Albion Technology & General VCT PLC - Ordinary ...

Albion Technology & General VCT PLC

As required by the UK Listing Authority's Disclosure and Transparency Rule 4.2, Albion Technology & General VCT PLC today makes public its information relating to the Half-yearly Financial Report (which is unaudited) for the six months to 30 June 2014. This announcement was approved by the Board of Directors on 8 August 2014.

The full Half-yearly Financial Report (which is unaudited) for the period to 30 June 2014, will shortly be sent to shareholders. Copies of the full Half-yearly Financial Report will be shown via the Albion Ventures LLP website by clicking www.albion-ventures.co.uk/ourfunds/AATG.htm.

Investment objective and policy

Albion Technology & General VCT PLC's (the "Company") investment strategy is to provide investors with a regular and predictable source of dividend income combined with the prospect of longer term capital growth.

This is achieved in two ways.  Firstly, by controlling the VCT's exposure to technology risk through ensuring that many of the companies in the non-technology portfolio have property as their major asset, with no external borrowings. Secondly, by balancing the investment portfolio by sector, so that those areas such as leisure and business services, which are susceptible to changes in consumer sentiment, are complemented by sectors with more predictable long term characteristics, such as healthcare and the environment.

The Company offers investors the opportunity to participate in a balanced portfolio of technology and non-technology businesses. The Company's investment portfolio is intended to be split approximately as follows:

• 40 per cent. in unquoted UK technology-related companies; and
   
• 60 per cent. in unquoted UK non-technology companies.

This split is subject to the availability of good quality new investments arising within the UK technology and non-technology sectors.

Background to the Company

The Company is a venture capital trust which raised £14.3 million in 2001, and raised a further £35.0 million during 2006 through the launch of a C share issue. The Company has raised a further £8.2m under the Albion VCTs Top Up Offers since January 2011.

On 15 November 2013, the Company acquired the assets and liabilities of Albion Income & Growth VCT PLC ("Income & Growth") in exchange for new shares in the Company ("the Merger").  All of the assets and liabilities of Income & Growth totalling £28,075,000 were transferred to the Company in exchange for the issue of 33,664,049 new Ordinary shares at an issue price of 83.38 pence per share.  Each Income & Growth shareholder received 0.7813 shares in the Company for each Income & Growth share that they held at the date of the Merger.

Financial calendar

Record date for fourth dividend for the year Payment of fourth dividend for the year Financial year end

3 October 2014 31 October 2014 31 December 2014

Financial highlights

	Unaudited six months ended 30 June 2014 (pence per share)	Unaudited  six months ended 30 June 2013 (pence per share)	Audited year ended 31 December 2013 (pence per share)
Net asset value	82.01	84.60	85.75
Dividends paid	3.75	2.50	5.00
Revenue return	0.61	0.70	1.00
Capital (loss)/return	(0.61)	2.30	6.90

	Ordinary shares (pence per share) (i)	C shares (pence per share) (i)(ii)	Albion Income & Growth VCT PLC (pence per share) (i)(iii)
Total shareholder net asset value return to 30 June 2014
Total dividends paid during the period ended:
31 December 2001	1.00	-	-
31 December 2002	2.00	-	-
31 December 2003	1.50	-	-
31 December 2004	7.50	-	-
31 December 2005	9.00	-	0.65
31 December 2006	8.00	0.50	2.60
31 December 2007	8.00	2.50	3.45
31 December 2008	16.00	4.50	3.50
31 December 2009	-	1.00	3.00
31 December 2010	8.00	3.00	3.00
31 December 2011	5.00	3.80	3.50
31 December 2012	5.00	3.90	3.50
31 December 2013	5.00	3.90	3.50
30 June 2014	3.75	2.92	2.93
Total dividends paid to 30 June 2014	79.75	26.02	29.63
Net asset value as at 30 June 2014	82.01	63.80	64.07
Total shareholder net asset value return to 30 June 2014	161.76	89.82	93.70

In addition to the dividends paid above, the Board declared a fourth dividend for the year ending 31 December 2014 of 1.25 pence per Ordinary share to be paid on 31 October 2014 to shareholders on the register at 3 October 2014.

Notes
(i) Excludes tax benefits upon subscription.
(ii) The C shares were converted into Ordinary shares on 31 March 2011, with a conversion factor of 0.7779 Ordinary shares for each C share. The net asset value per share and all dividends paid subsequent to the conversion of the C shares to the Ordinary shares are multiplied by the conversion factor of 0.7779 in respect of the C shares' return, in order to give an accurate picture of the shareholder value since launch relating to the C shares.
(iii) Albion Income & Growth VCT PLC was merged with Albion Technology & General VCT PLC on 15 November 2013. The pro-forma NAV is based upon 0.7813 Albion Technology & General VCT PLC shares for every Albion Income & Growth VCT PLC share. The total shareholder returns are based on the dividends paid to shareholders before the merger and the pro-rata net asset value per share and the pro-rata dividends paid to 30 June 2014.

Interim management report
Introduction

The results for Albion Technology & General VCT PLC for the six months to 30 June 2014 showed a subdued performance with a break-even total return, compared to a positive total return of 3.0 pence per share for the period to 30 June 2013.  Net asset value at 30 June 2014 was 82.01 pence per share, largely reflecting the deduction of 3.75 pence per share dividends paid to date, compared to 85.75 pence per share net asset value at 31 December 2013.

Investment performance and progress

Approximately £940,000 was invested in unquoted companies during the period.  These include £200,000 in Egress, a fast growing developer of encryption services for secure email with major public and private sector clients both in the UK and overseas.  In addition, we invested £135,000 in Grapeshot, a business providing contextual analysis for the advertising technology sector.  Additional sums were also invested in our hydroelectric renewable energy businesses, within the overall target that renewable energy should in due course form approximately 15% of the VCT's portfolio by cost.

