UPDATE: Albion Venture Capital Trust PLC: Annual Financial Report

(MENAFNEditorial) link="blue" vlink="purple"> This is an update of the announcement from 13:05 27.06.2017 BST. Reason for the update: Other information and Publication information added to the notes at the end of the announcement. Albion Venture Capital Trust PLC LEI number: 213800JKELS32V2OK421

As required by the UK Listing Authority's Disclosure and Transparency Rules 4.1 and 6.3, Albion Venture Capital Trust PLC today makes public its information relating to the Annual Report and Financial Statements for the year ended 31 March 2017.

This announcement was approved for release by the Board of Directors on 27 June 2017.

This announcement has not been audited.

You will shortly be able to view the Annual Report and Financial Statements for the year to 31 March 2017 (which have been audited) at www.albion.capital/funds/AAVC. The Annual Report and Financial Statements for the year to 31 March 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 and policyThe investment strategy of Albion Venture Capital Trust PLC (the "Company") is to manage the risk normally associated with investments in smaller unquoted companies whilst maintaining an attractive yield, through allowing investors the opportunity to participate in a balanced portfolio of asset-backed businesses. The Company's investment portfolio will thus be structured to provide a balance between income and capital growth for the longer term.

This is achieved as follows:

qualifying unquoted investments are predominantly in specially-formed companies which provide a high level of asset backing for the capital value of the investment; the Company invests alongside selected partners with proven experience in the sectors concerned; investments are normally structured as a mixture of equity and loan stock. The loan stock represents the majority of the finance provided and is secured on the assets of the portfolio company. Funds managed or advised by Albion Capital Group LLP typically own 50 per cent. of the equity of the portfolio company; other than the loan stock issued to funds managed or advised by Albion Capital Group LLP, portfolio companies do not normally have external borrowings. The Company offers tax-paying investors substantial tax benefits at the time of investment, on payment of dividends and on the ultimate disposal of the investment.

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

Background to the CompanyThe Company is a venture capital trust which raised a total of £39.7 million through an issue of Ordinary shares in the spring of 1996 and through an issue of C shares in the following year. The C shares merged with the Ordinary shares in 2001. The Company has raised a further £26.9 million under the Albion VCTs Top Up Offers since 2011.

On 25 September 2012, the Company acquired the assets and liabilities of Albion Prime VCT PLC ("Prime") in exchange for new shares in the Company. Each Prime shareholder received 0.8801 shares in the Company for each Prime share that they held at the date of the Merger.

Financial calendar

Record date for first dividend 7 July 2017 Payment of first dividend 31 July 2017 Annual General Meeting 11:00am on 14 August 2017 Announcement of half-yearly results for the six months ended 30 September 2017 December 2017 Payment of second dividend (subject to Board approval) 31 January 2018 Financial highlights

8.7p Basic and diluted total return per share for the year ended 31 March 2017 5.0p Total tax-free dividend per share paid during the year ended 31 March 2017 75.4p Net asset value per share as at 31 March 2017 220.2p Total shareholder return since launch to 31 March 2017 7.4% Tax free yield on share price (dividend per annum/share price as at 31 March 2017) 6.4% Annualised return since launch (without tax relief) 31 March 2017 31 March 2016 (pence per share) (pence per share) Dividends paid 5.0 5.0 Revenue return 1.9 2.0 Capital return 6.8 3.6 Net asset value 75.4 72.0 Total shareholder return to 31 March 2017 Ordinary shares Total dividends paid during the year ended : 31 March 1997 2.00 31 March 1998 5.20 31 March 1999 11.05 31 March 2000 3.00 31 March 2001 8.55 31 March 2002 7.60 31 March 2003 7.70 31 March 2004 8.20 31 March 2005 9.75 31 March 2006 11.75 31 March 2007 10.00 31 March 2008 10.00 31 March 2009 10.00 31 March 2010 5.00 31 March 2011 5.00 31 March 2012 5.00 31 March 2013 5.00 31 March 2014 5.00 31 March 2015 5.00 31 March 2016 5.00 31 March 2017 5.00 Total dividends paid to 31 March 2017 144.80 Net asset value as at 31 March 2017 75.40 Total shareholder return to 31 March 2017 220.20 The financial summary above is for the Company, Albion Venture Capital Trust PLC Ordinary shares only. Details of the financial performance of the C shares and Albion Prime VCT PLC, which have been merged into the Company, can be found at the end of this report.

In addition to the dividends summarised above, the Board has declared a first dividend for the year ending 31 March 2018 of 2.5 pence per share to be paid on 31 July 2017 to shareholders on the register on 7 July 2017.

Notes

Dividends paid before 5 April 1999 were paid to qualifying shareholders inclusive of the associated tax credit. The dividends for the year to 31 March 1999 were maximised in order to take advantage of this tax credit. All dividends paid by the Company are paid free of income tax to qualifying shareholders. It is an H.M. Revenue & Customs requirement that dividend vouchers indicate the tax element should dividends have been subject to income tax. Investors should ignore this figure on their dividend voucher and need not disclose any income they receive from a VCT on their tax return. The net asset value of the Company is not its share price as quoted on the official list of the London Stock Exchange. The share price of the Company can be found in the Investment Companies - VCTs section of the Financial Times on a daily basis. Investors are reminded that it is common for shares in VCTs to trade at a discount to their net asset value. Chairman's statement

IntroductionThe results for the year to 31 March 2017 show a total return of 8.7 pence per share, against 5.6 pence per share for the previous year, and net assets of 75.4 pence per share compared to 72.0 pence per share at 31 March 2016, following the payment of total tax-free dividends of 5 pence per share.

It is encouraging that the Company's total return continues for the third year to more than cover its dividend of 5 pence per share. This has been partly through an increase in the income generated by the investment portfolio, which has risen 12 per cent. from the previous year. The principal element, however, has come from capital uplifts; in particular the uplift in the third party valuations of our care homes.

Investment performance and progressIn general, we have been continuing the task of repositioning the portfolio, aimed at a reduced reliance on sectors that are exposed to the consumer and business cycle. Healthcare now accounts for 35 per cent. of the portfolio, renewable energy accounts for 17 per cent., while education continues to account for 7 per cent.. Hotels, meanwhile, have reduced from 23 per cent. to 18 per cent..

Taking these sectors in turn, Shinfield View, Reading, which is one of our three care homes, opened in April 2016. Active Lives Care (trading as Cumnor Hill House), which is based in Oxford, opened in June 2016; and Ryefield Court, based in Hillingdon in West London, opened in July 2016. All three care homes are building towards good levels of occupancy, at rates significantly higher than originally forecast, leading to pleasing uplifts in the independent third party valuations.

Our renewable energy investments are now mature, other than our biogas plant, Earnside Energy, which is currently expanding its capacity. In general, it is intended to hold these cash-generative investments for the longer term with the aim of providing low risk diversification for the investment portfolio as a whole, combined with a strong source of income.

