Final Results

Glasgow Income Trust PLC 27 October 2006 Glasgow Income Trust plc Notification of Submission of Accounts to Companies House Glasgow Income Trust plc hereby gives notice that accounts for the year to 30 September 2006, prepared in accordance with Section 272 of the Companies Act 1985, have been submitted to: The Registrar of Companies Companies House 37 Castle Terrace Edinburgh EH1 2EB These accounts have been submitted in connection with the fourth interim dividend in respect of the year to 30 September 2006, announced on 5 October 2006 and due to be paid on 31 October 2006. A copy of these accounts is attached to this announcement. Glasgow Income Trust plc is managed by Glasgow Investment Managers Limited. GLASGOW INCOME TRUST PLC Company Number SC111955 Unaudited Interim Accounts for the period 1 October 2005 to 30 September 2006 Prepared under Section 272 Companies Act 1985 GLASGOW INCOME TRUST PLC Income Statement for the period 1 October 2005 to 30 September 2006 Notes Revenue Capital Total Â£ Â£ Â£ GAINS Gains on investments 6 - 11,124,283.00 11,124,283.00 REVENUE Dividend income 2 3,337,629.00 - 3,337,629.00 Fixed interest income 2 1,620,663.00 - 1,620,663.00 Deposit interest 2 108,705.00 - 108,705.00 Traded Option premiums 2 558,057.00 - 558,057.00 Other Income 2 255.00 - 255.00 ________ ________ _________ 5,625,309.00 11,124,283.00 16,749,592.00 ________ ________ _________ EXPENSES Investment management fee 3 (334,673.00) (334,673.00) (669,346.00) Other administrative expenses 4 (257,153.00) - (257,153.00) Finance cost of borrowings 5 (37,557.00) (37,557.00) (75,114.00) Zero coupon finance costs 7 - (1,376,950.00) (1,376,950.00) ________ ________ _________ (629,383.00) (1,749,180.00) (2,378,563.00) ----------------- ------------------ ------------------ PROFIT BEFORE TAX 4,995,926.00 9,375,103.00 14,371,029.00 Taxation (497,892.00) 111,669.00 (386,223.00) ________ ________ _________ PROFIT FOR THE PERIOD 4,498,034.00 9,486,772.00 13,984,806.00 ======= ======= ======== The total column of this statement represents the Company's Income Statement, prepared in accordance with International Financial Reporting Standards. The revenue and capital columns are supplementary to this and are prepared under guidance published by the Association of Investment Trust Companies. The accompanying notes are an integral part of this statement. All items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period. GLASGOW INCOME TRUST PLC Balance Sheet as at 30 September 2006 Notes Â£ Â£ NON-CURRENT ASSETS Listed investments 6 125,902,402.00 Zero coupon finance call options 7 8,155,588.00 Zero coupon finance put options 7 4,688,863.00 Investment in subsidiary undertaking 8 5,000.00 _________ 138,751,853.00 CURRENT ASSETS Trade and other receivables 9 3,256,332.00 Cash and cash equivalents 102,405.00 _________ 3,358,737.00 --------------- TOTAL ASSETS 142,110,590.00 _________ CURRENT LIABILITIES Trade and other payables 10 (1,466,487.00) Short term borrowings 11 (400,000.00) _________ (1,866,487.00) NON-CURRENT LIABILITIES Zero coupon finance call options 7 (32,509,013.00) Zero coupon finance put options 7 (20,981,038.00) (53,490,051.00) _________ TOTAL LIABILITIES 55,356,538.00 _________ NET ASSETS 86,754,052.00 ======== ISSUED CAPITAL AND RESERVES Called up share capital 12 23,496,260.00 Share premium account 13 32,714,425.00 Special reserve 14 5,000,000.00 Realised capital reserve 15 9,079,443.00 Unrealised capital reserve 15 3,916,858.00 Revenue reserve 16 2,547,066.00 _________ EQUITY SHAREHOLDERS' FUNDS 86,754,052.00 ======== Approved by the Board of Directors on 13 October 2006 and signed on its behalf. _____________________ Director The accompanying notes are an integral part of this balance sheet. GLASGOW INCOME TRUST PLC Statement of Changes in Equity