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P U M A V C T 1 0A N N U A L R E P O R T
& A C C O U N T S 2 0 17
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Contents
Highlights 1Chairman’s Statement 2Investment Manager’s Report 3Investment Portfolio Summary 6Significant Investments 7Directors’ Biographies 14Strategic Report 15 Report of the Directors 17Directors’ Remuneration Report 20Corporate Governance Statement 21Independent Auditor’s Report 24Income Statement 26Balance Sheet 27Statement of Cash Flows 28Statement of Changes in Equity 29Notes to the Accounts 30Officers and Professional Advisers 41Notice of Annual General Meeting 42Form of Proxy 45
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Puma VCT 10 plc Annual report and accounts 2017
2017 Highlights
•Fundssubstantiallyinvestedinadiverserangeofhighqualitybusinessesandprojects
•Requirementthatqualifyinginvestmentsare70%ofthefundonanHMRCbasisnowmet
•Profitof£279,000beforetaxfortheperiod,apost-taxgainof0.76pper share
•12ppersharedividendspaidduringtheperiod,equivalenttoan8.6%perannumtaxfreerunningyieldon investment
Puma VCT 10 plc Annual report and accounts 2017
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Puma VCT 10 plc Annual report and accounts 2017
Chairman’s Statement
The Company has made good progress during the period, and thereafter. We are pleased to report that the Company’s net assets are now substantially deployed in a diverse range of high quality businesses and projects
IntroductionIampleasedtopresenttheCompany’sthirdAnnualReportwhich,reflectingthechangeofaccountingyearend,representsa14monthperiodended28February2017.
TheInvestmentManager,PumaInvestments,nowhasover£121millionofVCTmoneyundermanagementinthisandotherPumaVCTsandawell-established,experiencedVCTteamtomanagetheCompany’sportfolioofinvestmentsanddealflow.
ResultsTheCompanyreportedaprofitbeforetaxof£279,000fortheperiod(2015:£147,000fortheyear)andapost-taxgainof0.76p(2015:0.19p)perordinaryshare(calculatedontheweightedaveragenumberofshares).TheNetAssetValueperordinaryshare(“NAV”)at28February2017afteraddingbackdividendspaidwas97.10p(2015:96.35p).
DividendIampleasedtoreportthat,inlinewithourstatedobjectiveassetoutinourprospectus,yourboarddeclaredthe
Company’sfirsttwodividendsduringtheperiod,atotalof12pperOrdinaryShare.Thisisequivalenttoan8.6%perannumtax-freerunningyieldonyour investment.
InvestmentsDuringtheperiod,theCompanycompletedaseriesofinvestmentsforatotalof£5.3million.Attheendoftheperiod,theCompanyhadatotalof£22.4millioninvestedinamixtureofqualifyingandnon-qualifyinginvestmentsandachievedthethresholdofholding70%ofitsportfolioinqualifyinginvestmentsrequiredtomaintainourVCTstatus.Theseinvestmentsareprimarilyinasset-backedbusinessesandprojects.DetailsoftheseinvestmentscanbefoundintheInvestmentManager’sreportonpages3to6.
VCT qualifying statusPricewaterhouseCoopersLLP(“PwC”)providestheboardandtheInvestmentManagerwithadviceontheongoingcompliancewithHMRCrulesandregulationsconcerningVCTsandhasreportednoissuesinthisregardfortheCompanytodate.PwCwillcontinue
toassisttheInvestmentManagerinmonitoringrulecomplianceandestablishingthestatusofpotentialinvestmentsasqualifyingholdingsinthe future.
OutlookTheCompanyhasmadegoodprogressduringtheperiod,andthereafter.WearepleasedtoreportthattheCompany’snetassetsarenowsubstantiallydeployedinadiverserangeofhighqualitybusinessesandprojects.TheongoinglackofavailabilityofbankcredithasenabledtheCompanytoassembleaportfolioofinvestmentsonattractiveterms.Whilsttherewillprobablybesomefurtherchangesinthecompositionoftheportfolio,theBoardexpectstoconcentrateinthefutureonthemonitoringofourexistinginvestmentsandconsideringtheoptionsforexitsinduecourse.
David Vaughan Chairman29June2017
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Puma VCT 10 plc Annual report and accounts 2017
CGIofpurpose-builtcarehomeinChestercurrentlyunderconstruction
Investment Manager’s Report
TheCompany’sfundsarenowsubstantiallydeployedinbothqualifyingandnon-qualifyinginvestments,havingmetitsminimumqualifyinginvestmentpercentageof70percentduringtheperiod
IntroductionTheCompany’sfundsarenowsubstantiallydeployedinbothqualifyingandnon-qualifyinginvestments,havingmetitsminimumqualifyinginvestmentpercentageof70percentduringtheperiod.Webelieveourportfolioiswellpositionedtodeliverattractivereturnstoshareholderswithinthefund’sexpectedremainingtimehorizon.
InvestmentsQualifying InvestmentsDuringtheperiodtheCompanymade£2.14millionofqualifyinginvestmentsinSavilleServicesLimited,acompanyprovidingcontractingservicesoveraseriesofprojectsacrosstheUnitedKingdom.InSeptember2016,SavilleServicesenteredintoanewcontracttoprovidecontractingservicesinconnectionwiththeconstructionofa77-bed,purpose-builtcarehomeinChester.Weunderstandthatthedevelopmentisprogressingwellandthehomeisscheduledtoopeninthefirstquarterof 2018.
Duringtheperiod,theCompanymadea£980,000qualifyinginvestment(aspartofa£2.8millioninvestmentalongsideotherPumaVCTs)inGrowingFingersLimited,andafurther£420,000wasinvestedaftertheperiodend.Theinvestmentwillfundtheconstructionandlaunchof
anewpurpose-built108placenurseryschoolinWendover,Buckinghamshire,anaffluentcommutertownwithdirectlinkstoLondon.GrowingFingersisanewcompanyheadedbyamanagementteamwithmanyyears’operationalexperienceinnurseriesandhealthcarefacilities.TheCompanybenefitsfromfirstchargesecurityovertheWendoversiteandtheGrowingFingersbusinessandisexpectedtoproduceanattractivereturntothe Company.
Aspreviouslyreported,inJuly2014,beforethepassingoftheFinanceAct2014,theCompanycompleteda£1.875millionqualifyinginvestment(aspartofa£5millioninvestmentalongsideotherPumaVCTs)inUrbanMiningLimited,amemberoftheChinookUrbanMininggroupofcompanies.ChinookUrbanMiningisawell-fundedenergy-from-wastebusinesswhichisdevelopingaflagshipplantinEastLondontogenerateelectricitythroughthegasificationofmunicipalsolidwasteandwillbenefitfromRenewableObligationsCertificates.TheinvestmentissecuredwithafirstchargeovertheChinookUrbanMiningbusinessandtheeightacresiteoftheEastLondonplantandisyieldinganattractivereturntotheCompany.
Aspreviouslyreported,amajorfireoccurredinFebruary2016attheMaterialsRecyclingFacility(“MRF”)operatedbyOpesIndustriesLimited(“Opes”),intowhichtheCompanyhasinvestedatotalof£3.45m(aspartofan£8.8minvestmentbyPumaentities).Asaresultoftheincident,andasreportedintheCompany’spreviousannualreport,theboardmadeaprovisionof£510,000againstthecarryingvalueoftheCompany’sinvestmentinOpes.Opesowneda73hectaresiteinnorthOxfordshirewithaMRF,includingalandfillsitefornon-hazardousmaterials
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Puma VCT 10 plc Annual report and accounts 2017
andanaggregates/gravelquarryingbusiness.TheCompany’sinvestmentwastoprovidefundingfortheconstructionandequippingoftheMRFandworkingcapitalduringthebuild-upofthetrade.ThefundingwasprovidedintheformofequityandloanstockandourinterestsarecoveredbyafirstfixedandfloatingchargeoverOpes’assets.Followingtheincident,theCompanyappointedanadministratoroverOpesinordertobestprotecttheCompany’sinvestment.Wearepleasedtoreportthatshortlyaftertheperiodend,theadministratorexchangedcontractsforthesaleofthenorthOxfordshiresite;thecashconsiderationispayableinstagesovera12monthperiod.Moreover,discussionsarecontinuingwithOpes’insurersregardingreimbursementofthedamagetotheplantandthebuildingandofthecostsofbusinessinterruption.
Aspreviouslyreported,beforethepassingoftheFinance(2)Act2015,theCompanyinvestedatotalof£7.5millioninthreenewlyestablishedqualifyingbusinesses.WarmHearthLimited,inwhichtheCompanyinvested£2.5million(aspartofa£5millioninvestmentalongsideotherPumaVCTs),wasestablishedtooperateatradingbusinessinthehospitalityandleisuresectorsand/ortoacquirebusinessesthatoperatewithinthosesectors.MiniRainbowsLimited,inwhichtheCompanyinvested£2.5million(aspartofa£5millioninvestmentalongsideotherPumaVCTs),wasestablishedtooperateatradingbusinessinthechildcaresectorand/ortoacquirebusinesseswhichoperatewithinthatsector.WelcomeHealthLimited,inwhichtheCompanyinvested£2.5million(aspartofa£5millioninvestmentalongsideotherPumaVCTs),wasestablishedtooperateatradingbusinessinthehealthcaresectorand/ortoacquirebusinessesthatoperatewithinthatsector.
Wearepleasedtoreportthat,duringtheperiod,WarmHearthLimitedcommenceditstrade,seekingtocapitaliseonthestronggrowthtrendswithinthecraftbeersub-marketandaddvaluefromtheroll-outanduseofastrongbrand.InpursuitofthisstrategyWarmHearthwasabletonegotiateafranchiseagreementwith
Brewhouse&KitchenLimited(“B&K”),astrongandfast-growingbrandedoperator.Itsdifferentiationistohavecraftmicro-brewingactivitieswithineachofitspubunitsasapointoffocus.WarmHearthacquiredthreesubstantialfreeholdpubassetsinChester,WilmslowandBedford,allofwhicharenowopenandtradingasfullybrandedB&Kunits.
WeunderstandthatthedirectorsofMiniRainbowsLimitedandWelcomeHealthLimitedhavebothagreedtermstodeploytheirfundsinthenearfuture.WehavebeenadvisedbyPwCthatHMRChaveconfirmedthattheseinvestmentsshouldalsobequalifyingforVCTpurposes.
Non-Qualifying InvestmentsAspreviouslyreported,wehaveadoptedastrategyforthenon-qualifyingportfolioofsecuredloans(andothersimilarinstruments)offeringagoodyieldwithhopefullylimiteddownsiderisk.Tothatend,theCompanyhadinvestedasat28February2017atotalof£6.1millioninaseriesoflendingbusinesseswiththisstrategy.Detailsoftheloansthattheselendingbusinesseshavemadearesetout below.
InSeptember2015,£800,000wasadvanced(throughanaffiliate,LavenderLendingLimited)toAthena(Alpha)Limited,aspartofa£4.4millionfacilityfromothervehiclesmanagedandadvisedbytheInvestmentManager,tofundthedevelopmentofanewpurpose-built,80-bedresidentialcarehomeinDover,Kent.Thesiteoccupiesaprominentlocationadjacenttotherecentlyopenednewcommunityhospital,approximatelya5minutedrivefromDovertowncentre.Wearepleasedtoreportthat,followingtheperiodend,theborrowersoldthecarehomeshortlyfollowingpracticalcompletionandtheloanwasrepaidinfullgivingagoodrateofreturn.
VariousloanstoentitieswithintheCitrusGroup(throughaffiliatesValenciaLendingLimitedandVictoriaLendingLimited),aspartofaseriesoffacilitiesfromothervehiclesmanagedandadvisedbyyourInvestmentManagertoprovideworkingcapitaltotheCitrusPXbusiness,continuetodeliverattractivereturns.CitrusPX
operatesapropertypartexchangeservicefacilitatingtherapidpurchaseofpropertiesfordevelopersandhomeowners.ThefacilityprovidesaseriesofloanstoCitrusPX,withthebenefitofafirstchargeoverageographicallydiversifiedportfolioofresidentialpropertiesonconservativeterms.Attheperiod-end,theCompany’sexposuretotalled£1.29million,includinga£1millionadvanceduringtheperiod.
Aspreviouslyreported,a£474,000loan(aspartofa£2.9millionfacilityfromothervehiclesmanagedandadvisedbyyourInvestmentManager)hadbeenextended(throughanaffiliate,ValenciaLendingLimited)toChurchillHomes(CulterHouse)Limited.ChurchillHomesisalongstandingAberdeenshiredeveloperandthefacilityprovidedfundingtowardstheconstructionofaprivatedetachedhousingdevelopmentinoneofAberdeen’sfinestresidentialsuburbs.Theloanissecuredwithafirstchargeoverthesiteandisearninganattractiverateofinterest.WhilsttheAberdeenhousingmarkethasslowedduringtheperiod,primarilyasaresultinthereductioninthepriceofoil,theloanisbeingservicedandtheCompany’ssecurityremainsatanappropriatelevel.
A£1.3millionloan(aspartofa£2.6millionfacility)hadbeenextended(throughanaffiliate,LothianLendingLimited)toRPEFL1Limited,amemberoftheRenewablePowerExchangegroup,toprovidefundingtowardstheconstructionofa1.5MWwindfarminEastLothian,Scotland,withtheelectricityusedtosupplythoseonlowincomesinthelocalcommunity.TheloanissecuredonthesiteinEastLothianandisearninganattractiverateofinterest.Wearepleasedtoreportthattheturbinesareoperatingwell,generatingelectricityandEBITDAisinlinewithforecasts.Inaccordancewiththeplannedamortisationschedule,theloanbalancenowstandsat£1.09million.
Aloanof£575,000wasadvanced(throughanaffiliate,MeadowLendingLimited)toWindsarCare(UK)LLPtofundthedevelopmentandinitialtradingofa68-bedpurpose-builtcarehomeinEgham,Windsor.Theseloans,togetherwithloansfromothervehiclesmanagedandadvised
Investment Manager’s Report continued
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Puma VCT 10 plc Annual report and accounts 2017
bytheInvestmentManagertotalling£5.3million,aresecuredwithafirstchargeoverthesite.Constructionisbehindscheduleduetoissueswiththemaincontractorbutthisisbeingaddressedbythedeveloperandteam.
Intheprioryear,aloanof£1.2million(aspartofa£6.9millionfacilityfromothervehiclesmanagedandadvisedbytheInvestmentManager)wasmade(throughanaffiliate,LothianLendingLimited)toRichmondGlobalPropertiesLimitedtofundthedevelopmentofa112bedpurposebuiltcarehomeinHamilton,Scotland.Theseloansareagainsecuredwithafirstchargeoverthesite.Thisrecentlyreachedpracticalcompletionandthehomeisnowbeingfittedoutreadytoacceptitsfirstresidents.
AtthestartoftheperiodtheCompanyhada£523,000holdinginNextenergySolarFund,aninvestmentcompanyfocusingonoperationalsolarphotovoltaicassetslocatedintheUnitedKingdom.Duetoachangeinpower-generationmarketsresultingfromdecliningenergyprices,webegantoreducetheCompany’sexposureandfullyexitedthisinvestmentduringthe period.
Tofurthermanageliquidity,theCompanyholdsthroughanaffiliate,LatimerLendingLimited,£872,000inabondissuedbyJSainsburyplc.Duringtheperiod,theCompanysoldits£2.5millionholdinginasterlingfloatingratenoteissuedbyRoyalBankofCanadaandits£1millionholdinginasterlingfloatingratenoteissuedbyCommonwealthBankofAustraliatofreeupcashfortheCompanytomakequalifyinginvestments.
Investment StrategyWearepleasedtohaveinvestedasubstantialproportionoftheCompany’sfunds.WeremainfocusedongeneratingstrongreturnsfortheCompanyinboththequalifyingandnon-qualifyingportfolios,whilstbalancingthesereturnswithmaintaininganappropriateriskexposureandensuringthereissignificantliquidityintheportfoliotofreeupcashforqualifyinginvestmentsastheyarise.
