TIDMCRWN
As required by the UK Listing Authority's Disclosure and Transparency
Rules 4.1 and 6.3, Crown Place VCT PLC today makes public its
information relating to the Annual Report and Financial Statements
for the year ended 30 June 2009.
This announcement was approved by the Board of Directors on 28
September 2009.
This announcement has not been audited.
Please click on the following link to view the full Annual Report and
Financial Statements (which have been audited) for the year to 30
June 2009. The information contained in this link includes
information as required by the Disclosure and Transparency Rules,
including Rule 4.1.
http://hugin.info/141806/R/1344602/322463.pdf
Alternatively you may view the Annual Report and Financial Statements
at: www.albion-ventures.co.uk by clicking on the 'Our Funds' section.
Investment Objectives
The investment objective and policy of the Company is to achieve long
term capital and income growth principally through investment in
smaller unquoted companies in the United Kingdom. In pursuing this
policy, the Manager aims to build a portfolio which concentrates on
two complementary investment areas. The first are lower risk, often
asset-based investments that can provide a strong income stream
combined with protection of capital. These will be balanced by a
smaller proportion of the portfolio being invested in higher risk
companies with greater growth prospects.
Financial Calendar
+-------------------------------------------------------------------+
| Annual General Meeting | 11 November 2009 |
| | |
|------------------------------------------------+------------------|
| Record date for first dividend | 9 October 2009 |
| | |
|------------------------------------------------+------------------|
| Payment of first dividend | 6 November 2009 |
|------------------------------------------------+------------------|
| Announcement of half-yearly results for the | February 2010 |
| six months ended 31 December 2009 | |
|------------------------------------------------+------------------|
| Payment of second dividend subject to Board | April 2010 |
| approval | |
+-------------------------------------------------------------------+
Financial Highlights
+---------------------------------------------------------------+
| | 30 June 2009 | 30 June 2008 |
| | pence per share | pence per share |
|---------------------------+-----------------+-----------------|
| Net asset value per share | 34.2 | 41.1 |
|---------------------------+-----------------+-----------------|
| Dividends paid | 2.5 | 2.5 |
|---------------------------+-----------------+-----------------|
| Revenue return per share | 0.9 | 1.3 |
|---------------------------+-----------------+-----------------|
| Capital return per share | (5.4) | (2.7) |
+---------------------------------------------------------------+
Shareholder returns and shareholder value
+-------------------------------------------------------------------+
| | Proforma (i) | Proforma (i) | Crown Place |
| | Murray VCT | Murray VCT | VCT PLC* |
| | PLC | 2 PLC | |
|-----------------------+--------------+--------------+-------------|
| | (pence per | (pence per | (pence per |
| | share) | share) | share) |
|-----------------------+--------------+--------------+-------------|
| Shareholder return | | | |
| from launch to April | | | |
| 2005 (date that | | | |
| Albion Ventures was | | | |
| appointed investment | | | |
| manager): | | | |
|-----------------------+--------------+--------------+-------------|
| Total dividends paid | 30.36 | 30.91 | 24.93 |
| to 6 April 2005 (ii) | | | |
|-----------------------+--------------+--------------+-------------|
| Decrease in net asset | (69.90) | (64.50) | (56.60) |
| value | | | |
|-----------------------+--------------+--------------+-------------|
| Total shareholder | (39.54) | (33.59) | (31.67) |
| return to 6 April | | | |
| 2005 | | | |
|-----------------------+--------------+--------------+-------------|
| | | | |
|-----------------------+--------------+--------------+-------------|
| Shareholder return | | | |
| from April 2005 to 30 | | | |
| June 2009: | | | |
|-----------------------+--------------+--------------+-------------|
| Total dividends paid | 6.91 | 8.06 | 9.30 |
|-----------------------+--------------+--------------+-------------|
| Decrease in net asset | (5.73) | (6.36) | (9.16) |
| value | | | |
|-----------------------+--------------+--------------+-------------|
| Total shareholder | | | |
| return from April | 1.18 | 1.70 | 0.14 |
| 2005 to 30 June 2009 | | | |
|-----------------------+--------------+--------------+-------------|
| | | | |
|-----------------------+--------------+--------------+-------------|
| Shareholder value | | | |
| since launch: | | | |
|-----------------------+--------------+--------------+-------------|
| Total dividends paid | 37.27 | 38.97 | 34.23 |
| to 30 June 2009 (ii) | | | |
|-----------------------+--------------+--------------+-------------|
| Net asset value as at | 24.37 | 29.14 | 34.24 |
| 30 June 2009 | | | |
|-----------------------+--------------+--------------+-------------|
| Total shareholder | 61.64 | 68.11 | 68.47 |
| value as at 30 June | | | |
| 2009 | | | |
|-----------------------+--------------+--------------+-------------|
| | | | |
|-----------------------+--------------+--------------+-------------|
| Current dividend | 1.78 | 2.13 | 2.50 |
| objective (pence per | | | |
| share) | | | |
|-----------------------+--------------+--------------+-------------|
| Percentage dividend | 7.3% | 7.3% | 7.3% |
| yield on net asset | | | |
| value | | | |
+-------------------------------------------------------------------+
Net asset value total return to shareholders since launch:
+-------------------------------------------------------------------+
| | 30 June 2009 |
| | (pence per share) |
|-----------------------------------------------+-------------------|
| Total dividends paid during the period from | 24.93 |
| launch to 6 April 2005 (prior to change of | |
| manager) | |
|-----------------------------------------------+-------------------|
| Total dividends paid during the year ended 28 | 1.00 |
| February 2006 | |
|-----------------------------------------------+-------------------|
| Total dividends paid during the period ended | 3.30 |
| 30 June 2007 | |
|-----------------------------------------------+-------------------|
| Total dividends paid during the year ended 30 | 2.50 |
| June 2008 | |
|-----------------------------------------------+-------------------|
| Total dividends paid during the year ended 30 | 2.50 |
| June 2009 | |
|-----------------------------------------------+-------------------|
| Total dividends paid to 30 June 2009 | 34.23 |
|-----------------------------------------------+-------------------|
| Net asset value as at 30 June 2009 | 34.24 |
|-----------------------------------------------+-------------------|
| Total net asset value return as at 30 June | 68.47 |
| 2009 | |
+-------------------------------------------------------------------+
Notes
(I)The proforma shareholder returns presented above are based on the
dividends paid to shareholders before the merger and the pro-rata net
asset value per share and pro-rata dividends per share paid to 30
June 2009 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.
* Formerly Murray VCT 3 PLC
In addition to the dividends paid above, the Board has declared a
first dividend for the year ending 30 June 2010, of 1.25 pence per
Crown Place VCT PLC share (0.25 pence to be paid out of revenue
profits and 1.00 pence out of realised capital gains), on 6 November
2009 to shareholders on the register as at 9 October 2009.
Chairman's Statement
Introduction
The financial results for the year to 30 June 2009 reflect the
difficult economic environment in the UK during this period. The
decline in market valuation multiples combined with a cautious view
of the trading prospects of some our investee companies have
contributed to the reduction in the value of investments held by the
Company.
The Company experienced a total negative return of 4.5 pence per
share over the year. Net asset value declined to 34.2 pence per share
compared with 41.1 pence per share as at the 30 June 2008, after the
payment of 2.5 pence per share in dividends.
Results and Dividends
As at 30 June 2009, the net asset value was GBP24.8 million or 34.2
pence per share compared to GBP30.2 million or 41.1 pence per share as
at 30 June 2008. The revenue return before taxation was GBP682,000, a
sharp reduction on the previous year of GBP1.2 million, predominantly
due to a lower return on cash resources and loan stock investments
during the year.
The decline in net asset value with dividends reinvested was 10.6 per
cent. during the year, compared to a decrease in the FTSE All-Share
Index of 20.5 per cent. over the same period.
The VCT's policy is to pay regular and predictable dividends to
investors out of revenue income and realised capital gains. During
the year to 30 June 2009, the VCT maintained its dividend
distribution of 2.5 pence per share.
The Board announces a first dividend for the current financial year
of 1.25 pence per share (0.25 pence to be paid out of revenue profits
and 1.00 pence out of realised capital gains) which will be paid on 6
November 2009 to shareholders on the register as at 9 October 2009.
Investment progress
A total of GBP2.0 million was invested in 4 new investee companies and
in 15 existing investee companies during the year. Details are in the
Manager's Report.
Some 60 per cent. of the write-downs on investments over the year
relate to third party professional valuations of the property held by
certain of our investee companies. Although the great majority of the
underlying businesses remain profitable at the operating level,
valuations have been reduced in line with the commercial property
market.
The slowdown in consumer spending has adversely affected trading in,
and income generated by, a number of businesses. Combined with
historically very low market interest rates on our cash deposits,
this adversely affected the Company's income in 2009, which is
sharply down on the previous year. Nevertheless, your Company's
strategy of retaining substantial cash balances through the downturn
has proved to be sound. Despite pressure on certain of our investee
companies, the portfolio as a whole remains cash generative.
Recovery of historic VAT
Following a period of lobbying by the Association of Investment
Companies, the welcome review of the position regarding the exemption
of management fees from VAT by H.M. Revenue & Customs in July 2008
has meant that the Manager is able to reclaim historic VAT that it
had previously charged to the Company. A net reclaim of historic VAT
of GBP369,000 has been credited to the accounts in respect of the
repayment. Further details regarding this claim, and its disclosure,
are shown in note 5 of the notes to this announcement. With effect
from 1 October 2008, all management and administration fees are
considered exempt from VAT.
Share premium account
Shareholders approved the cancellation of the Company's share premium
account by way of special resolution at a General Meeting held on 1
September 2009. The share premium account amounting to GBP14.4m was
subsequently cancelled on 16 September 2009 by order of the High
Court and the Notice regarding the cancellation was registered at
Companies House on 17 September 2009. The purpose of this
cancellation is to increase the special reserve available for
distribution as dividends, and which, amongst other purposes, can be
used for making market purchases of Ordinary shares.
Risks and uncertainties
The continuing uncertain outlook for the UK economy continues to be
the key risk for the Company both in terms of valuations and the
amount of loan stock interest payable by investee companies.
A detailed analysis of the other risks and uncertainties facing the
business are in note 23 below, and are also shown in the Directors'
Report and Enhanced Business Review on pages 21 to 22 of the full
Annual Report and Financial Statements.
Related party transactions
Details of material related party transactions can be found in note
22 below and to the Annual Report and Financial Statements.
Discount management and share buy-backs
It remains the Board's policy to buy back shares in the market,
subject to the overall constraint that such purchases are in the
VCT's interest, including the maintenance of sufficient resources for
investment in existing and new investee companies and the continued
payment of dividends to shareholders. Given the high level of
volatility apparent in all markets, the discount to net asset value
per share at which shares are bought back has widened from that which
has applied historically.
Proposed change to the Company's Articles of Association
At the forthcoming Annual General Meeting, special resolutions will
be proposed to adopt new Articles of Association in order to update
the Company's existing Articles of Association (the "Current
Articles") and to take account of the changes that have been brought
into force by the Companies Act 2006. A summary of the principal
changes that are proposed to be made to the Current Articles by
resolution 11 is contained in the Directors' Report and Enhanced
Business Review on page 26 of the Annual Report and Financial
Statements.
Change of Manager
The business of Close Ventures Limited was acquired by Albion
Ventures LLP ("Albion Ventures") from Close Brothers Group plc
("Close") on 23 January 2009. Albion Ventures was formed by the
executive directors of Close Ventures Limited; Close continue to have
an investment in the business. The Company's management contract was
novated from Close Ventures to Albion Ventures on exactly the same
terms as the existing agreement. The investment approach of Albion
Ventures and the investment policy of the Company are also unchanged,
with a continuing emphasis on building up a broad portfolio of
investee companies normally with no external bank borrowings and the
maintenance of a regular dividend yield. Following the change of
Manager, the Company Secretary is now Albion Ventures LLP.
