Albion Enterprise VCT PLC : Annual Financial Re...

Albion Enterprise VCT PLC

As required by the UK Listing Authority's Disclosure and Transparency Rules 4.1 and 6.3, Albion Enterprise VCT PLC today makes public its information relating to the Annual Report and Financial Statements for the year ended 31 March 2013.

This announcement was approved for release by the Board of Directors on 27 June 2013.

This announcement has not been audited.

You will shortly be able to view the Annual Report and Financial Statements for the year to 31 March 2013 (which have been audited) at: www.albion-ventures.co.uk by clicking on 'Our Funds' and then 'Albion Enterprise VCT PLC'. The Annual Report and Financial Statements for the year to 31 March 2013 will be available as a PDF document via a link under the 'Investor Centre' in the 'Financial Reports and Circulars' section. The information contained in the Annual Report and Financial Statements will include information as required by the Disclosure and Transparency Rules, including Rule 4.1.

Investment objectives

The aim of Albion Enterprise VCT PLC ("the Company") is to provide investors with a regular and predictable source of income, combined with the prospect of longer term capital growth.  The Company intends to achieve this by investing up to 50 per cent. of the net funds raised in an asset-based portfolio of lower risk, ungeared businesses, principally operating in the leisure sector and related areas (the "Asset-based Portfolio").  The balance of the net funds raised, other than funds retained for liquidity purposes, will be invested in a portfolio of higher growth businesses across a variety of sectors of the UK economy.  These will range from lower risk, income producing businesses to higher risk technology companies (the "Growth Portfolio").  In neither category would portfolio companies normally have any external borrowing with a charge ranking ahead of the Company.  Up to two-thirds of qualifying investments by cost will comprise loan stock secured with a first charge on the portfolio company's assets. Funds awaiting investment in Qualifying Investments or retained for liquidity purposes will be held on deposit, invested in floating rate notes (in both cases with banks with a Moody's credit rating of 'A' or above) or invested in government gilts.

The Company's investment portfolio will thus be structured to provide a balance between income and capital growth for the longer term.  The Asset-based Portfolio is designed to provide stability and income whilst still maintaining the potential for capital growth.  The Growth Portfolio is intended to provide diversified exposure through its portfolio of investments in unquoted UK companies. Stock specific risk will be reduced by the Company's policy of holding a diversified portfolio of Qualifying Investments.

Financial calendar

Record date for first dividend	2 August 2013
Annual General Meeting	14 August 2013
Payment date for first dividend	30 August 2013
Announcement of Half-yearly results for the six months ended 30 September 2013	November 2013
Payment of second dividend subject to Board approval	February 2014

Financial highlights

106.75p	Net asset value per share plus dividends paid from launch to 31 March 2013.
3.50p	Total tax free dividend per share paid in the year to 31 March 2013.
92.90p	Net asset value per share as at 31 March 2013.
2.50p	First tax-free dividend per share declared for the year to 31 March 2014 payable on 30 August 2013.

	31 March 2013 (pence per share)	31 March 2012  (pence per share)
Dividends paid	3.50	3.00
Revenue return	1.80	1.40
Capital return/(loss)	8.70	(0.60)
Net asset value uplift from buy-backs	1.00	-
Net asset value	92.90	84.90

Total shareholder net asset value return to 31 March 2013:

	31 March 2013 (pence per share)
Total dividends paid during the year ended:
31 March 2008	0.70
31 March 2009	1.65
31 March 2010	2.00
31 March 2011	3.00
31 March 2012	3.00
31 March 2013	3.50
Total dividends paid to 31 March 2013	13.85
Net asset value as at 31 March 2013	92.90
Total shareholder net asset return to 31 March 2013	106.75

In addition to the above dividends, the Company will pay a first dividend, for the new financial year ending 31 March 2014, of 2.50 pence per share (an increase of 0.75 pence per share over the previous half year) on 30 August 2013 to shareholders on the register as at 2 August 2013.

Notes

• The dividend of 0.70 pence per share paid during the period ended 31 March 2008 and the first dividend of 0.40 pence per share paid during the year ended 31 March 2009 were paid to shareholders who subscribed in the 2006/2007 offer only.
• All dividends paid by the Company are free of income tax.  It is an H.M. Revenue & Customs requirement that dividend vouchers indicate the tax element should dividends have been subject to income tax.  Investors should ignore this figure on the dividend voucher and need not disclose any income they receive from a VCT on their tax return.
• The net asset value of the Company is not its share price as quoted on the official list of the London Stock Exchange.  The share price of the Company can be found in the Investment Companies - VCTs section of the Financial Times on a daily basis.
• Investors are reminded that it is common for shares in VCTs to trade at a discount to their net asset value as tax reliefs are only obtainable on initial subscription.

Chairman's statement

Introduction
The Company achieved a total return for the year to 31 March 2013 of 10.50 pence per share against 0.80 pence per share for the previous year. Within this, the gross revenue generated by the investment portfolio increased by 23 per cent. This is an excellent result and reflects the growing maturity of the investment portfolio.

Portfolio progress
A number of our investments showed strong progress during the year, spread evenly between our "growth" companies and the "asset-based" businesses. Within the latter category, the Nelson House Hospital was sold at a price which, when added to income received, resulted in a return of 1.4x cost, while our small investment in the City Screen (Norwich) cinema was sold for a return of 1.9x cost. In general our portfolio continues to perform well, with a number of our renewable energy projects starting to produce electricity.

Some £730,000 was invested in existing and new portfolio companies. The latter comprised Proveca, a developer of paediatric drugs, and MyMeds&Me, a developer of software monitoring and reporting drug performance.

Risks and uncertainties
The outlook for the UK and global economies continues to be the key risk affecting your Company. Investment risk is mitigated through a variety of processes, including our policy of ensuring that the Company has a first charge over portfolio companies' assets wherever possible and of ensuring that the portfolio is balanced through the inclusion of sectors that are less exposed to the business and consumer cycle. A detailed analysis of the other risks and uncertainties facing the business is shown in note 23 of this announcement.

Discount management and share buy-backs
It remains the Board's policy to buy back shares in the market, subject to the overall constraint that such purchases are in the VCT's interests, including the maintenance of sufficient resources for investment in new and existing portfolio companies and 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.

Transactions with Manager
Details of the transactions that took place with the Manager for the year can be found in note 5.

Albion VCT's Top Up Offers
During the year the company issued 1,134,466 shares under the Company's Offer as part of the Albion VCTs Top Up Offers launched in November 2011 and in October 2012. Details are shown in note 15. Since the year end, a further 1,880,584 shares have been issued under the Offer, generating net proceeds of £1.64 million. The proceeds of the Offers will be used to provide further resources to the Albion VCTs at a time when a number of attractive new investment opportunities are being seen.

