TPOA.L Regulatory News (TPOA)

30 May 2022

Triple Point VCT 2011 plc

(the "Company")

RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2022

The financial information set out in these statements does not constitute the Company's statutory accounts for the year ended 28 February 2022, 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 2022.

These results were approved by the Board of Directors on 27 May 2022.

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/investments/triple-point-venture-fund/s7881/.

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

1 Total Return is defined as an Alternative Performance Measure.

Triple Point VCT 2011 plc ("the Company" or "TP11") 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 £6.97 million with a total of 6,824,266 B Shares being issued.

· Venture Fund: On 20 August 2021 the second Venture Fund offer closed having raised gross proceeds of £10.70 million with a total of 8,107,879 additional Venture Shares being issued. Since this offer closed, the Venture Fund has allotted further Shares, with 36,418,808 in issue as at May 2022.

The Strategic Report on pages 6 to 51, the Directors' Report on pages 68 to 71, the Corporate Governance Report on pages 53 to 57 and the Directors' Remuneration Report on pages 62 to 67 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 2022.

Key Highlights

As at 28 February 2022

· Dividends per A Share: 36.50p (Year ended 28 Feb 2021: 6.75p)

· Net Asset Value per A Share: 13.25p4 (Year ended 28 Feb 2021: 52.43p)

· Total Return per A Share 119.75p24 (Year ended 28 Feb 2021: 122.43p)

· Dividends per B Share: Nil3 (Year ended 28 Feb 2021: 5.00p)

· Net Asset Value per B Share: 57.69p (Year ended 28 Feb 2021: 57.36p)

· Total Return per B Share2: 67.69p (Year ended 28 Feb 2021: 67.36p)

· Ongoing Charges Ratio2: 2.94% The ongoing charges ratio is a ratio of annualised ongoing charges expressed as a percentage of average net asset values throughout the year (2021: 3.03%)

· Realisation Proceeds: £3.96m. Realisations of investments and loan repayments generated total proceeds for the Company. (2021: £550k).

· Fundraising: £10.70 million. The Venture Fund offer which closed on 20 August 2021 raised net proceeds of £10.70 million.

· Dividends per Venture Share: 3.00p (Year ended 28 Feb 2021: 3.00p)

· Net Asset Value per Venture Share: 113.55p (Year ended 28 Feb 2021: 93.26p)

· Total Return per Venture Share2: 119.55p (Year ended 28 Feb 2021: 96.26p)

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

2 Total Return and Ongoing Charges Ratio are defined as APMs. The Board considers Total Return to be the primary measure of Shareholder value. Total Return is made from totalling the current Net Asset Value plus Dividends paid to date. More information on Total Return is on page 18.

3 A dividend of 10p was paid following the year-end on 31 March 2022 to B Ordinary Class Shareholders on the register on 18 March 2022.

4 The value to be distributed will also be subject to the performance fee payable on distribution and other relevant fees and costs. As a result the total return may be lower than indicated in this Annual Report.

Strategic Report

Chair's Statement

I am writing to present the Financial Statements for the Company for the year ended 28 February 2022.

I am pleased to announce that during the year we completed the sale of a substantial part of our hydroelectric power portfolio ("Hydro Assets") held in the A and B Ordinary Share Classes, following which a significant portion of the proceeds were distributed to A Shareholders during the year, and to B Shareholders following the year end.

The Board are pleased to welcome Julian Bartlett onto the Board as an Independent Non-Executive Director and Chair of the Audit Committee with effect from 8 February 2022. We would also like to take the opportunity to thank Tim Clarke for his valuable and significant contribution to the Company over the years he has served on the Board. Tim will retire following this year's AGM with our best wishes for the future.

Our Venture portfolio has continued to perform well, having made 11 new qualifying investments and various follow-on rounds due to continued growth, at a total of £9.0 million. The Venture portfolio also successfully completed their first exit at a significant premium shortly after the year end; further detail on the sale can be found below and in the Investment Manager's Review on pages 30 to 41. Partly as a result of this exit but also reflecting strong performance by a number of portfolio companies, the Venture NAV has risen by 21.7% on a total return basis over the year in review.

The Company's funds at 28 February 2022 were 82.67% invested in a portfolio of VCT qualifying and non-qualifying unquoted investments. At the year-end, the Company's Qualifying status percentage was above 80%. This is due to the Company having three years before undeployed cash counts towards the qualifying status under current VCT regulations.

The Investment Manager's Review on pages 30 to 41 gives a more detailed update on the portfolio of investments in 30 small unquoted businesses.

Venture Fund

This is the third year of the Venture Fund and a year of progress after the challenges of Covid-19. The Venture Fund completed its first cash exit shortly after the year-end, on Credit Kudos Limited ("Credit Kudos"), for an over 5x return multiple just two years after the investment was made. Fintech, Middleware (software that acts as a bridge between an operating system or database and applications) and Healthtech have been our most successful sectors having certainly benefited from an accelerated move to digital since the onset of Covid-19. While our Investment Manager's challenge-led approach has performed well to date overall, Shareholders should remain aware that failed investments are a natural part of venture investing.

Continuing intense concerns about Covid-19 at the start of this period have quickly morphed into concerns regarding the combination of higher inflation, higher interest rates and the Ukraine-Russia war. While the direct impact of these factors on the type of software companies that the Venture Share Class invests in should be relatively limited, the Investment Manager is monitoring developments carefully (please refer to the Investment Manager's Review on pages 30 to 41). All in all, we believe that the opportunities abound for seed stage investments and that the existing portfolio remains well positioned for future growth.

