Neptune-Calculus Income & Growth Regulatory News (NEP)

Accumulated shareholder value represents net asset value per share plus cumulative dividends paid per share.

The results for the year ended 31 December 2013 showed a disappointing decline in net assets per Ordinary Share of 16.9 per cent to 48.5 pence. The main reason for this decline can be attributed to the sharp fall in the share price of EpiStem Holdings plc ("EpiStem"), one of our AIM investments during the year following the termination of a global (ex India) distribution agreement with Becton Dickinson. This is discussed in detail in the Investment Manager's report and it is clear there are several positive aspects to the situation. The value of the unquoted portfolio investments decreased by 10.7 per cent during the year as the holding in Triage Holdings Limited ("Triage") and Secure Electrans Limited ("Secure Electrans") was written down. The background to the Secure Electrans' write-down is also discussed in detail in the Investment Manager's report. The movement also reflects the dividends of 3 pence per share that were paid to shareholders during 2013, bringing the total accumulated shareholder value (comprising net asset value per share plus cumulative dividends paid to date) to 71.0 pence per Ordinary Share.

The Company continues to meet its requirements to qualify as a VCT. Our qualifying investments are managed by Calculus Capital Limited and are in a combination of unquoted and AIM companies. During the year two new qualifying unquoted investments were made: £100,000 in Dryden Human Capital Limited, an international recruitment firm which specialises in the actuarial, insurance, compliance and wealth management markets with a network of offices across Asia, and £100,000 in Hampshire Cosmetics Limited, a developer and manufacturer of cosmetics, toiletries and fragrances. Further details of these investments are set out in the Investment Manager's Review that follows this statement. During the year we sold a number of our smaller AIM quoted investments. In addition, Pressure Technologies plc was sold in August at a 70 per cent premium to cost. Terrain Energy Limited redeemed the Company's £75,000 holding of its loan stock at par and Waterfall Services Limited redeemed the Company's holding of £333,333 of its loan stock at par. The proceeds were reinvested in follow-on loan stock investments in two companies: £222,000 in Secure Electrans and £135,000 in Lime Technology Limited ("Lime").

The overall value of the quoted portfolio, which is composed entirely of AIM companies, decreased by 40.1 per cent over the last twelve months on a like for like basis which compares with an increase in the FTSE AIM All-Share Index of 20.3 per cent over the year. The reduction is almost entirely attributable to the investment in AIM quoted EpiStem which, although still valued at 257 per cent of original cost, saw a decline it its share price following the termination of a supply and distribution agreement with Becton Dickinson for its product "Genedrive". The Board remains positive on the longer term prospects for EpiStem.

The value of the unquoted portfolio showed a decline of 10.7 per cent over the past twelve months on a like for like basis. As mentioned in our half yearly report, we have written down the value of Lime. In December 2013, the value of Secure Electrans' equity and Triage's preference shares were also written down.

A more detailed analysis of investment performance can be found in the Investment Manager's Review that follows this statement.

Our non-qualifying investments comprise holdings in the Neptune Income Fund, the Neptune Quarterly Income Fund and liquidity funds. Our investments in the Neptune Income Fund increased by 12.1 per cent and in the Neptune Quarterly Income Fund by 15.4 per cent over the year, compared to an increase of 14.4 per cent in the FTSE 100 index. During the year the Company sold £100,000 of its holding in the Neptune Income Fund and £100,000 of its holding in the Neptune Quarterly Income Fund to make qualifying investments.

As noted in the half yearly report, the Company's Articles of Association required that an ordinary resolution be proposed at the Annual General Meeting in 2013 to determine whether the Company should continue as a VCT. Shareholders voted overwhelmingly in favour of the resolution and the Company will continue as a VCT. The next vote to determine whether the Company will continue as a VCT will be held at the annual general meeting in 2018.

Also as noted in the half yearly report, the Company launched an Enhanced share buyback and Top up offer on 28 March 2013. Shareholders tendered a total of 4,052,635 Ordinary Shares at 54.83 pence per share and the proceeds were used to subscribe for a total of 3,930,990 Ordinary shares at 56.53 pence per share. In addition a further £46,150 was subscribed for 81,094 new Ordinary Shares under the top up offer.

The Company paid an interim dividend for 2013 of 1 penny per Ordinary Share in October 2013. This, together with the 2012 final dividend of 2 pence per share paid in June 2013, resulted in dividends of 3 pence being paid during the year. The total dividends paid to an ordinary shareholder to date are 22.5p.

The Directors are also pleased to propose a final dividend for 2013 of 2 pence per Ordinary Share which, subject to shareholder approval, will be payable on 6 June 2014 to shareholders on the register on 2 May 2014.

There are some signs of improvement in the UK economic environment and although growth is expected to remain low we believe that the investments in the portfolio are well placed and can show good returns in the medium to longer term.

Philip Stephens

Chairman

Calculus Capital manages the Company's qualifying portfolio.

The FTSE AIM All-Share index rose by 20.3 per cent during 2013. It outperformed the FTSE 100, which rose by 14.4 per cent over the same period.

At the year end, the portfolio of qualifying investments comprised 16 companies, made up of both unquoted and AIM stocks.

The quoted portfolio, which consists entirely of AIM companies, has shown an overall decrease in value for the year of 40.1 per cent on a like for like basis. At 31 December 2013, the quoted portfolio was valued at £685,000 compared with £1,143,000 on a like for like basis as at 31 December 2012. The decrease can be mainly accounted for by the fall in value of EpiStem Holdings plc ("EpiStem") (see below). During the year the Company made no new quoted investments. The Company sold its smaller holdings in Optare plc and Croma Security Solutions plc at a discount to cost. The holding in Pressure Technologies plc was also sold for £342,000 representing a 70 per cent premium to cost.