for the period 1 October 2005 to 30 September 2006 Notes Share Share Capital Realised Unrealised Retained Total Capital Premium Redemption Capital Capital Revenue Reserve Reserve Reserve Reserve Â£ Â£ Â£ Â£ Â£ Â£ Â£ As at 30 September 19,725,638 22,885,524 5,000,000 3,984,075 9,523,028 883,318 62,001,583 2005 Effect of changes in accounting policy arising from the introduction of International Financial Reporting - - - (2,880) 5,306 1,316,992 1,319,418 Standards As at 30 September 2005 19,725,638 22,885,524 5,000,000 3,981,195 9,528,334 2,200,310 63,321,001 (restated) Revenue for the year 16 - - - - - 4,498,034 4,498,034 Capital 15 - - - 5,098,248 4,388,524 - 9,486,772 Profits for the year Equity dividends 17 - - - - - (4,151,278) (4,151,278) paid Issues of share capital 12,13 3,770,622 9,828,901 - - - - 13,599,523 -------- -------- -------- -------- -------- -------- -------- As at 30 September 2006 23,496,260 32,714,425 5,000,000 9,079,443 13,916,858 2,547,066 86,754,052 - - ======== ======== ======== ======== ======== ======== ======== GLASGOW INCOME TRUST PLC Notes to the Financial Statements 1. ACCOUNTING POLICIES The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS). The principal accounting policies are as follows: (a) Basis of preparation The financial statements are prepared on the historical cost basis except that investments and derivative financial instruments are stated at their fair value. (b) Investments At 1 October 2005, the Company designated all its investments into the financial assets at fair value through profit and loss category. The fair value of investments is based upon their quoted market bid price at close of business on the balance sheet date. (c) Gains and losses on investment transactions Gains and losses arising on sales of investments are taken to realised capital reserve. Changes in the fair value of investments are recognised in the income statement through the unrealised capital reserve. (d) Income and expenditure Dividends on equity investments are credited to revenue on the date when the investment is first quoted ex-dividend at the amount receivable without any attributable tax credit. Interest income from certain fixed interest securities is recognised in the income statement as it accrues, using the effective interest rate of the instrument calculated at the acquisition date. Interest income includes the amortisation of any discount or premium or other differences between the initial carrying amount of the interest-bearing instrument and its amount at maturity calculated on an effective interest rate basis. Interest from deposits, interest payable and expenses of management are dealt with on an accruals basis. The finance costs of borrowings and the fee payable to the Company's managers are charged partly to capital and partly to revenue in proportion to the expected long-term split of returns in the form of capital gains and income from the Company's entire investment portfolio. All other expenses of management are charged to revenue. The Company has in place medium-term funding in the form of zero coupon finance through a series of option transactions on the FTSE 100 Index. These options are classed as derivative financial instruments and are shown separately at their fair values on the face of the balance sheet. Movements in the fair value of these instruments are recognised in the income statement and charged against the unrealised capital reserve. Underwriting commission is taken to revenue, unless any shares underwritten are required to be taken up, in which case the commission received is deducted from the cost of the investment. GLASGOW INCOME TRUST PLC Notes to the Financial Statements 2. REVENUE Â£ Income from investments Dividend income 3,337,629 Fixed interest income 1,620,663 ________ 4,958,292 ________ Other revenue Interest receivable from deposits 108,705 Traded Option Premiums 558,057 Other Income 255 ________ Total income 5,625,309 ======= 3. SECRETARIAL AND MANAGEMENT FEE Glasgow Investment Managers Limited ("Glasgow") acts as investment managers and secretaries to the Company under a contract which is subject to one year's notice of termination. The fee is at an annual rate of 0.75% of the amount of net assets calculated monthly and paid quarterly. The fee has been allocated 50% to capital and 50% to revenue. Of the annual total fee Â£12,500 (plus VAT) is in respect of secretarial services and is allocated 100% to revenue. The remainder of the fee is allocated 50% to capital and 50% to revenue. The Company also pays Glasgow an annual fee of Â£7,000 (plus VAT) for services in relation to the Company's participation in The Glasgow PEP. 4. OTHER ADMINISTRATIVE EXPENSES Â£ Directors' remuneration - fees as directors 41,000 Fees payable to auditors and associates - as auditors 14,100 - for other services 14,100 Other management expenses 187,953 ______ Â£257,153 ====== 5. FINANCE COSTS OF BORROWINGS Revenue Capital Total Â£ Â£ Â£ Bank loans and overdrafts 37,557 37,557 75,114 ====== ===== ====== GLASGOW INCOME TRUST PLC Notes to the Financial Statements 6. LISTED INVESTMENTS Â£ Value at 30 September 2005 under IFRS 93,292,424 Purchases 55,870,161 Amortised cost adjustments to fixed interest securities -134,108 Sales - proceeds -33,734,471 - net profits on sales 4,815,747 Movement in unrealised appreciation 5,792,649 _________ Value at 30 September 2006 Â£125,902,402 ======== Cost at 30 September 2006 108,648,104 Unrealised appreciation at 30 September 2006 17,254,298 _________ Value at 30 September 2006 Â£125,902,402 ======== GAINS ON INVESTMENTS Â£ Net gains on sales of investments 4,815,747 Movement in unrealised appreciation of investments 5,792,649 Other profits on Investments 543,063 Movement in fair value of traded options -24,547 Amortisation of zero coupon finance expenses -2,629 ________ Â£11,124,283 ======= 7. ZERO COUPON FINANCE The zero coupon finance arrangement comprises a set of separately traded financial instruments (FTSE 100 Index options). As stated in note 1(d), these options are classed as derivative financial instruments and are shown separately at their fair values on the face of the balance sheet. On 21 December 2005 new zero coupon finance arrangements were taken out which expire in January 2010. The net proceeds raised from this new arrangement were Â£1,604,000. A further tranche of zero coupon finance was taken out on 19 April 2006 which expires in April 2011. The net proceeds raised from this new arrangement were Â£8,503,250. Â£ Value at 30 September 2005 under IFRS 29,161,400 Net proceeds of new zero coupon finance 10,107,250 Movements in fair value 1,376,950 _________ At 30 September 2006 Â£40,645,600 ======== GLASGOW INCOME TRUST PLC Notes to the Financial Statements 7. ZERO COUPON FINANCE (continued) The amounts outstanding in respect of zero coupon finance comprise: Â£ Non-Current Assets: Call Options: --------------- Expiring on December 2008 1,047,600.00 Expiring on January 2010 655,850.00 Expiring on January 2010 1,917,100.00 Expiring on January 2010 1,236,025.00 Expiring on January 2010 252,250.00 Expiring on April 2011 3,046,763.00 _________ 8,155,588.00 _________ Put options: -------------- Expiring on December 2008 12,600.00 Expiring on January 2010 472,550.00 Expiring on January 2010 1,381,300.00 Expiring on January 2010 890,575.00 Expiring on January 2010 181,750.00 Expiring on April 2011 1,750,088.00 _________ 4,688,863.00 _________ Non-Current Liabilities: Call options: --------------- Expiring on December 2008 (5,088,600.00) Expiring on January 2010 (3,185,650.00) Expiring on January 2010 (9,311,900.00) Expiring