TIDMPUMA
HIGHLIGHTS
-- Fund fully invested in a diverse range of high quality businesses and
projects.
-- NAV per share up 1.62p, now 95.28p (after adding back dividends)
following profit of GBP280,000 before tax for the year.
-- 25p per share of dividends paid since inception, 5p during the year,
equivalent to a 7.1% per annum tax-free running yield on net investment.
-- As envisaged in the original Prospectus, resolutions will be put forward
for a winding up of the VCT at the end of its planned life.
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present the Company's fifth Annual Report, which is for
the year ended 29 February 2016.
The Company was launched and began investing in Spring 2011, with a
planned life of five years. In this, its fifth year, the process of
realising the Company's qualifying investments and preparing to return
capital to investors advanced significantly.
Results
The Company reported a profit before tax for the year of GBP280,000
(2015: GBP262,000), equivalent to 1.62p per ordinary share (calculated
on the weighted average number of shares). The Net Asset Value per
ordinary share ("NAV") at the year end (adding back the 25p of dividends
paid to date) was 95.28p.
Dividends
As envisaged in the Company's prospectus, the Company has for the fifth
calendar year in succession paid a dividend of 5p per ordinary share,
equivalent to a 7.1% tax-free running yield on shareholder's net
investment.
Investments
At the end of the year, the Company had just over GBP8 million invested
in a mixture of qualifying and non-qualifying investments whilst
maintaining our VCT qualifying status. These investments are primarily
in asset-backed businesses and projects providing a gross annual return
of 8.3% on the basis of current deployments and investment performance.
Details of the Company's portfolio of investments, and expected
timetable of exits, can be found in the Investment Manager's report,
below.
VCT qualifying status
PricewaterhouseCoopers LLP ("PwC") provides the board and the investment
manager with advice on the ongoing compliance with HMRC rules and
regulations concerning VCTs. PwC also assists the Investment Manager in
establishing the status of investments as qualifying holdings.
Proposal to Wind-Up the Company
The Company has now just passed its fifth anniversary. In accordance
with the plans set out in the Company's Prospectus, the Board expects to
convene a General Meeting of the Company in the autumn of this year, at
which resolutions will be proposed to place the Company into members'
solvent liquidation. If these are passed, liquidators will be appointed
and the Company will seek to de-list from the London Stock Exchange.
Once such resolutions have been passed by shareholders, for a maximum
period of three years many of the VCT rules, including the 70 per cent
qualifying rule, are suspended whilst the Company retains its VCT status
of tax free distribution to UK taxpayers. The intention is to return the
balance of the capital in an orderly way, with disposals timed
appropriately to enable further substantial distributions by the end of
2016.
David Buchler
Chairman
30 June 2016
INVESTMENT MANAGER'S REPORT
Introduction
In its fifth year, the Company continues to make good progress. It is
now beginning the process of returning capital to shareholders through
the realisation of investments whilst maintaining its qualifying status.
We believe our portfolio is well positioned to deliver attractive
returns to shareholders within the Company's expected remaining time
horizon.
Qualifying Investments
As previously reported, Huntly Trading Limited and Jephcote Trading
Limited (in which the Company had invested GBP1,000,000 and GBP1,650,000
respectively) have been, as members of SKPB Services LLP, engaged in a
contract with Ansgate (Barnes) Limited to provide project management and
contracting services in connection with the construction of nine new
houses and 12 new flats at a construction known as The Albany, in Barnes,
south west London. We are pleased to report that the project completed
successfully earlier this year, generating attractive returns. During
the year, SKPB Services LLP also successfully completed its contract
with HB Villages Tranche 2 Limited to provide project management and
contracting services in connection with the construction of 16 units in
Bolton as accommodation and supported housing for psychiatric and
learning disabled service users and their care-workers. We understand
that the management of SKPB Services are in advance discussions in
connection with a new large contract.
The Company's investment of GBP1,650,000 (alongside other Puma VCTs)
into Saville Services Limited continues to perform well. Saville
Services has been providing contracting services over a series of
projects, including the construction of a private detached housing
development in the countryside outside Aberdeen, under contract to
Churchill Homes Limited, a longstanding Aberdeenshire developer.
Shortly following the year end, Saville Services successfully completed
its contract in connection with the development of 16 apartments for
supported living for psychiatric and learning disabled service users in
Wolverhampton, generating attractive returns for Saville Services which
will benefit the Company when its investment is repaid in due course.
