TIDMABNY
RNS Number : 2921U
Albany Investment Trust PLC
22 June 2009
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Albany Investment Trust PLC
22 June 2009
Albany Investment Trust Plc (the "Company")
Final Results
Chairman's Statement
Reflecting on 2009
Last year I commented that the credit crisis, which was in its early stages
then, would likely have an effect on the 'real' economy.
This has indeed been the case, with GDP growth around the world projected to be
either negative or, if not, certainly below trend.
The equity and credit markets have been hit significantly with the FTSE
All-share index down 35.95% and the Iboxx non gilt index down 10.7%.
With the banking system in both the US and the UK near-nationalised following
numerous capital injections and bailout plans, this truly has been an awful time
both economically and in capital markets. Compared to these figures, Albany's
NAV performed slightly ahead of the All-share benchmark, falling 34.21%.
The capital performance is obviously disappointing, however given this backdrop,
I would highlight that the investment income generated this year showed growth
of 3.2%. Given the uncertain nature of the markets at the interim stage, the
board felt it prudent to hold the interim dividend at 3.85p. The board is now
pleased to announce an increase in the final dividend of 4.2% to 6.15p, giving a
total dividend of 10.0p for the year.
The outlook is still somewhat opaque. However, the huge government intervention,
both fiscally and monetarily, we have seen to date should at some point begin to
gain traction and after such point, we hope to report better performance.
I do hope to see as many of you as possible at the Annual General Meeting at
2.30pm on the 9th of July where you will be able to meet the board, the
investment managers and advisers.
P T Furlong
Chairman
2 June 2009
Investment Managers' Report
The prevailing 12 months have been all about one sector; banks. At the time of
writing this report last year the loss write-downs to date were then already
huge but this has proved to be the tip of the iceberg. Numerous capital
injections, orchestrated mergers and bailout plans have seen a vast swathe of
financial institutions be quasi-nationalised. For income investors this has been
a particularly painful time as the banking sector had always been a stable
source of dividend income.
The authorities have been working overtime trying to control the decline in
economic output and to stabilise the financial system. However, as yet this has
not proved fully successful. The trigger for the revelation of this
over-extended and over-leveraged banking and shadow banking industry was the
bursting of the property bubble in the US, UK, Ireland and Spain among others.
The covenant breaches for mortgage and commercial property loans made at the
cheap credit heights - combined with financial instrument defaults - has blown
bank balance sheets apart. The wider effect of this is that it has disabled some
of the traditional monetary policy responses as this important conduit for
policy has become critically dysfunctional.
Lower interest rates are not being passed onto consumers and business, and loan
growth has turned significantly negative. Capital injections are not filtering
into the system as banks are hoarding capital. For this reason, quantitative
easing and measures aimed at spreading liquidity directly to the economy,
bypassing the banks, are now being introduced.
This time last year inflation was a significant concern as commodity-led price
rises were threatening to bring about a spate of stagflation (slowing growth
with rising inflation).
The focus now has very much turned towards deflation.
GDP is falling rapidly, unemployment is rising and consumer wealth effects are
reducing spending. Add to that lower mortgage payments resulting from lower
interest rates and it is little wonder that RPI now stands at 0% year-on-year.
However, the massive injection of money into the system, providing it eventually
works, could see a sharp correction in the inflation trajectory leaving the
authorities in a difficult situation of needing to control inflation, and
crucially future expectations thereof, without stalling any economic recovery.
This may not be as manageable as some believe and some inflation protection is
sensible.
The portfolio has suffered from exposure to financials, and some construction
affiliated companies. However, there have been positive contributions from
Dechra Pharmaceuticals, Diageo and resilient showings from Centrica and British
American Tobacco.
The outlook for the coming year is, as last year, uncertain. The rebuilding of
the financial system and restoration of confidence will take time and tighter
regulation is bound to be a feature in the near future. On a number of valuation
metrics that use long-term, trend or normalised earnings, the market is
beginning to look good value.
However, we think volatility will continue to be a feature and inflation and
unemployment will be the key macroeconomic statistics to monitor. The banking
sector will see further losses on their existing portfolio as property prices
will likely fall further but continued low base rates will give them the
opportunity to write profitable business at good margins as low rate benefits
will not be passed on. High levels of debt will remain unpopular with investors
as the scars of over-leverage remain fresh. Dividend growth is likely to be
rewarded and diversified international earnings will be favoured although we
expect the Euro to weaken from here against sterling as the ECB face up to the
issues across Europe. Another testing year lies ahead, but one that will almost
certainly present opportunity.
Rathbone Investment Management
2 June 2009
Report of the Directors
The directors submit to the shareholders the annual report and financial
statements for the year ended 28th February 2009.
Accounts and dividends
Details of revenue are contained in the Income Statement. An Interim dividend of
3.85 pence per Ordinary share was paid to shareholders on 5th December 2008.
The directors recommend payment of a final dividend of 6.15 pence per Ordinary
share in respect of the year ended 28th February 2009. Subject to approval at
the Annual General Meeting, the dividend will be paid on 10 July 2009.
Activities of the company
The company carries on the normal business of an investment trust as defined by
Section 266, Companies Act 1985. The annual report adheres to the principles and
recommendations in the AITC code.
Business review
A review of the business and future prospects is contained in the Chairman's
Statement and the Investment Managers' Report.
ISAs
The affairs of the company have been conducted in such a way as to comply with
the qualifying equity rule as defined in the ISA Regulations. It is the current
intention of the directors that the company will continue to conduct its affairs
to satisfy this requirement.
Directors
Mr R A Morris, Mr J R A Nottingham and Mr P T Furlong retire under the terms of
the Articles of Association and being eligible offer themselves for re-election.
The company's procedures regarding the appointment of directors are contained in
the Corporate Governance report. Qualifying third party indemnity provisions are
in place for the benefit of the directors.
Directors' interests
The interests of each director in the company's Ordinary 20p shares at 1st March
2008 and 28th February 2009 are shown on page five. There were no changes in
these shareholdings between 28th February 2009 and 31st May 2009. The directors
do not have the right to subscribe for any further shares via share option
schemes.
Net Asset Value
Particulars appear in the summary of results.
Capital structure
Details of the company's capital structure are set out in note 13 to the
financial statements. There were no substantial shareholdings as at 31st May
2009.
Inland Revenue approval
The company, which is an Investment Company within the meaning of Section 266
Companies Act 1985, has received approval as an Investment Trust from the Inland
Revenue under Section 842 of the Income and Corporation Taxes Act 1988 in
respect of the year ended 28th February 2008 and has subsequently directed its
affairs to enable it to continue to seek such approval.
Principal risks, uncertainties and future performance
The principal risks facing the company relate to the company's investment
activities. An explanation of these risks and how they are managed is contained
in note 11 to the accounts. In addition, breach of section 842 of the Income and
Corporation Taxes Act 1998 could lead to the company being subject to capital
gains tax. The Investment Managers monitor investment movements to ensure the
provisions of section 842 are not breached.
