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 2012.
This announcement was approved for release by the Board of Directors on 4
October 2012.
This announcement has not been audited.
You will shortly be able to view the Annual Report and Financial Statements for
the year to 30 June 2012 (which have been audited) at: www.albion-ventures.co.uk
by clicking on 'Our Funds' and then 'Crown Place VCT PLC'. The Annual Report and
Financial Statements for the year to 30 June 2012 will be available as a PDF
document via a link under the 'Investor Centre' in the 'Financial Reports and
Circulars' section. The information contained in the Annual Report and Financial
Statements will include information as required by the Disclosure and
Transparency Rules, including Rule 4.1.
Investment 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 more mature or
asset-based investments that can provide a strong income stream combined with a
degree of capital protection. These will be balanced by a lesser proportion of
the portfolio being invested in higher risk companies with greater growth
prospects.
*The 'Company' is Crown Place VCT PLC. The 'Group' is the Company together with
its subsidiaries CP1 VCT PLC and CP2 VCT PLC.
Financial calendar
Annual General Meeting 13 November 2012
Record date for first dividend 2 November 2012
Payment of first dividend 30 November 2012
Announcement of half-yearly results for the six months ended February 2013
31 December 2012
Payment of second dividend (subject to Board approval) March 2013
Financial highlights
1.41p Total return to shareholders for the year ended 30 June 2012
2.50p Total tax free dividends per share paid during the year ended 30 June
2012
8.8% Tax free yield on share price (dividend per annum/share price as at 30
June 2012)
32.60p Net asset value per share as at 30 June 2012
2.0% Net asset value total return for the year (with dividends reinvested)
1.4% Share price total return for the year (with dividends reinvested)
+-------------------------------------------------------------------+
| 30 June 2012 30 June 2011 |
| |
| pence per share pence per share |
+-------------------------------------------------------------------+
| Net asset value per share 32.60 33.65 |
| |
| Dividends paid 2.50 2.50 |
| |
| Revenue return per share 0.80 1.11 |
| |
| Capital return per share 0.61 1.04 |
+-------------------------------------------------------------------+
Shareholder returns and shareholder value
Proforma ((i)) Proforma ((i)) Crown Place VCT
Murray VCT PLC Murray VCT 2 PLC PLC*
pence per share pence per share pence per share
Shareholder return from
launch to April 2005
(date that Albion
Ventures was appointed
investment manager):
Total dividends paid to 30.36 30.91 24.93
6 April 2005 ((ii))
Decrease in net asset (69.90) (64.50) (56.60)
value
------------------------------------------------------
Total shareholder return (39.54) (33.59) (31.67)
to 6 April 2005
------------------------------------------------------
Shareholder return from
April 2005 to 30 June
2012:
Total dividends paid 12.25 14.44 16.80
Decrease in net asset (6.90) (7.76) (10.80)
value
------------------------------------------------------
Total shareholder return
from April 2005 to 30
June 2012 5.35 6.68 6.00
------------------------------------------------------
Shareholder return since
launch:
Total dividends paid to 42.61 45.35 41.73
30 June 2012 ((ii))
Net asset value as at 23.20 27.74 32.60
30 June 2012
------------------------------------------------------
Total shareholder return 65.81 73.09 74.33
as at 30 June 2012
------------------------------------------------------
Current annual dividend 1.78 2.13 2.50
objective
------------------------------------------------------
Dividend yield on net 7.7% 7.7% 7.7%
asset value
------------------------------------------------------
Net asset value total return to shareholders since launch:
+------------------------------------------------------------------------------+
| 30 June 2012|
| (pence per share)|
+------------------------------------------------------------------------------+
|Total dividends paid during the period from launch to 6 24.93|
|April 2005 (prior to change of manager) |
| |
|Total dividends paid during the year ended 28 February 2006 1.00|
| |
|Total dividends paid during the period ended 30 June 2007 3.30|
| |
|Total dividends paid during the year ended 30 June 2008 2.50|
| |
|Total dividends paid during the year ended 30 June 2009 2.50|
| |
|Total dividends paid during the year ended 30 June 2010 2.50|
| |
|Total dividends paid during the year ended 30 June 2011 2.50|
| |
|Total dividends paid during the year ended 30 June 2012 2.50|
| ------------------+
|Total dividends paid to 30 June 2012 41.73|
| |
|Net asset value as at 30 June 2012 32.60|
| ------------------+
|Total net asset value return as at 30 June 2012 74.33|
+------------------------------------------------------------------------------+
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 2012 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 2013, of 1.25 pence per Crown Place VCT PLC share
payable on 30 November 2012 to shareholders on the register as at 2 November
2012.
Chairman's statement
Introduction
I have pleasure in presenting the results for the year ended 30 June 2012. The
Group achieved a positive total return of 1.40 pence per share, building on the
positive returns achieved in the previous two years. The Company maintained its
regular dividend of 2.50 pence per share, which represents a tax free yield of
8.8 per cent. based on the share price as at 30 June 2012.
Results and dividends
As at 30 June 2012, the net asset value was GBP26.0 million or 32.60 pence per
share compared to GBP25.7 million or 33.65 pence per share at 30 June 2011. The
revenue return before taxation was GBP616,000 compared to GBP812,000 in the previous
year which had benefited from a one-off dividend payment of GBP286,000 from one
portfolio company. Therefore, the underlying income generated by the investment
portfolio was stable. The results include a GBP357,000 one-off repayment in
respect of historic VAT received from the previous manager, Murray Johnstone
Limited. This is described in more detail in note 5. During the year to 30 June
2012, the Company maintained its dividend of 2.50 pence per share for the fifth
consecutive year. The first dividend for the current financial year of 1.25
pence per share will be paid on 30 November 2012 to shareholders on the register
as at 2 November 2012.
Investment performance and progress
The economic conditions during the year remained difficult and business
confidence declined. This impacted on the mergers and acquisitions market and
restricted the Company's ability to realise investments at attractive values.
The Company generated total disposal proceeds of GBP592,000 mostly from the
repayment of loan stock by portfolio companies. Further detail on the
realisations is given on page 13 of the Annual Report and Financial Statements.
During the year, your Company invested a total of GBP3.3 million in three new
portfolio companies and eighteen existing portfolio companies. The new
investments include GBP371,000 in Alto Prodotto Wind Limited, a wind power
generation company; GBP360,000 in Hilson Moran Holdings Limited (of which GBP41,000
loan stock was repaid in the year), a multi-disciplinary engineering
consultancy; and GBP65,000 in Greenenerco Limited, another wind power generation
company. Many of the follow-on investments were made to support the continued
expansion of the renewable energy portfolio companies, where the Manager
continues to see attractive investment opportunities.
Overall, the value of the unquoted investment portfolio held by the Company at
the year end increased by GBP595,000 during the year, while that of the AIM
portfolio decreased by GBP66,000. Good progress was made by Lowcosttravelgroup
Limited, Radnor House School (Holdings) Limited, Oakland Care Centre Limited and
CS (Brixton) Limited. Together the value of these four investments increased by
GBP1.5 million. Against this, difficult trading conditions continued to impact
two of the hotels in the portfolio - The Stanwell Hotel and the Crown Hotel
Harrogate. Prime Care (Holdings) Limited continues to be affected by public
sector spending cuts while Helveta, Dysis and AMS Sciences were affected by
delays in securing commercial contracts. Valuation movements within the
investment portfolio are discussed further in the Manager's report.
Risks and uncertainties
The lack of growth in the UK economy, the continuing debt crisis in the Eurozone
and the growing imbalances elsewhere in the world are likely to continue to
impact on business and investment sentiment. Against this background, we remain
cautious in our outlook. Nevertheless, we believe that many of the sectors in
which our portfolio companies operate are resilient, and that the new portfolio
companies which we support are positioned to grow despite these broader
uncertainties. In addition, it remains our general policy that portfolio
companies should have no external bank borrowings, thereby reducing the
financial risks within portfolio companies.
Other risks and uncertainties are detailed in note 19. Details of post balance
sheet events and related party transactions are set out in notes 20 and 22.
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 Company's interest, including
the maintenance of sufficient resources for investment in existing and new
portfolio companies and the continued payment of dividends for shareholders. It
is the Board's intention for such buy-backs to be in the region of a 10 to 15
per cent. discount to net asset value, so far as market conditions and liquidity
permit. During the year the Company cancelled 71,000 shares from treasury and
purchased a further 1,646,500 shares for treasury at a total cost of GBP468,000.
Change of registrar
As part of our commitment to improve communications with shareholders, our share
registrar has changed to Computershare Investor Services PLC. Shareholders can
access holdings and valuation information regarding any of their shares held by
Computershare by registering on Computershare's website. The Computershare
Investor Centre can be found at www.investorcentre.co.uk. At our request, the
registrar has introduced annual shareholder statements to give shareholders
better visibility on the performance of their investments.
Albion VCTs Linked Top Up Offers
During the year, the Company raised a total of GBP1.49 million as part of the
GBP10.5 million Albion VCTs Linked Top Up Offers by seven of the VCTs managed by
Albion Ventures. The proceeds of the Offers have been used to provide further
resources to the Albion VCTs at a time when a number of attractive new
investment opportunities are being seen. Further top-up offers are planned for
later this year and details are expected to be sent to shareholders in October.
Dividend reinvestment scheme
During the year the Company raised GBP91,000 under the terms of the dividend
reinvestment scheme. Through the scheme shareholders may elect to reinvest the
whole of the dividend received by subscribing for new shares in the Company.
Under current tax rules, individual shareholders reinvesting their dividends
will be eligible for the income and capital gains tax advantages available to
investors subscribing to new shares in venture capital trusts and will be able
to increase their shareholding in the Company simply and without incurring
dealing costs or stamp duty. Full details of the scheme and the application form
are available on the Manager's website www.albion-ventures.co.uk and through the
Computershare link as above.
