TIDMAMD
The AIM Distribution Trust plc
Report & Accounts for the year ended 31 March 2009
FINANCIAL HIGHLIGHTS
2009 2008
pence pence
Net asset value (per share) 33.6 50.3
Cumulative distributions paid since launch 55.8 55.8
Total return (net asset value plus cumulative 89.4 106.1
distributions paid)
Interim distribution paid (per share) - 2.0
CHAIRMAN'S STATEMENT
As an AIM-focused VCT whose funds have to remain invested, your
Company is unavoidably exposed to the AIM market conditions. The
deterioration in the economy over the year ended 31 March 2009 has
been a significant influence on investor confidence, which has been
exaggerated in the case of smaller companies. These conditions have
caused a further fall in your Company's NAV over the year.
Net Asset Value
At 31 March 2009, the Net Asset Value per share ("NAV") stood at
33.6p. This represents a decrease of 16.7p or 33.2% since the
previous year end. Over the same period the FTSE AIM All Share
index fell by 57.0%.
VCT investments
The Company made several additions to its portfolio this year,
investing GBP101,000 into one follow-on investment and re-invested
GBP100,000 in one company following a corporate reconstruction.
At the year end, the Company held a portfolio consisting of 37
investments which were valued at GBP3.0 million. The portfolio
generated unrealised losses of GBP1.8 million and realised gains of
GBP97,000 over the year.
Details of the Company's VCT investments, including additions,
disposals and performance, are set out within the Investment
Manager's Report and Review of Investments.
Results
The loss on ordinary activities after taxation was GBP2,220,000 (2008:
GBP1,654,000), comprising a revenue loss of GBP31,000 and a capital loss
of GBP2,189,000.
Dividends
Shareholders will be aware that the Directors were forced to take the
unwelcome step of having to cancel the dividend the Company had
intended to pay in March 2009. Although the Company had sufficient
funds and reserves for the dividend, the sharp fall in the portfolio
valuation over a period of months meant that the Company was unable
to make the dividend payment without causing a technical breach of
the Companies Act.
In order to pay further dividends the Company is likely to have to
undergo a restructuring whereby it will reduce its share capital.
The Board is reviewing the costs of such an exercise, whilst also
considering other options for the Company which are discussed further
below.
Listed fixed income and other investments
The Company holds a non-qualifying portfolio which includes a holding
in a fixed income bond and holdings in three hedge funds. The
portfolio had a value of GBP975,000 at the year end and generated an
unrealised loss of GBP455,000 during the year and a realised loss of
GBP1,000.
Shareholder survey December 2008
The Company undertook a shareholder survey in December 2008 to try to
establish the level of Shareholders who deferred capital gains when
they invested in the Company. The responses to the survey have
provided the Board with a clear indication that a significant number
of Shareholders still defer capital gains by virtue of the
shareholding in the Company. As a result, the Board has concluded
that any future strategy must not force Shareholders into a position
where they cease to hold VCT qualifying shares (such as winding up
the Company) as this will create a capital gain tax problem for a
significant number of Shareholders.
Share buybacks
During the year, the Company bought in 445,637 shares for
cancellation as an average price of 44.6p per share, which was
generally at a 10% discount to the latest published NAV.
The Board has reviewed the share buyback policy and decided not to
acquire any further shares for the time being in order to preserve
liquid funds within the Company, avoid having to sell the Company's
more attractive holdings and to prevent the Company from becoming
unacceptably small as a result of buybacks.
The Directors appreciate that this is likely to make it very
difficult for Shareholders to dispose of their shares or may result
in Shareholders being offered prices at a substantial discount to the
NAV.
Future Strategy
In light of the above conclusions, the Board now believes the way
forward may include:
(i) seeking to merge the Company with one or more other VCTs;
(ii) undertaking a new fundraising to increase the size of the
fund; and
(iii) refocusing the Company's Investment policy, possibly
lowering the exposure to AIM.
The Board is exploring possible routes by which it might achieve one
or more of the above and provide Shareholders with the prospects of
improved performance, steady dividend flow and some type of share
buyback facility. When further progress has been made, I will
provide Shareholders with further details.
