Annual Report
for the year ended 31 December 2011
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
Notice of Annual General Meeting
For your notes
Form of Proxy
2 - 3
4 - 7
8 - 12
13 - 15
16 - 19
20 - 21
22 - 23
24
25
26
27
28 - 35
36
37 - 38
39
40 - 41
1
Athelney Trust plc
DIRECTORS OF THE COMPANY
The Directors of the Company are:
Hugo Deschampsneufs, non-executive Chairman
Hugo Deschampsneufs, aged 66, 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 an adviser 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 52, 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.
Robin Boyle, Managing Director
The assets of the Company have been managed since formation by Robin Boyle, the Managing Director of the
Company. Aged 67, he has spent the last forty three 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 Plc run by Chelverton Asset Management Limited. Between 2006 and 2008 he was non-
executive Director of Capcon Holdings plc, now Brady Exploration plc an AIM-traded commercial investigations and
stocktaking business.
Jonathan Lancelot Addison, non-executive Director
Jon Addison, aged 58, has over 30 years experience in the investment management industry, including wide
experience in superannuation. Currently he is the Investment Manager, (part time), formally Fund Manager of the
Meat Industry Employee Superannuation Fund (MIESF) which he joined in 1999 and where he is responsible for the
investment management of the fund. Prior to his appointment to MIESF, Jon was a Director and Asset Consultant
within the corporate finance section of Pricewaterhouse Coopers and in this role was responsible for establishing an
investment consulting practice with clients ranging from superannuation funds to insurance funds and funds managers.
Prior to that, he was a manager Investment Consultant at Sedgwick Noble Lowndes. Jon holds Non Executive
Directorships with African Enterprise Limited, African Enterprise New Zealand Limited, African Enterprise
International, Hawksbridge Limited,
Global Masters Fund, TPCG Limited and Phosphagenics Limited. Jon holds a Bachelor of Economics Degree and a
postgraduate diploma from the Institute of Company Secretaries and is a member of the Australian Institute of
Company Directors and has addressed a number of Australian and International conferences on investment related
matters.
2
Athelney Trust plc
DIRECTORS OF THE COMPANY
(CONTINUED)
Dr Emmanuel Clive Pohl, alternate non-executive Director
Manny Pohl, aged 57, founded Hyperion Asset Management Limited in 1996 and has headed the business through its
evolution into today’s independent funds management company with A$3.2bn in funds under management. He is
responsible for managing the overall business as well as the investment of client portfolios. Manny has over 28 years
of investment experience, initially as head of research for leading South African broking firm, Davis Borkum Hare,
followed by Westpac Investment Management in Australia after he emigrated to Australia in 1994. His engineering
background gives him a methodical and disciplined approach to his role. Manny holds engineering and MBA degrees
from the University of Witwatersrand and a doctorate in Business Administration (Economics) from Potchefstroom
University. He has served on the Boards of several major corporations in his native South Africa and adopted home
Australia.
3
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 2011. The salient points are as follows:
• Audited Net Asset Value (“NAV”) was 123p per share (31 December 2010: 142p) a decrease of 13.3 per
cent.
• Gross Revenue decreased by 1.93 per cent compared to 2010 but the amount in 2010 included a special
dividend of £12,588 from GVC Holdings, formerly Gaming VC Holdings. If that is excluded altogether then,
on a like-for-like basis, Gross Revenue actually rose by 7.59 per cent to £139,558 compared with the full year
to 31 December 2010 of £129,715
• Revenue return per ordinary share was 5.4p, a decrease of 5.2 per cent (31 December 2010: 5.7p).
• Recommended final dividend of 4.95p per share (2010: 4.9p), an increase of 1 per cent.
Review of 2011
Each time we must choose between Europe and the open sea, we shall always choose the open sea. – Winston
Churchill.
Nations have no permanent friends or allies, they only have permanent interests. – Lord Palmerston.
August 2011 was a shocker: until then things had seemed to be doing moderately well but it became clear in that
month that China and India were slowing down, Democrats and Republicans were arguing like the two Kilkenny cats
about the U.S. Budget and, horror of horrors, what we had long feared came to pass in that financial contagion spread
from Greece to Spain and then Italy. In short, finding good news in the second half of the year was as difficult as
catching a glimpse of the Higgs boson particle. Nevertheless, there was a decent recovery in the fourth quarter
although that still left us down on the year with blue chips out-performing small companies by a country mile. A few
stats for you: the FTSE 100 Index fell by 5.6 per cent (having been down by 21 per cent at one time), whereas the 250
went down by 10.1 per cent, the Fledgling by 12.6 per cent, the Small Cap by 14.9 per cent and, smallest of the lot, the
AIM All-share index fell by an awful 25.2 per cent. Nor did many overseas markets do much better – admittedly New
York rose by 6.2 per cent but China fell by 22.8 per cent, Japan by 17.5 per cent and Canada by 11.3 per cent.
Elsewhere, Venezuela rose by 78.9 per cent but Greece fell by 52.7 per cent, Egypt by 48.9 per cent and Austria by
34.8 per cent.
