Albion Venture Capital Trust PLC
Albion Venture Capital Trust PLC
Annual Report and Financial
Statements for the year
ended 31 March 2022
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A member of the Association
of Investment Companies
This report is printed on Amadeus offset a totally recycled paper
produced using 100% recycled waste at a mill that has been
awarded the ISO 14001 certificate for environmental management.
The pulp is bleached using a totally chlorine free (TCF) process.
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263764 Albion Capital pp01-pp08.qxp 29/06/2022 15:44 Page 1
Contents
Page
2 Company information
3 Investment policy and financial calendar
4 Financial highlights
6 Chairman’s statement
9 Strategic report
19 Environmental, Social and Governance (“ESG”) report
22 The Board of Directors
23 The Manager
25 Portfolio of investments
27 Portfolio companies
33 Directors’ report
38 Statement of Directors’ responsibilities
39 Statement of corporate governance
45 Directors’ remuneration report
48 Independent Auditor’s report
54 Income statement
55 Balance sheet
56 Statement of changes in equity
57 Statement of cash flows
58 Notes to the Financial Statements
72 Notice of Annual General Meeting
Albion Venture Capital Trust PLC
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263764 Albion Capital pp01-pp08.qxp 29/06/2022 15:44 Page 2
Company information
Company name
Albion Venture Capital Trust PLC (the “Company”)
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
Manager, company secretary, AIFM and
registered office
Albion Capital Group LLP
1 Benjamin Street
London, EC1M 5QL
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgewater Road
Bristol, BS99 6ZZ
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
6 Snow Hill
London, EC1A 2AY
Legal adviser
Bird & Bird LLP
12 New Fetter Lane
London, EC4A 1JP
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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Albion Venture Capital Trust PLC
263764 Albion Capital pp01-pp08.qxp 29/06/2022 15:44 Page 3
Investment policy
Albion Venture Capital Trust PLC (the “Company”) is a Venture Capital Trust and the investment policy is intended to produce a regular
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% 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% of the adjusted share capital and reserves.
Financial calendar
Record date for first interim dividend
Payment of first interim dividend
Annual General Meeting
Announcement of Half-yearly results for the six months ending 30 September 2022
Payment of second interim dividend (subject to Board approval)
8 July 2022
29 July 2022
Noon on 6 September 2022
December 2022
31 January 2023
Albion Venture Capital Trust PLC
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263764 Albion Capital pp01-pp08.qxp 29/06/2022 15:44 Page 4
Financial highlights
242.72p
Total shareholder value – being net asset
value plus dividends paid per Ordinary share
since launch†
7.6%
25.30p
53.38p
Shareholder return for the year ended
31 March 2022†
Total tax-free dividend per share paid during
the year ended 31 March 2022
Net asset value per share as at
31 March 2022
Total shareholder value relative to the
FTSE All-Share Index total return
(in both cases with dividends reinvested)
250
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Mar
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Total shareholder value
FTSE All-Share Index total return
Methodology: The total shareholder value including original amount invested from 1 April 2012 (rebased to 100) assuming that dividends were reinvested at the
net asset value of the Company at the time that the shares were quoted ex-dividend. Transaction costs are not taken into account.
† These are considered Alternative Performance Measures, see notes 2 and 3 on page 11 of the Strategic report for further explanation.
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Albion Venture Capital Trust PLC
263764 Albion Capital pp01-pp08.qxp 29/06/2022 15:44 Page 5
Financial highlights continued
31 March 2022 31 March 2021
(pence per share) (pence per share)
Opening net asset value 73.13 70.13
Capital return 5.38 5.64
Revenue return 0.39 1.46
Total return 5.77 7.10
Dividends paid (25.30) (4.24)
Impact from share capital movements (0.22) 0.14
Net asset value 53.38 73.13
Ordinary shares
(pence per share)
Total dividends paid to 31 March 2022 189.34
Net asset value on 31 March 2022 53.38
Total shareholder value to 31 March 2022 242.72
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 highlights above are for 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 2023
of 1.33 pence per share to be paid on 29 July 2022 to shareholders on the register on 8 July 2022.
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%
70%
Increase in shareholder value
1 year average 7.6% p.a.
3 year average 3.8% p.a.
5 year average 6.0% p.a.
10 year average 5.8% p.a.
The graph above shows the one year, three year, five year and ten year total return to shareholders. This return comprises dividends
paid and the change in net asset value over the relevant periods.
Albion Venture Capital Trust PLC
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263764 Albion Capital pp01-pp08.qxp 29/06/2022 15:44 Page 6
Chairman’s statement
Introduction
I am delighted to announce that your Company has achieved a
positive total return in total shareholder value of 5.55 pence per
share, a 7.6% shareholder return for the year ended 31 March 2022
on the opening net asset value. The Company continues to benefit
from the resilience of its portfolio companies, many of whom have
shown growth over the past year, despite the ongoing uncertainty of
the Covid-19 pandemic, the high levels of inflation both in the UK
and across the world, and the war in Ukraine. There is still much
uncertainty on how the economy and the markets will be affected by
these ongoing disruptions. I am optimistic that our portfolio
companies will continue to add value over the longer term, and we
can still find new investment opportunities which will increase
shareholder value, but inevitably there will be disruption ahead.
Richard Glover
Chairman
Results and dividends
As at 31 March 2022, the Net Asset Value (“NAV”) was £63.9
million or 53.38 pence per share, compared to £72.7 million or
73.13 pence per share as at 31 March 2021. The large decrease
in the NAV was a result of the payment of total tax-free dividends
of 25.30 pence per share during the year. The total return before
taxation was £6.0 million compared to £7.3 million for the
previous year. The positive progress in several of our portfolio
companies is discussed later in this statement and in the
Strategic report on page 9.
In line with the variable dividend policy targeting around 5% of
NAV per annum, the Company paid interim dividends totalling
3.30 pence per share during the year ended 31 March 2022 (31
March 2021: 4.24 pence per share). As a result of the successful
sale of the Company’s three care homes, which generated
substantial cash proceeds, the Company also paid special
dividends totalling 22.00 pence per share during the year ended
31 March 2022 (31 March 2021: nil).
The Board has declared a first dividend for the year ending
31 March 2023 of 1.33 pence per share to be paid on 29 July
2022 to shareholders on the register on 8 July 2022.
Investment performance and progress
During the year, the Company completed the sale of Credit
Kudos generating proceeds of £3.0 million and a return on cost
of 5.2 times. The Company also sold Phrasee generating
proceeds of £1.7 million and a return on cost of 3.2 times. These
are both excellent results for the Company.
The results for the year showed net valuation gains on
investments of £6.6 million. The key contributors were the uplifts
on Cantab Research (T/A Speechmatics) and Elliptic Enterprises,
both of which have been revalued after further externally led
funding rounds. Phrasee and Credit Kudos also contributed to the
valuation gain, due to their sales which completed during the
year. However, our investments in Concirrus and Avora have seen
write-downs following difficult trading conditions, in part because
of the Covid-19 pandemic. We have also written-off our
investment in Xperiome which went into administration.
The three largest investments in the Company’s portfolio, being
Chonais River Hydro, Cantab Research (T/A Speechmatics) and
Elliptic Enterprises, are valued at £9.8 million and represent 15
per cent. of the Company’s NAV.
The Company has been an active investor during the year
investing a total of £7.8 million. Of this, £3.2 million was invested
into six new portfolio companies, all of which are expected to
require further investment as the companies prove themselves
and grow:
• £0.9 million into NuvoAir Holdings a provider of digital
therapeutics and decentralised clinical trials for respiratory
conditions;
• £0.8 million into Gravitee TopCo (trading as Gravitee.io) an
application programming interface (API) management
platform;
• £0.6 million into Brytlyt which uses patented software and
artificial intelligence (AI), combined with the superior
computation power of graphics processing units (GPUs), to
derive insights thousands of times faster than legacy
systems;
• £0.5 million into PerchPeek, a digital relocation platform;
• £0.3 million into Accelex Technology, a data extraction and
analytics technology for private capital markets; and
6
Albion Venture Capital Trust PLC
‘
Achieved a positive
total return in total
shareholder value
of 5.55 pence per
share, a 7.6%
shareholder
return
’
263764 Albion Capital pp01-pp08.qxp 29/06/2022 15:44 Page 7
Chairman’s statement continued
• £0.1 million into Regulatory Genome
Development, a provider of machine
readable structured regulatory content.
adverse events arising out of the increasingly
volatile geopolitical backdrop remain a major
risk factor.
A detailed analysis of the other risks and
uncertainties facing the business is shown in
the Strategic report on pages 9 to 18.
Sunset Clause
In 2015 a VCT “sunset clause” was introduced
as a requirement of a EU state aid notification.
This provides that income tax relief will no
longer be given to subscriptions made on or
after 6 April 2025, unless the legislation is
amended to make the scheme permanent or
the “sunset clause” is extended. Our Manager,
Albion Capital, is working, alongside the VCT
industry, to demonstrate to Government the
importance of VCTs as a source of early-stage
capital to support entrepreneurs creating
innovative growth businesses employing
thousands of people throughout the UK. Given
its importance, the Board expects that the VCT
scheme will continue to attract Government
support.
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
the
Company’s
maintenance of sufficient cash resources for
investment in new and existing portfolio
companies and the continued payment of
dividends to shareholders.
interest. This
includes
A further £4.6 million was invested into
existing portfolio companies, the largest being:
£1.3 million into Seldon Technologies; £0.7
million into TransFICC; £0.7 million into Elliptic;
and £0.7 million into Speechmatics. Software
and other technology now accounts for 39%
of our portfolio (excluding cash), an increase of
6% from 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 to 26.
Board Composition
the
After serving as a Director since
Company’s launch in 1996, and subsequently
as Audit Committee Chairman, John Kerr will
be retiring from the Board at the AGM on 6
September 2022. We have valued his
contributions and wish him well in the future.
Ann Berresford will succeed him as Audit
Committee Chairman.
Following a formal selection process, Neeta
Patel CBE will be appointed as a non-executive
Director with effect from 1 July 2022. Neeta
will be bringing over 35 years of experience in
the technology sector to the Board and is
currently a non-executive director of Allianz
Technology Trust, CEO of the Centre for
Entrepreneurs, a board advisor for Tech London
Advocates and an entrepreneur mentor-in-
residence at London Business School.
Principal and emerging risks
In addition to the risks around Covid-19, which
have been a major factor for the past 2 years,
the UK is experiencing its highest level of
inflation in decades, as well as the uncertainty
over the future course, and global impact, of
Russia’s invasion of Ukraine. Our investment
portfolio, while concentrated mainly in the
technology and healthcare sectors, remains
diversified in terms of both sub-sector and
stage of maturity and, importantly, we believe
it to be appropriately valued. While we would
expect these valuations to be robust within the
tolerance of normal market fluctuations, the
potential but, unknown, scale of any further
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. ‘
The Company has
been an active
investor during the
year investing a
total of £7.8
million
’
Albion Venture Capital Trust PLC
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263764 Albion Capital pp01-pp08.qxp 29/06/2022 15:44 Page 8
Chairman’s statement continued
Albion VCTs Prospectus Top Up Offers
Your Board, in conjunction with the boards of
the other five VCTs managed by Albion Capital,
launched a prospectus top up offer of new
Ordinary shares on 6 January 2022. The Board
announced on 16 February 2022 that,
following strong demand, the Company had
reached its £10 million limit under the Offer
and was fully subscribed and closed to further
applications.
The proceeds are being used to provide
support to our existing portfolio companies
and to enable us to take advantage of new
investment opportunities. The first allotment
of the shares under the Offer was on 25
February 2022 and the second allotment was
on 13 April 2022. Further details can be found
in notes 15 and 19 respectively.
Annual General Meeting (“AGM”)
Based on the success of last year’s live webcast
AGM, the Board has decided to adopt a virtual
format for the AGM again this year. The AGM
will be held at noon on 6 September 2022 via
the Lumi platform. Information on how to
participate in the live webcast can be found on
the Manager’s website www.albion.capital/vct-
hub/agms-events.
shareholders can email their questions to
AAVCchair@albion.capital prior
the
Meeting.
to
Shareholders' views are important, and the
Board encourages shareholders to vote on the
resolutions.
Further details on the format and business to
be conducted at the AGM can be found in the
Directors’ report on pages 36 and 37 and in
the Notice of the Meeting on pages 72 to 75.
longer-term
Outlook and prospects
The positive results for the year just ended
demonstrate the resilience of our portfolio
during what were challenging times. I am
confident that our portfolio companies are well
positioned to grow, despite the uncertainty
around the
impact of the
pandemic, the current cost of living in the UK
and across the world, and an increasingly
volatile geopolitical and economic backdrop.
The Board believes the Company is well placed
to continue to deliver long term value to our
shareholders, though remains mindful of the
considerable uncertainty over the Global
economy.
The Board welcomes questions
from
shareholders at the AGM and shareholders will
be able to ask questions using the Lumi
platform during the AGM. Alternatively,
Richard Glover
Chairman
29 June 2022
‘
The Company
completed the sale
of Credit Kudos
generating
proceeds of £3.0
million and Phrasee
generating
proceeds of £1.7
million
’
‘
The results for the
year showed net
valuation gains on
investments of £6.6
million
’
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Albion Venture Capital Trust PLC
263764 Albion Capital pp09-pp24.qxp 29/06/2022 15:46 Page 9
Strategic report
Investment policy
The Company will invest in a broad portfolio of smaller, unquoted growth businesses across a variety of sectors including higher risk
technology companies. Investments may take the form of equity or a mixture of equity and loans.