Payment policy and practice
It is the company's policy to settle the terms of payment with suppliers when
agreeing the terms of the transaction, to ensure that suppliers are aware of
these terms and to abide by them. At 28th February 2009 the company had no trade
creditors (2008: Nil).
Environmental policy
The directors are aware of environmental issues and will keep in mind the
company's impact thereon.
Contractual arrangements
Details of arrangements with Rathbone Investment Management are set out in note
18.
International Financial Reporting Standards (IFRS)
The directors have decided not to voluntarily adopt IFRS. IFRS are mandatory
only for consolidated financial statements.
Auditors
Grant Thornton UK LLP offer themselves for a reappointment in accordance with
Section 489 of the Companies Act 2006.
Port of Liverpool Building, Pier Head, Liverpool, L3 1NW
TW Evans
Secretary - 2nd June 2009
Corporate Governance
The company is committed to applying the highest principles of corporate
governance commensurate with its size and nature. The Board is accountable to
the company's shareholders for good corporate governance. This report and the
Directors' Remuneration Report describe how it complies with the provisions of
the Combined Code (2006).
Compliance
The company has complied throughout the year with the Code provisions set out in
Section 1 of the Combined Code except as follows:
A.3.3: A senior independent director has not been nominated.
A.4.1: A nomination committee has not been set up.
B.1: Directors are paid only a basic salary.
B.2: A remuneration committee has not been set up.
C.3.1: An audit committee has not been set up.
The Board do not believe that the above committees would benefit the company at
this time, as the work normally undertaken by such committees is carried out by
the Board as a whole. Further, the Board do not believe that the nomination of a
senior independent director, nor the payment of performance related remuneration
to the directors, would be of benefit to the company given the size of the
Board.
Application of the principles
Directors
The company supports the concept of an effective Board leading and controlling
the company.
The Board met six times during the year (P T Furlong and R A Morris attended six
meetings, J R A Nottingham and Sir David Henshaw attended five) and is
responsible for approving company policy and strategy, reviewing investment
performance, financial reporting and communication.
The Board is supplied with appropriate and timely information and the directors
are free to seek any further information they consider necessary. All directors
have access to advice from the company secretary and independent professionals
at the company's expense. Training is available from the appropriate sources for
directors as necessary.
The Board comprises the Chairman and three non-executive directors, two of whom
are independent (J R A Nottingham and Sir David Henshaw). The directors consider
that J R A Nottingham remains independent despite his period of service
exceeding nine years. The Board composition provides a balance whereby the
Board's decision making cannot be dominated by any individual. All directors
take decisions objectively in the interests of the company.
The Chairman of the Board is P T Furlong. The Chairman is responsible for
leadership of the Board, ensuring its effectiveness in all aspects of its role,
and setting its agenda. The Board confirms the appointment of the Chairman
annually.
All independent directors are subject to re-election every three years up to the
age of 70 or nine years' service and annually thereafter, and, on appointment,
at the first AGM after appointment. Non-independent directors are re-elected
annually.
Appointments of new directors are made on merit. Care is taken to ensure that
appointees have sufficient time available to devote to the job.
Individual director's performance and the performance of the Board as a whole
are evaluated annually.
Relations with shareholders
The company values the views of its shareholders and recognises their interest
in the company's strategy and performance, Board membership and quality of
management. The Chairman ensures that the views of shareholders are communicated
to the Board as a whole.
The AGM, which is normally attended by all Board members, is used to communicate
with private investors and they are encouraged to participate. Separate
resolutions are proposed on each issue so that they can be given proper
consideration and there is a resolution to adopt the annual report and accounts
and a resolution to approve the Directors' Remuneration Report. The company
counts all proxy votes and will indicate the level of proxies lodged on each
resolution, after it has been dealt with by a show of hands. The company
arranges for notices of the AGM and related papers to be sent to shareholders at
least 20 working days before the meeting.
The share price discount, in absolute terms and relative to other similar
investment trust companies, and the composition of the share register is
discussed at every Board meeting. While there is no discount target, the Board
is aware that discount volatility is unwelcome to many shareholders and that
share price performance is the measure used by most investors.
The Board oversees the company's stockbroker's activities which are designed to
stimulate demand for the company's shares and provide effective communication to
existing and potential shareholders.
Accountability and audit
The Board presents a balanced and understandable assessment of the company's
position and prospects in all interim and price-sensitive reports and reports to
regulators as well as in the information required to be presented by statutory
requirements.
The Board has formal and transparent arrangements for considering how it applies
the financial reporting and internal control procedures and for maintaining an
appropriate relationship with the company's auditors.
The Board reviews the nature and extent of non-audit services supplied by the
external auditors, seeking to balance objectivity and value for money. The
directors review annually the level and nature of non-audit services provided by
the external auditors.
Internal control
The Board is responsible for maintaining a sound system of internal control to
safeguard shareholders' investment and the company's assets and for reviewing
its effectiveness. Such a system is designed to manage rather than eliminate the
risk of failure to achieve business objectives and can only provide reasonable
and not absolute assurance against material misstatement or loss.
The Board conducts a review annually of the company's system of internal
controls. All material controls are covered, including financial, operational
and compliance controls and systems to manage risks.
The company has established a system for identifying, evaluating and managing
the company's key risks. Strategic risks are regularly reviewed by the Board and
it has determined that the Risk Register which it has established will be
monitored by the Board and reviewed formally at Board meetings, at least
annually. The latest review was completed in December 2008.
The key risks reviewed cover the areas of:
- Strategy and management
- Independence
- Outsourcing arrangements
- Reputational risk
- Reliability of investment manager
- Fraud
- Legislative requirements
- Insurance
The key features of the company's system of internal financial control are as
follows:
The directors have delegated day-to-day investment decisions to Rathbone
Investment Management Limited.
The Investment Manager operates within the investment guidelines set out by the
Board. Compliance with the investment policy is monitored on a daily basis by
Rathbone Investment Management Limited and reviewed by the Board monthly. The
portfolio management is at the discretion of the Investment Manager. The board
of directors have however laid down the following guidelines.
The trust must remain a general UK trust with up to 25% invested overseas,
seeking to achieve a balance between capital growth and income. Investments may
comprise UK listed companies, overseas listed companies, unit and investment
trusts, fixed interest securities and cash. No more than 15% can be invested in
any one company or held in cash. Unless with the express authority of the Board
the fund manager will not invest in deriviatives such as warrants and futures.
Rathbone Investment Management Limited, under instruction from the Board, also
provides administration services for Albany Investment Trust plc. Management
fees are payable for investment and administration services.
Rathbone Investment Management Limited is regulated by the Financial Services
Authority and has a banking licence under the Financial Services Market Act
2000. This provides a high level of control over the procedures of Albany
Investment Trust plc. The directors receive a report from the internal audit
department of Rathbone Investment Management Limited in respect of internal
procedures and controls on an annual basis.
The Board has considered the need for an internal audit function but has decided
the size of the company does not justify it at present. However, it will keep
the decision under annual review.