As previously reported, your Company also made investments of GBP880,000
into each of two contracting companies, Frederica Trading Limited and
Glenmoor Trading Limited. Frederica and Glenmoor (as members of a
limited liability partnership, DEFG Trading LLP, with other contracting
companies) have been providing contracting services for supported living
developments in Bury and Clacton, the latter of which completed during
the year with an attractive return to DEFG Trading. During the year,
Frederica redeemed its investment in full which the Company subsequently
has reinvested into Elgin Trading Limited, another member of DEFG
Trading, retaining its underlying exposure to DEFG Trading's growing
contracting services business.
During the year, the Company had invested GBP200,000 (as part of a
GBP2.6 million investment alongside other Puma VCTs) into Alyth Trading
Limited, a nationwide provider of contracting services to provide
working capital for its ongoing business. During the year, Alyth
Trading entered into a contract to provide contracting services in
connection with the construction of a 68 bed purpose built care home in
Egham, Windsor. We understand that the construction is progressing
well.
As reported in the Company's interim report, the Company realised its
investment in Brewhouse and Kitchen Limited during the year, receiving a
GBP1.45 million return on its investment of GBP1.25 million. Our
funding facilitated the acquisition of freehold pubs and the roll-out of
the Brewhouse and Kitchen brand which now operates nine units across
locations in London, Bristol and the South East of England. We are
pleased to have facilitated the growth and development of this exciting
business and wish its team well in the future.
Non-Qualifying Investments
During the year, the Company advanced a non-qualifying loan of
GBP360,000 (through an affiliate Valencia Lending Limited) to Citrus PX
Two Limited. This loan, together with loans from other vehicles managed
and advised by your Investment Manager, form part of a series of
revolving credit facilities to provide working capital to the Citrus PX
business. Citrus PX operates a property part exchange service
facilitating the rapid purchase of properties for developers and
homeowners. The facility provides a series of loans to Citrus PX, with
the benefit of a first charge over a geographically diversified
portfolio of residential properties on conservative terms.
We are pleased to report that the Company's GBP7.1 million bridging
facility to companies within the Connolly and Callaghan group and its
GBP1.33 million loan (as part of a GBP4 million financing with other
Puma VCTs) to Puma Brandenburg Finance Limited, a subsidiary of Puma
Brandenburg Limited, were both repaid in full during the year giving a
good risk-adjusted return to the Company.
During the year, to further manage liquidity, the Company invested
GBP365,000 via Latimer Lending Limited in a floating rate bond issued by
Commonwealth Bank of Australia (GBP200,000) and in a 6.5% bond issued by
J Sainsbury plc (GBP165,000).
Shortly following the year end, the Company advanced a GBP1 million
non-qualifying loan (as part of a GBP2.9 million financing with other
vehicles and companies managed and advised by your Investment Manager)
to Oval Estates (St Peter's) Limited. Oval Homes owns a 6 acre site in
Radstock, near Bath, which has outline planning permission for the
development of 81 new houses and the Company's loan, extended at an
appropriate loan-to-value ratio, is secured with a first charge on the
site. It is expected that, upon receipt of detailed planning permission
(expected later this year), the Company's loan will be repaid as Oval
Homes secures development finance.
Investment Strategy
We are pleased to have invested the Company's funds in a balanced
portfolio of both qualifying and non-qualifying secured investments and
are working on improving the liquidity of the portfolio wherever
possible whilst maintaining an appropriate risk adjusted return. We
continue to focus on the monitoring of our investments and are focused
on exits. The objective remains to achieve an orderly winding up of the
Company's assets at the end of its life, subject to shareholder approval
at the forthcoming General Meeting.
Shore Capital Limited
30 June 2016
Investment Portfolio Summary
As at 29 February 2016
Valuation as a % of
Valuation Cost Gain/(loss) Net Assets
GBP'000 GBP'000 GBP'000
Qualifying Investments
- Unquoted
Elgin Trading Limited 880 880 - 9%
Glenmoor Trading
Limited 880 880 - 9%
Huntly Trading Limited 1,000 1,000 - 11%
Jephcote Trading
Limited 1,650 1,650 - 17%
Saville Services
Limited 1,650 1,650 - 17%
Alyth Trading Limited 200 200 - 2%
Total Qualifying
Investments 6,260 6,260 - 65%
Non-Qualifying
Investments
Palmer Lending Limited 1,000 1,000 - 11%
Latimer Lending
Limited 34 34 - 0%
Valencia Lending
Limited 360 360 - 4%
Total Non-Qualifying
investments 1,394 1,394 - 15%
Liquidity Management
Latimer Lending
Limited (Sainsburys
Bond)* 160 164 (4) 2%
Latimer Lending
Limited (CBA Bond)* 202 202 - 2%
Total Liquidity
Management
investments 362 366 (4) 4%
Total Investments 8,016 8,020 (4) 84%
Balance of Portfolio 1,478 1,478 - 16%
Net Assets 9,494 9,498 (4) 100%
* Listed on the London Stock Exchange
Of the investments held at 29 February 2016, all are incorporated in
England and Wales.