Allocation of funds will be determined by the investment opportunities which become available but efforts will be made to ensure that
the portfolio is diversified both in terms of sector and stage of maturity of company. Funds held pending investment or for liquidity
purposes will be held as cash on deposit.
The full investment policy can be found on page 3.
Current portfolio analysis
The following pie charts show the split of the portfolio valuation as at 31 March 2022 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, portfolio 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 and net assets)
Software & other
technology
23% (13%)
Cash and
net assets
41% (61%)
Software & other
technology
39% (33%)
Business services
and other
4% (2%)
Renewable energy
16% (14%)
Healthcare
(including digital
healthcare)
18% (15%)
Education
9% (11%)
Education
5% (4%)
Healthcare (including
digital healthcare)
11% (6%)
Business services
and other
7% (6%)
Renewable energy
27% (35%)
Portfolio analysis by stage of investment
Portfolio analysis by number of employees
Scale up (revenue
over £5 million)
48% (26%)
Early stage (revenue less
than £1 million)
15% (26%)
Renewable
energy*
27% (35%)
Under 20
7% (9%)
21 - 50
23% (23%)
Growth (revenue between
£1 million and £5 million)
37% (48%)
101+
24% (11%)
51 - 100
19% (22%)
*Renewable energy companies have no employees
Comparatives for 31 March 2021 are shown in brackets
Albion Venture Capital Trust PLC
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263764 Albion Capital pp09-pp24.qxp 29/06/2022 15:46 Page 10
Strategic report continued
investments
Direction of portfolio
The cash balance has decreased mainly due to the two special
dividends totalling £22 million that were paid out to shareholders
into higher growth technology
and further
companies during the year. The percentage of cash remains high
at the year end, however this is largely a result of the allotment
of £9 million of shares under the Top Up Offers in February 2022,
as well as an additional £5 million from the disposals of Credit
Kudos and Phrasee which both completed in March 2022. The
shift away from asset-based companies continues, and the
Company will continue to invest these funds into higher growth
including digital healthcare. The
technology companies,
Manager has a significant speciality in software and other
technology investing, which can be seen as a growing part of the
portfolio, represented by a 10% increase this year. Healthcare
technology is another area of particular strength, which has
increased by 5%.
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 2022
Net revenue return for the year
ended 31 March 2022
Total return for the year
ended 31 March 2022
First interim and first special dividend
of 16.83 pence per share paid on
30 July 2021
Second special dividend of 7.00 pence
per share paid on 31 December 2021
Second interim dividend of 1.47 pence
per share paid on 31 January 2022
Unclaimed dividends returned
to the Company
Transferred from reserves
Net assets as at 31 March 2022
Net asset value as at 31 March 2022
(pence per share)
5,554
407
5,961
(16,728)
(7,141)
(1,523)
10
(19,421)
63,937
53.38
The Company paid dividends totalling 25.30 pence per share
during the year ended 31 March 2022 (2021: 4.24 pence per
share). This included two special dividends of 15.00 pence per
share and 7.00 pence per share paid to shareholders on 30 July
10
Albion Venture Capital Trust PLC
2021 and 31 December 2021, respectively. The Board has
declared a first dividend for the year ending 31 March 2023, of
1.33 pence per share to be paid on 29 July 2022 to shareholders
on the register on 8 July 2022.
As shown in the Company’s Income statement on page 54, the
total return for the year was 5.77 pence per share (2021: 7.10
pence per share). The total investment income decreased to
£1,037,000 (2021: £2,467,000), which was primarily due to the
care homes sale in March 2021. 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. The revenue return to
equity holders has subsequently decreased to £407,000 (2021:
£1,468,000).
The capital return on investments for the year of £6,553,000
(2021: £6,508,000), has been discussed in the Chairman’s
statement on pages 6 and 7. The net asset value of the
Company has decreased to 53.38 pence per share (2021: 73.13
pence per share), which was primarily due to the two special
dividends totalling 22.00 pence per share paid to shareholders
during the year. Whilst this reduced the Company’s assets, it
provided a significant return to shareholders and more detail on
these special dividends can be found in the Annual Report and
Financial Statements for the year ended 31 March 2021 and the
Half-yearly Financial report to 30 September 2021.
There was a net cash outflow for the Company of £18,894,000
for the year (2021: net inflow of £21,782,000), resulting from
the payment of two special and interim dividends, the
investment in fixed asset investments, operating activities and
the buy-back of shares, offset by the issue of shares under the
Albion VCTs Top Up Offers 2021/2022 and the disposal of fixed
asset investments.
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 to 8. The
total return before tax for the year was £6.0 million (2021:
£7.3 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 we expect our investment
income to continually 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.
263764 Albion Capital pp09-pp24.qxp 29/06/2022 15:46 Page 11
Strategic report continued
Future prospects
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.
Key performance indicators (“KPIs”) and Alternative Performance Measures (“APMs”)
The Directors believe that the following KPIs (some of which are 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*
e
r
a
h
s
r
e
p
e
c
n
e
P
250
200
150
100
50
0
242.7
233.8
229.9
237.2
225.8
220.2
211.8
206.4
205.0 204.7
190.1 191.4
195.3
197.9 199.0 201.1
191.3
183.7
171.9
159.2
148.5
136.8
127.8
118.4
110.2
99.9
95.0
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
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
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
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
2
* Total shareholder value is net asset value plus cumulative dividends paid since launch to 31 March 2022.
Total shareholder value increased by 5.55 pence to 242.72 pence per share for the year ended 31 March 2022.
Net asset value
Cumulative dividend
3. Movement in 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.
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
1.4% 2.8% 7.4% 7.5% 11.8% 7.4% 10.5% (4.9)% 10.3% 7.6%
† Methodology: Calculated as the movement in total shareholder value for the year divided by the opening net asset value.
The table above shows that total shareholder value has continued to increase over the last 10 years, with an average return of 6.2%
per annum.
Albion Venture Capital Trust PLC
11
263764 Albion Capital pp09-pp24.qxp 29/06/2022 15:46 Page 12
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
189.3
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
18.8
11.0
5.0
e
r
a
h
s
r
e
p
e
c
n
e
P
200
175
150
125
100
75
50
25
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
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
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
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
2
Cumulative dividend
Dividends paid in the period
Dividends paid in respect of the year ended 31 March 2022 were 25.30 pence per share (2021: 4.24 pence per share). This included
the payment of two special dividends amounting to 22.00 pence per share (2021: nil). Cumulative dividends paid since inception
amount to 189.34 pence per Ordinary share.
5. Ongoing charges
The ongoing charges ratio for the year ended 31 March 2022
was 2.44% (2021: 2.37%). 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 to approximately 2.50% due to the
reduction in the net asset value of the Company after the
payment of the significant special dividends. The cap on the
ongoing charges ratio is 2.50%.
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 34.
12
Albion Venture Capital Trust PLC
The relevant tests to measure compliance have been carried out
and independently reviewed for the year ended 31 March 2022.
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% 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 the Manager, Albion Capital Group LLP, which is
authorised and regulated by the Financial Conduct Authority.
The Manager also provides company secretarial and other
accounting and administrative support to the Company.
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Strategic report continued
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% of the net asset
value of the Company, and an annual secretarial and
administrative fee of £55,000 (2021: £54,000) 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.
In line with common practice, the Manager is also entitled to an
arrangement fee, payable by each new portfolio company, of
approximately 2% 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 2022 the cumulative shortfall of
the target return was 5.18 pence per share (31 March 2021:
shortfall of 2.72 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 the Manager. 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% qualifying holdings
investment requirement for VCT 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.
Alternative Investment Fund Managers Directive (“AIFMD”)
The Board appointed the Manager 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 key stakeholders, 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.
Albion Venture Capital Trust PLC
13
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Strategic report continued
Stakeholders Engagement with Stakeholders Outcome and decisions based on engagement
Shareholders
The key methods of engaging with
Shareholders are as follows:
• Annual General Meeting (“AGM”)
• Shareholder seminar
• Annual Report and
Financial
Statements, Half-yearly financial
report, and Interim management
statements
• RNS announcements for all key
decisions including the publication
of a Prospectus
• 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. In light of the Covid-19
pandemic, the Board took the decision to update the
Company’s Articles of Association to allow for
virtual/hybrid events in order for the 2022 AGM to be live
streamed for Shareholders. The Board was able to take
questions from Shareholders at the AGM enabling
maximum shareholder engagement in the absence of a
face-to-face event. Following last year’s success and the
overwhelming positive feedback from shareholders, the
Board has decided that this year’s AGM will again be held
as a virtual event to facilitate shareholder participation.
• Shareholders are also encouraged to attend the annual
Shareholders’ Seminar. Last year’s event took place on
12 November 2021. The seminar included Quantexa and
Healios 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
invites shareholders to attend this year’s event scheduled
for 23 November 2022 at the Royal College of Surgeons.
To reserve a place, email info@albion.capital.
• The Board recognises the importance to Shareholders of
maintaining a share buy-back policy, in order to provide
market liquidity, and considered this when establishing
the current policy. The Board closely monitors 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. The Board takes this into consideration
when making the decision to pay dividends to
Shareholders. The variable dividend policy has been
enacted, and has resulted in a dividend yield of 4.5% on
opening net asset value. In addition to the regular
dividend policy, a first special dividend of 15.00 pence per
share was paid on 30 July 2021 and a second special
dividend of 7.00 pence per share was paid on
31 December 2021. A total of 25.30 pence of dividends
were paid during the year, which was 34.6% of the
opening net asset value.
• During the year, the decision to publish a Prospectus was
taken, in order to raise more funds for deployment into
new and existing portfolio companies. The Board
carefully considered whether further funds were
required, whether the VCT tests would continue to be
met, and whether it would be in the interest of
Shareholders, before agreeing to publish the Prospectus.
On allotment, the decision was made to use an issue
price formula on the prevailing net asset value to ensure
there was no dilution to existing Shareholders.
14
Albion Venture Capital Trust PLC
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Strategic report continued
Stakeholders Engagement with Stakeholders Outcome and decisions based on engagement
Shareholders
(continued)
Suppliers
Manager
• 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.
• The Board decided to propose a special resolution at the 2021
AGM to increase the Company’s distributable reserves by way
of a reduction of share premium account and capital
redemption reserve. This resolution was approved with 99.5%
of Shareholders voting in favour of the resolution.
• 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, and was satisfied with their performance.
The key suppliers are:
• Corporate broker
• VCT taxation advisor
• Depositary
• Registrar
• Auditor
• Lawyer
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”) report on pages
19 to 21, 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 pages 39 and 40.
During the year, the Board has reviewed the current
Management Agreement, and a new agreement was signed
which updated the agreement for new regulatory requirements,
such as GDPR and AIFMD, but did not change any commercial
terms with the Manager.
• 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 9.
• 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 practices.
• The Manager ensures good dialogue with portfolio companies,
and often puts on events in order to help portfolio companies
benefit from the Albion network.
• Albion Capital has a Talent Platform which focuses on aligning
growth strategy with leadership team hiring, leadership
development, and organisational scaling in our portfolio
companies. By assessing their leadership potential, identifying
and strengthening portfolio company management teams, the
Talent platform helps early-stage businesses accelerate their
growth to scale into category defining businesses, which
ultimately benefits VCT investors.
• The Board receives reports on ESG factors within its portfolio from
the Manager as it is a signatory of the United Nations Principles for
Responsible Investment (“UN PRI”). Further details of this are set
out in the ESG report 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.
Albion Venture Capital Trust PLC
15
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Strategic report continued
Environmental, Social, and Governance (“ESG”) report
The Board and the Company’s Manager, Albion Capital Group
LLP, take ESG very seriously and more detail can be found on this
in the ESG report on pages 19 to 21.
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.
General Data Protection Regulation
The General Data Protection Regulation has the objective of
unifying data privacy requirements across the European Union.
GDPR forms part of the UK law after Brexit, now known as UK
GDPR. The Manager continues to take action to ensure that the
Manager and the Company are compliant with the regulation.
Further policies
The Company has adopted a number of further policies
relating to:
• Environment
• Global greenhouse gas emissions
• Anti-bribery
• Anti-facilitation of tax evasion
• Diversity
and these are set out in the Directors’ report on page 35.
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 risks have been the global pandemic
and the invasion of Ukraine which have impacted not only public
health and mobility but also had an adverse impact on the
economy, the full impact of which is likely to be uncertain for
some time.
The Board has carried out a robust assessment of the Company’s
principal risks and uncertainties and seeks to mitigate these risks
through regular reviews of performance and monitoring progress
and compliance. The Board applies the principles detailed in the
Financial Reporting Council’s Guidance on Risk Management,
Internal Control and Related Financial and Business Reporting, in
the mitigation and management of these risks. More information
on specific mitigation measures for the principal risks and
uncertainties are explained below:
Risk Possible consequence Risk assessment during the year Risk management
Increased (due to high levels of
inflation and the geopolitical risks
following the invasion of Ukraine).
The Board places reliance upon the skills and
expertise of the Manager and its track record of
making successful investments in higher growth
technology businesses. The Manager operates a
structured investment appraisal and due diligence
process. This includes a review from one external
investment professional and comments from non-
executive Directors of the Company on matters
discussed at the Investment Committee meetings.
Investments are monitored by the Manager, through
monthly portfolio updates and
typically an
investment manager sitting on portfolio company
boards. The Board receives detailed reports on each
investment and their valuation as part of their
quarterly board meetings.
