TIDMAVC
RNS Number : 2753Q
Aberdeen Development Capital PLC
30 July 2010
ABERDEEN DEVELOPMENT CAPITAL PLC
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 MAY 2010
1. CHAIRMAN'S STATEMENT
Background
The year ended 31 May 2010 has been characterised by a low level of portfolio
activity, driven by the continuing challenging market conditions facing small
and medium sized businesses. However, towards the year end there were
encouraging signs of an improvement in market sentiment which has allowed three
successful realisations to take place.
As a result of the lack of corporate activity during the economic downturn, the
Group was not in a position to repay the Zero dividend preference ("ZDP") shares
of ADC Zeros 2010 PLC which were due for final redemption on 30 April 2010.
Shareholders meetings were therefore convened with the purpose of seeking an
extension to the life of the 2010 ZDPs until 30 April 2012, as outlined in the
Circular to shareholders of 2 March 2010, and this proposal was duly approved by
all shareholder classes at EGM's held earlier this year.
Despite the difficult market conditions, it is pleasing to note that two returns
of capital to shareholders were possible during the year. Firstly on 16 June
2009 a total of GBP0.5 million was returned to shareholders, with ZDP
shareholders receiving 2.6p per share and Ordinary shareholders receiving 0.3p
per share, and then on 28 May 2010, GBP3 million was returned to shareholders
with ZDP shareholders receiving 20p per share. To date ZDP shareholders have
received 88.6p per share against their issue price of 100p and their final
entitlement at 30 April 2012 now stands at 42.11p. Ordinary shareholders have to
date received 7.3p per share.
Performance
The net asset value per Ordinary share ("NAV") fell from 10.1p to 7.8p, of which
some 1.5p was attributable to the annual allocation of entitlement to holders of
ZDP shares.
Given the tough trading environment for certain portfolio companies, the
illiquidity of a number of holdings, and also the proximity of the Zero
repayment date in 2012, the Board has written down the carrying value of a
number of portfolio investments, details of which can be found in the Manager's
Report.
Dividend
In last year's report I advised that due to the diminishing number of yielding
investments in the portfolio as the better quality assets are realised, the
frequency of dividends would be reduced from a quarterly basis to a final
dividend payable subject to approval by Ordinary shareholders at the Annual
General Meeting. In recommending a final dividend of 0.5 pence per share, the
Board is mindful both of the entitlement of Ordinary shareholders to share in
any revenue surpluses, but also of the need to conserve cash to meet the primary
objective of returning capital to shareholders as part of the ongoing winding up
of the Company.
Portfolio Activity
In accordance with the investment objective, no new investments have been made
during the year and there were no calls for follow-on investment.
The most significant realisation during the year was that of Norson Holdings,
which occurred in April. The Company acquired an interest in Norson Holdings,
the hydraulics division of former investee company Norson Group, as part of the
successful sale of that company in 2007, at a book cost of GBP79,000. Having
traded profitably for the last three years, Norson Holdings has been acquired by
EnerMech Limited, an Aberdeen based company which provides mechanical
engineering products and services to the energy industry. Under the terms of the
sale ADC received cash of GBP1.604 million, with the prospect of receiving up to
a further GBP91,000 in deferred consideration proceeds upon satisfactory
conclusion of certain warranties over the next twelve months. The disposal
represented an uplift of GBP604,000 to carrying value, some 1.69p per Ordinary
share. In line with the Company's policy no deferred consideration proceeds will
be recognised in the accounts until received. Over the lifetime of the
investment, an internal rate of return ("IRR") of 195.6% was generated.
In May, two further successful exits were achieved; holdings in Homelux Nenplas
and Oliver Kay Holdings being acquired by a consortium of existing shareholders.
The holding in Homelux Nenplas generated proceeds of GBP560,000 compared with
cost and a previous carrying value of GBP316,000 whilst the disposal of Oliver
Kay Holdings generated proceeds of GBP550,000 compared with cost and a previous
carrying value of GBP497,000. The respective IRRs of the investments over their
lifetime were 23.5% and 13.8%.
Further small redemptions were received during the year as well as a small
amount of final liquidation proceeds, which are noted in the Manager's Report.
Unsurprisingly, perhaps, given the strength and depth of the economic downturn,
performance has been mixed throughout the remaining investments within the
portfolio. Whilst a number, such as Tennants Consolidated, Cash Bases and
Enpure, continue to perform creditably, others, such as THL Midlands, have yet
to see a return to former levels of trading, and, disappointingly, one
investment, the Scottish housebuilder TLA Holdings, fell into administration.
VAT Recovery
The Company accepted the Manager's offer to refund 100% of VAT charged on
investment management fees for the period 1 January 2004 to 31 August 2007 and
the amounts recoverable by the Manager from HMRC in respect of prior periods. As
a result GBP559,000 has now been received in respect of the period 1 January
2001 to 31 August 2007 and this has been recognised within the financial
statements and allocated to revenue and capital in accordance with the
underlying accounting policy. A claim in respect of the period 1 January 1990 to
3 December 1996 remains to be settled between the Manager and HMRC and once
agreement is reached this will be recognised in the financial statements and
allocated to revenue and capital, again in accordance with the underlying
accounting policy during the period in which the VAT was paid.
No account has been taken for any interest due on the above amount or claims for
the earlier period, which are still to be agreed with HMRC.
Annual General Meeting
The Annual General Meeting ("AGM") has been convened for Wednesday, 27th October
2010 at 10 Queen's Terrace, Aberdeen and the Board looks forward to meeting any
shareholders who wish to attend. I would be grateful if you would confirm your
attendance by completing the notice that accompanies the Annual Report and
returning it together with an indication of any particular questions that you
would like to ask.
Mr Gilbert, Mr Scott and I will be retiring by rotation at the AGM and your
Board, having reviewed the proposed re-elections, and bearing in mind the
wind-up nature of the Company, recommends that shareholders vote in favour of
their reappointment.
The Future
The Board's primary objective is to maximise the value of remaining investments
in order to return as much cash as possible to shareholders. The exact amount
and timing will of course be uncertain, due largely to the illiquid nature of
the investments and the continuing fragile economic climate, but the extension
to the life of the 2010 ZDP shares should enhance prospects for returns.
John Milligan
Chairman
30 July 2010
2. MANAGER'S REPORT
Background
The year under review proved to be another challenging one in which to progress
the orderly realisation programme sought by shareholders in 2007. The paucity of
available credit facilities in the market place has not only curtailed merger
and acquisition activity as companies seek to position themselves for sale but
also hampered trading activity in certain businesses. Consequently, exit
opportunities have been restricted and trading performance has been mixed
although the management teams of a number of holdings have dealt with the
recessionary pressures commendably.
Net Asset Value Performance
+----------------+--------------------------------+--------+--------+
| Audited NAV per Ordinary share as at 31 May 2009 | 10.1p |
+----------------------------------------------------------+--------+
| | | | |
+----------------+--------------------------------+--------+--------+
| Major Uplifts | | | |
+----------------+--------------------------------+--------+--------+
| Norson | | 3.5p | |
| Holdings | | | |
+----------------+--------------------------------+--------+--------+
| Homelux | | 0.7p | 4.2p |
| Nenplas | | | |
+----------------+--------------------------------+--------+--------+
| | | | |
+----------------+--------------------------------+--------+--------+
| Major | | | |
| Downgrades | | | |
+----------------+--------------------------------+--------+--------+
| Pilgrim | | (0.7)p | |
| Systems | | | |
+----------------+--------------------------------+--------+--------+
| Tennants | | (1.3)p | |
| Consolidated | | | |
+----------------+--------------------------------+--------+--------+
| THL Midlands (formerly Transys Holdings) | (2.2)p | |
+-------------------------------------------------+--------+--------+
| TLA Holdings | | (1.1)p | (5.3)p |
+----------------+--------------------------------+--------+--------+
| | | | |
+----------------+--------------------------------+--------+--------+
| Appropriation to Zero dividend preference shares | (1.5)p |
+----------------------------------------------------------+--------+
| Return of capital to Ordinary shareholders | (0.3)p |
+----------------------------------------------------------+--------+
| VAT Repayment | 0.8p |
+----------------------------------------------------------+--------+
| Other movements | (0.2)p |
+----------------------------------------------------------+--------+
| Audited NAV per Ordinary share as at 31 May 2010 | 7.8p |
+----------------+--------------------------------+--------+--------+
Investments
There were no new or follow-on investments during the year, however GBP49,000
loan stock interest due from THL Midlands was rolled over into loan stock.
Realisations
During the year there were a number of realisations from the unlisted portfolio.
+-----------------------------------+----------+---------+-------------+
| | Proceeds | Cost | Gain/(Loss) |
+-----------------------------------+----------+---------+-------------+
| Company | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------+----------+---------+-------------+
| Cash Bases | 31 | 2 | 29 |
+-----------------------------------+----------+---------+-------------+
| Fispak | 55 | 55 | - |
+-----------------------------------+----------+---------+-------------+
| Homelux Nenplas | 560 | 316 | 244 |
+-----------------------------------+----------+---------+-------------+
| Norson Holdings | 1,604 | 79 | 1,525 |
+-----------------------------------+----------+---------+-------------+
| Oliver Kay Holdings | 550 | 497 | 53 |
+-----------------------------------+----------+---------+-------------+
| Riverdale PublishingA | - | 617 | (617) |
+-----------------------------------+----------+---------+-------------+
| Scottish Equity PartnershipA | 10 | 246 | (236) |
| Tuscan Energy GroupA | - | 1,000 | (1,000) |
+-----------------------------------+----------+---------+-------------+
| Total | 2,810 | 2,812 | (2) |
+-----------------------------------+----------+---------+-------------+
AInvestments written down to GBPnil in prior years; liquidation process now
complete.
Changes in Carrying Values
In attributing carrying values to investments the Board has considered the
illiquid nature of unlisted holdings and applied a discount on a case by case
basis to arrive at a value which represents a best estimate of net realisable
value. The Board has a policy of not increasing the value of a holding unless
the failure to do so would result in a material understatement of the net assets
of the Group. Provisions against the value of underperforming investments are
normally applied at the year end or half year end, however, if there is an
imminent risk of the underlying business failing then an immediate provision is
made.
Valuation Principles
The unlisted portfolio is valued at fair value in accordance with the
International Private Equity and Venture Capital Valuation Guidelines.
+---------------------------------------+---------------------+
| Methodology | Category |
+---------------------------------------+---------------------+
| Earnings Multiple | Primary |
+---------------------------------------+---------------------+
| Price of Recent Investment | Primary |
+---------------------------------------+---------------------+
| Net Assets | Primary |
+---------------------------------------+---------------------+
| Industry Valuation Benchmarks | Secondary |
+---------------------------------------+---------------------+
Earnings multiple - this methodology is likely to be appropriate for an
investment in an established business with an identifiable stream of continuing
earnings that can be considered to be maintainable. A multiple is applied to the
earnings of the business being valued in order to derive a value for the
business. In this case a discount used in the investment's valuation is
typically 25%-50% of the listed equivalent rating to reflect a lack of
marketability.
