Crown Place VCT PLC: Half-yearly report

Crown Place VCT PLC

As required by the UK Listing Authority's Disclosure and Transparency Rule 4.2, Crown Place VCT PLC today makes public its information relating to the Half-yearly Financial Report (which is unaudited) for the six months to 31 December 2016. This announcement was approved by the Board of Directors on 28 February 2017.

The full Half-yearly Financial Report (which is unaudited) for the period to 31 December 2016, will shortly be sent to shareholders. Copies of the full Half-yearly Financial Report will be shown via the Albion Ventures LLP website by clicking www.albion-ventures.co.uk/funds/CRWN.

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 second dividend	10 March 2017
Payment of second dividend	31 March 2017
Financial year end	30 June

Financial highlights

	Six months ended	Six months ended	Year ended
	31 December 2016	31 December 2015	30 June 2016
	(pence per share)	(pence per share)	(pence per share)
Opening net asset value	28.94	30.97	30.97
Revenue return	0.26	0.29	0.59
Capital return/(loss)	2.59	0.25	(0.18)
Total return	2.85	0.54	0.41
Dividends paid	(1.00)	(1.25)	(2.50)
Impact from buy-backs and issue of share capital	0.05	-	0.06
Closing net asset value	30.84	30.26	28.94

Shareholder return 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 31 December 2016:
Total dividends paid	27.80
Decrease in net asset value	(12.56)
Total shareholder return from April 2005 to 31 December 2016	15.24
Shareholder value since launch:
Total dividends paid to 31 December 2016 (i)	52.73
Net asset value as at 31 December 2016	30.84
Total shareholder value as at 31 December 2016	83.57
Current dividend objective:
Pence per share (per annum)	2.00
Dividend yield on net asset value as at 31 December 2016	6.5%

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 at the end of the announcement.

Total shareholder value since launch:

	31 December 2016 (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
the year ended 30 June 2016	2.50
the six months ended 31 December 2016	1.00
Total dividends paid to 31 December 2016	52.73
Net asset value as at 31 December 2016	30.84
Total shareholder value as at 31 December 2016	83.57

In addition to the dividends paid above, the Board has declared a second dividend for the year ending 30 June 2017 of 1 penny per Crown Place VCT PLC share, to be paid on 31 March 2017 to shareholders on the register on 10 March 2017.

Interim management report

Results
In the six month period to 31 December 2016, the Company achieved an encouraging total return of 2.85 pence per share (31 December 2015: 0.54 pence per share) equivalent to a return of 9.8% on opening net assets (31 December 2015: 1.8%). Following payment of the first dividend for the year of 1 penny per share on 30 November 2016, the net asset value as at 31 December 2016 was 30.84 pence per share (30 June 2016: 28.94 pence per share). The total return for the period was £3,670,000, compared to £576,000 at 31 December 2015, of which the revenue profit was £333,000 and the capital profit was £3,337,000. Total expenses including investment management fees resulted in an ongoing charges ratio of 2.5% (31 December 2015: 2.6%).

Portfolio review
During the six month period, the Company deployed a total of £1,553,000 into qualifying investments (31 December 2015: £1,964,000). Of this amount, £728,000 related to three new investments and £825,000 in several existing portfolio companies to support their continuing growth. The new investments are Secured by Design (£220,000), an international automotive consultancy; Oviva (£108,000), a nutritional therapy company; and Convertr Media (£400,000), a company that specialises in digital lead generation software. Further investments in existing portfolio companies included a total of £420,000 to fund the continued construction of three care homes, Active Lives Care, Ryefield Court Care and Shinfield Lodge Care. Proveca (£240,000), Dysis (£87,000), Abcodia (£50,000) and Mirada (£28,000) were the remaining companies to receive further investment during the period.

Investments realised during the period totalled £1,162,000 of which £820,000 related to the sale of the Company's investment in Exco, achieving a return, including interest, of 3 times cost. The remaining £342,000 was mainly made up of loan stock repayments and deferred consideration, and more details can be found in the realisations table below.

The portfolio remains well diversified and benefits from a high proportion of asset-based investments (61% at the period end). Radnor House School (Holdings) continues to grow profitably, with particular progress at its recently acquired Sevenoaks school, and saw a further increase in valuation in the period. The three care home investments based in Hillingdon, Reading and Oxford are all now open and trading according to plan, resulting in strong upwards valuations.

In the growth portfolio, Proveca, Hilson Moran and Egress have continued to grow strongly resulting in an increase in their valuations and are well positioned to deliver further value. Against this, the valuations in Dysis, Abcodia and Cisiv were reduced in the period as a result of their current trading levels.

The investment portfolio sector chart at the end of the announcement illustrates the composition of the portfolio by industry sector. The majority of the investments in the hotels, pubs, health and fitness clubs, education and environmental segments, plus the larger healthcare investments, are backed by freehold or long leasehold assets with no external gearing. 

Dividends
At the time of the announcement of the 2015/16 full year's results in September, we said that we would be recalibrating the Company's dividend policy, and reducing the target pay out from 2.50 pence per share to 2.00 pence per share. Consequently, the first dividend for the current financial year of 1 penny per share was paid on 30 November 2016. A second dividend of 1 penny per share will be paid on 31 March 2017 to shareholders on the register on 10 March 2017. The Board aims to maintain this level of annualised dividend distribution going forward, subject to the availability of cash resources and distributable reserves. Based on the net asset value as at 31 December 2016, this equates to a 6.5% yield (31 December 2015: 8.3%).