The sale of our investment in Peakdale Molecular completed just after the half year.  Since we first backed Peakdale in 2001, our investment has returned just over twice the sums invested.  In addition a number of further exits from within the portfolio are under negotiation.  Meanwhile, Mi-Pay, which manages top-up services on behalf of international mobile phone operators, obtained a quotation on AIM in April. 

The value of Peakdale has been written up to its sale proceeds, and third party valuations of both our renewable energy businesses and our pubs portfolios have resulted in uplifts to our holding value.  While our Tower Bridge Healthclub also saw a strong increase in value, the third party valuations of our Weybridge and Kensington Healthclubs saw an aggregate reduction of just over £900,000.  Trading at both these clubs, however, has improved following a change in management.  In addition, our investments in both Rostima and Helveta, despite their niches in interesting global markets, saw further write-downs in value of £915,000.

Portfolio split as at 30 June 2014

Set out at the bottom of this announcement is the sector diversification of the portfolio of our investments as at 30 June 2014.

Risks, uncertainties and prospects

Although growth in the UK has recovered well, the outlook for the UK and global economies continues to be the key risk affecting your Company.  Investment risk is mitigated through a variety of processes, including our policy of ensuring that the Company has a first charge over portfolio companies' assets wherever possible and of ensuring that the portfolio is balanced through the inclusion of sectors that are less exposed to the business and consumer cycles.

Other principal risks and uncertainties remain unchanged and are as detailed in note 16.

Discount management and share buy-backs

It remains the Board's primary objective to maintain sufficient resources for investment in existing and new portfolio companies and for the continued payment of dividends to shareholders. The Board's policy is to buy-back shares in the market, subject to the overall constraint that such purchases are in the VCT's interest. In order to ensure that these conditions are satisfied, the Company will limit the sum available for buy-backs for the 6 month period to 31 December 2014 to £1 million. It is the Board's intention for such buy-backs to be in the region of a 5 per cent. discount to net asset value, so far as market conditions and liquidity permit.

Albion VCTs Top Up Offers

During the period 1 January 2014 to 31 July 2014, the Company issued 3,402,873 shares under the Albion VCTs Top Up Offers 2013/2014 and the Albion VCTs Prospectus Top Up Offers 2013/2014. The Offer will close on 30 September 2014.  To date your Company has raised a total of £2.9 million under this Offer, this compares to £2.1 million raised under the previous Top Up Offer.

The proceeds of the Offers will be used to provide further resources at a time when a number of attractive new investment opportunities are being seen.

Transactions with Manager

Details of the transactions that took place with the Manager in the period can be found in note 5.

Results and dividend

As at 30 June 2014 the net asset value per Ordinary share was 82.01 pence (30 June 2013 84.60 pence, 31 December 2013 85.75 pence) largely reflecting the 3.75 pence per share dividends paid to date against a break-even total return.  Dividends are now paid on a quarterly basis, the next payment being 1.25 pence per Ordinary share on 31 October 2014, to those shareholders on the register at 3 October 2014.

Following the merger with Albion Income and Growth VCT PLC in 2013, the company's investment portfolio is both substantial and well balanced.  As indicated in the portfolio split above, the VCT has investments in a variety of sectors which balance cash generation with growth potential.  We are therefore confident that in the longer term we shall see a return to growth.

Dr N E Cross
Chairman
8 August 2014

Responsibility statement

The Directors, Dr. Neil Cross, Robin Archibald, Mary Anne Cordeiro, Modwenna Rees-Mogg and Patrick Reeve are responsible for preparing the Half-yearly Financial Report. The Directors have chosen to prepare this Half-yearly Financial Report for the Company in accordance with United Kingdom Generally Accepted Accounting Practice ("UK GAAP").

In preparing these summarised Financial Statements for the period to 30 June 2014, we the Directors of the Company, confirm that to the best of our knowledge:

(a) the summarised set of Financial Statements has been prepared in accordance with the pronouncement on interim reporting issued by the Accounting Standards Board;

(b) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year);

(c) the summarised set of Financial Statements give a true and fair view in accordance with UK GAAP of the assets, liabilities, financial position and profit and loss of the Company for the six months ended 30 June 2014 and comply with UK GAAP and Companies Act 2006;  and

(d) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

The accounting policies applied to the Half-yearly Financial Report have been consistently applied in current and prior periods and are those applied in the Annual Report and Financial Statements for the year ended 31 December 2013.

This Half-yearly Financial Report has not been audited or reviewed by the Auditor.

By order of the Board

Dr N E Cross
Chairman
8 August 2014

Portfolio of investments

The following is a summary of the technology fixed asset investments as at 30 June 2014:

Technology investments	% voting rights held by Albion Technology & General VCT PLC	Cost £'000	Cumulative movement in value £'000	Value £'000		Change in value for the period* £'000
Blackbay Limited	23.5	4,159	969	5,128		9
Process Systems Enterprise Limited	13.3	2,019	1,209	3,228		112
Lowcosttravelgroup Limited	15.3	2,638	92	2,730		171
AMS Sciences Limited	23.9	1,953	177	2,130		304
memsstar Limited	19.2	1,322	617	1,939		55
Mirada Medical Limited	15.4	690	1,035	1,725		(45)
Rostima Holdings Limited	29.2	1,553	(240)	1,313		(465)
sparesFinder Limited	10.4	613	449	1,062		23
Helveta Limited	30.3	3,224	(2,205)	1,019		(450)
Peakdale Molecular Limited	6.0	650	325	975		209
DySIS Medical Limited	8.5	1,181	(274)	907		(256)
Oxsensis Limited	13.9	1,589	(686)	903		-
Relayware Limited	2.9	639	40	679		27
Aridhia Informatics Limited	1.7	581	15	596		11
Cisiv Limited	2.3	257	(12)	245		(15)
Silent Herdsman Holdings Limited	4.9	214	-	214		-
Egress Software Technologies Limited	2.1	200	-	200		-
Proveca Limited	3.8	187	9	196		8
Palm Tree Technology Limited	0.5	320	(156)	164		(163)
Abcodia Limited	3.1	139	1	140		1
MyMeds&Me Limited	2.2	137	-	137		-
Grapeshot Limited	1.2	135	-	135		-
Sandcroft Avenue Limited (payasUgym.com)	0.4	25	-	25		-
Total technology investments		24,425	1,365	25,790		(464)

*As adjusted for additions and disposals during the period.

