Annual Report
for the year ended 31 December 2008
Athelney Trust plc
CONTENTS
Directors of the Company
Chairman's Statement and Business Review
Corporate Governance Statement
Investment and Portfolio Analysis
Report of the Directors
Directors’ Remuneration Report
Independent Auditors’ Report
Income Statement
Reconciliation of Shareholders’ Funds
Balance Sheet
Cash Flow Statement
Notes to the Financial Statements
Officers and Financial Advisers
Notice of Annual General Meeting
Notes
Form of Proxy
2
3 - 7
8 - 11
12 - 14
15 - 18
19 - 20
21 - 22
23
24
25
26
27 - 35
36
37
38
39 – 40
1
Athelney Trust plc
DIRECTORS OF THE COMPANY
The Directors of the Company are:
Mr Hugo Deschampsneufs, non-executive Chairman
Hugo Deschampsneufs, aged 63, has spent his entire working career in finance and is a fellow of the Institute of Chartered
Accountants in England and Wales (FCA). He qualified with Binder Hamlyn. He has worked for the Rank Organisation
and National CSS Inc., a subsidiary of Dunn & Bradstreet. In 1979 he joined Manchester Exchange & Investment Bank,
leaving in 1989 as Director of Leasing Operations. Since then, he has held the position of Finance Director of Longriver
Holdings Limited, a group with assets of £70 million, specialising in the leasing of fixture-type assets to local authorities,
in which his diverse roles encompass the disciplines of marketing and legal. His work in both the accounting profession
and investment banking has given him extensive knowledge in a wide-ranging variety of business sectors. He has
considerable experience of asset management both as a non-executive Director of Dunbar Boyle & Kingsley Holdings, the
holding company of a firm of stockbrokers, and as a Director of Athelney Trust plc since its formation.
David Horner, non-executive Director
David Horner aged 49, qualified as a Chartered Accountant in 1985 with Touche Ross & Co before joining 3i Corporate
Finance Limited in 1986 where he was a manager giving corporate finance advice. In May 1993, he joined Strand Partners
Limited and was appointed a Director in January 1994, where he carried out a range of corporate finance assignments
identifying, structuring and managing investments in quoted and unquoted companies. In October 1997 he left to set up
Chelverton Asset Management Limited, which specialises in managing portfolios of private companies and small to
medium-sized public companies. He was responsible for setting up Chelverton Growth Trust plc and, since May 1999, has
managed the Small Companies Dividend Trust plc.
Mr Robin Boyle, Managing Director
The assets of the Company have been managed since formation by Robin Boyle, the managing Director of the Company.
Aged 64, he has spent the last forty years in a number of different roles with institutional fund management and stock
broking firms but always retaining an intense interest in Small Caps. His first job in the City of London was with the
company that eventually became Gartmore; he then went on to Panmure Gordon, Hoare Govett and Capel-Cure Myers
before becoming founder, major shareholder and Managing Director of a private stock broking business, Dunbar Boyle &
Kingsley, which he sold in 1994. From 2000 to 2006 he was co-manager of Small Companies Dividend Trust run by
Chelverton Asset Management. Between 2006 and 2008 he was non-executive Director of Capcon Holdings plc, an AIM-
traded commercial investigations and stocktaking business.
2
Athelney Trust plc
Waterside Court, Falmouth Road, Penryn, Cornwall, TR10 8AW
Telephone: 01326 378 288 Email: hugo@athelneytrust.co.uk
CHAIRMAN’S STATEMENT AND BUSINESS REVIEW
I enclose the results for the year ended 31 December 2008. The salient points are as follows:
• Like-for-like NAV is 102.3p per share (31 December 2007: 173.1p) a fall of 40.9 per cent.
• Audited Net Asset Value (“NAV”) of 95.2p per share a decrease of 45 per cent.
• Gross Revenue increased by 2.9 per cent to £123,951 (31 December 2007: £120,488).
• On a like-for-like basis gross revenue increased by 9.2 per cent and dividend income increased by 5.6 per cent (in
2007 the Company was in receipt of a special dividend of £6,961).
• Revenue return per ordinary share was 5.5p, an increase of 41.2 per cent (31 December 2007: 3.9p).
• Recommended dividend of 4.7p per share (2008: 3.5p), an increase of 34.3 per cent
Review of 2008
Lord Alvanley, a member of the Victorian landed gentry, used to say that his greatest pleasure was to sit in the window of
his club (Watier’s) and ‘watch it rain on all the damned people.’ Well, it certainly feels as if it has been raining on me all
year and I do not suppose that there is an investor in the land who does not agree with me. Just look at these statistics:
London (the FTSE100 Index) down 31 per cent, New York by 39 per cent, Tokyo 42 per cent, Paris 43 per cent and
Frankfurt 40 per cent. Amongst lesser markets, China fell by 65 per cent, India by 53 per cent, Russia 67 per cent and
Iceland an eye-watering 95 per cent. Re-visiting the London market, the FT 250 Index was down by 40 per cent, the FT
Small Cap Index finished 45 per cent down and the Aim Index by 62 per cent (Athelney has 48 per cent of its funds
invested in this last area) - in short, it was the worst year since 1974.
In a normal year, Athelney would have comfortably out-performed two of its main benchmarks, the FT Small Cap. and
AIM Indices, but 2008 was the year that the Directors, after careful consideration, decided to move the Trust from AIM to
a full listing in order to qualify for authorized investment trust status. There were several reasons for taking this course of
action. As an investment trust, Athelney would no longer be liable to Corporation Tax on any capital gains. We believe
we will have large capital gains in the future and not having to pay tax will result in a higher Net Asset Value per share
than would otherwise be the case. Your Directors also expect that regulatory costs will be lower on the main market.
Finally shareholders will be able to put their shareholding into a PEP or ISA, which we hope will attract new investors
enabling the company to increase in size and thus lower costs per share. Professional fees and other costs of £128,782
were incurred in the move to investment trust status, which resulted in an NAV of 95.2p rather than 102.3p on a like-for-
like basis, a fall of 45% and 40.9% respectively.
Banks and insurance companies set out to be monuments of stone and steel but the best and greatest of them have
splintered into matchwood. A few short months saw the nationalization, failure or rescue of the world’s biggest insurer
with assets of $1 trillion, two major investment banks with combined assets of $1.5 trillion and two U.S. mortgage giants
with another $1.8 trillion. In Europe, Bradford & Bingley has gone and Britain’s largest mortgage lender, HBOS, has
fallen into the arms of Lloyds TSB for a mere £4 billion following a huge fall in the share price. Alliance & Leicester,
hounded by short-sellers, was bought at a knock-down price by Banco Santander. In the rest of Europe, Fortis, Dexia,
Hypo Real Estate and all the Icelandic banks have been rescued by state intervention. The bankruptcy of Lehmann
Brothers and Merrill Lynch’s rapid sale to Bank of America were shocking enough but the U.S. Government’s rescue of
AIG in September marked a new low in a grim year. AIG is a mostly safe, well-run insurer but its financial products
division, which accounted for just a fraction of total revenue, wrote enough derivatives business to destroy the firm and
shake Wall Street to the core.
Bankers have always earned their crust by committing money for long periods and financing that with short-term deposits
and borrowing. Today, that model looks under stress. Many of the banks’ assets are unsaleable even as they return to the
market every day to ask lenders for further support. No wonder the banks are hoarding cash.
3
Athelney Trust plc
CHAIRMAN’S STATEMENT AND BUSINESS REVIEW
(CONTINUED)
That is why politicians on both sides of the Atlantic who set the interests of Main Street/High Street against those of Wall
Street/Lombard Street are wrong. Sooner or later, money markets affect every business. Companies face higher
interest charges and the fear that one day they may lose access to bank loans altogether. So they, too, hoard cash,
cancelling acquisitions and investments in order to pay down debt. Managers delay new products, leave factories unbuilt,
pull the plug on loss-making subsidiaries and cut costs and jobs. Car-makers and other manufacturers may no longer extend
credit and loans could become both elusive and expensive, consumers would suffer and unemployment rise. Even if credit
markets work well, the developed economies would slow as the asset-price bubble pops.
The Bank of England base rate finished the year at 2%, thus matching 1951 when the average house price was £2,000 and
Winston Churchill was promising that he would never permit the dismemberment of the Empire. And as for oil, it rose to
$147 in early July on its way, it was said, to $200, but all commodities except gold collapsed in price as the credit crunch
bit and so oil finished the year at $40. Thus emboldened, the Bank of England was able to embark on its fierce programme
of rate cuts from a starting level of 5.5 per cent. As rates fell, so did the confidence of overseas investors in the U.K.
generally and the pound in particular, so Sterling dived from $1.9929 to $1.4427, a collapse of no less than 28 per cent.