Price of recent investment - this methodology is considered where there has been
a recent investment in the company, to base the valuation on the price of that
investment. Where the investment being valued was itself made recently, its cost
will generally provide a good indication of value. The length of period for
which it would remain appropriate to use this methodology for a particular
investment will depend on the specific circumstances of the case, but a period
of one year is often applied in practice.
Net assets - this methodology is likely to be considered appropriate for a
business whose value derives mainly from the underlying value of its assets
rather than its earnings. The methodology may also be appropriate for a business
that is not making an adequate return on assets and for which greater value can
be realised by liquidating the business and selling its assets. It may therefore
be appropriate, in certain circumstances, for valuing investments in loss-making
companies and companies making only marginal levels of profits.
Industry valuation benchmarks - a number of industries have industry-specific
valuation benchmarks, including the information technology sector and service
sectors where long-term contracts are a key feature and use multiples of revenue
as a valuation benchmark. These industry norms are often based on the assumption
that investors are willing to pay for turnover or market share, and that the
normal profitability of businesses in the industry does not vary much.
The portfolio is valued at fair value and in the absence of the requirement to
realise assets over the next two years International Private Equity and Venture
Capital Valuation Guidelines would normally be applied. However, the Board
believes that these Guidelines based on usual methodologies relating to
earnings, recent transactions, net assets or industry benchmarks are not
particularly relevant in the current circumstances.
Where there is no relevant methodology the Board will apply a value based on an
assessment of market value, taking into account factors such as trading, the
size of the investment and its liquidity.
Outlook
Although some progress has been made in recent months realising particular
holdings we expect uncertain market conditions to persist in the short term
which will undoubtedly impact adversely on the ability to achieve exits unless
more liquidity enters capital markets. However, the Managers believe the sectors
in which some investee companies operate will remain attractive to buyers and we
will seek to realise value for shareholders where opportunities exist.
Aberdeen Asset Managers Limited
Manager
30 July 2010
3. RESULTS
Financial Highlights
+-----------------------------------+--------+----------+---------+
| | 31May | 31 May | % |
| | 2010 | 2009 | change |
+-----------------------------------+--------+----------+---------+
| Total assets (GBP'000) | 8,378 | 12,072A | -30.6% |
+-----------------------------------+--------+----------+---------+
| Total equity shareholders' funds | 2,786 | 3,620 | -23.0% |
| (Net assets) (GBP'000) | | | |
+-----------------------------------+--------+----------+---------+
| Share price (mid market) | 1.85p | 6.75p | -72.6% |
+-----------------------------------+--------+----------+---------+
| Net Asset Value per share | 7.80p | 10.13p | -23.0% |
+-----------------------------------+--------+----------+---------+
| Discount to Net Asset Value | -76.3% | -33.4% | |
+-----------------------------------+--------+----------+---------+
| FTSE Small Cap Index (ex | 2249.0 | 2290.9 | -1.8% |
| Investment Trusts) | | | |
+-----------------------------------+--------+----------+---------+
| Actual gearing | 167.5% | 197.0% | |
+-----------------------------------+--------+----------+---------+
| Potential gearing | 200.7% | 233.5% | |
+-----------------------------------+--------+----------+---------+
| Total expense ratio | 2.9% | 2.2% | |
+-----------------------------------+--------+----------+---------+
| | | | |
+-----------------------------------+--------+----------+---------+
| Earnings | | | |
+-----------------------------------+--------+----------+---------+
| Total return per share | (1.8)p | (6.2)p | |
+-----------------------------------+--------+----------+---------+
| Revenue return per share | 0.3p | 0.7p | |
+-----------------------------------+--------+----------+---------+
| Revenue reserves (GBP'000) | 153 | 153 | |
+-----------------------------------+--------+----------+---------+
A restated to exclude 2010 ZDP shares entitlement which was classed as a current
liability, their life having been extended from 30 April 2010 to 30 April 2012
during the year.
Performance (total return)
+--------------------------------+---------+---------+---------+
| | 1 year | 3 year | 5 year |
+--------------------------------+---------+---------+---------+
| | % | % | % |
| | return | return | return |
+--------------------------------+---------+---------+---------+
| Share price | -70.2 | -87.0 | -91.9 |
+--------------------------------+---------+---------+---------+
| Net Asset Value | -18.8 | -57.7 | -71.9 |
+--------------------------------+---------+---------+---------+
| FTSE Small Cap Index (ex | 20.9 | -38.8 | -6.7 |
| Investment Trusts) | | | |
+--------------------------------+---------+---------+---------+
Dividends
+-----------------+--------+---------------+------------+------------+
| Dividend | Rate | Xd Date | Record | Payment |
| | | | Date | Date |
+-----------------+--------+---------------+------------+------------+
| Proposed final | 0.50p | 29 | 1 October | 29 October |
| 2010 | | September2010 | 2010 | 2010 |
+-----------------+--------+---------------+------------+------------+
+-----------------+--------+------------+------------+--------------+
| Dividend | Rate | Xd Date | Record | Payment |
| | | | Date | Date |
+-----------------+--------+------------+------------+--------------+
| First Interim | 0.25p | 15 October | 17 October | 14 |
| paid | | 2008 | 2008 | November2008 |
+-----------------+--------+------------+------------+--------------+
| Second Interim | 0.25p | 14 January | 16 January | 13 |
| paid | | 2009 | 2009 | February |
| | | | | 2009 |
+-----------------+--------+------------+------------+--------------+
| Third Interim | 0.25p | 8 April | 14 April | 13 May |
| paid | | 2009 | 2009 | 2009 |
+-----------------+--------+------------+------------+--------------+
| Fourth Interim | 0.25p | 1 July | 3 July | 31 July |
| paid | | 2009 | 2009 | 2009 |
+-----------------+--------+------------+------------+--------------+
| Total 2009 | 1.00p | | | |
+-----------------+--------+------------+------------+--------------+
4. BUSINESS REVIEW
A review of the Company's activities is given in the Chairman's Statement in
Section 1 and the Manager's Report in Section 2. This includes a review of the
business of the Company and its principal activities, recommended dividends and
likely future developments of the business. The major risks associated with the
Company are detailed in the section on "Principal Risks and Uncertainties".
Monitoring Performance - Key Performance Indicators
An outline of the performance, market background, investment activity and
portfolio strategy during the period under review, as well as the market
outlook, is provided in the Chairman's Statement and Manager's Report.
The Key Performance Indicators for the Company, NAV performance (total return),
discount of share price to net asset value and share price performance, are
detailed in "Results".
Principal Activity
The Company was incorporated as a public limited company on 22 April 1986 and
was listed on the London Stock Exchange on 8 September 1986. The Company's
registration number is SC 98542.
The business of the Company is that of an investment trust investing development
capital in private companies in the UK and by the acquisition of companies or
other entities investing development capital.
Status
The Company is an investment company as defined by Section 833 of the Companies
Act 2006 and is registered as a public limited company.
The Company has been provisionally approved by the Inland Revenue as an
investment trust under Section 842 of the Income and Corporation Taxes Act 1988
for the year ended 31 May 2009. The Company has subsequently conducted its
affairs so as to enable it to continue to qualify for such approval.
The Company is a qualifying trust for the purposes of Individual Savings
Accounts and it is the Directors' intention that the Company should continue to
be a qualifying trust.
Investment Objective and Investment Policy
The Board's objective is to conduct an orderly realisation of the Group's assets
in a manner which maximises value for shareholders, in accordance with proposals
approved by shareholders on 3 August 2007. It is intended that the mechanism for
returning surplus cash to shareholders over time be through a combination of ad
hoc returns of capital and buying back shares through the market.
Principal Risks and Uncertainties
Investments in smaller unlisted companies carry substantially greater risk, in
terms of price and liquidity, than investments in larger companies or in
companies listed on the Official List. In addition, many of the businesses in
which the Company invests may be exposed to the risk of political change,
exchange controls, tax or other regulations that may affect their value and
marketability.
As the volume of the Group's shares traded on the market is likely to be small,
the shares may trade at a significant discount to the Net Asset Value.
The Group currently utilises gearing in the form of ZDP shares held within its
subsidiary companies. Gearing has the effect of exacerbating market falls and
market gains.
Going Concern
The Company has announced its intention to conduct an orderly realisation of its
investment portfolio and to that extent the financial statements have been
prepared on a basis other than that of a going concern which includes, where
appropriate, writing down the Company's net assets to a net realisable value.
In March and April 2010 separate class and general meetings were held for the
Company, ADC Zeros 2010 PLC and ADC Zeros 2012 PLC at which proposals to extend
the life of the ZDP shares of ADC Zeros 2010 PLC until 30 April 2012 were
passed.
5. 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 are required to prepare the Group
financial statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union and Article 4 of the IAS
Regulation. Under company law the Directors must not approve the accounts unless
they are satisfied that they give a true and fair view of the state of affairs
of the Company and of the profit or loss of the company for that period. In
preparing these financial statements, International Accounting Standard 1
requires that the Directors:
- properly select and apply accounting policies;
- present information, including accounting policies, in a manner that provides
relevant, reliable, comparable and understandable information;
- provide additional disclosures when compliance with the specific requirements
in IFRSs are insufficient to enable users to understand the impact of particular
transactions, other events and conditions on the entity's financial position and
financial performance; and
- make an assessment of the Company's ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the company's transactions and 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 2006.
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.
The Directors are responsible for the maintenance and integrity of the corporate
and financial information included on the company's website. Legislation in the
United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Responsibility statement
We confirm that to the best of our knowledge:
- the financial statements, prepared in accordance with the applicable
International Financial Reporting Standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Company and
the undertakings included in the consolidation taken as a whole; and
- the management report, which is incorporated into the Directors' report,
includes a fair review of the development and performance of the business and
the position of the Company and the undertakings included in the consolidation
taken as a whole, together with a description of the principal risks and
uncertainties that they face.