The third Venture Fund offer for subscription closed on 20 August 2021 having raised £10.70 million and the fourth offer for subscription is now open. Following the 28 February 2022 year end, the Company allotted an additional 9,973,377 Venture Shares raising £11.2 million, this takes the total number of Shares in issue to 36,418,808. The current fundraise is progressing well and at 28 February 2022, the Venture Fund was 50% up on last year's fundraise, which puts us in a strong position. These allotments and the growth of the Venture Fund has further benefited the Company by way of a reduction in the ongoing charges ratio from 3.03% to 2.94%.

The Venture 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.

In line with the Share Class's key objectives, I am pleased to announce that a further dividend of 3 pence per Share will be paid on 5 September 2022.

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

A Share Class

In July 2021 Shareholders voted to approve the recommendation of the Board and the Investment Manager to dispose of certain of the Hydro Assets which formed the majority of investments held by the A Share Class. Following a competitive bidding process these investments were sold at a price of £4,245,725 which represented 97.5% of their carrying value. Further details on the sale process are set out in the Investment Manager's Review on page 38 below.

As a result of the difference between the sale price and carrying value, together with a small write-down of the investment in Green Highland Shenval Limited, and payment of the performance fee due to the Investment Manager, the A Share Class has recorded a loss over the period of 2.71 pence per share.

Following the disposal of the Hydro Assets, a dividend of 33 pence per share was paid to the A Class Shareholders. A core target of the share class was to deliver a cash return to investors, including the initial tax relief of 100 pence per share by the end of year six. The aggregate of those dividends, the June 2021 dividend of 3.5 pence per share, and the dividend following disposal paid in December 2021, is 106.5 pence per share.

As at the period end the A Share Class held investments in Broadpoint 3 Limited and Green Highland Shenval Limited and recorded a NAV of 13.25 pence per share5. Since the year end, the investment in Broadpoint 3 has been realised at its balance sheet valuation.

The Company is continuing to explore its options to dispose of its minority interest in Shenval, although it is expected that such a sale will only take place once all Shareholders in Shenval are in a position to sell, following which net proceeds of sale will be returned to A Shareholders. At the appropriate time, a proposal will be put to Shareholders for the wind-up and cancellation of the A Share Class.

5To align its interests with Shareholders, the Investment Manager earns a performance fee of 20% on all distributions for the A Share Class over 100 pence per share; as this fee is not payable until distributions are made, it is not accounted in the Net Asset Value.

B Share Class

The B Share Class portfolio has recorded a profit over the year of 0.31 pence per share due to income exceeding running costs. As at 28 February 2022 the NAV per share stood at 57.69 pence per Share.

During the year, a substantial part of the B Share Class portfolio of Hydro Assets were sold which enabled Broadpoint 3 Ltd (through which the B Share Class held an interest) to repay its £1,096,103.43 loan and a portion of the redemption premium to the Company. Following this, the majority of the net proceeds of the sale were returned to B Shareholders through a 10 pence per Share dividend which was declared on 07 March 2022. A small portion of the proceeds have been retained to ensure that the Share class can continue to meet all of its relevant expenditure.

Following the Hydro asset sale, the assets within the B Share Class are two gas fired energy centre assets, Green Peak Generation Limited ("Green Peak") and Distribution Generators Limited ("Distributed Generators"). As reported in our 2021 Interim Report there have been availability issues for the engines with a water ingress issue at Green Peak, and we are pleased to confirm that the fault has been resolved and the insurers have agreed to pay the full insurance claim for property damage and business interruption to the end of January (the Investment Manager's Report has further details on pages 30 to 41). We are working with the Investment Manager to consider offers for the portfolio alongside considering potential disposal options for the remaining B Share Class assets in order to return funds to B Shareholders. In addition, where the Board receives excess cash generated from the gas fired energy assets, it will consider whether it is appropriate to declare an additional dividend. Since mid-June 2021 the Board has exercised its discretion not to facilitate share buybacks in the B Share Class due to insufficient liquidity. To ensure that we are being fair and equitable to all Shareholders, it is our intention that any excess funds in the B portfolio will be returned to all investors through dividends; the Board will continue to monitor this position. At the appropriate time, a proposal will be put to Shareholders for the wind-up and cancellation of the B Share Class.

Liquidity

The Company has sufficient liquidity, predominantly from the Venture Fund raise, with cash and readily realisable investments totalling £6.25 million (18% of net asset value) at 28 February 2022. This means that the Company will be able to react quickly to new investment opportunities for the Venture Fund as they arise.

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 price of 5% discount to NAV. Since mid-June 2021 the Board has exercised its discretion not to facilitate Share buybacks in the B Share Class due to insufficient liquidity. To ensure that we are being fair and equitable to all Shareholders, it is our intention that any excess funds in the B portfolio will be returned to all investors through dividends; the Board will continue to monitor this position.

During the year ended 28 February 2022 a total of 173,848 A Shares, 46,556 B Shares and 252,401 Venture Shares were repurchased by the Company for cancellation at a price of a 5% discount to NAV. The average price paid for the buy-back of Shares were as follows:

These transactions represent 1.48% of the opening issued Share capital of the Company.

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 a report annually 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 Year End Update

Following the year-end, the Company has allotted a further 9,973,377 Shares into the Venture Fund. The Shares were issued at the end of March and 1 April 2022; these further allotments raised additional net proceeds of £11.2 million for the Company. For all future investments in the 2022/23 tax year, the offer will remain open until 29 July 2022, unless fully subscribed at an earlier date.

