PU11.L Regulatory News (PU11)

HIGHLIGHTS

· Fund raising of £30.2m completed, the largest raising by a planned exit VCT in the 2014/2015 tax year.

· Substantial proportion of funds raised now deployed in high quality projects generating an attractive return.

· Strong pipeline of potential deals at the Company's first anniversary.

CHAIRMAN'S STATEMENT

Introduction

I am pleased to present to you as Chairman the first annual report for Puma VCT 11 plc for the period to 29 February 2016, which was the Company's first period of investment following the completion of the fund raising in June 2015.

The Company was incorporated and launched its Prospectus in October 2014. It raised £30.2 million, significantly more than any other planned exit VCT in the 2014/2015 tax year. The Investment Manager, Puma Investments, is a member of the Shore Capital Group which now has over £130 million of VCT money under management in this and other Puma VCTs and a well-established, experienced VCT team to manage the Company's deal flow.

Investments

During the period, the Company completed a series of investments, including first charge secured loans and subscription for investment grade bonds, for a total of £29.7 million. Details of these investments can be found in the Investment Manager's report below.

The Investment Manager has continued to review a number of suitable investment opportunities, generated by a strong pipeline, and expects, in particular, to make qualifying investments during the coming year to ensure the Company is on course to meet its HMRC qualifying target.

VCT qualifying status

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

Results

The Company reported a small loss of £145,000 for the period, a loss of 0.7p per ordinary share (calculated on the weighted average number of shares). This is a result of the running costs of the Company exceeding the income during this initial period whilst the Company has continued to review suitable investment opportunities. The Net Asset Value per ordinary share ("NAV") at 29 February 2016 was 96.18p. In line with the Company's dividend policy as stated in the Prospectus, no dividend was declared in respect of this first accounting period.

Given the deployment of funds achieved to date, we expect the net asset value per share to grow in the current period provided that all investments and loans the Company has made perform without problems. The Company expects (although there is no guarantee) to pay a regular annual dividend commencing in April 2017. From then on, the Company hopes to achieve an average dividend payment equivalent to 5p per annum (including the April 2017 dividend) over the rest of the life of the Fund.

Outlook

We are pleased, at the Company's first anniversary, that the Investment Manager has invested a substantial proportion of funds raised. Although there is increased demand from smaller companies seeking finance, the availability of bank finance continues to be restricted. Moreover the terms on which target companies can raise finance from banks remain problematic. This continues to drive the demand for our offering and should also allow us to continue to secure favourable terms when we offer finance. There are many suitable companies which are well-managed, in good market positions, and which can offer security and need our finance. We therefore believe the Company is strongly positioned to select a portfolio which can deliver attractive returns to shareholders in the medium to long term.

Harold Paisner

Chairman

17 June 2016

INVESTMENT MANAGER'S REPORT

Introduction

As set out in the Chairman's Statement, availability of bank finance continues to be restricted for small and medium sized businesses (SMEs). As a consequence, the Company has been able to make a number of attractive investments to smaller companies on a secured basis. We have also continued to see a strong pipeline of potential investments, starting now to focus particularly on opportunities to make qualifying investments to ensure the Company meets its HMRC qualifying target.

Investments

In October 2015, before the passing of the Finance (2) Act 2015, the Company invested a total of £7.5 million in three newly established businesses. Mini Rainbows Limited, in which the Company invested £2.5 million (as part of a £5 million investment alongside other Puma VCTs), was established to operate a trading business in the childcare sector and/or to acquire businesses and companies that operate within that sector. Warm Hearth Limited, in which the Company invested £2.5 million (as part of a £5 million investment alongside other Puma VCTs), was established to operate a trading business in the hospitality and leisure sectors and/or to acquire businesses and companies that operate within those sectors. Welcome Health Limited, in which the Company invested £2.5 million (as part of a £5 million investment alongside other Puma VCTs), was established to operate a trading business in the healthcare sector and/or to acquire businesses and companies that operate within that sector. We understand that the directors of these businesses are actively pursuing opportunities to deploy these funds in the near future. We have been advised by PwC that these investments should be qualifying for VCT purposes but will seek confirmation from HMRC in due course.

We have adopted a strategy for the non-qualifying portfolio of investing in secured loans (and other similar instruments) offering a good yield with hopefully limited downside risk. These loans take time to identify and execute, but should work well for the VCT into the medium term. Since the Company's launch, we have completed seven such investments for a total of £10.6 million.

During the period, the Company advanced a series of loans (including through affiliates Palmer Lending Limited, Primrose Lending Limited and Valencia Lending Limited) totalling £5.65 million to various entities within the Citrus Group. These loans, together with loans from other vehicles managed and advised by your Investment Manager, form part of a series of revolving credit facilities to provide working capital to the Citrus PX business. Citrus PX operates a property part exchange service facilitating the rapid purchase of properties for developers and homeowners. The facility provides a series of loans to Citrus PX, with the benefit of a first charge over a geographically diversified portfolio of residential properties on conservative terms. At the period end, the Company's exposure was £3.35 million following repayment to the affiliate of £2.3 million of principal (together with all accrued interest).