Going concern
After making enquiries, the directors have a reasonable expectation that the
company has adequate resources to continue in operational existence for the
foreseeable future, and its assets consist mainly of securities that are readily
realisable. For this reason they continue to adopt the going concern basis in
preparing the financial statements.
ON BEHALF OF THE BOARD
P T Furlong 2nd June 2009
Statement of Directors' Responsibilities
The directors are responsible for preparing the Annual Report and the financial
statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under that law, the directors have elected to prepare financial
statements in accordance with United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting Practice).
The financial statements are required by law to give a true and fair view of the
state of affairs of the company and of its return for that period.
In preparing those financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently; make
judgements and estimates that are reasonable and prudent; state whether
applicable accounting standards have been followed, subject to any material
departures disclosed and explained in the financial statements; prepare the
financial statements on the going concern basis unless it is inappropriate to
presume that the company will continue in business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and enable them to ensure that the financial statements comply with the
Companies Act 1985. They are also responsible for safeguarding the assets of the
company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
In so far as the directors are aware;
there is no relevant audit information of which the auditors are unaware;
and the directors have taken all steps that they ought to have taken to make
themselves aware of any relevant audit information, and to establish that the
auditors are aware of that information.
To the best of the directors' knowledge:
the financial statements, prepared in accordance with the applicable set of
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit of the company, and the annual report includes a
fair review of the development and performance of the business and the position
of the company, together with a description of the principal risks and
uncertainties that they face.
ON BEHALF OF THE BOARD
P T Furlong
2nd June 2009
Directors' remuneration report
The Board recognises that directors' remuneration is of legitimate concern to
the shareholders.
SECTION 1: Information not subject to audit
The remuneration committee
A Remuneration Committee has not been set up, directors' remuneration being
agreed by the Board as a whole.
Policy on directors' remuneration
The remuneration of the non-executive directors is determined by the Board.
Letters of appointment are in place for a fixed period of three years for Sir
David Henshaw and for one year for Messrs Furlong, Morris and Nottingham.
No compensation payments are due on termination.
The non-executive directors' remuneration consists entirely of a basic annual
salary which is reviewed annually. Directors' salaries were last reviewed in
December 2008 and will next be reviewed in December 2009.
SECTION 2: Information subject to audit
Directors' emoluments
Directors do not receive bonuses or share options. Pension contributions are not
paid by the company on behalf of the directors.
+-----------------------------+---------------------+--------------------+
| | 2009 | 2008 |
| | GBP | GBP |
+-----------------------------+---------------------+--------------------+
| P T Furlong | 16,500 | 16,000 |
+-----------------------------+---------------------+--------------------+
| R A Morris | 10,750 | 10,000 |
+-----------------------------+---------------------+--------------------+
| J R A Nottingham | 10,750 | 10,000 |
+-----------------------------+---------------------+--------------------+
| Sir David Henshaw | 10,750 | 10,000 |
+-----------------------------+---------------------+--------------------+
| | 48,750 | 46,000 |
+-----------------------------+---------------------+--------------------+
Approval
This report was approved by the Board of Directors on 2nd June 2009 and signed
on its behalf by: P T Furlong.
Report of the Independent Auditors
to the members of Albany Investment Trust plc
We have audited the financial statements of Albany Investment Trust Plc for the
year ended 28th February 2009 ("the financial statements") which comprise the
income statement, the balance sheet, the cash flow statement, the
reconcilliation of movements in shareholders' funds and notes 1 to 19. These
financial statements have been prepared under the accounting policies set out
therein. We have also audited the information in the directors' remuneration
report that is described as having been audited.
This report is made solely to the company's members, as a body, in accordance
with Section 235 of the Companies Act 1985.
Our audit work has been undertaken so that we might state to the company's
members those matters we are required to state to them in an auditors' report
and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company and the
company's members as a body, for our audit work, for this report, or for the
opinions we have formed.
Respective responsibilities of directors and auditors
The directors' responsibilities for preparing the annual report, the directors'
remuneration report and the financial statements in accordance with United
Kingdom law and accounting standards (United Kingdom Generally Accepted
Accounting Practice) are set out in the statement of directors'
responsibilities.
Our responsibility is to audit the financial statements and the part of the
directors' remuneration report to be audited in accordance with relevant legal
and regulatory requirements and International Standards on Auditing (UK and
Ireland).
We report to you our opinion as to whether the financial statements give a true
and fair view and whether the financial statements and the part of the
directors' remuneration report to be audited have been properly prepared in
accordance with the Companies Act 1985. We also report to you whether in our
opinion the information given in the report of the directors is consistent with
the financial statements. This information includes that specific information
presented in the Chairman's statement and Investment Managers' Report that is
cross-referenced from the Business Review section of the report of the
directors.
In addition, we report to you if, in our opinion, the company has not kept
proper accounting records, if we have not received all the information and
explanations we require for our audit, or if information specified by law
regarding directors' remuneration and other transactions is not disclosed.
We review whether the Corporate Governance statement reflects the company's
compliance with the nine provisions of the 2006 Combined Code specified for our
review by the Listing Rules of the Financial Services Authority and we report if
it does not. We are not required to consider whether the board's statements on
internal control cover all risks and controls, or form an opinion on the
effectiveness of the company's corporate governance procedures or its risks and
control procedures.
We read other information contained in the annual report and consider whether it
is consistent with the audited financial statements. This other information
comprises only the report of the directors, the unaudited part of the directors'
remuneration report, the summary of results, the recent trends, the Chairman's
statement, the Investment Managers' report, the corporate governance statement,
the analysis of investment funds and the ten year historical record. We consider
the implications for our report if we become aware of any apparent misstatements
or material inconsistencies with the financial statements. Our responsibilities
do not extend to any other information.
Basis of opinion
We conducted our audit in accordance with International Standards on Auditing
(UK and Ireland) issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements and the part of the directors'
remuneration report to be audited. It also includes an assessment of the
significant estimates and judgements made by the directors in the preparation of
the financial statements, and of whether the accounting policies are appropriate
to the company's circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
and the part of the directors' remuneration report to be audited are free from
material misstatement, whether caused by fraud or other irregularity or error.
In forming our opinion, we also evaluated the overall adequacy of the
presentation of information in the financial statements and the part of the
directors' remuneration report to be audited.
Opinion
In our opinion:
the financial statements give a true and fair view in accordance with United
Kingdom Generally Accepted Accounting Practice of the state of the company's
affairs as at 28th February 2009 and of its loss for the year then ended; the
financial statements and the part of the directors' remuneration report to be
audited have been properly prepared in accordance with the Companies Act 1985;
and the information given in the report of the directors is consistent with the
financial statements.
GRANT THORNTON UK LLP
Chartered Accountants, Registered Auditors.