Annual General Meeting
The Annual General Meeting of the Company will be held at 159 New
Bond Street, London W1Y 9PA at 10:45am on 8 September 2009.
One special resolution is being proposed at the meeting to renew the
authority to allow the Company to make market purchases of the
Company's shares, should the Directors decide to resume share
buybacks.
Outlook
Throughout April and May 2009, the FTSE AIM All-Share Index showed
steady growth. At 30 May 2009, the Company's NAV had risen by 2.2p
since the 31 March 2009 to 35.8p per share. While this is welcomed,
the state of the economy indicates that this is unlikely to be the
start of a sustained recovery. Although there are reports of "green
shoots", the Board remains cautious and does not believe it is
realistic to expect that the Company will recover the value it has
lost over the last 18 months in the short or medium term.
The Board believes that the Company needs to be significantly larger,
or part of a significantly larger entity, to allow it to best support
growth and to provide Shareholders with a satisfactory, ongoing
dividend yield, along with some liquidity in the Company's shares.
The Board considers this is a realistic goal and will be in touch
with Shareholders as soon as there is firm news to report.
Sir Aubrey Brocklebank
Chairman
INVESTMENT MANAGER'S REPORT
We present an overview of the investment management activities for
the year ended 31 March 2009.
The last twelve months has been a very challenging period for equity
markets and a particularly torrid time for the smaller companies
market. UK smaller companies share prices have been under pressure
since the autumn of 2007 when credit markets started to tighten in
response to defaults in the US sub prime market. A readjustment of
risk throughout 2008 saw investors taking a more cautious stance
towards smaller companies. The worse falls in share prices occurred
in the second half of the year as the financial crisis intensified
with the effects of the credit crunch spreading to the wider economy,
resulting in the UK economy going into recession in the fourth
quarter. It is not unusual at this stage of the economic cycle to
see investors shy away from small companies. The falls have been
exacerbated by poor liquidity and compounded by forced sellers as
smaller company funds such as unit trusts, experienced redemptions,
necessitating sales of their underlying investments into an already
weak AIM share market.
For the record the FTSE 100 shares index showed a fall over the year
of 31.1%, whilst the FTSE Small Cap Index fell 42.4% and the AIM
Index declined 57.0%.
With falling asset prices and company valuations, we have pursued a
cautious reinvestment programme with just one new investment and one
additional investment into an existing holding.
Hoole Hall Spa & Leisure Ltd is a separate company set up to provide
spa and leisure facilities for Hoole Hall Country Club Ltd, which is
a country club hotel located on the Chester Ring Road. In May 2008
your Company invested GBP22,000 by way of equity and GBP78,000 into a
4.15% convertible loan note to help fund the construction of the new
health club and spa.
Hill Station plc is an ice cream manufacturer based in Cwmbran. Your
Company made its initial investment of GBP250,000 in 2005. Further
funding of GBP300,000 was provided, to help with working capital
following a short fall in sales owing to a very wet summer in 2007
and also to assist with the acquisition of the So Real Ice Company, a
rival ice cream manufacturer. A sharp increase in raw material costs
coupled with suppliers imposing lower credit limits saw a need for
additional working capital. In January 2008 your Company
participated in a fund raising and provided GBP80,000, the majority of
which was via a 10% loan note. Sales improved, helped by deliveries
to new customers. In late March 2008 the company's bank unexpectedly
imposed a cap on their factoring facility well below normal terms at
the time when the company was looking to build stock for the summer
season. Your Company provided a further GBP100,000 via a 15% loan
stock to assist with working capital. Unfortunately, customer
confidence was damaged by these funding difficulties which resulted
in a loss of business and sales falling below budget. By late summer
2008 it was clear that the company would not survive the winter
months without a further injection of cash. Given the fragile state
of the business, your Company together with other investors declined
to support the rescue plan and the company was placed into
administration in early October 2008.
The top ten holdings now account for 54% of the value of the
portfolio. ANS remains the largest holding in the portfolio, showing
a small increase over the year helped by new software service
contracts to the public sector.
Connaught continues to be the second largest holding despite selling
part of the holding (GBP78,000), for a very substantial profit. The
company have continued to gain market share in a fragmented but
buoyant social housing serving industry. Their presence in the
compliance market where local authorities are increasingly looking to
consolidate into fewer service providers has also benefited them.
