Final Results

RNS Number : 4368K

Electra Private Equity PLC

19 December 2008

 



Electra Private Equity PLC

Final Results for the Year Ended 30 September 2008.

The information contained in this announcement is restricted and is not for release, publication, or distribution, directly or indirectly, in or into the United States, Canada, Japan or Australia. The information in these materials does not constitute an offer of securities for sale in the United States, Canada, Japan or Australia.

No information contained in this announcement shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction.

This announcement is not an offer to sell or a solicitation of any offer to buy any securities of Electra Private Equity PLC (the 'Company', and such securities, the 'Securities') in the United States or any other jurisdiction. The Company is not registered under the U.S. Investment Company Act of 1940, as amended (the 'Investment Company Act'), and holders of any Securities will not be entitled to the benefits of the Investment Company Act. The Securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the 'Securities Act'), and may not be reoffered, resold or transferred in the United States or to, or for the account or benefit of, U.S. persons (as such term is defined in Regulation S under the Securities Act) unless registered under the Securities Act or an exemption from such registration is available. Copies of this announcement are not being, and should not be, distributed or sent into the United States. No public offering of Securities is being made in the United States. If for any reason in the future an offering of the Securities is made, such offering will be made by means of a prospectus that may be obtained from the Company and will contain all relevant information about the Company, its management, and its financial statements.

In accordance with DTR 6.3.5 the final results of Electra Private Equity Plc for the year ended 30 September 2008 are made available below.

The full Annual Report and Accounts can be accessed via the Company's website at www.electraequity.com.

References in this announcement to Electra Private Equity PLC and its subsidiaries have been abbreviated to 'Electra' or 'the Company'. References to Electra Partners LLP have been abbreviated to 'Electra Partners'.

Financial Highlights

For the year ended 30 September	2004	2005	2006	2007	2008
Net asset value per share (p)	912.86	1,197.22	1,545.07	2,001.21	1,800.64
Increase/(decrease) in net asset value per share (%)	20.2	31.2	29.0	29.5	(10.0)
Increase/(decrease) in FTSE All-Share Index (%)	12.0	20.9	11.1	8.7	(25.1)

Percentage Change in Electra's Net Asset Value Per Share Compared to FTSE All-Share Index

Period	Electra's Net Asset Value per Share %	FTSE All-Share Index %
1 year period 2007-2008	(10.02)	(25.12)
2 year period 2006-2008	16.54	(18.58)
3 year period 2005-2008	50.43	(9.55)
4 year period 2004-2008	97.25	9.33
5 year period 2003-2008	137.50	22.49
6 year period 2002-2008	135.70	37.87
7 year period 2001-2008	117.07	6.12
8 year period 2000-2008	66.00	(18.01)
9 year period 1999-2008	89.00	(12.00)
10 year period 1998-2008	166.00	6.00

Each period of performance is based on the opening net asset value per share at 30 September. 

The net asset value per share for the years 1997 to 2004 are as previously reported under UK GAAP. 

The net asset value per share for the years 2005 and 2006 are on an IFRS basis. The net asset value per share as at 30 September 1998, has been adjusted to reflect the inclusion of the management company valued at 14.50p per share.

Classification and Distribution of the Investment Portfolio *

Equities	2008 %	2007 %
Basic Industries	8	10
General Industries	4	3
Cyclical Consumer Goods	3	4
Non-Cyclical Consumer Groups	13	10
Cyclical Services	21	32
Non-Cyclical Services	1	1
Utilities	1	1
Financials †	45	31
Information Technology	4	8
Totals	100	100

* Unlisted and listed investments held at fair value

† Comprised of investment companies, real estate, speciality and other finance

Electra's Share Price Compared to the FTSE All-Share Index Over the Last Ten Years

Year	Electra's Share Price %	FTSE All-Share Index %
1999	(26.16)	(25.12)
2000	(9.97)	(18.58)
2001	12.63	(9.55)
2002	57.98	9.33
2003	97.88	22.49
2004	171.05	37.87
2005	92.57	6.12
2006	21.24	(18.00)
2007	50.00	(12.00)
2008	145.00	6.00

Objective and Investment Policy

In 2006 shareholders approved Electra's revised investment strategy and policy which is set out below.

The business and affairs of Electra are managed on an exclusive and fully discretionary basis by Electra Partners, an independent private equity fund manager. Electra is managed as an HM Revenue and Customs approved investment trust.

Electra's objective is to achieve a rate of return on equity of between 10-15% per annum over the long term by investing in a portfolio of private equity assets. Unless required to do so as an investment trust, Electra's Directors would not recommend the payment of dividends on a regular basis.

Electra Partners, on behalf of Electra, will aim to achieve this target rate of return by:

•	exploiting a track record of successful private equity investment;
•	utilising the proven skills of its senior management team, its strong record of deal flow generation and long-term presence in the private equity market;
•	investing in a number of value-creating transactions with a balanced risk profile across a broad range of investment sectors through a variety of financial instruments; and
•	actively managing its total capital position and levels of gearing in light of prevailing economic conditions

. 

Total bank borrowings by Electra will always be less than 40% of its total assets. 

Additionally, an on-market share buyback programme will be managed to generate shareholder value.

Electra Partners will target private equity opportunities (including direct investment, fund investment and secondary buy-outs of portfolios and funds) so that the perceived risks associated with such investments are justified by expected returns. These investments will be made across a broad range of sectors and types of financial instrument such as equity, senior equity, convertibles and mezzanine debt.

The investment focus will be principally on Western Europe, with the majority of investments expected to be made in the United Kingdom where Electra Partners has historically been most active. Electra Partners would expect there to be an emphasis on areas where its senior management team has specific knowledge and expertise. In circumstances where Electra Partners feels that there is merit in gaining exposure to countries and sectors outside its network and expertise, consideration will be given to investing in specific funds managed by third parties or co-investing with private equity managers with whom it has developed a relationship.

In implementing Electra's investment strategy, Electra Partners typically targets investments at a cost of £20-75 million in companies with an enterprise value of £60-200 million.

Electra will not invest more than 15% of its total assets at the time of investment in any other listed closed-ended investment funds.

Chairman's Statement

Overview

The year to 30 September 2008 was a particularly difficult one for financial markets with highly volatile stock markets, a worsening of the credit crisis and, towards the end of the year, a widespread loss of confidence driven by the prospects of recession not only in the UK but also globally.

Against this background Electra has again had a solid year including the successful realisation of a number of existing investments. Investment activity was less than the previous year and Electra ended the year with slightly increased net liquid resources of £159 million after share buy-backs of £26 million and the £9 million cost of the special dividend paid in March 2008. Together with borrowing facilities, Electra had £409 million of resources available for existing commitments and new investment at 30 September 2008, a position which the Board and Electra Partners consider to be advantageous in view of the buying opportunities which are expected to occur as the downturn progresses. 

Results

At 30 September 2008 the net asset value per share was 1,801p compared to 2,001p at the beginning of the financial year, a decline of 10%. Together with the special dividend of 25p per share paid in March 2008, this represents a negative return of 8.3% for the year. Over the same period the share price decreased by 26.5% while the FTSE All-Share Index decreased by 25.1%. Over the five years to 30 September 2008 Electra's net asset value per share, inclusive of dividends totalling 62p per share, increased by 145.2% and Electra achieved a return on equity of 18.5% on an annualised basis. Over the same five-year period the share price increased by 105.5% and the FTSE All-Share Index increased by 22.5%. 

Investment Activity

For most of the year the mid-market buy-out sector was reasonably buoyant and our Manager, Electra Partners, bid on 19 investment opportunities out of 186 considered in the year. However, its cautious pricing stance meant that it was frequently outbid by competitors and, as a result, new investment amounted to £114 million in aggregate for the year compared to £322 million in the previous year. £24 million was invested in Labco, a French business involved in the consolidation of medical laboratories in Europe and £20 million was invested in London & Stamford Property, an AIM listed company established to take advantage of the corrections expected in the industrial and commercial property market.

