Crown Place VCT PLC

LEI number: 213800SYIQPA3L3T1Q68

As required by the UK Listing Authority's Disclosure and Transparency Rules 4.1 and 6.3, Crown Place VCT PLC today makes public its information relating to the Annual Report and Financial Statements for the year ended 30 June 2017.

This announcement was approved for release by the Board of Directors on 26 September 2017.

This announcement has not been audited.

You will shortly be able to view the Annual Report and Financial Statements for the year ended 30 June 2017 (which have been audited) at: www.albion.capital/funds/CRWN.The Annual Report and Financial Statements for the year ended 30 June 2017 will be available as a PDF document via a link 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

The investment objective and policy of the Company* is to achieve long term capital and income growth principally through investment in smaller unquoted companies in the United Kingdom.

In pursuing this policy, the Manager aims to build a portfolio which concentrates both on more mature or asset-based investments and higher risk companies with greater growth prospects.

In this way, 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 it represents a significantly higher proportion of total assets prior to a realisation opportunity being available.

Under its Articles of Association, the Company's maximum exposure in relation to gearing is restricted to the amount of its adjusted share capital and reserves.

*The 'Company' is Crown Place VCT PLC. The 'Group' is the Company together with its subsidiary CP1 VCT PLC.
  
Financial calendar

Record date for first dividend	3  November 2017
Annual General Meeting	11.00 am on 8 November 2017
Payment of first dividend	30 November 2017
Announcement of half-yearly results for the six months ended 31 December 2017	February 2018
Payment of second dividend (subject to Board approval)	29 March 2018

Financial highlights

31.0p	Net asset value per share as at 30 June 2017
4.0p	Total return per share to shareholders for the year ended 30 June 2017
14.0%	Increase in total return on opening net asset value
2.0p	Total tax-free dividends per share paid during the year ended 30 June 2017
6.9%	Tax-free dividend yield on share price (total dividends paid in the year/share price as at 30 June 2017)

	30 June 2017	30 June 2016
	pence per share	pence per share
Opening net asset value	28.94	30.97
Revenue return	0.41	0.59
Capital return/(loss)	3.63	(0.18)
Total return	4.04	0.41
Dividends paid	(2.00)	(2.50)
Impact from buy-backs and issue of share capital	-	0.06
Closing net asset value	30.98	28.94

Shareholder return and shareholder value

			Crown Place VCT PLC*
			pence per share
Shareholder return from launch to April 2005 (date that Albion Capital was appointed investment manager):
Total dividends paid to 6 April 2005 (i)			24.93
Decrease in net asset value			(56.60)
Total shareholder return to 6 April 2005			(31.67)
Shareholder return from April 2005 to 30 June 2017:
Total dividends paid			28.80
Decrease in net asset value			(12.42)
Total shareholder return from April 2005 to 30 June 2017			16.38
Shareholder value since launch:
Total dividends paid to 30 June 2017 (i)			53.73
Net asset value as at 30 June 2017			30.98
Total shareholder value as at 30 June 2017			84.71
Current annual dividend objective			2.00
Dividend yield on net asset value as at 30 June 2017			6.5%

Notes

1. Prior to 6 April 1999, venture capital trusts were able to add 20 per cent. to dividends and figures for the period up until 6 April 1999 are included at the gross equivalent rate actually paid to shareholders.

*           Formerly Murray VCT 3 PLC

The above financial summary is for the Company, Crown Place VCT PLC only. Details of the financial performance of CP1 VCT PLC (previously Murray VCT PLC) and CP2 VCT PLC (previously Murray VCT 2 PLC), which were merged into the Company, can be found on page 67 of the full Annual Report and Financial Statements.

Total shareholder value since launch:		30 June 2017 (pence per share)
Total dividends paid during:
the period from launch to 6 April 2005 (prior to change of manager)		24.93
the year ended 28 February 2006	1.00
the period ended 30 June 2007	3.30
the year ended 30 June 2008	2.50
the year ended 30 June 2009	2.50
the year ended 30 June 2010	2.50
the year ended 30 June 2011	2.50
the year ended 30 June 2012	2.50
the year ended 30 June 2013	2.50
the year ended 30 June 2014	2.50
the year ended 30 June 2015	2.50
the year ended 30 June 2016	2.50
the year ended 30 June 2017	2.00
Total dividends paid to 30 June 2017		53.73
Net asset value as at 30 June 2017		30.98
Total shareholder value as at 30 June 2017		84.71

In addition to the dividends paid above, the Board has declared a first dividend for the year ending 30 June 2018, of 1 penny per Crown Place VCT PLC share, payable on 30 November 2017 to shareholders on the register on 3 November 2017.

Chairman's statement

Introduction
Crown Place VCT PLC achieved a total return of 4.04 pence per share (14.0 per cent. on opening NAV) for the year ended 30 June 2017, extending its track record of delivering a positive return to shareholders. The asset based portfolio performed particularly well, with a number of growth investments also contributing to the overall uplift in returns. The Company also saw significant interest from investors, with the Top Up Offer raising the full subscription amount of £6.0 million, ahead of its planned closing date.

Results and dividends
As at 30 June 2017, the net asset value was £45.6 million or 30.98 pence per share compared to £37.4 million or 28.94 pence per share at 30 June 2016. The ongoing charges ratio for the year reduced to 2.4 per cent. (2016: 2.5 per cent.).

During the year, the Company's realised and unrealised capital gains amounted to £5,435,000 compared to £238,000 in the previous year. Notable increases in valuations include Radnor House School, which has continued to trade strongly; Shinfield Lodge Care, Active Lives Care and Ryefield Court Care, the three luxury care homes near Reading, Oxford and Hillingdon, which are making good progress to maturity; Chonais River Hydro, which benefitted from increased valuations for infrastructure assets; and Proveca, a developer of paediatric drugs, which gained its first regulatory approval and saw strong interest from external investors. These uplifts were further supplemented by the successful exit of Exco InTouch, the digital health business, which was sold for around three times original cost, and the sales of Blackbay and Masters Pharmaceuticals, both at valuations above their costs.

These positive developments in the investment portfolio were partially offset by reductions in valuations in DySIS Medical, Cisiv and Abcodia and in respect of the Company's quoted investment, Mi-Pay Group. Further details of the Company's financial performance are given in the Strategic report below.

The Company paid dividends totalling 2.0 pence per share during the financial year, representing a dividend yield on NAV of 6.5 per cent. (2016: 6.9 per cent.). The Board is proposing a first dividend for the year to 30 June 2018 of 1 penny per share, payable on 30 November 2017 to shareholders on the register on 3 November 2017. Shareholders will recall that it was announced last year that the dividend had not been covered by the total return for a number of years. This year's strong result covers the dividend twice over, though the Board will require further substantial increases in NAV, before it can reconsider increasing the dividend.

The Company's balance sheet was strengthened in the year by a successful Prospectus Top-Up Offer which raised £6.0 million (£5.8 million, net of costs). The Company intends to deploy these funds into new investment opportunities. 

Investment performance
We had four principal exits in 2017: Exco InTouch, AMS Sciences, Masters Pharmaceuticals and Blackbay, which in total, returned disposal proceeds of £1.9 million.  The sale of Exco InTouch achieved a return, including interest, of 2.8 times cost; AMS Sciences delivered 1.6 times our holding value but an overall loss, with further sums due by way of deferred consideration;  Masters Pharmaceuticals achieved a return, including interest, of 1.6 times cost;  and Blackbay achieved a return, including interest, of 2.3 times cost. Overall, the Company achieved disposal proceeds, including repayments of loan stock by portfolio companies, of £2.4 million compared to £2.9 million in the previous year. Subsequent to the year end, The Crown Hotel Harrogate was sold. The Company's expected share of net proceeds is approximately £2.0 million, compared to our holding value at 30 June 2017 of £1.9 million. Further information on realisations can be found on page 20 of the full Annual Report and Financial Statements.

During the year, a strong investment pipeline allowed new investments totalling £1.7 million to be made namely; £550,000 in MPP Global Solutions, which provides a cloud based subscription platform for publishers; £400,000 in Convertr Media, a company that specialises in digital lead generation software; £220,000 in Secured by Design, an international automotive consultancy; £190,000 in Quantexa, which offers a predicative analytics platform with a focus on cyber security for enterprises; £186,000 in G.Network Communications, which provides fibre optic broadband in Central London; £108,000 in Oviva, a digital health consultancy; and £80,000 in Locum's Nest, which has developed a digital platform to allow the NHS to manage their requirements for locum doctors more efficiently. In addition, a total of £1.2 million was invested in existing portfolio companies, including a combined £420,000 in Active Lives Care, Ryefield Court Care and Shinfield Lodge Care as the care homes opened up for business; £240,000 in Proveca, which develops paediatric drugs; and £233,000 in DySIS Medical, which develops medical devices for the detection of cancer.