Review and oversight by the non-executive Directors
ensures that the risk to the Company’s and
Manager’s reputation is kept to a minimum.
Investments are valued in accordance with the
International Private Equity and Venture Capital
Valuation Guidelines, which represent current best
practice for investment valuation and are reviewed
by the Manager’s Valuation Committee.
These procedures ensure that this increased risk
continues to be mitigated where possible.
Investment,
performance and
valuation risk
Investment in smaller unquoted
growth businesses carries a higher
degree of risk and is more volatile
than
long-
established businesses. This could
negatively
impact shareholder
returns.
investing
larger,
in
relies on
The Company
the
judgement and reputation of the
Manager
strong
investment returns and valuations
for shareholders.
to provide
Company’s
The
investment
valuation methodology is based on
fair value, which
for smaller
unquoted growth businesses can
be difficult to determine due to the
lack of observable market data and
the limitation of external reference
points.
16
Albion Venture Capital Trust PLC
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Strategic report continued
Risk Possible consequence Risk assessment during the year Risk management
VCT approval
and regulatory
change risk
No change.
Any breach of section 274 of the
Income Tax Act 2007, including
legislative changes, could
any
result in the loss of the Company’s
HMRC qualifying status and tax
reliefs for investors.
Regulatory and
compliance risk
Operational and
internal control
risk (including
cyber and data
security)
Economic and
political risk
the
Companies
The Company is listed on The
London Stock Exchange and is
required to comply with the rules of
the UK Listing Authority, as well as
with
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 IT systems and controls within
the Manager’s business could
place assets of the Company at
inaccurate
risk,
information being passed to the
Board or shareholders. This could
additionally result in losses for the
Company and its shareholders.
resulting
in
Events such as the Covid-19
pandemic, the impact of Brexit, an
economic recession, fluctuation in
inflation and
interest rates, or
significant political events could
adversely affect the companies
and
within
consequently the Company’s net
asset value.
portfolio
the
No change.
No change.
Increased (due to high levels of
inflation and the geopolitical risks
from the invasion of Ukraine).
The Company’s VCT qualifying status is monitored
monthly by the Manager and quarterly by the Board.
The Board has appointed Philip Hare & Associates
LLP as its taxation adviser, who independently
confirms compliance, highlights areas of risk and
informs on any legislative changes, including those
which may arise from the withdrawal from the
European Union.
The Board and the Manager receive regular updates
on new regulation, including legislation on the
management of the Company, 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. The Board ensures the
Company is compliant as part of its quarterly Board
meetings.
The Board reviews the quarterly reports prepared by
Ocorian Depositary (UK) Limited (the Company’s
Depositary) to ensure the Manager is adhering to the
AIFMD requirements.
The Company’s operations and IT systems are
subject to rigorous internal controls which are
reviewed on a regular basis and reported to the
Board.
The Audit Committee reviews the Internal Audit
Reports prepared by the Manager’s internal auditors,
Azets, and has access to their internal audit partner to
whom it can ask specific detailed questions in order to
satisfy itself that the Manager has strong systems and
controls in place including those in relation to risk
management, business continuity and cyber security.
The Board reviews the systems and processes
(including cyber and data security) in place for the
Company’s key suppliers to ensure that there is an
appropriate risk mitigation in place.
The Company invests in a diversified portfolio of c.38
companies, predominantly in the United Kingdom,
and has a policy of minimising any external bank
borrowings within portfolio companies.
Exogenous risks over which the Company has no
control are always a risk and the Company does what
it can to address these risks. The inherent long-term
nature of the portfolio helps to mitigate these
exogenous risks.
The Board and Manager are continuously assessing
the resilience of the portfolio as a result of the
ongoing economic and political risks, to ascertain
where support
is required. The Company has
sufficient cash resources to cope with any such
exigent and unexpected pressures. Exposure is
relatively small to at-risk sectors that include leisure,
hospitality, retail and travel (3% of NAV).
The Company’s investment policy and the Board’s
scrutiny of the investment portfolio ensures that this
increased risk continues to be mitigated where
possible.
Albion Venture Capital Trust PLC
17
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Strategic report continued
Risk Possible consequence Risk assessment during the year Risk management
Liquidity risk
No change.
The Company may not have
sufficient cash available to meet its
financial obligations.
is
The Company’s portfolio
primarily
in smaller unquoted
companies, which are inherently
illiquid as there
is no readily
available market, and thus it may
be difficult to realise their fair value
at short notice.
Environmental,
social and
governance
(“ESG”) risk
An insufficient ESG policy could lead
to an increased negative impact on
the environment,
including the
Company’s carbon footprint.
Non-compliance with
reporting
requirements could lead to a fall in
demand
investors,
from
reputational damage and penalties.
to
(due
Increased
the new
guidance issued on climate change
reporting
increased
and
importance to stakeholders).
The Board reviews the Company’s three year cash
flow forecasts on a quarterly basis. These include
potential investment realisations (which are closely
monitored by the Manager), Top Up Offers, dividend
payments and operational expenditure. This ensures
that there are sufficient cash resources available for
the Company’s liabilities as they fall due.
The Manager is a signatory of the UN PRI and the
Board is kept appraised of the evolving ESG policies
at quarterly Board meetings.
Full details of the specific procedures and risk
mitigation can be found in the ESG report on pages
19 to 21.
These procedures ensure that this increased risk
continues to be mitigated where possible.
Viability statement
In accordance with the FRC UK Corporate Governance Code
published in 2018 and provision 36 of the AIC Code of Corporate
Governance, the Directors have assessed the prospects of the
Company over three years to 31 March 2025. The Directors
believe that three years is a reasonable period in which they can
assess the ability of the Company to continue to operate and
meet its liabilities as they fall due. This is the period used by the
Board as part of its strategic planning process, which includes:
the estimated timelines for finding, assessing and completing
investments; the potential impact of any new regulations; and
the availability of cash.
The Board has carried out a robust assessment of the principal
and emerging risks facing the Company, including those that
could threaten its business model, future performance, solvency
or liquidity, and focused on the major factors which affect the
economic, regulatory and political environment. The Board
carefully assessed, and were satisfied with, the risk management
processes in place to avoid or reduce the impact of these risks.
The Board has carried out robust stress testing of cashflows
which included assessing the resilience of portfolio companies,
including the requirement for any future financial support, and
evaluating the impact of high inflation, both within the Company
and within its portfolio.
The Board has additionally considered the ability of the
Company to comply with the ongoing conditions to ensure it
maintains its VCT qualifying status under its current investment
policy. As a result of the Board’s quarterly valuation reviews, it
has concluded that the portfolio is well balanced and geared
towards delivering long term growth and strong returns to
shareholders.
The Board has 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 2025. The Board is mindful of the ongoing risks and
will continue to ensure that appropriate safeguards are in place,
in addition to monitoring the quarterly cashflow forecasts to
ensure the Company has sufficient liquidity.
This Strategic report of the Company for the year ended 31
March 2022 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
29 June 2022
18
Albion Venture Capital Trust PLC
263764 Albion Capital pp09-pp24.qxp 29/06/2022 15:46 Page 19
Environmental Social and Governance
(“ESG”) report
The Company’s Manager, Albion Capital Group LLP, takes the concept of sustainable and responsible investment 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.
The Manager is a signatory of the United Nations Principles for Responsible Investment (“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 Albion Capital Group LLP recognise that applying the following six Principles for Responsible Investment better aligns
investors with broader objectives of society:
Principle 1: to incorporate ESG issues into investment analysis and decision-making processes.
Principle 2: to be active owners and incorporate ESG issues into our ownership policies and practices.
Principle 3: to seek appropriate disclosure on ESG issues by the entities in which we invest.
Principle 4: to promote acceptance and implementation of the Principles within the investment industry.
Principle 5: to work together to enhance our effectiveness in implementing the Principles.
Principle 6: to report on our activities and progress towards implementing the Principles.
The Board and the 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 Company has focused on sustainable
and longer-term investment propositions, 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, the Manager is more intimately involved in the affairs of portfolio companies than might
be the case for funds invested in listed securities. As such, the Manager 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 Manager incorporates ESG considerations into its investment process. These form part of its process to create value for investors
and develop sustainable long-term strategies for portfolio companies. The Manager reports ESG criteria to the UN PRI when required
and to the Board quarterly. The Manager is a member of VentureESG steering committee, a global network of fund managers that
drives application of ESG principles for early stage technology investors and companies.
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. The Manager, where relevant, considers climate-specific issues in its investment policies and
activities.
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Environmental Social and Governance
(“ESG”) report continued
The Manager has long held the belief that returns are optimised by investing in sustainable businesses with positive societal and
environmental outcomes, which forms an important aspect of the investment process:
* The ESG BSC contains sustainability metrics against which a portfolio company is assessed in order to determine sustainability risks and opportunities, and track progress
over time. As the Company is a minority investor in early stage technology companies, the Manager has not set ESG Key Performance Indicators for its portfolio companies.
The Manager's role is to guide portfolio company leadership and share best practice methods across the venture capital industry.
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.
The Manager’s standard copy of the investment deal documents includes a sustainability clause that reinforces individual portfolio
company’s commitment to driving principles of ESG as it scales.
Investment stage
An ESG clause is integrated into the shareholders agreement for all new investments. The clause outlines the portfolio company’s
commitment to combine economic success with ecological and social success.
All new and existing portfolio companies are asked to report against an ESG BSC annually. The ESG BSC contains a number of
sustainability factors against which a portfolio company is assessed in order to determine the potential sustainability risks and
opportunities arising from the investment. The ESG BSCs form part of the Manager’s internal review meetings alongside discussions
around other risk factors, and any outstanding issues are addressed in collaboration with the portfolio companies’ senior
management.
Exit stage
The Manager aims to ensure that good ESG practices remain in place following exit. For example, by ensuring that the portfolio
company creates a self-sustaining ESG management system during our period of ownership, wherever feasible.
20
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Environmental Social and Governance
(“ESG”) report continued
The Manager’s ESG initiatives
The Manager incorporates ESG for its internal operations, a breakdown of its ESG considerations are as follows:
Environmental – The Manager is committed to ensuring that the environmental impacts of its business operations are positive
and as far as possible, any negative impact is mitigated.
Social – The Manager aims to conduct its business in a socially responsible manner, to contribute to the communities in which it
operates and to respect the needs of its employees and all of its stakeholders.
Governance – The Manager seeks to conduct all of its business activities in an honest, ethical and socially responsible manner and
these values underpin its business model and strategy.
Overview of the Manager's ESG activity in 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 has experience 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. After a period in audit, she moved into industry and spent over 20 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 had a number of non-executive roles, including positions at Bath Building Society, the Pensions Protection Fund, Triodos
Renewables plc, Hyperion Insurance Group and the Pensions Regulator. She is currently a non-executive director of Secure Trust
Bank plc.
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. He 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, he moved to Gartmore Investment Management in 2003 as head of
international equity investments before joining F&C in 2004. He is 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.
As part of the Board’s succession planning, John Kerr will retire as a Director at the Annual General Meeting on 6 September 2022,
Ann Berresford will take over as Audit Committee Chairman and Richard Wilson will take over as Chairman of the Remuneration
Committee. From 1 July 2022, Neeta Patel CBE will be appointed as a Director.
22
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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. Albion Capital Group LLP is a leading independent investment manager with a long term record of backing change and
growth. The wider Albion Group has funds of around £925m under management, expected commitment or administration.
The following are specifically responsible for the management and administration of the Venture Capital Trusts managed by
the Manager:
Will Fraser-Allen BA (Hons), FCA, is the managing partner of Albion Capital and chairs the investment committee. He is deputy
chairman of the VCT Association, chairing its Public Policy Committee and sits on the Venture Capital Committee of the BVCA. He
joined Albion in 2001, became deputy managing partner in 2009 and managing partner in 2019. He has over 20 years’ experience
investing in healthcare, leisure, media and technology enabled businesses. Prior to joining Albion, he qualified as a chartered
accountant and has a BA in History from Southampton University.
Patrick Reeve MA, FCA, was formerly the managing partner of Albion Capital and became chairman on 1 April 2019. He is a director
of Albion Development VCT, Albion Technology & General VCT and Albion Enterprise VCT. Patrick is on Albion’s Valuation Committee
and its Risk Management Committee. He is also a director of the Association of Investment Companies. He 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. He 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. He is head of healthcare investing and became deputy managing partner of
Albion Capital in 2019. He graduated with an MA plus Bachelors 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).
Lauren Apostolidis, takes responsibility for driving the growth and engagement of the Talent X platform. In this impactful brand
ambassadorial role, Lauren focuses on continuously expanding the value of AlbionVC networks to increase the success of our
companies. Previously, as Platform Lead for workspace accelerator, Huckletree, Lauren built and managed the support network of
ambassadors and investors to help connect founders across the workspaces to key individuals in the ecosystem. She built relevant
programming and connection opportunities for the start ups and also ran an in-house accelerator for underrepresented founders who
were looking to raise their Seed round. Prior to this, Lauren managed FinTech partnerships at Thomson Reuters (Refinitiv, now part of
LSEG).
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. He 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. He 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.