Part of our investment policy over the two years since shareholders approved the revised investment strategy has involved investment in funds thereby building relationships through our Manager with other private equity groups as a co-investor and as a fund investor. This has yielded substantial deal flow and we believe this is an important way of providing increased diversification and accessing overseas and niche markets as a key part of the strategy going forward. Such activity is complementary to Electra's direct investment activity and an important part in providing a greater diversity of deal flow.

During the year £192 million was received from the sale of investments including £36 million in respect of Dakota, Minnesota & Eastern Railroad, details of which were included in the last Annual Report and the 2008 Half-Yearly Report. The major realisation in the second half of the year was Electra's investment in Freightliner, which was sold to Arcapita and resulted in proceeds to Electra of £85 million. These sales were very satisfactory conclusions to investments which had been held for some time. Full details of the investment activity are set out in the Manager's Review from Electra Partners.

The Board and Committees of the Board

Following the retirement of Lord King of Bridgwater and Professor Sir George Bain from the Board at the last Annual General Meeting, the Board now comprises six Directors. At the forthcoming Annual General Meeting Ron Armstrong, Peter Williams and I will retire and seek re-election.

Towards the end of the year the Board decided to combine the separately established Remuneration and Nomination Committees into one committee which is chaired by Peter Williams. Further details of this Committee and the Valuations Committee, chaired by Michael Walton, are given elsewhere in this Report.

Further Authority to Buy Back Shares

Your Board continues to pursue an active share buy-back policy and during the year ended 30 September 2008, Electra made on-market purchases at a cost of £26 million and cancelled 1.66 million shares. The Company currently has the ability to buy back and cancel up to a further 4.2 million shares during the remaining period of this authority, which will cease at the Annual General Meeting when Directors will seek to renew this general authority.

Dividend

I would like to remind shareholders that the Company will only pay a dividend when required to do so in order to maintain its investment trust status. Accordingly, no dividend is proposed for the year (year ended 30 September 2007 - 25p per share).

Outlook

Your Board believes that Electra is positioned to make good investments assisted by:

• a strong cash position;

• flexibility with regard to type of investment: including minority holdings and mezzanine investments; and

• our Manager's reputation as a mid-market buy-out player as deals in the larger buy-out category become harder to finance.

Relative to the Company's position at the half-year stage, whilst the investment strategy remains the same, the timescales for making and realising investments have lengthened and a cautious approach will continue to be taken towards new investment whilst the economic outlook continues to be uncertain. 

The Board believes that the investment approach adopted by Electra Partners continues to be sound and that it will provide a solid basis for delivering attractive returns from private equity investments over the long term, in particular from the opportunities that may become available as a result of an economic downturn.

Sir Brian Williamson

4 December 2008

Chairman

Portfolio Highlights

Purchases

Year	£m
2004	48
2005	82
2006	131
2007	322
2008	114

Realisations

Year	£m
2004	391
2005	250
2006	257
2007	303
2008	192

Portfolio Performance

Year	%
2004	11
2005	26
2006	43
2007	58
2008	(6)

Investment Portfolio and Net Liquid Resources    

	2008 %	2007 %
Funds	15	12
Listed at Fair Value	15	10
Net Liquid Resources	24	20
Unlisted at Fair Value	46	58

Age Analysis *

Age	2008 %	2007 %
Over 3 years	14	6
Less than 1 year	18	66
1 - 2 years	51	21
2 - 3 years	17	7

* excluding listed investments

Geographic Split

Country	2008 %	2007 %
USA	11	14
Asia	16	8
UK and Europe	73	78

The Portfolio

Electra's portfolio consists of holdings of securities in a number of companies (the 'investment portfolio') together with cash or near cash offset by borrowings ('net liquid resources'). The investment portfolio consists primarily of direct investments in portfolio companies together with investments in funds where investments are held in limited partnerships managed by other private equity managers. Investments in funds are made primarily for the purpose of generating co-investment opportunities and gaining exposure to other geographic areas.

As at 30 September	2008 £m	2007 £m
Investment Portfolio *
Direct investments	403	525
Funds	102	95
	505	620
Net Liquid Resources	159	156
Investment Portfolio and Net Liquid Resources	664	776

* Excludes accrued income on the investment portfolio 2008: £9,034,000 (2007: £13,419,000).

At 30 September 2008 Electra had direct investments in 66 companies with an aggregate value of £403 million and investments in 32 private equity funds with an aggregate value of £102 million. The top 10 and 20 direct investments accounted for 61% and 88% respectively of the total direct investments.

Excluding investments in funds, approximately 40% of the value of the investment portfolio was derived from UK operations, 33% from Continental Europe, 11% from the USA and 16% from Asia and elsewhere.

Investment Portfolio Analysis 

In the year to 30 September 2008, Electra's net asset value per share fell from 2,001p per share at the beginning of the period to 1,801p per share at 30 September 2008, a decline of 10%. 

Electra's performance in terms of net asset value movement must be viewed against the background of falling stock markets and other negative factors. In the year under review, the FTSE All-Share Index fell by more than 25% and significant problems emerged in the financial system which affected many banks and other institutions. Considering these circumstances Electra's performance was relatively good. This performance resulted from the fact that the significant reductions in value recognised in respect of the retained portfolio were substantially offset by gains either realised on the sale of investments or recognised in relation to specific events. The reduction in value of the retained portfolio mainly reflected lower multiples of comparable companies quoted on a recognised stock exchange.

Apart from the reduction in value of investments retained at the end of the year, the turbulent conditions in the financial markets impacted other aspects of Electra's investment activities. These effects primarily related to the rate of new investment and the rate of realisations. New investment fell significantly from the previous year with £114 million invested compared to £322 million, and the number of realisations fell sharply with only two realisations being completed in the year compared to 11 in 2007.

Year ended 30 September	2008 £m	2007 £m	2006 £m
Opening portfolio	620	380	353
Investments	114	322	131
Realisations	(192)	(303)	(257)
Net capital (decrease)/increase	(37)	221	153
Closing portfolio *	505	620	380

* Excludes accrued income on the investment portfolio. 2008: £9,034,000 (2007: £13,419,000, 2006: £5,874,000).

Prospects

The crises in the financial markets which have prevailed throughout the past year have made it a difficult period in which to make tangible progress. As previously mentioned, the level of additions to and realisations from the investment portfolio has reduced significantly as a result of the uncertainties of the past year, so that changes to the composition of the portfolio have been well below those experienced in recent years. However, the underlying trading performance of the retained portfolio has continued to be sound, with many individual investments performing both ahead of the previous year and in line with or above budget for the current year. This augurs well for future value creation when markets return to more stable conditions. A key part of our present strategy is, therefore, to protect the existing portfolio from the current financial turbulence in order to ensure that these value creating opportunities are maximised when conditions improve.

Looking forward, it is likely that current market conditions will give rise to exceptional buying opportunities as potential vendors seek to raise cash to overcome the difficulties caused by the reductions in available credit. With a high level of liquid resources, Electra is in a good position to take advantage of these opportunities which will be taken to augment the existing portfolio and further enhance value growth in the future.

Investment Portfolio Review

Investments

In the year to 30 September 2008 investments totalled £114 million compared to £322 million in the previous year. This significant fall in investment rate reflected the change in conditions in the private equity market which prevailed throughout the year. Deal flow has remained strong and Electra has continued to bid on a variety of potential transactions at pricing levels considered to be realistic given the change in market conditions. In almost every transaction however, there were one or two offers at much higher levels with the result that only one new unlisted investment was added to the portfolio during the year. We continue to believe that current conditions demand the exercise of caution in acquiring new investments. Going forward we believe that prices will eventually adjust to more appropriate levels reflecting the uncertainties in future profitability and the reduced availability of lending from the banking sector.

Company	Activity	Cost £m
New Investment
Labco	Medical diagnostics	24
London & Stamford Property	Property investment	20
Funds	MBO investments	46
Other Investments	Various	24
		114

The investment of £114 million included £68 million in direct investments and £46 million drawn down under commitments to third party funds. The most significant direct investments included £24 million in Labco and £20 million in London & Stamford Property. In addition to these investments, and in accordance with the policy to support the existing portfolio, Electra invested a further £7.9 million in SAV Credit to facilitate the purchase of the Marbles credit card portfolio from HSBC and invested a further £7.5 million in Baxi as part of a £40 million additional financing for the company.

