TIDMAAEV 
 

Albion Enterprise VCT PLC

LEI number: 213800OVSRDHRJBMO720

As required by the Financial Conduct Authority's Disclosure Guidance and Transparency Rules 4.1 and 6.3, Albion Enterprise VCT PLC today makes public its information relating to the Annual Report and Financial Statements for the year ended 31 March 2021.

This announcement was approved for release by the Board of Directors on 28 June 2021.

This announcement has not been audited.

The Annual Report and Financial Statements for the year ended 31 March 2021 (which have been audited), will shortly be sent to shareholders. Copies of the full Annual Report and Financial Statements will be shown via the Albion Capital Group LLP website by clicking www.albion.capital/funds/AAEV/31Mar2021.pdf.

Investment policy

Albion Enterprise VCT PLC (the "Company") is a Venture Capital Trust and the investment objective of the Company is to provide investors with a regular source of income, combined with the prospect of longer term capital growth.

The Company will invest in a broad portfolio of higher growth businesses across a variety of sectors of the UK economy including higher risk technology companies. Allocation of assets will be determined by the investment opportunities which become available but efforts will be made to ensure that the portfolio is diversified both in terms of sector and stage of maturity of company.

VCT qualifying and non-VCT qualifying investments

Application of the investment policy is designed to ensure that the Company continues to qualify and is approved as a VCT by HM Revenue and Customs ("VCT regulations"). The maximum amount invested in any one company is limited to relevant HMRC annual investment limits. It is intended that normally at least 80 per cent. of the Company's funds will be invested in VCT qualifying investments. The VCT regulations also have an impact on the type of investments and qualifying sectors in which the Company can make investment.

Funds held prior to investing in VCT qualifying assets or for liquidity purposes will be held as cash on deposit, invested in floating rate notes or similar instruments with banks or other financial institutions with high credit ratings or invested in liquid open-ended equity funds providing income and capital equity exposure (where it is considered economic to do so). Investment in such open-ended equity funds will not exceed 10 per cent. of the Company's assets at the time of investment.

Risk diversification and maximum exposures

Risk is spread by investing in a number of different businesses within Venture Capital Trust qualifying industry sectors using a mixture of securities. The maximum amount which the Company will invest in a single company is 15 per cent. of the Company's assets at cost, thus ensuring a spread of investment risk. The value of an individual investment may increase over time as a result of trading progress and it is possible that it may grow in value to a point where is represents a significantly higher proportion of total assets prior to a realisation opportunity being available.

Gearing

The Company's maximum exposure in relation to gearing is restricted to 10 per cent. of its adjusted share capital and reserves.

Financial calendar

 
 
Record date for first dividend                                   6 August 2021 
Payment date for first dividend                                 31 August 2021 
Annual General Meeting                                  Noon on 11 August 2021 
Announcement of Half-yearly results for the six months           November 2021 
 ending 30 September 2021 
 
 

Financial highlights

 
13.50p   Total return per share for the year ended 31 March 
          2021 
         --------------------------------------------------- 
 
12.67%   Shareholder return for the year ended 31 March 2021 
         --------------------------------------------------- 
 
 5.44p   Total tax-free dividend per share paid during the 
          year ended 31 March 2021 
         --------------------------------------------------- 
 
114.60p  Net asset value per share on 31 March 2021 
         --------------------------------------------------- 
 
170.89p  Total shareholder value to 31 March 2021 
         --------------------------------------------------- 
 

These are considered APMs, see notes 2 and 3 in the Strategic report below for further explanation.

 
                                31 March 2021 (pence per      31 March 2020 
                                         share)              (pence per share) 
Opening net asset value                             106.54              117.76 
 
Capital return/(loss)                                13.96              (6.31) 
Revenue (loss)/return                               (0.51)                0.61 
                              ----------------------------  ------------------ 
Total return/(loss)                                  13.45              (5.70) 
Dividends paid                                      (5.44)              (6.00) 
Impact from share capital 
 movements                                            0.05                0.48 
                              ----------------------------  ------------------ 
Net asset value                                     114.60              106.54 
 
 
 
Total dividends paid to 31 March 2021       56.29 
Net asset value on 31 March 2021           114.60 
                                           ------ 
Total shareholder value to 31 March 2021   170.89 
-----------------------------------------  ------ 
 

A more detailed breakdown of the dividends paid per year can be found at www.albion.capital/funds/AAEV under the 'Dividend History' section.

In addition to the dividends summarised above, the Board has declared a first dividend for the year ending 31 March 2022, of 2.87 pence per Ordinary share to be paid on 31 August 2021 to shareholders on the register on 6 August 2021.

Chairman's statement

Introduction

We are pleased to report a positive total return for the year of 13.45 pence per share, despite the Covid-19 pandemic being extremely challenging for so many businesses. This represents a 12.6% gain on opening net asset value. Last year's results were reported in the early days of the pandemic and, as such, were negatively impacted by the uncertainty of the time. One year later and, although there is still uncertainty, we have seen not only resilience but in many cases growth from our portfolio, with many of our companies continuing to provide products and services that are considered innovative and essential to their customers.

Results and dividends

On 31 March 2021 the net asset value was 114.60 pence per share compared to 106.54 pence per share on 31 March 2020. The total return before taxation was GBP9.2 million compared to a loss of GBP3.7 million for the previous year. The positive progress of a number of our portfolio companies is discussed later in this statement and in the Strategic report below. These excellent results for the year have resulted in a performance incentive fee payable to the Manager of GBP288,000. More detail on the calculation of this fee can be found in the Strategic report below.

In line with our variable dividend policy targeting around 5% of NAV per annum the Company paid dividends totalling 5.44 pence per share during the year to 31 March 2021 (2020: 6.00 pence per share). The Company will pay a first dividend for the financial year to 31 March 2022 of 2.87 pence per share on 31 August 2021 to shareholders on the register on 6 August 2021, being 2.5% of the latest reported NAV.

Investment performance and progress

There have been several disposals during the year with proceeds of GBP5.3 million (2020: GBP15.5 million). The sale of OmPrompt Holdings in March resulted in a return of 2.3 times cost, and generated proceeds of GBP2.3 million. The sale of G.Network Communications in December delivered a strong headline total return of 3.8 times cost, although the terms of the sale will see the majority of the proceeds being received in three years' time. Portfolio companies Clear Review and SBD Automotive were also sold in the year, generating 2.1 times cost in both instances. Further details on these sales can be found in the table on page 25 of the full Annual Report and Financial Statements.

As announced in the Half-yearly results to 30 September 2020, the Company disposed of its investment in the SVS Albion OLIM UK Equity Income Fund ("OUEIF") incurring a loss of GBP0.9m, which followed a period of poor performance. The fund was particularly impacted by the Covid-19 driven falls in UK quoted equities and the negative outlook for the UK Equity Income sector. The Board intends to redeploy the proceeds into innovative unquoted growth companies where the Company is seeing resilient growth.

Several of our portfolio companies have performed extremely well despite the pandemic, and this has contributed to the valuation uplift in the year. Quantexa, has been revalued after a further externally led funding round, this contributed GBP2.5 million to the net valuation gains of GBP10.9 million in the year. Proveca continues to trade well both within the UK and the EU and, together with Egress Software Technologies, has contributed GBP3.5 million to this uplift. Inevitably some of our portfolio companies continue to be impacted by the pandemic, with Mirada Medical being written down by GBP2.7 million this year due to sales to hospitals being delayed by the pandemic.

The Company has been an active investor during the year with more than GBP7.3 million invested in new and existing companies. The Company has invested GBP2.7 million in five new portfolio companies, all of which are targeted to require further investment as the companies prove themselves and grow:

   --    GBP1.4 million into Threadneedle Software Holdings (trading as Solidatus), a provider of data lineage software to enterprise customers in regulated sectors, which allows them to rapidly discover, visualise, catalogue and understand how data flows through their systems; 
   --    GBP0.6 million into The Voucher Market (trading as WeGift), a cloud platform that enables corporates to purchase digital gift cards and to distribute them to employees and customers; 
   --    GBP0.4 million into Seldon Technologies, a software company that enables enterprises to deploy Machine Learning models in production; 
   --    GBP0.2 million into TransFICC, a provider of a connectivity solution, connecting financial institutions with trading venues via a single API; and 
   --    GBP0.1 million into uMedeor (trading as uMed), a software platform that enables life science organisations to use patient data, in a compliant way, to recruit participants for clinical trials. 

A further GBP4.6 million was invested into 13 existing portfolio companies, of which the largest were: GBP1.4 million into Quantexa as part of a larger externally led funding round to support the growth of its analytics platform which helps detect and protect against financial crime; GBP0.9 million into Healios to continue providing psychological care to children and adolescents using a family centric approach; and GBP0.7 million into Black Swan Data, to support the restructure of its business to focus primarily on predictive analytics for consumer brands. A review of business and future prospects is included in the Strategic report below.

Portfolio update announcement

As mentioned in the RNS announcement on 21 June 2021, I am pleased to report that two companies within the portfolio are undergoing external fundraising processes, which result in an uplift to the net asset value. These are non-adjusting post balance sheet events for the purposes of this audited Annual Report and Financial Statements. When quantifying the effect at the date of this Report, this results in an increase of 7.81 pence per share (6.8%) to the audited 31 March 2021 net asset value of 114.60p per share.

A further update will be made in due course, if required, otherwise further information will be included in the Interim Management Statement for the period to 30 June 2021, at which point the entire portfolio will have been revalued to take account of recent events. This is expected to be announced in August 2021.

Risks and uncertainties

The wide reaching implications of the Covid-19 crisis continues to be the key risk facing the Company, including its impact on the UK and Global economies. There may still also be further implications following the UK's departure from the European Union which may adversely affect our underlying portfolio companies. The Manager is continually assessing the exposure to such risks for each portfolio company and, where possible, appropriate mitigating actions are being taken.

A detailed analysis of the other risks and uncertainties facing the business is shown in the Strategic report below.

Board composition

Lord St John of Bletso retired from the Board on 30 November 2020. He acted as Chairman of our Audit Committee and as Senior Independent Director. The Dowager Lady Balfour of Burleigh wishes to retire from the Board and will not seek re-election at the Annual General Meeting. We will miss their very positive contributions to our deliberations and wish them both well in the future.

Rhodri Whitlock joined the Board on 19 January 2021 and assumed the role of chairman of our Audit Committee. Following The Dowager Lady Balfour of Burleigh's retirement, Christopher Burrows will assume the role of Senior Independent Director.

In order to provide the Board with more capacity for succession planning, a resolution is being proposed at the forthcoming Annual General Meeting ("AGM") to increase the cap on Directors remuneration from GBP100,000 to GBP125,000 per annum. There is no intention of increasing Directors' fees in the near term, but the new level proposed under the Articles of Association provides extra flexibility in the case, for example, of an additional Board member being appointed prior to the retirement of an existing Director.

Share buy-backs

It remains the Board's policy to buy back shares in the market, subject to the overall constraint that such purchases are in the Company's interest. This includes the maintenance of sufficient cash resources for investment in new and existing portfolio companies and the continued payment of dividends to shareholders.

It is the Board's intention that such buy-backs should be at around a 5% discount to net asset value, in so far as market conditions and liquidity permit. The Board continues to review the use of buy-backs and is satisfied that it is an important means of providing market liquidity for shareholders.

Albion VCTs Top Up Offers

Your Board, in conjunction with the boards of other VCTs managed by Albion Capital Group LLP, launched a prospectus top up offer of new Ordinary shares on 5 January 2021. The Board announced on 21 January 2021 that, following strong demand, it would utilise the over-allotment facility, bringing the total to be raised to GBP9 million. The Offer was fully subscribed and closed to further applications on 5 February 2021.

The proceeds raised by the Company pursuant to the offer will be added to the liquid resources available for investment, positioning the Company to take advantage of investment opportunities over the next two to three years. Details on the share allotments during and after the financial year end can be found in notes 15 and 19 respectively.

Annual General Meeting

The Board has been considering the current rules around the Covid-19 pandemic on the arrangements for our forthcoming Annual General Meeting ("AGM"). These arrangements may be subject to change, and we will keep shareholders up to date on our Manager's website at www.albion.capital/vct-hub/agms-events.

We are required by law to hold an AGM within six months of our financial year end. The Board considered last year's live streamed AGM to have been a success and therefore, in the interests of continued caution and the ongoing uncertainty from the continued delay to the roadmap of lockdown lifting, the Board has decided to repeat that format this year. The AGM will be held at noon on 11 August 2021, at the registered office, being 1 Benjamin Street, London, EC1M 5QL. Shareholders will be able to attend the event via the free platform, Hopin.

Full details of the business to be conducted at the Annual General Meeting are given in the Notice of the Meeting on pages 69 to 72 and in the Directors' report on pages 34 and 35 of the full Annual Report and Financial Statements.

