Albion Technology & General VCT PLC

As required by the UK Listing Authority's Disclosure and Transparency Rules 4.1 and 6.3, Albion Technology & General VCT PLC today makes public its information relating to the Annual Report and Financial Statements for the year ended 31 December 2014.

This announcement was approved for release by the Board of Directors on 26 March 2015.

This announcement has not been audited.

You will shortly be able to view the Annual Report and Financial Statements for the year to 31 December 2014 (which have been audited) at: www.albion-ventures.co.uk by clicking on 'Our Funds' and then 'Albion Technology & General VCT PLC'. The Annual Report and Financial Statements for the year to 31 December 2014 will be available as a PDF document via a link under the 'Investor Centre' in the 'Financial Reports and Circulars' section. The information contained in the Annual Report and Financial Statements will include information as required by the Disclosure and Transparency Rules, including Rule 4.1.

Investment objective and policy

Albion Technology & General VCT PLC's investment strategy is to provide investors with a regular and predictable source of dividend income combined with the prospect of longer term capital growth.

This is achieved in two ways.  Firstly, by controlling the VCT's exposure to technology risk through ensuring that many of the companies in the non-technology portfolio have property as their major asset, with no external borrowings. Secondly, by balancing the investment portfolio by sector, so that those areas such as leisure and business services, which are susceptible to changes in consumer sentiment, are complemented by sectors with more predictable long term characteristics, such as healthcare and the environment.

The Company offers investors the opportunity to participate in a balanced portfolio of technology and non-technology businesses. The Company's investment portfolio is intended to be split approximately as follows:

• 40 per cent. in unquoted UK technology-related companies; and
   
• 60 per cent. in unquoted UK non-technology companies.

This split is subject to the availability of good quality new investments arising within the UK technology and non-technology sectors.

Background to the Company

The Company is a venture capital trust which raised £14.3 million in December 2000 and 2002, and raised a further £35.0 million during 2006 through the launch of a C share issue. The Company has raised a further £10.3m under the Albion VCTs Top Up Offers since January 2011.

On 15 November 2013, the Company acquired the assets and liabilities of Albion Income & Growth VCT PLC ("Income & Growth") in exchange for new shares in the Company ("the Merger").  On the same day Income & Growth was placed into members' voluntary liquidation pursuant to a scheme of reconstruction under Section 110 of the Insolvency Act 1986.
All of the assets and liabilities of Income & Growth totalling £28,075,000 were transferred to the Company in exchange for the issue of 33,664,049 new Ordinary shares at an issue price of 83.38 pence per share.  Each Income & Growth shareholder received 0.7813 shares in the Company for each Income & Growth share that they held at the date of the Merger.

Financial calendar

Record date for first dividend	16 January 2015
Payment of first dividend	9 February 2015
Record date for second dividend	10 April 2015
Payment of second dividend	30 April 2015
Annual General Meeting	17 June 2015
Payment of third dividend (subject to Board approval)	30 June 2015
Announcement of half-yearly results for the six months ended 30 June 2015	August 2015
Payment of fourth dividend (subject to Board approval)	30 October 2015

Financial highlights

163.85p	Net asset value plus dividends per share since launch to 31 December 2014.
5.00p	Tax free dividend per share paid during the year ended 31 December 2014.
82.85p	Net asset value per share as at 31 December 2014.
1.25p	First dividend per share for the year to 31 December 2015 paid on 9 February 2015.
1.25p	Second dividend per share for the year to 31 December 2015 payable on 30 April 2015.

	31 December 2014 (pence per share)	31 December 2013 (pence per share)
Dividends paid	5.00	5.00
Revenue return	1.25	1.00
Capital return	0.79	6.90
Effect of Merger	-	(1.05)
Net asset value	82.85	85.75

Total shareholder net asset value return to 31 December 2014:
	Ordinary shares 31 December 2014 (pence per share) (i)	C shares 31 December 2014 (pence per share) (i)(ii)	Albion Income & Growth VCT PLC 31 December 2014 (pence per share) (i)(iii)
Total dividends paid during the period ended:
31 December 2001	1.00	-	-
31 December 2002	2.00	-	-
31 December 2003	1.50	-	-
31 December 2004	7.50	-	-
31 December 2005	9.00	-	0.65
31 December 2006	8.00	0.50	2.60
31 December 2007	8.00	2.50	3.45
31 December 2008	16.00	4.50	3.50
31 December 2009	-	1.00	3.00
31 December 2010	8.00	3.00	3.00
31 December 2011	5.00	3.80	3.50
31 December 2012	5.00	3.90	3.50
31 December 2013	5.00	3.90	3.50
31 December 2014	5.00	3.90	3.90
Total dividends paid to 31 December 2014	81.00	27.00	30.60
Net asset value as at 31 December 2014	82.85	64.45	64.73
Total shareholder net asset value return to 31 December 2014	163.85	91.45	95.33

In addition to the dividends paid above, the Board declared a first dividend for the year ending 31 December 2015 of 1.25 pence per Ordinary share paid on 9 February 2015 to shareholders on the register as at 16 January 2015. The Board has proposed a second dividend for the year ending 31 December 2015 of 1.25 pence per Ordinary share to be paid on 30 April 2015 to shareholders on the register as at 10 April 2015.

Notes
(i) Excludes tax benefits upon subscription.
(ii) The C shares were converted into Ordinary shares on 31 March 2011, with a conversion factor of 0.7779 Ordinary shares for each C share. The net asset value per share and all dividends paid subsequent to the conversion of the C shares to the Ordinary shares are multiplied by the conversion factor of 0.7779 in respect of the C shares' return, in order to give an accurate picture of the shareholder value since launch relating to the C shares.
(iii) The total shareholder returns presented above are based on the dividends paid to shareholders before the merger and the pro-rata dividend thereafter and a pro-rata net asset value per share as at 31 December 2014. Albion Income & Growth VCT PLC was merged with Albion Technology & General VCT PLC on 15 November 2013. The pro-forma NAV is based upon 0.7813 Albion Technology & General VCT PLC shares for every Albion Income & Growth VCT PLC share. Prior to the merger Albion Income & Growth VCT PLC had a financial year end of 30 September and as such, the above dividends per share relate to the relevant period.

Chairman's statement

Introduction
The results for Albion Technology & General VCT PLC for the year to 31 December 2014, showed a subdued performance compared to the strong results for the previous year, with a total return of 2.04 pence per share against 7.9 pence per share for 2013. 

Investment performance and progress
The year saw three exits, comprising our long standing investments in Peakdale Molecular and Consolidated Communications, both of which we backed in 2001; and the Tower Bridge Health Club, which we backed in 2005. We sold them for a total multiple of cost, including income received, of 2.0 times, 1.4 times and 2.8 times respectively. 

Approximately £5 million was invested in unquoted companies during the period. These include £200,000 in Egress, a fast growing developer of encryption services for secure email; £135,000 in Grapeshot, a business providing contextual analysis for the advertising technology sector; £480,000 in Exco In-Touch, a provider of software-led patient monitoring services; and £200,000 in Omprompt, a provider of software for the automation of order processing. Additional sums were also invested in our hydroelectric renewable energy businesses and a new brown-field wind turbine, all within the overall target that renewable energy should in due course form approximately 15 per cent. of the VCT's portfolio by cost.

Companies that performed particularly well during the year included Lowcosttravelgroup, which saw continued strong international growth; the Orchard Portman Group, which was sold subsequent to the year end at a multiple on cost, including income, of 1.6 times; and Radnor House School which has seen continued growth and which agreed to purchase an additional school, Combe Bank, near Sevenoaks, subsequent to the year end.

Against this, Helveta, the provider of software for tracking forestry and other produce, went into administration during the year, resulting in a write-off of £1.5 million; while the third party valuation of the Weybridge Health Club was sharply reduced due to a more competitive environment. Our investment in Rostima, which provides software for scheduling staff in ports, was also written down following slower than hoped for growth; while the price of Mi-Pay which is quoted on AiM also declined.

As a result of the merger with Albion Income & Growth VCT PLC, the Company is now enlarged with net assets over £60 million, with a better balanced, more diversified portfolio. In addition, the combined VCT is delivering annual cost savings of around £200,000.

