Half-yearly report
Albion Development VCT PLC
As required by the UK Listing Authority's Disclosure and Transparency Rule 4.2, Albion Development VCT PLC today makes public its information relating to the Half-yearly Financial Report (which is unaudited) for the six months to 30 June 2013. This announcement was approved by the Board of Directors on 22 August 2013.
The full Half-yearly Financial Report, (which is unaudited) for the period to 30 June 2013 will shortly be sent to shareholders. Copies of the full Half-yearly Financial Report will be shown via the Albion Ventures LLP website by clicking www.albion-ventures.co.uk/ourfunds/AADV.htm. The Annual Report and Financial Statements for the period to 30 June 2013 will be available as a PDF document via a link under the 'Investor Centre' in the 'Financial Reports and Circulars' section.
Investment objectives
Albion Development VCT PLC (the "Company") is a venture capital trust which raised a total of £33.3 million through the issue of shares between 1999 and 2004. The C shares merged with the Ordinary shares in 2007.
A further £6.3 million was raised through an issue of new D shares in 2009/2010 and £5.0 million was raised for the Ordinary shares through the Albion VCTs Top Up Offers in 2011, 2012 and 2013. The funds raised will be invested in accordance with the Company's existing investment policy.
The Company's investment policy is intended to provide investors with a regular and predictable source of dividend income combined with the prospects of long term capital growth. This is achieved by establishing a diversified portfolio of holdings in smaller, unquoted companies whilst at the same time selecting and structuring investments in such a way as to balance the risks normally associated with investment in such companies. It is intended that this will be achieved as follows:
Through investment in a small number of higher risk companies with greater growth prospects in sectors such as software and computer services, and medical technology.
This is balanced by investment in more stable, often asset-backed investments that provide a strong income stream combined with a protection of capital. These include freehold-based businesses in the leisure sector, such as pubs and health clubs, as well as stable and profitable businesses in other sectors including business services and healthcare. Such investments will constitute the majority of investments by cost.
In neither category do investee companies normally have any external borrowings with a prior charge ranking ahead of the VCT.
Up to two-thirds of qualifying investments by cost comprise loan stock secured with a first charge on the investee company's assets.
Financial calendar
| Record date for second dividend | 6 September 2013 |
| Payment date for second dividend | 30 September 2013 |
| Financial year end | 31 December 2013 |
Financial highlights (unaudited)
| Ordinary shares | D shares | |||||
| Unaudited six months ended 30 June 2013 (pence per share) | Unaudited six months ended 30 June 2012 (pence per share) | Audited year ended 31 December 2012 (pence per share) | Unaudited six months ended 30 June 2013 (pence per share) | Unaudited six months ended 30 June 2012 (pence per share) | Audited year ended 31 December 2012 (pence per share) | |
| Net asset value | 74.60 | 73.90 | 74.00 | 101.50 | 94.70 | 97.90 |
| Dividends paid | 2.50 | 2.50 | 5.00 | 2.50 | 1.75 | 3.50 |
| Revenue return | 0.60 | 0.70 | 1.50 | 1.90 | 1.00 | 1.90 |
| Capital return | 2.50 | 0.20 | 2.00 | 4.10 | 2.50 | 6.50 |
| Net asset value uplift from buy-backs | - | - | - | 0.10 | - | - |
| Ordinary shares (pence per share) (i) | C shares (pence per share) (i) | D shares (pence per share) (i) | ||
| Total shareholder net asset value return to 30 June 2013 | ||||
| Total dividends paid during the period ended: | ||||
| 31 December 1999(ii) | 1.00 | - | - | |
| 31 December 2000 | 2.90 | - | - | |
| 31 December 2001 | 3.95 | - | - | |
| 31 December 2002 | 4.20 | - | - | |
| 31 December 2003(iii) | 4.50 | 0.75 | - | |
| 31 December 2004 | 4.00 | 2.00 | - | |
| 31 December 2005 | 5.20 | 5.90 | - | |
| 31 December 2006 | 3.00 | 4.50 | - | |
| 31 December 2007(iv) | 5.00 | 5.36 | - | |
| 31 December 2008(iv) | 12.00 | 12.86 | - | |
| 31 December 2009(iv) | 4.00 | 4.29 | - | |
| 31 December 2010(iv) | 8.00 | 8.58 | 1.00 | |
| 31 December 2011(iv) | 5.00 | 5.36 | 2.50 | |
| 31 December 2012(iv) | 5.00 | 5.36 | 3.50 | |
| 30 June 2013(iv) | 2.50 | 2.68 | 2.50 | |
| Total dividends paid to 30 June 2013 | 70.25 | 57.64 | 9.50 | |
| Net asset value as at 30 June 2013(iv) | 74.60 | 79.93 | 101.50 | |
| Total shareholder net asset value return to 30 June 2013 | 144.85 | 137.57 | 111.00 | |
The Directors have declared a second dividend of 2.50 pence per Ordinary share and 2.50 pence per D share payable on 30 September 2013 to shareholders on the register as at 6 September 2013.
Notes
(i) Excludes tax benefits upon subscription.
(ii) Assuming subscription for Ordinary shares by the First Closing on 26 January 1999.
(iii) Those subscribing for C shares after 30 June 2003 were not entitled to the interim dividend.
(iv) The C shares were converted into Ordinary shares on 31 March 2007, with a conversion ratio of 1.0715 Ordinary shares for each C share. The net asset value per share and all dividends paid subsequent to the conversion of the C shares to the Ordinary shares are multiplied by the conversion factor of 1.0715 in respect of the C shares return, in order to give an accurate picture of the shareholder value since launch relating to the C shares.
Interim management report
Introduction
The results for Albion Development VCT PLC for the six months to 30 June 2013 show a total return of 3.10 pence per Ordinary share and 6.00 pence per D share. This is a marked improvement from the same period last year of 0.90 pence per Ordinary share and 3.50 pence per D share. Net asset value is 74.60 pence per Ordinary share and 101.50 pence per D share, after payment in each case of a 2.50 pence per share dividend.
Investment performance and progress
During the period, some £1.57 million was invested by the Ordinary share portfolio and £122,000 by the D share portfolio. The largest investment was £917,000 into GWH Acquisition by the Ordinary shares, which will construct and operate a new hydro electric plant in Northwest Scotland. In addition, both classes of share invested in MyMeds&Me, a healthcare IT company which provides reporting systems for drug performance.
