Neptune-Calculus Income & Growth Regulatory News (NEP)

21 Sep 2007 12:16

Neptune-Calculus Income &Growth VCT21 September 2007 Interim results for the six months ended 30 June 2007 Corporate policy and financial highlights Objective The Neptune-Calculus Income and Growth VCT is a generalist VCT which has theobjective of providing investors with both capital growth and income. It is intended that approximately 75 per cent. of the Company's funds will beinvested over a three year period in a diversified portfolio of holdings inqualifying investments including AIM companies. The Company does not invest instart-up and seed capital situations. The balance of the Company's investmentswill be invested in a combination of Neptune income funds and a portfolio ofsimilar income generating UK listed shares and money market instruments. Managers Qualifying investments are managed by Calculus Capital Limited andnon-qualifying investments are managed by Neptune Investment Management Limited. Financial Highlights • NAV per Ordinary Share increased by 4.9% to 118.97p (before payment of a 3.2p final dividend in May) from 113.37p at the last year end. • NAV per C Share increased by 4.7% to 108.43p (before payment of a 1p final dividend in May) from 103.61p at the last year end. • After dividend payments, the NAV at 30 June 2007 per Ordinary Share was 115.77p and per C Share was 107.43p. • The total return of the Ordinary Shares, since launch in 2005, is 27.8% (net of launch costs) and for the C Shares, since launch in 2006, is 14.7% (net of launch costs). Performance summary Ordinary Shares C Shares Six months to Six months to 30 June 2007 30 June 2007Revenue return per share 0.60p 0.61pNet asset value per share 115.77p 107.43pCumulative dividends paid and proposed 6.0p 2.0p As at As at 14 September 2007* 14 September 2007*Unaudited net asset value per share 102.22p 94.49p *Being the latest practicable date prior to publication and excluding netrevenue after 30 June 2007. Chairman's Statement I am delighted to present our interim results for the Company for the six monthsended 30 June 2007 and I am pleased to report that there has been further goodprogress in the period. The Company's aim is to achieve long term growth in the net assets of theCompany and maintain a consistent level of tax free dividends each year. In ouroriginal prospectus we stated our intention to be a generalist VCT companyinvesting in a diversified portfolio of both unquoted companies and AIM stocks.As you may be aware, the Company is required to have invested at least 70 percent. (calculated on an H.M. Revenue & Customs basis) of its Ordinary Shares'funds in VCT qualifying investments by 31 December 2007 and the C Shares' fundsby 31 December 2008 and must maintain this level thereafter. At 30 June 2007, in the Ordinary Share Fund, £2,355,753 had been invested inqualifying holdings representing 63.81 per cent. (calculated on an H.M. Revenue& Customs basis). In the C Share Fund, £2,983,702 had been invested representing42.69 per cent. (calculated on an H.M. Revenue & Customs basis). Further detailsof these investments and the investment performance are given in the InvestmentManager's review. Since the period end, both the Ordinary Share Fund and the C Share Fund haveinvested £495,000 and £905,000 respectively in a further three qualifyinginvestments. This brings the percentages invested in qualifying holdings toapproximately 75 per cent. and approximately 54 per cent. respectively. TheBoard remains confident of achieving the H.M. Revenue & Customs requiredpercentages within the timescale. The balance of the funds raised described as non-qualifying investments has beenmanaged by Neptune Investment Management Limited. We are invested in the NeptuneIncome Fund A Income Class (the Income Fund), the Neptune Quarterly Income FundIncome Units (the Quarterly Fund) and a range of individual FTSE 100/FTSE 250companies with a view to generating income in the portfolio. Further details ofthese investments and the investment performance are given in the InvestmentManager's review. Total income attributable to the Ordinary Share Fund for the period was £64,000and total income attributable to the C Share Fund was £137,000. This was largelyderived from