Athelney Trust Plc
Annual Report 2003

Plain-text annual report

Company Registered Number: 2933559 ATHELNEY TRUST PLC ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2003 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 CHAIRMAN'S STATEMENT I have pleasure in enclosing the results for the twelve months to 31 December 2003. The key points are as follows:- • Audited Net Asset Value ("NAV") is 110.9p per share (31 December 2002 : 83.2p), a rise of 33.3 per cent. • Gross Revenue rose by 68.0 per cent to £101,345 (31 December 2002: £60,328). • On a like-for-like basis revenue was actually up by 10.4 per cent and dividend income rose by 10.6 per cent. • Revenue return per ordinary share was 3.4p, an increase of 161.5 per cent ( 31 December 2002: 1.3p). • Recommended dividend for the year 1.8p per share (2002: 1.7p). The Market By any standards, 2003 was a good year for Athelney - except, that is, for the first 11 weeks or so. The NAV started the year at 83.2p, fell to 79.4p at 28 February but recovered strongly to 92.2p at 30 June and 110.9p at 31 December. As I described in the Interim Report to 30 June, some of the rise can be attributed to the so-called Baghdad Bounce, since, at that time, many investors thought that the conflict would be short-lived - now, of course, we know better. Elsewhere, interest rates remained low or very low by historical standards as did inflation, yet economic growth was very strong in the U.S. whereas we trundled along at just over 2% and the eurozone still struggled. At home, there were no real surprises in the Pre-Budget Report with public sector net borrowing requirement (PSNB) raised by £10 bn to £37 bn in 2003/4 and £38 bn in 2004/5. Over the next five years, borrowing is now expected to be £152 bn because of lower Income Tax, NI and Corporation Tax receipts. Over the last seven years public spending has increased by 25% in real terms and up to 40% by 2009. By any standards, that is a vast amount of money and represents a huge gamble by the Labour Government. Yet the signs and portents are not good: a huge increase in public sector employment without any improvement in productivity. Over the past five years, public sector employment has risen by almost 10% to 5.2 million, public sector pay is rising by 8% per annum and inflation is running at six times the level of the private sector. For how long can this extraordinary state of affairs be allowed to continue? Corporate activity has had a modestly beneficial effect on Athelney's NAV in 2003 with Reed Executive and Amalgamated Metal being taken over at a handsome profit to book value, although in the case of the latter a substantial part of the proceeds was received in the form of a special dividend. ATHELNEY TRUST PLC CHAIRMAN'S STATEMENT (CONTINUED) 2 Results Gross revenue rose by 68% to £101,345 in 2003, which figure certainly overstates the actual position in that special dividends were received from Gibbs & Dandy (£3,000), Amalgamated Metal (£30,756 see above) and T Clarke (£1,000). Taking all these factors into account gross revenue moved ahead by a satisfactory 10.4 % which, when coupled with the 33.3% rise in NAV, points to what the Board believes is a highly positive overall outcome for the year. The growth in dividend income is illustrated by the following table:- 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 62 8 5 33 7 9 Portfolio Review During 2003, new purchases were made of the following: James Beattie, Park Group, Rok Property Solutions, Secure Banking Trust Group, Vp, Alliance Pharma, Cardpoint, Cobra Bio-Manufacturing, Collins & Hayes, Ideal Shopping Direct, Oasis Healthcare, Patientline and a further 11 existing holdings were increased in size. Plasmon , Radstone Technology , Intelek , NBA Quantum , Estates & Agency , CRC Group , Alphameric , Gowrings , Delcam , MTL Instruments , Photo-scan , James Cropper , Private & Commercial Finance , Springwood , Ideal Shopping Direct and Dicom Group have all been sold. Several other shares were top-sliced. Dividend The Board has recommended an increased dividend of 1.8p (2002: 1.7p) for 2003, which compares with the 1.0p paid for Athelney's first full year of 1995. Newspapers As from January 2004, the share price of Athelney has been listed daily in the Financial Times and Times newspapers. ATHELNEY TRUST PLC CHAIRMAN'S STATEMENT (CONTINUED) 3 Update The unaudited NAV at 29 February 2004 was 120.7p per share. Unfortunately, the share price at the same date was 80.5p and thus the discount to NAV was an unflattering 33.3 %. Outlook The Board believes strongly in the future of small, well-managed businesses such as are held in the Athelney portfolio and that the shares of such companies will provide a profitable return to their shareholders in the years ahead. Nevertheless, it is true that blue-chips have substantially underperformed small caps in the