Crown Place VCT PLC : Annual Financial Report

Annual Financial Report As required by the UK Listing Authority's Disclosure and Transparency Rules 4.1 and 6.3, Crown Place VCT PLC today makes public its information relating to the Annual Report and Financial Statements for the year ended 30 June 2011. This announcement was approved for release by the Board of Directors on 7 October 2011. This announcement has not been audited. You will shortly be able to view the Annual Report and Financial Statements for the year to 30 June 2011 (which have been audited) at: www.albion-ventures.co.uk by clicking on 'Our Funds' and then Crown Place VCT PLC'.Â The Annual Report and Financial Statements for the year to 30 June 2011 will be available as a PDF document via a link under the 'Investor Centre' 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 objectives The investment objective and policy of the Company* is to achieve long term capital and income growth principally through investment in smaller unquoted companies in the United Kingdom. In pursuing this policy, the Manager aims to build a portfolio which concentrates on two complementary investment areas. The first are more mature or asset-based investments that can provide a strong income stream combined with a degree of capital protection. These will be balanced by a lesser proportion of the portfolio being invested in higher risk companies with greater growth prospects. *The 'Company' is Crown Place VCT PLC. The 'Group' is the Company together with its subsidiaries CP1 VCT PLC and CP2 VCT PLC. Financial calendar Annual General Meeting 9 November 2011 Record date for first dividend 4 November 2011 Payment of first dividend 30 November 2011 Announcement of half-yearly results for the six months ended February 2012 31 December 2011 Payment of second dividend subject to Board approval March 2012 Financial highlights 2.15p Total return to shareholders for the year ended 30 June 2011 2.50p Total tax free dividends per share paid during the year ended 30 June 2011 8.3% Yield on share price (dividend per annum/share price as at 30 June 2011) 33.65p Net asset value per share as at 30 June 2011 1.25p First tax free dividend per share declared for the year to 30 June 2012 +-------------------------------------------------------------------+ | Â Â 30 June 2011 30 June 2010 | | | | Â Â pence per share pence per share | +-------------------------------------------------------------------+ | Net asset value per share Â 33.65 33.94 | | | | Dividends paid Â 2.50 2.50 | | | | Revenue return per share Â 1.11 0.68 | | | | Capital return per share Â 1.04 1.52 | +-------------------------------------------------------------------+ Shareholder returns and shareholder value Â Proforma ((i)) Proforma ((i)) Crown Place VCT PLC* Murray VCT PLC Murray VCT 2 Â PLC Â pence per share pence per share pence per share Shareholder return from launch to April 2005 (date that Albion Ventures was appointed investment manager): Total dividends paid to 30.36 30.91 24.93 6 April 2005 ((ii)) Decrease in net asset (69.90) (64.50) (56.60) value ------------------------------------------------------- Total shareholder return (39.54) (33.59) (31.67) to 6 April 2005 ------------------------------------------------------- Shareholder return from April 2005 to 30 June 2011: Total dividends paid 10.47 12.32 14.30 Decrease in net asset (6.15) (6.87) (9.75) value ------------------------------------------------------- Total shareholder return from April 2005 to 30 June 2011 4.32 5.45 4.55 ------------------------------------------------------- Shareholder value since launch: Total dividends paid to 40.83 43.23 39.23 30 June 2011 ((ii)) Net asset value as at 30 23.95 28.63 33.65 June 2011 ------------------------------------------------------- Total shareholder value 64.78 71.86 72.88 as at 30 June 2011 ------------------------------------------------------- Current dividend objective: Pence per share 1.78 2.13 2.50 ------------------------------------------------------- Percentage yield on net 7.4% 7.4% 7.4% asset value ------------------------------------------------------- Net asset value total return to shareholders since launch: +------------------------------------------------------------------------------+ |Â 30 June 2011| | (pence per share)| +------------------------------------------------------------------------------+ |Total dividends paid during the period from launch to 6 24.93| |April 2005 (prior to change of manager) | | | |Total dividends paid during the year ended 28 February 2006 1.00| | | |Total dividends paid during the period ended 30 June 2007 3.30| | | |Total dividends paid during the year ended 30 June 2008 2.50| | | |Total dividends paid during the year ended 30 June 2009 2.50| | | |Total dividends paid during the year ended 30 June 2010 2.50| | | |Total dividends paid during the year ended 30 June 2011 2.50| | ------------------+ |Total dividends paid to 30 June 2011 39.23| | | |Net asset value as at 30 June 2011 33.65| | ------------------+ |Total net asset value return as at 30 June 2011 72.88| +------------------------------------------------------------------------------+ Notes i. 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 30 June 2011 since the merger. This pro-forma is based upon the proportion of shares received by Murray VCT PLC (now renamed CP1 VCT PLC) and Murray VCT 2 PLC (now renamed CP2 VCT PLC) shareholders at the time of the merger with Crown Place VCT PLC on 13 January 2006. ii. Prior to 6 April 1999, venture capital trusts were able to add 20 per cent. to dividends and figures for the period up until 6 April 1999 are included at the gross equivalent rate actually paid to shareholders. * Â Formerly Murray VCT 3 PLC In addition to the dividends paid above, the Board has declared a first dividend for the year ending 30 June 2012, of 1.25 pence per Crown Place VCT PLC share on 30 November 2011 to shareholders on the register as at 4 November 2011. Chairman's statement Introduction I have pleasure in presenting the results for the year ended 30 June 2011. Â The Group achieved a positive total return of 2.15 pence per share, broadly similar to the return for 2009/10. Â The Company maintained its regular dividend of 2.50 pence per share and continues to benefit from strong cash balances for future investment and dividend payments. Results and dividends As at 30 June 2011, net asset value was Â£25.7 million or 33.65 pence per share compared to Â£24.4 million or 33.94 pence per share at 30 June 2010. Â The revenue return before taxation was Â£812,000 compared to Â£489,000 in the previous year. Â During the year to 30 June 2011, the Company paid a dividend of 2.50 pence per share. Â The first dividend for the current financial year of 1.25 pence per share will be paid on 30 November 2011 to shareholders on the register as at 4 November 2011. Investment performance and progress The key events during the year were the successful sales of Geronimo Inns, Dexela and Driver Hire. Â Geronimo Inns, which owns four freehold London pubs, realised proceeds of Â£1.63 million for the VCT and an income and capital return of 25 per cent.. Â Dexela, which provides medical imaging technology, was sold to Perkin Elmer of the US in June, and the Company will make between two and three times a return on its investment. Â In addition, the non-qualifying "legacy" investment in Driver Hire was sold for proceeds of just under Â£500,000; together these three investments resulted in an uplift in investment proceeds of Â£824,000 over the valuation at the previous year end. Â Meanwhile, ELE Advanced Technologies paid a dividend of Â£286,000 to the VCT, on the back of a strong trading performance, which in turn led to the increase in the revenue return detailed under "Results and dividends" above. Weaker than expected performance was seen at Xceleron and Prime Care, where the latter has been affected by public spending cuts. Charnwood saw a reduced valuation of some of its pubs due to lower customer spending. Chichester Holdings has been affected by a change to the management team. Dysis has been impacted by delays in US registration that has now been resolved and the relaunch of a new product design.The share price of Avanti Communications Plc, a satellite operator and one of the Company's few remaining AIM quoted investments, has declined due to concerns over the company's ability to achieve its commercial objectives in a fast changing market. Â Avanti operates in a growing market and following the launch of its first satellite in March 2011, has valuable assets. These movements have been balanced by unrealised valuations uplifts in ELE Advanced Technologies Limited and Mirada Medical Limited. During the year, your Company invested, or committed to invest, a total of Â£5.1 million in eight new investee companies and thirteen existing investee companies. Â The two largest of these new investments were a drawdown of up to Â£1.56 million by Radnor House School, a new private independent day school on a freehold site on the Thames at Twickenham and second, Â£1.0 million into the Oakland Care Centre, a freehold care home in Chingford, North London. Other valuation movements within the investment portfolio are discussed further in the Manager's report. Continuation as a venture capital trust Under the terms of your Company's Articles of Association, at the 2011 Annual General Meeting and every five years thereafter, members have the opportunity to confirm that they wish the Company to continue as a venture capital trust. Otherwise the Board is required to make proposals for the reorganisation, reconstruction or the orderly liquidation and winding up of the Company and present these to the members at a general meeting. Since Albion Ventures LLP (through its predecessor Close Venture Management Limited) was appointed investment manager of the Company in 2005, the performance of the Company has been turned around. This has been achieved through a policy of disposal of underperforming investments and a re-positioning of the portfolio in line with the strategy approved by shareholders at the time of the merger in 2006. This strategy concentrates on two complimentary investment areas. The first are lower risk, often asset-backed investments that can provide a strong income stream together with an element of capital protection. These investments have been balanced by a smaller proportion of investments in higher risk companies with greater growth prospects. In addition, the total expense ratio has been sharply cut from 4.9 per cent. in 2006 to 2.6 per cent. in Â 2011 (both excluding non-recurring expenses). As a result of these measures, the Company has been able to pay a regular annual dividend income of 2.50 pence per share for the past four years. Based