Half-yearly report

Albion Venture Capital Trust PLC As required by the UK Listing Authority's Disclosure and Transparency Rule 4.2, Albion Venture Capital Trust PLC today makes public its information relating to the Half-yearly Financial Report (which is unaudited) for the six months to 30 September 2011. This announcement was approved by the Board of Directors on 17 November 2011. The full Half-yearly Financial Report (which is unaudited) for the period to 30 September 2011, will shortly be sent to shareholders. Copies of the full Half- yearly Financial Report will be shown via the Albion Ventures LLP website www.albion-ventures.co.uk under the "Our Funds" section by clicking Albion Venture Capital Trust PLC. Investment objectives Albion Venture Capital Trust PLC (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 Company raised a further £1.67 million in early 2011 under the Albion VCTs Linked Top Up Offer.  The C Shares merged with the Ordinary Shares in 2001. 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. Its investment strategy is to minimise the risk to investors whilst maintaining an attractive yield. 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; and * Albion Venture Capital Trust PLC invests alongside selected partners with proven experience in the sectors concerned; and * 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 investee company. Funds managed or advised by Albion Ventures LLP typically own 50 per cent. of the equity of the investee company; and * other than the loan stock issued to funds managed or advised by Albion Ventures LLP, investee companies do not normally have external borrowings. Financial calendar Record date for second dividend 2 December 2011 Payment date for second dividend 30 December  2011 Financial year end 31 March 2012 Financial highlights (unaudited) +------------------------------------------------------------------------------+ | Unaudited six months Unaudited six months | | ended 30 September ended 30 September  Audited year ended| | 2011 (pence per 2010 (pence per 31 March 2011| |   share) share) (pence per share)| | | |Net asset value 79.5 80.8 80.5| | | |Revenue return 1.1 1.0 2.5| | | |Capital return 0.2 0.6 1.2| +------------------------------------------------------------------------------+ +----------------------------------------------+---------------+---------------+ |Total shareholder net asset value return to |Ordinary shares|       C shares| |30 September  2011 | | | +----------------------------------------------+---------------+---------------+ |Total dividends paid during the year ended : | | | | 31 March 1997 | 2.00| -| +----------------------------------------------+---------------+---------------+ |                                              | | | |                                31 March 1998 | 5.20| 2.00| +----------------------------------------------+---------------+---------------+ |                                              | | | |                                31 March 1999 | 11.05| 8.75| +----------------------------------------------+---------------+---------------+ |                                              | | | |                                31 March 2000 | 3.00| 2.70| +----------------------------------------------+---------------+---------------+ |                                              | | | |                                31 March 2001 | 8.55| 4.80| +----------------------------------------------+---------------+---------------+ |                                              | | | |                                31 March 2002 | 7.60| 7.60| +----------------------------------------------+---------------+---------------+ |                                              | | | |                                31 March 2003 | 7.70| 7.70| +----------------------------------------------+---------------+---------------+ |                                              | | | |                                31 March 2004 | 8.20| 8.20| +----------------------------------------------+---------------+---------------+ |                                              | | | |                                31 March 2005 | 9.75| 9.75| +----------------------------------------------+---------------+---------------+ |                                              | | | |                                31 March 2006 | 11.75| 11.75| +----------------------------------------------+---------------+---------------+ |                                              | | | |                                31 March 2007 | 10.00| 10.00| +----------------------------------------------+---------------+---------------+ |                                              | | | |                                31 March 2008 | 10.00| 10.00| +----------------------------------------------+---------------+---------------+ |                                              | | | |                                31 March 2009 | 10.00| 10.00| +----------------------------------------------+---------------+---------------+ |                                              | | | |                                31 March 2010 | 5.00| 5.00| +----------------------------------------------+---------------+---------------+ |                                              | | | |                                31 March 2011 | 5.00| 5.00| +----------------------------------------------+---------------+---------------+ |Total dividends paid in the six months to 30 | | | |September 2011 | 2.50| 2.50| +----------------------------------------------+---------------+---------------+ |     |     |     | +----------------------------------------------+---------------+---------------+ |Total dividends paid to 30 September  2011 | 117.30| 105.75| +----------------------------------------------+---------------+---------------+ |     |    |    | +----------------------------------------------+---------------+---------------+ |Net asset value as at 30 September 2011 | 79.50| 79.50| +----------------------------------------------+---------------+---------------+ |     |     |    | +----------------------------------------------+---------------+---------------+ |Total shareholder net asset value return to | | | |30 September 2011 | 196.80| 185.25| +----------------------------------------------+---------------+---------------+ |     |    |    | +----------------------------------------------+---------------+---------------+ In addition to the above dividends paid, the Directors have declared a second dividend of 2.50 pence per share, payable on 30 December 2011 to shareholders on the register as at 2 December 2011. Interim management report Introduction The results for Albion Venture Capital Trust PLC for the six months to 30 September 2011 show a positive return of 1.3 pence per share (revenue and capital), which takes the net asset value to 79.5 pence per share (31 March 2011: 80.5 pence per share) after the payment of the first dividend for the year of 2.5 pence per share.  