Income Statement
For the year ended 29 February 2016
Year ended 29 February Year ended 28 February
2016 2015
Note Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
(Loss)/Gain on
investments 8 (b) - (4) (4) - 38 38
Income 2 674 - 674 606 - 606
674 (4) 670 606 38 644
Investment
management
fees 3 (53) (159) (212) (53) (159) (212)
Other expenses 4 (178) - (178) (170) - (170)
(231) (159) (390) (223) (159) (382)
Profit on
ordinary
activities
before
taxation 443 (163) 280 383 (121) 262
Tax
(charge)/credit
on profit on
ordinary
activities 5 (93) 32 (61) (26) - (26)
Profit and total
comprehensive
income for the
year 350 (131) 219 357 (121) 236
Basic and
diluted
Return/(loss)
per Ordinary
Share (pence) 6 2.59p (0.97p) 1.62p 2.65p (0.90p) 1.75p
All items in the above statement derive from continuing operations.
There are no gains or losses other than those disclosed in the Income
Statement.
The total column of this statement is the Statement of Total
Comprehensive Income of the Company prepared in accordance with FRS 102
'The Financial Reporting Standard applicable in the UK and Republic of
Ireland'. The supplementary revenue and capital columns are prepared in
accordance with the Statement of Recommended Practice, 'Financial
Statements of Investment Trust Companies and Venture Capital Trusts'
issued in November 2014 by the Association of Investment Companies.
Balance Sheet
As at 29 February 2016
As at As at
Note 29 February 2016 28 February 2015
GBP'000 GBP'000
Fixed Assets
Investments 8 8,016 9,040
Current Assets
Debtors 9 1,020 653
Cash 673 424
1,693 1,077
Creditors - amounts falling due within one year 10 (214) (165)
Net Current Assets 1,479 912
Total Assets less Current Liabilities 9,495 9,952
Creditors - amounts falling due after more than one
year 11 (1) (1)
Net Assets 9,494 9,951
Capital and Reserves
Called up share capital 12 135 135
Capital reserve - realised (1,100) (973)
Capital reserve - unrealised (4) -
Revenue reserve 10,463 10,789
Total equity 9,494 9,951
Net Asset Value per Ordinary Share 13 70.28p 73.66p
The financial statements on pages 25 to 41 were approved and authorised
for issue by the Board of Directors on 30 June 2016 and were signed on
their behalf by:
David Buchler
Chairman
30 June 2016
Statement of Cash Flows
For the year ended 29 February 2016
Year ended Year ended
29 February 28 February
2016 2015
GBP'000 GBP'000
Reconciliation of profit after tax to net cash used
in operating activities
Profit on ordinary activities after taxation 219 236
Loss/(Gain) on investments 4 (38)
Taxation 61 26
Increase in debtors (367) (481)
(Decrease)/increase in creditors (12) 15
Net cash used in operating activities (95) (242)
Cash flow from investing activities
Purchase of investments (1,560) (950)
Proceeds from disposal of investments 2,580 1,904
Net cash generated from investing activities 1,020 954
Cash flow from financing activities
Dividends paid to shareholders (676) (676)
Net cash used in financing activities (676) (676)
Net increase in cash and cash equivalents 249 36
Cash and cash equivalents at start of year 424 388
Cash and cash equivalents at the end of year 673 424
Statement of Changes in Equity
For the year ended 29 February 2016
Called up Capital Capital
share reserve - reserve - Revenue
capital realised unrealised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at
1 March
2014 135 (642) (210) 11,108 10,391
Profit for
the year - (121) - 357 236
Realisation
of
revaluation
from prior
period - (210) 210 - -
Dividends
paid - - - (676) (676)
Balance as at
28 February
2015 135 (973) - 10,789 9,951
Profit for
the year - (127) (4) 350 219
Dividends
paid - - - (676) (676)
Balance as at
29 February
2016 135 (1,100) (4) 10,463 9,494
Distributable reserves comprise: Capital reserve-realised, Capital
reserve-unrealised (excluding gains on unquoted investments) and the
Revenue reserve. At the year-end distributable reserves were
GBP9,359,000 (2015: GBP9,816,000).
The Capital reserve-realised includes gains/losses that have been
realised in the year due to the sale of investments, net of related
costs. The Capital reserve-unrealised represents the investment holding
gains/losses and shows the gains/losses on investments still held by the
company not yet realised by an asset sale.
The revenue reserve represents the cumulative revenue earned less
cumulative distributions.