In education, Radnor House Twickenham now has over 400 pupils while pupil numbers at Radnor House Sevenoaks, formerly Combe Bank School, have already reached 300.

We continue to review our hotel portfolio with a view to reducing our exposure further. Trading at the Holiday Inn Express at Stansted Airport has been strong, but the valuation has been reduced in light of a new, competing, hotel opening in the summer. Trading at the Crown hotel in Harrogate has been similar to prior year while the Stanwell Hotel has continued to face challenges.

With regard to our pubs, our portfolio of units in the North West, within Bravo Inns and Bravo Inns II, continues to expand its operations. Meanwhile The Charnwood Pub Company (renamed MHS 1 Limited) completed the disposal of its pub portfolio. After the year end The Weybridge Club Limited (renamed TWCL Limited) sold the assets of its business.

Results and dividendsAs at 31 March 2017, the net asset value was £65.5 million or 75.4 pence per share, compared to £57.0 million or 72.0 pence per share as at 31 March 2016, after the payment of total tax-free dividends of 5 pence per share. The results comprised a total return of 8.7 pence per share for the year (2016: 5.6 pence per share), which is made up of a 1.9 pence per share revenue return (2016: 2.0 pence per share) and a 6.8 pence per share capital return (2016: 3.6 pence per share). The revenue return before taxation was £1.8 million compared to £1.7 million for the year to 31 March 2016. The Company will pay a first dividend of 2.5 pence per share for the year ending 31 March 2018 on 31 July 2017 to shareholders on the register on 7 July 2017, which is in line with the Company's current objective of paying a dividend of 5 pence per share annually. Thereafter, it is intended that payment of the next dividend will be made at the end of January 2018, which was previously paid to shareholders in December.

Risks and uncertaintiesThe outlook for the UK economy, continues to be the key risk affecting your Company. The forthcoming withdrawal from the European Union may have an effect on the Company and its investments, although the extent of the effect is not quantifiable at this time. However, we would expect the effect to be felt most in those sectors which are most exposed to the consumer and business cycle.

The regulatory environment in which the Company operates has had significant input from rules developed within the European Union and it is uncertain what changes may occur in a separate UK regulatory environment.

The Company's policy remains that its portfolio companies should not normally have external borrowings and for the Company normally to have a first charge over portfolio companies' assets. The Board and the Manager see this as an important factor in the control of investment risk. However, certain portfolio companies may take on external borrowings, where the Board considers this will offer a significant benefit to the Company.

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

Board compositionAs you may know, I have been chairman of your Company since its launch in 1996 and I have indicated to the Board that I intend to retire at the Annual General Meeting in August 2018. Ebbe Dinesen has indicated that he would also like to retire, at the Annual General Meeting in 2019. The nomination committee is therefore in the process of reviewing candidates and announcements of replacements will be made in due course. We believe that it will be helpful to have some overlap of new directors joining the Board before we retire. To facilitate this, a resolution will be proposed at the Annual General Meeting to raise the aggregate annual limit for total Directors' fees to £150,000, which will facilitate increasing the Board's size but will not be used to increase the individual Director's fees.

Albion VCTs Top Up OffersThe Company raised approximately £0.3 million during the year under the Albion VCTs Prospectus Top Up Offers 2015/2016 and approximately £5.6 million under the Albion VCTs Prospectus Top Up Offers 2016/2017, with a subsequent £0.3 million after the year end.

The Company announced on 14 June 2017 that, subject to regulatory approval, it intends to launch a prospectus top up offer of new ordinary shares for subscription in the 2017/2018 and 2018/2019 tax years. Full details of the Offer will be contained in a prospectus that is expected to be published in early September 2017 and will be available on the Albion Capital website (www.albion.capital).

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 still the Board's policy to buy back shares in the market, subject to the overall criterion that such purchases are in the Company's interest. The total value bought in for the year ended 31 March 2017 was £873,000. Subject to the constraints referred to above and subject to first purchasing shares held by the market makers, the Board will target 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.

Continuation as a venture capital trustAt the 2017 Annual General Meeting shareholders have the opportunity to confirm that they wish the Company to continue as a venture capital trust. Otherwise the Board is required to make proposals for the reorganisation, reconstruction or the orderly liquidation and winding up of the Company and present these to the members at a general meeting. Those shareholders who have been using their investment in the VCT to defer a capital gain should note that, on a return of capital, that gain would become chargeable at the prevailing rate of capital gains tax.

Your Board believes that the Albion VCTs have the potential to be highly effective long-term investment vehicles, with strong tax-free dividend streams. Therefore, the Board recommends that shareholders should vote in favour of the Company continuing as a venture capital trust, as they intend to vote in respect of their own shares. Further details regarding the resolution can be found in the Directors' report on page 23 of the full Annual Report and Financial Statements.

Outlook and prospectsWe are pleased with the progress made during the course of the year, in particular the building up of our healthcare portfolio. Looking forward, there are a number of interesting areas for investment in the pipeline and we would anticipate further progress in the current year.

David Watkins Chairman27 June 2017

Strategic report

Investment objective and policyThe Company's investment policy is to provide investors with the opportunity to participate in a balanced portfolio of asset-backed businesses. The Company's investment portfolio will thus be structured to provide a balance between income and capital growth for the longer term.

This is achieved as follows:

qualifying unquoted investments are predominantly in specially-formed companies which provide a high level of asset backing for the capital value of the investment; the Company invests alongside selected partners with proven experience in the sectors concerned; investments are normally structured as a mixture of equity and loan stock. The loan stock normally represents the majority of the finance provided and is secured on the assets of the portfolio company. Funds managed or advised by Albion Capital Group LLP typically own 50 per cent. of the equity of the portfolio company; and other than the loan stock issued to funds managed or advised by Albion Capital Group LLP, portfolio companies do not normally have external borrowings. As defined by the Articles of Association, the Company's maximum exposure in relation to gearing is restricted to 10 per cent. of the adjusted share capital and reserves. The Directors do not currently have any intention to utilise gearing for the Company.

Current portfolio sector allocationThe pie chart at the end of this announcement shows the split of the portfolio valuation by industrial or commercial sector as at 31 March 2017. Details of the principal investments made by the Company are shown in the Portfolio of investments on pages 16 and 17 of the full Annual Report and Financial Statements.

Direction of portfolioThe sector analysis of the Company's investment portfolio shows that healthcare now accounts for 35 per cent. of the portfolio, compared to 22 per cent. at the end of the previous financial year, following further investments in the Company's three care homes and £6.8 million uplift in valuations. This may increase further as the care homes approach maturity and are revalued in the future. Renewable energy accounts for 17 per cent. of the portfolio, but no new investments are being made in this sector as they are no longer allowed under VCT rules. Hotels accounted for 18 per cent. compared to 23 per cent. at the previous year end and the Company is looking to reduce this further.