Cadbury House has traded well and to budget whilst the building works
and refurbishment at Hoole Hall have gone well with planning
permission granted for a further 30 bedrooms to bring the total to
140 bedrooms. The hotel has now been badged DoubleTree® by Hilton
which will allow the company to benefit from the brand recognition
and Hilton's powerful internet reservation system. The expected
increase in clientele will benefit Hoole Hall Spa & Leisure.
Atlantic Global shows an appreciation over the year helped by share
buy backs, cash on the balance sheet and the release of new cost
effective, easy to use business management software solutions. Spice
moved from the AIM market to the Official List (main market). Two
partial sales were undertaken, realising a profit with proceeds of
GBP71,000. Since the date of these sales the share price has fallen
back sharply following the company's announcement of a more
challenging environment for their facilities business and a change of
accounting policy in their gas business saw investors taking a more
cautious stance.
The negative sentiment towards the company looks to be overdone and
recent director share purchases have seen a partial share price
recovery.
The domiciliary care business continues to perform well for Supporta
but their professional services business has not and needed to be
rationalised with parts sold. The company have been in bid talks but
nothing has yet been concluded. Deltex Medical still remains
unprofitable with a slower take up than originally expected of their
Cardio Q device which measures blood flow and fluid management.
A partial sale and profit was taken in Aero Inventory at GBP5.72 a
share to raise GBP55,000. The share price has, since the date of this
partial sale, fallen back sharply on the expectation that the global
economic downturn will result in fewer passenger miles being flown
and a resultant decrease in aircraft servicing needs. The company
does have long term contracts and a strong asset backing through the
stock they hold. Glisten has seen its shares fall to levels lower
than that at which it was founded in June 2002, despite the robust
growth in profits from their strong portfolio of brands. The fall in
share price is attributable to some weakness in the confectionary
division and their high debt levels from the acquisition of Dormen
Foods in 2007. This has now rightly forced the company to decide to
cut the dividend to conserve cash. This is a fundamentally sound
business which we expect to recover, so long as profits start to pay
down debt as we expect.
In August 2007 Clerkenwell Ventures raised GBP26 million to add to the
GBP4 million which had come from their original admission to AIM in
2004. Its strategy had been to acquire restaurant businesses.
Although a number of potential acquisitions had been considered, no
businesses had been acquired due to inflated restaurant valuations
taking time to adjust to the poor outlook for consumer spending. As
a result of not investing the money raised, the investment became non
qualifying for VCT investment. We have worked with the company and
they returned to shareholders GBP26.8 million of its near GBP30 million
of cash. Ludorum has successfully delivered its first series to the
BBC of Chuggington, an animated weekday programme of train adventures
for children.
Whilst some of the falls in share prices have been as a result of a
general severe mark down in valuations for smaller companies, other
falls have been due to investor concerns. This has particularly been
the case for companies with relatively high debt positions, often
faced with the prospect of having to renegotiate with a reluctant
bank looking to rebuild its own lending margins through tougher
lending terms. The general poor economic climate has hit consumer
related companies, with falls in Neutrahealth, Richoux Holdings and
Media Square, where for the latter any benefits gained from the
reorganisation plan that is currently being executed are being more
than offset by lower advertising spend.
Both TripleArc and Xpertise Group were taken over during the year,
the former at a loss over book cost and the latter a profit. Falling
profitability and mounting debt saw a disposal of Payzone which had
come from a previous merger with our holding in Cardpoint.
Neutrahealth saw its share price fall following a profits warning due
to pressure on sales of their vitamins, minerals and supplements
business and increase costs. Their largest shareholder, Elder
Pharmaceuticals has stated that it is considering its options
concerning the company that may or may not involve an offer.
Waterline, the kitchen business, suffered from lower demand,
undertook a cost cutting exercise, one of which was its decision to
de list from AIM. Around a third of all companies on AIM have a
market capitalisation of less than GBP5m. With profits under pressure
and one of the primary reasons for being on AIM, that of being able
to access funding from potential investors, not currently available,
we are seeing an increasing number of companies considering delisting
and saving the costs of being quoted.