Results and dividends
As at 31 March 2013, the net asset value was 92.90 pence per share compared to 84.90 pence per share at the end of 31 March 2012. The revenue return before taxation was £771,000 compared to £571,000 for the previous year. The Company will pay a first dividend for the financial year to 31 March 2014 of 2.50 pence per share, an increase of 0.75 pence per share over the previous half year. The dividend will be paid on 30 August 2013 to shareholders on the register at 2 August 2013. The Company will now be targeting an annual dividend of 5.00 pence per share.

Outlook and prospects
The optimism that I expressed this time last year has been justified and we are pleased with the progress that your Company has made. We believe that the investment portfolio has the potential for further growth and we are looking forward to additional progress in the year ahead.

Maxwell Packe
Chairman
27 June 2013

Manager's report

Portfolio review
The sector analysis of the VCT's investment portfolio by value at the 31 March 2013 can be seen at the end of this announcement. This shows that healthcare now accounts for 22 per cent. of the portfolio compared to 26 per cent. at the end of the previous financial year while the renewable energy sector has remained steady at 19 per cent. This remains in line with the Board's target exposure to the sector.

Investment performance
A number of our investments showed strong performance during the year. Amongst these was DySIS, which develops medical imaging systems for the scanning of cervical cancer, which following early sales to the NHS in the UK and initial use by key opinion leaders in the US, attracted further third party finance at a considerably higher value than our prevailing book value. In addition, Opta Sports Data consolidated its position as the leading provider of sports performance data in Europe with important contract wins in the UK, Germany and Holland. It now has operations based in seven countries around the world and its continued growth led to a further revaluation of the investment. Similarly Mirada Medical, which provides software for imaging systems for the monitoring of oncology, also saw continued growth, with sales up 30 per cent. during the year.

On the asset-based side of the portfolio, in addition to the sales of Nelson House Hospital and City Screen (Norwich) referred to in the Chairman's statement, third party professional valuations of our renewable energy projects resulted in a significant uplift as these projects began to generate electricity.

With regard to new investments, the main thrust of our activity will remain in the medical and broader healthcare sectors, whilst at the same time retaining the flexibility to be opportunistic in other sectors, including leisure.

Albion Ventures LLP
Manager
27 June 2013

Responsibility statement
In preparing these Financial Statements for the year to 31 March 2013, the Directors of the Company, Maxwell Packe, Lady Balfour of Burleigh, Lord St. John of Bletso and Patrick Reeve, confirm that to the best of their knowledge:

- summary financial information contained in this announcement and the full Annual Report and Financial Statements for the year ended 31 March 2013 for the Company have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (UK Accounting Standards and applicable law) and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company for the year ended 31 March 2013 as required by DTR 4.1.12.R;

- the Chairman's statement and Manager's report include a fair review of the information required by DTR 4.2.7R (indication of important events during the year ended 31 March 2013 and description of principal risks and uncertainties that the Company faces); and

- the Chairman's statement and Manager's report include a fair review of the information required by DTR 4.2.8R (disclosure of related parties transactions and changes therein).

A detailed "Statement of Directors' responsibilities for the preparation of the Company's financial statements" is contained within the full audited Annual Report and Financial Statements.

By order of the Board

Maxwell Packe
Chairman
27 June 2013

 Income statement

		Year ended			Year ended
		31 March 2013			31 March 2012
		Revenue	Capital	Total	Revenue	Capital	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments	3	-	3,224	3,224	-	199	199
Investment income	4	1,152	-	1,152	934	-	934
Investment management fees	5	(175)	(526)	(701)	(172)	(517)	(689)
Other expenses	6	(206)	-	(206)	(191)	-	(191)
Return/(loss) on ordinary activities before tax		771	2,698	3,469	571	(318)	253
Tax (charge)/credit on ordinary activities	8	(178)	144	(34)	(134)	134	-
Return/(loss) attributable to shareholders		593	2,842	3,435	437	(184)	253
Basic and diluted return/(loss) per share (pence)*	10	1.80	8.70	10.50	1.40	(0.60)	0.80

* excluding treasury shares

The accompanying notes form an integral part of these Financial Statements.

The total column of this 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 year disclosed above.  Accordingly a statement of total recognised gains and losses is not required.

The difference between the reported return/(loss) on ordinary activities before tax and the historical profit/(loss) is due to the fair value movements on investments.  As a result a note on historical cost profit and losses has not been prepared.

Balance sheet

	Note	31 March 2013 £'000	31 March 2012 £'000
Fixed asset investments	11	22,088	20,683
Current assets
Trade and other debtors	13	52	213
Current asset investments	13	1,583	1,632
Cash at bank	17	6,198	5,673
		7,833	7,518
Creditors:  amounts falling due within one year	14	(322)	(238)
Net current assets		7,511	7,280
Net assets		29,599	27,963
Capital and reserves
Called up share capital	15	345	16,703
Share premium		290	1,065
Capital redemption reserve		97	-
Unrealised capital reserve		1,810	(776)
Realised capital reserve		(536)	(795)
Other distributable reserve		27,593	11,766
Total equity shareholders' funds		29,599	27,963
Basic and diluted net asset value per share (pence) *	16	92.90	84.90

* excluding treasury shares

The accompanying notes form an integral part of these Financial Statements.

These Financial Statements were approved by the Board of Directors, and were authorised for issue on 27 June 2013 and were signed on its behalf by

Maxwell Packe
Chairman
Company number: 05990732

Reconciliation of movements in shareholders' funds

	Called-up share capital £'000	Share premium £'000	Capital Redemption reserve £'000	Unrealised capital reserve * £'000	Realised capital reserve* £'000	Other distributable reserve* £'000	Total £'000
As at 1 April 2012	16,703	1,065	-	(776)	(795)	11,766	27,963
Return for the period	-	-	-	2,740	102	593	3,435
Transfer of previously unrealised gains on sale of investments	-	-	-	(154)	154	-	-
Issue of share capital	453	587	-	-	-	-	1,040
Purchase of shares for cancellation	(69)	-	69	-	-	(97)	(97)
Purchase of shares for treasury	-	-	-	-	-	(1,610)	(1,610)
Cancellation of treasury shares	(28)	-	28	-	-	-	-
Dividends paid	-	-	-	-	-	(1,132)	(1,132)
Transfer from other distributable reserve	-	-	-	-	3	(3)	-
Reduction in share capital and cancellation of share premium reserve**	(16,714)	(1,362)	-	-	-	18,076	-
As at 31 March 2013	345	290	97	1,810	(536)	27,593	29,599
As at 1 April 2011	15,937	535	-	(518)	(874)	12,453	27,533
Return/(loss) for the period	-	-	-	187	(371)	437	253
Issue of share capital	766	530	-	-	-	-	1,296
Purchase of shares for treasury	-	-	-	-	-	(152)	(152)
Transfer of previously unrealised gains on sale of investments	-	-	-	(445)	445	-	-
Dividends paid	-	-	-	-	-	(967)	(967)
Transfer from other distributable reserve	-	-	-	-	5	(5)	-
As at 31 March 2012	16,703	1,065	-	(776)	(795)	11,766	27,963

* Included within the aggregate of these reserves is an amount of £27,057,000 (2012:  £10,195,000) which is considered distributable.  