This comprised a 1.1 pence revenue return for the period and a 0.2 pence capital return, although it should be noted that independent third party valuations of the underlying investments are not generally carried out until the spring. Investment performance and progress The company's hotel portfolio has experienced mixed fortunes over the period. The most significant event was the successful sale of The Place Sandwich VCT, which owned the 37-bedroom Bell Hotel in Sandwich. This realised proceeds of £1,785,000 for the Company compared to the holding value of £1,501,000 and cost of £1,640,000. In addition to the sales proceeds, the Company received £758,000 of interest over the course of the investment, producing a total return of approximately 1.6 times cost. As a result of the sale, the hotel sector as a proportion of the Company's portfolio has reduced from 48% at 31 March 2011 to 42% at 30 September 2011, in line with our policy of reducing our weighting in the sector. The Holiday Inn Express at Stansted Airport recorded its second best year to date in its financial year to August and trading at the Bear Hotel in Hungerford has been ahead of the previous year. Recent trading at the Crown Hotel in Harrogate, on the other hand, has been a little quieter than last year and while revenues at The Stanwell hotel continue to grow, it has been at a significantly slower pace than hoped for. Accordingly a change of management at The Stanwell hotel has taken place and work is being undertaken to address some building issues that have arisen and to improve the bedroom product. In addition to the sale of The Place Sandwich VCT, a further £530,000 loan stock has been repaid by other investee companies during the period. Meanwhile £1,050,000 has been invested in 4 existing investee companies and 2 new companies. The new companies were both in the renewable energy sector, one installing solar panels on commercial premises and the other constructing wind turbines, with the majority of the overall investment being funds already scheduled for Oakland Care Centre, which has been developing a  care home for patients suffering from dementia. In the existing portfolio, notable events have been the successful opening of Radnor House School in Twickenham in September with almost double the budgeted number of pupils, the opening of Orchard Portman's psychiatric unit in Somerset in May 2011 and the opening of Oakland Care Centre's Bayfield Court care home in Chingford in October 2011. The cinemas are continuing to show strong performance and the health and fitness clubs have all increased profitability in their financial years to September 2011.  In the pub sector, the pubs owned by The Charnwood Pub Company were slightly behind budget over the six months while the Bravo Inns pubs in the north west have been performing ahead of expectations. Split of investment portfolio by valuation Set out at the bottom of this announcement is the sector diversification of the portfolio of our investments at 30 September 2011. Source: Albion Ventures LLP Risks and uncertainties We remain cautious over the short and medium term prospects of the UK economy in view of the currency and debt constraints which are increasingly becoming apparent within the eurozone and elsewhere. Nevertheless, the portfolio is being gradually repositioned towards sectors that we believe are more resilient and we believe that the majority of the Company's investments are well positioned to withstand an economic downturn in light of our general policy that investee companies have no external bank borrowings. Other risks and uncertainties remain unchanged and are as detailed in note 14. Related party transactions Details of material related party transactions for the reporting period can be found in note 12 to this Half-yearly Financial Report. Share buy-backs It remains the Board's primary objective to maintain sufficient resources for investment in existing and new investee companies and for the continued payment of dividends to shareholders.  Thereafter, it is the Board's policy to buy back shares in the market, subject to the overall constraint that such purchases are in the Company's interest.  The Company will limit the sum available for share buy-backs for the six months to 31 March 2012 to £350,000, in line with the total value bought in for the previous six months. Subject to the constraints referred to above, and subject to first purchasing shares held by the marketmakers, the Board will target such buy-backs to be in the region of a 10 to 15 per cent. discount to net asset value, so far as market conditions and liquidity permit. Results and dividends As at 30 September 2011 the net asset value of the Company was £28.5 million or 79.5 pence per share compared to £28.8 million or 80.5 pence per share at 31 March 2011. The revenue return before taxation was £529,000 compared to £484,000 for the six months to 30 September 2010. The Company will pay a second dividend of 2.50 pence per share on 30 December 2011 to shareholders on the register as at 2 December 2011, making 5.0 pence per share in total for the full year, in line with your Company's current dividend target. Albion VCTs Linked Top Up Offer 2011/2012 Your Board, in conjunction with the boards of six of the other VCTs managed by Albion Ventures LLP, has recently launched a top up offer of new Ordinary shares. Albion Venture Capital Trust PLC will be aiming to raise approximately £2.25m, a 15 per cent. share of the £15 million in aggregate that the Albion VCTs plan to raise. The proceeds will be used to provide further resources at a time when a number of attractive investment opportunities are being seen. An Investor Guide and Offer Document have been sent to shareholders. Outlook and prospects As already mentioned, the outlook for the UK economy remains uncertain. Nevertheless we believe that the majority of our companies are well positioned to withstand future economic upheaval. Our strategy for new investments continues to be focused on sectors that are likely to be resilient, particularly healthcare and environmental projects. John Kerr Director 17 November 2011 Responsibility statement The Directors, D Watkins, J M B L Kerr, J Warren and J Rounce are responsible for preparing the Half-yearly Financial Report. The Directors have chosen to prepare this Half-yearly Financial Report for the Company in accordance with United Kingdom Generally Accepted Accounting Practice ("UK GAAP"). In preparing these summarised financial statements for the period to 30 September 2011, we the Directors of the Company, confirm that to the best of our knowledge: (a) the summarised set of financial statements has been prepared in accordance with the pronouncement on interim reporting issued by the Accounting Standards Board; (b) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); (c) the summarised set of financial statements give a true and fair view in accordance with UK GAAP of the assets, liabilities, financial position and profit and loss of the Company for the six months ended 30 September 2011 and comply with UK GAAP and Companies Act 1985 and 2006;  and (d) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein). The accounting policies applied to the Half-yearly Financial Report have been consistently applied in current and prior periods and are those applied in the Annual Report and Financial Statements for the year ended 31 March 2011. This Half-yearly Financial Report has not been audited or reviewed by the Auditor. By order of the Board John Kerr Director 17 November 2011 Portfolio of investments The following is a summary of investments as at 30 September 2011: +------------------+-----------+-------------+---------------------------------+ |  |  |  | As at 30 September 2011 | +------------------+-----------+-------------+------+--------------+-----------+ | | | % voting | | | | | | | rights | | Cumulative | | | | | of AVL* | | movement in | Total | | Qualifying | %  Voting | managed | Cost | value | value** | | investments | rights | companies |£'000 | £'000 | £'000 | +------------------+-----------+-------------+------+--------------+-----------+ |Hotels |  |  |  |  |  | +------------------+-----------+-------------+------+--------------+-----------+ |Kew Green VCT | | | | | | |(Stansted) Limited| 28.2| 50.0| 4,047| 2,251| 6,298| +------------------+-----------+-------------+------+--------------+-----------+ |The Stanwell Hotel| | | | | | |Limited | 24.6| 50.0| 3,421| (1,043)| 2,378| +------------------+-----------+-------------+------+--------------+-----------+ |The Crown Hotel | | | | | | |Harrogate Limited | 15.6| 50.0| 3,100| (837)| 