Back to Pontin’s this Summer, then!
I make no apology for returning to the subject of the banks, which are, after all, at the heart of the credit crunch. Nor do I
intend to stick rigidly to my brief, which finishes on 31 December. We start in October, when Mr Brown thought that he
had saved the banks (and, as he later said, ‘saved the world’) by the injection of £37 billion. He was told then that that sum
of money would merely re-capitalize the banks and not provide any scope for increased lending by them and, of course, he
refused to listen. So a second attempt was made on 19 January, nearly three weeks after Athelney’s year end. The
Treasury’s new measures were wide-ranging. The Bank of England will set up a £50 billion facility to buy private-sector
assets such as corporate bonds and commercial paper. This would create a framework within which the Bank could
conduct ‘quantitative easing’ – printing money to buy assets – if that proves necessary. Northern Rock, nationalized early
in 2008, will no longer be forced to slash its mortgage book. The Government will also try to encourage lending by
guaranteeing up to £50 billion in asset-backed securities and the Financial Services Authority helpfully said that the new
capital recently injected into the banks could, in fact, be used for both mopping up losses and new lending. The heart of
the package was an Asset Protection Scheme, ‘asset’ being a euphemism for those toxic assets hindering a return to
financial health. Rather than setting up a ‘bad bank’ to take those assets off balance sheet, the Treasury has decided to turn
itself into a kind of catastrophe insurer. In exchange for the payment of a premium and agreeing to take the first chunk of
any loss (my car insurer would call it an ‘excess’), the banks would be able to turn to the taxpayer for any further write-
down.
But what of those two options – bad banks and insurance? Mr Brown and his advisers chose insurance alone and, to my
mind, he has made a (another) mistake. My suspicion is that he preferred insurance for political reasons because it is a
cheap promise-now and pay-later scheme. It would have been better to have reached for the kitchen sink (in fact, done the
building trade a favour and bought a larger sink) and do both – buy the worst assets at their market value and put them into
a bad bank as well as insure the healthy assets that remain against any catastrophe. Is it all a little impractical? In 1988,
America’s Mellon Bank spun off its bad energy and property loans into Grant Street National Bank, which was financed by
junk bonds and private equity. Seemed to work quite well at the time. More controversially, Lloyds of London hived off
huge asbestos and pollution liabilities relating to policies originally written as far back as the 1930s into a new company
christened Equitas in 1996.
And wasn’t it difficult to prise bank directors and senior managers away from their desks, even with hammer and cold
chisel, into the world of no-work! I have absolutely no sympathy at all for them who, like the condemned men in the old
Scottish tale, protest their innocence and complain at the injustice of their fate. You may remember that, as they head
towards the eternal flames of hell, the sinners cry out: ‘Oh Lord, we didna ken, we didna ken!’ And the Lord answered:
‘Well, ye ken the noo.’ Well, that’s quite enough about banks.
4
Athelney Trust plc
CHAIRMAN’S STATEMENT AND BUSINESS REVIEW
(CONTINUED)
In this recession, we are all followers of John Maynard Keynes now, aren’t we? We all believe in hiring a man to dig a
hole and another to fill it up again, thus keeping two off the dole. And isn’t this Labour government going to enjoy
spending lots of money and, in the process, beggaring our children and grandchildren! Except in one respect, that is
spending on defence generally and our armed forces in Afghanistan in particular – but we must not just blame Mr Brown
and his political cohorts. George Bernard Shaw once half-joked that ‘the British soldier can stand up to anything except
the British War Office.’ The generals have failed to update their counter-insurgency doctrine and units still rotate every six
months, which leads to discontinuity and short-term thinking. American soldiers stay for 12. But back to the Labour
politicians who must take the bulk of the blame for the air force’s transport fleet being in a poor state and the navy
shrinking. But it is the army that is worst off. It was not designed to fight two protracted wars and the strains are made
worse by shortages of men and equipment. Battalions can be one-fifth below strength with a further fifth ill, injured or
otherwise unfit to employ. A multi-million pound hole in the equipment budget means that new systems have to be scaled
back or delayed. Buying kit is so expensive and takes so long that spending is completely out of line with current needs -
most money now goes on fighter jets, aircraft carriers and submarines, much of which is of little use in Afghanistan. Like
any form of insurance, defence policy must cover a range of risks: the safety of sea lanes is vital to move supplies in
wartime and to trade in times of peace; the supremacy of the skies is essential for success on land or sea but Afghanistan is
the priority. That war will be won or lost on the ground and the army needs more soldiers, helicopters, drones and
personnel carriers. More money, a lot more money must be spent. Abandoning Afghanistan, leaving a vacuum for the
Taliban to fill, would mean a victory for extremism everywhere, a destabilized Pakistan and a less safe world. Losing
today’s war may mean fighting another some time in the future, this time on the streets of Britain.
And while we are on the subject of our unelected Prime Minister and former Chancellor of the Exchequer, I think that it is
timely to remind you, Gentle Shareholder, of his final Budget speech in March 2007. The opening section was in praise of
his own genius, a tribute to a decade of tinkering and tampering (aka micromanagement). ‘We will never return to the old
boom and bust’ he boasted, unencumbered by humility or wit. He had, of course, said it before but this time I think that he
really believed it. He genuinely thought that he had found a way to halt, Canute-like, the flow of free-market activity. He
then went on to explain that, thanks to him, Britain was doing better than everyone else and that the economy would
expand by between 2.5 per cent and 3 per cent in 2009, all of which would be underpinned by ‘monetary discipline’ and
‘fiscal discipline.’ According to the International Monetary Fund, Britain’s economy is forecast to shrink by 2.8 per cent
this year, compared with 1.5 per cent in the U.S., 2 per cent in the eurozone and 2.5 per cent in Japan. Oh dear!
The Americans are fond of expressions like, ‘Never give a sucker an even break’ and ‘Always kick a man when he’s down.
If you can’t, what chance have you got when he’s standing up?’ I was reminded of suchlike expressions when reading a
farrago of nonsense from Jim Rogers, the iconoclastic co-founder of the Quantum hedge fund which famously broke the
Bank of England and forced sterling out of the Exchange Rate Mechanism in 1992. The pound, he says, has no
underpinning and should fall against the dollar and the euro and reflects the UK’s dire economic situation: ‘It is simple.
The UK has nothing left to sell.’ Mr Rogers says that the two pillars of support for sterling have been North Sea oil and the
City of London. But just as North Sea oil is running out, so London’s standing as a financial centre is set to suffer: ‘I don’t
think that there is a sound bank now. At least if there is one I don’t know about it. The City of London is finished, the
financial centre of the world is moving east. All the money is in Asia. Why would it go back to the west?’ asks Mr
Rogers. He goes on to allege that the UK housing market is in a worse state than that of the US and that our economy is in
worse shape economically than the eurozone. ‘If the UK discovers more oil, I might change this view,’ he says ‘but I don’t
see that happening’.
5
Athelney Trust plc
CHAIRMAN’S STATEMENT AND BUSINESS REVIEW
(CONTINUED)
Where do I start with my rebuttal? Well, certainly the UK has been a net importer of oil for the last four years and any
new finds will be in deep waters and of medium size rather than the gushers of the past. The rest of what he says is, in my
opinion, complete balderdash (origin 16th Century, meaning an incongruous mixture of alcohol such as beer and wine).
Take the US housing market, which is about to suffer its second great shock with the re-setting of the so-called Alt-A
mortgages. He is not the first person to think that the City of London is all about banking – what about insurance,
stockbroking, fund management, ship broking and foreign exchange broking for a start? The UK is the world’s sixth
largest manufacturer with strengths in aerospace, defence, pharmaceuticals, scientific instruments and expensive audio
systems. Manufacturing accounts for 13 per cent of UK output, which is roughly in line with France and the US, but if
support services at present outsourced, all the way from legal work to cleaning, were ‘added back’ together with design and
development, it would add several percentage points to the figure. Rolls-Royce is a world-class engineer with an operations
centre that tracks electronically the performance of every single engine in the air. What about some of our other strengths
such as law, accountancy and consultancies covering so many trades and professions like civil engineering, building and
quantity surveying, facilities management and logistics?
For fear of boring you, I shall stop now. The man has obviously ‘shorted’ sterling again and wants to make a quick buck.
But you and I both know that there is very little substance to what he is saying. We have a difficult 2009 and 2010 ahead
but we will be back with a new government and new ideas that will surprise Mr Rogers and all his friends.