For Aberdeen Development Capital PLC
John Milligan
Chairman
30 July 2010
6. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 May 2010
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| | Year ended | Year ended |
+------------------------------------+-----------------------------+-----------------------------+
| | 31 May 2010 | 31 May 2009 |
+------------------------------------+-----------------------------+-----------------------------+
| | Notes | Revenue | Capital | Total | Revenue | Capital | Total |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| Interest income | 3 | 319 | - | 319 | 370 | - | 370 |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| Dividend income | 3 | 73 | - | 73 | 149 | - | 149 |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| Other income | 3 | 4 | - | 4 | 2 | - | 2 |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| | | _______ | _____ | _____ | _______ | _____ | _____ |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| | | 396 | - | 396 | 521 | - | 521 |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| Losses on held at fair | 10 | - | (230) | (230) | - | (2,130) | (2,130) |
| value investments | | | | | | | |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| | | | | | | | |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| Expenses | | | | | | | |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| Management fees | 4 | (33) | (67) | (100) | (33) | (67) | (100) |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| Other operating expenses | 5 | (291) | (97) | (388) | (226) | - | (226) |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| VAT recovered on | 18 | 95 | 193 | 288 | 89 | 182 | 271 |
| investment management fees | | | | | | | |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| | | _______ | _____ | _____ | _______ | _____ | _____ |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| Profit/(loss) before | | 167 | (201) | (34) | 351 | (2,015) | (1,664) |
| finance costs and taxation | | | | | | | |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| | | | | | | | |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| Finance costs | | | | | | | |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| Zero dividend preference | 6,14 | - | (526) | (526) | - | (431) | (431) |
| shares | | | | | | | |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| | | _______ | _____ | _____ | _______ | _____ | _____ |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| Profit/(loss) before | | 167 | (727) | (560) | 351 | (2,446) | (2,095) |
| taxation | | | | | | | |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| | | | | | | | |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| Taxation | 7 | (78) | - | (78) | (106) | - | (106) |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| | | _______ | _____ | _____ | _______ | _____ | _____ |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| Profit/(loss) for the year | 16 | 89 | (727) | (638) | 245 | (2,446) | (2,201) |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| | | _______ | _____ | _____ | _______ | _____ | _____ |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| Earnings per Ordinary | 9 | 0.25 | (2.04) | (1.79) | 0.69 | (6.85) | (6.16) |
| share - basic (pence) | | | | | | | |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
| | | _______ | _____ | _____ | _______ | _____ | _____ |
+----------------------------+-------+---------+---------+---------+---------+---------+---------+
The Company does not have any income or expense that is not included in
profit/(loss) for the year, and therefore the "Profit/(loss) for the year" is
also the "Total comprehensive income for the year" as defined in IAS 1
(revised).
All of the profit/(loss) and total comprehensive income is attributable to the
equity holders of Aberdeen Development Capital PLC. There are no minority
interests.
The total column of this statement represents the Statement of Comprehensive
Income of the Group, prepared in accordance with IFRS. The revenue and capital
columns are supplementary to this and are prepared under guidance published by
the Association of Investment Companies.
All items in the above statement derive from continuing operations.
The accompanying notes are an integral part of the financial statements.
7. BALANCE SHEETS
As at 31 May 2009
+------------------------+-------+----------+----------+----------+----------+
| | | Group | Company | Group | Company |
+------------------------+-------+----------+----------+----------+----------+
| | | 2010 | 2010 | 2009 | 2009 |
+------------------------+-------+----------+----------+----------+----------+
| | Notes | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------+-------+----------+----------+----------+----------+
| Non-current assets | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| Investments at fair | 10 | 7,590 | 5,390 | 10,649 | 8,199 |
| value through profit | | | | | |
| or loss | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| Subsidiary undertaking | 10 | - | 8 | - | 281 |
+------------------------+-------+----------+----------+----------+----------+
| | | _______ | _______ | _______ | _______ |
+------------------------+-------+----------+----------+----------+----------+
| | | 7,590 | 5,398 | 10,649 | 8,480 |
+------------------------+-------+----------+----------+----------+----------+
| Current assets | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| Cash and cash | | 925 | 544 | 1,319 | 803 |
| equivalents | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| Loans and receivables | 12 | 31 | 6,587 | 409 | 6,884 |
+------------------------+-------+----------+----------+----------+----------+
| | | _______ | _______ | _______ | _______ |
+------------------------+-------+----------+----------+----------+----------+
| | | 956 | 7,131 | 1,728 | 7,687 |
+------------------------+-------+----------+----------+----------+----------+
| Current liabilities | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| Financial liabilities | | (168) | (4,023) | (305) | (8,311) |
| measured at amortised | | | | | |
| cost | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| Zero dividend | 14 | - | - | (4,226) | - |
| preference shares | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| | | _______ | _______ | _______ | _______ |
+------------------------+-------+----------+----------+----------+----------+
| Total current | 13 | (168) | (4,023) | (4,531) | (8,311) |
| liabilities | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| | | _______ | _______ | _______ | _______ |
+------------------------+-------+----------+----------+----------+----------+
| Net current | | 788 | 3,108 | (2,803) | (624) |
| assets/(liabilities) | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| | | _______ | _______ | _______ | _______ |
+------------------------+-------+----------+----------+----------+----------+
| Total assets less | | 8,378 | 8,506 | 7,846 | 7,856 |
| current liabilities | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| Non-current | | | | | |
| liabilities | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| Zero dividend | 14 | (5,592) | - | (4,226) | - |
| preference shares | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| Amounts due to | 14 | - | (5,592) | - | (4,226) |
| subsidiary | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| | | _______ | _______ | _______ | _______ |
+------------------------+-------+----------+----------+----------+----------+
| Total net assets | | 2,786 | 2,914 | 3,620 | 3,630 |
+------------------------+-------+----------+----------+----------+----------+
| | | _______ | _______ | _______ | _______ |
+------------------------+-------+----------+----------+----------+----------+
| Equity | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| Share capital | 15 | 357 | 357 | 357 | 357 |
+------------------------+-------+----------+----------+----------+----------+
| Special reserve | 16 | 17,395 | 17,395 | 17,502 | 17,502 |
+------------------------+-------+----------+----------+----------+----------+
| Capital redemption | 16 | 12 | 12 | 12 | 12 |
| reserve | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| Capital reserve - | 16 | (13,926) | (14,020) | (13,494) | (13,845) |
| realised | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| Capital reserve - | 16 | (1,205) | (1,430) | (910) | (866) |
| unrealised | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| Revenue reserve | 16 | 153 | 600 | 153 | 470 |
+------------------------+-------+----------+----------+----------+----------+
| | | _______ | _______ | _______ | _______ |
+------------------------+-------+----------+----------+----------+----------+
| Total shareholders' | | 2,786 | 2,914 | 3,620 | 3,630 |
| funds | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| | | _______ | _______ | _______ | _______ |
+------------------------+-------+----------+----------+----------+----------+
| Equity shareholders' | | 2,786 | 2,914 | 3,620 | 3,630 |
| funds | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| | | | | | |
+------------------------+-------+----------+----------+----------+----------+
| Net asset value per | | 7.80 | 8.16 | 10.13 | 10.16 |
| Ordinary share - basic | | | | | |
| (pence) | | | | | |
+------------------------+-------+----------+----------+----------+----------+
The accompanying notes are an integral part of the financial statements.
8. STATEMENTS OF CHANGES IN EQUITY
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Group | | | Capital | Capital | Capital | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | Share | Special | redemption | reserve | reserve | Revenue | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| For year ended 31 | capital | reserve | reserve | realised | unrealised | reserve | Total |
| May 2010 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Net assets at 31 May | 357 | 17,502 | 12 | (13,494) | (910) | 153 | 3,620 |
| 2009 | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Return of capital to | - | (107) | - | - | - | - | (107) |
| Ordinary | | | | | | | |
| shareholders | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Dividends paid (note | - | - | - | - | - | (89) | (89) |
| 8) | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Net (loss)/gain on | - | - | - | (432) | (295) | 89 | (638) |
| ordinary activities | | | | | | | |
| after taxation | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | _______ | _______ | _______ | _______ | _______ | _______ | _______ |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Net assets at 31 May | 357 | 17,395 | 12 | (13,926) | (1,205) | 153 | 2,786 |
| 2010 | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | _______ | _______ | _______ | _______ | _______ | _______ | _______ |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | | | Capital | Capital | Capital | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | Share | Special | redemption | reserve | reserve | Revenue | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| For year ended 31 | capital | reserve | reserve | realised | unrealised | reserve | Total |
| May 2009 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Net assets at 31 May | 357 | 18,216 | 12 | (7,302) | (4,656) | 406 | 7,033 |
| 2008 | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Return of capital to | - | (714) | - | - | - | - | (714) |
| Ordinary | | | | | | | |
| shareholders | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Dividends paid (note | - | - | - | - | - | (498) | (498) |
| 8) | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Net (loss)/gain on | - | - | - | (6,192) | 3,746 | 245 | (2,201) |
| ordinary activities | | | | | | | |
| after taxation | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | _______ | _______ | _______ | _______ | _______ | _______ | _______ |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Net assets at 31 May | 357 | 17,502 | 12 | (13,494) | (910) | 153 | 3,620 |
| 2009 | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | _______ | _______ | _______ | _______ | _______ | _______ | _______ |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Company | | | Capital | Capital | Capital | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | Share | Special | Redemption | Reserve | Reserve | Revenue | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| For year ended 31 | Capital | Reserve | Reserve | Realised | Unrealised | Reserve | Total |
| May 2010 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Net assets at 31 May | 357 | 17,502 | 12 | (13,845) | (866) | 470 | 3,630 |
| 2009 | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Return of capital to | - | (107) | - | - | - | - | (107) |
| Ordinary | | | | | | | |
| shareholders | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Dividends paid (note | - | - | - | - | - | (89) | (89) |
| 8) | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Net (loss)/gain on | - | - | - | (175) | (564) | 219 | (520) |
| ordinary activities | | | | | | | |
| after taxation | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | _______ | _______ | _______ | _______ | _______ | _______ | _______ |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Net assets at 31 May | 357 | 17,395 | 12 | (14,020) | (1,430) | 600 | 2,914 |
| 2010 | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | _______ | _______ | _______ | _______ | _______ | _______ | _______ |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | | | Capital | Capital | Capital | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | Share | Special | Redemption | Reserve | Reserve | Revenue | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| For year ended 31 | Capital | Reserve | Reserve | Realised | Unrealised | Reserve | Total |