Companies in the portfolio that performed particularly well during the year included Radnor House School, where the Twickenham school is operating at close to full capacity and the Sevenoaks school saw a significant increase in the student roll, as the turnaround programme started to deliver results; the three care homes, Active Lives Care, Ryefield Court Care and Shinfield Lodge Care have seen strong valuation uplifts, as they progress to maturity; Proveca, which develops paediatric drugs, after it gained its first regulatory approval; and Egress Software Technologies, whose encrypted email and document collaboration services achieved significant revenue growth. The renewable energy investments continue to perform to plan and provide a good yield to the Company despite falling global energy prices, with Chonais River Hydro delivering a particularly strong valuation uplift during the year.

The largest negative valuation movements over the year were mainly in the growth portfolio and included DySIS Medical and Abcodia, both of which required further finance during the year as they continue to develop their businesses. There was also a decline in the value of Cisiv and the share price of the AIM quoted Mi-Pay Group fell during the year.

Risks and uncertainties
The outlook for the UK and global economies continues to be the key risk affecting the Company. The withdrawal of the UK from the European Union is likely to have an impact on the Company and its investments, although it is difficult to quantify it at this time. Overall investment risk, however, is mitigated through a variety of processes, including our policies of first ensuring that the Company has a first charge over portfolio companies' assets wherever possible, and second of aiming to achieve balance in the portfolio through the inclusion of sectors that are less exposed to the business consumer cycles. In addition, the current consultation entitled "Financing growth in innovative firms" may result in changes to VCT legislation in the next Budget, which may limit the category of business in which the Company currently invests.

A detailed review of risk management is set out in the Strategic report below.

Albion VCTs Top Up Offers
In November 2016, the Company announced the launch of the Albion VCTs Prospectus Top Up Offers 2016/2017 and was pleased to announce on 22 February 2017 that it had reached its £6 million limit under its Offer which was fully subscribed and closed, as shown in note 14. The proceeds of the Offer will be used to provide further resources at a time when a number of attractive new investment opportunities are being seen.

On 6 September 2017 the Company announced the publication of a prospectus in relation to an offer for subscription for new Ordinary shares. The Company is aiming to raise circa £6 million out of a target of £32 million in aggregate that the Albion VCTs are seeking to raise. A Securities Note, which forms part of the Prospectus, was sent out to shareholders the week commencing 18 September 2017.

Dividend re-investment scheme
During the year, the Company raised £429,000 from the dividend re-investment scheme. Through the scheme, shareholders may elect to reinvest the whole of the dividend received by subscribing for new shares in the Company. Under current tax rules, shareholders re-investing their dividends will be eligible for the income and capital gains tax advantages available to investors subscribing for new shares in venture capital trusts and will be able to increase their shareholding in the Company, without incurring dealing costs or stamp duty. Full details of the scheme and the application form are available on the Manager's website at: www.albion.capital/funds/CRWN.

Outlook
We are pleased with the progress made during the course of the year across the portfolio, with the asset based portfolio delivering strong returns and many growth investments making good progress. The Company made a number of new investments within the growth portfolio which have excellent prospects and give us confidence that our portfolio will continue to deliver value in the future.

Richard Huntingford
Chairman                                                                                                         
26 September 2017

Strategic report

Investment objective and policy
The investment objective and policy of the Company is to achieve long term capital and income growth principally through investment in smaller unquoted companies in the United Kingdom.

The Company's investment portfolio is structured to provide a balance between income and capital growth for the longer term through a diversified, balanced approach to investment. The asset-based portfolio is designed to provide stability and income whilst maintaining the potential for capital growth, whilst the growth portfolio is intended to provide diversified exposure through its portfolio of investments in predominately unquoted UK companies. In neither category do portfolio companies normally have any external borrowing with a charge ranking ahead of the Company.

Business model
The Company operates as a Venture Capital Trust. This means that the Company has no employees other than its Directors and has outsourced the management of all its operations to Albion Capital Group LLP, including secretarial and administrative services. Further details of the Management agreement can be found below.

Current and future portfolio sector allocation
The pie chart below at the end of the announcement shows the split of the portfolio valuation by industrial or commercial sector as at 30 June 2017. The portfolio remains well diversified and as at the year end comprised 59 investments. There were 25 unquoted asset-based investments accounting for 57 per cent. of the net asset value of the Company; 30 unquoted growth investments accounting for 22 per cent. of the net asset value of the Company; and 4 quoted investments, accounting for 1 per cent. of the net asset value of the Company. 20 per cent. of the Company's net asset value was represented by cash and cash equivalents.

The sector analysis of the Company's investment portfolio shows that healthcare (both asset-based and growth) now accounts for 25 per cent. of the portfolio, compared to 21 per cent. at the end of the previous financial year, following third party revaluations in the Company's three care homes.

There has been continued investment in the asset-based sector of the portfolio, and the strong valuation uplifts from Radnor House and our three care homes have helped to maintain portfolio share for asset-based investments. In addition, there have been six new investments made in the growth sector during the year as we continue to seek out opportunities to deliver value to shareholders, as listed in the Chairman's statement.
Results and dividends

	£'000
Consolidated revenue return for the year ended 30 June 2017	561
Consolidated capital return for the year ended 30 June 2017	4,904
Dividend of 1 penny per share paid on 30 November 2016	(1,282)
Dividend of 1 penny per share paid on 31 March 2017	(1,405)
Transferred to reserves	2,778
Net assets as at 30 June 2017	45,581
Net asset value as at 30 June 2017 (pence per share)	30.98

The Company paid dividends totalling 2.00 pence per share during the year ended 30 June 2017 (2016: 2.50 pence per share). The dividend objective of the Board is to provide Shareholders with a strong, predictable dividend flow. The Company will target an annual dividend of 2.00 pence per share for the year ending 30 June 2018, and has declared a first dividend for the year ending 30 June 2018 of 1 penny per share. This dividend will be paid on 30 November 2017 to shareholders on the register on 3 November 2017.

As shown in the Consolidated statement of comprehensive income, the capital gain for the year was £4,904,000 (2016: loss of £210,000), as a result of the disposals of Exco InTouch, Blackbay and Masters Pharmaceuticals and the unrealised capital uplifts on the three care homes, Radnor House School (Holdings) and Proveca. Against this, investment income has decreased to £1,032,000 (2016: £1,114,000), with revenue return decreasing by £115,000 to £561,000 (2016: £676,000), the total return for the year was 4.04 pence per share (2016: 0.41 pence per share).
                             
The Consolidated balance sheet shows that the net asset value has increased over the year to 30.98 pence per share (2016: 28.94 pence per share), due to the total return for the year of 4.04 pence per share offset by the payment of the dividend of 2.00 pence per share during the year.

The consolidated cash flow for the business has been a net inflow of £2,369,000 for the year (2016: £2,890,000), reflecting net cash inflows from operations, disposal proceeds and the issue of Ordinary shares under the Top Up Offer, offset by dividends paid, new investments in the year and the buy-back of shares.

Review of the business
A review of the Company's business during the year is set out in the Chairman's statement.

The Directors do not foresee any major changes in the activity undertaken by the Company in the current year and have outlined their thoughts on the direction of the portfolio above. 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 longer term.

Details of significant events which have occurred since the end of the financial year are listed in note 18. Details of transactions with the Manager are shown in note 4. The subsidiary undertakings affecting the profits and net assets of the Group in the year are listed in note 11.

Update on CP1 VCT PLC and CP2 VCT PLC
CP1 VCT PLC is a wholly-owned subsidiary of the Company. CP1 VCT PLC transferred its business to Crown Place VCT PLC and ceased trading with effect from the date of merger on 12 January 2006. Since then, CP1 VCT PLC has had no further business other than to hold cash and intercompany balances. CP1 VCT PLC had significant tax losses which have been utilised by the Company through group relief.  Following a review in May 2017, the Board concluded that it was in the best interests of the Company to appoint PKF Geoffrey Martin & Co Limited as liquidators and commence the process of members' voluntary liquidation for CP1 VCT PLC. This is expected to be completed by June 2018.  

As mentioned in the Half-yearly Financial Report, CP2 VCT PLC held its final meeting on 8 December 2016 and consequently was dissolved on 21 March 2017.

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.
             
