TIDMABNY
RNS Number : 4591E
Albany Investment Trust PLC
31 May 2012
Albany Investment Trust Plc (the "Company")
Final Results
Summary of results
Capital 29th February 28th February % Change
2012 2011
Total assets
less current
liabilities GBP32,288,000 GBP33,775,000 -4.4
-------------- -------------- ---------
Net asset value
per 20p share 322.11p 336.95p -4.4
-------------- -------------- ---------
FT All-Share
Index 3,043.91 3,106.58 -2.0
-------------- -------------- ---------
FTSE 100 Index 5,871.51 5,994.01 -2.0
-------------- -------------- ---------
Revenue 29th February 28th February % Change
2012 2011
-------------- -------------- ---------
Net revenue
after tax GBP927,000 GBP796,000 +20.5
-------------- -------------- ---------
Total rate of
interim and
final dividends
D net pence
per share 10.4p 10.2p +2.0
-------------- -------------- ---------
Revenue return
per share 9.25p 7.67p +20.5
-------------- -------------- ---------
ChairmanOs Statement
OThe global macro-economic outlook remains uncertain: ChinaOs
growth is lower than expected, the US economy is coming out of
recession more slowly than hoped for and significant uncertainties
remain in the Eurozone. With these significant downside risks
weighing on the markets, the FTSE All Share Index fell by 2% last
year and the MSCI World Index fell by 4%. The performance in the
first two monthsO of 2012 was more positive, but since the
CompanyOs year end the markets once more proved to be very
volatile, reflecting the fragility of confidence in the
fundamentals for any recovery and the risk of further shocks to the
banking system.
Albany had a slightly disappointing performance last year
underperforming the FTSE All Share Index by 2%, with a fall in the
Net Asset Value of 4%. This was partly as a result of the relative
performance of the sectors in which Albany does not invest because
of the dividend yield. There was better performance in terms of
income, where the dividend income has increased during the year.
While it has not yet returned to the levels of previous years, the
prospects have improved as companies continue to raise dividend
payouts and specifically for example BP has returned to the
dividend list. These factors among others have given the Board
confidence in marginally increasing the final dividend to 6.5p per
share. The dividend remains uncovered for this year, although to a
lesser extent than last year. However the Board recognises the
importance to the shareholders of balancing income and capital
growth and given our strong revenue reserve, new rules allowing
distribution from capital reserves and the improved prospects for
dividend income the Board remains comfortable with this
position.
As last year we will not be printing the interim accounts which
will be available via our website,
www.albanyinvestmenttrrust.com.
We welcome Viscount Chandos to the Board who brings a wealth of
experience of the Investment Company sector.Finally, I do hope to
see as many of you as possible at the AGM at 2.30pm on 11th July
where you will have a chance to meet the Board, the Investment
Managers and advisers.
M Wolstenholme
Chairman, 25(th) May 2012
Investment ManagersO Report
The year to the end of February 2012 has been an eventful one.
The markets have wrestled with fluctuating levels of greed and fear
which manifested in a largely benign point to point FTSE All Share
performance, disguising the volatility experienced during the year
with a 21% index range between the high and low of the TrustOs
year.
The drivers of the market have been distinct, with corporate
earnings positivity being suppressed by macroeconomic negativity;
mainly due to European stability concerns. The reporting seasons
have largely surprised on the upside with revenue growth, ongoing
balance sheet strength and rising dividends all well received.
The European situation, while in part has been aided by action
taken by the Troika (European Commission, European Central Bank and
the International Monetary Fund), the structural problems have not
yet been dealt with. The bailouts provided for Ireland and Greece
have utilised a significant amount of the funds set aside and as
such concern is that there is not sufficient firepower left should
Portugal and Spain require assistance. This ongoing challenge and
strive for growth, suggests that interest rates will continue to
remain low for some time, indeed the ECB still has scope to cut
interest rates.
Inflation, particularly in the UK, has been falling month on
month since the peak in September 2011 as the powerful base effects
of steeply rising oil prices in the prior 12 months begins to fall
out of the calculation, as well as the VAT rate rise effect and
continued muted pressure on wage inflation. All these effects
enable the monetary authorities to promote growth through low
borrowing costs without risking endemic inflation. Declining
inflation has a potentially powerful effect on disposable incomes
and could in turn aid economic growth.
The report last year highlighted, for the second year in a row,
that cash was a relatively unattractive investment. This continues
to be the case given the aforementioned issues. Therefore the
portfolio has been reasonably fully invested, other than when
liquidity has been raised tactically in the short term, in order to
maximise the use of the Trust assets.
Looking in more detail at the performance over the year, an
underweight position to both mining and banks contributed
positively to performance as did the overweight position on
Technology. Offsetting that, to some extent, was the exposure to
Food Retail, and the underweight to General Retail, which has been
surprisingly strong, as well as an underweight position in
Pharmaceuticals.
As the tone of this report suggests, performance has been mixed
and while we have enjoyed some excellent individual stock returns,
there have also been some disappointing names in the portfolio. On
the positive side, Apple, Telecity, British American Tobacco and
Interserve, which all remain in the portfolio, produced very strong
price appreciation over the period. However, Lloyds, Man Group and
Pace all detracted from performance, with the latter no longer held
in the portfolio.
The focus, in terms of strategy, continues to be on good quality
companies with appropriate balance sheet financing, attractive
valuations and catalysts for growth, in both capital value and
dividend progression. As ever, we remain thankful for the
continuing faith investors maintain in our approach over the medium
term and look forward to the next year with you, with optimism.
Rathbone Investment Management
25th May 2012
Report of the Directors
The directors submit to the shareholders the annual report and
financial statements for the year ended 29th February 2012
Accounts and dividends
Details of revenue are contained in the Income Statement set out
below. An Interim dividend of 3.9 pence per Ordinary share was paid
to shareholders on 25 November 2011.
The directors recommend payment of a final dividend of 6.5 pence
per Ordinary share in respect of the year ended 29th February 2012.
Subject to approval at the Annual General Meeting, the dividend
will be paid on 18 July 2012.
Activities of the company
The company carries on the normal business of an investment
trust as defined by Section 833, Companies Act 2006. The annual
report adheres to the principles and recommendations in the AIC
code.
Business review
A review of the business and future prospects is contained in
the ChairmanOs Statement and the Investment ManagersO Report set
out above.
ISAs
The affairs of the company have been conducted in such a way as
to comply with the qualifying equity rule as defined in the ISA
Regulations. It is the current intention of the directors that the
company will continue to conduct its affairs to satisfy this
requirement.
Directors
Viscount Chandos was appointed as a director on 13 October 2011
and Messrs R A Morris and JRA Nottingham retire under the terms of
the Articles of Association, and being eligible offer themselves
for re-election. The companyOs procedures regarding the appointment
of directors are contained in the Corporate Governance report
below. Qualifying third party indemnity provisions are in place for
the benefit of the directors.
DirectorsO interests
The interests of each director in the companyOs Ordinary 20p
shares at 1st March 2011 and 29th February 2012 are shown below.
There were no changes in these shareholdings between 29th February
2012 and 18th May 2012. The directors do not have the right to
subscribe for any further shares via share option schemes.
Net asset value
Particulars appear in the summary of results above.
Capital structure
Details of the companyOs capital structure and voting rights are
set out in note 13 to the financial statements.
Significant shareholdings
At 29th February 2012 the following shareholders owned more than
3% of the Companies Ordinary Shares: Alliance Trust Savings
Nominees Limited (3.4%), Giltspur Nominees Limited (4.5%) and
Rulegale Nominees Limited (10.4%). No changes have been disclosed
between 29 February 2012 and 18 May 2012.