The Nelson House psychiatric hospital in Hampshire was sold during the period, resulting in proceeds, including income, of 1.4 times cost. Shortly after the period end Opta Sports Data was sold resulting in a return of 3.3 times cost and Prime Care, whose domiciliary care services had been adversely affected by local authority funding cuts, was sold for a return of just over 50 per cent of cost. The valuations of these investments as at 30 June 2013 reflect the subsequent sales consideration.
In general, the investment portfolio for both classes of share performed well, with particular encouraging performance from the renewable energy businesses and from Hilson Moran (engineering consultancy). The Ordinary share portfolio benefited not only from the sale of Opta Sports Data, but also from continued growth at Mirada Medical. Against this there were further write-downs against Consolidated PR and Helveta. Looking forward, we see the prospects of further growth in a number of our portfolio companies across a broad spectrum of the sectors in which we are involved.
Portfolio split as at 30 June 2013
Set out at the bottom of this announcement is the sector diversification of the portfolio of investments for Ordinary and D shares as at 30 June 2013.
Businesses in the Albion Development VCT portfolio employ approximately 2,200 people.
Risks, uncertainties and prospects
The outlook for the UK and international economies continues to be the key risk affecting our Company, though it is encouraging that the UK economy has resumed growth. The VCT's emphasis on a balanced portfolio across asset-based and high-growth sectors is designed to provide protection against the vicissitudes of the global economy. Investment risk is further mitigated by our policy of ensuring that portfolio companies do not normally have external bank borrowings.
Other risks and uncertainties remain unchanged and these are detailed in note 15.
Share buy-backs and share price discount
It remains the Company's policy to buy back shares in the market subject to the overall constraint that such purchases are in the Company's interest. This includes the maintenance of sufficient cash resources for investment in new and existing portfolio companies and for the continued payment of dividends to shareholders. It is the Board's intention for such buy-backs to be in the region of a 5 per cent. discount to net asset value, so far as market conditions and liquidity permit.
Albion VCTs Top Up Offers 2012/2013
The third of the top up offers across six of the VCTs managed by Albion Ventures LLP closed on 12 June 2013 and raised a total of £12.8 million (2012: £10.5 million), of which Albion Development VCT PLC's net share was £1.8 million (2012: £1.5 million). The proceeds will be used to provide further resources for both the existing portfolio and for new opportunities.
Results and dividends
At 30 June 2013 the net asset value per Ordinary share was 74.60 pence (30 June 2012: 73.90 pence; 31 December 2012: 74.00 pence). The D share net asset value at 30 June 2013 was 101.50 pence (30 June 2012: 94.70 pence; 31 December 2012: 97.90 pence).
The Ordinary share portfolio's total return before tax for the six months to 30 June 2013 was £1,025,000 (30 June 2012: £306,000; 31 December 2012: £1,138,000) and for the D shares it was £404,000 (30 June 2012: £230,000; 31 December 2012: £550,000). The Company will pay a second dividend for the financial year to 31 December 2013 of 2.50 pence per Ordinary share and 2.50 pence per D share on 30 September 2013 to those shareholders on the register on 6 September 2013.
Transactions with the Manager
Details of the transactions that took place with the Manager in the period can be found in note 5.
Board change
David Pinckney, who had been a Director since the Company's launch, retired from the Board at the AGM on 6 June 2013. On behalf of the Board and all shareholders, I would like to thank him for his many years of wise counsel.
Outlook
It is encouraging to see some further proof of the recovery in the investment portfolio. Much of this is driven by the fact that a number of businesses in which the Company has invested operate in sectors where the market dynamics are showing strong growth despite the broader background of a subdued global environment. We therefore continue to remain positive over the Company's prospects for the medium term.
Geoffrey Vero
Chairman
22 August 2013
Responsibility statement
The Directors, Geoffrey Vero, Jonathan Thornton and Andy Phillipps are responsible for preparing the Half-yearly Financial Report. The Directors have chosen to prepare this Half-yearly Financial Report for the Company in accordance with United Kingdom Generally Accepted Accounting Practice ("UK GAAP").
In preparing these summarised Financial Statements for the period to 30 June 2013, we the Directors of the Company, confirm that to the best of our knowledge:
(a) the summarised set of Financial Statements has been prepared in accordance with the pronouncement on interim reporting issued by the Accounting Standards Board;
(b) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year);
(c) the summarised set of Financial Statements give a true and fair view in accordance with UK GAAP of the assets, liabilities, financial position and profit and loss of the Company for the six months ended 30 June 2013 and comply with UK GAAP and Companies Act 1985 and 2006; and
(d) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).
The accounting policies applied to the Half-yearly Financial Report have been consistently applied in current and prior periods and are those applied in the Annual Report and Financial Statements for the year ended 31 December 2012.
This Half-yearly Financial Report has not been audited or reviewed by the Auditor.