Results and dividends

Ordinary shares£'000 Net revenue return for the year ended 31 March 2017 1,510 Net capital gain for the year ended 31 March 2017 5,501 Total return for the year ended 31 March 2017 7,011 Dividend of 2.5 pence per share paid on 29 July 2016 (1,987) Dividend of 2.5 pence per share paid on 30 December 2016 (1,986) Unclaimed dividends returned to the Company 9 Transferred to reserves 3,047 Net assets as at 31 March 2017 65,475 Net asset value per share as at 31 March 2017 (pence) 75.4 The Company paid dividends totalling 5.0 pence per share during the year ended 31 March 2017 (2016: 5.0 pence per share). The dividend objective of the Board is to provide Shareholders with a strong, predictable dividend flow, with a dividend target of 5.0 pence per share per year.

As noted in the Chairman's statement, the Board has declared a first dividend of 2.5 pence per share for the year ending 31 March 2018. This dividend will be paid on 31 July 2017 to shareholders on the register on 7 July 2017.

As shown in the Income statement, the Company's investment income has increased to £2,381,000 (2016: £2,236,000) and the total revenue return to equity holders also increased to £1,510,000 (2016: £1,403,000), principally driven by the Company's successful renewable energy development programme. Income continues to more than cover on-going expenses. Although total income has increased, revenue return per share has decreased slightly, to 1.9 pence per share (2016: 2.0 pence per share), due to the number of new shares issued during the year. The capital gain on investments for the year was £6,179,000 (2016: £3,203,000), offset by management fees charged to capital and the related taxation impact, resulting in a capital return of 6.8 pence per share (2016: 3.6 pence per share). The total return was 8.7 pence per share (2016: 5.6 pence per share).

The Balance sheet shows that the net asset value has increased over the last year to 75.4 pence per share (2016: 72.0 pence per share), reflecting the total return exceeding the level of dividends paid during the year.

The cash flow for the Company has been a net inflow of £166,000 for the year (2016: inflow £1,328,000), reflecting cash inflows from operations, disposal proceeds and the issue of Ordinary shares under the Albion VCTs Top Up Offers, offset by dividends paid, new investments in the year and the buy-back of shares.

During the year, unclaimed dividends older than twelve years of £9,000 (2016: £22,000) were returned to the Company in accordance with the terms of the Articles of Association.

Review of business and future changesA review of the Company's business during the year and investment performance and progress is contained in the Chairman's statement above. The healthcare sector performed particularly well again this year with an increase in valuations of £6,791,000 (2016: £1,517,000). After strong increases in previous years, the renewable energy sector saw modest increases overall. The hotel sector saw a decrease of £944,000 (2016: £524,000 uplift) principally as a result of caution in the light of new competition for our hotel at Stansted Airport. The education sector saw an increase in valuation of £618,000 (2016: £337,000) as Radnor House Sevenoaks boosted pupil numbers. TWCL Limited (previously The Weybridge Club Limited) decreased in valuation by £145,000 which subsequently sold its business and assets after the year end.

The Company continues with its objective to invest in asset-based 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. The Directors do not foresee any major changes in the activity undertaken by the Company in the current year.

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

VCT regulationThe 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 21 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; and A VCT can only make qualifying investments or certain specified non-qualifying investments such as money market securities and short term deposits. While these changes were significant, the Manager's assessment is that had they been in place previously they would have affected only a relatively small minority of the investments that we have made into new portfolio companies over recent years. The Board's current view is that there will be no material change in our investment policy as a result. The relevant tests to measure compliance have been carried out and independently reviewed for the year ended 31 March 2017. These showed that the Company has complied with all tests and continues to do so.

Future prospectsThe Company's performance record reflects the resilience of the strategy outlined above and has enabled the Company to maintain a predictable stream of dividend payments to shareholders. The Board believes that this model will continue to meet the investment objective and has the potential to deliver attractive returns to shareholders in the future.

Key performance indicatorsThe Directors believe that the following key performance indicators, which are typical for venture capital trusts and used by the Board in its assessment of the Company, will provide shareholders with sufficient information to assess how effectively the Company is applying its investment policy to meet its objective. The Directors are satisfied that the results shown in the following key performance indicators give a good indication that the Company is achieving its investment objective and policy. These are:

Total shareholder return relative to FTSE All Share Index total returnThe graph on page 4 of the full Annual Report and Financial Statements shows the Company's total shareholder return against the FTSE All-Share Index total return, in both instances with dividends reinvested. Net asset value per share and total shareholder returnNet asset value increased by 11.7 per cent. (after adding back the 5.0 pence per share in dividends paid) to 75.4 pence per share for the year ended 31 March 2017.Total shareholder return increased by 4.0 per cent. to 220.2 pence per share for the year ended 31 March 2017. Dividend distributionsDividends paid in respect of the year ended 31 March 2017 were 5.0 pence per share (2016: 5.0 pence per share), in line with the Board's dividend objective. Cumulative dividends paid since inception amount to 144.8 pence per Ordinary share and 133.25 pence per historic C share. Ongoing charges The ongoing charges ratio for the year to 31 March 2017 was 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. The cap on total annual normal expenses, including the management fee, is 3.0 per cent. of the net asset value. GearingAs defined by the Articles of Association, the Company's maximum exposure in relation to gearing is restricted to 10 per cent. of the adjusted share capital and reserves. The Directors do not currently have any intention to utilise gearing for the Company. On an exceptional basis, certain portfolio companies may take on external borrowings, where the Board considers this will offer a significant benefit to the Company.

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

Management agreementUnder the Management agreement, the Manager provides investment management, secretarial and administrative services to the Company. The Management agreement can be terminated by either party on 12 months' notice. The Management agreement is subject to earlier termination in the event of certain breaches or on the insolvency of either party. The Manager is paid an annual fee equal to 1.9 per cent. of the net asset value of the Company, and an annual secretarial and administrative fee of £48,711 (2016: £48,087) increased annually by RPI. These fees are payable quarterly in arrears.

In line with common practice, the Manager is also entitled to an arrangement fee, payable by each portfolio company, of approximately 2 per cent. on each investment made and any applicable monitoring fees.

Management performance incentiveIn order to provide the Manager with an incentive to maximise the return to investors, the Company has entered into a management performance incentive arrangement with the Manager. Under the incentive arrangement, the Company will pay an incentive fee to the Manager of an amount equal to 8 per cent. of the excess total return above 5 per cent. per annum, paid out annually in cash as an addition to the management fee. Any shortfall of the target return will be carried forward into subsequent periods and the incentive fee will only be paid once all previous and current target returns have been met.

For the year to 31 March 2017, no incentive fee became due to the Manager (2016: £nil).

No further performance fee will become due until the hurdle rate comprising net asset value, plus dividends from 31 March 2004, has been reached. As of 31 March 2017 the total return from 31 March 2004 amounted to 166.9 pence per share which compared to the hurdle of 213.3 pence per share at that date.

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

Evaluation of the ManagerThe Board has evaluated the performance of the Manager based on the returns generated by the Company, the continued compliance under venture capital trust legislation, the long term prospects of current investments, a review of the Management agreement and the services provided therein, and benchmarking the performance of the Manager to other service providers. The Board believes that it is in the interests of shareholders as a whole, and of the Company, to continue the appointment of the Manager for the forthcoming year.