To comply with EU State aid obligations, rules were introduced under the Finance Act (No.2) 2015 and Finance Act 2016, which include:

• Restrictions over the age of investments;
• A prohibition on management buyouts or the purchase of existing businesses;
• An overall lifetime investment cap of £12 million from tax-advantaged funds into any portfolio company (£20 million for a "knowledge intensive" company); and
• A VCT can only make qualifying investments or certain specified non-qualifying investments such as money market securities and short term deposits.

The relevant tests to measure compliance have been carried out and independently reviewed for the year ended 30 June 2017. These showed that the Company has complied with all tests and continues to do so.

The current HM Treasury consultation entitled "Financing growth in innovative firms" may result in changes to VCT legislation  in the next Budget, which may limit the categories of business in which the Company currently invests.

Future prospects
The key drivers for returns within the portfolio are those sectors that reflect longer-term global growth trends. These include the importance of healthcare in an ageing population; sustainable energy against a background of climate change; education and skills in an increasingly competitive job market; and the developing use of information technology and automation in an environment of universal information. The portfolio is well positioned to take advantage of these changes.

Key performance indicators
The Directors believe that the following key performance indicators, which are typical for VCTs and used in its own assessment of the Company, will provide shareholders with sufficient information to assess how effectively the Company has been applying its investment policy to meet its objectives.  The Directors are satisfied that the results shown in the following key performance indicators, taken overall, give a good indication that the Company is achieving its investment objective and policy. These are:

1. Increase in total shareholder value

The graph on page 10 of the full Annual Report and Financial Statements shows that total shareholder value increased by 4.04 pence per share to 84.71 pence per share (2016: 80.67) for the year ended 30 June 2017.

2. Shareholder return in the year +

2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017
3.8%	11.9%	(2.7%)	(10.6%)	6.3%	6.6%	4.3%	6.6%	7.1%	4.5%	1.5%	14.0%

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.

Annual total return to shareholders has remained positive for the eighth consecutive year and for the year ended 30 June 2017 was 14.0 per cent.

3. Dividend distributions
Dividends paid in respect of the year ended 30 June 2017 were 2.00 pence per share, in line with the objective announced in the 2016 Annual Report and Financial Statements (2016: 2.50 pence per share). Cumulative dividends paid since launch (on 18 January 1998) amount to 53.73 pence per share.

4. Ongoing charges
The ongoing charges ratio for the year to 30 June 2017 marginally reduced to 2.4 per cent. (2016: 2.5 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 2.4 per cent.

5. Running yield
The running yield on the portfolio (gross income divided by the average net asset value) for the year to 30 June 2017 was 2.5 per cent. (2016: 3.2 per cent.), following the election by a small number of portfolio companies to capitalise their interest payable.

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

Operational arrangements
The Group 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 Group.

Management agreement
Under the terms of the Management agreement, the Manager is paid an annual fee equal to 1.75 per cent. of the net asset value of the Company plus £50,000 fee per annum for administrative and secretarial services. Total normal running costs, including the management fee, are limited to 3.0 per cent. of the net asset value. The Manager is entitled to an arrangement fee, payable by each portfolio company in which the Company invests, in the region of 2.0 per cent. on each investment made, and is also entitled to monitoring fees when placing an investment executive from Albion Capital Group LLP on the portfolio company board.

Further details of fees paid to the Manager can be found in note 4.

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.

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.

The target level requires that the growth of the aggregate of the net asset value per share and dividends paid by the Company or declared by the Board and approved by the shareholders during the relevant period (both revenue and capital), compared with the previous accounting date, exceeds the average base rate of the Royal Bank of Scotland plc plus 2.0 per cent. If the target return is not achieved in a period, the cumulative shortfall is carried forward to the next accounting period and has to be made up before an incentive fee becomes payable.

There was no management performance incentive fee payable during the year (2016: nil). As at 30 June 2017 the cumulative shortfall of the target return was 5.72 pence per share (2016: 8.40 pence per share) and this amount needs to be made up in the next accounting period before an incentive fee becomes payable.

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 interest 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 appointed Albion Capital Group LLP as the Company's AIFM as required by the AIFMD.

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. Thereafter, it is 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 and 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.

Further details of shares bought back during the year ended 30 June 2017 can be found in note 14 of the Financial Statements.

Social and community issues, employees and human rights
The Board recognises the requirement under section 414C of the Companies Act 2006 (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 and statements
The Company has adopted a number of further policies and statements relating to:

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

and these are set out in the Directors' report on pages 24 and 25 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. In addition to the risks and uncertainties outlined in the Chairman's statement, 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
Investment and performance risk	The risk of investment in poor quality assets, which could reduce the capital and income returns to shareholders, and could negatively impact on the Company's current and future valuations.   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 track record over many years of making successful investments in this segment of the market. In addition, the Manager operates a formal and structured investment appraisal and review 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), 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.
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 1 of the Financial Statements, the unquoted equity investments, convertible loan stock and debt issued at a discount held by the Company are designated at fair value through profit or loss and valued in accordance with the International Private Equity and Venture Capital Valuation Guidelines. These guidelines set out recommendations, intended to represent current best practice on the valuation of venture capital investments. These investments are valued on the basis of forward looking estimates and judgements about the business itself, its market and the environment in which it operates, together with the state of the mergers and acquisitions market, stock market conditions and other factors. In making these judgements the valuation takes into account all known material facts up to the date of approval of the Financial Statements by the Board. The sensitivity of these assumptions are commented on further in notes 9 and 17.  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 must comply with section 274 of the Income Tax Act 2007 which enables its investors to take advantage of tax relief on their investment and on future returns. Breach of any of the rules enabling the Company to hold VCT status could result in the loss of that status.	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 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 H.M. Revenue & Customs.
Regulatory and 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 companies. 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 through 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 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 auditor.
Operational and internal control risk	The Company relies on a number of third parties, in particular the Manager, for the provision of investment management and administrative functions. Failures in key systems and controls 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 Company and its operations are subject to a series of rigorous internal controls and review procedures exercised throughout the year. The Audit and Risk Committee reviews the Internal Audit Reports prepared by the Manager's internal auditor, PKF Littlejohn LLP. On an annual basis, the Audit and Risk Committee chairman meets with the internal audit partner 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.  In addition, the Board regularly reviews the performance of the Manager, to ensure they continue to have the necessary expertise and resources to deliver the Company's investment objective and policies. The Manager regularly reviews the performance of its key service providers and reports its results to the Board. The Manager and other service providers have also demonstrated to the Board that there is no undue reliance placed upon any one individual within Albion Capital Group LLP.
Economic and political 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.	The Company invests in a diversified portfolio of companies across a number of industry sectors and in addition often invests a mixture of equity and secured loan stock in portfolio companies and has a general policy of not normally permitting any external bank borrowings within portfolio companies. At any given time, the Company has sufficient cash resources to meet its operating requirements, including share buy-backs and follow on investments.
Market value of Ordinary shares	The market value of Ordinary shares can fluctuate. The market value of an Ordinary share, as well as being affected by its net asset value and prospective net asset value, also takes into account its dividend yield and prevailing interest rates. As such, the market value of an Ordinary share may vary considerably from its underlying net asset value. The market prices of shares in quoted investment companies can, therefore, be at a discount or premium to the net asset value at different times, depending on supply and demand, market conditions, general investor sentiment and other factors. Accordingly the market price of the Ordinary shares may not fully reflect their underlying net asset value.	The Company operates a share buy-back policy, which is designed to limit the discount at which the Ordinary shares trade to around 5 per cent. to net asset value, by providing a purchaser through the Company in absence of market purchasers.  From time to time buy-backs cannot be applied, for example when the Company is subject to a close period, or if it were to exhaust its buy-back authorities, which are renewed each year. New Ordinary shares are issued at sufficient premium to net asset value to cover the costs of issue and to avoid net asset value dilution to existing investors.

Viability statement
In accordance with the FRC UK Corporate Governance Code published in September 2014 and principle 21 of the AIC Code of Corporate Governance, the Directors have assessed the prospects of the Company over three years to 30 June 2020. 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 require from the Manager and the estimated timelines for finding, assessing and completing investments.

The Directors have carried out a robust assessment of the 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 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. The Board deliberated over the importance of the Manager and the processes that it has in place for dealing with the principal risks.
             
The Board assessed the ability of the Company to raise finance and deploy capital.  As explained in this Strategic report the Company's income covers ongoing expenses. This income should increase as our asset-based investments continue to mature. 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 price discount, 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 30 June 2020.
             