| May 2009 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Net assets at 31 May | 357 | 18,216 | 12 | (8,335) | (3,686) | 612 | 7,176 |
| 2008 | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Return of capital to | - | (714) | - | - | - | - | (714) |
| Ordinary | | | | | | | |
| shareholders | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Dividends paid (note | - | - | - | - | - | (498) | (498) |
| 8) | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Net (loss)/gain on | - | - | - | (5,510) | 2,820 | 356 | (2,334) |
| ordinary activities | | | | | | | |
| after taxation | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | _______ | _______ | _______ | _______ | _______ | _______ | _______ |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| Net assets at 31 May | 357 | 17,502 | 12 | (13,845) | (866) | 470 | 3,630 |
| 2009 | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | _______ | _______ | _______ | _______ | _______ | _______ | _______ |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
| | | | | | | | |
+----------------------+---------+---------+------------+----------+------------+---------+---------+
9. CASH FLOW STATEMENTS
For the year ended 31 May 2010
+---------------------------------------+---------+---------+---------+---------+
| | Year ended | Year ended |
+---------------------------------------+-------------------+-------------------+
| | 31 May 2010 | 31 May 2009 |
+---------------------------------------+-------------------+-------------------+
| | Group | Company | Group | Company |
+---------------------------------------+---------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------+---------+---------+---------+---------+
| Operating activities | | | | |
+---------------------------------------+---------+---------+---------+---------+
| Loss before tax | (560) | (520) | (2,095) | (2,334) |
+---------------------------------------+---------+---------+---------+---------+
| Bad debt expense | 87 | 12 | - | - |
+---------------------------------------+---------+---------+---------+---------+
| ZDP shares finance cost | 526 | - | 431 | - |
+---------------------------------------+---------+---------+---------+---------+
| Amounts due to subsidiary undertaking | - | 526 | - | 431 |
+---------------------------------------+---------+---------+---------+---------+
| Losses on investments held at fair | 230 | 263 | 2,130 | 2,402 |
| value through profit and loss | | | | |
+---------------------------------------+---------+---------+---------+---------+
| Purchases of investments held at fair | (49) | (49) | - | - |
| value through profit and loss | | | | |
+---------------------------------------+---------+---------+---------+---------+
| Sales of investments held at fair | 2,878 | 2,868 | 2,777 | 2,631 |
| value through profit and loss | | | | |
+---------------------------------------+---------+---------+---------+---------+
| Decrease/ (increase) in other | 291 | 285 | (105) | (125) |
| receivables | | | | |
+---------------------------------------+---------+---------+---------+---------+
| (Decrease)/increase in other payables | (129) | (62) | (14) | 162 |
+---------------------------------------+---------+---------+---------+---------+
| | _______ | _______ | _______ | _______ |
+---------------------------------------+---------+---------+---------+---------+
| Net cash inflow from operating | | | | |
| activities before interest and | 3,274 | 3,323 | 3,124 | 3,167 |
| corporation tax | | | | |
+---------------------------------------+---------+---------+---------+---------+
| | | | | |
+---------------------------------------+---------+---------+---------+---------+
| Corporation tax paid | (86) | - | (168) | - |
+---------------------------------------+---------+---------+---------+---------+
| Corporation tax refunded | - | - | 5 | - |
+---------------------------------------+---------+---------+---------+---------+
| | _______ | _______ | _______ | _______ |
+---------------------------------------+---------+---------+---------+---------+
| Net cash from operating activities | 3,188 | 3,323 | 2,961 | 3,167 |
+---------------------------------------+---------+---------+---------+---------+
| | | | | |
+---------------------------------------+---------+---------+---------+---------+
| Financial activities | | | | |
+---------------------------------------+---------+---------+---------+---------+
| Dividends paid on Ordinary shares | (89) | (89) | (498) | (498) |
+---------------------------------------+---------+---------+---------+---------+
| Return of capital on Ordinary shares | (107) | (107) | (714) | (714) |
+---------------------------------------+---------+---------+---------+---------+
| Return of capital on ZDP shares | (3,386) | (3,386) | (2,307) | (2,307) |
+---------------------------------------+---------+---------+---------+---------+
| Repurchase of ZDP shares | - | - | (286) | (286) |
+---------------------------------------+---------+---------+---------+---------+
| | _______ | _______ | _______ | _______ |
+---------------------------------------+---------+---------+---------+---------+
| Net cash used in financing activities | (3,582) | (3,582) | (3,805) | (3,805) |
+---------------------------------------+---------+---------+---------+---------+
| | _______ | _______ | _______ | _______ |
+---------------------------------------+---------+---------+---------+---------+
| Net decrease in cash and cash | (394) | (259) | (844) | (638) |
| equivalents | | | | |
+---------------------------------------+---------+---------+---------+---------+
| | | | | |
+---------------------------------------+---------+---------+---------+---------+
| Cash and cash equivalents at start of | 1,319 | 803 | 2,163 | 1,441 |
| year | | | | |
+---------------------------------------+---------+---------+---------+---------+
| | _______ | _______ | _______ | _______ |
+---------------------------------------+---------+---------+---------+---------+
| Cash and cash equivalents at end of | 925 | 544 | 1,319 | 803 |
| year | | | | |
+---------------------------------------+---------+---------+---------+---------+
| | _______ | _______ | _______ | _______ |
+---------------------------------------+---------+---------+---------+---------+
+---------------------------------------+---------+---------+---------+---------+
| Cash and cash equivalents at end of | | | | |
| year | | | | |
| are represented by: | 925 | 544 | 1,319 | 803 |
| Cash at bank | | | | |
+---------------------------------------+---------+---------+---------+---------+
| | _______ | _______ | _______ | _______ |
+---------------------------------------+---------+---------+---------+---------+
10. NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 May 2010
1. Principal activity
The principal activity of the Company is that of an investment trust company
within the meaning of Sections 1158-1159 of the Corporation Tax Act 2010
("s1158-1159 CTA 2010") (formerly Section 842 of the Income and Corporation
Taxes Act 1988).
2. Accounting policies
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRSs) adopted by the European Union. The Group
therefore complies with Article 4 of the EU IAS regulation.
(a) Basis of preparation
The financial statements have been prepared on a basis other than that of a
going concern which includes, where appropriate, writing down the Company's net
assets to a net realisable value. The financial statements do not include any
provision for the future costs of terminating the business of the Company except
to the extent that such were committed at the Balance Sheet date.
The financial statements are prepared under the historical cost convention,
except for the measurement at fair value of investments and in accordance with
the Statement of Recommended Practice 'Financial Statements of Investment Trust
Companies and Venture Capital Trusts' (issued in January 2009).
The Group adopted the amendments to IFRS 7 'Financial Instruments: Disclosures'
effective from 1 January 2009. The disclosures required by this standard are
given in notes 20 and 21.
(b) Group accounts
The Group accounts consolidate the accounts, on an acquisition accounting basis,
of the Company and its subsidiaries ADC Fund Limited Partnership, ADC (Glasgow)
Limited, ADC Zeros 2010 PLC and ADC Zeros 2012 PLC. All intra-group
transactions, balances, income and expenses are eliminated on consolidation.
(c) Associated undertaking
An associate is an entity over which the Group is in a position to exercise
significant influence, but does not control or jointly control, through
participation in the financial and operating policy decisions of the entity. The
Group's associates are accounted for in accordance with IAS 39: 'Financial
Instruments: Recognition and Measurement' ("IAS 39") as investments designated
at fair value through profit and loss, and in accordance with paragraph 1 of IAS
28: 'Investments in Associates' ("IAS 28") equity accounting is not required.
(d) Presentation of Consolidated Income Statement
In order to better reflect the activities of an investment trust company, and in
accordance with guidance issued by the AIC, supplementary information which
analyses the Consolidated Statement of Comprehensive Income between items of a
revenue and capital nature has been presented alongside the Consolidated
Statement of Comprehensive Income. In accordance with the Company's status as a
UK investment company under Section 833 of the Companies Act 2006, net capital
returns may not be distributed by way of dividend. Additionally, the net revenue
is the measure the Directors believe appropriate in assessing the Group's
compliance with certain requirements set out in Sections 1158-1159 of the
Corporation Tax Act 2010.
(e) Valuation of investments
Subsidiary and main company investments are all held at fair value through the
Consolidated Statement of Comprehensive Income.
Listed investments are measured initially at cost, and are recognised at trade
date.
For financial assets acquired, the cost is the fair value of the consideration.
Subsequent to initial recognition, all listed investments are measured at their
quoted bid prices without deduction for the estimated future selling costs.
Unlisted investments are valued by Directors at fair value having regard to
International Private Equity and Venture Capital Valuation Guidelines as far as
it is prudent to do so in light of the investment objective. They are valued at
cost unless subsequent financings or other circumstances indicate a different
valuation is appropriate. When a valuation is undertaken consideration is given
to the most recent information available, including the latest trading figures,
performance against forecast, management's view of prospects and the price of
transactions in the security.
Realisable value in the short term could differ materially from the amount which
these investments are included in the accounts.
(f) Movements in fair value
Changes in the fair value of all held at fair value assets are taken to the
Consolidated Statement of Comprehensive Income.
On disposal, realised gains and losses are also recognised in the Consolidated
Statement of Comprehensive Income.
+-------------------------------------------------------------------+
| (g) Income |
| Dividends receivable on 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 when it is reasonably certain |
| that they will be receivable. Other returns on non-equity shares |
| are recognised when the right to the return is established. |
+-------------------------------------------------------------------+
| The fixed return on a debt security is recognised when it is |
| reasonably certain that they will be receivable. Where the |
| Company has elected to receive its dividends in the form of |
| additional shares rather than in cash, the amount of cash |
| dividend is recognised as income. Any excess in the value of |
| shares received over the amounts of the cash is recognised in |
| capital reserves. |
+-------------------------------------------------------------------+
(h) Expenses and interest payable
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 acquisition of an investment are
charged to capital; and
- where a connection with the maintenance or enhancement of the value of the
investments can be demonstrated certain expenses are reported in the capital
column of the Consolidated Statement of Comprehensive Income. These are
investment management fee, performance fee and overdraft interest and have been
allocated 67% to capital and 33% to revenue in line with the Board's expected
long term split of returns, in the form of capital gains and income
respectively, from the investment portfolio of the Company.
(i) Cash and cash equivalents
Cash comprises cash in hand and demand deposits. Cash equivalents are
short-term, highly liquid investments that are readily convertible to known
amounts of cash and that are subject to insignificant risk of changes in value.
(j) Taxation
The charge for taxation is based on the taxable profits for the period. Deferred
taxation is accounted for using the balance sheet liability method based on the
percentage which was substantially enacted at the Balance Sheet date. Deferred
tax liabilities are recognised for all taxable temporary differences. Deferred
tax assets are recognised to the extent it is probable that taxable profits will
be available against which temporary differences can be utilised. In line with
the recommendations of the SORP, the allocation method used to calculate tax
relief on expenses presented against capital returns in the supplementary
information in the Consolidated Statement of Comprehensive Income is the
"marginal basis".
(k) Dividends payable
Dividends are recognised from the date on which they are declared ex-dividend.