last twelve months or so. It seems likely, then, that we will undergo a process of catching up whereby small companies' shares do little or nothing and blue-chips perform the better. After this process is complete, then the market looks likely to move ahead again on a broad front. Hugo Deschampsneufs Chairman 5 April 2004 ATHELNEY TRUST PLC INVESTMENT AND PORTFOLIO ANALYSIS AT 31 DECEMBER 2003 SECTOR STOCK HOLDING VALUE (£) £ % SECTOR 4 Construction & Building Materials Distributors Diversified Industrials General Retail Healthcare Household Goods & Textiles Insurance Leisure, Entertainment & Hotels Media & Photography Pharmaceutical Real Estate Speciality & Other Finance Support Services Technology, Media, Telecoms Transport Clarke (T) Galliford Try Gibbs & Dandy "A" Latham (James) VP Group N.W.F. Group Wynnstay Group Goodwin Severfield-Rowen Slingsby (H.C. ) Beattie, James Flying Brands Ideal Shopping Direct Mallett SCS Upholstery Stanley Gibbons Wyevale Garden Centres Oasis Healthcare Patientline Reed Health Group Collins & Hayes Personal Group Holdings Enterprise Inns Merrydown Shepherd Neame "A" CA Coutts Holdings International Greetings Alliance Pharma Cobra Bio-Manufacturing Mountview Estates Rok Property Solutions Unite Group Broadcastle Camellia Cardpoint IFX Group Park Group S & U Secure Trust Banking Group Wintrust Christie Group Dawson Holdings Enterprise Fountains Genus Landround Penna Consulting Universe Group Waterman Partnership Holdings Watermark Group WSP Group ICM Computer Group Pennant International Air Partner Braemar Seascope Group Clarkson Clyde Marine Fisher (James) 10,000 85,000 10,000 4,000 17,000 13,000 7,500 17,000 6,500 4,000 17,000 14,000 30,000 12,000 8,000 120,000 20,000 75,000 34,000 40,000 60,000 22,000 7,000 47,000 8,930 26,000 18,000 100,000 15,000 1,925 10,000 10,000 40,000 1,631 30,000 13,300 80,000 10,000 7,500 6,000 25,000 34,000 16,000 20,000 15,000 5,000 16,000 110,000 40,000 25,000 33,000 7,500 116,000 8,500 20,000 9,600 9,520 23,400 58,750 35,275 37,750 16,200 24,225 57,200 45,375 41,650 22,913 24,400 22,525 20,510 11,250 29,580 18,560 48,000 70,500 17,250 37,570 38,600 19,500 37,180 70,980 44,885 60,724 26,000 52,920 20,500 20,775 65,450 29,500 17,950 33,600 70,949 30,300 15,827 21,200 55,000 33,188 29,250 17,250 52,190 44,560 25,200 30,450 20,500 21,040 28,050 27,000 38,125 65,174 17,813 19,140 34,850 47,600 48,240 16,184 61,658 172,200 8.40% 102,575 5.01% 88,963 4.34% 220,925 10.78% 93,420 19,500 37,180 4.56% 0.95% 1.81% 176,589 8.63% 78,920 3.85% 41,275 2.01% 112,900 5.51% 289,314 14.13% 369,539 18.04% 36,953 1.80% 208,532 10.18% ATHELNEY TRUST PLC INVESTMENT AND PORTFOLIO ANALYSIS AT 31 DECEMBER 2003 ( CONTINUED) Portfolio Value Net Current Assets Deferred tax TOTAL VALUE Shares in issue Audited NAV £ 2,048,785 £ 114,524 £ (163,800) £ 1,999,509 1,802,802 110.9p 5 100.00% Portfolio by Sectors 18.04% 10.18% 8.40% 5.01% 1.80% 4.34% 10.78% 4.56% 0.95% 1.81% 8.63% Construction & Building Materials Distributors Diversified Industrials General Retail Healthcare Household Goods & Textiles Insurance Leisure, Entertainment & Hotels Media & Photography Pharmaceutical Real Estate Speciality & Other Finance Support Services Technology, Media, Telecoms Transport FULL AIM OFEX OFEX 6% 14.13% 5.51% 2.01% 3.85% Portfolio by Listing AIM 27% 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 2003. 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 2003 31 December 2002 H.B. Deschampsneufs 129,575 122,575 R.G. Boyle 485,000 485,000 D.A. Horner 5,000 - The above figures include a holding of 58,000 shares (2002 - 58,000) owned by a pension fund in which R.G. Boyle and H.B. Deschampsneufs have an interest and 5,000 shares (2002 - Nil) owned by a pension fund in which D.A.Horner has 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 that the financial statements comply with the Companies Act 1985. The directors also have 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 £60,621 (2002: £24,107) as detailed on page 9. It is recommended that a final dividend of 1.8p (2002: 1.7p) per share be paid. The retained profit for the year of £28,171, after providing for payment of dividends, has been added to 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. 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 5 April 2004 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 2003, 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. This other information comprises only the Chairman's Statement and the Investment and Portfolio Analysis. 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 It also includes an assessment of the significant estimates and judgements made by the financial statements. 