1. Accounting Policies
Accounting convention
Puma VCT VII plc ("the Company") was incorporated on 30 September 2010
and is domiciled in England and Wales. The registered office is Bond
Street House, 14 Clifford Street, London W1S 4JU. The Company is a
public limited company whose shares are listed on LSE with a premium
listing. The company's principal activities and nature of operations are
disclosed in the Report of the Directors.
The financial statements have been prepared under the historical cost
convention, modified to include the revaluation of investments held at
fair value, and in accordance with FRS 102 'The Financial Reporting
Standard applicable in the UK and Republic of Ireland' ("FRS 102") and
the Statement of Recommended Practice, 'Financial Statements of
Investment Trust Companies and Venture Capital Trusts' issued in
November 2014 by the Association of Investment Companies ("the SORP").
Monetary amounts in these financial statements are rounded to the
nearest whole GBP1,000, except where otherwise indicated.
First time adoption of FRS 102
These financial statements are the first financial statements of the
Company prepared in accordance with FRS 102. The financial statements of
the Company for the year ended 28 February 2015 were prepared in
accordance with previous UK GAAP.
Some of the FRS 102 recognition, measurement, presentation and
disclosure requirements and accounting policy choices differ from
previous UK GAAP. There are no significant changes to the accounting
policies as a result of the adoption of FRS 102 and no changes in
previously reported profit or equity.
Investments
All investments are measured at fair value. They are all held as part
of the Company's investment portfolio and are managed in accordance with
the investment policy set out on page 12.
Listed investments are stated at bid price at the reporting date.
Unquoted investments are stated at fair value by the Directors with
reference to the International Private Equity and Venture Capital
Valuation Guidelines ("IPEV") as follows:
-- Investments which have been made within the last twelve months or where
the investee company is in the early stage of development will usually be
valued at the price of recent investment except where the company's
performance against plan is significantly different from expectations on
which the investment was made in which case a different valuation
methodology will be adopted.
-- Investments in debt instruments will usually be valued by applying a
discounted cash flow methodology based on expected future returns of the
investment.
-- Alternative methods of valuation such as net asset value may be applied
in specific circumstances if considered more appropriate.
Realised surpluses or deficits on the disposal of investments are taken
to realised capital reserves, and unrealised surpluses and deficits on
the revaluation of investment are taken to unrealised capital reserves.
1. Accounting Policies (continued)
Income
Dividends receivable on listed equity shares are brought into account on
the ex-dividend date. Dividends receivable on unquoted equity shares are
brought into account when the Company's right to receive payment is
established and there is no reasonable doubt that payment will be
received. Interest receivable is recognised wholly as a revenue item on
an accruals basis.
Performance fees
Upon its inception, the Company agreed performance fees payable to the
Investment Manager, Shore Capital Limited, and members of the investment
management team at 20 per cent of the aggregate excess of the amounts
realised over GBP1 per Ordinary Share returned to Ordinary Shareholders.
This incentive will only be effective once the other holders of Ordinary
Shares have received distributions of GBP1 per share. The performance
fee is accounted for as an equity-settled share-based payment.
Section 26 of FRS 102 "Share-Based Payment" requires the recognition of
an expense in respect of share-based payments in exchange for goods or
services. Entities are required to measure the goods or services
received at their fair value, unless that fair value cannot be estimated
reliably in which case that fair value should be estimated by reference
to the fair value of the equity instruments granted.
At each balance sheet date, the Company estimates that fair value by
reference to any excess of the net asset value, adjusted for dividends
paid, over GBP1 per share in issue at the balance sheet date. Any change
in fair value is recognised in the Income Statement with a corresponding
adjustment to equity.
Expenses
All expenses (inclusive of VAT) are accounted for on an accruals basis.
Expenses are charged wholly to revenue, with the exception of:
-- expenses incidental to the acquisition or disposal of an investment
charged to capital; and
-- the investment management fee, 75 per cent of which has been charged to
capital to reflect an element which is, in the directors' opinion,
attributable to the maintenance or enhancement of the value of the
Company's investments in accordance with the Board's expected long-term
split of return; and
-- the performance fee which is allocated proportionally to revenue and
capital based on the respective contributions to the Net Asset Value.
Taxation
Corporation tax is applied to profits chargeable to corporation tax, if
any, at the applicable rate for the year. The tax effect of different
items of income/gain and expenditure/loss is allocated between capital
and revenue return on the marginal basis as recommended by the SORP.