** The reduction in the nominal value of shares from 50 pence to 1 penny and the cancellation of the share premium reserve (as approved by shareholders at the Annual General Meeting held on 4 September 2012 and by order of the Court dated 31 October 2012) has increased the value of the other distributable reserve.

The special reserve, treasury share reserve and the revenue reserve have been combined in the Balance sheet to form a single reserve named other distributable reserve for both the current and prior year. The Directors consider the presentation of a single reserve to enhance the clarity of financial reporting. More details regarding treasury shares can be found in note 15.

A transfer of £3,000 (2012: £5,000) representing gross realised losses on disposal of investments during the year to 31 March 2013 has been made from the other distributable reserve to the realised capital reserve.

Cash flow statement

	Note	Year ended 31 March 2013 £'000	Year ended 31 March 2012 £'000
Operating activities
Loan stock income received		988	767
Deposit interest received		126	134
Investment management fees paid		(691)	(519)
Other cash payments		(200)	(176)
Net cash flow from operating activities	18	223	206
Taxation
UK corporation tax		80	-
Capital expenditure and financial investments
Purchase of fixed asset investments		(700)	(3,673)
Disposal of fixed asset investments		2,572	940
Disposal of current asset investments		203	-
Net cash flow from investing activities		2,075	(2,733)
Management of liquid resources
Purchase of current asset investments		(1,553)	(1,000)
Disposal of current asset investments		1,500	3,500
Net cash flow from management of liquid resources		(53)	2,500
Equity dividends paid (net of cost of shares issued under the Dividend Reinvestment Scheme)		(1,037)	(893)
Net cash flow before financing		1,288	(920)
Financing
Issue of ordinary share capital (net of issue costs)		944	1,247
Purchase of own shares (including costs)		(1,707)	(156)
Net cash flow from financing		(763)	1,091
Cash flow in the year	17	525	171

Notes to the 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" ('AIC 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, during the year the special reserve, treasury share reserve and revenue reserve have been presented as 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, 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 September 2009 International Private Equity and Venture Capital Valuation Guidelines (IPEVCV guidelines).

Fair value movements on equity investments 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 and 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 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 stocks (excluding debt issued at a discount and convertible bonds) are 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 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 on 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 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 the estimated selling costs.

Current asset investments
Contractual future contingent receipts on the disposal of fixed asset investments are designated at fair value through profit and loss and are subsequently measured at fair value.

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 revenue 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.

Investment income
Unquoted equity income
Dividend income is included in revenue when the investment is quoted ex-dividend.

Unquoted loan stock and other preferred income
Fixed returns on non-equity shares and debt securities are recognised on a time apportionment basis using the 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 accrual 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 account except the following which are charged through the realised capital reserve:

• 75 per cent. of management fees are allocated to the capital account to the extent that these relate to an enhancement in the value of the investments.  This is 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.

Performance incentive fee
In the event that a performance incentive fee crystallises, the fee will be allocated between other distributable 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.

Reserves
Share premium account
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 as a single reserve named other distributable reserve.

This reserve accounts for movements from the revenue column of the Income statement, the payment of dividends, the buyback of shares and other non capital realised movements.

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 an Annual General Meeting.

3. Gains on investments

	Year ended 31 March 2013 £'000	Year ended  31 March 2012 £'000
Unrealised gains on fixed asset investments held at fair value through profit or loss	2,798	79
Unrealised (impairments)/reversals of impairments on fixed asset investments held at amortised cost	(88)	108
Unrealised gains on fixed asset investments sub-total	2,710	187
Unrealised gains on current asset investments held at fair value through profit or loss	30	-
Unrealised gains sub-total	2,740	187
Realised gains/(losses) on fixed asset investments held at fair value through profit or loss	490	(18)
Realised gains on fixed asset investments held at amortised cost	-	37
Realised gains on fixed asset investments sub-total	490	19
Realised losses on current asset investments held at fair value through profit or loss	(6)	(7)
Realised gains sub-total	484	12
	3,224	199

Investments measured at amortised cost are unquoted loan stock investments as described in note 2.

4. Investment income

	Year ended 31 March 2013 £'000	Year ended 31 March 2012 £'000
Income recognised on investments held at fair value through profit or loss
Floating rate note and bond interest	-	20
Interest on convertible bonds and debt issued at a discount	340	227
	340	247
Income recognised on investments held at amortised cost
Return on loan stock investments	690	552
Bank deposit interest	122	135
	812	687
	1,152	934

Interest income earned on impaired investments at 31 March 2013 amounted to £45,000 (2012: £49,000). These investments are all held at amortised cost.

All of the Company's income is derived from operations in the United Kingdom.

5. Investment management fees

	Year ended 31 March 2013 £'000	Year ended 31 March 2012 £'000
Investment management fee charged to revenue	175	172
Investment management fee charged to capital	526	517
	701	689

Further details of the Management agreement under which the investment management fee is paid are given in the Directors' report on page 19 of the full Annual Report and Financial Statements.  

During the year, services of a total value of £701,000 (2012:  £689,000) were purchased by the Company from Albion Ventures LLP.  At the financial year end, the amount due to Albion Ventures LLP in respect of these services disclosed as accruals and deferred income was £185,000 (2012:  £175,000).

Patrick Reeve is the Managing Partner of the Manager, Albion Ventures LLP.  During the year, the Company was charged by Albion Ventures LLP £21,600 including VAT (2012:  £21,600) in respect of his services as a Director.  At the year end, the amount due to Albion Ventures LLP in respect of these services disclosed as accruals and deferred income was £5,400 (2012:  £5,400).

Albion Ventures LLP is, from time to time, eligible to receive transaction fees and Directors' fees from portfolio companies. During the year ended 31 March 2013, fees of £87,000 attributable to the investments of the Company were received pursuant to these arrangements (2012: £147,000).