+-------------------------------------------------+------------+------------+
| 3. Income | 2010 | 2009 |
+-------------------------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+-------------------------------------------------+------------+------------+
| Income from investments | | |
+-------------------------------------------------+------------+------------+
| Franked investment income | 73 | 149 |
+-------------------------------------------------+------------+------------+
| UK unfranked investment income | 314 | 257 |
+-------------------------------------------------+------------+------------+
| | __________ | __________ |
+-------------------------------------------------+------------+------------+
| | 387 | 406 |
+-------------------------------------------------+------------+------------+
| Other income | __________ | __________ |
+-------------------------------------------------+------------+------------+
| Deposit interest | 5 | 113 |
+-------------------------------------------------+------------+------------+
| Other income | 4 | 2 |
+-------------------------------------------------+------------+------------+
| | __________ | __________ |
+-------------------------------------------------+------------+------------+
| | 9 | 115 |
+-------------------------------------------------+------------+------------+
| Total income comprises: | __________ | __________ |
+-------------------------------------------------+------------+------------+
| Dividends | 73 | 149 |
+-------------------------------------------------+------------+------------+
| Interest | 319 | 370 |
+-------------------------------------------------+------------+------------+
| Other income | 4 | 2 |
+-------------------------------------------------+------------+------------+
| | __________ | __________ |
+-------------------------------------------------+------------+------------+
| | 396 | 521 |
+-------------------------------------------------+------------+------------+
| Income from investments | __________ | __________ |
+-------------------------------------------------+------------+------------+
| Unlisted UK | 387 | 406 |
+-------------------------------------------------+------------+------------+
| | __________ | __________ |
+-------------------------------------------------+------------+------------+
| | 387 | 406 |
+-------------------------------------------------+------------+------------+
| | __________ | __________ |
+-------------------------------------------------+------------+------------+
+-----------------------------+---------+---------+---------+---------+---------+---------+
| 4. Investment management | 2010 | 2009 |
| fee | | |
+-----------------------------+-----------------------------+-----------------------------+
| | Revenue | Capital | Total | Revenue | Capital | Total |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Investment management fee | 33 | 67 | 100 | 33 | 67 | 100 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
The Company has an agreement with Aberdeen Asset Managers Limited ("AAM") for
the provision of management services. This contract may be terminated subject to
twelve months prior notice of termination by either party. Management fees are
payable monthly in arrears, and are based on a fixed annual amount of GBP100,000
(GBP60,000 per annum from 1 June 2010). The basic fee shall be reduced by the
amount of any management fees or priority profit share payable to the Manager by
ADC Zeros 2010, ADC Zeros 2012 and ADC Fund Limited Partnership. The balance due
to AAM at the year end was GBP6,000 (2009 - GBP8,000). ADC Fund Limited
Partnership has a priority profit share agreement with Aberdeen GP Limited, a
subsidiary of AAM. The fee is payable quarterly in arrears and is based on an
annual amount of 1.47% of the gross asset value of the Limited Partnership. The
balance due to Aberdeen GP Limited at the year end was GBP8,000 (2009 -
GBP9,000).
An incentive fee of 20 per cent. is payable to the Manager (i) the amount by
which the aggregate returns of capital per Ordinary share of the Company paid on
or before 31 December 2012 exceed 35 pence multiplied by the number of Ordinary
shares in issue at the time of the relevant return of capital; and (ii) the
amount by which the repurchase price of an Ordinary share under the Buy Back
Programme exceeds the targeted return, being 35 pence less any returns of
capital paid in respect of the Capital Return Scheme up to a maximum of 35
pence, multiplied by the number of Ordinary shares bought back on the relevant
occasion.
+-----------------------------+---------+---------+---------+---------+---------+---------+
| 5. Other expenses | 2010 | 2009 |
+-----------------------------+-----------------------------+-----------------------------+
| | Revenue | Capital | Total | Revenue | Capital | Total |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Directors' fees | 41 | - | 41 | 41 | - | 41 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Auditors remuneration: | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| - audit (including | | | | | | |
| GBP14,000 (2009 GBP14,000) | 25 | - | 25 | 21 | - | 21 |
| relating to the parent | | | | | | |
| undertaking) | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| - for other services | - | - | - | 4 | - | 4 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| - tax compliance | 6 | - | 6 | 16 | - | 16 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| - tax advisory | - | - | - | - | - | - |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Other | 219 | 97 | 316 | 144 | - | 144 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | _______ | _______ | ______ | _______ | _______ | ______ |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | 291 | - | 388 | 226 | - | 226 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | _______ | _______ | ______ | _______ | _______ | ______ |
+-----------------------------+---------+---------+---------+---------+---------+---------+
During the year ended 31 May 2010 other expenses allocated to revenue included a
write off of GBP75,000 (2009 - GBP21,000) in respect of income previously
recognised, which is not anticipated to be recovered. In addition, other
expenses allocated to capital include a write-off of GBP12,000 (2009 - GBPnil)
in respect of a debtor previously recognised, which is not anticipated to be
recovered and an adjustment of GBP85,000 (2009 -GBPnil) in respect of the
discharge of a guarantee provided to Riverdale Publishing.
The emoluments of the Chairman, who was also the highest paid Director, were
GBP21,000 (2009 - GBP23,083). No pension contributions were made in respect of
any of the Directors. The Company does not have any employees.
+-----------------------------+---------+---------+---------+---------+---------+---------+
| 6. Finance costs | 2010 | 2009 |
+-----------------------------+-----------------------------+-----------------------------+
| | Revenue | Capital | Total | Revenue | Capital | Total |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Finance costs attributable | - | 526 | 526 | - | 431 | 431 |
| to ZDP shares | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | _______ | _______ | ______ | _______ | _______ | ______ |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | - | 526 | 526 | - | 431 | 431 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | _______ | _______ | ______ | _______ | _______ | ______ |
+-----------------------------+---------+---------+---------+---------+---------+---------+
+-----------------------------+---------+---------+---------+---------+---------+---------+
| 7. Tax on ordinary | 2010 | 2009 |
| activities | | |
+-----------------------------+-----------------------------+-----------------------------+
| | Revenue | Capital | Total | Revenue | Capital | Total |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| a) Analysis of charge for | | | | | | |
| the year | | | | | | |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| UK corporation tax on | | | | | | |
| profits for the period | 78 | - | 78 | 106 | - | 106 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | _______ | _______ | ______ | _______ | _______ | ______ |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| Corporation tax charge | 78 | - | 78 | 106 | - | 106 |
+-----------------------------+---------+---------+---------+---------+---------+---------+
| | _______ | _______ | ______ | _______ | _______ | ______ |
+-----------------------------+---------+---------+---------+---------+---------+---------+
+-------------------------------------------------------+---------+---------+
| | 2010 | 2009 |
+-------------------------------------------------------+---------+---------+
| b) Factors affecting tax charge for the year | GBP'000 | GBP'000 |
+-------------------------------------------------------+---------+---------+
| Loss on ordinary activities before tax | (560) | (2,095) |
+-------------------------------------------------------+---------+---------+
| | _______ | ______ |
+-------------------------------------------------------+---------+---------+
| Loss on ordinary activities multiplied by the | (157) | (587) |
| standard rate of corporation tax in the UK of 28% | | |
| (2009 - 28%) | | |
+-------------------------------------------------------+---------+---------+
| Effects of: | | |
+-------------------------------------------------------+---------+---------+
| Franked investment income | (20) | (42) |
+-------------------------------------------------------+---------+---------+
| Non-taxable gains and losses on investments | 64 | 596 |
+-------------------------------------------------------+---------+---------+
| Other non-taxable income and expenses | 195 | 125 |
+-------------------------------------------------------+---------+---------+
| Prior year adjustment | (4) | 14 |
+-------------------------------------------------------+---------+---------+
| | _______ | _______ |
+-------------------------------------------------------+---------+---------+
| Current tax charge for the period (note 7(a)) | 78 | 106 |
+-------------------------------------------------------+---------+---------+
| | _______ | _______ |
+-------------------------------------------------------+---------+---------+
Provision for deferred taxation
No provision for deferred taxation has been made due to the fact that the Group
has approximately GBP4,659,000 (2009 - GBP4,668,000) of excess management
expenses, and GBP215,000 (2009 - GBP130,000) of expenses from settlement of a
guarantee. This is because the Group is not expected to generate taxable income
in the future in excess of the deductible expenses of that future period, and,
accordingly, it is unlikely that the Group will be able to reduce future tax
liabilities through the use of existing surplus expenses.
A company qualifying as an investment trust company under Sections 1158-1159 of
the Corporation Tax Act 2010 is exempt from taxation on capital gains. In the
opinion of the Directors, the Company has conducted and intends to continue to
conduct its affairs so as to enable it to retain investment trust approval.
Given the Company's status as an investment trust no provision has been made for
the deferred tax on any capital gains and losses arising on the revaluation and
disposal of investments.
+-------------------------------------------------------+---------+---------+
| | 2010 | 2009 |
+-------------------------------------------------------+---------+---------+
| 8. Dividends and other appropriations to | GBP'000 | GBP'000 |
| shareholders | | |
+-------------------------------------------------------+---------+---------+
| Ordinary dividends on equity shares deducted from | | |
| reserves are analysed below: | | |
+-------------------------------------------------------+---------+---------+
| | | |
+-------------------------------------------------------+---------+---------+
| Fourth interim dividend 2009 of 0.25p (2008 -0.625p) | 89 | 231 |
+-------------------------------------------------------+---------+---------+
| First interim dividend 2009 of 0.25p | - | 89 |
+-------------------------------------------------------+---------+---------+
| Second interim dividend 2009 of 0.25p | - | 89 |
+-------------------------------------------------------+---------+---------+
| Third interim dividend 2009 of 0.25p | - | 89 |
+-------------------------------------------------------+---------+---------+
| | _______ | _______ |
+-------------------------------------------------------+---------+---------+
| | 89 | 498 |
+-------------------------------------------------------+---------+---------+
| | _______ | _______ |
+-------------------------------------------------------+---------+---------+
The proposed final dividend for the year ended 31 May 2010 is subject to
approval by shareholders at the Annual General Meeting and has not been included
as a liability in these financial statements.
The table below sets out sets out the final dividend proposed in respect of the
financial year, which is the basis on which the requirements of Section 1159 of
the Corporation Tax Act 2010 are considered. The revenue available for
distribution by way of dividend for the year is GBP219,000.
+---------------------------------------------------+---------+------+----------+
| | 2010 | 2009 |
+---------------------------------------------------+---------+-----------------+
| | GBP'000 | GBP'000 |
+---------------------------------------------------+---------+-----------------+
| | | |
+---------------------------------------------------+---------+-----------------+
| Proposed final dividend for 2010 of 0.5p (2009 - | 178 | - | |
| nil) | | | |
+---------------------------------------------------+---------+------+----------+
9. Return per Ordinary share
The earnings per Ordinary share is based on the net loss after taxation of
GBP638,000 (2009 - GBP2,201,000) and on a weighted average number of Ordinary
shares of 35,719,225 (31 May 2009 - 35,719,225) Ordinary shares, being the
number of Ordinary shares in issue during the year.