Puma Investment Management Limited29June2017
Puma VCT 10 plc Annual report and accounts 2017
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Puma VCT 10 plc Annual report and accounts 2017
Investment Portfolio Summary As at 28 February 2017
Valuation £’000
Cost £’000
Gain/(loss) £’000
Valuation as a % of Net Assets
Qualifying Investments
UrbanMiningLimited 1,875 1,875 – 8%
OpesIndustriesLimited 2,940 3,450 (510) 13%
WarmHearthLimited 2,500 2,500 – 11%
MiniRainbowsLimited 2,500 2,500 – 11%
WelcomeHealthLimited 2,500 2,500 – 11%
SavilleServicesLimited 2,139 2,139 – 9%
GrowingFingersLimited 980 980 – 4%
Total Qualifying Investments 15,434 15,944 (510) 67%
Non-Qualifying Investments
ValenciaLendingLimited 984 984 – 4%
LothianLendingLimited 2,325 2,325 – 10%
LavenderLendingLimited 800 800 – 3%
VictoriaLendingLimited 1,000 1,000 – 4%
MeadowLendingLimited 575 575 – 2%
PiccadillyLendingLimited 400 400 – 2%
Total Non-Qualifying Investments 6,084 6,084 – 25%
Liquidity Management
JSainsburyPlcBond(viaLatimerLending)* 872 821 51 4%
Total Liquidity Management Investments 872 821 51 4%
Total Investments 22,390 22,849 (459) 95%
Balance of Portfolio 1,127 1,127 – 5%
Net Assets 23,517 23,976 (459) 100%
Oftheinvestmentsheldat28February2017,allareincorporatedinEnglandandWales.
*QuotedinvestmentlistedontheLSE.
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Puma VCT 10 plc Annual report and accounts 2017
Urban Mining Limited
Cost(£'000) 1,875Investmentcomprises:Ordinaryshares 1,313Debt 562Valuationmethod DiscountedcashflowValuation(£'000) 1,875IncomereceivedbytheCompanyfromthisholdingintheperiod(£’000) 202
SourceoffinancialdataAuditedabbreviatedaccountsfortheperiodended
31December2015Turnover(£’000) NotdisclosedProfitbeforetax(£’000) NotdisclosedNetassets(£’000) 9,011Proportionofequityheld 8%ProportionofequityheldbyVCTsmanagedbyPumaInvestmentManagementLimited 22%
UrbanMiningLimitedisamemberoftheChinookUrbanMininggroupofcompanies,anenergy-from-wastebusiness.TheequityheldbytheCompanyandmanagedbytheShoreCapitalGroupisCordinarysharesinUrbanMiningLimitedwhichcarrynovotingrights.
Opes Industries Limited
Cost(£'000) 3,450Investmentcomprises:Ordinaryshares 2,415Debt 1,035Valuationmethod NetassetsValuation(£'000) 2,940IncomereceivedbytheCompanyfromthisholdingintheperiod(£’000) 55
SourceoffinancialdataAuditedaccountsfortheyearended
31December2014Turnover(£’000) 504Lossbeforetax(£’000) (2,400)Netassets(£’000) 1,516Proportionofequityheld 25%ProportionofequityheldbyVCTsmanagedbyPumaInvestmentManagementLimited^ 59%
^InvestmentdecisionsaremadebytherespectiveVCTboardofdirectorsasPumaInvestmentManagementLimited’sdiscretionaryinvestmentmandatehasbeenremovedinrelationtothisinvestment
OpesIndustriesLimitedwasdevelopingamaterialsrecyclingfacilityatanestablishedlandfillinOxfordshire.FollowingamajorfireinFebruary2016,thecompanyenteredadministrationon9March2016.TheequityheldbytheCompanyandmanagedbytheShoreCapitalGroupisBordinarysharesinOpesIndustriesLimitedwhichcarrynovotingrights.
Significant Investments
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Puma VCT 10 plc Annual report and accounts 2017
Warm Hearth Limited
Cost(£'000) 2,500Investmentcomprises:Ordinaryshares 1,750Debt 750Valuationmethod PriceofrecentinvestmentValuation(£'000) 2,500IncomereceivedbytheCompanyfromthisholdingintheperiod(£’000) 24
Sourceoffinancialdata* Turnover(£’000) –Profitbeforetax(£’000) –Netliabilities(£’000) –Proportionofequityandvotingrightsheld 36%ProportionofequityheldbyVCTsmanagedbyPumaInvestmentManagementLimited^ 72%
*theCompanyisyettofileaccounts
^InvestmentdecisionsaremadebytherespectiveVCTboardofdirectorsasPumaInvestmentManagementLimited’sdiscretionaryinvestmentmandatehasbeenremovedinrelationtothisinvestment.
WarmHearthLimitedwasincorporatedinOctober2015.TheequityheldbytheCompanyandmanagedbytheShoreCapitalGroupisBordinaryshares.
Mini Rainbows Limited
Cost(£'000) 2,500Investmentcomprises:Ordinaryshares 1,750Debt 750Valuationmethod PriceofrecentinvestmentValuation(£'000) 2,500IncomereceivedbytheCompanyfromthisholdingintheperiod(£’000) 24
Sourceoffinancialdata*Turnover(£’000) –Profitbeforetax(£’000) –Netliabilities(£’000) –Proportionofequityandvotingrightsheld 25%ProportionofequityheldbyVCTsmanagedbyPumaInvestmentManagementLimited^ 50%
*theCompanyisyettofileaccounts
^InvestmentdecisionsaremadebytherespectiveVCTboardofdirectorsasPumaInvestmentManagementLimited’sdiscretionaryinvestmentmandatehasbeenremovedinrelationtothisinvestment
MiniRainbowsLimitedwasincorporatedinOctober2015.TheequityheldbytheCompanyandmanagedbytheShoreCapitalGroupisBordinaryshares.
Significant Investments continued
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Puma VCT 10 plc Annual report and accounts 2017
Welcome Health Limited
Cost(£'000) 2,500Investmentcomprises:Ordinaryshares 1,750Debt 750Valuationmethod PriceofrecentinvestmentValuation(£'000) 2,500IncomereceivedbytheCompanyfromthisholdingintheperiod(£’000) 24
Sourceoffinancialdata*Turnover(£’000) –Profitbeforetax(£’000) –Netliabilities(£’000) –Proportionofequityandvotingrightsheld 25%ProportionofequityheldbyVCTsmanagedbyPumaInvestmentManagementLimited^ 50%
*theCompanyisyettofileaccounts
^InvestmentdecisionsaremadebytherespectiveVCTboardofdirectorsasPumaInvestmentManagementLimited’sdiscretionaryinvestmentmandatehasbeenremovedinrelationtothisinvestment
WelcomeHealthLimitedwasincorporatedinOctober2015.TheequityheldbytheCompanyandmanagedbytheShoreCapitalGroupisBordinaryshares.
Saville Services Limited
Cost(£'000) 2,139Investmentcomprises:Ordinaryshares 1,497Debt 642Valuationmethod DiscountedcashflowValuation(£'000) 2,139IncomereceivedbytheCompanyfromthisholdingintheperiod(£’000) 23
SourceoffinancialdataAbbreviatedaccountsforyearended
28February2016Turnover(£’000) NotdisclosedProfitbeforetax(£’000) NotdisclosedNetassets(£’000) 6,579Proportionofequityandvotingrightsheld 16%ProportionofequityheldbyVCTsmanagedbyPumaInvestmentManagementLimited^ 86%
^InvestmentdecisionsaremadebytherespectiveVCTboardofdirectorsasPumaInvestmentManagementLimited’sdiscretionaryinvestmentmandatehasbeenremovedinrelationtothisinvestment
SavilleServicesLimitedprovidescontractingservicesinrelationtoconstructionofacarehomeinChester.
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Puma VCT 10 plc Annual report and accounts 2017
Growing Fingers Limited
Cost(£'000) 980Investmentcomprises:Ordinaryshares 980Debt –Valuationmethod PriceofrecentinvestmentValuation(£'000) 980IncomereceivedbytheCompanyfromthisholdingintheperiod(£’000) –
Sourceoffinancialdata*DormantAccountsfortheperiodended
31March2016Turnover(£’000) –Profitbeforetax(£’000) –Netliabilities(£’000) –Proportionofequityheld 50%ProportionofequityheldbyVCTsmanagedbyPumaInvestmentManagementLimited^ 100%
*theCompanyisyettofileaccounts
^InvestmentdecisionsaremadebytherespectiveVCTboardofdirectorsasPumaInvestmentManagementLimited’sdiscretionaryinvestmentmandatehasbeenremovedinrelationtothisinvestment
GrowingFingersLimitedwasincorporatedinMarch2015.TheCompanyisdevelopingapurposebuiltchildcaredaynurserywhichitthenintendstooperate.TheequityheldbythecompanyandmanagedbytheShoreCapitalGroupisBordinarysharesthathavenovoting rights.
Valencia Lending Limited
Cost(£'000) 984Investmentcomprises:Ordinaryshares –Debt 984Valuationmethod DiscountedcashflowValuation(£'000) 984IncomereceivedbytheCompanyfromthisholdingintheperiod(£’000) 168
SourceoffinancialdataAbbreviatedaccountsfortheyearended
31July2015Turnover(£’000) NotdisclosedProfitbeforetax(£’000) NotdisclosedNetassets(£’000) –Proportionofequityandvotingrightsheld –ProportionofequityheldbyVCTsmanagedbyPumaInvestmentManagementLimited 100%
ValenciaLendingLimitedwasincorporatedinJuly2013.ValenciaLendingLimitedhasprovidedaloantoChurchillHomes(Aberdeen)Limitedandhasparticipatedina£5mrevolvingcreditfacilityprovidedtoCitrusPXTwoLimited.
Significant Investments continued
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Puma VCT 10 plc Annual report and accounts 2017
Lothian Lending Limited
Cost(£'000) 2,325Investmentcomprises:Ordinaryshares –Debt 2,325Valuationmethod DiscountedcashflowValuation(£'000) 2,325IncomereceivedbytheCompanyfromthisholdingintheperiod(£’000) 248
SourceoffinancialdataAbbreviatedaccountsfortheyearended
30April2016Turnover(£’000) notdisclosedProfitbeforetax(£’000) notdisclosedNetassets(£’000) –Proportionofequityandvotingrightsheld 50%ProportionofequityheldbyVCTsmanagedbyPumaInvestmentManagementLimited 100%
LothianLendingLimitedwasincorporatedinApril2014.LothianLendingLimitedhasprovidedaloantoRPEFL1Limited,amemberoftheRenewablePowerExchangeGroupandRichmondGlobalPropertiesLimitedinconnectionwiththedevelopmentofacarehome.
Lavender Lending Limited
Cost(£'000) 800Investmentcomprises:Ordinaryshares –Debt 800Valuationmethod DiscountedcashflowValuation(£'000) 800IncomereceivedbytheCompanyfromthisholdingintheperiod(£’000) 64
Sourceoffinancialdata*Turnover(£’000) –Profitbeforetax(£’000) –Netassets(£’000) –Proportionofequityandvotingrightsheld 50%ProportionofequityheldbyVCTsmanagedbyPumaInvestmentManagementLimited 100%
*theCompanyisyettofileaccounts
LavenderLendingLimitedwasincorporatedinAugust2015.LavenderLendingLimitedhasprovidedaloantoAthenaAlphaLimited,inconnectionwiththedevelopmentofacarehome.
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Puma VCT 10 plc Annual report and accounts 2017
Victoria Lending Limited
Cost(£'000) 1,000Investmentcomprises:Ordinaryshares –Debt 1,000Valuationmethod DiscountedcashflowValuation(£'000) 1,000IncomereceivedbytheCompanyfromthisholdingintheperiod(£’000) 53
Sourceoffinancialdata*Turnover(£’000) –Profitbeforetax(£’000) –Netassets(£’000) –Proportionofequityandvotingrightsheld 50%ProportionofequityheldbyVCTsmanagedbyPumaInvestmentManagementLimited 100%
*theCompanyisyettofileaccounts
VictoriaLendingwasincorporatedinApril2016.VictoriaLendingLimitedhasparticipatedina£5mrevolvingcreditfacilitytoCitrusPXFiveLLP.
Meadow Lending Limited
Cost(£'000) 575Investmentcomprises:Ordinaryshares -Debt 575Valuationmethod DiscountedcashflowValuation(£'000) 575IncomereceivedbytheCompanyfromthisholdingintheperiod(£’000) 57
Sourceoffinancialdata*Turnover(£’000) –Profitbeforetax(£’000) –Netassets(£’000) –Proportionofequityandvotingrightsheld 50%ProportionofequityheldbyVCTsmanagedbyPumaInvestmentManagementLimited 100%
*theCompanyisyettofileaccounts
MeadowLendingLimitedwasincorporatedinSeptember2015.MeadowLendingLimitedhasprovidedaloantoWindsarCare(UK)LLP,inconnectionwiththedevelopmentofacarehome.
Significant Investments continued
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Puma VCT 10 plc Annual report and accounts 2017
Piccadilly Lending Limited
Cost(£'000) 400Investmentcomprises:Ordinaryshares –Debt 400Valuationmethod DiscountedcashflowValuation(£'000) 400IncomereceivedbytheCompanyfromthisholdingintheperiod(£’000) –
Sourceoffinancialdata*Turnover(£’000) –Profitbeforetax(£’000) –Netassets(£’000) –Proportionofequityandvotingrightsheld 50%ProportionofequityheldbyVCTsmanagedbyPumaInvestmentManagementLimited 100%
*theCompanyisyettofileaccounts
PiccadillyLendingLimitedwasincorporatedinApril2016.PiccadillyLendingLimitedwilllooktoprovideloans.
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Puma VCT 10 plc Annual report and accounts 2017
Directors’ Biographies
David Vaughan (Non-Executive Chairman)
DavidwasformerlyamanagingdirectorattheRoyalBankofScotland,wherehehadresponsibilityforbankingrelationshipstothemediasectorintheUKforitsglobalbankingmarketsdivision.Duringhiscareerheheldarangeofotherseniorappointmentsinthebankandhasabroadrangeofexperienceinthesupplyofcredittocompaniesofallsizes.HeholdsqualificationsfromtheSecuritiesInstituteincorporatefinanceandtheCharteredInstituteofBanking.Davidwasformerlyanon-executivedirectorofMusicSalesGroupLimited.
Stephen Hazell-Smith
StephenisaUKinstitutionalfundmanagerbybackground,includingbeingthefounderandmanagingdirectorofRutherfordAssetManagementLimitedwherehecreatedanumberofhighlysuccessfulsmallercompanyinvestmentvehicles,includingHeraldInvestmentTrustandBeaconInvestmentTrust.In1997hesoldRutherfordAssetManagementLimitedtoCloseBrothersGroupandjoinedCloseInvestmentLimitedasmanagingdirector,wherehewasresponsibleforlaunchingCloseBrothersAIMVCTplc.HeisadirectorofOctopusAIMVCTplc.
Graham Shore
GrahamwaspreviouslyamanagementconsultancypartnerinToucheRoss(nowDeloitte)andwasresponsiblefortheLondonpracticeadvisingthetelecommunicationsandnewmediaindustries.AtToucheRossheundertookstrategicandeconomicassignmentsforawiderangeofclientsincludingappraisalsofventurecapitalopportunities.In1990hejoinedtheShoreCapitalGroupasmanagingdirector,andhasbeeninvolvedinmanagingthePumaVCTsandotherventurecapitalfundsmanagedbytheShoreCapitalGroup,includingevaluatingnewdealsforthefundsandrepresentingthefundswithinvesteecompanies.GrahamhasbeeninvolvedwithAIMsinceitsinceptionasbothacorporatefinancierandinvestorandwithprivateequityformorethan20years.HeisadirectoroftheotherPumaVCTsandStPeterPortCapital Limited.
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Puma VCT 10 plc Annual report and accounts 2017
Strategic Report
TheDirectorspresenttheirStrategicReportoftheCompanyforthe14monthperiodended28February2017.
Principal Activities and StatusTheCompanywasincorporatedon2October2013.TheprincipalactivityoftheCompanyisthemakingofinvestmentsinqualifyingandnon-qualifyingholdingsofsharesorsecurities.TheCompanyisaninvestmentcompanywithinthemeaningofSection833oftheCompaniesAct2006.TheCompanywasgrantedprovisionalapprovalbytheInlandRevenueunderSection274oftheIncomeTaxAct2007asaVentureCapitalTrust.TheDirectorshavemanaged,andcontinuetomanage,theCompany’saffairsinsuchamannerastocomplywithSection274oftheIncomeTaxAct2007.
TheCompany’sordinarysharesof0.05peachhavebeenlistedontheOfficialListoftheUKListingAuthoritysince13 June 2014.
Business model and strategyTheCompanyoperatesasaVCTtoenableitsshareholderstobenefitfromtaxreliefsavailable.TheDirectorsaimtomaximisetaxfreedistributionstoshareholdersbywayofdividendspaidoutofincomereceivedfrominvestmentsandcapitalgainsreceivedfollowingsuccessfulrealisations.TheCompany’sstrategyissetoutintheInvestmentPolicysetout below.