Dividends are paid free of tax to shareholders. Qualifying shareholders who elect to participate in the Dividend Reinvestment Scheme will be able, in respect of further dividends, to receive their dividends in the form of new shares rather than cash, which will entitle them to income tax relief at the rate of 30% (new shares will need to be held for at least five years to retain the tax relief). Further details of the Dividend Reinvestment Scheme can be found on the Manager's website www.albion-ventures.co.uk/funds/CRWN.

Risks and uncertainties
Whilst recent higher than forecasted economic growth projections for the UK have confounded the bearish predictions made following the EU referendum, there is still considerable uncertainty as to the long-term impact of the UK's withdrawal from the EU. In addition, rising inflation brings the risk of increased interest rates, which may have a negative effect on consumer and business confidence. Overall investment risk, however, is mitigated through a variety of processes, including our policies of ensuring that the Company has a first charge over portfolio companies' assets wherever possible, and secondly by aiming to achieve balance in the portfolio through the inclusion of sectors that are less exposed to the business and consumer cycles.

Other risks and uncertainties remain unchanged and are as detailed in note 12.

Share buy-backs
It remains the Board's primary objective to maintain sufficient resources for investment in existing and new portfolio companies and for the continued payment of dividends to shareholders. The Board's policy is to buy back shares in the market, subject to the overall constraint that such purchases are in the Company's interest, and it is the Board's intention for such buy-backs to be in the region of a 5% discount to net asset value, so far as market conditions and liquidity permit.

During the period, the Company bought back and held in treasury 1,738,000 shares at a total cost of £455,000, in-line with the share buy-back policy.

Transactions with the Manager
Details of the transactions that took place with the Manager in the period can be found in note 4.

Going concern
In accordance with the Guidance on Risk Management, Internal Control and Related Financial and Business Reporting issued by the Financial Reporting Council in September 2014, the Board has assessed the Company's operation as a going concern. The Company has significant cash and liquid resources, its portfolio of investments is well diversified in terms of sector, and the major cash outflows of the Company (namely investments, buy-backs and dividends) are within the Company's control. Accordingly, after making diligent enquiries the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Directors have adopted the going concern basis in preparing the accounts.  

The Board's assessment of liquidity risk and details of the Company's policies for managing its capital and financial risks remain as detailed on pages 57 to 60 of the Annual Report and Financial Statements for the year ended 30 June 2016.

Albion VCTs Prospectus Top Up Offers 2016/2017
Your Board, in conjunction with the boards of other VCTs managed by Albion Ventures LLP, launched a prospectus top up offer of new Ordinary shares on 29 November 2016. Your Board has elected to exercise the over-allotment facility referred to in the prospectus and accordingly, the maximum amount that may be raised by the Company is £6 million. The Board is pleased to announce that it reached its £6 million limit, which as of 22 February 2017 was fully subscribed and closed. The proceeds will be used to provide further resources at a time when a number of attractive investment opportunities are being seen. Details of the first allotment on 31 January 2017 are shown in note 10.

Outlook
Despite the uncertain broader global environment and the potential disruption resulting from the departure of the UK from the EU, your Company's investment portfolio gives grounds for optimism. It is well balanced, both across sectors and risk classes, and has the potential for further good growth in the healthcare, education and technology sectors. Deal flow, meanwhile, is strong, and the current top up offer will help to fund further investments in promising growth areas.

Richard Huntingford
Chairman
28 February 2017

Responsibility statement

The Directors, Richard Huntingford, James Agnew, Karen Brade and Penny Freer, are responsible for preparing the Half-yearly Financial Report. The Directors have chosen to prepare this Half-yearly Financial Report for the Group in accordance with International Financial Reporting Standards ("EU IFRS") as adopted by the European Union.

In preparing the condensed set of Financial Statements for the period to 31 December 2016 we, the Directors, confirm that to the best of our knowledge:

(a) the condensed set of Financial Statements has been prepared in accordance with International Accounting Standard
(IAS) 34 "Interim Financial Reporting" issued by the International Accounting Standards Board;

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

(c) the condensed set of Financial Statements give a true and fair view in accordance with EU IFRS of the assets, liabilities, financial position and of the profit and loss of the Group for the six months ended 31 December 2016 as required by DTR 4.2.4R, and comply with EU IFRS and Companies Act 2006; and

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

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

By order of the Board of Directors

Richard Huntingford
Chairman
28 February 2017

Portfolio of investments

The following is a summary of non-current asset investments with a value as at 31 December 2016:

				As at 31 December 2016 (unaudited)		As at 30 June 2016 (audited)
Investment name	Nature of business	% Voting rights	% voting rights of AVL* managed companies	Cost £'000	Value £'000	Cost £'000	Value £'000	Change in value for the period** £'000
Unquoted asset-based investments
Radnor House School (Holdings) Limited	Independent schools for children aged 5-18	9.0	50.0	2,881	5,631	2,971	4,933	787
Shinfield Lodge Care Limited	Owner and operator of a residential care home for the elderly in Berkshire	11.8	50.0	2,140	3,233	2,090	2,530	651
Chonais River Hydro Limited	Hydro power project in Scotland	14.0	50.0	1,549	2,159	1,549	1,716	443
Active Lives Care Limited	Owner and operator of a residential care home for the elderly in Oxford	7.5	50.0	1,530	1,969	1,350	1,421	368
The Crown Hotel Harrogate Limited	Owner and operator of the Crown Hotel, Harrogate	15.0	50.0	2,976	1,906	2,976	1,855	51
Ryefield Court Care Limited	Owner and operator of a residential care home for the elderly in Greater London	7.7	50.0	1,160	1,616	970	1,014	412
Gharagain River Hydro Limited	Hydro power project in Scotland	15.0	50.0	1,116	1,335	1,116	1,245	90
Earnside Energy Limited	Anaerobic digestion	7.0	50.0	1,123	1,241	1,123	1,232	9
Kew Green VCT (Stansted) Limited	Owner and operator of the 'Holiday Inn Express' at Stansted Airport	2.0	50.0	805	900	865	776	184
The Street by Street Solar Programme Limited	Photovoltaic installations	4.4	50.0	461	693	461	666	27
Bravo Inns II Limited	Owner and operator of freehold pubs	3.6	50.0	595	662	595	631	31
The Stanwell Hotel Limited	Owner and operator of the Stanwell Hotel at Heathrow Airport	10.8	50.0	1,682	646	1,682	690	(44)
Alto Prodotto Wind Limited	Wind power generator	4.1	50.0	370	568	371	571	(1)
The Charnwood Pub Company Limited	Former owner and operator of freehold pubs	6.9	50.0	481	482	481	481	1
Regenerco Renewable Energy Limited	Photovoltaic installations	3.4	50.0	344	475	344	441	34
Infinite Ventures (Goathill) Limited	Wind power generator	6.1	31.0	256	328	256	317	11
Bravo Inns Limited	Owner and operator of freehold pubs	2.6	50.0	306	225	306	221	4
Harvest AD Limited	Small scale anaerobic digestion project	-	-	164	164	164	164	-
AVESI Limited	Photovoltaic installations	3.8	50.0	123	163	123	151	12
Erin Solar Limited	Photovoltaic installations	5.7	50.0	160	157	160	157	-
Premier Leisure (Suffolk) Limited	Former freehold cinema owner	5.4	47.4	95	114	95	92	22
Greenenerco Limited	Wind power generator	1.9	50.0	65	102	65	102	-
The Weybridge Club Limited	Owner and operator of a freehold health and fitness club in Surrey	1.2	50.0	230	59	230	75	(16)
Total unquoted asset- based investments				20,612	24,828	20,343	21,481	3,076

							As at 31 December 2016 (unaudited)		As at 30 June 2016 (audited)
Investment name	Nature of business		% voting rights		% voting rights of AVL* managed companies		Cost £'000	Value £'000	Cost £'000	Value £'000	Change in value for the period** £'000
Unquoted growth investments
ELE Advanced Technologies Limited	Manufacturer of precision engineering components		41.9		41.9		1,050	1,890	1,050	1,910	(20)
Proveca Limited	Repositioning of paediatric medicines		6.7		54.1		586	1,197	346	591	366
Mirada Medical Limited	Developer of medical imaging software		6.5		45.0		321	745	293	699	18
Blackbay Limited	Provider of mobile data solutions		4.1		34.9		463	521	463	476	45
Process Systems Enterprise Limited	Provider of process systems modelling solutions		1.4		20.7		138	435	138	392	43
Hilson Moran Holdings Limited	Multi- disciplinary engineering consultancy		3.1		34.7		91	426	104	338	106
Convertr Media Limited	Digital lead generation software		4.3		27.0		400	400	-	-	-
MyMeds &Me Limited	Software for managing pharmaceutical adverse events		3.3		29.9		255	377	255	367	10
DySIS Medical Limited	Medical devices for the detection of epithelial cancers		2.9		20.7		802	362	716	401	(125)
Masters Pharmaceuticals Limited	International distribution of specialist pharmaceuticals		2.8		19.7		211	347	211	417	(70)
Relayware Limited	Business collaboration and communication solutions		1.1		11.6		324	323	324	318	5
Aridhia Informatics Limited	Healthcare informatics and analysis		2.4		22.3		377	254	377	275	(21)
Egress Software Technologies Limited	Provider of cloud-based email and file encryption software		0.8		22.0		80	230	80	132	98
Secured by Design Limited	Provider and consultancy of automotive technology research		1.5		10.0		220	221	-	-	1
Grapeshot Limited	Provider of digital marketing software		0.7		13.9		141	183	141	152	31
Memsstar Limited	Refurbisher of semi- conductor fabrication equipment		3.0		44.7		130	170	130	168	2
AMS Sciences Limited	Drug development services to the life- science industries		3.7		49.6		193	137	193	80	57
Black Swan Data Limited	Analytical platform for market research		0.4		2.9		115	115	115	115	-
Cisiv Limited	Web-based solutions for healthcare data capture and management		2.8		28.9		216	111	216	215	(104)
Oviva AG	Provides medical nutritional counselling		1.4		9.1		108	108	-	-	-
OmPrompt Holdings Limited	Business to business integration software		0.8		19.7		100	104	100	103	1
Oxsensis Limited	Developer and producer of high temperature sensors		1.4		20.6		224	99	224	99	-
Abcodia Limited	Services for validation and discovery of serum biomarkers		1.7		19.5		227	97	177	158	(111)
Palm Tree Technology Limited	Software company		0.2		0.7		102	62	102	62	-
Panaseer Limited	Provider of cyber security threat analysis		1.0		7.8		50	50	50	50	-
InCrowd Sports Limited	Provides mobile platform for for brands to access fans at live events		1.0		6.8		42	42	42	42	-
Dickson Financial Services Limited	Commercial insurance broker, trading as Innovation Broking		2.7		30.0		27	37	27	27	10
CSS Group Limited	Drinks distributor to the travel sector		2.3		15.0		28	27	28	28	(1)
Sandcroft Avenue Limited	Provider of online gym passes, trading as Payas Ugym.com		0.2		5.6		20	17	20	22	(5)
Elements Software Limited	Provider of traceability software solutions		0.7		4.5		4	-	4	-	-
Total unquoted growth investments							7,045	9,087	5,926	7,637	336
Total unquoted investments							27,657	33,915	26,269	29,118	3,412

