Annual Report and Accounts

RNS Number : 6116O

Aberdeen Growth Opps VCT PLC

10 March 2009

 



Aberdeen Growth Opportunities VCT PLC

Annual Financial Report for the year ended 30 November 2008

The Directors announce the audited Annual Financial Report for the year ended 30 November 2008 as follows.

Chairman's Statement

The credit crunch, which first became evident in the latter half of 2007, has now translated into both a financial and economic problem affecting the broader economy in the UK and globally. The market values of many companies now bear no relation to their underlying trading as the prospect of falling economic activity indicators hangs over the markets. This has particularly affected smaller companies and the AIM market where, despite sound underlying earnings, the value of many of our holdings has fallen in line with market sentiment and this has inevitably led to a reduction in Net Asset Value. However, the majority of investments are in private companies which are insulated from the major movements in market value which affect quoted companies.

The major features of the year are:

• Total Return on Ordinary shares 94.65p per share at year end, down 17.8% over the year

• Net Asset Value (NAV) of Ordinary shares at year end of 80.4p per share

• Total Return per C Share 99.4p at year end, up 0.2% over the year

• NAV of C Shares at year end of 95.2p

• Two successful exits from unlisted companies during the year, generating net gains of 3.0p per Ordinary share and 1.5p per C Share.

• Net realised losses from AIM stocks of 0.9p per Ordinary share for the year

• Dividends proposed of 2.7p per Ordinary share in respect of the year

Performance

The Total Return per Ordinary Share at 30 November 2008 was 94.65p, a decrease of 17.8% over the equivalent figure at November 2007, while for the C Share pool it was almost unchanged at 99.4p compared with 99.2p a year previously, an increase of 0.2% reflecting the differing mix of the two portfolios. The most important measure for a VCT is the total return, being the long term record of dividend payments out of income and capital gains combined with the current NAV. In the short term, the NAV on its own is a less important measure of the performance as the majority of the underlying investments are long-term in nature and not readily realisable.

At 30 November 2008, the NAV per Ordinary share was 80.4p and the NAV per C Share was 95.2p.

C Share Conversion

The C Shares will convert into Ordinary shares based on the NAVs of the respective pools as at 30 November 2008. This means that each C Shareholder will receive 1.185 new Ordinary shares for every C Share they hold. Certificates for the new shares will be issued in March 2009 in accordance with the provisions of the Articles.

VCT Qualifying Status

The Company is required to meet the 70% qualifying test on the combined pools from 1 December 2008 and continuously thereafter. The Board regularly review the status of the criteria that have to be met to continue to qualify as a VCT and I am pleased to confirm that all tests continue to be met. 

Dividends

The Board is proposing a final dividend of 2.7p per Ordinary Share to be paid on 30 April 2009 to shareholders on the register on 27 March 2009. The dividend will be paid after the conversion date for the C Shares and will therefore be paid to the enlarged Ordinary Shareholder base. For C Shareholders, following conversion, the proposed dividend is equivalent to the 3.2p per C Share paid in respect of the year ended 30 November 2007. For the Ordinary Shareholders, the proposed dividend is lower than the 4.5p paid in respect of 2007, which reflects the Board's intentions of conserving cash in order to enable the Company to take advantage of opportunities to enhance the portfolio by investing in attractive, high-yielding businesses and of supporting existing portfolio companies in the current economic downturn. It remains the Board's intention, over the economic cycle, to target an average dividend rate of 4.0p per annum or 50% of the uplift in NAV, whichever is the greater, subject to maintaining the NAV at around 100p per share and the availability of distributable reserves. 

Investment Strategy

The strategy remains to build a diversified portfolio of unlisted and AIM investments which offer strong growth prospects and therefore the opportunity for capital gains in the medium to longer term, while maintaining VCT qualifying status. The Company does not currently utilise gearing in making its investments but the Board may elect to take advantage on a selective basis of its ability to borrow up to 15% of Net Asset Value in pursuit of the investment strategy.

Your Board is obliged under the revised Listing Rules to ensure that this and subsequent reports carry additional information on investment policy, in particular statements concerning asset mix, the spread of risk and maximum exposures. This information is contained in the Directors' Report and in the tabular analyses of the two portfolios. 

Valuation Process

Investments held by Aberdeen Growth Opportunities VCT in unquoted companies are valued in accordance with the International Private Equity and Venture Capital Valuation Guidelines.

Investments quoted or traded on a recognised stock exchange including the Alternative Investment Market (AIM) are valued at their bid price.

Portfolio Developments

There were two further successful exits from companies in the Ordinary Share pool unlisted portfolio during the course of the year one, of which was also held by the C Share pool. The net gain from these realisations amounted to 3.0p per Ordinary Share and 1.5p per C Share. Details of all investments and divestments during the course of the year are shown in the table on pages 8 and 9.

There was little opportunity in view of the state of the AIM market to actively trade holdings and net losses of £83,000 arose from the disposal of one holding where little upside was perceived. The FTSE AIM All-share index fell by an unprecedented 61.8% over the course of the year. 

Co-Investment Scheme of the Manager

The co-investment scheme which allows executive members of the Manager to invest alongside the Company continued in operation during the year. The scheme operates through a nominee company which invests alongside the Company in each and every transaction made by the Company, including any follow-on investments. The scheme more closely aligns the interests of the executives and the Company's shareholders while providing an incentive to enable the Manager to retain the existing skills and capacity of its investment team in a highly competitive market.

VAT Recovery

Following pressure from the VCT industry, and in particular through the good offices of the AIC of which the Company is a member, the payment of VAT on management fees has ceased with effect from 1 October 2008. Under guidelines issued by HMRC, VAT paid over a number of years prior to the cessation can be reclaimed. Your Board is currently in discussion with the Manager about the total amount that might be recovered, and the sum we are confident in recovering for the Company, amounting to £193,000 has been reflected in the accounts to 30 November.  

The Future

The unlisted investments held by the Company are generally trading well and are not directly affected by the turmoil which has been experienced in the quoted markets. The banks are reducing their exposure to commercial lending and the portfolio of unlisted companies may have to manage within their existing facilities. Based on their current trading, this should not cause significant problems to our portfolio and the Company does have cash to assist where appropriate. The Manager is represented on the majority of our investee companies' boards and is therefore closely involved with their management in dealing with the current challenging market conditions.

There has been little activity in the AIM market in recent months and it seems likely that it will be some time before new opportunities to invest in companies seeking an IPO on that market become available. The Manager will continue to focus on investing in unlisted companies which offer excellent growth prospects as the Manager believes these companies will offer the opportunity for profitable realisations in due course when the markets enjoy greater stability.

Gregor Michie

Chairman

9 March 2009

Investment Manager's Review

Investment Activity

During the year ended 30 November 2008, twelve significant unlisted and AIM investments were completed and a total of £6.8 million was invested of which £2.3 million was from the Ordinary Share pool and £4.5 million was from the C Share pool. At the year end, the portfolio stood at 74 unlisted and AIM investments at a total cost of £19.7 million. Since 30 November 2008, three further new investments and one follow-on investment have been made at a cost of £1.7 million.

