Neptune-Calculus Income & Growth Regulatory News (NEP)

22 Mar 2007 17:05

Neptune-Calculus Income &Growth VCT22 March 2007 Neptune-Calculus Income & Growth VCT plc 22 March 2007 Unaudited preliminary results for the year ended 31 December 2006 Financial Highlights Year ended 31 December 2006 Return per Ordinary Share 12.5p Net assets per Ordinary Share 113.4pProposed dividend 3.2pCumulative dividends paid and proposed 5.0p At 15 March 2007* Unaudited net asset value per Ordinary Share 116.4p Year ended 31 December 2006 Return per C Share 10.2p Net assets per C Share 103.6pProposed dividend 1.0pCumulative dividends paid and proposed 1.0p At 15 March 2007* Unaudited net asset value per C Share 105.3p *Being the latest practicable date to prior to publication and excluding netrevenue after 31 December 2006 Chairman's Statement I am delighted to report on our period of activity which ended on 31 December2006. As I reported at the time of our interim statement, your Company closedits C Share offering on 5 April 2006 raising £8.4 million (before costs). Thisfund raising will enable growth and diversification of the Company's investmentportfolio, create economies of scale for all shareholders and allow us to spreadthe fixed overhead costs over a larger pool of assets and improve the potentialfor paying dividends. Investment performance The Company's aim is to achieve long term capital growth and generate tax freedividends for private investors. In our original prospectus we stated ourintention to be a generalist VCT company investing in a diversified portfolio ofunquoted companies in the UK including AIM traded stocks. The objective is toavoid investing in companies where the risk profile is regarded as beingunacceptably high or where the prospective time to realisation is unacceptablylong. As you may be aware, the Company must have invested at least 70% by valueof its total investments in the Ordinary Share Fund portfolio in VCT qualifyingholdings by 31 December 2007 and maintain this thereafter. As at 31 December2006, £1,527,642 had been invested in qualifying holdings representing 40%(calculated on a H.M. Revenue & Customs basis) of the Ordinary Share Fundinvestment portfolio. Since the period end we have invested in a further threequalifying companies which brings the percentage invested to 51.5% (calculatedon a H.M. Revenue & Customs basis). The C Share Fund similarly, must have invested 70% by value of its totalinvestments in qualifying holdings by 31 December 2008. The C Share Fundinvestment portfolio is at an investment level of 22.4% (calculated on a H.M.Revenue & Customs basis) as at 31 December 2006 and since the period end we haveinvested in a further three qualifying companies which brings the percentageinvested to 34.2% (calculated on a H.M. Revenue & Customs basis). During the year, both the Ordinary Share Fund and the C Share Fund outperformedthe AIM All-Share Index over the comparable period. The balance of the funds raised, described as non-qualifying investments, hasbeen managed by Neptune Investment Management Limited. We are invested in theNeptune Income Fund Income A Class (the Income Fund), the Neptune QuarterlyIncome Fund (the Quarterly Fund) Income Units and a range of individual FTSE 100/ FTSE 250 companies with a view to generating income in the portfolio. Duringthe year, both the Income Fund and the Quarterly Fund have outperformed the FTSEAll-Share Index and the IMA sector average over the comparable period. On the Ordinary Share Fund, total income for the period amounted to £139,000which was largely derived from dividend income on our quoted investments. Netassets per Ordinary Share have risen from 101.7 pence at the start of the yearto 113.4 pence at 31 December 2006. Gains on investments in the period amountedto £479,000 (realised £305,000, unrealised £174,000). The Directors' policy isto pay, when possible, dividends out of income and realised gains. An interimdividend of 0.8 pence per share was paid during 2006 in respect of the OrdinaryShares and the Board proposes to pay a final dividend in respect of 2006 of 3.2pence per share, subject to shareholder approval, to Ordinary shareholders. The C Share Fund total income for the period amounted to £223,000 and again thiswas largely derived from dividend income from our quoted investments. The netasset value per share was 103.6 pence at 31 December 2006 and the Board proposesto pay a final dividend in respect of 2006 of 1 pence per share, subject toshareholder approval, to C shareholders. Subject to the approval of shareholders at the Company's annual general meetingon 22 May 2007, the final dividends will be paid on 30 May 2007 to shareholderson the register at 4 May 2007. In common with many other VCTs, to facilitate the payment of dividends out ofrealised gains the Company has now relinquished its investment company status. The Annual General Meeting will be held on 22 May 2007 and I hope that many ofour shareholders will be able to attend. Outlook We believe that the outlook for the Company is excellent. Good progress has beenachieved in our investment programme. We have