Board changes
As part of the planned programme to refresh the Board, as previously advised to
shareholders, Vikram Lall retired as a Director of the Company on 15 May 2012.
The Board wishes to thank Vikram for his significant input and valuable
contribution to the Board and to the Company and its predecessor companies over
many years.
Following a formal and extensive selection process which included the use of a
recruitment search firm, Richard Huntingford was appointed to the Board on the
same date. Richard Huntingford's biography is shown on page 9 of the Board of
Directors section in the Annual Report and Financial Statements. Richard's broad
commercial experience will bring a valuable added perspective to the Board.
Outlook and prospects
As already mentioned, the outlook for the UK and the global economies remains
uncertain. Nevertheless, a number of our companies operate in sectors that
should prove to be more resilient over the medium term in the event of continued
economic upheaval. These include the healthcare and environmental sectors,
which are an increasing area for investment by your VCT. In addition, the great
majority of investments are structured to be cash generative and to provide
further support for your Company's dividend policy.
Patrick Crosthwaite
Chairman
4 October 2012
Manager's report
Investment portfolio
An analysis by sector of Crown Place VCT's investment portfolio as at 30 June
2012 is shown below. The portfolio remains well diversified and as at the year
end comprised 51 investments. There were 26 unquoted asset-backed investments
accounting for 59 per cent. of the investment value of the Company, 22 unquoted
growth investments accounting for 31 per cent. of the investment value of the
Company and three AIM quoted investments, accounting for 3 per cent. of the
investment value of the Company, with the balance held as cash and liquid
assets. During the year the Company continued to increase its exposure to the
less cyclical sectors of healthcare, education and environmental, which now
account for approximately a third of the portfolio value. The value of
investments in the hotel and pubs sectors, which are heavily dependent on
consumer spending, reduced from 23 per cent. to 21 per cent. of the portfolio
value. The software sector increased from 6 per cent. to 8 per cent. of
portfolio value as the Company continued to provide support for some of the
earlier stage software companies in the portfolio.
Split of investment portfolio by sector
Please see the end of this announcement for the PDF of the sector split of the
portfolio by valuation as at 30 June 2012.
New investments
The Company invested a total of GBP796,000 in three new portfolio companies
during the year. Approximately half of this was invested in two wind power
generation companies, while the third investment was to back the management buy-
out of Hilson Moran, a well established and profitable multi-disciplinary
engineering consultancy business. Further funding of GBP777,000 was provided to
the existing renewable energy companies in the portfolio to allow them to
develop new projects. The final tranche of GBP570,000 was invested in Oakland Care
Centre Limited, our care home in North East London, and GBP236,000 as planned for
Nelson House Hospital Limited. Both of these facilities have now opened and are
operating well. In addition, some GBP897,000 was invested in nine existing
portfolio companies to support growth.
Portfolio review
The second largest investment by value, Radnor House School, is performing ahead
of plan and is now profitable before interest. Oakland Care Centre, which opened
in November 2011, is also performing well and is cash generative. The cinema
investments are trading ahead of budget and this has been reflected in their
increased third party professional valuations. Bravo Inns and Charnwood Pub
Company are showing good progress, which allowed Charnwood Pub Company to repay
some of the outstanding loan stock during the year. The renewable energy
investments are performing in line with their investment plans and are expected
to be strongly cash generative when mature. In the growth portfolio,
Lowcosttravelgroup continues to grow, while Process Systems Enterprise, Opta
Sports Data and Mirada demonstrate good growth prospects. Against this, progress
continues to be slow at the Stanwell Hotel which resulted in a further reduction
in its third party professional valuation, while The Crown Hotel Harrogate has
seen pressure on margins and thus lower profitability despite improved occupancy
rates. Weaker than expected performance also continues to impact the valuation
of Helveta, AMS Sciences, Mi-Pay and Prime Care and we are working closely with
the management teams of these companies to improve their results.
The pipeline for new investments remains strong, with continued focus on cash
generative investments. The Manager intends to increase the environmental and
healthcare segments as a proportion of the total portfolio. Much of the former
will be in renewable energy projects, which provide long-term inflation-
protected income streams, while the latter area will concentrate on medical
technology for new devices and processes in fast growing international markets.
Albion Ventures LLP
Manager
4 October 2012
Responsibility Statement
In preparing these financial statements for the year to 30 June 2012, the
Directors of the Company, being Patrick Crosthwaite, Rachel Beagles, Karen Brade
and Richard Huntingford, 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 2012 for the
Group has been prepared in accordance with International Financial Reporting
Standards, and for the Company has been prepared in accordance with United
Kingdom Generally Accepted Accounting Practice (UK Accounting Standards and
applicable law) and give a true and fair view of the assets, liabilities,
financial position and profit and loss of the Group and the Company for the year
ended 30 June 2012 as required by DTR 4.1.12.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 2012 and description of principal risks and uncertainties
that the Group and 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 and the Company's financial statements" is contained within the full
audited Annual Report and Financial Statements.
By order of the Board
Patrick Crosthwaite
Chairman
4 October 2012
Consolidated statement of comprehensive income
+----------------------------------+---------------------+---------------------+
| | Year ended | Year ended |
| | 30 June 2012 | 30 June 2011 |
+-----------------------------+----+-------+-------+-----+-------+-------+-----+
| | |Revenue|Capital|Total|Revenue|Capital|Total|
+-----------------------------+----+-------+-------+-----+-------+-------+-----+
| |Note| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000|
+-----------------------------+----+-------+-------+-----+-------+-------+-----+
| | | | | | | | |
|Gains on investments |2 | -| 538| 538| -| 1,089|1,089|
| | | | | | | | |
|Investment income and deposit| | | | | | | |
|interest |3 | 895| -| 895| 1,157| -|1,157|
| | | | | | | | |
|Investment management fees |4 | (110)| (332)|(442)| (109)| (327)|(436)|
| | | | | | | | |
|Recovery of VAT |5 | 96| 261| 357| -| -| -|
| | | | | | | | |
|Other expenses |6 | (265)| -|(265)| (236)| -|(236)|
| | +-------+-------+-----+-------+-------+-----+
| | | | | | | | |
|Profit before taxation | | 616| 467|1,083| 812| 762|1,574|
| | | | | | | | |
|Taxation |7 | -| -| -| -| -| -|
| | +-------+-------+-----+-------+-------+-----+
|Profit and total | | | | | | | |
|comprehensive income for the | | | | | | | |
|year | | 616| 467|1,083| 812| 762|1,574|
| | +-------+-------+-----+-------+-------+-----+
|Basic and diluted return per | | | | | | | |
|Ordinary share (pence)* |9 | 0.80| 0.61| 1.41| 1.11| 1.04| 2.15|
+-----------------------------+----+-------+-------+-----+-------+-------+-----+
* excluding treasury shares
The accompanying notes form an integral part of these Financial Statements.
The total column of this statement represents the Group's statement of
comprehensive income, prepared in accordance with International Financial
Reporting Standards ('IFRS'). The supplementary revenue and capital columns are
prepared under guidance published by the Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing
operations and are wholly attributable to the owners of the parent Company.
Consolidated balance sheet
+----------------------------------------------------+------------+------------+
| | | |
| | | |
| |30 June 2012|30 June 2011|
| | | |
| Note| GBP'000| GBP'000|
+----------------------------------------------------+------------+------------+
|Non-current assets | | |
| | | |
|Investments 10| 24,333| 21,172|
| +------------+------------+
| | | |
| | | |
|Non-current assets | | |
| | | |
|Trade and other receivables greater than one | | |
|year 13| -| 80|
| +------------+------------+
| | | |
| | | |
|Current assets | | |
| | | |
|Trade and other receivables less than one year 13| 74| 102|
| | | |
|Current asset investments 13| 92| -|
| | | |
|Cash and cash equivalents 17| 1,741| 4,550|
| +------------+------------+
| | 1,907| 4,652|
| +------------+------------+
| | | |
| | | |
|Total assets | 26,240| 25,904|
| | | |
|Current liabilities | | |
| | | |
|Trade and other payables 14| (290)| (243)|
| | | |
| | | |
| +------------+------------+
|Net assets | 25,950| 25,661|
| +------------+------------+
| | | |
| | | |
|Equity attributable to equityholders | | |
| | | |
|Ordinary share capital 15| 8,844| 8,350|
| | | |
|Share premium | 2,335| 1,259|
| | | |
|Capital redemption reserve | 1,065| 1,058|
| | | |
|Unrealised capital reserve | (3,755)| (4,712)|
| | | |
|Realised capital reserve | 1,970| 2,460|
| | | |
|Other distributable reserves | 15,491| 17,246|
| +------------+------------+
|Total equity shareholders' funds | 25,950| 25,661|
| +------------+------------+
| | | |
| | | |
|Basic and diluted net asset value per share | | |
|(pence)* 16| 32.60| 33.65|
+----------------------------------------------------+------------+------------+
* excluding treasury shares
The accompanying notes form an integral part of these Financial Statements.