Outlook

The Board are pleased to have completed the sale of a substantial part of the Hydro Assets within the A and B Share Class, which enabled further dividends to be paid to A shareholders during the year and B shareholders following the year end. It is now the Board's aim to sell the remaining assets within the A and B share classes as set out above, returning the net proceeds to Shareholders, and at the appropriate time, putting a proposal to Shareholders to wind-up and cancel both the A and B Share Classes. 

The Venture Fund has seen several uplifts in NAV, a successful fundraise, and its first cash exit for Credit Kudos, which was completed shortly after the year end. The Board will continue to consider dividends for Venture Shareholders, subject to realised profits, legislative requirements and liquidity. I am delighted to announce that a further dividend of 3 pence per Share will be paid on 5 September 2022 to Venture Shareholders.

As I noted above, intense concerns about Covid-19 have quickly morphed into concerns about the combination of higher inflation, higher interest rates and the Ukraine-Russia war. Whilst the direct impact of these factors on the type of software companies that the Venture share class invests in are usually limited, the Investment Manager is monitoring developments carefully, including both the impact on investee cash flows of inflation in skilled staffing costs, particularly in software development and digital marketing, and the potential impact of rising bond yields on tech sector valuations (see Investment Manager's Review on pages 30 to 41). Despite the current uncertainty, we believe that the Fund's existing portfolio remains well positioned for future growth and that the recent successful fund raise and exit proceeds leave the share class in a strong position to pursue opportunities as they develop.

I would like to take this opportunity to thank Shareholders and the Investment Manager for their continued support and I look forward to welcoming further Venture Fund Shareholders during the months ahead.

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

Jane Owen

Chair

27 May 2022

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 five 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, and will seek realisations to enable an exit at the appropriate time.

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 five 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 Company, being the Company and any subsidiary undertakings for the time being (excluding intra-Company borrowings), will not, without Shareholder approval, exceed 30% of its NAV at the time of any borrowing.

Risk Diversification

The Company aims to invest in a number of different businesses within 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 International Private Equity & Venture Capital (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.

· where the valuation is based on the price of a recent investment this may be adjusted to reflect subsequent business performance and variations from expectations at the time of investment.

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 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 price of a 5% discount to net asset value. Since mid-June 2021 the Board has exercised its discretion not to facilitate Share buybacks in the B Share Class due to insufficient liquidity. To ensure that we are being fair and equitable to all Shareholders, it is our intention that any excess funds in the B portfolio will be returned to all investors through dividends; the Board will continue to monitor this position.

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 17.

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, which are increase in NAV, total return, earnings per share and ongoing charges ratio, 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 2022, 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.

Venture Fund

Increase in NAV

The NAV per Venture Share has increased from 93.26 pence per Share at 28 February 2021 to 113.55 pence per Share at 28 February 2022, an uplift of 20.29 pence per Share. The increase in NAV is attributable to uplifts in investment valuations supported by both new investment raises at higher valuations as well as strong business performance.

Total Return

After making an adjustment for dividends paid during the year the Venture Shares total return has increased from 96.26 pence per Share at 28 February 2021 to 119.55 pence per Share at the reporting date. This represents an increase of 24.19%.

A Share Class

Increase in NAV

The NAV per A Share has decreased by 39.18 pence per Share at 28 February 2021 to 13.25 pence per Share6 at the reporting date. The NAV of the A Share Class decreased due to the payment of dividends to A Class Shareholders, totalling 36.50 pence per Share in the period out of the proceeds from the Hydro sale, and the management performance fee, for a successful return of capital to Shareholders

6To align its interests with Shareholders, the Investment Manager earns a performance fee of 20% on all distributions over 100 pence per share; as such fee is not payable until distributions are made, it is not accounted in the Net Asset Value.

Total Return

The A Shares total return has decreased from 122.43 pence per Share at 28 February 2021 to 119.75 pence per Share at the reporting date. This is largely due to the sale of Hydro assets being sold at less than their carrying value causing a loss on disposal.

B Share Class

Increase in NAV

The NAV per B Share has increased from 57.36 pence per Share at 28 February 2021 to 57.69 pence per Share at 28 February 2022. This represents an increase of 0.58%. The increase in NAV is attributable to receiving proceeds from the Hydro sale.

Total Return

The B Shares total return has increased from 67.36 pence per share at 28 February 2021 to 67.69 pence per share at 28 February 2022.

TPIM agreed not to charge their management fees from 1 January 2017 on the amounts invested in gas fired energy assets, until these investments started to generate income. 

These fees continue not to be accrued. The total fee waived to date for the B Share Class is £745,300.

Earnings per Share

The Charts show the Company's earnings per Share, by Share class for the year ended 28 February 2022. The longer-term trend of performance on this measure is shown in the charts.

Ongoing charges ratio

The ongoing charges ratio7 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 2.94% (2021: 3.03%) of the average net assets.

7This 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.

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 2022, 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 70 under "VCT Regulation".

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 - Venture Share Class

Investment Portfolio - A Share Class

Investment Portfolio - B Share Class

** Please note that the percentage of qualifying investments in the above graphs are not representative of the Company as a whole. 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%.

Investments by Sector - Venture Share Class

Investments by Sector - A Share Class

Investments by Sector - B 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. 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. Prior rules for earlier investments had lower limits, however the current limits require that within three years from the effective date of provisional approval or later allotment at least 80% of the Company's investments must comprise qualifying holdings. For accounting periods ending on or after 6 April 2018, 70% of these investments must be in eligible Ordinary Shares in all cases 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. The Investment Manager has a strong track record in managing such exits.