enjoyed some initial success inthe portfolio of qualifying investments and our investments in the NeptuneIncome Fund Income A Class, Neptune Quarterly Income Fund Income Units and ourmanaged portfolio of UK income generating shares outperformed its relevantbenchmarks and I am pleased to report that the unaudited net asset value perOrdinary Share (excluding current period revenue) as at 15 March 2007 was 116.4pence and the unaudited net asset value per C Share (excluding current periodrevenue) as at 15 March 2007 was 105.3 pence. We look forward to reporting further progress in the current year towards thetarget of 70% of funds being invested in qualifying investments. The Managersare seeing a good flow of potential investments and are able to exercise aproper degree of selectivity with the aim of maximising returns and thereforefuture dividends. Philip Stephens Unaudited Income Statement for the year ended 31 December 2006 Ordinary Share Fund ----------------- ---------------- Year ended Period ended 31 December 31 December 2006 2005* ----------------- ---------------- -------- ------- ------- ------- ------- ------ Revenue Capital Total Revenue Capital Total -------- ------- ------- ------- ------- ------ £'000 £'000 £'000 £'000 £'000 £'000 -------- ------- ------- ------- ------- ------Gains on investmentsat fair value - 479 479 - 303 303-------------- -------- ------- ------- ------- ------- ------Income 139 - 139 104 - 104-------------- -------- ------- ------- ------- ------- ------Investment managementfee (23) (68) (91) (11) (33) (44)-------------- -------- ------- ------- ------- ------- ------Other expenses (51) - (51) (80) - (80)-------------- -------- ------- ------- ------- ------- ------Return on ordinaryactivities beforetaxation 65 411 476 13 270 283-------------- -------- ------- ------- ------- ------- ------Taxation on ordinaryactivities (3) - (3) - - --------------- -------- ------- ------- ------- ------- ------Return attributable toequity shareholders 62 411 473 13 270 283-------------- -------- ------- ------- ------- ------- ------Return per OrdinaryShare 1.65p 10.82p 12.47p 0.41p 8.49p 8.90p-------------- -------- ------- ------- ------- ------- ------ * The Company was incorporated on 30 November 2004 and commenced investing on 22June 2005 C Share Fund ----------------- ---------------- Period ended Period ended 31 December 31 December 2006* 2005 ----------------- ---------------- -------- ------- ------- ------- ------- ------ Revenue Capital Total Revenue Capital Total -------- ------- ------- ------- ------- ------ £'000 £'000 £'000 £'000 £'000 £'000 -------- ------- ------- ------- ------- ------Gains on investmentsat fair value - 778 778 - - --------------- -------- ------- ------- ------- ------- ------Income 223 - 223 - - --------------- -------- ------- ------- ------- ------- ------Investment managementfee (34) (103) (137) - - --------------- -------- ------- ------- ------- ------- ------Other expenses (102) - (102) - - --------------- -------- ------- ------- ------- ------- ------Return on ordinaryactivities beforetaxation 87 675 762 - - --------------- -------- ------- ------- ------- ------- ------Taxation on ordinaryactivities (2) - (2) - - --------------- -------- ------- ------- ------- ------- ------Return attributable toequity shareholders 85 675 760 - - --------------- -------- ------- ------- ------- ------- ------Return per C Share 1.14p 9.10p 10.24p - - --------------- -------- ------- ------- ------- ------- ------ * The first allotment of C Shares took place on 8 February 2006 and the first CShare investment was made on 20 April 2006 Total -------------- ----------------- Year ended Period ended 31 December 31 December 2006* 2005** ----------------- ---------------- -------- ------- ------- ------- ------- ------ Revenue Capital Total Revenue Capital Total -------- ------- ------- ------- ------- ------ £'000 £'000 £'000 £'000 £'000 £'000 -------- ------- ------- ------- ------- ------Gains on investmentsat fair value - 1,257 1,257 - 303 303-------------- -------- ------- ------- ------- ------- ------Income 362 - 362 104 - 104-------------- -------- ------- ------- ------- ------- ------Investment managementfee (57) (171) (228) (11) (33) (44)-------------- -------- ------- ------- ------- ------- ------Other expenses (153) - (153) (80) - (80)-------------- -------- ------- ------- ------- ------- ------Return on ordinaryactivities beforetaxation 152 1,086 1,238 13 270 283-------------- -------- ------- ------- ------- ------- ------Taxation on ordinaryactivities (5) - (5) - - --------------- -------- ------- ------- ------- ------- ------Return attributable toequity shareholders 147 1,086 1,233 13 270 283-------------- -------- ------- ------- ------- ------- ------ \* The first allotment of C Shares took place on 8 February 2006 and the first CShare investment was made on 20 April 2006 ** The Company was incorporated on 30 November 2004 and commenced investing on22 June 2005 The total column of this statement is the profit and loss account of theCompany. All revenue and capital items shown in the above