Half-yearly report

Albion Development VCT

22/08/2013 15:33

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