Final Results

I enclose the results for the year ended 31 December 2011. The salient points are as follows:

Review of 2011

Capital Gains

Portfolio Review

Dividend

The Board is pleased to recommend an increased annual dividend of 4.95p per ordinary share (2010: 4.9p). This represents an increase of 1per cent over the previous year. Subject to shareholder approval at the Annual General Meeting on 18 April 2012, the dividend will be paid on 24 April 2012 to shareholders on the register on 16 March 2012.

Update

RNS Number : 1907Z

Athelney Trust PLC

13 March 2012

ATHELNEY TRUST PLC - FINAL RESULTS

Athelney Trust plc ("Athelney"), the investor in small companies and junior markets, announces its audited results for the 12 months ended December 31 2011.

Main Points

· Net Asset Value of 123p per share (2010: 142p)

· Recommended dividend of 4.95 per share (2010: 4.9p)

· Gross revenue up 7.9 per cent on a like for like basis at £139,558 (2010: £129,715)

· Gross revenue £139,558 (2010: £142,303)

Chairman Hugo Deschampsneufs said: "Finding good news in the second half of 2011 was as difficult as catching a glimpse of the Higgs boson particle. Nevertheless, there was a decent recovery in the fourth quarter although that still left us down on the year with blue chips outperforming small companies by a country mile.

"Possibly a number of risks so obvious in 2011 will not face today's investors so, given the high level of cash and the reduced attraction of safe havens, markets may well be less sensitive to disppointing news. Given the undervaluation of London and the international markets a rally later in 2012 might surprise us all".

-ends-

For further information:

Robin Boyle, Managing Director

Athelney Trust 020 7628 7937

Paul Quade 07947 186694

CityRoad Communications 020 7248 8010

CHAIRMAN'S STATEMENT AND BUSINESS REVIEW

· Audited Net Asset Value ("NAV") was 123p per share (31 December 2010: 142p) a decrease of 13.3 per cent.

· Gross Revenue decreased by 1.93 per cent compared to 2010 but the amount in 2010 included a special dividend of £12,588 from GVC Holdings, formerly Gaming VC Holdings. If that is excluded altogether then, on a like-for-like basis, Gross Revenue actually rose by 7.59 per cent to £139,558 compared with the full year to 31 December 2010 of £129,715

· Revenue return per ordinary share was 5.4p, a decrease of 5.2 per cent (31 December: 2010: 5.7p).

· Recommended final dividend of 4.95p per share (2010: 4.9p), an increase of 1 per cent.

Each time we must choose between Europe and the open sea, we shall always choose the open sea. - Winston Churchill.

Nations have no permanent friends or allies, they only have permanent interests. - Lord Palmerston.

August 2011 was a shocker: until then things had seemed to be doing moderately well but it became clear in that month that China and India were slowing down, Democrats and Republicans were arguing like the two Kilkenny cats about the U.S. Budget and, horror of horrors, what we had long feared came to pass in that financial contagion spread from Greece to Spain and then Italy. In short, finding good news in the second half of the year was as difficult as catching a glimpse of the Higgs boson particle. Nevertheless, there was a decent recovery in the fourth quarter although that still left us down on the year with blue chips out-performing small companies by a country mile. A few stats for you: the FTSE 100 Index fell by 5.6 per cent (having been down by 21 per cent at one time), whereas the 250 went down by 10.1 per cent, the Fledgling by 12.6 per cent, the Small Cap by 14.9 per cent and, smallest of the lot, the AIM All-share index fell by an awful 25.2 per cent. Nor did many overseas markets do much better - admittedly New York rose by 6.2 per cent but China fell by 22.8 per cent, Japan by 17.5 per cent and Canada by 11.3 per cent. Elsewhere, Venezuela rose by 78.9 per cent but Greece fell by 52.7 per cent, Egypt by 48.9 per cent and Austria by 34.8 per cent.

For the latter half of 2011, investors were worried about five things: the possibility of the US returning to recession, trouble in the Chinese economy, a default in Europe and the subsequent threat to the banks and, finally, were company profits going to fall? Institutional investors therefore held lots of cash and perceived safe havens such as US Treasury bonds. In the last three months of the year, though, there was a slow movement towards so-called defensive equities, particularly those offering a high dividend yield. This change was partly due to frustration with the low returns for holding cash and the thought that central banks were going to keep interest rates down for another several years. Not everything in the garden is rosy but the risk of a recession in America has reduced, as has the possibility of a hard landing in China (retail sales in the latter country were up 18 per cent compared with the same month in 2010). In the Eurozone, the ECB has flooded the market with liquidity, thus reducing the chance of a German or French bank running out of cash and, at the same time, stabilising Italian and Spanish bond yields.