dividends from holdings in the Neptune Income Fund, the NeptuneQuarterly Income Fund and the portfolios of income orientated quoted equitiesand other liquid holdings. Gains on investments in the six months amounted to£227,000 (realised: £132,000, unrealised: £95,000) on the Ordinary Share Fundand £431,000 (realised: £275,000, unrealised: £156,000) on the C Share Fund. TheDirectors' policy is to pay, when possible, dividends out of income and realisedgains and the Board is declaring an interim dividend in respect of the OrdinaryShares and the C Shares of 1 pence per Share. Both dividends are payable on 26October 2007 to Shareholders on the register on 5 October 2007. The Chancellor of the Exchequer made a number of changes to the qualificationrules for VCTs in his 2007 Budget, some of which are welcome. However, the newrules for investing money raised in future tax years will make it lessattractive for existing VCTs to raise significant further new money frominvestors. Specifically, restricting investment into companies with less than 50employees and limiting the overall amount invested in any company to no morethan £2 million in the year ending on the date of investment, will materiallyalter the risk profile of future VCTs. These changes do not apply to sharesissued before 6 April 2007, so do not apply to the shares which the Company hasissued to date and its current investment policy. As I mentioned, the Company's aim is to achieve long term growth in the netassets of the Company. This is based on a belief in the benefits to Shareholdersfrom spreading operating costs over a larger base and having a minimum size ofportfolio from which to generate a regular flow of realised profits. Furthersignificant growth in net assets is unlikely to come from raising new funds. Themost desirable way of increasing net assets is by continuing to make successfulinvestments. The Board has reviewed its policy for share buy-backs and considersit in the best interests of all Shareholders if the Board uses these powerssparingly. We continue to believe that the outlook for the Company is excellent. Goodprogress has been achieved in our investment programme. We have enjoyed somesuccess in the portfolio of qualifying investments, our investments in theNeptune Income Fund, Neptune Quarterly Fund and our managed portfolio of UKincome generating shares. As announced on 2 July 2007, Robin Geffen resigned from the Board due to thepressure of other business commitments. I would like to record, on behalf of ourBoard, our thanks to him for his help and support in the successfulestablishment of the Company. We look forward to reporting further progress when we publish our accounts forthe year ending 31 December 2007 in March 2008. Meanwhile I would like, onbehalf of the Board, to thank all Shareholders for their continuing support. Philip StephensChairman21 September 2007 Investment Managers' Reviews Investment Manager's Review (Qualifying Investments) Calculus Capital Limited advises the Company in respect of qualifyinginvestments made by the Company. The Manager is committed to building aportfolio of diversified investments for the Company. The deal flow of potential VCT qualifying investments remains strong. We haveset out below a review of the Ordinary Share qualifying investment portfolio,including details of new investments made in the period, and then give anequivalent review of the C Share qualifying investment portfolio. Review of the Ordinary Share Fund qualifying investment portfolio During the period we invested in eight companies, disposed of our entireholdings in two companies and partially realised one holding. As at 30 June2007, the Ordinary Share Fund qualifying portfolio comprised investments ineighteen companies. During the period, Quintus Group Limited, in which we heldan investment, was sold to a private buyer. Furthermore, we sold our entireposition in Cellcast plc and approximately ten per cent. of our holding inWorthington Nicholls Group plc to take advantage of the share price at the time.Eight new investments were made during the period. The investments made were £175,000 in Cater Plus Services Limited, which is amanagement buy-in of an established company providing catering services toretirement