By order of the Board
Geoffrey Vero
Chairman
22 August 2013
Portfolio of investments (unaudited)
Ordinary shares
The following is a summary of fixed asset investments as at 30 June 2013:
| As at 30 June 2013 (unaudited) | |||||
| Portfolio company | % voting rights | Cost £'000 | Cumulative movement in value £'000 | Value £'000 | Change in value for the period * £'000 |
| Asset-backed investments | |||||
| The Weybridge Club Limited | 9.4 | 1,520 | (267) | 1,253 | 6 |
| Radnor House School (Holdings) Limited | 4.2 | 734 | 339 | 1,073 | 23 |
| The Street by Street Solar Programme Limited | 8.6 | 862 | 133 | 995 | 130 |
| GWH Acquisition Limited | 16.7 | 917 | - | 917 | - |
| Alto Prodotto Wind Limited | 7.8 | 705 | 201 | 906 | 201 |
| Albion Investment Properties Limited | 48.4 | 929 | (159) | 770 | 20 |
| Bravo Inns II Limited | 4.8 | 690 | 1 | 691 | 5 |
| Kensington Health Clubs Limited | 4.9 | 1,124 | (453) | 671 | (37) |
| Regenerco Renewable Energy Limited | 6.4 | 612 | 34 | 646 | 34 |
| Taunton Hospital Limited | 9.1 | 576 | 16 | 592 | 65 |
| Tower Bridge Health Clubs Limited | 7.9 | 322 | 212 | 534 | 65 |
| The Q Garden Company Limited | 16.6 | 1,198 | (788) | 410 | (35) |
| The Charnwood Pub Company Limited | 3.3 | 1,008 | (638) | 370 | (35) |
| AVESI Limited | 8.0 | 248 | - | 248 | - |
| TEG Biogas (Perth) Limited | 3.0 | 182 | 19 | 201 | 6 |
| Dragon Hydro Limited | 5.5 | 187 | - | 187 | - |
| Bravo Inns Limited | 2.6 | 230 | (81) | 149 | 4 |
| Greenenerco Limited | 4.0 | 140 | 1 | 141 | 1 |
| Premier Leisure (Suffolk) Limited | 6.5 | 480 | (377) | 103 | (1) |
| The Dunedin Pub Company VCT Limited | 6.2 | 60 | (3) | 57 | - |
| Orchard Portman Hospital Limited | n/a | 9 | - | 9 | - |
| Total asset-backed investments | 12,733 | (1,810) | 10,923 | 452 | |
| As at 30 June 2013 (unaudited) | |||||
| Portfolio company | % voting rights | Cost £'000 | Cumulative movement in value £'000 | Value £'000 | Change in value for the period * £'000 |
| Growth investments | |||||
| Blackbay Limited | 7.4 | 819 | 389 | 1,208 | 63 |
| Peakdale Molecular Limited | 8.9 | 908 | 163 | 1,071 | 151 |
| Lowcosttravelgroup Limited | 4.0 | 435 | 619 | 1,054 | - |
| Mirada Medical Limited | 8.0 | 240 | 550 | 790 | 212 |
| Opta Sports Data Limited | 1.3 | 165 | 365 | 530 | 274 |
| Hilson Moran Holdings Limited | 7.5 | 409 | 115 | 524 | 140 |
| DySIS Medical Limited | 4.0 | 462 | 27 | 489 | 103 |
| Mi-Pay Limited | 5.0 | 712 | (226) | 486 | (26) |
| Proveca Limited | 6.0 | 283 | 5 | 288 | 5 |
| Helveta Limited | 5.1 | 751 | (487) | 264 | (116) |
| Process Systems Enterprise Limited | 1.1 | 118 | 164 | 282 | 38 |
| Rostima Holdings Limited | 4.8 | 179 | 74 | 253 | (19) |
| Masters Pharmaceuticals Limited | 1.0 | 195 | 31 | 226 | 29 |
| Prime Care Holdings Limited | 9.4 | 559 | (334) | 225 | (32) |
| Consolidated PR Limited | 21.7 | 623 | (411) | 212 | (212) |
| AMS Sciences Limited | 4.2 | 194 | (9) | 185 | (26) |
| MyMeds&Me Limited | 3.5 | 175 | 4 | 179 | 4 |
| memsstar Limited | 1.8 | 124 | (5) | 119 | (26) |
| Oxsensis Limited | 1.4 | 213 | (118) | 95 | (1) |
| Chichester Holdings Limited | 10.6 | 700 | (609) | 91 | - |
| Abcodia Limited | 1.7 | 60 | - | 60 | - |
| Total growth investments | 8,324 | 307 | 8,631 | 561 | |
| Total investments | 21,057 | (1,503) | 19,554 | 1,013 | |
| Realised loss in the current period | (5) | ||||
| Movement in loan stock accrued interest | (21) | ||||
| Total gains on investments as per income statement | 987 | ||||
* as adjusted for additions, disposals and restructuring during the period
| Investment realisations in the period to 30 June 2013 | Cost £'000 | Open carrying value £'000 | Disposal proceeds £'000 | Total realized (loss)/gain £'000 | Gain/(loss) on opening value £'000 |
| Chichester Holdings Limited | 277 | 277 | 277 | - | - |
| DySIS Medical Limited (restructuring) | 444 | 444 | 444 | - | - |
| Evolutions Group Limited | 77 | 11 | 11 | (66) | - |
| Hilson Moran Holdings Limited (loan stock repayment) | 124 | 149 | 153 | 29 | 4 |
| Masters Pharmaceuticals Limited (loan stock repayment) | 7 | 8 | 8 | 1 | - |
| Nelson House Hospital Limited | 292 | 372 | 364 | 72 | (8) |
| The Dunedin Pub Company VCT Limited (loan stock repayment) | 3 | 2 | 2 | (1) | - |
| The GB Pub Company VCT Limited | 168 | 13 | 12 | (156) | (1) |
| The Q Garden Company Limited (loan stock repayment) | 16 | 16 | 16 | - | - |
| Tower Bridge Health Clubs Limited (loan stock repayment) | 40 | 40 | 40 | - | - |
| Total | 1,448 | 1,332 | 1,327 | (121) | (5) |
Portfolio of investments
D shares
The following is a summary of fixed asset investments as at 30 June 2013:
| As at 30 June 2013 (unaudited) | |||||
| Portfolio company | % voting rights | Cost £'000 | Cumulative movement in value £'000 | Value £'000 | Change in value for the period * £'000 |
| Asset-backed investments | |||||
| Radnor House School (Holdings) Limited | 4.6 | 800 | 384 | 1,184 | 26 |
| Regenerco Renewable Energy Limited | 5.5 | 528 | 30 | 558 | 29 |
| TEG Biogas (Perth) Limited | 7.1 | 428 | 46 | 474 | 16 |
| The Street by Street Solar Programme Limited | 3.8 | 380 | 57 | 437 | 57 |
| Bravo Inns II Limited | 1.6 | 210 | 13 | 223 | 2 |
| Alto Prodotto Wind Limited | 1.5 | 137 | 39 | 176 | 39 |
| AVESI Limited | 2.5 | 76 | - | 76 | - |
| Total asset-backed investments | 2,559 | 569 | 3,128 | 169 | |
| As at 30 June 2013 (unaudited) | |||||
| Portfolio company | % voting rights | Cost £'000 | Cumulative movement in value £'000 | Value £'000 | Change in value for the period * £'000 |
| Growth investments | |||||
| Masters Pharmaceuticals Limited | 2.6 | 488 | 74 | 562 | 70 |
| Hilson Moran Holdings Limited | 4.0 | 218 | 62 | 280 | 75 |
| Proveca Limited | 2.1 | 98 | 2 | 100 | 2 |
| Abcodia Limited | 2.1 | 75 | - | 75 | - |
| MyMeds&Me Limited | 1.2 | 60 | 1 | 61 | 1 |
| Total growth investments | 939 | 139 | 1,078 | 148 | |
| Total investments | 3,498 | 708 | 4,206 | 317 | |
| Realised loss in the current period | (21) | ||||
| Movement in loan stock accrued interest | 2 | ||||