During the year the Company raised new funds through the Albion VCTs Linked Top Up Offers 2011/2012 and the Albion VCTs Top Up Offers 2012/2013 as described in note 15. The total cost of the issue of shares was 5.5 per cent. of the sums subscribed. Of these costs, an amount of £3,854 (2012: £4,456) was paid to the Manager, Albion Ventures LLP in respect of receiving agent services. There were no sums outstanding in respect of receiving agent services at the year end.

6. Other expenses

	Year ended 31 March 2013 £'000	Year ended 31 March 2012 £'000
Directors' fees and associated costs (inclusive of NIC and VAT)	83	86
Auditor's remuneration for statutory audit services (exclusive of VAT)	23	23
Other administrative expenses	100	82
	206	191

7. Directors' fees and associated costs
The amounts paid to and on behalf of the Directors during the year are as follows:

	Year ended 31 March 2013 £'000	Year ended 31 March 2012 £'000
Directors' fees	74	74
National insurance and/or VAT	8	10
Expenses	1	2
	83	86

Expenses charged related to travel expenses in furtherance of their duties as Directors.  Further information regarding Directors' remuneration can be found in the Directors' remuneration report on page 27 of the full Annual Report and Financial Statements.

8. Tax (charge)/credit on ordinary activities

	Year ended 31 March 2013			Year ended 31 March 2012
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
UK corporation tax in respect of the current year	(178)	144	(34)	(134)	134	-

	Year ended 31 March 2013 £'000	Year ended 31 March 2012 £'000
Return on ordinary activities before tax	3,469	253
Tax charge on profit at the standard companies rate of 24% (2012: small companies rate of 20%)	(833)	(51)
Factors affecting the charge:
Capital profits not subject to tax	774	40
Utilisation of losses	18	11
Marginal relief	7	-
	(34)	-

The tax charge for the year shown in the Income statement is lower than the standard companies rate of corporation tax in the UK of 24 per cent. (2012: small companies rate of 20 per cent.). The differences are explained above.

The Company has no further excess trading losses (2012:  £74,000) available for offset against future profits.  The Company did not recognise a deferred tax asset in respect of these losses.

Notes
(i) Venture Capital Trusts are not subject to corporation tax on capital gains.
(ii) Tax relief on expenses charged to capital has been determined by allocating tax relief to expenses by reference to the applicable corporation tax rate and allocating the relief between revenue and capital in accordance with the SORP.
(iii) No deferred tax asset or liability has arisen in the year.

9. Dividends

	Year ended 31 March 2013 £'000	Year ended 31 March 2012 £'000
Dividend of 1.50p per share paid on 31 August 2011	-	480
Dividend of 1.50p per share paid on 29 February 2012	-	487
Dividend of 1.75p per share paid on 31 August 2012	571	-
Dividend of 1.75p per share paid on 28 February 2013	561	-
	1,132	967

In addition to the dividends summarised above, the Board has declared a first dividend for the year ending 31 March 2014 of 2.50 pence per share.  This dividend will be paid on 30 August 2013 to shareholders on the register as at 2 August 2013.  The total dividend will be approximately £843,000.

10. Basic and diluted return per share

	Year ended 31 March 2013			Year ended 31 March 2012
	Revenue	Capital	Total	Revenue	Capital	Total
The return per share has been based on the following figures:
Return/(loss) attributable to equity shares (£'000)	593	2,842	3,435	437	(184)	253
Weighted average shares in issue (excluding treasury shares)	32,642,931			32,144,835
Return/(loss) attributable per equity share (pence)	1.80	8.70	10.50	1.40	(0.60)	0.80

There are no convertible instruments, derivatives or contingent share agreements in issue for Albion Enterprise VCT PLC, and therefore no dilution affecting the return per share. The basic return per share is therefore the same as the diluted return per share.

The weighted average number of shares is calculated excluding treasury shares of 2,599,255 (2012: 473,010).

11. Fixed asset investments

	31 March 2013 £'000		31 March 2012 £'000
Investments held at fair value through profit or loss Unquoted equity investments	8,243		6,275
Unquoted debt issued at a discount and convertible bonds	6,638		6,023
	14,881		12,298
Investments held at amortised cost
Unquoted loan stock investments	7,207		8,385
	22,088		20,683
		31 March 2013 £'000	31 March 2012 £'000
Opening valuation		20,683	18,164
Purchases at cost		734	3,459
Disposal proceeds		(2,572)	(1,053)
Realised gains		490	19
Movement in loan stock revenue accrued income		43	39
Transfer of unrealised gains to current asset investments		-	(132)
Unrealised gains		2,710	187
Closing valuation		22,088	20,683
Movement in loan stock revenue accrued income
Opening accumulated movement in loan stock revenue accrued income		96	57
Movement in loan stock revenue accrued income		43	39
Closing accumulated movement in loan stock revenue accrued income		139	96
Movement in unrealised losses
Opening accumulated unrealised losses		(909)	(525)
Movement in unrealised gains		2,710	187
Transfer of unrealised gains to current asset investments		-	(132)
Transfer of previously unrealised gains to realised reserve on disposal of investments		(21)	(439)
Closing accumulated unrealised gains/(losses)		1,780	(909)
Historic cost basis
Opening book cost		21,496	18,632
Purchases at cost		734	3,459
Sales at cost		(2,061)	(595)
Closing book cost		20,169	21,496

The amounts shown for the purchase and disposal of fixed assets included in the cash flow statement differ from the amounts shown above, due to deferred consideration shown as a debtor, and investment settlement debtors and creditors.

The Directors believe that the carrying value of loan stock measured at amortised cost is not materially different to fair value.  The Company does not hold any assets as the result of the enforcement of security during the period, and believes that the carrying values for both impaired and past due assets are covered by the value of security held for these loan stock investments.

Investments held at fair value are valued in accordance with the IPEVCV guidelines as follows:

	31 March 2013	31 March 2012
Valuation methodology	£'000	£'000
Cost and price of recent investment (reviewed for impairment)	1,941	6,246
Revenue multiple	2,667	2,479
Earnings multiple	2,863	2,188
Net asset value supported by third party or desktop valuation	6,087	1,385
Agreed new investment price	1,323	-
	14,881	12,298

Full valuations are prepared by independent RICS qualified surveyors in full compliance with the RICS Red Book. Desktop reviews are carried out by similarly RICS qualified surveyors by updating previously prepared full valuations for current trading and market indices.

Fair value investments had the following movements between valuation methodologies between 31 March 2012 and 31 March 2013:

Change in valuationmethodology (2012 to 2013)	Value as at 31 March 2013 £'000	Explanatory note
Cost and price of recent investment (reviewed for impairment) to net asset value supported by third party or desktop valuation	6,404	Independent valuation carried out.
Revenue multiple to agreed new investment price	1,323	Price of latest agreed external investment round and completed post year end.

