Albion Venture Capital Trust PLC
Albion Venture Capital Trust PLC
Annual Report and Financial
Statements for the year
ended 31 March 2019
16 This report is printed on Amadeus offset a totally recycled paper
A member of the Association
of Investment Companies
produced using 100% recycled waste at a mill that has been
awarded the ISO 14001 certificate for environmental management.
The pulp is bleached using a totally chlorine free (TCF) process.
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254746 Albion Capital pp01-pp08.qxp 01/07/2019 16:42 Page 1
Contents
Page
2 Company information
3 Investment policy
3 Background to the Company
3 Financial calendar
4 Financial highlights
6 Chairman’s statement
9 Strategic report
17 The Board of Directors
18 The Manager
20 Portfolio of investments
22 Portfolio companies
27 Directors’ report
32 Statement of Directors’ responsibilities
33 Statement of corporate governance
38 Directors’ remuneration report
41 Independent Auditor’s report
47 Income statement
48 Balance sheet
49 Statement of changes in equity
50 Statement of cash flows
51 Notes to the Financial Statements
64 Notice of Annual General Meeting
68 Dividend history for C shares and Albion Prime
VCT PLC
Albion Venture Capital Trust PLC
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Company information
Company number 03142609
Directors Richard Glover, Chairman
John Kerr ACMA
Ann Berresford ACA
Ebbe Dinesen R (Danish) FSR
Jeff Warren ACCA
Country of incorporation United Kingdom
Legal form Public Limited Company
Manager, company secretary, Albion Capital Group LLP
AIFM and registered office 1 Benjamin Street
London, EC1M 5QL
Registrar Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol, BS99 6ZZ
Auditor BDO LLP
55 Baker Street
London, W1U 7EU
Taxation adviser Philip Hare & Associates LLP
1st Floor
4 Staple Inn
London, WC1V 7QH
Legal adviser Bird & Bird LLP
12 New Fetter Lane
London, EC4A 1JP
Depository Ocorian (UK) Limited
11 Old Jewry
London, EC2R 8DU
Albion Venture Capital Trust PLC is a member of The Association of Investment Companies (www.theaic.co.uk).
Shareholder information For help relating to dividend payments, shareholdings and share certificates please
Tel: 0370 873 5849 (UK National Rate call, lines are open 8.30am – 5.30pm; Mon – Fri,
contact Computershare Investor Services PLC:
Website: www.investorcentre.co.uk
Shareholders can access holdings and valuation information regarding any of their
shares held with Computershare by registering on Computershare’s website.
calls may be recorded)
Financial adviser information For enquiries relating to the performance of the Company, and information for
financial advisers, please contact Albion Capital Group LLP:
Email: info@albion.capital
Tel: 020 7601 1850 (lines are open 9.00am – 5.30pm; Mon – Fri; calls are recorded)
Website: www.albion.capital
Please note that these contacts are unable to provide financial or taxation
advice.
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Albion Venture Capital Trust PLC
254746 Albion Capital pp01-pp08.qxp 01/07/2019 16:42 Page 3
Investment policy
Albion Venture Capital Trust PLC (the “Company”) is a venture capital trust and the investment policy is intended to produce a regular
and predictable dividend stream with an appreciation in capital value.
Investment policy
The Company will invest in a broad portfolio of smaller, unquoted growth businesses across a variety of sectors including higher risk
technology companies. Investments may take the form of equity or a mixture of equity and loans.
Allocation of funds will be determined by the investment opportunities which become available but efforts will be made to ensure
that the portfolio is diversified both in terms of sector and stage of maturity of company. Funds held pending investment or for
liquidity purposes will be held as cash on deposit.
Risk diversification and maximum exposures
Risk is spread by investing in a number of different businesses within venture capital trust qualifying industry sectors. The maximum
amount which the Company will invest in a single portfolio company is 15 per cent. of the Company's assets at cost, thus ensuring
a spread of investment risk. The value of an individual investment may increase over time as a result of trading progress and it is
possible that it may grow in value to a point where it represents a significantly higher proportion of total assets prior to a realisation
opportunity being available.
Gearing
The Company's maximum exposure in relation to gearing is restricted to 10 per cent. of the adjusted share capital and reserves.
Background to the Company
The Company is a venture capital trust which raised a total of £39.7 million through an issue of Ordinary shares in the spring of 1996
and through an issue of C shares in the following year. The C shares merged with the Ordinary shares in 2001. The Company has raised
a further £34.8 million under the Albion VCTs Top Up Offers since 2011.
On 25 September 2012, the Company acquired the assets and liabilities of Albion Prime VCT PLC (“Prime”) in exchange for new shares
in the Company, resulting in a further £14.3 million of net assets.
Financial calendar
Record date for first dividend 12 July 2019
Payment of first dividend 31 July 2019
Annual General Meeting Noon on 21 August 2019
Announcement of half-yearly results for the six months ending 30 September 2019 December 2019
Payment of second dividend (subject to Board approval) 31 January 2020
Albion Venture Capital Trust PLC
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254746 Albion Capital pp01-pp08.qxp 01/07/2019 16:42 Page 4
Financial highlights
7.9p
5.0p
79.0p
Basic and diluted total return per share for
the year ended 31 March 2019
Total tax-free dividend per share paid during
the year ended 31 March 2019
Net asset value per share as at
31 March 2019
233.8p
Total shareholder return since launch to
31 March 2019
6.5%
Annualised return since launch (without
tax relief)
Total shareholder return relative to the
FTSE All-Share Index total return
(in both cases with dividends reinvested)
)
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Total shareholder return
FTSE All-Share Index total return
Source: Albion Capital Group LLP
Methodology: Total shareholder return, including original amount invested (rebased to 100) from launch, assuming that dividends were reinvested at net asset value
of the Company at the time the shares were quoted ex-dividend. Transaction costs are not taken into account.
4
Albion Venture Capital Trust PLC
254746 Albion Capital pp01-pp08.qxp 02/07/2019 10:28 Page 5
Financial highlights continued
31 March 2019 31 March 2018
(pence per share) (pence per share)
Opening net asset value 76.00 75.40
Revenue return 2.13 1.80
Capital return 5.73 3.70
Total return 7.86 5.50
Impact of fundraising/share buy backs 0.14 0.10
Dividends paid (5.00) (5.00)
Net asset value 79.00 76.00
Ordinary shares
Total shareholder return to 31 March 2019 (pence per share)
Total dividends paid during the year ended :
31 March 1997 2.00
31 March 1998 5.20
31 March 1999 11.05
31 March 2000 3.00
31 March 2001 8.55
31 March 2002 7.60
31 March 2003 7.70
31 March 2004 8.20
31 March 2005 9.75
31 March 2006 11.75
31 March 2007 10.00
31 March 2008 10.00
31 March 2009 10.00
31 March 2010 5.00
31 March 2011 5.00
31 March 2012 5.00
31 March 2013 5.00
31 March 2014 5.00
31 March 2015 5.00
31 March 2016 5.00
31 March 2017 5.00
31 March 2018 5.00
31 March 2019 5.00
Total dividends paid to 31 March 2019 154.80
Net asset value as at 31 March 2019 79.00
Total shareholder return to 31 March 2019 233.80
The financial summary above is for the Company, Albion Venture Capital Trust PLC Ordinary shares only. Details of the financial
performance of the C shares and Albion Prime VCT PLC, which have been merged into the Company, can be found on page 68.
In addition to the dividends summarised above, the Board has declared a first dividend for the year ending 31 March 2020 of
2.50 pence per share to be paid on 31 July 2019 to shareholders on the register on 12 July 2019.
Notes
• Dividends paid before 5 April 1999 were paid to qualifying shareholders inclusive of the associated tax credit. The dividends for the year to 31 March 1999 were
maximised in order to take advantage of this tax credit.
Albion Venture Capital Trust PLC
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254746 Albion Capital pp01-pp08.qxp 01/07/2019 16:42 Page 6
Chairman’s statement
Introduction
I am pleased to report that the results for the year to
31 March 2019 achieved a total return of 7.86 pence
per share, which is a 10.3% return on opening net
asset value per share. This is the fifth consecutive year
the Company’s return has exceeded the dividend paid
out of 5 pence per share per annum to shareholders.
Richard Glover
Chairman
‘
During the year
we made our
first seven
investments in
growth and
technology
businesses
’Albion Venture Capital Trust PLC
6
Change of investment policy
A material change to the Company’s
investment policy was voted on by
shareholders at the last Annual General
Meeting. The change in investment policy
was approved by shareholders with an
encouraging 99.5% of shares voted for
the resolution. The Company’s new
investment policy can be found on page 3.
The Company’s investment portfolio will
transition over time from an asset-based
one to a portfolio with a greater focus on
young growth companies. During the year
we made our first seven investments in
growth and technology businesses which
amounted to £1.7 million and now
represent a 3% holding in our portfolio.
This included investment in a developer of
software to improve decision making
through augmented analytics and
machine learning (Avora), an AI platform
that generates optimised marketing
campaigns (Phrasee), and a developer of
biopharmaceuticals
the
application software of a formulation
technology platform (Arecor).
through
Investment performance and progress
Healthcare continues to be the largest
sector in our portfolio, now representing
42%, which is a slight increase from last
year. This includes our three care homes;
Shinfield View, near Reading, Cumnor Hill
House on the outskirts of Oxford (owned
by Active Lives Care), and Ryefield Court in
Hillingdon, West London, which have been
continuing to build occupancy, leading to
further uplifts in valuation of £2.4 million.
Additionally, our Women’s health clinic
The Evewell (Harley Street) opened in the
autumn of 2018.
Our renewable energy investments are
now relatively mature and represent 18%
of the portfolio. We are pleased to report
that in light of the significant expansion
investment, Earnside
of our biogas
Energy, it was sold shortly after the year
end generating proceeds of £1.8 million
and a realised gain of 1.3 times cost
including
Infinite
Ventures (Goathill) was also sold during
the year generating proceeds of £0.6
million.
received.
interest
The boutique Stanwell Heathrow Hotel
was sold
in April 2019 generating
proceeds of £3.2 million, representing a
£1.8 million capital loss, although an uplift
of £1.4 million on sale for the current year.
The Holiday Inn Express at Stansted
Airport, owned by Kew Green VCT
(Stansted), returned £4.7 million of loan
stock and share premium to the Company
and is now our last remaining hotel in the
portfolio. These two hotels accounted for
9% of the portfolio at the year end.
In education, which now represents 9% of
the portfolio, Radnor House Twickenham is
close to maturity with over 400 pupils while
pupil numbers at Radnor House Sevenoaks
have been continuing to grow and are now
over 400. The number of applicants for 2019
is ahead of previous years and significant
work has been done to upgrade the
infrastructure and IT systems of the
school. Meanwhile, MHS 1’s investment in
Mount House School, an independent
254746 Albion Capital pp01-pp08.qxp 01/07/2019 16:42 Page 7
Chairman’s statement continued
secondary day school in Barnet, North
London, currently has 191 pupils and
there are now 20 boys in the school which
it onto the path of becoming
sets
co-educational.
With regards to other sectors, G.Network
Communications, a provider of fibre optic
broadband to businesses
in central
London, continues to expand generating
an uplift in valuation of £0.4 million and
Beddlestead, a start up wedding venue
business has developed its first location in
Wiltshire and opened in June 2019. Both
business services and pubs and other
leisure now each represent 5% of the
Company’s portfolio. Cash and cash
equivalents form the remaining 9%.
Further details of the portfolio and
disposals made during the year can be
found on pages 20 and 21.
Results and dividends
As at 31 March 2019, the net asset value
was £67.5 million or 79.00 pence per
share, compared to £65.8 million or 76.00
pence per share as at 31 March 2018,
after the payment of total tax-free
dividends of 5 pence per share. It is
encouraging that the Company’s total
return continues for the fifth year running
to exceed the dividend of 5 pence per
share.
The results comprised a total return of
7.86 pence per share for the year (2018:
5.50 pence per share), which is made up
of a 2.13 pence per share revenue return
(2018: 1.80 pence per share) and a 5.73
pence per share capital return (2018: 3.70
pence per share).
This increased return has been partly
through higher income generated by the
investment portfolio, which has risen
12.8% from the previous year. The
principal element, however, has come
from capital uplifts: in particular the uplift
in the third party valuations of our care
homes, together with a pleasing uplift in
the valuation of The Stanwell Hotel which
as explained above was sold shortly after
the year end.
In light of continued good progress, the
Company will pay a first dividend of 2.5
pence per share for the year ending
31 March 2020 on 31 July 2019 to
shareholders on the register on 12 July
2019, which is in line with the Company’s
current objective of paying a dividend of
5 pence per share annually. Thereafter, it
is intended that payment of the next
dividend will be made at the end of
January 2020.
New management performance
incentive
Accompanying this Annual Report and
Financial Statements is a Circular to
shareholders proposing two changes to
the management agreement with Albion
Capital Group LLP. The first is for the
introduction of a new management
in order to
incentive,
performance
recognise the changes that have taken
place in the financial and regulatory
environment over recent years. The
second is to reduce the Company’s
operating expenses by lowering the total
expenses cap, above which any additional
expenses are borne by the Manager.
These changes will be implemented by
way of a deed of variation of the
Company’s
existing management
agreement and full details of the changes
are set out in the Circular. These proposals
will be voted on by shareholders under an
ordinary resolution at a General Meeting
which will follow the forthcoming Annual
General Meeting.
Board composition
As highlighted in last year’s Chairman’s
statement – David Watkins retired from
the Board during the year after 22 years
as Chairman.
Ebbe Dinesen intends to retire on 1 August
2019 after over 6 years with the Company.
Prior to this he was a director of Albion
Prime VCT PLC for 4 years before the
companies merged. I would like to take
‘
total return of
7.86 pence per
share, which is a
10.3% return on
opening net
asset value
’
‘
the fifth
consecutive year
the Company’s
return has
exceeded the
dividend paid out
Albion Venture Capital Trust PLC
7
’
254746 Albion Capital pp01-pp08.qxp 01/07/2019 16:42 Page 8
Chairman’s statement continued
this opportunity to thank him for his excellent work and many
years of wise counsel and service.
resources to those sectors and opportunities where growth can
be both resilient and sustainable in order to mitigate these risks.
The Company’s investment risk is mitigated through a variety of
processes, including investing in a diversified portfolio in terms of
sector and stage of maturity and focusing on opportunities
where it is believed growth can be both resilient and sustainable.
A detailed analysis of the other risks and uncertainties facing the
business is shown in the Strategic report on pages 14 to 16.
Outlook and prospects
We are pleased with the performance of the Company’s existing
investment portfolio during the year under review. A number of
the businesses in the portfolio are nearing maturity and
consequently returns in the coming year are likely to be lower,
driven by income returns rather than capital growth. However, we
have now made our first investments in the growth and
technology sector where we see the opportunity to generate
shareholder value over time. We are therefore encouraged by the
pipeline of earlier stage growth and technology investments
currently being reviewed by the investment manager.
Richard Glover
Chairman
1 July 2019
Share buy-backs
It remains the Board’s primary objective to maintain sufficient
resources for investment in existing and new portfolio companies
and for the continued payment of dividends to shareholders.
Thereafter, it is still the Board’s policy to buy back shares in the
market, subject to the overall criterion that such purchases are in
the Company’s interest. The total value bought in for the year
was £1.3 million. Subject to the constraints referred to above and
subject to first purchasing shares held by the market maker, the
Board will target such buy-backs to be in the region of a 5%
discount to net asset value, so far as market conditions and
liquidity permit.
Albion VCTs Prospectus Top Up Offers
On 7 January 2019, the Company announced the launch of the
Albion VCTs Prospectus Top Up Offers 2018/19. The Company
was aiming to raise up to £8 million (including the £2 million
over-allotment facility) out of a target of £48 million in
aggregate that the Albion VCTs were seeking to raise.
On 5 March 2019, the Company was pleased to announce that it
had reached its £8 million limit under its Offer which was fully
subscribed and closed early. Details of shares allotted under the
Offer can be found in note 19.
Annual General Meeting
The Annual General Meeting of the Company will be held at The
Charterhouse, Charterhouse Square, London EC1M 6AN at noon
on 21 August 2019. Full details of the business to be conducted
at the Annual General Meeting are given in the Notice of the
Meeting on page 64. Please note that this is a new location for
the Annual General Meeting.
The Board welcomes your attendance at the meeting as it gives
an opportunity for shareholders to ask questions of the Board
and the Manager. If you are unable to attend the Annual General
Meeting in person, we would encourage you to make use of your
proxy votes.
Risks and uncertainties
Other than investment performance, the key risks facing the
Company are from the broader economy, including changes to
VCT rules. The outlook for the UK and global economies, and the
implications of the withdrawal of the UK from the European
Union continue to be the biggest risks for the Company.
An assessment has been done on a portfolio company level to
assess exposure to Europe, and appropriate actions, where
possible, have been implemented. The Manager continues to
believe that there is merit in focussing efforts to allocate
8
Albion Venture Capital Trust PLC
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Strategic report
Investment policy
The Company will invest in a broad portfolio of smaller, unquoted growth businesses across a variety of sectors including higher risk
technology companies. Investments may take the form of equity or a mixture of equity and loans.
Allocation of funds will be determined by the investment opportunities which become available but efforts will be made to ensure that
the portfolio is diversified both in terms of sector and stage of maturity of company. Funds held pending investment or for liquidity
purposes will be held as cash on deposit.
The full investment policy can be found on page 3.
Current portfolio analysis
The following pie charts show the split of the portfolio valuation as at 31 March 2019 by: sector; stage of investment; and number of
employees. Details of the principal investments made by the Company are shown in the Portfolio of investments on pages 20 and 21.
Portfolio analysis by sector
Growth and
technology
3% (0%)
Cash and cash
equivalents
9% (10%)
Business
services
5% (6%)
Hotels
9% (13%)
Pubs & other leisure
5% (3%)
Renewable energy
18% (19%)
Education
9% (9%)
Comparatives for 31 March 2018 are shown in brackets
Source: Albion Capital Group LLP
Healthcare
42% (40%)
Portfolio analysis by stage of investment
Portfolio analysis by number of employees
Early stage 10%
(revenue less
than £1 million)
Renewable
energy*
20%
Under 20
6%
21 - 50
16%
Sale up 31%
(revenue over
£5 million)
+100
10%
Growth 59%
(revenue between £1 million
and £5 million)
51 - 100
48%
Source: Albion Capital Group LLP Source: Albion Capital Group LLP
* Renewable energy investments have no employees
Albion Venture Capital Trust PLC
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Strategic report continued
Direction of portfolio
The change to the investment policy, approved by shareholders
at the Annual General Meeting in 2018, will result in asset-based
investments decreasing as a proportion of the portfolio, and a
greater emphasis given to growth and technology investments.
This has already started to show, given that growth and
technology investments now account for 3 per cent. of the
portfolio.The sector analysis of the Company’s investment
portfolio shows that healthcare now accounts for 42 per cent. of
the portfolio, compared to 40 per cent. at the end of the previous
financial year, mainly as a result of an uplift in valuations. Hotels
accounted for 9 per cent. compared to 13 per cent. at the
previous year end after the repayment of Kew Green VCT
(Stansted) loan stock and share premium of £4.7 million. This
decreased further after the year end due to the sale of The
Stanwell Hotel in April 2019.
Further details on portfolio companies can be found in the
Portfolio of investments on page 20.
Results and dividends
Ordinary shares
£’000
Net capital gain for the year
ended 31 March 2019
Net revenue return for the year
ended 31 March 2019
Total return for the year
ended 31 March 2019
Dividend of 2.50 pence
per share paid on 31 July 2018
Dividend of 2.50 pence per
share paid on 31 January 2019
Unclaimed dividends returned to the Company
Transferred to reserves
Net assets as at 31 March 2019
Net asset value as at 31 March 2019
(pence per share)
4,934
1,837
6,771
(2,160)
(2,140)
22
2,493
67,547
79.00
The Company paid dividends totalling 5.00 pence per share
during the year ended 31 March 2019 (2018: 5.00 pence per
share). The dividend objective of the Board is to provide
shareholders with a strong, predictable dividend flow, with a
dividend target of 5.00 pence per share per annum.
31 March 2020. This dividend will be paid on 31 July 2019 to
shareholders on the register on 12 July 2019.
income has
As shown in the Income statement on page 47, the Company’s
increased to £2,842,000 (2018:
investment
£2,520,000) and the total revenue return to equity holders also
increased to £1,837,000 (2018: £1,605,000). Income continues
to more than cover on-going expenses. In light of this, revenue
return per share has increased to 2.13 pence per share (2018:
1.80 pence per share). The capital gain on investments for the
year was £5,707,000
(2018: £3,930,000), offset by
management fees charged to capital and the related taxation
impact, resulting in a capital return of 5.73 pence per share
(2018: 3.70 pence per share). The total return was 7.86 pence
per share (2018: 5.50 pence per share).