This Strategic report of the Company for the year ended 30 June 2017 has been prepared in accordance with the requirements of section 414A of 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,

Richard Huntingford
Chairman
26 September 2017

Responsibility Statement

In preparing these financial statements for the year to 30 June 2017, the Directors of the Company, being Richard Huntingford, James Agnew, Karen Brade and Penny Freer, 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 30 June 2017 for the Group has been prepared in accordance with International Financial Reporting Standards, and 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 Group and the Company for the year ended 30 June 2017 as required by DTR 4.1.12R;
• 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 30 June 2017 and description of principal risks and uncertainties that the Group and 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" is contained on page 28 of the full audited Annual Report and Financial Statements.


By order of the Board

Richard Huntingford
Chairman
26 September 2017

Consolidated statement of comprehensive income

		Year ended 30 June 2017			Year ended 30 June 2016
		Revenue	Capital	Total	Revenue	Capital	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments	2	-	5,435	5,435	-	238	238
Investment income and deposit interest	3	1,032	-	1,032	1,114	-	1,114
Investment management fees	4	(177)	(531)	(708)	(149)	(448)	(597)
Other expenses	5	(294)	-	(294)	(289)	-	(289)
Profit/(loss) before taxation		561	4,904	5,465	676	(210)	466
Taxation	6	-	-	-	-	-	-
Profit/(loss) and total comprehensive income attributable to shareholders		561	4,904	5,465	676	(210)	466
Basic and diluted earnings/(loss) per Ordinary share (pence)*	8	0.41	3.63	4.04	0.59	(0.18)	0.41

* excluding treasury shares

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

The total column of this statement represents the Group's statement of comprehensive income, prepared in accordance with International Financial Reporting Standards ('IFRS'). The supplementary revenue and capital columns are prepared under guidance published by The Association of Investment Companies.

All revenue and capital items in the above statement derive from continuing operations and are wholly attributable to the owners of the parent Company.

Consolidated balance sheet    

		30 June 2017	30 June 2016
	Note	£'000	£'000
Non-current assets
Investments	9	36,328	30,296
Current assets
Trade and other receivables less than one year	12	303	476
Cash and cash equivalents		9,265	6,896
		9,568	7,372
Total assets		45,896	37,668
Current liabilities
Trade and other payables less than one year	13	(315)	(283)
Total assets less current liabilities		45,581	37,385
Equity attributable to equityholders
Ordinary share capital	14	16,211	14,110
Share premium		18,032	13,872
Capital redemption reserve		1,415	1,415
Unrealised capital reserve		6,739	2,131
Realised capital reserve		(604)	(900)
Other distributable reserve		3,788	6,757
Total equity shareholders' funds		45,581	37,385
Basic and diluted net asset value per share (pence)*	15	30.98	28.94

* 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 authorised for issue on 26 September 2017 and were signed on its behalf by

Richard Huntingford
Chairman

Company number: 03495287

Company balance sheet          

		30 June 2017	30 June 2016
	Note	£'000	£'000
Non-current assets
Investments	9	36,328	30,296
Investment in subsidiary undertakings	11	-	6,823
		36,328	37,119
Current assets
Investment in subsidiary undertakings	11	6,400	8,230
Trade and other receivables less than one year	12	303	436
Cash and cash equivalents		9,249	6,880
		15,952	15,546
Total assets		52,280	52,665
Current liabilities
Trade and other payables less than one year	13	(6,699)	(15,280)
Total assets less current liabilities		45,581	37,385
Equity attributable to equityholders
Ordinary share capital	14	16,211	14,110
Share premium		18,032	13,872
Capital redemption reserve		1,415	1,415
Unrealised capital reserve		6,311	2,127
Realised capital reserve		(813)	(1,109)
Other distributable reserve		4,425	6,970
Total equity shareholders' funds		45,581	37,385
Basic and diluted net asset value per share (pence)*	15	30.98	28.94

* excluding treasury shares

The Company's profit for the year was £5,889,000 (2016: £505,000).

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

These Financial Statements were approved by the Board of Directors, and authorised for issue on 26 September 2017 and were signed on its behalf by

Richard Huntingford
Chairman

Company number: 03495287

Consolidated statement of changes in equity

	Ordinary 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 July 2016	14,110	13,872	1,415	2,131	(900)	6,757	37,385
Profit/(loss) and total comprehensive income	-	-	-	4,986	(82)	561	5,465
Transfer of previously unrealised losses on sale or write off of investments	-	-	-	(378)	378	-	-
Dividends paid	-	-	-	-	-	(2,687)	(2,687)
Purchase of shares for treasury (including costs)	-	-	-	-	-	(843)	(843)
Issue of equity	2,101	4,334	-	-	-	-	6,435
Cost of issue of equity	-	(174)	-	-	-	-	(174)
As at 30 June 2017	16,211	18,032	1,415	6,739	(604)	3,788	45,581
As at 1 July 2015	11,767	9,234	1,415	1,612	(171)	9,224	33,081
Profit/(loss) and total comprehensive income	-	-	-	422	(632)	676	466
Transfer of previously unrealised losses on sale or write off of investments	-	-	-	97	(97)	-	-
Dividends paid	-	-	-	-	-	(2,837)	(2,837)
Purchase of shares for treasury (including costs)	-	-	-	-	-	(306)	(306)
Issue of equity	2,343	4,819	-	-	-	-	7,162
Cost of issue of equity	-	(181)	-	-	-	-	(181)
As at 30 June 2016	14,110	13,872	1,415	2,131	(900)	6,757	37,385

The nature of each reserve is described in note 1 below.

Company statement of changes in equity

	Ordinary 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 July 2016	14,110	13,872	1,415	2,127	(1,109)	6,970	37,385
Profit/(loss) and total comprehensive income	-	-	-	4,986	(82)	985	5,889
Revaluation of investment in subsidiaries	-	-	-	(423)	-	-	(423)
Transfer of previously unrealised losses on disposal of investments	-	-	-	(378)	378	-	-
Dividends paid	-	-	-	-	-	(2,687)	(2,687)
Purchase of shares for treasury (including costs)	-	-	-	-	-	(843)	(843)
Issue of equity	2,101	4,334	-	-	-	-	6,435
Cost of issue of equity	-	(174)	-	-	-	-	(174)
As at 30 June 2017	16,211	18,032	1,415	6,311	(813)	4,425	45,581
As at 1 July 2015	11,767	9,234	1,415	1,647	(380)	9,398	33,081
Profit/(loss) and total comprehensive income	-	-	-	422	(632)	715	505
Revaluation of investment in subsidiaries	-	-	-	(39)	-	-	(39)
Transfer of previously unrealised losses on disposal of investments	-	-	-	97	(97)	-	-
Dividends paid	-	-	-	-	-	(2,837)	(2,837)
Purchase of shares for treasury (including costs)	-	-	-	-	-	(306)	(306)
Issue of equity	2,343	4,819	-	-	-	-	7,162
Cost of issue of equity	-	(181)	-	-	-	-	(181)
As at 30 June 2016	14,110	13,872	1,415	2,127	(1,109)	6,970	37,385

* Included within these reserves is an amount of £3,612,000 (2016: £5,861,000) which is considered distributable.

The nature of each reserve is described in note 1 below.

Consolidated statement of cash flows

		Year ended 30 June 2017 £'000	Year ended  30 June 2016 £'000
Operating activities
Investment income received		858	948
Deposit interest received		34	47
Dividend income received		48	38
Investment management fees paid		(672)	(579)
Other cash payments		(315)	(283)
Net cash flow from operating activities		(47)	171
Cash flow from investing activities
Purchase of non-current asset investments		(2,917)	(4,566)
Disposal of non-current asset investments		2,546	2,879
Net cash flow from investing activities		(371)	(1,687)
Cash flow from financing activities
Issue of share capital		5,833	7,164
Cost of issue of equity		(2)	(2)
Equity dividends paid		(2,255)	(2,413)
Purchase of shares for treasury		(826)	(303)
Transfer of CP2 VCT PLC cash to liquidator		-	(40)
Receipt of CP2 VCT PLC cash upon liquidation		37	-
Net cash flow from financing activities		2,787	4,406
Increase in cash and cash equivalents		2,369	2,890
Cash and cash equivalents at the start of the year		6,896	4,006
Cash and cash equivalents at the end of the year		9,265	6,896

Company statement of cash flows

		Year ended 30 June 2017 £'000	Year ended  30 June 2016 £'000
Operating activities
Investment income received		858	948
Deposit interest received		34	47
Dividend income received		1,098	943
Investment management fees paid		(672)	(579)
Intercompany interest paid		(1,050)	(905)
Other cash payments		(315)	(283)
Net cash flow from operating activities		(47)	171
Cash flow from investing activities
Purchase of non-current asset investments		(2,917)	(4,566)
Disposal of non-current asset investments		2,546	2,879
Net cash flow from investing activities		(371)	(1,687)
Cash flow from financing activities
Issue of share capital		5,833	7,164
Cost of issue of equity		(2)	(2)
Equity dividends paid		(2,255)	(2,413)
Purchase of own shares for treasury (including costs)		(826)	(303)
Receipt of CP2 VCT PLC cash upon liquidation		37	-
Net cash flow from financing activities		2,787	4,446
Increase in cash and cash equivalents		2,369	2,930
Cash and cash equivalents at the start of the year		6,880	3,950
Cash and cash equivalents at the end of the year		9,249	6,880

Notes to the Financial Statements

1. Accounting policies
The following policies refer to the Group and the Company except where noted. References to International Financial Reporting Standards ('IFRS') relate to the Group Financial Statements. The Company has adopted FRS 101 "Reduced Disclosure Framework", which is based on the recognition and measurement requirements of International Financial Reporting Standards ('EU IFRS') as adopted by the European Union.