Investment PolicyPumaVCT10plcseekstoachieveitsoverallinvestmentobjective(ofproactivelymanagingtheassetsofthefundwithanemphasisonrealisinggainsinthemediumterm)tomaximisedistributionsfromcapitalgainsandincomegeneratedfromtheCompany’sassets.ItintendstodosowhilstmaintainingitsqualifyingstatusasaVCT,bypursuingthefollowingInvestment Policy:
TheCompanymayinvestinamixofqualifyingandnon-qualifyingassets.ThequalifyinginvestmentsmaybequotedonAIMorasimilarmarketorbeunquotedcompanies.TheCompanymayinvestinadiversifiedportfolioofgrowthorientedqualifyingcompanieswhichseekto
raisenewcapitalonflotationorbywayofasecondaryissue.TheCompanyhastheabilitytostructuredealstoinvestinprivatecompanieswithanasset-backedfocustoreducepotentialcapitalloss.TheCompanymusthavehadinexcessof70%ofitsassetsinvestedinqualifyinginvestmentsasdefinedforVCTpurposesby28February2017.
Theportfolioofnon-qualifyinginvestmentswillbemanagedwiththeintentionofgeneratingapositivereturn.SubjecttotheBoardandInvestmentManager’sviewfromtimetotimeofdesirableassetallocation,itwillcomprisequotedandunquotedinvestments(directorindirect)incashorcashequivalents,securedloans,bonds,equities,vehiclesinvestinginpropertyandfundsoffundsoroncashdeposit.
AfulltextoftheCompany’sinvestmentpolicycanbefoundwithintheCompany’s prospectusatwww.pumainvestments.co.uk.
Principal risks and uncertaintiesTheprincipalrisksfacingthecompanyrelatetoitsinvestmentactivitiesandincludemarketpricerisk,interestraterisk,creditriskandliquidityrisk.Anexplanationoftheserisksandhowtheyaremanagediscontainedinnote14tothefinancialstatements.Additionalrisksfacedbythecompanyareasfollows:
InvestmentRisk–InappropriatestockselectionleadingtounderperformanceinabsoluteandrelativetermsisariskwhichtheInvestmentManagerandtheBoardmitigatebyreviewingperformancethroughouttheperiodandformallyatBoardmeetings.ThereisalsoaregularreviewbytheBoardoftheinvestmentmandateandlongterminvestmentstrategyandmonitoringofwhethertheCompanyshouldchangeitsinvestment strategy.
RegulatoryRisk –theCompanyoperatesinacomplexregulatoryenvironmentandfacesanumberofrelatedrisks.Abreachofs274oftheIncomeTaxAct2007couldresultintheCompanybeingsubjecttocapitalgainsonthesaleofinvestments.AbreachoftheVCTRegulationscouldresultinthelossofVCTstatusandconsequentlossoftaxreliefcurrentlyavailabletoshareholders.Seriousbreachofotherregulations,suchastheUKLAListingRulesandtheCompaniesAct2006couldleadtosuspensionfromtheStockExchange.TheBoardreceivesquarterlyreportsinordertomonitorcompliancewithregulations.
TheprincipaluncertaintiesthatmayaffectthecompanyrelatetomaterialchangesintheUKeconomyormaterialchangestotheVCTregulations.TheBoardcontinuetomonitorthesemattersandwilltakeappropriateactionifrequired.
AnexampleofthesecurityprovidedtoValenciaLendingLimitedthroughitsCitrusPXexposure
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Puma VCT 10 plc Annual report and accounts 2017
Risk managementTheCompany’sinvestmentpolicyallowsforalargeproportionoftheCompany’sassetstobeheldinunquotedinvestments.Theseinvestmentsarenotpubliclytradedandtheremaynotbealiquidmarketforthem,andthereforetheseinvestmentsmaybedifficultto realise.
TheCompanymanagesitsinvestmentriskwithintherestrictionsofmaintainingitsqualifyingVCTstatusbyusingthefollowingmethods:
• theactivemonitoringofitsinvestmentsbytheInvestmentManagerandtheBoard;
• seekingBoardrepresentationassociatedwitheachinvestment,if possible;
• seekingtoholdlargerinvestmentstakesbyco-investingwithothercompaniesmanagedbytheInvestmentManager,soastogainmoreinfluenceovertheinvestment;
• ensuringaspreadofinvestmentsis achieved.
Business Review and Future DevelopmentsTheCompany’sbusinessreviewandfuturedevelopmentsaresetoutintheChairman’sStatement,theInvestmentManager’sReportandInvestmentPortfolioSummaryonpages2to6.
Key performance indicatorsAteachboardmeeting,theDirectorsconsideranumberofperformancemeasurestoassesstheCompany’ssuccessinmeetingitsobjectives.TheBoardbelievestheCompany’skeyperformanceindicatorsaremovementinNetAssetValueperordinaryshare,TotalReturnperordinaryshareanddividendsperordinaryshare.TheBoardconsidersthattheCompanyhasnonon-financialkeyperformanceindicators.Inaddition,theBoardconsiderstheCompany’scompliancewiththeVentureCapitalTrustRegulationstoensurethatitwillmaintainitsVCTstatus.AnanalysisoftheCompany’skeyperformanceindicators
andtheperformanceoftheCompany’sportfolioandspecificinvestmentsisincludedintheChairman’sStatement,theInvestmentManager’sReportandtheInvestmentPortfolioSummaryonpages2to6.
Viability statementTheDirectorshaveconductedarobustassessmentoftheprincipalrisksfacingtheCompanyincludingthosethatwouldthreatenitsbusinessmodel,futureperformance,solvencyorliquidity.ThisissummarisedaboveandintheReportoftheDirectors.TheDirectorshaveassessedtheprospectsoftheCompanyfortheperiodtotheendof2019,whichasenvisagedintheprospectus,isthedatethattheDirectorswillseekshareholderapprovaltocommencetheliquidationofthefund.Thisisaperiodforwhichdevelopmentsareconsideredtobereasonablyforeseeable.ThisreviewincludedconsiderationofcompliancewithVCTregulations,theCompany’scurrentfinancialpositionandexpectedcashflowsfortheperiodandthecurrenteconomicoutlook.
Basedonthisreview,theDirectorshaveconcludedthatthereisareasonableexpectationthattheCompanywillbeabletocontinueinoperationandmeetitsliabilitiesastheyfalldueovertheperiodtotheendof2019.
VCT status monitoringTheCompanyhasretainedPricewaterhouseCoopersLLPtoadviseitoncompliancewithVCTrequirements,includingevaluationofinvestmentopportunities,asappropriate,andregularreviewoftheportfolio.AlthoughPricewaterhouseCoopersLLPworkcloselywiththeInvestmentManager,theyreportdirectlytotheBoard.
CompliancewiththeVCTregulations(asdescribedintheInvestmentPolicy)fortheperiodunderreviewissummarisedasfollows:
Positionat28February2017
1. TheCompanyholdsatleast70%ofitsinvestmentsinqualifying companies; Complied
2. Atleast70%oftheCompany’squalifyinginvestmentsareheldin“eligibleshares”; Complied
3. Noinvestmentconstitutesmorethan15%oftheCompany’sportfolioattimeofinvestment; Complied
4. TheCompany’sincomeforeachfinancialperiodisderivedwhollyormainlyfromsharesandsecurities; Complied
5. TheCompanydistributessufficientrevenuedividendstoensurethatnotmorethan15%oftheincomefromsharesandsecuritiesinanyoneyearisretained;and Complied
6. Amaximumunitsizeof£5millionineachVCTqualifyinginvestment(pertaxyear). Complied
Directors and employeesTheCompanyhasnotdisclosedanyinformationabout,orpoliciesinrelationto,employeesasithasnoemployees(otherthantheDirectors).Allofthedirectorsaremale.
Environmental and social policyAsaVCTtheCompanyisapureinvestmentcompanyandthereforehasnotradingactivities.Duetothis,theCompanydoesnothaveapolicyonenvironmentalmattersorsocial,communityandhumanrightsissues.
Approvedbytheboardandsignedonitsbehalfby
David Vaughan Chairman 29June2017
Strategic Report continued
17
Puma VCT 10 plc Annual report and accounts 2017
Report of the Directors
TheDirectorspresenttheirannualreportandtheauditedfinancialstatementsoftheCompanyforthe14monthperiodended28February2017.TheCompany’sRegisteredNumberis08714913.
Results and dividendsTheresultsforthefinancialperiodaresetoutonpage26.TheDirectorsdonotproposeafinaldividend(2015:nil).Twointerimdividendsof6pperordinarysharewerepaidduringtheperiodended28February2017totalling£3,316,000(2015:nil).
Post balance sheet eventsDetailsofmaterialeventssince28February2017aredisclosedintheInvestmentManager’sReportonpages3to6.
Capital StructureTheissuedsharecapitaloftheCompanyisdetailedinnote12oftheseaccounts.DetailsofsharevotingrightsandauthoritytorepurchaseordinarysharesaredisclosedintheCorporateGovernanceStatementonpage22.
DirectorsTheDirectorsoftheCompanyduringtheperiodandtheirbeneficialinterestsintheissuedordinarysharesoftheCompanyat28February2017wereasfollows:
0.05pordinaryshares28 February
201731 December
2015
DavidVaughan(Chairman) 20,200 20,200StephenHazellSmith 20,200 20,200GrahamShore 50,500 50,500
NooptionsoverthesharecapitaloftheCompanyhavebeengrantedtotheDirectors.TherehavebeennochangesintheholdingsoftheDirectorssincetheperiodend.
Investment management, administration and performance feesTheCompanyhasdelegatedtheinvestmentmanagementoftheportfoliotoPumaInvestmentManagementLimited(PumaInvestments).TheprincipaltermsoftheCompany’smanagementagreementwithPumaInvestments,aresetoutinnote3ofthefinancialstatements.TheannualrunningcostsoftheCompanyaresubjecttoacapof3.5%oftheCompany’stotal fundraise.
TheCompanyhasdelegatedcompanysecretarialandotheraccountingandadministrativesupporttoPIAdministrationServicesLimitedforanaggregateannualfeeof0.35%oftheNetAssetValueoftheFundateachquarterend,payablequarterlyin arrears.
PumaInvestmentsandmembersoftheinvestmentmanagementteamwillbeentitledtoaperformancerelatedincentiveof20%oftheaggregateamountsrealisedbytheCompanyinexcessof£1perOrdinaryShare,andShareholderswillbeentitledtothebalance.ThisincentivewillonlybeeffectiveoncetheholdersofOrdinaryShareshavereceiveddistributions
of£1pershare(whethercapitalorincome).TheperformanceincentivestructureprovidesastrongincentivefortheInvestmentManagertoensurethattheCompanyperformswell,enablingtheBoardtoapprovedistributionsashighandassoonaspossible.
Theperformanceincentivehasbeensatisfiedthroughtheissueof6,908,306OrdinaryShares(assetoutinNote11ofthefinancialstatements)totheInvestmentManagerandmembersoftheinvestmentmanagementteambeing20%ofthetotalissuedOrdinarySharecapitalof34,541,530.Underthetermsoftheincentivearrangement,allrightstodividendswillbewaiveduntilthe£1perOrdinaryShareperformancetargethasbeenmet.
ItistheDirectors’opinionthatthecontinuedappointmentoftheInvestmentManager,PumaInvestments,onthetermsagreedisinthebestinterestoftheshareholdersasawhole.TheInvestmentManagerispartoftheShoreCapitalGroupwhichhasaproventrackrecordinVCTmanagementandcurrentlymanagesover£121millionofVCTfundsandhasastrongnetworkwithintheindustry.
Corporate governance statementTheCompany’scorporategovernancestatementissetonpages21to23.
Global greenhouse gas emissionsTheCompanyhasnodirectgreenhousegasemissionstoreportfromitsoperations,nordoesithaveresponsibilityforanyotheremissionsproducingsourcesundertheCompaniesAct2006(StrategicReportandDirectors’Report)Regulations2013.
Going concernAftermakingenquiriestheDirectorsbelievethatitisappropriatetocontinuetoapplythegoingconcernbasisinpreparingthefinancialstatements.ThisisappropriateastheCompanyhasaccesstocashreservesgreaterthantheanticipatedannualrunningcostsoftheCompany.ItisconsideredthatthequotedbondscanberealisedwithsufficienteasetoprovideanyadditionalcashwhichmayberequiredtoenabletheCompanytomeetitsliabilitiesastheyfalldueforpayment.TheDirectorshaveconsideredaperiodof12monthsfromthedateofthisreportforthepurposesofdeterminingtheCompany’sgoingconcernstatuswhichhasbeenassessedinaccordancewiththeguidanceissuedbytheFinancialReportingCouncil.
Financial InstrumentsThematerialrisksarisingfromtheCompany’sfinancialinstrumentsaremarketpricerisk,creditrisk,liquidityriskandinterestraterisk.TheBoardreviewsandagreespoliciesformanagingeachoftheserisksandthesearesummarisedinnote14.Thesepolicieshaveremainedunchangedsincethebeginningofthefinancialperiod.AsaVentureCapitalTrust,itistheCompany’sspecificbusinesstoevaluateandcontroltheinvestmentriskinitsportfolio.
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Puma VCT 10 plc Annual report and accounts 2017
Substantial ShareholdingsAsat28February2017andasatthedateofthisreport,theCompanyhadbeennotifiedofthefollowingdirectinterestsrepresenting3%ormoreoftheissuedsharecapitalofthe Company.
Number of sharesPercentage of voting rights
ShoreCapitalGroupInvestmentsLimited 3,454,153 10%DavidKaye 1,381,061 4%EliotKaye 1,035,555 3%
Alloftheaboveshareholdingsareheldunderthemanagementperformanceincentiveagreementexplainedinnote11tothefinancialstatements.
Third Party Indemnity Provision for DirectorsQualifyingthirdpartyindemnityprovisionwasinplaceforthebenefitofallDirectorsofthe Company.
Annual General MeetingTheAnnualGeneralMeetingoftheCompanywillbeheldatBondStreetHouse,14CliffordStreet,London,W1S4JUon22August2017at10.30am.NoticeoftheAnnualGeneralMeetingandFormofProxyareinsertedwithinthisdocument.
AuditorTheDirectorsresolvedthatRSMUKAuditLLPbereappointedasauditorinaccordancewiththeprovisionsoftheCompaniesAct2006,s489.RSMUKAuditLLPhasindicateditswillingnesstocontinueinoffice.
Statement as to Disclosure of Information to the AuditorTheDirectorsinofficeatthedateofthisreporthaveconfirmedthat,asfarastheyareeachaware,thereisnorelevantauditinformationofwhichtheauditorisunaware.EachoftheDirectorshaveconfirmedthattheyhavetakenallthestepsthattheyoughttohavetakenasDirectorsinordertomakethemselvesawareofanyrelevantauditinformationandtoestablishthatithasbeencommunicatedtotheauditor.
Statement of Directors’ ResponsibilitiesTheDirectorsareresponsibleforpreparingtheStrategicReport,theReportoftheDirectors,theDirectors’RemunerationReportandthefinancialstatementsinaccordancewithapplicablelawand regulations.
CompanylawrequirestheDirectorstopreparefinancialstatementsforeachfinancialperiod.UnderthatlawtheDirectorshaveelectedtopreparethefinancialstatementsinaccordancewithUnitedKingdomGenerallyAcceptedAccountingPractice(UnitedKingdomAccountingStandardsandapplicablelaw).UndercompanylawtheDirectorsmustnotapprovethefinancialstatementsunlesstheyaresatisfiedthattheygiveatrueandfairviewofthestateofaffairsoftheCompanyandoftheprofitorlossoftheCompanyforthatperiod.Inpreparingthosefinancialstatements,thedirectorsarerequiredto:
a. selectsuitableaccountingpoliciesandthenapplythem consistently;
b. makejudgementsandaccountingestimatesthatarereasonableandprudent;
c. statewhetherapplicableUKAccountingStandardshavebeenfollowed,subjecttoanymaterialdeparturesdisclosedandexplainedinthefinancialstatements;
d. preparethefinancialstatementsonthegoingconcernbasisunlessitisinappropriatetopresumethatthecompanywillcontinueinbusiness.
Report of the Directors continued
19
Puma VCT 10 plc Annual report and accounts 2017
TheDirectorsareresponsibleforkeepingadequateaccountingrecordsthataresufficienttoshowandexplaintheCompany’stransactionsanddisclosewithreasonableaccuracyatanytimethefinancialpositionoftheCompanyandenablethemtoensurethatthefinancialstatementsandtheDirectors’RemunerationReportcomplywiththeCompaniesAct2006.TheyarealsoresponsibleforsafeguardingtheassetsoftheCompanyandhencefortakingreasonablestepsforthepreventionanddetectionoffraudandotherirregularities.