Dr. Molly Gilmartin BA, joined Albion Capital from McKinsey & Company where she focused on healthcare systems, services and
technologies. Prior to McKinsey, Molly was Chief Commercial Officer of Induction Healthcare Group which completed an IPO on AIM
in 2019 and provided digital tools for healthcare professionals and patients to deliver care more efficiently and effectively. Before
Induction, Molly was a founding team member of Pando, a messaging and workflow tool for doctors, and an NHS Clinical Entrepreneur
as a medical doctor. As part of the Albion investment team, Molly focuses on health technology investing with a focus on digital tools
and technologies that can drive better outcomes for patients through more efficient delivery of care and better clinical research.
Albion Venture Capital Trust PLC
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The Manager continued
Vikash Hansrani BA (Hons), FCA, is the operations partner of Albion Capital and oversees the finance and administration of all the
funds under Albion’s management. He qualified as a chartered accountant with RSM and latterly worked in its corporate finance team,
before joining Albion in 2010 and becoming a partner in 2017. Vikash is a member of Albion’s Valuation Committee and its Risk
Management Committee. He has a BA (Hons) in Accountancy & Finance from Nottingham Business School.
Ed Lascelles BA (Hons), heads up the technology investment team at Albion Capital, focusing on B2B software and disruptive tech
services. He joined Albion in 2004, having started his career advising public companies during the ‘dotcom’ boom, and became a
partner in 2009. He graduated from University College London with a first class honours degree in Philosophy.
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 5 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. He is an investment manager at Albion specialising in technology
investing. He has 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 gave her experience of implementing proven systems and running detailed
analysis. She is now an investment manager at Albion specialising in technology investing. She graduated from Harvard University,
majoring in Economics.
Jane Reddin BA (Hons), is a partner at Albion Capital. She helps the Albion VCTs invest in strong founders, by assessing leadership
potential, and accelerating the scaling of Albion’s portfolio companies. In her 25 year career, she 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 joining Albion, she
spent six years as Talent Adviser at Balderton Capital and then co-founded The Talent Stack, a talent management consulting
company for startups. She joined Albion in 2021 and became partner in 2022. She developed the talent platform at Albion which
enables the sharing of talent and leadership development expertise with Albion’s early-stage community. She graduated from Durham
University with a BA in French and German.
Dr. Christoph Ruedig MBA, practised radiology and strategy consulting before becoming an investor in healthcare. He joined Albion
Capital in 2011 and became a partner in 2014. 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 UK, where he was responsible for
mergers and acquisitions 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, her investing experience includes: AI/Data Platforms and Infrastructure, CX, Digital Networks and Hardware. She 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, is a partner at Albion Capital specialising in software investing. Robert joined Albion in 2005
and became a partner in 2009. Previously Robert worked in corporate finance for Credit Suisse, KPMG and ING Barings, after qualifying
as a chartered accountant.
Jay Wilson MBA, MMath, comes from an advisory background and is focused on partnering with management teams. He joined
Albion Capital in 2019 from Bain & Company, where he had been a consultant since 2016 and is an investment director at Albion
specialising in technology investing. Prior to this he graduated from 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. He is Head of Renewables 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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Portfolio of investments
As at 31 March 2022 As at 31 March 2021
% 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 1,304 4,378 3,074 1,197 4,271 107
Cantab Research Limited (T/A Speechmatics) 2.5 11.4 1,798 1,026 2,824 1,144 – 1,144 1,026
Elliptic Enterprises Limited 1.4 5.9 1,913 713 2,626 1,244 – 1,244 713
Radnor House School (TopCo) Limited 6.9 48.3 1,259 1,229 2,488 1,259 914 2,173 315
The Evewell Group Limited 5.2 33.0 1,272 1,154 2,426 863 803 1,666 350
Seldon Technologies Limited 4.6 14.0 2,212 – 2,212 902 – 902 –
Gharagain River Hydro Limited 11.5 50.0 1,363 521 1,884 1,363 431 1,794 90
TransFICC Limited 2.9 17.8 1,025 271 1,296 286 – 286 271
NuvoAir Holdings Inc 2.3 11.2 943 344 1,287 – – – 344
Beddlestead Limited 9.1 49.0 1,142 133 1,275 1,142 (336) 806 469
Threadneedle Software Holdings
Limited (T/A Solidatus) 2.1 11.5 1,262 – 1,262 1,262 – 1,262 –
The Street by Street Solar Programme
Limited 6.5 50.0 675 548 1,223 675 503 1,178 45
Gravitee TopCo Limited (T/A Gravitee.io) 3.7 18.4 813 223 1,036 – – – 223
Healios Limited 2.4 17.5 678 339 1,017 678 339 1,017 –
uMotif Limited 4.0 21.0 1,078 (76) 1,002 486 35 521 (111)
Alto Prodotto Wind Limited 7.4 50.0 509 373 882 551 359 910 28
MHS 1 Limited 14.8 48.8 1,026 (169) 857 1,026 (110) 916 (59)
Arecor Therapeutics PLC 0.7 5.5 249 507 756 249 107 356 400
The Voucher Market Limited (T/A WeGift) 1.8 10.0 735 – 735 735 – 735 –
Regenerco Renewable Energy Limited 4.5 50.0 451 279 730 451 275 726 4
Kew Green VCT (Stansted) Limited 45.2 50.0 1,234 (637) 597 1,234 (1,211) 23 574
Brytlyt Limited 3.4 14.8 577 – 577 – – – –
PerchPeek Limited 1.7 11.6 503 – 503 – – – –
Imandra Inc. 1.3 8.1 175 272 447 121 – 121 272
Dragon Hydro Limited 7.3 30.0 264 169 433 277 174 451 (4)
Erin Solar Limited 18.6 50.0 520 (100) 420 520 (72) 448 (28)
Limitless Technology Limited 1.8 11.0 471 (115) 356 471 47 518 (162)
uMedeor Limited (T/A uMed) 3.2 9.5 334 – 334 334 – 334 –
Accelex Technology Limited 3.6 16.5 324 – 324 – – – –
AVESI Limited 7.4 50.0 242 78 320 242 82 324 (4)
Harvest AD Limited – – 307 (2) 305 307 5 312 (7)
Concirrus Limited 1.9 9.7 975 (753) 222 975 – 975 (753)
Greenenerco Limited 3.9 50.0 102 72 174 110 71 181 5
Premier Leisure (Suffolk) Limited 9.9 47.4 175 (10) 165 175 (2) 173 (8)
Regulatory Genome Development Limited 1.0 4.9 146 – 146 – – – –
Symetrica Limited 0.3 5.0 83 (17) 66 83 (17) 66 –
Avora Limited 4.2 16.7 750 (733) 17 750 (467) 283 (266)
Forward Clinical Limited (T/A Pando) 1.2 9.2 149 (147) 2 149 (144) 5 (3)
Total fixed asset investments 30,808 6,796 37,604 23,138 2,983 26,121 3,831
*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 2021 do not agree to the Annual Report and Financial Statements for the year ended
31 March 2021 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/(loss)
carrying Disposal realised on opening
Realisations in the year ended Cost* value proceeds gain/(loss) value
31 March 2022 £’000 £’000 £’000 £’000 £’000
Disposals:
Credit Kudos Limited 584 584 3,025 2,441 2,441
Phrasee Limited 538 1,400 1,736 1,198 336
Loan stock repayments and other:
Alto Prodotto Wind Limited 43 57 57 14 –
Dragon Hydro Limited 13 13 13 – –
Greenenerco Limited 8 11 11 3 –
Escrow adjustments** – – 57 57 57
Xperiome Limited*** 345 288 – (345) (288)
Total 1,531 2,353 4,899 3,368 2,546
*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 and expenses which are incidental to the purchase or disposal of an
investment
***In administration
Total change in value of investments for the year 3,831
Movement in loan stock accrued interest (47)
Unrealised gains sub-total 3,784
Realised gains in current year 2,546
Finance income from the unwinding of discount on deferred consideration 223
Total gains on investments as per Income statement 6,553
26
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263764 Albion Capital pp25-pp32.qxp 29/06/2022 15:46 Page 27
Portfolio companies
Geographical locations
Portfolio of 38 companies
employing over 1,800 people
predominantly in the United
Kingdom.
8 renewable energy
companies generating
approximately 24GWh
per annum, capable of
powering 7,400 typical
households.
Software and other technology
Healthcare
(including digital healthcare)
Renewable energy
Business services and other
Education
Numbers indicate top 10
investments by value
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 2021
£’000
Investment information
Net liabilities
Basis of valuation:
(163)
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
4,378
9.2%
50.0%
2. 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 funds invested alongside existing
investors (IQ Capital and leading Cambridge angels)
to accelerate growth.
Website: www.speechmatics.com
Audited results: year to 31 December 2020 £’000 Investment information £’000
Turnover 6,409 Income recognised in the year –
LBIDTA (3,976) Total cost 1,798
Loss before tax (4,177) Valuation 2,824
Net assets 3,704 Voting rights 2.5%
Basis of valuation Cost and price of recent investment Voting rights for all Albion
(reviewed for impairment or uplift) managed companies 11.4%
28
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Portfolio companies continued
3. 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 2021
£’000
Investment information
Turnover
LBIDTA
Loss before tax
Net assets
Basis of valuation
4,359
(6,849)
(6,898)
7,686
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
–
1,913
2,626
1.4%
5.9%
4. Radnor House School (TopCo)
a
Limited
Radnor House
coeducational
operates
independent school near Sevenoaks, Kent. The
school is growing strongly with over 500 children on
the roll and further capacity to expand. Significant
further investment has been made into the school'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
in a supportive and nurturing
other skills
environment.
Website: www.radnorhouse.org
Audited results: year to 31 August 2021
Turnover
EBITDA
Loss before tax
Net assets
Basis of valuation
£’000
7,548
622
(850)
12,205
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
203
1,259
2,488
6.9%
48.3%
Albion Venture Capital Trust PLC
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Portfolio companies continued
5. The Evewell Group Limited
The Evewell owns and operates private pay
women’s health centres of excellence with one on
Harley Street and another one, which opened in
2022, in Hammersmith, both 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 2020
£’000
Investment information
Net liabilities
Basis of valuation:
(3,354)
Earnings multiple
Income recognised in the year
Total cost
Valuation
Voting rights
Voting rights for all Albion managed companies
Website: www.evewell.com
£’000
143
1,272
2,426
5.2%
33.0%
6. Seldon Technologies Limited
Seldon is a software company that enables
enterprises to deploy Machine Learning models in
production. Their open core platform allows data
scientists and ML engineers to serve, monitor and
explain their models - increasing efficiency by 93%
and improving ROI of AI initiatives in enterprise.
Tech is horizontal with customers in: Healthcare,
Financial Sector, Automotive, Tech companies,
Insurance, etc.
Filleted unaudited results: year to 31 March 2021
£’000
Investment information
Net assets
Basis of valuation:
7,911
Cost and price of recent investment
(reviewed for impairment or uplift)
Income recognised in the year
Total cost
Valuation
Voting rights
Voting rights for all Albion managed companies
Website: www.seldon.io
£’000
–
2,212
2,212
4.6%
14.0%
30
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Portfolio companies continued
7. 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 2021
£’000
Investment information
Net assets
Basis of valuation:
175
Third party valuation – discounted cash flow
Income recognised in the year
Total cost
Total valuation
Voting rights
Voting rights for all Albion managed companies
£’000
119
1,363
1,884
11.5%
50.0%
8. TransFICC Limited
TransFICC connects to fixed income trading venues
(codes to each of their raw APIs), normalises their
APIs and delivers all connections to the sellside and
buyside via one API. TransFICC thereby takes care
of the tech, connectivity and testing issues
associated with venue connectivity, abstracting
financial
away enormous
institutions. The long-term vision is for TransFICC
to become the core connectivity platform for e-
trading.
complexity
for
Filleted audited results: year to 31 December 2020
£’000
Investment information
Net assets
Basis of valuation:
6,662
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
–
1,025
1,296
2.9%
17.8%
Website: www.transficc.com
Albion Venture Capital Trust PLC
31
263764 Albion Capital pp25-pp32.qxp 29/06/2022 15:46 Page 32
Portfolio companies continued
9. NuvoAir Holdings Inc
NuvoAir provides a tech-enabled service platform
for chronic care management of respiratory
conditions such as asthma, COPD and cystic
fibrosis. Their platform is used by hospitals and
healthcare systems in the UK, Europe and US as
well as by global pharmaceutical companies in
clinical trials focused on respiratory disease areas.
Their vision is to become the leading platform for
remote management of respiratory conditions
globally.
Website: www.nuvoair.com
Audited results: year to 31 December 2021
£’000
Investment information
Turnover
LBITDA
Loss before tax
Net assets
Basis of valuation:
3,792
(2,373)
(2,084)
9,387
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
–
943
1,287
2.3%
11.2%
10. Beddlestead Limited
Beddlestead owns and operates Syrencot House, an
exclusive use wedding venue near Andover offering
spaces for the service, reception, banqueting,
catering and accommodation with a mature target
of 150 weddings per year. The venue opened in
2018 and following an intermittent period of trading
during Covid 19 is fully open and trading at mature
levels.
Filleted unaudited results: year to 31 December 2020
£’000
Investment information
Net assets
Basis of valuation:
1,263
Net assets
Income recognised in the year
Total cost
Valuation
Voting rights
Voting rights for all Albion managed companies
£’000
64
1,142
1,275
9.1%
49.0%
Website: www.syrencot.co.uk
32
Albion Venture Capital Trust PLC
263764 Albion Capital pp33-pp47.qxp 29/06/2022 15:47 Page 33
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 2022.
The Statement of corporate governance on pages 39 to 44 forms
a part of the Directors’ report.