EpiStem announced in September that the ongoing discussions with Becton Dickinson (BD) for an expansion of the global supply and distribution agreement (ex India) of their Tuberculosis (TB) test had not been successfully concluded. The result of this is that the supply and distribution agreement originally entered into in August 2012 was terminated. The announcement of this led to a sharp fall in the company's share price. The termination of this agreement, whilst unexpected, has several positive benefits. It allows the company to validate its TB assay without the restriction of the challenging timelines set by BD. At the appropriate time it will also allow EpiStem to open discussions on a global distribution agreement (ex India) with a wide universe of possible partners. EpiStem will complete its Indian clinical trials and launch its TB test once the latest test modifications have been successfully validated, a procedure which is currently in process. The company believes independently its TB test has significant competitive advantages over existing competitor products in terms of speed and mobility. Validation and launch of its TB test will then enable the company to develop rapid, mobile tests for other major diseases.

InfraStrata plc ("InfraStrata") is an independent petroleum exploration and gas storage company. Significant unrisked P50 prospective resources of 450 million barrels have been identified at the Larne-Lough Neagh basin in Northern Ireland (PL1/10) in which InfraStrata has a 43 per cent per cent interest. The company plans to drill a first exploration well in the second half of 2014. InfraStrata has a portfolio of other conventional and unconventional energy assets onshore in the UK. The company also plans to drill a test well at its Islandmagee gas storage project in 2014.

The unquoted portfolio has shown a decrease in value over the year of 10.7 per cent. At 31 December 2013, the unquoted portfolio was valued at £2,830,000 compared with £3,169,000 at 31 December 2012 on a like for like basis. A new qualifying investment was made during the year in Dryden Human Capital Group Limited ("Dryden") of £100,000. The Company also made follow on investments in Hampshire Cosmetics Limited ("Hampshire"), Lime Technology Limited ("Lime") and Secure Electrans Limited ("Secure").The section on unquoted portfolio companies below contains further information.

Dryden is headquartered in the UK and specialises in the actuarial, insurance and compliance recruitment sector with operations in London, Zurich, Mumbai, Sydney and New York. Dryden is focusing on establishing a solid platform for growth, with the benefits set to come through in the coming years. The market is forecast to improve throughout 2014, as UK and European insurers turn their focus to the compliance deadline for Solvency II requirements as a priority. In April 2012 the group appointed a new CEO with extensive experience in the recruitment industry and the Asia Pacific markets. In addition the group has invested in its team, with several new senior employees - principally to continue to grow the business in the Asia Pacific region. At present, the Hong Kong office is performing well whilst the figures suggest the London office needs further input.

Human Race Group Limited ("Human Race") has had a successful year to date. The two flagship events - the Dragon Ride and Windsor Triathlon - continue to show good growth. There is potential for future flagship events in the London Cycle Sportive and the Yorkshire Festival of Cycling, a new event that has been added to the 2014 calendar. In December 2012 the company raised capital to facilitate the early repayment of the deferred consideration from the original acquisition. In April 2013, the company then sold its stake in the British 10K London Run to its partner. The effect of these transactions was to simplify the corporate structure and financing arrangements, allowing the management team to focus its efforts and the company's financial resources on growing the core owned events. In parallel to this, the company is undertaking a strategic review of its other events, with a focus on growing the core profitable events. Financial performance to date is largely in line with the company's forecast for 2013. Near term performance will be impacted by nationalisation of the events portfolio, with the effect of delaying medium term targets. We have revalued the company's equity accordingly.

The Company invested £222,000 in Secure during the year in the form of loan stock. Secure is a UK based payments technology company, with offices in Ellesmere Port, Chester. The Secure Electrans HomePay™ solution replicates the retail Chip & PIN experience for other card transactions. An integrated suite of bespoke web, cryptographic, analytics, and payments processing services supports the technology. Secure's solution and back end system supports the following applications: secure, low cost, Chip&PIN payment facilities for small and medium sized businesses - particularly businesses requiring a high degree of mobility (e.g. plumbers, window cleaners and hairdressers); card not present transactions on different devices (e.g. computers, tablets and mobile phone), prepaid smart energy meters and eGov Services as local and national government move more of their services online. This technology is supported by patents and accreditation by, inter alia, Europay, MasterCard and Visa (EMV) level 1 and 2 and secured PCI PTS 3.1 Global Certification.

Global interest in chip and pin solutions for online transactions has increased significantly in the past year. The United States was the last major market to embrace chip and pin, having moved rapidly in this direction after significant losses of credit card information by major US retailers such as Target and Neiman Marcus. Secure is in discussions with several major financial institutions about contracts to provide mobile merchant chip and pin solutions. Notwithstanding the level of interest in Secure's products in its market, the company was unable to demonstrate adequate visibility over future working capital needs and administrators were appointed to the company in March 2014. Full provision has been made against the value of the Company's equity investment. We continue to value the loan stock, some of which is secured on the intellectual property (IP) portfolio, at par as we believe that realisations from the sale of the trade and assets and, possibly, from a separate sale of the IP portfolio are likely to cover outstanding loans, other creditors and costs and may enable a distribution to be made to shareholders.

Terrain Energy Limited ("Terrain") redeemed £75,000 of loan stock in March 2013. Terrain has interests in nine petroleum licences; Keddington, Kirklington, Dukes Wood, Kelham Hills and Burton on the Wolds in the East Midlands, Larne in Northern Ireland, Brockham in Surrey and Bruckmuhl and Starnberger See in Germany. Terrain is currently producing from wells at Keddington, Kirklington and Brockham. On average 80 barrels of oil per day (bopd) and 100,000 standard cubic feet of gas per day are being produced (gross). Terrain is a member of a syndicate that has been awarded several blocks to the north of the Larne licence in the 27th Offshore Licensing round and approximately £800,000 of seismic acquisition is planned in 2015 with a drill or drop decision shortly after. Any well would be drilled from onshore. Two exploration wells are planned in 2014 on the Larne and Burton on the Wolds licences. In addition, sidetracks and other works to increase production are planned for Keddington and Brockham in the near future. In December 2013 Terrain purchased two exploration licences to the south of Munich. Terrain owns 100 per cent of these licences and is the operator. The company is planning a 2D seismic acquisition programme over the two licences in 2014 with the possibility of drilling an exploration well in 2015 should the seismic identify suitable prospects. Steve Jenkins, former CEO of Nautical Petroleum plc, which was acquired by Cairn Energy plc, was appointed Chairman in 2013.

