TIDMAAIG
Albion Income & Growth VCT PLC
As required by the UK Listing Authority's Disclosure and Transparency Rule 4.2,
Albion Income & Growth VCT PLC today makes public its information relating to
the Half-yearly Financial Report (which is unaudited) for the six months to 31
March 2012. This announcement was approved by the Board of Directors on 18 May
2012.
The full Half-yearly Financial Report (which is unaudited) for the period to 31
March 2012, will shortly be sent to shareholders. Copies of the full Half-yearly
Financial Report will be shown via the Albion Ventures LLP website www.albion-
ventures.co.uk under the "Our Funds" section by clicking Albion Income & Growth
VCT PLC.
Investment objectives
The Company aims to provide investors with a regular and predictable source of
income combined with the prospect of long term capital growth. The Company
allows investors the opportunity to participate in a balanced portfolio of high
growth businesses and lower risk, asset-based companies. It is intended that in
time the Company's investment portfolio will be split approximately as follows:
* 45 per cent. to be invested in unquoted higher growth businesses, including
early stage technology;
* 45 per cent. to be invested in unquoted asset-based businesses in the
leisure sector; and
* 10 per cent. to be held in cash and other liquid securities.
Financial calendar
Record date for second dividend 1 June 2012
Payment date for second dividend 29 June 2012
Financial year end 30 September 2012
Financial highlights (unaudited)
Unaudited Unaudited Audited
six months ended six months ended year ended
31 March 2012 31 March 2011 30 September 2011
(pence per share) (pence per share) (pence per share)
Net asset value per 66.00 66.80 64.20
share
Dividends paid per share 1.75 1.75 3.50
Revenue return per 0.70 0.50 1.20
share
Capital return/(loss) 2.70 0.20 (1.60)
per share
Total shareholder net asset value return to 31 March 2012
(pence per share)
Total dividends paid during the period ended 30 September 0.65
2005 (i)
Total dividends paid during the year 30 September 2006 2.60
ended :
30 September 2007 3.45
30 September 2008 3.50
30 September 2009 3.00
30 September 2010 3.00
30 September 2011 3.50
Total dividends paid during the six months ended 31 March 1.75
2012
------------------
Total dividends paid to 31 March 2012 21.45
Net asset value as at 31 March 2012 66.00
------------------
Total shareholder net asset value return to 31 March 2012 87.45
------------------
In addition to the dividends summarised above, the Board has declared a second
dividend for the year to 30 September 2012 of 1.75 pence per share to be paid on
29 June 2012 to shareholders on the register as at 1 June 2012.
Notes
i. Investors subscribing by 31 December 2004 and remaining on the register on
1 July 2005 were entitled to a dividend of 0.65 pence per share. Investors
subscribing thereafter were not entitled to the first interim dividend.
ii. These figures exclude tax benefits upon subscription of 40 per cent. income
tax relief.
iii. All dividends paid by the Company are free of income tax. It is an HM
Revenue & Customs requirement that dividend vouchers indicate the tax
element should dividends have been subject to income tax. Investors should
ignore this figure on their dividend voucher and need not disclose any
income they receive from a VCT on their tax return.
iv. The net asset value of the Company is not its share price as quoted on the
official list of the London Stock Exchange. The share price of the Company
can be found in the Investment Companies - VCTs section of the Financial
Times on a daily basis. Investors are reminded that it is common for shares
in VCTs to trade at a discount to their net asset value, partly as a result
of the initial tax reliefs which are non-transferable.
Interim management report
Overview
The six months to 31 March 2012 showed an encouraging positive total return of
3.4 pence per share. Total income increased by 23 per cent. against the same
period last year, while the investment portfolio as a whole returned to growth
showing an increase of more than GBP1.1 million.
Investment performance and progress
During the period, some GBP2.8 million was invested in new and existing investee
companies. Of this, GBP740,000 was in renewable energy businesses, bringing our
total exposure to the sector to 10 per cent. of the portfolio, compared to our
longer term target of 15 per cent. In addition, we invested GBP280,000 in the
management buy-out of Hilson Moran, a mechanical and engineering consultancy.
The balance of our investments supported existing portfolio companies, including
GBP1.1 million on the restructuring of Helveta and AMS Sciences (formerly
Xceleron).
A particularly good performance was seen by Lowcosttravelgroup, which saw
significant growth in bookings against the background of a difficult market. The
continued strong performance of our cinemas resulted in an increase in third
party valuations, while Radnor House School, whose pupil numbers are now at
twice the budgeted level and which was recently rated as "excellent" in its
first Ofsted report, also showed a sharp increase in valuation. Against this, a
partial provision was made against memsstar, following a slowdown in its market,
while we continued to take a cautious view of AMS Sciences (formerly Xceleron)
following its restructuring at the end of 2011.
Set out at the bottom of this announcement is the sector diversification of the
portfolio of our investments as at 31 March 2012.
Risks and uncertainties
The outlook for the UK and global economies continues to be the key risk
affecting your Company, with both the UK and much of continental Europe
returning to recession. Nevertheless, your Company continues to try and mitigate
investment risks by ensuring that the Company has a diversified portfolio of
investments with good business models that can survive and potentially flourish
despite poor economic indicators.
Share buy-backs and share price discount
It remains the Company's policy to buy back shares in the market subject to the
overall constraint that such purchases are in the Company's interest. This
includes the maintenance of sufficient resources for investment in new and
existing investee companies and in continued payment of dividends to
shareholders. It is the Board's intention for such buy-backs to be in the region
of 10 to 15 per cent. discount to net asset value, so far as market conditions
and liquidity permit. For the period to 30 September 2012, such purchases will
be limited to GBP300,000.
Albion VCTs Linked Top Up Offer 2011/2012
The second top up offer across seven of the VCTs managed by Albion Ventures LLP
raised a total of GBP10 million, of which Albion Income & Growth VCT's share was
GBP1.5 million. The proceeds will be used to provide further resources at a time
when a number of good investment opportunities are being seen, particularly in
building up a renewable energy portfolio.
Results and dividends
As at 31 March 2012, the net asset value of the Company was GBP27.6 million
compared to GBP28.0 million as at 31 March 2011. The revenue return before
taxation was GBP387,000 compared to GBP282,000 for the 6 months to 31 March 2011.
The Company will pay a second dividend for the financial year to 30 September
2012 of 1.75 pence per share on 29 June 2012 to shareholders on the register on
1 June 2012.
Board changes
Recognising the importance of controlling costs the Board has concluded that it
will be able to operate in the future with four members. John Kerr has agreed to
stand down at the year end and will be replaced as chairman of the Audit
Committee by Robin Archibald. The Board thanks John for his excellent service to
the Company since his appointment in 2004.
Outlook
I am encouraged by the increase in investment portfolio valuations and also by
the rise in income being generated from those investments. Despite the
prevailing broader economic issues, a number of our investee companies are well
placed to show good growth both in domestic and international markets. We
therefore remain positive on the Company's prospects over the medium term.