Outlook
The economic newsflow continues to be poor with company profits under
pressure. For many companies, expansion plans are on hold as they
look to weather this downturn. Companies with leveraged balance
sheets are looking to reduce debt through the conservation of cash,
meaning possible dividend cuts and where possible fund raising from
investors, although for most smaller companies there is little
investor appetite. It is though worth noting an increasing number of
director share purchases in their own companies; a sign, perhaps,
that a great deal of pessimism is already reflected in the depressed
valuations for smaller companies and the confirmation of the real
value they offer for the patient investor. Smaller companies may
well remain friendless for some time but when credit markets ease
trade buyers may well appear should share prices not start to
pre-empt a turn for the better in the economic cycle.
Rathbone Investment Management Limited
REVIEW OF INVESTMENTS
Portfolio of investments
The following investments, all of which are incorporated in England
and Wales (except where otherwise stated), were held at 31 March
2009:
Valuation
movement % of
Cost Valuation in year portfolio
GBP'000 GBP'000 GBP'000 by value
Top ten venture capital
investments
ANS Group plc ** 253 573 5 13.0%
Connaught plc *** 30 362 (92) 8.2%
Cadbury House Limited * 319 319 - 7.2%
Doubletake Portraits Limited * 250 250 - 5.7%
Atlantic Global plc 310 248 87 5.6%
Spice plc 256 201 (114) 4.6%
Printing.com plc 178 155 (106) 3.5%
Hoole Hall Spa and Leisure 100 100 - 2.3%
Limited *
Supporta plc 250 98 (39) 2.2%
Deltex Medical Group plc 233 84 (89) 1.9%
2,179 2,390 (348) 54.2%
Other venture capital
investments
Aero Inventory plc 115 70 (229) 1.6%
Keycom plc ** 408 70 (35) 1.6%
The Medical House plc 223 58 (21) 1.3%
AT Communications plc 178 57 (78) 1.3%
Ludorum plc 40 50 10 1.1%
Neutrahealth plc 173 49 (90) 1.1%
Huveaux plc 283 41 (39) 0.9%
Sanastro Limited * 200 36 (34) 0.8%
Richoux Holdings plc 250 35 (76) 0.8%
(prev Gourmet Holdings)
1st Dental Laboratories plc 200 27 (32) 0.6%
Aortech International plc 569 25 (43) 0.6%
Straight plc 72 25 (4) 0.6%
Glisten plc 84 24 (98) 0.5%
Coffee Republic plc 713 13 (81) 0.3%
Quadnetics Group plc 34 12 (7) 0.3%
Clerkenwell Ventures plc 18 8 (3) 0.2%
Waterline plc * 243 5 (75) 0.1%
Media Square plc 119 3 (33) 0.1%
Cellcast plc 194 2 (5) -
The Real Good Food Company plc 91 2 (5) -
Top Ten Holdings plc 399 1 (19) -
Camaxys plc * 223 - - -
Chariot (UK) plc * 125 - - -
Dipford Group plc + 136 - (16) -
Hill Station plc + 663 - (398) -
Micap plc + 300 - (2) -
Real Affinity plc + 175 - (1) -
6,228 613 (1,414) 13.8%
Bonds
First Active 11¿% Bonds 558 245 (324) 5.6%
(Ireland)
Hedge Funds
Barclays Bank GAM Diversity 435 372 (44) 8.4%
Tracker
Bluecrest Allblue Fund LD ORD 196 228 8 5.2%
NPV
Goldman Sachs Dynamic Opp. LD 207 130 (95) 2.9%
NPV
838 730 (131) 16.5%
Subtotal 9,803 3,978 (2,217) 90.1%
Cash at bank and in hand 435 9.9%
Total investments 4,413 100.0%
All investments are quoted on AIM unless otherwise stated:
* Unquoted ** Quoted on the PLUS Market
*** Full list + In Administration
Investment movements for the year ended 31 March 2009
Additions
Total
GBP'000
Follow on investments
Hill Station plc 100
Sundry investments 1
101
Unquoted investments
Hoole Hall Spa and Leisure Limited 100
Total investments 201
Disposals
Realised
Profit/ gain/
MV at (loss) (loss) in
Cost 31/03/08* Proceeds vs cost the year
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Reconstructions/takeovers
TripleArc plc 247 12 50 (197) 38
Xpertise Group plc 81 77 140 59 63
Full disposal
Payzone plc 105 83 11 (94) (72)
Partial disposals
Aero Inventory plc 22 57 55 33 (2)
Clerkenwell Ventures plc 158 106 150 (8) 44
Connaught plc 5 76 78 73 2
Printing.com plc 6 9 10 4 1
Spice plc 47 58 71 24 13
Straight plc 33 13 23 (10) 10
Liquidations