In December 2013 the Company invested £135,000 of loan stock in Lime, a low carbon based building materials developer. This sector of the construction industry is showing strong growth. The business comprises two parts: Lime Mortars which were used in the renovation of St Pancras Station and, Lime building systems: zero carbon panels that were used in the external wall construction of Marks and Spencer's new superstore at Cheshire Oaks and in the construction of the Science Museum's 'large items' archives near Swindon. Lime's prefabricated panels are classed as 'zero carbon' and show superior performance compared to comparable products in terms of temperature, moisture control and fire resistance. For example, a 20 degree change in the external temperature changes the internal temperature by one degree over 32 hours. Evidence now shows that Marks and Spencer's Cheshire Oaks store built with Lime's panels requires 73 per cent less energy for heating than Marks and Spencer's benchmark store at Westgate, West London, which is of conventional construction. The company's products have been featured on Channel 4 (Kevin McCloud's Grand Designs), the Discovery Channel and Al Jazeera Television.

MicroEnergy Generation Services Limited ("MicroEnergy") owns and operates a fleet of small onshore wind turbines (

In December 2013, the Company invested £100,000 in Hampshire in the form of £75,000 loan notes and £25,000 equity. Founded in the 1970's, Hampshire is an established company which develops and manufactures a comprehensive range of products covering fragrances, body treatments, skincare and shampoos. This investment was made to finance an acquisition to help widen its product range and capitalise on new markets. The original investment was part of a turnaround led by an experienced management buy-in team. This has progressed well to date, with an improvement in revenue and profitability. The new capital will help the business continue this through expanding into new, higher margin, product areas. The business has performed well in the twelve months following our investment and is ahead of plans with management's focus on quality customer delivery, profitability and cash flow delivering positive results. In the year ahead the key objectives for the business are to grow and diversify further the revenue base, as well as delivering the cost improvements from the capital investment already undertaken.

Waterfall Services Limited ("Waterfall"), which provides catering services to the aged care and education markets, is trading ahead of budget for the year to date. There have been a number of contracts up for retender recently and, although there have been some losses, the company successfully retained a large contract for Durham primary schools amongst others. In addition Waterfall recently acquired Pro Serv, a business in the South West with a focus on the education market, which has been integrated and performs well. In December, Waterfall refinanced its banking facilities, as part of which it repaid £333,333 loan stock.

The Company maintained its holding in Triage Holdings Limited ("Triage"). Triage provides IT repair and refurbishment services.

The Company maintained its holding In RMS Group Holdings Limited ("RMS") of 85,166 shares. RMS provides port services from six locations on the Humber Estuary, the UK's busiest trading estuary. The group's services cover shipping, stevedoring, storage/warehousing and support logistics for import and export cargoes moving between Northern Europe, the Baltic, Russia, the Iberian Peninsula and the Mediterranean. Unaudited results for the year to 31 December 2013 indicate that the company has performed ahead of budget.

In February 2014, a short term loan facility of £100,000 was made available to Lime to facilitate a move away from use of an invoice discounting facility where the terms and conditions were judged too onerous and expensive. This short term facility is secured on any sums receivable by the company from HM Revenue & Customs by way of Research and Development Relief for Corporation Tax. This facility is due for repayment in April 2014. In March 2014 the Company accepted an offer made to all shareholders in respect of a small holding in the quoted portfolio. Other than disclosed, there have been no developments since the year end.

There are some signs of improvement in the UK economic environment and we believe that the companies in the investment portfolio are well positioned to show good returns in the medium to longer term.

John Glencross

Calculus Capital Limited

31 March 2014

The ten largest holdings by value are included below:

* The valuations of certain investments include small purchases made which are non-qualifying investments. These cost £15,524 and are valued at £9,978.

∞ Included in the cost of the equity holding is £37 of Heritage House Media shares which belong to Neptune-Calculus SPV, which is wholly owned by the Company. Included within the cost of the loan stock holding of Heritage House Media is £5,463 and £120,344 respectively of loan stock held by Neptune-Calculus SPV. These are valued at £nil. These investments are non-qualifying.

# The valuation of Lime Technology Limited loan stock includes rolled up interest that is non-qualifying. This cost £16,544 and is valued at £16,544.

† The valuation of Heritage House Media Limited loan stock includes rolled up interest which is non-qualifying. This cost £309,118 and is valued at £nil.

The following unquoted investments are included in the investment portfolio at the balance sheet date. Further details of these companies are provided below:

RMS Group Holdings is a Humberside based port operator, and provides customers with shipping, stevedoring and storage warehousing. The group also has a national logistics division.

Waterfall Services provides catering and support services to the aged care, welfare and education markets. The group employs over 2,200 people.

Triage Holdings provides IT repair and refurbishment services and auto identification solutions to customers. The group has headquarters in Stevenage, but operates repair centres in several other locations across the UK.

Terrain Energy was established by Calculus Capital Limited in 2009 to develop a portfolio of onshore oil and gas producing assets in the UK.

Other funds managed by Calculus Capital Limited have invested in this company and have combined voting rights of 5.4 per cent.

Lime Technology is a low carbon based building materials developer based in Abingdon. Lime is a leader in lime and hemp based building products for the mainstream construction industry. Through its subsidiary, Hemp Technology, the company controls the hemp supply chain from seed to finished wall.

* The Lime Technology group accounts are not required to be audited. These figures are derived from the Lime Technology Limited, Hemcrete Projects Limited and Hemp Technology Limited accounts which have been audited.

MicroEnergy is a company set up by Calculus Capital in 2012 to acquire renewable, microgeneration facilities. The company has entered into a contract to buy a fleet of 168 small wind turbines (

\* The financials in period from 11/02/2011 to 31/03/2012 have not been audited

Founded in the 1970s, Hampshire Cosmetics develops and manufactures a comprehensive range of products covering fragrances, body treatments, skincare and shampoos. 

Secure Electrans, founded in 2000, develops internationally patented systems that provide solutions to card payment fraud.

Human Race Group Limited own and operate over 55 mass participation sports events including triathlon, cycling, running, duathlon, aquathlon and open water swimming.

Dryden is headquartered in the UK and specialises in the actuarial, insurance and compliance recruitment sector with operations in London, Zurich, Mumbai, Sydney and New York.

Other funds managed by Calculus Capital Limited have invested in this company and have combined voting rights of 29.1 per cent.

