Albion. Tch Vct Regulatory News (AATG)

18 Apr 2008 16:42

Close Technology & General VCT PLC18 April 2008 The 'Final Results' announcement released today at 16:18 under RNS No 6844S isbeing re-released to include the PDF links relating to the share portfolio's inthe Chairman's statement. All material details remain unchanged. The full text is shown below. CLOSE TECHNOLOGY & GENERAL VCT PLC ANNUAL RESULTS 18 April 2008 Preliminary announcement of the annual financial results for the twelve monthsto 31 December 2007. Copies of the full Report and Financial Statements can befound on www.closeventures.co.uk Close Technology & General VCT PLC ("the Company") is a Venture Capital Trustwhich raised £14.3 million in December 2000 and 2002, and raised a further £35.0million during 2006 through the launch of a C Share issue. The Company offersinvestors the opportunity to participate in a balanced portfolio of technologyand non-technology businesses. The Company's investment portfolio is intendedto be split approximately as follows: • 40% in unquoted UK technology-related companies; and • 60% in unquoted UK non-technology companies. This announcement was approved for release by the Board of Directors on 18 April2008. Financial Highlights Year ended Period ended 31 December 2007 31 December 2006Ordinary sharesRevenue return (pence per share) 4.4 3.2Capital return (pence per share) 3.2 (1.8)Dividends paid (pence per share) 8.0 8.0Net asset value (pence per share) 114.1 114.4Net assets £15,193,000 £15,485,000 C sharesRevenue return (pence per share) 3.1 2.3Capital return (pence per share) (2.9) (1.1)Dividends paid (pence per share) 2.5 0.5Net asset value (pence per share) 92.7 94.9Net assets £32,875,000 £33,679,000 In addition to the dividends summarised above, the Directors have declared afirst dividend for the new financial year of 4.0 pence per Ordinary share (2.0pence to be paid out of revenue profits and 2.0 pence out of capital profits)and 1.5 pence per C share (out of revenue profits) to be paid on 30 May 2008 toshareholders on the register at 2 May 2008. Shareholder value per share since launch Ordinary Shares Pence per shareTotal dividends paid during the period to 31 December 2006 29.0Total dividends paid during the year to 31 December 2007 8.0Total dividends 37.0Net asset value at 31 December 2007 114.1Total cumulative return at 31 December 2007 151.1 C Shares Pence per shareTotal dividends paid during the period to 31 December 2006 0.5Total dividends paid during the year to 31 December 2007 2.5Total dividends 3.0Net asset value at 31 December 2007 92.7Total cumulative return at 31 December 2007 95.7 Chairman's statement Introduction I am pleased to report that the year to 31 December 2007 continues the positivetrend experienced by your Company over recent years. The strong investmentreturn from the Ordinary Share portfolio over the period was generated by someexcellent profits realised from the sale of mature investments. These furtherunderpinned the continuing policy of paying out a dividend of 8.0 pence perOrdinary Share from both revenue and realised capital profits. The C Shareportfolio, meanwhile, continues in its programme of building up a balancedportfolio of investments in technology and non-technology businesses. We arenow in a position to pay out an annual dividend of 3.0 pence per C Share fromrevenue profits and it is hoped that this figure will grow further in thefuture. Investment progress and performance Ordinary share portfolio The total return per Ordinary Share was 7.6 pence for the year; part of this wasdue to the continued growth in income from the investment portfolio, with thebalance from the successful realisation of investments. These comprised aprofit of £607,000 for Careforce, which was taken over by the Mears Group inApril of this year, £292,000 in respect of Intelligent Environments and £132,000from Bond International (two companies within our residual AIM portfolio),£217,000 from the portfolio of International Quoted Technology companies (whichwas wound down during the period) and £240,000 from the sale of Bold PubCompany. Meanwhile, £2.3 million was invested in 23 existing and new investeecompanies. Paste the following link into your web browser to download a PDF document of theOrdinary share portfolio: http://www.rns-pdf.londonstockexchange.com/rns/6935s_-2008-4-18.pdf Source: Close Ventures Limited The investments held are diversified to ensure a spread of risk across theportfolio. The portfolio is split broadly 67 per cent loan stock and 33 percent equity investments. At 31 December 2007 the Ordinary share portfolio was77 per cent invested for HM Revenue & Customs purposes, in 46 investeecompanies. C share portfolio The C Share portfolio, which is now over two-thirds of the way through itsinitial investment programme, recorded a total return of 0.2 pence per share.Of this, 3.1 pence was accounted for by the growing revenue return with anegative capital return of 2.9 pence, relating to a partial write down of two ofits investments, Premier Leisure Suffolk and Helveta. During the year some£13.0 million was invested or reserved for investment in 20 investee companies. Paste the following link into your web browser to download a PDF document of theC chare portfolio: http://www.rns-pdf.londonstockexchange.com/rns/6935s_2-2008-4-18.pdf Source: Close Ventures Limited The investments held are diversified to ensure a spread of risk across theportfolio. The portfolio is split approximately 52 per cent loan stock and 48per cent equity invested; this does not include cash and cash equivalents.There is a large proportion of cash and cash equivalents because the C shareportfolio has until 31 December 2008 to meet the minimum 70 per cent. HM Revenue& Customs qualifying level. At 31 December 2007 the C share portfolio was 43per cent invested for HM revenue & Customs purposes, taking the total number ofinvestments to 23. Risks and uncertainties The key risk is the UK economy which, while currently still growing, could beaffected by the current unease in the wholesale financial and housing markets.While this could give rise to additional investment opportunities for a cashrich fund like ourselves, a downturn could affect existing investee companiesand make it harder for the Manager to assess the prospects of new investmentopportunities, as well as potentially affecting asset values. The Company'spolicy of having a first legal charge wherever possible, mitigates some of theinvestment risks. Other risks and uncertainties are detailed in the DirectorsReport and Business Review of the Annual Report and Financial Statements. Dividend reinvestment scheme I draw to shareholders attention a Dividend Reinvestment Scheme wherebyshareholders may elect to reinvest the whole of the dividend due for payment on30 May 2008 by subscribing for New Ordinary Shares and New C Shares. TheCircular dated 18 April 2008 which is enclosed with the Annual Report andFinancial Statements 'Introduction of a Dividend Reinvestment Scheme; detailsthe mechanics of this Scheme. Proposed change to the Company's Articles of Association I draw shareholders attention to the proposed resolution to change the Articlesof Association, which is described in detail in the Directors' Report andBusiness Review of the Annual Report and Financial Statements. The newprovisions of the Companies Act 2006 include the requirement for Directors toavoid actual or potential conflicts of interest with effect from 1 October 2008. The Directors are proposing a resolution to align with current legislationactual or potential conflict situations, should it be in the company's bestinterests to do so, and to allow conflicts of interest to be dealt with in asimilar way to the current position. Results, dividends and prospects Overall, despite the general economic risks referred to above, your Boardremains positive on the outlook of the Company and its investment portfolio. Webelieve that the income generation potential of the portfolio remains strong,while we have some particularly interesting technology investments which webelieve could prove to be strong generators to shareholder value in the future. As at 31 December 2007, the net asset value of the Company's Ordinary Shares was114.1 pence (2006: 114.4 pence) and the net asset value for the C Shares 92.7pence (2006: 94.9 pence). The revenue return before tax for the Ordinary Shareswas £738,000 (2006: £658,000) and for the C Shares the revenue return before taxwas £1,538,000 (2006: £947,000). The first dividend for the new financial year will be 4.0 pence per OrdinaryShare (comprising 2.0 pence from revenue profits and 2.0 pence from realisedcapital profits) and 1.5 pence per C Share (from revenue profits). Dividendswill be payable on 30 May 2008 to those shareholders on the register on 2 May2008. Dr Neil Cross Chairman 18 April 2008 Statement of Directors' responsibilities The Directors are responsible for preparing the Annual Report and the FinancialStatements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for eachfinancial year. Under that law the Directors have elected to prepare thefinancial statements in accordance with United Kingdom Generally AcceptedAccounting Practice (United Kingdom Accounting Standards and applicable law). The financial statements are required by law to give a true and fair view of thestate of affairs of the Company and of the income statement of the Company forthe year. In preparing these financial statements, the Directors are requiredto: • select suitable accounting policies and then apply them consistently; • make judgments and estimates that are reasonable and prudent; • state whether applicable UK Accounting Standards have been followed; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The Directors are responsible for keeping proper accounting records thatdisclose with reasonable accuracy at any time the financial position of theCompany and enable them to ensure that the financial statements comply with theCompanies Act 1985. They are also responsible for safeguarding the assets of theCompany and hence for taking reasonable steps for the prevention and detectionof fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporateand financial information included on the Company's website. Legislation in theUnited Kingdom governing the preparation and dissemination of financialstatements may differ from legislation in other jurisdictions. Income statement Ordinary shares Year ended 31 December 2007 Year ended 31 December 2006 Revenue Capital Total Revenue Capital Total Note £'000 £'000 £'000 £'000 £'000 £'000Gains/(losses)on investments 3 - 664 664 - (3) (3)Investmentincome 4 932 - 932 832 - 832Investmentmanagement fees (113) (340) (453) (117) (351) (468)Other expenses (81) - (81) (57) - (57) Return/(loss)on ordinaryactivitiesbefore tax 738 324 1,062 658 (354) 304Tax(charge)/crediton ordinaryactivities 5 (152) 99 (53) (219) 114 (105) Return/(loss)attributable toequityshareholders 586 423 1,009 439 (240) 199 Basic anddilutedreturn/(loss)per Ordinaryshare (pence) 7 4.4p 3.2p 7.6p 3.2p (1.8)p 1.4p C shares Year ended 31 December 2007 Year ended 31 December 2006 Revenue Capital Total Revenue Capital Total Note £'000 £'000 £'000 £'000 £'000 £'000(Losses)/gainson investments 3 - (517) (517) - 202 202Investmentincome 4 1,964 - 1,964 1,322 - 1,322Investmentmanagement fees (242) (725) (967) (246) (738) (984)Other expenses (184) - (184) (129) - (129) Return/(loss)on ordinaryactivitiesbefore tax 1,538 (1,242) 296 947 (536) 411Tax(charge)/crediton ordinaryactivities 5 (425) 211 (214) (284) 221 (63) Return/(loss)attributable toequityshareholders 1,113 (1,031) 82 663 (315) 348 Basic anddilutedreturn/(loss)per Ordinaryshare (pence) 7 3.1p (2.9)p 0.2p 2.3p (1.1)p 1.2p Combined Year ended 31 December 2007 Year ended 31 December 2006 Revenue Capital Total Revenue Capital Total Note £'000 £'000 £'000 £'000 £'000 £'000Gains oninvestments 3 - 147 147 - 199 199Investmentincome 4 2,896 - 2,896 2,154 - 2,154Investmentmanagement fees (355) (1,065) (1,420) (363) (1,089) (1,452)Other expenses (265) - (265) (186) - (186) Return/(loss)on ordinaryactivitiesbefore tax 2,276 (918) 1,358 1,605 (890) 715Tax(charge)/crediton ordinaryactivities 5 (577) 310 (267) (503) 335 (168) Return/(loss)attributable toequityshareholders 1,699 (608) 1,091 1,102 (555) 547 The total column of this Income Statement represents the profit and loss accountof the Company. The supplementary revenue and capital columns have been preparedin accordance with the Association of Investment Trust Companies' Statement ofRecommended Practice. All revenue and capital items in the above statement derive from continuingoperations. There are no recognised gains or losses other than the results for the yeardisclosed above. Accordingly a statement of total recognised gains and losses isnot required. Balance sheet Ordinary shares As at As at Note 31 December 31 December 2007 2006 £'000 £'000Fixed AssetsQualifying 10,688 10,965Non-qualifying 444 2,332Total fixed asset investments 11,132 13,297 Current assetsDebtors 223 23Cash at bank 4,056 2,486 4,279 2,509Creditors: amounts falling due (218) (321) within one year 4,061 2,188 Net current assets 15,193 15,485 Net assets Capital and reserves:Called up share capital 6,795 6,795Share premium 165 165Special reserve 5,554 5,554Capital redemption reserve 400 400Own treasury shares reserve (282) (56)Realised capital reserve 4,067 3,432Unrealised capital reserve (2,092) (1,276)Revenue reserve 586 471Equity shareholders' funds 15,193 15,485 Net asset value per Ordinary share (pence) 8 114.1 114.4 C shares As at As at Note 31 December 31 December 2007 2006 £'000 £'000Fixed AssetsQualifying 14,193 3,116Non-qualifying 14,967 28,430Total fixed asset investments 29,160 31,546 Current assetsDebtors 136 332Cash at bank 4,229 2,145 4,365 2,477Creditors: amounts falling due (650) (344) within one year 3,715 2,133 Net current assets 32,875 33,679 Net assets Capital and reserves:Called up share capital 17,740 17,740Special reserve 15,768 15,768Realised capital reserve (745) (505)Unrealised capital reserve (600) 190Revenue reserve 712 486Equity shareholders' funds 32,875 33,679 Net asset value per C share (pence) 8 92.7 94.9 Combined As at As at Note 31 December 31 December 2006 2007 £'000 £'000Fixed AssetsQualifying 24,881 14,081Non-qualifying 15,411 30,762Total fixed asset investments 40,292 44,843 Current assetsDebtors 359 355Cash at bank 8,285 4,631 8,644 4,986Creditors: amounts falling due (868) (665) within one year 7,776 4,321 Net current assets 48,068 49,164 Net assets Capital and reserves:Called up share capital 24,535 24,535Share premium 165 165Special reserve 21,322 21,322Capital redemption reserve 400 400Own treasury shares reserve (282) (56)Realised capital reserve 3,322 2,927Unrealised capital reserve (2,692) (1,086)Revenue reserve 1,298 957Equity shareholders' funds 48,068 49,164 Reconciliation of movements in shareholders' funds Ordinary shares Called up Capital Own Realised Unrealised share Share Special redemption Treasury capital capital Revenue capital premium reserve reserve shares reserve reserve reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 As at 1 January 2006 6,908 165 5,785 287 - 4,311 (1,027) 235 16,664Net realised gains on - - - - - 246 - - 246investments in the yearCapitalised investment - - - - - (351) - - (351)management feesTax relief on costs charged - - - - - 114 - - 114to capitalShare redemptions (113) - (231) 113 - - - - (231)Purchase of own treasury - - - - (56) - - - (56)sharesMovement in unrealised - - - - - - (249) - (249)appreciationRevenue return attributable - - - - - - - 439 439to shareholdersDividends - - - - - (888) - (203) (1,091)As at 31 December 2006 6,795 165 5,554 400 (56) 3,432 (1,276) 471 15,485Net realised gains on - - - - - 1,480 - - 1,480investments in the yearCapitalised investment - - - - - (340) - - (340)management feesTax relief on costs charged - - - - - 99 - - 99to capitalPurchase of own treasury - - - - (226) - - - (226)sharesMovement in unrealised - - - - - - (816) - (816)appreciationRevenue return attributable - - - - - - - 586 586to shareholdersDividends - - - - - (604) - (471) (1,075)As at 31 December 2007 6,795 165 5,554 400 (282) 4,067 (2,092) 586 15,193 C shares Called up Realised Unrealised share Share Special capital capital Revenue capital premium reserve reserve reserve reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 As at 1 January 2006 - - - - - - -Net realised gains on investments in the - - - 12 - - 12yearCapitalised investment management fees - - - (738) - - (738)Tax relief on costs charged to capital - - - 221 - - 221Issue of share capital 17,740 17,740 - - - - 35,480Issue costs - (1,952) - - - - (1,952)Cancellation of share premium account - (15,788) 15,788 - - - -Cost of cancellation of share premium - - (20) - - - (20)accountMovement in unrealised appreciation - - - - 190 - 190Revenue return attributable to - - - - - 663 663shareholders - - - - - (177) (177) DividendsAs at 31 December 2006 17,740 - 15,768 (505) 190 486 33,679Net realised gains on investments in the - - - 274 - - 274yearCapitalised investment management fees - - - (725) - - (725)Tax relief on costs charged to capital - - - 211 - - 211Movement in unrealised appreciation - - - - (790) - (790)Revenue return attributable to - - - - - 1,113 1,113shareholders - - - - - (887) (887) DividendsAs at 31 December 2007 17,740 - 15,768 (745) (600) 712 32,875 Cash flow statement Ordinary shares Year ended Year ended 31 December 2007 31 December 2006 Note £'000 £'000 Operating activities 566 621 Investment incomeDeposit interest received 166 102Investment management fees paid (460) (534)Other cash payments (72) (259) Intercompany account movement (100) 114Net cash inflow from operating activities 9 100 44 Taxation (67) (46) Capital expenditure and financial investmentPurchase of investments (1,709) (2,073) Disposal of investments 4,547 1,185 Net cash inflow/(outflow) from investing 2,838 (888)activities Equity dividends paid 6 (1,075) (1,091) Dividends paidNet cash inflow/(outflow) before financing 1,796 (1,981) Financing Purchase of own shares (226) (287)Net cash (outflow) from financing (226) (287)Cash inflow/(outflow) in the year 1,570 (2,268) C shares Year ended Year ended 31 December 2007 31 December 2006 Note £'000 £'000 Operating activitiesInvestment income 1,605 750Deposit interest received 203 314Investment management fees paid (983) (735)Other cash payments (141) (109)Intercompany account movement 288 (114)Net cash inflow from operating activities 9 972 106 Taxation (61) - Capital expenditure and financial investmentPurchase of investments (11,900) (31,594)Disposal of investments 13,960 297 Net cash inflow/(outflow) from investing activities 2,060 (31,297) Equity dividends paid 6 (887) (177) Dividends paidNet cash inflow/(outflow) before financing 2,084 (31,368) FinancingIssue of share capital (net of costs) - 33,513 Net cash inflow from financing - 33,513Cash inflow in the year 2,084 2,145 Combined Year ended Year ended 31 December 2007 31 December 2006 Note £'000 £'000 Operating activities 2,171 1,371 Investment incomeDeposit interest received 369 416Investment management fees paid (1,443) (1,269)Other cash payments (213) (368) Intercompany account movement 188 - 9 1,072 150 Net cash inflow from operating activities Taxation (128) (46) Capital expenditure and financial investmentPurchase of investments (13,609) (33,667) Disposal of investments 18,507 1,482 Net cash inflow/(outflow) from investing activities 4,898 (32,185) Equity dividends paid 9 (1,962) (1,268) Dividends paidNet cash inflow/(outflow) before financing 3,880 (33,349) FinancingPurchase of own shares (226) 33,513Issue of share capital (net of costs) - (287) Net cash (outflow)/inflow from financing (226) 33,226 Cash inflow/(outflow) in the year 3,654 (123) Notes to the financial statements for the year ended 31 December 2007 1. Accounting convention The financial statements have been prepared in accordance with the historicalcost convention, modified to include the revaluation of investments, inaccordance with applicable United Kingdom law and accounting standards and withthe Statement of Recommended Practice "Financial Statements of Investment TrustCompanies" ("SORP") issued by the Association of Investment Trust Companies ("AITC") in January 2003 and revised in December 2005. Accounting policies havebeen applied consistently in current and prior periods. True and fair override The Company is no longer an investment company within the meaning of s266, ofthe Companies Act 1985. However, it conducts its affairs as a venture capitaltrust for taxation purposes under Part 6 of the Income Taxes Act 2007. The absence of Section 266 status does not preclude the Company from presentingits accounts in accordance with the AITC's SORP and furthermore the Directorsconsider it appropriate to continue to present the accounts in accordance withthe SORP. Under the SORP, the financial performance of the Company ispresented in an Income Statement in which the total column is the profit andloss account of the Company. In the opinion of the Directors the presentation adopted enables the Company toreport in a manner consistent with the sector within which it operates. TheDirectors therefore consider that these departures from the specific provisionsof Schedule 4 of the Companies Act 1985 relating to the form and content ofaccounts for companies other than investment companies and these departures fromaccounting standards are necessary to give a true and fair view. The departureshave no effect on the total return or balance sheet. 2. Accounting policies Investments Quoted and unquoted equity investments In accordance with FRS 26 "Financial Instruments Measurement", quoted andunquoted equity investments are designated as fair value through profit or loss("FVTPL"). Investments listed on recognised exchanges are valued at the closingbid prices at the end of the accounting period. Unquoted investments' fairvalue is determined by the Directors in accordance with the InternationalPrivate Equity and Venture Capital Valuation Guidelines (IPEVCV guidelines). Fair value movements on equity investments and gains and losses arising on thedisposal of investments are reflected in the capital column of the IncomeStatement in accordance with the AITC SORP and realised gains or losses on thesale of investments will be reflected in the realised capital reserve, andunrealised gains or losses arising from the revaluation of investments will bereflected in the unrealised capital reserve. Unquoted loan stock Unquoted loan stock is classified as loans and receivables in accordance withFRS 26 and carried at amortised cost using the Effective Interest Rate method ("EIR") less impairment. Movements in the amortised cost relating to interestincome are reflected in the revenue column of the Income Statement, and henceare reflected in the Revenue reserve, and movements in respect of capitalprovisions are reflected in the capital column of the Income Statement and arereflected in the Realised capital reserve following sale, or in the UnrealisedCapital reserve on revaluation. Loan stocks which are not impaired or past dueare considered fully performing in terms of contractual interest and capitalrepayments and the Board does not consider that there is a current likelihood ofa shortfall on security cover for these assets. For unquoted loan stock, theamount of the impairment is the difference between the asset's carrying valueand the present value of estimated future cash flows, discounted at theeffective interest rate. Floating rate notes In accordance with FRS 26 "Financial Instruments Measurement", floating ratenotes are designated as fair value through profit or loss ("FVTPL"). Floatingrate notes are valued at market bid price at the balance sheet date. Warrants, convertibles and unquoted equity derived instruments Warrants, convertibles and unquoted equity derived instruments are only valuedif their exercise or contractual conversion terms would allow them to beexercised or converted as at the balance sheet date, and if there is additionalvalue to the Company in exercising or converting as at the balance sheet date.Otherwise these instruments are held at nil value. The valuation techniques usedare those used for the underlying equity investment. Investments are recognised as financial assets on legal completion of theinvestment contract and are de-recognised on legal completion of the sale of aninvestment. Dividend income is not recognised as part of the fair value movement of aninvestment, but is recognised separately as investment income through therevenue reserve when a share becomes ex-dividend. Loan stock accrued interest is recognised in the Balance Sheet as part of thecarrying value of the loans and receivables at the end of each reporting period. It is not the Company's policy to exercise control or significant influence overinvestee companies. Therefore in accordance with the exemptions under FRS 9 "Associates and joint ventures", those undertakings in which the Company holdsmore than 20 per cent. of the equity are not regarded as associatedundertakings. Investment income Quoted and Unquoted equity income Dividend income is included in revenue when the investment is quotedex-dividend. Unquoted Loan stock income The fixed returns on non-equity shares and debt securities are recognised on atime apportionment basis using an effective interest rate over the life of thefinancial instrument. Bank interest income Interest income is recognised on an accrual basis using the rate of interestagreed with the bank. Floating rate note income Floating rate note income is recognised on an accrual basis using the interestrate applicable to the floating rate note at that time.. Investment management fees and other expenses All expenses have been accounted for on an accruals basis. Expenses are chargedthrough the Revenue account except the following which are charged through therealised capital reserve: • 75 per cent. of Management fees are allocated to the capitalaccount to the extent that these relate to an enhancement in the value of theinvestments and in line with the Board's expectation that over the long term 75per cent. of the Company's investment returns will be in the form of capitalgains; and • expenses which are incidental to the purchase or disposal of aninvestment are charged through the realised capital reserve. Under the terms of the Management Agreement, total expenses including managementfees and excluding performance fees will not exceed 3.5 per cent. of net assetvalue at the year end. Taxation Taxation is applied on a current basis in accordance with FRS 16 "Current tax".Taxation associated with capital expenses is applied in accordance with theSORP. In accordance with FRS 19 "Deferred tax", deferred taxation is providedin full on timing differences that result in an obligation at the balance sheetdate to pay more tax or a right to pay less tax, at a future date, at ratesexpected to apply when they crystallise based on current tax rates and law.Timing differences arise from the inclusion of items of income and expenditurein taxation computations in periods different from those in which they areincluded in the financial statements. Deferred tax assets are recognised to theextent that it is regarded as more likely than not that they will be recovered. The specific nature of taxation of venture capital trusts means that it isunlikely that any deferred tax will arise. The Directors have considered therequirements of FRS 19 and do not believe that any provision should be made. Performance incentive fee In the event that a performance incentive fee crystallises, the fee will beallocated between revenue and realised capital reserves based upon theproportion to which the calculation of the fee is attributable to revenue andcapital returns. Reserves Realised capital reserves The following are disclosed in this reserve: • gains and losses compared to cost on the realisation of investments; • expenses, together with the related taxation effect, charged in accordance with the above policies; • realised exchange differences of a capital nature; and • dividends paid to equity holders. Unrealised capital reserves The following are disclosed to this reserve: • increases and decreases in the valuation of investments against cost held at the period end; and • unrealised exchange differences of a capital nature. Special reserve This reserve is distributable and is primarily used for the cancellation of theCompany's share capital. Capital redemption reserve This reserve accounts for amounts by which the issued share capital isdiminished through the repurchase of the Company's own shares. Own shares held reserve This reserve accounts for amounts by which the distributable reserves of theCompany are diminished through the repurchase of the Company's own shares forTreasury. Share premium reserve This reserve accounts for the difference between the price paid for shares andthe nominal value of the shares less, issue costs and transfers to the specialreserve. Dividends In accordance with FRS 21 "Events after the balance sheet date", dividendsdeclared by the Company are accounted for in the period in which the dividendhas been paid or approved by shareholders in an Annual General Meeting. Foreign currency Transactions denominated in foreign currencies are recorded in the localcurrency at the actual exchange rates as at the date of transaction. Monetaryassets and liabilities denominated in foreign currencies at the year end arereported at the rates of exchange prevailing at the year end. Any gain or lossarising from a change in exchange rates subsequent to the date of thetransaction is included as an exchange gain or loss in the capital reserve or inthe revenue account depending on whether the gain or loss is of a capital orrevenue nature respectively. C Shares Until such time that C shares are converted into Ordinary shares in 2011, allinvestments and returns attributable to this class of share will be separatelyidentifiable from the existing Ordinary shares. All residual expenses will beallocated on the basis of total funds raised for each class of share. 3. Gains/(losses) on investments Year ended Year ended 31 December 2007 31 December 2006 Ordinary C Ordinary C Shares Shares Total Shares Shares Total £'000 £'000 £'000 £'000 £'000 £'000 Unrealised (losses)/gains oninvestments held at fair (711) (760) (1,471) (260) 190 (70)value through profit andloss accountUnrealised (impairments)/gains on investments held at (105) (30) (135) 13 22 35amortised costUnrealised (losses)/gainssub total (816) (790) (1,606) (247) 212 (35)Realised gains on 1,487 282 1,769 297 - 297investments held at fairvalue through profit andloss accountRealised impairments oninvestments held at - - - - - -amortised costRealised gains sub total 1,487 282 1,769 297 - 297Net movement on foreignexchange on investments hald 3 4 7 (42) 1 (41)at fair value through profitor loss accountCommission on purchase anddisposal on investments held (10) (13) (23) (11) (11) (22)at fair value through profitor loss account (7) (9) (16) (53) (10) (63) Total 664 (517) 147 (3) 202 199 Investments valued on amortised cost basis are unquoted loan stockinvestments. 4. Investment Year ended Year endedincome 31 December 2007 31 December 2006 Ordinary C Ordinary C Shares Shares Total Shares Shares Total £'000 £'000 £'000 £'000 £'000 £'000 Income recognised oninvestments held at fairvalue through profit andlossUK dividend income 17 73 90 8 - 8 Foreign investment income - - - 8 - 8 Management fees received 14 - 14 7 - 7 from equity investments Floating rate note interest - 1,037 1,037 - 889 889 Bank deposit interest 172 211 383 105 318 423 203 1,321 1,524 128 1,207 1,335 Income recognised oninvestments held atamortised costReturn on loan stock investments 729 643 1,372 704 115 819 932 1,964 2,896 832 1,322 2,154| Interest income earned on impaired investments at 31 December 2007 for Ordinaryshares amounted to £86,000 (2006: £46,000 ) and for C shares amounted to £32,000(2006: £nil). These investments are all held at amortised cost. 5. Tax charge/(credit) onordinary activities Ordinary Shares Year ended Year ended 31 December 2007 31 December 2006 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Return before taxation 738 324 1,062 658 (354) 304 Tax on profit at the standardrate of 30% 221 97 318 197 (106) 91Over accrual in previous year (2) - (2) 27 (8) 19 219 97 316 224 (114) 110 Factors affecting the chargeNon-taxable gains - (199) (199) - - - Tax attributable to capitalisedexpenses 99 (99) - 114 (114) - Expenses charged to capital (99) 99 - (114) 114 - Non-taxable income (5) - (5) (5) - (5) Consortium relief (56) - (56) - - - Adjustment for effectve rate oftax (6) 3 (3) - - - 152 (99) 53 219 (114) 105 C Shares Year ended Year ended 31 December 2007 31 December 2006 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Return before taxation 1,538 (1,242) 296 947 (536) 411 Tax on profit at the standardrate of 30% 461 (373) 88 284 (161) 123Over accrual in previous year (2) - (2) - - - 459 (373) 87 284 (161) 123 Factors affecting the chargeNon-taxable gains - 155 155 - (60) (60)Tax attributable to capitalisedexpenses 211 (211) - 221 (221) -Expenses charged to capital (211) 211 - (221) 221 -Non-taxable income (23) - (23) - - - Adjustment for effectve rate oftax (11) 7 (5) - - - 425 (211) 214 284 (221) 63 The tax charge for the year for Ordinary shares is lower than the standard rateof corporation tax of 30 per cent., and higher for C shares. The differences areexplained above. Notes (i) Venture Capital Trusts are not subject to corporation tax on capitalgains. (ii) Tax relief on expenses charged to capital has been determined byallocating tax relief to expenses by reference to the applicable corporation taxrate of 30 per cent. and allocating the relief between revenue and capital inaccordance with the SORP. (i) No deferred tax asset or liability has arisen in the year. 6. DividendsOrdinary shares Year ended 31 December 2007 Year ended 31 December 2006 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Dividend of 4.0p(capital) per share - - - - 550 550paid on 26 May 2006 Dividend of 4.0p(1.5p revenue and - - - 203 338 5412.5p capital) pershare paid on 3November 2006 Dividend of 4.0p(1.5p revenue and 204 337 541 - - -2.5p capital) pershare paid on 25 May2007 Dividend of 4.0p(2.0p revenue and 267 267 534 - - -2.0p capital) pershare paid on 2November 2007 471 604 1,075 203 888 1,091 C shares Year ended 31 December 2007 Year ended 31 December 2006 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Revenue dividend of0.5p per share paid - - - 177 - 177on 3 November 2006 Revenue dividend of1.0p per share paid 355 - 355 - - -on 25 May 2007 Revenue dividend of1.5p per share paid 532 - 532 - - -on 2 November 2007 887 - 887 177 - 177 In addition to the dividends summarised above, the Directors have declared afirst dividend of 4.0 pence per Ordinary share and 1.5 pence per C share to bepaid on 30 May 2008 to shareholders on the register at 2 May 2008. 7. Basic and diluted return per share Year ended Year ended 31 December 2007 31 December 2006 Revenue Capital Total Revenue Capital Total Ordinary shares (pence pershare) 4.4 3.2 7.6 3.2 (1.8) 1.4C shares (pence per share) 3.1 (2.9) 0.2 2.3 (1.1) 1.2 Ordinary shares Revenue return per Ordinary share is based upon the net revenue returnattributable to shareholders for the year of £586,000 (2006: £439,000) inrespect of the weighted average number of shares in issue during the year, being13,438,783 (2006: 13,661,733). Capital return per Ordinary share is based upon the net capital profitattributable to shareholders for the year of £423,000 (2006: loss £240,000) inrespect of the same weighted average number of shares as for the revenue returnabove. C shares Revenue return per C share is based upon the net revenue return attributable toshareholders for the year of £1,113,000 (2006: £663,000) in respect of theweighted average number of shares in issue during the year, being 35,479,122(2006: 35,479,122). Capital return per C share is based upon the net capital loss attributable toshareholders for the year of £1,031,000 (2006: loss £315,000) in respect of thesame weighted average number of shares as for the revenue return above. 8. Net asset value per share The net asset values per share at the year end calculated in accordance with theArticles of Association were as follows, based upon the shares in issue, lessthe treasury shares of 13,317,542 Ordinary Shares and 35,479,122 C Shares inissue at 31 December 2007, (2006: 13,534,404 Ordinary Shares and 35,479,122 CShares). 31 December 2007 31 December 2006 Ordinary C Ordinary C shares shares shares shares Net asset value per share attributable 114.1 92.7 114.4 94.9(pence) 9. Reconciliation of net return on ordinary activities before taxation to net cash inflow from operatingactivities Year ended Year ended 31 December 2007 31 December 2006 Ordinary C Ordinary C Shares Shares Shares Shares £'000 £'000 £'000 £'000 Revenue return on ordinary 738 1,538 658 947activities before taxationInvestment management fee (340) (725) (351) (738)charged to capitalMovement in accrued amortised (196) (202) (106) (88)loan stock interestDecrease/(increase) in debtors (12) 40 32 (180)(Decrease)/increase in creditors 10 33 (303) 279Intercompany account movement (100) 288 114 (114) Net cash inflow/(outflow) from 100 972 44 106operating activities 10. Post balance sheet events Since 31 December 2007 the Company has completed the following investments: • Investment in Blackbay Limited of £85,000 • Investment in Consolidated Communications Management Limited of £33,000 • Investment in Opta Sportsdata Limited of £625,000 • Investment in Rostima Limited of £138,000 • Sale of Abbey National FRN for £5,001,000 • Proposal of Dividend Reinvestment Scheme as described in the Chairman'sStatement 11. Related party transactions The Manager, Close Ventures Limited, is considered to be a related party byvirtue of the fact that it is party to a management contract from the Company.During the year, services of a total value of £1,426,000 (2006:£1,452,000) werepurchased by the Company from Close Ventures Limited. At the financial year end,the amount due to Close Ventures Limited disclosed as accruals and deferredincome was £347,000 (2006: £364,000). Buy-backs of Ordinary shares during the period were transacted throughWinterflood Securities Limited, a subsidiary of Close Brothers Group plc. Atotal of 216,862 shares were purchased for cancellation at an average price of99.4 pence per share. 12. Financial Information The information set out in this announcement does not constitute the Company'sstatutory accounts within the terms of Section 240 of the Companies Act 1985 forthe year ended 31 December 2007 and 31 December 2006, but is derived from thosestatutory accounts. Statutory accounts for the year ended 31December 2006 havebeen delivered to the Registrar of Companies and those for the year ended 31December 2007 will be delivered following the Company's Annual General Meeting.The auditors reported on those accounts; their report was unqualified and didnot contain a statement under Section 237(2) or (3) of the Companies Act 1985. Whilst the financial information included in this preliminary announcement hasbeen computed in accordance with United Kingdom Generally Accepted AccountingPractice (UK GAAP), this announcement does not itself contain sufficientinformation to comply with UK GAAP. The Company expect to publish full financialstatements that comply with UK GAAP. 13. Publication The full Report and Financial Statements is being sent to shareholders andcopies will be made available electronically at www.closeventures.co.uk. Thefull Report and Financial Statements will also be made available to the publicat the registered office of the Company, Companies House and via the FSA viewingfacility. For further information, please contact: Patrick ReeveClose Ventures Limited020 7422 7830 This information is provided by RNS The company news service from the London Stock Exchange