HM Revenue & Customs (HMRC) approval
The company, which is an Investment Company within the meaning
of Section 833 Companies Act 2006, has received approval as an
Investment Trust from the HMRC under Section 1158 of the
Corporation Tax Act 2010 in respect of the year ended 28th February
2011 and has subsequently directed its affairs to enable it to
continue to seek such approval. HMRCOs regulations on the
modernisation of the investment trust tax rules have been finalised
and the restriction on the distribution of capital profits by way
of dividend has now been removed.
Principal risks, uncertainties and future performance
The principal risks facing the company relate to the companyOs
investment activities. An explanation of these risks and how they
are managed is contained in note 11 to the accounts. In addition,
breach of section 1158 of the Corporation Tax Act 2010 could lead
to the company being subject to capital gains tax. The Investment
Managers monitor investment movements to ensure the provisions of
section 1158 are not breached.
Payment policy and practice
It is the companyOs policy to settle the terms of payment with
suppliers when agreeing the terms of the transaction, to ensure
that suppliers are aware of these terms and to abide by them. At
29th February 2012 the company had no trade creditors (2011:
Nil).
Other policies
As the company does not have any employees or premises, it does
not have any policies in respect of environmental matters,
employees or social and community issues.
Contractual arrangements
Details of arrangements with Rathbone Investment Management are
set out in note 18.
International Financial Reporting Standards (IFRS)
The directors have decided not to voluntarily adopt IFRS. IFRS
are currently mandatory only for consolidated financial
statements.
Auditors
Grant Thornton UK LLP offer themselves for reappointment in
accordance with Section 489 of the Companies Act 2006.
Port of Liverpool Building, Pier Head, Liverpool L3 1NW.
BY ORDER OF THE BOARD
T W EVANS Secretary, 25 May 2012
Board of Directors
Manjit Wolstenholme
Aged 47
Currently Non Executive Director of Provident Financial, Capital
& Regional plc, Future plc, Unite Group plc and Non Executive
Governor of Manchester Academic Health and Science Centre. Prior to
this she spent her career in Investment Banking advising major
companies on mergers and acquisitions.
R A Morris CBE, DL
Aged 70
Joined the Board in January 1987 after becoming Secretary in
June 1979. He is Chairman of Park Prepayments Trust Co.Ltd and
Business Consultant for Weightmans Solicitors.
He is a Deputy Lieutenant and a former High Sheriff of
Merseyside and has been involved in investment management all of
his business career.
J R A Nottingham FCA
Aged 70
Joined the Board in July 1995. Nearly 50 years investment
experience working with a number of leading investment institutions
covering the whole range of investment areas including Investment
Trusts, both in the UK and overseas.
Sir David Henshaw BA, MSocSci, FCMI,
Aged 63
Joined the Board in June 2004. Former Chief Executive of
Liverpool City Council until March 2006 and Chief Executive of
Liverpool Capital of Culture. He recently completed a redesign of
the UK Child Support system. He is Chairman of Alder Hey ChildrenOs
Hospital Foundation Trust and has a number of other private and
public interests.
Viscount Chandos
Age 59
Currently Chairman of Real Estate Credit Investments Limited,
Invista European Real Estate Trust Limited and on the Board of a
number of private companies and also Chairman of the Esmee
Fairbairn Foundation. Thirty five years experience in investment
banking and principal investing. A member of the House of Lords
DirectorsO Shareholding
Beneficial Non-beneficial
2012 2011 2012 2011
------- ------- -------- -------
R A Morris 10,030 10,030 27,500 27,500
------- ------- -------- -------
J R A Nottingham 6,000 6,000 D D
------- ------- -------- -------
Sir David Henshaw D D D D
------- ------- -------- -------
M Woltenholme D D D D
------- ------- -------- -------
Viscount Chandos D D
------- ------- -------- -------
Viscount Chandos dd not own any shares at the date of his
appointment
Corporate Governance
The company is committed to applying the highest principles of
corporate governance commensurate with its size and nature. The
Board is accountable to the companyOs shareholders for good
corporate governance. This report and the DirectorsO Remuneration
Report describe how it complies with the provisions of the UK
Corporate Governance Code (2010).
Compliance The company has complied throughout the year with the
provisions set out in the UK Corporate Governance Code (2010)
except as follows:
A.4.1: A senior independent director has not been nominated.
B.2.1: A nomination committee has not been set up.
C.3.1: An audit committee has not been set up.
D.1: Directors are paid only a basic fee.
D.2.1: A remuneration committee has not been set up.
Following consideration of the principles and reccomendations of
the AIC code of Corporate Governance, and in the context of being
an externally managed investment company, the Board do not believe
that the above committees would benefit the company at this time,
as the work normally undertaken by such committees is carried out
by the Board as a whole. Further, the Board do not believe that the
nomination of a senior independent director, nor the payment of
performance related remuneration to the directors, would be of
benefit to the company given the size of the Board.
Application of the principles
Directors The company supports the concept of an effective Board
leading and controlling the company.
The Board met six times during the year (Mrs M Wolstenholme and
R A Morris attended six meetings, J R A Nottingham five, Sir David
Henshaw four and Viscount Chandos three) and is responsible for
approving company policy and strategy, reviewing investment
performance, financial reporting and communication.
The Board is supplied with appropriate and timely information
and the directors are free to seek any further information they
consider necessary. All directors have access to advice from the
company secretary and independent professionals at the companyOs
expense. Training is available from the appropriate sources for
directors as necessary.
The Board comprises the Chairman and four non-executive
directors, three of whom are independent (J R A Nottingham,
Viscount Chandos and Sir David Henshaw). The directors consider
that J R A Nottingham remains independent despite his period of
service exceeding nine years as his actions, advice and
contributions at board meetings consistently display decision
making in the best interests of the shareholders and as his
personal shareholding is not significant. The Board composition
provides a balance whereby the BoardOs decision making cannot be
dominated by any individual. All directors take decisions
objectively in the interests of the company.
The Chairman is responsible for leadership of the Board,
ensuring its effectiveness in all aspects of its role, and setting
its agenda. The Board confirms the appointment of the Chairman
annually.
All independent directors are subject to re-election every three
years up to the age of 70 or nine yearsO service and annually
thereafter, and, on appointment, at the first AGM after
appointment. Non-independent directors are re-elected annually.
Appointments of new directors are made on merit. Care is taken
to ensure that appointees have sufficient time available to devote
to the job.
Individual directorOs performance and the performance of the
Board as a whole are evaluated annually by the Chairman, taking
into account issues such as attendance and contribution quality and
noting how this feeds into the companyOs overall performance.
Relations with shareholders
The company values the views of its shareholders and recognises
their interest in the companyOs strategy and performance, Board
membership and quality of management. The Chairman ensures that the
views of shareholders are communicated to the Board as a whole.
The AGM, which is normally attended by all Board members, is
used to communicate with private investors and they are encouraged
to participate. Separate resolutions are proposed on each issue so
that they can be given proper consideration and there is a
resolution to adopt the annual report and accounts and a resolution
to approve the DirectorsO Remuneration Report. The company counts
all proxy votes and will indicate the level of proxies lodged on
each resolution, after it has been dealt with by a show of hands.
The company arranges for notices of the AGM and related papers to
be sent to shareholders at least 20 working days before the
meeting.
The share price discount, in absolute terms and relative to
other similar investment trust companies, and the composition of
the share register is discussed at every Board meeting. While there
is no discount target, the Board is aware that discount volatility
is unwelcome to many shareholders and that share price performance
is the measure used by most investors.
