Albion Venture Capital Trust PLC
Annual Report and Financial
Statements for the year
ended 31 March 2021
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261393 Albion Capital pp01-pp09.qxp 21/06/2021 18:19 Page 1
Contents
Page
2 Company information
3 Investment policy
3 Financial calendar
4 Financial highlights
6 Chairman’s statement
10 Strategic report
22 The Board of Directors
23 The Manager
25 Portfolio of investments
27 Portfolio companies
32 Directors’ report
37 Statement of Directors’ responsibilities
38 Statement of corporate governance
43 Directors’ remuneration report
46 Independent Auditor’s report
51 Income statement
52 Balance sheet
53 Statement of changes in equity
54 Statement of cash flows
55 Notes to the Financial Statements
69 Notice of Annual General Meeting
Albion Venture Capital Trust PLC
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Company information
Company number
03142609
Directors
Richard Glover, Chairman
John Kerr ACMA
Ann Berresford ACA
Richard Wilson
Country of incorporation
United Kingdom
Legal form
Public Limited Company
Auditor
BDO LLP
55 Baker Street
London, W1U 7EU
Corporate broker
Panmure Gordon (UK) Limited
One New Change
London, EC4M 9AF
Taxation adviser
Philip Hare & Associates LLP
Hamilton House
1 Temple Avenue
London, EC4Y 0HA
Manager, company secretary, AIFM and
registered office
Albion Capital Group LLP
1 Benjamin Street
London, EC1M 5QL
Legal adviser
Bird & Bird LLP
12 New Fetter Lane
London, EC4A 1JP
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol, BS99 6ZZ
Depositary
Ocorian Depositary (UK) Limited
Level 5, 20 Fenchurch Street
London, EC3M 3BY
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 contact Computershare
Investor Services PLC:
Tel: 0370 873 5849 (UK National Rate call, lines are open 8.30am – 5.30pm; Mon – Fri, calls are recorded)
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.
Shareholders can also contact the Chairman directly on: AAVCchair@albion.capital
Financial adviser information
For enquiries relating to the performance of the Company, and information for financial advisers, please contact
the Business Development team at 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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Investment policy
Albion Venture Capital Trust PLC (the “Company”) is a Venture Capital Trust and the investment policy is intended to produce a regular
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.
Financial calendar
Record date for first interim dividend and special dividend
9 July 2021
Payment of first interim dividend and special dividend 30 July 2021
Annual General Meeting
Announcement of Half-yearly results for the six months ending 30 September 2021
Payment of second dividend (subject to Board approval)
Noon on 7 September 2021
December 2021
31 January 2022
Albion Venture Capital Trust PLC
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261393 Albion Capital pp01-pp09.qxp 21/06/2021 18:19 Page 4
Financial highlights
7.10p
4.24p
Basic and diluted total return per share for
the year ended 31 March 2021†
Total tax-free dividend per share paid during
the year ended 31 March 2021
73.13p
Net asset value per share as at
31 March 2021
237.17p Total shareholder value to 31 March 2021†
15.00p
Special dividend declared of 15.00 pence per
share payable on 30 July 2021 to
shareholders on the register on 9 July 2021
6.3%
Annualised return since launch
(without tax relief)
Total shareholder value relative to the
FTSE All-Share Index total return
(in both cases with dividends reinvested)
)
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Total shareholder value
FTSE All-Share Index total return
Source: Albion Capital Group LLP
Methodology: Total shareholder value, 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.
† These are considered APMs, see note 2 on page 12 for further explanation.
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Albion Venture Capital Trust PLC
261393 Albion Capital pp01-pp09.qxp 21/06/2021 18:19 Page 5
Financial highlights continued
31 March 2021 31 March 2020
(pence per share) (pence per share)
Opening net asset value 70.13 79.00
Capital return/(loss) 5.64 (5.98)
Revenue return 1.46 1.88
Total return/(loss) 7.10 (4.10)
Impact from share capital movements 0.14 0.23
Dividends paid (4.24) (5.00)
Net asset value 73.13 70.13
Total dividends paid to 31 March 2021 164.04
Net asset value on 31 March 2021 73.13
Total shareholder value to 31 March 2021 237.17
A more detailed breakdown of the dividends paid per year can be found at www.albion.capital/funds/AAVC under the ‘Dividend
History’ section.
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 at
www.albion.capital/funds/AAVC under the ‘Financial summary for previous funds’ section.
In addition to the dividends summarised above, the Board has declared a first dividend for the year ending 31 March 2022
of 1.83 pence per share to be paid on 30 July 2021 to shareholders on the register on 9 July 2021. The Board has also
declared a special dividend of 15.00 pence per share, also payable on 30 July 2021 to shareholders on the register on 9 July
2021. Further details can be found in the Chairman’s statement on page 6.
Albion Venture Capital Trust PLC – Performance data
1 year return
3 year return
5 year return
10 year return
0%
10%
20%
30%
40%
50%
60%
Increase in shareholder value
1 year average 10.3% p.a.
3 year average 5.0% p.a.
5 year average 7.0% p.a.
10 year average 5.2% p.a.
The graph above shows the one year, three year, five year and ten year total return to shareholders. This return comprises of dividends
paid and the change in net asset value over the relevant periods.
Source: Albion Capital Group LLP
Albion Venture Capital Trust PLC
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Chairman’s statement
Introduction
I am delighted to announce that your Company has achieved a
positive total return for the year of 7.10 pence per share representing
a 10.12% return on opening Net Asset Value (“NAV”). This is against
the backdrop of a very challenging year for many businesses as a
result of the Coronavirus pandemic which continues to disrupt our
economy. This result was primarily due to the sale of the Company’s
three care homes for the elderly generating proceeds of £29.6 million
in March 2021, which the Manager successfully managed to
negotiate with a 2.4x return on exit against the worst conditions the
care home sector has experienced in many years. Although the full
implications of the Covid-19 pandemic are still unknown, I am
optimistic that our portfolio companies will continue to add value,
and we can still find new investment opportunities which will increase
shareholder value over the longer term.
Richard Glover
Chairman
Results and dividends
As at 31 March 2021, the NAV was £72.7 million or 73.13 pence
per share, compared to £70.6 million or 70.13 pence per share as
at 31 March 2020, after the payment of total tax-free dividends
of 4.24 pence per share. The total return before taxation was
£7.3 million compared to a loss of £3.8 million for the previous
year. The positive progress of several of our portfolio companies
is discussed later in this statement and in the Strategic report on
page 11.
In line with the variable dividend policy targeting around 5% of
NAV per annum, announced last year, the Company paid
dividends totalling 4.24 pence per share during the year to
31 March 2021 (31 March 2020: 5.00 pence per share).
The successful sale of the Company’s three care homes
generated substantial cash proceeds for the Company. These
disposals represented a significant proportion of the Company’s
NAV and thus, their disposal has increased the cash balances of
the Company to £43.6 million at 31 March 2021, representing
61% of NAV.
It is clear to the Board that whilst it is important for a Venture
Capital Trust, which by its nature has illiquid investments, to hold
sufficient cash to manage operating costs, to service dividends
and buy-backs and, most importantly, to make follow on and new
investments as opportunities arise, this must be balanced against
the requirements of a Venture Capital Trust to meet a minimum
threshold of 80% invested in qualifying investments.
As a result of these significant disposals and the additional
liquidity they generated, to maintain the Company’s qualifying
VCT status, the Board has concluded that a substantial special
dividend should be paid to shareholders. The Board is therefore
pleased to declare a special dividend of 15.00 pence per share
which will be paid in addition to the first interim dividend for the
year ending 31 March 2022 of 1.83 pence per share to be paid
on 30 July 2021 to shareholders on the register on 9 July 2021.
The combined dividend will result in a total of £16.7 million being
paid to shareholders, which is 23% of the 31 March 2021 NAV.
Whilst this reduces the Company’s assets, it provides a significant
return to shareholders and, for those that wish to take it, an
opportunity to re-invest the combined special dividend and first
interim dividend in the Company via the Dividend Reinvestment
Scheme (“DRIS”) as described below.
The Board will continue to monitor the Company’s qualifying
holdings requirement throughout the year in order to maintain its
status under VCT legislation. If required, any additional special
dividend will be announced in December 2021 as part of the Half-
yearly Report to 30 September 2021. This will provide the Board
more time to clarify the Company’s cash position in the context of
the HMRC qualifying holdings requirements, which is dependent
on several factors, including the new investment rate, the level of
share buybacks and the operating expenses of the Company.
Investment realisations
The strong return for the year was primarily driven by a number of
successful exits which generated proceeds of £31.9 million for the
Company. As noted above, the bulk of the proceeds came from the
sale of the Company’s three care homes for the elderly; Active Lives
Care, Ryefield Court Care, and Shinfield Lodge Care. The first
investments in the homes were made over 5 years ago and the sale
generated proceeds of £29.6 million which represents a 2.4x return
on cost (including interest received), an excellent result for the
Company. The homes were trading at mature occupancy levels.
The sale of G.Network Communications was also completed in
December 2020, with a strong headline total return on all monies
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Albion Venture Capital Trust PLC
261393 Albion Capital pp01-pp09.qxp 21/06/2021 18:19 Page 7
Chairman’s statement continued
invested of 3.8x cost, although the terms of
the sale will see proceeds being received in
three years’ time. In the current year, this still
reflects a substantial £1.1 million of realised
gains. In addition to this, Clear Review was sold
during the year, generating 2.1x return on cost.
Further details on realisations can be found in
the table on page 26.
Investment performance and progress
Some of our portfolio companies have
performed well despite the Covid-19 pandemic
and this, including realised gains on disposals,
has contributed to the total uplift in value of
£6.5 million to the Company’s investments for
the year. Our women’s health clinic, The
Evewell (Harley Street), has been trading well
following its re-opening in May 2020 and
contributed to a £1.0 million uplift for the year.
Other investments with uplifts in the year were
Phrasee (£0.9 million) which continues to trade
well and Healios (£0.3 million) which has been
revalued due to a recent funding round.
Not surprisingly our hotel at Stansted Airport,
owned by Kew Green (VCT) Stansted, continues
to be affected by the ongoing international
travel disruption caused by the Covid-19
pandemic. As a result of this, the valuation has
been written down by a further £0.5 million. In
addition to this, the valuation of Avora has
been written down by £0.5 million due to its
progress being behind plan.
The Company has been an active investor
during the year with £5.0 million invested into
portfolio companies, of which £3.5 million was
invested across five new portfolio companies,
all of which are expected to require further
investment as the companies prove themselves
and grow. These are:
• £1.3 million into Threadneedle Software
Holdings (trading as Solidatus), a provider
of data lineage software to enterprise
customers in regulated sectors, which
allows them to rapidly discover, visualise,
catalogue and understand how data
flows through their systems;
• £0.9 million into Seldon Technologies,
a software company that enables
enterprises to deploy Machine Learning
models in production;
• £0.7 million into The Voucher Market
(trading as WeGift), a cloud platform
that enables corporates to purchase
digital gift cards and to distribute them
to employees and customers;
• £0.3 million into uMedeor (trading as
uMed), a software platform that enables
life science organisations to use patient
data, in a compliant way, to recruit
participants for clinical trials; and
• £0.3 million into TransFICC, a provider
of a connectivity solution, connecting
financial institutions with trading venues
via a single API.
Following these new and follow on investments
made, software and other technology now
accounts for 33% of our portfolio (excluding
cash), an increase from 22% last year.
A full list of the Company's investments and
disposals, including their movements in value
for the year, can be found in the Portfolio of
investments section on pages 25 and 26 of the
full Annual Report and Financial Statements.
Risks and uncertainties
The wide reaching implications of the Covid-19
crisis continues to be the key risk facing the
Company, including its impact on the UK and
Global economies. There may still also be
further potential implications of the UK’s
departure from the European Union which may
adversely affect our underlying portfolio
is continually
companies. The Manager
assessing the exposure to such risks for each
portfolio company, and where possible
appropriate mitigating actions are being taken.
A detailed analysis of the other risks and
uncertainties facing the business is shown in
the Strategic report on pages 18 and 20.
Dividend Reinvestment Scheme (“DRIS”)
The Company continues to offer a DRIS
whereby shareholders can elect to receive
dividends in the form of new shares. For
shareholders not currently in the DRIS, the
Company is offering shareholders the option
to elect for a one-off sign up to have this
combined special dividend and first interim
dividend reinvested into new shares through
the DRIS. Shareholders can take advantage of
‘
total return for the
year of 7.10 pence
per share
representing a
10.12% return on
opening Net
Asset Value
’
‘
successfully sold
our first technology
investment which
generated a
2.1 times return
’
Albion Venture Capital Trust PLC
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Chairman’s statement continued
‘
a number of
successful exits
which generated
proceeds of
£31.9 million for
the Company
’
‘
The Board is
therefore pleased
to declare a
special dividend
of 15.00 pence
per share
’
8
Albion Venture Capital Trust PLC
this by emailing AAVCchair@albion.capital
before midday on 14 July 2021. To elect for the
reinvestment, please ensure your email
contains your full name, Shareholder Reference
Number, telephone number and confirms you
have read the DRIS terms and conditions.
By re-investing the combined special dividend
and first interim dividend in the capital of the
Company, shareholders would be expected to
broadly maintain the level of relative income
they have been receiving from the Company
under the variable dividend policy. The terms
and conditions for the DRIS can be found on
the Company’s webpage on the Manager’s
website at www.albion.capital/funds/AAVC
under the Fund reports section.
Share buy-backs
It remains the Board’s policy to buy-back
shares in the market, subject to the overall
constraint that such purchases are in the
Company’s
the
maintenance of sufficient cash resources for
investment in new and existing portfolio
companies and the continued payment of
dividends to shareholders.
interest. This
includes
It is the Board’s intention that such buy-backs
should be at around a 5% discount to net
asset value, in so far as market conditions and
liquidity permit. The Board continues to review
the use of buy-backs and is satisfied that it is
an important means of providing market
liquidity for shareholders.
Details of the Company’s share buy-backs
during the year can be found in note 15.
Annual General Meeting
The Board has been considering the current
rules around the Covid-19 pandemic on
the arrangements for our forthcoming
Annual General Meeting (“AGM”). These
arrangements may
to
change, and we will keep shareholders
up to date on our Manager's website at
www.albion.capital/vct-hub/agms-events.
subject
be
We are required by law to hold an AGM within
six months of our financial year end. Whilst the
roadmap announced by the government gives
a new delayed target of 19 July 2021 as the
date all legal limits on mixing will be lifted, it is
clear that data rather than dates are the true
driver of restrictions. The Board is also acutely
aware that this is a fast-moving situation, with
new variants further complicating any removal
on restrictions in the short and medium term.
Given the level of uncertainty still being
experienced and likely to continue throughout
2021, and noting the success of last year’s live
streamed AGM with some 3 times more
engagement than in previous years, in the
interests of continued caution, the Board has
decided to repeat the process again this year.
The AGM will be held at noon on 7 September
2021, at the registered office being 1 Benjamin
Street, London, EC1M 5QL. Shareholders will be
able to attend the event via the free platform,
Hopin.
Full details of the business to be conducted at
the Annual General Meeting are given in the
Notice of the Meeting on pages 69 to 70 and
in the Directors’ report on pages 35 and 36.
As with last year’s AGM, the Directors will
attend in person to meet the quorum and
allow the continuation of this AGM. There will
also be a representative of Albion Capital
Group LLP as Company Secretary. At least two
weeks prior to the AGM registration details
will be sent to all shareholders who have an
email address registered with Computershare.
Shareholders who do not have an email
registered with Computershare
address
should
with
in
marketing@albion.capital for information. In
order to maximise shareholder engagement,
the AGM will include a presentation from the
Manager, the formal business of the AGM
receive
and answering questions we
from shareholders.
touch
get
Shareholders can submit their questions to the
Board in advance of the AGM up until noon
on 6
emailing
September 2021 by
AAVCchair@albion.capital. Alternatively there is
a facility on the Hopin platform to submit
questions whilst attending the event. The
Chairman will cover as many questions as
possible in the time allocated. Following the
AGM, a summary of responses will be published
at
on
www.albion.capital/funds/AAVC.