BUSINESS REVIEW
Principal activity and status
The principal activity of the Company is that of a Venture Capital
Trust. It has been approved by H.M. Revenue & Customs
(“HMRC”) as a Venture Capital Trust in accordance with the
Income Tax Act 2007 and, in the opinion of the Directors, the
Company has conducted its affairs so as to enable it to continue
to obtain such approval. In order to maintain its status under
Venture Capital Trust legislation, a VCT must comply on a
continuing basis with the provisions of Section 274 of the
Income Tax Act 2007 and further details of this can be found on
page 34 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 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 24,297,674
Ordinary shares (2021: 1,759,986 Ordinary shares), of which
17,365,249 Ordinary shares (2021: 935,989 Ordinary shares)
were issued under the Albion VCTs Top Up Offers; and 6,932,425
Ordinary shares (2021: 823,997 Ordinary shares) were issued
under the Dividend Reinvestment Scheme.
Your Board, in conjunction with the boards of the other five VCTs
managed by Albion Capital Group LLP, launched a prospectus
top up offer of new Ordinary shares on 6 January 2022. The
Board announced on 16 February 2022 that, following strong
demand, the Company had reached its £10 million limit under
the Offer and was fully subscribed and closed to further
applications.
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 7 of the
Chairman’s statement and details of share buybacks during the
year can be found in note 15.
Substantial interests and shareholder profile
As at 31 March 2022 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 2022, and to the date of this Report.
Future developments of the business
Details on the future developments of the business can be found
on page 8 of the Chairman’s statement and on page 10 of the
Strategic report.
Results and dividends
Detailed information on the results and dividends for the year
ended 31 March 2022 can be found in the Strategic report on
page 10.
Going concern
In accordance with the Guidance on Risk Management, Internal
Control and Related Financial and Business Reporting issued by
the Financial Reporting Council (“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. 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.
Albion Venture Capital Trust PLC
33
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Directors’ report continued
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.
Post balance sheet events
Details of events that have occurred since 31 March 2022 are
shown in note 19.
Principal risks and uncertainties
A summary of the principal risks faced by the Company is set out
on pages 16 to 18 of the Strategic report.
VCT regulation
The investment policy is designed to ensure that the Company
continues to qualify and is approved as a VCT by HMRC. In order
to maintain its status under Venture Capital Trust legislation, a
VCT must comply on a continuing basis with the provisions of
Section 274 of the Income Tax Act 2007 as follows:
1. The Company’s income must be derived wholly or mainly
from shares and securities;
2. At least 80 per cent. of the HMRC value of its investments
must have been represented throughout the year by
shares or securities that are classified as ‘qualifying
holdings’;
3. At least 70 per cent. by HMRC value of its total qualifying
holdings must have been represented throughout the year
by holdings of ‘eligible shares’. Investments made before
6 April 2018 from funds raised before 6 April 2011 are
excluded from this requirement;
4. At least 30 per cent. of funds raised in accounting periods
beginning on or after 6 April 2018 must be invested in
qualifying holdings by the anniversary of the 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 per cent. by
HMRC value of its investments;
6. The Company must not have retained greater than 15 per
cent. of its income earned in the year from shares and
securities;
7. The Company’s shares, throughout the year, must have
been listed on a regulated market;
8. An investment in any company must not cause that
company to receive more than £5 million in State aid risk
34
Albion Venture Capital Trust PLC
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
received State aid risk finance in its first seven years, or the
company is entering a new market and a turnover test is
satisfied;
10. The Company’s investment in another company must not
be used to acquire another business, or shares in another
company; and
11. The Company may only make qualifying investments or
certain non-qualifying investments permitted by section
274 of the Income Tax Act 2007.
These tests drive a spread of investment risk through preventing
holdings of more than 15 per cent. by HMRC value in any
portfolio company. The tests have been carried out and
independently reviewed for the year ended 31 March 2022. 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 per cent. by HMRC value of the total of the shares and
securities that the Company holds in any one portfolio company.
‘Qualifying trade’ excludes, amongst other sectors, dealing in
property or shares and securities, insurance, banking and
agriculture. Details of the sectors in which the Company is
invested can be found in the pie chart on page 9.
A ‘knowledge intensive’ company is one which is carrying out
significant amounts of R&D from which the greater part of its
business will be derived, or where those R&D activities are being
carried out by staff with certain higher educational attainments.
Portfolio company gross assets must not exceed £15 million
immediately prior to the
investment and £16 million
immediately thereafter.
On 31 March 2022, the HMRC value of qualifying investments
(which includes a 12 month disregard for disposals) was 91.84%
(2021: 91.03%). 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
263764 Albion Capital pp33-pp47.qxp 29/06/2022 15:47 Page 35
Directors’ report continued
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
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”) report on pages
19 to 21.
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
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
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 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 46.
Albion Venture Capital Trust PLC
35
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Directors’ report continued
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
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, Ann
Berresford and Richard Wilson will offer themselves for re-
election. John Kerr will retire as a Director on 6 September 2022
and is not being put forward for re-election accordingly.
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 VCTs. Allocation of investments is on the basis of an
allocation agreement which is based, inter alia, on the ratio of
cash 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.
Cancellation of share premium and capital redemption
reserve
The Company obtained authority to cancel the amount standing
to the credit of its share premium and capital redemption
reserves at the Annual General Meeting on 7 September 2021.
The purpose of the proposal was to increase the distributable
reserves available to the Company for the payment of dividends,
the buy-back of shares, and for other corporate purposes.
The proposal received the consent of the Court on 10 December
2021, and the changes have been registered at Companies
House. Over time, this will create additional distributable reserves
of £43.1 million.
Annual General Meeting
The Company’s Annual General Meeting (“AGM”) will be held at
noon on 6 September 2022 via the Lumi platform. Information
on how to participate in the live webcast can be found on the
Manager’s website at www.albion.capital/vct-hub/agms-events.
The AGM will include a presentation from the Manager, the
answering of questions received from shareholders and the
formal business of the AGM, which includes voting on the
resolutions proposed by the Board by way of a poll. Registration
details for the webcast will be emailed to shareholders and will be
available at www.albion.capital/vct-hub/agms-events prior to
the AGM.
The Board welcomes questions from shareholders at the AGM
and shareholders will be able to ask questions using the Lumi
platform during the AGM. Alternatively, shareholders can email
their questions to AAVCchair@albion.capital prior to the AGM.
Shareholders will be able to vote during the AGM using the Lumi
platform. Shareholders are encouraged to complete and return
proxy cards in advance of the AGM but those participating in the
AGM will be able to cast their votes through the Lumi platform
once the Chairman declares the poll open.
The results of the poll held at the AGM will be announced
through a Regulatory Information Service and will be published
on the Company’s webpage on the Manager’s website at
www.albion.capital/funds/AAVC as
reasonably
practicable following the AGM.
soon as
Shareholders’ views are important, and the Board encourages
shareholders to vote on the resolutions. You can cast your vote by
using the proxy form enclosed with this Annual Report or
electronically at www.investorcentre.co.uk/eproxy. The Board has
carefully considered the business to be approved at the AGM and
recommends shareholders to vote in favour of all the resolutions
being proposed.
Full details of the business to be conducted at the AGM are given
in the Notice of the Meeting on pages 72 to 75.
The ordinary business resolutions 1 to 7 includes receiving and
adopting the Company’s accounts, to approve the Directors’
remuneration policy and report, to re-elect Richard Glover, Ann
Berresford and Richard Wilson as Directors, and to appoint BDO
as auditor for the next year end and to fix their remuneration.
36
Albion Venture Capital Trust PLC
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Directors’ report continued
£2,013,000. No Ordinary shares were purchased for treasury
during the year.
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
information and to establish that the
relevant audit
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
29 June 2022
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 8 to 10 replace the authorities given to the
Directors at the Annual General Meeting in 2021. 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 8 will request the authority to allot
up to an aggregate nominal amount of £277,049 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 12.5 per cent. of the total Ordinary
share capital in issue as at 31 March 2022.
Disapplication of pre-emption rights
Special resolution number 9 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 £277,049 of the nominal value of the
share capital representing approximately 20 per cent. of the
issued Ordinary share capital of the Company as at the date of
this report.
Purchase of own shares
Special resolution number 10 will request the authority to
purchase a maximum of 20,764,805 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 10.
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
3,919,566 Ordinary shares for cancellation representing 2.9 per
cent. of called up share capital, at an aggregate consideration of
Albion Venture Capital Trust PLC
37
263764 Albion Capital pp33-pp47.qxp 29/06/2022 15:47 Page 38
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
29 June 2022
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.
38
Albion Venture Capital Trust PLC
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Statement of corporate governance
Background
The Financial Conduct Authority requires all companies listed on
a regulated market to disclose how they have applied the
principles and complied with the provisions of the UK Corporate
Governance Code (the “Code”) issued by the Financial Reporting
Council (“FRC”) in 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 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 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.
The AIC Code requires that all Directors submit themselves for re-
election annually, therefore in accordance with the AIC Code,
Richard Glover, Ann Berresford and Richard Wilson will offer
themselves for re-election at the forthcoming Annual General
Meeting. John Kerr will retire as a Director on 6 September 2022.
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 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 42.
The Board met four times during the year as part of its regular
programme of Board meetings, with all Directors attending each
meeting. A sub-committee of the Board comprising at least two
Directors met during the year to allot shares issued under the
Dividend Reinvestment Scheme and the Albion VCTs Top Up
Offers. A sub-committee of the Board also met to approve the
terms and contents of the Offer Documents under the Albion
VCTs’ Prospectus Top Up Offers 2021/22. There is regular contact
between individual members of the Board. Representatives of
the Manager attend Board meetings and participate in Board
discussions, other than on matters where there might be a
perceived conflict of interest between the Manager and the
Company.
The Chairman ensures that all Directors receive, in a timely
manner, all relevant management, regulatory and financial
information. The Board receives and considers reports regularly
from the Manager and other key advisers, and ad hoc reports and
information are supplied to the Board as required. The Board has
a formal schedule of matters reserved for it and the agreement
between the Company and its Manager sets out the matters over
which the Manager has authority and limits beyond which Board
approval must be sought.
The Manager has authority over the management of the
investment portfolio, the organisation of custodial services,
accounting, secretarial and administrative services. The main
issues reserved for the Board include:
• the appointment, evaluation, remuneration and removal of
the Manager;
Albion Venture Capital Trust PLC
39
263764 Albion Capital pp33-pp47.qxp 29/06/2022 15:47 Page 40
Statement of corporate governance
continued
• 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;
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.
• 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.
Given the size, nature and complexity of the Company, the Board
considers
to establish a Management
Engagement Committee.
it unnecessary
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.
40
Albion Venture Capital Trust PLC
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, 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. As
John Kerr is retiring from the Board on 6 September 2022, he is
not being put forward for re-election. 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. From
6 September 2022, Richard Wilson will take over as Chairman of
the Remuneration Committee. Given the size of the Board and
the complexity of the business, all Directors are members of this
committee as their background, skills and experience are relevant
for the Committee's responsibilities. The Committee meets once
a year and held one formal meeting during the year which was
attended by all the members of the Committee.
The terms of reference for the Remuneration Committee can be
found on the Company’s webpage on the Manager’s website at
www.albion.capital/funds/AAVC
“Corporate
Governance” section.
under
the
Audit Committee
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.
John Kerr will retire as a Director at the Annual General Meeting
on 6 September 2022 and Ann Berresford will take over as Audit
Committee Chairman. 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
263764 Albion Capital pp33-pp47.qxp 29/06/2022 15:47 Page 41
Statement of corporate governance
continued
the year ended 31 March 2022, which were fully attended by all
the members of the Committee.
The Independent Auditor, BDO LLP, attended the Audit
Committee meeting at which the Annual Report and Financial
Statements for the year ended 31 March 2022 were discussed.
BDO LLP also met with the Audit Committee prior to the meeting
without the presence of the Manager.
Written terms of reference have been constituted for the Audit
Committee and can be found on the Company’s webpage on the
Manager’s website at www.albion.capital/funds/AAVC under the
“Corporate Governance” section.
During the year under review, the Committee discharged its
responsibilities including:
• formally reviewing the Annual Report and Financial
Statements 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
including the reasonableness of
Financial Statements
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
investment
internal controls and external review when
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.
Albion Venture Capital Trust PLC
41
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Statement of corporate governance
continued
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.
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.
Relationship with the External Auditor
The Audit Committee reviews the performance and continued
suitability of the Company’s external Auditor on an annual basis.
They assess the external Auditor’s independence, qualification,
extent of relevant experience, effectiveness of audit procedures
as well as the robustness of their quality assurance procedures. In
advance of each audit, the Committee obtains confirmation
from the external Auditor that they are independent and of the
level of non-audit fees earned by them and their affiliates. No
non-audit services were provided during the financial year ended
31 March 2022.
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
2022, 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 15 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
second 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.
The Audit Committee also has an annual meeting with the
external Auditor, without the Manager present, at which
42
Albion Venture Capital Trust PLC
Based on the assurance obtained, the Audit Committee
recommended to the Board a resolution to re-appoint BDO LLP
as Auditor at the forthcoming Annual General Meeting.
Nomination Committee
The Nomination Committee consists of all Directors, with Richard
Glover as Chairman. All Directors sit on the Nomination
Committee as their balance of skills and knowledge are relevant
to the Committee’s responsibilities. The terms of reference of the
Nomination Committee are to evaluate the balance of skills,
experience and time commitment of the current Board members
and make recommendations to the Board as and when a
particular appointment arises.