The return per ordinary share detailed above can be further analysed between
revenue and capital as follows:
+--------------------+---------+---------+--------+---------+---------+---------+
| | 2010 | 2009 |
+--------------------+----------------------------+-----------------------------+
| | Revenue | Capital | Total | Revenue | Capital | Total |
+--------------------+---------+---------+--------+---------+---------+---------+
| Net profit/(loss) | 89 | (727) | (638) | 245 | (2,446) | (2,201) |
| GBP'000 | | | | | | |
+--------------------+---------+---------+--------+---------+---------+---------+
| Return per | 0.25 | (2.04) | (1.79) | 0.69 | (6.85) | (6.16) |
| Ordinary share | | | | | | |
| (pence) | | | | | | |
+--------------------+---------+---------+--------+---------+---------+---------+
+-------------------------------+----------------------+---------------+
| 10. Investments held at | | |
| fair value through profit and | | |
| loss | | |
+-------------------------------+----------------------+---------------+
+-------------------------------+---------+---------+---------+----------+-------+
| a) Group | 31 May | | 31 May | | |
| | 2010 | | 2009 | | |
+-------------------------------+---------+---------+---------+----------+-------+
+-------------------------------+-----------+---------+-----------+---------+
| | Unlisted | Total | Unlisted | Total |
+-------------------------------+-----------+---------+-----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------+-----------+---------+-----------+---------+
| Opening book cost | 11,559 | 11,559 | 19,583 | 19,583 |
+-------------------------------+-----------+---------+-----------+---------+
| Opening unrealised | (910) | (910) | (4,656) | (4,656) |
| depreciation | | | | |
+-------------------------------+-----------+---------+-----------+---------+
| | _______ | _______ | _______ | _______ |
+-------------------------------+-----------+---------+-----------+---------+
| Opening valuation | 10,649 | 10,649 | 14,927 | 14,927 |
+-------------------------------+-----------+---------+-----------+---------+
| Movements in the year: | | | | |
+-------------------------------+-----------+---------+-----------+---------+
| Purchases at cost | 49 | 49 | - | - |
+-------------------------------+-----------+---------+-----------+---------+
| Sales - proceeds | (2,878) | (2,878) | (2,148) | (2,148) |
+-------------------------------+-----------+---------+-----------+---------+
| - realised gains/(losses) on | 65 | 65 | (5,876) | (5,876) |
| sales | | | | |
+-------------------------------+-----------+---------+-----------+---------+
| (Increase)/decrease in | (295) | (295) | 3,746 | 3,746 |
| unrealised depreciation | | | | |
+-------------------------------+-----------+---------+-----------+---------+
| | _______ | _______ | _______ | _______ |
+-------------------------------+-----------+---------+-----------+---------+
| Closing valuation | 7,590 | 7,590 | 10,649 | 10,649 |
+-------------------------------+-----------+---------+-----------+---------+
| | _______ | _______ | _______ | _______ |
+-------------------------------+-----------+---------+-----------+---------+
| | | | | |
+-------------------------------+-----------+---------+-----------+---------+
| Closing book cost | 8,795 | 8,795 | 11,559 | 11,559 |
+-------------------------------+-----------+---------+-----------+---------+
| Closing unrealised | (1,205) | (1,205) | (910) | (910) |
| depreciation | | | | |
+-------------------------------+-----------+---------+-----------+---------+
| | _______ | _______ | _______ | _______ |
+-------------------------------+-----------+---------+-----------+---------+
| | 7,590 | 7,590 | 10,649 | 10,649 |
+-------------------------------+-----------+---------+-----------+---------+
| | _______ | _______ | _______ | _______ |
+-------------------------------+-----------+---------+-----------+---------+
| | | | | |
+-------------------------------+-----------+---------+-----------+---------+
| Losses on held at fair value | | | | |
| investments | | | | |
+-------------------------------+-----------+---------+-----------+---------+
| Realised gains/(losses) on | 65 | 65 | (5,876) | (5,876) |
| sales of investments | | | | |
+-------------------------------+-----------+---------+-----------+---------+
| (Increase)/decrease in | (295) | (295) | 3,746 | 3,746 |
| unrealised depreciation | | | | |
+-------------------------------+-----------+---------+-----------+---------+
| | _______ | _______ | _______ | _______ |
+-------------------------------+-----------+---------+-----------+---------+
| | (230) | (230) | (2,130) | (2,130) |
+-------------------------------+-----------+---------+-----------+---------+
| | _______ | _______ | _______ | _______ |
+-------------------------------+-----------+---------+-----------+---------+
+------------------+-----------+-------------+---------+----------+----------+---------+---------+----------+
| b) Company | | Subsidiary | | | Subsidiary | | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| | Unlisted | Undertaking | Total | Unlisted | Undertaking | Total |
+------------------+-----------+-------------+---------+----------+--------------------+--------------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| Opening book | 9,113 | 233 | 9,346 | 16,337 | 233 | 16,570 | |
| cost | | | | | | | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| Opening | (914) | 48 | (866) | (4,993) | 1,307 | (3,686) | |
| unrealised | | | | | | | |
| depreciation | | | | | | | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| | _______ | _______ | _______ | ______ | _______ | _______ | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| Opening | 8,199 | 281 | 8,480 | 11,344 | 1,540 | 12,884 | |
| valuation | | | | | | | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| Movements in the | | | | | | | |
| year: | | | | | | | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| Purchases at | 49 | - | 49 | - | - | - | |
| cost | | | | | | | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| Sales - proceeds | (2,868) | - | (2,868) | (2,002) | - | (2,002) | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| - realised | 301 | - | 301 | (5,222) | - | (5,222) | |
| gains/(losses) | | | | | | | |
| on sales | | | | | | | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| (Increase)/ | (291) | (273) | (564) | 4,079 | (1,259) | 2,820 | |
| decrease in | | | | | | | |
| unrealised | | | | | | | |
| depreciation | | | | | | | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| | _______ | _______ | _______ | ______ | _______ | _______ | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| Closing | 5,390 | 8 | 5,398 | 8,199 | 281 | 8,480 | |
| valuation | | | | | | | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| | _______ | _______ | _______ | ______ | _______ | _______ | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| | | Subsidiary | | | Subsidiary | | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| | Unlisted | Undertaking | Total | Unlisted | Undertaking | Total | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| Closing book | 6,595 | 233 | 6,828 | 9,113 | 233 | 9,346 | |
| cost | | | | | | | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| Closing | (1,205) | (225) | (1,430) | (914) | 48 | (866) | |
| unrealised | | | | | | | |
| (depreciation)/ | | | | | | | |
| depreciation | | | | | | | |
+------------------+-----------+-------------+---------+----------+--------------------+---------+----------+
| | _______ | _______ | _______ | _______ | _______ | _______ | |
+------------------+-----------+-------------+---------+---------------------+---------+---------+----------+
| | 5,390 | 8 | 5,398 | 8,199 | 281 | 8,480 | |
+------------------+-----------+-------------+---------+---------------------+---------+---------+----------+
| | _______ | _______ | _______ | _______ | _______ | _______ | |
+------------------+-----------+-------------+---------+---------------------+---------+---------+----------+
| | | | | | | | | |
+------------------+-----------+-------------+---------+----------+----------+---------+---------+----------+
+-----------------+-----------+-------------+---------+----------+-------------+---------+
| | | Subsidiary | | | Subsidiary | |
+-----------------+-----------+-------------+---------+----------+-------------+---------+
| | Unlisted | Undertaking | Total | Unlisted |Undertaking | Total |
+-----------------+-----------+-------------+---------+----------+-------------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------+-----------+-------------+---------+----------+-------------+---------+
| Losses on held | | | | | | |
| at fair value | | | | | | |
| investments | | | | | | |
+-----------------+-----------+-------------+---------+----------+-------------+---------+
| Realised | 301 | - | 301 | (5,222) | - | (5,222) |
| gains/(losses) | | | | | | |
| on sales of | | | | | | |
| investments | | | | | | |
+-----------------+-----------+-------------+---------+----------+-------------+---------+
| (Increase)/ | (291) | (273) | (564) | 4,079 | (1,259) | 2,820 |
| decrease in | | | | | | |
| unrealised | | | | | | |
| depreciation | | | | | | |
+-----------------+-----------+-------------+---------+----------+-------------+---------+
| | _______ | _______ | _______ | _______ | _______ | _______ |
+-----------------+-----------+-------------+---------+----------+-------------+---------+
| | 10 | (273) | (263) | (1,143) | (1,259) | (2,402) |
+-----------------+-----------+-------------+---------+----------+-------------+---------+
| | _______ | _______ | _______ | _______ | _______ | _______ |
+-----------------+-----------+-------------+---------+----------+-------------+---------+
+----------------------------+-----------+-----------+-----------+-----------+
| c) Transaction costs | Year ended 31 May | Year ended 31 |
| | 2010 | May 2009 |
+----------------------------+-----------------------+-----------------------+
| | Group | Company | Group | Company |
+----------------------------+-----------+-----------+-----------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+-----------+-----------+-----------+-----------+
| Sales | - | - | - | - |
+----------------------------+-----------+-----------+-----------+-----------+
| Purchases | - | - | - | - |
+----------------------------+-----------+-----------+-----------+-----------+
| | _________ | _________ | _________ | _________ |
+----------------------------+-----------+-----------+-----------+-----------+
| | - | - | - | - |
+----------------------------+-----------+-----------+-----------+-----------+
| | _________ | _________ | _________ | _________ |
+----------------------------+-----------+-----------+-----------+-----------+
The details of the Group's subsidiaries are as follows:
+--------------------------+---------------+-------------+----------------+
| | | | Percentage of |
| | | | ordinary |
+--------------------------+---------------+-------------+----------------+
| Subsidiary | Country | Principal | shares held |
| | of | | |
+--------------------------+---------------+-------------+----------------+
| Name | incorporation | activity | by the Group |
+--------------------------+---------------+-------------+----------------+
| ADC (Glasgow) Limited | Scotland | Investment | 100%A |
| | | company | |
+--------------------------+---------------+-------------+----------------+
| ADC Fund Limited | Scotland | Investment | 100% |
| Partnership | | company | |
+--------------------------+---------------+-------------+----------------+
| ADC Zeros 2010 PLC | Scotland | Investment | 100% |
| | | company | |
+--------------------------+---------------+-------------+----------------+
| ADC Zeros 2012 PLC | Scotland | Investment | 100% |
| | | company | |
+--------------------------+---------------+-------------+----------------+
+----------------------------------------------------------------------+
| A held indirectly through ADC Fund Limited Partnership |
+----------------------------------------------------------------------+
11. Significant holdings
Information about investments required by Section 409 of the Companies Act 2006,
all of which are incorporated and operate in England and Scotland.
