Citi Fun 32 Regulatory News (TP10)

TP10 VCT plc

Final Results

6 May 2011

TP10 VCT plc managed by Triple Point Investment Management LLP today announces the final results for the year ended 28 February 2011.

These results were approved by the Board of Directors on 5 May 2011.

You may view the Annual Report in on the Triple Point website www.triplepoint.co.uk at Our Products/TP10/News. All other statutory information will also be found there.

About TP10 VCT plc

TP10 VCT plc ("the Company") is a Venture Capital Trust ("VCT"). The investment manager is Triple Point Investment Management LLP. The Company was incorporated in August 2009 and raised £28.6 million (net of expenses) through an offer for subscription.

Details of the Fund's progress are discussed in the Chairman's Statement and Investment Manager's Review forming part of the extract from the Financial Statements which follows.

Venture Capital Trusts (VCTs)

VCTs were introduced in the Finance Act 1995 to provide a means for private individuals to invest in unlisted companies in the UK. Subsequent Finance Acts have introduced changes to VCT legislation. The tax benefits currently available to eligible new investors in VCTs include:

·; upfront income tax relief of 30%

·; exemption from income tax on dividends paid; and

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

The Company has been provisionally approved as a VCT by HM Revenue & Customs. In order to maintain its approval, the Company must comply with certain requirements on a continuing basis. Above all, the Company is required at all times to hold 70% of its investments (as defined in the legislation) in VCT qualifying holdings, of which at least 30% must comprise eligible ordinary shares.

For this purpose, a 'VCT qualifying holding' consists of up to £1 million invested in any one year in new shares or securities of a UK unquoted company (which may be quoted on AIM) which is carrying on a qualifying trade, and whose gross assets at the time of investment do not exceed a prescribed limit. The definition of 'qualifying trade' excludes certain activities such as property investment and development, financial services and asset leasing. The Company will continue to ensure its compliance with these qualification requirements.

Report of the Directors - Financial Summary

For a £1 investment per share investors, with a sufficient income tax liability in the relevant year, can expect to have received a 30p tax credit which, taken together with the current NAV of 92.75p, totals 122.75p.

TP10 VCT plc ("the Company") is a Venture Capital Trust ("VCT"). The Investment Manager is Triple Point Investment Management LLP. The Company was launched in November 2009 and raised £28.6 million (net of expenses) through an offer for subscription which closed on 31 May 2010.

The Directors' Report on pages 9 to 13 and the Directors' Remuneration Report on pages 14 to 15 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 TP 10 VCT plc.

The Directors submit to the members their Annual Report and Financial Statements for the Company for the year ended 28 February 2011. The Report of the Directors' includes the Financial Summary, Chairman's Statement, Details of Advisers, Shareholder Information, Directors' Report, Directors' Remuneration Report and the Corporate Governance Statement.

Report of the Directors - Chairman's Statement

I am writing to you to present the Financial Statements for TP10 VCT plc ("the Company") for the year ended 28 February 2011.

Investment Strategy

TP10's strategy is to offer combined exposure to cash or cash based funds and venture capital investments focused on companies with predictable revenues from a financially sound customer base. Initially, investment exposure is intended to be predominantly to cash and cash based funds. By the end of its third year the Company's intention is that at least 70% of the fund will be committed to venture capital investments with up to 30% remaining invested in cash and cash based funds. The Investment Manager's Review gives more detail on the investment strategy.

Results

The offer for subscription for shares closed on 31 May 2010 with subscriptions having been received for 30,178,014 shares, with share proceeds of £29.9 m.

During the year the Company made its first VCT qualifying investment of £600,000 in Cinematic Services Limited, which is engaged in cinema digitisation. Subsequent to the year end, the Company has invested a further £400,000 into Cinematic Services Limited and £1m into another company engaged in cinema digitisation. The Investment Manager's Review details this progress and the Company's other commitments following the year end.

Over the year the Company made a loss of 2.24p per share as the running costs of the Company exceeded the income on its investments. As the Company deploys its funds into venture capital investments, this position is expected to reverse. At 28 February 2011 the net asset value per share stood at 92.75p.

Risks

The Board believes that the principal risks facing the Company are:

•investment risk associated with VCT qualifying investments;

•failure to maintain approval as a qualifying VCT.