The following investments have been completed during the year.

Investment	Date	Activity	Investment cost £'000		Website
			Original pool	C Share Pool
Unlisted
Armannoch Investments	Nov-08	Provider of food products	300	400
Atlantic Foods	Feb-08	Supplier of food services	75	447	www atlanticfoods.co.uk
Broomco (4136)	Jul-08	Provider of CCTV	31	41	www.id-supportservices.co.uk
Essential Viewing Systems	Jul-08	Provider of video streaming software	24	-	www.essential-viewing.com
Money Plus	Dec-07	Provider of debt management services to individuals	125	585	www.moneyplusgroup.co.uk
Nessco	Jun-08	Telecommunication services provider	224	348	www.nesscogroup.com
PSCA	May-08	Producer of publications aimed at public sector officials	32	-	www.publicservice.co.uk
TC Communications	May-08	Marketing and communications services agency	174	299	www.tccommunications.co.uk
Training For Travel	Apr-08	Provision of assessment, tuition and or training in travel services	298	423	www.trainingfortravel.com
Transys Holdings	Dec-07	Provider of engineering services to the rail industry	249	398	www.transysprojects.ltd.uk
Valkyrie Capital	Nov-08	Provider of food products	300	400
Total Unlisted investment			1,832	3,341
AIM/PLUS
Animalcare	Jan-08	Markets and sells a wide range of pharmaceutical and other premium products and services to vets and vet wholesalers	-	245	www.animalcare.co.uk
Betbrokers	Mar-08	Provider of independent betting brokerage services	126	126	www.betbrokers.com
Brookwell	Jun-08	Close-ended investment company which has been established to acquire AIM Securities and Listed Securities from financial institutions	15	-	www.brookwelllimited.com
Essentially	May-08	Provider of sports marketing, media management and professional services		133	www.essentiallygroup.com.
OPG Power Ventures	May-08	Develops, owns and manages power generation plants in India	49	49	www.opgpower.org
Optare	Jul-08	Bus manufacturer and low emission technology group	98	147	www.optare.com
Plastics Capital	Dec-07	Manufacturer of plastic components	74	281	www.plasticscapital.com
Praesepe	Jul-08	Consolidator of high-volume gaming businesses in the United Kingdom and Europe	98	148	www.praesepeplc.com
Total AIM/PLUS investment			460	1,129
Total			2,292	4,470

Aberdeen Growth Opportunities VCT has co-invested with Aberdeen Income and Growth VCT, Aberdeen Growth VCT I, Aberdeen Growth Opportunities VCT 2, Talisman First Venture Capital Trust, Gateway VCT and Guinness Flight Venture Capital Trust in some or all of the above transactions and is expected to continue to do so with these as well as other clients of the Manager. The advantage is that, together, these companies are able to underwrite a wider range and size of transaction than would be the case on a stand alone basis.

Portfolio Developments

There were two successful realisations from the unlisted portfolio during the year: PSCA International was sold for proceeds of £264,000 generating a gain of £126,000 for the Original Pool and ID Support Services was sold for proceeds of £428,000 and £575,000 realising gains of £169,000 and £227,000 for the Original and C Share pools respectively. In each case there is a small element of deferred consideration which may give rise to further proceeds for the Company. In addition, repayments of loan stock were received from a number of investee companies as shown on the table below. During the reporting period seven substantial new unlisted investments and five new AIM investments have been added to the portfolio.

Conditions in the AIM market were extremely challenging throughout the year with the FTSE AIM All-share Index declining by 61.8% over the year as first the financial crisis and then the underlying economic conditions affected sentiment. Opportunities to trade the portfolio were therefore much reduced as were the number of new IPOs in which to invest. The opportunity was taken to sell one holding, Optare, where we perceived limited future upside, which resulted in a loss for the Original Pool. There was a limited amount of trading in other stocks but gains of £30,000 and £25,000 were generated for the Original Pool and C Share Pool respectively. The AIM quoted businesses in which we are invested are generally continuing to trade profitably and in line with expectations and their market values bear little or no relation to their underlying profit and cash generation capability.

Investments in the unlisted portfolio are generally trading well and their values are not directly affected by the turmoil in the quoted markets and in many cases increased valuations have been achieved.

			Ordinary Share Pool			C Share Pool
	Date first invested	Complete/ Partial Exit	Cost of shares disposed of	Sales Proceeds	Realised Gain/Loss	Cost of shares disposed of	Sales Proceeds	Realised Gain/Loss
			£'000	£'000	£'000	£'000	£'000	£'000
Unlisted
Homelux Nenplas	2006	Partial	50	50	-	69	69	-
ID Support Services	2007	Complete	259	428	169	348	575	227
Lime Investments	2007	Partial	241	241	-	306	306	-
PSCA International	2002	Partial	138	264	126	-	-	-
Others			137	28	(109)	16	16	-
			825	1,011	186	739	966	227
AIM
Craneware	2007	Partial	33	55	22	51	83	32
Synarbor	2004	Complete	127	14	(113)	-	-	-
Others			287	293	6	260	254	(6)
			447	362	(85)	311	337	26
Total			1,272	1,373	101	1,050	1,303	253

Outlook

We anticipate that it will be some time before the number of IPOs in the AIM market recovers to previous levels and therefore there will be few opportunities to invest in that market in the coming year. Conversely and while there are still some difficulties evident in securing appropriate bank funding for new unlisted investments, we will continue to invest selectively in well managed private companies where we perceive excellent growth prospects and therefore medium term financial gain. One of the issues facing many investors will be the availability of bank debt in the coming year. We have invested in businesses where the level of gearing is significantly less than that of much larger companies and in some cases without recourse to any bank debt. Consequently, we do not anticipate encountering the same degree of difficulty in renewing debt facilities as those providing funding to larger, more highly leveraged investments. 

Income Statement for the year ended 30 November 2008

		Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Loss on investments	9	-	(2,103)	(2,103)	-	(201)	(201)	-	(2,304)	(2,304)
Income from investments	2	403	-	403	702	-	702	1,105	-	1,105
Other income	2	23	-	23	20	-	20	43	-	43
Investment management fees	3	(37)	(147)	(184)	(63)	(252)	(315)	(100)	(399)	(499)
Other expenses	5	(139)	-	(139)	(135)	-	(135)	(274)	-	(274)
Net return/(loss) on ordinary activities before taxation		250	(2,250)	(2,000)	524	(453)	71	774	(2,703)	(1,929)
Tax on ordinary activities	6	(47)	47	-	(99)	59	(40)	(146)	106	(40)
Return attributable to equity shareholders		203	(2,203)	(2,000)	425	(394)	31	628	(2,597)	(1,969)
Return per Ordinary share (pence)		2.08	(22.61)	(20.53)	2.84	(2.63)	0.21