Risks and uncertainties
Despite the renewed growth in the UK, the outlook for the domestic and global economies continues to be the key risk affecting your Company.  The Manager has been tasked with allocating resources to those sectors and opportunities where growth can be both resilient and sustainable.  Importantly, however, investment risk is mitigated through a variety of processes including our policy of ensuring that the VCT has a first charge over portfolio companies' assets wherever possible.

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

Discount management and share buy-backs
It remains the Board's primary objective to maintain sufficient resources for investment in existing and new portfolio companies and for the continued payment of dividends to shareholders.  Therefore, the Board's policy is to buy back shares in the market, subject to the overall constraint that such purchases are in the VCT's interest.   In order to ensure that these conditions are satisfied, the Company will limit the sum available for buy-backs for the 6 month period to 30 June 2015 to £1 million. It is the Board's intention for such buy-backs to be in the region of a 5 per cent. discount to net asset value, so far as market conditions and liquidity permit. 

Transactions with the Manager
Details of transactions that took place with the Manager during the year can be found in note 5 and principally relate to the investment management fee.

Results and dividends
As at 31 December 2014, the net asset value was 82.85 pence per share.  The Company will pay a second of four quarterly dividends for the financial year to 31 December 2015 of 1.25 pence per Ordinary share on 30 April 2015 to shareholders on the register on 10 April 2015.

Albion VCTs Prospectus Top Up Offers 2014/2015
On 17 November 2014, the Company announced the launch of the Albion VCTs Prospectus Top Up Offers 2014/2015. In aggregate, the Albion VCTs will be aiming to raise up to £36 million across six of the VCTs managed by Albion Ventures LLP, with Albion Technology & General VCT PLC aiming to raise up to £6 million. 

The funds raised by each Company pursuant to its Offer will be added to the liquid resources available for investment so as to put each Company into a position to take advantage of attractive investment opportunities over the next two to three years. Accordingly, the proceeds of the Offers will be applied in accordance with the respective Companies' investment policies. A prospectus has been published and can be obtained from www.albion-ventures.co.uk.

Outlook and prospects
Your Company has a substantial and well-balanced investment portfolio, with investments spread across a number of sectors which are characterised either by good, long-term cash generation, or by growth prospects in niche international markets. In a venture capital portfolio, not all investments will perform in line with initial expectations, but we remain confident of the longer term prospects of the VCT as a whole.

Dr N E Cross
Chairman
26 March 2015

Strategic report

Investment objective and policy
The Company's investment objective is to provide investors with a regular and predictable source of dividend income combined with the prospect of long term capital growth through allowing investors the opportunity to participate in a balanced portfolio of technology and non-technology businesses. It is intended that the Company's investment portfolio will be split approximately as follows:

• 40 per cent. in unquoted UK technology related companies; and

• 60 per cent. in unquoted UK non-technology companies.

This split is subject to the availability of good quality new investments arising within the UK technology and non-technology sectors.

The Company pursues a longer term investment approach, with a view to providing shareholders with a strong, predictable dividend flow, combined with the prospects of capital growth. This is achieved in two ways.  Firstly, by controlling the VCT's exposure to technology risk through ensuring that many of the companies in the non-technology portfolio have property as their major asset with no external borrowings. Secondly, by balancing the investment portfolio by sector, so that those areas such as leisure and business services, which are susceptible to changes in consumer sentiment, are complemented by sectors with more predictable long term characteristics, such as healthcare and the environment.

Current portfolio sector allocation
The pie chart at the end of this announcement shows the split of the portfolio valuation by industrial or commercial sector as at 31 December 2014. Details of the principal investments made by the Company are shown in the Portfolio of Investments on pages 18 to 20 of the full Annual Report and Financial Statements.

Direction of portfolio
The sector analysis of the VCT's investment portfolio shows that renewable energy now accounts for 13 per cent. of the portfolio compared to 8 per cent. at the end of the previous financial year. The renewable energy sector forms part of the UK non-technology portfolio. This remains in line with the Board's target exposure to the sector with a view to increasing this to 15 per cent. over the coming months as construction completes on our final hydroelectric projects. 

Despite exits in the healthcare sector in both 2014 and the current year, healthcare will remain as a core area for growth and we continue to target new investment opportunities. Similarly, we anticipate our exposure to the education sector continuing to grow.

Results and dividend policy

	Ordinary shares
	£'000
Net revenue return for the year ended 31 December 2014	970
Dividend of 1.25 pence per share paid on 31 January 2014	(945)
Dividend of 1.25 pence per share paid on 30 April 2014	(977)
Dividend of 1.25 pence per share paid on 30 June 2014	(977)
Dividend of 1.25 pence per share paid on 31 October 2014	(977)
Transferred from other distributable reserve	(2,906)
Realised and unrealised capital gain for the year transferred to reserves	617
Net assets as at 31 December 2014	64,886
Net asset value per share as at 31 December 2014	82.85p

The Company paid dividends of 5.00 pence per share during the year ended 31 December 2014 (2013: 5.00 pence per share). The dividend objective of the Board is to provide Shareholders with a strong, predictable dividend flow, with a dividend target of 5.00 pence per share per year, subject to the availability of distributable reserves. As shown in the Chairman's statement, the Board declared a first dividend for the year ending 31 December 2015 of 1.25 pence per share which was paid on 9 February 2015. The Board has proposed a second dividend for the year ending 31 December 2015, of 1.25 pence per share to be paid on 30 April 2015 to shareholders on the register as at 10 April 2015.

As shown in the Income statement, investment income has increased significantly to £1,940,000 (2013: £1,082,000) largely due to the Company receiving interest for the full year from Albion Income & Growth VCT PLC's portfolio companies after the merger.  As a result, the revenue return to equity holders has increased to £970,000 (2013: £464,000).

The capital return for the year was £617,000 (2013: £3,188,000). This is mainly attributable to the unrealised revaluation movements in the Company's investment portfolio and by realised gains on disposal of investments in particular Peakdale Molecular and Tower Bridge Health Club, offset by management fees charged to capital. The total return was 2.04 pence per share (2013: 7.90 pence per share). The overall capital return was reduced by the write-off of our investment in Helveta, which was placed into administration during the year. The return was also reduced by the decline in Mi-Pay's share price on AiM, although we remain optimistic of the company's longer term prospects.

The Balance sheet shows that the net asset value per share has decreased over the last year to 82.85 pence per share (2013: 85.75 pence per share). The decrease in net asset value can mainly be attributed to the payment of 5.00 pence per share of dividends not being covered by the total return.

The cash flow for the business was negative for the year as a result of a number of new investments made and dividends paid during the year partially offset by net cash inflow from operating activities, the disposal of investments and the issue of new shares.

Review of business and outlook
A detailed review of the Company's business during the year and future prospects is contained in the Chairman's statement on pages 7 and 8 of the full Annual Report and Financial Statements and in this Strategic report.

The Directors do not foresee any major changes in the activity undertaken by the Company in the current year. The Company continues with its objective to invest in unquoted companies throughout the United Kingdom with a view to providing both capital growth and a reliable dividend income to shareholders over the long term.

Details of significant events which have occurred since the end of the financial year are listed in note 22. Details of transactions with the Manager are shown in note 5.

Future prospects
The results for the year though profitable were disappointing, particularly after the strong performance in 2013. Nevertheless, we see positive prospects for the current year, particularly in the non-technology segment of the portfolio, while the technology segment benefits from a broad spread of businesses in growth sectors which will be a longer-term source of value.

Key performance indicators
The Directors believe that the following key performance indicators, 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 key performance indicators give a good indication that the Company is achieving its investment objective and policy. These are:

1. Net asset value per share and cumulative net asset value total shareholder return

Cumulative NAV total return to shareholders increased by 1.3 per cent. to 163.85 pence per share for the year ended 31 December 2014.

2. Dividend distributions

Dividends paid in respect of the year ended 31 December 2014 were 5.00 pence per share (2013: 5.00 pence per share), in line with the Boards dividend objective. Cumulative dividends paid since inception are 81.00 pence per share.

3. Ongoing charges

The ongoing charges ratio for the year to 31 December 2014 was 2.9 per cent. (2013: 2.8 per cent.). 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 Directors expect the ongoing charges ratio for the year ahead to be approximately 2.9 per cent. (capped at 3 per cent.).