These Financial Statements were approved by the Board of Directors, and
authorised for issue on 4 October 2012 and were signed on its behalf by
Patrick Crosthwaite
Chairman
Company number: 03495287
Company balance sheet
+----------------------------------------------------+------------+------------+
| | | |
| | | |
| |30 June 2012|30 June 2011|
| | | |
| Note| GBP'000| GBP'000|
+----------------------------------------------------+------------+------------+
|Fixed assets | | |
| | | |
|Fixed asset investments 10| 24,333| 21,172|
| | | |
|Investment in subsidiary undertakings 12| 15,560| 16,444|
| +------------+------------+
| | 39,893| 37,616|
| +------------+------------+
| | | |
| | | |
|Non-current assets | | |
| | | |
|Trade and other debtors greater than one year 13| -| 80|
| +------------+------------+
| | | |
| | | |
|Current assets | | |
| | | |
|Trade and other debtors less than one year 13| 74| 102|
| | | |
|Current asset investments 13| 92| -|
| | | |
|Cash and cash equivalents 17| 1,684| 4,257|
| +------------+------------+
| | 1,850| 4,359|
| +------------+------------+
| | | |
| | | |
|Total assets | 41,743| 42,055|
| | | |
| | | |
| | | |
|Creditors: amounts falling due within one year 14| (15,793)| (16,394)|
| | | |
| | | |
| +------------+------------+
|Net assets | 25,950| 25,661|
| +------------+------------+
| | | |
| | | |
|Capital and reserves | | |
| | | |
|Ordinary share capital 15| 8,844| 8,350|
| | | |
|Share premium | 2,335| 1,259|
| | | |
|Capital redemption reserve | 1,065| 1,058|
| | | |
|Unrealised capital reserve | (3,252)| (3,325)|
| | | |
|Realised capital reserve | 1,761| 2,407|
| | | |
|Other distributable reserves | 15,197| 15,912|
| +------------+------------+
|Shareholders' funds | 25,950| 25,661|
| +------------+------------+
| | | |
| | | |
|Basic and diluted net asset value per share | | |
|(pence)* 16| 32.60| 33.65|
+----------------------------------------------------+------------+------------+
* 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 4 October 2012 and were signed on its behalf by
Patrick Crosthwaite
Chairman
Company number: 03495287
Consolidated statement of changes in equity
+-------------+--------+-------+----------+----------+--------+-------------+-------+
| |Ordinary| | Capital|Unrealised|Realised| Other| |
| | share| Share|redemption| capital| capital|distributable| |
| | capital|premium| reserve| reserve*|reserve*| reserves*| Total|
| | | | | | | | |
| | GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000|
+-------------+--------+-------+----------+----------+--------+-------------+-------+
|As at 1 July | | | | | | | |
|2011 | 8,350| 1,259| 1,058| (4,712)| 2,460| 17,246| 25,661|
| | | | | | | | |
|Profit and | | | | | | | |
|total | | | | | | | |
|comprehensive| | | | | | | |
|income | -| -| -| 615| (148)| 616| 1,083|
| | | | | | | | |
|Transfer of | | | | | | | |
|previously | | | | | | | |
|unrealised | | | | | | | |
|capital | | | | | | | |
|losses on | | | | | | | |
|sale of | | | | | | | |
|investments | -| -| -| 342| (342)| -| -|
| | | | | | | | |
|Dividends | | | | | | | |
|paid | -| -| -| -| -| (1,903)|(1,903)|
| | | | | | | | |
|Cancellation | | | | | | | |
|of treasury | | | | | | | |
|shares | (7)| -| 7| -| -| -| -|
| | | | | | | | |
|Purchase of | | | | | | | |
|own shares | | | | | | | |
|for treasury | | | | | | | |
|(including | | | | | | | |
|costs) | -| -| -| -| -| (468)| (468)|
| | | | | | | | |
|Issue of | | | | | | | |
|equity (net | | | | | | | |
|of costs) | 501| 1,076| -| -| -| -| 1,577|
+-------------+--------+-------+----------+----------+--------+-------------+-------+
|As at 30 June| | | | | | | |
|2012 | 8,844| 2,335| 1,065| (3,755)| 1,970| 15,491| 25,950|
+-------------+--------+-------+----------+----------+--------+-------------+-------+
+-------------+--------+-------+----------+----------+--------+-------------+-------+
| |Ordinary| | Capital|Unrealised|Realised| Other| |
| | share| Share|redemption| capital| capital|distributable| |
| | capital|premium| reserve| reserve*|reserve*| reserves*| Total|
| | | | | | | | |
| | GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000|
+-------------+--------+-------+----------+----------+--------+-------------+-------+
|As at 1 July | | | | | | | |
|2010 | 7,918| 32| 972| (5,966)|(23,165)| 44,622| 24,413|
| | | | | | | | |
|Profit and | | | | | | | |
|total | | | | | | | |
|comprehensive| | | | | | | |
|income | -| -| -| 218| 544| 812| 1,574|
| | | | | | | | |
|Transfer of | | | | | | | |
|previously | | | | | | | |
|unrealised | | | | | | | |
|capital | | | | | | | |
|losses on | | | | | | | |
|sale of | | | | | | | |
|investments | -| -| -| 1,036| (1,036)| -| -|
| | | | | | | | |
|Dividends | | | | | | | |
|paid | -| -| -| -| -| (1,819)|(1,819)|
| | | | | | | | |
|Purchase of | | | | | | | |
|own shares | | | | | | | |
|for | | | | | | | |
|cancellation | | | | | | | |
|(including | | | | | | | |
|costs) | (86)| -| 86| -| -| (252)| (252)|
| | | | | | | | |
|Issue of | | | | | | | |
|equity (net | | | | | | | |
|of costs) | 518| 1,227| -| -| -| -| 1,745|
| | | | | | | | |
|Transfer from| | | | | | | |
|special | | | | | | | |
|reserve to | | | | | | | |
|realised | | | | | | | |
|capital | | | | | | | |
|reserve | -| -| -| -| 26,117| (26,117)| -|
+-------------+--------+-------+----------+----------+--------+-------------+-------+
|As at 30 June| | | | | | | |
|2011 | 8,350| 1,259| 1,058| (4,712)| 2,460| 17,246| 25,661|
+-------------+--------+-------+----------+----------+--------+-------------+-------+
* Included within these reserves is an amount of GBP13,706,000 (2011: GBP14,994,000)
which is considered distributable.
The special reserve, treasury shares reserve and the revenue reserve have been
combined in the Consolidated balance sheet to form a single reserve named other
distributable reserves for both the current and prior year. The Directors
consider the presentation of a single reserve to enhance the clarity of
financial reporting. More details regarding treasury shares can be found in note
15.
Company reconciliation of movements in shareholders' funds
+------------+--------+-------+----------+----------+--------+-------------+-------+
| |Ordinary| | Capital|Unrealised|Realised| Other| |
| | share| Share|redemption| capital| capital|distributable| |
| | capital|premium| reserve| reserve*|reserve*| reserves*| Total|
| | | | | | | | |
| | GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000|
+------------+--------+-------+----------+----------+--------+-------------+-------+
|As at 1 July| | | | | | | |
|2011 | 8,350| 1,259| 1,058| (3,325)| 2,407| 15,912| 25,661|
| | | | | | | | |
|Return for | | | | | | | |
|the year | -| -| -| 615| (304)| 1,656| 1,967|
| | | | | | | | |
|Revaluation | | | | | | | |
|of | | | | | | | |
|investment | | | | | | | |
|in | | | | | | | |
|subsidiaries| -| -| -| (884)| -| -| (884)|
| | | | | | | | |
|Transfer of | | | | | | | |
|previously | | | | | | | |
|unrealised | | | | | | | |
|losses on | | | | | | | |
|sale of | | | | | | | |
|investments | -| -| -| 342| (342)| -| -|
| | | | | | | | |
|Dividends | | | | | | | |
|paid in year| -| -| -| -| -| (1,903)|(1,903)|
| | | | | | | | |
|Cancellation| | | | | | | |
|of treasury | | | | | | | |
|shares | (7)| -| 7| -| -| -| -|
| | | | | | | | |
|Purchase of | | | | | | | |
|own shares | | | | | | | |
|for treasury| | | | | | | |
|(including | | | | | | | |
|costs) | -| -| -| -| -| (468)| (468)|
| | | | | | | | |
|Issue of | | | | | | | |
|equity (net | | | | | | | |
|of costs) | 501| 1,076| -| -| -| -| 1,577|
+------------+--------+-------+----------+----------+--------+-------------+-------+
|As at 30 | | | | | | | |
|June 2012 | 8,844| 2,335| 1,065| (3,252)| 1,761| 15,197| 25,950|
+------------+--------+-------+----------+----------+--------+-------------+-------+
+------------+--------+-------+----------+----------+--------+-------------+-------+
| |Ordinary| | Capital|Unrealised|Realised| Other| |
| | share| Share|redemption| capital| capital|distributable| |
| | capital|premium| reserve| reserve*|reserve*| reserves*| Total|
| | | | | | | | |
| | GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000| GBP'000|
+------------+--------+-------+----------+----------+--------+-------------+-------+
|As at 1 July| | | | | | | |
|2010 | 7,918| 32| 972| (6,011)|(23,218)| 44,720| 24,413|
| | | | | | | | |
|Return for | | | | | | | |
|the year | -| -| -| 220| 544| (620)| 144|
| | | | | | | | |
|Revaluation | | | | | | | |
|of | | | | | | | |
|investment | | | | | | | |
|in | | | | | | | |
|subsidiaries| -| -| -| 1,430| -| -| 1,430|
| | | | | | | | |
|Transfer of | | | | | | | |
|previously | | | | | | | |
|unrealised | | | | | | | |
|losses on | | | | | | | |
|sale of | | | | | | | |
|investments | -| -| -| 1,036| (1,036)| -| -|
| | | | | | | | |
|Dividends | | | | | | | |
|paid in year| -| -| -| -| -| (1,819)|(1,819)|
| | | | | | | | |
|Purchase of | | | | | | | |
|own shares | | | | | | | |
|for | | | | | | | |
|cancellation| | | | | | | |
|(including | | | | | | | |
|costs) | (86)| -| 86| -| -| (252)| (252)|
| | | | | | | | |
|Issue of | | | | | | | |
|equity (net | | | | | | | |
|of costs) | 518| 1,227| -| -| -| -| 1,745|
| | | | | | | | |
|Transfer | | | | | | | |
|from special| | | | | | | |
|reserve to | | | | | | | |
|realised | | | | | | | |
|capital | | | | | | | |
|reserve | -| -| -| -| 26,117| (26,117)| -|
+------------+--------+-------+----------+----------+--------+-------------+-------+
|As at 30 | | | | | | | |
|June 2011 | 8,350| 1,259| 1,058| (3,325)| 2,407| 15,912| 25,661|
+------------+--------+-------+----------+----------+--------+-------------+-------+
* Included within these reserves is an amount of GBP13,706,000 (2011: GBP14,994,000)
which is considered distributable.
