TPVC.L Regulatory News (TPVC)

22 June 2021

Triple Point Income VCT plc

(the "Company")

RESULTS FOR THE YEAR ENDED 31 MARCH 2021

The financial information set out in these statements does not constitute the Company's statutory accounts for the year ended 31 March 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 Income VCT plc, managed by Triple Point Investment Management LLP, today announces the results for the year ended 31 March 2021.

These results were approved by the Board of Directors on 21 June 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 213800IXD8S5WY88L245

Further information on the Company can be found on its website https://www.triplepoint.co.uk/current-vcts/triple-point-income-vct-plc/s1238/.

Financial Summary

Triple Point Income VCT plc ("the Company") is a Venture Capital Trust ("VCT"). The Investment Manager is Triple Point Investment Management LLP ("TPIM"). The Company was incorporated in November 2007.

· C Ordinary Share Fund ("C Shares"): these are the shares issued in the Offer that closed on 27 May 2014. A total of £14 million was raised and 13,441,438 C Shares were issued.

· D Ordinary Share Fund ("D Shares"): these are the shares issued in the Offer that closed on 30 April 2015. A total of £14.3 million was raised and 13,701,636 D Shares were issued.

· E Ordinary Share Fund ("E Shares"): these are the shares issued in the Offer that closed on 15 May 2017. Just under £30 million was raised and 28,949,575 E Shares were issued.

The Strategic Report on pages 8 to 49, the Corporate Governance Statement on pages 52 to 55, the Directors' Remuneration Report on pages 61 to 65 and the Directors' Report on pages 66 to 69. 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 Income VCT plc.

The Directors submit to the members their Annual Report and Financial Statements for the Company for the year ended 31 March 2021.

Key Highlights

· Dividends per C Share: 3.50p (Year ended 31 March 2020: 55.00p)

· Net Asset Value per C Share: 83.30p (Year ended 31 March 2020: 84.87p)

· Total Return per C Share2: 156.80p (Year ended 31 March 2020: 154.87p)

· Dividends per D Share: 5.00p (Year ended 31 March 2020: 55.00p)

· Net Asset Value per D Share: 59.59p (Year ended 31 March 2020: 62.46p)

· Total Return per D Share2: 129.59p (Year ended 31 March 2020: 127.46p)

· Dividends per E Share: 6.50p (Year ended 31 March 2020: 5.00p)

· Net Asset Value per E Share: 94.59p (Year ended 31 March 2020: 101.69p)

· Total Return2 per E Share: 106.09p (Year ended 31 March 2020: 106.69p)

· Realisation proceeds £2.98M. Realisations of investments and loan repayments generated total proceeds for the Company of £2.98 million.

· Ongoing Charges Ratio1: 2.88% (2020: 2.70%)

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.

Strategic Report

Chair's Statement

I am writing to present the Financial Statements for the Company for the year ended 31 March 2021.

Following the challenges that both business and society have faced during the COVID-19 pandemic ("the pandemic"), it appears we can now begin to be more optimistic with the gradual reopening of businesses and the restrictions on lockdown easing. 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.

It is not yet clear how much the pandemic has permanently changed our lives, or to what extent we will return to "normal" over the coming year, but 2020 will undoubtedly go down as the most tumultuous year in living memory.

Our portfolio of renewable energy investments has consistently generated electricity in a satisfactory manner. At the other end of the spectrum, our investment in Perfectly Fresh Cheshire Limited ("PFC"), the vertical growing business, has been greatly impacted by the pandemic. The valuation of the Company has remained stable, due to the nature of potential return structure in place. As the majority of the working population have been working from home, this change has unfortunately had a knock-on effect on consumer habits, in particular, on packaged sandwiches for which PFC supplies ingredients. This is discussed in greater detail in the Investment Manager's Review.

During the period, the Board commissioned an independent financial adviser to undertake an independent valuation of the Company's hydroelectric assets held across the Share Classes. As a result of this process, we have left the valuations for the Hydro companies unchanged from the prior year.

Proposed amendments to the Company's Investment Policy

The Company's current investment policy ("Investment Policy") sets out the holding periods for the assets in the C and D share classes, being 16 years following investment, and 10 to 12 years for the E share class with, in the case of the E shares, a possible early partial return of funds to shareholders if market conditions present such an opportunity. At the time of investment it was not envisaged that there would be a full exit of the C and D share classes, and consequent return of capital to shareholders, at an earlier point. However, the Board now considers that it is an opportune time to explore a potential portfolio sale of the hydroelectric assets in order to take advantage of favourable market conditions. In order to do so, the Company must first amend its Investment Policy to remove the 16-year holding period for the C and D share classes, which are wholly invested in hydroelectric assets, to provide the Board with the flexibility to proceed with a sale at any time where it believes that this would be in the best interests of shareholders.

It should be noted that, in accordance with the Investment Policy and as previously communicated to the C and D share class shareholders, a partial return of funds to those shareholders after 6 years has already taken place. No change is required to the Investment Policy in respect of the E share class, as a sale of the hydroelectric assets in the E share class would be a partial return of funds to shareholders, with other assets being held in the E share class portfolio.

The Board believes that there are a number of benefits for a sale of the hydroelectric assets at the present time as set out below:-

a) The Company has undertaken a detailed analysis and considers that the internal rate of return ("IRR") to investors would be higher following a disposal of the hydroelectric assets now in comparison to holding to full-term under the current Investment Policy. The Company has modelled the return to investors on the basis of an independent report setting out the potential disposal value of the hydroelectric assets.

b) A sale of the hydroelectric assets at the present time would enable shareholders to capitalise on the current favourable market conditions reflecting low discount rates, scarcity of in demand hydroelectric assets with inflation linked Feed-in-Tariff (FiT) income, and a long circa 15 year remaining FiT period all of which should make these assets attractive to a buyer.

c) A sale of the hydroelectric assets and return of proceeds would provide investors with liquidity which is advantageous during periods of economic uncertainty.

d) Shareholders in several share classes would save on future fees payable, including investment management fees, adviser fees and other ongoing running costs.

e) It would remove shareholders from being exposed to future operational risks of the hydroelectric assets and portfolio risks such as Scottish independence and further removals of business rate discounts.

A resolution will be proposed at the Company's 2021 Annual General Meeting ("AGM") in respect of this change to the Investment Policy. Should this resolution pass and a favourable sale price and terms be achieved, the proposed Investment Policy will allow the Board to complete a sale of the hydroelectric assets in the C, D and E share classes, with the intention to return the full proceeds of investment to C, D and E share class shareholders. This would result in a partial return of funds to E share class shareholders with other assets being held in the E share class portfolio. It is further noted that the Company will ensure that the VCT qualifying investment level is managed following a sale of assets to remain above the requisite 80% level. Further details are set out in the Notice of Meeting.

Investment Portfolio

The Company's funds at 31 March 2021 are 98.9% invested in a portfolio of VCT qualifying and non-qualifying quoted and unquoted investments.

The Investment Manager's review on pages 30 to 40 gives an update on the portfolio of investments in 17 small unquoted businesses and one quoted Real Estate Investment Trust.

C Share Class

The C Share Class has investments in three companies in the Hydroelectric Power sector which between them own six hydroelectric schemes in the Scottish Highlands.

The C Share Class portfolio has recorded a profit over the period of 1.93 pence per share and as at 31 March 2021, the NAV stood at 83.30 pence per share. Total dividends paid to C Shareholders to date are 73.50 pence per share.