Deferred tax is recognised in respect of all timing differences that
have originated but not reversed at the balance sheet date, where
transactions or events that result in an obligation to pay more, or
right to pay less, tax in the future have occurred at the balance sheet
date. This is subject to deferred tax assets only being recognised if it
is considered more likely than not that there will be suitable taxable
profits from which the future reversal of the underlying timing
differences can be deducted. Timing differences are differences arising
between the Company's taxable profits and its results as stated in the
financial statements which are capable of reversal in one or more
subsequent periods. Deferred tax is measured on a non-discounted basis
at the tax rates that are expected to apply in the periods in which
timing differences are expected to reverse, based on tax rates and laws
enacted or substantively enacted at the balance sheet date.
1. Accounting Policies (continued)
Reserves
Realised losses and gains on investments, transaction costs, the capital
element of the investment management fee and taxation are taken through
the Income Statement and recognised in the Capital Reserve - Realised on
the Balance sheet. Unrealised losses and gains on investments and the
capital element of the performance fee are also taken through the Income
Statement and are recognised in the Capital Reserve - Unrealised.
Debtors
Debtors include accrued income which is recognised at amortised cost,
equivalent to the fair value of the expected balance receivable.
Dividends
Final dividends payable are recognised as distributions in the financial
statements when the Company's liability to make payment has been
established. The liability is established when the dividends proposed by
the Board are approved by the Shareholders. Interim dividends are
recognised when paid.
Key accounting estimates and assumptions
The Company makes estimates and assumptions concerning the future. The
resulting accounting estimates and assumptions will, by definition,
seldom equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to the
carrying amounts of assets within the next financial year relate to the
fair value of unquoted investments. Further details of the unquoted
investments are disclosed in the Investment Manager's Report on pages 3
to 5 and notes 8 and 14 of the financial statements.
2. Income
Year ended 29 February Year ended 28 February
2016 2015
GBP'000 GBP'000
Income from investments
Loan stock interest 669 602
Bond yields 4 -
673 602
Other income
Bank deposit income 1 4
674 606
3. Investment Management Fees
Year ended 29 February Year ended 29 February
2016 2015
GBP'000 GBP'000
Shore Capital Limited 212 212
212 212
Shore Capital Limited ("Shore Capital") has been appointed as the
Investment Manager of the Company for an initial period of five years,
which can be terminated by not less than twelve months' notice, given at
any time by either party, on or after the fifth anniversary. The Board
is satisfied with the performance of the Investment Manager. Under the
terms of this agreement Shore Capital will be paid an annual fee of 2
per cent of the Net Asset Value payable quarterly in arrears calculated
on the relevant quarter end NAV of the Company. These fees are capped,
the Investment Manager having agreed to reduce its fee (if necessary to
nothing) to contain total annual costs (excluding performance fee and
trail commission) to within 3.5 per cent of Net Asset Value. Total costs
this year were 3.5 per cent of Net Asset Value (2015: 3.5%).
4. Other expenses
Year ended Year ended
29 February 28 February
2016 2015
GBP'000 GBP'000
Administration - Shore Capital Fund Administration
Services Limited 37 37
Directors Remuneration 61 61
Social security costs 3 3
Auditor's remuneration for statutory audit 22 22
Insurance 1 1
Legal and professional fees 7 9
Trail commission 28 29
Other expenses 19 8
178 170
Shore Capital Fund Administration Services Limited provides
administrative services to the Company for an aggregate annual fee of
0.35 per cent of the Net Asset Value of the Fund, payable quarterly in
arrears.
Remuneration for each Director for the year is disclosed in the
Directors' Remuneration Report on page 17. The Company had no employees
(other than Directors) during the year. The average number of
non-executive Directors during the year was 3 (2015: 3). The
non-executive Directors are considered to be the Key Management
Personnel of the Company with total remuneration for the year of
GBP64,000 (2015: GBP64,000), including social security costs.
The Auditor's remuneration of GBP18,500 (2015: GBP18,000) has been
grossed up in the table above to be inclusive of VAT.
5. Tax on Ordinary Activities
Year Year ended
ended 29 28
February February
2016 2015
GBP'000 GBP'000
UK corporation tax charged to revenue reserve 93 26
UK corporation tax credited to capital reserve (32) -
UK corporation tax charge for the year 61 26
Factors affecting tax charge for the year
Profit on ordinary activities before taxation 280 262
Tax charge calculated on profit on ordinary activities
before taxation at the applicable rate of 20% 56 52
Capital loss/(gain) not deductible/(taxable) 1 (8)
Tax losses utilised in the year - (18)
Other differences 4 -
61 26
Capital returns are not taxable as VCTs are exempt from tax on realised
capital gains subject that they comply and continue to comply with the
VCT regulations.