and other care homes; £160,000 in Triage Holdings Limited, which isthe management buy-out of the UK's leading independent provider of outsourcingand managed repair solutions to the IT service sector; £139,999 in AIM quotedHexagon Human Capital plc, an executive recruitment company with a particularstrength in the interim executive sector; £150,000 in PLUS Markets traded FSGSecurity plc, a company in the manned security sector; £125,000 in the AIM IPOof Epistem Holdings plc, which provides contract research services to thebio-tech and pharmaceutical industries and is developing its own noveltherapies; £150,000 in the AIM IPO of eXpansys plc, a leading retailer ofsmartphones and handheld devices with wireless connectivity; £99,999 in the AIMIPO of Pressure Technologies plc, which designs and manufactures a range ofspeciality high pressure, seamless steel gas cylinders for global energy anddefence markets and £150,000 in the AIM IPO of Mount Engineering plc, whichmanufactures and distributes small, high value items such as thread conversionproducts and connectors for hazardous industries such as the oil and gasindustry. The total cost of the qualifying investments is £2,355,753 and the market valueas at 30 June 2007 was £2,566,878. The Ordinary Share Fund's qualifyinginvestment portfolio is at an investment level of 63.81 per cent. (calculated onan H.M. Revenue & Customs basis). A full list of the Ordinary Share Fund's portfolio of qualifying investments asat 30 June 2007 is set out below. Sector Cost Valuation £ £Debtmatters Group plc General financial 11,700 20,700PharmaSmart Limited* Support services 50,000 60,000PharmaSmart Limited loan stock* Support services 75,000 75,000Cagney plc Media 125,000 70,313Croma Group plc Aerospace & defence 125,000 93,750Sport Media Group plc (formerly Interactive Software & computerWorld plc) services 145,000 160,890Debts.co.uk plc General financial 120,001 54,667Worthington Nicholls Group plc General retailers 134,914 313,200Brulines (Holdings) plc Support services 194,340 263,860Egdon Resources plc Oil & gas producers 174,800 220,340Aquilo plc Support services 50,000 18,856Hexagon Human Capital plc Support services 139,999 159,514FSG Security plc Support services 150,000 122,500Cater Plus Services Limited* Support services 58,333 58,333Cater Plus Services Limited loan stock* Support services 116,667 116,667Triage Holdings Limited* Support services 135,240 135,240Triage Holdings Limited loan stock* Support services 24,760 24,760 Pharmaceuticals & biotechnologyEpistem Holdings plc 125,000 168,346eXpansys plc General retailers 150,000 173,276Pressure Technologies plc Industrial engineering 99,999 106,666Mount Engineering plc Industrial engineering 150,000 150,000 All valuations are at AIM bid price with the exceptions of those marked * whichare unquoted holdings valued at fair value. Review of the C Share Fund qualifying investment portfolio As at 30 June 2007, the C Share Fund qualifying investment portfolio comprisedthirteen investments. As with the Ordinary Share Fund, the C Share Fund also hada holding in Quintus Group Limited, which was sold in the period, and we soldapproximately 10 per cent. of our holding in Worthington Nicholls Group plc totake advantage of the share price at the time. Eight new investments were madeduring the period. The eight new investments were made alongside the Ordinary Share Fund asmentioned above and the amounts were as follows; £325,000 in Cater Plus ServicesLimited; £320,000 in Triage Holdings Limited; £250,000 in Hexagon Human Capitalplc; £250,000 in FSG Security plc; £125,001 in Epistem Holdings plc; £299,500 ineXpansys plc; £100,001 in Pressure Technologies and £150,000 in MountEngineering plc. The total cost of the qualifying investments is £2,983,702 and the market valueas at 30 June 2007 was £3,525,602. The C Share Fund's qualifying investmentportfolio is at an investment level of 42.69 per cent. (calculated on an H.M.Revenue & Customs basis). A full list of the C Share Fund's portfolio of qualifying investments as at 30June 2007 is set out below. Sector Cost Valuation £ £PharmaSmart Limited* Support services 250,000 250,000Sport Media Group plc (formerly Interactive Software & computerWorld plc) services 180,000 