Although at the end of the year the fire-wall had still not been built around these two countries, nor had the Greek refinancing been accomplished, far less a strategy been implemented for kick-starting growth, the recent sovereign downgrades were taken calmly and the reaction to Spanish and Italian budget-tightening has been positive.

However, the European question just will not go away. David Cameron's veto of the proposed new European constitution was the right decision but possibly for the wrong reasons. No doubt he was heavily influenced by his Euro-sceptic back-benchers and by his wish to protect the City of London but the EU has been moving steadily in the wrong direction for years and a line had to be drawn somewhere. 'Without the euro, there can be no Europe,' say Merkel/Sarkozy (to save time, we will call them Merkozy) - I believe this to be totally wrong. Another slogan which I hate is, 'What we need is more Europe, not less.' The enlarged EU has moved in a wholly perverse direction, introducing policies which have destroyed employment and restricted industry. Furthermore, my view of the so-called 'Save the Euro Plan' is that it is likely to be deflationary in exactly those places in the zone already suffering from a fall in output. Nor am I a believer in the proposed Financial Transactions Tax, which would drive business to Switzerland and do wonders for the Singaporean economy. In any case, we already have our own such tax - Stamp Duty.

When people talk about fiscal union in Europe (and these days they talk about little else in the tavernas and trattorias), they do not really mean fiscal union at all. The Germans and the Austrians would not like the idea of merging their tax structures and authorities with those of Greece and Italy: nor would they adopt common benefit levels or health systems. Fiscal union means only common rules for budgetary discipline across the eurozone. Britain and America lead the world in accountancy, they have an independent judiciary, (fairly) honest politicians and excellent statistical services but they have both been unable to enforce self-imposed rules of budget discipline. We are now asked to believe that countries with much weaker political structures will implement budgetary disciplines imposed from outside. The existing Maastricht treaty requires that member states must hold deficits below 3 per cent of GDP and limit borrowings to 60 per cent. This stipulation has been met by the goodly number of three out of 17: Estonia; Finland and Luxembourg. The sanctions allowed by the treaty have never been applied and one would have to be naïve to believe otherwise. Markets are an effective discipline on errant individuals, companies and countries because they cannot easily be lobbied or bullied and their threat to make the cost of new money prohibitive is effective. Fiscal rules do not have this advantage, no matter how cleverly they are written. Need I say more?

When things went wrong for Middle Eastern tribes a couple of thousand years ago, the remedy was to send a sacrificial goat into the wilderness to placate the gods. Today, highly paid CEOs and bank chiefs have replaced the goats and the British general public the gods. Recent trends in pay make bosses hard to sympathise with, especially when newspapers gleefully print that the average CEO of an FTSE 100 company can now expect to earn £4.5m this year so that pay at the top grew by 300 per cent between 1998 and 2010. At the same time, the British worker's real wage has been more-or-less stagnant. All this means that the ratio of executive to average pay rose from 47 to 120 times in 12 years. But bosses' pay has gone up not because of a failure of corporate governance (the usual suspect) but through globalisation. In 1984, when the Index was launched, it was made up largely of local companies serving British customers: now the FTSE 100 is a global index of multinational companies operating in many different industries but especially in oil and mining. FTSE bosses are picked from a global pool and the skills that they need, and the pay that they receive, has changed out of all recognition.

Giving more power to shareholders is not a bad idea but it will not make any difference. Getting and keeping a good boss is more important than the pay that he or she receives. All that we need to do is to scrap incentive plans that reward short-term performance and encourage long-term thinking as is the case in America.

2011 turned out to be the Year of the Very Nasty Surprise with over 30,000 lives and £230 billion having been lost in various man-made and natural disasters compared with 'only' £150 billion in the previous year. The earthquake which sparked a tsunami and the Fukushima nuclear disaster accounted for 22,000 of these lives but only £23 billion of losses were made by Western insurers though total losses were £140 billion. Two tornadoes and one hurricane, all in America, floods in Thailand and the New Zealand earthquake pushed up total losses so that they were only exceeded by the year 2005, when hurricane Katrina hit New Orleans. I think that I'll stick to investing only in motor insurance in future.

