Crown Place VCT PLC: 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 2015.

This announcement was approved for release by the Board of Directors on 13 October 2015.

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 2015 (which have been audited) at: www.albion-ventures.co.uk by clicking on 'Our Funds' and then 'Crown Place VCT PLC'. The Annual Report and Financial Statements for the year to 30 June 2015 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 objective

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

Record date for first dividend	6  November 2015
Annual General Meeting	11.00 am on 12 November 2015
Payment of first dividend	30 November 2015
Announcement of half-yearly results for the six months ended 31 December 2015	February 2016
Payment of second dividend (subject to Board approval)	31 March 2016

Financial highlights

31.0p	Net asset value per share as at 30 June 2015
1.4p	Total return per share to shareholders for the year ended 30 June 2015
4.5%	Net asset value total return for the year
2.5p	Total tax-free dividends per share paid during the year ended 30 June 2015
8.4%	Tax-free dividend yield on share price (dividend per annum/share price as at 30 June 2015)

	30 June 2015	30 June 2014
	pence per share	pence per share
Opening net asset value	32.04	32.26
Revenue return	0.73	0.61
Capital return	0.67	1.67
Total return	1.40	2.28
Dividends paid	(2.50)	(2.50)
Impact from issue of share capital	0.03	-
Closing net asset value	30.97	32.04

Shareholder returns and shareholder value

			Crown Place VCT PLC*
			pence per share
Shareholder return from launch to April 2005 (date that Albion Ventures was appointed investment manager):
Total dividends paid to 6 April 2005 (i)			24.93
Decrease in net asset value			(56.60)
Total shareholder return to 6 April 2005			(31.67)
Shareholder return from April 2005 to 30 June 2015:
Total dividends paid			24.30
Decrease in net asset value			(12.43)
Total shareholder return from April 2005 to 30 June 2015			11.87
Shareholder value since launch:
Total dividends paid to 30 June 2015 (i)			49.23
Net asset value as at 30 June 2015			30.97
Total shareholder value as at 30 June 2015			80.20
Current annual dividend objective			2.50
Dividend yield on net asset value as at 30 June 2015			8.1%

Notes
(i) 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.
* Formerly Murray VCT 3 PLC

The above financial summary is for the Company, Crown Place VCT PLC only. Details of the financial performance of CP1 VCT PLC (previously Murray VCT PLC) and CP2 VCT PLC (previously Murray VCT 2 PLC), which have been merged into the Company, can be found on page 62 of the full Annual Report and Financial Statements.

Total shareholder value since launch:

		30 June 2015 (pence per share)
Total dividends paid during the period from launch to 6 April 2005 (prior to change of manager)		24.93
Total dividends paid during:
the year ended 28 February 2006	1.00
the period ended 30 June 2007*	3.30
the year ended 30 June 2008	2.50
the year ended 30 June 2009	2.50
the year ended 30 June 2010	2.50
the year ended 30 June 2011	2.50
the year ended 30 June 2012	2.50
the year ended 30 June 2013	2.50
the year ended 30 June 2014	2.50
the year ended 30 June 2015	2.50
Total dividends paid to 30 June 2015		49.23
Net asset value as at 30 June 2015		30.97
Total shareholder value as at 30 June 2015		80.20

*16 month period

In addition to the dividends paid above, the Board has declared a first dividend for the year ending 30 June 2016, of 1.25 pence per Crown Place VCT PLC share, payable on 30 November 2015 to shareholders on the register as at 6 November 2015.

Chairman's statement

Introduction
I present the results for Crown Place VCT PLC for the year ended 30 June 2015. The Group achieved a total return of 1.40 pence per share (4.5 per cent. on average NAV for the year), compared to 2.28 pence per share in the previous year (7.1 per cent.). Whilst the Company has delivered a positive return to shareholders for each of the past six years, the total return for the period was lower than that achieved the previous year and was impacted by write-downs in certain of the Company's higher risk growth investments.  Nevertheless, the Company has maintained its regular tax free dividend of 2.50 pence per share for the eighth consecutive year. This represents a yield of 8.4 per cent. based on the share price as at 30 June 2015 of 29.75 pence per share. 

Results and dividends
As at 30 June 2015, the net asset value was £33.0 million or 30.97 pence per share compared to £29.0 million or 32.04 pence per share at 30 June 2014. The revenue return before taxation was £700,000 compared to £525,000 in the previous year. This increase is due to higher income from investments, reflecting the new asset based investments made during the year. The ongoing charges ratio for the year reduced marginally to 2.6 per cent. (2014: 2.7 per cent.).

During the year, the Company's realised and unrealised capital gains amounted to £1,036,000 compared to £1,812,000 in the previous year, with  the unquoted asset-based investments performing well and accounting for over 100 per cent. of the gains. These were offset by write downs in parts of the unquoted growth investment portfolio. Further detail of the Company's financial performance is given in the Strategic report.

The Board has declared a first dividend for the year ending 30 June 2016 of 1.25 pence per share, payable on 30 November 2015 to shareholders on the register as at 6 November 2015.

Investment performance
Overall, the UK economic environment remained favourable during the year with particularly strong activity in the property sector.  This benefited the valuations of the asset-based investments, in particular those in the healthcare and education sectors but also the London based health clubs.  The historically low level of interest rates contributed to the increase in valuations, in particular in the renewable energy sector where the Company's investments benefit from secure long term income streams. We capitalised on these favourable market conditions by exiting some of our mature asset-based investments and reinvesting into new opportunities.  The sale of Oakland Care Centre Limited generated a return of 2.0 times cost over the four year holding period, while the sale of Orchard Portman Group Limited and Tower Bridge Healthclubs Limited generated returns of 1.6 times and 2.7 times investment cost respectively.  Together with loan stock repayments, the Company achieved disposal proceeds of £7,364,000 compared to £1,188,000 in the previous year.  Further detail of realisations is given on page 19 of the full Annual Report and Financial Statements.

During the year, your Company continued to benefit from a strong investment pipeline which more than doubled the investment rate compared to the previous year.  £7,060,000 was invested in new and existing portfolio companies compared to £2,539,000 in the previous year. New investments included Shinfield Lodge Care Limited (£900,000), a residential care home development near Reading; Exco Intouch Limited (£290,000), a healthcare technology company; and OmPrompt Holdings Limited (£100,000), an enterprise software provider.  £2,037,000 was invested in Chonais River Hydro Limited and Gharagain River Hydro Limited to fund the construction of the assets; £1,008,000 was invested in Radnor House School (Holdings) Limited to support the acquisition of an independent school in Kent; and £690,000 was invested in Active Lives Care Limited and Ryefield Court Care Limited to fund the construction of care homes.  The Company's committed investment programme as at 30 June 2015 was £3 million, of which £2.4 million is in relation to the three residential care home developments mentioned above.

Overall, the value of the Company's unquoted investment portfolio, excluding investments disposed of, increased by £907,000 during the year, driven by the asset-based investments, while that of the small AIM portfolio fell by £79,000.

Amongst the unquoted investments, Radnor House School (Holdings) Limited continues to make good progress.  The acquisition of Combe Bank School near Sevenoaks, Kent completed in March 2015 and early signs are positive.  The renewable energy investments are also performing well, with the two hydroelectricity investments generating electricity ahead of forecast.  Construction is progressing on the three care homes, which are due to open in the first half of 2016. Following the year end, a number of offers have been received for Kensington Health Club.  In the growth portfolio, Masters Pharmaceuticals and Hilson Moran are growing profitably, while many of the technology investments are making good progress in expanding their businesses.  The largest negative valuation movements over the period were Rostima, which reduced by £367,000 and Lowcosttravelgroup, which reduced by £351,000. Trading at Lowcosttravelgroup, an online travel business, is slower than anticipated. Rostima, a company in which we invested in 2007, provides staff rostering software for international ports and although a leader in its field, has had difficulties penetrating a complex market and the investment is now largely written off.

Risks and uncertainties
The UK economic climate remains favourable, though a number of risks remain, especially from external economic factors.  The Company's investment portfolio is well diversified and many of the sectors in which its portfolio companies operate are resilient.  Approximately two-thirds of the unquoted portfolio is invested in companies with tangible assets, which support their valuation.  The majority of the companies in the portfolio operate in growing markets, many with a global dimension. It remains the Company's general policy that portfolio companies should have no external bank borrowings, which reduces financial risk.  Therefore, as the investment portfolio continues to mature, the prospects overall look positive.  A detailed review of risk management is set out in the Strategic report.

Changes in VCT legislation
The July budget introduced a number of changes to VCT legislation, including restrictions over the age of investments, a prohibition on management buyouts or the purchase of existing businesses and an overall lifetime investment cap of £12m from tax-advantaged funds into any portfolio company. While these changes are significant, the Company has been advised that had they been in place previously they would have affected only a relatively small minority of the investments that we have made into new portfolio companies over recent years. The Board's current view is that there will be no material change in our investment policy as a result. However, the legislation is still being worked on and we will have a more detailed view of its effect after Royal Assent, expected, at the latest, in November 2015.