The valuation will be the most appropriate valuation methodology for an investment within its market, with regard to the financial health of the investment and the September 2009 IPEVCV Guidelines. The Directors believe that, within these parameters, there are no other possible methods of valuation which would be reasonable as at 31 March 2013.

The amended FRS 29 'Financial Instruments: Disclosures' requires the Company to disclose the inputs to the valuation methods applied to its investments measured at fair value through profit or loss in a fair value hierarchy according to the following definitions:

Fair value hierarchy	Definition
Level 1	Unadjusted quoted (bid) prices applied
Level 2	Inputs to valuation are from observable sources and are directly or indirectly derived from prices
Level 3	Inputs to valuations not based on observable market data

All of the Company's fixed asset investments as at 31 March 2013 which are valued at fair value through profit or loss, are valued according to Level 3 methods (2012: Level 3).

Investments held at fair value through profit or loss (level 3) had the following movements in the year to 31 March 2013:

	31 March 2013			31 March 2012
	Equity	Discounted debt and convertible loan stock	Total	Equity	Discounted debt and convertible loan stock	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Opening balance	6,275	6,023	12,298	6,349	5,014	11,363
Purchases at cost	176	398	574	884	1,000	1,884
Disposal proceeds	(1,191)	(96)	(1,287)	(866)	(30)	(896)
Realised gain/(loss)	484	6	490	(18)	-	(18)
Debt/equity swap and representation of convertible bond and debt	107	(107)	-	-	-	-
Movement in loan stock revenue accrued income	-	8	8	-	18	18
Transfer of unrealised gains to current asset investments	-	-	-	(132)	-	(132)
Unrealised gain	2,392	406	2,798	58	21	79
Closing balance	8,243	6,638	14,881	6,275	6,023	12,298

Desktop reviews are carried out by independent RICS qualified surveyors by updating previously prepared full valuations for current trading and market indices.  Full valuations are prepared by similarly qualified surveyors but in full compliance with the RICS Red Book.

FRS 29 requires the Directors to consider the impact of changing one or more of the inputs used as part of the valuation process to reasonable possible alternative assumptions.  The valuation methodology applied to 63 per cent. of the equity, discounted debt and convertible bond investments (by valuation) is based on third-party independent evidence and recent investment price or new investments supported by cash.  The Directors believe that changes to reasonable possible alternative input assumptions for the valuation of the remainder of the portfolio could result in an increase in the valuation of investments by £446,000 or a decrease in the valuation of investments by £355,000.

12. Significant interests

The principal activity of the Company is to select and hold a portfolio of investments in unquoted securities.  Although the Company, through the Manager, will, in some cases, be represented on the board of the portfolio company, it will not take a controlling interest or become involved in the management of a portfolio company.

The size and structure of the companies with unquoted securities may result in certain holdings in the portfolio representing a participating interest without there being any partnership, joint venture or management consortium agreement.  The Company has interests of greater than 20 per cent. of the nominal value of any class of the allotted shares in the portfolio company as at 31 March 2013 as described below:

Company	Country of incorporation	Principal activity	% class and share type	% total voting rights
Greenenerco Limited	Great Britain	Renewable energy	28.6% A Ordinary	28.6%

The above investment is held as part of an investment portfolio, therefore, as permitted by FRS 9, it is measured at fair value and not accounted for using the equity method.

13. Current assets

Trade and other debtors	31 March 2013	31 March 2012
	£'000	£'000
Prepayments and accrued income	28	32
UK corporation tax receivable	-	80
Other debtors	24	101
	52	213

The Directors consider that the carrying amount of debtors is not materially different to their fair value.

	31 March 2013	31 March 2012
Current asset investments	£'000	£'000
Contingent future receipts from the disposal of fixed asset investments	30	132
Close Brothers Bank Limited fixed term deposit	1,553	1,500
	1,583	1,632

The fair value hierarchy applied to contingent future receipts on disposal of fixed asset investments is Level 3. These receipts may not crystallise within 12 months.

14. Creditors: amounts falling due within one year

	31 March 2013	31 March 2012
	£'000	£'000
Trade creditors	9	9
Accruals and deferred income	245	229
UK corporation tax payable	34	-
Other creditors	34	-
	322	238

The Directors consider that the carrying amount of creditors is not materially different to their fair value.

15. Called up share capital

	31 March 2013 £'000	31 March 2012 £'000
Allotted, called up and full paid 34,458,394 Ordinary shares of 1 penny each (2012: 33,405,846 of 50p each)	345	16,703

Voting rights
31,859,139 shares of 1 penny each (net of treasury shares) (2012:  32,932,836 of 50p each).

Following the Annual General Meeting on 4 September 2012 the Company obtained authority to reduce the nominal value of its shares from 50 pence to 1 penny and to cancel its share premium reserve. This was approved by the Court on 31 October 2012. The restructuring increased the distributable reserves available to the Company for the payment of dividends, the buy-back of shares, and for other corporate purposes.  The effects of these transactions were to reduce the Ordinary share capital by £16,714,000 and the share premium reserve by £1,362,000.

The Company purchased 137,063 shares (2012: nil) for cancellation at a cost of £97,000 (2012: nil).

The Company purchased 2,182,666 shares (2012:  199,000) to be held in treasury at a cost of £1,610,000 (2012:  £152,000) representing 6.3 per cent. of the shares in issue (excluding treasury shares) as at 31 March 2013.

The Company cancelled 56,421 shares (2012: nil) from the other distributable reserve at a weighted average cost of 71.90 pence per share, leaving a balance of 2,599,255 shares (2012:  473,010) in treasury representing 7.5 per cent. (2012:  1.4 per cent.) of the shares in issue as at 31 March 2013.

Under the terms of the Dividend Reinvestment Scheme Circular, the following Ordinary shares were allotted in the year to 31 March 2013:

Date of allotment	Number of shares allotted	Aggregate nominal value  of shares  (£'000)	Issue price  (pence per share)	Net  Consideration  received  (£'000)	Opening market price per share on allotment date (pence per share)
31 August 2012	57,071	29	83.50	47	73.38
28 February 2013	54,495	1	87.20	46	80.00
	111,566	30		93

During the year the following Ordinary shares were allotted under the terms of the Albion VCTs Linked Top Up Offers 2011/2012 and the Albion VCTs Top Up Offers 2012/2013.