The following is a summary of the non-technology fixed asset investments as at 30 June 2014:

Non-technology investments	% voting rights held by Albion Technology & General VCT PLC	Cost £'000	Cumulative movement in value £'000	Value £'000		Change in value for the period* £'000
Radnor House School (Holdings) Limited	15.3	3,224	1,575	4,799		42
Taunton Hospital Limited	17.8	2,838	588	3,426		40
Kensington Health Clubs Limited	18.2	5,225	(1,984)	3,241		(412)
The Weybridge Club Limited	25.2	3,648	(804)	2,844		(508)
Bravo Inns II Limited	15.1	2,639	12	2,651		35
The Charnwood Pub Company Limited	22.5	3,481	(994)	2,487		236
Tower Bridge Health Clubs Limited	20.2	1,126	691	1,817		622
Bravo Inns Limited	28.8	2,134	(524)	1,610		(11)
Chichester Holdings Limited	37.6	2,380	(1,225)	1,155		170
The Street by Street Solar Programme Limited	8.1	896	157	1,053		22
Masters Pharmaceuticals Limited	5.8	796	239	1,035		65
TEG Biogas (Perth) Limited	12.4	766	66	832		11
Alto Prodotto Wind Limited	6.9	692	139	831		48
Regenerco Renewable Energy Limited	7.9	779	44	823		15
The Q Garden Company Limited	33.4	2,401	(1,590)	811		46
Hilson Moran Holdings Limited	9.0	513	243	756		19
Chonais Holdings Limited	7.5	750	4	754		3
Erin Solar Limited	15.7	440	-	440		(1)
Green Highland Renewables (Ledgowan) Limited	12.9	434	5	439		5
Premier Leisure (Suffolk) Limited	25.8	1,212	(791)	421		10
Albion Investment Properties Limited	22.6	434	(70)	364		8
AVESI Limited	8.0	247	17	264		17
The Dunedin Pub Company VCT Limited	25.8	230	(1)	229		4
Harvest AD Limited	0.0	210	-	210		-
Greenenerco Limited	3.1	110	40	150		40
Consolidated PR Limited	21.5	623	(523)	100		50
Total non-technology investments		38,228	(4,686)	33,542		576
Total unquoted investments		62,653	(3,321)	59,332		112

AIM quoted investments	% voting rights held by Albion Technology & General VCT PLC	Cost £'000	Cumulative movement in value £'000	Value £'000		Change in value for the period* £'000
Mi-Pay Group PLC	22.4	3,852	(957)	2,895		(224)
Total AIM quoted investments		3,852	(957)	2,895		(224)
Total Fixed Asset Investments		66,505	(4,278)	62,227		(112)

Current asset investments	Cost £'000	Cumulative movement in value £'000	Value £'000		Change in value for the period* £'000
Dexela Limited	41	170	211		106
Opta Sports Data Limited	13	28	41		-
Total current asset investments	54	198	252		106

* As adjusted for additions and disposals during the period.

Total change on value on investments for the year Realised gain in current year						(6) -
Movement in loan stock accrued interest						15
Total gains on investments as per income statement						9

Summary income statement
  

		Unaudited six months ended 30 June 2014			Unaudited six months ended 30 June 2013			Audited year ended 31 December 2013
	Note	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Gains on investments	3	-	9	9	-	1,246	1,246	-	3,787	3,787
Investment income	4	918	-	918	571	-	571	1,082	-	1,082
Investment management fees	5	(200)	(600)	(800)	(111)	(334)	(445)	(247)	(743)	(990)
Other expenses		(129)	-	(129)	(105)	-	(105)	(247)	-	(247)
Return/(loss) on ordinary activities before tax		589	(591)	(2)	355	912	1,267	588	3,044	3,632
Tax (charge)/credit on ordinary activities		(120)	120	-	(79)	76	(3)	(124)	144	20
Return/(loss) attributable to shareholders		469	(471)	(2)	276	988	1,264	464	3,188	3,652
Basic and diluted return/(loss) per share (pence)*	7	0.61	(0.61)	0.00	0.70	2.30	3.00	1.00	6.90	7.90

* excluding treasury shares
  
Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 June 2013 and the audited statutory accounts for the year ended 31 December 2013.

The accompanying notes form an integral part of this Half-yearly Financial Report.

The total column of this Summary income statement represents the profit and loss account of the Company. The supplementary revenue and capital columns have been prepared in accordance with The Association of Investment Companies' Statement of Recommended Practice.

All revenue and capital items in the above statement derive from continuing operations of the Company including the return on the assets and liabilities of Albion Income and Growth VCT PLC after they were acquired by the Company on 15 November 2013.

There are no recognised gains or losses other than the results for the periods disclosed above. Accordingly a Statement of total recognised gains and losses is not required. The difference between the reported return/ (loss) on ordinary activities before tax and the historical profit is due to the fair value movements on investments. As a result a note on historical cost profit and losses has not been prepared.

Summary balance sheet

	Note	Unaudited 30 June 2014 £'000	Unaudited 30 June 2013 £'000	Audited 31 December 2013 £'000
Fixed asset investments		62,227	34,124	61,637
Current assets
Trade and other debtors		334	23	350
Current asset investments		252	65	147
Cash at bank and in hand	10	1,807	2,394	3,226
		2,393	2,482	3,723
Creditors: amounts falling due within one year		(476)	(369)	(529)
Net current assets		1,917	2,113	3,194
Net assets		64,144	36,237	64,831
Capital and reserves
Called up share capital	8	826	472	799
Share premium		32,814	2,300	30,031
Capital redemption reserve		28	12	21
Unrealised capital reserve		(4,169)	(5,473)	(4,166)
Realised capital reserve		10,324	9,218	10,792
Other distributable reserve		24,321	29,708	27,354
Total equity shareholders' funds		64,144	36,237	64,831
Basic and diluted net asset value per share (pence)*		82.01	84.60	85.75

* excluding treasury shares

Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 June 2013 and the audited statutory accounts for the year ended 31 December 2013.

