Albion Venture Capital Trust PLC : Annual Finan...
Albion Venture Capital Trust PLC
As required by the UK Listing Authority's Disclosure and Transparency Rules 4.1 and 6.3, Albion Venture Capital Trust PLC today makes public its information relating to the Annual Report and Financial Statements for the year ended 31 March 2016.
This announcement was approved for release by the Board of Directors on 27 June 2016.
This announcement has not been audited.
You will shortly be able to view the Annual Report and Financial Statements for the year to 31 March 2016 (which have been audited) at: www.albion-ventures.co.uk/funds/AAVC. The Annual Report and Financial Statements for the year to 31 March 2016 will be available as a PDF document via a link in the 'Financial Reports and Circulars' section. The information contained in the Annual Report and Financial Statements will include information as required by the Disclosure and Transparency Rules, including Rule 4.1.
Investment objective and policy
The investment strategy of Albion Venture Capital Trust PLC (the "Company") is to manage the risk normally associated with investments in smaller unquoted companies whilst maintaining an attractive yield, through allowing investors the opportunity to participate in a balanced portfolio of asset-backed businesses. The Company's investment portfolio will thus be structured to provide a balance between income and capital growth for the longer term.
This is achieved as follows:
- qualifying unquoted investments are predominantly in specially-formed companies which provide a high level of asset backing for the capital value of the investment;
- The Company invests alongside selected partners with proven experience in the sectors concerned;
- investments are normally structured as a mixture of equity and loan stock. The loan stock represents the majority of the finance provided and is secured on the assets of the portfolio company. Funds managed or advised by Albion Ventures LLP typically own 50 per cent. of the equity of the portfolio company;
- other than the loan stock issued to funds managed or advised by Albion Ventures LLP, portfolio companies do not normally have external borrowings.
The Company offers tax-paying investors substantial tax benefits at the time of investment, on payment of dividends and on the ultimate disposal of the investment.
Background to the Company
The Company is a venture capital trust which raised a total of £39.7 million through an issue of Ordinary shares in the spring of 1996 and through an issue of C shares in the following year. The C shares merged with the Ordinary shares in 2001. The Company has raised a further £21.1 million under the Albion VCTs Top Up Offers since 2011.
On 25 September 2012, the Company acquired the assets and liabilities of Albion Prime VCT PLC ("Prime") in exchange for new shares in the Company. Each Prime shareholder received 0.8801 shares in the Company for each Prime share that they held at the date of the Merger.
Financial calendar
| Record date for first dividend | 8 July 2016 |
Payment of first dividend | 29 July 2016 |
| Annual General Meeting | 11:00am on 8 August 2016 |
| Announcement of half-yearly results for the six months ended 30 September 2016 | November 2016 |
| Payment of second dividend (subject to Board approval) | 30 December 2016 |
Financial highlights
| 5.6p | Basic and diluted total return per share for the year ended 31 March 2016 |
| 5.0p | Total tax-free dividend per share paid during the year ended 31 March 2016 |
| 72.0p | Net asset value per share as at 31 March 2016 |
| 211.8p | Total shareholder return since launch to 31 March 2016 |
| 7.5% | Tax free yield on share price (dividend per annum/share price as at 31 March 2016) |
| 6.3% | Annualised return since launch (without tax relief) |
| 31 March 2016 | 31 March 2015 | |
| (pence per share) | (pence per share) | |
| Dividends paid | 5.0 | 5.0 |
| Revenue return | 2.0 | 2.1 |
| Capital return | 3.6 | 3.2 |
| Net asset value | 72.0 | 71.6 |
| Total shareholder return to 31 March 2016 | Ordinary shares | |
| Total dividends paid during the year ended : | 31 March 1997 | 2.00 |
| 31 March 1998 | 5.20 | |
| 31 March 1999 | 11.05 | |
| 31 March 2000 | 3.00 | |
| 31 March 2001 | 8.55 | |
| 31 March 2002 | 7.60 | |
| 31 March 2003 | 7.70 | |
| 31 March 2004 | 8.20 | |
| 31 March 2005 | 9.75 | |
| 31 March 2006 | 11.75 | |
| 31 March 2007 | 10.00 | |
| 31 March 2008 | 10.00 | |
| 31 March 2009 | 10.00 | |
| 31 March 2010 | 5.00 | |
| 31 March 2011 | 5.00 | |
| 31 March 2012 | 5.00 | |
| 31 March 2013 | 5.00 | |
| 31 March 2014 | 5.00 | |
| 31 March 2015 | 5.00 | |
| 31 March 2016 | 5.00 | |
| Total dividends paid to 31 March 2016 | 139.80 | |
| Net asset value as at 31 March 2016 | 72.00 | |
| Total shareholder return to 31 March 2016 | 211.80 | |
The financial summary above is for the Company, Albion Venture Capital Trust PLC Ordinary shares only. Details of the financial performance of the C shares and Albion Prime VCT PLC, which have been merged into the Company, can be found at the end of this report.
In addition to the dividends summarised above, the Board has declared a first dividend for the year ending 31 March 2017 of 2.5 pence per share to be paid on 29 July 2016 to shareholders on the register as at 8 July 2016.
Notes
· Dividends paid before 5 April 1999 were paid to qualifying shareholders inclusive of the associated tax credit. The dividends for the year to 31 March 1999 were maximised in order to take advantage of this tax credit.
· All dividends paid by the Company are paid free of income tax to qualifying shareholders. It is an H.M. Revenue & Customs requirement that dividend vouchers indicate the tax element should dividends have been subject to income tax. Investors should ignore this figure on their dividend voucher and need not disclose any income they receive from a VCT on their tax return.
· The net asset value of the Company is not its share price as quoted on the official list of the London Stock Exchange. The share price of the Company can be found in the Investment Companies - VCTs section of the Financial Times on a daily basis. Investors are reminded that it is common for shares in VCTs to trade at a discount to their net asset value.
Chairman's statement
Introduction
The results for the year to 31 March 2016 show a total return of 5.6 pence per share, against 5.3 pence per share for the previous year, and net assets of 72.0 pence per share compared to 71.6 pence per share at 31 March 2015, following the payment of total tax-free dividends of 5 pence per share. The Company raised approximately £4.3 million during the year under the Albion VCTs Prospectus Top Up Offers 2014/2015 and approximately £5.6 million under the Albion VCTs Prospectus Top Up Offers 2015/2016, with a subsequent £0.3 million after the year end.
It is encouraging that the Company's total return continues for the second year to more than cover its dividend of 5 pence per share. This has been partly through an increase in the income generated by the investment portfolio, which has risen 12 per cent. from the previous year. The principal element, however, has come from capital uplifts; in particular the sale of our Kensington Health Club realised a strong uplift in value, while the opening of the first of our three care homes which have been under construction led to a substantial uplift in the third party valuation.
Investment performance and progress
In general, we have been continuing the task of repositioning the portfolio, aimed at a reduced reliance on sectors that are exposed to the consumer and business cycle. Renewable energy now accounts for 19 per cent. of the portfolio, while healthcare accounts for 22 per cent. and education for 7 per cent.
Taking these sectors in turn, our renewable energy investments are now mature and will not be subject to further investment, other than our biogas plant, Earnside Energy, which is currently expanding its capacity. It is intended to hold these cash-generative investments for the longer term with the aim of providing low risk diversification for the investment portfolio as a whole, combined with a strong source of income.
Shinfield Court, outside Reading, which has been one of our three care homes under construction, opened in April 2016 and is filling at rates, and at a pace, which are both encouraging. This resulted in a strong uplift following a third party valuation. Active Lives Care (trading as Cumnor Hill House), which is based in Oxford opened in June 2016; and Ryefield Court, based in Hillingdon in West London, is expected to open in July. Current indications are positive for both.
In education, Radnor House School continues to grow with over 400 pupils due for the September 2016 term. Meanwhile, Combe Bank School, which was acquired last year, has now been renamed Radnor House Sevenoaks. Having begun the year with 210 pupils, it is now anticipated that the pupil roll in September 2016 will be significantly higher.
We continue to review our hotel portfolio with a view to selling up to two of our units by this time next year. Trading at Stansted has been strong, in line with the general uplift in passenger numbers at the airport and this has been reflected in the valuation. With regard to our pubs, our North West portfolio, within Bravo Inns, continues to perform according to plan and to provide strong cash generation for the Company; while we have now sold the underlying pubs within Charnwood Pub Company.
Risks and uncertainties
The outlook for the UK economy, where growth is slow, continues to be the key risk affecting your Company. The recent referendum calling for Britain to withdraw from the European Union is likely to have an effect on the Company and its investments, although the extent of this is not quantifiable at this time.
If the referendum has a material adverse effect on the UK economy, the Company's investment portfolio will be affected. We would expect the effects of this to be felt most in those sectors which are most exposed to the consumer and business cycle.
The regulatory environment in which the Company operates has had significant input from rules developed within the European Union and the Company has no way of currently evaluating what changes may occur in a separate UK regulatory environment.
Withdrawal from the European Union may create new instabilities in markets generally and these instabilities may affect the valuation and market liquidity of the Company's existing investments as well as affect the availability or pricing of new investments.