It will not be possible to allow shareholders entry into the building where the AGM is held, due to the ongoing uncertainty around large indoor meetings. The Directors will attend in person to ensure a quorum and allow the continuation of this AGM. There will also be a representative of Albion Capital Group LLP as Company Secretary.

At least two weeks prior to the AGM registration details will be sent to all shareholders who have an email address registered with Computershare. Shareholders who do not have an email address registered with Computershare should get in touch with marketing@albion.capital https://www.globenewswire.com/Tracker?data=hVbxRQAIEUsDZP6T21acsvESxxo16v0FR1IG2niDNEv5jADbvJmmscmC_m51frYDfqQO5rEBAn8gav_IS_LRBTErZZrkTXM1S0mPKyuOJg0= for information about the AGM. To encourage shareholder engagement, the AGM will include a presentation from the Manager, the formal business of the AGM and answering questions we receive from shareholders.

Shareholders can submit their questions to the Board in advance of the AGM up until noon on 10 August 2021 by emailing AAEVchair@albion.capital. https://www.globenewswire.com/Tracker?data=WAsQgElsehbnpbXwMy_r27lXEq3ms35RCf2moOGQNcqk8Ogawuf_j-K7Fio0hKOYHoMSt70on_X2wbO1oUt2CKXRZRxRR4UciKkI6u5v6Bycdg_9a1i0QNnobGhaOXCA Alternatively there is a facility on the Hopin platform to submit questions whilst attending the event. The Chairman will cover as many questions as possible in the time allocated. Following the AGM, a summary of responses will be published on the Managers website at www.albion.capital/funds/AAEV.

Shareholders' views are important, and the Board encourages shareholders to vote on the resolutions using the proxy form enclosed with this Annual Report and Financial Statements, or electronically at www.investorcentre.co.uk/eproxy. The Board has carefully considered the business to be approved at the Annual General Meeting and recommends shareholders to vote in favour of all the resolutions being proposed.

Outlook and prospect

These positive results, including the non-adjusting post balance sheet events referred to above, demonstrate the resilience of our portfolio which is both diversified and targeted at sectors such as software and healthcare which have proved resilient during the Covid-19 pandemic. Although there is still much uncertainty around the longer term impact of the pandemic, I am confident that our portfolio companies are well positioned to grow, providing products and services critical to their customers, and therefore well placed to continue to deliver long term value to our shareholders.

Maxwell Packe

Chairman

28 June 2021

Strategic report

Investment policy

The Company will invest in a broad portfolio of higher growth businesses across a variety of sectors of the UK economy including higher risk technology companies. Allocation of assets will be determined by the investment opportunities which become available but efforts will be made to ensure that the portfolio is diversified both in terms of sector and stage of maturity of company.

The full investment policy can be found above.

Current portfolio sector allocation

The pie charts at the end of this announcement show the split of the portfolio valuation on 31 March 2021 by: sector; stage of investment; and number of employees. This is a useful way of assessing how the Company and its portfolio is diversified across sector, portfolio companies' maturity measured by revenues and their size measured by the number of people employed. As the Company continues to invest in software and other technology companies, FinTech (which is technology specifically applicable to financial services companies) becomes a more prominent investment, and therefore is included as a subsector below. Details of the principal investments made by the Company are shown in the Portfolio of investments on pages 24 and 25 of the full Annual Report and Financial Statements.

Direction of portfolio

Due to the share allotment on 26 February 2021 under the 2020/21 Prospectus Top Up Offer, cash is a significant proportion of the portfolio at 29%. These funds will be invested predominantly into higher growth technology companies, and therefore the shift away from asset based companies will continue. The Company has a significant speciality in FinTech investing, which can be seen as a growing part of the portfolio, represented by a 6% increase this year. Healthcare technology is another area of particular strength, which has increased by 2% over the last year.

Results and dividend policy

 
                                                       GBP'000 
 
Net capital return for the year ended 31 March 2021      9,578 
Net revenue loss for the year ended 31 March 2021        (349) 
Total return for the year ended 31 March 2021            9,229 
Dividend of 2.70 pence per share paid on 28 August 
 2020                                                  (1,836) 
Dividend of 2.74 pence per share paid on 26 February 
 2021                                                  (1,854) 
Reclaimed dividends                                          2 
                                                       ------- 
Transferred to reserves                                  5,541 
                                                       ------- 
 
Net assets on 31 March 2021                             85,398 
                                                       ======= 
 
Net asset value on 31 March 2021 (pence per share)      114.60 
=====================================================  ======= 
 

The Company paid dividends totalling 5.44 pence per share during the year ended 31 March 2021 (2020: 6.00 pence per share). The Board has declared a first dividend for the year ending 31 March 2022, of 2.87 pence per Ordinary share to be paid on 31 August 2021 to shareholders on the register on 6 August 2021.

As shown in the Company's Income statement below, the total return for the year was 13.45 pence per share (2020: loss of 5.70 pence per share). Investment income decreased to GBP543,000 (2020: GBP1,157,000), which is a significant decrease on last year, mainly due to reduced distributions from the SVS Albion OLIM UK Equity Income Fund which was sold during the year, as well as the repayment of the G.Network Communications accrued interest in the previous year.

The capital return on investments for the year of GBP10,892,000 (2020: loss of GBP2,884,000) has been explained in the Chairman's statement above. This has led to a significant increase in net asset value to 114.60 pence per share (2020: 106.54 pence per share), which can be seen on the Balance sheet below. This increase in net asset value is after taking account of the payment of 5.44 pence per share of dividends during the year.

There was a net cash inflow for the Company of GBP2,919,000 for the year (2020: net inflow of GBP17,069,000), which has arisen from both the disposal of fixed and current asset investments and the issue of Ordinary shares under the Albion VCTs Top Up Offers, reduced by the investment in fixed asset investments, dividends paid, operating activities and the buy back of shares.

Review of business and future changes

A detailed review of the Company's business during the year is contained in the Chairman's statement above. Total gains on investments for the year were GBP10.9 million (2020: loss of GBP2.9 million).

There is a continuing focus on growing the FinTech, healthcare and other software and technology sectors. The majority of these investment returns are delivered through equity and capital gains, and we therefore expect our investment income to continue to be similar to the current level, as most of this is derived from the existing renewable energy portion of our portfolio.

Details of significant events which have occurred since the end of the financial year are listed in note 19. Details of transactions with the Manager are shown in note 5.

Future prospects

The Company's portfolio remains well balanced across sectors and risk classes, and has weathered the pandemic so far. Although there remains much uncertainty, the Manager has a strong pipeline of investment opportunities in which the Company's cash can be deployed. The Board considers that the pipeline will continue to enable the Company to maintain a predictable stream of dividend payments to shareholders, and ultimately continue to deliver long term growth.

Key performance indicators ("KPIs") and Alternative Performance Measures ("APMs")

The Directors believe that the following KPIs and APMs, which are typical for Venture Capital Trusts, used in its own assessment of the Company, will provide shareholders with sufficient information to assess how effectively the Company is applying its investment policy to meet its objectives. The Directors are satisfied that the results shown in the following KPIs and APMs give a good indication that the Company is achieving its investment objective and policy. These are:

   1.   Total shareholder value relative to FTSE All Share Index total return 

The graph on page 4 of the full Annual Report and Financial Statements shows the Company's total shareholder value relative to the FTSE All-Share Index total return, with dividends reinvested. The FTSE All-Share index is considered a reasonable benchmark as the Company is classed as a generalist UK VCT investor, and this index includes over 600 companies listed in the UK, including small-cap, covering a range of sectors. Details on the performance of the net asset value and return per share for the year are shown in the Chairman's statement.

   2.    Net asset value per share and total shareholder value 

Total shareholder value increased by 13.50 pence per share to 170.89 pence per share for the year ended 31 March 2021 (return of 12.67% on opening net asset value).

   3.   Shareholder return in the year 
 
2012  2013   2014  2015  2016  2017   2018   2019    2020   2021 
----  -----  ----  ----  ----  -----  -----  -----  ------  ----- 
0.9%  13.5%  9.7%  4.5%  5.4%  10.8%  12.4%  13.1%  (4.4)%  12.7% 
----  -----  ----  ----  ----  -----  -----  -----  ------  ----- 
 

Source: Albion Capital Group LLP

Methodology: Shareholder return is calculated by the movement in total shareholder value for the year divided by the opening net asset value.

   4.   Dividend distributions 

Dividends paid in respect of the year ended 31 March 2021 were 5.44 pence per share (2020: 6.00 pence per share), a yield of 5.1% on opening net asset value. The cumulative dividends paid since inception total 56.29 pence per share.

   5.   Ongoing charges 

The ongoing charges ratio for the year ended 31 March 2021 was 2.5% (2020: 2.7%). The ongoing charges ratio has been calculated using The Association of Investment Companies' (AIC) recommended methodology. This figure shows shareholders the total recurring annual running expenses (including investment management fees charged to capital reserve) as a percentage of the average net assets attributable to shareholders. The ongoing charges cap is 2.5%, which has resulted in a saving of GBP53,000 to shareholders during the year (2020: GBP24,000).

   6.   VCT compliance* 

The investment policy is designed to ensure that the Company continues to qualify and is approved as a VCT by HMRC. In order to maintain its status under Venture Capital Trust legislation, a VCT must comply on a continuing basis with the provisions of Section 274 of the Income Tax Act 2007, details of which are provided in the Directors' report on page 32 of the full Annual Report and Financial Statements.

The relevant tests to measure compliance have been carried out and independently reviewed for the year ended 31 March 2021. These showed that the Company has complied with all tests and continues to do so.

*VCT compliance is not a numerical measure of performance and thus cannot be defined as an APM.

Gearing

As defined by the Articles of Association, the Company's maximum exposure in relation to gearing is restricted to 10% of its adjusted share capital and reserves. The Directors do not currently have any intention to utilise gearing for the Company.

Operational arrangements

The Company has delegated the investment management of the portfolio to Albion Capital Group LLP, which is authorised and regulated by the Financial Conduct Authority. Albion Capital Group LLP also provides company secretarial and other accounting and administrative support to the Company.

Management agreement

Under the Management agreement, the Manager provides investment management, secretarial and administrative services to the Company. The Management agreement can be terminated by either party on 12 months' notice. The Management agreement is subject to earlier termination in the event of certain breaches or on the insolvency of either party. The Manager is paid an annual fee equal to 2% of the net asset value of the Company paid quarterly in arrears, along with an administration fee of 0.2% of the net asset value.

Additionally, for the period that the Company held the investment in the SVS Albion OLIM UK Equity Income Fund ("OUEIF"), Albion Capital Group LLP reduced the proportion of its management fee relating to the investment in the OUEIF by 0.75%, which represented the OUEIF management fee charged by OLIM, to avoid any double charging for the investment exposure.

Total annual expenses, including the management fee, are limited to 2.5% of the net asset value, since 1 October 2019.

The Manager is also entitled to an arrangement fee, payable by each portfolio company, of approximately 2% on each investment made and also monitoring fees where the Manager has a representative on the portfolio company's board.

Further details on the management fee can be found in note 5.

Management performance incentive fee

In order to align the interests of the Manager and the shareholders with regards to generating positive returns, the Company has a Management performance incentive arrangement with the Manager. Under the incentive arrangement, the Company will pay an incentive fee to the Manager of an amount equal to 20% of such excess return that is calculated for each financial year.

The performance fee hurdle requires that the growth of the aggregate of the net asset value per share and dividends paid by the Company compared with the previous accounting date exceeds the higher of the average base rate of the Royal Bank of Scotland plus 2% or RPI plus 2%. The hurdle is calculated every year, based on the starting rate of 100 pence per share in 2007.

For the year ended 31 March 2021, the total return of the Company since launch (the performance incentive fee start date) amounted to 170.89 pence per share, compared to the higher hurdle of 168.79 pence per share. As a result, a performance incentive fee of GBP288,000 is payable to the Manager (2020: GBPnil).

Evaluation of the Manager

The Board has evaluated the performance of the Manager based on:

   --        the returns generated by the Company; 
   --        the continuing achievement of the 80% qualifying holdings investment requirement for VCT status; 
   --        the long term prospects of the current portfolio of investments; 
   --        the management of treasury, including use of buy-backs and participation in fund raising; 
   --        a review of the Management agreement and the services provided therein; and 
   --        benchmarking the performance of the Manager to other service providers including the performance of other VCTs that the Manager is responsible for managing. 

The Board believes that it is in the interests of shareholders as a whole, and of the Company, to continue the appointment of the Manager for the forthcoming year.