Date of allotment	Number of shares allotted	Aggregate nominal value  of shares  (£'000)	Issue price  (pence per share)	Net  Consideration  received  (£'000)	Opening market price per share on allotment date (pence per share)
5 April 2012	755,882	378	87.80	627	71.75
31 May 2012	84,913	42	87.80	71	67.25
19 December 2012	293,671	3	89.60	249	80.00
	1,134,466	423		947

16. Basic and diluted net asset value per share

	31 March 2013	31 March 2012
	(pence per share)	(pence per share)
Basic and diluted net asset value per share	92.90	84.90

The basic and diluted net asset values per share at the year end are calculated in accordance with the Articles of Association and are based upon total shares in issue (less treasury shares) of 31,859,139 Ordinary shares (2012: 32,932,836) at 31 March 2013.

17. Analysis of changes in cash during the year

	31 March 2013 £'000	31 March 2012 £'000
Opening cash balances	5,673	5,502
Net cash flow	525	171
Closing cash balances	6,198	5,673

18. Reconciliation of net return on ordinary activities before taxation to net cash flow from operating activities

	Year ended 31 March 2013 £'000	Year ended 31 March 2012 £'000
Revenue return on ordinary activities before taxation	771	571
Investment management fee charged to capital	(526)	(517)
Movement in accrued amortised loan stock interest	(43)	(39)
Decrease in debtors	4	9
Increase in creditors	17	182
Net cash flow from operating activities	223	206

19. Capital and financial instruments risk management
The Company's capital comprises Ordinary shares as described in note 15.  The Company is permitted to buy-back its own shares for cancellation or treasury purposes, and this is described in more detail on page 20 of the Directors' report in the full Annual Report and Financial Statements.

The Company's financial instruments comprise equity and loan stock investments in unquoted companies, contingent receipts on disposal of fixed asset investments, long term cash deposits, cash balances, short term debtors and creditors which arise from its operations.  The main purpose of these financial instruments is to generate cash flow and revenue and capital appreciation for the Company's operations.  The Company has no gearing or other financial liabilities apart from short term creditors.  The Company does not use any derivatives for the management of its Balance sheet.

The principal risks arising from the Company's operations are:

• Investment (or market) risk (which comprises investment price and cash flow interest rate risk);
• credit risk; and
• liquidity risk.

The Board regularly reviews and agrees policies for managing each of these risks.  There have been no changes in the nature of the risks that the Company has faced during the past year, and apart from where noted below, there have been no changes in the objectives, policies or processes for managing risks during the past year. The key risks are summarised below.

Investment risk
As a venture capital trust, it is the Company's specific nature to evaluate and control the investment risk of its portfolio in unquoted investments, details of which are shown on pages 10 and 11 of the full Annual Report and Financial Statements.  Investment risk is the exposure of the Company to the revaluation and devaluation of investments.  The main driver of investment risk is the operational and financial performance of the portfolio companies and the dynamics of market quoted comparators.  The Manager receives management accounts from portfolio companies, and members of the investment management team often sit on the boards of unquoted portfolio companies; this enables the close identification, monitoring and management of investment risk.

The Manager and the Board formally reviews investment risk (which includes market price risk), both at the time of initial investment and at quarterly Board meetings.

The Board monitors the prices at which sales of investments are made to ensure that profits to the Company are maximised, and that valuations of investments retained within the portfolio appear sufficiently prudent and realistic compared to prices being achieved in the market for sales of unquoted investments.

The maximum investment risk as at the balance sheet date is the value of the fixed and current asset investment portfolio which is £23,671,000 (2012:  £22,315,000).  Fixed and current asset investments form 80 per cent. of the net asset value as at 31 March 2013 (2012:  80 per cent.).

More details regarding the classification of fixed and current asset investments are shown in notes 11 and 13.

Investment price risk
Investment price risk is the risk that the fair value of future investment cash flows will fluctuate due to factors specific to an investment instrument or to a market in similar instruments.  To mitigate the investment price risk for the Company as a whole, the strategy of the Company is to invest in a broad spread of industries with approximately 65 per cent. of the unquoted investments comprising debt securities, which, owing to the structure of their yield and the fact that they are usually secured, have a lower level of price volatility than equity.  Details of the industries in which investments have been made are contained in the Portfolio of investments section on pages 10 and 11 of the full Annual Report and Financial Statements and in the Manager's report.

Valuations are based on the most appropriate valuation methodology for an investment within its market, with regard to the financial health of the investment and the IPEVCV Guidelines.

As required under FRS 29 'Financial Instruments: Disclosures', the Board is required to illustrate by way of a sensitivity analysis, the degree of exposure to market risk.  The Board considers that the value of the fixed and current asset investment portfolio is sensitive to a 10 per cent. change based on the current economic climate.  The impact of a 10 per cent. change has been selected as this is considered reasonable given the current level of volatility observed both on a historical basis and future expectations.

The sensitivity of a 10 per cent. increase or decrease in the valuation of the fixed and current asset investments (keeping all other variables constant) would increase or decrease the net asset value and return for the year by £2,367,000 (2012:  £2,232,000).

Cash flow interest rate risk
It is the Company's policy to accept a degree of interest rate risk on its financial assets through the effect of interest rate changes.  On the basis of the Company's analysis, it is estimated that a rise of 1.0 per cent. in all interest rates would have increased total return before tax for the year by approximately £57,000 (2012:  £275,000).  Furthermore, it is considered that a fall of interest rates below current levels during the year would have been very unlikely.

The weighted average interest rate applied to the Company's fixed rate assets during the year was approximately 8.7 per cent. (2012:  5.9 per cent.).  The weighted average period to expected maturity for the fixed rate assets is approximately 5.4 years (2012:  6.1 years).

The Company's financial assets and liabilities, all denominated in pounds sterling, consist of the following:

	31 March 2013				31 March 2012
	Fixed rate £'000	Floating rate £'000	Non- interest bearing £'000	Total £'000	Fixed rate £'000	Floating rate £'000	Non- interest bearing £'000	Total £'000
Unquoted equity	-	-	8,243	8,243	-	-	6,275	6,275
Discounted debt and convertible loan stock	5,780	-	858	6,638	6,023	-	-	6,023
Unquoted loan stock	7,207	-	-	7,207	7,913	-	472	8,385
Current asset investments	1,553	-	30	1,583	1,500	-	132	1,632
Debtors*	-	-	43	43	-	-	181	181
Cash	5,277	921	-	6,198	5,673	-	-	5,673
Current liabilities*	-	-	(288)	(288)	-	-	(238)	(238)
Total net assets	19,817	921	8,886	29,624	21,109	-	6,822	27,931

*The debtors and current liabilities do not reconcile to the Balance sheet as prepayments and tax payable are not included in the above table.