The special reserve, treasury shares reserve and the revenue reserve have been
combined in the Company balance sheet to form a single reserve named other
distributable reserves for both the current and prior year. The Directors
consider the presentation of a single reserve to enhance the clarity of
financial reporting. More details regarding treasury shares can be found in note
15.
Consolidated cashflow statement
+-------------------------------------------------------+-----------+----------+
| | Year ended|Year ended|
| | 30 June| 30 June|
| | 2012| 2011|
| Note| GBP'000| GBP'000|
+-------------------------------------------------------+-----------+----------+
|Operating activities | | |
| | | |
|Investment income received | 832| 945|
| | | |
|Deposit interest received | 34| 56|
| | | |
|Dividend income received | -| 287|
| | | |
|Recovery of VAT | 357| -|
| | | |
|Investment management fees paid | (439)| (431)|
| | | |
|Other cash payments | (278)| (256)|
| +-----------+----------+
|Cash generated from operations | 506| 601|
| | | |
| | | |
| | | |
|Tax recovered | -| -|
| +-----------+----------+
|Net cash flows from operating activities 18| 506| 601|
| +-----------+----------+
| | | |
| | | |
|Cash flows from investing activities | | |
| | | |
|Purchase of non-current asset investments | (3,258)| (4,126)|
| | | |
|Disposal of non-current asset investments | 699| 2,898|
| +-----------+----------+
|Net cash flows from investing activities | (2,559)| (1,228)|
| +-----------+----------+
| | | |
| | | |
|Cash flows from financing activities | | |
| | | |
|Issue of share capital (net of issue costs) | 1,485| 1,671|
| | | |
|Equity dividends paid (net of costs of dividend | | |
|reinvestment scheme and unclaimed dividends | | |
|returned) | (1,812)| (1,743)|
| | | |
|Purchase of own shares for treasury | (429)| -|
| | | |
|Purchase of Ordinary shares for cancellation | -| (264)|
| +-----------+----------+
|Net cash flows used in financing activities | (756)| (336)|
| +-----------+----------+
| | | |
| | | |
|Decrease in cash and cash equivalents | (2,809)| (963)|
| | | |
|Cash and cash equivalents at the start of the year | 4,550| 5,513|
| | | |
| | | |
| +-----------+----------+
|Cash and cash equivalents at the end of the year 17| 1,741| 4,550|
+-------------------------------------------------------+-----------+----------+
Notes to the Financial Statements
1. Accounting policies
The following policies refer to the Group and the Company except where noted.
References to International Financial Reporting Standards ('IFRS') relate to the
Group Financial Statements and UK GAAP relate to the Company Financial
Statements.
Basis of accounting
The Financial Statements have been prepared in accordance with International
Financial Reporting Standards ('IFRS') adopted for use in the European Union
(and therefore comply with Article 4 of the EU IAS regulation), in the case of
the Group, and in accordance with UK GAAP in the case of the Company.
Both the Group and the Company Financial Statements also apply the Statement of
Recommended Practice: "Financial Statements of Investment Companies and Venture
Capital Trusts" ('SORP') issued by the Association of Investment Companies
("AIC") in January 2009, in so far as this does not conflict with IFRS. The
Financial Statements have been prepared in accordance with those parts of the
Companies Act 2006 applicable to companies reporting under IFRS and UK GAAP.
These Financial Statements are presented in Sterling to the nearest thousand.
Accounting policies have been applied consistently in current and prior periods.
At the balance sheet date, the following International Accounting Standards and
interpretations were in issue but not yet effective:
* IFRS 7 Financial instruments: Disclosure (effective for annual periods
beginning on or after 1 January 2013)
* IAS 12 Income Taxes (effective for annual periods beginning on or after 1
January 2013)
* IFRS 9 Financial instruments: Recognition and measurement (effective for
annual periods beginning on or after 1 January 2015)
* IFRS 10 Consolidated Financial Statements (effective for annual periods
beginning on or after 1 January 2013)
* IFRS 11 Joint Arrangements (effective for annual periods beginning on or
after 1 January 2013)
* IFRS 12 Disclosure of Interest in Other Entities (effective for annual
periods beginning on or after 1 January 2013)
* IFRS 13 Fair Value Measurement (effective for annual periods beginning on or
after 1 January 2013)
* IAS 27, 28 Separate Financial Statements, Investments in associates
(effective for annual periods beginning on or after 1 January 2013)
* IAS 19 Employee benefits (effective for annual periods beginning on or after
1 January 2013)
* IAS 1 Presentation of financial statements (effective for annual periods
beginning on or after 1 July 2012)
* IAS 32 Presentation (effective for annual periods beginning on or after 1
January 2014)
* IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine
(effective for annual periods beginning on or after 1 January 2013)
The above International Accounting Standards and interpretations have not been
applied in this Annual Report and Financial Statements and are not expected to
have any material impact on the Financial Statements although some changes may
be required to the format of the Financial Statements and disclosures.
Basis of consolidation
The Group consolidated Financial Statements incorporate the Financial Statements
of the Company for the year ended 30 June 2012 and the entities controlled by
the Company (its subsidiaries), for the same period. Where necessary,
adjustments are made to the Financial Statements of subsidiaries to bring the
accounting policies into line with those used by the Group. All intra-group
transactions, balances, income and expenses are eliminated on consolidation.
As permitted by Section 408 of the Companies Act 2006, the Company has not
presented its own profit and loss account. The amount of the Company's profit
before tax for the year dealt with in the accounts of the Group is GBP1,967,000
(2011: GBP144,000).
Segmental reporting
The Directors are of the opinion that the Group and the Company are engaged in a
single operating segment of business, being investment in equity and debt. The
Group and the Company report to the Board which acts as the chief operating
decision maker. The Group invests in smaller companies principally based in the
UK.
Business combinations
The acquisition of subsidiaries is accounted for using the purchase method in
the Group Financial Statements. The cost of the acquisition is measured at the
aggregate of the fair values, at the date of exchange, of assets given,
liabilities incurred or assumed, and equity instruments issued by the Group in
exchange for control of the subsidiaries, plus any costs directly attributable
to the business combination. The subsidiary's identifiable assets, liabilities
and contingent liabilities that meet the conditions for recognition under IFRS
3 "Business Combinations" are recognised at their fair value at the acquisition
date.
Estimates
The preparation of the Group's and Company's Financial Statements requires
estimates, assumptions and judgements to be made, which affect the reported
results and balances. Actual outcomes may differ from these estimates, with a
consequential impact on the results of future periods. Those estimates and
assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are
those used to determine the fair value of investments at fair value through the
profit or loss.
The valuation of investments held at fair value through profit or loss or
measured in assessing any impairment of loan stocks is determined by using
valuation techniques. The Group and the Company use judgements to select a
variety of methods and makes assumptions that are mainly based on market
conditions at each balance sheet date.
Investment in subsidiaries
Investments in subsidiaries are revalued at the balance sheet date based on the
underlying net assets of the subsidiary undertakings. Revaluation movements are
recognised in the unrealised reserve.
Non-current asset investments
Quoted and unquoted equity investments, debt issued at a discount, and
convertible bonds
In accordance with IAS 39 'Financial Instruments: Recognition and Measurement',
and FRS 26 'Financial Instruments: Recognition and Measurement', quoted and
unquoted equity, debt issued at a discount and convertible bonds are designated
as fair value through profit or loss ("FVTPL"). Investments listed on recognised
exchanges are valued at the closing bid prices at the end of the accounting
period. Unquoted investments' fair value is determined by the Directors in
accordance with the International Private Equity and Venture Capital Valuation
Guidelines (IPEVCV guidelines).
Fair value movements on investments and gains and losses arising on the disposal
of investments are reflected in the capital column of the Statement of
comprehensive income in accordance with the AIC SORP. Realised gains or losses
on the sale of investments will be reflected in the realised capital reserve,
and unrealised gains or losses arising from the revaluation of investments will
be reflected in the unrealised capital reserve.
Warrants and unquoted equity derived instruments
Warrants and unquoted equity derived instruments are only valued if there is
additional value to the Company in exercising or converting as at the balance
sheet date. Otherwise these instruments are held at nil value. The valuation
techniques used are those used for the underlying equity investment.
Unquoted loan stock
Unquoted loan stock (excluding debt issued at a discount and convertible bonds)
is classified as loans and receivables as permitted by IAS 39 and FRS 26 and
measured at amortised cost using the effective interest rate method less
impairment. Movements in the amortised cost relating to interest income are
reflected in the revenue column of the Statement of comprehensive income, and
hence are reflected in the revenue reserve, and movements in respect of capital
provisions are reflected in the capital column of the Statement of comprehensive
income and are reflected in the realised capital reserve following sale, or in
the unrealised capital reserve for impairments arising from revaluations of the
fair value of the security.
For all unquoted loan stock, fully performing, renegotiated, past due or
impaired, the Board considers that the fair value is equal to or greater than
the security value of these assets. For unquoted loan stock, the amount of the
impairment is the difference between the asset's cost and the present value of
estimated future cash flows, discounted at the original effective interest rate.
The future cash flows are estimated based on the fair value of the security held
less estimated selling costs.
Investments are recognised as financial assets on legal completion of the
investment contract and are de-recognised on legal completion of the sale of an
investment.
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.
Loan stock accrued interest is recognised in the Balance sheet as part of the
carrying value of the loans and receivables at the end of each reporting period.
In accordance with the exemptions under IAS 28 "Investments in associates" and
FRS 9 "Associates and joint ventures", those undertakings in which the Group or
Company holds more than 20 per cent. of the equity as part of an investment
portfolio are not accounted for using the equity method.