The Board oversees the companyOs stockbrokerOs activities which
are designed to stimulate demand for the companyOs shares and
provide effective communication to existing and potential
shareholders.
Accountability and audit
The Board presents a balanced and understandable assessment of
the companyOs position and prospects in all interim and
price-sensitive reports and reports to regulators as well as in the
information required to be presented by statutory requirements. The
responsibilities of the directors as regards the accounts and those
of the auditors are described below, . The Board has formal and
transparent arrangements for considering how it applies the
financial reporting and internal control procedures and for
maintaining an appropriate relationship with the companyOs
auditors.
Grant Thornton UK LLP remain as the companyOs auditor. The Board
are aware of other providers of such services and regularly
consider the competitiveness of the current provider against market
rates.
The Board reviews the nature and extent of non-audit services
supplied by the external auditors, seeking to balance objectivity
and value for money. The directors review annually the level and
nature of non-audit services provided by the external auditors.
Internal control The Board is responsible for maintaining a
sound system of internal control to safeguard shareholdersO
investment and the companyOs assets and for reviewing its
effectiveness. Such a system is designed to manage rather than
eliminate the risk of failure to achieve business objectives and
can only provide reasonable and not absolute assurance against
material misstatement or loss.
The Board conducts a review annually of the companyOs system of
internal controls. All material controls are covered, including
financial, operational and compliance controls and systems to
manage risks. The Board ensures that any necessary actions are
taken to remedy significant failings or weaknesses as
identified.
The company has established a system for identifying, evaluating
and managing the companyOs key risks. Strategic risks are regularly
reviewed by the Board and it has determined that the Risk Register
which it has established will be monitored by the Board and
reviewed formally at Board meetings, at least annually. The latest
review was completed in December 2011.
The key risks reviewed cover the areas of:
a Strategy and management
a Independence
a Outsourcing arrangements
a Reputational risk
a Reliability of investment manager
a Fraud
a Legislative requirements
a Insurance
The key features of the companyOs system of internal financial
control are as follows:
The directors have delegated day-to-day investment decisions to
Rathbone Investment Management Limited. The Investment Manager
operates within the investment guidelines set out by the Board.
Compliance with the investment policy is monitored on a daily basis
by Rathbone Investment Management Limited and reviewed by the Board
monthly. The portfolio management is at the discretion of the
Investment Manager. The board of directors have however laid down
the following investment policy:
The trust must remain a general UK trust with up to 25% invested
overseas, seeking to achieve a balance between capital growth and
income. Investments may comprise UK listed companies, overseas
listed companies, unit and investment trusts, fixed interest
securities and cash. No more than 15% can be invested in any one
company or held in cash. Unless with the express authority of the
Board the fund manager will not invest in deriviatives such as
warrants and futures. Rathbone Investment Management Limited, under
instruction from the Board, also provides administration services
for Albany Investment Trust plc. Management fees are payable for
investment and administration services.
Rathbone Investment Management Limited is regulated by the
Financial Services Authority and has a banking licence under the
Financial Services Market Act 2000. This provides a high level of
control over the procedures of Albany Investment Trust plc. The
directors receive a report from the internal audit department of
Rathbone Investment Management Limited in respect of internal
procedures and controls on an annual basis.
The Board confirms the continuing appointment of the investment
manager on the terms agreed. The appointment is kept under review
and a periodic review is currently in progress.
The Board is of the view that the company has established
procedures in place to identify, evaluate and manage the
significant financial reporting risks faced by the company. Key
elements of the companyOs internal control procedures include:
a Well established budget functions that are regularly monitored throughout the year
a Detailed management information is received by the Board on a monthly basis
The Board has also reviewed the operation and effectiveness of
the companyOs systems of internal financial control and has
considered the need for an internal audit function but has decided
the size of the company does not justify it at present. However, it
will keep the decision under annual review.
Going concern
After making enquiries, the directors have a reasonable
expectation that the company has adequate resources to continue in
operational existence for the foreseeable future, and its assets
consist mainly of securities that are readily realisable. For this
reason they continue to adopt the going concern basis in preparing
the financial statements.
ON BEHALF OF THE BOARD - M Wolstenholme Chairman, 25th May
2012
Statement of DirectorsO Responsibilities
The directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law, the directors
have elected to prepare financial statements in accordance with
United Kingdom Accounting Standards (United Kingdom Generally
Accepted Accounting Practice). Under company law the directors must
not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the
company and of the profit or loss of the company for that
period.
In preparing these financial statements, the directors are
required to:
a select suitable accounting policies and then apply them
consistently
a make judgements and estimates that are reasonable and
prudent;
a state whether applicable UK accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
a prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the companyOs
transactions and disclose with reasonable accuracy at any time the
financial position of the company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
In so far as each of the directors are aware:
a there is no relevant audit information of which the companyOs
auditors are unaware; and
a the directors have taken all steps that they ought to have
taken to make themselves aware of any relevant audit information,
and to establish that the auditors are aware of that
information.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
companyOs website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
To the best of my knowledge:
a the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit of the
company, and
a the annual report includes a fair review of the development
and performance of the business and the position of the company,
together with a description of the principal risks and
uncertainties that they face.
ON BEHALF OF THE BOARD
M Wolstenholme Chairman, 25th May 2012
DirectorsO Remuneration Report
The Board recognises that directorsO remuneration is of
legitimate concern to the shareholders.
SECTION 1: Information not subject to audit
D The remuneration committee
A Remuneration Committee has not been set up, directorsO
remuneration being agreed by the Board as a whole.
D Policy on DirectorsO remuneration
The remuneration of the non-executive directors is determined by
the Board taking account of movements in the RPI. Letters of
appointment are in place for a fixed period of three years for Sir
David Henshaw, Mrs M Wolstenholme and Viscount Chandos and for one
year for Messrs Morris and Nottingham.
No compensation payments are due on termination.
The non-executive directorsO remuneration consists entirely of a
basic annual fee which is reviewed annually. DirectorsO fees were
last reviewed in December 2011 and will next be reviewed in
December 2012.
Total Shareholder return
Year Albany FT Allshare
2007 100.00 100.00
------- ------------
2008 94.61 97.34
------- ------------
2009 65.63 65.24
------- ------------
2010 83.96 96.12
------- ------------
2011 95.83 112.48
------- ------------
2012 94.65 114.20
------- ------------
The graph above shows the companyOs Total Shareholder Return
compared to the FT All Share Total Return Index, which the
directors believe to be the most appropriate index for this
purpose.
SECTION 2: Information subject to audit
D DirectorsO emoluments
Directors do not receive bonuses or share options. Pension
contributions are not paid by the company on behalf of the
directors.
2012 2011
GBP GBP
P T Furlong D 13,950
------- -------
M Wolstenholme 17,250 6,458
------- -------
R A Morris 11,350 11,000
------- -------
J R A Nottingham 11,350 11,000
------- -------
Sir David
Henshaw 11,350 11,000
------- -------
Viscount 4,380 -
Chandos
------- -------
55,680 53,408
------- -------
Approval
This report was approved by the Board of Directors on 25th May
2012 and is signed on its behalf by: M Wolstenholme.
Independent AuditorOs Report As at 29(th) February 2012
We have audited the financial statements of Albany Investment
Trust plc for the year ended 29th February 2012 which comprise the
income statement, the reconciliation of movements in shareholdersO
funds, the balance sheet, the cash flow statement and the related
notes. The financial reporting framework that has been applied in
their preparation is applicable law and United Kingdom Accounting
Standards (United Kingdom Generally Accepted Accounting
Practice).