Results
Gross Revenue increased by 2.9 per cent compared to 2007. A breakdown of the companies paying dividends is given
below:
Companies paying dividends
Companies sold (therefore no true comparison)
Companies purchased (therefore no true comparison)
Increased total dividends in the year
Reduced total dividends in the year
No change in dividend
Corporate Activity
Number
80
11
14
45
5
5
Three of our companies were taken over for cash: Broker Network Holdings; Financial Objects and Gibbs &Dandy
producing a profit of 285 per cent, 166 per cent and 648 per cent respectively.
During the year the Company incurred actual realised capital losses arising on the sale of investments in the sum of
£88,385.
Portfolio Review
Holdings of Gaming VC, Hill and Smith, Interior Services Group, Nationwide Accident Repair, Victoria and Vitec were all
purchased for the first time. Acertec, Ambrian Capital, Belgravium Technologies, Blue Oar, Character Group, Colliers
CRE, Davenham Group, Dowgate Capital, Enterprise Inns, Flying Brands, International Greetings, Litho Supplies,
Lookers, LSL Property Services, Media Square, SCS Upholstery, Somero Enterprises and Trifast were all sold. In addition,
a total of nine holdings were top-sliced to provide capital for the new purchases.
Dividend
The Board is pleased to recommend an increased annual dividend of 4.7p per ordinary share (2008: 3.5p). This represents
an increase of 34.3 per cent over the previous year. Subject to shareholder approval at the Annual General Meeting on 6
May 2009, the dividend will be paid on 8 May 2009 to shareholders on the register on 14 April 2009.
6
Athelney Trust plc
CHAIRMAN’S STATEMENT AND BUSINESS REVIEW
(CONTINUED)
Update
The unaudited NAV at 28 February 2009 was 91.7p whereas the share price on the same day stood at 97.5p. Further
updates can be found on www.athelneytrust.co.uk
Outlook
I look into my crystal ball with some trepidation, after all, John Kenneth Galbraith, the economist, once said, ‘There are
two classes of forecasters: those that don’t know and those that don’t know they don’t know.’ I expect the economy to
contract by 3.5 per cent in 2009 and show no growth in 2010. Lower mortgage payments coupled with falling house prices
will result in minimal retail price inflation – the average house to ‘bottom’ at £140,000 compared with £163,000 at present.
Weak economic conditions will result in a sharp increase in unemployment with the number of people in work falling by
1.5 million over the next two years and the unemployment rate rising to 8 per cent. UK company profits and dividends are
likely to fall by 25 per cent this year with the banks and mining companies being the worst affected at, perhaps, 50-60 per
cent down on 2008. Following the heavy fall in markets last year, I am expecting a decent bounce some time in 2009
with small caps finishing the year 12-17 per cent up on 2008. And if the Bank of England continues with quantitive
easing, begins credit easing and the Treasury sets up a bad bank, then the outcome could be better than that.
H.B. Deschampsneufs
Chairman
7
Athelney Trust plc
CORPORATE GOVERNANCE STATEMENT
Combined Code
The Board is committed to achieving and demonstrating high standards of Corporate Governance as set out in the
Combined Code on Corporate Governance published in June 2006. The Board considers that it has complied with all the
provisions of the Combined Code except in matters identified and explained below.
The Board also confirms that, to the best of its knowledge and understanding, procedures were in place to meet the
requirements of the Combined Code relating to internal controls throughout the year under review. This statement
describes how the principles of the Combined Code have been applied in the affairs of the company.
The Company has not complied with the provisions of the Combined Code in respect of the following:
• Due to the size of the Board, formal performance evaluations of the Chairman, the Board, its committees
and individual Directors are not undertaken. Instead it is felt more appropriate to address matters as and
when they arise.
• Due to the size of the Board, it is felt inappropriate to appoint a senior independent non-executive
director.
• All the Directors have service contracts but no limit has been imposed on the overall length of service,
however all Directors are required to retire and, if appropriate, seek re-election at least every three years.
The recommendation of the Code is for fixed term renewable contracts.
• The Company has just one employee, other than Board members, the Company Secretary, whose line of
communication in relation to whistle-blowing is to the Chairman of the Company.
• The Company does not have a Nominations Committee, as a Board of only three Directors who liaise
continuously throughout the year and are aware of their obligations to consider recruitment of further
directors as and when the occasion occurs.
The Board
The Board currently comprises:
Robin Boyle, Managing Director
Hugo Deschampsneufs, Chairman (Non-executive)
David Horner, Non-executive
The two non-executive directors are members of the audit committee and the remuneration committee, David Horner being
Chairman of each committee.
Board responsibilities and relationship with Investment Manager
The Board is responsible for the investment policy and strategic and operational decisions of the Company and for ensuring
that the Company is run in accordance with all regulatory and statutory requirements. These matters include:
• The maintenance of clear investment objectives and risk management policies, changes to which require Board
approval;
• The monitoring of the business activities of the Company, including investment performance and annual
budgeting; and
• Review of matters delegated to the Investment Manager and Company Secretary.
8
Athelney Trust plc
CORPORATE GOVERNANCE STATEMENT
(CONTINUED)
The Investment Manager ensures that Directors have timely access to all relevant management and financial information to
enable informed decisions to be made and contacts the Board as required for specific guidance. The Company Secretary
and Investment Manager prepare monthly reports for Board consideration on matters of relevance, for example current
valuation and portfolio changes, dividend comparisons with previous years, cash availability and requirements and a
breakdown of shareholdings by listing and sector. The Board takes account of Corporate Governance best practice.
In consequence of being a company with only three Directors, a Directors’ and Officers’ Liability Insurance policy has not
been arranged but is a matter constantly under review by the Board.
Committees of the Board
The Board has appointed a number of Committees as set out below to which certain Board functions have been delegated.
Each of these Committees has formal written terms of reference, which clearly define their responsibilities and incorporate
the best practice recommendation and requirements of the Combined Code.
Board Membership
At the year end the Board consisted of three Directors. The Directors believe that the Board has the balance of skills,
experience, ages and length of service to enable it to provide effective leadership and proper governance of the Company.
The Directors possess a range of business and financial expertise relevant to the direction of the Company and consider that
they commit sufficient time to the Company’s affairs. Brief biographical details of the Directors can be found on page 2.
The Directors of the Company meet at regular Board Meetings, held at least once a quarter and additional meetings and
telephone meetings are arranged as necessary. During the year to 31 December 2008, the Board met eight times and all
Directors were present at all Board Meetings.
Chairman and Senior Independent Director
The Chairman, Mr Hugo Deschampsneufs, is independent. He considers himself to have sufficient time to commit to the
Company’s affairs. Given the size and nature of the Board it is not considered appropriate to appoint a senior independent
director.
Directors’ Independence
In accordance with the Listing Rules for investment entities, the Board has reviewed the status of its individual Directors
and the Board as a whole. The non-executive Directors are considered by the Board to be independent and free of any
business or other relationship which could interfere with the exercise of their independent judgement.
In accordance with the terms of the Articles of Association, one-third of Directors will retire by rotation at the forthcoming
Annual General Meeting and no Director shall serve a term of more than three years before re-election. The Board has
reviewed the appointment of Mr Robin Boyle who is retiring at the forthcoming Annual General Meeting and recommends
that shareholders vote for him as it believes his performance to be effective, that he demonstrates commitment to his role
and has actively contributed throughout the year.
Audit Committee
The Audit Committee comprises the independent Directors, with David Horner as Chairman. The Committee met twice
during the year ended 31 December 2008. Both Committee members were present. It is intended that the Committee will
meet at least once a year, to approve the Company’s Annual Report and Accounts.
9
Athelney Trust plc
CORPORATE GOVERNANCE STATEMENT
(CONTINUED)
The primary responsibilities of the Audit Committee are: to review the effectiveness of the internal control environment of
the Company and monitor adherence to best practice in corporate governance; to make recommendations to the Board in
relation to the re-appointment of the Auditors and to approve their remuneration and terms of engagement; to review and
monitor the Auditors’ independence and objectivity and the effectiveness of the audit process and to provide a forum
through which the Company’s Auditors report to the Board. The Audit Committee also has responsibility for monitoring
the integrity of the financial statements and accounting policies of the Company and for reviewing the Company’s financial
reporting and internal control procedures. Committee members consider that individually and collectively they are
appropriately experienced to fulfil the role required.
The Audit Committee has direct access to the Company’s Auditors, Clement Keys Chartered Accountants. A formal
statement of independence is received from the external auditors each year.
The Chairman of the Audit Committee will be present at the Annual General Meeting to deal with any questions relating to
the accounts.
The Committee met twice during the year.
Remuneration Committee
The Remuneration Committee comprises Mr Hugo Deschampsneufs and Mr David Horner. Mr Horner is Chairman. The
Committee will meet as necessary to determine and approve Directors’ fees, following proper consideration of the role that
individual Directors fulfil in respect of Board and Committee responsibilities, the time committed to the Company’s affairs
and remuneration levels generally within the Investment Trust Sector.
