RNS Number:2495F
Crown Place VCT PLC
27 June 2006
27 June 2006
CROWN PLACE VCT PLC
Preliminary announcement of final results for the year ended 28 February 2006
Crown Place VCT PLC ("the Company"), managed by Close Venture Management
Limited, today announces unaudited preliminary results for the year ended 28
February 2006. The announcement has been approved by the Board of Directors on
27 June 2006
Financial Highlights
------------------------------------------------------------------------------------------------
Shareholder value since launch Proforma (i) Proforma (i) Crown Place
Previous holders of shares in: Murray VCT PLC Murray VCT 2 PLC VCT PLC*
------------------------------------------------------------------------------------------------
Dividends per share paid to date (pence
per share) (ii) 31.36 31.91 25.93
Net asset value (pence per share) as at
28 February 2006 (i) 30.60 36.59 43.00
------------------------------------------------------------------------------------------------
61.96 68.50 68.93
------------------------------------------------------------------------------------------------
(i) The proforma shareholder value is based on the dividends paid to date for
a share with a pro-rata net asset value per share 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.
(ii) Prior to 6 April 1999, venture capital trusts were able to add 20% 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
In addition to the dividends paid above, the Directors have declared a first
dividend of 1.25 pence per Crown Place VCT PLC share to be paid out of realised
capital gains, subject to H M Revenue & Customs approval.
For further information, please contact:
Patrick Reeve/ Emil Gigov John West/ Clemmie Carr
Close Venture Management Limited Tavistock Communications
Tel: 020 7422 7830 Tel: 020 7920 3150
www.closeventures.co.uk
CHAIRMAN'S STATEMENT
Overview
In this, my first Chairman's statement to shareholders of Crown Place VCT PLC, I
am pleased to report the Group's net asset value of 43.0 pence per share as at
28 February 2006, compared to 41.9 pence per share reported at the interim stage
and 42.4 pence per share as at 28 February 2005 (or 43.4 pence per share as
restated under the new accounting standards mentioned below). The increase in
the net asset value per share over the six months to 28 February 2006 is after
the payment of a 1.00 pence per share dividend on 9 September 2005. The Group
reports a revenue profit for the year of #562,000 before non-recurring operating
items and a revenue operating loss of #187,000 after such non-recurring items
have been taken into account. The total profit after taxation for the year is
#923,000.
The Board, after taking advice, has decided to change the Company's year end to
30 June. For the period 1 March 2006 to 30 June 2007 the Board intends to pay
three dividends, the first dividend being 1.25 pence per share payable out of
gross realised capital profits. This dividend is expected to be paid to
shareholders in September 2006, subject to receiving clearance from HM Revenue &
Customs. It is the Board's policy to significantly increase the dividend from
the 1.00 pence per share paid in the previous financial year.
The year to 28 February 2006 has been a period of great change for the Company.
In April 2005 the Company appointed Close Venture Management Limited as the new
Investment Manager. Later in the summer, the Board of the Company became the
subject of a hostile shareholder action by a small group of shareholders.
Attempts to remove the Board were decisively defeated by shareholders in an
extraordinary general meeting held in September 2005. The cost of defending this
hostile action is shown as part of non-recurring operating expenses.
At an extraordinary general meeting held in December 2005 the shareholders
approved the merger of the Company with Murray VCT PLC and Murray VCT 2 PLC
under a scheme of arrangement; the Company's name was subsequently changed to
Crown Place VCT PLC. Following court approval, the merger became effective on 13
January 2006 and shortly thereafter the shareholders of Murray VCT PLC and
Murray VCT 2 PLC were issued with new share certificates in Crown Place VCT PLC.
The old Murray VCT 3 PLC share certificates remain valid and have not been
replaced in order to save on administrative expenses. The costs of the merger,
which are in line with the estimates set out in the merger prospectus, are fully
recognised in the results for the year. The reduction in the running costs of
the Company will have a positive effect on the results of future years.