Albion VCTs Prospectus Top Up Offers 2014/2015
The Albion VCTs Prospectus Top Up Offers 2014/2015 launched on 17 November 2014.  Under the Offer the Company raised £4,271,000 for the tax year to 5 April 2015 and a further £1,271,000 for the tax year to 5 April 2016. The proceeds of the Offer have been used to provide further resources to the Company at a time when a number of attractive new investment opportunities are being seen.

Further Top Up Offers are planned for later this year and details are expected to be sent to shareholders in November 2015.

Dividend re-investment scheme
During the year, the Company raised £255,000 from the dividend re-investment scheme. Through the scheme, shareholders may elect to reinvest the whole of the dividend received by subscribing for new shares in the Company. Under current tax rules, shareholders re-investing their dividends will be eligible for the income and capital gains tax advantages available to investors subscribing for new shares in venture capital trusts and will be able to increase their shareholding in the Company, without incurring dealing costs or stamp duty. Full details of the scheme and the application form are available on the Manager's website at: www.albion-ventures.co.uk/ourfunds/CRWN.

Board composition
Karen Brade was appointed Chair of the Audit and Risk Committee on 1 December 2014. In addition, following a formal and competitive recruitment process, Penny Freer was appointed to the Board on 31 October 2014.  Penny's biography is shown on page 15 of the full Annual Report and Financial Statements. Her broad experience in investment banking will bring a valuable added perspective to the Board.

Having served on the Board for over 9 years, Rachel Beagles has decided to retire at the forthcoming Annual General Meeting. I would like to thank Rachel for her contribution to the Company as an independent director during this period and as Chair of the Audit and Risk Committee from 2010 to 2014 and as Senior Independent Director.  I am pleased to announce that after a rigorous recruitment process, James Agnew will be joining the Board on 1 November 2015. James has extensive experience in investment banking and private equity fund management and is currently a partner at Harwood Private Equity.

Outlook
The economic environment in the UK remains favourable for smaller companies.  While many companies are finding it easier than in the recent past to obtain funding from traditional sources, your Company continues to find attractive investment opportunities, especially in sectors such as healthcare, education and technology, where the Manager has many years of investment experience, expertise and well established relationships.  

Richard Huntingford
Chairman
13 October 2015

Strategic report

Investment objective and policy
The Company's investment objective is to achieve long term capital and income growth principally through investment in smaller unquoted companies in the United Kingdom. The Company's investment portfolio is structured to provide a balance between income and capital growth for the longer term through a diversified, balanced approach to investment. The asset-based portfolio, which currently accounts for about two-thirds of investments, is designed to provide stability and income whilst maintaining the potential for capital growth. The growth portfolio is intended to provide diversified exposure through its portfolio of investments in predominately unquoted UK companies. In neither category do portfolio companies normally have any external borrowing with a charge ranking ahead of the Company.

Business model
The Company operates as a Venture Capital Trust. This means that the Company has no employees other than its Directors and has outsourced the management of all its operations to Albion Ventures LLP, including secretarial and administrative services. Further details of the Management agreement can be found below.

Current  and future portfolio sector allocation
The pie chart at the end of this annoucement shows the split of the portfolio valuation by industrial or commercial sector as at 30 June 2015. The portfolio remains well diversified and as at the year end comprised 55 investments. There were 24 unquoted asset-based investments accounting for 56 per cent. of the net asset value of the Company, 28 unquoted growth investments accounting for 28 per cent. of the net asset value of the Company and 3 AIM quoted investments, accounting for 2 per cent. of the net asset value of the Company.

Overall, the direction of the portfolio remained unchanged in the past financial year.  The Company continued to increase its exposure to the less cyclical healthcare, education and renewable energy sectors which now account for approximately 45 per cent. of the portfolio value.

Looking ahead, the healthcare sector will continue to be a core area of investment, both in asset-based businesses such as care homes, and in medical technology. It is not envisaged to increase the number of investments in the renewable energy portfolio though the revenue generated by the portfolio will continue to increase, as some of the projects are yet to make a full year's income contribution. Investment in education, in the form of Radnor House School, is expected to grow through the recent acquisition of Combe Bank School and, in time, through further acquisitions.  In addition, a number of the IT companies in the portfolio have good growth prospects and the Company expects to continue supporting them, as required.

Results and dividend policy

	£'000
Consolidated revenue return for the year ended 30 June 2015	700
Consolidated capital return for the year ended 30 June 2015	639
Dividend of 1.25p per share paid on 28 November 2014	(1,142)
Dividend of 1.25p per share paid on 31 March 2015	(1,195)
Transferred to reserves	(998)
Net assets as at 30 June 2015	33,081
Net asset value as at 30 June 2015 (pence per share)	30.97

The Company paid dividends totalling 2.50 pence per share during the year ended 30 June 2015 (2014: 2.50 pence per share). The dividend objective of the Board is to provide Shareholders with a strong, predictable dividend flow, with a dividend target of 2.50 pence per share per year.

The Board has declared a first dividend for the year ending 30 June 2016 of 1.25 pence per share. This dividend will be paid on 30 November 2015 to shareholders on the register as at 6 November 2015.

As shown in the Consolidated statement of comprehensive income, investment income has increased to £1,105,000 (2014: £925,000), resulting in an increase of revenue return to £700,000 (2014: £525,000). The capital return for the year was a profit of £639,000 (2014: £1,451,000), as a result of net realised gains on disposal of investments, net unrealised gains on investments in particular Kensington Health Club and Radnor House School, unrealised losses on investments in particular Lowcosttravelgroup and Rostima, partially offset by management fees charged to capital. The total return for the year was 1.40 pence per share (2014: 2.28 pence per share).

The Consolidated balance sheet, shows that the net asset value has decreased over the year to 30.97 pence per share (2014: 32.04 pence per share), due to the payment of the dividend of 2.50 pence per share during the year, partially offset by the total return for the year of 1.40 pence per share.

The consolidated cash flow for the business has been a net inflow of £2,540,000 for the year (2014: outflow £1,314,000), reflecting cash inflows from operations, disposal proceeds and the issue of Ordinary shares under the Albion VCTs Top Up Offers, offset by dividends paid, new investments in the year and the buy-back of shares.

Review of the business
A review of the Company's business during the year is set out in the Chairman's statement.

The Directors do not foresee any major changes in the activity undertaken by the Company in the current year and have outlined their thoughts on the direction of the portfolio above. The Company continues with its objective to invest in unquoted companies throughout the United Kingdom with a view to providing both capital growth and a reliable dividend income to shareholders over the longer term.

Details of significant events which have occurred since the end of the financial year are listed in note 19. Details of transactions with the Manager are shown in note 4. The subsidiary undertakings affecting the profits and net assets of the Group in the year are listed in note 11 to the Financial Statements.

Update on CP2 VCT PLC
CP2 VCT PLC is a wholly-owned subsidiary of the Company. CP2 VCT PLC transferred its business to Crown Place VCT PLC and ceased trading with effect from the date of merger on 12 January 2006. Since then, CP2 VCT PLC has had no further business other than to hold cash and intercompany balances. CP2 VCT PLC had significant tax losses which have been utilised by the Company through group relief. However, as the tax losses are nearly depleted, it is now the intention of the Directors to liquidate CP2 VCT PLC within a period of at least twelve months from the date on which these financial statements are approved. For this reason, the accounts of CP2 VCT PLC have not adopted a going concern basis of preparation. 

Future prospects
The key drivers for returns within the portfolio are those sectors that have exposure to longer term growth trends. These include healthcare in an ageing population, sustainable energy against a background of climate change, and the developing use of information technology in an environment of universal information. The portfolio is well diversified and many investments are underpinned by property and other physical assets.  In addition, the great majority of investments are structured to be cash generative in order to provide further support for your Company's dividend. The Board remains confident in the long term prospects of the Company to deliver an attractive return to shareholders.   

Key performance indicators
The Directors believe that the following key performance indicators, which are typical for venture capital trusts and used in its own assessment of the Company, will provide shareholders with sufficient information to assess how effectively the Company has been applying its investment policy to meet its objectives.  The Directors are satisfied that the results shown in the following key performance indicators give a good indication that the Company is achieving its investment objective and policy. These are:

1. Increase in total shareholder value
The graph on page 9 of the full Annual Report and Financial Statements shows total shareholder value increased by 1.43 pence per share to 80.20 pence per share (2014: 78.77) for the year ended 30 June 2015.