Mary Anne Cordeiro
Director
18 May 2012
Responsibility statement
The Directors, Friedrich Ternofsky, Robin Archibald, Mary Anne Cordeiro, John
Kerr and Patrick Reeve, are responsible for preparing the Half-yearly Financial
Report. The Directors have chosen to prepare this Half-yearly Financial Report
for the Company in accordance with United Kingdom Generally Accepted Accounting
Practice ("UK GAAP").
In preparing these summarised financial statements for the period to 31 March
2012, we the Directors of the Company, confirm that to the best of our
knowledge:
(a) the summarised set of financial statements has been prepared in accordance
with the pronouncement on interim reporting issued by the Accounting Standards
Board;
(b) the interim management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events during the first six
months and description of principal risks and uncertainties for the remaining
six months of the year);
(c) the summarised set of financial statements gives a true and fair view in
accordance with UK GAAP of the assets, liabilities, financial position and
profit and loss of the Company for the six months ended 31 March 2012 and comply
with UK GAAP and Companies Act 2006 and;
(d) the interim management report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related parties' transactions and changes
therein).
The accounting policies applied to the Half-yearly Financial Report have been
consistently applied in current and prior periods and are those applied in the
Annual Report and Financial Statements for the year ended 30 September 2011.
This Half-yearly Financial Report has not been audited or reviewed by the
Auditor.
By order of the Board
Mary Anne Cordeiro
Director
18 May 2012
Portfolio of investments
The following is a summary of fixed asset investments as at 31 March 2012:
+----------------------+----------+------+--------------+---------+ +----------+
|Qualifying investments| % voting| Cost| Cumulative| Total| | Change in|
|Asset-based unquoted | rights| GBP'000| movement| value| | value for|
| investments | held by| | in value| GBP'000| | the|
| | Albion| | GBP'000| | | period*|
| | Income &| | | | | GBP'000|
| |Growth VCT| | | | | |
| | PLC| | | | | |
+----------------------+----------+------+--------------+---------+ +----------+
| | | | | | | |
| | | | | | | |
|The Weybridge Club | 18.5| 3,000| (604)| 2,396| | 32|
|Limited | | | | | | |
| | | | | | | |
|Kensington Health | 12.0| 3,044| (945)| 2,099| | (38)|
|Clubs Limited | | | | | | |
| | | | | | | |
|The Charnwood Pub | 10.3| 2,748| (1,404)| 1,344| | (10)|
|Company Limited | | | | | | |
| | | | | | | |
|CS (Brixton) Limited | 16.7| 713| 540| 1,253| | 215|
| | | | | | | |
|Tower Bridge Health | 17.2| 963| 231| 1,194| | 67|
|Clubs Limited | | | | | | |
| | | | | | | |
|Bravo Inns II Limited | 8.5| 1,160| (43)| 1,117| | 42|
| | | | | | | |
|Radnor House School | 4.2| 734| 220| 954| | 199|
|(Holdings) Limited | | | | | | |
| | | | | | | |
|Bravo Inns Limited | 12.7| 1,130| (417)| 713| | 13|
| | | | | | | |
|Orchard Portman | 7.9| 520| 1| 521| | -|
|Hospital Limited | | | | | | |
| | | | | | | |
|CS (Norwich) Limited | 20.0| 320| 79| 399| | 65|
| | | | | | | |
|The Street by Street | 3.6| 357| 2| 359| | 3|
|Solar Programme | | | | | | |
|Limited | | | | | | |
| | | | | | | |
|Regenerco Renewable | 2.5| 312| 2| 314| | 2|
|Energy Limited | | | | | | |
| | | | | | | |
|Alto Prodotto Wind | 3.0| 269| -| 269| | (1)|
|Limited | | | | | | |
| | | | | | | |
|CS (Exeter) Limited | 16.6| 271| (37)| 234| | 37|
| | | | | | | |
|Premier Leisure | 13.6| 1,000| (775)| 225| | (13)|
|(Suffolk) Limited | | | | | | |
| | | | | | | |
|Nelson House Hospital | 2.5| 218| 1| 219| | 1|
|Limited | | | | | | |
| | | | | | | |
|TEG Biogas (Perth) | 3.0| 182| 2| 184| | -|
|Limited | | | | | | |
| | | | | | | |
|The Dunedin Pub | 15.4| 162| (6)| 156| | (1)|
|Company VCT Limited | | | | | | |
| | | | | | | |
|AVESI Limited | 1.0| 113| -| 113| | -|
| | | | | | | |
|GB Pub Company VCT | 16.6| 594| (527)| 67| | (46)|
|Limited | | | | | | |
| | | | | | | |
|Greenenerco Limited | 1.7| 60| -| 60| | -|
+----------------------+----------+------+--------------+---------+ +----------+
|Total asset-based | |17,870| (3,680)| 14,190| | 567|
|unquoted investments | | | | | | |
+----------------------+----------+------+--------------+---------+ +----------+
|Qualifying investments| % voting| Cost| Cumulative| Total| | Change in|
|High growth unquoted | rights| GBP'000| movement| value| | value for|
|investments | held by| | in value| GBP'000| | the|
| | Albion| | GBP'000| | | period*|
| | Income &| | | | | GBP'000|
| |Growth VCT| | | | | |
| | PLC| | | | | |
+----------------------+----------+------+--------------+---------+ +----------+
| | | | | | | |
| | | | | | | |
|Blackbay Limited | 15.0| 1,616| 648| 2,264| | 65|
| | | | | | | |
|Lowcosttravelgroup | 12.0| 1,560| 516| 2,076| | 1,192|
|Limited | | | | | | |
| | | | | | | |
|AMS Sciences Limited | 23.9| 2,988| (1,884)| 1,104| | (236)|
|(formerly Xceleron | | | | | | |
|Limited) | | | | | | |
| | | | | | | |
|Helveta Limited | 10.3| 1,724| (660)| 1,064| | (90)|
| | | | | | | |
|Mi-Pay Limited | 11.9| 1,486| (479)| 1,007| | (55)|
| | | | | | | |
|Process Systems | 5.3| 545| 166| 711| | (2)|
|Enterprise Limited | | | | | | |
| | | | | | | |
|Rostima Holdings | 13.6| 268| 343| 611| | 13|
|Limited | | | | | | |
| | | | | | | |
|memsstar Limited | 8.2| 572| (56)| 516| | (123)|
| | | | | | | |
|Oxsensis Limited | 5.7| 839| (415)| 424| | (89)|
| | | | | | | |
|Chichester Holdings | 15.2| 1,699| (1,289)| 410| | 70|
|Limited | | | | | | |
| | | | | | | |
|Opta Sports Data | 2.7| 341| 20| 361| | 45|
|Limited | | | | | | |
| | | | | | | |
|Palm Tree Technology | 0.5| 235| 47| 282| | -|
|Limited | | | | | | |
| | | | | | | |
|Hilson Moran Holdings | 3.5| 270| 6| 276| | 6|
|Limited | | | | | | |
| | | | | | | |
|Masters | 1.0| 202| (9)| 193| | 12|
|Pharmaceuticals | | | | | | |
|Limited | | | | | | |
| | | | | | | |
|Prime Care Holdings | 3.8| 228| (42)| 186| | -|
|Limited | | | | | | |
| | | | | | | |
|Mirada Medical Limited| 3.7| 85| 99| 184| | 14|
| | | | | | | |
|DySIS Medical Limited | 1.3| 211| (94)| 117| | (61)|
| | | | | | | |
|Abcodia Limited | 1.0| 35| -| 35| | -|
+----------------------+----------+------+--------------+---------+ +----------+
|Total high growth | |14,904| (3,083)| 11,821| | 761|
|unquoted investments | | | | | | |
+----------------------+----------+------+--------------+---------+ +----------+
| | | | | | | |
+----------------------+----------+------+--------------+---------+ +----------+
|Total qualifying fixed| |32,774| (6,763)| 26,011| | 1,328|
