TPOA.L Regulatory News (TPOA)

27 May 2021

Triple Point VCT 2011 plc

(the "Company")

RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2021

The financial information set out in these statements does not constitute the Company's statutory accounts for the year ended 28 February 2021, prepared in accordance with section 435 of the Companies Act 2006, but is derived from those accounts. Statutory accounts will be delivered to the Registrar of Companies in due course. The auditors have reported on these accounts and their report was unqualified and did not contain a statement under section 498(2) of the Companies Act 2006.

Results

Triple Point VCT 2011 plc managed by Triple Point Investment Management LLP today announces the results for the year ended 28 February 2021.

These results were approved by the Board of Directors on 26 May 2021.

You may view the Annual Report in due course on the Triple Point website www.triplepoint.co.uk. Please note that page numbers in this announcement are in reference to the Annual Report.

 FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:

The Company's LEI is 213800AOOAQA5XQDEA89

Further information on the Company can be found on its website https://www.triplepoint.co.uk/current-vcts/triple-point-vct-2011-plc/s2539/.

NOTES:

The Company is a Venture Capital Trust incorporated in July 2010. The Investment Manager is Triple Point Investment Management LLP. The Company was established to fund small and medium sized enterprises (SMEs). The Company launched a new share class, known as The Venture Fund, in March 2019 which is mandated to invest in SMEs producing products or digital services that solve challenges faced by their larger corporate customers.

Financial Summary

Triple Point VCT 2011 plc ("the Company") is a Venture Capital Trust ("VCT"). The Investment Manager is Triple Point Investment Management LLP ("TPIM" and "Triple Point"). The Company was incorporated in July 2010.

· A Ordinary Shares ("A Shares"): On 30 April 2015 the A Share Class offer closed having raised £10.3 million with a total of 9,951,133 A Shares being issued.

· B Ordinary Shares ("B Shares"): On 29 April 2016 the B Share Class offer closed having raised £6,972,311 with a total of 6,824,266 B Shares being issued.

· Venture Fund: On 31 July 2020 the second Venture Fund offer closed having raised gross proceeds of £5.8 million with a total of 5,853,393 additional Venture Shares being issued. Since this offer closed, the Venture Fund has allotted further shares, with 21,099,963 now in issue.

The Strategic Report on pages 7 to 59, the Directors' Report on pages 75 to 78, the Corporate Governance Report on pages 61 to 65 and the Directors' Remuneration Report on pages 70 to 74 have each been drawn up in accordance with the requirements of English law and liability in respect thereof is also governed by English law. In particular, the responsibility of the Directors for these reports is owed solely to Triple Point VCT 2011 plc.

The Directors submit to the members their Annual Report and Financial Statements for the Company for the year ended 28 February 2021.

Key Highlights

· Dividends per A Share: 6.75p (Year ended 29 Feb 2020: 55.50p)

· Net Asset Value per A Share: 52.43p (Year ended 29 Feb 2020: 57.78p)

· Total Return per A Share2: 122.43p (Year ended 29 Feb 2020: 121.03p)

· Dividends per B Share: 5.00p (Year ended 29 Feb 2020: 5.00p)

· Net Asset Value per B Share: 57.36p (Year ended 29 Feb 2020: 102.77p)

· Total Return per B Share2: 67.36p (Year ended 29 Feb 2020: 107.77p)

· Ongoing Charges Ratio1: 3.03%. The ongoing charges ratio is a ratio of annualised ongoing charges expressed as a percentage of average net asset values throughout the year. (2020: 2.74%)

· Realisation Proceeds: £550k. Realisations of investments and loan repayments generated total proceeds for the Company of £550k (2020: £4.96 million).

· Fundraising: £8.09 million. The Venture Fund offer which closed on 31 July 2020 raised net proceeds of £8.09 million.

· Dividends per Venture Share: 3.00p (Year ended 29 Feb 2020: nil)

· Net Asset Value per Venture Share: 93.26p (Year ended 29 Feb 2020: 99.01p)

· Total Return per Venture Share: 96.26p (Year ended 29 Feb 2020: 99.01p)

The Annual report contains a number of Annual Performance Measures ("APMs"). APMs are financial measures that are in addition to those defined or specified in the Company's reporting framework.

1 Total Return and Ongoing Charges Ratio are defined as APMs. The Board considers Total Return to be the primary measure of shareholder value.

2 Total Return is made up by current Net Asset Value plus Dividends paid to date. More information on Total Return is on page 73.

Strategic Report

Chair's Statement

I am writing to present the Financial Statements for the Company for the year ended 28 February 2021.

Following the challenges that both business and society have faced during this pandemic, it appears we can now begin to be more optimistic. Advances in treatment of the virus and the rollout of effective vaccines seem likely to bring us out of this crisis as 2021 progresses.

We would be remiss not to consider other fast moving world events such as the UK-EU's developing relationship, and the impact this may have on the small businesses in which we invest. As such, traits which we have long viewed as desirable, such as flexibility and a long-term mind-set, have become essential for companies if they are to survive and thrive.

Our Venture portfolio has, on the whole, remained resilient throughout the pandemic and further detail on the impact can be found below and in the Investment Manager's Review on pages 45 to 48. Through our Venture Fund we have now invested £8.3 million into 19 portfolio companies; 12 of which investments were completed in 2020 under challenging circumstances. As we move towards the "new normal", we remain confident that there are and will continue to be sufficient investment opportunities for us to pursue. A key theme within our Venture Portfolio are some portfolio companies raising follow-on funding rounds, as a result of their continued growth plans and we expect this is likely to be a feature of the 2021 financial year.

Investment Portfolio

The Company's funds at 28 February 2021 were 76.60% invested in a portfolio of VCT qualifying and non-qualifying unquoted investments. As a result of the Company's recent allotments, the current percentage invested in Qualifying investments is below the required 80% threshold. Under current VCT regulations the Company has three years before undeployed cash counts towards the qualifying status of the Company. Undeployed cash is therefore not taken into account in determining the Current Qualifying status percentage of the Company, which at the year-end was above 80%.

The Investment Manager's Review on pages 33 to 50 gives a more detailed update on the portfolio of investments in 28 small unquoted businesses.

A Share Class

I am pleased to report the A Share Class portfolio continues to perform well and has recorded a profit over the period of 1.40 pence per share and as at 28 February 2021 the NAV per share stood at 52.43 pence per share.

Our Hydro investments continue to remain an asset class which offers A Class Shareholders exposure to defensive and robust earnings, with a low correlation to other asset classes. The benefits of such stability came to the fore during the challenging economic and market conditions we have experienced as a result of the COVID-19 pandemic. The A Share Class continues to be well positioned, due to its high percentage of contractual revenues under the Feed-in-Tariff regime. As a result, the Hydro investments avoided much of the volatility experienced recently in the energy markets.

During the year A Class Shareholders were paid dividends of 6.75 pence per share. One of the initial core targets of the A Share Class was to deliver to investors a cash return of 100 pence per share by the end of year six including the initial tax relief. It was initially intended that this return was derived from a combination of the initial income tax rebate, tax-free dividends in years two, three, four and five, followed by a substantial capital realisation in year six.

Following the 6.75 pence per share paid in June 2020, this payment has taken total dividends paid to A Shareholders to date to 70.00 pence per share. Including the initial tax relief, this achieves our initial target. This is an excellent achievement, and I would like to thank the Investment Manager for all their hard work in helping the Company reach this milestone for its A Class Shareholders.

In line with the share class' key objectives, I am delighted to announce that a further dividend of 3.5 pence per share will be paid on 25 June 2021.

The Board and the Investment Manager continue to monitor investment activity across the wider hydro sector and continue to consider if an asset sale would be in the best interests of shareholders and to realise further value for investors. During the period, the Board commissioned an independent financial adviser to undertake an independent valuation of the A Share Class Hydro assets. As a result of this process, we have left the valuations for the Hydro companies unchanged from the prior year. The high case scenario would have seen an uplift to the portfolio, but we have maintained them in line with the previous year which sits towards the upper end of the range, which we consider to be most indicative of fair value.

Any future transaction that would constitute a material change to the Investment Policy of the Company would require shareholder approval, and the Board will communicate with Shareholders should this be the case. This is discussed further in the Investment Manager's Review on pages 37 to 39.

B Share Class 

As previously announced on 27 April 2021, there has been a significant reduction in the overall value of the B Share Class holdings. The Board were disappointed by the write-down of the gas-fired assets. The NAV of the B Share Class had been reduced due to a restatement of the carrying value of two gas-fired energy centres held by the B Share Class; Green Peak Generation Limited and Distributed Generation Limited (the "Gas-Fired Assets"). The decision to restate the carrying value of these Gas-Fired Assets had been taken after careful review and consideration of an independent report obtained by the Board. The NAV had been based on a valuation within the range of valuations set out in the independent report, also reflecting feedback received from an ongoing sales process of the Gas-Fired Assets. 

A number of external factors had contributed to the reduced valuation of the Gas-Fired Assets: the costs of constructing new gas-fired energy centres, compared to the original build price of the Gas-Fired Assets, had reduced; because of the requirements of VCT rules at the time the Gas-Fired Assets do not hold long-term 15-year capacity market contracts, which could have offered a valuable additional income stream; the ongoing disposal process had indicated that potential buyers are assuming, and pricing in, shorter operational lifespans for the Gas-Fired Assets following the acceleration of the Government's and the public's desire to phase out fossil fuels in favour of alternatives.