Current asset investments
Contractual future contingent receipts on the disposal of fixed asset
investments are designated at fair value through profit and loss and are
subsequently measured at fair value.
Investment income
Quoted and unquoted equity income
Dividend income is included in revenue when the investment is quoted 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.
Investment management fees, performance incentive fees and other expenses
All expenses have been accounted for on an accruals basis. Expenses are charged
through the revenue column of the Statement of comprehensive income, except for
management fees and performance incentive fees which are allocated in part to
the capital column of the Statement of comprehensive income, to the extent that
these relate to the maintenance or enhancement in the value of the investments
and in line with the Board's expectation that over the long term 75 per cent. of
the Group's investment returns will be in the form of capital gains.
Issue costs
Issue costs associated with the allotment of share capital have been deducted
from the share premium account.
Taxation
Taxation is applied on a current basis in accordance with IAS 12 "Income taxes"
and FRS 16 "Current tax". Taxation associated with capital expenses is applied
in accordance with the SORP. Deferred taxation is provided in full on temporary
differences and timing differences, 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 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. Deferred
tax assets and liabilities are not discounted.
Dividends
In accordance with IAS 10 and FRS 21 "Events after the balance sheet date",
dividends are accounted for in the period in which the dividend has been paid or
approved by shareholders.
Reserves
Share premium reserve
This reserve accounts for the difference between the price paid for the
Company's shares and the nominal value of those shares, less issue costs and
transfers to the special reserve.
Capital redemption reserve
This reserve accounts for amounts by which the issued share capital is
diminished through the repurchase and cancellation of the Company's own shares.
Unrealised capital reserve
Increases and decreases in the valuation of investments held at the year end,
against cost are included in this reserve.
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.
Treasury shares 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.
Realised capital reserve
The following are disclosed in this reserve:
* gains and losses compared to cost on the realisation of investments;
* expenses, together with the related taxation effect, charged in accordance
with the above policies; and
* dividends paid to equity holders.
2. Gains on investments
Year ended
Year ended 30 June 2011
30 June 2012 GBP'000
GBP'000
=------------------------------------------------------------------------------
Unrealised gains/(losses) on investments held at
fair value through profit or loss 948 (10)
Unrealised (increases)/reversals of impairments on
investments held at amortised cost (333) 228
--------------------------
Unrealised gains on investments 615 218
--------------------------
Realised (losses)/gains on investments held at fair
value through profit or loss (174) 587
Realised gains on investments held at amortised cost 123 284
--------------------------
(51) 871
--------------------------
Realised (losses) on current asset investments held
at fair value through profit or loss (26) -
--------------------------
Realised (losses)/gains on investments (77) 871
--------------------------
538 1,089
--------------------------
Investments measured at amortised cost are unquoted loan stock investments as
described in note 10.
3. Investment income and deposit interest
Year ended Year ended
30 June 2012 30 June 2011
GBP'000 GBP'000
=------------------------------------------------------------------------------
Income recognised on investments held at fair value
through profit or loss
UK dividend income - 287
Interest on convertible bonds and debt issued at a
discount 60 18
--------------------------
60 305
--------------------------
Income recognised on investments held at amortised
cost
Return on loan stock investments 804 795
Bank deposit interest 31 57
--------------------------
835 852
--------------------------
--------------------------
895 1,157
--------------------------
Interest income earned on impaired investments at 30 June 2012 amounted to
GBP185,000 (2011: GBP47,000). These investments are all held at amortised cost.
4. Investment management fees
Year ended 30 June Year ended 30 June
2012 2011
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
=---------------------------------------------------------------------
Investment management fee 110 332 442 109 327 436
--------------------------------------------
Further details of the management agreement under which the investment
management fee is paid are given in the Directors' report on page 21 of the
Annual Report and Financial Statements.
5. Recovery of VAT
The Company has received a repayment in respect of historic VAT from the
previous manager, Murray Johnstone Limited. A sum of GBP357,000 (2011: nil) has
been recognised as a separate item in the Consolidated statement of
comprehensive income, allocated between revenue and capital in the same
proportion as the original VAT was charged.
6. Profit before taxation is stated after charging:
Year ended Year ended
30 June 2012 30 June 2011
GBP'000 GBP'000
=------------------------------------------------------------------------------
Directors' remuneration 76 75
National insurance on Directors' remuneration 6 7
Auditor's remuneration:
- audit of Financial Statements (excluding VAT) 24 23
- the auditing of accounts of associates of the
Company pursuant to legislation (excluding VAT) 5 5
Other expenses 154 126
--------------------------
265 236
--------------------------
Further information regarding Directors' remuneration can be found in the
audited section of the Directors' remuneration report on page 28 of the Annual
Report and Financial Statements.
7. Taxation
Year ended 30 June Year ended 30 June
2012 2011
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
=------------------------------------------------------------------------------
UK corporation tax (charge)/credit - - - - - -
--------------------------------------------
The tax charge for the year shown in the Statement of comprehensive income is
lower than the standard rate of corporation tax of 26 per cent. to 31 March
2012 and 24 per cent. from 1 April 2012. (average rate of 25.5 per cent.; 2011:
average rate of 27.5 per cent.). The differences are explained below:
Year ended Year ended
30 June 2012 30 June 2011
GBP'000 GBP'000
=------------------------------------------------------------------------------
Profit on ordinary activities before taxation 1,083 1,574
--------------------------
Profit on ordinary activities multiplied by the
standard rate of corporation
tax (26 per cent. to 31 March 2012: 24 per cent.
from 1 April 2012.) (276) (428)
Effect of capital gains not subject to taxation 137 300
Effect of income not subject to taxation - 79
Utilisation of tax losses 139 49
--------------------------
- -
--------------------------
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
GBP2,434,000 (2011: GBP2,216,000) in respect of unutilised management expenses and
non-trading deficits as it is not considered sufficiently probable that there
will be taxable profits against which to utilise these expenses in the
foreseeable future. The Group has not recognised a further deferred tax asset of
GBP1,712,000 (2011: GBP2,415,000) 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 Year ended
30 June 2012 30 June 2011
GBP'000 GBP'000
=------------------------------------------------------------------------------
First dividend paid on 30 November 2011 (1.25 pence
per share) 953 899
Second dividend paid on 31 March 2012 (1.25 pence
per share) 957 920
Unclaimed dividends (7) -
---------------------------
1,903 1,819
---------------------------
In addition to the dividends paid above, the Board has declared a first dividend
for the year ending 30 June 2013, of 1.25 pence per Crown Place VCT PLC share.
This will be paid on 30 November 2012 to shareholders on the register as at 2
November 2012. The total dividend will be approximately GBP995,000.
During the year, unclaimed dividends older than twelve years amounting to GBP7,000
(2011: nil) were returned to the Company in accordance with the terms of the
Articles of Association.
9. Basic and diluted return per share
Year ended 30 June Year ended 30 June
2012 2011
Revenue Capital Total Revenue Capital Total
=------------------------------------------------------------------------------
Return attributable to equity
shares ( GBP'000) 616 467 1,083 812 762 1,574
Weighted average shares (excluding
treasury shares) 77,081,979 73,413,178
Return attributable per Ordinary
share (pence) (basic and diluted) 0.80 0.61 1.41 1.11 1.04 2.15
The return per share has been calculated excluding treasury shares of 8,835,910
(2011: 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. Non-current asset investments
30 June 2012 30 June 2011
GBP'000 GBP'000
=------------------------------------------------------------------------------
Group and Company
Investments held at fair value through profit or
loss
Unquoted equity and preference shares 8,711 7,141
Quoted equity 704 771
Discounted debt and convertible loan stock 2,105 839
--------------------------
11,520 8,751
--------------------------
Investments held at amortised cost
Unquoted loan stock 12,813 12,421
--------------------------
24,333 21,172
--------------------------
30 June 2012
GBP'000
=------------------------------------------------------------------------------
Opening valuation as at 1 July 2011 21,172
Purchases at cost 3,276
Disposal proceeds (592)
Realised losses (51)
Movement in loan stock accrued income 33
Transfer of unrealised gains to current asset (120)
investments
Unrealised gains 615
----------------------
Closing valuation as at 30 June 2012 24,333
----------------------
Movement in loan stock accrued income
Opening movement in loan stock accrued income 49
Movement in loan stock accrued income 33
----------------------
Closing movement in loan stock accrued income 82
----------------------
Movement in unrealised losses
Opening accumulated unrealised losses (4,751)
Movement in unrealised gains 615
Transfer of unrealised gains to current asset (120)
investments
Transfer of previously unrealised losses to realised 342
reserves on disposal
----------------------
Closing accumulated unrealised losses (3,914)
----------------------
Historic cost basis
Opening book cost 25,874
Purchases at cost 3,276
Sales at cost (986)
----------------------
Closing book cost 28,164
----------------------
30 June 2011
GBP'000
=------------------------------------------------------------------------------
Opening valuation as at 1 July 2010 19,092
Purchases at cost 4,916
Disposal proceeds (3,758)
Realised gains 871
Movement in loan stock accrued income (167)
Unrealised gains 218
----------------------
Closing valuation as at 30 June 2011 21,172
----------------------
Movement in loan stock accrued income
Opening movement in loan stock accrued income 216
Movement in loan stock accrued income (167)
----------------------
Closing movement in loan stock accrued income 49
----------------------
Movement in unrealised losses
Opening accumulated unrealised losses (6,004)
Movement in unrealised gains 218
Transfer of previously unrealised losses to realised 1,036
reserves on disposal
----------------------
Closing accumulated unrealised losses (4,751)
----------------------
Historic cost basis
Opening book cost 24,880
Purchases at cost 4,916
Sales at cost (3,922)
----------------------
Closing book cost 25,874
----------------------
Transfer of unrealised gains to current asset investments represents the fair
value of contingent future receipts on disposal of fixed asset investments
recognised as current asset investments (see note 13).