Reconciliation of Movements in Shareholders' Funds

For the year ended 30 November 2008

		Ordinary	C Ordinary
		Shares	Shares	Total
	Notes	£'000	£'000	£'000
Opening Shareholders' funds		10,001	14,538	24,539
Movements in the year
Total profit/(loss) for the year		(2,000)	31	(1,969)
Dividends paid - revenue	7	(171)	(329)	(500)
Closing Shareholders' funds		7,830	14,240	22,070

Income Statement for the year ended 30 November 2007

		Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Loss on investments	9	-	457	457	-	334	334	-	791	791
Income from investments	2	392	-	392	698	-	698	1,090	-	1,090
Other income	2	41	-	41	21	-	21	62	-	62
Investment management fees	3	(59)	(235)	(294)	(82)	(331)	(413)	(141)	(566)	(707)
Other expenses	5	(102)	-	(102)	(136)	-	(136)	(238)	-	(238)
Net return/(loss) on ordinary activities		272	222	494	501	3	504	773	225	998
before taxation
Tax on ordinary activities	6	(48)	76	28
Return attributable to equity shareholders		224	298	522	410	66	476	634	364	998
Return per Ordinary share (pence)		2.30	3.06	5.36	2.74	0.44	3.18

A Statement of Total Recognised Gains and Losses has not been prepared as all gains and losses are recognised in the Income Statement.

All items in the above statement are derived from continuing operations. The Company has only one class of business and derives its income from investments made in shares, securities and bank deposits.

The total column of this Statement is the Profit and Loss Account of the Company.

Reconciliation of Movements in Shareholders' Funds

For the year ended 30 November 2007

		Ordinary	C Ordinary
		Shares	Shares	Total
	Notes	£'000	£'000	£'000
Opening Shareholders' funds		10,210	14,362	24,572
Movements in the year
Total profit/(loss) for the year		522	476	998
Dividends paid - revenue	7	(49)	(150)	(199)
		(682)	(150)	(832)
Closing Shareholders' funds		10,001	14,538	24,539

Balance Sheet as at 30 November 2008

		30 November 2008			30 November 2007
		Ordinary shares	C Ordinary shares	Total	Ordinary shares	C Ordinary shares	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Fixed assets
Investments at fair value through profit or loss	9	7,408	13,716	21,124	9,318	13,123	22,441
Current assets
Debtors	11	358	556	914	263	256	519
Cash and overnight deposits		102	40	142	515	1,323	1,838
		460	596	1,056	778	1,579	2,357
Creditors: amounts falling due within one year	12	(38)	(72)	(110)	(95)	(164)	(259)
Net current assets		422	524	946	683	1,415	2,098
Total net assets		7,830	14,240	22,070	10,001	14,538	24,539
Capital and reserves
Called up share capital	13	974	1,495	2,469	974	1,495	2,469
Share premium	14	4,685	12,711	17,396	4,685	12,711	17,396
Distributable reserve	14	3,648	-	3,648	3,648	-	3,648
Capital redemption reserve	14	73	-	73	73	-	73
Capital reserve - realised	14	1,027	(358)	669	1,038	(411)	627
Capital reserve - unrealised	14	(2,954)	(173)	(3,127)	(762)	274	-488
Revenue reserve	14	377	565	942	345	469	814
Equity shareholders' interest		7,830	14,240	22,070	10,001	14,538	24,539
Net asset value per ordinary share (pence)	15	80.4	95.2		102.6	97.2

The financial statements were approved by the Board of Directors and were signed on its behalf by:

Gregor Michie

Director 

9 March 2009

Cash Flow Statement for the year ended 30 November 2008

		Year ended			Year ended
		30 November 2008			30 November 2007
		Ordinary shares	C Ordinary shares	Total	Ordinary shares	C Ordinary shares	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Operating activities
Investment income received		374	559	933	361	596	957
Deposit interest received		25	21	46	41	20	61
Investment management fees paid		(328)	(500)	(828)	(297)	(420)	(717)
Secretarial fees paid		(42)	(60)	(102)	(28)	(40)	(68)
Cash paid to and on behalf of Directors		(25)	(34)	(59)	(32)	(45)	(77)
Other cash payments		(51)	(106)	(157)	(10)	(71)	(81)
Net cash (outflow)/inflow from operating activities	16	(47)	(120)	(167)	35	40	75
Taxation
Corporation tax		-	-	-	7	(7)	-
Financial investment
Purchase of investments		(2,790)	(7,947)	(10,737)	(4,638)	(7,809)	(12,447)
Sale of investments		2,595	7,113	9,708	3,113	8,912	12,025
Net cash (outflow)/inflow from financial investment		(195)	(834)	(1,029)	(1,525)	1,103	(422)
Equity dividends paid		(171)	(329)	(500)	(731)	(300)	(1,031)
Net cash (outflow)/inflow from financing		(413)	(1,283)	(1,696)	(2,214)	836	(1,378)
(Decrease)/increase in cash	17	(413)	(1,283)	(1,696)	(2,214)	836	(1,378)

The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements for the year ended 30 November 2008

1.    Accounting Policies - UK Generally Accepted Accounting Practice

(a) Basis of preparation

The financial statements have been prepared in accordance with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' (the SORP) issued in 2005.

(b) Income

Dividends receivable on equity shares and unit trusts are treated as revenue for the year on an ex-dividend basis. Where no ex-dividend date is available, dividends receivable on or before the year end are treated as revenue for the year. Provision is made for any dividends not expected to be received. The fixed returns on debt securities and non-equity shares are recognised on a time apportionment basis so as to reflect the effective interest rate on the debt securities and shares. Provision is made for any fixed income not expected to be received. Interest receivable from cash and short term deposits and interest payable are accrued to the end of the year.

(c) Expenses

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

- expenses which are incidental to the acquisition and disposal of an investment are charged to capital; and

- expenses are charged to realised capital reserves where a connection with the maintenance or enhancement of the value of the investments can be demonstrated. In this respect the investment management fee has been allocated 20% to revenue and 80% to realised capital reserves to reflect the Company's investment policy and prospective income and capital growth. Expenses are allocated to either the Original pool or the C share pool depending on the nature of the expense. 

(d) Taxation

Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date, where transactions or events in an obligation to pay more tax in the future or right to pay less 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 reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the financial statements which are capable of reversal in one or more subsequent periods.

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

The tax effect of different items of income/gain and expenditure/loss is allocated between capital reserves and revenue account on the same basis as the particular item to which it relates using the Company's effective rate of tax for the period.

(e) Investments

In valuing unlisted investments, the Directors follow the criteria set out below. These procedures comply with the revised International Private Equity and Venture Capital Valuation Guidelines for the valuation of private equity and venture capital investment, Investments are recognised at their trade date and are valued at fair value, which represents the Director's view of the amount for which an asset could be exchanged between knowledgeable willing parties in an arm's length transaction. This does not assume that the underlying business is saleable at the reporting date or that its current shareholders have an intention to sell their holding in the near future.

1.  For investments completed within the twelve months prior to the reporting date and those at an early stage in their development, fair value is determined using the Price of Recent Investment method, except that adjustments are made when there has been a material change in the trading circumstances of the company or a substantial movement in the relevant sector of the stock market.