Price reductions had also been factored into valuation assumptions relating to the regulator, Ofgem's, ongoing review of the embedded benefits regime (around which there are substantial uncertainties), future Balancing Market revenues, assumed terminal values, and site-specific factors including recent availability issues. All of these elements had led to an increase in discount rates to be applied to these assets and hence the overall NAV reduction of the B Share Class.

No dividend has been declared at this time in respect of the B Share Class due to insufficient cash previously generated by the B share class or a sale of its assets.

We know that this news is a disappointment to our investors. Further detail is set out in the Investment Manager's Review on pages 41 to 43.

Further, a resolution will be sought at the upcoming AGM to divest of the remaining B Share Class assets with the ultimate intention to wind-down and cancel the B Share Class. The Board is making a recommendation in favour of the resolution as: it was the intention at the outset for the B Share Class to provide investors with an opportunity to exit after 5 years following investment and proceeds returned after 5 years following investment; there continue to be substantial uncertainties surrounding Ofgem's ongoing review of the embedded benefits regime; and the other external factors which have contributed to the reduced valuation of the gas-fired energy centre assets (refer above and on pages 41 to 43 of the Investment Manager's Review) are not considered likely to improve in the short to medium term. Further information is set out in the Notice of AGM.

Venture Fund

The Venture Fund benefited from being relatively young coming into this period of economic shock, having both a significant cash weighting and a portfolio of recent investments. At the beginning of the COVID-19 pandemic in March 2020, the companies in the Venture Fund's portfolio had all raised capital relatively recently, meaning that they had sufficient cash balances, which have allowed them to weather the potential immediate economic storm.

After a careful review of the portfolio, a c.5% NAV write-down was undertaken in late March 2020, to reflect the potential negative impact of COVID-19 pandemic and related lockdown on some investee companies. We have since reversed a number of those provisions where we have observed strong sales performance or funding rounds at higher valuations amongst our portfolio companies (see the Investment Manager's Review on pages 45 to 48). In addition, no further fundraises were undertaken by the portfolio companies during the year to bolster their cash position due to the COVID-19 pandemic, and the two portfolio companies that did funding rounds would have done so irrespective of the pandemic.

Despite COVID-19 the level of commercial innovation remains undaunted and hence the investment opportunity during the period continues to be promising. The second Venture Fund offer for subscription closed on 31 July 2020 having raised £5.8 million and the third offer for subscription is now open, and following the year end, the Company allotted an additional 5,867,573 Venture Shares raising £5.49 million, this takes the total number of shares in issue to 21,099,963.

In line with the share class' key objectives, I am delighted to announce that a further dividend of 3 pence per share will be paid on 30 July 2021.

The fund's aim is to build a portfolio of Qualifying Investments in early-stage companies capable of generating significant long-term capital growth and with a bias to the business-to-business technology sector whilst enabling investors to take advantage of the substantial tax reliefs available to investors in VCTs, including 30% income tax relief on amounts invested.

A snapshot of the companies the Venture Fund has invested into during the year is set out below.

Liquidity

The Company has good liquidity, with cash and readily realisable investments totalling £5.45 million (23% of net asset value) at 28 February 2021 which means that the Company will be able to react quickly to new investment opportunities as they arise. The majority of the liquidity available was raised by the Venture Fund.

Share Buy-Backs

We continue to maintain our aim, subject to distributable reserves and liquidity, of being willing to buy back the Company's shares in the market at a 5% discount to NAV.

During the year ended 28 February 2021 there were no share buy-backs.

VCT Qualifying Status

The Company has maintained its approved venture capital trust status with HM Revenue & Customs. The Company's compliance with the VCT qualifying conditions is closely monitored by the Board, who receive regular reports from the Investment Manager and from our VCT tax compliance advisers Philip Hare & Associates LLP.

VCT Legislation and Regulation

Following continuous dialogue with HMRC the VCT industry benefits from greater clarification around the operation of the new VCT rules introduced in 2015. As a result, the majority of investments are now made on the basis of self-assuring their qualifying status, subject to the receipt of professional advice from our Tax Advisers.

We will continue to work closely with the Investment Manager to ensure the Company remains compliant with the scheme rules.

Post Period End Update

Following the end of the period, the Company has allotted a further 5,867,573 shares into the Venture Fund. The shares were issued at the end of March and 1 April 2021, these further allotments raised additional net proceeds of £5.49 million for the Company.

For all future investments in the 2021/22 tax year, the offer will remain open until 30 July 2021, unless fully subscribed at an earlier date.

Outlook

The COVID-19 shock to society and the economy has put us all into particularly uncharted territory. Whilst the economic outlook is undoubtedly uncertain, we remain excited about the opportunities ahead.

As well as being immensely grateful to scientists, health workers and to all those who have kept the wheels of society turning, we can, at last, begin to consider what "the new normal" may bring for both companies and individuals. If anything, COVID-19 has highlighted the attractions of investing in UK small and medium-sized companies as so many businesses have performed so strongly through the pandemic, reflecting the strength of their offering and the problems they are looking to solve. In his most recent Budget, Chancellor Rishi Sunak announced measures such as the "Fast Track" visa scheme and the Future Fund, which I hope will help in encouraging innovative start-ups and ensure these firms can access the talent, finance and support they need to scale up here in the UK. We look forward to continuing to play our part in this.

I would like to take this opportunity to thank Shareholders for your continued support and I look forward to welcoming further Venture Fund Shareholders during the months ahead. I would also like to thank our Investment Manager for their support and commitment during what has been a very difficult year for us all.

If you have any questions about your investment, please do not hesitate to contact TPIM on 020 7201 8990.

Jane Owen

Chair

26 May 2021

Strategy and Business Model

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

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

Investment Policy

Investment Objectives

The Company's Investment Policy is directed towards new investments in businesses which either: (i) have the potential for high growth, or (ii) are cash flow generative businesses with a high-quality customer base. All investments must provide the potential for a strong, positive, risk-adjusted return to investors. All investments will be made with the intention of growing and developing the revenues and profitability of the target businesses.

Venture Fund

The Company's Venture Fund focuses on providing funding to unquoted companies at an early stage in their lifecycle to help them grow and scale. The Venture Fund will typically make initial investments of between £50,000 and £2 million and may make further follow-on investments into existing portfolio companies. The intention is to build a portfolio of predominantly unquoted companies with significant growth potential across a diversified range of sectors.

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

A & B Shares

The key objectives of the Company's A Share Fund and B Share Fund are to:

· Pay regular tax-free dividends to investors;

· Maintain qualifying VCT status to enable investors to benefit from the associated tax reliefs;

· Reduce the volatility normally associated with early stage investments by applying its Investment

Policy;

· Make investments typically in the range of £500,000 to £5 million in companies with contractual

revenues from financially sound counterparties*; and

· In respect of the B Share Fund only, provide investors with the option to exit shortly after 5 years

following investment.

The Company will not vary any of the above objectives for the Venture Fund, A Share Fund or B Share Fund to any material extent without the approval of the Shareholders.

\* The A and B Share Classes are both fully invested and closed to new investment, consequently the Share Classes are no longer making investments.

Target Asset Allocation

The Company aims to invest its capital fully in VCT Qualifying Investments. Where this is not practicable, the long-term investment profile of the Company is expected to be:

· At least 80% in VCT Qualifying Investments, with a focus on unquoted companies with high growth

potential for the Venture Fund; and

· A maximum of 20% in permitted Non-Qualifying Investments, cash or cash-based similar liquid investments.

Qualifying Investments

Investment decisions made must adhere to HMRC's VCT qualification rules. In considering a prospective investment in a company, particular regard is given to:

· The track record, expertise and ability of the management team with clear commercial and financial objectives;

· A significant, often global, total addressable market;

· The ability of the company to create and sustain a competitive advantage;

· The quality of the company's assets, in particular where appropriate the ownership and effective use of proprietary technology and or an innovative product;

· The high likelihood of a transformational corporate contract and established market fit and then the opportunity to develop regular, repeated income from new clients, leading to growth and long-term profitability;

· A high level of access to regular material financial and other information during the holding period;

· An attractive valuation at the time of the investment;

· The long-term prospect of being sold or listed in the future at a significant multiple of the initial investment value; and

· In respect of the B Share Fund, the prospect of achieving an exit after 5 years of the life of the fund.

In respect of the Venture Fund, no more than 10% of the NAV of the Venture Fund (at the point of the investment), will be invested in companies which are not revenue-generating or where there is no expectation of revenues being generated in the near future.

As the value of investments increase, Triple Point will monitor opportunities for the Company to realise capital gains to enable the Company to make tax-free distributions to Shareholders.

