Foresight Technology Regulatory News (FTV)

23 Sep 2005 17:54

Foresight Technology VCT PLC23 September 2005 FORESIGHT TECHNOLOGY VCT PLC PRELIMINARY ANNOUNCEMENT OF RESULTS CHAIRMAN'S STATEMENT Introduction I have pleasure in announcing the Interim Results for the period ended 30th June2005. The results are set out below. Overall, the Ordinary Shares fund witnessed a fall in net asset value from 76.6pper Ordinary Share to 59.45p per Ordinary Share (22.4%) during the six monthsunder review, predominantly as a result of a fall in the value of YooMedia plc,which is described in further detail below. The "C" Shares fund's net assetvalue remained stable during the period at 90.37p per "C" Share on 30 June 2005compared to 93.91p (restated) per "C" Share on 31 December 2004. This includesthe reduction in net asset value of 2.1p per "C" Share as a result of the moveto value quoted stocks at bid price as opposed to mid-market value in accordancewith new accounting standards (FRS 25 and FRS 26). On 20 July 2005 Oxonica plclisted on the Aim Market, which resulted in a significant uplift to the "C"shares portfolio. As I have previously indicated, a number of the portfolio companies arebenefiting from improved market conditions. We have seen significant increasesin revenues for companies in markets as diverse as anti-blast materials andenvironmentally beneficial fuel additives, interactive TV and personalnavigation, IT-systems migration and electron-beam welding. Partly as a result of these trends, corporate activity has been on the increasewith a revival of enthusiasm for flotations and company mergers andacquisitions. During the period under review and following the period end anumber of our unquoted holdings have either been the subject of initial publicofferings (IPOs) to the AIM Market or have been the subject of preliminaryapproaches from potential purchasers or merger partners. The five new investments in this period show the characteristic diversity ofForesight investments across a range of growth markets where technology isimportant. It also represents the spread in stage of investment from early stageto well-established businesses. Typical of the early stage companies isNanotecture Group plc, which is just beginning to exploit far-reachingintellectual property in the nano-scale engineering of materials. Nanotecture'stechnology could enable better battery performance for mobile phones andefficient filtering of viruses from water. At the opposite end of the scale isCovion Holdings Limited, a successful facilities management business with morethan £10 million in annual revenues. Foresight looks for high-growth markets andseeks out businesses with the potential to become market leaders. alwaysOn GroupLimited illustrates this philosophy, being at the forefront of the provision ofnew telecom services based on "Voice over Internet Protocol" to UK businesses.Similarly, TheSkillsMarket Limited is uniquely positioned at the nexus of onlineand offline recruitment. It provides an efficient link between candidates,agencies and jobs by using the internet and word-recognition technology.Leading technology is often linked to centres of excellence such as the Europeanaerospace industry which has created an exciting prospect for High IntegritySolutions Limited. The company has designed and developed a sophisticatedsoftware tool, which improves the productivity of software engineers developinglarge software projects and is focused primarily on the aerospace sector. While we are enthusiastic about the prospects for these new investments and forother holdings in the portfolio it is important to note that a number of themare in the early stage of their development and therefore not without risk. Interim Results The results for the period from 1st January 2005 to 30th June 2005 are set outbelow. The net asset value per Ordinary Share as at 30th June 2005 was 59.45p(31 December 2004: 76.6p). The total return (after tax) attributable to OrdinaryShareholders was a loss of 15.13p (31 December 2004 : 51.88p), mainly due tofalls in the share prices of YooMedia plc and Telecom plus plc. YooMedia hassubsequently seen a moderate increase in its share price. With regards to theholders of "C" Shares, the net asset value per "C" Share as at 30th June 2005was 90.37p (31 December 2004: 93.91p restated) and the attributable return was aloss of 2.48p per "C" Share (31December 2004: gain of 26.95p). Ordinary Shares fund The last year has seen the transformation of YooMedia, as a result of a numberof acquisitions, from a small business with revenues of less than £1 million toa major participant in its market with revenues of more than £20 million.However, following a disappointing trading statement, the share price hasperformed poorly falling from 17p as at 31st December 2004 to 6p as at 30th June2005. This resulted in a net decrease of approximately £2.1 million in thevalue of the Ordinary Shares fund. During the period five new investments were made in TheSkillsMarket Limited(£300,000), Nanotecture Group plc (£300,000), Covion Holdings Limited(£300,000), High Integrity Solutions Limited (£225,000) and alwaysON GroupLimited (£300,000). "C" Shares fund The Board is pleased with recent progress made within the "C" Share portfoliowhich is driven by the valuations and prospects of several of the investeecompanies. Oxonica plc, which engineers the properties of materials at thenano-scale for application in fuel additives, UV protection and other products,listed on the AIM market on 20 July 2005. Oxonica, we believe, is the onlyEuropean pure-play nanotechnology company listed on AIM. Demand has beenencouraging for the company's products and Stagecoach is now using its fueladditive product throughout its UK and New Zealand bus fleets. Furthermore,Boots plc has incorporated Oxonica's UV protection additive into a sunscreenproduct, which is currently available in its stores nationwide. The company'splacing on AIM was at an initial price of 95.8p per share and following positiveinitial trading the share price (mid-market) at 20 September 2005 was £1.65,which represents an uplift of £7.0 million on our investment cost. Additionally, Sarantel Group plc listed on the AIM market on 2nd March 2005raising a total of £18 million to fund its ongoing expansion. Its miniatureantennae are used in mobile phones and personal digital assistants offeringlocation based services through navigation satellites. The company saw its salesquadruple in the year to 30th September 2004 and expects further growth duringthe current year. After some initial volatility, both upwards and downwards,the share price has now settled down following the company's recent announcementregarding the resolution of its manufacturing capacity issues. SmartFOCUS Group plc has performed well since listing on the AIM market duringOctober 2004. In May the company announced a very encouraging trading update,including a recent contract signing