| Total gains on investments as per income statement | 298 | ||||
* as adjusted for additions and disposals during the period
| Investment realisations in the period to 30 June 2013 | Cost £'000 | Open carrying value £'000 | Disposal proceeds £'000 | Total realised gain £'000 | Gain/(loss) on opening value £'000 |
| Hilson Moran Holdings Limited (loan stock repayment) | 66 | 79 | 81 | 15 | 2 |
| Masters Pharmaceuticals Limited (loan stock repayment) | 18 | 20 | 20 | 2 | - |
| Nelson House Hospital Limited | 839 | 1,067 | 1,044 | 205 | (23) |
| Total | 923 | 1,166 | 1,145 | 222 | (21) |
Summary income statement (unaudited)
(Combined)
| Unaudited six months ended 30 June 2013 | Unaudited six months ended 30 June 2012 | Audited year ended 31 December 2012 | ||||||||
| Note | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | |
| Gains on investments | 3 | - | 1,285 | 1,285 | - | 403 | 403 | - | 1,410 | 1,410 |
| Investment income | 4 | 594 | - | 594 | 583 | - | 583 | 1,177 | - | 1,177 |
| Investment management fees | 5 | (87) | (261) | (348) | (82) | (246) | (328) | (165) | (499) | (664) |
| Other expenses | (102) | - | (102) | (122) | - | (122) | (235) | - | (235) | |
| Return on ordinary activities before tax | 405 | 1,024 | 1,429 | 379 | 157 | 536 | 777 | 911 | 1,688 | |
| Tax (charge)/credit on ordinary activities | (88) | 61 | (27) | (91) | 63 | (28) | (172) | 128 | (44) | |
| Return attributable to shareholders | 317 | 1,085 | 1,402 | 288 | 220 | 508 | 605 | 1,039 | 1,644 | |
Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 June 2012 and the audited statutory accounts for the year ended 31 December 2012.
The accompanying notes form an integral part of this Half-yearly Financial Report.
The total column of this Summary income statement represents the profit and loss account of the Company. The supplementary revenue and capital columns have been prepared in accordance with The Association of Investment Companies' Statement of Recommended Practice.
All revenue and capital items in the above statement derive from continuing operations.
There are no recognised gains or losses other than the results for the periods disclosed above. Accordingly, a Statement of total recognised gains and losses is not required. The difference between the reported return on ordinary activities before tax and the historical profit is due to the fair value movements on investments. Accordingly, a note on historical cost profit and losses has not been prepared.
Summary income statement (unaudited)
(Ordinary shares)
| Unaudited six months ended 30 June 2013 | Unaudited six months ended 30 June 2012 | Audited year ended 31 December 2012 | ||||||||
| Note | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | |
| Gains on investments | 3 | - | 987 | 987 | - | 206 | 206 | - | 921 | 921 |
| Investment income | 4 | 394 | - | 394 | 457 | - | 457 | 928 | - | 928 |
| Investment management fees | 5 | (69) | (208) | (277) | (65) | (196) | (261) | (132) | (396) | (528) |
| Other expenses | (79) | - | (79) | (96) | - | (96) | (183) | - | (183) | |
| Return on ordinary activities before tax | 246 | 779 | 1,025 | 296 | 10 | 306 | 613 | 525 | 1,138 | |
| Tax (charge)/credit on ordinary activities | (53) | 47 | (6) | (71) | 50 | (21) | (132) | 101 | (31) | |
| Return attributable to shareholders | 193 | 826 | 1,019 | 225 | 60 | 285 | 481 | 626 | 1,107 | |
| Basic and diluted return per share (pence)* | 7 | 0.60 | 2.50 | 3.10 | 0.70 | 0.20 | 0.90 | 1.50 | 2.00 | 3.50 |
* excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 June 2012 and the audited statutory accounts for the year ended 31 December 2012.
The accompanying notes form an integral part of this Half-yearly Financial Report.
The total column of this Summary income statement represents the profit and loss account of the Company. The supplementary revenue and capital columns have been prepared in accordance with The Association of Investment Companies' Statement of Recommended Practice.
All revenue and capital items in the above statement derive from continuing operations.
There are no recognised gains or losses other than the results for the periods disclosed above. Accordingly, a Statement of total recognised gains and losses is not required. The difference between the reported return on ordinary activities before tax and the historical profit is due to the fair value movements on investments. Accordingly, a note on historical cost profit and losses has not been prepared.
Summary income statement (unaudited)
(D shares)
| Unaudited six months ended 30 June 2013 | Unaudited six months ended 30 June 2012 | Audited year ended 31 December 2012 | ||||||||
| Note | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | |
| Gains on investments | 3 | - | 298 | 298 | - | 197 | 197 | - | 489 | 489 |
| Investment income | 4 | 200 | - | 200 | 126 | - | 126 | 249 | - | 249 |
| Investment management fees | 5 | (18) | (53) | (71) | (17) | (50) | (67) | (33) | (103) | (136) |
| Other expenses | (23) | - | (23) | (26) | - | (26) | (52) | - | (52) | |
| Return on ordinary activities before tax | 159 | 245 | 404 | 83 | 147 | 230 | 164 | 386 | 550 | |
| Tax (charge)/credit on ordinary activities | (35) | 14 | (21) | (20) | 13 | (7) | (40) | 27 | (13) | |
| Return attributable to shareholders | 124 | 259 | 383 | 63 | 160 | 223 | 124 | 413 | 537 | |
| Basic and diluted return per share (pence)* | 7 | 1.90 | 4.10 | 6.00 | 1.00 | 2.50 | 3.50 | 1.90 | 6.50 | 8.40 |
* excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 June 2012 and the audited statutory accounts for the year ended 31 December 2012.
The accompanying notes form an integral part of this Half-yearly Financial Report.
The total column of this Summary income statement represents the profit and loss account of the Company. The supplementary revenue and capital columns have been prepared in accordance with The Association of Investment Companies' Statement of Recommended Practice.
All revenue and capital items in the above statement derive from continuing operations.