Alternative Investment Fund Managers Directive ("AIFMD")

The Board appointed Albion Capital Group LLP as the Company's AIFM in 2014 as required by the AIFMD. The Manager is a full-scope Alternative Investment Fund Manager under the AIFMD. Ocorian Depositary (UK) Limited is the appointed Depositary and oversees the custody and cash arrangements and provides other AIFMD duties with respect to the Company.

Companies Act 2006 Section 172 Reporting

Under Section 172 of the Companies Act 2006, the Board has a duty to promote the success of the Company for the benefit of its members as a whole in both the long and short term, having regard to the interests of other stakeholders in the Company, such as suppliers, and to do so with an understanding of the impact on the community and environment and with high standards of business conduct, which includes acting fairly between members of the Company.

The Board is very conscious of these wider responsibilities in the ways it promotes the Company's culture and ensures, as part of its regular oversight, that the integrity of the Company's affairs is foremost in the way the activities are managed and promoted. This includes regular engagement with the wider stakeholders of the Company and being alert to issues that might damage the Company's standing in the way that it operates. The Board works very closely with the Manager in reviewing how stakeholder issues are handled, ensuring good governance and responsibility in managing the Company's affairs, as well as visibility and openness in how the affairs are conducted.

The Company is an externally managed investment company with no employees, and as such has nothing to report in relation to employee engagement but does keep close attention to how the Board operates as a cohesive and competent unit. The Company also has no customers in the traditional sense and, therefore, there is also nothing to report in relation to relationships with customers.

The table below sets out the stakeholders the Board considers most relevant, details how the Board has engaged with these key stakeholders and the effect of these considerations on the Company's decisions and strategies during the year.

 
Stakeholders  Engagement with Stakeholders                                   Decision outcomes based on engagement 
------------  -------------------------------------------------------------  ----------------------------------------------------------- 
Shareholders  The key methods of engaging with Shareholders are              --    Shareholders' views are important and the Board 
               as follows:                                                         encourages Shareholders to exercise their right to 
               --    Annual General Meeting ("AGM")                                vote on the resolutions at the AGM. The Company's AGM 
                                                                                   is typically used as an opportunity to communicate 
               --    Shareholder seminar                                           with investors, including through a presentation made 
                                                                                   by the investment management team. However, due to 
               --    Annual report, Half-yearly financial report, and              the impact of Covid-19 last year, there were special 
                     Interim management statements                                 circumstances for last year's AGM, which will 
                                                                                   continue on into this year. A live stream of the AGM 
               --    RNS announcements for all key decisions including             was held last year, and the Board were able to take 
                     appointment of a new Director, and the publication of         questions from Shareholders. This enabled maximum 
                     a Prospectus                                                  shareholder engagement in the absence of a 
                                                                                   face-to-face event. 
               --    Website redesigned in the year to make it more user     --    Shareholders are also encouraged to attend the annual 
                     accessible                                                    Shareholders' Seminar. The seminar includes some of 
                                                                                   the portfolio companies sharing insights into their 
                                                                                   businesses and also presentations from Albion 
                                                                                   executives on some of the key factors affecting the 
                                                                                   investment outlook, as well as a review of the past 
                                                                                   year and the plans for the year ahead. 
                                                                                   Representatives of the Board attend the seminar. The 
                                                                                   Board considers this an important interactive event, 
                                                                                   and therefore in 2020, although Covid-19 restrictions 
                                                                                   did not allow for face-to-face meetings, this was 
                                                                                   also held as a live stream event. 
                                                                             --    Shareholders receive either a hard or soft copy of 
                                                                                   the Annual report, and the Half-yearly financial 
                                                                                   report, depending on their preference. These reports 
                                                                                   are also available on the website, and announcement 
                                                                                   is made on the London Stock Exchange. The Company 
                                                                                   also provides voluntary Interim management statements 
                                                                                   to keep Shareholders up to date quarterly. 
                                                                             --    During the year, there was a net asset value 
                                                                                   announcement outside of the normal quarterly 
                                                                                   reporting cycle, as the Board realised the importance 
                                                                                   of information sharing during the period of 
                                                                                   uncertainty caused by the pandemic. 
                                                                             --    The share buy-back policy is an important means of 
                                                                                   providing market liquidity for Shareholders, and has 
                                                                                   been offered throughout the year. The Board monitors 
                                                                                   closely the discount to the net asset value to ensure 
                                                                                   this is in the region of 5%. 
                                                                             --    The Board seeks to create value for Shareholders by 
                                                                                   generating strong and sustainable returns to provide 
                                                                                   shareholders with regular dividends and the prospect 
                                                                                   of capital growth. During the year, the new dividend 
                                                                                   policy has been enacted, and has resulted in a 
                                                                                   dividend yield of 5.11% on opening net asset value. 
                                                                             --    During the year, the decision to publish a Prospectus 
                                                                                   was taken, in order to raise more funds for 
                                                                                   deployment into new and existing portfolio companies. 
                                                                                   The Board carefully considered whether further funds 
                                                                                   were required, and whether the VCT tests would 
                                                                                   continue to be met before agreeing to publish the 
                                                                                   Prospectus. On allotment, the decision was made to 
                                                                                   use different issue prices to ensure there was no 
                                                                                   dilution to existing Shareholders, whilst also 
                                                                                   ensuring new Shareholders were investing at a fair 
                                                                                   price. 
                                                                             --    Cash management and liquidity of the Company are key 
                                                                                   quarterly discussions amongst the Board, with focus 
                                                                                   on deployment of cash for future investments, 
                                                                                   dividends and share buy-backs. 
                                                                             --    Shareholders can contact the Chairman using the email 
                                                                                   AAEVchair@albion.capital. 
------------  -------------------------------------------------------------  ----------------------------------------------------------- 
Suppliers     The key suppliers with regular engagement from the 
               Manager are:                                                   --    The Manager is in regular contact with the suppliers 
               --    Corporate broker                                               and the contractual arrangements with all the 
                                                                                    principal suppliers to the Company are reviewed 
               --    VCT taxation advisor                                           regularly and formally once a year, alongside the 
                                                                                    performance of the suppliers in acquitting their 
               --    Depositary                                                     responsibilities. 
 
               --    Registrar                                                --    The Board reviews the performance of the providers 
                                                                                    annually in line with the Manager. 
               --    Auditor 
 
               --    Lawyer 
------------  -------------------------------------------------------------  ----------------------------------------------------------- 
Manager       The performance of Albion Capital Group LLP is essential       --    The Manager meets with the Board at least quarterly 
               to the long term success of the Company, including                  to discuss the performance of the Company, and is in 
               achieving the investment policy and generating returns              regular contact in between these meetings, e.g. to 
               to shareholders, as well as the impact the Company                  share investment papers for new and follow on 
               has on Environment, Social and Governance practice.                 investments. All strategic decisions are discussed in 
                                                                                   detail and minuted, with an open dialogue between the 
                                                                                   Board and the Manager. 
                                                                             --    The performance of the Manager in managing the 
                                                                                   portfolio and in providing company secretarial, 
                                                                                   administration and accounting services is reviewed in 
                                                                                   detail each year, which includes reviewing comparator 
                                                                                   engagement terms and portfolio performance. Further 
                                                                                   details on the evaluation of the Manager, and the 
                                                                                   decision to continue the appointment of the Manager 
                                                                                   for the forthcoming year, can be found in this 
                                                                                   report. 
                                                                             --    Details of the Manager's responsibilities can be 
                                                                                   found in the Statement of corporate governance on 
                                                                                   pages 37 to 41 of the full Annual Report and 
                                                                                   Financial Statements. 
------------  -------------------------------------------------------------  ----------------------------------------------------------- 
Portfolio     The portfolio companies are considered key stakeholders,       --    The Board aims to have a diversified portfolio in 
companies      not least because they are principal drivers of value               terms of sector and stage of investment. Further 
               for the Company. However, as discussed in the Environmental,        details of this can be found in the pie charts at the 
               Social and Governance ("ESG") section below, the portfolio          end of this announcement. 
               companies' impact on their stakeholders is also important     --    In most cases, an Albion executive has a place on the 
               to the Company.                                                     board of a portfolio company, in order to help with 
                                                                                   both business operation decisions, as well as good 
                                                                                   ESG practice. 
                                                                             --    The Manager ensures good dialogue with portfolio 
                                                                                   companies, and often puts on events in order to help 
                                                                                   portfolio companies benefit from the Albion network. 
------------  -------------------------------------------------------------  ----------------------------------------------------------- 
Community     The Company, with no employees, has no effect itself           --    The Board receives reports on ESG factors within its 
and            on the community and environment. However, as discussed             portfolio from the Manager as it is a signatory of 
environment    above, the portfolio companies' ESG impact is extremely             the UN Principles for Responsible Investment ("UN 
               important to the Board.                                             PRI"). Further details of this are set out in the ESG 
                                                                                   section below. ESG, without its specific definition, 
                                                                                   has always been at the heart of the responsible 
                                                                                   investing that the Company engages in and in how the 
                                                                                   Company conducts itself with all of its stakeholders. 
------------  -------------------------------------------------------------  ----------------------------------------------------------- 
 

Environmental, Social, and Governance ("ESG")

The Company's Manager, Albion Capital Group LLP, takes the concept of sustainable and responsible investment very seriously for existing investments and in reviewing new investment opportunities. In turn, the Board is kept appraised of ESG issues in connection with both the portfolio and in how Company affairs are conducted more generally as a regular part of Board oversight.

Albion Capital Group LLP is a signatory of the UN PRI. The UN PRI is the world's leading proponent of responsible investment, working to understand the investment implications of ESG factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions.

The Board and Manager have exercised conscious principles in making responsible investments throughout the life of the Company, not least in providing finance for promising companies in a variety of important sectors such as technology, healthcare and renewable energy. In making the investments, the Manager is directly involved in the oversight and governance of these investments, including ensuring standards of reporting and visibility on business practices, all of which are reported to the Board of the Company. By its nature, not least in making qualifying investments which fulfil the criteria set by HMRC, the Company has focused on sustainable and longer-term investment propositions, some of which will fail (in the nature of all small companies), but some of which will grow and serve important societal demands. One of the most important drivers of performance is the quality of the investment portfolio, which goes beyond the individual valuations and examines the prospects of each of the portfolio companies, as well as the sectors in which they operate -- all requiring a longer- term view.

In the nature of venture capital investment, Albion Capital Group LLP is more intimately involved in the affairs of portfolio companies than might be the case for funds invested in listed securities. As such, Albion Capital Group LLP is in a position to influence good governance and behaviour in the portfolio companies, many of which are relatively small companies without the support of a larger company's administration and advisory infrastructure.

The Company adheres to the principles of the AIC Code of Corporate Governance and is also aware of other governance and corporate conduct guidance which it meets as far as practical, including in the constitution of a diversified and independent Board capable of providing constructive challenge.

The Company's portfolio is currently invested in healthcare, renewable energy, education, FinTech, software and other technology (which includes cyber security and data protection), with the most significant percentage of the Company's portfolio invested in sectors and companies which would be seen by many measures to be both sustainable and socially aware on the services they render.

Albion Capital Group LLP incorporates ESG considerations into its investment decisions. These form part of its process to create value for investors and develop sustainable long-term strategies for portfolio companies. Albion Capital Group LLP reports ESG criteria to UN PRI annually and to the Board quarterly.

ESG principles are integrated at the pre-investment, investment and exit stages. This is reflected in transparency of reporting, governance principles adopted by the Company and the portfolio companies, and increasingly in the positive environmental or socially impactful nature of investments made. Albion Capital Group LLP, where relevant, considers climate-specific issues in its investment policies and activities. However, as the majority of the Company's portfolio consists of small (2-250 full time employees), private, typically software companies with limited environmental impact, climate change is not considered to be a significant risk, and actions are proportionate to that risk.

Pre-investment stage

An exclusion list is used to rule out investments in unsustainable areas, or in areas which might be perceived as socially detrimental. ESG due diligence is performed on each potential portfolio company to identify any sustainability risks associated with the investment. Identified sustainability risks are ranked from low to high and are reported to the relevant investment committee. The investment committee considers each potential investment. If sustainability risks are identified, mitigations are assessed and, if necessary, mitigation plans are put in place. If this is not deemed sufficient, the committee would consider the appropriate level and structure of funding to balance the associated risks. If this is not possible, investment committee approval will not be provided, and the investment will not proceed.

Investment stage

All new and existing portfolio companies are asked to report against an ESG Balanced Score Card annually. The ESG Balanced Score Card contains a number of sustainability factors against which a portfolio company will be assessed in order to determine the potential sustainability risks and opportunities arising from the investment. The score cards form part of the Manager's internal review meetings alongside discussions around other risk factors, and any outstanding issues are addressed in collaboration with the portfolio companies' senior management.

Exit stage

Albion Capital Group LLP aims to ensure that good ESG practices remain in place following exit. For example, by ensuring that the portfolio company creates a self-sustaining ESG management system during our period of ownership, wherever feasible.