The Balance sheet on page 48 shows that the net asset value has
increased over the last year to 79.00 pence per share (2018:
76.00 pence per share), reflecting the total return exceeding the
level of dividends paid during the year.
The cash flow for the Company has been a net outflow of
£557,000 for the year (2018: outflow of £3,734,000), reflecting
dividends paid, new investments in the year and the buy-back of
shares, offset by cash inflows from operations and disposal
proceeds.
Review of business and future changes
A review of the Company’s business during the year and
investment performance and progress is contained in the
Chairman’s statement on pages 6 and 7. The healthcare sector
performed particularly well again this year with an increase in
valuations of £2.4 million. Hotels had an uplift in valuation of
£1.8 million which was mainly due to The Stanwell Hotel, the sale
of which completed shortly after the year end. The education
sector saw an increase in valuation of £0.6 million as Radnor
House Sevenoaks boosted pupil numbers.
Details of significant events which have occurred since the end of
the financial year are listed in note 19. Details of transactions
with the Manager are shown in note 5.
Future prospects
During the year, shareholders approved a change to the
investment policy. In time, this will result in asset-based
investments decreasing as a proportion of the portfolio, and a
greater emphasis given to growth and technology investments.
This in turn is likely to result in a decline in investment income,
and thus the Company’s returns are likely to be more geared to
capital rather than revenue.
As noted in the Chairman’s statement, the Board has declared a
first dividend of 2.50 pence per share for the year ending
The Board believes that this model will meet the investment
objective and has the potential to deliver attractive returns to
10
Albion Venture Capital Trust PLC
254746 Albion Capital pp09-pp19.qxp 01/07/2019 16:42 Page 11
Strategic report continued
shareholders in the future. The Manager has a strong pipeline of investment opportunities in which the Company’s cash can be
deployed.
Key performance indicators
The Directors believe that the following key performance indicators, which are typical for venture capital trusts and used by the Board
in its assessment of the Company, will provide shareholders with sufficient information to assess how effectively the Company is
applying its investment policy to meet its objectives. The Directors are satisfied that the results shown in the following key performance
indicators give a good indication that the Company is achieving its investment policy. These are:
1. Total shareholder return relative to FTSE All Share Index total return
The graph on page 4 shows the Company’s total shareholder return against the FTSE All-Share Index total return, in both instances
with dividends reinvested.
2. Net asset value per share and total shareholder return
Net asset value per share and total shareholder return*
250
205.0 204.7
195.3 197.9 199.0 201.1
190.1 191.4
211.8
206.4
233.8
225.8
220.2
200
150
136.8
127.8
118.4
110.2
100
99.9
95.0
e
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191.3
183.7
171.9
159.2
148.5
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0
0
0
0
0
0
0
0
0
1
1
1
1
1
1
1
1
1
1
6
7
8
9
0
1
2
3
4
5
6
7
8
9
0
1
2
3
4
5
6
7
8
9
* Total shareholder return is net asset value plus cumulative dividends paid since launch.
Net asset value
Cumulative dividend
Net asset value increased by 3.9 per cent. (without adding back the 5.00 pence per share in dividends paid) to 79.00 pence per share
for the year ended 31 March 2019.
Total shareholder return increased by 8.00 pence per Ordinary share for the year ended 31 March 2019 (10.5 per cent. on opening net
asset value).
Albion Venture Capital Trust PLC
11
254746 Albion Capital pp09-pp19.qxp 01/07/2019 16:42 Page 12
Strategic report continued
3. Dividend distributions
175
150
125
100
75
50
25
e
r
a
h
s
r
e
p
e
c
n
e
P
18.8
11.0
5.0
0
Dividends paid
114.8
109.8
104.8
94.8
84.8
154.8
149.8
144.8
139.8
134.8
129.8
124.8
119.8
74.8
67.8
58.8
50.3
42.3
34.8
27.3
1
1
1
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
9
9
9
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
9
9
9
0
0
0
0
0
0
0
0
0
0
1
1
1
1
1
1
1
1
1
1
7
8
9
0
1
2
3
4
5
6
7
8
9
0
1
2
3
4
5
6
7
8
9
Dividends paid in the period
Cumulative dividend
Dividends paid in respect of the year ended 31 March 2019 were 5.00 pence per share (2018: 5.00 pence per share), in line with the
Board’s dividend objective. Cumulative dividends paid since inception amount to 154.80 pence per Ordinary share.
4. Ongoing charges
The ongoing charges ratio for the year ended 31 March 2019
was 2.4% (2018: 2.4%). The ongoing charges ratio has been
calculated using The Association of Investment Companies’
(“AIC”)
recommended methodology. This figure shows
shareholders the total recurring annual running expenses
(including investment management fees charged to capital
reserve) as a percentage of the average net assets attributable to
shareholders. From 1 April 2019, subject to the passing of the
resolution at the forthcoming General meeting, the ongoing
charges cap will reduce from 3.0% to 2.5%. Further details are
included in the Circular that has been sent to shareholders as well
as the Chairman’s statement.
5. VCT regulation
The investment policy is designed to ensure that the Company
continues to qualify and is approved as a VCT by HMRC. In order
to maintain its status under Venture Capital Trust legislation, a
VCT must comply on a continuing basis with the provisions of
Section 274 of the Income Tax Act 2007, details of which are
provided in the Directors’ report on page 28.
The relevant tests to measure compliance have been carried out
and independently reviewed for the year ended 31 March 2019.
These showed that the Company has complied with all tests and
continues to do so.
Gearing
As defined by the Articles of Association, the Company’s maximum
exposure in relation to gearing is restricted to 10 per cent. of the
adjusted share capital and reserves. The Directors do not currently
have any intention to utilise gearing for the Company.
Operational arrangements
The Company has delegated the investment management of
the portfolio to Albion Capital Group LLP, which is authorised and
regulated by the Financial Conduct Authority. Albion Capital
Group LLP also provides company secretarial and other
accounting and administrative support to the Company.
Management agreement
Under the Management agreement, the Manager provides
investment management, secretarial and administrative services
to the Company. The Management agreement can be
terminated by either party on 12 months’ notice. The
Management agreement is subject to earlier termination in the
event of certain breaches or on the insolvency of either party. The
Manager is paid an annual fee equal to 1.9 per cent. of the net
asset value of the Company, and an annual secretarial and
administrative fee of £52,000 (2018: £50,000) increased
annually by RPI. These fees are payable quarterly in arrears. Total
annual expenses, including the management fee, are limited to
3.0% (2.5% from 1 April 2019 subject to shareholder approval)
of the net asset value.
12
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Strategic report continued
In line with common practice, the Manager is also entitled to an
arrangement fee, payable by each new portfolio company, of
approximately 2 per cent. on each new investment made and
any applicable monitoring fees.
Management performance incentive
The Company’s current management performance incentive
structure sets a minimum target level whereby no performance
fee is payable to the Manager until the total return exceeds the
hurdle of 5 per cent. per annum from the 31 March 2004 net
asset value of 113.10 pence per share. Any shortfall of the target
return will be carried forward into subsequent periods and the
incentive fee will only be paid once all previous and current target
returns have been met. The Company will pay an incentive fee to
the Manager of an amount equal to 8 per cent. of the excess.
For the year to 31 March 2019, no incentive fee became due to
the Manager (2018: £nil).
No further performance fee will become due until the hurdle rate
comprising net asset value, plus dividends from 31 March 2004, has
been reached. As of 31 March 2019 the total return from 31 March
2004 amounted to 180.50 pence per share which compared to the
hurdle of 197.93 pence per share at that date.
New management performance incentive fee
The current management performance incentive fee was introduced
for the year ended 31 March 2004, with a hurdle of 5 per cent. per
annum from the starting net asset value of 113.10 pence per share.
Since this date a total of 101.50 pence per share in dividends has
been paid to shareholders, with an annualised return of 5 per cent.
per annum, however because the hurdle is linked to the opening net
asset value of 113.10 pence per share, the total return has fallen
short of the hurdle by 17.43 pence per share.
During the year, shareholders approved a change to the
Company’s investment policy to allow it to invest in a broader
range of businesses, including higher risk technology companies.
It is important that in a competitive environment for venture
capital professionals, the Manager is able to recruit and retain
quality investment staff.
In light of these factors, the Board have agreed with the
Manager that the current management performance incentive
arrangement will be amended so that the Manager is properly
incentivised and its objectives are more aligned with those of the
Company.
Accompanying these accounts is a Circular to shareholders
containing details of the new management performance
incentive which, subject to shareholder approval at the
forthcoming General Meeting by way of an ordinary resolution,
will replace the existing incentive fee arrangements.
Investment and co-investment
The Company co-invests with other venture capital trusts and
funds managed by Albion Capital Group LLP. Allocation of
investments is on the basis of an allocation agreement which is
based, inter alia, on the ratio of funds available for investment.
Evaluation of the Manager
The Board has evaluated the performance of the Manager based
on the returns generated by the Company, the continued
compliance under venture capital trust legislation, the long term
prospects of current investments, a review of the Management
agreement and the services provided therein, and benchmarking
the performance of the Manager to other service providers. The
Board believes that it is in the interests of shareholders as a
whole, and of the Company, to continue the appointment of the
Manager for the forthcoming year.
Alternative Investment Fund Managers Directive
(“AIFMD”)
The Board has appointed Albion Capital Group LLP as the
Company’s AIFM as required by the AIFMD. The Manager
became a full-scope Alternative Investment Fund Manager under
the AIFMD on 1 October 2018. As a result, from that date,
Ocorian (UK) Limited was appointed as Depository to oversee the
custody and cash arrangements and provide other AIFMD duties
with respect to the Company.
Social and community issues, employees and human rights
The Board recognises the requirement under section 414C of the
Companies Act 2006 (the “Act”) to detail information about social
and community issues, employees and human rights; including any
policies it has in relation to these matters and effectiveness of these
policies. As an externally managed investment company with no
employees, the Company has no policies in these matters and as
such these requirements do not apply.
General Data Protection Regulation
The General Data Protection Regulation (“GDPR”) was effective
from 25 May 2018 with the objective of unifying data privacy
requirements across the European Union. The Manager, Albion
Capital Group LLP, has taken action to ensure that the Manager
and the Company are compliant with the regulation.
Further policies
The Company has adopted a number of further policies relating to:
• Environment
• Global greenhouse gas emissions
• Anti-bribery
• Anti-facilitation of tax evasion
• Diversity
and these are set out in the Directors’ report on pages 28 and 29.
Albion Venture Capital Trust PLC
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Strategic report continued
Risk management
The Board carries out a robust assessment of principal risks in which the Company operates. The principal risks and uncertainties of
the Company as identified by the Board and how they are managed are as follows:
Risk Possible consequence Risk management
To reduce this risk, the Board places reliance upon the skills and
expertise of the Manager and its track record over many years of
making successful investments in this segment of the market. In
addition, the Manager operates a formal and structured
investment appraisal and review process, which includes an
Investment Committee, comprising investment professionals from
the Manager and at least one external investment professional.
The Manager also invites and takes account of comments from
non-executive Directors of the Company on matters discussed at
the Investment Committee meetings. Investments are actively
and regularly monitored by the Manager (investment managers
normally sit on portfolio company boards), including the level of
diversification in the portfolio, and the Board receives detailed
reports on each investment as part of the Manager’s report at
quarterly board meetings.
As described in note 2 of the Financial Statements, the
investments held by the Company are classified at fair value
through profit or loss and valued in accordance with the
International Private Equity and Venture Capital Valuation
Guidelines. These guidelines set out recommendations,
intended to represent current best practice on the valuation
of venture capital investments. These investments are valued
on the basis of forward looking estimates and judgements
about the business itself, its market and the environment in
which it operates, together with the state of the mergers and
acquisitions market, stock market conditions and other
factors. In making these judgements the valuation takes into
account all known material facts up to the date of approval of
the Financial Statements by the Board. The values of
investments are at cost or price of recent investment
(reviewed for impairment), net assets, offer price, or
supported by independent third party professional valuations.
To reduce this risk, the Board has appointed the Manager, which
has a team with significant experience in venture capital trust
management and are used to operating within the requirements
of the venture capital trust legislation. In addition, to provide
further formal reassurance, the Board has appointed Philip Hare
& Associates LLP as its taxation adviser, who report quarterly to
the Board to confirm independently compliance with the venture
capital trust legislation, to highlight areas of risk and to inform on
changes in legislation. Each investment in a new portfolio
company is also pre-cleared with our professional advisers or
H.M. Revenue & Customs.
Investment,
performance and
valuation risk
The risk of investment in poor quality
assets, which could reduce returns to
shareholders, and could negatively impact
on the Company’s current and future
valuations.
By nature, smaller unquoted businesses,
such as those that qualify for venture
capital trust purposes, are more volatile
than larger, long established businesses.
investment valuation
The Company’s
methodology is reliant on the accuracy
and completeness of information that is
issued by portfolio companies.
In
particular, the Directors may not be aware
of or take into account certain events or
circumstances which occur after the
information issued by such companies is
reported.
VCT approval risk
The Company must comply with section
274 of the Income Tax Act 2007 which
enables its investors to take advantage of
tax relief on their investment and on
future returns. Breach of any of the rules
enabling the Company to hold VCT status
could result in the loss of that status.
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Strategic report continued
Risk Possible consequence Risk management
Regulatory and
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
other
Standards
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.
and
Board members and the Manager have experience of operating
at senior levels within or advising quoted companies. In
addition, the Board and the Manager receive regular updates
on new regulation from its auditor, lawyers and other
professional bodies. The Company is subject to compliance
checks through the Manager’s compliance officer and any
issues arising from compliance or regulation are reported to its
own board on a monthly basis. These controls are also reviewed
as part of the quarterly Board meetings, and also as part of the
review work undertaken by the Manager’s compliance officer.
The report on controls is also evaluated by the internal auditors.
Operational and
internal control risk
The Company relies on a number of third
parties, in particular the Manager, for the
provision of investment management and
administrative functions. Failures in key
systems and
the
Manager’s business could place assets of
the Company at risk or result in reduced or
inaccurate information being passed to
the Board or to shareholders.
controls within
The Company and its operations are subject to a series of
rigorous internal controls and review procedures exercised
throughout the year, and receives reports from the Manager
on internal controls and risk management, including matters
relating to cyber security.
The Audit Committee reviews the Internal Audit Reports
prepared by the Manager’s internal auditors, PKF Littlejohn
LLP. On an annual basis, the Audit Committee Chairman
meets with the internal audit partner to provide an
opportunity to ask specific detailed questions in order to
satisfy itself that the Manager has strong systems and
controls in place including those in relation to business
continuity.
From 1 October 2018, Ocorian (UK) Limited was appointed as
Depository to oversee the custody and cash arrangements
and provide other AIFMD duties. The Board reviews the
quarterly reports prepared by Ocorian (UK) Limited to ensure
that Albion Capital is adhering to its duties as a full-scope
Alternative Investment Fund Manager under the AIFMD.
In addition, the Board regularly reviews the performance of
its key service providers, particularly the Manager, to ensure
they continue to have the necessary expertise and resources
to deliver the Company’s investment objective and policies.
The Manager and other service providers have also
demonstrated to the Board that there is no undue reliance
placed upon any one individual.
Economic and
political 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.
The Company invests in a diversified portfolio of companies
across a number of industry sectors and in addition often
invests a mixture of instruments in portfolio companies.
At any given time, the Company has sufficient cash resources
to meet its operating requirements, including share buy-backs
and follow on investments.
Albion Venture Capital Trust PLC
15
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Strategic report continued
Risk Possible consequence Risk management
The Company operates a share buyback policy, which is
designed to limit the discount at which the Ordinary shares
trade to around 5 per cent. to net asset value, by providing a
purchaser through the Company in absence of market
purchasers. From time to time buy-backs cannot be applied,
for example when the Company is subject to a close period, or
if it were to exhaust any buyback authorities.
New Ordinary shares are issued at sufficient premium to net
asset value to cover the costs of issue and to avoid asset value
dilution to existing investors.
Taking into account the processes for mitigating risks, monitoring
costs, share price discount, the Manager’s compliance with the
investment objective, policies and business model and the
balance of the portfolio the Directors have concluded that there
is a reasonable expectation that the Company will be able to
continue in operation and meet its liabilities as they fall due over
the three year period to 31 March 2022.
This Strategic report of the Company for the year ended 31
March 2019 has been prepared in accordance with the
requirements of section 414A of the Act. The purpose of this
report is to provide Shareholders with sufficient information to
enable them to assess the extent to which the Directors have
performed their duty to promote the success of the Company in
accordance with section 172 of the Act.
For and on behalf of the Board
Richard Glover
Chairman
1 July 2019
Market value of
Ordinary shares
The market value of Ordinary shares can
fluctuate. The market value of an Ordinary
share, as well as being affected by its net
asset value and prospective net asset
value, also takes into account its dividend
yield and prevailing interest rates. As such,
the market value of an Ordinary share
may vary considerably from its underlying
net asset value. The market prices of
shares in quoted investment companies
can, therefore, be at a discount or
premium to the net asset value at
different times, depending on supply and
demand, market conditions, general
investor sentiment and other factors.
Accordingly the market price of the
Ordinary shares may not fully reflect their
underlying net asset value.
Viability statement
In accordance with the FRC UK Corporate Governance Code
published in 2016 and principle 21 of the AIC Code of Corporate
Governance, the Directors have assessed the prospects of the
Company over three years to 31 March 2022. The Directors
believe that three years is a reasonable period in which they can
assess the future of the Company to continue to operate and
meet its liabilities as they fall due, and is also the period used by
the Board in the strategic planning process and is considered
reasonable for a business of our nature and size. The three year
period is considered the most appropriate given the forecasts
that the Board require from the Manager and the estimated
timelines for finding, assessing and completing investments.
The Directors have carried out a robust assessment of the
principal risks facing the Company as explained above, including
those that could threaten its business model, future performance,
solvency or liquidity. The Board also considered the risk
management processes in place to avoid or reduce the impact of
the underlying risks. The Board focused on the major factors
which affect the economic, regulatory and political environment.
The Board considered the role of the Manager and the processes
that it has in place for dealing with the principal risks.
The Board assessed the ability of the Company to raise finance
and deploy capital. The portfolio is geared towards long term
growth, delivering dividends and capital growth to shareholders.
In assessing the prospects of the Company the Directors have
considered the cash flow by looking at the Company’s income
and expenditure projections and funding pipeline over the
assessment period of three years and they appear realistic.
16
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The Board of Directors
The following are the Directors of the Company, all of whom operate in a non-executive capacity:
Richard Glover (appointed 8 November 2017), Chairman
Richard Glover spent 15 years in industrial relations and HR management roles in the 1970s and 1980s first with ICI and then with
Grand Metropolitan. Since 1990 he has been involved with two private equity backed businesses in the service sector: first in 1990 the
British School of Motoring (BSM), where, as MD and later CEO, he took the company through flotation and then sale to RAC; and in
2000, the accountancy training company ATC International, where he became the majority shareholder in 2003, running the business
in Eastern Europe until it was sold in 2011. He has also held a number of non-executive director positions in the service sector and
remains extensively involved with the Worshipful Company of Haberdashers and its education activities.
John Kerr ACMA (appointed 9 February 1996)
John Kerr has worked as a venture capitalist and also in manufacturing and service industries. He held a number of finance and general
management posts in the UK and USA, before joining SUMIT Equity Ventures, an independent Midlands based venture capital
company, where he was managing director from 1985 to 1992. He then became chief executive of Price & Pierce Limited, which acted
as the UK agent for overseas producers of forestry products, before leaving in 1997 to become finance director of Ambion Brick, a
building materials company bought out from Ibstock PLC. After retiring in 2002, he now works as a consultant. He is an external
member of the Manager’s investment committee.
Ann Berresford Bsc (Hons), ACA (appointed 8 November 2017)
Ann Berresford is a chartered accountant with a background in the financial services and energy sectors. She holds a degree in Organic
Chemistry and trained as an accountant with Grant Thornton, qualifying in 1984. She moved into industry in 1985 and worked in
financial management and treasury for the British independent oil exploration and production company Clyde Petroleum plc in both
the UK and in The Netherlands. In 1998, following the takeover of Clyde Petroleum plc, she moved into financial services and joined
Bristol & West plc which had just become part of the Bank of Ireland Group. She progressed from financial controller of Bristol & West
plc to finance director of the Bank of Ireland’s UK network and left in 2006. Since then, she has had a number of non-executive roles,
including positions at Bath Building Society, the Pensions Protection Fund, Triodos Renewables plc, Hyperion Insurance Group and the
Pensions Regulator. She is currently a non-executive director of Secure Trust Bank plc.
Ebbe Dinesen R (Danish) FSR (appointed 26 September 2012)
Ebbe Dinesen qualified as a chartered accountant in Denmark before working in senior positions in Danish industry. In 1985 he came
to the United Kingdom and became CEO of Carlsberg UK in 1987. He later became CEO of Carlsberg-Tetley PLC (now Carlsberg UK)
and became executive chairman of that company in 2001. He stepped down in 2006. He was chairman of the British Brewers from
2002 to 2006 and was Danish vice-consul for The Midlands from 1987 to 2006. In 2000 he was knighted by the Queen of Denmark.
