Athelney Trust Plc
Annual Report 2002

Plain-text annual report

Company Registered Number: 2933559 ATHELNEY TRUST PLC ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2002 ATHELNEY TRUST PLC CONTENTS Chairman's Statement Investment and Portfolio Analysis Report of the Directors Report of the Auditors Statement of Total Return Balance Sheet Cash Flow Statement Notes to the Financial Statements Officers and Financial Advisors Notice of Annual General Meeting Page 1 - 3 4 - 5 6 - 7 8 9 10 11 12 - 19 20 21 ATHELNEY TRUST PLC 1 2 Queen Anne's Gate Buildings, Dartmouth Street, LONDON, SW1H 9BP Telephone: 020 7222 8989 Fax: 020 7222 8998 CHAIRMAN'S STATEMENT I enclose the results for the twelve months to 31 December 2002. The key points are as follows: • Audited Net Asset Value ("NAV") is 83.2p per share (31 December 2001 : 95.9p), a fall of 13.2 per cent. • Gross Revenue down by 30.2 per cent to £60,328 (31 December 2001: £86,424). • On a like for like basis revenue was actually up by 5.8 per cent and dividend income rose by 13.3 per cent. • Revenue return per ordinary share was 1.3p, a decrease of 53.6 per cent ( 31 December 2001: 2.8p). • Recommended dividend for the year 1.7p per share (2001: 1.7p). The Market When discussing one of the worst years for stock market performance in living memory, it is difficult to find optimistic, positive things to say, beyond the fact that prospects for 2003 and especially 2004 look considerably more intriguing. As far as 2002 is concerned, however, the main market indices fell by about 25% and the AIM index (at 31 December 2002, Athelney held as much as 23% of its portfolio in AIM-traded shares) declined by over 30%. In these circumstances, it was always going to be difficult to show a good absolute performance, even though the relative performance looks to be acceptable. The current unease in markets is due to the twin factors of political uncertainty and increasing worries about the economic outlook both at home and abroad. Last year's corporate scandals in the U.S. have not helped either with plenty of examples of financial chicanery, accounting irregularities and business failures to spook the market. At home, the continued fall in the FTSE 100 index brought into question the financial health of the life assurance companies, although it is encouraging to note that over-zealous regulators are now apparently happy to make the rules of financial adequacy more flexible. Above all, the year 2002 was dominated by a huge number of profit warnings, thus illustrating the typical problem of static or declining sales and remorselessly rising costs. In the second half of 2002, there were a total of 192 profit warnings of which 86 occurred in the third quarter and 106 in the fourth. A typical profit warning was accompanied by a fall in the relative share price of 25-40 per cent. Some companies have even managed a second and third profit warning in 2002. You do not need me to tell you how the threat of terrorist activity has badly affected the business and social life of the country recently. In particular, the leisure and tourist industries suffered greatly from the aftermath of the 11th September attacks and there has been (and there may be again) a huge spike in the price of crude oil as we move towards a final decision on the Iraq question. ATHELNEY TRUST PLC CHAIRMAN'S STATEMENT (CONTINUED) 2 The Market (continued) Looking overseas, the global economy is in a mess. The U.S. is hooked on credit, Japan and Germany are facing deflation and recession and China is happily exporting deflation via impossibly low-priced manufactured goods. In the U.K., New Labour has metamorphosed into Old Labour with a tax and spend policy just as unrealistic as all those of previous Labour Chancellors. And as a final comment, fifty-six small quoted companies went bust last year - the highest level for a number of years. Results Against the above background, the Board is not displeased with the 13.2% fall in NAV to 83.2p, after full allowance has been made for Capital Gains Tax liabilities in the event that the entire portfolio of investments were sold. On the face of it, Gross Revenue fell by 30.2% to £60,328 compared with £86,424 in 2001. However, we