Basis of accounting
The Financial Statements have been prepared in accordance with International Financial Reporting Standards ('EU IFRS') as adopted by the European Union (and therefore comply with Article 4 of the EU IAS regulation), in the case of the Group, and in accordance with FRS 101 "Reduced Disclosure Framework" in the case of the Company. No disclosure exemptions have been taken by the Company. The Company has taken advantage of FRS 101 exemption paragraph 8.K. which allows the Company not to disclose related party transactions with wholly owned subsidiaries.

Both the Group and the Company Financial Statements also apply the Statement of Recommended Practice: "Financial Statements of Investment Companies and Venture Capital Trusts" ('SORP') issued by The Association of Investment Companies ("AIC") in 2014, in so far as this does not conflict with IFRS. The Financial Statements have been prepared in accordance with those parts of the Companies Act 2006 applicable to companies reporting under IFRS and UK GAAP. These Financial Statements are presented in Sterling to the nearest thousand. Accounting policies have been applied consistently in current and prior periods.

At the balance sheet date, there are no new International Accounting Standards and interpretations that were in issue but not yet effective that are expected to have any material impact on the Financial Statements, although some changes may be required to the format of the Financial Statements and disclosures.

Information about the Group and Company can be found on page 2 of the full Annual Report and Financial Statements.

Basis of consolidation
The Group consolidated Financial Statements incorporate the Financial Statements of the Company for the year ended 30 June 2017 and the entities controlled by the Company (its subsidiaries), for the same period. Where necessary, adjustments are made to the Financial Statements of subsidiaries to bring the accounting policies into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

As permitted by Section 408 of the Companies Act 2006, the Company has not presented its own profit and loss account. The amount of the Company's profit before tax for the year dealt with in the accounts of the Group is £5,889,000 (2016: £505,000). 

Segmental reporting
The Directors are of the opinion that the Group and the Company are engaged in a single operating segment of business, being investment in equity and debt. The Group and the Company report to the Board which acts as the chief operating decision maker. The Group invests in smaller companies principally based in the UK.

Business combinations
The acquisition of subsidiaries is accounted for using the purchase method in the Group Financial Statements. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the subsidiaries, plus any costs directly attributable to the business combination. The subsidiary's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 "Business Combinations" are recognised at their fair value at the acquisition date.

Estimates
The preparation of the Group's and Company's Financial Statements requires estimates, assumptions and judgements to be made, which affect the reported results and balances. Actual outcomes may differ from these estimates, with a consequential impact on the results of future periods. Those estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are those used to determine the fair value of investments at fair value through the profit or loss. Reasonable possible alternative assumptions have been considered, details of which are given in note 9.

The valuation of investments held at fair value through profit or loss or measured in assessing any impairment of loan stocks is determined by using valuation techniques. The Group and the Company use judgements to select a variety of methods and makes assumptions that are mainly based on market conditions and portfolio company performance at each balance sheet date.

Investment in subsidiaries
Investments in subsidiaries are revalued at the balance sheet date based on the fair value of the net assets of the subsidiary. Revaluation movements are recognised in the unrealised reserve.

CP1 VCT PLC is a wholly-owned subsidiary of the Company. CP1 VCT PLC transferred its business to Crown Place VCT PLC and ceased trading with effect from the date of merger on 12 January 2006. Since then, CP1 VCT PLC has had no further business other than to hold cash and intercompany balances. CP1 VCT PLC had significant tax losses which have been utilised by the Company through group relief. As the tax losses were depleted, the Directors took the decision to appoint a liquidator and commence a process of members' voluntary liquidation for CP1 VCT PLC. PKF Geoffrey Martin & Co Limited were appointed to undertake this task on 8 June 2017. The liquidation is expected to be completed by June 2018.

As mentioned in the Half-yearly Financial Report, CP2 VCT PLC held its final meeting on 8 December 2016 and was consequently dissolved on 21 March 2017.

Non-current asset investments
Quoted and unquoted equity investments, debt issued at a discount, and convertible bonds
In accordance with IAS 39 '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 and gains and losses arising on the disposal of investments are reflected in the capital column of the Statement of comprehensive income 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.

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.

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

Unquoted loan stock
Unquoted loan stock (excluding debt issued at a discount and convertible bonds) is classified as loans and receivables as permitted by IAS 39 and measured at amortised cost using the effective interest rate method less impairment. Movements in the amortised cost relating to interest income are reflected in the revenue column of the Statement of comprehensive income, and hence are reflected in the other distributable reserve, and movements in respect of capital provisions are reflected in the capital column of the Statement of comprehensive income and are reflected in the realised capital reserve following sale, or in the unrealised capital reserve for impairments arising from revaluations of the fair value of the security.

For all unquoted loan stock, 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 held less estimated selling costs.

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

In accordance with the exemptions under IAS 28 "Investments in associates", those undertakings in which the Group or Company holds more than 20 per cent. of the equity as part of an investment portfolio are not accounted for using the equity method.

IFRS 9
The IASB has issued IFRS - 9 Financial Instruments which will become mandatory effective for periods beginning on or after 1 January 2018. Upon conducting a robust risk assessment on the investments in the portfolio, the Board has concluded that the implementation of IFRS 9 would not have a material effect on the valuation of the portfolio.

Investment income
Quoted and unquoted equity income
Dividends receivable on quoted equity shares are recognised on the ex-dividend date. Income receivable on unquoted equity is recognised when the Company's right to receive payment and expected settlement is established.

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

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

Investment management fees, performance incentive fees and other expenses
All expenses have been accounted for on an accruals basis. Expenses are charged through the revenue column of the Statement of comprehensive income, except for management fees and performance incentive fees which are allocated in part to the capital column of the Statement of comprehensive income, to the extent that these relate to the maintenance or enhancement in the value of the investments and in line with the Board's expectation that over the long term 75 per cent. of the Group's investment returns will be in the form of capital gains.

Issue costs
Issue costs associated with the allotment of share capital have been deducted from share premium.

Taxation
Taxation is applied on a current basis in accordance with IAS 12 "Income taxes". Taxation associated with capital expenses is applied in accordance with the SORP. Deferred taxation is provided in full on timing differences, and temporary differences (in accordance with IAS 12) 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. Temporary differences arise from differences between the carrying amounts of assets and liabilities for financial reporting and the amounts used for taxation purposes. Timing differences (IAS 12) 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 probable that future taxable profit will be available against which unused tax losses and credits can be utilised. Deferred tax assets and liabilities are not discounted.

Dividends
In accordance with IAS 10 "Events after the balance sheet date", dividends are accounted for in the period in which the dividend is paid or approved at the Annual General Meeting.

Reserves
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;
• expenses, together with the related taxation effect, charged in accordance with the above policies; and
• dividends paid to equity holders.

Other distributable reserve
This reserve accounts for movements from the revenue column of the Statement of comprehensive income, the payment of dividends, the buy-back of shares and other non-capital realised movements.

2. Gains on investments

	Year ended 30 June 2017	Year ended  30 June 2016
	£'000	£'000
Unrealised gains on investments held at fair value through profit or loss	4,629	288
Reversal of impairments on investments measured at amortised cost	357	133
Unrealised gains on investments	4,986	422
Realised gains/(losses) on investments held at fair value through profit or loss	51	(152)
Realised gains/(losses) on investments measured at amortised cost	398	(32)
Realised gains/(losses) on investments	449	(184)
	5,435	238

Investments measured at amortised cost are unquoted loan stock investments as described in note 9.