statement derive fromcontinuing operations. No operations were acquired or discontinued during theyear. Unaudited Reconciliation of movements in shareholders' funds for the year ended 31 December 2006 Ordinary Share Fund Share Share Special Capital Revenue Total capital premium reserve reserve reserve ------ ------- ------- ------- ------- ------ £'000 £'000 £'000 £'000 £'000 £'000 ------ ------- ------- ------- ------- ------For the year1January 2006 to31 December 2006--------1 January 2006 379 21 3,187 270 1 3,858-------- Net returnafter taxation - - - 411 62 473for the year -------- Dividends paid - - - - (30) (30)-------- ------- -------- ------- ------- ------- ------31 December2006 379 21 3,187 681 33 4,301-------- ------- -------- -------- ------- ------ ------ For the period 30 November 2004 to31 December 2005--------30 November 2004 - - - - - --------- Issue of shares 379 - - - - 379-------- Premium onissue of - 3,413 - - - 3,413shares --------Expenses ofshare issue - (205) - - - (205)--------Transfer tospecial - (3,187) 3,187 - - -reserve --------Net returnafter taxation - - - 270 13 283for the period --------Dividends paid - - - - (12) (12)-------- ------- -------- ------- ------- ------- ------31 December2005 379 21 3,187 270 1 3,858-------- ------- -------- -------- ------- ------ ------ C Share Fund Share Share Special Capital Revenue Total capital premium reserve reserve reserve ------ ------- ------- ------- ------- ------ £'000 £'000 £'000 £'000 £'000 £'000 ------ ------- ------- ------- ------- ------For the period8 February 2006 to 31 December 2006--------8 February 2006 - - - - - --------- Issue of shares 839 - - - - 839-------- Premium onissue ofshares - 7,554 - - - 7,554-------- Expenses ofshare issue - (457) - - - (457)-------- Transfer tospecial - (7,097) 7,097 - - - reserve -------- Net returnafter taxation - - - 675 85 760for the period -------- Dividends paid - - - - - --------- ------- -------- -------- ------- ------ ------31 December2006 839 - 7,097 675 85 8,696-------- ------- -------- -------- ------- ------ ------ Total Share Share Special Capital Revenue Total capital premium reserve reserve reserve ------ ------- ------- ------- ------- ------ £'000 £'000 £'000 £'000 £'000 £'000 ------ ------- ------- ------- ------- ------For the year ended31 December 2006 -------- 1 January 2006 379 21 3,187 270 1 3,858-------- Issue of shares 839 - - - - 839-------- Premium onissue of - 7,554 - - - 7,554shares-------- Expenses ofshare issue - (457) - - - (457)-------- Transfer tospecial - (7,097) 7,097 - - -reserve -------- Net returnafter taxation - - - 1,086 147 1,233for the year -------- Dividends paid - - - - (30) (30)-------- ------- -------- -------- ------- ------ ------31 December2006 1,218 21 10,284 1,356 118 12,997-------- ------- -------- -------- ------- ------ ------ For the period30 November 2004 to31 December 2005-------- 30 November 2004 - - - - - ---------Issue of shares 379 - - - - 379--------Premium onissue of - 3,413 - - - 3,413shares--------Expenses ofshare issue - (205) - - - (205)--------Transfer tospecial - (3,187) 3,187 - - -reserve--------Net returnafter taxation - - - 270 13 283for the period--------Dividends paid - - - - (12) (12)-------- ------- -------- -------- ------- ------ ------31 December2005 379 21 3,187 270 1 3,858-------- ------- -------- -------- ------- ------ ------ Unaudited Balance Sheet as at 31 December 2006 Ordinary Share Fund 31 December 31 December -------------------- 2006 2005 ------------ ------------ £'000 £'000 -------------------- ------------ ------------Fixed Assets-------------------- ------------ ------------Investments at fair value through profitor loss 4,272 1,739-------------------- ------------ ------------Current Assets-------------------- ------------ ------------Debtors 9 95-------------------- ------------ ------------Cash at bank 59 2,208-------------------- ------------ ------------ 68 2,303 -------------------- ------------ ------------Creditors: Amounts falling due-------------------- ------------ ------------within one year-------------------- ------------ ------------Creditors (39) (184)-------------------- ------------ ------------Net Current Assets 29 2,119-------------------- ------------ ------------Net Assets 4,301 3,858-------------------- ------------ ------------ -------------------- ------------ ------------Represented by:-------------------- ------------ ------------CALLED UP SHARE CAPITAL AND RESERVES-------------------- ------------ ------------Share capital 379 379-------------------- ------------ ------------Share premium 21 21-------------------- ------------ ------------Special reserve 3,187 3,187-------------------- ------------ ------------Capital reserve realised 204 (33)-------------------- ------------ ------------Capital reserve unrealised 477 303-------------------- ------------ ------------Revenue reserve 33 1-------------------- ------------ ------------Total equity shareholders' funds 4,301 3,858-------------------- ------------ ------------Net asset value per Ordinary Share 113.37p 101.71p-------------------- ------------ ------------ C Share Fund 31 December 31 December-------------------- 2006 2005 ------------ ------------ £'000 £'000 -------------------- ------------ ------------Fixed Assets-------------------- ------------ ------------Investments at fair value through profitor loss 8,707 --------------------- ------------ ------------Current Assets --------------------- ------------ ------------Debtors 18 --------------------- ------------ ------------Cash at bank 160 --------------------- ------------ ------------ 178 - -------------------- ------------ ------------Creditors: Amounts falling due-------------------- ------------ ------------within one year-------------------- ------------ ------------Creditors (189) --------------------- ------------ ------------Net Current Liabilities (11) --------------------- ------------ ------------Net Assets 8,696 --------------------- ------------ ------------ -------------------- ------------ ------------Represented by:-------------------- ------------ ------------CALLED UP SHARE CAPITAL AND RESERVES-------------------- ------------ ------------Share capital 839 --------------------- ------------ ------------Share premium - --------------------- ------------ ------------Special reserve 7,097 --------------------- ------------ ------------Capital reserve realised (88) --------------------- ------------ ------------Capital reserve unrealised 763 --------------------- ------------ ------------Revenue reserve 85 --------------------- ------------ ------------Total equity shareholders' funds 8,696 --------------------- ------------ ------------Net asset value per C Share 103.61p --------------------- ------------ ------------ Total 31 December 31 December-------------------- 2006 2005 ------------ ------------ £'000 £'000 -------------------- ------------ ------------Fixed Assets-------------------- ------------ ------------Investments at fair value through profitor loss 12,979 1,739-------------------- ------------ ------------Current Assets-------------------- ------------ ------------Debtors 27 95-------------------- ------------ ------------Cash at bank 219 2,208-------------------- ------------ ------------ 246 2,303 -------------------- ------------ ------------Creditors: Amounts falling due-------------------- ------------ ------------within one year-------------------- ------------ ------------Creditors (228) (184)-------------------- ------------ ------------Net Current Assets 18 2,119-------------------- ------------ ------------Net Assets 12,997 3,858-------------------- ------------ ------------ -------------------- ------------ ------------Represented by:-------------------- ------------ ------------CALLED UP SHARE CAPITAL AND RESERVES-------------------- ------------ ------------Share capital 1,218 379-------------------- ------------ ------------Share premium 21 21-------------------- ------------ ------------Special reserve 10,284 3,187-------------------- ------------ ------------Capital reserve realised 116 (33)-------------------- ------------ ------------Capital reserve unrealised 1,240 303-------------------- ------------ ------------Revenue reserve 118 1-------------------- ------------ ------------Total equity shareholders' funds 12,997 3,858-------------------- ------------ ------------ Unaudited Cash Flow Statement for the year ended 31 December 2006 Ordinary Share Fund ------------ Year ended Period ended 31 December 31 December ---------------------- 2006 2005 ------------ ------------ £'000 £'000 ---------------------- ------------ ------------Operating activities---------------------- ------------ ------------Investment income received 110 16---------------------- ------------ ------------Deposit income received 25 86---------------------- ------------ ------------Investment management fees paid (118) ----------------------- ------------ ------------Administration fees paid (10) ----------------------- ------------ ------------Other cash payments (57) (49)---------------------- ------------ ------------Net cash (outflow)/inflow from operatingactivities (50) 53---------------------- ------------ ------------Taxation (3) ----------------------- ------------ ------------Investing activities---------------------- ------------ ------------Purchase of investments (3,140) (1,436)---------------------- ------------ ------------Sale of investments 1,086 ----------------------- ------------ ------------Net cash outflow from investingactivities (2,054) (1,436)---------------------- ------------ ------------Equity dividends paid (30) (12)---------------------- ------------ ------------Financing---------------------- ------------ ------------Proceeds of share issue - 3,792---------------------- ------------ ------------Costs of share issue (12) (189)---------------------- ------------ ------------Net cash (outflow)/inflow from financing (12) 3,603---------------------- ------------ ------------(Decrease)/increase in cash (2,149) 2,208---------------------- ------------ ------------ C Share Fund ----------------------- ------------ ------------ Period ended Period ended 31 December 31 December ----------------------- 2006 