Managers
website
the
261393 Albion Capital pp01-pp09.qxp 21/06/2021 18:19 Page 9
Chairman’s statement continued
Shareholders’ views are important, and the Board encourages
shareholders to vote on the resolutions using the proxy form
enclosed with this Annual Report and Financial Statements, or
electronically at www.investorcentre.co.uk/eproxy. The Board has
carefully considered the business to be approved at the Annual
General Meeting and recommends shareholders to vote in favour
of all the resolutions being proposed.
Outlook and prospects
As a result of the significant investment disposals and special
dividend detailed above, the Board undertook a detailed review
of the various options available to the Company for the best
interests of shareholders as a whole. Through this detailed
review, the Board concluded that it was in the best interest of
shareholders to continue to operate as a smaller independent
VCT and grow its NAV through continued positive investment
performance and future fundraisings. The Company has
delivered strong returns for shareholders over 25 years, and we
continue to invest in exciting businesses that have not only
shown resilience through the current healthcare pandemic, but in
many cases growth, with many of our companies continuing to
provide products and services that are considered innovative and
essential by their customers. Having successfully sold our first
technology investment during the year in Clear Review, which
generated a 2.1 times return in the space of 17 months, this
illustrated the potential future returns we could deliver to
shareholders through focussing on our investment policy over the
medium to long term.
Over time our portfolio will be both diversified and targeted at
sectors such as software and healthcare which have proved
resilient during the Covid-19 pandemic. Although there is still
much uncertainty around the longer-term impact of the
pandemic, I am confident that our portfolio companies are well
positioned to grow, providing products and services critical to
their customers, and therefore well placed to continue to deliver
long term value to our shareholders.
Richard Glover
Chairman
21 June 2021
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 2.
Current portfolio analysis
The following pie charts show the split of the portfolio valuation as at 31 March 2021 by: sector; sector (excluding cash and net assets);
stage of investment; and number of employees. This is a useful way of assessing how the Company and its portfolio is diversified across
sector, investee companies’ maturity measured by revenues and their size measured by the number of people employed. Details of
the principal investments made by the Company are shown in the Portfolio of investments on pages 25 and 26.
Split of portfolio by sector
Split of portfolio by sector excluding cash
Software & other
technology
13% (8%)
Business services
and other
2% (3%)
Renewable energy
14% (15%)
Education
4% (4%)
Healthcare (including
digital healthcare)
6% (39%)
Cash and
net assets
61% (31%)
Software & other
technology
33% (11%)
Business services
and other
6% (4%)
Healthcare
(including digital
healthcare)
15% (57%)
Education
11% (6%)
Renewable energy
35% (22%)
Portfolio analysis by stage of investment
Portfolio analysis by number of employees
Under 20
9% (4%)
Scale up (revenue
over £5 million)
26% (30%)
Early stage (revenue less
than £1 million)
26% (10%)
Renewable
energy*
35% (20%)
21 - 50
23% (8%)
101+
11% (9%)
51 - 100
22% (59%)
Growth (revenue between
£1 million and £5 million)
48% (60%)
*Renewable energy companies have no employees
Comparatives for 31 March 2020 are shown in brackets
Source: Albion Capital Group LLP
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Albion Venture Capital Trust PLC
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Strategic report continued
Direction of portfolio
During the year the Company sold a number of its asset-backed
businesses which has resulted in asset-based investments
decreasing as a proportion of the portfolio. The cash proceeds
received from the disposals during the year was £30.6 million.
These disposals have resulted in cash and cash equivalents
accounting for 61% of the net asset value as at 31 March 2021
(2020: 30%). As outlined in the Chairman’s statement, a first
interim dividend and a special dividend have been declared for a
total of 16.83 pence per share. The quantum of this dividend is
c.£16.7 million (23% of the net assets) and will be paid to
shareholders on 30 July 2021.
In line with the Company’s investment policy, the majority of the
remaining funds will be invested into healthcare (including digital
healthcare) and software and other technology businesses. These
areas represent 48% of the portfolio (excluding cash) and we
expect this percentage to continue to increase in the coming years.
Further details on portfolio companies can be found in the
Portfolio of investments on page 25.
Results and dividends
Ordinary shares
£’000
Net capital return for the year
ended 31 March 2021
Net revenue return for the year
ended 31 March 2021
Total return for the year
ended 31 March 2021
Dividend of 2.50 pence per share
paid on 31 July 2020
Dividend of 1.74 pence per share
paid on 29 January 2021
Unclaimed dividends returned
to the Company
Transferred to reserves
Net assets as at 31 March 2021
Net asset value as at 31 March 2021
(pence per share)
5,690
1,468
7,158
(2,541)
(1,745)
23
2,895
72,688
73.13
The Company paid dividends totalling 4.24 pence per share
during the year ended 31 March 2021 (2020: 5.00 pence per
share). The Board has declared a first dividend for the year
ending 31 March 2022, of 1.83 pence per share, and a special
dividend of 15.00 pence per share to be paid on 30 July 2021 to
shareholders on the register on 9 July 2021.
As shown in the Company’s Income statement on page 51, the
total return for the year was 7.10 pence per share (2020: loss of
4.10 pence per share). Investment income decreased to
£2,467,000 (2020: £2,858,000). The Company will continue to
receive income from its renewable energy portfolio for the
foreseeable future, however investment income is expected to
be much lower over the next few years as a result of the care
homes sale.
The capital return on investments for the year of £6,508,000
(2020: loss of £4,925,000), has been discussed in the Chairman’s
statement on pages 6 and 7. This has led to an increase in net
asset value to 73.13 pence per share (2020: 70.13 pence per
share), which can be seen on the Balance sheet on page 52. This
increase in net asset value is after taking account of the payment
of 4.24 pence per share of dividends during the year.
There was a net cash inflow for the Company of £21,782,000 for
the year (2020: net inflow of £15,577,000), from the disposal of
fixed asset investments, offset by the investment in fixed asset
investments, dividends paid, operating activities and the buy-
back of shares.
Review of business and future changes
A detailed review of the Company’s business during the year is
contained in the Chairman’s statement on pages 6 and 7. The
total return before tax for the year was £7.3 million (2020: loss of
£3.8 million).
There is a continuing focus on growing the healthcare (including
digital healthcare) and software and other technology sectors. The
majority of these investment returns are delivered through equity
and capital gains and therefore, coupled with the sale of our three
care homes, we expect our investment income to significantly
reduce in future years.
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
After the payment of a substantial special dividend, the
Company’s portfolio remains well balanced across sectors and
risk classes, and has largely weathered the pandemic so far.
Although there remains much uncertainty, the Manager has a
strong pipeline of investment opportunities in which the
Company’s cash can be deployed. The Board considers that the
current portfolio and the pipeline of opportunities should enable
the Company to maintain a predictable stream of dividend
payments to shareholders, as well as delivering long term growth
for shareholders.
Albion Venture Capital Trust PLC
11
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Strategic report continued
Key performance indicators (“KPIs”) and Alternative Performance Measures (“APMs”)
The Directors believe that the following KPIs and APMs, which are typical for Venture Capital Trusts, used in its own 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 KPIs and APMs give a good indication that the
Company is achieving its investment objective and policy. These are:
1. Total shareholder value relative to FTSE All Share Index total return
The graph on page 4 shows the Company’s total shareholder value relative to the FTSE All-Share Index total return, with dividends
reinvested. The FTSE All-Share index is considered a reasonable benchmark as the Company is classed as a generalist UK VCT investor,
and this index includes over 600 companies listed in the UK, including small-cap, covering a range of sectors. Details on the
performance of the net asset value and return per share for the year are shown in the Chairman’s statement.
2. Net asset value per share and total shareholder value
Net asset value per share and total shareholder value*
233.8
229.9
237.2
225.8
220.2
205.0 204.7
195.3 197.9 199.0 201.1
190.1 191.4
211.8
206.4
250
200
150
99.9
95.0
100
e
r
a
h
s
r
e
p
e
c
n
e
P
191.3
183.7
171.9
159.2
148.5
136.8
127.8
118.4
110.2
50
0
1
1
1
1
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
9
9
9
9
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
9
9
9
9
0
0
0
0
0
0
0
0
0
0
1
1
1
1
1
1
1
1
1
1
2
2
6
7
8
9
0
1
2
3
4
5
6
7
8
9
0
1
2
3
4
5
6
7
8
9
0
1
Net asset value
Cumulative dividend
* Total shareholder value is net asset value plus cumulative dividends paid since launch.
Total shareholder value increased by 7.24 pence per Ordinary share for the year ended 31 March 2021 (gain of 10.3 per cent. on opening
net asset value).
3. Shareholder value in the year†
The graph on page 5 shows the Company’s total shareholder return over the previous ten years, five years, three years and the past year,
and the annual returns for the same period are detailed out below.
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
3.2% 1.4% 2.8% 7.4% 7.5% 11.8% 7.4% 10.5% (4.9)% 10.3%
Source: Albion Capital Group LLP
† Methodology: Shareholder return is calculated by the movement in total shareholder value for the year divided by the opening net asset value.
12
Albion Venture Capital Trust PLC
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Strategic report continued
4. Dividend distributions
The chart that follows shows the dividends paid in each year and the cumulative dividends paid since launch.
Dividends paid
164.0
159.8
154.8
149.8
144.8
139.8
134.8
129.8
124.8
119.8
114.8
109.8
104.8
94.8
84.8
74.8
67.8
58.8
50.3
42.3
34.8
27.3
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
1
1
1
2
2
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
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
2
2
7
8
9
0
1
2
3
4
5
6
7
8
9
0
1
2
3
4
5
6
7
8
9
0
1
Cumulative dividend
Dividends paid in the period
Dividends paid in respect of the year ended 31 March 2021 were 4.24 pence per share (2020: 5.00 pence per share). Cumulative
dividends paid since inception amount to 164.04 pence per Ordinary share.
5. Ongoing charges
The ongoing charges ratio for the year ended 31 March 2021
was 2.4% (2020: 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. The Directors expect the ongoing charges ratio for
the year ahead to increase slightly to approximately 2.5% due to
the reduction in the net asset value of the Company after the
payment of the significant special dividend. The cap on the
ongoing charges ratio is 2.5%.
6. VCT compliance*
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 33.
The relevant tests to measure compliance have been carried out
and independently reviewed for the year ended 31 March 2021.
These showed that the Company has complied with all tests and
continues to do so.
* VCT compliance is not a numerical measure of performance and thus cannot be
defined as an APM.
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 £54,000 (2020: £53,000) increased
annually by RPI. These fees are payable quarterly in arrears. Total
annual expenses, including the management fee, are limited to
2.5% of the net asset value.
Albion Venture Capital Trust PLC
13
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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
In order to align the interests of the Manager and the
shareholders with regards to generating positive returns, the
Manager is entitled to charge an incentive fee in the event that
the returns exceed minimum target levels.
The performance hurdle requires that the growth of the aggregate
of the net asset value per share and dividends paid by the
Company compared with the previous accounting date exceeds
RPI plus 2%. The hurdle will be calculated every year, based on the
previous year’s closing NAV per Share. The starting NAV is
79.00 pence per share, being the audited net asset value at
31 March 2019. If the target return is not achieved in a period, the
cumulative shortfall is carried forward to the next accounting
period and has to be made up before an incentive fee
becomes payable.
There was no management performance incentive fee payable
during the year. As at 31 March 2021 the cumulative shortfall of
the target return was 2.72 pence per share (31 March 2020:
shortfall of 7.53 pence per share) and this amount needs to be
made up in following accounting periods before an incentive fee
becomes payable.
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 continuing
achievement of the 80 per cent. qualifying holdings investment
requirement for Venture Capital Trust status, the long term
prospects of the current portfolio of investments, a review of the
Management agreement and the services provided therein, and
benchmarking the performance of the Manager to other service
providers including the performance of other VCTs that the
Manager is responsible for managing.
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.
14
Albion Venture Capital Trust PLC
Alternative Investment Fund Managers Directive (“AIFMD”)
The Board appointed Albion Capital Group LLP as the Company’s
AIFM in 2014 as required by the AIFMD. The Manager is a
full-scope Alternative Investment Fund Manager under the
AIFMD. Ocorian Depositary (UK) Limited is the appointed
Depositary and oversees the custody and cash arrangements
and provides other AIFMD duties with respect to the Company.
Companies Act 2006 Section 172 Reporting
Under Section 172 of the Companies Act 2006, the Board has a
duty to promote the success of the Company for the benefit of its
members as a whole in both the long and short term, having
regard to the interests of other stakeholders in the Company,
such as suppliers, and to do so with an understanding of the
impact on the community and environment and with high
standards of business conduct, which includes acting fairly
between members of the Company.
The Board is very conscious of these wider responsibilities in the
ways it promotes the Company’s culture and ensures, as part of
its regular oversight, that the integrity of the Company’s affairs is
foremost in the way the activities are managed and promoted.
This includes regular engagement with the wider stakeholders of
the Company and being alert to issues that might damage the
Company’s standing in the way that it operates. The Board works
very closely with the Manager in reviewing how stakeholder
issues are handled, ensuring good governance and responsibility
in managing the Company’s affairs, as well as visibility and
openness in how the affairs are conducted.
The Company is an externally managed investment company
with no employees, and as such has nothing to report in relation
to employee engagement but does keep close attention to how
the Board operates as a cohesive and competent unit. The
Company also has no customers in the traditional sense and,
therefore, there is also nothing to report in relation to
relationships with customers.
The table below sets out the stakeholders the Board considers
most relevant, details how the Board has engaged with these key
stakeholders and the effect of these considerations on the
Company’s decisions and strategies during the year.
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Strategic report continued
Stakeholders Engagement with Stakeholders Decision outcomes based on engagement
Shareholders
The key methods of engaging with
Shareholders are as follows:
• Annual General Meeting (“AGM”)
• Shareholder seminar
• Annual report, Half-yearly financial
report, and Interim management
statements
• RNS announcements for all key
decisions including appointment of
a new Director
• Website redesigned in the year to
make it more user accessible
• Shareholders’ views are important and the Board
encourages Shareholders to exercise their right to vote on
the resolutions at the AGM. The Company’s AGM is
typically used as an opportunity to communicate with
investors, including through a presentation made by the
investment management team. However, due to the
impact of Covid-19
last year, there were special
circumstances for last year’s AGM, which will continue on
into this year. A live stream of the AGM was held last year,
and the Board were able to take questions from
Shareholders. This enabled maximum shareholder
engagement in the absence of a face-to-face event.
• Shareholders are also encouraged to attend the annual
Shareholders’ Seminar. The seminar includes some of the
portfolio companies sharing insights into their businesses
and also presentations from Albion executives on some of
the key factors affecting the investment outlook, as well as
a review of the past year and the plans for the year ahead.
Representatives of the Board attend the seminar. The
Board considers this an important interactive event, and
therefore in 2020, although Covid-19 restrictions did not
allow for face-to-face meetings, this was also held as a live
stream event.
• Shareholders receive either a hard or soft copy of the
Annual report, and the Half-yearly financial report,
depending on their preference. These reports are also
available on the website, and announcement is made on
the London Stock Exchange. The Company also provides
voluntary Interim management statements to keep
Shareholders up to date quarterly.
• During the year, there was a net asset value
announcement outside of the normal quarterly
reporting cycle, as the Board realised the importance of
information sharing during the period of uncertainty
caused by the pandemic.
• The Share buy-back policy is an important means of
providing market liquidity for Shareholders, and has
been offered throughout the year. The Board monitors
closely the discount to the net asset value to ensure this
is in the region of 5%.
• The Board seeks to create value for Shareholders by
generating strong and sustainable returns to provide
shareholders with regular dividends and the prospect of
capital growth.
• Cash management and liquidity of the Company are key
quarterly discussions amongst the Board, with focus on
deployment of cash for future investments, dividends and
share buy-backs. This resulted in the Board declaring a
special dividend alongside the first dividend for the year
ended 31 March 2022.
• Shareholders can contact the Chairman using the email
AAVCchair@albion.capital.
