Annual Report
for the year ended 31 December 2009
COMPANY NUMBER: 2933559
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 Movements in Shareholders’ Funds
Balance Sheet
Cash Flow Statement
Notes to the Financial Statements
Officers and Financial Advisers
2
3 - 6
7 - 10
11 - 13
14 - 17
18 - 19
20 - 21
22
23
24
25
26 - 33
34
1
Athelney Trust plc
DIRECTORS OF THE COMPANY
The Directors of the Company are:
Mr Hugo Deschampsneufs, non-executive Chairman
Hugo Deschampsneufs, aged 64, 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. For the next 20 years, he 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 encompassed the disciplines of marketing and legal. He currently acts as advisor in
the leasing industry. 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 50, 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 65, he has spent the last forty one 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 have the pleasure of enclosing the results for the year ended 31 December 2009. The salient points are as follows:
• Audited Net Asset Value (“NAV”) was 127p per share (31 December 2008: 95.2p) an increase of 33.4 per cent.
• Gross Revenue decreased by 0.8 per cent to £122,963 (31 December 2008: £123,951).
• Revenue return per ordinary share was 5.3p, a decrease of 3.6 per cent (31 December 2008: 5.5p).
•
In respect of the year ended 31 December 2009 an Interim Dividend of 4.75p per share was approved for payment
on 01 April 2010.
Review of 2009
More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness: the
other, to total extinction. Let us pray we have the wisdom to choose correctly.
Woody Allen 1935- : Side effects (1980) ‘My Speech to the Graduates’
The air of immediate crisis is over. The patient is recovering but is still far too dependent on the drug of government
spending. The coming year (including the General Election campaign) will be dominated by a debate about how quickly
that support can be taken away. Two shocks have reduced the standard of living of Western economies: one is the terms-
of-trade shift. Thanks mainly to China, the prices of manufactured goods that rich countries sell have fallen – on the other
hand, raw materials prices to make those goods have risen. The other is the ‘leverage’ shock, in which the credit crisis has
stopped companies and households from borrowing to finance consumption. In response to the latter, governments have
deliberately taken on the debts of the private sector. In most cases, it is assumed that governments have an almost limitless
capacity to assume such burdens. But you can see welfare states as national Ponzi schemes in which governments grant
benefits and take on spending responsibilities, confident in the expectation that the next generation of citizens/subjects
(poor things!) will pick up the bill. Such promises have worked so far because of continued economic growth and rising
populations. But with such populations starting to fall in some countries and with the tax base shrinking in others (such as
the U.K.), the strain is starting to show. Iceland was overwhelmed by the debts of its banks. Dubai has shown that the
distinction between government debt and that of government-controlled companies can be very fuzzy indeed. Greece has
been downgraded by two rating agencies.
A zero –interest rate policy has supported assets such as equities and commercial property, while quantitative easing, by
allowing central banks to buy government bonds, has prevented long-term interest rates from rising. But having taken
these two steps the authorities cannot prop up their currencies even if they desired to do so. A falling currency, after all,
seems to be a painless way of boosting the prospects of exporters.
So the Bank of England has been happy to watch sterling slide. When the time comes, will the British electorate be willing
to swallow unpleasant medicine in the form of several years of austerity? The temptation must be to try to solve the
problem by raising taxes, especially if those taxes can be aimed at an unpopular group like bankers. However, in a world
of highly mobile capital and labour, this strategy seems doomed to failure in the long run. The pain is likely to fall on the
broad mass of the population. The battle will be between the taxpayer and the public-service worker represented broadly
by respectively the Conservatives and Labour. Even if the former were to win a working majority in the Commons, it
could still lose on the streets if strike action were to force a climb-down.
The gold standard broke down in the 1930s because countries such as Britain would not pay the price in the form of
austerity to maintain the link: voters came before foreign creditors. The Bretton Woods system of fixed exchange rates
broke down because America was unwilling to bear the burden of being the linchpin any longer. Now, the system that has
prevailed in the 1980s, 1990s and 2000s in which creditors trusted central banks to maintain the value of their respective
currencies is breaking down as well.
3
Athelney Trust plc
CHAIRMAN’S STATEMENT AND BUSINESS REVIEW
(CONTINUED)
Allow me, Gentle Reader, to remind you of a few of the factors that shaped the year 2009. January: interest rates fall to
their lowest level in 300 years. The UK is now officially in recession. February: interest rates are cut further to 1 per cent.
Car production falls by 55 per cent. March: the Government takes a big chunk of Lloyds Banking Group. April: Mr
Darling’s nasty little budget pretends that taxing the well-off will sort out our economic ills. June: Mervyn King, Governor
of the Bank of England, tells the Government to put the economic house in order. July: factory orders fall sharply.
September: unemployment climbs steadily. November: Dubai-based companies default. December: market professionals
digest the news that public borrowing would be £178bn in 2009 and £176bn in 2010.