2. Annual net asset value total return to shareholders
The table on page 9 of the full Annual Report and Financial Statements shows annual total return to shareholders has remained positive for the sixth consecutive year at 4.5% (2014: 7.1%) for the year ended 30 June 2015.

3. Dividend distributions
Dividends paid in respect of the year ended 30 June 2015 were 2.50 pence per share (2014: 2.50 pence per share), in line with the Board's dividend objective. Cumulative dividends paid since launch (on 18 January 1998) amount to 49.23 pence per share.

4. Ongoing charges
The ongoing charges ratio for the year to 30 June 2015 was 2.6 per cent. (2014: 2.7 per cent.). The ongoing charges ratio has been calculated using The Association of Investment Companies' (AIC) recommended methodology. This figure shows shareholders the total recurring annual running expenses (including investment management fees charged to capital reserve) as a percentage of the average net assets attributable to shareholders. The Directors expect the ongoing charges ratio for the year ahead to be approximately 2.6 per cent.

5. Running yield
The running yield on the portfolio (gross income divided by the average net asset value) for the year to 30 June 2015 was 3.6 per cent. (2014: 3.4 per cent.).

VCT regulation
The investment policy is designed to ensure that the Company continues to qualify and is approved as a VCT by HMRC. In order to maintain its status under Venture Capital Trust legislation, a VCT must comply on a continuing basis with the provisions of Section 274 of the Income Tax Act 2007, details of which are provided in the Directors' report on page 23 of the full Annual Report and Financial Statements.

The relevant tests to measure compliance have been carried out and independently reviewed for the year ended 30 June 2015. These showed that the Company has complied with all tests and continues to do so.

Changes in VCT legislation
During the July 2015 summer budget, new conditions were announced that are expected to become effective from Royal Assent in November 2015 (this is subject to State Aid approval from the EU Commission).  How these conditions apply to the Company is summarised as follows:

1.       no investment made by the Company in a company causes that company to receive more than £12 million (£20 million if the company is deemed to be a Knowledge Intensive Company) of State Aid investment (including from VCTs) over the company's lifetime;

2.       no investment can be made by the Company in a company whose first commercial sale was more than 7 years prior to date of investment, except where previous Risk Finance State Aid was received by the company within 7 years or where a turnover test is satisfied; and

3.       no funds received from an investment into a company can be used to acquire another existing business or trade.

While these changes are significant, the Company has been advised that had they been in place previously they would have affected only a relatively small minority of the investments that we have made into new portfolio companies over recent years. The Board's current view is that there will be no material change in our investment policy as a result, however the legislation is still being worked on and we will have a more detailed view of its effect after Royal Assent, expected in November 2015.

Gearing
As defined by the Articles of Association, the Company's maximum exposure in relation to gearing is restricted to 10 per cent. of the adjusted share capital and reserves. The Directors do not currently have any intention to utilise long term gearing.

Operational arrangements
The Group has delegated the investment management of the portfolio to Albion Ventures LLP, which is authorised and regulated by the Financial Conduct Authority. Albion Ventures LLP also provides company secretarial and other accounting and administrative support to the Group. Further details regarding the terms of engagement of the Manager and the way the Board have evaluated the performance of the Manager are shown below.

Management agreement
Under the terms of the Management agreement, the Manager is paid an annual fee equal to 1.75 per cent. of the net asset value of the Company plus £50,000 fee per annum for administrative and secretarial services. Total normal running costs, including the management fee, are limited to 3.0 per cent. of the net asset value. The Manager is entitled to an arrangement fee, payable by each portfolio company in which the Company invests, in the region of 2.0 per cent. on each investment made, and is also entitled to non-executive director fees when placing an investment executive from Albion Ventures LLP on the portfolio company Board.

Further details of fees paid to the Manager can be found in note 4.

The management agreement can be terminated by either party on 12 months' notice and is subject to earlier termination in the event of certain breaches or on the insolvency of either party.

Management performance incentive
In order to provide the Manager with an incentive to maximise the return to investors, the Manager is entitled to charge an incentive fee in the event that the returns exceed minimum target levels per share.

The target level requires that the growth of the aggregate of the net asset value per share and dividends paid by the Company or declared by the Board and approved by the shareholders during the relevant period (both revenue and capital), compared with the previous accounting date, exceeds the average base rate of the Royal Bank of Scotland plc plus 2.0 per cent. If the target return is not achieved in a period, the cumulative shortfall is carried forward to the next accounting period and has to be made up before an incentive fee becomes payable.

There was no management performance incentive fee payable during the year (2014: nil). As at 30 June 2015 the cumulative shortfall of the target return was 7.41 pence per share (2014: 7.42 pence per share) and this amount needs to be made up in the next accounting period before an incentive fee becomes payable.

Evaluation of the Manager
The Board has evaluated the performance of the Manager based on the returns generated by the Company, the continuing achievement of the 70 per cent. investment requirement for venture capital trust status, the long term prospects of current investments, a review of the Management agreement and the services provided therein, and benchmarking the performance of the Manager to other service providers. The Board believes that it is in the interest of shareholders as a whole, and of the Company, to continue the appointment of the Manager for the forthcoming year.

Alternative Investment Fund Managers Directive ("AIFMD")
The Board has appointed Albion Ventures LLP as the Company's AIFM as required by the AIFMD.

Social and community issues, employees and human rights
The Board recognises the requirement under section 414C of the Companies Act 2006 (the "Act") to detail information about social and community issues, employees and human rights; including any policies it has in relation to these matters and effectiveness of these policies. As an externally managed investment company with no employees, the Company has no policies in these matters and as such these requirements do not apply.

Further policies and statements
The Company has adopted a number of further policies and statements relating to:

• Environment
• Global greenhouse gas emissions
• Anti-bribery
• Diversity

and these are set out in the Directors' report on pages 23 and 24 of the full Annual Report and Financial Statements.

Discount management and share buy-back policy
It remains the Board's primary objective to maintain sufficient resources for investment in existing and new portfolio companies and for the continued payment of dividends to shareholders. Thereafter, it is the Board's policy to buy back shares in the market, subject to the overall constraint that such purchases are in the VCT's interest and it is the Board's intention for such buy-backs to be in the region of a 5 per cent. discount to net asset value, so far as market conditions and liquidity permit.
Further details of shares bought back during the year ended 30 June 2015 can be found in note 14 of the Financial Statements.

Risk management
The Board carries out a regular review of the risk environment in which the Company operates. The principal risks and uncertainties of the Company, as identified by the Board, and how they are managed are as follows:

Risk	Possible consequence	Risk management
Economic risk	Changes in economic conditions, including, for example, interest rates, rates of inflation, industry conditions, competition, political and diplomatic events and other factors could substantially and adversely affect the Company's prospects in a number of ways.	To reduce this risk, in addition to investing equity in portfolio companies, the Company often invests in fixed interest secured loan stock and has a policy of not normally permitting any external bank borrowings within portfolio companies. Additionally, the Manager has been rebalancing the sector exposure of the portfolio with a view to reducing reliance on consumer led sectors.
Investment risk	This is the risk of investment in poor quality assets which reduces the capital and income returns to shareholders, and negatively impacts on the Company's reputation. By nature, smaller unquoted businesses, such as those that qualify for venture capital trust purposes, are more fragile than larger, long established businesses. The success of investments in certain sectors is also subject to regulatory risk, such as those affecting companies involved in UK renewable energy.	To reduce this risk, the Board places reliance upon the skills and expertise of the Manager in investing in this segment of the market. The Manager invests in a diversified portfolio of companies, across a number of sectors of the economy, thus spreading investment risk. In addition, the Manager operates a formal and structured investment process, which includes an Investment Committee, comprising investment professionals from the Manager and at least one external investment professional. The Manager also invites, and takes account of, comments from non-executive Directors of the Company on investments discussed at the Investment Committee meetings. Investments are actively and regularly monitored by the Manager (investment managers normally sit on portfolio company boards) and the Board receives detailed reports on each investment as part of the Manager's report at quarterly board meetings. It is the policy of the Company for portfolio companies to not normally have external borrowings. The Board and the Manager closely monitor regulatory changes in the sectors in which the Company is invested.
Valuation risk	The Company's investment valuation methodology is reliant on the accuracy and completeness of information that is issued by portfolio companies. In particular, the Directors may not be aware of or take into account certain events or circumstances which occur after the information issued by such companies is reported.	As described in note 1 of the Financial Statements, the unquoted equity investments, convertible loan stock and debt issued at a discount held by the Company are designated at fair value through profit or loss and valued in accordance with the International Private Equity and Venture Capital Valuation Guidelines. These guidelines set out recommendations, intended to represent current best practice on the valuation of venture capital investments. These investments are valued on the basis of forward looking estimates and judgments about the business itself, its market and the environment in which it operates, together with the state of the mergers and acquisitions market, stock market conditions and other factors. In making these judgments the valuation takes into account all known material facts up to the date of approval of the Financial Statements by the Board. The sensitivity of these assumptions are commented on further in notes 9 and 18.  All other unquoted loan stock is measured at amortised cost. The values of a number of investments are also underpinned by independent third party professional valuations.
VCT approval risk	The Company's current approval as a venture capital trust allows investors to take advantage of tax reliefs on initial investment and ongoing tax-free capital gains and dividend income. Failure to meet the qualifying requirements could result in investors losing the tax relief on initial investment and loss of tax relief on any tax-free income or capital gains received. In addition, failure to meet the qualifying requirements could result in a loss of listing of the shares.	To reduce this risk, the Board has appointed the Manager, which has a team with significant experience in venture capital trust management, used to operating within the requirements of the venture capital trust legislation. In addition, to provide further formal reassurance, the Board has appointed Robertson Hare LLP as its taxation adviser. Robertson Hare LLP report quarterly to the Board to independently confirm compliance with the venture capital trust legislation, to highlight areas of risk and to inform on changes in legislation. Each investment in a new portfolio company is also pre-cleared with H.M. Revenue & Customs.
VCT regulatory changes risk	The Company is required to comply with regular changes to VCT specific regulations including the latest ones relating to European State Aid regulations which are enacted by the UK Government. Non-compliance could result in a loss of VCT status and/or demands for repayment of State Aid by a portfolio company or by VCT investors.	The Board receives advice from Robertson Hare LLP in respect of these requirements and conducts its affairs in order to comply with these requirements. The Manager engages regularly with policy makers on regulation. In addition, the Board places reliance upon the skills and expertise of the Manager in investing in this segment of the market.
Compliance risk	The Company is listed on The London Stock Exchange and is required to comply with the rules of the UK Listing Authority, as well as with the Companies Act, Accounting Standards and other legislation. Failure to comply with these regulations could result in a delisting of the Company's shares, or other penalties under the Companies Act or from financial reporting oversight bodies.	Board members and the Manager have experience of operating at senior levels within or advising quoted businesses. In addition, the Board and the Manager receive regular updates on new regulation from its auditor, lawyers and other professional bodies. The Company is subject to compliance checks via the Manager's Compliance Officer. The Manager reports monthly to its Board on any issues arising from compliance or regulation. These controls are also reviewed as part of the quarterly Manager Board meetings, and also as part of the review work undertaken by the Manager's Compliance Officer. The report on controls is evaluated by Internal Audit during its reports.
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 Auditor, PKF Littlejohn LLP, when required, receiving a report regarding the last formal internal audit performed on the Manager, and providing the opportunity for the Audit and Risk Committee to ask specific and detailed questions. Karen Brade as the Chairman of the Audit and Risk Committee met with the internal audit partner of PKF Littlejohn LLP in January 2015 to discuss the most recent Internal Audit Report on the Manager. The Manager has a comprehensive business continuity plan in place in the event that operational continuity is threatened. Further details regarding the Board's management and review of the Company's internal controls through the implementation of the Turnbull guidance are detailed on page 30 of the full Annual Report and Financial Statements. Measures are in place to mitigate information security risk in order to ensure the integrity, availability and confidentiality of information used within the business.
Reliance upon third parties risk	The Group and the Company are reliant upon the services of Albion Ventures LLP and other third party service providers for the provision of investment management and administrative functions.	There are provisions within the Management agreement for the change of Manager under certain circumstances (for further detail, see the Management agreement paragraph in the Strategic Report). In addition, the Manager has demonstrated to the Board that there is no undue reliance placed upon any one individual within Albion Ventures LLP. The Board monitors the performance of other third party service providers annually.
Financial risk	By its nature, as a venture capital trust, the Company is exposed to investment risk (which comprises investment price risk and cash flow interest rate risk), credit risk and liquidity risk.	The Company's policies for managing these risks and its financial instruments are outlined in full in note 18 to the Financial Statements. All of the 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 for speculative purposes.
Reputational risk	This arises from broader performance and ethical issues, including investment in businesses and sectors that are inconsistent with the values of Board and the VCT or, by the Boards of portfolio companies taking actions which similarly are inconsistent with the values of the VCT.	The Board clearly articulates to the Investment Manager its broader aims and standards including those sectors which are consistent with the values of the Board. The Board regularly reviews the performance and investment strategy of the Investment Manager. The Investment Manager periodically attends Board meetings of the VCT's portfolio companies and across the portfolio receives periodic management information and is alert to potential threats to reputation.

This Strategic report of the Company for the year ended 30 June 2015 has been prepared in accordance with the requirements of section 414A of the Act. The purpose of this report is to provide Shareholders with sufficient information to enable them to assess the extent to which the Directors have performed their duty to promote the success of the Company in accordance with section 172 of the Act.

On behalf of the Board,

Richard Huntingford
Chairman

13 October 2015

Responsibility Statement

In preparing these financial statements for the year to 30 June 2015, the Directors of the Company, being Richard Huntingford, Rachel Beagles, Karen Brade and Penny Freer, 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 2015 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 2015 as required by DTR 4.1.12.R;
• the Chairman's statement and Strategic report include a fair review of the information required by DTR 4.2.7R (indication of important events during the year ended 30 June 2015 and description of principal risks and uncertainties that the Group and the Company faces); and
• the Chairman's statement and Strategic report include a fair review of the information required by DTR 4.2.8R (disclosure of related parties transactions and changes therein).

A detailed "Statement of Directors' responsibilities 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

Richard Huntingford
Chairman

13 October 2015

Consolidated statement of comprehensive income

		Year ended 30 June 2015			Year ended 30 June 2014
		Revenue	Capital	Total	Revenue	Capital	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments	2	-	1,036	1,036	-	1,812	1,812
Investment income and deposit interest	3	1,105	-	1,105	925	-	925
Investment management fees	4	(133)	(397)	(530)	(120)	(361)	(481)
Other expenses	5	(272)	-	(272)	(280)	-	(280)
Profit before taxation		700	639	1,339	525	1,451	1,976
Taxation	6	-	-	-	-	-	-
Profit and total comprehensive income for the year		700	639	1,339	525	1,451	1,976
Basic and diluted earnings per Ordinary share (pence)*	8	0.73	0.67	1.40	0.61	1.67	2.28

* 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    

		30 June 2015	30 June 2014
	Note	£'000	£'000
Non-current assets
Investments	9	28,531	27,689
Current assets
Trade and other receivables less than one year	12	788	74
Current asset investments	12	-	42
Cash and cash equivalents	16	4,006	1,466
		4,794	1,582
Total assets		33,325	29,271
Current liabilities
Trade and other payables less than one year	13	(244)	(221)
Net assets		33,081	29,050
Equity attributable to equityholders
Ordinary share capital	14	11,767	10,006
Share premium		9,234	5,527
Capital redemption reserve		1,415	1,415
Unrealised capital reserve		1,612	657
Realised capital reserve		(171)	145
Other distributable reserve		9,224	11,300
Total equity shareholders' funds		33,081	29,050
Basic and diluted net asset value per share (pence)*	15	30.97	32.04

* 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 13 October 2015 and were signed on its behalf by

Richard Huntingford
Chairman

Company number: 03495287

Company balance sheet

		30 June 2015	30 June 2014
	Note	£'000	£'000
Fixed assets
Fixed asset investments	9	28,531	27,689
Investment in subsidiary undertakings	11	6,619	15,095
		35,150	42,784
Current assets
Investment in subsidiary undertakings	11	8,473	-
Trade and other debtors	12	788	74
Current asset investments	12	-	42
Cash at bank and in hand	16	3,950	1,410
		13,211	1,526
Creditors: amounts falling due within one year	13	(15,280)	(15,260)
Net current assets		(2,069)	(13,734)
Net assets		33,081	29,050
Capital and reserves
Ordinary share capital	14	11,767	10,006
Share premium		9,234	5,527
Capital redemption reserve		1,415	1,415
Unrealised capital reserve		1,647	695
Realised capital reserve		(380)	(64)
Other distributable reserve		9,398	11,471
Total equity shareholders' funds		33,081	29,050
Basic and diluted net asset value per share (pence)*	15	30.97	32.04

* 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 13 October 2015 and were signed on its behalf by

Richard Huntingford
Chairman

Company number: 03495287

Consolidated statement of changes in equity

	Ordinary share capital	Share premium	Capital redemption reserve	Unrealised capital reserve	Realised capital reserve	Other distributable reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
As at 1 July 2014	10,006	5,527	1,415	657	145	11,300	29,050
Profit and total comprehensive income	-	-	-	759	(120)	700	1,339
Transfer of previously unrealised losses on sale or write off of investments	-	-	-	196	(196)	-	-
Dividends paid	-	-	-	-	-	(2,337)	(2,337)
Purchase of shares for treasury (including costs)	-	-	-	-	-	(439)	(439)
Issue of equity	1,761	3,860	-	-	-	-	5,621
Cost of issue of equity	-	(153)	-	-	-	-	(153)
As at 30 June 2015	11,767	9,234	1,415	1,612	(171)	9,224	33,081
As at 1 July 2013	9,300	3,756	1,283	(1,690)	1,041	13,476	27,166
Profit and total comprehensive income	-	-	-	1,823	(372)	525	1,976
Transfer of previously unrealised losses on sale or write off of investments	-	-	-	524	(524)	-	-
Dividends paid	-	-	-	-	-	(2,132)	(2,132)
Purchase of shares for treasury (including costs)	-	-	-	-	-	(174)	(174)
Purchase of own shares for cancellation (including costs)	(132)	-	132	-	-	(395)	(395)
Issue of equity	838	1,845	-	-	-	-	2,683
Cost of issue of equity	-	(74)	-	-	-	-	(74)
As at 30 June 2014	10,006	5,527	1,415	657	145	11,300	29,050

The nature of each reserve is described in note 1 below.