Although the initial mandate for the A Share Class was to hold the hydro investments for up to 16 years, the Board put forward a proposal to proceed with a disposal of the A Share Class Assets, following which a substantial part of the Hydro Assets has been sold. The Board are continuing to consider potential disposal options of its remaining interest in Shenval; please refer to the Chair's Statement on pages 7 to 15 and Investment Manager's Review on pages 30 to 41 for further information.

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 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 updated at least twice a year and reviewed by the Audit Committee 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 Company's risk management policies and procedures is to identify and manage risks, reducing possible adverse impacts.

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. The Company has removed the Covid-19 risk due to the transition to "living with Covid-19", the government's plan which has lifted restrictions and therefore its consequential impact on the economy.

Details of the Company's internal controls are contained in the Corporate Governance section on pages 56 to 57 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 at Board Meetings. 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 team 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 pages 32 to 37.

Financial Risk as a VCT the Company is exposed to market price risk, credit risk, fair value risk, liquidity risk, inflation 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.

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 twice a year 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 Company, 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 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 the remaining Hydro Assets may be adversely affected by lower or more concentrated rainfall in Scotland. Nevertheless, the Hydro Assets continue to perform well, and as such performance will continue to be monitored closely. In respect of the B Share Class, whilst increased penetration of battery energy storage systems may lead to increased competition with gas fired energy centre assets in the flexible generation market, they have the advantage of not having to be charged so may be likely to still have its place from a security of supply perspective. Related climate change policy risk may include increased carbon costs such as potential removal of the UK ETS exemption that both gas fired energy centre assets currently benefit from (by way of being below the 20MWth capacity threshold).

As the Company has sold a substantial part of its Hydro Assets and is exploring disposal options for the gas-fired energy centre assets, the emerging risk of climate change and related legislation has somewhat reduced. 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.

Ukraine-Russia War (new)

In late February 2022, Russia began an invasion of Ukraine with devastating consequences for the country's citizens and major implications for wider humanity, the global economy and capital markets. The Company does not have any direct exposure to Russia, however, the Company is monitoring the potential wider macroeconomic consequences on the Company and its investee companies closely, including energy price volatility and further sanctions. Please refer to pages 30 to 41 of the Investment Managers review, which illustrates the wider effects of the Ukraine-Russia war on the Company and its investments.

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 Review. 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 2 to the financial statements. The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the next five years.. 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 remaining A Share Class investment in Shenval. The revenue 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 £5.34 million. A further £11.2 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 £5.24 million (2021: £5.49 million) and had cash balances of £6.25 million (2021: £5.45 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 £11.2 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 5 years. 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 2027, 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 24 to 25.

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 and the Ukraine-Russia war on the Company and its longer-term viability. More detail on this is included in the Principal Risks and Uncertainties section on pages 22 to 25.

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.

Disposal of Assets

During the year, a substantial part of the Hydro Assets in the A and B Share Classes were sold.

The decision followed engagement with A Share Class holders at an A Share Class Meeting held on 29 July 2021 at which A Share Class holders voted over 99% in favour of selling the hydroelectric power assets within the A Share Class.

At the 12 July 2021 AGM, there was an overwhelming vote in favour of the disposal of the B Share Class assets. However, the resolution failed to carry as an insufficient number of votes were cast.

Dividends

The Company declared dividends during the year to A Share Class holders of 36.50 pence per share and a Venture Share Class dividend of 3 pence per share. This decision represented the culmination of a significant return of net proceeds of sale to A Share Class holders, taking total distributions to 106.50 pence per share. Following the year-end, a dividend of 10 pence per share was paid to B Share Class holders on 31 March 2022. Consideration was given to the reserve position of the Company to be able to facilitate these distributions.

Investments

During the year, the Company made 11 new qualifying Venture Fund investments and nine follow-on investments into 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. The Directors further considered the first cash exit of Credit Kudos at an over 5x return multiple.

Strategic Report 

Investment Manager's Review

Sector Analysis

The unquoted investment portfolio can be analysed as follows:

 Investment Manager's Review

We have pleasure in presenting our annual review for the year ended 28 February 2022.

This was the third year for the Company's Venture Fund, and during the year we have successfully raised an additional £11.6 million after costs. During that period we have deployed a further £5.9 million into 11 new portfolio companies and participated in nine follow-on funding rounds for existing portfolio businesses. In addition we have sold a substantial part of the Hydro Asset portfolio in the A and B Share Class, returning the net proceeds to Shareholders. Further information on the next steps for the A and B Share Class assets are set out below and in the Chair's Statement on page 12 to 14.

Although we were very fortunate to be able to operate effectively with remote and home working through the Covid-19 restrictions, we were excited to see a return to the office for our staff to bring everyone back together again. Nevertheless, we saw the benefit of staff being able to work from home, and as such, we currently operate with employees working 50% of their time in the office and 50% at home.

Continuing intense concerns about Covid-19 at the start of this period have quickly morphed into concerns around the wider macroeconomic effect of the ongoing Ukraine-Russia war. We have been active in providing what support we can for the Venture portfolio companies that have developers based in countries impacted by the conflict. There are four portfolio companies that had one or more software development team members (often as contractors rather than employees) based in Ukraine when the Ukraine-Russia war began. In each case this has been managed by being tolerant of the very difficult situation people have found themselves in, offering support to team members in many cases through paying for accommodation and leveraging alternative outsourced development resource in other locations such as Portugal, India, Poland and the UK. Most of the development resource based in Ukraine is now regularly back online and back-up contingency plans have been implemented. We are fortunate that the majority of our revenues are recurring and therefore this limits the impact to us, but we are monitoring developments closely.