Labco is one of the top three participants in the European medical diagnostics market and the leading company in the €7 billion clinical laboratory blood testing market. With the largest network of private clinical laboratories in Europe, the group has some 3,000 employees and over 200 biologists in 153 laboratories. The investment made by Electra to support a significant refinancing of Labco is thought to be attractive in view of the fact that healthcare spending is not directly related to consumer/GDP growth and the company has many further consolidation opportunities. London & Stamford Property is an AIM listed company set up to take advantage of opportunities in the property investment market. Electra invested £20 million as part of a £285 million capital raising to back a management team who on two previous investments have made excellent returns for Electra.

In another transaction, Forthpanel acquired an equity interest in Promontoria in exchange for all its existing properties. In this complex transaction Electra disposed of its interests in Deutsche Woolworth and Forthpanel acquired an equity investment in Promontoria with an initial value of £26 million. Promontoria itself acquired 110 freehold properties for a total consideration of €385 million, all of which were leased to Deutsche Woolworth at a yield in excess of 10%. Since the deal was completed the underlying operations of Deutsche Woolworth have been significantly restructured. In the event that this restructuring is successful, Promontoria will benefit from an option under which it can acquire 75% of Deutsche Woolworth for a nominal consideration.

Realisations

The total proceeds realised from the investment portfolio during the year amounted to £192 million. This compares to a valuation of the investment portfolio at the beginning of the year of £620 million. The proceeds thus represented some 31% of the opening value of the investment portfolio. While the proceeds were well down on the previous year it still represented a more than satisfactory result in view of the financial crisis which persisted throughout the financial year. Realisations in the private equity market have generally been at a much reduced level primarily as a result of the lack of availability of adequate bank finance.

Largest Investment Realisations

Company	Valuation at 30 September 2007 £m	Proceeds from Disposal £m
Freightliner	10	85
Dakota, Minnesota & Eastern Railroad	35	36
Vasanta (Kingfield Heath) *	21	22
	66	143

* Valuation and proceeds in respect of partial disposal

The most significant realisation during the year was that of Freightliner which was sold in July 2008 for an amount which gave rise to proceeds to Electra of £85 million. Electra originally invested £2.5 million in the management buy-out of Freightliner in May 1996, a transaction which involved total financing of £22 million. At the time of purchase Freightliner had a turnover of £90 million and was making pre-tax losses of £22 million. Following purchase the company greatly improved service reliability, expanded into heavy load, changed the delivery systems and developed internationally. By 2007 turnover had increased to £244 million and the company was recording an EBITDA in excess of £31 million. Additionally in the 12 years of ownership, the company invested circa £350 million in new equipment. These developments enabled Freightliner to be sold to Arcapita for a debt free price in excess of £250 million.

In October 2007 Electra also completed the sale of the investment in the Dakota, Minnesota & Eastern Railroad ('DM&E'), receiving proceeds of £36 million. This sale was largely anticipated in the 2007 financial year so that the uplift in the current year was minimal. The sale of DM&E represented an excellent result for an investment held for a period in excess of 20 years. The further contingent consideration now seems unlikely as the Powder River Basin project has been postponed in view of the crisis in the US financial markets.

Other disposals included partial realisations of Vasanta, previously called Kingfield Heath, (£21.5 million) and Nuaire (£12 million) which were sold to institutional investors in Electra Partners Club 2007. Realisations from private equity funds amounted to £13 million, a significant reduction from the previous year when such proceeds amounted to £49 million.

Performance

Over the year to 30 September 2008 the investment portfolio declined in value by £37 million or 6%. The performance was made up of two elements, firstly gains realised on the sale of investments and secondly the changes in value of the investments retained at the end of the year. Realised gains for the year, including the increase in value of Forthpanel, amounted to £97 million while the net reduction in value of the investment portfolio remaining at 30 September 2008 amounted to £134 million, a reduction in the investments of 26%. This compared to the decline in the FTSE All-Share Index over the period of 25%. Of the decline in value of the portfolio, £39 million was due to a reduction in listed prices, where investments had a market listing, and the balance of £95 million related to a decline in the value of the unlisted portfolio. Only one unlisted investment, Allflex, was written up during the year in view of continued good progress, while most of the remaining investments were written down primarily to reflect the fall in multiples of comparable companies.

Largest Valuation Changes

Company	Valuation at 30 September 2008	Valuation Decrease
	£m	£m	%
Premier Asset Management	10	(22)	(68)
Moser Baer	13	(15)	(54)
Baxi	11	(12)	(77)
Vasanta (Kingfield Heath)	29	(11)	(18)

Electra Partners LLP

4 December 2008

Report of the Directors

To the Members of Electra Private Equity PLC

The Directors present the audited Accounts of the Group for the year ended 30 September 2008 and their Report on its affairs.

Investment Trust Status

The Company carries on business as an investment trust. HM Revenue and Customs has approved the Company as an investment trust under Section 842 of the Income and Corporation Taxes Act 1988 for the accounting period to 30 September 2007. In accordance with the self-assessment of Corporation Tax this approval is based upon the computations submitted by the Company and is subject to the findings of any enquiries that HM Revenue and Customs may make. The Directors are of the opinion that since that date the Company has conducted its affairs in a manner which will satisfy the conditions for continued approval as an investment trust under that section.

Business Review

Objective and investment policy

The Objective and Investment Policy of the Company are set out above in this announcement.

Current and future development

A review of the main features of the year is contained in the Chairman's Statement, the Investment Portfolio Analysis and Investment Portfolio Review.

The Board regularly reviews the development and strategic direction of the Company, a process which last culminated in the approval by the Company's shareholders of the new investment strategy in October 2006. The Board believes this investment strategy remains effective in the light of prevailing market conditions. The Board's main focus continues to be on the Company's long-term investment return.

Performance

A detailed review of performance during the year is contained in the Investment Portfolio Analysis and Investment Portfolio Review. 

A number of performance measures are considered by the Board and the Manager in assessing the Company's success in achieving its objectives. 

The key performance indicators ('KPIs') used to measure the progress and performance of the Company are established industry measures and are as follows:

• Return on equity over the long term

• The movement in net asset value per ordinary share

• The movement in share price

Details of the KPIs are shown above in this announcement.    

Risk management

As the Company is focused on investment in private equity assets, Electra Partners aims to limit the risk attaching to the portfolio as a whole by careful selection of investments and by the spread of holdings in terms of age, geographic split and investment portfolio composition in accordance with the Company's Objectives and Investment Policy. The breakdown of the portfolio is shown above in this announcement. 

The principal risks facing the Company include Market Price Risk, Credit Risk, Interest Rate Risk, Liquidity Risk, and Foreign Currency Risk as further detailed in Note 16 of the Notes to the Accounts. 

In addition the Company is also focused on the following risks:

Macroeconomic risks

The performance of the Company's underlying investment portfolio is principally influenced by a combination of economic growth, the availability of appropriately priced debt finance, interest rates and the number of active trade and financial buyers. All of these factors have an impact on the Company's ability to invest and on the Company's ability to exit from its underlying portfolio or on the levels of profitability achieved on exit.

Long-term strategic risk

The Company is subject to the risk that its long-term strategy and its level of performance fails to meet the expectations of its shareholders. The Board monitors the level of discount of the net asset value to share price and considers the most effective methodologies to keep this at a minimum including the share buy-back policy. The Company has, in the last year, repurchased shares within parameters set by the Board and subject to shareholder authority.

In addition the Board regularly reviews the Objectives and Investment Policy in light of prevailing investor sentiment to ensure the Company remains attractive to its shareholders. 

Government policy and regulation risk

The Company carries on business as an investment trust under section 842 of the Income and Corporation Taxes Act 1988. Continuation of approval by HM Revenue and Customs is subject to the Company conducting its affairs in a manner which will satisfy the conditions for continual approval as an investment trust. Anticipated and actual changes in government policy and treatment of investment trusts are closely monitored, as are other changes which could affect the Company's business or financial position.

Electra Partners is an authorised person under the Financial Services and Markets Act 2000 and regulated by the FSA. Changes to the regulatory framework under which Electra Partners operates are closely monitored by Electra Partners and reported upon as necessary by Electra Partners to the Board. 