Shareholder survey
The Manager recently performed a shareholder survey. Questionnaires
were sent to all shareholders and a 22 per cent. response rate (by
number of shareholders) was achieved. Of these shareholders, 66 per
cent. were satisfied or very satisfied with the returns on the
Company, 70 per cent. intended to hold their shares indefinitely, and
dividend yield was ranked as the most common feature that investors
were looking for in a Venture Capital Trust. The Board wishes to
thank shareholders who took part in the survey and will bear in mind
the findings. The full survey results are available to view on the
Manager's website at www.albion-ventures.co.uk under the 'Our Funds'
section.
Outlook and prospects
While we remain cautious on the outlook for the UK economy as a
whole, we believe that the investment portfolio has been valued to
take these concerns into account. The Company's policy of ensuring
that it has a first charge wherever possible over investee companies'
assets partly protects the Company from the adverse effects of the
sharp decline in the availability of bank finance. It remains our
general policy that, wherever possible, investee companies should not
have external bank borrowings.
Meanwhile, we are encouraged by the current trading of a number of
our investee companies. The Company has substantial cash and liquid
resources (and indeed at GBP7.8m, they currently account for 50 per
cent. of the Company's stock market valuation) and these resources
will enable the VCT to take advantage of the lower valuations now
becoming apparent. Opportunities within our target sectors continue
to arise at attractive valuations, including the healthcare sector
which will be one of our core areas of concentration going forward.
While valuations and income may still come under further pressure in
the short term, we anticipate that, over the longer term, the current
reductions in valuation represent value deferred rather than value
permanently lost.
Subject to the longer-term performance of the investment portfolio,
the Board aims to maintain the current annualised dividend
distribution of 2.5 pence per share going forward.
Patrick Crosthwaite
Chairman
28 September 2009
Manager's Report
An analysis of Crown Place VCT PLC's investment portfolio as at 30
June 2009 is shown below. Care has been taken to diversify the
portfolio across a broad number of sectors, with those that are
asset-based and consumer facing, such as pubs, health and fitness
clubs and cinemas, being balanced by higher growth businesses in the
business services, healthcare, IT and environmental sectors.
Split of investment portfolio by sector
http://hugin.info/141806/R/1344602/322465.pdf
Source: Albion Ventures LLP
New investments
During the year the VCT invested GBP949,000 in four new qualifying
investments. These comprised GBP210,000 in Forth Photonics Limited, a
diagnostic company specialising in the detection of cervical cancer;
GBP357,000 in Prime Care Holdings Limited, a domiciliary care operator
based on the South Coast; GBP305,000 in Bravo Inns II Limited, a
freehold pub owner and operator and GBP77,000 in Mirada Medical
Limited, a developer of medical imaging software. In addition, the
Company invested a total of GBP1.0 million in 15 existing investee
companies. Some of these were in our existing pub investments, where
they took advantage of the low prices in the sector to purchase
further units at attractive prices. Others were in the IT and
medical technology sectors, and tended to be in promising businesses,
but where growth had been slower than anticipated.
Portfolio review
The net asset value with dividends reinvested declined by 10.6 per
cent. during the year. Some 60.3 per cent. of this fall reflected
lower property values, with the balance reflecting the current
difficult trading environment. This fall is compared to a decrease in
the FTSE All-Share Index of 20.5 per cent. over the same period.
Although investments in the leisure sector (comprising hotels, pubs
and fitness clubs) form the greatest element of the provisions on the
portfolio, it is encouraging to note that almost all units are
profitable at the operating level. In other areas, in particular IT
services and medical technology, we are seeing encouraging profits.
The main areas of decline were in some of the pub investments where
market valuations have decreased; Kensington Health Clubs Limited,
where despite continued growth in membership, the valuation was
affected by the general downturn in the commercial property sector;
The Crown Hotel Harrogate Limited, where despite substantially
improved trading, a sharp devaluation was dictated by the general
decline in the property sector; The Stanwell Hotel Limited, which is
due to open following refurbishment next Spring, but whose value has
fallen in line with the commercial property market; Chichester
Holdings Limited, which, while still profitable, has seen a decline
in trading and Vibrant Energy Assessors Limited, where our
shareholding had to be restructured as a result of the decline in the
housing sector, but whose performance is now more promising.
We are working closely with our portfolio companies as they take
proactive measures to limit the impact of the downturn. It is our
intention going forward to concentrate particularly on the healthcare
and environmental sectors as we believe that these are likely to
provide a greater degree of resilience during the current difficult
environment.
Albion Ventures LLP
Manager
28 September 2009
Responsibility Statement
In preparing these financial statements for the year to 30 June 2009,
the Directors of the Company, being Patrick Crosthwaite, Rachel
Beagles, Sir Andrew Cubie, Vikram Lall and Geoffrey Vero, confirm
that to the best of their knowledge:
-summary financial information contained in this announcement and the
full Annual Report and Financial Statements for the year ended 30
June 2009 for the Group has been prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union, and for the parent company has been prepared in
accordance with United Kingdom Generally Accepted Accounting
Practice, and give a true and fair view of the assets, liabilities,
financial position and profit and loss of the Group and Company for
the year ended 30 June 2009 as required by DTR 4.2.R;
-the Chairman's Statement and Manager's Report include a fair review
of the information required by DTR 4.2.7R (indication of important
events during the year ended 30 June 2009 and description of
principal risks and uncertainties that the Company faces); and
-the Chairman's Statement and Manager's Report include a fair review
of the information required by DTR 4.2.8R (disclosure of related
parties transactions and changes therein).
A detailed 'Statement of Directors' responsibilities for the
preparation of the Group's and the Company's financial statements'
is contained within the full audited Annual Report and Financial
Statements which is attached to this announcement.
By order of the Board
Patrick Crosthwaite
Chairman
28 September 2009
Consolidated Income Statement
+----------------------------------------------------------------------------------+
| | | Year ended | Year ended |
| | | 30 June 2009 | 30 June 2008 |
|-----------------------------+----+-----------------------+-----------------------|
| | |Revenue|Capital| Total|Revenue|Capital| Total|
| |Note| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000|
|-----------------------------+----+-------+-------+-------+-------+-------+-------|
| | | | | | | | |
|Losses on investments | 2| -|(3,869)|(3,869)| -|(1,818)|(1,818)|
|-----------------------------+----+-------+-------+-------+-------+-------+-------|
|Investment income and deposit| | | | | | | |
|interest | 3| 988| -| 988| 1,714| -| 1,714|
|-----------------------------+----+-------+-------+-------+-------+-------+-------|
|Investment management fees | 4| (118)| (354)| (472)| (167)| (502)| (669)|
|-----------------------------+----+-------+-------+-------+-------+-------+-------|
|Recovery of VAT | 5| 92| 277| 369| -| -| -|
|-----------------------------+----+-------+-------+-------+-------+-------+-------|
|Other expenses | 6| (280)| -| (280)| (307)| -| (307)|
|-----------------------------+----+-------+-------+-------+-------+-------+-------|
| | | | | | | | |
|Profit/(loss) before taxation| | 682|(3,946)|(3,264)| 1,240|(2,320)|(1,080)|
|-----------------------------+----+-------+-------+-------+-------+-------+-------|
|Taxation | 7| -| -| -| (283)| 304| 21|
|-----------------------------+----+-------+-------+-------+-------+-------+-------|
|Profit/(loss) for the year | | 682|(3,946)|(3,264)| 957|(2,016)|(1,059)|
|-----------------------------+----+-------+-------+-------+-------+-------+-------|
|Basic and diluted | | | | | | | |
|return/(loss) per Ordinary | | | | | | | |
|share (pence)* | 9| 0.9| (5.4)| (4.5)| 1.3| (2.7)| (1.4)|
+----------------------------------------------------------------------------------+
* (excluding treasury shares)
The accompanying notes form an integral part of these financial
statements.
The total column of this statement represents the Group's Income
Statement, prepared in accordance with International Financial
Reporting Standards ('IFRS'). The supplementary revenue and capital
columns are prepared under guidance published by the Association of
Investment Companies.
The consolidated Income Statements for the year ended 30 June 2009
and the year ended 30 June 2008 include the results of the
subsidiaries CP1 VCT PLC and CP2 VCT PLC.
All revenue and capital items in the above statement derive from
continuing operations.
Consolidated Balance Sheet
+-------------------------------------------------------------------+
| | | 30 June 2009 | 30 June 2008 |
| | Note | GBP'000 | GBP'000 |
|------------------------------+------+--------------+--------------|
| Non-current assets | | | |
|------------------------------+------+--------------+--------------|
| Investments | 10 | 15,878 | 18,211 |
|------------------------------+------+--------------+--------------|
| | | | |
|------------------------------+------+--------------+--------------|
| Current assets | | | |
|------------------------------+------+--------------+--------------|
| Trade and other receivables | 13 | 55 | 308 |
|------------------------------+------+--------------+--------------|
| Current asset investments | 13 | 2,718 | 2,686 |
|------------------------------+------+--------------+--------------|
| Current tax asset | 13 | - | 53 |
|------------------------------+------+--------------+--------------|
| Cash and cash equivalents | 17 | 6,472 | 9,237 |
|------------------------------+------+--------------+--------------|
| | | 9,245 | 12,284 |
|------------------------------+------+--------------+--------------|
| | | | |
|------------------------------+------+--------------+--------------|
| Total assets | | 25,123 | 30,495 |
|------------------------------+------+--------------+--------------|
| Current liabilities | | | |
|------------------------------+------+--------------+--------------|
| Trade and other payables | 14 | (335) | (321) |
|------------------------------+------+--------------+--------------|
| | | | |
|------------------------------+------+--------------+--------------|
| Net assets | | 24,788 | 30,174 |
|------------------------------+------+--------------+--------------|
| | | | |
|------------------------------+------+--------------+--------------|
| Equity attributable to | | | |
| equityholders | | | |
|------------------------------+------+--------------+--------------|
| Ordinary share capital | 15 | 7,965 | 8,066 |
|------------------------------+------+--------------+--------------|
| Share premium | | 14,438 | 14,422 |
|------------------------------+------+--------------+--------------|
| Capital redemption reserve | | 902 | 793 |
|------------------------------+------+--------------+--------------|
| Special reserve | | 32,099 | 32,421 |
|------------------------------+------+--------------+--------------|
| Own shares held | | (2,849) | (2,849) |
|------------------------------+------+--------------+--------------|
| Realised capital reserve | | (21,163) | (17,206) |
|------------------------------+------+--------------+--------------|
| Unrealised capital reserve | | (7,616) | (6,645) |
|------------------------------+------+--------------+--------------|
| Revenue reserve | | 1,012 | 1,172 |
|------------------------------+------+--------------+--------------|
| Total equity shareholders' | | | |
| funds | | 24,788 | 30,174 |
|------------------------------+------+--------------+--------------|
| | | | |
|------------------------------+------+--------------+--------------|
| Basic and diluted net asset | | | |
| value per share (pence)* | 16 | 34.2 | 41.1 |
+-------------------------------------------------------------------+
* (excluding treasury shares)
The consolidated Balance Sheets as at 30 June 2009 and 30 June 2008
include the balance sheets of the subsidiaries CP1 VCT PLC and CP2
VCT PLC.
The accompanying notes form an integral part of these financial
statements.