Neptune-Calculus Income and Growth VCT ("the Company") is a Venture Capital Trust listed on the London Stock Exchange. The principal activity of the Company is investing in unquoted or AIM traded companies in the UK with the objective of generating long term capital growth and tax free dividends for investors. The Company is managed as a VCT in order that shareholders may benefit from the tax reliefs available.

The Board of directors is responsible for the overall stewardship of the Company including investment, dividend, borrowing and purchase of own shares policies, corporate strategy and governance and risk management. All the directors, are non-executive. The Board has appointed Calculus Capital Limited to manage its qualifying portfolio and to provide certain administrative services. Details of the management agreement are set out in note 3 to the accounts. Calculus Capital Limited engages with companies invested in by the Company on corporate governance matters to encourage good practice. This includes engagement on significant social and environmental issues where these may impact shareholder value.

The investment policy is to invest approximately 75 per cent of the Company's funds in a diversified portfolio of holdings in qualifying investments, whether unquoted or traded on AIM. Investments are made selectively across a diverse range of sectors in companies which have the potential to generate growth and enhance their value. The balance of approximately 25 per cent of the Company's funds can be invested in a combination of Neptune Income Funds, a portfolio of income generating UK listed shares, and money market instruments.

The Company may co-invest with other funds managed and advised by Calculus Capital Limited. The allocation between different funds takes into account such factors as the funds available for investment and the time horizon of these funds, the size of a potential investment, and the existing sector exposure of the various funds.

The qualifying investments in a particular company may be made in equity shares, loan stocks and/or preference shares where it is felt this would enhance shareholder return. It is intended that no one company shall represent more than 10 per cent of the portfolio and no sector shall represent more than 20 per cent of the total portfolio, in both cases at the date of investment. The Company's policy is not to invest in start-up or seed capital situations. To meet the requirements of a VCT qualifying investment, at least 10 per cent by value of the total investments in any one qualifying company must be in ordinary shares which carry no preferential rights. In addition, the companies in which qualifying investments are made must be UK companies that have no more than £15 million of gross assets at the time of investment (or £7 million if the funds being invested were raised after 5 April 2006).

The Company's investment policy is designed to ensure that it continues to meet the requirements for approved VCT status. Amongst other conditions, the Company may not invest more than 15 per cent, by value at the time of investment, in a single company and must have at least 70 per cent by value of its investments throughout the period in shares or securities in qualifying holdings, of which 30 per cent by value must be ordinary shares which carry no preferential rights.

To give a degree of investment flexibility and to meet short term liquidity requirements, borrowing is permitted by the Company's Articles of a sum which does not exceed 10 per cent of the Company's share capital and reserves. The Company has not utilised these powers to date and does not plan to utilise this ability at the current time.

The Company is exposed to a variety of risks and the principal risks identified by the Board are noted below.

The Company is required at all times to observe the conditions within the Income Tax Act 2007 for the maintenance of approved VCT status. This involves compliance with a number of tests which, if not met, could result in the loss of a number of tax reliefs which are currently available to both the Company and its shareholders under its VCT status. The tests are under continual review by Calculus Capital Limited, the administrator and (qualifying) investment manager of the Company. The Board keeps these matters under continual review through the provision of monthly management information and quarterly Board meetings. The Board has also retained the services of a VCT consultant to undertake an independent monitoring role.

The majority of the Company's investments are in small and medium size companies as these meet the VCT qualifying holdings rules. These companies may not be publicly traded or freely marketable and realisations of such investments can be difficult and can take a considerable amount of time. They also, by their nature, tend to carry higher risk than a larger or longer established business. This risk is in part mitigated by diversifying the investments and maintaining around 25 per cent of the Company's portfolio in liquid assets to enable any short term cash requirements to be met.

In addition, the Company is subject to other price risk constituting uncertainty about the future prices of financial instruments held by the Company.

The Company has also invested in loan stocks and as a result is subject to credit risk.

The majority of the loan stocks are fixed rate so the Board does not consider interest rate risk to be material. The Company has no exposure to foreign currency risk, nor does it have any interest bearing liabilities. Further comment is provided on the financial instruments risks of the Company in note 18 to the accounts.

The Board regularly reviews the risks the business faces and their potential impact on the Company. The Board monitors the Company's performance through the use of regular financial information and administrator and management reports.

The key performance indicators are those that communicate the financial performance and strength of the Company as a whole; these being principally the total return per Ordinary Share and net asset value per Ordinary Share. Further key performance indicators are those which show the Company's position in relation to the VCT tests which it is required to meet to maintain its VCT status.

In addition to the above, the Board considers performance against the Company's closest benchmark, the FTSE AIM All-share Index. The performance measures for the year are included in the Performance summary and reported on in the Chairman's statement.

The key strategic issues considered during the year were:

The value and nature of investments made and realised during the year to ensure these were in accordance with the investment policy and/or whether any changes should be proposed to the investment policy.

In addition, this year the Board considered its recommendation to shareholders as to whether the Company should continue as a VCT. It also determined that the Company should launch an Enhanced Share buyback and Top up offer and should seek shareholder approval to cancel the share premium arising on the issue of new shares.

Further details of these issues are set out in the Chairman's statement and of the investments made and realised in the Investment Manager's report.

The Company had no employees during the year and all directors are male.

The Directors consider that taken as a whole, the Annual Report and Accounts is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy.

By order of the Board

Lesley Watkins

Company Secretary

31 March 2014

The Directors are responsible for the effectiveness of the risk management and internal control systems for the Company, which are designed to ensure that proper accounting records are maintained, that the financial information on which the business decisions are made and which are issued for publication is reliable, and that the assets of the Company are safeguarded. Such a system of risk management and internal control is designed to manage rather than eliminate the risks of failure to achieve the Company's business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss.

The Directors have kept the effectiveness of the Company's risk management and internal controls under review throughout the year covered by these accounts and up to the date of approval of the Report and Accounts. The Board has identified risk management controls in the key areas of business objectives, accounting, compliance, operations and secretarial as areas for the extended review.