The Company has also provided loans of £2.5 million (through affiliate, Latimer Lending Limited) to Toppan Holdings Limited. These funds, together with loans from other vehicles managed and advised by your Investment Manager totalling £5.6 million, are being advanced to fund the development of a 65 bed purpose built care home in Mill Hill, London. These loans are again secured with a first charge over the site and expected to generate an attractive return. The construction programme on this project is progressing well with practical completion targeted for Q4 2016.

Loans of £2 million were advanced (through an another affiliate Lothian Lending Limited) to Richmond Global Properties Limited. These loans, together with loans from other vehicles managed and advised by your Investment Manager totalling £6.9 million, are being advanced to fund the development of a 112 bed purpose built care home in Hamilton, Scotland. These loans are secured with a first charge over the site and are expected to generate an attractive return. The construction programme is also progressing well and the care home is expected to open in Q1 2017.

As indicated in the Company's interim report, the Company provided a loan of £4 million (through an affiliate Mayfield Lending Limited) to Northern Land Developments Limited, secured with a first charge over two plots of land in Beckenham, Kent. The loan, together with loans from other vehicles managed and advised by your Investment Manager, facilitated the acquisition of two large residential houses on one of the plots. During the period, the Company's exposure was reduced to £3 million. The borrower expects to receive planning permission in the coming months to replace these two units with up to eight town houses.

The Company advanced a loan of £33,000 (through an affiliate Lavender Lending Limited) to Athena Alpha Limited during the period and have committed a further £83,000 at the end of the reporting period. This loan, together with loans from other vehicles managed and advised by your Investment Manager totalling £4.3 million, are funding the development of a 80 bed purpose built care home in Dover, Kent, and are secured with a first charge over the development site. The construction programme is progressing well with practical completion targeted for Q1 2017.

As indicated in the Company's interim report, the Company provided a loan of £1.14 million (through Lothian Lending Limited) to Kingsmead Care Home Limited. Kingsmead operates a new purpose-built care home and dementia treatment centre in Mytchett, Surrey. During the period, the Company's exposure was reduced to £640,000. The loan is secured with a first charge on the business and the property and is currently performing.

The Company has also advanced loans of £1 million (through affiliate, Meadow Lending Limited) to Regent Formations 265 Limited. These funds, together with loans from other vehicles managed and advised by your Investment Manager totalling £2.8 million, are being advanced to fund the development of a new 88 bed care home in Melton Mowbray, Leicestershire. These loans are again secured with a first charge over the site and expected to generate an attractive return. The construction programme is progressing well and the care home is expected to open in Q1 2017.

As previously reported, the Company acquired £519,000 shares in Nextenergy Solar Fund, a fully listed investment company focusing on operational solar photovoltaic assets located in the United Kingdom. Nextenergy benefits from relatively stable and predictable cashflows, expects to yield a sustainable and attractive dividend that increases in line with RPI over the long term and an element of capital growth through the re-investment of net cash generated in excess of the target dividend. Due to a change in power-generation markets resulting from declining energy prices, we began to reduce the Company's exposure and have now fully exited this investment following the period-end.

During the period, to further manage liquidity, the Company invested £3 million in a floating rate bond issued by Royal Bank of Canada and £1.3 million in a floating rate bond issued by Commonwealth Bank of Australia (through an affiliate Palmer Lending Limited). It is intended that these positions will be liquidated in due course as the Company makes qualifying investments.

Investment Strategy

We are pleased to have invested a substantial proportion of the Company's funds as it approaches its first anniversary. We remain focused on generating strong returns for the Company, whilst balancing these returns with maintaining an appropriate risk exposure and ensuring there is significant liquidity in the portfolio to free up cash for qualifying investments as they arise.

The Investment Management team continues to meet with companies which are potentially suitable for investment. In accordance with our mandate we have maintained a cautious approach and are performing due diligence work on several potential investments. Over the course of the next two years, the Company will build the qualifying portfolio up to the required 70 per cent by the end of year three. We have strong deal-flow and are meeting many potential investee companies with several interesting opportunities to make qualifying investments.

Puma Investment Management Limited

17 June 2016

Investment Portfolio Summary

As at 29 February 2016

Of the investments held at 29 February 2016, all are incorporated in England and Wales.

* Quoted investment listed on the LSE.

Income Statement

For the period ended 29 February 2016

All items in the above statement derive from continuing operations. 