worth in excess of £800,000 and alsoreported strong growth in its new managed services offering. This was followedin July by the announcement of an acquisition and by a profitable tradingstatement for the first half of the year which was in line with the company'sexpectations. The share price increased by approximately 50% during the periodunder review. Improving trading conditions at both Aquasium Technology Limited and CamwoodLimited have seen a rise in profits at both companies, which has resulted in asignificant improvement in the valuations of both of these portfolio companies.At the same time we have reduced the valuation of our investments in BroadreachNetworks Limited and Broadreach Train Services Limited. This reflects a moredifficult trading outlook for both businesses. In addition to several follow-on funding rounds in existing investee companies,new investments were made, alongside the Ordinary Shares fund, inTheSkillsMarket Limited (£650,000), Nanotecture Group plc (£700,000), CovionHoldings Limited (£700,000) and High Integrity Solutions Limited (£525,000).Venture capital investments now represent 93% of total net assets and for thetime being the "C" Shares fund is not seeking new investments. Foresight Venture Partners continue to receive a steady flow of new investmentopportunities and is reviewing a number of potential investments as well asconsidering additional commitments to existing portfolio companies. Althoughdifficult to forecast with any accuracy, we are hopeful that as a result of theimproved stock market conditions and increased corporate activity there may befurther liquidity opportunities within the portfolio during the year. Details of investments made in the Ordinary and "C" Share funds during theperiod are given below. Valuation Policy The investments held by the Company that are not quoted on AIM, OFEX or theLondon Stock Exchange have been valued in accordance with the ValuationGuidelines issued by the British Venture Capital Association ("BVCA") underwhich unquoted investments are not normally revalued above cost for at least 12months after the date of acquisition and thereafter at "fair value". Quotedinvestments and investments traded on AIM and OFEX are stated at the bid priceas at 30th June 2005. The move from mid-market prices to bid prices, as a resultof the introduction of new accounting standards, has resulted in a reduction innet assets of approximately £144,000 (0.9p per Ordinary Share) in the OrdinaryShares fund and £757,000 (2.1p per "C" Share) in the "C" Shares fund. Theportfolio valuations are prepared by Foresight Venture Partners and are subjectto approval by the Board. Dividend Investment Scheme and Share Buybacks During the period, the Company issued 11,701 "C" Shares under the dividendinvestment scheme raising approximately £11,000 in aggregate. As part of the Company's active buyback programme, 344,534 Ordinary Shares werepurchased for cancellation at an approximate cost of £217,000 and at anapproximate discount to NAV of 10%. Furthermore, 910,000 "C" Shares werepurchased for cancellation at an approximate cost of £810,000, also at anapproximate discount to NAV of 10%. Peter Dicks, Chairman THE VENTURE CAPITAL FUNDS Foresight Venture Partners advise the Company in respect of investments madewithin the Ordinary Shares fund and the "C" Shares fund. During the period ended30 June 2005 two follow-on investments were made by the Ordinary Shares fund ata cost of £274,048 and five new investments at a cost of £1,425,000. In additionfive further follow-on investments were made by the "C" Shares fund at a cost of£811,527 and four new investments at a cost of £2,575,000. In accordance withthe BVCA guidelines, all investments are held at 'fair value' unless this cannotbe reliably measured, in such cases an explanation has been given in theindividual company narratives. No discounts have been applied to the quotedinvestments which are valued at bid price, in line with generally acceptedpractice in the venture capital market. The investment portfolio of both fundsas at 30 June 2005 is detailed below. ORDINARY SHARES FUND Actimax plc Supplies digital telecommunications systems to small and medium sized customers.The company installs complex computer and telephone combined systems usingcomponents from suppliers such as Ascom, Alcatel, Cisco and Intertel. Thecompany won the Best Small Business, Essex Business Awards 2004. The OrdinaryShares fund holds 300,868 shares in the company. Results from the latest audited accounts for the period ended 31 December 2004:sales £3,020,867, profit before tax £149,588, retained profit £142,893, netliabilities £123,770. Dates of Amount Invested Valuation Valuation % Equity/ % of Ordinary Investment (including Loan Shares Portfolio Stock) as at 30 June as at 31 December Voting Rights 2005 2004 Nov 98, £480,001 £817,412 £817,412 42.2 15.6 Mar 00 & Jun 03 alwaysON Group Limited Is a market leading provider of voice over IP (VOIP) services to SMEs. VOIP service solves the call quality and security issues that have held backwidespread adoption by SMEs to date. The service is delivered using thecompany's network and much of the company's own developed software. The OrdinaryShares fund holds 2,490,008 shares in the company. Results from the latest accounts for the year ended 31 March 2004: sales£1,991,000, loss before tax £484,000, retained loss £417,000, net assets£183,000. Date of Amount Invested Valuation Valuation % Equity/Voting % of Ordinary Investment as at 30 June as at 31 December Rights Shares Portfolio 2005 2004 Jun 05 £300,000 £300,000 N/A 3.9 5.7 Aigis Limited Produces blast protection materials. Applications include containers that can beused at airports for homeland security purposes, military vehicle and buildingcladding. The company is now selling its products on an international basis andwon its biggest contract to date during the year. The Ordinary Shares fund holds14,253 shares in the company. Results from the latest accounts for the year ended 30 September 2004: sales£680,759, loss before tax £20,293, retained loss £6,549, net assets £364,247. Date of Investment Amount Invested Valuation Valuation % Equity/Voting % of Ordinary as at 30 June as at 31 December Rights Shares Portfolio 2005 2004 Jul 04, Jun 05 £73,885 £114,024 £32,837 2.0 2.2 Clarity Commerce Solutions plc (AIM listed) Is part of a group of companies that provide EPOS solutions and ticketingsoftware and services to the UK hospitality and leisure sectors. Customersinclude Odeon and Travelodge. A good set of results were produced for the yearto March 2005, which are summarised below. The Ordinary Shares fund holds400,000 shares in the company. Results from the latest accounts for the year ended 31 March 2005: sales£16,310,000, profit before tax £513,000, retained profit £351,000, net assets£9,345,000. Date of Investment Amount Invested Valuation Valuation % Equity/Voting % of Ordinary as at 30 June 2005 