT

 

The Board believe these risks are manageable and expected for a company with TP70 2008 (II) VCT plc's strategy. The Board continues to work closely with the Investment Manager to endeavour to minimise either the likelihood or potential impact of these risks, within the scope of the Company's established investment strategy.


Outlook


The Board is pleased with the progress the Company continues to make in building up its portfolio of VCT-qualifying holdings. It is confident that the Company is on track for VCT qualification, in particular with the strong deal pipeline, and furthermore with increasing signs of stability in the markets, that exposure to GAM Diversity 2.5XL will be profitable for the Company and shareholders. 


If you have any queries or comments, please do not hesitate to telephone Triple Point Investment Management LLP on 020 7201 8990 or email me at [email protected].


Chad Murrin

Chairman

19 November 2009

  TP70 2008 (II) VCT plc

Summarised interim financial report

for the six months  ended 30 September 2009


Investment manager's review


During the six months under review, TP70 2008(II) VCT plc (the "Company") has made steady progress with its investment strategy. The Company's objective is to deploy at least 70% of its funds into VCT-qualifying investments and, with the remainder of its funds, to offer leveraged exposure to GAM's flagship fund of hedge funds, Diversity, via GAM Diversity GBP 2.5XL.  


VCT-Qualifying Investments  


As at 1 April 2009, 46% of the Company's net asset value ("NAV") had been invested into HMRC-approved VCT-qualifying companies. I am pleased to report that since that date a further 10% of the Company's NAV has been invested in HMRC-approved VCT-qualifying companies with creditworthy and contractual revenues. These companies' activities comprise the provision of broadband satellite capacity (backed by a global bank guarantee) and the supply of medical gases to the NHS. Therefore the Company is well on the way to satisfying the 70%  invested in VCT qualifying investments test  by 31 March 2011 in order to secure VCT status. With over 16 months to go, the Company is confident it can achieve this target.


Non VCT-Qualifying Investments 


24% of the Company's funds by value are exposed to GAM Diversity 2.5XL, which gives the Company a leveraged exposure of approximately 2.5 times the value of GAM Diversity GBP. As at 30 September 2009, the value of the Company's exposure to GAM Diversity GBP 2.5XL had risen 6.96% since 31 March 2009. Although this rise is more conservative than some of the rises seen in the equity markets over the same period (the MSCI World Index has risen 27.54% and the FTSE All Share has gained 35.68%), Diversity aims to give non-correlated returns and, as such, this is a welcome positive contribution.  


Outlook 


The Manager's primary focus for the next six months is to continue deploying funds into creditworthy VCT-qualifying companies, thereby securing the Company's VCT tax status. There are a number of investments in the pipeline including companies that provide educational management services and services to the cinema industry


David Dick

Managing Partner

Triple Point Investment Management LLP

19 November 2009


ABOUT TRIPLE POINT INVESTMENT MANAGEMENT LLP


Triple Point Investment Management LLP (TPIM) is a specialist in tax-efficient investments. As well as managing several market-leading VCTs, TPIM offers investors a range of investment products that qualify for government sponsored tax reliefs including the Enterprise Investment Scheme (EIS) and Business Property Relief (BPR).


The Triple Point investment model - focused on capital security, liquidity and tax-enhanced returns - has been built around the group's capabilities in taxation, structured finance and investment to the benefit of every Triple Point product.


For more information on TPIM please call 020 7201 8990.