And what of markets in this extraordinary year? Without a doubt, it was the year of the emerging markets: in dollar terms,
Brazil was up by 142 per cent, Russia 129 per cent and Jakarta with 115 per cent. Some of the Middle Eastern markets did
poorly, Bahrain being down by 20 per cent with Kuwait and Qatar following behind. Looking over the decade, emerging
markets again took first prize with Ukraine (yes, honestly) up by 900 per cent followed by Peru, Russia, Romania, China,
Bangladesh, Slovakia, Kuwait, Estonia and the Czech Republic. Congratulations to anyone who had anything in three or
more of these markets. At the other end of the spectrum, Iceland fell by 81 per cent over the ten years, Japan by 40 per
cent, then New York and London.
So where did all the money go which was poured into the economy by the Treasury and the Bank of England? Some
£76bn from the Treasury to buy shares in Lloyds and RBS, £200bn of liquidity by the Bank as lender of last resort, £250bn
of wholesale lending by the Bank through the Credit Guarantee Scheme (CGS), £185bn of loans to banks via the Special
Liquidity Scheme (SLS) and £40bn of loans to Bradford & Bingley and the Financial Services Compensation Scheme.
Take a deep breath: there is the £200bn of liabilities taken on board from the Asset Protection Scheme and the £200bn of
cash pumped into the economy through quantitative easing (QE). It isn’t really fair to add all these sums together – parts
are merely guarantees rather than actual pledged money and much should, we all hope, come back to the Government in
the end.
QE has undoubtedly had a beneficial effect on share and commercial property markets but what of the rest? The answer,
disappointingly, is far less than had been expected, certainly in terms of bank lending. Part of the reason the banks are
reluctant to lend is that they are unsure about how far they must go in fortifying their balance sheets for the future. Most
have increased both capital and liquidity to levels far stronger than before the crisis but they are aware that the regulators
will demand even higher ratios. SLS may come to an end in 2012 and CGS in 2014: these dates may seem far off to thee
and me but not to a bank offering 25-year mortgages. With stronger regulation a racing certainty and the various Bank
schemes running out of runway, the shortage of bank lending is likely to continue, thus dashing hopes for a quick recovery
from this recession.
No Chairman’s Statement could possibly be complete without a few polite words on the subject of the performance of our
Supreme Leader, Mr. Brown. (I exclude shouting at staff, throwing telephones, kicking furniture and the like.) How has
the U.K. done since his first full budget in March 1998? To quote the great man himself, ‘A weak currency arises from a
weak economy, which in turn is the result of weak government.’ Since that date, the British pound has lost 14 per cent
against the Swedish krona, 24 per cent against the Chinese renminbi, 33 per cent against the Swiss franc and 35 per cent
against the Japanese yen. The euro did not exist then but my guess is sterling has shed 27 per cent against the basket of
currencies forming the euro. As far as the Stock Exchange is concerned, the index has fallen by about 10 per cent
compared with Germany (up 12 per cent), New York (up 15 per cent), Hong Kong (up 77 per cent) and so on. Only Tokyo
has done worse in terms of the world’s major markets. All share markets perform badly under Labour governments but
this one has been even worse than previous incarnations. Back again to March 1998 when he talked about Britain’s ‘debt
reduction plan,’ ‘an unshakeable commitment to prudent monetary and fiscal rules’ and (yes, honestly) addressing the
‘structural weaknesses’ of unemployment. So what happened? Well, Britain’s budget deficit at 14 per cent of GDP is
higher than that of Greece and is the worst in G20. Our stock of debt is heading for £1 trillion. As for unemployment,
today it is 7.8 per cent compared with 6.3 per cent back in 1998. Apart from that, I think that he has done a pretty decent
job.
4
Athelney Trust plc
CHAIRMAN’S STATEMENT AND BUSINESS REVIEW
(CONTINUED)
Gold bugs throughout history have been mesmerised by the yellow metal’s apparent capacity to provide a safe haven and
store of value. Unlike just about any other commodity I can think of, the global stock of gold could meet 375 years of
industrial demand. Proponents point out that the drop in jewellery sales following the rise in price has been outweighed by
the surge in speculative demand without any compensating increase in mined supplies. But such backward-looking
arguments were probably heard in Holland, circa 1637, when it was seen that gardeners could no longer afford tulip bulbs
but speculative investors would support the market, despite the poor growing season. In today’s terms, the gold price is
round about where it was in 1265 and, indeed, one banker has pointed out that a 15th Century gold bug who had stored all
his wealth in bullion, bequeathed it to his children and required them to do the same would look from his lofty perch and
see the real value of his bequest decline by 90 per cent over the next 500 years. Calling a market top is never easy but I
would not invest a brass farthing in this metal.