Social and community issues, employees and human rights

The Board recognises the requirement under section 414C of the Act to detail information about social and community issues, employees and human rights; including any policies it has in relation to these matters and effectiveness of these policies. As an externally managed investment company with no employees, the Company has no formal policies in these matters, however, it is at the core of its responsible investment strategy as detailed above.

Further policies

The Company has adopted a number of further policies relating to:

   -- Environment 
 
   -- Global greenhouse gas emissions 
 
   -- Anti-bribery 
 
   -- Anti-facilitation of tax evasion 
 
   -- Diversity 

and these are set out in the Directors' report on page 33 of the full Annual Report and Financial Statements.

General Data Protection Regulation

The General Data Protection Regulation has the objective of unifying data privacy requirements across the European Union, and continues to apply in the United Kingdom after Brexit. The Manager continues to take action to ensure that the Manager and the Company are compliant with the regulation.

Risk management

The Board carries out a regular review of the risk environment in which the Company operates, together with changes to the environment and individual risks. The Board also identifies emerging risks which might impact on the Company. In the period the most noticeable risk has been the global pandemic which has impacted not only public health and mobility but also has had an adverse impact on the economy, the full impact of which is likely to be uncertain for some time.

The Directors have carried out a robust assessment of the Company's principal risks and uncertainties, and explain how they are being mitigated as follows. They are satisfied that there has not been a material change in the Company's exposure against each of the identified risks below.

 
Risk          Possible consequence                                         Risk management 
------------  -----------------------------------------------------------  ------------------------------------------------------------- 
Investment,   The risk of investment in poor quality businesses,           To reduce this risk, the Board places reliance upon 
performance    which could reduce the returns to shareholders and           the skills and expertise of the Manager and its track 
and            could negatively impact on the Company's current and         record over many years of making successful investments 
valuation      future valuations.                                           in this segment of the market. In addition, the Manager 
risk           By nature, smaller unquoted businesses, such as those        operates a formal and structured investment appraisal 
               that qualify for Venture Capital Trust purposes, are         and review process, which includes an Investment Committee, 
               more volatile than larger, long established businesses.      comprising investment professionals from the Manager 
               The Company's investment valuation methodology is            for all investments, and at least one external investment 
               reliant on the accuracy and completeness of information      professional for investments greater than GBP1 million 
               that is issued by portfolio companies. In particular,        in aggregate across all the Albion managed VCTs. The 
               the Directors may not be aware of or take into account       Manager also invites and takes account of comments 
               certain events or circumstances which occur after            from non-executive Directors of the Company on matters 
               the information issued by such companies is reported.        discussed at the Investment Committee meetings. Investments 
                                                                            are actively and regularly monitored by the Manager 
                                                                            (investment managers normally sit on portfolio company 
                                                                            boards), including the level of diversification in 
                                                                            the portfolio, and the Board receives detailed reports 
                                                                            on each investment as part of the Manager's report 
                                                                            at quarterly board meetings. The Board and Manager 
                                                                            regularly review the deployment of investments and 
                                                                            cash resources available to the Company in assessing 
                                                                            liquidity required for servicing the Company's buy-backs, 
                                                                            dividend payments and operational expenses. The decision 
                                                                            to issue a Prospectus for the 2020/21 Top-Up was due 
                                                                            to careful analysis of these factors. 
                                                                            The unquoted investments held by the Company are designated 
                                                                            at fair value through profit or loss and valued in 
                                                                            accordance with the International Private Equity and 
                                                                            Venture Capital Valuation Guidelines updated in 2018. 
                                                                            These guidelines set out recommendations, intended 
                                                                            to represent current best practice on the valuation 
                                                                            of venture capital investments. The valuation takes 
                                                                            into account all known material facts up to the date 
                                                                            of approval of the Financial Statements by the Board. 
------------  -----------------------------------------------------------  ------------------------------------------------------------- 
VCT approval  The Company must comply with section 274 of the Income       To reduce this risk, the Board has appointed the Manager, 
risk           Tax Act 2007 which enables its investors to take advantage   which has a team with significant experience in Venture 
               of tax relief on their investment and on future returns.     Capital Trust management, used to operating within 
               Breach of any of the rules enabling the Company to           the requirements of the Venture Capital Trust legislation. 
               hold VCT status could result in the loss of that status.     In addition, to provide further formal reassurance, 
                                                                            the Board has appointed Philip Hare & Associates LLP 
                                                                            as its taxation adviser, who report quarterly to the 
                                                                            Board to independently confirm compliance with the 
                                                                            Venture Capital Trust legislation, to highlight areas 
                                                                            of risk and to inform on changes in legislation. Each 
                                                                            investment in a new portfolio company is also pre-cleared 
                                                                            with our professional advisers or H.M. Revenue & Customs. 
                                                                            The Company monitors closely the extent of qualifying 
                                                                            holdings and addresses this as required. 
------------  -----------------------------------------------------------  ------------------------------------------------------------- 
Regulatory    The Company is listed on The London Stock Exchange           Board members and the Manager have experience of operating 
and            and is required to comply with the rules of the Financial    at senior levels within or advising quoted companies. 
compliance     Conduct Authority, as well as with the Companies Act,        In addition, the Board and the Manager receive regular 
risk           Accounting Standards and other legislation. Failure          updates on new regulation from its auditor, lawyers 
               to comply with these regulations could result in a           and other professional bodies. The Company is subject 
               delisting of the Company's shares, or other penalties        to compliance checks through the Manager's compliance 
               under the Companies Act or from financial reporting          officer, and any issues arising from compliance or 
               oversight bodies.                                            regulation are reported to its own board every two 
                                                                            months. These controls are also reviewed as part of 
                                                                            the quarterly Board meetings, and also as part of 
                                                                            the review work undertaken by the Manager's compliance 
                                                                            officer. The report on controls is also evaluated 
                                                                            by the internal auditors. 
------------  -----------------------------------------------------------  ------------------------------------------------------------- 
Operational   The Company relies on a number of third parties, in          The Company and its operations are subject to a series 
and internal   particular the Manager, for the provision of investment      of rigorous internal controls and review procedures 
control        management and administrative functions. Failures            exercised throughout the year and receives reports 
risk           in key systems and controls within the Manager's business    from the Manager on its internal controls and risk 
               could put assets of the Company at risk or result            management, including on matters relating to cyber 
               in reduced or inaccurate information being passed            security. 
               to the Board or to shareholders.                             The Audit Committee reviews the Internal Audit Reports 
                                                                            prepared by the Manager's internal auditors, PKF Littlejohn 
                                                                            LLP and has access to the internal audit partner of 
                                                                            PKF Littlejohn LLP to provide an opportunity to ask 
                                                                            specific detailed questions in order to satisfy itself 
                                                                            that the Manager has strong systems and controls in 
                                                                            place including those in relation to business continuity 
                                                                            and cyber security. 
                                                                            Ocorian Depositary (UK) Limited is the Company's Depositary, 
                                                                            appointed to oversee the custody and cash arrangements 
                                                                            and provide other AIFMD duties. The Board reviews 
                                                                            the quarterly reports prepared by Ocorian Depositary 
                                                                            (UK) Limited to ensure that Albion Capital is adhering 
                                                                            to its policies and procedures as required by the 
                                                                            AIFMD. 
                                                                            In addition, the Board annually reviews the performance 
                                                                            of its key service providers, particularly the Manager, 
                                                                            to ensure they continue to have the necessary expertise 
                                                                            and resources to deliver the Company's investment 
                                                                            objective and policy. The Manager and other service 
                                                                            providers have also demonstrated to the Board that 
                                                                            there is no undue reliance placed upon any one individual. 
------------  -----------------------------------------------------------  ------------------------------------------------------------- 
Economic,     Changes in economic conditions, including, for example,      The Company invests in a diversified portfolio of 
political      interest rates, rates of inflation, industry conditions,     companies across a number of industry sectors and 
and social     competition, political and diplomatic events, and            in addition often invests in a mixture of instruments 
risk           other factors could substantially and adversely affect       in portfolio companies and has a policy of minimising 
               the Company's prospects in a number of ways. This            any external bank borrowings within portfolio companies. 
               also includes risks of social upheaval, including            At any given time, the Company has sufficient cash 
               from infection and population re-distribution, as            resources to meet its operating requirements, including 
               well as economic risk challenges as a result of healthcare   share buy-backs and follow-on investments. 
               pandemics/infection.                                         In common with most commercial operations, exogenous 
               The political risk with the most uncertainty for the         risks over which the Company has no control are always 
               future of the UK economy, which the Company largely          a risk and the Company does what it can to address 
               operates in, is Brexit.                                      these risks where possible, not least as the nature 
               The current significant exogenous risk to the Company,       of the investments the Company makes are long term. 
               the wider population and economy, is the Covid-19            The Company largely operates within the UK, and increasingly 
               pandemic.                                                    the US, and therefore impacts from Brexit are reduced 
                                                                            as there are few cross-border transactions with Europe. 
                                                                            Since 2016, the portfolio of companies has not seen 
                                                                            any significant impacts from the uncertainty around 
                                                                            Brexit, nor since the end of the transition period 
                                                                            (1 January 2021). 
                                                                            The Board and Manager are continuously assessing the 
                                                                            resilience of the portfolio, the Company and its operations 
                                                                            and the robustness of the Company's external agents 
                                                                            during the health crisis, as well as considering longer 
                                                                            term impacts on how the Company might be positioned 
                                                                            in how it invests and operates. Ensuring liquidity 
                                                                            in the portfolio to cope with exigent and unexpected 
                                                                            pressures on the finances of the portfolio and the 
                                                                            Company is an important part of the risk mitigation 
                                                                            in these uncertain times. The portfolio is structured 
                                                                            as an all-weather portfolio with c.60 companies which 
                                                                            are diversified as discussed above. Exposure is relatively 
                                                                            small to at-risk sectors that include leisure, hospitality, 
                                                                            retail and travel. 
------------  -----------------------------------------------------------  ------------------------------------------------------------- 
Emerging      The Board meets at least four times a year to discuss        The ESG section below details the Company's work towards 
risks          current affairs and any potential emerging risks which       these risks, and highlights the importance of these, 
               could affect the Company.                                    above the statutory reporting requirements, to the 
               The key emerging risk affecting the Company is the           Company. 
               Environmental (including climate change), Social and         Whilst the Company itself has limited impact on climate 
               Governance requirements, both from a regulatory and          change, due to no employees nor greenhouse gas emissions, 
               investor preferences standpoint. There is the risk           the Board works closely with the Manager to ensure 
               of loss of funding from investors, as well as the            the Manager themselves are working towards reducing 
               risk of penalties from regulatory non-compliance.            their impact on the environment, and that the Manager 
                                                                            takes account of ESG factors, including climate change, 
                                                                            when making new investment decisions. With specific 
                                                                            respect to the Company, a key operation is increasing 
                                                                            the use of electronic communications with Shareholders, 
                                                                            where that preference has been specified. 
------------  -----------------------------------------------------------  ------------------------------------------------------------- 
Market value  The market value of Ordinary shares can fluctuate.           The Company operates a share buy-back policy, which 
of Ordinary    The market value of an Ordinary share, as well as            is designed to limit the discount at which the Ordinary 
shares         being affected by its net asset value and prospective        shares trade to around 5% to net asset value, by providing 
               net asset value, also takes into account its dividend        a purchaser through the Company in absence of market 
               yield and prevailing interest rates. As such, the            purchasers. From time to time buy-backs cannot be 
               market value of an Ordinary share may vary considerably      applied, for example when the Company is subject to 
               from its underlying net asset value. The market prices       a close period, or if it were to exhaust any buy-back 
               of shares in quoted investment companies can, therefore,     authorities. The Company's corporate broker, appointed 
               be at a discount or premium to the net asset value           during the year, helps to ensure that the discount 
               at different times, depending on supply and demand,          is appropriate. 
               market conditions, general investor sentiment and            New Ordinary shares are issued at sufficient premium 
               other factors. Accordingly, the market price of the          to net asset value to cover the costs of issue and 
               Ordinary shares may not fully reflect their underlying       to avoid asset value dilution to existing investors. 
               net asset value. 
------------  -----------------------------------------------------------  ------------------------------------------------------------- 
Reputational  The Company relies on the judgement and reputation           The Board regularly questions the Manager on its ethics, 
risk           of the Manager which is itself subject to the risk           procedures, safeguards and investment philosophy, 
               of loss.                                                     which should consequently result in the risk to reputational 
                                                                            damage being minimised. 
------------  -----------------------------------------------------------  ------------------------------------------------------------- 
 

Viability statement

In accordance with the FRC UK Corporate Governance Code published in 2018 and principle 36 of the AIC Code of Corporate Governance, the Directors have assessed the prospects of the Company over three years to 31 March 2024. The Directors believe that three years is a reasonable period in which they can assess the future of the Company to continue to operate and meet its liabilities as they fall due and is also the period used by the Board in the strategic planning process and is considered reasonable for a business of our nature and size. The three year period is considered the most appropriate given the forecasts that the Board requires from the Manager and the estimated timelines for finding, assessing and completing investments. The three year period also takes account of the potential impact of new regulations, should they be imposed, and how they may impact the Company over the longer term, and the availability of cash, but cannot take into account the full extent of the exogenous risks that are impacting on global economies at the date of these accounts.