  TP70 2008 (II) VCT plc

Summarised interim financial report

for the six months  ended 30 September 2009


Investment portfolio review

Security

  Cost  

  Valuation

Activity

£'000 

%  

£'000 

%  

Qualifying holdings





Equity

3,533 

16.37 

3,533 

17.99 

Loan

7,522 

34.84 

7,522 

38.34 


11,055 

51.21 

11,055 

56.33 

Non-qualifying holdings





Equity

2,836 

13.14 

1,851 

9.43 

Other

4,262 

19.74 

4,262 

21.72 


7,098 

32.88 

6,113 

31.15 

Deposit as security for derivative

3,292 

15.25 

3,292 

16.77 

Impairment in value of derivative

-  

-  

(968)

(4.93)

Total holdings

21,445 

99.34 

19,492 

99.32 

Uninvested funds

141 

0.66 

141 

0.68 


21,586 

100.00 

19,633 

100.00 

Qualifying holdings





21 Century Cinema Ltd





Cinema digitalisation





Equity

300 

1.39 

300 

1.53 

Loan

700 

3.24 

700 

3.57 

Beam Carrier Trading Ltd





Provision of satellite capacity





Equity

281 

1.30 

281 

1.43 

Loan

282 

1.31 

282 

1.44 

Big Screen Digital Services Ltd





Cinema digitalisation





Equity

300 

1.39 

300 

1.53 

Loan

700 

3.24 

700 

3.57 

Cinematic Services Ltd 





Cinema digitalisation





Equity

300 

1.39 

300 

1.53 

Loan

700 

3.24 

700 

3.57 

Digima Ltd 





Cinema digitalisation





Equity

300 

1.39 

300 

1.53 

Loan

700 

3.24 

700 

3.57 

Digital Screen Solutions Ltd





Cinema digitalisation





Equity

300 

1.39 

300 

1.53 

Loan

700 

3.24 

700 

3.57 

Furnace Management Services Ltd





Crematorium management





Equity

273 

1.26 

273 

1.39 

Loan

637 

2.95 

637 

3.24 

Balance carried forward

6,473 

29.97 

6,473 

33.00 

  TP70 2008 (II) VCT plc

Summarised interim financial report

for the six months  ended 30 September 2009



Investment portfolio review (continued)

Security

  Cost  

  Valuation

Activity

£'000 

%  

£'000 

%  

Qualifying holdings (continued)




Balance brought forward

6,473 

29.97 

6,473 

33.00 

MGS NW Ltd





Medical gas supplies





Equity

317 

1.47 

317 

1.61 

Loan

521 

2.41 

521 

2.65 

MGS WM Ltd





Medical gas supplies





Equity

248 

1.15 

248 

1.26 

Loan

550 

2.55 

550 

2.80 

Per Port Services Ltd 





Servicing and supply of telephone equipment




Equity

124 

0.57 

124 

0.63 

Loan

186 

0.86 

186 

0.95 

Satellite Broadband Access Solutions Ltd




Provision of satellite capacity





Equity

261 

1.21 

261 

1.33 

Loan

610 

2.83 

610 

3.11 

WAN Solutions Ltd





Provision of virtual communications systems




Equity

183 

0.85 

183 

0.93 

Loan

428 

1.98 

428 

2.18 

Wide Area Network Services Ltd





Provision of virtual communications systems




Equity

213 

0.99 

213 

1.08 

Loan

498 

2.31 

498 

2.54 

Wide Area Network Solutions Ltd





Provision of virtual communications systems




Equity

133 

0.62 

133 

0.68 

Loan

310 

1.44 

310 

1.58 


11,055 

51.21 

11,055 

56.33 

Non-qualifying holdings





Henderson Liq Ass £ Inst

1,680 

7.78 

1,680 

8.56 

Money market fund





Ignis Liquidity Fund

1,680 

7.78 

1,680 

8.56 

Money market fund






3,360 

15.56 

3,360 

17.12 

Cranmer Lawrence Engineering Services Limited



Ambulance refurbishment





Equity

196 

0.91 

196 

1.00 

Loan

237 

1.10 

237 

1.21 

Lorngreen Limited





Investment





Equity

2,640 

12.23 

1,655 

8.43 

Loan

665 

3.08 

665 

3.39 


7,098 

32.88 

6,113 

31.15 

  TP70 2008 (II) VCT plc

Summarised interim financial report

for the six months  ended 30 September 2009


Directors' Responsibility Statement


The Directors have chosen to prepare the interim financial report for the company in accordance with International Financial Reporting Standards ("IFRS").