Non-Qualifying Investments

The Non-Qualifying Investments will be managed with the intention of generating a positive return. The Non-Qualifying Investments will comprise from time to time a variety of assets including (a) short-term deposits of money, shares or units in alternative investment funds (which have the meaning given by regulation 3 of the Alternative Investment Fund Managers Regulations 2013) or in undertakings for the collective investment in transferable securities (which have the meaning given by Section 363A(4) of the Taxation (International and Other Provisions) Act 2010), which may be repurchased, redeemed, or paid out on no more than seven days' notice; and (b) ordinary shares or securities in a company which are acquired on a regulated market (defined in Section S274(4) ITA 2007).

Borrowing Powers

Any borrowing by the Company for the purposes of making investments will be in accordance with the Company's articles of association. To the extent that borrowing is required, the Directors will restrict the borrowings of the Company and exercise all voting and other rights or powers of control over its subsidiary undertakings (if any) to ensure that the aggregate amount of money borrowed by the Group, being the Company and any subsidiary undertakings for the time being (excluding intra-Group borrowings), will not, without shareholder approval, exceed 30% of its NAV at the time of any borrowing.

During the year, the Company entered into a short-term facility agreement with Triple Point Advancr Leasing plc. The uncommitted and unsecured facility was for £800,000 at a fixed rate of 4% per annum. The facility was put in place to manage working capital in the Venture Fund and to avoid incurring penalties withdrawing funds on deposit to make investments at short notice. At the year-end there was no loan outstanding, but the facility is still in place.

Risk Diversification

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

Valuation Policy

All unquoted investments will be valued in accordance with IPEV or similar guidelines. A brief summary of the IPEV guidelines as it applies to TP11's investments is as follows:

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

· In estimating fair value for an investment, the valuation methodology applied should be the most appropriate for a particular investment. Such methodologies, including the price of the recent investment, earnings multiples, net assets, discounted cash flows or earnings and industry valuation benchmarks, should be applied consistently. The price of recent transactions should not be assumed, and should be calibrated against a scorecard or other appropriate measures.

In December 2018 the IPEV Board published the latest edition of the International Private Equity and Venture Capital Valuation Guidelines (the "2018 Guidelines"). They were effective for reporting periods beginning on or after 1 January 2019.

Early-stage investments were also covered in more detail, attempting to address the challenges that result where there are no current or short-term future earnings.

A significant change that applies to TP11 when acquiring investments, is the change to the reliance on "price of a recent investment" as a standalone valuation technique. This results from misinterpretation of previous editions of the Valuation Guidelines, with many practitioners using "price of a recent investment" as a default position for up to 12 months after the acquisition date. By placing less emphasis solely on this as a valuation technique, the 2018 Guidelines reinforce the premise that fair value must be re-estimated at each reporting date. This does not preclude fair value from being informed by the price of a recent investment, however where this is the case, further analysis will be needed, particularly in relation to changes in market conditions or the investee's performance.

We would only usually expect significant adjustments to recent investment values where an investment is significantly under- or over-performing compared to our expectation at the time of investment.

Any quoted investments, if made, will be valued at prevailing bid prices.

Co-Investment Policy

The Company may invest alongside other funds or entities managed or advised by the Investment Manager which would help the Company to broaden its range of investments or the scale of opportunities more than if it were investing on its own.

It is possible that conflicts may arise in these circumstances between different funds or between the Company and the Investment Manager. The Investment Manager maintains robust conflict of interest procedures to manage potential conflicts and issues are resolved at the discretion of the independent board of the Company.

Dividend Policy

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

For the Venture Fund, the Company intends to distribute 3 pence per Venture Share in the financial year ending 28 February 2021, 3 pence per Venture Share in the financial year ending 28 February 2022, followed by regular dividends of up to 5 pence per Venture Share per annum thereafter. The Company's ability to pay dividends is subject to the existence of realised profits, legislative requirements, and the available cash reserves.

Share Buy-Back Policy

TP11 aims, but is not committed, to offer liquidity to Shareholders through on-going buy-backs, subject to the availability of distributable reserves, at a target discount of 5% to net asset value.

Share Realisation Policy

After an anticipated holding period of between five and seven years, which may include follow-on investments into investee companies as appropriate, Triple Point intends to identify opportunities to exit Venture Fund investments.

Exits will typically be realised through trade sales to businesses, acquisitions by private equity funds, or selling shareholdings to later stage venture and growth capital funds during the course of further investee company fund raising activity. Sales during the course of further investee company fund raising activity may include investee companies buying back shares at a price reflecting the valuation at that stage. The proceeds of any realisation will be used to identify further investment opportunities and to pay dividends to investors.

Key Performance Indicators ("KPIs")

As a VCT, the Company's objectives are to provide Shareholders with up front tax relief, an attractive income and returns through capital appreciation and the payment of dividends. The Company aims to meet these criteria by investing its funds in line with the Company's investment policy, more detail of which can be found on pages 16 to 18.

The Board expects the Investment Manager to deliver a performance which meets the objectives of providing investors with an attractive income and capital return. The Board has identified four primary KPIs that it uses in its own assessment of the Company's performance, set out below.

These are intended to provide Shareholders with sufficient information to assess how the Company has performed against its objectives in the year to 28 February 2021, and over the longer term, through the application of its investment and other principal policies.

Total Return

NAV plus dividends paid is a measure of Shareholder value that includes the current NAV plus cumulative dividends paid to Shareholders to date. The Charts show how the Total Return of each Share Class has developed since launch. Total Return is deemed an alternative performance measure.

A Share Class

The NAV per A Share has decreased from 57.78 pence per share at 29 February 2020 to 52.43 pence per share at the reporting date. After making an adjustment for dividends paid during the year the A Shares total return has increased from 121.03 pence per share at 29 February 2020 to 122.43 pence per share at the reporting date.

This represents an increase of 1.16%.

The NAV of the A Share Class decreased due to the payment of dividends to A Class Shareholders.

The increase in the total return for the A Shareholders is in line with the Company's long-term objectives to achieve both capital growth and pay dividends to Shareholders. The Board is pleased with this performance.

B Share Class

The NAV per B Share has decreased from 102.77 pence per share at 29 February 2020 to 57.36 pence per share at 28 February 2021, a write down of 45.41 pence per share. The majority of the fall in NAV is attributable to the write down in the valuation of the B Share Class assets; this is discussed in the Chair's Statement on page 10 and the Investment Manager's Review on pages 41 to 43. Dividends paid in the year to B Share Class Shareholders was 5 pence per share. The total return has decreased from 107.77 pence per share at 29 February 2020 to 67.36 pence per share at 28 February 2021.

This represents a decrease of 37.5%.

Venture Fund

The NAV per Venture Share has decreased from 99.01 pence per share at 29 February 2020 to 93.26 pence per share at the reporting date. After making an adjustment for dividends paid during the year the Venture Shares total return has decreased from 99.01 pence per share at 29 February 2020 to 96.26 pence per share at the reporting date.

This represents a decrease of 2.78%.

The NAV of the Venture Share Class has fallen in part due to the 3 pence per share dividend paid during the period, but also due to the running costs of the fund exceeding income. The Venture Share Class investments in early stage business who, in their infancy are not income generating for the Share Class. It is expected that the Company will generate capital profits as the Share Class and its investments mature.

Earnings per share

The Charts below show the Company's earnings per share, by Share class for the year ended 28 February 2021. The longer-term trend of performance on this measure is shown in the charts below.

Compliance with VCT legislation

By making an investment in a Venture Capital Trust, Shareholders become eligible for several tax benefits under VCT tax legislation. This is, however, contingent on the Company complying with VCT tax legislation. The Board can confirm that throughout the year ended 28 February 2021, the Company continued to meet these tests.

To achieve compliance, the Company must meet a number of tests set by HMRC. A summary of these steps is set out on page 77 under "VCT Regulation".

Ongoing charges ratio

The ongoing charges ratio1 is a ratio of annualised ongoing charges expressed as a percentage of the average net asset value throughout the period. The annual running costs of the Company are capped at 3.5% of the Company's NAV, above which, the Investment Manager will bear any excess costs.

The ongoing charges of the Company for the financial year under review represented 3.03% (2020: 2.74%) of the average net assets.

1 This ratio is calculated using the AIC's "Ongoing Charges" methodology which can be found on its website https://www.theaic.co.uk/.  The Ongoing Charges ratio is deemed an alternative performance measure. 

Tax Benefits

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

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

Investment classification by asset value and sector value are shown on the following pages:

Investment Portfolio - A Share Class

** Please note that the percentage of qualifying investments in the above table is not representative of the Company as a whole, whose qualifying investments exceed the requisite 80% threshold.

Investments by Sector - A Share Class

Investment Portfolio - B Share Class

** Please note that the percentage of qualifying investments in the above graph is not representative of the Company as a whole, whose qualifying investments exceed the requisite 80% threshold.

Investments by Sector - B Share Class

Investment Portfolio - Venture Share Class

** Please note that the percentage of qualifying investments in the above table is not representative of the Company as a whole, whose qualifying investments exceed the requisite 80% threshold.

Investments by Sector - Venture Share Class

VCT Regulation

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

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

· Exemption from income tax on dividends received; and

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

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

As referred to in the Chair's Statement on page 14, further changes have been introduced with effect from 6 April 2019. The Company will continue to ensure its compliance with the qualification requirements.