2,263| +------------------+-----------+-------------+------+--------------+-----------+ |The Bear | | | | | | |Hungerford Limited| 26.2| 50.0| 2,088| (747)| 1,341| +------------------+-----------+-------------+------+--------------+-----------+ |Total investment | | | | | | |in the hotel | | | | | | |sector |  |  |12,656| (376)| 12,280| +------------------+-----------+-------------+------+--------------+-----------+ |     |    |     |    |   |   | +------------------+-----------+-------------+------+--------------+-----------+ |Cinemas and other | | | | | | |leisure |  |  |  |  |  | +------------------+-----------+-------------+------+--------------+-----------+ |City Screen | | | | | | |(Cambridge) | | | | | | |Limited | 50.0| 50.0| 535| 1,277| 1,812| +------------------+-----------+-------------+------+--------------+-----------+ |CS (Greenwich) | | | | | | |Limited | 18.3| 50.0| 954| 158| 1,112| +------------------+-----------+-------------+------+--------------+-----------+ |CS (Brixton) | | | | | | |Limited | 6.4| 50.0| 274| 125| 399| +------------------+-----------+-------------+------+--------------+-----------+ |City Screen | | | | | | |(Liverpool) | | | | | | |Limited | 18.2| 50.0| 222| (61)| 161| +------------------+-----------+-------------+------+--------------+-----------+ |Premier Leisure | | | | | | |(Suffolk) Limited | 5.2| 50.0| 380| (290)| 90| +------------------+-----------+-------------+------+--------------+-----------+ |CS (Exeter) | | | | | | |Limited | 6.6| 50.0| 108| (30)| 78| +------------------+-----------+-------------+------+--------------+-----------+ |CS (Norwich) | | | | | | |Limited | 3.1| 50.0| 50| 2| 52| +------------------+-----------+-------------+------+--------------+-----------+ |Total investment | | | | | | |in the cinema and | | | | | | |other leisure | | | | | | |sector |  |  | 2,523| 1,181| 3,704| +------------------+-----------+-------------+------+--------------+-----------+ |    |    |    |    |    |    | +------------------+-----------+-------------+------+--------------+-----------+ |Health and fitness|  |  |  |  |  | |clubs | | | | | | +------------------+-----------+-------------+------+--------------+-----------+ |The Weybridge Club| 8.2| 50.0| 1,330| (242)| 1,088| |Limited | | | | | | +------------------+-----------+-------------+------+--------------+-----------+ |Kensington Health | 8.1| 50.0| 1,124| (343)| 781| |Clubs  Limited | | | | | | +------------------+-----------+-------------+------+--------------+-----------+ |Tower Bridge | | | | | | |Health Clubs | | | | | | |Limited | 5.5| 50.0| 325| 54| 379| +------------------+-----------+-------------+------+--------------+-----------+ |Total investment | | | | | | |in the health and | | | | | | |fitness club | | | | | | |sector |  |  | 2,779| (531)| 2,248| +------------------+-----------+-------------+------+--------------+-----------+ |    |    |    |    |    |    | +------------------+-----------+-------------+------+--------------+-----------+ |Healthcare sector |  |  |  |  |  | +------------------+-----------+-------------+------+--------------+-----------+ |Oakland Care | | | | | | |Centre Limited | 19.1| 45.3| 1,519| 45| 1,564| +------------------+-----------+-------------+------+--------------+-----------+ |Taunton Hospital | | | | | | |Limited | 6.0| 50.0| 380| 1| 381| +------------------+-----------+-------------+------+--------------+-----------+ |Nelson House | | | | | | |Hospital Limited | 5.0| 50.0| 155| -| 155| +------------------+-----------+-------------+------+--------------+-----------+ |Orchard Portman | | | | | | |Hospital Limited | 2.0| 50.0| 132| -| 132| +------------------+-----------+-------------+------+--------------+-----------+ |Total investment | | | | | | |in the healthcare | | | | | | |sector |  |  | 2,186| 46| 2,232| +------------------+-----------+-------------+------+--------------+-----------+ |    |    |    |    |    |    | +------------------+-----------+-------------+------+--------------+-----------+ |Pubs |  |  |  |  |  | +------------------+-----------+-------------+------+--------------+-----------+ |The Charnwood Pub | | | | | | |Company Limited | 8.8| 50.0| 3,086| (1,795)| 1,291| +------------------+-----------+-------------+------+--------------+-----------+ |Bravo Inns II | | | | | | |Limited | 4.4| 50.0| 575| (26)| 549| +------------------+-----------+-------------+------+--------------+-----------+ |Bravo Inns Limited| 5.1| 50.0| 450| (173)| 277| +------------------+-----------+-------------+------+--------------+-----------+ |GB Pub Company VCT| | | | | | |Limited | 5.9| 50.0| 239| (177)| 62| +------------------+-----------+-------------+------+--------------+-----------+ |The Dunedin Pub | | | | | | |Company VCT | | | | | | |Limited | 4.3| 50.0| 47| (2)| 45| +------------------+-----------+-------------+------+--------------+-----------+ |Total investment | | | | | | |in the pub sector |  |  | 4,397| (2,173)| 2,224| +------------------+-----------+-------------+------+--------------+-----------+ |    |    |    |    |    |    | +------------------+-----------+-------------+------+--------------+-----------+ |Residential | | | | | | |property | | | | | | |development |  |  |  |  |  | +------------------+-----------+-------------+------+--------------+-----------+ |G&K Smart | | | | | | |Developments VCT | | | | | | |Limited | 42.9| 50.0| 1,620| (1,144)| 476| +------------------+-----------+-------------+------+--------------+-----------+ |Prime VCT Limited | 50.0| 50.0| 990| (640)| 350| +------------------+-----------+-------------+------+--------------+-----------+ |Total investment | | | | | | |in the residential| | | | | | |property | | | | | | |development sector|  |  | 2,610| (1,784)| 826| +------------------+-----------+-------------+------+--------------+-----------+ |    |    |    |    |    |    | +------------------+-----------+-------------+------+--------------+-----------+ |Education sector |  |  |  |  |  | +------------------+-----------+-------------+------+--------------+-----------+ |Radnor House | | | | | | |School (Holdings) | | | | | | |Limited | 4.6| 50.0| 801| 24| 825| +------------------+-----------+-------------+------+--------------+-----------+ |Total investment | | | | | | |in the education | | | | | | |sector |  |  | 801| 24| 825| +------------------+-----------+-------------+------+--------------+-----------+ |    |    |    |    |    |    | +------------------+-----------+-------------+------+--------------+-----------+ |Environmental | | | | | | |sector |  |  |  |  |  | +------------------+-----------+-------------+------+--------------+-----------+ |TEG Biogas (Perth)| | | | | | |Limited | 3.6| 50.0| 207| 2| 209| +------------------+-----------+-------------+------+--------------+-----------+ |Regenerco | | | | | | |Renewable Energy | | | | | | |Limited | 2.5| 50.0| 138| -| 138| +------------------+-----------+-------------+------+--------------+-----------+ |Alto Prodotto Wind| | | | | | |Limited | 2.6| 50.0| 112| 1| 113| +------------------+-----------+-------------+------+--------------+-----------+ |The Street by | | | | | | |Street Solar | | | | | | |Programe Limited | 2.5| 50.0| 99| -| 99| +------------------+-----------+-------------+------+--------------+-----------+ |AVESI Limited | 2.5| 50.0| 20| -| 20| +------------------+-----------+-------------+------+--------------+-----------+ |Total investment | | | | | | |in the | | | | | | |environmental | | | | | | |sector |  |  | 576| 3| 579| +------------------+-----------+-------------+------+--------------+-----------+ |    |    |    |    |    |    | +------------------+-----------+-------------+------+--------------+-----------+ |Total qualifying | | | | | | |investments |  |  |28,528| (3,610)| 24,918| +------------------+-----------+-------------+------+--------------+-----------+ * AVL is Albion Ventures LLP ** These valuations are based on third party valuations performed for the Annual Report and Financial Statements for the year ended 31 March 2011.Third party valuations will be re-performed for the year ended 31 March 2012. Summary income statement +---------------+----+---------------------+---------------------+---------------------+ |  |  | Unaudited | Unaudited | Audited | | | | six months ended | six months ended | year ended | | | | 30 September 2011 | 30 September 2010 | 31 March 2011 | | | |   |   |   | +---------------+----+-------+-------+-----+-------+-------+-----+-------+-------+-----+ | | |Revenue|Capital|Total|Revenue|Capital|Total|Revenue|Capital|Total| |  |Note| £'000| £'000|£'000| £'000| £'000|£'000| £'000| £'000|£'000| +---------------+----+-------+-------+-----+-------+-------+-----+-------+-------+-----+ |Gain on | | | | | | | | | | | |investments | 3| -| 232| 232| -| 333| 333| -| 700| 700| | | | | | | | | | | | | |Investment | | | | | | | | | | | |income | 4| 711| -| 711| 687| -| 687| 1,300| -|1,300| | | | | | | | | | | | | |Investment | | | | | | | | | | | |management fees|  | (73)| (218)|(291)| (70)| (211)|(281)| (141)| (424)|(565)| | | | | | | | | | | | | |Other expenses |  | (109)| -|(109)| (133)| -|(133)| (248)| -|(248)| | +----+-------+-------+-----+-------+-------+-----+-------+-------+-----+ |Return on | | | | | | | | | | | |ordinary | | | | | | | | | | | |activities | | | | | | | | | | | |before tax |  | 529| 14| 543| 484| 122| 606| 911| 276|1,187| | | | | | | | | | | | | |Tax | | | | | | | | | | | |(charge)/credit| | | | | | | | | | | |on ordinary | | | | | | | | | | | |activities |  | (134)| 60| (74)| (131)| 63| (68)| (41)| 126| 85| | +----+-------+-------+-----+-------+-------+-----+-------+-------+-----+ |Return | | | | | | | | | | | | attributable | | | | | | | | | | | |to shareholders|  | 395| 74| 469| 353| 185| 538| 870| 402|1,272| +---------------+----+-------+-------+-----+-------+-------+-----+-------+-------+-----+ |Basic and | | | | | | | | | | | |diluted return | | | | | | | | | | | |per share | | | | | | | | | | | |(pence)* | 6| 1.1| 0.2| 1.3| 1.0| 0.6| 1.6| 2.5| 1.2| 3.7| +---------------+----+-------+-------+-----+-------+-------+-----+-------+-------+-----+ * excluding treasury shares Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 September 2010 and the audited statutory accounts for the year ended 31 March 2011. The accompanying notes form an integral part of this Half-yearly Financial Report. The total column of this Summary income statement represents the profit and loss account of the Company. The supplementary revenue and capital columns have been prepared in accordance with the Association of Investment Companies' Statement of Recommended Practice. All revenue and capital items in the above statement derive from continuing operations. There are no recognised gains or losses other than the results for the periods disclosed above. Accordingly a Statement of total recognised gains and losses is not required. The difference between the reported return on ordinary activities before tax and the historical profit is due to the fair value movements on investments. As a result a note on historical cost profit and losses has not been prepared. Summary balance sheet +-----------------------+----+-----------------+-----------------+-------------+ |  | | Unaudited | Unaudited | Audited | | | |30 September 2011|30 September 2010|31 March 2011| | |Note| £'000 | £'000 | £'000 | +-----------------------+----+-----------------+-----------------+-------------+ |Fixed asset investments|  |  |  |  | | | | | | | |Qualifying |  | 24,918| 25,677| 25,535| | | | | | | |Non-qualifying |  | -| 439| 439| | | +-----------------+-----------------+-------------+ |Total fixed asset | | | | | |investments |  | 24,918| 26,116| 25,974| | | | | | | |  |  |  |  |  | | | | | | | |Current assets |  |  |  |  | | | | | | | |Trade and other debtors|  | 19| 12| 130| | | | | | | |Cash at bank and in | | | | | |hand | 9| 3,923| 2,261| 2,971| | | +-----------------+-----------------+-------------+ |  |  | 3,942| 2,273| 3,101| | | | | | | |  |  |  |  |  | | | | | | | |Creditors: amounts | | | | | |falling due within one | | | | | |year |  | (400)| (475)| (314)| | | +-----------------+-----------------+-------------+ |Net current assets |  | 3,542| 1,798| 2,787| | | +-----------------+-----------------+-------------+ |Net assets |  | 28,460| 27,914| 28,761| | | +-----------------+-----------------+-------------+ |  |  |  |  |  | | | | | | | |Capital and reserves |  |  |  |  | | | | | | | |Called up share capital| 7| 19,197| 18,075| 18,886| | | | | | | |Share premium |  | 706| 77| 538| | | | | | | |Capital redemption | | | | | |reserve |  | 1,914| 1,914| 1,914| | | | | | | |Unrealised capital | | | | | |reserve |  | (3,791)| (4,268)| (3,871)| | | | | | | |Special reserve |  | -| 13,236| -| | | | | | | |Treasury shares reserve|  | (1,875)| (1,222)| (1,524)| | | | | | | |Realised capital | | | | | |reserve |  | 10,885| (441)| 10,891| | | | | | | |Revenue reserve |  | 1,424| 543| 1,927| | | +-----------------+-----------------+-------------+ |Total equity | | | | | |shareholders' funds |  | 28,460| 27,914| 28,761| | | +-----------------+-----------------+-------------+ |  |  |  |  |  | +-----------------------+----+-----------------+-----------------+-------------+ |Basic and diluted net | | | | | |asset value per share | | | | | |(pence)* |  | 79.5| 80.8| 80.5| +-----------------------+----+-----------------+-----------------+-------------+ *excluding  treasury shares Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 September 2010 and the audited statutory accounts for the year ended 31 March 2011. The accompanying notes form an integral part of this Half-yearly Financial Report. These Financial Statements were approved by the Board of Directors and authorised for issue on  17 November 2011, and were signed on its behalf by John Kerr Director Company number: 3142609 Summary reconciliation of movements in shareholders' funds +------------+-------+-------+----------+----------+--------+--------+--------+------+ | |Called-| | | | | | | | | | up| | Capital|Unrealised|Treasury|Realised| | | | | share| Share|redemption| capital| shares| capital| Revenue| | |  |capital|premium| reserve| reserve*|reserve*|reserve*|reserve*| Total| | | | | | | | | | | |  | £'000| £'000| £'000| £'000| £'000| £'000| £'000| £'000| +------------+-------+-------+----------+----------+--------+--------+--------+------+ |1 April | | | | | | | | | |2011 | | | | | | | | | |(audited) | 18,886| 538| 1,914| (3,871)| (1,524)| 10,891| 1,927|28,761| | | | | | | | | | | |Realised | | | | | | | | | |gains | -| -| -| -| -| 314| -| 314| | | | | | | | | | | |Unrealised | | | | | | | | | |gains | -| -| -| (82)| -| -| -| (82)| | | | | | | | | | | |Transfer of | | | | | | | | | | previously | | | | | | | | | |unrealised | | | | | | | | | |losses to | | | | | | | | | |realised | | | | | | | | | |losses | -| -| -| 162| -| (162)| -| -| | | | | | | | | | | |Capitalised | | | | | | | | | |investment | | | | | | | | | |management | | | | | | | | | |fees | -| -| -| -| -| (218)| -| (218)| | | | | | | | | | | |Tax relief | | | | | | | | | |on costs | | | | | | | | | |charged to | | | | | | | | | |capital | -| -| -| -| -| 60| -| 60| | | | | | | | | | | |Purchase of | | | | | | | | | |own treasury| | | | | | | | | |shares | -| -| -| -| (351)| -| -| (351)| | | | | | | | | | | |Issue of | | | | | | | | | |equity (net | | | | | | | | | |of costs) | 311| 168| -| -| -| -| -| 479| | | | | | | | | | | |Revenue | | | | | | | | | |return | | | | | | | | | |attributable| | | | | | | | | |to | | | | | | | | | |shareholders| -| -| -| -| -| -| 395| 395| | | | | | | | | | | |Dividends | | | | | | | | | |paid | -| -| -| -| -| -| (898)| (898)| +------------+-------+-------+----------+----------+--------+--------+--------+------+ |As at 30 | | | | | | | | | |September | | | | | | | | | |2011 | | | | | | | | | |(unaudited) | 19,197| 706| 1,914| (3,791)| (1,875)| 10,885| 1,424|28,460| +------------+-------+-------+----------+----------+--------+--------+--------+------+ +------------+-------+-------+----------+----------+--------+--------+--------+--------+------+ | |Called-| | | | | | | | | | | up| | Capital|Unrealised| |Treasury|Realised| | | | | share| Share|redemption| capital| Special| shares| capital| Revenue| | |  |capital|premium| reserve| reserve*|reserve*|reserve*|reserve*|reserve*| Total| | | | | | | | | | | | |  | £'000| £'000| £'000| £'000| £'000| £'000| £'000| £'000| £'000| +------------+-------+-------+----------+----------+--------+--------+--------+--------+------+ |1 April | | | | | | | | | | |2010 | | | | | | | | | | |(audited) | 18,050| 69| 1,914| (4,599)| 13,236| (1,032)| (295)| 1,057|28,400| | | | | | | | | | | | |Realised | | | | | | | | | | |gains | -| -| -| -| -| -| 2| -| 2| | | | | | | | | | | | |Unrealised | | | | | | | | | | |gains | -| -| -| 331| -| -| -| -| 331| | | | | | | | | | | | |Capitalised | | | | | | | | | | |investment | | | | | | | | | | |management | | | | | | | | | | |fees | -| -| -| -| -| -| (211)| -| (211)| | | | | | | | | | | | |Tax relief | | | | | | | | | | |on costs | | | | | | | | | | |charged to | | | | | | | | | | |capital | -| -| -| -| -| -| 63| -| 63| | | | | | | | | | | | |Purchase of | | | | | | | | | | |own treasury| | | | | | | | | | |shares | -| -| -| -| -| (190)| -| -| (190)| | | | | | | | | | | | |Issue of | | | | | | | | | | |equity (net | | | | | | | | | | |of costs) | 25| 8| -| -| -| -| -| -| 33| | | | | | | | | | | | |Revenue | | | | | | | | | | |return | | | | | | | | | | |attributable| | | | | | | | | | |to | | | | | | | | | | |shareholders| -| -| -| -| -| -| -| 353| 353| | | | | | | | | | | | |Dividends | | | | | | | | | | |paid | -| -| -| -| -| -| -| (867)| (867)| +------------+-------+-------+----------+----------+--------+--------+--------+--------+------+ |As at 30 | | | | | | | | | | |September | | | | | | | | | | |2010 | | | | | | | | | | |(unaudited) | 18,075| 77| 1,914| (4,268)| 13,236| (1,222)| (441)| 543|27,914| +------------+-------+-------+----------+----------+--------+--------+--------+--------+------+ +------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+ | |Called-| | | | | | | | | | | up| | Capital|Unrealised| |Treasury|Realised| | | | | share| Share|redemption| capital| Special| shares| capital| Revenue| | |  |capital|premium| reserve| reserve*|reserve*|reserve*|reserve*|reserve*| Total| | | | | | | | | | | | |  | £'000| £'000| £'000| £'000| £'000| £'000| £'000| £'000| £'000| +------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+ |As at 1 | | | | | | | | | | |April 2010 | | | | | | | | | | |(audited) | 18,050| 69| 1,914| (4,599)| 13,236| (1,032)| (295)| 1,057| 28,400| | | | | | | | | | | | |Realised | | | | | | | | | | |losses | -| -| -| -| -| -| (7)| -| (7)| | | | | | | | | | | | |Unrealised | | | | | | | | | | |gains |  |  |  | 707| -| -| -| -| 707| | | | | | | | | | | | |Transfer of | | | | | | | | | | | previously | | | | | | | | | | |unrealised | | | | | | | | | | |losses to | | | | | | | | | | |realised | | | | | | | | | | |losses | -| -| -| 21| -| -| (21)| -| -| | | | | | | | | | | | |Capitalised | | | | | | | | | | |investment | | | | | | | | | | |management | | | | | | | | | | |fees | -| -| -| -| -| -| (424)| -| (424)| | | | | | | | | | | | |Tax on | | | | | | | | | | |capitalised | | | | | | | | | | |management | | | | | | | | | | |fees | -| -| -| -| -| -| 126| -| 126| | | | | | | | | | | | |Purchase of | | | | | | | | | | |own treasury| | | | | | | | | | |shares | -| -| -| -| -| (492)| -| -| (492)| | | | | | | | | | | | |Issue of | | | | | | | | | | |equity (net | | | | | | | | | | |of costs) | 836| 469| -| -| -| -| -| -| 1,305| | | | | | | | | | | | |Revenue | | | | | | | | | | |return | | | | | | | | | | |attributable| | | | | | | | | | |to | | | | | | | | | | |shareholders| -| -| -| -| -| -| -| 870| 870| | | | | | | | | | | | |Dividends | | | | | | | | | | |paid | -| -| -| -| -| -| -| (1,724)|(1,724)| | | | | | | | | | | | |Transfer | | | | | | | | | | |from Special| | | | | | | | | | |reserve to | | | | | | | | | | |realised | | | | | | | | | | |capital | | | | | | | | | | |reserve | -| -| -| -|(11,512)| -| 11,512| -| -| | | | | | | | | | | | |Transfer | | | | | | | | | | |from Special| | | | | | | | | | |reserve to | | | | | | | | | | |Revenue | | | | | | | | | | |reserve | -| -| -| -| (1,724)| -| -| 1,724| -| +------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+ |As at 31 | | | | | | | | | | |March 2011 | | | | | | | | | | |(audited) | 18,886| 538| 1,914| (3,871)| -| (1,524)| 10,891| 1,927| 28,761| +------------+-------+-------+----------+----------+--------+--------+--------+--------+-------+ *Included within these reserves is an amount of £6,643,300 (30 September 2010: £7,848,000; 31 March 2011: £7,423,000) which is considered distributable. The Special reserve has been treated as distributable in determining the amounts available for distribution. Summary cash flow statement +---------------------+----+------------------+------------------+-------------+ | | | Unaudited| Unaudited|  | | | | six months ended| six months ended| Audited| | | | 30 September 2011| 30 September 2010| year ended| | | | £'000| £'000|31 March 2011| |  |Note| | | £'000| +---------------------+----+------------------+------------------+-------------+ |Operating activities |  |  |  |  | | | | | | | |Investment income | | | | | |received |  | 669| 660| 1,285| | | | | | | |Deposit interest | | | | | |received |  | 18| 13| 19| | | | | | | |Investment management| | | | | |fees paid |  | (308)| (284)| (601)| | | | | | | |Other cash payments |  | (156)| (154)| (203)| | | +------------------+------------------+-------------+ |Net cash flow from | | | | | |operating activities | 8| 223| 235| 500| | | | | | | |  |  |  |  |  | | | | | | | |Taxation |  |  |  |  | | | | | | | |UK corporation tax | | | | | |recovered |  | 205| 514| 379| | | | | | | |  |  |  |  |  | | | | | | | |Capital expenditure | | | | | |and financial | | | | | |investments |  |  |  |  | | | | | | | |Purchase of fixed | | | | | |asset investments |  | (1,094)| (988)|  (2,365)| | | | | | | |Disposal of fixed | | | | | |asset investments |  | 2,357| 1,421| 3,280| | | +------------------+------------------+-------------+ |Net cash flow from | | | | | |investing activities |  | 1,263| 433| 915| | | | | | | |  |  |  |  |  | | | | | | | |  |  |  |  |  | | | | | | | |Equity dividends paid|  |  |  |  | | | | | | | |Dividends paid (net | | | | | |of cost of shares | | | | | |issued under the | | | | | |dividend reinvestment| | | | | |scheme) |  | (848)| (827)| (1,644)| | | +------------------+------------------+-------------+ |Net cash flow before | | | | | |financing |  | 843| 355| 150| | | +------------------+------------------+-------------+ |  |  |  |  |  | | | | | | | |Financing |  |  |  |  | | | | | | | |Issue of share | | | | | |capital |  | 461| -| 1,210| | | | | | | |Purchase of own | | | | | |shares |  | (352)| (197)| (492)| | | +------------------+------------------+-------------+ |Net cash flow from | | | | | |financing |  | 109| (197)| 718| | | +------------------+------------------+-------------+ |Cash flow in the | | | | | |period | 9| 952| 158| 868| +---------------------+----+------------------+------------------+-------------+ Notes to the unaudited summarised Financial Statements for the six months ended 30 September 2011 1. Accounting convention The Financial Statements have been prepared in accordance with the historical cost convention, modified to include the revaluation of investments, in accordance with applicable United Kingdom law and accounting standards and with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ("SORP") issued by the Association of Investment Companies ("AIC") in January 2009.  