actually received a large exceptional dividend from William Nash, a former holding, in 2001 so that, in fact, Gross Revenue (i.e. dividend income plus bank interest) rose by 5.8% on a like for like basis and dividend income actually increased by a highly satisfactory 13.3%. Dividend Even though Return per Ordinary Share was just 1.3p for the year 2002, the Board has decided to recommend an unchanged dividend of 1.7p. The balance will be taken from Revenue reserve which stood at £28,033 as at 31 December 2001 and £21,492 (assuming the proposed dividend is, in fact, paid) at the equivalent date in 2002. The main reason for recommending an unchanged dividend is the Board's confidence in the ability of the companies in the Athelney portfolio to generate higher dividends in the future. The following statistics for 2002 make interesting reading: Companies paying dividends Companies sold (therefore no true comparison) Companies purchased (therefore no true comparison) Increased total dividend in the calendar year Reduced total dividend in the calendar year No change in dividend Number 74 11 14 32 7 10 The Board expects a similarly positive outcome for 2003 and, in the absence of unforeseen circumstances, expects to pay a similar dividend for 2003. Portfolio Review Sadly Mettoni succumbed to harsh economic conditions and its shares are consequently worthless. SFI shares were suspended and, again, it is highly unlikely that anything will be recovered for shareholders; in its case, however, there is an apparent discrepancy of £20 million in the accounts which must be explained to SFI's shareholders. ATHELNEY TRUST PLC CHAIRMAN'S STATEMENT (CONTINUED) 3 Portfolio Review (continued) In a typically busy year, the following shares were sold or top-sliced: Ann Street Group, Compel Group, Enterprise Inns, Folkes Group, Gowrings, Simon Group, Wyevale Garden Centres, together with Comprop and Enterprise from the list of AIM-traded shares. The following were purchased for the first time or an existing holding was increased: Flying Brands , Merrydown , Reed Health Group , SCS from the AIM market Fountains , Pennant Upholstery , Severfield-Rowen , Watermark Group ; International and Wynnstay Group from OFEX. Update The unaudited NAV as at 28 February 2003 was 79.4p per share. The Board is also proposing to amend the Articles of Association by means of a special resolution to allow the company to continue as an investment company after 2005. The effect of this is to remove the requirement to seek a shareholders' resolution in that and every subsequent five years. Outlook The Board believes that there is every chance of a significant rally starting in 2003 to be extended into the following year. Shares are much cheaper than a year ago. Profit expectations have been scaled back, so the number of profit warnings is likely to diminish as the year progresses, finances are being improved at the expense of ambitious expansion plans and, above all, the Board expects a resumption of corporate activity later this year. In short, the Board believes that recovery prospects for smaller companies in general, and for Athelney in particular, are excellent. Hugo Deschampsneufs Chairman 7 April 2003 ATHELNEY TRUST PLC INVESTMENT AND PORTFOLIO ANALYSIS AT 31 DECEMBER 2002 SECTOR STOCK HOLDING VALUE (£) £ % SECTOR 4 Construction & Building Materials Distributors Diversified Industrials Forestry & Paper General Retail Healthcare Insurance Leisure, Entertainment & Hotels Media & Photography Real Estate Speciality & Other Finance Support Services Technology, Media, Telecoms Transport Clarke (T) Galliford Try Gibbs & Dandy "A" Latham (James) N.W.F. Group Wynnstay Group Goodwin Severfield-Rowen Slingsby (H.C. ) Cropper (James) Flying Brands Mallett SCS Upholstery Stanley Gibbons Wyevale Garden Centres Reed Health Group Personal Group Holdings Enterprise Inns Gowrings Merrydown SFI Group Shepherd Neame "A" Springwood CA Coutts Holdings International Greetings Estates & Agency Mountview Estates Unite Group Amalgamated Metal Broadcastle Camellia IFX Group Private & Commercial Finance Corp. S & U Wintrust Christie Group Dawson Holdings Enterprise Fountains Genus Landround NBA Quantum Penna