Directors’ statement pursuant to the Disclosure and Transparency RulesEachoftheDirectors,whosenamesandfunctionsarelistedintheDirectors’Biographiesonpage14,confirmsthat,tothebestofeachperson’sknowledge:
a. thefinancialstatements,preparedinaccordancewithUnitedKingdomGenerallyAcceptedAccountingPractice,giveatrueandfairviewoftheassets,liabilities,financialpositionandprofitoftheCompany;and
b. theChairman’sStatement,InvestmentManager’sReport,theStrategicReportandReportoftheDirectorsincludeafairreviewofthedevelopmentandperformanceofthebusinessandthepositionoftheCompanytogetherwithadescriptionoftheprincipalrisksanduncertaintiesthatitfaces.
Directors’ Statement regarding annual report and accountsTheDirectorsconsiderthatthereportandaccounts,takenasawhole,isfair,balancedandunderstandableandprovidestheinformationnecessaryforshareholderstoassesstheCompany’spositionandperformance,businessmodelandstrategy.
Electronic publicationThefinancialstatementsarepublishedonwww.pumainvestments.co.uk,awebsitemaintainedbytheinvestmentmanager.LegislationintheUnitedKingdomregulatingthepreparationanddisseminationofthefinancialstatementsmaydifferfromlegislationinotherjurisdictions.
OnbehalfoftheBoard
David Vaughan Chairman29June2017
20
Puma VCT 10 plc Annual report and accounts 2017
Directors’ Remuneration Report
ThisreportispreparedinaccordancewithSchedule420-422oftheCompaniesAct2006.AresolutiontoapprovethisreportwillbeputtothemembersattheAnnualGeneralMeetingtobeheldon22August2017.
Directors’ Remuneration PolicyTheBoardasawholeconsidersDirectors’remunerationand,assuch,aRemunerationCommitteehasnotbeenestablished.TheBoard’spolicyisthattheremunerationofnon-executiveDirectorsshouldreflecttimespentandtheresponsibilitiesbornebytheDirectorsontheCompany’saffairsandshouldbesufficienttoenablecandidatesofhighcalibretoberecruited.Directors’feespayableduringtheperiodtotalled£56,000assetoutinnote4.
On16October2013,thenon-executiveDirectorswereappointedforaperiodoftwelvemonthsafterwhicheitherpartymustgivethreecalendarmonths’noticetoendthecontract.
Directors’ RemunerationTheDirectorsareallnon-executiveandreceivedemolumentsasdetailedbelow:
Unaudited CurrentAnnual Fee12 months
£
Audited14 month period
ended28 February 2017
£
Auditedyear ended
31 December 2015 £
DavidVaughan(Chairman) 18,000 21,000 18,000StephenHazellSmith 15,000 17,500 15,000GrahamShore 15,000 17,500 15,000
48,000 56,000 48,000
Thesearethetotalemoluments.Therearenopensioncontributionsorshareoptions.ThereisnorequirementforthedirectorstoholdsharesintheCompany.Directors’shareinterestsaredisclosedintheReportoftheDirectorsonpage17(audited).
BriefbiographicalnotesontheDirectorsaregivenonpage14.
2018 RemunerationTheremunerationlevelsfortheforthcomingyearareexpectedtobeattheannuallevelsshowninthetableabove.TheDirectorsshallbepaidbytheCompanyalltravelling,hotelandotherexpensestheymayincurinattendingmeetingsoftheDirectorsorgeneralmeetingsorotherwiseinconnectionwiththedischargeoftheirduties.Theremunerationtobepaidisaspertheprospectus.
Directors’andOfficers’liabilityinsurancecoverisheldbytheCompanyinrespectoftheDirectors.
Statement of voting at Annual General MeetingResolutionstoapprovetheDirectors’RemunerationPolicyandtheDirectors’RemunerationReportwereapprovedbyshareholdersattheAGMon29June2016.Votescastaresummarisedasfollows:
Directors’ Remuneration
Policy
Directors’ Remuneration
Report
For 96.7% 96.7%Against 3.3% 3.3%Voteswithheld 24,240votes 24,240votes
Performance GraphThefollowingchartrepresentstheCompany’sperformancefrominceptionto28February2017andcomparestherebasedNetAssetValuetoarebasedFTSEAIMAll-ShareIndex.ThisindexisconsideredtobethemostappropriateequitymarketagainstwhichinvestorscanmeasuretherelativeperformanceoftheCompany.Thishasbeenrebasedto100at31March2014,thelistingdatefortheCompany.
OnbehalfoftheBoard
David Vaughan Chairman 29June2017
21
Puma VCT 10 plc Annual report and accounts 2017
Corporate Governance Statement
TheDirectorssupporttherelevantprinciplesoftheUKCorporateGovernanceCodeissuedinSeptember2014andpublishedontheFinancialReportingCouncil’sWebsite(www.frc.org.uk),beingtheprinciplesofgoodgovernanceandthecodeofbestpractice.DuetotheVCTbeingalimitedlifevehiclesomeareasoftheCodehavenotbeencompliedwith,thesearesetoutintheComplianceStatementbelow.
The BoardTheCompanyhasaBoardcomprisingthreenon-executiveDirectors.AllDirectorsareindependentasdefinedbytheUKCorporateGovernanceCodeexceptforGrahamShoreasaresultofhisholdingaDirectorshipoftheparentoftheInvestmentManager.TheBoardconsidersthatallDirectorshavesufficientexperiencetobeabletoexerciseproperjudgementwithinthemeaningoftheUKCorporateGovernanceCode.TheBoardhasappointedDavidVaughanastheseniorindependentDirectorandheisalsotheChairman.BiographicaldetailsofallBoardmembersareshownonpage14.
StephenHazellSmithisduetoretireattheforthcomingAnnualGeneralMeetingand,beingeligible,willofferhimselfforre-election.TheBoardbelievethatStephenHazellSmithhasmadevaluablecontributionsduringtheperiodandremainscommittedtotherole.TheBoardthereforerecommendsthatshareholdersre-electStephenHazellSmith,asadirector,attheforthcoming AGM.
FullBoardmeetingstakeplacequarterlyandadditionalmeetingsareheldasrequiredtoaddressspecificissues.TheBoardhasaformalscheduleofmattersspecificallyreservedforitsdecision.Theseinclude:
• consideringrecommendationsfromtheInvestmentManager;
• makingalldecisionsconcerningtheacquisitionordisposalofqualifyinginvestments;and
• reviewing,annually,thetermsofengagementofallthirdpartyadvisers(includinginvestmentmanagersandadministrators).
TheattendanceofindividualDirectorsatfullBoardmeetingsduringtheperiodwasasfollows:
ScheduledBoard
meetings
DavidVaughan 7/7StephenHazellSmith 7/7GrahamShore 7/7
TheBoardhasalsoestablishedprocedureswherebyDirectorswishingtodosointhefurtheranceoftheirdutiesmaytakeindependentprofessionaladviceattheCompany’sexpense.
AllDirectorshaveaccesstotheadviceandservicesoftheCompanySecretary.TheCompanySecretaryprovidestheBoardwithfullinformationontheCompany’sassetsandliabilitiesandotherrelevantinformationrequestedbytheChairman,inadvanceofeachBoardmeeting.
TheBoardhasnotestablishedanominationscommitteeorremunerationcommitteeastheyconsidertheBoardtobesmallandcompriseswhollyofnon-executiveDirectors.AppointmentsofnewDirectorsandDirectors’remunerationaredealtwithbythefullBoard.Theremunerationfor2018fortheBoardwillbeaspertheprospectus.
TheBoardreviewedDirectors’remunerationduringtheperiod.DetailsofthespecificlevelsofremunerationtoeachDirectoraresetoutintheDirectors’RemunerationReportonpage20,andthisissubjecttoshareholderapproval.
TherehavebeennochangestothecompositionoftheBoardsincethedateofissueoftheprospectusandtherearenoplannedchanges.Asaresult,theCompanyhasnotestablishedadiversitypolicyfornewappointmentsinrelationtothecompositionofthe Board.
Audit CommitteeTheAuditCommitteecomprisesthetwoindependentnon-executivedirectors.ItischairedbyDavidVaughanandmeetsannuallywiththeexternalAuditorpriortoapprovaloftheCompany’sfinancialstatements.ThereweretwoAuditCommitteemeetingsduringtheperiodwhichwereattendedbybothindependentnon-executivedirectors.TheAuditCommitteemonitorstheexternalAuditor’sindependence,theeffectivenessoftheauditprocessandotherrelevantmatters.TheAuditCommitteereceiveswrittenconfirmationeachyearoftheAuditor’sindependence.
TheAuditCommitteeconsideredtheneedforaninternalauditfunctionandconcludedthatthisfunctionwouldnotbeanappropriatecontrolforaVentureCapitalTrust.
TheAuditCommitteeconsidersthatthesignificantissuesinrelationtothesefinancialstatementsrelatetothecarryingvalueanddisclosureoftheunquotedinvestments.TheAuditCommitteechallengefindingsandcommentsreceivedfromtheInvestmentManageronthefinancialperformanceofthe investments.
TheAuditCommitteereviewsandagreestheauditstrategypaper,presentedbytheAuditorinadvanceoftheaudit,whichsetsoutthesignificantriskareastobecoveredduringtheaudit.TheAuditCommitteemeetspriortotheapprovalofthefinancialstatementstoconsidertheAuditor’sfindingsandchallengestheworkperformed,especiallyinrelationtounquotedinvestments.
RSMUKAuditLLPwereappointedbytheBoardpriortotheissueoftheProspectus.ThisistheCompany’sthirdAnnualReport
22
Puma VCT 10 plc Annual report and accounts 2017
andAccountsandtheyhaveallbeenreportedonbyRSMUKAuditLLP.TheAuditCommittee,aftertakingintoconsiderationcommentsfromtheInvestmentManagerandAdministratorregardingtheeffectivenessoftheauditprocess,recommendtotheBoardthatRSMUKAuditLLPcontinuesinoffice.
Relations with shareholdersShareholdershavetheopportunitytomeetrepresentativesoftheInvestmentManagementteamandtheBoardattheAGM.TheBoardisalsohappytorespondtoanywrittenqueriesmadebyshareholders,ortomeetwithshareholdersifsorequested.InadditiontotheformalbusinessoftheAGM,representativesoftheInvestmentManagementteamandtheBoardareavailabletoansweranyquestionsashareholdermayhave.
SeparateresolutionsareproposedattheAGMoneachsubstantiallyseparateissue.TheRegistrarscollateproxyvotesandtheresults(togetherwiththeproxyforms)areforwardedtotheCompanySecretaryimmediatelypriortotheAGM.InordertocomplywiththeUKCorporateGovernanceCode,proxyvotesareannouncedattheAGM,followingeachvoteonashowofhands,exceptintheeventofapollbeingcalled.ThenoticeofthenextAGMandproxyformareattheendofthisdocument.
Financial ReportingTheDirectors’statementofresponsibilitiesforpreparingtheaccountsissetoutintheReportoftheDirectorsonpages18and19,andastatementbytheAuditorabouttheirreportingresponsibilitiesissetoutintheAuditor’sReportonpages24to25.
Internal controlTheCompanyhasadoptedanInternalControlManual(“Manual”),whichhasbeencompiledinordertocomplywiththeUKCorporateGovernanceCode.TheManualisdesignedtoprovidereasonable,butnotabsolute,assuranceagainstmaterialmisstatementorloss,whichitachievesbydetailingtheperceivedrisksandcontrolstomitigatethem.TheBoardisresponsibleforensuringthattheprocedurestobefollowedbytheadvisersandthemselvesareinplace,andreviewtheeffectivenessoftheManualonanannualbasistoensurethatthecontrolsremainrelevantandwereinoperationthroughouttheperiod.TheBoardwillimplementadditionalcontrolswhennewrisksareperceivedandupdatetheManualasappropriate.
AlthoughtheBoardisultimatelyresponsibleforsafeguardingtheassetsoftheCompany,theBoardhasdelegated,throughwrittenagreements,theday-to-dayoperationoftheCompanytothefollowingadvisers:
Administration PIAdministrationServicesLimited
Investment Management PumaInvestmentManagement Limited
PumaInvestmentManagementLimitedidentifiesinvestmentopportunitiesandmonitorstheportfolioofinvestmentsandmakesrecommendationstotheBoardintermsofsuggesteddisposalsandfurtheracquisitions.
PIAdministrationServicesLimitedisengagedtocarryouttheaccountingfunctionandmanagestheretentionofphysicalcustodyofthedocumentsoftitlerelatingtounquotedinvestments.QuotedinvestmentsareheldinCREST.PIAdministrationServicesLimitedregularlyreconcilestheclientassetregisterwiththephysicaldocuments.
TheDirectorsconfirmthattheyhaveestablishedacontinuingprocessthroughouttheperiodanduptothedateofthisreportforidentifying,evaluatingandmanagingthesignificantpotentialrisksfacedbytheCompany,andhavereviewedtheeffectivenessoftheinternalcontrolsystems.Aspartofthisprocess,anannualreviewoftheinternalcontrolsystemsiscarriedoutinaccordancewiththeFinancialReportingCouncilguidelinesforinternalcontrol.TherewerenoproblemsidentifiedfromtheDirectors’annualreviewoftheinternalcontrolsystems.
Internalcontrolsystemsinclude:productionandreviewofmonthlymanagementaccounts.AlloutflowsmadefromtheVCT’sbankaccountsrequiretheauthorityoftwosignatoriesfromPumaInvestments,theInvestmentManager.TheInvestmentManagerissubjecttoregularreviewbytheShoreCapitalComplianceDepartment.
Share capital, rights attaching to the shares and restrictions on voting and transferOrdinarysharesarefreelytransferableinbothcertificatedanduncertificatedformandcanbetransferredbymeansoftheCRESTsystem.Therearenorestrictionsonthetransferofanyfullypaidupshare.WithrespecttovotingrightsthesharesrankparipassuastorightstoattendandvoteatanygeneralmeetingoftheCompany.TheCompany’sshareholdersdonothavedifferingvotingrights.FurtherdetailsoftheCompany’srulesaresetoutintheCompany’sprospectusatwww.pumainvestments.co.uk.
Repurchase of Ordinary Shares AlthoughtheOrdinarySharesaretradedontheLondonStockExchange,thereislikelytobeanilliquidmarketandinsuchcircumstancesShareholdersmayfinditdifficulttoselltheirOrdinarySharesinthemarket.InordertotrytoimprovetheliquidityintheOrdinaryShares,theBoardmayestablishabuybackpolicywherebytheCompanywillpurchaseOrdinarySharesfor cancellation.
TheBoardhasauthoritytomakemarketpurchasesoftheCompany’sownsharesforupto15%oftheCompany’sissuedsharecapitalfromthelastAnnualGeneralMeetingheldon29June2016.AresolutionwillbeputtothenextAnnualGeneralMeetingtorenewthisauthority.
GearingTheBoardhastheauthoritytoborrowupto50%oftheamountreceivedfromtheissuedsharecapitalbuttherearecurrentlynoplanstotakeadvantageofthisauthority.