Company reconciliation of movements in shareholders' funds

	Ordinary share capital	Share premium	Capital redemption reserve	Unrealised capital reserve	Realised capital reserve*	Other distributable reserve*	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
As at 1 July 2014	10,006	5,527	1,415	695	(64)	11,471	29,050
Return for the year	-	-	-	759	(120)	703	1,342
Revaluation of investment in subsidiaries	-	-	-	(3)	-	-	(3)
Transfer of previously unrealised losses on disposal of investments	-	-	-	196	(196)	-	-
Dividends paid in year	-	-	-	-	-	(2,337)	(2,337)
Purchase of shares for treasury (including costs)	-	-	-	-	-	(439)	(439)
Issue of equity	1,761	3,860	-	-	-	-	5,621
Cost of issue of equity	-	(153)	-	-	-	-	(153)
As at 30 June 2015	11,767	9,234	1,415	1,647	(380)	9,398	33,081
As at 1 July 2013	9,300	3,756	1,283	(167)	832	12,162	27,166
Return for the year	-	-	-	1,823	(372)	2,010	3,461
Revaluation of investment in subsidiaries	-	-	-	(1,485)	-	-	(1,485)
Transfer of previously unrealised losses on disposal of investments	-	-	-	524	(524)	-	-
Dividends paid in year	-	-	-	-	-	(2,132)	(2,132)
Purchase of shares for treasury (including costs)	-	-	-	-	-	(174)	(174)
Purchase of own shares for cancellation (including costs)	(132)	-	132	-	-	(395)	(395)
Issue of equity	838	1,845	-	-	-	-	2,683
Cost of issue of equity	-	(74)	-	-	-	-	(74)
As at 30 June 2014	10,006	5,527	1,415	695	(64)	11,471	29,050

* Included within these reserves is an amount of £9,018,000 (2014: £11,407,000) which is considered distributable.

The nature of each reserve is described in note 1 below.

Consolidated cashflow statement

	Note	Year ended 30 June 2015 £'000	Year ended  30 June 2014 £'000
Operating activities
Investment income received		965	880
Deposit interest received		30	18
Dividend income received		51	29
Investment management fees paid		(512)	(473)
Other cash payments		(282)	(267)
Net cash flow from operating activities	17	252	187
Cash flow from investing activities
Purchase of non-current asset investments		(7,006)	(2,539)
Disposal of non-current asset investments		7,187	1,129
Net cash flow from investing activities		181	(1,410)
Cash flow from financing activities
Issue of share capital		4,614	2,449
Equity dividends paid		(2,078)	(1,966)
Cost of issue of equity		(4)	(5)
Purchase of shares for treasury		(425)	(174)
Purchase of shares for cancellation		-	(395)
Net cash flow used in financing activities		2,107	(91)
Increase/(decrease) in cash and cash equivalents		2,540	(1,314)
Cash and cash equivalents at the start of the year		1,466	2,780
Cash and cash equivalents at the end of the year	16	4,006	1,466

Company cashflow statement

	Note	Year ended 30 June 2015 £'000	Year ended  30 June 2014 £'000
Operating activities
Loan stock income received		965	880
Deposit interest received		30	18
Dividend income received		1,866	3,416
Investment management fees paid		(512)	(473)
Intercompany interest paid		(1,815)	(3,387)
Other cash payments		(282)	(267)
Net cash flow from operating activities	17	252	187
Taxation
UK corporation tax paid		-	-
Capital expenditure and financial investments
Purchase of fixed asset investments		(7,006)	(2,539)
Disposal of fixed asset investments		7,187	1,129
Net cash flow from investing activities		181	(1,410)
Equity dividends paid
Dividends paid		(2,078)	(1,966)
Net cash flow before financing		(1,645)	(3,189)
Financing activities
Issue of share capital		4,614	2,449
Cost of issue of equity		(4)	(5)
Purchase of own shares for treasury (including costs)		(425)	(174)
Purchase of own shares for cancellation (including costs)		-	(395)
Net cash flow from financing		4,185	1,875
Cash flow in the year	16	2,540	(1,314)

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 United Kingdom Generally Accepted Accounting Practice ('UK GAAP') relate to the Company Financial Statements.

Basis of accounting
The Financial Statements have been prepared in accordance with International Financial Reporting Standards ('EU IFRS') as adopted by 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 9 Financial Instruments (effective for annual periods beginning on or after 1 January 2018) (the amendments to IFRS 9 are not yet endorsed for use in the EU, expected endorsement is not yet determined)
• IFRS 10 / IAS 28 Sale or contribution of assets between an investor and its associate or joint venture (effective for annual periods beginning on or after 1 January 2016)
• IFRS 11 Accounting for Acquisitions of Interest in Joint Operations (effective for annual periods beginning on or after 1 January 2016)
• IFRS 14 Regulatory Deferral Accounts (effective for annual periods beginning on or after 1 January 2016)
• IFRS 15 Revenue from Contracts with Customers (effective for annual periods beginning on or after 1 January 2018) (the amendments to IFRS 15 are not yet endorsed for use in the EU, expected endorsement is not yet determined)
• IAS 16 / IAS 41 Clarification of Acceptable Methods of Depreciation and Amortisation (effective for annual periods beginning on or after 1 January 2016)
• IAS 27 Equity Method in Separate Financial Statements (effective for annual periods beginning on or after 1 January 2016)

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 2015 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 £1,342,000 (2014: £3,461,000). 

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 judgments 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. Reasonable possible alternative assumptions have been considered, details of which are given in note 9.

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 judgments to select a variety of methods and makes assumptions that are mainly based on market conditions and portfolio company performance at each balance sheet date.

Investment in subsidiaries
Investments in subsidiaries are revalued at the balance sheet date based on the underlying net assets of the subsidiary undertakings. Revaluation movements are recognised in the unrealised reserve.

CP2 VCT PLC is a wholly-owned subsidiary of the Company. CP2 VCT PLC transferred its business to Crown Place VCT PLC and ceased trading with effect from the date of merger on 12 January 2006. Since then, CP2 VCT PLC has had no further business other than to hold cash and intercompany balances. CP2 VCT PLC had significant tax losses which have been utilised by the Company through group relief. However, as the tax losses are nearly depleted, it is now the intention of the Directors to liquidate CP2 VCT PLC within a period of at least twelve months from the date on which these financial statements are approved. For this reason, the accounts of CP2 VCT PLC have not adopted a going concern basis of preparation. 

The above decision will not affect CP1 VCT PLC, which will continue to be a wholly supported subsidiary company.

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).

Fair value movements 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 there is deemed to be 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 as permitted by IAS 39 and FRS 26 and measured 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 other distributable 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 for impairments arising from revaluations of the fair value of the security.

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

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.

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 as part of an investment portfolio are not accounted for using the equity method.

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

Investment income
Quoted and unquoted equity income
Dividends receivable on quoted equity shares are recognised on the ex-dividend date. Income receivable on unquoted equity is recognised when the Company's right to receive payment and expected settlement is established.

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 timing differences (in accordance with FRS 16), and temporary differences (in accordance with IAS 12) 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. Temporary differences (FRS 16) arise from differences between the carrying amounts of assets and liabilities for financial reporting and the amounts used for taxation purposes. Timing differences (IAS 12) arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the Financial Statements. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which unused tax losses and credits can be utilised. Deferred tax assets and liabilities are not discounted.

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 is paid or approved at the Annual General Meeting.

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 other distributable reserve.

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

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

Realised capital reserve
The following are disclosed in this reserve:

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

Other distributable reserve
This reserve accounts for movements from the revenue column of the Statement of Comprehensive Income, the payment of dividends, the buy-back of shares and other non-capital realised movements.