3. Investment income and deposit interest

	Year ended 30 June 2017	Year ended 30 June 2016
	£'000	£'000
Income recognised on investments held at fair value through profit or loss
UK dividend income	51	38
Interest on convertible bonds and debt issued at a discount	528	469
	579	507
Income recognised on investments measured at amortised cost
Return on loan stock investments	425	557
Bank deposit interest	28	50
	453	607
	1,032	1,114

Interest income earned on impaired investments at 30 June 2017 amounted to £68,000 (2016: £88,000). These investments are all held at amortised cost.

4. Investment management fees

	Year ended 30 June 2017			Year ended 30 June 2016
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Investment management fee	177	531	708	149	448	597

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 £758,000 (2016: £647,000) were purchased by the Company from Albion Capital Group LLP comprising £708,000 in respect of management fees (2016: £597,000) and £50,000 in respect of administration fees (2016: £50,000).  At the financial year end, the amount due to Albion Capital Group LLP in respect of these services disclosed as accruals and deferred income was £211,500 (administration fee accrual: £12,500, management fee accrual £199,000) (2016:  £174,500).

Albion Capital Group LLP is, from time to time, eligible to receive transaction fees and monitoring fees from portfolio companies. During the year ended 30 June 2017 fees of £125,000 attributable to the investments of the Company were received pursuant to these arrangements (2016: £125,000).

Albion Capital Group LLP, holds 58,034 Ordinary shares in the Company.

5. Other expenses

	Year ended 30 June 2017	Year ended 30 June 2016
	£'000	£'000
Directors' remuneration	86	81
National insurance on Directors' remuneration	6	6
Auditor's remuneration: - audit of the statutory Financial Statements (excluding VAT)	26	28
- the auditing of accounts of subsidiaries of the Company pursuant to legislation (excluding VAT)	3	3
Fees for the liquidation of CP2 VCT PLC (excluding VAT)	-	3
Other expenses	173	168
	294	289

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

6. Taxation

	Year ended 30 June 2017			Year ended 30 June 2016
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
UK corporation tax charge	-	-	-	-	-	-

The tax charge for the year shown in the Statement of comprehensive income is lower than the average standard rate of corporation tax of 19.75 per cent. (2016: average rate of 20 per cent.). The differences are explained below:

	Year ended 30 June 2017	Year ended 30 June 2016
	£'000	£'000
Profit before taxation	5,465	466
Profit multiplied by the average standard rate of corporation tax	1,097	93
Effect of capital gains not subject to taxation	(1,073)	(48)
Effect of income not subject to taxation	(10)	(8)
Utilisation of tax losses	(14)	(37)
	-	-

No provision for deferred tax has been made in the current or prior accounting period.  The Company and Group have not recognised a deferred tax asset of £2,805,000 (2016: £3,013,000) in respect of unutilised management expenses and non-trading deficits as it is not considered sufficiently probable that there will be taxable profits against which to utilise these expenses in the foreseeable future.

7. Dividends

				Year ended 30 June 2017			Year ended 30 June 2016
					£'000		£'000
First dividend of 1 penny per share paid on 30 November 2016 (30 November 2015 - 1.25 pence per share)					1,282		1,361
Second dividend of 1 penny per share paid on 31 March 2017 (31 March 2016 - 1.25 pence per share)					1,405		1,476
					2,687		2,837

In addition to the dividends paid above, the Board has declared a first dividend for the year ending 30 June 2018, of 1 penny per share. This will be paid on 30 November 2017 to shareholders on the register on 3 November 2017. The total dividend will be approximately £1,471,000. All dividends are paid from the other distributable reserve.

8. Basic and diluted return/(loss) per share 

	Year ended 30 June 2017			Year ended 30 June 2016
	Revenue	Capital	Total	Revenue	Capital	Total
Return/(loss) attributable to equity shares (£'000)	561	4,904	5,465	676	(210)	466
Weighted average shares (excluding treasury shares)	135,345,435			114,998,634
Return/(loss) attributable per Ordinary share (pence) (basic and diluted)	0.41	3.63	4.04	0.59	(0.18)	0.41

The return per share has been calculated excluding treasury shares of 15,002,410 (2016: 11,915,410).

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.

9. Non-current asset investments

	30 June 2017 £'000	30 June 2016 £'000
Group and Company
Investments held at fair value through profit or loss
Unquoted equity and preference shares	18,573	11,542
Quoted equity	395	518
Discounted debt and convertible loan stock	8,613	8,903
	27,581	20,963
Investments measured at amortised cost
Unquoted loan stock	8,747	9,333
	36,328	30,296

  

	30 June 2017   £'000	30 June 2016 £'000
Opening valuation	30,296	28,531
Purchases at cost	2,922	4,614
Disposal proceeds	(2,414)	(3,174)
Realised gains/(losses)	449	(184)
Movement in loan stock accrued income	89	86
Unrealised gains	4,986	422
Closing valuation	36,328	30,296
Movement in loan stock accrued income
Opening accumulated movement in loan stock accrued income	217	131
Movement in loan stock accrued income	89	86
Closing accumulated movement in loan stock accrued income	306	217
Movement in unrealised gains
Opening accumulated unrealised gains	2,064	1,545
Transfer of previously unrealised gains to realised reserves on disposal of investments	(378)	(97)
Movement in unrealised gains	4,986	422
Closing accumulated unrealised gains	6,672	2,064
Historic cost basis
Opening book cost	28,015	26,855
Purchases at cost	2,922	4,614
Disposals at cost	(1,419)	(2,980)
Cost of investments written off but still held	(167)	(474)
Closing book cost	29,350	28,015

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 a result of the enforcement of security during the year, 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.

Additions and disposal proceeds included in the statement of cash flows differ from the amounts shown in the note above, due to deferred consideration and settlement creditors and the restructuring of investments.

A schedule of realisations during the year is shown on page 20 of the full Annual Report and Financial Statements.

IFRS 13 'Fair value measurement' and IFRS 7 'Financial Instruments: Disclosures' requires the Company to disclose 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 of valuation method
Level 1	Unadjusted quoted (bid) prices applied
Level 2	Inputs to valuation are from observable sources and are directly or indirectly derived from prices
Level 3	Inputs to valuations are not based on observable market data

Quoted 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.

The Company's investments measured at fair value through profit or loss (Level 3) had the following movements in the year to 30 June 2017:

	30 June 2017			30 June 2016
	Equity	Discounted debt and convertible loan stock	Total	Equity	Discounted debt and convertible loan stock	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Opening balance	11,542	8,903	20,445	10,467	7,277	17,744
Additions	2,002	2,272	4,274	1,438	1,799	3,237
Disposal proceeds	(995)	(1,587)	(2,582)	(738)	(243)	(981)
Debt/equity conversion	1,555	(1,500)	55	40	(40)	-
Realised gains/(losses)	71	(20)	51	(93)	(60)	(153)
Unrealised gains	4,398	492	4,890	428	126	554
Accrued loan stock interest	-	53	53	-	44	44
Closing balance	18,573	8,613	27,186	11,542	8,903	20,445

Unquoted investments held at fair value through profit or loss are valued in accordance with the IPEVCV guidelines as follows:

	30 June 2017	30 June 2016
Investment valuation methodology	£'000	£'000
Valuation supported by third party valuation or desktop valuation	17,400	13,004
Cost and price of recent investment (reviewed for impairment or uplift)	5,570	2,546
Net assets	2,373	1,910
Revenue multiple	1,152	1,566
Agreed sale price/Offer price	481	591
Earnings multiple	210	828
	27,186	20,445

Level 3 valuations include inputs based on non-observable market data. IFRS 13 requires an entity to disclose quantitative information about the significant unobservable inputs used. Of the Company's Level 3 investments, 5 per cent. are held on an Earnings or Revenue multiple basis, which have significant judgement applied to the valuation inputs. The table below sets out the range of Earnings and Revenue multiples and discounts applied. The remainder of Level 3 investments are held at cost (reviewed for impairment), recent investment price, net asset value (supported by independent valuation) or net assets.

IFRS 13 and IFRS 7 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. After due consideration and noting that the valuation methodology applied to 57 per cent. of the Level 3 investments (by valuation) is based on, recent investment price, agreed sale price/offer price and cost or is loan stock, and as such the Board believe that changes to reasonable possible alternative input assumptions (by adjusting the earnings and revenue multiples) for the valuation of the remainder of the portfolio could lead to a significant change in the fair value of the portfolio. The impact of these changes could result in an increase in the valuation of the equity investments by £449,000 (2.5%) or a decrease in the valuation of equity investments by £543,000 (3.0%). For valuations based on earnings and revenue multiples, the Board considers that the most significant input is the price/earnings ratio; for valuations based on third party valuations, the Board considers that the most significant inputs are price/earnings ratio, discount factors, market values for buildings and market value per room for care homes; which have been adjusted to drive the above sensitivities.