|asset investments | | | | | | |
+----------------------+----------+------+--------------+---------+ +----------+
+------------------+-------------+-----+-----------------+-----+ +-------------+
|Non-qualifying | % voting| Cost| Cumulative|Value| | Change in|
|investments | rights held| GBP'000| movement| GBP'000| |value for the|
| | by Albion| | in value| | | period*|
| | Income &| | GBP'000| | | GBP'000|
| | Growth VCT| | | | | |
| | PLC| | | | | |
+------------------+-------------+-----+-----------------+-----+ +-------------+
|Rostima Holdings | n/a| 121| -| 121| | -|
|Limited | | | | | | |
| | | | | | | |
|Evolutions Group | 30.3| 377| (290)| 87| | -|
|Limited | | | | | | |
| | | | | | | |
|Evolutions | n/a| 30| -| 30| | -|
|Television Limited| | | | | | |
+------------------+-------------+-----+-----------------+-----+ +-------------+
|Total non- | | 528| (290)| 238| | -|
|qualifying fixed | | | | | | |
|asset investments | | | | | | |
+------------------+-------------+-----+-----------------+-----+ +-------------+
* as adjusted for additions and disposals during the period
Summary income statement
+---------------+----+---------------------+---------------------+----------------------+
| | | Unaudited | Unaudited | Audited |
| | | six months ended | six months ended | year ended |
| | | 31 March 2012 | 31 March 2011 | 30 September 2011 |
+---------------+----+-------+-------+-----+-------+-------+-----+-------+-------+------+
| |Note|Revenue|Capital|Total|Revenue|Capital|Total|Revenue|Capital| Total|
| | | GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000|
+---------------+----+-------+-------+-----+-------+-------+-----+-------+-------+------+
|Gains/(losses) | 3| -| 1,323|1,323| -| 257| 257| -| (294)| (294)|
|on investments | | | | | | | | | | |
| | | | | | | | | | | |
|Investment | 4| 596| -| 596| 483| -| 483| 1,049| -| 1,049|
|income | | | | | | | | | | |
| | | | | | | | | | | |
|Investment | | (85)| (255)|(340)| (88)| (264)|(352)| (172)| (518)| (690)|
|management fees| | | | | | | | | | |
| | | | | | | | | | | |
|Other expenses | | (124)| -|(124)| (113)| -|(113)| (214)| -| (214)|
| +----+-------+-------+-----+-------+-------+-----+-------+-------+------+
|Return/(loss) | | 387| 1,068|1,455| 282| (7)| 275| 663| (812)| (149)|
|on ordinary | | | | | | | | | | |
|activities | | | | | | | | | | |
|before tax | | | | | | | | | | |
| | | | | | | | | | | |
|Tax | | (95)| 69| (26)| (64)| 67| 3| (155)| 136| (19)|
|(charge)/credit| | | | | | | | | | |
|on ordinary | | | | | | | | | | |
|activities | | | | | | | | | | |
| +----+-------+-------+-----+-------+-------+-----+-------+-------+------+
|Return/(loss) | | 292| 1,137|1,429| 218| 60| 278| 508| (676)| (168)|
|attributable to| | | | | | | | | | |
|shareholders | | | | | | | | | | |
+---------------+----+-------+-------+-----+-------+-------+-----+-------+-------+------+
|Basic and | 6| 0.70| 2.70| 3.40| 0.50| 0.20| 0.70| 1.20| (1.60)|(0.40)|
|diluted | | | | | | | | | | |
|return/(loss) | | | | | | | | | | |
|per share | | | | | | | | | | |
|(pence)* | | | | | | | | | | |
+---------------+----+-------+-------+-----+-------+-------+-----+-------+-------+------+
*excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly Financial
Report for the six months ended 31 March 2011 and the audited statutory accounts
for the year ended 30 September 2011.
The accompanying notes form an integral part of this Half-yearly Financial
Report.
The total column of this Summary income statement represents the profit and loss
account of the Company. The supplementary revenue and capital columns have been
prepared in accordance with the Association of Investment Companies' Statement
of Recommended Practice.
All revenue and capital items in the above statement derive from continuing
operations.
There are no recognised gains or losses other than the results for the periods
disclosed above. Accordingly a Statement of total recognised gains and losses is
not required. The difference between the reported return/(loss) on ordinary
activities before tax and the historical profit/(loss) is due to the fair value
movements on investments. As a result a note on historical cost profit and
losses has not been prepared.
Summary balance sheet
+---------------------------+----+-------------+-------------+-----------------+
| |Note| Unaudited| Unaudited| Audited|
| | |31 March 2012|31 March 2011|30 September 2011|
| | | GBP'000| GBP'000| GBP'000|
+---------------------------+----+-------------+-------------+-----------------+
|Fixed asset investments | | | | |
| | | | | |
|Qualifying | | 26,011| 24,484| 22,391|
| | | | | |
|Non-qualifying | | 238| 1,559| 1,933|
| | +-------------+-------------+-----------------+
|Total fixed asset | | 26,249| 26,043| 24,324|
|investments | | | | |
| | | | | |
| | | | | |
| | | | | |
|Current assets | | | | |
| | | | | |
|Trade and other debtors | | 121| 175| 18|
| | | | | |
|Current asset investments | | 179| -| 469|
| | | | | |
|Cash at bank and in hand |9 | 1,379| 2,184| 2,176|
| | +-------------+-------------+-----------------+
| | | 1,679| 2,359| 2,663|
| | | | | |
| | | | | |
| | | | | |
|Creditors: amounts falling | | (365)| (355)| (267)|
|due within one year | | | | |
| | +-------------+-------------+-----------------+
| | | | | |
| | | | | |
|Net current assets | | 1,314| 2,004| 2,396|
| | +-------------+-------------+-----------------+
| | | | | |
| | +-------------+-------------+-----------------+
|Net assets | | 27,563| 28,047| 26,720|
| | +-------------+-------------+-----------------+
| | | | | |
| | | | | |
|Capital and reserves | | | | |
| | | | | |
|Called up share capital |7 | 463| 22,962| 23,108|
| | | | | |
|Share premium | | 402| 330| 455|
| | | | | |
|Capital redemption reserve | | 5| 752| 963|
| | | | | |
|Unrealised capital reserve | | (7,352)| (8,397)| (8,476)|
| | | | | |
|Special reserve | | 38,152| 19,316| 14,366|
| | | | | |
|Treasury shares reserve | | (3,154)| (2,788)| (3,167)|
| | | | | |
|Realised capital reserve | | (1,414)| (4,189)| (1,427)|
| | | | | |
|Revenue reserve | | 461| 61| 898|
| | +-------------+-------------+-----------------+
|Total equity shareholders' | | 27,563| 28,047| 26,720|
|funds | | | | |
| | +-------------+-------------+-----------------+
| | | | | |
| | | | | |
|Net asset value per share | | 66.00| 66.80| 64.20|
|(pence)* | | | | |
+---------------------------+----+-------------+-------------+-----------------+
*excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly Financial
Report for the six months ended 31 March 2011 and the audited statutory accounts
for the year ended 30 September 2011.