2. Gains on investments

	Year ended 30 June 2015	Year ended  30 June 2014
	£'000	£'000
Unrealised gains on investments held at fair value through profit or loss	185	1,780
Reversal of impairments on investments measured at amortised cost	574	22
Unrealised gains on non-current asset investments sub-total	759	1,802
Unrealised gains on current asset investments held at fair value through profit or loss	-	21
Unrealised gains on investments	759	1,823
Realised gains on investments held at fair value through profit or loss	487	-
Realised losses on investments measured at amortised cost	(216)	(11)
Realised gains/(losses) on non-current asset investments sub-total	271	(11)
Realised gains on current asset investments held at fair value through profit or loss	6	-
Realised gains/(losses) on investments	277	(11)
	1,036	1,812

Investments measured at amortised cost are unquoted loan stock investments as described in note 9.

3. Investment income and deposit interest

	Year ended 30 June 2015	Year ended 30 June 2014
	£'000	£'000
Income recognised on investments held at fair value through profit or loss
UK dividend income	51	29
Interest on convertible bonds and debt issued at a discount	295	145
	346	174
Income recognised on investments measured at amortised cost
Return on loan stock investments	729	732
Bank deposit interest	30	19
	759	751
	1,105	925

Interest income earned on impaired investments at 30 June 2015 amounted to £205,000 (2014: £172,000). These investments are all held at amortised cost.

4. Investment management fees

	Year ended 30 June 2015			Year ended 30 June 2014
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Investment management fee	133	397	530	120	361	481

Further details of the Management agreement under which the investment management fee is paid are given in the Strategic report.

During the year, services of a total value of £580,000 (2014: £531,000) were purchased by the Company from Albion Ventures LLP comprising £530,000 in respect of management fees (2014: £481,000) and £50,000 in respect of administration fees (2014: £50,000).  At the financial year end, the amount due to Albion Ventures LLP in respect of these services disclosed as accruals and deferred income was £156,500 (administration fee accrual: £12,500, management fee accrual £144,000) (2014:  £139,500).

Albion Ventures LLP is, from time to time, eligible to receive transaction fees and Directors' fees from portfolio companies. During the year ended 30 June 2015 fees of £211,000 attributable to the investments of the Company were received pursuant to these arrangements (2014: £67,000).

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. In addition, Albion Ventures LLP holds a further 48,761 Ordinary shares in the Company.

5. Other expenses

	Year ended 30 June 2015	Year ended 30 June 2014
	£'000	£'000
Directors' remuneration	75	75
National insurance on Directors' remuneration	6	6
Auditor's remuneration: - audit of the statutory Financial Statements (excluding VAT)	26	26
- the auditing of accounts of associates of the Company pursuant to legislation (excluding VAT)	5	5
Impairment of accrued interest	-	10
Other expenses	160	158
	272	280

Further information regarding Directors' remuneration can be found in the audited section of the Directors' remuneration report on page 33 of the full Annual Report and Financial Statements.

6. Taxation

	Year ended 30 June 2015			Year ended 30 June 2014
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
UK corporation tax charge	-	-	-	-	-	-

The tax charge for the year shown in the Statement of comprehensive income is lower than the standard rate of corporation tax of 21 per cent. to 31 March 2015 and 20 per cent. from 1 April 2015 (average rate of 20.75 per cent.) (2014: average rate of 22.50 per cent.). The differences are explained below:

	Year ended 30 June 2015	Year ended 30 June 2014
	£'000	£'000
Profit before taxation	1,339	1,976
Profit multiplied by the standard rate of corporation tax	(278)	(445)
Effect of capital gains not subject to taxation	215	408
Effect of income not subject to taxation	11	7
Utilisation of tax losses	52	30
	-	-

No provision for deferred tax has been made in the current or prior accounting period.  The Company and Group have not recognised a deferred tax asset of £3,037,000 (2014: £2,725,000) 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 £302,000 (2014: £664,000) 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

			Year ended 30 June 2015			Year ended 30 June 2014
			£'000			£'000
First dividend paid on 28 November 2014 (29 November 2013) (1.25 pence per share)			1,142			1,053
Second dividend paid on 31 March 2015 (31 March 2014) (1.25 pence per share)			1,195			1,079
			2,337			2,132

In addition to the dividends paid above, the Board has declared a first dividend for the year ending 30 June 2016, of 1.25 pence per share. This will be paid on 30 November 2015 to shareholders on the register as at 6 November 2015. The total dividend will be approximately £1,362,000.

8. Basic and diluted return per share

	Year ended 30 June 2015			Year ended 30 June 2014
	Revenue	Capital	Total	Revenue	Capital	Total
Return attributable to equity shares (£'000)	700	639	1,339	525	1,451	1,976
Weighted average shares (excluding treasury shares)	95,555,497			86,017,237
Return attributable per Ordinary share (pence) (basic and diluted)	0.73	0.67	1.40	0.61	1.67	2.28

The return per share has been calculated excluding treasury shares of 10,852,410 (2014: 9,376,410).

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 2015 £'000	30 June 2014 £'000
Group and Company
Investments held at fair value through profit or loss
Unquoted equity and preference shares	10,467	12,161
Quoted equity	701	896
Discounted debt and convertible loan stock	7,277	3,635
	18,445	16,692
Investments measured at amortised cost
Unquoted loan stock	10,086	10,997
	28,531	27,689

	30 June 2015 £'000	30 June 2014 £'000
Opening valuation	27,689	24,567
Purchases at cost	7,060	2,539
Disposal proceeds	(7,316)	(1,188)
Realised gains/(losses)	271	(11)
Movement in loan stock accrued income	69	(20)
Unrealised gains	759	1,802
Closing valuation	28,531	27,689
Movement in loan stock accrued income
Opening accumulated movement in loan stock accrued income	62	82
Movement in loan stock accrued income	69	(20)
Closing accumulated movement in loan stock accrued income	131	62
Movement in unrealised gains
Opening accumulated unrealised gains/(losses)	549	(1,777)
Transfer of previously unrealised gains to realised reserves on disposal	(1,305)	(227)
Transfer of previously unrealised losses to realised reserves on investments written off but still held	1,542	751
Movement in unrealised gains	759	1,802
Closing accumulated unrealised gains	1,545	549
Historic cost basis
Opening book cost	27,079	26,262
Purchases at cost	7,060	2,539
Disposals at cost	(5,383)	(945)
Cost of investments written off but still held	(1,901)	(777)
Closing book cost	26,855	27,079
Closing cost is net of amounts of £1,901,000 (2014: £1,881,000) written off in respect of investments still held at the balance sheet date.

The Directors believe that the carrying value of loan stock measured at 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 disposals during the year is shown on page 19 of the full Annual Report and Financial Statements.

IFRS 13 'Fair value measurement' and 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 Company's investments measured at fair value through profit or loss (Level 3) had the following movements in the year to 30 June 2015:

	30 June 2015			30 June 2014
	Equity	Discounted debt and convertible loan stock	Total	Equity	Discounted debt and convertible loan stock	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Opening balance	12,161	3,635	15,796	9,582	2,824	12,406
Additions	1,137	4,260	5,397	773	1,337	2,110
Disposal proceeds	(3,819)	(611)	(4,430)	(193)	(293)	(486)
Transfer to Level 1	-	-	-	(473)	(193)	(666)
Representation of convertible debt	-	-	-	-	417	417
Debt/equity conversion	299	(120)	179	342	(342)	-
Realised gains/(losses)	734	(15)	719	(12)	12	-
Unrealised (losses)/gains	(45)	73	28	2,142	(131)	2,011
Accrued loan stock interest	-	55	55	-	4	4
Closing balance	10,467	7,277	17,744	12,161	3,635	15,796

Unquoted investments held at fair value through profit or loss are valued in accordance with the IPEVCV guidelines as follows:

	30 June 2015	30 June 2014
Investment valuation methodology	£'000	£'000
Net asset value supported by independent valuation	9,124	6,000
Earnings multiple	1,356	1,990
Net asset value	2,112	2,288
Recent investment price	1,368	548
Cost (reviewed for impairment)	1,282	2,313
Revenue multiple	1,189	1,664
Agreed sale price/Offer price	1,313	993
	17,744	15,796

Level 3 valuations include inputs based on non-observable market data. IFRS 13 requires an entity to disclose quantitative information about the significant unobservable inputs used. Of the Company's Level 3 investments, 14 per cent are held on an Earnings or Revenue multiple basis, which have significant judgement applied to the valuation inputs. The table below sets out the range of Earnings and Revenue multiples and discounts applied. The remainder of Level 3 investments are held at cost (reviewed for impairment), recent investment price, net asset value (supported by independent valuation) or net assets.