Consulting Photo-scan Reed Executive Universe Group Waterman Partnership Holdings Watermark Group WSP Group Alphameric CRC Group Dicom Group Delcam ICM Computer Group Intelek Mettoni Group MTL Instruments Group Pennant International Plasmon Radstone Technology Air Partner Braemar Seascope Group Clarkson Clyde Marine Fisher (James) 6,000 68,000 10,000 4,000 13,000 7,500 17,000 6,500 4,000 10,000 14,000 12,000 8,000 120,000 25,000 26,666 22,000 8,600 15,000 47,000 20,000 8,930 18,000 22,000 18,000 3,150 1,925 10,000 6,600 40,000 3,331 13,300 35,000 10,000 3,500 25,000 37,200 16,000 15,000 20,000 7,700 15,000 16,000 15,000 20,000 40,000 25,000 25,000 13,000 25,000 12,000 5,000 10,000 7,500 65,000 110,000 7,250 56,000 20,000 8,000 8,500 10,000 9,600 19,520 23,400 24,960 17,000 19,250 12,700 42,250 31,875 14,535 17,388 21,200 17,000 20,090 25,440 18,840 19,200 92,250 24,533 26,070 49,063 8,325 19,505 - 42,864 4,950 16,830 40,500 18,113 53,419 15,750 33,000 21,600 92,435 18,620 18,725 34,000 12,513 10,875 36,828 33,920 16,500 33,000 11,589 9,375 14,640 14,100 23,700 9,000 13,250 21,625 5,200 12,750 29,580 20,250 12,500 13,688 7,475 - 9,715 7,840 21,400 22,960 23,800 13,500 18,384 46,848 38,376 73,910 4.94% 74,125 4.95% 53,123 17,000 3.55% 1.14% 175,820 24,533 26,070 11.74% 1.64% 1.74% 124,707 8.33% 57,330 3.83% 87,282 5.83% 230,893 15.41% 253,602 16.93% 158,158 10.56% 140,908 9.41% ATHELNEY TRUST PLC INVESTMENT AND PORTFOLIO ANALYSIS AT 31 DECEMBER 2002 ( CONTINUED) Portfolio Value Net Current Assets Deferred tax TOTAL VALUE Shares in issue Audited NAV £ 1,497,461 £ 73,552 £ (71,000) £ 1,500,013 1,802,802 83.2p 5 100.00% Construction & Building Materials Distributors Diversified Industrials Forestry & Paper General retail Healthcare Insurance Leisure, Entertainment & Hotels Media & Photography Real Estate Speciality & Other Finance Support Services Technology, Media, Telecoms Transport Portfolio by Sectors 9.41% 4.94% 4.95% 10.56% 16.93% 3.55% 1.14% 11.74% 1.64% 1.74% 8.33% 3.83% 15.41% 5.83% Portfolio by Listing AIM 23% OFEX 8% FULL AIM OFEX UNQUOTED UNQUOTED 2% FULL 67% REPORT OF THE DIRECTORS OF ATHELNEY TRUST PLC 6 The directors present their report and audited financial statements of the Company for the year ended 31 December 2002. Principal activity and business review The principal activity of the Company is that of an investment company. The investment objectives of the Company are to achieve long term capital growth while at the same time producing a progressive income return. Investments made by the Company are primarily in the equity securities of both unquoted and quoted UK companies, including smaller companies with a market capitalisation of below £50 million. During the period, the Company followed the normal activities of an investment company. Details of these are given in the Chairman's Statement on pages 1, 2 and 3. Directors and their interests The directors who held office during the year and their interest in the ordinary shares of the Company are stated below:- 31 December 2002 31 December 2001 H.B. Deschampsneufs 122,575 120,200 R.G. Boyle 485,000 480,000 D.A. Horner (appointed 12 April 2002) - - R.J Ellert resigned on 12 April 2002. The above figures include a holding of 58,000 shares (2001 - 58,000) owned by a pension fund in which R.G.Boyle and H.B Deschampsneufs have an interest. Directors' responsibilities The directors are required by the Companies Act 1985 to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company at the end of the financial year and of the result for the year. The directors consider that in preparing the financial statements the Company has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgements and estimates and confirm that all applicable accounting standards have been followed, subject to any material departures disclosed and explained in the accounts. The financial statements have been prepared on a going concern basis. The directors are responsible for ensuring that the Company keeps proper accounting records which disclose, with reasonable accuracy at any time, the financial position of the company and for ensuring the financial statements comply with the Companies Act 1985. The directors also have that