as at 31 December 2004 Rights Shares Portfolio (Bid price) (Mid-market) Jul 00 £500,000 £268,000 £270,000 2.5 5.1 Covion Holdings Limited Provides total facilities management services ('TFM'), or 'Facilities IntegratedServices' (FIS), as it has labelled them, to private sector clients in theoffice and industrial sectors. Covion manages all the client's facilities andsubcontracts specific services where necessary. It seeks to form unique andclose partnerships with its clients in the form of joint executive boards towhich its site-based FIS manager reports. Key clients are Logica, AnglianWindows and Sarah Lee. The Ordinary Shares fund holds 3,605 shares in thecompany. No audited accounts have been produced since incorporation. Date of Amount Valuation Valuation as % Equity/ Loans % of Ordinary Investment Invested as at 30 June at 31 December Voting Rights Shares (including 2005 2004 Portfolio Loans) May 05 £300,000 £300,000 N/A 3.6 £269,973 5.7 (Secured) DCG Datapoint Group Limited Provider of data storage and back-up solutions to corporates either remotely orat customers' premises. The demand for Datapoint's services is driven by greatercompliance requirements for retention and retrieval of data and the ever growingvolume of electronic data produced by organisations. Revenue grew substantiallyin the year to March 2005. The Ordinary Shares fund holds 6,388 shares in thecompany. Results from the latest audited accounts for the year ended 31 March 2004: sales£2,572,694, loss before tax £394,807, retained loss £394,807, net liabilities£222,355. Date of Amount Invested Valuation Valuation % Equity/ Loans % of Ordinary Investment (including as at 30 June as at 31 Voting Rights Shares Loans) 2005 December 2004 Portfolio Mar 04 £175,000 £175,000 £175,000 4.4 £116,725 3.3 (Secured) High Integrity Solutions Limited Has developed and markets a sophisticated software framework tool ("VDS") toimprove the efficiency and productivity of software engineers writing complexsoftware for major projects, protect the integrity of the software and providetraceability and a full audit trail. The Ordinary Shares fund holds 1,319,850shares in the company. Results from the latest accounts for the year ended 30 June 2004: sales £26,000,loss before tax £1,110,000, retained loss £2,953,000, net assets £32,000. Date of Amount Invested Valuation Valuation % Equity/Voting % of Ordinary Investment as at 30 June as at 31 December Rights Shares 2005 2004 Portfolio May 05 £225,000 £225,000 N/A 4.5 4.3 Nanotecture Group plc Nanotecture has developed a method for producing nano-materials which improvethe performance and lower the cost of supercapicitors/batteries, filters andsensors. The unique patented technology gives the company an important lead overcompetition and access to markets worth more than $1 billion. The OrdinaryShares fund holds 296,689 shares in the company. Results from the latest accounts for the year ended 31 December 2004: sales£92,000, loss before tax £1,039,000, retained loss £937,000, net assets£1,008,000. Date of Amount Invested Valuation Valuation % Equity/Voting % of Ordinary Investment as at 30 June as at 31 December Rights Shares 2005 2004 Portfolio Apr 05 £300,000 £300,000 N/A 3.0 5.7 Sarantel Group plc (AIM Listed) Manufactures miniature antennae for use in mobile phones and personal digitalassistants offering location based services through GPS navigation satellites.Its sales quadrupled in the year to 30 September 2004 and further growth isanticipated in 2005. Sarantel listed on the AIM market on 2 March 2005 raisingan additional £18 million to fund the ongoing expansion of the business. TheOrdinary Shares fund holds 504,146 shares in the company. Results from the latest audited accounts for the year ended 30 September 2004:sales £839,000, loss before tax £3,956,000, retained loss £3,756,000, net assets£5,345,000. Dates of Amount Invested Valuation Valuation % Equity/ % of Ordinary Investment as at 30 June as at 31 December Voting Rights Shares Portfolio 2005 2004 (Bid price) Sep 04, Mar 05 £343,000 £317,612 £180,400 1.1 6.1 Telecom plus plc (listed on the London Stock Exchange) Is the UK's leading multi-utility (gas, electricity, telephony, internet)company. Customers benefit from low costs and a single bill each month. Servicesprovided increased by 29% during the year. The Ordinary Shares fund holds651,000 shares in the company. Results from the latest audited accounts for the year ended 31 March 2005: sales£102,467,000, profit before tax £10,052,000, retained profit £63,000, net assets£13,629,000. Dates of Amount Invested Valuation Valuation % Equity/Voting % of Ordinary Investment as at 30 June 2005 as at 31 December Rights Shares Portfolio (Bid price) 2004 (Mid-market) Jun 99 & Dec 02 £248,367 £1,028,580 £1,448,475 1.1 19.6 TheSkillsMarket Limited Manages CV data for recruitment agencies, outsourcing what is an important buttroublesome task. It creates economies of scale because the data it manages foreach agency is common to many others, i.e. one candidate is known to manyagencies. The service is highly automated, using a mix of proprietary andthird-party software. The Ordinary Shares fund holds 150,000 shares in thecompany. Results from the latest accounts for the year ended 31 March 2004: sales£796,125, loss before tax £233,256, retained loss £233,256, net liabilities£49,194. Date of Amount Invested Valuation Valuation % Equity/Voting % of Ordinary Investment as at 30 June as at 31 December Rights Shares Portfolio 2005 2004 Mar 05 £300,000 £300,000 N/A 7.5 5.7 YooMedia plc (AIM listed) Operates a portal site which provides an increasing number of facilitiesincluding online games, e-mail, personal home pages and chat available from anumber of platforms. The company now operates interactive games channels on Skyand Freeview and also distributes games on Telewest and NTL. In addition thecompany provides various other interactive TV solutions such as e-voting. TheOrdinary Shares fund holds 18,810,000 shares in the company. Results from the latest audited accounts for the year ended 31 December 2004:sales £21,267,478, loss before tax £24,017,286, retained loss £23,791,065, netassets £43,211,729. Dates of Amount Invested Valuation Valuation % Equity/Voting % of Ordinary Investment as at 30 June 2005 as at 31 December Rights Shares Portfolio 2004 (Bid price) (Mid-market) Mar 99, Nov 02, £917,357 £1,034,550 £3,197,700 4.1 19.7 May 03, Oct 03 & Apr 04 In addition the Ordinary Shares fund has small investments in DSM GeodataLimited (£67,015) and Sapphire International Limited (£2,500). "C" SHARES FUND Actimax plc Supplies digital telecommunications systems to small and medium sized customers.The company installs complex computer and telephone combined systems usingcomponents from suppliers such as Ascom, Alcatel, Cisco and Intertel. Thecompany won the Best Small Business, Essex Business Awards 2004. The "C" Sharesfund holds 79,440 shares in the company. Results