Liverpool, 2nd June 2009
Income Statement
for the year ended 28th February 2009 (incorporating Profit & Loss Account 2009)
+---------------+-------+---------+----------+----------+---------+---------+---------+
| | | | 2009 | | | 2008 | |
+---------------+-------+---------+----------+----------+---------+---------+---------+
| | Notes | Revenue | Capital | Total | Revenue | Capital | Total |
+---------------+-------+---------+----------+----------+---------+---------+---------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------+-------+---------+----------+----------+---------+---------+---------+
| (Losses) on | 8 | - | (12,474) | (12,474) | - | (3,079) | (3,079) |
| investments | | | | | | | |
+---------------+-------+---------+----------+----------+---------+---------+---------+
| Income | 2 | 1,406 | | 1,406 | 1,362 | - | 1,362 |
+---------------+-------+---------+----------+----------+---------+---------+---------+
| Expenses | 3 | (237) | (103) | (340) | (221) | (182) | (403) |
+---------------+-------+---------+----------+----------+---------+---------+---------+
| | | | | | | | |
+---------------+-------+---------+----------+----------+---------+---------+---------+
| Return on | | 1,169 | (12,577) | (11,408) | 1,141 | (3,261) | (2,120) |
| ordinary | | | | | | | |
| activities | | | | | | | |
+---------------+-------+---------+----------+----------+---------+---------+---------+
| before | | | | | | | |
| taxation | | | | | | | |
+---------------+-------+---------+----------+----------+---------+---------+---------+
| | | | | | | | |
+---------------+-------+---------+----------+----------+---------+---------+---------+
| Taxation on | 5 | - | - | - | - | - | - |
| ordinary | | | | | | | |
| activities | | | | | | | |
+---------------+-------+---------+----------+----------+---------+---------+---------+
| | | | | | | | |
+---------------+-------+---------+----------+----------+---------+---------+---------+
| Return on | 12 | 1,169 | (12,577) | (11,408) | 1,141 | (3,261) | (2,120) |
| ordinary | | | | | | | |
| activities | | | | | | | |
| after | | | | | | | |
| taxation for | | | | | | | |
| the financial | | | | | | | |
| year | | | | | | | |
+---------------+-------+---------+----------+----------+---------+---------+---------+
| | | | | | | | |
+---------------+-------+---------+----------+----------+---------+---------+---------+
| Return per | 7 | 11.7p | -125.5p | -113.8p | 11.4p | -32.5p | -21.1p |
| ordinary | | | | | | | |
| share: Basic | | | | | | | |
+---------------+-------+---------+----------+----------+---------+---------+---------+
Reconciliation of movements in shareholders' funds
+---------------------------------+------------+----------+-------+----------+
| | | 2009 | | 2008 |
+---------------------------------+------------+----------+-------+----------+
| | | GBP' 000 | | GBP '000 |
+---------------------------------+------------+----------+-------+----------+
| At beginning of year | | 36,290 | | 39,367 |
+---------------------------------+------------+----------+-------+----------+
| Total gains and losses | | (11,408) | | (2,120) |
| recognised since last financial | | | | |
| statements | | | | |
+---------------------------------+------------+----------+-------+----------+
| Dividends paid | | (977) | | (957) |
+---------------------------------+------------+----------+-------+----------+
| At end of year | | 23,905 | | 36,290 |
+---------------------------------+------------+----------+-------+----------+
The accompanying notes are an integral part of the financial statements.
All revenue and capital items in the above statement derive from continuing
operations.
The total column represents the company's profit and loss account, the revenue
and capital columns represent supplementary information.
No operations were acquired or discontinued in the year.
There were no recognised gains and losses other than as included in the income
statement.
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| Balance sheet | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| as at 28th | | | | | | |
| February 2008 | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| | Notes | | 2009 | | 2008 | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| | | | GBP'000 | | GBP'000 | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| Fixed assets | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| Investments | 8 | | 22,826 | | 34,206 | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| Current assets | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| Debtors | 9 | | 72 | | 52 | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| Cash at bank and | | | 1,051 | | 2,071 | |
| in hand | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| | | | | | 2,123 | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| Creditors: | | | | | | |
| amounts falling | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| due within one | 10 | | (44) | | (39) | |
| year | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| Net current | | | 1,079 | | 2,084 | |
| assets | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| Total assets less | | | 23,905 | | 36,290 | |
| current | | | | | | |
| liabilities | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| Capital and | | | | | | |
| reserves | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| Called up share | 13 | | 2,005 | | 2,005 | |
| capital | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| Capital reserve - | 12 | | 19,954 | | 32,526 | |
| realised | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| Capital reserve - | 12 | | 81 | | 86 | |
| unrealised | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| Revenue reserve | 13 | | 1,865 | | 1,673 | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| Total | | | 23,905 | | 36,290 | |
| shareholders' | | | | | | |
| funds | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
| Net asset value | 14 | | 238.48 | | 362.04p | |
| per ordinary | | | | | | |
| share: Basic | | | | | | |
+-------------------+----------------+---------+-----------+---------+-----------+---------+
The financial statements were approved by the Board of directors on 2nd June
2009 and were signed on its behalf by:
P T Furlong Chairman
The accompanying notes are an integral part of the financial statements.
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| Cash Flow | | | | | | |
| Statement | | | | | | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| for the | | | | | | |
| year ended | | | | | | |
| 28th | | | | | | |
| February | | | | | | |
| 2009 | | | | | | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| | Notes | | 2009 | | 2008 | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| | | | GBP'000 | | GBP'000 | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| Operating | | | | | | |
| activities | | | | | | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| Investment | | | 1,335 | | 1,331 | |
| income | | | | | | |
| received | | | | | | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| Bank | | | 75 | | 49 | |
| interest | | | | | | |
| received | | | | | | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| Expenses | | | (335) | | (397) | |
| paid | | | | | | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| | | | | | | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| Net cash | 16 | | 1,075 | | 983 | |
| inflow | | | | | | |
| from | | | | | | |
| operating | | | | | | |
| activities | | | | | | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| | | | | | | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| Financial | | | | | | |
| investment | | | | | | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| Purchase | | | (11,539) | | (10,252) | |
| of | | | | | | |
| investments | | | | | | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| Disposals | | | 10,421 | | 11,719 | |
| of | | | | | | |
| investments | | | | | | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| | | | | | | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| Cash | | | (1,118) | | 1467 | |
| inflow | | | | | | |
| from | | | | | | |
| financial | | | | | | |
| investment | | | | | | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| | | | | | | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| Equity | | | (977) | | (957) | |
| dividends | | | | | | |
| paid | | | | | | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| | | | | | | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
| Increase | 15 | | (1,020) | | 1,493 | |
| in cash | | | | | | |
+-------------+-----------------+---------+-----------+---------+-----------+---------+
The accompanying notes are an integral part of the financial statements.
Notes to the Financial Statements
1. Accounting policies
A summary of the principal accounting policies is set out below which have
remained unchanged from the preceding year.
a) Basis of accounting
The financial statements are prepared under the historical cost convention,
except for the measurement at fair value of investments. The financial
statements have been prepared in accordance with applicable United Kingdom law
and accounting standards (United Kingdom Generally Accepted Accounting Practice)
and with the Statement of Recommended Practice: 'Financial Statements of
Investment Trust Companies' (revised December 2005).
b) Dividends
Dividends declared during the year to the holders of the equity instruments are
recognised in the financial statements.