199,726Worthington Nicholls Group plc General retailers 315,000 730,800Egdon Resources plc Oil & gas producers 319,200 402,360Aquilo plc Support services 100,000 37,712Hexagon Human Capital plc Support services 250,000 284,848FSG Security plc Support services 250,000 204,167Cater Plus Services Limited* Support services 108,334 108,334Cater Plus Services Limited loan stock* Support services 216,666 216,666Triage Holdings Limited* Support services 270,480 270,480Triage Holdings Limited loan stock* Support services 49,520 49,520 Pharmaceuticals & biotechnologyEpistem Holdings plc 125,001 168,348eXpansys plc General retailers 299,500 345,974Pressure Technologies plc Industrial engineering 100,001 106,667Mount Engineering plc Industrial engineering 150,000 150,000 All valuations are at AIM bid price with the exceptions of those marked * whichare unquoted holdings valued at fair value (equal to cost). Developments since the period end Since the period end, £495,000 has been invested in three companies for theOrdinary Share Fund's qualifying investment portfolio increasing the investmentpercentage for qualifying investments to approximately 75 per cent. (calculatedon an H.M. Revenue & Customs basis). The Company has also invested £905,000 inthe same three companies for the C Share Fund's qualifying investment portfolioincreasing the investment percentage for qualifying investments to approximately54 per cent. (calculated on an H.M. Revenue & Customs basis). The threecompanies are RMS Europe Group Limited, which operates port facilities in theHumber and Trent regions; a follow-on investment in Sport Media Group plc(formerly Interactive World plc); and Heritage House Group Limited, a mediagroup serving the heritage market and which publishes Hudson's Historic Housesand Gardens, the UK's leading trade guide to historic houses. The period since30 June has seen a material fall in the value of the Funds' investment inWorthington Nicholls Group plc, following a fall in the company's share price. Outlook The Manager continues to see a healthy pipeline of qualifying unquoted and AIMcompanies raising funds at reasonable valuations. The Company is building adiversified portfolio of good quality qualifying investments which the Managerbelieves will deliver sustained long term performance in due course. John GlencrossCalculus Capital Limited21 September 2007 Investment Manager's Review (Non-qualifying investments) Portfolio developments The Neptune-Calculus Income and Growth VCT invests in the Neptune Income Fundand the Neptune Quarterly Income Fund along with a portfolio of individualstocks that broadly follows the aforementioned funds. Breaking down the FTSE All-Share index's performance by different sub-indicesclearly illustrates that it was the large cap stocks which drove the UK markethigher over the six months to 30 June 2007. The FTSE 100, 250 and SmallCapindices rose by 8.29%, 4.39% and 4.04% respectively. In terms of sectors, theFTSE All-Share was predominantly driven by three sectors: mining, oil & gasproducers and mobile telecommunications. The portfolio was well positioned to benefit from these trends with a heavy biastowards large cap stocks, an overweight position in oil & gas producers and theintroduction of two well diversified global mining companies at the start of thesecond quarter, Rio Tinto and Anglo American. The addition of these stocksallows the portfolio to benefit from higher commodity prices driven by strongglobal demand, especially from the emerging Asian economies. The other main change made to the portfolio was a reduction in financialsexposure. With two 0.25% interest rate increases in the period under review anda further interest rate hike to 5.75% looking imminent at the period end, wedecided to reduce our exposure to the UK mortgage market. At the same time weincreased our weighting in pharmaceuticals and hold both AstraZeneca andGlaxoSmithKline. The sector is unloved and undervalued and we felt thosecompanies represent very good value, both on relative and absolute levels. Outlook Looking forward to the year end, we feel that the UK market will make modestgains from the halfway point, although there may well be further volatilityalong the way. We believe that the portfolio