The accompanying notes form an integral part of this Half-yearly Financial
Report.
These financial statements were approved by the Board of Directors, and
authorised for issue on 18 May 2012 and were signed on its behalf by
Mary Anne Cordeiro
Director
Company number: 5132495
Summary reconciliation of movements in shareholders' funds
+-------------+--------+-------+----------+----------+--------+--------+--------+--------+-------+
| | Called| Share| Capital|Unrealised| Special|Treasury|Realised| Revenue| Total|
| |up share|premium|redemption| capital|reserve*| shares| capital|reserve*| |
| | capital| | reserve| reserve*| |reserve*|reserve*| | |
| | | | | | | | | | |
| | GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000|
+-------------+--------+-------+----------+----------+--------+--------+--------+--------+-------+
|As at 1 | 23,108| 455| 963| (8,476)| 14,366| (3,167)| (1,427)| 898| 26,720|
| October | | | | | | | | | |
|2011 | | | | | | | | | |
|(audited) | | | | | | | | | |
| | | | | | | | | | |
|Return/(loss)| -| -| -| 1,276| -| -| (139)| 292| 1,429|
|for the | | | | | | | | | |
|period | | | | | | | | | |
| | | | | | | | | | |
|Transfer of | -| -| -| (152)| -| -| 152| -| -|
|previously | | | | | | | | | |
|unrealised | | | | | | | | | |
|gains on | | | | | | | | | |
|disposal of | | | | | | | | | |
|investments | | | | | | | | | |
| | | | | | | | | | |
|Reduction in |(22,604)| -| -| -| 22,604| -| -| -| -|
|share | | | | | | | | | |
|capital** | | | | | | | | | |
| | | | | | | | | | |
|Cancellation | -| (539)| (1,344)| -| 1,883| -| -| -| -|
|of capital | | | | | | | | | |
|redemption | | | | | | | | | |
|and share | | | | | | | | | |
|premium | | | | | | | | | |
|reserves** | | | | | | | | | |
| | | | | | | | | | |
|Dividends | -| -| -| -| -| -| -| (729)| (729)|
|paid | | | | | | | | | |
| | | | | | | | | | |
|Purchase of | (373)| -| 373| -| (688)| -| -| -| (688)|
|own shares | | | | | | | | | |
|for | | | | | | | | | |
|cancellation | | | | | | | | | |
| | | | | | | | | | |
|Cancellation | (13)| -| 13| -| (13)| 13| -| -| -|
|of treasury | | | | | | | | | |
|shares | | | | | | | | | |
| | | | | | | | | | |
|Issue of | 345| 486| -| -| -| -| -| -| 831|
|equity (net | | | | | | | | | |
|of costs) | | | | | | | | | |
+-------------+--------+-------+----------+----------+--------+--------+--------+--------+-------+
|As at 31 | 463| 402| 5| (7,352)| 38,152| (3,154)| (1,414)| 461| 27,563|
|March 2012 | | | | | | | | | |
|(unaudited) | | | | | | | | | |
+-------------+--------+-------+----------+----------+--------+--------+--------+--------+-------+
+-------------+--------+-------+----------+----------+--------+--------+--------+--------+-------+
|As at 1 | 22,306| 12| 460| (8,524)| 19,668| (2,788)| (3,939)| 390| 27,585|
| October | | | | | | | | | |
|2010 | | | | | | | | | |
|(audited) | | | | | | | | | |
| | | | | | | | | | |
|(Loss)/return| -| -| -| (172)| -| -| 232| 218| 278|
|for the | | | | | | | | | |
|period | | | | | | | | | |
| | | | | | | | | | |
|Transfer of | -| -| -| 299| -| -| (299)| -| -|
|previously | | | | | | | | | |
|unrealised | | | | | | | | | |
|losses on | | | | | | | | | |
|disposal of | | | | | | | | | |
|investments | | | | | | | | | |
| | | | | | | | | | |
|Dividends | -| -| -| -| -| -| (181)| (547)| (728)|
|paid | | | | | | | | | |
| | | | | | | | | | |
|Purchase of | (292)| -| 292| -| (352)| -| -| -| (352)|
|own shares | | | | | | | | | |
|for | | | | | | | | | |
|cancellation | | | | | | | | | |
| | | | | | | | | | |
|Issue of | 948| 318| -| -| -| -| -| -| 1,266|
|equity (net | | | | | | | | | |
|of costs) | | | | | | | | | |
+-------------+--------+-------+----------+----------+--------+--------+--------+--------+-------+
|As at 31 | 22,962| 330| 752| (8,397)| 19,316| (2,788)| (4,189)| 61| 28,047|
|March 2011 | | | | | | | | | |
|(unaudited) | | | | | | | | | |
+-------------+--------+-------+----------+----------+--------+--------+--------+--------+-------+
+-------------+--------+-------+----------+----------+--------+--------+--------+--------+-------+
|As at 1 | 22,306| 12| 460| (8,524)| 19,668| (2,788)| (3,939)| 390| 27,585|
|October 2010 | | | | | | | | | |
|(audited) | | | | | | | | | |
| | | | | | | | | | |
|(Loss)/return| -| -| -| (1,347)| -| -| 670| 508| (169)|
|for the | | | | | | | | | |
|period | | | | | | | | | |
| | | | | | | | | | |
|Transfer of | -| -| -| 1,395| -| -| (1,395)| -| -|
|previously | | | | | | | | | |
|unrealised | | | | | | | | | |
|losses on | | | | | | | | | |
|disposal of | | | | | | | | | |
|investments | | | | | | | | | |
| | | | | | | | | | |
|Dividends | -| -| -| -| -| -| (181)| (1,291)|(1,472)|
|paid | | | | | | | | | |
| | | | | | | | | | |
|Purchase of | (503)| -| 503| -| (593)| -| -| -| (593)|
|own shares | | | | | | | | | |
|for | | | | | | | | | |
|cancellation | | | | | | | | | |
| | | | | | | | | | |
|Purchase of | -| -| -| -| -| (379)| -| -| (379)|
|own treasury | | | | | | | | | |
|shares | | | | | | | | | |
| | | | | | | | | | |
|Issue of | 1,305| 443| -| -| -| -| -| -| 1,748|
|equity (net | | | | | | | | | |
|of costs) | | | | | | | | | |
| | | | | | | | | | |
|Transfer from| -| -| -| -| (1,291)| -| -| 1,291| -|
|special | | | | | | | | | |
|reserve to | | | | | | | | | |
|revenue | | | | | | | | | |
|reserve | | | | | | | | | |
| | | | | | | | | | |
|Transfer from| -| -| -| -| (3,418)| -| 3,418| -| -|
|special | | | | | | | | | |
|reserve to | | | | | | | | | |
|realised | | | | | | | | | |
|capital | | | | | | | | | |
|reserve | | | | | | | | | |
+-------------+--------+-------+----------+----------+--------+--------+--------+--------+-------+
|As at 30 | 23,108| 455| 963| (8,476)| 14,366| (3,167)| (1,427)| 898| 26,720|
|September | | | | | | | | | |
|2011 | | | | | | | | | |
|(audited) | | | | | | | | | |
+-------------+--------+-------+----------+----------+--------+--------+--------+--------+-------+
*Included within these reserves is an amount of GBP26,693,000 (31 March 2011:
GBP4,003,000; 30 September 2011: GBP2,194,000) which is considered distributable.