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.
After the year end, the Nomination Committee met to discuss
the appointment of a new Director. The Nomination Committee
identify
carried out a formal and extensive process to
appropriately qualified people, and following a detailed
interviewing and
the Nomination
referencing process,
Committee recommended the appointment of Neeta Patel CBE
as a new Director from 1 July 2022.
The Nomination Committee held one formal meeting during the
year, which was fully attended by all the members of the
Committee.
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
263764 Albion Capital pp33-pp47.qxp 29/06/2022 15:47 Page 43
Statement of corporate governance
continued
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.
it has access to Azets, which, as internal auditor for Albion Capital
Group LLP from 2021, undertakes periodic examination of the
business processes and controls environment at Albion Capital
Group LLP, and ensures that any recommendations to implement
improvements in controls are carried out. During the year, the
Audit Committee and the Board reviewed internal audit reports
prepared by the Manager’s previous internal auditor, PKF
Littlejohn LLP. The Board will continue to monitor its system of
internal control in order to provide assurance that it operates as
intended.
The Board, assisted by the Audit Committee, monitors all
controls,
including financial, operational and compliance
controls, and risk management. The Audit Committee receives
each year from the Manager a formal report, which details the
steps taken to monitor the areas of risk, including those that are
not directly the responsibility of the Manager, and which reports
the details of any known internal control failures. Steps continue
to be taken to embed the system of internal control and risk
management into the operations and culture of the Company
and its key suppliers, and to deal with areas of improvement
which come to the Manager’s and the Audit Committee’s
attention.
The Board, through the Audit Committee, has performed a
specific assessment for the purpose of this Annual Report. 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:
• 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 Valuations
Committee and reviews of financial reports are carried out by
the operations partner of Albion Capital Group LLP;
• bank reconciliations are carried out monthly by the Manager;
• all published financial reports are reviewed by the Manager’s
compliance department;
• the Board reviews financial information; and
• a separate Audit Committee of the Company reviews
financial information (including valuations) to be published.
As the Board has delegated the investment management and
administration to Albion Capital Group LLP, the Board feels that
it is not necessary to have its own internal audit function. Instead,
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.
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 page 33 of the Directors’ report. The Company
is not party to any significant agreements that may take effect,
alter or terminate upon a change of control of the Company
following a takeover bid.
Any amendments to the Company’s Articles of Association are
by way of a special resolution subject to ratification by
shareholders.
Relationships with shareholders
The Company’s Annual General Meeting is on 6 September
2022. The Annual General Meeting typically
includes a
presentation from the Manager on the portfolio and on the
Company, as well as answering questions that shareholders may
have. The AGM will be held virtually.
Shareholders are also invited to attend the annual Shareholders’
Seminar. Representatives of the Board usually attend the
seminar. The Board considers this an important interactive event
and invites shareholders to attend this year’s event scheduled for
23 November 2022 at the Royal College of Surgeons. To reserve
a place, email info@albion.capital.
Albion Venture Capital Trust PLC
43
263764 Albion Capital pp33-pp47.qxp 29/06/2022 15:47 Page 44
Statement of corporate governance
continued
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 7.
Statement of compliance
The Directors consider that the Company has complied
throughout the year ended 31 March 2022 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
29 June 2022
44
Albion Venture Capital Trust PLC
263764 Albion Capital pp33-pp47.qxp 29/06/2022 15:47 Page 45
Directors’ remuneration report
by the Company’s Articles of Association, changes to which are
made by ordinary resolution.
The AIC Code requires that all Directors submit themselves for re-
election annually, therefore in accordance with the AIC Code,
Richard Glover, Ann Berresford and Richard Wilson will offer
themselves for re-election at the forthcoming Annual General
Meeting. John Kerr will retire as a Director on 6 September 2022
and is not being put forward for re-election accordingly.
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 is managed by Albion Capital Group LLP and has no
employees. The Board consists solely of non-executive Directors,
who are considered key management personnel.
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, 98.9% of shareholders voted for
the resolution approving the Directors’ remuneration report,
1.1% of shareholders voted against the resolution and of the
total votes cast, 197,157 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 6 September 2022 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. From 6 September 2022, Richard
Wilson will take over as Chairman of the Remuneration
Committee.
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 were last
increased for the Chairman in 2019, and for all other Directors in
2015, should be increased to remain competitive and reflective
of the workload and responsibilities required from the Directors.
The Committee agreed to raise the fee for the Chairman to
£27,500 from £27,000, the Chairman of the Audit Committee to
£25,500 from £24,000 and all other Directors to £23,500 from
£22,000. The change in remuneration will take place from 1 April
2022 and is in line with the remuneration policy detailed below.
Directors’ remuneration policy
The Company’s policy is that fees payable to non-executive
Directors should reflect their expertise, responsibilities and time
spent on Company matters. In determining the level of non-
executive remuneration, market equivalents are considered in
comparison to the overall activities and size of the Company.
There is no performance related pay criteria applicable to non-
executive Directors.
The current maximum
level of non-executive Directors’
remuneration is £150,000 per annum in aggregate which is fixed
Albion Venture Capital Trust PLC
45
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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:
Year ended
31 March
2020
£’000
Year ended Year ended
31 March 31 March
2021 2022
£’000 £’000
Percentage Percentage
change 2020 change 2021
to 2021 to 2022
% %
Richard Glover 26
27 27
3.8 –
John Kerr 24
24 24
– –
Ann Berresford 22
22 22
– –
Richard Wilson (appointed 1 May 2020) –
20 22
n/a 10.0
Jeff Warren (passed away 6 January 2020) 18
– –
n/a –
Ebbe Dinesen (retired 1 August 2019) 7
– –
n/a –
97
93 95
4.2 2.2
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 prior year.
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 2023 is expected to be approximately £100,000.
In addition to Directors’ remuneration, the Company pays an annual premium in respect of Directors’ & Officers’ Liability Insurance
of £23,965 (2021: £19,023). 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
31 March 2022 31 March 2021
(Number (Number
of shares) of shares)
88,681 50,441
34,656 29,876
15,765 10,389
25,000 25,000
164,102 115,706
There have been no changes in the holdings of the Directors between 31 March 2022 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 1,324,035 shares in the Company as at 31 March 2022.
46
Albion Venture Capital Trust PLC
263764 Albion Capital pp33-pp47.qxp 29/06/2022 15:47 Page 47
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 2012. 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)
250
200
150
100
50
)
e
r
a
h
s
r
e
p
e
c
n
e
p
(
n
r
u
t
e
R
0
Mar
2012
Mar
2013
Mar
2014
Mar
2015
Mar
2016
Mar
2017
Mar
2018
Mar
2019
Mar
2020
Mar
2021
Mar
2022
Ordinary share price total return
FTSE All-Share Index total return
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
31 March
2022
£’000
25,382
2,013
95
31 March
2021 Percentage
£’000 change
4,263 495%
2,043 (1.5)%
93 (2.2)%
*The current year includes special dividends of 22.00 pence per share, totalling £22,050,000.
For and on behalf of the Board
Richard Glover
Director
29 June 2022
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:
• give a true and fair view of the state of the Company’s affairs
as at 31 March 2022 and of its profit for the year then ended;
• have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice;
• have been prepared in accordance with the requirements of
the Companies Act 2006.
We have audited the financial statements of Albion Venture
Capital Trust PLC (the ‘Company’) for the year ended 31 March
2022 which comprise the income statement, the balance sheet,
the statement of changes in equity, the statement of cashflows
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 on 31 March 2008 to audit
the financial statements for the year ending 31 March 2008 and
subsequent financial periods. The period of total uninterrupted
engagement including retenders and reappointments is 15
years, covering the years ending 31 March 2008 to 31 March
2022. 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 responsibilities in accordance with these
requirements. The non-audit services prohibited by that standard
were not provided to the Company.
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 check that the
Company was meeting its requirements to retain VCT status;
• Consideration of the Company’s expected future compliance
with VCT legislation, the absence of bank debt, contingencies
and commitments and any market or reputational risks;
48
Albion Venture Capital Trust PLC
• Reviewing the forecasted cash flows that support the
Directors’ assessment of going concern, challenging
assumptions and judgements made in the forecasts, and
assessing them for reasonableness. In particular, we
considered the available cash resources relative to the
forecast expenditure which was assessed against the prior
year for reasonableness;
• Considering the impact of market volatility and uncertainty,
including as a result of the impact of Russian aggression in
Ukraine;
• Calculating financial ratios to ascertain the financial health of
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
2022 2021
Key audit Valuation of Unquoted 4 4
matters Investments
Materiality Company financial statements as a whole
£1.1m (2021:£1.18m) based on 2% (2021: 2%)
of net assets adjusted to exclude for fundraising
during the year
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. This
matter was 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 this matter.
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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 unquoted
investments (Notes 2 and 11 to
the financial statements)
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.
For our sample of loans held at fair value 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.
For 98% of the investment portfolio, we performed the following:
• Considered whether the valuation methodology is the most appropriate in the
circumstances under the International Private Equity and Venture Capital Valuation
(“IPEV”) Guidelines. Where there has been a change in valuation methodology from prior
year, we assessed whether the change was appropriate.
• Considered the change in market multiples and discount applied from prior year and if
these were supported by the performance of the underlying investment.
• Ensured that the valuation was based on recent financial information and reviewed the
arithmetic accuracy of the valuation.
Further, 54% of the unquoted portfolio is based on valuations using net assets, cost (where
the investment was recently acquired), the price of a recent investment, bid price or an offer
to acquire the investee company.
For such investments, we checked the cost, 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 2022. This is particularly pertinent in those
circumstances where the impact of COVID-19, rising inflation, the war in Ukraine and the
resulting impact may call into question whether the price of recent investment remains
reflective of fair value.
The remaining 46% of the investment portfolio is valued with reference to more subjective
techniques with 35% supported by a valuation performed by experts (27% DCF and 8%
Earnings Multiple). The remaining 11% of the portfolio is valued using multiples of revenue
/earnings or Bid price, as described in note 11 of the financial statements.
For such investments that were included in our detailed sample, we:
• Re-performed the calculation of the investment valuation
• Verified and benchmarked key inputs and estimates to independent information from our
own research and against metrics from the most recent investments
• Challenged 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
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
• 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, we performed sensitivity analysis on the valuation calculations where
there is sufficient evidence to suggest reasonable alternative inputs might exist
Key observations
Based on the procedures performed we consider the investment valuations to be appropriate
considering the level of estimation uncertainty.
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
2022 2021
Materiality £1,100,000 £1,180,000
Basis for determining materiality 2% of net assets adjusted to exclude 2% of gross investments
for fundraising during the year
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.
This was changed from the prior year benchmark of gross investment value to align to
a standardised benchmark across the investment company sector. The benchmark
used is lower than the net asset value to take into account cash that has been recently
raised.
Performance materiality £825,000 £890,000
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.
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Independent Auditor’s report to the Members of
Albion Venture Capital Trust PLC continued
Lower testing threshold
We determined that for Revenue return before tax, a
misstatement of
less than materiality for the financial
statements as a whole, 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. As a
result, we determined a lower testing threshold for those items
impacting revenue return of £80,000 (2021: £85,000) based on
5% of expenditure (2021: 5%).
Other Code provisions
• Directors' statement on fair, balanced and understandable;
• 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
Reporting threshold
We agreed with the Audit Committee that we would report to
them all individual audit differences in excess of £55,000 (2021:
£23,000). 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 and financial statements 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 is materially 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.
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
Code 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 identified; and
• The Directors’ explanation as to their assessment of the
Company’s prospects, the period this assessment covers and
why the period is appropriate.
• The section describing the work of the audit committee.
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, or returns
adequate for our audit have not been received from branches
not visited by us; or
• the 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.
Albion Venture Capital Trust PLC
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Independent Auditor’s report to the Members of
Albion Venture Capital Trust PLC continued
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
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
the Directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
financial statements.
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”) and updated in February
2018 with consequential amendments and the applicable
financial reporting framework. We also considered the
Company’s qualification as a VCT under UK tax legislation.
Our procedures included:
• obtaining an understanding of the control environment in
monitoring compliance with laws and regulations;
• agreement of the financial statement disclosures to
underlying supporting documentation;
52
Albion Venture Capital Trust PLC
• enquiries of management and those charged with
governance relating to the existence of any non-compliance
with laws and regulations including fraud occurring within the
Company and its operations; and
• obtaining the VCT compliance
reports prepared by
management’s expert during the year and as at year end and
reviewing their calculations to check that the Company was
meeting its requirements to retain VCT status; and
• Reviewing minutes of board meetings and
legal
correspondence and invoices throughout the period for
instances of non-compliance with laws and regulations and
fraud.
We assessed the susceptibility of the financial statement to
material misstatement including fraud and considered the fraud
risk areas to be the valuation of unquoted investments and
management override of controls.
Our tests included, but were not limited to:
• The procedures set out in the Key Audit Matters section
above;
• Obtaining independent evidence to support the ownership of
investments;
• Recalculating investment management fees in total;
• Obtaining independent confirmation of bank balances; and
• Testing journals which met a defined risk criteria by agreeing
to supporting documentation and evaluating whether there
was evidence of bias by the Investment Manager and
Directors that represented a risk of material misstatement due
to fraud.
We also communicated relevant identified laws and regulations
and potential fraud risks to all engagement team members and
remained alert to any indications of fraud or non-compliance
with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of
material misstatement in the financial statements, 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. There
are inherent limitations in the audit procedures performed 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 are to become aware of it.