Under Listing Rule 15.6.6, the Code principles relating to directors’ remuneration do not apply to an investment trust
company other than to the extent that they relate specifically to non-executive directors. Detailed information on the
remuneration arrangements can be found in the Directors’ remuneration report on pages 19 to 20 and in note 4 to the
financial statements.
The Committee met three times during the year and both committee members were present at all three meetings.
Company Secretary
The Company Secretary, John Girdlestone FCA, is responsible for ensuring that Board and Committee procedures are
followed and that applicable regulations are complied with. The Secretary also ensures timely delivery of information and
reports and that the statutory obligations of the Company are met.
Independent Professional Advice
There is an agreed procedure for Directors to seek independent professional advice if necessary at the Company’s expense.
Institutional investors – use of voting rights
The Investment Manager and Managing Director, Mr Robin Boyle, in the absence of explicit instruction from the Board, is
empowered to exercise discretion in the use of the Company’s voting rights.
Going Concern
After due consideration, the Directors have concluded that the Company has adequate resources to continue in operational
existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the
financial statements.
10
Athelney Trust plc
CORPORATE GOVERNANCE STATEMENT
(CONTINUED)
Internal control review
The Board is responsible for establishing and maintaining the Company’s systems of internal control and for reviewing
their effectiveness.
Adequate internal controls are in place for identifying, evaluating and managing risks faced by the Company. This process,
together with key procedures established with a view to providing effective financial control, has been in place for the full
financial year and up to the date the financial statements were approved.
Internal control assessment process
The Directors acknowledge their responsibility for the Company’s system of internal controls and for reviewing its
effectiveness on a regular basis. The system of internal controls is designed to manage rather than eliminate risk and can
only provide reasonable but not absolute assurance against material misstatement or loss. This responsibility covers the
key business, operational, compliance and financial risks facing the company.
The procedures in place ensure that consideration is given regularly to the nature and extent of the risks facing the
Company and that they are being actively monitored. Where changes in risk have been identified during the year they also
provide a mechanism to assess whether further action is required to manage the risks identified. The Board confirms that
these procedures have been in place throughout the Company’s financial year, are operating effectively and continue to be
in place up to the date of approval of this Report.
Internal Audit
The company does not have an internal audit function. The day-to-day management functions are dealt with by the
Managing Director, Mr Robin Boyle, and Company Secretary, Mr John Girdlestone, where each is aware of the daily
undertakings of the other. The Board as a whole receives regular monthly reports clearly setting out the transactions of that
month.
The Audit Committee carries out an annual review of the need for an internal audit function. The Committee continues to
believe that the compliance and internal control systems and the internal audit function provided by the Investment
Manager and Company Secretary give sufficient assurance that a sound system of internal control, which safeguards
shareholders’ investment and the Company’s assets, is maintained. An internal audit function, specific to the trust, is
therefore considered unnecessary.
Dialogue with Shareholders
The Board place great importance on communication with shareholders and all Directors are available to enter into
dialogue with shareholders. Major shareholders of the Company are offered the opportunity to meet with the independent
non-executive Directors of the Board to ensure that their views are understood. The Annual General Meeting provides a
forum for communication with all shareholders, who are encouraged to attend and vote. During the AGM, the Board,
including the Investment Manager, are available to discuss issues affecting the Company and shareholders have the
opportunity to address questions to them.
The Annual and Half Yearly Reports of the Company are prepared by the Board and its advisers to present a full and
readily understandable review of the Company’s performance. Copies are available for downloading from the Company’s
website www.athelneytrust.co.uk and on request from the Company Secretary on 01326 378288. Copies of the Annual
Report are mailed to shareholders who have requested paper copies.
Voting Policy
The Company has given discretionary voting powers to the Investment Manager, Mr Robin Boyle. The Manager votes
against resolutions he believes may damage shareholders’ rights or economic interests.
11
Athelney Trust plc
INVESTMENT AND PORTFOLIO ANALYSIS AT 31 DECEMBER 2008
Aerospace and defence
Aero Inventory
Stock
Chemicals
Construction and materials
Umeco
Treatt
Clarke (T)
Galliford Try
Renew Holdings
Electronic and electrical equipment
XP Power Ltd
Food and beverages
Finsbury Food Group
General financial
Nichols
Shepherd Neame "A"
Wynnstay Group
Albemarle & Bond
Holding
14,000
13,750
10,500
18,000
38,000
35,000
20,000
50,000
13,050
3,900
25,000
15,000
Arbuthnot Banking Group
10,000
Cost
(£)
Current
Price
(p)
SECTOR
Value
(£)
£
%
43,937
53,951
24,605
19,938
14,143
31,180
45,885
25,283
24,415
11,473
22,348
14,999
34,134
228
31,955
250
34,375
66,330
197
20,685
20,685
4.00%
1.25%
110
19,800
32
12,160
45
15,750
47,710
129
25,800
25,800
2.88%
1.56%
11
5,500
200
26,100
670
26,142
158
39,500
97,242
5.87%
200
30,000
255
25,500
Camellia
1,200
28,749
4,950
59,400
Charles Taylor Consulting
8,000
19,021
20,169
32,817
23,901
19,541
45,289
36,212
16,430
36,366
33,940
11,888
4,300
32,930
21,903
9,958
30,788
22,317
22,946
6,787
15,908
25,053
29,787
16,269
23,948
27,465
35,408
8,022
22,012
21,009
31,807
6,701
6,692
250
20,000
125
31,250
15
30,000
235
18,800
40
24,490
66
24,200
263,640
38
28,500
28,500
15.91%
1.72%
32
7,680
23
8,395
115
28,750
44,825
2.70%
135
14,850
1,040
72,800
200
40,000
162
32,350
600
24,000
233
37,280
221,280
13.35%
237
42,660
345
31,050
360
28,800
102,510
210
36,750
36,750
6.19%
2.22%
18
5,400
50
10,500
27
7,830
24
8,400
77
20,020
55
12,100
64,250
685
61,650
61,650
3.88%
3.72%
2,300
40,250
300
12,000
52,250
3.15%
160
27,200
48
5,760
130
71,500
104,460
6.30%
Jarvis Securities
Park Group
S & U
Tenon Group
Vantis
Tristel
Healthcare equipment and services
House, leisure and personal goods
Havelock Europe
Smallbone
Victoria
Industrial engineering
Gooch & Housego
Industrial transportation
Insurance
Media
Goodwin
Hill & Smith
Severfield-Rowen
Slingsby (H.C)
Vitec
Braemar Shipping
Clarkson
Fisher (James)
Avesco
Chime Communications
Creston
Huntsworth
M&C Saatchi Plc
Quarto Group Inc Com
Personal Group Holdings
17,500
Pharmaceuticals and biotechnology
Genus
Real estate
Retailers
Mountview Estates
Smart (J) & Co.
H & T Group
Mallett
Stanley Gibbons
25,000
200,000
8,000
62,000
36,667
75,000
24,000
36,500
25,000
11,000
7,000
20,000
20,000
4,000
16,000
18,000
9,000
8,000
30,000
21,000
29,000
35,000
26,000
22,000
9,000
1,750
4,000
17,000
12,000
55,000
12
Athelney Trust plc
INVESTMENT AND PORTFOLIO ANALYSIS AT 31 DECEMBER 2008
(CONTINUED)
Cost
(£)
Current
Price
(p)
SECTOR
Value
(£)
£
%
27,662
42,424
7,401
25,204
37,194
11,707
15,857
8,807
21,150
31,591
27,525
14,074
30,480
17,434
11,052
40,533
9,898
40,605
£
£
£
£
79
39,500
107
125
17
85
95
57
16
240
123
25,948
17,500
16,500
25,500
38,000
5,130
2,000
28,800
30,750
55
27,500
196
31,360
288,488
17.4%
57
15,675
195
29,250
5
5,800
168
442
31,126
81,851
4.94%
22,100
90
27,000
49,100
2.96%
100%
1,657,321
58,655
-
1,715,976
1,802,802
Support services
Stock
Dawson Holdings
Interior Services Group
Latham (James)
Macfarlane Group
Nationwide Accident Repair
N.W.F Group
OPD Group
Prime People
RWS Holdings
VP
Waterman Group
WSP Group
Technology software and services
FDM Group
Travel and leisure
Group NBT
Pennant International
Phoenix IT
Air Partner
Gaming VC
Portfolio Value
Net Current Assets
Deferred Tax
TOTAL VALUE
Shares in issue
Audited NAV
Holding
50,000
24,250
14,000
100,000
30,000
40,000
9,000
12,500
12,000
25,000
50,000
16,000
27,500
15,000
116,000
18,500
5,000
30,000
95.2p
13
Athelney Trust plc
INVESTMENT AND PORTFOLIO ANALYSIS AT 31 DECEMBER 2008
(CONTINUED)
Portfolio by Sector
4.94%
2.96%
17.4%
17.41%
6.30%
3.15%
3.72%
4.00% 1.25%
2.88%
1.56%
5.87%
15.91%
1.72%
2.70%
3.88%
2.22%
6.19%
13.35%
Aerospace and defence
Construction and materials
Food and beverages
Healthcare equipment and services
Industrial engineering
Insurance
Pharmaceuticals and biotechnology
Retailers
Technology softw are and services
Chemicals
Electronic and electrical equipment
General financial
House, leisure and personal goods
Industrial transportation
Media
Real Estate
Support Services
Travel and leisure
Portfolio by Listing
1.58%
48.15%
50.27%
Full
AIM
Plus
14
REPORT OF THE DIRECTORS OF
Athelney Trust plc
The directors present their report and audited financial statements of the Company for the year ended 31 December 2008.