Albion Venture Capital Trust PLC
15
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Strategic report continued
Stakeholders Engagement with Stakeholders Decision outcomes based on engagement
Suppliers
Manager
regular
key
suppliers with
The
engagement from the Manager are:
• Corporate broker
• VCT taxation advisor
• Depositary
• Registrar
• Auditor
• Lawyer
• The Manager is in regular contact with the suppliers and
the contractual arrangements with all the principal
suppliers to the Company are reviewed regularly and
formally once a year, alongside the performance of the
suppliers in acquitting their responsibilities.
• The Board reviews the performance of the providers
annually in line with the Manager.
The performance of Albion Capital Group
LLP is essential to the long term success of
the Company, including achieving the
investment policy and generating returns
to shareholders, as well as the impact the
Company has on Environment, Social and
Governance practice.
• The Manager meets with the Board at least quarterly to
discuss the performance of the Company, and is in
regular contact in between these meetings, e.g. to share
investment papers for new and follow on investments. All
strategic decisions are discussed in detail and minuted,
with an open dialogue between the Board and the
Manager.
Portfolio companies
The portfolio companies are considered
key stakeholders, not least because they
are principal drivers of value for the
Company. However, as discussed in the
Environmental, Social and Governance
(“ESG”) section on page 17, the portfolio
companies’ impact on their stakeholders is
also important to the Company.
Community and
environment
The Company, with no employees, has no
effect
itself on the community and
environment. However, as discussed above,
the portfolio companies’ ESG impact is
extremely important to the Board.
• The performance of the Manager in managing the
portfolio and
in providing company secretarial,
administration and accounting services is reviewed in
detail each year, which includes reviewing comparator
engagement terms and portfolio performance. Further
details on the evaluation of the Manager, and the
decision to continue the appointment of the Manager
for the forthcoming year, can be found in this report.
• Details of the Manager’s responsibilities can be found in
the Statement of corporate governance on page 39.
• The Board aims to have a diversified portfolio in terms of
sector and stage of investment. Further details of this can
be found in the pie charts on page 10.
• In most cases, an Albion executive has a place on the
board of a portfolio company, in order to help with both
business operation decisions, as well as good ESG practice.
• The Manager ensures good dialogue with portfolio
companies, and often puts on events in order to help
portfolio companies benefit from the Albion network.
• The Board receives reports on ESG factors within its
portfolio from the Manager as it is a signatory of the UN
Principles for Responsible Investment (“UN PRI”). Further
details of this are set out in the ESG section below. ESG,
without its specific definition, has always been at the
heart of the responsible investing that the Company
engages in and in how the Company conducts itself with
all of its stakeholders.
16
Albion Venture Capital Trust PLC
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Strategic report continued
Environmental, Social, and Governance (“ESG”)
The Company’s Manager, Albion Capital Group LLP, takes the
concept of sustainable and responsible investment very seriously
for existing investments and in reviewing new investment
opportunities. In turn, the Board is kept appraised of ESG issues in
connection with both the portfolio and in how Company affairs
are conducted more generally as a regular part of Board oversight.
Albion Capital Group LLP is a signatory of the UN PRI. The UN PRI
is the world’s leading proponent of responsible investment,
working to understand the investment implications of ESG
factors and to support its international network of investor
signatories in incorporating these factors into their investment
and ownership decisions.
The Board and Manager have exercised conscious principles in
making responsible investments throughout the life of the
Company, not least in providing finance for promising companies
in a variety of important sectors such as technology, healthcare
and renewable energy. In making the investments, the Manager
is directly involved in the oversight and governance of these
investments, including ensuring standards of reporting and
visibility on business practices, all of which are reported to the
Board of the Company. By its nature, not least in making
qualifying investments which fulfil the criteria set by HMRC, the
longer-term
Company has focused on sustainable and
investment propositions, some of which will fail (in the nature of
all small companies), but some of which will grow and serve
important societal demands. One of the most important drivers
of performance is the quality of the investment portfolio, which
goes beyond the individual valuations and examines the
prospects of each of the portfolio companies, as well as the
sectors in which they operate – all requiring a longer- term view.
In the nature of venture capital investment, Albion Capital Group
LLP is more intimately involved in the affairs of portfolio
companies than might be the case for funds invested in listed
securities. As such, Albion Capital Group LLP is in a position to
influence good governance and behaviour in the portfolio
companies, many of which are relatively small companies
without the support of a larger company’s administration and
advisory infrastructure.
The Company adheres to the principles of the AIC Code of
Corporate Governance and is also aware of other governance
and corporate conduct guidance which it meets as far as
practical, including in the constitution of a diversified and
independent Board capable of providing constructive challenge.
The Company's portfolio is currently invested in healthcare,
renewable energy, education, software and other technology
(which includes cyber security and data protection), with the most
significant percentage of the Company’s portfolio invested in
sectors and companies which would be seen by many measures to
be both sustainable and socially aware on the services they render.
Albion Capital Group LLP incorporates ESG considerations into its
investment decisions. These form part of its process to create
value for investors and develop sustainable long-term strategies
for portfolio companies. Albion Capital Group LLP reports ESG
criteria to UN PRI annually and to the Board quarterly.
ESG principles are integrated at the pre-investment, investment
and exit stages. This is reflected in transparency of reporting,
governance principles adopted by the Company and the portfolio
companies, and increasingly in the positive environmental or
socially impactful nature of investments made. Albion Capital
Group LLP, where relevant, considers climate-specific issues in its
investment policies and activities. However, as the majority of
the Company’s portfolio consists of small (2-250 full time
employees), private, typically software companies with limited
environmental impact, climate change is not considered to be a
significant risk, and actions are proportionate to that risk.
Pre-investment stage
An exclusion list is used to rule out investments in unsustainable
areas, or in areas which might be perceived as socially
detrimental. ESG due diligence is performed on each potential
portfolio company to identify any sustainability risks associated
with the investment. Identified sustainability risks are ranked
from low to high and are reported to the relevant investment
committee. The investment committee considers each potential
investment. If sustainability risks are identified, mitigations are
assessed and, if necessary, mitigation plans are put in place. If
this is not deemed sufficient, the committee would consider the
appropriate level and structure of funding to balance the
associated risks. If this is not possible, investment committee
approval will not be provided, and the
investment will
not proceed.
Investment stage
All new and existing portfolio companies are asked to report
against an ESG Balanced Score Card annually. The ESG Balanced
Score Card contains a number of sustainability factors against
which a portfolio company will be assessed in order to determine
the potential sustainability risks and opportunities arising from
the investment. The score cards form part of the Manager’s
internal review meetings alongside discussions around other risk
factors, and any outstanding
in
collaboration with the portfolio companies’ senior management.
issues are addressed
Exit stage
Albion Capital Group LLP aims to ensure that good ESG practices
remain in place following exit. For example, by ensuring that the
company creates a self-sustaining ESG management system
during our period of ownership, wherever feasible.
Albion Venture Capital Trust PLC
17
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Strategic report continued
Social and community issues, employees and human rights
The Board recognises the requirement under section 414C of 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 formal policies in these matters, however, it is at
the core of its responsible investment strategy as detailed above.
Further policies
The Company is not required to have any formal policies, however
it has adopted a number of further policies relating to:
• Environment
• Global greenhouse gas emissions
• Anti-bribery
• Anti-facilitation of tax evasion
• Diversity
General Data Protection Regulation
The General Data Protection Regulation has the objective of
unifying data privacy requirements across the European Union, and
continues to apply in the United Kingdom after Brexit. The
Manager continues to take action to ensure that the Manager and
the Company are compliant with the regulation.
Risk management
The Board carries out a regular review of the risk environment in
which the Company operates, together with changes to the
environment and individual risks. The Board also identifies
emerging risks which might impact on the Company. In the period
the most noticeable risk has been the global pandemic which has
impacted not only public health and mobility but also has had an
adverse impact on the economy, the full impact of which is likely to
be uncertain for some time.
and these are set out in the Directors’ report on pages 33 and 34.
The Directors have carried out a robust assessment of the Company’s principal risks and uncertainties, and explain how they are being
mitigated as follows. They are satisfied that there has not been a material change in the Company’s exposure against each of the
identified risks below.
Risk Possible consequence Risk management
Investment,
performance and
valuation risk
The risk of investment in poor quality
businesses, which could reduce the 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.
The Company’s
investment valuation
methodology is reliant on the accuracy
and completeness of information that is
In
issued by portfolio companies.
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.
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 for all investments, and at
least one external investment professional for investments
greater than £1 million in aggregate across all the Albion
managed VCTs. 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),
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. The Board and Manager
regularly review the deployment of investments and cash
resources available to the Company in assessing liquidity
required for servicing the Company’s buy-backs, dividend
payments and operational expenses.
including
the
The unquoted investments held by the Company are
designated at fair value through profit or loss and valued in
accordance with the International Private Equity and Venture
Capital Valuation Guidelines updated in 2018. These
guidelines set out recommendations, intended to represent
current best practice on the valuation of venture capital
investments. The valuation takes into account all known
material facts up to the date of approval of the Financial
Statements by the Board.
18
Albion Venture Capital Trust PLC
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Strategic report continued
Risk Possible consequence Risk management
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.
Regulatory and
compliance risk
Operational and
internal control risk
The Company is listed on The London
Stock Exchange and is required to comply
with the rules of the Financial Conduct
Authority, as well as with the Companies
Act, Accounting Standards and other
legislation. Failure to comply with these
regulations could result in a delisting of
the Company’s shares, or other penalties
under the Companies Act or from financial
reporting oversight bodies.
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 put assets of
the Company at risk or result in reduced or
inaccurate information being passed to
the Board or to shareholders.
controls within
To reduce this risk, the Board has appointed the Manager,
which has a team with significant experience in Venture
Capital Trust management, 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 independently confirm
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. The Company monitors closely the extent of
qualifying holdings and addresses this as required.
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.
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 its internal controls and risk management, including on
matters relating to cyber security.
The Audit Committee reviews the Internal Audit Reports
prepared by the Manager’s internal auditors, PKF Littlejohn
LLP and has access to the internal audit partner of PKF
Littlejohn LLP 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 and cyber security.
Ocorian Depositary (UK) Limited
is the Company’s
Depositary, appointed to oversee the custody and cash
arrangements and provide other AIFMD duties. The Board
reviews the quarterly reports prepared by Ocorian Depositary
(UK) Limited to ensure that Albion Capital is adhering to its
policies and procedures as required by the AIFMD.
In addition, the Board annually 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 policy.
The Manager and other service providers have also
demonstrated to the Board that there is no undue reliance
placed upon any one individual.
Albion Venture Capital Trust PLC
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Strategic report continued
Risk Possible consequence Risk management
Economic, political
and social 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. This also includes risks of
social upheaval, including from infection
and population re-distribution, as well as
economic risk challenges as a result of
healthcare pandemics/infection.
The political risk with the most uncertainty
for the future of the UK economy, which
the Company largely operates in, is Brexit.
The current significant exogenous risk to
the Company, the wider population and
economy, is the Covid-19 pandemic.
The Company invests in a diversified portfolio of companies
across a number of industry sectors and in addition often
invests in a mixture of instruments in portfolio companies and
has a policy of minimising any external bank borrowings
within 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.
In common with most commercial operations, exogenous
risks over which the Company has no control are always a risk
and the Company does what it can to address these risks
where possible, not least as the nature of the investments the
Company makes are long term.
The Company
largely operates within the UK, and
increasingly the US, and therefore impacts from Brexit are
reduced as there are few cross-border transactions with
Europe. Since 2016, the portfolio of companies has not seen
any significant impacts from the uncertainty around Brexit,
nor since the end of the transition period (1 January 2021).
The Board and Manager are continuously assessing the
resilience of the portfolio, the Company and its operations
and the robustness of the Company’s external agents during
the health crisis, as well as considering longer term impacts on
how the Company might be positioned in how it invests and
operates. Ensuring liquidity in the portfolio to cope with
exigent and unexpected pressures on the finances of the
portfolio and the Company is an important part of the risk
mitigation in these uncertain times. The portfolio is structured
as an all-weather portfolio with c.35 companies which are
diversified as discussed above. Exposure is relatively small to
at-risk sectors that include leisure, hospitality, retail and travel.
Emerging risks
Market value of
Ordinary shares
Reputational risk
The Boards meets at least four times a year
to discuss current affairs and any potential
emerging risks which could affect the
Company.
The key emerging risk affecting the
Company is the Environmental (including
climate change), Social and Governance
requirements, both from a regulatory and
investor preferences standpoint. There is
the risk of loss of funding from investors, as
well as the risk of penalties from regulatory
non-compliance.
The ESG section on page 17 details the Company’s work
towards these risks, and highlights the importance of these,
above the statutory reporting requirements, to the Company.
Whilst the Company itself has limited impact on climate
change, due to no employees nor greenhouse gas emissions,
the Board works closely with the Manager to ensure the
Manager themselves are working towards reducing their
impact on the environment and that the Manager takes
account of ESG factors, including climate change, when
making new investment decisions. With specific respect to
the Company, a key operation is increasing the use of
electronic communications with Shareholders, where that
preference has been specified.
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.
The Company relies on the judgement
and reputation of the Manager which is
itself subject to the risk of loss.
The Company operates a share buy-back policy, which is
designed to limit the discount at which the Ordinary shares
trade to around 5% 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 buy-back authorities. The
Company’s corporate broker, appointed during the year,
helps to ensure that the discount is appropriate.
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.
The Board regularly questions the Manager on its ethics,
procedures, safeguards and investment philosophy, which
should consequently result in the risk to reputational damage
being minimised.
20
Albion Venture Capital Trust PLC
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Strategic report continued
Viability statement
In accordance with the FRC UK Corporate Governance Code
published in 2018 and principle 36 of the AIC Code of Corporate
Governance, the Directors have assessed the prospects of the
Company over three years to 31 March 2024. 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 requires from the Manager and the estimated
timelines for finding, assessing and completing investments. The
three year period also takes account of the potential impact of
new regulations, should they be imposed, and how they may
impact the Company over the longer term, and the availability of
cash, but cannot take into account the full extent of the
exogenous risks that are impacting on global economies at the
date of these accounts.
The Directors have carried out a robust assessment of the
emerging and 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 procedures in place to identify emerging risks and
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, including any potential impact from Brexit. The
Board, after careful consideration, believes that Brexit will have
no major impact on the going concern of the Company, primarily
due to the markets our portfolio companies target, which in most
cases are the UK and increasingly, the US, for our software and
technology businesses. Portfolio companies targeting European
markets have also shown resilience so far. The coronavirus
(Covid-19) pandemic therefore remains the largest uncertainty
impacting on the Company. In light of this continuing
uncertainty, robust stress tested cashflows, process resilience and
contingencies have been examined in trying to deal with the
principal risks faced by the Company.
The Board assessed the ability of the Company to raise finance
and deploy capital, as well as the existing cash resources of the
Company. The portfolio is well balanced and 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.
Taking into account the processes for mitigating risks, monitoring
costs, share buy-backs and issuance, 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 2024.
This Strategic report of the Company for the year ended
31 March 2021 has been prepared in accordance with the
requirements of section 414A of the Companies Act 2006 (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.
Richard Glover
Chairman
21 June 2021
Albion Venture Capital Trust PLC
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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. Since retiring in 2002, he has worked as a consultant.
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. After a period in audit, she moved into industry and
spent over twenty years working in financial management and treasury roles, initially with Clyde Petroleum plc and then with the Bank
of Ireland Group. Since 2006, she has held 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.
Richard Wilson, (appointed 1 May 2020)
Richard Wilson is highly experienced in the asset management sector and was CEO of BMO Global Asset Management and previously
CEO of F&C Asset Management plc, where he led the company's acquisition by BMO Financial Group and subsequent integration into
BMO Global Asset Management. Richard began his asset management career in 1988 as a U.K. equity manager with HSBC Asset
Management (formerly Midland Montagu). He then joined Deutsche Asset Management (formerly Morgan Grenfell), where he rose
to managing director, global equities. From Deutsche, Richard moved to Gartmore Investment Management in 2003 as head of
international equity investments before joining F&C in 2004. Richard is also an independent non-executive director of Insight
Investment Management.
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 Ann Berresford is Chairman.
Ann Berresford is the Senior Independent Director.
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261393 Albion Capital pp10-pp24.qxp 21/06/2021 18:23 Page 23
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 Funds, Albion Real Assets Fund, Albion
Community Power and provides administration services to Albion Care Communities Limited. Albion Capital currently has total assets
under management or administration of approximately £800 million.