responsibility for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. REPORT OF THE DIRECTORS OF ATHELNEY TRUST PLC (CONTINUED) 7 Corporate governance The Board continues to give careful consideration to the principles of corporate governance as set out in the Combined Code appended to the Listing Rules issued by the Financial Services Authority. However the Company is small and it is the opinion of the directors that not all the provisions of the Code are relevant or desirable for a company of Athelney's size. The Board meets regularly and has ultimate responsibility for the management of the Company, although the Remuneration Committee makes recommendations to the Board relating to the remuneration of the managing director and the non-executive directors. The Audit Committee assists the Board in relation to matters concerning corporate governance and financial reporting. Both Committees, currently comprising H.B. Deschampsneufs and D.A. Horner, meet during the year as required, with the Audit Committee to include external auditors if appropriate. Results and dividends The return on ordinary activities before dividends for the year is £24,107 (2001: £50,289) as detailed on page 9. It is recommended that a final dividend of 1.7p (2001: 1.7p) per share be paid. The retained loss for the year of £6,541, after providing for payment of dividends, has been deducted from revenue reserves. Payment of suppliers It is the Company's policy to obtain the best possible terms for all business and, therefore, there is no consistent policy as to the terms used. The Company contracts the terms on which business will take place throughout the year with its suppliers. There were no invoiced trade creditors outstanding at the end of the year, the amounts shown as creditors in the balance sheet comprise expenses and proposed dividends. Amendment to the Articles of Association The Articles of Association require that the Company pass a resolution at the Annual General Meeting in 2005 and every subsequent five years so that it might continue in being as an investment company. The Board proposes to amend the Articles to remove this requirement and enable the Company to continue as investment company until otherwise resolved by the shareholders. Auditors In accordance with Section 385 of the Companies Act 1985, a resolution proposing that Clement Keys be re-appointed as auditors of the Company will be put to the annual general meeting. BY ORDER OF THE BOARD J.M. Davies Secretary 2 Queen Anne's Gate Buildings Dartmouth Street LONDON SW1H 9BP 7 April 2003 INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF 8 ATHELNEY TRUST PLC We have audited the financial statements of Athelney Trust plc for the year ended 31 December 2002, set out on pages 9 to 19. These financial statements have been prepared under the historical cost convention as modified to include fixed asset investments at valuation and the accounting policies set out on pages 12 and 13. This report is made solely to the company's members, as a body, in accordance with Section 235 of the Companies Act 1985. 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 the law, we do not accept 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. Respective responsibilities of directors and auditors As described in the statement of Directors' Responsibilities the company's directors are responsible for the preparation of the financial statements in accordance with applicable law and United Kingdom Accounting Standards. Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and United Kingdom Auditing Standards. We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Companies Act 1985. We also report to you if, in our opinion, the Directors' Report is not consistent with the financial statements, if the company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors' remuneration and transactions with the Company is not disclosed. We read other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Basis of audit opinion We conducted our audit in accordance with United Kingdom Auditing Standards issued by the Auditing Practices Board. An audit includes an examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements and of