The Directors believe that the carrying value of loan stock measured at
amortised cost is not materially different to fair value. The Company does not
hold any assets as the result of the enforcement of security during the year,
and believes that the carrying values for both impaired and past due assets are
covered by the value of security held for these loan stock investments.
Additions and disposal proceeds included in the cash flow statement differ from
the amounts shown in the note above, due to deferred consideration and
settlement creditors and the restructuring of investments.
A schedule of disposals during the year is shown on page 13 of the Annual Report
and Financial Statements.
IFRS 7 'Financial Instruments: Disclosures' requires the Company to disclose the
valuation methods applied to its investments measured at fair value through
profit or loss in a fair value hierarchy according to the following definitions:
Fair value hierarchy Definition of valuation method
=------------------------------------------------------------------------------
Level 1 Unadjusted quoted (bid) prices applied
Level 2 Inputs to valuation are from observable sources and are
directly or indirectly derived from prices
Level 3 Inputs to valuations are not based on observable market
data
Quoted AIM investments are valued according to
Level 1 valuation methods.
Unquoted equity, preference shares, convertible loan stock and debt issued at a
discount are all valued according to Level 3 valuation methods.
The Company's investments measured at fair value through profit or loss (level
3) had the following movements in the year to 30 June 2012:
30 June 2012 30 June 2011
Equity Discounted Total Equity Discounted Total
debt and debt and
convertible convertible
loan stock loan stock
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
=------------------------------------------------------------------------------
Opening balance 7,141 839 7,980 6,998 - 6,998
Additions 1,096 1,145 2,241 1,023 275 1,298
Disposal proceeds (27) - (27) (1,381) - (1,381)
Realised gains/(losses) 33 (207) (174) 545 - 545
Representation of - - - - 338 338
convertible debt
Unrealised gains 588 360 948 (44) 226 182
Transfer of unrealised (120) - (120) - - -
gains to current asset
investments
Accrued loan stock - 3 3 - - -
interest
------------------------------------------------------
Closing balance 8,711 2,140 10,851 7,141 839 7,980
------------------------------------------------------
Unquoted investments held at fair value through profit or loss are valued in
accordance with the IPEVCV guidelines as follows:
30 June 2012 30 June 2011
Investment valuation methodology GBP'000 GBP'000
=------------------------------------------------------------------------------
Cost (reviewed for impairment) 1,786 1,341
Net asset value supported by third party or desktop
valuation 2,904 1,127
Recent investment price 76 697
Earnings multiple 3,918 3,427
Revenue Multiple 2,167 1,388
--------------------
10,851 7,980
--------------------
Full valuations are prepared by independent RICS qualified surveyors in full
compliance with the RICS Red Book. Desk top reviews are carried out by similarly
RICS qualified surveyors by updating previously prepared full valuations for
current trading and market indices.
IFRS 7 requires the Directors to consider the impact of changing one or more of
the inputs used as part of the valuation process to reasonable possible
alternative assumptions. After due consideration and noting that the valuation
methodology applied to 44 per cent. of the Level 3 investments (by valuation) is
based on third party independent evidence, recent investment price and cost, the
Directors believe that changes to reasonable possible alternative input
assumptions for the valuation of the remainder of the portfolio could lead to a
significant change in the fair value of the portfolio. The impact of these
changes could result in an increase in the valuation of the equity investments
by GBP736,000 or a decrease in the valuation of equity investments by GBP682,000.
The unquoted equity instruments had the following movements between investment
methodologies between 30 June 2011 and 30 June 2012:
Value as at
Change in investment valuation 30 June 2012
methodology (2011 to 2012) GBP'000 Explanatory note
=------------------------------------------------------------------------------
Price of recent investment to 136 Industry benchmarks available
earnings multiple
Cost (reviewed for impairment) 1,649 Third party valuation took place
to net asset value supported by in the year
third party valuation
Earnings multiple to revenue 284 Temporary trading losses
multiple
The valuation method used will be the most appropriate valuation methodology for
an investment within its market, with regard to the financial health of the
investment and the IPEVCV Guidelines. The Directors believe that, within these
parameters, there are no other possible methods of valuation which would be
reasonable as at 30 June 2012.
11. Significant interests
The principal activity of the Group is to select and hold a portfolio of
investments in unquoted securities. Although the Company, through the Manager,
will, in some cases, be represented on the board of the portfolio company, it
will not take a controlling interest or become involved in the management of a
portfolio company. The size and structure of the companies with unquoted
securities may result in certain holdings in the portfolio representing a
participating interest without there being any partnership, joint venture or
management consortium agreement.
The Company has interests of greater than 20 per cent. of the nominal value of
any class of the allotted shares in the portfolio companies as at 30 June 2012
as described below:
Company Country of Principal activity % class and % total
incorporation share type voting
rights
=------------------------------------------------------------------------------
ELE Advanced Great Britain Manufacturer of 74.3% B 48.3%
Technologies precision Ordinary
Limited engineering
components for the
industrial gas
turbine, aerospace
and automotive
markets
House of Great Britain Chocolate 33.0% B 23.3%
Dorchester manufacturer Ordinary
Limited
Tuscan Energy Great Britain In administration 42.5% C 1.5%
Group Limited* Ordinary
Uctal Limited Great Britain TV production 56.7% B 24.2%
company Ordinary/A
Preference and
B Preference
* Carried at nil value as at 30 June 2012.
The investments listed above are held as part of an investment portfolio and
therefore, as permitted by IAS 28 and FRS 9, they are measured at fair value and
not accounted for using the equity method.
12. Investments in subsidiary undertakings
30 June 2012
CP1 VCT PLC CP2 VCT PLC Total
GBP'000 GBP'000 GBP'000
=------------------------------------------------------------------------
Carrying value as at 1 July 2011 7,222 9,222 16,444
Movement in subsidiary net assets (402) (482) (884)
-------------------------------------
Carrying value as at 30 June 2012 6,820 8,740 15,560
-------------------------------------
30 June 2011
CP1 VCT PLC CP2 VCT PLC Total
GBP'000 GBP'000 GBP'000
=------------------------------------------------------------------------
Carrying value as at 1 July 2010 6,572 8,441 15,013
Movement in subsidiary net assets 650 781 1,431
-------------------------------------
Carrying value as at 30 June 2011 7,222 9,222 16,444
-------------------------------------
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 2012
CP1 VCT PLC CP2 VCT PLC
=--------------------------------------------------------------------
Nominal value of shares held GBP6,382,746 GBP8,219,350
Percentage of total voting rights held 100% 100%
30 June 2011
CP1 VCT PLC CP2 VCT PLC
=--------------------------------------------------------------------
Nominal value of shares held GBP6,382,746 GBP8,219,350
Percentage of total voting rights held 100% 100%
The subsidiaries current business is to hold cash and intercompany balances.
13. Trade and other receivables/debtors and current asset investments
30 June 2012 30 June 2011
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
=------------------------------------------------------------------------------
Trade and other receivables/debtors less than one
year 74 74 102 102
Trade and other receivables/debtors greater than
one year - - 80 80
----------------------------
74 74 182 182
=------------------------------------------------------------------------------
Current asset investments
30 June 2012 30 June 2011
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------
Contingent future receipts on disposal of fixed
asset investments 92 92 - -
----------------------------
The fair value hierarchy applied to contingent future receipts on disposal of
fixed asset investments is Level 3.
14. Trade and other payables/creditors
30 June 2012 30 June 2011
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
=----------------------------------------------------------------------------
Amounts falling due within one year:
Amounts due to subsidiary undertakings - 15,504 - 16,166
Other payables 104 104 53 53
Accruals 186 185 190 175
------------------------------------
290 15,793 243 16,394
------------------------------------
Interest is chargeable on intercompany balances at a rate of 12 per cent. per
annum. Intercompany balances are payable on demand.
15. Called up share capital
30 June 2012 30 June 2011
GBP'000 GBP'000
=------------------------------------------------------------------------------
Allotted, called up and fully paid
88,435,076 Ordinary shares of 10p each (2011:
83,509,177) 8,844 8,350
--------------------------
Allotted, called up and fully paid excluding
treasury shares
79,599,166 Ordinary shares of 10p each (2011:
76,248,767)
The Company cancelled 71,000 (2011: 861,875) Ordinary shares from treasury
during the year at a total cost of GBP27,000 (2011: GBP252,000) representing 0.1 per
cent. of the shares in issue as at 30 June 2012. The shares purchased for
cancellation were funded from the revenue reserve.
The Company purchased 1,646,500 Ordinary shares for treasury (2011: nil) during
the year at a total cost of GBP468,000 (2011: nil).
The total number of shares held in treasury as at 30 June 2012 was 8,835,910
(2011: 7,260,410) representing 10.0 per cent. of the shares in issue as at 30
June 2012.
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:
Aggregate Opening mid
nominal Issue Net market price
Number of value of price consideration per share on
shares shares per received allotment
Allotment allotted GBP'000 share GBP'000 pence per
date pence share
per
share
=------------------------------------------------------------------------------
30 November 145,641 15 31.7 46 30.00
2011
30 March 2012 159,298 16 31.6 46 28.50
--------------------------- ------------------
304,939 31 92
--------------------------- ------------------
Under the terms of the Albion VCTs Linked Top Up Offers (which closed on 31 May
2012), the following Ordinary shares of nominal value 10 pence were issued
during the year;
Aggregate Opening mid
nominal Issue Net market price
Number of value of price consideration per share on
shares shares per received allotment
Allotment allotted GBP'000 share GBP'000 pence per
date pence share
per
share
=------------------------------------------------------------------------------
10 January 1,191,601 119 33.5 378 27.50
2012
20 March 2012 1,297,117 130 33.4 410 28.50
5 April 2012 1,987,138 199 33.4 627 28.50
31 May 2012 216,104 22 34.5 70 28.50
--------------------------- ------------------
4,691,960 470 1,485
--------------------------- ------------------
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 2012 30 June 2011
=----------------------------------------------------------------------------
Net asset value per share attributable (pence) 32.60 33.70
--------------------------
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 79,599,166 shares (2011: 76,248,767) as at 30 June 2012.