Investment risks

The Company operates in a very competitive market. Changes in the number of market participants, the availability of funds within the market, the pricing of assets, or in the ability of Electra Partners to access deals could have a significant effect on the Company's competitive position and on the sustainability of returns.

In order to source and execute good quality investments the Company is primarily dependent on Electra Partners having the ability to attract and retain executives with the requisite investment experience and whose compensation is in line with the Company's objectives.

Once invested, the performance of the Company's portfolio is dependent upon a range of factors. These include but are not limited to (i) the quality of the initial investment decision; (ii) the ability of the portfolio company to execute successfully its business strategy; and (iii) actual outcomes against the key assumptions underlying the portfolio company's financial projections. Any one of these factors could have an impact on the valuation of a portfolio company and upon the Company's ability to make a profitable exit from the investment within the desired timeframe.

A rigorous process is put in place by Electra Partners for managing the relationship with each investee company. This includes regular asset reviews and, in many cases, board representation by one of Electra Partners' executives.

The Board reviews both the performance of Electra Partners and its incentive arrangements on a regular basis to ensure that both are appropriate to the objectives of the Company.

Operational risk

The Company's investment management, custody of assets and all administrative systems are provided or arranged for the Company by Electra Partners. Therefore the Company is exposed to a range of operational risks at Electra Partners which might arise from inadequate or failed processes, people and systems or from external factors affecting these. These include operational events such as human resources risks, legal and regulatory risks, information technology systems failures, business disruption and shortcomings in internal controls. 

The Company's system of internal control mainly comprises the monitoring of the services provided by Electra Partners, including the operating controls established by them to ensure they meet the Company's business objectives, as further detailed in the Corporate Governance Statement.

Management Arrangements

EP Private Equity Limited, a subsidiary of Electra Partners Group Limited, was the Manager of the Company from 

1-11 October 2006. On 12 October 2006 Electra Partners was appointed as the Manager following shareholders' approval of new management arrangements. The new management agreement dated 12 October 2006 runs for an initial three year period with a 12 month rolling notice period. Neither party may serve notice to terminate during the first two years of the agreement. Electra may terminate the new management agreement on 12 months' notice, expiring at any time after the initial two year period. After three years, it has the right to terminate on a shorter notice period. Whatever notice period is worked, Electra Partners will be entitled to receive additional compensation equivalent to 12 months' priority profit share (determined by reference to the previous 12 months' priority profit share).

Electra Partners may also terminate the new management agreement on 12 months' notice, after the initial two year period. If Electra Partners terminates the new management agreement at any time after the initial three year period, Electra may pay compensation in lieu of any part of the notice period but Electra Partners is not entitled to any additional compensation. 

Electra Partners receives a priority profit share of 1.5% on the gross value of the Company's investment portfolio including cash (but excluding any amounts committed to funds established and managed by Electra Partners).

During the year the Company continued to operate carried interest and co-investment schemes for executives of Electra Partners and details of these schemes are contained in Note 21 of the Notes to the Accounts. 

As detailed in the Corporate Governance Statement, the Board reviews the activities of Electra Partners on an ongoing basis and believes the continuing appointment of Electra Partners on the terms agreed is in the interests of shareholders as a whole. 

Electra Partners is responsible for the investment management of a number of limited partnership funds to which the Company has subscribed. Electra Partners manages the Company's investments in accordance with guidelines determined by Directors and as specified in limited partnership and in management and investment guideline agreements. 

Socially Responsible Investment

Electra believes that high standards of corporate social responsibility ('CSR') make good business sense and have the potential to protect and enhance investment returns. Consequently, the investment process takes social, environmental and ethical issues into account when, in Electra Partners' view, these have a material impact on either investment risk or return.

Electra recognises and supports the view that social, environmental and ethical best practice should be encouraged. It favours investing in companies committed to high standards of CSR and to the principles of sustainable development.

Electra Partners does not screen out companies from its investment universe purely on the grounds of poor social, environmental or ethical performance. Instead, it adopts a positive engagement approach whereby, if it is appropriate, it discusses these issues with the management of the companies in which it invests. The information gathered during these meetings is used both to assist Electra Partners' investment decisions and also to encourage investee company management to improve procedures and attitudes. Electra Partners strongly believes that this is the most effective way to improve the CSR policies of the businesses in which it invests and the Board endorses this view. 

Results 

A revenue loss attributable to shareholders of £5.058 million (2007: profit of £9.279 million) was transferred to Revenue Reserves. No dividend is proposed in respect of the year ended 30 September 2008 (year ended 30 September 2007 - 25p per share).

Authority to Make Market Purchases of Shares

As at 30 September 2008, the Company had authority to purchase for cancellation up to a further 4,485,693 shares. This authority will lapse at the 2009 Annual General Meeting when a Special Resolution will be proposed to renew the Company's authority to make market purchases of its own shares. 

During the year the Company made the following purchases of its own shares in the market under authority granted by shareholders at a total cost of £26.492 million:

			% of Issued Capital
Shares Purchased for Cancellation		Date of Purchase	at Date of Purchase	Price per share
50,000		23 November 2007	0.13%	1,638p
100,000		27 November 2007	0.27%	1,608p
60,000		27 November 2007	0.16%	1,608p
200,000		5 December 2007	0.54%	1,640p
92,000		6 December 2007	0.25%	1,640p
55,000		14 December 2007	0.15%	1,595p
100,000		22 January 2008	0.27%	1,550p
1,000,000		17 March 2008	2.73%	1,570p

The Company does not hold any shares in treasury.

Multi-Currency Loan Facility

At 30 September 2008 borrowings under the £250 million (2007: £250 million) multi-currency facility amounted to £158,870,000 (2007: £160,699,000).

Directors

The current Directors of the Company are listed below in this announcement. Sir Brian Williamson, Mr RA Armstrong, Ms C Bowe, Mr MED'A Walton, Ms L Webber and Mr JP Williams served as Directors throughout the year ended 30 September 2008. Professor Sir George Bain and Lord King of Bridgwater both retired as Directors at the Annual General Meeting held on 6 February 2008. No other person was a Director of the Company during any part of the year. In accordance with either the Company's Articles of Association or the Combined Code on Corporate Governance (2006), Mr RA Armstrong, Mr JP Williams and Sir Brian Williamson will all retire at the Annual General Meeting in 2009 and, being eligible, offer themselves for re-election. 

Directors' Interests

The interests of the Directors (including connected persons) in the ordinary shares of the Company are shown below. Save as disclosed, no Director had any notifiable interest in the securities of the Company or of any subsidiary of the Company. There have been no changes in the interests of any of the Directors in the ordinary shares of the Company between 1 October 2008 and 4 December 2008.

	30 September 2008 Shares	1 October 2007 Shares
Sir Brian Williamson	-	30,000
RA Armstrong	23,723	23,723
C Bowe	1,129	1,129
MED'A Walton	16,016	54,979
L Webber	1,500	1,500
JP Williams	10,000	10,000

Substantial Interests

The Company has received the following notifications of interests of 3% or more in the voting rights attached to the Company's ordinary shares:

	Date of Notification	Voting Rights Notified		Percentage of Voting Rights*
		Direct	Indirect	Direct	Indirect
		No		%	%
Rensburg Sheppards Investment Management Limited	6.03.07	-	1,780,564	-	5.04
Legal & General Group PLC	5.10.07	1,503,723	-	4.26	-
Bear, Stearns International Trading Limited	18.12.07	1,441,394	-	4.08	-
Prudential Plc group of companies	25.01.08	2,580,081	-	7.30	-
Asset Value Investors Limited as discretionary manager	19.09.08	2,574,683	-	7.29	-
British Empire Securities and General Trust PLC	9.10.08	1,440,112	-	4.08	-
HBOS plc	20.10.08	67,208	1,633,324	0.19	4.62

* Percentage shown as a percentage of 35,338,687 ordinary shares, being the number of shares in issue at the latest practicable date before the publication of this Directors' Report.

Charitable and Political Donations

During the year the Group made no charitable or political donations (2007: £nil). 