Alternative Investment Fund Managers Directive ("AIFMD")The Board has appointed Albion Capital Group LLP as the Company's AIFM as required by the AIFMD.Social and community issues, employees and human rightsThe 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 policiesThe Company has adopted a number of further policies relating to:

Environment Global greenhouse gas emissions Anti-bribery Diversity and these are set out in the Directors' report on pages 21 and 22 of the full Annual Report and Financial Statements.

Risk managementThe Board carries out a robust assessment of principal risks in which the Company operates. The principal risks and uncertainties of the Company as identified by the Board and how they are managed are as follows:

Risk Possible consequence Risk management 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 2 of the Financial Statements, the investments held by the Company are classified 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 values of all investments are at cost (reviewed for impairment) or supported 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 auditors. 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 Committee reviews the Internal Audit Reports prepared by the Manager's internal auditors, PKF Littlejohn LLP. On an annual basis, the Audit 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 its key service providers, particularly the Manager, to ensure they continue to have the necessary expertise and resources to deliver the Company's investment objective and policies. 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 and the Board targets such buy-backs to be in the region of a 5 per cent. discount to the most recently announced net asset value, so far as market conditions and liquidity permit. 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 asset value dilution to existing investors. Viability statementIn 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 31 March 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 considered the role 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 more than covers ongoing expenses. This income should increase as our asset-backed 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 31 March 2020. This Strategic report of the Company for the year ended 31 March 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,

David WatkinsChairman27 June 2017

Responsibility statement In preparing these Financial Statements for the year to 31 March 2017, the Directors of the Company, being David Watkins, John Kerr, Jeff Warren and Ebbe Dinesen, confirm that to the best of their knowledge:

- summary financial information contained in this announcement and the full Annual Report and Financial Statements for the year ended 31 March 2017 for the Company have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (UK Accounting Standards and applicable law) and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company for the year ended 31 March 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 31 March 2017 and description of principal risks and uncertainties that the Company faces); and

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

A detailed "Statement of Directors' responsibilities" is contained on page 25 within the full audited Annual Report and Financial Statements.

By order of the Board

David WatkinsChairman27 June 2017

Income statement

Year ended 31 March 2017 Year ended 31 March 2016 Revenue Capital Total Revenue Capital Total Note £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments 3 - 6,179 6,179 - 3,203 3,203 Investment income 4 2,381 - 2,381 2,236 - 2,236 Investment management fees 5 (283) (848) (1,131) (246) (739) (985) Other expenses 6 (296) - (296) (287) - (287) Profit on ordinary activities before tax 1,802 5,331 7,133 1,703 2,464 4,167 Tax (charge)/credit on ordinary activities 8 (292) 170 (122) (300) 148 (152) Profit and total comprehensive income attributable to shareholders 1,510 5,501 7,011 1,403 2,612 4,015 Basic and diluted return per share (pence)* 10 1.9 6.8 8.7 2.0 3.6 5.6 * excluding treasury shares

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

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

Balance sheet

31 March 2017 31 March 2016 Note £'000 £'000 Fixed asset investments 11 55,473 45,015 Current assets Trade and other receivables less than one year 13 140 2,139 Cash and cash equivalents 10,496 10,330 10,636 12,469 Total assets 66,109 57,484 Creditors: amounts falling due within one year Trade and other payables less than one year 14 (634) (529) Total assets less current liabilities 65,475 56,955 Equity attributable to equityholders Called up share capital 15 951 861 Share premium 24,630 18,374 Capital redemption reserve 7 7 Unrealised capital reserve 8,623 1,128 Realised capital reserve 8,743 10,737 Other distributable reserve 22,521 25,848 Total equity shareholders' funds 65,475 56,955 Basic and diluted net asset value per share (pence)* 16 75.4 72.0 * 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 27 June 2017, and were signed on its behalf by

David WatkinsChairman

Company number: 03142609

Statement of changes in equity

Calledupsharecapital Sharepremium Capitalredemptionreserve Unrealisedcapitalreserve Realisedcapitalreserve* Otherdistributablereserve* Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 As at 1 April 2016 861 18,374 7 1,128 10,737 25,848 56,955 Return/(loss) and total comprehensive income for the year - - - 6,165 (664) 1,510 7,011 Transfer of previously unrealised gains/(losses) on realisations of investments - - - 1,330 (1,330) - - Purchase of treasury shares - - - - - (873) (873) Issue of equity 90 6,422 - - - - 6,512 Cost of issue of equity - (166) - - - - (166) Net dividends paid (note 9) - - - - - (3,964) (3,964) As at 31 March 2017 951 24,630 7 8,623 8,743 22,521 65,475 As at 1 April 2015 714 8,228 7 (2,269) 11,522 28,726 46,928 Return and total comprehensive income for the year - - - 2,343 269 1,403 4,015 Transfer of previously unrealised gains/(losses) on realisations of investments - - - 1,054 (1,054) - - Purchase of treasury shares - - - - - (733) (733) Issue of equity 147 10,423 - - - - 10,570 Cost of issue of equity - (277) - - - - (277) Net dividends paid (note 9) - - - - - (3,549) (3,549) As at 31 March 2016 861 18,374 7 1,128 10,737 25,848 56,955 * These reserves amount to £31,264,000 (2016: £36,585,000) which is considered distributable.

Statement of cash flows

Year ended31 March 2017 Year ended31 March 2016 £'000 £'000 Cash flow from operating activities Loan stock income received 1,941 2,028 Deposit interest received 69 115 Dividend income received 45 81 Investment management fees paid (1,091) (938) Other cash payments (302) (273) Corporation tax paid (127) (99) Net cash flow from operating activities 535 915 Cash flow from investing activities Purchase of fixed asset investments (4,521) (6,430) Disposal of fixed asset investments 572 2,786 Net cash flow from investing activities (3,949) (3,644) Cash flow from financing activities Issue of share capital* 7,809 7,886 Cost of issue of equity (2) (2) Dividends paid (3,424) (3,094) Purchase of own shares (including costs) (803) (733) Net cash flow from financing activities 3,580 4,057 Increase in cash and cash equivalents 166 1,328 Cash and cash equivalents at start of period 10,330 9,002 Cash and cash equivalents at end of period 10,496 10,330 Cash and cash equivalents comprise Cash at bank and in hand 10,496 10,330 Cash equivalents - - Total cash and cash equivalents 10,496 10,330 *An amount of £1,988,000 relating to shares subscribed and allotted on 31 March 2016 was received during the current year.

Notes to the Financial Statements

1. Basis of preparationThe Financial Statements have been prepared in accordance with the historical cost convention, modified to include the revaluation of investments, in accordance with applicable United Kingdom law and accounting standards, including Financial Reporting Standard 102 ("FRS 102"), and with the 2014 Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ("SORP") issued by The Association of Investment Companies ("AIC").