will benefit from its high exposureto large cap stocks which continue to offer good value, with good dividendyields and strong balance sheets. Performance figures sourced from Lipper; based in Sterling; net incomereinvested. Robin GeffenNeptune Investment Management Limited21 September 2007 Investment Portfolios Ordinary Share Fund portfolio The ten largest holdings by value are included below: As at 30 June 2007 Cost Valuation Percentage of portfolio £ £ %AIM investments (quoted equity)Worthington Nicholls Group plc* 134,914 313,200 7.23Brulines (Holdings) plc* 194,340 263,860 6.09Egdon Resources plc* 174,800 220,340 5.09eXpansys plc* 150,000 173,276 4.00Epistem Holdings plc* 125,000 168,346 3.89Sport Media Group plc (formerly Interactive World plc)* 145,000 160,890 3.72Other AIM investments 821,699 646,966 14.94Unquoted equity investmentsOther unquoted investments 393,573 403,573 9.32Unquoted bondsOther unquoted loan stocks 216,427 216,427 5.00Total qualifying investments 2,355,753 2,566,878 59.28 Quoted fundsNeptune Quarterly Income Fund Income Units 520,000 709,254 16.38The Neptune Income Fund Income A Class 520,000 693,235 16.01Quoted equityOther quoted equities 6,961 6,293 0.15Unquoted fundsFidelity Sterling Fund distributing shares class A 189,205 189,205 4.37BGI Liquidity First Fund 165,000 165,000 3.81Total non-qualifying investments 1,401,166 1,762,987 40.72 Total investments 3,756,919 4,329,865 100.00 The valuations of the Ordinary Share Fund investments in companies marked *exclude small purchases made during this and prior periods which are included asnon-qualifying investments. C Share Fund portfolio The ten largest holdings by value are included below: As at 30 June 2007 Cost Valuation Percentage of portfolio £ £ %AIM investments (quoted equity)Worthington Nicholls Group plc 315,000 730,800 8.14Egdon Resources plc 319,200 402,360 4.48eXpansys plc 299,500 345,974 3.85Hexagon Human Capital plc 250,000 284,848 3.17Other AIM investments 755,002 716,620 7.99Unquoted equity investmentsPharmaSmart Limited 250,000 250,000 2.78Triage Holdings Limited 270,480 270,480 3.01Other unquoted investments 258,334 258,334 2.88Unquoted bondsCater Plus Services Limited loan stock 216,666 216,666 2.41Other unquoted loan stocks 49,520 49,520 0.55Total qualifying investments 2,983,702 3,525,602 39.26 Quoted fundsNeptune Quarterly Income Fund Income Units 825,000 902,821 10.06The Neptune Income Fund Income A Class 810,000 884,193 9.85Quoted equityOther quoted equities 2,885,706 3,110,476 34.64Unquoted fundsFidelity Sterling Fund distributing shares class A 555,390 555,390 6.19Total non-qualifying investments 5,076,096 5,452,880 60.74 Total investments 8,059,798 8,978,482 100.00 Unaudited Income Statements for the six months to 30 June 2007 Ordinary Share Fund Six months to Six months to Year to 30 June 2007 30 June 2006 31 December 2006 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments at fair value - 227 227 - 112 112 - 479 479Investment income 61 - 61 48 - 48 114 - 114Other income 3 - 3 20 - 20 25 - 25Investment management fee (13) (38) (51) (11) (33) (44) (23) (68) (91)Other expenses (27) - (27) (26) - (26) (51) - (51) Return on ordinary activities before taxation 24 189 213 31 79 110 65 411 476 Taxation on ordinary activities (1) - (1) - - - (3) - (3) Return attributable to equity shareholders 23 189 212 31 79 110 62 411 473 Return per Ordinary Share 0.60p 5.00p 5.60p 0.82p 2.07p 2.89p 1.65p 10.82p 12.47p C Share Fund Six months to Period to Period to 30 June 2007 30 June 2006* 31 December 2006* Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains/(losses) on investments at - 431 431 - (202) (202) - 778 778fair value Investment income 134 - 134 39 - 39 180 - 180Other income 3 - 3 33 - 33 43 - 43Investment management fee (26) (77) (103) (12) (35) (47) (34) (103) (137)Other expenses (59) - (59) (33) - (33) (102) - (102) Return/(deficit) on ordinary activities 52 354 406 27 (237) (210) 87 675 762before taxation Taxation on ordinary activities (1) - (1) - - - (2) - (2) Return/(deficit) attributable to 51 354 405 27 (237) (210) 85 675 760equity shareholders Return per C Share 0.61p 4.22p 4.83p 0.43p (3.84)p (3.41)p 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 Six months to Six