2005 ------------ ------------ £'000 £'000 ----------------------- ------------ ------------Operating activities----------------------- ------------ ------------Investment income received 167 ------------------------ ------------ ------------Deposit income received 43 ------------------------ ------------ ------------Investment management fees paid (92) ------------------------ ------------ ------------Administration fees paid (14) ------------------------ ------------ ------------Other cash payments (58) ------------------------ ------------ ------------Net cash inflow from operatingactivities 46 ------------------------ ------------ ------------Taxation (2) ------------------------ ------------ ------------Investing activities----------------------- ------------ ------------Purchase of investments (8,767) ------------------------ ------------ ------------Sale of investments 838 ------------------------ ------------ ------------Net cash outflow from investingactivities (7,929) ------------------------ ------------ ------------Financing----------------------- ------------ ------------Proceeds of share issue 8,393 ------------------------ ------------ ------------Costs of share issue (348) ------------------------ ------------ ------------Net cash inflow from financing 8,045 ------------------------ ------------ ------------Increase in cash 160 ------------------------ ------------ ------------ Total --------------------- ------------- ------------ Year ended Period ended 31 December 31 December --------------------- 2006 2005 ------------- ------------ £'000 £'000 --------------------- ------------- ------------Operating activities--------------------- ------------- ------------Investment income received 277 16--------------------- ------------- ------------Deposit income received 68 86--------------------- ------------- ------------Investment management fees paid (210) ---------------------- ------------- ------------Administration fees paid (24) ---------------------- ------------- ------------Other cash payments (115) (49)--------------------- ------------- ------------Net cash (outflow)/inflow from operatingactivities (4) 53--------------------- ------------- ------------Taxation (5) ---------------------- ------------- ------------Investing activities--------------------- ------------- ------------Purchase of investments (11,907) (1,436)--------------------- ------------- ------------Sale of investments 1,924 ---------------------- ------------- ------------Net cash outflow from investingactivities (9,983) (1,436)--------------------- ------------- ------------Equity dividends paid (30) (12)--------------------- ------------- ------------Financing--------------------- ------------- ------------Proceeds of share issue 8,393 3,792--------------------- ------------- ------------Costs of share issue (360) (189)--------------------- ------------- ------------Net cash inflow from financing 8,033 3,603--------------------- ------------- ------------(Decrease)/increase in cash (1,989) 2,208--------------------- ------------- ------------ 1. Preliminary statement of annual results This preliminary statement is not the Company's statutory accounts. The above results for the year ended 31 December 2006 have been agreed with the Auditorsand are an abridged version of the Company's full draft accounts, which have not yet been approved, audited or filed with the Registrar of Companies. The statutory accounts for the year ended 31 December 2005 have been delivered to the Registrar of Companies and those ended 31 December 2006 will be dispatched to shareholders shortly. The statutory accounts for the year ended31 December 2005 received an audit report which was unqualified, did not includea reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report, and did not contain statements under Section 237 (2) and (3) of the Companies Act 1985. 2. The principal accounting policies, all of which have been appliedconsistently throughout the year, in the preparation of this preliminarystatement are set out below: Basis of accounting The financial statements have been prepared under the historical costconvention, except where stated below and in accordance with applicable UKaccounting standards. Whilst Venture Capital Trusts ("VCTs") are not includedwithin the scope of the Statement of Recommended Practice ("the SORP") forInvestment Trust Companies produced by the Association of Investment TrustCompanies ("AIC"), VCTs share many of the characteristics of Investment TrustCompanies and so the Directors have prepared the financial statements on a basiscompliant with the recommendations of the SORP. Changes in Presentation The Statement of Total Return is now called the Income Statement, and the Totalcolumn is now the profit and loss account of the Company. Dividends payable to equity shareholders are no longer reflected in the IncomeStatement, they are shown in the Reconciliation of Movements in Shareholders'Funds which is now presented as a primary statement. With effect from 1 January 2006 the Company has adopted the following FinancialReporting Standards ("FRS"): FRS 21 Events