The special reserve has been treated as distributable in determining the amounts
available for distribution.
** The reduction in the nominal value of shares from 50 pence to 1 penny, the
cancellation of the capital redemption and share premium reserves (as approved
by shareholders at the Annual General Meeting held on 6 February 2012 and by
order of the Court dated 22 February 2012) has increased the value of the
existing special reserve which is distributable.
Summary cash flow statement
+----------------------+----+----------------+----------------+----------------+
| |Note| Unaudited| Unaudited| Audited|
| | |six months ended|six months ended| year ended 30 |
| | | 31 March 2012| 31 March 2011| September 2011|
| | | GBP'000| GBP'000| GBP'000|
+----------------------+----+----------------+----------------+----------------+
|Operating activities | | | | |
| | | | | |
|Investment income | | 531| 395| 1,064|
|received | | | | |
| | | | | |
|Deposit interest | | 13| 14| 25|
|received | | | | |
| | | | | |
|Investment management | | (347)| (335)| (692)|
|fees paid | | | | |
| | | | | |
|Administrative | | (109)| (115)| (229)|
|expenses paid | | | | |
| | +----------------+----------------+----------------+
|Net cash flow from | 8| 88| (41)| 168|
|operating activities | | | | |
| | | | | |
| | | | | |
| | | | | |
|Taxation | | | | |
| | | | | |
|UK corporation tax | | 11| 44| (13)|
|received/(paid) | | | | |
| | | | | |
| | | | | |
| | | | | |
|Capital expenditure | | | | |
|and financial | | | | |
|investments | | | | |
| | | | | |
|Purchase of fixed | | (2,794)| (971)| (1,762)|
|asset investments | | | | |
| | | | | |
|Disposal of fixed | | 2,431| 620| 2,086|
|asset investments | | | | |
| | +----------------+----------------+----------------+
|Net cash flow from | | (363)| (351)| 324|
|investing activities | | | | |
| | | | | |
| | | | | |
| | | | | |
|Equity dividends paid | | | | |
| | | | | |
|Dividends paid (net of| | (683)| (694)| (1,395)|
|cost of shares issued | | | | |
|under the dividend | | | | |
|reinvestment scheme) | | | | |
| | | | | |
| | | | | |
| | +----------------+----------------+----------------+
|Net cash flow before | | (947)| (1,042)| (916)|
|financing | | | | |
| | +----------------+----------------+----------------+
| | | | | |
| | | | | |
|Financing | | | | |
| | | | | |
|Issue of own shares | | 787| 1,210| 1,671|
| | | | | |
|Purchase of shares for| | (637)| (352)| (947)|
|cancellation | | | | |
| | +----------------+----------------+----------------+
|Net cash flow from | | 150| 858| 724|
|financing | | | | |
| | +----------------+----------------+----------------+
| | | | | |
| | | | | |
|Cash flow in the | 9| (797)| (184)| (192)|
|period | | | | |
+----------------------+----+----------------+----------------+----------------+
Notes to the unaudited summarised financial statements
1. Accounting convention
The Financial Statements have been prepared in accordance with the historical
cost convention, modified to include the revaluation of investments, in
accordance with applicable United Kingdom law and accounting standards and with
the Statement of Recommended Practice "Financial Statements of Investment Trust
Companies and Venture Capital Trusts" ("SORP") issued by the Association of
Investment Companies ("AIC") in January 2009. Accounting policies have been
applied consistently in current and prior periods.
2. Accounting policies
Fixed and current asset investments
Quoted and unquoted equity investments, debt issued at a discount and
convertible bonds
In accordance with FRS 26 "Financial Instruments Recognition and Measurement",
quoted and unquoted equity, debt issued at a discount and convertible bonds are
designated as fair value through profit or loss ("FVTPL"). Investments listed
on recognised exchanges are valued at the closing bid prices at the end of the
accounting period. Unquoted investments' fair value is determined by the
Directors in accordance with the September 2009 International Private Equity and
Venture Capital Valuation Guidelines (IPEVCV guidelines).
Desk-top reviews are carried out by independent RICS qualified surveyors by
updating previously prepared full valuations for current trading and market
indices. Full valuations are prepared by similarly qualified surveyors but in
full compliance with the RICS Red Book.
Fair value movements on equity investments and gains and losses arising on the
disposal of investments are reflected in the capital column of the Income
statement in accordance with the AIC SORP and realised gains or losses on the
sale of investments will be reflected in the realised capital reserve, and
unrealised gains or losses arising from the revaluation of investments will be
reflected in the unrealised capital reserve.
Warrants and unquoted equity derived instruments
Warrants and unquoted equity derived instruments are only valued if their
exercise or contractual conversion terms would allow them to be exercised or
converted as at the balance sheet date, and if there is additional value to the
Company in exercising or converting as at the balance sheet date. Otherwise
these instruments are held at nil value. The valuation techniques used are those
used for the underlying equity investment.
Unquoted loan stock
Unquoted loan stock (excluding convertible bonds and debt issued at a discount)
are classified as loans and receivables as permitted by FRS 26 and carried at
amortised cost using the Effective Interest Rate method less impairment.
Movements in amortised cost relating to interest income are reflected in the
revenue column of the Income statement, and hence are reflected in the revenue
reserve, and movements in respect of capital provisions are reflected in the
capital column of the Income statement and are reflected in the realised capital
reserve following sale, or in the unrealised capital reserve on revaluation.