The Directors have carried out a robust assessment of the emerging and principal risks facing the Company as explained above, including those that could threaten its business model, future performance, solvency or liquidity. The Board also considered the procedures in place to identify emerging risks and the risk management processes in place to avoid or reduce the impact of the underlying risks. The Board focused on the major factors which affect the economic, regulatory and political environment, including any potential impact from Brexit. The Board, after careful consideration, believes that Brexit will have no major impact on the going concern of the Company, primarily due to the markets our portfolio companies target, which in most cases are the UK and increasingly, the US, for our software and technology businesses. Portfolio companies targeting European markets have also shown resilience so far. The coronavirus (Covid-19) pandemic therefore remains the largest uncertainty impacting on the Company. In light of this continuing uncertainty, robust stress tested cashflows, process resilience and contingencies have been examined in trying to deal with the principal risks faced by the Company.

The Board assessed the ability of the Company to raise finance and deploy capital, as well as the existing cash resources of the Company. The portfolio is well balanced and geared towards long term growth, delivering dividends and capital growth to shareholders. In assessing the prospects of the Company, the Directors have considered the cash flow by looking at the Company's income and expenditure projections and funding pipeline over the assessment period of three years and they appear realistic.

Taking into account the processes for mitigating risks, monitoring costs, share buy-backs and issuance, the Manager's compliance with the investment objective, policies and business model and the balance of the portfolio, the Directors have concluded that there is a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the three year period to 31 March 2024.

This Strategic report of the Company for the year ended 31 March 2021 has been prepared in accordance with the requirements of section 414A of the Companies Act 2006 (the "Act"). The purpose of this report is to provide shareholders with sufficient information to enable them to assess the extent to which the Directors have performed their duty to promote the success of the Company in accordance with Section 172 of the Act.

For and on behalf of the Board

Maxwell Packe

Chairman

28 June 2021

Responsibility Statement

In preparing these financial statements for the year ended 31 March 2021, the Directors of the Company, being Maxwell Packe, The Dowager Lady Balfour of Burleigh, Christopher Burrows, Patrick Reeve, and Rhodri Whitlock confirm that to the best of their knowledge:

   -- summary financial information contained in this announcement and the full 
      Annual Report and Financial Statements for the year ended 31 March 2021 
      for the Company has been prepared in accordance with United Kingdom 
      Generally Accepted Accounting Practice (UK Accounting Standards and 
      applicable law) and give a true and fair view of the assets, liabilities, 
      financial position and profit or loss of the Company; and 
 
   -- the Chairman's statement and Strategic report include 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 it faces. 

We consider that the Annual Report and Financial Statements, taken as a whole, are fair, balanced, and understandable and provide the information necessary for shareholders to assess the Company's position, performance, business model and strategy.

A detailed "Statement of Directors' responsibilities" is contained on page 36 within the full audited Annual Report and Financial Statements.

On behalf of the Board,

Maxwell Packe

Chairman

28 June 2021

Income statement

 
                                                                          Year ended                 Year ended 
                                                                         31 March 2021              31 March 2020 
-----------------------------------------------------------  ----  ------------------------- 
                                                                   Revenue  Capital   Total   Revenue  Capital   Total 
                                                             Note  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000 
-----------------------------------------------------------  ----  -------  -------  -------  -------  -------  ------- 
Gains/(losses) on investments                                   3        -   10,892   10,892        -  (2,884)  (2,884) 
Investment income                                               4      543        -      543    1,157        -    1,157 
Investment management fee                                       5    (366)  (1,098)  (1,464)    (396)  (1,189)  (1,585) 
Performance incentive fee                                       5     (72)    (216)    (288)        -        -        - 
Other expenses                                                  6    (454)        -    (454)    (363)        -    (363) 
                                                                   -------  -------  -------  -------  -------  ------- 
 
 (Loss)/return on ordinary activities before taxation                (349)    9,578    9,229      398  (4,073)  (3,675) 
Tax on ordinary activities                                      8        -        -        -        -        -        - 
                                                                   -------  -------  -------  -------  -------  ------- 
 
 (Loss)/return and total comprehensive income attributable 
 to shareholders                                                     (349)    9,578    9,229      398  (4,073)  (3,675) 
                                                                   -------  -------  -------  -------  -------  ------- 
 
 Basic and diluted (loss)/return per share (pence)*            10   (0.51)    13.96    13.45     0.61   (6.31)   (5.70) 
                                                                   -------  -------  -------  -------  -------  ------- 
 

* adjusted for treasury shares

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

The total column of this Income statement represents the profit and loss account of the Company. The supplementary revenue and capital columns have been prepared in accordance with The Association of Investment Companies' Statement of Recommended Practice.

Balance sheet

 
                                                            31 March  31 March 
                                                              2021      2020 
                                                      Note   GBP'000   GBP'000 
----------------------------------------------------  ----  --------  -------- 
Fixed asset investments                                 11    60,615    47,859 
 
 Current assets 
Current asset investments                               13         -     3,501 
Trade and other receivables                             13     1,772       182 
Cash and cash equivalents                                     24,429    21,510 
                                                            --------  -------- 
                                                              26,201    25,193 
                                                            --------  -------- 
 
Total assets                                                  86,816    73,052 
 
 Payables: amounts falling due within one year 
Trade and other payables less than one year             14   (1,418)     (499) 
                                                            --------  -------- 
 
Total assets less current liabilities                         85,398    72,553 
                                                            --------  -------- 
 
 Equity attributable to equity holders 
Called-up share capital                                 15       852       770 
Share premium                                                 53,258    44,183 
Capital redemption reserve                                       104       104 
Unrealised capital reserve                                    17,538     8,636 
Realised capital reserve                                      14,728    14,052 
Other distributable reserve                                  (1,082)     4,808 
                                                            --------  -------- 
Total equity shareholders' funds                              85,398    72,553 
                                                            --------  -------- 
Basic and diluted net asset value per share (pence) 
 *                                                      16    114.60    106.54 
----------------------------------------------------        --------  -------- 
 

* excluding treasury shares

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

These Financial Statements were approved by the Board of Directors, and were authorised for issue on 28 June 2021 and were signed on its behalf by

Maxwell Packe

Chairman

Company number: 05990732

Statement of changes in equity

 
                                                       Called-up                                        Unrealised  Realised 
                                                         share     Share                                  capital    capital   Other distributable 
                                                        capital    premium  Capital redemption reserve    reserve    reserve*        reserve*        Total 
                                                        GBP'000    GBP'000            GBP'000             GBP'000    GBP'000         GBP'000         GBP'000 
-----------------------------------------------------  ---------  --------  --------------------------  ----------  ---------  -------------------  -------- 
On 1 April 2020                                              770    44,183                         104       8,636     14,052                4,808    72,553 
Return/(loss) and total comprehensive income for the 
 year                                                          -         -                           -       8,836        742                (349)     9,229 
Transfer of previously unrealised losses on disposal 
 of investments                                                -         -                           -          66       (66)                    -         - 
Issue of equity                                               82     9,277                           -           -          -                    -     9,359 
Cost of issue of equity                                        -     (202)                           -           -          -                    -     (202) 
Purchase of own shares for treasury                            -         -                           -           -          -              (1,853)   (1,853) 
Dividends paid                                                 -         -                           -           -          -              (3,688)   (3,688) 
 
On 31 March 2021                                             852    53,258                         104      17,538     14,728              (1,082)    85,398 
-----------------------------------------------------  ---------  --------  --------------------------  ----------  ---------  -------------------  -------- 
 
On 1 April 2019                                              650    30,255                         104      18,672      8,089                9,618    67,388 
Return/(loss) and total comprehensive income for the 
 year                                                          -         -                           -     (5,996)      1,923                  398   (3,675) 
Transfer of previously unrealised gains on disposal 
 of investments                                                -         -                           -     (4,040)      4,040                    -         - 
Issue of equity                                              120    14,270                           -           -          -                    -    14,390 
Cost of issue of equity                                        -     (342)                           -           -          -                    -     (342) 
Purchase of own shares for treasury                            -         -                           -           -          -              (1,252)   (1,252) 
Dividends paid                                                 -         -                           -           -          -              (3,956)   (3,956) 
 
On 31 March 2020                                             770    44,183                         104       8,636     14,052                4,808    72,553 
-----------------------------------------------------  ---------  --------  --------------------------  ----------  ---------  -------------------  -------- 
 

* These reserves amount to GBP13,646,000 (2020: GBP18,860,000) which is considered distributable.

Statement of cash flows

 
                                                Year ended      Year ended 
                                               31 March 2021   31 March 2020 
                                                  GBP'000         GBP'000 
-------------------------------------------   --------------  -------------- 
Cash flow from operating activities 
Investment income received                               434           1,001 
Dividend income received                                  94             310 
Deposit interest received                                 17              71 
Investment management fee paid                       (1,403)         (1,648) 
Performance incentive fee paid                             -         (1,332) 
Other cash payments                                    (465)           (307) 
Net cash flow from operating activities              (1,323)         (1,905) 
 
Cash flow from investing activities 
Purchase of current asset investments                      -         (1,194) 
Disposal of current asset investments                  3,691               - 
Purchase of fixed asset investments                  (7,324)         (5,340) 
Disposal of fixed asset investments                    3,683          16,656 
Net cash flow from investing activities                   50          10,122 
 
Cash flow from financing activities 
Issue of share capital                                 8,568          13,432 
Cost of issue of equity                                 (17)            (17) 
Dividends paid*                                      (3,094)         (3,311) 
Purchase of own shares (including costs)             (1,265)         (1,252) 
                                              --------------  -------------- 
Net cash flow from financing activities                4,192           8,852 
 
Increase in cash and cash equivalents                  2,919          17,069 
Cash and cash equivalents at start of the 
 year                                                 21,510           4,441 
                                              --------------  -------------- 
Cash and cash equivalents at end of the year          24,429          21,510 
 

* The dividends paid shown in the cash flow are different to the dividends disclosed in note 9 as a result of the non-cash effect of the Dividend Reinvestment Scheme and the timing of the unclaimed dividends.

Notes to the Financial Statements

1. Accounting convention

The Financial Statements have been prepared in accordance with applicable United Kingdom law and accounting standards, including Financial Reporting Standard 102 ("FRS 102"), 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"). The Financial Statements have been prepared on a going concern basis and further details can be found in the Directors' report on pages 31 and 32 of the full Annual Report and Financial Statements.

The preparation of the Financial Statements requires management to make judgements and estimates that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The most critical estimates and judgements relate to the determination of carrying value of investments at Fair Value Through Profit and Loss ("FVTPL") in accordance with FRS 102 sections 11 and 12. The Company values investments by following the International Private Equity and Venture Capital Valuation ("IPEV") Guidelines as updated in 2018 and further detail on the valuation techniques used are outlined in note 2 below.

Company information is shown on page 2 of the full Annual Report and Financial Statements.

2. Accounting policies

Fixed and current asset investments

The Company's business is investing in financial assets with a view to profiting from their total return in the form of income and capital growth. This portfolio of financial assets is managed and its performance evaluated on a fair value basis, in accordance with a documented investment policy, and information about the portfolio is provided internally on that basis to the Board.

In accordance with the requirements of FRS 102, those undertakings in which the Company holds more than 20% of the equity as part of an investment portfolio are not accounted for using the equity method. In these circumstances the investment is measured at FVTPL.

Upon initial recognition (using trade date accounting) investments, including loan stock, are classified by the Company as FVTPL and are included at their initial fair value, which is cost (excluding expenses incidental to the acquisition which are written off to the Income statement).

Subsequently, the investments are valued at 'fair value', which is measured as follows:

   -- Investments listed on recognised exchanges are valued at their bid prices 
      at the end of the accounting period or otherwise at fair value based on 
      published price quotations. 
 
   -- Unquoted investments, where there is not an active market, are valued 
      using an appropriate valuation technique in accordance with the IPEV 
      Guidelines. Indicators of fair value are derived using established 
      methodologies including earnings multiples, revenue multiples, the level 
      of third party offers received, cost or price of recent investment rounds, 
      net assets and industry valuation benchmarks. Where price of recent 
      investment is used as a starting point for estimating fair value at 
      subsequent measurement dates, this has been benchmarked using an 
      appropriate valuation technique permitted by the IPEV guidelines. 
 