from the latest audited accounts for the period ended 31 December 2004:sales £3,020,867, profit before tax £149,588, retained profit £142,893, netliabilities £123,770. Date of Amount Invested Valuation Valuation % Equity/ Loans % of "C" Shares Investment (including as at 30 June as at 31 Voting Rights Portfolio Loans) 2005 December 2004 Jun 03 £203,193 £200,000 £200,000 11.7 £133,333 0.7 (Secured) Aigis Limited Produces blast protection materials. Applications include containers that can beused at airports for homeland security purposes, military vehicle and buildingcladding. The company is now selling its products on an international basis andwon its biggest contract to date during the year. The "C" Shares fund holds47,514 shares in the company. Results from the latest accounts for the year ended 30 September 2004: sales£680,759, loss before tax £20,293, retained loss £6,549, net assets £364,247. Dates of Amount Invested Valuation Valuation % Equity/Voting % of "C" Shares Investment as at 30 June as at 31 December Rights Portfolio 2005 2004 Jul 04, Jun 05 £246,302 £380,112 £109,470 5.5 1.2 Alaric Systems Limited Specialises in the development, sale, distribution and support of paymentsystems software including systems for electronic payments, authorisation ande-commerce integration. It is also involved in the use of software basedmathematical modelling techniques for card payments and fraud detection. The "C"Shares fund holds 2,177,345 shares in the company. Results from the latest audited accounts for the year ended 31 March 2004: sales£2,173,999, loss before tax £844,005, retained loss £512,418, net assets£198,371. Dates of Amount Invested Valuation Valuation % Equity/ Loans % of "C" Shares Investment (including as at 30 June as at 31 Voting Rights Portfolio Loans) 2005 December 2004 Feb 02, Oct 02, Dec 02, Jun 04, £1,340,465 £1,340,465 £1,323,133 16.8 £68,954 4.4Sep 04 & Jun 05 ANT plc (AIM Listed) Provides embedded application software and support for the broadband TV,hospitality and consumer electronics markets. ANT software is used in set-topboxes and other electronic equipment and has been deployed by customersthroughout the world including Thomson, Pace, Philips, Amino, Samsung and Sagem.The company listed on AIM in March 2005 raising £11 million. The "C" Shares fundholds 1,556,596 shares in the company. Results from the latest audited accounts for the year ended 31 December 2004:sales £2,216,729, loss before tax £951,016, retained loss £844,976, net assets£668,190. Dates of Amount Invested Valuation Valuation % Equity/ % of "C" Shares Investment as at 30 June as at 31 December Voting Rights Portfolio 2005 2004 (Bid price) Jul 01, Feb 03 £1,097,200 £2,023,575 £1,945,744 6.4 6.7 & Mar 04 Aquasium Technology Limited Is engaged in the design, manufacture and marketing of bespoke electron beamwelding and vacuum furnace equipment. Its products are used in the processes ofa wide range of manufacturing industries including automotive, electronics,medical, power generation and aerospace. The "C" Shares fund holds 86,666 sharesin the company. Results from the latest audited accounts for the year ended 31 December 2004:sales £6,317,876, profit before tax £27,488, retained profit £147,454, netliabilities £946,296. Dates of Amount Valuation Valuation as % Equity/ Loans % of "C" Investment Invested as at 30 June at 31 December Voting Rights Shares (including 2005 2004 Portfolio Loans) Oct 01 & £1,200,000 £3,633,744 £1,200,000 33.3 £866,667 12.0 Apr 03 (Secured) Blue Curve Research.net Limited Is a software company that sells products and services to investment banks andfund managers which automate the production and distribution of researchmaterial. Analytical research and services are a key customer retention tool forinvestment banks but are also a major cost. The company's software productsimprove the efficiency of research distribution while at the same time reducingcost. The "C" Shares fund holds 367 shares in the company. Results from the latest audited accounts for the year ended 31 December 2004:sales £972,809, loss before tax £140,729, retained profit £22,373, netliabilities £821,882. Date of Amount Valuation Valuation as % Equity/ % of "C" Investment Invested at 31 December Voting Loans Shares (including as at 30 June 2004 Rights Portfolio Loans) 2005 Oct 01 & Apr £1,133,000 £899,367 £793,334 23.7 £799,667 3.0 05 (Secured) Broadreach Networks Limited Provides both fixed line and Wi-Fi hotspot public internet access. Users gainaccess from fixed terminals installed at coffee shops, hotels and transport hubsor by utilising their own portable device. The public Wi-Fi market has not grownat the rate anticipated, which is reflected in the valuation below. The "C"Shares fund holds 4,854,006 shares in the company. Results from the latest audited accounts for the year ended 31 October 2004:sales £622,314, loss before tax £1,867,992, retained loss £1,867,992, netliabilities £2,530,761. Dates of Amount Valuation Valuation as % Equity/ Loans % of "C" Investment Invested at 31 December Shares (including as at 30 June 2004 Voting Rights Portfolio Loans) 2005 Feb 03, Oct 03 £1,857,000 £289,192 £1,857,000 22.9 £1,585,600 1.0 & Jun 04 (Secured) Broadreach Train Services Limited ("BTSL") Set up to exploit the on-train Wi-Fi opportunity that originated from BroadreachNetworks Limited. Working closely with Virgin Trains, BTSL is aiming to secure asubstantial share of the on-train Wi-Fi market. Users will benefit frombroadband internet connections throughout their journeys. Adoption by the trainoperators has been slower than expected which is reflected in the valuationbelow. Results from the latest audited accounts for the period ended 31 October 2004:sales £Nil, loss before tax £380,657, retained loss £380,657, net assets£129,206. Date of Amount Valuation Valuation as % Equity/ Loans % of "C" Investment Invested as at 30 at 31 December Shares (including June 2005 2004 Voting Rights Portfolio Loans) Jun 04 £143,000 £21,450 £143,000 0.0 £143,000 0.1 (Secured) Callserve Communications plc Is a voice over IP telecoms network and service provider which enables telephonecalls to be made from a PC via the internet to any phone worldwide. The companysells phonecards to consumers in many jurisdictions, particularly the MiddleEast. The competitive landscape has been challenging over the last six months ascompanies such as Skype increase their market penetration. The "C" Shares fundholds 222,222 shares in the company. Results from the latest audited accounts for the year ended 31 March 2003: sales£9,293,066, loss before tax £3,960,176, retained loss £3,960,176, netliabilities £4,323,990. Date of Investment Amount Invested Valuation Valuation % Equity/Voting % of "C" Shares Rights Portfolio as at 30 June 2005 as at 31 December 2004 Oct 00 £502,893 £112,499 £224,999 1.27 0.4 Camwood Limited Provides an 'Enterprise Platform Manager' solution which allows its customers