For the latter half of 2011, investors were worried about five things: the possibility of the US returning to recession,
trouble in the Chinese economy, a default in Europe and the subsequent threat to the banks and, finally, were company
profits going to fall? Institutional investors therefore held lots of cash and perceived safe havens such as US Treasury
bonds. In the last three months of the year, though, there was a slow movement towards so-called defensive equities,
particularly those offering a high dividend yield. This change was partly due to frustration with the low returns for
holding cash and the thought that central banks were going to keep interest rates down for another several years. Not
everything in the garden is rosy but the risk of a recession in America has reduced, as has the possibility of a hard
landing in China (retail sales in the latter country were up 18 per cent compared with the same month in 2010). In the
Eurozone, the ECB has flooded the market with liquidity, thus reducing the chance of a German or French bank
running out of cash and, at the same time, stabilising Italian and Spanish bond yields. Although at the end of the year
the fire-wall had still not been built around these two countries, nor had the Greek refinancing been accomplished, far
less a strategy been implemented for kick-starting growth, the recent sovereign downgrades were taken calmly and the
reaction to Spanish and Italian budget-tightening has been positive.
4
Athelney Trust plc
CHAIRMAN’S STATEMENT AND BUSINESS REVIEW
(CONTINUED)
However, the European question just will not go away. David Cameron’s veto of the proposed new European
constitution was the right decision but possibly for the wrong reasons. No doubt he was heavily influenced by his
Euro-sceptic back-benchers and by his wish to protect the City of London but the EU has been moving steadily in the
wrong direction for years and a line had to be drawn somewhere. ‘Without the euro, there can be no Europe,’ say
Merkel/Sarkozy (to save time, we will call them Merkozy) – I believe this to be totally wrong. Another slogan which I
hate is, ‘What we need is more Europe, not less.’ The enlarged EU has moved in a wholly perverse direction,
introducing policies which have destroyed employment and restricted industry. Furthermore, my view of the so-called
‘Save the Euro Plan’ is that it is likely to be deflationary in exactly those places in the zone already suffering from a
fall in output. Nor am I a believer in the proposed Financial Transactions Tax, which would drive business to
Switzerland and do wonders for the Singaporean economy. In any case, we already have our own such tax – Stamp
Duty.
When people talk about fiscal union in Europe (and these days they talk about little else in the tavernas and trattorias),
they do not really mean fiscal union at all. The Germans and the Austrians would not like the idea of merging their tax
structures and authorities with those of Greece and Italy: nor would they adopt common benefit levels or health
systems. Fiscal union means only common rules for budgetary discipline across the eurozone. Britain and America
lead the world in accountancy, they have an independent judiciary, (fairly) honest politicians and excellent statistical
services but they have both been unable to enforce self-imposed rules of budget discipline. We are now asked to
believe that countries with much weaker political structures will implement budgetary disciplines imposed from
outside. The existing Maastricht treaty requires that member states must hold deficits below 3 per cent of GDP and
limit borrowings to 60 per cent. This stipulation has been met by the goodly number of three out of 17: Estonia;
Finland and Luxembourg. The sanctions allowed by the treaty have never been applied and one would have to be
naïve to believe otherwise. Markets are an effective discipline on errant individuals, companies and countries because
they cannot easily be lobbied or bullied and their threat to make the cost of new money prohibitive is effective. Fiscal
rules do not have this advantage, no matter how cleverly they are written. Need I say more?
When things went wrong for Middle Eastern tribes a couple of thousand years ago, the remedy was to send a
sacrificial goat into the wilderness to placate the gods. Today, highly paid CEOs and bank chiefs have replaced the
goats and the British general public the gods. Recent trends in pay make bosses hard to sympathise with, especially
when newspapers gleefully print that the average CEO of an FTSE 100 company can now expect to earn £4.5m this
year so that pay at the top grew by 300 per cent between 1998 and 2010. At the same time, the British worker’s real
wage has been more-or-less stagnant. All this means that the ratio of executive to average pay rose from 47 to 120
times in 12 years. But bosses’ pay has gone up not because of a failure of corporate governance (the usual suspect) but
through globalisation. In 1984, when the Index was launched, it was made up largely of local companies serving
British customers: now the FTSE 100 is a global index of multinational companies operating in many different
industries but especially in oil and mining. FTSE bosses are picked from a global pool and the skills that they need,
and the pay that they receive, has changed out of all recognition. Giving more power to shareholders is not a bad idea
but it will not make any difference. Getting and keeping a good boss is more important than the pay that he or she
receives. All that we need to do is to scrap incentive plans that reward short-term performance and encourage long-
term thinking as is the case in America.
2011 turned out to be the Year of the Very Nasty Surprise with over 30,000 lives and £230 billion having been lost in
various man-made and natural disasters compared with ‘only’ £150 billion in the previous year. The earthquake which
sparked a tsunami and the Fukushima nuclear disaster accounted for 22,000 of these lives but only £23 billion of
losses were made by Western insurers though total losses were £140 billion. Two tornadoes and one hurricane, all in
America, floods in Thailand and the New Zealand earthquake pushed up total losses so that they were only exceeded
by the year 2005, when hurricane Katrina hit New Orleans. I think that I’ll stick to investing only in motor insurance
in future.
5
Athelney Trust plc
CHAIRMAN’S STATEMENT AND BUSINESS REVIEW
(CONTINUED)
Almost inevitably, Patient Reader, much of my statement this year (and probably next) has concerned Europe and
cannot have been an easy read so I will finish this section with a quote I found on the internet from my favourite
politician (not), Ed Balls, which goes back to his time at the Treasury. We have come to the edge of the abyss and now
it is time for a bold step forward. But since the quote came from the internet, it cannot be right, can it?
Results
Gross Revenue decreased by 1.93 per cent compared to 2010 but the amount in 2010 included a special dividend of
£12,588 from GVC Holdings, formerly Gaming VC Holdings. If that is excluded altogether then, on a like-for-like
basis, Gross Revenue actually rose by 7.59 per cent.
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
Capital Gains
Number
75
13
10
37
12
2
During the year the Company realised capital profits arising on the sale of investments in the sum of £158,922
(31 December 2010: £93,459).