The net cash outflow to Shareholders for the year was £4.2 million. However, after the year end, the Company allotted an additional £11.2 million under the latest Venture Fund offer for subscription, meaning that the Company and the Venture Fund remain well capitalized to take advantage of new investment opportunities.

Venture Fund

The year under review was the third for the Venture Fund. After the challenges of the prior year, when Covid-19 and the associated lockdowns were to the fore, the year to February 2022 has been one of significant progress for the share class in terms of investor returns, the size of the Fund and capital deployment.

Importantly, the Fund's net asset value per share rose from 93.26 pence at the beginning of the year to 113.55 pence. This represents a total return of 119.55 pence per share, with 6 pence per share dividends having been paid to date.   This was despite the overall scale of the Fund growing considerably over the period from £14.2 million of net assets at the start of the financial year to £30.0 million as at 28 February 2022. Last July's 3 pence per share dividend payment was the second dividend for the share class, following a similar distribution in the summer of 2020, and fulfilling intentions set out in our investor communications.

Triple Point's Venture team continued to make good progress in deploying the Venture Fund's liquidity during the year, by completing 11 new qualifying investments plus nine follow-on investments into a diverse range of sectors spanning logistics management software to telemedicine and student finance. The portfolio now consists of 31 qualifying companies.  

A year ago, we were still somewhat focused on the impact of Covid-19 on the portfolio. The Fund benefited from being a relatively young fund going into the Covid-19 pandemic and given the Fund's focus on business-to-business software innovation, there was relatively little exposure to the sectors that were more impacted by Covid-19 such as travel and hospitality. The change or acceleration in some societal dynamics over the last 18 months have provided positive opportunities for some portfolio companies. These included, for example, HeyDoc, where their health sector software includes easy facilitation of video calls for medics and remote access to patient records, and Ably Realtime, whose solutions for reducing data latency continued to be in strong demand as the world went digital.

In the event, those two companies were amongst the nine portfolio businesses that completed successful new fundraises in the period under review, at valuations which were higher than when the Fund had originally invested in 2019 and 2020. Several of those funding rounds were at significantly higher valuations; notably Ably and Quit Genius, both of which had Series B funding rounds led by international venture capitalists, and Vyne Technologies which raised a Seed extension round, its second up-round since the Venture Fund invested. The Investment Manager believes that it will usually be in the Venture Fund's best interest to participate, where possible, in follow-on rounds of investee companies which have operational momentum and are attracting interest from new, later stage, investors, as these three did.

Given the Venture Fund's valuation policy these notable portfolio successes contributed to the uplift in NAV over the period. Also contributing was the Fund's first cash exit - that of open-banking credit referencing specialist Credit Kudos for an over 5x return multiple just two years after the investment was made. While Credit Kudos's sale did not complete until shortly after the period under review, the exit looked likely before year-end and gains from it have been included in this year-end Venture NAV.

We should also note that the uplift in NAV is net of several fair value movements made against the valuation of Venture Fund holdings during the year. This is largely attributable to uplifts in Ably Real Time Ltd, Vyne Technologies Ltd, Quit Genius and Credit Kudos which was sold post year-end. To reiterate a point in the Chair's statement, while none of the Venture Fund's portfolio companies have failed, the failure of some investments is an inevitable part of venture investing.

As noted earlier, nearly all of the portfolio companies are following a business to business (B2B) commercial model but with a sector-agnostic view resulting in the Fund's portfolio being active across a range of sub-sectors. The most active sub-sectors for deployment during the period were Fintech, where £2.2 million was deployed, Middleware, £1.8 million and Health-tech, £1.4 million. At the end of the year the largest sub-sectors in terms of portfolio value were again Fintech, Health-tech and Middleware. Fintech is a sector where TPIM has particular experience and the portfolio includes companies with software addressing bank data management, SME banking and accounting, e-commerce payments, SME insurance and invoice settlement systems.

The Fund looks to maximise Shareholder returns by investing in innovative early-stage businesses, typically at the point where they have achieved some market validation with one or more contracts secured with a corporate customer. The core investment focus for the Fund has thus been Seed-stage investing, which typically involves companies that have established that there is demand for the core product with their initial customer base and are raising funds to drive product and sales development that will take revenues to the next level. Around £5 million was deployed into Seed-stage businesses in the year. £1 million of funds was also deployed into a spread of pre-Seed businesses, and over £2 million into slightly later stages Series A opportunities. As mentioned, this year was the first that two portfolio companies had Series B stage funding rounds, which the Venture Fund participated in with £1.4 million of funding,

Many of the businesses that the Fund invests in will involve the use of new technology and would be classified as "knowledge-intensive" by HMRC rules, very much the types of innovative UK businesses that the government wishes to see backed by VCT capital which allows investors to benefit from substantial tax reliefs. Such investing comes with risks to capital, some of which we aim to mitigate by focusing investment on businesses that are actively solving significant problems for commercial customers. We call this the Challenge-led approach to building a portfolio of Qualifying Investments capable of generating significant long-term, tax-free capital growth.

A snapshot of the companies the Venture Fund has invested into during the year is set out on pages 35 to 37.

More detail on the Challenge-led approach in action can also be seen over the page.

Knok Healthcare

What does the company do?

Knok Healthcare is a telemedicine solution that provides virtual consultations through a combination of triage, scheduling, record keeping, and integration with healthcare providers. Knok Healthcare's product, Panacea, aims to be the reference white label provider for virtual consultations. Panacea incorporates clinical support for both patient and clinician which integrates seamlessly into the existing patient journey and connects with enterprise systems. Knok's mission is to contribute to universal access to healthcare, connecting doctors and patients through easy-to-use technology.