The accompanying notes form an integral part of this Half-yearly Financial Report.

These Financial Statements were approved by the Board of Directors and authorised for issue on 8 August 2014, and were signed on its behalf by

Dr N E Cross
Chairman
Company number: 04114310

Summary reconciliation of movements in shareholders' funds

	Called-up share capital	Share premium	Capital redemption reserve	Unrealised capital reserve*	Realised capital reserve*	Other distributable reserve *	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
1 January 2014 (Audited)	799	30,031	21	(4,166)	10,792	27,354	64,831
Return/(loss) for the period	-	-	-	9	(480)	469	(2)
Transfer of previously unrealised gains on investments	-	-	-	(12)	12	-	-
Purchase of shares for cancellation	(7)	-	7	-	-	(563)	(563)
Purchase of shares for Treasury	-	-	-	-	-	(40)	(40)
Issue of equity (net of costs)	34	2,783	-	-	-	-	2,817
Dividends paid	-	-	-	-	-	(2,899)	(2,899)
As at 30 June 2014 (Unaudited)	826	32,814	28	(4,169)	10,324	24,321	64,144
1 January 2013 (Audited)	454	346	6	(6,678)	9,435	30,896	34,459
Return/(loss) for the period	-	-	-	1,260	(272)	276	1,264
Transfer of previously unrealised gains on disposal of investments	-	-	-	(55)	55	-	-
Purchase of shares for cancellation	(6)	-	6	-	-	(403)	(403)
Issue of equity (net of costs)	24	1,954	-	-	-	-	1,978
Dividends paid	-	-	-	-	-	(1,061)	(1,061)
As at 30 June 2013 (Unaudited)	472	2,300	12	(5,473)	9,218	29,708	36,237
1 January 2013 (Audited)	454	346	6	(6,678)	9,435	30,896	34,459
Return for the period	-	-	-	3,082	106	464	3,652
Transfer of previously unrealised gains on sale of investments	-	-	-	(570)	570	-	-
Purchase of shares for cancellation	(15)	-	15	-	-	(1,209)	(1,209)
Issue of equity (net of costs)	24	2,058	-	-	-	-	2,082
Shares issued to acquire net assets of Albion Income & Growth VCT PLC (net of issue costs) **	336	27,627	-	-	-	-	27,963
Transfer from other distributable reserve to realised capital reserve	-	-	-	-	681	(681)	-
Dividends paid	-	-	-	-	-	(2,116)	(2,116)
As at 31 December 2013 (Audited)	799	30,031	21	(4,166)	10,792	27,354	64,831

*Included within these reserves is an amount of £30,476,000 (30 June 2013: £33,453,000; 31 December 2013: £33,980,000) which is considered distributable.
** The assets and liabilities transferred through the acquisition of Albion Income & Growth VCT PLC are shown in note 11. In addition, £106,000 of the merger costs attributable to Albion Technology & General VCT PLC have been deducted from the share premium account in so far as they relate to the issue of new shares.

Summary cash flow statement

	Note	Unaudited six months ended 30 June 2014 £'000	Unaudited six months ended 30 June 2013 £'000	Audited year ended 31 December 2013 £'000
Operating activities
Loan stock income received		883	569	1,159
Deposit interest received		14	9	30
Dividend income received		40	5	15
Investment management fees paid		(808)	(428)	(887)
Other cash payments		(161)	(108)	(210)
Net cash flow from operating activities	9	(32)	47	107
Taxation
UK corporation tax (paid)/recovered		(11)	8	(2)
Capital expenditure and financial investments
Purchase of fixed asset investments		(958)	(762)	(3,082)
Disposal of fixed asset investments		262	931	3,778
Net cash flow from investing activities		(696)	169	696
Equity dividends paid
Dividends paid (net of cost of issuing shares under the dividend reinvestment scheme)		(2,622)	(960)	(1,912)
Net cash flow before financing		(3,361)	(736)	(1,111)
Financing
Issue of share capital (net of costs)		2,547	1,877	1,877
Purchase of own shares (including costs)		(603)	(403)	(1,209)
Cash acquired from Albion Income & Growth VCT PLC		-	-	2,273
Costs of Merger (paid on behalf of the Company and Albion Income & Growth VCT PLC)		(2)	-	(260)
Net cash flow from financing		1,942	1,474	2,681
Net cash flow in the period	10	(1,419)	738	1,570

Notes to the unaudited summarised Financial Statements

1. Accounting convention
The Financial Statements have been prepared in accordance with the historical cost convention, modified to include the revaluation of investments, in accordance with applicable United Kingdom law and accounting standards and with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ("SORP") issued by The Association of Investment Companies ("AIC") in January 2009. Accounting policies have been applied consistently in current and prior periods.

2. Accounting policies
Fixed and current asset investments
Quoted and unquoted equity investments, debt issued at a discount and convertible bonds
In accordance with FRS 26 "Financial Instruments Recognition and Measurement", quoted and unquoted equity, debt issued at a discount and convertible bonds are designated as fair value through profit or loss ("FVTPL"). Investments listed on recognised exchanges are valued at the closing bid prices at the end of the accounting period. Unquoted investments' fair value is determined by the Directors in accordance with the December 2012 International Private Equity and Venture Capital Valuation Guidelines (IPEVCV guidelines).

Fair value movements on equity investments and gains and losses arising on the disposal of investments are reflected in the capital column of the Income statement in accordance with the AIC SORP. Realised gains or losses on the sale of investments will be reflected in the realised capital reserve, and unrealised gains or losses arising from the revaluation of investments will be reflected in the unrealised capital reserve.