Accounting policies have been applied consistently in current and prior periods. 2. Accounting policies Investments Unquoted equity investments, debt issued at a discount and convertible bonds In accordance with FRS 26 "Financial Instruments Recognition and Measurement", unquoted equity, debt issued at a discount and convertible bonds are designated as fair value through profit or loss ("FVTPL"). Fair value is determined by the Directors in accordance with the International Private Equity and Venture Capital Valuation Guidelines (IPEVCV guidelines). Desk top reviews are carried out by independent RICS qualified surveyors by updating previously prepared full valuations for current trading and market indices.  Full valuations are prepared by similarly qualified surveyors, but in full compliance with the RICS Red Book. Fair value movements and gains and losses arising on the disposal of investments are reflected in the capital column of the Income statement in accordance with the AIC SORP; realised gains or losses on the sale of investments will be reflected in the realised capital reserve; and unrealised gains or losses arising from the revaluation of investments will be reflected in the unrealised capital reserve. Warrants and unquoted equity derived instruments Warrants and unquoted equity derived instruments are only valued if their exercise or contractual conversion terms would allow them to be exercised or converted as at the balance sheet date, and if there is additional value to the Company in exercising or converting as at the balance sheet date. Otherwise these instruments are held at nil value. The valuation techniques used are those used for the underlying equity investment. Unquoted loan stock Unquoted loan stock (excluding convertible bonds and debt issued at a discount) is classified as loans and receivables as permitted by FRS 26 and carried at amortised cost using the Effective Interest Rate method ("EIR") less impairment. Movements in respect of capital provisions are reflected in the capital column of the Income statement and are reflected in the realised capital reserve following sale, or in the unrealised capital reserve on revaluation. For all unquoted loan stock, fully performing, renegotiated, past due and impaired, the Board considers that the fair value is equal to or greater than the security value of these assets. For unquoted loan stock, the amount of the impairment is the difference between the asset's cost and the present value of estimated future cash flows, discounted at the original effective interest rate. The future cash flows are estimated based on the fair value of the security held less estimated selling costs. Investments are recognised as financial assets on legal completion of the investment contract and are de-recognised on legal completion of the sale of an investment. Dividend income is not recognised as part of the fair value movement of an investment, but is recognised separately as investment income through the revenue reserve when a share becomes ex-dividend. Loan stock accrued interest is recognised in the Balance sheet as part of the carrying value of the loans and receivables at the end of each reporting period. It is not the Company's policy to exercise control or significant influence over investee companies. Therefore, in accordance with the exemptions under FRS 9 "Associates and joint ventures", those undertakings in which the Company holds more than 20 per cent. of the equity are not regarded as associated undertakings. Investment income Unquoted equity income Dividend income is included in revenue when the investment is quoted ex- dividend. Unquoted loan stock and other preferred income Fixed returns on non-equity shares and debt securities are recognised on a time apportionment basis using the effective interest rate over the life of the financial instrument. Income which is not capable of being received within a reasonable period of time is reflected in the capital value of the investment. Bank interest income Interest income is recognised on an 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. Performance incentive fee In the event that a performance incentive fee crystallises, the fee will be allocated between revenue and realised capital reserves based upon the proportion to which the calculation of the fee is attributable to revenue and capital returns. Taxation Taxation is applied on a current basis in accordance with FRS 16 "Current tax". Taxation associated with capital expenses is applied in accordance with the SORP. In accordance with FRS 19 "Deferred tax", deferred taxation is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the Financial Statements. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. The Directors have considered the requirements of FRS 19 and do not believe that any provision for deferred tax should be made. Reserves Share premium account This reserve accounts for the difference between the price paid for shares and the nominal value of the shares, less issue costs and transfers to the Special reserve. Capital redemption reserve This reserve accounts for amounts by which the issued share capital is diminished through the repurchase and cancellation of the Company's own shares. Unrealised capital reserve Increases and decreases in the valuation of investments held at the year end against cost are included in this reserve. Special reserve The cancellation of the Share premium account has created a special reserve that can be used to fund market purchases and subsequent cancellation of own shares, to cover gross realised losses, and for other distributable purposes. Treasury shares reserve This reserve accounts for amounts by which the distributable reserves of the Company are diminished through the repurchase of the Company's own shares for treasury. Realised capital reserve The following are disclosed in this reserve: * gains and losses compared to cost on the realisation of investments; * expenses, together with the related taxation effect, charged in accordance with the above policies; and * dividends paid to equity holders. Dividends In accordance with FRS 21 "Events after the balance sheet date", dividends declared by the Company are accounted for in the period in which the dividend has been paid or approved by shareholders in an Annual General Meeting. 3.   Gains on investments   Unaudited Unaudited Audited six months ended six months ended year ended 30 September 30 September 31 March 2011 2011 2010 £'000 £'000 £'000 -------------------------------------------------------------------------------- Unrealised (losses)/gains on fixed asset investments held at fair value through profit or loss account (200) 292 725 Release of impairments/(impairments) on fixed asset investments held at amortised cost 118 39 (18) ------------------------------------------------ Unrealised (losses)/gains sub- total (82) 331 707 Realised gains on investments held at fair value through profit or loss account 288 - 8 Realised gains/(losses) on investments held at amortised cost 26 2 (15) ------------------------------------------------ Realised gains/(losses) sub- total 314 2 (7) ------------------------------------------------   232 333 700 ------------------------------------------------ Investments valued on an amortised cost basis are unquoted loan stock instruments as described in note 2. 4.   