More intellectual confusion surrounds the theory of peak oil supply, whose followers believe that oil production is in
permanent decline. Others, who believe that the oil price will rise to match the $147 per barrel of 2008, argue that rapid
growth from emerging markets, notably China, will underpin a huge rise in the price. However, the best estimate that I
have seen demonstrates that oil supply will rise by 9-10m barrels per day (bpd) by 2017, which would absorb the possible
5m bpd increase in Chinese demand. I do not, though, pretend that squeezing an extra 9-10m bpd will be easy –
Venezuela, Russia, Nigeria and Iran will, at best, provide stable supplies. The UK, US and Norway peaked in 1999, 1970
and 2001 respectively. However, Saudi Arabia (+3.5m bpd), Iraq (+3.7m bpd) and Kuwait, amongst others, are planning
substantial capacity and production increases. Then there are countries like Canada, second only to Saudi Arabia in
reserves, Brazil, aiming to double production, Angola, plus 50 per cent by 2015, and Kazakhstan. These increases then
have to be linked with country-wide initiatives to change the environment: China is targeting 15 per cent of total energy
use from alternative sources by 2020, most European countries offer subsidies for green energies, the US has legislated to
raise mileage per gallon on new vehicles, and so on. OPEC spare capacity at present is as much as 6m bpd, there are
dramatic increases in oil supply to come and more, much more, alternative energy all suggest to me that I should believe in
peak demand, not peak supply.
The year 2009 was a disappointing one as far as dividends were concerned with private investors on average receiving 15
per cent less than in 2008. In total, 202 UK companies cut their dividends in 2009, of which more than one third paid no
dividend at all. Bank shares, traditionally held by private investors for income, had a bad year with Royal Bank of
Scotland and Lloyds Banking Group paying nothing at all and even powerful HSBC cut its payout. Retailers’ dividends
fell by 62 per cent, while household goods companies did even worse at 64 per cent: cyclical companies as a group cut by
25 per cent. In these difficult circumstances, the Board is pleased that a small increase in Athelney’s total dividend for the
year has proved possible.
Results
Gross Revenue decreased by 0.8 per cent compared to 2008. 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
Companies trade suspended (therefore no true comparison)
Number
59
3
9
29
6
11
1
5
Athelney Trust plc
CHAIRMAN’S STATEMENT AND BUSINESS REVIEW
(CONTINUED)
Corporate Activity
During the year two companies went into Administration – Smallbone and Aero Inventory. Their shares have been valued
at nil in these accounts.
During the year the Company incurred actual realised capital profits arising on the sale of investments in the sum of
£118,623.
Portfolio Review
Holdings of Alumasc, ATH Resources, Chesnara, Cineworld, Consort Medical, Fenner, Matchtech, McKay Securities,
Mucklow Group and Town Centre Securities were all purchased for the first time. Avesco, Creston, Dawson Holdings,
FDM Group, Finsbury Food Group, Galliford Try, Gooch & Housego, Mallett, Nichols, OPD Group, Pennant
International, Prime People, Shepherd Neame, Vantis, Victoria and Waterman Group were all sold. In addition, a total of
fourteen holdings were top-sliced to provide capital for the new purchases.
Dividend
On 13 January 2010 the Board had recommended the payment of an Interim Dividend of 4.75p per share. Previously the
Company had not paid an Interim Dividend. Consequently the Board does not recommend the payment of a Final
Dividend (2009: 4.7p)
Update
The unaudited NAV at 28 February 2010 was 124.8p whereas the share price on the same day stood at 123p. Further
updates can be found on www.athelneytrust.co.uk
Outlook
Last year it was the banks: this year it is countries. The economic crisis, which seemed to have moderated in the latter part
of 2009, is once again in full swing as the threat of sovereign default grows, with all eyes on Greece and other members of
Club Med such as Spain, Portugal and Italy. Not only that but policy changes abroad are worrying investors: China is
reigning in lending due to concerns about asset-bubbles, Brazil’s fiscal stimulus is being phased out, India’s central bank
has raised reserve requirements whereas other central banks are gradually unwinding the emergency liquidity facilities they
introduced at the height of the crisis. QE, furthermore, is apparently coming to an end. All this has knocked confidence,
share prices and commodities. Optimism about a V-shaped recovery has been replaced by my own favourite, the L-shape,
or a double-dip recession. Japan has slipped back into deflation and domestic demand has stalled even in countries, such as
Germany, where households have no excess debt to pay off. The way forward is clear: we must encourage productivity,
investment and competition, free trade, cut spending rather than raising taxes and agree new financial regulations. Oh yes,
and we must reform public sector pensions, raise the retirement age and means-test benefits. None of this will help
markets in the short-term, which is why I am hoping for a small rise of 5-7 per cent this year rather than something more
dramatic.
H.B. Deschampsneufs
Chairman
6
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 2008. 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, such a Committee is not considered necessary.
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.
7
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 2009, the Board met six 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.
The non-executive Directors were appointed at the 2009 Annual General Meeting for a term to expire at the next Annual
General Meeting. Both non-executive Directors offer themselves for re-election at the forthcoming Annual General
Meeting.