Corporate Governance Statement continued
23
Puma VCT 10 plc Annual report and accounts 2017
Compliance statementTheListingRulesrequiretheBoardtoreportoncompliancewiththeUKCorporateGovernanceCodeprovisionsthroughouttheaccountingperiod.Withtheexceptionoftheitemsoutlinedbelow,theCompanyhascompliedthroughouttheaccountingperiodended28February2017withtheprovisionssetoutintheUKCorporateGovernanceCode.DuetothespecialnatureoftheCompanybeingaVCT,thefollowingprovisionsoftheUKCorporateGovernanceCodehavenotbeencompliedwith:
a) ProvisionA4-2andB6-3–DuetothesizeoftheBoard,theyfeelitunnecessarytoformaliseprocedurestoappraisetheChairman’sperformance,astheBoarddeemitappropriatetoaddressmattersastheyarise.
b) ProvisionB4-1,B4-2andE1-1–NewDirectorsdonotreceiveafull,formalandtailoredinductiononjoiningtheBoardandtheChairmandoesnotreviewandagreewitheachDirectortheirtraininganddevelopmentneedsbecausemattersareaddressedonanindividualbasisastheyarise.AlsotheCompanyhasnomajorshareholderssoshareholdersarenotgiventheopportunitytomeetanynewnon-executiveDirectorsataspecificmeetingotherthantheannualgeneral meeting.
c) ProvisionB6-1andB7-2–DuetothesizeoftheBoard,aformalperformanceevaluationoftheBoard,itscommitteesandtheindividualDirectorshasnotbeenundertaken.Specificperformanceissuesaredealtwithastheyarise.
d) ProvisionsB2-1,B2-2,B2-4,D2-1&D2-2–DuetothesizeoftheBoardandbecausetherearenoexecutiveDirectorsorseniormanagement,theCompanydoesnothaveaformalnominationscommitteeorremunerationcommittee.SinceappointmenttherehavebeennochangestotheBoardofthe Directors.
e) ProvisionB2-3–On16October2013theDirectorswereappointedforaperiodoftwelvemonthsafterwhicheitherpartymustgivethreecalendarmonths’noticetoendthecontract.TherecommendationoftheCombinedCodeisforfixedtermrenewablecontracts.ThisisdeemedunnecessarybytheBoardbecauseallDirectorsweresubjecttore-electionatthefirstAGMandfromthatpointforwardbyrotationatleasteverythreeyears.
f) ProvisionA4-1–DuetothesizeoftheBoard,theroleofChairmanandSeniorIndependentDirectorarebothperformedbyDavidVaughan.TherecommendationintheCodeisfortheSeniorIndependentDirectorandChairmantobeseparatepositionsontheBoard.TheBoardbelievesthatDavidVaughan’sexperienceallowshimtoexerciseproperjudgementindistinguishingbetweentheroles.
g) ProvisionC3-1–DuetothesizeoftheBoard,theChairmanoftheCompanyisalsotheChairmanoftheAuditCommittee.TherecommendationintheCodeisthattheChairmanoftheCompanycanbeamemberoftheAuditCommittee,butshouldnotbetheChairman.TheBoardbelievesthatDavidVaughan’sexperienceallowshimtoexerciseproperjudgementindistinguishingbetweentheroles.
h) ProvisionsC3-2andC3-3–DuetothesizeoftheBoardandasthemajorityoftheBoardareindependentnon-executiveDirectors,theauditcommitteedoesnothaveformalwrittentermsofreference.
i) ProvisionC3-5–AstheCompanyhasnoemployees,otherthanDirectors,therearenoproceduresinplacerelatingto whistleblowing.
OnbehalfoftheBoard
David Vaughan Chairman29June2017
24
Puma VCT 10 plc Annual report and accounts 2017
Independent Auditor’s Report to the Members of Puma VCT 10 plc
Opinion on financial statements Wehaveauditedthefinancialstatementsonpages26to40.ThefinancialreportingframeworkthathasbeenappliedintheirpreparationisapplicablelawandUnitedKingdomAccountingStandards(UnitedKingdomGenerallyAcceptedAccountingPractice)includingFRS102“TheFinancialReportingStandardapplicableintheUKandRepublicofIreland”.
Inouropinionthefinancialstatements:
• giveatrueandfairviewofthestateofthecompany’saffairsasat28February2017andofitsprofitfortheperiodthen ended;
• havebeenproperlypreparedinaccordancewithUnitedKingdomGenerallyAcceptedAccountingPractice;and
• havebeenpreparedinaccordancewiththerequirementsoftheCompaniesAct2006.
Emphasis of matter: uncertainties associated with the fair value of investment in Opes Industries LimitedInformingouropiniononthefinancialstatements,whichisnotmodified,wehaveconsideredtheadequacyofthedisclosuresmadeinnote8tothefinancialstatementsconcerningtheuncertaintiesassociatedwithfairvalueoftheCompany’sinvestmentinOpesIndustriesLimited,whichisincludedinthefinancialstatementsat£2,940,000(2015:£2,940,000).Thefairvalueofthisinvestmentisbasedontheassetsexpectedtoberealisedbytheadministrator,whichisyettobedetermined.Thevalueoftheinvestmentrealisedmaybemateriallydifferentfromthefairvaluestatedinthefinancialstatements.
Directors’ assessment of the principal risks that would threaten the solvency or liquidity of the entityWehavenothingmaterialtoaddortodrawattentiontoinrelation to:
• thedirectors’confirmationintheAnnualReportthattheyhavecarriedoutarobustassessmentoftheprincipalrisksfacingtheentity,includingthosethatwouldthreatenitsbusinessmodel,futureperformance,solvencyorliquidity;
• thedisclosuresintheAnnualReportthatdescribethoserisksandexplainhowtheyarebeingmanagedormitigated;
• thedirectors’statementinthefinancialstatementsaboutwhethertheyconsidereditappropriatetoadoptthegoingconcernbasisofaccountinginpreparingthem,andtheiridentificationofanymaterialuncertaintiestotheentity’sabilitytocontinuetodosooveraperiodofatleasttwelvemonthsfromthedateofapprovalofthefinancialstatements; and
• thedirectors’explanationintheAnnualReportastohowtheyhaveassessedtheprospectsoftheentity,overwhatperiodtheyhavedonesoandwhytheyconsiderthatperiod
tobeappropriate,andtheirstatementastowhethertheyhaveareasonableexpectationthattheentitywillbeabletocontinueinoperationandmeetitsliabilitiesastheyfalldueovertheperiodoftheirassessment,includinganyrelateddisclosuresdrawingattentiontoanynecessaryqualificationsorassumptions
Our assessment of risks of material misstatement Weidentifiedthefollowingriskwhichhadthemostsignificantimpactonourauditstrategyandsetoutbelowhowthiswasaddressedbythescopeofouraudit:
Valuation of unquoted investmentsUnquotedinvestmentsaremeasuredatfairvalue,whichisestablishedinaccordancewiththeInternationalPrivateEquityandVentureCapitalValuationGuidelines.Thishasbeenidentifiedasanareaofsignificantriskandisthekeyareathatouraudithasfocussedon,giventhatthemeasurementofunquotedinvestmentsincludessignificantassumptionsandjudgementsabouttheperformanceoftheinvesteecompany.
Ourproceduresincluded:
• understandingandchallengingthekeyassumptionsandjudgementsaffectinginvesteecompanyvaluationspreparedbytheinvestmentmanagerbasedonobservabledataandtheprovisionsoftheInternationalPrivateEquityandVentureCapitalValuationGuidelines;
• challengingtheappropriatenessofthevaluationbasisbycomparisonwithobservedindustrypracticeandtheprovisionsoftheInternationalPrivateEquityandVentureCapitalValuationGuidelines;
• consideringwhethereventsthatoccurredsubsequenttotheperiodendupuntilthedateofthisauditreportaffectedtheunderlyingassumptionsofthevaluationsat28February2017;and
• considerationoftheappropriatenessofthedisclosuresinthefinancialstatementsinrespectofunquotedinvestments.
Our application of materiality Whenestablishingouroverallauditstrategy,wesetcertainthresholdswhichhelpustodeterminethenature,timingandextentofourauditproceduresandtoevaluatetheeffectsofmisstatements,bothindividuallyandonthefinancialstatementsasawhole.Duringplanningwedeterminedamagnitudeofuncorrectedmisstatementsthatwejudgewouldbematerialforthefinancialstatementsasawhole(FSM).DuringplanningFSM,wascalculatedas£235,000andthisfigurewasnotamendedduringthecourseofouraudit.Thishasbeencalculatedbasedonapercentageofnetassets,whichisthekeyelementinfluencingnetassetvaluewhichisconsideredtobeoneoftheprincipalconsiderationsformembersofthecompanyinassessingfinancial performance.
25
Puma VCT 10 plc Annual report and accounts 2017
WeagreedwiththeAuditCommitteethatwewouldreporttotheCommitteealladjustedandunadjustedmisstatementsinexcessof£10,000,aswellasdifferencesbelowthatthresholdthat,inourview,warrantedreportingonqualitativegrounds.
An overview of the scope of our auditThecompanyisasingleentity,subjecttolocalstatutoryaudit,andourauditworkwasdesignedtoaddresstherisksofmaterialmisstatementsidentifiedtothelevelofmaterialityindicated above.
Scope of the audit of the financial statementsAdescriptionofthescopeofanauditoffinancialstatementsisprovidedontheFinancialReportingCouncil’swebsiteathttp://www.frc.org.uk/auditscopeukprivate.
Opinion on other matters prescribed by the Companies Act 2006InouropinionthepartoftheDirectors’RemunerationReporttobeauditedhasbeenproperlypreparedinaccordancewiththeCompaniesAct2006.
Inouropinion,basedontheworkundertakeninthecourseoftheaudit,theinformationgivenintheStrategicReportandtheReportoftheDirectorsforthefinancialperiodforwhichthefinancialstatementsarepreparedisconsistentwiththefinancialstatementsandtheStrategicReportandtheReportoftheDirectorshavebeenpreparedinaccordancewithapplicablelegal requirements.
Matters on which we are required to report by exceptionInlightoftheknowledgeandunderstandingofthecompanyanditsenvironmentobtainedinthecourseoftheaudit,wehavenotidentifiedanymaterialmisstatementsintheStrategicReportortheReportoftheDirectors.
Wehavenothingtoreportinrespectofthefollowing:
UndertheISAs(UKandIreland)wearerequiredtoreporttoyouif,inouropinion,informationintheannualreportis:
• materiallyinconsistentwiththeinformationintheauditedfinancialstatements;or
• apparentlymateriallyincorrectbasedon,ormateriallyinconsistentwith,ourknowledgeoftheCompanyacquiredinthecourseofperformingouraudit;or
• isotherwisemisleading.
Inparticular,wearerequiredtoconsiderwhetherwehaveidentifiedanyinconsistenciesbetweenourknowledgeacquiredduringtheauditandthedirectors’statementthattheyconsidertheannualreportisfair,balancedandunderstandableandwhethertheannualreportappropriatelydisclosesthosemattersthatwecommunicatedtotheAuditCommitteewhichweconsidershouldhavebeendisclosed.
UndertheCompaniesAct2006wearerequiredtoreporttoyouifinouropinion:
• adequateaccountingrecordshavenotbeenkept,orreturnsadequateforouraudithavenotbeenreceivedfrombranchesnotvisitedbyus;or
• thefinancialstatementsandthepartoftheDirectors’RemunerationReporttobeauditedarenotinagreementwiththeaccountingrecordsandreturns;or
• certaindisclosuresofdirectors’remunerationspecifiedbylawarenotmade;or
• wehavenotreceivedalltheinformationandexplanationswerequireforouraudit.
UndertheListingRules,wearerequiredtoreview:
• thedirectors’statement,setoutonpages17to19inrelationtogoingconcernandlongertermviability;and
• thepartoftheCorporateGovernanceStatementsetoutonpages21to23relatingtothecompany’scompliancewiththeprovisionsoftheUKCorporateGovernanceCodespecifiedforourreview.
Respective responsibilities of directors and auditorAsmorefullyexplainedintheDirectors’ResponsibilitiesStatementsetoutonpages18and19,thedirectorsareresponsibleforthepreparationofthefinancialstatementsandforbeingsatisfiedthattheygiveatrueandfairview.OurresponsibilityistoauditandexpressanopiniononthefinancialstatementsinaccordancewithapplicablelawandInternationalStandardsonAuditing(UKandIreland).ThosestandardsrequireustocomplywiththeAuditingPracticesBoard’sEthicalStandardsforAuditors.
Thisreportismadesolelytothecompany’smembers,asabody,inaccordancewithChapter3ofPart16oftheCompaniesAct2006.Ourauditworkhasbeenundertakensothatwemightstatetothecompany’smembersthosematterswearerequiredtostatetotheminanauditor’sreportandfornootherpurpose.Tothefullestextentpermittedbylaw,wedonotacceptorassumeresponsibilitytoanyoneotherthanthecompanyandthecompany’smembersasabody,forourauditwork,forthisreport,orfortheopinionswehaveformed.
RICHARD COATES(Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory AuditorCharteredAccountants25FarringdonStreetLondonEC4A4AB
29June2017
26
Puma VCT 10 plc Annual report and accounts 2017
Income StatementFor the period ended 28 February 2017
Period from 1 January 2016 to 28 February 2017 Year ended 31 December 2015
NoteRevenue
£’000Capital
£’000Total
£’000Revenue
£’000Capital
£’000Total
£’000
Gain/(loss)oninvestments 8(b) – 32 32 - (427) (427)
Income 2 1,109 – 1,109 1,336 - 1,336
1,109 32 1,141 1,336 (427) 909
Investmentmanagementfees 3 (146) (438) (584) (135) (405) (540)
Otherexpenses 4 (278) – (278) (222) – (222)
(424) (438) (862) (357) (405) (762)
Profit/(loss)beforetaxation 685 (406) 279 979 (832) 147
Taxation 5 (158) 88 (70) (242) 146 (96)
Profit/(loss)andtotalcomprehensiveincomefortheperiod 527 (318) 209 737 (686) 51
Basicanddiluted
Return/(loss)perOrdinaryShare(pence) 6 1.91p (1.15p) 0.76p 2.67p (2.48p) 0.19p
Allitemsintheabovestatementderivefromcontinuingoperations.
TherearenogainsorlossesotherthanthosedisclosedintheIncomeStatement.
ThetotalcolumnofthisstatementistheStatementofTotalComprehensiveIncomeoftheCompanypreparedinaccordancewithFRS102‘TheFinancialReportingStandardapplicableintheUKandRepublicofIreland’.ThesupplementaryrevenueandcapitalcolumnsarepreparedinaccordancewiththeStatementofRecommendedPractice,‘FinancialStatementsofInvestmentTrustCompaniesandVentureCapitalTrusts’issuedinNovember2014bytheAssociationofInvestmentCompaniesandupdatedinJanuary2017.
27
Puma VCT 10 plc Annual report and accounts 2017
Balance SheetAs at 28 February 2017
Note28 February 2017
£’00031 December 2015
£’000
Fixed Assets
Investments 8 22,390 26,407
Current Assets
Debtors 9 1,087 1,033
Cashatbankandinhand 243 418
1,330 1,451
Creditors - amounts falling due within one year 10 (203) (1,234)
Net Current Assets 1,127 217
Net Assets 23,517 26,624
Capital and Reserves
Calledupsharecapital 12 17 17
Sharepremiumaccount 15,624 15,624
Capitalreserve–realised (933) (575)
Capitalreserve–unrealised (459) (499)
Revenuereserve 9,268 12,057
Total Equity 23,517 26,624
Net Asset Value per Ordinary Share 13 85.10p 96.35p
Thefinancialstatementsonpages26to40wereapprovedandauthorisedforissuebytheBoardofDirectorson29June2017andweresignedontheirbehalfby:
David Vaughan Chairman 29June2017
28
Puma VCT 10 plc Annual report and accounts 2017
Period from 1 January 2016 to 28 February 2017
£’000
Year ended 31 December 2015
£’000
Profitaftertax 209 51
Taxation 70 96
(Gain)/lossoninvestments (51) 427
Increaseindebtors (54) (941)
(Decrease)/increaseincreditors (985) 385
Taxpaid (116) –
Net cash (used in)/generated from operating activities (927) 18
Cash flow from investing activities
Purchaseofinvestments (4,694) (18,242)
Proceedsfromdisposalofinvestments 8,762 4,940
Net cash generated from/(used in) investing activities 4,068 (13,302)
Cash flow from financing activities
Dividendspaid (3,316) –
Net cash used in financing activities (3,316) –
Net decrease in cash and cash equivalents (175) (13,284)
Cashandcashequivalentsatthebeginningoftheperiod 418 13,702
Cash and cash equivalents at the end of the period 243 418
Statement of Cash Flows For the period ended 28 February 2017
29
Puma VCT 10 plc Annual report and accounts 2017
Statement of Changes in EquityFor the period ended 28 February 2017
Called up share capital
£’000
Share premium account
£’000
Capital reserve - realised
£’000
Capital reserve - unrealised
£’000
Revenue reserve
£’000Total
£’000
Balanceasat1January2015 17 15,624 (405) 17 11,320 26,573
Realisedgainfrompriorperiod – – 8 (8) – –
Totalcomprehensiveincomefortheyear – – (178) (508) 737 51
Balance as at 31 December 2015 17 15,624 (575) (499) 12,057 26,624
Realisedgainintheperiod – – 11 (11) – –
Totalcomprehensiveincomefortheperiod – – (369) 51 527 209
Dividendspaid – – – – (3,316) (3,316)
Balance as at 28 February 2017 17 15,624 (933) (459) 9,268 23,517
Distributablereservescomprise:Capitalreserve-realised,Capitalreserve-unrealised(excludinggainsonunquotedinvestments)andtheRevenuereserve.Attheperiod-enddistributablerevenuereserveswere£9,268,000(2015:£12,057,000).
TheCapitalreserve-realisedincludesgains/lossesthathavebeenrealisedintheperiodduetothesaleofinvestments,netofrelatedcosts.TheCapitalreserve-unrealisedrepresentstheinvestmentholdinggains/lossesandshowsthegains/lossesoninvestmentsstillheldbythecompanynotyetrealisedbyanassetsale.
Sharepremiumrepresentspremiumonsharesissuedlessissuecosts.