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

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

Balance Sheet

As at 29 February 2016

The financial statements were approved and authorised for issue by the Board of Directors on 17 June 2016 and were signed on their behalf by:

Harold Paisner

Chairman

Statement of Cash Flows

For the period ended 29 February 2016

Statement of Changes in Equity

For the period ended 29 February 2016

Distributable reserves comprise: Capital reserve-realised, Capital reserve-unrealised (excluding gains on unquoted investments) and the Revenue reserve. At the period end, there were no distributable reserves.

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

Share premium represents premium on shares issued less issue costs.

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

1. Accounting Policies

Accounting convention

Puma VCT 11 plc ("the Company") was incorporated on 1 September 2014 and is domiciled in England and Wales. The registered office is Bond Street House, 14 Clifford Street, London W1S 4JU. The Company is a public limited company whose shares are listed on LSE with a premium listing. The company's principal activities are disclosed in the directors' report.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of investments held at fair value, and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' ("FRS 102") and the Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in November 2014 by the Association of Investment Companies ("the SORP").

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

First time adoption of FRS 102

These financial statements are the first financial statements of the Company prepared in accordance with FRS 102.

Investments

All investments are measured at fair value. They are all held as part of the Company's investment portfolio and are managed in accordance with the investment policy set out on page 14.

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

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

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

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

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

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

1. Accounting Policies (continued)

Income

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

Performance fees

Upon its inception, the Company agreed performance fees payable to the Investment Manager, Puma Investment Management Limited, and members of the investment management team at 20 per cent of the aggregate excess of the amounts realised over £1 per Ordinary Share returned to Ordinary Shareholders. This incentive will only be effective once the other holders of Ordinary Shares have received distributions of £1 per share.

The performance incentive has been satisfied through the issue of 7,627,992 Ordinary Shares (as set out in Note 11 of the financial statements) to the Investment Manager and members of the investment management team being 20% of the total issued Ordinary Share capital of 38,139,963. Under the terms of the incentive arrangement, all rights to dividends will be waived until the £1 per Ordinary Share performance target has been met. The performance fee is accounted for as an equity-settled share-based payment.

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

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

Expenses

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

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

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

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

Taxation

Corporation tax is applied to profits chargeable to corporation tax, if any, at the applicable rate for the period. The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue return on the marginal basis as recommended by the SORP.

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

1. Accounting Policies (continued)

Reserves

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

Foreign exchange

The base currency of the Company is Sterling. Transactions denominated in foreign currencies are translated into Sterling at the rates ruling at the dates that they occurred. Assets and liabilities denominated in a foreign currency are translated at the appropriate foreign exchange rate ruling at the balance sheet date. Translation differences are recorded as unrealised foreign exchange losses or gains and taken to the Income Statement.

Debtors

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

Dividends

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

Key accounting estimates and assumptions

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

2. Income

3. Investment Management Fees

Puma Investment Management Limited ("Puma Investments") has been appointed as the Investment Manager of the Company for an initial period of five years, which can be terminated by not less than twelve months' notice, given at any time by either party, on or after the fifth anniversary. The Board is satisfied with the performance of the Investment Manager. Under the terms of this agreement Puma Investments will be paid an annual fee of 2 per cent of the Net Asset Value payable quarterly in arrears calculated on the relevant quarter end NAV of the Company. These fees are capped, the Investment Manager having agreed to reduce its fee (if necessary to nothing) to contain total annual costs (excluding performance fee and trail commission) to within 3.5 per cent of funds raised. Total costs this period were 2.9 per cent of the funds raised.

In addition to the investment manager fees disclosed above, during the year two payments were made to Puma Investment Management Limited, totalling £649,000, in relation to share issue costs. The fees were to cover the costs of launching the funds.

4. Other expenses

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

Remuneration for each Director for the period is disclosed in the Directors' Remuneration Report on page 19. The Company had no employees (other than Directors) during the period. The average number of non-executive Directors during the period was 3. The non-executive Directors are considered to be the Key Management Personnel of the Company with total remuneration for the period of £59,000 including social security costs.

The Auditor's remuneration of £18,750 has been grossed up in the table above to be inclusive of VAT.

5. Tax on Ordinary Activities

Capital returns are not taxable as VCTs are exempt from tax on realised capital gains subject that they comply and continue to comply with the VCT regulations.

No provision for deferred tax has been made in the current accounting period. No deferred tax assets have been recognised as the timing of their recovery cannot be foreseen with any certainty. Due to the Company's status as a Venture Capital Trust and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.

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

7. Dividends

The Directors do not propose a final dividend in relation to the period ended 29 February 2016.

8. Investments

(b) Gains and losses on investments

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

(c) Quoted and unquoted investments

Further details of these investments are disclosed in the Investment Portfolio Summary on pages 6 to 12 of the Annual Report.