During the year, C Class Shareholders were paid total dividends of 3.50 pence per share. This follows the 55.00 pence per share paid during the last financial year, which was made possible by a combination of investment realisations and a small amount of borrowing, which continues to be utilised.

During the previous year, the Company put in place a loan facility for £2.7 million in order to help achieve the dividend and realisation target. £2.3 million of this facility was drawn during the period. Of the £2.3 million drawn, the C Share Class owes £300k. The loan attracts interest at 4.5% and it is not envisaged the Company will draw the remaining funds available under the current facility. The loan remains in place, and no capital payments have been made during the year. The Company has in place an additional facility agreement, which is in place until 11 June 2023, which can be drawn on if the existing lender does not extend the current agreement.

As was expected, profit has reduced due to income generating assets being realised to repay capital to Shareholders and reduce the amount of debt required within the Company to achieve the refinancing. As a result, the interim dividend of 1.75 pence per share to be paid to C Share Class shareholders on 30 July 2021 is below the targeted 3.50 pence per share. Despite this, the C Share Class will seek to pay a further 1.75 pence per share dividend to shareholders later in the year.

Further information on the C Share Class investments is included in the Investment Manager's Review on pages 30 to 40.

D Share Class

The D Share Class has investments in five companies in the Hydroelectric Power sector which between them own six hydroelectric schemes in the Scottish Highlands.

The D Share Class portfolio has recorded a profit over the period of 2.08 pence per share and as at 31 March 2021, the NAV stood at 59.59 pence per share. Total dividends paid to D Shareholders to date are 70.00 pence per share.

During the year, the Company paid a 5.00 pence per share dividend to Shareholders, this follows two separate distributions in the previous year of a 5.00 pence per share dividend and a significant return of capital of 50.00 pence per share.

During the previous year, the Company put in place a loan facility for £2.7 million in order to help achieve the dividend and realisation target. £2.3 million of this facility was drawn during the period. Of the £2.3 million drawn, the D Share Class owes £2 million. The loan attracts interest at 4.5% and it is not envisaged the Company will draw the remaining funds available under the current facility. The loan remains in place, and no capital payments have been made during the year. The Company has in place an additional facility agreement, which is in place until 11 June 2023, which can be drawn on if the existing lender does not extend the current agreement.

Following the realisation of some of the D Share Class assets during the previous financial year, as was expected, profit has reduced, due to income generating assets being realised to repay capital to Shareholders and reduce the amount of debt required within the Company to achieve the refinancing. As a result, the interim dividend of 1.75 pence per share to be paid to D Share Class shareholders on 30 July 2021 is below the targeted 3.50 pence per share. Despite this, the D Share Class will seek to pay a further 1.75 pence per share dividend to shareholders later in the year.

Further information on the D Share Class investments is included in the Investment Manager's Review on pages 30 to 40.

E Share Class

The E Share Class has a portfolio of investments spanning Hydroelectric Power, Crematorium Management, Gas Fired Energy Centres, Solar PV, Vertical Growing and SME Lending.

The E Share Class portfolio has recorded a loss over the period of 0.61 pence per share and as at 31 March 2021, the NAV stood at 94.59 pence per share. Total dividends paid to E Shareholders to date are 11.50 pence per share. A further interim dividend of 3.50 pence per share will be paid on 30 July 2021, I am delighted to say that this takes total dividends paid to E Shareholders to 15.00 pence per share in line with our target.

The Company's renewable energy assets have performed as expected during the period, with no large variations in performance seen during the year. During the period we received disappointing news regarding the valuation of the E Share Class investment in Green Peak Generation Limited ("Green Peak"), which operates a gas fired energy centre. The revised valuation resulted in a write down to the investment valuation of circa £650,000. 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 Green Peak were brought together for sale. The Board has been disappointed by the feedback from this sales process and the resulting indicative valuation for Shareholders. To ensure Shareholder interests are protected, an independent report 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 sales process is ongoing.

Further information on the E Share Class investments is included in the Investment Manager's Review on pages 30 to 40.

Share buy-backs

The Company aims, subject to distributable reserves and liquidity, to be willing to buy back the Company's shares in the market at a 10% discount to NAV.

During the year, the Company bought back and cancelled 96,999 D Ordinary Shares at a price of 52.23 pence per share. As a result of this buy back, the total return to this Shareholder was 122.23 pence per share (inclusive of D class dividends paid to date of 70p), in line with the Investment Management Agreement between the Company and the Manager, a performance fee of £4,992 has been accrued during the year.

VCT qualifying status

The Company has maintained its approved VCT 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 taxation advisers Philip Hare & Associates LLP.

The Company is fully deployed and as a result has not made any new investment during the year.

We will continue to work closely with the Investment Manager to ensure the Company maintains compliance with the scheme rules.

Outlook

The experience of 2020 as a result of the pandemic has taught all of us that there are difficulties in making predictions in such an uncertain world. Unfortunately, the effects of the pandemic are likely to remain the dominant theme for 2021, along with concerns about the duration and severity of its legacy on the global economy. It does, however, now appear that a K-shaped recovery is underway. This undoubtedly means both winners and losers. The unique shape of the COVID-19 crisis and accompanying recession has meant some industries have thrived whilst others have suffered.

As this applies to the wider economy, this is also true of our portfolio of investments. Our hydro portfolio has continued to perform robustly. By contrast the write down of our gas fired energy centre company, although not specifically related to the pandemic, and the uncertainty surrounding our vertical growing company, show the potential divergence in our portfolio.

I would like to take this opportunity to thank Shareholders for their continued support, and our Investment Manager for their support and commitment during a challenging year.

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

David Frank

Chair

21 June 2021

Strategic Report - Company 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 ("Section 172").

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

The Company's Investment Policy was adopted and approved by Shareholders before changes to the rules for VCT-qualifying investments effective from 1 April 2019 and applies to the existing investment portfolio. The Company recognises that it is likely that any new Qualifying Investments would require amendment to the Investment Policy. 

The Company is proposing a resolution at the upcoming AGM in respect of proposed amendments to the Investment Policy. Further details can be found on page 9 and the Notice of Meeting.

A copy of the Investment Policy is below.

Investment Policy

Investment Objectives

The Company's main focus is to generate returns from a portfolio of investments in companies based in the UK in order to make regular tax-free dividends.

The key objectives of the Company are to:

a) Pay regular tax-free dividends to investors;

b) Maintain VCT status to enable investors to benefit from the associated tax reliefs;

c) Reduce the volatility normally associated with early stage investments by applying its Investment Policy;

d) In respect of the C Shares and the D Shares, provide investors with the opportunity to exit shortly after 16 years following investment with a partial return of funds to Shareholders after 6 years; and

e) In respect of the E Shares, provide investors with the opportunity to exit between 10 and 12 years following investment with a possible early partial return of funds to Shareholders if market conditions present such an opportunity.

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

The Company's Investment Policy has been designed to satisfy the legislative requirements of the VCT scheme and to provide stable and readily realisable returns. The Company's Investment Policy is directed towards new investments into cash generative businesses which are operating in stable or mature fields with a high-quality customer base and which can provide a positive return to investors. The Board may on occasion, where deemed appropriate, invest in less mature or stable fields where there is the opportunity for substantial growth and development. The investments will be made with the intention of growing and developing the revenues and profitability of the target businesses to enable them to be considered for traditional forms of bank finance and other funding. This, in turn, should enable the Company to benefit from refinance gains or from a favourable sale to a third party.

Although the landscape of VCTs has been affected, the Investment Policy of the Company will continue to aim for regular tax-free dividends, maintenance of the VCT qualifying status and to minimise the volatility associated with early stage investments.