whether the accounting policies are appropriate to the company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Opinion In our opinion the financial statements give a true and fair view of the state of affairs of the Company as at 31 December 2002 and of the revenue, total return and cash flows for the year then ended and have been properly prepared in accordance with the provisions of the Companies Act 1985. Clement Keys Chartered Accountants Registered Auditors 39 / 40 Calthorpe Road Edgbaston BIRMINGHAM B15 1TS 7 April 2003 ATHELNEY TRUST PLC STATEMENT OF TOTAL RETURN (INCORPORATING THE REVENUE ACCOUNT) FOR THE YEAR ENDED 31 DECEMBER 2002 9 31 December 2002 31 December 2001 (Losses) on investments Income Investment management expenses Other expenses Return on ordinary activities before taxation 7 2 3 3 Note Revenue Capital Total Revenue £ - £ £ (275,430) (275,430) £ - Capital as restated £ Total as restated £ (9,071) (9,071) 60,328 - 60,328 86,424 - 86,424 (10,868) (10,869) (21,737) (9,071) (9,070) (18,141) (33,532) - (33,532) (34,406) - (34,406) 15,928 (286,299) (270,371) 42,947 (18,141) 24,806 Taxation 5 8,179 63,485 71,664 7,342 3,573 10,915 Return on ordinary activities after taxation 24,107 (222,814) (198,707) 50,289 (14,568) 35,721 Dividend 6 (30,648) - (30,648) (30,648) - (30,648) Transfer (from) / to reserves (6,541) (222,814) (229,355) 19,641 (14,568) 5,073 Return per ordinary share 1.3p (12.3)p (11.0)p 2.8p (0.8)p 2.0p Dividend per ordinary share Final dividend 1.7p 1.7p The revenue column of this statement is the profit and loss account for the Company. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the above financial years. A statement of movements of reserves is given in note 12. The notes on pages 12 to 19 form part of these financial statements. ATHELNEY TRUST PLC BALANCE SHEET AS AT 31 DECEMBER 2002 10 Fixed assets Investments Current assets Debtors Cash at bank and in hand Note 2002 £ 2001 as restated £ 7 1,497,461 1,798,443 8 54,241 60,144 114,385 15,535 112,457 127,992 (54,067) 73,925 Creditors: amounts falling due within one year 9 (40,833) Net current assets 73,552 Total assets less current liabilities 1,571,013 1,872,368 Provisions for liabilities and charges 10 (71,000) (143,000) Net assets 1,500,013 1,729,368 Capital and reserves Called up share capital Share premium account Other reserves - non distributable Capital reserve - realised Capital reserve - unrealised Revenue reserve Shareholders' funds 11 12 12 12 12 13 450,700 405,605 248,817 373,399 21,492 450,700 405,605 204,361 640,669 28,033 1,500,013 1,729,368 Net asset value per share 83.2p 95.9p Approved by the board of directors on 7 April 2003. ……………………………….. R.G.Boyle The notes on pages 12 to 19 form part of these financial statements. ATHELNEY TRUST PLC CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2002 11 Net cash (outflow) / inflow from operating activities Servicing of finance Dividends paid 2002 2001 £ £ £ £ (487) 38,369 (30,648) (28,845) Net cash (outflow) from servicing of finance (30,648) (28,845) Taxation Corporation tax paid Investing activities Purchases of investments Sales of investments (8,009) (51) (359,428) 346,259 (554,529) 553,083 Net cash (outflow) from investing activities (Decrease) / increase in cash in the year Reconciliation of operating net revenue to net cash (outflow) inflow from operating activities Revenue on ordinary activities before taxation Decrease in debtors (Decrease) / increase in creditors Management expenses charged to capital Analysis of net debt Cash at bank and in hand (13,169) (52,313) £ 15,928 15 (5,561) (10,869) (487) 2001 £ 112,457 (1,446) 8,027 £ 42,947 890 3,602 (9,070) 38,369 Cashflow £ (52,313) 2002 £ 60,144 The notes on pages 12 to 19 form part of these financial statements. ATHELNEY TRUST PLC NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2002 12 1. Accounting policies 1.1 Basis of Preparation of Financial Statements The financial statements are prepared under the historical cost convention modified to include fixed asset investments at valuation. The financial statements are prepared in accordance with applicable accounting standards and, unless otherwise stated, the provisions of the Statement of Recommended Practice in 'Financial Statements of Investment Trust Companies' (SORP) currently in effect. 