9. Debtors

10. Creditors - amounts falling due within one year

11. Management Performance Incentive Arrangement

On 11 September 2014, the Company entered into an Agreement with the Investment Manager and members of the investment management team (together "the Management Team") such that the Management Team will be entitled in aggregate to share in 20 per cent of the aggregate excess on any amounts realised by the Company in excess of £1 per Ordinary Share, the Performance Target.

This incentive is effective through the issue of ordinary shares in the Company, such that the Management Team hold 7,627,992 ordinary shares being 20% of the issued share capital of 38,139,963.

The Management Team will waive all rights to dividends until a return of £1 per share (whether capital or income) has been paid to the other shareholders.

The performance incentive structure provides a strong incentive for the Investment Manager to ensure that the Company performs well, enabling the Board to approve distributions as high and as soon as possible.

12. Called Up Share Capital

On incorporation on 1 September 2014 the company issued two Ordinary shares of 0.05p each.

On 11 September 2014 50,000 Redeemable Preference shares were issued to Puma Investment Management Limited, one quarter paid up, so as to enable the Company to obtain a certificate under Section 761 of the Companies Act 2006.

Also, on 11 September 2014, the Management Team (as explained in note 11) were allotted 11,250,000 Ordinary Shares of 0.05p each.

Between 31 December 2014 and 29 May 2015 30,511,969 Ordinary shares of 0.05p each were issued at £1 per share pursuant to the offers for subscription to the public dated 8 October 2014.

On 11 September 2015 the 50,000 Redeemable Preference shares were redeemed out of the proceeds of the offers and upon redemption the shares were cancelled. On 10 June 2015 the Management Team transferred 3,622,008 Ordinary shares to the Company for consideration of £1,811 and these shares were subsequently cancelled.

As explained in note 11, the Management Team now hold 7,627,992 Ordinary shares representing 20% of the total issued share capital.

13. Net Asset Value per Ordinary Share

14. Financial Instruments

The Company's financial instruments comprise its investments, cash balances, debtors and certain creditors. The fair value of all of the Company's financial assets and liabilities is represented by the carrying value in the Balance Sheet. Excluding cash balances, the Company held the following categories of financial instruments at 29 February 2016:

Management of risk

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

14. Financial Instruments (continued)

Credit risk

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

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

Credit risk associated with interest, dividends and other receivables are predominantly covered by the investment management procedures.

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

Market price risk

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

The Company's strategy on the management of market price risk is driven by the Company's investment policy as outlined in the Strategic Report on page 14. The management of market price risk is part of the investment management process. The portfolio is managed with an awareness of the effects of adverse price movements through detailed and continuing analysis, with an objective of maximising overall returns to shareholders.

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

18% of the Company's investments are quoted investments and 82% are unquoted investments.

14. Financial Instruments (continued)

Liquidity risk

Details of the Company's unquoted investments are provided in the Investment Portfolio summary on page 6. By their nature, unquoted investments may not be readily realisable, the Board considers exit strategies for these investments throughout the period for which they are held. As at the period end, the Company had no borrowings.

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

Fair value interest rate risk

The benchmark that determines the interest paid or received on the current account is the Bank of England base rate, which was 0.5 per cent at 29 February 2016. All of the loan and loan note investments are unquoted and hence not directly subject to market movements as a result of interest rate movements.

Cash flow interest rate risk

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

Interest rate risk profile of financial assets

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

14. Financial Instruments (continued)

Foreign currency risk

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

Fair value hierarchy

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

· Level a - Fair value is measured based on quoted prices in an active market.

· Level b - Fair value is measured based on directly observable current market prices or indirectly being derived from market prices.

· Level c (i) - Fair value is measured using a valuation technique that is based on data from an observable market.

· Level c (ii) - Fair value is measured using a valuation technique that is not based on data from an observable market.

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

The Level c (ii) investments have been valued in line with the Company's accounting policies and IPEV guidelines. Further details of these investments are provided in the significant investments section of the Annual Report.

Reconciliation of fair value for level c (ii) financial instruments held at the period end:

15. Capital management

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

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

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

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

16. Contingencies, Guarantees and Financial Commitments

There were no commitments, contingencies or guarantees of the Company at the period end.

17. Controlling Party

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

The financial information set out in this announcement does not constitute the Company's statutory financial statements in accordance with section 434 Companies Act 2006 for the period ended 29 February 2016, but has been extracted from the statutory financial statements for the period ended 29 February 2016 which were approved by the Board of Directors on 17 June 2016 and will be delivered to the Registrar of Companies. The Independent Auditor's Report on those financial statements was unqualified and did not contain any emphasis of matter nor statements under s 498(2) and (3) of the Companies Act 2006.

These are the first period of accounts.

A copy of the full annual report and financial statements for the period ended 29 February 2016 will be printed and posted to shareholders shortly. Copies will also be available to the public at the registered office of the Company at Bond Street House, 14 Clifford Street, London, W1S 4JU and will be available for download from www.pumainvestments.co.uk