   -- In situations where cost or price of recent investment is used, 
      consideration is given to the circumstances of the portfolio company 
      since that date in determining fair value. This includes consideration of 
      whether there is any evidence of deterioration or strong definable 
      evidence of an increase in value. In the absence of these indicators, the 
      investment in question is valued at the amount reported at the previous 
      reporting date. Examples of events or changes that could indicate a 
      diminution include: 
 
          -- the performance and/or prospects of the underlying business are 
             significantly below the expectations on which the investment was 
             based; 
 
          -- a significant adverse change either in the portfolio company's 
             business or in the technological, market, economic, legal or 
             regulatory environment in which the business operates; or 
 
          -- market conditions have deteriorated, which may be indicated by a 
             fall in the share prices of quoted businesses operating in the 
             same or related sectors. 

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.

Current assets and payables

Receivables (including debtors due after more than one year), payables and cash are carried at amortised cost, in accordance with FRS 102. Debtors due after more than one year meet the definition of a financing transaction held at amortised cost, and interest will be recognised through capital over the credit period using the effective interest method. There are no financial liabilities other than payables.

Investment income

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 when the Company's right to receive payment and expect settlement is established. Where interest is rolled up and/or payable at redemption then it is recognised as income unless there is reasonable doubt as to its receipt.

Bank interest income

Interest income is recognised on an accruals basis using the rate of interest agreed with the bank.

Investment management fee, performance incentive fee and other expenses

All expenses have been accounted for on an accruals basis. Expenses are charged through the other distributable reserve except the following which are charged through the realised capital reserve:

   -- 75% of management fees and performance incentive fees, if any, are 
      allocated to the realised capital reserve. This is in line with the 
      Board's expectation that over the long term 75% 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. 

Taxation

Taxation is applied on a current basis in accordance with FRS 102. Current tax is tax payable/(refundable) in respect of the taxable profit (tax loss) for the current period or past reporting periods using the tax rates and laws that have been enacted or substantively enacted at the financial reporting date. Taxation associated with capital expenses is applied in accordance with the SORP.

Deferred tax is provided in full on all timing differences at the reporting date. Timing differences are differences between taxable profits and total comprehensive income as stated in the Financial Statements that arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the Financial Statements. As a VCT the Company has an exemption from tax on capital gains. The Company intends to continue meeting the conditions required to obtain approval as a VCT for the foreseeable future. The Company therefore, should have no material deferred tax timing differences arising in respect of the revaluation or disposal of investments and the Company has not provided for any deferred tax.

Reserves

Called-up share capital

This reserve accounts for the nominal value of the Company's shares.

Share premium

This reserve accounts for the difference between the price paid for the Company's shares and the nominal value of those 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, or 
      permanent diminutions in value; 
 
   -- expenses, together with the related taxation effect, charged in 
      accordance with the above policies; and 
 
   -- dividends paid to equity holders where paid out by capital. 

Other distributable reserve

The special reserve, treasury share reserve and the revenue reserve were combined in 2013 to form a single reserve named other distributable reserve.

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

Dividends

Dividends by the Company are accounted for in the period in which the dividend is paid or approved at the Annual General Meeting.

Segmental reporting

The Directors are of the opinion that the Company is engaged in a single operating segment of business, being investment in smaller companies principally based in the UK.

3. Gains/(losses) on investments

 
                                                  Year ended      Year ended 
                                                 31 March 2021   31 March 2020 
                                                    GBP'000         GBP'000 
---------------------------------------------- 
Unrealised gains/(losses) on fixed asset 
 investments                                             8,836         (4,661) 
Unrealised losses on current asset investments               -         (1,335) 
Realised gains on fixed asset investments                1,866           3,112 
Realised gains on current asset investments                190               - 
                                                        10,892         (2,884) 
                                                --------------  -------------- 
 

4. Investment income

 
                          Year ended      Year ended 
                         31 March 2021   31 March 2020 
                            GBP'000         GBP'000 
Loan stock interest                434             776 
Dividend income                     94             310 
Bank deposit interest               15              71 
                                   543           1,157 
                        --------------  -------------- 
 

5. Investment management fees

 
                                                 Year ended      Year ended 
                                                31 March 2021   31 March 2020 
                                                   GBP'000         GBP'000 
Investment management fee charged to revenue              366             396 
Investment management fee charged to capital            1,098           1,189 
Performance incentive fee charged to revenue               72               - 
Performance incentive fee charged to capital              216               - 
                                               --------------  -------------- 
                                                        1,752           1,585 
                                               --------------  -------------- 
 

Further details of the Management agreement under which the investment management fee and performance incentive fee are paid is given in the Strategic report above.

During the year, services of a total value of GBP1,905,000 (2020: GBP1,659,000) were purchased by the Company from Albion Capital Group LLP; this includes GBP1,464,000 (2020: GBP1,585,000) of management fee and GBP153,000 (2020: GBP74,000) of administration fee; and a performance incentive fee of GBP288,000 (2020: GBPnil). At the financial year end, the amount due to Albion Capital Group LLP in respect of these services disclosed as accruals was GBP739,000 (2020: GBP384,000). The total annual running costs of the Company are capped at an amount equal to 2.5% of the Company's net assets, with any excess being met by Albion Capital Group LLP by way of a reduction in management fees. During the year, the management fee was reduced by GBP53,000 as a result of this cap (2020: GBP24,000).

During the year, the Company was not charged by Albion Capital Group LLP in respect of Patrick Reeve's services as a Director (2020: GBPnil).

Albion Capital Group LLP, its partners and staff hold a total of 584,126 shares in the Company on 31 March 2021.

The Manager is, from time to time, eligible to receive arrangement fees and monitoring fees from portfolio companies. During the year ended 31 March 2021, fees of GBP205,000 attributable to the investments of the Company were received pursuant to these arrangements (2020: GBP186,000).

The Company has entered into an offer agreement relating to the Offers with the Manager, Albion Capital Group LLP, pursuant to which Albion Capital will receive a fee of 2.5% of the gross proceeds of the Offers and out of which Albion Capital will pay the costs of the Offers, as detailed in the Prospectus.

The SVS Albion OLIM UK Equity Income Fund ("OUEIF") was disposed of in October 2020. Prior to the disposal, and to avoid double charging, Albion agreed to reduce its management fee relating to the investment in the OUEIF by 0.75% per annum, which represented the OUEIF management fee charged by OLIM. This resulted in a further reduction of the management fee of GBP15,000 (2020: GBP32,000). Further details on the OUEIF disposal can be found in the Chairman's statement above.

6. Other expenses

 
                                                        Year ended      Year ended 
                                                       31 March 2021   31 March 2020 
                                                          GBP'000         GBP'000 
Directors' fees (including NIC)                                   95              99 
Auditor's remuneration for statutory audit services 
 (exclusive of VAT)                                               37              34 
Administration fee                                               153              74 
Other administrative expenses                                    169             156 
                                                      --------------  -------------- 
                                                                 454             363 
                                                      --------------  -------------- 
 

7. Directors' fees

The amounts paid to and on behalf of the Directors during the year are as follows:

 
                       Year ended      Year ended 
                      31 March 2021   31 March 2020 
                         GBP'000         GBP'000 
Directors' fees                  88              91 
National insurance                7               8 
                                 95              99 
                     --------------  -------------- 
 

The Company's key management personnel are the Directors. Further information regarding Directors' remuneration can be found in the Directors' remuneration report on pages 42 to 44 of the full Annual Report and Financial Statements.

8. Tax on ordinary activities

 
                                                Year ended      Year ended 
                                                 31 March 2021   31 March 2020 
                                                 GBP'000         GBP'000 
UK corporation tax charge in respect of                      -               - 
current year 
                                                             -               - 
                                                --------------  -------------- 
 
 
                                                          Year ended      Year ended 
                                                         31 March 2021   31 March 2020 
Factors affecting the tax charge:                           GBP'000         GBP'000 
------------------------------------------------------ 
 
 Return/(loss) on ordinary activities before taxation            9,229         (3,675) 
                                                        --------------  -------------- 
 
Tax charge on profit at the average companies rate 
 of 19% 
 (2020: 19%)                                                     1,754           (698) 
 
Factors affecting the charge: 
Non-taxable (gains)/losses                                     (2,069)             548 
Income not taxable                                                (18)            (59) 
Excess management expenses carried forward                         333             209 
                                                                     -               - 
                                                        --------------  -------------- 
 

The tax charge for the year shown in the Income statement is lower than the average companies rate of corporation tax in the UK of 19% (2020: 19%). The differences are explained above.

Notes

   (i)         Venture Capital Trusts are not subject to corporation tax on capital gains. 
   (ii)         Tax relief on expenses charged to capital has been determined by allocating tax relief to expenses by reference to the applicable corporation tax rate and allocating the relief between revenue and capital in accordance with the SORP. 
   (iii)         The Company has excess management expenses of GBP8,090,000 (2020: GBP6,249,000) that are available for offset against future profits. A deferred tax asset of GBP1,537,000 (2020: GBP1,062,000) has not been recognised in respect of these losses as they will be recoverable only to the extent that the Company has sufficient future taxable profits. 

9. Dividends

 
                                                           Year ended      Year ended 
                                                          31 March 2021   31 March 2020 
                                                             GBP'000         GBP'000 
------------------------------------------------------- 
First dividend of 2.70p per share paid on 28 August 
 2020 (30 August 2019 -- 3.00p per share)                         1,836           1,911 
Second dividend of 2.74p per share paid on 26 February 
 2021 (28 February 2020 -- 3.00p per share)                       1,854           2,045 
Unclaimed dividends                                                 (2)               - 
                                                                  3,688           3,956 
                                                         --------------  -------------- 
 

Details of the consideration issued under the Dividend Reinvestment Scheme included in the dividends above can be found in note 15.

In addition to the dividends summarised above, the Board has declared a first dividend for the year ending 31 March 2022 of 2.87 pence per share to be paid on 31 August 2021 to shareholders on the register on 6 August 2021. The total dividend will be approximately GBP2,150,000.

10. Basic and diluted return per share

 
                                                                Year ended         Year ended 
                                                               31 March 2021        31 March 2020 
                                                          Revenue  Capital  Total  Revenue  Capital   Total 
--------------------------------------------------------                           -------  -------  ------- 
(Loss)/return attributable to equity shares (GBP'000)       (349)    9,578  9,229      398  (4,073)  (3,675) 
Weighted average shares in issue (adjusted for treasury 
 shares)                                                        68,620,876                64,506,507 
(Loss)/return attributable per equity share (pence)        (0.51)    13.96  13.45     0.61   (6.31)   (5.70) 
 

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

The weighted average number of shares is calculated after adjusting for treasury shares of 10,713,420 (2020: 8,945,314).

11. Fixed asset investments

 
Investments held at fair value through profit or      31 March 2021  31 March 2020 
loss                                                   GBP'000          GBP'000 
Unquoted equity and preference shares                        48,450         37,560 
Unquoted loan stock                                          12,165         10,299 
                                                      -------------  ------------- 
                                                             60,615         47,859 
                                                      -------------  ------------- 
 
                                                      31 March 2021  31 March 2020 
                                                            GBP'000        GBP'000 
----------------------------------------------------  -------------  ------------- 
Opening valuation                                            47,859         59,146 
Purchases at cost                                             7,324          6,035 
Disposal proceeds                                           (5,270)       (15,549) 
Realised gains                                                1,866          3,112 
Movement in loan stock revenue accrued income                     -          (224) 
Unrealised gains/(losses)                                     8,836        (4,661) 
                                                      -------------  ------------- 
Closing valuation                                            60,615         47,859 
                                                      -------------  ------------- 
 
Movement in loan stock revenue accrued income 
Opening accumulated loan stock revenue accrued 
 income                                                           1            225 
Movement in loan stock revenue accrued income                     -          (224) 
                                                      -------------  ------------- 
Closing accumulated loan stock revenue accrued 
 income                                                           1              1 
                                                      -------------  ------------- 
 
Movement in unrealised gains 
Opening accumulated unrealised gains                         10,129         18,829 
Movement in unrealised gains                                  8,836        (4,661) 
Transfer of previously unrealised gains to realised 
 reserve on disposal of investments                         (1,426)        (4,040) 
                                                      -------------  ------------- 
Closing accumulated unrealised gains                         17,539         10,129 
                                                      -------------  ------------- 
 
Historic cost basis 
Opening book cost                                            37,730         40,092 
Purchases at cost                                             7,324          6,035 
Sales at cost                                               (1,978)        (8,397) 
                                                      -------------  ------------- 
Closing book cost                                            43,076         37,730 
                                                      -------------  ------------- 
 

Purchases and disposals detailed above do not agree to the Statement of cash flows due to restructuring of investments, conversion of convertible loan stock and settlement debtors and creditors.