2. A financial asset or liability is generally de-recognised when the contract that gives rise to it is settled, sold, cancelled or expires.

Whenever practical, recent investments will be valued by reference to a material arm's length transaction or a quoted price.

3. Mature companies are valued by applying a multiple to their fully-taxed prospective earnings to determine the enterprise value of the company.

3.1 To obtain a valuation of the total ordinary share capital held by management and the institutional investors, the value of third party debt, institutional loan stock, debentures and preference share capital is deducted from the enterprise value. The effect of any performance-related mechanisms is taken into account when determining the value of the ordinary share capital.

3.2 Preference shares, debentures and loan stock are valued using the Price of Recent Investment method. When a redemption premium has accrued, this will be valued only if there is a reasonable prospect of it being paid. Preference shares which carry a right to convert into ordinary share capital are valued at the higher of the Price of Recent Investment method basis and the price/earnings basis, both described above.

4. Where there is evidence of impairment, a provision may be taken against the previous valuation of the investment.

5. In the absence of evidence of deterioration, or strong defensible evidence of an increase in value, the air value is determined to be that reported at the previous balance sheet date.

6. All unlisted investments are valued individually by Aberdeen Private Equity's Portfolio Management Team. The resultant valuations are subject to detailed scrutiny and approval by the Directors of the company.

7. In accordance with normal market practice, investments listed on the Alternative Investment Market or a recognised stock exchange are valued at their bid market price.

(f) Gains and losses on investments

When the Company sells or re-values its investments during the year, any gains or loss arising are credited or charged to the Income Statement.

2 Income

	Year ended				Year ended
	30 November 2008				30 November 2007
	Ordinary Shares	C Ordinary Shares	Total		Ordinary Shares	C Ordinary Shares	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Income from investments:
UK dividends	22	46	68		14	23	37
UK unfranked investment income	381	656	1,037		378	675	1,053
	403	702	1,105		392	698	1,090
Interest:
Deposit interest	23	20	43		41	21	62
Total income	426	722	1,148		433	719	1,152

3 Investment management fees

	Year ended 30 November 2008
		Ordinary Shares			C Ordinary Shares			Total
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Investment management fees at 2.5%	48	192	240	74	296	370	122	488	610
VAT thereon	7	26	33	10	39	49	17	65	82
Reclaimable VAT (see note 4)	(18)	(71)	(89)	(21)	(83)	(104)	(39)	(154)	(193)
	37	147	184	63	252	315	100	399	499

	Year ended 30 November 2007
		Ordinary Shares			C Ordinary Shares			Total
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Investment management fees at 2.5%	54	215	269	72	289	361	126	504	630
Less: Fees already charged through Unit Trusts	(4)	(15)	(19)	(2)	(7)	(9)	(6)	(22)	(28)
Net investment management fees charged	50	200	250	70	282	352	120	482	602
VAT thereon	9	35	44	12	49	61	21	84	105
	59	235	294	82	331	413	141	566	707

Details of the fee basis are contained in the Director's Report.

4 Reclaimable VAT

In 2007 the European Court of Justice ruled that investment management fees should be exempt from VAT. At the balance sheet date the Manager estimates that the Company will recover in the region of 70% of the total VAT suffered, £127,000 for the Ordinary Shares and £149,000 for the C Ordinary Shares, in the 3 years to September 2008. These amounts have been allocated between revenue and capital in the same proportion as irrecoverable VAT was originally charged.

5 Other expenses

	Year ended 30 November 2008
		Ordinary Shares			C Ordinary Shares			Total
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Secretarial fees	29	-	29	43	-	43	72	-	72
Directors' remuneration	28	-	28	40	-	40	68	-	68
Audit remuneration - audit services	5	-	5	7	-	7	12	-	12
	1	-	1	1	-	1	2	-	2
Irrecoverable VAT	11	-	11	16	-	16	27	-	27
Bad debts written off	41	-	41	-	-	-	41	-	41
Miscellaneous expenses	24	-	24	28	-	28	52	-	52
	139	-	139	135	-	135	274	-	274
	Year ended 30 November 2007
		Ordinary Shares			C Ordinary Shares			Total
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Secretarial fees	29	-	29	40	-	40	69	-	69
Directors' remuneration	29	-	29	40	-	40	69	-	69
Audit remuneration - audit services	5	-	5	6	-	6	11	-	11
	1	-	1	2	-	2	3	-	3
Irrecoverable VAT	10	-	10	14	-	14	24	-	24
Miscellaneous expenses	28	-	28	34	-	34	62	-	62
	102	-	102	136	-	136	238	-	238

6 Tax on ordinary activities

	Year ended 30 November 2008
	Ordinary Shares			C Ordinary Shares			Total
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Corporation tax	(47)	47	-	(99)	59	(40)	(146)	106	(40)
Charge for year	(47)	47	-	(99)	59	(40)	(146)	106	(40)
	Year ended 30 November 2007
	Ordinary Shares			C Ordinary Shares			Total
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Corporation tax	(48)	76	28	(91)	63	(28)	(139)	139	-
Charge for year	(48)	76	28	(91)	63	(28)	(139)	139	-
The tax assessed for the period is lower than the standard rate of corporation tax 28.7% (2007: 30%). The differences are explained below:

	Year ended				Year ended
	30 November 2008				30 November 2007
	Ordinary Shares	C Ordinary Shares	Total		Ordinary Shares	C Ordinary Shares	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Return on ordinary activities before tax	250	524	774		272	501	773
Revenue return on ordinary activities multiplied by	72	150	222		81	150	231
standard rate of corporation tax	(6)	(13)	(19)		(4)	(7)	(11)
Effect of UK income not subject to taxation	(19)	(38)	(57)		(29)	(52)	(81)
Smaller Companies relief	(47)	(59)	(106)		(76)	(63)	(139)
Relief from capital	-	40	40		(28)	28	-

At 30 November 2008 the Company has utilised all surplus management expenses (2007: £34,000).

7 Dividends
	Year ended			Year ended
	30 November 2008			30 November 2007
Amounts recognised as distributions to Shareholders in the year:	Ordinary Shares	C Ordinary Shares	Total	Ordinary Shares	C Ordinary Shares	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Revenue dividends
Final revenue dividend for the year ended 30 November 2007 1.75p	171	-	171	-	-	-
paid on 30 April 2008
Final revenue dividend for the year ended 30 November 2007 2.2p	-	329	329	-	-	-
paid on 30 April 2008
Interim revenue dividend for the year ended 30 November 2006 0.5p	-	-	-	49	-	49
(2005: 0.5p) paid on 30 March 2007
Interim revenue dividend for the year ended 30 November 2006 1p	-	-	-	-	150	150
(2005: nil) paid on 30 March 2007
	171	329	500	49	150	199
Capital dividends
Interim capital dividend for the year ended 30 November 2006 of 4p	-	-	-	390	-	390
(2005: 1.5p) paid on 30 March 2007
Interim capital dividend for the year ended 30 November 2007 of 3p	-	-	-	292	-	292
(2005: 1.5p) paid on 24 August 2007
Interim capital dividend for the year ended 30 November 2007 of 1p	-	-	-	-	150	150
(2005: nil) paid on 24 August 2007
	-	-	-	682	150	832