Audit Information

Each of the Directors confirms that so far as they are aware, there is no relevant audit information of which the Company's Auditors are unaware and they have taken all steps they ought to have taken to make themselves aware of any relevant audit information and to establish that the Company's Auditors are aware of that information. 

Auditors

A resolution to re-appoint PricewaterhouseCoopers LLP as Auditors to the Company will be proposed at the Annual General Meeting. A separate resolution will be proposed at the Annual General Meeting authorising the Directors to determine the remuneration of the Auditors.

Additional Information for Shareholders 

Set out below is a summary of certain provisions of the Company's current Articles of Association (as adopted by special resolution on 1 March 2000 and amended by special resolution on 6 February 2008 (the 'Articles')) and applicable English law concerning companies (the Companies Act 1985 and the Companies Act 2006, together the 'Companies Acts'). This is a summary only and the relevant provisions of the Articles or the Companies Acts should be consulted if further information is required. 

Share capital

The Company has a single class of share capital which is divided into ordinary shares of 25 pence each. The shares are in registered form.

Dividends and distributions

Subject to the provisions of the Companies Acts, the Company may by ordinary resolution from time to time declare dividends not exceeding the amount recommended by the Board. The Board may pay interim dividends whenever the financial position of the Company, in the opinion of the Board, justifies such payment. 

The Board may withhold payment of all or any part of any dividends or other monies payable in respect of the Company's shares from a person with a 0.25% interest (as defined in the Articles) if such a person has been served with a notice after failure to provide the Company with information concerning interest in those shares required to be provided under the Companies Acts.

Voting rights

Subject to any special rights or restrictions attaching to any class of shares, at a general meeting or class meeting, every member present in person and every duly appointed proxy has, upon a show of hands, one vote and on a poll every member who is present in person or by proxy has one vote for every complete 25p in nominal amount of the shares of which he is the holder. In the case of joint holders of a share the vote of the senior who tenders a vote whether in person or by proxy shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be determined by the order in which the names stand in the Register of Members in respect of the shares. Under the Companies Acts members are entitled to appoint a proxy, who need not be a member of the Company, to exercise all or any of their rights to attend and to speak and vote on their behalf at a general meeting or class meeting. A member may appoint more than one proxy in relation to a general meeting or class meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that member. A member that is a corporation may appoint one or more individuals to act on its behalf at a general meeting or class meetings as a corporate representative. The person or any one of such persons so authorised shall be entitled to exercise the same powers on behalf of such corporation as the corporation could exercise if it were an individual member of the Company. 

Restrictions on voting

No member shall be entitled to vote either in person or by proxy at any general meeting or class meeting in respect of any shares held by him if any call or other sum then payable by him in respect of that share remains unpaid. In addition no member shall be entitled to vote if he has been served with a notice after failure to provide the Company with information concerning interests in those shares required to be provided under the Companies Acts.

Deadlines for exercising voting rights

Votes are exercisable at a general meeting of the Company in respect of which the business being voted upon is being heard. Votes may be exercised in person, by proxy, or in relation to corporate members, by corporate representative. The Articles provide a deadline for submission of proxy forms of not than less than 48 hours before the time appointed for the holding of the meeting or adjourned meeting. 

Variation of rights

Subject to statute, the Articles specify that rights attached to any class of shares may be varied with the written consent of the holders of not less than three-fourths in nominal value of the issued shares of that class, or with the sanction of an extraordinary resolution passed at a separate general meeting of the holders of those shares. At every such separate general meeting the quorum shall be two persons holding or representing by proxy at least one-third in nominal value of the issued shares of the class (calculated excluding any shares held as treasury shares). The rights conferred upon the holders of any shares shall not, unless otherwise expressly provided in the rights attaching to those shares, be deemed to be varied by the creation or issue of further shares ranking pari passu with them.

Transfer of shares

All transfers of shares may be effected by transfer in writing in any usual or common form or in any other form acceptable to the Directors. The instrument of transfer shall be signed by or on behalf of the transferor and (except in the case of fully-paid shares) by or on behalf of the transferee. The transferor shall remain the holder of the shares concerned until the name of the transferee is entered in the Register of Members of the Company. The Directors may, at any time after the allotment of any share, but before any person has been entered in the Register of Members as the holder, recognise a renunciation by the allottee in favour of some other person and may accord to any allottee of a share a right to effect such renunciation upon and subject to such terms and conditions as the Directors may think fit to impose. Transfers of shares which are in uncertificated form are effected by means of the CREST system. 

The Directors may, in the case of shares in certificated form, in their absolute discretion and without assigning any reason, refuse to register any transfer of shares (not being fully paid shares) provided that such discretion may not be exercised in such a way as to prevent dealings in the shares of that class from taking place on an open and proper basis.

The Directors may also refuse to register an allotment or transfer of shares (whether fully-paid or not) in favour of more than four persons jointly. If the Directors refuse to register an allotment or transfer they shall within two months after the date on which the letter of allotment or transfer was lodged with the Company send to the allottee or transferee a notice of the refusal. 

The Directors may decline to recognise any instrument of transfer unless the instrument of transfer is in respect of only one class of share and when submitted for registration is accompanied by the relevant share certificates and such other evidence as the Directors may reasonably require.

Subject to statutes and applicable CREST rules, the Directors may determine that any class of shares may be held in uncertificated form and that title to such shares may be transferred by means of the CREST system or that shares of any class should cease to be so held and transferred.

A shareholder does not need to obtain the approval of the Company, or of other shareholders of shares in the Company, for a transfer of shares to take place. 

Appointment and replacement of Directors

Directors shall be no less than three and no more than fifteen in number. A Director is not required to hold any shares of the Company by way of qualification. The Company may by ordinary resolution increase or reduce the maximum or minimum number of Directors. 

At each Annual General Meeting, any Director who was elected or last re-elected a Director at or before the Annual General Meeting held in the third calendar year before the current calendar year shall retire by rotation and such further Directors (if any) shall retire by rotation as would bring the number retiring by rotation up to one-third of the number of Directors in office at the date of the notice of the meeting (if their number is not a multiple of three, the number shall be the number nearest to but not greater than one-third). The Directors to retire by rotation shall include any Director who wishes to retire and not offer himself for re-election. The additional Directors to retire shall be those who have been longest in office since their last re-election or in the case of those who were appointed or re-elected on the same date, shall be determined by lot. A retiring Director is eligible for re-election. 

The Board may appoint any person to be a Director (so long as the total number of Directors does not exceed the limit prescribed in the Articles). Any such Director shall hold office only until the next Annual General Meeting and shall then be eligible for re-election, but shall not be taken into account in determining the number of Directors who are to retire by rotation at such meeting.

The office of Director shall be vacated if: 

(i) he resigns in writing or offers to resign in writing and the Board resolves to accept such offer; 

(ii) he becomes bankrupt or compounds with his creditors generally; 

(iii) he is prohibited by law from being a Director; 

(iv) he is absent without permission of the Board from meetings of the Board for six consecutive months and the Board resolves that the office is vacated; or 

(v) notice is served upon him in writing by all his co-Directors.

Powers of the Directors 

Subject to the Articles, the Companies Acts and any directions given by special resolution, the business of the Company will be managed by the Board who may exercise all the powers of the Company. 

The Board may exercise all the powers of the Company to borrow money and to mortgage or charge any of its undertakings, property and uncalled capital and to issue debentures and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party. The aggregate amount remaining undischarged of all money borrowed by the Company or its subsidiaries may not, without the prior sanction of an ordinary resolution, exceed the aggregate of (i) the amount paid up or credited as paid up on the share capital of the Company or (ii) the total of the capital and revenue reserves of the Company and its subsidiaries, subject to certain adjustments.

The Company may by ordinary resolution declare dividends but no dividend shall be payable in excess of the amount recommended by the Directors. Subject to the provisions of the Articles and to the rights attaching to any shares, any dividends or other monies payable on or in respect of a share may be paid in such currency as the Directors may determine. The Directors may deduct from any dividend payable to any member all sums of money (if any) presently payable by him to the Company on account of calls or otherwise in relation to shares of the Company. The Directors may retain any dividends payable on shares on which the Company has a lien, and may apply the same in or towards satisfaction of the debts, liabilities or engagements in respect of which the lien exists. 