VCT regulation
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 24 of the full Annual Report and Financial Statements.

As part of the Government's wider review of the VCT regime, new rules have been introduced under the Finance Act 2014, which include:

• Allowing investors to subscribe for shares via nominee accounts;
• Restricting individuals' entitlement to VCT income tax relief where investments have been made within six months of a disposal of shares in the same VCT; and
• preventing VCTs from returning capital that does not relate to profits on investments within three years of the end of the accounting period in which shares were issued to investors.

The Directors do not believe that updates to the Finance Act would create a material change in the way the Company is currently run.

The relevant tests to measure compliance have been carried out and independently reviewed for the year ended 31 December 2014. These showed that the Company has complied with all tests and continues to do so.

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

Operational arrangements
The Company has delegated the investment management of the portfolio to Albion Ventures LLP, which is authorised and regulated by the Financial Conduct Authority. Albion Ventures LLP also provides company secretarial and other accounting and administrative support to the Company. Further details regarding the terms of engagement of the Manager and the way the Board has evaluated the performance of the Manager are shown below.

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 and 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 2.5 per cent. of the net asset value of the Company, payable quarterly in arrears.  Following the Merger the limit of total annual normal expenses, including the management fee, has been reduced from 3.5 per cent. to 3 per cent. of the net asset value.

In line with common practice, the Manager is also entitled to an arrangement fee, payable by each portfolio company, of approximately 2 per cent. of each investment made and Directors' fees where the Investment Manager has a representative on the portfolio company's board.

Management performance incentive
In order to provide the Manager with an incentive to maximise the return to investors, the Manager is entitled to charge an incentive fee in the event that the returns exceed minimum target levels per share.

Under the incentive arrangement, if the net asset value per share at the end of a financial period, when added to the aggregate dividends per share (both revenue and capital) paid to that date, exceeds £1 as increased at the rate of RPI plus 2 per cent. per annum uncompounded from the date of first admission to the Official List of the relevant class of share, then the Manager will be entitled to an incentive fee equal to 15 per cent. of such excess.  In the event that the performance of the Company falls short of the target in any period, such shortfall must be made up in future periods before the Manager is entitled to any incentive in respect of such future periods. The fee if applicable, will be payable annually. No performance fee has arisen during the year (2013: £nil).

The performance threshold at 31 December 2014  was 178.5 pence for the Ordinary shares, 151.1 pence for the former C shares and 157.0 pence for the former Albion Income & Growth VCT PLC shares which compare to total returns of 163.9 pence, 91.5 pence and 95.3 pence respectively, based on the latest announced NAV.

Investment and co-investment
The Company co-invests with other Albion Ventures LLP venture capital trusts and funds. Allocation of investments is on the basis of an allocation agreement which is based, inter alia, on the ratio of funds available for investment.

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 70 per cent. investment requirement for venture capital trust status, the long term prospects of current investments, a review of the Management agreement and the services provided therein, and benchmarking the performance of the Manager to other service providers. 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 has considered the impact on your Company of the AIFMD, an EU Directive that came into force in July 2013 to regulate the Managers of Alternative Investment Funds. The Board appointed Albion Ventures LLP as the Company's AIFM as required by the AIFMD. Albion Ventures LLP's registration as an AIFM was approved by the Financial Conduct Authority on 3 June 2014.

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 policies in these matters and as such these requirements do not apply.

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

• Environment
• Global greenhouse gas emissions
• Anti-bribery
• Diversity

and these are set out in the Directors' report on page 24 of the full Annual Report and Financial Statements.

Risk management
The Board carries out a regular review of the risk environment in which the Company operates. The principal risks and uncertainties of the Company as identified by the Board and how they are managed are as follows:

Risk	Possible consequence	Risk management
Economic risk	Changes in economic conditions, including, for example, interest rates, rates of inflation, industry conditions, competition, political and diplomatic events and other factors could substantially and adversely affect the Company's prospects in a number of ways.	To reduce this risk, in addition to investing equity in portfolio companies, the Company often invests in secured loan stock and has a policy of not normally permitting any external bank borrowings within portfolio companies. Additionally, the Manager has been rebalancing the sector exposure of the portfolio with a view to reducing reliance on consumer led sectors.
Investment risk	This is the risk of investment in poor quality assets which reduces the capital and income returns to shareholders, and negatively impacts on the Company's reputation. By nature, smaller unquoted businesses, such as those that qualify for venture capital trust purposes, are more fragile than larger, long established businesses.	To reduce this risk, the Board places reliance upon the skills and expertise of the Manager and its strong track record for investing in this segment of the market. In addition, the Manager operates a formal and structured investment process, which includes an Investment Committee, comprising investment professionals from the Manager and at least one external investment professional. The Manager also invites and takes account of comments from non-executive Directors of the Company on investments discussed at the Investment Committee meetings. Investments are actively and regularly monitored by the Manager (investment managers normally sit on portfolio company boards) and the Board receives detailed reports on each investment as part of the Manager's report at quarterly board meetings.
Valuation risk	The Company's investment valuation methodology is reliant on the accuracy and completeness of information that is issued by portfolio companies. In particular, the Directors may not be aware of or take into account certain events or circumstances which occur after the information issued by such companies is reported.	As described in note 2 of the Financial Statements, the unquoted equity investments, convertible loan stock and debt issued at a discount held by the Company are designated at fair value through profit or loss and valued in accordance with the International Private Equity and Venture Capital Valuation Guidelines. These guidelines set out recommendations, intended to represent current best practice on the valuation of venture capital investments. These investments are valued on the basis of forward looking estimates and judgments about the business itself, its market and the environment in which it operates, together with the state of the mergers and acquisitions market, stock market conditions and other factors. In making these judgments the valuation takes into account all known material facts up to the date of approval of the Financial Statements by the Board. All other unquoted loan stock is measured at amortised cost. The values of a number of investments are also underpinned by independent third party professional valuations.
VCT approval risk	The Company's current approval as a venture capital trust allows investors to take advantage of tax reliefs on initial investment and ongoing tax free capital gains and dividend income. Failure to meet the qualifying requirements could result in investors losing the tax relief on initial investment and loss of tax relief on any tax-free income or capital gains received. In addition, failure to meet the qualifying requirements could result in a loss of listing of the shares.	To reduce this risk, the Board has appointed the Manager, which has a team with significant experience in venture capital trust management, used to operating within the requirements of the venture capital trust legislation. In addition, to provide further formal reassurance, the Board has appointed Robertson Hare LLP (formerly PricewaterhouseCoopers LLP) as its taxation adviser. Robertson Hare LLP reports 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 H.M. Revenue & Customs.
Compliance risk	The Company is listed on The London Stock Exchange and is required to comply with the rules of the UK Listing Authority, as well as with the Companies Act, Accounting Standards and other legislation. Failure to comply with these regulations could result in a delisting of the Company's shares, or other penalties under the Companies Act or from financial reporting oversight bodies.	Board members and the Manager have experience of operating at senior levels within or advising quoted businesses. In addition, the Board and the Manager receive regular updates on new regulation from its auditor, lawyers and other professional bodies. The Company is subject to compliance checks via the Manager's Compliance Officer. The Manager reports monthly to its Board on any issues arising from compliance or regulation. These controls are also reviewed as part of the quarterly Manager Board meetings, and also as part of the review work undertaken by the Manager's Compliance Officer. The report on controls is evaluated by Internal Audit during its reports.
Internal control risk	Failures in key controls, within the Board or within the Manager's business, could put assets of the Company at risk or result in reduced or inaccurate information being passed to the Board or to shareholders.	The Audit Committee meets with the Manager's Internal Auditor, PKF Littlejohn LLP, when required, receiving a report regarding the last formal internal audit performed on the Manager, and providing the opportunity for the Audit Committee to ask specific and detailed questions. Robin Archibald, as Chairman of the Audit Committee, met with the internal audit Partner of PKF Littlejohn LLP in January 2015 to discuss the most recent Internal Audit Report on the Manager. The Manager has a comprehensive business continuity plan in place in the event that operational continuity is threatened. Further details regarding the Board's management and review of the Company's internal controls through the implementation of the Turnbull guidance are detailed on page 31 of the full Annual Report and Financial Statements.   Measures are in place to mitigate information risk in order to ensure the integrity, availability and confidentiality of information used within the business.
Reliance upon third parties risk	The Company is reliant upon the services of Albion Ventures LLP for the provision of investment management and administrative functions.	There are provisions within the management agreement for the change of Manager under certain circumstances (for further detail, see the Management agreement paragraph within this Strategic report). In addition, the Manager has demonstrated to the Board that there is no undue reliance placed upon any one individual within Albion Ventures LLP.
Financial risk	By its nature, as a venture capital trust, the Company is exposed to investment risk (which comprises investment price risk and cash flow interest rate risk), credit risk and liquidity risk.	The Company's policies for managing these risks and its financial instruments are outlined in full in note 20 to the Financial Statements.   All of the Company's income and expenditure is denominated in sterling and hence the Company has no foreign currency risk. The Company is financed through equity and does not have any borrowings. The Company does not use derivative financial instruments for speculative purposes.
Reputational risk	Arises from broader performance and ethical issues, including investment in businesses and sectors that are inconsistent with the values of the Board and the VCT or, the Boards of portfolio companies take actions which similarly are inconsistent with the values of the VCT.	The Board clearly articulates to the Investment Manager its broader aims and standards including those sectors which are consistent with the values of the Board. The Board regularly reviews the performance and investment strategy of the Investment Manager. The Investment Manager periodically attends Board meetings of the VCT's portfolio companies and across the portfolio receives periodic management information and is alert to potential threats to reputation.