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 and Business Review on pages 3 to 7.
Environmental Issues
The Board has taken steps to reduce any adverse impact on environmental issues and will continue to address this
important matter.
Social and Community Issues
The Company has only two employees and, as far as the Board is aware, no issues exist in respect of social or community
issues.
Principal Risks and 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.
The Company’s assets consist mainly of listed securities and it principal risks are therefore market-related. The Company
is also exposed to currency risk in respect of a small number of investments held in overseas markets. More detailed
explanations of these risks and the way which they are managed are contained in note 16 to the accounts.
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:
H. Deschampsneufs
R.G. Boyle
D.A. Horner
31 December 2008
78,038
443,970
20,000
1 January 2008
78,038
443,970
20,000
H.B. Deschampsneufs’ interest includes 19,163 (2007: 19,163) shares held in his Self-Invested Personal Pension. R.G.
Boyle’s interest includes 16,970 (2007: 16,970) shares held in his Self-Invested Personal Pension. D.A. Horner’s interest
includes 20,000 (2007: 20,000) shares owned by a pension fund in which D.A. Horner has an interest. There have been no
changes in the above Directors’ interests up to 24 March 2009.
The Company does not have any contract of significance subsisting during the year, with any other company in which a
Director is or was materially interested.
Statement of Directors’ Responsibilities
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable
law and regulations.
15
REPORT OF THE DIRECTORS OF
Athelney Trust plc
(CONTINUED)
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors
have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards and applicable law). The financial statements are required by law to give
a true and fair view of the state of affairs of the company and of the result for the company for that period.
In preparing those financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
-
- make judgements and estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures
disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company
will continue in business.
-
The directors are responsible for keeping proper accounting records which 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 1985. 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 the maintenance and integrity of the corporate and financial information included on the
company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Changes to the Articles of Association
At an Extraordinary General Meeting on 21 August 2008, the shareholders adopted revised Articles.
Authority to Repurchase the Company’s Ordinary Shares
At an Extraordinary General Meeting of the Company held on 21 August 2008, it was resolved that the Company be
authorised to purchase in the market up to 270,240 Ordinary Shares (14.99 per cent of its Ordinary Share Capital in issue at
the time). The Company has not entered into any contracts since the year end to purchase any of its own shares.
Move from AIM to a Full Listing
The Company moved to a Full Listing on 24 September 2008 (see note 7, page 31).
Capital Structure
At 31 December 2008 the Company’s capital structure consisted of 1,802,802 Ordinary Shares of 25p each (2007
1,802,802).
Dividends
The Ordinary Shares carry a right to receive dividends which are declared from time to time by an Ordinary Resolution of
the Company (up to the amount recommended by the Directors) and to receive any interim dividends which the Directors
may resolve to pay.
Capital Entitlement
On a winding up, after meeting the liabilities of the Company, the surplus assets will be paid to ordinary shareholders in
proportion to their shareholdings
16
REPORT OF THE DIRECTORS OF
Athelney Trust plc
(CONTINUED)
Voting
On a show of hands, every ordinary shareholder present in person or by proxy has one vote and on a poll every ordinary
shareholder present in person has one vote for every share he/she holds and a proxy has one vote for every share in respect
of which he/she is appointed.
Information on the deadlines for proxy appointments can be found on pages 39 and 40.
Results and Dividends
The return on ordinary revenue activities before dividends for the year is £99,603 (2007: £70,528) as detailed on page 23.
It is recommended that an annual dividend of 4.7p (2008: 3.5p) per ordinary share be paid.
Significant Shareholders
At 30 March 2009, the Directors had been notified of the following major shareholdings in the Company:
Mr R.G. Boyle
Mr G.W. & Mrs D.J. Whicheloe
NS Salvesen and Salvesen Family Trust
Mr H.D. Deschampsneufs
Mrs E. Davison
Mr J. Sutton
Mr D.C. & Mrs B.I. Mattey
Tax Status
Ordinary Shares
443,970
114,000
87,500
78,038
75,000
60,000
60,000
% of issue
24.63
6.32
4.85
4.32
4.16
3.33
3.33
The Directors have considered the Close Company Tax Status of the Company and do not believe that the Company is a
Close Company.
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 invoiced trade creditors outstanding at the end of the year, together with accrued expenses, all
appearing as creditors in the balance sheet.
Disclosure of Information to Auditors
Each of the persons who are directors at the time when this Directors’ Report is approved has confirmed that:
-
-
so far as that each Director is aware, there is no relevant audit information of which the Company’s auditor is
unaware, and
that each Director has taken all the steps that ought to have been taken as a Director in order to be aware of any
information needed by the Company’s auditor in connection with preparing its report and to establish that the
Company’s auditor is aware of that information
17
REPORT OF THE DIRECTORS OF
Athelney Trust plc
(CONTINUED)
Auditors
A resolution proposing that Clement Keys be re-appointed as auditors of the Company will be put to the annual general
meeting.
Waterside Court
Falmouth Road
Penryn
Cornwall
TR10 8AW
BY ORDER OF THE BOARD
J. Girdlestone
Secretary
30 March 2009
18
Athelney Trust plc
DIRECTORS’ REMUNERATION REPORT
The Board has prepared this Report in accordance with Schedule 7A to the Companies Act 1985. An Ordinary Resolution will be put to
the members to approve the Report at the forthcoming Annual General Meeting
The law requires the Company’s Auditors to audit certain disclosures provided. Where disclosures have been audited, they are indicated
as such. The Auditors’ opinion is included in their report on pages 21 and 22.
Remuneration Committee
The Company has a Remuneration Committee comprising Mr Hugo Deschampsneufs and Mr David Horner. Mr Horner chairs the
meetings. The Committee considers and approves Directors’ remuneration.
Policy on Directors’ Fees
The Board’s policy is that remuneration of non-executive Directors should reflect the experience of the Board as a whole and is
determined with reference to comparable organisations and appointments. It is intended that this policy will continue for the year ended
31 December 2009.
The fees of the non-executive Directors are determined within the limits set out in the Company’s Articles of Association. Directors are
not eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits.
Directors’ Service Contracts
All the Directors have a service contract with the Company. The terms of their appointment provide that a Director shall retire and be
subject to re-election at the first annual general meeting after their appointment and at least every three years after that.
The Managing Director Mr Robin Boyle has a service contract commencing 21 August 2008 which provides for retirement by the
Company giving one year’s written notice and by Mr Robin Boyle giving six months’ written notice.
The service contracts for the two non-executive Directors, Mr Hugo Deschampsneufs and Mr David Horner, provide for their contract to
continue until the Annual General Meeting following the appointment and for renewal at each subsequent Annual General Meeting.
Their service contracts commenced 21 August 2008 and 19 August 2008 respectively.
Company Performance
The graph below compares, for the five financial years ended 31 December 2008, the total return (assuming all dividends are reinvested)
to ordinary shareholders compared to the total shareholder return on a notional investment made up of shares in the component parts of
the AIM All-Share Index and Small Caps Index. The comparison is made between AIM All-Share and Small Caps. as the majority of
investment holdings by the Company are a constituent of one or the other of these two indices.
Athelney's Shareholder Return and NAV against Benchmarks of AIM All-Share and Small
Caps
(figures have been rebased to 100 at 31 December 2004)
180.00
160.00
140.00
120.00
100.00
80.00
60.00
40.00
20.00
-
Dec-04
Dec-05
Dec-06
Year End
Dec-07
Dec-08
NAV
Shareholder Return *
AIM All Share
Small Caps
*Assuming all dividends are reinvested
Past Performance is no guarantee of future performance.