We set out below the total revenue dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of Section 274 of the Income Tax Act 2007 are considered

	Year ended			Year ended
	30 November 2008			30 November 2007
Amounts recognised as distributions to Shareholders in the year:	Ordinary Shares	C Ordinary Shares	Total	Ordinary Shares	C Ordinary Shares	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Revenue dividends
Revenue available for distribution by way of dividends for the year	203	425	628	224	410	634
Final dividend for the year ended 30 November 2007 Ordinary Shares 1.75p paid on 30 April 2008	-	-	-	171	-	171
Final dividend for the year ended 30 November 2007 C Ordinary Shares 2.2p paid on 30 April 2008	-	-	-	-	329	329

The proposed final revenue dividend for the Company after the conversion of the C Ordinary shares into Ordinary shares is 2.7p payable on 30 April 2009.

8. Return per ordinary share

	Year ended			Year ended
The returns per share have been based on the following figures:	30 November 2008			30 November 2007
	Ordinary Shares	C Ordinary shares	Total	Ordinary Shares	C Ordinary shares	Total
Weighted average number of ordinary shares	9,744,243	14,954,494		9,744,243	14,954,494
Revenue return	£203,000	£425,000	£628,000	£224,000	£410,000	£634,000
Capital return	(£2,203,000)	(£394,000)	(£2,597,000)	£298,000	£66,000	£364,000
Total return	(£2,000,000)	£31,000	(£1,969,000)	£522,000	£476,000	£998,000

We set out below the total revenue dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of Section 274 of the Income Tax Act 2007 are considered.
	Year ended				Year ended
	30 November 2008				30 November 2007
	Ordinary Shares	C Ordinary Shares		Total	Ordinary Shares	C Ordinary Shares	Total
	£'000	£'000		£'000	£'000	£'000	£'000
Revenue dividends
Revenue available for distribution by way of dividends for the year	203	425		628	224	410	634
Interim dividend for the year ended 30 November 2007	-	-		-	171	-	171
Ordinary Shares 2.0p paid on 30 March 2008.
Interim dividend for the year ended 30 November 2007
C Ordinary Shares 2.2p paid on 30 March 2008.	-		-	-	-	329	329
The proposed final revenue dividend for the Company after the conversion of the C ordinary shares into the ordinary shares is 1.9p payable on 30 April 2009.

9 Investments

	Year ended 30 November 2008
		Ordinary Shares			C Ordinary Shares			Total
	Listed	Unlisted & AIM	Total	Listed	Unlisted & AIM	Total	Listed	Unlisted & AIM	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Valuation brought forward	800	8,518	9,318	6,804	6,319	13,123	7,604	14,837	22,441
Unrealised (loss)/gain	-	(753)	(753)	(7)	281	274	(7)	(472)	(479)
Cost at 30 November 2007	800	9,271	10,071	6,811	6,038	12,849	7,611	15,309	22,920
Movements during the year:
Purchases	498	2,292	2,790	3,477	4,470	7,947	3,975	6,762	10,737
Sales proceeds	(1,222)	(1,373)	(2,595)	(5,810)	(1,303)	(7,113)	(7,032)	(2,676)	(9,708)
Realised gains/(losses)	(3)	101	98	(7)	253	246	(10)	354	344
Amortisation of book cost	(2)	-	(2)	(40)	-	(40)	(42)	-	(42)
Cost at 30 November 2008	71	10,291	10,362	4,431	9,458	13,889	4,502	19,749	24,251
Unrealised gain/(loss)	2	(2,956)	(2,954)	65	(238)	(173)	67	(3,194)	(3,127)
Valuation at 30 November 2008	73	7,335	7,408	4,496	9,220	13,716	4,569	16,555	21,124

	30 November 2008			30 November 2007
	Ordinary Shares	C Ordinary Shares	Total	Ordinary Shares	C Ordinary Shares	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Realised gains on historical basis	98	246	344	1,079	147	1,226
Net (decrease)/increase in value of investments	(2,201)	(447)	(2,648)	(622)	187	(435)
(Loss)/gains on investments	(2,103)	(201)	(2,304)	457	334	791

10 Participating and significant interests

The principal activity of the Company is to select and hold a portfolio of investments in unlisted & AIM securities. Although the Company will, in some cases, be represented on the board of the investee company, it will not take a controlling interest or become involved in its management. The size and structure of the companies with unlisted and AIM securities may result in certain holdings in the portfolio representing a participating interest without there being any partnership, joint venture or management consortium agreement.

At 30 November 2008 the Company held shares amounting to 20% or more of the equity capital of Armannoch Investments Limited, Energy Services Investment Company (ESIC) Limited, Lime Investments Limited and Valkyrie Capital Limited. Further details can be found on the Largest Unlisted and AIM Investments on pages 13 and 14 of the annual report.

The Company also holds shares amounting to more than 3% or more of the nominal value of the allotted shares or units of any class of certain investee companies.

Details of equity percentages held are shown in the Investment Portfolio Summary on pages 11 and 12.

11 Debtors

	30 November 2008			30 November 2007
	Ordinary Shares	C Ordinary Shares	Total		Ordinary Shares	C Ordinary Shares	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Prepayments and accrued income	265	436	701		228	256	484
Other debtors	90	120	210		28	-	28
Current taxation	3	-	3		7	-	7
	358	556	914		263	256	519

12 Creditors

	30 November 2008			30 November 2007
	Ordinary Shares	Ordinary Shares	C Ordinary Shares	Total	C Ordinary Shares	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Amounts falling due within one year:
Other creditors	13	-	-	-	-	13
Current taxation	3	-	28	28	40	43
Accruals	22	95	136	231	32	54
	38	95	164	259	72	110

At the 30 November 2008 the Original pool owed nil (2007: £65,000) and the C share pool owed nil (2007: £94,000) to Aberdeen Asset Management Ltd for management services rendered, which is included in accruals.