months to Year to 30 June 2007 30 June 2006* 31 December 2006* Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains/(losses) on investments at - 658 658 - (90) (90) - 1,257 1,257fair value Investment income 195 - 195 87 - 87 294 - 294Other income 6 - 6 53 - 53 68 - 68Investment management fee (39) (115) (154) (23) (68) (91) (57) (171) (228)Other expenses (86) - (86) (59) - (59) (153) - (153) Return/(deficit) on ordinary activities before taxation 76 543 619 58 (158) (100) 152 1,086 1,238 Taxation on ordinary activities (2) - (2) - - - (5) - (5) Return/(deficit) attributable to equity shareholders 74 543 617 58 (158) (100) 147 1,086 1,233 \* The first allotment of C Shares took place on 8 February 2006 and the first CShare investment was made on 20 April 2006. The total column of this statement is the profit and loss account of theCompany. All revenue and capital items in the above statement derive from continuingoperations. No operations were acquired or discontinued in the period. Unaudited Reconciliations of Movements in Shareholders' Funds for the six months to 30 June 2007 Ordinary Share Fund Share Share Special Capital Revenue Total capital premium reserve reserve reserve £'000 £'000 £'000 £'000 £'000 £'000For the period 1 January 2007 to 30 June 20071 January 2007 379 21 3,187 681 33 4,301Net return after taxation for the period - - - 189 23 212Dividends paid - - - (91) (30) (121)30 June 2007 379 21 3,187 779 26 4,392 For the period 1 January 2006 to 30 June 20061 January 2006 379 21 3,187 270 1 3,858Net return after taxation for the period - - - 79 31 11030 June 2006 379 21 3,187 349 32 3,968 For the year 1 January 2006 to 31 December 20061 January 2006 379 21 3,187 270 1 3,858Net return after taxation for the year - - - 411 62 473Dividends paid - - - - (30) (30)31 December 2006 379 21 3,187 681 33 4,301 C Share Fund Share Share Special Capital Revenue Total capital premium reserve reserve reserve £'000 £'000 £'000 £'000 £'000 £'000For the period 1 January 2007 to 30 June 20071 January 2007 839 - 7,097 675 85 8,696Net return after taxation for the period - - - 354 51 405Dividends paid - - - - (84) (84)30 June 2007 839 - 7,097 1,029 52 9,017 For the period 8 February 2006 to 30 June 20068 February 2006 - - - - - -Issue of shares 839 - - - - 839Premium on issue of shares - 7,554 - - - 7,554Expenses of share issue - (457) - - - (457)Net (deficit)/return after taxation for - - - (237) 27 (210)the period30 June 2006 839 7,097 - (237) 27 7,726 For the period 8 February 2006 to 31 December 20068 February 2006 - - - - - -Issue of shares 839 - - - - 839Premium on issue of shares - 7,554 - - - 7,554Expenses of share issue - (457) - - - (457)Transfer to special reserve - (7,097) 7,097 - - -Net return after taxation for the period - - - 675 85 76031 December 2006 839 - 7,097 675 85 8,696 Total Share Share Special Capital Revenue Total capital premium reserve reserve reserve £'000 £'000 £'000 £'000 £'000 £'000For the period 1 January 2007 to 30 June 20071 January 2007 1,218 21 10,284 1,356 118 12,997Net return after taxation for the period - - - 543 74 617Dividends paid - - - (91) (114) (205)30 June 2007 1,218 21 10,284 1,808 78 13,409 For the period 1 January 2006 to 30 June 20061 January 2006 379 21 3,187 270 1 3,858Issue of shares 839 - - - - 839Premium on issue of shares - 7,554 - - - 7,554Expenses of share issue - (457) - - - (457)Net (deficit)/return after taxation for - - - (158) 58 (100)the period30 June 2006 1,218 7,118 3,187 112 59 11,694 For the year 1 January 2006 to 31 December 20061 January 2006 379 21 3,187 270 1 3,858Issue of shares 839 - - - - 839Premium on issue of shares - 7,554 - - - 7,554Expenses of share issue - (457) - - - (457)Transfer to special reserve - (7,097) 7,097 - - -Net return after taxation for the year - - - 1,086 147 1,233Dividends paid - - - - (30) (30)31 December 2006 1,218 21 10,284 1,356 118 12,997 UNAUDITED BALANCE SHEETS as at 30 June 2007 Ordinary Share Fund 30 June 2007 30 June 2006 31 December 2006 Note £'000 £'000 £'000Fixed AssetsInvestments at fair value through profit or loss 4,330 3,787 4,272Current AssetsDebtors 46 61 9Cash at bank 27 220 59 73 281 68Creditors: Amounts falling duewithin one yearCreditors (11) (100) (39)Net Current Assets 62 