Amendment of Articles of Association

Any amendments to the Articles of the Company may be made in accordance with the provisions of the Companies Acts by way of special resolution. 

Significant agreements: Change of control

If there is a no fault termination by the Company of the Management Agreement dated 12 October 2006 (between the Company and Electra Partners) within 24 months of a change of effective control of the Company, 100% of the carried interest which has accrued as at the date of termination will be payable to the members of Electra Partners over three years and any future additional carry on existing investments will vest at 80% and will be paid on the realisation of investments when it becomes due in the ordinary course. 

Directors' Conflicts of Interest

At the Annual General Meeting of the Company held in February 2008, shareholders approved the adoption of new Articles of Association conferring power on the Directors to authorise matters which would or might otherwise constitute or give rise to a breach of a Director's duty under the Companies Act 2006 in respect of Directors' Conflicts of Interest.

To date the Board has met once to consider conflicts of interest when it was agreed that none of the Directors had an actual conflict of interest.

At the same Board Meeting it was further agreed that the Remuneration and Nomination Committee would in future be responsible for considering and reviewing conflicts of interest and that any Director or Directors with a potential conflict would be excluded from such a review. After consideration, if required, the Remuneration and Nomination Committee would subsequently make a recommendation to the Board of Directors. The terms of reference of the Remuneration and Nomination Committee have been amended accordingly.

Creditor Payment Policy

The Company agrees the terms of payment with its suppliers when agreeing the terms of each agreement. Suppliers are aware of the terms of payment and the Company abides by the terms of payment. At 30 September 2008 the Company had no outstanding Trade Creditors (2007: nil).

Going Concern

The Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the Accounts as the Company has adequate resources to continue in operational existence for the foreseeable future.

Annual General Meeting

The Annual General Meeting will be held on Tuesday 3 February 2009. In addition to the ordinary business the following special business will be considered:

Authority to purchase own shares (Resolution 8)

A special resolution will be proposed to renew the Board's authority to purchase its own shares, so as to permit the purchase of up to 5,297,269 of the Company's ordinary shares (or such lesser number of shares as is equal to 14.99% of the total number of ordinary shares in issue at the date of the passing of the resolution) subject to the constraints set out in the special resolution. The Directors would intend to use this authority to purchase shares only if this would result in an increase in net asset value per share and would be in the best interests of shareholders generally. Should any shares be purchased under this authority, it is the intention of the Board that such shares be cancelled.

The Directors believe that the renewal of the Board's authority to purchase shares, as detailed above, is consistent with the changes approved at the Extraordinary General Meeting held on 12 October 2006 and is in the best interests of shareholders as a whole. The Directors therefore recommend shareholders to vote in favour of Resolution 8.

By order of the Board of Directors

PJ Dyke, Secretary, Paternoster House

65 St Paul's Churchyard, London EC4M 8AB

4 December 2008

Directors' Remuneration Report

The Directors submit this report in accordance with the requirements of Schedule 7A to the Companies Act 1985. An Ordinary Resolution for the approval of this report will be put to members at the forthcoming Annual General Meeting. 

The law requires the Company's Auditors to audit certain of the disclosures provided. Where disclosures have been audited they are indicated as such.

Remuneration and Nomination Committee

The Remuneration Committee which existed until 30 July 2008 comprised all the Directors of the Company other than the Chairman and was chaired by Mr JP Williams.  

The Remuneration and Nomination Committee which was formed on 31 July 2008 incorporates the duties of the former Remuneration Committee and Nomination Committee and comprises all of the Directors of the Company and is chaired by Mr JP Williams. The Board considers that creating a combined Committee is a natural and efficient way to deal with the recruitment and remuneration of the Company's Directors.

The Remuneration Committee met once during the year to consider the Directors' remuneration and in the context of the increased workload imposed by the Company's new investment strategy and an increased level of Board, Committee and informal meetings of Directors it has decided to restructure the Directors' remuneration. The basic Directors fee for each Director is now £35,000 per annum with an additional fee of £115,000 per annum for the Chairman of the Company. An additional fee of £6,000 per annum is payable to the Chairman of the Audit, the Valuations and the Remuneration and Nomination Committees. Separate additional fees of £3,000 per annum are payable to the non-Chairman members of the Valuations Committee.

There were no meetings of the new Remuneration and Nomination Committee in the period to 30 September 2008. 

Policy on Directors' Remuneration

The policy of the Remuneration and Nomination Committee is that remuneration of non-executive Directors should be fair and sufficient to attract Directors to properly oversee the affairs of the Company and should reflect the specific circumstances of the Company, the duties and responsibilities of the Directors and the value and amount of time committed to the Company's affairs. It is intended that this policy will continue for the year ended 30 September 2009 and subsequent years. Non-executive Directors are not eligible to receive bonuses, pension benefits, share options or other benefits. The Remuneration and Nomination Committee relies mainly on general salary surveys in respect of its consideration of the level of Directors' remuneration. The total remuneration of the Directors is determined by the provisions in the Articles of Association and by shareholders' resolutions.

Directors' Service Contracts

None of the Directors has a service contract with the Company. No arrangements have been entered into between the Company and the Directors to entitle any of the Directors to compensation for loss of office.

Total Shareholder Return

Pursuant to the Directors' Remuneration Report Regulations 2002, the Company is required to show a table of total shareholder return against a suitable benchmark index in its Directors' Remuneration Report.

The table below compares the Company's total shareholder return over the five financial years to 30 September 2008 with the FTSE All-Share Index. The Directors consider that, since the Company invests in a broad range of commercial sectors, the FTSE All-Share Index was the most appropriate index against which to compare the Company's performance for these five years.

Electra Private Equity Total Shareholder Return versus FTSE All-Share Index 

Date	Electra's Total Shareholder Return	FTSE All-Share Index
30-Sep-04	100.00	100.00
30-Sep-05	125.25	114.86
30-Sep-06	175.69	145.68
30-Sep-07	219.83	183.16
30-Sep-08	272.24	202.23

Directors' Remuneration for the Year (audited)

The Directors who served during the year received the following emoluments in the form of salary and fees: 

	30 September 2008 £000	30 September 2007 £000
Sir Brian Williamson (Chairman and highest paid Director)	150.0	150.0
RA Armstrong	30.6	28.5
Professor Sir George Bain	9.9	28.5
C Bowe	30.1	16.6
Lord King of Bridgwater	9.9	28.5
MED'A Walton	38.9	38.5
L Webber	30.1	16.6
JP Williams	30.6	28.5
Total	330.1	335.7

JP Williams, Chairman of the Remuneration and Nomination Committee

Paternoster House

65 St Paul's Churchyard, London EC4M 8AB

4 December 2008 

Corporate Governance

The Directors confirm that during the year under review the Company has complied with Section 1 of the Combined Code on Corporate Governance ('the Code') issued by the Financial Reporting Council in 2006.

The Board of Directors

Following the retirement of Lord King of Bridgwater and Professor Sir George Bain at the Annual General Meeting on 6 February 2008, the Board was comprised of six Directors as at 30 September 2008 all of whom were non-executive. The Board has nominated Mr JP Williams as the Senior Independent Director.

It is the responsibility of the Board to ensure that there is effective stewardship of the Company's affairs. The Board has agreed a schedule of matters reserved for its specific approval, which includes a regular review of the Company's management agreements with Electra Partners, together with the monitoring of the performance thereunder. The management agreements set out the matters over which Electra Partners has authority in accordance with the policies and directions of the Board. The Board meetings consider, as appropriate, such matters as overall strategy, investment performance, gearing, share price performance, share price discount, the shareholder profile of the Company and communication with shareholders. The Board considers that it meets sufficiently regularly to discharge its duties effectively.

Separate Remuneration and Nomination Committees of the Company existed until 30 July 2008. On 31 July 2008 a combined Remuneration and Nomination Committee was established. 

The number of scheduled meetings of the Board and Committees of the Board held during the year and the attendance of the individual Directors at those meetings is shown in the table below. All the Directors attended the Annual General Meeting. There were no meetings of the new Remuneration and Nomination Committee or the former Nomination Committee during the year.