Warrants and unquoted equity derived instruments
Warrants and unquoted equity derived instruments are only valued if there is additional value to the Company in exercising or converting as at the balance sheet date. Otherwise these instruments are held at nil value. The valuation techniques used are those used for the underlying equity investment.

Unquoted loan stock
Unquoted loan stock (excluding convertible bonds and debt issued at a discount) are classified as loans and receivables as permitted by FRS 26 and measured at amortised cost using the Effective Interest Rate method less impairment. Movements in amortised cost relating to interest income are reflected in the revenue column of the Income statement, and hence are reflected in the other distributable reserve, and movements in respect of capital provisions are reflected in the capital column of the Income statement and are reflected in the realised capital reserve following sale, or in the unrealised capital reserve on movements arising from revaluations of the fair value of the security.

For all unquoted loan stock, whether fully performing, past due or impaired, the Board considers that the fair value is equal to or greater than the security value of these assets. For unquoted loan stock, the amount of the impairment is the difference between the asset's cost and the present value of estimated future cash flows, discounted at the original effective interest rate. The future cash flows are estimated based on the fair value of the security less the estimated selling costs.

Investments are recognised as financial assets on legal completion of the investment contract and are de-recognised on legal completion of the sale of an investment.

In accordance with the exemptions under FRS 9 "Associates and joint ventures", those undertakings in which the Company holds more than 20 per cent. of the equity as part of an investment portfolio are not accounted for using the equity method.

Current asset investments
Contractual future contingent receipts on the disposal of fixed asset investments are designated at fair value through profit or loss and are subsequently measured at fair value.

Dividend income is not recognised as part of the fair value movement of an investment, but is recognised separately as investment income through the other distributable reserve when a share becomes ex-dividend.

Loan stock accrued interest is recognised in the Balance sheet as part of the carrying value of the loans and receivables at the end of each reporting period.

Acquisition of assets and liabilities from Albion Income & Growth VCT PLC
On 15 November 2013 the Company acquired the assets and liabilities of Albion Income & Growth VCT PLC. The income and costs for the period up to 14 November 2013 reflect the activities of the Company before the acquisition and after that date reflect those of the Company as enlarged by the acquisition. Further information is contained in note 11.

Investment income
Unquoted equity income
Dividend income is included in revenue when the investment is quoted ex-dividend.

Unquoted loan stock and other preferred income
Fixed returns on non-equity shares and debt securities are recognised on a time apportionment basis using an effective interest rate over the life of the financial instrument. Income which is not capable of being received within a reasonable period of time is reflected in the capital value of the investment.

Bank interest income
Interest income is recognised on an accruals basis using the rate of interest agreed with the bank.

Investment management fees and expenses
All expenses have been accounted for on an accruals basis. Expenses are charged through the other distributable reserve except the following which are charged through the realised capital reserve:

• 75 per cent. of management fees are allocated to realised capital reserve. This is in line with the Board's expectation that over the long term 75 per cent. of the Company's investment returns will be in the form of capital gains; and
   
• expenses which are incidental to the purchase or disposal of an investment are charged through the realised capital reserve.

Performance incentive fee
In the event that a performance incentive fee crystallises, the fee will be allocated between other distributable and realised capital reserves based upon the proportion to which the calculation of the fee is attributable to revenue and capital returns.

Taxation
Taxation is applied on a current basis in accordance with FRS 16 "Current tax". Taxation associated with capital expenses is applied in accordance with the SORP. In accordance with FRS 19 "Deferred tax", deferred taxation is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the Financial Statements. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted.

The Directors have considered the requirements of FRS 19 and do not believe that any provision for deferred tax should be made.

Reserves
Share premium account
This reserve accounts for the difference between the price paid for shares and the nominal value of the shares, less issue costs and transfers to the other distributable reserve.

Capital redemption reserve
This reserve accounts for amounts by which the issued share capital is diminished through the repurchase and cancellation of the Company's own shares.

Unrealised capital reserve
Increases and decreases in the valuation of investments held at the year end against cost are included in this reserve.

Realised capital reserve
The following are disclosed in this reserve:

• gains and losses compared to cost on the realisation of investments;
• expenses, together with the related taxation effect, charged in accordance with the above policies; and
• dividends paid to equity holders.

Other distributable reserve
This reserve accounts for movements from the revenue column of the Income statement, the payment of dividends, the buyback of shares and other non capital realised movements.

Dividends
In accordance with FRS 21 "Events after the balance sheet date", dividends by the Company are accounted for in the period in which the dividend is declared.

3.         Gains on investments

	Unaudited six months ended 30 June 2014 £'000	Unaudited six months ended 30 June 2013 £'000	Audited year ended 31 December 2013 £'000
Unrealised gains on fixed asset investments held at fair value through profit or loss	271	1,571	2,405
Unrealised (impairments)/reversals of impairments on fixed asset investments held at amortised cost	(368)	(311)	649
Unrealised (losses)/gains on fixed asset investments  sub-total	(97)	1,260	3,054
Unrealised gains on current assets held at fair value through profit or loss	106	-	28
Unrealised gains sub-total	9	1,260	3,082
Realised (losses)/gains on fixed asset investments held at fair value through profit or loss	-	(14)	796
Realised losses on fixed asset investments held at amortised cost	-	-	(91)
Realised (losses)/gains sub-total	-	(14)	705
	9	1,246	3,787

Investments valued on an amortised cost basis are unquoted loan stock instruments as described in note 2.

4.         Investment income

	Unaudited six months ended 30 June 2014 £'000	Unaudited six months ended 30 June 2013 £'000	Audited year ended 31 December 2013 £'000
Income recognised on investments held at fair value through profit or loss
UK dividend income	38	5	17
Income from convertible bonds and discounted debt	151	70	109
	189	75	126
Income recognised on investments held at amortised cost
Return on loan stock investments	716	485	926
Bank deposit interest	13	11	30
	729	496	956
	918	571	1,082

All of the Company's income is derived from operations based in the United Kingdom.