The following are specifically responsible for the management and administration of the Venture Capital Trusts managed by Albion
Capital Group LLP:
Will Fraser-Allen, BA (Hons), FCA, is the managing partner of Albion Capital. Will is also chairman of the Public Policy Committee of
the VCTA and sits on the Venture Capital Committee of the BVCA. He is passionate about the positive impact venture capital backed
healthcare and technology companies will have on the way we live and work. Will joined Albion in 2001, became deputy managing
partner in 2009 and managing partner in 2019. He has 20 years’ experience investing in healthcare, leisure, media and technology
enabled businesses. 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 Technology and General VCT, Albion Enterprise VCT and Albion Development VCT. He is also a director of the Association of
Investment Companies. Patrick joined Close Brothers Group plc in 1989 before establishing Albion Capital (formerly Albion Ventures
LLP) in 1996. Prior to Close he qualified as a chartered accountant before joining Cazenove & Co. Patrick has an MA in Modern
Languages from Oxford University.
Dr. Andrew Elder, MA, FRCS, initially practised as a neurosurgeon before starting his career in investment. He now focuses on medical
technologies, digital health, and the life-science sector. Andrew is head of healthcare investing and became deputy managing partner
in 2019. He graduated with an MA plus Bachelor of Medicine and Surgery from Cambridge University and practised as a surgeon for
six years. He is a Fellow of the Royal College of Surgeons (England).
Jessica Bartos, MA (Hons), joined Albion Capital in 2019 from Rothschild & Co where she served as a Vice President, advising
technology, media and telecom firms on mergers and acquisitions. Working in Rothschild’s New York and London offices, she
developed tech specialisms in cloud communications, digital advertising, fintech and enterprise software. Jessica is an investment
manager at Albion concentrating on technology investments. Jessica graduated from the University of Pennsylvania with a BA in
European History and from John Hopkins University with an MA in International Economics.
Adam Chirkowski, MA (Hons), is responsible primarily for investments in the asset-based portfolio. He is an investment director at
Albion Capital and invests across a number of sectors including digital infrastructure, healthcare and renewable energy. Adam
graduated from Nottingham University with a first-class degree in industrial economics and a masters in corporate strategy and
governance. Prior to joining Albion in 2013, he spent five years working in corporate finance at Rothschild.
Emil Gigov, BA (Hons), FCA, has been an early-stage investor for over 20 years, supporting more than 30 companies spanning
software technology, advanced manufacturing, education, and healthcare. More recently he has focused on B2B SaaS businesses
across a range of sectors including data management, fintech and marketing technologies. Emil joined Albion Capital in 2000 and
became a partner in 2009. He graduated from the European Business School, London, with a BA (Hons) Degree in European Business
Administration.
Vikash Hansrani, BA (Hons), FCA, oversees the finance and administration of the funds under Albion Capital’s management and is
on the AIC’s VCT Technical Committee. He qualified as a chartered accountant with RSM Tenon plc and latterly worked in its corporate
finance team before joining Albion in 2010 where he is currently operations partner for the group. He has a BA in Accountancy &
Finance from Nottingham Business School.
Ed Lascelles, BA (Hons), heads up the technology investment team at Albion, focusing on B2B software and disruptive tech services.
He joined Albion Capital in 2004 having started his career advising public companies during the ‘dotcom’ boom, and he became a
partner in 2009. Ed graduated from University College London with a first-class honours’ degree in Philosophy.
Albion Venture Capital Trust PLC
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The Manager continued
Paul Lehair, MSc, MA, joined Albion Capital with 10 years of experience in tech start-ups and investment banking. He came from
Citymapper where he was Finance Director for five years having joined when the company had less than ten employees. He also
worked in business operations at Viagogo and in M&A TMT at Citigroup. Paul is an investment manager at Albion specialising in
technology investing. He holds a dual Masters’ degree in European Political Economy from the London School of Economics and
Political Science and Sciences Po Paris.
Catriona McDonald, BA (Hons), joined Albion Capital in 2018 from Goldman Sachs where she worked on IPOs, M&A and leveraged
buyouts in New York and London. Her time in banking taught her how to implement proven systems and run detailed analysis. Cat is
now an investment manager specialising in technology investing. She graduated from Harvard University, majoring in Economics.
Jane Reddin, is the talent director of Albion Capital. She helps the funds invest in the best founders, by assessing leadership potential,
and accelerating the rapid scaling of our portfolio companies. In her 25 year career, Jane has transacted over 500 senior hires, built
international, new-market and fund teams and helped over 70 start-ups build high performing teams. Prior to Albion, she spent six years
as Talent Advisor at Balderton Capital then co-founded The Talent Stack, a talent management consulting company for start-ups. Jane
joined Albion in 2021. She cares deeply about helping entrepreneurial leadership teams to thrive as they scale up. The talent platform
she is developing at Albion enables the sharing of talent and leadership development expertise with our early-stage community.
Dr. Christoph Ruedig, MBA, practiced radiology and strategy consulting before becoming an investor in healthcare. He joined
Albion Capital in 2011 and became a partner in 2016. At Albion he focuses on digital health, with investments ranging from clinical
trial software to chronic disease management. Prior to joining Albion, he worked at General Electric, responsible for M&A in healthcare
following a role in venture capital with 3i plc. He holds a degree in medicine from Ludwig-Maximilians University, Munich, and an MBA
from INSEAD.
Nadine Torbey, MSc, BEng, joined Albion Capital in 2018 from Berytech Fund Management, one of the first VC funds in the Middle
East. She has been a VC for seven years and her investing experience includes: AI/Data Platforms and Infrastructure, CX, Digital
Networks and Hardware. Nadine is an investment manager at Albion specialising in technology investing. She graduated from the
American University of Beirut with a BSc 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, has been in venture capital for 16 years following a background in corporate finance at
KPMG, Credit Suisse First Boston, and ING Barings, after qualifying as a chartered accountant. Robert joined Albion Capital in 2005,
became a partner in 2009 and specialises in software investing.
Jay Wilson, MBA, MMath, comes from an advisory background and is passionate about partnering with management teams. Jay
joined Albion Capital in 2019 from Bain & Company where he had been a consultant since 2016 and is an investment manager at
Albion specialising in technology investing. Prior to this he graduated from the London Business School with an MBA having spent eight
years as a broker at ICAP Securities.
Marco Yu, PhD, MRICS, specialises in energy related investment and has in-depth knowledge and understanding of energy
generation, distribution, balancing, storage as well as servicing the sector. Marco is an investment director at Albion Capital, has a
first-class degree in economics from Cambridge, a PhD in construction economics from UCL and has led over 20 investments to date.
Prior to joining Albion in 2007, he qualified as a Chartered Surveyor with Bouygues (UK), and advised on large capital projects with
EC Harris.
24
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261393 Albion Capital pp25-pp31.qxp 21/06/2021 18:16 Page 25
Portfolio of investments
As at 31 March 2021 As at 31 March 2020
% 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***
Fixed asset investments rights companies £’000 £’000 £’000 £’000 £’000 £’000 £’000
Chonais River Hydro Limited 9.2 50.0 3,074 1,197 4,271 3,074 1,251 4,325 (54)
Radnor House School (TopCo) Limited 6.9 48.3 1,259 914 2,173 1,259 797 2,056 117
Gharagain River Hydro Limited 11.5 50.0 1,363 431 1,794 1,363 379 1,742 52
The Evewell (Harley Street) Limited 6.0 40.0 863 803 1,666 795 (150) 645 954
Phrasee Limited 2.3 17.4 538 862 1,400 310 – 310 863
Threadneedle Software Holdings
Limited (T/A Solidatus) 2.1 11.5 1,262 – 1,262 – – – –
Elliptic Enterprises Limited 1.6 6.7 1,244 – 1,244 1,244 – 1,244 –
The Street by Street Solar
Programme Limited 6.5 50.0 675 503 1,178 675 540 1,215 (37)
Cantab Research Limited
(T/A Speechmatics) 2.8 11.1 1,144 – 1,144 1,144 – 1,144 –
Healios Limited 2.4 17.5 678 339 1,017 175 – 175 339
Concirrus Limited 1.9 9.7 975 – 975 975 – 975 –
MHS 1 Limited 14.8 48.8 1,026 (110) 916 1,026 (109) 917 (1)
Alto Prodotto Wind Limited 7.4 50.0 551 359 910 590 403 993 (30)
Seldon Technologies Limited 4.6 14.0 902 – 902 – – – –
Beddlestead Limited 9.1 49.0 1,142 (336) 806 1,142 (275) 867 (61)
The Voucher Market Limited (T/A WeGift) 1.8 10.0 735 – 735 – – – –
Regenerco Renewable Energy Limited 4.5 50.0 451 275 726 451 257 708 18
Credit Kudos Limited 2.7 13.8 584 – 584 487 – 487 –
uMotif Limited 2.1 14.3 486 35 521 180 (63) 117 97
Limitless Technology Limited 1.8 11.0 471 47 518 320 – 320 47
Dragon Hydro Limited 7.3 30.0 277 174 451 289 158 447 15
Erin Solar Limited 18.6 50.0 520 (72) 448 520 (72) 448 –
Arecor Limited 1.0 7.4 249 107 356 180 – 180 107
uMedeor Limited (T/A uMed) 3.2 9.5 334 – 334 – – – –
AVESI Limited 7.4 50.0 242 82 324 242 102 344 (20)
Harvest AD Limited – – 307 5 312 307 5 312 –
TransFICC Limited 1.9 9.9 286 – 286 – – – –
Avora Limited 4.2 16.7 750 (467) 283 750 – 750 (467)
ePatient Network Limited (T/A Raremark) 2.3 15.9 308 (58) 250 220 51 271 (109)
Greenenerco Limited 3.9 50.0 110 71 181 118 77 195 (3)
Premier Leisure (Suffolk) Limited 9.9 47.4 175 (2) 173 175 1 176 (3)
Imandra Inc. 1.3 7.9 121 – 121 121 – 121 –
Symetrica Limited 0.3 5.0 83 (17) 66 71 (36) 35 18
Kew Green VCT (Stansted) Limited 45.2 50.0 1,234 (1,211) 23 1,234 (692) 542 (519)
Forward Clinical Limited (T/A Pando) 1.2 9.2 149 (144) 5 149 (99) 50 (45)
Total fixed asset investments 24,568 3,787 28,355 19,586 2,525 22,111 1,278
* 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 2020 do not agree to the Annual Report and Financial Statements for the year ended
31 March 2020 as the above list does not include brought forward investments that were fully disposed of in the year.
Albion Venture Capital Trust PLC
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Portfolio of investments continued
Opening Total Gain on
carrying Disposal realised opening
Fixed asset investment realisations during the year ended Cost* value proceeds gain value
31 March 2021 £’000 £’000 £’000 £’000 £’000
Disposals:
Shinfield Lodge Care Limited 6,425 11,725 13,782 7,357 2,057
Active Lives Care Limited 4,810 7,713 8,571 3,761 858
Ryefield Court Care Limited 3,880 6,074 7,253 3,373 1,179
G. Network Communications Limited 228 1,236 1,281 1,053 45
Clear Review Limited 384 384 801 417 417
Loan stock repayments and other:
Alto Prodotto Wind Limited 39 52 52 13 –
Dragon Hydro Limited 12 12 12 – –
Greenenerco Limited 7 10 10 3 –
Escrow adjustments** and other – – 121 121 121
Total realisations 15,785 27,206 31,883 16,098 4,677
* 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.
** These comprise fair value movements on deferred consideration on previously disposed investments, release of the G. Network Communications discount which is
considered a financing transaction, and expenses which are incidental to the purchase or disposal of an investment.
Total change in value of investments for the year 1,278
Movement in loan stock accrued interest 553
Unrealised gains sub-total 1,831
Realised gains in current year 4,677
Total gains on investments as per Income statement 6,508
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Portfolio companies
Geographical locations
Portfolio of 35 companies
employing over 1,200 people
predominantly in the
United Kingdom.
8 renewable energy
companies generating
approximately 24GWh
per annum, capable of
powering 7,400 typical
households.
Albion Venture Capital Trust PLC
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Portfolio companies continued
The top ten portfolio companies by value are shown below.
1. Chonais River Hydro Limited
Chonais 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 2019
£’000
Investment information
Net liabilities
Basis of valuation:
(114)
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
276
3,074
4,271
9.2%
50.0%
2. Radnor House School (TopCo)
Limited
Radnor House operates a
co-educational
independent school near Sevenoaks, Kent. The
school, which was acquired in 2015 as a turnaround
opportunity, is now growing strongly with over
450 children on the roll and further capacity to
expand. Significant further investment has been
made into the schools's facilities to enable it 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 in a supportive and
nurturing environment.
Website: www.radnorhouse.org
Audited results: year to 31 August 2020
Turnover
EBITDA
Loss before tax
Net assets
Basis of valuation
£’000
8,367
838
(408)
9,211
Third party valuation - earnings multiple
Investment information
Income recognised in the year
Total cost
Total valuation
Voting rights
Voting rights for all Albion managed companies
£’000
–
1,259
2,173
6.9%
48.3%
28
28
Albion Venture Capital Trust PLC
261393 Albion Capital pp25-pp31.qxp 21/06/2021 18:16 Page 29
Portfolio companies continued
3. 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 2019 £’000
Investment information
Net assets
Basis of valuation:
Income recognised in the year
179
Third Total cost
party valuation – Total valuation
discounted Voting rights
cash flow Voting rights for all Albion
managed companies
£’000
119
1,363
1,794
11.5%
50.0%
4. The Evewell (Harley Street) Limited
The Evewell owns and operates a private pay
women’s health centre of excellence at 61 Harley
Street focusing on fertility and IVF treatment but
uniquely also covering all aspects of a woman’s
gynaecological health.
Filleted audited results:
year to
31 December 2019 £’000
Net liabilities
(2,655)
Basis of valuation: Earnings Total cost
Valuation
multiple
Voting rights
Investment information
Income recognised in the year
Voting rights for all Albion
managed companies
£’000
23
863
1,666
6.0%
40.0%
Website: www.evewell.com
Website: phrasee.co
5. Phrasee Limited
Phrasee provides a platform that uses natural language generation and deep learning to generate brand
optimised language, increasing engagement across the entire customer journey.
Filleted audited results: year to 28 February 2020
Net assets
Basis of valuation
£’000
752
Revenue multiple
Investment information
Income recognised in the year
Total cost
Valuation
Voting rights
Voting rights for all Albion managed companies
£’000
–
538
1,400
2.3%
17.4%
Albion Venture Capital Trust PLC
29
261393 Albion Capital pp25-pp31.qxp 21/06/2021 18:16 Page 30
Portfolio companies continued
6. Threadneedle Software Holdings
Limited (T/A Solidatus)
Solidatus was developed to help organisations
understand how data flows through their systems by
providing data lineage, discovery and visualisation
solutions. It aspires to be the company of reference
helping organisations improve their data economy.
The company already counts a number of Tier 1
financial institutions as customers, has relationships
with Tier 1 consulting partners and is regarded as an
industry figurehead.
Filleted audited results: year to 31 March 2020
£’000
Investment information
Net assets
Basis of valuation
83
Cost and price of recent investment
(reviewed for impairment or uplift)
Income recognised in the year
Total cost
Total valuation
Voting rights
Voting rights for all Albion managed companies
£’000
–
1,262
1,262
2.1%
11.5%
Website: www.solidatus.com
7. Elliptic Enterprises Limited
Elliptic provides Anti Money Laundering services to
digital asset (DA) institutions, e.g. crypto exchanges
and banks, enabling them to detect financial crime
and comply with emerging regulations. Elliptic is
considered a key regulatory partner and spends
considerable time liaising and advising the FCA, SEC
and other state and regional regulators globally.
Website: www.elliptic.co
Audited results: year to 31 March 2020
£’000
Investment information
Net assets
Basis of valuation
15,083
Cost and price of recent investment
(reviewed for impairment or uplift)
Income recognised in the year
Total cost
Total valuation
Voting rights
Voting rights for all Albion managed companies
£’000
–
1,244
1,244
1.6%
6.7%
30
Albion Venture Capital Trust PLC
261393 Albion Capital pp25-pp31.qxp 21/06/2021 18:16 Page 31
Portfolio companies continued
8. The Street By Street Solar Programme Limited
Street by Street owns and operates solar PV systems on circa 600 privately owned homes in England and Wales.