Ebbe Dinesen intends to retire on 1 August 2019 after over 6 years with the Company.
Jeff Warren ACCA (appointed 2 October 2007)
Jeff Warren has 30 years’ financial management experience, including high level corporate governance and regulatory environment
experience. In 1992 he resigned as finance director of Mountleigh Group PLC, which was subsequently placed into administration, and
joined Bristol & West Building Society as CFO. Following the acquisition of Bristol & West by Bank of Ireland, he continued as finance
director until he was promoted to CEO of Bristol & West PLC in 1999, and subsequently also took responsibility for the Bank of Ireland
UK Branch network. In 2003 he moved to take on a role at Group level in Dublin, as group chief development officer, reporting to the
Bank of Ireland CEO. In 2004 he returned to the UK and has since held a number of non-executive roles.
All Directors are members of the Audit Committee and John Kerr is Chairman.
All Directors are members of the Nomination Committee and Richard Glover is Chairman.
All Directors are members of the Remuneration Committee and Jeff Warren is Chairman.
Albion Venture Capital Trust PLC
17
254746 Albion Capital pp09-pp19.qxp 01/07/2019 16:42 Page 18
The Manager
Albion Capital Group LLP is authorised and regulated by the Financial Conduct Authority and is the Manager of Albion Venture Capital
Trust PLC. In addition, it manages a further five venture capital trusts, the UCL Technology Fund and provides administration services
to Albion Community Power Limited and Albion Care Communities Limited. Albion Capital, together with its subsidiary OLIM
Investment Managers, has total assets under management or administration of approximately £1 billion. Albion Capital has recently
won two awards: Investor Allstars Venture Capital Trust of the Year 2018 and Growth Investor of the Year 2018.
The following are specifically responsible for the management and administration of the venture capital trusts managed by
Albion Capital:
Will Fraser-Allen BA (Hons), FCA, is currently the managing partner of Albion Capital. He has 16 years’ experience investing in
healthcare, leisure, media and technology enabled businesses. He joined Albion Capital in 2001, became deputy managing partner in
2009 and managing partner in 2019. Prior to joining Albion, Will qualified as a chartered accountant with Cooper Lancaster Brewers
and has a BA in History from Southampton University.
Patrick Reeve MA, FCA, was formerly the managing partner of Albion Capital and became chairman on 1 April 2019. He is a director
of Albion Development VCT, Albion Technology and General VCT and Albion Enterprise VCT, and is chief executive of Albion
Community Power Limited and chairman of OLIM Investment Managers. He is also a member of the Audit Committee of University
College London, and a director of the Association of Investment Companies. Patrick joined Close Brothers Group plc in 1989, working
both in the development of capital and corporate finance divisions before establishing Albion Capital (formerly Albion Ventures LLP)
in 1996. Prior to Close he qualified as a chartered accountant before joining Cazenove & Co where he spent three years in the corporate
finance department. Patrick has an MA in Modern Languages from Oxford University.
Dr. Andrew Elder MA, FRCS, is head of healthcare investing and deputy managing partner of Albion Capital. He joined Albion Capital
in 2005 and became a partner in 2009. Prior to Albion, Andrew was a strategy consultant specialising in healthcare at the Boston
Consulting Group. He graduated with an MA plus Bachelors of Medicine and Surgery from Cambridge University and practised as a
surgeon for six years specialising in neurosurgery. He is a Fellow of the Royal College of Surgeons (England).
Adam Chirkowski MA (Hons), is an investment director at Albion Capital, currently concentrating on renewable energy projects,
healthcare and investments in the asset-based portfolio. Prior to joining Albion Capital in 2013, Adam spent five years at Rothschild,
having graduated from Nottingham University with a first class degree in Industrial Economics and a Masters in Corporate Strategy
and Governance.
Emil Gigov BA (Hons), FCA, is a partner of Albion Capital with over 20 years’ experience as an adviser and investor in a number of
industry sectors, including technology, media, engineering, healthcare, education and leisure. In his early career Emil worked on
acquisitions, disposals and fundraising mandates at KPMG Corporate Finance, having joined their financial services division and
qualified as a chartered accountant in 1997. Emil graduated from the European Business School, London, with a BA (Hons) Degree in
European Business Administration.
David Gudgin BSc (Hons), ACMA, is a partner of Albion Capital specialising in renewable energy projects and investments in the
asset-based portfolio. He is also managing director of Albion Community Power Limited and a director of Albion Care Communities
Limited. David joined Albion Capital in 2005 and became partner in 2009. Prior to Albion, he was the lead investor of an environmental
technology and a later stage development capital fund at Foursome Investments (now Frog Capital). Before Frog Capital he joined 3i
plc as an investor in European technology based in London and Amsterdam, having previously qualified as a management accountant
with ICL before spending 3 years at the BBC. David has a BSc in Economics from Warwick University.
Vikash Hansrani BA (Hons), FCA, is the operations partner of Albion Capital. Vikash oversees the finance and administration of the
funds under Albion’s management and is also finance director of OLIM Investment Managers and is on the AIC’s VCT Technical
Committee. He was previously the finance director of Albion Community Power Limited. He joined Albion Capital in 2010, having
qualified as a chartered accountant with RSM working latterly in its corporate finance team, and became a partner in 2017. He has a
BA in Accountancy & Finance from Nottingham Business School.
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The Manager continued
Ed Lascelles BA (Hons), is a partner at Albion Capital and is head of technology investing. Ed joined Albion in 2004 and became a
partner in 2009. He began his career advising public companies on fundraisings and takeovers, first with Charterhouse Securities and
then ING Barings, covering the healthcare and technology sectors among others. He graduated from University College London with
a first class honours degree in Philosophy.
Catriona McDonald BA (Hons), is an investment associate at Albion Capital specialising in technology investing. Cat joined Albion
Capital in 2018. Prior to joining Albion Capital, she worked for Goldman Sachs in both New York and London where she executed several
high profile transactions including leveraged buyouts, IPOs and M&A. Cat graduated from Harvard University, majoring in Economics.
Dr. Christoph Ruedig MBA, is a partner at Albion Capital specialising in healthcare investing. Christoph joined Albion Capital in
2011 and became a partner in 2014. Prior to joining Albion, he worked at General Electric UK, where he was responsible for
mergers and acquisitions in the medical technology and healthcare IT sectors, following a role in the healthcare venture capital
arm of 3i plc where he led investments in biotechnology, pharmaceuticals, and medical technology. Christoph initially practised
as a radiologist before spending 3 years at Bain & Company. He holds a degree in medicine from Ludwig-Maximilians University,
Munich and an MBA from INSEAD.
Nadine Torbey MSc, BEng, is an investment associate at Albion Capital specialising in technology investing. Nadine joined Albion in
2018 from Berytech Fund, Beirut, one of the first VC funds in the Middle East. Her career to date has involved many aspects of tech
investing including experience in a wide variety of digital platforms, big data management, virtual reality and digital networks. She
graduated from the American University of Beirut with a Bachelor in Electrical and Computer Engineering, and followed this with an
MSc in Innovation Management and Entrepreneurship from Brown University.
Robert Whitby-Smith BA (Hons), FCA, is a partner at Albion Capital specialising in software investing. Robert joined Albion Capital
in 2005 and became a partner in 2009. Previously Robert worked in corporate finance for Credit Suisse, KPMG and ING Barings, after
qualifying as a chartered accountant.
Jay Wilson MBA, MMath, is an investment manager at Albion Capital specialising in technology investing. Jay joined Albion in 2019
from Bain & Company, where he had been a consultant since 2016 advising private equity and sovereign wealth funds on acquisitions
of European technology, financial and business services companies. Prior to this he graduated from London Business School with an
MBA having spent eight years as a broker at ICAP Securities.
Marco Yu MPhil, MA, MRICS, is an investment director at Albion Capital specialising in alternative energy investing and the asset-
based portfolio. Marco joined Albion in 2007. Prior to Albion, he was with EC Harris where he advised senior lenders on large capital
projects, having spent two and a half years at Bouygues (UK). Marco graduated from Cambridge University with a first class honours
degree in Economics and is a Chartered Surveyor.
WINNER
GROWTH
INVESTOR
OF THE YEAR
Venture Capital Trust
of the Year
Albion Venture Capital Trust PLC
19
254746 Albion Capital pp20-pp26.qxp 01/07/2019 16:41 Page 20
Portfolio of investments
As at 31 March 2019 As at 31 March 2018
% voting Change
rights held Cumulative Cumulative in value
by all Albion* movement movement for the
% voting managed Cost** in value Value Cost** in value Value year***
Portfolio company rights companies £’000 £’000 £’000 £’000 £’000 £’000 £’000
Shinfield Lodge Care Limited 35.3 50.0 6,425 6,263 12,688 6,425 5,026 11,451 1,237
Active Lives Care Limited 22.2 50.0 4,810 3,519 8,329 4,810 2,648 7,458 871
Ryefield Court Care Limited 23.6 50.0 3,880 2,976 6,856 3,880 2,662 6,542 314
Radnor House School (Holdings) Limited 7.1 50.0 2,281 3,041 5,322 2,345 2,441 4,786 600
Chonais River Hydro Limited 9.2 50.0 3,074 1,316 4,390 3,074 1,316 4,390 –
The Stanwell Hotel Limited 39.2 50.0 5,069 (1,787) 3,282 5,069 (3,189) 1,880 1,402
Kew Green VCT (Stansted) Limited 45.2 50.0 1,234 1,434 2,668 5,910 1,063 6,973 370
Earnside Energy Limited 9.5 50.0 1,531 282 1,813 1,531 88 1,619 194
Gharagain River Hydro Limited 11.5 50.0 1,363 417 1,780 1,363 428 1,791 (11)
G. Network Communications Limited 3.9 25.7 710 826 1,536 710 426 1,136 400
Bravo Inns II Limited 6.4 50.0 1,085 359 1,444 1,085 262 1,347 97
The Street by Street Solar
Programme Limited 6.5 50.0 675 508 1,184 675 463 1,138 46
Beddlestead Limited 9.1 49.0 1,142 2 1,144 956 – 956 2
Alto Prodotto Wind Limited 7.4 50.0 626 442 1,068 660 454 1,114 (3)
MHS 1 Limited 14.8 50.0 1,026 (3) 1,023 1,026 (5) 1,021 2
TWCL Limited 14.3 50.0 801 32 833 801 (2) 799 34
The Evewell (Harley Street) Limited
(Previously Women’s Health (London
West One) Limited) 6.0 40.0 750 – 750 750 – 750 –
Avora Limited 4.7 18.7 750 – 750 – – – –
Regenerco Renewable Energy Limited 4.5 50.0 451 287 738 451 232 683 55
Bravo Inns Limited 7.6 50.0 751 (138) 613 751 (173) 578 35
Erin Solar Limited 18.6 50.0 520 (20) 500 520 (23) 497 3
Dragon Hydro Limited 7.3 30.0 301 172 473 311 187 498 (15)
AVESI Limited 7.4 50.0 242 111 353 242 99 341 12
Harvest AD Limited – – 307 21 328 307 4 311 17
Phrasee Limited 1.5 11.0 310 – 310 – – – –
G&K Smart Developments VCT Limited 50.0 50.0 276 (1) 275 276 (11) 265 10
Greenenerco Limited 3.9 50.0 124 86 209 129 86 215 2
Premier Leisure (Suffolk) Limited 9.9 47.4 175 20 195 175 25 200 (5)
Arecor Limited 1.0 7.4 180 – 180 – – – –
Forward Clinical Limited 1.2 9.2 130 – 130 – – – –
uMotif Limited 0.7 6.2 120 – 120 – – – –
ePatient Network Limited (T/A Raremark) 1.2 8.4 110 – 110 – – – –
Healios Limited 0.7 5.2 65 – 65 – – – –
Total fixed asset investments 41,294 20,165 61,459 44,232 14,507 58,739 5,669
* Albion Capital Group LLP
** The cost includes the original cost from Albion Venture Capital Trust PLC and the carried over value on merger from Albion Prime VCT PLC as at 25 September 2012.
*** As adjusted for additions and disposals during the year.
The comparative cost and valuations for 31 March 2018 do not agree to the Annual Report and Financial Statements for the year ended
31 March 2018 as the above list does not include brought forward investments that were fully disposed of in the year.
20
Albion Venture Capital Trust PLC
254746 Albion Capital pp20-pp26.qxp 01/07/2019 16:41 Page 21
Portfolio of investments continued
(Loss)
Opening Total /Gain on
carrying Disposal realised opening
Fixed asset investment realisations during the year ended Cost* value proceeds gain value
31 March 2019 £’000 £’000 £’000 £’000 £’000
Disposals:
Infinite Ventures (Goathill) Limited 480 712 634 154 (78)
Loan stock repayments:
Kew Green VCT (Stansted) Limited 4,676 4,676 4,676 – –
Radnor House School (Holdings) Limited 64 64 64 – –
Alto Prodotto Wind Limited 32 42 42 10 –
Dragon Hydro Limited 11 11 11 – –
Greenenerco Limited 6 8 8 2 –
Escrow adjustments** – – 3 3 3
Total realisations 5,269 5,513 5,438 169 (75)
*The cost includes the original cost from Albion Venture Capital Trust PLC and the carried over value on merger from Albion Prime VCT PLC as at 25 September 2012.
** Fair value movements on deferred consideration from previously disposed investments.
Total change in value of investments for the year 5,669
Movement in loan stock accrued interest 113
Unrealised gains sub-total 5,782
Realised loss in current year (75)
Total gains on investments as per Income statement 5,707
Albion Venture Capital Trust PLC
21
254746 Albion Capital pp20-pp26.qxp 01/07/2019 16:41 Page 22
Portfolio companies
Geographical locations
Portfolio of 33 companies
employing over 700 people
predominantly in the
United Kingdom.
5
9
8
10
3
6
4
4
2
7
1
9 renewable energy
companies generating
approximately 27GWh
per annum, capable of
powering 8,000 typical
households.
Healthcare
Renewable energy
Hotels
Education
Business services
Pubs and other leisure
Growth and technology
Numbers indicate top 10
investments by value
22
Albion Venture Capital Trust PLC
254746 Albion Capital pp20-pp26.qxp 01/07/2019 16:41 Page 23
Portfolio companies continued
The top ten investments by value are below.
1. Shinfield Lodge Care Limited
The company operates a 66 bed, purpose built residential care home in Shinfield near Reading, Berkshire. The home
provides residential and dementia care to elderly residents and attracts fees in line with the high end, private pay
market it targets. Promoting social interaction and offering a wide range of activities are at the core of the care
philosophy. The home was recently voted one of the Top 20 care homes in the South East of England. The home
trades at mature occupancy.
Website: www.shinfieldview.com
Filleted audited results: year to 31 December 2017
£’000
Investment information
Net liabilities
Basis of valuation:
(223)
Third party valuation – earnings multiple
Income recognised in the year
Total cost
Total valuation
Voting rights
Voting rights for all Albion managed companies
£’000
770
6,425
12,688
35.3 per cent.
50.0 per cent.
Website: www.cumnorhillhouse.com
2. Active Lives Care Limited
The company operates a 75 bed, purpose built residential care home in Cumnor Hill, Oxford. The home provides
nursing, residential and dementia care to elderly residents and attracts fees in line with the high end, private pay
market it targets. Promoting social interaction and offering a wide range of activities are at the core of the care
philosophy. Occupancy continues to grow as the home nears maturity. In June 2018 the home was rated
“Outstanding” by CQC, the regulatory body, which places it among the top 1% of care homes in London and the
South East.
Filleted audited results: year to 31 December 2017
£’000
Investment information
Net liabilities
Basis of valuation:
(1,414)
Third party valuation – earnings multiple
Income recognised in the year
Total cost
Total valuation
Voting rights
Voting rights for all Albion
managed companies
£’000
601
4,810
8,329
22.2 per cent.
50.0 per cent.
Albion Venture Capital Trust PLC
23
254746 Albion Capital pp20-pp26.qxp 01/07/2019 16:41 Page 24
Portfolio companies continued
3. Ryefield Court Care Limited
The company operates a 60 bed, purpose built residential care home in Hillingdon, London. The home provides
residential and dementia care to elderly residents and attracts fees in line with the high end, private pay market it
targets. Promoting social interaction and offering a wide range of activities are at the core of the care philosophy. In
2017 the home was among the top 1% of care homes in London and the South East. Separately, the home was
recently voted one of the Top 20 care homes in London. The home is trading at mature levels.
Website: www.ryefieldcourt.com
Filleted audited results: year to 30 April 2018
£’000
Investment information
Net liabilities
Basis of valuation:
(1,381)
Third party valuation - earnings multiple
Income recognised in the year
Total cost
Total valuation
Voting rights
Voting rights for all Albion managed companies
£’000
478
3,880
6,856
23.6 per cent.
50.0 per cent.
Website: www.radnorhouse.org
4. Radnor House School (Holdings)
Limited
Radnor House operates two independent schools in
Twickenham and Sevenoaks. The Twickenham
school is now well established and trades at mature
levels. The school in Sevenoaks, which was acquired
in 2015, is growing strongly. Both schools aim to
deliver a personalised education experience to each
student. The curriculum and co-curricular activities
are designed to give each child a wide range of
academic and other skills and prepare them for a
dynamic and rapidly changing world.
Audited results: year to
31 August 2018
£’000
Investment information
£’000
Turnover
EBITDA
Profit before tax
Net assets
Basis of valuation:
12,952
2,194
40
37,636
Income recognised in the year
Total cost
Total valuation
Voting rights
Third Voting rights
for all Albion
255
2,281
5,322
7.1 per cent.
party valuation –
earnings multiple managed companies
50.0 per cent.
24
Albion Venture Capital Trust PLC
5. Chonais River Hydro Limited
Chonais River Hydro is a 2MW hydropower scheme
near Loch Carron in the Scottish Highlands. It is a
run-of-river scheme, taking water from a small river
via an intake on the mountainside. The scheme is
low visual impact with the only visible components
being a small intake and a powerhouse, both of
which are built using local material. It generates
enough electricity to power about 2,000 homes. It
benefits from inflation-protected renewable
subsidies for a period of 20 years. The scheme was
commissioned in 2014 and has been generating
successfully since.
Filleted audited
results: year to
30 September 2017 £’000
Investment information
£’000
Net liabilities
Basis of valuation:
(57)
Third
party valuation –
Income recognised in the year
Total cost
Total valuation
discounted cash flow Voting rights
Voting rights
for all Albion managed
companies
276
3,074
4,390
9.2 per cent.
50.0 per cent.
254746 Albion Capital pp20-pp26.qxp 01/07/2019 16:41 Page 25
Portfolio companies continued
6. The Stanwell Hotel Limited
The company owned and operated The
Stanwell Heathrow Hotel, a four star boutique
hotel in the village of Stanwell, just south of
Heathrow Airport. The company acquired the
freehold property when it had 19 bedrooms
and undertook an extensive redevelopment,
enlarging the hotel to 52 bedrooms. The hotel
was sold in April 2019.
Website: www.thestanwell.com
Filleted audited results:
year to 31 August 2018
Net assets
Basis of valuation:
£’000
Investment information
3,546
Offer price
Income recognised in the year
Total cost
Total valuation
Voting rights
Voting rights for all Albion managed companies
£’000
–
5,069
3,282
39.2 per cent.
50.0 per cent.
7. Kew Green VCT (Stansted) Limited
The company developed and operates the
Holiday Inn Express hotel at London Stansted
Airport under a 125 year lease and a 25 year
franchise agreement. The hotel opened with
183 bedrooms in January 2005 and expanded
to 254 bedrooms in July 2007. In June 2018
the company was refinanced with bank debt,
enabling the remaining loan stock and the share
premium originally paid by investors to be
repaid, and a substantial refurbishment to the
latest brand standards took place over the
course of 2018.
Audited results:
year to 31 August 2018
Turnover
EBITDA
Profit before tax
Net assets
Basis of valuation:
£’000
Investment information
5,395
1,375
680
3,573
Third party valuation – earnings multiple
Income recognised in the year
Total cost
Total valuation
Voting rights
Voting rights for all Albion
managed or advised companies
£’000
53
1,234
2,668
45.2 per cent.
50.0 per cent.
Website: www.expressstanstedairport.co.uk
Albion Venture Capital Trust PLC
25
254746 Albion Capital pp20-pp26.qxp 01/07/2019 16:41 Page 26
Portfolio companies continued
Website: www.earnsideenergy.com
8. Earnside Energy Limited
Earnside Energy owns and operates an anaerobic
digestion (“AD”) plant and composting facility in
Perthshire in Scotland. The AD plant, which was
expanded in 2017, turns waste food into electricity
and produces digestate for use as an agricultural
fertiliser, while the composting facility produces
compost from co-mingled food and garden waste.
The combined facility is capable of processing c.