Following the merger Peter Timms, James Cooper and Alistair Mair resigned from
the Board and I would like to take this opportunity to thank them for their hard
work over the years and in particular in the past 12 months. I would also like
to welcome Rachel Beagles, Vikram Lall and Geoffrey Vero who join Andrew Cubie
on the Board as non-executive directors.
The Board would like to thank Close Venture Management Limited for supporting
the Company in its defence against the shareholder action last summer and for
its efforts during the merger in December, all of which are outside the scope of
the investment management agreement and for which it received no remuneration.
Close Venture Management Limited worked hard during the period under review to
preserve and enhance shareholder value and continues to do so.
Buy back policy and tender offer
At the extraordinary general meeting in December 2005, the shareholders approved
the buy-back of up to 10% of the issued share capital of the Company by way of a
tender offer. As part of this arrangement, 3.7 million shares in the Company, or
approximately 9% of the issued share capital, were repurchased and are held in
treasury. All shareholders who tendered shares were able to sell their shares.
The Board is concerned that there should be liquidity in the shares and that the
discount to net asset value be reduced. To this end it will remain the Company's
policy to continue to buy back shares in the market, subject to the overall
constraint of ensuring that such purchases are in the Company's interest,
including the maintenance of sufficient resources for investment in existing and
new investee companies.
Performance
As discussed further below, significant progress was made during the year in
turning around the investment portfolio. As a result the Group achieved total
net capital gains on investments of #2,504,000 during the year. This positive
performance was partly offset by the non-recurring operating costs in connection
with the shareholder action of #178,000, merger costs of #356,000 and a bad debt
provision of #400,000, which represents income accrued in previous years no
longer considered recoverable. The costs for the year also include a performance
fee of #233,615 plus VAT payable to the Manager in accordance with the amended
investment management agreement approved by shareholders in December 2005.
We are pleased to have reached an agreement with HM Revenue & Customs on the
outstanding tax claims dating back several years. This agreement, which was
reached after the year end following protracted investigations and negotiations,
ensures that the full outstanding amount of #1.4 million including interest will
be repaid to the Group. The provision of #0.5 million against this amount, which
was made previously after detailed consultations with the Group's tax advisers,
has now been released.
Investment portfolio
Following the merger of the Company with Murray VCT PLC and Murray VCT 2 PLC,
the investment portfolios of the merged entities were combined. The Company's
investment portfolio has changed during the year to reflect the Company's
strategy of balancing lower risk asset-backed investments with higher risk
investments offering greater growth prospects. The former category includes a
number of holdings in cinemas, pubs and hotels, where the Company's investment
is fully secured through a first charge on freehold property. The latter
comprises a broader range of investments in the areas of business services,
healthcare and IT and provides a portfolio balance in sectors that are less
exposed to consumer spending.
Full or partial exits were achieved from investments including Astraeus,
Clamonta, Enterprise Foods, Link Up Mitaka, Mining Communications, PLM Dollar
and Voxsurf. The flotation of Synexus Clinical Research plc on AIM in November
2005 enabled the Group to realise a significant part of its investment while
retaining a shareholding in this fast growing business. In total the realised
proceeds from the sale of investments in the combined portfolio were in excess
of #9 million. The Group made 15 new investments in the period ranging from
hotels, cinemas and pubs to healthcare services and high growth, technology led
businesses. The total amount invested and committed for investment by the Group
in the year was #7 million. Three new investments and four follow-on investments
totalling #1.4 million have been made since the year end.
The majority of recent investments are performing in accordance with
expectations, and in some cases well in excess. Such investments include the two
freehold cinemas in Brixton, London and Exeter, Grosvenor Healthcare, a provider
of occupational healthcare services and Lowcosttravel, a provider of online
travel services. Against this, we have made a cautious provision against the
investment in the freehold Crown Hotel in Harrogate, where the refurbishment and
turnaround process is taking longer than planned. In the longer term we believe
that this well established and substantial hotel has considerable prospects.