Investment income   Unaudited Unaudited Audited six months ended six months ended year ended 30 September 2011 30 September 2010 31 March 2011 £'000 £'000 £'000 -------------------------------------------------------------------------------- Income recognised on investments held at fair value through profit or loss account Other income 3 13 13 --------------------------------------------------   3 13 13 Income recognised on investments held at amortised cost Return on loan stock investments 688 662 1,266 Bank deposit interest 20 12 21 --------------------------------------------------   708 674 1,287 --------------------------------------------------   711 687 1,300 -------------------------------------------------- All of the Company's income is derived from operations based in the United Kingdom. 5.   Dividends   Unaudited Unaudited Audited six months ended six months ended year ended 30 September 2011 30 September 2010 31 March 2011 £'000 £'000 £'000 -------------------------------------------------------------------------------- First dividend paid on 25 June 2010 - 2.5 pence per share - 867 867 Second dividend paid on 31 December 2010 - 2.5 pence per share - - 857 First dividend paid 29 July 2011 - 2.5 pence per share 898 - - --------------------------------------------------   898 867 1,724 -------------------------------------------------- The Directors have declared a dividend of 2.50 pence per share (total approximately £890,000), payable on 30 December 2011 to shareholders on the register as at 2 December 2011. 6.   Basic and diluted return per share   Unaudited Unaudited six months six months ended ended Audited 30 September 30 September year ended 2011 2010 31 March 2011 --------------------------------------------------------------------------------   Revenue Capital Revenue Capital Revenue Capital Return attributable to Ordinary shares (£'000) 395 74 353 185 870 402 Weighted average shares in issue 36,015,803 34,636,675 34,764,240 Return per Ordinary share (pence) 1.1 0.2 1.0 0.6 2.5 1.2 The weighted number of shares is calculated excluding treasury shares of 2,610,773 (30 September 2010: 1,582,278; 31 March 2011: 2,043,273). There are no convertible instruments, derivatives or contingent share agreements in issue for Albion Venture Capital Trust PLC hence there are no dilution effects to the return per share. The basic return per share is therefore the same as the diluted return per share. 7.   Called up share capital   Unaudited Unaudited Audited six months ended six months ended year ended 30 September 2011 30 September 2010 31 March 2011 £'000 £'000 £'000 -------------------------------------------------------------------------------- Authorised 68,000,000 Ordinary shares of 50p each (30 September 2010 and 31 March 2011: 68,000,000 Ordinary shares of 50p each) 34,000 34,000 34,000 -------------------------------------------------- Allotted, called up and fully paid 38,393,948 Ordinary  shares of 50p each (30 September 2010: 36,149,006;  31 March 2011: 37,772,181 of 50p each) 19,197 18,075 18,886 -------------------------------------------------- Voting rights 35,783,175 Ordinary shares of 50p each (net of treasury shares) (30 September 2010: 34,566,728; 31 March 2011: 35,728,908 of 50p each) Under the terms of the Dividend Reinvestment Scheme Circular dated 10 July 2008, the following Ordinary shares of nominal value 50 pence per share were allotted at a price of 78 pence per share: Mid-market price per share on allotment Number of Issue price Net consideration date Date of shares (pence per received (pence per allotment allotted share) (£'000) share) -------------------------------------------------------------------------------- 29 July 2011 64,021 78.0 41 66.0 During the period from 1 April 2011 to 30 September 2011, the Company issued the following New shares of nominal value 50 pence under the Albion VCTs Linked Top Up Offer: Mid-market price per share on allotment Number of Issue price Net consideration date Date of shares (pence per received (pence per allotment allotted share) (£'000) share) -------------------------------------------------------------------------------- 5 April 2011 514,084 83.1 404 60.0 16 May 2011 43,662 83.1 34 61.0 ---------------- ---------------------   557,746   438 ---------------- --------------------- During the period to 30 September 2011 the Company purchased 567,500 Ordinary shares to be held in treasury at a cost of £351,000, representing 1.50% of the shares in issue as at 1 April 2011. The shares purchased for treasury were funded from the Treasury shares reserve. The total number of Ordinary shares held in treasury as at 30 September 2011 was 2,610,773 (30 September 2010: 1,582,278; 31 March 2011: 2,043,273) representing 6.8% of the share capital as at 30 September 2011 8.   Reconciliation of revenue return on ordinary activities before taxation to net cash flow from operating activities   Unaudited Unaudited Audited six months ended six months ended year ended 30 September 2011 30 September 2010 31 March 2011 £'000 £'000 £'000 -------------------------------------------------------------------------------- Revenue return on ordinary activities before tax 529 484 911 Investment management fee charged to capital (218) (211) (424) Movement in accrued amortised loan stock interest (20) (2) 20 Increase in operating debtors (10) (10) (29) (Decrease)/Increase in operating creditors (58) (26) 22 -------------------------------------------------- Net cash flow from operating activities 223 235 500 -------------------------------------------------- 9.   Analysis of change in cash during the period   Unaudited Unaudited Audited six months ended six months ended year ended 30 September 2011 30 September 2010 31 March 2011 £'000 £'000 £'000 ------------------------------------------------------------------------------- Opening cash balances 2,971 2,103 2,103 Net cash flow 952 158 868 -------------------------------------------------------- End of the period 3,923 2,261 2,971 -------------------------------------------------------- 10.   Commitments and contingencies         As at 30 September 2011, the Company was committed to making a further investment of £316,000 in Oakland Care Centre Limited (30 September 2010: £1,582,278; 31 March 2011: £992,000). There are no contingencies or guarantees of the Company as at 30 September 2011 (30 September 2010 and 31 March 2011: nil). 11.   Post balance sheet events Since 30 September 2011 the Company has had the following material post balance sheet events: Investment of £316,000 in Oakland Care Centre Limited On 1 November 2011 the Company announced the launch of the Albion VCTs Linked Top Up Offer 2011/2012.  In aggregate, the Albion VCTs will be aiming to raise up to £15 million across seven of the VCTs managed by Albion Ventures LLP, of which Albion Venture Capital Trust PLC's share will be approximately £2.25 million.  The maximum amount raised by each of the Albion VCTs will be 10 per cent. of its issued share capital (over any one 12 month period, and including any shares issued under Dividend Reinvestment Schemes), being the amount that they may issue under the Prospectus Rules without the publication of a full prospectus. The proceeds of the Offer will be used to provide further resources to the Albion VCTs at a time when a number of attractive new investment opportunities are being seen. An Investor Guide and Offer Document have been sent to shareholders. 12.   