75,000 tonnes of waste per annum. The company
was sold in April 2019.
Audited results:
year to
31 December 2017 £’000
2,803
Turnover
158
EBITDA
(1,080)
Loss before tax
Net liabilities
(101)
Basis of valuation: Offer price
Investment information
£’000
Income recognised in the year
Total cost
Total valuation
Voting rights
Voting rights of all Albion
managed companies
-
1,531
1,813
9.5 per cent.
50.0 per cent.
9. Gharagain River Hydro Limited
Gharagain River Hydro is a 1MW hydropower scheme near Loch Carron in the Scottish Highlands, about 3 miles
from Chonais Hydro. It is a run-of-river scheme with the same design as Chonais Hydro. It generates enough
electricity to power about 1,000 homes. It benefits from inflation-protected renewable subsidies for a period of
20 years. The scheme was commissioned in 2014 and has been generating successfully since.
Filleted audited results:
year to 30 September 2017
£’000
Investment information
Net assets
Basis of valuation:
194
Third party valuation – discounted cash flow
Income recognised in the year
Total cost
Total valuation
Voting rights
Voting rights for all Albion managed companies
£’000
119
1,363
1,780
11.5 per cent.
50.0 per cent.
10. G. Network Communications
Limited
G.Network is a fibre optic broadband provider
focused on the provision of fibre broadband to
SMEs in central London. Albion funds invested
£4.7 million in total in 2017. The Company was
founded in 2016. The Albion funds have been used
to ramp up the build out of street units, as well as
building the team, predominantly a dedicated sales
and marketing team to sign up customers.
Filleted audited results:
year to
31 March 2018
Investment information
£’000
£’000
(381)
Net liabilities
Basis of valuation: Cost and
price of recent investment
(reviewed for impairment or
uplift)
Income recognised in the year
Total cost
Valuation
Voting rights
Voting rights for
all Albion managed
companies
–
710
1,536
3.9 per cent.
25.7 per cent.
26
Albion Venture Capital Trust PLC
Website: www.g.network
254746 Albion Capital pp27-pp40.qxp 01/07/2019 16:41 Page 27
Directors’ report
The Directors submit their Annual Report and the audited
Financial Statements on the affairs of Albion Venture Capital
Trust PLC (the “Company”) for the year ended 31 March 2019.
The Statement of corporate governance on pages 33 to 37 forms
a part of the Directors’ report.
BUSINESS REVIEW
Principal activity and status
The principal activity of the Company is that of a venture capital
trust. It has been approved by H.M. Revenue & Customs
(“HMRC”) as a venture capital trust in accordance with the
Income Tax Act 2007 and, in the opinion of the Directors, the
Company has conducted its affairs so as to enable it to continue
to obtain such approval. In order to maintain its status under
Venture Capital Trust legislation, a VCT must comply on a
continuing basis with the provisions of Section 274 of the
Income Tax Act 2007 and further details of this can be found on
page 28 of this Directors’ report.
The Company is not a close company for taxation purposes and
its shares are premium listed on the official list of the London
Stock Exchange.
Under current tax legislation, shares in the Company provide tax-
free capital growth and income distribution, in addition to the
income and capital gains tax relief some investors would have
obtained when they invested in the original share offers.
Capital structure
Details of the issued share capital, together with details of the
movements in the Company’s issued share capital during the
year are shown in note 15. The Ordinary shares are designed for
individuals who are seeking, over the long term, investment
exposure to a diversified portfolio of unquoted investments. The
investments are spread over a number of sectors, to produce a
regular and predictable source of income, combined with the
prospect of longer term capital growth.
All Ordinary shares (except for treasury shares, which have no
right to dividend or voting rights) rank pari passu for voting rights
and each Ordinary share is entitled to one vote. There are no
restrictions on the transfer of shares or on voting rights.
Shareholders are entitled to receive dividends and the return of
capital on winding up or other return of capital based on the
surpluses attributable to the shares.
Issue and buy-back of Ordinary shares
During the year the Company issued a total of 775,061 Ordinary
shares (2018: 820,796) under the Company’s Dividend
Reinvestment Scheme, further details can be found in note 15.
No shares were issued under the Albion VCTs Top Up Offers
(2018: 365,978).
Your Board, in conjunction with the boards of the other VCTs
managed by Albion Capital Group LLP, launched a prospectus top
up offer of new Ordinary shares on 7 January 2019. On 5 March
2019, the Company was pleased to announce that it had
reached its £8 million limit under its Offer which was fully
subscribed and closed early. All shares under the offer were issued
after the year end and further details can be in note 19. The
proceeds will be used to provide further resources at a time when
a number of attractive investment opportunities are being seen.
The Company operates a policy of buying back shares either for
cancellation or for holding in treasury. Details regarding the
current buy-back policy can be found on page 8 of the
Chairman’s statement and details of share buybacks during the
year can be found in note 15.
Substantial interests and shareholder profile
As at 31 March 2019 and at the date of this Report, the
Company was not aware of any shareholder who had a
beneficial interest exceeding 3 per cent. of voting rights. There
have been no disclosures in accordance with Disclosure Guidance
and Transparency Rule 5 made to the Company during the year
ended 31 March 2019, and to the date of this Report.
Future developments of the business
Details on the future developments of the business can be found
on page 8 of the Chairman’s statement and on page 10 of the
Strategic report.
Results and dividends
Detailed information on the results and dividends for the year
ended 31 March 2019 can be found in the Strategic report on
page 10.
Going concern
In accordance with the Guidance on Risk Management, Internal
Control and Related Financial and Business Reporting issued by
the Financial Reporting Council in September 2014, the Board
has assessed the Company’s operation as a going concern. The
Company has significant cash and liquid resources and the major
cash outflows of the Company (namely investments, buy-backs
and dividends) are within the Company’s control. Accordingly,
after making diligent enquiries the Directors have a reasonable
expectation that the Company has adequate resources to
continue in operational existence over a period of at least twelve
months from the date of approval of the Financial Statements.
After accounting for investments available for disposal and
current fundraising the Company has adequate cash resources.
For this reason, the Directors have adopted the going concern
basis in preparing the accounts.
The Board’s assessment of liquidity risk and details of the
Company’s policies for managing its capital and financial risks
Albion Venture Capital Trust PLC
27
254746 Albion Capital pp27-pp40.qxp 01/07/2019 16:41 Page 28
Directors’ report continued
are shown in note 17. The Company’s business activities,
together with details of its performance are shown in the
Strategic report and this Directors’ report.
nor more than £12 million in total (the limits are £10
million and £20 million respectively for a “knowledge
intensive” company);
Post balance sheet events
Details of events that have occurred since 31 March 2019 are
shown in note 19.
Principal risks and uncertainties
A summary of the principal risks faced by the Company is set out
on pages 14 to 16 of the Strategic report.
VCT regulation
The investment policy is designed to ensure that the Company
continues to qualify and is approved as a VCT by HMRC. In order
to maintain its status under Venture Capital Trust legislation, a
VCT must comply on a continuing basis with the provisions of
Section 274 of the Income Tax Act 2007 as follows:
(9) The Company must not invest in a company whose trade
is more than seven years old (ten years for a “knowledge
intensive” company) unless the company previously
received State aid risk finance in its first seven years, or the
company is entering a new market and a turnover test
is satisfied;
(10) The Company’s investment in another company must not
be used to acquire another business, or shares in another
company; and
(11) The Company may only make qualifying investments or
certain non-qualifying investments permitted by section
274 of the Income Tax Act 2007.
(1) The Company’s income must be derived wholly or mainly
from shares and securities;
(2) At least 70 per cent. of the HMRC value of its investments
must have been represented throughout the year by
shares or securities that are classified as ‘qualifying
holdings’ (this will increase to 80 per cent. for accounting
periods beginning on or after 6 April 2019);
(3) At least 70 per cent. by HMRC value of its total qualifying
holdings must have been represented throughout the year
by holdings of ‘eligible shares’. Investments made before
6 April 2018 from funds raised before 6 April 2011 are
excluded from this requirement;
(4) At least 30 per cent of funds raised in accounting periods
beginning on or after 6 April 2018 must be invested in
qualifying holdings by the anniversary of the accounting
period in which the funds were raised;
(5) At the time of investment, or addition to an investment,
the Company’s holdings in any one company (other than
another VCT) must not have exceeded 15 per cent. by
HMRC value of its investments;
(6) The Company must not have retained greater than 15 per
cent. of its income earned in the year from shares
and securities;
(7) The Company’s shares, throughout the year, must have
been listed on a regulated European market;
(8) An investment in any company must not cause that
company to receive more than £5 million in State aid risk
finance in the 12 months up to the date of the investment,
These tests drive a spread of investment risk through preventing
holdings of more than 15 per cent. by HMRC value in any
portfolio company. The tests have been carried out and
independently reviewed for the year ended 31 March 2019. The
Company has complied with all tests and continues to do so.
‘Qualifying holdings’ include shares or securities (including loans
with a five year or greater maturity period) in companies which
operate a ‘qualifying trade’ wholly or mainly in the United
Kingdom. Eligible shares must comprise at least 10 per cent. by
HMRC value of the total of the shares and securities that the
Company holds in any one portfolio company. ‘Qualifying trade’
excludes, amongst other sectors, dealing in property or shares
and securities, insurance, banking and agriculture. Details of the
sectors in which the Company is invested can be found in the pie
chart on page 9.
A “knowledge intensive” company is one which is carrying out
significant amounts of R&D from which the greater part of its
business will be derived, or where those R&D activities are being
carried out by staff with certain higher educational attainments.
Portfolio company gross assets must not exceed £15 million
immediately prior to the
investment and £16 million
immediately thereafter.
Environment
The management and administration of the Company is
undertaken by the Manager. Albion Capital Group LLP recognises
the importance of its environmental responsibilities, monitors its
impact on the environment, and designs and implements
policies to reduce any damage that might be caused by its
activities. Initiatives designed to minimise the Company’s
impact on the environment include recycling and reducing
energy consumption.
28
Albion Venture Capital Trust PLC
254746 Albion Capital pp27-pp40.qxp 01/07/2019 16:41 Page 29
Directors’ report continued
Global greenhouse gas emissions
The Company has no greenhouse gas emissions to report from
the operations of the Company, nor does it have responsibility for
any other emissions producing sources under the Companies Act
2006 (Strategic Report and Directors’ Report) Regulations 2013,
including those within our underlying investment portfolio.
Anti-bribery policy
The Company has a zero tolerance approach to bribery, and will
not tolerate bribery under any circumstances in any transaction
the Company is involved in.
Albion Capital Group LLP reviews the anti-bribery policies and
procedures of all portfolio companies.
Anti-facilitation of tax evasion policy
The Company has a zero tolerance approach with regards to the
facilitation of criminal tax evasion and has a robust risk
assessment procedure in place to ensure compliance. The Board
reviews this policy and the prevention procedures in place for all
associates on a regular basis.
Diversity
The Board currently consists of four male Directors and one
female Director. The Board’s policy on the recruitment of new
directors is to attract a range of backgrounds, skills and
experience and to ensure that appointments are made on the
grounds of merit against clear and objective criteria and to bear
in mind gender and other diversity within the Board.
More details on the Directors can be found in the Board of
Directors section on page 17.
The Manager has an equal opportunities policy and currently
employees 10 men and 17 women.
Employees
The Company is managed by Albion Capital Group LLP and
hence has no employees other than its Directors.
Directors
The Directors who held office throughout the year, and their
interests in the shares of the Company (together with those of
their immediate family) are shown in the Directors’ remuneration
report on page 39.
Directors’ indemnity
Each Director has entered into a Deed of Indemnity with the
Company which indemnifies each Director, subject to the
provisions of the Companies Act 2006 and the limitations set out
in each deed, against any liability arising out of any claim made
against him or her in relation to the performance of his or her
duties as a Director of the Company. A copy of each Deed of
Indemnity entered into by the Company for each Director is
available at the registered office of the Company.
Re-election of Directors
Directors’ retirement and re-election is subject to the Articles of
Association and the UK Corporate Governance Code. At the
forthcoming Annual General Meeting, John Kerr and Jeff Warren
will retire and offer themselves for re-election as they have been
Directors of the Company for more than nine years. The Board
does not consider that the length of service reduces their ability
to act independently of the Manager.
Packaged Retail and Insurance-based Investment Products
("PRIIPs”)
Investors should be aware that the PRIIPs Regulation requires
the Manager, as PRIIP manufacturer, to prepare a Key
Information Document ("KID") in respect of the Company. This
KID must be made available by the Manager to retail investors
prior to them making any investment decision and is available on
the Company's webpage on the Manager’s website. The
Company is not responsible for the information contained in the
KID and investors should note that the procedures for calculating
the risks, costs and potential returns are prescribed by the law.
The figures in the KID may not reflect the expected returns for
the Company and anticipated performance returns cannot be
guaranteed.
Alternative Investment Fund Managers Directive
(“AIFMD”)
Under the Alternative Investment Fund Manager Regulations
2013 (as amended) the Company is a UK AIF and from
1 October 2018 the Manager is a full scope UK AIFM. Ocorian
(UK) Limited provides depositary services under the AIFMD.
Material changes to information required to be made available
to investors of the Company
The AIFMD outlines the required information which has to be
made available to investors prior to investing in an AIF and
directs that material changes to this information be disclosed in
the Annual Report of the AIF. There were no material changes in
the year.
Assets of the Company subject to special arrangements arising
from their illiquid nature
There are no assets of the Company which are subject to special
arrangements arising from their illiquid nature.
Remuneration (unaudited)
The Manager has a remuneration policy which meets the
requirements of the AIFMD Remuneration Code and associated
Financial Conduct Authority guidance.
The Manager has a Remuneration Committee (comprised of
three partners) which decides upon the remuneration of partners
and staff, taking into account the performance of the Manager
generally as well as individual performance.
Albion Venture Capital Trust PLC
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Directors’ report continued
Annual partner and staff appraisals are carried out in order to
assess individual performance against agreed objectives within
the broader framework of Albion Capital’s performance.
Financial and non-financial criteria are taken into account when
assessing performance. Variable remuneration will be based on a
combination of the assessment of the performance of the
individual, the Manager and the Manager’s funds. The Manager
does not link an individual's rewards to the success of individual
portfolio investments but rather to the success of the Manager
and its Funds as a whole.
The Remuneration Committee ensures an appropriate balance
between fixed and variable components of remuneration of
staff. In determining variable remuneration current and future
risks are taken into account and variable remuneration is
adjusted where appropriate. The Manager does not pay any
guaranteed variable remuneration. Taking into account the
amount of variable remuneration as a proportion of total
remuneration and the size, nature and lack of complexity of the
Manager’s organisation and its activities, remuneration is not
subject to deferral or performance adjustments.
The Manager has a policy which is designed to identify and
manage conflicts of interest to the extent that these cannot be
avoided and this applies to all staff.
Advising ordinary retail investors
The Company currently conducts its affairs so that its shares can
be recommended by financial intermediaries to ordinary retail
investors in accordance with the FCA’s rules in relation to non-
mainstream investment products and intends to continue to do
so for the foreseeable future. The FCA’s restrictions which apply
to non-mainstream investment products do not apply to the
Company’s shares because they are shares in a Venture Capital
Trust which, for the purposes of the new rules relating to non-
mainstream investment products, are excluded securities and
may be promoted to ordinary retail investors without restriction.
Investment and co-investment
The Company co-invests with other venture capital trusts and
funds managed by Albion Capital Group LLP. Allocation of
investment is on the basis of an allocation agreement which is
based, inter alia, on the ratio of funds available for investment.
Auditor
The Audit Committee annually reviews and evaluates the
standard and quality of service provided by the Auditor, as well as
value for money in the provision of these services. A resolution to
re-appoint BDO LLP will be put to the Annual General Meeting.
Annual General Meeting
The Annual General Meeting will be held at The Charterhouse,
Charterhouse Square, London EC1M 6AN at noon on 21 August
2019. The notice of the Annual General Meeting is at the end of
this document.
The proxy form enclosed with this Annual Report and Financial
Statements permits shareholders to disclose votes ‘for’, ‘against’,
and ‘withheld’. A ‘vote withheld’ is not a vote in law and will not
be counted in the proportion of the votes for and against the
resolution. A summary of proxies lodged at the Annual General
Meeting will be published at www.albion.capital/funds/AAVC
under the “Financial Reports and Circulars section”.
Resolutions relating to the following items of special business will
be proposed at the forthcoming Annual General Meeting for
which shareholder approval is required in order to comply either
with the Companies Act or the Listing Rules of the Financial
Conduct Authority.
These resolutions replace the authorities given to the Directors at
the Annual General Meeting in 2018. The authorities sought at
the forthcoming Annual General Meeting will expire 15 months
from the date the resolution is passed or at the conclusion of the
next Annual General Meeting of the Company, whichever is
earlier.
Authority to allot shares
Ordinary resolution number 7 will request the authority to allot
up to an aggregate nominal amount of £214,170 representing
approximately 20 per cent. of the issued Ordinary share capital
of the Company as at the date of this Report.
The Directors’ current intention is to allot shares under the
Dividend Reinvestment Scheme and any Albion VCTs Top Up
Offers. The Company currently holds 11,517,188 Ordinary shares
in treasury which represents 11.9 per cent. of the total Ordinary
share capital in issue as at 31 March 2019.
Disapplication of pre-emption rights
Special resolution number 8 will request the authority for the
Directors to allot equity securities for cash without first being
required to offer such securities to existing members. This will
include the sale on a non pre-emptive basis of any shares the
Company holds in treasury for cash. The authority relates to a
maximum aggregate of £214,170 of the nominal value of the
share capital representing approximately 20 per cent. of the
issued Ordinary share capital of the Company as at the date of
this report.
Purchase of own shares
Special resolution number 9 will request the authority to
purchase a maximum of 16,052,037 shares representing 14.99
per cent. of the Company's issued Ordinary share capital at, or
between, the minimum and maximum prices specified in
resolution 9. Shares bought back under this authority may be
cancelled.
30
Albion Venture Capital Trust PLC
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Directors’ report continued
The Board believes that it is helpful for the Company to continue
to have the flexibility to buy its own shares and this resolution
seeks authority from shareholders to do so. Details of share buy-
backs during the year can be found in note 15.
• each of the Directors has taken all the steps that they ought
to have taken as a Director to make themselves aware of any
relevant audit
information and to establish that the
Company’s Auditor is aware of that information.
This disclosure is given and should be interpreted in accordance
with the provisions of s418 of the Companies Act 2006.
By Order of the Board
Albion Capital Group LLP
Company Secretary
1 Benjamin Street
London, EC1M 5QL
1 July 2019
Recommendation
The Board believes that the passing of the resolutions above is in
the best interests of the Company and its shareholders as a
whole, and unanimously recommends that you vote in favour of
these resolutions, as the Directors intend to do in respect of their
own shareholdings.
General Meeting for amendment to the Management
Agreement between the Company and the Manager
As outlined in the Circular that has been sent to shareholders
along with the Annual Report and Financial Statements, the
Board are recommending that the current performance incentive
arrangements be amended. This requires the approval of
shareholders at a General Meeting, where an ordinary resolution
will propose a deed of variation to the Management Agreement
between the Company and the Manager.
The General Meeting will be held at The Charterhouse,
Charterhouse Square, London EC1M 6AN following the
conclusion of the Annual General Meeting on 21 August 2019.
The Notice of the General Meeting is included in the Circular that
has been sent to shareholders along with the Annual Report and
Financial Statements.
The proxy form enclosed with this Circular permits shareholders
to disclose a vote ‘for’, ‘against’, and ‘withheld’. A ‘vote
withheld’ is not a vote in law and will not be counted in the
proportion of the votes for and against the resolution. A
summary of proxies lodged at the General Meeting will be
published at www.albion.capital/funds/AAVC under
the
‘Financial Reports and Circulars’ section.
Disclosure of information to the Auditor
In the case of the persons who are Directors of the Company at
the date of approval of this report:
• so far as each of the Directors are aware, there is no relevant
audit information of which the Company’s Auditor is
unaware; and
Albion Venture Capital Trust PLC
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Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report
and Financial Statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare Financial
Statements for each financial year. Under that law the Directors
have elected to prepare the Company’s Financial Statements in
accordance with United Kingdom Generally Accepted
Accounting Practice (“UK GAAP”) (United Kingdom Accounting
Standards and applicable law). Under company law the Directors
must not approve the Financial Statements unless they are
satisfied that they give a true and fair view of the state of affairs
of the Company and of the profit or loss for the Company for that
period.
In preparing these Financial Statements, the Directors are
required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
• state whether they have been prepared in accordance with UK
GAAP subject to any material departures disclosed and
explained in the Financial Statements; and
• prepare a Directors’ report, a Strategic report and Directors’
remuneration report which comply with the requirements of
the Companies Act 2006.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time
the financial position of the Company and enable them to
ensure that the Financial Statements comply with the
Companies Act 2006. They are also responsible for safeguarding
the assets of the Company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The Directors are responsible for ensuring that the Annual Report
and Financial Statements, taken as a whole, are fair, balanced,
and understandable and provide the information necessary for
shareholders to assess the Company’s position, performance,
business model and strategy.