				As at 31 December 2016 (unaudited)		As at 30 June 2016 (audited)
Investment name	Nature of business	% voting rights	% voting rights of AVL* managed companies	Cost £'000	Value £'000	Cost £'000	Value £'000	Change in the value for the period** £'000
Quoted investments
Mi-Pay Group PLC	Provider of mobile payment services	3.3	34.7	713	273	713	301	(28)
Augean PLC	Waste management	0.4	0.4	593	193	593	162	31
Avanti Communications Group plc	Supplier of satellite communications	0.1	0.1	136	14	136	37	(23)
ComOps Limited	Provider of workforce management solutions software	0.2	1.4	13	11	13	18	(7)
Total quoted investments				1,455	491	1,455	518	(27)
Total investments				29,112	34,406	27,724	29,636	3,385
Total change in value of investments								3,385
Movement in loan stock accrued interest								(127)
Unrealised gains sub-total								3,258
Realised gains in current period								333
Total gains on investments as per consolidated statement of comprehensive income								3,591

* AVL is Albion Ventures LLP
** As adjusted for additions and disposals between the two accounting periods

The total comparative cost and valuations for 30 June 2016 do not agree to the Annual Report and Financial Statements for the year ended 30 June 2016 as the above list does not include brought forward investments that were fully disposed of in the period.

Non-current  asset realisations	Cost £'000	Opening carrying value £'000	Disposal proceeds £'000	Total realised gain £'000	Gain on opening value £'000
Exco Intouch Limited	290	659	820	530	161
Radnor House School (Holdings) Limited (loan stock repayment)	90	90	90	-	-
Kew Green VCT (Stansted) Limited (loan stock repayment)	60	60	60	-	-
UCTAL Limited	1	1	54	53	53
Hilson Moran Holdings Limited (loan stock repayment)	13	18	18	5	-
Alto Prodotto Wind Limited (loan stock repayment)	1	1	1	-	-
Escrow adjustments	-	-	119	119	119
Total realisations	455	829	1,162	707	333

Condensed consolidated statement of comprehensive income

		Unaudited				Unaudited			Audited
		six months ended 31 December 2016				six months ended 31 December 2015			year ended 30 June 2016
		Revenue	Capital	Total		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000		£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments	2	-	3,591	3,591	-		481	481	-	238	238
Investment income and deposit interest	3	566	-	566	530		-	530	1,114	-	1,114
Investment management fees	4	(85)	(254)	(339)		(72)	(219)	(291)	(149)	(448)	(597)
Other expenses		(148)	-	(148)	(144)		-	(144)	(289)	-	(289)
Profit/(loss) before taxation		333	3,337	3,670	314		262	576	676	(210)	466
Taxation		-	-	-	-		-	-	-	-	-
Profit/(loss) and total comprehensive income/(loss) attributable to shareholders		333	3,337	3,670	314		262	576	676	(210)	466
Basic and diluted earnings/(loss) per Ordinary share (pence)*	6	0.26	2.59	2.85	0.29		0.25	0.54	0.59	(0.18)	0.41

* excluding treasury shares

Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 31 December 2015 and the audited statutory accounts for the year ended 30 June 2016.

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

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 reserve 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 parent company.
Condensed consolidated balance sheet

		Unaudited	Audited
		31 December 2016	30 June 2016
	Notes	£'000	£'000
Non-current assets
Investments	7	34,406	30,296
Current assets
Trade and other receivables less than one year		492	476
Cash and cash equivalents		4,855	6,896
		5,347	7,372
Total assets		39,753	37,668
Current liabilities
Trade and other payables less than one year		(233)	(283)
Total assets less current liabilities		39,520	37,385
Equity attributable to equity holders
Ordinary share capital	8	14,178	14,110
Share premium		14,006	13,872
Capital redemption reserve		1,415	1,415
Unrealised capital reserve		5,016	2,131
Realised capital reserve		(448)	(900)
Other distributable reserve		5,353	6,757
Total equity shareholders' funds		39,520	37,385
Basic and diluted net asset value per share (pence)*		30.84	28.94

* excluding treasury shares

Comparative figures have been extracted from the audited statutory accounts for the year ended 30 June 2016.