on the share price as at 30 June 2011, this is a tax free dividend yield of 8.3 per cent. on the share price (7.4 per cent. based on the net asset value per share as at 30 June 2011), equivalent to 16.6 per cent. when grossed up for tax at 50 per cent.. Â Since the appointment of the Manager in April 2005, the Company has distributed total tax free dividends of 14.30 pence per share and the total return to shareholders has been positive, despite the difficult economic conditions of the past three years. This places its performance in the second quartile of generalist VCTs over that period, as measured by the Association of Investment Companies. Those shareholders who have been using their investment in the VCT to defer a capital gain should note that, on a return of capital, that gain would become chargeable at the prevailing rate of capital gains tax. Your Board believes that VCTs have the potential to be highly effective long- term savings vehicles with strong tax-free dividend streams. Consequently in view of its track record since the appointment of the Manager and the strong tax-free dividend stream to shareholders, your Board recommends that shareholders vote in favour of the Company to continuing as a venture capital trust for a further five years, as they intend to in respect of their own shares. Risks and uncertainties We remain cautious over the short and medium term prospects of the UK and global economies in view of the currency and debt constraints which are increasingly becoming apparent. Â Nevertheless, we believe that many of the sectors in which we operate are resilient, and that the investee companies which we support, are positioned to grow despite these broader uncertainties. Â In addition, it remains our general policy that investee companies have no external bank borrowings. Â Therefore, as the investment portfolio continues to mature, the prospects on the whole look positive. Other risks and uncertainties are detailed in note 22 to this announcement. Details of post balance sheet events and related party transactions are set out in notes 19 and 21 to this announcement. Discount management and share buy-backs It remains 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, including the maintenance of sufficient resources for investment in existing and new investee companies and the continued payment of dividends for shareholders. Â It is the Board's intention for such buy-backs to be in the region of a 10-15per cent. discount to net asset value, so far as market conditions and liquidity permit. Albion VCTs Linked Top Up Offers During the year, a total of Â£1.67 million was raised by your Company as part of the Â£12 million Albion VCTs Linked Top Up Offer carried out by seven of the VCTs managed by Albion Ventures. Â A further top-up offer is planned for later on this year and details are expected to be sent to shareholders in November. Recovery of VAT On 24th July 2008, HMRC issued a Business Briefing which permitted the recovery of historic VAT that had been charged on management fees and which made these fees exempt from VAT with effect from 1 October 2008. As disclosed in the report for the year to June 2009, your Board has already received a refund of VAT, and interest thereon, from Albion Ventures LLP in respect of the period October 2005 to October 2008, and no VAT has been charged on management fees with effect from 1st October 2008. Any moneys recoverable for earlier periods are due from the former manager, Murray Johnstone Limited, and no account has been taken in respect of these. Your Board continues in its endeavours with the former manager to recover VAT where possible for the period prior to October 2005. Board changes In accordance with best practice which requires that 'a Board should ensure planned and progressive refreshing of the Board' your Board initiated a programme of changes in 2010. Geoffrey Vero and Sir Andrew Cubie retired asÂ Directors and Karen Brade was appointed. AsÂ a continuing part of this process Vikram Lall has indicated to the Board that he wishes to retire as a Director of the Company as soon as a suitable replacement is appointed. Â Vikram became a Director of Crown Place VCT PLC in January 2006, following the merger with Murray VCT PLC and Murray VCT 2 PLC. He had been a director of Murray VCT and Murray VCT 2 since their incorporation. Â The Board wishes to thank Vikram for his significant input and valuable contribution to the Board andÂ to the Company and its predecessor companies over many years. Â The Board will shortly be starting a process to appoint a new Director Outlook and prospects As already mentioned, the outlook for the UK and the global economies remains uncertain. Â Nevertheless, a number of our companies operate in sectors that should prove to be more resilient over the medium term in the event of continued economic upheaval. Â These include the healthcare and environmental sectors, which are an increasing area for investment by your VCT. Â In addition, the great majority of investments are structured to be cash generative and to provide further support for your Company's dividend policy. Patrick Crosthwaite Chairman 7 October 2011 Manager's report Investment portfolio An analysis by sector of Crown Place VCT's investment portfolio as at 30 June 2011 is shown below. Â This demonstrates continuing concentration on achieving an increasingly balanced portfolio, with a reduction in investments in the pub sector matched by an increase in both healthcare and the environmental sectors. In addition, over 62 per cent. of the portfolio by value is in asset- backed investments. Â As at 30 June 2011, the portfolio comprised investments in 55 quoted and unquoted companies. Please see the end of this announcement for the PDF of the sector split of the portfolio by valuation as at 30 June 2011. Source: Albion Ventures LLP New investments The Company Â invested and committed a total of Â£5.1 million in new investee companies during the year. Â The two largest of these were in a new independent school and in a specialist care home. Â In addition, some Â£568,000 was invested in four renewable energy companies, including a new anaerobic digestion power station powered by methane from waste food, based in Perth, Scotland. Â We also invested Â£1,100,000 in thirteen existing investee companies to support growth. Portfolio review In addition to the investment realisations of our holdings in Geronimo Inns, Dexela and Driver Hire, strong performance was seen in ELE Advanced Technologies, where further improvement was seen in the company's engineering services in the UK and Slovakia, while Mirada Medical also saw continued growth. Â Against this, slower than hoped for progress at the newly-opened Stanwell Hotel outside Heathrow resulted in a reduction in its third party professional valuation, and weaker than expected performance was seen at Xceleron and Prime Care, where the latter has been affected by public spending cuts. Charnwood saw a reduced valuation of some of its pubs due to lower customer spending and Chichester Holdings has been affected by a change to the management team. Dysis has been impacted by delays in US registration that have now been resolved with the relaunch of a new product design. The pipeline for new investments remains strong, with continued concentration on building up our presence in the healthcare and environmental sectors. Â We are also concentrating on improving the cash generation of our investments in order to further support the Company's dividend target. Â Albion Ventures LLP Manager 7 October 2011 Responsibility Statement In preparing these financial statements for the year to 30 June 2011, the Directors of the Company, being Patrick Crosthwaite, Rachel Beagles, Karen Brade and Vikram Lall, 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 30 June 2011 for the Group has been prepared in accordance with International Financial Reporting Standards, and for the Company has 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 Group and the Company for the year ended 30 June 2011 as required by DTR 4.1.12.R; Â -the Chairman's statement and Manager's report include a fair review of the information required by DTR 4.2.7R (indication of important events during the year ended 30 June 2011 and description of principal risks and uncertainties that the Group and the Company faces); and Â -the Chairman's statement and Manager's 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 for the preparation of the Group and the Company's financial statements" is contained within the full audited Annual Report and Financial Statements. By order of the Board Patrick Crosthwaite Chairman 7 October 2011 Consolidated statement of comprehensive income +-----------------------------+----+---------------------+---------------------+ | Â | Â | Year ended | Year ended | +-----------------------------+----+---------------------+---------------------+ | Â | Â | 30 June 2011 | 30 June 2010 | +-----------------------------+----+-------+-------+-----+-------+-------+-----+ |Â | Â |Revenue|Capital|Total|Revenue|Capital|Total| +-----------------------------+----+-------+-------+-----+-------+-------+-----+ |Â |Note| Â£'000| Â£'000|Â£'000| Â£'000| Â£'000|Â£'000| +-----------------------------+----+-------+-------+-----+-------+-------+-----+ |Â | | | | | | | | |Profits on investments |2 | -| 1,089|1,089| -| 1,421|1,421| | | | | | | | | | |Investment income and deposit| | | | | | | | |interest |3 | 1,157| -|1,157| 903| -| 903| | | | | | | | | | |Investment management fees |4 | (109)| (327)|(436)| (108)| (324)|(432)| | | | | | | | | | |Other expenses |5 | (236)| -|(236)| (306)| -|(306)| | | +-------+-------+-----+-------+-------+-----+ |Â | | | | | | | | |Profit before taxation |Â | 812| 762|1,574| 489| 1,097|1,586| | | | | | | | | | |Taxation |6 | -| -| -| -| -| -| | | +-------+-------+-----+-------+-------+-----+ |Profit and total | | | | | | | | |comprehensive income for the | | | | | | | | |year |Â | 812| 762|1,574| 489| 1,097|1,586| | | +-------+-------+-----+-------+-------+-----+ |Basic and diluted return per | | | | | | | | |Ordinary share (pence)* |8 | 1.11| 1.04| 2.15| 0.68| 1.52| 2.20| +-----------------------------+----+-------+-------+-----+-------+-------+-----+ * Â excluding treasury shares The accompanying notes form an integral part of these Financial Statements. The total column of this statement represents the Group's statement of comprehensive income, prepared in accordance with International Financial Reporting Standards ('IFRS'). The supplementary revenue and capital columns are prepared under guidance published by the Association of Investment Companies. All revenue and capital items in the above statement derive from continuing operations and are wholly attributable to