Directors' Attendance at Scheduled Meetings of the Board and Committees of the Board

		Audit	Remuneration	Valuations
	Board	Committee	Committee	Committee
Number of Meetings	6	4	1	4
Sir Brian Williamson *	6	-	-	-
RA Armstrong †	5	4	1	-
C Bowe	5	4	1	4
MED'A Walton	6	3	1	4
L Webber	6	4	1	4
JP Williams †	6	3	1	-

* Sir Brian Williamson was not a member of the Audit, Remuneration or Valuations Committees.

† Mr RA Armstrong and Mr JP Williams were not members of the Valuations Committees.

The Board receives information that it considers to be sufficient and appropriate to enable it to discharge its duties. Directors receive board papers several days in advance of board meetings and are able to consider in detail the Company's performance and any issues to be discussed at the relevant meeting.

The Directors believe that the Board has the balance of skills and experience which enables it to provide effective strategic leadership and proper governance of the Company. Information about the Directors, including their relevant experience can be found below in this announcement.

Independence of the Board

Sir Brian Williamson, Mr RA Armstrong and Mr JP Williams have served on the Board for more than nine years. The Board has carefully considered the independence of each Director under the provisions of the Code and has concluded that each Director is wholly independent on the basis that the Board firmly believes that independence is a state of mind and the character and judgement which accompany this are distinct from and are not compromised by length of service. The Directors (including the Chairman) who have been in office for more than nine years will submit themselves for annual re-election.

The Board carried out a formal appraisal process of its own operations and that of its Committees and its and their performances during the year. This was implemented by means of questionnaires circulated to the Directors, the results of which were then reviewed by the Board. Issues covered included Board composition, meeting arrangements and communication. The process was considered by the Board to be constructive in identifying areas for improving the functioning and performance of the Board and of its Committees. The Board concluded that its performance and that of its Committees was satisfactory.

The Chairman carried out a formal appraisal of each of the Directors during the year and the Board, under the leadership of the Senior Independent Director, similarly appraised the Chairman. Relevant matters considered included the attendance and participation at Board and Committee meetings, commitment to Board activities and the effectiveness of the contribution made by the relevant Director. As a result of this process, the Chairman has confirmed that the performance of each of the Directors being proposed for re-election continues to be effective and that each of them continues to show commitment to his role. The Senior Independent Director has also confirmed the continuing effectiveness and commitment of the Chairman.

Re-election of Directors 

In accordance with the Code's provisions and or the Company's Articles, each of Sir Brian Williamson, 

Mr RA Armstrong and Mr JP Williams will retire at the Annual General Meeting to be held in 2009 and each offers himself for re-election.

Independent Professional Advice

Individual Directors may seek independent professional advice in furtherance of their duties at the Company's expense within certain parameters. All Directors have access to the advice and services of the Company Secretary.

The Audit Committee

The Board has an Audit Committee established in compliance with the Code. It comprises all the Directors, other than the Chairman of the Board with Mr RA Armstrong as Chairman of the Committee. The Board has taken note of the suggestion that at least one member of the Committee should have recent and relevant financial experience and is satisfied that the Committee is properly constituted in this respect. Its authority and duties are clearly defined in its written terms of reference which are available on the Company's website.

The Committee's responsibilities include:

•	monitoring and reviewing the integrity of the financial statements, the internal financial controls and the independence, objectivity and effectiveness of the external auditors;
•	making recommendations to the Board in relation to the appointment of the external auditors and approving their remuneration and terms of their engagement;
•	developing and implementing the Company's policy on the provision of non-audit services by the external auditors;
•	reviewing the arrangements in place within Electra Partners whereby their staff may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters insofar as they may affect the Company; and
•	considering annually whether there is a need for the Company to have its own internal audit function.

The Committee has reviewed the provision of non-audit services and believes them to be cost effective and not an impediment to the external auditors' objectivity and independence. The non-audit services include the provision of taxation advice. It has been agreed that all non-audit work to be carried out by the external auditors must be approved by the Audit Committee and that any special projects must be approved in advance.

Following the review carried out by the Audit Committee as to whether there is a need for the Company to have its own internal audit function, the Board has considered and continues to believe that the internal control systems in place within Electra Partners and the internal control reports provided by it give sufficient assurance that a sound system of internal control, which safeguards shareholders' investment and the Company's assets, is maintained. An internal audit function, specific to the Company, is therefore considered unnecessary.  

The Remuneration and Nomination Committees and the Combined Remuneration and Nomination Committee 

The Remuneration Committee, which existed until 30 July 2008, comprised all the Directors of the Company other than the Chairman and was chaired by Mr JP Williams.

The Remuneration Committee met once during the period ended 30 July 2008 to consider the Directors' remuneration in the context of the number of Board, Committee and informal meetings of Directors and the results of this review are set out in the Directors' Remuneration Report.

The separate Nomination Committee which existed until 30 July 2008 comprised all the Directors of the Company 

and was chaired by Sir Brian Williamson. No meetings of the Nomination Committee were held in the period ended 30 July 2008.

With effect from 31 July 2008 the Board established a combined Remuneration and Nomination Committee to incorporate the duties of the former Remuneration and Nomination Committees. The new Committee, chaired by 

Mr JP Williams, comprises all non-executive Directors of the Company, the majority of whom will always be independent. There were no meetings of the new Committee in the period to 30 September 2008.  

The combined Remuneration and Nomination Committee duties in relation to remuneration, include determining and agreeing with the Board the policy for the remuneration of the Company's Directors. The Committee's duties in relation to nomination include identifying and nominating for the approval of the Board, candidates to fill Board vacancies to maintain a balanced Board. The Committee has written terms of reference which are available on the Company's website. 

The Valuations Committee

At the beginning of this financial year the Board established a Valuations Committee. The Committee adds a further level of oversight to the valuation process carried out by Electra Partners under its contractual arrangements with the Company. The Valuations Committee is chaired by Mr MED'A Walton and comprises Ms C Bowe and Ms L Webber.

Induction and Training

New Directors are provided with an induction programme which is tailored to the particular circumstances of the appointee and which includes being briefed fully about the Company by the Chairman and senior executives of Electra Partners. Following appointment, Directors continue to receive other relevant training and advice as necessary to enable them to discharge their duties.

The Company's Relationship with its Shareholders

The Company places great importance on communication with the Company's shareholders. The Company, in conjunction with Electra Partners, maintains a regular dialogue with its institutional shareholders and City analysts, with a number of presentations and visits being undertaken throughout the year. Meetings are held with principal shareholders to discuss relevant issues as they arise.

At the Annual General Meeting all shareholders are welcome to attend and have the opportunity to put questions to the Board and hear a presentation from Electra Partners covering the investment performance during the last financial year.

The notice of the Annual General Meeting and related papers are sent to shareholders at least 20 working days before the meeting. A separate resolution is proposed on each substantially separate issue including the annual report and accounts. All proxy votes are counted and except where a poll is called, the level of proxies lodged for each resolution is announced at the Meeting and is published on the Company's website. 

The Chairman and the Senior Independent Director can be contacted either through the Company Secretary or at the Company's registered office at Paternoster House, 65 St Paul's Churchyard, London EC4M 8AB.

Internal Control

The Code requires the Directors to review the effectiveness of the Company's system of internal control and report to shareholders that they have done so. This encompasses a review of all controls including financial, operational and compliance controls and risk management.

The Board confirms that it has an ongoing process for identifying, evaluating and managing the significant risks faced by the Company. This process has been in place throughout the year and has continued since the year end. It is reviewed at regular intervals by the Board and accords with the guidance set out in 'Internal Controls: Revised Guidance for Directors on the Combined Code'.

The Board is responsible for the Company's system of internal control and has reviewed its effectiveness for the year ended 30 September 2008. The system of internal control is designed to manage, rather than eliminate, the risk or failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss.

Since investment management, custody of assets and all administrative services are provided or arranged for the Company by Electra Partners, the Company's system of internal control mainly comprises the monitoring of the services provided by Electra Partners, including the operating controls established by them to ensure they meet the Company's business objectives. The key elements designed to provide effective internal control are as follows:

•	Financial Reporting - regular and comprehensive review by the Board of key investment and financial data, including management accounts, revenue projections, analyses of transactions and performance comparisons.
•	Investment Strategy - agreement by the Board of the Company's Objective and Investment Policy.
•	Management Agreements and Investment Performance - the Board regularly monitors the performance of Electra Partners to ensure that the Company's assets and affairs are managed in accordance with the Company's Objective and Investment Policy.