In respect of Qualifying Investments, the Company will seek:

a) Investments on which robust due diligence has been undertaken;

b) Investments where there is access to regular material financial and other information;

c) Investments where it may be possible to mitigate capital losses through careful analysis of the collateral available; and

d) Investments where there is a strong relationship with the key decision makers.

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; and

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

investments.

Qualifying Investments

The key ongoing objective of the Company is to generate an attractive return for investors, through a combination of tax-free income and capital appreciation.

The Company will pursue investments in a range of industries but the type of business being targeted is subject to the specific investment criteria discussed below. The objective is to build a portfolio of unquoted companies which are cash generative and, therefore, capable of producing income and capital repayments to the Company prior to their disposal by the Company.

Although invested in diverse industries, it is intended that the Company's portfolio will comprise companies with certain characteristics, for example clear commercial and financial objectives, strong customer relationships and, where possible, tangible assets with value. The Company will focus on identifying businesses typically with contractual revenues from financially sound counterparties or a stream of predictable transactions with multiple clients.

Businesses with assets providing valuable security may also be considered. The objective is to reduce the risk of losses through reliability of cash flows or quality of asset backing and to provide investors with tax-free income.

The criteria against which investment targets would be assessed will include the following:

a) An attractive valuation at the time of the investment;

b) Managed risk of capital losses;

c) The quality of the company's cash flows;

d) The quality of the businesses' counterparties, suppliers and market position;

e) The sector in which the business is active;

f) The quality of the company's assets;

g) The opportunity to structure an investment that can produce distributable income;

h) The potential for growing and developing the revenues and profitability of the company to enable it to be considered for traditional forms of bank finance and other funding; and

i) The ability to facilitate an exit which enables the Company to meet its key investment objective of returning funds in line with shareholder expectations.

As the value of investments increase the Company's Investment Manager 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

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), shall not without the previous sanction of an ordinary resolution of the Company 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 different 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 BVCA or similar guidelines under which investments are not normally re-valued above cost within 12 months of acquisition unless third party funding has occurred. A brief summary of the BVCA guidelines as it applies to 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;

· That this price is a proxy for fair value;

· 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; and

· If fair value cannot be reliably measured, transaction price is used for valuing investments where it is believed that this price is a proxy for fair value.

The December 2018 update to the IPEV Guidelines discourages the use of cost or price of a recent investment as a primary methodology for valuation. That change has had no impact on the portfolio's valuation as the Company has not made any investments recently and used the recent investment round. The majority of our portfolio is valued on a discounted cash flow basis.

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 of income and/or realised gains to Shareholders. It is envisaged that the Company will distribute most of its net income each year by way of dividend, subject to liquidity.

The Company's ability to pay dividends is subject to the existence of realised profits, legislative requirements, and the available cash reserves.

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, TPIM intends to identify opportunities to realise investments in order to exit investors in the most efficient way possible.

Exits will typically be realised through sales to businesses, acquisitions by private equity or other investment funds. The proceeds of any realisation will be used to repay borrowings if applicable 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.

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

These are intended to provide Shareholders with sufficient information to assess how the Company has performed against its objectives in the year to 31 March 2021, and over the longer term, through the application of its investment and other principal policies.

The primary KPIs in meeting these objectives are:

· Net Asset Value ("NAV") plus dividends paid ("Total Return");

· Earnings per Share;

· Compliance with VCT Legislation; and

· Ongoing Charges Ratio.

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.

C Share Class

The Net Asset Value per C Share has decreased from 84.87 pence per share at 31 March 2020 to 83.30 pence per share at the reporting date. After making an adjustment for dividends paid during the year the C Shares Total Return has increased from 154.87 pence per share at 31 March 2020 to 156.80 pence per share at the reporting date.

This represents an increase of 1.25%. Whilst Net Asset Value has fallen, Total Shareholder Return has continued to increase. Profits during the year were attributable to the income received on the C Share Class Hydro Investments.

The increase in the Total Return for the C Shareholders is in line with the Company's long-term objectives to achieve both capital growth and pay dividends to Shareholders.

D Share Class

The Net Asset Value per D Share has decreased from 62.46 pence per share at 31 March 2020 to 59.59 pence per share at the reporting date. After making an adjustment for dividends paid during the year the D Shares Total Return has increased from 127.46 pence per share at 31 March 2020 to 129.59 pence per share at the reporting date.

This represents an increase of 1.67 %. Whilst Net Asset Value has fallen, Total Shareholder Return has continued to increase, albeit at a slightly slower rate. Profits during the year were attributable to the income received on the D Share Class Hydro Investments.

The increase in the Total Return for the D Shareholders is in line with the Company's long-term objectives to achieve both capital growth and pay dividends to Shareholders.

E Share Class

The Net Asset Value per E Share has decreased from 101.69 pence per share at 31 March 2020 to 94.59 pence per share at the reporting date. After making an adjustment for dividends paid during the year the E Shares Total Return has decreased from 106.69 pence per share at 31 March 2020 to 106.09 pence per share at the reporting date. The reduction in Total Return, is a result of the valuation write down of Green Peak and a loss on the part disposal of the Company's holding in Triple Point Social Housing REIT plc. This represents a decrease of 0.56% in Total Shareholder Return from the previous year.

The Board and the Investment Manager continue to closely monitor the portfolio and seek to maximise value where possible.

Earnings per Share

The Charts show the Company's earnings per share by share class for the year ended 31 March 2021. The longer-term trend of performance on this measure is shown in the Charts below. This also shows the distinction between earnings generated by revenue and earnings generated by capital movements.

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 31 March 2021, the Company continued to meet the relevant tests.

To achieve compliance, the Company must meet a number of tests set by Her Majesty's Revenue and Customs ("HMRC"). A summary of these is set out on page 68 under "VCT Regulation".

Ongoing Charges Ratio

The Ongoing Charges Ratio3 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 2.88 % (2020: 2.70%) of the average net assets. The increase during the year is due to an increase in general administration costs of the Company.

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 VCTs.

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 over the following pages.

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

Investment classification for the C Share Class by asset value and sector value:

Investment Portfolio - C Share Class

Investments by Sector - C Share Class

Investment classification for the D Share Class by asset value and sector value :

Investment Portfolio - D Share Class

Investments by Sector - D Share Class

Investment classification for the E Share Class by asset value and sector value:

Investment Portfolio - E Share Class

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

Investments by Sector - E 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 has been approved as a VCT by HMRC. 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.

Exit Programme

During the previous year, the Company took steps to achieve a partial realisation for the C and D Class Shareholders. These distributions, along with initial tax relief equates to a return to C and D Class Shareholders of at least 100 pence per share.

The Company's exit programme is discussed in greater detail in the Investment Manager's Review on pages 30 to 40 and a copy of the Company's Share Realisation Policy is on page 17.

The valuation of, and potential exit routes for, the Company's portfolio of investments are reviewed and discussed at Board meetings. The Investment Manager has successfully implemented exit plans for other VCTs under its management.

Borrowing

During the previous year, the Company entered into a short-term facility agreement with Triple Point Lease Partners ("TPLP"). TPLP is a business that specialises in leasing, lending and infrastructure financing with the public sector (Local Authorities and the NHS) and corporates and is also managed by the Investment Manager.