The Board recognises its ultimate responsibility for the Company's system of risk management and internal controls and for monitoring its effectiveness. Calculus Capital Limited, as the Investment Manager, has established risk management and internal control frameworks to provide reasonable assurance on the effectiveness of the risk management and internal controls operated on behalf of its clients. The Investment Manager assesses on an on-going basis the effectiveness of its risk management and internal controls and provides the Board with regular reports on all aspects of risk management and internal control (including financial, operational and compliance control, risk management and relationships with external service providers).The Board has produced a risk matrix against which the business risks and the effectiveness of the risk management and internal controls can be monitored, which is reviewed at each Audit Committee meeting and at other times as necessary.

In addition, the Board's appointment of Calculus Capital Limited as administrator has delegated the financial administration of the Company to Calculus Capital Limited. Calculus Capital Limited has an established system of financial controls, including internal financial reporting controls, to ensure that proper accounting records are maintained and that financial information for use within the business and for reporting to shareholders is accurate and reliable and that the Company's assets are safeguarded.

The directors are responsible for preparing the Annual Financial Report and the Company's Accounts in accordance with applicable law and regulations.

Company law requires the directors to prepare accounts for each financial year. Under that law the directors have to prepare the accounts in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable laws). Under company law the directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the Company for that period. In preparing these accounts, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgments and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the accounts;

• prepare the accounts on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the accounts and the Remuneration report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Under applicable law and regulations, the directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The directors are responsible for the integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of accounts may differ from legislation in other jurisdictions.

The accounts are published on the www.calculuscapital.com website, which is a website maintained by the Company's Investment Manager, Calculus Capital Limited. The maintenance and integrity of the website maintained by Calculus Capital Limited is, so far as it relates to the Company, the responsibility of Calculus Capital Limited. The work carried out by the auditor does not involve consideration of the maintenance and integrity of this website and accordingly, the auditors accept no responsibility for any changes that have occurred to the accounts since they were initially presented on the website. Visitors to the website need to be aware that legislation in the United Kingdom covering the preparation and dissemination of the accounts may differ from legislation in their own jurisdiction.

We confirm that, to the best of our knowledge: (a) the Accounts, prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and deficit of the Company; and (b) the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

On behalf of the Board

Philip StephensChairman

31 March 2014

The total column is the profit and loss account of the Company. The revenue and capital columns are provided as supplementary information in accordance with the AIC SORP.

All items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year.

There is no statement of total recognised gains and losses as there were no other gains and losses.

The relevant accompanying notes are an integral part of this statement.

The relevant accompanying notes are an integral part of this statement.

The relevant accompanying notes are an integral part of this statement.

The relevant accompanying notes are an integral part of this statement.

The accounts have been prepared under the historical cost convention, except for the valuation of investments at fair value, and in accordance with applicable UK Generally Accepted Accounting Principles (GAAP). The Directors have prepared the accounts on a basis compliant with the recommendations of the Statement of Recommended Practice January 2009 ("the SORP") for Investment Trust Companies and Venture Capital Trusts produced by the Association of Investment Companies ("AIC"). The accounts have been prepared on a going concern basis.

The Company has not prepared consolidated accounts and has accounted for its subsidiary Neptune-Calculus SPV Limited ("Neptune-Calculus SPV") as an investment on the grounds that its results are immaterial to the Company. It is in the process of being wound up.

As the Company's business is investing in financial assets with a view to profiting from their total return in the form of increases in fair value, investments are designated as fair value through profit or loss on initial recognition in accordance with Financial Reporting Standard 26 (FRS 26) Financial Instruments: Recognition and Measurement and International Private Equity and Venture Capital ('IPEVC') guidelines. Fair value is the amount for which an asset can be exchanged between knowledgeable, willing parties in an arm's length transaction. The Company manages and evaluates the performance of these investments on a fair value basis in accordance with its investment strategy, and information about the investments is provided on this basis to the Board of Directors.

Investments held at fair value through profit or loss are initially recognised at fair value, being the consideration given and excluding transaction or other dealing costs associated with the investment, which are expensed and included in the capital column of the Income Statement.

After initial recognition, investments, which are classified as fair value through profit or loss, are measured at fair value. Gains or losses on investments classified as fair value through profit or loss are recognised in the capital column of the Income Statement, and allocated to the capital reserve - other, and capital reserve - investment holding loss as appropriate.

Aggregate transaction and dealing costs included in disposals and additions are disclosed in note 8 to the accounts, as recommended by the SORP. All purchases and sales of quoted investments are accounted for on the trade date basis. All purchases and sales of unquoted investments are accounted for on the date that the sale and purchase agreement becomes unconditional.

For quoted investments, fair value is established by reference to bid, or last, market prices depending on the convention of the exchange on which the investment is quoted at the close of business on the balance sheet date.

Unquoted investments are valued using an appropriate valuation technique so as to establish what the transaction price would have been at the balance sheet date. Such investments are valued in accordance with the IPEVC guidelines. Primary indicators of fair value are derived from earnings or sales multiples, using discounted cash flows, recent arm's length market transactions by independent third parties, from net assets, or where appropriate, at cost for recent investments or the valuation as at the previous reporting date.

Premiums on loan stock investments and preference shares are accrued at fair value when the Company has the right to receive the premium and expects to do so.

Those venture capital investments that may be termed associated undertakings are not equity accounted for and are carried at fair value as determined by the Directors in accordance with the Company's accounting policy, as required by FRS 9 "Associates and Joint Ventures", where venture capital entities hold investments as part of an investment portfolio.

Dividends receivable on equity shares and on unquoted funds are recognised as income on the date on which the shares or units are marked as ex-dividend. Where no ex-dividend date is available, the income is recognised when the Company's right to receive it has been established.

Interest income on loan stock and dividends on preference shares are accrued on a daily basis. Provision is made against this income where recovery is doubtful.

Interest receivable from fixed income securities is recognised using the effective interest rate method.

Interest receivable on bank deposits is included in the accounts on an accruals basis.

Other income is credited to the revenue column of the Income Statement when the Company's right to receive the income is established.