1.2 Income Income from investments including taxes deducted at source is recognised as income on the date the dividend is due for payment. Franked investment income is reported net of tax credits in accordance with Financial Reporting Standard 16 'Current Tax'. Interest is dealt with on an accruals basis. 1.3 Expenses Expenses (including VAT) and interest payable are dealt with on an accruals basis and charged through the Revenue Account. 1.4 Investment management fee in line with the The investment management fee has been allocated 50% to revenue and 50% to capital, Board's expected long term split of returns, in the form of income and capital gains respectively, from the investment portfolio. 1.5 Investments Listed investments comprise those listed on the London Stock Exchange. Profits and losses on sales of investments are taken to realised capital reserve. Any unrealised appreciation or depreciation is taken to unrealised capital reserve. The Company's investments have been valued according to the following rules:- (i) Where bid and offer prices are quoted by a market maker in such securities on the valuation date, investments have been valued on the basis of the middle market price. (ii) Where no spread is available, investments have been valued on the basis of the average of the dealing prices recorded by a market maker for such securities on the valuation date or, in the absence of any dealings on that date, at the average of such dealing prices on the latest practicable day prior to the valuation date. 1.6 Taxation The tax effect of different items of income and expenses is allocated between capital and revenue on the same basis as the particular item to which it relates, using the Company's effective rate of tax for the year. ATHELNEY TRUST PLC NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2002 13 1. Accounting policies (continued) 1.7 Deferred taxation The company has adopted Financial Reporting Standard 19 in the year. Deferred taxation is provided in respect of all future obligations to pay additional tax arising as a result of past events. Tax is provided at the latest known rates on all timing differences. Deferred tax assets and liabilities are not discounted. 1.8 Capital reserves Capital reserve- Realised Gains and losses on realisations of fixed asset investments are dealt with in this reserve. Capital reserve- Unrealised Increases and decreases in the valuations of fixed asset investments are dealt with in this reserve. 2. Income Income from investments Franked investment income Foreign dividends Other income Bank interest Other interest Total income Income from investments UK listed investments AIM investments Other investments 2002 £ 58,416 - 58,416 1,900 12 60,328 £ 42,159 11,039 5,218 58,416 2001 £ 79,659 1,270 80,929 5,495 - 86,424 £ 38,451 38,205 4,273 80,929 ATHELNEY TRUST PLC NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2002 14 3. Return on ordinary activities before taxation The following amounts (inclusive of VAT) are included within management and other expenses:- Directors' remuneration:- - Services as a director - Otherwise in connection with management Auditors' remuneration:- - Audit Services - Non audit services 4. Employees The only employees during the year were the directors. Costs in respect of these directors:- Wages and salaries Social security costs 2002 £ 2001 £ 7,997 20,000 6,466 810 2002 £ 20,000 1,821 21,821 6,000 16,000 6,404 6,858 2001 £ 16,000 1,378 17,378 5. Taxation 2002 2001 Revenue Capital Total Revenue Capital Total (i) The tax charge for the year is based on the profit for the year Corporation tax Tax relief on management expenses charged to income Adjustment in respect of previous years Deferred taxation £ - £ £ £ £ £ 412 412 - 8,085 8,085 (8,179) 8,179 - (7,342) 7,342 - - - (76) (72,000) (76) (72,000) - - - (19,000) - (19,000) (8,179) (63,485) (71,664) (7,342) (3,573) (10,915) The deferred taxation figures for 2001 are restated in accordance with the requirements of Financial Reporting Standard 19. ATHELNEY TRUST PLC NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2002 