The secured facility was for £2.7 million at a fixed rate of 4.5% per annum. The facility was put in place to refinance a portfolio of the hydroelectric assets to enable the C and D Share Classes to pay a dividend. This was in line with the original mandate of both share classes. This agreement has been extended with TPLP and at the year-end there was £2.3 million outstanding, with a further £0.4m of the facility still in place. As a precautionary measure, the Company had entered into a similar facility agreement with a different lender on the same key terms, but which included a two year availability period and a three year term. This agreement was put in place to mitigate the risk of the existing loan facility not being extended by the existing lender. This agreement has now been extended by a further 12 months at no additional cost. The facility agreement now expires on 11 June 2023.

Principal Risks, Uncertainties and Emerging Risks

The Directors seek to mitigate the Company's 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.

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 does 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 and emerging risks. The purpose of the Company's risk management policies and procedures is not to eliminate risks, but to reduce them and to ensure that the Company 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. Although Brexit is not deemed to be a principal risk for the majority of the portfolio, the Board acknowledges the fact that Brexit has had an impact on the operations of their Vertical Growing Investment. The Board continues to monitor the progress of PFC and receive updates from the Investment Manager on a quarterly basis.

Details of the Company's internal controls are contained in the Corporate Governance Internal Control section on page 55 and further information on exposure to risks including those associated with financial instruments is given in note 19 of the financial statements.

VCT Qualifying Status Risk: The Company is required at all times 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 also appointed Philip Hare & Associates LLP to undertake an independent VCT status monitoring role.

Investment Risk: The Company's VCT qualifying investments are 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 as a whole 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.

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 involve a medium to long-term commitment and are 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 19.

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 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.

Liquidity Risk: In line with the Company's initial mandate for the C and D Share Classes the Company has entered into a short-term loan facility of £2.3 million which has repayment terms of 364 days. The Company currently has £521k of cash. This therefore poses a slight risk to the Company's liquidity and cash flow prospects.

Mitigation: The Company and the lender have reviewed longer-term cash flow forecasts and the Company is comfortable that it will generate sufficient cash flow from its current investments to service and repay the borrowing. The Company keeps an open dialogue with the lender and will continue to update the lender on the outlook for its loan and on the performance of the Company's investment portfolio. The lender has indicated its willingness to extend the facility if required. The Company has entered into a similar facility agreement with a different lender which includes the same key terms, but also has a two year availability period. This agreement was put in place to mitigate the risk of the existing loan facility not being extended by the existing lender. This facility agreement has been extended by an additional 12 months at no additional cost to the Company. This now expires on 11 June 2023.

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 Share Classes, this could adversely impact the market price for the Hydro and Solar Assets or the value of the green benefits earned from generating renewable energy. Further, performance of hydroelectric 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.

A negative impact of climate change can be seen with the Company's investment in a Gas Fired Energy Centre, originally intended to bridge the transition gap to renewable energy. The market is moving away from these types of assets to a green alternative such as battery storage. This has had a negative impact on the valuation of this business.

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 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 19 to the financial statements.

The Company entered into a loan facility during the previous period. More detail on this can be found in the Strategic Report on page 22. The borrowing was in line with the original mandate for the C and D Shareholders. The Company continues to meet day-to-day liquidity needs through its cash resources and income from its investment portfolio, although, at present it does not have sufficient cash to repay the facility other than through a realisation of investments in the hydro portfolio. A separate facility agreement is in place to cover the possibility that the existing loan agreement was not extended. If a hydro disposal were not to occur, a repayment schedule would be agreed under the terms of the facility agreement. The proposed repayment profile would utilise cash generated from the hydro portfolio. The facility agreement is in place until 11 June 2023.

The Company's revenue comes from predominantly secure and reliable counterparties across all three of its share classes. The Hydro portfolio revenue is contractual, with inflation linked FiT income and export income from a recently signed 12-month power purchase agreement. The rooftop solar business also benefits from contractual and inflation linked income through the government FiT and ROC schemes. We have experienced minimal disruption to these revenue streams as a result of the COVID-19 pandemic.

The pandemic has highlighted the need for greater food security here in the UK. PFC has continued to refine its operations and has remained operational during the pandemic. Unfortunately, demand for its product from its main customer has reduced as a result of the reduction in demand for packaged sandwiches due to the pandemic. We do expect the heightened scrutiny of the food and farming sector to continue, from both a food security and an environmental point of view. PFC has diversified its customer base, taking on a new customer, but the capital intensive nature of operating a vertical growing facility remains challenging.

The Company had net current liabilities of £1.34 million (2020: net current liabilities of £1.35 million) and had cash balances of £521k (2020: £700k) (this does not include cash balances held within investee companies), which the Board believes are sufficient to meet current obligations as they fall due. Further detail on liquidity risk can be found in the principal risks, uncertainties and emerging risks section on page 23.

The major cash outflows of the Company are the payment of dividends, which is discretionary and can be scaled back if required. The interest on the loan facility amount is payable quarterly and has been factored into cash flow projections produced by the Company.

The Directors have reviewed cash flow projections which cover a period of at least 12 months from the date of approval of this report. These show that the Company has sufficient financial resources to continue to meet its day-to-day commitments for at least the next 12 months. Scenarios have been run including a hydro disposal scenario and alternatively a scenario in which the hydroelectric assets are held to maturity. Under both scenarios, the Company has sufficient resources to continue as a going concern for at least the next 12 months.

The Company has an existing 364-day loan facility in place. This has recently been renewed by the lender. As was the case last year, due to the short-term nature of the loan agreement, the Company entered into a similar facility agreement with a different lender which includes a two-year availability period. Following the year end, the Board sought an extension to the alternative facility agreement at no additional cost to the Company. This alternative facility agreement remains in place until 11 June 2023.

This agreement was put in place to mitigate the risk of the existing loan facility not being extended. The Directors therefore continue to adopt the going concern basis in preparing these financial statements.

Viability Statement

The Association of Investment Companies Code of Corporate Governance 2019 requires the Board to assess the Company's viability over an appropriate period. The Directors have assessed the prospects 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 three years, which was considered to be an appropriate time horizon, as investors are required to hold their investment for a period of five years in order to benefit from the associated tax reliefs which will have elapsed within the next three years.

The Board has determined that three years up to 31 March 2024 is the maximum timescale over which the future position of the Company can be forecast with a material degree of accuracy and therefore this is the appropriate period over which to consider its viability. During the next three years both the C and D Share Class will have completed their income generation phase. Further, the Company has proposed a resolution at the AGM that would allow the Company to explore a potential portfolio sale of the hydroelectric assets in the C and D Shares Classes in order to take advantage of favourable market conditions. Such a sale would likely see a full exit of the share classes and the capital being returned to Shareholders. The E Share Class will also reach its five-year holding period. Based on this the Directors believe it is reasonable to make their assessment over three years.

As part of the assessment the Company undertook various scenario testing, with regard to the Company's financing facility, this included both a sale and a hold to maturity case. In the hold scenario it was assumed that the Company would draw on the existing alternative facility with TP Leasing Limited ("TPLL") on the same terms and an agreed amortisation schedule would be put in place to be paid down utilising income from the hydro portfolio. On a sale, it was assumed that the loan would be repaid in full using proceeds realised from a sale.

In order to assess this requirement, the Board regularly considers the Company's strategy and considers the Company's current position. It also carries out a robust assessment of the principal risks, including future performance and liquidity. 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.

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 risk, uncertainties and emerging risks section on page 23.

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) of the Companies Act 2006 when performing their duty and forms the directors' statement required under section 414CZA of that 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.

Dividends

The Company declared dividends during the year to C Share Class holders of 3.50 pence per share, D Share Class holders of 5.00 pence per share and the E Share Class dividend of 6.50 pence per share.