All expenses are accounted for on an accruals basis. Expenses are charged through revenue in the Income Statement except as follows:

- costs which are incidental to the acquisition or disposal of an investment are taken to the capital column of the Income Statement;

- expenses are charged to the capital column in the Income Statement where a connection with the maintenance or enhancement of the value of the investments can be demonstrated. In this respect management fees have been allocated 75 per cent to the capital column and 25 per cent to the revenue column in the Income Statement, being in line with the Board's expected long-term split of returns, in the form of capital gains and income respectively, from the investment portfolio of the Company;

- expenses associated with the issue of shares are deducted from the Share premium account.

Capital reserve - other

The following are accounted for in this reserve:

- gains and losses on disposal of investments;

- transaction costs which are incidental to the acquisition of investments;

- 75% of management fee expenses, together with the related tax effect, is charged to the capital column of the Income Statement in accordance with the above policies; and

- 100% of performance incentive fees.

Capital reserve - investment holding loss

The following are accounted for in this reserve:

- movements in the fair value of investments held at the year end.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future have occurred at the balance sheet date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversals of the underlying timing differences can be deducted. Timing differences are differences between the Company's taxable profits and its results as stated in the accounts.

Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis.

No taxation liability arises on gains from sales of fixed asset investments by the Company by virtue of its venture capital trust status. However, the net revenue (excluding UK dividend income) accruing to the Company is liable to corporation tax at the prevailing rates.

Any tax relief obtained in respect of management fees allocated to capital is reflected in the capital reserve - other and a corresponding amount is charged against revenue. The relief is the amount by which corporation tax payable is reduced as a result of capital expenses.

Dividends to shareholders are accounted for in the year in which they are paid or approved in general meetings. Dividends payable to equity shareholders are recognised in the Reconciliation of Movements in Shareholders' Funds when they are paid, or have been approved by shareholders in the case of a final dividend and become a liability of the Company.

Where shares are purchased for cancellation, the consideration paid, including any directly attributable incremental costs, is deducted from distributable reserves. As required by the Companies Act 2006, the equivalent of the nominal value of shares cancelled is transferred to capital redemption reserve.

For the year ended 31 December 2013, Calculus Capital Limited waived £34,716 (2012: £2,384) of its fees. At 31 December 2013, there was £11,202 outstanding receivable from Calculus Capital Limited (31 December 2012: payable to Calculus Capital Limited £45,439). Details of the terms and conditions of the investment management agreement are set out under "Management" in the Directors' Report.

Further details of Directors' Remuneration can be found in the Directors' Remuneration Report.

At 31 December 2013, the Company had £1,210,181 (31 December 2012: £1,095,327) of excess management expenses to carry forward against future taxable profits. The deferred tax asset of £254,138 (31 December 2012: £262,878) has not been recognised due to the fact that it is unlikely the excess management fees will be set off in the foreseeable future.

The Company paid an interim dividend on 16 October 2013 of 1.0p per Ordinary Share (2012: 1.0p). The Directors are proposing a final dividend of 2.0p per Ordinary Share in respect of the year ended 31 December 2013 (2012: 2.0p). Subject to shareholder approval, the dividend will be paid on 6 June 2014 to shareholders on the register on 2 May 2014.

Basic and diluted earnings per Ordinary share is based on the net deficit on ordinary activities attributable to the Ordinary Shares of £12,000 (2012: return of £39,000) and on 11,328,771 (31 December 2012: 11,413,774) Ordinary Shares, being the weighted average number of Ordinary Shares in issue during the year.

Basic and diluted capital deficit per Ordinary Share is based on the net capital return for the year of £566,000 (2012: return of £34,000) and on 11,328,771 (31 December 2012:11,413,774) Ordinary Shares, being the weighted average number of Ordinary Shares in issue during the year.

Basic and diluted total return per Ordinary Share is based on the total deficit on ordinary activities attributable to the Ordinary Shares of £578,000 (2012: return of £73,000) and on 11,328,771 (31 December 2012: 11,413,774) Ordinary Shares, being the weighted average number of Ordinary Shares in issue during the year.

As the Company has not issued any convertible securities or share options, there is no dilutive effect on return per share.

Unquoted and money market investments includes unquoted shares valued at £nil in the Company's subsidiary Neptune-Calculus SPV. Neptune-Calculus SPV was incorporated on 29 November 2011 and is in the process of being wound up.

Note 18 to the accounts provides a detailed analysis of investments held at fair value through profit and loss in accordance with Financial Reporting Standard 29 'Financial Instruments: Disclosures'.

During the year, the Company incurred transaction costs of £nil (2012: £nil) on purchases of investments and £1,111 (2012: £202) on sales of investments. These amounts are included in "(losses)/gains on investments at fair value" as disclosed in the Income Statement.

The Company had the following interests of 3 per cent or more in the share capital of its portfolio companies:

* Included within this holding are 128,333 A ordinary shares and 1,762,856 AA Ordinary Shares held by Neptune-Calculus SPV which is wholly-owned by the Company.

During the year, the Company purchased for cancellation 4,052,635 Ordinary Shares of 10p (2012: 283,163) at a price of 54.83 pence per share (2012: 52.5 pence). The consideration was £2,233,175 (2012: £149,407) including stamp duty of £11,115 (2012: £745). Pursuant to the Enhanced buyback, the Company issued 3,930,990 shares at 56.53 pence per share and a further 81,094 shares were issued pursuant to a Top Up Offer at the same price ( 2012: none).

The Special reserve was created to (i) create a distributable reserve which can be used by the Company to fund purchases of its own shares; (ii) to enable the Company to offset the effects of any future unrealised losses on future dividends payable in respect of shares; and (iii) since the Company revoked its status as an investment company, for any other purpose. The Company is therefore able to make distributions out of the aggregate of its Revenue reserve, Special reserve and Capital reserves, excluding any gains arising on the valuation of unquoted investments. The cancellation of the Company's share premium account following the allotment of new Ordinary Shares pursuant to the Enhanced Share Buyback and Top Up Offer was confirmed by the court on 7 August 2013.

The basic and diluted net asset value per Ordinary Share is based on net assets (including current year revenue) of £5,486,000 (31 December 2012: £6,434,000) and on 11,311,329 (31 December 2012: 11,351,880) Ordinary Shares, being the number of Ordinary Shares in issue at the end of the year.

At 31 December 2013 and 2012 the Company did not have any financial commitments which had not been accrued.