Disperse Group plc 250 - - (250) -
Hedge Funds
Barclays Bank GAM 228 218 217 (11) (1)
Diversity Tracker
Bluecrest Allblue Fund 26 29 30 4 1
LD ORD NPV
Goldman Sachs Dynamic 15 17 16 1 (1)
Opp. LD NPV
1,223 755 851 (372) 96
* Adjusted for purchases in the year
Statement of Directors' responsibilities
The Directors are responsible for preparing the Annual Report, the
Directors Remuneration Report, and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law the Directors have elected to
prepare the financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting
Standards and applicable law). The financial statements are required
by law to give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that period. In
preparing those financial statements, the Directors are required to:
* select suitable accounting policies and then apply them
consistently;
* make judgements and estimates that are reasonable and
prudent;
* state whether applicable UK Accounting Standards have
been followed, subject to any material departures disclosed and
explained in the financial statements; and
* prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the Company will
continue in business.
The Directors are also required by the Disclosure and Transparency
Rules of the Financial Services Authority to include a management
report containing a fair review of the business and a description of
the principal risks and uncertainties facing the company.
The Directors are responsible for keeping proper accounting records
which disclose with reasonable accuracy at any time the financial
position of the Company and to enable them to ensure that the
financial statements, and the Directors Remuneration Report, comply
with the requirements of the Companies Act 1985. They are also
responsible for safeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection of fraud and
other irregularities.
Directors' statement pursuant to the Disclosure and Transparency
Rules
Each of the Directors, confirms that, to the best of each person's
knowledge:
* the financial statements, prepared in accordance with
United Kingdom Generally Accepted Accounting Practice, give a true
and fair view of the assets, liabilities, financial position and
loss of the Company; and
* the Directors' Report contained in the Annual Report
includes a fair review of the development and performance of the
business and the position of the company together with a
description of the principal risks and uncertainties that it faces.
Statement as to disclosure of information to Auditors
The Directors in office at the date of the report have confirmed
that, as far as they are aware, there is no relevant audit
information of which the Auditors are unaware. Each of the Directors
has confirmed that they have taken all the steps that they ought to
have taken as directors in order to make themselves aware of any
relevant audit information and to establish that it has been
communicated to the Auditors.
By order of the Board
Grant Whitehouse
Secretary
Kings Scholars House
230 Vauxhall Bridge Road
London SW1V 1AU
INCOME STATEMENT
for the year ended 31 March 2009
2009 2008
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income 146 - 146 218 - 218
Losses on investments - (2,121) (2,121) - (1,574) (1,574)
146 (2,121) (1,975) 218 (1,574) (1,356)
Investment management (22) (68) (90) (34) (100) (134)
fees
Other expenses (155) - (155) (158) (6) (164)
Return on ordinary
activities (31) (2,189) (2,220) 26 (1,680) (1,654)
before tax
Tax on ordinary - - - - - -
activities
Return attributable
to equity (31) (2,189) (2,220) 26 (1,680) (1,654)
shareholders
Basic and diluted
return per (0.2p) (16.5p) (16.7p) 0.2p (12.0p) (11.8p)
share
The revenue and capital movements in the year relate to continuing
operations. The total column within the Income Statement represents
the profit and loss account of the Company.