The preparation of the Financial Statements requires management to make judgements and estimates that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The most critical estimates and judgements relate to the determination of carrying value of investments at fair value through profit and loss (FVTPL). The Company values investments by following the International Private Equity and Venture Capital Valuation ("IPEVCV") Guidelines and further detail on the valuation techniques used are outlined in note 2 below.

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

2. Accounting policies

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

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

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

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

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

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

Receivables and payables and cash are carried at amortised cost, in accordance with FRS 102. There are no financial liabilities other than creditors.

Investment income

Equity incomeDividend income is included in revenue when the investment is quoted ex-dividend.

Unquoted loan stock and other preferred incomeFixed returns on non-equity shares and debt securities are recognised when the Company's right to receive payment and expect settlement is established. Where interest is rolled up and/or payable at redemption then it is recognised as income unless there is reasonable doubt as to its receipt.

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

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

75 per cent. of management fees are allocated to the capital account to the extent that these relate to an 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 Company's investment returns will be in the form of capital gains; and expenses which are incidental to the purchase or disposal of an investment are charged through the realised capital reserve. Performance incentive feeIn the event that a performance incentive fee crystallises, the fee will be allocated between other distributable and realised capital reserves based upon the proportion to which the calculation of the fee is attributable to revenue and capital returns.

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

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

ReservesShare premium accountThis reserve accounts for the difference between the price paid for shares and the nominal value of the shares, less issue costs.

Capital redemption reserveThis 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 reserveIncreases and decreases in the valuation of investments held at the year end against cost are included in this reserve.

Realised capital reserveThe following are disclosed in this reserve:

gains and losses compared to cost on the realisation of investments; expenses, together with the related taxation effect, charged in accordance with the above policies; and dividends paid to equity holders where paid out by capital. Other distributable reserveThe Special reserve, Treasury share reserve and the Revenue reserve were combined in 2012 to form a single reserve named other distributable reserve.

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

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

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

3. Gains on investments

Year ended31 March 2017 Year ended31 March 2016 £'000 £'000 Unrealised gains on fixed asset investments 6,165 2,343 Realised gains on fixed asset investments 14 860 Gains on investments 6,179 3,203 4. Investment income

Year ended31 March 2017 Year ended31 March 2016 £'000 £'000 Income recognised on investments Loan stock interest and other fixed returns 2,277 2,039 Dividend income 45 81 Bank deposit interest 59 116 2,381 2,236 Interest income earned on impaired investments at 31 March 2017 amounted to £120,000 (2016: £208,000).

All of the Company's income is derived from operations in the United Kingdom.

5. Investment management fees

Year ended31 March 2017£'000 Year ended31 March 2016£'000 Investment management fee charged to revenue 283 246 Investment management fee charged to capital 848 739 1,131 985 Further details of the Management agreement under which the investment management fee is paid are given in the Strategic report.

During the year, services of a total value of £1,180,000 (2016: £1,033,000), were purchased by the Company from Albion Capital Group LLP; this includes £1,131,000 (2016: £985,000) of investment management fee and £49,000 (2016: £48,000) secretarial and administration fee. At the financial year end, the amount due to Albion Capital Group LLP in respect of these services disclosed within accruals and deferred income was £323,000 (2016: £282,000).

As at 31 March 2017 Albion Capital Group LLP holds 25,096 Ordinary shares in the Company.

6. Other expenses

Year ended31 March 2017 Year ended31 March 2016 £'000 £'000 Directors' fees (inc. NIC) 100 93 Secretarial and administration fee 49 48 Auditor's remuneration for statutory audit services (exc. VAT) 26 27 Other administrative expenses 121 119 296 287 7. Directors' feesThe amounts paid to and on behalf of Directors during the year are as follows:

Year ended31 March 2017 Year ended31 March 2016 £'000 £'000 Directors' fees 92 87 National insurance 8 6 100 93 The Company's key management personnel are the Directors. Further information regarding Directors' remuneration can be found in the Directors' remuneration report on page 31 of the full Annual Report and Financial Statements.

8. Tax charge/(credit) on ordinary activities

Year ended 31 March 2017 Year ended 31 March 2016 Revenue£'000 Capital£'000 Total£'000 Revenue£'000 Capital£'000 Total£'000 UK corporation tax in respect of current year 351 (170) 181 324 (148) 176 UK corporation tax in respect of prior year (59) - (59) (24) - (24) Total 292 (170) 122 300 (148) 152 Factors affecting the tax charge:

Year ended31 March 2017£'000 Year ended31 March 2016£'000 Return on ordinary activities before taxation 7,133 4,167 Tax on profit at the standard rate of 20% (2016: 20%) 1,426 833 Factors affecting the charge: Non-taxable gains (1,236) (640) Income not taxable (9) (17) Consortium relief in respect of prior years (59) (24) 122 152 The tax charge for the year shown in the Income statement is lower than the standard rate of corporation tax in the UK of 20 per cent. (2016: 20 per cent.). The differences are explained above.

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

Notes

(i) Venture Capital Trusts are not subject to corporation tax on capital gains.(ii) Tax relief on expenses charged to capital has been determined by allocating tax relief to expenses by reference to the applicable corporation tax rate and allocating the relief between revenue and capital in accordance with the SORP.(iii) No deferred tax asset or liability has arisen in the year.

9. Dividends

Year ended31 March 2017 Year ended31 March 2016 £'000 £'000 First dividend paid on 31 July 2015 - 2.5 pence per share - 1,789 Second dividend paid on 31 December 2015 - 2.5 pence per share - 1,782 First dividend paid on 29 July 2016 - 2.5 pence per share 1,987 - Second dividend paid on 30 December 2016 - 2.5 pence per share 1,986 - Unclaimed dividends (9) (22) 3,964 3,549 In addition to the dividends summarised above, the Board has declared a first dividend for the year ending 31 March 2018 of 2.5 pence per share. This dividend will be paid on 31 July 2017 to shareholders on the register on 7 July 2017. The total dividend will be approximately £2,179,000. All dividends are paid out of revenue from the other distributable reserve.

During the year, unclaimed dividends older than twelve years of £9,000 (2016: £22,000) were returned to the Company in accordance with the terms of the Articles of Association.

10. Basic and diluted return per share

Year ended 31 March 2017 Year ended 31 March 2016 Revenue Capital Total Revenue Capital Total The return per share has been based on the following figures: Return attributable to equity shares (£'000) 1,510 5,501 7,011 1,403 2,612 4,015 Weighted average shares in issue (excluding treasury shares) 80,525,974 72,020,718 Return attributable per equity share (pence) 1.9 6.8 8.7 2.0 3.6 5.6 The weighted average number of shares is calculated excluding treasury shares of 8,263,188 (2016: 6,954,440).

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.