In preparing the summarised interim financial report for the 6 month period to 30 September 2009, the Directors confirm that to the best of their knowledge:

a)    the summarised financial report has been prepared in accordance with international accounting standard IAS34,"Interim Financial Reporting" issued by the International Accounting Standards Board;

b)    the interim management report includes a fair review of important events during the period and their effect on the financial report and description of principal risks and uncertainties for the remainder of the accounting period;

c)    the summarised financial report gives a true and fair view in accordance with IFRS of the assets, liabilities, financial position and of the profit or loss of the company for the period and comply with IFRS and the Companies Acts 1985 and 2006; and

d)    the interim management report includes a fair review of related party transactions and changes therein. There were no related party transactions during the period.

 

This interim financial report has not been audited or reviewed by the auditor. 




Chad Murrin

Chairman

19 November 2009

  TP70 2008 (II) VCT plc        

Summary statement of comprehensive income

for the six months  ended 30 September 2009




6 months ended


Period 08-Nov-07 to


Period 08-Nov-07 to



30 September 2009


30 September 2008


31 March 2009


Note

Rev.

Cap.

Total


Rev.

Cap.

Total


Rev.

Cap.

Total



£'000

£'000

£'000


£'000

£'000

£'000


£'000

£'000

£'000














Investment income

5

301 

-  

301 


386 

-  

386 


720 

-  

720 

Unrealised gain / (loss) on investments

10

-  

149 

149 


-  

(647)

(647)


-  

(1,134)

(1,134)

Derivative transaction

10

-  

158 

158 


-  

(645)

(645)


-  

(1,126)

(1,126)

Investment return


301 

307 

608 


386 

(1,292)

(906)


720 

(2,260)

(1,540)














Investment management fees

6

43 

130 

173 


49 

148 

197 


93 

279 

372 

Financial and regulatory costs


11 

-  

11 


-  


12 

-  

12 

General administration


-  


10 

-  

10 


21 

-  

21 

Legal and professional fees


17 

23 

40 


13 

-  

13 


32 

-  

32 

Directors' remuneration

7

20 

-  

20 


32 

-  

32 


52 

-  

52 

Operating expenses


97 

153 

250 


111 

148 

259 


210 

279 

489 

Profit / (loss) before taxation


204 

154 

358 


275 

(1,440)

(1,165)


510 

(2,539)

(2,029)

Taxation

8

(43)

30 

(13)


(27)

-  

(27)


(106)

58 

(48)

Profit / (loss) after taxation


161 

184 

345 


248 

(1,440)

(1,192)


404 

(2,481)

(2,077)

Other comprehensive income


-  

-  

-  


-  

-  

-  


-  

-  

-  

Total comprehensive income


161 

184 

345 


248 

(1,440)

(1,192)


404 

(2,481)

(2,077)

Earnings / (loss) per share (basic & diluted)

9

0.70p 

0.81p 

1.51p 


1.35p 

(7.81p)

(6.46p)


1.98p 

(12.18p)

(10.20p)




The earnings per share shown above is both basic and diluted as there are no potentially dilutive financial instruments in issue.


The column of this statement headed up "total" is the company's income statement prepared in accordance with International Financial Reporting Standards ("IFRS"). The supplementary revenue return and capital return columns have been prepared under guidance published by the Association of Investment Companies ("AIC").




The accompanying notes on pages 11 to 16 form an integral part of this interim financial report.

.