Unquoted fixed asset investments are valued at fair value in accordance with the IPEV guidelines as follows:

 
                                                      31 March      31 March 
                                                        2021          2020 
Valuation methodology                                 GBP'000       GBP'000 
--------------------------------------------------  ------------  ------------ 
Revenue multiple                                          25,130        20,268 
Cost and price of recent investment (reviewed for 
 impairment or uplift)                                    23,438        16,754 
Third party valuation -- Discounted cash flow              6,448         6,693 
Third party valuation -- Earnings multiple                 3,053         2,823 
Earnings multiple                                          2,405           789 
Net assets                                                   141           532 
                                                          60,615        47,859 
                                                    ------------  ------------ 
 

When using the cost or price of a recent investment in the valuations, the Company looks to re-calibrate this price at each valuation point by reviewing progress within the investment, comparing against the initial investment thesis, assessing if there are any significant events or milestones that would indicate the value of the investment has changed and considering whether a market-based methodology (i.e. using multiples from comparable public companies) or a discounted cashflow forecast would be more appropriate.

The main inputs into the calibration exercise, and for the valuation models using multiples, are revenue, EBITDA and P/E multiples (based on the most recent revenue, EBITDA or earnings achieved and equivalent corresponding revenue, EBITDA or earnings multiples of comparable companies), quality of earnings assessments and comparability difference adjustments. Revenue multiples are often used, rather than EBITDA or earnings, due to the nature of the Company's investments, being in growth and technology companies which are not normally expected to achieve profitability or scale for a number of years. Where an investment has achieved scale and profitability the Company would normally then expect to switch to using an EBITDA or earnings multiple methodology.

In the calibration exercise and in determining the valuation for the Company's equity instruments, comparable trading multiples are used. In accordance with the Company's policy, appropriate comparable companies based on industry, size, developmental stage, revenue generation and strategy are determined and a trading multiple for each comparable company identified is then calculated. The multiple is calculated by dividing the enterprise value of the comparable group by its revenue, EBITDA or earnings. The trading multiple is then adjusted for considerations such as illiquidity, marketability and other differences, advantages and disadvantages between the portfolio company and the comparable public companies based on company specific facts and circumstances.

Fair value investments had the following movements between valuation methodologies between 31 March 2020 and 31 March 2021:

 
Change in valuation methodology (2020 to 2021)                 Value on  Explanatory 
                                                          31 March 2021  note 
                                                                GBP'000 
------------------------------------------------------- 
Cost and price of recent investment (reviewed for                 7,194  More 
 impairment or uplift) to revenue multiple                               appropriate 
                                                                         valuation 
                                                                         methodology. 
Revenue multiple to cost and price of recent investment           3,393  Funding 
 (reviewed for impairment or uplift)                                     round led to 
                                                                         new 
                                                                         methodology. 
Cost to earnings multiple                                         2,036  More 
                                                                         appropriate 
                                                                         valuation 
                                                                         methodology. 
Net assets to cost and price of recent investment                   573  External 
 (reviewed for impairment or uplift)                                     funding 
                                                                         round led to 
                                                                         new 
                                                                         methodology. 
 

The valuation will be the most appropriate valuation methodology for an investment within its market, with regard to the financial health of the investment and the IPEV Guidelines. The Directors believe that, within these parameters, these are the most relevant methods of valuation which would be reasonable on 31 March 2021.

FRS 102 and the SORP requires the Company to disclose the inputs to the valuation methods applied to its investments measured at fair value through profit or loss in a fair value hierarchy. The table below sets out fair value hierarchy definitions using FRS102 s.11.27.

 
Fair value hierarchy  Definition 
--------------------  ---------------------------------------------------- 
Level 1               Unadjusted quoted prices in an active market 
--------------------  ---------------------------------------------------- 
Level 2               Inputs to valuations are from observable sources and 
                       are directly or indirectly derived from prices 
--------------------  ---------------------------------------------------- 
Level 3               Inputs to valuations not based on observable market 
                       data 
--------------------  ---------------------------------------------------- 
 

Quoted investments are valued according to Level 1 valuation methods. Unquoted equity, preference shares and loan stock are all valued according to Level 3 valuation methods.

Investments held at fair value through profit or loss (Level 3) had the following movements:

 
                               31 March 2021  31 March 2020 
                                  GBP'000           GBP'000 
-----------------------------                 ------------- 
Opening balance                       47,859         58,857 
Additions                              7,324          6,074 
Disposals                            (5,270)       (15,549) 
Realised gains                         1,866          3,362 
Accrued loan stock interest                -          (224) 
Unrealised gains/(losses)              8,836        (4,661) 
                               -------------  ------------- 
Closing balance                       60,615         47,859 
                               -------------  ------------- 
 

There are no Level 1 or 2 investments, nor have there been any transfers between Levels during the course of the year.

FRS 102 requires the Directors to consider the impact of changing one or more of the inputs used as part of the valuation process to reasonable possible alternative assumptions. 55% of the portfolio of investments, consisting of equity and loan stock, is based on recent investment price, net assets and cost. For the remainder of the portfolio, the Board has considered the reasonable possible alternative input assumptions on the valuation of the portfolio and believes that changes to inputs (by adjusting the earnings and revenue multiples) could lead to a change in the fair value of the portfolio. The Board has reviewed the Manager's adjusted inputs for a number of the largest portfolio companies (by value) which covers 29% of the portfolio. This has resulted in a total coverage of 84% of the portfolio of investments. The main inputs considered for each type of valuation is as follows:

 
                                                                                                   Change in 
                                                                                                  fair value 
                                                                                          Change      of         Change in NAV 
Valuation                                                                         Base      in    investments     (pence per 
technique          Portfolio company sector                    Input              Case*   input    (GBP'000)        share) 
-----------------  ------------------------------------------  -----------------  ------  ------  -----------  ----------------- 
Revenue multiple   Other software & technology                 Revenue multiple   5.6x      +0.5          923               1.24 
-----------------  ------------------------------------------  -----------------  ------  ------  -----------  ----------------- 
                                                                                            -0.5        (915)             (1.23) 
   -------------------------------------------------------------------------------------  ------  -----------  ----------------- 
Revenue multiple   Healthcare (including digital healthcare)   Revenue multiple   5.2x      +0.2          177               0.24 
-----------------  ------------------------------------------  -----------------  ------  ------  -----------  ----------------- 
                                                                                            -0.7        (639)             (0.86) 
   -------------------------------------------------------------------------------------  ------  -----------  ----------------- 
Revenue multiple   Other software & technology                 Revenue multiple   6.0x      +1.4          505               0.68 
-----------------  ------------------------------------------  -----------------  ------  ------  -----------  ----------------- 
                                                                                            -2.0        (714)             (0.96) 
   -------------------------------------------------------------------------------------  ------  -----------  ----------------- 
 

*As detailed in the accounting policies above, the base case is based on market comparables, discounted where appropriate for marketability, in accordance with the IPEV guidelines.

The impact of these changes could result in an overall increase in the valuation of the equity investments by GBP1,605,000 (3.3%) or a decrease in the valuation of equity investments by GBP2,268,000 (4.7%).

12. Significant interests

The principal activity of the Company is to select and hold a portfolio of investments in unquoted securities. Although the Company, through the Manager, will, in some cases, be represented on the board of the portfolio company, it will not take a controlling interest or become involved in the management of a portfolio company. The size and structure of the companies with unquoted securities may result in certain holdings in the portfolio representing a participating interest without there being any partnership, joint venture or management consortium agreement. The investment listed below is held as part of an investment portfolio and therefore, as permitted by FRS 102 section 9.9B, it is measured at fair value through profit and loss and not accounted for using the equity method.

The Company has interests of greater than 20% of the nominal value of any class of the allotted shares in the portfolio company on 31 March 2021 as described below:

 
              Registered                                                                                                     % class 
              address and                                                                                                      and     % total 
              country of      Principal   Profit/(loss) before tax   Aggregate capital and reserves                           share    voting 
Company       incorporation   activity     GBP'000                               GBP'000              Result for year ended    type    rights 
------------  --------------  ----------  -------------------------  ------------------------------  ----------------------  --------  ------- 
                              Owner and 
                               operator 
Greenenerco                    of a wind                                                                                      28.6% A 
 Limited      EC1M 5QL, UK     project    n/a*                                                  575           31 March 2020  Ordinary    28.6% 
------------  --------------  ----------  -------------------------  ------------------------------  ----------------------  --------  ------- 
 

*The company files filleted accounts which do not disclose this information.

13. Current assets

 
Current asset investments               31 March 2021  31 March 2020 
                                           GBP'000        GBP'000 
--------------------------------------  -------------  ------------- 
SVS Albion OLIM UK Equity Income Fund               -          3,501 
                                        -------------  ------------- 
 

For further details on the disposal of the SVS Albion OLIM UK Equity Income Fund, please see the Chairman's statement above.

 
Trade and other receivables             31 March 2021  31 March 2020 
                                           GBP'000        GBP'000 
--------------------------------------  -------------  ------------- 
Deferred consideration under one year             149            162 
Deferred consideration over one year            1,600              - 
Prepayments and accrued income                     21             16 
Other debtors                                       2              4 
                                                1,772            182 
                                        -------------  ------------- 
 

The deferred consideration over one year relates to the sale of G.Network Communications Limited in December 2020. These proceeds are receivable in January 2024, and have been discounted to present value at the prevailing market rate, including a provision for counterparty risk. This constitutes a financing transaction, and has been accounted for using the policy disclosed in note 2.

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

14. Payables: amounts falling due within one year

 
                               31 March 2021  31 March 2020 
                                  GBP'000        GBP'000 
-----------------------------  -------------  ------------- 
Accruals and deferred income             812            469 
Trade payables                           606             30 
                                       1,418            499 
                               -------------  ------------- 
 

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

15. Called-up share capital

 
Allotted, called-up and fully paid shares:                GBP'000 
-------------------------------------------------------- 
77,044,547 Ordinary shares of 1 penny each at 31 March 
 2020                                                         770 
8,187,553 Ordinary shares of 1 penny each issued during 
 the year                                                      82 
--------------------------------------------------------  ------- 
85,232,100 Ordinary shares of 1 penny each at 31 March 
 2021                                                         852 
--------------------------------------------------------  ------- 
 
8,945,314 Ordinary shares of 1 penny each held in 
 treasury at 31 March 2020                                   (89) 
1,768,106 Ordinary shares purchased during the year 
 to be held in treasury                                      (18) 
--------------------------------------------------------  ------- 
10,713,420 Ordinary shares of 1 penny each held in 
 treasury at 31 March 2021                                  (107) 
--------------------------------------------------------  ------- 
 
Voting rights of 74,518,680 Ordinary shares of 1 penny 
 each at 31 March 2021                                        745 
--------------------------------------------------------  ------- 
 

The Company purchased 1,768,106 shares (2020: 1,123,871) to be held in treasury at a nominal value of GBP17,681 and a cost of GBP1,853,000 (2020: GBP1,252,000) representing 2.1% of the shares in issue on 31 March 2021, leading to a balance of 10,713,420 shares (2020: 8,945,314) in treasury representing 12.6% (2020: 11.6%) of the shares in issue on 31 March 2021.

Under the terms of the Dividend Reinvestment Scheme Circular (dated 26 November 2009), the following new Ordinary shares of nominal value 1 penny each were allotted during the year:

 
                                Aggregate 
                               nominal value                         Net 
Date of        Number of         of shares       Issue price       invested   Opening market price on allotment date (pence per 
allotment    shares allotted     (GBP'000)     (pence per share)   (GBP'000)                        share) 
---------- 
28 August 
 2020                286,480               3              103.84         296                                              98.00 
26 
 February 
 2021                262,339               3              112.23         293                                             106.50 
            ----------------                                      ---------- 
                     548,819                                             589 
            ----------------                                      ---------- 
 

During the year the following new Ordinary shares of nominal value 1 penny each were allotted under the terms of the Albion VCTs Prospectus Top Up Offers 2019/20 and 2020/21:

 
                                Aggregate                              Net 
                               nominal value                       consideration 
Date of        Number of         of shares       Issue price         received     Opening market price on allotment date (pence per 
allotment    shares allotted     (GBP'000)     (pence per share)     (GBP'000)                          share) 
---------- 
30 April 
 2020                 90,192               1              108.20              96                                              95.00 
30 April 
 2020                102,334               1              109.30             109                                              95.00 
26 
 February 
 2021              1,516,559              15              114.00           1,703                                             106.50 
26 
 February 
 2021                378,823               4              114.60             425                                             106.50 
26 
 February 
 2021              5,550,826              56              115.20           6,235                                             106.50 
                   7,638,734                                               8,568 
            ----------------                                      -------------- 
 

16. Basic and diluted net asset value per share

 
                                            31 March 2021      31 March 2020 
                                          (pence per share)  (pence per share) 
----------------------------------------  -----------------  ----------------- 
Basic and diluted net asset value per 
 Ordinary share                                      114.60             106.54 
 

The basic and diluted net asset value per share at the year end is calculated in accordance with the Articles of Association and is based upon total shares in issue (excluding treasury shares) of 74,518,680 Ordinary shares (2020: 68,099,233) at 31 March 2021.