Audit Committee
The Audit Committee comprises the independent Directors, with David Horner as Chairman. The Committee met twice
during the year ended 31 December 2009. 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.
8
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 18 to 19 and in note 4 to the
financial statements.
The Committee met twice during the year and both committee members were present at both 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.
9
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.
10
Athelney Trust plc
INVESTMENT AND PORTFOLIO ANALYSIS AT 31 DECEMBER 2009
Sector
Stock
Holding
Cost (£)
Current
Price
(p)
Value (£)
£
%
Aerospace and defence
Aero Inventory *
14,000
43,937
-
-
Chemicals
Construction and materials
Umeco
Treatt
Alumasc
Clarke (T)
13,750
53,951
282
38,775
38,775
1.78%
10,500
24,605
273
28,667
28,667
1.31%
30,000
30,910
98
29,400
26,700
29,870
135
36,045
Renew Holdings
55,000
42,054
37
20,350
85,795
3.93%
Electronic and electrical equipment
XP Power Ltd
20,000
40,993
445
89,000
89,000
4.07%
Food and beverages
General financial
Wynnstay Group
25,000
22,348
226
56,500
56,500
2.59%
Albemarle & Bond
15,000
14,999
262
39,300
Arbuthnot Banking Group
10,000
34,134
370
37,000
Camellia
1,000
23,958
7,350
73,500
Charles Taylor Consulting
20,000
44,568
201
40,200
Jarvis Securities
25,000
20,169
170
42,500
Park Group
RSM Tenon
S & U
200,000
32,817
18
36,000
62,000
19,541
49
30,070
8,000
23,901
435
34,800
333,370
15.26%
Healthcare equipment and services
Consort Medical
8,000
30,102
390
31,200
House, leisure and personal goods
Havelock Europe
24,000
16,430
24
5,760
Tristel
75,000
36,212
58
43,500
74,700
3.42%
Smallbone *
36,500
36,366
-
-
5,760
0.26%
Industrial engineering
Fenner
Goodwin
32,000
8,768
168
53,600
5,000
3,072
1,020
51,000
Hill & Smith
20,000
32,930
340
68,000
Severfield-Rowen
20,000
20,903
173
34,600
Slingsby (H.C)
4,000
9,958
630
25,200
Industrial transportation
Braemar Shipping Services
13,000
16,118
425
55,250
Vitec
13,000
25,015
386
50,180
282,580
12.94%
Insurance
Media
Clarkson
5,000
12,748
740
37,000
Fisher (James)
5,500
4,666
445
24,475
116,725
5.34%
Chesnara
16,000
30,182
196
31,360
Personal Group Holdings
17,500
15,908
290
50,750
82,110
3.76%
Chime Communications
20,000
20,311
217
43,400
Huntsworth
55,000
24,154
64
34,925
M&C Saatchi Plc
45,000
41,093
80
36,000
Quarto Group Inc Com
40,500
47,369
85
34,425
148,750
6.81%
11
Athelney Trust plc
INVESTMENT AND PORTFOLIO ANALYSIS AT 31 DECEMBER 2009
(CONTINUED)
Sector
Stock
Holding
Cost (£)
Current
Price
(p)
Value (£)
£
%
ATH Resources
40,000
30,203
92
36,800
36,800
1.68%
McKay Securities
22,500
32,958
155
34,875
Mountview Estates
1,500
18,867
4,000
60,000
Mucklow Group
10,000
32,324
303
30,325
Smart (J) & Co.
4,000
21,009
425
17,000
Mining
Real estate
Town Centre Securities
22,500
31,140
139
31,275
173,475
7.93%
Retailers
H & T Group
17,000
31,807
300
51,000
Support services
Interior Services Group
30,000
49,048
162
48,600
Stanley Gibbons
47,500
5,779
133
63,175
114,175
5.23%
Latham (James)
14,000
7,401
165
23,100
Macfarlane Group
155,000
35,205
20
30,225
Matchtech
12,500
30,177
250
31,250
N.W.F Group
40,000
11,707
92
36,800
Nationwide Accident Repair
30,000
37,194
78
23,400
RWS Holdings
9,000
15,862
310
27,900
VP
25,000
31,591
173
43,250
Technology software and services
Group NBT
12,000
13,947
315
37,800
WSP Group
13,000
11,435
275
35,750
300,275 13.75%
Travel and leisure
* In Administration
Phoenix IT
Air Partner
Cineworld
15,000
32,864
265
39,750
77,550
3.55%
7,000
19,233
450
31,500
30,000
31,822
150
45,000
Gaming VC
30,000
40,605
210
63,000
139,500
6.39%
100%
£
£
£
2,184,507
105,100
2,289,607
1,802,802
Portfolio Value
Net Current Assets
TOTAL VALUE
Shares in issue
Audited NAV
127p
12
Athelney Trust plc
INVESTMENT AND PORTFOLIO ANALYSIS AT 31 DECEMBER 2009
(CONTINUED)
Portfolio By Sectors
1.78% 1.31%
3.93%
6.39%
3.55%
13.75%
5.23%
7.94%
4.07%
2.59%
15.26%
3.42%
0.26%
1.68%
6.81%
3.76%
5.34%
12.94%
Aerospace and defence
Food and beverages
Industrial engineering
Mining
Technology software and services
Chemicals
General financial
Industrial transportation
Real Estate
Travel and leisure
Electronic and electrical equipment
Construction and materials
Healthcare equipment and services House, leisure and personal goods
Insurance
Retailers
Media
Support Services
Portfolio By Listing
39.37%
60.63%
Full
AIM
13
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 2009.