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

These Financial Statements were agreed by the Board of Directors, and authorised for issue on 28 February 2017 and were signed on its behalf by

Richard Huntingford
Chairman

Company number 03495287

Condensed Company balance sheet

		Unaudited	Audited
		31 December 2016	30 June 2016
	Notes	£'000	£'000
Non-current assets
Investments	7	34,406	30,296
Investment in subsidiary undertakings		6,613	6,823
		41,019	37,119
Current assets
Investment in subsidiary undertakings		8,230	8,230
Trade and other receivables less than one year		488	436
Cash and cash equivalents		4,839	6,880
		13,557	15,546
Total assets		54,576	52,665
Creditors: amounts falling due within one year
Trade and other payables less than one year		(15,056)	(15,280)
Total assets less current liabilities		39,520	37,385
Equity attributable to equity holders
Ordinary share capital	8	14,178	14,110
Share premium		14,006	13,872
Capital redemption reserve		1,415	1,415
Unrealised capital reserve		4,801	2,127
Realised capital reserve		(657)	(1,109)
Other distributable reserve		5,777	6,970
Total equity shareholders' funds		39,520	37,385
Basic and diluted net asset value per share (pence)*		30.84	28.94

* excluding treasury shares

Comparative figures have been extracted from the audited statutory accounts for the year ended 30 June 2016.

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

These Financial Statements were approved by the Board of Directors, and authorised for issue on 28 February 2017 and were signed on its behalf by

Richard Huntingford
Chairman

Company number 03495287

Condensed consolidated statement of changes in equity

	Ordinary share capital £'000	Share premium £'000	Capital redemption reserve £'000	Unrealised capital reserve £'000	Realised capital reserve £'000	Other distributable reserve £'000	Total £'000
As at 1 July 2016	14,110	13,872	1,415	2,131	(900)	6,757	37,385
Profit and total comprehensive income	-	-	-	3,258	79	333	3,670
Transfer of previously unrealised gains on sale or write off of investments	-	-	-	(373)	373	-	-
Dividends paid	-	-	-	-	-	(1,282)	(1,282)
Purchase of shares for treasury (including costs)	-	-	-	-	-	(455)	(455)
Issue of equity	68	135	-	-	-	-	203
Cost of issue of equity	-	(1)	-	-	-	-	(1)
As at 31 December 2016	14,178	14,006	1,415	5,016	(448)	5,353	39,520
As at 1 July 2015	11,767	9,234	1,415	1,612	(171)	9,224	33,081
Profit/(loss) and total comprehensive  income	-	-	-	555	(293)	314	576
Transfer of previously unrealised gains on sale of investments	-	-	-	(369)	369	-	-
Dividends paid	-	-	-	-	-	(1,361)	(1,361)
Purchase of shares for treasury (including costs)	-	-	-	-	-	(215)	(215)
Issue of equity	279	605	-	-	-	-	884
Cost of issue of equity	-	(22)	-	-	-	-	(22)
As at 31 December 2015	12,046	9,817	1,415	1,798	(95)	7,962	32,943
As at 1 July 2015	11,767	9,234	1,415	1,612	(171)	9,224	33,081
Profit/(loss) and total comprehensive income	-	-	-	422	(632)	676	466
Transfer of previously unrealised losses on sale or write off of investments	-	-	-	97	(97)	-	-
Dividends paid	-	-	-	-	-	(2,837)	(2,837)
Purchase of shares for treasury (including costs)	-	-	-	-	-	(306)	(306)
Issue of equity	2,343	4,819	-	-	-	-	7,162
Cost of issue of equity	-	(181)	-	-	-	-	(181)
As at 30 June 2016	14,110	13,872	1,415	2,131	(900)	6,757	37,385

Condensed Company statement of changes in equity

	Ordinary share capital £'000	Share premium £'000	Capital redemption reserve £'000	Unrealised capital reserve £'000	Realised capital reserve* £'000	Other distributable reserve* £'000	Total £'000
As at 1 July 2016	14,110	13,872	1,415	2,127	(1,109)	6,970	37,385
Profit and total comprehensive income	-	-	-	3,258	79	544	3,881
Revaluation of investment in subsidiaries	-	-	-	(211)	-	-	(211)
Transfer of previously unrealised gains on sale of investments	-	-	-	(373)	373	-	-
Dividends paid	-	-	-	-	-	(1,282)	(1,282)
Purchase of shares for treasury (including costs)	-	-	-	-	-	(455)	(455)
Issue of equity	68	135	-	-	-	-	203
Cost of issue of equity	-	(1)	-	-	-	-	(1)
As at 31 December 2016	14,178	14,006	1,415	4,801	(657)	5,777	39,520
As at 1 July 2015	11,767	9,234	1,415	1,647	(380)	9,398	33,081
Profit/(loss) and total comprehensive income	-	-	-	555	(293)	556	818
Revaluation of investment in subsidiaries	-	-	-	(242)	-	-	(242)
Transfer of previously unrealised gains on sale of investments	-	-	-	(369)	369	-	-
Dividends paid	-	-	-	-	-	(1,361)	(1,361)
Purchase of shares for treasury (including costs)	-	-	-	-	-	(215)	(215)
Issue of equity	279	605	-	-	-	-	884
Cost of issue of equity	-	(22)	-	-	-	-	(22)
As at 31 December 2015	12,046	9,817	1,415	1,591	(304)	8,378	32,943
As at 1 July 2015	11,767	9,234	1,415	1,647	(380)	9,398	33,081
Profit/(loss) and total comprehensive income	-	-	-	422	(632)	715	505
Revaluation of investment in subsidiaries	-	-	-	(39)	-	-	(39)
Transfer of previously unrealised losses on disposal of investments	-	-	-	97	(97)	-	-
Dividends paid	-	-	-	-	-	(2,837)	(2,837)
Purchase of shares for treasury (including costs)	-	-	-	-	-	(306)	(306)
Issue of equity	2,343	4,819	-	-	-	-	7,162
Cost of issue of equity	-	(181)	-	-	-	-	(181)
As at 30 June 2016	14,110	13,872	1,415	2,127	(1,109)	6,970	37,385

* These reserves amount to £5,120,000 (31 December 2015: £8,074,000; 30 June 2016: £5,861,000) which is considered distributable.