Website publication
The Directors are responsible for ensuring the Annual Report and
Financial Statements are made available on a website. Financial
Statements are published on the Company’s webpage on the
Manager’s website
in
accordance with legislation in the United Kingdom governing the
preparation and dissemination of Financial Statements, which
may vary from legislation in other jurisdictions. The maintenance
and integrity of the Company's webpage is the responsibility of
the Directors. The Directors' responsibility also extends to the
ongoing integrity of the Financial Statements contained therein.
(www.albion.capital/funds/AAVC)
Directors’ responsibilities pursuant to Disclosure Guidance
and Transparency Rule 4 of the UK Listing Authority
The Directors confirm to the best of their knowledge:
• The Financial Statements have been prepared in accordance
with UK GAAP and give a true and fair view of the assets,
liabilities, financial position and profit of the Company.
• The Annual Report includes a fair review of the development
and performance of the business and the financial position of
the Company, together with a description of the principal risks
and uncertainties that it faces.
For and on behalf of the Board
Richard Glover
Chairman
1 July 2019
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Albion Venture Capital Trust PLC
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Statement of corporate governance
Background
The Financial Conduct Authority requires all companies listed on
a regulated market to disclose how they have applied the
principles and complied with the provisions of the UK Corporate
Governance Code (“the Code”) issued by the Financial Reporting
Council (“FRC”) in 2016.
the principles and
The Board has also considered
recommendations of the AIC Code of Corporate Governance
(“AIC Code”) by reference to the AIC Corporate Governance
Guide for Investment Companies (“AIC Guide”). The AIC Code, as
explained by the AIC Guide, addresses all the principles set out in
the UK Corporate Governance Code, as well as setting out
additional principles and recommendations on issues that are of
specific relevance to the Company.
The Board considers that reporting against the principles and
recommendations of the AIC Code, and by reference to the AIC
Guide (which incorporates the UK Corporate Governance Code),
will provide better information to shareholders than reporting
under the Code alone.
The Company has complied with the recommendations of the
AIC Code and the relevant provisions of the UK Corporate
Governance Code, except as set out below.
Application of the Principles of the Code
The Board attaches importance to matters set out in the Code
and applies its principles. However, as a venture capital trust
company, most of the Company’s day-to-day responsibilities are
delegated to third parties and the Directors are all non-executive.
Thus, not all the provisions of the Code are directly applicable to
the Company.
Board of Directors
independent non-executive
The Board consists solely of
Directors. Since all Directors are non-executive and day-to-day
management responsibilities are sub-contracted to the Manager,
the Company does not have a Chief Executive Officer.
Richard Glover is the Chairman and Jeff Warren is the Senior
Independent Director. The Board will continue to act
independently of the Manager and the Directors consider that the
size of the Board is adequate to meet the Company’s future needs.
John Kerr is an external member of the Investment Committee of
Albion Capital Group LLP. The Board has reviewed and approved
this role and concluded it does not affect his independence.
John Kerr and Jeff Warren have both been Directors of the
Company for more than nine years and, in accordance with the
recommendations of the AIC code, are subject to annual re-
election. The Board does not have a policy of limiting the tenure
of any Director as the Board does not consider that a Director’s
length of service reduces their ability to act independently of the
Manager.
Ebbe Dinesen will retire as a Director on 1 August 2019.
The Directors have a range of business and financial skills which
are relevant to the Company; these are described in the Board of
Directors section of this Annual Report, on page 17. Directors are
provided with key information on the Company’s activities,
including regulatory and statutory requirements, and internal
controls, by the Manager. The Board has direct access to
secretarial advice and compliance services by the Manager, who
is responsible for ensuring that Board procedures are followed
and applicable procedures complied with. All Directors are able to
take independent professional advice in furtherance of their
duties if necessary. In accordance with the UK Corporate
Governance Code, the Company has in place Directors’ &
Officers’ Liability Insurance.
The Directors have considered diversity in relation to the
composition of the Board and have considered that its
membership is diverse in relation to its experience and balance of
skills. Further details on the policy regarding the recruitment of
new directors can be found in the Nomination Committee
section on page 36.
The Board met four times during the year as part of its regular
programme of Board meetings. All of the Directors attended all
meetings, except for David Watkins who retired on 1 August 2018.
A sub-committee of the Board comprising at least two Directors
met during the year to allot shares issued under the Dividend
Reinvestment Scheme and the Albion VCTs Top Up Offers.
The Chairman ensures that all Directors receive, in a timely
manner, all relevant management, regulatory and financial
information. The Board receives and considers reports regularly
from the Manager and other key advisers, and ad hoc reports and
information are supplied to the Board as required. The Board has
a formal schedule of matters reserved for it and the agreement
between the Company and its Manager sets out the matters over
which the Manager has authority and limits beyond which Board
approval must be sought.
The Manager has authority over the management of the
investment portfolio, the organisation of custodial services,
accounting, secretarial and administrative services. The main
issues reserved for the Board include:
• the appointment, evaluation, removal and remuneration of
the Manager;
• the consideration and approval of future developments or
changes to the investment policy, including risk and asset
allocation;
Albion Venture Capital Trust PLC
33
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Statement of corporate governance
continued
• consideration of corporate strategy and corporate events that
arise;
• application of the principles of the UK Corporate Governance
Code, corporate governance and internal control;
• review of sub-committee recommendations, including the
recommendation to shareholders for the appointment and
remuneration of the Auditor;
• evaluation of non-audit services provided by the external
Auditor;
• approval of the appropriate dividend to be paid to
shareholders;
• reviewing the performance of the Company, including
monitoring of the discount of the net asset value and the
share price;
• share buy-back and treasury share policy; and
• monitoring shareholder profile and considering shareholder
communications.
It is the responsibility of the Board to present an Annual Report
and Financial Statements that are fair, balanced and
understandable, which provides the information necessary for
shareholders to assess the position, performance, strategy and
business model of the Company.
Committees’ and Directors’ performance evaluation
Performance of the Board and the Directors is assessed on the
following:
• attendance at Board and Committee meetings;
• the contribution made by individual Directors at, and outside
of, Board and Committee meetings; and
• completion of a detailed internal assessment process and
annual performance evaluation conducted by the Chairman.
The Senior Independent Director reviews the Chairman’s
annual performance evaluation.
The evaluation process has identified that the Board works well
together and has the right balance of skills, experience,
independence and knowledge for the effective governance of
the Company. Diversity within the Board is achieved through the
appointment of directors with different sector backgrounds and
skills.
Directors are offered training, both at the time of joining the
Board and on other occasions where required. The Board also
undertakes a proper and thorough evaluation of its committees
on an annual basis.
34
Albion Venture Capital Trust PLC
Directors’ retirement and re-election is subject to the Articles of
Association and the AIC Code. Directors are subject to re-election
every three years and Directors who have served longer than nine
years and non-independent Directors, to re-election every year.
In light of the structured performance evaluation, John Kerr and
Jeff Warren who are subject to re-election at the forthcoming
Annual General Meeting, are considered to be effective Directors
who demonstrate strong commitment to the role. The Board
believes it to be in the best interest of the Company to reappoint
these Directors at the forthcoming Annual General Meeting.
Remuneration Committee
Jeff Warren is Chairman of the Remuneration Committee and all
of the Directors are members of this Committee. The Committee
meets once a year and held one formal meeting during the year
which was attended by all the Directors except David Watkins
who retired on 1 August 2018.
The terms of reference for the Remuneration Committee can be
found on the Company’s webpage on the Manager’s website at
www.albion.capital/funds/AAVC
Corporate
Governance section.
under
the
Audit Committee
The Audit Committee consists of all Directors and John Kerr is
Chairman. In accordance with the Code, all members of the
Audit Committee have recent and relevant financial experience
and therefore it is considered appropriate for the whole Board to
be part of the Audit Committee. The Committee met twice
during the year ended 31 March 2019; all members attended all
meetings, except David Watkins who retired on 1 August 2018.
Written terms of reference have been constituted for the Audit
Committee and can be found on the Company’s webpage on the
Manager’s website at www.albion.capital/funds/AAVC under the
Corporate Governance section.
During the year under review, the Committee discharged its
responsibilities including:
• formally reviewing the Annual Report and Financial
Statements, the Half-yearly Financial Report, the Interim
Management Statements which the Company will continue to
publish and the associated announcements, with particular
focus on the main areas requiring judgement and on critical
accounting policies;
• reviewing the effectiveness of the internal controls system and
examination of the Internal Controls Report produced by the
Manager;
• meeting with the external Auditor and reviewing their
findings;
254746 Albion Capital pp27-pp40.qxp 01/07/2019 16:41 Page 35
Statement of corporate governance
continued
• reviewing the performance of the Manager and making
recommendations regarding their re-appointment to the
Board;
• highlighting the key risks and specific issues relating to the
Financial Statements
including the reasonableness of
valuations, compliance with accounting standards and UK law,
corporate governance and listing and disclosure rules as well as
going concern. These issues were addressed through detailed
review, discussion and challenge by the Board of these matters,
as well as by reference to underlying technical information;
• advising the Board on whether the Annual Report and
Financial Statements, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Company’s position, performance,
business model and strategy; and
• reporting to the Board on how it has discharged its
responsibilities.
Financial Statements
The Audit Committee has initial responsibility for reviewing the
Financial Statements and reporting on any significant issues that
arise in relation to the audit of the Financial Statements as
outlined below. The Audit Committee considered whether these
issues were properly considered at the planning stage of the
audit and such issues were discussed with the external Auditor at
the planning stage of the audit and at the completion of the
audit of the Financial Statements. No major conflicts arose
between the Audit Committee and the external Auditor in
respect of their work during the period.
The key accounting and reporting issues considered by the
Committee were:
The valuation of the Company’s investments
Valuations of investments are prepared by the Manager. The
Audit Committee reviewed the estimates and judgements made
in relation to these investments and were satisfied that they were
appropriate. The Audit Committee also discussed the controls in
place over the valuation of investments. The Committee
recommended investment valuations to the Board for approval.
Revenue recognition
The revenue generated from loan stock interest and dividend
income has been considered by the Audit Committee as part of
its review of the Annual Report as well as a quarterly review of the
management accounts prepared by the Manager. The Audit
Committee has considered the controls in place over revenue
recognition to ensure that amounts received are in line with
expectation and budget.
Following rigorous reviews of the Annual Report and Financial
Statements and consideration of the key areas of risk identified,
the Audit Committee and Board has concluded that, as a whole,
the Financial Statements are fair, balanced and understandable
and that they provide the information necessary for shareholders
to assess the Company’s position, performance, business model
and strategy.
Relationship with the External Auditor
The Audit Committee reviews the performance and continued
suitability of the Company’s external Auditor on an annual basis.
They assess the external Auditor’s independence, qualification,
extent of relevant experience, effectiveness of audit procedures
as well as the robustness of their quality assurance procedures. In
advance of each audit, the Committee obtains confirmation
from the external Auditor that they are independent and of the
level of non-audit fees earned by them and their affiliates. No
non-audit services were provided during the financial year ended
31 March 2019.
As part of its work, the Audit Committee has undertaken a formal
evaluation of the external Auditor against the following criteria;
– Qualification
– Expertise
– Resources
– Effectiveness
– Independence
– Leadership
In order to form a view of the effectiveness of the external audit
process, the Committee took into account information from the
Manager regarding the audit process, the formal documentation
issued to the Audit Committee and the Board by the external
Auditor regarding the external audit for the year ended 31 March
2019, and assessments made by individual Directors.
In 2017 the Audit Committee undertook a tendering exercise for
the provision of audit services. As a result of this process, BDO LLP
was retained as Auditor. BDO first acted as Auditor for the year
ended 31 March 2008 and this will be year 12 of their tenure.
The Audit Committee annually reviews and evaluates the
standard and quality of service provided by the Auditor, as well as
value for money in the provision of these services.
The Audit Committee also has an annual meeting with the
external Auditor, without the Manager present, at which
pertinent questions are asked to help the Audit Committee
determine if the Auditor’s skills match all the relevant and
appropriate criteria.
Albion Venture Capital Trust PLC
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Statement of corporate governance
continued
Based on the assurance obtained, the Audit Committee
recommended to the Board a resolution to re-appoint BDO LLP
as Auditor at the forthcoming Annual General Meeting.
Nomination Committee
The Nomination Committee consists of all Directors, with Richard
Glover as Chairman from 1 August 2018, when David Watkins
retired from this role.
The Board’s policy on the recruitment of new directors is to
attract a range of backgrounds, skills and experience and to
ensure that appointments are made on the grounds of merit
against clear and objective criteria and bear in mind gender and
other diversity within the Board.
The terms of reference for the Nomination Committee can be
found on the Company’s webpage on the Manager’s website at
www.albion.capital/funds/AAVC
Corporate
Governance section.
under
the
Internal control
In accordance with the UK Corporate Governance Code, the
Board has an established process for identifying, evaluating and
managing the significant risks faced by the Company. This
process has been in place throughout the year and continues to
be subject to regular review by the Board in accordance with the
FRC guidance “Risk Management, Internal Control and Related
Financial and Business Reporting”. The Board is responsible for
the Company’s system of internal control and for reviewing its
effectiveness. However, acknowledging that such a system is
designed to manage, rather than eliminate, the risks of failure to
achieve the Company’s business objectives, such controls can
only provide reasonable and not absolute assurance against
material misstatement or loss.
The Board, assisted by the Audit Committee, monitors all controls,
including financial, operational and compliance controls, and risk
management. The Audit Committee receives each year from the
Manager a formal report, which details the steps taken to monitor
the areas of risk, including those that are not directly the
responsibility of the Manager, and which reports the details of any
known internal control failures. Steps continue to be taken to
embed the system of internal control and risk management into
the operations and culture of the Company and its key suppliers,
and to deal with areas of improvement which come to the
Manager’s and the Audit Committee’s attention.
The Board, through the Audit Committee, has performed a
specific assessment for the purpose of this Annual Report and
Financial Statements. This assessment considers all significant
aspects of internal control arising during the year. The Audit
its review
Committee assists the Board
responsibilities.
in discharging
36
Albion Venture Capital Trust PLC
The main features of the internal control system with respect to
financial reporting are:
• segregation of duties between the preparation of valuations
and recording in accounting records;
• independent third party valuations of the majority of the
asset-backed investments within the portfolio are undertaken
annually;
• reviews of valuations are carried out by the managing partner
and reviews of financial reports are carried out by the
operations partner of Albion Capital Group LLP;
• bank reconciliations are carried out monthly, and stock
reconciliations are carried out six-monthly, by the Manager in
accordance with the FCA requirements;
• all published financial reports are reviewed by Albion Capital
Group LLP compliance department;
• the Board reviews financial information; and
• a separate Audit Committee of the Board reviews financial
information due to be published.
As the Board has delegated the investment management and
administration to Albion Capital Group LLP, the Board feels that
it is not necessary to have its own internal audit function. Instead,
it has access to PKF Littlejohn LLP, which, as internal auditor for
Albion Capital Group LLP undertakes periodic examination of the
business processes and controls environment at Albion Capital
Group LLP, and ensures that any recommendations to implement
improvements in controls are carried out. During the year, the
Audit Committee and the Board reviewed internal audit reports
prepared by PKF Littlejohn LLP. The Board and the Audit
Committee will continue to monitor its system of internal control
in order to provide assurance that it operates as intended.
In addition to this, Ocorian (UK) Limited, the Company’s external
Depositary from 1 October 2018, provides cash monitoring, asset
verification, and oversight services to the Company and reports
to the Board on a quarterly basis. The Board and the Audit
Committee will continue to monitor its system of internal control
in order to provide assurance that it operates as intended.
Conflicts of interest
Directors review the disclosure of conflicts of interest annually,
with changes reviewed and noted at the beginning of each
Board meeting. A Director who has conflicts of interest has two
independent Directors authorise those conflicts, and is excluded
from discussions or decisions regarding those conflicts.
Procedures to disclose and authorise conflicts of interest have
been adhered to throughout the year.
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Statement of corporate governance
continued
The Company’s share buy-back programme operates in the
market through brokers. In order to sell shares, as they are quoted
on the London Stock Exchange, investors should approach a
broker to undertake the sale. Banks may be able to assist
shareholders with a referral to a broker within their banking group.
Statement of compliance
The Directors consider that the Company has complied
throughout the year ended 31 March 2019 with all the relevant
provisions set out in the Code and with the AIC Code of
Corporate Governance. The Company continues to comply with
the Code as at the date of this report.
For and on behalf of the Board
Richard Glover
Chairman
1 July 2019
Capital structure and Articles of Association
Details regarding the Company’s capital structure, substantial
interests and Directors’ powers to buy and issue shares are
detailed in full on pages 27 and 30 of the Directors’ report. The
Company is not party to any significant agreements that may
take effect, alter or terminate upon a change of control of the
Company following a takeover bid.
Any amendments to the Company’s Articles of Association are
by way of a special resolution subject to ratification by
shareholders.
Relationships with shareholders
The Company’s Annual General Meeting on 21 August 2019 will
be used as an opportunity to communicate with investors. The
Board, including the Chairman of the Audit Committee, will be
available to answer questions at the Annual General Meeting.
At the Annual General Meeting, the level of proxies lodged on
each resolution, the balance for and against the resolution, and
the number of votes withheld, are announced after the resolution
has been voted on by a show of hands.
The Annual General Meeting will also include a presentation from
the Manager on the portfolio and on the Company, and a
presentation from a portfolio company.
Shareholders and financial advisers are able to obtain
information on holdings and performance using the contact
details provided on page 2.
Albion Venture Capital Trust PLC
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Directors’ remuneration report
Introduction
This report is submitted in accordance with Section 420 of the
Companies Act 2006 and describes how the Board has applied
the principles relating to the Directors’ remuneration.
level of non-executive Directors’
The current maximum
remuneration is £150,000 per annum in aggregate which is fixed
by the Company’s Articles of Association, changes to which are
made by ordinary resolution.
An ordinary resolution will be proposed at the Annual General
Meeting of the Company to be held on 21 August 2019 for the
approval of the annual remuneration report as set out below. The
current remuneration policy was approved by shareholders (95.3
per cent. of shareholders voted for the resolution, 4.7 per cent.
against the resolution, and of the total votes cast, 206,154 votes
(being 0.2 per cent. of total voting rights) were withheld) at the
Annual General Meeting held on 14 August 2017, and it will
remain in place for a three year period. It will be next put to
shareholders at the 2020 AGM.
The Company’s independent Auditor, BDO LLP, is required to
give its opinion on certain information included in this report as
indicated. The Auditor’s opinion is included in the Independent
Auditor’s Report.
Annual statement from the Chairman of the Remuneration
Committee
The Remuneration Committee comprises all of the Directors with
Jeff Warren as Chairman.
The Remuneration Committee met once during the year to
review Directors’ responsibilities and fees against the market and
concluded that the current level of fees for the Chairman should
be increased to remain both competitive and reflective of the
workload and responsibilities required. The Board agreed to raise
the salary of the Chairman to £27,000 per annum. This change
in remuneration will take place from 1 July 2019 and is in line
with the remuneration policy as detailed out below.
Directors’ remuneration policy
The Company’s policy is that fees payable to non-executive
Directors should reflect their expertise, responsibilities and time
spent on Company matters. In determining the level of non-
executive remuneration, market equivalents are considered in
comparison to the overall activities and size of the Company.
There is no performance related pay criteria applicable to non-
executive Directors.
The Company’s Articles of Association provide for the resignation
and, if approved, re-election of the Directors every three years at
the Annual General Meeting. In accordance with the
recommendations of the AIC Code, Directors who have served the
Company for longer than nine years are subject to annual re-
election, and any non-independent Directors are also subject to
annual re-election. At the forthcoming Annual General Meeting
John Kerr and Jeff Warren will retire and be proposed for re-
election. Ebbe Dinesen will retire as a Director on 1 August 2019.
None of the Directors have a service contract with the Company,
and as such there is no policy on termination payments. There is
no notice period and no payments for loss of office were made
during the period. On being appointed to the Board, Directors
receive a letter from the Company setting out the terms of their
appointment and their specific duties and responsibilities. The
Company has no employees other than the Directors.
Shareholders’ views in respect of Directors’ remuneration are
regarded highly and the Board encourages shareholders’ to attend
its Annual General Meeting in order to communicate their thoughts,
which it takes into account where appropriate when formulating its
policy. At the last Annual General Meeting, 95.9 per cent. of
shareholders voted for the resolution approving the Directors’
remuneration report which shows significant shareholder support.
Annual report on remuneration
The remuneration of individual Directors’ is determined by the
Remuneration Committee within the framework set by the Board.
It is responsible for reviewing the remuneration of the Directors
and the Company’s remuneration policy to ensure that it reflects
the duties, responsibilities and value of time spent by the
Directors on the business of the Company and makes
recommendations to the Board accordingly.