There are no recognised gains or losses other than the results for the periods disclosed above. Accordingly, a Statement of total recognised gains and losses is not required. The difference between the reported return on ordinary activities before tax and the historical profit is due to the fair value movements on investments. Accordingly, a note on historical cost profit and losses has not been prepared.
Summary balance sheet (unaudited)
(Combined)
| Note | Unaudited 30 June 2013 £'000 | Unaudited 30 June 2012 £'000 | Audited 31 December 2012 £'000 | |
| Fixed asset investments | 23,760 | 23,595 | 22,540 | |
| Current assets | ||||
| Trade and other debtors | 39 | 120 | 282 | |
| Current asset investments | 30 | 1,630 | 530 | |
| Cash at bank and in hand | 10 | 8,424 | 4,711 | 7,131 |
| 8,493 | 6,461 | 7,943 | ||
| Creditors: amounts falling due within one year | (335) | (435) | (378) | |
| Net current assets | 8,158 | 6,026 | 7,565 | |
| Net assets | 31,918 | 29,621 | 30,105 | |
| Capital and reserves | ||||
| Called up share capital | 440 | 20,863 | 421 | |
| Share premium | 2,254 | 1,129 | 392 | |
| Capital redemption reserve | 8 | 2,203 | 2 | |
| Unrealised capital reserve | (864) | (2,358) | (2,046) | |
| Realised capital reserve | 3,451 | 2,148 | 3,326 | |
| Other distributable reserve | 26,629 | 5,636 | 28,010 | |
| Total equity shareholders' funds | 31,918 | 29,621 | 30,105 |
Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 June 2012 and the audited statutory accounts for the year ended 31 December 2012.
The accompanying notes form an integral part of this Half-yearly Financial Report.
These Financial Statements were approved by the Board of Directors and authorised for issue on 22 August 2013, and were signed on its behalf by
Geoffrey Vero
Chairman
Company number: 3654040
Summary balance sheet (unaudited)
(Ordinary shares)
| Note | Unaudited 30 June 2013 £'000 | Unaudited 30 June 2012 £'000 | Audited 31 December 2012 £'000 | |
| Fixed asset investments | 19,554 | 19,028 | 17,606 | |
| Current assets | ||||
| Trade and other debtors | 29 | 107 | 202 | |
| Current asset investments | 30 | 880 | 30 | |
| Cash at bank and in hand | 10 | 6,122 | 3,926 | 6,309 |
| 6,181 | 4,913 | 6,541 | ||
| Creditors: amounts falling due within one year | (250) | (349) | (287) | |
| Net current assets | 5,931 | 4,564 | 6,254 | |
| Net assets | 25,485 | 23,592 | 23,860 | |
| Capital and reserves | ||||
| Called up share capital | 8 | 376 | 17,681 | 357 |
| Share premium | 2,231 | 1,122 | 383 | |
| Capital redemption reserve | 8 | 2,203 | 2 | |
| Unrealised capital reserve | (1,554) | (2,681) | (2,661) | |
| Realised capital reserve | 3,455 | 2,297 | 3,514 | |
| Other distributable reserve | 20,969 | 2,970 | 22,265 | |
| Total equity shareholders' funds | 25,485 | 23,592 | 23,860 | |
| Net asset value per share (pence) * | 74.60 | 73.90 | 74.00 |
*excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 June 2012 and the audited statutory accounts for the year ended 31 December 2012.
The accompanying notes form an integral part of this Half-yearly Financial Report.
Summary balance sheet (unaudited)
(D shares)
| Note | Unaudited 30 June 2013 £'000 | Unaudited 30 June 2012 £'000 | Audited 31 December 2012 £'000 | |
| Fixed asset investments | 4,206 | 4,567 | 4,934 | |
| Current assets | ||||
| Trade and other debtors | 10 | 13 | 80 | |
| Current asset investments | - | 750 | 500 | |
| Cash at bank and in hand | 10 | 2,302 | 785 | 822 |
| 2,312 | 1,548 | 1,402 | ||
| Creditors: amounts falling due within one year | (85) | (86) | (91) | |
| Net current assets | 2,227 | 1,462 | 1,311 | |
| Net assets | 6,433 | 6,029 | 6,245 | |
| Capital and reserves | ||||
| Called up share capital | 8 | 64 | 3,182 | 64 |
| Share premium | 23 | 7 | 9 | |
| Unrealised capital reserve | 690 | 323 | 615 | |
| Realised capital reserve | (4) | (149) | (188) | |
| Other distributable reserve | 5,660 | 2,666 | 5,745 | |
| Total equity shareholders' funds | 6,433 | 6,029 | 6,245 | |
| Net asset value per share (pence) * | 101.50 | 94.70 | 97.90 |
*excluding treasury shares
Comparative figures have been extracted from the unaudited Half-yearly Financial Report for the six months ended 30 June 2012 and the audited statutory accounts for the year ended 31 December 2012.
The accompanying notes form an integral part of this Half-yearly Financial Report.