a) As at 31 May 2010, Aberdeen Development Capital PLC held in excess of 20%
in any class of the following investee companies share capital:
+-----------------------------+-------+-------+--------+----------+---------------+
| | Class | % of | % of | Capital | Post |
| | of | | | & | tax |
+-----------------------------+-------+-------+--------+----------+---------------+
| | share | Class | Equity | reserves | Profit/(loss) |
| | | held | held | | |
+-----------------------------+-------+-------+--------+----------+---------------+
| Name | | | | GBP'000 | GBP'000 |
+-----------------------------+-------+-------+--------+----------+---------------+
| Cash Bases Limited | 'B' | 63 | 19 | 2,051 | (202) |
| | Ords | 63 | | | |
| | Prefs | 63 | | | |
| | SLS | | | | |
+-----------------------------+-------+-------+--------+----------+---------------+
| Enpure Holdings Limited | 'A' | 2 | 2 | 5,349 | 1,209 |
| | Ords | 45 | | | |
| | SLS | | | | |
+-----------------------------+-------+-------+--------+----------+---------------+
| Fispak Limited | SLS | 100 | - | n/a | n/a |
+-----------------------------+-------+-------+--------+----------+---------------+
| IFC Holdings Limited | Ord | 26 | 26 | 4,659 | 253 |
+-----------------------------+-------+-------+--------+----------+---------------+
| Pilgrim Systems Limited | CCPPO | 100 | 20 | 1,124 | (142) |
+-----------------------------+-------+-------+--------+----------+---------------+
| PLM Dollar Group Limited | CCPPO | 100 | 20 | 3,857 | 271 |
| | SLS | 100 | | | |
+-----------------------------+-------+-------+--------+----------+---------------+
| TLA Holdings Limited | 'A' | 73 | 34 | 2,006 | (35) |
| | Ords | | | | |
+-----------------------------+-------+-------+--------+----------+---------------+
| Transys Holdings Limited | B | 19 | 14 | (394) | (698) |
| | Ords | | | | |
+-----------------------------+-------+-------+--------+----------+---------------+
| | Prefs | 19 | | | |
+-----------------------------+-------+-------+--------+----------+---------------+
| | SLS | 26 | | | |
+-----------------------------+-------+-------+--------+----------+---------------+
b) Other interests of 10% or more of any class of the following investee
company's share capital:
+-------------------------------------------------+----------+--------+
| | Class of | % of |
+-------------------------------------------------+----------+--------+
| Name | share | class |
| | | held |
+-------------------------------------------------+----------+--------+
| Ortak Jewellery Limited | 'A' Ords | 12 |
+-------------------------------------------------+----------+--------+
| PSCA International Limited | SLS | 12 |
+-------------------------------------------------+----------+--------+
| Unique Communications Limited | 'B' Ords | 13 |
+-------------------------------------------------+----------+--------+
| | 'A' | 13 |
| | Prefs | |
+-------------------------------------------------+----------+--------+
| | 'B' | 13 |
| | Prefs | |
+-------------------------------------------------+----------+--------+
| | Prefs | 13 |
+-------------------------------------------------+----------+--------+
| | SLS | 13 |
+-------------------------------------------------+----------+--------+
+---------------+-----------------------------------------------------+
| SLS | Secured Loan Stock |
+---------------+-----------------------------------------------------+
| CCPPO | Cumulative Convertible Participating Preferred |
| | Ordinary |
+---------------+-----------------------------------------------------+
+----------------------------------+-----------+-----------+----------+-----------+
| | Group | Company | Group | Company |
+----------------------------------+-----------+-----------+----------+-----------+
| | 2010 | 2010 | 2009 | 2009 |
+----------------------------------+-----------+-----------+----------+-----------+
| 12. Loans and receivables | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+-----------+-----------+----------+-----------+
| Prepayments and accrued income | 13 | 13 | 112 | 27 |
+----------------------------------+-----------+-----------+----------+-----------+
| Tax recoverable | 18 | 4 | 14 | 4 |
+----------------------------------+-----------+-----------+----------+-----------+
| VAT recoverable | - | - | 271 | 271 |
+----------------------------------+-----------+-----------+----------+-----------+
| Other debtors | - | - | 12 | 12 |
+----------------------------------+-----------+-----------+----------+-----------+
| Amounts due from subsidiary | - | 6,570 | - | 6,570 |
| undertakings | | | | |
+----------------------------------+-----------+-----------+----------+-----------+
| | _________ | _________ | ________ | _________ |
+----------------------------------+-----------+-----------+----------+-----------+
| | 31 | 6,587 | 409 | 6,884 |
+----------------------------------+-----------+-----------+----------+-----------+
| | _________ | _________ | ________ | _________ |
+----------------------------------+-----------+-----------+----------+-----------+
+----------------------------------+-----------+-----------+----------+-----------+
| 13. Current liabilities | Group | Company | Group | Company |
+----------------------------------+-----------+-----------+----------+-----------+
| | 2010 | 2010 | 2009 | 2009 |
+----------------------------------+-----------+-----------+----------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+-----------+-----------+----------+-----------+
| Amounts due from subsidiary | - | 3,951 | - | 8,113 |
| undertakings | | | | |
+----------------------------------+-----------+-----------+----------+-----------+
| Other creditors | 80 | 72 | 209 | 198 |
+----------------------------------+-----------+-----------+----------+-----------+
| Tax creditor | 88 | - | 96 | - |
+----------------------------------+-----------+-----------+----------+-----------+
| Zero dividend preference shares | - | - | 4,226 | - |
+----------------------------------+-----------+-----------+----------+-----------+
| | _________ | _________ | ________ | _________ |
+----------------------------------+-----------+-----------+----------+-----------+
| | 168 | 4,023 | 4,531 | 8,311 |
+----------------------------------+-----------+-----------+----------+-----------+
| | _________ | _________ | ________ | _________ |
+----------------------------------+-----------+-----------+----------+-----------+
14. Non-current liabilities
The ZDP shares of ADC Zeros 2010 PLC and ADC Zeros 2012 PLC were issued on 30
June 2005 at 100 pence per share and are due to redeem on 30 April 2012 at 42.11
pence each, following four returns of capital totalling 88.6 pence per share; an
effective rate of 6.5% per annum. During the year, due to a lack of sufficient
cash it was apparent that the redemption due for 2010 ZDP shares would not be
met and accordingly a proposal was put to shareholders to postpone the
redemption date until 30 April 2012, to coincide with the redemption of 2012 ZDP
shares. The proposal was passed by shareholders at meetings convened on 25 March
2010 and 6 April 2010. On 16 June 2009 and 28 May 2010 returns of 2.6 pence and
20 pence per share respectively were made to holders of both ADC Zeros 2010 PLC
and ADC Zeros 2012 PLC. There were 7,491,110 ZDP shares in issue at 31 May 2010
for each of ADC Zeros 2010 PLC and ADC Zeros 2012 PLC (2009 - 7,491,110). The
entitlement due in respect of the ZDP shares at the year end was GBP5,592,000
(2009 - GBP8,452,000).
+---------------------------+------------+------------+----------+----------+
| | | Amount due to |
| | Number of ZDP | ZDP |
| | shares | shareholders |
| | | (GBP'000) |
+---------------------------+-------------------------+---------------------+
| | 2010 | 2009 | 2010 | 2009 |
+---------------------------+------------+------------+----------+----------+
| At 31 May 2009 | 14,982,220 | 15,714,284 | 4,226 | 10,614 |
+---------------------------+------------+------------+----------+----------+
| Repurchase of ZDP shares | - | (732,064) | - | (286) |
+---------------------------+------------+------------+----------+----------+
| Return of capital to ZDP | - | - | (3,386) | (2,307) |
| shares | | | | |
+---------------------------+------------+------------+----------+----------+
| ZDP shares finance cost | - | - | 526 | 431 |
+---------------------------+------------+------------+----------+----------+
| Transfer from/ (to) | - | - | 4,226 | (4,226) |
| current liabilities | | | | |
+---------------------------+------------+------------+----------+----------+
| | _________ | _________ | ________ | ________ |
+---------------------------+------------+------------+----------+----------+
| At 31 May 2010 | 14,982,220 | 14,982,220 | 5,592 | 4,226 |
+---------------------------+------------+------------+----------+----------+
| | _________ | _________ | ________ | ________ |
+---------------------------+------------+------------+----------+----------+
+--------------------------------+------------+---------+------------+---------+
| 15. Called-up share capital | 2010 | 2009 |
+--------------------------------+----------------------+----------------------+
| | | Issued | | Issued |
| | | and | | and |
+--------------------------------+------------+---------+------------+---------+
| | Authorised | fully | Authorised | Fully |
| | | paid | | paid |
+--------------------------------+------------+---------+------------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+------------+---------+------------+---------+
| Ordinary shares of 1p | 825 | 357 | 825 | 357 |
+--------------------------------+------------+---------+------------+---------+
Voting rights
In accordance with the Articles of Association of the Company, on a show of
hands, every member (or duly appointed proxy) present at a general meeting of
the Company has one vote; and, on a poll, every member present in person or by
proxy shall have on vote for every GBP4 nominal amount of Ordinary shares held.
+-------------------------+---------+---------+------------+-----------+------------+---------+
| 16. Share capital | | | | | | |
| and reserves | | | | | | |
| | | | Capital | Realised | Unrealised | |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| | Share | Special | redemption | capital | capital | Revenue |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| | capital | reserve | reserve | reserve | reserve | reserve |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| Group | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| At 31 May 2009 | 357 | 17,502 | 12 | (13,494) | (910) | 153 |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| Return of capital to | - | (107) | - | - | - | - |
| ordinary shareholders | | | | | | |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| Net gain on realisation | - | - | - | 65 | - | - |
| of investments | | | | | | |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| Increase in unrealised | - | - | - | - | (295) | - |
| depreciation | | | | | | |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| ZDP finance costs | - | - | - | (526) | - | - |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| Costs charged to | - | - | - | (164) | - | - |
| capital | | | | | | |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| VAT recovered | - | - | - | 193 | - | - |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| Dividends paid | - | - | - | - | - | (89) |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| Retained earnings | - | - | - | - | - | 89 |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| | _______ | ______ | _______ | _______ | _______ | _____ |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| At 31 May 2010 | 357 | 17,395 | 12 | (13,926) | (1,205) | 153 |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| | _______ | ______ | _______ | _______ | _______ | _____ |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| | | | | | | |
| | | | | | | |
| | | | Capital | Realised | Unrealised | |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| | Share | Special | Redemption | Capital | Capital | Revenue |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| | Capital | Reserve | Reserve | Reserve | Reserve | Reserve |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| Company | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| At 31 May 2009 | 357 | 17,502 | 12 | (13,845) | (866) | 470 |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| Return of capital to | - | (107) | - | - | - | - |
| ordinary | | | | | | |
| shareholders | | | | | | |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| Net gain on realisation | - | - | - | 301 | - | - |
| of | | | | | | |
| investments | | | | | | |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| Increase in unrealised | - | - | - | - | (564) | - |
| depreciation | | | | | | |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| ZDP finance costs | - | - | - | (526) | - | - |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| Costs charged to | - | - | - | (143) | - | - |
| capital | | | | | | |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| VAT recovered | - | - | - | 193 | - | - |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| Dividends paid | - | - | - | - | - | (89) |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| Retained earnings | - | - | - | - | - | 219 |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| | _______ | ______ | _______ | _______ | _______ | _____ |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| At 31 May 2010 | 357 | 17,395 | 12 | (14,020) | (1,430) | 600 |
+-------------------------+---------+---------+------------+-----------+------------+---------+
| | _______ | ______ | _______ | _______ | _______ | _____ |
+-------------------------+---------+---------+------------+-----------+------------+---------+
Company revenue reserve
As permitted by Section 408 of the Companies Act 2006, the Company has not
presented its own Statement of Comprehensive Income. The amount of Company
revenue before appropriation dealt with in the accounts of the Group is
GBP219,000 (2009 - GBP356,000).
17. Net asset value per share
The net asset value per Ordinary share is based on a net asset value of
GBP2,786,000 (2009 - GBP3,620,000) and on 35,719,225 (2008 - 35,719,225)
Ordinary shares, being the number of Ordinary shares in issue at the year end.