Almost inevitably, Patient Reader, much of my statement this year (and probably next) has concerned Europe and cannot have been an easy read so I will finish this section with a quote I found on the internet from my favourite politician (not), Ed Balls, which goes back to his time at the Treasury. We have come to the edge of the abyss and now it is time for a bold step forward. But since the quote came from the internet, it cannot be right, can it?

Results

Gross Revenue decreased by 1.93 per cent compared to 2010but the amount in 2010 included a special dividend of £12,588 from GVC Holdings, formerly Gaming VC Holdings. If that is excluded altogether then, on a like-for-like basis, Gross Revenue actually rose by 7.59 per cent.

Number

Companies paying dividends 75

Companies sold (therefore no true comparison) 13

Companies purchased (therefore no true comparison) 10

Increased total dividends in the year 37

Reduced total dividends in the year 12

No change in dividend 2

During the year the Company realised capital profits arising on the sale of investments in the sum of £158,922 (31 December 2010: £93,459).

Holdings of Begbies Traynor, Brulines, Communisis, Fiberweb, Hansard Global, KCOM, Office 2 Office, Smiths News, St Ives, Timeweave, UK Mail and Wilmington were all purchased for the first time. Additional holdings of ACM Shipping, Air Partner, Jarvis Securities, Matchtech, McKay Securities, Nationwide Accident Repair and Phoenix IT were also acquired. ATH Resources, Chaucer Holdings, Clarke (T), Clarkson, Fenner, Group NBT, Hardy Underwriting Bermuda, HMV, Morson Group, Omega Insurance, RSM Tenon, Smart (J) & Co, Tristel, Umeco and Wincanton were all sold. In addition, a total of nine holdings were top-sliced to provide capital for the new purchases.

UK listed investments

AIM investments

The unaudited NAV at 29 February 2012 was 134.7p whereas the share price on the same day stood at 118.5p. Further updates can be found on www.athelneytrust.co.uk

Prospects

Possibly a number of the risks so obvious in 2011 will not face today's investor so, given the high level of cash and the reduced attraction of safe havens, markets may well be less sensitive to disappointing news. However, the case for predicting a strong equity market in early 2012 is still difficult to make because of the snail-like pace towards a resolution in Europe, political risk in Italy and Greece, a possible change of government in France, the situation in Iran and Syria and the lack of progress in reducing deficits in America and Japan. The outlook may be for a sideways movement in equity markets with a modest upwards move but, importantly, with less risk. Later on in the year, we may find that a solid rally evolves because of a combination of favourable factors such as a cooling of the row with Iran, a Greek restructuring deal is struck, the IMF issues more funds, a weaker euro boosts exports, growth policies are enacted throughout Europe and credible fiscal plans are put in place by America and Japan. Not all of these things will happen but enough might to make investors feel much more confident.

Given the undervaluation of London and international markets, any combination of these factors could trigger a rally later in 2012 which might surprise us all.

H.B. Deschampsneufs

Chairman

12 March 2012

INCOME STATEMENT

(INCORPORATING THE REVENUE ACCOUNT)


			For the Year Ended 31 December 2011			For the Year Ended 31 December 2010

	Note		Revenue	Capital	Total	Revenue		Capital	Total
			£	£	£	£	£		£
(Losses)/gains on investments held at fair value		8	-	(293,815)	(293,815)	-	411,470		411,470
Income from investments		2	139,558	-	139,558	142,303	-		142,303
Investment Management expenses		3	(5,785)	(53,169)	(58,954)	(5,783)	(52,752)		(58,535)
Other expenses		3	(26,477)	(41,610)	(68,087)	(26,778)	(41,018)		(67,796)

Net return/(loss) on ordinary
activities before taxation			107,296	(388,594)	(281,298)	109,742	317,700		427,442

Taxation		5	-	-	-	-	-		-


Net return/(loss) on ordinary activities after taxation 6			107,296	(388,594)	(281,298)	109,742	317,700		427,442

Net return/(loss) per ordinary share		6	5.4p	(19.5p)	(14.1p)	5.7p	16.5p		22.2p


Dividend per ordinary share paid during the year 7			4.9p			4.75p

The total column of this statement is the profit and loss account for the Company.

All revenue and capital items in the above statement derive from continuing operations.

No operations were acquired or discontinued during the above financial years.

