TIDMNEP TIDMNEPC
RNS Number : 4099P
Neptune-Calculus Income &Growth VCT
24 March 2009
Neptune-Calculus Income and Growth VCT plc
Final Results for the Year Ended 31 December 2008
Financial Highlights
+----------------------------+---------------------------+--------------+------------+
| | | Ordinary | C Shares |
| | | Shares | |
+----------------------------+---------------------------+--------------+------------+
| | | Year ended | Year ended |
+----------------------------+---------------------------+--------------+------------+
| | | 31 December | 31 |
| | | | December |
+----------------------------+---------------------------+--------------+------------+
| | | 2008 | 2008 |
+----------------------------+---------------------------+--------------+------------+
| Return per share | | (19.2)p | (18.0)p |
+----------------------------+---------------------------+--------------+------------+
| Net asset value per share | | 77.9p | 73.7p |
+----------------------------+---------------------------+--------------+------------+
| Cumulative dividends paid | | 8.0p | 3.9p |
| and proposed | | | |
+----------------------------+---------------------------+--------------+------------+
| | | As at | As at |
+----------------------------+---------------------------+--------------+------------+
| | | 28 February | 28 |
| | | | February |
+----------------------------+---------------------------+--------------+------------+
| | | 2009* | 2009* |
+----------------------------+---------------------------+--------------+------------+
| Unaudited net asset value | | 77.1p | 73.4p |
| per share? | | | |
+----------------------------+---------------------------+--------------+------------+
| *Being the latest practicable date prior to publication. |
| ? Including current year revenue |
+----------------------------+---------------------------+--------------+------------+
CHAIRMAN'S STATEMENT
In what has been a year of unprecedented turbulence in the economy and the
financial markets, I report your Company's activities for the year ended 31
December 2008. Overall, the performance has resulted in a decline in net asset
value of both the Ordinary and C Shares. At the end of 2007, an offer for
subscription was launched which subsequently closed on 3 April 2008 raising, net
of expenses, a combined total of GBP631,176 for the Ordinary and C Share Funds.
Investment performance
The combined Ordinary and C Share portfolios have achieved the important target
of 70 per cent to be invested in qualifying investments by 31 December 2008
which was an objective required to maintain our VCT status and the tax benefits
for original subscribers.
Our qualifying investments are managed by Calculus Capital Limited. The
performance of the AIM portfolios in the second half of the year has been very
disappointing and reflects a combination of extreme volatility in these markets
and some disappointing results and statements from some companies in the
portfolios. The FTSE AIM All-Share Index fell 63 per cent. The overall decline
in the value of our AIM portfolios during the year on a like-for-like basis was
around 49 per cent and the bulk of the decline was in the second half of the
year.
Particularly disappointing was Portland Gas which announced in October that
funding plans to build their gas storage project had fallen through.The best
performing investment was EpiStem Holdings whose share price has increased by
over 30 per cent during the year and was valued on 3 March 2009, the day
following its announcement of its major collaborative agreement with Novartis,
at 113 per cent more than book cost.
In our unquoted portfolio, the loan stocks and preference shares have retained
their value. However some of our unquoted equity investments have been
negatively impacted by the derating of comparable quoted companies as we base
our valuations on those of similar quoted companies.
Non-qualifying investments are managed by Neptune Investment Management Limited.
The performance of these funds has also suffered from the downturn of the
overall market. In September we decided in view of market uncertainties to
liquidate some of the non-qualifying portfolio and as a result raised
approximately GBP1 million which is held in various cash funds.
You will see from the accounts that the net asset values of the Ordinary and C
Shares at 31 December 2008 have declined to 77.9p per Ordinary Share and 73.7p
per C Share respectively each representing falls over the year of approximately
20 per cent.
C share conversion
As set out in the prospectus dated 5 October 2005, relating to the issue of the
C Shares, the C Shares will be converted into Ordinary Shares on 30 April 2009.
The net asset values at 31 December 2008 form the basis for calculating the
conversion ratio for converting the C Shares to Ordinary Shares. C shareholders
will therefore receive 0.9457 of an Ordinary Share for each C Share that they
own on 30 April 2009. The share certificates for the Ordinary Shares arising on
conversion will be posted to shareholders by 14 May 2009.
Dividend
In spite of difficult market conditions, the Directors are pleased to propose a
final dividend of 1p per Ordinary Share which, subject to shareholder approval,
will be payable on 5 June 2009 to all shareholders, following conversion of the
C Shares to Ordinary Shares. This is equivalent to a dividend of 0.9457p per C
Share. The record date for the dividend is 8 May 2009.
Changes in accounting policy
You will notice some differences to the way in which the accounts are presented
this year. In order to comply with FRS 25 we have been required to treat the C
Shares as a liability of the Ordinary Shares rather than as equity. Your board
does not consider this treatment to be helpful, particularly to the C
shareholders. Accordingly we have provided supplemental information to give, as
far as possible, the same information to the Ordinary and C Share holders as was
included in last year's accounts. The treatment does not affect the assets of
the C shareholders which are managed and accounted for as a separate investment
pool until they are converted into new Ordinary Shares.
VAT reclaim
In my interim statement, I mentioned that the Company was taking action to
recover VAT which had been paid on management fees following the decision by
HMRC to exempt VCTs from VAT on management fees. I am pleased to report that the
Company has already received a VAT refund of GBP68,665 from one of its
Investment Managers and is holding discussions with the other. The timing and
amount of the payment is still uncertain and accordingly no contingent asset has
been included within these accounts. We do not expect the remaining refund to
be material.
Outlook
As the Company has met its target of being 70 per cent invested in qualifying
companies, the focus now is to work to a greater extent with portfolio
companies to enable them to thrive, particularly once we move out of the current
economic downturn. The Company retains enough cash to play its role in
supporting them if required and to take advantage of investment opportunities as
they arise.
In the short term, economic conditions will remain difficult and stock markets
are likely to remain volatile. The valuations of smaller companies have
suffered more than those of larger companies and much of the bad news is already
factored into their prices. As is mentioned in the Investment Manager's review
(qualifying investments), we are starting to see the emergence of real value in
the small and micro cap markets, which offers some grounds for optimism in the
medium to longer term.
Philip Stephens
24 March 2009
INVESTMENT MANAGERS' REVIEWS
INVESTMENT MANAGER'S REVIEW (QUALIFYING INVESTMENTS)
Calculus Capital advises the Company in respect of qualifying investments made
by the Company. The investment focus of the Investment Manager has been to seek
out established companies, most of which are cash positive, in preference to
early stage companies.Following a high level of investment since each of the
funds was launched as we worked toward meeting the HM Revenue & Customs'
requirement to be 70 per cent invested in qualifying investments, the priority
now is to work closely with portfolio companies to ensure their stability and
that they can thrive once we move out of the current economic downturn.
Market commentary
Much has been already written about the credit crunch and the destabilising
effect this has had on financial markets. As such, there is little to be gained
by further retrospective analysis. The impact on the Company's target market,
has, however, been severe. 'Small cap' stocks have a higher perceived risk and
the 'small cap' market has suffered a significant de-rating during the past
year. For the record, the FTSE 100 Share Index showed a fall over the year of
30 per cent whilst the FTSE AIM All-Share Index fell 63 per cent.
Portfolio developments
At the year end, the Ordinary Share Fund's and C Share Fund's qualifying
investments comprised 20 and 18 companies respectively. The major VCT test
which the Company needed to meet was an HM Revenue & Customs requirement for the
combined Ordinary Share and C Share Funds to be at least 70 per cent invested in
qualifying investments by 31 December 2008. I am pleased to say that we
achieved this target and the overall qualifying percentage for the two funds
combined was 73.5 per cent.
Investments made during the year were:
+-------------+---------------------+------------+------------+------------+------------+
| Company | Activities | Type of | Nature of | Ordinary | C Share |
| and | |investment |investment |Share Fund | Fund |
| activity | | | | | |
+-------------+---------------------+------------+------------+------------+------------+
| Relax | Consumer debt | Equity | Follow on | GBP75,000 | GBP175,000 |
| Group | advisory and | | | | |
| plc | corporate | | | | |
| (formerly | insolvency services | | | | |
| Debts.co.uk | | | | | |
| plc) | | | | | |
+-------------+---------------------+------------+------------+------------+------------+
| Heritage | Publishing and | Equity | Follow on | GBP21,051 | GBP42,017 |
| House | media services to | Loan | | GBP22,454 | GBP174,915 |
| Media | the heritage sector | stock | | | |
| Limited | | | | | |
+-------------+---------------------+------------+------------+------------+------------+
| Optare | Manufacturers of a | Equity | New | - | GBP300,000 |
| plc | range of diesel and | | | | |
| (formerly | hybrid low emission | | | | |
| Darwen | buses | | | | |
| Holdings | | | | | |
| plc) | | | | | |
+-------------+---------------------+------------+------------+------------+------------+
| Brulines | Supplier of IT | Equity | Follow on | - | GBP130,000 |
| Group | services to the | | | | |
| plc | brewing sector | | | | |
+-------------+---------------------+------------+------------+------------+------------+
In January 2008, Egdon Resources demerged into two AIM quoted companies: Egdon
Resources which holds the group's oil and gas exploration and production assets
and Portland Gas which holds the group's gas storage assets.
As mentioned, the AIM market suffered a severe drop in value during the
financial year. Disappointing news flow was heavily punished in terms of mark
downs and positive news flow received little recognition from the market. AIM
and PLUS market quoted stocks have been marked to market as at 31 December 2008
using the 'bid' price. The share prices of a number of AIM quoted investments
declined during the year. The most significant were Hexagon Human Capital,
Portland Gas and Sport Media Group. Whereas the decline in Hexagon was not
attributable to company specific news flow but was the result of a sector and
market de-rating, the decreases in share price for Portland Gas and Sport Media
Group were caused by company specific issues. In the case of Portland Gas, the
liquidity crisis has delayed the company's ability to finance its major
development at Portland in Dorset. In the case of Sport Media, circulation
figures following the relaunch were disappointing.
Despite the prevailing market conditions, the performance of a number of AIM
quoted companies continued to improve with the largest contributions coming from
EpiStem, which is emerging as an important UK based life sciences
company. EpiStem's share price showed consistently strong performance during the
financial year and rose to a bid price of GBP2.65 representing a 113 per cent
increase on book cost, on 3 March 2009 the day following its announcement of its
major collaborative agreement with Novartis. The agreement with Novartis is
likely to have a very positive impact on EpiStem's future performance.
The overall value of the unquoted portfolio rose during the year. The major part
of this uplift occurred in the first half of the year and was reported on at the
time of the Company's interim statement. The value of the portfolio also showed
a small uplift in the second half of the year. A number of factors came into
play. Several companies recorded good performances, particularly in terms of
their gross margins and operating profits despite more challenging trading
conditions. Triage Holdings and RMS Group Holdings, in particular, achieved
strong cash generation which reduced their net debt. On the negative side, all
companies have set more conservative budgets for 2009 than would have been
expected at the interim stage and the prevailing multiples for comparable
companies, which form the basis of their valuations, have also fallen. The net
result of these factors was that Triage Holdings and RMS Group Holdings
increased in value whilst the value of Waterfall Services (formerly Cater Plus
Services) fell slightly. Further reductions in the fair value have been taken
against Heritage House Media and Pharmasmart to reflect more difficult trading
conditions. In the case of Heritage House Media, it has taken longer to
integrate the three businesses acquired eighteen months ago than expected.
RMS Group Holdings, together with other UK ports operators, is currently
involved in a dispute with the Valuation Office Agency (VOA). The VOA has
undertaken a review of the commercial rates paid by all 55 port operators in the
UK which is not yet fully complete. Operators which have been reviewed have
received significantly increased assessments backdated to 2005. Understandably,
the port operators have appealed against these assessments and, in particular,
the backdating to 2005. In January, the Treasury Select Committee strongly
criticised the VOA's actions and recommended scrapping the backdating and
deferring the increases. The port operators have now sought a judicial review
of the VOA's actions. We have reflected the possibility of a higher rates charge
in our valuation, but if it proves more difficult to pass on all or part of the
rates increase to customers, it could have a negative effect on value.
Developments since the year end
Since the year end, the Company has invested a further GBP120,000 in Managed
Support Services as part of a GBP6 million fundraising to provide funds for the
management to exploit acquisition opportunities at the depressed stage of the
business cycle.
Outlook
As mentioned above, the priority now is to work closely with portfolio companies
to ensure their stability and that they can thrive once we move out of the
current economic downturn. The Company retains enough cash to play our part in
supporting the existing portfolio if needed and to take advantage of future
investment opportunities as they arise.
Stock markets are likely to remain volatile in the short term as the difficult
economic conditions and the credit crisis continue to overhang the financial
markets. The de-rating of smaller companies has been significant and much of
the bad news is already priced into valuations of these stocks. We are starting
to see the emergence of real value in the small and micro cap markets, which
offers some grounds for optimism in the medium to longer term.
John Glencross
Calculus Capital Limited
24 March 2009
INVESTMENT MANAGER'S REVIEW (NON-QUALIFYING INVESTMENTS)
Portfolio developments
.
Neptune-Calculus Income and Growth VCT invests in the Neptune Income Fund and
the Neptune Quarterly Income Fund.
Over the period under review, the FTSE All Share Index fell 30 per cent, with
FTSE 100 faring significantly better than the rest of the market. This benefited
the portfolio, which is biased towards large-cap stocks. As a guide to the
portfolio's performance, the Neptune Income Fund and Neptune Quarterly Income
Fund posted negative returns of 26 per cent and 27 per cent respectively for the
12 months. This performance saw both Funds outperforming the IMA UK Equity
Income Sector which fell on average 29.0 per cent*.
The past twelve months were characterised by challenging conditions as the
global banking crisis spilled over into the real economy and the UK edged closer
to a recession. The policy response was significant, with central banks slashing
interest rates and governments worldwide loosening fiscal policy. The
combination of lower interest rates and falling commodity prices should give the
consumer more spending power through lower interest payments, reduced petrol
prices and falling utility costs. However, this benefit will be countered by
higher unemployment and an increased savings rate.
On a sector basis, the best performing areas in the market were the more
defensive industries, such as healthcare, consumer staples and utilities, where
we maintained overweight positions throughout the year. Our holdings in these
areas performed particularly well and we continue to feel positive about their
future performance.
The worst performing sectors within the market were, undoubtedly, financials and
materials. The banking sector performed particularly badly as the banks wrote
down their assets and consequently required capital injections, thereby diluting
their existing equity base. Our sector-based research had indicated these
problems on the horizon and thus for well over a year we have had no exposure to
banks, insurers and property stocks - a conviction call that served us
particularly well. Mining shares also performed poorly in the second half of the
year resulting in us consistently underweighting the sector.
Outlook
In light of the financial crisis, we anticipate further volatility in the equity
market. Therefore we remain focused on defensive sectors, such as healthcare and
consumer staples, and on well-capitalised companies with solid balance sheets
and sustainable dividends. We continue to maintain our focus on large-cap stocks
with leading market positions which will provide a degree of stability amid the
continued market turbulence.
Robin Geffen
Neptune Investment Management Limited
24 March 2009
*Performance figures sourced from Lipper; as at 31.12.08; based in Sterling; net
income reinvested; no initial charges
INVESTMENT PORTFOLIOS
+----------------------------------------+---------------+-----------+-----------+
| Ordinary Share Fund portfolio |
+--------------------------------------------------------------------------------+
| The ten largest holdings by value are included below: |
| As at 31 December 2008 |
+--------------------------------------------------------------------------------+
| Percentage |
+--------------------------------------------------------------------------------+
| | Cost |Valuation | of |
| | | | portfolio |
+----------------------------------------+---------------+-----------+-----------+
| | GBP | GBP | % |
+----------------------------------------+---------------+-----------+-----------+
| AIM investments (quoted equity) |
+--------------------------------------------------------------------------------+
| EpiStem Holdings plc* | 125,434 | 207,165 | 6.5 |
+----------------------------------------+---------------+-----------+-----------+
| Pressure Technologies plc | 100,401 | 163,822 | 5.2 |
+----------------------------------------+---------------+-----------+-----------+
| Brulines Group plc* | 124,777 | 126,563 | 4.0 |
+----------------------------------------+---------------+-----------+-----------+
| Other AIM investments* | 1,641,613 | 428,230 | 13.5 |
+----------------------------------------+---------------+-----------+-----------+
| | | | |
+----------------------------------------+---------------+-----------+-----------+
| Unquoted equity investments | | | |
+----------------------------------------+---------------+-----------+-----------+
| RMS Group Holdings Limited | 32,000 | 175,040 | 5.5 |
+----------------------------------------+---------------+-----------+-----------+
| Triage Holdings Limited | 16,000 | 139,856 | 4.4 |
+----------------------------------------+---------------+-----------+-----------+
| Waterfall Services Limited | 17,500 | 70,022 | 2.2 |
+----------------------------------------+---------------+-----------+-----------+
| Heritage House Media Limited | 49,121 | 196 | 0.0 |
+----------------------------------------+---------------+-----------+-----------+
| Other unquoted equity investments | 50,000 | 15,000 | 0.5 |
+----------------------------------------+---------------+-----------+-----------+
| | | | |
+----------------------------------------+---------------+-----------+-----------+
| Unquoted preference shares | | | |
+----------------------------------------+---------------+-----------+-----------+
| Triage Holdings Limited preference | 119,240 | 119,240 | 3.7 |
| shares | | | |
+----------------------------------------+---------------+-----------+-----------+
| Waterfall Services Limited preference | 40,833 | 40,833 | 1.3 |
| shares | | | |
+----------------------------------------+---------------+-----------+-----------+
| | | | |
+----------------------------------------+---------------+-----------+-----------+
| Unquoted bonds | | | |
+----------------------------------------+---------------+-----------+-----------+
| Heritage House Media Limited loan | 225,371 | 225,371 | 7.1 |
| stock* | | | |
+----------------------------------------+---------------+-----------+-----------+
| RMS Group Holdings Limited loan stock | 128,000 | 128,000 | 4.0 |
+----------------------------------------+---------------+-----------+-----------+
| Waterfall Services Limited loan stock | 116,667 | 116,667 | 3.7 |
+----------------------------------------+---------------+-----------+-----------+
| Triage Holdings Limited loan stock | 24,760 | 24,760 | 0.8 |
+----------------------------------------+---------------+-----------+-----------+
| Other unquoted loan stocks | 120,000 | 120,000 | 3.8 |
+----------------------------------------+---------------+-----------+-----------+
| Non-qualifying equity investments and | (38,321) | (33,373) | (1.1) |
| loan stock* | | | |
+----------------------------------------+---------------+-----------+-----------+
| Total qualifying investments | 2,893,396 | 2,067,392 | 65.1 |
+----------------------------------------+---------------+-----------+-----------+
| Quoted funds |
+--------------------------------------------------------------------------------+
| Neptune Quarterly Income Fund Income | 439,047 | 412,272 | 13.0 |
| Units | | | |
+----------------------------------------+---------------+-----------+-----------+
| The Neptune Income Fund Income A Class | 435,453 | 404,567 | 12.7 |
+----------------------------------------+---------------+-----------+-----------+
| Unquoted funds | | | |
+----------------------------------------+---------------+-----------+-----------+
| GS Sterling Liquid Reserves | 256,728 | 256,728 | 8.1 |
+----------------------------------------+---------------+-----------+-----------+
| Other unquoted funds | 426 | 426 | 0.0 |
+----------------------------------------+---------------+-----------+-----------+
| Non-qualifying equity investments and | 38,321 | 33,373 | 1.1 |
| loan stock* | | | |
+----------------------------------------+---------------+-----------+-----------+
| Total non-qualifying investments | 1,169,975 |1,107,366 | 34.9 |
+----------------------------------------+---------------+-----------+-----------+
| Total investments | 4,063,371 |3,174,758 | 100.0 |
+----------------------------------------+---------------+-----------+-----------+
* The valuations of certain Ordinary Share Fund investments include small
purchases made which are non-qualifying investments. These cost GBP7,334 and
are valued at GBP2,386. The valuation of Heritage House Media loan stock
includes GBP30,987 of rolled up interest which is non-qualifying.
INVESTMENT PORTFOLIOS
+----------------------------------------+---------------+-------------+-----------+
| C Share Fund portfolio |
+----------------------------------------------------------------------------------+
| The ten largest holdings by value are included below: |
| As at 31 December 2008 |
+----------------------------------------------------------------------------------+
| Percentage |
+----------------------------------------------------------------------------------+
| | Cost | Valuation | of |
| | | | portfolio |
+----------------------------------------+---------------+-------------+-----------+
| | GBP | GBP | % |
+----------------------------------------+---------------+-------------+-----------+
| AIM investments (quoted equity) |
+----------------------------------------------------------------------------------+
| EpiStem Holdings plc* | 125,215 | 206,859 | 3.4 |
+----------------------------------------+---------------+-------------+-----------+
| Other AIM Investments | 2,634,111 | 965,998 | 15.9 |
+----------------------------------------+---------------+-------------+-----------+
| | | | |
+----------------------------------------+---------------+-------------+-----------+
| Unquoted equity investments |
+----------------------------------------------------------------------------------+
| RMS Group Holdings Limited | 68,044 | 372,015 | 6.1 |
+----------------------------------------+---------------+-------------+-----------+
| Triage Holdings Limited | 32,000 | 279,712 | 4.6 |
+----------------------------------------+---------------+-------------+-----------+
| Waterfall Services Limited | 32,629 | 130,098 | 2.2 |
+----------------------------------------+---------------+-------------+-----------+
| Heritage House Media Limited | 98,248 | 393 | 0.0 |
+----------------------------------------+---------------+-------------+-----------+
| Other unquoted equity investments | 250,000 | 62,500 | 1.0 |
+----------------------------------------+---------------+-------------+-----------+
| Unquoted preference shares | | | |
+----------------------------------------+---------------+-------------+-----------+
| Triage Holdings Limited preference | 238,480 | 238,480 | 3.9 |
| shares | | | |
+----------------------------------------+---------------+-------------+-----------+
| Waterfall Services Limited preference | 75,834 | 75,834 | 1.3 |
| shares | | | |
+----------------------------------------+---------------+-------------+-----------+
| Unquoted bonds | | | |
+----------------------------------------+---------------+-------------+-----------+
| Heritage House Media Limited loan | 582,118 | 582,118 | 9.6 |
| stock* | | | |
+----------------------------------------+---------------+-------------+-----------+
| RMS Group Holdings Limited loan stock | 272,000 | 272,000 | 4.5 |
+----------------------------------------+---------------+-------------+-----------+
| Waterfall Services Limited loan stock | 216,666 | 216,666 | 3.6 |
+----------------------------------------+---------------+-------------+-----------+
| Triage Holdings Limited loan stock | 49,520 | 49,520 | 0.8 |
+----------------------------------------+---------------+-------------+-----------+
| Non-qualifying equity investments and | (63,604) | (63,604) | (1.0) |
| loan stock* | | | |
+----------------------------------------+---------------+-------------+-----------+
| Total qualifying investments | 4,611,261 | 3,388,589 | 55.9 |
+----------------------------------------+---------------+-------------+-----------+
| Quoted funds |
+----------------------------------------------------------------------------------+
| Neptune Quarterly Income Fund Income | 825,366 | 629,548 | 10.4 |
| Units | | | |
+----------------------------------------+---------------+-------------+-----------+
| The Neptune Income Fund Income A Class | 810,271 | 608,994 | 10.1 |
+----------------------------------------+---------------+-------------+-----------+
| Unquoted funds |
+----------------------------------------------------------------------------------+
| Fidelity Sterling Fund distributing | 614,060 | 614,060 | 10.1 |
| shares class A | | | |
+----------------------------------------+---------------+-------------+-----------+
| SWIP Global Liquidity Fund | 500,000 | 500,000 | 8.3 |
+----------------------------------------+---------------+-------------+-----------+
| GS Sterling Liquid Reserves | 256,728 | 256,728 | 4.2 |
+----------------------------------------+---------------+-------------+-----------+
| Non-qualifying equity investments and | 63,604 | 63,604 | 1.0 |
| loan stock* | | | |
+----------------------------------------+---------------+-------------+-----------+
| Total non-qualifying investments | 3,070,029 | 2,672,934 | 44.1 |
+----------------------------------------+---------------+-------------+-----------+
| Total investments | 7,681,290 | 6,061,523 | 100.0 |
+----------------------------------------+---------------+-------------+-----------+
* The valuations of certain C Share Fund investments include small purchases
made which are non-qualifying investments. These cost GBP260 and are valued at
GBP260. The valuation of Heritage House Media loan stock includes GBP63,344 of
rolled up interest which is non-qualifying.
Management of risk
The Company is exposed to a variety of risks and the principal risks identified
by the Board are noted below.
The Company is required at all times to observe the conditions within the Income
Tax Act 2007 for the maintenance of approved VCT status. This involves
compliance with a number of tests which, if not met, could result in the loss of
a number of tax reliefs which are currently available to both the Company and
its shareholders under its VCT status. The tests are under continual review by
the administrators and (qualifying) Investment Manager of the Company. The
Board keep these matters under continual review through the provision of monthly
management information and quarterly Board meetings. The Board has also
retained the services of a VCT consultant to undertake an independent monitoring
role.
The majority of the Company's investments will ultimately be in small and medium
size companies as VCT qualifying holdings. These companies may not be publicly
traded or freely marketable and realisations of such investments can be
difficult and can take a considerable amount of time. They also, by their
nature, tend to carry higher risk than a larger or longer established
business.This risk is in part mitigated by diversifying the investments and
maintaining around 75 per cent of the Company's portfolio in liquid assets to
enable any short term cash requirements to be met.
In addition, the Company is subject to market risk constituting uncertainty
about the future prices of financial instruments held by the Company. The
Company has also invested in loan stocks and as a result is subject to credit
risk. The majority of the loan stocks are fixed rate so the Board does not
consider interest rate risk to be material. The Company has no exposure to
foreign currency risk, nor does it have any interest bearing liabilities.
The Board regularly reviews the risks the business faces and their potential
impact on the Company. The Board monitors the Company's performance through the
use of regular financial information and administrator and management reports.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
Company law in the United Kingdom requires the Directors to prepare accounts for
each financial year, which give a true and fair view of the state of affairs of
the Company and of the return of the Company for that period. In preparing
these accounts, the Directors have:
* selected suitable accounting policies and applied them consistently;
* made judgments and estimates that are reasonable and prudent;
* followed applicable United Kingdom accounting standards; and
* prepared the accounts on the going concern basis.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the accounts comply with the Companies
Acts 1985 and 2006. They are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for ensuring that the Directors' Report and other
information included in the Annual Report is prepared in accordance with company
law in the United Kingdom. They are also responsible for ensuring that the
Annual Report includes information required by the Listing Rules of the
Financial Services Authority.
The accounts are published on the www.calculuscapital.com website, which is a
website maintained by the Company's Investment Manager, Calculus Capital Limited
("CCL"). The maintenance and integrity of the website maintained by CCL is, so
far as it relates to the Company, the responsibility of CCL. The work carried
out by the auditors does not involve consideration of the maintenance and
integrity of this website and accordingly, the auditors accept no responsibility
for any changes that have occurred to the accounts since they were initially
presented on the website. Visitors to the website need to be aware that
legislation in the United Kingdom governing the preparation and dissemination of
the accounts may differ from legislation in their jurisdiction.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE ANNUAL FINANCIAL
REPORT
We confirm that to the best of our knowledge that:
* the accounts, prepared in accordance with applicable accounting standards , give
a true and fair view of the assets, liabilities, financial position and profit
or loss of the Company; and
* the Directors' Report includes a fair review of the development, performance and
financial position of the Company together with a description of the principal
risks and uncertainties that it faces.
On behalf of the Board
Philip Stephens
Chairman
24 March 2009
INCOME STATEMENTS
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| for the year ended 31 December 2008 |
+------------------------------------------------------------------------------------------------------+
| Ordinary Share Fund |
+------------------------------------------------------------------------------------------------------+
| | | | Year ended | | Year ended |
+-------------------------------+------+---------+---------------------+---------+---------------------+
| | | 31 December 2008 | 31 December 2007 |
+-------------------------------+------+-------------------------------+-------------------------------+
| | |Revenue | Capital | Total |Revenue | Capital | Total |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| |Note | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| Losses on investments at fair | 8 | - | (809) | (809) | - | (421) | (421) |
| value | | | | | | | |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| Income | 2 | 147 | - | 147 | 133 | - | 133 |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| Investment management fee | 3 | (15) | (43) | (58) | (19) | (57) | (76) |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| Other expenses | 4 | (53) | - | (53) | (55) | - | (55) |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| Return/(deficit) on ordinary | | 79 | (852) | (773) | 59 | (478) | (419) |
| activities before taxation | | | | | | | |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| Taxation on ordinary | 5 | (2) | - | (2) | (2) | - | (2) |
| activities | | | | | | | |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| Return/(deficit) attributable | | 77 | (852) | (775) | 57 | (478) | (421) |
| to Ordinary shareholders | | | | | | | |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| Return per Ordinary Share | 7 | 1.91p | (21.12)p |(19.21)p | 1.51p | (12.59)p | (11.08)p |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| C Share Fund | | | | | |
+-------------------------------+------+---------+---------------------+---------+---------------------+
| | | | Year ended | Year ended |
+-------------------------------+------+---------+---------------------+-------------------------------+
| | | 31 December 2008 | 31 December 2007 |
+-------------------------------+------+-------------------------------+-------------------------------+
| | |Revenue | Capital | Total |Revenue | Capital | Total |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| Losses on investments at fair | 8 | - | (1,635) | (1,635) | - | (752) | (752) |
| value | | | | | | | |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| Income | 2 | 302 | - | 302 | 279 | - | 279 |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| Investment management fee | 3 | (28) | (85) | (113) | (38) | (115) | (153) |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| Other expenses | 4 | (113) | - | (113) | (119) | - | (119) |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| Return/(deficit) on ordinary | | 161 | (1,720) | (1,559) | 122 | (867) | (745) |
| activities before taxation | | | | | | | |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| Taxation on ordinary | 5 | (3) | - | (3) | (3) | - | (3) |
| activities | | | | | | | |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| Return/(deficit) attributable | | 158 | (1,720) | (1,562) | 119 | (867) | (748) |
| to C shareholders* | | | | | | | |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
| Return per C Share | 7 | 1.82p | (19.79)p | (17.97)p | 1.42p | (10.34)p | (8.92)p |
+-------------------------------+------+---------+----------+----------+---------+----------+----------+
*The return/(deficit) on ordinary activities attributable to C shareholders is
shown as a finance charge in the Total Income Statement.
The relevant accompanying notes are an integral part of these statements which
do not form part of the Company's statutory accounts but provide supplementary
information.
INCOME STATEMENTS
+--------------------------------+------+----------+----------+----------+----------+----------+-------------+
| for the year ended 31 December 2008 |
+------------------------------------------------------------------------------------------------------------+
| Total |
+------------------------------------------------------------------------------------------------------------+
| | | | Year ended | | Year ended |
+--------------------------------+------+----------+---------------------+----------+------------------------+
| | | 31 December 2008 | 31 December 2007 |
+--------------------------------+------+--------------------------------+-----------------------------------+
| | | | | | | | (restated)* |
+--------------------------------+------+----------+----------+----------+----------+----------+-------------+
| | | Revenue | Capital | Total | Revenue | Capital | Total |
+--------------------------------+------+----------+----------+----------+----------+----------+-------------+
| |Note | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+------+----------+----------+----------+----------+----------+-------------+
| Losses on investments at fair | 8 | - | (2,444) | (2,444) | - | (1,173) | (1,173) |
| value | | | | | | | |
+--------------------------------+------+----------+----------+----------+----------+----------+-------------+
| Income | 2 | 449 | - | 449 | 412 | - | 412 |
+--------------------------------+------+----------+----------+----------+----------+----------+-------------+
| Investment management fee | 3 | (43) | (128) | (171) | (57) | (172) | (229) |
+--------------------------------+------+----------+----------+----------+----------+----------+-------------+
| Other expenses | 4 | (166) | - | (166) | (174) | - | (174) |
+--------------------------------+------+----------+----------+----------+----------+----------+-------------+
| Return/(deficit) on ordinary | | 240 | (2,572) | (2,332) | 181 | (1,345) | (1,164) |
| activities before finance | | | | | | | |
| charges and taxation | | | | | | | |
+--------------------------------+------+----------+----------+----------+----------+----------+-------------+
| Finance charges | | (158) | 1,720 | 1,562 | (119) | 867 | 748 |
+--------------------------------+------+----------+----------+----------+----------+----------+-------------+
| Taxation on ordinary | 5 | (5) | - | (5) | (5) | - | (5) |
| activities | | | | | | | |
+--------------------------------+------+----------+----------+----------+----------+----------+-------------+
| Return/(deficit) attributable | | 77 | (852) | (775) | 57 | (478) | (421) |
| to Ordinary shareholders | | | | | | | |
+--------------------------------+------+----------+----------+----------+----------+----------+-------------+
| Return per Ordinary share | 7 | 1.91p | (21.12)p | (19.21)p | 1.51p | (12.59)p | (11.08)p |
+--------------------------------+------+----------+----------+----------+----------+----------+-------------+
*Details of the restatement are set out in notes 1 and 22.
The total column of this statement is the profit and loss account of the
Company.
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the year.
There is no statement of recognised gains and losses as there were no other
gains and losses.
The relevant accompanying notes are an integral part of this statement.
RECONCILIATIONS OF MOVEMENTS IN SHAREHOLDERS' FUNDS
+------------------+----------+----------+----------+----------+----------+----------+
| for the year ended 31 December 2008 |
+------------------------------------------------------------------------------------+
| Ordinary Share Fund |
+------------------------------------------------------------------------------------+
| | Share | Share | Special | Capital | Revenue | |
| | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| | capital | premium | reserve | reserve | reserve | Total |
+------------------+----------+----------+----------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------+----------+----------+----------+----------+----------+----------+
| For the | | | | | | |
| year 1 | | | | | | |
| January | | | | | | |
| 2008 to | | | | | | |
| 31 | | | | | | |
| December | | | | | | |
| 2008 | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| 1 | 379 | 21 | 3,187 | 100 | 34 | 3,721 |
| January | | | | | | |
| 2008 | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| Issue of | 31 | 277 | - | - | - | 308 |
| shares | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| Expenses | - | (17) | - | - | - | (17) |
| of share | | | | | | |
| issue | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| Net | - | - | - | (852) | 77 | (775) |
| (deficit)/return | | | | | | |
| after taxation | | | | | | |
| for the year | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| Dividends | - | - | - | (7) | (34) | (41) |
| paid | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| 31 | 410 | 281 | 3,187 | (759) | 77 | 3,196 |
| December | | | | | | |
| 2008 | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| For the | | | | | | |
| year 1 | | | | | | |
| January | | | | | | |
| 2007 to | | | | | | |
| 31 | | | | | | |
| December | | | | | | |
| 2007 | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| 1 | 379 | 21 | 3,187 | 681 | 33 | 4,301 |
| January | | | | | | |
| 2007 | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| Net | - | - | - | (478) | 57 | (421) |
| (deficit)/return | | | | | | |
| after taxation | | | | | | |
| for the year | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| Dividends | - | - | - | (103) | (56) | (159) |
| paid | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| 31 | 379 | 21 | 3,187 | 100 | 34 | 3,721 |
| December | | | | | | |
| 2007 | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| C Share | | | | | | |
| Fund | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| | Share | Share | Special | Capital | Revenue | |
| | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| | capital | premium | reserve | reserve | reserve | Total |
+------------------+----------+----------+----------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------+----------+----------+----------+----------+----------+----------+
| For the | | | | | | |
| year 1 | | | | | | |
| January | | | | | | |
| 2008 to | | | | | | |
| 31 | | | | | | |
| December | | | | | | |
| 2008 | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| 1 | 839 | - | 7,097 | (230) | 74 | 7,780 |
| January | | | | | | |
| 2008 | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| Issue of | 39 | 321 | - | - | - | 360 |
| shares | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| Expenses | - | (19) | - | - | - | (19) |
| of share | | | | | | |
| issue | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| Net | - | - | - | (1,720) | 158 | (1,562) |
| (deficit)/return | | | | | | |
| after taxation | | | | | | |
| for the year | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| Dividends | - | - | - | (14) | (73) | (87) |
| paid | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| 31 | 878 | 302 | 7,097 | (1,964) | 159 | 6,472 |
| December | | | | | | |
| 2008 | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| For the | | | | | | |
| year 1 | | | | | | |
| January | | | | | | |
| 2007 to | | | | | | |
| 31 | | | | | | |
| December | | | | | | |
| 2007 | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| 1 | 839 | - | 7,097 | 675 | 85 | 8,696 |
| January | | | | | | |
| 2007 | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| Net | - | - | - | (867) | 119 | (748) |
| (deficit)/return | | | | | | |
| after taxation | | | | | | |
| for the year | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| Dividends | - | - | - | (38) | (130) | (168) |
| paid | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
| 31 | 839 | - | 7,097 | (230) | 74 | 7,780 |
| December | | | | | | |
| 2007 | | | | | | |
+------------------+----------+----------+----------+----------+----------+----------+
The relevant accompanying notes are an integral part of these statements which
do not form part of the Company's statutory accounts but provide supplementary
information.
RECONCILIATIONS OF MOVEMENTS IN SHAREHOLDERS' FUNDS
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| for the year ended 31 December | | | | | | |
| 2008 | | | | | | |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| Total | | | | | | |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| | Share | Share | Special | Capital | Revenue | |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| | capital | premium | reserve | reserve | reserve | Total |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| | | | | | | |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| For the year 1 January 2008 to | | | | | | |
| 31 December 2008 | | | | | | |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| 1 January 2008 (as previously | 1,218 | 21 | 10,284 | (130) | 108 | 11,501 |
| stated) | | | | | | |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| Restatement of prior years* | (839) | - | (7,097) | 230 | (74) | (7,780) |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| 1 January 2008 (restated)* | 379 | 21 | 3,187 | 100 | 34 | 3,721 |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| Issue of shares | 31 | 277 | - | - | - | 308 |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| Expenses of share issue | - | (17) | - | - | - | (17) |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| Net (deficit)/return after | - | - | - | (852) | 77 | (775) |
| taxation for the year | | | | | | |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| Dividends paid | - | - | - | (7) | (34) | (41) |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| 31 December 2008 | 410 | 281 | 3,187 | (759) | 77 | 3,196 |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| | | | | | | |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| For the year 1 January 2007 to | | | | | | |
| 31 December 2007 | | | | | | |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| 1 January 2007 (as previously | 1,218 | 21 | 10,284 | 1,356 | 118 | 12,997 |
| stated) | | | | | | |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| Restatement of prior years* | (839) | - | (7,097) | (675) | (85) | (8,696) |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| 1 January 2007 (restated)* | 379 | 21 | 3,187 | 681 | 33 | 4,301 |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| Net (deficit)/return after | - | - | - | (478) | 57 | (421) |
| taxation for the year | | | | | | |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| Dividends paid | - | - | - | (103) | (56) | (159) |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
| 31 December 2007 | 379 | 21 | 3,187 | 100 | 34 | 3,721 |
+-----------------------------------+---------+---------+---------+---------+---------+---------+
*Details of the restatement are set out in notes 1 and 22.
The relevant accompanying notes are an integral part of this statement
.
BALANCE SHEETS
+---------------------------------------+----------+--------------+------------+
| as at 31 December 2008 |
+------------------------------------------------------------------------------+
| Ordinary Share Fund |
+------------------------------------------------------------------------------+
| | | 31 December | 31 |
| | | | December |
+---------------------------------------+----------+--------------+------------+
| | | 2008 | 2007 |
+---------------------------------------+----------+--------------+------------+
| | Note | GBP'000 | GBP'000 |
+---------------------------------------+----------+--------------+------------+
| Fixed Assets |
+------------------------------------------------------------------------------+
| Investments at fair value through | 8 | 3,175 | 3,659 |
| profit or loss | | | |
+---------------------------------------+----------+--------------+------------+
| Current Assets |
+------------------------------------------------------------------------------+
| Debtors | 10 | 26 | 26 |
+---------------------------------------+----------+--------------+------------+
| Cash at bank | | 57 | 57 |
+---------------------------------------+----------+--------------+------------+
| | | 83 | 83 |
+---------------------------------------+----------+--------------+------------+
| Creditors: Amounts falling due within one year |
+------------------------------------------------------------------------------+
| Creditors | 11 | (62) | (20) |
+---------------------------------------+----------+--------------+------------+
| Bank overdraft | | - | (1) |
+---------------------------------------+----------+--------------+------------+
| | | (62) | (21) |
+---------------------------------------+----------+--------------+------------+
| Net Current Assets | | 21 | 62 |
+---------------------------------------+----------+--------------+------------+
| Net Assets | | 3,196 | 3,721 |
+---------------------------------------+----------+--------------+------------+
| |
+------------------------------------------------------------------------------+
| Represented by: |
+------------------------------------------------------------------------------+
| CALLED UP SHARE CAPITAL AND RESERVES |
+------------------------------------------------------------------------------+
| Share capital | 13 | 410 | 379 |
+---------------------------------------+----------+--------------+------------+
| Share premium | 14 | 281 | 21 |
+---------------------------------------+----------+--------------+------------+
| Special reserve | 14 | 3,187 | 3,187 |
+---------------------------------------+----------+--------------+------------+
| Capital reserve realised | 14 | 129 | 231 |
+---------------------------------------+----------+--------------+------------+
| Capital reserve unrealised | 14 | (888) | (131) |
+---------------------------------------+----------+--------------+------------+
| Revenue reserve | 14 | 77 | 34 |
+---------------------------------------+----------+--------------+------------+
| Total Ordinary shareholders' funds | | 3,196 | 3,721 |
+---------------------------------------+----------+--------------+------------+
| Net asset value per Ordinary Share | 15 | 77.94p | 98.09p |
+---------------------------------------+----------+--------------+------------+
The relevant accompanying notes are an integral part of this statement which
does not form part of the Company's statutory accounts but provides
supplementary information.
BALANCE SHEETS
+---------------------------------------+----------+--------------+------------+
| as at 31 December 2008 |
+------------------------------------------------------------------------------+
| C Share Fund |
+------------------------------------------------------------------------------+
| | | 31 December | 31 |
| | | | December |
+---------------------------------------+----------+--------------+------------+
| | | 2008 | 2007 |
+---------------------------------------+----------+--------------+------------+
| | Note | GBP'000 | GBP'000 |
+---------------------------------------+----------+--------------+------------+
| Fixed Assets |
+------------------------------------------------------------------------------+
| Investments at fair value through | 8 | 6,061 | 7,581 |
| profit or loss | | | |
+---------------------------------------+----------+--------------+------------+
| Current Assets | | | |
+---------------------------------------+----------+--------------+------------+
| Debtors | 10 | 43 | 26 |
+---------------------------------------+----------+--------------+------------+
| Cash at bank | | 492 | 217 |
+---------------------------------------+----------+--------------+------------+
| | | 535 | 243 |
+---------------------------------------+----------+--------------+------------+
| Creditors: Amounts falling due within one year |
+------------------------------------------------------------------------------+
| Creditors | 11 | (124) | (44) |
+---------------------------------------+----------+--------------+------------+
| Net Current Assets | | 411 | 199 |
+---------------------------------------+----------+--------------+------------+
| Net Assets | | 6,472 | 7,780 |
+---------------------------------------+----------+--------------+------------+
| |
+------------------------------------------------------------------------------+
| Represented by: |
+------------------------------------------------------------------------------+
| CALLED UP SHARE CAPITAL AND RESERVES |
+------------------------------------------------------------------------------+
| Share capital | 13 | 878 | 839 |
+---------------------------------------+----------+--------------+------------+
| Share premium | 14 | 302 | - |
+---------------------------------------+----------+--------------+------------+
| Special reserve | 14 | 7,097 | 7,097 |
+---------------------------------------+----------+--------------+------------+
| Capital reserve realised | 14 | (344) | (82) |
+---------------------------------------+----------+--------------+------------+
| Capital reserve unrealised | 14 | (1,620) | (148) |
+---------------------------------------+----------+--------------+------------+
| Revenue reserve | 14 | 159 | 74 |
+---------------------------------------+----------+--------------+------------+
| Total C Shareholders' funds | | 6,472 | 7,780 |
+---------------------------------------+----------+--------------+------------+
| Net asset value per C Share | 15 | 73.74p | 92.69p |
+---------------------------------------+----------+--------------+------------+
The relevant accompanying notes are an integral part of these statements which
do not form part of the Company's statutory accounts but provide supplementary
information.
The amounts attributable to the C shareholders are shown as a liability in the
Total Balance Sheet. BALANCE SHEETS
+---------------------------------------+----------+-----+--------------+-------------+
| as at 31 December 2008 |
+-------------------------------------------------------------------------------------+
| Total |
+-------------------------------------------------------------------------------------+
| | | 31 December | 31 |
| | | | December |
+---------------------------------------+----------------+--------------+-------------+
| | | 2008 | 2007 |
+---------------------------------------+----------------+--------------+-------------+
| | | | (restated)* |
+---------------------------------------+----------------+--------------+-------------+
| | Note | GBP'000 | GBP'000 |
+---------------------------------------+----------------+--------------+-------------+
| Fixed Assets |
+-------------------------------------------------------------------------------------+
| Investments at fair value through | 8 | 9,236 | 11,240 |
| profit or loss | | | |
+---------------------------------------+----------------+--------------+-------------+
| Current Assets |
+-------------------------------------------------------------------------------------+
| Debtors | 10 | 69 | 52 |
+---------------------------------------+----------------+--------------+-------------+
| Cash at bank | | 549 | 274 |
+---------------------------------------+----------------+--------------+-------------+
| | | 618 | 326 |
+---------------------------------------+----------------+--------------+-------------+
| Creditors: Amounts falling due within one year |
+-------------------------------------------------------------------------------------+
| Creditors | 11 | (186) | (64) |
+---------------------------------------+----------+--------------------+-------------+
| Liability to the C Share Fund | 12 | (6,472) | (7,780) |
+---------------------------------------+----------+--------------------+-------------+
| Bank overdraft | | - | (1) |
+---------------------------------------+----------+--------------------+-------------+
| | | (6,658) | (7,845) |
+---------------------------------------+----------+--------------------+-------------+
| Net Current Liabilities | | (6,040) | (7,519) |
+---------------------------------------+----------+--------------------+-------------+
| Net Assets | | 3,196 | 3,721 |
+---------------------------------------+----------+--------------------+-------------+
| |
+-------------------------------------------------------------------------------------+
| Represented by: |
+-------------------------------------------------------------------------------------+
| CALLED UP SHARE CAPITAL AND RESERVES |
+-------------------------------------------------------------------------------------+
| Share capital | 13 | 410 | 379 |
+---------------------------------------+----------------+--------------+-------------+
| Share premium | 14 | 281 | 21 |
+---------------------------------------+----------------+--------------+-------------+
| Special reserve | 14 | 3,187 | 3,187 |
+---------------------------------------+----------------+--------------+-------------+
| Capital reserve realised | 14 | 129 | 231 |
+---------------------------------------+----------------+--------------+-------------+
| Capital reserve unrealised | 14 | (888) | (131) |
+---------------------------------------+----------------+--------------+-------------+
| Revenue reserve | 14 | 77 | 34 |
+---------------------------------------+----------------+--------------+-------------+
| Total Ordinary shareholders' funds | | 3,196 | 3,721 |
+---------------------------------------+----------------+--------------+-------------+
| Net asset value per Ordinary share | 15 | 77.94p | 98.09p |
+---------------------------------------+----------+-----+--------------+-------------+
*Details of the restatement are set out in notes 1 and 22.
The relevant accompanying notes are an integral part of this statement
CASH FLOW STATEMENTS
+-----------------------+--------+----------+----------+
| for | | | |
| the | | | |
| year | | | |
| ended | | | |
| 31 | | | |
| December | | | |
| 2008 | | | |
+-----------------------+--------+----------+----------+
| Ordinary | | | |
| Share | | | |
| Fund | | | |
+-----------------------+--------+----------+----------+
| | | Year | Year |
| | | ended | ended |
+-----------------------+--------+----------+----------+
| | | 31 | 31 |
| | | December | December |
+-----------------------+--------+----------+----------+
| | | 2008 | 2007 |
+-----------------------+--------+----------+----------+
| | Note | | GBP'000 |
| | | GBP'000 | |
+-----------------------+--------+----------+----------+
| Operating | | | |
| activities | | | |
+-----------------------+--------+----------+----------+
| Investment | | 114 | 108 |
| income | | | |
| received | | | |
+-----------------------+--------+----------+----------+
| Deposit | | 4 | 5 |
| income | | | |
| received | | | |
+-----------------------+--------+----------+----------+
| Other | | 1 | - |
| income | | | |
| received | | | |
+-----------------------+--------+----------+----------+
| Investment | | (16) | (94) |
| management | | | |
| fees paid | | | |
+-----------------------+--------+----------+----------+
| Administration | | (9) | (13) |
| fees paid | | | |
+-----------------------+--------+----------+----------+
| Other | | (42) | (38) |
| cash | | | |
| payments | | | |
+-----------------------+--------+----------+----------+
| Net | 16 | 52 | (32) |
| cash | | | |
| inflow/(outflow) | | | |
| from operating | | | |
| activities | | | |
+-----------------------+--------+----------+----------+
| Investing | | | |
| activities | | | |
+-----------------------+--------+----------+----------+
| Purchase | | (369) | (2,683) |
| of | | | |
| investments | | | |
+-----------------------+--------+----------+----------+
| Sale | | 75 | 2,875 |
| of | | | |
| investments | | | |
+-----------------------+--------+----------+----------+
| Net | | (294) | 192 |
| cash (outflow)/inflow | | | |
| from investing | | | |
| activities | | | |
+-----------------------+--------+----------+----------+
| Equity | | (41) | (159) |
| dividends | | | |
| paid | | | |
+-----------------------+--------+----------+----------+
| Financing | | | |
+-----------------------+--------+----------+----------+
| Proceeds | | 308 | - |
| of share | | | |
| issue | | | |
+-----------------------+--------+----------+----------+
| Expenses | | (24) | (4) |
| of share | | | |
| issue | | | |
+-----------------------+--------+----------+----------+
| Net | | 284 | (4) |
| cash | | | |
| inflow/(outflow) | | | |
| from financing | | | |
+-----------------------+--------+----------+----------+
| Increase/(decrease) | 17 | 1 | (3) |
| in cash | | | |
+-----------------------+--------+----------+----------+
The relevant accompanying notes are an integral part of this statement which
does not form part of the Company's statutory accounts but provides
supplementary information. CASH FLOW STATEMENTS
+------------------+--------+----------+----------+
| for | | | |
| the | | | |
| year | | | |
| ended | | | |
| 31 | | | |
| December | | | |
| 2008 | | | |
+------------------+--------+----------+----------+
| C | | | |
| Share | | | |
| Fund | | | |
+------------------+--------+----------+----------+
| | | Year | Year |
| | | ended | ended |
+------------------+--------+----------+----------+
| | | 31 | 31 |
| | | December | December |
+------------------+--------+----------+----------+
| | | 2008 | 2007 |
+------------------+--------+----------+----------+
| | Note | | GBP'000 |
| | | GBP'000 | |
+------------------+--------+----------+----------+
| Operating | | | |
| activities | | | |
+------------------+--------+----------+----------+
| Investment | | 214 | 260 |
| income | | | |
| received | | | |
+------------------+--------+----------+----------+
| Deposit | | 23 | 8 |
| income | | | |
| received | | | |
+------------------+--------+----------+----------+
| Other | | 2 | - |
| income | | | |
| received | | | |
+------------------+--------+----------+----------+
| Investment | | (48) | (198) |
| management | | | |
| fees paid | | | |
+------------------+--------+----------+----------+
| Administration | | (18) | (26) |
| fees paid | | | |
+------------------+--------+----------+----------+
| Other | | (95) | (84) |
| cash | | | |
| payments | | | |
+------------------+--------+----------+----------+
| Net | 16 | 78 | (40) |
| cash | | | |
| inflow/(outflow) | | | |
| from operating | | | |
| activities | | | |
+------------------+--------+----------+----------+
| Investing | | | |
| activities | | | |
+------------------+--------+----------+----------+
| Purchase | | (2,078) | (4,033) |
| of | | | |
| investments | | | |
+------------------+--------+----------+----------+
| Sale | | 2,028 | 4,407 |
| of | | | |
| investments | | | |
+------------------+--------+----------+----------+
| Net | | (50) | 374 |
| cash | | | |
| (outflow)/inflow | | | |
| from investing | | | |
| activities | | | |
+------------------+--------+----------+----------+
| Equity | | (87) | (168) |
| dividends | | | |
| paid | | | |
+------------------+--------+----------+----------+
| Financing | | | |
+------------------+--------+----------+----------+
| Proceeds | | 360 | - |
| of share | | | |
| issue | | | |
+------------------+--------+----------+----------+
| Costs | | (26) | (109) |
| of | | | |
| share | | | |
| issue | | | |
+------------------+--------+----------+----------+
| Net | | 334 | (109) |
| cash | | | |
| inflow/(outflow) | | | |
| from financing | | | |
+------------------+--------+----------+----------+
| Increase | 17 | 275 | 57 |
| in cash | | | |
+------------------+--------+----------+----------+
The relevant accompanying notes are an integral part of this statement which
does not form part of the Company's statutory accounts but provides
supplementary information. CASH FLOW STATEMENTS
+-----------------------------------------+------+--------------+-------------------------------+
| for the year ended 31 December 2008 | | | |
+-----------------------------------------+------+--------------+-------------------------------+
| Total | | | |
+-----------------------------------------+------+--------------+-------------------------------+
| | | Year ended | Year ended |
+-----------------------------------------+------+--------------+-------------------------------+
| | | 31 December | 31 |
| | | | December |
+-----------------------------------------+------+--------------+-------------------------------+
| | | 2008 | 2007 |
+-----------------------------------------+------+--------------+-------------------------------+
| | | | (restated)* |
+-----------------------------------------+------+--------------+-------------------------------+
| |Note | GBP'000 | GBP'000 |
+-----------------------------------------+------+--------------+-------------------------------+
| Operating activities | | | |
+-----------------------------------------+------+--------------+-------------------------------+
| Investment income received | | 328 | 368 |
+-----------------------------------------+------+--------------+-------------------------------+
| Deposit income received | | 27 | 13 |
+-----------------------------------------+------+--------------+-------------------------------+
| Other Income received | | 3 | - |
+-----------------------------------------+------+--------------+-------------------------------+
| Investment management fees paid | | (64) | (292) |
+-----------------------------------------+------+--------------+-------------------------------+
| Administration fees paid | | (27) | (39) |
+-----------------------------------------+------+--------------+-------------------------------+
| Other cash payments | | (137) | (122) |
+-----------------------------------------+------+--------------+-------------------------------+
| Net cash inflow/(outflow) from | 16 | 130 | (72) |
| operating activities | | | |
+-----------------------------------------+------+--------------+-------------------------------+
| Investing activities | | | |
+-----------------------------------------+------+--------------+-------------------------------+
| Purchase of investments | | (2,447) | (6,716) |
+-----------------------------------------+------+--------------+-------------------------------+
| Sale of investments | | 2,103 | 7,282 |
+-----------------------------------------+------+--------------+-------------------------------+
| Net cash (outflow)/inflow from | | (344) | 566 |
| investing activities | | | |
+-----------------------------------------+------+--------------+-------------------------------+
| Equity dividends paid | | (41) | (159) |
+-----------------------------------------+------+--------------+-------------------------------+
| Financing | | | |
+-----------------------------------------+------+--------------+-------------------------------+
| Distributions made to C shareholders | | (87) | (168) |
+-----------------------------------------+------+--------------+-------------------------------+
| Net proceeds from C Share issue | | 334 | (109) |
+-----------------------------------------+------+--------------+-------------------------------+
| Net proceeds from Ordinary Share issue | | 284 | (4) |
+-----------------------------------------+------+--------------+-------------------------------+
| Net cash inflow/(outflow) from | | 531 | (281) |
| financing | | | |
+-----------------------------------------+------+--------------+-------------------------------+
| Increase in cash | 17 | 276 | 54 |
+-----------------------------------------+------+--------------+-------------------------------+
Details of the restatement are set out in notes 1 and 22.
The relevant accompanying notes are an integral part of this statement.
NOTES
1 Accounting Policies
Basis of accounting
The accounts have been prepared under the historical cost convention, except for
the valuation of investments at fair value, and in accordance with applicable UK
accounting standards. Whilst Venture Capital Trusts ("VCTs") are not included
within the scope of the Statement of Recommended Practice January 2003, revised
December 2005 ("the SORP") for Investment Trust Companies produced by the
Association of Investment Companies ("AIC"), VCTs share many of the
characteristics of Investment Trust Companies and so the Directors have prepared
the accounts on a basis compliant with the recommendations of the SORP.
Changes in accounting policy
Prior to 1 January 2008,, the C Shares were treated as forming part of the
Company's overall share capital and therefore the reserves relating to these
shares were included in the total balance sheet of the Company. This was in
accordance with industry practice.
From 1 January 2008, in accordance with the technical interpretation of FRS 25,
the C Shares are classed as debt, not equity as they are convertible into a
variable number of Ordinary Shares and are therefore shown as a liability of the
Company. This is because the C Shares will be converted into a variable number
of Ordinary Shares. The C Shares will convert to equity on the 30th April 2009
when they are converted into Ordinary Shares in accordance with the Company's
Articles. In the accounts and the notes to the accounts the values given for the
Ordinary Share Fund and for the C Share fund are an allocation of the total
values.
Investments
As the Company's business is investing in financial assets with a view to
profiting from their total return in the form of increases in fair value,
financial assets are designated as fair value through profit or loss on initial
recognition in accordance with FRS 26. The Company manages and evaluates the
performance of these investments on a fair value basis in accordance with its
investment strategy, and information about the investments is provided on this
basis to the Board of Directors.
Investments held at fair value through profit or loss are initially recognised
at fair value, being the consideration given and excluding transaction or other
dealing costs associated with the investment, which are expensed and included in
the capital column of the Income Statement.
After initial recognition, investments, which are classified as fair value
through profit or loss, are measured at fair value. Gains or losses on
investments classified as fair value through profit or loss are recognised in
the capital column of the Income Statement, and allocated to the realised and
unrealised capital reserves as appropriate.
Transaction and dealing costs, showing the total amounts included in disposals
and additions are disclosed in Note 8 to the accounts, as recommended by the
SORP
All purchases and sales of investments are accounted for on the trade date
basis.
For quoted investments fair value is established by reference to bid, or last,
market prices depending on the convention of the exchange on which the
investment is quoted.
Unquoted investments are valued using an appropriate valuation technique so as
to establish what the transaction price would have been at the balance sheet
date. Such investments are valued with the International Private Equity and
Venture Capital Association ("IPEVCA") guidelines. Primary indicators of fair
value are derived from earnings multiples, recent arm's length market
transactions or from net assets. Where fair value cannot be reliably measured
the investment will be carried at cost for recent investments, or the valuation
as at the previous reporting date.
Those venture capital investments that may be termed associated undertakings are
carried at fair value as determined by the Directors in accordance with the
Company's accounting policy and are not equity accounted as required by the
company law. The Directors consider that, as these investments are held as part
of the Company's portfolio with a view to the ultimate realisation of capital
gains, equity accounting would not give a true and fair view of the Company's
interests in these investments. Quantification of the effect of this departure
is not practicable. Carrying investments at fair value is specifically permitted
under FRS 9 "Associates and Joint Ventures", where venture capital entities hold
investments as part of a portfolio.
.
Income
Dividends receivable on equity shares and on unquoted funds are recognised as
income on the date on which the shares or units are marked as ex-dividend. Where
no ex-dividend date is available, the income is recognised when the Company's
right to receive it has been established.
Interest receivable from fixed income securities is recognised in income using
the effective interest rate method.
Interest receivable on bank deposits is included in the accounts on an accruals
basis.
Other income is credited to the revenue column of the Income Statement when the
Company's right to receive the income is established.
Expenses
All expenses are accounted for on an accruals basis. Expenses are charged
through revenue in the Income Statement except as follows:
* expenses which are incidental to the acquisition or disposal of an investment
are taken to the capital column of the Income Statement;
* expenses are charged to the capital column in the Income Statement where a
connection with the maintenance or enhancement of the value of the investments
can be demonstrated. In this respect management fees have been allocated 75 per
cent to capital reserve (realised) and 25 per cent to revenue column in the
Income Statement, being in line with the Board's expected long-term split of
returns, in the form of capital gains and income respectively, from the
investment portfolio of the Company;
* expenses associated with the issue of shares are deducted from share premium.
Allocation of income and expenses between Ordinary Shares and C Shares
The assets attributable to the Ordinary shareholders and C shareholders are
managed and accounted for as two separate investments pools and will be until
the date on which the C Shares are converted into new Ordinary Shares. Income
and expenses which relate directly to the Ordinary Share assets are allocated to
those assets and income and expenses which relate directly to the C Shares are
allocated to the C Shares assets. Other income and expenditure is allocated
proportionately to each class of assets based on the number of shares in issue
for that investment class divided by the total number of shares in issue.
Capital reserve
Realised
The following are accounted for as realised returns:
* gains and losses on realisation of investments; and
* expenses, together with the related tax effect, charged to this account in
accordance with the above policies.
Unrealised
The following are accounted for as unrealised returns:
* -increases and decreases in the valuation of investments held at the year end.
Taxation
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more tax in the future have occurred
at the balance sheet date. This is subject to deferred tax assets only being
recognised if it is considered more likely than not that there will be suitable
profits from which the future reversals of the underlying timing differences can
be deducted. Timing differences are differences between the Company's taxable
profits and its results as stated in the accounts.
Deferred tax is measured at the average tax rates that are expected to apply in
the periods in which the timing differences are expected to reverse, based on
tax rates and laws that have been enacted or substantially enacted by the
balance sheet date. Deferred tax is measured on a non-discounted basis.
No taxation liability arises on gains from sales of fixed asset investments by
the Company by virtue of its venture capital trust status. However, the net
revenue (excluding UK dividend income) accruing to the Company is liable to
corporation tax at the prevailing rates.
Dividends
Dividends to shareholders are accounted for in the period in which they are paid
or approved in general meetings.
Dividends payable to equity shareholders are recognised in the Reconciliation of
Movements in Shareholders' Funds when they are paid, or have been approved by
shareholders in the case of a final dividend and become a liability of the
Company.
2 Income
+----------------------------------+--------------------------+----------------+
| Ordinary Share Fund |
+------------------------------------------------------------------------------+
| | Year ended | Year ended |
+----------------------------------+--------------------------+----------------+
| | 31 December 2008 | 31 December |
| | | 2007 |
+----------------------------------+--------------------------+----------------+
| | GBP'000 | GBP'000 |
+----------------------------------+--------------------------+----------------+
| Income from listed investments |
+------------------------------------------------------------------------------+
| UK dividend income | 60 | 75 |
+----------------------------------+--------------------------+----------------+
| Unfranked investment income | 10 | 16 |
+----------------------------------+--------------------------+----------------+
| Dividends reinvested | 7 | 4 |
+----------------------------------+--------------------------+----------------+
| | 77 | 95 |
+----------------------------------+--------------------------+----------------+
| Income from unlisted investments |
+------------------------------------------------------------------------------+
| Unfranked investment income | 41 | 26 |
+----------------------------------+--------------------------+----------------+
| Interest reinvested | 24 | 8 |
+----------------------------------+--------------------------+----------------+
| | 65 | 34 |
+----------------------------------+--------------------------+----------------+
| Other income |
+------------------------------------------------------------------------------+
| Bank interest | 4 | 4 |
+----------------------------------+--------------------------+----------------+
| Interest on VAT recovered | 1 | - |
+----------------------------------+--------------------------+----------------+
| | 5 | 4 |
+----------------------------------+--------------------------+----------------+
| | | |
+----------------------------------+--------------------------+----------------+
| Total income | 147 | 133 |
+----------------------------------+--------------------------+----------------+
| Total income comprises |
+------------------------------------------------------------------------------+
| Dividends | 77 | 95 |
+----------------------------------+--------------------------+----------------+
| Interest | 70 | 38 |
+----------------------------------+--------------------------+----------------+
| | 147 | 133 |
+----------------------------------+--------------------------+----------------+
2 Income (continued)
+----------------------------------+--------------------------+----------------+
| C Share Fund |
+------------------------------------------------------------------------------+
| | Year ended | Year ended |
+----------------------------------+--------------------------+----------------+
| | 31 December 2008 | 31 December |
| | | 2007 |
+----------------------------------+--------------------------+----------------+
| | GBP'000 | GBP'000 |
+----------------------------------+--------------------------+----------------+
| Income from listed investments |
+------------------------------------------------------------------------------+
| UK dividend income | 135 | 185 |
+----------------------------------+--------------------------+----------------+
| Unfranked investment income | 18 | 17 |
+----------------------------------+--------------------------+----------------+
| Dividends reinvested | 15 | 22 |
+----------------------------------+--------------------------+----------------+
| | 168 | 224 |
+----------------------------------+--------------------------+----------------+
| Income from unlisted investments |
+------------------------------------------------------------------------------+
| Unfranked investment income | 58 | 33 |
+----------------------------------+--------------------------+----------------+
| Interest reinvested | 50 | 15 |
+----------------------------------+--------------------------+----------------+
| | 108 | 48 |
+----------------------------------+--------------------------+----------------+
| Other income |
+------------------------------------------------------------------------------+
| Bank interest | 24 | 7 |
+----------------------------------+--------------------------+----------------+
| Interest on VAT recovered | 2 | - |
+----------------------------------+--------------------------+----------------+
| | 26 | 7 |
+----------------------------------+--------------------------+----------------+
| | | |
+----------------------------------+--------------------------+----------------+
| Total income | 302 | 279 |
+----------------------------------+--------------------------+----------------+
| Total income comprises |
+------------------------------------------------------------------------------+
| Dividends | 168 | 224 |
+----------------------------------+--------------------------+----------------+
| Interest | 134 | 55 |
+----------------------------------+--------------------------+----------------+
| | 302 | 279 |
+----------------------------------+--------------------------+----------------+
+----------------------------------+--------------------------+----------------+
| Total | | |
+----------------------------------+--------------------------+----------------+
| | Year ended | Year ended |
+----------------------------------+--------------------------+----------------+
| | 31 December 2008 | 31 December |
| | | 2007 |
+----------------------------------+--------------------------+----------------+
| | GBP'000 | GBP'000 |
+----------------------------------+--------------------------+----------------+
| Income from listed investments |
+------------------------------------------------------------------------------+
| UK dividend income | 195 | 260 |
+----------------------------------+--------------------------+----------------+
| Unfranked investment income | 28 | 33 |
+----------------------------------+--------------------------+----------------+
| Dividends reinvested | 22 | 26 |
+----------------------------------+--------------------------+----------------+
| | 245 | 319 |
+----------------------------------+--------------------------+----------------+
| Income from unlisted investments |
+------------------------------------------------------------------------------+
| Unfranked investment income | 99 | 59 |
+----------------------------------+--------------------------+----------------+
| Interest reinvested | 74 | 23 |
+----------------------------------+--------------------------+----------------+
| | 173 | 82 |
+----------------------------------+--------------------------+----------------+
| Other income |
+------------------------------------------------------------------------------+
| Bank interest | 28 | 11 |
+----------------------------------+--------------------------+----------------+
| Interest on VAT recovered | 3 | - |
+----------------------------------+--------------------------+----------------+
| | 31 | 11 |
+----------------------------------+--------------------------+----------------+
| | | |
+----------------------------------+--------------------------+----------------+
| Total income | 449 | 412 |
+----------------------------------+--------------------------+----------------+
| Total income comprises |
+------------------------------------------------------------------------------+
| Dividends | 245 | 319 |
+----------------------------------+--------------------------+----------------+
| Interest | 204 | 93 |
+----------------------------------+--------------------------+----------------+
| | 449 | 412 |
+----------------------------------+--------------------------+----------------+
3 Investment management fee
+---------------+---------+---------+---------+---------+---------+---------+
| Ordinary | | | | | | |
| Share | | | | | | |
| Fund | | | | | | |
+---------------+---------+---------+---------+---------+---------+---------+
| | Year ended | Year ended |
+---------------+-----------------------------+-----------------------------+
| | 31 December 2008 | 31 December 2007 |
+---------------+-----------------------------+-----------------------------+
| | Revenue | Capital | Total | Revenue | Capital | Total |
+---------------+---------+---------+---------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------+---------+---------+---------+---------+---------+---------+
| Investment | 19 | 56 | 75 | 16 | 49 | 65 |
| management | | | | | | |
| fee | | | | | | |
+---------------+---------+---------+---------+---------+---------+---------+
| Irrecoverable | 3 | 7 | 10 | 3 | 8 | 11 |
| VAT | | | | | | |
+---------------+---------+---------+---------+---------+---------+---------+
| VAT | (7) | (20) | (27) | - | - | - |
| recovered | | | | | | |
+---------------+---------+---------+---------+---------+---------+---------+
| | 15 | 43 | 58 | 19 | 57 | 76 |
+---------------+---------+---------+---------+---------+---------+---------+
| | | | | | | |
+---------------+---------+---------+---------+---------+---------+---------+
| C | | | | | | |
| Share | | | | | | |
| Fund | | | | | | |
+---------------+---------+---------+---------+---------+---------+---------+
| | Year ended | Year ended |
+---------------+-----------------------------+-----------------------------+
| | 31 December 2008 | 31 December 2007 |
+---------------+-----------------------------+-----------------------------+
| | Revenue | Capital | Total | Revenue | Capital | Total |
+---------------+---------+---------+---------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------+---------+---------+---------+---------+---------+---------+
| Investment | 34 | 101 | 135 | 32 | 98 | 130 |
| management | | | | | | |
| fee | | | | | | |
+---------------+---------+---------+---------+---------+---------+---------+
| Irrecoverable | 4 | 16 | 20 | 6 | 17 | 23 |
| VAT | | | | | | |
+---------------+---------+---------+---------+---------+---------+---------+
| VAT | (10) | (32) | (42) | - | - | - |
| recovered | | | | | | |
+---------------+---------+---------+---------+---------+---------+---------+
| | 28 | 85 | 113 | 38 | 115 | 153 |
+---------------+---------+---------+---------+---------+---------+---------+
+---------------+---------+---------+---------+---------+---------+---------+
| Total | | | | | | |
+---------------+---------+---------+---------+---------+---------+---------+
| | Year ended | Year ended |
+---------------+-----------------------------+-----------------------------+
| | 31 December 2008 | 31 December 2007 |
+---------------+-----------------------------+-----------------------------+
| | Revenue | Capital | Total | Revenue | Capital | Total |
+---------------+---------+---------+---------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------+---------+---------+---------+---------+---------+---------+
| Investment | 53 | 157 | 210 | 48 | 147 | 195 |
| management | | | | | | |
| fee | | | | | | |
+---------------+---------+---------+---------+---------+---------+---------+
| Irrecoverable | 7 | 23 | 30 | 9 | 25 | 34 |
| VAT | | | | | | |
+---------------+---------+---------+---------+---------+---------+---------+
| VAT | (17) | (52) | (69) | - | - | - |
| recovered | | | | | | |
+---------------+---------+---------+---------+---------+---------+---------+
| | 43 | 128 | 171 | 57 | 172 | 229 |
+---------------+---------+---------+---------+---------+---------+---------+
For the year ended 31 December 2008, the Investment Managers waived GBP1,993 of
their fees on the Ordinary Share Fund (2007: GBP22,375) and GBP21,728 of their
fees on the C Share Fund (2007: GBP46,786). At 31 December 2008, there were
GBP37,809 (31 December 2007: no fees) outstanding payable to the Investment
Managers in respect of the Ordinary Share Fund and GBP57,321, (31 December 2007:
no fees) outstanding payable to the Investment Managers in respect of the C
Share Fund.
4 Other expenses
+----------------------------------------+-------------------+----------------+
| Ordinary Share Fund |
+-----------------------------------------------------------------------------+
| | Year ended | Year ended |
+----------------------------------------+-------------------+----------------+
| | 31 December 2008 | 31 December |
| | | 2007 |
+----------------------------------------+-------------------+----------------+
| | GBP'000 | GBP'000 |
+----------------------------------------+-------------------+----------------+
| Administration expenses |
+-----------------------------------------------------------------------------+
| Fees payable to the Company's auditor | 6 | 4 |
| for the audit of the Company's | | |
| individual accounts | | |
+----------------------------------------+-------------------+----------------+
| Fees payable to the Company's auditor for other services: |
+-----------------------------------------------------------------------------+
| Other services relating to taxation | 1 | 1 |
+----------------------------------------+-------------------+----------------+
| Other services | 1 | - |
+----------------------------------------+-------------------+----------------+
| Directors' remuneration and social | 13 | 13 |
| security contribution | | |
+----------------------------------------+-------------------+----------------+
| Other expenses | 32 | 37 |
+----------------------------------------+-------------------+----------------+
| | 53 | 55 |
+----------------------------------------+-------------------+----------------+
| C Share Fund |
+-----------------------------------------------------------------------------+
| | Year ended | Year ended |
+----------------------------------------+-------------------+----------------+
| | 31 December 2008 | 31 December |
| | | 2007 |
+----------------------------------------+-------------------+----------------+
| | GBP'000 | GBP'000 |
+----------------------------------------+-------------------+----------------+
| Administration expenses |
+-----------------------------------------------------------------------------+
| Fees payable to the Company's auditor | 13 | 9 |
| for the audit of the Company's | | |
| individual accounts | | |
+----------------------------------------+-------------------+----------------+
| Fees payable to the Company's auditor for other services: |
+-----------------------------------------------------------------------------+
| Other services relating to taxation | 3 | 2 |
+----------------------------------------+-------------------+----------------+
| Other services | 2 | - |
+----------------------------------------+-------------------+----------------+
| Directors' remuneration and social | 28 | 29 |
| security contribution | | |
+----------------------------------------+-------------------+----------------+
| Other expenses | 67 | 79 |
+----------------------------------------+-------------------+----------------+
| | 113 | 119 |
+----------------------------------------+-------------------+----------------+
+----------------------------------------+-------------------+----------------+
| Total |
+-----------------------------------------------------------------------------+
| | Year ended | Year ended |
+----------------------------------------+-------------------+----------------+
| | 31 December 2008 | 31 December |
| | | 2007 |
+----------------------------------------+-------------------+----------------+
| | GBP'000 | GBP'000 |
+----------------------------------------+-------------------+----------------+
| Administration expenses |
+-----------------------------------------------------------------------------+
| Fees payable to the Company's auditor | 19 | 13 |
| for the audit of the Company's | | |
| individual accounts | | |
+----------------------------------------+-------------------+----------------+
| Fees payable to the Company's auditor for other services: |
+-----------------------------------------------------------------------------+
| Other services relating to taxation | 4 | 3 |
+----------------------------------------+-------------------+----------------+
| Other services | 3 | - |
+----------------------------------------+-------------------+----------------+
| Directors' remuneration and social | 41 | 42 |
| security contribution | | |
+----------------------------------------+-------------------+----------------+
| Other expenses | 99 | 116 |
+----------------------------------------+-------------------+----------------+
| | 166 | 174 |
+----------------------------------------+-------------------+----------------+
5 Taxation on ordinary activities
Ordinary Share Fund
+----------------------------------------------+----------------+----------------+
| | Year ended | Year ended |
+----------------------------------------------+----------------+----------------+
| | 31 December | 31 December |
| | 2008 | 2007 |
+----------------------------------------------+----------------+----------------+
| | GBP'000 | GBP'000 |
+----------------------------------------------+----------------+----------------+
| Withholding tax on unfranked investment | 2 | 2 |
| income | | |
+----------------------------------------------+----------------+----------------+
| Total current tax charge | 2 | 2 |
+----------------------------------------------+----------------+----------------+
| Revenue return on ordinary activities before | 79 | 59 |
| taxation: | | |
+----------------------------------------------+----------------+----------------+
| Revenue return on ordinary activities | 23 | 18 |
| multiplied by Corporation tax | | |
| at 28.5% (2007: 30%) | | |
+----------------------------------------------+----------------+----------------+
| Effect of: | | |
+----------------------------------------------+----------------+----------------+
| UK dividends not chargeable to tax | (18) | (22) |
+----------------------------------------------+----------------+----------------+
| Excess expenses for the period | (5) | 4 |
+----------------------------------------------+----------------+----------------+
| Income tax on unfranked investment income | 2 | 2 |
+----------------------------------------------+----------------+----------------+
| Total amount of current taxation | 2 | 2 |
| | | |
+----------------------------------------------+----------------+----------------+
C Share Fund
+----------------------------------------------+----------------+----------------+
| | Year ended | Year ended |
+----------------------------------------------+----------------+----------------+
| | 31 December | 31 December |
| | 2008 | 2007 |
+----------------------------------------------+----------------+----------------+
| | GBP'000 | GBP'000 |
+----------------------------------------------+----------------+----------------+
| Withholding tax on unfranked investment | 3 | 3 |
| income | | |
+----------------------------------------------+----------------+----------------+
| Total current tax charge | 3 | 3 |
+----------------------------------------------+----------------+----------------+
| Revenue return on ordinary activities before | 161 | 122 |
| taxation: | | |
+----------------------------------------------+----------------+----------------+
| Revenue return on ordinary activities | 46 | 37 |
| multiplied by Corporation tax | | |
| at 28.5% (2007: 30%) | | |
+----------------------------------------------+----------------+----------------+
| Effect of: |
+--------------------------------------------------------------------------------+
| UK dividends not chargeable to tax | (41) | (56) |
+----------------------------------------------+----------------+----------------+
| Excess expenses for the period | (5) | 19 |
+----------------------------------------------+----------------+----------------+
| Income tax on unfranked investment income | 3 | 3 |
+----------------------------------------------+----------------+----------------+
| Total amount of current taxation | 3 | 3 |
+----------------------------------------------+----------------+----------------+
Total
+-------------+----------+----------+
| | Year | Year |
| | ended | ended |
+-------------+----------+----------+
| | 31 | 31 |
| | December | December |
| | 2008 | 2007 |
+-------------+----------+----------+
| | GBP'000 | GBP'000 |
+-------------+----------+----------+
| Withholding | 5 | 5 |
| tax on | | |
| unfranked | | |
| investment | | |
| income | | |
+-------------+----------+----------+
| Total | 5 | 5 |
| current | | |
| tax | | |
| charge | | |
+-------------+----------+----------+
| Revenue | 240 | 181 |
| return | | |
| on | | |
| ordinary | | |
| activities | | |
| before | | |
| taxation: | | |
+-------------+----------+----------+
| Revenue | 69 | 55 |
| return | | |
| on | | |
| ordinary | | |
| activities | | |
| multiplied | | |
| by | | |
| Corporation | | |
| tax | | |
| at 28.5% | | |
| (2007: 30%) | | |
+-------------+----------+----------+
| Effect of: |
+-----------------------------------+
| UK | (59) | (78) |
| dividends | | |
| not | | |
| chargeable | | |
| to tax | | |
+-------------+----------+----------+
| Excess | (10) | 23 |
| expenses | | |
| for the | | |
| period | | |
+-------------+----------+----------+
| Income | 5 | 5 |
| tax on | | |
| unfranked | | |
| investment | | |
| income | | |
+-------------+----------+----------+
| Total | 5 | 5 |
| amount | | |
| of | | |
| current | | |
| taxation | | |
+-------------+----------+----------+
At 31 December 2008, the Company had GBP597,581 (31 December 2007: GBP501,471)
of excess management expenses to carry forward against future taxable profits.
6 Dividends
+------------------------------------------------------+-------------+----------+
| | Year ended | Year |
| | | ended |
+------------------------------------------------------+-------------+----------+
| | 31 | 31 |
| | December | December |
| | 2008 | 2007 |
+------------------------------------------------------+-------------+----------+
| | GBP'000 | GBP'000 |
+------------------------------------------------------+-------------+----------+
| Declared and paid: |
+-------------------------------------------------------------------------------+
| 2007 Final dividend : nil (2006: 3.2p) per eligible | - | 121 |
| Ordinary Share | | |
+------------------------------------------------------+-------------+----------+
| 2007 Final dividend: nil (2006: 1.0p)per eligible C | - | 84 |
| Share | | |
+------------------------------------------------------+-------------+----------+
| 2008 Interim dividend of 1.0p (2007: 1.0p) per | 41 | 38 |
| eligible Ordinary Share | | |
+------------------------------------------------------+-------------+----------+
| 2008 Interim dividend of 1.0p (2007: 1.0p) per | 87 | 84 |
| eligible C Share | | |
+------------------------------------------------------+-------------+----------+
| Proposed: | | |
+------------------------------------------------------+-------------+----------+
| 2008 Final dividend of 1.0p (2007: nil) per eligible | 124 | - |
| Ordinary Share post conversion | | |
+------------------------------------------------------+-------------+----------+
The Company paid an interim dividend on 20 October 2008 of 1p per Ordinary Share
(2007: 1p) and an interim dividend of 1p per C Share (2007: 1p). The Directors
are proposing a final dividend of 1p per Ordinary Share in respect of the year
ended 31 December 2008 payable to all shareholders following conversion of the C
Shares. This is equivalent to 0.9457p per C Share (2007: Ordinary Shares nil; C
Shares nil). Subject to shareholder approval, the dividends will be paid on 5
June 2009 to shareholders on the register on 8 May 2009.
7 Return per share
+-----------------+--------------+---------+----------+----------+-----------------+
| | | | Year | | Year ended |
| | | | ended | | |
+-----------------+--------------+---------+----------+----------+-----------------+
| | | 31 December 2008 | | 31 December |
| | | | | 2007 |
+-----------------+--------------+--------------------+----------+-----------------+
| | Revenue | Capital | Total | Revenue | Capital Total |
+-----------------+--------------+---------+----------+----------+-----------------+
| | pence | pence | pence | pence | pence pence |
+-----------------+--------------+---------+----------+----------+-----------------+
| Ordinary Share | 1.91 | (21.12) | (19.21) | 1.51 | (12.59) (11.08) |
+-----------------+--------------+---------+----------+----------+-----------------+
| C Share | 1.82 | (19.79) | (17.97) | 1.42 | (10.34) (8.92) |
| | | | | | |
+-----------------+--------------+---------+----------+----------+-----------------+
| Total | 1.91 | (21.12) | (19.21) | 1.51 | (12.59) (11.08) |
+-----------------+--------------+---------+----------+----------+-----------------+
Ordinary Shares and Total
Revenue return per Ordinary Share and Total Revenue return per share is based on
the net revenue on ordinary activities attributable to the Ordinary Shares of
GBP77,000 (31 December 2007: GBP57,000) and on 4,034,196 (31 December 2007:
3,793,562) Ordinary Shares, being the weighted average number of Ordinary Shares
in issue during the year.
Capital return per Ordinary Share and Total Capital return per share is based on
the net capital deficit for the year of GBP852,000 (31 December 2007:
GBP478,000) and on 4,034,196 (31 December 2007: 3,793,562) Ordinary Shares,
being the weighted average number of Ordinary Shares in issue during the year.
Total return per Ordinary Share and Total return per share is based on the total
deficit on ordinary activities attributable to the Ordinary Shares of GBP775,000
(31 December 2007: GBP421,000) and on 4,034,196 (31 December 2007: 3,793,562)
Ordinary Shares, being the weighted average number of Ordinary Shares in issue
during the year.
C Shares
Revenue return per C Share is based on the net revenue on ordinary activities
attributable to the C Shares of GBP158,000 (31 December 2007: GBP119,000) and on
8,691,723 (31 December 2007: 8,393,209) C Shares, being the weighted average
number of C Shares in issue during the year.
Capital return per C Share is based on the net capital deficit for the year of
GBP1,720,000 (31 December 2007: GBP867,000) and on 8,691,723 (31 December 2007:
8,393,209) C Shares, being the weighted average number of C Shares in issue
during the year.
Total return per C Share is based on the total deficit on ordinary activities
attributable to the C Shares of GBP1,562,000 (31 December 2007: GBP748,000) and
on 8,691,723 (31 December 2007: 8,393,209) C Shares, being the weighted average
number of C Shares in issue during the year.
8 Investments at fair value through profit or loss
+--------------------------------------+---------------------+----------------+
| Ordinary Share Fund |
+-----------------------------------------------------------------------------+
| | 31 December 2008 | 31 December |
| | | 2007 |
+--------------------------------------+---------------------+----------------+
| | GBP'000 | GBP'000 |
+--------------------------------------+---------------------+----------------+
| AIM investments | 926 | 1,530 |
+--------------------------------------+---------------------+----------------+
| Other investments quoted on a | 817 | 1,170 |
| recognised exchange | | |
+--------------------------------------+---------------------+----------------+
| Unquoted investments | 1,432 | 959 |
+--------------------------------------+---------------------+----------------+
| | 3,175 | 3,659 |
+--------------------------------------+---------------------+----------------+
| |
+-----------------------------------------------------------------------------+
| | GBP'000 | GBP'000 |
+--------------------------------------+---------------------+----------------+
| Opening book cost | 3,790 | 3,795 |
+--------------------------------------+---------------------+----------------+
| Opening unrealised | (131) | 477 |
| (depreciation)/appreciation | | |
+--------------------------------------+---------------------+----------------+
| Opening valuation | 3,659 | 4,272 |
+--------------------------------------+---------------------+----------------+
| Movements in the year: |
+-----------------------------------------------------------------------------+
| Purchases at cost | 400 | 2,683 |
+--------------------------------------+---------------------+----------------+
| Sales - proceeds | (75) | (2,875) |
+--------------------------------------+---------------------+----------------+
| Sales - realised (losses)/gains on | (52) | 187 |
| sales | | |
+--------------------------------------+---------------------+----------------+
| Unrealised depreciation | (757) | (608) |
+--------------------------------------+---------------------+----------------+
| Closing valuation | 3,175 | 3,659 |
+--------------------------------------+---------------------+----------------+
| Closing book cost | 4,063 | 3,790 |
+--------------------------------------+---------------------+----------------+
| Closing unrealised depreciation | (888) | (131) |
+--------------------------------------+---------------------+----------------+
| Closing valuation | 3,175 | 3,659 |
+--------------------------------------+---------------------+----------------+
| |
+-----------------------------------------------------------------------------+
| | GBP'000 | GBP'000 |
+--------------------------------------+---------------------+----------------+
| Realised (loss)/gain on disposal of | (52) | 187 |
| investments | | |
+--------------------------------------+---------------------+----------------+
| Movement in unrealised depreciation | (757) | (608) |
+--------------------------------------+---------------------+----------------+
| Total losses on investments | (809) | (421) |
+--------------------------------------+---------------------+----------------+
8 Investments at fair value through profit or loss (continued)
+--------------------------------------+---------------------+----------------+
| C Share Fund |
+-----------------------------------------------------------------------------+
| | 31 December 2008 | 31 December |
| | | 2007 |
+--------------------------------------+---------------------+----------------+
| | GBP'000 | GBP'000 |
+--------------------------------------+---------------------+----------------+
| AIM investments | 1,172 | 1,798 |
+--------------------------------------+---------------------+----------------+
| Other investments quoted on a | 1,239 | 3,900 |
| recognised exchange | | |
+--------------------------------------+---------------------+----------------+
| Unquoted investments | 3,650 | 1,883 |
+--------------------------------------+---------------------+----------------+
| | 6,061 | 7,581 |
+--------------------------------------+---------------------+----------------+
| |
+-----------------------------------------------------------------------------+
| | GBP'000 | GBP'000 |
+--------------------------------------+---------------------+----------------+
| Opening book cost | 7,729 | 7,944 |
+--------------------------------------+---------------------+----------------+
| Opening unrealised | (148) | 763 |
| (depreciation)/appreciation | | |
+--------------------------------------+---------------------+----------------+
| Opening valuation | 7,581 | 8,707 |
+--------------------------------------+---------------------+----------------+
| Movements in the year: |
+-----------------------------------------------------------------------------+
| Purchases at cost | 2,227 | 4,033 |
+--------------------------------------+---------------------+----------------+
| Sales - proceeds | (2,112) | (4,407) |
+--------------------------------------+---------------------+----------------+
| Sales - realised (losses)/gains on | (163) | 159 |
| sales | | |
+--------------------------------------+---------------------+----------------+
| Unrealised depreciation | (1,472) | (911) |
+--------------------------------------+---------------------+----------------+
| Closing valuation | 6,061 | 7,581 |
+--------------------------------------+---------------------+----------------+
| Closing book cost | 7,681 | 7,729 |
+--------------------------------------+---------------------+----------------+
| Closing unrealised depreciation | (1,620) | (148) |
+--------------------------------------+---------------------+----------------+
| Closing valuation | 6,061 | 7,581 |
+--------------------------------------+---------------------+----------------+
| |
+-----------------------------------------------------------------------------+
| | GBP'000 | GBP'000 |
+--------------------------------------+---------------------+----------------+
| Realised (loss)/gain on disposal of | (163) | 159 |
| investments | | |
+--------------------------------------+---------------------+----------------+
| Movement in unrealised depreciation | (1,472) | (911) |
+--------------------------------------+---------------------+----------------+
| Total losses on investments | (1,635) | (752) |
+--------------------------------------+---------------------+----------------+
8 Investments at fair value through profit or loss (continued)
+--------------------------------------+---------------------+----------------+
| Total |
+-----------------------------------------------------------------------------+
| | 31 December 2008 | 31 December |
| | | 2007 |
+--------------------------------------+---------------------+----------------+
| | GBP'000 | GBP'000 |
+--------------------------------------+---------------------+----------------+
| AIM investments | 2,098 | 3,328 |
+--------------------------------------+---------------------+----------------+
| Other investments quoted on a | 2,056 | 5,070 |
| recognised exchange | | |
+--------------------------------------+---------------------+----------------+
| Unquoted investments | 5,082 | 2,842 |
+--------------------------------------+---------------------+----------------+
| | 9,236 | 11,240 |
+--------------------------------------+---------------------+----------------+
| |
+-----------------------------------------------------------------------------+
| | GBP'000 | GBP'000 |
+--------------------------------------+---------------------+----------------+
| Opening book cost | 11,519 | 11,739 |
+--------------------------------------+---------------------+----------------+
| Opening unrealised (depreciation)/ | (279) | 1,240 |
| appreciation | | |
+--------------------------------------+---------------------+----------------+
| Opening valuation | 11,240 | 12,979 |
+--------------------------------------+---------------------+----------------+
| Movements in the year: |
+-----------------------------------------------------------------------------+
| Purchases at cost | 2,627 | 6,716 |
+--------------------------------------+---------------------+----------------+
| Sales - proceeds | (2,187) | (7,282) |
+--------------------------------------+---------------------+----------------+
| - realised | (215) | 346 |
| (losses)/gains on | | |
| sales | | |
+--------------------------------------+---------------------+----------------+
| Unrealised depreciation | (2,229) | (1,519) |
+--------------------------------------+---------------------+----------------+
| Closing valuation | 9,236 | 11,240 |
+--------------------------------------+---------------------+----------------+
| Closing book cost | 11,744 | 11,519 |
+--------------------------------------+---------------------+----------------+
| Closing unrealised depreciation | (2,508) | (279) |
+--------------------------------------+---------------------+----------------+
| Closing valuation | 9,236 | 11,240 |
+--------------------------------------+---------------------+----------------+
| |
+-----------------------------------------------------------------------------+
| | GBP'000 | GBP'000 |
+--------------------------------------+---------------------+----------------+
| Realised (loss)/gain on disposal of | (215) | 346 |
| investments | | |
+--------------------------------------+---------------------+----------------+
| Movement in unrealised depreciation | (2,229) | (1,519) |
+--------------------------------------+---------------------+----------------+
| Total losses on investments | (2,444) | (1,173) |
+--------------------------------------+---------------------+----------------+
Transaction costs
During the year, the Company incurred transaction costs of GBP32 (Ordinary
Share Fund GBPnil, C Share Fund GBP32) (31 December 2007: GBP785 (Ordinary Share
Fund GBP91, C Share Fund GBP694)) on purchases of investments and GBP1,783
(Ordinary Share Fund GBPnil, C Share Fund GBP1,783) (31 December 2007: GBP7,489
(Ordinary Share Fund GBP2,996, C Share Fund GBP4,493)) on sales of investments.
These amounts are included in "Losses on investments at fair value" as disclosed
in the Income Statement.
9 Significant interests
The Company had the following interests of 3 per cent or more in the share
capital of its portfolio companies:
+----------------------+----------------+--------------------+---------------------+
| | Class of | Number held | Proportion of class |
| | shares | | held |
+----------------------+----------------+--------------------+---------------------+
| FSG Security plc | Ordinary 20p | 1,333,334 | 7.21% |
+----------------------+----------------+--------------------+---------------------+
| PharmaSmart Limited | Ordinary 5p | 1,033,333 | 3.06% |
+----------------------+----------------+--------------------+---------------------+
10 Debtors
Ordinary Share Fund
+-------------+----------+----------+
| | 31 | 31 |
| | December | December |
| | 2008 | 2007 |
+-------------+----------+----------+
| | GBP'000 | GBP'000 |
+-------------+----------+----------+
| Accrued | 15 | 14 |
| income | | |
+-------------+----------+----------+
| Other | 11 | 12 |
| debtors | | |
| and | | |
| prepayments | | |
+-------------+----------+----------+
| | 26 | 26 |
+-------------+----------+----------+
C Share Fund
+-------------+----------+----------+
| | 31 | 31 |
| | December | December |
| | 2008 | 2007 |
+-------------+----------+----------+
| | GBP'000 | GBP'000 |
+-------------+----------+----------+
| Accrued | 9 | 5 |
| income | | |
+-------------+----------+----------+
| Other | 34 | 21 |
| debtors | | |
| and | | |
| prepayments | | |
+-------------+----------+----------+
| | 43 | 26 |
+-------------+----------+----------+
Total
+-------------+----------+----------+
| | 31 | 31 |
| | December | December |
| | 2008 | 2007 |
+-------------+----------+----------+
| | GBP'000 | GBP'000 |
+-------------+----------+----------+
| Accrued | 24 | 19 |
| income | | |
+-------------+----------+----------+
| Other | 45 | 33 |
| debtors | | |
| and | | |
| prepayments | | |
+-------------+----------+----------+
| | 69 | 52 |
+-------------+----------+----------+
11 Creditors - amounts falling due within one year
Ordinary Share Fund
+-----------+----------+----------+
| | 31 | 31 |
| | December | December |
| | 2008 | 2007 |
+-----------+----------+----------+
| | GBP'000 | GBP'000 |
+-----------+----------+----------+
| Accruals | 62 | 20 |
| and | | |
| other | | |
| creditors | | |
+-----------+----------+----------+
C Share Fund
+-----------+----------+----------+
| | 31 | 31 |
| | December | December |
| | 2008 | 2007 |
+-----------+----------+----------+
| | GBP'000 | GBP'000 |
+-----------+----------+----------+
| Accruals | 124 | 44 |
| and | | |
| other | | |
| creditors | | |
+-----------+----------+----------+
Total
+-----------+----------+----------+
| | 31 | 31 |
| | December | December |
| | 2008 | 2007 |
+-----------+----------+----------+
| | GBP'000 | GBP'000 |
+-----------+----------+----------+
| Accruals | 186 | 64 |
| and | | |
| other | | |
| creditors | | |
+-----------+----------+----------+
12 Liability to the C share Fund
+--------+----------+----------+
| | 31 | 31 |
| | December | December |
| | 2008 | 2007 |
+--------+----------+----------+
| | GBP'000 | GBP'000 |
+--------+----------+----------+
| Amount | 6,472 | 7,780 |
| due to | | |
| the C | | |
| Share | | |
| Fund* | | |
+--------+----------+----------+
* The breakdown of the C Share Fund is shown in the C Share Fund balance sheet.
The movement in the liability to the C Share Fund can be seen in the C Share
Fund Reconciliation of Movements in Shareholders' Funds. 13 Called up share
capital
+---------------------------+------------+-----------+------------+-----------+
| Ordinary Share Fund | | | | |
+---------------------------+------------+-----------+------------+-----------+
| | 31 December 2008 | 31 December 2007 |
+---------------------------+------------------------+------------------------+
| Authorised: | Number | GBP'000 | Number | GBP'000 |
+---------------------------+------------+-----------+------------+-----------+
| Ordinary Shares of 10p | 50,000,000 | 5,000 | 50,000,000 | 5,000 |
| each | | | | |
+---------------------------+------------+-----------+------------+-----------+
| | | | | |
+---------------------------+------------+-----------+------------+-----------+
| | | | | |
+---------------------------+------------+-----------+------------+-----------+
| Authorised, issued and | 31 December 2008 | 31 December 2007 |
| fully paid: | | |
+---------------------------+------------------------+------------------------+
| Ordinary Shares of 10p | Number | GBP'000 | Number | GBP'000 |
| each | | | | |
+---------------------------+------------+-----------+------------+-----------+
| As at 1 January | 3,793,562 | 379 | 3,793,562 | 379 |
+---------------------------+------------+-----------+------------+-----------+
| Issue of shares | 307,244 | 31 | - | - |
+---------------------------+------------+-----------+------------+-----------+
| As at 31 December | 4,100,806 | 410 | 3,793,562 | 379 |
+---------------------------+------------+-----------+------------+-----------+
| | | | | |
+---------------------------+------------+-----------+------------+-----------+
| C Share Fund | | | | |
+---------------------------+------------+-----------+------------+-----------+
| | 31 December 2008 | 31 December 2007 |
+---------------------------+------------------------+------------------------+
| Authorised: | Number | GBP'000 | Number | GBP'000 |
+---------------------------+------------+-----------+------------+-----------+
| C Shares of 10p each | 15,000,000 | 1,500 | 15,000,000 | 1,500 |
+---------------------------+------------+-----------+------------+-----------+
| | | | | |
+---------------------------+------------+-----------+------------+-----------+
| Authorised, issued and | 31 December 2008 | 31 December 2007 |
| fully paid: | | |
+---------------------------+------------------------+------------------------+
| C Shares of 10p each | Number | GBP'000 | Number | GBP'000 |
+---------------------------+------------+-----------+------------+-----------+
| As at 1 January | 8,393,209 | 839 | 8,393,209 | 839 |
+---------------------------+------------+-----------+------------+-----------+
| Issue of shares | 383,555 | 39 | - | - |
+---------------------------+------------+-----------+------------+-----------+
| As at 31 December | 8,776,764 | 878 | 8,393,209 | 839 |
+---------------------------+------------+-----------+------------+-----------+
| Total | | | | |
+---------------------------+------------+-----------+------------+-----------+
| | 31 December 2008 | 31 December 2007 |
+---------------------------+------------------------+------------------------+
| Authorised: | Number | GBP'000 | Number | GBP'000 |
+---------------------------+------------+-----------+------------+-----------+
| Ordinary Shares of 10p | 50,000,000 | 5,000 | 50,000,000 | 5,000 |
| each | | | | |
+---------------------------+------------+-----------+------------+-----------+
| | | | | |
+---------------------------+------------+-----------+------------+-----------+
| Authorised, issued and | 31 December 2008 | 31 December 2007 |
| fully paid: | | |
+---------------------------+------------------------+------------------------+
| Ordinary Shares of 10p | Number | GBP'000 | Number | GBP'000 |
| each | | | | |
+---------------------------+------------+-----------+------------+-----------+
| As at 1 January | 3,793,562 | 379 | 3,793,562 | 379 |
+---------------------------+------------+-----------+------------+-----------+
| Issue of shares | 307,244 | 31 | - | - |
+---------------------------+------------+-----------+------------+-----------+
| As at 31 December | 4,100,806 | 410 | 3,793,562 | 379 |
+---------------------------+------------+-----------+------------+-----------+
| | | | | |
+---------------------------+------------+-----------+------------+-----------+
Pursuant to an offer for subscription, 264,797 Ordinary Shares and 289,961 C
Shares were allotted on 18 March 2008 and 42,447 Ordinary Shares and 93,594 C
Shares were allotted on 4 April 2008. The allotment price on each occasion was
100.1p per Ordinary Share and 93.8p per C Share
The assets attributable to the C shareholders will be managed and accounted for
as a separate investment pool until the date on which the C Shares are converted
into new Ordinary Shares. Dividends on the Ordinary Shares have to be paid out
of the reserves attributable to the Ordinary shareholders and dividends on the C
Shares have to be paid out of the reserves attributable to the C shareholders.
The payment of dividends on each investment pool is subject to the Company as a
whole having sufficient distributable reserves. It is expected that C Shares
will be converted into new Ordinary Shares on 30 April 2009. The C Shares will
convert into Ordinary Shares at a rate reflecting the relative values of the
total net assets attributable to each class of share on 31 December 2008, so
that each holding of C Shares is converted into a holding of Ordinary Shares
with the same underlying net asset value. C shareholders will receive 0.9457
Ordinary Shares per C Share.
The Ordinary Shares and the C Shares rank pari passu as to rights to attend and
vote at any general meeting of the Company.
14 Reserves
Ordinary Share Fund
+--------------+----------+----------+----------+------------+----------+
| | Share | | Capital | Capital | |
+--------------+----------+----------+----------+------------+----------+
| | premium | Special | reserve | reserve | Revenue |
+--------------+----------+----------+----------+------------+----------+
| | account | reserve | realised | unrealised | reserve |
+--------------+----------+----------+----------+------------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------+----------+----------+----------+------------+----------+
| At 1 | 21 | 3,187 | 231 | (131) | 34 |
| January | | | | | |
| 2008 | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Issue of | 277 | - | - | - | - |
| shares | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Expenses | (17) | - | - | - | - |
| of issue | | | | | |
| of | | | | | |
| shares | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Loss on | - | - | (52) | - | - |
| realisation | | | | | |
| of | | | | | |
| investments | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Transfer | - | - | - | - | - |
| on | | | | | |
| disposal | | | | | |
| of | | | | | |
| investments | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Increase | - | - | - | (757) | - |
| in | | | | | |
| unrealised | | | | | |
| depreciation | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Investment | - | - | (43) | - | - |
| management | | | | | |
| fee | | | | | |
| charged to | | | | | |
| capital | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Dividends | - | - | (7) | - | (34) |
| paid | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Retained | - | - | - | - | 77 |
| net | | | | | |
| revenue | | | | | |
| for the | | | | | |
| year | | | | | |
+--------------+----------+----------+----------+------------+----------+
| At 31 | 281 | 3,187 | 129 | (888) | 77 |
| December | | | | | |
| 2008 | | | | | |
+--------------+----------+----------+----------+------------+----------+
C Share Fund
+----------------------------------+---------+----------+----------+------------+----------+
| | Share | | Capital | Capital | |
+----------------------------------+---------+----------+----------+------------+----------+
| | premium | Special | reserve | reserve | Revenue |
+----------------------------------+---------+----------+----------+------------+----------+
| | account | reserve | realised | unrealised | reserve |
+----------------------------------+---------+----------+----------+------------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+---------+----------+----------+------------+----------+
| At 1 January 2008 | - | 7,097 | (82) | (148) | 74 |
+----------------------------------+---------+----------+----------+------------+----------+
| Issue of shares | 321 | - | - | - | - |
+----------------------------------+---------+----------+----------+------------+----------+
| Expenses of share issue | (19) | - | - | - | - |
+----------------------------------+---------+----------+----------+------------+----------+
| Loss on realisation of | - | - | (332) | - | - |
| investments | | | | | |
+----------------------------------+---------+----------+----------+------------+----------+
| Transfer on disposal of | - | - | 169 | (169) | - |
| investments | | | | | |
+----------------------------------+---------+----------+----------+------------+----------+
| Increase in unrealised | - | - | - | (1,303) | - |
| depreciation | | | | | |
+----------------------------------+---------+----------+----------+------------+----------+
| Investment management fee | - | - | (85) | - | - |
| charged to capital | | | | | |
+----------------------------------+---------+----------+----------+------------+----------+
| Dividends paid | - | - | (14) | - | (73) |
+----------------------------------+---------+----------+----------+------------+----------+
| Retained net revenue for the | - | - | | - | 158 |
| year | | | | | |
+----------------------------------+---------+----------+----------+------------+----------+
| At 31 December 2008 | 302 | 7,097 | (344) | (1,620) | 159 |
+----------------------------------+---------+----------+----------+------------+----------+
Total
+--------------+----------+----------+----------+------------+----------+
| | Share | | Capital | Capital | |
+--------------+----------+----------+----------+------------+----------+
| | premium | Special | reserve | reserve | Revenue |
+--------------+----------+----------+----------+------------+----------+
| | account | reserve | realised | unrealised | reserve |
+--------------+----------+----------+----------+------------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------+----------+----------+----------+------------+----------+
| At 1 | 21 | 10,284 | 149 | (279) | 108 |
| January | | | | | |
| 2008(as | | | | | |
| previously | | | | | |
| stated) | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Restatement | - | (7,097) | 82 | 148 | (74) |
| of prior | | | | | |
| years | | | | | |
+--------------+----------+----------+----------+------------+----------+
| At 1 | 21 | 3,187 | 231 | (131) | 34 |
| January | | | | | |
| 2008 | | | | | |
| (restated)* | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Issue of | 277 | - | - | - | - |
| shares | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Expenses | (17) | - | - | - | - |
| of share | | | | | |
| issue | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Gain on | - | - | (384) | - | - |
| realisation | | | | | |
| of | | | | | |
| investments | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Transfer | | | 169 | (169) | - |
| on | | | | | |
| disposal | | | | | |
| of | | | | | |
| investments | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Increase | - | - | - | (2,060) | - |
| in | | | | | |
| unrealised | | | | | |
| depreciation | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Investment | - | - | (128) | - | - |
| management | | | | | |
| fee | | | | | |
| charged to | | | | | |
| capital | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Finance | - | - | 248 | 1472 | - |
| charges | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Dividends | - | - | (7) | - | (34) |
| paid | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Retained | - | - | - | - | 77 |
| net | | | | | |
| revenue | | | | | |
| for the | | | | | |
| year | | | | | |
+--------------+----------+----------+----------+------------+----------+
| At 31 | 281 | 3,187 | 129 | (888) | 77 |
| December | | | | | |
| 2008 | | | | | |
+--------------+----------+----------+----------+------------+----------+
The Special reserve has been created to (i) create a distributable reserve which
can be used by the Company to fund purchases of its own shares; (ii) to enable
the Company to offset the effects of any future unrealised losses on future
dividends payable in respect of shares; and (iii) since the Company revoked its
status as an investment company, for any other purpose.
The Company is therefore able to make distributions out of the aggregate of its
revenue reserves, special reserve, realised capital reserves and unrealised
capital reserves.
Details of the restatement are set out in notes 1 and 22.
15 Net asset value per share
+----------+----------+----------+
| | 31 | 31 |
| | December | December |
| | 2008 | 2007 |
+----------+----------+----------+
| | pence | pence |
+----------+----------+----------+
| Ordinary | 77.94 | 98.09 |
| Shares | | |
| of 10p | | |
| each | | |
+----------+----------+----------+
| C | 73.74 | 92.69 |
| Shares | | |
| of 10p | | |
| each | | |
+----------+----------+----------+
| Total | 77.94 | 98.09 |
+----------+----------+----------+
The basic net asset value per Ordinary Share and the total basic net asset per
Share is based on net assets (including current period revenue) of GBP3,196,000
(31 December 2007: GBP3,721,000) and on 4,100,806 (31 December 2007: 3,793,562)
Ordinary Shares, being the number of shares in issue at the end of the year.
The basic net asset value per C Share is based on net assets (including current
period revenue) of GBP6,472,000 (31 December 2007: GBP7,780,000) and on
8,776,764 (31 December 2007: 8,393,209) C Shares, being the number of shares in
issue at the end of the year.
16 Reconciliation of net deficit before finance charges and taxation to net cash
inflow/(outflow) from operating activities
Ordinary Share Fund
+---------------------+----------+----------+
| | Year | Year |
| | ended | ended |
| | 31 | 31 |
| | December | December |
| | 2008 | 2007 |
+---------------------+----------+----------+
| | GBP'000 | GBP'000 |
+---------------------+----------+----------+
| Net | (773) | (419) |
| deficit | | |
| before | | |
| taxation | | |
+---------------------+----------+----------+
| Net | 852 | 478 |
| capital | | |
| deficit | | |
+---------------------+----------+----------+
| Decrease/(increase) | 7 | (17) |
| in prepayments and | | |
| accrued income | | |
+---------------------+----------+----------+
| Increase/(decrease) | 42 | (15) |
| in creditors | | |
+---------------------+----------+----------+
| Investment | (43) | (57) |
| management | | |
| fee | | |
| charged to | | |
| capital | | |
+---------------------+----------+----------+
| Income | (31) | - |
| reinvested | | |
+---------------------+----------+----------+
| Taxation | (2) | (2) |
+---------------------+----------+----------+
| Net | 52 | (32) |
| cash | | |
| inflow/(outflow) | | |
| from operating | | |
| activities | | |
+---------------------+----------+----------+
C Share Fund
+---------------------+----------+----------+
| | Year | Year |
| | ended | ended |
| | 31 | 31 |
| | December | December |
| | 2008 | 2007 |
+---------------------+----------+----------+
| | GBP'000 | GBP'000 |
+---------------------+----------+----------+
| Net | (1,559) | (745) |
| deficit | | |
| before | | |
| taxation | | |
+---------------------+----------+----------+
| Net | 1,720 | 867 |
| capital | | |
| deficit | | |
+---------------------+----------+----------+
| Increase | (10) | (8) |
| in | | |
| prepayments | | |
| and accrued | | |
| income | | |
+---------------------+----------+----------+
| Increase/(decrease) | 80 | (36) |
| in creditors | | |
+---------------------+----------+----------+
| Investment | (85) | (115) |
| management | | |
| fee | | |
| charged to | | |
| capital | | |
+---------------------+----------+----------+
| Income | (65) | - |
| reinvested | | |
+---------------------+----------+----------+
| Taxation | (3) | (3) |
+---------------------+----------+----------+
| Net | 78 | (40) |
| cash | | |
| inflow/(outflow) | | |
| from operating | | |
| activities | | |
+---------------------+----------+----------+
Total
+---------------------+----------+----------+
| | Year | Year |
| | ended | ended |
| | 31 | 31 |
| | December | December |
| | 2008 | 2007 |
+---------------------+----------+----------+
| | GBP'000 | GBP'000 |
+---------------------+----------+----------+
| Net | (2,332) | (1,164) |
| deficit | | |
| before | | |
| taxation | | |
+---------------------+----------+----------+
| Net | 2,572 | 1,345 |
| capital | | |
| deficit | | |
+---------------------+----------+----------+
| Increase | (3) | (25) |
| in | | |
| prepayments | | |
| and accrued | | |
| income | | |
+---------------------+----------+----------+
| Increase/(decrease) | 122 | (51) |
| in creditors | | |
+---------------------+----------+----------+
| Investment | (128) | (172) |
| management | | |
| fee | | |
| charged to | | |
| capital | | |
+---------------------+----------+----------+
| Income | (96) | - |
| reinvested | | |
+---------------------+----------+----------+
| Taxation | (5) | (5) |
+---------------------+----------+----------+
| Net | 130 | (72) |
| cash | | |
| inflow/(outflow) | | |
| from operating | | |
| activities | | |
+---------------------+----------+----------+
17 Reconciliation of net cash flow to movement in net funds
Ordinary Share Fund
+---------------------+----------+----------+
| | Year | Year |
| | ended | ended |
| | 31 | 31 |
| | December | December |
| | 2008 | 2007 |
+---------------------+----------+----------+
| | GBP'000 | GBP'000 |
+---------------------+----------+----------+
| Increase/(decrease) | 1 | (3) |
| in cash in year | | |
+---------------------+----------+----------+
| Net | 56 | 59 |
| funds | | |
| at | | |
| beginning | | |
| of year | | |
+---------------------+----------+----------+
| Net | 57 | 56 |
| funds | | |
| at end | | |
| of | | |
| year | | |
+---------------------+----------+----------+
C Share Fund
+-----------+----------+----------+
| | Year | Year |
| | ended | ended |
| | 31 | 31 |
| | December | December |
| | 2008 | 2007 |
+-----------+----------+----------+
| | GBP'000 | GBP'000 |
+-----------+----------+----------+
| Increase | 275 | 57 |
| in cash | | |
| in year | | |
+-----------+----------+----------+
| Net | 217 | 160 |
| funds | | |
| at | | |
| beginning | | |
| of year | | |
+-----------+----------+----------+
| Net | 492 | 217 |
| funds | | |
| at end | | |
| of | | |
| year | | |
+-----------+----------+----------+
Total
+-----------+----------+----------+
| | Year | Year |
| | ended | ended |
| | 31 | 31 |
| | December | December |
| | 2008 | 2007 |
+-----------+----------+----------+
| | GBP'000 | GBP'000 |
+-----------+----------+----------+
| Increase | 276 | 54 |
| in cash | | |
| in year | | |
+-----------+----------+----------+
| Net | 273 | 219 |
| funds | | |
| at | | |
| beginning | | |
| of year | | |
+-----------+----------+----------+
| Net | 549 | 273 |
| funds | | |
| at end | | |
| of | | |
| year | | |
+-----------+----------+----------+
18 Analysis of changes in net funds
Ordinary Share Fund
+-----------+-------------------------------------------------+---------+----------+
| | At | Cash | At |
| | 1 | flows | 31 |
| | January | | December |
| | 2008 | | 2008 |
+-----------+-------------------------------------------------+---------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+-----------+-------------------------------------------------+---------+----------+
| Cash | 57 | - | 57 |
| at | | | |
| bank | | | |
+-----------+-------------------------------------------------+---------+----------+
| Bank | (1) | 1 | - |
| overdraft | | | |
+-----------+-------------------------------------------------+---------+----------+
| Total | 56 | 1 | 57 |
+-----------+-------------------------------------------------+---------+----------+
C Share Fund
+--------+---------+---------+----------+
| | At | Cash | At |
| | 1 | flows | 31 |
| | January | | December |
| | 2008 | | 2008 |
+--------+---------+---------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------+---------+---------+----------+
| Cash | 217 | 275 | 492 |
| at | | | |
| bank | | | |
+--------+---------+---------+----------+
Total
+-----------+---------+---------+----------+
| | At | Cash | At |
| | 1 | flows | 31 |
| | January | | December |
| | 2008 | | 2008 |
+-----------+---------+---------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+-----------+---------+---------+----------+
| Cash | 274 | 275 | 549 |
| at | | | |
| bank | | | |
+-----------+---------+---------+----------+
| Bank | (1) | 1 | - |
| overdraft | | | |
+-----------+---------+---------+----------+
| Total | 273 | 276 | 549 |
+-----------+---------+---------+----------+
19 Financial commitments
At 31 December 2008 and 2007 the Company did not have any financial commitments
which had not been accrued.
20 Analysis of financial assets and liabilities
The objective of the Company is to generate long term capital growth and tax
free dividends for investors. The investment policy is to invest approximately
75 per cent of the Company's funds over a three year period in a diversified
portfolio of holdings in qualifying investments, whether unquoted or traded on
AIM. Investments are made selectively across a diverse range of sectors in
companies which have the potential to generate growth and enhance their value.
The investments in a particular company may be made in loan stocks or preference
shares as well as equity shares where it is felt this would enhance shareholder
return. The Company does not invest in start-up or seed capital situations. In
accordance with the Company's risk averse approach, the Investment Manager will
only invest when it believes it has identified the right investment opportunity.
The balance of approximately 25 per cent of the Company's funds will be invested
in a combination of Neptune income funds and money market instruments.
The Company's financial instruments comprise securities, cash balances and
debtors and creditors that arise from its operations.
The Company has little exposure to cash flow or interest rate risk and no
exposure to foreign currency risk.
The principal risks the Company faces in its portfolio management activities
are:
- Market risk (including interest rate and price risk)
- Liquidity risk
- Credit risk
The Investment Manager's policies for managing these risks are summarised below
and have been applied throughout the year.
The Board keeps the risks under continual review through the provision of
monthly management information and quarterly board meetings.
(i) Market risk (including interest rate risk and price risk)
Market risk arises from uncertainty about the future prices of financial
instruments held in accordance with the Company's investment objectives. It
represents the potential loss that the Company might suffer through holding
market positions in the face of market movements. These risks are monitored by
the Investment Managers on a regular basis and the Board at meetings with the
Investment Managers.
The Board reviews each investment purchase in the qualifying portfolio to ensure
that any acquisition allows the Company to maintain an appropriate spread of
market risk and that it falls within the VCT qualifying criteria at the time of
purchase. It considers the associated business risks of each investment. These
include, but are not restricted to, the industry sector, management expertise
and financial stability of each company
The Company does not use derivative instruments to hedge against market risk.
The Company does not have any interest bearing liabilities. Interest is earned
on cash balances and is linked to the banks' variable deposit rates. The board
does not consider interest rate risk to be material. Interest rate risk arising
on loan stock instruments is not considered significant with the main risk on
these investments being credit risk.
The ten largest holdings by value and the amounts invested in quoted equity,
unquoted equity, unquoted bonds, unquoted preference shares, quoted funds and
unquoted funds for the Ordinary Share and the C Share portfolios are set out in
the Investment Portfolios. The amounts invested in equity shares, loan stocks
and cash by fund is also set out therein.
The total value of investments in the Ordinary Share fund at 31 December 2008
was GBP3,174,758. A 10 per cent increase/(decrease) in the aggregate value of
these investments would have increased/(decreased) the net assets attributable
to the Ordinary shareholders and of the Company and increased/(decreased) the
deficit attributable to the Ordinary shareholders and of the Company by
GBP317,476. This represents 9.9 per cent of the net assets attributable to the
Ordinary shareholders and of the Company at 31 December 2008 and 41.0 per cent
of the deficit attributable to Ordinary shareholders and of the Company for the
year ended 31 December 2008.
The total value of investments in the C Share Fund at 31 December 2008 was
GBP6,061,523. A 10 per cent increase/(decrease) in the aggregate value of these
investments would have increased/(decreased) the net assets attributable to the
C shareholders and increased/(decreased) the deficit attributable to the C
shareholders by GBP606,152. This represents 9.4 per cent of the net assets
attributable to the C shareholders at 31 December 2008 and 38.8 per cent of the
deficit attributable to C shareholders for the year ended 31 December 2008. The
increase/(decrease) would make no difference to the net assets of the Company or
the deficit of the Company.
In current market conditions, an increase/(decrease) in the aggregate values of
investments by 10 per cent is reasonably possible.
(ii) Liquidity risk
The investments the Company holds includes AIM quoted securities where the
liquidity is generally below that of securities listed/quoted in the main market
and unquoted investments where there is no ready market for the securities. The
ability of the Company to realise positions may therefore be restricted when
there are no willing purchasers
Although the Company's AIM quoted investments and unquoted investments are less
liquid than securities listed on the London Stock Exchange, the Board seeks to
ensure that an appropriate proportion of the Company's investment portfolio is
invested in cash and readily realisable securities, which are sufficient to meet
any funding commitments that may arise.
(iii) Credit risk
The failure of a counterparty to a transaction to discharge its obligations
under that transaction could result in the Company suffering a loss. The Board
does not consider this risk to be significant. The Company manages this risk by
ensuring that where an investment is made in an unquoted loan, it is made as
part of the overall equity and debt package. The recoverability of the debt is
assessed as part of the overall investment process and is then monitored on an
ongoing basis by the Investment Manager who reports to the Board on any
recoverability issues. It also ensures that cash at bank is held only with
reputable banks with high quality external credit ratings. None of the Company's
financial assets are secured by collateral or other credit enhancements.
The total exposure to loan stocks is set out below.
Financial assets
As required by FRS 29 an analysis of financial assets and liabilities, which
identifies the risk of the Company's holding of such items is provided. The
Company's financial assets comprise equity and preference shares, loan stock and
cash and debtors.
The interest rate profile of the Company's financial assets is given in the
table below:
+----------------------+--------------+--------------+----+------------+-------------+
| Ordinary Share Fund | | | | | |
+----------------------+--------------+--------------+----+------------+-------------+
| | As at 31 December 2008 | | As at 31 December 2007 |
+----------------------+-----------------------------+----+--------------------------+
| | Fair value | Cash flow | | Fair | Cash flow |
| | interest | interest | | value | interest |
| | rate risk | rate risk | | interest | rate risk |
| | | | | rate risk | |
+----------------------+--------------+--------------+----+------------+-------------+
| | GBP'000 | GBP'000 | | GBP'000 | GBP'000 |
+----------------------+--------------+--------------+----+------------+-------------+
| Loan stock | 615 | - | | 644 | - |
+----------------------+--------------+--------------+----+------------+-------------+
| Liquidity Funds | - | 257 | | - | - |
+----------------------+--------------+--------------+----+------------+-------------+
| Cash | - | 57 | | - | 57 |
+----------------------+--------------+--------------+----+------------+-------------+
| | 615 | 314 | | 644 | 57 |
+----------------------+--------------+--------------+----+------------+-------------+
20 Analysis of financial assets and liabilities (continued)
+-----------+----------+----------+--------+----------+----------+
| C | | | | | |
| Share | | | | | |
| Fund | | | | | |
+-----------+----------+----------+--------+----------+----------+
| | As at 31 | | As at 31 |
| | December 2008 | | December 2007 |
+-----------+---------------------+--------+---------------------+
| | Fair | Cash | | Fair | Cash |
| | value | flow | | value | flow |
| | interest | interest | | interest | interest |
| | rate | rate | | rate | rate |
| | risk | risk | | risk | risk |
+-----------+----------+----------+--------+----------+----------+
| | GBP'000 | GBP'000 | | GBP'000 | GBP'000 |
| | | | | | |
+-----------+----------+----------+--------+----------+----------+
| Loan | 1,120 | - | | 1,022 | - |
| stock | | | | | |
+-----------+----------+----------+--------+----------+----------+
| Liquidity | - | 1,371 | | - | 106 |
| Funds | | | | | |
+-----------+----------+----------+--------+----------+----------+
| Cash | - | 492 | | - | 217 |
+-----------+----------+----------+--------+----------+----------+
| | 1,120 | 1,863 | | 1,022 | 323 |
+-----------+----------+----------+--------+----------+----------+
+-----------+----------+----------+--------+----------+----------+
| Total | | | | | |
+-----------+----------+----------+--------+----------+----------+
| | As at 31 | | As at 31 |
| | December 2008 | | December 2007 |
+-----------+---------------------+--------+---------------------+
| | Fair | Cash | | Fair | Cash |
| | value | flow | | value | flow |
| | interest | interest | | interest | interest |
| | rate | rate | | rate | rate |
| | risk | risk | | risk | risk |
+-----------+----------+----------+--------+----------+----------+
| | GBP'000 | GBP'000 | | GBP'000 | GBP'000 |
| | | | | | |
+-----------+----------+----------+--------+----------+----------+
| Loan | 1,735 | - | | 1,666 | - |
| stock | | | | | |
+-----------+----------+----------+--------+----------+----------+
| Liquidity | - | 1,628 | | - | 106 |
| Funds | | | | | |
+-----------+----------+----------+--------+----------+----------+
| Cash | - | 549 | | - | 274 |
+-----------+----------+----------+--------+----------+----------+
| | 1,735 | 2,177 | | 1,666 | 380 |
+-----------+----------+----------+--------+----------+----------+
The variable rate is based on the banks' deposit rate.
Financial liabilities
The Company finances its operations through its issued share capital and
existing reserves. The only financial liabilities of the Company are creditors
all of which are sterling denominated which are due within one year. The
creditors are disclosed in Note 11. No interest is paid on these liabilities.
There is no risk to the Ordinary shareholders from the C Share Fund as the net
assets of the C share fund are wholly attributable to the C share Fund.
All assets and liabilities are carried at fair value.
Capital management policies and procedures
The Company's capital management objectives are to ensure that the it will be
able to continue as a going concern and to maximise the income and capital
return to its Ordinary shareholders and C shareholders.
The Board, with the assistance of the Investment Manager monitors and reviews
the broad structure of the Company's capital on an ongoing basis. This review
includes the planned level of gearing, which takes account of the Manager's
views on the market; the need for new issues of equity shares; and the extent to
which revenue in excess of that which is required to be distributed should be
retained.
The Company's objectives, policies and processes for managing capital are
unchanged from the preceding accounting period. The Company is subject to
several externally imposed capital requirements. As a public company, the
Company has to have a minimum share capital of GBP50,000 and in order to be able
to pay dividends out of profits available for distribution by way of dividends,
the Company has to be able to meet one of the two capital restriction tests
imposed on investment companies by company law. These requirements are unchanged
since last year, and the Company has complied with them.
21 Related party transactions
The Company's investments are managed by Calculus Capital Limited and Neptune
Investment Management Limited. John Glencross, a Director of the Company, has an
interest in Calculus Capital Limited. The amounts paid to the Managers are
disclosed in Note 3.
Calculus Capital Limited also acts as Administrators to the VCT and received a
fee of GBP35,082 (31 December 2007: GBP39,608).
The Company has invested in The Neptune Income Fund Income A Class and in the
Neptune Quarterly Income Fund Income Units. Details of these investments are set
out below. Neptune Investment Management charges an annual fee of 1.6 per cent
on these investments.
+------------+----------+---------+-----------+----------+---------+-----------+
| | 31 December | 31 December |
+------------+--------------------------------+--------------------------------+
| | 2008 | 2007 |
+------------+--------------------------------+--------------------------------+
| |Ordinary | C | Total |Ordinary | C | Total |
| | Shares | Shares | | Shares | Shares | |
+------------+----------+---------+-----------+----------+---------+-----------+
| Neptune | GBP | GBP | GBP | GBP | GBP | GBP |
| Income | | | | | | |
| Fund | | | | | | |
| | | | | | | |
| Income | | | | | | |
| Class A | | | | | | |
+------------+----------+---------+-----------+----------+---------+-----------+
| Investment | 435,453 | 810,271 | 1,245,724 | 435,453 | 825,000 | 1,260,453 |
| at cost | | | | | | |
+------------+----------+---------+-----------+----------+---------+-----------+
| Valuation | 404,567 | 608,994 | 1,013,561 | 573,982 | 892,648 | 1,466,630 |
| at 31 | | | | | | |
| December | | | | | | |
+------------+----------+---------+-----------+----------+---------+-----------+
| | | | | | | |
+------------+----------+---------+-----------+----------+---------+-----------+
| Neptune | | | | | | |
| Quarterly | | | | | | |
| Income | | | | | | |
| Fund | | | | | | |
| Income | | | | | | |
| units | | | | | | |
+------------+----------+---------+-----------+----------+---------+-----------+
| Investment | 439,047 | 825,366 | 1,264,413 | 439,047 | 810,000 | 1,249,047 |
| at cost | | | | | | |
+------------+----------+---------+-----------+----------+---------+-----------+
| Valuation | 412,272 | 629,548 | 1,041,820 | 595,612 | 879,428 | 1,475,040 |
| at 31 | | | | | | |
| December | | | | | | |
+------------+----------+---------+-----------+----------+---------+-----------+
22 C Share Restatement
As a result of the change in accounting policy relating to the classification of
the C Shares as debt not equity, the comparative figures have had to be
restated. Reconciliations between the previously reported Total figures and the
restated figures are set out below.
+--------------+----------+-----------+----------+
| INCOME | Year ended |
| STATEMENT | |
+--------------+---------------------------------+
| | 31 December 2007 |
+--------------+---------------------------------+
| | (last period presented |
| | showing C Shares as |
| | equity) |
+--------------+---------------------------------+
| Total | Previous | C | Restated |
| | | Share | |
+--------------+----------+-----------+----------+
| | | liability | |
+--------------+----------+-----------+----------+
| | Total | Total | Total |
+--------------+----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------+----------+-----------+----------+
| | | | |
+--------------+----------+-----------+----------+
| Losses | (1,173) | - | (1,173) |
| on | | | |
| investments | | | |
| at fair | | | |
| value | | | |
+--------------+----------+-----------+----------+
| Income | 412 | - | 412 |
+--------------+----------+-----------+----------+
| Investment | (229) | - | (229) |
| management | | | |
| fee | | | |
+--------------+----------+-----------+----------+
| Operating | (174) | - | (174) |
| expenses | | | |
+--------------+----------+-----------+----------+
| Deficit | | | |
| on | | | |
| ordinary | | | |
| activities | | | |
+--------------+----------+-----------+----------+
| before | (1,164) | - | (1,164) |
| finance | | | |
| charges | | | |
| and | | | |
| taxation | | | |
+--------------+----------+-----------+----------+
| | | | |
+--------------+----------+-----------+----------+
| Finance | - | 748 | 748 |
| charges | | | |
+--------------+----------+-----------+----------+
| Taxation | (5) | - | (5) |
| on | | | |
| ordinary | | | |
| activities | | | |
+--------------+----------+-----------+----------+
| Deficit | (1,169) | 748 | (421) |
| attributable | | | |
| to Ordinary | | | |
| shareholders | | | |
+--------------+----------+-----------+----------+
+----------------------+----------+-----------+----------+----------+-----------+----------+
| BALANCE | As at | As at |
| SHEETS | | |
+----------------------+---------------------------------+---------------------------------+
| Total | 31 December 2007 | 31 December 2006 |
+----------------------+---------------------------------+---------------------------------+
| | (restated) | (restated) |
+----------------------+---------------------------------+---------------------------------+
| | (end of last period presented | (date of transition) |
| | showing C Shares as equity) | |
| | | |
+----------------------+---------------------------------+---------------------------------+
| | Previous | C Share | Restated | Previous | C Share | Restated |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| | | liability | | | liability | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| Fixed | | | | | | |
| Assets | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| Investments | 11,240 | - | 11,240 | 12,979 | - | 12,979 |
| at fair | | | | | | |
| value | | | | | | |
| through | | | | | | |
| profit or | | | | | | |
| loss | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| Current | | | | | | |
| Assets | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| Debtors | 52 | - | 52 | 27 | - | 27 |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| Cash at | 274 | - | 274 | 219 | - | 219 |
| bank | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| | 326 | - | 326 | 246 | - | 246 |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| Creditors: | | | | | | |
| amounts | | | | | | |
| falling | | | | | | |
| due | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| within | | | | | | |
| one year | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| Creditors | (64) | - | (64) | (228) | - | (228) |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| Liability | - | (7,780) | (7,780) | - | (8,696) | (8,696) |
| to the C | | | | | | |
| Share | | | | | | |
| Fund | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| Bank | (1) | - | (1) | - | - | - |
| overdraft | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| | (65) | (7,780) | (7,845) | (228) | (8,696) | (8,924) |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| Net | 261 | (7,780) | (7,519) | 18 | (8,696) | (8,678) |
| Current | | | | | | |
| Assets/(Liabilities) | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| Net | 11,501 | (7,780) | 3,721 | 12,997 | (8,696) | 4,301 |
| Assets | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| Represented | | | | | | |
| by: | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| CALLED UP SHARE | | | | | |
| CAPITAL AND | | | | | |
| RESERVES | | | | | |
+---------------------------------+-----------+----------+----------+-----------+----------+
| Share | 1,218 | (839) | 379 | 1,218 | (839) | 379 |
| capital | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| Share | 21 | - | 21 | 21 | - | 21 |
| premium | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| Special | 10,284 | (7,097) | 3,187 | 10,284 | (7,097) | 3,187 |
| reserve | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| Capital | 149 | 82 | 231 | 116 | 88 | 204 |
| reserve | | | | | | |
| realised | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| Capital | (279) | 148 | (131) | 1,240 | (763) | 477 |
| reserve | | | | | | |
| unrealised | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| Revenue | 108 | (74) | 34 | 118 | (85) | 33 |
| reserve | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
| Total | 11,501 | (7,780) | 3,721 | 12,997 | (8,696) | 4,301 |
| Ordinary | | | | | | |
| shareholders' | | | | | | |
| funds | | | | | | |
+----------------------+----------+-----------+----------+----------+-----------+----------+
+----------------+----------+-----------+----------+
| CASH | | | |
| FLOW | | | |
| STATEMENT | | | |
+----------------+----------+-----------+----------+
| Total | | | |
+----------------+----------+-----------+----------+
| | As at 31 December 2007 |
+----------------+---------------------------------+
| | (restated) |
+----------------+---------------------------------+
| | Previous | C | Restated |
| | | Share | |
+----------------+----------+-----------+----------+
| | | liability | |
+----------------+----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------+----------+-----------+----------+
| Operating | | | |
| activities | | | |
+----------------+----------+-----------+----------+
| Investment | 368 | - | 368 |
| income | | | |
| received | | | |
+----------------+----------+-----------+----------+
| Deposit | 13 | - | 13 |
| income | | | |
| received | | | |
+----------------+----------+-----------+----------+
| Investment | (292) | - | (292) |
| management | | | |
| fees paid | | | |
+----------------+----------+-----------+----------+
| Administration | (39) | - | (39) |
| fees paid | | | |
+----------------+----------+-----------+----------+
| Other | (122) | - | (122) |
| cash | | | |
| payments | | | |
+----------------+----------+-----------+----------+
| Net | (72) | - | (72) |
| cash | | | |
| outflow | | | |
| from | | | |
| operating | | | |
| activities | | | |
+----------------+----------+-----------+----------+
| Investing | | | |
| activities | | | |
+----------------+----------+-----------+----------+
| Purchase | (6,716) | - | (6,716) |
| of | | | |
| investments | | | |
+----------------+----------+-----------+----------+
| Sale | 7,282 | - | 7,282 |
| of | | | |
| investments | | | |
+----------------+----------+-----------+----------+
| Net | 566 | - | 566 |
| cash | | | |
| inflow | | | |
| from | | | |
| investing | | | |
| activities | | | |
+----------------+----------+-----------+----------+
| Equity | (327) | 168 | (159) |
| dividends | | | |
| paid | | | |
+----------------+----------+-----------+----------+
| Financing | | | |
+----------------+----------+-----------+----------+
| Distributions | - | (168) | (168) |
| made to C | | | |
| shareholders | | | |
+----------------+----------+-----------+----------+
| Net | (109) | - | (109) |
| proceeds | | | |
| from C | | | |
| Share | | | |
| issue | | | |
+----------------+----------+-----------+----------+
| Net | (4) | - | (4) |
| proceeds | | | |
| from | | | |
| Ordinary | | | |
| Share | | | |
| issue | | | |
+----------------+----------+-----------+----------+
| Net | (113) | (168) | (281) |
| cash | | | |
| outflow | | | |
| from | | | |
| financing | | | |
+----------------+----------+-----------+----------+
| Increase | 54 | - | 54 |
| in cash | | | |
+----------------+----------+-----------+----------+
23 Nature of information
These are not full accounts in terms of Section 240 of the Companies Account
1985. Full audited accounts for the year ended 31 December 2007 have been lodged
with the Registrar of Companies. The Report and Accounts for the year ended 31
December 2008 will be sent to shareholders shortly and will be available for
inspection at 104, Park Street, London W1K 6NF, the Company's registered office,
and will be published on the www.calculuscapital.com website, which is a website
maintained by the Company's Investment Manager, Calculus Capital Limited. The
audited accounts for the year ended 31 December 2008 contain an unqualified
audit report.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEFFWLSUSESD
Neptune-calculus Inc&growth Vct (LSE:NEPC)
過去 株価チャート
から 5 2024 まで 6 2024
Neptune-calculus Inc&growth Vct (LSE:NEPC)
過去 株価チャート
から 6 2023 まで 6 2024