Dividends declared to the holders of the equity instruments after the balance
sheet date are not recognised as a liability.
The aggregate amount of equity dividends proposed before approval of the
financial statements, which have not been shown as liabilities at the balance
sheet date, are disclosed in the notes to the financial statements. Dividends
are charged direct to equity.
c) Valuation of investments
Investments are classified at fair value through profit and loss upon initial
recognition. Subsequent to initial recognition, investments are measured at fair
value with changes in fair value recognised in the income statement. Quoted
investments are valued at bid prices, as reported by the UK Listing Authority.
Unquoted investments are valued by the Board, at the Board's estimate of fair
value, by reference to the following valuation guidelines: Asset values,
earnings, dividends and other relevant factors.
Realised surpluses or deficits on the disposal of investments and permanent
impairments in the value of investments are taken to capital reserve - realised,
surpluses on revaluation of investments held on a recognised active market are
taken to capital reserves - realised and unrealised surpluses and deficits on
the revaluation of investments with no active market are taken to capital
reserve - unrealised, as explained in note 1(h) below. Year end exchange rates
are used to translate the value of investments which are denominated in foreign
currencies.
d) Income
Dividends receivable on quoted equity shares are brought into account on the
ex-dividend date. Dividends receivable on equity shares where no ex-dividend
date is quoted are brought into account when the company's right to receive
payment is established. Fixed returns on non-equity shares are recognised on a
time apportionment basis so as to reflect the effective yield on the shares.
Other returns on non-equity shares are recognised when the right to return is
established. The fixed return on a debt security is recognised on a time
apportionment basis so as to reflect the effective yield on the debt security.
e) Expenses
All expenses are accounted for on an accruals basis. Expenses are charged
through the revenue account except as follows:
Expenses which are incidental to the disposal of an investment are deducted
from the disposal proceeds of the investment.
Expenses relating to investment management are allocated between capital and
revenue in accordance with the Board's expected long-term split of returns, in
the form of capital gains and income respectively, from the entire investment
portfolio.
f) Taxation
Investment income is shown excluding the related tax credit.
The company has not provided deferred taxation on any capital gains and losses
arising on the revaluation or disposal of investments due to the company's
status as an Investment Trust Company.
g) Foreign currency
Transactions denominated in foreign currencies are recorded in the local
currency at actual exchange rates as at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the year end are
reported at the rates of exchange prevailing at the year end. Any gain or loss
arising from a change in exchange rates subsequent to the date of the
transaction is included as an exchange gain or loss in the profit and loss
account, allocated to the capital reserve or the revenue reserve depending on
whether the gain or loss is of a capital or revenue nature respectively.
h) Capital reserves
Capital Reserve - Realised
The following are accounted for in this reserve:
Gains and losses on the realisation of investments ? Realised exchange
differences of a capital nature ? A proportion of the expenses relating to
investment management as set out above Permanent impairments in the value of
investments below cost ? Distributions received deemed to be capital in nature ?
Increases and decreases in the valuation of investments held on an active market
at the year end.
Capital reserve - unrealised
The following are accounted for in this reserve:
* Increases and decreases in the valuation of investments held outside an active
market at the year end.
* Unrealised exchange differences of a capital nature.
i) Financial instruments
Financial liabilities
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into.
A financial liability exists where there is a contractual obligation to deliver
cash or another financial asset to another entity, or to exchange financial
assets or liabilities under potentially unfavourable conditions. Shares
containing such obligations are classified as financial liabilities. An equity
instrument is any contract that evidences a residual interest in the assets of
the entity after deducting all of its financial liabilities. Dividends and
distributions relating to equity instruments are debited direct to equity.
Financial liabilities are obligations to pay cash or other financial assets and
are recognised when the company becomes a party to the contractual provisions of
the instrument. All financial liabilities are recorded initially at fair value,
net of direct issue costs. Subsequently they are accounted for at amortised cost
via the effective interest rate method.
Financial assets
Financial assets are divided into the following categories: loans and
receivables and financial assets at fair value through profit or loss. Financial
assets are assigned to the different categories by management on initial
recognition, depending on the purpose for which they were acquired. The
designation of financial assets is re-evaluated at every reporting date at which
a choice of classification or accounting treatment is available.
All financial assets are recognised when the company becomes a party to the
contractual provisions of the instrument. Financial assets other than those
categorised as at fair value through profit or loss are recognised at fair value
plus transaction costs. Financial assets categorised as at fair value through
profit or loss are recognised initially at fair value with transaction costs
expensed through the profit and loss account.
Financial assets at fair value through profit or loss represent investments
designated by the entity as at fair value through profit or loss upon initial
recognition. Subsequent to initial recognition, the financial assets included in
this category are measured at fair value with changes in fair value recognised
in the profit and loss account. Financial assets originally designated as
financial assets at fair value through profit or loss may not be reclassified
subsequently.
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. Debtors and cash
are classified as loans and receivables. Loans and receivables are measured
subsequent to initial recognition at amortised cost using the effective interest
method, less provision for impairment. Any change in their value through
impairment or reversal of impairment is recognised in the profit and loss
account.
An assessment for impairment is undertaken at least at each balance sheet date.
2. Income
2009 2008
Income from investmentsGBP'000 GBP'000
Franked investment income1,194 1,214
Overseas dividends135 98
Other income1,329 1,312
Bank interest 77 50
Total income1,406 1,362
Total income comprises:
Dividends1,329 1,312
Interest 77 50
Income from investments:1,406 1,362
Listed UK1,189 1,210
Listed overseas 135 98
Unlisted5 4
1,329 1,312
3. Expenses
2009 2008
GBP'000 GBP'000
Secretarial and other services110 110
Directors' remuneration (Note 4)49 46
Investment management fees121 185
Other professional fees 29 29
Auditors' remuneration (net of VAT) for
- audit26 28
- other services pursuant to such legislation4 4
- taxation1 1
340 403
4. Directors' remuneration
The remuneration of the highest paid director amounted to GBP16,500 (2008:
GBP16,000). During the year, there were no employees other than the directors,
further details are set out in the Directors' remuneration report and details of
related party transactions are provided in note 18.
5. Taxation on ordinary activities
2009 2008
Revenue CapitalTotal Revenue Capital Total
GBP'000GBP'000 GBP'000 GBP'000GBP'000 GBP'000
Current Taxation _ _ _ _ _ _
The tax assessed for the period is lower than the standard rate of corporation
tax in the UK of 21% (2008: 20%).
The differences are explained as follows:
20092008GBP'000 GBP'000
Revenue return on ordinary activities before tax1,1691,141
Revenue return on ordinary activities multiplied by standard
rate of corporation tax in the UK of 21%245 228
Effect of:
Franked investment income being exempt from taxation (251) (242)
Tax relief on expenses allocated to capital (22) (36)
Non-recognition of tax losses28 50
Current tax charge for the year- -
At 28 February 2009 the Company had a potential deferred tax asset of GBP220,000
(2008: GBP233,000) in respect of taxable losses which are available to be
carried forward and offset against future taxable profits. A deferred tax asset
has not been provided on these losses as it is considered unlikely that the
Company will make suitable taxable revenue profits in excess of deductible
expenses in future periods.