38
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Directors’ remuneration report continued
Directors’ remuneration
The following items have been audited.
The following table shows an analysis of the remuneration of
individual Directors, exclusive of National Insurance:
Directors’ interests
The Directors who held office throughout the year and their
interests in the shares of the Company (together with those of
their immediate family) are as follows:
2019
£’000
2018
£’000
Richard Glover (appointed 8 November
2017; Chairman from 1 August 2018)
John Kerr
Ann Berresford
(appointed 8 November 2017)
Ebbe Dinesen
Jeff Warren
David Watkins (retired 1 August 2018)
23
24
22
22
22
8
9
24
9
22
22
24
Richard Glover
John Kerr
Ann Berresford
Ebbe Dinesen
Jeff Warren
David Watkins
(retired 1 August 2018)
31 March
2019
(Number of
shares)
31 March
2018
(Number of
shares)
–
13,109
–
36,552
20,000
N/A
69,661
–
13,109
–
36,552
20,000
10,000
79,661
121
110
The Directors’ remuneration for the year ending 31 March 2020
is expected to be approximately £101,000.
The Company does not confer any share options, long term
incentives or retirement benefits to any Director, nor does it make
a contribution to any pension scheme on behalf of the Directors.
Each Director of the Company was remunerated personally
through the Manager’s payroll which has been recharged to the
Company.
In addition to Directors’ remuneration, the Company pays an
annual premium in respect of Directors’ & Officers’ Liability
Insurance of £8,932 (2018: £8,578).
Richard Glover, John Kerr, and Ebbe Dinesen participated in the
Albion VCTs Prospectus Top Up Offers 2018/19 and subscribed to
50,441; 6,337; and 5,069 shares respectively in the April 2019
allotment.
There have been no other changes in the holdings of the
Directors between 31 March 2019 and the date of this Report.
The following items have not been audited.
Albion Capital Group LLP, its partners and staff hold a total of
368,497 shares in the Company as at 31 March 2019.
Performance graph
The graph that follows shows the Company’s Ordinary share
price total return against the FTSE All-Share Index total return, in
both instances with dividends reinvested, since 1 April 2009. The
Directors consider the FTSE All-Share Index to be the most
appropriate benchmark for the Company as it contains a large
range of sectors within the UK economy similar to a generalist
VCT. Investors should, however, be reminded that shares in VCTs
generally trade at a discount to the actual net asset value of the
Company.
There are no options, issued or exercisable, in the Company
which would distort the graphical representation that follows.
Albion Venture Capital Trust PLC
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Directors’ remuneration report continued
Ordinary share price total return relative to the
FTSE All-Share Index total return
(in both cases with dividends reinvested)
)
e
r
a
h
s
r
e
p
e
c
n
e
p
(
n
r
u
t
e
R
350
300
250
200
150
100
50
0
Mar
2009
Mar
2010
Mar
2011
Mar
2012
Mar
2013
Mar
2014
Mar
2015
Mar
2016
Mar
2017
Mar
2018
Mar
2019
Ordinary share price total return
FTSE All-Share Index total return
Source: Albion Capital Group LLP
Methodology: The Ordinary share price total return to the shareholder, including original amount invested (rebased to 100),
assuming that dividends were reinvested at the share price of the Company at the time the shares were quoted ex-dividend.
Transaction costs are not taken into account.
Directors’ pay compared to distribution to shareholders for the year
31 March
2019
£’000
4,278
1,300
121
31 March
2018 Percentage
£’000 change
4,317 (0.9%)
1,019 27.6%
110 10%
Total dividend distribution to shareholders
Share buybacks
Total Directors fees
For and on behalf of the Board
Richard Glover
Director
1 July 2019
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254746 Albion Capital pp41-pp46.qxp 01/07/2019 16:43 Page 41
Independent Auditor’s report to the Members of
Albion Venture Capital Trust PLC
Opinion
We have audited the financial statements of Albion Venture
Capital Trust Plc (the ‘Company’) for the year ended 31 March
2019 which comprise the Income Statement, the Balance Sheet,
the Statement of Changes in Equity, the Statement of Cash
Flows and notes to the financial statements, including a
summary of significant accounting policies. The financial
reporting framework that has been applied in their preparation is
applicable law and United Kingdom Accounting Standards,
including Financial Reporting Standard 102 The Financial
Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• give a true and fair view of the state of the Company’s affairs
as at 31 March 2019 and its profit for the year then ended;
• have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice;
• have been prepared in accordance with the requirements of
the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the financial statements
section of our report. We are independent of the Company in
accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed public interest entities, and
we have fulfilled our other ethical responsibilities in accordance
with these requirements. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for
our opinion.
Conclusions relating to principal risks, going concern and
viability statement
We have nothing to report in respect of the following information
in the annual report, in relation to which the ISAs (UK) require us
to report to you whether we have anything material to add or
draw attention to:
• the disclosures in the annual report that describe the principal
risks and explain how they are being managed or mitigated;
• the directors’ confirmation in the annual report that they
have carried out a robust assessment of the principal risks
facing the Company, including those that would threaten its
business model, future performance, solvency or liquidity;
• the directors’ statement in the financial statements about
whether the directors considered it appropriate to adopt the
going concern basis of accounting in preparing the financial
statements and the directors’ identification of any material
uncertainties to the Company’s ability to continue to do so
over a period of at least twelve months from the date of
approval of the financial statements;
• whether the directors’ statement relating to going concern
required under the Listing Rules in accordance with Listing
Rule 9.8.6R(3) is materially inconsistent with our knowledge
obtained in the audit; or
• the directors’ explanation in the annual report as to how they
have assessed the prospects of the Company, over what
period they have done so and why they consider that period
to be appropriate, and their statement as to whether they
have a reasonable expectation that the Company will be able
to continue in operation and meet its liabilities as they fall due
over the period of their assessment, including any related
disclosures drawing attention to any necessary qualifications
or assumptions.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of resources in
the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
Albion Venture Capital Trust PLC
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Independent Auditor’s report to the Members of
Albion Venture Capital Trust PLC continued
Key Audit Matter
How we addressed the Key Audit Matter in the Audit
Valuation of unquoted
investments (Note 3 and 11 to
the financial statements)
There is a high level of estimation
uncertainty involved in determining
the
investment
valuations.
unquoted
The Investment Manager’s fee is
based on the value of the net
assets of the fund, as shown in
note 5.
As the Investment Manager is
responsible for valuing investments
for the financial statements, there
is a potential risk of overstatement
of
investment valuations. The
existence of an expense cap in the
management
agreement
enhances this risk.
The unquoted investment portfolio comprises loan and equity investments in unquoted
companies.
We tested a sample of 88% of the unquoted investment portfolio by value of investment
holdings.
13% of the unquoted portfolio is based on valuations using net assets (i.e. cash held) or cost
(where the investment was recently acquired). For such investments, we checked the net
assets or cost to supporting documentation and considered the Investment Manager’s
determination of whether there were any reasons why the valuation and the valuation
methodology was not appropriate at 31 March 2019.
The remaining 87% of the investment portfolio is valued with reference to more subjective
techniques with 17% based on discounted cash flows, 8% using the offer price and 62%
using earnings multiples, as described in note 11.
Our detailed testing for such investments, performed on all investments within our sample
comprised:
• Forming a determination of whether the valuation methodology is the most appropriate
in the circumstances under the International Private Equity and Venture Capital Valuation
(“IPEV”) Guidelines obtaining management explanations
• Re-performing the calculation of the multiples-based investment valuations
• Where a valuation has been performed by a third party management’s expert, we
assessed the competence and capabilities of that expert, the quality of their work and
their qualifications, as well as challenging the basis of inputs and assumptions used by the
expert (i.e. discount rates and earnings multiples). We also considered any updates for
subsequent information to the valuation made by the investment manager and obtained
appropriate evidence for those changes
• Benchmarking key inputs and estimates to independent information and our own
research
• Challenging the assumptions inherent in the valuation of unquoted investments and
assessed the impact of the estimation uncertainty concerning these assumptions and the
disclosure of these uncertainties in the Financial Statements
• Considering the economic environment in which the investment operates to identify
factors that could impact the investment valuation
• Developing our own point estimates where alternative assumptions could reasonably be
applied and considered the overall impact of such sensitisations on the portfolio of
investments in determining whether the valuations as a whole are reasonable and
unbiased.
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Independent Auditor’s report to the Members of
Albion Venture Capital Trust PLC continued
Key Audit Matter
How we addressed the Key Audit Matter in the Audit
For investments not included in our detailed testing, we performed the following procedures
For investments not included in our detailed testing, we performed the following procedures
where relevant:
where relevant:
• Considered whether the valuation had been prepared by a suitably qualified individual
• Considered whether the valuation had been prepared by a suitably qualified individual
• Considered whether a valid IPEV methodology had been adopted
• Considered whether a valid IPEV methodology had been adopted
• Considered whether the valuation used up to date trading information
• Considered whether the valuation used up to date trading information
For a sample of loans held at fair value, we:
For a sample of loans held at fair value, we:
• Vouched security held to documentation
• Vouched security held to documentation
• Considered the assumption that fair value is not significantly different to cost by
challenging the assumption that there is no significant movement in the market interest
• Considered the assumption that fair value is not significantly different to cost by
rate since acquisition and considering the “unit of account” concept (i.e. the investment
challenging the assumption that there is no significant movement in the market interest
as a whole)
rate since acquisition and considering the “unit of account” concept (i.e. the investment
• Reviewed the treatment of accrued redemption premium/other fixed returns in line with
as a whole)
the SORP
• Reviewed the treatment of accrued redemption premium/other fixed returns in line with
the SORP
We developed expectations for interest income receivable based on loan instruments and
investigated any variations in amounts recognised to ensure they were valid.
We also reviewed the recognition and classification of accrued fixed income receipts to
ascertain whether it meets the definition of realised income, considering management
information relevant to the ability of the portfolio Company to service the loan and the
reasons for any arrears of loan interest.
In respect of dividends receivable, we compared actual income to expectations set based on
independent published data or management information from the investee company on
dividends declared by the portfolio companies held.
Revenue recognition
(Note 2 and 4 to the financial
statements)
Revenue arises from unquoted
investments and can be difficult to
predict. It is often a key factor in
demonstrating the performance of
the portfolio.
Revenue consists primarily of
interest earned on loans to investee
companies, as well as dividends
receivable from investee companies.
of
assessment
Revenue recognition is considered
to be a significant risk, particularly
the
the
recoverability of
interest
income, and the completeness of
dividends, as it is one of the key
drivers of dividend returns to
investors.
loan
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider
materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users
that are taken on the basis of the financial statements. In order to reduce to an appropriately low level the probability that any
misstatements exceed materiality we use a lower materiality level, performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of
identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the Financial Statements.
The application of these key considerations gives rise to three levels of materiality, the quantum and purpose of which are tabulated below.
Albion Venture Capital Trust PLC
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Independent Auditor’s report to the Members of
Albion Venture Capital Trust PLC continued
Materiality measure
Purpose Key considerations Quantum Quantum
and benchmarks 2019 (£) 2018 (£)
• The gross value of investments
£1,230,000
£1,190,000
• The level of judgement inherent in
the valuation
• The range of reasonable alternative
valuations
• Financial statement materiality
£920,000
£890,000
• Risk and control environment
• Level of revenue
£220,000
£190,000
Financial statement
materiality.
(2% of gross
investments)
Assessing whether the financial
statements as a whole present a
true and fair view.
Performance
materiality.
(75% of Materiality)
Specific materiality –
classes of transactions
and balances which
impact on net realised
returns.
(10% of the revenue
return before tax)
Lower
level of materiality
applied in performance of the
audit when determining the
nature and extent of testing
applied to individual balances
and classes of transactions.
of
Assessing
those classes of
transactions,
or
balances
disclosures
which
for
lesser
misstatements
amounts than materiality for the
financial statements as a whole
could reasonably be expected to
economic
the
influence
decisions of users taken on the
basis of the financial statements.
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £23,000 as well as
differences below that threshold that, in our view, warranted reporting on qualitative grounds.
An overview of the scope of our audit
Our audit approach was developed by obtaining an understanding of the company’s activities, and the overall control environment.
Based on this understanding we assessed those aspects of the company’s transactions and balances which were most likely to give
rise to a material misstatement.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
In particular, we looked at where the directors made subjective judgements, for example in respect of the valuation of investments
which have a high level of estimation uncertainty involved in determining the unquoted investment valuations.
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates,
and considered the risk of acts by the company which were contrary to applicable laws and regulations, including fraud. These included
but were not limited to compliance with Companies Act 2006, the FCA listing and DTR rules, the principles of the UK Corporate
Governance Code, industry practice represented by the Statement of Recommended Practice: Financial Statements of Investment
Trust Companies and Venture Capital Trusts (“the SORP”) issued in November 2014 and updated in February 2018 with consequential
amendments and FRS 102. We also considered the company’s qualification as a VCT under UK tax legislation.
We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud
is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion.
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Independent Auditor’s report to the Members of
Albion Venture Capital Trust PLC continued
We focused on laws and regulations that could give rise to a
material misstatement in the company financial statements. Our
tests included, but were not limited to:
• obtaining an understanding of the control environment in
monitoring compliance with laws and regulations;
• agreement of the financial statement disclosures to
underlying supporting documentation;
• enquiries of management; and
• review of minutes of board meetings throughout the period.
There are inherent limitations in the audit procedures described
above and the further removed non-compliance with laws and
regulations is from the events and transactions reflected in the
financial statements, the less likely we would become aware of it.
As in all of our audits we also addressed the risk of management
override of internal controls, including testing journals and
evaluating whether there was evidence of bias by the directors
that represented a risk of material misstatement due to fraud.
Other information
The directors are responsible for the other information. The other
information comprises the information included in the annual
report, other than the financial statements and our auditor’s
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there
is a material
misstatement of the other information, we are required to report
that fact.
We have nothing to report in this regard.
In this context, we also have nothing to report in regard to our
responsibility to specifically address the following items in the
other information and to report as uncorrected material
misstatements of the other information where we conclude that
those items meet the following conditions:
• Fair, balanced and understandable – the statement given by
the directors that they consider the annual report and
financial statements taken as a whole is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Company’s performance, business
model and strategy, is materially inconsistent with our
knowledge obtained in the audit; or
• Audit committee reporting – the section describing the work
of the audit committee does not appropriately address
matters communicated by us to the audit committee; or
• Directors’ statement of compliance with the UK Corporate
Governance Code– the parts of the directors’ statement
required under the Listing Rules relating to the Company’s
compliance with the UK Corporate Governance Code
containing provisions specified for review by the auditor in
accordance with Listing Rule 9.8.10R(2) do not properly
disclose a departure from a relevant provision of the UK
Corporate Governance Code.
Opinions on other matters prescribed by the Companies
Act 2006
In our opinion, the part of the directors’ remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the
audit:
• the information given in the strategic report and the directors’
report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company
and its environment obtained in the course of the audit, we have
not identified material misstatements in the strategic report or
the directors’ report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report
to you if, in our opinion:
• adequate accounting records have not been kept by the
Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the Company financial statements and the part of the
directors’ remuneration report to be audited are not in
agreement with the accounting records and returns; or
Albion Venture Capital Trust PLC
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Independent Auditor’s report to the Members of
Albion Venture Capital Trust PLC continued
The non-audit services prohibited by the FRC’s Ethical Standard
were not provided to the company and we remain independent
of the company in conducting our audit.
Our audit opinion is consistent with the additional report to the
audit committee.
Use of our report
This report is made solely to the Company’s members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might
state to the Company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company and
the Company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Vanessa-Jayne Bradley (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London
United Kingdom
1 July 2019
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
• certain disclosures of directors’ remuneration specified by law
are not made; or
• we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement, the directors are responsible for the preparation of
the financial statements and for being satisfied that they give a
true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
the directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
financial statements.
A further description of our responsibilities for the audit of the
financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
Other matters which we are required to address
Following the recommendation of the audit committee, we were
appointed by the Board of Directors to audit the financial
statements for the year ended 31 March 2008 and subsequent
financial periods. We successfully retendered for the audit of the
financial statements for the year ended 31 March 2018 and we
were reappointed as auditors in respect of the year ended 31
March 2019 by the Members. The period of total uninterrupted
engagement is 12 years, covering the years ending 31 March
2008 to 31 March 2019.
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254746 Albion Capital pp47-pp50.qxp 01/07/2019 16:41 Page 47
Income statement
Revenue Capital Total Revenue Capital Total
Note £’000 £’000 £’000 £’000 £’000 £’000
Year ended 31 March 2019
Year ended 31 March 2018
Gains on investments 3 – 5,707 5,707 – 3,930 3,930
Investment income 4 2,842 – 2,842 2,520 – 2,520
Investment management fees 5 (318) (954) (1,272) (310) (928) (1,238)
Other expenses 6 (357) – (357) (332) – (332)
Profit on ordinary activities
before tax 2,167 4,753 6,920 1,878 3,002 4,880
Tax (charge)/credit on ordinary
activities 8 (330) 181 (149) (273) 176 (97)
Profit and total comprehensive
income attributable to shareholders 1,837 4,934 6,771 1,605 3,178 4,783
Basic and diluted return per share
(pence)* 10 2.13 5.73 7.86 1.80 3.70 5.50
* adjusted for treasury shares
The accompanying notes on pages 51 to 63 form an integral part of these Financial Statements.
The total column of this Income statement represents the profit and loss account of the Company. The supplementary revenue and
capital columns have been prepared in accordance with The Association of Investment Companies’ Statement of Recommended
Practice.
Albion Venture Capital Trust PLC
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Balance sheet
31 March 2019 31 March 2018
Note £’000 £’000
Fixed asset investments 11 61,459 59,451
Current assets
Trade and other receivables less than one year 13 514 136
Cash and cash equivalents 6,205 6,762
6,719 6,898
Total assets 68,178 66,349
Payables: amounts falling due within one year
Trade and other payables less than one year 14 (631) (570)
Total assets less current liabilities 67,547 65,779
Equity attributable to equity holders
Called up share capital 15 970 962
Share premium 26,042 25,475
Capital redemption reserve 7 7
Unrealised capital reserve 19,327 13,789
Realised capital reserve 6,151 6,755
Other distributable reserve 15,050 18,791
Total equity shareholders’ funds 67,547 65,779
Basic and diluted net asset value per share (pence)* 16 79.00 76.00
* excluding treasury shares
The accompanying notes on pages 51 to 63 form an integral part of these Financial Statements.
These Financial Statements were approved by the Board of Directors and authorised for issue on 1 July 2019, and were signed on its
behalf by
Richard Glover
Chairman
Company number: 03142609
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254746 Albion Capital pp47-pp50.qxp 01/07/2019 16:41 Page 49
Statement of changes in equity
Called up Capital Unrealised Realised Other
share Share redemption capital capital distributable
capital premium reserve reserve reserve* reserve* Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000
At 1 April 2018 962 25,475 7 13,789 6,755 18,791 65,779
Return/(loss) and total comprehensive
income for the year – – – 5,782 (848) 1,837 6,771
Transfer of previously unrealised
gains on realisations of investments – – – (244) 244 – –
Purchase of treasury shares – – – – – (1,300) (1,300)
Issue of equity 8 570 – – – – 578
Cost of issue of equity – (3) – – – – (3)
Net dividends paid (note 9) – – – – – (4,278) (4,278)
At 31 March 2019 970 26,042 7 19,327 6,151 15,050 67,547
At 1 April 2017 951 24,630 7 8,623 8,743 22,521 65,475
Return/(loss) and total comprehensive
income for the year – – – 3,736 (558) 1,605 4,783
Transfer of previously unrealised
losses on realisations of investments – – – 1,430 (1,430) – –
Purchase of treasury shares – – – – – (1,019) (1,019)
Issue of equity 12 856 – – – – 868
Cost of issue of equity – (11) – – – – (11)
Net dividends paid (note 9) – – – – – (4,317) (4,317)
At 31 March 2018 962 25,475 7 13,789 6,755 18,791 65,779
* These reserves amount to £21,201,000 (2018: £25,546,000) which is considered distributable.
Albion Venture Capital Trust PLC
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Statement of cash flows
Year ended Year ended
31 March 2019 31 March 2018
£’000 £’000
Cash flow from operating activities
Loan stock income received 2,868 2,124
Deposit interest received 30 7
Dividend income received 56 34
Investment management fees paid (1,263) (1,236)
Other cash payments (350) (321)
UK Corporation tax paid (68) (147)
Net cash flow from operating activities 1,273 461
Cash flow from investing activities
Purchase of fixed asset investments (2,292) (3,027)
Disposal of fixed asset investments 5,449 3,410
Net cash flow from investing activities 3,157 383
Cash flow from financing activities
Issue of share capital – 268
Cost of issue of equity (3) (2)
Dividends paid* (3,683) (3,755)
Purchase of own shares (including costs) (1,301) (1,089)
Net cash flow from financing activities (4,987) (4,578)
Decrease in cash and cash equivalents (557) (3,734)
Cash and cash equivalents at start of period 6,762 10,496
Cash and cash equivalents at end of period 6,205 6,762
Cash and cash equivalents comprise
Cash at bank 6,205 6,762
Cash equivalents – –
Total cash and cash equivalents 6,205 6,762
* The equity dividends paid shown in the cash flow are different to the dividends disclosed in note 9 as a result of the non-cash effect of
the Dividend Reinvestment Scheme.