the owners of the parent Company. Consolidated balance sheet +----------------------------------------------------+------------+------------+ | Â Â | Â | Â | | | | | | Â Â |30 June 2011|30 June 2010| | | | | | Â Note| Â£'000| Â£'000| +----------------------------------------------------+------------+------------+ |Non-current assets Â | Â | Â | | | | | |Investments 9| 21,172| 19,092| | | | | |Â Â | Â | Â | | | | | |Current assets Â | Â | Â | | | | | |Trade and other receivables less than one year 12| 102| 68| | | | | |Cash and cash equivalents 16| 4,550| 5,513| | +------------+------------+ |Â Â | 4,652| 5,581| | +------------+------------+ |Â Â | Â | Â | | | | | |Total assets Â | 25,824| 24,673| | | | | |Current liabilities Â | Â | Â | | | | | |Trade and other payables 13| (243)| (260)| | | | | |Â Â | Â | Â | | | | | |Non-current assets Â | Â | Â | | | | | |Trade and other receivables greater than one | | | |year 12| 80| -| | | | | |Â Â | Â | Â | | +------------+------------+ |Net assets Â | 25,661| 24,413| | +------------+------------+ |Â Â | Â | Â | | | | | |Equity attributable to equityholders Â | Â | Â | | | | | |Ordinary share capital 14| 8,350| 7,918| | | | | |Share premium Â | 1,259| 32| | | | | |Capital redemption reserve Â | 1,058| 972| | | | | |Unrealised capital reserve Â | (4,712)| (5,966)| | | | | |Special reserve Â | -| 46,318| | | | | |Treasury shares reserve Â | (2,849)| (2,849)| | | | | |Realised capital reserve Â | 2,460| (23,165)| | | | | |Revenue reserve Â | 20,095| 1,153| | +------------+------------+ |Total equity shareholders' funds Â | 25,661| 24,413| | +------------+------------+ |Â Â | Â | Â | | | | | |Basic and diluted net asset value per share | | | |(pence)* 15| 33.65| 33.94| +----------------------------------------------------+------------+------------+ * Â 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 7 October 2011 and were signed on its behalf by Patrick Crosthwaite Chairman Company number: 03495287 Company balance sheet +----------------------------------------------------+------------+------------+ | Â Â | Â | Â | | | | | | Â Â |30 June 2011|30 June 2010| | | | | | Â Note| Â£'000| Â£'000| +----------------------------------------------------+------------+------------+ |Fixed assets Â | Â | Â | | | | | |Fixed asset investments 9| 21,172| 19,092| | | | | |Investment in subsidiary undertakings 11| 16,444| 15,013| | +------------+------------+ |Â Â | 37,616| 34,105| | | | | |Â Â | Â | Â | | | | | |Current Assets Â | Â | Â | | | | | |Trade and other debtors less than one year 12| 102| 68| | | | | |Cash and cash equivalents 16| 4,257| 5,400| | +------------+------------+ |Â Â | 4,359| 5,468| | +------------+------------+ |Â Â | Â | Â | | | | | |Total assets Â | 41,975| 39,573| | | | | |Â Â | Â | Â | | | | | |Creditors: amounts falling due within one year 13| (16,394)| (15,160)| | | | | |Â Â | Â | Â | | | | | |Non-current assets Â | Â | Â | | | | | |Trade and other debtors greater than one year 12| 80| -| | | | | |Â Â | Â | Â | | +------------+------------+ |Net assets Â | 25,661| 24,413| | +------------+------------+ |Â Â | Â | Â | | | | | |Capital and reserves Â | Â | Â | | | | | |Ordinary share capital 14| 8,350| 7,918| | | | | |Share premium Â | 1,259| 32| | | | | |Capital redemption reserve Â | 1,058| 972| | | | | |Unrealised capital reserve Â | (3,325)| (6,011)| | | | | |Special reserve Â | -| 46,318| | | | | |Treasury shares reserve Â | (2,849)| (2,849)| | | | | |Realised capital reserve Â | 2,407| (23,218)| | | | | |Revenue reserve Â | 18,761| 1,251| | +------------+------------+ |Shareholders' funds Â | 25,661| 24,413| | +------------+------------+ |Â Â | Â | Â | | | | | |Basic and diluted net asset value per share | | | |(pence)* 15| 33.65| 33.94| +----------------------------------------------------+------------+------------+ * Â excluding treasury shares The Company balance sheet has been prepared in accordance with UK GAAP. 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 7 October 2011 and were signed on its behalf by Patrick Crosthwaite Chairman Company number: 03495287 Consolidated statement of changes in equity +-------------+--------+-------+----------+----------+--------+--------+--------+--------+-------+ | |Ordinary| | Capital|Unrealised| Â |Treasury|Realised| | | | | share| Share|redemption| capital| Special| shares| capital| Revenue| | | Â | capital|premium| reserve| reserve*|reserve*|reserve*|reserve*|reserve*| Total| | | | | | | | | | | | | Â | Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| +-------------+--------+-------+----------+----------+--------+--------+--------+--------+-------+ |As at 1 July | | | | | Â | | | | | |2010 | 7,918| 32| 972| (5,966)| 46,318| (2,849)|(23,165)| 1,153| 24,413| | | | | | | | | | | | |Profit and | | | | | | | | | | |total | | | | | | | | | | |comprehensive| | | | | | | | | | |income for | | | | | | | | | | |the year | -| -| -| 218| -| -| 544| 812| 1,574| | | | | | | | | | | | |Transfer of | | | | | | | | | | |previously | | | | | | | | | | |unrealised | | | | | | | | | | |losses on | | | | | | | | | | |sale of | | | | | | | | | | |investments | -| -| -| 1,036| -| -| (1,036)| -| -| | | | | | | | | | | | |Dividends | | | | | | | | | | |paid in year | -| -| -| Â | -| -| -| (1,819)|(1,819)| | | | | | | | | | | | |Purchase of | | | | | | | | | | |own shares | | | | | | | | | | |for | | | | | | | | | | |cancellation | | | | | | | | | | |(including | | | | | | | | | | |costs) | (86)| -| 86| -| (252)| -| --| -| (252)| | | | | | | | | | | | |Issue of | | | | | | | | | | |equity (net | | | | | | | | | | |of costs) | 518| 1,227| -| -| -| -| -| -| 1,745| | | | | | | | | | | | |Transfer from| | | | | | | | | | |special | | | | | | | | | | |reserve to | | | | | | | | | | |revenue | | | | | | | | | | |reserve | -| -| -| -|(19,949)| -| -| 19,949| -| | | | | | | | | | | | |Transfer from| | | | | | | | | | |special | | | | | | | | | | |reserve to | | | | | | | | | | |realised | | | | | | | | | | |capital | | | | | | | | | | |reserve | -| -| -| -|(26,117)| -| 26,117| -| -| +-------------+--------+-------+----------+----------+--------+--------+--------+--------+-------+ |As at 30 June| | | | | | | | | | |2011 | 8,350| 1,259| 1,058| (4,712)| -| (2,849)| 2,460| 20,095| 25,661| +-------------+--------+-------+----------+----------+--------+--------+--------+--------+-------+ +-------------+--------+--------+----------+----------+--------+--------+--------+--------+-------+ | Â |Ordinary| | Capital|Unrealised| Â |Treasury|Realised| | | | Â | share| Share|redemption| capital| Special| shares| capital| Revenue| | | Â | capital| premium| reserve| reserve*|reserve*|reserve*|reserve*|reserve*| Total| | | | | | | | | | | | | Â | Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| +-------------+--------+--------+----------+----------+--------+--------+--------+--------+-------+ |As at 1 July | | | | | Â | | | | | |2009 | 7,965| 14,438| 902| (7,616)| 32,099| (2,849)|(21,163)| 1,012| 24,788| | | | | | | | | | | | |Profit and | | | | | | | | | | |total | | | | | | | | | | |comprehensive| | | | | | | | | | |income for | | | | | Â | | | | | |the year | -| -| -| 761| -| -| 336| 489| 1,586| | | | | | | | | | | | |Transfer of | | | | | | | | | | |previously | | | | | | | | | | |unrealised | | | | | | | | | | |losses on | | | | | | | | | | |sale of | | | | | | | | | | |investments | -| -| -| 889| -| -| (889)| -| -| | | | | | | | | | | | |Dividends | | | | | Â | | | | | |paid in year | -| -| -| -| -| -| (1,449)| (362)|(1,811)| | | | | | | | | | | | |Purchase of | | | | | | | | | | |own shares | | | | | Â | | | | | |for | | | | | Â | | | | | |cancellation | | | | | Â | | | | | |(including | | | | | Â | | | | | |costs) | (70)| -| 70| -| (205)| -| -| -| (205)| | | | | | | | | | | | |Issue of | | | | | | | | | | |equity (net | | | | | Â | | | | | |of costs) | 23| 32| -| -| -| -| -| -| 55| | | | | | | | | | | | |Cancellation | | | | | | | | | | |of share | | | | | | | | | | |premium | | | | | | | | | | |account | -|(14,438)| -| -| 14,438| -| -| -| -| | | | | | | | | | | | |Costs of | | | | | | | | | | |cancellation | | | | | | | | | | |of share | | | | | | | | | | |premium | | | | | | | | | | |account | -| -| -| -| (14)| -| -| 14| -| +-------------+--------+--------+----------+----------+--------+--------+--------+--------+-------+ |As at 30 June| | | | | Â | | | | | |2010 | 7,918| 32| 972| (5,966)| 46,318| (2,849)|(23,165)| 1,153| 24,413| +-------------+--------+--------+----------+----------+--------+--------+--------+--------+-------+ * Included within these reserves is an amount of Â£14,994,000 (2010: Â£15,491,000) which is considered distributable. The special reserve has been treated as distributable in determining the amounts available for distribution. The special reserve allows the Company, amongst other things, to facilitate the payment of dividends earlier than would otherwise have been possible as transfers can be made from this reserve to the realised capital reserve to offset gross losses on disposal of investments and to the revenue reserve. Company reconciliation of movements in shareholders' funds +------------+--------+-------+----------+----------+--------+--------+--------+--------+-------+ | |Ordinary| | Capital|Unrealised| Â |Treasury|Realised| | | | | share| Share|redemption| capital| Special| shares| capital| Revenue| | | Â | capital|premium| reserve| reserve*|reserve*|reserve*|reserve*|reserve*| Total| | | | | | | | | | | | | Â | Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| +------------+--------+-------+----------+----------+--------+--------+--------+--------+-------+ |As at 1 July| | | | | Â | | | | | |2010 | 7,918| 32| 972| (6,011)| 46,318| (2,849)|(23,218)| 1,251| 24,413| | | | | | | | | | | | |Return for | | | | | | | | | | |the year | -| -| -| 1,650| -| -| 544| (620)| 1,574| | | | | | | | | | | | |Transfer of | | | | | | | | | | |previously | | | | | | | | | | |unrealised | | | | | | | | | | |losses on | | | | | | | | | | |sale of | | | | | | | | | | |investments | -| -| -| 1,036| -| -| (1,036)| -| -| | | | | | | | | | | | |Dividends | | | | | | | | | | |paid in year| -| -| -| -| -| -| -| (1,819)|(1,819)| | | | | | | | | | | | |Purchase of | | | | | | | | | | |own shares | | | | | | | | | | |for | | | | | | | | | | |cancellation| | | | | | | | | | |(including | | | | | | | | | | |costs) | (86)| -| 86| -| (252)| -| -| -| (252)| | | | | | | | | | | | |Issue of | | | | | | | | | | |equity (net | | | | | | | | | | |of costs) | 518| 1,227| -| -| -| -| -| -| 1,745| | | | | | | | | | | | |Transfer | | | | | | | | | | |from special| | | | | | | | | | |reserve to | | | | | | | | | | |revenue | | | | | | | | | | |reserve | -| -| -| -|(19,949)| -| -| 19,949| -| | | | | | | | | | | | |Transfer | | | | | | | | | | |from special| | | | | | | | | | |reserve to | | | | | | | | | | |realised | | | | | | | | | | |capital | | | | | | | | | | |reserve | -| -| -| -|(26,117)| -| 26,117| -| -| +------------+--------+-------+----------+----------+--------+--------+--------+--------+-------+ |As at 30 | | | | | | | | | | |June 2011 | 8,350| 1,259| 1,058| (3,325)| -| (2,849)| 2,407| 18,761| 25,661| +------------+--------+-------+----------+----------+--------+--------+--------+--------+-------+ +------------+--------+--------+----------+----------+--------+--------+--------+--------+-------+ | |Ordinary| | Capital|Unrealised| Â |Treasury|Realised| | | | | share| Share|redemption| capital| Special| shares| capital| Revenue| | | Â | capital| premium| reserve| reserve*|reserve*|reserve*|reserve*|reserve*| Total| | | | | | | | | | | | | Â | Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| Â£'000| +------------+--------+--------+----------+----------+--------+--------+--------+--------+-------+ |As at 1 July| | | | | Â | | | | | |2009 | 7,965| 14,438| 902| (7,525)| 32,099| (2,849)|(21,216)| 974| 24,788| | | | | | | | | | | | |Return for | | | | | Â | | | | | |the year | -| -| -| 625| -| -| 336| 625| 1,586| | | | | | | | | | | | |Transfer of | | | | | Â | | | | | |previously | | | | | Â | | | | | |unrealised | | | | | Â | | | | | |losses on | | | | | Â | | | | | |sale of | | | | | Â | | | | | |investments | -| -| -| 889| -| -| (889)| -| -| | | | | | | | | | | | |Dividends | | | | | Â | | | | | |paid in year| -| -| -| -| -| -| (1,449)| (362)|(1,811)| | | | | | | | | | | | |Purchase of | | | | | Â | | | | | |own shares | | | | | Â | | | | | |for | | | | | Â | | | | | |cancellation| | | | | Â | | | | | |(including | | | | | Â | | | | | |costs) | (70)| -| 70| -| (205)| -| -| -| (205)| | | | | | | | | | | | |Issue of | | | | | Â | | | | | |equity (net | | | | | Â | | | | | |of costs) | 23| 32| -| -| -| -| -| -| 55| | | | | | | | | | | | |Cancellation| | | | | Â | | | | | |of share | | | | | Â | | | | | |premium | | | | | Â | | | | | |account | -|(14,438)| -| -| 14,438| -| -| -| -| | | | | | | | | | | | |Costs of | | | | | | | | | | |cancellation| | | | | | | | | | |of share | | | | | | | | | | |premium | | | | | | | | | | |account | -| -| -| -| (14)| -| -| 14| -| +------------+--------+--------+----------+----------+--------+--------+--------+--------+-------+ |As at 30 | | | | | | | | | | |June 2010 | 7,918| 32| 972| (6,011)| 46,318| (2,849)|(23,218)| 1,251| 24,413| +------------+--------+--------+----------+----------+--------+--------+--------+--------+-------+ * Included within these reserves is an amount of Â£14,994,000 (2010: Â£15,491,000) which is considered distributable. The special reserve has been treated as distributable in determining the amounts available for distribution. The special reserve allows the Company, amongst other things, to facilitate the payment of dividends earlier than would otherwise have been possible as transfers can be made from this reserve to the realised capital reserve to offset gross losses on disposal of investments and to the revenue reserve. Consolidated cashflow statement +-------------------------------------------------------+-----------+----------+ | |Â Year ended|Year ended| | | Â 30 June| Â 30 June| | | 2011| 2010| | Â Note| Â£'000| Â£'000| +-------------------------------------------------------+-----------+----------+ |Operating activities Â | Â | Â | | | | | |Investment income received Â | 945| 773| | | | | |Deposit interest received Â | 56| 86| | | | | |Dividend income received Â | 287| -| | | | | |Administration fees paid Â | -| (50)| | | | | |Investment management fees paid Â | (431)| (522)| | | | | |Other cash payments Â | (256)| (268)| | +-----------+----------+ |Cash generated from operations Â | 601| 19| | | | | |Â Â | Â | Â | | | | | |Tax recovered Â | -| -| | +-----------+----------+ |Net cash flows from operating activities 17| 601| 19| | +-----------+----------+ |Â Â | Â | Â | | | | | |Cash flows from investing activities Â | Â | Â | | | | | |Purchase of non-current asset investments Â | (4,126)| (3,095)| | | | | |Disposal of non-current asset investments Â | 2,898| 1,264| | | | | |Purchase of current asset investments Â | -| (2,217)| | | | | |Disposal of current asset investments Â | -| 5,017| | +-----------+----------+ |Net cash flows from investing activities Â | (1,228)| 969| | +-----------+----------+ |Â Â | Â | Â | | | | | |Cash flows from financing activities Â | Â | Â | | | | | |Issue of share capital (net of issue costs) Â | 1,671| -| | | | | |Cost of issue of share capital Â | -| (16)| | | | | |Equity dividends paid (net of costs of dividend | | | |reinvestment scheme) Â | (1,743)| (1,739)| | | | | |Purchase of Ordinary shares for cancellation Â | (264)| (192)| | +-----------+----------+ |Net cash flows used in financing activities Â | (336)| (1,947)| | +-----------+----------+ |Â Â | Â | Â | | | | | |Decrease in cash and cash equivalents Â | (963)| (959)| | | | | |Cash and cash equivalents at the start of the year Â | 5,513| 6,472| | | | | |Â Â | Â | Â | | +-----------+----------+ |Cash and cash equivalents at the end of the year 16| 4,550| 5,513| +-------------------------------------------------------+-----------+----------+ Notes to the Financial Statements 1. Accounting policies The following policies refer to the Group and the Company except where noted. References to International Financial Reporting Standards ('IFRS') relate to the Group Financial Statements and UK GAAP relate to the Company Financial Statements. Basis of accounting The Financial Statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') adopted for use in the European Union (and therefore comply with Article 4 of the EU IAS regulation), in the case of the Group, and in accordance with UK GAAP in the case of the Company. Both the Group and the Company Financial Statements also apply the Statement of Recommended Practice: "Financial Statements of Investment Companies and Venture Capital Trusts" ('SORP') issued by the Association of Investment Companies ("AIC") in January 2009, in so far as this does not conflict with IFRS. The Financial Statements have been prepared in accordance with those parts of the Companies Act 2006 applicable to companies reporting under IFRS and UK GAAP. These Financial Statements are presented in Sterling to the nearest thousand. Accounting policies have been applied consistently in current and prior periods. At the balance sheet date, the following International Accounting Standards and interpretations were in issue but not yet effective: * IFRS 7 Financial instruments: Disclosure (effective for annual periods beginning on or after 1 July 2011) * IFRS 9 Financial instruments: Recognition and measurement (effective for annual periods beginning on or after 1 January 2013) * IAS 24 Related party disclosures (effective for annual periods beginning on or after 1 January 2011) * IFRS 10 Consolidated Financial Statements (effective for annual periods beginning on or after 1 January 2013) * IFRS 11 Joint Arrangements (effective for annual periods beginning on or after 1 January 2013) * IFRS 12 Disclosure of Interest in Other Entities (effective for annual periods beginning on or after 1 January 2013) * IFRS 13 Fair Value Measurement (effective for annual periods beginning on or after 1 January 2013) * IFRIC 14 Prepayments of a minimum funding requirement (effective for annual periods beginning on or after 1 January 2011) The above International Accounting Standards and interpretations have not been applied in this Annual Report and Financial Statements and are not expected to have any material impact on the financial statements although some changes may be required to the format of the Financial Statements and disclosures. Basis of consolidation The Group consolidated Financial Statements incorporate the Financial Statements of the Company for the year ended 30 June 2011 and the entities controlled by the Company (its subsidiaries), for the same period. Where necessary, adjustments are made to the Financial Statements of subsidiaries to bring the accounting policies into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation. As permitted by Section 408 of the Companies Act 2006, the Company has not presented its own profit and loss account. The amount of the Company's profit before tax for the year dealt with in the accounts of the Group is Â£1,574,000 (2010: Â£1,586,000). Segmental reporting The Directors are of the opinion that the Group and the Company are engaged in a single operating segment of business, being investment in equity and debt. The Group and the Company report to the Board which acts as the chief operating decision maker. The Group invests in smaller companies principally based in the UK. Business Combinations The acquisition of subsidiaries is accounted for using the purchase method in the Group Financial Statements. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the subsidiaries, plus any costs directly attributable to the business combination. The subsidiary's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 "Business Combinations" are recognised at their fair value at the acquisition date. Estimates The preparation of the Group's and Company's Financial Statements requires estimates, assumptions and judgements to be made, which affect the reported results and balances. Actual outcomes may differ from these estimates, with a consequential impact on the results of future periods. Those estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are those used to determine the fair value of investments at fair value through the profit or loss. The valuation of investments held at fair value through profit or loss or measured in assessing any impairment of loan stocks is determined by using valuation techniques. The Group and the Company use judgements to select a variety of methods and makes assumptions that are mainly based on market conditions at each balance sheet date. Non-current asset investments Quoted and unquoted equity investments, debt issued at a discount, and convertible bonds In accordance with IAS 39 'Financial Instruments: Recognition and Measurement', and FRS 26 'Financial Instruments: Recognition and Measurement', quoted and unquoted equity, debt issued at a discount and convertible bonds are designated as fair value through profit or loss ("FVTPL"). Investments listed on recognised exchanges are valued at the closing bid prices at the end of the accounting period. Unquoted investments' fair value is determined by the Directors in accordance with the 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 on equity investments and gains and losses arising on the disposal of investments are reflected in the capital column of the Statement of comprehensive income 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 terms