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 2003 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 5 April 2004 ATHELNEY TRUST PLC STATEMENT OF TOTAL RETURN (INCORPORATING THE REVENUE ACCOUNT) FOR THE YEAR ENDED 31 DECEMBER 2003 9 31 December 2003 31 December 2002 Note Revenue £ Capital £ Total £ Revenue £ Capital £ Total £ Profits / (losses) on investments Income Investment management expenses Other expenses Return on ordinary activities before taxation 8 2 3 3 - 584,517 584,517 - (275,430) (275,430) 101,345 - 101,345 60,328 - 60,328 (11,576) (11,576) (23,152) (10,868) (10,869) (21,737) (38,003) - (38,003) (33,532) - (33,532) 51,766 572,941 624,707 15,928 (286,299) (270,371) Taxation 5 8,855 (101,616) (92,761) 8,179 63,485 71,664 Return on ordinary activities after taxation 60,621 471,325 531,946 24,107 (222,814) (198,707) Dividend 7 (32,450) - (32,450) (30,648) - (30,648) Transfer to / (from) reserves 28,171 471,325 499,496 (6,541) (222,814) (229,355) Return per ordinary share 6 3.4p 26.1p 29.5p 1.3p (12.3)p (11.0)p Dividend per ordinary share Final dividend 1.8p 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 13. There have been no recognised gains or losses, other than the results for the financial years shown above. The notes on pages 12 to 19 form part of these financial statements. ATHELNEY TRUST PLC BALANCE SHEET AS AT 31 DECEMBER 2003 10 Fixed assets Investments Current assets Debtors Cash at bank and in hand Note 2003 £ 2002 £ 8 2,048,785 1,497,461 9 87,392 74,593 161,985 54,241 60,144 114,385 (40,833) 73,552 Creditors: amounts falling due within one year 10 (47,461) Net current assets 114,524 Total assets less current liabilities 2,163,309 1,571,013 Provisions for liabilities and charges 11 (163,800) (71,000) Net assets 1,999,509 1,500,013 Capital and reserves Called up share capital Share premium account Other reserves - non distributable Capital reserve - realised Capital reserve - unrealised Revenue reserve Shareholders' funds - all equity 12 13 13 13 13 14 450,700 405,605 311,754 781,787 49,663 450,700 405,605 248,817 373,399 21,492 1,999,509 1,500,013 Net Asset Value per share 110.9p 83.2p Approved by the board of directors on 5 April 2004. ……………………………….. 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 2003 11 Net cash inflow / (outflow) from operating activities Servicing of finance Dividends paid 2003 2002 £ £ £ £ 45,471 (487) (30,648) (30,648) Net cash (outflow) from servicing of finance (30,648) (30,648) Taxation Corporation tax paid Investing activities Purchases of investments Sales of investments (373) (8,009) (385,319) 385,318 (359,428) 346,259 Net cash (outflow) from investing activities Increase / (decrease) in cash in the year Reconciliation of operating net revenue to net cash inflow / (outflow) from operating activities Revenue on ordinary activities before taxation Decrease in debtors Increase / (decrease) in creditors Management expenses charged to capital Analysis of net debt Cash at bank and in hand (1) 14,449 £ 51,766 43 5,238 (11,576) 45,471 2002 £ 60,144 (13,169) (52,313) £ 15,928 15 (5,561) (10,869) (487) Cashflow £ 14,449 2003 £ 74,593 The notes on pages 12 to 19 form part of these financial statements. ATHELNEY TRUST PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2003 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. UK dividend 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 costs Investment management costs have been allocated 50% to revenue and 50% to capital, in line with the 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 FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2003 13 1. Accounting policies (continued) 1.7 Deferred taxation 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 UK dividend income Foreign dividends Other income Bank interest Other interest Total income Income from investments UK listed investments AIM investments Other investments 2003 £ 99,338 - 99,338 2,007 - 101,345 £ 52,116 12,293 34,929 99,338 2002 £ 58,416 - 58,416 1,900 12 60,328 £ 42,159 11,039 5,218 58,416 ATHELNEY TRUST PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2003 14 3. Return on ordinary activities before taxation The following amounts (inclusive of VAT) are included within management and other expenses:- 2003 £ 2002 £ Directors' remuneration:- - Services as a director - Otherwise in connection with management 8,000 20,000 7,997 20,000 Auditors' remuneration:- Audit services - Statutory audit - audit related regulatory reporting Other services - accounts production and distribution 4. Employees The only employees during the year were the directors. Costs in respect of these directors:- Wages and salaries Social security costs 6,169 476 3,349 2003 £ 20,000 1,930 21,930 5,993 774 509 2002 £ 20,000 1,821 21,821 5. Taxation 2003 2002 Revenue Capital Total Revenue Capital Total (i) The tax charge for the year is based on the return for the year Corporation tax Tax relief on management expenses charged to income Adjustment in respect of previous years Deferred taxation £ - (8,855) £ - 8,855 £ - - £ - £ £ 412 412 (8,179) 8,179 - - - (39) 92,800 (8,855) 101,616 (39) 92,800 92,761 - - (76) (72,000) (76) (72,000) (8,179) (63,485) (71,664) ATHELNEY TRUST PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2003 15 5. Taxation (continued) (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 per cent). The differences are explained below: 2003 £ 2002 £ Total return on ordinary activities before tax 624,707 (270,371) Total return on ordinary activities multiplied by the average small company rate of corporation tax 19% (2002: 19.25%) 118,694 (52,046) Effects of: UK dividend income not taxable Revaluation of shares not (taxable) / tax deductible Indexation relief for capital gains Other Current tax charge for the year (18,874) (95,226) (4,779) 185 - (11,245) 65,309 (1,628) 22 412 6. Return per ordinary share The calculation of earnings per share has been performed in accordance with FRS 14 'Earnings per share'. £ Revenue 2003 £ Capital £ Total £ Revenue 2002 £ Capital £ Total Attributable return (loss) on ordinary activities after taxation 60,621 471,325 531,946 24,107 (222,814) (198,707) Number of shares 1,802,802 1,802,802 Return per ordinary share 3.4p 26.1p 29.5p 1.3p (12.3)p (11.0)p 7. Dividend Final proposed dividend of 1.8p (2002 -1.7p) per share 2003 £ 32,450 2002 £ 30,648 ATHELNEY TRUST PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2003 16 8. Investments Movements in year Valuation at beginning of year Purchases at cost Sales - proceeds - realised gains on sales Increase / (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 Gains / (losses) on investment Realised gains on sales Increase / (decrease) in unrealised appreciation 9. Debtors Amounts falling due within one year: Other debtors 2003 £ 1,497,461 385,319 (418,512) 83,329 501,188 2,048,785 £ 1,103,198 945,587 2,048,785 1,380,154 546,348 122,283 2,048,785 2003 £ 83,329 501,188 584,517 2003 £ 87,392 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 ATHELNEY TRUST PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2003 17 10. Creditors: amounts falling due within one year Corporation tax Social security and other taxes Other creditors Proposed dividend Accruals and deferred income 2003 £ - 3,776 1,077 32,450 10,158 47,461 11. Deferred taxation 2003 2002 Tax on unrealised gains net of losses Provided £ 163,800 163,800 Not Provided £ Provided £ - - 71,000 71,000 Balance at beginning of year Charge / (credit) to the capital element of the Statement of Total Return Balance at end of year 2003 £ 71,000 92,800 163,800 2002 £ 412 1,682 554 30,648 7,537 40,833 Not Provided £ - - 2002 £ 143,000 (72,000) 71,000 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. 12. 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 2003 £ 2002 £ 2,500,000 2,500,000 £ £ 450,700 450,700 ATHELNEY TRUST PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2003 18 13. Reserves Share premium account £ 405,605 - - - - - 2003 Capital Capital reserve reserve realised unrealised £ 373,399 £ 248,817 83,329 - (11,576) (8,816) - - 501,188 - (92,800) - Revenue reserve £ 21,492 - - - - 28,171 Balance at beginning of year Net gain on realisation of investments Increase in unrealised appreciation Management charge allocated to capita Taxation Retained profit for the year Balance at end of year 405,605 311,754 781,787 49,663 14. Reconciliation of movement on shareholders' funds Retained net revenue for the year after taxation Dividend Total recognised gains / (losses) for the year Shareholders' funds at beginning of year 2003 £ 60,621 (32,450) 28,171 471,325 499,496 1,500,013 2002 £ 24,107 (30,648) (6,541) (222,814) (229,355) 1,729,368 Shareholders' funds at end of year 1,999,509 1,500,013 ATHELNEY TRUST PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2003 19 15. 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 8) 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 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 tenth Annual General Meeting of the Company will be held at 2 Queen Anne's Gate Buildings, Dartmouth Street, London SW1H 9BP on Wednesday 12 May 2004 at 4.30 p.m. 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 2003. 2. To declare a final dividend of 1.8p per ordinary share. It is intended that dividend cheques in respect of the final dividend will be posted on Monday 17 May 2004 to all shareholders on the register of members at close of business on Friday 16 April 2004. 3. To approve the remuneration of the Directors 4. To re-elect Mr D.A.Horner as a Director of the Company. 5. To re-appoint Clement Keys as Auditors and to authorise the Directors to fix their remuneration. By Order of the Board J.M. Davies Secretary 5 April 2004 Registered Office: 2 Queen Anne's Gate Buildings, Dartmouth Street, London, SW1H 9BP NOTES (i) 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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