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. Further details of how these risks are managed are detailed within the Directors' Report.

Outlook

The Board is pleased with the progress the Company has made in building its portfolio of venture capital investments and, with market conditions for VCT qualifying investments remaining favourable, it is confident that the Company is on track to secure its VCT qualification.

If you have any queries or comments, please do not hesitate to telephone Triple Point Investment Management LLP on 020 7201 8989.

Robin Morrison,

Chairman

5 May 2011

Investment Manager's Review

I am pleased to report that since the Company closed to new investment at the end of May last year it has begun to build its portfolio of VCT qualifying investments.

Overview

TP10's strategy is to offer combined exposure to cash or cash based funds and venture capital investments focused on companies with predictable revenues from a financially sound customer base. Initially investment exposure is intended to be predominantly to cash and cash based funds. By the end of the third year the Company's intention is that at least 70% of the fund will be committed to venture capital investments with up to 30% remaining invested in cash and cash based funds.

Venture capital investments will be sought with the following characteristics:

·; High degree of capital security

·; Solid and financially sound customer base

·; Predictable revenue streams

Assets awaiting deployment are to be invested in cash or cash-based, liquid investments, or in assets with a profile similar to Triple Point's VCT qualifying investments. As at 28 February 2011 £25.9m was held on money market deposits and the remaining funds were held on deposit with HSBC Bank plc.

VCT Qualifying Investments

In December 2010 the Company made its first VCT qualifying investment of £600,000 in Cinematic Services Limited (Cinematic), which is engaged in cinema digitisation in the UK.

Since the year end, the Company invested an additional £400,000 into Cinematic, enabling it to expand operations into Germany, and £1m into DLN Digital Limited, another company engaged in cinema digitisation The VCT is committed to making a £1m further investment into Cinematic, and investments of £1m each into four other companies engaged in cinema digitisation in the UK and Germany.

These companies specialise in the deployment of digital projection technology, and each will work with one or more of the major cinema chains. The companies will need to purchase and deploy digital technology and equipment, and will carry out a number of services, including the installation and ongoing maintenance of the systems to specific industry wide specifications.

Over the past few years there has been a global movement towards the digitisation of film distribution, in part to the significant commercial success of 3D films which shows no signs of abating, as well as the significant reduction in both distribution and printing costs over celluloid; avoiding piracy is another driver towards digital. Consequently, the major Hollywood film studios, as well as other second tier distributers are willing to pay 'Virtual Print Fees' in return for the ability to distribute digital rather than celluloid films, providing revenues which flow through to digital deployment companies such as those into which the Company has invested.

Following the year end, the Company also has invested £6m in seven companies pursuing opportunities in electricity generation from solar photo voltaic (solar PV) panels. The panels will be placed on suitable roofs within the housing associations' stock and used to generate electricity for the residents, with any surplus electricity exported to the National Grid. The generation of electricity from solar PV falls within the Government's Feed-in Tariff regime and the seven companies will benefit from this framework. Feed-in Tariffs are linked to inflation and rates for solar PV arrays installed before 2012 have been set for 25 years, providing the companies with a long term, pre-determined cash flow.

Each of these investments seeks to meet Triple Point's investment criteria, prioritising predictable revenues from financially sound customers and counterparties.

Outlook

Over the next two years, the investment strategy will involve the completion of the investment programme to which the Company is committed and to deploy funds into further qualifying investments to meet the 70% target in good time. We will also be monitoring and managing the performance of the Company's investments.

Claire Ainsworth

Managing Partner

for Triple Point Investment Management LLP

5 May 2011

About Triple Point Investment Management LLP (TPIMLLP)

TPIMLLP is a specialist in tax-efficient investments. As well as managing several market-leading VCTs, TPIMLLP 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 Triple Point Investment Management LLP please call 020 7201 8989.

Report of the Directors- Investment Portfolio

Additional Information

Report of the Directors - Corporate Governance

The Board of TP10 VCT plc has considered the principles and recommendations of the Association of Investment Companies Code of Corporate Governance (AIC Code) by reference to the Association of Investment Companies Corporate Governance Guide for Investment Companies (AIC Guide). The AIC Code, as explained by the AIC Guide, addresses all the principles set out in Section 1 of the Combined Code, 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, by reference to the AIC Guide (which incorporates the Combined Code), will provide improved reporting to shareholders.