17. Capital and financial instruments risk management

The Company's capital comprises Ordinary shares as described in note 15. The Company is permitted to buy-back its own shares for cancellation or treasury purposes, and this is described in more detail on page 31 of the Directors' report of the full Annual Report and Financial Statements.

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

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

   -- Market and investment risk (which comprises investment price and cash 
      flow interest rate risk); 
 
   -- credit risk; and 
 
   -- liquidity risk. 

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

Market risk

As a Venture Capital Trust, it is the Company's specific nature to evaluate the market risk of its portfolio in unquoted companies, details of which are shown on pages 24 and 25 of the full Annual Report and Financial Statements. Market risk is the exposure of the Company to the revaluation and devaluation of investments as a result of macroeconomic changes. The main driver of market risk is the dynamics of market quoted comparators, as well as the financial and operational performance of portfolio companies. The Board seeks to reduce this risk by having a spread of investments across a variety of sectors. More details on the sectors the Company invests in can be found in the pie chart at the end of this announcement.

The Manager and the Board formally review market risk, both at the time of initial investment and at quarterly Board meetings.

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

Under FRS 102 the Board is required to illustrate by way of a sensitivity analysis the extent to which the assets are exposed to market risk. The Board considers that the value of the fixed asset investment portfolio is sensitive to a change of 10% based on the current economic climate. The impact of a 10% change has been selected as this is considered reasonable given the current level of volatility observed. When considering the appropriate level of sensitivity to be applied, the Board has considered both historic performance and future expectations.

The sensitivity of a 10% increase or decrease in the valuation of the fixed asset investment portfolio (keeping all other variables constant) would increase or decrease the net asset value and return for the year by GBP6,062,000. Further sensitivity analysis on fixed asset investments is included in note 11.

Investment risk (including investment price risk)

Investment risk (including investment price risk) is the risk that the fair value of future investment cash flows will fluctuate due to factors specific to an investment instrument or to a market in similar instruments. The management of risk within the venture capital portfolio is addressed through careful investment selection, by diversification across different industry segments, by maintaining a wide spread of holdings in terms of financing stage and by limitation of the size of individual holdings. The Manager receives management accounts from portfolio companies and members of the investment management team often sit on the boards of unquoted portfolio companies; this enables the close identification, monitoring and management of investment risk. The Directors monitor the Manager's compliance with the investment policy, review and agree policies for managing this risk and monitor the overall level of risk on the portfolio on a regular basis.

Valuations are based on the most appropriate valuation methodology for an investment within its market, with regard to the financial health of the investment and the IPEV Guidelines. Details of the industries in which investments have been made are contained in the pie chart at the end of this announcement.

The maximum investment risk on the balance sheet date is the value of the fixed asset investment portfolio which is GBP60,615,000 (2020: fixed and current assets; GBP51,360,000). Fixed asset investments form 71% of the net asset value on 31 March 2021 (2020: fixed and current assets; 71%).

More details regarding the classification of fixed asset investments are shown in note 11.

Interest rate risk

It is the Company's policy to accept a degree of interest rate risk on its financial assets through the effect of interest rate changes. On the basis of the Company's analysis, it was estimated that a rise of 1% in all interest rates would have increased total return before tax for the year by approximately GBP230,000 (2020: GBP178,000). Furthermore, it was considered that a fall of interest rates below current levels during the year would have been very unlikely.

The weighted average effective interest rate applied to the Company's unquoted loan stock during the year was approximately 4.9% (2020: 7.2%). The weighted average period to expected maturity for the unquoted loan stock is approximately 4.5 years (2020: 5.1 years).

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

 
                            31 March 2021               31 March 2020 
                                     Non-                                     Non- 
                Fixed    Floating   interest             Fixed    Floating   interest 
                 rate      rate     bearing    Total      rate      rate     bearing    Total 
                GBP'000   GBP'000   GBP'000    GBP'000   GBP'000   GBP'000   GBP'000    GBP'000 
------------- 
Unquoted 
 equity               -         -     48,450    48,450         -         -     37,560    37,560 
Unquoted loan 
 stock           11,508         -        657    12,165     9,426         -        873    10,299 
Current asset 
 investments          -         -          -         -         -         -      3,501     3,501 
Receivables*          -         -      1,751     1,751         -         -        167       167 
Current 
 liabilities          -         -    (1,418)   (1,418)         -         -      (499)     (499) 
Cash                  -    24,429          -    24,429         -    21,510          -    21,510 
                 11,508    24,429     49,440    85,377     9,426    21,510     41,602    72,538 
               --------  --------  ---------  --------  --------  --------  ---------  -------- 
 

*The receivables do not reconcile to the Balance sheet as prepayments are not included in the above table.

Credit risk

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

The Manager evaluates credit risk on loan stock and other similar instruments prior to investment, and as part of its ongoing monitoring of investments. In doing this, it takes into account the extent and quality of any security held. For loan stock investments made prior to 6 April 2018, which account for 68.6% of loan stock by value, typically loan stock instruments have a fixed or floating charge, which may or may not have been subordinated, over the assets of the portfolio company in order to mitigate the gross credit risk.

The Manager receives management accounts from portfolio companies, and members of the investment management team often sit on the boards of unquoted portfolio companies; this enables the close identification, monitoring and management of investment-specific credit risk.

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

The Company's total gross credit risk on 31 March 2021 was limited to GBP12,165,000 (2020: GBP10,299,000) of unquoted loan stock instruments, GBP24,429,000 (2020: GBP21,510,000) of cash deposits with banks and GBP1,751,000 (2020: GBP167,000) of other receivables.

At the balance sheet date, the cash held by the Company was held with Lloyds Bank plc, Scottish Widows Bank plc (part of Lloyds Banking Group plc), Barclays Bank plc and National Westminster Bank plc. Credit risk on cash transactions was mitigated by transacting with counterparties that are regulated entities subject to prudential supervision, with high credit ratings assigned by international credit-rating agencies.

The Company has an informal policy of limiting counterparty banking exposure to a maximum of 20% of net asset value for any one counterparty.

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

Liquidity risk

Liquid assets are held as cash on current account, cash on deposit or short term money market account. Under the terms of its Articles, the Company has the ability to borrow up to 10% of its adjusted share capital and reserves of the latest published audited Balance sheet, which amounts to GBP8,325,000 (2020: GBP7,071,000) on 31 March 2021.

The Company has no committed borrowing facilities on 31 March 2021 (2020: nil) and had cash of GBP24,429,000 (2020: GBP21,510,000). The main cash outflows are for new investments, share buy-backs and dividend payments, which are within the control of the Company. The Manager formally reviews the cash requirements of the Company on a monthly basis, and the Board on a quarterly basis as part of its review of management accounts and forecasts. All the Company's financial liabilities are short term in nature and total GBP1,418,000 on 31 March 2021 (2020: GBP499,000).

The carrying value of loan stock investments as analysed by expected maturity dates is as follows:

 
                                  31 March 2021                        31 March 2020 
Redemption   Fully performing  Past due  Valued below cost   Total    Fully performing  Past due  Valued below cost   Total 
date              GBP'000       GBP'000       GBP'000        GBP'000       GBP'000       GBP'000       GBP'000        GBP'000 
----------- 
Less than 
 one year               2,752         -                206     2,958             2,392         -                 73     2,465 
1-2 years               1,362       656                 45     2,063               466         -                132       598 
2-3 years                  93         -                161       254               958         -                866     1,824 
3-5 years               4,322         -                  8     4,330             1,761         -                209     1,970 
Greater 
 than 5 
 years                  2,560         -                  -     2,560             3,442         -                  -     3,442 
             ----------------  --------  -----------------            ----------------  --------  -----------------  -------- 
Total                  11,089       656                420    12,165             9,019         -              1,280    10,299 
             ----------------  --------  -----------------  --------  ----------------  --------  -----------------  -------- 
 

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

The cost of loan stock investments valued below cost is GBP510,000 (2020: GBP1,760,000).

The Company does not hold any assets as the result of the enforcement of security during the period, and believes that the carrying values for both those valued below cost and past due assets are covered by the value of security held for these loan stock investments.

In view of the availability of adequate cash balances and the repayment profile of loan stock investments, the Board considers that the Company is subject to low liquidity risk.

Fair values of financial assets and financial liabilities

All the Company's financial assets and liabilities on 31 March 2021 are stated at fair value as determined by the Directors, with the exception of receivables (including debtors due after more than one year), payables and cash which are carried at amortised cost, in accordance with FRS 102. There are no financial liabilities other than payables. The Company's financial liabilities are all non-interest bearing. It is the Directors' opinion that the book value of the financial liabilities is not materially different to the fair value and all are payable within one year.

18. Commitments and contingencies

On 31 March 2021, the Company had no financial commitments (2020: GBP139,000).

There were no contingent liabilities or guarantees given by the Company on 31 March 2021 (2020: nil).

19. Post balance sheet events

Since 31 March 2021 the Company has had the following post balance sheet events:

   -- As announced on 21 June 2021, and outlined in the Chairman's statement 
      above, two companies within the portfolio are undergoing external 
      fundraising processes. The Manager's current view of the effect of these 
      events on the valuations, as at the date of this Report, is an increase 
      of 7.81 pence per share (6.8%) to the audited 31 March 2021 net asset 
      value of 114.60p per share; 
 
   -- Investment of GBP763,000 in a new portfolio company, Gravitee Topco 
      Limited, an open source API management platform that enables enterprises 
      to manage their APIs through their lifecycle; 
 
   -- Investment of GBP644,000 in a new portfolio company, NuvoAir AB, a 
      digital therapeutics and decentralised clinical trials product for 
      respiratory conditions; 
 
   -- Investment of GBP531,000 in an existing portfolio company, uMotif Limited, 
      a patient engagement and data capture platform for use in real world and 
      observational research; 
 
   -- Investment of GBP269,000 in an existing portfolio company, Panaseer 
      Limited, a provider of cyber security services; 
 
   -- Investment of GBP265,000 in a new portfolio company, Accelex Technology 
      Limited (T/A Accelex), a data extraction and analytics technology for 
      private capital markets; and 
 
   -- Investment of GBP34,000 in an existing portfolio company, Abcodia Limited, 
      a provider of validation and discovery of serum biomarkers. 

The following new Ordinary shares of nominal value 1 penny each were allotted under the Albion VCTs Prospectus Top Up Offers 2020/21 after 31 March 2021:

 
                       Aggregate    Issue 
            Number of   nominal     price          Net        Opening market 
   Date of   shares    value of     (pence    consideration      price on 
 allotment  allotted    shares       per        received      allotment date 
                        GBP'000     share)       GBP'000     (pence per share) 
----------  ---------  ---------  ----------  -------------  ----------------- 
   9 April 
      2021    144,118          1      114.00            162             106.50 
   9 April 
      2021      9,249          -      114.60             10             106.50 
   9 April 
      2021    229,987          2      115.20            258             106.50 
              383,354                                   430 
            ---------                         ------------- 
 

20. Related party transactions

Other than transactions with the Manager as disclosed in note 5, and the Directors' remuneration disclosed in the Directors' remuneration report on pages 42 to 44 of the full Annual Report and Financial Statements, there are no other related party transactions or balances requiring disclosure.

21. Other Information

The information set out in this announcement does not constitute the Company's statutory accounts within the terms of section 434 of the Companies Act 2006 for the years ended 31 March 2021 and 31 March 2020, and is derived from the statutory accounts for those financial years, which have been, or in the case of the accounts for the year ended 31 March 2021, which will be, delivered to the Registrar of Companies. The Auditor reported on those accounts; the reports were unqualified and did not contain a statement under s498 (2) or (3) of the Companies Act 2006.

22. Publication

The full audited Annual Report and Financial Statements are being sent to shareholders and copies will be made available to the public at the registered office of the Company, Companies House, the National Storage Mechanism and also electronically at www.albion.capital/funds/AAEV, where the Report can be accessed as a PDF document via a link in the 'Financial Reports and Circulars' section.

Attachment

   -- Pie charts for announcement 31 Mar 2021 
      https://ml-eu.globenewswire.com/Resource/Download/e5a8fa04-fd98-412c-8ce7-003d9a9cc599 
 
 
 

(END) Dow Jones Newswires

June 28, 2021 10:31 ET (14:31 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.
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