13 Share capital

	30 November 2008				30 November 2007
	Ordinary Shares		C Ordinary Shares		Ordinary Shares		C Ordinary Shares
13 Share capital	Number	£'000	Number	£'000	Number	£'000	Number	£'000
At 30 November the authorised share capital comprised:
allotted, issued and fully paid:
Ordinary shares of 10p each
Balance brought forward	9,744,243	974	14,954,494	1,495	9,744,243	974	14,954,494	1,495
Unissued unclassified shares of 10p each	50,255,757	5,026	5,045,506	505	50,255,757	5,026	5,045,506	505
	60,000,000	6,000	20,000,000	2,000	60,000,000	6,000	20,000,000	2,000

14. Reserves

	Share		Capital	Capital	Capital
	premium	Distributable	redemption	reserve	reserve	Revenue
	account	reserve	reserve	realised	unrealised	reserve
	£'000	£'000	£000	£'000	£'000	£'000
Ordinary Shares
At 30 November 2007	4,685	3,648	73	1,038	(762)	345
Gains on sales of investments	-	-	-	98	-	-
Reversal of unrealised capital tax gain	-	-	-	(9)	9	-
Net decrease in value of investments	-	-	-	-	(2,201)	-
Investment management fees	-	-	-	(147)	-	-
Tax effect of capital items	-	-	-	47	-	-
Retained net revenue for year	-	-	-	-	-	203
Dividends paid				-		(171)
At 30 November 2008	4,685	3,648	73	1,027	(2,954)	377
C Ordinary Shares
At 30 November 2007	12,711	-	-	(411)	274	469
Gains on sales of investments	-	-	-	246	-	-
Net decrease in value of investments	-	-	-	-	(447)	-
Investment management fees	-	-	-	(252)	-	-
Tax effect of capital items	-	-	-	59	-	-
Retained net revenue for year	-	-	-	-	-	425
Dividends paid	-	-	-	-	-	(329)
At 30 November 2008	12,711	-	-	(358)	(173)	565

15 Net asset value per Ordinary share 

30 November 2008
Ordinary shares		C Ordinary shares
Net asset	Net asset	Net asset	Net asset
value per	value	value per	value
share	attributable	share	attributable
p	£'000	p	£'000
80.4	7,830	95.2	14,240
30 November 2007
Ordinary shares		C Ordinary shares
Net asset	Net asset	Net asset	Net asset
value per	value	value per	value
share	attributable	share	attributable
p	£'000	p	£'000
102.6	10,001	97.2	14,538

The number of shares used in the above calculation is set out in note 13.

16   Reconciliation of total return before finance costs and taxation to net cash outflow from operating activities

	Year ended		Year ended
	30 November 2008		30 November 2007
	Ordinary Shares	C Ordinary Shares	Ordinary Shares	C Ordinary Shares
	£'000	£'000	£'000	£'000
Total return before taxation	(2,000)	71	494	504
Loss/(gains) on Investments	2,103	201	(457)	(334)
Increase in accrued income	(36)	(182)	(35)	(124)
(Increase)/decrease in prepayments	(3)	(1)	5	4
Decrease/(increase) in other debtors	41	-	24	(7)
Decrease in accruals	(161)	(208)	-	-
Increase in other creditors	-	(41)	-	(24)
Tax on unfranked income - UK	7	-	-	-
Amortisation of fixed income investment book cost	2	40	4	21
Net cash (outflow)/inflow from operating activities	(47)	(120)	35	40

17 Analysis of changes in net funds

	Ordinary Shares			C Ordinary Shares
	At		At	At		At
	30 November	Cash	30 November	30 November	Cash	30 November
	2007	flows	2008	2007	flows	2008
	£'000	£'000	£'000	£'000	£'000	£'000
Cash and overnight deposits	515	(413)	102	1,323	(1,283)	40

	Ordinary Shares			C Ordinary Shares
	At		At	At		At
	30 November	Cash	30 November	30 November	Cash	30 November
	2006	flows	2007	2006	flows	2007
	£'000	£'000	£'000	£'000	£'000	£'000
Cash and overnight deposits	2,729	(2,214)	515	487	836	1,323

18 Capital commitments

	At 30 November 2008		At 30 November 2007
	Ordinary Shares	C Ordinary shares	Ordinary Shares	C Ordinary shares
	£'000	£'000	£'000	£'000
Conditional capital commitments on unlisted investments	292	409	292	409

19.   Derivatives and other financial instruments

The Company's financial instruments comprise securities and other investments, cash balances and debtors and creditors that arise directly from its operations, for example, in respect of sales and purchases awaiting settlement, and debtors for accrued income. The Company may not enter into derivative transactions in the form of forward foreign currency contracts, futures and options without the written permission of the Directors. No derivative transactions were entered into during the period. The purpose of these financial instruments is efficient portfolio management.

The main risks the Company faces from its financial instruments are (i) market price risk, being the risk that the value of investment holdings will fluctuate as a result of changes in market prices caused by factors other than interest rates, (ii) interest rate risk, (iii) liquidity risk and (iv) credit rate risk. In line with the Company's investment objective, the portfolio comprises only sterling currency securities and therefore has no exposure to foreign currency risk.

The Manager's policies for managing these risks are summarised below and have been applied throughout the period. The numerical disclosures below exclude short-term debtors and creditors.

Market price risk

The Company's investment portfolio is exposed to market price fluctuations, which are monitored by the Manager in pursuance of the investment objective. Adherence to investment guidelines and to investment and borrowing policies set out in the management agreement mitigates the risk of excessive exposure to any particular type of security or issuer. These powers and guidelines include the requirement to invest in up to 50 companies across a range of industrial and service sectors at varying stages of development, to closely monitor the progress of these companies and to appoint a non executive director to the board of each company. Further information on the investment portfolio is set out in the Investment Manager's Report.

Price risk sensitivity

The following details the Company's sensitivity to a 10% increase and decrease in the market prices of AIM quoted securities, with 10% being the Manager's assessment of a reasonably possible change in market prices.

At 30 November 2008, if market prices of listed AIM/PLUS quoted securities had been 10% higher or lower with all other variables held constant, the increase or decrease in net assets attributable to Ordinary Shareholders for the year would have been £151,000 (2007:£316,000), due to the change in valuation of financial assets at fair value through profit or loss.

At 30 November 2008, 19.3% (2007: 31.6%) comprised investments in unquoted companies held at fair value. The valuation methods used by the Company include cost and realisable value. Therefore, it is not considered meaningful to provide a sensitivity analysis on the net asset position and total return for the year due to the fact any such movements would be immaterial to users of financial statements.

Interest rate risk

Some of the Company's financial assets are interest bearing, some of which are at fixed rates and some at variable. As a result, the Company is subject to exposure to fair value interest rate risk due to fluctuations in the prevailing levels of market interest rates.

The interest rate risk profile of financial assets at the balance sheet date was as follows:

Ordinary Shares
At 30 November 2008	Fixed	Floating	Non interest
	Interest	rate	bearing
Sterling	£'000	£'000	£'000
Listed	73	-	-
Unlisted and AIM/PLUS	4,200	-	3,188
Cash	-	102	-
	4,272	102	3,188
Ordinary Shares
At 30 November 2007	Fixed	Floating	Non interest
	Interest	rate	bearing
Sterling	£'000	£'000	£'000
Listed	800	-	-
Unlisted and AIM/PLUS	3,667	-	4,851
Cash	-	515	-
	4,467	515	4,851

The listed fixed interest assets have a weighted average life of 1.08 years (2007: 0.02 years) and an average interest rate of 5.75% (2007: 7.25%) per annum. The unlisted fixed interest assets have a weighted average life of 3.69 years (2007: 4.12 years) and weighted average interest rate of 8.71% (2007: 9.66%) per annum. Floating rate assets are cash balances held in interest bearing accounts. The interest rate received on the interest bearing cash balances was 2% (2007: 4%)The non-interest bearing assets represent the equity element of the portfolio. All assets and liabilities of the Company are included in the balance sheet at fair value.