19
Athelney Trust plc
DIRECTORS’ REMUNERATION REPORT
(CONTINUED)
Directors’ emoluments for the year (audited)
The Directors who served in the year received the following emoluments in the form of salaries:
Hugo Deschampsneufs (Chairman, non-executive)
Robin Boyle (Managing Director)
David Horner (Non-executive)
2008
£
2007
£
6,667
35,000
5,833
5,000
30,000
5,000
47,500 40,000
Approval
The Directors’ Remuneration Report was approved by the Board on 30 March 2009.
J. Girdlestone
Company Secretary
20
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
ATHELNEY TRUST PLC
We have audited the financial statements of Athelney Trust plc for the year ended 31 December 2008, which comprise the
Income statement, the Reconciliation of Shareholders Funds, the Balance Sheet, the Cash Flow Statement and the related
notes. These financial statements have been prepared under the accounting policies set out therein. We have also audited
the information in the Directors’ Remuneration Report that is described as being audited.
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 auditors’ report and for no other purpose. To the fullest extent permitted by the 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.
Respective responsibilities of directors and auditors
The Directors’ responsibilities for preparing the Annual report, the Directors’ Remuneration Report and the financial
statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally
Accepted Accounting Practice) are set out in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the financial statements and the part of the Directors’ Remuneration Report to be audited in
accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial
statements and the part of the Directors’ Remuneration Report to be audited have been properly prepared in accordance
with the Companies Act 1985. We also report to you whether, in our opinion, the information given in the Directors’
Report is consistent with the financial statements. This information includes specific information presented in the
Chairman’s Statement and Business Review that is cross referred from the Business Review section of the Directors’
Report.
In addition, we report to you if, in our opinion, 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 the information specified by law regarding
Directors’ remuneration and other transactions is not disclosed.
We review whether the Corporate Governance Statement reflects the Company’s compliance with the nine provisions of
the 2006 FRC Combined Code specified for our review by the Listing Rules of the Financial Services Authority, and we
report if it does not. We are not required to consider whether the Board’s statements on internal control cover all risks and
controls, or form an opinion on the effectiveness of the Company’s corporate governance procedures or its risk and control
procedures.
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 Directors of the Company, Chairman’s Statement and Business
Review, Corporate Governance Statement, Investment and Portfolio Analysis, Report of the Directors’, the unaudited part
of the Directors’ Remuneration Report, and Officers and Financial Advisers. We consider the implications for our report if
we become aware of any apparent misstatement or material inconsistencies with the financial statements. Our
responsibilities do not extend to any other information.
21
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
ATHELNEY TRUST PLC
(CONTINUED)
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) 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 and the part of the Directors’ remuneration Report to be audited. 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 and the part of the
Directors’ Remuneration Report to be audited 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 and the part of the Directors’ Remuneration Report to be audited.
Opinion
In our opinion:
•
•
•
the financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted
Accounting Practice, of the state of the Company’s affairs as at 31 December 2008 and net return for the year then
ended;
the financial statements and the part of the Directors’ Remuneration Report to be audited have been properly
prepared in accordance with the Companies Act 1985; and
the information given in the Directors’ Report is consistent with the financial statements.
Clement Keys
Chartered Accountants
Registered Auditors
39/40 Calthorpe Road
Edgbaston
Birmingham
B15 1TS
30 March 2009
22
Athelney Trust plc
INCOME STATEMENT
(INCORPORATING THE REVENUE ACCOUNT)
31 December 2008
31 December 2007
Note Revenue
Capital
Total
Revenue
Capital
Total
Losses on investments
Income
Investment
Management expenses
Other expenses
Exceptional items
Net return on ordinary
activities before taxation
Taxation
9
2
3
3
7
5
Net return on ordinary
activities after taxation 14
£
£
£
£
£
£
-
(1,482,105)
(1,482,105)
-
(362,778)
(362,778)
123,951
-
123,951
120,488
-
120,488
(4,466)
(41,700)
(46,166)
(9,893)
(28,979)
(38,872)
(19,882)
(44,947)
(64,829)
(52,362)
-
(128,782)
(128,782)
-
-
-
(52,362)
-
99,603
(1,697,534)
(1,597,931)
58,233
(391,757)
(333,524)
-
256,283
256,283
12,295
81,248
93,543
99,603
(1,441,251)
(1,341,648)
70,528
(310,509)
(239,981)
Net return per
ordinary share
6
5.5p
(79.9)p
(74.4)p
3.9p
(17.2)p
(13.3)p
Dividend per ordinary share
paid during the year
3.5p
3.25p
The total 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 14.
A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the
above Statement.
The notes on pages 27 to 35 form part of these financial statements.
23
Athelney Trust plc
RECONCILIATION OF SHAREHOLDERS’ FUNDS
For the Year Ended 31 December 2008
Called-up
Share
Capital
£
450,700
Share
Premium
£
405,605
-
-
-
-
-
-
-
-
-
-
-
-
Capital
reserve
realised
£
892,893
(88,385)
Capital
reserve Revenue
reserve
£
132,441
unrealised
£
1,239,083
Total
Shareholders’
Funds
£
3,120,722
-
(1,393,720)
-
-
(88,385)
(1,393,720)
(215,429)
-
-
-
256,283
-
-
-
-
99,603
(63,098)
(215,429)
256,283
99,603
(63,098)
450,700
405,605
589,079
101,646
168,946
1,715,976
For the Year Ended 31 December 2007
Called-up
Share
Capital
£
450,700
Share
Premium
£
405,605
-
-
-
-
-
-
-
-
-
-
-
-
Capital
reserve Revenue
reserve
£
120,504
unrealised
£
1,723,399
Total
Shareholders’
Funds
£
3,419,294
Capital
reserve
realised
£
719,086
239,645
-
(602,423)
(28,979)
(36,859)
-
-
118,107
-
-
-
-
70,528
(58,591)
-
-
239,645
(602,423)
(28,979)
81,248
70,528
(58,591)
-
-
450,700
405,605
892,893
1,239,083
132,441
3,120,722
Balance at 1 January 2008
Net losses on realisation
of investments
Decrease in unrealised
appreciation
Expenses allocated to
capital
Taxation
Profit for the year
Dividend paid in year
Shareholders’ Funds at
31 December 2008
Balance at 1 January 2007
Net gains on realisation
of investments
Decrease in unrealised
appreciation
Expenses allocated to
capital
Taxation
Profit for the year
Dividend paid in year
Shareholders’ Funds at
31 December 2007
The notes on pages 27 to 35 form part of these financial statements.
24
Athelney Trust plc
BALANCE SHEET AS AT 31 DECEMBER 2008
Note
Fixed assets
Investments at fair value through profit and
loss
Current assets
Debtors
Cash at bank and in hand
9
10
Creditors: amounts falling due within one
year
11
Net current assets
Total assets less current liabilities
Provisions for liabilities and charges
12
Net assets
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
Net Asset Value per share
13
14
14
14
14
17
2008
£
2007
£
1,657,321
3,167,818
65,090
26,038
91,128
(32,473)
58,655
1,715,976
-
1,715,976
450,700
405,605
589,079
101,646
168,946
1,715,976
95.2p
205,773
45,335
251,108
(41,921)
209,187
3,377,005
(256,283)
3,120,722
450,700
405,605
892,893
1,239,083
132,441
3,120,722
173.1p
Approved by the board of directors on 30 March 2009
……………………………….
R.G. Boyle
The notes on pages 27 to 35 form part of these financial statements
25
Athelney Trust plc
CASHFLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2008
Net cash inflow/(outflow) from operating
activities
Taxation
Corporation tax paid
Financial Investment
Purchases of investments
Sale of investments
Net cash inflow from Financial Investment
Equity dividends paid
(Decrease)/increase in cash in the year
Reconciliation of operating net revenue to
net cash inflow from operating activities
Revenue on ordinary activities before taxation
Decrease / (increase) in debtors
Increase in creditors
Investment management expenses charged to
capital
Other expenses charged to capital
Exceptional items charged to capital (note 7)
Reconciliation of net cashflow to movement
in net debt
Cash at bank and in hand
£
2008
£
39,973
(24,564)
£
2007
£
(69,440)
(34,916)
(975,591)
1,003,983
(1,247,174)
1,422,970
28,392
(63,098)
(19,297)
£
99,603
140,683
15,116
(41,700)
(44,947)
(128,782)
39,973
175,796
(58,591)
12,849
£
58,233
(100,170)
1,476
-
-
(28,979)
(69,440)
Net funds at
31.12.2007
£
45,335
Cashflow
£
(19,297)
Net funds at
31.12.2008
£
26,038
The notes on pages 27 to 35 form part of these financial statements
26
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
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 the Companies Act 1985, applicable UK accounting
standards and the provisions of the Statement of Recommended Practice “Financial Statements of Investment
Trust Companies” (SORP) issued in January 2003, as revised December 2005.