This Strategic report of the Company for the year ended 31 December 2014 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.

On behalf of the Board,

Dr. N E Cross
Chairman
26 March 2015

Responsibility Statement

In preparing these Financial Statements for the year to 31 December 2014, the Directors of the Company, being Dr Neil Cross,  Robin Archibald, Mary Anne Cordeiro, Modwenna Rees-Mogg and Patrick Reeve, confirm that to the best of their knowledge: 

- summary financial information contained in this announcement and the full Annual Report and Financial Statements for the year ended 31 December 2014 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 and loss of the Company for the year ended 31 December 2014 as required by DTR 4.1.12.R;

 -the Chairman's statement and Strategic report include a fair review of the information required by DTR 4.2.7R (indication of important events during the year ended 31 December 2014 and description of principal risks and uncertainties that the Company faces); and

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

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

By order of the Board
Dr N E Cross
Chairman
26 March 2015

Income statement

		Year ended 31 December 2014			Year ended 31 December 2013
		Revenue	Capital	Total	Revenue	Capital	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments	3	-	1,573	1,573	-	3,787	3,787
Investment income	4	1,940	-	1,940	1,082	-	1,082
Investment management fees	5	(401)	(1,205)	(1,606)	(247)	(743)	(990)
Other expenses	6	(331)	-	(331)	(247)	-	(247)
Return on ordinary activities before tax		1,208	368	1,576	588	3,044	3,632
Tax (charge)/credit on ordinary activities	8	(238)	249	11	(124)	144	20
Return attributable to shareholders		970	617	1,587	464	3,188	3,652
Basic and diluted return per share (pence)*	11	1.25	0.79	2.04	1.00	6.90	7.90

* excluding treasury shares

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

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

All revenue and capital items in the above comparative statement derive from continuing operations of the Company up to 14 November 2013 and thereafter reflect the enlarged entity to 31 December 2013. This includes the assets and liabilities of Albion Income and Growth VCT PLC that were transferred to the Company on 15 November 2013.

There are no recognised gains or losses other than the results for the year disclosed above. Accordingly a statement of total recognised gains and losses is not required.

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

Balance sheet

		31 December 2014	31 December 2013
	Note	£'000	£'000
Fixed asset investments	12	63,520	61,637
Current assets
Trade and other debtors	14	518	350
Current asset investments	14	-	147
Cash at bank and in hand	18	1,449	3,226
		1,967	3,723
Creditors: amounts falling due within one year	15	(601)	(529)
Net current assets		1,366	3,194
Net assets		64,886	64,831
Capital and reserves
Called up share capital	16	840	799
Share premium		33,917	30,031
Capital redemption reserve		28	21
Unrealised capital reserve		(632)	(4,166)
Realised capital reserve		11,515	10,792
Other distributable reserve		19,218	27,354
Total equity shareholders' funds		64,886	64,831
Basic and diluted net asset value per share (pence)*	17	82.85	85.75

* excluding treasury shares
The accompanying notes form an integral part of these Financial Statements.

These Financial Statements were approved by the Board of Directors, and were authorised for issue on 26 March 2015 and were signed on its behalf by

Dr. N E Cross
Chairman
Company number: 04114310

Reconciliation of movements in shareholders' funds

	Called-up share capital	Share premium	Capital redemption reserve	Unrealised capital reserve *	Realised capital reserve*	Other distributable reserve*	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
As at 1 January 2014	799	30,031	21	(4,166)	10,792	27,354	64,831
Return/(loss) for the year	-	-	-	1,687	(1,070)	970	1,587
Transfer of previously unrealised losses on disposal of investments	-	-	-	1,846	(1,846)	-	-
Purchase of shares for cancellation	(7)	-	7	-	-	(563)	(563)
Purchase of shares for treasury	-	-	-	-	-	(1,028)	(1,028)
Issue of equity (net of costs)	48	3,886	-	-	-	-	3,934
Transfer from other distributable reserve to realised capital reserve***	-	-	-	-	3,639	(3,639)	-
Dividends paid	-	-	-	-	-	(3,876)	(3,876)
As at 31 December 2014	840	33,917	28	(632)	11,515	19,218	64,886
As at 1 January 2013	454	346	6	(6,678)	9,435	30,896	34,459
Return for the year	-	-	-	3,082	106	464	3,652
Transfer of previously unrealised gains on disposal of investments	-	-	-	(570)	570	-	-
Purchase of shares for cancellation	(15)	-	15	-	-	(1,209)	(1,209)
Issue of equity (net of costs)	24	2,058	-	-	-	-	2,082
Shares issued to acquire net assets of Albion Income & Growth VCT PLC (net of issue costs) **	336	27,627	-	-	-	-	27,963
Transfer from other distributable reserve to realised capital reserve***	-	-	-	-	681	(681)	-
Dividends paid	-	-	-	-	-	(2,116)	(2,116)
As at 31 December 2013	799	30,031	21	(4,166)	10,792	27,354	64,831

* Included within these reserves is an amount of £30,101,000 (2013: £33,980,000) which is considered distributable.
** The assets and liabilities transferred through the acquisition of Albion Income & Growth VCT PLC are shown in note 10. In addition, £106,000 of the merger costs attributable to Albion Technology & General VCT PLC has been deducted from the share premium account in so far as they relate to the issue of new shares.
*** A transfer of £3,639,000 representing gross realised losses on disposal of investments during the year ended 31 December 2014 (2013: £681,000 gross realised losses) has been made from the other distributable reserve to the realised capital reserve.

Cash flow statement

		Year ended 31 December 2014	Year ended 31 December 2013
	Note	£'000	£'000
Operating activities
Loan stock income received		1,852	1,159
Deposit interest received		24	30
Dividend income received		49	15
Investment management fees paid		(1,501)	(887)
Other cash payments		(255)	(210)
Net cash flow from operating activities	19	169	107
Taxation
UK corporation tax paid		-	(2)
Capital expenditure and financial investments
Purchase of fixed asset investments		(5,514)	(3,082)
Disposal of fixed asset investments		4,849	3,778
Disposal of current asset investments		262	-
Net cash flow from investing activities		(403)	696
Equity dividends paid (net of costs of issuing shares under the Dividend Reinvestment Scheme)		(3,500)	(1,912)
Net cash flow before financing		(3,734)	(1,111)
Financing
Issue of share capital (net of issue costs)		3,562	1,877
Purchase of own shares (including costs)	16	(1,591)	(1,209)
Cash acquired from Albion Income & Growth VCT PLC		-	2,273
Costs of Merger (paid on behalf of the Company and Albion Income & Growth VCT PLC)		(14)	(260)
Net cash flow from financing		1,957	2,681
Cash flow in the year	18	(1,777)	1,570

 Notes to the Financial Statements

1. Accounting convention
The Financial Statements have been prepared in accordance with the historical cost convention, modified to include the revaluation of investments, in accordance with applicable United Kingdom law and accounting standards and with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ("SORP") issued by The Association of Investment Companies ("AIC") in January 2009. Accounting policies have been applied consistently in current and prior periods.