This report is made solely to the companyOs members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
companyOs members those matters we are required to state to them in
an auditorOs report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the companyOs members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of directors and auditors As
explained more fully in the Statement of DirectorsO
Responsibilities set out below, the directors are responsible for
the preparation of the financial statements and for being satisfied
that they give a true and fair view. Our responsibility is to audit
and express an opinion on the financial statements in accordance
with applicable law and International Standards on Auditing (UK and
Ireland). Those standards require us to comply with the Auditing
Practices BoardOs (APBOs) Ethical Standards for Auditors.
Scope of the audit of the financial statements A description of
the scope of an audit of financial statements is provided on the
APBOs website at www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements In our opinion the financial
statements:
a give a true and fair view of the state of the companyOs
affairs as at 29th February 2012 and of its profit for the year
then ended;
a have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
a have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006 In
our opinion:
a the part of the DirectorsO renumeration report to be audited
has been properly prepared in accordance with the Companies
Act 2006; and
a the information given in the Report of the Directors for the
financial year for which the financial statements are prepared is
consistent with the financial statements; and
a the information given in the Corporate Governance Statement
set out above and in the notes to the financial statements with
respect to internal control and risk management systems in relation
to financial reporting processes and about share capital structures
is consistent with the financial statements.
Matters on which we are required to report by exception We have
nothing to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our
opinion:
a adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
a the financial statements and the part of the DirectorsO
Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
a certain disclosures of directorsO remuneration specified by law are not made; or
a we have not received all the information and explanations we require for our audit; or
a a Corporate Governance Statement has not been prepared by the company.
Under the Listing Rules, we are required to review:
a the directorsO statement, set out above in relation to going concern; and
a the part of the Corporate Governance Statement relating to the
companyOs compliance with the nine provisions of the UK Corporate
Governance Code specified for our review
a certain elements of the report to the shareholders by the Board on directorsO remuneration
Kevin Engel Senior Statutory Auditor for and on behalf of Grant
Thornton UK LLP Statutory Auditor, Chartered Accountants Liverpool
25th May 2012
For the year ended 29th February 2012 (incorporating Profit
& Loss Account)
2012 2011
Revenue Capital Total Revenue Capital Total
Notes GBPO000 GBPO000 GBPO000 GBPO000 GBPO000 GBPO000
Investment holding
gain 8 D (1,201) (1,201) D 4,092 4,092
------- --------- --------- --------- --------- --------- ---------
Income 2 1,202 D 1,202 1,050 D 1,050
------- --------- --------- --------- --------- --------- ---------
Expenses 3 (275) (191) (466) (281) (187) (468)
------- --------- --------- --------- --------- --------- ---------
Return on ordinary
activities before
taxation 927 (1,392) (465) 769 3,905 4,674
------- --------- --------- --------- --------- --------- ---------
Taxation on ordinary 5 D D D D D D
activities
------- --------- --------- --------- --------- --------- ---------
Return on ordinary
activities after taxation
for the financial
year 12 927 (1,392) (465) 769 3,905 4,674
------- --------- --------- --------- --------- --------- ---------
Return per ordinary
share: Basic and diluted 7 9.25p (13.89)p (4.64)p 7.67p 38.96p 46.63p
------- --------- --------- --------- --------- --------- ---------
Reconciliation of movements in ShareholdersO funds
2012 2011
GBPO000 GBPO000
At the beginning of the year 33,775 30,113
--------- ---------
Total gains and losses recognised
since last financial statements (465) 4,674
--------- ---------
Dividends paid (1,022) (1,012)
--------- ---------
At the end of the year 32,288 33,775
--------- ---------
The accompanying notes are an integral part of the financial
statements.
All revenue and capital items in the above statement derive from
continuing operations.
The total column represents the companyOs profit and loss
account. The returns shown in the supplementary revenue and capital
columns are prepared under guidance published by the Association of
Investment Companies.
No operations were acquired or discontinued in the year.
There were no recognised gains and losses other than as included
in the income statement.
Balance Sheet
As at 29th February 2012
2012 2011
Notes GBPO000 GBPO000
Fixed assets:
------- --------- ---------
Investments 8 31,339 33,012
------- --------- ---------
Current assets:
------- --------- ---------
Debtors 9 90 57
------- --------- ---------
Cash at bank and in hand 915 762
------- --------- ---------
1,005 819
------- --------- ---------
Creditors amounts falling
due within one year 10 (56) (56)
------- --------- ---------
Net current assets 949 763
------- --------- ---------
Total assets less current
liabilities 32,288 33,775
------- --------- ---------
Capital and reserves:
------- --------- ---------
Called up share capital 13 2,005 2,005
------- --------- ---------
Capital reserve D realised 12 28,776 30,170
------- --------- ---------
Capital reserve D unrealised 12 77 75
------- --------- ---------
Revenue reserve 12 1,430 1,525
------- --------- ---------
Total shareholdersO funds 32,288 33,775
------- --------- ---------
Net asset value per ordinary
share: Basic 14 322.11p 366.95p
------- --------- ---------
The financial statements were approved by the Board of directors
on 25th May 2012 and were signed on its behalf by:
M Wolstenholme Chairman
The accompanying notes are an integral part of the financial
statements.
Company number: 429589
Cash Flow Statement
For the year ended 29th February 2012
2012 2011
Notes GBPO000 GBPO000
Operating activities
------- --------- ---------
Investment income received 1,158 1,095
------- --------- ---------
Bank interest received 43 44
------- --------- ---------
Expenses paid (466) (464)
------- --------- ---------
Net cash inflow from operating
activities 16 735 675
------- --------- ---------
Financial investment
------- --------- ---------
Purchase of investments (15,231) (18,826)
------- --------- ---------
Disposal of investments 15,671 19,474
------- --------- ---------
Cash inflow from financial
investments 440 648
------- --------- ---------
Equity dividends paid (1,022) (1,012)
------- --------- ---------
Increase in cash 15 153 311
------- --------- ---------
The accompanying notes are an integral part of the financial
statements.
Notes to the Financial Statements
1. Principal Accounting policies
A summary of the principal accounting policies is set out below
which have remained unchanged from the preceding year.
a) Basis of accounting The financial statements are prepared
under the historical cost convention, except for the measurement at
fair value of investments. The financial statements have been
prepared in accordance with the Companies Act 2006 and applicable
United Kingdom accounting standards (United Kingdom Generally
Accepted Accounting Practice) and with the Statement of Recommended
Practice: OFinancial Statements of Investment Trust Companies and
Venture Capital TrustsO (issued January 2009).
b) Dividends Dividends declared during the year to the holders
of the equity instruments are recognised in the financial
statements. Dividends declared to the holders of the equity
instruments after the balance sheet date are not recognised as a
liability. The aggregate amount of equity dividends proposed before
approval of the financial statements, which have not been shown as
liabilities at the balance sheet date, are disclosed in the notes
to the financial statements. Dividends are charged direct to
equity.
c) Valuation of investments The investment portfolio is managed
and its performance is evaluated on a fair value basis, in
accordance with a documented investment strategy, and information
about the investments is provided internally on that basis to the
directors. Accordingly, investments are designated on initial
recognition at fair value through profit or loss. Subsequent to
initial recognition, investments are measured at fair value with
changes in fair value recognised in the income statement. Quoted
investments are valued at bid prices, as reported by the UK Listing
Authority.
Unquoted investments are valued by the Board, at the BoardOs
estimate of fair value, by reference to the following valuation
guidelines: Asset values, earnings, dividends and other relevant
factors.