15 5. Taxation (continued) 2002 £ 2001 £ (ii) Factors affecting the tax charge for the year The tax charge for the period is lower than the average small company rate of corporation tax in the UK (19.25 per cent). The differences are explained below: Total return on ordinary activities before tax (270,371) 24,806 Total return on ordinary activities multiplied by the average small company rate of corporation tax 19.25% (2001: 20%) Effects of: Franked investment income not taxable Revaluation of shares not tax deductible Indexation relief for capital gains Other Current tax charge for the year (52,046) 4,961 (11,245) 65,309 (1,628) 22 412 (15,932) 20,828 (1,874) 102 8,085 6. Dividend Final proposed dividend of 1.7p (2001 -1.7p) per share. 2002 £ 30,648 2001 £ 30,648 ATHELNEY TRUST PLC NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2002 16 7. Investments Movements in year Valuation at beginning of year Purchases at cost Sales - proceeds - realised gains on sales (Decrease) in unrealised appreciation Valuation at end of year Book cost at end of year Unrealised appreciation at the end of the year UK Listed AIM Unlisted (Losses) / gains on investment Realised gains on sales (Decrease) in unrealised appreciation 8. Debtors Amounts falling due within one year: Other debtors 2002 £ 1,798,443 242,123 (267,675) 63,840 (339,270) 1,497,461 £ 1,053,062 444,399 1,497,461 1,001,895 340,979 154,587 1,497,461 2002 £ 63,840 (339,270) (275,430) 2002 £ 54,241 2001 £ 1,788,046 649,806 (630,338) 95,069 (104,140) 1,798,443 £ 1,014,774 783,669 1,798,443 1,323,676 354,319 120,448 1,798,443 2001 £ 95,069 (104,140) (9,071) 2001 £ 15,535 ATHELNEY TRUST PLC NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2002 17 9. Creditors: amounts falling due within one year Corporation tax Social security and other taxes Other creditors Proposed dividend Accruals and deferred income 2002 £ 412 1,682 554 30,648 7,537 40,833 2001 £ 8,085 1,080 939 30,648 13,315 54,067 10. Deferred taxation 2002 2001 Provided £ Not Provided £ Provided £ Not Provided £ Tax on unrealised gains net of losses 71,000 71,000 - - 143,000 143,000 - - Balance at beginning of year (as restated) Credit to profit and loss account Balance at end of year 2002 £ 143,000 (72,000) 71,000 2001 £ 162,000 (19,000) 143,000 The provision for deferred taxation has been restated in accordance with the requirements of Financial Reporting Standard 19. Tax is provided at the latest known rates on all taxable gains net of losses which would arise if investments were sold at the market value included in the balance sheet at the end of the financial year. 11. Called up share capital Authorised 10,000,000 Ordinary shares of 25p each Allotted, called up and fully paid 1,802,802 Ordinary shares of 25p each 2002 £ 2001 £ 2,500,000 2,500,000 £ £ 450,700 450,700 ATHELNEY TRUST PLC NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2002 18 12. Reserves Share premium account £ 405,605 - - - - - 2002 Capital Capital reserve reserve realised unrealised £ 640,669 £ 204,361 63,840 - (10,869) (8,515) - - (339,270) - 72,000 - Revenue reserve £ 28,033 - - - - (6,541) Balance at beginning of year Net gain on realisation of investments (Decrease) in unrealised appreciation Management charge allocated to capital Corporation tax Retained loss for the year Balance at end of year 405,605 248,817 373,399 21,492 The opening unrealised capital reserve is restated in accordance with Financial Reporting Standard 19. Deferred tax of £143,000 has been provided in accordance with that Standard. 13. Reconciliation of movement on shareholders' funds Retained net revenue for the year after taxation Dividend Total recognised (losses) for the year Shareholders' funds at beginning of year (as restated) 2002 £ 24,107 (30,648) (6,541) (222,814) (229,355) 1,729,368 2001 £ 50,289 (30,648) 19,641 (14,568) 5,073 1,724,295 Shareholders' funds at end of year 1,500,013 1,729,368 ATHELNEY TRUST PLC NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2002 19 14. Risk management, financial assets and liabilities The following information is given in accordance with Financial Reporting Standard 13. Risk management The major risks associated with the Company are market and