The Company's policy remains that its portfolio companies should not normally have external borrowings and for the Company to have a first charge over portfolio companies' assets. The Board and the Manager see this as an important factor in the control of investment risk. However, on an exceptional basis, certain portfolio companies may take on external borrowings, where the Board considers this will offer a significant benefit to the Company.
A detailed analysis of the other risks and uncertainties facing the business is set out in the Strategic report below.
Changes in VCT legislation
The July 2015 budget introduced a number of changes to VCT legislation, including restrictions over the age of investments; a prohibition on management buyouts or the purchase of existing businesses; and an overall lifetime investment cap of £12 million from tax-advantaged funds into any portfolio company. While these changes are significant, the Manager's assessment is that had they been in place previously, they would have affected only a relatively small number of the investments that we have made into new portfolio companies over recent years. The Board's current view is that there will be no material change in our investment policy as a result.
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. Thereafter, it is still the Board's policy to buy back shares in the market, subject to the overall criterion that such purchases are in the Company's interest. The total value bought in for the previous six months to 31 March 2016 was £273,000. Subject to the constraints referred to above and subject to first purchasing shares held by the market makers, the Board will target 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.
Results and dividends
As at 31 March 2016, the net asset value was £57.0 million or 72.0 pence per share, compared to £46.9 million or 71.6 pence per share as at 31 March 2015, after the payment of total tax-free dividends of 5 pence per share. The results comprised a total return of 5.6 pence per share for the year (2015: 5.3 pence per share), which is made up of a 2.0 pence per share revenue return (2015: 2.1 pence per share) and a 3.6 pence per share capital return after taking into account capitalised expenses (2015: 3.2 pence per share). The revenue return before taxation was £1.7 million compared to £1.5 million for the year to 31 March 2015. The Company will pay a first dividend of 2.5 pence per share for the year ending 31 March 2017 on 29 July 2016 to shareholders on the register on 8 July 2016, which is in line with the Company's current objective of paying a dividend of 5 pence per share annually.
Outlook and prospects
We are pleased with the progress made during the course of the year, in particular the building up of our healthcare portfolio. Looking forwards, we are reviewing a number of interesting areas for investment and would anticipate further progress in the current year.
David Watkins
Chairman
27 June 2016
Strategic report
Investment objective and policy
The Company's investment policy is to provide investors with the opportunity to participate in a balanced portfolio of asset-backed businesses. The Company's investment portfolio will thus be structured to provide a balance between income and capital growth for the longer term.
This is achieved as follows:
- qualifying unquoted investments are predominantly in specially-formed companies which provide a high level of asset backing for the capital value of the investment;
- the Company invests alongside selected partners with proven experience in the sectors concerned;
- investments are normally structured as a mixture of equity and loan stock. The loan stock normally represents the majority of the finance provided and is secured on the assets of the portfolio company. Funds managed or advised by Albion Ventures LLP typically own 50 per cent. of the equity of the portfolio company; and
- other than the loan stock issued to funds managed or advised by Albion Ventures LLP, portfolio companies do not normally have external borrowings.
Current portfolio sector allocation
The pie chart at the end of this announcement shows the split of the portfolio valuation by industrial or commercial sector as at 31 March 2016. Details of the principal investments made by the Company are shown in the Portfolio of investments on pages 17 and 18 of the full Annual Report and Financial Statements.
Direction of portfolio
The sector analysis of the Company's investment portfolio shows that healthcare now accounts for 22 per cent. of the portfolio, compared to 13 per cent. at the end of the previous financial year, following further investments in the Company's three care homes (and a revaluation of Shinfield). This is likely to increase as the care homes are revalued in the future. Renewable energy accounts for 19 per cent. of the portfolio, but other than a further investment of £1m in Earnside Energy shortly after the year end to expand its capacity, no further investments are being made in this sector. Hotels accounted for 23 per cent. compared to 27 per cent. at the previous year end and the Company is looking to reduce this further.
Results and dividends
| Ordinary shares £'000 | ||
| Net revenue return for the year ended 31 March 2016 | 1,403 | |
| Net capital gain for the year ended 31 March 2016 | 2,612 | |
| Total return for the year ended 31 March 2016 | 4,015 | |
| Dividend of 2.5 pence per share paid on 31 July 2015 | (1,789) | |
| Dividend of 2.5 pence per share paid on 31 December 2015 | (1,782) | |
| Unclaimed dividends returned to the Company | 22 | |
| Transferred to reserves | 466 | |
| Net assets as at 31 March 2016 | 56,955 | |
| Net asset value per share as at 31 March 2016 (pence) | 72.0 |
The Company paid dividends totalling 5.0 pence per share during the year ended 31 March 2016 (2015: 5.0 pence per share). The dividend objective of the Board is to provide Shareholders with a strong, predictable dividend flow, with a dividend target of 5.0 pence per share per year.
As noted in the Chairman's statement, the Board has declared a first dividend of 2.5 pence per share for the year ending 31 March 2017. This dividend will be paid on 29 July 2016 to shareholders on the register as at 8 July 2016.
As shown in the Income statement, the Company's investment income has increased to £2,236,000 (2015: £1,989,000) and the total revenue return to equity holders also increased to £1,403,000 (2015: £1,314,000), principally driven by the Company's successful renewable energy development programme. Income continues to more than cover on-going expenses. Although total income has increased, revenue return per share has decreased slightly, to 2.0 pence per share (2015: 2.1 pence per share), due to the number of shares issued during the year.
The capital gain on investments for the year was £3,203,000 (2015: £2,569,000), offset by management fees charged to capital and the related taxation impact, resulting in a capital return of 3.6 pence per share (2015: 3.2 pence per share).
The total return was 5.6 pence per share (2015: 5.3 pence per share).
The Balance sheet shows that the net asset value has increased over the last year to 72.0 pence per share (2015: 71.6 pence per share), primarily reflecting the total return exceeding the level of dividends paid during the year.
The cash flow for the Company has been a net inflow of £1,328,000 for the year (2015: inflow £1,497,000), reflecting cash inflows from operations, disposal proceeds and the issue of Ordinary shares under the Albion VCTs Top Up Offers, offset by dividends paid, new investments in the year and the buy-back of shares.
During the year, unclaimed dividends older than twelve years of £22,000 (2015: £41,000) were returned to the Company in accordance with the terms of the Articles of Association.
Review of business and future changes
A review of the Company's business during the year and investment performance and progress is contained in the Chairman's statement. The healthcare sector performed particularly well again this year with an increase in valuations of £1,517,000 (2015: £1,031,000). The renewable energy sector was also strong with an increase in valuations of £670,000 (2015: £1,047,000). The hotel sector saw an increase of £524,000 (2015: £266,000), although The Stanwell Hotel saw a decrease during the year of £254,000. The education sector saw an increase in the valuation of Radnor House School of £337,000. The health and fitness clubs sector saw mixed results after we disposed of our Kensington health club investment for a gain on opening value of £843,000, whilst The Weybridge Club decreased in valuation by £492,000. The Charnwood Pub decreased in value by £234,000 during the year, which led to the pub sector as a whole decreasing by £209,000 (2015: £121,000).
The Company continues with its objective to invest in asset-based unquoted companies throughout the United Kingdom, with a view to providing both capital growth and a reliable dividend income to shareholders over the longer term. The Directors do not foresee any major changes in the activity undertaken by the Company in the current year.
Details of significant events which have occurred since the end of the financial year are listed in note 20. Details of transactions with the Manager are shown in note 5.
VCT regulation
The investment policy is designed to ensure that the Company continues to qualify and is approved as a VCT by HMRC. In order to maintain its status under Venture Capital Trust legislation, a VCT must comply on a continuing basis with the provisions of Section 274 of the Income Tax Act 2007, details of which are provided in the Directors' report on page 22 of the full Annual Report and Financial Statements.
As part of the Government's wider review of the VCT regime, new rules have been introduced under the Finance Act (No.2) 2015 which received Royal Assent on 18 November 2015, which include:
- Restrictions over the age of investments;
- A prohibition on management buyouts or the purchase of existing businesses; and
- An overall lifetime investment cap of £12 million from tax-advantaged funds into any portfolio company.
While these changes are significant, the Manager's assessment is that had they been in place previously they would have affected only a relatively small minority of the investments that we have made into new portfolio companies over recent years. The Board's current view is that there will be no material change in our investment policy as a result.
The relevant tests to measure compliance have been carried out and independently reviewed for the year ended 31 March 2016. These showed that the Company has complied with all tests and continues to do so.
Future prospects
The Company's performance record reflects the resilience of the strategy outlined above and has enabled the Company to maintain a predictable stream of dividend payments to shareholders. The Board believes that this model will continue to meet the investment objective and has the potential to deliver attractive returns to shareholders in the future.
Key performance indicators
The Directors believe that the following key performance indicators, which are typical for venture capital trusts and used by the Board in its assessment of the Company, will provide shareholders with sufficient information to assess how effectively the Company is applying its investment policy to meet its objective. The Directors are satisfied that the results shown in the following key performance indicators give a good indication that the Company is achieving its investment objective and policy. These are:
- Net asset value total return relative to FTSE All Share Index total return
The graph on page 4 of the full Annual Report and Financial Statements shows the Company's net asset value total return against the FTSE All-Share Index total return, in both instances with dividends reinvested.