This report also contains certain information required in accordance with s992 of the Companies Act 2006.
Principal Activity and Business Review
The principal activity of the Company is that of an investment trust. 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 trust. Details of these are given in the
Chairman’s Statement and Business Review on pages 3 to 6.
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 its 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 14 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.B. Deschampsneufs
R.G. Boyle
D.A. Horner
31 December 2009
78,038
443,970
20,000
1 January 2009
78,038
443,970
20,000
H.B. Deschampsneufs’ interest includes 19,163 (2008: 19,163) shares held in his Self-Invested Personal Pension. R.G.
Boyle’s interest includes 16,970 (2008: 16,970) shares held in his Self-Invested Personal Pension. D.A. Horner’s interest
includes 20,000 (2008: 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 25 March 2010.
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 Directors' Report and the Financial Statements in accordance with
applicable law and regulations.
14
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). Under company law the Directors must not approve
the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company
and of the total return of the Company for that period. In preparing these Financial Statements, the Directors are required
to:
select suitable accounting policies and then apply them consistently;
-
- make judgments 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;
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 adequate accounting records that are sufficient to show and explain the
Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
The Directors are responsible for 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 and other information included in annual reports may differ from legislation in other jurisdictions.
Statement Under the Disclosure and Transparency Rules 4.1.12
The Directors confirm to the best of their knowledge:
- the financial statements, prepared in accordance with UK Accounting Standards, give a true and fair view of the
assets, liabilities, financial position and net return of the company; and
- the Directors Report includes a fair review of the development and performance of the business and the position
of the Company, together with a description of the principal risks and uncertainties it faces.
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). This authority expired at the date of the last Annual General Meeting and the Board is not seeking to renew this
authority.
Move from AIM to a Full Listing
The Company moved to a Full Listing on 24 September 2008 (see note 7, page 30).
Capital Structure
At 31 December 2009 the Company’s capital structure consisted of 1,802,802 Ordinary Shares of 25p each (2008:
1,802,802 Ordinary Shares of 25p each).
Allotment of Ordinary Shares
The Directors are proposing to allot 198,088 Ordinary Shares in accordance with a placing letter dated 15 March 2010.
The Shares are to be issued at a price of 120.15p per share, raising approximately £238,000 gross. This placing is subject
to approval by the shareholders at the AGM on 5 May 2010.
15
REPORT OF THE DIRECTORS OF
Athelney Trust plc
(CONTINUED)
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.
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.
Results and Dividends
The return on ordinary revenue activities before dividends for the year is £94,825 (2008: £99,603) as detailed on page 22.
On 13 January 2010 the Board recommended the payment of an Interim Dividend of 4.75p per share.
Significant Shareholders
At 25 March 2010, 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.B. Deschampsneufs
Mrs E. Davison
Mr D.C. & Mrs B.I. Mattey
Tax Status
Ordinary Shares
443,970
114,000
87,500
78,038
75,000
60,000
% of issue
24.63
6.32
4.85
4.32
4.16
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.
16
REPORT OF THE DIRECTORS OF
Athelney Trust plc
(CONTINUED)
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 each Director is aware, there is no relevant audit information of which the Company’s auditors are
unaware, and
each Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of
any relevant audit information and to establish that the Company’s auditors are aware of that information.
The above confirmation is given and should be interpreted in accordance with the provision of Section 418(2) of the
Companies Act 2006.
Auditors
Clement Keys have expressed their willingness to continuing office as Auditors and a resolution proposing that they be re-
appointed and to authorise the Directors to determine their remuneration will be put to the Annual General Meeting.
Waterside Court
Falmouth Road
Penryn
Cornwall
TR10 8AW
BY ORDER OF THE BOARD
J. Girdlestone
Secretary
25 March 2010
17
Athelney Trust plc
DIRECTORS’ REMUNERATION REPORT
The Board has prepared this Report in accordance with the requirements of Section 421 of the Companies Act 2006. 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 20 and 21.
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’ Remuneration
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 2010.
The remuneration 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 six financial years ended 31 December 2009, 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
-
*Assuming all dividends are reinvested
Past Performance is no guarantee of future performance.