Change of year end
Your Board has decided to change the Company's year end from 28 February to 30
June as this will reduce administration and accounting requirements and save
costs. The next accounting period end will be 30 June 2007 with two interim
reporting dates of 31 August 2006 and 31 December 2006.
Valuation methodology
The valuation of investments has been undertaken in accordance with the
International Private Equity and Venture Capital Valuation Guidelines and
International Accounting Standards.
New accounting standards
During the year, the Company adopted new Financial Reporting Standards issued by
the Accounting Standards Board as part of the convergence process with
International Financial Reporting Standards. The consolidated financial
statements have been prepared in accordance with International Financial
Reporting Standards. The effect of these is shown in notes to this announcement.
Dividends
The Board has declared a first dividend for the period 2006/7 of 1.25 pence per
share (2005/6: total dividend paid of 1.00 pence per share) payable out of
realised capital profits. Due to the extension of the Company's period end to 30
June 2007, this will be the first of three dividends paid in the period. Overall
the Board expects to achieve a level of dividend payments in the period in
excess of the indications given at the time of the merger proposals. As in
previous years, dividend payments will be subject to approval by HM Revenue &
Customs prior to payment.
Outlook
Following the significant changes undertaken in the year to 28 February 2006, in
particular the appointment of Close Venture Management Limited as the new
Investment Manager and the merger with Murray VCT PLC and Murray VCT 2 PLC, good
progress has been made in reshaping the investment portfolio to provide a strong
income stream combined with capital protection and the prospect of increased
capital value from a more broadly based portfolio. Against this background the
Board is positive about the future prospects of the Company.
Patrick Crosthwaite
Chairman
27 June 2006
Consolidated Income Statement (unaudited)
for the year ended 28 February 2006
-----------------------------------------------------------------------------------------------------
Year ended Year ended
28 February 2006 28 February 2005
Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000
-----------------------------------------------------------------------------------------------------
Investment income and deposit interest 1,073 - 1,073 985 - 985
Investment management fees (160) (481) (641) (146) (439) (585)
Other expenses (351) (955) (1,306) (416) - (416)
Non-recurring operating expenses (749) - (749) (187) (260) (447)
-----------------------------------------------------------
Operating (loss)/profit (187) (1,436) (1,623) 236 (699) (463)
(Loss)/profit on realisation of investments - (22,850) (22,850) - 385 385
Unrealised profit/(loss) on investments - 25,354 25,354 - (5,216) (5,216)
-----------------------------------------------------------
(Loss)/profit before taxation (187) 1,068 881 236 (5,530) (5,294)
Tax 42 - 42 (56) 56 -
-----------------------------------------------------------
(Loss)/profit for the year (145) 1,068 923 180 (5,474) (5,294)
-----------------------------------------------------------
Basic and diluted return per Ordinary
share (pence) 2.03 (12.98)
-----------------------------------------------------------------------------------------------------
The total column of this statement represents the Group's income statement,
prepared in accordance with IFRS. The supplementary revenue and capital columns
are prepared under guidance published by the Association of Investment Trust
Companies.
The consolidated income statement includes the results of the subsidiaries CP1
VCT PLC and CP2 VCT PLC following the merger. Gains and losses for the year
shown in the consolidated income statement include gains and losses as a result
of the hive up of investments from CP1 VCT PLC and CP2 VCT PLC to Crown Place
VCT PLC following the merger.