would allow them to be exercised 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 debt issued at a discount and convertible bonds) is classified as loans and receivables in accordance with IAS 39 and FRS 26 and carried at amortised cost using the Effective Interest Rate method less impairment. Movements in the amortised cost relating to interest income are reflected in the revenue column of the Statement of comprehensive income, and hence are reflected in the revenue reserve, and movements in respect of capital provisions are reflected in the capital column of the Statement of comprehensive income 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 or impaired, the Board considers that the fair value is equal to or greater than the security value of these assets. For unquoted loan stock, the amount of the impairment is the difference between the asset's cost and the present value of estimated future cash flows, discounted at the 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 Group or the Company's policy to exercise control or significant influence over investee companies. Therefore in accordance with the exemptions under IAS 28 "Investments in associates" and FRS 9 "Associates and joint ventures", those undertakings in which the Group or Company holds more than 20 per cent. of the equity are not regarded as associated undertakings. Investment income Quoted and unquoted equity income Dividend income is included in revenue when the investment is quoted ex- dividend. Unquoted loan stock income Fixed returns on non-equity shares and debt securities are recognised on a time apportionment basis using an effective interest rate over the life of the financial instrument. Income which is not capable of being received within a reasonable period of time is reflected in the capital value of the investment. Bank interest income Interest income is recognised on an accruals basis using the rate of interest agreed with the bank. Investment management fees, performance incentive fees and other expenses All expenses have been accounted for on an accruals basis. Expenses are charged through the revenue column of the Statement of comprehensive income, except for management fees and performance incentive fees which are allocated in part to the capital column of the Statement of comprehensive income, to the extent that these relate to the maintenance or 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 Group's investment returns will be in the form of capital gains. Issue costs Issue costs associated with the allotment of share capital have been deducted from the share premium account. Taxation Taxation is applied on a current basis in accordance with IAS 12 "Income taxes" and FRS 16 "Current tax". Taxation associated with capital expenses is applied in accordance with the SORP. Deferred taxation is provided in full on temporary differences and 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. Temporary differences arise from differences between the carrying amounts of assets and liabilities for financial reporting and the amounts used for taxation purposes. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which unused tax losses and credits can be utilised. Dividends In accordance with IAS 10 and FRS 21 "Events after the balance sheet date", dividends are accounted for in the period in which the dividend has been paid or approved by shareholders. Reserves Share premium reserve This reserve accounts for the difference between the price paid for the Company's shares and the nominal value of those 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 Company's distributable reserves are diminished through the repurchase of the Company's own shares for treasury purposes. 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. 2. Profits on investments Â Year ended Year ended 30 June Â 30 June 2011 2010 Â Â£'000 Â£'000 -------------------------------------------------------------------------------- Unrealised (losses)/gains on non-current asset investments held at fair value through profit or loss account (10) 941 Unrealised reversal of impairments/(impairments) on non- current asset investments held at amortised cost 228 (180) ---------------------- Unrealised gains on non-current asset investments 218 761 ---------------------- Realised gains on non-current asset investments held at fair value through profit or loss account 587 552 Realised gains on non-current asset investments held at amortised cost 284 25 Realised gains on current asset investments held at fair value through profit or loss account - 83 ---------------------- Realised gains on current and non-current asset investments 871 660 ---------------------- Â 1,089 1,421 ---------------------- Investments measured at amortised cost are unquoted loan stock investments as described in note 9. 3. Investment income and deposit interest Â Year ended Year ended 30 June 30 June 2011 2010 Â Â£'000 Â£'000 -------------------------------------------------------------------------------- Income recognised on investments held at fair value through profit or loss UK dividend income 287 4 Interest on convertible bonds and debt issued at a discount 18 - ---------------------- Â 305 4 ---------------------- Income recognised on investments held at amortised cost Return on loan stock investments 795 811 Bank deposit interest 57 88 ---------------------- Â 852 899 ---------------------- ---------------------- Â 1,157 903 ---------------------- Interest income earned on impaired investments at 30 June 2011 amounted to Â£47,000 (2010: Â£315,000). These investments are all held at amortised cost. 4. Investment management fees Â Year ended 30 June Year ended 30 June 2011 2010 Â Revenue Capital Total Revenue Capital Total Â Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 --------------------------------------------------------------------- Investment management fee 109 327 436 108 324 432 -------------------------------------------- Further details of the management agreement under which the investment management fee is paid are given in the Directors' report and enhanced business review on pageÂ 21 in the full Annual Report and Financial Statements. 5. Profit before taxation is stated after charging: Â Year ended Year ended 30 June 30 June 2011 2010 Â Â£'000 Â£'000 -------------------------------------------------------------------------------- Directors' remuneration 75 83 National insurance on Directors' remuneration 7 7 Auditor's remuneration: - audit of financial statements (inclusive of VAT) 27 26 - the auditing of accounts of associates of the Company pursuant to legislation (inclusive of VAT)Â 6 6 Other expenses 121 184 ---------------------- Â 236 306 ---------------------- Further information regarding Directors' remuneration can be found in the Directors' remuneration report on pageÂ 29 in the full Annual Report and Financial Statements. 6. Taxation Year ended 30 June Year ended 30 June 2011 2010 Revenue Capital Total Revenue Capital Total Â Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 ------------------------------------------------------------------------------ UK corporation tax (charge)/credit - - - - - - -------------------------------------------- The tax charge for the year shown in the Statement of comprehensive income is lower than the standard rate of corporation tax of 28 per cent. to 31 March 2011 and 26 per cent. from 1 April 2011. (2010: 28 per cent.). The differences are explained below: Â Year ended Year ended 30 June 30 June 2011 2010 Â Â£'000 Â£'000 -------------------------------------------------------------------------------- Profit on ordinary activities before taxation 1,574 1,586 ---------------------- Profit on ordinary activities multiplied by the standard (428) (444) rate of corporation tax (28 per cent. to 31 March 2011: 26 per cent. from 1 April 2011.) Effect of capital gains not subject to taxation 300 398 Effect of income not subject to taxation 79 1 Utilisation of tax losses 49 45 ---------------------- Â - - ---------------------- No provision for deferred tax has been made in the current or prior accounting period. Â The Company and Group have not recognised a deferred tax asset of Â£2,216,000 (2010: Â£1,931,000) in respect of unutilised management expenses and non-trading deficits as it is not considered sufficiently probable that there will be taxable profits against which to utilise these expenses in the foreseeable future. The Group has not recognised a further deferred tax asset of Â£2,415,000 (2010: Â£3,117,000) in respect of unutilised management expenses and deficits arising from non-trading relationships which would only be used if its subsidiaries made significant profits. 7. Dividends Â Â Â Year ended 30 June Â Â Year ended 30 June 2011 2010 Â Â Â Â£'000 Â Â Â£'000 -------------------------------------------------------------------------------- First dividend paid on 6 November 2009 (1.25 pence per share) Â Â - Â Â 905 Second dividend paid on 9 April 2010 (1.25 pence per share) Â Â - Â Â 906 First dividend paid on 30 November 2010 (1.25 pence per share) Â Â 899 Â Â - Second dividend paid on 31 March 2011 (1.25 pence per share) Â Â 920 Â Â - ------------------------ ----------------------- Â Â Â 1,819 Â Â 1,811 ------------------------ ----------------------- In addition to the dividends paid above, the Board has declared a first dividend for the year ending 30 June 2012, of 1.25 pence per Crown Place VCT PLC share (to be paid out of revenue profits). This will be paid on 30 November 2011 to shareholders on the register as at 4 November 2011. The total dividend will be approximately Â£953,000. 8. Basic and diluted return per share Â Year ended 30 June Â Year ended 30 June 2011 2010 Â Revenue Capital Total Revenue Capital Total -------------------------------------------------------------------------------- Return attributable to equity shares (Â£'000) 812 762 1,574 489 1,097 1,586 Weighted average shares (excluding treasury shares) 73,413,178 72,321,482 Return attributable per Ordinary share (pence) (basic and diluted) 1.11 1.04 2.15 0.68 1.52 2.20 The return per share has been calculated excluding treasury shares of 7,260,410 (2010: 7,260,410). 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. 