Therevenuereserverepresentsthecumulativerevenueearnedlesscumulativedistributions.
30
Puma VCT 10 plc Annual report and accounts 2017
Notes to the AccountsFor the period ended 28 February 2017
1. Accounting PoliciesAccounting conventionPumaVCT10plc(“theCompany”)wasincorporated,registeredandisdomiciledinEngland.TheCompany’sregisterednumberis08714913.TheregisteredofficeisBondStreetHouse,14CliffordStreet,LondonW1S4JU.TheCompanyisapubliclimitedcompanywhosesharesarelistedonLSEwithapremiumlisting.Thecompany’sprincipalactivitiesandadescriptionofthenatureoftheCompany’soperationsaredisclosedintheStrategicReport.
Thefinancialstatementshavebeenpreparedunderthehistoricalcostconvention,modifiedtoincludeinvestmentsatfairvalue,andinaccordancewiththerequirementsoftheCompaniesAct2006,includingtheprovisionsoftheLargeandMedium-sizedCompaniesandGroups(AccountsandReports)Regulations2008,FRS102‘TheFinancialReportingStandardapplicableintheUKandRepublicofIreland’(“FRS102”)andtheStatementofRecommendedPractice,‘FinancialStatementsofInvestmentTrustCompaniesandVentureCapitalTrusts’issuedinNovember2014bytheAssociationofInvestmentCompaniesandupdatedinJanuary2017(“theSORP”).
Monetaryamountsinthesefinancialstatementsareroundedtothenearestwhole£1,000,exceptwhereotherwiseindicated.
InvestmentsAllinvestmentsaremeasuredatfairvalue.TheyareallheldaspartoftheCompany’sinvestmentportfolioandaremanagedinaccordancewiththeinvestmentpolicysetoutonpage15.
Listedinvestmentsarestatedatbidpriceatthereportingdate.
UnquotedinvestmentsarestatedatfairvaluebytheDirectorswithreferencetotheInternationalPrivateEquityandVentureCapitalValuationGuidelines(“IPEV”)asfollows:
• Investmentswhichhavebeenmadewithinthelasttwelvemonthsorwheretheinvesteecompanyisintheearlystageofdevelopmentwillusuallybevaluedatthepriceofrecentinvestmentexceptwherethecompany’sperformanceagainstplanissignificantlydifferentfromexpectationsonwhichtheinvestmentwasmadeinwhichcaseadifferentvaluationmethodologywillbe adopted.
• Investmentsindebtinstrumentswillusuallybevaluedbyapplyingadiscountedcashflowmethodologybasedonexpectedfuturereturnsoftheinvestment.
• Alternativemethodsofvaluationsuchasnetassetvaluemaybeappliedinspecificcircumstancesifconsideredmoreappropriate.
Realisedsurplusesordeficitsonthedisposalofinvestmentsaretakentorealisedcapitalreserves,andunrealisedsurplusesanddeficitsontherevaluationofinvestmentaretakentounrealisedcapitalreserves.
IncomeDividendsreceivableonlistedequitysharesarebroughtintoaccountontheex-dividenddate.DividendsreceivableonunquotedequitysharesarebroughtintoaccountwhentheCompany’srighttoreceivepaymentisestablishedandthereisnoreasonabledoubtthatpaymentwillbereceived.Interestreceivableisrecognisedwhollyasarevenueitemonanaccrualsbasis.
Performance fees Uponitsinception,theCompanyagreedperformancefeespayabletotheInvestmentManager,PumaInvestmentManagementLimited,andmembersoftheinvestmentmanagementteamat20%oftheaggregateexcessoftheamountsrealisedover£1perOrdinarySharereturnedtoOrdinaryShareholders.ThisincentivewillonlybeeffectiveoncetheotherholdersofOrdinaryShareshavereceiveddistributionsof£1pershare.
Theperformanceincentivehasbeensatisfiedthroughtheissueof6,908,306OrdinaryShares(assetoutinNote11ofthefinancialstatements)totheInvestmentManagerandmembersoftheinvestmentmanagementteambeing20%ofthetotalissuedOrdinarySharecapitalof34,541,530.Underthetermsoftheincentivearrangement,allrightstodividendswillbewaiveduntilthe£1perOrdinaryShareperformancetargethasbeenmet.Theperformancefeeisaccountedforasanequity-settledshare-basedpayment.
Section26ofFRS102“Share-BasedPayment”requirestherecognitionofanexpenseinrespectofshare-basedpaymentsinexchangeforgoodsorservices.Entitiesarerequiredtomeasurethegoodsorservicesreceivedattheirfairvalue,unlessthatfairvaluecannotbeestimatedreliablyinwhichcasethatfairvalueshouldbeestimatedbyreferencetothefairvalueoftheequityinstrumentsgranted.
Ateachbalancesheetdate,theCompanyestimatesthatfairvaluebyreferencetoanyexcessofthenetassetvalue,adjustedfordividendspaid,over£1pershareinissueatthebalancesheetdate.AnychangeinfairvalueisrecognisedintheIncomeStatementwithacorrespondingadjustmenttoequity
31
Puma VCT 10 plc Annual report and accounts 2017
1. Accounting Policies continued ExpensesAllexpenses(inclusiveofVAT)areaccountedforonanaccrualsbasis.Expensesarechargedwhollytorevenue,withtheexceptionof:
• expensesincidentaltotheacquisitionordisposalofaninvestmentchargedtocapital;and
• theinvestmentmanagementfee,75%ofwhichhasbeenchargedtocapitaltoreflectanelementwhichis,inthedirectors’opinion,attributabletothemaintenanceorenhancementofthevalueoftheCompany’sinvestmentsinaccordancewiththeBoard’sexpectedlong-termsplitofreturn;and
• theperformancefeewhichisallocatedproportionallytorevenueandcapitalbasedontherespectivecontributionstotheNetAsset Value.
TaxationCorporationtaxisappliedtoprofitschargeabletocorporationtax,ifany,attheapplicableratefortheperiod.Thetaxeffectofdifferentitemsofincome/gainandexpenditure/lossisallocatedbetweencapitalandrevenuereturnonthemarginalbasisasrecommendedbytheSORP.
Deferredtaxisrecognisedinrespectofalltimingdifferencesthathaveoriginatedbutnotreversedatthebalancesheetdate,wheretransactionsoreventsthatresultinanobligationtopaymore,orrighttopayless,taxinthefuturehaveoccurredatthebalancesheetdate.Thisissubjecttodeferredtaxassetsonlybeingrecognisedifitisconsideredmorelikelythannotthattherewillbesuitabletaxableprofitsfromwhichthefuturereversaloftheunderlyingtimingdifferencescanbededucted.TimingdifferencesaredifferencesarisingbetweentheCompany’staxableprofitsanditsresultsasstatedinthefinancialstatementswhicharecapableofreversalinoneormoresubsequentperiods.Deferredtaxismeasuredonanon-discountedbasisatthetaxratesthatareexpectedtoapplyintheperiodsinwhichtimingdifferencesareexpectedtoreverse,basedontaxratesandlawsenactedorsubstantivelyenactedatthebalancesheet date.
ReservesRealisedlossesandgainsoninvestments,transactioncosts,thecapitalelementoftheinvestmentmanagementfeeandtaxationaretakenthroughtheIncomeStatementandrecognisedintheCapitalReserve–RealisedontheBalancesheet.UnrealisedlossesandgainsoninvestmentsandthecapitalelementoftheperformancefeearealsotakenthroughtheIncomeStatementandarerecognisedintheCapitalReserve–Unrealised.
Foreign exchangeThefunctionalandpresentationalcurrencyoftheCompanyisSterling.TransactionsdenominatedinforeigncurrenciesaretranslatedintoSterlingattheratesrulingatthedatesthattheyoccurred.Assetsandliabilitiesdenominatedinaforeigncurrencyaretranslatedattheappropriateforeignexchangeraterulingatthebalancesheetdate.TranslationdifferencesarerecordedasunrealisedforeignexchangelossesorgainsandtakentotheIncomeStatement.
DebtorsDebtorsincludeaccruedincomewhichisrecognisedatamortisedcost,equivalenttothefairvalueoftheexpectedbalancereceivable.
DividendsFinaldividendspayablearerecognisedasdistributionsinthefinancialstatementswhentheCompany’sliabilitytomakepaymenthasbeenestablished.TheliabilityisestablishedwhenthedividendsproposedbytheBoardareapprovedbytheShareholders.Interimdividendsarerecognisedwhenpaid.
Key accounting estimates and assumptionsTheCompanymakesestimatesandassumptionsconcerningthefuture.Theresultingaccountingestimatesandassumptionswill,bydefinition,seldomequaltherelatedactualresults.Theestimatesandassumptionsthathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetswithinthenextfinancialperiodrelatetothefairvalueofunquotedinvestments.FurtherdetailsoftheunquotedinvestmentsaredisclosedintheInvestmentManager’sReportonpages3to6andnotes8and14ofthefinancialstatements.
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Puma VCT 10 plc Annual report and accounts 2017
2. IncomePeriod from 1 January 2016
to 28 February 2017 £’000
Year ended 31 December 2015 £’000
Income from investments
Loanstockinterest 1,000 1,254
Bondyields 109 31
1,109 1,285
Other income
Bankdepositincome – 51
1,109 1,336
3. Investment Management FeesPeriod from 1 January 2016
to 28 February 2017 £’000
Year ended 31 December 2015 £’000
PumaInvestmentsfees 584 540
PumaInvestmentManagementLimited(“PumaInvestments”)hasbeenappointedastheInvestmentManageroftheCompanyforaninitialperiodoffiveyears,whichcanbeterminatedbynotlessthantwelvemonths’notice,givenatanytimebyeitherparty,onorafterthefifthanniversary.TheBoardissatisfiedwiththeperformanceoftheInvestmentManager.UnderthetermsofthisagreementPumaInvestmentswillbepaidanannualfeeof2%oftheNetAssetValuepayablequarterlyinarrearscalculatedontherelevantquarterendNAVoftheCompany.Thesefeesarecapped,theInvestmentManagerhavingagreedtoreduceitsfee(ifnecessarytonothing)tocontaintotalannualcosts(excludingperformancefeeandtrailcommission)towithin3.5%offundsraised.Totalcoststhisperiodwere2.7%ofthefundsraised(2015:2.8%).
4. Other expensesPeriod from 1 January 2016 to
28 February 2017 £’000
Year ended 31 December 2015 £’000
PIAdministrationServicesLimited 102 95
Directors’Remuneration 56 48
Socialsecuritycosts 3 1
Auditor'sremunerationforstatutoryaudit 23 23
Legalandprofessionalfees 40 34
Otherexpenses 54 21
278 222
PIAdministrationServicesLimitedprovidesadministrativeservicestotheCompanyforanaggregateannualfeeof0.35%oftheNetAssetValueoftheFund,payablequarterlyinarrears.
RemunerationforeachDirectorfortheperiodisdisclosedintheDirectors’RemunerationReportonpage20.TheCompanyhadnoemployees(otherthanDirectors)duringtheperiod(2015:none).Theaveragenumberofnon-executiveDirectorsduringtheperiodwas3(2015:3).Thenon-executiveDirectorsareconsideredtobetheKeyManagementPersonneloftheCompanywithtotalremunerationfortheperiodof£59,000(2015:£49,000),includingsocialsecuritycosts.
TheAuditor’sremunerationof£19,500(2015:£18,750)hasbeengrossedupinthetableabovetobeinclusiveofVAT.
Notes to the Accounts continuedFor the period ended 28 February 2017
33
Puma VCT 10 plc Annual report and accounts 2017
5. TaxationPeriod from 1 January 2016 to
28 February 2017 £’000
Year ended 31 December 2015 £’000
UKcorporationtaxchargedtorevenuereserve 158 242
UKcorporationtaxcreditedtocapitalreserve (88) (146)
UK corporation tax charge for the period 70 96
Factors affecting tax charge for the period
Profitbeforetaxation 279 147
Taxchargecalculatedonprofitbeforetaxationat20% 56 29
Capitalitemsnottaxable (6) 86
Priorperiodunderaccrual 20 –
Otherdifferences – (19)
70 96
CapitalreturnsarenottaxableastheCompanyisexemptfromtaxonrealisedcapitalgainswhilstitcontinuestocomplywiththeVCTregulations,sonocorporationtaxisrecognisedoncapitalgainsorlosses.DuetotheintentiontocontinuetocomplywiththeVCTregulations,theCompanyhasnotprovidedfordeferredtaxonanyrealisedorunrealisedcapitalgainsandlosses.
6. Basic and diluted return/(loss) per Ordinary SharePeriod from 1 January 2016 to 28 February 2017
Revenue £’000
Capital £’000
Total £’000
Total comprehensive income for the period 527 (318) 209
Weighted average number of shares in issue for the period 34,541,530 34,541,530 34,541,530
Less: management incentive shares (see note 11) (6,908,306) (6,908,306) (6,908,306)
Weighted average number of shares for purposes of return/(loss) per share calculation 27,633,224 27,633,224 27,633,224
Return/(loss) per share 1.91p (1.15)p 0.76p
Year ended 31 December 2015
Revenue £’000
Capital £’000
Total £’000
Totalcomprehensiveincomefortheyear 737 (686) 51
Weightedaveragenumberofsharesinissuefortheyear 34,541,530 34,541,530 34,541,530
Less:managementincentiveshares(seenote11) (6,908,306) (6,908,306) (6,908,306)
Weightedaveragenumberofsharesforpurposesofreturn/(loss)persharecalculation 27,633,224 27,633,224 27,633,224
Return/(loss)pershare 2.67p (2.48)p 0.19p
34
Puma VCT 10 plc Annual report and accounts 2017
7. Dividends TheDirectorsdonotproposeafinaldividendinrelationtotheperiodended28February2017(2015:£nil).Twointerimdividendsof6pperordinarysharewerepaidfromrevenuereservesintheperiodended28February2017totalling£3,316,000(2015:£nil).
8. Investments
(a) Movements in investmentsQualifying investments
£’000Non qualifying investments
£’000Total
£’000
Bookcostat1January2016 5,325 21,582 26,907
Unrealised(losses)/gainsat1January2016 (510) 10 (500)
Valuation at 1 January 2016 4,815 21,592 26,407
Purchasesatcost 3,119 2,228 5,347
Transferfromnon-qualifyingtoqualifyinginvestments 7,500 (7,500) –
Disposalproceedsandrepaymentsofloansandloannotes – (9,396) (9,396)
Realisedlossesondisposals – (19) (19)
Netunrealisedgains – 51 51
Valuation at 28 February 2017 15,434 6,956 22,390
Bookcostat28February2017 15,944 6,905 22,849
Netunrealisedgainsat28February2017 (510) 51 (459)
Valuation at 28 February 2017 15,434 6,956 22,390
Aspreviouslyreported,amajorfireoccurredinFebruary2016attheMaterialsRecyclingFacility(“MRF”)operatedbyOpesIndustriesLimited(“Opes”),intowhichtheCompanyhasinvestedatotalof£3.45m(aspartofan£8.8minvestmentbyPumaentities).Asaresultoftheincident,andasreportedintheCompany’spreviousannualreport,theboardmadeaprovisionof£510,000againstthecarryingvalueoftheCompany’sinvestmentinOpes.Opesowneda73hectaresiteinnorthOxfordshirewithaMRF,includingalandfillsitefornon-hazardousmaterialsandanaggregates/gravelquarryingbusiness.TheCompany’sinvestmentwastoprovidefundingfortheconstructionandequippingoftheMRFandworkingcapitalduringthebuild-upofthetrade.ThefundingwasprovidedintheformofequityandloanstockandourinterestsarecoveredbyafirstfixedandfloatingchargeoverOpes’assets.Followingtheincident,theCompanyappointedanadministratoroverOpesinordertobestprotecttheCompany’sinvestment.Wearepleasedtoreportthatshortlyaftertheperiodend,theadministratorexchangedcontractsforthesaleofthenorthOxfordshiresite;thecashconsiderationispayableinstagesovera12monthperiod.Moreover,discussionsarecontinuingwithOpes’insurersregardingreimbursementofthedamagetotheplantandthebuildingandofthecostsofbusinessinterruption.
Duringtheperiod,theCompanysolditsquotedbondsinNextenergySolarBondfor£493,000,whichwereoriginallyacquiredfor£500,000.Thesebondswerestatedat£523,000asat31December2015.TheCompanyalsosolditsholdingsofquotedbondsinRoyalBankofCanadafor£2,516,000(originallyacquiredfor£2,500,000)andinCommonwealthBankofAustraliafor£1,010,000(originallyacquiredfor£1,010,000).Thesebondswerestatedat£2,505,000and£1,010,000respectivelyasat31December2015.