The unquoted instruments held at FVTPL had the following movements between investment methodologies between 30 June 2016 and 30 June 2017: 

Change in investment valuation methodology (2016 to 2017)	Value as at 30 June 2017 £'000	Explanatory note
Discount to third party offer to price of recent investment	1,223	More appropriate following recent investment round
Valuation supported by third party valuation to net assets	544	More relevant valuation methodology
Earnings multiple to discount to third party offer	481	More appropriate following recent third party offer
Cost to net assets	315	More relevant valuation methodology
Revenue multiple to price of recent investment	315	More appropriate following recent investment round
Cost to revenue multiple	118	More relevant valuation methodology

The valuation method used will be the most appropriate valuation methodology for an investment within its market, with regard to the financial health of the investment and the IPEVCV Guidelines. The Directors believe that, within these parameters, there are no other possible methods of valuation which would be reasonable as at 30 June 2017.

10. Significant interests
The principal activity of the Group is to select and hold a portfolio of investments in unquoted securities. Although the Company, through the Manager, will, in some cases, be represented on the board of the portfolio company, it will not take a controlling interest or become involved in the management of a portfolio company. The size and structure of the companies with unquoted securities may result in certain holdings in the portfolio representing a participating interest without there being any partnership, joint venture or management consortium agreement.

The Company has interests of greater than 20 per cent. of the nominal value of any class of the allotted shares in the portfolio companies as at 30 June 2017 as described below:

Company	Registered address and country of incorporation	Principal activity	% class and share type	% total voting rights
ELE Advanced Technologies Limited	Cotton Tree Lane, Lancashire, BB8 7BH, Great Britain	Manufacturer of precision engineering components for the industrial gas turbine, aerospace and automotive markets	74.3% B Ordinary	41.9%

The investment listed above is held as part of an investment portfolio and therefore, as permitted by IAS 28, is measured at fair value and not accounted for using the equity method.

11. Investments in subsidiary undertakings

	30 June 2017
	CP1 VCT PLC	CP2 VCT PLC	Total
	£'000	£'000	£'000
Carrying value as at 1 July 2016	6,823	8,230	15,053
Movement in subsidiary net assets	(423)	(8,230)	(8,653)
Carrying value as at 30 June 2017	6,400	-	6,400

  

	30 June 2016
	CP1 VCT PLC	CP2 VCT PLC	Total
	£'000	£'000	£'000
Carrying value as at 1 July 2015	6,619	8,473	15,092
Movement in subsidiary net assets	204	(243)	(39)
Carrying value as at 30 June 2016	6,823	8,230	15,053

As mentioned in the Half-yearly Financial Report, CP2 VCT PLC held its final meeting on 8 December 2016 with regards to its members' voluntary liquidation, and consequently was dissolved on 21 March 2017.
CP1 VCT PLC currently hold intercompany balances and cash. This investment is valued according to Level 2 valuation methods.

CP1 VCT PLC is wholly owned by Crown Place VCT PLC, as was CP2 VCT PLC until it was dissolved on 21 March 2017 as follows:

	30 June 2017
	CP1 VCT PLC	CP2 VCT PLC
Nominal value of shares held	£6,382,746	-
Percentage of total voting rights held	100%	-

  

	30 June 2016
	CP1 VCT PLC	CP2 VCT PLC
Nominal value of shares held	£6,382,746	£8,219,350
Percentage of total voting rights held	100%	100%

12. Trade and other receivables less than one year

	30 June 2017		30 June 2016
	Group	Company	Group	Company
	£'000	£'000	£'000	£'000
Trade and other receivables less than one year	303	303	476	436

13. Trade and other payables less than one year

	30 June 2017		30 June 2016
	Group	Company	Group	Company
	£'000	£'000	£'000	£'000
Amounts due to subsidiary undertakings	-	6,384	-	14,997
Other payables	43	43	46	46
Accruals	272	272	237	237
	315	6,699	283	15,280

Interest is chargeable on intercompany balances at a rate of 12 per cent. per annum. Intercompany balances are payable on demand. CP1 VCT PLC's current business is to hold cash and intercompany balances.

14. Ordinary share capital

Ordinary shares	£'000
141,097,990 Ordinary shares of 10p each at 30 June 2016	14,110
21,012,988 Ordinary shares of 10p each issued during the year	2,101
162,110,978 Ordinary shares of 10p each at 30 June 2017	16,211
11,915,410 Ordinary shares of 10p each held in treasury at 30 June 2016	(1,192)
3,087,000 Ordinary shares of 10p each purchased during the year to be held in treasury	(308)
15,002,410 Ordinary shares of 10p each held in treasury at 30 June 2017	(1,500)
Voting rights of 147,108,568 Ordinary shares of 10p each at 30 June 2017	14,711

The Company purchased 3,087,000 Ordinary shares for treasury (2016: 1,063,000) during the year at a total cost of £843,000 (2016: £306,000).

The total number of shares held in treasury as at 30 June 2017 was 15,002,410 (2016: 11,915,410) representing 9.3 per cent. of the shares in issue as at 30 June 2017.

Under the terms of the Dividend Reinvestment Scheme Circular dated 26 February 2009, the following new Ordinary shares of nominal value 10 pence each were allotted during the year:

Allotment date	Number of shares allotted	Aggregate nominal value of shares (£'000)	Issue price (pence per share)	Net invested (£'000)	Opening market price on allotment (pence per share)
30 November 2016	686,844	69	29.70	202	27.00
31 March 2017	767,434	77	29.84	227	28.50
	1,454,278	146		429

  
Under the terms of the Albion VCTs Prospectus Top Up Offers 2016/2017, the following new Ordinary shares of nominal value 10 pence each were issued during the year:

Allotment date	Number of shares allotted	Aggregate nominal value of shares (£'000)	Issue price (pence per share)	Net consideration received (£'000)	Opening market price on allotment (pence per share)
31 January 2017	2,436,624	244	30.40	726	28.50
31 January 2017	987,718	99	30.50	294	28.50
31 January 2017	8,997,127	900	30.70	2,679	28.50
28 March 2017	6,572,892	656	30.80	1,964	28.50
7 April 2017	79,174	8	30.50	24	29.00
7 April 2017	62,226	6	30.60	19	29.00
7 April 2017	422,949	42	30.80	126	29.00
	19,558,710	1,955		5,832

15. Basic and diluted net asset value per share

The Group and Company net asset value attributable to the Ordinary shares at the year end was as follows:

			30 June 2017	30 June 2016
Net asset value per share attributable (pence)			30.98	28.94

The 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 less treasury shares of 147,108,568 shares (2016: 129,182,580) as at 30 June 2017.

There are no convertible instruments, derivatives or contingent share agreements in issue.

16. Capital and financial instruments risk management
The following policies are with reference to both the Company and the Group except where 'the Company' is used below.

The Group's capital comprises Ordinary shares as described in note 14. The Company is permitted to buy back its own shares for cancellation or treasury purposes, and this is described in more detail in the Strategic report.

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

The principal risks arising from the Group'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 Group 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 as follows:

Investment risk
As a venture capital trust, it is the Group's specific nature to evaluate and control the investment risk of its portfolio in unquoted and quoted companies, 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 Group to the revaluation and devaluation of investments. The main driver of investment risk is the operational and financial performance of the portfolio companies and the dynamics of market quoted comparators. The Manager receives management accounts from portfolio companies, and members of the investment management team often sit on the boards of unquoted portfolio companies; this enables the close identification, monitoring and management of investment risk.

The Manager and the Board formally 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 Group 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 non-current and current asset investment portfolio which is £36,328,000 (2016: £30,296,000). Non-current investments form 80 per cent. of the net asset value as at 30 June 2017 (2016: 81 per cent.).

More details regarding the classification of non-current asset investments are shown in note 9.

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 Group as a whole, the strategy of the Group is to invest in a broad spread of industries with approximately 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. The Company's investments in subsidiaries are explained further in note 11.

The valuation method used will be 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 IFRS 7, 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 non-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. (2016: 10 per cent.) increase or decrease in the valuation of the non-current asset investments (keeping all other variables constant) would increase or decrease the net asset value and return for the year by £3,632,800 (2016: £3,029,600). Further sensitivity analysis on non-current asset investments is included in note 9.