- Net asset value per share and total shareholder return
Net asset value increased by 7.5 per cent. (after adding back the 5.0 pence per share in dividends paid) to 72.0 pence per share for the year ended 31 March 2016.
Total shareholder return increased by 2.6 per cent. to 211.8 pence per share for the year ended 31 March 2016.
- Dividend distributions
Dividends paid in respect of the year ended 31 March 2016 were 5.00 pence per share (2015: 5.00 pence per share), in line with the Board's dividend objective. Cumulative dividends paid since inception amount to 139.80 pence per Ordinary share and 128.25 pence per historic C share.
- Ongoing charges
The ongoing charges ratio for the year to 31 March 2016 was 2.5 per cent. (2015: 2.5 per cent.). The ongoing charges ratio has been calculated using The Association of Investment Companies' (AIC) recommended methodology. This figure shows shareholders the total recurring annual running expenses (including investment management fees charged to capital reserve) as a percentage of the average net assets attributable to shareholders. The Directors expect the ongoing charges ratio for the year ahead to be approximately 2.5 per cent. The cap on total annual normal expenses, including the management fee, is 3.0 per cent. of the net asset value.
Gearing
As defined by the Articles of Association, the Company's maximum exposure in relation to gearing is restricted to 10 per cent. of the adjusted share capital and reserves. The Directors do not currently have any intention to utilise gearing for the Company. On an exceptional basis, certain portfolio companies may take on external borrowings, where the Board considers this will offer a significant benefit to the Company.
Operational arrangements
The Company has delegated the investment management of the portfolio to Albion Ventures LLP, which is authorised and regulated by the Financial Conduct Authority. Albion Ventures LLP also provides company secretarial and other accounting and administrative support to the Company.
Management agreement
Under the Management agreement, the Manager provides investment management, secretarial and administrative services to the Company. The Management agreement can be terminated by either party on 12 months' notice. The Management agreement is subject to earlier termination in the event of certain breaches or on the insolvency of either party. The Manager is paid an annual fee equal to 1.9 per cent. of the net asset value of the Company, and an annual secretarial and administrative fee of £48,087 (2015: £47,658) increased annually by RPI. These fees are payable quarterly in arrears.
In line with common practice, the Manager is also entitled to an arrangement fee, payable by each portfolio company, of approximately 2 per cent. on each investment made and any applicable monitoring fees.
Management performance incentive
In order to provide the Manager with an incentive to maximise the return to investors, the Company has entered into a management performance incentive arrangement with the Manager. Under the incentive arrangement, the Company will pay an incentive fee to the Manager of an amount equal to 8 per cent. of the excess total return above 5 per cent. per annum, paid out annually in cash as an addition to the management fee. Any shortfall of the target return will be carried forward into subsequent periods and the incentive fee will only be paid once all previous and current target returns have been met.
For the year to 31 March 2016, no incentive fee became due to the Manager (2015: £nil).
No further performance fee will become due until the hurdle rate comprising net asset value, plus dividends from 31 March 2004, has been reached. As of 31 March 2016 the total return from 31 March 2004 amounted to 158.5 pence per share which compared to the hurdle of 203.1 pence per share at that date.
Investment and co-investment
The Company co-invests with other venture capital trusts and funds managed by Albion Ventures LLP. Allocation of investments is on the basis of an allocation agreement which is based, inter alia, on the ratio of funds available for investment.
Evaluation of the Manager
The Board has evaluated the performance of the Manager based on the returns generated by the Company, the continued compliance under venture capital trust legislation, the long term prospects of current investments, a review of the Management agreement and the services provided therein, and benchmarking the performance of the Manager to other service providers. The Board believes that it is in the interests of shareholders as a whole, and of the Company, to continue the appointment of the Manager for the forthcoming year.
Alternative Investment Fund Managers Directive ("AIFMD")
The Board has appointed Albion Ventures LLP as the Company's AIFM as required by the AIFMD.
Social and community issues, employees and human rights
The Board recognises the requirement under section 414C of the Act to detail information about social and community issues, employees and human rights; including any policies it has in relation to these matters and effectiveness of these policies. As an externally managed investment company with no employees, the Company has no policies in these matters and as such these requirements do not apply.
Further policies
The Company has adopted a number of further policies relating to:
- Environment
- Global greenhouse gas emissions
- Anti-bribery
- Diversity
and these are set out in the Directors' report on pages 22 and 23 of the full Annual Report and Financial Statements.
Risk management
The Board carries out a robust assessment of principal risks in which the Company operates. The principal risks and uncertainties of the Company as identified by the Board and how they are managed are as follows:
| Risk | Possible consequence | Risk management | |
| 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. | |
| VCT 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, which 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 Philip Hare & Associates LLP as its taxation adviser. Philip Hare & Associates 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 & Customs. | |
| 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. The success of investments in certain sectors is also subject to regulatory risk, such as those affecting companies involved in UK renewable energy. | 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. | |
| 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 investments held by the Company are classified 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. The values of all investments are at cost (reviewed for impairment) or supported by independent third party professional valuations. | |
| 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 or advising quoted businesses. In addition, the Board and the Manager receive regular updates on new regulation from its auditor, lawyers and other professional bodies. The Company is subject to compliance checks via the Manager's Compliance Officer. The Manager reports monthly to its Board on any issues arising from compliance or regulation. These controls are also reviewed as part of the quarterly Manager Board meetings, and also as part of the review work undertaken by the Manager's Compliance Officer. The report on controls is also evaluated by the internal auditors. | |
| 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. John Kerr, Chairman of the Audit Committee, met with the internal audit Partner of PKF Littlejohn LLP in January 2016 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 Guidance on Risk Management, Internal Control and Related Financial and Business Reporting are detailed on page 29 of the full Annual Report and Financial Statements. Measures are in place to mitigate information risk in order to ensure the integrity, availability and confidentiality of information used within the business. | |
| 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 within this Strategic report). In addition, the Manager has demonstrated to the Board that there is no undue reliance placed upon any one individual within Albion Ventures LLP. | |
| Financial risk | 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 18 to the Financial Statements. 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. | |
Viability statement
In accordance with the FRC UK Corporate Governance Code published in September 2014 and principle 21 of the AIC Code of Corporate Governance published by the AIC in February 2015, the Directors have assessed the prospects of the Company over three years to 31 March 2019. The Directors have taken a three year period as the Code does not specify a time period, except that it must be longer than 12 months. The Directors believe that three years is a reasonable period in which they can assess the future of the Company to continue to operate and meet its liabilities, as they fall due and is also the period used by the Board in the strategic planning process and is considered reasonable for a business of our nature and size.
The Directors have carried out a robust assessment of the principal risks facing the Company as explained above, including those that could threaten its business model, future performance, solvency or liquidity. The Board also considered the risk management processes in place to avoid or reduce the impact of the underlying risks. The Board focused on the major factors which affect the economic, regulatory and political environment. The Board deliberated over the importance of the Manager and the processes that it has in place for dealing with the principal risks.
The Board assessed the ability of the Company to raise finance. As explained in this Strategic report the Company's income more than covers ongoing expenses. This income should increase as our asset-backed investments continue to mature. The portfolio is well balanced and geared towards long term growth delivering dividends and capital growth to shareholders. In assessing the prospects of the Company the Directors have considered the cash flow by looking at the Company's income and expenditure projections and funding pipeline over the assessment period of three years and they appear realistic.
Taking into account the processes for mitigating risks, monitoring costs, share price discount, the Manager's compliance with the investment objective, policies and business model and the balance of the portfolio the Directors have concluded that there is a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the three year period to 31 March 2019.
This Strategic report of the Company for the year ended 31 March 2016 has been prepared in accordance with the requirements of section 414A of the Companies Act 2006 (the "Act"). The purpose of this report is to provide Shareholders with sufficient information to enable them to assess the extent to which the Directors have performed their duty to promote the success of the Company in accordance with section 172 of the Act.
The Strategic report was approved by the Board of Directors on 27 June 2016 and was signed on its behalf by:
David Watkins
Chairman
27 June 2016
Responsibility statement
In preparing these Financial Statements for the year to 31 March 2016, the Directors of the Company, being David Watkins, John Kerr, Jeff Warren and Ebbe Dinesen, confirm that to the best of their knowledge:
- summary financial information contained in this announcement and the full Annual Report and Financial Statements for the year ended 31 March 2016 for the Company have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (UK Accounting Standards and applicable law) and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company for the year ended 31 March 2016 as required by DTR 4.1.12.R;
- the Chairman's statement and Strategic report include a fair review of the information required by DTR 4.2.7R (indication of important events during the year ended 31 March 2016 and description of principal risks and uncertainties that the Company faces); and
- the Chairman's statement and Strategic report include a fair review of the information required by DTR 4.2.8R (disclosure of related parties transactions and changes therein).
A detailed "Statement of Directors' responsibilities" is contained on page 25 within the full audited Annual Report and Financial Statements.