Notes to the Accounts continuedFor the period ended 28 February 2017
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Puma VCT 10 plc Annual report and accounts 2017
8. Investments continued (b) Gains and losses on investmentsThegainsandlossesoninvestmentsfortheyearshownintheIncomeStatementisanalysedasfollows:
Period from 1 January 2016 to 28 February 2017
£’000Year ended 31 December 2015
£’000
Realised(losses)/gainsinperiod (19) 81
Unrealisedgains/(losses)inperiod 51 (508)
32 (427)
(c) Quoted and unquoted investments
Market value as at 28 February 2017
£’000
Market value as at 31 December 2015
£’000
Quotedinvestments 872 3,028
Unquotedinvestments 21,518 23,379
22,390 26,407
FurtherdetailsoftheseinvestmentsaredisclosedintheInvestmentPortfolioSummaryonpages6to13oftheAnnualReport.
9. Debtors
As at 28 February 2017 £’000
As at 31 December 2015 £’000
Prepaymentsandaccruedincome 1,063 1,033
Otherdebtors 24 –
1,087 1,033
10. Creditors – amounts falling due within one year
As at 28 February 2017 £’000
As at 31 December 2015 £’000
Accruals 153 198
Othercreditors – 940
Corporationtax 50 96
203 1,234
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Puma VCT 10 plc Annual report and accounts 2017
11. Management Performance Incentive Arrangement On7October2013,theCompanyenteredintoanAgreementwiththeInvestmentManagerandmembersoftheinvestmentmanagementteam(together“theManagementTeam”)suchthattheManagementTeamwillbeentitledinaggregatetosharein20%oftheaggregateexcessonanyamountsrealisedbytheCompanyinexcessof£1perOrdinaryShare,thePerformanceTarget.
ThisincentiveiseffectivethroughtheissueofordinarysharesintheCompany,suchthattheManagementTeamhold6,908,306ordinarysharesbeing20%oftheissuedsharecapitalof34,541,530.
TheManagementTeamwillwaiveallrightstodividendsuntilareturnof£1pershare(whethercapitalorincome)hasbeenpaidtotheothershareholders.
TheperformanceincentivestructureprovidesastrongincentivefortheInvestmentManagertoensurethattheCompanyperformswell,enablingtheBoardtoapprovedistributionsashighandassoonaspossible.
12. Called Up Share Capital
As at 28 February 2017 £’000
As at 31 December 2015 £’000
34,541,530ordinarysharesof0.05peach 17 17
13. Net Asset Value per Ordinary Share
As at 28 February 2017 As at 31 December 2015
Netassets £23,517,000 £26,624,000
Numberofsharesinissue 34,541,530 34,541,530
Less:managementincentiveshares(seenote11) (6,908,306) (6,908,306)
NumberofsharesinissueforpurposesofNetAssetValuepersharecalculation 27,633,224 27,633,224
Net asset value per share
Basic 85.10p 96.35p
Diluted 85.10p 96.35p
Notes to the Accounts continuedFor the period ended 28 February 2017
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Puma VCT 10 plc Annual report and accounts 2017
14. Financial Instruments
TheCompany’sfinancialinstrumentscompriseitsinvestments,cashbalances,debtorsandcertaincreditors.ThefairvalueofalloftheCompany’sfinancialassetsandliabilitiesisrepresentedbythecarryingvalueintheBalanceSheet.Excludingcashbalances,theCompanyheldthefollowingcategoriesoffinancialinstrumentsat28February2017:
As at 28 February 2017 £’000
As at 31 December 2015 £’000
Financial assets at fair value through profit or loss 22,390 26,407
Financial assets that are debt instruments measured at amortised cost 1,087 1,033
Financial liabilities measured at amortised cost (153) (1,138)
23,324 26,302
Management of riskThemainriskstheCompanyfacesfromitsfinancialinstrumentsaremarketpricerisk,beingtheriskthatthevalueofinvestmentholdingswillfluctuateasaresultofchangesinmarketpricescausedbyfactorsotherthaninterestrateorcurrencymovements,liquidityrisk,creditriskandinterestraterisk.TheBoardregularlyreviewsandagreespoliciesformanagingeachoftheserisks.TheBoard’spoliciesformanagingtheserisksaresummarisedbelowandhavebeenappliedthroughouttheperiod.
Credit riskCreditriskistheriskthatthecounterpartytoafinancialinstrumentwillfailtodischargeanobligationorcommitmentthatithasenteredintowiththeCompany.TheInvestmentManagermonitorscounterpartyriskonanongoingbasis.Thecarryingamountoffinancialassetsbestrepresentsthemaximumcreditriskexposureatthebalancesheetdate.
TheCompany’sfinancialassetsandmaximumexposuretocreditriskisasfollows:
As at 28 February 2017 £’000
As at 31 December 2015 £’000
Investmentsinloans,loannotesandbonds 11,445 17,264
Cashatbankandinhand 243 418
Interest,dividendsandotherreceivables 1,087 1,033
12,775 18,715
ThecashheldbytheCompanyattheperiodendissplitbetweentwoU.K.banks.BankruptcyorinsolvencyofeitherbankmaycausetheCompany’srightswithrespecttothereceiptofcashheldtobedelayedorlimited.TheBoardmonitorstheCompany’sriskbyreviewingregularlythefinancialpositionofthebanksandshoulditdeterioratesignificantlytheInvestmentManagerwill,oninstructionoftheBoard,movethecashholdingstoanotherbank.
Creditriskassociatedwithinterest,dividendsandotherreceivablesarepredominantlycoveredbytheinvestmentmanagement procedures.
Investmentsinloans,loannotesandbondscomprisesafundamentalpartoftheCompany’sventurecapitalinvestments,thereforecreditriskinrespectoftheseassetsismanagedwithintheCompany’smaininvestmentprocedures.
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Puma VCT 10 plc Annual report and accounts 2017
14. Financial Instruments continued Market price riskMarketpriceriskarisesmainlyfromuncertaintyaboutfuturepricesoffinancialinstrumentsheldbytheCompany.ItrepresentsthepotentiallosstheCompanymightsufferthroughholdinginvestmentsinthefaceofpricemovements.TheInvestmentManageractivelymonitorsmarketpricesandreportstotheBoard,whichmeetsregularlyinordertoconsiderinvestmentstrategy.
TheCompany’sstrategyonthemanagementofmarketpriceriskisdrivenbytheCompany’sinvestmentpolicyasoutlinedintheStrategicReportonpage15.Themanagementofmarketpriceriskispartoftheinvestmentmanagementprocess.Theportfolioismanagedwithanawarenessoftheeffectsofadversepricemovementsthroughdetailedandcontinuinganalysis,withanobjectiveofmaximisingoverallreturnstoshareholders.
Holdingsinunquotedinvestmentsmayposehigherpriceriskthanquotedinvestments.Someofthatriskcanbemitigatedbycloseinvolvementwiththemanagementoftheinvesteecompaniesalongwithreviewoftheirtradingresults.4%(2015:11%)oftheCompany’sinvestmentsarequotedinvestmentsand96%(2015:89%)areunquotedinvestments.
Liquidity riskDetailsoftheCompany’sunquotedinvestmentsareprovidedintheInvestmentPortfoliosummaryonpage6.Bytheirnature,unquotedinvestmentsmaynotbereadilyrealisable,theBoardconsidersexitstrategiesfortheseinvestmentsthroughouttheperiodforwhichtheyareheld.Asattheperiodend,theCompanyhadnoborrowings.
TheCompany’sliquidityriskassociatedwithinvestmentsismanagedonanongoingbasisbytheInvestmentManagerinconjunctionwiththeDirectorsandinaccordancewithpoliciesandproceduresinplaceasdescribedintheStrategicReportandtheReportoftheDirectors.TheCompany’soverallliquidityrisksaremonitoredonaquarterlybasisbytheBoard.TheCompanymaintainssufficientinvestmentsincashandreadilyrealisablesecuritiestopayaccountspayableandaccruedexpenses.
Fair value interest rate riskThebenchmarkthatdeterminestheinterestpaidorreceivedonthecurrentaccountistheBankofEnglandbaserate,whichwas0.25%at28February2017(2015:0.5%).Alloftheloanandloannoteinvestmentsareunquotedandhencenotdirectlysubjecttomarketmovementsasaresultofinterestratemovements.
Cash flow interest rate riskTheCompanyhasexposuretointerestratemovementsprimarilythroughitscashdepositsandloannoteswhichtrackeithertheBankofEnglandbaserateorLIBOR.
Notes to the Accounts continuedFor the period ended 28 February 2017
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Puma VCT 10 plc Annual report and accounts 2017
14. Financial Instruments continued Interest rate risk profile of financial assetsThefollowinganalysissetsouttheinterestrateriskoftheCompany’sfinancialassetsasat28February2017.
Rate status Weighted average
interest rate Weighted average
period until maturity Total£’000
Cashatbank–RBS Floating 0.01% – 243
Cashatbank–Lloyds Floating 0.25% – –
Loans,loannotesandbonds Floating 5.65% 15 months 4,632
Loans,loannotesandbonds Fixed 11.24% 39 months 5,125
Balanceofassets Non-interest bearing – 13,720
23,720
ThefollowinganalysissetsouttheinterestrateriskoftheCompany’sfinancialassetsasat31December2015.
Rate status Weighted average
interest rate Weighted average
period until maturity Total£’000
Cashatbank–RBS Floating 0.15% – 417
Cashatbank–Lloyds Floating 0.50% – 1
Loans,loannotesandbonds Floating 6.27% 51months 10,579
Loans,loannotesandbonds Fixed 10.37% 52months 6,685
Balanceofassets Non-interestbearing – 10,176
27,858
Foreign currency riskThereportingcurrencyoftheCompanyisSterling.TheCompanyhasnotheldanynon-Sterlinginvestmentsduringtheperiod.
Fair value hierarchyFinancialassetsandliabilitiesmeasuredatfairvaluearedisclosedusingafairvaluehierarchythatreflectsthesignificanceoftheinputsusedinmakingthefairvaluemeasurements,asfollows:
• Level1–Fairvalueismeasuredusingtheunadjustedquotedpriceinanactivemarket.
• Level2–Fairvalueismeasuredusinginputsotherquotedpricesthatareobservableusingmarketdata.
• Level3–Fairvalueismeasuredusingunobservableinputs.
TheCompanyhasearlyadoptedthechangestoFRS102publishedbytheFRCinMarch2016inrelationtothesedisclosures.
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Puma VCT 10 plc Annual report and accounts 2017
14. Financial Instruments continued Fair value hierarchy continuedFairvalueshavebeenmeasuredattheendofthereportingperiodasfollows:
As at 28 February 2017 £’000
As at 31 December 2015 £’000
Level 1InvestmentslistedonLSE 872 3,028
Level 3Unquotedinvestments 21,518 23,379
22,390 26,407TheLevel3investmentshavebeenvaluedinlinewiththeCompany’saccountingpoliciesandIPEVguidelines.FurtherdetailsoftheseinvestmentsareprovidedinthesignificantinterestssectionoftheAnnualReportonpages7to13.
15. Capital managementTheCompany’sobjectiveswhenmanagingcapitalaretosafeguardtheCompany’sabilitytocontinueasagoingconcern,sothatitcanprovideanadequatereturntoshareholdersbyallocatingitscapitaltoassetscommensuratewiththelevelofrisk.
Byitsnature,theCompanyhasanamountofcapital,atleast70%(asmeasuredunderthetaxlegislation)ofwhichmustbe,andremain,investedintherelativelyhighriskassetclassofsmallUKcompanieswithinthreeyearsofthatcapitalbeingsubscribed.
TheCompanyaccordinglyhaslimitedscopetomanageitscapitalstructureinthelightofchangesineconomicconditionsandtheriskcharacteristicsoftheunderlyingassets.Subjecttothisoverallconstraintuponchangingthecapitalstructure,theCompanymayadjusttheamountofdividendspaidtoshareholders,issuenewshares,orsellassetstomaintainalevelofliquiditytoremainagoingconcern.
TheBoardhastheopportunitytoconsiderlevelsofgearing,howevertherearenocurrentplanstodoso.ItregardsthenetassetsoftheCompanyastheCompany’scapital,asthelevelofliabilitiesissmallandthemanagementofthoseliabilitiesisnotdirectlyrelatedtomanagingthereturntoshareholders.
16. Contingencies, Guarantees and Financial CommitmentsTherewerenocommitments,contingenciesorguaranteesoftheCompanyattheperiod-end(2015:none).
17. Controlling Party IntheopinionoftheDirectorsthereisnoimmediateorultimatecontrollingparty.
Notes to the Accounts continuedFor the period ended 28 February 2017
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Puma VCT 10 plc Annual report and accounts 2017
DirectorsDavidVaughan(Chairman)StephenHazellSmithGrahamShore
SecretaryEliotKaye
Registered Number08714913
Registered OfficeBondStreetHouse14CliffordStreetLondonW1S4JU
Investment ManagerPumaInvestmentManagementLimitedBondStreetHouse14CliffordStreetLondonW1S4JU
RegistrarSLCRegistrars42-50HershamRoadWalton-on-ThamesSurreyKT121RZ
Officers and Professional Advisers
AdministratorPIAdministrationServicesLimitedBondStreetHouse14CliffordStreetLondonW1S4JU
AuditorRSMUKAuditLLPCharteredAccountants25FarringdonStreetLondonEC4A4AB
Sponsors and SolicitorsHowardKennedyNo1LondonBridgeLondonSE19BG
BankersTheRoyalBankofScotlandplcLondonCityOfficePOBox41262-63ThreadneedleStreetLondonEC2R8LA
LloydsBankInternationalLimitedSarniaHouseLeTruchotStPeterPortGuernseyGY14EF
VCT Tax AdvisorPricewaterhouseCoopersLLP1EmbankmentPlaceLondonWC2N6RH
CustodianPershingSecuritiesLimited1CanadaSquareLondonE145AL
Puma VCT 10 plc Annual report and accounts 2017
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Puma VCT 10 plc Annual report and accounts 2017
Notice of Annual General Meeting
NoticeisherebygiventhattheAnnualGeneralMeetingoftheCompanywillbeheldatBondStreetHouse,14CliffordStreet,LondonW1S4JUonTuesday22August2017at10.30a.m.forthefollowingpurposes:
Ordinary Business
1. ToreceiveandadopttheAccountsforthefinancialperiodended28February2017,togetherwiththereportsoftheDirectorsandAuditorsthereon.
2. Tore-electStephenHazell-Smithasadirectorwhoretirespursuanttoarticle27.2oftheCompany’sArticlesofAssociationand,beingeligible,offershimselfforre-election.
3. Tore-appointRSMUKAuditLLPasAuditorsoftheCompanyandtoauthorisetheDirectorstodeterminetheirremuneration.
4. ToapprovethepolicysetoutintheRemunerationReportintheAnnualReportandAccounts2017.
5. ToapprovetheimplementationreportsetoutintheRemunerationReportintheAnnualReportandAccounts2017.
Special BusinessToconsiderand,ifthoughtfit,passthefollowingresolutionwhichwillbeproposedasaspecialresolution:
6. ToauthorisetheCompanygenerallyandunconditionallytomakeoneormoremarketpurchases(withinthemeaningofsection693(4)oftheCompaniesAct2006(“CA2006”))ofordinarysharesof0.05peach(the“Shares”)providedthat:
6.1 themaximumaggregatenumberofSharesthatispurchasedis5,177,775;
6.2 theminimumpricepaidforaShareis1pence;
6.3 themaximumpricepaidforaShareisanamountexclusiveofexpenses,equalto105percentoftheaverageofthemiddlemarketpricesshowninthequotationsforaShareintheDailyOfficialListoftheLondonStockExchangeforthefivebusinessdaysimmediatelyprecedingthedayonwhichthatShareispurchased;
6.4 theCompanymayvalidlymakeacontracttopurchaseSharesundertheauthorityherebyconferredpriortotheexpiryofsuchauthoritywhichwillormaybeexecutedwhollyorpartlyaftertheexpiryofsuchauthority,andmayvalidlymakeapurchaseofSharesinpursuanceofanysuchcontract.
6.5 Unlessrenewed,theauthorityconferredbythisresolutionshallexpireeitherattheconclusionofthenextannualgeneralmeetingoftheCompanyoron21November2018,whicheveristheearliertooccur,savethattheCompanymay,priortosuchexpiry,enterintoacontracttopurchaseShareswhichwillormaybecompletedorexecutedwhollyorpartlyaftersuchexpiry.