C Ordinary Shares
At 30 November 2008	Fixed	Floating	Non interest
	Interest	rate	bearing
Sterling	£'000	£'000	£'000
Listed	4,496	-	-
Unlisted and AIM/PLUS	5,966	-	3,254
Cash	-	40	-
	10,462	40	3,254
C Ordinary Shares
At 30 November 2007	Fixed	Floating	Non interest
	Interest	rate	bearing
Sterling	£'000	£'000	£'000
Listed	6,804	-	-
Unlisted and AIM/PLUS	3,744	-	2,575
Cash	-	1,323	-
	10,548	1,323	2,575

The listed fixed interest assets have a weighted average life of 0.73 years (2007: 0.62 years) and a average interest rate of 4.99% (2007: 4.75%) per annum. The unlisted fixed interest assets have a weighted average life of 4.19 years (2007: 4.83 years) and weighted average interest rate of 8.86% (2007: 10.49%) per annum. Floating rate assets are cash balances held in interest bearing accounts. The interest rate received on the interest bearing cash balances was 2% (2007: 4%)The non-interest bearing assets represent the equity element of the portfolio. All assets and liabilities of the Company are included in the balance sheet at fair value.

Maturity profile

The interest rate profile of the Company's financial assets at the balance sheet date was as follows:

Ordinary Shares	Within	Within	Within	Within	Within	More than
	1 year	1-2 years	2-3 years	3-4 years	4-5 years	5 years	Total
At 30 November 2008	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Fixed interest
Listed	73	-	-	-	-	-	0
Unlisted	646	17	744	1,271	315	1,206	1,059
	719	17	744	1,271	315	1,206	1,059
Ordinary Shares			Within		Within
			2-3 years		4-5 years		Total
At 30 November 2007			£'000		£'000		£'000
Fixed interest
Listed	800	-	-	-	-	-	0
Unlisted	195	63	139	794	1,381	1,095	1,520
	995	63	139	794	1,381	1,095	1,520

Within "more than 5 years" there is a figure of £40,000 (2007: £55,000) in respect of preference shares which have no redemption date. It is the Directors' opinion that the carrying amounts of these financial assets represent the maximum credit risk exposure at the balance sheet date.

C Ordinary Shares	Within	Within	Within	Within	Within	More than
	1 year	1-2 years	2-3 years	3-4 years	4-5 years	5 years	Total
At 30 November 2008	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Fixed interest
Listed	4,496	-	-	-	-	-	4,496
Unlisted	720	-	311	2,088	465	2,382	5,966
	5,216	-	311	2,088	465	2,382	10,462
C Ordinary Shares	Within	Within	Within	Within	Within	More than
	1 year	1-2 years	2-3 years	3-4 years	4-5 years	5 years	Total
At 30 November 2007	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Fixed interest
Listed	6,804	-	-	-	-	-	6,804
Unlisted	135	-	-	378	1,976	1,255	3,744
	6,939	-	-	378	1,976	1,255	10,548

Within "more than 5 years" there is a figure of £33,000 (2007: £52,000) in respect of preference shares which have no redemption date. It is the Directors' opinion that the carrying amounts of these financial assets represent the maximum credit risk exposure at the balance sheet date.

Liquidity risk

This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Company's financial instruments include unlisted and AIM/PLUS traded investments which are not traded in an organised public market and which generally may be illiquid. As a result, the Company may not be able to liquidate quickly some of its investments at an amount close to their fair value in order to meet its liquidity requirements.

The Company's investment policy ensures that the Company has sufficient investment in cash and readily realisable securities to meet its ongoing obligations. At 30 November 2008 these investments were valued at £175,000 (2007: £1,315,000) in the Original pool and £4,536,000 (2007: £8,127,000) in the C share pool.

The Company's investment policy ensures that the Company has sufficient investment in cash and readily realisable securities to meet its ongoing obligations. At 30 November 2008 these investments were valued at £175,000 (2007: £1,315,000) in the Original pool and £4,536,000 (2007: £8,127,000) in the C share pool.

The Company has the power to take out borrowings, which gives it access to additional funding when required.

Credit risk

This is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company.

The Company's financial assets exposed to credit risk amounted to the following:

	30 November 2008				30 November 2007
	Ordinary Shares	'C' Ordinary Shares	Total		Ordinary Shares	'C' Ordinary Shares	Total
Investments in listed fixed interest instruments	73	4,496	4,569		800	6,804	7,604
Cash and cash equivalents	102	40	142		515	1,323	1,838
	175	4,536	4,711		1,315	8,127	9,442

Credit risk arising on fixed interest instruments is mitigated by investing in UK Government Stock.

All assets which are traded on a recognised exchange and all the Company's cash balances are held by JP Morgan Chase (JPM), the Company's custodian. Should the credit quality or the financial position of JPM deteriorate significantly the Manager will move these assets to another financial institution.

There were no significant concentrations of credit risk to counterparties at 30 November 2008 or 30 November 2007.