Consolidated Balance sheet (unaudited)
as at 28 February 2006
---------------------------------------------------------------------------
Restated *
28 February 2006 28 February 2005
#'000 #'000
---------------------------------------------------------------------------
Non-current assets
Investments 30,969 16,403
Current assets
Trade and other receivables 1,496 1,638
Cash and cash equivalents 4,846 214
---------------------------------
6,342 1,852
Total assets 37,311 18,255
Current liabilities
Trade and other payables (694) (737)
Net current assets 5,648 1,115
---------------------------------
Total assets less current liabilities 36,617 17,518
Non-current liabilities
Provision for bank guarantees (1,662) (171)
---------------------------------
Total liabilities (2,356) (908)
---------------------------------
Net assets 34,955 17,347
---------------------------------
Equity attributable to equity holders
Ordinary share capital 8,610 3,995
Share premium 14,422 -
Revaluation reserve - (15,287)
Capital redemption reserve 250 250
Own shares held (1,908) -
Retained earnings 13,581 28,389
---------------------------------
Total Equity 34,955 17,347
---------------------------------
Net asset value per Ordinary share (pence) 43.0 43.4
(excluding treasury shares)
---------------------------------------------------------------------------
* Comparative figures for the year ended 28 February 2005 have been restated in
accordance with IAS 10 in respect of dividends as disclosed in the notes to this
announcement.
The consolidated financial statements have been prepared under International
Financial Reporting Standards ('IFRS'). Applicable accounting policies and
transition statements as required by IFRS 1: First time adoption, are included
in the notes to this announcement.
Company Balance sheet (unaudited)
as at 28 February 2006
---------------------------------------------------------------------------
Restated *
28 February 2006 28 February 2005
#'000 #'000
---------------------------------------------------------------------------
Fixed asset investments 30,969 16,403
Investments in subsidiary undertakings 17,506 -
---------------------------------
48,475 16,403
Current assets
Debtors 806 1,638
Cash at bank 1,327 214
---------------------------------
2,133 1,852
Total assets 50,608 18,255
Creditors: amounts falling due within one year (15,066) (737)
---------------------------------
Total assets less current liabilities 35,542 17,518
Provision for liabilities and charges (587) (171)
---------------------------------
Total liabilities (15,653) (908)
---------------------------------
Net assets 34,955 17,347
---------------------------------
Capital and reserves
Called up share capital 8,610 3,995
Share premium 14,422 -
Revaluation reserve - (15,287)
Capital redemption reserve 250 250
Own shares held (1,908) -
Retained earnings 13,581 28,389
---------------------------------
Equity shareholders funds 34,955 17,347
---------------------------------
Net asset value per Ordinary share (pence) 43.0 43.4
(excluding treasury shares)
---------------------------------------------------------------------------
* Comparative figures for the year ended 28 February 2005 have been restated in
accordance with FRS 21 in respect of dividends as disclosed in the notes to this
announcement.
Consolidated Statement of Changes in Equity (unaudited)
for the year ended 28 February 2006
---------------------------------------------------------------------------------------------------------------
Share Capital Own
Share premium Revaluation redemption shares Retained
capital account reserve reserve held earnings Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
At 28 February 2005
(restated) 3,995 - (15,287) 250 - 28,389 17,347
Adjustment in respect of
IAS 39 - - - - - (44) (44)
Reclassification of
revaluation reserve - - 15,287 - - (15,287) -
----------------------------------------------------------------------------------
At 1 March 2005 (restated
and adjusted) 3,995 - - 250 - 13,058 17,303
Net profit for the year - - - - - 923 923
Costs of treasury shares
repurchased - - - - (1,908) - (1,908)
Shares issued in year 4,615 14,422 - - - - 19,037
Dividends paid in year - - - - - (400) (400)
----------------------------------------------------------------------------------
At 28 February 2006 8,610 14,422 - 250 (1,908) 13,581 34,955
==================================================================================
At 1 March 2004
(restated) 4,128 - (13,031) 117 32,752 23,966
Net profit for the year - - (5,216) - - (78) (5,294)
Nominal value of shares
repurchased for cancellation (133) - - 133 - - -
Cost of shares repurchased