A Statement of Total Recognised Gains and Losses has not been
prepared as all gains and losses are recognised within the Income
Statement as noted above.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the year ended 31 March 2009
2009 2008
GBP'000 GBP'000
Opening shareholders' funds 6,832 9,108
Purchase of own shares (199) (346)
Total recognised losses for the year (2,220) (1,654)
Distributions paid - (276)
Closing shareholders' funds 4,413 6,832
BALANCE SHEET
at 31 March 2009
2009 2008
GBP'000 GBP'000 GBP'000 GBP'000
Fixed assets
Investments 3,978 6,749
Current assets
Debtors 53 191
Cash at bank and in hand 435 42
488 233
Creditors: amounts falling due
within one year (53) (150)
Net current assets 435 83
Net assets 4,413 6,832
Capital and reserves
Called up share capital 3,285 3,396
Capital redemption reserve 1,126 1,015
Share premium 348 348
Investment holding losses (5,825) (4,076)
Capital reserve - realised 5,454 6,093
Revenue reserve 25 56
Equity shareholders' funds 4,413 6,832
Basic and diluted net asset value 33.6p 50.3p
per share
CASH FLOW STATEMENT
for the year ended 31 March 2009
Year ended Year ended
31 March 2009 31 March 2008
GBP'000 GBP'000 GBP'000 GBP'000
Net cash outflow from operating (129) (88)
activities
Capital expenditure
Purchase of investments (201) (2,438)
Sale of investments 1,005 2,044
Net cash inflow/(outflow) 804 (394)
from capital expenditure
Equity distributions paid - (276)
Net cash inflow/(outflow) before 675 (758)
financing
Financing
Purchase of own shares (199) (436)
Net cash outflow from financing (199) (436)
Increase/ (decrease) in cash in the 476 (1,194)
year
NOTES TO THE ACCOUNTS
for the year ended 31 March 2009
1. Accounting policies
Basis of accounting
The Company has prepared its financial statements under UK Generally
Accepted Accounting Practice ("UK GAAP") and in accordance with the
Statement of Recommended Practice "Financial Statements of Investment
Trust Companies and Venture Capital Trusts" January 2009 ("SORP").
The financial statements are prepared under the historical cost
convention except for the revaluation of certain financial
instruments.
The Company implements new Financial Reporting Standards ("FRS")
issued by the Accounting Standards Board when required. No new
standards were issued for implementation for the year under review.
The Association of Investment Companies issued a new SORP in January
2009 which has been adopted for these financial statements. No
comparative restatements have been required as a result of the
implementation of the new SORP.
Presentation of Income Statement
In order to better reflect the activities of a Venture Capital Trust
and in accordance with guidance issued by the Association of
Investment Companies ("AIC"), supplementary information which
analyses the income statement between items of a revenue and capital
nature has been presented alongside the Income Statement. The net
revenue is the measure the Directors believe appropriate in assessing
the Company's compliance with certain requirements set out in Part 6
of the Income Tax Act 2007.
Investments
Venture capital investments are designated as "fair value through
profit or loss" assets due to investments being managed and
performance evaluated on a fair value basis. A financial asset is
designated within this category if it is both acquired and managed on
a fair value basis, with a view to selling after a period of time, in
accordance with the Company's documented investment policy. The fair
value of an investment upon acquisition is deemed to be cost.
Thereafter investments are measured at fair value in accordance with
the International Private Equity and Venture Capital Valuation
Guidelines "IPEV" together with FRS26.
Listed fixed income investments, hedge funds, investments quoted on
AIM and those traded on the PLUS Market are measured using bid prices
in accordance with the IPEV.
In respect of unquoted instruments, fair value is established by
using the IPEV. The valuation methodologies for unquoted entities
used by the IPEV to ascertain the fair value of an investment are as
follows:
* Price of recent investment;
* Earnings multiple;
* Net assets;
* Discounted cash flows or earnings (of underlying
business);
* Discounted cash flows (from the investment); and
* Industry valuation benchmarks.
The methodology applied takes account of the nature, facts and
circumstances of the individual investment and uses reasonable data,
market inputs, assumptions, estimates in order to ascertain fair
value.
Where an investee company has gone into receivership or liquidation
the loss on the investment, although not physically disposed of, is
treated as being realised.
Gains and losses arising from changes in fair value are included in
the income statement as a capital item and transaction costs on
acquisition or disposal of the investment expensed.
It is not the Company's policy to exercise either significant or
controlling influence over investee companies. Therefore the results
of these companies are not incorporated into the revenue account
except to the extent of any income accrued.