Realised surpluses or deficits on the disposal of investments
and permanent impairments in the value of investments are taken to
capital reserve D realised, surpluses on revaluation of investments
held on a recognised active market are taken to capital reserves D
realised and unrealised surpluses and deficits on the revaluation
of investments with no active market are taken to capital reserve D
unrealised, as explained in note 1(h) below. Year end exchange
rates are used to translate the value of investments which are
denominated in foreign currencies.
d) Income Dividends receivable on quoted equity shares are
brought into account on the ex-dividend date. Dividends receivable
on equity shares where no ex-dividend date is quoted are brought
into account when the companyOs right to receive payment is
established. Fixed returns on non-equity shares are recognised on a
time apportionment basis so as to reflect the effective yield on
the shares. Other returns on non-equity shares are recognised when
the right to return is established. The fixed return on a debt
security is recognised on a time apportionment basis so as to
reflect the effective yield on the debt security.
e) Expenses
All expenses are accounted for on an accruals basis.
a Expenses which are incidental to the disposal of an investment
are deducted from the disposal proceeds of the investment.
a Expenses relating to investment management are allocated in
part to capital reserve in accordance with the BoardOs expected
long-term split of returns, in the form of capital value and income
respectively, from the entire investment portfolio. The proportion
of fees allocated to capital is 85% (2011: 85%)
f) Taxation Investment income is shown excluding the related tax
credit. The company has not provided deferred taxation on any
capital gains and losses arising on the revaluation or disposal of
investments due to the companyOs status as an Investment Trust
Company.
g) Foreign currency Transactions denominated in foreign
currencies are recorded in the local currency at actual exchange
rates as at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies at the year end are
reported at the rates of exchange prevailing at the year end. Any
gain or loss arising from a change in exchange rates subsequent to
the date of the transaction is included as an exchange gain or loss
in the income statement.
h) Capital reserves
Capital reserve D realised
The following are transferred to this reserve:
a Gains and losses on the realisation of investments
a Realised exchange differences of a capital nature
a A proportion of the expenses relating to investment management as set out above
a Distributions received deemed to be capital in nature
a Increases and decreases in the valuation of investments held
on an active market at the year end.
Capital reserve D unrealised
The following are transferred to this reserve:
a Increases and decreases in the valuation of investments held
outside an active market at the year end.
a Unrealised exchange differences of a capital nature.
i) Financial instruments
Financial liabilities
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into.
A financial liability exists where there is a contractual
obligation to deliver cash or another financial asset to another
entity, or to exchange financial assets or liabilities under
potentially unfavourable conditions. Shares containing such
obligations would be classified as financial liabilities. An equity
instrument is any contract that evidences a residual interest in
the assets of the entity after deducting all of its financial
liabilities. Dividends and distributions relating to equity
instruments are debited direct to equity.
Financial liabilities are obligations to pay cash or other
financial assets and are recognised when the company becomes a
party to the contractual provisions of the instrument. All
financial liabilities are recorded initially at fair value, net of
direct issue costs. Subsequently they are accounted for at
amortised cost via the effective interest rate method.
Financial assets
Financial assets are divided into the following categories:
loans and receivables and financial assets at fair value through
profit or loss. Financial assets are assigned to the different
categories by management on initial recognition, depending on the
purpose for which they were acquired. The designation of financial
assets is re-evaluated at every reporting date at which a choice of
classification or accounting treatment is available.
All financial assets are recognised when the company becomes a
party to the contractual provisions of the instrument. Financial
assets other than those categorised as at fair value through profit
or loss are recognised at fair value plus transaction costs.
Financial assets categorised as at fair value through profit or
loss are recognised initially at fair value with transaction costs
expensed through the income statement.
Financial assets at fair value through profit or loss represent
investments designated by the entity as at fair value through
profit or loss upon initial recognition. Subsequent to initial
recognition, the financial assets included in this category are
measured at fair value with changes in fair value recognised in the
income statement. Financial assets originally designated as
financial assets at fair value through profit or loss may not be
reclassified subsequently.
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. Debtors and cash are classified as loans and receivables.
Loans and receivables are measured subsequent to initial
recognition at amortised cost using the effective interest method.
Any change in their value through impairment or reversal of
impairment is recognised in the income statement.
An assessment for impairment is undertaken at least at each
balance sheet date.
2. Income
2012 2011
Income from investments GBPO000 GBPO000
Franked investment income 1,065 967
--------- ---------
Overseas dividends 94 39
--------- ---------
1,159 1,006
--------- ---------
Other income:
--------- ---------
Unfranked investment income and
bank interest 43 44
--------- ---------
Total income 1,202 1,050
--------- ---------
Total income comprises:
--------- ---------
Dividends 1,159 1,006
--------- ---------
Interest 43 44
--------- ---------
1,202 1,050
--------- ---------
Income from investments:
--------- ---------
Listed UK 1,060 962
--------- ---------
Listed overseas 94 39
--------- ---------
Unlisted 5 5
--------- ---------
1,159 1006
--------- ---------
3. Expenses
2012 2011
GBPO000 GBPO000
Secretarial and other services 87 77
--------- ---------
DirectorsO remuneration (see note
4) 56 53
--------- ---------
Investment management fees 195 190
--------- ---------
Investment managerOs administration
fee 30 30
--------- ---------
Other professional fees 47 68
--------- ---------
Foreign exchange losses 12 15
--------- ---------
AuditorsO remuneration (net of
VAT) for
--------- ---------
D audit 31 30
--------- ---------
D other services persuant to such
legislation 3 4
--------- ---------
D taxation 5 1
--------- ---------
466 468
--------- ---------
4. DirectorsO remuneration
The remuneration of the highest paid director amounted to
GBP17,250 (2011: GBP13,950). Further details are set out above and
details of related party transactions are provided in note 18.
Social security costs amounted to GBP3,410 (2011: GBP3,676). During
the year there were no employees.
5. Taxation on ordinary activities
2012 2011
RevenueGBPO000 Capital Total Revenue Capital Total
GBPO000 GBPO000 GBPO000 GBPO000 GBPO000
Current taxation D D D D D D
---------------- --------- --------- --------- --------- ---------
The tax assessed for the period is higher (2011: lower) than the
standard rate of corporation tax in the UK of 21% (2011: 21%). The
differences are explained as follows:
2012 2011
GBPO000 GBPO000
Return on ordinary activities before tax (465) 4,674
--------- ---------
Return on ordinary activities multiplied
by standard rate of corporation tax in the
UK of 21% (98) 982
--------- ---------
Effect of:
--------- ---------
Capital transactions 292 (820)
--------- ---------
Franked investment income being exempt from
taxation (224) (172)
--------- ---------
Tax relief on expenses allocated to capital (40) (39)
--------- ---------
Non-recognition of tax losses 70 49
--------- ---------
Current tax charge for the year D D
--------- ---------
At 29th February 2012 the Company had a potential deferred tax
asset of GBP382,000 (2011: GBP298,000) in respect of taxable losses
which are available to be carried forward and offset against future
taxable profits. A deferred tax asset has not been provided on
these losses as it is considered unlikely that the Company will
make suitable taxable revenue profits in excess of deductible
expenses in future periods. The potential deferred tax asset has
been calculated using a corporation tax rate of 21% (2011:
21%).