on January 2010 (6,003,725.00) Expiring on January 2010 (1,225,250.00) Expiring on April 2011 (7,693,888.00) __________ (32,509,013.00) __________ Put options: -------------- Expiring on December 2008 (792,900.00) Expiring on January 2010 (2,296,450.00) Expiring on January 2010 (6,712,700.00) Expiring on January 2010 (4,327,925.00) Expiring on January 2010 (883,250.00) Expiring on April 2011 (5,967,813.00) _________ (20,981,038.00) ------------ Net Zero Coupon Finance Liability 40,645,600.00 ======== 8. SUBSIDIARY UNDERTAKING Shares at cost Â£5,000 ===== The Company owns the whole of the ordinary share capital of GIT Securities Limited, an investment dealing company registered in Scotland. In the opinion of the Directors, the value of this investment is not less than cost. 9. TRADE & OTHER RECEIVABLES Â£ Investment sales 1,040,897 Accrued income 1,774,737 Due from subsidiary undertaking 423,704 Prepayments & other debtors 16,994 ________ Â£3,256,332 ======= 10. TRADE & OTHER PAYABLES Â£ Investment purchases 900,485 Accrued charges 383,059 Corporation Tax due 182,943 ________ Â£1,466,487 ======= 11. SHORT-TERM BORROWINGS Â£ Short-term bank loans 400,000 ________ 400,000 ======= 12. CALLED UP SHARE CAPITAL Authorised 200,000,000 ordinary shares of 25 pence each Â£50,000,000 ======== Allotted, called up and fully paid Number Â£ Ordinary shares of 25 pence each At 30 September 2005 78,902,554 19,725,638 Issued in period 15,082,488 3,770,622 _________ __________ At 30 September 2006 93,985,042 Â£23,496,260 ======== ========= 13. SHARE PREMIUM ACCOUNT Â£ At 30 September 2005 22,885,524.00 On issue of new ordinary shares 10,134,652.00 Expenses of issue (305,751.00) _________ At 30 September 2006 32,714,425.00 ======== 14. SPECIAL RESERVE At 30 September 2005 and 30 September 2006 Â£5,000,000 ======= 15. OTHER CAPITAL RESERVES Realised capital reserve Â£ 30 September 05 3,984,075.00 Effect of transition to IFRS (2,880.00) ________ At 30 September 2005 under IFRS 3,981,195.00 Net profits on sales of investments during the period (note 6) 4,815,747.00 Management fee (334,674.00) Finance cost of borrowings (37,557.00) Tax credit from revenue 111,669.00 Other Profits on Investment 543,063.00 _________ At 30 September 2006 9,079,443.00 ======== Unrealised capital reserve At 30 September 2005 9,523,028.00 Effect of transition to IFRS 5,306.00 _________ At 30 September 2005 under IFRS 9,528,334.00 Movement during the period: Listed investments (note 6) 5,792,649.00 Movement in fair value of zero coupon finance (note 7) (1,376,950.00) Amortisation of expenses (2,629.00) Movement in fair value of traded options (25,546.00) _________ At 30 September 2006 13,916,858.00 ======== The capital reserves are not distributable. 16. REVENUE RESERVE Â£ At 30 September 2005 883,318.00 Effect of transition to IFRS 1,316,992.00 _______ At 30 September 2005 under IFRS 2,200,310.00 Profit for the period 4,498,034.00 Dividends paid (note 17) (4,151,278.00) ________ At 30 September 2006 2,547,066.00 ======= GLASGOW INCOME TRUST PLC Notes to the Financial Statements 17. DIVIDENDS ON EQUITY SHARES Â£ Fourth interim dividend of 2004/05 of 1.76p per share paid on 31 October 2005 1,388,685 First interim of 2005/06 of 1.03p per share paid on 31 January 2006 812,696 Second interim of 2005/06 of 1.105p per share paid on 28 April 2006 913,994 Third interim of 2005/06 of 1.105p per share paid on 31 July 2006 1,035,903 ________ Â£ 4,151,278 ======= The Company has declared a fourth interim dividend in respect of the year to 30 September 2006 of 1.81p per share which is payable on 31 October 2006. The total amount payable in respect of this dividend is Â£1,701,129. This information is provided by RNS The company news service from the London Stock Exchange

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