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
NAV
Shareholder Return *
AIM All Share
Small Caps
Year End
18
Athelney Trust plc
DIRECTORS’ REMUNERATION REPORT
(CONTINUED)
Directors’ remuneration for the year (audited information)
The Directors who served in the year received the following remuneration in the form of salaries:
Hugo Deschampsneufs (Chairman, non-executive)
Robin Boyle (Managing Director)
David Horner (Non-executive)
2009
£
8,333
40,000
6,667
55,000
2008
£
6,667
35,000
5,833
47,500
Approval
The Directors’ Remuneration Report was approved by the Board on 25 March 2010.
J. Girdlestone
Company Secretary
19
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 2009, which comprise the
Income Statement, the Reconciliation of Movements in Shareholders’ Funds, the Balance Sheet, the Cash Flow Statement
and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and
United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters
we are required to state to them in an 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
As explained more fully in the Statement of Directors’ Responsibilities set out on pages 14 and 15, the Directors are
responsible for the preparation of the Financial Statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit the Financial Statements in accordance with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for
Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the Financial Statements sufficient to give
reasonable assurance that the Financial Statements are free from material misstatement, whether caused by fraud or error.
This includes an assessment of: whether the accounting policies are appropriate to the Company's circumstances and have
been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the
Directors; and the overall presentation of the financial statements.
Opinion on financial statements
In our opinion the Financial Statements:
•
•
•
give a true and fair view of the state of the Company’s affairs as at 31 December 2009 and of its net return and
cash flows for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
•
•
the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the
Companies Act 2006; and
the information given in the Directors’ Report for the financial year for which the Financial Statements are
prepared is consistent with the Financial Statements.
20
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
ATHELNEY TRUST PLC
(CONTINUED)
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you if, in our opinion:
•
•
adequate accounting records have not been kept, or returns adequate for our audit have not been received from
branches not visited by us; or
the financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement
with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Under the Listing Rules we are required to review:
•
•
the Directors’ Statement, set out in page 9, in relation to going concern; and
the parts of the Corporate Governance Statement relating to the Company’s compliance with the nine provisions
of the 2008 Combined Code specified for our review.
Simon Atkins ACA
Senior Statutory Auditor
for and on behalf of
Clement Keys
Chartered Accountants
Statutory Auditors
39/40 Calthorpe Road
Edgbaston
Birmingham
B15 1TS
25 March 2010
21
Athelney Trust plc
INCOME STATEMENT
(INCORPORATING THE REVENUE ACCOUNT)
For the Year Ended 31 December
2009
For the Year Ended 31 December
2008
Note Revenue
Capital
Total
Revenue
Capital
Total
£
£
£
£
£
£
-
650,678
650,678
-
(1,482,105)
(1,482,105)
122,963
-
122,963
123,951
-
123,951
(5,121)
(46,839)
(51,960)
(4,466)
(41,700)
(46,166)
(23,017)
(40,301)
(63,318)
(19,882)
(44,947)
(64,829)
Profits/(losses) on
investments held at fair
value
Income from
investments
Investment
Management expenses
Other expenses
Exceptional items
9
2
3
3
7
-
-
Net return/(loss) on ordinary
activities before taxation
94,825
563,538
658,363
Taxation
5
-
-
-
-
-
(128,782)
(128,782)
99,603
(1,697,534)
(1,597,931)
-
256,283
256,283
Net return/(loss) on ordinary
activities after taxation 6
94,825
563,538
658,363
99,603
(1,441,251)
(1,341,648)
Net return/(loss) per
ordinary share
6
5.3p
31.3p
36.5p
5.5p
(79.9)p
(74.4)p
Dividend per ordinary share
paid during the year 8
4.7p
3.5p
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 13.
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 26 to 33 form part of these financial statements.
22
Athelney Trust plc
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
Called-up
Share
Capital
£
Share
Premium
£
Capital
reserve
realised
£
Capital
reserve Revenue
reserve
£
unrealised
£
Total
Shareholders’
Funds
£
450,700
405,605
892,893
1,239,083
132,441
3,120,722
-
-
-
-
-
-
-
-
-
-
-
-
(88,385)
-
-
(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
450,700
405,605
589,079
101,646
168,946
1,715,976
-
-
-
-
-
-
-
-
-
-
-
-
118,623
-
-
532,055
-
-
(87,140)
-
-
-
-
-
-
-
-
-
94,825
(84,732)
118,623
532,055
(87,140)
-
94,825
(84,732)
450,700
405,605
620,562
633,701
179,039
2,289,607
Balance brought forward
at 1 January 2008
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 2008
Balance brought forward
at 1 January 2009
Net profits on realisation
of investments
Increase in unrealised
appreciation
Expenses allocated to
capital
Taxation
Profit for the year
Dividend paid in year
Shareholders’ Funds at
31 December 2009
The notes on pages 26 to 33 form part of these financial statements.