Condensed consolidated statement of cash flows

		Unaudited six months ended 31 December 2016 £'000	Unaudited six months ended 31 December 2015 £'000	Audited year ended 30 June 2016 £'000
Cash flow from operating activities
Investment income received		397	540	948
Deposit interest received		32	22	47
Dividend income received		15	6	38
Investment management fees paid		(328)	(290)	(579)
Other cash payments		(191)	(150)	(283)
Net cash flow from operating activities		(75)	128	171
Cash flow from investing activities
Purchase of non-current asset investments		(1,553)	(1,964)	(4,566)
Disposal of non-current asset investments		1,136	2,456	2,879
Net cash flow from investing activities		(417)	492	(1,687)
Cash flow from financing activities
Issue of share capital		-	1,271	7,164
Cost of issue of equity		-	-	(2)
Equity dividends paid		(1,078)	(1,166)	(2,413)
Purchase of shares for treasury		(471)	(228)	(303)
Transfer of CP2 VCT PLC cash to liquidator		-	-	(40)
Net cash flow from financing activities		(1,549)	(123)	4,406
(Decrease)/increase in cash and cash equivalents		(2,041)	497	2,890
Cash and cash equivalents at the start of the period		6,896	4,006	4,006
Cash and cash equivalents at the end of the period		4,855	4,503	6,896

Condensed Company statement of cash flows

		Unaudited six months ended 31 December 2016 £'000	Unaudited  six months ended  31 December 2015 £'000	Audited year ended 30 June 2016 £'000
Cash flow from operating activities
Investment income received		397	540	948
Deposit interest received		32	22	47
Dividend income received		649	697	943
Investment management fees paid		(328)	(290)	(579)
Intercompany interest paid		(634)	(691)	(905)
Other cash payments		(191)	(150)	(283)
Net cash flow from operating activities		(75)	128	171
Cash flow from investing activities
Purchase of non-current asset investments		(1,553)	(1,964)	(4,566)
Disposal of non-current asset investments		1,136	2,456	2,879
Net cash flow from investing activities		(417)	492	(1,687)
Cash flow from financing activities
Issue of share capital		-	1,271	7,164
Cost of issue of equity		-	-	(2)
Equity dividends paid		(1,078)	(1,166)	(2,413)
Purchase of shares for treasury (including costs)		(471)	(228)	(303)
Net cash flow from financing activities		(1,549)	(123)	4,446
(Decrease)/increase in cash and cash equivalents		(2,041)	497	2,930
Cash and cash equivalents at the start of the period		6,880	3,950	3,950
Cash and cash equivalents at the end of the period		4,839	4,446	6,880

Notes to the unaudited condensed 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 FRS 101 "Reduced Disclosure Framework" for the Company.

Basis of accounting
The Half-yearly Financial Report has 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). This Half-yearly Financial Report has been prepared in accordance with IAS 34 'Interim Financial Reporting' in the case of the Group, and in accordance with FRS 104 'Interim Financial Reporting' ("FRS 104") 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 2014, 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 the companies reporting under IFRS and UK GAAP. The information in this document does not include all of the disclosures required by EU IFRS and the SORP in full annual Financial Statements, and it should be read in conjunction with the consolidated Financial Statements of the Group for the year ended 30 June 2016. This Half-yearly financial information has been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated Financial Statements for the year ended 30 June 2016.

These Financial Statements are presented in Sterling to the nearest thousand.The accounting policies applied to the Half-yearly Financial Report have been consistently applied in current and prior periods and are those applied in the Annual Report and Financial Statements for the year ended 30 June 2016.

Basis of consolidation
The Group consolidated Financial Statements incorporate the Financial Statements of the Company for the period ended 31 December 2016 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 period dealt within the accounts of the Group is £3,881,000 (31 December 2015: £818,000; 30 June 2016: £505,000). 

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 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 and Company's Half-yearly Financial Report requires estimates, assumptions and judgements to be made, which affect the reported results and balances. Actual outcomes may differ from these estimates, with a consequential impact on the results of future periods. Those estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are those used to determine the fair value of investments at fair value through profit or loss ('FVTPL').

The valuation of investments held at FVTPL or measured in assessing any impairment of loan stocks is determined by using valuation techniques. The Group and the Company use judgements to select a variety of methods and makes assumptions that are mainly based on market conditions at each balance sheet date.

Investment in subsidiaries
Investments in subsidiaries are revalued at the balance sheet date based on the underlying net assets of the subsidiary. 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. As the tax losses were depleted, the Directors decided to place CP2 VCT PLC into Members' Voluntary Liquidation. BDO LLP, were appointed to undertake this task on 14 December 2015. The final meeting of CP2 VCT PLC was held on 8 December  2016 and will be struck from the Companies House register three months after this meeting.

The above decision does not affect CP1 VCT PLC, which continues 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', quoted and unquoted equity, debt issued at a discount and convertible bonds are designated as 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.

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.

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 as a whole on a unit of account basis.

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 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.

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", 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.

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". Taxation associated with capital expenses is applied in accordance with the SORP. Deferred taxation is provided in full on timing differences, 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 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 "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 the shares, less issue costs and transfers to the other distributable reserve.