Investment Portfolio Summary

As at 30 November 2008

Investment Name		Ordinary Pool			C Share Pool		% of equity held	% of equity held by other clients
	Valuation	Cost	% of total assets	Valuation	Cost	% of total assets
Unlisted Investments
Funeral Services Partnership	416	348	5.3%	595	497	4.2%	6.1%	23.2%
Dalglen 1148	411	411	5.2%	569	569	4.0%	15.5%	64.2%
Training for Travel	341	298	4.3%	483	423	3.4%	8.2%	23.1%
Homelux Nenplas	319	149	4.1%	439	205	3.1%	8.1%	38.4%
Transys Holdings	285	249	3.6%	457	398	3.2%	7.5%	65.6%
Oliver Kay Holdings	283	249	3.6%	436	383	3.1%	4.0%	15.2%
Armannoch Investments	300	300	3.8%	400	400	2.8%	49.8%	28.8%
Valkyrie Capital	300	300	3.8%	400	400	2.8%	49.8%	28.8%
Atlantic Foods	95	75	1.2%	570	447	4.0%	2.9%	4.1%
Martel Instruments Holdings	264	264	3.4%	398	398	2.8%	9.3%	26.7%
Camwatch	257	257	3.3%	393	393	2.8%	10.9%	34.9%
Nessco	224	224	2.9%	348	348	2.4%	7.5%	32.4%
Steminic (trading as MS Industrial Services)	223	223	2.8%	338	338	2.4%	9.6%	38.7%
Silkwater Holdings (trading as Cyclotech)	207	149	2.6%	346	249	2.4%	5.4%	15.5%
Energy Services Investment Company (ESIC)	149	149	1.9%	398	398	2.8%	20.9%	71.4%
Cash Bases	500	250	6.4%	-	-	-	8.3%	20.2%
TC Communications	174	174	2.2%	299	299	2.1%	9.8%	29.5%
Adler & Allan Holdings	188	175	2.4%	269	249	1.9%	0.8%	38.2%
Enpure Holdings	145	100	1.8%	145	100	1.0%	0.8%	78.1%
Countcar	90	7	1.1%	135	10	0.9%	5.7%	23.3%
Essential Viewing Systems	188	209	2.4%	-	-	-	6.7%	34.1%
Llanllyr Water Company	100	100	1.3%	-	-	-	7.5%	42.4%
Sanastro	98	275	1.2%	-	-	-	3.5%	9.6%
Lime Investments	33	33	0.4%	42	42	0.3%	23.8%	69.3%
Broomco (4136)	31	31	0.4%	41	41	0.3%	0.5%	1.7%
Buildstore	52	105	0.7%	-	-	-	0.6%	6.8%
PLM Dollar Group	50	50	0.6%	-	-	-	0.6%	30.3%
Driver Hire Investments Group	40	119	0.5%	-	-	-	0.6%	44.1%
PSCA International	32	32	0.4%	-	-	-	-	-
IRW Systems	22	45	0.3%	-	-	-	8.9%	48.6%
Others	30	1,548	0.4%	54	139	0.4%
	5,847	6,898	74.3%	7,555	6,726	53.1%
AIM/PLUS
Concateno	119	124	1.5%	281	315	2.0%	0.8%	0.2%
Animalcare	-	-	-	299	245	2.1%	2.3%	2.3%
Melorio	62	98	0.8%	186	296	1.3%	1.2%	1.1%
Betbrokers	115	126	1.5%	115	126	0.8%	0.8%	0.7%
Avanti Communications	153	151	1.9%	-	-	-	0.3%	1.1%
Praesepe	58	98	0.7%	87	147	0.6%	5.8%	8.9%
Plastics Capital	30	74	0.4%	112	281	0.8%	1.3%	2.6%
Mount Engineering	93	112	1.2%	41	49	0.3%	1.0%	1.5%
Craneware	47	29	0.6%	72	45	0.5%	0.3%	0.4%
Essentially Group	21	49	0.3%	97	182	0.7%	1.1%	2.1%
Hasgrove	58	73	0.7%	39	49	0.3%	0.5%	1.4%
Strategic Retail	93	117	1.2%	-	-	-	0.3%	3.7%
Software Radio Technology	90	273	1.1%	-	-	-	0.9%	1.7%
Neuropharm	90	100	1.1%	-	-	-	0.2%	0.5%
DM	-	-	-	78	126	0.5%	0.6%	0.8%
Optare	31	53	0.4%	47	79	0.3%	0.6%	0.7%
Litcomp	41	81	0.5%	36	71	0.3%	4.9%	2.0%
Datong	74	151	0.9%	-	-	-	0.9%	1.1%
Formation Group	23	64	0.3%	31	83	0.2%	0.4%	0.9%
Axeon	51	197	0.6%	-	-	-	0.9%	2.8%
Managed Support Services	18	120	0.2%	26	180	0.2%	0.5%	1.1%
OPG Power Ventures	16	41	0.2%	16	41	0.1%	0.2%	0.4%
Brulines (Holdings)	21	21	0.3%	11	10	0.1%	0.1%	0.2%
Individual Restaurant Company	20	78	0.3%	12	47	0.1%	0.3%	0.9%
Smart Identity	15	25	0.2%	15	25	0.1%	1.4%	4.6%
Hexagon Human Capital	29	72	0.4%	-	-	-	0.2%	0.5%
Gold Frost	28	130	0.4%	-	-	-	0.7%	0.7%
Work Group	25	201	0.3%	-	-	-	0.9%	2.3%
Others	93	735	1.3%	64	335	0.4%
	1,514	3,393	19.3%	1,665	2,732	11.7%
Listed Fixed Income Investments
Treasury 5.75% 31 Dec 2009	73	71	0.9%	2,536	2,488	17.8%
Treasury 4% 7 March 2009	-	-	-	1,960	1,943	13.8%
	73	71	0.9%	4,496	4,431	31.6%
Total	7,434	10,362	94.6%	13,716	13,889	96.3%

Business Risks

Principal Risks and Uncertainties

The principal risks facing the Company relate to its investment activities and include market price, interest rate and liquidity.

An explanation of these risks and how they are managed is contained in Note 19 to the financial statements. Additional risks faced by the Company, and the mitigation approach adopted by the Board, are as follows:

(i)      investment objective: the Board’s aim is to maximise absolute returns to shareholders while managing risk by ensuring an appropriate diversification of investments.

(ii)     investment policy: inappropriate stock selection leading to underperformance in absolute and relative terms is a risk which the Manager mitigates by operating within investment guidelines and regularly monitoring performance against the peer group. The regulations affecting Venture Capital Trusts are central to the Company’s investment policy.

(iii)    discount volatility: due to lack of liquidity in the secondary market, venture capital trust shares tend to trade at discounts to net asset values

(iv)     regulatory risk: the Company operates in a complex regulatory environment and faces a number of related risks. A breach of section 842AA of the Income and Corporation Taxes Act 1988 could result in the Company’s being subject to capital gains tax on the sale of its investments. A breach of the VCT Regulations could result in the loss of VCT status and consequent loss of tax reliefs currently available to shareholders. Serious breach of other regulations, such as the UKLA Listing rules and the Companies Acts would also result in loss of VCT status and reputational damage. The Board receives quarterly reports from the Manager in order to monitor compliance with regulations.

The Board considers all risks and the measures in place to manage them and monitors their management at each meeting.

Statement of Directors' Responsibilities

The directors are responsible for preparing the Annual Report, Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The financial statements are required by law to give a true and fair view of the state of affairs of the company and of the net return of the company for that period. In preparing these financial statements, the directors are required to:

•    select suitable accounting policies and then apply them consistently;

•    make judgments and 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 financial statements;

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

The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 1985. 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.

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

Responsibility statement of the Directors in respect of the annual Financial Report

We confirm that, to the best of our knowledge, the financial statements, prepared in accordance with the applicable set of accounting standards and set out on pages 30 to 33, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and the Directors' Report, set out on pages 17 to 20, includes a fair review of the developments and performance of the business and the position of the Company together with a description of the principal risks and uncertainties that they face.

The financial information contained within this announcement does not constitute the Company's statutory financial statements as defined in Section 240 of the Companies Act 1985 and has not been delivered to the Registrar of Companies. Statutory financial statements will be filed with the Registrar of Companies in due course. The financial information for 2007 is derived from the statutory accounts for 2007 which have been delivered to the Registrar of Companies. The independent auditors' report on the financial statements under section 235 of the Companies Act 1985 is unqualified and does not contain a statement under section 237(2) or (3) of the Companies Act 1985. The statutory financial statements for the year ended 30 November 2007 contain an audit report which was unqualified and did not contain statements under Sections 237(2) or (3) of the Companies Act 1985, and have been delivered to the Registrar of Companies.

The full annual financial report is available at the Company's website: www.agovct.co.uk

For Aberdeen Growth Opportunities VCT PLC

Aberdeen Asset Management PLC, Secretaries

10 March 2009

 

END

 

 

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