The Company has been approved as a VCT by Her Majesty's Revenue and Customs. To maintain this approval, the Company must comply with certain requirements on a continuing basis. Within three years from the effective date of provisional approval or later allotment at least 80% (from 1 March 2020, the percentage of the Company's investments held in "qualifying holdings" increased to 80% from 70%) of the Company's investments must comprise "qualifying holdings" of which at least 30% must be in eligible Ordinary Shares. For accounting periods ending on or after 6 April 2018, the minimum percentage is 70% in all cases. However, holdings acquired before 6 April 2018 using certain "protected monies" - holdings acquired using monies raised, or derived from monies raised, by the VCT before 6 April 2011 - are ignored when determining whether the VCT meets the 70% eligible shares condition. This investment criterion continues to be met.

FCA Regulation

On 22 July 2014 Triple Point VCT 2011 plc registered with the Financial Conduct Authority as a small Alternative Investment Fund Manager ("AIFM") under the AIFM Directive.

Exit Programme

The Company and Investment Manager continue to be committed to ensuring a timely exit and return of funds to B Class Shareholders as soon as practicable after the end of the minimum five-year holding period. The Investment Manager has a strong track record in managing such exits.

The Board are currently considering the exit programme for the B Share Class investments. This is discussed in more detail in both the Chair's Statement and the Investment Manager's Review.

During the previous year, the Company took steps to achieve a partial realisation for the A Class Shareholders. With the declaration of the latest dividend, this takes total distributions to Shareholders to 70 pence per share. This distribution, along with initial tax relief equates to a return to A Class Shareholders of 100 pence per share.

Although the initial mandate for the A Share Class was to hold the hydro investments for up to sixteen years. The Board continues to monitor the investment landscape for transactions in these types of assets. If thought appropriate, the Board may explore the potential sale of the Hydro assets.

Principal Risks and Uncertainties and Emerging Risks

The Directors seek to mitigate its principal risks by regularly reviewing performance and monitoring progress and compliance. In the mitigation and management of these risks, the Directors carry out a robust assessment of the Company's emerging and principal risks, including those that would threaten its business model, future performance, solvency or liquidity and reputation.

The main areas of risk identified by them, along with the risks to which the Company is exposed through its operational and investing activities, are detailed below. The Board do not consider the likelihood or impact of these risks to have changed in the year. The Board maintains a comprehensive risk register which sets out the risks affecting both the Company and the investee companies in which it is invested. The risk register is reviewed and updated at least twice a year to ensure that procedures are in place to identify principal risks and to mitigate and minimise the impact of those risks should they crystallise.

The risk register is also reviewed and updated to identify emerging risks, such as any climate related risks, and to determine whether any actions are required. This enables the Board to carry out a robust assessment of the risks facing the Company, including those risks that would threaten its business model, future performance, solvency or liquidity. As it is not possible to eliminate risks completely, the purpose of the Group's risk management policies and procedures is not to eliminate risks, but to reduce them and to ensure that the Group is adequately prepared to respond to such risks and to minimise any impact if the risk materialises.

The Company does not consider Brexit to continue to be a principal or emerging risk as the Company invests into UK-based companies insulating it from any potential future deals negotiated with the EU, and because of the certainty from the Brexit deal reached at the end of 2020.

Details of the Company's internal controls are contained in the Corporate Governance section on page 64 and further information on exposure to risks including those associated with financial instruments is given in note 17 of the financial statements.

VCT Qualifying Status Risk the Company is always required to observe the conditions laid down in the Income Tax Act 2007 for the maintenance of approved VCT status. The loss of such approval could lead to the Company losing its exemption from corporation tax on capital gains, to investors being liable to pay income tax on dividends received from the Company and, in certain circumstances, to investors being required to repay the initial income tax relief on their investment.

Mitigation: The Investment Manager keeps the Company's VCT qualifying status under continual review and reports to the Board on a quarterly basis. The Board has appointed Philip Hare & Associates LLP to undertake an independent VCT status monitoring role. Any new Venture investments are reviewed by legal advisers, and their opinion sought on whether the investment is likely to be a qualifying investment.

Investment Risk the Company's VCT qualifying investments will be held in small and medium-sized unquoted investments which, by their nature, entail a higher level of risk and lower liquidity than investments in large, quoted companies. This could make it difficult to realise investments in line with the relevant strategy.

Mitigation: The Directors and Investment Manager aim to limit the risk attached to the portfolio by careful selection and timely realisation of investments, by carrying out rigorous due diligence procedures and by maintaining a spread of holdings in terms of industry sector and geographical location. The Board reviews the investment portfolio with the Investment Manager on a regular basis. Where possible, a member of the Investment Manager holds a seat on the board of the portfolio companies. This enables the Investment Manager to observe and offer guidance to the portfolio company when and where this may be required. TPIM has developed a wide industry network and strong pipeline which is reviewed quarterly by the Board. The Venture Fund aims to mitigate some of the risks typically associated with venture capital investing by proactively working with businesses with the potential for high growth that are actively solving problems for established corporates, increasing their chances of success, as set out in further detail on page 46.

Financial Risk as a VCT the Company is exposed to market price risk, credit risk, fair value risk, liquidity risk and interest rate risk. As most of the Company's investments will involve a medium to long-term commitment and will be relatively illiquid, the Directors consider that it is inappropriate to finance the Company's activities through borrowing, other than for short-term liquidity.

Mitigation: The key elements of financial risk are discussed in more detail in note 17. At the reporting date, the Company had no borrowings and substantial cash on the balance sheet.

COVID-19 pandemic

The Covid-19 pandemic has caused and could continue to cause economic disruption and depression, closure of businesses, staff absences, unemployment, reduction of consumer demand, and sectoral restructuring. This may impact on investee companies' performance and valuation metrics, ability to exit investments on a timely basis, ability to raise new funds and ability to make new investments.

Mitigation: Deployment of funds into a number of investee companies across a diverse range of sectors. TPIM has been in close contact with investee companies to ensure that they are able to maximise their runway during the disruption caused by the Covid-19 pandemic, and the Company regularly monitors their performance and appropriateness of their valuations.

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

Mitigation: The Board maintains a risk register which sets out the risks affecting both the Company and the investee companies in which the Company is invested. This risk register is reviewed and updated at least annually to ensure that procedures are in place to identify the principal risks which may affect the Company and its portfolio companies, mitigate, and minimise the impact of those risks should they crystallise and to identify emerging risks and to determine whether any actions are required. This enables the Board to carry out a robust assessment of the risks facing the Group, including those risks that would threaten its business model, future performance, solvency or liquidity and reputation.

Emerging Risks

Climate Change and related legislation

Taking into account the potential impact of climate change and any related legislation which may be enacted in respect of meeting the UK's climate change targets, an assessment of the key risks for each share class has been considered. If a change in Government renewable energy policy were applied retrospectively to current operating projects including those in the A Share Class, or indirectly through interests in the B Share Class, this could adversely impact the market price for the Hydro Assets or the value of the green benefits earned from generating renewable energy. Further, performance of Hydro Assets may be adversely affected by lower or more concentrated rainfall in Scotland. Nevertheless, the hydro companies continue to perform well, and as such performance will continue to be monitored closely. The risk of climate change and related legislation has already impacted the B Share Class gas-fired energy centres, as discussed further in the Investment Manager's Review on pages 41 to 43. Climate Change or related legislation is unlikely to have a major impact on the Venture Share Class by the nature of its investments and diversification of its portfolio.

Going Concern

The Company's business activities, together with the factors likely to affect its future development, performance and position, are set out in the Investment Manager's Report. The Company faces a number of risks and uncertainties, as set out above.

The Company's going concern position is discussed in more detail in note 1 to the financial statements. The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least 12 months from the date of approval of this report. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

The Financial Risk Management objectives and policies of the Company, including exposure to price risk, interest rate risk, credit risk and liquidity risk are discussed in note 17 to the financial statements.

The Company continues to meet day-to-day liquidity needs through its cash resources and income from its investment portfolio. The Company's revenue comes predominantly from its A Share Class investments. The Hydro portfolio is contractual, with inflation linked FiT income and Export income from a recently signed 12-month PPA. We have experienced minimal disruption to these revenue streams as a result of COVID-19. The Company also continues to raise funds into the Venture Share Class and at the reporting date the Company had cash of £5.45 million. A further £5.49 million has been raised since the reporting date. This cash is more than sufficient to enable the Company to continue as a going concern for the foreseeable future.

The Company had net current assets of £5.496 million (2020: £19.4 million) and had cash balances of £5.45 million (2020: £2.07 million) (this does not include cash balances held within investee companies), which are sufficient to meet current obligations as they fall due. The Company has subsequently raised circa £5.49 million post year end considerably increasing the Company's cash runway.

The major cash outflows of the Company continue to be the payment of dividends to Shareholders, costs relating to the acquisition of new assets, and management fees due to the Investment Manager. With dividends and acquisition costs being discretionary, in a time of stress, the Investment Manager may allow the Company to defer payment of management fees.

The Directors have reviewed cash flow projections which cover a period of at least 12 months from the date of approval of this report, which show that the Company has sufficient financial resources to continue in operation for at least the next 12 months. Accordingly, the Directors continue to adopt the going concern basis in preparing the financial statements.