2. Accounting policies
Fixed and current asset investments
Quoted and unquoted equity investments, debt issued at a discount and convertible bonds
In accordance with FRS 26 "Financial Instruments Recognition and Measurement", quoted and unquoted equity, debt issued at a discount and convertible bonds are designated as fair value through profit or loss ("FVTPL"). Investments listed on recognised exchanges are valued at the closing bid prices at the end of the accounting period. Unquoted investments' fair value is determined by the Directors in accordance with the International Private Equity and Venture Capital Valuation Guidelines (IPEVCV guidelines).

Fair value movements on equity investments and gains and losses arising on the disposal of investments are reflected in the capital column of the Income statement in accordance with the AIC SORP. Realised gains or losses on the sale of investments will be reflected in the realised capital reserve, and unrealised gains or losses arising from the revaluation of investments will be reflected in the unrealised capital reserve.

Warrants and unquoted equity derived instruments
Warrants and unquoted equity derived instruments are only valued if there is additional value to the Company in exercising or converting as at the balance sheet date. Otherwise these instruments are held at nil value. The valuation techniques used are those used for the underlying equity investment.

Unquoted loan stock
Unquoted loan stock (excluding convertible bonds and debt issued at a discount) are classified as loans and receivables as permitted by FRS 26 and measured at amortised cost using the Effective Interest Rate method less impairment. Movements in amortised cost relating to interest income are reflected in the revenue column of the Income statement, and hence are reflected in the other distributable reserve, and movements in respect of capital provisions are reflected in the capital column of the Income statement and are reflected in the realised capital reserve following sale, or in the unrealised capital reserve on movements arising from revaluations of the fair value of the security.

For all unquoted loan stock, whether fully performing, past due or impaired, the Board considers that the fair value is equal to or greater than the security value of these assets. For unquoted loan stock, the amount of the impairment is the difference between the asset's cost and the present value of estimated future cash flows, discounted at the original effective interest rate. The future cash flows are estimated based on the fair value of the security less the estimated selling costs.

Investments are recognised as financial assets on legal completion of the investment contract and are de-recognised on legal completion of the sale of an investment.

In accordance with the exemptions under FRS 9 "Associates and joint ventures", those undertakings in which the Company holds more than 20 per cent. of the equity as part of an investment portfolio are not accounted for using the equity method. In these circumstances the investment is accounted for according to FRS 26 "Financial instruments Recognition and Measurement" and measured at fair value through profit and loss.

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

Dividend income is not recognised as part of the fair value movement of an investment, but is recognised separately as investment income through the revenue reserve when a share becomes ex-dividend.

Loan stock accrued interest is recognised in the Balance sheet as part of the carrying value of the loans and receivables at the end of each reporting period.

Acquisition of assets and liabilities from Albion Income & Growth VCT PLC
On 15 November 2013 the Company acquired the assets and liabilities of Albion Income & Growth VCT PLC. The income and costs for the period up to 14 November 2013 reflect the activities of the Company before the acquisition and after that date reflect those of the Company as enlarged by the acquisition. Further information is contained in note 10 on page 49 of the full Annual Report and Financial Statements.

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

Unquoted loan stock and other preferred income
Fixed returns on non-equity shares and debt securities are recognised on a time apportionment basis using an effective interest rate over the life of the financial instrument. Income which is not capable of being received within a reasonable period of time is reflected in the capital value of the investment.

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

Investment management fees and 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 per cent. of management fees are allocated to the realised capital reserve. This is in line with the Board's expectation that over the long term 75 per cent. of the Company's investment returns will be in the form of capital gains; and

• expenses which are incidental to the purchase or disposal of an investment are charged through the realised capital reserve.

Performance incentive fee
In the event that a performance incentive fee crystallises, the fee will be allocated between other distributable and realised capital reserves based upon the proportion to which the calculation of the fee is attributable to revenue and capital returns.

Taxation
Taxation is applied on a current basis in accordance with FRS 16 "Current tax". Taxation associated with capital expenses is applied in accordance with the SORP. In accordance with FRS 19 "Deferred tax", deferred taxation is provided in full on timing differences that result in an obligation at the Balance sheet date to pay more tax or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the Financial Statements. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted.

Reserves
Share premium account
This reserve accounts for the difference between the price paid for shares and the nominal value of the shares, less issue costs and transfers to the other distributable reserve.

Capital redemption reserve
This reserve accounts for amounts by which the issued share capital is diminished through the repurchase and cancellation of the Company's own shares.

Unrealised capital reserve
Increases and decreases in the valuation of investments held at the year end against cost are included in this reserve.

Realised capital reserve
The following are disclosed in this reserve:

• gains and losses compared to cost on the realisation of investments;
• expenses, together with the related taxation effect, charged in accordance with the above policies; and
• dividends paid to equity holders where paid out by capital.

Other distributable reserve
The special reserve, treasury share reserve and the revenue reserve were combined in 2012 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
In accordance with FRS 21 "Events after the balance sheet date", dividends by the Company are accounted for in the period in which the dividend is paid or approved at the Annual General Meeting.

3. Gains on investments

	Year ended 31 December 2014 £'000	Year ended  31 December 2013 £'000
Unrealised gains on fixed asset investments held at fair value through profit or loss	1,816	2,405
Unrealised (impairments)/reversal of impairments on fixed asset investments held at amortised cost	(129)	649
Unrealised gains on fixed asset investments sub-total	1,687	3,054
Unrealised gains on current assets held at fair value through profit or loss	-	28
Unrealised gains sub-total	1,687	3,082
Realised (losses)/gains on fixed asset investments held at fair value through profit or loss	(420)	796
Realised gains/(losses) on fixed asset investments held at amortised cost	170	(91)
Realised (losses)/gains on fixed asset investments sub-total	(250)	705
Realised gains on current asset investments held at fair value through profit or loss	136	-
Realised (losses)/gains sub-total	(114)	705
	1,573	3,787

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

4. Investment income

	Year ended 31 December 2014 £'000	Year ended 31 December 2013 £'000
Income recognised on investments held at fair value through profit or loss
Dividend income	48	17
Income from convertible bonds and discounted debt	376	109
	424	126
Income recognised on investments held at amortised cost
Return on loan stock investments	1,495	926
Bank deposit interest	21	30
	1,516	956
	1,940	1,082

Interest income earned on impaired investments at 31 December 2014 amounted to £506,000 (2013: £328,000). These investments are all held at amortised cost.

5. Investment management fees

	Year ended 31 December 2014 £'000	Year ended 31 December 2013 £'000
Investment management fee charged to revenue	401	247
Investment management fee charged to capital	1,205	743
	1,606	990

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

During the year, services of a total value of £1,606,000 (2013: £990,000) were purchased by the Company from Albion Ventures LLP in respect of management fees. At the financial year end, the amount due to Albion Ventures LLP in respect of these services disclosed as accruals was £509,000 (2013: £403,000).

During the year, the Company was not charged by Albion Ventures LLP in respect of Patrick Reeve's services as a Director (2013: £18,000).  At the year end, the amount due to Albion Ventures LLP in respect of these services was nil (2013: £5,300).

Albion Ventures LLP, the Manager, acquired 1,012 Ordinary shares as a result of fractional entitlements arising from the conversion of C shares into Ordinary shares on 31 March 2011. In addition, Albion Ventures LLP acquired a further 7,490 Ordinary shares in the Company.

Albion Ventures LLP is, from time to time, eligible to receive transaction fees and Directors' fees from portfolio companies.  During the year ended 31 December 2014, fees of £274,000 attributable to the investments of the Company were received pursuant to these arrangements (2013: £142,000).

During the year the Company raised new funds through the Albion VCTs Top Up Offers 2013/2014 as described in note 16. The total cost of the issue of these shares was 3.0 per cent. (of the sums subscribed) as borne by the subscribers payable to Albion Ventures LLP to cover the cost of administrating the offer.