As an investment trust, the Company's capital gains are not taxable and
therefore the note above which reconciles the tax charge to the net return on
ordinary activities does not include capital items. The potential deferred tax
asset has been calculated using a corporation tax rate of 21% (2008: 20%).
6. Dividends
+-----------+--------+---------+---------+---------+---------+
| | | 2009 | 2008 |
+-----------+--------+-------------------+-------------------+
| | | Revenue | Total | Revenue | Total |
+-----------+--------+---------+---------+---------+---------+
| Dividends | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| on equity | | | | | |
| shares | | | | | |
| paid in | | | | | |
| the year | | | | | |
+-----------+--------+---------+---------+---------+---------+
| | | | | | |
+-----------+--------+---------+---------+---------+---------+
| ordinary | | 386 | 386 | 386 | 386 |
| - | | | | | |
| interim | | | | | |
| 2009 | | | | | |
| dividend | | | | | |
| of 3.85p | | | | | |
+-----------+--------+---------+---------+---------+---------+
| per | | | | | |
| share | | | | | |
| (2008: | | | | | |
| 3.85p) | | | | | |
+-----------+--------+---------+---------+---------+---------+
| | | 591 | 591 | 571 | 571 |
+-----------+--------+---------+---------+---------+---------+
| - | | | | | |
| ordinary | | | | | |
| - final | | | | | |
| 2009 | | | | | |
| dividend | | | | | |
| of 5.90p | | | | | |
+-----------+--------+---------+---------+---------+---------+
| per | | | | | |
| share | | | | | |
| (2008: | | | | | |
| 5.70p) | | | | | |
+-----------+--------+---------+---------+---------+---------+
| | | | | | |
+-----------+--------+---------+---------+---------+---------+
| | | 977 | 977 | 957 | 957 |
+-----------+--------+---------+---------+---------+---------+
+-----------+--------+--------+----------+----------+----------+---------+----------+----------+
| | | 2009 | 2008 |
+-----------+--------+-----------------------------------------+-------------------------------+
| | | Revenue | Total | Revenue | Total |
+-----------+--------+-------------------+---------------------+---------+---------------------+
| Dividends | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| paid and | | | | | |
| proposed | | | | | |
| in the | | | | | |
| year: | | | | | |
+-----------+--------+-------------------+---------------------+---------+---------------------+
| Interim | | 386 | 386 | 386386 |
| - paid | | | | |
| in the | | | | |
| year | | | | |
| (3.85p, | | | | |
| 2007: | | | | |
| 3.50p) | | | | |
+-----------+--------+--------+---------------------+-------------------------------+
| Final | | 616 | 616 | 591 | 591 |
| - | | | | | |
| proposed | | | | | |
| (5.90p, | | | | | |
| 2007: | | | | | |
| 5.70p) | | | | | |
+-----------+--------+-------------------+---------------------+---------+---------------------+
| | | 1,002 | 1,002 | 977 | 977 |
+-----------+--------+-------------------+---------------------+---------+---------------------+
| | | | | | |
+-----------+--------+--------+----------+----------+----------+---------+----------+----------+
7. Return per ordinary share
Basic revenue return per ordinary share is based on the revenue return on
ordinary activities after taxation, and on 10,023,750 (2008: 10,023,750)
ordinary shares. Basic capital return per ordinary share is based on capital
return on ordinary activities after taxation, and on 10,023,750 (2008:
10,023,750) ordinary shares. Basic total return per ordinary share is based on
the sum of revenue return and capital return as defined above, and on 10,023,750
(2008: 10,023,750) ordinary shares. Diluted returns equate to basic returns as
there are no share options or other potentially dilutive ordinary shares.
8. Investments
2009 2008
GBP'000 GBP'000
Investments listed on a recognised investment exchange 22,743 34,118
Unlisted investments 83 88
22,826 34,206
+---------------------+---------+------------+----------+----------+----------+----------+
| | UK | UK Fixed | Listed | Listed | | |
| | Unit | Interest | Equities | Equities | | |
| | Trusts | Securities | | | | |
+---------------------+---------+------------+----------+----------+----------+----------+
| | | | UK | Overseas | Unlisted | Total |
| | | | | | | |
+---------------------+---------+------------+----------+----------+----------+----------+
| |GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------------+---------+------------+----------+----------+----------+----------+
| Opening book cost | - | - | 24,129 | 2,832 | 2 | 26,963 |
+---------------------+---------+------------+----------+----------+----------+----------+
| Opening fair value | - | - | 7,050 | 107 | 86 | 7,243 |
| adjustment | | | | | | |
+---------------------+---------+------------+----------+----------+----------+----------+
| | | | | | | |
+---------------------+---------+------------+----------+----------+----------+----------+
| Opening valuation | - | - | 31,179 | 2,939 | 88 | 34,206 |
+---------------------+---------+------------+----------+----------+----------+----------+
| | | | | | | |
+---------------------+---------+------------+----------+----------+----------+----------+
| Movements in the | 1,072 | 992 | 8,541 | 934 | - | 11,539 |
| year: | | | | | | |
+---------------------+---------+------------+----------+----------+----------+----------+
| Purchases at cost | | | | | | |
+---------------------+---------+------------+----------+----------+----------+----------+
| Sales | | | | | | |
+---------------------+---------+------------+----------+----------+----------+----------+
| - proceeds | (5) | - | (9,888) | (528) | - | (10,421) |
+---------------------+---------+------------+----------+----------+----------+----------+
| - realised | - | - | (1,587) | (406) | - | (1,993) |
| gains/(losses) on | | | | | | |
| sales | | | | | | |
+---------------------+---------+------------+----------+----------+----------+----------+
| (Decrease)/Increase | 67 | (62) | (9,669) | (879) | (5) | (10,505) |
| in fair value | | | | | | |
+---------------------+---------+------------+----------+----------+----------+----------+
| | | | | | | |
+---------------------+---------+------------+----------+----------+----------+----------+
| Closing valuation | 1,134 | 973 | 18,576 | 2,060 | 83 | 22,826 |
+---------------------+---------+------------+----------+----------+----------+----------+
| | | | | | | |
+---------------------+---------+------------+----------+----------+----------+----------+
| Closing book cost | 1,067 | 992 | 21,195 | 2,832 | 2 | 26,088 |
+---------------------+---------+------------+----------+----------+----------+----------+
| Closing fair value | 67 | (19) | (2,619) | (772) | 81 | (3,262) |
| adjustment | | | | | | |
+---------------------+---------+------------+----------+----------+----------+----------+
| | 1,134 | 973 | 18,576 | 2,060 | 83 | 22,826 |
+---------------------+---------+------------+----------+----------+----------+----------+
+-----------------------------+----------+-----+-----------+----------+---------+
| | | | 2009 | | 2008 |
+-----------------------------+----------+-----+-----------+----------+---------+
| | | | GBP'000 | | GBP'000 |
+-----------------------------+----------+-----+-----------+----------+---------+
| Realised (losses)/gains on | | | (1,993) | | 2,371 |
| sale of investments | | | | | |
+-----------------------------+----------+-----+-----------+----------+---------+