Viability Statement

The AIC's Code of Corporate Governance requires the Board to assess the Company's viability over an appropriate period, the Directors have assessed the prospect of the Company over a longer period than 12 months required by the Going Concern provision.

The Board conducted this review for a period of five years, which was considered to be an appropriate time horizon, as investors in VCTs are required to hold their investment for a period of five years in order to benefit from the associated tax reliefs.

The Board has determined that five years up to 28 February 2026, is the maximum timescale over which the future position of the Company can be forecast with a material degree of accuracy and therefore is the appropriate period over which to consider the viability.

In order to assess this requirement, the Board regularly considers the Company's strategy and considers the Company's current position. The Board has carried out a robust assessment of the principal and emerging risks, including those that would threaten the Company's business model, future performance, solvency or liquidity and reputation. Consideration has also been given to the Company's reliance on, and close working relationship with, the Investment Manager. This has enabled the Directors to state that they have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment.

The Board has considered both the Company's long-term and short-term cash flow projections and considers these to be realistic and reasonable.

More information on the principal risks of the Company is set out on pages 25 to 26.

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

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

· The Company has no employees, only Non-Executive Directors, and consequently does not have redundancy or other employment related liabilities or responsibilities;

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

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

· The Directors have considered the ongoing and future effects of the COVID-19 pandemic on the Company and its longer-term viability. More detail on this is included in the Principal Risks and Uncertainties section on pages 25 to 26.

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

Section 172(1) Statement

The following disclosure describes how the Directors have had regard to the matters set out in Section 172(1)(a) to (f) when performing their duty under Section 172 and forms the directors' statement required under Section 414CZA of the Act.

This section describes how the Board engages with its key stakeholders, and how it considers their interests when making its decisions. Further, it demonstrates how the Board takes into consideration the long term impact of its decisions, and its desire to maintain a reputation for high standards of business conduct.

Stakeholder Engagement

This section describes how the Board engages with its key stakeholders, how it considers their interests and the outcome of the engagement when making its decisions, the likely consequences of any decision in the long-term, and further ensures that it maintains a reputation for high standards of business conduct.

Principal Decisions

Below are the principal decisions made or approved by the Directors during the year. In taking these decisions, the Directors considered their duties under Section 172 of the Act. Principal decisions have been defined as those that have a material impact to the Company and its key stakeholders, as defined above.

Dividends

The Company declared dividends during the year to A Share Class holders of 6.75 pence per share, B Share Class holders of 5 pence per share and the first Venture Share Class dividend of 3 pence per share.

This decision represented the culmination of a significant return of Capital for A Share Class holders, taking total distributions to 70 pence per share, and the annual dividend for B Share Class holders. The Venture Share Class were also paid their first dividend. Consideration was given to the reserve position of the Company to be able to facilitate these distributions.

Impact of COVID-19

During the year, the most significant issue to which the Board has had to give full and repeated consideration to, is that of the global pandemic. The Board has met regularly during the year to discuss the crisis and the impact which it has had on the portfolio companies and implement any necessary actions to mitigate the impact of COVID-19.

During the lock-down period, the Board ensured its main service providers had all effectively implemented their business continuity plans and were able to continue working remotely, with no impact to the services provided to the Company.

Investments

During the year, the Company made nine new qualifying Venture Fund investments and two follow on investments in to existing portfolio companies. The Directors considered that each investment could generate significant long-term capital growth for Shareholders, whilst enabling investors to take advantage of the substantial tax reliefs available to investors in VCTs.

When approving the proposed acquisitions, the Board considered the exit assumptions and valuation justification of the investee companies in addition to considering the societal impact of each investment.

Strategic Report

Investment Manager's Review

Sector Analysis

The unquoted investment portfolio can be analysed as follows:

* Other SME funding includes £485,000 of Venture Fund investment into a UK-based LLP which provides finance to small and medium-sized enterprises.

Investment Manager's Review

We have pleasure in presenting our annual review for the year ended 28 February 2021.

This was the second year for the Company's new Venture Fund, and despite ongoing challenges, we have adapted to the new landscape and during the year have successfully raised an additional £8 million after costs and deployed a further £3.7m into nine new portfolio companies and participated in two follow-on funding rounds for existing portfolio businesses.

The Investment Manager is relatively fortunate in that the majority of our revenues are recurring, which gives us a higher than average level of predictability in our income streams. We have managed to operate effectively with remote, or home working, and as such we do not depend heavily on the regular physical presence of staff in one specific location though, of course, the sales process is often impacted by the lack of face-to-face meetings. We are now beginning to look forward to getting people back together as the recovery continues and lockdown restrictions are gradually eased.

One defining feature of venture capital investing, is that investments are traditionally made via equity, rather than debt financing. Often in time of heightened pressure, it is often the excess debt burden that can cause a company to collapse quickly in circumstances such as the current crisis. All our Qualifying Venture Portfolio Companies are funded mainly with equity, with only one or two companies having any meaningful debt. Some of our companies benefited from the unprecedented COVID-19 related measures put in place by the UK Government in 2020, such as the furlough scheme and the Bounce Back loan scheme. As discussed below, the Government has now announced further support initiatives for smaller companies as the economy recovers.

The net cash outflow to Shareholders for the year was £1.37 million. However, after the year end, the Company allotted an additional £5.49 million of net applications under the latest Venture Fund offer for subscription, meaning that the Company and the Venture Fund remain well capitalised to take advantage of new investment opportunities.

Review & Future Developments

Both the A and B Share Class remain fully invested in both companies in the hydroelectric power sector and the gas power sector. Despite the COVID-19 crisis, investments across both share classes continue to generate electricity. These companies fortunately suffered no significant operational delays because of the COVID-19 pandemic. Global supply chain disruptions did not materialise and affect the companies in the sourcing of key components for both the hydroelectric and gas power projects.

The Budget presented by the Chancellor in March 2021 impacts start-up companies in the UK, notably Fintech businesses, yet the industry will need continuing support from private investors to reach its full potential. One key initiative with impact is the Recovery Loan Scheme which will make available loans between £25,000 and £10 million to help businesses of all sizes through the next stage of pandemic recovery. In addition, a new Future Fund was announced which aims to help bridge the growth capital gap. We view this a positive development for start-up businesses and founders, hopefully this will continue to encourage innovation in the UK. The £375 million fund will look to invest in innovative companies, including Fintechs that are aiming to raise at least £20 million to mitigate negative impacts of the pandemic. This follows last year's £1 billion Future Fund initiative, under which the government invested in 1,000 technology start-ups. The HM Treasury response to the Kalifa Review, published in February 2021 setting out a five-point plan of recommendations is awaited to understand how the landscape could change even further. Triple Point view these developments positively, we believe this focus on start-ups is encouraging for the VCT industry, and, as a result, we expect the VCT sector to continue growing and we hope to be able to capitalise on the growth, and continue to expand the Venture Fund.

And finally, a new fast-track visa program for the tech industry seeks to mitigate negative Brexit impacts. The Chancellor confirmed plans to introduce fast-track technology visas for employees of UK start-ups. The visa scheme will allow skilled migrants with a confirmed job offer from a tech firm to bypass certain requirements that would otherwise slow the process. As a result of these measures, we expect the venture funding market to remain very active, with a lot of capital available.

A Share Class

The hydro assets and the A Share Class have finite lives and due to the latest changes in VCT legislation, the A Share Class is unable to make new investments into renewables. Consequently, the NAV of the A Share Class, being the present value of all the future cash flows generated by the assets will begin to fall as the remaining Feed-in-Tariff periods begin to approach expiry and the operating lives of the assets begin to decrease.

As the UK continues the transition to net zero, the secondary market for renewable assets like those owned by the A Share Class has shown signs of recovery from the disruption of the Covid-19 pandemic and, in the opinion of the Board and Investment Manager it could be an opportune time to optimise value for Shareholders.

The Board recently engaged with an independent financial adviser to seek indicative prices for the hydro companies' assets to confirm this view. As a result of this exercise, the Board has decided to leave the valuations of the hydro companies unchanged for this period. The current carrying value of our hydro assets sits towards the upper end of the range provided by the independent financial adviser. Though it must be noted that we believe some of the underlying assumptions underpinning the valuations are at the conservative end of the spectrum and a buyer may well be more bullish in their assumptions, in particular those around the proposed capital structure of the investee companies.

The Board and the Investment Manager have begun to consider the potential returns and risks for Shareholders from remaining invested, as compared to selling the assets. A detailed analysis of returns on a sale scenario and a hold to maturity scenario are currently being run.

The A Share Class has investments in five hydroelectric companies which between them own six hydroelectric schemes in the Scottish Highlands. All six schemes have been commissioned and are operational. Small-scale hydro is highly efficient, and it remains one of the cheapest forms of renewable electricity per unit. We believe hydro has a key role to play in the development of the world's renewable energy resources. 

The six electric schemes are "run of river" plants which capture river flow agreed above a certain level, as determined by the Scottish Environment Protection Agency ("SEPA"). Water flow is generally captured before a descent and flows down the penstock (pipe) to a turbine engine which produces electricity. The water is then returned to the river. Run of River systems have the advantage of a long operational lifetime, with minimal maintenance. Also, these systems tend to generate the most electricity in the colder months when the demand is greater for electrical heating and extra lighting. 