A statement of movements of reserves is given in note 12.

A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above Statement.

BALANCE SHEET AS AT 31 DECEMBER 2011

Company Number: 02933559

Note		2011	2010

		£	£
Fixed assets
Investments held at fair value through profit and loss	8	2,375,521	2,766,686

Current assets
Debtors	9	57,349	32,245
Cash at bank and in hand		19,954	32,241
		77,303	64,486

Creditors: amounts falling due within one year	10	(15,131)	(15,010)

Net current assets		62,172	49,476

Total assets less current liabilities		2,437,693	2,816,162

Provisions for liabilities and charges		-	-

Net assets		2,437,693	2,816,162


Capital and reserves
Called up share capital	11	495,770	495,770
Share premium account	12	545,281	545,281
Other reserves (non distributable)
Capital reserve - realised	12	660,826	620,251
Capital reserve - unrealised	12	522,543	951,712
Revenue reserve (distributable)	12	213,273	203,148

Shareholders' funds - all equity		2,437,693	2,816,162

Net Asset Value per share	14	123p	142p

CASHFLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2011

	2011		2010
	£	£	£			£

Net cash (outflow)/inflow from operating activities		(12,466)				77,516

Taxation
Corporation tax paid		-				-

Capital Expenditure and Financial Investment
Purchases of investments	(550,494)		(487,124)
Sales of investments	647,844		316,415


Net cash inflow/(outflow) from Capital Expenditure and Financial Investment		97,350				(170,709)

Equity dividends paid		(97,171)				(85,633)

Financing
Issue of ordinary share capital		-				216,605
Share issue costs		-				(31,859)

(Decrease)/increase in cash in the year		(12,287)				5,920


Reconciliation of operating net revenue to
net cash (outflow)/inflow from operating activities		£				£

Revenue on ordinary activities before taxation		107,296				109,742
(Increase)/decrease in debtors		(25,104)				63,843
Increase/(decrease) in creditors		121				(2,299)
Investment management expenses charged to
capital		(53,169)				(52,752)
Other expenses charged to capital		(41,610)				(41,018)

Net Cash (outflow)/inflow from operating activities		(12,466)				77,516

Reconciliation of net cashflow to movement in net funds
		Net funds at			Net funds at
		31.12.2010		Cashflow	31.12.2011
		£		£	£
Cash at bank and in hand		32,241		(12,287)	19,954

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2011

1. Accounting Policies

1.1 Basis of Preparation of Financial Statements

The financial statements are prepared on a going concern basis under the historical cost convention

as modified by the revaluation of investments held at fair value.

The financial statements are prepared in accordance with the Companies Act 2006, applicable UK accounting standards and the provisions of the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" (SORP) issued by the A.I.C. in January 2009.

1.2 Income

Income from investments including taxes deducted at source is recognised when the right to the return is established (normally the ex-dividend date). UK dividend income is reported net of tax credits in accordance with FRS 16 "Current Tax". Interest is dealt with on an accruals basis.

1.3 Investment Management Expenses

Of the two directors involved in investment management, 10% of their salaries have been charged to revenue and the other 90% to capital. All other investment management expenses have been charged to capital. The Board propose continuing this basis for future years.

1.4 Other Expenses

Expenses (including VAT) and interest payable are dealt with on an accruals basis and charged through the Revenue and Capital Accounts in an allocation that the Board consider to be a fair distribution of the costs incurred.

1.5 Investments

Listed investments comprise those listed on the Official List of the London Stock Exchange. Profits or losses on sales of investments are taken to realised capital reserve. Any unrealised appreciation or depreciation is taken to unrealised capital reserve.

Investments have been classified as "fair value through profit and loss" upon initial recognition.

Subsequent to initial recognition, investments are measured at fair value with changes in fair value recognised in the Income Statement.

Securities of companies quoted on a recognised stock exchange are valued by reference to their quoted bid prices at the close of the year.

1.6 Taxation

The tax effect of different items of income and expenses is allocated between capital and revenue on the same basis as the particular item to which it relates, using the Company's effective rate of tax for the year.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2011

1. Accounting Policies (continued)

1.7 Deferred Taxation

Deferred tax is recognised in respect of all timing differences that have originated but not reversed by the balance sheet date. Deferred tax liabilities are recognised for all taxable timing differences but deferred tax assets are only recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Deferred tax assets and liabilities are calculated at the tax rates expected to be effective at the time the timing differences are expected to reverse. Deferred tax assets and liabilities are not discounted.