toassess the effects of the introduction of new operating systems and updates suchas the service Pack 2 update to Microsoft Windows XP. It also providesmonitoring checks to allow customers to ensure compliance with Microsoft bestpractices. Sales are made directly and through channel partners to the corporatesector. The "C" Shares fund holds 3,623,812 shares in the company. Results from the latest audited accounts for the year ended 31 March 2004: sales£2,621,946, loss before tax £830,007, retained loss £631,665, net liabilities£218,531. Dates of Amount Valuation Valuation as % Equity/ Loans % of "C" Investment Invested at 31 December Shares (including as at 30 June 2004 Voting Rights Portfolio Loans) 2005 Sep 03, May 05 £514,090 £786,431 £500,000 15.8 £333,333 2.6 (Secured) Covion Holdings Limited Provides total facilities management services ('TFM'), or 'Facilities IntegratedServices' (FIS), as it has labelled them, to private sector clients in theoffice and industrial sectors. Covion manages all the client's facilities andsubcontracts specific services where necessary. It seeks to form unique andclose partnerships with its clients in the form of joint executive boards towhich its site-based FIS manager reports. Key clients are Logica, AnglianWindows and Sarah Lee. The "C" Shares fund holds 8,411 shares in the company. No audited accounts have been produced since incorporation. Date of Amount Valuation Valuation as % Equity/ Loans % of "C" Investment Invested at 31 December Shares (including as at 30 June 2004 Voting Rights Portfolio Loans) 2005 May 05 £700,000 £700,000 N/A 8.4 £629,936 2.3 (Secured) DCG Datapoint Group Limited Provider of data storage and back-up solutions to corporates either remotely orat customers' premises. The demand for Datapoint's services is driven by greatercompliance requirements for retention and retrieval of data and the ever growingvolume of electronic data produced by organisations. Revenue grew substantiallyin the year to March 2005. The "C" Shares fund holds 20,987 shares in thecompany. Results from the latest audited accounts for the year ended 31 March 2004: sales£2,572,694, loss before tax £394,807, retained loss £394,807, net liabilities£222,355. Date of Amount Invested Valuation Valuation % Equity/ Loans % of "C" Shares Investment (including as at 30 June as at 31 Voting Rights Portfolio Loans) 2005 December 2004 Mar 04 £575,000 £575,000 £575,000 14.4 £383,525 1.9 (Secured) FfastFill plc (AIM Listed) Is a software company that develops sophisticated trading solutions for futuresand options traders, brokers and risk managers. A £3 million funding round wascompleted earlier this year to strengthen the company's balance sheet. Newcustomers signed include HSBC, Barclays Capital and ABN Amro. The "C" Sharesfund holds 6,485,498 shares in the company. Results from the latest audited accounts for the year ended 31 March 2005: sales£4,327,000, loss before tax £2,879,000, retained loss £2,882,000, net assets£2,584,000. Dates of Amount Invested Valuation Valuation % Equity/Voting % of "C" Shares Investment as at 30 June as at 31 December Rights Portfolio 2005 2004 (Bid price) (Mid-market) Jul 00, Jan 04 & £856,339 £372,916 £421,558 2.7 1.2 Apr 04 High Integrity Solutions Limited Has developed and markets a sophisticated software framework tool ("VDS") toimprove the efficiency and productivity of software engineers writing complexsoftware for major projects, protect the integrity of the software and providetraceability and a full audit trail. The "C" Shares fund holds 3,079,650 sharesin the company. Results from the latest accounts for the year ended 30 June 2004: sales £26,000,loss before tax £1,110,000, retained loss £2,953,000, net assets £32,000. Date of Amount Invested Valuation Valuation % Equity/Voting % of "C" Shares Investment Rights Portfolio as at 30 June as at 31 December 2005 2004 May 05 £525,000 £525,000 N/a 10.5 1.7 iCore Limited Is an IT management services company, with services that range from strategic ITreviews, infrastructure design and management, outsourcing procurement, throughto business process management, interim project management and establishingproject offices. Although the company is trading profitably, the Board believesit is prudent to maintain the provision against the cost of this investment toreflect lower turnover than that anticipated at the time of the initialinvestment. The "C" Shares fund holds 201,176 shares in the company. Results from the latest audited accounts for the year ended 30 June 2004: sales£3,144,321, loss before tax £9,877, retained loss £9,531, net assets £554,911. Date of Amount Invested Valuation Valuation % Equity/Voting % of "C" Shares Investment as at 30 June as at 31 Rights Portfolio 2005 December 2004 Dec 00 £750,000 £500,000 £500,000 16.8 1.6 Monactive Limited Is a leading provider of software licence information management solutions withover 100 customers. The company's software monitors software usage on PCnetworks, providing corporates with data for cost reduction and compliance. Itscustomers are able to reduce software licensing costs whilst demonstratinglegal compliance. The "C" Shares fund holds 474,057 shares in the company. Results from the latest audited accounts for the year ended 31 July 2004: sales£966,442, loss before tax £350,914, retained loss £326,372, net liabilities£1,911,422. Dates of Amount Valuation Valuation as % Equity/ Loans % of "C" Investment Invested at 31 December Shares (including as at 30 June 2004 Voting Rights Portfolio Loans) 2005 Mar 01 & £1,017,858 £656,251 £656,251 22.2 £616,072 2.2 Jan 03 (Secured) Mondas plc (AIM Listed) Has developed e-Business technologies to allow securities and investment housesto deploy new front and back office applications to facilitate straight throughprocessing. Customers benefit from improved content management, documentmanagement, business process software and service solutions. The "C" Shares fundholds 489,855 shares in the company and £900,000 convertible loan stock. Results from the latest audited accounts for the year ended 30 April 2004: sales£3,974,732, loss before tax £1,779,554, retained loss £1,631,806, netliabilities £617,901. Dates of Amount Valuation Valuation as at % Equity/ Loan Stock % of "C" Investment Invested 31 December Shares (including as at 30 June 2004 Voting Rights Portfolio Loan Stock 2005 (Bid price) (Mid-market) Oct 00 & Dec £1,068,116 £989,768 £1,017,623 1.9 £900,000 (at 3.3 02 cost) Nanotecture Group plc Has developed a method for producing nano-materials which improve theperformance and lower the cost of supercapicitors/batteries, filters andsensors. The unique patented technology gives the company an important lead overcompetition and access to markets worth more than $1 billion. The "C" Sharesfund holds 692,275 shares in the company. Results from the latest accounts for the year ended 31 December 2004: sales£92,000, loss before tax £1,039,000, retained loss £937,000, net assets£1,008,000. Date of Amount Invested Valuation Valuation % Equity/Voting % of "C" Shares Investment as at 30 June as at 31 December Rights Portfolio 2005 2004 Apr 05 £700,000 £700,000 N/A 7.1 2.3 Oxonica plc (Listed on AIM 20 July 2005) Engineers the properties of materials at the nano-scale for application in fueladditives, UV protection and other products. Foresight invested a further£510,000 in shares in a January 2005 rights issue. The Company listed on the AIMmarket in July 2005. The "C" Shares fund now holds 5,683,108 shares in thecompany. Results from the latest audited accounts for the year ended 31 December 2004:sales £390,525, loss before tax £3,291,938, retained loss £3,161,171, netliabilities £1,774,471. Dates of Amount Valuation Valuation as % Equity/ Loans % of "C" Investment Invested at 31 December Shares (including as at 30 June 2004 Voting Rights Portfolio Loans) 2005 Jun 02, Dec 02 £2,373,710 £5,444,418 £5,746,186 20.5 £524,053 17.9 & Jan 04 (Secured) Sarantel Group plc (AIM Listed) Manufactures miniature antennae for use in mobile phones and personal digitalassistants offering location based services through GPS navigation satellites.Its sales quadrupled in the year to 30 September 2004 and further growth isanticipated in 2005. Sarantel listed on the AIM market on 2 March 2005 raisingan additional £18 million to fund the ongoing expansion of the business. The "C"Shares fund holds 8,268,974 shares in the company. Results from the latest audited accounts for the year ended 30 September 2004:sales £839,000, loss before tax £3,956,000, retained loss £3,756,000, net assets£5,345,000. Dates of Amount Invested Valuation Valuation % Equity/ % of "C" Shares Investment as at 30 June as at 31 Voting Rights Portfolio 2005 December (Bid price) 2004 Sep 00, Apr 01, £2,853,166 £5,209,454 £6,780,112 16.6 17.1 Jun 01, Mar 02, Aug 02, Sep 02, Nov 02, Feb 03, Jun 04 & Sep 04 SmartFOCUS Group PLC (AIM Listed) Provides software to enable accurate targeting and execution of marketingcampaigns. The company is an established solution provider in this area withapproximately 300 customers forming a wide customer base spread across financialservices, retail, marketing services and other consumer-driven sectors. Thecompany adds value to its customers marketing campaigns by linking with multipledatabases, returning query results in seconds whilst presenting the results inan easily understandable graphic manner. The company was profitable in the firsthalf of 2005 and in July announced an acquisition expected to be earningsenhancing in 2006. The "C" Shares fund holds 19,892,985 shares in the company. Results from the latest audited accounts for the year ended 31 December 2004:sales £2,850,101, loss before tax £324,052, retained loss £179,448, netliabilities £239,409. Dates of Amount Invested Valuation Valuation % Equity/ Loans % of "C" Shares Investment (including as at 30 June as at 31 Voting Rights Portfolio Loans) 2005 December 2004 (Bid price) (Mid-market) Dec 01 & Oct 04 £1,666,667 £3,053,741 £2,480,843 27.0 £666,667 10.0 (Secured) themutual.net plc (AIM Listed) Sells targeted advertising by email aimed to its 1.25 million loyalty basedonline shoppers. Good results were announced for the year to April 2005 assummarised below. The "C" Shares fund holds 3,427,302 shares in the company. Results from the latest accounts for the year ended 30 April 2005: sales£3,079,352, profit before tax £778,165, retained profit £489,385, net assets£2,099,903. Date of Investment Amount Invested Valuation Valuation % Equity/Voting % of "C" Shares as at 30 June as at 31 Rights Portfolio 2005 December 2004 (Bid price) Jun 00 £502,938 £822,552 £976,781 8.5 2.7 TheSkillsMarket Limited Manages CV data for recruitment agencies, outsourcing what is an important buttroublesome task. It creates economies of scale because the data it manages foreach agency is common to many others, i.e. one candidate is known to manyagencies. The service is highly automated, using a mix of proprietary andthird-party software. The "C" Shares fund holds 325,000 shares in the company. Results from the latest accounts for the year ended 31 March 2004: sales£796,125, loss before tax £233,256, retained loss £233,256, net liabilities£49,194. Date of Amount Invested Valuation Valuation % Equity/Voting % of "C" Shares Investment as at 30 June as at 31 December Rights Portfolio 2005 2004 Mar 05 £650,000 £650,000 N/A 16.2 2.1 Wire-e Limited Provides voice and text broadcast services to corporates and small and mediumenterprises. The business is now making an operating profit as sales continueto grow. The "C" Shares fund holds 6,666,666 shares in the company. Results from the latest audited accounts for the year ended 30 June 2004: sales£897,661, loss before tax £381,079, retained loss £356,692, net liabilities£1,313,574. Date of Amount Valuation Valuation as % Equity/ Loans % of "C" Investment Invested as at 30 June at 31 December Voting Shares (including 2005 2004 Rights Portfolio Loans) Sep 02, Apr 03 £1,000,000 £500,000 £500,000 26.9 £900,000 (at 1.6 cost) (Secured) Unaudited Non-Statutory Analysis between the Ordinary Shares and C Shares funds Unaudited Statement of Total Return for the six months ended 30 June 2005 Ordinary Shares "C" Shares fund fund Revenue Capital Total Revenue Capital £ Total £ £ £ £ £Unrealised gains and losses on - (2,379,125) (2,379,125) - (733,781) (733,781)investmentsRealised gains on investments - - - - 25,412 25,412Cost of investment transactions - - - - (90) (90)Income 199,430 - 199,430 327,106 - 327,106Investment Management Fees (37,802) (113,407) (151,209) (91,402) (274,206) (365,608)Other Expenses (47,580) - (47,580) (164,518) - (164,518) Profit before income tax 114,048 (2,492,532) (2,378,484) 71,186 (982,665) (911,479)Income Tax expense (8,447) 8,447 - (13,525) 13,525 - Profit for the year 105,601 (2,484,085) (2,378,484) 57,661 (969,140) (911,479) Return per share 0.67p (15.80)p (15.13)p 0.16p (2.64)p (2.48)p Unaudited Balance Sheets as at 30 June 2005 Ordinary "C" Shares fund shares fund £ £ £ £Non-current assets Assets held at fair value 5,249,693 30,385,935through profit and loss -investments Current assetsDebtors and prepayments 208,185 687,567Current investments 3,827,168 1,750,563Cash at bank 2,495 40,016 4,037,848 2,478,146Current LiabilitiesCorporation tax - -Proposed dividends - 31Other creditors 9,336 68,209Accruals 78,170 121,374 (87,506) (189,614)Net current assets 3,950,342 2,288,532 Net assets 9,200,035 32,674,467 CapitalCalled up share capital 154,743 361,561ReservesShare premium account 4,046,967 2,953,685Cancelled share premium account 4,538,974 23,740,452Revaluation reserve (762,478) 5,425,136Profit and loss account 1,221,829 193,633 9,200,035 32,674,467 No of shares in issue 15,474,292 36,156,091 Net asset value per 1p share: 59.45p 90.37p Unaudited Income Statement For the period ended 30 June 2005 Six months Six months Year to to 30 June to 