for cancellation - - - - - (505) (505)
Tax effect of transfer of
losses to profit and loss
account - - (433) - - 433 -
Transfer of realised losses
to profit and loss account - - 3,393 - - (3,393) -
Dividends paid in year - - - - - (820) (820)
----------------------------------------------------------------------------------
At 28 February 2005
(restated) 3,995 - (15,287) 250 - 28,389 17,347
==================================================================================
---------------------------------------------------------------------------------------------------------------
Consolidated Cashflow Statement (unaudited)
for the year ended 28 February 2006
--------------------------------------------------------------------------------
Year ended Year ended
28 February 2006 28 February 2005
#'000 #'000
--------------------------------------------------------------------------------
Cash flows from operating activities
Investment income received 1,087 1,262
Deposit interest received 30 15
Other income - 21
Investment management fees paid (694) (691)
Secretarial fees paid (91) (57)
Other cash payments (1,324) (174)
---------------------------------
Cash (expended by)/ generated from operations (992) 376
Tax recovered 90 -
---------------------------------
Net cash (used in)/from operating activities (902) 376
Cash flows from investing activities
Purchase of investments (2,169) (10,830)
Sales of investments 6,349 11,201
---------------------------------
Net cash flows from investing activities 4,180 371
Cash flows from financing activities
Equity dividends paid (400) (820)
Cash acquired from subsidiaries at date of merger 3,791 -
Repurchase of Ordinary shares (140) (366)
Purchase of Ordinary shares for treasury (1,897) -
---------------------------------
Net cash flows from/(used in) financing activities 1,354 (1,186)
Increase/(decrease) in cash and cash equivalents 4,632 (439)
Cash and cash equivalents at 28 February 2005 214 653
---------------------------------
Cash and cash equivalents at 28 February 2006 4,846 214
--------------------------------------------------------------------------------
The consolidated financial statements have been prepared under International
Financial Reporting Standards ('IFRS'). Applicable accounting policies and
transition statements as required by IFRS 1: First time adoption, are included
in the notes to this announcement.
Explanation of material adjustments to the cash flow statement for the year
ended 28 February 2006: Tax recovered of #90,000 is classified as operating cash
flow under IFRS. This item was included within taxation under UK GAAP. Dividends
paid to Ordinary shareholders are classified as financing activities, whereas
under UK GAAP, they were included in the separate categories of equity dividends
paid.
There are no other material differences between the cash flow presented under
IFRS and the cash flow statement presented under UK GAAP.
Transition statements (unaudited)
The consolidated financial statements are the first to be prepared under IFRS.
The Group has applied the exemption under IFRS 1 allowed on transition at 1
March 2005, from restating the results previously reported, to comply with IAS
39. The statement below shows the effect of IAS 10 on the comparatives for the
prior and current year.
-------------------------------------------------------------------------------------
Reconciliation of consolidated equity
as at 1 March 2004
Effect of IFRS
Previous transition at 1 March
Notes GAAP to IFRS 2004
#'000 #'000 #'000
Non-current assets
Investments 21,587 - 21,587
------------------------------------
Current assets
Trade and other receivables 1,970 - 1,970
Cash and cash equivalents 653 - 653
------------------------------------
2,623 - 2,623
------------------------------------
Total assets 24,210 - 24,210
------------------------------------
Current liabilities
Trade and other payables 1 (1,070) 826 (244)
------------------------------------
Total assets less current liabilities 23,140 826 23,966
------------------------------------
Represented by:
Share capital 4,128 - 4,128
Revaluation reserve (13,031) - (13,031)
Capital redemption reserve 117 - 117
Profit and loss account 2 31,926 826 32,752
------------------------------------
Total equity 23,140 826 23,966
------------------------------------
pence pence pence
Net asset value per Ordinary share 56.1 2.0 58.1
-------------------------------------------------------------------------------------
Notes to the reconciliation of equity at 1 March 2004:
1. Under previous UK GAAP dividends paid by the Company were recognised in the
period in which net revenue to which those dividends related was accounted for.