Portfolio Review
Holdings of Begbies Traynor, Brulines, Communisis, Fiberweb, Hansard Global, KCOM, Office 2 Office, Smiths
News, St Ives, Timeweave, UK Mail and Wilmington were all purchased for the first time. Additional holdings of ACM
Shipping, Air Partner, Jarvis Securities, Matchtech, McKay Securities, Nationwide Accident Repair and Phoenix IT
were also acquired. ATH Resources, Chaucer Holdings, Clarke (T), Clarkson, Fenner, Group NBT, Hardy
Underwriting Bermuda, HMV, Morson Group, Omega Insurance, RSM Tenon, Smart (J) & Co, Tristel, Umeco and
Wincanton 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 4.95p per ordinary share (2010: 4.9p). This
represents an increase of 1per cent over the previous year. Subject to shareholder approval at the Annual General
Meeting on 18 April 2012, the dividend will be paid on 24 April 2012 to shareholders on the register on 16 March
2012.
6
Athelney Trust plc
CHAIRMAN’S STATEMENT AND BUSINESS REVIEW
(CONTINUED)
Update
The unaudited NAV at 29 February 2012 was 134.7p whereas the share price on the same day stood at 118.5p. Further
updates can be found on www.athelneytrust.co.uk
Prospects
Possibly a number of the risks so obvious in 2011 will not face today’s investor so, given the high level of cash and the
reduced attraction of safe havens, markets may well be less sensitive to disappointing news. However, the case for
predicting a strong equity market in early 2012 is still difficult to make because of the snail-like pace towards a
resolution in Europe, political risk in Italy and Greece, a possible change of government in France, the situation in Iran
and Syria and the lack of progress in reducing deficits in America and Japan. The outlook may be for a sideways
movement in equity markets with a modest upwards move but, importantly, with less risk. Later on in the year, we
may find that a solid rally evolves because of a combination of favourable factors such as a cooling of the row with
Iran, a Greek restructuring deal is struck, the IMF issues more funds, a weaker euro boosts exports, growth policies are
enacted throughout Europe and credible fiscal plans are put in place by America and Japan. Not all of these things
will happen but enough might to make investors feel much more confident.
Given the undervaluation of London and international markets, any combination of these factors could trigger
a rally later in 2012 which might surprise us all.
H.B. Deschampsneufs
Chairman
7 March 2012
7
Athelney Trust plc
CORPORATE GOVERNANCE STATEMENT
UK Corporate Governance Code
The Board is committed to achieving and demonstrating high standards of Corporate Governance as set out in the UK
Corporate Governance Code published in June 2010. The Corporate Governance Code can be found on the Financial
Reporting Council (FRC) website www.frc.org.uk. The Board considers that it has complied with all the provisions of
the Corporate Governance 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 Corporate Governance Code relating to corporate reporting, risk management and internal control
principles 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 Corporate Governance 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 five 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.
•
In consequence of being a company with only five Directors, a Directors’ and Officers’ Liability
Insurance policy has not been arranged but is a matter constantly under review by the Board.
The Board
The Board currently comprises:
Robin Boyle, Managing Director
Hugo Deschampsneufs, Chairman (non-executive)
David Horner, non-executive
Jonathan Addison, non-executive
Manny Pohl, alternate non-executive
Hugo Deschampsneufs and David Horner are members of the Audit Committee and the Remuneration Committee,
David Horner being Chairman of each Committee.
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Athelney Trust plc
CORPORATE GOVERNANCE STATEMENT
(CONTINUED)
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.
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.
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 five 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 and 3.
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 2011, the Board met four times
and all Directors were present at all Board Meetings except for Jon Addison and Manny Pohl who were absent for two
of the meetings.
Chairman and Senior Independent Director
The Chairman, 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.
Hugo Deschampsneufs and David Horner were appointed at the 2011 Annual General Meeting for a term to expire at
the next Annual General Meeting. All four non-executive Directors offer themselves for re-election at the forthcoming
Annual General Meeting.
9
Athelney Trust plc
CORPORATE GOVERNANCE STATEMENT
(CONTINUED)
Audit Committee
The Audit Committee comprises two of the independent Directors, with David Horner as Chairman. The Committee
met once during the year ended 31 December 2011. 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.
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.
Remuneration Committee
The Remuneration Committee comprises Hugo Deschampsneufs and David Horner. David 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 20 to 21 and in note 4 to the
financial statements.
The Committee met once during the year and both committee members were present at the meeting.
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.
All the directors have access to the advice and services of the company secretary.
Independent Professional Advice and Director’s Training
There is an agreed procedure for Directors to seek independent professional advice if necessary at the Company’s
expense.
The chairman liaises on a regular basis with the other Directors and the Company Secretary to ensure that they are
maintaining adequate training and continuing professional development.
10
Athelney Trust plc
CORPORATE GOVERNANCE STATEMENT
(CONTINUED)
Institutional Investors – Use of Voting Rights
The Investment Manager and Managing Director, 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.
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, Robin Boyle, and the Company Secretary, 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 company, 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.
11
Athelney Trust plc
CORPORATE GOVERNANCE STATEMENT
(CONTINUED)
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, Robin Boyle. The Manager votes
against resolutions he believes may damage shareholders’ rights or economic interests.
Re-appointment of non-executive Directors at the AGM
At the AGM the Chairman recommends the following non-executive Directors be proposed for re-election:-
David Horner – non-executive Director
Jonathan Lancelot Addison - non-executive Director
Dr Emmanuel Clive Pohl, alternate non-executive Director
The above non-executive Directors should be re-elected for the following reason:-
In each case they continue to be valued members of the board bringing fresh insight to the company using their
respective knowledge and experience in the management of other investment companies, and by their actions
demonstrate effective commitment to their roles.