1.8 Capital Reserves

Capital Reserve - Realised

Gains and losses on realisation of fixed asset investments are dealt with in this reserve.

Capital Reserve - Unrealised

Increases and decreases in the valuations of fixed asset investments are dealt with in this reserve.

1.9 Dividends

In accordance with FRS 21 "Events after the Balance Sheet Date", dividends are included in the financial statements in the year in which they are paid.

1.10 Share Issue Expenses

The costs associated with issuing shares are written off against any premium arising on the issue of Share Capital.

2. Income

Income from investments
	2011	2010
	£	£

UK dividend income	139,493	142,095
Bank interest	65	208

Total income	139,558	142,303

UK dividend income
	2011	2010
	£	£

UK listed investments	85,531	84,093
AIM investments	53,962	58,002

	139,493	142,095

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2011

3. Return on Ordinary Activities Before Taxation

	2011	2010
	£	£
The following amounts (inclusive of VAT) are included
within investment management and other expenses:

Directors' remuneration:
- Services as a director	17,500	17,500
- Otherwise in connection with management	45,000	45,000

Auditors' remuneration:
- Audit Services - Statutory audit	10,200	9,960
- Audit Services - Statutory audit movement on accruals from
previous years	210	904
- Audit Services - Audit related regulatory reporting	1,050	1,146

Miscellaneous expenses:
- Other wages and salaries	30,365	30,454
- PR and communications	6,230	3,051
- Stock Exchange subscription	6,163	8,061
- Sundry investment management and other expenses	10,323	10,255

	127,041	126,331

4. Employees

	2011	2010
	£	£
Costs in respect of Directors:
Wages and salaries	62,500	62,500
Social security costs	5,729	5,805

	68,229	68,305

Costs in respect of administrator:
Wages and salaries	22,500	22,500
Social security costs	2,136	2,148

	24,636	24,648

Total:
Wages and salaries	85,000	85,000
Social security costs	7,865	7,953

	92,865	92,953

In the year ending 31 December 2010 in addition to the above costs, £5,000 gross wages and £640 Employers National Insurance costs were charged against the Share Premium Account to reflect the administrative work undertaken by the Company Secretary in respect of the issue of Ordinary Shares.
Average number of employees:
Chairman	1	1
Investment	2	2
Administration	1	1
	4	4

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2011

5. Taxation

(i) On the basis of these financial statements no provision has been made for corporation tax (2010: Nil).

(ii) Factors affecting the tax charge for the year

The tax charge for the period is higher than (2010:lower than) the average small company rate of corporation tax in the UK
(20.25 per cent). The differences are explained below:
	2011	2010
	£	£

Total (loss)/ return on ordinary activities before tax	(281,298)	427,442

Total return on ordinary activities multiplied by the average small company rate of corporation tax 20.25% (2010: 21%)	(56,963)	89,763

Effects of:
UK dividend income not taxable	(24,151)	(22,973)
Revaluation of shares not taxable	91,679	(57,347)
Capital gains not taxable	(32,182)	(29,062)
Unrelieved management expenses	21,617	19,619

Current tax charge for the year	-	-

The Company has unrelieved excess revenue management expenses of £43,155 at 31 December 2011 (2010: £31,191) and £102,597 (2010: £102,597) of capital losses for Corporation Tax purposes and which are available to be carried forward to future years. It is unlikely that the Company will generate sufficient taxable profits in the future to utilise these expenses and therefore no deferred tax asset has been recognised.

For the year ended 31 December 2010, the Company received approval from HM Revenue and Customs under Section 1158 of the Corporation Tax Act 2010, therefore the Company was not liable to Corporation Tax on any realised investment gains for 2010. The Directors intend to continue to meet the conditions required to obtain approval and therefore no deferred tax has been provided on any capital gains or losses arising on the revaluation or disposal of investments.

6. Return per Ordinary Share

The calculation of earnings per share has been performed in accordance with FRS 22 "Earnings Per Share".
	2011			2010
	£	£	£	£	£	£
	Revenue	Capital	Total	Revenue	Capital	Total
Attributable return/(loss) on
ordinary activities after taxation	107,296	(388,594)	(281,298)	109,742	317,700	427,442

Weighted average number of shares	1,983,081			1,922,988

Return per ordinary share	5.4p	(19.5p)	(14.1p)	5.7p	16.5p	22.2p

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2011

7. Dividend

	2011	2010
	£	£

Final dividend in respect of 2010 of 4.9p (2009: an interim dividend of 4.75p was paid in respect of 2009 ) per share	97,171	85,633

Set out below is the total dividend payable in respect of the financial year, which is the basis on which the requirements of Section 1158 of the Corporation Tax Act 2010 are considered.