No provision for deferred tax has been made in the current accounting
year. No deferred tax assets have been recognised as the timing of their
recovery cannot be foreseen with any certainty. Due to the Company's
status as a Venture Capital Trust and the intention to continue meeting
the conditions required to obtain approval in the foreseeable future,
the Company has not provided deferred tax on any capital gains and
losses arising on the revaluation or disposal of investments.
6. Basic and diluted return/(loss) per Ordinary Share
Year ended 29 February 2016
Revenue Capital Total
Profit/(loss) for the year (GBP'000) 350 (131) 219
Weighted average number of shares 13,508,927 13,508,927 13,508,927
Return per share 2.59p (0.97)p 1.62p
Year ended 29 February 2015
Revenue Capital Total
Profit/(loss) for the year (GBP'000) 357 (121) 236
Weighted average number of shares 13,508,927 13,508,927 13,508,927
Return per share 2.65p (0.90)p 1.75p
7. Dividends
The Directors do not propose a final dividend in relation to the year
ended 29 February 2016 (2015: GBPnil). An interim dividend of 5p per
ordinary share was paid from revenue reserves in respect of the year
ended 29 February 2016 totalling GBP676,000 (2015: GBP676,000).
8. Investments
(a) Movements in Non qualifying
investments Qualifying investments investments Total
GBP'000 GBP'000 GBP'000
Book cost and
valuation at 1 March
2015 7,310 1,730 9,040
Purchases at cost 200 1,360 1,560
Proceeds on disposal (1,250) (1,330) (2,580)
Net unrealised loss - (4) (4)
Valuation at 29
February 2016 6,260 1,756 8,016
Book cost at 29
February 2016 6,260 1,760 8,020
Unrealised loss at 29
February 2016 - (4) (4)
Valuation at 29
February 2016 6,260 1,756 8,016
(b) Gains/(losses) on investments
The gains/(losses) on investments for the year shown in the Income
Statement is analysed as follows:
Year ended Year ended
29 28
February February
2016 2015
GBP'000 GBP'000
Realised gain on disposal - 38
Net unrealised losses on revaluation in respect of
investments held at the year end (4) -
(4) 38
(c) Quoted and unquoted investments
Market value as at 29 Market value as at 29
February 2016 February 2015
GBP'000 GBP'000
Quoted investments 362 -
Unquoted investments 7,654 9,040
8,016 9,040
Further details of these investments are disclosed in the Investment
Portfolio Summary on pages 6 to 10 of the Annual Report.
9. Debtors
As at 29 February 2016 As at 28 February 2015
GBP'000 GBP'000
Accrued income 1,020 653
10. Creditors - amounts falling due within one year
As at 29 February 2016 As at 28 February 2015
GBP'000 GBP'000
Accrued management fees and
administration costs 127 139
Corporation tax 87 26
214 165
11. Creditors - amounts falling due after more than one year
As at 29 February 2016 As at 28 February 2015
GBP'000 GBP'000
Loan notes 1 1
On 29 November 2010, the Company issued Loan Notes in the amount of
GBP1,000 to a nominee on behalf of the Investment Manager and members of
the investment management team. The Loan Notes accrue interest of 5 per
cent per annum.
The loan notes entitle the Investment Manager and members of the
investment management team to receive a performance related incentive of
20 per cent of the aggregate amounts realised by the Company in excess
of GBP1 per Ordinary Share. The Shareholders will be entitled to the
balance. This incentive, to be effected through the issue of shares in
the Company, will only be exercised once the holders of Ordinary Shares
have received dividends of GBP1 per share (whether capital or income).
The performance incentive structure provides a strong incentive for the
Investment Manager to ensure that the Company performs well, enabling
the Board to approve distributions as high and as soon as possible.
In the event that distributions to the holders of Ordinary Shares
totalling GBP1 per share have been made the Loan Notes will convert into
sufficient Ordinary Shares to represent 20 per cent of the enlarged
number of Ordinary Shares.
The amount of the performance fee will be calculated as 20 per cent of
the excess of the net asset value (adjusted for dividends paid) over
GBP1 per issued share.