6. Dividends
2012 Total 2011 Total
Revenue GBPO000 Revenue GBPO000
GBPO000 GBPO000
Dividends on equity shares paid in the year:
--------- --------- --------- ---------
D ordinary D interim 2012 dividend of 3.9p per share (2011: 3.90p) 391 391 391 391
--------- --------- --------- ---------
D ordinary D final 2011 dividend of 6.30p per share (2010: 6.20p) 631 631 621 621
--------- --------- --------- ---------
1,022 1,022 1,012 1,012
--------- --------- --------- ---------
Dividends paid and proposed in the year:
--------- --------- --------- ---------
Interim D paid in the year (3.9p, 2011: 3.9p) 391 391 391 391
--------- --------- --------- ---------
Final D proposed (6.5p, 2011: 6.3p) 651 651 631 631
--------- --------- --------- ---------
1,042 1,042 1,022 1,022
--------- --------- --------- ---------
7. Return per ordinary share
Basic revenue return per ordinary share is based on the revenue
return on ordinary activities after taxation, and on 10,023,750
(2011: 10,023,750) ordinary shares. Basic capital return per
ordinary share is based on capital return on ordinary activities
after taxation, and on 10,023,750 (2011: 10,023,750) ordinary
shares. Basic total return per ordinary share is based on the sum
of revenue return and capital return as defined above, and on
10,023,750 (2011: 10,023,750) ordinary shares. Diluted returns
equate to basic returns as there are no share options or other
potentially dilutive ordinary shares.
8. Investments
2012 2011
GBPO000 GBPO000
Investments listed on a recognised
investment exchange 31,260 32,935
--------- ---------
Unlisted investments 79 77
--------- ---------
31,339 33,012
--------- ---------
UK Fixed Listed Listed
Interest Equities Equities
Securities D UK D Overseas Unlisted Total
GBPO000 GBPO000 GBPO000 GBPO000 GBPO000
Opening book
cost 511 23,454 3,346 2 27,313
------------ ---------- ------------ ---------- ---------
Opening fair
value adjustment 62 5,318 244 75 5,699
------------ ---------- ------------ ---------- ---------
Opening valuation 573 28,772 3,590 77 33,012
------------ ---------- ------------ ---------- ---------
Movements in
the year:
------------ ---------- ------------ ---------- ---------
Purchases at
cost _ 12,154 3,077 D 15,231
------------ ---------- ------------ ---------- ---------
Sales:
------------ ---------- ------------ ---------- ---------
D proceeds _ (14,363) (1,308) D (15,671)
------------ ---------- ------------ ---------- ---------
D realised losses
on sales D (546) (259) D (805)
------------ ---------- ------------ ---------- ---------
Increase / (decrease)
in fair value (77) (780) 427 2 (428)
------------ ---------- ------------ ---------- ---------
Closing valuation 496 25,237 5,527 79 31,339
------------ ---------- ------------ ---------- ---------
Closing book
cost 511 22,405 5,054 2 27,972
------------ ---------- ------------ ---------- ---------
Closing fair
value adjustment (15) 2,832 473 77 3,367
------------ ---------- ------------ ---------- ---------
Closing valuation 496 25,237 5,527 79 31,339
------------ ---------- ------------ ---------- ---------
2012 2011
GBPO000 GBPO000
Realised (losses)/gains on sale
of investments (805) 2,327
--------- ---------
Capital distributions received 32 84
--------- ---------
(Decrease) / increase in fair
value (428) 1,681
--------- ---------
Investment Holding (loss)/gain (1,201) 4,092
--------- ---------
9. Debtors
2012 2011
GBPO000 GBPO000
Dividends due 90 57
--------- ---------
10. Creditors: amounts falling due within one year
2012 2011
GBPO000 GBPO000
Accruals 30 30
--------- ---------
Other creditors, including taxation
and social security 26 26
--------- ---------
56 56
--------- ---------
11. Financial instruments
The holding of investments involves certain inherent risks.
Events may occur that would result in either a reduction in the
companyOs net assets or a reduction of revenue returns. Set out
below are the principal risks inherent to the companyOs activities
and the actions taken to manage those risks. The major risk arising
from the companyOs financial instruments is market price risk. The
Board reviews and agrees policies for reviewing these risks and
these are summarised below.
The carrying value of the CompanyOs investments, debtors, cash
at bank and current liabilities is considered to be a fair
approximation of their fair value.
The Company had no defaults during the period in respect of
borrowings.
Financial risk management
(i) Market risk analysis Market price risk arises mainly from
uncertainty about the future prices of the financial instruments
used in the companyOs business. It represents the potential loss
the company might suffer through holding market positions in the
face of price movements and movements in exchange rates. The risk
is monitored by the Board on a monthly basis and on a daily basis
by the Investment Manager, in accordance with the investment policy
set out above. A full list of the companyOs investments is shown
below. 97% of the companyOs net assets are invested in quoted
equities. The net result for the year and shareholdersO funds are
sensitive to a reasonably possible change in quoted equity
valuations of +10% and D10%. The net result for the year and
shareholdersO funds would increase or decrease by GBP3,126,000
(2011: GBP3,293,000) as a result of the above movements.
(ii) Credit risk analysis The CompanyOs management considers
that all the above financial assets are not impaired for each of
the reporting dates under review and are of good credit quality and
no amounts are past due. The CompanyOs financial assets are not
secured by collateral or other credit enhancements.
(iii) Currency risk The company is exposed to translation
foreign exchange risk as noted above under market risk. At the year
end overseas investments amounted to GBP5,527,000, 18% of the
investment holding. The net result for the year and shareholdersO
funds are sensitive to a reasonably possible change in exchange
rates of +5% and D5%. The net result for the year and shareholdersO
funds would increase or decrease by GBP276,000 (2011: GBP179,000)
as a result of the above movements.
(iv) Interest rate risk The company reviews the location and
duration of its bank deposits to reduce the impact of interest rate
fluctuations.
(v) Credit risk The main credit risk arises from investment
transactions with the companysO investment manager. Such
transactions are normally settled within three days.
(vi) Liquidity risk analysis The Company seeks to manage
financial risk, to ensure sufficient liquidity is available to meet
foreseeable needs and to invest cash assets safely and
profitability. Liquidity is ensured by the accumulation of
investment income and controls over the timing of investment
purchase and sales.
The Company manages its liquidity needs by carefully monitoring
the investment markets and disinvesting where necessary. Liquidity
needs are monitored in various time bands, on a day to day and week
to week basis, as well as on the basis of a rolling 30 day
projection. Long-term liquidity needs for a 180 day and a 360 day
lookout period are identified monthly.
The Company maintains cash to meet its liquidity requirements
for up to 30 day periods. Funding in regards to long term liquidity
needs is additionally secured by realising investments. At the year
end the Company was exposed to liquidity risk of GBP56,000 (2011;
GBP56,000), in respect of non-derivative financial liabilities. All
of these amounts are due within 30 days of the year end.
The Company holds bank deposits with a limited number of
financial institutions.
The carrying amount of the companyOs financial assets and
liabilities as recognised at the balance sheet date may also be
categorized as follows: as follows:
Financial
assets
Loans at fair
Assets at and value Total
29th February 2012 receivables through GBPO000
GBPO000 profit
or loss
GBPO000
Investments D 31,339 31,339
------------- ---------- ---------
Debtors 90 D 90
------------- ---------- ---------
Cash at bank and in
hand 915 D 915
------------- ---------- ---------
1,005 31,339 32,344
------------- ---------- ---------
Financial
assets
Loans at fair
Assets at and value Total
28th February 2011 receivables through GBPO000
GBPO000 profit
or loss
GBPO000
------------- ---------- ---------
Investments D 33,012 33,012
------------- ---------- ---------
Debtors 57 D 57
------------- ---------- ---------
Cash at bank and in
hand 762 D 762
------------- ---------- ---------
819 33,012 33,831
------------- ---------- ---------
Financial liabilities are classified as other financial
liabilities carried at amortised cost. At 29th February 2012, the
CompanyOs liabilities have contractual maturities which are
summarised below:
Current Current
within 6 within 6
months months
2012 2011
GBPO000 GBPO000
Accruals and other creditors 56 56
---------- ----------
The above contractual maturities reflect the gross undiscounted
cash flows, which are equivalent to the carrying values of the
liabilities at the balance sheet date.