Problem being solved

Medical insurers are not set up to offer a direct telemedicine offer, nor to do so globally. Telemedicine providers are generally branded, local, are not able to integrate with legacy systems, and depend on downloading specific software. Healthcare providers often have a network of doctors but lack the technology to offer video consultations. They are looking for an easy to implement video conferencing solution.

Company solution

Knok offers a white-labelled SaaS video consultation solution to insurers and healthcare providers without the need for these companies to change their workflow. Knok takes care of everything from onboarding, training, white-labelling, and the product, Panacea, includes scheduling and payments solutions. Panacea also has the benefit of being able to integrate with any legacy systems where those systems are able to communicate with a third-party system through APIs.

Ryde

What does the company do?

Ryde provides a fully integrated delivery management platform combining the best of fleet management software, third-party logistics software and a flexible workforce to e-commerce companies requiring deliveries, enabling these companies to more effectively manage demand by supplementing their own fleet with third-party fleets and Ryde's own fleet of riders.

Problem being solved

Consumers now have high expectations for rapid and flexible home delivery. These expectations are not consistently being met because businesses have neither adequate technology nor adequate fleets to respond to this consumer demand. What's more, existing delivery drivers are often disenfranchised and exploited.

Company solution

Ryde helps businesses of any size seamlessly blend internal and outsourced delivery workforces. Its solution includes a fully integrated platform that allows delivery companies to onboard and verify riders, manage internal and external fleets, track jobs through live route mapping and pay riders, transparently display pricing for jobs and send messages to riders. The product also offers a supplementary fleet of riders to help their customers meet spikes in demand. Riders receive better treatment, fairer pay, more certainty of earnings, and more transparency of prices per job/shift. The company's vision is to enable smaller high street retailers to compete while increasing the efficiency of delivery for the larger e-commerce players.

Offer for subscription

The Venture Fund share class is still a relatively new member of the VCT sector but has been able to take advantage of a differentiating Seed-stage B2B strategy discussed above as well as continued buoyant conditions for VCT fund raising generally to grow the size of the new fund raise both in 2021 and 2022.

A third Venture Fund offer for subscription closed on 20 August 2021 having raised £10.70 million and the fourth offer for subscription opened in September 2021. The Company currently has a Venture Fund offer for subscription open to new investors. This new offer had a promising start with 3,357,563 Venture Shares allotted under the fourth offer for subscription to December 2021, raising £3.7 million. Following the February 2022 year end, the Company allotted an additional 9,973,377 Venture Shares raising £11.2 million, this takes the total number of Venture Shares in issue to 36,418,808. In light of this the VCT Board triggered to the over-allotment facility on 15 March 2022 and subsequently on 1 April 2022, raising the amount that can be raised under the offer for subscription to £15 million and then £20 million respectively, allowing the Fund to meet on-going demand towards the end of the tax year.

This offer has so far to date resulted in funds being raised in excess of £14.9 million and 13,078,539 new Shares allotted. For all investments in the 2022/23 tax year, the Offer will remain open until 29 July 2022 unless fully subscribed at an earlier date. The Board have the discretion to extend the open offer to 14 September 2022 if required.

A Share Class

The Board, supported by the Investment Manager, put forward a resolution to dispose of the A Share Class Assets as it was considered an opportune time to optimise value for Shareholders. This was on the basis of favourable market conditions, reflecting low discount rates, scarcity of in demand hydroelectric assets with inflation-linked Feed-In-Tarriff ("FiT"). Income and demand for assets with a long c.15 year remaining FiT period. This proposal received a significant vote in favour at the A Share Class Meeting on 29 July 2021.

Following this, and as announced on 29 November 2021, the Hydro Assets in the A Ordinary Share Class, with the exception of Shenval, were sold for a total consideration of £4,245,725. This sale followed a competitive process, whereby bids were received from all invited bidders which were some of the leading energy infrastructure investors in the UK and had a strong understanding of small-scale run of the river hydroelectric assets. Following an analysis of the bids, Triple Point Energy Efficiency Infrastructure plc ("TEEC") were chosen as the preferred bidder with reference to key criteria of consideration, conditionality of the bid, and acceptance of share price agreement terms. At the conclusion of the process, TEEC's final offer was considered the most attractive for the Company. TEEC is also managed by TPIM, and therefore additional measures were implemented at the outset and carefully monitored to manage any potential conflict of interest appropriately, including the Board obtaining a third-party valuation.

We are very pleased with the outcome of the sale process for A Shareholders, and the consequential return of the net proceeds of sale to them. We have now turned our attention to managing the sale of the remaining A Share Class interest in Shenval and, at the appropriate time, a resolution for the wind-down and cancellation of the A Share Class will be put forward to Shareholders. Further information can be found in the Chair's Statement on page 6 to 15.

Shenval, the remaining minority interest of the A Share Class, is a hydroelectric scheme in the Scottish Highlands, which has been commissioned and is operational. Small-scale hydro is highly efficient, and it remains one of the cheapest forms of renewable electricity per unit. Shenval continues to benefit from UK government backed FiT payments based on output and from the sale of the electricity produced to utilities or other power companies under power purchase agreements ("PPAs"). Shenval has underperformed during the 12 months to February 2022 at c.24% below revenue expectation. The turbine is working well, however, the nine months to December 2021 were exceptionally dry across the Scottish Highlands and the site was unable to generate electricity for six weeks between April and May 2021 due to Scottish and Southern Electricity grid constraints.