These financial statements were approved by the Board of Directors,
and authorised for issue on 28 September 2009 and were signed on its
behalf by
Patrick Crosthwaite
Chairman
Company Balance Sheet
+-------------------------------------------------------------------+
| | | 30 June 2009 | 30 June 2008 |
| | Note | GBP'000 | GBP'000 |
|------------------------------+------+--------------+--------------|
| Fixed assets | | | |
|------------------------------+------+--------------+--------------|
| Fixed asset investments | 10 | 15,878 | 18,211 |
|------------------------------+------+--------------+--------------|
| Investment in subsidiary | | | |
| undertakings | 12 | 15,149 | 15,059 |
|------------------------------+------+--------------+--------------|
| | | 31,027 | 33,270 |
|------------------------------+------+--------------+--------------|
| | | | |
|------------------------------+------+--------------+--------------|
| Current assets | | | |
|------------------------------+------+--------------+--------------|
| Trade and other debtors | 13 | 55 | 302 |
|------------------------------+------+--------------+--------------|
| Current asset investments | 13 | 2,718 | 2,686 |
|------------------------------+------+--------------+--------------|
| Current tax asset | 13 | - | 53 |
|------------------------------+------+--------------+--------------|
| Cash at bank and in hand | 17 | 6,255 | 6,548 |
|------------------------------+------+--------------+--------------|
| | | 9,028 | 9,589 |
|------------------------------+------+--------------+--------------|
| | | | |
|------------------------------+------+--------------+--------------|
| Total assets | | 40,055 | 42,859 |
|------------------------------+------+--------------+--------------|
| | | | |
|------------------------------+------+--------------+--------------|
| Creditors: amounts falling | | | |
| due within one year | 14 | (15,267) | (12,685) |
|------------------------------+------+--------------+--------------|
| | | | |
|------------------------------+------+--------------+--------------|
| Net assets | | 24,788 | 30,174 |
|------------------------------+------+--------------+--------------|
| | | | |
|------------------------------+------+--------------+--------------|
| Capital and reserves | | | |
|------------------------------+------+--------------+--------------|
| Ordinary share capital | 15 | 7,965 | 8,066 |
|------------------------------+------+--------------+--------------|
| Share premium | | 14,438 | 14,422 |
|------------------------------+------+--------------+--------------|
| Capital redemption reserve | | 902 | 793 |
|------------------------------+------+--------------+--------------|
| Special reserve | | 32,099 | 32,421 |
|------------------------------+------+--------------+--------------|
| Own shares held | | (2,849) | (2,849) |
|------------------------------+------+--------------+--------------|
| Realised capital reserve | | (21,216) | (17,206) |
|------------------------------+------+--------------+--------------|
| Unrealised capital reserve | | (7,525) | (6,645) |
|------------------------------+------+--------------+--------------|
| Revenue reserve | | 974 | 1,172 |
|------------------------------+------+--------------+--------------|
| Shareholders' funds | | 24,788 | 30,174 |
|------------------------------+------+--------------+--------------|
| | | | |
|------------------------------+------+--------------+--------------|
| Basic and diluted net asset | | | |
| value per share (pence)* | 16 | 34.2 | 41.1 |
+-------------------------------------------------------------------+
* (excluding treasury shares)
The Company Balance Sheet has been prepared in accordance with UK
GAAP.
The accompanying notes form an integral part of these financial
statements.
These financial statements were approved by the Board of Directors,
and authorised for issue on 28 September 2009 and were signed on its
behalf by
Patrick Crosthwaite
Chairman
Consolidated Statement of Changes in Equity
+------------------------------------------------------------------------------------------------------------------+
| |Ordinary| | Capital| | Own |Realised|Unrealised| | |
| | share| Share|redemption| Special| shares| capital| capital| Revenue| |
| | capital|premium| reserve|reserve*| held*|reserve*| reserve*|reserve*| Total|
| | GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
| | | | | | | | | | |
|As at 1 July 2008 | 8,066| 14,422| 793| 32,421|(2,849)|(17,206)| (6,645)| 1,172| 30,174|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Issue of equity (net of costs) | 8| 16| -| -| -| -| -| -| 24|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Purchase of own shares for | | | | | | | | | |
|cancellation (including costs) | (109)| -| 109| (321)| -| -| -| -| (321)|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Net realised losses on | | | | | | | | | |
|investments | -| -| -| -| -| (2,898)| -| -|(2,898)|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Unrealised losses on investments| -| -| -| -| -| -| (971)| -| (971)|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Management and performance fees | | | | | | | | | |
|charged to capital (net of tax) | -| -| -| -| -| (354)| -| -| (354)|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Recovery of VAT capitalised | -| -| -| -| -| 277| -| -| 277|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Revenue profit for the year | -| -| -| -| -| -| -| 682| 682|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Dividends paid in year | -| -| -| -| -| (981)| -| (842)|(1,823)|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
| | | | | | | | | | |
|As at 30 June 2009 | 7,965| 14,438| 902| 32,099|(2,849)|(21,163)| (7,616)| 1,012| 24,788|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
| | | | | | | | | | |
|As at 1 July 2007 | 8,392| 14,422| 468| 33,686|(2,849)|(11,193)| (9,558)| 1,006| 34,374|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Purchase of own shares for | | | | | | | | | |
|cancellation (including costs) | (326)| -| 326| (1,265)| -| -| -| -|(1,265)|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Net realised losses on | | | | | | | | | |
|investments | -| -| -| -| -| (4,731)| -| -|(4,731)|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Unrealised gains on investments | -| -| -| -| -| -| 2,913| -| 2,913|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Management and performance fees | | | | | | | | | |
|charged to capital (net of tax) | -| -| -| -| -| (197)| -| -| (197)|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Revenue profit for the year | -| -| -| -| -| -| -| 957| 957|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Dividends paid in year | -| -| -| -| -| (1,085)| -| (791)|(1,876)|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
| | | | | | | | | | |
|As at 30 June 2008 | 8,066| 14,422| 793| 32,421|(2,849)|(17,206)| (6,645)| 1,172| 30,174|
+------------------------------------------------------------------------------------------------------------------+
* Included within these reserves is an amount of GBP1,483,000 (2008:
GBP6,893,000) which is considered distributable. The Special reserve
has been treated as distributable in determining the amounts
available for distribution.
Company Reconciliation of Movements in Shareholders' Funds
+------------------------------------------------------------------------------------------------------------------+
| |Ordinary| | Capital| | Own |Realised|Unrealised| | |
| | share| Share|redemption| Special| shares| capital| capital| Revenue| |
| | capital|premium| reserve|reserve*| held*|reserve*| reserve*|reserve*| Total|
| | GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|As at 1 July 2008 | 8,066| 14,422| 793| 32,421|(2,849)|(17,206)| (6,645)| 1,172| 30,174|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Issue of equity (net of costs) | 8| 16| -| -| -| -| -| -| 24|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Purchase of own shares for | | | | | | | | | |
|cancellation (including costs) | (109)| -| 109| (321)| -| -| -| -| (321)|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Net realised losses on | | | | | | | | | |
|investments | -| -| -| -| -| (2,898)| -| -|(2,898)|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Unrealised losses on investments| -| -| -| -| -| -| (880)| -| (880)|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Management and performance fees | | | | | | | | | |
|charged to capital (net of tax) | -| -| -| -| -| (354)| -| -| (354)|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Recovery of VAT capitalised | -| -| -| -| -| 224| -| -| 224|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Revenue profit for the year | -| -| -| -| -| -| -| 644| 644|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Dividends paid in year | -| -| -| -| -| (981)| -| (842)|(1,823)|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|As at 30 June 2009 | 7,965| 14,438| 902| 32,099|(2,849)|(21,216)| (7,525)| 974| 24,788|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|As at 1 July 2007 | 8,392| 14,422| 468| 33,686|(2,849)|(11,193)| (9,558)| 1,006| 34,374|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Purchase of own shares for | | | | | | | | | |
|cancellation (including costs) | (326)| -| (326)| (1,265)| -| -| -| -|(1,265)|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Net realised losses on | | | | | | | | | |
|investments | -| -| -| -| -| (4,731)| -| -|(4,731)|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Unrealised gains on investments | -| -| -| -| -| -| 2,913| -| 2,913|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Management and performance fees | | | | | | | | | |
|charged to capital (net of tax) | -| -| -| -| -| (197)| -| -| (197)|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Revenue profit for the year | -| -| -| -| -| -| -| 957| 957|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|Dividends paid in year | -| -| -| -| -| (1,085)| -| (791)|(1,876)|
|--------------------------------+--------+-------+----------+--------+-------+--------+----------+--------+-------|
|As at 30 June 2008 | 8,066| 14,422| 793| 32,421|(2,849)|(17,206)| (6,645)| 1,172| 30,174|
+------------------------------------------------------------------------------------------------------------------+
* Included within these reserves is an amount of GBP1,483,000 (2008:
GBP6,893,000) which is considered distributable. The Special reserve
has been treated as distributable in determining the amounts
available for distribution.
Consolidated Cash Flow Statement
+-------------------------------------------------------------------+
| | | Year ended | Year ended |
| | | 30 June | 30 June |
| | | 2009 | 2008 |
| | Note | GBP'000 | GBP'000 |
|---------------------------------+------+-------------+------------|
| Operating activities | | | |
|---------------------------------+------+-------------+------------|
| Investment income received | | 1,231 | 1,858 |
|---------------------------------+------+-------------+------------|
| Deposit interest received | | 200 | 396 |
|---------------------------------+------+-------------+------------|
| Administration fees paid | | (52) | (59) |
|---------------------------------+------+-------------+------------|
| Investment management fees paid | | (518) | (900) |
|---------------------------------+------+-------------+------------|
| Recovery of VAT | | 457 | - |
|---------------------------------+------+-------------+------------|
| Other cash payments | | (257) | (212) |
|---------------------------------+------+-------------+------------|
| Cash generated from operations | | 1,061 | 1,083 |
|---------------------------------+------+-------------+------------|
| | | | |
|---------------------------------+------+-------------+------------|
| Tax recovered/(paid) | | 52 | (52) |
|---------------------------------+------+-------------+------------|
| Net cash flows from operating | | | |
| activities | 18 | 1,113 | 1,031 |
|---------------------------------+------+-------------+------------|
| | | | |
|---------------------------------+------+-------------+------------|
| Cash flows from investing | | | |
| activities | | | |
|---------------------------------+------+-------------+------------|
| Purchase of non-current asset | | | |
| investments | | (1,770) | (3,434) |
|---------------------------------+------+-------------+------------|
| Disposal of non-current asset | | | |
| investments | | 55 | 9,122 |
|---------------------------------+------+-------------+------------|
| Purchase of current asset | | | |
| investments | | (3,835) | (2,718) |
|---------------------------------+------+-------------+------------|
| Disposal of current asset | | | |
| investments | | 3,835 | - |
|---------------------------------+------+-------------+------------|
| Net cash flows from investing | | | |
| activities | | (1,715) | 2,970 |
|---------------------------------+------+-------------+------------|
| | | | |
|---------------------------------+------+-------------+------------|
| Cash flows from financing | | | |
| activities | | | |
|---------------------------------+------+-------------+------------|
| Issue of Ordinary shares (net | | | |
| of costs) | | 24 | - |
|---------------------------------+------+-------------+------------|
| Equity dividends paid | | (1,823) | (1,876) |
|---------------------------------+------+-------------+------------|
| Purchase of Ordinary shares for | | | |
| cancellation | | (364) | (1,255) |
|---------------------------------+------+-------------+------------|
| Net cash flows used in | | | |
| financing activities | | (2,163) | (3,131) |
|---------------------------------+------+-------------+------------|
| | | | |
|---------------------------------+------+-------------+------------|
| (Decrease)/increase in cash and | | | |
| cash equivalents | | (2,765) | 870 |
|---------------------------------+------+-------------+------------|
| Cash and cash equivalents at | | | |
| the start of the year | | 9,237 | 8,367 |
|---------------------------------+------+-------------+------------|
| | | | |
|---------------------------------+------+-------------+------------|
| Cash and cash equivalents at | | | |
| the end of the year | 17 | 6,472 | 9,237 |
+-------------------------------------------------------------------+
Notes to the announcement
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
Financial Reporting Standards ('FRS') relate to the the Company
financial statements.
Basis of accounting
The financial statements have been prepared in accordance with the
historical cost convention, modified to include the revaluation of
investments in accordance with International Financial Reporting
Standards ('IFRS') adopted for use in the European Union (and
therefore comply with the Article 4 of the EU IAS regulation), in the
case of the Group, and in accordance with Financial Reporting
Standards ('FRS') 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" ('SORP') issued by the Association of
Investment Companies ("AIC") in January 2009, in so far as this does
not conflict with IFRS. Crown Place VCT PLC has decided to adopt the
principles of the January 2009 SORP earlier than the mandatory date.
The financial statements have been prepared in accordance with those
parts of the Companies Act 2006 applicable to companies reporting
under IFRS and FRS. These financial statements are presented in
Sterling to the nearest thousand. Accounting policies have been
applied consistently in current and prior periods.