Interest rate risk
It is the Group'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 Group's and Company's analysis, it is estimated that a rise or fall of half a percentage point in all interest rates would be immaterial due to the level of fixed rate loan stock held within the portfolio. The impact of half a percentage point 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 weighted average interest rate applied to the Group's fixed rate assets during the year was approximately 5.9 per cent. (2016: 5.7 per cent.). The weighted average period to maturity for the fixed rate assets is approximately 3.2 years (2016: 3.6 years).

The Group's financial assets and liabilities as at 30 June 2017, all denominated in pounds sterling, consist of the following:

	30 June 2017				30 June 2016
	Fixed rate £'000	Floating rate £'000	Non-interest £'000	Total £'000	Fixed rate £'000	Floating rate £'000	Non-interest £'000	Total £'000
Unquoted loan stock (including convertible loan stock and discounted debt)	16,826	-	534	17,360	16,243	-	1,993	18,236
Equity	-	-	18,968	18,968	-	-	12,060	12,060
Receivables*	-	-	285	285	-	-	460	460
Payables	-	-	(315)	(315)	-	-	(283)	(283)
Cash	-	9,265	-	9,265	-	6,896	-	6,896
	16,826	9,265	19,472	45,563	16,243	6,896	14,230	37,369

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

The Company's financial assets and liabilities as at 30 June 2017, all denominated in pounds sterling, consist of the following:

	30 June 2017				30 June 2016
	Fixed rate £'000	Floating rate £'000	Non-interest £'000	Total £'000	Fixed rate £'000	Floating rate £'000	Non-interest £'000	Total £'000
Unquoted loan stock (including convertible loan stock and discounted debt)	16,826	-	534	17,360	16,243	-	1,993	18,236
Equity	-	-	18,968	18,968	-	-	12,060	12,060
Receivables*	-	-	285	285	-	-	420	420
Payables	(6,384)	-	(315)	(6,699)	(14,997)	-	(283)	(15,280)
Cash	-	9,249	-	9,249	-	6,880	-	6,880
	10,442	9,249	19,472	39,163	1,246	6,880	14,190	22,316

*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 Group. The Group is exposed to credit risk through its debtors, investment in unquoted loan stock, and cash on deposit with banks.

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

Bank deposits are held with banks with high credit ratings assigned by international credit rating agencies. The Group has an informal policy of limiting counterparty banking exposure to a maximum of 20 per cent. of net asset value for any one counterparty.

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 Group's total gross credit risk at 30 June 2017 was limited to £17,360,000 (2016: £18,236,000) of unquoted loan stock instruments (all are secured on the assets of the portfolio company), £9,265,000 (2016: £6,896,000) of cash deposits with banks and £285,000 (2016: £460,000) of deferred consideration and receivables.

The Company's total gross credit risk at 30 June 2017 was limited to £17,360,000 (2016: £18,236,000) of unquoted loan stock instruments (all are secured on the assets of the portfolio company), £9,249,000 (2016: £6,880,000) of cash deposits with banks and £285,000 (2016: £420,000) of deferred consideration and receivables.

As at the balance sheet date, the cash held by the Group is held with Lloyds Bank Plc, Scottish Widows Bank plc (part of Lloyds Banking Group), National Westminster Bank plc and Barclays 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 credit profile of unquoted loan stock is described under liquidity risk shown below.

The cost, impairment and carrying value of impaired loan stocks at 30 June 2017 and 30 June 2016 are as follows:

	30 June 2017			30 June 2016
	Cost	Impairment	Carrying value	Cost	Impairment	Carrying value
	£'000	£'000	£'000	£'000	£'000	£'000
Impaired loan stock	4,279	(867)	3,412	4,314	(970)	3,344

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

Liquidity risk
Liquid assets are held as cash on current short term deposit accounts. Under the terms of its Articles, the Group has the ability to borrow up to the amount of its adjusted capital and reserves of the latest published audited consolidated balance sheet, which amounts to £44,110,000 (2016: £35,770,000) as at 30 June 2017.

The Group has no committed borrowing facilities as at 30 June 2017 (2016: nil) and had cash balances of £9,265,000 (2016: £6,896,000) (Company £9,249,000; 2016: £6,880,000).  The main cash outflows are for new investments, dividends and share buy-backs, which are within the control of the Group. The Manager formally reviews the cash requirements of the Group on a monthly basis, and the Board on a quarterly basis, as part of its review of management accounts and forecasts.

All of the Group's financial liabilities are short term in nature and total £315,000 (2016: £283,000) for the year to 30 June 2017 (Company: £6,699,000; 2016: £15,280,000). An amount of £6,384,000 (2016: £14,997,000) which is included within the Company's creditors, relates to intercompany balances and is not considered to carry liquidity risk because the Board has control over the intercompany repayments.

The carrying value of loan stock investments at 30 June 2017, analysed by expected maturity dates is as follows:

Redemption date	Fully performing £'000	Past due £'000	Impaired £'000	Total £'000
Less than one year	1,083	320	1,238	2,641
1-2 years	3,379	556	2,086	6,021
2-3 years	1,487	1,474	6	2,967
3-5 years	2,775	575	82	3,432
More than 5 years	1,973	326	-	2,299
	10,697	3,251	3,412	17,360

 The carrying value of loan stock investments at 30 June 2016, analysed by expected maturity dates is as follows:

Redemption date	Fully performing £'000	Past due £'000	Impaired £'000	Total £'000
Less than one year	4,036	438	3,328	7,802
1-2 years	205	309	6	520
2-3 years	723	146	-	869
3-5 years	5,649	607	10	6,266
More than 5 years	2,305	474	-	2,779
	12,918	1,974	3,344	18,236

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

The average annual interest yield on the total cost of past due loan stocks is 7.2 per cent. (2016: 10.2 per cent.).

No balances, other than loan stock, are past due or impaired.

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

Fair values of financial assets and financial liabilities
All the Group's financial assets and liabilities as at 30 June 2017 are stated at fair value as determined by the Directors, with the exception of loans and receivables included within investments, cash, receivables and payables, which are measured at amortised cost, as permitted by IAS 39. In the opinion of the Directors, the amortised cost of loan stock is not materially different to the fair value of the loan stock. There are no financial liabilities other than short term trade and other payables. The Group'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, and that the Group is subject to low financial risk as a result of having nil gearing and positive cash balances.

17. Contingencies and guarantees
As at 30 June 2017, the Company had the following financial commitments in respect of investments:

• Aridhia Informatics Limited; £5,000

             
There are no contingencies or guarantees of the Company as at 30 June 2017 (2016: £nil).

Under the terms of the Transfer Agreement dated 16 January 2006, Crown Place VCT PLC has indemnified its subsidiary CP1 VCT PLC in respect of all costs, claims and liabilities in exchange for the transfer of assets.

18. Post balance sheet events
Since 30 June 2017 the Company has completed the following investment transactions:

• Investment of £186,000 in G.Network Communications Limited;
• Investment of £128,000 in Black Swan Data Limited;
• Investment of £115,000 in Ryefield Court Care Limited;
• Investment of £107,000 in Egress Software Technologies Limited;
• Investment of £90,000 in Active Lives Care Limited;
• Investment of £80,000 in Convertr Media Limited;
• Investment of £17,000 in Abcodia Limited;
• Investment of £6,000 in Beddlestead Farm Limited;
• Investment of £5,000 in Aridhia Informatics Limited.

In addition, TCHH Limited (previously The Crown Hotel Harrogate Limited) disposed of its business and assets, of which the Company's share is approximately £2.0 million.

On 6 September 2017 the Company announced the publication of a prospectus in relation to an offer for subscription for new Ordinary shares. The Company is aiming to raise circa £6 million out of a target of £32 million in aggregate that the Albion VCTs are seeking to raise. Assuming full subscription of the offer is obtained, net proceeds received by the Company will be approximately £5.85 million. The Offer will close on 24 August 2018, unless fully subscribed earlier, and the costs of the Offer will be limited to 2.5% of the gross proceeds of the Company's Offer. A Securities Note, which forms part of the prospectus, has been sent to shareholders.

CP1 VCT PLC is now in the process of a members' voluntary liquidation, which is expected to be completed by June 2018.

19. Related party transactions
Other than transactions with 100 per cent. owned Group companies and those with the Manager as disclosed in note 4, there are no other related party transactions. The Company has taken advantage of FRS 101 exemption paragraph 8.K. which allows the Company not to disclose related party transactions with wholly owned subsidiaries.

20. 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 30 June 2017 and 30 June 2016, 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 30 June 2017, 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 8 November 2017 at 11:00 am.

21. 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/CRWN, where the Report can be accessed via a link in the 'Financial Reports and Circulars' section.

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