18. Contingent assets
+------------------------------------------------------------------------+
| On 5 November 2007, the European Court of Justice ruled that |
| management fees on investment trusts should be exempt from VAT. HMRC |
| has announced its intention not to appeal against this ruling to the |
| UK VAT Tribunal and therefore protective claims which have been made |
| in relation to the Company will be processed by HMRC in due course. |
+------------------------------------------------------------------------+
| The Manager has refunded GBP559,000 to the Group for VAT charged on |
| investment management fees for the period 1 January 2001 to 31 August |
| 2007. The sum of GBP271,000 was reflected in previous financial |
| statements for the period 1 January 2004 to 31 August 2007 and the sum |
| of GBP288,000 has been reflected in these financial statements for the |
| period 1 January 2001 to 31 December 2003. These repayments have been |
| allocated to capital and revenue in line with the accounting policy of |
| the Group for the periods in which the VAT was charged. The reclaim |
| for previous periods plus any interest due in respect of payments made |
| to date and payable for previous periods, and the timescale for |
| receipt remain uncertain and the Group has taken no account in these |
| financial statements of any such repayment. |
| |
| There are a number of other deferred considerations from previous |
| sales transactions where the amount and timing of receipt remain |
| uncertain and the Group has taken no account of any such receipt in |
| the financial statements. |
| |
+------------------------------------------------------------------------+
19. Related party disclosure
The transactions with Aberdeen Asset Managers Limited and the year end balances
disclosed in note 4 of the financial statements.
20. Financial instruments
The Group's financial instruments comprise securities and other investments,
cash balances and debtors and creditors that arise directly from its operations;
for example, in respect of sales and purchases awaiting settlement, and debtors
for accrued income. The Company may not enter into derivative transactions in
the form of forward foreign currency contracts, futures and options without the
written permission of Directors. No derivative transactions were entered into
during the period.
The main risks arising from the Group's financial instruments are (i) market
price risk, being the risk that the value of investment holdings will fluctuate
as a result of changes in market prices caused by factors other than interest
rate or currency movement; (ii) interest rate risk; and (iii) liquidity risk. In
line with the Company's investment objective, the portfolio comprises UK
securities and, therefore, has no exposure to foreign currency risk.
The Manager's policies for managing these risks are summarised below and have
been applied throughout the year. The numerical disclosures below exclude
short-term debtors and creditors, which are included in the Balance Sheet at
fair value.
(i) Market price risk
The Company's investment portfolio is exposed to market price fluctuations,
which are monitored by the Manager in pursuance of the investment objective.
Adherence to investment guidelines and to investment and borrowing powers set
out in the management agreement mitigates the risk of excessive exposure to any
particular type of security or issuer. Further information on the investment
portfolio (including sector concentration and deal type analysis) is set out in
the Manager's Report and the Largest Investments table.
(ii) Interest rate risk
The interest rate risk profile of financial assets at the Balance Sheet date was
as follows:
+--------------------+--------------+--------------+--------------+
| | Fixed | Floating | Non-interest |
| | interest | rate | bearing |
+--------------------+--------------+--------------+--------------+
| 31 May 2010 | GBP'000 | GBP'000 | GBP'000 |
+--------------------+--------------+--------------+--------------+
| Sterling | | | |
+--------------------+--------------+--------------+--------------+
| Unlisted | 2,055 | 200 | 5,335 |
+--------------------+--------------+--------------+--------------+
| Cash | - | 925 | - |
+--------------------+--------------+--------------+--------------+
| | __________ | __________ | __________ |
+--------------------+--------------+--------------+--------------+
| | 2,055 | 1,125 | 5,335 |
+--------------------+--------------+--------------+--------------+
| | __________ | __________ | __________ |
+--------------------+--------------+--------------+--------------+
+--------------------+--------------+--------------+--------------+
| | Fixed | Floating | Non-interest |
| | interest | rate | bearing |
+--------------------+--------------+--------------+--------------+
| 31 May 2009 | GBP'000 | GBP'000 | GBP'000 |
+--------------------+--------------+--------------+--------------+
| Sterling | | | |
+--------------------+--------------+--------------+--------------+
| Unlisted | 3,467 | 200 | 6,982 |
+--------------------+--------------+--------------+--------------+
| Cash | - | 1,319 | - |
+--------------------+--------------+--------------+--------------+
| | __________ | __________ | __________ |
+--------------------+--------------+--------------+--------------+
| | 3,467 | 1,519 | 6,982 |
+--------------------+--------------+--------------+--------------+
| | __________ | __________ | __________ |
+--------------------+--------------+--------------+--------------+
The unlisted fixed interest assets have a weighted average life of 1.53 years
(2009 - 3.03 years) and a weighted average interest rate of 7.38% (2009 -
6.70%). The floating rate interest assets are linked to base rates set by the
Bank of England.
It is the Directors' opinion that the carrying amounts of these financial assets
represent the maximum credit exposure at the Balance Sheet date
Maturity profile
The maturity rate profile of the Company's financial assets at the Balance Sheet
date was as follows:
+------------+---------+---------+---------+---------+---------+---------+---------+
| | Within | Within | Within | Within | Within | More | |
| | | | | | | than | |
+------------+---------+---------+---------+---------+---------+---------+---------+
| | 1 | 1-2 | 2-3 | 3-4 | 4-5 | 5 | Total |
| | year | years | years | years | year | years | |
+------------+---------+---------+---------+---------+---------+---------+---------+
| At 31 May | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| 2010 | | | | | | | |
+------------+---------+---------+---------+---------+---------+---------+---------+
| Fixed | | | | | | | |
| interest | | | | | | | |
+------------+---------+---------+---------+---------+---------+---------+---------+
| Unlisted | 100 | 1,677 | 278 | - | - | - | 2,055 |
+------------+---------+---------+---------+---------+---------+---------+---------+
| | _______ | _______ | _______ | _______ | _______ | _______ | _______ |
+------------+---------+---------+---------+---------+---------+---------+---------+
| | 100 | 1,677 | 278 | - | - | - | 2,055 |
+------------+---------+---------+---------+---------+---------+---------+---------+
| | _______ | _______ | _______ | _______ | _______ | _______ | _______ |
+------------+---------+---------+---------+---------+---------+---------+---------+
Within "more than 5 years" there is a figure of GBPnil (2009 -GBP417,000) in
respect of preference and ordinary shares which bear fixed franked investment
income and do not have a redemption date.
+------------+---------+---------+---------+---------+---------+---------+---------+
| | Within | Within | Within | Within | Within | More | |
| | | | | | | than | |
+------------+---------+---------+---------+---------+---------+---------+---------+
| | 1 | 1-2 | 2-3 | 3-4 | 4-5 | 5 | Total |
| | year | years | years | years | year | years | |
+------------+---------+---------+---------+---------+---------+---------+---------+
| At 31 May | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| 2009 | | | | | | | |
+------------+---------+---------+---------+---------+---------+---------+---------+
| Fixed | | | | | | | |
| interest | | | | | | | |
+------------+---------+---------+---------+---------+---------+---------+---------+
| Unlisted | 100 | 274 | 1,676 | 1,000 | - | 417 | 3,467 |
+------------+---------+---------+---------+---------+---------+---------+---------+
| | _______ | _______ | _______ | _______ | _______ | _______ | _______ |
+------------+---------+---------+---------+---------+---------+---------+---------+
| | 100 | 274 | 1,676 | 1,000 | - | 417 | 3,467 |
+------------+---------+---------+---------+---------+---------+---------+---------+
| | _______ | _______ | _______ | _______ | _______ | _______ | _______ |
+------------+---------+---------+---------+---------+---------+---------+---------+
(iii) Liquidity risk
Due to their nature, unlisted investments may not be readily realisable; cash is
held to mitigate this liquidity risk.
Credit risk and interest rate risk is minimised by acquiring high quality
treasury stocks or other bonds which have a relatively short time to maturity,
when sufficient funds are available.
The Company, generally, does not hold significant cash balances as this is
returned to shareholders via either the capital repayment scheme or share
buyback programme. Any cash held is with reputable banks with high external
credit ratings.
(iv) Price risk sensitivity
As the Company's does not hold any listed investments, the Board does not
believe the Company is at risk of possible changes in market prices.
21. Fair value hierarchy
+-----------------------------------------+---------+---------+---------+---------+
| The Company adopted the amendments to IFRS 7 'Financial |
| Instruments: Disclosures' effective from 1 January 2009. |
| These amendments require an entity to classify fair value |
| measurements using a fair value hierarchy that reflects the |
| significance of the inputs used in making measurements. The |
| fair value hierarchy shall have the following levels: |
+---------------------------------------------------------------------------------+
| | | | | |
+-----------------------------------------+---------+---------+---------+---------+
| - Level 1: quoted prices (unadjusted) in active markets | |
| for identical assets or liabilities; | |
+-----------------------------------------------------------------------+---------+
| - Level 2: inputs other than quoted prices included | |
| within Level 1 that are observable for the assets or | |
| liability, either directly (ie as prices) or indirectly | |
| (ie derived from prices); and | |
+-----------------------------------------------------------------------+---------+
| - Level 3: inputs for the asset or liability that are | |
| not based on observable market data (unobservable | |
| inputs). | |
+-----------------------------------------------------------------------+---------+
| | |
+-----------------------------------------------------------------------+---------+
| The following table summarises by level within the fair value |
| hierarchy the Group's financial assets and liabilities at |
| fair value at 31 May 2010: |
+---------------------------------------------------------------------------------+
| | | | | |
+-----------------------------------------+---------+---------+---------+---------+
| | Level | Level | Level | Total |
| | 1 | 2 | 3 | |
+-----------------------------------------+---------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------------+---------+---------+---------+---------+
| Financial assets at fair value through | - | - | 7,590 | 7,590 |
| profit or loss | | | | |
+-----------------------------------------+---------+---------+---------+---------+
Additional notes for Annual Financial Report:
The Annual Financial Report Announcement is not the Company's statutory
accounts. The above results for the year ended 31 May 2010 have been agreed with
the auditors and are an abridged version of the Company's full accounts, which
have been approved and audited with an unqualified report. The 2009 and 2010
statutory accounts received unqualified reports from the Company's auditors and
did not include any reference to matters to which the auditors drew attention by
way of emphasis without qualifying the reports, and did not contain a statement
under Section 498(2) or 498(3) of the Companies Act 2006. The financial
information for 2009 is derived from the statutory accounts for 2009 which have
been delivered to the Registrar of Companies. The 2010 accounts will be filed
with the Registrar of Companies in due course.
The Annual General Meeting of the Company will be held at 12 noon on 27 October
2010 at 10 Queen's Terrace, Aberdeen AB10 1YG.
The Annual Report and Accounts will be posted to shareholders at the end of
August 2010 and copies will be available from the registered office of the
investment manager or from the Company's website www.developmentcap.co.uk
Please note that past performance is not necessarily a guide to the future and
that the value of investments and the income from them may fall as well as rise.
Investors may not get back the amount they originally invested.
For Aberdeen Development Capital PLC
Aberdeen Asset Management PLC, Secretaries
30 July 2010
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
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