11. Fixed asset investments

31 March 2017£'000 31 March 2016£'000 Investments held at fair value through profit or lossUnquoted equity 21,900 15,163 Unquoted loan stock 33,573 29,852 55,473 45,015 31 March 2017£'000 31 March 2016£'000 Opening valuation 45,015 38,229 Purchases at cost 4,521 6,430 Disposal proceeds (572) (2,852) Realised gains 14 860 Movement in loan stock accrued income 331 4 Unrealised gains 6,165 2,343 Closing valuation 55,473 45,015 Movement in loan stock accrued income Opening accumulated movement in loan stock accrued income 265 261 Movement in loan stock accrued income 331 4 Closing accumulated movement in loan stock accrued income 596 265 Movement in unrealised gains/(losses) Opening accumulated unrealised losses 1,128 (2,269) Transfer of previously unrealised losses to realised reserve on realisations of investments 1,330 1,054 Unrealised gains 6,165 2,343 Closing accumulated unrealised gains 8,623 1,128 Historic cost basis Opening book cost 43,622 40,239 Purchases at cost 4,521 6,430 Sales at cost* (1,888) (3,047) Closing book cost* 46,255 43,622 *Included in the sales at cost is the cost after deducting realised losses of £1,162,000 for TWCL Limited (previously The Weybridge Club Limited) and £170,000 for MHS 1 Limited (previously The Charnwood Pub Company Limited) which are still held at the Balance sheet date.

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

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

31 March 2017 31 March 2016 Valuation methodology £'000 £'000 Cost (reviewed for impairment) 823 6,743 Valuation supported by third party or desktop valuation 54,650 38,272 55,473 45,015 Full valuations are prepared by independent RICS qualified surveyors in full compliance with the RICS Red Book. Desk-top reviews are carried out by similarly RICS qualified surveyors by updating previously prepared full valuations for current trading and market indices.

Fair value investments had the following movements between valuation methodologies between 31 March 2016 and 31 March 2017:

Change in valuation methodology (2016 to 2017) Value as at31 March 2017£'000 Explanatory note Cost (reviewed for impairment) to Valuation supported by third party or desktop valuation 9,113 Third party valuation has recently taken place The valuation will be the most appropriate valuation methodology for an investment within its market, with regard to the financial health of the investment and the IPEVCV Guidelines. The Directors believe that, within these parameters, there are no other possible methods of valuation which would be reasonable as at 31 March 2017.

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

Fair value hierarchy Definition Level 1 Unadjusted quoted prices in an active market Level 2 Inputs to valuations are from observable sources and are directly or indirectly derived from prices Level 3 Inputs to valuations not based on observable market data Unquoted equity, preference shares and loan stock are all valued according to Level 3 valuation methods.

Investments held at fair value through profit or loss (Level 3) had the following movements in the year to 31 March 2017:

Equity 31 March 2017Unquotedloan stock Total Equity 31 March 2016Unquotedloan stock Total £'000 £'000 £'000 £'000 £'000 £'000 Opening balance 15,163 29,852 45,015 10,442 27,787 38,229 Additions 896 3,625 4,521 1,684 4,746 6,430 Disposal proceeds (14) (558) (572) (721) (2,131) (2,852) Debt/equity swap 150 (150) - - - - Accrued loan stock interest - 331 331 - 4 4 Realised gains 14 - 14 722 138 860 Unrealised gains 5,691 474 6,165 3,036 (693) 2,343 Closing balance 21,900 33,573 55,473 15,163 29,852 45,015 FRS 102 requires the Directors to consider the impact of changing one or more of the inputs used as part of the valuation process to reasonable possible alternative assumptions. 61 per cent. of the portfolio of investments is based on cost or is loan stock, and as such the Board considers that the assumptions used for their valuations are the most reasonable. The Directors believe that changes to reasonable possible alternative assumptions for the valuations of the remainder of the portfolio companies could result in an increase in the valuation of investments by £791,000 or a decrease in the valuation of investments by £834,000. For valuations based on third party valuations, the Board considers that the most significant inputs are earnings multiples and market value per room for care homes; which have been adjusted to drive the above sensitivities.

12. Significant interestsThe principal activity of the Company is to select and hold a portfolio of investments in unquoted securities. Although the Company, through the Manager, will, in some cases, be represented on the board of the portfolio company, it will not take a controlling interest or become involved in the management. The size and structure of the companies with unquoted securities may result in certain holdings in the portfolio representing a participating interest without there being any partnership, joint venture or management consortium agreement. The Company has interests of greater than 20 per cent. of the nominal value of any class of the allotted shares in the portfolio companies as at 31 March 2017 as described below:

Company Countryofincorporation Profit/(loss)before tax£'000 Net assets/(liabilities)£'000 Resultsfor yearended: % classand sharetype % totalvotingrights Kew Green VCT (Stansted) Limited Great Britain 427 4,873 31 August 2016 45.2% Ordinary 45.2% G & K Smart Development VCT Limited Great Britain n/a* 319 31 December 2015 42.9% Ordinary 42.9% The Stanwell Hotel Limited Great Britain (838) (6,950) 31 August 2016 39.2% Ordinary 39.2% Shinfield Lodge Care Limited Great Britain n/a* 1,090 31 December 2015 35.3% Ordinary 35.3% The Crown Hotel Harrogate Limited Great Britain (922) (8,362) 31 March 2016 24.1% Ordinary 24.1% Ryefield Court Care Limited Great Britain n/a* 1,004 30 April 2016 23.6% Ordinary 23.6% Active Lives Care Limited Great Britain n/a* 1,373 31 December 2015 22.2% Ordinary 22.2% *The company files abbreviated accounts which do not disclose this information.

13. Current assets

31 March 2017 31 March 2016 Trade and other receivables £'000 £'000 Prospectus Top Up Offers proceeds* - 1,988 Other receivables 96 112 UK corporation tax receivable 35 24 Prepayments and accrued income 9 15 140 2,139 *This relates to shares subscribed and allotted on 31 March 2016 with monies received after that date.The Directors consider that the carrying amount of receivables is not materially different to their fair value.

14. Creditors: amounts falling due within one year

31 March 2017 31 March 2016 £'000 £'000 Trade payables 78 18 UK Corporation tax payable 181 176 Accruals and deferred income 375 335 634 529 The Directors consider that the carrying amount of payables is not materially different to their fair value.

15. Called up share capital

Allotted, called up and fully paid £'000 86,081,939 Ordinary shares of 1 penny each at 31 March 16 861 8,974,488 Ordinary shares of 1 penny each issued during the year 90 95,056,427 Ordinary shares of 1 penny each at 31 March 2017 951 6,954,440 Ordinary shares of 1 penny each held in treasury at 31 March 2016 (70) 1,308,748 Ordinary shares purchased during the year to be held in treasury (13) 8,263,188 Ordinary shares of 1 penny each held in treasury at 31 March 2017 (83) 86,793,239 Ordinary shares of 1 penny each in circulation* at 31 March 2017 868 * Carrying one vote each

The Company purchased 1,308,748 Ordinary shares (2016: 1,113,000) to be held in treasury at a nominal value of £13,000 and a cost of £873,000 (2016: £733,000) representing 1.4 per cent. of its issued share capital as at 31 March 2017. The shares purchased for treasury were funded from the other distributable reserve.