The hydroelectric companies, together with other industry members and the British Hydropower Association ("BHA") have continued to lobby the Scottish Government over the last year on business rates in the hydro sector. However, the assessors have become entrenched in their position and furthermore appeals against the 2010 valuations are yet to be resolved and cases from 2017 are nowhere near consideration. It now looks unlikely that the assessors are going to relent to reduce valuations for the hydro sector to bring them into line with other renewable technologies. The 60% relief introduced by the Scottish Government in 2018 was extended to 2032 in the 2021 Scottish Budget. Whilst the relief is welcome and is sufficient to individual schemes, it does not benefit multiple schemes grouped within a portfolio due to the post-Brexit State Aid rules. It is therefore unlikely that any progress will be made until the temporary support has expired.

B Share Class

The Hydro Assets in the B Ordinary Share Class were also sold as part of the same sale process as set out above within the A Ordinary Share Class update, for a total consideration of £1,102,722, which enabled Broadpoint 3 Ltd to repay its loan and a portion of the redemption premium to the Company for £1,096,103.43 in total. We were pleased with the outcome of this process for B Shareholders, with the majority of net proceeds of sale, returned to B Shareholders on 31 March 2022, in the form of a 10 pence per share dividend.

The B Share Class remains fully invested with two Qualifying Investments in companies operating gas fired energy centres. Both energy centres were commissioned 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 respect of Green Peak, further to the update provided in the Company's 2021 Interim Report, the water ingress issues which previously caused one of the engines to be offline has now been resolved and all three engines are fully available. We are also pleased to report that full insurance coverage, subject to an excess, has been confirmed by the insurer for both property damage and business interruption. Whilst the site has underperformed in respect of energy generation, the strong electricity market has offset the underperformance with the company achieving gross profits for the 12-month period to 31 December 2021.

Distributed Generators has also achieved gross profits for the 12-month period to 31 December 2021 largely due to the strong electricity market which has offset the underperformance of the engines and lower electricity generation. The company has suffered from some availability issues, and the site has low redundancy only having two engines, causing strain on overall availability when issues arise.

We continue to pursue potential solutions to try to improve both sites' operation and increase availability. As such, from the beginning of May 2022, we have transitioned to a new Power Optimisation company, responsible for the trading and dispatch of the sites, and a new Operations and Maintenance contractor after continued underperformance. Over the 2021/22 winter period, the significantly rising costs of gas put pressure on the European electricity market, causing prices to increase in line. As a result, the spark spread, that is, the price of electricity less the cost of gas, remained positive and in some instances even widened. Throughout this winter period the companies were able to remain profitable, despite lower availability and electricity production than forecast. Toward the end of the period, after the Ukraine-Russia war began, gas prices remained high. However, high wind output and warmer temperatures meant that the price of electricity came off its winter highs. This put pressure on the spark spread and the number of profitable periods in which the companies were called to trade accordingly decreased. The companies do however benefit from a high-priced Capacity Market contract, won in the 2021 year ahead auctions which helps offset the reduced trading performance through regular monthly cashflows.

Given the five year holding period has now passed for the B Share Class under the Company's Investment Policy and with renewed transaction activity and interest against the backdrop of a strong electricity market, we are considering disposal options for the gas companies. A sale of the assets will enable a dividend of the net proceeds to be paid to B Shareholders; at the appropriate time, a proposal will be put to Shareholders for the wind-up and cancellation of the B Share Class.

For the following reasons the valuation of Distributed Generators and Green Peak has been held at the same carrying value as the 2021 Annual Report. The carrying values were in line with the independent report commissioned in early 2021 from an experienced corporate finance adviser to gauge the market interest and value attributable to these companies. 

The valuation model was first adjusted by actual cash flows to date and a reduction in the future residual value of the assets at the end of the life. This was to provide a conservative view on future decommissioning costs. A reduction in expected project life to 20 years was then applied, which the companies' Corporate Finance Advisers, after recently marketing the companies as well as others over the past years, advised is the current market view on useful operating life of this asset class. The discount rates used to value the projects were then adjusted to reflect the reduced long-term risk of a shorter operating life. Additionally, the companies' energy market advisers are predicting significant short term upside on market profitability versus the market analysis at the time of the independent report commissioned in early 2021. As well as being future predictions, these strong market prices have been realised in the second half of the reporting period and will continue to be captured in the short-term and so the discount rate of the cash flows has been reduced. After applying all these changes to the cashflow forecasts, the valuations returned were in line with prior year carrying value, and the independent report commissioned in early 2021.

Outlook

While the outlook for the innovation that the Venture Fund and its portfolio companies pursue remains promising, general economic uncertainty has increased. Just as many societies and economies have moved beyond intense concerns about Covid-19 they have encountered an unsettling cocktail of higher inflation, higher interest rates and the Ukraine-Russia war.

While the much-discussed spikes in energy and food inflation are not a significant direct problem for the sorts of digital businesses that the Venture Fund backs, we should note that start-ups have already been grappling for two or three years with the impact of accelerating skilled wage inflation. Finding and retaining experienced recruits in areas like digital marketing and software development has become more challenging, and the war in Ukraine has added to some of that because Kyiv, Minsk and even Moscow had been sources of remote-working developer talent for some of our portfolio companies. We have been working with the three portfolio companies with staff in those locations to see where we can assist.