The Company is committed to maintaining high standards in corporate governance and has complied with the recommendations of the AIC Code and the relevant provisions of Section 1 of the Combined Code, except as set out at the end of this report in the Compliance Statement.

The Corporate Governance Report forms part of the Report of the Directors.

Board of Directors

The Board regularly reviews the independence of its members. Since the year end Alexis Prenn has withdrawn fromTriple Point LLP ("TPLLP"). 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 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 3of 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 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.

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 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 Combined Code that all Directors are required to submit themselves for re-election at least every three years.

During the period covered by these Financial Statements the following meetings were held:

Audit Committee

The Board has appointed an Audit Committee of which Robin Morrison 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 Grant Thornton UK 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 auditors of the Company, seeking to balance objectivity and value for money.

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 relating to the Company's financial performance;

- 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 are independent and collectively have the skills and experience required to discharge their duties effectively, and that the chairman of the committee meets the requirements of the Combined Code 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 it were, would recommend this to the Board.

In respect of the period ended 28 February 2011, the audit committee discharged its responsibilities by:

• reviewing and approving the external auditor's terms of engagement and remuneration;

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

• reviewing TPIMLLP'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 TPIMLLP's compliance procedures;

• reviewing the appropriateness of the Company's accounting policies; and

• reviewing the Company's half-yearly results statements prior to Board approval.

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. The Board regularly reviews financial results and investment performance with the investment manager.

Triple Point Investment Management LLP is engaged to provide administrative services including accounting services and arrange physical custody of the documents of title relating to investments.

The Directors confirm that they have established a continuing process throughout the period and up to thedate of this report for identifying, evaluating and managing the significant potential risks faced by the Company and have reviewed the effectiveness of the internal control systems.

Internal control systems include the production and review of monthly bank and management accounts. The VCT is subject to a full annual audit whereby the auditors are the same auditors as other VCTs managed by the Investment Manager. Further to this, the Audit Partner has open access to the Directors of the VCT and the Investment Manager is subject to regular review by the TPIMLLP Compliance Department.

Risk Management

TPIMLLP carries out management of liquid funds in accordance with the policy guidelines laid down and regularly reviewed by the Board. The Board carries out a regular review of the risk environment in which the Company operates. The particular risks they have identified are detailed in the Directors' Report on page 9.

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 the foreseeable future. The Board receives regular reports from the 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. There are no borrowings or banking facilities in place nor are they anticipated to be required going forward.

Relations with Shareholders

The Board recognise 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. Proxy voting figures for each resolution will be announced at the Annual General Meeting. 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 4-5 Grosvenor Place, London, SW1X 7HJ or on 020 7201 8989.

Compliance Statement

The Listing Rules require the Board to report on compliance with the 48 Combined Code provisions throughout the accounting period. 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 Section 1 of the Combined Code of Corporate Governance published by the UK Listing Authority in 2008:

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 (A5.1).

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 have not been undertaken. Specific performance issues are dealt with as they arise (A1.3, A6.1).

3. The Company does not have a senior independent Director. The Board does not consider such an appointment appropriate for a company such as TP10 VCT (A3.3).

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 (C3 .5).

5. As all the Directors are non-executive, it is not considered appropriate to appoint a Nomination or Remuneration Committee (A4.1 and B2.1).

On behalf of the Board

Robin Morrison,

Chairman 

5 May 2011

Report of the Directors - Directors' Responsibility Statement

The Directors are responsible for preparing the Report of the Directors 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 to prepare the Financial Statements in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs). 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 IFRSs have been followed, subject to any material departures disclosed and explained in the Financial Statements;

·; 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 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.

In 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 to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

The Company's Financial Statements are published on the TPIMLLP website, www.triplepoint.co.uk. The maintenance and integrity of this website is the responsibility of TPIMLLP 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 my knowledge:

·; the Financial Statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

·; the management 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 they face.

On behalf of the boardRobin MorrisonChairman5 May 2011

 Statement of Comprehensive Income

For the year ended 28 February 2011

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

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 28 February 2011

The statements were approved by the Directors and authorised for issue on 5 May 2011 and are signed on their behalf by:

Robin Morrison

Chairman

5 May 2011

Company registration number 6985211.