By order of the Board
David Watkins
Chairman
27 June 2016
Income statement
| Year ended 31 March 2016 | Year ended 31 March 2015 | ||||||
| Revenue | Capital | Total | Revenue | Capital | Total | ||
| Note | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Gains on investments | 3 | - | 3,203 | 3,203 | - | 2,569 | 2,569 |
| Investment income | 4 | 2,236 | - | 2,236 | 1,989 | - | 1,989 |
| Investment management fees | 5 | (246) | (739) | (985) | (212) | (636) | (848) |
| Other expenses | 6 | (287) | - | (287) | (273) | - | (273) |
| Return on ordinary activities before tax | 1,703 | 2,464 | 4,167 | 1,504 | 1,933 | 3,437 | |
| Tax (charge)/credit on ordinary activities | 8 | (300) | 148 | (152) | (190) | 135 | (55) |
| Return and total comprehensive income attributable to shareholders | 1,403 | 2,612 | 4,015 | 1,314 | 2,068 | 3,382 | |
| Basic and diluted return per share (pence)* | 10 | 2.0 | 3.6 | 5.6 | 2.1 | 3.2 | 5.3 |
* excluding treasury shares
The accompanying notes form an integral part of these Financial Statements.
The total column of this 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.
There are no recognised gains or losses other than the results for the year disclosed above. Accordingly a statement of total comprehensive income is not required.
The difference between the reported profit on ordinary activities before tax and the historical profit is due to the fair value movements on investments.
Balance sheet
| 31 March 2016 | 31 March 2015 | ||
| Note | £'000 | £'000 | |
| Fixed asset investments | 11 | 45,015 | 38,229 |
| Current assets | |||
| Trade and other receivables less than one year | 13 | 2,139 | 166 |
| Cash and cash equivalents | 10,330 | 9,002 | |
| 12,469 | 9,168 | ||
| Total assets | 57,484 | 47,397 | |
| Creditors: amounts falling due within one year | |||
| Trade and other payables less than one year | 14 | (529) | (469) |
| Total assets less current liabilities | 56,955 | 46,928 | |
| Equity attributable to equityholders | |||
| Called up share capital | 15 | 861 | 714 |
| Share premium | 18,374 | 8,228 | |
| Capital redemption reserve | 7 | 7 | |
| Unrealised capital reserve | 1,128 | (2,269) | |
| Realised capital reserve | 10,737 | 11,522 | |
| Other distributable reserve | 25,848 | 28,726 | |
| Total equity shareholders' funds | 56,955 | 46,928 | |
| Basic and diluted net asset value per share (pence)* | 16 | 72.0 | 71.6 |
* excluding treasury shares
The accompanying notes form an integral part of these Financial Statements.
These Financial Statements were approved by the Board of Directors and authorised for issue on 27 June 2016, and were signed on its behalf by
David Watkins
Chairman
Company number: 03142609
Statement of changes in equity
| 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 | |
| As at 1 April 2015 | 714 | 8,228 | 7 | (2,269) | 11,522 | 28,726 | 46,928 |
| Return and total comprehensive income for the year | - | - | - | 2,343 | 269 | 1,403 | 4,015 |
| Transfer of previously unrealised gains/(losses) on realisations of investments | - | - | - | 1,054 | (1,054) | - | - |
| Purchase of treasury shares | - | - | - | - | - | (733) | (733) |
| Issue of equity | 147 | 10,423 | - | - | - | - | 10,570 |
| Cost of issue of equity | - | (277) | - | - | - | - | (277) |
| Net dividends paid (note 9) | - | - | - | - | - | (3,549) | (3,549) |
| As at 31 March 2016 | 861 | 18,374 | 7 | 1,128 | 10,737 | 25,848 | 56,955 |
| As at 1 April 2014 | 645 | 3,525 | 7 | (3,343) | 10,527 | 31,297 | 42,658 |
| Return and total comprehensive income for the year | - | - | - | 1,442 | 626 | 1,314 | 3,382 |
| Transfer of previously unrealised gains/(losses) on realisations of investments | - | - | - | (368) | 368 | - | - |
| Purchase of treasury shares | - | - | - | - | - | (760) | (760) |
| Issue of equity | 69 | 4,827 | - | - | - | - | 4,896 |
| Cost of issue of equity | - | (124) | - | - | - | - | (124) |
| Net dividends paid (note 9) | - | - | - | - | - | (3,125) | (3,125) |
| As at 31 March 2015 | 714 | 8,228 | 7 | (2,269) | 11,522 | 28,726 | 46,928 |
* Included within the aggregate of these reserves is an amount of £36,585,000 (2015: £37,979,000) which is considered distributable.
Statement of cash flows
| Year ended 31 March 2016 | Year ended 31 March 2015 | |
| £'000 | £'000 | |
| Operating activities | ||
| Loan stock income received | 2,028 | 1,764 |
| Deposit interest received | 115 | 76 |
| Dividend income received | 81 | 57 |
| Investment management fees paid | (938) | (828) |
| Other cash payments | (273) | (271) |
| Corporation tax (paid)/refund | (99) | 64 |
| Net cash flow from operating activities | 915 | 862 |
| Cash flow from investing activities | ||
| Purchase of fixed asset investments | (6,430) | (9,042) |
| Disposal of fixed asset investments | 2,786 | 8,833 |
| Net cash flow from investing activities | (3,644) | (209) |
| Cash flow from financing activities | ||
| Issue of share capital* | 7,886 | 4,478 |
| Cost of issue of equity | (2) | (1) |
| Dividends paid | (3,094) | (2,873) |
| Purchase of own shares (including costs) | (733) | (760) |
| Net cash flow from financing activities | 4,057 | 844 |
| Increase in cash and cash equivalents | 1,328 | 1,497 |
| Cash and cash equivalents at start of period | 9,002 | 7,505 |
| Cash and cash equivalents at end of period | 10,330 | 9,002 |
| Cash and cash equivalents comprise | ||
| Cash at bank and in hand | 10,330 | 9,002 |
| Cash equivalents | - | - |
| Total cash and cash equivalents | 10,330 | 9,002 |
*An additional £1,988,000 relating to shares subscribed and allotted on 31 March 2016 was received after the year end, bringing total proceeds for the year ended 31 March 2016 to £9,874,000 as shown in note 15.
Notes to the Financial Statements
1. Basis of preparation
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, including Financial Reporting Standard 102 ("FRS 102"), and with the 2014 Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ("SORP") issued by The Association of Investment Companies ("AIC"). This is the first period in which the Financial Statements have been prepared under FRS 102 which became mandatory for companies with a financial year beginning from 1 January 2015. On adoption of, and in accordance with FRS 102, loans and receivables previously measured at amortised cost using the effective interest rate method less impairment have been classified at fair value through profit and loss ("FVTPL"). This has not led to a material change in value and so has not led to a restatement of comparatives. Further details can be found in note 17.
The preparation of the Financial Statements requires management to make judgements and estimates that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The most critical estimates and judgements relate to the determination of carrying value of investments at FVTPL. The Company values investments by following the International Private Equity and Venture Capital Valuation ("IPEVCV") Guidelines and further detail on the valuation techniques used are outlined in note 2.
2. Accounting policies
Fixed asset investments
The Company's business is investing in financial assets with a view to profiting from their total return in the form of income and capital growth. This portfolio of financial assets is managed and its performance evaluated on a fair value basis, in accordance with a documented investment policy, and information about the portfolio is provided internally on that basis to the Board.
In accordance with the requirements of FRS 102, 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. In these circumstances the investment is measured at FVTPL.
Upon initial recognition (using trade date accounting) investments, including loan stock, are classified by the Company as FVTPL and are included at their initial fair value, which is cost (excluding expenses incidental to the acquisition which are written off to the income statement).
Subsequently, the investments are valued at 'fair value', which is measured as follows:
- Investments listed on recognised exchanges are valued at their bid prices at the end of the accounting period or otherwise at fair value based on published price quotations;
- Unquoted investments, where there is not an active market, are valued using an appropriate valuation technique in accordance with the IPEVCV Guidelines. Indicators of fair value are derived using established methodologies including earnings multiples, the level of third party offers received, prices of recent investment rounds, net assets and industry valuation benchmarks. Where the Company has an investment in an early stage enterprise, the price of a recent investment round is often the most appropriate approach to determining fair value. In situations where a period of time has elapsed since the date of the most recent transaction, consideration is given to the circumstances of the portfolio company since that date in determining fair value. This includes consideration of whether there is any evidence of deterioration or strong definable evidence of an increase in value. In the absence of these indicators, the investment in question is valued at the amount reported at the previous reporting date. Examples of events or changes that could indicate a diminution include:
- the performance and/or prospects of the underlying business are significantly below the expectations on which the investment was based;
- a significant adverse change either in the portfolio company's business or in the technological, market, economic, legal or regulatory environment in which the business operates; or
- market conditions have deteriorated, which may be indicated by a fall in the share prices of quoted businesses operating in the same or related sectors.
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.
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.
Debtors and creditors and cash are carried at amortised cost, in accordance with FRS 102. There are no financial liabilities other than creditors.
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 when the Company's right to receive payment and expect settlement is established. Where interest is rolled up and/or payable at redemption then it is recognised as income unless there is reasonable doubt as to its receipt.
Bank interest income
Interest income is recognised on an accrual basis using the rate of interest agreed with the bank.