This decision represented the culmination of a significant return of Capital for D Share Class holders, taking total distributions to 70.00 pence per share, and the continuing payment of an annual dividend for E Share Class holders. It represented the first dividend of the income generation phase for the C Share Class. Consideration was given to the reserve position of the Company to be able to facilitate these distributions.

The Company will declare further interim dividends to Shareholders of 1.75 pence per share for each of the C and D Share Class Shareholders and 3.50 pence per share for the E Share Class Shareholders.

Impact of COVID-19

During the year, the Board has had to give consideration to the potential impact on the Company and its portfolio companies from the global pandemic. The Board has continued to meet regularly during the year to discuss, amongst other things, 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. The Portfolio has been relatively unaffected by the impacts of the pandemic.

During the lockdown 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.

Strategic Report

Investment Manager's Review

Sector Analysis

We have the pleasure of presenting our annual review for the year ended 31 March 2021.

Our portfolio has, on the whole, remained relatively resilient against the worst effects of the pandemic.. Although power prices experienced volatility, the majority of our renewable assets are in receipt of FiTs and ROCS and fixed power purchase agreements with one of the big six energy providers. The Company and the Investment Manager will continue to monitor the ongoing operation of all the Share Class investments.

C Share Class

The C Share Class has investments in three companies which between them own six hydroelectric schemes in the Scottish Highlands.

Further updates on this sector are detailed in the Hydroelectric Power section on pages 34 to 35.

D Share Class

The D Share Class has investments in five companies which between them own six hydroelectric schemes in the Scottish Highlands.

Further updates on this sector are detailed in the Hydroelectric Power section on pages 34 to 35.

E Share Class

The E Share Class has a diverse portfolio consisting of 18 companies spanning hydroelectric power, rooftop solar, crematoria, vertical growing and social housing through its investment in a REIT.

TPIM is paid an annual management fee as Investment Manager to Triple Point Social Housing REIT plc and consequently has agreed to rebate a corresponding part of its management fee relating to this investment, to ensure VCT Investors are not bearing additional fees.

Review of Portfolio

Solar Energy

The Company holds an investment in four portfolios of rooftop solar PV systems through the following investee companies:

· Green Energy for Education Limited ("GEFE"), which owns a portfolio of 103 systems on residential rooftops in East Anglia;

· Campus Link Limited ("CMP"), which owns a portfolio of 36 systems on residential rooftops in South West England;

· Digima Limited ("DIG"), which owns a portfolio of 105 systems on residential rooftops in East Anglia; and

· Digital Screen Solutions Limited ("DSS"), which owns a portfolio of 323 systems on residential rooftops in Northern Ireland.

The GEFE, CMP and DSS portfolios are currently performing in line with, or slightly above, expectations. The DIG portfolio is performing slightly below expectations, and DIG is working closely with its Operations & Maintenance provider in an effort to improve this performance going forward.

Hydroelectric Power

The Company has investments in seven hydroelectric companies which operate ten schemes.

The hydroelectric assets across the Company's Share classes have finite lives and due to the recent changes in VCT legislation, the Company is unable to make new investments into renewables. Consequently, the NAV of the Company's Share Classes, being the present value of all the future cash flows generated by the assets will begin to fall as the remaining FiT periods begin to approach expiry and the operating lives of the assets begin to decrease. However, as the assets continue to operate and generate a track record, and as demand for such FiT bearing assets increase, the discount rates applied to future cash flows which determine the valuation of these assets has the positive effect of improving valuations.

The Board and the Investment Manager have considered the potential returns and risks for Shareholders from remaining invested in, as compared to selling the assets, and a detailed analysis of returns on a sale scenario and a hold to maturity scenario has been run. As such, we think there are compelling reasons to explore potential sale options and to present those to Shareholders for consideration. Further details can be found in the Chair's Statement on page 9.

The ten hydroelectric 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 31 March 2021, the hydroelectric companies generated 20,151 MWh of electricity. Based on an average of 3.8 MWh annual use per household, the companies generated enough electricity for 5,302 homes during the period.

The Hydro companies benefit from 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). 

The last 12 months have seen lower than expected rainfall across the Scottish Highlands. Rainfall variability is to be expected over the 40-year period of generation which our investee companies are expected to experience overall, and we continue to be pleased with the efficiency of the Hydro plants owned by them. The Hydroelectric companies remain highly focused on improving efficiencies and maximising output and continue working alongside hydro experts to further enhance performance where possible.

Gas Fired Energy Centre

The Company has an investment which has constructed a gas fired energy centre owned by Green Peak This provides a reliable and secure energy supply. This gas fired energy centre was commissioned during May 2018 and it consists 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.

During the year TPIM began to explore potential sale opportunities for this gas fired energy centre and sought the appointment of an experienced corporate finance adviser on the project. Green Peak was added to a portfolio of eight other similar companies managed by TPIM as the Board wanted to attempt to take advantage of a wider project to sell similar assets managed by TPIM in the expectation that a portfolio premium would be realised for Shareholders. Unfortunately, during this process potential bidders attributed a lower indicative valuation to Green Peak than previously expected. The indication from the valuation process is that headwinds for the energy sector will 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. Alongside the regulatory uncertainty, Green Peak has suffered from availability issues, and the impact of this lower availability has been factored into the valuations.

The revised valuation in our view considers the feedback received from market participants as part of the sales process and a summary of the key reasons for the downward movement in value are set out below:

· The cost of constructing and operating new energy centres.

· Reducing project life expectations following an acceleration of the Government and public consensus on the phasing out of fossil fuel generation and achieving Net Zero.

· Ofgem's review of the embedded benefits regime, future Balancing Market revenues, Brexit uncertainty, assumed terminal values and site-specific factors based on whether the assets are located in a local area where demand is generally higher than supply or vice versa.

In order to corroborate the information received during the bidding process we engaged an independent financial adviser to undertake an independent valuation of Green Peak. The valuation considered the Enterprise Valuation ranges for Green Peak to reflect the fair market value as at the Valuation Date considering observed market comparator benchmarks and asset-specific risks, which have been reflected in the discount rate range. However, it was noted that due to the capacity and nature of the asset relative to market comparators, we would expect the valuation of the asset to sit at the lower end of the enterprise value ranges outlined.

We have used this information to guide our valuation of the company. Disappointingly, as a result of this the valuation has fallen 46% to £1.2 million from £2.37 million. The valuation of this investment is included in the "Other Electric Power" column on page 30. This column also includes the Company's solar assets.

Vertical Growing

Vertical Growing is the practice of producing food in an indoor growing facility where all inputs (water, light, and nutrients) meet the optimum needs of the crop. Growing indoors is not a new concept, as greenhouse-based agriculture has been in existence for some time.

What PFC is aiming to achieve that differs radically from what now exists is to scale up the concept of indoor growing, in which a wide variety of produce is harvested in quantity enough to sustain even the largest of cities without significantly relying on resources beyond the city limits. Currently, in traditional growing, maximising crop production takes place over an annual growth cycle that is wholly dependent upon what happens outside - climate and local weather conditions.

Vertical Growing promises to eliminate external natural processes as confounding elements in the production of food, since crops will be grown indoors under carefully selected and well-monitored conditions, ensuring an optimal growth rate for each type of crop year-round. It is estimated that one acre of vertical farm could be equivalent to as many as ten to twenty traditional soil-based acres, depending upon which crop species is considered. Growing food close to home will lower significantly the amount of fossil fuels needed to deliver it to the consumer and will eliminate forever the need for fossil fuels during the act of farming (i.e. ploughing, applying fertiliser, seeding, weeding, harvesting).