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. Analysis of changes in cash during the year
30 June 2012 30 June 2011
Group Company Group Company
GBP'000 GBP'000 GBP'000 GBP'000
=-------------------------------------------------------------
Opening cash balances 4,550 4,257 5,513 5,400
Net cash flow (2,809) (2,573) (963) (1,143)
--------------------------------------
Closing cash balances 1,741 1,684 4,550 4,257
--------------------------------------
18. Reconciliation of revenue return on ordinary activities before taxation to
net cash flow from operating activities
Year ended Year ended
30 June 2012 30 June 2011
GBP'000 GBP'000
=------------------------------------------------------------------------------
Revenue return before tax 616 812
Capitalised expenses (332) (327)
Recovery of VAT charged to capital 261 -
(Increase)/decrease in accrued amortised loan
stock interest (33) 132
Decrease/(increase) in receivables 3 (3)
(Decrease) in payables (9) (13)
-------------------------------
Net cash flow from operating activities 506 601
-------------------------------
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 GBP24,956,000 (2011: GBP24,708,000) and as
at 30 June 2012, the Group's gearing was nil (2011: nil). The Group's policy on
gearing is described in more detail on page 17 of the Directors' report in the
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 22 of the Directors'
report in the Annual Report and Financial Statements.
The Group's financial instruments comprise equity and loan stock investments in
unquoted companies, equity in AIM quoted companies, cash balances, debtors and
creditors which arise from its operations. The main purpose of these financial
instruments is to generate revenue and capital appreciation for the Group's
operations. The Group has no gearing or other financial liabilities apart from
short term creditors. The Group does not use any derivatives for the management
of its balance sheet.
The principal risks arising from the Group's operations are:
* Investment (or market) risk (which comprises investment price and cash flow
interest rate risk);
* credit risk; and
* liquidity risk.
The Board regularly reviews and agrees policies for managing each of these
risks. There have been no changes in the nature of the risks that the Group has
faced during the past year, and apart from where noted below, there have been no
changes in the objectives, policies or processes for managing risks during the
past year. The key risks are summarised as follows:
Investment risk
As a venture capital trust, it is the Group's specific nature to evaluate and
control the investment risk of its portfolio in unquoted and in quoted
companies, details of which are shown on pages 11 to 13 of the Annual Report and
Financial Statements. Investment risk is the exposure of the Group to the
revaluation and devaluation of investments. The main driver of investment risk
is the operational and financial performance of the portfolio companies and the
dynamics of market quoted comparators. The Manager receives management accounts
from portfolio companies, and members of the investment management team often
sit on the boards of unquoted portfolio companies; this enables the close
identification, monitoring and management of investment risk.
The Manager and the Board formally review investment risk (which includes market
price risk), both at the time of initial investment and at quarterly Board
meetings.
The Board monitors the prices at which sales of investments are made to ensure
that profits to the Group are maximised, and that valuations of investments
retained within the portfolio appear sufficiently prudent and realistic compared
to prices being achieved in the market for sales of unquoted investments.
The maximum investment risk as at the balance sheet date is the value of the
non-current and current asset investment portfolio which is GBP24,425,000 (2011:
GBP21,172,000). Non-current and current asset investments form 94 per cent. of the
net asset value as at 30 June 2012 (2011: 83 per cent.).
More details regarding the classification of non-current investments are shown
in note 10.
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 of the Annual report and Financial
Statements and in the Manager's report.
The valuation method used will be the most appropriate valuation methodology for
an investment within its market, with regard to the financial health of the
investment and the IPEVCV Guidelines.
As required under IFRS 7 and FRS 29, the Board is required to illustrate by way
of a sensitivity analysis, the degree of exposure to market risk. The Board
considers that the value of the non-current and current asset investment
portfolio is sensitive to a 10 per cent. change based on the current economic
climate. The impact of a 10 per cent. change has been selected as this is
considered reasonable given the current level of volatility observed both on a
historical basis and future expectations.
The sensitivity of a 10 per cent. (2011: 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 GBP2,442,500 (2011: GBP2,117,200).
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 rise of half a percentage point in
all interest rates would be immaterial due to the level of fixed rate loan stock
held within the portfolio. On the basis of the Company's analysis, it is
considered that further falls in interest rates would not have a significant
impact.
The weighted average interest rate applied to the Group's fixed rate assets
during the year was approximately 6.3 per cent. (2011: 5.6 per cent.). The
weighted average period to maturity for the fixed rate assets is approximately
2.9 years (2011: 2.5 years).
The Group's financial assets and liabilities as at 30 June 2012, all denominated
in pounds sterling, consist of the following:
30 June 2012 30 June 2011
Fixed Floating Non- Fixed Floating Non-
rate rate interest Total rate rate interest Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
=------------------------------------------------------------------------------
Unquoted loan
stock
(including
convertible
loan stock
and
discounted
bonds) 14,203 121 594 14,918 13,260 - - 13,260
Equity - - 9,415 9,415 - - 7,912 7,912
Receivables* - - 54 54 - - 182 182
Current asset
investments - - 92 92 - - - -
Payables - - (290) (290) - - (243) (243)
Cash - 1,741 - 1,741 - 4,550 - 4,550
-----------------------------------------------------------------
Net assets 14,203 1,862 9,865 25,930 13,260 4,550 7,851 25,661
-----------------------------------------------------------------
*The receivables do not reconcile to the balance sheet as prepayments are not
included in the above table.
The Company's financial assets and liabilities as at 30 June 2012, all
denominated in pounds sterling, consist of the following:
30 June 2012 30 June 2011
Fixed Floating Non- Fixed Floating Non-
rate rate interest Total rate rate interest Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
=-----------------------------------------------------------------------------------
Unquoted
loan stock
(including
convertible
loan stock
and
discounted
bonds) 14,203 121 594 14,918 13,260 - - 13,260
Equity - - 24,975 24,975 - - 24,356 24,356
Debtors* - - 54 54 - - 182 182
Current
asset
investments - - 92 92 - - - -
Current
liabilities (15,504) - (289) (15,793) (16,166) - (228) (16,394)
Cash - 1,684 - 1,684 - 4,257 - 4,257
------------------------------------------------------------------------
Net assets (1,301) 1,805 25,426 25,930 (2,906) 4,257 24,310 25,661
------------------------------------------------------------------------
*The debtors do not reconcile to the balance sheet as prepayments are not
included in the above table.
Credit risk
Credit risk is the risk that the counterparty to a financial instrument will
fail to discharge an obligation or commitment that it has entered into with the
Group. The Group is exposed to credit risk through its debtors, investment in
unquoted loan stock, and cash on deposit with banks.
The Manager evaluates credit risk on loan stock and other similar instruments
prior to investment, and as part of its ongoing monitoring of investments. In
doing this, it takes into account the extent and quality of any security held.
Typically loan stock instruments have a first fixed charge or a fixed and
floating charge over the assets of the portfolio company in order to mitigate
the gross credit risk. The Manager receives management accounts from portfolio
companies, and members of the investment management team often sit on the boards
of unquoted portfolio companies; this enables the close identification,
monitoring and management of investment-specific credit risk.
Bank deposits are held with banks which have a Moody's credit rating of at least
'A'. The Group has an informal policy of limiting counterparty banking exposure
to a maximum of 20 per cent. of net asset value for any one counterparty.
The Manager and the Board formally review credit risk (including receivables)
and other risks, both at the time of initial investment and at quarterly Board
meetings.
The Group's total gross credit risk at 30 June 2012 was limited to GBP14,918,000
(2011: GBP13,260,000) of unquoted loan stock instruments (all are secured on the
assets of the portfolio company) and GBP1,741,000 (2011: GBP4,550,000) of cash
deposits with banks.
As at the balance sheet date, the cash held by the Group is held with the Royal
Bank of Scotland plc, Lloyds TSB Bank Plc, Scottish Widows Bank plc (part of
Lloyds Banking Group) and Barclays Bank plc. Credit risk on cash transactions
is mitigated by transacting with counterparties that are regulated entities
subject to prudential supervision, with high credit ratings assigned by
international credit-rating agencies.
The credit profile of unquoted loan stock is described under liquidity risk
shown below.
The cost, impairment and carrying value of impaired loan stocks at 30 June 2012
and 30 June 2011 are as follows:
30 June 2012 30 June 2011
Cost Impairment Carrying value Cost Impairment Carrying value
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
=------------------------------------------------------------------------------
Impaired loan 6,694 (2,142) 4,552 3,040 (1,403) 1,637
stock
----------------------------------------------------------------
Impaired loan stock instruments have a first fixed charge or a fixed and
floating charge over the assets of the portfolio company and the Board estimate
that the security value approximates to the carrying value.
Liquidity risk
Liquid assets are held as cash on current account and cash on deposit or short
term money market account. Under the terms of its Articles, the Group has the
ability to borrow up to the amount of its adjusted capital and reserves of the
latest published audited consolidated balance sheet, which amounts to
GBP24,956,000 (2011: GBP24,708,000) as at 30 June 2012.
The Group has no committed borrowing facilities as at 30 June 2012 (2011: nil)
and had cash balances of GBP1,741,000 (2011: GBP4,550,000) (Company GBP1,684,000;
2011: GBP4,257,000). The main cash outflows are for new investments, dividends
and share buy-backs, which are within the control of the Group. The Manager
formally reviews the cash requirements of the Group on a monthly basis, and the
Board on a quarterly basis, as part of its review of management accounts and
forecasts.