9. Non-current asset investments 30 June 30 June 2011 Â 2010 Â Â£'000 Â£'000 ---------------------------------------------------------------------- Group and Company Qualifying unquoted equity and preference shares 7,141 6,900 Qualifying quoted equity 763 971 Qualifying equity derived instruments - 98 Discounted debt and convertible loan stock 839 - Qualifying unquoted loan stock 12,340 10,862 Non-qualifying quoted equity 8 10 Non-qualifying unquoted loan stock 81 251 -------------------- Â 21,172 19,092 -------------------- -------------------------------------------------------------------------------- Opening valuation as at 1 July 2010 19,092 Purchases at cost 4,916 Disposal proceeds (3,758) Realised gains 871 Movement in loan stock accrued income (167) Unrealised gains 218 -------- Closing valuation as at 30 June 2011 21,172 -------- Movement in loan stock accrued income Opening movement in loan stock accrued income 216 Movement in loan stock accrued income (167) -------- Closing movement in loan stock accrued income 49 -------- Movement in unrealised losses Opening accumulated unrealised losses (6,004) Movement in unrealised gains 218 Transfer of previously unrealised losses to realised reserves on 1,036 disposal -------- Closing accumulated unrealised losses (4,751) -------- Historic cost basis Opening book cost 24,880 Purchases at cost 4,916 Sales at cost (3,922) -------- Closing book cost 25,874 -------- -------------------------------------------------------------------------------- Opening valuation as at 1 July 2009 15,878 Purchases at cost 3,236 Disposal proceeds (1,410) Realised gains 577 Movement in loan stock accrued income 50 Unrealised gains 761 -------- Closing valuation as at 30 June 2010 19,092 -------- Movement in loan stock accrued income Opening movement in loan stock accrued income 128 Interest restructuring 38 Movement in loan stock accrued income 50 -------- Closing movement in loan stock accrued income 216 -------- Movement in unrealised losses Opening accumulated unrealised losses (7,616) Interest restructuring (38) Movement in unrealised gains 761 Transfer of previously unrealised losses to realised reserves on 889 disposal -------- Closing accumulated unrealised losses (6,004) -------- Historic cost basis Opening book cost 23,367 Purchases at cost 3,236 Sales at cost (1,723) -------- Closing book cost 24,880 -------- Non-current asset investments held at fair value through profit or loss total Â£8,751,000 (2010: Â£7,979,000) and include convertible bonds and debt with a carrying value of Â£431,000 at 30 June 2011 which have been re-presented from the amortised cost to fair value category in the accounts having previously been designated at fair value through profit or loss on initial recognition. Â Investments held at amortised cost total Â£12,421,000 (2010: Â£11,113,000). Loan stocks (including those carried at fair value through profit and loss) with a fixed interest rate total Â£13,260,000 (2010: Â£10,953,000). Loan stocks with a floating rate of interest total Â£nil (2010: Â£160,000). The Directors believe that the carrying value of loan stock valued using amortised cost is not materially different to fair value. The Company does not hold any assets as the result of the enforcement of security during the year, 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. Additions and disposal proceeds included in the cash flow statement differ from the amounts shown in the note above, due to deferred consideration and settlement creditors and the restructuring of investments. A schedule of material disposals, repayments and permanent diminution in value which took place in the year is shown on page 14 in the full Annual Report and Financial Statements. Unquoted investments held at fair value through profit or loss are valued in accordance with the IPEVCV guidelines as follows: 30 June 30 June Â 2011 2010 Investment valuation methodology Â£'000 Â£'000 ----------------------------------------------------------------------------- Cost (reviewed for impairment) 1,341 845 Net asset value supported by third party or desktop valuation 1,127 1,722 Recent investment price 697 1,643 Earnings multiple 3,427 2,788 Revenue Multiple 1,388 - ---------------- Â 7,980 6,998 ---------------- The unquoted equity instruments had the following movements between investment methodologies between 30 June 2010 and 30 June 2011: Â Value as at Change in investment valuation 30 June 2011 methodology (2010 to 2011) Â£'000 Explanatory note -------------------------------------------------------------------------------- Recent investment price to 1,026 Industry benchmarks available revenue multiple Cost (reviewed for impairment) to 159 More recent information available recent investment price Cost (reviewed for impairment) to 84 Industry benchmarks available earnings multiple Cost (reviewed for impairment) to 237 Industry benchmarks available revenue multiple Earnings multiple to revenue 99 Temporary trading losses multiple The valuation method used will be the most appropriate valuation methodology for an investment within its market, with regard to the financial health of the investment and the September 2009 IPEVCV Guidelines. The Directors believe that, within these parameters, there are no other possible methods of valuation which would be reasonable as at 30 June 2011. The amended IFRS 7 'Financial Instruments: Disclosures' requires the Company to disclose 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 of valuation method -------------------------------------------------------------------------------- Level 1 Unadjusted quoted (bid) prices applied Level 2 Inputs to valuation are from observable sources and are directly or indirectly derived from prices Level 3 Inputs to valuations are not based on observable market data Quoted AIM investments are valued according to Level 1 valuation methods. Unquoted equity, preference shares, convertible loan stock and debt issued at a discount are all valued according to Level 3 valuation methods. The unquoted investments held at fair value through profit or loss (level 3) had the following movements in the year to 30 June 2011: Â 30 June 2011 30 June 2010 Â£'000 Â£'000 ---------------------------------------------------------------------- Opening balance 6,998 4,924 Additions 1,298 1,325 Disposal proceeds (1,381) (343) Realised gains 545 356 Debt/equity swap - 78 Representation of convertible debt 338 - Unrealised gains on equity investments 182 658 ------------------------------ Closing balance 7,980 6,998 ------------------------------ IFRS 7 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. The valuation methodology applied to 39 per cent. of the unquoted friar value investments (by valuation) is based on third party independent evidence, recent investment price and cost. The Directors believe that changes to reasonable possible alternative input assumptions for the valuation of the remainder of the portfolio would lead to a significant change in the fair value of the portfolio. The impact of these changes could result in an increase in the valuation of the equity investments by Â£760,000 or a decrease in the valuation of equity investments by Â£790,000. 10. Significant interests The principal activity of the Group 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 investee company, it will not take a controlling interest or become involved in the management of a portfolio company. 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 investee companies as at 30 June 2011 as described below: Company Country of Principal activity % class and % total incorporation share type voting rights -------------------------------------------------------------------------------- ELE Advanced Great Britain Manufacturer of 74.3% B 48.3% Technologies precision Ordinary Limited engineering components for the industrial gas turbine, aerospace and automotive markets House of Great Britain Chocolate 33.2% B 23.3% Dorchester Limited manufacturer Ordinary Tuscan Energy Great Britain In administration 42.5% C 1.5% Group Limited* Ordinary Uctal Limited Great Britain TV production 56.7% B 24.2% (formerly Unique company Ordinary/A Communications Preference and Limited) B Preference * Carried at nil as at 30 June 2011. The investments listed above are held as part of an investment portfolio, and their value to the Company is as part of a portfolio of investments. Therefore these investments are not considered to be associated undertakings as permitted by IAS 28 and FRS 9. 11. Investments in subsidiary undertakings Â 30 June 2011 Â CP1 VCT PLC CP2 VCT PLC Total Â Â£'000 Â£'000 Â£'000 ------------------------------------------------------------------------ Carrying value as at 1 July 2010 6,572 8,441 15,013 Movement in subsidiary net assets 650 781 1,431 ------------------------------------- Carrying value as at 30 June 2011 7,222 9,222 16,444 ------------------------------------- Â 30 June 2010 Â CP1 VCT PLC CP2 VCT PLC Total Â Â£'000 Â£'000 Â£'000 ------------------------------------------------------------------------ Carrying value as at 1 July 2009 6,636 8,513 15,149 Movement in subsidiary net assets (64) (72) (136) ------------------------------------- Carrying value as at 30 June 2010 6,572 8,441 15,013 ------------------------------------- The subsidiary companies currently hold cash and intercompany balances. Both CP1 VCT PLC and CP2 VCT PLC are wholly owned by Crown Place VCT PLC as follows: Â 30 June 2011 Â CP1 VCT PLC CP2 VCT PLC ----------------------------------------------------------------------------- Nominal value of shares held Â£6,382,746 Â£8,219,350 Percentage of authorised share capital in issue 57.8% 59.8% Percentage of total voting rights held 100% 100% Â 30 June 2010 Â CP1 VCT PLC CP2 VCT PLC ----------------------------------------------------------------------------- Nominal value of shares held Â£6,382,746 Â£8,219,350 Percentage of authorised share capital in issue 57.8% 59.8% Percentage of total voting rights held 100% 100% 12. Trade and other receivables/debtors: Â 30 June 2011 30 June 2010 Â Group Company Group Company Â Â£'000 Â£'000 Â£'000 Â£'000 -------------------------------------------------------------------------------- Trade and other receivables/debtors less than one year 102 102 68 68 Trade and other receivables/debtors greater than one year 80 80 - - ---------------------------- Â 182 182 68 68 ---------------------------- 13. Trade and other payables/creditors 30 June 2011 30 June 2010 Â Group Company Group Company Â Â£'000 Â£'000 Â£'000 Â£'000 ---------------------------------------------------------------------------- Amounts falling due within one year: Amounts due to subsidiary undertakings - 16,166 - 14,940 Other payables 53 53 161 161 Accruals 190 175 99 59 ------------------------------------ Â 243 16,394 260 15,160 ------------------------------------ 14. Called up share capital Â 30 June 30 June 2011 2010 Â£'000 Â£'000 ---------------------------------------------------------------------------- Authorised 140,000,000 Ordinary shares of 10p each (2010: 140,000,000) 14,000 14,000 ---------------- Allotted, called up and fully paid 83,509,177 Ordinary shares of 10p each (2010: 79,177,624) 8,350 7,918 ---------------- Allotted, called up and fully paid excluding treasury shares 76,248,767 Ordinary shares of 10p each (2010: 