Related party transactions The Manager, Albion Ventures LLP, is considered to be a related party by virtue of the fact that it is party to a Management agreement from the Company (details disclosed on page 19 of the Annual Report and Financial Statements for the year ended 31 March 2011). During the period, services of a total value of £291,000 in management fees and £22,000 in administration fees (30 September 2010: £281,000 in management fees and £21,000 in administration fees; 31 March 2011: £565,000 in management fees and £41,000 in administration fees), were purchased by the Company from Albion Ventures LLP. At the financial period end, the amount due to Albion Ventures LLP in respect of these services disclosed within accruals and deferred income was £173,000 (30 September 2010: £166,000; 31 March 2011: £170,000). During the year the Company raised new funds through the Albion VCTs Linked Top Up Offer. The total cost of the issue of these shares was 5.5% of the sums subscribed. Of these costs, an amount of £3,450 was paid to the Manager, Albion Ventures LLP in respect of receiving agent services. There were no sums outstanding in respect of receiving agent services at 30 September 2011. There are no other related party transactions or balances requiring disclosure. 13.         Going concern The Board's assessment of liquidity risk remains unchanged since the last Annual Report and Financial Statements for the year ended 31 March 2011, and is detailed on page 26 of those accounts. The Company has adequate cash and liquid resources. The portfolio of investments is diversified in terms of sector, and the major cash outflows of the Company (namely investments, dividends and share buy-backs) are within the Company's control. Accordingly, after making diligent enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Directors have adopted the going concern basis in preparing this Half-yearly Financial Report and this is in accordance with 'Going Concern and Liquidity Risk: Guidance for Directors of UK Companies 2009' published by the Financial Reporting Council. 14.   Risks and uncertainties The Board considers that the Company faces the following major risks and uncertainties: 1. Investment risk This is the risk of investment in poor quality assets which reduces the capital and income returns to shareholders, and negatively impacts on the Company's reputation. By nature, smaller unquoted businesses, such as those that qualify for venture capital trust purposes, are more fragile than larger, long established businesses. To reduce this risk, the Board places reliance upon the skills and expertise of the Manager and its strong track record for investing in this segment of the market. In addition, the Manager operates a formal and structured investment process, which includes an Investment Committee, comprising investment professionals from the Manager and at least one external investment professional. The Manager also invites comments from non-executive Directors of the Company on investments discussed at the Investment Committee meetings. Investments are actively and regularly monitored by the Manager (investment managers normally sit on investee company boards) and the Board receives detailed reports on each investment as part of the Manager's report at quarterly board meetings. 2. Venture Capital Trust approval risk The Company's current approval as a venture capital trust allows investors to take advantage of tax reliefs on initial investment and ongoing tax free capital gains and dividend income. Failure to meet the qualifying requirements could result in investors losing the tax relief on initial investment and loss of tax relief on any tax-free income or capital gains received. In addition, failure to meet the qualifying requirements could result in a loss of listing of the shares. To reduce this risk, the Board has appointed the Manager, who has a team with significant experience in venture capital trust management, used to operating within the requirements of the venture capital trust legislation. In addition, to provide further formal reassurance, the Board has appointed PricewaterhouseCoopers LLP as its taxation advisors. PricewaterhouseCoopers LLP report quarterly to the Board to independently confirm compliance with the venture capital trust legislation, to highlight areas of risk and to inform on changes in legislation. 3. Compliance risk The Company is listed on The London Stock Exchange and is required to comply with the rules of the UK Listing Authority, as well as with the Companies Act, Accounting Standards and other legislation. Failure to comply with these regulations could result in a delisting of the Company's shares, or other penalties under the Companies Act or from financial reporting oversight bodies. Board members and the Manager have experience of operating at senior levels within quoted businesses. In addition, the Board and the Manager receive regular updates on new regulation from its auditors, lawyers and other professional bodies. 4. 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 auditors Littlejohn LLP at least once a year, receiving a report regarding the last formal internal audit performed on the Manager, and providing the opportunity for the Audit Committee to ask specific and detailed questions. During the year the Board met with the internal audit Partner of Littlejohn LLP to discuss the most recent Internal Audit Report on the Manager. The Manager has a comprehensive business continuity plan in place in the event that operational continuity is threatened. Further details regarding the Board's management and review of the Company's internal controls through the implementation of the Turnbull guidance are detailed on pages 25 and 26 of the Financial Statements for the year ended 31 March 2011.  Measures are in place to mitigate information risk in order to ensure the integrity, availability and confidentiality of information used within the business. 5. Reliance upon third parties risk The Company is reliant upon the services of Albion Ventures LLP for the provision of investment management and administrative functions. There are provisions within the management agreement for the change of Manager under certain circumstances (for further detail, see the management agreement paragraph on page 19 of the Financial Statements for the year ended 31 March 2011). In addition, the Manager has demonstrated to the Board that there is no undue reliance placed upon any one individual within Albion Ventures LLP. 6. Financial risks By its nature, as a venture capital trust, the Company is exposed to investment risk (which comprises investment price risk and cash flow interest rate risk), credit risk and liquidity risk. The Company's policies for managing these risks and its financial instruments are outlined in full in note 19 to the Financial Statements for the year ended 31 March 2011. All of the Company's income and expenditure is denominated in sterling and hence the Company has no foreign currency risk. The Company is financed through equity and does not have any borrowings. The Company does not use derivative financial instruments. 15.        Other information The information set out in this Half-yearly Financial Report does not constitute the Company's statutory accounts within the terms of section 434 of the Companies Act 2006 for the periods ended 30 September 2011 and 30 September 2010, and is unaudited. The information for the year ended 31 March 2011 does not constitute statutory accounts within the terms of section 434 of the Companies Act 2006 but is derived from the audited statutory accounts for the financial year, which were unqualified and which have been delivered to the Registrar of Companies. The Auditors reported on those accounts; their report was unqualified and did not contain a statement under s498 (2) or (3) of the Companies Act 2006. 16.        Publication This Half-yearly Financial Report is being sent to shareholders and copies will be made available to the public at the registered office of the Company, Companies House, the National Storage Mechanism and also electronically at www.albion-ventures.co.uk under the 'Our Funds' section. Split of portfolio by valuation: http://hugin.info/141809/R/1565184/485700.pdf This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Albion Venture Capital Trust PLC via Thomson Reuters ONE [HUG#1565184]

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