	Support services	Healthcare (growth)	Software
Earnings multiples
PE multiple range	7.7-11.0	17.0	-
Marketability discount range	8% - 27%	50%	-
Revenue Multiples
Revenue multiple range	-	1.2 - 1.5	2.5
Marketability discount range	-	50%	15%

IFRS 13 and 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. After due consideration and noting that the valuation methodology applied to 74 per cent. of the Level 3 investments (by valuation) is based on third party independent evidence, recent investment price, agreed sale price/offer price and cost, the Directors believe that changes to reasonable possible alternative input assumptions (a reasonable discount to the earnings or revenue multiple) for the valuation of the remainder of the portfolio could 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 £496,000 or a decrease in the valuation of equity investments by £509,000.

The unquoted equity instruments had the following movements between investment methodologies between 30 June 2014 and 30 June 2015:

Change in investment valuation methodology (2014 to 2015)	Value as at 30 June 2015 £'000	Explanatory note
Earnings multiple to offer price	664	Agreed offer price
Cost to net asset value supported by independent valuation	489	More relevant valuation methodology following commencement of operations
Cost to price of recent investment	333	More appropriate following recent investment round
Cost to offer price	117	Agreed offer price
Cost to revenue multiple	58	More relevant valuation methodology

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 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 2015.

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 portfolio 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 portfolio companies as at 30 June 2015 as described below:

Company	Country of incorporation	Principal activity	% class and share type	% total voting rights
ELE Advanced Technologies Limited	Great Britain	Manufacturer of precision engineering components for the industrial gas turbine, aerospace and automotive markets	74.3% B Ordinary	41.9%
Uctal Limited	Great Britain	TV production company	56.7% B Ordinary/A Preference and B Preference	24.2%

The investments listed above are held as part of an investment portfolio and therefore, as permitted by IAS 28 and FRS 9, they are measured at fair value and not accounted for using the equity method.

11. Investments in subsidiary undertakings

	30 June 2015
	CP1 VCT PLC	CP2 VCT PLC	Total
	£'000	£'000	£'000
Carrying value as at 1 July 2014	6,622	8,473	15,095
Movement in subsidiary net assets	(3)	-	(3)
Carrying value as at 30 June 2015	6,619	8,473	15,092

	30 June 2014
	CP1 VCT PLC	CP2 VCT PLC	Total
	£'000	£'000	£'000
Carrying value as at 1 July 2013	7,299	9,281	16,580
Movement in subsidiary net assets	(677)	(808)	(1,485)
Carrying value as at 30 June 2014	6,622	8,473	15,095

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:

	30 June 2015
	CP1 VCT PLC	CP2 VCT PLC
Nominal value of shares held	£6,382,746	£8,219,350
Percentage of total voting rights held	100%	100%

	30 June 2014
	CP1 VCT PLC	CP2 VCT PLC
Nominal value of shares held	£6,382,746	£8,219,350
Percentage of total voting rights held	100%	100%

12. Trade and other receivables/debtors and current asset investments

	30 June 2015		30 June 2014
	Group	Company	Group	Company
	£'000	£'000	£'000	£'000
Trade and other receivables/debtors less than one year	788	788	74	74
	30 June 2015		30 June 2014
	Group	Company	Group	Company
	£'000	£'000	£'000	£'000
Contingent future receipts on disposal of fixed asset investments	-	-	42	42

The fair value hierarchy applied to contingent future receipts on disposal of fixed asset investments is Level 3.

13. Trade and other payables/creditors

	30 June 2015		30 June 2014
	Group	Company	Group	Company
	£'000	£'000	£'000	£'000
Amounts falling due within one year:
Amounts due to subsidiary undertakings	-	15,036	-	15,039
Other payables	23	23	21	21
Accruals	221	221	200	200
	244	15,280	221	15,260

Interest is chargeable on intercompany balances at a rate of 12 per cent. per annum. Intercompany balances are payable on demand. The subsidiaries' current business is to hold cash and intercompany balances.

14. Ordinary share capital

	30 June 2015 £'000	30 June 2014 £'000
Allotted, called up and fully paid
117,667,064 Ordinary shares of 10p each (2014: 100,057,224)	11,767	10,006
Voting rights
106,814,654 Ordinary shares of 10p each (2014: 90,680,814)

The Company did not purchase any Ordinary shares for cancellation during the year (2014: 1,317,000 Ordinary shares at a total cost of £395,000).

The Company purchased 1,476,000 Ordinary shares for treasury (2014: 582,000) during the year at a total cost of £439,000 (2014: £174,000).

The total number of shares held in treasury as at 30 June 2015 was 10,852,410 (2014: 9,376,410) representing 9.2 per cent. of the shares in issue as at 30 June 2015.

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:

Allotment date	Number of shares allotted	Aggregate nominal value of shares (£'000)	Issue price (pence per share)	Net consideration received (£'000)	Opening market price on allotment (pence per share)
28 November 2014	389,584	39	30.79	118	30.00
31 March 2015	450,741	45	31.03	137	29.75
	840,325	84		255

Under the terms of the Albion VCTs Top Up Offers 2013/2014 and Albion VCTs Prospectus Top Up Offers 2013/2014, the following Ordinary shares of nominal value 10 pence were issued during the year:

Allotment date	Number of shares allotted	Aggregate nominal value of shares (£'000)	Issue price (pence per share)	Net consideration received (£'000)	Opening market price on allotment (pence per share)
4 July 2014	23,321	2	31.80	7	30.00
4 July 2014	12,538	1	31.90	4	30.00
4 July 2014	101,104	10	32.10	32	30.00
4 July 2014 (prospectus)	953,781	95	32.10	297	30.00
	1,090,744	109		340

Under the terms of the Albion VCTs Prospectus Top Up Offers 2014/2015, the following Ordinary shares of nominal value 10 pence were issued during the year:

Allotment date	Number of shares allotted	Aggregate nominal value of shares (£'000)	Issue price (pence per share)	Net consideration received (£'000)	Opening market price on allotment (pence per share)
30 January 2015	2,763,025	276	31.80	861	30.00
30 January 2015	1,451,111	145	32.00	453	30.00
2 April 2015	9,525,629	953	32.00	2,957	29.75
30 June 2015	1,790,544	179	32.00	556	29.75
30 June 2015	112,824	11	31.70	35	29.75
30 June 2015	35,638	4	31.80	11	29.75
	15,678,771	1,568		4,873

15. Basic and diluted net asset value per share

The Group and Company net asset value attributable to the Ordinary shares at the year end was as follows:

			30 June 2015	30 June 2014
Net asset value per share attributable (pence)			30.97	32.04

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 106,814,654 shares (2014: 90,680,814) as at 30 June 2015.

There are no convertible instruments, derivatives or contingent share agreements in issue.

16. Analysis of changes in cash during the year

	30 June 2015		30 June 2014
	Group	Company	Group	Company
	£'000	£'000	£'000	£'000
Opening cash balances	1,466	1,410	2,780	2,723
Net cash flow	2,540	2,540	(1,314)	(1,314)
Closing cash balances	4,006	3,950	1,466	1,410

17. Reconciliation of revenue return before taxation to net cash flow from operating activities

		Year ended 30 June 2015				Year ended 30 June 2014
		Group			Company	Group		Company
		£'000			£'000	£'000		£'000
Revenue return before tax		700			700	525		525
Capitalised expenses		(397)			(397)	(361)		(361)
(Decrease)/increase in accrued amortised loan stock interest		(69)			(69)	20		20
Decrease in receivables		-			-	-		-
Increase in payables		18			18	3		3
Net cash flow from operating activities		252			252	187		187

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 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 in the Strategic report.

The Group's financial instruments comprise equity and loan stock investments in unquoted companies, equity in AIM quoted companies, contingent receipts on disposal of fixed asset investments, 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 quoted companies, details of which are shown on pages 17 to 19 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 portfolio companies and the dynamics of market quoted comparators. The Manager receives management accounts from portfolio companies, and members of the investment management team often sit on the boards of unquoted portfolio companies; this enables the close identification, monitoring and management of investment risk.

The Manager and the Board formally review investment risk (which includes market price risk), both at the time of initial investment and at quarterly Board meetings.

The Board monitors the prices at which sales of investments are made to ensure that profits to the 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 £28,531,000 (2014: £27,731,000). Non-current and current asset investments form 86 per cent. of the net asset value as at 30 June 2015 (2014: 95 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 fluctuate due 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 pages 17 to 19 of the full Annual Report and Financial Statements and in the Strategic 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 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. (2014: 10 per 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 £2,853,100 (2014: £2,773,100).

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 be immaterial due to the level of fixed rate loan stock held within the portfolio. On the basis of the Company's analysis, it is considered that further falls in interest rates would be highly unlikely.

The weighted average interest rate applied to the Group's fixed rate assets during the year was approximately 5.1 per cent. (2014: 5.7 per cent.). The weighted average period to maturity for the fixed rate assets is approximately 3.6 years (2014: 4.2 years).