7 March 2012
R.G. Boyle
Managing Director
12
Athelney Trust plc
INVESTMENT AND PORTFOLIO ANALYSIS AT 31 DECEMBER 2011
Stock
Holding
Value (£)
Chemicals
Construction and materials Alumasc
Treatt
Electronic and electrical
equipment
Food and beverages
General financial
Healthcare equipment and
services
Industrial engineering
Industrial transportation
Insurance
Media
Renew Holdings
XP Power Ltd
Wynnstay Group
Albemarle & Bond
Arbuthnot Banking Group
Camellia
Charles Taylor Consulting
Jarvis Securities
Park Group
Randall & Quilter Holdings
S & U
Consort Medical
Goodwin
Hill & Smith
Slingsby (H.C)
Vitec
ACM Shipping
Braemar Shipping Services
Fisher (James)
UK Mail
Chesnara
Hansard Global
Personal Group Holdings
Chime Communications
Haynes Publishing Group
Huntsworth
M&C Saatchi Plc
Quarto Group Inc Com
Wilmington Group
9,000
42,000
70,000
4,000
20,000
15,000
10,000
600
25,000
32,500
175,000
29,042
8,000
8,000
3,000
20,000
4,000
9,000
22,500
12,000
5,500
18,000
16,000
22,500
17,500
12,000
18,000
55,000
45,000
40,500
42,500
28,980
48,300
47,600
37,400
69,000
48,900
33,500
58,260
30,250
50,375
84,000
27,154
47,600
42,480
35,100
50,000
25,000
49,500
28,575
35,640
27,995
36,000
28,000
34,031
44,450
20,310
37,800
18,700
51,750
54,675
35,063
SECTOR
£
28,980
%
1.22%
95,900
4.04%
37,400
69,000
1.57%
2.90%
380,039
16.00%
42,480
1.79%
159,600
6.72%
128,210
5.40%
106,481
4.48%
218,298
9.19%
13
Athelney Trust plc
INVESTMENT AND PORTFOLIO ANALYSIS AT 31 DECEMBER 2011
(CONTINUED)
Stock
Holding
Value (£)
SECTOR
£
%
70,000
30,000
12,500
27,500
1,500
17,000
47,500
120,000
60,000
32,500
120,000
65,000
30,000
14,000
200,000
22,500
45,000
20,000
11,000
7,500
50,000
50,000
25,000
20,000
50,000
10,000
30,000
30,000
£
£
£
33,075
33,600
36,500
40,150
60,000
53,890
78,375
28,200
15,600
24,375
30,900
34,775
47,400
31,780
36,000
46,800
27,900
27,600
60,500
30,750
40,875
41,000
54,938
31,550
35,000
31,000
61,200
35,400
143,325
6.03%
60,000
2.53%
132,265
5.57%
28,200
1.19%
551,193
23.20%
31,550
35,000
1.33%
1.47%
127,600
5.37%
2,375,521
100%
62,172
2,437,693
1,983,081
Real Estate - REITs
Real Estate - Real Estate
Investments & Services
Retailers
Software and Computer
Services
Support services
Local Shopping REIT
McKay Securities
Mucklow Group
Town Centre Securities
Mountview Estates
H & T Group
Stanley Gibbons
Timeweave
Begbies Traynor
Brulines
Communisis
Fiberweb
Interior Services Group
Latham (James)
Macfarlane Group
Matchtech
Nationwide Accident Repair
Office 2 Office
Paypoint
RWS Holdings
Smiths News
St Ives
VP
Technology software and
services
Phoenix IT
Telecommunications
KCOM Group
Travel and leisure
Air Partner
Cineworld
GVC Holdings
Portfolio Value
Net Current Assets
TOTAL VALUE
Shares in issue
Audited NAV
123p
14
Athelney Trust plc
INVESTMENT AND PORTFOLIO ANALYSIS AT 31 DECEMBER 2011
(CONTINUED)
Portfolio By Sectors
1.22%
0.00%
5.37%
4.04%
1.47%
1.33%
1.57%
2.90%
23.20%
16.00%
1.79%
0.00%
6.72%
5.40%
4.48%
1.19%
5.57%
2.53%
6.03%
0.00%
9.19%
Aerospace and defence
Electronic and electrical equipment
Healthcare equipment and services
Industrial transportation
Mining
Retailers
Technology software and services
Chemicals
Food and beverages
House, leisure and personal goods
Insurance
Real Estate - REITs
Software and computer services
Telecommunications
Construction and materials
General financial
Industrial engineering
Media
Real Estate Investments & Services
Support Services
Travel and leisure
Portfolio By Listing
4%
39%
41%
16%
Non-Indexed
Small Caps
Fledgling
AIM
15
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
2011. 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 4 to 7.
Current and Future Developments
A review of the main features of the year and outlook is contained in the Chairman’s Statement and Business Review
on pages 4 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 one employee 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 13 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 2011
78,038
443,970
20,000
1 January 2011
78,038
443,970
20,000
H.B. Deschampsneufs’ interest includes 19,163 (2010: 19,163) shares held in his Self-Invested Personal Pension.
R.G. Boyle’s interest includes 16,970 (2010: 16,970) shares held in his Self-Invested Personal Pension. D.A. Horner’s
interest includes 20,000 (2010: 20,000) shares owned by a pension fund in which D.A. Horner has an interest. Dr. E.C.