Summary reconciliation of movements in shareholders' funds (unaudited)
(Combined)
| Called-up share capital | Share premium | Capital redemption reserve | Unrealised capital reserve* | Realised capital reserve* | Other distributable reserve* | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| As at 1 January 2013 (audited) | 421 | 392 | 2 | (2,046) | 3,326 | 28,010 | 30,105 |
| Return/(loss) for the period | - | - | - | 1,311 | (226) | 317 | 1,402 |
| Transfer of unrealised gains to realised gains | - | - | - | (129) | 129 | - | - |
| Purchase of shares for treasury | - | - | - | - | - | (36) | (36) |
| Purchase of shares for cancellation | (6) | - | 6 | - | - | (440) | (440) |
| Issue of equity (net of costs) | 25 | 1,862 | - | - | - | - | 1,887 |
| Transfer from other distributable reserve to realised capital reserve | - | - | - | - | 222 | (222) | - |
| Dividends paid | - | - | - | - | - | (1,000) | (1,000) |
| As at 30 June 2013 (unaudited) | 440 | 2,254 | 8 | (864) | 3,451 | 26,629 | 31,918 |
| Called- up share capital | Share premium | Capital redemption reserve | Unrealised capital reserve* | Realised capital reserve* | Other distributable reserve* | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| As at 1 January 2012 (audited) | 20,088 | 636 | 1,917 | (3,143) | 2,713 | 6,603 | 28,814 |
| Return/(loss) for the period | - | - | - | 398 | (178) | 288 | 508 |
| Transfer of unrealised losses to realised losses | - | - | - | 387 | (387) | - | - |
| Cancellation of treasury shares | (20) | - | 20 | - | - | - | - |
| Purchase of shares for cancellation | (266) | - | 266 | - | - | (345) | (345) |
| Issue of equity (net of costs) | 1,061 | 493 | - | - | - | - | 1,554 |
| Dividends paid | - | - | - | - | - | (909) | (909) |
| As at 30 June 2012 (unaudited) | 20,863 | 1,129 | 2,203 | (2,358) | 2,148 | 5,636 | 29,621 |
| Called- up share capital | Share premium | Capital redemption reserve | Unrealised capital reserve* | Realised capital reserve* | Other distributable reserve* | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| As at 1 January 2012 (audited) | 20,088 | 636 | 1,917 | (3,143) | 2,713 | 6,603 | 28,814 |
| Return/(loss) for the year | - | - | - | 1,058 | (19) | 605 | 1,644 |
| Transfer of unrealised losses to realised losses | - | - | - | 39 | (39) | - | - |
| Reduction in share capital and cancellation of capital redemption and share premium reserves | (20,446) | (1,139) | (2,204) | - | - | 23,789 | - |
| Cancellation of treasury shares | (20) | - | 20 | - | - | - | - |
| Purchase of shares for cancellation | (269) | - | 269 | - | - | (499) | (499) |
| Issue of equity (net of costs) | 1,068 | 895 | - | - | - | - | 1,963 |
| Transfer from other distributable reserve to realised capital reserve | - | - | - | - | 671 | (671) | - |
| Dividends paid | - | - | - | - | - | (1,817) | (1,817) |
| As at 31 December 2012 (audited) | 421 | 392 | 2 | (2,046) | 3,326 | 28,010 | 30,105 |
*Included within these reserves is an amount of £29,216,000 (30 June 2012: £5,426,000; 31 December 2012: £29,290,000) which is considered distributable.
A transfer of £222,000 (30 June 2012: nil; 31 December 2012: £671,000) representing gross realised losses on disposal of investments during the period ended 30 June 2013 has been made from the other distributable reserve to the realised capital reserve.
Summary reconciliation of movements in shareholders' funds (unaudited)
(Ordinary shares)
| Called- up share capital | Share premium | Capital redemption reserve | Unrealised capital reserve* | Realised capital reserve* | Other distributable reserve* | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| As at 1 January 2013 (audited) | 357 | 383 | 2 | (2,661) | 3,514 | 22,265 | 23,860 |
| Return/(loss) for the period | - | - | - | 992 | (166) | 193 | 1,019 |
| Transfer of unrealised losses to realised losses | - | - | - | 115 | (115) | - | - |
| Purchase of shares for treasury | - | - | - | - | - | (13) | (13) |
| Purchase of shares for cancellation | (6) | - | 6 | - | - | (413) | (413) |
| Issue of equity (net of costs) | 25 | 1,848 | - | - | - | - | 1,873 |
| Transfer from other distributable reserve to realised capital reserve | - | - | - | - | 222 | (222) | - |
| Dividends paid | - | - | - | - | - | (841) | (841) |
| As at 30 June 2013 (unaudited) | 376 | 2,231 | 8 | (1,554) | 3,455 | 20,969 | 25,485 |
| Called- up share capital | Share premium | Capital redemption reserve | Unrealised capital reserve* | Realised capital reserve* | Other distributable reserve* | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| As at 1 January 2012 (audited) | 16,912 | 631 | 1,917 | (3,269) | 2,825 | 3,889 | 22,905 |
| Return/(loss) for the period | - | - | - | 201 | (141) | 225 | 285 |
| Transfer of unrealised losses to realised losses | - | - | - | 387 | (387) | - | - |
| Cancellation of treasury shares | (20) | - | 20 | - | - | - | - |
| Purchase of shares for cancellation | (266) | - | 266 | - | - | (345) | (345) |
| Issue of equity (net of costs) | 1,055 | 491 | - | - | - | - | 1,546 |
| Dividends paid | - | - | - | - | - | (798) | (798) |
| As at 30 June 2012 (unaudited) | 17,681 | 1,122 | 2,203 | (2,681) | 2,297 | 2,970 | 23,592 |
| Called- up share capital | Share premium | Capital redemption reserve | Unrealised capital reserve* | Realised capital reserve* | Other distributable reserve* | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| As at 1 January 2012 (audited) | 16,912 | 631 | 1,917 | (3,269) | 2,825 | 3,889 | 22,905 |
| Return for the year | - | - | - | 569 | 57 | 481 | 1,107 |
| Transfer of unrealised losses to realised losses | - | - | - | 39 | (39) | - | - |
| Reduction of share capital and cancellation of capital redemption and share premium reserves | (17,327) | (1,129) | (2,204) | - | - | 20,660 | - |
| Cancellation of treasury shares | (20) | - | 20 | - | - | - | - |
| Purchase of shares for cancellation | (269) | - | 269 | - | - | (499) | (499) |
| Issue of equity (net of costs) | 1,061 | 881 | - | - | - | - | 1,942 |
| Transfer from other distributable reserve to realised capital reserve | - | - | - | - | 671 | (671) | - |
| Dividends paid | - | - | - | - | - | (1,595) | (1,595) |
| As at 31 December 2012 (audited) | 357 | 383 | 2 | (2,661) | 3,514 | 22,265 | 23,860 |
*Included within these reserves is an amount of £22,870,000 (30 June 2012: £2,586,000; 31 December 2012: £23,118,000) which is considered distributable.
A transfer of £222,000 (30 June 2012: nil; 31 December 2012: £671,000) representing gross realised losses on disposal of investments during the period ended 30 June 2013 has been made from the other distributable reserve to the realised capital reserve.