30 June 31 2005 2004 December Restated 2004 (unaudited) (unaudited) Restated Revenue Capital Total Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ £ £ £Unrealised gains - (3,112,906) (3,112,906) - (4,221,551) (4,221,551) - 2,576,905 2,576,905and losses oninvestmentsRealised gains/ - 25,412 25,412 - 40,339 40,339 - (14,261) (14,261)(losses) oninvestmentsCosts of - (90) (90) - - - - - -investmenttransactions Income 526,536 - 526,536 604,799 - 604,799 1,174,057 - 1,174,057Investment (129,204) (387,613) (516,817) (138,549) (415,644) (554,193) (271,331) (813,995) (1,085,326)management feesOther expenses (212,098) - (212,098) (281,701) - (281,701) (560,690) - (560,690) Profit before income tax 185,234 (3,475,197) (3,289,963) 184,549 (4,596,856) (4,412,307) 342,036 1,748,649 2,090,685 Income tax expense (21,972) 21,972 - (40,027) 40,027 - (69,349) 69,349 - Profit for the year 163,262 (3,453,225) (3,289,963)144,522 (4,556,829) (4,412,307) 272,687 1,817,998 2,090,685 Earnings per share Ordinary Shares 15.13)p (47.58)p (51.88)p "C" Shares (2.48)p 6.25p 26.95p The are no other gains or losses other than those stated in the Unaudited IncomeStatement for the six month period ended 30 June 2005 (31 December 2004:same, 30June 2004:same). Unaudited Balance Sheetsas at 30 June 2005 30 June 2005 30 June 31 December 2004 2004 (unaudited) Restated Restated (unaudited) £ £ £ £ £ £Non-Current AssetsAssets held at fair value through profit andloss - Investments 35,635,628 26,237,426 34,212,249 Current AssetsDebtors and prepayments 841,395 699,016 710,375 Current investments 5,577,731 11,539,238 12,207,011 Cash at bank 42,511 9,945,344 53,544 6,461,637 22,183,598 12,970,930 Current LiabilitiesCorporation tax - - -Proposed dividend 31 - - Other creditors 23,188 58,653 117,589 Accruals 199,544 135,451 150,058 (222,763) (192,004) (267,647) Net current assets 6,238,874 21,991,594 12,703,283 Net assets 41,874,502 48,229,020 46,915,532 Capital and reserves Called up share capital 516,304 524,999 528,732 Share premium account 7,000,652 6,291,041 6,989,978 Distributable reserve 28,279,426 34,133,730 29,675,485 Capital reserve -unrealised 4,662,658 (2,234,678) 8,309,277 Profit & loss account 1,415,462 9,513,928 1,412,060 Equity shareholders' funds 41,874,502 48,229,020 46,915,532 Net asset value pershare of 1 pence each: Ordinary Shares 59.45p 135.35p 76.60p "C" Shares 90.37p 73.88p 93.91p Unaudited Cashflow Statement for the six months ended 30 June 2005 Six months to Six months to Year to 31 30 June 2005 30 June 2004 December 2004 (unaudited) (unaudited) (audited) £ £ £Operating activitiesDividends received - - 69,600Deposit and similar interest 423,140 502,686 932,914Other cash receipts - - 13,248Investment management fees paid (562,801) (581,770) (1,093,543)Other cash payments (170,478) (222,085) (469,979)Net cash outflow from operating activities (310,139) (301,169) (547,760) TaxationIncome taxes refunded/(paid) - 7,259 7,259 Investing activitiesPurchase of non-current investments (5,085,575) (2,218,025) (4,448,992)Sale of non-current investments 25,412 10,565,821 10,565,821Net cash (outflow)/inflow from investing activities (5,060,163) 8,347,796 6,116,829 Equity dividendsEquity dividends paid (185,241) - (8,171,595) Net cash (outflow)/inflow before financing and liquid (5,555,543) 8,053,886 (2,595,267)resource management Management of liquid resourcesMovement in money held on escrow - (1,000,000) -Increase in current investments 6,629,280 (1,116,286) (1,784,059) 6,629,280 (2,116,286) (1,784,059) FinancingPurchase of own shares (1,095,561) (96,938) 4,701,670Issue of shares 10,791 3,994,235 (379,247) (1,084,770) 3,897,297 4,322,423 Net (decrease)/increase in cash (11,033) 9,834,897 (56,903) Unaudited Notes to the Financial Statements 1. All revenue and capital items in the income statement derive from continuing operations. 2. In accordance with the policy statement published under "Management and Administration" in the Company's prospectuses dated 1 October 1997 and 14 October 1999, the Directors have charged 75% of the investment management expenses to the capital reserve. 3. Earnings for the six months should not be taken as a guide to the results for the full year. 4. The Ordinary Shareholders, or the "C" Shareholders will be entitled to receive any dividends paid out of the net dividend income from the net assets attributable to the Ordinary Shares, or the "C" Shares respectively. 5. The Company revoked its status as an investment company in March 2000, so that it can regard capital reserves as profits of the Company available for distribution. The Company has not reapplied and does not intend to re-apply for investment company status. 6. The Ordinary Shares fund current investments and the "C" Shares fund current investments represent the balance of the net proceeds from the issues of Ordinary Shares and "C" Shares. These funds are invested in several Dublin based OEIC money market funds managed by Merrill Lynch Investment Managers, Royal Bank of Scotland plc and HBOS plc. 7. Total earnings after taxation for the period showed a loss of £3,289,963 (30 June 2004: loss of £4,412,307) comprising a loss on the Ordinary Shares fund after taxation of £2,378,484 (30 June 2004: loss of £6,656,214) and a loss after taxation on the "C" Shares fund of £911,479 (30 June 2004: profit of £2,243,907) . The basic earnings per Ordinary Share is based on the net loss from Ordinary Shares fund activities and on 15,724,816 Ordinary Shares (30 June 2004: 13,990,381) , being the weighted average number of Ordinary Shares in issue during the period. The basic earnings per "C" Share is based on the net loss from "C" Shares fund activities and is based on 36,722,361 " C" Shares (30 June 2004: 35,892,588), being the weighted average number of " C" Shares in issue during the period. The revenue return per Ordinary Share is based on the net loss from OrdinaryShares fund activities after taxation of £105,601 (30 June 2004: loss of£26,122) and on 15,724,816 Ordinary Shares (30 June 2004: 13,990,381) , beingthe weighted average number of Ordinary Shares in issue during the period. Therevenue return per "C" Share is based on the net revenue from "C" Shares fundactivities after taxation of £57,661 (30 June 2004: £170,644) and on 36,722,361"C" Shares (30 June 2004: 35,892,588), being the weighted average number of "C"Shares in issue during the period. The capital return per Ordinary Share is based on the net realised capitallosses of £nil (30 June 2004: losses of £6,281), on net unrealised capitallosses of £2,379,125 (30 June 2004: losses of £6,422,758) on the Ordinary Sharesfund and on 15,724,816 Ordinary Shares (30 June 2004: 13,990,381) being theweighted average number of Ordinary Shares in issue during the period . Thecapital return per "C" Share is based on the net realised capital gains of£25,322 (30 June 2004: gains of £46,620), on net unrealised capital losses of£733,781 (30 June 2004: gains of £2,201,207) on the "C" Shares fund and on36,722,361 "C" Shares (30 June 2004: 35,892,588) being the weighted averagenumber of "C" Shares in issue during the period. 