5.         Investment management fees

	Unaudited six months ended 30 June 2014 £'000	Unaudited six months ended 30 June 2013 £'000	Audited year ended 31 December 2013 £'000
Investment management fee charged to revenue	200	111	247
Investment management fee charged to capital	600	334	743
	800	445	990

Further details of the management agreement under which the investment management fee is paid are given in the Directors' report on pages 24 and 25 of the Annual Report and Financial Statements for the year ended 31 December 2013.

During the period, services to a total value of £800,000 (30 June 2013: £445,000; 31 December 2013: £990,000) were purchased by the Company from Albion Ventures LLP. At the financial period end, the amount due to Albion Ventures LLP in respect of these services was £395,000 (30 June 2013: £233,000; 31 December 2013: £403,000).

During the period, the Company was not charged by Albion Ventures LLP in respect of Patrick Reeve's services as a Director (30 June 2013: £11,000; 31 December 2013: £18,000).  At the financial period end, the amount due to Albion Ventures LLP in respect of these services was nil (30 June 2013: £5,000; 31 December 2013: £5,300).

Albion Ventures LLP holds 1,012 fractional entitlement shares of the Company as a result of the conversion of C shares to Ordinary shares on 31 March 2011. In addition, Albion Ventures LLP holds a further 7,361 Ordinary shares in the Company. These shares will be sold for the benefit of the Company at a later date.

Albion Ventures LLP is, from time to time, eligible to receive transaction fees and Directors' fees from portfolio companies. During the period to 30 June 2014, fees of £132,000 attributable to the investments of the Company were received pursuant to these arrangements (30 June 2013: £57,000; 31 December 2013: £142,000).

During the period the Company raised new funds through the Albion VCTs Top Up Offers as described in note 8. The total cost of the issue of these shares was 3 per cent. of the sums subscribed. Of these costs, an amount of £3,351 (30 June 2013: £3,186; 31 December 2013: £3,186) was paid to the Manager, Albion Ventures LLP in respect of receiving agent services. There were no sums outstanding in respect of receiving agent services at the year end.

6.         Dividends

	Unaudited six months ended 30 June 2014 £'000	Unaudited six months ended 30 June 2013 £'000	Audited Year ended 31 December 2013 £'000
Dividend of 2.50p per Ordinary share paid on 30 April 2013	-	1,061	1,061
Dividend of 2.50p per Ordinary share paid on 31 October 2013	-	-	1,055
Dividend of 1.25p per Ordinary share paid on 31 January 2014	945	-	-
Dividend of 1.25p per Ordinary share paid on 30 April 2014	977
Dividend of 1.25p per Ordinary share paid on 30 June 2014	977	-	-
	2,899	1,061	2,116

           
The Directors have declared a dividend of 1.25 pence per Ordinary share (total approximately £983,000) payable on 31 October 2014 to shareholders on the register as at 3 October 2014.

7.         Basic and diluted return/(loss) per share
Return per share has been calculated on 77,205,683 Ordinary shares excluding treasury shares (30 June 2013: 41,669,928; 31 December 2013: 46,363,621) being the weighted average number of shares in issue for the period.

There are no convertible instruments, derivatives or contingent share agreements in issue, and therefore no dilution effecting the return per share. The basic return per share is therefore the same as the diluted return per share.

8.         Share capital

	Unaudited 30 June 2014 £'000	Unaudited 30 June 2013 £'000	Audited 31 December 2013 £'000
Allotted, called up and fully paid 82,610,846 Ordinary shares of 1 penny each (30 June 2013: 47,191,713; 31 December 2013: 79,945,976)	826	472	799

Voting rights
78,219,776 Ordinary shares of 1 penny each (net of treasury shares) (30 June 2013: 42,850,643; 31 December 2013: 75,604,906).

During the period the Company purchased 702,000 Ordinary shares for cancellation (30 June 2013: 551,000; 31 December 2013: 1,591,723) at a cost of £563,000 including stamp duty (30 June 2013: £403,000; 31 December 2013: £1,209,000), representing 0.85 per cent. of its issued share capital as at 30 June 2014. The shares purchased for cancellation were funded by the other distributable reserve.

During the period the Company purchased 50,000 Ordinary shares to be held in treasury (30 June 2013: nil; 31 December 2013: nil) at a cost of £40,000, leaving a balance of 4,391,070 Ordinary shares in treasury (30 June 2013: 4,341,070; 31 December 2013: 4,341,070) which represents 5.3 per cent. of the issued share capital as at 30 June 2014.

In the previous year the Company issued 33,664,049 Ordinary shares to former shareholders of Albion Income & Growth VCT PLC, at an issue price of 83.38p, as part of the Merger explained in note 11.

Under the terms of the dividend reinvestment scheme, the following Ordinary shares of nominal value 1 penny each were allotted during the period to 30 June 2014:

Date of allotment	Number of shares allotted	Issue price (pence per share)	Net consideration received (£'000)	Opening market price per share on allotment date (pence per share)
31 January 2014	110,409	82.13	74	77.50
30 April 2014	122,573	83.25	99	80.00
30 June 2014	123,187	81.05	97	80.00
	356,169		270

Under the terms of the Albion VCTs Top Up Offers 2013/2014, the following Ordinary shares of nominal value 1 penny each were allotted during the period to 30 June 2014:

Date of allotment	Number of shares allotted	Issue price (pence per share)	Net consideration received (£'000)	Opening market price per share on allotment date (pence per share)
31 January 2014	18,007	83.30	15	77.50
31 January 2014	495,432	84.10	409	77.50
31 January 2014	605,375	84.60	499	77.50
5 April 2014	14,216	87.60	12	80.00
5 April 2014	15,405	88.00	13	80.00
5 April 2014	493,954	88.50	424	80.00
	1,642,389		1,372

Under the terms of the Albion VCTs Prospectus Top Up Offers 2013/2014, the following Ordinary shares of nominal value 1 penny each were allotted during the period to 30 June 2014:

Date of allotment	Number of shares allotted	Issue price (pence per share)	Net consideration received (£'000)	Opening market price per share on allotment date (pence per share)
5 April 2014	1,368,312	88.50	1,175	80.00

	Number of shares issued	Net Proceeds £'000
Total shares issued under the Albion VCTs Top Up Offers 2013/2014 and the Albion VCTs Prospectus Top Up Offers 2013/2014 for the period to 30 June 2014	3,010,701	2,547

The Albion VCTs Prospectus Top Up Offers 2013/2014 will close no later than 30 September 2014 (unless fully subscribed by an earlier date or previously closed).