The following information presents financial assets measured at
fair value in the balance sheet in accordance with the fair value
hierarchy. The hierarchy groups financial assets and liabilities
into three levels based on the significance of the inputs used in
measuring the fair value of the financial asset or liability. The
fair value hierarchy has the following levels:
Level 1 - quoted prices (unadjusted) in active markets for
identifiable assets or liabilities
Level 2 - inputs other than quoted prices included in level 1
that are observable for the asset or liability, either directly or
indirectly; and
Level 3 - inputs for the asset or liability that are not based
on observable market data (unobservable inputs)
The level within which the financial asset is classified is
determined based on the lowest level of significant input to the
fair value measurement.
The financial assets measured at fair value in the balance sheet
are classified as Level 1 Equity Investments and Fixed Interest
Investments. Level 3 investments are not material. A full analysis
of the investment portfolio is shown below.
Significant accounting policies Details of the significant
accounting policies and methods adopted, including the criteria for
recognition, the basis of measurement and the basis on which income
and expenses are recognised, in respect of each class of financial
asset, financial liability and equity instrument are disclosed in
the accounting policies. The financial assets and liabilities
measured at fair value in the balance sheet are grouped into the
fair value hierarchy as follows:
12. Reserves
Capital Capital
reserve reserve Revenue
D realised D unrealised reserve
GBPO000 GBPO000 GBPO000
At beginning of year 30,170 75 1,525
------------ -------------- ---------
Net loss on realisation (805) D D
of investments
------------ -------------- ---------
Expenses allocated to (191) D D
capital reserve
------------ -------------- ---------
Capital distributions 32 D D
received
------------ -------------- ---------
(Decrease) / increase
in fair value (430) 2 D
------------ -------------- ---------
Net revenue for the
year after tax D D 927
------------ -------------- ---------
Dividends paid in the
year D D (1,022)
------------ -------------- ---------
At end of year 28,776 77 1,430
------------ -------------- ---------
The balance on the revenue reserve represents the companyOs
distributable reserves. The directors have proposed a final
dividend for the year of GBP651,000.
13. Called-up share capital
2012 2011
GBPO000 GBPO000
Allotted, called-up and fully-paid:
10,023,750 ordinary shares of 20p
each 2,005 2,005
--------- ---------
Dividends D The ordinary shares carry a right to receive
dividends. Interim dividends are determined by the Directors,
whereas the proposed final dividend is subject to shareholder
approval.
Capital entitlement D On winding up, after meeting the
liabilities of the Company, the surplus assets will be paid to
ordinary shareholders in proportion to their shareholdings.
Voting D on a show of hands, every ordinary shareholder present
in person or by proxy has one vote and on a poll every ordinary
shareholder present in person has one vote for every share he/she
holds and a proxy has one vote for every share in respect of which
he/she is appointed.
14. Net asset value per share
The net asset value per share and the net asset values
attributable to each class of share at the year end calculated in
accordance with the Articles of Association were as follows:
Net asset value
per share attributable Net asset value
attributable
2012 2011 2012 2011
GBPO000 GBPO000
------------ ------------ --------- ---------
Ordinary shares
(basic) 322.11p 336.95p 32,288 33,775
------------ ------------ --------- ---------
Basic net asset value per ordinary share is based on net assets
and on 10,023,750 (2011: 10,023,750) ordinary shares.
15. Analysis of changes in net funds during the year
2012 2011
GBPO000 GBPO000
Beginning of year 762 451
--------- ---------
Net cash inflow 153 311
--------- ---------
End of year 915 762
--------- ---------
Analysis of balances:
--------- ---------
Cash at bank and in hand 915 762
--------- ---------
16. Reconciliation of net total return on ordinary activities
before taxation to net cash inflow from operating activities
2012 2011
GBPO000 GBPO000
Net total return on ordinary activities
before taxation (465) 4,674
--------- ---------
Less: Realised (losses)/profits
on sale of investments 805 (2,327)
--------- ---------
Less: Fair value movements 428 (1,681)
--------- ---------
(Increase)/ decrease in debtors (33) 5
--------- ---------
Increase in other creditors and
accruals - 4
--------- ---------
735 675
--------- ---------
17. Contingent liabilities
The company did not have any contingent liabilities at 29th
February 2012 or 28th February 2011.
18. Related party transactions
The directors have delegated day-to-day investment decisions to
Rathbone Investment Management Limited (RIM). The appointment is
for an indefinite period, subject to six monthsO notice by either
party. RIM also provide administration services for the company. A
management fee is payable of 0.7% per annum on the first GBP33m of
the total value of investments and cash held within the portfolio
and 0.5% thereafter, as well as a commission of GBP10 charged on
acquisitions and disposals of investments. RIM is a wholly-owned
subsidiary of Rathbone Bros plc, a listed FTSE 250 company,
specialising in investment management for companies, private
clients, trusts and pensions. Rathbone is regulated by the FSA and
more details can be found on its website www.rathbones.com.
A proportion (85%: 2011: 85%) of Investment management fees are
transferred to the capital reserve.
Fees of GBP224,943 (2011: GBP219,845) were payable to RIM during
the year and are made up as follow:
2012 2011
GBPO000 GBPO000
Investment management fees 195 190
--------- ---------
Administration fees 30 30
--------- ---------
225 220
--------- ---------
19. Capital management policies and procedures
The companyOs capital management objectives are:
a To ensure the companyOs ability to continue as a going concern
a To provide an adequate return to shareholders by investing in
an appropriate portfolio of listed entities
The companyOs equity base is largely fixed and therefore capital
is sourced through retained earnings and investment disposals.
Capital is considered to be the CompanyOs ordinary share capital as
per note 13.