At the date of authorisation of these financial statements, the
following International Accounting Standards and interpretations were
in issue but not yet effective:
* IAS 1 Presentation of Financial Statements (revised) (effective
for annual periods beginning on or after 1 January 2009)
* IFRS 8 Operating Segments (effective for annual periods beginning
on or after 1 January 2009)
* IAS 23 (amendment) Borrowing Costs (effective for annual periods
beginning on or after 1 January 2009)
* IFRIC 12 Service Concession Arrangements (effective for annual
periods beginning on or after 1
January 2009)
* IAS 27 Consolidated and Separate Financial Statements (effective
for annual periods beginning on or after 1 July 2009)
* IFRS 2 (amendment) Share-based Payments (effective for annual
periods beginning on or after 1 January 2009)
* IFRS 3 Revised Business Combinations (effective for annual
periods beginning on or after 1 July 2009)
* IAS 32 & IAS 1 (amendments) Puttable Financial Instruments and
Obligations arising on Liquidation (effective for annual periods
beginning on or after 1 January 2009)
* IAS 32 (amendment) Financial Instruments: Presentation (effective
for annual periods beginning on or after 1 January 2009)
* IAS 27 and IFRS 1 (amendment) Cost of Investment in Subsidiary
(effective for annual periods beginning on or after 1 January 2009)
* IFRIC 16 Hedges of Net Investment in Foreign Operation (effective
for annual periods beginning on or after 1 October 2008)
* IFRIC 15 Agreements for the Construction of Real Estate
(effective for annual periods beginning on or after 1 January 2009)
* IAS 39 (amendment) Financial Instruments: Recognition and
Measurement (effective for annual periods beginning on or after 1
January 2009)
* IFRS 7 (amendment) Financial Instruments (Disclosures)
(effective for annual periods beginning on or after 1 July 2009)
* IFRIC 17 Distributions of non-cash assets to owners (effective
date for annual periods beginning on or after 1 July 2009)
* IFRIC 18 Transfers of assets from customers (effective date for
annual periods beginning on or after 1 July 2009)
The above International Accounting Standards and interpretations have
not been applied in this annual report and financial statements and
are not expected to have any material impact on the financial
statements although some changes will be required to the format of
the Financial Statements and disclosures.
Basis of consolidation
The Group consolidated financial statements incorporate the financial
statements of the Company for the year ended 30 June 2009 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 loss before tax for the period dealt with in the accounts
of the Group is GBP3,264,000 (2008: loss GBP1,076,000).
Segmental reporting
The Directors are of the opinion that the Group and the Company are
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 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 financial statements
requires estimates, assumptions and judgements to be made, which
affect the reported results and balances. Actual outcomes may differ
from these estimates, with a consequential impact on the results of
future periods. These estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are
those used to determine the fair value of investments at fair value
through the profit or loss.
The valuation of investments at fair value through the profit or loss
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.
Fixed and current asset investments
Quoted and unquoted equity investments
In accordance with IAS 39 'Financial Instruments: Recognition and
Measurement', and FRS 26 'Financial Instruments: Recognition and
Measurement', quoted and unquoted 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 (IPEVCV
guidelines).
Fair value movements on equity investments and gains and losses
arising on the disposal of investments are reflected in the capital
column of the Income Statement in accordance with the AIC SORP.
Realised gains or losses on the sale of investments will be reflected
in the Realised capital reserve, and unrealised gains or losses
arising from the revaluation of investments will be reflected in the
Unrealised capital reserve.
Warrants, convertibles and unquoted equity derived instruments
Warrants, convertibles and unquoted equity derived instruments are
only valued if their exercise or contractual conversion terms would
allow them to be exercised or converted as at the balance sheet date,
and if there is additional value to the Company in exercising or
converting as at the balance sheet date. Otherwise these instruments
are held at nil value. The valuation techniques used are those used
for the underlying equity investment.
Unquoted loan stock
Unquoted loan stock is classified as loans and receivables in
accordance with IAS 39 and FRS 26 and carried at amortised cost using
the Effective Interest Rate method ("EIR") less impairment. Movements
in the amortised cost relating to interest income are reflected in
the revenue column of the Income Statement, and hence are reflected
in the Revenue reserve, and movements in respect of capital
provisions are reflected in the capital column of the Income
Statement and are reflected in the Realised capital reserve following
sale, or in the Unrealised capital reserve on revaluation.
Loan stocks which are not impaired or past due are considered fully
performing in terms of contractual interest and capital repayments
and the Board does not consider that there is a current likelihood of
a shortfall on security cover for these assets. For unquoted loan
stock, the amount of the impairment is the difference between the
asset's cost and the present value of estimated future cash flows,
discounted at the effective interest rate.
Floating rate notes
In accordance with IAS 39 and FRS 26, floating rate notes are
designated as FVTPL. Floating rate notes are valued at market bid
price at the balance sheet date. Floating rate notes are classified
as current asset investments as they are investments held for the
short term.
It is not the Group or the Company's policy to exercise control or
significant influence over investee companies. Therefore in
accordance with the exemptions under IAS 28 "Investments in
associates" and FRS 9 "Associates and joint ventures", those
undertakings in which the Group or Company holds more than 20 per
cent. of the equity are not regarded as associated undertakings.
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.
Investment income
Quoted and unquoted equity income
Dividend income is not recognised as part of the fair value movement
of an investment, but is recognised separately as investment income
through the Revenue reserve when a share becomes ex-dividend.
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.
Floating rate note income
Floating rate note income is recognised on an accruals basis using
the interest rate applicable to the floating rate note at that time.
Taxation
Taxation is applied on a current basis in accordance with IAS 12 and
FRS 16 "Income taxes". Taxation associated with capital expenses is
applied in accordance with the SORP. Deferred taxation is provided in
full on temporary differences in accordance with IAS 12 and timing
differences in accordance with FRS 16, that result in an obligation
at the balance sheet date to pay more tax or a right to pay less tax,
at a future date, at rates expected to apply when they crystallise
based on current tax rates and law. Timing differences arise from the
inclusion of items of income and expenditure in taxation computations
in periods different from those in which they are included in the
financial statements. Temporary differences arise from differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes.
Deferred tax assets are recognised to the extent that it is probable
that future taxable profit will be available against which unused tax
losses and credits can be utilised.
Dividends
In accordance with IAS 10 and FRS 21 "Events after the balance sheet
date", dividends are accounted for in the period in which the
dividend has been paid, or approved by shareholders.
Issue costs
Issue costs associated with the allotment of share capital have been
deducted from the share premium account.
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 Income Statement,
except for management fees and performance incentive fees which are
allocated in part to the capital column of the Income Statement, to
the extent that these relate to an 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.
Receivables and payables/debtors and creditors
* Receivables are non-interest bearing and are short term in nature
and are accordingly stated at amortised cost, as reduced by
appropriate allowances for estimated irrecoverable amounts. The
Directors consider that the carrying amount of receivables/debtors is
not materially different to their fair value.
* Payables are non-interest bearing and are stated at amortised
cost. The Directors consider that the carrying amount of
payables/creditors is not materially different to their fair value.
Realised capital reserves
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.
Unrealised capital reserves
Increases and decreases in the valuation of investments against cost
are disclosed in this 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.
Own shares held reserve
This reserve accounts for amounts by which the Company's
distributable reserves are diminished through the repurchase of the
Company's own shares for treasury purposes.
Special reserve
The cancellation of the share premium account has created a special
reserve that can be used to fund market purchases and subsequent
cancellation of own shares, to cover gross realised losses, and for
other distributable purposes.
2. Losses on investments
+-------------------------------------------------------------------+
| | Year ended | Year ended |
| | 30 June | 30 June |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
|-----------------------------------------+------------+------------|
| Unrealised losses on non-current asset | | |
| investments held at fair value through | | |
| profit or loss account | (3,363) | (3,716) |
|-----------------------------------------+------------+------------|
| Net unrealised losses transferred to | | |
| realised losses in the year | 2,909 | 5,515 |
|-----------------------------------------+------------+------------|
| Unrealised (losses)/gains on | | |
| non-current asset investments held at | | |
| amortised cost | (549) | 1,145 |
|-----------------------------------------+------------+------------|
| Unrealised (losses)/gains on | | |
| non-current asset investments | (1,003) | 2,944 |
|-----------------------------------------+------------+------------|
| | | |
|-----------------------------------------+------------+------------|
| Unrealised gains/(losses) on current | | |
| asset investments held at fair value | 32 | (31) |
|-----------------------------------------+------------+------------|
| Unrealised (losses)/gains sub total | (971) | 2,913 |
|-----------------------------------------+------------+------------|
| Realised gains on non-current asset | | |
| investments held at fair value through | | |
| profit or loss account | 11 | 784 |
|-----------------------------------------+------------+------------|
| Net realised losses transferred from | | |
| unrealised losses in the year | (2,909) | (5,515) |
|-----------------------------------------+------------+------------|
| Realised losses sub total | (2,898) | (4,731) |
|-----------------------------------------+------------+------------|
| | | |
|-----------------------------------------+------------+------------|
| | (3,869) | (1,818) |
+-------------------------------------------------------------------+
Investments valued on amortised cost basis are unquoted loan stock
investments as described in note 10.
3. Investment income and deposit interest
+-------------------------------------------------------------------+
| | Year ended | Year ended |
| | 30 June | 30 June |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
|-----------------------------------------+------------+------------|
| Income recognised on investments held | | |
| at fair value through profit or loss | | |
|-----------------------------------------+------------+------------|
| UK dividend income | 80 | 69 |
|-----------------------------------------+------------+------------|
| Management fees received from equity | | |
| investments | 2 | 3 |
|-----------------------------------------+------------+------------|
| Floating rate note interest | 116 | 144 |
|-----------------------------------------+------------+------------|
| Bank deposit interest | 135 | 441 |
|-----------------------------------------+------------+------------|
| | 333 | 657 |
|-----------------------------------------+------------+------------|
| Income recognised on investments held | | |
| at amortised cost | | |
|-----------------------------------------+------------+------------|
| Return on loan stock investments | 490 | 1,057 |
|-----------------------------------------+------------+------------|
| Euro commercial paper interest | 165 | - |
|-----------------------------------------+------------+------------|
| | 988 | 1,714 |
+-------------------------------------------------------------------+
Interest income earned on impaired investments at 30 June 2009
amounted to GBP77,000 (2008: GBP4,000).
4. Investment management fees
+--------------------------------------------------------------------+
| |Year ended 30 June 2009|Year ended 30 June 2008|
|--------------------+-----------------------+-----------------------|
| | Revenue| Capital|Total| Revenue| Capital|Total|
| | GBP'000| GBP'000|GBP'000| GBP'000| GBP'000|GBP'000|
|--------------------+--------+--------+-----+--------+--------+-----|
| | | | | | | |
|Investment | 118| 354| 472| 167| 502| 669|
|management fee | | | | | | |
+--------------------------------------------------------------------+
Further details of the Management Agreement under which the
investment management fee is paid are given in the Directors' Report
and Enhanced Business Review on page 23 of the full Annual Report and
Financial Statements. Additional management and performance fees
(GBP17,000 and GBP71,000 respectively) have been recognised as a result
of the recovery of historic VAT and have been set off against the VAT
recovery amount in the Income Statement.
5. Recovery of VAT
HMRC issued a business briefing on 24 July 2008 which permitted the
recovery of historic VAT that had been charged on management fees,
and which made these fees exempt from VAT with effect from 1 October
2008.
The Manager, Albion Ventures LLP has made a claim for the historic
VAT that Crown Place VCT PLC has been charged. A net sum of GBP369,000
has been recognised as a separate item in the Income Statement,
allocated between revenue and capital return in the same proportion
as that which the original VAT has been charged.
6. Loss before taxation is stated after charging:
+-------------------------------------------------------------------+
| | Year ended | Year ended |
| | 30 June | 30 June |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
|-----------------------------------------+------------+------------|
| | | |
| Directors' remuneration | 83 | 83 |
|-----------------------------------------+------------+------------|
| National insurance and/or VAT on | | |
| Directors' remuneration | 7 | 8 |
|-----------------------------------------+------------+------------|
| Auditor's remuneration: | | |
| - audit | 25 | 18 |
|-----------------------------------------+------------+------------|
| - - the auditing of | | |
| accounts of subsidiaries of the Company | | |
| pursuant to legislation | 6 | 6 |
|-----------------------------------------+------------+------------|
| Other expenses | 159 | 192 |
|-----------------------------------------+------------+------------|
| | 280 | 307 |
+-------------------------------------------------------------------+
The audit fee for the year ended 30 June 2008 includes a credit of
GBP7,000 in respect of the prior year.