Investment management fees and other expenses
All expenses have been accounted for on an accruals basis. Expenses are charged through the revenue account except the following which are charged through the realised capital reserve:
- 75 per cent. of management fees are allocated to the capital account to the extent that these relate to an enhancement in the value of the investments and in line with the Board's expectation that over the long term 75 per cent. of the Company's investment returns will be in the form of capital gains; and
- expenses which are incidental to the purchase or disposal of an investment are charged through the realised capital reserve.
Performance incentive fee
In the event that a performance incentive fee crystallises, the fee will be allocated between revenue and realised capital reserves based upon the proportion to which the calculation of the fee is attributable to revenue and capital returns.
Taxation
Taxation is applied on a current basis in accordance with FRS 102. Current tax is tax payable (refundable) in respect of the taxable profit (tax loss) for the current period or past reporting periods using the tax rates and laws that have been enacted or substantively enacted at the financial reporting date. Taxation associated with capital expenses is applied in accordance with the SORP.
Deferred tax is provided in full on all timing differences at the reporting date. Timing differences are differences between taxable profits and total comprehensive income as stated in the financial statements that arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements. As a VCT the Company has an exemption from tax on capital gains. The Company intends to continue meeting the conditions required to obtain approval as a VCT in the foreseeable future. The Company therefore, should have no material deferred tax timing differences arising in respect of the revaluation or disposal of investments and the Company has not provided for any deferred tax.
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 where paid out by capital.
Other distributable reserve
The Special reserve, Treasury share reserve and the Revenue reserve were combined in 2012 to form a single reserve named Other distributable reserve.
This reserve accounts for movements from the revenue column of the Income statement, the payment of dividends, the buy-back of shares and other non-capital realised movements.
Dividends
Dividends by the Company are accounted for in the period in which the dividend is paid or approved at the Annual General Meeting.
3. Gains on investments
| Year ended 31 March 2016 | Year ended 31 March 2015 | |
| £'000 | £'000 | |
| Unrealised gains on fixed asset investments | 2,343 | 1,442 |
| Realised gains on fixed asset investments | 860 | 1,127 |
| Gains on investments | 3,203 | 2,569 |
4. Investment income
| Year ended 31 March 2016 | Year ended 31 March 2015 | |
| £'000 | £'000 | |
| Income recognised on investments | ||
| Loan stock interest and other fixed returns | 2,039 | 1,860 |
| Dividend income | 81 | 51 |
| Bank deposit interest | 116 | 78 |
| 2,236 | 1,989 |
Interest income earned on impaired investments at 31 March 2016 amounted to £208,000 (2015: £306,000).
All of the Company's income is derived from operations in the United Kingdom.
5. Investment management fees
| Year ended 31 March 2016 £'000 | Year ended 31 March 2015 £'000 | |
| Investment management fee charged to revenue | 246 | 212 |
| Investment management fee charged to capital | 739 | 636 |
| 985 | 848 |
Further details of the Management agreement under which the investment management fee is paid are given in the Strategic report.
During the year, services of a total value of £1,033,000 (2015: £896,000), were purchased by the Company from Albion Ventures LLP; this includes £985,000 (2015: £848,000) of investment management fee and £48,000 (2015: £48,000) administration fee. At the financial year end, the amount due to Albion Ventures LLP in respect of these services disclosed within accruals and deferred income was £282,000 (2015: £235,000).
Albion Ventures LLP is, from time to time, eligible to receive transaction fees and Directors' fees from portfolio companies. During the year ended 31 March 2016, fees of £116,000 attributable to the investments of the Company were received by Albion Ventures LLP pursuant to these arrangements (2015: £360,000).
Albion Ventures LLP, the Manager, holds 2,534 Ordinary shares as a result of fractional entitlements arising from the merger of Albion Prime VCT PLC into Albion Venture Capital Trust PLC on 25 September 2012. In addition, Albion Ventures LLP holds a further 20,860 Ordinary shares in the Company.
6. Other expenses
| Year ended 31 March 2016 | Year ended 31 March 2015 | |
| £'000 | £'000 | |
| Directors' fees (inc. NIC) | 93 | 90 |
| Secretarial and administration fee | 48 | 48 |
| Other administrative expenses | 119 | 110 |
| Auditor's remuneration for statutory audit services (exc. VAT) | 27 | 25 |
| 287 | 273 |
7. Directors' fees
The amounts paid to and on behalf of Directors during the year are as follows:
| Year ended 31 March 2016 | Year ended 31 March 2015 | |
| £'000 | £'000 | |
| Directors' fees | 87 | 83 |
| National insurance | 6 | 7 |
| 93 | 90 |
The Company's key management personnel are the Directors. Further information regarding Directors' remuneration can be found in the Directors' remuneration report on page 32 of the full Annual Report and Financial Statements.
8. Tax (charge)/credit on ordinary activities
| Year ended 31 March 2016 | Year ended 31 March 2015 | |||||
| Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | |
| UK corporation tax in respect of current year | (324) | 148 | (176) | (305) | 135 | (170) |
| UK corporation tax in respect of prior year | 24 | - | 24 | 115 | - | 115 |
| Total | (300) | 148 | (152) | (190) | 135 | (55) |
Factors affecting the tax charge:
| Year ended 31 March 2016 £'000 | Year ended 31 March 2015 £'000 | |
| Return on ordinary activities before taxation | 4,167 | 3,437 |
| Tax on profit at the standard rate of 20% (2015: 21%) | (833) | (722) |
| Factors affecting the charge: | ||
| Non-taxable gains | 640 | 539 |
| Income not taxable | 17 | 11 |
| Consortium relief in respect of prior years | 24 | 115 |
| Marginal relief | - | 2 |
| (152) | (55) |
The tax charge for the year shown in the Income statement is lower than the standard rate of corporation tax in the UK of 20 per cent. (2015: 21 per cent.). The differences are explained above.
Consortium relief is recognised in the accounts in the period in which the claim is submitted to HMRC and is shown as tax in respect of prior year.
Notes
(i) Venture Capital Trusts are not subject to corporation tax on capital gains.
(ii) Tax relief on expenses charged to capital has been determined by allocating tax relief to expenses by reference to the applicable corporation tax rate and allocating the relief between revenue and capital in accordance with the SORP.
(iii) No deferred tax asset or liability has arisen in the year.
9. Dividends
| Year ended 31 March 2016 | Year ended 31 March 2015 | |||||
| £'000 | £'000 | |||||
| First dividend paid on 31 July 2014 - 2.5 pence per share | - | 1,576 | ||||
| Second dividend paid on 31 December 2014 - 2.5 pence per share | - | 1,590 | ||||
| First dividend paid on 31 July 2015 - 2.5 pence per share | 1,789 | - | ||||
| Second dividend paid on 31 December 2015 - 2.5 pence per share | 1,782 | - | ||||
| Unclaimed dividends | (22) | (41) | ||||
| 3,549 | 3,125 | |||||
In addition to the dividends summarised above, the Board has declared a first dividend for the year ending 31 March 2017 of 2.5 pence per share. This dividend will be paid on 29 July 2016 to shareholders on the register as at 8 July 2016. The total dividend will be approximately £1,987,000.
During the year, unclaimed dividends older than twelve years of £22,000 (2015: £41,000) were returned to the Company in accordance with the terms of the Articles of Association.
10. Basic and diluted return per share
| Year ended 31 March 2016 | Year ended 31 March 2015 | |||||
| Revenue | Capital | Total | Revenue | Capital | Total | |
| The return per share has been based on the following figures: | ||||||
| Return attributable to equity shares (£'000) | 1,403 | 2,612 | 4,015 | 1,314 | 2,068 | 3,382 |
| Weighted average shares in issue (excluding treasury shares) | 72,020,718 | 63,464,790 | ||||
| Return attributable per equity share (pence) | 2.0 | 3.6 | 5.6 | 2.1 | 3.2 | 5.3 |
The weighted average number of shares is calculated excluding treasury shares of 6,954,440 (2015: 5,841,440).
There are no convertible instruments, derivatives or contingent share agreements in issue, and therefore no dilution affecting the return per share. The basic return per share is therefore the same as the diluted return per share.
11. Fixed asset investments
| 31 March 2016 £'000 | 31 March 2015 £'000 | |
| Investments held at fair value through profit or loss Unquoted equity | 15,163 | 10,442 |
| Unquoted loan stock | 29,852 | 27,787 |
| 45,015 | 38,229 |
| 31 March 2016 £'000 | 31 March 2015 £'000 | ||||
| Opening valuation | 38,229 | 35,580 | |||
| Purchases at cost | 6,430 | 9,010 | |||
| Disposal proceeds | (2,852) | (9,026) | |||
| Realised gains | 860 | 1,127 | |||
| Movement in loan stock accrued income | 4 | 96 | |||
| Unrealised gains | 2,343 | 1,442 | |||
| Closing valuation | 45,015 | 38,229 | |||
| Movement in loan stock accrued income | |||||
| Opening accumulated movement in loan stock accrued income | 261 | 165 | |||
| Movement in loan stock accrued income | 4 | 96 | |||
| Closing accumulated movement in loan stock accrued income | 265 | 261 | |||
| Movement in unrealised (losses)/gains | |||||
| Opening accumulated unrealised losses | (2,269) | (3,343) | |||
| Transfer of previously unrealised losses/(gains) to realised reserve on realisations of investments | 1,054 | (368) | |||
| Unrealised gains | 2,343 | 1,442 | |||
| Closing accumulated unrealised gains/(losses) | 1,128 | (2,269) | |||
| Historic cost basis | |||||
| Opening book cost | 40,239 | 38,759 | |||
| Purchases at cost | 6,430 | 9,010 | |||
| Sales at cost* | (3,047) | (7,530) | |||
| Closing book cost* | 43,622 | 40,239 | |||
*Included in the sales at cost is the cost after deducting realised losses of £506,000 for The Charnwood Pub Company Limited which are still held at the Balance sheet date.