12. Called Up Share Capital
As at 29 February 2016 As at 28 February 2015
GBP'000 GBP'000
13,508,927 ordinary shares of
1p each 135 135
13. Net Asset Value per Ordinary Share
As at As at
29 February 2016 28 February 2015
Net assets 9,494,000 9,951,000
Shares in issue 13,508,927 13,508,927
Net asset value per share
Basic 70.28p 73.66p
Diluted 70.28p 73.66p
14. Financial Instruments
The Company's financial instruments comprise its investments, cash
balances, debtors and certain creditors. The fair value of all of the
Company's financial assets and liabilities is represented by the
carrying value in the Balance Sheet. Excluding cash balances, the
Company held the following categories of financial instruments at 29
February 2016:
As at 29 As at 28
February February
2016 2015
GBP'000 GBP'000
Financial assets measured at fair value through profit
or loss
Investments managed through Shore Capital Limited 8,016 9,040
Financial assets that are debt instruments measured
at amortised cost
Interest, dividends and other receivables 1,020 653
Financial liabilities measured at amortised cost (128) (140)
8,908 9,553
Management of risk
The main risks the Company faces from its financial instruments are
market price risk, being the risk that the value of investment holdings
will fluctuate as a result of changes in market prices caused by factors
other than interest rate or currency movements, liquidity risk, credit
risk and interest rate risk. The Board regularly reviews and agrees
policies for managing each of these risks. The Board's policies for
managing these risks are summarised below and have been applied
throughout the year.
14. Financial Instruments (continued)
Credit risk
Credit risk is the risk that the counterparty to a financial instrument
will fail to discharge an obligation or commitment that it has entered
into with the Company. The Investment Manager monitors counterparty risk
on an ongoing basis. The carrying amount of financial assets best
represents the maximum credit risk exposure at the balance sheet date.
The Company's financial assets and maximum exposure to credit risk is as
follows:
As at 29 February 2016 As at 28 February 2015
GBP'000 GBP'000
Investments in loans, loan
notes and bonds 4,738 5,027
Cash at bank and in hand 673 424
Interest, dividends and other
receivables 1,020 653
6,431 6,104
The cash held by the Company at the year end is in a U.K. bank.
Bankruptcy or insolvency of the bank may cause the Company's rights with
respect to the receipt of cash held to be delayed or limited. The Board
monitors the Company's risk by reviewing regularly the financial
position of the bank and should it deteriorate significantly the
Investment Manager will, on instruction of the Board, move the cash
holdings to another bank.
Credit risk associated with interest, dividends and other receivables
are predominantly covered by the investment management procedures.
Investments in loans, loan notes and bonds comprises a fundamental part
of the Company's venture capital investments, therefore credit risk in
respect of these assets is managed within the Company's main investment
procedures.
Market price risk
Market price risk arises mainly from uncertainty about future prices of
financial instruments held by the Company. It represents the potential
loss the Company might suffer through holding investments in the face of
price movements. The Investment Manager actively monitors market prices
and reports to the Board, which meets regularly in order to consider
investment strategy.
The Company's strategy on the management of market price risk is driven
by the Company's investment policy as outlined in the Strategic Report
on page 12. The management of market price risk is part of the
investment management process. The portfolio is managed with an
awareness of the effects of adverse price movements through detailed and
continuing analysis, with an objective of maximising overall returns to
shareholders.
Holdings in unquoted investments may pose higher price risk than quoted
investments. Some of that risk can be mitigated by close involvement
with the management of the investee companies along with review of their
trading results.
4.5% of the Company's investments are quoted investments and 95.5% are
unquoted investments.
14. Financial Instruments (continued)
Liquidity risk
Details of the Company's unquoted investments are provided in the
Investment Portfolio summary on page 6. By their nature, unquoted
investments may not be readily realisable, the Board considers exit
strategies for these investments throughout the year for which they are
held. As at the year end, the Company had no borrowings, other than loan
notes amounting to GBP1,000 (2015: GBP1,000) (see note 11).
The Company's liquidity risk associated with investments is managed on
an ongoing basis by the Investment Manager in conjunction with the
Directors and in accordance with policies and procedures in place as
described in the Report of the Directors. The Company's overall
liquidity risks are monitored on a quarterly basis by the Board. The
Company maintains sufficient investments in cash and readily realisable
securities to pay accounts payable and accrued expenses.
Fair value interest rate risk
The benchmark that determines the interest paid or received on the
current account is the Bank of England base rate, which was 0.5 per cent
at 29 February 2016. All of the loan and loan note investments are
unquoted and hence not directly subject to market movements as a result
of interest rate movements.
Cash flow interest rate risk
The Company has exposure to interest rate movements primarily through
its cash deposits and loan notes which track either the Bank of England
base rate or LIBOR.
Interest rate risk profile of financial assets
The following analysis sets out the interest rate risk of the Company's
financial assets as at 29 February 2016.
Weighted average
Weighted average period until
Rate status interest rate maturity Total
GBP'000
Cash at bank - RBS Floating 0.15% - 673
Cash at bank -
Investec Fixed 0.80% 32 day notice -
Loans, loan notes
and bonds Floating 6.07% 47 months 562
Loans, loan notes
and bonds Fixed 15.77% 44 months 2,020
Balance of assets Non-interest bearing - 6,454
9,709
The following analysis sets out the interest rate risk of the Company's
financial assets as at 28 February 2015.