Pohl holds an interest of 5,000 shares in Global Masters Fund and an effective 20% interest in Hyperion Asset
Management, a company that manages portfolios for clients who have a controlling interest in Global Masters Fund.
There have been no changes in the above Directors’ interests up to 29 February 2012.
16
REPORT OF THE DIRECTORS OF
Athelney Trust plc
(CONTINUED)
Included within R.G. Boyle’s holding is an interest in Trehellas House Limited, a company which holds 391,600
(2010: 391,600) ordinary shares representing 19.75 per cent of the company’s share capital. R.G. Boyle has separately
entered into an agreement with Hyperion Asset Management Limited giving Hyperion Asset Management Limited on
behalf of its clients the ability to acquire such number of shares from Trehellas House Limited as shall when taken
with their existing holding not exceed 29.9% of the issued equity share capital of the company. The price for any such
sale and purchase has been agreed at the net tangible asset value of each share as determined by the most recent
published statement. This agreement amounts to a right of first refusal only and there is no obligation on Trehellas
House Limited to sell its shares at any particular time or, having determined to sell those shares, no obligation on
Hyperion Asset Management Limited to buy.
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.
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 accounting 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.
Under applicable law and regulations, the Directors are also responsible for preparing a Directors’ Remuneration
Report and Corporate Governance Statement that comply with that law and those regulations.
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 which have been prepared in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law),give a true and
fair view of the assets, liabilities, financial position and net return of the company; and
- the Report of the Directors 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 that it
faces.
17
REPORT OF THE DIRECTORS OF
Athelney Trust plc
(CONTINUED)
Capital Structure
At 31 December 2011 the Company’s capital structure consisted of 1,983,081 Ordinary Shares of 25p each (2010:
1,983,081 Ordinary Shares of 25p each).
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 £107,296 (2010: £109,742) as detailed on
page 24.
It is recommended that a final dividend of 4.95 p (2010: 4.9p) per ordinary share be paid.
Significant Shareholders
The Directors have been notified of the following major shareholdings in the Company that represent greater than 3%
of the voting rights:
Mr R.G. Boyle
Global Masters Fund
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
Ordinary Shares
443,970
186,193
114,000
87,500
78,038
75,000
60,000
% of issue
22.39
9.39
5.75
4.41
3.94
3.78
3.03
There have been no changes in the above major shareholdings in the company up to 29 February 2012.
Tax Status
The Directors have considered the Close Company Tax Status of the Company and do not believe that the Company is
a Close Company.
18
REPORT OF THE DIRECTORS OF
Athelney Trust plc
(CONTINUED)
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 are accrued expenses outstanding at the end of the year, all of which appear as creditors in the
balance sheet.
Disclosure of Information to Auditors
Each of the persons who are directors at the time when the Report of the Directors 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 continue in 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.
BY ORDER OF THE BOARD
J. Girdlestone
Secretary
Waterside Court
Falmouth Road
Penryn
Cornwall
TR10 8AW
7 March 2012
19
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 22 and 23.
Remuneration Committee
The Company has a Remuneration Committee comprising Hugo Deschampsneufs and David Horner. David 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 2012. The remuneration of the non-executive Directors is 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 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 Robin Boyle giving six months’ written notice.
The service contracts for the four non-executive Directors, Hugo Deschampsneufs and David Horner, Jonathan
Addison and Manny Pohl 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 and 28 June 2010 (for Jonathan Addison and Manny Pohl) respectively.
Company Performance
The graph below compares, for the five financial years ended 31 December 2011, 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.
Athe lne y's Share holde r Re turn and NAV against Benchmarks of AIM All-Share and Small
Caps
(figure s have be en re base d to 100 at 31 De cembe r 2005)
140.00
130.00
120.00
110.00
100.00
90.00
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
Dec-07
Dec-08
Dec-09
Ye ar End
Dec-10
Dec-11
NAV
Shareholder Return *
AIM All Share
Small Caps
*Assuming all dividends are reinvested
Past Performance is no guarantee of future performance.
20
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)
Jonathan Addison (Non-executive)
Manny Pohl (alternate Non-executive)
2011
£
10,000
45,000
7,500
-
-
62,500
2010
£
10,000
45,000
7,500
-
-
62,500
Approval
The Directors’ Remuneration Report was approved by the Board on 7 March 2012.
J. Girdlestone
Company Secretary
21
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 2011, 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 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 page 17, 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 and express an opinion on 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. In addition, we read all the financial
and non-financial information in the annual report to identify material inconsistencies with the audited financial
statements. If we become aware of any apparent material misstatements or inconsistencies we consider the
implications for our report.
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 2011 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;
the information given in the Report of the Directors for the financial year for which the Financial Statements
are prepared is consistent with the Financial Statements; and
the information given in the Corporate Governance Statement set out on pages 8 to 12 with respect to internal
control and risk management systems in relation to financial reporting processes and about share capital
structures is consistent with the financial statements.
22
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; or
•
a Corporate Governance Statement has not been prepared by the Company.
Under the Listing Rules we are required to review:
•
•
•
the Directors’ Statement, set out in page 11, in relation to going concern;
the parts of the Corporate Governance Statement relating to the Company’s compliance with the nine
provisions of the UK Corporate Governance Code specified for our review; and
certain elements of the report to the shareholders by the Board on Directors’ Remuneration.