The Company does not hold any assets as a result of the enforcement of security during the period, and believes that the carrying values for both impaired and past due assets are covered by the value of security held for these loan stock investments.
Unquoted fixed asset investments are valued at fair value in accordance with the IPEVCV guidelines as follows:
| 31 March 2016 | 31 March 2015 | |
| Valuation methodology | £'000 | £'000 |
| Cost (reviewed for impairment) | 6,743 | 7,219 |
| Valuation supported by third party or desktop valuation | 38,272 | 31,010 |
| 45,015 | 38,229 |
Full valuations are prepared by independent RICS qualified surveyors in full compliance with the RICS Red Book. Desk-top reviews are carried out by similarly RICS qualified surveyors by updating previously prepared full valuations for current trading and market indices.
Fair value investments had the following movements between valuation methodologies between 31 March 2015 and 31 March 2016:
| Change in valuationmethodology (2015 to 2016) | Value as at 31 March 2016 £'000 | Explanatory note |
| Cost (reviewed for impairment) to Valuation supported by third party or desktop valuation | 4,390 | Third party valuation has recently taken place |
The valuation will be the most appropriate valuation methodology for an investment within its market, with regard to the financial health of the investment and the IPEVCV Guidelines. The Directors believe that, within these parameters, there are no other possible methods of valuation which would be reasonable as at 31 March 2016.
FRS 102 and the SORP requires the Company to disclose the inputs to the valuation methods applied to its investments measured at fair value through profit or loss in a fair value hierarchy according to the following definitions:
| Fair value hierarchy | Definition |
| Level A | Quoted prices in an active market |
| Level B | Price of a recent transaction for identical instruments |
| Level C (i) | Inputs to valuations are from observable sources and are directly or indirectly derived from prices |
| Level C (ii) | Inputs to valuations not based on observable market data |
Unquoted equity, preference shares and loan stock are all valued according to Level C (ii) valuation methods.
Investments held at fair value through profit or loss (Level C (ii)) had the following movements in the year to 31 March 2016:
| Equity | 31 March 2016 Unquoted loan stock | Total | Equity | 31 March 2015 Unquoted loan stock | Total | |||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||
| Opening balance | 10,442 | 27,787 | 38,229 | 11,093 | 5,790 | 16,883 | ||
| Re-classification to fair value* | - | - | - | - | 20,718 | 20,718 | ||
| Opening balance (revised) | 10,442 | 27,787 | 38,229 | 11,093 | 26,508 | 37,601 | ||
| Additions | 1,684 | 4,746 | 6,430 | 1,340 | 3,107 | 4,447 | ||
| Disposal proceeds | (721) | (2,131) | (2,852) | (4,875) | (200) | (5,075) | ||
| Loan stock conversion | - | - | - | - | (1,210) | (1,210) | ||
| Debt/equity swap | - | - | - | 590 | (590) | - | ||
| Accrued loan stock interest | - | 4 | 4 | - | 135 | 135 | ||
| Realised gains | 722 | 138 | 860 | 1,121 | - | 1,121 | ||
| Unrealised gains | 3,036 | (693) | 2,343 | 1,173 | 37 | 1,210 | ||
| Closing balance | 15,163 | 29,852 | 45,015 | 10,442 | 27,787 | 38,229 |
*As per FRS 102 adoption the unquoted loan stock balance for 2015 has been re-classified to include £20,718,000 of investments at fair value that were previously held under amortised cost.
FRS 102 requires the Directors to consider the impact of changing one or more of the inputs used as part of the valuation process to reasonable possible alternative assumptions. After due consideration and noting that the valuation methodology applied to 100 per cent. of the level C(ii) investments (by valuation) is based on cost or independent third party market information, the Directors do not believe that changes to reasonable possible alternative assumptions for the valuation of the portfolio as a whole would lead to a significant change in the fair value of the portfolio.
12. Significant interests
The principal activity of the Company is to select and hold a portfolio of investments in unquoted securities. Although the Company, through the Manager, will, in some cases, be represented on the board of the portfolio company, it will not take a controlling interest or become involved in the management. The size and structure of the companies with unquoted securities may result in certain holdings in the portfolio representing a participating interest without there being any partnership, joint venture or management consortium agreement. The Company has interests of greater than 20 per cent. of the nominal value of any class of the allotted shares in the portfolio companies as at 31 March 2016 as described below:
| Company | Country of incorporation | Profit/(loss) before tax £'000 | Net assets/(liabilities) £'000 | % class and share type | % total voting rights |
| Kew Green VCT (Stansted) Limited | Great Britain | 243 | 4,502 | 45.2% Ordinary shares | 45.2% |
| G&K Smart Development VCT Limited | Great Britain | n/a* | 319 | 42.9% Ordinary shares | 42.9% |
| The Stanwell Hotel Limited | Great Britain | (753) | (6,112) | 39.2% Ordinary shares | 39.2% |
| Shinfield Lodge Care Limited | Great Britain | n/a** | n/a** | 33.4% Ordinary shares | 33.4% |
| The Crown Hotel Harrogate Limited | Great Britain | (798) | (7,439) | 24.1% Ordinary shares | 24.1% |
| Active Lives Care Limited | Great Britain | n/a* | 1,182 | 21.1% Ordinary shares | 21.1% |
*The company files abbreviated accounts which do not disclose this information.
** The company has only filed dormant company accounts until it starts trading.
13. Current assets
| 31 March 2016 | 31 March 2015 | |
| Trade and other debtors | £'000 | £'000 |
| Prospectus Top Up Offers proceeds* | 1,988 | - |
| Other debtors | 112 | 83 |
| UK corporation tax receivable | 24 | 70 |
| Prepayments and accrued income | 15 | 13 |
| 2,139 | 166 |
*This relates to shares subscribed and allotted on 31 March 2016 with monies received after the year end.
The Directors consider that the carrying amount of debtors is not materially different to their fair value.
14. Creditors: amounts falling due within one year
| 31 March 2016 | 31 March 2015 | |
| £'000 | £'000 | |
| Trade creditors | 18 | 12 |
| UK Corporation tax payable | 176 | 170 |
| Accruals and deferred income | 335 | 287 |
| 529 | 469 |
The Directors consider that the carrying amount of creditors is not materially different to their fair value.
15. Called up share capital
| 31 March 2016 | 31 March 2015 | |||||
| £'000 | £'000 | |||||
| Allotted, called up and fully paid | ||||||
| 86,081,939 Ordinary shares of 1p each (2015: 71,365,088) | 861 | 714 | ||||
| Voting rights | ||||||
| 79,127,499 Ordinary shares of 1p each (net of treasury shares) (2015: 65,523,648) | ||||||
The Company purchased 1,113,000 Ordinary shares (2015: 1,146,000) to be held in treasury at a nominal value of £11,000 and a cost of £733,000 (2015: £760,000) representing 1.3 per cent. of its issued share capital as at 31 March 2016. The shares purchased for treasury were funded from other distributable reserve.
The Company holds a total of 6,954,440 shares (2015: 5,841,440) in treasury at a nominal value of £69,500, representing 8.1 per cent. of the issued Ordinary share capital as at 31 March 2016.
Under the terms of the Dividend Reinvestment Scheme Circular dated 10 July 2008, the following Ordinary shares of nominal value 1 penny per share were allotted during the year:
| Date of allotment | Number of shares allotted | Aggregate nominal value of shares | Net consideration received | Issue price (pence per | Opening market price on allotment date |
| £'000 | £'000 | share) | (pence per share) | ||
| 31 July 2015 | 302,983 | 3 | 206 | 69.12 | 66.5 |
| 31 December 2015 | 305,966 | 3 | 213 | 70.15 | 66.5 |
| 608,949 | 6 | 419 |
During the year the following Ordinary shares were allotted under the Albion VCTs Prospectus Top Up Offers 2014/2015 and the Albion VCTs Prospectus Top Up Offers 2015/2016:
| Date of allotment | Number of shares allotted | Aggregate nominal value of shares | Net consideration received | Issue price (pence per | Opening market price on allotment date |
| £'000 | £'000 | share) | (pence per share) | ||
| 2 April 2015 | 5,158,657 | 52 | 3,568 | 71.3 | 65.5 |
| 30 June 2015 | 57,128 | 1 | 41 | 73.1 | 65.5 |
| 30 June 2015 | 11,337 | - | 8 | 73.5 | 65.5 |
| 30 June 2015 | 805,008 | 8 | 577 | 73.9 | 65.5 |
| 30 September 2015 | 115,352 | 1 | 81 | 72.0 | 66.0 |
| 29 January 2016 | 3,531,675 | 35 | 2,478 | 71.6 | 66.5 |
| 29 January 2016 | 1,614,056 | 16 | 1,133 | 72.0 | 66.5 |
| 31 March 2016 | 2,814,689 | 28 | 1,988 | 72.8 | 66.5 |
| 14,107,902 | 141 | 9,874 |
16. Basic and diluted net asset value per share
| 31 March 2016 | 31 March 2015 | |
| Basic and diluted net asset value per share (pence) | 72.0 | 71.6 |
The basic and diluted net asset value per share at the year end are calculated in accordance with the Articles of Association and are based upon total shares in issue (less treasury shares) of 79,127,499 Ordinary shares (2015: 65,523,648).