Income
Dividend income from investments is recognised when the shareholder's
right to receive payment has been established; normally the ex
dividend date.
Interest income is accrued on a time apportionment basis, by
reference to the principal sum outstanding and at the effective
interest rate applicable and only where there is reasonable certainty
of collection.
Expenses
All expenses are accounted for on an accruals basis. In respect of
the analysis between revenue and capital items presented within the
income statement, all expenses have been presented as revenue items
except as follows:
Expenses which are incidental to the acquisition of an investment are
deducted from the Capital Account.
Expenses which are incidental to the disposal of an investment are
deducted from the disposal proceeds of the investment.
Expenses are split and presented partly as capital items where a
connection with the maintenance or enhancement of the value of the
investments held can be demonstrated and accordingly the investment
management fee and finance costs have been allocated 25% to revenue
and 75% to capital, in order to reflect the Directors' expected
long-term view of the nature of the investment returns of the
Company.
Taxation
The tax effects on different items in the Income Statement are
allocated between capital and revenue on the same basis as the
particular item to which they relate using the Company's effective
rate of tax for the accounting period.
Due to the Company's status as a Venture Capital Trust and the
continued intention to meet the conditions required to comply with
Part 6 of the Income Tax Act 2007, no provision for taxation is
required in respect of any realised or unrealised appreciation of the
Company's investments which arises.
Deferred taxation is provided in full on timing differences that
result in an obligation at the balance sheet date to pay more tax, or
a right to pay less tax, at a future date, at rates expected to apply
when they crystallise based on current tax rates and law. Timing
differences arise from the inclusion of items of income and
expenditure in taxation computations in periods different from those
in which they are included in the accounts and is recognised on a
non-discounted basis.
Other debtors and other creditors
Other debtors (including accrued income) and other creditors are
included within the accounts at amortised cost, equivalent to the
fair value of the expected balance receivable/payable by the Company.
2. Return per share
Revenue return per Ordinary Share is based on the net revenue loss
after taxation of GBP31,000 (2008: return GBP26,000) in respect of
13,300,205 Ordinary Shares (2008: 14,003,193), being the weighted
average number of ordinary shares in issue during the year.
Capital return per Ordinary Share is based on the net capital loss
for the financial year of GBP2,189,000 (2008: GBP1,680,000) in respect of
13,300,205 Ordinary Shares (2008: 14,003,193), being the weighted
average number of ordinary shares in issue during the year.
As the Company has not issued any convertible securities or share
options, there is no dilutive effect on return per ordinary share.
The return per share disclosed therefore represents both basic and
diluted return per ordinary share.
3. Net Asset Value per Ordinary Share
2009 2008
Net asset value Net asset Net asset value Net asset
per share value per share value
pence GBP'000 pence GBP'000
Ordinary shares 33.6 4,413 50.3 6,832
Net Asset Value per Ordinary Share is based on net assets at the
year-end, and on 13,140,436 Ordinary Shares (2008: 13,586,073), being
the number of Ordinary Shares in issue at the year-end.
As the Company has not issued any convertible securities or share
options, there is no dilutive effect on Net Asset Value per Ordinary
Share. The Net Asset Value per share disclosed therefore represents
both basic and diluted Net Asset Value per Ordinary Share.
4. Principal financial risks
The principal financial risks faced by the Company, include interest
rate, liquidity, investment and marketability risks.
In addition to these risks, the Company, as a fully listed Company on
the London Stock Exchange and as a Venture Capital Trust, operates in
a complex regulatory environment and therefore faces a number of
related risks. A breach of the VCT Regulations could result in the
loss of VCT status and consequent loss of tax reliefs currently
available to Shareholders and the Company being subject to capital
gains tax. Serious breaches of other regulations, such as the UKLA
Listing Rules and the Companies Act 1985, could lead to suspension
from the Stock Exchange and damage to the Company's reputation.
The Board reviews and agrees policies for managing each of these
risks. They receive quarterly reports from the Managers which monitor
the compliance of these risks, and place reliance on the Managers to
give updates in the intervening periods. These policies have remained
unchanged since the beginning of the financial period.