6. Other expenses

	Year ended 31 December 2014 £'000	Year ended 31 December 2013 £'000
Directors' fees (including NIC and VAT)	82	80
Other administrative expenses	131	32
Merger costs	-	80
Tax services	17	19
Auditor's remuneration for statutory audit services (excluding VAT)	25	36
Impairment of accrued interest	76	-
	331	247

Auditor's remuneration for statutory audit services for the year ended 31 December 2013 includes £17,000 in relation to auditor review of the investment valuations in advance of the merger of Albion Income & Growth VCT PLC with Albion Technology & General VCT PLC on 15 November 2013.

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

	Year ended 31 December 2014 £'000	Year ended 31 December 2013 £'000
Directors' fees	76	71
National insurance and/or VAT	6	9
	82	80

Further information regarding Directors' remuneration can be found in the Directors' remuneration report on pages 33 to 35 of the full Annual Report and Financial Statements.

8. Tax credit/(charge) on ordinary activities

	Year ended 31 December 2014 £'000	Year ended 31 December 2013 £'000
UK corporation tax charge in respect of current year	-	-
UK corporation tax credit in respect of prior years	11	20
	11	20

Factors affecting the tax charge:

	Year ended 31 December 2014 £'000	Year ended 31 December 2013 £'000
Return on ordinary activities before taxation	1,576	3,632
Tax charge on profit at the small companies rate of 20 per cent.	(315)	(726)
Factors affecting the charge:
Non-taxable gains	314	757
Income not taxable	10	3
Items not deductible	-	(16)
Excess management expenses	(9)	(18)
Adjustment in respect of prior years	11	20
	11	20

The tax charge for the year shown in the Income statement is lower than the small companies rate of corporation tax in the UK of 20 per cent. (2013: 20 per cent.). The differences are explained above.

Consortium relief is recognised in the accounts in the period in which the claim is submitted to HMRC and is shown as tax in respect of prior year.

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 £137,000 (2013: £94,000) that are available for offset against future profits. A deferred tax asset of £27,000 (2013: £18,800) 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 31 December 2014 £'000	Year ended 31 December 2013 £'000
Ordinary shares' dividend of 2.50p per share paid on 30 April 2013	-	1,061
Ordinary shares' dividend of 2.50p per share paid on 31 October 2013	-	1,055
Ordinary shares' dividend of 1.25p per share paid on 31 January 2014	945	-
Ordinary shares' dividend of 1.25p per share paid on 30 April 2014	977	-
Ordinary shares' dividend of 1.25p per share paid on 30 June 2014	977	-
Ordinary shares' dividend of 1.25p per share paid on 31 October 2014	977	-
	3,876	2,116

In addition to the dividends summarised above, the Board declared a first dividend for the year ending 31 December 2015 of 1.25 pence per Ordinary share.  This dividend was paid on 9 February 2015 to shareholders on the register as at 16 January 2015. The total dividend was £1,001,000. The Board has declared a second dividend for the year ending 31 December 2015 of 1.25 pence per Ordinary share. The dividend will be paid on 30 April 2015 to shareholders on the register as at 10 April 2015. The total dividend will be approximately £1,003,000.

10. Acquisition of the assets and liabilities of Albion Income & Growth VCT PLC

On 15 November 2013, the following assets and liabilities of Albion Income & Growth VCT PLC ("Income & Growth") were transferred to the Company in exchange for the issue to Income & Growth shareholders of 33,664,049 shares in the Company, at an issue price of 83.38 pence per share:

		£'000
Fixed asset investments		25,948
Debtors		117
Cash at bank and in hand		2,273
Current asset investments		54
Creditors		(163)
Merger costs		(154)
		28,075

On 15 November 2013, Income & Growth was placed into members' voluntary liquidation pursuant to a scheme of reconstruction under section 110 of the Insolvency Act 1986.

11. Basic and diluted return per share

	Year ended 31 December 2014			Year ended 31 December 2013
	Revenue	Capital	Total	Revenue	Capital	Total
Return attributable to equity shares (£'000)	970	617	1,587	464	3,188	3,652
Weighted average shares in issue (excluding treasury shares)		77,721,693		46,363,621
Return attributable per equity share (pence)	1.25	0.79	2.04	1.00	6.90	7.90

The weighted average number of shares is calculated excluding treasury shares of 5,665,070 (2013: 4,341,070).

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

12. Fixed asset investments

	31 December 2014 £'000	31 December 2013 £'000
Investments held at fair value through profit or loss
Unquoted equity and preference shares	26,088	25,093
Quoted equity	2,438	-
Discounted debt and convertible loan stock	11,475	10,609
	40,001	35,702
Investments held at amortised cost
Unquoted loan stock	23,519	25,935
	63,520	61,637
	31 December 2014 £'000	31 December 2013 £'000
Opening valuation	61,637	33,055
Purchases at cost	5,628	3,001
Transfer on Merger	-	25,948
Disposal proceeds	(5,126)	(4,001)
Realised (losses)/gains	(250)	705
Movement in loan stock accrued income	(57)	(125)
Unrealised gains	1,687	3,054
Closing valuation	63,520	61,637
Movement in loan stock accrued income
Opening accumulated movement in loan stock accrued income	151	276
Movement in loan stock accrued income	(57)	(125)
Closing accumulated movement in loan stock accrued income	94	151
Movement in unrealised losses
Opening accumulated unrealised losses	(4,306)	(6,790)
Transfer of previously unrealised gains/(losses) to realised reserve on disposal of investments	1,939	(570)
Movement in unrealised gains	1,687	3,054
Closing accumulated unrealised losses	(680)	(4,306)
Historic cost basis
Opening book cost	65,793	39,569
Purchases at cost	5,628	3,001
Transfer on Merger	-	25,948
Sales at cost	(7,315)	(2,725)
Closing book cost	64,106	65,793

Purchases and disposals detailed above do not agree to the Cash flow statement due to restructuring of investments, conversion of convertible loan stock and settlement debtors and creditors.

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

Unquoted equity investments and convertible and discounted debt are valued at fair value in accordance with the IPEVCV guidelines as follows:

Valuation methodology	31 December 2014 £'000	31 December 2013 £'000
Revenue multiple	11,285	11,238
Cost and price of recent investment (reviewed for impairment)	8,828	6,501
Earnings multiple	7,832	6,266
Net asset value supported by third party or desktop valuation	7,237	8,636
Agreed offer or agreed new investment price	2,381	3,061
	37,563	35,702

Fair value investments had the following movements between valuation methodologies between 31 December 2013 and 31 December 2014:

Change in valuation methodology (2013 to 2014)	Value as at 31 December 2014 £'000	Explanatory note
Net asset value supported by third party valuation to agreed offer price	898	Agreed offer price
Cost to revenue multiple	180	More recent information available
Cost to price of recent investment	85	Agreed new investment price
Cost to net asset value supported by third party valuation	64	Third party valuation has recently taken place

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 December 2012 IPEVCV Guidelines. The Directors believe that, within these parameters, there are no other possible methods of valuation which would be reasonable as at 31 December 2014.

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

Fair value hierarchy	Definition
Level 1	Unadjusted quoted (bid) prices applied
Level 2	Inputs to 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 AIM investments are valued according to Level 1 valuation methods. Unquoted equity, preference shares, convertible loan stock and debt issued at a discount are all valued according to Level 3 valuation methods.

Investments held at fair value through profit or loss (Level 3) had the following movements in the year to 31 December 2014:

	31 December 2014			31 December 2013
	Equity	Convertible and discounted bonds	Total	Equity	Convertible and discounted bonds	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Opening balance	25,093	10,609	35,702	11,624	5,257	16,881
Additions	1,185	3,250	4,435	2,125	2,104	4,229
Transfer on Merger	-	-	-	9,849	4,261	14,110
Disposals	(2,528)	(222)	(2,750)	(1,023)	(1,705)	(2,728)
Transfer to Level 1*	(3,014)	(839)	(3,853)
Accrued loan stock interest	-	35	35	-	(36)	(36)
Realised gains/(losses)	1,077	(1,497)	(420)	234	562	796
Debt/equity swap and restructurings	1,421	(240)	1,181	135	(90)	45
Unrealised gains	2,852	379	3,231	2,149	256	2,405
Closing balance	26,086	11,475	37,561	25,093	10,609	35,702

* During the year Mi-Pay Group plc was quoted on AiM and transferred to Level 1 fair value hierarchy

FRS 29 requires the Directors to consider the impact of changing one or more of the inputs used as part of the valuation process to reasonable possible alternative assumptions.  The valuation methodology applied to 49 per cent. of the equity, discounted debt and convertible bond investments (by valuation) is based on third-party independent evidence, recent investment price and agreed offer price.  The Directors believe that changes to reasonable possible alternative assumptions for the valuation of the portfolio could result in an increase in the valuation of investments by £1,553,000 or a decrease in the valuation of investments by £1,694,000.