There are no convertible instruments, derivatives or contingent share agreements in issue.
17. First time adoption of FRS 102
In the prior year Financial Statements unquoted loan stock (excluding convertible bonds and debt issued at a discount) were classified as loans and receivables as permitted by FRS 26 and measured at amortised cost using the Effective Interest Rate method less impairment. This is the first year of application of FRS 102, if FRS 102 had been applied in the prior year and unquoted loan stock had been valued at "fair value" this would have seen an increase in value of loan stock by £108,000 which would have been a 0.39% difference as a percentage of total loan stock valuation. The first time adoption of FRS 102 had no material impact, therefore no restatement of comparatives is necessary.
18. Capital and financial instruments risk management
The Company's capital comprises Ordinary shares as described in note 15. The Company is permitted to buy-back its own shares for cancellation or treasury purposes, and this is described in more detail in the Chairman's statement.
The Company's financial instruments comprise equity and loan stock investments in unquoted companies, cash balances and short term debtors and creditors which arise from its operations. The main purpose of these financial instruments is to generate cash flow and revenue and capital appreciation for the Company's operations. The Company has no gearing or other financial liabilities apart from short term creditors. The Company does not use any derivatives for the management of its balance sheet.
The principal risks arising from the Company's operations are:
- Investment (or market) risk (which comprises investment price and cash flow interest rate risk);
- credit risk; and
- liquidity risk.
The Board regularly reviews and agrees policies for managing each of these risks. There have been no changes in the nature of the risks that the Company has faced during the past year and, apart from where noted below, there have been no changes in the objectives, policies or processes for managing risks during the past year. The key risks are summarised below.
The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern, so that it can continue to provide returns for shareholders and to provide an adequate return to shareholders by allocating its capital to assets commensurate with the level of risk.
By its nature, the Company has an amount of capital, at least 70 per cent. (as measured under the tax legislation) of which is and must be, and remain, invested in the relatively high risk asset class of small UK companies within three years of that capital being subscribed. The Company accordingly has limited scope to manage its capital structure in the light of changes in economic conditions and the risk characteristics of the underlying assets. Subject to this overall constraint upon changing the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets if so required to maintain a level of liquidity to remain a going concern.
Although, as the Investment Policy implies, the Board would consider levels of gearing, there are no current plans to do so. It regards the net assets of the Company as the Company's capital, as the levels of liabilities are small and the management of them is not directly related to managing the return to shareholders. There has been no change in this approach from the previous year.
Investment risk
As a venture capital trust, it is the Company's specific nature to evaluate and control the investment risk of its portfolio in unquoted investments, details of which are shown on page 17 of the full Annual Report and Financial Statements. Investment risk is the exposure of the Company to the revaluation and devaluation of investments. The main driver of investment risk is the operational and financial performance of the portfolio company and the dynamics of market quoted comparators. The Manager receives management accounts from portfolio companies, and members of the investment management team often sit on the boards of portfolio companies; this enables the close identification, monitoring and management of investment risk.
The Manager and the Board formally review investment risk (which includes market price risk), both at the time of initial investment and at quarterly Board meetings.
The Board monitors the prices at which sales of investments are made to ensure that profits to the Company are maximised, and that valuations of investments retained within the portfolio appear sufficiently prudent and realistic compared to prices being achieved in the market for sales of unquoted investments.
The maximum investment risk as at the balance sheet date is the value of the fixed investment portfolio which is £45,015,000 (2015: £38,229,000). Fixed asset investments form 79 per cent. of the net asset value as at 31 March 2016 (2015: 81 per cent.).
More details regarding the classification of fixed asset investments are shown in note 11.
Investment price risk
Investment price risk is the risk that the fair value of future investment cash flows will fluctuate due to factors specific to an investment instrument or to a market in similar instruments. To mitigate the investment price risk for the Company as a whole, the strategy of the Company is to invest in a broad spread of industries with approximately two-thirds of the unquoted investments comprising debt securities, which, owing to the structure of their yield and the fact that they are usually secured, have a lower level of price volatility than equity. Details of the industries in which investments have been made are contained in the Portfolio of investments section on page 17 of the full Annual Report and Financial Statements and in the Strategic report.
Valuations are based on the most appropriate valuation methodology for an investment within its market, with regard to the financial health of the investment and the IPEVCV Guidelines.
As required under FRS 102 section 34.29, the Board is required to illustrate by way of a sensitivity analysis the degree of exposure to market risk. The Board considers that the value of the fixed asset investment portfolio is sensitive to a 10 per cent. change based on the current economic climate. The impact of a 10 per cent. change has been selected as this is considered reasonable given the current level of volatility observed both on a historical basis and future expectations.
The sensitivity of a 10 per cent. increase or decrease in the valuation of the fixed and current asset investments (keeping all other variables constant) would increase or decrease the net asset value and return for the year by £4,502,000 (2015: £3,830,000).
Interest rate risk
It is the Company's policy to accept a degree of interest rate risk on its financial assets through the effect of interest rate changes. On the basis of the Company's analysis, it is estimated that a rise of one percentage point in all interest rates would have increased total return before tax for the year by approximately £122,000 (2015: £62,000). Furthermore, it is considered that a fall of interest rates below current levels during the year would have been very unlikely.
The weighted average effective interest rate applied to the Company's fixed rate assets during the year was approximately 6.70 per cent. (2015: 6.30 per cent.). The weighted average period to maturity for the fixed rate assets is approximately 4.7 years (2015: 4.8 years).
The Company's financial assets and liabilities, all denominated in pounds sterling, consist of the following:
| 31 March 2016 | 31 March 2015 | |||||||
Fixed rate £'000 | Floating rate £'000 | Non- interest bearing £'000 | Total £'000 | Fixed rate £'000 | Floating rate £'000 | Non-interest bearing £'000 | Total £'000 | |
| Unquoted equity | - | - | 15,163 | 15,163 | - | - | 10,442 | 10,442 |
| Unquoted loan stock* | 29,116 | 279 | 457 | 29,852 | 27,201 | 279 | 307 | 27,787 |
| Debtors ** | - | - | 2,110 | 2,110 | - | - | 91 | 91 |
| Current liabilities** | - | - | (353) | (353) | - | - | (299) | (299) |
| Cash | - | 10,330 | - | 10,330 | - | 9,002 | - | 9,002 |
| 29,116 | 10,609 | 17,377 | 57,102 | 27,201 | 9,281 | 10,541 | 47,023 | |
*Including convertible loan stock and debt issued at a discount
** The debtors and current liabilities do not reconcile to the balance sheet as prepayments and tax receivable/(payable) are not included in the above table.
Credit risk
Credit risk is the risk that the counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. The Company is exposed to credit risk through its debtors, investment in unquoted loan stock, and through the holding of cash on deposit with banks.
The Manager evaluates credit risk on loan stock prior to investment, and as part of its ongoing monitoring of investments. In doing this, it takes into account the extent and quality of any security held. Typically loan stock instruments have a first fixed charge or a fixed and floating charge over the assets of the portfolio company in order to mitigate the gross credit risk. The Manager receives management accounts from portfolio companies, and members of the investment management team often sit on the boards of portfolio companies; this enables the close identification, monitoring and management of investment specific credit risk.
The Manager and the Board formally review credit risk (including debtors) and other risks, both at the time of initial investment and at quarterly Board meetings.
The Company's total gross credit risk as at 31 March 2016 was limited to £29,852,000 (2015: £27,787,000) of unquoted loan stock instruments (all of which is secured on the assets of the portfolio company), £10,330,000 cash deposits with banks (2015: £9,002,000) and £2,100,000 of other debtors (2015: £83,000).
The credit profile of the unquoted loan stock is described under liquidity risk below.
The cost, impairment and carrying value of impaired loan stocks held at fair value at 31 March 2016 and 31 March 2015 are as follows:
| 31 March 2016 | 31 March 2015 | |||||
| Cost £'000 | Impairment £'000 | Carrying value £'000 | Cost £'000 | Impairment £'000 | Carrying value £'000 | |
| Impaired loan stock | 11,065 | (3,041) | 8,024 | 13,603 | (3,494) | 10,109 |
Impaired loan stock instruments have a first fixed charge or a fixed and floating charge over the assets of the portfolio company and the Board consider the security value to be the carrying value.