PFC's vertical growing facility is designed to have a sealed environment, meaning that the product is grown under controlled conditions, with positive air pressure to prevent any pests entering the facility. This ensures that insects and other pests cannot attack the crop, removing both the need to use pesticides and to wash the crop before distribution therefore increasing its shelf life. A large variety of produce can be grown using this method including herbs and salad leaves.

PFC has, like many businesses in the UK been affected by the pandemic. PFC's main customer has reduced its demand for PFC's product during the year in consequence of a reduction in the demand of packaged sandwiches following the UK's shift to employees working from home. As a result of this reduction in demand, PFC has not been able to increase its yields as was intended, resulting in little to no growth during the year.

The capital-intensive nature of the facility has required that PFC take on additional financing at market rates from another TPIM managed business. While cash flow has been of concern during the period, PFC continues to be supported by TPIM and Joint Venture Partners in the vertical growing sector. While we do firmly believe in this opportunity, we must be cognisant that raising additional equity funding in the future will be necessary to continue to support PFC and its future development plans, at present, the business continues to have the backing of both TPIM and the Joint Venture Partners, who are continuing to fund the growth and development of the company.

In recent months there has been a significant increase in activity in the Vertical Growing Sector, with companies operating in the sector raising, and looking to raise large amounts of capital at significant valuations. Despite the short-term liquidity issue that are often typical in a company in a transformative sector, we believe there continues to be value in the company and in its plans for the future.

Crematorium Management

The Company has an investment in a business called Furnace Managed Services Limited ("FMS") that provides crematory and mercury abatement services for the crematoria of a London Borough. This investment receives revenues from local authorities and has consistently generated a steady return over the years it has been held. Looking ahead, the Company is expected to continue receiving dividends from FMS.

If you have any questions, please do not hesitate to call us on 020 7201 8990.

Jonathan Parr

Head of Energy

Triple Point Investment Management LLP

21 June 2021

Responsible Investing

PRI Signatory Status

Foundational to the Investment Manager's role of being a sustainable and responsible investor is its status as a PRI signatory which underpins its 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 its business and all investment strategies.

ESG Integration Approach

The Investment Manager aligns 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 its ESG integration approach. Using these foundational principles, TPIM has developed an in-house approach to drawing out maximum value from ESG integration. It places proportionate expectations on the investment companies into which it invests, according to its sector, size and stage of growth. The careful crafting of its method adds, it believes, a further strength to the investment process.

To ensure the effective and consistent application of this approach, The Investment Manager operates ESG Integration Policies. Each details how ESG considerations are taken in to account throughout investment processes, from the point of origination to exit. The Investment Manager takes a practical, proportionate, and material approach to ESG integration to manage the identification of associated risks and opportunities. There are two pillars of management to the approach:

1. Management (culture, capacity & governance): this refers to the allocation of appropriate resourcing, training and senior support for ESG integration. It demonstrates TPIM's actions have integrity aligned with the strategic position of the Investment Manager.

2. Investment process (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 investment decisions and, how TPIM captures decisions and changes to ESG factors during asset ownership.

TPIM is committed to evaluating the success of its approaches.

The investment teams report to our ESG Committee on selected ESG KPIs and where possible TPIM measures and reports where it believes that it has influenced better or faster progress towards greater sustainability either as a business, an employer, or an investor.

Strategic Report - Investment Portfolio Summary

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 should remain unchanged since acquisition, investments continue to be held at cost less any loan repayments received.

10 Largest 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.

David Frank

Chair

21 June 2021

GOVERNANCE

Board of Directors

Michael Stanes has been an Investment Director at Heartwood Investment Management, a London-based firm providing investment management and wealth structuring services for high net worth individuals, since 2010. He began his career at Warburg Investment Management (which became Mercury Asset Management) where he ran equity portfolios in London and Tokyo. He then moved to the US where he founded a business on behalf of Merrill Lynch offering equity portfolio management to high net worth individuals. In 2002 he joined Goldman Sachs Asset Management in London running global equity portfolios for a range of institutional and individual clients before joining a new fund management partnership as CEO.

David Frank is the Chair of the Board. He was a partner in Slaughter and May for 22 years before retiring from the firm in 2008. As well as being the firm's first Practice Partner from 2001 to 2008, his practice involved acting for several venture capital houses, including 3i and Schroder Ventures. He was also involved in several flotations in the venture capital sector, including 3i, Baronsmead and SVG Capital. Since retiring from legal practice, he has established a portfolio of voluntary roles.

Simon Acland has over 30 years' experience in venture capital, primarily at Quester, where he became Managing Director. When Quester was sold in 2007 it had £200 million under management and was one of the leading UK venture capital and VCT investment managers. Simon was a director of over 20 companies in Quester's portfolio, many of which achieved successful exits through flotation or trade sales. Simon is currently a director of several private companies, including the Satellite Applications Catapult, and is a member of the investment committee of the Angel Co-Fund. Simon is a Founder and Director of Green Angel Syndicate, the UK's only business angel group specialising in the fight against climate change and global warming. He also acts as an Adviser to the Triple Point Impact EIS Fund.

CORPORATE GOVERNANCE

Compliance Statement

The Board of Triple Point Income VCT 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 Income VCT 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 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 51 of this report.

The Directors are provided with key operational 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, considering 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, David Frank, 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 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 his 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 video 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 schedule of matters reserved for the Board 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 AGM.

Independence of Directors

The Board has a Non-Executive Chair and two other Non-Executive Directors, all of whom were considered independent on their appointment. A majority of the Directors are independent of the Investment Manager.

Simon Acland acts as an Adviser to the Triple Point Impact EIS Service that is an Alternative Investment Fund managed by the Investment Manager. He therefore has a business relationship with the Investment Manager. The Board nonetheless considers Simon Acland to be independent as the Triple Point Impact EIS Service is an area of the Investment Manager's business which is not directly related to that of the Company and as such does not create a conflict between his interests as an Adviser and that of the Company. Furthermore, the Board does not consider that such relationship is material both with regards to remuneration or time and would therefore be unlikely to impair his judgement.

The AIC Code outlines further 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. Two of the three Non-Executive Directors have served on the Board for nine years or more. Length of service is currently one of several indicators the Board considers 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 is satisfied that the Board as a whole is independent, including in character and judgement.

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.

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 or Nomination Committee. The Remuneration Report is detailed on pages 61 to 65.

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:

The Board holds four meetings during the year on a quarterly basis. These meetings are arranged in advance of the start of the financial year. However, from time to time further ad hoc meetings are scheduled to deal with transactional and specific events for which arrangements are put in place on shorter notice and subject to the availability of those directors available at the time.

Performance Evaluation

The Board, led by the Chair, established a formal process for a formal and rigorous annual evaluation of the performance of the Board, individual Directors and the Audit Committee. The evaluation considered the composition, diversity, investment matters, development and how effectively each member works together to achieve its objectives.

During the period, the Board conducted a performance evaluation by completing a written questionnaire to appraise and gather useful learnings on the functioning of the Board, the Audit Committee and individual Directors.

The Chair, supported by the Company Secretary, acted on the results of the evaluation. The results of the questionnaire demonstrated that there is a consensus that the performance and functioning of the Board remains effective. However, the following areas of improvement were identified with the appropriate action approved by the Board:

· Information flows outside of the Board Meetings should be enhanced. The Board will be provided with monthly updates on ongoing exit processes the Investment Manager.