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

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

Realised capital reserve
The following are disclosed in this reserve:

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

Other distributable reserve
This reserve accounts for movements from the revenue column of the Statement of comprehensive income, the payment of dividends, the buyback of shares and other non-capital realised movements.

2. Gains on investments

	Unaudited six months ended 31 December 2016 £'000	Unaudited six months ended  31 December 2015 £'000	Audited year ended 30 June 2016 £'000
Unrealised gains on investments held at fair value through profit or loss	3,060	396	288
Unrealised reversal of impairments measured at amortised cost	198	159	133
Unrealised gains on investments	3,258	555	422
Realised gains/(losses) on investments held at fair value through profit or loss	333	(45)	(152)
Realised losses on investments measured at amortised cost	-	(29)	(32)
Realised gains/(losses) on investments	333	(74)	(184)
	3,591	481	238

Investments measured at amortised cost are unquoted loan stock investments.

3. Investment income and deposit interest

	Unaudited six months ended 31 December 2016 £'000	Unaudited six months ended 31 December 2015 £'000	Audited year ended 30 June 2016 £'000
Income recognised on investments held at fair value through profit or loss
UK dividend income	15	6	38
Interest on convertible bonds and debt issued at a discount	274	181	469
	289	187	507
Income recognised on investments measured at amortised cost
Return on loan stock investments	250	321	557
Bank deposit interest	27	22	50
	277	343	607
	566	530	1,114

4. Investment management fees

	Unaudited six months ended  31 December 2016			Unaudited six months ended 31 December 2015			Audited year ended 30 June 2016
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Investment management fee	85	254	339	72	219	291	149	448	597

Further details of the management agreement under which the investment management fee is paid are given on pages 10 and 11 of the Strategic report in the Annual Report and Financial Statements for the year ended 30 June 2016.

During the period, services of a total value of £364,000 (six months ended 31 December 2015: £316,000; year ended 30 June 2016: £647,000) were purchased by the Company from Albion Ventures LLP; comprising £339,000 management fee and £25,000 administration fee. At the financial period end, the amount due to Albion Ventures LLP disclosed as payables was £186,500 (administration fee accrual £12,500, management fee accrual £174,000) (31 December 2015: £157,500; 30 June 2016: £174,500).

Albion Ventures LLP is, from time to time, eligible to receive transaction fees and Directors' fees from portfolio companies. During the period to 31 December 2016, fees of £72,100 attributable to the investments of the Company were received pursuant to these arrangements (31 December 2015: £69,700; 30 June 2016: £125,000).

Albion Ventures LLP, the Manager, holds 56,152 Ordinary shares in the Company.

5. Dividends

	Unaudited six months ended 31 December 2016 £'000	Unaudited six months ended 31 December 2015 £'000	Audited year ended  30 June 2016 £'000
First dividend paid on 30 November 2015 (1.25 pence per share)	-	1,361	1,361
Second dividend paid on 31 March 2016 (1.25 pence per share)	-	-	1,476
First dividend paid on 30 November 2016 (1 penny per share)	1,282	-	-
	1,282	1,361	2,837

In addition, the Board has declared a second dividend of 1 penny per share for the year ending 30 June 2017. This will be paid on 31 March 2017 to shareholders on the register on 10 March 2017. This is expected to amount to approximately £1,406,000.

6. Basic and diluted return per share

	Unaudited six months ended 31 December 2016			Unaudited six months ended 31 December 2015			Audited year ended 30 June 2016
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
Return/(loss) attributable to equity shares (£'000)	333	3,337	3,670	314	262	576	676	(210)	466
Weighted average shares in issue (excluding treasury shares)	128,752,216			107,785,226			114,998,634
Return/(loss) attributable per share (pence) (basic and diluted)	0.26	2.59	2.85	0.29	0.25	0.54	0.59	(0.18)	0.41

The return per share has been calculated excluding treasury shares of 13,653,410 (31 December 2015: 11,595,410; 30 June 2016: 11,915,410).

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.

7. Non-current asset investments

	Unaudited 31 December 2016 £'000	Audited 30 June 2016 £'000
Investments held at fair value through profit or loss
Unquoted equity and preference shares	16,150	11,542
Quoted equity	491	518
Discounted debt and convertible loan stock	8,354	8,903
	24,995	20,963
Investments measured at amortised cost
Unquoted loan stock	9,411	9,333
	34,406	30,296

8. Ordinary share capital

	Unaudited 31 December 2016 £'000	Audited 30 June 2016 £'000
Allotted, called up and fully paid
141,784,834 Ordinary shares of 10p each (30 June 2016: 141,097,990)	14,178	14,110
Voting rights
128,131,424 Ordinary shares of 10p each (30 June 2016: 129,182,580)

The Company purchased 1,738,000 Ordinary shares for treasury during the period at a cost of £455,000 (year ended 30 June 2016: 1,063,000 shares at a cost of £306,000). The total number of shares held in treasury as at 31 December 2016 was 13,653,410 (30 June 2016: 11,915,410).

Under the terms of the Dividend Reinvestment Scheme Circular dated 26 February 2009, the following new Ordinary shares of nominal value 10 pence per share were allotted during the period:

Allotment date	Number of shares allotted	Aggregate nominal value of shares (£'000)	Issue price (pence per share)	Net invested (£'000)	Opening market price on allotment date (pence per share)
30 November 2016	686,844	69	29.70	202	27.00

9. Contingencies and guarantees
There are no external contingencies for or guarantees by the Group or Company as at 31 December 2016 (30 June 2016: nil).