Analysis of Investment based on valuation as shown on the
balance sheet
Holding Market Value
29th February
2012
UK Fixed Interest
---------- ---------------------- -----------------
6.024% Variable
Nationwide Building 6/2/perp - call
Society 700,000 2013 496,094
---------- ---------------------- -----------------
Resources
---------- ---------------------- -----------------
Mining
---------- ---------------------- -----------------
US $0.54 Ordinary
Anglo American plc 29,700 shares 786,753
---------- ---------------------- -----------------
Patagonia Gold plc 1,115,000 1p Ordinary shares 426,488
---------- ---------------------- -----------------
Rio Tinto plc 22,600 10p Ordinary shares 809,871
---------- ---------------------- -----------------
Oil & Gas
---------- ---------------------- -----------------
BG Group plc 81,000 10p Ordinary shares 1,230,287
---------- ---------------------- -----------------
BP plc 180,000 US$0.25 shares 886,230
---------- ---------------------- -----------------
Royal Dutch Shell
plc 59,400 U0.07 B shares 1,383,426
---------- ---------------------- -----------------
1.3668639p Ordinary
Cairn Energy plc 49,242 shares 169,442
---------- ---------------------- -----------------
US $0.10 Ordinary
Bayfield Energy plc 450,000 shares 281,250
---------- ---------------------- -----------------
Oil Equipment Services
& Distribution
---------- ---------------------- -----------------
Afren plc 523,146 1p Ordinary shares 699,446
---------- ---------------------- -----------------
Amec plc 82,200 50p Ordinary shares 908,310
---------- ---------------------- -----------------
Basic Industries
---------- ---------------------- -----------------
Electronic and Electrical
Equipment
---------- ---------------------- -----------------
US $0.10 Ordinary
AZ Electronic 115,000 shares 325,335
---------- ---------------------- -----------------
Non-cyclical Consumer
Goods
---------- ---------------------- -----------------
Tobacco
---------- ---------------------- -----------------
British American Tobacco
plc 32,400 25p Ordinary shares 1,029,186
---------- ---------------------- -----------------
Travel and Leisure
---------- ---------------------- -----------------
7.375p Ordinary
Marstons plc 658,000 shares 643,853
---------- ---------------------- -----------------
Media
---------- ---------------------- -----------------
Pearson plc 70,600 25p Ordinary shares 845,788
---------- ---------------------- -----------------
WPP plc 144,450 10p Ordinary shares 1,159,934
---------- ---------------------- -----------------
Avanti Communications
Group plc 82,800 1p Ordinary shares 208,863
---------- ---------------------- -----------------
Software & Computer
Services
---------- ---------------------- -----------------
Blinkx plc 315,000 1p Ordinary shares 249,683
---------- ---------------------- -----------------
Sage Group 172,500 1p Ordinary shares 535,613
---------- ---------------------- -----------------
0.2p Ordinary
Telecity Group plc 122,000 shares 840,580
---------- ---------------------- -----------------
Playtech Ltd 149,000 NPV Ordinary shares 454,078
---------- ---------------------- -----------------
Non-cyclical Services
---------- ---------------------- -----------------
Food and Drink
---------- ---------------------- -----------------
28 101/108p Ordinary
Diageo plc 50,100 shares 753,003
---------- ---------------------- -----------------
Morrison (WM) Supermarkets
plc 212,000 10p Ordinary shares 614,588
---------- ---------------------- -----------------
Mobile Telecommunication
Services
---------- ---------------------- -----------------
US$ 0.114 Ordinary
Vodafone Group plc 720,000 shares 1,218,960
---------- ---------------------- -----------------
Healthcare Equipment
and Services
---------- ---------------------- -----------------
Advanced Medical Solutions
Group plc 733,924 5p Ordinary shares 677,045
---------- ---------------------- -----------------
Support Services
---------- ---------------------- -----------------
Carillion plc 147,600 50p Ordinary shares 479,552
---------- ---------------------- -----------------
Interserve plc 200,000 10p Ordinary shares 610,000
---------- ---------------------- -----------------
Pharmaceutical & Biotechnology
---------- ---------------------- -----------------
Glaxosmithkline plc 71,650 25p Ordinary shares 993,427
---------- ---------------------- -----------------
Utilities
---------- ---------------------- -----------------
Electricity
---------- ---------------------- -----------------
6 14/81p Ordinary
Centrica plc 317,400 shares 964,579
---------- ---------------------- -----------------
Financials
---------- ---------------------- -----------------
Banks
---------- ---------------------- -----------------
US$0.50 Ordinary
HSBC Holdings plc 100,000 shares 555,200
---------- ---------------------- -----------------
Barclays plc 260,700 25p Ordinary shares 638,585
---------- ---------------------- -----------------
Subtotal
21,875,404
---------- ---------------------- -----------------
Market Value
Holding 29th February
2012
---------- ---------------------- -----------------
Financials (continued)
---------- ---------------------- -----------------
Banks (continued)
---------- ---------------------- -----------------
Lloyds Banking Group
plc 600,000 10p Ordinary shares 209,580
---------- ---------------------- -----------------
Insurance
---------- ---------------------- -----------------
Prudential plc 125,700 5p Ordinary shares 894,984
---------- ---------------------- -----------------
Aviva plc 206,000 25p Ordinary shares 758,492
---------- ---------------------- -----------------
Real Estate
---------- ---------------------- -----------------
Newriver Retail Ltd 166,655 1p Ordinary shares 352,059
---------- ---------------------- -----------------
London & Stamford
Property Ltd 513,500 10p Ordinary shares 585,904
---------- ---------------------- -----------------
Shaftesbury plc 41,335 25p Ordinary shares 202,500
---------- ---------------------- -----------------
Speciality & other
finance
---------- ---------------------- -----------------
US$ 0.0343 Ordinary
Man Group plc 488,750 shares 639,285
---------- ---------------------- -----------------
Private Equity Stocks
---------- ---------------------- -----------------
73 19/22p Ordinary
3I Group plc 113,250 shares 214,496
---------- ---------------------- -----------------
Unclassified Investments
---------- ---------------------- -----------------
15% GBP1 Preference
Tennants Consolidated 6,528 shares 10,445
---------- ---------------------- -----------------
25p A Ordinary
Tennants Consolidated 8,219 shares 35,177
---------- ---------------------- -----------------
Tenna-nts Consolidated 7,468 25p Ordinary shares 33,606
---------- ---------------------- -----------------
Total UK Investments 25,811,932
---------- ---------------------- -----------------
European Investments
---------- ---------------------- -----------------
Eni Spa 44,000 Eur 1 shares 637,797
---------- ---------------------- -----------------
Siemens AG 9,330 NPV shares (regd) 587,143
---------- ---------------------- -----------------
ABB Ltd 53,500 CHF2.02 (regd) 688,524
---------- ---------------------- -----------------
North American Investments
---------- ---------------------- -----------------
Apple Inc 2,300 NPV Common Stock 781,002
---------- ---------------------- -----------------
US $0.01 Common
Monsanto Co 10,410 Stock 504,257
---------- ---------------------- -----------------
Spon ADR Each
Ensco plc 12,900 Rep 1 CIs A Ordinary 470,794
---------- ---------------------- -----------------
Microsoft Corp 39,800 NPV Common Stock 790,793
---------- ---------------------- -----------------
Asia Pacific Investments
---------- ---------------------- -----------------
Keppel Corp 114,000 NPV Shares 632,395
---------- ---------------------- -----------------
Smartone Telecom Holdings
plc 325,000 HK $0.10 shares 434,405
---------- ---------------------- -----------------
Total 31,339,042
---------- ---------------------- -----------------
10 year historical record
Year ended Issued Net Assets Net Asset Net Revenue Revenue Dividends
28th February Capital Available Value Return Per Share
for Ordinary Per Share Per Share
Capital
GBP GBP p GBP p p
---------- -------------- ----------- ------------ ----------- -----------
2003 2,004,750 20,062,000 200.15 847,000 8.45 7.50
---------- -------------- ----------- ------------ ----------- -----------
2004 2,004,750 24,340,000 242.82 599,000 5.98 7.75
---------- -------------- ----------- ------------ ----------- -----------
960,000
2005 2,004,750 28,083,000 280.16 (A) 9.58 8.15
---------- -------------- ----------- ------------ ----------- -----------
2006 2,004,750 34,166,000 340.85 906,000 9.04 8.45
---------- -------------- ----------- ------------ ----------- -----------
2007 2,004,750 39,367,000 392.75 981,000 9.79 9.20
---------- -------------- ----------- ------------ ----------- -----------
2008 2,004,750 36,290,000 362.04 1,141,000 11.4 9.75
---------- -------------- ----------- ------------ ----------- -----------
2009 2,004,750 23,905,000 238.48 1,169,000 11.7 10.00
---------- -------------- ----------- ------------ ----------- -----------
2010 2,004,750 30,113,000 300.42 910,000 9.08 10.10
---------- -------------- ----------- ------------ ----------- -----------
2011 2,004,750 33,775,000 336.95 769,000 7.67 10.20
---------- -------------- ----------- ------------ ----------- -----------
2012 2,004,750 32,288,000 322.11 927,000 9.25 10.40
---------- -------------- ----------- ------------ ----------- -----------
(A) Enhanced by special dividends amounting to GBP176,000
The figures for 2005 only have been amended to reflect the prior
year adjustment in respect of the provision for dividends
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR AMMFTMBMJBBT
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