after the balance sheet date Dividends payable to shareholders are recognised as a liability in the period inwhich they are paid or approved in general meetings. Previously, dividends paidby the Company were accounted for in the period in which the dividend had beendeclared. FRS 25 Financial Instruments: Disclosure and Presentation and FRS 26 FinancialInstruments: Measurement All investments held by the Company are classified as "fair value through profitor loss". For investments actively traded in organised financial markets, fairvalue is generally determined by reference to Stock Exchange quoted market bidprices at the close of business on the balance sheet date. Although not arequirement until now, the Company had previously valued its investments at bidvalue to be consistent with the basis of valuation required in its financialstatements for the year ending 31 December 2006. No changes to the comparative figures have been required as a result of thesechanges in accounting policies. Investments As the Company's business is investing in financial assets with a view toprofiting from their total return in the form of increases in fair value,financial assets are designated as fair value through profit or loss on initialrecognition in accordance with FRS 26. The Company manages and evaluates theperformance of these investments on a fair value basis in accordance with itsinvestment strategy, and information about the investments is provided on thisbasis to the Board of Directors. Investments held at fair value through profit or loss are initially recognisedat fair value, being the consideration given and excluding material transactionor other dealing costs associated with the investment, which are expensed andincluded in the capital column of the Income Statement. After initial recognition, investments, which are classified as fair valuethrough profit or loss, are measured at fair value. Gains or losses oninvestments classified as fair value through profit or loss are recognised inthe capital column of the Income Statement, and allocated to the realised andunrealised capital reserves as appropriate. All purchases and sales of investments are accounted for on the trade datebasis. For quoted investments fair value is established by reference to bid, or last,market prices depending on the convention of the exchange on which theinvestment is quoted. Unquoted investments are valued using an appropriate valuation technique so asto establish what the transaction price would have been at the balance sheetdate. Such investments are valued with the International Private Equity andVenture Capital Association (''IPEVCA'') guidelines. Primary indicators of fairvalue are derived from earnings multiples, recent arm's length markettransactions or from net assets. Where fair value cannot be reliably measuredthe investment will be carried at cost for recent investments or the valuationas at the previous reporting date. Those venture capital investments that may be termed associated undertakings arecarried at fair value as determined by the Directors in accordance with theCompany's accounting policy and are not equity accounted as required by theCompanies Act 1985. The Directors consider that, as these investments are heldas part of the Company's portfolio with a view to the ultimate realisation ofcapital gains, equity accounting would not give a true and fair view of theCompany's interests in these investments. Quantification of the effect of thisdeparture is not practicable. Carrying investments at fair value is specificallypermitted under FRS 9 "Associates and Joint Ventures", where venture capitalentities hold investments as part of a portfolio. The Company's policy is to capitalise transaction costs on acquisition and theprofit or loss on disposal is calculated net of transaction costs on disposal.FRS 26 requires that transaction costs for financial assets at fair valuethrough profit or loss be expensed. The total of such expenses, showing thetotal amounts included in disposals and additions are disclosed separately inthe notes to the statutory accounts, as recommended by the revised SORP. Income Dividends receivable on listed and quoted equity shares and on unlisted fundsare recognised as income on the date on which the shares or units are marked asex-dividend. Where no ex- dividend date is available, the income is recognisedwhen the Company's right to receive it has been established. Interest receivable from fixed income securities is recognised in income usingthe effective interest rate method. Interest receivable on bank deposits is included in the accounts on an accrualsbasis. Other income is credited to the revenue column of the Income Statement when theCompany's right to receive the income is established. Expenses All expenses are accounted for on an accruals basis. Expenses are chargedthrough revenue in the Income Statement except as follows: •expenses which are incidental to the acquisition or disposal of an investment are taken to the capital column of the Income Statement; •expenses are charged to the capital column in the Income Statement where a connection