· Greater focus should be given to considering the overall strategy of the Company. The Board agreed to hold an annual strategy meeting to consider the long-term strategic options for the future of the Company and its share classes. 

Succession Plan

As part of the annual evaluation in 2020, the Directors considered length of service of the Board as a whole and prepared a succession plan that addresses the regular refreshment of the Board membership.

The Board considered that, due to potential asset sales and exit opportunities, that there was a benefit of historical knowledge and continuity of Directors. Subject to the proposed change to the Investment Policy, the Board's succession plan will be updated to align with the long-term strategic direction of the Company cognisant of the need for regular refreshment of the Board.

Corporate Social Responsibility

The Board is committed to integrating social, environmental and governance matters in the Company's business operations, including the Company itself and the companies it invests in. The Board is actively seeking ways to interact with their stakeholders. The Board seeks to avoid investing in companies which do not operate within ethical, environmental and social legislation. Details on the Company's responsible investing can be found on page 41.

Internal Control and Risk Management

The Board has overall responsibility for establishing procedures to manage risk, overseeing the internal control framework, determining the nature and extent of the principal risks the Company is willing to take in order to achieve its long-term strategic objectives, and identifying emerging risks. The purpose of an internal control framework is to ensure that proper accounting records are maintained, the Company's assets are safeguarded, and the financial information used within the business and for publication is accurate and reliable; such a system can only provide reasonable and not absolute assurance against material misstatement or loss. Emerging risks are regularly monitored, and to the extent possible or practicable, mitigating actions are implemented.

The system of risk management and internal control is designed to manage rather than eliminate the risk of failure to achieve business objectives. As part of this process a bi-annual review of the internal control systems is carried out. The review covers all material controls including financial, operational and compliance controls.

The Directors regularly review financial results and investment performance with the Investment Manager.

The Directors have established an ongoing process designed to meet the particular needs of the Company in identifying, evaluating and managing the significant and emerging risks to which it is exposed including, among others, market risk, VCT qualifying investment risk and operational risks which are recorded on a risk register. The controls employed to mitigate these risks are identified and the residual risks are rated taking into account the impact of the mitigating factors. The risk register is reviewed bi-annually. The principal risks, uncertainties and emerging risks identified from the risk register and a description of the Group's risk management procedures can be found on pages 22 to 23.

TPIM is engaged to provide accounting services, and Hanway Advisory Limited is engaged to provide secretarial services and retains physical custody of the documents of title relating to investments.

The Directors regularly review 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.

Internal control systems include the production and review of quarterly bank reconciliations and management accounts.

Capital management is monitored and controlled by the Investment Manager. The capital being managed includes equity and fixed interest VCT qualifying investments, cash balances and liquid resources including debtors and creditors. The Investment Manager's procedures are subject to internal compliance checks.

The Company's objectives when managing capital are:

· To safeguard its ability to continue as a going concern, so that it can continue to provide returns to Shareholders and benefits for other stakeholders; and

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

Stakeholder and Shareholder Engagement

Stakeholder and Shareholder engagement is set out in the Section 172(1) statement on pages 26 to 28.

Directors' Share Interests

All of the Directors' share interests were held beneficially and they are actively encouraged to own shares. The Company has not set out any formal requirements or guidelines to Directors concerning their ownership of shares in the Company.

On behalf of the Board

David Frank

Chair 

21 June 2021

Audit Committee Report

The Audit Committee consists of the Chair, David Frank, and the Non-Executive Directors, Simon Acland and Michael Stanes. The Audit Committee deals with matters relating to audit, financial reporting and internal control systems. The Committee meets at least twice a year and as required. The Audit Committee also has direct access to BDO LLP, the Company's auditor.

Audit Committee Role and Responsibilities

In respect of the year ended 31 March 2021, the Audit Committee discharged its responsibilities by:

· Reviewing the external auditor's plan for the audit of the financial statements, including identification of key risks and confirmation of auditor independence;

· Monitoring the integrity of the financial statements of the Company and any formal announcements relating to the Company's financial performance, and reviewing significant financial reporting judgements contained in them;

· Reviewing the Company's internal financial controls and internal control and risk management systems operated in relation to the Company's business and assessing those controls in minimising the impact of key risks;

· Reviewing the appropriateness of the Company's accounting policies;

· Providing advice on whether the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable, and provides the information necessary for Shareholders to assess the Company's position and performance, business model and strategy;

· Reviewing the Company's half-yearly results and draft annual financial statements prior to Board approval;

· Making recommendations to the Board regarding the reappointment of the external auditor and approving their remuneration;

· Reviewing and monitoring the external auditor's independence and objectivity;

· Reviewing the effectiveness of the external audit process, taking into consideration relevant UK professional and regulatory requirements;

· Reviewing the Company's going concern status; and

· Reviewing the external auditor's findings document.

Financial Reporting

The primary role of the Audit Committee in relation to financial reporting is to review with the Investment Manager and the Auditor the appropriateness of the half year report and Annual Report, concentrating on, amongst other matters:

· Compliance with financial reporting standards and relevant financial and governance reporting requirements;

· Amendments to legislation and corporate governance reporting requirements;

· The impact of any new and proposed amendments to accounting standards which affect the Company;

· Material areas in which significant judgements have been applied;

· Whether the Committee believes that proper and appropriate processes and procedures have been followed in the preparation of the Annual Report; and

· Considering and recommending the contents of the Annual Report for approval.

Significant Matters Considered by the Audit Committee in Relation to Financial Reporting

The Audit Committee is responsible for considering and reporting on any significant issues that arise in relation to the Financial Statements and how they have been addressed.

The following key issues were discussed:

· Compliance with HM Revenue & Customs conditions for maintenance of approved Venture Capital Trust status.

· Valuation and existence of unquoted investments.

· Net Asset Value of C, D and E Share Classes.

External Audit

It is the Audit Committee's responsibility to monitor the performance, objectivity, and independence of the external auditors and this is assessed by the Committee each year. In evaluating BDO's performance the Committee examines the effectiveness of the audit process, independence and objectivity of the auditor, taking into consideration the length of tenure of the external auditors, the non-audit services undertaken during the year and relevant UK professional and regulatory requirements, and the quality of delivery of its services.

BDO LLP attended 1 of the 2 formal Audit Committee meetings held during the year. Matters typically discussed include the Auditor's assessment of the transparency and openness of the Investment Manager, confirmation that there has been no restriction in scope placed on them, the independence of their audit and how they have exercised professional scepticism.

When considering whether to recommend the reappointment of the external auditor, the Audit Committee takes into account their current fee compared to the external audit fees paid by other similar companies. The quality and competence of the external auditor is also taken into consideration. The Audit Committee will then recommend to the Board the appointment of an external auditor which is approved by Shareholders at the AGM.

The FRC's Ethical Standard requires the audit partner to rotate every five years. The first audit engagement for BDO LLP was for the year ended 31 March 2018 and this is the audit partner's 4th year.

The independence and effectiveness of the external audit process is assessed as part of the Board evaluation conducted annually and by the quality and content of the audit plan provided to the Audit Committee by the auditor and the discussions then held on topics raised. The Audit Committee will challenge the auditor at the Audit Committee meeting if appropriate.

The Audit Committee's terms of reference include the following roles and responsibilities:

· Periodically considering the need for an internal audit function;

· Reviewing and monitoring the external auditor's independence and objectivity and the effectiveness of the audit process, taking into consideration relevant UK professional regulatory requirements;

· Monitoring the extent to which the external auditor is engaged to supply non-audit services; and

· Ensuring that the Investment Manager has arrangements in place for the investigation and follow-up of any concerns raised confidentially by staff in relation to propriety of financial reporting or other matters.