  TP70 2008 (II) VCT plc        

Summary balance sheet

as at 30 September 2009





30-Sep-09

30-Sep-08

31-Mar-09


Note


£'000 


£'000 


£'000 









Non Current Assets








Financial assets at fair value through profit and loss

10


19,492 


5,301 


13,440 

















Current assets:








Receivables



111 



2,523 

Cash and cash equivalents

11


141 


15,386 


3,962 




252 


15,394 


6,485 









TOTAL ASSETS



19,744 


20,695 


19,925 









Current Liabilities








Payables



15 


21 


115 

Current taxation payable 



26 


27 


48 




41 


48 


163 
















NET ASSETS


19,703 


20,647 


19,762 
















EQUITY








Share capital



229 


229 


229 

Capital redemption reserve

12




Share premium



-  


21,781 


-  

Special distributable reserve



21,608 


-  


21,608 

Capital reserve



(2,297)


(1,440)


(2,481)

Revenue reserve



161 


75 


404 

Total equity



19,703 


20,647 


19,762 




 


 


 

Net asset value per share (pence)

13


86.05p 


90.17p 


86.30p 



This financial report was agreed by the board and authorised for issue on 19 November 2009 and was signed on its behalf by:




Chad Murrin

Director



The accompanying notes on pages 11 to 16 form an integral part of this interim financial report.

  TP70 2008 (II) VCT plc    

Summary statement of changes in equity

for the six months  ended 30 September 2009



Issued Capital

Share Redem. Reserve

Share Prem.

Special Distrib. Reserve

Capital Reserve

Revenue Reserve

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000

6 months ended 30 September 2009





Opening balance

229 

-  

21,608 

(2,481)

404 

19,762 

Profit for the period

-  


-  


184 

161 

345 

Dividends paid

-  

-  

-  

-  

-  

(404)

(404)

Balance at 30 September 2009

229 

-  

21,608 

(2,297)

161 

19,703 


 

 

 

 

 

 

 

Profit for the period is made up of:







Recognised income





-  

301 

301 

Recognised expenses





(153)

(97)

(250)

Taxation





30 

(43)

(13)

Recognised changes in the fair value of investments


307 

-  

307 






184 

161 

345 

Period from 8 November 2007 to 30 September 2008




Issue of share capital

231 


22,818 

-  

-  

-  

23,049 

Share issue costs

-  


(1,037)

-  

-  

-  

(1,037)

Purchase of own shares

(2)

-  

-  

-  

(173)

(173)

Profit / (loss) for the period

-  


-  

-  

(1,440)

248 

(1,192)

Balance at 30 September 2008

229 

21,781 

-  

(1,440)

75 

20,647 


 

 

 

 

 

 

 

Profit / (loss) for the period is made up of:






Recognised income





-  

386 

386 

Recognised expenses





(148)

(111)

(259)

Taxation





-  

(27)

(27)

Recognised changes in the fair value of investments


(1,292)

-  

(1,292)






(1,440)

248 

(1,192)

Period from 8 November 2007 to 31 March 2009




Issue of share capital

231 


22,818 

-  

-  

-  

23,049 

Share issue costs

-  


(1,037)

-  

-  

-  

(1,037)

Purchase of own shares

(2)

-  

(173)

-  


(173)

Cancellation of share premium

-  


(21,781)

21,781 

-  

-  

-  

Profit / (loss) for the period

-  


-  


(2,481)

404 

(2,077)

Balance at 31 March 2009

229 

-  

21,608 

(2,481)

404 

19,762 


 

 

 

 

 

 

 

Profit / (loss) for the period is made up of:






Recognised income





-  

720 

720 

Recognised expenses





(279)

(210)

(489)

Taxation





58 

(106)

(48)

Recognised changes in the fair value of investments


(2,260)

-  

(2,260)






(2,481)

404 

(2,077)



The accompanying notes on pages 11 to 16 form an integral part of this interim financial report.