with the maintenance or enhancement of the value of the investments can be demonstrated. In this respect management fees have been allocated 75% to capital reserve (realised) and 25% 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 share premium. Capital reserve Realised The following are accounted for as realised returns: • gains and losses on realisation of investments; and • expenses, together with the related tax effect, charged to this account in accordance with the above policies. Unrealised The following are accounted for as unrealised returns: • increases and decreases in the valuation of investments held at the year end. Taxation Deferred tax is recognised in respect of all timing differences that haveoriginated but not reversed at the balance sheet date where transactions orevents that result in an obligation to pay more tax in the future have occurredat the balance sheet date. This is subject to deferred tax assets only beingrecognised if it is considered more likely than not that there will be suitableprofits from which the future reversals of the underlying timing differences canbe deducted. Timing differences are differences between the Company's taxableprofits and its results as stated in the accounts. Deferred tax is measured at the average tax rates that are expected to apply inthe periods in which the timing differences are expected to reverse, based ontax rates and laws that have been enacted or substantially enacted by thebalance sheet date. Deferred tax is measured on a non-discounted basis. No taxation liability arises on gains from sales of fixed asset investments bythe Company by virtue of its venture capital trust status. However, the netrevenue (excluding UK dividend income) accruing to the Company is liable tocorporation tax at the prevailing rates. Dividends Dividends to shareholders are accounted for in the period in which they are paidor approved in general meetings. This represents a change in accounting policyas explained in the "Basis of accounting" note above. Dividends payable to equity shareholders are recognised in the Reconciliation ofMovements in Shareholders' Funds when they are paid, or have been approved byshareholders in the case of a final dividend and become a liability of theCompany. 3. Income Ordinary Share Fund------------------------ ------------- ------------- Year ended Period ended 31 December 31 December ------------------------ 2006 2005 ------------- ------------- £'000 £'000 ------------------------ ------------- -------------Income from listed investments------------------------ ------------- -------------UK dividend income 98 16------------------------ ------------- -------------Unfranked investment income 12 2------------------------ ------------- ------------- 110 18 ------------------------ ------------- -------------Income from unlisted investments------------------------ ------------- -------------Unfranked investment income 4 ------------------------- ------------- ------------- 4 - ------------------------ ------------- -------------Other income------------------------ ------------- -------------Bank interest 25 86------------------------ ------------- -------------Total income 139 104------------------------ ------------- -------------Total income comprises------------------------ ------------- -------------Dividends 110 16------------------------ ------------- -------------Interest 29 88------------------------ ------------- ------------- 139 104 ------------------------ ------------- ------------- C Share Fund------------------------ ------------- ------------- Period ended Period ended 31 December 31 December ------------------------ 2006 2005 ------------- ------------- £'000 £'000 ------------------------ ------------- -------------Income from listed investments------------------------ ------------- -------------UK dividend income 129 ------------------------- ------------- -------------Unfranked investment income 12 ------------------------- ------------- ------------- 141 - ------------------------ ------------- -------------Income from unlisted investments------------------------ ------------- -------------Unfranked investment income 39 ------------------------- ------------- ------------- 39 - ------------------------ ------------- -------------Other income------------------------ ------------- -------------Bank interest 43 ------------------------- ------------- -------------Total income 223 ------------------------- ------------- -------------Total income comprises------------------------ ------------- -------------Dividends 179 ------------------------- ------------- -------------Interest 44 ------------------------- ------------- ------------- 223 - ------------------------ ------------- ------------- Total ------------------------ ------------- ------------- Year ended Period ended 31 December 31 December ------------------------ 2006 2005 ------------- ------------- £'000 £'000 ------------------------ ------------- -------------Income from listed investments------------------------ ------------- -------------UK dividend income 227 16------------------------ ------------- -------------Unfranked investment income 24 2------------------------ ------------- ------------- 251 18 ------------------------ ------------- -------------Income from unlisted investments------------------------ ------------- -------------Unfranked investment income 43 ------------------------- ------------- ------------- 43 - ------------------------ ------------- -------------Other income------------------------ ------------- -------------Bank interest 68 86------------------------ ------------- -------------Total income 362 104------------------------ ------------- -------------Total income comprises------------------------ ------------- -------------Dividends 289 16------------------------ ------------- -------------Interest 73 88------------------------ ------------- ------------- 362 104 ------------------------ ------------- ------------- 4. Return per Share -------------- ------------------ ----------------- Year ended Period ended 31 December 31 December -------------- 2006 2005 ------------------ ----------------- ------- ------- ------- ------ Revenue Capital Total Revenue Capital Total -------------- -------- ------- ------- ------- ------- ------ pence pence pence pence pence pence -------------- -------- ------- ------- ------- ------- ------Ordinary Share 1.65 10.82 12.47 0.41 8.49 8.90-------------- -------- ------- ------- ------- ------- ------C Share 1.14 9.10 10.24 - - --------------- -------- ------- ------- ------- ------- ------ Ordinary Shares Revenue return per Ordinary Share is based on the net revenue on ordinaryactivities attributable to the Ordinary Shares of £62,000 (31 December 2005:£13,000) and on 3,793,562 (31 December 2005: 3,177,455) Ordinary Shares, beingthe weighted average number of Ordinary Shares in issue during the year. Capital return per Ordinary Share is based on the net capital gain for theperiod of £411,000 (31 December 2005: £270,000) and on 3,793,562 (31 December2005: 3,177,455) Ordinary Shares, being the weighted average number of OrdinaryShares in issue during the year. The total return per Ordinary Share is based on the total return on ordinaryactivities attributable to the Ordinary Shares of £473,000 (31 December 2005:£283,000) and on 3,793,562 (31 December 2005: 3,177,455) Ordinary Shares, beingthe weighted average number of Ordinary Shares in issue during the year. C Shares Revenue return per C Share is based on the net revenue on ordinary activitiesattributable to the C Shares of £85,000 and on 7,417,605 C Shares, being theweighted average number of C Shares in issue during the period. Capital return per C Share is based on the net capital gain for the period of£675,000 and on 7,417,605 C Shares, being the weighted average number of CShares in issue during the period. Total return per C Share is based on the total return on ordinary activitiesattributable to the C Shares of £760,000 and on 7,417,605 C Shares, being theweighted average number of C Shares in issue during the period. 5. Net asset value per share ------------- -------------- 31 December 31 December ----------------------- 2006 2005 ------------- -------------- pence pence ----------------------- ------------- --------------Ordinary Shares of 10p each 113.4 101.7----------------------- ------------- --------------C Shares of 10p each 103.6 ------------------------ ------------- -------------- The basic net asset value per Ordinary Share is based on net assets (includingcurrent period revenue) of £4,301,000 (31 December 2005: £3,858,000) and on3,793,562 (31 December 2005: 3,793,562) Ordinary Shares, being the number ofshares in issue at the end of the year. The basic net asset value per C Share is based on net assets (including currentperiod revenue) of £8,696,000 and on 8,393,209 C Shares, being the number ofshares in issue at the end of the period. 6. Dividends -------------------- --------------- --------------- Year ended Period ended 31 December 31 December -------------------- 2006 2005 --------------- --------------- £'000 £'000 -------------------- --------------- ---------------Declared and paid:-------------------- --------------- ---------------Interim dividend of 0.8p (2005: 1p) pereligible Ordinary Share 30 12-------------------- --------------- ---------------Proposed:-------------------- --------------- ---------------Final dividend of 3.2p (2005: 0p) pereligible Ordinary Share 121 --------------------- --------------- ---------------Final dividend of 1p (2005: 0p) pereligible C Share 84 --------------------- --------------- --------------- The Directors will be recommending final dividends as noted above to theOrdinary shareholders and to the C shareholders in respect of the year ended 31December 2006. The final dividends are not included as a liability in theseaccounts in accordance with the accounting policies. The final dividend proposed on the Ordinary Share Fund will be made up of 0.8pence from income and 2.4 pence from capital. The final dividend proposed on theC Share Fund will be made up of 1 pence from revenue. This information is provided by RNS The company news service from the London Stock Exchange