13. 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. The size and structure of the companies with unquoted securities may result in certain holdings in the portfolio representing a participating interest without there being any partnership, joint venture or management consortium agreement. The Company has interests of greater than 20 per cent. of the nominal value of any class of the allotted shares in the portfolio companies as at 31 December 2014 as described below:

Company	Country of incorporation	Principal activity	% class and share type	% total voting rights
Albion Investment Properties Limited	Great Britain	Owner of residential property	22.6% A Ordinary	22.6%
AMS Sciences Limited	Great Britain	Provides metabolism data	23.9% Ordinary	23.9%
Blackbay Limited	Great Britain	Mobile data solutions	67.1% A Ordinary	23.5%
Bravo Inns Limited	Great Britain	Own and operates pubs	28.8% Ordinary	28.8%
Chichester Holdings Limited	Great Britain	Drinks distribution to the travel sector	37.6% C Ordinary	37.6%
Kensington Health Clubs Limited	Great Britain	Owns and operates a health club	27.6% Ordinary	27.6%
Mi-Pay Group PLC	Great Britain	Mobile payment processing	22.4% Ordinary	22.4%
Premier Leisure (Suffolk) Limited	Great Britain	Owner of commercial property	25.8% Ordinary	25.8%
Rostima Holdings Limited	Great Britain	Software company for marine and aviation industries	47.4% Ordinary	47.4%
The Charnwood Pub Company Limited	Great Britain	Own and operates pubs	22.5% Ordinary	22.5%
The Q Garden Company Limited	Great Britain	Garden centre operator	33.4% A Ordinary	33.4%
The Weybridge Club Limited	Great Britain	Owns and operates a health club	25.2% Ordinary	25.2%

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

14. Current assets

Trade and other debtors	31 December 2014	31 December 2013
	£'000	£'000
Prepayments and accrued income	21	17
Other debtors	497	333
	518	350

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

	31 December 2014	31 December 2013
Current asset investments	£'000	£'000
Contingent future receipts from the disposal of fixed asset investments	-	147

The fair value hierarchy applied to contingent future receipts on disposal of fixed asset investments is Level 3.

15. Creditors: amounts falling due within one year

	31 December 2014	31 December 2013
	£'000	£'000
Trade creditors	119	19
Accruals and deferred income	482	483
UK corporation tax payable	-	11
Other creditors	-	16
	601	529

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

16. Called up share capital

	31 December 2014 £'000	31 December 2013 £'000
Allotted, called up and fully paid
83,983,306 Ordinary shares of 1 penny each (2013: 79,945,976 Ordinary shares)	840	799

Voting rights
78,318,236 Ordinary shares of 1 penny each (net of treasury shares) (2013: 75,604,906 Ordinary shares (net of treasury shares)).

During the period the Company purchased 702,000 Ordinary shares for cancellation (2013: 1,591,723) at a cost of £563,000 including stamp duty (2013: £1,209,000), representing 0.8 per cent. of its issued share capital as at 31 December 2014. The shares purchased for cancellation were funded by the other distributable reserve.

The Company purchased 1,324,000 Ordinary shares (2013: nil) to be held in treasury at a cost of £1,028,000 including stamp duty (2013: £nil) during the period to 31 December 2014. The Company did not cancel any shares from treasury during the period to 31 December 2014 (2013: nil) leaving a balance of 5,665,070 Ordinary shares in treasury (2013: 4,341,070) which represents 6.7 per cent. of the issued share capital as at 31 December 2014.

Under the terms of the dividend reinvestment scheme, the following Ordinary shares of nominal value 1 penny each were allotted during the year:

Date of allotment	Number of shares allotted	Aggregate nominal value of shares (£'000)	Issue price (pence per share)	Net consideration received (£'000)	Opening market price on allotment date (pence per share)
31 January 2014	110,409	1	82.13	74	77.50
30 April 2014	122,573	1	83.25	99	80.00
30 June 2014	123,187	1	81.05	97	80.00
31 October 2014	131,207	1	80.76	101	73.25
	487,376			371

During the period to 31 December 2014, the Company issued the following New Ordinary shares of nominal value 1 penny each under the Albion VCTs Top Up Offers 2013/2014 and Albion VCTs Prospectus Top Up Offers 2013/2014:

Date of allotment	Number of shares allotted	Aggregate nominal value of shares (£'000)	Issue price (pence per share)	Net consideration received (£'000)	Opening market price on allotment date (pence per share)
31 January 2014	605,375	6	84.60	499	77.50
31 January 2014	495,432	5	84.10	409	77.50
31 January 2014	18,007	-	83.30	15	77.50
5 April 2014 (Prospectus)	1,368,312	14	88.50	1,175	80.00
5 April 2014	493,954	5	88.50	424	80.00
5 April 2014	15,405	-	88.00	13	80.00
5 April 2014	14,216	-	87.60	12	80.00
4 July 2014 (Prospectus)	339,509	3	83.70	276	80.00
4 July 2014	26,825	-	83.70	22	80.00
4 July 2014	4,806	-	83.20	4	80.00
4 July 2014	21,032	-	82.80	17	80.00
30 September 2014 (Prospectus)	849,081	8	84.60	696	77.00
	4,251,954			3,562

17. Basic and diluted net asset value per share

	31 December 2014	31 December 2013
	(pence per share)	(pence per share)
Basic and diluted net asset value per Ordinary share	82.85	85.75

The  basic and diluted net asset values per share at the year end are calculated in accordance with the Articles of Association and are based upon total shares in issue (less treasury shares) of 78,318,236 Ordinary shares (2013: 75,604,906 Ordinary shares) at 31 December 2014.

18. Analysis of changes in cash during the year

	Year ended 31 December 2014 £'000	Year ended 31 December 2013 £'000
Opening cash balances	3,226	1,656
Net cash flow	(1,777)	1,570
Closing cash balances	1,449	3,226

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

	Year ended 31 December 2014 £'000	Year ended 31 December 2013 £'000
Revenue return on ordinary activities before taxation	1,208	588
Investment management fee charged to capital	(1,205)	(743)
Movement in accrued amortised loan stock interest	57	125
Decrease/(increase) in debtors	1	(1)
Increase in creditors	108	138
Net cash flow from operating activities	169	107

20. Capital and financial instruments risk management
The Company's capital comprises Ordinary shares as described in note 16. The Company is permitted to buy back its own shares for cancellation or treasury purposes and this is described in more detail in the Chairman's statement.

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

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

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

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

Investment risk
As a venture capital trust, it is the Company's specific nature to evaluate and control the investment risk of its portfolio in unquoted investments, details of which are shown on pages 18 to 20 of the full Annual Report and Financial Statements. Investment risk is the exposure of the Company to the revaluation and devaluation of investments. The main driver of investment risk is the operational and financial performance of the portfolio company and the dynamics of market quoted comparators. The Manager receives management accounts from portfolio companies, and members of the investment management team often sit on the boards of unquoted portfolio companies; this enables the close identification, monitoring and management of investment risk.

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

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

The maximum investment risk as at the Balance sheet date is the value of the fixed and current asset investment portfolio which is £63,520,000 (2013: £61,784,000). Fixed and current asset investments form 98 per cent. of the net asset value as at 31 December 2014 (2013: 95 per cent.).

More details regarding the classification of fixed and current asset investments are shown in notes 12 and 14.

Investment price risk
Investment price risk is the risk that the fair value of future investment cash flows will fluctuate due to factors specific to an investment instrument or to a market in similar instruments. To mitigate the investment price risk for the Company as a whole, the strategy of the Company is to invest in a broad spread of industries with up to two-thirds of the unquoted investments comprising debt securities, which, owing to the structure of their yield and the fact that they are usually secured, have a lower level of price volatility than equity. Details of the industries in which investments have been made are contained in the Portfolio of investments section on pages 18 to 20 of the full Annual Report and Financial Statements and in the Strategic report.