Credit risk
Credit risk is the risk that the counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company.  The Company is exposed to credit risk through its debtors, contingent future receipts, investment in unquoted loan stock and through the holding of cash on deposit with banks.

The Manager evaluates credit risk on loan stock and other similar instruments prior to investment, and as part of its ongoing monitoring of investments.  In doing this, it takes into account the extent and quality of any security held.  Typically loan stock instruments have a first fixed charge or a fixed and floating charge over the assets of the portfolio company in order to mitigate the gross credit risk.  The Manager receives management accounts from portfolio companies, and members of the investment management team often sit on the boards of unquoted portfolio companies; this enables the close identification, monitoring and management of investment-specific credit risk.

The Manager and the Board formally review credit risk (including debtors) and other risks, both at the time of initial investment and at quarterly Board meetings.

The Company's total gross credit risk as at 31 March 2013 was limited to £13,845,000 (2012: £14,408,000) of unquoted loan stock instruments (all of which are secured on the assets of the portfolio company), £6,198,000 (2012:  £5,673,000) of cash deposits with banks, £1,553,000 of term deposits (2012:  £1,500,000) and £30,000 of contingent future receipts (2012: £132,000).

As at the balance sheet date, the cash held by the Company is held with the Lloyds TSB Bank plc, Scottish Widows Bank plc (part of Lloyds TSB Bank plc), Barclays Bank Plc, National Westminster Bank plc, Close Brothers Limited and UBS Wealth Management (part of UBS AG).  Credit risk on cash transactions is mitigated by transacting with counterparties that are regulated entities subject to regulatory supervision, with Moody's credit ratings of at least 'A' or equivalent as assigned by international credit-rating agencies.

The Company has an informal policy of limiting counterparty banking and floating rate note exposure to a maximum of 20 per cent. of net asset value for any one counterparty.

The credit profile of unquoted loan stock is described under liquidity risk below.

The cost, impairment and carrying value of impaired loan stocks held at amortised cost are as follows:

	31 March 2013			31 March 2012
	Cost £'000	Impairment £'000	Carrying value £'000	Cost £'000	Impairment £'000	Carrying value £'000
Impaired loan stock	1,911	(624)	1,287	1,950	(365)	1,585

Impaired loan stock instruments have a first fixed charge or a fixed and floating charge over the assets of the portfolio company and the Board estimate that the security value approximates to the carrying value.

Liquidity risk
Liquid assets are held as cash on current account, cash on deposit or short term money market account.  Under the terms of its Articles, the Company has the ability to borrow up to 10 per cent. of its adjusted share capital and reserves, which amounts to £2,960,000 (2012:  £2,796,000) as at 31 March 2013.

The Company has no committed borrowing facilities as at 31 March 2013 (2012:  £nil) and had cash balances of £6,198,000 (2012:  £5,673,000), which are considered to be readily realisable within the timescales required to make cash available for investment.  The main cash outflows are for new investments, share buy-backs and dividend payments, which are within the control of the Company.  The Manager formally reviews the cash requirements of the Company on a monthly basis, and the Board on a quarterly basis as part of its review of management accounts and forecasts.  All the Company's financial liabilities are short term in nature and total £322,000 as at 31 March 2013 (2012:  £238,000).

The carrying value of loan stock investments held at amortised cost and at fair value through profit or loss at 31 March 2013 as analysed by expected maturity dates is as follows:

Redemption date	Fully performing £'000	Past due £'000	Impaired £'000	Total £'000
Less than one year	700	950	188	1,838
1-2 years	623	810	866	2,299
2-3 years	2,439	1,705	48	4,192
3-5 years	2,020	65	185	2,270
+5 years	3,074	172	-	3,246
Total	8,856	3,702	1,287	13,845

Loan stock can be past due as a result of interest or capital not being paid in accordance with contractual terms.

Loan stock categorised as past due includes:

• Loan stock with a carrying value of £1,384,000 which has interest past due for less than 12 months yielded 11.4 per cent. on cost;
  
  
• Loan stock with a carrying value of £1,172,000 which has interest past due between 2 and 3 years in renewable energy companies who are building up interest yield as installation of units are completed. Typically these loan stocks yield in excess of 9 per cent. once installed.
  
  
• Loan stock with a value of £1,146,000 which has interest overdue of 13 months.

The carrying value of loan stock investments held at amortised cost at 31 March 2012 as analysed by expected maturity dates was as follows:

Redemption date	Fully performing £'000	Past due £'000	Impaired £'000	Total £'000
Less than one year	425	204	473	1,102
1-2 years	646	672	287	1,605
2-3 years	348	661	661	1,670
3-5 years	3,726	2,863	164	6,753
+5 years	-	3,278	-	3,278
Total	5,145	7,678	1,585	14,408

In view of the factors identified above, the Board considers that the Company is subject to low liquidity risk.

Fair values of financial assets and financial liabilities
All the Company's financial assets and liabilities as at 31 March 2013 are stated at fair value as determined by the Directors, with the exception of loans and receivables included within investments, cash balances, debtors and creditors, which are carried at amortised cost, in accordance with FRS 26.  The Directors believe that the current carrying value of loan stock is not materially different to the fair value.  There are no financial liabilities other than creditors.  The Company's financial liabilities are all non-interest bearing.  It is the Directors' opinion that the book value of the financial liabilities is not materially different to the fair value and all are payable within one year.

20. Commitments and contingencies
As at 31 March 2013, the Company had the following financial commitments in respect of investments:

• Proveca Limited, £362,000;
• MyMeds&Me Limited, £180,000;
• DySIS Medical Limited, £46,000;
• Mi-Pay Limited, £36,000.

21. Post balance sheet events
Since 31 March 2013, the Company has had the following post balance sheet events:

• April 2013: DySIS Medical Limited investment of £46,000;
• June 2013: Proveca Limited investment of £181,000.

The following Ordinary shares were allotted under the Albion VCTs Top Up Offers 2012/2013 since the year end:

Date of allotment	Number of shares allotted	Aggregate nominal value  of shares  (£'000)	Issue price  (pence per share)	Net  Consideration  received  (£'000)	Opening market price on allotment date (pence per share)
5 April 2013	1,492,828	15	89.90	1,302	82.25
12 June 2013	387,756	4	89.90	338	82.00
	1,880,584	19		1,640

The Offer closed on 12 June 2013.

22. Related party transactions
There are no related party transactions or balances requiring disclosure.

23. Principal risks and uncertainties
In addition to the current economic risks outlined in the Chairman's statement, the Board considers that the Company faces the following major risks and uncertainties:

1. Economic risk
Changes in economic conditions, including, for example, interest rates, rates of inflation, industry conditions, competition, political and diplomatic events and other factors could substantially and adversely affect the Company's prospects in a number of ways.