Under IFRS dividends are recognised when there is a contractual obligation for
the payment of dividend to the shareholders. Therefore, the creditor for the
final dividend proposed in relation to the year ended 28 February 2004 has been
reversed, reducing creditors by #826,000.
2. Adjustment 1 above leads to an increase of #826,000 in retained earnings.
Transition statements (unaudited) (continued)
-------------------------------------------------------------------------------------
Reconciliation of consolidated equity
as at 28 February 2005 (end of last period presented under previous UK GAAP)
Effect of IFRS
Previous transition at 1 March
Notes GAAP to IFRS 2005
#'000 #'000 #'000
Non-current assets
Investments 16,403 - 16,403
------------------------------------
Current assets
Trade and other receivables 1,638 - 1,638
Cash and cash equivalents 214 - 214
------------------------------------
1,852 - 1,852
------------------------------------
Total assets 18,255 - 18,255
------------------------------------
Current liabilities
Trade and other payables 1 (1,137) 400 (737)
------------------------------------
Total assets less current liabilities 17,118 400 17,518
------------------------------------
Non-current liabilities
Provision for bank guarantees (171) - (171)
------------------------------------
Total liabilities (1,308) 400 (908)
------------------------------------
Net assets 16,947 400 17,347
------------------------------------
Equity:
Share capital 3,995 - 3,995
Revaluation reserve (15,287) - (15,287)
Capital redemption reserve 250 - 250
Retained earnings 2 27,989 400 28,389
------------------------------------
Total equity 16,947 400 17,347
------------------------------------
pence pence pence
Net asset value per Ordinary share 42.4 1.0 43.4
-------------------------------------------------------------------------------------
Notes to the reconciliation of equity at 28 February 2005:
1. Under previous UK GAAP dividends paid by the Company were recognised in the
period in which net revenue to which those dividends related was accounted for.
Under IFRS dividends are recognised when there is a contractual obligation for
the payment of dividend to the shareholders. Therefore, the creditor for the
final dividend proposed in relation to the year ended 28 February 2005 has been
removed, reducing creditors by #400,000.
2. Adjustment 1 above leads to an increase of #400,000 in retained earnings.
Notes to the announcement
1. Details about the Investment Manager
Crown Place VCT PLC is managed by Close Venture Management Limited. Close
Venture Management Limited is a subsidiary of Close Brothers Group plc and is
authorised and regulated by the Financial Services Authority.
2. Statutory accounts
The financial information set out in the announcement does not constitute the
Company's statutory accounts for the years ended 28 February 2006 and 28
February 2005, as defined in Section 240 of the Companies Act 1985.
Statutory accounts for the year ended 28 February 2005 have been delivered to
the Registrar of Companies. The Auditors have reported on those accounts; their
report was unqualified and did not contain statements under section 237(2) or
(3) of the Companies Act 1985. This financial information has been restated in
order to comply with the new Financial Reporting Standards as detailed below.
Statutory accounts for the year ended 28 February 2006 have not yet been
approved, audited or filed with the Registrar of Companies.
Whilst financial information included in this preliminary announcement has been
computed in accordance with International Financial Reporting Standards
('IFRS'), this announcement does not itself contain sufficient information to
comply with IFRSs. The Company expects to publish full financial statements that
comply with IFRSs within the next two weeks.
3. Changes in accounting policies
This financial information is prepared on the basis of the accounting policies
in the latest statutory accounts with the exception of changes as detailed in
the transition statements above and in the notes below.
Group accounting policies
Basis of accounting
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards ('IFRS'). The disclosures required
by IFRS 1 concerning the transition from UK GAAP to IFRS are given in the
announcement above. In the case of IAS 32 and 39, the Group applied the
exemption under IFRS 1 on transition at 1 March 2005 from restating comparative
figures.
The consolidated financial statements have also been prepared in accordance with
IFRSs adopted for use in the European Union and therefore comply with the
Articles of EU IAS Regulation and with the Statement of Recommended Practice:
Financial Statements of Investment Trust Companies ('SORP') issued by the
Association of Investment Trust Companies ('AITC') in January 2003 and revised
in December 2005.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company for the year ended 28 February 2006 and the entities controlled by
the Company (its subsidiaries) from the date of merger.