181 29Net Assets 4,392 3,968 4,301 Represented by:CALLED UP SHARE CAPITAL AND RESERVESShare capital 4 379 379 379Share premium 21 21 21Special reserve 3,187 3,187 3,187Capital reserve realised 206 205 204Capital reserve unrealised 573 144 477Revenue reserve 26 32 33Total equity shareholders' funds 4,392 3,968 4,301Net asset value per Ordinary Share 5 115.77p 104.60p 113.37p C Share Fund 30 June 2007 30 June 2006 31 December 2006 Note £'000 £'000 £'000Fixed AssetsInvestments at fair value through profit or loss 8,978 7,335 8,707Current AssetsDebtors 23 138 18Cash at bank 39 560 160 62 698 178Creditors: Amounts falling due within one yearCreditors (23) (307) (189)Net Current Assets/(Liabilities) 39 391 (11)Net Assets 9,017 7,726 8,696 Represented by:CALLED UP SHARE CAPITAL AND RESERVESShare capital 4 839 839 839Share premium - 7,097 -Special reserve 7,097 - 7,097Capital reserve realised 110 (49) (88)Capital reserve unrealised 919 (188) 763Revenue reserve 52 27 85Total equity shareholders' funds 9,017 7,726 8,696Net asset value per C Share 5 107.43p 92.05p 103.61p Total 30 June 2007 30 June 2006 31 December 2006 £'000 £'000 £'000Fixed AssetsInvestments at fair value through profit or loss 13,308 11,122 12,979Current AssetsDebtors 69 199 27Cash at bank 66 780 219 135 979 246Creditors: Amounts falling duewithin one yearCreditors (34) (407) (228)Net Current Assets 101 572 18Net Assets 13,409 11,694 12,997 Represented by:CALLED UP SHARE CAPITAL AND RESERVESShare capital 1,218 1,218 1,218Share premium 21 7,118 21Special reserve 10,284 3,187 10,284Capital reserve realised 316 156 116Capital reserve unrealised 1,492 (44) 1,240Revenue reserve 78 59 118Total equity shareholders' funds 13,409 11,694 12,997 UNAUDITED CASH FLOW STATEMENTS for the six months to 30 June 2007 Ordinary Share Fund Six months to Six months to Year to 30 June 2007 30 June 2006 31 December 2006 £'000 £'000 £'000 Operating activitiesInvestment income received 51 38 110Deposit interest received 3 21 25Investment management fees paid (66) (66) (118)Administration fees paid (9) (3) (10)Other cash payments (30) (40) (57)Net cash outflow from operating activities (51) (50) (50)Taxation (1) - (3)Investing activitiesPurchase of investments (1,919) (2,323) (3,140)Sale of investments 2,064 386 1,086Net cash inflow/(outflow) from investing activities 145 (1,937) (2,054)Equity dividends paid (121) - (30)FinancingCost of share issue (4) (1) (12)Net cash outflow from financing (4) (1) (12)Decrease in cash (32) (1,988) (2,149) C Share Fund Six months to Period to Period to 30 June 2007 30 June 2006 31 December 2006 £'000 £'000 £'000 Operating activitiesInvestment income received 133 22 167Deposit interest received 4 33 43Investment management fees paid (141) - (92)Administration fees paid (19) - (14)Other cash payments (64) (19) (58)Net cash (outflow)/inflow from operating activities (87) 36 46Taxation (1) - (2)Investing activitiesPurchase of investments (2,459) (7,537) (8,767)Sale of investments 2,619 - 838Net cash inflow/(outflow) from investing activities 160 (7,537) (7,929)Equity dividends paid (84) - -FinancingProceeds of share issue - 8,393 8,393Cost of share issue (109) (332) (348)Net cash (outflow)/inflow from financing (109) 8,061 8,045(Decrease)/increase in cash (121) 560 160 Total Six months to Six months to Year to 30 June 2007 30 June 2006 31 December 2006 £'000 £'000 £'000 Operating activitiesInvestment income received 184 60 277Deposit interest received 7 54 68Investment management fees paid (207) (66) (210)Administration fees paid 28) (3) (24)Other cash payments (94) (59) (115)Net cash outflow from operating activities (138) (14) (4)Taxation (2) - (5)Investing activitiesPurchase of investments (4,378) (9,860) (11,907)Sale of investments 4,683 386 1,924Net cash inflow/(outflow) from investing activities 305 (9,474) (9,983)Equity dividends paid (205) - (30)FinancingProceeds of share issue - 8,393 8,393Cost of share issue (113) (333) (360)Net cash (outflow)/inflow from financing (113) 8,060 8,033Decrease in cash (153) (1,428) (1,989) Notes 1 Nature of Financial InformationThe unaudited interim financial information does not constitute statutory financial statements as defined in Section 240of the Companies Act 1985. This information has been prepared on the basis of the accounting policies used in the statutory financial statements of the Company for the year ended 31 December 2006. The statutory financial statements for the year ended 31 December 2006, which contained an unqualified auditors' report, have been lodged with the Registrar of Companies and did not contain a statement under either Section 237(2) or Section 237(3) of the Companies Act 1985. 