During the period to 28 February 2021, the hydroelectric companies generated 10,750 MWh of electricity. Based on an average of 3.8 MWh annual use per household, the companies generated enough electricity for 2,828 homes during the period.

The hydro companies benefit from UK government backed Feed-in Tariff ("FiT") payments based on output and from the sale of the electricity produced to utilities or other power companies under PPAs. 

Performance across the portfolio in the 12 months to December 2020 was varied, with three schemes considerably outperforming their generation targets and three underperforming. In total, the six schemes achieved 98% of their forecast generation for the 12 months. Despite this minor underperformance, the portfolio achieved 3% revenue above expectation, as a result of favourable PPAs for some schemes.

Industry Update

As we have previously highlighted the hydroelectric companies, together with other industry members and the British Hydropower Association ("BHA"), had been lobbying the Scottish Government to recognise the concern on business rates in the hydro sector. As a result of this, the Tretton Review report was published in January 2020, which unfortunately found that no changes to business rates would be applied, which was disappointing. The report suggests temporary government reliefs, which do not apply equally across the sector and are not guaranteed, should continue, rather than recommending an industry-preferred permanent solution to the unfair rateable value increase in 2017 which far outstripped that faced by other businesses.

The BHA along with other industry members continues to pursue this matter and is putting forward different ideas to the Scottish Government. In September 2020 the BHA responded to a "HM Treasury call for evidence 2020", stating amongst others, the present system of reliefs and exemptions is over complicated and does not deliver their intended outcomes. The BHA notes there are currently 26 potential reliefs and 14 exemptions. By definition, these reliefs only offer temporary support and create significant levels of uncertainty for hydro operators and developers and potential investors. We will continue to monitor the situation, and report to investors as the situation develops.

B Share Class

The B Share Class remains fully invested with two Qualifying Investments in companies operating gas fired energy centres. Both energy centres were commissioned back in May 2018 and consist of containerised gas combustion engines that generate electricity for onward sale, especially at times when there is high demand for power. 

In June 2019, the UK Government became the first major economy in the world to pass laws to end its contribution to global warming by 2050. The target will require the UK to bring all greenhouse gas emissions to net zero by 2050, compared with the previous target of at least 80% reduction from 1990 levels. As a result of this, the UK is aiming to close its coal-fired power plants by 2025, and it is therefore expected that there will be increased pressure on the supply of energy in the UK during periods of peak demand. Although renewable energy makes an increasing contribution, the irregular nature of its production means that other baseload sources will also be required to help make up the deficit.

The UK still experiences significant peaks and troughs in energy consumption. From unexpected cold snaps that prompt consumers to turn up their heating, to the mass switching on of televisions between 4-7pm when people return home from work. Gas fired energy centres help to solve these short-term peaks in the electricity demand profile. These are small power plants fuelled by gas, and generally run only when there is a high demand for electricity. They bypass the nationwide transmission system to deliver power direct to local distribution networks. Natural gas neatly bridges the gap between environmentally unfriendly fossil fuels and more irregular solar and wind power.

Valuation update

In anticipation of the B Share Class reaching the end of their five-year holding period, the Company considered the future of the assets held by the B Share Class and undertook a competitive bid process which yielded bids that were below the valuation. As a result, the Board considered the current holding valuation of the assets included in the competitive bid process, Green Peak Generation Limited and Distributed Generators Limited (the "Gas-Fired Assets"). The revised valuation considered feedback received from Independent Advisers and market participants as part of a sales process started last year, where a portfolio of nine companies including the Gas-Fired Assets were brought together for sale. An independent report from an experienced corporate finance adviser was commissioned to gauge the market interest and value attributable to these companies and unfortunately this report corroborated the bids we had seen during the process.

The initial sale valuations for the companies were based on an indicative, non-binding offer received from one of the most experienced and leading investors in the gas-fired energy centre sector. Disappointingly, the indication from this process is that based on the market view is of there being headwinds for the energy sector which are likely to continue over the next 1-2 years, including potential changes to the taxation of carbon emissions and changes to the calculation of electricity network charges.

As reflected in the independent report, the Enterprise Valuation ranges for both companies were considered to reflect the fair market value as at the Valuation Date, taking into account observed market comparator benchmarks and asset-specific risks, which have been reflected in their range of valuations. However, it was noted that due to the capacity and nature of the Gas-Fired Assets relative to market comparators, we would expect the valuation of the Gas-Fired Assets to sit at the lower end of the enterprise value ranges outlined.

We have used this information to guide our valuation of the companies, and in doing so, took account of the following:

1) Potential bidders evaluated purchasing the businesses against constructing and operating new energy centres. The cost of building gas-fired energy centres today is less than the original build price of the plants and new centres can apply for long term, 15-year capacity market contracts providing a valuable additional income stream. In contrast the VCT rules preclude the companies from holding such a contract.

2) At the outset, the companies' energy centres were expected to have a project life of c.30 years based on technical due diligence of the longevity of the equipment and the term of the lease for the centres themselves. In contrast the market is assuming, and pricing in, an operational life of 20 years following an acceleration of the Government and the public's desire to phase out fossil fuels in favour of alternatives.

3) Bidders' feedback also included that they were applying valuation discounts relating to the regulator Ofgem's review of the embedded benefits regime (around which there are substantial uncertainties), future Balancing Market revenues, assumed terminal values, embedded benefits, and site-specific factors including recent availability issues.

Unfortunately, compared to the valuation presented at 29 February 2020 the valuation has fallen 47% or £2.65 million to a combined total valuation of £2.97 million. We endeavour to achieve optimised value for B Share Class shareholders.  

During the period to 28 February 2021, Green Peak Generation Ltd generated 17,259 MWh of electricity, and Distributed Generators Ltd generated 11,710 MWh of electricity. Based on an average of 3.8 MWh annual use per household, the energy centres generated enough electricity for 4,542 and 3,082 homes respectively during the period.

Historical performance of these assets versus the technical expectations has been modest. Since moving to the new O&M provider there has been an uptick in availability and therefore generation which we would expect to continue. This is through faster response and repair times with the O&M provider having a greater depth of experience. There has been a reduction in number of faults through better preventative maintenance procedures. Looking forward, we hope to continue working closely with the new provider to continue to improve operational efficiencies and performance across both companies.

Further, no dividend has been declared at this time in respect of the B Share Class due to insufficient cash previously generated by the B share class or a sale of its assets.

Industry Update

As previously reported, Ofgem continues to conduct its review into system charges such as generator distribution use of system charges, or "GDUOS" via its Network Access and Forward-Looking charges review. Depending on the outcome, this may impact the embedded benefits that small generators such as the companies receive. Whilst Ofgem has released further information on the shortlist of options it is considering, it is currently unclear what the outcome of this review will be, and therefore remains a risk that this income stream may be reduced in the future if the outcome of the review results in a reduction in these embedded benefits.

Ofgem is expected to present its draft decision on reform of these charges in 2021 (originally expected in late 2020).

In addition, Ofgem has consulted on whether a further embedded benefit which the Companies benefit from (balancing services use of system charges or "BSUOS") should be cut, on the basis that this is a benefit earned by smaller generators connected to the electricity distribution network, which larger generators connected to the central transmission network do not benefit from, and therefore not leading to a "level playing field". It is now the industry's expectation that this embedded benefit, which is currently a cost to large transmission-connected generators, will be removed, with the net effect of reducing wholesale electricity prices across the market as these generators no longer need to factor this cost into their marginal cost of operations. This is expected to be implemented from April 2023.

Venture Fund

This is the second year for the Venture Fund. It has been a challenging and busy period for the Venture team, but we have made excellent progress in deploying funds. The Venture Fund has completed nine qualifying investments in the year, plus two follow-on investments into a diverse range of sectors spanning Cybersecurity to Fintech. The portfolio now consists of 19 qualifying companies.

Small businesses are the backbone of the UK economy, making up c.60% of private sector employment and c.99.3% of all private sector businesses. For these reasons, the UK government recognises the importance of supporting and encouraging investment into this sector. As described above, this has been evidenced throughout the pandemic and with the measure announced by the Chancellor in his latest budget.

The biggest sector theme running through the Venture Fund so far is Fintech, a sector where TPIM has particular experience and which includes companies involved in activities such as business banking software, payments systems, and an insurance platform for SMEs. Fintech is an emerging industry that uses technology to improve activities in finance and one that the UK Government is visibly keen to support with the aim of establishing the UK as the dominant Fintech hub within Europe. Our portfolio companies are helping businesses to replace or enhance the usage of financial services provided by existing financial companies. 

To date, our portfolio companies are all software firms, with most of the businesses having Software-as-a-Service (SaaS) as their business model. Under this model, customers will typically sign up for an annual contract or a monthly subscription and pay in advance or pay monthly for the use of the software, helping to generate recurring revenue streams.

All of our portfolio companies are currently following a business to business ("B2B") operating model, which means they do not sell direct to consumers. This has proved to be beneficial during the COVID-19 pandemic where leisure, physical retail and hospitality businesses have been particularly hard hit by the COVID-19 pandemic related lockdowns. Within the portfolio there are a variety of business customers served, including large enterprises, SMEs, education providers and GP surgeries.