The objective of the Company is to generate long term capital growth and tax free dividends for investors. The investment policy is to invest approximately 75 per cent of the Company's funds in a diversified portfolio of holdings in qualifying investments, whether unquoted or traded on AIM. Investments are made selectively across a diverse range of sectors in companies which have the potential to generate growth and enhance their value. The investments in a particular company may be made in loan stocks or preference shares as well as equity shares where it is felt this would enhance shareholder return. In accordance with the Company's risk averse approach, the Investment Manager will only invest when it believes it has identified the right investment opportunity. The balance of approximately 25 per cent of the Company's funds can be invested in a combination of Neptune income funds, a portfolio of similar income generating UK listed shares and money market instruments.

The ten largest holdings by value and the amounts invested in quoted equity, unquoted equity, unquoted bonds, unquoted preference shares, quoted funds and unquoted funds are set out in the Investment Portfolio. The Company's financial instruments comprise securities, cash balances and debtors and creditors that arise from its operations.

The Company has no exposure to foreign currency risk.

The principal risks the Company faces in its portfolio management activities are:

- Market price risk

- Interest rate risk

- Liquidity risk

- Credit risk

The Investment Manager's policies for managing these risks are summarised below and have been applied throughout the year. The Board keeps the risks under continual review through the provision of monthly management information and quarterly board meetings.

Market price risk arises from uncertainty about the future prices of financial instruments held in accordance with the Company's investment objectives. It represents the potential loss that the Company might suffer through holding market positions in the face of market movements. This risk is monitored by the Investment Manager on a regular basis and by the Board at meetings with the Investment Manager.

The Board reviews each investment purchase in the qualifying portfolio to ensure that any acquisition allows the Company to maintain an appropriate spread of other price risk and that it falls within the VCT qualifying criteria at the time of purchase. It considers the associated business risks of each investment. These include, but are not restricted to, the industry sector, management expertise and financial stability of each company.

The Company does not use derivative instruments to hedge against market price risk. The maximum potential exposure to market price risk is the value of the investment portfolio as at 31 December 2013 of £5,423,000 (31 December 2012: £6,371,000).

The Board believes that the Company's assets are mainly exposed to market price risk, as the Company holds most of its assets in the form of investments in VCT qualifying small UK companies whose equity shares are either quoted or valued by reference to the share prices of quoted comparable companies and are thus subject to market movements. The Board considers that investments in loan stock and/or preference shares may also be sensitive to changes in quoted share prices as the value of these financial instruments can be determined with reference to the enterprise value of the investee company which may be based on the value of quoted comparable companies.

The table below shows the impact upon profit and net assets if there were to be a 10 per cent (31 December 2012: 10 per cent) movement in overall share prices, and assumes:

- that each of the sub categories of instruments (shares and loan stocks other than liquidity funds) held by the Company produces an overall movement of 10 per cent, and

- that the actual portfolio of investments held by the Company is perfectly correlated to this overall movement in share prices. Shareholders should however note that this level of correlation is highly unlikely in reality.

If overall share prices fell/rose by 10 per cent (2012: 10 per cent), with all other variables held constant:

A decrease of £519,380 (31 December 2012: £611,208) in the net assets of the Company would have decreased investment management fees payable to the Investment Managers for the financial year under review by £18,178 (31 December 2012: £21,392). An increase of £519,380 (31 December 2012: 611,208) would have increased investment management fees payable by £nil (31 December 2012: £2,384).

The impact of a change of 10 per cent has been selected, as in current market conditions, an increase/(decrease) in the aggregate values of investments by 10 per cent is reasonably possible based on historical changes that have been observed.

Interest is earned on cash balances and money market funds and is linked to the banks' variable deposit rates. The board does not consider interest rate risk to be material. Interest rate risk arising on loan stock instruments is not considered significant, as the main risks on these investments are credit risk and market price risk. The Company does not have any interest bearing liabilities.

As required by Financial Reporting Standard 29 'Financial Instruments: Disclosures' an analysis of financial assets and liabilities, which identifies the risk of the Company's holding of such items is provided. The Company's financial assets comprise equity and preference shares, loan stock, cash and debtors. The interest rate profile of the Company's financial assets is given in the table below:

* Included within the loan stock balance as at 31 December 2013 is £nil (2012: £nil) loan stock held by the Company through its wholly owned subsidiary Neptune-Calculus SPV.

The variable rate is based on the banks' deposit rate, and applies to cash balances held and the money market funds. The benchmark rate which determines the interest payments received on interest bearing cash balances is the Bank of England base rate which was 0.5 per cent as at 31 December 2013 (31 December 2012: 0.5 per cent).

The investments the Company holds include AIM quoted securities where the liquidity is generally below that of securities listed/quoted on the main market and it also holds unquoted investments where there is no ready market for the securities. The ability of the Company to realise positions may therefore be restricted when there are no willing purchasers.

The Board, which monitors the Company's overall liquidity risk, seeks to ensure that an appropriate proportion of the Company's investment portfolio is invested in cash and readily realisable securities, which are sufficient to meet any funding commitments that may arise.

At 31 December 2013, the Company held £1,427,000 (31 December 2012: £1,474,000) in cash and readily realisable securities (including the investments in the Neptune Income and Neptune Quarterly Income Funds) to pay accounts payable and accrued expenses.

The failure of a counterparty to a transaction to discharge its obligations under that transaction could result in the Company suffering a loss. The Company manages this risk by ensuring that where an investment is made in an unquoted loan, it is made as part of the overall equity and debt package. The recoverability of the debt is assessed as part of the overall investment process and is then monitored on an ongoing basis by the Investment Manager who reports to the Board on any recoverability issues. It also ensures that cash at bank is held only with reputable banks with high quality external credit ratings. None of the Company's financial assets are secured by collateral or other credit enhancements. The total exposure to loan stocks and cash is set out above in the interest rate risk section.

All assets of the Company which are traded on a recognised exchange are held by Reyker Securities plc, the Company's custodian. The Board regularly monitors the Company's risk by reviewing assessments of the custodian submitted by the Investment Manager.