9.         Reconciliation of revenue return on ordinary activities before taxation to net cash flow from operating activities

	Unaudited six months ended 30 June 2014 £'000	Unaudited six months ended 30 June 2013 £'000	Audited year ended 31 December 2013 £'000
Revenue return on ordinary activities before tax	589	355	588
Investment management fee charged to capital	(600)	(334)	(743)
Movement in accrued amortised loan stock interest	15	9	125
Increase in operating debtors	(3)	(1)	(1)
(Decrease)/increase in operating creditors	(33)	18	138
Net cash flow from operating activities	(32)	47	107

10.       Analysis of change in cash during the period

	Unaudited six months ended 30 June 2014 £'000	Unaudited six months ended 30 June 2013 £'000	Audited year ended 31 December 2013 £'000
Opening cash balances	3,226	1,656	1,656
Net cash flow	(1,419)	738	1,570
Closing cash balances	1,807	2,394	3,226

11. Acquisition of the assets and liabilities of Albion Income & Growth VCT PLC

On 15 November 2013, the following assets and liabilities of Albion Income & Growth VCT PLC ("Income & Growth") were transferred to the Company in exchange for the issue to Income & Growth shareholders of 33,664,049 shares in the Company, at an issue price of 83.38 pence per share:

		£'000
Fixed asset investments		25,948
Debtors		117
Cash at bank and in hand		2,273
Current asset investments		54
Creditors		(163)
Merger costs		(154)
		28,075

The net asset value of each fund used for the purposes of conversion at the calculation date of 14 November 2013 were 83.38 pence per share and 65.15 pence per share for the Company and Income & Growth respectively.  The conversion ratio for each Income & Growth share was 0.7813 Albion Technology & General VCT PLC share for each Income & Growth share.

12.       Commitments and contingencies
            As at 30 June 2014, the Company had the following financial commitments in respect of investments:

- Chonais Holdings Limited; £645,000
- Green Highland Renewables Limited; £366,000
- Proveca Limited; £112,000
- MyMeds&Me Limited; £88,000
- DySIS Medical Limited; £13,000

There are no contingencies or guarantees of the Company as at 30 June 2014 (30 June 2013 and 31 December 2013: nil).

13.       Post balance sheet events
            Since 30 June 2014, the Company has completed the following material transactions:

-	Investment of £400,000 in Infinite Ventures (Goathill) Limited;
-	Investment of £200,000 in Omprompt Limited;
-	Investment of £180,000 in Chonais Holdings Limited;
-	Investment of £98,000 in Cisiv Limited;
-	Investment of £77,000 in Green Highland Renewables (Ledgowan) Limited;
-	Investment of £74,000 in Rostima Limited;
-	Investment of £54,000 in Blackbay Limited;
-	Investment of £39,000 in Taunton Hospital Limited;
-	Investment of £22,000 in MyMeds&Me Limited;
-	Investment of £10,000 in Mirada Medical Limited;
-	Proceeds of £949,000 (excluding deferred consideration) received from the disposal of the investment in Peakdale Molecular Limited;
-	Proceeds of £230,000 received from the disposal of the investment in The Dunedin Pub Company VCT Limited;

The following Ordinary shares of nominal value 1 penny were allotted under the Albion VCTs Top Up Offers 2013/2014 after 30 June 2014:

Date of allotment	Number of Ordinary shares allotted	Issue price (pence per share)	Net consideration received (£'000)	Opening market price per share on allotment date (pence per share)
4 July 2014	21,032	82.80	17	80.00
4 July 2014	4,806	83.20	4	80.00
4 July 2014	26,825	83.70	22	80.00
	52,663		43

Under the Albion VCT Prospectus Top Up Offers 2013/2014 after 30 June 2014:

Date of allotment	Number of Ordinary shares allotted	Issue price (pence per share)	Net consideration received (£'000)	Opening market price per share on allotment date (pence per share)
4 July 2014	339,509	83.70	276	80.00

14.        Related party transactions

Other than transactions with the Manager as described in note 5, there are no other related party transactions.

15.        Going concern
The Board's assessment of liquidity risk remains unchanged since the last Annual Report and Financial Statements for the year ended 31 December 2013, and is detailed on page 54 of those accounts. The Company has adequate cash and liquid resources. The portfolio of investments is diversified in terms of sector, and the major cash outflows of the Company (namely investments, dividends and share buy-backs) are within the Company's control. Accordingly, after making diligent enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Directors have adopted the going concern basis in preparing this Half-yearly Financial Report and this is in accordance with 'Going Concern and Liquidity Risk: Guidance for Directors of UK Companies 2009' published by the Financial Reporting Council.

16.        Risks and uncertainties
In addition to the current economic risks outlined in the Interim management report, the Board considers that the Company faces the following major risks and uncertainties:

1. Economic risk
Changes in economic conditions, including, for example, interest rates, rates of inflation, industry conditions, competition, political and diplomatic events and other factors could substantially and adversely affect the Company's prospects in a number of ways.

To reduce this risk, in addition to investing equity in portfolio companies, the Company often invests in secured loan stock and has a policy of not normally permitting any external bank borrowings within portfolio companies. Additionally, the Manager has been rebalancing the sector exposure of the portfolio with a view to reducing reliance on consumer led sectors.