23
Athelney Trust plc
BALANCE SHEET AS AT 31 DECEMBER 2009
Company Number: 02933559
Note
Fixed assets
Investments held 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
2009
£
2008
£
2,184,507
1,657,321
96,088
26,321
122,409
(17,309)
105,100
2,289,607
-
65,090
26,038
91,128
(32,473)
58,655
1,715,976
-
Net assets
2,289,607
1,715,976
Capital and reserves
Called up share capital
Share premium account
Other reserves (non distributable)
Capital reserve - realised
Capital reserve - unrealised
Revenue reserve (distributable)
Shareholders' funds - all equity
Net Asset Value per share
12
13
13
13
13
16
450,700
405,605
620,562
633,701
179,039
450,700
405,605
589,079
101,646
168,946
2,289,607
1,715,976
127p
95.2p
Approved and authorised for issue by the Board of Directors on 25 March 2010
……………………………….
R.G. Boyle
Director
The notes on pages 26 to 33 form part of these financial statements
24
Athelney Trust plc
CASHFLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2009
Net cash (outflow)/inflow from operating
activities
Taxation
Corporation tax paid
Capital Expenditure and Financial
Investment
Purchases of investments
Sale of investments
Net cash inflow from Capital Expenditure
and Financial Investment
Equity dividends paid
Increase/(decrease) in cash in the year
Reconciliation of operating net revenue to
net cash (outflow)/inflow from operating
activities
Revenue on ordinary activities before taxation
(Increase)/decrease in debtors
(Decrease)/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 funds
Cash at bank and in hand
£
2009
£
£
(38,477)
-
(442,039)
565,531
(975,591)
1,003,983
123,492
(84,732)
283
£
94,825
(30,998)
(15,164)
(46,839)
(40,301)
-
(38,477)
2008
£
39,973
(24,564)
28,392
(63,098)
(19,297)
£
99,603
140,683
15,116
(41,700)
(44,947)
(128,782)
39,973
Net funds at
31.12.2008
£
26,038
Cashflow
£
283
Net funds at
31.12.2009
£
26,321
The notes on pages 26 to 33 form part of these financial statements
25
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2009
1. Accounting Policies
1.1 Basis of Preparation of Financial Statements
The financial statements are prepared on a going concern basis under the historical cost convention as
modified by the revaluation of investments held at fair value.
The financial statements are prepared in accordance with the Companies Act 2006, applicable UK accounting
standards and the provisions of the Statement of Recommended Practice “Financial Statements of Investment
Trust Companies and Venture Capital Trusts” (SORP) issued by the A.I.C. in January 2009.
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 and Capital Accounts in an allocation that the Board consider to be a fair distribution of the costs
incurred.
1.5 Investments
Listed investments comprise those listed on the Official List of the London Stock Exchange. Profits or 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.
26
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2009
1. Accounting Policies (continued)
1.7 Deferred Taxation
Deferred tax is recognised in respect of all timing differences that have originated but not reversed by the
balance sheet date. Deferred tax liabilities are are recognised for all taxable timing differences but deferred
tax assets are only recognised if it is considered more likely than not that there will be suitable profits from
which the future reversal of the underlying timing differences can be deducted. Deferred tax assets and
liabilities are calculated at the tax rates expected to be effective at the time the timing differences are expected
to reverse. Deferred tax assets and liabilities are not discounted.
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.
1.9 Dividends
In accordance with FRS 21 “Events after the Balance Sheet Date”, dividends are included in the accounts in
the year in which they are paid.
2. Income
Income from investments
UK dividend income
Bank interest
Other income
Total income
UK dividend income
UK listed investments
AIM investments
Other investments
2009
£
122,666
297
-
122,963
2009
£
72,344
50,322
-
122,666
2008
£
113,571
10,230
150
123,951
2008
£
56,920
55,707
944
113,571
27
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2009
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
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
28
2009
£
15,000
40,000
9,365
1,466
25,703
-
7,448
7,321
8,975
115,278
2009
£
55,000
4,771
59,771
19,167
1,765
20,932
74,167
6,536
80,703
1
2
1
4
2008
£
12,500
35,000
9,505
999
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
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2009
5. Taxation
Revenue
2009
Capital
Total
Revenue
2008
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 charged to income
Deferred taxation
-
-
-
-
-
-
-
-
-
-
-
-
(ii) Factors affecting the tax charge for the year
£
-
£
-
-
(256,283)
-
(256,283)
-
-
-
-
(256,283)
(256,283)
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
Total return on ordinary activities multiplied by the average
small company rate of corporation tax 21% (2008: 21%)
Effects of:
UK dividend income not taxable
Revaluation of shares not taxable
Capital gains not taxable
Indexation relief for capital gains
Unrelieved management expenses
Losses carried forward
Other
Change in tax rate
Current tax charge for the year
2009
£
658,363
138,256
(23,552)
(111,732)
(24,911)
-
21,939
-
-
-
-
2008
£
(1,597,931)
(335,566)
(23,850)
292,681
-
(2,858)
48,225
21,545
(177)
-
-
The Company has unrelieved excess revenue management expenses of £31,538 at 31 December 2009 (2008:
£14,212) and £102,597 (2008: £102,597) of capital losses for Corporation Tax purposes and which are available
to be carried forward to future years. It is unlikely that the Company will generate sufficient taxable profits in the
future to utilise these expenses and therefore no deferred tax asset has been recognised.