| Capital distributions | | | 24 | | 23 |
| received | | | | | |
+-----------------------------+----------+-----+-----------+----------+---------+
| Decrease in fair value | | | (10,505 | | (5,473) |
+-----------------------------+----------+-----+-----------+----------+---------+
| | | | | | |
+-----------------------------+----------+-----+-----------+----------+---------+
| Losses on investments | | | (12,474) | | (3,079) |
+-----------------------------+----------+-----+-----------+----------+---------+
| | | | | | |
+-----------------------------+----------+-----+-----------+----------+---------+
| | | | 2009 | | 2008 |
+-----------------------------+----------+-----+-----------+----------+---------+
| 9. Debtors | | | GBP'000 | | GBP'000 |
+-----------------------------+----------+-----+-----------+----------+---------+
| Dividends due | | | 68 | | 50 |
+-----------------------------+----------+-----+-----------+----------+---------+
| Interest due | | | 4 | | 2 |
+-----------------------------+----------+-----+-----------+----------+---------+
| | | | 72 | | 52 |
| | | | | | |
+-----------------------------+----------+-----+-----------+----------+---------+
| | | | 2009 | | 2008 |
+-----------------------------+----------+-----+-----------+----------+---------+
| 10. Creditors | | | GBP'000 | | GBP'000 |
+-----------------------------+----------+-----+-----------+----------+---------+
| Sundry creditors and | | | 44 | | 39 |
| accruals | | | | | |
+-----------------------------+----------+-----+-----------+----------+---------+
11. Financial instruments and derivatives
The holding of investments involves certain inherent risks. Events may occur
that would result in either a reduction in the company's net assets or a
reduction of revenue returns. Set out below are the principal risks inherent to
the company's activities and the actions taken to manage those risks. The major
risk arising from the company's financial instruments is market price risk. The
Board reviews and agrees policies for reviewing these risks and these are
summarised below.
The carrying value of the Company's investments, debtors, cash at bank and
current liabilities is considered to be a fair approximation of their fair
value.
Albany Investment Trust Plc had no defaults during the period in respect of
borrowings.
Financial risk management
(i) Market risk analysis
Market price risk arises mainly from uncertainty about the future prices of the
financial instruments used in the company's business. It represents the
potential loss the company might suffer through holding market positions in the
face of price movements and movements in exchange rates. The risk is monitored
by the Board on a monthly basis and on a daily basis by the Investment Manager.
95% of the company's net assets are invested in quoted equities.
Investment value sensitivity
The following table illustrates the sensitivity of the net result for the year
to a resonably possible change in quoted equity valuations of +10% and -10%
(2008: +10% and -10%), with effect from the beginning of the year. The
calculations are based on Albany Investment Trust Plc's investments held at each
balance sheet date. All other variables are held constant.
2009 2009 2008 2008
GBP'000 GBP'000 GBP'000 GBP'000
+10% -10% +10% -10%
Net result for the year +2274 -(2274) +3,412 -(3,412)
(ii) Credit risk analysis
Albany Investment Trust Plc's management considers that all the above financial
assets are not impaired for each of the reporting dates under review and are of
good credit quality and no amounts are past due. Albany Investment Trust Plc's
financial assets are not secured by collateral or other credit enhancements.
(iii) Currency risk
The company is exposed to translation foreign exchange risk as noted above under
market risk.
(iv) Interest rate risk
The company reviews the location and duration of its bank deposits to reduce the
impact of interest rate fluctuations.
(v) Credit risk
The main credit risk arises from investment transactions with the companys'
investment manager. Such transactions are normally settled within three days.
(vi) Liquidity risk analysis
The company seeks to manage financial risk, to ensure sufficient liquidity is
available to meet foreseeable needs and to invest cash assets safely and
profitability. Liquidity is ensured by the accumulation of investment income and
controls over the timing of investment purchaes and sales.
Albany Investment Trust Plc manages its liquidity needs by carefully monitoring
the investment markets and disinvesting where necessary. Liquidity needs are
monitored in various time bands, on a day to day and week to week basis, as well
as on the basis of a rolling 30 day projection. Long-term liquidity needs for a
180 day and a 360 day lookout period are identified monthly.
Albany Investment Trust Plc maintains cash to meet its liquidity requirements
for up to 30 day periods. Funding in regards to long term liquidity needs is
additionally secured by realising investments.
Albany Investment Trust Plc holds bank deposits with a limited number of
financial institutions.
+-------------+-------------+-----------+---------+
| Assets | | | |
| as 28 | | | |
| February | | | |
| 2009 | | | |
+-------------+-------------+-----------+---------+
| | Loans |Financial | Total |
| | and |assets at | |
| |receivables | fair | |
| | | value | |
| | | through | |
| | |profit or | |
| | | loss | |
+-------------+-------------+-----------+---------+
| | GBP'000 | GBP'000 |GBP'000 |
+-------------+-------------+-----------+---------+
| Investments | - | 22,826 | 22,826 |
+-------------+-------------+-----------+---------+
| Debtors | 72 | - | 72 |
+-------------+-------------+-----------+---------+
| Cash | 1,051 | - | 1,051 |
| in | | | |
| bank | | | |
| and in | | | |
| hand | | | |
+-------------+-------------+-----------+---------+
| | 1,123 | 22,826 | 23,949 |
+-------------+-------------+-----------+---------+
| | | | |
+-------------+-------------+-----------+---------+
| Assets | | | |
| as 29 | | | |
| February | | | |
| 2008 | | | |
+-------------+-------------+-----------+---------+
| | Loans |Financial | Total |
| | and |assets at | |
| |receivables | fair | |
| | | value | |
| | | through | |
| | |profit or | |
| | | loss | |
+-------------+-------------+-----------+---------+
| | GBP'000 | GBP'000 |GBP'000 |
+-------------+-------------+-----------+---------+
| Investments | - | 34,206 | 34,206 |
+-------------+-------------+-----------+---------+
| Debtors | 52 | - | 52 |
+-------------+-------------+-----------+---------+
| Cash | 2,071 | - | 2,071 |
| in | | | |
| bank | | | |
| and in | | | |
| hand | | | |
+-------------+-------------+-----------+---------+
| | ,123 | 34,206 | 36,329 |
+-------------+-------------+-----------+---------+
At 29 February 2008, Albany Investment Trust Plc's liabilities have contractual
maturities which are summarised below:
+----------+---------+---------+
| | Current | Current |
| | with 6 | with 6 |
| | months | months |
+----------+---------+---------+
| | 2009 | 2008 |
+----------+---------+---------+
| |GBP'000 |GBP'000 |
+----------+---------+---------+
| Accrued | 44 | 39 |
| expenses | | |
+----------+---------+---------+
The above contractual maturities reflect the gross undiscounted cash flows,
which are equivalent to the carrying values of the liabilities at the balance
sheet date.