The Group's financial assets and liabilities as at 30 June 2015, all denominated in pounds sterling, consist of the following:

	30 June 2015				30 June 2014
	Fixed rate £'000	Floating rate £'000	Non- interest £'000	Total £'000	Fixed rate £'000	Floating rate £'000	Non- interest £'000	Total £'000
Unquoted loan stock (including convertible loan stock and discounted bonds)	15,290	-	2,073	17,363	14,128	-	504	14,632
Equity	-	-	11,168	11,168	-	-	13,057	13,057
Receivables*	-	-	772	772	-	-	59	59
Current asset investments	-	-	-	-	-	-	42	42
Payables	-	-	(244)	(244)	-	-	(221)	(221)
Cash	-	4,006	-	4,006	-	1,466	-	1,466
	15,290	4,006	13,769	33,065	14,128	1,466	13,441	29,035

*The receivables do not reconcile to the balance sheet as prepayments are not included in the above table.

The Company's financial assets and liabilities as at 30 June 2015, all denominated in pounds sterling, consist of the following:

	30 June 2015				30 June 2014
	Fixed rate £'000	Floating rate £'000	Non- interest £'000	Total £'000	Fixed rate £'000	Floating rate £'000	Non- interest £'000	Total £'000
Unquoted loan stock (including convertible loan stock and discounted bonds)	15,290	-	2,073	17,363	14,128	-	504	14,632
Equity**	-	-	11,168	11,168	-	-	13,057	13,057
Debtors*	-	-	772	772	-	-	59	59
Current asset investments	-	-	-	-	-	-	42	42
Current liabilities	(15,036)	-	(244)	(15,280)	(15,039)	-	(221)	(15,260)
Cash	-	3,950	-	3,950	-	1,410	-	1,410
	254	3,950	13,769	17,973	(911)	1,410	13,441	13,940

*The receivables do not reconcile to the balance sheet as prepayments are not included in the above table.
** The equity does not reconcile to the balance sheet as investments in subsidiaries are excluded from the above table.

Credit risk
Credit risk is the risk that the counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the 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 portfolio company in order to mitigate the gross credit risk. The Manager receives management accounts from portfolio companies, and members of the investment management team often sit on the boards of unquoted portfolio companies; this enables the close identification, monitoring and management of investment-specific credit risk.

Bank deposits are held with banks with high credit ratings assigned by international credit rating agencies. 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 2015 was limited to £17,363,000 (2014: £14,632,000) of unquoted loan stock instruments (all are secured on the assets of the portfolio company), £4,006,000 (2014: £1,466,000) of cash deposits with banks and £772,000 (2014: £99,000) of deferred consideration and receivables.

The Company's total gross credit risk at 30 June 2015 was limited to £17,363,000 (2014: £14,632,000) of unquoted loan stock instruments (all are secured on the assets of the portfolio company), £3,950,000 (2014: £1,410,000) of cash deposits with banks and £772,000 (2014: £99,000) of deferred consideration and receivables.

As at the balance sheet date, the cash held by the Group is held with Lloyds Bank Plc, Scottish Widows Bank plc (part of Lloyds Banking Group), National Westminster Bank plc and 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 credit profile of unquoted loan stock is described under liquidity risk shown below.

The cost, impairment and carrying value of impaired loan stocks at 30 June 2015 and 30 June 2014 are as follows:

	30 June 2015			30 June 2014
	Cost	Impairment	Carrying value	Cost	Impairment	Carrying value
	£'000	£'000	£'000	£'000	£'000	£'000
Impaired loan stock	5,738	(549)	5,189	6,793	(1,914)	4,879

Impaired loan stock instruments have a first fixed charge or a fixed and floating charge over the assets of the portfolio company and the Board 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 £31,719,000 (2014: £27,903,000) as at 30 June 2015.

The Group has no committed borrowing facilities as at 30 June 2015 (2014: nil) and had cash balances of £4,006,000 (2014: £1,466,000) (Company £3,950,000; 2014: £1,410,000).  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 £244,000 (2014: £221,000) for the year to 30 June 2015 (Company: £15,280,000; 2014: £15,260,000). An amount of £15,036,000 (2014: £15,039,000) which is included within the Company's creditors, relates to intercompany balances and is not considered to carry liquidity risk because the Board has control over the intercompany repayments.

The carrying value of loan stock investments at 30 June 2015, analysed by expected maturity dates is as follows:

Redemption date	Fully performing £'000	Past due £'000	Impaired £'000	Total £'000
Less than one year	4,672	-	2,652	7,324
1-2 years	312	-	2,484	2,796
2-3 years	160	307	-	467
3-5 years	3,209	760	53	4,022
More than 5 years	2,342	412	-	2,754
	10,695	1,479	5,189	17,363

The carrying value of loan stock investments at 30 June 2014, analysed by expected maturity dates is as follows:

Redemption date	Fully performing £'000	Past due £'000	Impaired £'000	Total £'000
Less than one year	836	160	69	1,065
1-2 years	987	660	1,049	2,696
2-3 years	3,223	83	1,799	5,105
3-5 years	1,052	90	1,839	2,981
More than 5 years	2,591	71	123	2,785
	8,689	1,064	4,879	14,632

Loan stocks can be past due as a result of interest or capital not being paid in accordance with contractual terms.

The average annual interest yield on the total cost of past due loan stocks is 5.1 per cent.

Loan stock with a carrying value of £876,000 had loan stock interest past due of less than 12 months.

Loan stock with a carrying value of £603,000 had loan stock interest past due greater than 12 months but less than 3 years.

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 2015 are stated at fair value as determined by the Directors, with the exception of loans and receivables included within investments, cash, receivables and payables, which are measured 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 2015 the Company has completed the following investment transactions:

• Investment of £585,000 in Radnor House School (Holdings) Limited;
• Investment of £200,000 in Shinfield Lodge Care Limited;
• Investment of £150,000 in Active Lives Care Limited;
• Investment of £65,000 in Ryefield Court Care Limited;
• Investment of £35,000 in MyMeds&Me Limited;
• Investment of £7,000 in Charnwood Pub Company Limited;
• Proceeds of £211,000 received from the repayment of capitalised interest and loan stock by Masters Pharmaceuticals Limited;
• Proceeds of £80,000 received from the repayment of loan stock by Radnor House School (Holdings) Limited;
• Proceeds of £60,000 received from the repayment of loan stock by Kew Green VCT (Stansted) Limited; and
• Proceeds of £22,000 received from the repayment of redemption premium and loan stock by Hilson Moran Holdings Limited.

The following Ordinary shares of nominal value 10 pence were allotted under the Albion VCT Prospectus Top Up Offers 2014/2015 after 30 June 2015:

Date of allotment	Number of Ordinary shares allotted	Issue price (pence per share)	Net consideration received (£'000)	Opening market price per share on allotment date (pence per share)
30 September 2015	2,156,003	32.00	669	28.50

As detailed in note 1, it is the intention of the Directors to liquidate CP2 VCT PLC within a period of at least twelve months from the date on which these financial statements are approved.

20. Contingencies and guarantees
As at 30 June 2015, the Company had the following financial commitments in respect of investments:

• Shinfield Lodge Care Limited; £1,100,000
• Ryefield Court Care Limited; £645,000
• Active Lives Care Limited; £622,000
• Radnor House School (Holdings) Limited; £570,000
• DySIS Medical Limited; £108,000

There are no contingencies or guarantees of the Company as at 30 June 2015 (2014: £nil).

Under the terms of the Transfer Agreement dated 16 January 2006, Crown Place VCT PLC has indemnified its subsidiaries, CP1 VCT PLC and CP2 VCT PLC in respect of all costs, claims and liabilities in exchange for the transfer of assets.

21. Related party transactions
Other than transactions with 100 per cent. owned Group companies and those with the Manager as disclosed in note 4, there are no other related party transactions.

22. Other information
The information set out in this announcement does not constitute the Company's statutory accounts within the terms of section 434 of the Companies Act 2006 for the years ended 30 June 2015 and 30 June 2014, and is derived from the statutory accounts for those financial years, which have been, or in the case of the accounts for the year ended 30 June 2015, which will be, delivered to the Registrar of Companies. The Auditor reported on those accounts; the reports were unqualified and did not contain a statement under s498 (2) or (3) of the Companies Act 2006.

The Company's Annual General Meeting will be held at The City of London Club, 19 Old Broad Street, London, EC2N 1DS on 12 November 2015 at 11:00 am.

23. Publication
The full audited Annual Report and Financial Statements are being sent to shareholders and copies will be made available to the public at the registered office of the Company, Companies House, the National Storage Mechanism and also electronically at www.albion-ventures.co.uk 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.

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

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