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

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

The sensitivity of a 10 per cent. increase or decrease in the valuation of the fixed and current asset investments (keeping all other variables constant) would increase or decrease the net asset value and return for the year by £6,352,000 (2013: £6,178,000).

Interest rate risk
It is the Company's policy to accept a degree of interest rate risk on its financial assets through the effect of interest rate changes. On the basis of the Company's analysis, it is estimated that a rise of one percentage point in all interest rates would have increased total return before tax for the year by approximately £14,000 (2013: £21,000).  Furthermore, it is considered that a fall of interest rates below current levels during the year would have been very unlikely.

The weighted average effective interest rate applied to the Company's unquoted loan stock during the year was approximately 5.1 per cent. (2013: 4.5 per cent.). The weighted average period to maturity for the unquoted loan stock is approximately 3.4 years (2013: 2.7 years).

The Company's financial assets and liabilities as at 31 December 2014, all denominated in pounds sterling, consist of the following:

	31 December 2014				31 December 2013
	Fixed rate £'000	Floating rate £'000	Non-interest bearing £'000	Total £'000	Fixed rate £'000	Floating rate £'000	Non-interest bearing £'000	Total £'000
Unquoted equity	-	-	26,088	26,088	-	-	25,093	25,093
Quoted equity	-	-	2,438	2,438	-	-	-	-
Unquoted loan stock*	31,543	-	3,451	34,994	31,532	-	5,012	36,544
Debtors**	-	-	499	499	-	-	337	337
Current asset investments	-	-	-	-	-	-	147	147
Current liabilities**	-	-	(601)	(601)	-	-	(518)	(518)
Cash	-	1,449	-	1,449	589	2,637	-	3,226
Total	31,543	1,449	31,875	64,867	32,121	2,637	30,071	64,829

*Including convertible loan stock and debt issued at a discount.
**The debtors and current liabilities do not reconcile to the balance sheet as prepayments and tax payable are not included in the above table.

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

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

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

The Company's total gross credit risk as at 31 December 2014 was limited to £34,994,000 (2013: £36,544,000) of unquoted loan stock instruments (all are secured on the assets of the portfolio company), £1,449,000 (2013: £3,226,000) cash deposits with banks and £497,000 (2013: £333,000) of other debtors.

As at the balance sheet date, the cash held by the Company is held with Lloyds Bank plc, Scottish Widows Bank plc (part of Lloyds Banking Group), Barclays Bank plc and National Westminster Bank plc. Credit risk on cash transactions is 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 and floating rate note exposure to a maximum of 20 per cent. of net asset value for any one counterparty.

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

The cost, impairment and carrying value of impaired loan stocks in the Ordinary share portfolio held at amortised cost at 31 December 2014 and 31 December 2013 are as follows:

	31 December 2014			31 December 2013
	Cost £'000	Impairment £'000	Carrying value £'000	Cost £'000	Impairment £'000	Carrying value £'000
Impaired loan stock	14,988	(3,091)	11,897	12,766	(2,860)	9,906

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

Liquidity risk
Liquid assets are held as cash on current account, on deposit, in bonds or short term money market account. Under the terms of its Articles, the Company has the ability to borrow up to 10 per cent. of its adjusted capital and reserves of the latest published audited Balance sheet, which amounts to £6,288,000 as at 31 December 2014 (2013: £6,293,000).

The Company has no committed borrowing facilities as at 31 December 2014 (2013: £nil). The Company had cash balances of £1,449,000 (2013: £3,226,000). 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 £601,000 as at 31 December 2014 (2013: £529,000).

The carrying value of loan stock investments at 31 December 2014, as analysed by expected maturity dates was as follows:

Redemption date	Fully performing £'000	Impaired £'000	Past due £'000	Total £'000
Less than one year	9,373	10,226	168	19,767
1-2 years	3,269	1,646	-	4,915
2-3 years	1,144	-	-	1,144
3-5 years	1,549	25	2,318	3,892
+5 years	3,826	-	1,450	5,276
Total	19,161	11,897	3,936	34,994

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

Loan stock categorised as past due includes:

• Loan stock with a carrying value of £3,122,000 yielding an average 2.4 per cent. which has interest past due by less than 12 months.
• Loan stock with a carrying value of £646,000 had loan stock interest past due of greater than 12 months but less than 2 years.
• Loan stock with a carrying value of £168,000 had loan stock interest past due of more than 2 years.

The carrying value of loan stock investments at 31 December 2013, as analysed by expected maturity dates, was as follows:

Redemption date	Fully performing loan stock £'000	Impaired loan stock £'000	Past due loan stock £'000	Total £'000
Less than one year	5,325	7,828	3,756	16,909
1-2 years	3,866	1,531	2,148	7,545
2-3 years	3,338	260	740	4,338
3-5 years	4,133	287	40	4,460
+5 years	2,534	-	758	3,292
Total	19,196	9,906	7,442	36,544

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

Fair values of financial assets and financial liabilities
All the Company's financial assets and liabilities as at 31 December 2014 are stated at fair value as determined by the Directors, with the exception of loans and receivables included within investments, debtors and creditors and cash which are carried at amortised cost, in accordance with FRS 26. The Directors believe that the current carrying value of loan stock is not materially different to the fair value. There are no financial liabilities other than creditors. The Company's financial liabilities are all non-interest bearing. It is the Directors' opinion that the book value of the financial liabilities is not materially different to the fair value and all are payable within one year.

21. Commitments and contingencies
The Company had the following financial commitments in respect of investments:
       

• Cisiv Limited; £97,000
• Proveca Limited; £56,000
• Green Highland Renewables (Ledgowan) Limited; £37,000
• Chonais Holdings Limited; £8,000

       
       
22. Post balance sheet events
Since 31 December 2014 the Company has had the following post balance sheet events:

• Proceeds of £4,085,000 from the disposal of Orchard Portman Group (Taunton Hospital Limited);
• Proceeds of £1,050,000 from the repayment of loan stock by Infinite Ventures (Goathill) Limited;
• Investment of £1,716,000 in Radnor House School;
• Investment of £311,000 in Mi-Pay Group PLC;
• Investment of £54,000 in Cisiv Limited;
• Investment of  £54,000 in Silent Herdsman Holdings Limited;
• Investment of £50,000 in Exco Intouch Limited;
• Investment of £43,000 in Regenerco Renewable Energy Limited;
• Investment of £41,000 in Abcodia Limited;
• Investment of  £37,000 in Green Highland Renewables (Ledgowan) Limited; and
• Investment of £13,000 in AVESI Limited

             

On 17 November 2014 the Company announced the publication of a prospectus in relation to an offer for subscription for new Ordinary shares. A Securities Note, which forms part of the prospectus, has been sent to shareholders.

A copy of the prospectus may be obtained from www.albion-ventures.co.uk.

The following Ordinary shares of nominal value 1 penny each were allotted under the Offers after 31 December 2014:

Date of allotment	Number of shares allotted	Aggregate nominal value of shares (£'000)	Issue price (pence per share)	Net consideration received (£'000)	Opening market price on allotment date (pence per share)
30 January 2015	565,178	6	81.80	451	77.00
30 January 2015	1,185,345	12	81.40	945	77.00
	1,750,523			1,396

Under the terms of the dividend reinvestment scheme, the following Ordinary shares of nominal value 1 penny each were allotted after 31 December 2014:

Date of allotment	Number of shares allotted	Aggregate nominal value of shares (£'000)	Issue price (pence per share)	Net consideration received (£'000)	Opening market price on allotment date (pence per share)
9 February 2015	134,362	1	79.69	102	77.00

             
23. Related Party Transactions

Other than transactions with the Manager as disclosed in note 5, there are no other related party transactions or balances requiring disclosure.

24. Other Information

The information set out in this announcement does not constitute the Company's statutory accounts within the terms of section 434 of the Companies Act 2006 for the years ended 31 December 2014 and 31 December 2013, 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 December 2014, which will be, delivered to the Registrar of Companies. The Auditor reported on those accounts; the reports were unqualified and did not contain a statement under s498 (2) or (3) of the Companies Act 2006.

The Company's Annual General Meeting will be held at The City of London Club, 19 Old Broad Street, London, EC2N 1DS on 17 June 2015 at 11.00am.

25. Publication

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

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