A further description of our responsibilities is available on the
at:
Financial
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
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Independent Auditor’s report to the Members of
Albion Venture Capital Trust PLC continued
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
29 June 2022
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
Albion Venture Capital Trust PLC
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Income statement
Revenue Capital Total Revenue Capital Total
Note £’000 £’000 £’000 £’000 £’000 £’000
Year ended 31 March 2022
Year ended 31 March 2021
Gains on investments 3 – 6,553 6,553 – 6,508 6,508
Investment income 4 1,037 – 1,037 2,467 – 2,467
Investment Manager’s fees* 5 (122) (1,097) (1,219) (337) (1,010) (1,347)
Other expenses 6 (411) – (411) (363) – (363)
Profit on ordinary activities before tax 504 5,456 5,960 1,767 5,498 7,265
Tax (charge)/credit on ordinary activities 8 (97) 98 1 (299) 192 (107)
Profit and total comprehensive income
attributable to shareholders 407 5,554 5,961 1,468 5,690 7,158
Basic and diluted return per
share (pence)** 10 0.39 5.38 5.77 1.46 5.64 7.10
* For more information on the allocation between revenue and capital please see the accounting policies on page 59.
** Adjusted for treasury shares
The accompanying notes on pages 58 to 71 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.
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Balance sheet
31 March 2022 31 March 2021
Note £’000 £’000
Fixed asset investments 11 37,604 28,355
Current assets
Trade and other receivables 13 1,926 1,561
Cash and cash equivalents 24,668 43,562
26,594 45,123
Total assets 64,198 73,478
Payables: amounts falling due within one year
Trade and other payables 14 (261) (790)
Total assets less current liabilities 63,937 72,688
Equity attributable to equity holders
Called-up share capital 15 1,369 1,165
Share premium 10,047 40,668
Capital redemption reserve 22 7
Unrealised capital reserve 6,550 3,588
Realised capital reserve 7,693 21,829
Other distributable reserve 38,256 5,431
Total equity shareholders’ funds 63,937 72,688
Basic and diluted net asset value per share (pence)* 16 53.38 73.13
* Excluding treasury shares
The accompanying notes on pages 58 to 71 form an integral part of these Financial Statements.
These Financial Statements were approved by the Board of Directors and authorised for issue on 29 June 2022, and were signed on
its behalf by:
Richard Glover
Chairman
Company number: 03142609
Albion Venture Capital Trust PLC
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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 2021 1,165 40,668 7 3,588 21,829 5,431 72,688
Return and total comprehensive
income for the year – – – 3,784 1,770 407 5,961
Transfer of previously unrealised gains
on realisations of investments – – – (822) 822 – –
Purchase of shares for cancellation (39) – 39 – – (2,013) (2,013)
Issue of equity 243 12,694 – – – – 12,937
Cost of issue of equity – (254) – – – – (254)
Reduction of share premium and
capital redemption reserve – (43,061) (24) – – 43,085 –
Net dividends paid (note 9) – – – – (16,728) (8,654) (25,382)
At 31 March 2022 1,369 10,047 22 6,550 7,693 38,256 63,937
At 1 April 2020 1,148 39,477 7 13,178 6,549 10,269 70,628
Return 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
* Included within these reserves is an amount of £26,804,000 (2021: £27,260,000) which is considered distributable. Over the next four years an
additional £17,585,000 will become distributable. This is due to the HMRC requirement that the Company cannot use capital raised in the past three
years to make a payment or distribution to shareholders. On 1 April 2022, £567,000 became distributable in line with this.
The accompanying notes on pages 58 to 71 form an integral part of these Financial Statements.
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Statement of cash flows
Year ended Year ended
31 March 2022 31 March 2021
£’000 £’000
Cash flow from operating activities
Loan stock income received 978 2,985
Deposit interest received 4 14
Dividend income received 7 24
Investment Manager’s fees paid (1,434) (1,337)
Other cash payments (389) (378)
UK Corporation tax paid (42) (204)
Net cash flow from operating activities (876) 1,104
Cash flow from investing activities
Purchase of fixed asset investments (7,771) (5,040)
Disposal of fixed asset investments 4,649 30,620
Net cash flow from investing activities (3,122) 25,580
Cash flow from financing activities
Issue of share capital 8,941 668
Cost of issue of equity (35) (17)
Dividends paid* (21,589) (3,714)
Purchase of own shares (including costs) (2,213) (1,841)
Net cash flow from financing activities (14,896) (4,904)
(Decrease)/increase in cash and cash equivalents (18,894) 21,780
Cash and cash equivalents at start of the year 43,562 21,782
Cash and cash equivalents at end of the year 24,668 43,562
*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.
The accompanying notes on pages 58 to 71 form an integral part of these Financial Statements.
Albion Venture Capital Trust PLC
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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 pages 33 and 34.
requires
The preparation of the Financial Statements
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 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, discounted
cash flows 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.
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Notes to the Financial Statements continued
Accounting policies (continued)
2.
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:
• 90% of management fees and 100% of performance
incentive fees, if any, are allocated to the realised capital
reserve. This has changed from 75% for both management
fees and performance incentive fees in the year ended 31
March 2021, to better align with the Board’s expectation that
over the long term the majority of the Company’s investment
returns will be in the form of capital gains; and
• expenses which are incidental to the purchase or disposal of
an investment are charged through the realised capital
reserve.
Taxation
Taxation is applied on a current basis in accordance with FRS
102. Current tax is tax payable (refundable) in respect of the
taxable profit (tax loss) for the current period or past reporting
periods using the tax rates and laws that have been enacted or
substantively enacted at the financial reporting date. Taxation
associated with capital expenses is applied in accordance with
the SORP.
Deferred tax is provided in full on all timing differences at the
reporting date. Timing differences are differences between
taxable profits and total comprehensive income as stated in the
financial statements that arise from the inclusion of income and
expenses in tax assessments in periods different from those in
which they are recognised in the financial statements. As a VCT
the Company has an exemption from tax on capital gains. The
Company intends to continue meeting the conditions required to
obtain approval as a VCT in the foreseeable future. The Company
therefore, should have no material deferred tax timing
differences arising in respect of the revaluation or disposal of
investments and the Company has not provided for any deferred
tax.
Reserves
Called-up share capital
This accounts for the nominal value of the Company’s shares.
Share premium
This accounts for the difference between the price paid for shares
and the nominal value of the shares, less issue costs and transfers
on cancellation of share premium once consent of the court is
given.
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, less any transfers on cancellation of
share premium once consent of the court is given.
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, or permanent diminutions in value (including
gains recognised on the realisation of investment where
consideration is deferred that are not distributable as a matter
of law);
• finance income in respect of the unwinding of the discount on
deferred consideration that is not distributable as a matter of
law;
• expenses, together with the related taxation effect, charged
in accordance with the above policies; and
• dividends paid to equity holders where paid out by capital.
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, transfers from the share premium and capital
redemption reserve, and other non-capital realised movements.
Albion Venture Capital Trust PLC
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Notes to the Financial Statements continued
Accounting policies (continued)
2.
Going concern
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. 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.
Dividends
Dividends by the Company are accounted for when the liability to make the payment (record date) has been established.
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.
Gains on investments
3.
Year ended Year ended
31 March 2022 31 March 2021
£’000 £’000
Unrealised gains on fixed asset investments 3,784 1,831
Realised gains on fixed asset investments 2,546 4,626
Finance income from deferred consideration 223 51
6,553 6,508
Investment income
4.
Year ended Year ended
31 March 2022 31 March 2021
£’000 £’000
Loan stock interest 1,026 2,432
Dividend income 7 24
Bank interest 4 11
1,037 2,467
Investment Manager’s fees
5.
Year ended Year ended
31 March 2022 31 March 2021
£’000 £’000
Investment management fee charged to revenue 122 337
Investment management fee charged to capital 1,097 1,010
1,219 1,347
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 page 13.
During the year, services of a total value of £1,274,000 (2021: £1,401,000), were purchased by the Company from Albion Capital
Group LLP; this includes £1,219,000 (2021: £1,347,000) of investment management fee and £55,000 (2021: £54,000) 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 £144,000 (2021: £359,000).
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Notes to the Financial Statements continued
Investment Manager’s fees (continued)
5.
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 2022, fees of £155,000 attributable to the investments of the Company were received by Albion
Capital Group LLP pursuant to these arrangements (2021: £193,000).
Albion Capital Group LLP, its partners and staff hold a total of 1,324,035 shares in the Company as at 31 March 2022.
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.
Other expenses
6.
Year ended Year ended
31 March 2022 31 March 2021
£’000 £’000
Directors’ fees (including NIC) 103 101
Auditor’s remuneration for statutory audit services (excluding VAT) 39 37
Secretarial and administration fee 55 54
Other administrative expenses 214 171
411 363
Directors’ fees
7.
The amounts paid to and on behalf of Directors during the year are as follows:
Year ended Year ended
31 March 2022 31 March 2021
£’000 £’000
Directors’ fees 95 93
National insurance 8 8
103 101
The Company’s key management personnel are the Directors. Further information regarding Directors’ remuneration can be found in
the Directors’ remuneration report on page 46.
Tax charge/(credit) on ordinary activities
8.
Year ended 31 March 2022 Year ended 31 March 2021
Revenue Capital Total Revenue Capital
£’000 £’000 £’000 £’000 £’000
UK corporation tax in respect of current year 98 (98) – 332 (192)
UK corporation tax in respect of prior year (1) – (1) (33) –
97 (98) (1) 299 (192)
Total
£’000
140
(33)
107
Albion Venture Capital Trust PLC
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Notes to the Financial Statements continued
Tax (charge)/credit on ordinary activities (continued)
8.
Year ended Year ended
31 March 2022 31 March 2021
Reconciliation of profit on ordinary activities to taxation charge £’000 £’000
Return on ordinary activities before taxation 5,960 7,265
Tax charge on profit at the standard rate of 19% (2021: 19%) 1,132 1,380
Factors affecting the charge:
Non-taxable gains (1,245) (1,236)
Income not taxable (1) (4)
Consortium relief in respect of prior years – (33)
Prior year refund 1 –
Excess management expenses carried forward 112 –
(1) 107
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.
(2021: 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) The Company has excess management expenses of £582,000 (2021: £nil) that are available for offset against future profits. A deferred tax asset of £146,000
(2021: £nil) has not been recognised in respect of these losses as they will be recoverable only to the extent that the Company has sufficient future taxable profits.
Dividends
9.
Year ended Year ended
31 March 2022 31 March 2021
£’000 £’000
First interim and first special dividend of 16.83p per share paid on 30 July 2021
(31 July 2020: First interim dividend of 2.50p per share) 16,728 2,541
Second special dividend of 7.00p per share paid on 31 December 2021 7,141 –
Second interim dividend of 1.47p per share paid on 31 January 2022
(29 January 2021: Second interim dividend of 1.74p per share) 1,523 1,745
Unclaimed dividends (10) (23)
25,382 4,263
In addition to the dividends summarised above, the Board has declared a first dividend for the year ending 31 March 2023 of 1.33
pence per share to be paid on 29 July 2022 to shareholders on the register on 8 July 2022. The total dividend will be approximately
£1,614,000.
During the year, unclaimed dividends older than twelve years of £10,000 (2021: £23,000) were returned to the Company in
accordance with the terms of the Articles of Association and have been accounted for on an accruals basis.
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Notes to the Financial Statements continued
10. Basic and diluted return per share
Year ended 31 March 2022 Year ended 31 March 2021
Revenue Capital Total Revenue Capital
Return attributable to equity shares (£’000) 407 5,554 5,961 1,468 5,690
Weighted average shares in issue
(adjusted for treasury shares) 103,265,706 100,836,952
Return attributable per equity share (pence) 0.39 5.38 5.77 1.46 5.64
Total
7,158
7.10
The weighted average number of shares is calculated after adjusting for treasury shares of 17,153,431 (2021: 17,153,431).
There are no convertible instruments, derivatives or contingent share agreements in issue so basic and diluted return per share are the
same.
Fixed asset investments
11.
31 March 2022 31 March 2021
Investments held at fair value through profit or loss £’000 £’000
Unquoted equity 24,388 17,563
Unquoted loan stock 12,460 10,792
Quoted equity 756 –
37,604 28,355
31 March 2022 31 March 2021
£’000 £’000
Opening valuation 28,355 49,243
Purchases at cost 7,771 5,040
Disposal proceeds (4,899) (31,883)
Realised gains 2,546 4,677
Movement in loan stock accrued income 47 (553)
Unrealised gains 3,784 1,831
Closing valuation 37,604 28,355
Movement in loan stock accrued income
Opening accumulated loan stock accrued income 199 752
Movement in loan stock accrued income 47 (553)
Closing accumulated loan stock accrued income 246 199
Movement in unrealised gains
Opening accumulated unrealised gains 3,588 13,178
Transfer of previously unrealised gains to realised reserve on realisations of investments (822) (11,421)
Unrealised gains 3,784 1,831
Closing accumulated unrealised gains 6,550 3,588
Historic cost basis
Opening book cost 24,568 35,313
Purchases at cost 7,771 5,040
Disposals at cost (1,531) (15,785)
Closing book cost 30,808 24,568
Purchases and disposals detailed above may not agree to purchases and disposals in the Statement of cash flows due to restructuring
of investments, conversion of convertible loan stock and settlement of receivables and payables.