1.2 Income
Income from investments including taxes deducted at source is recognised when the right to the return is
established (normally the ex-dividend date). UK dividend income is reported net of tax credits in accordance
with FRS 16 “Current Tax”. Interest is dealt with on an accruals basis.
1.3 Investment Management Expenses
Of the two directors involved in investment management, 10% of their salaries have been charged to revenue
and the other 90% to capital. All other investment management expenses have been charged to capital. The
Board propose continuing this basis for future years.
1.4 Other Expenses
Expenses (including VAT) and interest payable are dealt with on an accruals basis and charged through the
Revenue Account, with a greater allocation to capital than previously. The Board consider this to be a fairer
distribution of the costs incurred.
1.5 Investments
Listed investments comprise those listed on the Official List of 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.
Investments have been classified as “fair value through profit and loss” upon initial recognition.
Subsequent to initial recognition, investments are measured at fair value with changes in fair value recognised
in the Income Statement.
Securities of companies quoted on a recognised stock exchange are valued by reference to their quoted bid
prices at the close of the year.
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.
27
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
1. Accounting Policies (continued)
1.7 Deferred Taxation
At the year end there is no provision for deferred taxation (2007: £256,283) as the Company had unrealised
net losses for Capital Gains Tax purposes. The Directors believe the Company satisfies all the conditions of a
Fully Listed Investment Company to ensure it has no liability to Corporation Tax on its Capital Gains in the
future.
1.8 Capital Reserves
Capital Reserve – Realised
Gains and losses on realisation 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
Bank interest
Other income
Total income
UK dividend income
UK listed investments
AIM investments
Other investments
2008
£
113,571
10,230
150
123,951
2008
£
56,920
55,707
944
113,571
2007
£
114,513
5,574
401
120,488
2007
£
43,164
70,188
1,161
114,513
28
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
3. Return on Ordinary Activities Before Taxation
The following amounts (inclusive of VAT) are included
within investment management and other expenses:
Directors’ remuneration:
- Services as a director
- Otherwise in connection with management
Auditors’ remuneration (also see note 7):
- Audit Services - Statutory audit
- Audit Services - Audit related regulatory reporting
- Further assurance services – Advice on accounting matters
Miscellaneous expenses:
- Other wages and salaries
- Nominated Adviser’s fees
- PR and communications
- Stock Exchange subscription
- Sundry investment management and other expenses
4. Employees
Costs in respect of directors:
Wages and salaries
Social security costs
Costs in respect of administrator:
Wages and salaries
Social security costs
Total:
Wages and salaries
Social security costs
Average number of employees:
Chairman
Investment
Administration
29
2008
£
12,500
35,000
7,665
999
1,840
17,170
10,406
6,285
7,961
11,169
110,995
2008
£
47,500
3,991
51,491
15,833
1,337
17,170
63,333
5,328
68,661
1
2
1
4
2007
£
10,000
30,000
7,200
910
862
10,620
5,711
10,759
6,831
8,341
91,234
2007
£
40,000
3,171
43,171
10,000
620
10,620
50,000
3,791
53,791
1
2
1
4
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
5. Taxation
Revenue
2008
Capital
Total
Revenue
2007
Capital
£
£
£
£
£
Total
£
(i) The tax charge for the year is based on the return for the year
Corporation tax for current
year
Tax relief on management
expenses charge to income
Deferred taxation
-
-
-
-
-
-
-
24,564
24,564
-
(256,283)
-
(256,283)
(12,295)
-
12,295
(118,107)
-
(118,107)
(256,283)
(256,283)
(12,295)
(81,248)
(93,543)
(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
(21 per cent). The differences are explained below:
Total return on ordinary activities before tax
(1,597,931)
(333,524)
2008
£
2007
£
Total return on ordinary activities multiplied by the average
small company rate of corporation tax 21% (2007: 20%)
(335,566)
Effects of:
UK dividend income not taxable
Revaluation of shares not taxable
Indexation relief for capital gains
Unrelieved management expenses
Losses carried forward
Other
Change in tax rate
Current tax charge for the year
(23,850)
292,681
(2,858)
48,225
21,545
(177)
-
-
(66,705)
(22,902)
120,485
(5,775)
-
-
(80)
(459)
24,564
There is no charge to UK Corporation Tax at 31 December 2008 as the Company has unrelieved management
expenses of £229,641 and £102,597 of capital losses for Corporation Tax purposes and which are available to be
carried forward to future years. These have not been recognised as a deferred tax asset because the Company is
not expected to generate taxable income in a future period in excess of the deductible expenses of the future
period and, accordingly, it is unlikely that the Company will be able to reduce future tax liabilities through the use
of existing surplus expenses.
30
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
5. Taxation continued
(iii) Factors affecting the tax charge in future years
At the appropriate time the Company will request approval from HM Revenue and Customs that all conditions
relevant to a fully listed investment trust have been satisfied and therefore the Company will not in future be liable
to Corporation Tax on any realised investment gains.
6. Return per Ordinary Share
The calculation of earnings per share has been performed in accordance with FRS 22 “Earnings Per Share”.
2008
2007
Attributable return on
ordinary activities after
taxation
£
Revenue
£
Capital
£
Total
£
Revenue
£
Capital
£
Total
99,603
(1,441,251)
(1,341,648)
70,528
(310,509)
(239,981)
Number of shares
1,802,802
1,802,802
Return per ordinary share
5.5p
(79.9)p
(74.4)p
3.9p
(17.2)p
(13.3)p
7. Exceptional Items
The exceptional item represents the total costs incurred by the Company in moving from AIM to a Full Listing.
Included in the total costs is an amount of £14,599 paid to the Company’s Auditors in connection with the
Company obtaining a Full Listing.
8. Dividend
Dividend in respect of 2008 of 3.5p (2007 – 3.25p) per share
63,098
2008
£
2007
£
58,591
Set out below is the total dividend payable in respect of the financial year, which is the basis on which the
requirements of Section 842 of the Income and Corporation Taxes Act 1988 are considered.
An annual dividend of 4.7p (2008 – 3.5p) per share amounting to a total of £84,732 (2008 - £63,098) is proposed
by the Board. The dividend proposed will not be accounted for until it has been approved at the Annual General
Meeting.
Revenue available for distribution
Proposed dividend in respect of financial year ended
31 December 2008
Undistributed Revenue Reserve
2008
£
99,603
(84,732)
14,871
31
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
9. Investments
Movements in year
Valuation at beginning of year
Purchases at cost
Sales - proceeds
- realised (losses)/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
PLUS
Gains on investment
Realised (losses)/gains on sales
Decrease in unrealised appreciation
2008
£
3,167,818
975,591
(1,003,983)
(88,385)
(1,393,720)
1,657,321
1,533,219
124,102
1,657,321
833,193
797,986
26,142
1,657,321
2008
£
(88,385)
(1,393,720)
(1,482,105)
2007
£
3,706,392
1,247,174
(1,422,970)
239,645
(602,423)
3,167,818
1,650,667
1,517,151
3,167,818
1,553,403
1,537,414
77,001
3,167,818
2007
£
239,645
(602,423)
(362,778)
The purchase and sales proceeds above include transaction costs of £3,176 (2007: £4,678) and £4,546 (2007:
£5,817) respectively.
10. Debtors
Amounts falling due within one year:
Investment transaction debtors
Other debtors
2008
£
59,148
5,942
65,090
2007
£
202,940
2,833
205,773
32
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
11. Creditors
Corporation tax
Social security and other taxes
Other creditors
Accruals and deferred income
12. Deferred Tax
2008
£
-
3,087
4,272
25,114
32,473
Tax on unrealised gains net of losses
Balance at beginning of year
Charge to the capital element of the
Statement of Total Return
Balance at end of year
2008
Provided
Not
Provided
£
-
-
£
-
-
2008
£
256,283
(256,283)
-
2007
Provided
£
256,283
256,283
2007
£
374,390
(118,107)
256,283
2007
£
24,564
6,938
159
10,260
41,921
Not
Provided
£
-
-
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.