Summary reconciliation of movements in shareholders' funds (unaudited)
(D shares)
| Called- up share capital | Share premium | Unrealised capital reserve* | Realised capital reserve* | Other distributable reserve* | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| As at 1 January 2013 (audited) | 64 | 9 | 615 | (188) | 5,745 | 6,245 |
| Return/(loss) for the period | - | - | 319 | (60) | 124 | 383 |
| Transfer of unrealised gains to realised gains | - | - | (244) | 244 | - | - |
| Purchase of shares for treasury | - | - | - | - | (23) | (23) |
| Purchase of shares for cancellation | - | - | - | - | (27) | (27) |
| Issue of equity (net of costs) | - | 14 | - | - | - | 14 |
| Dividends paid | - | - | - | - | (159) | (159) |
| As at 30 June 2013 (unaudited) | 64 | 23 | 690 | (4) | 5,660 | 6,433 |
| Called- up share capital | Share premium | Unrealised capital reserve* | Realised capital reserve* | Other distributable reserve* | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| As at 1 January 2012 (audited) | 3,176 | 5 | 126 | (112) | 2,714 | 5,909 |
| Return/(loss) for the period | - | - | 197 | (37) | 63 | 223 |
| Issue of equity (net of costs) | 6 | 2 | - | - | - | 8 |
| Dividends paid | - | - | - | - | (111) | (111) |
| As at 30 June 2012 (unaudited) | 3,182 | 7 | 323 | (149) | 2,666 | 6,029 |
| Called- up share capital | Share premium | Unrealised capital reserve* | Realised capital reserve* | Other distributable reserve* | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| As at 1 January 2012 (audited) | 3,176 | 5 | 126 | (112) | 2,714 | 5,909 |
| Return/(loss) for the year | - | - | 489 | (76) | 124 | 537 |
| Reduction in share capital and cancellation of share premium reserve | (3,119) | (10) | - | - | 3,129 | - |
| Issue of equity (net of costs) | 7 | 14 | - | - | - | 21 |
| Dividends paid | - | - | - | - | (222) | (222) |
| As at 31 December 2012 (audited) | 64 | 9 | 615 | (188) | 5,745 | 6,245 |
*Included within these reserves is an amount of £6,346,000 (30 June 2012: £2,517,000; 31 December 2012: £5,557,000) which is considered distributable.
Summary cash flow statement (unaudited)
(Combined)
| Note | Unaudited six months ended 30 June 2013 £'000 | Unaudited six months ended 30 June 2012 £'000 | Audited year ended 31 December 2012 £'000 | |
| Operating activities | ||||
| Loan stock income received | 513 | 566 | 1,144 | |
| Deposit interest received | 68 | 66 | 104 | |
| Dividend income received | 7 | - | - | |
| Investment management fees paid | (338) | (324) | (657) | |
| Administrative expenses paid | (121) | (124) | (224) | |
| Net cash flow from operating activities | 9 | 129 | 184 | 367 |
| Taxation | ||||
| UK corporation tax recovered/(paid) | 17 | 10 | (24) | |
| Capital expenditure and financial investments | ||||
| Purchase of fixed asset investments | (1,522) | (2,446) | (4,124) | |
| Disposal of fixed asset investments | 1,753 | 466 | 3,904 | |
| Purchase of current asset investments | - | (1,000) | - | |
| Disposal of current asset investments | 500 | - | 171 | |
| Net cash flow from investing activities | 731 | (2,980) | (49) | |
| Equity dividends paid | ||||
| Dividends paid (net of cost of issuing shares under the Dividend Reinvestment Scheme) | (919) | (833) | (1,678) | |
| Net cash flow before financing | (42) | (3,619) | (1,384) | |
| Financing | ||||
| Purchase of shares for treasury or cancellation | (476) | (350) | (504) | |
| Issue of share capital (net of costs) | 1,811 | 1,485 | 1,824 | |
| Net cash flow from financing | 1,335 | 1,135 | 1,320 | |
| Cash flow in the period | 10 | 1,293 | (2,484) | (64) |
Summary cash flow statement (unaudited)
(Ordinary shares)
| Note | Unaudited six months ended 30 June 2013 £'000 | Unaudited six months ended 30 June 2012 £'000 | Audited year ended 31 December 2012 £'000 | |
| Operating activities | ||||
| Loan stock income received | 324 | 443 | 906 | |
| Deposit interest received | 43 | 38 | 70 | |
| Dividend income received | 7 | - | - | |
| Investment management fees paid | (268) | (258) | (523) | |
| Administrative expenses paid | (91) | (91) | (175) | |
| Net cash flow from operating activities | 9 | 15 | 132 | 278 |
| Taxation | ||||
| UK corporation tax recovered/(paid) | 17 | 10 | (31) | |
| Capital expenditure and financial investments | ||||
| Purchase of fixed asset investments | (1,437) | (2,781) | (3,304) | |
| Disposal of fixed asset investments | 607 | 430 | 3,618 | |
| Disposal of current asset investments | - | - | 171 | |
| Net cash flow from investing activities | (830) | (2,351) | 485 | |
| Equity dividends paid | ||||
| Dividends paid (net of cost of issuing shares under the Dividend Reinvestment Scheme) | (774) | (734) | (1,477) | |
| Net cash flow before financing | (1,572) | (2,943) | (745) | |
| Financing | ||||
| Purchase of shares for treasury or cancellation | (426) | (350) | (504) | |
| Issue of share capital (net of costs) | 1,811 | 1,485 | 1,824 | |
| Net cash flow from financing | 1,385 | 1,135 | 1,320 | |
| Cash flow in the period | 10 | (187) | (1,808) | 575 |
Summary cash flow statement (unaudited)
(D shares)
| Note | Unaudited six months ended 30 June 2013 £'000 | Unaudited six months ended 30 June 2012 £'000 | Audited year ended 31 December 2012 £'000 | |
| Operating activities | ||||
| Loan stock income received | 189 | 123 | 238 | |
| Deposit interest received | 25 | 28 | 34 | |
| Investment management fees paid | (70) | (66) | (134) | |
| Administrative expenses paid | (30) | (33) | (49) | |
| Net cash flow from operating activities | 9 | 114 | 52 | 89 |
| Taxation | ||||
| UK corporation tax recovered | - | - | 7 | |
| Capital expenditure and financial investments | ||||
| Purchase of fixed asset investments | (85) | (415) | (820) | |
| Disposal of fixed asset investments | 1,146 | 36 | 286 | |
| Purchase of current asset investments | - | (250) | - | |
| Disposal of current asset investments | 500 | - | - | |
| Net cash flow from investing activities | 1,561 | (629) | (534) | |
| Equity dividends paid | ||||
| Dividends paid (net of cost of issuing shares under the Dividend Reinvestment Scheme) | (145) | (99) | (201) | |
| Net cash flow before financing | 1,530 | (676) | (639) | |
| Financing | ||||
| Purchase of shares for treasury or cancellation | (50) | - | - | |
| Net cash flow from financing | (50) | - | - | |
| Cash flow in the period | 10 | 1,480 | (676) | (639) |
Notes to the unaudited summarised Financial Statements
1. Accounting convention
The financial statements have been prepared in accordance with the historical cost convention, modified to include the revaluation of investments, in accordance with applicable United Kingdom law and accounting standards and with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ("SORP") issued by The Association of Investment Companies ("AIC") in January 2009. Accounting policies have been applied consistently in current and prior periods, however to enhance clarity of financial reporting, the special reserve, treasury share reserve and revenue reserve have been combined to create a single reserve named other distributable reserve. This has also been applied to prior periods.