The Company holds a total of 8,263,188 shares (2016: 6,954,440) in treasury at a nominal value of £83,000, representing 8.7 per cent. of the issued Ordinary share capital as at 31 March 2017.

Under the terms of the Dividend Reinvestment Scheme Circular dated 10 July 2008, the following new Ordinary shares of nominal value 1 penny per share were allotted during the year:

Date ofallotment Numberof sharesallotted Aggregatenominalvalue ofshares Netinvested Issueprice (penceper Openingmarketprice onallotmentdate £'000 £'000 share) (penceper share) 29 July 2016 374,773 4 259 69.5 66.5 30 December 2016 377,848 4 265 70.4 67.9 752,621 8 524

During the year the following new Ordinary shares were allotted under the Albion VCTs Prospectus Top Up Offers 2015/2016 and the Albion VCTs Prospectus Top Up Offers 2016/2017:

Date ofallotment Numberof sharesallotted Aggregatenominalvalue ofshares Netconsiderationreceived Issueprice (penceper Openingmarketprice onallotmentdate £'000 £'000 share) (penceper share) 6 April 2016 107,001 1 76 72.8 66.5 6 April 2016 245,265 2 173 72.0 66.5 6 April 2016 9,897 - 7 72.4 66.5 31 January 2017 1,516,754 15 3,307 71.9 67.0 31 January 2017 542,522 5 1,069 72.3 67.0 31 January 2017 4,695,695 47 382 72.6 67.0 28 March 2017 1,104,733 11 807 75.3 68.0 8,221,867 82 5,821 16. Basic and diluted net asset value per share

31 March 2017 31 March 2016 Basic and diluted net asset value per share (pence) 75.4 72.0 The basic and diluted net asset value per share at the year end are calculated in accordance with the Articles of Association and are based upon total shares in issue (less treasury shares) of 86,793,239 Ordinary shares (2016: 79,127,499).

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

17. Capital and financial instruments risk managementThe Company's capital comprises Ordinary shares as described in note 15. The Company is permitted to buy-back its own shares for cancellation or treasury purposes, and this is described in more detail in the Chairman's statement.

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

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

Investment (or market) risk (which comprises investment price and cash flow interest rate risk); credit risk; and liquidity risk. The Board regularly reviews and agrees policies for managing each of these risks. There have been no changes in the nature of the risks that the Company has faced during the past year and, apart from where noted below, there have been no changes in the objectives, policies or processes for managing risks during the past year. The key risks are summarised below.

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern, so that it can continue to provide returns for shareholders and to provide an adequate return to shareholders by allocating its capital to assets commensurate with the level of risk.

By its nature, the Company has an amount of capital, at least 70 per cent. (as measured under the tax legislation) of which is and must be, and remain, invested in the relatively high risk asset class of small UK companies within three years of that capital being subscribed. The Company accordingly has limited scope to manage its capital structure in the light of changes in economic conditions and the risk characteristics of the underlying assets. Subject to this overall constraint upon changing the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets if so required to maintain a level of liquidity to remain a going concern.

Although, as the Investment Policy implies, the Board would consider levels of gearing, there are no current plans to do so. It regards the net assets of the Company as the Company's capital, as the levels of liabilities are small and the management of them is not directly related to managing the return to shareholders. There has been no change in this approach from the previous year.

Investment riskAs a venture capital trust, it is the Company's specific nature to evaluate and control the investment risk of its portfolio in unquoted investments, details of which are shown on page 16 of the full Annual Report and Financial Statements. Investment risk is the exposure of the Company to the revaluation and devaluation of investments. The main driver of investment risk is the operational and financial performance of the portfolio company and the dynamics of market quoted comparators. The Manager receives management accounts from portfolio companies, and members of the investment management team often sit on the boards of portfolio companies; this enables the close identification, monitoring and management of investment risk.

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

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

The maximum investment risk as at the balance sheet date is the value of the fixed investment portfolio which is £55,473,000 (2016: £45,015,000). Fixed asset investments form 85 per cent. of the net asset value as at 31 March 2017 (2016: 79 per cent.).

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

Investment price riskInvestment price risk is the risk that the fair value of future investment cash flows will fluctuate due to factors specific to an investment instrument or to a market in similar instruments. To mitigate the investment price risk for the Company as a whole, the strategy of the Company is to invest in a broad spread of industries with 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 page 16 of the full Annual Report and Financial Statements and in the Strategic report.

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

As required under FRS 102 section 34.29, the Board is required to illustrate by way of a sensitivity analysis the degree of exposure to market risk. The Board considers that the value of the fixed asset investment portfolio is sensitive to a 10 per cent. change based on the current economic climate. The impact of a 10 per cent. change has been selected as this is considered reasonable given the current level of volatility observed both on a historical basis and future expectations.

The sensitivity of a 10 per cent. increase or decrease in the valuation of the fixed asset investments (keeping all other variables constant) would increase or decrease the net asset value and return for the year by £5,547,000 (2016: £4,502,000).

Interest rate riskIt is the Company's policy to accept a degree of interest rate risk on its financial assets through the effect of interest rate changes. On the basis of the Company's analysis, it is estimated that a rise of one percentage point in all interest rates would have increased total return before tax for the year by approximately £74,000 (2016: £122,000). Furthermore, it is considered that a fall of interest rates below current levels during the year would have been very unlikely.

The weighted average effective interest rate applied to the Company's fixed rate assets during the year was approximately 7.0 per cent. (2016: 6.7 per cent.). The weighted average period to maturity for the fixed rate assets is approximately 4.6 years (2016: 4.7 years).

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

31 March 2017 31 March 2016 Fixedrate£'000 Floatingrate£'000 Non-interestbearing£'000 Total£'000 Fixedrate£'000 Floatingrate£'000 Non-interestbearing£'000 Total£'000 Unquoted equity - - 21,900 21,900 - - 15,163 15,163 Unquoted loan stock* 32,987 279 307 33,573 29,116 279 457 29,852 Receivables ** - - 96 96 - - 2,110 2,110 Current liabilities** - - (452) (452) - - (353) (353) Cash - 10,496 - 10,496 - 10,330 - 10,330 32,987 10,775 21,851 65,613 29,116 10,609 17,377 57,102 *Including convertible loan stock and debt issued at a discount** The receivables and current liabilities do not reconcile to the Balance sheet as prepayments and tax receivable/(payable) are not included in the above table.

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

The Manager evaluates credit risk on loan stock 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 portfolio companies; this enables the close identification, monitoring and management of investment specific credit risk.

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

The Company's total gross credit risk as at 31 March 2017 was limited to £33,573,000 (2016: £29,852,000) of unquoted loan stock instruments (all of which is secured on the assets of the portfolio company), £10,496,000 cash deposits with banks (2016: £10,330,000) and £96,000 of other receivables (2016: £2,100,000).

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

The Company has an informal policy of limiting counterparty banking and floating rate note exposure to a maximum of 20 per cent. of net asset value for any one counterparty.

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

Liquidity riskLiquid assets are held as cash on current short term deposit accounts. Under the terms of its Articles, the Company has the ability to borrow up to 10 per cent. of its adjusted capital and reserves of the latest published audited balance sheet, which amounts to £6,330,000 as at 31 March 2017 (2016: £5,497,000).

The Company has no committed borrowing facilities as at 31 March 2017 (2016: £nil) and had cash balances of £10,496,000 (2016: £10,330,000). The main cash outflows are for new investments, buy-back of shares and dividend payments, which are within the control of the Company. The Manager formally reviews the cash requirements of the Company on a monthly basis, and the Board on a quarterly basis as part of its review of management accounts and forecasts. All the Company's financial liabilities are short term in nature and total £634,000 for the year to 31 March 2017 (2016: £529,000).

The carrying value of loan stock investments at 31 March 2017 as analysed by expected maturity dates is as follows:

Redemptiondate Fullyperforming£'000 Impaired£'000 Past due£'000 Total£'000 Less than one year 4,498 7,326 426 12,250 1-2 years 417 - - 417 2-3 years 4,541 - - 4,541 3-5 years 5,334 416 978 6,728 Greater than 5 years 6,719 - 2,918 9,637 Total 21,509 7,742 4,322 33,573 Loan stock can be past due as a result of interest or capital not being paid in accordance with contractual terms.

The average annual interest yield on the total cost of past due loan stock is 11.2 per cent. (2016: 12.1 per cent.).

Impaired loan stock has a cost of £10,145,000 (2016: £11,065,000).

The carrying value of loan stock investments at 31 March 2016 as analysed by expected maturity dates is as follows:

Redemption date Fullyperforming£'000 Impaired£'000 Past due£'000 Total£'000 Less than one year 4,875 7,732 383 12,990 1-2 years 101 - - 101 2-3 years 407 - - 407 3-5 years 7,693 292 105 8,090 Greater than 5 years 5,437 - 2,827 8,264 Total 18,513 8,024 3,315 29,852 In view of the information shown, the Board considers that the Company is subject to low liquidity risk.

Fair values of financial assets and financial liabilitiesAll the Company's financial assets and liabilities as at 31 March 2017 are stated at fair value as determined by the Directors, with the exception of receivables and payables and cash which are carried at amortised cost, in accordance with FRS 102. There are no financial liabilities other than payables. The Company's financial liabilities are all non-interest bearing. It is the Directors' opinion that the book value of the financial liabilities is not materially different to the fair value and all are payable within one year.

18. Commitments and contingenciesThe Company had no financial commitments in respect of investments at 31 March 2017.There are no contingent liabilities or guarantees given by the Company as at 31 March 2017 (31 March 2016: nil).

19. Post balance sheet eventsSince 31 March 2017 the Company has had the following post balance sheet events:

Investment of £228,000 in G. Network Communications Limited. In addition, TWCL Limited (previously The Weybridge Club Limited) disposed of its business and assets.

New Ordinary shares issued under the Albion VCTs Prospectus Top Up Offers 2016/2017:

Date ofallotment Number ofsharesallotted Aggregatenominalvalueof shares Netconsiderationreceived Issue price(pence per Openingmarket priceonallotment date £'000 £'000 share) (pence per share) 7 April 2017 52,543 1 38 74.5 68.0 7 April 2017 29,427 - 22 74.9 68.0 7 April 2017 284,008 3 207 75.3 68.0 365,978 4 267 20. Related party transactions Other than transactions with the Manager as disclosed in note 5, there are no related party transactions or balances requiring disclosure.

21. Other informationThe information set out in this announcement does not constitute the Company's statutory accounts within the terms of section 434 of the Companies Act 2006 for the years ended 31 March 2017 and 31 March 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 31 March 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 14 August 2017 at 11:00am.

22. PublicationThe 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/AAVC, where the Report can be accessed as a PDF document via a link in the 'Financial Reports and Circulars' section. Dividend history for Albion Venture Capital Trust PLC 'C Shares' (unaudited)

Total shareholder return to 31 March 2017 C shares (pence per share) Total dividends paid during the year ended : 31 March 1998 2.00 31 March 1999 8.75 31 March 2000 2.70 31 March 2001 4.80 31 March 2002 7.60 31 March 2003 7.70 31 March 2004 8.20 31 March 2005 9.75 31 March 2006 11.75 31 March 2007 10.00 31 March 2008 10.00 31 March 2009 10.00 31 March 2010 5.00 31 March 2011 5.00 31 March 2012 5.00 31 March 2013 5.00 31 March 2014 5.00 31 March 2015 5.00 31 March 2016 5.00 31 March 2017 5.00 Total dividends paid to 31 March 2017 133.25 Net asset value as at 31 March 2017 75.40 Total shareholder return to 31 March 2017 208.65 Notes

Dividends paid before 5 April 1999 were paid to qualifying shareholders inclusive of the associated tax credit. The dividends for the year to 31 March 1999 were maximised in order to take advantage of this tax credit. All dividends paid by the Company are free of income tax. It is an H.M. Revenue & Customs requirement that dividend vouchers indicate the tax element should dividends have been subject to income tax. Investors should ignore this figure on their dividend voucher and need not disclose any income they receive from a VCT on their tax return. The Ordinary shares and the C shares merged on an equal basis. Dividend history for Albion Prime VCT PLC now merged with Albion Venture Capital Trust PLC (unaudited)

Total proforma shareholder return to 31 March 2017 Proforma Albion Prime VCT PLC(pence per share) Total dividends paid during the year ended: 31 March 1998 1.10 31 March 1999 6.40 31 March 2000 1.50 31 March 2001 4.25 31 March 2002 2.75 31 March 2003 2.00 31 March 2004 1.25 31 March 2005 2.20 31 March 2006 4.50 31 March 2007 4.00 31 March 2008 5.00 31 March 2009 4.50 31 March 2010 2.00 31 March 2011 3.00 31 March 2012 3.00 31 March 2013 3.70 31 March 2014 4.40 31 March 2015 4.40 31 March 2016 4.40 31 March 2017 4.40 Total dividends paid to 31 March 2017 68.75 Proforma net asset value as at 31 March 2017 66.36 Total proforma shareholder return to 31 March 2017 135.11 Notes

The proforma shareholder returns presented above are based on the dividends paid to shareholders before the merger and the pro-rata net asset value per share and pro-rata dividends per share paid to 31 March 2017. This proforma is based upon 0.8801 Albion Venture Capital Trust PLC shares for every Albion Prime VCT PLC share which merged with Albion Venture Capital Trust PLC on 25 September 2012. Dividends paid before 5 April 1999 were paid to qualifying shareholders inclusive of the associated tax credit. The dividends for the year to 31 March 1999 were maximised in order to take advantage of this tax credit. The above table excludes the tax benefits investors received upon subscription for shares in the Company.

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