13. Called Up Share Capital
Authorised
10,000,000 Ordinary Shares of 25p
Allotted, called up and fully paid
1,802,802 Ordinary Shares of 25p
2008
£
2007
£
2,500,000
2,500,000
450,700
450,700
33
Athelney Trust plc
FOR THE YEAR ENDED 31 DECEMBER 2008
NOTES TO THE FINANCIAL STATEMENTS
14. Reserves
Balance at 1 January 2008
Net losses on realisation of investments
Decrease in unrealised appreciation
Expenses allocated to capital
Taxation
Profit for the year
Dividend paid in year
Share
premium
account
£
405,605
-
-
-
-
-
-
2008
Capital
reserve
realised
£
892,893
(88,385)
-
(215,429)
-
-
Capital
reserve
unrealised
£
1,239,083
-
(1,393,720)
256,283
-
-
Revenue
reserve
£
132,441
-
-
-
-
99,603
(63,098)
Balance at end of year
405,605
589,079
101,646
168,946
15. 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
Shareholders' funds at end of year
16. Financial Instruments
2008
£
99,603
(63,098)
36,505
(1,441,251)
(1,404,746)
3,120,722
1,715,976
2007
£
70,528
(58,591)
11,937
(310,509)
(298,572)
3,419,294
3,120,722
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 purchase awaiting settlement. Short term
debtors and creditors are excluded from disclosure.
Fixed asset investments (see note 9) are valued at market bid price where available which equates to their fair
values. The fair values of all other assets and liabilities are represented by their carrying values in the balance
sheet.
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.
34
Athelney Trust plc
FOR THE YEAR ENDED 31 DECEMBER 2008
NOTES TO THE FINANCIAL STATEMENTS
16. Financial Instruments (continued)
Market Risk
Market risk arises from changes in interest rates, valuations awarded to equities, movements in prices and the
liquidity of financial instruments.
At the end of the year the Company’s portfolio was invested in UK securities with the exception of 2.36 per cent,
which was invested in overseas securities.
Liquidity Risk
Liquidity Risk is the risk that the Company may have difficulty in meeting obligations associated with financial
liabilities. The Company has no borrowings, therefore there is no exposure to interest rate changes.
The company is able to reposition its investment portfolio when required so as to accommodate liquidity needs.
17. Net Asset Value Per Share
The net asset value per share is based on net assets of £1,715,976 (2007: £3,120,722) divided by 1,802,802 (2007:
1,802,802) ordinary shares in issues.
Net asset value
2008
95.2p
2007
173.1p
35
Athelney Trust plc
OFFICERS AND FINANCIAL ADVISERS
Directors:
Secretary:
Registered Office:
H.B. Deschampsneufs (Chairman) Email: hugo@athelneytrust.co.uk
R.G. Boyle (Managing Director) Email: robin171@btinternet.com
D.A. Horner
Email: dah@chelvertonam.com
J. Girdlestone
Waterside Court
Falmouth Road
Penryn
Cornwall, TR10 8AW
Waterside Court
Falmouth Road
Penryn
Cornwall, TR10 8AW
Email: john@athelneytrust.co.uk
Tel: 01326 378 288
Website: www.athelneytrust.co.uk
Email: info@athelneytrust.co.uk
Tel: 01326 378 288
Company Number:
(Registered in England)
2933559
Stockbroker:
Auditor:
Banker:
Registrar:
Speirs & 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
Share Registrars Limited
Craven House
West Street
Farnham
Surrey, GU9 7EN
Email: wgd@speirsjeffrey.co.uk
Tel: 0141 248 4311
Email: mike.meakin@clementkeys.co.uk
Tel: 0121 456 4456
Email: enquiries@shareregistrars.uk.com
Tel: 01252 821 390
Public Relations
Consultants:
City Road Communications
42-44 Carter Lane
London, EC4V 5EA
Email: cityroad@cityroad.uk.com
Tel: 0207 248 8010
36
Athelney Trust plc
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the fifteenth Annual General Meeting of the Company will be held at the offices of
Dowgate Capital Advisers Limited, 46 Worship Street, London, EC2A 2EA on Wednesday 06 May 2009 at 4.30p.m. for
the following purposes:
As Ordinary Business
1. To receive and adopt the Company’s Accounts and the Report of the Directors and Auditors for the year ended 31
December 2008.
2. To declare an annual dividend of 4.7p per ordinary share. It is intended that dividend cheques in respect of the
dividend will be posted on Friday 08 May 2009 to all shareholders on the register of members at close of business
on Friday 14 April 2009.
3. To approve the Directors’ Remuneration Report for the year ended 31 December 2008.
4. To re-elect Mr R.G. Boyle as a Director of the Company.
5. To re-elect Mr H.B. Deschampsneufs as Director of the Company until the date of the next Annual General
Meeting.
6. To re-elect Mr D.A. Horner as a Director of the Company until the date of the next Annual General Meeting.
7. To re-appoint Clement Keys as Auditors and to authorise the Directors to fix their remuneration.
By Order of the Board
John Girdlestone
Secretary
30 March 2009
Registered Office: Waterside Court, Falmouth Road, Penryn, Cornwall, TR10 8AW
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 this 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 on any weekday
(Saturdays and public holidays excepted) at the Company’s Registered Office from the date of this Notice until
the date of the Meeting.
37
Athelney Trust plc
NOTES
38
(cid:6)
Athelney Trust plc
FORM OF PROXY
To be used at the Annual General Meeting to be held at 4.30pm on 06 May 2009
I/We ____________________________________________________________________________________
of ______________________________________________________________________________________
________________________________________________________________________________________
Being (a) shareholder(s) of Athelney Trust plc, hereby appoint the Chairman of the Meeting or (see Note (ii))
________________________________________________________________________________________
BLOCK
CAPITALS
PLEASE
as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at the
offices of Dowgate Capital Advisers Limited, 46 Worship Street, London, EC2A 2EA on Wednesday 06 May 2009 at
4.30p.m. (the “Meeting”), on the Ordinary Business to be submitted to the Meeting and at any adjournment thereof.
Please indicate with an X in the appropriate space how you wish your votes to be cast. To abstain from voting on any
item in the notice, select the “Vote Withheld” box. A vote withheld is not a vote in law, which means that the vote will
not be counted in the calculation of votes for or against the individual issue in respect of which voting is taking place.
If no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote
(or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the Meeting.
Ordinary Business
For
Against
Vote
withheld
1
2
3
4
5
6
7
To receive and adopt the accounts for the year ended 31 December 2008
To declare a dividend of 4.7p per Ordinary Share
To approve the Directors’ Remuneration Report for the year ended 31
December 2008
To re-elect Mr R.G. Boyle as a Director
To re-elect Mr H.B. Deschampsneufs as a Director until the date of the next
Annual General Meeting
To re-elect Mr D.A. Horner as a Director until the date of the next Annual
General Meeting
To re-appoint Clement Keys as Auditors and authorise the Directors to fix
the Auditors’ Remuneration
Signed_______________________________________________________Dated_________________________________
NOTES
(i)
As a shareholder of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend,
speak and vote at a general meeting of the Company. You can only appoint a proxy using the procedures set out
in these notes.
(ii)
If you wish to appoint as your proxy some person other than the Chairman of the Meeting please insert in block
capitals the full name of the person of your choice, delete the words “the Chairman of the Meeting” and initial the
39
(iii)
(iv)
(v)
(vi)
(vii)
alteration. A proxy need not be a shareholder of the Company but must attend the Meeting to represent you and
you are responsible for ensuring that they attend the Meeting and are aware of your voting intentions.
You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different
shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more
than one proxy, you must contact the Company Secretary at the Registered Office of the Company (Waterside
Court, Falmouth Road, Penryn, Cornwall, TR10 8AW).
To be entitled to attend and vote at the Meeting (and for the purpose of the determination by the Company of the
number of votes cast), shareholders must be registered in the Register of Members of the Company at 4.30p.m. on
14 April 2009 (or, in the event of any adjournment, 4.30p.m. on the date which is 48 hours before the time of the
adjourned meeting). Changes to the Register of Members after the relevant deadline shall be disregarded in
determining the rights of any person to attend and vote at the Meeting.
To be valid, this proxy form, together with the power of attorney or other authority (if any) under which it is
signed, or notarially certified copy of such power of attorney, must be deposited at the Registered Office of the
Company (at the address set out in note (iii) above) not later than 48 hours before the time appointed for the
Meeting.
In the case of a corporation, this proxy form must be executed either under seal or under the hand of an officer or
attorney duly authorised.
In the case of joint holders, the vote of the senior shareholder who tenders a vote will be accepted to the exclusion
of the votes of the other joint holders. Seniority will be determined by the order in which the name stands in the
Register of Members.
(viii) Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006
to enjoy information rights (a “Nominated Person”) may, under an agreement between him and the shareholder
by whom he was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the
Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he may,
under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
(ix)
Completion of this proxy form will not prevent a shareholder from attending the Meeting and voting in person
should he or she wish. If you have appointed a proxy and attend the Meeting in person, your proxy appointment
will be automatically terminated.
40