Investments held at fair value through profit and loss are valued in accordance with IPEVC guidelines as follows:

The valuation method used will be the most appropriate valuation methodology for an investment within its market, with regard to the financial health of the investment and the IPEVCA guidelines. Following a review of the performance of Triage Holdings Limited, the basis of valuation changed between 31 December 2012 and 31 December 2013 from a discounted cash flow to an expected recoverable amount basis. Following a review of Terrain Energy Limited, the basis of valuation changed between 31 December 2012 and 31 December 2013 from a discounted cash flow to a reserves multiple basis.

As required by Financial Reporting Standard 29 'Financial Instruments: Disclosures' (the Standard) an analysis of financial assets and liabilities, which identifies the risk of the Company's holding of such items is provided. The Standard requires an analysis of investments carried at fair value based on the reliability and significance of the information used to measure their fair value.

In order to provide further information on the valuation techniques used to measure assets carried at fair value, the measurement bases are categorised into a "fair value hierarchy" as follows:

- Quoted market prices in active markets - "Level 1"

Inputs to Level 1 fair values are quoted prices in active markets for identical assets. An active market is one in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. The Company's investments in AIM quoted equities, money market funds and the quoted Neptune funds are classified within this category.

- Valued using models with significant observable market inputs - "Level 2"

Inputs to Level 2 fair values are inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly. The Company has no investments classified within this category.

- Valued using models with significant unobservable market inputs - "Level 3"

Inputs to Level 3 fair values are unobservable inputs for the asset. Unobservable inputs may have been used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset at the measurement date (or market information for the inputs to any valuation models). As such, unobservable inputs reflect the assumptions the Company considers that market participants would use in pricing the asset. The Company's unquoted equities, preference shares and loan stock are classified within this category. As explained in note 1, unquoted investments are valued in accordance with the IPEVCA guidelines.

The table below shows movements in the assets measured at fair value based on Level 3 valuation techniques for which any significant input is not based on observable market data. During the year there were no transfers between levels 1, 2 or 3.

* Included within the fixed interest investments is loan stock purchased by the Company's wholly owned subsidiary Neptune-Calculus SPV Limited for £5,463, on which a loss of £nil has been recognised in the Income Statement.

* Included within the fixed interest investments is loan stock purchased by the Company's wholly owned subsidiary Neptune-Calculus SPV Limited for £5,463, on which a loss of £nil has been recognised in the Income Statement.

The Standard requires disclosure, by class of financial instruments, if the effect of changing one or more inputs to reasonably possible alternative assumptions would result in a significant change to the fair value measurement. The information used in determination of the fair value of Level 3 investments is chosen with reference to the specific underlying circumstances and position of the investee company. The portfolio has been reviewed and both downside and upside reasonable possible alternative assumptions have been identified and applied to the valuation of each of the unquoted investments. Applying the downside alternatives the value of the unquoted investment portfolio would be £290,000 (31 December 2012: £382,000) or 8.5 per cent (31 December 2012: 11.0 per cent) lower. Using the upside alternatives the value of the unquoted investment portfolio would be increased by £306,000 (31 December 2012: £382,000) or 9.0 per cent (31 December 2012: 11.0 per cent).

The Company finances its operations through its issued share capital and existing reserves. The only financial liabilities of the Company are creditors all of which are sterling denominated and are due within one year. The creditors are disclosed in note 11. No interest is paid on these liabilities.

All assets and liabilities are carried at fair value.

The Company's capital management objectives are to ensure that it will be able to continue as a going concern and to maximise the income and capital return to its Ordinary shareholders.

The Board, with the assistance of the Investment Manager monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes the planned level of gearing, which takes account of the Manager's views on the market; the need for new issues of equity shares; and the extent to which revenue in excess of that which is required to be distributed should be retained. The capital of the Company is made up of called up share capital and reserves as detailed on the balance sheet.

The Company's qualifying investments are managed by Calculus Capital Limited. John Glencross, a Director of the Company, has an interest in Calculus Capital Limited and is a Director of Terrain Energy Limited and Lime Technology Limited. The amounts paid to the Investment Manager are disclosed in note 3.

Calculus Capital Limited receives annual fees from Terrain Energy Limited and Lime Technology Limited Group Limited for the provision of John Glencross as a Director, as well as annual monitoring fees. Calculus Capital also receives an annual monitoring fee from MicroEnergy Generation Services Limited and Human Race Group Limited. Other funds under the management or advice of Calculus Capital Limited have also invested in Terrain Energy Limited, Lime Technology Limited, Human Race Group Limited, MicroEnergy Generation Services Limited, Secure Electrans Limited and Dryden Human Capital Group Limited. In the year ended 31 December 2013, the amount payable to Calculus Capital Limited which was attributable to the investment made by the Company was £4,519 (2012: £5,122) (excluding VAT) from Terrain Energy Limited, £2,889 (2012: £6,184) (excluding VAT) from Lime Technology Limited, £3,295 (2012: £2,442) from Human Race Group Limited and £674 (2012: £751) (excluding VAT) from MicroEnergy Generation Services Limited. Calculus Capital also receives fees relating to a directorship for Dryden Human Capital Limited. The amount which was attributable to the Company in (2012: £nil) of £608 (excluding VAT).

In the year ended 31 December 2013, Calculus Capital Limited received no arrangement fees (2012: £518) as a result of the Company's investment in Lime Technology Limited, an arrangement fee of £170 (2012: £7,500) as a result of the Company's investment in Secure Electrans Limited and no arrangement fees (2012: £12,000) as a result of the Company's investment in Human Race Group Limited.

As mentioned in the Directors' Report, the Company may co-invest with other funds managed and advised by Calculus Capital Limited. The allocation between different funds takes into account such factors as the funds available for investment and the time horizon of these funds, the size of a potential investment, and the existing sector exposure of the various funds.

These are not full accounts in terms of Section 434 of the Companies Act 2006. Full audited accounts for the year ended 31 December 2012 have been lodged with the Registrar of Companies. The Report and Accounts for the year ended 31 December 2013 will be sent to shareholders shortly and will be available for inspection at 104 Park Street, London, W1K 6NF, the Company's registered office, and will be published on www.calculuscapital.com, a website maintained by the Company's Investment Manager, Calculus Capital Limited. The audited accounts for the year ended 31 December 2013 contain an unqualified audit report.