71,917,214) The Company repurchased for cancellation 861,875 (2010: 697,446) Ordinary shares during the year at a total cost of Â£252,000 (2010: Â£205,000) representing 1.2 per cent. of the shares in issue as at 1 July 2010. The shares purchased for cancellation were funded from the special reserve. The total number of shares held in treasury as at 30 June 2011 was 7,260,410 (2010: 7,260,410) representing 8.7 per cent. of the shares in issue as at 30 June 2011. Under the terms of the Dividend Reinvestment Scheme Circular dated 26 February 2009, the following Ordinary shares of nominal value 10 pence were allotted during the year: Â Â Aggregate Â Â Opening mid Â Â nominal value Issue Net market price Â Number of of shares price per consideration per share on Allotment shares Â£'000 share received allotment date allotted pence per Â£'000 pence per share share 30 November 2010 107,925 11 33.80 36 29.00 31 March 2011 115,328 12 33.43 38 30.00 ---------------------------- ------------------ Â 223,253 23 Â 74 ---------------------------- ------------------ Under the terms of the Albion VCTs Linked Top Up Offer (which closed on 16 May 2011), the following Ordinary shares of nominal value 10 pence were issued during the year; Â Â Aggregate Â Â Opening mid Â Â nominal value Issue Net market price Â Number of of shares price consideration per share on Allotment shares Â£'000 per received allotment date allotted share Â£'000 pence per pence share per share 7 January 1,828,380 182 35.80 619 28.50 2011 22 March 2011 1,833,102 183 35.40 614 30.00 5 April 2011 1,204,732 120 35.40 404 29.00 16 May 2011 103,961 11 34.90 34 29.00 ----------------------------- ------------------ Â 4,970,175 496 Â 1,671 ----------------------------- ------------------ 15. Basic and diluted net asset value per Ordinary share The Group and Company net asset value attributable to the Ordinary shares at the year end was as follows: 30 June 30 June Â Â Â 2011 2010 ---------------------------------------------------------------------------- Net asset value per share attributable (pence) Â Â 33.65 33.94 -------------------- The net asset value per share at the year end is calculated in accordance with the Articles of Association and is based upon total shares in issue (less treasury shares) of 76,248,767 shares (2010: 71,917,214) as at 30 June 2011. There are no convertible instruments, derivatives or contingent share agreements in issue. The Company's policy is to sell treasury shares at a price greater than the purchase price hence the net asset value per share on a diluted basis would be equal to or greater than the basic net asset value per share, depending on the actual price achieved for selling the treasury shares. 16. Analysis of changes in cash during the year 30 June 2011 30 June 2010 Â Group Company Group Company Â Â£'000 Â£'000 Â£'000 Â£'000 --------------------------------------------------------------- Opening cash balances 5,513 5,400 6,255 6,472 Net cash flow (963)Â (1,143)Â (742)Â (1,072) ---------------------------------------- Closng cash balances 4,550 4,257 5,513 5,400 ---------------------------------------- 17. Reconciliation of revenue return on ordinary activities before taxation to net cash flow from operating activities Year ended Year ended 30 June Â 30 June Â 2011 2010 Â Â Â Â£'000 Â£'000 -------------------------------------------------------------------------------- Revenue return before tax Â Â 812 489 Capitalised expenses Â Â (327) (324) Decrease/(increase) in accrued amortised loan stock interest Â Â 132 (50) (Increase)/decrease in receivables Â Â (3) 7 (Increase) in payables Â Â (13) (103) -------------------------- Net cash flow from operating activities Â Â 601 19 -------------------------- 18. Capital and financial instruments risk management The following policies are with reference to both the Company and the Group except where the 'Company' is used below. The Group's maximum permitted gearing is Â£24,708,000 (2010: Â£23,514,000) and as at 30 June 2011, the Group's gearing was nil (2010: nil). The Group's policy on gearing is described in more detail on page 18 of the Directors' report and enhanced business review within the full Annual Report and Financial Statements. The Group's capital comprises Ordinary shares as described in note 14. The Company is permitted to buy back its own shares for cancellation or treasury purposes, and this is described in more detail on page 23 of the Directors' report and enhanced business review within the full Annual Report and Financial Statements. The Group's financial instruments comprise equity and loan stock investments in unquoted companies, equity in AIM quoted companies, cash balances, debtors and creditors which arise from its operations. The main purpose of these financial instruments is to generate revenue and capital appreciation for the Group's operations. The Group has no gearing or other financial liabilities apart from short term creditors. The Group does not use any derivatives for the management of its balance sheet. The principal risks arising from the Group'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 Group 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 as follows: Investment risk As a venture capital trust, it is the Group's specific nature to evaluate and control the investment risk of its portfolio in unquoted and in quoted companies, details of which are shown on page 11 of the full Annual Report and Financial Statements. Investment risk is the exposure of the Group to the revaluation and devaluation of investments. The main driver of investment risk is the operational and financial performance of the investee companies and the dynamics of market quoted comparators. The Manager receives management accounts from investee companies, and members of the investment management team often sit on the boards of unquoted investee companies; this enables the close identification, monitoring and management of investment risk. The Manager and the Board formally reviews 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 Group 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 non-current and current asset investment portfolio which is Â£21,172,000 (2010: Â£19,092,000). Non-current and current asset investments form 83 per cent. of the net asset value as at 30 June 2011 (2010: 78 per cent.). More details regarding the classification of non-current investments are shown in note 9. Investment price risk Investment price risk is the risk that the fair value of future investment cash flows will fluctuatedue to factors specific to an investment instrument or to a market in similar instruments. To mitigate the investment price risk for the Group as a whole, the strategy of the Group 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 11 of the full Annual Report and Financial Statements and in the Manager's report. The valuation method used will be the most appropriate valuation methodology for an investment within its market, with regard to the financial health of the investment and the September 2009 IPEVCV Guidelines. As required under IFRS 7 and FRS 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 non-current and current 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. (2010: 10per cent.) increase or decrease in the valuation of the non-current and current asset investments (keeping all other variables constant) would increase or decrease the net asset value and return for the year by Â£2,117,200 (2010: Â£1,909,000). Cash flow interest rate risk It is the Group'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 Group's analysis, it is estimated that a rise of half a percentage point in all interest rates would have increased total return before tax for the year by approximately Â£19,000. On the basis of the Company's analysis, it is considered that further falls in interest rates would not have a significant impact. The weighted average interest rate applied to the Group's fixed rate assets during the year was approximately 5.6 per cent. (2010: 6.3 per cent.). The weighted average period to maturity for the fixed rate assets is approximately 2.5 years (2010: 2.7 years). The Group's financial assets and liabilities as at 30 June 2011, all denominated in pounds sterling, consist of the following: Â 30 June 2011 30 June 2010 Fixed Floating Non- Fixed Floating Non- rate rate interest Total rate rate interest Total Â Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 -------------------------------------------------------------------------------- Unquoted loan stock (including convertible loan stock and discounted bonds) 13,260 - - 13,260 10,953 160 - 11,113 Unquoted equity - - 7,141 7,141 - - 6,998 6,998 Quoted equity - - 771 771 - - 981 981 Receivables - - 182 182 - - 68 68 Payables - - (243) (243) - - (260) (260) Cash - 4,550 - 4,550 - 5,513 - 5,513 -------------------------------------------------------------------- Net assets 13,260 4,550 7,851 25,661 10,953 5,673 7,787 24,413 -------------------------------------------------------------------- The Company's financial assets and liabilities as at 30 June 2011, all denominated in pounds sterling, consist of the following: Â 30 June 2011 30 June 2010 Fixed Floating Non- Fixed Floating Non- rate rate interest Total rate rate interest Total Â Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 ----------------------------------------------------------------------------------- Unquoted loan stock (including convertible loan stock and discounted bonds) 13,260 - - 13,260 10,953 160 - 11,113 Unquoted equity - - 23,585 23,585 - - 22,011 22,011 Quoted equity - - 771 771 - - 981 981 Debtors - - 182 182 - - 68 68 Current liabilities (16,166) - (228) (16,394) (14,940) - (220) (15,160) Cash - 4,257 - 4,257 - 5,400 - 5,400 ------------------------------------------------------------------------ Net assets (2,906) 4,257 24,310 25,661 (3,987) 5,560 22,840 24,413 ------------------------------------------------------------------------ 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 Group. The Group is exposed to credit risk through its debtors, investment in unquoted loan stock, and cash on deposit with banks. The Manager evaluates credit risk on loan stock and other similar instruments 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 investee company in order to mitigate the gross credit risk. The Manager receives management accounts from investee companies, and members of the investment management team often sit on the boards of unquoted investee companies; this enables the close identification, monitoring and management of investment-specific credit risk. Bank deposits are held with banks which have a Moody's credit rating of at least 'A'. The Group has an informal policy of limiting counterparty banking exposure to a maximum of 20 per