For all unquoted loan stock, whether fully performing, re-negotiated, past due
or impaired, the Board considers that the fair value is equal to or greater than
the security value of these assets. For unquoted loan stock, the amount of the
impairment is the difference between the asset's cost and the present value of
estimated future cash flows, discounted at the original effective interest rate.
The future cash flows are estimated based on the fair value of the security less
the estimated selling costs.
Current asset investments
Contractual future contingent receipts on disposal of fixed asset investments
are designated at fair value through profit or loss and are subsequently
measured at fair value.
Dividend income is not recognised as part of the fair value movement of an
investment, but is recognised separately as investment income through the
revenue reserve when a share becomes ex-dividend.
Loan stock accrued interest is recognised in the Balance sheet as part of the
carrying value of the loans and receivables at the end of each reporting period.
It is not the Company's policy to exercise control or significant influence over
portfolio companies. Therefore in accordance with the exemptions under FRS 9
"Associates and joint ventures", those undertakings in which the Company holds
more than 20 per cent. of the equity are not regarded as associated
undertakings.
Investment income
Unquoted equity income
Dividend income is included in revenue when the investment is quoted ex-
dividend.
Unquoted loan stock and other preferred income
Fixed returns on non-equity shares and debt securities are recognised on a time
apportionment basis using an effective interest rate over the life of the
financial instrument. Income which is not capable of being received within a
reasonable period of time is reflected in the capital value of the investment.
Bank interest income
Interest income is recognised on an accruals basis using the rate of interest
agreed with the bank.
Floating rate note income
Floating rate note income is recognised on an accruals basis using the interest
rate applicable to the floating rate note at that time.
Investment management fees and expenses
All expenses have been accounted for on an accruals basis. Expenses are charged
through the revenue account except the following which are charged through the
realised capital reserve:
* 75 per cent. of management fees are allocated to the capital account to the
extent that these relate to an enhancement in the value of the investments.
This is in line with the Board's expectation that over the long term 75 per
cent. of the Company's investment returns will be in the form of capital
gains; and
* expenses which are incidental to the purchase or disposal of an investment
are charged through the realised capital reserve.
Performance incentive fee
In the event that a performance incentive fee crystallises, the fee will be
allocated between revenue and realised capital reserves based upon the
proportion to which the calculation of the fee is attributable to revenue and
capital returns.
Taxation
Taxation is applied on a current basis in accordance with FRS 16 "Current tax".
Taxation associated with capital expenses is applied in accordance with the
SORP. In accordance with FRS 19 "Deferred tax", deferred taxation is provided in
full on timing differences that result in an obligation at the balance sheet
date to pay more tax or a right to pay less tax, at a future date, at rates
expected to apply when they crystallise based on current tax rates and law.
Timing differences arise from the inclusion of items of income and expenditure
in taxation computations in periods different from those in which they are
included in the Financial Statements. Deferred tax assets are recognised to the
extent that it is regarded as more likely than not that they will be recovered.
The Directors have considered the requirements of FRS 19 and do not believe that
any provision for deferred tax should be made.
Reserves
Share premium account
This reserve accounts for the difference between the price paid for shares and
the nominal value of the shares, less issue costs and transfers to the special
reserve.
Capital redemption reserve
This reserve accounts for amounts by which the issued share capital is
diminished through the repurchase and cancellation of the Company's own shares.
Unrealised capital reserve
Increases and decreases in the valuation of investments held at the year end
against cost are included in this reserve.
Special reserve
The cancellation of the share premium account has created a special reserve that
can be used to fund market purchases and subsequent cancellation of own shares,
to cover gross realised losses, and for other distributable purposes.
Treasury shares reserve
This reserve accounts for amounts by which the distributable reserves of the
Company are diminished through the repurchase of the Company's own shares for
treasury.
Realised capital reserve
The following are disclosed in this reserve:
* gains and losses compared to cost on the realisation of investments;
* expenses, together with the related taxation effect, charged in accordance
with the above policies; and
* dividends paid to equity holders.
Dividends
In accordance with FRS 21 "Events after the balance sheet date", dividends
declared by the Company are accounted for in the period in which the dividend
has been paid or approved by shareholders in an Annual General Meeting.
3. Gains/(losses) on investments
Unaudited Unaudited Audited
six months ended six months ended year ended 30
31 March 2012 31 March 2011 September 2011
GBP'000 GBP'000 GBP'000
=------------------------------------------------------------------------------
Unrealised 531 (261) (1,630)
gains/(losses) on fixed
asset investments held
at fair value through
profit or loss account
Unrealised reversals of 745 89 283
impairments on fixed
asset investments held
at amortised cost
-------------------------------------------------------
Unrealised 1,276 (172) (1,347)
gains/(losses) sub-
total
Realised (loss)/gains (4) 10 218
on investments held at
fair value through
profit or loss account
Realised gains on fixed 51 419 835
asset investments held
at amortised cost
-------------------------------------------------------
Realised gains sub- 47 429 1,053
total
-------------------------------------------------------
1,323 257 (294)
-------------------------------------------------------
Investments valued on amortised cost basis are unquoted loan stock instruments
as described in note 2.
4. Investment income
Unaudited Unaudited Audited
six months ended six months ended year ended
31 March 2012 31 March 2011 30 September 2011
GBP'000 GBP'000 GBP'000
=------------------------------------------------------------------------------
Income recognised on
investments held at fair
value through profit or
loss
Income from convertible 41 - -
bonds and discounted debt
----------------------------------------------------
41 - -
Income recognised on
investments held at
amortised cost
Return on loan stock 543 468 1,018
investments
Bank deposit interest 12 15 31
----------------------------------------------------
555 483 1,049
----------------------------------------------------
596 483 1,049
----------------------------------------------------
All of the Company's income derives from operations based in the United Kingdom.
5. Dividends
Unaudited Unaudited Audited
six months ended six months ended year ended
31 March 2012 31 March 2011 30 September 2011
GBP'000 GBP'000 GBP'000
=------------------------------------------------------------------------------
First dividend paid - 728 728
on 31 January 2011 -
1.75 pence per share
Second dividend paid - - 744
on 30 June 2011 -
1.75 pence per share
First dividend paid 729 - -
on 31 January 2012 -
1.75 pence per share
------------------ ------------------ ------------------
729 728 1,472
------------------ ------------------ ------------------
In addition to the dividends paid above, the Board has declared a dividend of
1.75 pence per share to be paid on 29 June 2012 to shareholders on the register
on 1 June 2012. The total dividend to be paid will be approximately GBP748,000.
6. Basic and diluted return per share
Return per share has been calculated on 41,720,924 Ordinary shares excluding
treasury shares (31 March 2011: 40,997,045; 30 September 2011: 41,597,268) being
the weighted average number of shares in issue for the period.
There are no convertible instruments, derivatives or contingent share agreements
in issue, and therefore no dilution affecting the return per share. The basic
return per share is therefore the same as the diluted return per share.