The Committee reviews its terms of reference and effectiveness annually and recommends to the Board any changes required as a result of the review. The terms of reference are available on request from the Company Secretary.

The Board considers that the members of the Committee collectively have the skills and experience required to discharge their duties effectively and the Committee as a whole has competence relevant to the sector in which it operates.

The Company does not have an independent internal audit function as it is not deemed appropriate given the size of the Company and the nature of the Company's business. However, the Committee considers annually whether there is a need for such a function and, if there were, would recommend it be established.

Non-Audit Services

The Audit Committee safeguards the objectivity and independence of the auditor by reviewing the nature and extent of non-audit services supplied by the external auditor to the Company.

There were no non-audit services performed during the year.

Independence

The Audit Committee is required to consider the independence of the external auditor. In fulfilling this requirement, the Audit Committee has considered the Audit Strategy report from BDO LLP which describes their arrangements to identify, report and manage any conflict of interest and their independence.

Audit Committee Meeting Attendance

During the period, the following Audit Committee meetings were held, and the number attended by each director compared with the maximum possible attendance:

The Audit Committee relies on the Investment Manager to assess the valuation of unquoted investments and the existence of those investments. The Investment Manager has a director on the board of all the investee companies and meets regularly with the other directors and hence has an oversight of all the investments made. The Audit Committee have reviewed the valuations and discussed them with both the Investment Manager and the external auditor to confirm their assessment of the valuation of the unquoted investments and the existence of those investments.

The Investment Manager has confirmed to the Audit Committee that the conditions for maintaining the Company's status as an approved VCT have been complied with throughout the year. The position has been reviewed by Philip Hare & Associates LLP in its capacity as adviser to the Company on taxation matters.

The Audit Committee has considered the Annual Report for the year ended 31 March 2021 and has reported to the Board that it considers it to be fair, balanced and understandable providing the information necessary for Shareholders to assess the Company's position, performance, business model and strategy.

On behalf of the Board.

David Frank

Audit Committee Chair 

21 June 2021

Directors' Remuneration Report

Statement of the Chair

I am pleased to present the Remuneration Report on behalf of the Board for the year ended 31 March 2021.

This report is submitted in accordance with schedule 8 of the Large and Medium Sized Companies and Groups (Accounts and Reports) (amendment) Regulations 2013 and The Companies (Miscellaneous Reporting) Regulations 2018, in respect of the year ended 31 March 2021. This report also meets the Financial Conduct Authority's Listing Rules and describes how the Board has applied the Principles and Provisions relating to Directors' remuneration set out in the AIC Code. The reporting requirements require two sections to be included:

· Directors' Remuneration Policy - This sets out our Remuneration Policy for Directors of the Company that has been in place since 23 July 2020 following approval by shareholders.

· Annual Remuneration Report - This sets out how our Directors were paid for the period ended 31 March 2021. There will be an advisory shareholder vote on this section of the report at our 2021 AGM.

We value engagement with our Shareholders and for the constructive feedback we receive and look forward to your support at the forthcoming AGM.

David Frank

Chair

21 June 2021

Directors' Remuneration Policy

Approval of Remuneration Policy

The Company's Remuneration Policy was last approved on 23 July 2020 at the AGM.

Remuneration Policy Overview

The Board currently comprises three Directors, all of whom are Non-Executive. The Board's policy is that the remuneration of Non-Executive Directors should reflect the experience of the Board as a whole, be fair and be comparable with that of other relevant VCT that are similar in size and have similar investment objectives and structures. Furthermore, the level of remuneration should be sufficient to attract and retain the Directors needed to oversee the Company properly and to reflect the specific circumstances of the Company, the duties and responsibilities of the Directors and the value and amount of time committed to the Company's affairs. The articles of association provide that the Directors shall be paid in aggregate a sum not exceeding £100,000 per annum. None of the Directors are eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits in respect of their services as Non-Executive Directors of the Company. There are no planned changes to the Remuneration Policy last approved by shareholders at the 2020 AGM.

Consideration of Remuneration

The Board does not have a separate Remuneration Committee, as the Company has no employees or executive Directors. The Board has not retained external advisers in relation to remuneration matters but has access to information about directors' fees paid by other companies of a similar size and type. As such, the Board as a whole will consider the remuneration of the Directors, however no Director is involved in determining their own remuneration. The Board will review the remuneration of the Directors in line with the VCT industry on an annual basis, if thought appropriate. Otherwise, only a change in responsibilities is likely to incur a change in remuneration of any one Director or the Remuneration Policy itself.

Directors' Service Contracts

The Directors are engaged under letters of appointment and do not have service contracts with the Company.

Directors' Term of Office

The Directors' letters of appointment provide for an appointment of 12 months', after which three months' written notice must be given by either party. Each Director will be subject to annual re-election by Shareholders at the Company's AGM in each financial year.

Policy on Payment for Loss of Office

A Director who ceases to hold office is not entitled to receive any payment other than accrued fees (if any) for past services.

Consideration of Shareholder Views

The Company is committed to ongoing shareholder dialogue and takes an active interest in voting outcomes. Where there are substantial votes against resolutions in relation to directors' remuneration, the Group will seek the reasons for any such vote and will detail any resulting actions in the Directors' Remuneration Report. No views which are relevant to the formulation of the Directors' Remuneration Policy have been expressed to the Company by Shareholders, whether at a general meeting or otherwise.

Future Policy Table

The Directors are entitled only to the fees as set out in the table below. No element of Directors' remuneration is subject to performance factors. There are no other fees payable to the Directors for additional services outside of their contracts.

Annual Remuneration Report

Directors' Fees

Details of each Director's contract is shown below. The Chair is paid more than the other Directors to reflect the additional responsibilities of the role. The below annual fees for the Directors are fixed.

Single Total Figure (audited information)

The fees paid to Directors in respect of the year ended 31 March 2021 and the prior year are shown below:

For the period ending 31 March 2020, as part of the performance evaluation undertaken by the Board, the remuneration of the Directors was reviewed, considering the Company and individual performance.

The Board agreed that the fees of the Non-Executive Directors and the Chair should be increased to reflect the time commitment and responsibilities of the role. The fee for the Non-Executive Directors (excluding the chair) was increased from £17,500 to £21,000 and the fee for the Chair was increased from £20,000 to £24,000.

This fee increase took effect from 1 April 2020. The increased remuneration of the Directors reflects the findings of a benchmarking exercise undertaken by the Company Secretary in which the remuneration of directors of comparable VCT of a similar size, objective and structure were evaluated against those of the Company's Directors.

The Company has no executive Directors or employees.

Directors' emoluments compared to payments to Shareholders:

Directors' Share Interests (audited information)

At 31 March 2021, the Directors held no shares in the Company (2020: Nil).

At 31 March 2021, Simon Acland's wife held 48,750 D Class Shares (2020: 48,750).

There are no other connected parties to the Directors that held any shares at 31 March 2021. There are no requirements or restrictions on Directors holding shares in the Company.

Company Performance

The following performance charts compare the Total Return of the Company's C, D and E Share Classes over the period from admission to 31 March 2021 with the Total Return from notional investments in the FTSE SmallCap Index and FTSE All Share Index over the same period. The indices chosen are considered to be the most appropriate broad equity markets for comparative purposes.

Shareholders should be reminded that shares in VCTs generally continue to trade at a discount to the NAV of the Company.

The Total Return does not include the initial 30% tax relief available to Shareholders.