The accompanying notes are an integral part of this statement.

Statement of Changes in Shareholders' Equity

For the year ended 28 February 2011

The share premium represents the excess of issue price of shares over par value net of issue costs. The special distributable reserve arises from the cancellation of the share premium, which was approved by the court on 17 September 2010. The revenue reserve is distributable by way of dividend. The capital reserve represents the proportion of Investment Management fees regarded as capital. There have been no realised or unrealised gains or losses on investments credited / charged to Capital Reserve in the period. Neither the share premium nor capital reserve are distributable.

 Statement of Cash Flows

For the year ended 28 February 2011

The accompanying notes are an integral part of these statements.

Notes to the Financial Statements

1 Corporate Information

The Financial Statements of the Company for the year ended 28 February 2011 were authorised for issue in accordance with a resolution of the Directors on 5 May 2011.

The Company applied for listing on the London Stock Exchange on 29 January 2010.

TP10 VCT plc is incorporated and domiciled in Great Britain. The address of TP10 VCT plc's registered office, which is also its principal place of business, is 4-5 Grosvenor Place, London, SW1X 7HJ.

TP10 VCT plc's Financial Statements are presented in Pounds Sterling (£) which is also the functional currency of the Company, rounded to the nearest thousand.

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. There are no borrowings or banking facilities in place nor are they anticipated to be required going forward.

The Financial Statements of the Company for the period to 28 February 2011 have been prepared in accordance with International Financial Reporting Standards ("IFRS") adopted for use in the European Union and complied 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 January 2009, 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.

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 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 (in the section headed Non-current asset investments).

·; 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 estimated future financial liability arising from future equity commitments and guarantees, which is assessed on the same basis as the valuation of unlisted financial investments as noted above.

The appropriateness of the allocation of management expenses between revenue and capital, which is based on the split of the long-term anticipated return between revenue and capital of net income will impact on the value of distributable reserves.

The key judgements made by Directors are in the valuation of non-current assets. 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 effects both current and future periods. The carrying value of investments is disclosed in note 11.

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 throughout the Company for the purposes of preparation of these Financial Statements.

Standards issued but not yet effective

The following new standards, amendments to standards and interpretations are not yet effective for the period ended 28 February 2011, and have not been applied in preparing these Financial Statements.

·; IAS 24 (Revised 2009) Related Party Disclosures (effective 1 January 2011)

·; Amendment to IAS 32 Classification of Rights Issues (effective 1 February 2010)

·; Improvements to IFRS issued May 2010 (some changes effective 1 July 2010, others effective 1 January 2011)

All of these changes will be applied by the Company from the effective date but none of them are expected to have a significant impact on the Company's Financial Statements.

Presentation of income statement

In order to better reflect the activities of an investment trust company, 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 Statement of Comprehensive Income. In accordance with the Company's status as a UK Investment Company under section 833 of the Companies Act 2006, net capital returns may not be distributed by way of dividend.

Capital Management

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;

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

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 28 February 2011 was £28 million (2010: £4.4 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 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 are designated by the Company as "at fair value through profit or loss" in accordance with IAS39 "Financial instruments recognition and measurement". 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 amount for which an asset can be exchanged between knowledgeable willing parties in an arms length transaction. 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, earnings multiples and net assets.

- Listed investments are fair valued at bid price on the relevant date.

Money market instruments are designated as non-current asset investments at fair value through profit or loss due to the Company's long term investment policy of holding a combination of VCT qualifying holdings and monetary assets. Money market funds are valued based on the bid price quoted on the balance sheet date.

Where securities are designated upon initial recognition as at fair value through profit or loss, gains and losses arising from changes in fair value are included in net profit or loss for the year as capital items 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. Transaction costs are expensed to the Statement of Comprehensive Income as incurred.

Income

Investment income includes interest earned on bank balances and money market deposits including income tax withheld at source, as well as loan stock interest on qualifying investments. Dividend income is shown net of any related tax credit and is brought into account on the ex-dividend date.

Fixed returns on investment loans, 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.

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 same basis as the particular item to which it relates, using the Company's effective rate of tax for the accounting period.