  TP70 2008 (II) VCT plc        

Summary cash flow statement

for the six months  ended 30 September 2009



6 months

Period

Period


ended

08-Nov-07 to

08-Nov-07 to


30-Sep-09

30-Sep-08

31-Mar-09



£'000 


£'000 


£'000 

Cash flows from operating activities







Loss before taxation


358 


(1,165)


(2,029)

Unrealised (gain) / loss on investments


(307)


1,292 


2,260 

Cashflow generated by operations


51 


127 


231 

Decrease / (increase) in receivables


2,412 


(8)


(2,523)

(Increase) / decrease in payables


(100)


21 


115 

Taxation paid


(35)


-  


-  

Net cash flows from operating activities


2,328 


140 


(2,177)








Cash flow from investing activities







Purchase of financial assets at fair value through profit and loss account


(6,195)


(6,593)


(15,700)

Sales proceeds of financial assets at fair value through profit and loss account


450 


-  


-  

Net cash flows from investing activities


(5,745)

-  

(6,593)

-  

(15,700)








Cash flows from financing activities







Proceeds from issue of share capital


-  


23,049 


23,049 

Share issue expenses


-  


(1,037)


(1,037)

Buyback of own shares


-  


(173)


(173)

Dividends paid


(404)


-  


-  

Net cash flows from financing activities


(404)


21,839 


21,839 

Net (decrease) / increase in cash and cash equivalents


(3,821)


15,386 


3,962 















Reconciliation of net cash flow to movements in cash and cash equivalents







Cash and cash equivalents at 1 April 2009


3,962 


-  


-  

Net (decrease) / increase in cash and cash equivalents


(3,821)


15,386 


3,962 

Cash and cash equivalents at 30 September 2009


141 


15,386 


3,962 




The accompanying notes on pages 11 to 16 form an integral part of this interim financial report.

  TP70 2008 (II) VCT plc

Notes to the summarised interim financial report

for the six months  ended 30 September 2009



1. Corporate Information    

                    

The interim summarised financial report of the company for the 6 months ended 30 September 2009 was authorised for issue in accordance with a resolution of the directors on 19 November 2009.


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


The company is incorporated and domiciled in Great Britain. The address of its registered office, which is also its principal place of business, is 4-5 Grosvenor Place, London, SW1X 7HJ.


The company's summarised financial report is presented in Pounds Sterling (£) which is also the functional currency of the company.


The financial information set out in this interim report does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985.  


The principal activity of the company is investment. The company's investment strategy is to offer combined exposure to GAM Diversity Inc (GAM's fund of hedge funds) and venture capital investments focused on companies with contractual revenues from financially secure counterparties.

                                

                                

                                

2. Basis of preparation and accounting policies            

                                

Basis of preparation

                        

The summarised interim financial report of the Company for the period to 30 September 2009 has been prepared in accordance with IAS 34: Interim Financial Reporting and other accounting policies consistent with IFRS adopted for use in the European Union and therefore complies with the articles of the EU IAJ regulation and with the statement of recommended practice: Financial Statements of Investment Trust Companies (SORP) issued by the Association of Investment Companies ("AIC") in January 2003 and revised in December 2005, in so far as this does not conflict with IFRS. The information in this document does not include all of the disclosures required by IFRS and the SORP in full annual financial statements. The interim financial information has been prepared applying the accounting policies and presentation that will be adopted in the preparation of the company's financial statements for the period ending 31 March 2009.


The summarised financial report has been prepared on a historical cost basis except that investments are shown at fair value through profit and loss. 


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


The key judgements made by directors are in the valuation of non-current assets where they accept the independent expert valuation of professional valuers and the independently prepared summary of market prices for equity investments. 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.

  TP70 2008 (II) VCT plc 

Notes to the summarised interim financial report

for the six months ended 30 September 2009



2. Basis of preparation and accounting policies (continued)


Presentation of income statement


In order to reflect better the activities of an investment trust company, and in accordance with the guidance issued by the AIC, supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. In accordance with the Company's status as a UK investment company under section 266 of the Companies Act 1985, net capital returns may not be distributed by way of dividend.  


