Principal Risks

The principal risks facing the Group are substantially unchanged since the date of the Annual Report for the year ended 30 April 2024 and continue to be as set out in that report on pages 11 to 13. Risks faced by the Group include, but are not limited to, market risk, discount volatility, regulatory risks, financial risk, gearing, political risk, loss of key personnel and operational risk.

Going concern

Having assessed the principal risks and the other matters discussed in connection with the viability statement as set out on pages 15 and 16 of the Annual Report for the year ended 30 April 2024, the Directors believe that the Group is well placed to manage its business risks successfully and it is appropriate to adopt the going concern basis in preparing the accounts.

Change of Auditor

Following a competitive tender process, the Company appointed Johnston Carmichael LLP as its auditor on 6 November 2023. Johnston Carmichael LLP carried out the audit of the Company's annual report and accounts for the year ended 30 April 2024 and their appointment was ratified at the AGM held on 11 October 2024.

Financing Structure of the Group

The Directors of the Group have been considering the options for a refinancing of the Zero Dividend Preference ('ZDP') shares, which are due for repayment upon the winding up of SDVP on 30 April 2025, by way of incorporating a new wholly owned subsidiary in which to issue ZDP shares. The Board believes that, given the current economic environment, a ZDP refinancing could be achieved at an appropriate gross redemption yield. This would enable the Company to continue to provide Ordinary shareholders with an attractive level of income, supported by the Company's significant revenue reserve, as well as the opportunity for further capital growth driven principally by the well-established and diversified investment portfolio.

Responsibility Statement of the Directors in respect of the Half-Yearly Report

We confirm that to the best of our knowledge:

·      the condensed set of financial statements has been prepared in compliance with the IAS 34 'Interim Financial Reporting' and gives a true and fair view of the assets, liabilities and financial position of the Group; and

·      the interim management report and notes to the Half-Yearly Report include a fair view of the information required by:

(a)   DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of the important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b)   DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Group during that period; and any changes in the related party transactions described in the last annual report that could do so.

This Half-Yearly Report was approved by the Board of Directors on 3 December 2024 and the above responsibility statement was signed on its behalf by Howard Myles, Chairman.

for the six months ended 31 October 2024

The total column of this statement is the Statement of Comprehensive Income of the Group prepared in accordance with UK-Adopted International Accounting Standards and with the requirements of the Companies Act 2006. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period. All of the net return for the period and the total comprehensive income for the period is attributed to the shareholders of the Group. The supplementary revenue and capital return columns are presented for information purposes as recommended by the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('SORP') issued by the Association of Investment Companies ('AIC') (dated June 2022).

Condensed Consolidated Statement of Changes in Net Equity (unaudited)

for the six months ended 31 October 2024

Condensed Consolidated Balance Sheet

(unaudited)

as at 31 October 2024

Condensed Consolidated Statement of Cash Flows

(unaudited)

for the six months ended 31 October 2024

for the six months ended 31 October 2024

1  General information

The financial information contained in this Half-Yearly Report does not constitute statutory financial statements as defined in Section 434 of the Companies Act 2006. The statutory financial statements for the year ended 30 April 2024, which contained an unqualified auditors' report, have been lodged with the Registrar of Companies and did not contain a statement required under the Companies Act 2006. These statutory financial statements were prepared in accordance with UK-Adopted International Accounting Standards and in accordance with the SORP.

The Group has financial resources which substantially exceed its expense commitments and therefore the Directors believe that the Group is well placed to manage its business risks and also believe that the Group will have sufficient resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing this report.

This report has not been reviewed by the Group's Auditors.

This report has been prepared using accounting policies adopted in the audited financial statements for the year ended 30 April 2024. This report has also been prepared in compliance with IAS 34 'Interim Financial Reporting' and the Companies Act 2006.

2  Taxation

The Company has an effective tax rate of 0% as investment gains are exempt from tax owing to the Company's status as an Investment Trust and there is expected to be an excess of management expenses over taxable income and thus there is no charge for corporation tax.

Deferred tax assets in respect of unrelieved excess expenses are not recognised as it is unlikely that the Group will generate sufficient taxable income in the future to utilise these expenses. Deferred tax is not provided on capital gains and losses because the Company meets the conditions for approval as an investment trust company.

3   Earnings per share

Ordinary shares

Revenue earnings per Ordinary share is based on revenue on ordinary activities after taxation of £1,388,000 (31 October 2023: £1,350,000, 30 April 2024: £2,720,000) and on 21,636,848 (31 October 2023: 21,355,216; 30 April 2024: 21,413,334) Ordinary shares, being the weighted average number of Ordinary shares in issue during the period.

Capital earnings per Ordinary share is based on the capital gain of £210,000 (31 October 2023: loss of £8,310,0000, 30 April 2024: loss of £2,724,000) and on 21,636,848 (31 October 2023: 21,355,216, 30 April 2023: 21,413,334) Ordinary shares, being the weighted average number of Ordinary shares in issue during the period.

Zero Dividend Preference shares

Capital earnings per Zero Dividend Preference share 2025 is based on allocations from the Company of £367,000 (31 October 2023: £354,000, 30 April 2024: £709,000) and on 14,500,000 (31 October 2023: 14,500,000, 30 April 2024: 14,500,000) Zero Dividend Preference shares 2025 being the weighted average number of Zero Dividend Preference shares in issue during the period.

4   Dividends

During the period, a fourth interim dividend of 3.15p per Ordinary share was paid to Shareholders in respect of the financial year ended 30 April 2024.

In respect of the year ending 30 April 2024, a first interim dividend of 3.25p per ordinary share has been paid to Shareholders on 15 November 2024.

In addition, for the year ending 30 April 2024, the Board has declared a second interim dividend of 3.25p per Ordinary share payable on 10 January 2025 to Shareholders on the register at 13 December 2024 (ex-dividend date 12 December 2024).

5   Net asset values

Ordinary shares

The net asset value per Ordinary share is based on assets attributable of £34,572,000 (31 October 2023: £27,636,000, 30 April 2024: £33,521,000) and on 22,055,000 (31 October 2023: 21,360,000, 30 April 2024: 21,360,000) Ordinary shares being the number of shares in issue at the period end.

Zero Dividend Preference shares

The net asset value per Zero Dividend Preference shares is based on assets attributable of £18,942,000 (31 October 2023: £18,220,000, 30 April 2024: £18,575,000) and on 14,500,000 (31 October 2023: 14,500,000, 30 April 2024: 14,500,000) Zero Dividend Preference shares being the number of shares in issue at the period end.

6   Fair value hierarchy

Financial assets and financial liabilities of the Company are carried in the condensed Consolidated Balance Sheet at their fair value. The fair value is the amount at which the asset could be sold or the liability transferred in a current transaction between market participants, other than a forced or liquidation sale. For investments actively traded in organised financial markets, fair value is generally determined by reference to Stock Exchange quoted market bid prices and Stock Exchange Electronic Trading Services ('SETS') at last trade price at the Balance Sheet date, without adjustment for transaction costs necessary to realise the asset.

The Company measures fair values using the following hierarchy that reflects the significance of the inputs used in making the measurements. Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant assets as follows:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

An active market is a market in which transactions for the asset or liability occur with sufficient frequency and volume on an ongoing basis such that quoted prices reflect prices at which an orderly transaction would take place between market participants at the measurement date. Quoted prices provided by external pricing services, brokers and vendors are included in Level 1, if they reflect actual and regularly occurring market transactions on an arm's length basis.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

Level 2 inputs include the following:

• quoted prices for similar (i.e. not identical) assets in active markets;

• quoted prices for identical or similar assets or liabilities in markets that are not active. Characteristics of an inactive market include a significant decline in the volume and level of trading activity, the available prices vary significantly over time or among market participants or the prices are not current;

• inputs other than quoted prices that are observable for the asset (for example, interest rates and yield curves observable at commonly quoted intervals); and

• inputs that are derived principally from, or corroborated by, observable market data by correlation or other means (market-corroborated inputs).

Level 3 - Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability.

The table below sets out fair value measurements of financial instruments at the period end, by the level in the fair value hierarchy into which the fair value measurement is categorised.

7 Reconciliation of net return before and after taxation to cash generated from operations

8  Related party transactions

The Group's investments are managed by Chelverton Asset Management Limited. The amounts paid to the Investment Manager in the period to 31 October 2024 were £280,000 (31 October 2023: £244,000, 30 April 2024: £500,000).

At 31 October 2024 there were amounts outstanding to be paid to the Investment Manager of £69,000 (31 October 2023: £45,000, 30 April 2024: £58,000).

Portfolio Investments

as at 31 October 2024