It provides free and clean electricity to those homes, and benefits from inflation-protected renewable subsidies
for a period of 20 to 25 years. Most of the PV systems were commissioned in 2011 and 2012.
Filleted audited results: year to 30 November 2019
Net liabilities
Basis of valuation
£’000
(621)
Third party valuation – Discounted cash flow
Investment information
Income recognised in the year
Total cost
Total valuation
Voting rights
Voting rights of all Albion managed companies
£’000
72
675
1,178
6.5%
50.0%
Website: www.speechmatics.com
Website: www.healios.org.uk
10. Healios Limited
Healios is an online platform delivering family
centric psychological care primarily to children and
adolescents. The Company provides assessment,
treatment and early intervention for a variety of
mental health conditions.
9. Cantab Research Limited
(T/A
Speechmatics)
Speechmatics provides advanced speech recognition
software. Their technology can automatically
transcribe any voice or audio assets from any live or
recorded media and convert it into text in real time
with leading accuracy across a wide range of
languages. The software can be deployed using
small footprint language models, which allow the
speech to text processing to be performed at high
accuracy both on premise and on device, as well as in
the cloud. Albion VCTs invested alongside existing
investors (IQ Capital and leading Cambridge angels)
to accelerate growth.
Filleted unaudited results:
year to
31 December 2019 £’000
Investment information
Turnover
LBIDTA
Loss before tax
Net assets
Basis of
valuation
4,349
(3,421)
(3,554)
5,999
Income recognised in the year
Total cost
Valuation
Voting rights
Cost and price Voting rights for all Albion
of recent managed companies
investment
(reviewed for
impairment or uplift)
£’000
–
1,144
1,144
2.8%
11.1%
Filleted unaudited results:
year to
31 December 2019 £’000
Net liabilities
(1,924)
Basis of Cost and price Total cost
valuation: of recent Valuation
investment Voting rights
(reviewed for impairment Voting rights for all Albion
or uplift) managed companies
Investment information
Income recognised in the year
£’000
–
678
1,017
2.4%
17.5%
Albion Venture Capital Trust PLC
31
261393 Albion Capital pp32-pp45.qxp 21/06/2021 18:14 Page 32
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 2021.
The Statement of corporate governance on pages 38 to 42 forms
a part of the Directors’ report.
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.
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 33 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 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 1,759,986
Ordinary shares (2020: 17,771,277 Ordinary shares), of which
935,989 Ordinary shares (2020: 16,948,338 Ordinary shares)
were issued under the Albion VCTs Top Up Offers; and 823,997
Ordinary shares (2020: 822,939 Ordinary shares) were issued
under the Dividend Reinvestment Scheme.
32
Albion Venture Capital Trust PLC
Substantial interests and shareholder profile
As at 31 March 2021 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 2021, 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 9 of the Chairman’s statement and on page 11 of the
Strategic report.
Results and dividends
Detailed information on the results and dividends for the year
ended 31 March 2021 can be found in the Strategic report on
page 11.
Going concern
In accordance with the Guidance on Risk Management, Internal
Control and Related Financial and Business Reporting issued by
the Financial Reporting Council (“FRC’) in 2014, and the
subsequent updated Going concern, risk and viability guidance
issued by the FRC due to Covid-19 in 2020, the Board has
assessed the Company’s operation as a going concern. The
Company has sufficient cash and liquid resources, its portfolio of
investments is well diversified in terms of sector, and the major
cash outflows of the Company (namely investments, buy-backs
and dividends) are within the Company’s control. Cash flow
forecasts are discussed quarterly at Board level with regards to
going concern. The cash flow forecasts have been updated and
stress tested to allow for the ongoing impact of Covid-19.
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. For this reason, the Directors have adopted the going
concern basis in preparing the accounts. The Directors do not
consider there to be any material uncertainty over going concern.
The Board’s assessment of liquidity risk and details of the
Company’s policies for managing its capital and financial risks 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.
261393 Albion Capital pp32-pp45.qxp 21/06/2021 18:14 Page 33
Directors’ report continued
Post balance sheet events
Details of events that have occurred since 31 March 2021 are
shown in note 19.
received State aid risk finance in its first seven years, or the
company is entering a new market and a turnover test is
satisfied;
Principal risks and uncertainties
A summary of the principal risks faced by the Company is set out
on pages 18 to 20 of the Strategic report.
10. The Company’s investment in another company must not
be used to acquire another business, or shares in another
company; and
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:
1. The Company’s income must be derived wholly or mainly
from shares and securities;
2. At least 80% of the HMRC value of its investments must
have been represented throughout the year by shares or
securities that are classified as ‘qualifying holdings’;
3. At least 70% 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% of funds raised in accounting periods
beginning on or after 6 April 2018 must be invested in
qualifying holdings by the anniversary of the end 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% by HMRC
value of its investments;
6. The Company must not have retained greater than 15%
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,
nor more than £12 million in total (the limits are
£10 million and £20 million respectively for a ‘knowledge
intensive’ company);
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
11. The Company may only make qualifying investments or
investments permitted by
certain non-qualifying
Section 274 of the Income Tax Act 2007.
These tests drive a spread of investment risk through preventing
holdings of more than 15% by HMRC value in any portfolio
company. The tests have been carried out and independently
reviewed for the year ended 31 March 2021. The Company has
complied with all tests and continues to do so.
‘Qualifying holdings’ include shares or securities (including
unsecured loans with a five year or greater maturity period) in
companies which have a permanent establishment in the UK and
operate a ‘qualifying trade’ wholly or mainly in the United
Kingdom. The investment must bear a sufficient level of risk to
meet a risk-to-capital condition. Eligible shares must comprise at
least 10% 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 10.
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
investment and £16 million
immediately prior to the
immediately thereafter.
On 31 March 2021, the HMRC value of qualifying investments
(which includes a 12 month disregard for disposals) was 91.03%
(2020: 99.90%). The Board continues to monitor this and all the
VCT qualification requirements very carefully in order to ensure
that all requirements are met and that qualifying investments
comfortably exceed the current minimum threshold, which is
80% required for the Company to continue to benefit from VCT
tax status. The Board and Manager are confident that the
qualifying requirements can be met during the course of the year
ahead.
Environment
The management and administration of the Company is
undertaken by the Manager. Albion Capital Group LLP recognises
Albion Venture Capital Trust PLC
33
261393 Albion Capital pp32-pp45.qxp 21/06/2021 18:14 Page 34
Directors’ report continued
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, favouring digital over printing and
reducing energy consumption. Further details can be found in the
Environmental, Social, and Governance (“ESG”) section on page 17.
Global greenhouse gas emissions
The Company qualifies as a low energy user with regards to
greenhouse gas emissions, producing less than 40,000kWh of
energy, and therefore is not required to report emissions 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’ reports) Regulations 2013,
including those within our underlying investment portfolio.
Therefore, the Company is outside of the scope of Streamlined
Energy Carbon Reporting.
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 conducts due diligence on 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 three 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 22.
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 the Manager
is a full scope UK AIFM. Ocorian Depositary (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 remuneration policy
together with the remuneration disclosures for the AIFM’s most
recent reporting period are available on the Company’s webpage
on the Manager’s website.
Employees
The Company is managed by Albion Capital Group LLP and
hence has no employees. The Board consists solely of
non-executive Directors, who are considered key management
personnel.
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 44.
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 themselves in relation to the performance of their duties
as a Director of the Company. A copy of each Deed of Indemnity
34
Albion Venture Capital Trust PLC
261393 Albion Capital pp32-pp45.qxp 21/06/2021 18:14 Page 35
Directors’ report continued
entered into by the Company with each Director is available at
the registered office of the Company.
Re-election of Directors
Directors’ re-election is subject to the Articles of Association and
the UK Corporate Governance Code. The AIC Code recommends
that all Directors submit themselves for re-election annually,
therefore in accordance with the AIC Code, Richard Glover,
John Kerr, Ann Berresford and Richard Wilson will offer
themselves for re-election.
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 VCT which,
for the purposes of the 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 Albion Capital Group LLP
managed Venture Capital Trusts and funds. Allocation of
investments is on the basis of an allocation agreement which is
based, inter alia, on the ratio of funds available for investment
and the HMRC VCT qualifying tests.
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.
There have been significant changes in the market for the
provision of audit services, particularly for listed companies. As a
result, there have been increases in the levels of audit fees being
charged to listed companies and further pressure on fees is likely
in future years. The Board continues to believe that the
Company’s auditor provides a good and competitively priced
service for the audit of the Company.
Annual General Meeting
The Annual General Meeting will be held at the registered office
of the Company, 1 Benjamin Street, London, EC1M 5QL at noon
on 7 September 2021. The Notice of the Annual General
Meeting is at the end of this document. Details of the special
circumstances for this year’s AGM can be found in the
Chairman’s statement on pages 8 and 9.
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. 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.
The ordinary business resolutions 1 to 9 includes receiving and
adopting the Company’s accounts, to approve the Directors’
remuneration policy and report, to re-elect all Directors and to
appoint BDO as auditor for the next year end and to fix their
remuneration.
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.
Resolution numbers 9 to 11 replace the authorities given to the
Directors at the Annual General Meeting in 2020. The authorities
sought at the forthcoming Annual General Meeting will expire
15 months from the date that 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 9 will request the authority to allot
up to an aggregate nominal amount of £233,099 representing
approximately 20 per cent. of the issued Ordinary share capital
of the Company as at the date of this Report.
During the year, Ordinary shares were allotted as described in
detail in note 15.
The Directors’ current intention is to allot shares under the
Dividend Reinvestment Scheme and any Albion VCTs Top Up
Offers. The Company currently holds 17,153,431 Ordinary shares
in treasury which represents 14.7 per cent. of the total Ordinary
share capital in issue as at 31 March 2021.
Disapplication of pre-emption rights
Special resolution number 10 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 £233,099 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.
Albion Venture Capital Trust PLC
35
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Directors’ report continued
Purchase of own shares
Special resolution number 11 will request the authority to
purchase a maximum of 17,470,774 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 11.
Under the Companies Act 2006, the Company is only permitted to
pay dividends and to make buy-backs from its accumulated
distributable reserves. Therefore, the Board believes that increasing
the distributable reserves is in the interests of shareholders. Details
of these reserves are shown on page 53 of this Annual Report and
Financial Statements.
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.
During the financial year under review, the Company purchased
3,069,400 Ordinary shares for treasury representing 2.6 per cent.
of called up share capital, at an aggregate consideration of
£2,043,000. No Ordinary shares were purchased for cancellation.
Cancellation of share premium and capital redemption
reserve
Special resolution number 12 is a proposal by the Board to increase
the Company’s distributable reserves by way of a reduction of the
Company’s share premium account and capital redemption
reserve, subject to shareholder approval and confirmation by the
Court. This procedure has been adopted in the past by the
Company and
investment
companies.
is relatively common amongst
The Company’s distributable reserves are used for the payment of
dividends, for share buy-backs and for other corporate purposes.
Subject to any creditor protection demanded by the Court (see
below), the proposed reduction of the share premium account and
capital redemption reserve will create additional distributable
reserves of greater than £40 million.
The Company may reduce its share premium account and capital
redemption reserve by obtaining the approval of shareholders by
special resolution. If the special resolution is approved by
shareholders, the Company will apply to the High Court for a Court
Order and this is expected to take place later in the year. The Court
may require the Company to protect the interests of the creditors
of the Company and the Company can confirm that it will seek
approval from all creditors to this proposal. The main creditors as
at the date of filing with the Court, will be the Manager and the
Company’s solicitors, Bird & Bird LLP. Both of the main creditors
have confirmed that they will consent to the proposed reduction.
It is the Board’s policy to pay regular dividends to shareholders as
the Directors believe that this is a key source of shareholder value.
The Company also has a policy of buying back its own shares for
cancellation or for holding as treasury shares, when such purposes
are considered to be to the advantage of the Company and
shareholders as a whole. These shares are purchased at a discount
to net asset value which enhances the Company’s net asset value
per share.
36
Albion Venture Capital Trust PLC
The Company’s share premium account represents the difference
between the price paid for shares and the nominal value of the
shares, less issue costs and transfers to special reserve. As at
31 March 2021, the amount credited to the Company’s share
premium account was £40,668,000.
The Company’s capital redemption reserve accounts for amounts
by which the issued share capital is diminished through the
repurchase and cancellation of the Company’s own shares. As at
31 March 2021, the amount credited to the Company’s capital
redemption reserve was £7,000.
The Directors believe that the Company should increase its
distributable reserves by cancelling the amount standing to the
credit of the Company’s share premium account and capital
redemption reserve as at 6pm on the day before the date of the
Final Hearing.
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.
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
• 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
21 June 2021
261393 Albion Capital pp32-pp45.qxp 21/06/2021 18:14 Page 37
Statement of Directors’ responsibilities
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 Company’s
webpage is maintained on the Board’s behalf by the Manager.
(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
21 June 2021
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.
Albion Venture Capital Trust PLC
37
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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 2018.
The Board has considered the Principles and Provisions of the AIC
Code of Corporate Governance (“AIC Code”). The AIC Code
addresses the Principles and Provisions set out in the Code, as well
as setting out additional Provisions on issues that are of specific
relevance to the Company and other investment companies.
Closed-ended investment companies have particular factors
which have an impact on their governance arrangements,
principally from four features: outsourcing their day to day
activities to external service providers and being governed by
boards of non-executive directors; the importance of the
Manager in the outsourcing compared to a typical supplier;
having no executive directors or employees and consequently no
executive remuneration packages; and no customers in the
traditional sense, only shareholders.
The AIC Code requires that all Directors submit themselves for
re-election annually, therefore in accordance with the AIC Code,
Richard Glover, John Kerr, Ann Berresford and Richard Wilson will
offer themselves for re-election at the forthcoming Annual
General Meeting.
The Directors have a range of business and financial skills,
including serving on the boards of other investment companies,
which are relevant to the Company; these are described in the
Board of Directors section of this Report, on page 22. All of the
Directors have demonstrated that they have sufficient time, skill
and experience to acquit their Board responsibilities and to work
together effectively. 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 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. The Company has in
place Directors’ & Officers’ Liability Insurance.
The Board considers that reporting against the Principles and
Provisions of the AIC Code, which has been endorsed by the FRC,
provides more relevant information to shareholders. The
Company has complied with the Principles and Provisions of the
AIC Code.
The Directors have considered diversity in relation to the
composition of the Board and have concluded that its
membership is diverse in relation to experience and balance of
skills. Further details on the recruitment of new directors can be
found in the Nomination Committee section on page 41.
The AIC Code is available on the AIC website (www.theaic.co.uk).
It includes an explanation of how the AIC Code adapts the
Principles and Provisions set out in the Code to make them
relevant for investment companies.
Board of Directors
The Board consists solely of
independent non-executive
Directors. Richard Glover is the Chairman, Ann Berresford is the
Senior Independent Director and John Kerr is Chairman of the
Audit Committee. All Directors are non-executive and day-to-day
management responsibilities are sub-contracted to the Manager.
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.
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. As such, John Kerr who has been a Director of the
Company for more than nine years, is still considered to be an
independent Director and the Board continues to benefit from
his experience of the Company.
The Board met four times during the year as part of its regular
programme of quarterly Board meetings. Two additional
meetings took place during the year. The first to discuss the
effect of the coronavirus (Covid-19) pandemic on the Company’s
portfolio in April 2020 and the second to conduct a strategic
review of the Company following the disposal of the care homes
as outlined in the Chairman’s statement. In addition, and in
accordance with best practice, a further meeting took place
without the Manager present. All Directors attended all
meetings. A sub-committee comprising at least two Directors
met during the year to allot shares issued under the Dividend
Reinvestment Scheme and the Albion VCTs Prospectus Top Up
Offers 2019/20.
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.