2. Accounting policies
Investments
Unquoted equity investments, debt issued at a discount, and convertible bonds
In accordance with FRS 26 "Financial Instruments Recognition and Measurement", unquoted equity investments, debt issued at a discount and convertible bonds are designated as fair value through profit or loss ("FVTPL"). Unquoted investments' fair value is determined by the Directors in accordance with the International Private Equity and Venture Capital Valuation Guidelines (IPEVCV guidelines).
Fair value movements and gains and losses arising on the disposal of investments are reflected in the capital column of the Income statement in accordance with the AIC SORP. Realised gains or losses on the sale of investments will be reflected in the realised capital reserve, and unrealised gains or losses arising from the revaluation of investments will be reflected in the unrealised capital reserve.
Warrants and unquoted equity derived instruments
Warrants and unquoted equity derived instruments are only valued if there is deemed to be additional value to the Company in exercising or converting as at the balance sheet date. Otherwise these instruments are held at nil value. The valuation techniques used are those used for the underlying equity investment.
Unquoted loan stock
Unquoted loan stock (excluding debt issued at a discount and convertible bonds) is classified as loans and receivables as permitted by FRS 26 and measured at amortised cost using the effective interest rate method less impairment. Movements in the amortised cost relating to interest income are reflected in the revenue column of the Income statement , and hence are reflected in the other distributable reserve, and movements in respect of capital provisions are reflected in the capital column of the Income statement and are reflected in the realised capital reserve following sale, or in the unrealised capital reserve for impairments arising from revaluations of the fair value of the security.
For all unquoted loan stock, whether fully performing, past due or impaired, the Board considers that the fair value is equal to or greater than the security value of these assets. For unquoted loan stock, the amount of the impairment is the difference between the asset's cost and the present value of estimated future cash flows, discounted at the original effective interest rate. The future cash flows are estimated based on the fair value of the security less estimated selling costs.
Investments are recognised as financial assets on legal completion of the investment contract and are de-recognised on legal completion of the sale of an investment.
Dividend income is not recognised as part of the fair value movement of an investment, but is recognised separately as investment income through the other distributable reserve when a share becomes ex-dividend.
Loan stock accrued interest is recognised in the Balance sheet as part of the carrying value of the loans and receivables at the end of each reporting period.
In accordance with the exemptions under FRS 9 "Associates and joint ventures", those undertakings in which the Company holds more than 20 per cent. of the equity as part of an investment portfolio are not accounted for using the equity method.
Current asset investments
Contractual future contingent receipts on the disposal of fixed asset investments are designated at fair value through profit or loss and are subsequently measured at fair value.
Fixed term deposits are classified as current asset investments as they are investments held for the short term. These are designated as loans and receivables and measured at amortised cost, which is considered to be equivalent to fair value.
Investment income
Unquoted equity income
Dividend income is included in revenue when the investment is quoted ex-dividend.
Unquoted loan stock income
Fixed returns on non-equity shares and debt securities are recognised on a time apportionment basis using an effective interest rate over the life of the financial instrument. Income which is not capable of being received within a reasonable period of time is reflected in the capital value of the investment.
Bank interest income
Interest income is recognised on an accruals basis using the rate of interest agreed with the bank.
Investment management fees and other expenses
All expenses have been accounted for on an accruals basis. Expenses are charged through the revenue column of the Income statement except the following which are charged through the realised capital reserve:
75 per cent. of management fees are allocated to the realised capital reserve in line with the Board's expectation that over the long term 75 per cent. of the Company's investment returns will be in the form of capital gains; and
expenses which are incidental to the purchase or disposal of an investment are charged through the realised capital reserve.
Performance incentive fee
In the event that a performance incentive fee crystallises, the fee will be allocated between revenue and realised capital reserves based upon the proportion to which the calculation of the fee is attributable to revenue and capital returns.
Taxation
Taxation is applied on a current basis in accordance with FRS 16 "Current tax". Taxation associated with capital expenses is applied in accordance with the SORP. In accordance with FRS 19 "Deferred tax", deferred taxation is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the financial statements. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted.
Dividends
In accordance with FRS 21 "Events after the balance sheet date", dividends declared by the Company are accounted for in the period in which the dividend has been paid or approved by shareholders in annual general meeting.
Reserves
Share premium reserve
This reserve accounts for the difference between the price paid for shares and the nominal value of the shares, less issue costs and transfers to the other distributable reserve.
Capital redemption reserve
This reserve accounts for amounts by which the issued share capital is diminished through the repurchase and cancellation of the Company's own shares.
Unrealised capital reserve
Increases and decreases in the valuation of investments held at the year end against cost, are included in this reserve.
Realised capital reserve
The following are disclosed in this reserve:
- gains and losses compared to cost on the realisation of investments;
- expenses, together with the related taxation effect, charged in accordance with the above policies; and
- dividends paid to equity holders.
Other distributable reserve
The special reserve, treasury share reserve and the revenue reserve have been combined to form a single reserve named other distributable reserve.
This reserve accounts for the movements from the revenue column of the Income statement, the payment of dividends, the buy-back of shares and other, non capital realised movements.
D shares
Until such time that D shares are converted into Ordinary shares, all investments and returns attributable to this class of share will be separately identifiable from the existing Ordinary shares. All residual expenses will be allocated in the ratio of the respective Net Asset Values of each class of share.
3. Gains on investments
| Combined | |||
| Unaudited six months ended 30 June 2013 £'000 | Unaudited six months ended 30 June 2012 £'000 | Audited year ended 31 December 2012 £'000 | |
| Unrealised gains on fixed asset investments held at fair value through profit or loss account | 950 | 228 | 959 |
| Unrealised reversals of impairments on fixed asset investments held at amortised cost | 361 | 170 |
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