As at 31 December 2016 the Company had no financial commitments in respect of investments (30 June 2016: £529,000).

Under the terms of the Transfer Agreement dated 16 January 2006, the Company 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.

10. Post balance sheet events
Since 31 December 2016, the Company has completed the following material transactions:

• Investment of £83,000 in Black Swan Data Limited;
• Proceeds of £121,000 from the sale of AMS Sciences Limited;
• Proceeds of £90,000 received from the repayment of loan stock by Radnor House School (Holdings) Limited.

Albion VCTs Prospectus Top Up Offers 2016/2017
On 29 November 2016 the Company announced the publication of a prospectus in relation to an offer for subscription for new Ordinary shares. A Securities Note, which forms part of the prospectus, has been sent to shareholders.

A copy of the prospectus may be obtained from www.albion-ventures.co.uk.

The following new Ordinary shares of nominal value 10 pence per share were allotted under the Offers since the period end:

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 date (pence per share)
31 January 2017	2,436,624	243	30.40	726	28.50
31 January 2017	987,718	99	30.50	294	28.50
31 January 2017	8,997,127	900	30.70	2,679	28.50
	12,421,469	1,242		3,699

The Board is pleased to announce that it has reached its £6 million limit under its Offer, which as of 22 February 2017 was fully subscribed and has now closed.

11. 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.

12. Risks and uncertainties
The Board considers that the Company faces the following principal risks and uncertainties:

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

To reduce this risk, in addition to investing equity in portfolio companies, the Company often invests in 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.

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

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

As described in note 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 judgements about the business itself, its market and the environment in which it operates, together with the state of the mergers and acquisitions market, stock market conditions and other factors. In making these judgements the valuation takes into account all known material facts up to the date of approval of the Financial Statements by the Board. The sensitivity of these assumptions  are commented on further in notes 9 and 16 of the Annual Report and Financial Statements for the year ended 30 June 2016.  All other unquoted loan stock is measured at amortised cost. The values of a number of investments are also underpinned by independent third party professional valuations.

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

To reduce this risk, the Board has appointed the Manager, which has a team with significant experience in venture capital trust management, used to operating within the requirements of the venture capital trust legislation. In addition, to provide further formal reassurance, the Board has appointed Philip Hare & Associates LLP as its taxation adviser who 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.

5. 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 Philip Hare & Associates 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.

6. 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.

7. 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 has access to the internal audit partner of PKF Littlejohn LLP to discuss the 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 Risk Guidance report are detailed on page 31 of the Annual Report and Financial Statements for the year ended 30 June 2016.

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

8. 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 on pages 10 and 11 of the Annual Report and Financial Statements for the year ended 30 June 2016). 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.

9. 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 16 of the Annual Report and Financial Statements for the year ended 30 June 2016.

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.

10. 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.

13. Other information
The information set out in the Half-yearly Financial Report does not constitute the Group's statutory accounts within the terms of section 434 of the Companies Act 2006 for the periods ended 31 December 2016 and 31 December 2015 and is unaudited. The financial information for the year ended 30 June 2016 does not constitute statutory accounts within the terms of section 434 of the Companies Act 2006 and is derived from the statutory accounts for the financial year, which have been delivered to the Registrar of Companies. The Auditor's report on those accounts was unqualified and did not contain statements under s498 (2) or (3) of the Companies Act 2006.

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

Shareholder returns for CP1 VCT PLC (previously Murray VCT PLC) and CP2 VCT PLC (previously Murray VCT 2 PLC) (unaudited)

	Proforma (i) Murray VCT PLC	Proforma (i) Murray VCT 2 PLC
	(pence per share)	(pence per share)
Shareholder return from launch to April 2005 (date that Albion Ventures was appointed investment manager):
Total dividends paid to 6 April 2005 (ii)	30.36	30.91
Decrease in net asset value	(69.90)	(64.50)
Total shareholder return to 6 April 2005	(39.54)	(33.59)
Shareholder return from April 2005 to 31 December 2016:
Total dividends paid	20.07	23.81
Decrease in net asset value	(8.15)	(9.25)
Total shareholder return from April 2005 to 31 December 2016	11.92	14.56
Shareholder value since launch:
Total dividends paid to 31 December 2016 (ii)	50.43	54.72
Net asset value as at 31 December 2016	21.95	26.25
Total shareholder value as at 31 December 2016	72.38	80.97
Current dividend objective:
Pence per share (per annum)	1.42	1.70
Dividend yield on net asset value as at 31 December 2016	6.5%	6.5%

Notes
(i) The proforma shareholder returns presented above are based on the dividends paid to shareholders before the merger and the pro-rata net asset value per share and pro-rata dividends per share paid to 31 December 2016 since the merger. This pro-forma is based upon the proportion of shares received by Murray VCT PLC (now renamed CP1 VCT PLC) and Murray VCT 2 PLC (now renamed CP2 VCT PLC) shareholders at the time of the merger with Crown Place VCT PLC on 13 January 2006.
(ii) Prior to 6 April 1999, venture capital trusts were able to add 20 per cent. to dividends and figures for the period up until 6 April 1999 are included at the gross equivalent rate actually paid to shareholders.

LEI Code 213800SYIQPA3L3T1Q68

Crown Place VCT PLC Split of investment portfolio by sector

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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