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Notes to the Financial Statements
Basis of preparation
1.
The Financial Statements have been prepared in accordance
with applicable United Kingdom law and accounting standards,
including Financial Reporting Standard 102 (“FRS 102”), and with
the Statement of Recommended Practice “Financial Statements
of Investment Trust Companies and Venture Capital Trusts”
(“SORP”) issued by The Association of Investment Companies
(“AIC”).
The preparation of the Financial Statements
requires
management to make judgements and estimates that affect the
application of policies and reported amounts of assets, liabilities,
income and expenses. The most critical estimates and
judgements relate to the determination of carrying value of
investments at fair value through profit and loss (“FVTPL”). The
Company values investments by following the International
Private Equity and Venture Capital Valuation (“IPEV”) Guidelines
and further detail on the valuation techniques used are outlined
in note 2 below.
Company information can be found on page 2.
Accounting policies
2.
Fixed asset investments
The Company’s business is investing in financial assets with a
view to profiting from their total return in the form of income and
capital growth. This portfolio of financial assets is managed and
its performance evaluated on a fair value basis, in accordance
with a documented investment policy, and information about
the portfolio is provided internally on that basis to the Board.
In accordance with the requirements of FRS 102, those
undertakings in which the Company holds more than 20 per cent.
of the equity as part of an investment portfolio are not
accounted for using the equity method. In these circumstances
the investment is measured at FVTPL.
Upon
initial recognition (using trade date accounting)
investments, including loan stock, are classified by the Company
as FVTPL and are included at their initial fair value, which is cost
(excluding expenses incidental to the acquisition which are
written off to the Income statement).
Subsequently, the investments are valued at ‘fair value’, which is
measured as follows:
• Investments listed on recognised exchanges are valued at
their bid prices at the end of the accounting period or
otherwise at fair value based on published price quotations;
• Unquoted investments, where there is not an active market,
are valued using an appropriate valuation technique in
accordance with the IPEV Guidelines. Indicators of fair value
are derived using established methodologies including
earnings multiples, the level of third party offers received, cost
or price of recent investment rounds, net assets and industry
valuation benchmarks. Where price of recent investment is
used as a starting point for estimating fair value at
subsequent measurement dates, this has been benchmarked
using an appropriate valuation technique permitted by the
IPEV guidelines.
• In situations where cost or price of recent investment is used,
consideration is given to the circumstances of the portfolio
company since that date in determining fair value. This
includes consideration of whether there is any evidence of
deterioration or strong definable evidence of an increase in
value. In the absence of these indicators, the investment in
question is valued at the amount reported at the previous
reporting date. Examples of events or changes that could
indicate a diminution include:
• the performance and/or prospects of the underlying
business are significantly below the expectations on
which the investment was based;
• a significant adverse change either in the portfolio
company’s business or in the technological, market,
economic, legal or regulatory environment in which the
business operates; or
• market conditions have deteriorated, which may be
indicated by a fall in the share prices of quoted
businesses operating in the same or related sectors.
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 Income statement when a share
becomes ex-dividend.
Current assets and payables
Receivables and payables and cash are carried at amortised cost,
in accordance with FRS 102. There are no financial liabilities
other than payables.
Gains and losses on investments
Gains and losses arising from changes in the fair value of the
investments are included in the Income statement for the year as
a capital item and allocated to the unrealised capital reserve.
Albion Venture Capital Trust PLC
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Notes to the Financial Statements continued
Reserves
Share premium
This reserve accounts for the difference between the price paid
for shares and the nominal value of the shares, less issue costs.
Capital redemption reserve
This reserve accounts for amounts by which the issued share
capital is diminished through the repurchase and cancellation of
the Company’s own shares.
Unrealised capital reserve
Increases and decreases in the valuation of investments held at
the year end against cost are included in this reserve.
Realised capital reserve
The following are disclosed in this reserve:
• gains and losses compared to cost on the realisation of
investments;
• expenses, together with the related taxation effect, charged
in accordance with the above policies; and
• dividends paid to equity holders.
Other distributable reserve
The special reserve, treasury share reserve and the revenue
reserve were combined in 2012 to form a single reserve named
other distributable reserve.
This reserve accounts for movements from the revenue column
of the Income statement, the payment of dividends, the buy-
back of shares and other non-capital realised movements.
Dividends
Dividends by the Company are accounted for in the period in
which the dividend is paid or approved at the Annual General
Meeting.
Segmental reporting
The Directors are of the opinion that the Company is engaged in
a single operating segment of business, being investment in
smaller companies principally based in the UK.
Accounting policies (continued)
2.
Investment income
Equity income
Dividend income is included in revenue when the investment is
quoted ex-dividend.
Unquoted loan stock and other preferred income
Fixed returns on non-equity shares and debt securities are
recognised when the Company’s right to receive payment and
expect settlement is established. Where interest is rolled up
and/or payable at redemption then it is recognised as income
unless there is reasonable doubt as to its receipt.
Bank interest income
Interest income is recognised on an accruals basis using the rate
of interest agreed with the bank.
Investment management fee, performance incentive fee
and other expenses
All expenses have been accounted for on an accruals basis.
Expenses are charged through the other distributable reserve
except the following which are charged through the realised
capital reserve:
• 75 per cent. of management fees and performance incentive
fees are allocated to the realised capital reserve. This is in line
with the Board’s expectation that over the long term 75 per
cent. of the Company’s investment returns will be in the form
of capital gains; and
• expenses which are incidental to the purchase or disposal of an
investment are charged through the realised capital reserve.
Taxation
Taxation is applied on a current basis in accordance with FRS
102. Current tax is tax payable (refundable) in respect of the
taxable profit (tax loss) for the current period or past reporting
periods using the tax rates and laws that have been enacted or
substantively enacted at the financial reporting date. Taxation
associated with capital expenses is applied in accordance with
the SORP.
Deferred tax is provided in full on all timing differences at the
reporting date. Timing differences are differences between
taxable profits and total comprehensive income as stated in the
financial statements that arise from the inclusion of income and
expenses in tax assessments in periods different from those in
which they are recognised in the financial statements. As a VCT
the Company has an exemption from tax on capital gains. The
Company intends to continue meeting the conditions required to
obtain approval as a VCT in the foreseeable future. The Company
therefore, should have no material deferred tax timing differences
arising in respect of the revaluation or disposal of investments
and the Company has not provided for any deferred tax.
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Notes to the Financial Statements continued
Gains on investments
3.
Year ended Year ended
31 March 2019 31 March 2018
£’000 £’000
Unrealised gains on fixed asset investments 5,782 3,736
Realised (losses)/gains on fixed asset investments (75) 194
Gains on investments 5,707 3,930
Investment income
4.
Year ended Year ended
31 March 2019 31 March 2018
£’000 £’000
Loan stock interest and other fixed returns 2,755 2,479
Dividend income 56 34
Bank interest 31 7
2,842 2,520
Investment management fees
5.
Year ended Year ended
31 March 2019 31 March 2018
£’000 £’000
Investment management fee charged to revenue 318 310
Investment management fee charged to capital 954 928
1,272 1,238
Further details of the Management agreement under which the investment management fee and any performance incentive fee are
paid is given in the Strategic report on pages 12 and 13.
During the year, services of a total value of £1,324,000 (2018: £1,288,000), were purchased by the Company from Albion Capital
Group LLP; this includes £1,272,000 (2018: £1,238,000) of investment management fee and £52,000 (2018: £50,000) of secretarial
and administration fee. At the financial year end, the amount due to Albion Capital Group LLP in respect of these services disclosed
within payables was £334,000 (2018: £325,000).
Albion Capital Group LLP is, from time to time, eligible to receive arrangement fees and monitoring fees from portfolio companies.
During the year ended 31 March 2019, fees of £137,000 attributable to the investments of the Company were received by Albion
Capital Group LLP pursuant to these arrangements (2018: £169,000).
Albion Capital Group LLP, its partners and staff hold a total of 368,497 shares in the Company as at 31 March 2019.
The Company has entered into an offer agreement relating to the Offers with the Company’s investment manager Albion Capital
Group LLP, pursuant to which Albion Capital will receive a fee of 2.5 per cent. of the gross proceeds of the Offers and out of which
Albion Capital will pay the costs of the Offers, as detailed in the Prospectus.
Albion Venture Capital Trust PLC
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Notes to the Financial Statements continued
Other expenses
6.
Year ended Year ended
31 March 2019 31 March 2018
£’000 £’000
Directors’ fees (inc. NIC) 132 119
Auditor’s remuneration for statutory audit services (exc. VAT) 28 28
Secretarial and administration fee 52 50
Other administrative expenses 145 135
357 332
Directors’ fees
7.
The amounts paid to and on behalf of Directors during the year are as follows:
Year ended Year ended
31 March 2019 31 March 2018
£’000 £’000
Directors’ fees 121 110
National insurance 11 9
132 119
The Company’s key management personnel are the Directors. Further information regarding Directors’ remuneration can be found in
the Directors’ remuneration report on page 39.
Tax charge/(credit) on ordinary activities
8.
Year ended 31 March 2019 Year ended 31 March 2018
Revenue Capital Total Revenue Capital
£’000 £’000 £’000 £’000 £’000
UK corporation tax in respect of current year 401 (181) 220 350 (176)
UK corporation tax in respect of prior year (71) – (71) (77) –
Total 330 (181) 149 273 (176)
Total
£’000
174
(77)
97
Factors affecting the tax charge:
Year ended Year ended
31 March 2019 31 March 2018
£’000 £’000
Return on ordinary activities before taxation 6,920 4,880
Tax on profit at the standard rate of 19% (2018: 19%) 1,315 927
Factors affecting the charge:
Non-taxable gains (1,084) (747)
Income not taxable (11) (6)
Consortium relief in respect of prior years (71) (77)
149 97
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Notes to the Financial Statements continued
Tax charge/(credit) on ordinary activities (continued)
8.
The tax charge for the year shown in the Income statement is lower than the standard rate of corporation tax in the UK of 19 per cent.
(2018: 19 per cent.). The differences are explained above.
Consortium relief is recognised in the accounts in the period in which the claim is submitted to HMRC and is shown as tax in respect
of prior year.
Notes
(i) Venture Capital Trusts are not subject to corporation tax on capital gains.
(ii) Tax relief on expenses charged to capital has been determined by allocating tax relief to expenses by reference to the applicable corporation tax rate and
allocating the relief between revenue and capital in accordance with the SORP.
(iii) No deferred tax asset or liability has arisen in the year.
Dividends
9.
Year ended Year ended
31 March 2019 31 March 2018
£’000 £’000
Dividend of 2.50p per share paid on 31 July 2017 – 2,179
Dividend of 2.50p per share paid on 31 January 2018 – 2,178
Dividend of 2.50p per share paid on 31 July 2018 2,160 –
Dividend of 2.50p per share paid on 31 January 2019 2,140 –
Unclaimed dividends (22) (40)
4,278 4,317
In addition to the dividends summarised above, the Board has declared a first dividend for the year ending 31 March 2020 of 2.50
pence per share to be paid on 31 July 2019 to shareholders on the register on 12 July 2019. The total dividend will be approximately
£2,389,000. All dividends are paid from the other distributable reserve.
During the year, unclaimed dividends older than twelve years of £22,000 (2018: £40,000) were returned to the Company in
accordance with the terms of the Articles of Association and have been accounted for on an accruals basis.
10. Basic and diluted return per share
Year ended 31 March 2019 Year ended 31 March 2018
Revenue Capital Total Revenue Capital
Total
The return per share has been based
on the following figures:
Return attributable to equity shares (£’000) 1,837 4,934 6,771 1,605 3,178 4,783
Weighted average shares in issue
(adjusted for treasury shares) 86,066,296 87,117,574
Return attributable per equity share (pence) 2.13 5.73 7.86 1.80 3.70
5.50
The weighted average number of shares is calculated after adjusting for treasury shares of 11,517,188 (2018: 9,730,188).
There are no convertible instruments, derivatives or contingent share agreements in issue so basic and diluted return per share are the
same.
Albion Venture Capital Trust PLC
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Notes to the Financial Statements continued
Fixed asset investments
11.
31 March 2019 31 March 2018
£’000 £’000
Investments held at fair value through profit or loss
Unquoted equity 29,550 25,717
Unquoted loan stock 31,909 33,734
61,459 59,451
31 March 2019 31 March 2018
£’000 £’000
Opening valuation 59,451 55,473
Purchases at cost 1,851 3,027
Disposal proceeds (5,438) (3,334)
Realised (losses)/gains (75) 194
Movement in loan stock accrued income (113) 355
Unrealised gains 5,782 3,736
Closing valuation 61,459 59,451
Movement in loan stock accrued income
Opening accumulated movement in loan stock accrued income 951 596
Movement in loan stock accrued income (113) 355
Closing accumulated movement in loan stock accrued income 838 951
Movement in unrealised gains
Opening accumulated unrealised gains 13,789 8,623
Transfer of previously unrealised (gains)/losses to realised reserve on realisations of investments (244) 1,430
Unrealised gains 5,782 3,736
Closing accumulated unrealised gains 19,327 13,789
Historic cost basis
Opening book cost 44,712 46,255
Purchases at cost 1,851 3,027
Sales at cost (5,269) (4,570)
Closing book cost 41,294 44,712
The Company does not hold any assets as a result of the enforcement of security during the period, 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.
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Notes to the Financial Statements continued
Fixed asset investments (continued)
11.
Unquoted fixed asset investments are valued at fair value in accordance with the IPEV guidelines as follows:
31 March 2019 31 March 2018
Valuation methodology £’000 £’000
Third party valuation – Earnings multiple 37,919 41,015
Third party valuation – Discounted cash flow 10,195 12,500
Offer price 5,095 –
Cost or price of recent investment (reviewed for impairment or uplift) 5,095 2,842
Net assets 3,155 3,094
61,459 59,451
Where cost or price of recent investment has been used the valuer has assessed whether changes or events subsequent to the relevant
transaction would imply a change in the investment’s fair value.
Fair value investments had the following movements between valuation methodologies between 31 March 2018 and 31 March 2019:
Value as at
31 March 2019
Change in valuation methodology (2018 to 2019) £’000 Explanatory note
Third party valuation – Earnings multiple to offer price 3,282 Third party offer accepted
Third party valuation – Discounted cash flow to offer price 1,813 Third party offer accepted
The valuation will be the most appropriate valuation methodology for an investment within its market, with regard to the financial
health of the investment and the IPEV Guidelines. The Directors believe that, within these parameters, the methods used are the most
appropriate methods of valuation as at 31 March 2019.
FRS 102 and the SORP requires the Company to disclose the inputs to the valuation methods applied to its investments measured at
FVTPL in a fair value hierarchy. The table below sets out fair value hierarchy definitions using FRS102 s.11.27.
Fair value hierarchy Definition
Level 1 The unadjusted quoted price in an active market
Level 2 Inputs to valuations are from observable sources and are directly or indirectly derived from prices
Level 3 Inputs to valuations not based on observable market data
All fixed asset investments (unquoted equity, preference shares and loan stock) are valued according to Level 3 valuation methods.
The Level 3 valuation movements are therefore the same as the fixed asset investment valuation movements above.
FRS 102 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. 58 per cent. of the portfolio of investments is based on offer price, cost or price of recent
investment, net assets or is loan stock, and as such the Board considers that the assumptions used for their valuations are the most
reasonable. The Directors believe that changes to reasonable possible alternative assumptions for the valuations of the remainder of
the portfolio companies could result in an increase in the valuation of investments by £836,000 or a decrease in the valuation of
investments by £782,000. For valuations based on third party valuations, the Board considers that the most significant inputs are
earnings multiples and market value per room for care homes, and discount rates for renewable energy investments, which have been
adjusted to drive the above sensitivities.
Albion Venture Capital Trust PLC
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Notes to the Financial Statements continued
Significant interests
12.
The principal activity of the Company is to select and hold a portfolio of investments in unquoted securities. Although the Company,
through the Manager, will, in some cases, be represented on the board of the portfolio company, it will not take a controlling interest
or become involved in the management. The size and structure of the companies with unquoted securities may result in certain
holdings in the portfolio representing a participating interest without there being any partnership, joint venture or management
consortium agreement. The investments listed below are held as part of an investment portfolio and therefore, as permitted by FRS
102 section 14.4B, they are measured at fair value and not accounted for using the equity method.
The Company has interests of greater than 20 per cent. of the nominal value of any class (some of which are non-voting) of the
allotted shares in the portfolio companies as at 31 March 2019 as described below.
Net
Profit
(liabilities)/ Result % class
Registered before tax
assets for year and
Company postcode £’000
£’000 ended share type
Active Lives Care Limited EC1M 5QL n/a*
(1,414) 31 December 2017 22.2% Ordinary
G&K Smart Developments VCT Limited EC1M 5QL n/a*
262 31 December 2017 50.0% Ordinary
Kew Green VCT (Stansted) Limited EC1M 5QL 680
3,573 31 August 2018 45.2% Ordinary
Ryefield Court Care Limited EC1M 5QL n/a*
(1,381) 30 April 2018 23.6% Ordinary
Shinfield Lodge Care Limited EC1M 5QL n/a*
The Stanwell Hotel Limited EC1M 5QL n/a*
(223) 31 December 2017 35.3% Ordinary
3,546 31 August 2018 39.2% Ordinary
% total
voting
rights
22.2%
50.0%
45.2%
23.6%
35.3%
39.2%
*The company files filleted accounts which do not disclose this information.
13. Current assets
31 March 2019 31 March 2018
Trade and other receivables £’000 £’000
Other receivables 22 51
Investments awaiting completion* 441 –
UK corporation tax receivable 42 77
Prepayments and accrued income 9 8
514 136
* Investments awaiting completion consisted of Limitless Technology Limited and Imandra Inc which both completed in April 2019 and can be found in note 19.
The Directors consider that the carrying amount of receivables is not materially different to their fair value.
Payables: amounts falling due within one year
14.
31 March 2019 31 March 2018
£’000 £’000
Trade payables 12 12
UK Corporation tax payable 220 174
Accruals and deferred income 399 384
631 570
The Directors consider that the carrying amount of payables is not materially different to their fair value.
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Notes to the Financial Statements continued
15. Called up share capital
Allotted, called up and fully paid £’000
96,243,201 Ordinary shares of 1 penny each at 31 March 2018 962
775,061 Ordinary shares of 1 penny each issued during the year 8
97,018,262 Ordinary shares of 1 penny each at 31 March 2019 970
9,730,188 Ordinary shares of 1 penny each held in treasury at 31 March 2018 (97)
1,787,000 Ordinary shares purchased during the year to be held in treasury (18)
11,517,188 Ordinary shares of 1 penny each held in treasury at 31 March 2019 (115)
85,501,074 Ordinary shares of 1 penny each in circulation* at 31 March 2019 855
* Carrying one vote each
The Company purchased 1,787,000 Ordinary shares (2018: 1,467,000) to be held in treasury at a cost of £1,300,000 (2018:
£1,019,000) representing 1.8 per cent. (2018: 1.5 per cent.) of its issued share capital as at 31 March 2019. The shares purchased for
treasury were funded from the other distributable reserve.
The Company holds a total of 11,517,188 shares (2018: 9,730,188) in treasury at a nominal value of £115,000, representing 11.9 per
cent. of the issued Ordinary share capital as at 31 March 2019.
Under the terms of the Dividend Reinvestment Scheme Circular dated 10 July 2008, the following new Ordinary shares of nominal
value 1 penny per share were allotted during the year:
Aggregate Opening
nominal market price
value Issue price Net on allotment
Number of of shares (pence invested date (pence
Date of allotment shares allotted (£’000) per share) (£’000) per share)
31 July 2018 396,334 4 73.50 290 71.00
31 January 2019 378,727 4 75.60 285 75.50
775,061 8 575 575
16. Basic and diluted net asset value per share
31 March 2019 31 March 2018
Basic and diluted net asset value per share (pence) 79.00 76.00
The basic and diluted net asset value per share at the year end are calculated in accordance with the Articles of Association and are
based upon total shares in issue (adjusted for treasury shares) of 85,501,074 Ordinary shares (2018: 86,513,013).
There are no convertible instruments, derivatives or contingent share agreements in issue.
17. Capital and financial instruments risk management
The Company’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 8 of the Chairman’s statement.
The Company’s financial instruments comprise equity and loan stock investments in unquoted companies, cash balances and short
term receivables and payables which arise from its operations. The main purpose of these financial instruments is to generate cash
flow, revenue and capital appreciation for the Company’s operations. The Company has no gearing or other financial liabilities apart
from short term payables. The Company does not use any derivatives for the management of its Balance sheet.