liquidity risk. The Company has established a framework for managing these risks. The directors have guidelines for the management of investments and financial instruments. Market risk arises from changes in interest rates, valuations awarded to equities, movements in prices and the liquidity of financial instruments. The Company's portfolio is invested in UK securities. Financial assets and liabilities The Company's financial instruments comprise equity investments, cash balances and debtors and creditors that arise directly from its operations, for example, in respect of sales and purchases awaiting settlement. Short term debtors and creditors are excluded from disclosure as allowed by FRS 13. Fixed asset investments (see note 7) are valued at middle market prices which equate to their fair values. The fair values of all other assets and liabilities are represented by their carrying values in the balance sheet. 20 ATHELNEY TRUST PLC OFFICERS AND FINANCIAL ADVISORS Directors: Secretary: Registered Office: Nominated Adviser: Nominated Broker: Auditor: Banker: Registrar: H.B. Deschampsneufs (Chairman) R.G. Boyle D.A. Horner J.M.Davies 9 Limes Road Beckenham Kent, BR3 6NS 2 Queen Anne's Gate Buildings Dartmouth Street London, SW1H 9BP Noble & Company Limited 76 George Street Edinburgh, EH2 3BU Spiers & Jeffrey Limited 36 Renfield Street Glasgow, G2 1NA Clement Keys 39 /40 Calthorpe Road Edgbaston Birmingham, B15 1TS The Royal Bank of Scotland plc London City Office 62/63 Threadneedle Street London City Office, EC2R 8LA Park Circus Registrars Limited James Sellar's House 2nd Floor 144 West George Street Glasgow, G2 2HG Company Number: 2933559 ATHELNEY TRUST PLC NOTICE OF ANNUAL GENERAL MEETING 21 NOTICE IS HEREBY GIVEN that the ninth Annual General Meeting of the Company will be held at 2 Queen Anne's Gate Buildings, Dartmouth Street, London SW1H 9BP on Wednesday 14 May 2003 at 4.30 pm for the following purposes: As Ordinary Business 1. To receive and adopt the Company's Accounts and the Reports of the Directors and the Auditors for the year ended 31 December 2002. 2. To declare a final dividend of 1.7p per ordinary share. It is intended that dividend cheques in respect of the final dividend will be posted on Monday 19 May 2003 to all shareholders on the register of members at close of business on Tuesday 22 April 2003. 3. To approve the remuneration of the Directors 4. To re-elect Mr H.B. Deschampsneufs as a Director of the Company. 5. To re-appoint Clement Keys as Auditors and to authorise the Directors to fix their remuneration. As Special Business To consider, and if thought fit, to pass the following resolution which will be proposed as a special resolution: 6. That the Articles of Association of the Company be and hereby are amended as follows: (a) by the deletion of paragraphs (i) and (ii) of Article 154 headed 'Duration and Winding up of the Company' (b) by the deletion of the words 'Duration and ' from the heading of Article 154; and (c) by the renumbering of Article 154 headed Indemnity' as Article 155 and the renumbering of the subsequent Articles accordingly. By Order of the Board J.M.Davies Secretary 7 April 2003 Registered Office: 2 Queen Anne's Gate Buildings, Dartmouth Street, London, SW1H 9BP NOTES (i) A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his/her stead. A proxy need not be a member of the Company. A form of proxy is enclosed with this Notice for use at the Meeting. To be valid, completed forms of proxy (together with any Power of Attorney or other authority under which it is executed or duly certified copy of any such Power or authority) must be deposited at the Company's Registered Office not less than 48 hours before the time fixed for the Meeting. Completion and return of a form of proxy will not prevent the member from attending and voting at the Meeting in person. (ii) The register of Directors' interests kept in accordance with Section 325 of the Companies Act 1985 and copies of Directors' service contracts will be available for inspection during normal business hours at the Company's Registered Office from the date of this Notice until the date of the Meeting. 

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