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 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 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.

Issued share capital

Ordinary 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 represents cash available at less than 3 month's notice.

Receivables

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.

Trade and other payables

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

Reserves

The revenue reserve (retained earnings) and capital reserve reflect the guidance published by the Association of Investment Companies. The share premium account represents the proceeds of share allotments in excess of the par values of shares issued and against which offer costs have been set. The capital reserve and share premium are non-distributable. The revenue reserve is distributable by way of dividend.

3. Seasonality of operations

The Company's operations are not seasonal.

4. Segmental reporting

The Company's segments are defined by the financial information provided to the chief operating decision maker. The company only has one class of business, being investment activity. All revenues and assets are generated and held in the UK.

5. Investment Income

6. Investment management fees

Triple Point Investment Management LLP provides investment management and administration services to the Company under an Investment Management Agreement effective 29 January 2010 which runs for a period of 5 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 2.50% per annum of net assets calculated and payable quarterly in arrears. Should such notice be given, the Investment Manager would perform its duties under the Investment Management Agreement and receive its management fee during the notice period.

7. Legal and professional fees

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

8. Directors' remuneration

9. Taxation

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

Excess Management charges of £652,000 (2009: £32,000) have been carried forward at 28 February 2011 and are available for offset against future taxable income subject to agreement with HM Revenue & Customs.

10. Loss per share

The loss per share is based on a loss from ordinary activities after tax of £628,494 (2010: £31,850), and on the weighted average number of shares in issue during the period of 28,285,707 (2010: 536,901).

The table below shows the calculation of the weighted average number of shares used in the above calculations:

11. Financial assets at Fair Value through Profit or Loss Account

Investments

Fair value Hierarchy:

Level 1: quoted prices in active markets for identical assets or liabilities. The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date, A market is regarded as active if quoted prices are readily and regularly available, and those prices represent actual and regularly occurring market transactions on an arms length basis. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.

Level 2: the fair value of financial instruments that are not traded in active markets is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available 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 in an active market (for example, investments in unquoted companies) is determined by using valuation techniques such as earnings multiples. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

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

Further details of these investments are provided in the Investment Manager's Review and Investment Portfolio.

All items held at fair value through the income statement were designated as such upon initial recognition.

Level 3 valuations include assumptions based on non-observable data, such as discounts applied either to reflect the impairment of the Investee Company's financial assets, or the price of recent investments.

Movements in investments held at fair value through the income statement during the year to 28 February 2011 were as follows:

All investments are designated as fair value through the income statement 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 are or losses on these items are treated as unrealised.

Analysis of money market instruments:

Sensitivity

An increase of 1% in the value of investments would increase the capital profits for the period and the net asset value at 28 February 2011 by £6,000 A decrease of 1% would reduce the capital profits and net asset value by the same amount.

An increase of interest rates by 1% would increase the revenue profits for the period and the net asset value at 28 February 2011 by £286,000.

The following table discloses the financial assets and liabilities of the company in the categories defined by

IAS 39, "Financial Instruments; Recognition & Measurement."

12. Receivables

13. Cash and cash equivalents

Cash and cash equivalents comprise deposits with The Royal Bank of Scotland plc and Scottish Widows.

14. Payables and accrued expenses

15. Share Capital

During the period the Company issued 25,519,812 ordinary shares of 1p each.

16. Net asset value per share

The calculation of net asset value per share is based on net assets of £27,983,203 (2010: £4,390,215)divided by the 30,178,014 (2010: 4,658,202) shares in issue.

17. Commitments and contingencies

The Company has no contingent liabilities. At 28 February 2011 the Company was committed to making a further £6million of VCT qualifying investments as described in the Investment Manager's Review.

18. Related party transactions

Alexis Prenn, a director of the Company, was an equity Member of Triple Point LLP (TPLLP), but has since withdrawn from TPLLP. TPLLP in turn has a controlling interest in Triple Point Investment Management LLP (TPIMLLP). During the period, TPIMLLP received £651,331 which has been expensed (2010: £7,134 expensed and £115,000 charged to share premium for capital raising), for providing management and administrative services to the Company.

19. Post balance sheet events

Other than the VCT qualifying investments described in the Investment Manager's Review there have been no significant post balance sheet events.