Continued competition for human resources through 2022 is likely to be the main direct inflationary effect on start-ups. More broadly, economy-wide pressures on the real incomes, as a result of higher energy costs, cloud the macro outlook and may lead to corporates as well as consumers to look to trim budgets - that can present opportunities for software companies as well as a threat. There is also the less obvious impact from inflation which is that it is causing an earlier than expected rise in the cost of capital as central bankers raise interest rates in order to restore inflation-fighting credibility in the medium term. The effect of recent rises in government bond yields has already been seen in lower revenue valuation multiples in the listed software sector and in time this may be expected to impact the valuations at which venture capital is raised as well, after what has been a benign few years for start-up valuations. While this may make it somewhat tougher for existing portfolio companies to raise money at significant valuation uplifts, it is an environment in which we expect the Venture Fund to continue to find compelling new and follow-on opportunities to deploy what will be significant liquid resources, following the current successful fund raise and the exit of Credit Kudos.

Despite the uncertainty from the Ukraine-Russia war, and the inflationary environment, we believe that the Venture Fund's portfolio remains well positioned for future growth and that the recent fund raise stands the share class in good stead to pursue opportunities as they develop including a growing number of follow-on funding opportunities as the portfolio grows and matures.

We are very pleased with the outcome of the sale process for A Shareholders, and the consequential return of the net proceeds of sale to them. We have now turned our attention to managing the sale of the remaining A Share Class interest in Shenval and, at the appropriate time, a resolution for the wind-down and cancellation of the A Share Class will be put forward to Shareholders. Further information can be found in the Chair's Statement on pages 7 to 15.

Given the five-year holding period has now passed for the B Share Class and with renewed transaction activity and interest against the backdrop of a strong electricity market, we are considering disposal options for the gas companies. A sale of the assets will enable a dividend of the net proceeds to be paid to B Shareholders; at the appropriate time, a proposal will be put to Shareholders for the wind-up and cancellation of the B Share Class.

Ian McLennan

Partner

For Triple Point Investment Management LLP

27 May 2022

Responsible Investing

Investment Manager commitment to responsible investment

Triple Point is founded on the principle of people, purpose and profit. The manager strives to identify and unlock investment opportunities that have purpose, so we can help people and planet, while generating profit for investors.

In line with this business mission and the commitment to responsible investment, Triple Point has applied to become a B Corporation (status pending). Certified B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.

In 2019, Triple Point became a signatory to the Principles for Responsible Investing ("PRI"), to demonstrate best practice in investor Environmental, Social and Governance (ESG) integration and guide continued improvement. Triple Point seeks to promote these principles throughout its business, and they are reflected in its Sustainable Business Objectives document. These principles ensure all investment processes have sound and appropriate integration of ESG practice and are overseen by the Triple Point Sustainability Group. This means investment teams are aware of, and can make informed investments decisions about, key ESG risks and opportunities.

Triple Point's overall commitment to sustainable business and approach to ESG within our investment strategies is captured in the Sustainable Business Policy, which is overseen by the Triple Point Sustainability Group. This Group comprises senior partners and managers from across Triple Point, who meet monthly. The Group is chaired by Triple Point's co-Managing Partner Ben Beaton. Also reporting to this Group are the Sustainable Investment Sub-group which comprises senior investment team members from across Triple Point. The Group share best practice and learning in sustainability and ESG integration from across the business acting as source of sustainability insight, collaboration and review which stretches across the entire business.

In the view of the Sustainability Group, successful ESG integration means:

· named resource at a strategy level to integrate, monitor and report on ESG issues;

· integrating ESG considerations throughout investment processes;

· ensuring decision-making captures ESG risks and opportunities, learning from decisions and reporting to continually enhance ESG integration;

· pro-actively engaging with investors to understand their ESG requirements; and

· challenging systemic issues which slow uptake of ESG practices by asking questions, offering alternative solutions, or engaging at a policy level.

ESG Integration Approach for Triple Point VCT 2011 PLC

The assets within the Company are aligned with a range of international standards and good industry practice, including the UK Bribery Act, UK Companies Act and the UK Modern Slavery Act.

The Investment Manager has also implemented ESG Integration processes specifically associated to the needs of understanding ESG risk and opportunity for small, seed companies.

We place proportionate expectations on the Company, across a range of environmental, social and governance factors according to the sector, size, stage of growth, and future growth and development trajectory of the Company.

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.

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; and

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; and

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

The strategy also explicitly states they will not invest in adult content, gambling (excluding charitable lotteries funding good causes or raising funds), animal testing, arms trade and tobacco.

We are committed to evaluating the success of our approaches.

Our investment teams report to our Sustainability Group through an annual review process to ensure adherence to the process and to share detail on where we believe we have influenced better or faster progress towards greater sustainability.

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, and 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 year we invested in a number of businesses with a positive social contribution, including in healthcare: Quit Genius - an addiction management platform; Knok Healthcare - a telemedicine video-conferencing solution that helps reduce hospital waiting times; and in education: Stepex - a company that helps people fund further education; and Learnerbly - a learning and development platform for corporate employees.

During the Covid-19 pandemic, a number of our companies provided their services for free, including Heydoc, who provided free video consultations and Credit Kudos, who developed a product that demonstrate to government agencies whether people qualified for support programmes.

During the Ukraine-Russian war, which began in late February 2022, Triple Point created a war relief fund which was offered to all Ukrainian developers in our portfolio companies in order to contribute to their costs for transport out of Ukraine, short-term rental payments and other relevant expenses.

Investment Portfolio Summary

Qualifying holdings

Investment Portfolio Summary

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 Investees are exempt from submitting audited financial statements to Companies House hence no financial details have been disclosed.

\* The Investees are exempt from submitting audited financial statements to Companies House hence no financial details have been disclosed.

\* The Investees are exempt from submitting audited financial statements to Companies House hence no financial details have been disclosed.