38
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Statement of corporate governance
continued
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;
• consideration of corporate strategy and corporate events that
arise;
• application of the principles of the AIC Code, corporate
governance and internal control;
• review of sub-committee recommendations, including the
recommendation to shareholders for the appointment and
remuneration of the Auditor;
• approving the Annual Report and Financial Statements, the
Half-yearly Financial Report, the Interim Management
Statements (which the Company will continue to publish), net
asset value updates (where required), and the associated
announcements;
• approval of the dividend policy and payments of appropriate
dividends to shareholders;
• the performance of the Company, including monitoring of the
discount of share price to the net asset value;
• share buy-back and treasury share policies;
• participation in dividend re-investment schemes and Top Up
Offers; 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 consistently identified that the Board
works well together and has the right balance of skills, experience,
independence and knowledge of the Company amongst the
Directors. Diversity within the Board is achieved through the
appointment of directors with different backgrounds and skills.
Directors are offered training, both at the time of joining the
Board and on other occasions where required. The Directors
attend external courses and industry events which provides
further experience to help them fulfil their responsibilities. The
Board also undertakes a proper and thorough evaluation of its
committees on an annual basis.
In light of the performance of the individual Directors and the
structured performance evaluation, Richard Glover, John Kerr, Ann
Berresford and Richard Wilson, 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
re-appoint these Directors at the forthcoming Annual General
Meeting and has nominated them for re-election accordingly. For
more details on the specific background, skills and experience of
each Director, please see the Board of Directors section on
page 22.
Remuneration Committee
Ann Berresford 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 members of the
Committee at the time the meeting was held.
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 under the “Corporate
Governance” section.
Audit Committee
John Kerr is Chairman of the Audit Committee and all Directors
are members of this Committee. In accordance with the AIC
Code, members of the Audit Committee have recent and relevant
financial experience, as well as experience relevant to the sector.
Given the size of the Board and the complexity of the business,
Richard Glover is both Chairman of the Board and a member of
the Audit Committee as his background, skills and experience are
relevant for the Committee’s responsibilities. The Committee
met twice during the year ended 31 March 2021, which were
fully attended by all the members of the Committee.
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.
Albion Venture Capital Trust PLC
39
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Statement of corporate governance
continued
During the year under review, the Committee discharged its
responsibilities including:
• formally reviewing the Annual Report and Financial
Statements and the Half-yearly Financial Report, 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;
• 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 and viability statements. 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 to back up the
discussions. Taking into account risk factors that impact on the
Company both as reflected in the annual accounts and in a
detailed risk matrix, both of which are reviewed periodically in
detail, including in the context of emerging risks;
• 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.
The Board, and particularly the Audit Committee, monitors
closely developments in the provision of audit services and is
aware that the costs of rendering audit services from most audit
firms are increasing significantly, with more pressure on those
firms who provide services to listed companies and for those
companies operating in a regulated environment. The Board is
satisfied from discussions with the current audit firm and from
scrutiny of what is happening elsewhere, that BDO continues to
provide the Company with an independent and expert review of
its financial reporting from an audit firm with significant
experience in the sector and on a competitive fee base for the
work required in reporting on an extensive portfolio of unquoted
investments.
The Committee also examines going concern and viability
statements, using financial projections provided by the Manager
on the Company and by examining the liquidity in the
Company’s portfolio, including cash and realisable investments,
the committed costs of the Company and where liquidity might
be found if required. The Audit Committee also receives regular
reports on compliance with VCT status, which is subject to various
internal controls and external review when
investment
commitments are made.
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 the issues were discussed with the external Auditor
prior to 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 detailed reviews of the Annual Report and Financial
Statements and consideration of the key areas of risk identified,
the Board as a whole have concluded that 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
40
Albion Venture Capital Trust PLC
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Statement of corporate governance
continued
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 2021.
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
2021, 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 14 of their tenure. In
order to safeguard the quality of the audit team, the audit
engagement partner is rotated every five years. This year is the
first year that Peter Smith has acted as audit engagement
partner and rotation will take place before the year ended
31 March 2026. 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.
Nomination Committee
The Nomination Committee consists of all Directors, with Richard
Glover as Chairman.
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 Board is also mindful of the
importance of creating good working relationships within the
Board and with external agents. The Nomination Committee
reviews succession planning regularly which includes considering
tenure of existing Board members and any potential skills gaps
that might need to be addressed when Board membership
changes.
The Nomination Committee held one formal meeting during the
year, which was fully attended by all the members of the
Committee at the time the meeting was held.
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 AIC 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, such a system is designed to manage, rather than
eliminate the risks of failure to achieve the Company’s business
objectives and can only provide reasonable and not absolute
assurance against material misstatement or loss.
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 and approach to the annual audit
and issues that arise during the course of the audit match all the
relevant and appropriate criteria for the audit to have been an
effective and objective review of the Company’s year-end
reporting.
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.
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.
Albion Venture Capital Trust PLC
41
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Statement of corporate governance
continued
The Board, through the Audit Committee, has performed a
specific assessment for the purpose of this Annual Report. This
assessment considers all significant aspects of internal control
arising during the year. The Audit Committee assists the Board in
discharging its review responsibilities.
The main features of the internal control system with respect to
financial reporting, implemented throughout the year are:
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 32 and 36 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.
• segregation of duties between the preparation of valuations
and recording into accounting records;
• independent third party valuations of the majority of the
asset-based investments within the portfolio are undertaken
annually;
• reviews of valuations are carried out by the Valuation
Committee 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;
• all published financial reports are reviewed by Albion Capital
Group LLP’s compliance department;
• the Board reviews financial information; and
• a separate Audit Committee of the Board reviews published
financial information.
During the year, 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, the Board 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 Board reviewed
internal audit reports prepared by PKF Littlejohn LLP, and have
access to the internal audit partner of PKF Littlejohn LLP.
In addition to this, Ocorian Depositary (UK) Limited, the
Company’s external Depositary, 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 any 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.
42
Albion Venture Capital Trust PLC
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 is on 7 September
2021, which typically includes a presentation from the Manager
on the portfolio and on the Company, and a presentation from a
portfolio company, however, please see the Chairman's
statement on pages 8 and 9 for further information relating to
special circumstances for this year’s Meeting.
Shareholders and financial advisers are able to obtain
information on holdings and performance using the contact
details provided on page 2.
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. More information on share buy-backs can be found in the
Chairman's statement on page 8.
Statement of compliance
The Directors consider that the Company has complied
throughout the year ended 31 March 2021 with all the relevant
provisions set out in the AIC Code issued in 2019. By reporting
against the AIC Code, the Board are meeting their obligations in
relation to the 2018 UK Corporate Governance Code (and
associated disclosure requirements under paragraph 9.8.6 of the
Listing Rules). The Directors also consider that they are
complying with their statutory responsibilities and other
regulatory provisions which have a bearing on the Company.
For and on behalf of the Board
Richard Glover
Chairman
21 June 2021
261393 Albion Capital pp32-pp45.qxp 21/06/2021 18:14 Page 43
Directors’ remuneration report
The AIC Code requires that all Directors submit themselves for
re-election annually, therefore in accordance with the AIC Code,
Richard Glover, John Kerr, Ann Berresford and Richard Wilson will
offer themselves for re-election at the forthcoming Annual
General Meeting.
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
communicate their thoughts to the Board, which it takes into
account where appropriate when formulating its policy. At the
last Annual General Meeting, 94.2% of shareholders voted for
the resolution approving the Directors’ remuneration report,
5.8% of shareholders voted against the resolution and of the
total votes cast, 170,580 were withheld (being 0.2% of total
voting rights), 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.
The Committee meets at least once a year and met once during
the year under review with full attendance from all of its
members.
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.
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.
An ordinary resolution will be proposed at the Annual General
Meeting of the Company to be held on 7 September 2021 for the
approval of the Directors’ remuneration report as set out below.
The current Remuneration Policy was approved by shareholders
(95.0% of shareholders voted for the resolution, 5.0% voted
against the resolution, and of the total votes cast, 208,709 votes
were withheld (being 0.2% of total voting rights)) at the Annual
General Meeting held on 19 August 2020 and will remain in
place for a three year period. It will next be put to shareholders at
the 2023 AGM.
The Company’s independent Auditor, BDO LLP, is required to
give its opinion on certain information included in this report, as
indicated below. 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
Ann Berresford as Chairman.
The Remuneration Committee met after the year end to review
Directors’ responsibilities and fees against the market and
concluded that the current level of remuneration, which was last
increased for the Chairman in 2019, and for all other Directors in
2015, remained appropriate and so proposed no increase for the
forthcoming year.
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 current maximum
level of non-executive Directors’
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.
Albion Venture Capital Trust PLC
43
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Directors’ remuneration report continued
Directors’ remuneration
The following items have been audited.
The following table shows an analysis of the total fixed remuneration of individual Directors, exclusive of National Insurance:
Richard Glover
John Kerr
Ann Berresford
Richard Wilson (appointed 1 May 2020)
Ebbe Dinesen (retired 1 August 2019)
Jeff Warren (passed away 6 January 2020)
Year ended
31 March
2021
£’000
Year ended
31 March Percentage
2020 change
£’000 %
27
24
22
20
–
–
93
26 3.8
24 –
22 –
– N/A
7 N/A
18 N/A
97 (4.1)
There has been no increase in the base remuneration of each of the Directors’ positions during the year. The changes from the prior
year are due to remuneration being pro-rated for Richard Wilson; as he joined the Board part way through the year, Ebbe Dinesen; as
he resigned part way through the year and Jeff Warren; as he passed away part way through the year. Richard Glover’s remuneration
was increased in July 2019.
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. There are therefore no variable elements to the Directors’
remuneration.
Each Director of the Company was remunerated personally through the Manager’s payroll which has been recharged to the Company.
The Directors’ remuneration for the year ending 31 March 2022 is expected to be approximately £95,000.
In addition to Directors’ remuneration, the Company pays an annual premium in respect of Directors’ & Officers’ Liability Insurance
of £19,023 (2020: £8,932). The increase has been due to changes in the market for the provision of insurance, and is in line with the
increases seen across the wider Directors’ & Officers’ Liability Insurance market.
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:
Richard Glover
John Kerr
Ann Berresford
Richard Wilson (appointed 1 May 2020)
31 March 2021 31 March 2020
(Number (Number
of shares) of shares)
50,441 50,441
29,876 29,876
10,389 10,389
25,000 n/a
115,706 90,706
There have been no changes in the holdings of the Directors between 31 March 2021 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 912,780 shares in the Company as at 31 March 2021.
44
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Directors’ remuneration report continued
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 2011. 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.
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
250
200
150
100
50
0
Mar
2011
Mar
2012
Mar
2013
Mar
2014
Mar
2015
Mar
2016
Mar
2017
Mar
2018
Mar
2019
Mar
2020
Mar
2021
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
Total dividend distribution to shareholders
Share buybacks
Total Directors fees
For and on behalf of the Board
Richard Glover
Director
21 June 2021
31 March
2021
£’000
4,263
2,043
93
31 March
2020 Percentage
£’000 change
4,725 (9.8)%
1,866 9.5%
97 (4.1)%
Albion Venture Capital Trust PLC
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Independent Auditor’s report to the Members of
Albion Venture Capital Trust PLC
Opinion on the financial statements
In our opinion the financial statements:
• Reviewing the forecasted cash flows that support the
Directors’ assessment of going concern;
• give a true and fair view of the state of the Company’s affairs
as at 31 March 2021 and of the Company’s profit for the year
then ended;
• Evaluating management’s method of assessing the going
concern in light of market volatility and the present
uncertainties;
• have been properly prepared in accordance with United
• Calculating financial ratios to ascertain the financial health of
Kingdom Generally Accepted Accounting Practice;
the Company.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Company’s ability to continue as a going concern for a period of
at least twelve months from when the financial statements are
authorised for issue.
In relation to the Company’s reporting on how it has applied the
UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the Directors’ statement in
the financial statements about whether the Directors considered
it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with
respect to going concern are described in the relevant sections of
this report.
Overview
2021 2020
Key audit Valuation of Unquoted 4 4
matters Investments
Materiality £1,180,000 (2020: £1,008,000) based on 2%
(2020: 2%) of adjusted net asset value
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the
Company and its environment, including the Company’s system
of
internal control, and assessing the risks of material
misstatement in the financial statements. We also addressed the
risk of management override of internal controls, including
assessing whether there was evidence of bias by the Directors
that may have represented a risk of material misstatement.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, 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.
• have been prepared in accordance with the requirements of
the Companies Act 2006.
We have audited the financial statements of Albion Venture
Capital Trust PLC (the ‘Company’) for the year ended 31 March
2021 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).
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 believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion. Our audit opinion is consistent with the additional report
to the audit committee.
Independence
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. The period of total uninterrupted engagement
including retenders and reappointments is 14 years, covering the
years ended 31 March 2008 to 31 March 2021. We remain
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
in accordance with these
requirements. The non-audit services prohibited by that standard
were not provided to the Company.
responsibilities
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the Directors’ assessment of the Company’s ability
to continue to adopt the going concern basis of accounting
included:
• Obtaining the VCT compliance reports during the year and as
at year end and reviewing their calculations to ensure that the
Company was meeting its requirements to retain VCT status;
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Independent Auditor’s report to the Members of
Albion Venture Capital Trust PLC continued
Key Audit Matter
How the scope of our audit addressed the key audit matter
Valuation of investments
(Notes 2 and 11 to the financial
statements)
Our sample for the testing of unquoted investments was stratified according to risk
considering, inter alia, the value of individual investments, the nature of the investment, the
extent of the fair value movement and the subjectivity of the valuation technique.
There is a high level of estimation
uncertainty involved in determining
the
investment
valuations; consisting of both
equity and loan stock instruments.
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.
We tested a sample of 74% of the unquoted investment portfolio by value of investment
holdings. The remainder of the portfolio has been subject to an analytical review.
47% of the unquoted portfolio is based on valuations using net assets, cost (where the
investment was recently acquired), the price of a recent investment, or an offer to acquire the
investee company.
For such investments, we:
• checked the cost or net assets or third party offer to supporting evidence,
• reviewed the calibration of fair value 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 2021. This is particularly pertinent in those
circumstances where the impact of COVID-19 subsequent to the transaction data may
call into question whether the price of recent investment remains reflective of fair value.
The remaining 53% of the investment portfolio is valued with reference to more subjective
techniques with 42% supported by a valuation performed by experts (34% based on
discounted cash flows and 8% using earnings multiples). The remaining 11% of the portfolio
is valued using multiples of revenue or earnings, as described in note 11.
Our sample for unquoted equity investments valuation testing is stratified according to risk,
having regard to the subjectivity of the inputs to the valuations. Our procedures for the
sample selected for detailed testing included:
• Considering whether the valuation methodology is the most appropriate in the
circumstances under the International Private Equity and Venture Capital Valuation
(“IPEV”) Guidelines
• Re-performing the calculation of the investment
• Verifying and benchmarking key inputs and estimates to independent information from
our own research valuations and against metrics from the most recent investments
• Challenging the assumptions inherent to valuation of unquoted investments and
assessment of impact of the estimation uncertainty concerning these assumptions and
the disclosure of these uncertainties in the financial statements
• Where a valuation has been performed by a third party management’s expert, we have
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. We have also considered any updates for subsequent information to the valuation
made by the investment manager and obtained appropriate evidence for those changes
• Where appropriate, performing sensitivity analysis on the valuation calculations where
there is sufficient evidence to suggest reasonable alternative inputs might exist
• We had particular attention on specific areas surrounding Covid-19. This was addressed by
challenging key assumptions made in the valuation and ensuring that the valuation
methodology applied remains applicable given the economic impact of Covid-19
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
For a sample of loans held at fair value included above, we:
• 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
rate since acquisition and considering the “unit of account” concept
• Reviewed the treatment of accrued redemption premium/other fixed returns in line with
the SORP
Key observations:
Based on the procedures performed we noted that the methodology and assumptions used
by the Investment Manager were supported by the evidence obtained.
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 as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as
follows:
Company financial statements
2021 2020
Materiality £1,180,000 £1,008,000
Basis for determining materiality 2% of adjusted net asset value
Rationale for the benchmark applied In setting materiality, we have had regard to the nature and disposition of the
investment portfolio. Given that the VCT’s portfolio is comprised of unquoted
investments which would typically have a wider spread of reasonable alternative
possible valuations, we have applied a percentage of 2% of adjusted net asset value.