While the fund has invested in several Series A funding rounds, there is also a significant allocation of portfolio funds to Seed stage deals. These earlier stage funding rounds have a higher potential for outsized returns if they are successful. Though, coupled with this upside is the potential for these businesses to fail. The average "pre-money" valuation of Series A stage funding round is three times that of Seed stage. In making our portfolio investments, we are usually co-investing, either with other Venture Capital firms, with our own business angel network or with other corporate partners.

Many, though not all, businesses that the Venture Fund invests in, will involve the use of new technology and would be classified as "knowledge-intensive" by the HMRC rules, very much the types of innovative British businesses that the UK government wishes to see backed by VCT capital.

The Venture Fund looks to maximise shareholder returns by investing in innovative early-stage businesses, typically at the point they have achieved market validation, which can be accomplished by securing a contract with an established corporate. When making investments, we have a key investment criterion that we are looking for:

i. Significant addressable target market;

ii. Indication or firm commitment of a transformational corporate contract and established market fit;

iii. Innovative product/intellectual property;

iv. Strong management team;

v. Aligned appetite for growth and path to long-term profitability;

vi. Realistic prospect of achieving an exit after the expected holding period; and

vii. Board rights where this is practical.

The Responsible Investing section on page 51 sets out how ESG considerations are taken into account through the investment process within the Venture Fund.

The Venture Fund aims to mitigate some of the risks typically associated with venture capital investing by proactively working with businesses with the potential for high growth that are actively solving problems for established corporates, increasing their chances of success. We call this our Challenge-Led Approach, where we are able to talk with customers and potential customers about their appetite for the products and services of our potential investees.

A snapshot of the companies we have invested in during the year can be seen below.

More detail on the Challenge-Led approach in action can also be seen overpage.

Heydoc

What does the company do?

Heydoc is a clinical system ("HER") built to enable medical clinicians and admin staff to complete their day-to-day work in one place rather than needing to use multiple systems. The software covers the entire patient journey, saving the medical clinicians' time, enabling them to spend more time treating patients.

Problem being solved

Clinicians spend on average 6 hours per day on their clinical system and many clinicians continue to use legacy EHRs that are not user friendly. Frustratingly for the clinicians, these systems result in having to sometimes switch between multiple systems, deal with tedious admin levels which leads to medical errors and plenty of wasted pounds.

Heydoc saves staff in total an average of 3 hours per week (according to 60% of clients).

Company solution

Heydoc provides for its clients, one system that covers the entire patient journey and allows clinicians and their assistants to perform all their tasks in one convenient place.

Features includes:

o Online appointment booking;

o patient notes;

o follow up and test results;

o Integration with pathology labs;

o Drug and disease databases;

o Invoicing;

o Payment integration;

o GDPR compliant Patient communication;

o Video consultation;

o Accounting Integration;

o Cloud based and mobile/tablet friendly; and

o Open API

Sealit

What does the company do?

Sealit is a simple to use, human centric, biometric security app for emails, files and passwords. Sealit uses composite encryption keys, which means that a single encrypted file or email can be opened by multiple target recipients without Sealit having to host the message data. The process of sending secure files is made easier, no passwords to remember, when decrypting the data, users simply present their biometric identity (face or fingerprint) on their smart phone and Sealit orchestrates the decryption process.

Sealit integrates with day-to-day activities on your computer and phone to make security a natural behaviour.

Problem being solved

There has been an exponential increase in global data volumes, with a greater number of the population now working from home, increases in cyber security threats and evolving regulation mean there is a greater need for companies and individuals to take data protection more seriously.

The cost of a cyber breach has tripled in the last four years, and the fines are getting bigger with GDPR prescribing fines of up to 4% of annual turnover or €20 million whichever is greater. The top five fines for 2020 total €152.9 million so far.

The number one cause of data breaches is human error.

Company's solution

The company aims to mitigate the problem of human error. Sealit "locks" single files or emails on the host device. It is not hosted or stored on Sealit's server. As a result, only recipients with the encryption key can open the file or email.

The recipient opens the file or email using their biometric identity (face or fingerprint) via their smart phone.

No more passwords to remember (or lose). No more sending an email or file to the wrong person. No more centralised updating of permissions on shared folders.

The company is targeting small and medium-sized businesses across Europe, starting in the UK. The target market is potentially huge. In today's current data driven economy, almost every company has sensitive data it wishes to protect.

Offer for subscription

The Company currently has a Venture Fund offer for subscription open to new investors. This offer has so far to date resulted in funds being raised in excess of £5.49 million and 5,867,573 new shares allotted. For all investments in the 2021/22 tax year, the Offer will remain open until 30 July 2021 unless fully subscribed at an earlier date. The Board have the discretion to extend the open offer to 13 September 2021 if required.

Outlook

The economic outlook remains uncertain, however, we remain very excited about the potential opportunities ahead. If anything, COVID-19 really should illustrate the attractions of investing in UK small and medium-sized companies as many businesses, including those in our portfolio, have performed strongly through the pandemic, reflecting the strength of their offering and the global universe they serve.

History has shown that crises can accelerate industrial trends, market share shifts, and changes in consumer behaviour. It was expected in March last year that this would be the case with COVID-19, but we have been surprised by the speed and scale of the level of dispersion of financial performance that it has created across sectors and businesses both at home and abroad. Some companies have been hit extremely hard, particularly those in the leisure and tourism industries, while others have been able to take market share at an accelerated rate.

We remain of the firm belief that there are sizeable opportunities for companies that can differentiate themselves and/or are exposed to long-term secular trends, while the pressure on cash flows for struggling companies is intensifying. We intend to continue to be prudent but looking at the current and potential future venture landscape we expect there to be more opportunities to invest in high quality, better capitalised companies, with lower valuations and more availability of talent.

These investments will likely benefit in the coming years, as the economy recovers, and innovation continues.

Ian McLennan

Partner

For Triple Point Investment Management LLP

26 May 2021

Responsible Investing

PRI Signatory Status

Foundational to the Investment Manager's role of being a sustainable and responsible investor is their status as a PRI signatory which underpins our Environmental, Social and Governance (ESG) commitment across all investment strategies.

In 2019, TPIM became a signatory to the PRI. The Investment Manager believes these principles are helpful in guiding and demonstrating best practice in investor ESG integration. They also help promote a closer alignment between the objectives of institutional investors and those of society at large. The principles are voluntary and intended to be actionable and measurable.

TPIM seeks to promote these principles throughout our business and all investment strategies.

ESG Integration Approach

We align with international standards and good industry practice, including monitoring industry regulation (such as the UK Bribery Act and UK Companies Act) and investor-led initiatives (such as the PRI), as the foundation of our ESG integration approach. Using these foundational principles, we have developed an in-house approach to drawing out maximum value from ESG integration. We place proportionate expectations on the Company, according to its sector, size and stage of growth. The careful crafting of our method adds, we believe, a further strength to the investment process.

It is the Investment Manager's belief that retrofitting a sustainable business mindset and model, can be time consuming and challenging further down the line. We invest for growth and so we take a considered judgement that these issues could come to bear during ownership or at exit, if they are not considered at the point of investment.

To ensure the effective and consistent application of this approach, the Investment Manager operates an ESG Integration Policy which details how ESG considerations are taken into account throughout the investment process, from the point of origination to exit. We take a practical, proportionate and material approach to ESG integration, containing two key elements:

1. Management (Culture, Capacity & Governance) - this refers to the allocation of appropriate resourcing, training and senior support to ESG integration. It demonstrates Triple Point's actions have integrity aligned with the strategic position of the Company and oversight from senior management. Examples of which include:

a. Training across our investment team on ESG

b. Training of our Investment Committee on ESG

c. Providing greater transparency on our approach to ESG

2. Investment (Process & Reporting) - this refers to action taken in the investment process to assess and improve ESG factors affecting the target asset, how these might affect an investment decision and how we capture decisions and changes to ESG factors during our asset ownership. Examples of which include:

a. Formal reviews by the team of ESG trends and topics at a micro, macro and sector level to feed into origination process

b. ESG due diligence process with results included at Investment Committee

c. Sharing areas of weakness, with constructive guidance, on how to progress so Company awareness on a range of ESG issues develops with ownership

We are committed to evaluating the success of our approaches.

Our investment teams report to our ESG Committee on selected ESG KPIs and where possible we measure and report where we believe we have influenced better or faster progress towards greater sustainability either as a business, an employer, or an investor.

The aim of Triple Point VCT 2011 plc is to invest in smaller UK businesses to help them grow, with the primary objective of delivering strong financial returns. However, the Company and the Investment Manager are increasingly mindful of the impact, that our activities and those of the businesses in which we invest have not just on the environment, but also their employees, communities, and society at large.

The Company believes that its investment activities have many positive benefits beyond the returns we deliver for Shareholders. In the case of the Venture fund investments, these businesses help create new employment, develop, and implement new technologies and products, improve productivity all of which contribute to the UK economy and have benefit to those employed in those businesses and their supply chains.

During the continuing COVID-19 pandemic, some of our investee companies have been using their technologies to help where they can:

Heydoc, a company that provides a modern patient management system for clinicians and medical staff, is providing free video consultations for all HeyDoc users during the COVID-19 crisis. 