It is recommended that a final dividend of 4.95p (2010: 4.9p) per ordinary share be paid amounting to a total of £98,162. For the year 2010, a final dividend of 4.9p was paid on 14 April 2011 amounting to a total of £97,171.

	2011	2010
	£	£

Revenue available for distribution	107,296	109,742
Final dividend in respect of financial year ended 31 December 2011	(98,162)	(97,171)
Undistributed Revenue Reserve	9,134	12,571

8. Investments

	2011	2010
	£	£
Movements in year
Valuation at beginning of year	2,766,686	2,184,507
Purchases at cost	550,494	487,124
Sales - proceeds	(647,844)	(316,415)
- realised gains on sales	158,922	93,459
(Decrease)/increase in unrealised appreciation	(452,737)	318,011

Valuation at end of year	2,375,521	2,766,686

Book cost at end of year	1,852,978	1,791,407
Unrealised appreciation at the end of the year	522,543	975,279

	2,375,521	2,766,686

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2011

8. Investments (continued)

(Losses)/gains on investments
	2011	2010
	£	£
Realised gains on sales	158,922	93,459
(Decrease)/increase in unrealised appreciation	(452,737)	318,011

	(293,815)	411,470

The purchase costs and sales proceeds above include transaction costs of £5,355 (2010: £2,052) and £3,178 (2010: £1,327) respectively.

9. Debtors

	2011	2010
	£	£
Investment transaction debtors	41,356	17,432
Other debtors	15,993	14,813

	57,349	32,245

10. Creditors: amounts falling due within one year

	2011	2010
	£	£
Social security and other taxes	3,049	2,885
Other creditors	930	173
Accruals and deferred income	11,152	11,952

	15,131	15,010

11. Called Up Share Capital

	2011	2010
	£	£
Authorised
10,000,000 Ordinary Shares of 25p	2,500,000	2,500,000

Allotted, called up and fully paid
1,983,081 Ordinary Shares of 25p	495,770	495,770
(2010: 1,983,081 Ordinary Shares of 25p)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2011

12. Reserves

	2011
	Share	Capital	Capital
	premium	reserve	reserve	Revenue
	account	realised	unrealised	reserve
	£	£	£	£
Balance at 1 January 2011	545,281	620,251	951,712	203,148
Net gains on realisation of investments	-	158,922	-	-
Decrease in unrealised appreciation	-	-	(452,737)	-
Expenses allocated to capital	-	(94,779)	-	-
Profit for the year	-	-	-	107,296
Dividend paid in year	-	-	-	(97,171)
Transfer between capital reserves	-	(23,568)	23,568	-
Balance at 31 December 2011	545,281	660,826	522,543	213,273

13. Financial Instruments

The Company's financial instruments comprise equity investments, cash balances and debtors and creditors that arise directly from its operations, for example, in respect of sales and purchases awaiting settlement. Short term debtors and creditors are excluded from disclosure.

Fixed asset investments (see note 8) are valued at market bid price where available which equates to their fair values. The fair values of all other assets and liabilities are represented by their carrying values in the balance sheet.

The major risks associated with the Company are market and liquidity risk. The Company has established a framework for managing these risks. The directors have guidelines for the management of investments and financial instruments.

Market Risk

Market risk arises from changes in interest rates, valuations awarded to equities, movements in prices and the liquidity of financial instruments.

At the end of the year the Company's portfolio was invested in UK securities with the exception of 3.79 per cent, which was invested in overseas securities.

Liquidity Risk

Liquidity Risk is the risk that the Company may have difficulty in meeting obligations associated with financial liabilities. The Company has no borrowings; therefore there is no exposure to interest rate changes.

The company is able to reposition its investment portfolio when required so as to accommodate liquidity needs.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2011

14. Net Asset Value Per Share

The net asset value per share is based on net assets of £2,437,693 (2010: £2,816,162) divided by 1,983,081 (2010: 1,983,081) ordinary shares in issue at the year end.