Simon Atkins FCA
Senior Statutory Auditor
for and on behalf of
Clement Keys
Chartered Accountants
Statutory Auditors
39/40 Calthorpe Road
Edgbaston
Birmingham
B15 1TS
7 March 2012
23
Athelney Trust plc
INCOME STATEMENT
(INCORPORATING THE REVENUE ACCOUNT)
For the Year Ended 31 December
2011
For the Year Ended 31 December
2010
Note Revenue
Capital
Total
Revenue
Capital
Total
£
£
£
£
£
£
(Losses)/gains on
investments held at fair
value
Income from
investments
Investment
Management expenses
Other expenses
8
2
3
3
Net return/(loss) on ordinary
-
(293,815)
(293,81
5)
-
411,470 411,470
139,558
-
139,558
142,303
- 142,303
(5,785)
(53,169)
(58,954)
(5,783)
(52,752)
(58,535)
(26,477)
(41,610)
(68,087)
(26,778)
(41,018)
(67,796)
activities before taxation
107,296
(388,594)
(281,29
8)
109,742
317,700 427,442
Taxation
5
-
-
-
-
-
-
Net return/(loss) on ordinary
activities after taxation 6
107,296
(388,594)
(281,29
8)
109,742
317,700 427,442
Net return/(loss) per
ordinary share
6
5.4p
(19.5p)
(14.1p)
5.7p
16.5p
22.2p
Dividend per ordinary share
paid during the year 7
4.9p
4.75p
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 12.
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 28 to 35 form part of these financial statements.
24
Athelney Trust plc
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
Called-up
Share
Share
Capital Premium
£
£
450,700
45,070
-
405,605
171,535
(31,859)
Capital
reserve
realised
£
620,562
-
-
Capital
Total
reserve Revenue Shareholders’
Funds
£
reserve
£
unrealised
£
633,701
-
-
179,039
-
-
2,289,607
216,605
(31,859)
-
-
-
-
-
-
-
-
-
-
93,459
-
-
318,011
-
-
(93,770)
-
-
-
-
-
-
109,742
(85,633)
93,459
318,011
(93,770)
109,742
(85,633)
495,770
545,281
620,251
951,712
203,148
2,816,162
495,770
545,281
620,251
951,712 203,148
2,816,162
-
-
-
-
-
-
-
-
-
-
-
-
158,922
-
-
(452,737)
(94,779)
(23,568)
-
-
-
23,568
-
- 107,296
(97,171)
-
-
-
-
158,922
(452,737)
(94,779)
-
107,296
(97,171)
495,770
545,281
660,826
522,543 213,273
2,437,693
Balance brought forward
at 1 January 2010
Issue of ordinary shares
Share issue costs
Net profits on realisation
of investments
Increase in unrealised
appreciation
Expenses allocated to
capital
Profit for the year
Dividend paid in year
Shareholders’ Funds at
31 December 2010
Balance brought forward
at 1 January 2011
Net profits on realisation
of investments
Decrease in unrealised
appreciation
Expenses allocated to
capital
Transfer between capital
reserves
Profit for the year
Dividend paid in year
Shareholders’ Funds at
31 December 2011
The notes on pages 28 to 35 form part of these financial statements.
25
Athelney Trust plc
BALANCE SHEET AS AT 31 DECEMBER 2011
Company Number: 02933559
Note
Fixed assets
Investments held at fair value through profit
and loss
Current assets
Debtors
Cash at bank and in hand
8
9
Creditors: amounts falling due within one
year
10
Net current assets
2011
£
2010
£
2,375,521
2,766,686
57,349
19,954
77,303
(15,131)
62,172
32,245
32,241
64,486
(15,010)
49,476
Total assets less current liabilities
2,437,693
2,816,162
Provisions for liabilities and charges
-
-
Net assets
2,437,693
2,816,162
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
11
12
12
12
12
14
495,770
545,281
660,826
522,543
213,273
495,770
545,281
620,251
951,712
203,148
2,437,693
2,816,162
123p
142p
Approved and authorised for issue by the Board of Directors on 7 March 2012
……………………………….
R.G. Boyle
Director
The notes on pages 28 to 35 form part of these financial statements
26
Athelney Trust plc
CASHFLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2011
2011
£
£
2010
£
£
Net cash (outflow)/inflow from operating
activities
Taxation
Corporation tax paid
Capital Expenditure and Financial
Investment
Purchases of investments
Sales of investments
Net cash inflow/(outflow) from Capital
Expenditure and Financial Investment
Equity dividends paid
Financing
Issue of ordinary share capital
Share issue costs
(Decrease)/increase in cash in the year
Reconciliation of operating net revenue to
net cash (outflow)/inflow from operating
activities
Revenue on ordinary activities before taxation
(Increase)/decrease in debtors
Increase/(decrease) in creditors
Investment management expenses charged to
capital
Other expenses charged to capital
Net Cash (outflow)/inflow from operating
activities
Reconciliation of net cashflow to movement
in net funds
Cash at bank and in hand
(12,466)
-
(550,494)
647,844
(487,124)
316,415
97,350
(97,171)
-
-
(12,287)
£
107,296
(25,104)
121
(53,169)
(41,610)
(12,466)
77,516
-
(170,709)
(85,633)
216,605
(31,859)
5,920
£
109,742
63,843
(2,299)
(52,752)
(41,018)
77,516
Net funds
at
31.12.2010
£
32,241
Cashflow
£
(12,287)
Net funds at
31.12.2011
£
19,954
The notes on pages 28 to 35 form part of these financial statements
27
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
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.
28
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
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 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 financial
statements in the year in which they are paid.
1.10 Share Issue Expenses
The costs associated with issuing shares are written off against any premium arising on the issue of Share
Capital.