Weighted average
Weighted average period until
Rate status interest rate maturity Total
GBP'000
Cash at bank - RBS Floating 0.15% - 165
Cash at bank -
Investec Fixed 0.80% 32 day notice 259
Loans, loan notes
and bonds Floating 17.19% 31 months 3,697
Loans, loan notes
and bonds Fixed 5.00% 9 months 1,330
Balance of assets Non-interest bearing - 4,666
10,117
14. Financial Instruments (continued)
Foreign currency risk
The reporting currency of the Company is Sterling. The Company has not
held any non-Sterling investments during the year.
Fair value hierarchy
Financial assets and liabilities measured at fair value are disclosed
using a fair value hierarchy that reflects the significance of the
inputs used in making the fair value measurements, as follows:-
-- Level a - Fair value is measured based on quoted prices in an active
market.
-- Level b - Fair value is measured based on directly observable current
market prices or indirectly being derived from market prices.
-- Level c (i) - Fair value is measured using a valuation technique that is
based on data from an observable market.
-- Level c (ii) - Fair value is measured using a valuation technique that is
not based on data from an observable market.
Fair values have been measured at the end of the reporting year as
follows:-
As at 29 February 2016 As at 28 February 2015
GBP'000 GBP'000
Level a
Investments listed on LSE 362 -
Level c(ii)
Unquoted investments 7,654 9,040
8,016 9,040
The Level c (ii) investments have been valued in line with the Company's
accounting policies and IPEV guidelines. Further details of these
investments are provided in the significant investments section of the
Annual Report.
Reconciliation of fair value for level c (ii) financial instruments held
at the year-end:
Unquoted Loans and Total
shares loan notes
GBP'000 GBP'000 GBP'000
Balance as at 1 March 2014 3,628 6,328 9,956
Purchases at cost 385 565 950
Repayments of loans and loan notes (38) (1,866) (1,904)
Realised gain 38 - 38
Balance as at 28 February 2015 4,013 5,027 9,040
Purchases at cost 140 1,420 1,560
Repayments of loans and loan notes (875) (1,705) (2,580)
Transfer to quoted investments - (366) (366)
Balance as at 29 February 2016 3,278 4,376 7,654
15. Capital management
The Company's objectives when managing capital are to safeguard the
Company's ability to continue as a going concern, so that it can provide
an adequate return to shareholders by allocating its capital to assets
commensurate with the level of risk.
By its nature, the Company has an amount of capital, at least 70% (as
measured under the tax legislation) of which must be, and remain,
invested in the relatively high risk asset class of small UK companies
within three years of that capital being subscribed.
The Company accordingly has limited scope to manage its capital
structure in the light of changes in economic conditions and the risk
characteristics of the underlying assets. Subject to this overall
constraint upon changing the capital structure, the Company may adjust
the amount of dividends paid to shareholders, issue new shares, or sell
assets to maintain a level of liquidity to remain a going concern.
The Board has the opportunity to consider levels of gearing, however
there are no current plans to do so. It regards the net assets of the
Company as the Company's capital, as the level of liabilities is small
and the management of those liabilities is not directly related to
managing the return to shareholders. There have been no changes to this
approach from prior years.
16. Contingencies, Guarantees and Financial Commitments
There were no commitments, contingencies or guarantees of the Company at
the year-end (2015: GBPnil).
17. Controlling Party
In the opinion of the Directors there is no immediate or ultimate
controlling party.
The financial information set out in this announcement does not
constitute the Company's statutory financial statements in accordance
with section 434 Companies Act 2006 for the year ended 29 February 2016,
but has been extracted from the statutory financial statements for the
year ended 29 February 2016 which were approved by the Board of
Directors on 30 June 2016 and will be delivered to the Registrar of
Companies. The Independent Auditor's Report on those financial
statements was unqualified and did not contain any emphasis of matter
nor statements under s 498(2) and (3) of the Companies Act 2006.
The statutory accounts for the year ended 28 February 2015 have been
delivered to the Registrar of Companies and received an Independent
Auditors report which was unqualified and did not contain any emphasis
of matter nor statements under s 498(2) and (3) of the Companies Act
2006.
A copy of the full annual report and financial statements for the year
ended 29 February 2016 will be printed and posted to shareholders
shortly. Copies will also be available to the public at the registered
office of the Company at Bond Street House, 14 Clifford Street, London,
W1S 4JU and will be available for download from
www.pumainvestments.co.uk.
This announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: PUMA VCT VII PLC via Globenewswire
HUG#2024498
(END) Dow Jones Newswires
June 30, 2016 11:35 ET (15:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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