2. Investment risk
This is the risk of investment in poor quality assets which reduces the capital and income returns to shareholders, and negatively impacts on the Company's reputation. By nature, smaller unquoted businesses, such as those that qualify for venture capital trust purposes, are more fragile than larger, long established businesses.

To reduce this risk, the Board places reliance upon the skills and expertise of the Manager and its strong track record for investing in this segment of the market. In addition, the Manager operates a formal and structured investment process, which includes an Investment Committee, comprising investment professionals from the Manager and at least one external investment professional. The Manager also invites and takes account of comments from non-executive Directors of the Company on investments discussed at the Investment Committee meetings. Investments are actively and regularly monitored by the Manager (investment managers normally sit on portfolio company boards) and the Board receives detailed reports on each investment as part of the Manager's report at quarterly board meetings. 

3. Valuation risk
The Company's investment valuation methodology is reliant on the accuracy and completeness of information that is issued by portfolio companies. In particular, the Directors may not be aware of or take into account certain events or circumstances which occur after the information issued by such companies is reported.

As described in note 2 of the Financial Statements, the unquoted equity investments, convertible loan stock and debt issued at a discount held by the Company are designated at fair value through profit or loss and valued in accordance with the International Private Equity and Venture Capital Valuation Guidelines. These guidelines set out recommendations, intended to represent current best practice on the valuation of venture capital investments. These investments are valued on the basis of forward looking estimates and judgements about the business itself, its market and the environment in which it operates, together with the state of the mergers and acquisitions market, stock market conditions and other factors. In making these judgements the valuation takes into account all known material facts up to the date of approval of the Financial Statements by the Board. All other unquoted loan stock is measured at amortised cost. The values of a number of investments are also underpinned by independent third party professional valuations.

4. Venture Capital Trust approval risk
The Company's current approval as a venture capital trust allows investors to take advantage of tax reliefs on initial investment and ongoing tax free capital gains and dividend income. Failure to meet the qualifying requirements could result in investors losing the tax relief on initial investment and loss of tax relief on any tax-free income or capital gains received. In addition, failure to meet the qualifying requirements could result in a loss of listing of the shares. 

To reduce this risk, the Board has appointed the Manager, who has a team with significant experience in venture capital trust management, used to operating within the requirements of the venture capital trust legislation. In addition, to provide further formal reassurance, the Board has appointed PricewaterhouseCoopers LLP as its taxation advisor. PricewaterhouseCoopers LLP report quarterly to the Board to independently confirm compliance with the venture capital trust legislation, to highlight areas of risk and to inform on changes in legislation. Each investment in a new portfolio company is also pre-cleared with H.M. Revenue and Customs.

5. Compliance risk
The Company is listed on The London Stock Exchange and is required to comply with the rules of the UK Listing Authority, as well as with the Companies Act, Accounting Standards and other legislation. Failure to comply with these regulations could result in a delisting of the Company's shares, or other penalties under the Companies Act or from financial reporting oversight bodies.

Board members and the Manager have experience of operating at senior levels within quoted businesses. In addition, the Board and the Manager receive regular updates on new regulation from its auditor, lawyers and other professional bodies.

6. Internal control risk
Failures in key controls, within the Board or within the Manager's business, could put assets of the Company at risk or result in reduced or inaccurate information being passed to the Board or to shareholders.

The Audit Committee meets with the Manager's Internal Auditor, PKF Littlejohn LLP, when required, receiving a report regarding the last formal internal audit performed on the Manager, and providing the opportunity for the Audit Committee to ask specific and detailed questions. Neil Cross and Mary Anne Cordeiro, as members of the Audit Committee, met with the internal audit Partner of PKF Littlejohn LLP in January 2014 to discuss the most recent Internal Audit Report on the Manager. The Manager has a comprehensive business continuity plan in place in the event that operational continuity is threatened. Further details regarding the Board's management and review of the Company's internal controls through the implementation of the Turnbull guidance are detailed on pages 31 and 32 of the Annual Report and Financial Statements for the year ended 31 December 2013.

Measures are in place to mitigate information risk in order to ensure the integrity, availability and confidentiality of information used within the business.

7. Reliance upon third parties risk
The Company is reliant upon the services of Albion Ventures LLP for the provision of investment management and administrative functions.

There are provisions within the management agreement for the change of Manager under certain circumstances (for further detail, see the management agreement paragraph on pages 24 and 25 of the Annual Report and Financial Statements for the year ended 31 December 2013). In addition, the Manager has demonstrated to the Board that there is no undue reliance placed upon any one individual within Albion Ventures LLP.

8. Financial risks
By its nature, as a venture capital trust, the Company is exposed to investment risk (which comprises investment price risk and cash flow interest rate risk), credit risk and liquidity risk.

The Company's policies for managing these risks and its financial instruments are outlined in full in note 20 of the Annual Report and Financial Statements for the year ended 31 December 2013.

All of the Company's income and expenditure is denominated in sterling and hence the Company has no foreign currency risk. The Company is financed through equity and does not have any borrowings. The Company does not use derivative financial instruments for speculative purposes.

17.        Other information
The information set out in this Half-yearly Financial Report does not constitute the Company's statutory accounts within the terms of section 434 of the Companies Act 2006 for the periods ended 30 June 2014 and 30 June 2013, and is unaudited. The information for the year ended 31 December 2013 does not constitute statutory accounts within the terms of section 434 of the Companies Act 2006 but is derived from the audited statutory accounts for the financial year, which were unqualified and which have been delivered to the Registrar of Companies. The Auditor reported on those accounts; their report was unqualified and did not contain a statement under s498 (2) or (3) of the Companies Act 2006.

18.        Publication
This Half-yearly Financial Report is being sent to shareholders and copies will be made available to the public at the registered office of the Company, Companies House, the National Storage Mechanism and also electronically at www.albion-ventures.co.uk/OurFunds/AATG.htm.

Chart

---

This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Albion Technology & General VCT PLC - Ordinary Shares via Globenewswire

HUG#1847400