29
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2009
5. Taxation continued
The Company has received provisional approval from HM Revenue and Customs under Section 842 ICTA 1988,
therefore the Company is not liable to Corporation Tax on any realised investment gains for 2009 or in the future.
The Directors intend to continue to meet the conditions required to obtain approval and therefore no deferred tax
has been provided on any capital gains or losses arising on the revaluation or disposal of investments.
6. Return per Ordinary Share
The calculation of earnings per share has been performed in accordance with FRS 22 “Earnings Per Share”.
2009
2008
£
Revenue
£
Capital
£
Total
£
Revenue
£
Capital
£
Total
94,825
563,538
658,363
99,603
(1,441,251)
(1,341,648)
Attributable return/(loss) on
ordinary activities after
taxation
Number of shares
1,802,802
1,802,802
Return per ordinary share
5.3p
31.3p
36.5p
5.5p
(79.9)p
(74.4)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 £nil (2008: £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 4.7p (2008: 3.5p) per share
2009
£
84,732
2008
£
63,098
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 interim dividend of 4.75p (2009 a final dividend – 4.7p) per share amounting to a total of £85,633 (2009:
£84,732) has been approved by the Board, for payment on 01 April 2010.
Revenue available for distribution
Interim dividend in respect of financial year ended
31 December 2009
Undistributed Revenue Reserve
2009
£
94,825
(85,633)
9,192
30
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2009
9. Investments
Movements in year
Valuation at beginning of year
Purchases at cost
Sales - proceeds
- realised gains/(losses) 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 investments
AIM investments
PLUS investments
Gains on investment
Realised gains/(losses) on sales
Increase/(decrease) in unrealised appreciation
2009
£
1,657,321
442,039
(565,531)
118,623
532,055
2,184,507
1,527,239
657,268
2,184,507
1,324,512
859,995
-
2,184,507
2009
£
118,623
532,055
650,678
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)
The purchase and sales proceeds above include transaction costs of £2,188 (2008: £3,176) and £2,898 (2008:
£4,546) respectively.
10. Debtors
Investment transaction debtors
Other debtors
2009
£
84,103
11,985
96,088
2008
£
59,148
5,942
65,090
31
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2009
11. Creditors: amounts falling due within one year
Social security and other taxes
Other creditors
Accruals and deferred income
12. 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
13. Reserves
2009
£
3,690
171
13,448
17,309
2009
£
2008
£
3,087
4,272
25,114
32,473
2008
£
2,500,000
2,500,000
450,700
450,700
Balance at 1 January 2009
Net gains on realisation of investments
Inrease in unrealised appreciation
Expenses allocated to capital
Profit for the year
Dividend paid in year
Share
premium
account
£
405,605
-
-
-
-
-
2009
Capital
reserve
realised
£
589,079
118,623
-
(87,140)
-
-
Capital
reserve
unrealised
£
101,646
-
532,055
-
-
-
Revenue
reserve
£
168,946
-
-
-
94,825
(84,732)
Balance at 31 December 2009
405,605
620,562
633,701
179,039
14. Financial Instruments
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.
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.
32
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2009
14. 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 2.88 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.
15. Post Balance Sheet Event
The Directors propose to allot 198,088 Ordinary Shares at 120.15p in accordance with a placing letter dated 15
March 2010. This will have the effect of raising approximately £238,000 gross. The allotment is subject to
approval by the shareholders at the AGM on 5 May 2010.
16. Net Asset Value Per Share
The net asset value per share is based on net assets of £2,289,607 (2008: £1,715,976) divided by 1,802,802 (2008:
1,802,802) ordinary shares in issues.
Net asset value
2009
127p
2008
95.2p
33
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:
2933559
(Registered in England)
Stockbroker:
Auditors:
Banker:
Registrar:
Public Relations
Consultants:
Solicitor:
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
City Road Communications
42-44 Carter Lane
London, EC4V 5EA
McClure Naismith
49 Queen Street
Edinburgh, EH2 3NH
Email: graeme.dickie@speirsjeffrey.co.uk
Tel: 0141 248 4311
Email: simon.atkins@clementkeys.co.uk
Tel: 0121 456 4456
Email: enquiries@shareregistrars.uk.com
Tel: 01252 821 390
Email: cityroad@cityroad.uk.com
Tel: 0207 248 8010
Email: awilliamson@McClureNaismith.com
Tel: 0131 272 8378
34