7. Called up share capital
Unaudited Unaudited Audited
31 March 2012 31 March 2011 30 September
GBP'000 GBP'000 2011
GBP'000
=------------------------------------------------------------------------------
Allotted, called up and 463 22,962 23,108
fully paid
46,316,700 Ordinary shares
of 1 penny each (31 March
2011: 45,923,312; 30
September 2011: 46,215,450
of 50 pence each)
------------------------------------------------
Allotted, called up and
fully paid excluding
treasury shares
41,765,833 Ordinary shares
of 1 penny each (31 March
2011: 41,990,663; 30
September 2011: 41,644,583
of 50 pence each)
Following approval at the Annual General Meeting on 6 February 2012, the Company
reduced the nominal value of its shares from 50 pence to one penny, and
cancelled its capital redemption and share premium reserves. The purpose of
these actions was to increase the distributable reserves available to the
Company for the payment of dividends, the buy back of shares, and for other
corporate purposes. The effects of these transactions was to reduce the
Ordinary share capital by GBP22,604,000, the capital redemption reserve by
GBP1,344,000 and the share premium reserve by GBP539,000.
Under the terms of the Dividend Reinvestment Scheme Circular dated 22 December
2008, the following Ordinary shares, of nominal value 50 pence were allotted:
Date of allotment Number of Issue price Mid-market Net proceeds
shares issued (pence per price on issue GBP'000
share) date
(pence per
share)
=------------------------------------------------------------------------------
31 January 2012 72,170 62.41 57.0 45
During the period to 31 March 2012, the Company issued the following New
Ordinary shares under the Albion VCTs Linked Top Up Offer 2011/2012:
Date of Number of Nominal Issue price Mid-market Net proceeds
allotment shares value (pence (pence per price on GBP'000
issued per share) share) issue date
(pence per
share)
=------------------------------------------------------------------------------
10 January 2012 604,807 50.0 66.0 57.0 378
20 March 2012 642,773 1.0 67.4 57.0 410
During the period the Company purchased 1,198,500 Ordinary shares (31 March
2011: 583,505; 30 September 2011: 1,006,505) for cancellation at a cost of
GBP684,000, representing 3.6 per cent. of its issued share capital as at 30
September 2011. The shares purchased for cancellation were funded by the special
reserve.
The Company did not purchase any shares for treasury during the period to 31
March 2012 (31 March 2011: nil; 30 September 2011: 638,218). The Company
cancelled 20,000 Ordinary shares from the Treasury shares reserve, leaving a
balance of 4,550,867 Ordinary shares (31 March 2011: 3,932,649; 30 September
2011: 4,570,867) in treasury which represents 9.9 per cent. of the issued share
capital as at 31 March 2012.
8. Reconciliation of net return on ordinary activities before taxation to net
cash flow from operating activities
Unaudited Unaudited Audited
six months six months year ended
ended ended 30 September
31 March 2012 31 March 2011 2011
GBP'000 GBP'000 GBP'000
=------------------------------------------------------------------------------
Revenue return on 387 282 663
ordinary activities
before tax
Investment management fee (254) (264) (518)
charged to capital
Movement in accrued (34) (94) 46
amortised loan stock
interest
Decrease/(increase) in 1 (19) (6)
operating debtors
(Decrease)/increase in (12) 54 (17)
operating creditors
----------------- ----------------- ---------------
Net cash flow from 88 (41) 168
operating activities
----------------- ----------------- ---------------
9. Analysis of change in cash during the period
Unaudited Unaudited Audited
six months ended six months ended year ended
31 March 2012 31 March 2011 30 September 2011
GBP'000 GBP'000 GBP'000
=------------------------------------------------------------------------------
Opening cash 2,176 2,368 2,368
balances
Net cash flow (797) (184) (192)
------------------ ------------------ ------------------
Closing cash 1,379 2,184 2,176
balances
------------------ ------------------ ------------------
10. Commitments and contingencies
As at 31 March 2012, the Company was committed to making a further
investment of GBP131,000 in Mi-Pay Limited (31 March 2011: GBPnil; 30 September
2011: GBPnil).
There are no contingencies or guarantees of the Company as at 31 March 2012
(31 March 2011 and 30 September 2011: nil).
11. Post balance sheet events
Since 31 March 2012, the Company has completed the following material
transaction:
* April 2012: Investment of GBP131,000 in Mi-Pay Limited;
* April 2012: Investment of GBP350,000 in Albion Small Company Growth Limited.
Albion VCTs Linked Top Up Offer 2011/2012
On 5 April 2012, 984,698 New Ordinary shares were issued as part of the third
allotment under the Albion VCTs Linked Top Up Offer 2011/2012, at an issue price
of 67.4 pence per New Ordinary share. The net proceeds from this allotment were
GBP627,000.
12. Related party transactions
The Manager, Albion Ventures LLP, is considered to be a related party by virtue
of the fact that it is party to a management agreement from the Company (details
disclosed on page 21 and 22 of the Annual Report and Financial Statements of the
year ended 30 September 2011) and that Patrick Reeve, a Director of the Company,
is also Managing Partner of Albion Ventures LLP. During the period, services of
a total value of GBP340,000 (31 March 2011: GBP352,000; 30 September 2011: GBP690,000)
were purchased by the Company from Albion Ventures LLP. At the financial period
end, the amount due to Albion Ventures LLP disclosed as accruals was GBP166,000
(31 March 2011: GBP179,000; 30 September 2011: GBP161,000).
During the period, the Company was charged GBP9,250 (excluding VAT) by Albion
Ventures LLP in respect of Patrick Reeve's services as a Director (31 March
2011: GBP9,250; 30 September 2011: GBP18,500). At the financial period end, the
amount due to Albion Ventures LLP in respect of these services disclosed as
accruals and deferred income was GBP5,550 (31 March 2011: GBP5,434; 30 September
2011: GBP5,550).
During the period, the Company raised new funds through the Albion VCTs Linked
Top Up Offer 2011/2012 as detailed in note 7. The total cost of the issue of
these shares was 5.5% of the sums subscribed. Of these costs, an amount of
GBP6,740 (31 March 2011: GBP3,450; 30 September 2011: GBP3,450) was paid to the
Manager, Albion Ventures LLP in respect of receiving agent services. There were
no sums outstanding in respect of receiving agent services at the year end.
During the year, the Company purchased 1,198,500 Ordinary shares at a total cost
of GBP684,000 using the services of Winterflood Securities Limited a company of
which Robin Archibald is head of corporate finance and broking. These
transactions were at arms length and in line with market practices. At the year
end, the amount due to Winterflood Securities Limited in respect of share buy-
backs and disclosed in other creditors was GBP76,000 (31 March 2011: GBPnil; 30
September 2011: GBP24,000).
There are no other related party transactions or balances requiring disclosure.
13. Going concern
The Board's assessment of liquidity risk remains unchanged and is detailed on
page 29 of the Annual Report & Financial Statements for the year ended 30
September 2011. The Company has adequate cash and liquid resources. The
portfolio of investments is diversified in terms of sector, and the major cash
outflows of the Company (namely investments, buy-backs and dividends) are within
the Company's control. Accordingly, after making diligent enquiries the
Directors have a reasonable expectation that the Company has adequate resources
to continue in operational existence for the foreseeable future. For this
reason, the Directors have adopted the going concern basis in preparing the
accounts in accordance with "Going Concern and Liquidity Risk: Guidance for
Directors of UK Companies 2009", published by the Financial Reporting Council.