As at the balance sheet date, the cash held by the Company is held with Lloyds Bank plc, Scottish Widows Bank plc (part of Lloyds Banking Group), Barclays Bank plc and National Westminster Bank plc. Credit risk on cash transactions is mitigated by transacting with counterparties that are regulated entities subject to prudential supervision, with high credit ratings assigned by international credit-rating agencies.
The Company has an informal policy of limiting counterparty banking and floating rate note exposure to a maximum of 20 per cent. of net asset value for any one counterparty.
Liquidity risk
Liquid assets are held as cash on current or deposit accounts. Under the terms of its Articles, the Company has the ability to borrow up to 10 per cent. of its adjusted capital and reserves of the latest published audited balance sheet, which amounts to £5,497,000 as at 31 March 2016 (2015: £4,516,000).
The Company has no committed borrowing facilities as at 31 March 2016 (2015: £nil) and had cash balances of £10,330,000 (2015: £9,002,000). The main cash outflows are for new investments, buy-back of shares and dividend payments, which are within the control of the Company. The Manager formally reviews the cash requirements of the Company on a monthly basis, and the Board on a quarterly basis as part of its review of management accounts and forecasts. All the Company's financial liabilities are short term in nature and total £529,000 for the year to 31 March 2016 (2015: £469,000).
The carrying value of loan stock investments at 31 March 2016 as analysed by expected maturity dates is as follows:
| Redemption date | Fully performing £'000 | Impaired £'000 | Past due £'000 | Total £'000 | |
Less than one year | 4,875 | 7,732 | 383 | 12,990 | |
| 1-2 years | 101 | - | - | 101 | |
| 2-3 years | 407 | - | - | 407 | |
| 3-5 years | 7,693 | 292 | 105 | 8,090 | |
| Greater than 5 years | 5,437 | - | 2,827 | 8,264 | |
| Total | 18,513 | 8,024 | 3,315 | 29,852 |
Loan stock categorised as past due includes:
- Loan stock with a carrying value of £2,730,000 yielding an average of 12.5 per cent. which has loan stock interest past due less than 12 months.
- Loan stock with a carrying value of £585,000 yielding an average of 10 per cent. which has loan stock interest past due between 1 and 2 years.
The carrying value of loan stock investments at 31 March 2015 as analysed by expected maturity dates is as follows:
| Redemption date | Fully performing £'000 | Impaired £'000 | Past due £'000 | Total £'000 | |
Less than one year | 1,513 | 1,421 | 211 | 3,145 | |
| 1-2 years | 285 | 8,688 | 3,737 | 12,710 | |
| 2-3 years | 105 | - | - | 105 | |
| 3-5 years | 4,523 | - | - | 4,523 | |
| Greater than 5 years | 3,523 | - | 3,781 | 7,304 | |
| Total | 9,949 | 10,109 | 7,729 | 27,787 |
In view of the information shown, the Board considers that the Company is subject to low liquidity risk.
Fair values of financial assets and financial liabilities
All the Company's financial assets and liabilities as at 31 March 2016 are stated at fair value as determined by the Directors, with the exception of debtors and creditors and cash which are carried at amortised cost, in accordance with FRS 102. There are no financial liabilities other than creditors. The Company's financial liabilities are all non-interest bearing. It is the Directors' opinion that the book value of the financial liabilities is not materially different to the fair value and all are payable within one year.
19. Commitments and contingencies
The company had the following financial commitment in respect of the following investments:
- Ryefield Court Care Limited, £1,063,000
- Active Lives Care Limited, £680,000
- Shinfield Lodge Care Limited, £600,000
There are no contingent liabilities or guarantees given by the Company as at 31 March 2016 (31 March 2015: nil).
20. Post balance sheet events
Since 31 March 2016 the Company has had the following post balance sheet events:
Investments in the following companies:
- Earnside Energy Limited, £1,022,000
- Shinfield Lodge Care Limited, £885,000
- Active Lives Care Limited, £680,000
- Ryefield Court Care Limited, £635,000
- The Weybridge Club Limited, £3,000
Shares issued under the Albion VCTs Prospectus Top Up Offers 2015/2016:
| Date of allotment | Number of shares allotted | Aggregate nominal value of shares | Net consideration received | Issue price (pence per | Opening market price on allotment date |
| £'000 | £'000 | share) | (pence per share) | ||
| 6 April 2016 | 245,265 | 2 | 173 | 72.0 | 66.5 |
| 6 April 2016 | 9,897 | - | 7 | 72.4 | 66.5 |
| 6 April 2016 | 107,001 | 1 | 76 | 72.8 | 66.5 |
| 362,163 | 256 |
21. Related party transactions
Other than transactions with the Manager as disclosed in note 5, there are no related party transactions or balances requiring disclosure.
22. Other information
The information set out in this announcement does not constitute the Company's statutory accounts within the terms of section 434 of the Companies Act 2006 for the years ended 31 March 2016 and 31 March 2015, and is derived from the statutory accounts for those financial years, which have been, or in the case of the accounts for the year ended 31 March 2016, which will be, delivered to the Registrar of Companies. The Auditor reported on those accounts; the reports were unqualified and did not contain a statement under s498 (2) or (3) of the Companies Act 2006.
The Company's Annual General Meeting will be held at The City of London Club, 19 Old Broad Street, London, EC2N 1DS on 8 August 2016 at 11:00am.
23. Publication
The full audited Annual Report and Financial Statements are 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/funds/AAVC, where the Report can be accessed as a PDF document via a link under the 'Financial Reports and Circulars' section.
Dividend history for Albion Venture Capital Trust PLC 'C Shares' (unaudited)
| Total shareholder return to 31 March 2016 | C shares (pence per share) | |
| Total dividends paid during the year ended : | 31 March 1998 | 2.00 |
| 31 March 1999 | 8.75 | |
| 31 March 2000 | 2.70 | |
| 31 March 2001 | 4.80 | |
| 31 March 2002 | 7.60 | |
| 31 March 2003 | 7.70 | |
| 31 March 2004 | 8.20 | |
| 31 March 2005 | 9.75 | |
| 31 March 2006 | 11.75 | |
| 31 March 2007 | 10.00 | |
| 31 March 2008 | 10.00 | |
| 31 March 2009 | 10.00 | |
| 31 March 2010 | 5.00 | |
| 31 March 2011 | 5.00 | |
| 31 March 2012 | 5.00 | |
| 31 March 2013 | 5.00 | |
| 31 March 2014 | 5.00 | |
| 31 March 2015 | 5.00 | |
| 31 March 2016 | 5.00 | |
| Total dividends paid to 31 March 2016 | 128.25 | |
| Net asset value as at 31 March 2016 | 72.00 | |
| Total shareholder return to 31 March 2016 | 200.25 | |
Notes
- Dividends paid before 5 April 1999 were paid to qualifying shareholders inclusive of the associated tax credit. The dividends for the year to 31 March 1999 were maximised in order to take advantage of this tax credit.
- All dividends paid by the Company are free of income tax. It is an H.M. Revenue & Customs requirement that dividend vouchers indicate the tax element should dividends have been subject to income tax. Investors should ignore this figure on their dividend voucher and need not disclose any income they receive from a VCT on their tax return.
- The Ordinary Shares and the C Shares merged on an equal basis.
Dividend history for Albion Prime VCT PLC now merged with Albion Venture Capital Trust PLC (unaudited)
| Total proforma shareholder return to 31 March 2016 | Proforma Albion Prime VCT PLC (pence per share) | ||
| Total dividends paid during the year ended: | 31 March 1998 | 1.10 | |
| 31 March 1999 | 6.40 | ||
| 31 March 2000 | 1.50 | ||
| 31 March 2001 | 4.25 | ||
| 31 March 2002 | 2.75 | ||
| 31 March 2003 | 2.00 | ||
| 31 March 2004 | 1.25 | ||
| 31 March 2005 | 2.20 | ||
| 31 March 2006 | 4.50 | ||
| 31 March 2007 | 4.00 | ||
| 31 March 2008 | 5.00 | ||
| 31 March 2009 | 4.50 | ||
| 31 March 2010 | 2.00 | ||
| 31 March 2011 | 3.00 | ||
| 31 March 2012 | 3.00 | ||
| 31 March 2013 | 3.70 | ||
| 31 March 2014 | 4.40 | ||
| 31 March 2015 | 4.40 | ||
| 31 March 2016 | 4.40 | ||
| Total dividends paid to 31 March 2016 | 64.35 | ||
| Proforma net asset value as at 31 March 2016 | 63.37 | ||
| Total proforma shareholder return to 31 March 2016 | 127.72 | ||
Notes
- The proforma shareholder returns presented above are based on the dividends paid to shareholders before the merger and the pro-rata net asset value per share and pro-rata dividends per share paid to 31 March 2016. This pro-forma is based upon 0.8801 Albion Venture Capital Trust PLC shares for every Albion Prime VCT PLC share which merged with Albion Venture Capital Trust PLC on 25 September 2012.
- Dividends paid before 5 April 1999 were paid to qualifying shareholders inclusive of the associated tax credit. The dividends for the year to 31 March 1999 were maximised in order to take advantage of this tax credit.
- The above table excludes the tax benefits investors received upon subscription for shares in the Company.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Albion Venture Capital Trust PLC via Globenewswire
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