The principal financial risks are outlined further as follows:
Market risks
The key market risks to which the Company is exposed are interest
rate risk and market price risk.
Interest rate risk
The Company receives interest on cash deposits at a rate agreed with
its banker, while investments in loan stock and fixed interest
investments predominately attract interest at fixed rates. As the
Company must comply with the VCT regulations, increases in interest
rates could lead to a potential breach of these regulations as the
proportion of the Company's income from sources other than shares and
securities could exceed the required level. The Company therefore
monitors the level of income received from fixed, floating and non
interest rate assets to ensure that the regulations are not breached.
The Company has reviewed the financial impact of the interest rate
risk, with 0.5% change in base rate (i.e. reducing base rate to Nil)
changing income and the return for the year by GBP4,000, equivalent to
a 5.8% impact on overall income receivable by the Company. Such a
change would have an immaterial impact on Net Asset Value.
Market price risk
Market price risk arises from uncertainty about the future prices of
financial instruments held in accordance with the Company's
investment objectives. It represents the potential loss that the
Company might suffer through holding market positions in the face of
market movements. At 31 March 2009, the net unrealised loss on the
quoted portfolios (Full list, AIM-quoted, PLUS-quoted and
Non-qualifying investments) was GBP4.5 million (2008: GBP3.4 million).
The investments the Company holds are, in the main, thinly traded
and, as such, the prices are more volatile than those of more widely
traded securities. In addition, the ability of the Company to
realise the investments at their carrying value may at times not be
possible if there are no willing purchasers. The ability of the
Company to purchase or sell investments is also constrained by the
requirements set down for Venture Capital Trusts.
The Board considers each investment purchase to ensure that an
acquisition will enable the Company to continue to have an
appropriate spread of market risk and that an appropriate risk reward
profile is maintained.
It is not the Company's policy to use derivative instruments to
mitigate market risk, as the Board believes that the effectiveness of
such instruments does not justify the cost involved.
Credit risk
Credit risk is the risk that the counterparty to a financial
instrument is unable to discharge a commitment to the Company made
under that instrument. The carrying values of financial assets best
represent the maximum credit risk exposure at the balance sheet date.
Credit risk in respect of investments in listed fixed interest
investments (when held by the Company) is minimised by investing in
either UK Government Stocks or Banks with an A rating or higher.
Investments in loan stocks comprise a fundamental part of the
Company's venture capital investments therefore credit risk in
respect of these investments is managed within the main investment
management procedures.
Credit risk in respect of interest, dividends and other receivables
are predominantly covered within the investment management
procedures.
Liquidity risk
Liquidity risk is the risk that the Company encounters difficulties
in meeting obligations associated with its financial liabilities. As
the Company only ever has a very low level of creditors and has no
borrowings, the Board believes that the Company's exposure to
liquidity risk is minimal.
Announcement based on audited accounts
The financial information set out in this announcement does not
constitute the Company's statutory financial statements in accordance
with section 434 Companies Act 2006 for the year ended 31 March 2009,
but has been extracted from the statutory financial statements for
the year ended 31 March 2009, which were approved by the Board of
Directors on 14 July 2009 and will be delivered to the Registrar of
Companies following the Company's Annual General Meeting. The
Independent Auditor's Report on those financial statements was
unqualified and did not contain any emphasis of matter nor statements
under s 498(2) and (3) of the Companies Act 2006.
The statutory accounts for the year ended 31 March 2008 have been
delivered to the Registrar of Companies and received an Independent
Auditors report which was unqualified and did not contain any
emphasis of matter nor statements under S237(2) or (3) of the
Companies Act 1985.
A copy of the full annual report and financial statements for the
year ended 31 March 2009 will be printed and posted to shareholders
shortly. Copies will also be available to the public at the
registered office of the Company at Kings Scholars House, 230
Vauxhall Bridge Road, London SW1V 1AU and will be available for
download from www.downing.co.uk.
=--END OF MESSAGE---
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.
Aim Distribution Trust (LSE:AMD)
Gráfico Histórico do Ativo
De Nov 2024 até Dez 2024
Aim Distribution Trust (LSE:AMD)
Gráfico Histórico do Ativo
De Dez 2023 até Dez 2024