14. Risks and uncertainties
The Board considers that the Company faces the following major risks and
uncertainties:
1. Economic risk
Changes in economic conditions, including, for example, interest rates, rates of
inflation, industry conditions, competition, political and diplomatic events and
other factors could substantially and adversely affect the Company's prospects
in a number of ways.
To reduce this risk, in addition to investing equity in portfolio companies, the
Company often invests secured loan stock and has a policy of not permitting any
external bank borrowings within portfolio companies. Additionally, the Manager
has been rebalancing the sector exposure of the portfolio with a view to
reducing reliance on consumer led sectors.
2. Investment risk
This is the risk of investment in poor quality assets which reduces the capital
and income returns to shareholders, and negatively impacts on the Company's
reputation. By nature, smaller unquoted businesses, such as those that qualify
for venture capital trust purposes, are more fragile than larger, long
established businesses.
To reduce this risk, the Board places reliance upon the skills and expertise of
the Manager and its strong track record for investing in this segment of the
market. In addition, the Manager operates a formal and structured investment
process, which includes an Investment Committee, comprising investment
professionals from the Manager and at least one external investment
professional. The Manager also invites comments from non-executive Directors of
the Company on investments discussed at the Investment Committee meetings.
Investments are actively and regularly monitored by the Manager (investment
managers normally sit on investee company boards) and the Board receives
detailed reports on each investment as part of the Manager's report at quarterly
board meetings. It is the policy of the Company for portfolio companies to not
normally have external borrowings.
3. Valuation risk
The Company's investment valuation method is reliant on the accuracy and
completeness of information that is issued by portfolio companies. In
particular, the Directors may not be aware of or take into account certain
events or circumstances which occur after the information issued by such
companies is reported.
As described in note 2, the unquoted equity investments, convertible loan stock
and debt issued at a discount held by the Company are valued at fair value
through profit or loss in accordance with the International Private Equity and
Venture Capital Valuation Guidelines. These guidelines set out recommendations,
intended to represent current best practice on the valuation of venture capital
investments. These investments are valued on the basis of forward looking
estimates and judgements about the business itself, its market and the
environment in which it operates, together with the state of the mergers and
acquisitions market, stock market conditions and other factors. In making these
judgements the valuation takes into account all known material facts up to the
date of approval of the Financial Statements by the Board. All other unquoted
loan stock is measured at amortised cost.
4. Venture Capital Trust approval risk
The Company's current approval as a venture capital trust allows investors to
take advantage of tax reliefs on initial investment and ongoing tax free capital
gains and dividend income. Failure to meet the qualifying requirements could
result in investors losing the tax relief on initial investment and loss of tax
relief on any tax-free income or capital gains received. In addition, failure to
meet the qualifying requirements could result in a loss of listing of the
shares.
To reduce this risk, the Board has appointed the Manager, who has a team with
significant experience in venture capital trust management, used to operating
within the requirements of the venture capital trust legislation. In addition,
to provide further formal reassurance, the Board has appointed
PricewaterhouseCoopers LLP as its taxation advisors. PricewaterhouseCoopers LLP
report quarterly to the Board to independently confirm compliance with the
venture capital trust legislation, to highlight areas of risk and to inform on
changes in legislation.
5. Compliance risk
The Company is listed on The London Stock Exchange and is required to comply
with the rules of the UK Listing Authority, as well as with the Companies Act,
Accounting Standards and other legislation. Failure to comply with these
regulations could result in a delisting of the Company's shares, or other
penalties under the Companies Act or from financial reporting oversight bodies.
Board members and the Manager have experience of operating at senior levels
within quoted businesses. In addition, the Board and the Manager receive regular
updates on new regulation from its auditor, lawyers and other professional
bodies.
6. Internal control risk
Failures in key controls, within the Board or within the Manager's business,
could put assets of the Company at risk or result in reduced or inaccurate
information being passed to the Board or to shareholders.
The Audit Committee meets with the Manager's Internal Auditor, Littlejohn LLP,
when required, receiving a report regarding the last formal internal audit
performed on the Manager, and providing the opportunity for the Audit Committee
to ask specific and detailed questions. During the year the Board met with the
internal audit Partner of Littlejohn LLP to discuss the most recent Internal
Audit Report on the Manager. The Manager has a comprehensive business continuity
plan in place in the event that operational continuity is threatened. Further
details regarding the Board's management and review of the Company's internal
controls through the implementation of the Turnbull guidance are detailed on
page 28 of the full Annual Report and Financial Statements for the year ended
30 September 2011.
Measures are in place to mitigate information risk in order to ensure the
integrity, availability and confidentiality of information used within the
business.
7. Reliance upon third parties risk
The Company is reliant upon the services of Albion Ventures LLP for the
provision of investment management and administrative functions. There are
provisions within the management agreement for the change of Manager under
certain circumstances (for further detail, see the management agreement
paragraph on page 21 and 22 of the Annual Report and Financial Statements for
the year ended 30 September 2011). In addition, the Manager has demonstrated to
the Board that there is no undue reliance placed upon any one individual within
Albion Ventures LLP.
8. Financial risks
By its nature, as a venture capital trust, the Company is exposed to investment
risk (which comprises investment price risk and cash flow interest rate risk),
credit risk and liquidity risk. The Company's policies for managing these risks
and its financial instruments are outlined in full in note 20 to the Financial
Statements for the year ended 30 September 2011.
All of the Company's income and expenditure is denominated in sterling and hence
the Company has no foreign currency risk. The Company is financed through equity
and does not have any borrowings. The Company does not use derivative financial
instruments for speculative purposes.
15. Other information
The information set out in this Half-yearly Financial Report does not constitute
the Company's statutory accounts within the terms of section 434 of the
Companies Act 2006 for the periods ended 31 March 2012 and 31 March 2011, and is
unaudited. The information for the year ended 30 September 2011 does not
constitute statutory accounts within the terms of section 434 of the Companies
Act 2006 and is derived from the statutory accounts for that financial year,
which have been delivered to the Registrar of Companies. The Auditors reported
on those accounts; their report was unqualified and did not contain a statement
under s498 (2) or (3) of the Companies Act 2006.
16. Publication
This Half-yearly Financial Report is being sent to shareholders and copies will
be made available to the public at the registered office of the Company,
Companies House, the National Storage Mechanism and also electronically at
www.albion-ventures.co.uk under the 'Our Funds' section by clicking Albion
Income & Growth VCT PLC, and looking in the Financial Reports and Circulars
section for the Half-yearly Financial Report to 31 March 2012.
pdf version of press release:
http://hugin.info/141810/R/1613549/513855.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Albion Income & Growth VCT PLC via Thomson Reuters ONE
[HUG#1613549]
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