By Order of the BoardEliotKayeCompanySecretary
Dated: 27July2017
Registered OfficeBondStreetHouse14CliffordStreetLondonW1S4JU
InformationregardingtheAnnualGeneralMeeting,includingtheinformationrequiredbysection311AoftheCA2006,isavailablefrom:http://www.pumainvestments.co.uk/pages/view/investors-information-vcts.
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Puma VCT 10 plc Annual report and accounts 2017
Notes:(a) AnymemberoftheCompanyentitledtoattendandvoteattheAnnualGeneralMeetingisalsoentitledtoappointoneormore
proxiestoattend,speakandvoteinsteadofthatmember.AmembermayappointmorethenoneproxyinrelationtotheAnnualGeneralMeetingprovidedthateachproxyisappointedtoexercisetherightsattachedtoadifferentshareorsharesheldbythatmember.Aproxymaydemand,orjoinindemanding,apoll.AproxyneednotbeamemberoftheCompanybutmustattendtheAnnualGeneralMeetinginordertorepresenthisappointor.AmemberentitledtoattendandvoteattheAnnualGeneralMeetingmayappointtheChairmanoranotherpersonashisproxyalthoughtheChairmanwillnotspeakforthemember.Amemberwhowisheshisproxytospeakforhimshouldappointhisownchoiceofproxy(nottheChairman)andgiveinstructionsdirectlytothatperson.IfyouarenotamemberoftheCompanybutyouhavebeennominatedbyamemberoftheCompanytoenjoyinformationrights,youdonothavearighttoappointanyproxiesundertheproceduressetoutintheseNotes.PleasereadNote(h)below.Undersection319AoftheCA2006,theCompanymustansweranyquestionamemberasksrelatingtothebusinessbeingdealtwithattheAnnualGeneralMeetingunless:
• answeringthequestionwouldinterfereundulywiththepreparationfortheAnnualGeneralMeetingorinvolvethedisclosureofconfidentialinformation;
• theanswerhasalreadybeengivenonawebsiteintheformofananswertoaquestion;or
• itisundesirableintheinterestsoftheCompanyorthegoodorderoftheAnnualGeneralMeetingthatthequestionbe answered.
(b) Tobevalid,aFormofProxyandthepowerofattorneyorotherwrittenauthority,ifany,underwhichitissignedoranofficeornotariallycertifiedcopyoracopycertifiedinaccordancewiththePowersofAttorneyAct1971ofsuchpowerandwrittenauthority,mustbedeliveredtotheCompany’sregistrars,SLCRegistrars,42-50HershamRoad,Walton-on-Thames,Surrey,KT121RZorelectronicallyatpumavct@davidvenus.com,ineachcasenotlessthan48hours(excludingweekendsandpublicholidays)beforethetimeappointedforholdingtheAnnualGeneralMeetingoradjournedmeetingatwhichthepersonnamedintheFormofProxyproposestovote.Inthecaseofapolltakenmorethan48hours(excludingweekendsandpublicholidays)afteritisdemanded,thedocument(s)mustbedeliveredasaforesaidnotlessthan24hours(excludingweekendsandpublicholidays)beforethetimeappointedfortakingthepoll,orwherethepollistakennotmorethan48hours(excludingweekendsandpublicholidays)afteritwasdemanded,bedeliveredatthemeetingatwhichthedemandismade.
(c) InordertorevokeaproxyinstructionamemberwillneedtoinformtheCompanyusingoneofthefollowingmethods:
• bysendingasignedhardcopynoticeclearlystatingtheintentiontorevoketheproxyappointmenttotheCompany’sregistrars,SLCRegistrars,42-50HershamRoad,Walton-on-Thames,Surrey,KT121RZ.Inthecaseofamemberwhichisacompany,therevocationnoticemustbeexecutedunderitscommonsealorsignedonitsbehalfbyanofficerofthecompanyoranattorneyforthecompany.Anypowerofattorneyoranyotherauthorityunderwhichtherevocationnoticeissigned(oradulycertifiedcopyofsuchpowerorauthority)mustbeincludedwiththerevocationnotice.
• bysendingane-mailtopumavct@davidvenus.com.
Ineithercase,therevocationnoticemustbereceivedbytheCompany’sregistrars,SLCRegistrars,42-50HershamRoad,Walton-on-Thames,Surrey,KT121RZbeforetheAnnualGeneralMeetingortheholdingofapollsubsequentlythereto.Ifamemberattemptstorevokehisorherproxyappointmentbuttherevocationisreceivedafterthetimespecifiedthen,subjecttoNote(d)directlybelow,theproxyappointmentwillremainvalid.
(d) CompletionandreturnofaFormofProxywillnotprecludeamemberoftheCompanyfromattendingandvotinginperson.IfamemberappointsaproxyandthatmemberattendstheAnnualGeneralMeetinginperson,theproxyappointmentwillautomaticallybeterminated.
(e) CopiesoftheDirectors’LettersofAppointmentandacopyofthecurrentArticlesofAssociationwillbeavailableforinspectionattheregisteredofficeoftheCompanyduringusualbusinesshoursonanyweekday(SaturdayandPublicHolidaysexcluded)fromthedateofthisnotice,untiltheendoftheAnnualGeneralMeetingandattheplaceoftheAnnualGeneralMeetingforatleast15minutespriortoandduringtheAnnualGeneralMeeting.
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Puma VCT 10 plc Annual report and accounts 2017
(f) PursuanttoRegulation41oftheUncertificatedSecuritiesRegulations2001,theCompanyhasspecifiedthatonlythoseholdersoftheCompany’ssharesregisteredontheRegisterofMembersoftheCompanyasat6.30pmon18August2017or,intheeventthattheAnnualGeneralMeetingisadjourned,ontheRegisterofMembers48hoursbeforethetimeofanyadjournedmeeting,shallbeentitledtoattendandvoteatthesaidAnnualGeneralMeetinginrespectofsuchsharesregisteredintheirnameattherelevanttime.ChangestoentriesontheRegisterofMembersafter6.30pmon18August2017or,intheeventthattheAnnualGeneralMeetingisadjourned,ontheRegisterofMemberslessthan48hoursbeforethetimeofanyadjournedmeeting,shallbedisregardedindeterminingtherightofanypersontoattendandvoteattheAnnualGeneralMeeting.
(g) Asat26July2017,theCompany’sissuedsharecapitalcomprised34,541,530OrdinaryShares.ThetotalnumberofvotingrightsintheCompanyasat26July2017is34,541,530.Thewebsitereferredtoabovewillincludeinformationonthenumberofsharesandvotingrights.
(h) Ifyouareapersonwhohasbeennominatedundersection146oftheCA2006toenjoyinformationrights(“NominatedPerson”):
• YoumayhavearightunderanagreementbetweenyouandthememberoftheCompanywhohasnominatedyoutohaveinformationrights(“RelevantMember”)tobeappointedortohavesomeoneelseappointedasaproxyfortheAnnualGeneralMeeting;
• Ifyoueitherdonothavesucharightorifyouhavesucharightbutdonotwishtoexerciseit,youmayhavearightunderanagreementbetweenyouandtheRelevantMembertogiveinstructionstotheRelevantMemberastotheexerciseofvotingrights;
• YourmainpointofcontactintermsofyourinvestmentintheCompanyremainstheRelevantMember(or,perhapsyourcustodianorbroker)andyoushouldcontinuetocontactthem(andnottheCompany)regardinganychangesorqueriesrelatingtoyourpersonaldetailsandyourinterestintheCompany(includinganyadministrativematters).TheonlyexceptiontothisiswheretheCompanyexpresslyrequestsaresponsefromyou.
(i) Acorporationwhichisamembercanappointoneormorecorporaterepresentativeswhomayexercise,onitsbehalf,allitspowersasamemberprovidedthatnomorethanonecorporaterepresentativeexercisespowersoverthesameshare.
(j) Avotewithheldisnotavoteinlaw,whichmeansthatthevotewillnotbecountedinthecalculationofvotesfororagainsttheresolution.Ifnovotingindicationisgiven,theproxywillvoteorabstainfromvotingathisorherdiscretion.Theproxywillvote(orabstainfromvoting)asheorshethinksfitinrelationtoanyothermatterwhichisputbeforetheAnnualGeneralMeeting.
(k) Exceptasprovidedabove,memberswhohavegeneralqueriesabouttheGeneralMeetingshouldcalltheCompany’sregistrarsSLCRegistrars,42-50HershamRoad,Walton-on-Thames,Surrey,KT121RZon01903706150(noothermethodsofcommunicationwillbeaccepted).
(l) MembersmaynotuseanyelectronicaddressprovidedeitherinthisnoticeofAnnualGeneralMeeting,oranyrelateddocuments(includingtheChairman’sletterandproxyform),tocommunicatewiththeCompanyforanypurposesotherthanthoseexpresslystated.
(m) Resolution2:InformationabouttheDirectorwhoisproposedbytheBoardforre-electionattheAnnualGeneralMeetingisshownintheAnnualReportandAccounts2017.
Explanation of Special BusinessExplanation of Resolution 6 to be proposed at the Annual General Meeting
Onpage42oftheReportisthenoticeofAnnualGeneralMeetingwhichwillbeheldon22August2017.SetoutbelowisabriefexplanationoftheresolutioncomprisingspecialbusinesstobeproposedattheAnnualGeneralMeeting.
IncertaincircumstancesitmaybeadvantageousfortheCompanytopurchaseitsownshares.Resolution6,whichwillbeproposedasaspecialresolution,wouldgivetheBoardauthorityfromshareholderstodoso.Suchauthoritywillexpireonthedateofthe2018AnnualGeneralMeetingor21November2018,whicheveristheearlier.TheDirectorsintendtoexercisethispoweronlyifandwhen,inthelightofmarketconditionsprevailingatthetime,theybelievethattheeffectofsuchpurchaseswouldbeinthebestinterestsoftheCompanyandshareholdersgenerally.Anysharespurchasedinthiswaywillbecancelled(inwhichcasethenumberofsharesinissuewillbeaccordinglyreduced).
Thisresolutionspecifiesthemaximumnumberofshareswhichmaybeacquired(beingapproximately14.99%oftheCompany’sissuedsharesasatthedateoftheresolution)andthemaximumandminimumpricesatwhichtheymaybebought.
Notice of Annual General Meeting continued
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Puma VCT 10 plc Annual report and accounts 2017
Company number 08714913Puma VCT 10 plc
ForuseattheAnnualGeneralMeetingofPumaVCT10plcconvenedfor22August2017at10.30a.m.atBondStreetHouse,14 CliffordStreet,LondonW1S4JU
I/We
(BLOCKCAPITALSPLEASE)
of
being(a)member(s)oftheCompanyherebyappointtheChairmanoftheMeeting(seeNote2)or
asmy/ourproxyandtoattendandvoteforme/usonmy/ourbehalfattheAnnualGeneralMeetingoftheCompanytobeheldon22 August2017andatanyadjournmentthereof.My/ourproxyistovoteasindicatedbelowinrespectoftheResolutionssetoutintheNoticeofAnnualGeneralMeeting(seeNote9).
Ifyouwishtoappointmultipleproxiespleaseseenote1over.
Pleasealsotickhereifyouareappointingmorethanoneproxy.
Ihaveindicatedwitha“X”howI/wewishmy/ourvotestobecastonthefollowingresolutions:
Ordinary Resolutions For Against Withheld
1 ToreceiveandadopttheReportandAccounts
2 Tore-electStephenHazell-Smith
3Tore-appointRSMUKAuditLLPasAuditorsandtoauthorisetheDirectorstodeterminetheirremuneration
4 ToapprovethepolicysetoutintheRemunerationReport
5 ToapprovetheimplementationreportsetoutintheRemunerationReport
Special Resolution
6 ToauthorisetheCompanytobuybackshares
Dated
Signedorsealed(seeNote6)
Form of Proxy
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Puma VCT 10 plc Annual report and accounts 2017
Notes:1. AnymemberoftheCompanyentitledtoattendandvoteattheAnnualGeneralMeetingisalsoentitledtoappointoneormore
proxiestoattend,speakandvoteinsteadofthatmember.AmembermayappointmorethenoneproxyinrelationtotheAnnualGeneralMeetingprovidedthateachproxyisappointedtoexercisetherightsattachedtoadifferentshareorsharesheldbythatmember.Aproxymaydemand,orjoinindemanding,apoll.AproxyneednotbeamemberoftheCompanybutmustattendtheAnnualGeneralMeetinginordertorepresenthisappointor.AmemberentitledtoattendandvoteattheAnnualGeneralMeetingmayappointtheChairmanoranotherpersonashisproxyalthoughtheChairmanwillnotspeakforthemember.Amemberwhowisheshisproxytospeakforhimshouldappointhisownchoiceofproxy(nottheChairman)andgiveinstructionsdirectlytothatperson.
2 Ifyouwishtoappointaproxyofyourownchoicedeletethewords“theChairmanoftheMeeting”andinsertthenameandaddressofthepersonwhomyouwishtoappointinthespaceprovided.
3. AnyalterationstotheFormofProxyshouldbeinitialled.
4. Tobevalid,aFormofProxyandthepowerofattorneyorotherwrittenauthority,ifany,underwhichitissignedoranofficeornotariallycertifiedcopyoracopycertifiedinaccordancewiththePowersofAttorneyAct1971ofsuchpowerandwrittenauthority,mustbedeliveredtoSLCRegistrars,42-50HershamRoad,Walton-on-Thames,Surrey,KT121RZorelectronicallyatpumavct@davidvenus.com,ineachcasenotlessthan48hours(excludingweekendsandpublicholidays)beforethetimeappointedforholdingtheAnnualGeneralMeetingoradjournedmeetingatwhichthepersonnamedintheFormofProxyproposestovote.Inthecaseofapolltakenmorethan48hours(excludingweekendsandpublicholidays)afteritisdemanded,thedocument(s)mustbedeliveredasaforesaidnotlessthan24hours(excludingweekendsandpublicholidays)beforethetimeappointedfortakingthepoll,orwherethepollistakennotmorethan48hours(excludingweekendsandpublicholidays)afteritwasdemanded,bedeliveredatthemeetingatwhichthedemandismade.
5. InordertorevokeaproxyinstructionamemberwillneedtoinformtheCompanyusingoneofthefollowingmethods:
• bysendingasignedhardcopynoticeclearlystatingtheintentiontorevoketheproxyappointmenttoSLCRegistrars,42-50HershamRoad,Walton-on-Thames,Surrey,KT121RZ.Inthecaseofamemberwhichisacompany,therevocationnoticemustbeexecutedunderitscommonsealorsignedonitsbehalfbyanofficerofthecompanyoranattorneyforthecompany.Anypowerofattorneyoranyotherauthorityunderwhichtherevocationnoticeissigned(oradulycertifiedcopyofsuchpowerorauthority)mustbeincludedwiththerevocationnotice.
• bysendingane-mailtopumavct@davidvenus.com.
Ineithercase,therevocationnoticemustbereceivedbySLCRegistrars,42-50HershamRoad,Walton-on-Thames,Surrey,KT121RZbeforetheAnnualGeneralMeetingortheholdingofapollsubsequentlythereto.Ifamemberattemptstorevokehisorherproxyappointmentbuttherevocationisreceivedafterthetimespecifiedthen,subjecttoNote8below,theproxyappointmentwillremainvalid.
6. Inthecaseofacorporation,thisformmustbeexecutedunderitscommonsealorsignedonitsbehalfbyitsattorneyoradulyauthorisedofficerofthecorporation.
7. Inthecaseofjointshareholders,anyoneofthemmaysign.Thevoteofthepersonwhosenamestandsfirstintheregisterofmemberswillbeacceptedtotheexclusionofthevotesoftheotherjointholders.
8. CompletionandreturnofaFormofProxywillnotprecludeamemberoftheCompanyfromattendingandvotinginperson.IfamemberappointsaproxyandthatmemberattendstheAnnualGeneralMeetinginperson,theproxyappointmentwillautomaticallybeterminated.
9. Avotewithheldisnotavoteinlaw,whichmeansthatthevotewillnotbecountedinthecalculationofvotesfororagainsttheresolution.Ifnovotingindicationisgiven,theproxywillvoteorabstainfromvotingathisorherdiscretion.Theproxywillvote(orabstainfromvoting)asheorshethinksfitinrelationtoanyothermatterwhichisputbeforetheAnnualGeneralMeeting.
47
Puma VCT 10 plc Annual report and accounts 2017
48
Puma VCT 10 plc Annual report and accounts 2017
Investment Manager 14 Clifford Street London, W1S 4JU
Adviser Enquiries: 020 7408 4070Investor Enquiries: 020 7408 4100
info@pumainvestments.co.ukwww.pumainvestments.co.uk
Puma Investments is a trading name of Puma Investment Management Limited which is authorised and regulated by the Financial Conduct Authority. FCA Number 590919
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