2. Income
Income from investments
UK dividend income
Bank interest
Total income
UK dividend income
UK listed investments
AIM investments
2011
£
139,493
65
139,558
2011
£
85,531
53,962
139,493
2010
£
142,095
208
142,303
2010
£
84,093
58,002
142,095
29
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
3. Return on Ordinary Activities Before Taxation
2011
£
2010
£
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:
- Audit Services - Statutory audit
- Audit Services - Statutory audit movement on accruals from
previous years
- Audit Services - Audit related regulatory reporting
Miscellaneous expenses:
- Other wages and salaries
- 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
17,500
45,000
10,200
210
1,050
30,365
6,230
6,163
10,323
127,041
2011
£
62,500
5,729
68,229
22,500
2,136
24,636
85,000
7,865
92,865
17,500
45,000
9,960
904
1,146
30,454
3,051
8,061
10,255
126,331
2010
£
62,500
5,805
68,305
22,500
2,148
24,648
85,000
7,953
92,953
In the year ending 31 December 2010 in addition to the above costs, £5,000 gross wages and £640
Employers National Insurance costs were charged against the Share Premium Account to reflect the
administrative work undertaken by the Company Secretary in respect of the issue of Ordinary Shares.
Average number of employees:
Chairman
Investment
Administration
1
2
1
4
1
2
1
4
30
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
5. Taxation
(i) On the basis of these financial statements no provision has been made for corporation tax (2010: Nil).
(ii) Factors affecting the tax charge for the year
The tax charge for the period is higher than (2010:lower than) the average small company rate of
corporation tax in the UK
(20.25 per cent). The differences are explained below:
2011
£
2010
£
Total (loss)/ return on ordinary activities before tax
(281,298)
427,442
Total return on ordinary activities multiplied by the average
small company rate of corporation tax 20.25% (2010: 21%)
(56,963)
89,763
Effects of:
UK dividend income not taxable
Revaluation of shares not taxable
Capital gains not taxable
Unrelieved management expenses
Current tax charge for the year
(24,151)
91,679
(32,182)
21,617
-
(22,973)
(57,347)
(29,062)
19,619
-
The Company has unrelieved excess revenue management expenses of £43,155 at 31 December 2011 (2010:
£31,191) and £102,597 (2010: £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.
For the year ended 31 December 2010, the Company received approval from HM Revenue and Customs
under Section 1158 of the Corporation Tax Act 2010, therefore the Company was not liable to Corporation
Tax on any realised investment gains for 2010. 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”.
Attributable return/(loss) on
ordinary activities after
taxation
Weighted average number
of shares
£
Revenue
2011
£
Capital
£
Total
£
2010
£
Revenue Capital
£
Total
107,296
(388,594)
(281,298)
109,742
317,700
427,442
1,983,081
1,922,988
Return per ordinary share
5.4p
(19.5p)
(14.1p)
5.7p
16.5p 22.2p
31
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
7. Dividend
Final dividend in respect of 2010 of 4.9p (2009: an
interim dividend of 4.75p was paid in respect of 2009 )
per share
2011
£
97,171
2010
£
85,633
Set out below is the total dividend payable in respect of the financial year, which is the basis on which the
requirements of Section 1158 of the Corporation Tax Act 2010 are considered.
It is recommended that a final dividend of 4.95p (2010: 4.9p) per ordinary share be paid amounting to a total
of £98,162. For the year 2010, a final dividend of 4.9p was paid on 14 April 2011 amounting to a total of
£97,171.
Revenue available for distribution
Final dividend in respect of financial year ended
31 December 2011
Undistributed Revenue Reserve
8. Investments
Movements in year
Valuation at beginning of year
Purchases at cost
Sales - proceeds
- realised gains on sales
(Decrease)/increase 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
32
2011
£
107,296
(98,162)
9,134
2011
£
2,766,686
550,494
(647,844)
158,922
(452,737)
2,375,521
1,852,978
522,543
2,375,521
1,444,747
930,774
2,375,521
2010
£
109,742
(97,171)
12,571
2010
£
2,184,507
487,124
(316,415)
93,459
318,011
2,766,686
1,791,407
975,279
2,766,686
1,789,421
977,265
2,766,686
Athelney Trust plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
8. Investments (continued)
(Losses)/gains on investments
Realised gains on sales
(Decrease)/increase in unrealised appreciation
2011
£
158,922
(452,737)
(293,815)
2010
£
93,459
318,011
411,470
The purchase costs and sales proceeds above include transaction costs of £5,355 (2010: £2,052) and £3,178
(2010: £1,327) respectively.
9. Debtors
Investment transaction debtors
Other debtors
10. Creditors: amounts falling due within one year
Social security and other taxes
Other creditors
Accruals and deferred income
11. Called Up Share Capital
Authorised
10,000,000 Ordinary Shares of 25p
Allotted, called up and fully paid
1,983,081 Ordinary Shares of 25p
(2010: 1,983,081 Ordinary Shares of 25p)
2011
£
41,356
15,993
57,349
2011
£
3,049
930
11,152
15,131
2011
£
2010
£
17,432
14,813
32,245
2010
£
2,885
173
11,952
15,010
2010
£
2,500,000
2,500,000
495,770
495,770
33
Athelney Trust plc
FOR THE YEAR ENDED 31 DECEMBER 2011
NOTES TO THE FINANCIAL STATEMENTS
12. Reserves
Share
premium
account
£
545,281
-
-
-
-
-
-
545,281
2011
Capital
reserve
realised
£
620,251
158,922
-
(94,779)
-
-
(23,568)
660,826
Capital
reserve
unrealised
£
951,712
-
(452,737)
-
-
-
23,568
522,543
Revenue
reserve
£
203,148
-
-
-
107,296
(97,171)
-
213,273
Balance at 1 January 2011
Net gains on realisation of investments
Decrease in unrealised appreciation
Expenses allocated to capital
Profit for the year
Dividend paid in year
Transfer between capital reserves
Balance at 31 December 2011
13. 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 8) 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.