Quit Genius gave employees of new clients access to its digital tobacco and vaping cessation programme at no cost to their employer if they signed up in March and April 2020. According to the World Health Organisation2, smoking is associated with increased disease and death in hospitalised COVID-19 patients.

Fintech portfolio company Credit Kudos moved quickly in March 2020 to use its skills in open banking technology to help the self-employed survive financially during the first COVID-19 lockdown. Credit Kudos formed part of a small consortium that worked over a weekend to create and launch a free product that acquires and analyses the data necessary to demonstrate to government agencies whether an individual has lost income as a result of lockdown, and thus whether they qualify for support programmes.

2Scientific Brief, 30 June 2020, World Health Organisation, https://www.who.int/newsroom/commentaries/detail/smoking-and-covid-19

Investment Portfolio Summary

Qualifying holdings

Non-qualifying holdings

Financial Assets are measured at fair value through profit or loss. The initial best estimate of fair value of these investments that are either quoted or unquoted on an active market is the transaction price (i.e., cost). The fair value of these investments is subsequently measured by reference to the enterprise value of the investee company, which is best deemed to reflect the fair value. Where the Board considers the investee company's enterprise value to remain unchanged since acquisition, investments continue to be held at cost less any loan repayments received.

Ten Largest Unquoted Investments

\* The Directors consider the fair value to be equivalent to the par value.

The Strategic Report has been approved by the Board and signed on their behalf by the Chair.

Jane Owen

Chair

26 May 2021

GOVERNANCE

Board of Directors

Jane Owen is the Chair of the Board of the Company. After graduating in law from Oxford University, Jane was called to the Bar in 1978 and until 1989 was a practising barrister in the chambers that are now 3 Verulam Buildings. Subsequently, Jane became UK group legal director at Alexander & Alexander Services, and was appointed Aon's General Counsel in the UK in 1997, a position she held until 2008, where she was also a director of Aon Limited from 2001 to 2008. She was also a Non-Executive Director of TWG Europe Ltd and related companies and a Governor of James Allen's Girls' School.

Chad Murrin graduated in law from Cambridge University, and then qualified as a barrister. He worked for 3i Group plc from 1986-2004, the last five years as 3i's Corporate Development Director. In 2004, he set up his own corporate advisory business, Murrin Associates Limited. He holds the Advanced Diploma in Corporate Finance from The Corporate Finance Faculty of the ICAEW. He is a Non-Executive Director of Keytask Management Limited, E.W. Beard (Holdings) Limited, Procom-IM Limited and other companies.

Tim Clarke graduated in PPE from Oxford University. He joined Panmure Gordon & Co as an equities analyst, subsequently becoming a Partner and Head of Research. He joined Bass PLC in 1990, holding a number of operating roles in the Hotels, Pub and Restaurant divisions before becoming Chief Executive in 2000. Following its demerger he was Chief Executive of Mitchells & Butlers PLC until 2009. He was a Non-Executive Director of Associated British Foods PLC from 2004 until 2017. He is currently Chair of Birmingham Airport, Chair of Timothy Taylor & Co Ltd, and a Non-Executive Director of Hall & Woodhouse Ltd. He is Governor of the Foundation of the Schools of King Edward VI in Birmingham. 

CORPORATE GOVERNANCE

Compliance Statement

The Board of Triple Point VCT 2011 plc has considered the Principles and Provisions of the Association of Investment Companies Code of Corporate Governance 2019 (AIC Code). The AIC Code addresses the principles and Provisions set out in the UK Corporate Governance Code (the "UK Code"), as well as setting out additional Provisions on issues that are of specific relevance to Triple Point VCT 2011 plc.

The Board considers that reporting against the principles and provisions of the AIC Code, which has been endorsed by the Financial Reporting Council, will provide improved reporting to Shareholders.

The Company has complied with the Principles and Provisions of the AIC Code except as set out below:

The AIC Code is available on the AIC website (www.theaic.co.uk). It includes an explanation of how the AIC Code adapts the Principles and Provisions set out in the UK Code to make them relevant for investment companies.

Board of Directors

The Board comprises three Non-Executive Directors.

The Board's role is to promote the long-term sustainable success of the Company, generating value for its Shareholders and contributing to a wider society.

All Directors are considered independent and day-to-day management responsibilities are delegated to the Investment Manager. The Directors have a combination of skills, experience and knowledge which are relevant to the Company. Biographies of each director are presented on page 60 of this report.

The Directors are provided with key information on the Company's activities, including regulatory and statutory requirements, by the Investment Manager and Company Secretary.

The Board has direct access to the Company Secretary and may also take independent professional advice at the Company's expense where necessary in the performance of their duties. During the year, the Board was satisfied that all Directors were able to commit sufficient time to discharge their responsibilities effectively having given due consideration to their other significant commitments. The Directors were advised on appointment of the expected time required to fulfil their roles and have confirmed that they remain able to make that commitment. No external appointments accepted during the year were considered to be significant for the relevant Directors, taking into account the expected time commitment and nature of these roles.

All Directors have sufficient time to meet their Board responsibilities and provide constructive challenge, strategic guidance, offer specialist advice and hold third party service providers to account.

The Chair, Jane Owen, leads the Board and is responsible for its overall effectiveness in directing the Company. The Chair leads the process in determining its strategy and the achievement of its objectives. The Chair is responsible for setting the Board agenda focusing on strategy, performance, value creation, culture, stakeholders and ensuring that issues relevant to these areas are reserved for Board decision. The Chair facilitates constructive Board relations and the effective contribution of all the Directors, encouraging a culture of openness and debate and ensures the Directors receive accurate, timely and clear information. The Chair does not have significant commitments which conflict with her Board responsibilities.

Appointment of New Directors

Any appointment to the Board is subject to a formal, rigorous and transparent procedure and is based on merit and objective criteria which promotes diversity of gender, social and ethnic backgrounds, cognitive and personal strengths. 

Company's Operations

The Investment Manager has authority over the management of the investment portfolio, the organisation of custodial services, accounting and administrative services. The Investment Manager makes investment recommendations for the Board's approval.

The Board meets regularly in person or via conference call at least four times a year, 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 which includes:

• Review investment performance and monitor compliance with the investment policy;

• 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 and the Company Secretary;

• The performance of the Company, including monitoring the net asset value per share;

• Monitoring shareholder profiles and considering shareholder communications; and

• Approving major investments.

The Company Secretary, Hanway Advisory Limited, is responsible for ensuring that Board procedures are complied with, advising the Board on all governance matters, supporting the Chair and helping the Board and its committees to function effectively. The Company Secretary will also provide the Board with support in ensuring that it has the policies, processes, information, time and resources it needs in order to function effectively.

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 Board reviews the performance of the Investment Manager annually taking into consideration the contractual arrangements and scrutinises their performance. The Board as a whole carries out this review and due to the size of the Board, does not consider it appropriate to establish a separate management engagement committee.

Re-election of Directors

Directors' retirement and re-election is subject to the Company's articles of association and the AIC Code. The AIC Code requires that all Directors should be subject to an annual re-election. The Directors have therefore agreed to submit themselves for annual re-election at the next Annual General Meeting.

Independence of Directors

The Board has a non-executive Chair and two other non-executive Directors, all of whom were considered independent on and since their appointment. All of the Directors are independent of the Investment Manager.

The AIC Code outlines circumstances that are likely to impair a director's independence including whether a director has served on the board for more than nine years from the date of their first appointment. All Directors have served on the Board for nine years or more. Length of service is currently one of several indicators the Board consider when assessing independence. The Board is of the view that a term of service in excess of nine years does not in itself compromise independence and notes the positive contribution that their long-service offers. In particular that they are better able to serve the needs of the Company and its Shareholders by providing experience across the business/economic cycle. The nature of the Company's business is such that the Directors' experience and continuity is critical to promote the long-term sustainable success and future viability of the Company. The Board regularly reviews the independence of its Directors and are satisfied that all Directors remain independent, including in character and judgement.

As part of the annual evaluation, the Directors considered length of service of the Board as a whole and agreed to implement a succession plan that addresses the regular refreshment of Board membership whilst maintaining continuity. Further detail on the succession plan can be found below.

Policy on Tenure of the Chair

The Board considers that the length of time each Director, including the Chair, serves on the Board should not be limited and has not set a finite tenure policy. Continuity, self-examination and ability to do the job are the relevant criteria on which the Board assesses a Director's independence. Length of service of current Directors and future succession planning will be reviewed each year as part of the Board evaluation process.

Succession Plan

The Board continues to seek to achieve a progressive refreshing of the Board, taking into account the challenges and opportunities facing the Board, the balance of skills and expertise, and the need for a diverse pipeline for succession balanced against the benefit of historical knowledge. As such, the Company will commence the process for the appointment for a new Director later in the year, and at least one Director will step down at the Company's AGM expected to be held in July 2022.

Board Committees

The Board only has one committee which is the Audit Committee. The Directors consider that due to the size of the Board, there being no employees or executive directors, it is not necessary to appoint a separate remuneration committee. The remuneration report is detailed on pages 70 to 74.

Board Meeting Attendance

During the period the following Board meetings were held and the number attended by each Director compared with the maximum possible attendance: