Coats Regulatory News (COA)

30 Apr 2008 17:44

Close Brothers Aim Vct PLC30 April 2008 CLOSE BROTHERS AIM VCT PLC ANNUAL RESULTS 30 April 2008 Preliminary announcement of the annual financial results for the twelve monthsto 29 February 2008. Copies of the full Report and Financial Statements can befound on www.closeventures.co.uk Close Brothers AIM VCT PLC (the "Company"), which invests in companies listed onthe Alternative Investment Market and PLUS, across a variety of sectors, todayannounces annual results for the year ended 29 February 2008. This announcementwas approved by the Board of Directors on 29 April 2008. Ordinary Shares D Shares Year to Year to Year to Year to 29 February 28 February 29 February 28 February 2008 2007 2008 2007Total return per share (pence) (22.80) 4.88 (10.23) 7.99Net dividend paid per share (pence) 5.00 4.20 5.00 3.30Net asset value per share (pence) 60.06 87.76 110.23 125.43Net assets (£million) 17.35 26.29 17.44 20.09 Shareholder value per share since launch: Ordinary Shares C Shares D Shares pence per share pence per share pence per share (subsequently converted to Ordinary shares)Total dividends paid during the period to 28 February 1999 1.88 - -Total dividends paid during the year to 29 February 2000 3.13 - -Total dividends paid during the year to 28 February 2001 37.25 - -Total dividends paid during the year to 28 February 2002 6.50 2.25 -Total dividends paid during the year to 28 February 2003 3.50 1.50 -Total dividends paid during the year to 28 February 2004 0.50 0.50 -Total dividends paid during the year to 28 February 2005 0.50 0.50 0.50Total dividends paid during the year to 28 February 2006 2.15 2.31 2.25Total dividends paid during the year to 28 February 2007 4.20 4.52 3.30Total dividends paid during the year to 29 February 2008 5.00 5.38 5.00Total dividends (capital and revenue) 64.61 16.96 11.05Net asset value 29 February 2008 60.06 64.65 110.23Total cumulative shareholder return at 29 February 2008 124.67 81.61 121.28 In addition to the above, the Directors have declared a dividend of 2.50 penceper Ordinary share (0.60 pence revenue and 1.90 pence paid out of realisedcapital gains) and 2.50 pence per D share, (0.60 pence revenue and 1.90 pencepaid out of realised capital gains) subject to the approval by HM Revenue &Customs. The record date and payment date of this dividend will be announced onthe London Stock Exchange RNS service. Chairman's statement In my Half-yearly statement last October, I noted that shares in largercompanies had recovered on the back of interest rate cuts in the US and the hopeof UK rates following suit. It remained to be seen whether this trend trickleddown to smaller companies. I am afraid not only has it not done so, but therecovery in larger company shares was short lived and their decline contributedto an even larger decline in the value of smaller companies. The second half of the year has continued in the same vein as that of the first,namely volatile stockmarkets which have particularly impacted the share pricesof smaller companies as appetite for risk has diminished. As a result I have toreport disappointing net asset value declines of 25.9 per cent. and 8.1 percent. (after adding back dividends paid of 5.00 pence per each class of share)for the Ordinary and D shares respectively for the year to 29 February 2008. Asat 29 February 2008 the total cumulative return in respect of the Ordinary and DShares was 124.67 pence and 121.28 pence per share respectively. Although thisdecline is disappointing it does help demonstrate the importance of our dividendphilosophy of attempting to maintain an annual dividend of at least 5.00 penceper Ordinary and D Share. The above performance needs to be placed into context. Although there is not aperfect comparable index the two most similar indices are the FTSE AIM Index andthe FTSE Small Cap (ex Investment Trusts). The former declined by 7.5 percent., reflecting its significant bias (30 per cent.) towards the oil and gas,and basic materials sectors which performed very well. The latter index, whichdoes not have the same bias, declined by 25.3 per cent during the year. During the second half, the D Share Portfolio met and exceeded its 70 per centqualifying level for investments. On merging with the Ordinary Shares, thecombined cover will be over 80 per cent giving some flexibility to take profitsin holdings to safeguard future dividend payments. The mid-market price of the Ordinary and D Shares declined by 35 per cent and 15per cent respectively during the year. This was despite our ongoing commitmentto manage as best we can the discount to net asset value at as close to a rangeof between 8 per cent to 10 per cent via the repurchase of shares. Performance The Investment Manager's report in the Report and Financial Statement givesfurther details of the market background and the reasons underlying theperformance of the Portfolios. Dividends Ordinary Shares Dividends paid during the financial year to 29 February 2008 totalled 5.00 penceper Ordinary Share (2007: 4.20 pence per share). In addition, the Board hasdeclared its first dividend of 2.50 pence per share (2007: 2.50 pence pershare). This dividend is subject to HM Revenue & Customs approval and therecord date and payment date of this dividend will be announced on the LondonStock Exchange RNS service. D shares Dividends paid during the financial year to 29 February 2008 totalled 5.00 penceper D Share (2007: 3.30 pence per share). In addition, the Board has declared afirst dividend of 2.50 pence per share (2007: 2.50 pence per share). Thisdividend is subject to HM Revenue & Customs approval and the record date andpayment date of this dividend will be announced on the London Stock Exchange RNSservice. Management of the discount Your Board continues to believe that it is in the best interest of allshareholders for it to manage the discount to net asset value at which theshares trade with a view to maintaining it as close to 8 per cent as possible.During the year under review your Board exercised its power to buy back shares.To this end we repurchased 432,825 Ordinary and 168,341 D Shares forcancellation and 638,813 Ordinary shares and 28,047 D shares into Treasury,giving your Board greater flexibility in regard to future re-issuance to meetpotential demand. I would like again to remind shareholders who wish to sell tocontact the Investment Manager at Close Investments Limited, in the interests ofachieving a reasonable price. Revised arrangements to merge the Ordinary Shares Fund and the D Shares Fund I wrote to shareholders on 25 March 2008 explaining the reason for the conveningof the Extraordinary General Meeting and the separate class meetings, and theBoard's proposal to review the arrangements of the merger between the OrdinaryShares Fund and the D Shares Fund. The D Shares were issued in 2004 and 2005 onthe basis that they would be merged and the D Shares would be converted intoOrdinary Shares with effect from 31 May 2008 calculated by reference to therespective NAVs of the Ordinary Shares and the D Shares as at the close ofbusiness on 29 February 2008. The Directors believed that it would be moreappropriate to effect the merging of the two share classes by converting theOrdinary Shares into D Shares and then redesignating all of the D Shares intonew Ordinary Shares ("New Shares"). The necessary resolutions to approve your board's proposal were passed at theExtraordinary General Meeting and the separate class meeting on 22 April 2008.As a result, the Ordinary shares will convert into D shares at a ratio of 0.5448D shares for each Ordinary share, with effect from 31 May 2008. All shares ofthe Company will be immediately renamed Ordinary shares. Share certificates inrespect of all shares are expected to be posted on 9 June 2008. Risks and Uncertainties As required under the new Listing Rules under which your Company operates, weare required to comment on the potential risks and uncertainties which couldhave a material impact over the Company's performance. The key risk derivesfrom the need to maintain the HM Revenue & Customs regulations requiring 70 percent of your Company to be invested in qualifying holdings. Although the UKeconomy may still be growing, it could be affected by the current unease in thefinancial and property markets. While this could give rise to additionalinvestment opportunities at lower prices, a downturn could affect existingcompanies' trading prospects and share prices. Proposed change to the Company's Articles of Association The new provisions of the Companies Act 2006 include the requirement forDirectors to avoid actual or potential conflicts of interest with effect from 1October 2008. The Directors are proposing a resolution to allow Directors toapprove actual or potential conflict situations, should it be in the Company'sbest interests to do so, and to allow conflicts of interest to be dealt with ina similar way to the current position. Outlook The year under review has been an exceptionally difficult time for financialassets and smaller companies in particular. There has been a collapse inconfidence amongst financial institutions and until this is restored marketswill remain fragile. Thus, despite the generally good trading results from manysmaller companies, their share prices have been substantially de-rated comparedwith the FTSE 100 companies and with the high level of risk aversion nowparamount in investment decisions, it is possible that small companies may stayout of favour for a while. However, many of the investments in both portfolioscontinue to make good underlying trading progress and this should augur well forthe future once confidence returns to the market. Michael ReeveChairman30 April 2008 Income Statement for the year ended 29 February 2008 Ordinary Shares D Shares Total Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Losses on investments - (6,436) (6,436) - (1,586) (1,586) - (8,022) (8,022)Investment income 369 - 369 494 - 494 863 - 863Investment management fees (133) (398) (531) (114) (341) (455) (247) (739) (986)Other expenses (114) - (114) (75) - (75) (189) - (189) Return/(loss) on Ordinary activities before tax 122 (6,834) (6,712) 305 (1,927) (1,622) 427 (8,761) (8,334)Tax credit/(charge)on ordinary activities 3 - 3 (59) 56 (3) (56) 56 -Return/(loss) attributable to equityshareholders 125 (6,834) (6,709) 246 (1,871) (1,625) 371 (8,705) (8,334) Basic and diluted return per share(pence) 0.42 (23.22) (22.80) 1.55 (11.78) (10.23) All of the Company's activities derive from continuing operations. The Company has no recognised gains or losses other than the results for theyear as set out above, accordingly a Statement of Total Recognised Gains orLosses is not required. The total column of the Income Statement represents the profit and loss accountof the Company. The supplementary revenue return and capital return columns havebeen prepared in accordance with the Association of Investment Companies'Statement of Recommended Practice. Income Statement For the year ended 28 February 2007 Ordinary Shares D Shares Total Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments - 1,828 1,828 - 1,335 1,335 - 3,163 3,163Investment income 387 - 387 493 - 493 880 - 880Investment management fees (149) (448) (597) (113) (338) (451) (262) (786) (1,048)Other expenses (128) - (128) (89) - (89) (217) - (217) Return/(loss) on Ordinary activities before tax 110 1,380 1,490 291 997 1,288 401 2,377 2,778Tax credit/(charge)on ordinary activities 6 - 6 (60) 54 (6) (54) 54 -Return/(loss) attributable to equity shareholders 116 1,380 1,496 231 1,051 1,282 347 2,431 2,778 Basic and diluted return per share (pence) 0.38 4.50 4.88 1.44 6.55 7.99 All of the Company's activities derive from continuing operations. The Company has no recognised gains or losses other than the results for theyear as set out above, accordingly a Statement of Total Recognised Gains orLosses is not required. The total column of the Income Statement represents the profit and loss accountof the Company. The supplementary revenue return and capital return columns havebeen prepared in accordance with the Association of Investment Companies'Statement of Recommended Practice. Balance SheetAs at 29 February 2008 Ordinary shares D Shares Total £'000 £'000 £'000Fixed asset investmentsInvestments at fair value through profit or loss 16,071 15,950 32,021 Current assetsDebtors 127 115 242Cash at bank 1,211 1,432 2,643 1,338 1,547 2,885 Creditors: amounts falling due within one year (63) (60) (123) Net current assets 1,275 1,487 2,762 Net assets 17,346 17,437 34,783 Capital and reservesCalled up share capital 14,762 7,923 22,685Share premium 1,450 39 1,489Special reserve 7,311 9,100 16,411Capital redemption reserve 3,569 159 3,728Realised capital reserve (7,508) 459 (7,049)Unrealised capital reserve (2,003) (316) (2,319)Own shares held in treasury (411) (28) (439)Revenue reserve 176 101 277 Shareholders' funds 17,346 17,437 34,783Net asset value per share (pence) 60.06 110.23 Balance Sheet As at 28 February 2007 Ordinary shares D Shares Total £'000 £'000 £'000Fixed asset investmentsInvestments at fair value through profit or loss 25,031 17,177 42,208Current assetsDebtors 95 81 176Cash at bank 1,211 2,895 4,106 1,306 2,976 4,282 Creditors: amounts falling due within one year (49) (65) (114) Net current assets 1,257 2,911 4,168 Net assets 26,288 20,088 46,376 Capital and reservesCalled up share capital 14,978 8,008 22,986Share premium 1,450 39 1,489Special reserve 7,665 9,304 16,969Capital redemption reserve 3,353 74 3,427Realised capital reserve (4,055) 277 (3,778)Unrealised capital reserve 2,846 2,253 5,099Revenue reserve 51 133 184 Shareholders' funds 26,288 20,088 46,376Net asset value per share (pence) 87.76 125.43 Reconciliation of movements in shareholders' fundsFor the year ended 29 February 2008Ordinary Shares Called up Share Special Capital Realised Unrealised Own Revenue Total share premium reserve redemption capital capital shares reserve capital reserve reserve reserve held in Treasury £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 As at 28 February 2007 14,978 1,450 7,665 3,353 (4,055) 2,846 - 51 26,288Net return after taxation - - - - (1,985) (4,849) - 125 (6,709)Dividends paid to equityholders - - - - (1,468) - - - (1,468)Shares purchased forcancellation (216) - (354) 216 - - - - (354)Shares purchased to be heldin Treasury - - - - - - (411) - (411)As at 29 February 2008 14,762 1,450 7,311 3,569 (7,508) (2,003) (411) 176 17,346 As at 28 February 2006 15,561 1,450 8,547 2,770 (3,231) 1,806 - 57 26,960Net return after taxation - - - - 340 1,040 - 116 1,496Dividends paid to equity - - - - (1,164) - - (122) (1,286)holdersShares purchased for (583) - (882) 583 - - - - (882)cancellationAs at 28 February 2007 14,978 1,450 7,665 3,353 (4,055) 2,846 - 51 26,288 Reconciliation of movements in shareholders' fundsFor the year ended 28 February 2007 D Shares Called up Share Special Capital Realised Unrealised Own shares Revenue Total share premium reserve redemption capital capital held in reserve capital reserve reserve reserve Treasury £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 As at 28 February 2007 8,008 39 9,304 74 277 2,253 - 133 20,088Net return after taxation - - - - 698 (2,569) - 246 (1,625)Dividends paid to equityholders - - - - (516) - - (278) (794)Shares purchased forcancellation (85) - (204) 85 - - - - (204)Shares purchased to be heldin Treasury - - - - - - (28) - (28)As at 29 February 2008 7,923 39 9,100 159 459 (316) (28) 101 17,437 As at 28 February 2006 8,040 39 9,373 42 (277) 1,965 - 223 19,405 Net return after taxation - - - - 763 288 - 231 1,282 Dividends paid to equity - - - - (209) - - (321 (530)holders Shares purchased for (32) - (69) 32 - - - - (69)cancellation As at 28 February 2007 8,008 39 9,304 74 277 2,253 - 133 20,088 Cash Flow Statementfor the year ended 29 February 2008 Ordinary Shares D Shares Total £'000 £'000 £'000Operating activitiesDividend income received 145 58 203 Investment income received 175 347 522Deposit interest received 67 109 176Investment management fees paid (535) (438) (973)Other cash payments (99) (68) (167) Intercompany account movement 17 (17) -Net cash outflow from operating activities (230) (9) (239) Capital expenditure and financial investmentPurchase of qualifying investments (1,384) (4,878) (6,262) Purchase of non-qualifying investments (5) (92) (97) Disposal of qualifying investments 1,841 1,823 3,664 Disposal of non-qualifying investments 2,006 2,720 4,726 Net cash inflow/(outflow) from capital 2,458 (427) 2,031expenditure and financial investment Equity dividends paidRevenue dividends paid - (278) (278) Capital dividends paid (1,468) (516) (1,984) (1,468) (794) (2,262) Net cash inflow/(outflow) before financing 760 (1,230) (470) FinancingCancellation of shares (355) (205) (560)Own shares held in Treasury (405) (28) (433)Net cash outflow from financing (760) (233) (993)Decrease in cash in the year - (1,463) (1,463) Cash Flow Statementfor the year ended 28 February 2007 Ordinary Shares D Shares Total £'000 £'000 £'000 Operating activitiesDividend income received 126 27 153 Investment income received 200 340 540Other income received 7 - 7Deposit interest received 47 92 139Investment management fees paid (598) (496) (1,094)Other cash payments (131) (89) (220) Intercompany account movement 997 (997) -Net cash inflow/(outflow) from operating 648 (1,123) (475)activities Capital expenditure and financial investmentPurchase of qualifying investments (2,228) (3,322) (5,550) Purchase of non-qualifying investments (102) - (102) Disposal of qualifying investments 4,460 7,793 12,253 Disposal of non-qualifying investments 181 - 181 Net cash inflow from capital expenditure and 2,311 4,471 6.,782financial investment Equity dividends paidRevenue dividends paid (122) (321) (443) Capital dividends paid (1,164) (209) (1,373) (1,286) (530) (1,816) Net cash inflow before financing 1,673 2,818 4,491 FinancingCancellation of shares (1,186) (69) (1,255)Net cash outflow from financing (1,186) (69) (1,255)Increase in cash in the year 487 2,749 3,236 Notes to the financial statements for the year ended 29 February 2008 The principal activity of the Company is that of a Venture Capital Trust. It hasbeen approved by HM Revenue & Customs as a Venture Capital Trust under Part 6 ofthe Income Taxes Act 2007. 1. About the Investment Manager Close Brothers AIM VCT PLC is managed by Close Investments Limited. CloseInvestments Limited is authorised and regulated by the Financial ServicesAuthority and is a subsidiary of Close Brothers Group plc. 2. Accounting convention The financial statements have been prepared under the historical costconvention, modified by the revaluation of certain investments, in accordancewith applicable United Kingdom law and Accounting Standards, and with theStatement 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 the current and prior years. 3. Accounting policies The financial statements are prepared in accordance with United Kingdomapplicable accounting standards. The particular accounting policies aredescribed below: Investments In accordance with Financial Reporting Standard ("FRS") 26 "FinancialInstruments: Measurement", equity investments, units in an authorised UK smallercompany unit trust and debt securities are designated as fair value throughprofit or loss ("FVTPL"). Qualifying investments, non-qualifying AIM investments and non-qualifyinglisted investments are valued at either the closing bid prices or last tradedprice at the end of the accounting period. The total column of the IncomeStatement represents the Company's profit and loss account. Fair value movementson equity investments and gains and losses arising on the disposal ofinvestments are reflected in the capital column of the Income Statement inaccordance with the AITC's SORP. Investments are recognised as financial assets on legal completion of theinvestment contract and are de-recognised on legal completion of the sale of aninvestment. The Directors are conscious of the fact that because shares are traded on AIM,this does not guarantee their liquidity. The nature of AIM investments is suchthat the prices can be volatile and realisation may not achieve current bookvalue, especially when such a sale represents a significant proportion of thatcompany's market capital. Nevertheless, on the grounds that the investments arenot intended for immediate realisation, the Directors regard bid or last tradedprices as the most objective and appropriate method of valuation. Investment income Dividends receivable on quoted equity are taken to revenue on an ex-dividendbasis. Returns on listed debt securities and cash on deposit are recognised onan accruals basis using the interest rate applicable to the instrument ordeposit at the time. Investment management fees and other expenses All expenses are accounted for on an accruals basis. Expenses are chargedthrough the revenue account except as follows: • expenses which are incidental to the acquisition of aninvestment are included within the cost of the investment; • expenses which are incidental to the disposal of an investmentare deducted from the disposal proceeds of the investment; and • expenses are allocated between capital and revenue where aconnection with maintenance or enhancement of the value of the investments heldcan be demonstrated. In respect of the Investment Manager's fee, 75 per cent hasbeen allocated to the realised capital reserve and 25 per cent to revenue in theIncome Statement. Performance incentive In the event that a performance fee crystallises, 100 per cent of the fee willbe allocated to the realised capital reserve, in order to reflect the Director'sexpected long-term view of the nature of the investments return of the Company. Taxation Taxation is applied on a current basis in accordance with FRS 16 "Current Tax",and is based on the return before taxation for the year. Taxation associatedwith capitalised expenses is applied in accordance with the SORP. In accordancewith FRS 19 "Deferred Tax", deferred taxation is provided in full on timingdifferences that result in an obligation at the Balance Sheet date to pay moretax or a right to pay less tax, at a future date, at rates expected to applywhen they crystallise based on current tax rates and law. Timing differencesarise from the inclusion of items of income and expenditure in taxationcomputations in periods different from those in which they are included in thefinancial statements. Deferred tax assets are recognised to the extent that itis 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. Reserves The realised capital reserve contains gains and losses on the realisation ofinvestments, capital dividends paid to shareholders and investment managementfees allocated to the capital reserve and taxation thereon. The unrealisedcapital reserve contains increases and decreases in the valuation of investmentsheld at the year end. The special reserve is distributable and is primarily usedfor the cancellation of the Company's share capital. The capital redemptionreserve accounts for amounts by which the issued share capital is diminishedthrough the repurchase of the Company's own shares. 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 dividend ispaid or approved by shareholders at an Annual General Meeting. D shares Until such time that Ordinary shares are converted into D shares in May 2008,all investments and returns attributable to this class of share will beseparately identifiable from existing Ordinary shares. All residual expenseswill be allocated on the basis of total funds raised for each class of share. 4. (Losses)/gains on Investments Year to 29 February 2008 Year to 28 February 2007 Ordinary D Ordinary D Shares Shares Total Shares Shares Total £'000 £'000 £'000 £'000 £'000 £'000 Realised (losses)/gains on disposals (1,587) 983 (604) 788 1,047 1,835(Decrease)/increase in unrealised (4,849) (2,569) (7,418) 1,040 288 1,328revaluationTotal (losses)/gains for the year (6,436) (1,586) (8,022) 1,828 1,335 3,163 5. Investment Income Year to 29 February 2008 Year to 28 February 2007 Ordinary D Ordinary D Shares Shares Total Shares Shares Total £'000 £'000 £'000 £'000 £'000 £'000Income from investmentsUK franked investment dividend income 135 62 197 136 30 166UK unfranked investment income 158 330 488 197 349 546 293 392 685 333 379 712Other incomeBank deposit interest 76 102 178 47 114 161Other income - - - 7 - 7Total income 369 494 863 387 493 880 All of the Company's income is derived from operations based in the UnitedKingdom. 6. Tax (credit)/charge on ordinary activities Ordinary Shares D Shares Year to 29 February 2008 Year to 29 February 2008 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000UK corporation tax (3) - (3) 59 - 59Tax attributable to capital expenses - - - - (56) (56) (3) - (3) 59 (56) 3 Ordinary Shares D Shares Year to 29 February 2007 Year to 29 February 2007 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000UK corporation tax (6) - (6) 60 - 60Tax attributable to capital expenses - - - - (54) (54) (6) - (6) 60 (54) 6 The standard rate of tax for the year, based on the UK standard rate ofcorporation tax is 30 per cent (2007: 30 per cent). The actual tax charge forthe current and previous year differs from the amount resulting from applyingthe standard rate, for the reasons set out in the following reconciliation. Ordinary Shares D Shares Year to 29 February 2008 Year to 29 February 2008 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000Return on ordinary activities before taxation 122 (6,834) (6,712) 305 (1,928) (1,623)Tax on profit at the standard rate of 30% 37 (2,050) (2,013) 91 (578) (487)Factors affecting the chargeNon-taxable income (41) - (41) (19) - (19)Marginal relief adjustment 1 - 1 (13) - (13) Excess management expenses - 119 119 - 46 46 Non-taxable losses on investments - 1,931 1,931 - 476 476 Total (3) - (3) 59 (56) 3 Ordinary Shares D Shares Year to 29 February 2007 Year to 29 February 2007 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000Return on ordinary activities before taxation 110 1,380 1,490 291 997 1,288Tax on profit at the standard rate of 30% 33 414 447 87 299 386 Factors affecting the chargeNon-taxable income (41) - (41) (9) - (9) Marginal relief adjustment 2 - 2 (18) 47 29 Excess management expenses - 134 134 - - -Non-taxable losses on investments - (548) (548) - (400) (400)Total (6) - (6) 60 (54) 6 (i) Venture Capital Trusts are not subject to corporation tax on capital gains. (ii) Tax relief on expenses charged to capital has been determined byallocating tax relief to all expenses proportionately by reference to theapplicable corporation tax rate of 30 per cent (2007: 30 per cent) andallocating the relief in accordance with the SORP. (ii) No deferred tax asset liability has arisen in the year. (iv) The Company has not recognised a deferred tax asset ontiming differences relating to the management expenses going forward due to theuncertainty surrounding its recovery. The amount of this unrecognised asset is£561,000 (2007: £439,000). The asset would be recovered if the Company madesufficient taxable gains in the future to utilise these losses. 7. Dividends Year to 29 February 2008 Year to 29 February 2007 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000Dividends paid on equity shares:- Dividends of 5.00 pence per Ordinary Share(2007: 4.20 pence) paid August and December 2007 - 1,468 1,468 122 1,164 1,286 - Dividends of 5.00 pence per D Share(2007: 3.30 pence) paid August and December 2007 278 516 794 321 209 530 278 1,984 2,262 443 1,373 1,816 In addition to the above dividends the Board has declared the following firstdividend for the year ended 28 February 2009: - 2.50 pence per Ordinary Share (comprising 0.60 pence to be paid out of revenueand 1.90 pence to be paid out of realised capital gains) - 2.50 pence per D Share (comprising 0.60 pence to be paid out of revenue and1.90 pence to be paid out of realised capital gains) In accordance with FRS 21 these dividends have not been accrued as a liabilityin these financial statements. The dividends are subject to HM Revenue &Customs' approval. 8. Return per share Year to 29 February 2008 Year to 29 February 2007 Revenue Capital Revenue CapitalBasic (pence per share)- Ordinary Shares 0.42 (23.22) 0.38 4.50- D Shares 1.55 (11.78) 1.44 6.55 Ordinary Shares The revenue return per Ordinary Share is based on the revenue return on ordinaryactivities after taxation of £125,000 (2007: £116,000), whilst the capitalreturn is based on the capital loss on ordinary activities after taxation of £(6,834,000) (2007: profit £1,380,000). This is in respect of 29,426,743 OrdinaryShares (2007: 30,655,972 shares), being the weighted average number of Ordinaryshares in issue during the year. There are no dilutive elements and hence the basic return per share is the sameas the diluted return per share. D Shares The revenue return per D Share is based on the revenue return on ordinaryactivities after taxation of £246,000 (2007: £231,000), whilst the capitalreturn is based on the capital loss on ordinary activities after taxation of £(1,872,000) (2007: profit £1,051,000). This is in respect of 15,882,684 D Shares(2007: 16,051,466 shares), being the weighted average number of D shares inissue during the year. There are no dilutive elements and hence the basic return per share is the sameas the diluted return per share. 9. Called up share capital 29 February 2008 29 February 2007 £'000 £'000Authorised:45,000,000 (2007: 45,000,000) Ordinary Shares of 50 pence 22,500 22,500each25,000,000 (2007: 25,000,000) D Shares of 50 pence each 12,500 12,500 35,000 35,000 Allotted, called up and fully paid (including Treasuryshares)29,522,615 (2007: 29,955,440) Ordinary Shares of 50 pence each 14,762 14,97815,846,847 (2007: 16,015,183) D Shares of 50 pence each 7,923 8,008 22,685 22,986 All classes of shares rank pari passu as to rights to attend and vote at anygeneral meeting of the Company. The rights of members to receive dividends is derived from the net incomeattributable to the net assets of each class of share. The capital and assets of the Company shall on winding up, prior to theconversion of each class of shares, be divided amongst the holders of each classof share pro rata according to their shareholding. During the year the Company purchased for cancellation 432,825 Ordinary Sharesand 168,341 D shares at a cost of £353,878 and £204,767 respectively. Thisrepresented 1.44 per cent of the Ordinary Shares and 1.05 per cent of the DShares in issue at 28 February 2007. 10. Net asset value per share Ordinary Shares Net asset value per share is based on net assets attributable to Ordinaryshareholders of £17,346,000 (2007: £26,288,000) and on 28,883,802 (2007:29,955,440) Ordinary shares in issue, excluding shares held in Treasury, at theyear end. D Shares Net asset value per share is based on net assets attributable to D shareholdersof £17,437,000 (2007: £20,088,000) and 15,818,800 (2007: 16,015,188) D shares inissue, excluding shares held in Treasury, at the year end. 11. Reconciliation of cash (outflow)/inflow from operating activities 29 February 2008 29 February 2007 Ordinary D Ordinary D Shares Shares Total Shares Shares Total £'000 £'000 £'000 £'000 £'000 £'000 Net revenue before finance costs and taxation 122 305 427 110 291 401Investment management fee charged to capital (398) (341) (739) (448) (338) (786)Decrease/ (increase) in operating debtors 16 19 35 (9) (33) (42)Increase/ (decrease) in operating creditors 13 25 38 (2) (46) (48)Intercompany account movement 17 (17) - 997 (997) -Net cash (outflow)/inflow from operating (230) (9) (239) 648 (1,123) (475)activities 12. Related party transactions Close Investments Limited, as Investment Manager of the Company is considered tobe a related party by virtue of its management contract with the Company. Duringthe year, services with a total value of £986,000 were purchased by the Companyfrom Close Investments Limited. At the financial year end, the amount due toClose Investments Limited disclosed under creditors was £35,000. As at 29 February 2008 and the date of this announcement, Close InvestmentsLimited held 7,050 Ordinary Shares and 8,264 D Shares in the Company. Buybacks of shares for cancellation during the year were transacted throughWinterflood Securities Limited, a subsidiary of Close Brothers Group plc, theultimate parent company of the Investment Manager, Close Investments Limited. Atotal of 331,189 Ordinary Shares and 164,754 D Shares were purchased at a costof £270,421 and £199,286 respectively. The average price paid was 82 pence perOrdinary share and 121 pence per D share. Buybacks of shares to be held in Treasury were also transacted throughWinterflood Securities Limited. A total of 508,512 Ordinary shares and 28,047 DShares were purchased at a cost of £331,815 and £27,741 respectively. Theaverage price paid was 65 pence per Ordinary share and 99 pence per D share. 13. Post balance sheet events Conversion of Ordinary shares into D shares At an Extraordinary General Meeting and separate class meetings held on 22 April2008, shareholders approved extraordinary resolutions to revise the mergerarrangement. The revised arrangements made to the Articles of Association willmerge the two share classes by converting the Ordinary Shares into D Shares ("the Conversion"), at a ratio of 0.5448 D shares for each Ordinary share, andthen redesignating all of the D Shares into new Ordinary Shares ("New Shares")on 31 May 2008. Since 29 February 2008 the Company has completed the following investments: • Invested £2,000 in Pressure Technologies plc Since 29 February 2008 the Company has completed the following disposals: • Tanfield Group plc for proceeds of £413,000 • Freedom4 Communications plc for proceeds of £486,000 14. 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 29 February 2008 and 28 February 2007, and is unaudited. Theinformation for the year ended 28 February 2007 is derived from the statutoryaccounts for the financial year, which have been delivered to the Registrar ofCompanies. The auditors reported on those accounts; their report was unqualifiedand did not contain a statement under Section 237(2) or (3) of the Companies Act1985. 15. 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: Andrew Buchanan / Kate Tidbury Karen WaggClose Investments Limited Polhill CommunicationsTel: 020 7426 4000 Tel: 020 7655 0540 This information is provided by RNS The company news service from the London Stock Exchange