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 3.79 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.
34
Athelney Trust plc
FOR THE YEAR ENDED 31 DECEMBER 2011
NOTES TO THE FINANCIAL STATEMENTS
14. Net Asset Value Per Share
The net asset value per share is based on net assets of £2,437,693 (2010: £2,816,162) divided by 1,983,081
(2010: 1,983,081) ordinary shares in issue at the year end.
Net asset value
2011
2010
123p
142p
35
Athelney Trust plc
OFFICERS AND FINANCIAL ADVISERS
Directors:
H.B. Deschampsneufs (Chairman) Email: hugo@athelneytrust.co.uk
Email: robin@athelneytrust.co.uk
R.G. Boyle (Managing Director)
Email: dah@chelvertonam.com
D.A. Horner
Email: jladdison@bigpond.com
J.L. Addison
Email: manny.pohl@hyperionam.com.au
Dr. E.C. Pohl (Alternate Director)
Secretary:
J. Girdlestone
Waterside Court
Email: john@athelneytrust.co.uk
Tel: 01326 378 288
Registered Office:
Company Number:
Solicitor:
Stockbroker:
Auditors:
Banker:
Registrar:
Public Relations
Consultants:
Falmouth Road
Penryn
Cornwall, TR10 8AW
Waterside Court
Falmouth Road
Penryn
Cornwall, TR10 8AW
02933559
(Registered in England)
McClure Naismith LLP
49 Queen Street
Edinburgh
EH12 3NH
Speirs & Jeffrey Limited
36 Renfield Street
Glasgow, G2 1NA
Clement Keys
39/40 Calthorpe Road
Edgbaston
Birmingham, B15 1TS
HSBC Bank Plc
Market Street
Falmouth
Cornwall, TR11 3AA
Share Registrars Limited
Suite E First Floor
9 Lion & Lamb Yard
Farnham
Surrey, GU9 7LL
Website: www.athelneytrust.co.uk
Email: info@athelneytrust.co.uk
Tel: 01326 378 288
Email: awilliamson@mcclurenaismith.com
Tel: 0131 272 8378
Email: graeme.dickie@speirsjeffrey.co.uk
Tel: 0141 248 4311
Email: simon.atkins@clementkeys.co.uk
Tel: 0121 456 4456
Email: peter@shareregistrars.uk.com
Tel: 01252 821 390
City Road Communications
Limited
42-44 Carter Lane
London, EC4V 5EA
Email: paulquade@cityroad.uk.com
Tel: 0207 248 8010
36
Athelney Trust plc
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the seventeenth Annual General Meeting of the Company will be held at the
offices of McClure Naismith LLP, Solicitors, Equitable House, 47 King William Street, London EC4R 9AF on
Wednesday 18 April 2012 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 2011.
2. To declare a final dividend of 4.95p per ordinary share. It is intended that dividend cheques in respect of the
dividend will be posted on 24 April 2012 to all shareholders on the register of members at close of business
on Friday 16 March 2012.
3. To approve the Directors’ Remuneration Report for the year ended 31 December 2011.
4. To re-elect R.G. Boyle as a Director of the Company.
5. To re-elect H.B. Deschampsneufs as Director of the Company until the date of the next Annual General
Meeting.
6. To re-elect D.A. Horner as a Director of the Company until the date of the next Annual General Meeting (see
comments on page 12).
7. To re-elect J.L. Addison as a Director of the Company until the date of the next Annual General Meeting (see
comments on page 12).
8. To re-elect Dr. E.C. Pohl as an alternate Director of the Company until the date of the next Annual General
Meeting (see comments on page 12).
9. To re-appoint Clement Keys as Auditors and to authorise the Directors to fix their remuneration.
By Order of the Board
John Girdlestone
Secretary
7 March 2012
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.
37
Athelney Trust plc
NOTICE OF ANNUAL GENERAL MEETING
(ii)
The register of Directors’ interests kept in accordance with Section 177 of the Companies Act 2006 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.
38
Athelney Trust plc
NOTES
39
(cid:6)
Athelney Trust plc
FORM OF PROXY
To be used at the Annual General Meeting to be held at 4.30pm on 18 April 2012
I/We ___________________________________________________________________________________
BLOCK
of ______________________________________________________________________________________
CAPITALS
________________________________________________________________________________________
PLEASE
Being (a) shareholder(s) of Athelney Trust plc, hereby appoint the Chairman of the Meeting or (see Note (ii))
________________________________________________________________________________________
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 McClure Naismith LLP, Solicitors, Equitable House, 47 King William Street, London EC4R 9AF on
Wednesday 18 April 2012 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
8
9
To receive and adopt the accounts for the year ended 31 December 2011
To declare a final dividend of 4.95p per ordinary share
To approve the Directors’ Remuneration Report for the year ended 31
December 2011
To re-elect R.G. Boyle as a Director
To re-elect H.B. Deschampsneufs as a Director until the date of the next
Annual General Meeting
To re-elect D.A. Horner as a Director until the date of the next Annual
General Meeting (see comments on page 12).
To re-elect J.L. Addison as a Director until the date of the next Annual
General Meeting (see comments on page 12).
To re-elect Dr. E.C. Pohl as a Director until the date of the next Annual
General Meeting (see comments on page 12).
To re-appoint Clement Keys as Auditors and authorise the Directors to
fix the Auditors’ Remuneration
Signed_______________________________________________________Dated_____________________________
____
NOTES
40
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
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.
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 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 16 March 2012 (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.
41