Albion Venture Capital Trust PLC
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Notes to the Financial Statements continued
Fixed asset investments (continued)
11.
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.
Unquoted fixed asset investments are valued at fair value in accordance with the IPEV guidelines as follows:
31 March 2022 31 March 2021
Valuation methodology £’000 £’000
Cost and price of recent investment (reviewed for impairment or uplift) 16,678 11,408
Third party valuation – Discounted cash flow 10,026 9,835
Third party valuation – Earnings multiple 3,085 2,196
Net assets 3,038 1,850
Revenue multiple 1,595 1,400
Bid price 756 –
Earnings multiple 2,426 1,666
37,604 28,355
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 2021 and 31 March 2022:
Value as at
31 March 2022
Change in valuation methodology (2021 to 2022) £’000 Explanatory note
Cost and price of recent investment (reviewed for impairment or uplift) 1,595 Revenue multiple more relevant based on
to revenue multiple current trading
Cost and price of recent investment (reviewed for impairment or uplift) 1,292 More appropriate valuation methodology
to net assets
Cost and price of recent investment (reviewed for impairment or uplift) to bid price 756 IPO listing
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Notes to the Financial Statements continued
Fixed asset investments (continued)
11.
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 2022.
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 FRS 102 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.
Investments held at fair value through profit or loss (Level 3) had the following movements:
31 March 2022 31 March 2021
£’000 £’000
Opening valuation 28,355 49,243
Purchases at cost 7,771 5,040
Movement from Level 3 to Level 1* (356) –
Unrealised gains 3,384 1,831
Movement in loan stock accrued income 47 (553)
Realised net gains on disposal 2,546 4,677
Disposal proceeds (4,899) (31,883)
Closing valuation 36,848 28,355
* This relates to Arecor Therapeutics PLC, which listed on the AIM stock exchange during the period.
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. 79% of the portfolio of investments, consisting of equity and loan stock, is based on
recent investment price, net assets and cost, which is considered and as such the Board believes that changes to reasonable possible
alternative input assumptions (by adjusting the earnings and revenue multiples) for the valuation of the remainder of the portfolio
could lead to a significant change in the fair value of the portfolio. Therefore, for the remainder of the portfolio, the Board has adjusted
the inputs for a number of the largest portfolio companies (by value) resulting in a total coverage of 88% of the portfolio of
investments. The main inputs considered for each type of valuation is as follows:
Portfolio
fair value
NAV
company
Base Change of investments
(pence
Valuation technique sector Input
Case* in input (£’000)
per share)
Change in
Change in
Third party valuation – Discounted Renewable Discount rate 5.5% +0.5% 144
cashflow energy
-0.5% (131)
Third party valuation – Earnings multiple Education Earnings
multiple
22.5x 2.25x 186
-2.25x (186)
0.12
(0.11)
0.16
(0.16)
* As detailed in the accounting policies on page 58, 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 unquoted equity investments by £330,000
(1.4%) or a decrease in the valuation of unquoted equity investments by £317,000 (1.3%).
Albion Venture Capital Trust PLC
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Notes to the Financial Statements continued
Significant interests
12.
The principal activity of the Company is to select and hold a portfolio of investments in unquoted securities. Although the Company,
through the Manager, will, in some cases, be represented on the board of the portfolio company, it will not take a controlling interest
or become involved in the management of a portfolio company. The size and structure of the companies with unquoted securities may
result in certain holdings in the portfolio representing a participating interest without there being any partnership, joint venture or
management consortium agreement.
The Company has interests of greater than 20 per cent. of the nominal value of any class (some of which are non-voting) of the
allotted shares in the portfolio companies as at 31 March 2022 as described below.
Registered
Aggregate
address and Profit/(loss)
capital and % class
country of before tax
reserves Results for and
Company incorporation £’000
£’000 year ended share type
% total
voting
rights
Kew Green VCT (Stansted) Limited EC1M 5QL, UK n/a*
3,001 31 December 2020 45.2% Ordinary
45.2%
*The company files filleted accounts which do not disclose this information.
Trade and other receivables
13.
31 March 2022 31 March 2021
£’000 £’000
Other receivables 342 107
UK corporation tax receivable – 97
Prepayments 24 21
Deferred consideration over one year 1,560 1,336
1,926 1,561
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.
Trade and other payables
14.
31 March 2022 31 March 2021
£’000 £’000
Trade payables 27 219
UK Corporation tax payable – 140
Accruals and deferred income 234 431
261 790
The Directors consider that the carrying amount of payables is not materially different to their fair value.
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Notes to the Financial Statements continued
15. Called-up share capital
Allotted, called-up and fully paid £’000
116,549,525 Ordinary shares of 1 penny each at 31 March 2021 1,165
24,297,674 Ordinary shares of 1 penny each issued during the year 243
3,919,566 Ordinary shares of 1 penny each cancelled during the year (39)
136,927,633 Ordinary shares of 1 penny each at 31 March 2022 1,369
17,153,431 Ordinary shares of 1 penny each held in treasury at 31 March 2021 (172)
17,153,431 Ordinary shares of 1 penny each held in treasury at 31 March 2022 (172)
119,774,202 Ordinary shares of 1 penny each in circulation* at 31 March 2022 1,198
* Carrying one vote each
The Company purchased 3,919,566 Ordinary shares to be cancelled (2021: 3,069,400 to be held in treasury) at a cost of £2,013,000
(2021: £2,043,000) representing 2.9 per cent. (2021: 2.6 per cent.) of its issued share capital as at 31 March 2022. The shares
purchased for treasury in the prior year were funded from the other distributable reserve.
The Company holds a total of 17,153,431 shares (2021: 17,153,431) in treasury at a nominal value of £172,000, representing 12.5
per cent. of the issued Ordinary share capital as at 31 March 2022.
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 market
nominal price on
Number of value of shares Issue price Net invested allotment date
Date of allotment shares allotted £’000 (pence per share) £’000 (pence per share)
30 July 2021 4,358,920 44 56.30 2,437 53.50
31 December 2021 2,065,224 21 51.80 1,052 49.45
31 January 2022 508,281 5 50.33 254 47.40
6,932,425 69 3,743
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 2021/22:
Aggregate Net Opening market
nominal consideration price on
Number of value of shares Issue price received allotment date
Date of allotment shares allotted £’000 (pence per share) £’000 (pence per share)
25 February 2022 1,836,706 18 52.30 946 49.00
25 February 2022 760,552 8 52.50 391 49.00
25 February 2022 14,767,991 148 52.80 7,603 49.00
17,365,249 174 8,940
Albion Venture Capital Trust PLC
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Notes to the Financial Statements continued
16. Basic and diluted net asset value per share
31 March 2022 31 March 2021
Basic and diluted net asset value per share (pence) 53.38 73.13
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 119,774,202 Ordinary shares (2021: 99,396,094).
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 33 of the Directors’ report.
The Company’s financial instruments comprise equity and loan stock investments in quoted and 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.
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.
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 9.
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 £3,760,000. Further sensitivity analysis on fixed
asset investments is included in note 11.
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Notes to the Financial Statements continued
17. Capital and financial instruments risk management (continued)
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 9.
The maximum investment risk on the balance sheet date is the value of the fixed asset investment portfolio which is £37,604,000
(2021: £28,355,000). Fixed asset investments form 59 per cent. of the net asset value on 31 March 2022 (2021: 39 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 £341,000 (2021: £327,000). 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 7.3 per
cent. (2021: 11.9 per cent.). The weighted average period to maturity for the fixed rate assets is approximately 6.0 years (2021: 6.9
years).
The Company’s financial assets and liabilities, all denominated in Sterling, consist of the following:
31 March 2022 31 March 2021
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 – – 24,388 24,388 – – 17,563 17,563
Quoted equity – – 756 756 – – – –
Unquoted loan stock 11,922 233 305 12,460 10,233 247 312 10,792
Receivables * – – 1,902 1,902 – – 1,443 1,443
Payables* – – (261) (261) – – (650) (650)
Cash – 24,668 – 24,668 – 43,562 – 43,562
11,922 24,901 27,090 63,913 10,233 43,809 18,668 72,710
* 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.
Albion Venture Capital Trust PLC
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Notes to the Financial Statements continued
17. Capital and financial instruments risk management (continued)
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 78 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 2022 was limited to £12,460,000 of unquoted loan stock instruments (2021:
£10,792,000), £24,668,000 cash deposits with banks (2021: £43,562,000) and £1,926,000 of other receivables (2021: £1,561,000).
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, National Westminster Bank plc and Société Générale S.A. 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.
Liquidity risk
Liquid assets are held as cash on current account, on deposit or short term money market account. Under the terms of its Articles, the
Company has the ability to borrow up to 10 per cent. of its adjusted capital and reserves of the latest published audited Balance sheet,
which amounts to £6,232,000 as at 31 March 2022 (2021: £5,596,000).
The Company has no committed borrowing facilities as at 31 March 2022 (2021: £nil) and had cash balances of £24,668,000 (2021:
£43,562,000). 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 £261,000 as at 31 March 2022 (2021: £790,000).
The carrying value of loan stock investments as analysed by expected maturity dates is as follows:
31 March 2022 31 March 2021
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 1,741 469 857 3,067 864 486 916 2,266
1-2 years – – – – – 806 – 806
2-3 years 1,395 – 2 1,397 – – – –
3-5 years 2,422 – – 2,422 1,618 – 5 1,623
5+ years 5,154 420 – 5,574 5,649 448 – 6,097
Total 10,712 889 859 12,460 8,131 1,740 921 10,792
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 (2021: £1,045,000).
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Notes to the Financial Statements continued
17. Capital and financial instruments risk management (continued)
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 2022 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 2022 (2021: £nil).
There are no contingent liabilities or guarantees given by the Company as at 31 March 2022 (2021: £nil).
Post balance sheet events
19.
Since 31 March 2022 the Company has had the following material post balance sheet events:
• Investment of £711,000 in an existing portfolio company, Gravitee TopCo Limited (T/A Gravitee.io), an API management platform;
• Investment of £565,000 in a new portfolio company which provides insights and analytics to pharmaceutical companies about
therapeutic areas;
• Investment of £435,000 in an existing portfolio company, Cantab Research Limited (T/A Speechmatics), a provider of low footprint
automated speech recognition which can be deployed in the cloud, on premise or on device across over 31 languages; and
• Investment of £433,000 in a new portfolio company which is an autonomous debt resolution platform.
The following new Ordinary shares of nominal value 1 penny each were allotted under the Albion VCTs Prospectus Top Up Offers
2021/22 after 31 March 2022:
Aggregate Net Opening
nominal consideration market price on
Number of value of shares Issue price received allotment date
Date of allotment shares allotted £’000 (pence per share) £’000 (pence per share)
11 April 2022 446,260 4 52.30 230 48.60
11 April 2022 23,806 – 52.50 12 48.60
11 April 2022 1,126,685 11 52.80 580 48.60
1,596,751 16 822
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 46, there are no other related party transactions or balances requiring disclosure.
Albion Venture Capital Trust PLC
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Notice of Annual General Meeting
SHAREHOLDERS SHOULD TAKE NOTE THAT THIS WILL BE A VIRTUAL AGM AND FURTHER DETAILS WILL BE MADE
AVAILABLE AT WWW.ALBION.CAPITAL/VCT-HUB/AGMS-EVENTS.
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Albion Venture Capital Trust PLC (the “Company”) will be held
virtually at noon on 6 September 2022 at the registered office of the Company at 1 Benjamin Street, London, EC1M 5QL for the
purposes of considering and, if thought fit, passing the following resolutions, of which resolutions 1 to 8 will be proposed as ordinary
resolutions and resolutions 9 and 10 will be proposed as special resolutions.
Ordinary Business
1. To receive and adopt the Company’s accounts for the year ended 31 March 2022 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 2022.
3. To re-elect Richard Glover as a Director of the Company.
4. To re-elect Ann Berresford as a Director of the Company.
5. To re-elect Richard Wilson as a Director of the Company.
6. 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.
7. To authorise the Directors to agree the Auditor’s remuneration.
Authority to allot shares
Special Business
8.
The Directors be generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006 (the
“Act”) to allot Ordinary shares of nominal value 1 penny per share in the Company up to a maximum aggregate nominal
amount of £277,049 (representing approximately 20 per cent. of the issued share capital 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, the conclusion of the next
Annual General Meeting of the Company, but so that the Company may, before the 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 the authority had not expired.
Authority for the disapplication of pre-emption rights
9.
That, subject to the authority and conditional on the passing of resolution number 8 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 8 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
10. 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 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 18,193,506 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.
By Order of the Board
Albion Capital Group LLP
Company Secretary
Registered office
1 Benjamin Street,
London, EC1M 5QL
29 June 2022
Albion Venture Capital Trust PLC is registered in England and Wales with number 03142609
Albion Venture Capital Trust PLC
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Notice of Annual General Meeting continued
Notes
1. Members entitled to participate in, 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 6ZY; 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 participating in 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 2 September 2022.
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 2 September 2022 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 two business days 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 participate 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 2 September 2022 (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 participate 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 2 September 2022. 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
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Notice of Annual General Meeting continued
limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member
concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting
service provider, to procure that his or her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary
to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST
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 participating in 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 28 June 2022 being the latest practicable date prior to the publication of this Notice, the Company’s issued share capital
consists of 138,524,384 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 28 June 2022 are 121,370,953.
Albion Venture Capital Trust PLC
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Albion Venture Capital Trust PLC
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Statements for the year
ended 31 March 2022
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