Further information regarding Directors' remuneration can be found in
the Directors' Remuneration Report in the full Annual Report and
Financial Statements.
7. Taxation
+-------------------------------------------------------------------------+
| | | |
| |Year ended 30 June 2009|Year ended 30 June 2008|
|-------------------------+-----------------------+-----------------------|
| | Revenue| Capital|Total| Revenue| Capital|Total|
| | GBP'000| GBP'000|GBP'000| GBP'000| GBP'000|GBP'000|
|-------------------------+--------+--------+-----+--------+--------+-----|
| | | | | | | |
|UK corporation tax | | | | | | |
|(charge)/credit | -| -| -| (283)| 304| 21|
+-------------------------------------------------------------------------+
The effective rate for the year to 30 June 2009 is 28 per cent. The
tax charge for the year shown in the Income Statement is lower than
the standard rate of corporation tax of 28 per cent. (2008: 29.5 per
cent.). The differences are explained below:
+-------------------------------------------------------------------+
| | Year ended | Year ended |
| | 30 June | 30 June |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
|-----------------------------------------+------------+------------|
| Loss on ordinary activities before | (3,264) | (1,080) |
| taxation | | |
|-----------------------------------------+------------+------------|
| | | |
|-----------------------------------------+------------+------------|
| Loss on ordinary activities multiplied | (914) | (319) |
| by the standard rate of corporation tax | | |
| (28 per cent.) | | |
|-----------------------------------------+------------+------------|
| Effect of losses on capital assets not | 1,083 | 536 |
| subject to taxation | | |
|-----------------------------------------+------------+------------|
| Effect of income not subject to | (22) | (20) |
| taxation | | |
|-----------------------------------------+------------+------------|
| Utilisation of tax losses | (147) | (197) |
|-----------------------------------------+------------+------------|
| Release of over accrual in prior year | - | (21) |
|-----------------------------------------+------------+------------|
| | - | (21) |
+-------------------------------------------------------------------+
No provision for deferred tax has been made in the current or prior
accounting period. The Company and Group have not recognised a
deferred tax asset of GBP1,490,000 (2008: GBP1,120,000) in respect of
unutilised management expenses as it is not considered sufficiently
probable that there will be taxable profits against which to utilise
these expenses in the foreseeable future. The Group has not
recognised a further deferred tax asset of GBP3,603,000 (2008:
GBP4,120,000) in respect of unutilised management expenses and deficits
arising from non-trading relationships which would only be used if
its subsidiaries made significant profits.
8. Dividends
+-------------------------------------------------------------------+
| | Year ended 30 June 2009 | Year ended 30 June 2008 |
|-----------+---------------------------+---------------------------|
| | Revenue | Capital | Total | Revenue | Capital | Total |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
|-----------+---------+---------+-------+---------+---------+-------|
| First | | | | | | |
| dividend | | | | | | |
| paid on | | | | | | |
| 28 | | | | | | |
| December | | | | | | |
| 2007 | | | | | | |
| (1.25 | | | | | | |
| pence per | | | | | | |
| share) | - | - | - | 604 | 340 | 944 |
|-----------+---------+---------+-------+---------+---------+-------|
| Second | | | | | | |
| dividend | | | | | | |
| paid on | | | | | | |
| 25 April | | | | | | |
| 2008 | | | | | | |
| (1.25 | | | | | | |
| pence per | | | | | | |
| share) | - | - | - | 187 | 745 | 932 |
|-----------+---------+---------+-------+---------+---------+-------|
| First | | | | | | |
| dividend | | | | | | |
| paid on 8 | | | | | | |
| August | | | | | | |
| 2008 | | | | | | |
| (1.25 | | | | | | |
| pence per | | | | | | |
| share) | 661 | 257 | 918 | - | - | - |
|-----------+---------+---------+-------+---------+---------+-------|
| Second | | | | | | |
| dividend | | | | | | |
| paid on | | | | | | |
| 17 April | | | | | | |
| 2009 | | | | | | |
| (1.25 | | | | | | |
| pence per | | | | | | |
| share) | 181 | 724 | 905 | - | - | - |
|-----------+---------+---------+-------+---------+---------+-------|
| | 842 | 981 | 1,823 | 791 | 1,085 | 1,876 |
+-------------------------------------------------------------------+
In addition to the dividends paid above, the Board has declared a
first dividend for the year ending 30 June 2010, of 1.25 pence per
Crown Place VCT PLC share (0.25 pence to be paid out of revenue
profits and 1.00 pence out of realised capital gains), to be paid on
6 November 2009 to shareholders on the register as at 9 October 2009.
The total amount of this dividend is expected to be approximately
GBP905,000.
9. Basic and diluted return per share
+--------------------------------------------------------------------------+
| |Year ended 30 June 2009| Year ended 30 June 2008|
|-------------------------+-----------------------+------------------------|
| |Revenue|Capital| Total| Revenue|Capital| Total|
|-------------------------+-------+-------+-------+--------+-------+-------|
|Return attributable to | | | | | | |
|equity shares (GBP'000) | 682|(3,946)|(3,264)| 957|(2,016)|(1,059)|
|-------------------------+-------+-------+-------+--------+-------+-------|
|Return attributable per | | | | | | |
|Ordinary share (pence) | | | | | | |
|(basic and diluted) | 0.9| (5.4)| (4.5)| 1.3| (2.7)| (1.4)|
+--------------------------------------------------------------------------+
The return per share has been calculated on 72,858,300 shares (2008:
75,364,144), being the weighted average number of shares in issue for
the year, excluding treasury shares of 7,260,410 (2008: 7,260,410).
There are no convertible instruments, derivatives or contingent share
agreements in issue, and therefore no dilution affecting the return
per share. The basic return per share is therefore the same as the
diluted return per share.
10. Fixed asset investments
+-------------------------------------------------------------------+
| | 30 June | 30 June |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
|-----------------------------------------------+---------+---------|
| Group and Company | | |
|-----------------------------------------------+---------+---------|
| Qualifying unquoted equity and preference | | |
| shares | 4,826 | 6,094 |
|-----------------------------------------------+---------+---------|
| Qualifying quoted equity | 885 | 1,108 |
|-----------------------------------------------+---------+---------|
| Qualifying equity derived instruments | 98 | 98 |
|-----------------------------------------------+---------+---------|
| Qualifying unquoted loan stock | 10,054 | 10,798 |
|-----------------------------------------------+---------+---------|
| Non-qualifying equity | 6 | 7 |
|-----------------------------------------------+---------+---------|
| Non-qualifying unquoted loan stock | 9 | 106 |
|-----------------------------------------------+---------+---------|
| Total investments | 15,878 | 18,211 |
+-------------------------------------------------------------------+
+--------------------------------------------------------------------------------------------------------------+
| |Qualifying| | | | | | |
| | unquoted| | Qualifying| | | | |
| |equity and|Qualifying| equity|Qualifying| |Non-qualifying| |
| |preference| quoted| derived| unquoted|Non-qualifying| unquoted loan| |
| | shares| equity|instruments|loan stock| quoted equity| stock| Total|
| | GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000|
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Group & Company | | | | | | | |
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Opening valuation as at 1 | | | | | | | |
|July 2008 | 6,094| 1,108| 98| 10,798| 7| 106| 18,211|
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Purchases at cost | 1,111| -| -| 865| -| -| 1,976|
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Disposal proceeds | (10)| -| -| (46)| -| -| (56)|
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Realised losses | (2,138)| -| -| (760)| -| -|(2,898)|
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Movement in loan stock | | | | | | | |
|capitalised accrued income | -| -| -| 83| -| -| 83|
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Movement in loan stock | | | | | | | |
|accrued income | -| -| -| (352)| -| -| (352)|
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Unrealised losses | (231)| (223)| -| (534)| (1)| (97)|(1,086)|
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Closing valuation as at 30 | | | | | | | |
|June 2009 | 4,826| 885| 98| 10,054| 6| 9| 15,878|
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Movement in loan stock | | | | | | | |
|accrued income | | | | | | | |
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Opening accumulated | | | | | | | |
|movement in loan stock | -| -| -| 480| -| -| 480|
|accrued income | | | | | | | |
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Movement in loan stock | | | | | | | |
|accrued income | -| -| -| (352)| -| -| (352)|
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Closing accumulated | | | | | | | |
|movement in loan stock | | | | | | | |
|accrued income | -| -| -| 128| -| -| 128|
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Movement in unrealised | | | | | | | |
|losses | | | | | | | |
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Opening accumulated | (4,720)| (436)| -| (1,128)| (4)| (325)|(6,613)|
|unrealised losses | | | | | | | |
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Movement in loan stock | -| -| -| 83| -| -| 83|
|capitalised accrued income | | | | | | | |
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Movement in unrealised | (231)| (223)| -| (534)| (1)| (97)|(1,086)|
|losses | | | | | | | |
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Closing accumulated | (4,951)| (659)| -| (1,579)| (5)| (422)|(7,616)|
|unrealised losses | | | | | | | |
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Historic cost basis | | | | | | | |
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Opening book cost | 10,813| 1,545| 98| 11,447| 11| 431| 24,345|
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Purchases at cost | 1,111| -| -| 865| -| -| 1,976|
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Sales at cost | (2,147)| -| -| (807)| -| -|(2,954)|
|---------------------------+----------+----------+-----------+----------+--------------+--------------+-------|
|Closing book cost | 9,777| 1,545| 98| 11,505| 11| 431| 23,367|
+--------------------------------------------------------------------------------------------------------------+
Equity and preference share investments held at fair value through
profit or loss total GBP5,815,000 (2008: GBP7,307,000). Investments held
at amortised cost total GBP10,063,000 (2008: GBP10,904,000).
There has been no re-designation of fixed asset investments during
the year.
The following disposals, repayments and permanent diminutions in
value took place during the year:
+-------------------------------------------------------------------+
| | | | Opening |
| | | | carrying |
| | Net proceeds | | value as at |
| Name of Company | from sale | Cost | 1 July 2008 |
| | GBP'000 | GBP'000 | GBP'000 |
|------------------------------+--------------+-------+-------------|
| Blackbay Limited | 27 | 27 | 27 |
|------------------------------+--------------+-------+-------------|
| Forward Media Limited (in | - | 500 | - |
| liquidation) | | | |
|------------------------------+--------------+-------+-------------|
| GB Pub Company Limited | 19 | 18 | 19 |
|------------------------------+--------------+-------+-------------|
| Palgrave Brown Holdings | - | 77 | - |
| Limited (in administration) | | | |
|------------------------------+--------------+-------+-------------|
| Sanastro plc (in | - | 832 | - |
| liquidation) | | | |
|------------------------------+--------------+-------+-------------|
| Tuscan Energy Group Limited | - | 850 | - |
|------------------------------+--------------+-------+-------------|
| Wisdom I.T. Holdings Limited | - | 650 | - |
| (in liquidation) | | | |
|------------------------------+--------------+-------+-------------|
| | 46 | 2,954 | 46 |
+-------------------------------------------------------------------+
Fixed asset investment class valuation methodologies
Quoted equity investments (both qualifying and non-qualifying) are
valued at market bid price as at the balance sheet date.
Unquoted loan stock investments are valued on an amortised cost
basis. Loan stocks with a fixed interest rate total GBP9,677,000 (2008:
GBP10,520,000). Loan stocks with a floating rate of interest total
GBP386,000 (2008: GBP384,000).
The Directors believe that the carrying value of loan stock (valued
using amortised cost) is not materially different to fair value.
The Company does not hold any assets as the result of the enforcement
of security during the year, and believes that the carrying values
for both impaired and past due assets are covered by the value of
security held for these loan stock investments.