The benchmark used is lower than the net asset value to take into account cash that
has been recently raised from disposals of investments.
Performance materiality £890,000 £756,000
Basis for determining performance 75% of materiality
materiality The level of performance materiality applied was set after having considered a number
of factors including the expected total value of known and likely misstatements and the
level of transactions in the year.
48
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Independent Auditor’s report to the Members of
Albion Venture Capital Trust PLC continued
Lower Threshold
Profit before tax could influence users of the financial statements
as it is a measure of the Company’s performance of income
generated from its investments after expenses. Thus, we have set
a lower testing threshold for those items impacting revenue
return of £85,000 which is based on 5% of gross expenditure
(2020: £214,000).
• Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks;
• The section of the annual report that describes the review of
effectiveness of risk management and internal control
systems; and
• The section describing the work of the audit committee.
Reporting threshold
We agreed with the Audit Committee that we would report to
them all individual audit differences in excess of £23,000 (2020:
£20,000). We also agreed to report differences below this
threshold that, in our view, warranted reporting on qualitative
grounds.
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. Our responsibility is to read the
other information and, in doing so, consider whether the other
information
inconsistent with the financial
statements or our knowledge obtained in the course of 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 this gives
rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact.
is materially
We have nothing to report in this regard.
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in
relation to going concern, longer-term viability and that part of
the Corporate Governance Statement relating to the Company’s
compliance with the provisions of the UK Corporate Governance
Statement specified for our review.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit.
Going concern and longer-term viability
• The Directors' statement with regards to the appropriateness
of adopting the going concern basis of accounting and any
material uncertainties; and
• The Directors’ explanation as to its assessment of the entity’s
prospects, the period this assessment covers and why the
period is appropriate.
Other Code provisions
• Directors' statement on fair, balanced and understandable;
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work
performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions
and matters as described below.
Strategic report and Directors’ report
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.
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.
Directors’ remuneration
In our opinion, the part of the Directors’ remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
Matters on which we are required to report by exception
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
• 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 Statement of Directors’
responsibilities, 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
Albion Venture Capital Trust PLC
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Independent Auditor’s report to the Members of
Albion Venture Capital Trust PLC continued
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether
due to fraud or error.
• Recalculated investment management fees in total
• Obtained independent confirmation of bank balances.
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.
A further description of our responsibilities is available on the
Financial
at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor’s report.
Reporting
Council’s
website
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.
Peter Smith (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London
United Kingdom
21 June 2021
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
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.
Extent to which the audit was capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
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. Our
audit work focussed on the valuation of unquoted investments,
where the risk of material misstatement due to fraud is the
greatest. We also:
• Obtained independent evidence to support the ownership of
investments
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Income statement
Revenue Capital Total Revenue Capital Total
Note £’000 £’000 £’000 £’000 £’000 £’000
Year ended 31 March 2021
Year ended 31 March 2020
Gains/(losses) on investments 3 – 6,508 6,508 – (4,925) (4,925)
Investment income 4 2,467 – 2,467 2,858 – 2,858
Investment management fee 5 (337) (1,010) (1,347) (340) (1,020) (1,360)
Other expenses 6 (363) – (363) (375) – (375)
Profit/(loss) on ordinary
activities before tax 1,767 5,498 7,265 2,143 (5,945) (3,802)
Tax (charge)/credit on ordinary
activities 8 (299) 192 (107) (333) 194 (139)
Profit/(loss) and total comprehensive
income attributable to shareholders 1,468 5,690 7,158 1,810 (5,751) (3,941)
Basic and diluted return/(loss) per
share (pence)* 10 1.46 5.64 7.10 1.88 (5.98) (4.10)
* adjusted for treasury shares
The accompanying notes on pages 55 to 68 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 2021 31 March 2020
Note £’000 £’000
Fixed asset investments 11 28,355 49,243
Current assets
Trade and other receivables 13 1,561 252
Cash and cash equivalents 43,562 21,782
45,123 22,034
Total assets 73,478 71,277
Payables: amounts falling due within one year
Trade and other payables 14 (790) (649)
Total assets less current liabilities 72,688 70,628
Equity attributable to equity holders
Called-up share capital 15 1,165 1,148
Share premium 40,668 39,477
Capital redemption reserve 7 7
Unrealised capital reserve 3,588 13,178
Realised capital reserve 21,829 6,549
Other distributable reserve 5,431 10,269
Total equity shareholders’ funds 72,688 70,628
Basic and diluted net asset value per share (pence)* 16 73.13 70.13
* excluding treasury shares
The accompanying notes on pages 55 to 68 form an integral part of these Financial Statements.
These Financial Statements were approved by the Board of Directors and authorised for issue on 21 June 2021, and were signed on
its behalf by
Richard Glover
Chairman
Company number: 03142609
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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 2020 1,148 39,477 7 13,178 6,549 10,269 70,628
Return/(loss) and total comprehensive
income for the year – – – 1,831 3,859 1,468 7,158
Transfer of previously unrealised
gains on realisations of investments – – – (11,421) 11,421 – –
Purchase of treasury shares – – – – – (2,043) (2,043)
Issue of equity 17 1,225 – – – – 1,242
Cost of issue of equity – (34) – – – – (34)
Net dividends paid (note 9) – – – – – (4,263) (4,263)
At 31 March 2021 1,165 40,668 7 3,588 21,829 5,431 72,688
At 1 April 2019 970 26,042 7 19,327 6,151 15,050 67,547
(Loss)/return and total comprehensive
income for the year – – – (5,217) (534) 1,810 (3,941)
Transfer of previously unrealised
gains on realisations of investments – – – (932) 932 – –
Purchase of treasury shares – – – – – (1,866) (1,866)
Issue of equity 178 13,751 – – – – 13,929
Cost of issue of equity – (316) – – – – (316)
Net dividends paid (note 9) – – – – – (4,725) (4,725)
At 31 March 2020 1,148 39,477 7 13,178 6,549 10,269 70,628
* These reserves amount to £27,260,000 (2020: £16,818,000) which is considered distributable.
Albion Venture Capital Trust PLC
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Statement of cash flows
Year ended Year ended
31 March 2021 31 March 2020
£’000 £’000
Cash flow from operating activities
Loan stock income received 2,985 2,810
Deposit interest received 14 87
Dividend income received 24 50
Investment management fee paid (1,337) (1,345)
Other cash payments (378) (360)
UK Corporation tax paid (204) (178)
Net cash flow from operating activities 1,104 1,064
Cash flow from investing activities
Purchase of fixed asset investments (5,040) (4,650)
Disposal of fixed asset investments 30,620 12,129
Net cash flow from investing activities 25,580 7,479
Cash flow from financing activities
Issue of share capital 668 13,019
Cost of issue of equity (17) (32)
Dividends paid* (3,714) (4,087)
Purchase of own shares (including costs) (1,841) (1,866)
Net cash flow from financing activities (4,904) 7,034
Increase in cash and cash equivalents 21,780 15,577
Cash and cash equivalents at start of the year 21,782 6,205
Cash and cash equivalents at end of the year 43,562 21,782
* 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 and the timing of unclaimed dividends.
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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 Financial Statements have been prepared on a going
concern basis and further details can be found in the Directors’
report on page 32.
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”) in
accordance with FRS 102 sections 11 and 12. The Company
values investments by following the International Private Equity
and Venture Capital Valuation (“IPEV”) Guidelines as updated in
2018 and further detail on the valuation techniques used are
outlined in note 2 below.
Company information is shown 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 other distributable reserve when
a share becomes ex-dividend.
Current assets and payables
Receivables (including debtors due after more than one year),
payables and cash are carried at amortised cost, in accordance
with FRS 102. Debtors due after more than one year meet the
definition of a financing transaction held at amortised cost, and
interest will be recognised through capital over the credit period
using the effective interest method. There are no financial
liabilities other than payables.
Albion Venture Capital Trust PLC
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Notes to the Financial Statements continued
Accounting policies (continued)
2.
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.
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.
Investment income
Equity income
Dividend income is included in revenue when the investment is
quoted ex-dividend.
Unquoted loan stock
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
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Albion Venture Capital Trust PLC
Reserves
Called-up share capital
This reserve accounts for the nominal value of the Company’s
shares.
Share premium
This reserve accounts for the difference between the price paid
for shares and the nominal value of the shares, less issue costs
and transfers to the other distributable reserve.
Capital redemption reserve
This reserve accounts for amounts by which the issued share
capital is diminished through the repurchase and cancellation of
the Company’s own shares.
Unrealised capital reserve
Increases and decreases in the valuation of investments held at
the year end against cost are included in this reserve.
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.
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Notes to the Financial Statements continued
Gains/(losses) on investments
3.
Year ended Year ended
31 March 2021 31 March 2020
£’000 £’000
Unrealised gains/(losses) on fixed asset investments 1,831 (5,217)
Realised gains on fixed asset investments 4,677 292
6,508 (4,925)
Investment income
4.
Year ended Year ended
31 March 2021 31 March 2020
£’000 £’000
Loan stock interest 2,432 2,719
Dividend income 24 50
Bank interest 11 89
2,467 2,858
Investment management fee
5.
Year ended Year ended
31 March 2021 31 March 2020
£’000 £’000
Investment management fee charged to revenue 337 340
Investment management fee charged to capital 1,010 1,020
1,347 1,360
Further details of the Management agreement under which the investment management fee and any performance incentive fee is
paid are given in the Strategic report on pages 13 and 14.
During the year, services of a total value of £1,401,000 (2020: £1,413,000), were purchased by the Company from Albion Capital
Group LLP; this includes £1,347,000 (2020: £1,360,000) of investment management fee and £54,000 (2020: £53,000) 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 £359,000 (2020: £349,000).
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 2021, fees of £193,000 attributable to the investments of the Company were received by
Albion Capital Group LLP pursuant to these arrangements (2020: £232,000).
Albion Capital Group LLP, its partners and staff hold a total of 912,780 shares in the Company as at 31 March 2021.
In October 2019, the Company entered into an offer agreement relating to the Offers with the Company's investment manager
Albion Capital Group LLP (“Albion”), pursuant to which Albion received a fee of 2.5 per cent. of the gross proceeds of the Offers and
out of which Albion paid 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 2021 31 March 2020
£’000 £’000
Directors’ fees (including NIC) 101 106
Auditor’s remuneration for statutory audit services (excluding VAT) 37 34
Secretarial and administration fee 54 53
Other administrative expenses 171 182
363 375
Directors’ fees
7.
The amounts paid to and on behalf of Directors during the year are as follows:
Year ended Year ended
31 March 2021 31 March 2020
£’000 £’000
Directors’ fees 93 97
National insurance 8 9
101 106
The Company’s key management personnel are the Directors. Further information regarding Directors’ remuneration can be found in
the Directors’ remuneration report on page 44.
8.
Tax charge/(credit) on ordinary activities
Year ended 31 March 2021 Year ended 31 March 2020
Revenue Capital Total Revenue Capital
£’000 £’000 £’000 £’000 £’000
UK corporation tax in respect of current year 332 (192) 140 397 (194)
UK corporation tax in respect of prior year (33) – (33) (64) –
299 (192) 107 333 (194)
Total
£’000
203
(64)
139
Factors affecting the tax charge:
Year ended Year ended
31 March 2021 31 March 2020
£’000 £’000
Return/(loss) on ordinary activities before taxation 7,265 (3,802)
Tax charge/(credit) on profit/(loss) at the standard rate of 19% (2020: 19%) 1,380 (722)
Factors affecting the charge:
Non-taxable (gains)/losses (1,236) 935
Income not taxable (4) (10)
Consortium relief in respect of prior years (33) (64)
107 139
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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.
(2020: 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 2021 31 March 2020
£’000 £’000
Dividend of 2.50p per share paid on 31 July 2020 (31 July 2019: 2.50p per share) 2,541 2,382
Dividend of 1.74p per share paid on 29 January 2021 (31 January 2020: 2.50p per share) 1,745 2,365
Unclaimed dividends (23) (22)
4,263 4,725
In addition to the dividends summarised above, the Board has declared a first dividend for the year ending 31 March 2022 of
1.83 pence per share to be paid on 30 July 2021 to shareholders on the register on 9 July 2021. The total dividend will be
approximately £1,819,000.
The Board has also declared a special dividend of 15.00 pence per share, payable on 30 July 2021 to shareholders on the register on
9 July 2021. The total dividend will be approximately £14,909,000.
During the year, unclaimed dividends older than twelve years of £23,000 (2020: £22,000) 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/(loss) per share
Year ended 31 March 2021 Year ended 31 March 2020
Revenue Capital Total Revenue Capital
Total
Return/(loss) attributable to equity shares (£’000) 1,468 5,690 7,158 1,810 (5,751)
Weighted average shares in issue 100,836,952 96,167,014
(adjusted for treasury shares)
Return/(loss) attributable per equity share (pence) 1.46 5.64 7.10 1.88 (5.98)
(3,941)
(4.10)
The weighted average number of shares is calculated after adjusting for treasury shares of 17,153,431 (2020: 14,084,031).
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 2021 31 March 2020
Investments held at fair value through profit or loss £’000 £’000
Unquoted equity 17,563 25,773
Unquoted loan stock 10,792 23,470
28,355 49,243
31 March 2021 31 March 2020
£’000 £’000
Opening valuation 49,243 61,459
Purchases at cost 5,040 5,090
Disposal proceeds (31,883) (12,295)
Realised gains 4,677 292
Movement in loan stock accrued income (553) (86)
Unrealised gains/(losses) 1,831 (5,217)
Closing valuation 28,355 49,243
Movement in loan stock accrued income
Opening accumulated loan stock accrued income 752 838
Movement in loan stock accrued income (553) (86)
Closing accumulated loan stock accrued income 199 752
Movement in unrealised gains
Opening accumulated unrealised gains 13,178 19,327
Transfer of previously unrealised gains to realised reserve on realisations of investments (11,421) (932)
Unrealised gains/(losses) 1,831 (5,217)
Closing accumulated unrealised gains 3,588 13,178
Historic cost basis
Opening book cost 35,313 41,294
Purchases at cost 5,040 5,090
Sales at cost (15,785) (11,071)
Closing book cost 24,568 35,313
Purchases and disposals detailed above do not agree to the Statement of cash flows due to restructuring of investments, conversion
of convertible loan stock and settlement debtors and creditors.
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 2021 31 March 2020
Valuation methodology £’000 £’000
Cost and price of recent investment (reviewed for impairment or uplift) 11,408 6,607
Third party valuation – Discounted cash flow 9,835 9,968
Third party valuation - Earnings multiple 2,196 28,110
Net assets 1,850 2,034
Earnings multiple 1,666 –
Revenue multiple 1,400 2,524
28,355 49,243
When using the cost or price of a recent investment in the valuations the Company looks to re-calibrate this price at each valuation
point by reviewing progress within the investment, comparing against the initial investment thesis, assessing if there are any
significant events or milestones that would indicate the value of the investment has changed and considering whether a market-based
methodology (i.e. using multiples from comparable public companies) or a discounted cashflow forecast would be more appropriate.
The main inputs into the calibration exercise, and for the valuation models using multiples, are revenue, EBITDA and P/E multiples
(based on the most recent revenue, EBITDA or earnings achieved and equivalent corresponding revenue, EBITDA or earnings multiples
of comparable companies), quality of earnings assessments and comparability difference adjustments. Revenue multiples are often
used, rather than EBITDA or earnings, due to the nature of the Company’s investments, being in growth and technology companies
which are not normally expected to achieve profitability or scale for a number of years. Where an investment has achieved scale and
profitability the Company would normally then expect to switch to using an EBITDA or earnings multiple methodology.
In the calibration exercise and in determining the valuation for the Company’s equity instruments, comparable trading multiples are
used. In accordance with the Company’s policy, appropriate comparable companies based on industry, size, developmental stage,
revenue generation and strategy are determined and a trading multiple for each comparable company identified is then calculated.
The multiple is calculated by dividing the enterprise value of the comparable group by its revenue, EBITDA or earnings. The trading
multiple is then adjusted for considerations such as illiquidity, marketability and other differences, advantages and disadvantages
between the portfolio company and the comparable public companies based on company specific facts and circumstances.