Non-current Asset Investments


The Company invests in financial assets with a view to profiting from their total return through income and capital growth. These investments are managed and their performance is evaluated on a fair value basis in accordance with a documented investment strategy, and information about the portfolio is provided internally on that basis to the company's board of directors. Accordingly upon initial recognition the investments and loan notes are designated as "at fair value through the profit and loss" ("FVTPL"). 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 income statement and allocated to "capital" at the time of acquisition). Subsequently the investments are valued at "fair value" which is measured as follows:

Unlisted investments are fair valued by the Directors in accordance with the International Private Equity and Venture Capital Valuation Guidelines.  

Listed investments are fair valued at bid price.

    

Where securities are designated upon initial recognition as at fair value through the profit or loss, gains and losses arising from changes in fair value are included in net profit or loss for the period as a capital item in accordance with the AIC SORP. The profit or loss on disposal is calculated net of transaction costs of disposal.


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


It is not the Company's policy to exercise control or significant influence over investee companies. Therefore, in accordance with IAS 27 Consolidated and separate financial statements, those undertakings in which the Group holds more than 20% of the equity are not regarded as associated undertakings.


Income


Investment income includes interest earned on bank balances and money market securities and includes income tax withheld at source. Dividend income is shown net of any related tax credit.


Dividends receivable are brought into account on the ex-dividend date. Fixed returns on debt and money market securities 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 fee, which has been charged 25% to the revenue account and 75% to the capital account to reflect, in the Directors' opinion, the expected long term split of returns in the form of income and capital gains respectively from the investment portfolio.


  TP70 2008 (II) VCT plc

Notes to the summarised interim financial report

for the six months  ended 30 September 2009

                        


2. Basis of preparation and accounting policies (continued)


Taxation


Corporation tax payable is applied to profits chargeable to corporation tax, if any, at the current rate. 


Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less tax, with the exception that deferred tax assets are recognised only to the extent that the Directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing can be deducted. 


Financial instruments


The Company's principal financial assets are its investments and the policies in relation to those assets are set out above. Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities. Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.


Derivatives are classified at fair value through profit and loss.


Provisions                            

                                

A provision is recognised when the Company has a legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, expected future cash flows are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. 

                                

Where the Company expects some or all of a provision to be reimbursed, for example under an insurance policy, the reimbursement is recognised as a separate asset but only when recovery is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement. Where discounting is used, the increase in the provision due to unwinding the discount is recognised as a finance cost. 


Issued share capital


Ordinary shares are classified as equity because they do not contain an obligation to transfer cash or another financial asset.



Cash


Cash represents cash available at less than 3 months notice.


Other receivables


Other receivables are recognised at fair value on initial recognition and subsequently at amortised cost. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount.


Other payables


Other payables are recognised at fair value on initial recognition and subsequently at amortised cost.

  TP70 2008 (II) VCT plc

Notes to the summarised interim financial report

for the six months  ended 30 September 2009



Segment reporting


A segment is a distinguishable component of the group that is engaged in generating income and expenses (business segment) which is subject to risks and rewards that are different from those of other segments.




    Seasonality of operations

                    

The Company's operations are not seasonal.




    Segmental reporting

                    

The Company currently has only one class of business, investment activity, and its only geographical segment is Europe.




5    Investment Income


6 months

Period from

Period from


ended

07-Nov-07 to

07-Nov-07 to


30-Sep-09

30-Sep-08

31-Mar-09



£'000 


£'000 


£'000 

Income from short term investments


300 


107 


336 

Bank interest



279 


384 

Total


301 


386 


720 




6     Investment management fees

                    

Triple Point Investment Management LLP provides investment management and administration services to the Company under an Investment Management Agreement dated 14 December 2007 which runs for a period of 6 years and may be terminated at any time thereafter by not less than twelve months' notice given by either party and which provides for an administration and investment management fee of 1.75% per annum of net assets calculated and payable quarterly in arrears.