Unquoted equity investments and warrants and convertibles are valued
in accordance with the IPEVCV guidelines as follows;
+-------------------------------------------------------------------+
| | 30 June | 30 June |
| | 2009 | 2008 |
| Investment methodology | GBP'000 | GBP'000 |
|-------------------------------------------+---------+-------------|
| Cost (reviewed for impairment) | 500 | 1,215 |
|-------------------------------------------+---------+-------------|
| Net asset value supported by third party | | |
| valuation | 920 | 1,825 |
|-------------------------------------------+---------+-------------|
| Recent investment price | 993 | 423 |
|-------------------------------------------+---------+-------------|
| Earnings multiple | 2,511 | 2,367 |
|-------------------------------------------+---------+-------------|
| Revenue multiple | - | 362 |
|-------------------------------------------+---------+-------------|
| | 4,924 | 6,192 |
+-------------------------------------------------------------------+
The unquoted equity instruments had the following movements between
investment methodologies between 30 June 2008 and 30 June 2009:
+-------------------------------------------------------------------+
| | Carrying value | |
| | as at | |
| Change in investment | 30 June 2009 | |
| methodology (2008 to 2009) | GBP'000 | Explanatory note |
|----------------------------+----------------+---------------------|
| | | |
|----------------------------+----------------+---------------------|
| Cost (reviewed for | | Investment held at |
| impairment) to recent | | cost for the first |
| investment price | 375 | year |
|----------------------------+----------------+---------------------|
| Cost (reviewed for | | Investment held at |
| impairment) to earnings | | cost for the first |
| multiple | 34 | year |
|----------------------------+----------------+---------------------|
| | | Company became |
| Revenue multiple to | | profitable in the |
| earnings multiple | 179 | year |
|----------------------------+----------------+---------------------|
| Earnings multiple to net | | |
| asset value supported by | | Companies no longer |
| third party valuation | 52 | profitable |
|----------------------------+----------------+---------------------|
| Cost (reviewed for | | |
| impairment) to net asset | | Investment held at |
| value supported by third | | cost for the first |
| party valuation | 199 | year |
+-------------------------------------------------------------------+
In the absence of a more appropriate valuation methodology,
investments held for less than 12 months are valued at cost reviewed
for impairment. Thereafter, the valuation will move to the most
appropriate valuation methodology for an investment within its
market, with regard to the financial health of the investment and the
IPEVCV Guidelines. The Directors believe that, within these
parameters, there are no other possible methods of valuation which
would be reasonable as at 30 June 2009.
11. Significant interests
The principal activity of the Company is to select and hold a
portfolio of investments in unquoted securities. Although the
Company, through the Manager, will, in some cases, be represented on
the board of the investee company, it will not take a controlling
interest or become involved in the management. The size and structure
of the companies with unquoted securities may result in certain
holdings in the portfolio representing a participating interest
without there being any partnership, joint venture or management
consortium agreement.
The Company has interests of greater than 20 per cent. of the nominal
value of any class of the allotted shares in the investee companies
as at 30 June 2009 as described below:
+-------------------------------------------------------------------+
| Company | Country of | Principal | % class | % |
| | incorporation | activity | and | total |
| | | | share | voting |
| | | | type | rights |
|--------------+---------------+----------------+----------+--------|
| Booth | Great Britain | Manufacturer | 100.0% A | 22.8% |
| Dispensers | | of vending | Ordinary | |
| Limited | | machine | | |
| | | components and | | |
| | | beer pump | | |
| | | coolers | | |
|--------------+---------------+----------------+----------+--------|
| ELE Advanced | Great Britain | Manufacturer | 74.4% B | 48.3% |
| Technologies | | of precision | Ordinary | |
| Limited | | engineering | | |
| | | components for | | |
| | | the industrial | | |
| | | gas turbine, | | |
| | | aerospace and | | |
| | | automotive | | |
| | | markets | | |
|--------------+---------------+----------------+----------+--------|
| House of | Great Britain | Chocolate | 33.2% B | 23.3% |
| Dorchester | | manufacturer | Ordinary | |
| Limited | | | | |
|--------------+---------------+----------------+----------+--------|
| Tuscan | Great Britain | In | 42.5% C | None |
| Energy Group | | administration | Ordinary | |
| Limited* | | | | |
|--------------+---------------+----------------+----------+--------|
| GW 665 | Great Britain | No trading | 37.0% B | 37.0% |
| Limited* | | activity | Ordinary | |
+-------------------------------------------------------------------+
* Carried at nil as at 30 June 2009.
As permitted by IAS 28 and FRS 9, the investments listed above are
held as part of an investment portfolio, and their value to the
Company is as part of a portfolio of investments. Therefore these
investments are not considered to be associated undertakings.
12. Investments in subsidiary undertakings
+-------------------------------------------------------------------+
| | 30 June 2009 |
|-------------------------+-----------------------------------------|
| | CP1 VCT PLC | CP2 VCT PLC | Total GBP'000 |
| | GBP'000 | GBP'000 | |
|-------------------------+-------------+-------------+-------------|
| Carrying value as at 1 | 6,585 | 8,474 | 15,059 |
| July 2008 | | | |
|-------------------------+-------------+-------------+-------------|
| Movement in subsidiary | 51 | 39 | 90 |
| net assets | | | |
|-------------------------+-------------+-------------+-------------|
| | 6,636 | 8,513 | 15,149 |
+-------------------------------------------------------------------+
+-------------------------------------------------------------------+
| | 30 June 2008 |
|-------------------------+-----------------------------------------|
| | CP1 VCT PLC | CP2 VCT PLC | Total GBP'000 |
| | GBP'000 | GBP'000 | |
|-------------------------+-------------+-------------+-------------|
| Carrying value as at 1 | 6,769 | 11,209 | 17,978 |
| July 2007 | | | |
|-------------------------+-------------+-------------+-------------|
| Movement in subsidiary | (184) | (2,735) | (2,919) |
| net assets | | | |
|-------------------------+-------------+-------------+-------------|
| | 6,585 | 8,474 | 15,059 |
+-------------------------------------------------------------------+
The subsidiary companies currently hold cash and intercompany
balances.
Both CP1 VCT PLC and CP2 VCT PLC are wholly owned by Crown Place VCT
PLC as follows:
+-------------------------------------------------------------------+
| | 30 June 2009 |
|---------------------------------------+---------------------------|
| | CP1 VCT PLC | CP2 VCT PLC |
|---------------------------------------+-------------+-------------|
| Nominal value of shares held | GBP6,382,746 | GBP8,219,350 |
|---------------------------------------+-------------+-------------|
| Percentage of authorised share | 57.8% | 59.8% |
| capital in issue | | |
|---------------------------------------+-------------+-------------|
| Percentage of total voting rights | 100% | 100% |
| held | | |
+-------------------------------------------------------------------+
13. Current assets include the following:
+-------------------------------------------------------------------+
| | 30 June 2009 | 30 June 2008 |
|------------------------------+-----------------+------------------|
| | Group | Company | Group | Company |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
|------------------------------+-------+---------+-------+----------|
| Trade and other | | | | |
| receivables/debtors | 55 | 55 | 308 | 302 |
|------------------------------+-------+---------+-------+----------|
| | | | | |
|------------------------------+-------+---------+-------+----------|
| Current tax asset | - | - | 53 | 53 |
|------------------------------+-------+---------+-------+----------|
| | | | | |
|------------------------------+-------+---------+-------+----------|
| Nationwide Building Society | | | | |
| floating rate note 7 July | | | | |
| 2009 | 2,718 | 2,718 | 2,686 | 2,686 |
+-------------------------------------------------------------------+
The investment in the Nationwide Building Society floating rate note
represents money held for investment. The floating rate note can be
converted to cash within three working days. This sum is regarded as
money held pending investment and is treated as liquid resources in
the cash flow statement. This floating rate note matured on 7 July
2009 at its full face value of GBP2,720,000.
14. Trade and other payables/creditors
+-------------------------------------------------------------------+
| | 30 June 2009 | 30 June 2008 |
| | | |
|-------------------------------+-----------------+-----------------|
| | Group | Company | Group | Company |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
|-------------------------------+-------+---------+-------+---------|
| Amounts falling due within | | | | |
| one year: | | | | |
|-------------------------------+-------+---------+-------+---------|
| Amounts due to subsidiary | | | | |
| undertakings | - | 14,968 | - | 12,390 |
|-------------------------------+-------+---------+-------+---------|
| Other payables | 39 | 39 | 51 | 51 |
|-------------------------------+-------+---------+-------+---------|
| Accruals | 296 | 260 | 270 | 244 |
|-------------------------------+-------+---------+-------+---------|
| | 335 | 15,267 | 321 | 12,685 |
+-------------------------------------------------------------------+
15. Called up share capital
+-------------------------------------------------------------------+
| | 30 June | 30 June |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
|-----------------------------------------------+---------+---------|
| Authorised | | |
|-----------------------------------------------+---------+---------|
| 140,000,000 Ordinary shares of 10p each | | |
| (2008: 140,000,000) | 14,000 | 14,000 |
|-----------------------------------------------+---------+---------|
| | | |
| Allotted, called up and fully paid | | |
|-----------------------------------------------+---------+---------|
| 79,657,180 Ordinary shares of 10p each (2008: | | |
| 80,664,390) | 7,965 | 8,066 |
|-----------------------------------------------+---------+---------|
| | | |
| Allotted, called up and fully paid excluding | | |
| treasury shares | | |
|-----------------------------------------------+---------+---------|
| 72,396,770 Ordinary shares of 10p each (2008: | | |
| 73,403,980) | 7,240 | 7,340 |
+-------------------------------------------------------------------+
The Company repurchased for cancellation 1,091,300 (2008: 3,256,044)
Ordinary shares during the year at a total cost of GBP321,000 (2008:
GBP1,265,000) representing 1.4 per cent. of the shares in issue
(excluding treasury shares) as at 1 July 2008. The shares purchased
for cancellation were funded from the Special reserve. The total
number of shares held in treasury as at 30 June 2009 was 7,260,410
(2008: 7,260,410).
Under the terms of the Dividend Reinvestment Scheme Circular dated 26
February 2009, the following Ordinary shares of nominal value 10
pence were allotted during the year:
+----------------------------------------------------------------------+
| | | | | | |
| | | |Issue| | |
| | | |price| | |
| | |Aggregate| per| | |
| | | nominal|share| |Opening market price|
| |Number of| value of|pence|Consideration| per share on|
|Allotment| shares| shares| per| received| allotment pence per|
| date| allotted| GBP'000|share| GBP'000| share|
|---------+---------+---------+-----+-------------+--------------------|
|17 April | 84,090| 8|35.04| 29| 22.50|
|2009 | | | | | |
+----------------------------------------------------------------------+
16. Basic and diluted net asset value per Ordinary share
The Group and Company net asset value attributable to the Ordinary
shares at the year end was as follows:
+-------------------------------------------------------------------+
| | 30 June | 30 June |
| | 2009 | 2008 |
|-----------------------------------------------+---------+---------|
| Net asset value per share attributable | | |
| (pence) | 34.2 | 41.1 |
+-------------------------------------------------------------------+
The net asset value per share at the year end is calculated in
accordance with the Articles of Association and is based upon total
shares in issue less treasury shares of 72,396,770 shares (2008:
73,403,980) as at 30 June 2009.
There are no convertible instruments, derivatives or contingent share
agreements in issue. The Company's policy is to sell treasury shares
at a price greater than the purchase price hence the net asset value
per share on a diluted basis would be equal to or greater than the
basic net asset value per share, depending on the actual price
achieved for selling the treasury shares.
17. Cash and cash equivalents/cash at bank and in hand
+--------------------------------------------------+
| | 30 June 2009 | 30 June 2008 |
|--------------+-----------------+-----------------|
| | Group | Company | Group | Company |
|--------------+-------+---------+-------+---------|
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
|--------------+-------+---------+-------+---------|
| Cash at bank | 6,472 | 6,255 | 9,237 | 6,548 |
+--------------------------------------------------+
18. Reconciliation of revenue return on ordinary activities before
taxation to net cash inflow from operating activities
+-------------------------------------------------------------------+
| | Year ended | Year ended |
| | 30 June | 30 June |
| | 2008 | 2008 |
| | GBP'000 | GBP'000 |
|-----------------------------------------+------------+------------|
| Revenue return before tax | 682 | 1,240 |
|-----------------------------------------+------------+------------|
| Capitalised expenses | (354) | (502) |
|-----------------------------------------+------------+------------|
| Recovery of VAT charged to capital | 277 | - |
|-----------------------------------------+------------+------------|
| Decrease in accrued amortised loan | | |
| stock interest | 352 | 648 |
|-----------------------------------------+------------+------------|
| Decrease/(increase) in receivables | 139 | (114) |
|-----------------------------------------+------------+------------|
| Increase/(decrease) in payables | 17 | (241) |
|-----------------------------------------+------------+------------|
| Net cash inflow from operating | | |
| activities | 1,113 | 1,031 |
+-------------------------------------------------------------------+
19. Capital and financial instruments risk management
The following policies are with reference to both the Company and the
Group except where the 'Company' is used below.