To reduce this risk, in addition to investing equity in portfolio companies, the Company often invests in secured loan stock and has a policy of not normally permitting any external bank borrowings within portfolio companies.  Additionally, the Manager has been rebalancing the sector exposure of the portfolio with a view to reducing reliance on consumer led sectors.

2. Investment risk
This is the risk of investment in poor quality assets which reduces the capital and income returns to shareholders, and negatively impacts on the Company's reputation.  By nature, smaller unquoted businesses, such as those that qualify for venture capital trust purposes, are more fragile than larger, long established businesses.

The success of investments in certain sectors is also subject to regulatory risk, such as those affecting companies involved in UK renewable energy.

To reduce this risk, the Board places reliance upon the skills and expertise of the Manager and its strong track record for investing in this segment of the market. In addition, the Manager operates a formal and structured investment process, which includes an Investment Committee, comprising investment professionals from the Manager and at least one external investment professional.  The Manager also invites and takes account of comments from non-executive Directors of the Company on investments discussed at the Investment Committee meetings.  Investments are actively and regularly monitored by the Manager (investment managers normally sit on portfolio company boards) and the Board receives detailed reports on each investment as part of the Manager's report at quarterly board meetings.  It is the policy of the Company for portfolio companies to not normally have external borrowings.

The Board and the Manager closely monitor regulatory changes within the sectors invested in.

3. Valuation risk
The Company's investment valuation method is reliant on the accuracy and completeness of information that is issued by portfolio companies.  In particular, the Directors may not be aware of or take into account certain events or circumstances which occur after the information issued by such companies is reported.

As described in note 2 of the Financial Statements, the unquoted equity investments, convertible loan stock and debt issued at a discount held by the Company are designated at fair value through profit or loss and valued in accordance with the International Private Equity and Venture Capital Valuation Guidelines.  These guidelines set out recommendations, intended to represent current best practice on the valuation of venture capital investments.  These investments are valued on the basis of forward looking estimates and judgements about the business itself, its market and the environment in which it operates, together with the state of the mergers and acquisitions market, stock market conditions and other factors.  In making these judgements the valuation takes into account all known material facts up to the date of approval of the Financial Statements by the Board. The sensitivity of these assumptions is commented on further in notes 11 and 19. All other unquoted loan stock is measured at amortised cost.

4. Venture capital trust approval risk
The Company's current approval as a venture capital trust allows investors to take advantage of tax reliefs on initial investment and ongoing tax free capital gains and dividend income.  Failure to meet the qualifying requirements could result in investors losing the tax relief on initial investment and loss of tax relief on any tax-free income or capital gains received. In addition, failure to meet the qualifying requirements could result in a loss of listing of the shares.

To reduce this risk, the Board has appointed the Manager, who has a team with experience in venture capital trust management, used to operating within the requirements of the venture capital trust legislation. In addition, to provide further formal reassurance, the Board has appointed PricewaterhouseCoopers LLP as its taxation advisor. PricewaterhouseCoopers LLP report quarterly to the Board to independently confirm compliance with the venture capital trust legislation, to highlight areas of risk and to inform on changes in legislation.

5. Compliance risk
The Company is listed on The London Stock Exchange and is required to comply with the rules of the UK Listing Authority, as well as with the Companies Act, Accounting Standards and other legislation. Failure to comply with these regulations could result in a delisting of the Company's shares, or other penalties under the Companies Act or from financial reporting oversight bodies.

Board members and the Manager have experience of operating at senior levels within quoted businesses. In addition, the Board and the Manager receive regular updates on new regulation from its auditor, lawyers and other professional bodies.

6. Internal control risk
Failures in key controls, within the Board or within the Manager's business, could put assets of the Company at risk or result in reduced or inaccurate information being passed to the Board or to shareholders.

The Audit Committee meets with the Manager's Internal Auditor, Littlejohn LLP, when required, receiving a report regarding the last formal internal audit performed on the Manager, and providing the opportunity for the Audit Committee to ask specific and detailed questions. Lord St. John of Bletso, as Audit Committee Chairman, met with the internal audit Partner of Littlejohn LLP in February 2013 to discuss the most recent Internal Audit Report on the Manager.  The Manager has a comprehensive business continuity plan in place in the event that operational continuity is threatened.  Further details regarding the Board's management and review of the Company's internal controls through the implementation of the Turnbull guidance are detailed on page 24 of the full Annual Report and Financial Statements.

Measures are in place to mitigate information risk in order to ensure the integrity, availability and confidentiality of information used within the business.

7. Reliance upon third parties risk
The Company is reliant upon the services of Albion Ventures LLP for the provision of investment management and administrative functions.  There are provisions within the management agreement for the change of Manager under certain circumstances (for further detail, see the management agreement paragraph on page 19 of the full Annual Report and Financial Statements).  In addition, the Manager has demonstrated to the Board that there is no undue reliance placed upon any one individual within Albion Ventures LLP.

8. Financial risk
By its nature, as a venture capital trust, the Company is exposed to investment risk (which comprises investment price risk and cash flow interest rate risk), credit risk and liquidity risk.  The Company's policies for managing these risks and its financial instruments are outlined in full in note 19 to the Financial Statements.

All of the Company's income and expenditure is denominated in sterling and hence the Company has no foreign currency risk.  The Company is financed through equity and does not have any borrowings.  The Company does not use derivative financial instruments for speculative purposes.

24. Other information 

The information set out in this announcement does not constitute the Company's statutory accounts within the terms of section 434 of the Companies Act 2006 for the years ended 31 March 2013 and 31 March 2012, and is derived from the statutory accounts for those financial years, which have been, or in the case of the accounts for the year ended 31 March 2013, which will be, delivered to the Registrar of Companies. The Auditor reported on those accounts; the reports were unqualified and did not contain a statement under s498 (2) or (3) of the Companies Act 2006.

The Company's Annual General Meeting will be held at The City of London Club, 19 Old Broad Street, London, EC2N 1DS on 14 August 2013 at 11.00am.

25. Publication 

The full audited Annual Report and Financial Statements are being sent to shareholders and copies will be made available to the public at the registered office of the Company, Companies House, the National Storage Mechanism and also electronically at www.albion-ventures.co.uk under the 'Our Funds' section, by clicking on 'Albion Enterprise VCT PLC', where the Report can be accessed as a PDF document via a link under the 'Investor Centre' in the 'Financial Reports and Circulars' section.

AAEV - Split of portfolio by sector

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The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.

Source: Albion Enterprise VCT PLC via Thomson Reuters ONE

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