8. The net asset value per share for both the Ordinary Shares and the C Shares has been calculated on the appropriate allocation of the Company's assets and liabilities. Other than expenses specifically attributable to one fund or the other, one quarter of costs incurred since 1 January 2005 has been allocated to the Ordinary Shares fund. 9. The financial information for the six months ended 30 June 2005 has not been audited or previously published and the 30 June 2004 information has not been audited. The information for the year ended 31 December 2004 does not comprise full financial statements within the meaning of Section 240 of the Companies Act 1985. The financial statements for the year ended 31 December 2004 (before the restatements in these accounts) have been filed with the Registrar of Companies. The auditors have reported on these financial statements and that report was unqualified and did not contain a statement under Section 237(2) of the Companies Act 1985. The audited accounts to 31 December 2004 have been restated in this publication, where appropriate, to reflect the changes in presentation following the introduction of FRS 21. 10. Impact of the introduction of FRS 21 Restatement of opening balances at 31 December 2003 At 1 January 2005 the Company adopted Financial Reporting Standard 21. The following is a reconciliation of the figures at 31 December 2003 previously reported under the applicable UK AccountingStandards and theStatement of Recommended Practice. Previously Restated reported 31 December 2003 Adjustments 31 December 2003 £ £ £ Non-current assets 37,766,434 37,766,434Current assets 11,101,774 11,101,774Creditors: amounts falling due within one year (343,947) 181,237 (162,710) Net assets 48,524,261 181,237 48,705,498 Capital and reserves Called up share capital 483,606 483,606Share Premium Account 2,339,207 2,339,207Distributable Reserve 34,578,917 34,578,917Capital reserve - unrealised 10,731,225 10,731,225Profit and Loss Account 391,306 181,237 572,543 Equity shareholders' funds 48,524,261 181,237 48,705,498 Basic and Diluted Net asset value per share Basic Diluted Basic Diluted Ordinary Shares 186.85p 176.85p 186.85p 176.85p "C" Shares 67.18p 67.18p 67.70p 67.70p Note to reconciliationUnder FRS 21 the proposed dividend is not recognised until it is declared and approved by the shareholders. Therefore £181,237 has been added to the profit and loss account and other creditors. Restatement of opening balances at 30 June 2004 At 1 January 2005 the Company adopted Financial Reporting Standard 21. The following is a reconciliation of the figures at 30 June 2004 previously reported under the applicable UK AccountingStandards and the Statementof Recommended Practice. Previously Restated reported 30 June 2004 Adjustments 30 June 2004 £ £ £ Non-current assets 26,237,426 26,237,426Current assets 22,183,598 22,183,598Creditors: amounts falling due within one (8,362,087) 8,170,083 (192,004)year Net assets 40,058,937 8,170,083 48,229,020 Capital and reserves Called up share capital 524,999 524,999Share Premium Account 6,291,041 6,291,041Distributable Reserve 34,133,730 34,133,730Capital reserve - unrealised -2,234,678 (2,234,678)Profit and Loss Account 1,343,845 8,170,083 9,513,928 Equity shareholders' funds 40,058,937 8,170,083 48,229,020 Net asset value per share (basic and diluted) Ordinary Shares 83.33p 135.35p "C" Shares 73.40p 73.88p Note to reconciliationUnder FRS 21 proposed dividends are not recognised until they are declared and approved by the shareholders. Therefore£8,170,083 has been addedto the profit and loss account and other creditors. Restatement of opening balances at 31 December 2004 At 1 January 2005 the Company adopted Financial Reporting Standard 21 The following is a reconciliation of the figures at 31 December 2004 previously reported under the applicable UK AccountingStandards and theStatement of Recommended Practice. Previously Restated reported 31 December 2004 Adjustments 31 December 2004 £ £ £ Non-current assets 34,212,249 34,212,249Current assets 12,970,930 12,970,930Creditors: amounts falling due within one (452,919) 185,272 (267,647)year Net assets 46,730,260 185,272 46,915,532 Capital and reserves Called up share capital 528,732 528,732Share Premium Account 6,989,978 6,989,978Distributable Reserve 29,675,485 29,675,485Capital reserve - unrealised 8,309,277 8,309,277Profit and Loss 1,226,788 185,272 1,412,060 Equity shareholders' funds 46,730,260 185,272 46,915,532 Net asset value per share (basic and diluted) Ordinary Shares 76.60p 76.60p "C" Shares 93.41p 93.91p Note to reconciliationUnder FRS 21 the proposed dividend is not recognised until it is declared and approved by the shareholders. Therefore £185,272has been addedto the profit and loss account and other creditors. 11. Impact of the introduction of FRS 25 and FRS 26 The financial information for the six months ended 30 June 2005 has been prepared in accordance with FinancialReporting Standards 25 and 26. The introduction of these new standards has had the following impacts: Valuation:The assets held at fair value through the profit and loss by the company are valued at bid price rather thanmid-market price as in prior periods. Six months to Year to 30 June 2005 31 December 2004 (unaudited) (audited) £ £Valuation at bid price 35,635,628 33,662,959Valuation at mid-market price 36,536,620 34,212,249Difference (900,992) (549,290) Transaction costs:Transaction costs incurred when purchasing or selling assets are now written off to the capital column of theIncome Statement in the period they occur.Investment costs at 1 January 2005 included transaction costs of £15,577. In the restated opening balances asat 1 January 2005 these costs have been expensed to the distributable reserve. 12. Movement in Reservesfor the period ended 30 June 2005 Profit & Called up Share Distributable loss Revaluation share premium account capital account reserve reserve reserve Total £ £ £ £ £ £At 31 December 2004 (restated) 528,732 6,989,978 29,675,485 1,412,060 8,309,277 46,915,532Effect of changes in accounting policyarising from the introduction of FRS 25and FRS 26- valuation - - - - (549,290) (549,290)- transaction costs - - (15,577) - 15,577 -At 1 January 2005 (restated) 528,732 6,989,978 29,659,908 1,412,060 7,775,564 46,366,242 Shares issued/(bought back) (12,428) 10,674 (1,014,751) - - (1,016,505) Write off to distributable reserve - - (365,731) 365,731 - - Realised gains - - - 25,322 - 25,322 Profit for the year - - - (202,379) (3,112,906) (3,315,285) Dividend - final for year ended 31 - - - (185,272) - (185,272)December 2004 At 30 June 2005 516,304 7,000,652 28,279,426 1,415,462 4,662,658 41,874,502 This information is provided by RNS The company news service from the London Stock Exchange