The Group's maximum permitted gearing is GBP23,883,000 (2008:
GBP29,257,000) and as at 30 June 2009, the Group's gearing was nil
(2008: nil). The Group's policy on gearing is described in more
detail on page 20 of the Directors' Report and Enhanced Business
Review in the full Annual Report and Financial Statements.
The Group's capital comprises Ordinary shares as described in note
15. The Company is permitted to buy back its own shares for
cancellation or treasury purposes, and this is described in more
detail on page 21 of the Directors' Report and Enhanced Business
Review in the full Annual Report and Financial Statements.
The Group's financial instruments comprise equity and loan stock
investments in unquoted companies, equity in AIM quoted companies,
floating rate notes, cash balances, short term debtors and creditors
which arise from its operations. The main purpose of these financial
instruments is to generate revenue and capital appreciation for the
Group's operations. The Group has no gearing or other financial
liabilities apart from short term creditors. The Group does not use
any derivatives for the management of its balance sheet.
The principal risks arising from the Group's operations are:
* Investment (or market) risk (which comprises investment price and
cash flow interest rate risk);
* credit risk; and
* liquidity risk.
The Board regularly reviews and agrees policies for managing each of
these risks. There have been no changes in the nature of the risks
that the Group has faced during the past year, and apart from where
noted below, there have been no changes in the objectives, policies
or processes for managing risks during the past year. The key risks
are summarised as follows:
Investment risk
As a venture capital trust, it is the Group's specific nature to
evaluate and control the investment risk of its portfolio in unquoted
and in quoted companies, details of which are shown on page 11 in the
full Annual Report and Financial Statements. Investment risk is the
exposure of the Group to the revaluation and devaluation of
investments. The main driver of investment risk is the operational
and financial performance of the investee companies and the dynamics
of market quoted comparators. The Manager receives management
accounts from investee companies, and members of the investment
management team often sit on the boards of unquoted investee
companies; this enables the close identification, monitoring and
management of investment risk.
The Manager and the Board formally review investment risk (which
includes market price risk), both at the time of initial investment
and at quarterly Board meetings.
The Board monitors the prices at which sales of investments are made
to ensure that profits to the Group are maximised, and that
valuations of investments retained within the portfolio appear
sufficiently prudent and realistic compared to prices being achieved
in the market for sales of unquoted investments.
The maximum investment risk as at the balance sheet date is the value
of the non-current and current asset investment portfolio which is
GBP18,596,000 (2008: GBP20,897,000). Non-current and current asset
investments form 75 per cent. of the net asset value as at 30 June
2009 (2008: 69 per cent.).
More details regarding the classification of non-current and current
asset investments are shown in notes 10 and 13.
Investment price risk
Investment price risk is the risk that the fair value of future
investment cash flows will fluctuate due to factors specific to an
investment instrument or to a market in similar instruments. To
mitigate the investment price risk for the Group as a whole, the
strategy of the Group is to invest in a broad spread of industries
with approximately two-thirds of the unquoted investments comprising
debt securities, which, owing to the structure of their yield and the
fact that they are usually secured, have a lower level of price
volatility than equity. Details of the industries in which
investments have been made are contained in the Portfolio of
Investments section on page 11 of the full Annual Report and
Financial Statements and in the Manager's Report.
In accordance with the IPEVCV Guidelines, in the absence of a more
appropriate methodology, investments held for less than 12 months are
valued at cost. Thereafter, the valuation will move to the most
appropriate valuation methodology for an investment within its
market, with regard to the financial health of the investment and the
IPEVCV Guidelines. The Directors believe that, within these
parameters, there are no reasonable possible alternative methods of
valuation of the investments as at 30 June 2009.
As required under IFRS 7 and FRS 29, the Board is required to
illustrate by way of a sensitivity analysis, the degree of exposure
to market risk. The Board considers that the value of the non-current
and current asset investment portfolio is sensitive to a 10 per cent.
change based on the current economic climate. The impact of a 10 per
cent. change has been selected as this is considered reasonable given
the current level of volatility observed both on a historical basis
and future expectations.
The sensitivity of a 10 per cent. increase or decrease in the
valuation of the non-current and current asset investments (keeping
all other variables constant) would increase or decrease the net
asset value and return for the year by GBP1,860,000 (2008: GBP2,090,000).
Cash flow interest rate risk
It is the Group's policy to accept a degree of interest rate risk on
its financial assets through the effect of interest rate changes. On
the basis of the Group's analysis, it is estimated that a fall of one
percentage point in all interest rates would have reduced profits
before tax for the year by approximately GBP85,000 (2008: GBP137,000).
The weighted average interest rate applied to the Group's fixed rate
assets during the year was approximately 4.5 per cent. (2008: 7.7 per
cent.). The weighted average period to maturity for the fixed rate
assets is approximately 2.2 years (2008: 3.2 years).
Credit risk
Credit risk is the risk that the counterparty to a financial
instrument will fail to discharge an obligation or commitment that it
has entered into with the Group. The Group is exposed to credit risk
through its debtors, investment in unquoted loan stock, and through
the holding of floating rate notes and cash on deposit with banks.
The Manager evaluates credit risk on loan stock, floating rate note
instruments and other similar instruments prior to investment, and as
part of its ongoing monitoring of investments. In doing this, it
takes into account the extent and quality of any security held.
Typically loan stock instruments have a first fixed charge or a fixed
and floating charge over the assets of the investee company in order
to mitigate the gross credit risk. The Manager receives management
accounts from investee companies, and members of the investment
management team often sit on the boards of unquoted investee
companies; this enables the close identification, monitoring and
management of investment-specific credit risk.
Bank deposits and floating rate notes are held with banks which have
a Moody's credit rating of at least 'A'. The Group has an informal
policy of limiting counterparty banking and floating rate note
exposure to a maximum of 20 per cent. of net asset value for any one
counterparty.
The Manager and the Board formally review credit risk (including
receivables) and other risks, both at the time of initial investment
and at quarterly Board meetings.
The Group's total gross credit risk at 30 June 2009 was limited to
GBP10,063,000 (2008: GBP10,904,000) of unquoted loan stock instruments,
GBP6,472,000 (2008: GBP9,237,000) cash deposits with banks and GBP2,718,000
(2008: GBP2,686,000) floating rate notes.
As at the balance sheet date, the cash held by the Group is held with
the Royal Bank of Scotland plc, Lloyds Banking Group plc and HSBC
plc. Credit risk on floating rate note and cash transactions is
mitigated by transacting with counterparties that are regulated
entities subject to prudential supervision, with high credit ratings
assigned by international credit-rating agencies. The Nationwide
Building Society floating rate note matured and was repaid in full on
7 July 2009.
Liquidity risk
Liquid assets are held as cash on current account, cash on deposit or
short term money market account and as floating rate notes. Under the
terms of its Articles, the Group has the ability to borrow up to the
amount of its adjusted capital and reserves of the latest published
audited consolidated balance sheet, which amounts to GBP23,883,000
(2008: GBP29,451,000) as at 30 June 2009.
The Group had no committed borrowing facilities as at 30 June 2009
(2008: nil) and had cash balances of GBP6,472,000 (2008: GBP9,237,000)
(Company GBP6,255,000; 2008: GBP6,548,000) together with GBP2,718,000
(2008: GBP2,686,000) invested in floating rate notes, which are
considered to be readily realisable within the timescales required to
make cash available for investment. The main cash outflows are for
new investments, dividends and share buy backs, which are within the
control of the Group. The Manager formally reviews the cash
requirements of the Group on a monthly basis, and the Board on a
quarterly basis, as part of its review of management accounts and
forecasts.
All of the Group's financial liabilities are short term in nature and
total GBP335,000 (2008: GBP321,000) for the year to 30 June 2009
(Company: 30 June 2009; GBP15,267,000; 30 June 2008: GBP12,685,000). An
amount of GBP14,968,000 (2008: GBP12,390,000) which is included within
the Company creditor relates to intercompany balances and is not
considered to carry liquidity risk.
In view of this, the Board considers that the Group is subject to low
liquidity risk.
The carrying value of loan stock investments held at amortised cost
at 30 June 2009 is analysed by the expected maturity dates as
follows:
+--------------------------------------------------------------------+
| | | | | | |
| | | | Past| | |
| | | | due| | |
| | Fully performing|Renegotiated| loan| Impaired| |
|Redemption | loan stock| loan stock|stock|loan stock| Total|
|date | GBP'000| GBP'000|GBP'000| GBP'000| GBP'000|
|-----------+-------------------+------------+-----+----------+------|
|Less than | | | | | |
|one year | 246| -| -| 196| 442|
|-----------+-------------------+------------+-----+----------+------|
|1-2 years | 1,123| 343| -| 2,274| 3,740|
|-----------+-------------------+------------+-----+----------+------|
|2-3 years | 1,414| 143| 83| 1,558| 3,198|
|-----------+-------------------+------------+-----+----------+------|
|3-5 years | 639| 1,000| 210| 825| 2,674|
|-----------+-------------------+------------+-----+----------+------|
|More than 5| | | | | |
|years | -| -| -| 9| 9|
|-----------+-------------------+------------+-----+----------+------|
| | 3,422| 1,486| 293| 4,862|10,063|
+--------------------------------------------------------------------+
The carrying value of loan stock investments held at amortised cost
at 30 June 2008 is analysed by the expected maturity dates as
follows:
+--------------------------------------------------------------------+
| | | | | | |
| | | | Past| | |
| | | | due| | |
| | | | loan| | |
| | Fully performing|Renegotiated|stock| Impaired| |
|Redemption| loan stock| loan stock| (i)|loan stock| Total|
|date | GBP'000| GBP'000|GBP'000| GBP'000| GBP'000|
|----------+--------------------+------------+-----+----------+------|
|Less than | | | | | |
|one year | -| 590| -| -| 590|
|----------+--------------------+------------+-----+----------+------|
|1-2 years | -| 183| -| 106| 289|
|----------+--------------------+------------+-----+----------+------|
|2-3 years | 1,392| 3,017| -| 145| 4,554|
|----------+--------------------+------------+-----+----------+------|
|3-5 years | 2,695| 1,513|1,215| 48| 5,471|
|----------+--------------------+------------+-----+----------+------|
| | 4,087| 5,303|1,215| 299|10,904|
+--------------------------------------------------------------------+
(i) Interest (not capital) is overdue.
The cost, impairment and carrying value of impaired loan stocks held
at amortised cost at 30 June 2009 and 30 June 2008 are as follows:
+--------------------------------------------------------------------------+
| | 30 June 2009 | 30 June 2008 |
|----------+-------------------------------------+-------------------------|
| | | | | | |Carrying|
| | Cost|Impairment| | Cost|Impairment| value|
| |GBP'000| GBP'000|Carrying value GBP'000|GBP'000| GBP'000| GBP'000|
|----------+-----+----------+--------------------+-----+----------+--------|
|Impaired |6,947| (2,085)| 4,862|1,753| (1,454)| 299|
|loan stock| | | | | | |
+--------------------------------------------------------------------------+
Impaired loan stock instruments have a first fixed charge or a fixed
and floating charge over the assets of the investee company and the
Board estimate that the security value approximates to the carrying
value.
Loan stock with a carrying value of GBP293,000 owed loan stock interest
of GBP3,000 as at 30 June 2009 which was four months overdue. The
interest owed as at 30 June 2008 was repaid in 2009 and is no longer
outstanding.
Fair values of financial assets and financial liabilities
All the Group's financial assets and liabilities as at 30 June 2009
are stated at fair value as determined by the Directors, with the
exception of loans and receivables included within investments, which
are carried at amortised cost, in accordance with IAS 39. In the
opinion of the Directors, the amortised cost of loan stock is not
materially different to the fair value of the loan stock. There are
no financial liabilities other than short term trade and other
payables. See note 1 of the financial statements for accounting
policies. The Group's financial liabilities are all non-interest
bearing. It is the Directors' opinion that the book value of the
financial liabilities is not materially different to the fair value
and all are payable within one year, and that the Group is subject to
low financial risk as a result of having nil gearing and positive
cash balances.