Albion Venture Capital Trust PLC
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Notes to the Financial Statements continued
17. Capital and financial instruments risk management (continued)
The principal risks arising from the Company’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 Company has faced during the past year and there have been no changes in the objectives, policies or processes for
managing risks during the past year. The key risks are summarised below.
Investment risk
As a venture capital trust, it is the Company’s specific nature to evaluate and control the investment risk of its portfolio in unquoted
investments, details of which are shown on page 20. Investment risk is the exposure of the Company to the revaluation and
devaluation of investments. The main driver of investment risk is the operational and financial performance of the portfolio company
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 Company 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 fixed investment portfolio which is £61,459,000 (2018:
£59,451,000). Fixed asset investments form 91 per cent. of the net asset value as at 31 March 2019 (2018: 90 per cent.).
More details regarding the classification of fixed asset investments are shown in note 11.
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. As a venture capital trust the Company invests in unquoted companies in accordance
with the investment policy set out on page 3. The management of risk within the venture capital portfolio is addressed through careful
investment selection, by diversification across different industry segments, by maintaining a wide spread of holdings in terms of
financing stage and by limitation of the size of individual holdings. The Directors monitor the Manager’s compliance with the
investment policy, review and agree policies for managing this risk and monitor the overall level of risk on the investment portfolio on
a regular basis.
Valuations are based on the most appropriate valuation methodology for an investment within its market, with regard to the financial
health of the investment and the IPEV Guidelines. Details of the sectors in which the Company are currently invested are shown in the
pie chart in the Strategic report on page 9.
As required under FRS 102 section 34.29, 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 fixed asset investment portfolio is sensitive to a 10 per cent. change based on
the current economic climate. The impact of a 10 per cent. change has been selected as this is considered reasonable given the current
level of volatility observed both on a historical basis and future expectations.
The sensitivity of a 10 per cent. increase or decrease in the valuation of the fixed asset investments (keeping all other variables
constant) would increase or decrease the net asset value and return for the year by £6,146,000 (2018: £5,945,000).
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Notes to the Financial Statements continued
17. Capital and financial instruments risk management (continued)
Interest rate risk
The Company is exposed to a fixed and floating rate interest rate risk on its financial assets. On the basis of the Company’s analysis,
it was estimated that a rise of 1 per cent. in all interest rates would have increased total return before tax for the year by approximately
£102,000 (2018: £70,000). Furthermore, it was considered that a fall of interest rates below current levels during the year would have
been unlikely.
The weighted average effective interest rate applied to the Company’s fixed rate assets during the year was approximately 9.5 per
cent. (2018: 7.6 per cent.). The weighted average period to maturity for the fixed rate assets is approximately 4.5 years (2018:
4.9 years).
The Company’s financial assets and liabilities, all denominated in Sterling, consist of the following:
31 March 2019 31 March 2018
Non- Non-
Fixed Floating interest Floating interest
rate rate bearing Total Fixed rate rate bearing Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Unquoted equity – – 29,550 29,550 – – 25,717 25,717
Unquoted loan stock 31,311 270 328 31,909 32,279 281 1,174 33,734
Receivables * – – 465 465 – – 51 51
Payables* – – (411) (411) – – (396) (396)
Cash – 6,205 – 6,205 – 6,762 – 6,762
31,311 6,475 29,932 67,718 32,279 7,043 26,546 65,868
* The receivables and payables do not reconcile to the Balance sheet as prepayments and tax receivable/(payable) 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 Company. The Company is exposed to credit risk through its receivables, investment in unquoted loan stock, and
through the holding of cash on deposit with banks.
The Manager evaluates credit risk on loan stock 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. For investments made prior to 6 April 2018, which account for all
of the loan stock value, typically loan stock instruments will have a fixed or floating charge, which may or may not be subordinated,
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.
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 Company’s total gross credit risk as at 31 March 2019 was limited to £31,909,000 of unquoted loan stock instruments (2018:
£33,734,000), £6,205,000 cash deposits with banks (2018: £6,762,000) and £514,000 of other receivables (2018: £51,000).
At the Balance sheet date, the cash held by the Company was held with Lloyds Bank plc, Scottish Widows Bank plc (part of Lloyds
Banking Group), Barclays Bank plc and National Westminster Bank plc. Credit risk on cash transactions was mitigated by transacting
with counterparties that are regulated entities subject to prudential supervision, with high credit ratings assigned by international
credit-rating agencies.
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Notes to the Financial Statements continued
17. Capital and financial instruments risk management (continued)
The Company has an informal policy of limiting counterparty banking and floating rate note exposure to a maximum of 20 per cent.
of net asset value for any one counterparty.
The credit profile of the unquoted loan stock is described under liquidity risk.
Liquidity risk
Liquid assets are held as cash on current account, on deposit or short term money market account. Under the terms of its Articles, the
Company has the ability to borrow up to 10 per cent. of its adjusted capital and reserves of the latest published audited Balance sheet,
which amounts to £6,516,000 as at 31 March 2019 (2018: £6,362,000).
The Company has no committed borrowing facilities as at 31 March 2019 (2018: £nil) and had cash balances of £6,205,000 (2018:
£6,762,000). The main cash outflows are for new investments, buy-back of shares and dividend payments, which are within the control
of the Company. The Manager formally reviews the cash requirements of the Company on a monthly basis, and the Board on a
quarterly basis as part of its review of management accounts and forecasts. All the Company’s financial liabilities are short term in
nature and total £631,000 for the year to 31 March 2019 (2018: £570,000).
The carrying value of loan stock investments as analysed by expected maturity dates is as follows:
31 March 2019 31 March 2018
Fully Valued Fully Valued
performing Past due below cost Total performing Past due below cost Total
Redemption date £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Less than one year 6,368 2,318 4,305 12,991 4,480 981 4,093 9,554
1-2 years 4,403 299 – 4,702 4,785 – – 4,785
2-3 years 2,110 1,061 – 3,171 4,332 124 184 4,640
3-5 years 820 – – 820 2,726 961 – 3,687
5+ years 9,725 500 – 10,225 7,649 3,419 – 11,068
Total 23,426 4,178 4,305 31,909 23,972 5,485 4,277 33,734
Loan stock can be past due as a result of interest or capital not being paid in accordance with contractual terms. The cost of loan stock
valued below cost is £5,039,000 (2018: £6,443,000).
In view of the information shown, the Board considers that the Company is subject to low liquidity risk.
Fair values of financial assets and financial liabilities
All the Company’s financial assets and liabilities as at 31 March 2019 are stated at fair value as determined by the Directors, with the
exception of receivables, payables and cash which are carried at amortised cost. There are no financial liabilities other than payables.
The Company’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.
18. Commitments and contingencies
The Company had no financial commitments in respect of investments at 31 March 2019.
There are no contingent liabilities or guarantees given by the Company as at 31 March 2019 (31 March 2018: nil).
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Notes to the Financial Statements continued
19. Post balance sheet events
Since 31 March 2019 the Company has had the following post balance sheet events:
• Disposal of The Stanwell Hotel Limited for £3.2 million;
• Disposal of Earnside Energy Limited for £1.8 million;
• Investment of £384,000 in Clear Review Limited;
• Investment of £320,000 in Limitless Technology Limited;
• Investment of £121,000 in Imandra Inc; and
• Investment of £71,000 in Symetrica Limited.
Albion VCTs Prospectus Top Up Offers 2018/19
The following new Ordinary shares of nominal value 1 penny per share were allotted under the Albion VCTs Prospectus Top Up Offers
2018/19 after 31 March 2019:
Aggregate Opening
nominal value Net consideration market price on
Number of of shares Issue price received allotment date
Date of allotment shares allotted £’000 (pence per share) £’000 (pence per share)
1 April 2019 2,517,008 25 78.90 1,956 73.00
1 April 2019 554,593 5 79.30 431 73.00
1 April 2019 6,375,602 64 79.70 4,955 73.00
12 April 2019 290,390 3 78.90 226 73.75
12 April 2019 40,353 – 79.30 31 73.75
12 April 2019 288,765 3 79.70 224 73.75
10,066,711 101 7,823
20. Related party transactions
Other than transactions with the Manager as disclosed in note 5, there are no related party transactions or balances
requiring disclosure.
Albion Venture Capital Trust PLC
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Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Albion Venture Capital Trust PLC (the “Company”) will be held at the
The Charterhouse, Charterhouse Square, London EC1M 6AN on 21 August 2019 at noon for the following purpose:
To consider and, if thought fit, to pass the following resolutions, of which numbers 1 to 7 will be proposed as ordinary resolutions and
numbers 8 and 9 as special resolutions.
Ordinary Business
1. To receive and adopt the Company’s accounts for the year ended 31 March 2019 together with the report of the Directors and
Auditor.
2. To approve the Directors’ remuneration report for the year ended 31 March 2019.
3. To re-elect John Kerr as a Director of the Company.
4. To re-elect Jeff Warren as a Director of the Company.
5. To re-appoint BDO LLP as Auditor of the Company to hold office from the conclusion of the meeting to the conclusion of the
next meeting at which the accounts are to be laid.
6. To authorise the Directors to agree the Auditor’s remuneration.
Authority to allot shares
Special Business
7.
That the Directors be generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006 (the
“Act”) to allot shares in the Company up to an aggregate nominal amount of £214,170 (representing approximately 20 per
cent. of the issued share capital as at the date of the Notice) provided that this authority shall expire 15 months from the date
that this resolution is passed, or if earlier, at the conclusion of the next Annual General Meeting, but so that the Company may,
before the expiry of such period, make an offer or agreement which would or might require shares to be allotted or rights to
subscribe for or convert securities into shares to be granted after such expiry and the Directors may allot shares pursuant to such
an offer or agreement as if the authority had not expired.
Authority for the disapplication of pre-emption rights
8.
That, subject to the authority and conditional on the passing of resolution number 7, the Directors be empowered, pursuant to
section 570 and 573 of the Act, to allot equity securities (within the meaning of section 560 of the Act) for cash pursuant to the
authority conferred by resolution number 7 and/or to sell ordinary shares held by the Company as treasury shares for cash as if
section 561(1) of the Act did not apply to any such allotment or sale.
Under this power the Directors may impose any limits or restrictions and make any arrangements which they deem necessary
or expedient to deal with any treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or
laws of, any territory or other matter, arising under the laws of, or the requirements of any recognised regulatory body or any
stock exchange in, any territory or any other matter.
This power shall expire 15 months from the date that this resolution is passed or, if earlier, the conclusion of the next Annual
General Meeting of the Company, save that the Company may, before such expiry, make an offer or agreement which would or
might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of any
such offer or agreement as if this power had not expired.
Authority to purchase own shares
9.
That, subject to and in accordance with the Company’s Articles of Association, the Company be generally and unconditionally
authorised, pursuant to and in accordance with section 701 of the Act, to make market purchases (within the meaning of
Section 693(4) of the Act) of Ordinary shares of 1 penny each in the capital of the Company (“Ordinary shares”), on such terms
as the Directors think fit, provided always that:
(a) the maximum aggregate number of Ordinary shares hereby authorised to be purchased is 16,052,037 shares or, if lower,
such number of Ordinary shares representing 14.99 per cent. of the issued Ordinary share capital of the Company as at
the date of the passing of this resolution;
(b) the minimum price, exclusive of any expenses, which may be paid for an Ordinary share is 1 penny;
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Notice of Annual General Meeting continued
(c) the maximum price, exclusive of any expenses, which may be paid for a share shall be an amount equal to the higher of
(a) 105% of the average of the middle market quotations for the share, as derived from the London Stock Exchange Daily
Official List, for the five business days immediately preceding the date on which the share is purchased; and (b) the
amount stipulated by Article 5(1) of the Buy-back and Stabilisation Regulation 2003;
(d) the authority hereby conferred shall, unless previously revoked, varied or renewed, expire 15 months from the date that
this resolution is passed or, if earlier, at the conclusion of the next Annual General Meeting; and
(e) the Company may enter into a contract or contracts to purchase shares under this authority before the expiry of the
authority which will or may be executed wholly or partly after the expiry of the authority, and may make a purchase of
shares in pursuance of any such contract or contracts as if the authority conferred hereby had not expired.
By Order of the Board
Albion Capital Group LLP
Company Secretary
Registered office
1 Benjamin Street,
London, EC1M 5QL
1 July 2019
Albion Venture Capital Trust PLC is registered in England and Wales with number 03142609
Albion Venture Capital Trust PLC
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Notice of Annual General Meeting continued
Notes
1. Members entitled to attend, speak and vote at the Annual General Meeting (“AGM”) may appoint a proxy or proxies (who need
not be a member of the Company) to exercise these rights in their place at the meeting. A member may appoint more than one
proxy, provided that each proxy is appointed to exercise the rights attached to different shares. Proxies may only be
appointed by:
• completing and returning the Form of Proxy enclosed with this Notice to Computershare Investor Services PLC, The
Pavilions, Bridgwater Road, Bristol, BS99 6ZZ;
• going to www.investorcentre.co.uk/eproxy and following the instructions provided there; or
• by having an appropriate CREST message transmitted, if you are a user of the CREST system (including CREST personal
members).
Return of the Form of Proxy will not preclude a member from attending the meeting and voting in person. A member may not
use any electronic address provided in the Notice of this meeting to communicate with the Company for any purposes other
than those expressly stated.
To be effective the Form of Proxy must be completed in accordance with the instructions and received by the Registrars of the
Company by noon on 19 August 2019.
2. Any person to whom this Notice is sent who is a person nominated under section 146 of the Companies Act 2006 (‘the Act’) to
enjoy information rights (a “Nominated Person”) may, under an agreement between him or her and the member by whom he
or she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the AGM. If a
Nominated Person has no such proxy appointment right or does not wish to exercise it, he or she may, under any such
agreement, have a right to give instructions to the member as to the exercise of voting rights.
The statement of rights of members in relation to the appointment of proxies in note 1 above does not apply to Nominated
Persons. The rights described in that note can only be exercised by members of the Company.
3. To be entitled to attend and vote at the AGM (and for the purpose of the determination by the Company of the votes they may
cast), members must be registered in the register of members of the Company at noon on 19 August 2019 (or, in the event of
any adjournment, on the date which is two working days before the time of the adjourned meeting). Changes to the register of
members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at
the meeting.
4. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for
this AGM and any adjournment(s) by using the procedures described in the CREST Manual. CREST personal members or other
CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their
CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a
“CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK and Ireland Limited’s specifications,
and must contain the information required for such instruction, as described in the CREST Manual (available via
www.euroclear.com/CREST). The message, regardless of whether it constitutes the appointment of a proxy or is an amendment
to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the
issuer's agent by noon on 19 August 2019. For this purpose, the time of receipt will be taken to be the time (as determined by
the time stamp applied to the message by the CREST Application Host) from which the issuer's agent is able to retrieve the
message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies
appointed through CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK and
Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings and
limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member
concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting
service provider, to procure that his or her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary
to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST
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Notice of Annual General Meeting continued
members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of
the CREST Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
5. Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its
powers as a member provided that they do not do so in relation to the same shares.
6. A copy of this Notice, and other information regarding the meeting, as required by section 311A of the Act, is available from
www.albion.capital/funds/AAVC under the “Fund Reports” section.
7. Any member attending the meeting has the right to ask questions. The Company must cause to be answered any such question
relating to the business being dealt with at the meeting but no such answer need be given if (a) to do so would interfere unduly
with the preparation for the meeting or involve the disclosure of confidential information, (b) the answer has already been given
on a website in the form of an answer to a question, or (c) it is undesirable in the interests of the Company or the good order of
the meeting that the question be answered.
8. Copies of contracts of service and letters of appointment between the Directors and the Company, together with the Register
of Directors’ Interests in the Ordinary shares of the Company, will be available for inspection at the Registered Office of the
Company during normal business hours from the date of this Notice until the conclusion of the meeting, and at the place of the
meeting for at least 15 minutes prior to the meeting until its conclusion. In addition, a copy of the Articles of Association will be
available for inspection at the Company’s registered office from the date of the Notice until the conclusion of the meeting, and
at the place of the meeting for at least 15 minutes prior to the meeting until its conclusion.
9. Under section 527 of the Act members meeting the threshold requirements set out in that section have the right to require the
Company to publish on a website a statement setting out any matter relating to: (i) the audit of the Company’s accounts
(including the Auditor’s report and the conduct of the audit) that are to be laid before the AGM: or (ii) any circumstances
connected with an Auditor of the Company ceasing to hold office since the previous meeting at which the annual accounts and
reports were laid in accordance with section 437 of the Act. The Company may not require the members requesting any such
website publication to pay its expenses in complying with section 527 and 528 of the Act. Where the Company is required to
place a statement on a website under section 527 of the Act, it must forward the statement to the Company’s Auditor not later
than the time when it makes the statement available on the website. The business which may be dealt with at the AGM includes
any statement that the Company has been required under section 527 of the Act to publish on a website.
10. Members satisfying the thresholds in Section 338 of the Companies Act 2006 may require the Company to give, to members
of the Company entitled to receive notice of the AGM, notice of a resolution which those members intend to move (and which
may properly be moved) at the AGM. A resolution may properly be moved at the AGM unless (i) it would, if passed, be ineffective
(whether by reason of any inconsistency with any enactment of the Company’s constitution or otherwise); (ii) it is defamatory
of any person; or (iii) it is frivolous or vexatious. The business which may be dealt with at the AGM includes a resolution circulated
pursuant to this right. A request made pursuant to this right may be in hard copy or electronic form, must identify the resolution
of which notice is to be given, must be authenticated by the person(s) making it and must be received by the Company not later
than 6 weeks before the date of the AGM.
11. Members satisfying the thresholds in Section 388A of the Companies Act 2006 may request the Company to include in the
business to be dealt with at the AGM any matter (other than a proposed resolution) which may properly be included in the
business at the AGM.
A matter may properly be included in the business at the AGM unless (i) it is defamatory of any person or (ii) it is frivolous or
vexatious. A request made pursuant to this right may be in hard copy or electronic form, must identify the matter to be included
in the business, must be accompanied by a statement setting out the grounds for the request, must be authenticated by the
person(s) making it and must be received by the Company not later than 6 weeks before the date of the AGM.
12. As at 28 June 2019 being the latest practicable date prior to the publication of this Notice, the Company’s issued share capital
consists of 107,084,973 Ordinary shares with a nominal value of 1 penny each. The Company also holds 11,517,188 Ordinary
shares in treasury. Therefore, the total voting rights in the Company as at 28 June 2019 are 95,567,785.
Albion Venture Capital Trust PLC
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Dividend history for Albion Venture Capital Trust PLC
‘C Shares’ and Albion Prime VCT PLC (unaudited)
Proforma
Albion Prime
C shares VCT PLC
Total shareholder return to 31 March 2019: (pence per share) (pence per share)
Total dividends paid during the year ended : 31 March 1998 2.00 1.10
31 March 1999 8.75 6.40
31 March 2000 2.70 1.50
31 March 2001 4.80 4.25
31 March 2002 7.60 2.75
31 March 2003 7.70 2.00
31 March 2004 8.20 1.25
31 March 2005 9.75 2.20
31 March 2006 11.75 4.50
31 March 2007 10.00 4.00
31 March 2008 10.00 5.00
31 March 2009 10.00 4.50
31 March 2010 5.00 2.00
31 March 2011 5.00 3.00
31 March 2012 5.00 3.00
31 March 2013 5.00 3.70
31 March 2014 5.00 4.40
31 March 2015 5.00 4.40
31 March 2016 5.00 4.40
31 March 2017 5.00 4.40
31 March 2018 5.00 4.40
31 March 2019 5.00 4.40
Total dividends paid to 31 March 2019 143.25 77.55
Net asset value as at 31 March 2019 79.00 69.53
Total shareholder return to 31 March 2019 222.25 147.08
Notes
• The Ordinary shares and the C shares merged on an equal basis.
• The proforma shareholder returns presented above for Prime are based on the dividends paid to shareholders before the merger and the pro-rata net asset value per
share and pro-rata dividends per share paid to 31 March 2019. This proforma is based upon 0.8801 Albion Venture Capital Trust PLC shares for every Albion Prime VCT
PLC share which merged with Albion Venture Capital Trust PLC on 25 September 2012.
• Dividends paid before 5 April 1999 were paid to qualifying shareholders inclusive of the associated tax credit. The dividends for the year to 31 March 1999 were
maximised in order to take advantage of this tax credit.
• The above table excludes the tax benefits investors received upon subscription for shares in the Company.
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Albion Venture Capital Trust PLC
Albion Venture Capital Trust PLC
Annual Report and Financial
Statements for the year
ended 31 March 2019
16 This report is printed on Amadeus offset a totally recycled paper
A member of the Association
of Investment Companies
produced using 100% recycled waste at a mill that has been
awarded the ISO 14001 certificate for environmental management.
The pulp is bleached using a totally chlorine free (TCF) process.
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