7     Directors' remuneration


6 months

Period from

Period from


ended

08-Nov-07 to

08-Nov-07 to


30-Sep-09

30-Sep-08

31-Mar-09



£'000 


£'000 


£'000 

Chad Murrin (Chairman)



12 


20 

Sir John Lucas-Tooth



10 


16 

Robert Reid



10 


16 

Peter Hargreaves


-  


-  


-  

Total


20 


32 


52 


  TP70 2008 (II) VCT plc

Notes to the summarised interim financial report

for the six months  ended 30 September 2009



8     Taxation on ordinary activities


6 months

Period from

Period from


ended

07-Nov-07 to

07-Nov-07 to



£'000 


£'000 


£'000 

Loss on ordinary activities before tax


358 


(1,165)


(2,029)

Add back capital (gains) / losses


(307)


1,292 


2,260 

Taxable income


51 


127 


231 

UK corporation tax at 24% (21%)


13 


27 


48 


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




9    Earnings per share


The earnings per share is based on a comprehensive income after tax of £345,000 and on the weighted average number of shares in issue during the period of 22,898,626.




10    Financial assets at fair value through profit and loss account


30-Sep-09

30-Sep-08

31-Mar-09


Quoted

Unquoted

Total

Unquoted

Unquoted


£'000 

£'000 

£'000 


£'000 


£'000 

Valuation at 1 April 2009

-  

13,440 

13,440 


-  


-  

Purchases at cost

3,360 

2,835 

6,195 


6,593 


15,700 

Disposal proceeds

(450)

-  

(450)





Unrealised gain / (loss) on revaluation

-  

307 

307 


(1,292)


(2,260)

Valuation at 30 September 2009

2,910 

16,582 

19,492 


5,301 


13,440 

Cost at 30 September 2009

3,360 

18,085 

21,445 


6,593 


15,700 

Unrealised loss at 30 September 2009

(450)

(1,503)

(1,953)


(1,292)


(2,260)


The company holds 50% of the issued share capital of Lorngreen Ltd, but is accounting for this in accordance with IAS 27 as it does not exercise control.


Included in unquoted investments is a deposit of £3,292,000 with Julius Baer, which is the subject of the derivative transaction described in note 14.


Further details of these investments are provided in the Investment portfolio review.




11     Cash and cash equivalents


Cash and cash equivalents comprise deposits with Royal Bank of Scotland plc and Allied Irish Bank.



  TP70 2008 (II) VCT plc

Notes to the summarised interim financial report

for the six months  ended 30 September 2009


12    Share Capital


30-Sep-09

30-Sep-08

31-Mar-09



£'000 


£'000 


£'000 

Ordinary Shares of 1p







Authorised







No. Of Shares

50,000,000 

50,000,000 

50,000,000 

Par Value £'000


500 


500 


500 

Issued & Fully Paid







No. Of Shares

22,898,626 

22,898,626 

22,898,626 

Par Value £'000


229 


229 


229 




13    Net asset value per share


The calculation of net asset value per share is based on net assets of £19,703,000 divided by the 22,898,626 shares in issue.



14    Derivative transaction


The company has made a payment of £3,292.000 to Julius Baer and in return will receive back an equivalent sum plus or minus the performance in the intervening time of GAM Diversity 2.5XL. The transaction will run for a maximum of 5 years but may be terminated by the company at any time before then.



15    Commitments and contingencies                    

                        

The company has no outstanding commitments or contingent liabilities.




16        Related party transactions                        


Peter Hargreaves, a director of the Company, has an equity interest in Triple Point LLP (TPLLP). TPLLP in turn has a controlling interest in Triple Point Investment Management LLP (TPIMLLP).  During the period, TPIMLLP received £173,000 for providing management and administrative services to the Company.




17    Post balance sheet events


There have been no significant post balance sheet events.

                    

    

                        





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