Fair value investments had the following movements between valuation methodologies between 31 March 2020 and 31 March 2021:
Value as at
31 March 2021
Change in valuation methodology (2020 to 2021) £’000 Explanatory note
Revenue multiple to cost and price of recent investment
(reviewed for impairment or uplift) 1,946 Funding round led to new methodology
Cost and price of recent investment (reviewed for impairment or uplift)
to earnings multiple 1,666 More appropriate valuation methodology
Net assets to cost and price of recent investment
(reviewed for impairment or uplift) 356 External funding round led to new methodology
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, there are no other more relevant
methods of valuation which would be reasonable as at 31 March 2021.
Albion Venture Capital Trust PLC
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Notes to the Financial Statements continued
Fixed asset investments (continued)
11.
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. 75% of the portfolio of investments, consisting of equity and loan stock, is based on
recent investment price, net assets and cost. For the remainder of the portfolio, the Board has considered the reasonable possible
alternative input assumptions on the valuation of the portfolio and believes that changes to the inputs (by adjusting the discounts
rates, earnings and revenue multiples) could lead to a change in fair value of the portfolio. The Board has reviewed the Manager’s
adjusted inputs for a number of the largest portfolio companies (by value) which covers 18% of the portfolio. This has resulted in a
total coverage of 93% of the portfolio of investments. The main inputs considered for each type of valuation is as follows:
Portfolio
fair value
NAV
company
Valuation technique sector Input
Base Change of investments
Case* in input (£’000)
(pence
per share)
Change in
Change in
Third party valuation – Discounted Renewable Discount rate 5.5% +1.0% 196
cashflow energy
-1.0% (191)
Earnings multiple Software & other Earnings
technology multiple
8.0x +1.0 109
-1.0 (109)
Revenue multiple Healthcare Revenue
6.0x +1.4 330
(including digital multiple
healthcare)
-2.0 (467)
0.20
(0.19)
0.11
(0.11)
0.33
(0.47)
* As detailed in the accounting policies on page 55, the base case is based on market comparables, discounted where appropriate for marketability, in accordance with the
IPEV guidelines.
The impact of these changes could result in an overall increase in the valuation of the equity investments by £636,000 (3.6%) or a
decrease in the valuation of equity investments by £767,000 (4.4%).
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 of a portfolio company. The size and structure of the companies with unquoted securities may
result in certain holdings in the portfolio representing a participating interest without there being any partnership, joint venture or
management consortium agreement. The investment listed below is held as part of an investment portfolio and therefore, as
permitted by FRS 102 section 9.9B, it is measured at fair value through profit and loss 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 2021 as described below.
Registered
Aggregate
address and Profit/(loss)
capital and Results % class
country of before tax
reserves for 16 month and
Company incorporation £’000
£’000 period ended share type
% total
voting
rights
Kew Green VCT (Stansted) Limited EC1M 5QL, UK n/a*
4,091 31 December 2019 45.2% Ordinary
45.2%
* The company files filleted accounts which do not disclose this information.
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Notes to the Financial Statements continued
13. Current assets
31 March 2021 31 March 2020
Trade and other receivables £’000 £’000
Other receivables 107 172
UK corporation tax receivable 97 64
Prepayments and accrued income 21 16
Deferred consideration over one year 1,336 –
1,561 252
The deferred consideration over one year relates to the sale of G. Network Communications Limited in December 2020. These
proceeds are receivable in January 2024, and have been discounted to present value at the prevailing market rate, including a
provision for counterparty risk. This constitutes a financing transaction, and has been accounted for using the policy disclosed in note 2.
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 2021 31 March 2020
£’000 £’000
Trade payables 219 13
UK Corporation tax payable 140 203
Accruals and deferred income 431 433
790 649
The Directors consider that the carrying amount of payables is not materially different to their fair value.
15. Called-up share capital
Allotted, called-up and fully paid £’000
114,789,539 Ordinary shares of 1 penny each at 31 March 2020 1,148
1,759,986 Ordinary shares of 1 penny each issued during the year 17
116,549,525 Ordinary shares of 1 penny each at 31 March 2021 1,165
14,084,031 Ordinary shares of 1 penny each held in treasury at 31 March 2020 (141)
3,069,400 Ordinary shares purchased during the year to be held in treasury (31)
17,153,431 Ordinary shares of 1 penny each held in treasury at 31 March 2021 (172)
99,396,094 Ordinary shares of 1 penny each in circulation* at 31 March 2021 994
* Carrying one vote each
The Company purchased 3,069,400 Ordinary shares (2020: 2,566,843) to be held in treasury at a cost of £2,043,000 (2020:
£1,866,000) representing 2.6 per cent. (2020: 2.2 per cent.) of its issued share capital as at 31 March 2021. The shares purchased for
treasury were funded from the other distributable reserve.
The Company holds a total of 17,153,431 shares (2020: 14,084,031) in treasury at a nominal value of £172,000, representing
14.7 per cent. of the issued Ordinary share capital as at 31 March 2021.
Albion Venture Capital Trust PLC
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Notes to the Financial Statements continued
15. Called up share capital (continued)
Under the terms of the Dividend Reinvestment Scheme Circular dated 10 July 2008, the following new Ordinary shares of nominal
value 1 penny each 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 2020 494,534 5 67.63 318 65.00
29 January 2021 329,463 3 67.85 222 64.00
823,997 8 540
During the year, the Company issued the following new Ordinary shares of nominal value 1 penny each under the Albion VCTs
Prospectus Top Up Offers 2019/20:
Aggregate Opening
nominal Net market price
value Issue price consideration on allotment
Number of of shares (pence received date (pence
Date of allotment shares allotted £’000 per share) £’000 per share)
30 April 2020 193,917 2 72.50 138 63.50
30 April 2020 742,072 7 73.20 530 63.50
935,989 9 668
16. Basic and diluted net asset value per share
31 March 2021 31 March 2020
Basic and diluted net asset value per share (pence) 73.13 70.13
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 99,396,094 Ordinary shares (2020: 100,705,508).
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 36 of the Directors’ report.
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.
The principal risks arising from the Company’s operations are:
• Market and investment 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.
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Notes to the Financial Statements continued
17. Capital and financial instruments risk management (continued)
Market risk
As a Venture Capital Trust, it is the Company’s specific nature to evaluate the market risk of its portfolio in unquoted companies, details
of which are shown on page 25. Market risk is the exposure of the Company to the revaluation and devaluation of investments as a
result of macroeconomic changes. The main driver of market risk is the dynamics of market quoted comparators, as well as the
financial and operational performance of portfolio companies. The Board seeks to reduce this risk by having a spread of investments
across a variety of sectors. More details on the sectors the Company invests in can be found in the pie chart on page 10.
The Manager and the Board formally review market 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.
As required under FRS 102 the Board is required to illustrate by way of a sensitivity analysis the extent to which the assets are exposed
to market risk. The Board considers that the value of the fixed asset investment portfolio is sensitive to a change of 10% based on the
current economic climate. The impact of a 10% change has been selected as this is considered reasonable given the current level of
volatility observed. When considering the appropriate level of sensitivity to be applied, the Board has considered both historic
performance and future expectations.
The sensitivity of a 10% increase or decrease in the valuation of the fixed asset investment portfolio (keeping all other variables
constant) would increase or decrease the net asset value and return for the year by £2,836,000. Further sensitivity analysis on fixed
asset investments is included in note 11.
Investment risk (including investment price risk)
Investment risk (including 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. 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 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 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 industries in which investments have been made are contained in the
pie chart in the Strategic report on page 10.
The maximum investment risk on the balance sheet date is the value of the fixed asset investment portfolio which is £28,355,000
(2020: £49,243,000). Fixed asset investments form 39 per cent. of the net asset value on 31 March 2021 (2020: 70 per cent.).
Interest rate risk
It is the Company’s policy to accept a degree of interest rate risk on its financial assets through the effect of interest rate changes. On
the basis of the 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 £327,000 (2020: £222,000). 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
11.9 per cent. (2020: 12.8 per cent.). The weighted average period to maturity for the fixed rate assets is approximately 6.9 years
(2020: 6.0 years).
Albion Venture Capital Trust PLC
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Notes to the Financial Statements continued
17. Capital and financial instruments risk management (continued)
The Company’s financial assets and liabilities, all denominated in Sterling, consist of the following:
31 March 2021 31 March 2020
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 – – 17,563 17,563 – – 25,773 25,773
Unquoted loan stock 10,233 247 312 10,792 22,730 257 483 23,470
Receivables* – – 1,443 1,443 – – 175 175
Payables* – – (650) (650) – – (446) (446)
Cash – 43,562 – 43,562 – 21,782 – 21,782
10,233 43,809 18,668 72,710 22,730 22,039 25,985 70,754
* 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 and other similar instruments prior to investment, and as part of its ongoing
monitoring of investments. In doing this, it takes into account the extent and quality of any security held. For loan stock investments
made prior to 6 April 2018, which account for 83.8 per cent. of loan stock by value, typically loan stock instruments have a fixed or
floating charge, which may or may not have been 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 2021 was limited to £10,792,000 of unquoted loan stock instruments (2020:
£23,470,000), £43,562,000 cash deposits with banks (2020: £21,782,000) and £1,561,000 of other receivables (2020: £252,000).
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.
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.
Impaired loan stock instruments have a first fixed charge or a fixed and floating charge over the assets of the portfolio company and
the Board estimate that the security value approximates to the carrying value.
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Notes to the Financial Statements continued
17. Capital and financial instruments risk management (continued)
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 £5,596,000 as at 31 March 2021 (2020: £6,809,000).
The Company has no committed borrowing facilities as at 31 March 2021 (2020: £nil) and had cash balances of £43,562,000 (2020:
£21,782,000). 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 £790,000 for the year to 31 March 2021 (2020: £649,000).
The carrying value of loan stock investments as analysed by expected maturity dates is as follows:
31 March 2021 31 March 2020
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 864 486 916 2,266 7,643 488 917 9,048
1-2 years – 806 – 806 2,110 – – 2,110
2-3 years – – – – 544 – – 544
3-5 years 1,618 – 5 1,623 1,511 – – 1,511
5+ years 5,649 448 – 6,097 9,809 448 – 10,257
8,131 1,740 921 10,792 21,617 936 917 23,470
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 £1,045,000 (2020: £1,026,000).
The Company does not hold any assets as the result of the enforcement of security during the period, and believes that the carrying
values for both those valued below cost and past due assets are covered by the value of security held for these loan stock investments.
In view of the availability of adequate cash balances and the repayment profile of loan stock investments, 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 2021 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 2021 (2020: £nil).
There are no contingent liabilities or guarantees given by the Company as at 31 March 2021 (31 March 2020: £nil).
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Notes to the Financial Statements continued
Post balance sheet events
19.
Since 31 March 2021 the Company has had the following post balance sheet events:
• Investment of £813,000 in a new portfolio company, an open sources API management platform that enables enterprises to
manage their APIs through their lifecycle (from design to publishing to controlling access and security);
• Investment of £736,000 in a new portfolio company, a provider of digital therapeutics and decentralised clinical trials for
respiratory conditions;
• Investment of £564,000 in an existing portfolio company, uMotif Limited; and
• Investment of £309,000 in a new portfolio company, Accelex Technology Limited (T/A Accelex).
20. Related party transactions
Other than transactions with the Manager as disclosed in note 5, and the Directors’ remuneration disclosed in the Directors’
remuneration report on page 44, there are no other related party transactions or balances requiring disclosure.
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Notice of Annual General Meeting
SHAREHOLDERS, WHILST ENCOURAGED TO VOTE ON THE RESOLUTIONS BEING PROPOSED, SHOULD TAKE NOTE OF THE
SPECIAL ARRANGEMENTS FOR THIS YEAR’S AGM (SEE PAGES 8 AND 9). DUE TO ONGOING UNCERTAINTY AROUND
LARGE INDOOR MEETINGS, SHAREHOLDERS WILL NOT BE ALLOWED ENTRY INTO THE BUILDING WHERE THE AGM IS
HELD. ANY CHANGES TO THESE ARRANGEMENTS WILL BE MADE AVAILABLE AT WWW.ALBION.CAPITAL/FUNDS/AAVC.
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Albion Venture Capital Trust PLC (the “Company”) will be held at the
registered office of, 1 Benjamin Street, London EC1M 5QL on 7 September 2021 at noon for the following purposes:
To consider and, if thought fit, to pass the following resolutions, of which numbers 1 to 9 will be proposed as ordinary resolutions and
numbers 10 to 12 as special resolutions.
Ordinary Business
1. To receive and adopt the Company’s accounts for the year ended 31 March 2021 together with the Strategic report and the
reports of the Directors and Auditor.
2. To approve the Directors’ remuneration report for the year ended 31 March 2021.
3. To re-elect Richard Glover as a Director of the Company.
4. To re-elect John Kerr as a Director of the Company.
5. To re-elect Ann Berresford as a Director of the Company.
6. To re-elect Richard Wilson as a Director of the Company.
7. 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.
8. To authorise the Directors to agree the Auditor’s remuneration.
Authority to allot shares
Special Business
9.
That the Directors be generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006 (the
“Act”) to allot Ordinary shares in the capital of the Company ("Ordinary shares") up to an aggregate nominal amount of
£233,099 (which comprises approximately 20% of the Company’s issued Ordinary shares as at the date of this 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 of the Company, but so that the Company may, before such expiry, 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 or grant rights to subscribe for or convert securities into shares
pursuant to such an offer or agreement as if this authority had not expired.
10. Authority for the disapplication of pre-emption rights
That, subject to the authority and conditional on the passing of resolution number 9, the Directors be empowered, pursuant to
sections 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 9 and/or 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.
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Notice of Annual General Meeting continued
11. Authority to purchase own shares
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 17,470,774 or, if lower, such
number of Ordinary shares as shall equal 14.99% of the issued Ordinary share capital of the Company 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;
(c) the maximum price, exclusive of any expenses, which may be paid for each Ordinary share is an amount equal to the
higher of (a) 105% of the average of the middle market quotations for an Ordinary share, as derived from the London
Stock Exchange Daily Official List, for the five business days immediately preceding the day on which the Ordinary 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 make a contract or contracts to purchase Ordinary 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.
12. Cancellation of share premium and capital redemption reserve
That the amount standing to the credit of the Company’s share premium account and capital redemption reserve as at 6pm
on the day before the date of the Final Hearing be cancelled and reclassified as other distributable reserves.
By Order of the Board
Albion Capital Group LLP
Company Secretary
Registered office
1 Benjamin Street,
London, EC1M 5QL
21 June 2021
Albion Venture Capital Trust PLC is registered in England and Wales with number 03142609
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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 AGM. 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; or
• 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 3 September 2021.
In accordance with good governance practice, the Company is offering shareholders use of an online service, offered by the
Company’s registrar, Computershare Investor Services, at www.investorcentre.co.uk/eproxy. Shareholders can use this service to
vote or appoint a proxy online. The same voting deadline of noon on 3 September 2021 applies as if you were using your
Personalised Voting Form to vote or appoint a proxy by post to vote for you. Shareholders who hold their shares electronically
may submit their votes through CREST, by submitting the appropriate and authenticated CREST message so as to be received
by the Company's registrar not later than 48 hours before the start of the meeting. Instructions on how to vote through CREST
can be found by accessing the following website: www.euroclear.com/CREST. Shareholders should not show this information to
anyone unless they wish to give proxy instructions on their behalf.
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 3 September 2021 (or, in the event
of any adjournment, on the date which is two business 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 3 September 2021. 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 provider(s) 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
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Notice of Annual General Meeting continued
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
members and, where applicable, their CREST sponsors or voting service provider(s) 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 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.
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 18 June 2021 being the latest practicable date prior to the publication of this Notice, the Company’s issued share capital
consists of 116,549,525 Ordinary shares with a nominal value of 1 penny each. The Company also holds 17,153,431 Ordinary
shares in treasury. Therefore, the total voting rights in the Company as at 18 June 2021 are 99,396,094.
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Albion Venture Capital Trust PLC
Albion Venture Capital Trust PLC
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