All of the Group's financial liabilities are short term in nature and total
GBP290,000 (2011: GBP243,000) for the year to 30 June 2012 (Company: 30 June 2012;
GBP15,793,000; 30 June 2011: GBP16,394,000). An amount of GBP15,504,000 (2011:
GBP16,166,000) which is included within the Company's creditors, relates to
intercompany balances and is not considered to carry liquidity risk.
The carrying value of loan stock investments at 30 June 2012, analysed by
expected maturity dates is as follows:
Fully performing Past due Impaired
loan stock loan stock loan stock Total
Redemption date GBP'000 GBP'000 GBP'000 GBP'000
=--------------------------------------------------------------------------
Less than one year 1,171 1,673 2,023 4,867
1-2 years 814 143 656 1,613
2-3 years 340 191 1,005 1,536
3-5 years 2,527 2,181 868 5,576
More than 5 years 467 859 - 1,326
------------------------------------------------------
5,319 5,047 4,552 14,918
------------------------------------------------------
The carrying value of loan stock investments at 30 June 2011, analysed by
expected maturity dates is as follows:
Fully performing Past due Impaired
loan stock loan stock loan stock Total
Redemption date GBP'000 GBP'000 GBP'000 GBP'000
=--------------------------------------------------------------------------
Less than one year 535 813 360 1,708
1-2 years 881 3,805 - 4,686
2-3 years 735 705 179 1,619
3-5 years 3,590 439 1,098 5,127
More than 5 years - 120 - 120
------------------------------------------------------
5,741 5,882 1,637 13,260
------------------------------------------------------
Loan stocks can be past due as a result of interest or capital not being paid in
accordance with contractual terms.
The average annual interest yield on the total cost of past due loan stocks is
6 per cent..
Loan stock with a carrying value of GBP4,764,000 had loan stock interest past due
of less than 12 months. Within this, loan stock with a carrying value of
GBP145,000 had capital past due by less than 12 months. Interest on this loan
stock was received at a rate of 5.97 per cent. in accordance with renegotiated
terms.
Loan stock with a carrying value of GBP283,000 had loan stock interest past due
greater than 12 months but less than 18 months. Within this, loan stock with a
carrying value of GBP123,000 had capital past due by greater than 12 months but
less than 2 years.
In view of the availability of adequate cash balances and the repayment profile
of loan stock investments, the Board considers that the Group is subject to low
liquidity risk.
Fair values of financial assets and financial liabilities
All the Group's financial assets and liabilities as at 30 June 2012 are stated
at fair value as determined by the Directors, with the exception of loans and
receivables included within investments, cash, receivables and payables, which
are measured at amortised cost, as permitted by IAS 39. In the opinion of the
Directors, the amortised cost of loan stock is not materially different to the
fair value of the loan stock. There are no financial liabilities other than
short term trade and other payables. The Group's financial liabilities are all
non-interest bearing. It is the Directors' opinion that the book value of the
financial liabilities is not materially different to the fair value and all are
payable within one year, and that the Group is subject to low financial risk as
a result of having nil gearing and positive cash balances.
20. Post balance sheet events
Since 30 June 2012 the Company has completed the following material
transactions:
* Investment of GBP8,000 in Rostima Holdings Limited completed in July 2012
* Investment of GBP12,000 in Nelson House Hospital Limited completed in August
2012
* Investment of GBP48,000 in AMS Sciences Limited completed in August 2012 and
September 2012
* Repayment of GBP43,000 loan stock by Tower Bridge Health Clubs Limited in July
and August 2012
* Repayment of GBP30,000 loan stock by Kew Green VCT (Stansted) Limited in July
and August 2012
* Repayment of GBP67,000 loan stock by the Charnwood Pub Company Limited in July
and September 2012
* Proceeds of GBP202,000 from the sale of shares in Avanti Communications Group
plc in July 2012
* Receipt of deferred consideration of GBP142,000 from the sale of Dexela
Limited
21. Contingencies and guarantees
There were no contingencies or commitments for, or guarantees by, the Group or
Company as at 30 June 2012 (2011: nil).
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 with the Company
(details disclosed on page 21 of the Annual Report and Financial Statements).
During the year, services of a total value of GBP492,000 (2011: GBP486,000) were
purchased by the Company from Albion Ventures LLP; this includes GBP442,000
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 GBP135,000 (2011: GBP124,000).
Albion Ventures LLP holds 1,256 Ordinary shares as a result of fractional
entitlements arising on the merger of Crown Place VCT PLC, CP1 VCT PLC and CP2
VCT PLC on 13 January 2006.
During the year the Company raised new funds through the Albion VCTs Linked Top
Up Offers as detailed in note 15. The total cost of the issue of these shares
was 5.5 per cent. of the sums subscribed. Of these costs, an amount of GBP8,200
was paid to the Manager, Albion Ventures LLP in respect of receiving agent
services. There were no sums outstanding in respect of receiving agent services
at the year end.
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. Economic risk
Changes in economic conditions, including, for example, interest rates, rates of
inflation, industry conditions, competition, political and diplomatic events and
other factors could substantially and adversely affect the Company's prospects
in a number of ways.
To reduce this risk, in addition to investing equity in portfolio companies, the
Company often invests in secured loan stock and has a policy of not normally
permitting any external bank borrowings within portfolio companies.
Additionally, the Manager has been rebalancing the sector exposure of the
portfolio with a view to reducing reliance on consumer led sectors.
2. Investment risk
This is the risk of investment in poor quality assets which reduces the capital
and income returns to shareholders, and negatively impacts on the Company's
reputation. By nature, smaller unquoted businesses, such as those that qualify
for venture capital trust purposes, are more fragile than larger, long
established businesses.
The success of investments in certain sectors are also subject to regulatory
risk, such as those affecting companies involved in UK renewable energy.
To reduce this risk, the Board places reliance upon the skills and expertise of
the Manager and their strong track record for investing in this segment of the
market. In addition, the Manager operates a formal and structured investment
process, which includes an Investment Committee, comprising investment
professionals from the Manager and at least one external investment
professional. The Manager also takes account of comments from all non-executive
Directors of the Company on investments discussed at the Investment Committee
meetings. Investments are actively and regularly monitored by the Manager
(investment managers normally sit on investee company boards) and the Board
receives detailed reports on each investment as part of the Manager's report at
quarterly board meetings. It is the policy of the Company for portfolio
companies to not normally have external bank borrowings.
The Board and the Manager closely monitor regulatory changes within the sectors
invested in.
3. Valuation risk
The Company's investment valuation method is reliant on the accuracy and
completeness of information that is issued by portfolio companies. In
particular, the Directors may not be aware of or take into account certain
events or circumstances which occur after the information issued by such
companies is reported.
As described in note 1 of the Financial Statements, the unquoted equity
investments, convertible loan stock and debt issued at a discount held by the
Company are designated at fair value through profit or loss and valued in
accordance with the International Private Equity and Venture Capital Valuation
Guidelines. These guidelines set out recommendations, intended to represent
current best practice on the valuation of venture capital investments. These
investments are valued on the basis of forward looking estimates and judgments
about the business itself, its market and the environment in which it operates,
together with the state of the mergers and acquisitions market, stock market
conditions and other factors. In making these judgments the valuation takes into
account all known material facts up to the date of approval of the Financial
Statements by the Board. The sensitivity of these assumptions is commented on
further in notes 10 and 19. All other unquoted loan stock is measured at
amortised cost.
4. 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 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 advisor. 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.
5. 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 the most senior
levels within quoted businesses. In addition, the Board and the Manager receive
regular updates on new regulation from its auditor, lawyers and other
professional bodies.
6. Internal control risk
Failures in key controls, within the Board or within the Manager's business,
could put assets of the Company at risk or result in reduced or inaccurate
information being passed to the Board or to shareholders.
The Audit and Risk Committee meets with the Manager's internal auditors,
Littlejohn LLP, when required, receiving a report regarding the last formal
internal audit performed on the Manager, and providing the opportunity for the
Audit and Risk Committee to ask specific and detailed questions. During the past
year the Chairman of the Audit and Risk Committee has met with the internal
audit partner of Littlejohn LLP to discuss the most recent internal audit report
completed on the Manager. The Manager has a comprehensive business continuity
plan in place in the event that operational continuity is threatened. Further
details regarding the Board's management and review of the Group's internal
controls through the implementation of the Turnbull guidance are detailed on
page 26 of the full 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.
7. Reliance upon third parties risk
The Group and 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 21 of the full 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.
8. 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 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 for speculative purposes.
24. Other information
The information set out in this announcement does not constitute the Company's
statutory accounts within the terms of section 434 of the Companies Act 2006 for
the years ended 30 June 2012 and 30 June 2011, and is derived from the statutory
accounts for those financial years, which have been, or in the case of the
accounts for the year ended 30 June 2012, which will be, delivered to the
Registrar of Companies. The Auditor reported on those accounts; the reports were
unqualified and did not contain a statement under s498 (2) or (3) of the
Companies Act 2006.
The Company's Annual General Meeting will be held at The City of London Club,
19 Old Broad Street, London, EC2N 1DS on 13 November 2012 at 11:00am.
25. Publication
The full audited Annual Report and Financial Statements are being sent to
shareholders and copies will be made available to the public at the registered
office of the Company, Companies House, the National Storage Mechanism and also
electronically at www.albion-ventures.co.uk under the 'Our Funds' section, by
clicking on 'Crown Place VCT PLC', where the Report can be accessed as a PDF
document via a link under the 'Investor Centre' in the 'Financial Reports and
Circulars' section.
Split of investment portfolio by sector:
http://hugin.info/141806/R/1646441/530629.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Crown Place VCT PLC via Thomson Reuters ONE
[HUG#1646441]
Albion Crown Vct (LSE:CRWN)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Albion Crown Vct (LSE:CRWN)
Historical Stock Chart
Von Jul 2023 bis Jul 2024