Where necessary, adjustments are made to the financial statements of the
subsidiaries to bring the accounting policies into line with those used by the
Group.
All intra-group transactions and balances are eliminated on consolidation.
As permitted by Section 230 of the Companies Act 1985, the Company has not
presented its own profit and loss account. The amount of the Company's profit
for the financial year dealt within the accounts for the Group is #1,225,000
(2005: #472,000).
Segmental reporting
The Directors are of the opinion that the Group is engaged in a single segment
of business, being investment business. The Group invests in smaller companies
principally based in the UK.
Business combinations
The acquisition of subsidiaries is accounted for using the purchase method. 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 are recognised at their fair
value at the acquisition date.
Investments
In accordance with IAS 39 "Financial Instruments: Recognition and Measurement",
equity investments are designated as fair value through profit or loss
("FVTPL").
Investments listed on recognised exchanges are valued at the closing bid prices
at the end of the accounting period.
Unquoted investments' fair value is determined by the Directors in accordance
with the International Private Equity and Venture Capital Valuation Guidelines.
Fair value movements on equity investments and gains and losses arising on
disposal of investments are reflected in the capital column of the income
statement in accordance with the AITC SORP.
Unquoted loan stock is classified as loans and receivables in accordance with
IAS 39 and carried at amortised cost using the Effective Interest Rate ("EIR")
method. Movements in the amortised cost relating to interest income are
reflected in the revenue column of the income statement and movements in respect
of capital provisions are reflected in the capital column of the income
statement. 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.
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.
It is not the Group's policy to exercise control or significant influence over
investee companies. Therefore in accordance with the exemptions under IAS 27
those undertakings in which the Company holds more than 20% of the equity are
not regarded as associated undertakings.
Dividends
In accordance with IAS 10, "Events after the balance sheet date", interim
dividends are not accounted for until paid and final dividends are accounted for
when approved by shareholders at an Annual General Meeting.
Issue costs
Issue costs associated with the allotment of share capital have been deducted
from the share premium account in accordance with IAS 32.
Company accounting policies
Change in accounting policies
With effect from 1 March 2005, the Company adopted the new Financial Reporting
Standards ("FRS") 21-26, that have been issued by the Accounting Standards Board
as part of the convergence process between United Kingdom Generally Accepted
Accounting Practice and International Financial Reporting Standards ("IFRS"). In
the case of FRS 25 and 26, the Company applied the exemption on transition at 1
March 2005 from restating comparative figures.
Investments
In accordance with FRS 26 "Financial Instruments Measurement", equity
investments are designated as fair value through profit or loss ("FVTPL").
Unquoted investments' fair value is determined by the Directors in accordance
with the International Private Equity and Venture Capital Valuation Guidelines.
Unquoted loan stock is classified as loans and receivables in accordance with
FRS 26 and carried at amortised cost using the Effective Interest Rate ("EIR")
method. Movements in the amortised cost relating to interest income are
reflected in the revenue column of the income statement and movements in respect
of capital provisions are reflected in the capital column of the income
statement. 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.
Investments listed on recognised exchanges are valued at the closing bid prices
at the end of the accounting period.
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.
It is not the Company's policy to exercise control or significant influence over
investee companies. Therefore in accordance with the exemptions under FRS 9,
those undertakings in which the Company holds more than 20% of the equity are
not regarded as associated undertakings.
Dividends
In accordance with FRS 21, "Events after the balance sheet date", interim
dividends are not accounted for until paid and final dividends are accounted for
when approved by shareholders at an Annual General Meeting. Comparative figures
have been restated as detailed in the transition statements above.
Issue costs
Issue costs associated with the allotment of share capital have been deducted
from the share premium account in accordance with FRS 25.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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