The Group's financial assets and liabilities as at 30 June 2009, all
denominated in pounds sterling, consist of the following:
+----------------------------------------------------------------------------------------------------+
| | 30 June 2009 | 30 June 2008 |
|-------------+------------------------------------------+-------------------------------------------|
| | | | | | | | | |
| | Fixed| Floating| | | Fixed| Floating| | |
| | rate| rate| Non-interest| Total| rate| rate| Non-interest| Total|
| | GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000|
|-------------+-------+----------+--------------+--------+--------+----------+--------------+--------|
| | | | | | | | | |
|Floating rate| | | | | | | | |
|notes | -| 2,718| -| 2,718| -| 2,686| -| 2,686|
|-------------+-------+----------+--------------+--------+--------+----------+--------------+--------|
|Unquoted loan| | | | | | | | |
|stock | 9,677| 386| -| 10,063| 10,520| 384| -| 10,904|
|-------------+-------+----------+--------------+--------+--------+----------+--------------+--------|
|Unquoted | | | | | | | | |
|equity | -| -| 4,924| 4,924| -| -| 6,192| 6,192|
|-------------+-------+----------+--------------+--------+--------+----------+--------------+--------|
|Quoted equity| -| -| 891| 891| -| -| 1,115| 1,115|
|-------------+-------+----------+--------------+--------+--------+----------+--------------+--------|
|Receivables | -| -| 55| 55| -| -| 361| 361|
|-------------+-------+----------+--------------+--------+--------+----------+--------------+--------|
|Current | | | | | | | | |
|liabilities | -| -| (335)| (335)| -| -| (321)| (321)|
|-------------+-------+----------+--------------+--------+--------+----------+--------------+--------|
|Cash | -| 6,472| -| 6,472| 5,000| 4,237| -| 9,237|
|-------------+-------+----------+--------------+--------+--------+----------+--------------+--------|
|Net assets | 9,677| 9,576| 5,535| 24,788| 15,520| 7,307| 7,347| 30,174|
+----------------------------------------------------------------------------------------------------+
The Company's financial assets and liabilities as at 30 June 2009,
all denominated in pounds sterling, consist of the following:
+-------------------------------------------------------------------------------------------------------------+
| | 30 June 2009 | 30 June 2008 |
|-------------+-----------------------------------------------+-----------------------------------------------|
| | | Floating| | | | Floating| | |
| |Fixed rate| rate| Non-interest| Total|Fixed rate| rate| Non-interest| Total|
| | GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000|
|-------------+----------+----------+--------------+----------+----------+----------+--------------+----------|
| | | | | | | | | |
|Floating rate| | | | | | | | |
|notes | -| 2,718| -| 2,718| -| 2,686| -| 2,686|
|-------------+----------+----------+--------------+----------+----------+----------+--------------+----------|
|Unquoted loan| | | | | | | | |
|stock | 9,677| 386| -| 10,063| 10,520| 384| -| 10,904|
|-------------+----------+----------+--------------+----------+----------+----------+--------------+----------|
|Unquoted | | | | | | | | |
|equity | -| -| 20,073| 20,073| -| -| 21,251| 21,251|
|-------------+----------+----------+--------------+----------+----------+----------+--------------+----------|
|Quoted equity| -| -| 891| 891| -| -| 1,115| 1,115|
|-------------+----------+----------+--------------+----------+----------+----------+--------------+----------|
|Receivables | -| -| 55| 55| -| -| 355| 355|
|-------------+----------+----------+--------------+----------+----------+----------+--------------+----------|
|Current | | | | | | | | |
|liabilities | (14,968)| -| (299)| (15,267)| (12,390)| -| (295)| (12,685)|
|-------------+----------+----------+--------------+----------+----------+----------+--------------+----------|
|Cash | -| 6,255| -| 6,255| 5,000| 1,548| -| 6,548|
|-------------+----------+----------+--------------+----------+----------+----------+--------------+----------|
|Net assets | (5,291)| 9,359| 20,720| 24,788| 3,130| 4,618| 22,426| 30,174|
+-------------------------------------------------------------------------------------------------------------+
20. Post balance sheet events
Since 30 June 2009 the Company has completed the following
significant transactions:
* Maturity of GBP2,720,000 Nationwide Building Society floating rate
note on 7 July 2009
* Purchase of GBP2,350,000 Wells Fargo & Company floating rate note on
14 July 2009
* The Company has cancelled its share premium account by way of
special resolution at a General Meeting held on 1 September 2009. The
share premium account amounting to GBP14,437,830 was cancelled on 16
September 2009 by order of the High Court and the Notice regarding
the cancellation was registered at Companies House on 17 September
2009.
* July 2009: Investment in Geronimo Inns VCT I Limited of GBP720,000
* July 2009: Investment in Geronimo Inns VCT II Limited of GBP720,000
* August 2009: Investment in Bravo Inns II Limited of GBP100,000
* On 22 September 2009, a re-organisation of the funds pub interests
occurred, whereby Novello Pub Limited, Welland Inns VCT Limited,
Welland Inns (Hotels) Limited, The Charnwood Pub Company (Hotels)
Limited and Pelican Inn Limited were acquired by The Charnwood Pub
Company Limited which now owns 13 pubs.
21. Contingencies, guarantees and financial commitments
There are no contingencies, guarantees or financial commitments of
the Group or Company as at 30 June 2009 (2008: nil). Under the terms
of the Transfer Agreement dated 16 January 2006, Crown Place VCT PLC
has indemnified its subsidiaries, CP1 VCT PLC and CP2 VCT PLC in
respect of all costs, claims and liabilities in exchange for the
transfer of assets.
22. Related party transactions
The Manager, Albion Ventures LLP, could be considered to be a related
party by virtue of the fact that it is party to a Management
Agreement from the Company (details disclosed on page 23 of the
Annual Report and Financial Statements). During the year, services of
a total value of GBP522,000 (2008: GBP728,000) were purchased by the
Company from Albion Ventures LLP; this includes GBP472,000 investment
management fee and GBP50,000 administration fee. At the financial year
end, the amount due to Albion Ventures LLP disclosed as accruals and
deferred income was GBP208,000 (2008: GBP169,000).
Albion Ventures LLP has reclaimed VAT from HMRC as described in note
5. A sum of GBP369,000 has been recognised in the Income Statement for
the year reflecting a gross receipt of GBP457,000, less a creditor for
GBP88,000 in respect of related historic management and performance
fees to be paid to Albion Ventures LLP.
Buy-backs of shares during the year were transacted through
Winterflood Securities Limited, a subsidiary of Close Brothers Group
plc, which up to 23 January 2009 was the parent company of Albion
Ventures LLP (formerly Close Ventures Limited). A total of 1,091,300
shares were purchased for cancellation (2008: 3,256,044) at an
average price of 29.4 pence per share. There are no other related
party transactions or balances requiring disclosure.
23. Principal risks and uncertainties
In addition to the current economic risks outlined in the Chairman's
Statement, the Board considers that the Company faces the following
major risks and uncertainties:
1. Investment risk
This is the risk of investment in poor quality assets which reduce
the capital and income returns to shareholders, and negatively
impacts on the Company's reputation. By nature, smaller unquoted
businesses, such as those that qualify for venture capital trust
purposes are more fragile than larger, long established businesses.
To reduce this risk, the Board places reliance upon the skills and
expertise of the Manager and their strong track record for investing
in this segment of the market. The Company's policy is to lower
investment risk by investing part of the portfolio in asset-based
businesses and taking a first charge over the relevant assets. In
addition, the Manager operates a formal and structured investment
process, which includes an Investment Committee, comprising
investment professionals from the Manager and external investment
professionals. The Manager also invites comments from all
non-executive Directors on investments discussed at the Investment
Committee meetings. Investments are actively and regularly monitored
by the Manager (investment managers normally sit on investee company
boards) and the Board receives detailed reports on each investment as
part of the Manager's report at quarterly board meetings.
2. Venture Capital Trust approval risk
The Company's current approval as a venture capital trust allows
investors to take advantage of tax reliefs on initial investment and
ongoing tax free capital gains and dividend income. Failure to meet
the qualifying requirements could result in investors losing the tax
relief on initial investment and loss of tax relief on any tax free
income or capital gains received. In addition, failure to meet the
qualifying requirements could result in a loss of listing of the
shares.
To reduce this risk, the Board has appointed the Manager, who has a
team with significant experience in venture capital trust management,
and is used to operating within the requirements of the venture
capital trust legislation. In addition, to provide further formal
reassurance, the Board has appointed PricewaterhouseCoopers LLP as
its taxation
advisors. PricewaterhouseCoopers LLP report quarterly to the Board to
independently confirm compliance with the venture capital trust
legislation, to highlight areas of risk and to inform on changes in
legislation.
3. Compliance risk
The Company is listed on The London Stock Exchange and is required to
comply with the rules of the UK Listing Authority, as well as with
the Companies Act, Accounting Standards and other legislation.
Failure to comply with these regulations could result in a delisting
of the Company's shares, or other penalties under the Companies Act
or from financial reporting oversight bodies.
Board members and the Manager have experience of operating at senior
levels within quoted businesses. In addition, the Board and the
Manager receive regular updates on new regulation from the auditors,
lawyers and other professional bodies.
4. Internal control risk
Failures in key controls, within the Board or within the Manager's
business, could put assets of the Company at risk or result in
reduced or inaccurate information being passed to the Board or to
shareholders.
The Audit and Risk Committee has met with the Manager's new internal
auditors, Littlejohn LLP, since the year end, and will meet with them
at least once a year in future, 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. In the past year the Board has met with the Head
of Internal Audit of Close Brothers Group plc on a similar basis. The
Manager has a comprehensive business continuity plan in place in the
event that operational continuity is threatened. Further details
regarding the Board's management and review of the Company's internal
controls through the implementation of the Turnbull guidance are
detailed on page 31 to the Annual Report and Financial Statements.
Measures are in place to mitigate information risk in order to ensure
the integrity, availability and confidentiality of information used
within the business.
5. Reliance upon third parties risk
The Company is reliant upon the services of Albion Ventures LLP for
the provision of investment management and administrative functions.
There are provisions within the Management Agreement for the change
of Manager under certain circumstances (for more detail, see the
Management Agreement paragraph on page 23 to the Annual Report and
Financial Statements). In addition, the Manager has demonstrated to
the Board that there is no undue reliance placed upon any one
individual within Albion Ventures LLP.
6. Financial risks
By its nature, as a venture capital trust, the Company is exposed to
investment risk (which comprises investment price risk and cash flow
interest rate risk), credit risk and liquidity risk. The Company's
policies for managing these risks and its financial instruments are
outlined in full in note 19 to the Annual Report and Financial
Statements.
All of the Company's income and expenditure is denominated in
sterling and hence the Company has no foreign currency risk. The
Company is financed through equity and does not have any borrowings.
The Company does not use derivative financial instruments.
Key financial risks are noted in note 19 above.
24. Other information
The information set out in this anouncement does not constitute the
Company's statutory accounts within the terms of section 434 of the
Companies Act 2006 for the periods ended 30 June 2009 and 30 June
2008, and is derived from the statutory accounts for the financial
year, which have been or in the case of the accounts for the year
ended 30 June 2009, which will be, delivered to the Registrar of
Companies. The auditors reported on those accounts; their reports
were unqualified and did not contain a statement under s498 (2) or
(3) of the Companies Act 2006.
The Companies Annual General Meeting will be held at The Worshipful
Company of Coopers' Hall, 13 Devonshire Square, London EC2M 4TH on 11
November 2009 at 12 noon.
25. Publication
The full audited Annual Report and Financial Statements is being sent
to shareholders and copies will be made available to the public at
the registered office of the Company, Companies House, the FSA
viewing facility and also electronically at www.albion-ventures.co.uk
under the 'Our Funds' section.
29 September 2009
For further information, please contact:
Patrick Reeve of Albion Ventures LLP
Tel: 020 7601 1850
=--END OF MESSAGE---
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