cent. of net asset value for any one counterparty. The Manager and the Board formally review credit risk (including receivables) and other risks, both at the time of initial investment and at quarterly Board meetings. The Group's total gross credit risk at 30 June 2011 was limited to Â£13,260,000 (2010: Â£11,113,000) of unquoted loan stock instruments and Â£4,550,000 (2010: Â£5,513,000) of cash deposits with banks. As at the balance sheet date, the cash held by the Group is held with the Royal Bank of Scotland plc, Lloyds TSB Bank Plc, Scottish Widows Bank plc and Standard Life Cash Savings (part of Barclays 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 cost, impairment and carrying value of impaired loan stocks at 30 June 2011 and 30 June 2010 are as follows: Â 30 June 2011 30 June 2010 Â Cost Impairment Carrying value Cost Impairment Carrying value Â Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 -------------------------------------------------------------------------------- Impaired loan 3,040 (1,403) 1,637 6,875 (1,702) 5,173 stock ---------------------------------------------------------------- Impaired loan stock instruments have a first fixed charge or a fixed and floating charge over the assets of the investee company and the Board estimate that the security value approximates to the carrying value. Liquidity risk Liquid assets are held as cash on current account and cash on deposit or short term money market account. Under the terms of its Articles, the Group has the ability to borrow up to the amount of its adjusted capital and reserves of the latest published audited consolidated balance sheet, which amounts to Â£24,708,000 (2010: Â£23,514,00) as at 30 June 2011. The Group has no committed borrowing facilities as at 30 June 2011 (2010: nil) and had cash balances of Â£4,550,000 (2010: Â£5,513,000) (Company Â£4,257,000; 2010: Â£5,400,000). Â The main cash outflows are for new investments, dividends and share buy backs, which are within the control of the Group. The Manager formally reviews the cash requirements of the Group on a monthly basis, and the Board on a quarterly basis, as part of its review of management accounts and forecasts. All of the Group's financial liabilities are short term in nature and total Â£243,000 (2010: Â£260,000) for the year to 30 June 2011 (Company: 30 June 2011; Â£16,394,000; 30 June 2010: Â£15,160,000). An amount of Â£16,166,000 (2010: Â£14,940,000) which is included within the Company's creditors, relates to intercompany balances and is not considered to carry liquidity risk. The carrying value of loan stock investments at 30 June 2011, is analysed by expected maturity dates as follows: Fully performing loan Past due Impaired Renegotiated loan stock loan stock* loan stock stock Total Redemption date Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 -------------------------------------------------------------------------------- Less than one 813 360 364 year 171 1,708 1-2 years 881 3,805 - - 4,686 2-3 years 419 705 179 316 1,619 3-5 years 3,461 439 1,098 129 5,127 More than 5 120 - - years - 120 ---------------------------------------------------------------- Â 4,932 5,882 1,637 809 13,260 ---------------------------------------------------------------- The carrying value of loan stock investments at 30 June 2010, is analysed by expected maturity dates as follows: Fully performing loan Past due Impaired stock loan stock* loan stock Renegotiated loan Total Redemption date Â£'000 Â£'000 Â£'000 stock Â£'000 Â£'000 -------------------------------------------------------------------------------- Less than one - 219 - year 385 604 1-2 years 1,679 - 1,002 - 2,681 2-3 years 345 1,081 2,541 - 3,967 3-5 years 1,823 627 1,284 - 3,734 More than 5 - 127 - years - 127 ---------------------------------------------------------------- Â 4,232 1,708 5,173 - 11,113 ---------------------------------------------------------------- *Of the loan stock categorised as past due, 100 per cent. (2010: 76 per cent.) is in respect of loan stocks where interest and capital arrangements have been temporarily changed through discussions with the Manager. Loan stocks can be past due as a result of interest or capital not being paid in accordance with contractual terms. The average annual Â interest yield on the total cost of past due loan stocks is 6 per cent.. Loan stock with a carrying value of Â£600,000 had loan stock interest past due of less than 12 months. Loan stock with a carrying value of Â£4,891,000 had loan stock interest past due greater than 12 months. Loan stockwith a carrying value of Â£391,000 had capital past due up to 8 months. Interest on this loan stock was received at a rate of 14.17 per cent. in accordance with agreed contractual terms. In view of the availability of adequate cash balances and the repayment profile of loan stock investments, the Board considers that the Group is subject to low liquidity risk. Fair values of financial assets and financial liabilities All the Group's financial assets and liabilities as at 30 June 2011 are stated at fair value as determined by the Directors, with the exception of loans and receivables (excluding debt and convertible loan stock) included within investments, which are carried at amortised cost, as permitted by IAS 39. In the opinion of the Directors, the amortised cost of loan stock is not materially different to the fair value of the loan stock. There are no financial liabilities other than short term trade and other payables. The Group'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, and that the Group is subject to low financial risk as a result of having nil gearing and positive cash balances. 19. Post balance sheet events Since 30 June 2011 the Company has completed the following material transactions: * Investment of Â£54,000 in Helveta Limited completed in July 2011 * Investment of Â£28,000 in Rostima Holdings Limited completed in July 2011 * Investment of Â£147,000 in Oakland Care Centre Limited completed in July and August 2011 * Investment of Â£141,000 in Alto Prodotto Limited completed in August 2011 * Investment of Â£44,000 in The Stanwell Hotel Limited completed in August 2011 20. Contingencies, guarantees and financial commitments There were no contingencies for, or guarantees by, the Group or Company as at 30 June 2011 (2010: nil). As at 30 June 2011 Crown Place VCT PLC had the following financial commitments: * Â£95,000 for Regenerco Renewable Energy Limited * Â£570,000 to the Oakland Care Centre Limited * Â£100,000 to the Stanwell Hotel Limited 21. Related party transactions The Manager, Albion Ventures LLP, could be considered to be a related party by virtue of the fact that it is party to a management agreement with the Company (details disclosed on page 21 of the full Annual Report and Financial Statements). During the year, services of a total value of Â£486,000 (2010: Â£482,000) were purchased by the Company from Albion Ventures LLP; this includes Â£436,000 investment management fee and Â£50,000 administration fee. At the financial year end, the amount due to Albion Ventures LLP disclosed as accruals and deferred income was Â£124,000 (2010: Â£118,000). Albion Ventures LLP holds 1,256 Ordinary shares as a result of fractional entitlements arising on the merger of Crown Place VCT PLC, CP1 VCT PLC and CP2 VCT PLC on 13 January 2006. During the year the Company raised new funds through the Albion VCTs Linked Top Up Offer as detailed in note 14. The total cost of the issue of these shares was 5.5per cent. of the sums subscribed. Of these costs, an amount of Â£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 the year end. 22. Principal risks and uncertainties In addition to the current economic risks outlined in the Chairman's statement, 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 reduce 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 their strong track record for investing in this segment of the market. The Company's policy is to lower investment risk by investing part of the portfolio in asset-based businesses and taking a first charge over the relevant assets. 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 all non-executive Directors 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, and is 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 advisers. 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 the Auditor, 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 and Risk committee meets with the Manager's internal auditors, Littlejohn LLP, when required, receiving a report regarding the last formal internal audit performed on the Manager, and providing the opportunity for the Audit and Risk committee to ask specific and detailed questions. During the year the Board has met with the internal audit partner of Littlejohn LLP to discuss the most recent internal audit report completed 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 Group's internal controls through the implementation of the Turnbull guidance are detailed on page 27 in 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. 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 more detail, see the management agreement paragraph on page 21 in the full Annual Report and Financial Statements). 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 18 to the Financial Statements. All of the Group's income and expenditure is denominated in sterling and hence the Group has no foreign currency risk. The Group is financed through equity and does not have any borrowings. The Group does not use derivative financial instruments. 23. 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 periods ended 30 June 2011 and 30 June 2010, and is derivedÂ from theÂ statutory accounts for those financial years, which have been, or in the case of the accounts for the year ended 30 June 2011, which will be, delivered to the Registrar of Companies. The Auditors reported on those accounts; their reports were unqualified and did not contain a statement under s498 (2) or (3) of the Companies Act 2006. The Company'sÂ Annual General Meeting will be held at The City of London Club, 19 Old Broad Street, London, EC2N 1DS on 9 November 2011 at 12 noon. 24. Publication Â The full audited Annual Report and Financial StatementsÂ 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 atÂ www.albion-ventures.co.ukÂ under the 'Our Funds' section, by clicking on Crown Place VCT PLC', where the Report can be accessed as a PDF document via a link under the 'Investor Centre' in the 'Financial Reports and Circulars' section. Investment portfolio by sector at 30 June 2011: http://hugin.info/141806/R/1553504/478820.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: Crown Place VCT PLC via Thomson Reuters ONE [HUG#1553504]

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