Significant accounting policies
Details of the significant accounting policies and methods adopted, including
the criteria for recognition, the basis of measurement and the basis on which
income and expenses are recognised, in respect of each class of financial asset,
financial liability and equity instrument are disclosed in the accounting
policies.
+------------------------+--------+----------+-----+------------+------+---------+
| | | Capital | | Capital | | Revenue |
| | | reserve | | reserve | | |
+------------------------+--------+----------+-----+------------+------+---------+
| | | - | | - | | reserve |
| | | realised | | unrealised | | |
+------------------------+--------+----------+-----+------------+------+---------+
| 12. Reserves | | GBP'000 | | GBP'000 | | GBP'000 |
+------------------------+--------+----------+-----+------------+------+---------+
| At beginning of year | | 32,526 | | 86 | | 1,673 |
+------------------------+--------+----------+-----+------------+------+---------+
| Net loss on | | (1,993) | | - | | - |
| realisation of | | | | | | |
| investments | | | | | | |
+------------------------+--------+----------+-----+------------+------+---------+
| Expenses allocated to | | (103) | | - | | - |
| capital reserve | | | | | | |
+------------------------+--------+----------+-----+------------+------+---------+
| Capital distributions | | 24 | | - | | - |
| received | | | | | | |
+------------------------+--------+----------+-----+------------+------+---------+
| Decrease in fair value | | (10,500) | | (5) | | - |
+------------------------+--------+----------+-----+------------+------+---------+
| Net revenue for the | | - | | - | | 1,169 |
| year after tax | | | | | | |
+------------------------+--------+----------+-----+------------+------+---------+
| Dividends paid in the | | - | | - | | (977) |
| year | | | | | | |
+------------------------+--------+----------+-----+------------+------+---------+
| At end of year | | 19,954 | | 81 | | 1,865 |
+------------------------+--------+----------+-----+------------+------+---------+
The balance on the revenue reserve represents the company's distributable
reserves. The directors have proposed a final dividend for the year of
GBP616,000.
+-----------------------------+----------+-------+---------+-----------+---------+
| 13. Called-up share capital | | | 2009 | | 2008 |
+-----------------------------+----------+-------+---------+-----------+---------+
| Authorised: | | | GBP'000 | | GBP'000 |
+-----------------------------+----------+-------+---------+-----------+---------+
| 10,500,000 ordinary shares | | | 2,100 | | 2,100 |
| of 20p each | | | | | |
+-----------------------------+----------+-------+---------+-----------+---------+
| | | | | | |
+-----------------------------+----------+-------+---------+-----------+---------+
| Allotted, called-up and | | | | | |
| fully-paid: | | | | | |
+-----------------------------+----------+-------+---------+-----------+---------+
| 10,023,750 ordinary shares | | | 2,005 | | 2,005 |
| of 20p each | | | | | |
| | | | | | |
+-----------------------------+----------+-------+---------+-----------+---------+
| | | | | | |
+-----------------------------+----------+-------+---------+-----------+---------+
Dividends - The ordinary shares carry a right to receive dividends. Interim
dividends are determined by the Directors, whereas the proposed final dividend
is subject to shareholder approval.
Capital entitlement - On winding up, after meeting the liabilities of the
Company, the surplus assets will be paid to ordinary shareholders in proportion
to their shareholdings.
Voting - on a show of hands, every ordinary shareholder present in person or by
proxy has one vote and on a poll every ordinary shareholder present in person
has one vote for every share he/she holds and a proxy has one vote for every
share in respect of which he/she is appointed.
14. Net asset value per share
The net asset value per share and the net asset values attributable to each
class of share at the year end calculated in accordance with the Articles of
Association were as follows:
+---------------------+----------------+----------+--------------+---------+-------+------+
| | Net asset | | Net | | | |
| | value | | asset | | | |
| | Per share | | value | | | |
| | attributable | | attributable | | | |
+---------------------+----------------+----------+--------------+---------+-------+------+
| | 2009 | 2008 | 2009 | 2008 | | |
| | | | GBP'000 | | | |
| | | | | GBP'000 | | |
+---------------------+----------------+----------+--------------+---------+-------+------+
| | 238.48p | 362.04p | 23,905 | 36,290 | | |
+---------------------+----------------+----------+--------------+---------+-------+------+
| | | | | | | |
+---------------------+----------------+----------+--------------+---------+-------+------+
| | | | | | | |
+---------------------+----------------+----------+--------------+---------+-------+------+
Basic net asset value per ordinary share is based on net assets and on
10,023,750 (2007: 10,023,750) ordinary shares.
15. Analysis of changes in net funds during the year
2009 2008
GBP'000 GBP'000
Beginning of year 2,071 578
Net cash (outflow)/inflow (1,020) 1,493
End of year1,051 2,071
Analysis of balances:
Cash at bank and in hand 1,051 2,071
16. Reconciliation of net total return on ordinary activities before taxation to
net cash inflow from operating activities
2009 2008
GBP'000 GBP'000
Net total return on ordinary activities before taxation (11,408)(2,120)
Add: Realised losses/(gains) on sale of investments1,993 (2,371)
Add: Fair value movements10,505 5,473
Increase in debtors (20) (5)
Increase in sundry creditors and accruals 5 6
Net cash inflow from operating activities 1,075 983
17. Contingent liabilities
The company did not have any contingent liabilities at 28th February 2009 or
29th February 2008.
18. Related party transactions
The directors have delegated day-to-day investment decisions to Rathbone
Investment Management Limited (RIM).
The appointment is for an indefinite period, subject to six months' notice by
either party. RIM also provide administration services for the company. A
management fee is payable of 0.7% per annum on the first GBP35m of the total
value of investments and cash held within the portfolio and 0.5% thereafter, as
well as a commission of GBP10 charged on acquisitions and disposals of
investments. RIM is a wholly-owned subsidiary of Rathbone Bros Plc, a listed
FTSE 250 company, specialising in investment management for companies, private
clients, trusts and pensions. Rathbone is regulated by the FSA and more details
can be found on its website www.rathbones.com.
Fees of GBP150,339 (2008: GBP290,575) were payable to RIM during the year and
are made up as follows:
2009 2008
GBP'000 GBP'000
Investment management fees121 185
Administration fees29 32
Dealing commission - sales - 40
- purchases - 34
VAT refunded(82) -
68 291
In June 2007 the European Court of Justice ruled that investment trust
management fees should be exempt from VAT and this decision has now been
accepted by HM Revenue and Customs. The result of this decision is that future
management fees will not be subject to VAT and the Company has recovered some of
the VAT incurred on past management fees.
19. Capital management policies and procedures
The company's capital management objectives are:
To ensure the company's ability to continue as a going concern
To provide an adequate return to shareholders by investing in an appropriate
portfolio of listed entities
The company's equity base is largely fixed and therefore capital is sourced
through retained earnings and investment disposals.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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