2 Dividends The Directors have declared an interim dividend of 1 pence per Ordinary Shareand per C Share. Both dividends are payable on 26 October 2007 to Ordinary and CShareholders on the register on 5 October 2007. 3 Return per share Six months to Six months to Year to 30 June 2007 30 June 2006 31 December 2006 Revenue Capital Total Revenue Capital Total Revenue Capital Total pence pence pence pence pence pence pence pence penceOrdinary 0.60 5.00 5.60 0.82 2.07 2.89 1.65 10.82 12.47SharesC Shares 0.61 4.22 4.83 0.43 (3.84) (3.41) 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 £23,000 (30 June 2006:£31,000, 31 December 2006: £62,000) and on 3,793,562 (30 June 2006: 3,793,562,31 December 2006: 3,793,562) Ordinary Shares, being the weighted average numberof Ordinary Shares in issue during the period. Capital return per Ordinary Share is based on the net capital gain for theperiod of £189,000 (30 June 2006: £79,000, 31 December 2006: £411,000) and on3,793,562 (30 June 2006: 3,793,562, 31 December 2006: 3,793,562) OrdinaryShares, being the weighted average number of Ordinary Shares in issue during theperiod. Total return per Ordinary Share is based on the total return on ordinaryactivities attributable to the Ordinary Shares for the period of £212,000 (30June 2006: £110,000, 31 December 2006: £473,000) and on 3,793,562 (30 June 2006:3,793,562, 31 December 2006: 3,793,562) Ordinary Shares, being the weightedaverage number of Ordinary Shares in issue during the period. C Shares Revenue return per C Share is based on the net revenue on ordinary activitiesattributable to the C Shares of £51,000 (30 June 2006: £27,000, 31 December2006: £85,000) and on 8,393,209 (30 June 2006: 6,162,283, 31 December 2006:7,417,605) C Shares, being the weighted average number of C Shares in issueduring the period. Capital return per C Share is based on the net capital gain for the period of£354,000 (30 June 2006: loss £237,000, 31 December 2006: gain £675,000) and on8,393,209 (30 June 2006: 6,162,283, 31 December 2006: 7,417,605) C Shares, beingthe weighted average number of C Shares in issue during the period. Total return per C Share is based on the total return on ordinary activitiesattributable to the C Shares for the period of £405,000 (30 June 2006: loss£210,000, 31 December 2006: gain £760,000) and on 8,393,209 (30 June 2006:6,162,283, 31 December 2006: 7,417,605) C Shares, being the weighted averagenumber of C Shares in issue during the period. 4 Called up share capital 30 June 2007 £'000Authorised:50,000,000 Ordinary Shares of 10p each 5,00015,000,000 C Shares of 10p each 1,500Allotted, issued and fully paid:3,793,562 Ordinary Shares of 10p each 3798,393,209 C Shares of 10p each 839 5 Net asset value per share 30 June 2007 30 June 2006 31 December 2006 pence pence penceOrdinary Shares of 10p each 115.77 104.60 113.37C Shares of 10p each 107.43 92.05 103.61 The basic net asset value per Ordinary Share is based on net assets (includingcurrent period revenue) of £4,392,000 (30 June 2006: £3,968,000, 31 December2006: £4,301,000) and on 3,793,562 (30 June 2006: 3,793,562, 31 December 2006:3,793,562) Ordinary Shares, being the number of Ordinary Shares in issue at theend of the period. The basic net asset value per C Share is based on net assets (including currentperiod revenue) of £9,017,000 (30 June 2006: £7,726,000, 31 December 2006:£8,696,000) and on 8,393,209 (30 June 2006: 8,393,209, 31 December 2006:8,393,209) C Shares, being the number of C Shares in issue at the end of theperiod. 6 Copies of the Interim Report Copies of the Interim Report will be posted to shareholders shortly and willalso shortly be available from the registered office of the Company at 11 LeesPlace, London, W1K 6LN This information is provided by RNS The company news service from the London Stock Exchange