The Board keeps under review the effectiveness of the Company's system of internal control by monitoring the operation of the key controls of Electra Partners as follows:

•	The Board reviews the terms of the management agreements and receives regular reports from Electra Partners executives.
•	The Board reviews the certificates provided by Electra Partners on a six monthly basis verifying compliance with documented controls.

Voting Policy

Under the investment management arrangements Electra Partners has complete discretion in relation to all voting issues in respect of the Company's investments. Electra Partners' policy has adopted and applies the Statement of Principles drawn up by the Institutional Shareholders Committee when it considers these in its reasonable judgement to best serve the financial interests of the Company's shareholders. Electra Partners policy has been reviewed and endorsed by the Board.

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report, the 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 prepared the group and parent company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial statements are required by law to give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that year.

In preparing those financial statements, the Directors are required to:

•	select suitable accounting policies and then apply them consistently;
•	make judgements and estimates that are reasonable and prudent;
•	state that the financial statements comply with IFRSs as adopted by the European Union;
•	prepare the financial statements on the going concern basis, unless it is inappropriate to presume that the group will continue in business, in which case there should be supporting assumptions or qualifications as necessary.

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the company and the group and to enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 1985 and, as regards the group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Each of the Directors, whose names and functions are listed in the Board of Directors section of the annual report confirm that, to the best of their knowledge:

•	the group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and loss of the group; and
•	the Directors' report contained in the Reports section of the Annual Report includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal risks and uncertainties that it faces.

By order of the Board of Directors

Sir Brian Williamson, Chairman, Paternoster House 

65 St Paul's Churchyard, London EC4M 8AB

4 December 2008

Consolidated Income Statement

							* Restated
	For the year ended  30 September			2008			2007
Note		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
1	Net (loss)/profit on investments held at fair value	26,188	(46,538)	(20,350)	34,420	227,389	261,809
1	(Loss)/Profit on revaluation of foreign currencies	-	(18,384)	(18,384)	-	7,637	7,637
		26,188	(64,922)	(38,734)	34,420	235,026	269,446
3	Other income	2,857	9,556	12,413	2,394	-	2,394
23	Incentive schemes	-	(9,496)	(9,496)	-	(57,306)	(57,306)
4	Priority profit share paid to general partners	(13,435)	-	(13,435)	(12,350)	-	(12,350)
4	Other expenses	(8,381)	-	(8,381)	(2,702)	(5,538)	(8,240)
	Net (Loss)/Profit before Finance Costs and Taxation	7,229	(64,862)	(57,633)	21,762	172,182	193,944
7	Finance costs	(7,921)	-	(7,921)	(8,859)	-	(8,859)
	(Loss)/Profit on Ordinary Activities before Taxation	(692)	(64,862)	(65,554)	12,903	172,182	185,085
8	Taxation Expenses	(4,366)	567	(3,799)	(3,624)	(7,132)	(10,756)
	(Loss)/Profit on Ordinary Activities after Taxation	(5,058)	(64,295)	(69,353)	9,279	165,050	174,329
18	Attributable to Equity Shareholders	(5,058)	(64,295)	(69,353)	9,279	165,050	174,329
11	Basic and Diluted Earnings per Ordinary Share	(13.98)p	(177.69)p	(191.67)p	24.60p	437.49p	462.09p

*See Note 1.

The 'Total' columns of this statement represents the Group's Income Statement prepared in accordance with International Financial Reporting Standards adopted by the EU ('IFRS'). The supplementary Revenue and Capital columns are both prepared under guidance published by the Association of Investment Companies. This is further explained in the Basis of Accounting.

The amounts dealt with in the Consolidated Income Statement are all derived from continuing activities.

	2008	2007
Number of Ordinary Shares in issue at 30 September	35,595,687	37,252,687

	Special Dividends Paid
9	Total paid (£'000)	9,149	6,375
9	Per share	25p	17p

Statement of Changes in Equity

	For the year ended 30 September for the Group	2008	2007
Note		£'000	£'000
18	Total equity at 1 October	745,506	598,292
	(Loss)/Profit after taxation	(69,353)	174,329
18	Foreign currency translation differences	437	1,564
	Total Recognised Income and Expense	676,590	774,185
18	Special dividend to equity shareholders *	(9,149)	(6,375)
18	Purchase of own shares	(26,492)	(22,304)
	Total Equity Shareholders' Funds at 30 September	640,949	745,506

	For the year ended 30 September for the Company	2008	2007
Note		£'000	£'000
18	Total equity at 1 October	744,319	592,364
	(Loss)/Profit after taxation	(54,897)	180,634
	Total Recognised Income and Expense	689,422	772,998
18	Special dividend to equity shareholders *	(9,149)	(6,375)
18	Purchase of own shares	(26,492)	(22,304)
	Total Equity Shareholders' Funds at 30 September	653,781	744,319

*Special dividend paid of 25p (2007: 17p) per share after share buy-backs and cancellation of 50,000 ordinary shares on 23 November 2007, 160,000 ordinary shares on 27 November 2007, 200,000 ordinary shares on 5 December 2007, 92,000 ordinary shares on 6 December 2007, 55,000 ordinary shares on 14 December 2007, 100,000 ordinary shares on 22 January 2008 and 1,000,000 ordinary shares on 17 March 2008 (2007: 1,000,000 ordinary shares on 18 December 2006, 120,000 ordinary shares on 19 December 2006 and 100,000 ordinary shares on 15 January 2007).

Consolidated Balance Sheet

		As at 30 Sept 2008		As at 30 Sept 2007
Note		£'000	£'000	£'000	£'000
	Non-Current Assets
12	Investments held at fair value:
	Unlisted and listed		514,249		633,311
	Floating rate notes		276,467		299,437
			790,716		932,748
	Current Assets
13	Trade and other receivables	3,043		16,189
	Cash and cash equivalents	43,791		16,948
		46,834		33,137
	Current Liabilities
14	Trade and other payables	8,424		19,584
	Net Current Assets		38,410		13,553
	Total Assets less Current Liabilities		829,126		946,301
15	Bank loans		158,870		160,699
			670,256		785,602
22	Deferred tax	12,317		12,701
23	Provision for liabilities and charges	16,990		27,395
	Non-Current Liabilities		29,307		40,096
	Net Assets		640,949		745,506
	Capital and Reserves
17	Called-up share capital		8,899		9,313
18	Share premium	24,147		24,147
18	Capital redemption reserve	34,376		33,962
18	Translation reserve	1,034		597
18	Realised capital profits	834,672		792,960
18	Unrealised capital losses	(274,072)		(141,573)
18	Revenue reserves	11,893		26,100
			632,050		736,193
	Total Equity Shareholders' Funds		640,949		745,506
	Net Asset Value per Ordinary Share		1,800.64p		2,001.21p
	Ordinary Shares in issue 30 September		35,595,687		37,252,687

Balance Sheet

		As at 30 Sept 2008		As at 30 Sept 2007
Note		£'000	£'000	£'000	£'000
	Non-Current Assets
12	Investments held at fair value:
	Subsidiary undertakings		290,548		322,926
	Unlisted and listed		130,154		153,672
	Floating Rate Notes		276,467		299,437
			697,169		776,035
	Current Assets
13	Trade and other receivables	6,217		18,993
	Cash and cash equivalents	42,920		16,398
		49,137		35,391
	Current Liabilities
14	Trade and other payables	63,784		27,961
	Net Current (Liabilities)/Assets		(14,647)		7,430
			682,522		783,465
22	Deferred tax	11,751		11,751
23	Provision for Liabilities and Charges	16,990		27,395
	Non Current Liabilities		28,741		39,146
			653,781		744,319
	Capital and Reserves
17	Called-up share capital		8,899		9,313
18	Share premium	24,147		24,147
18	Capital redemption reserve	34,376		33,962
18	Realised capital profits	844,266		805,203
18	Unrealised capital losses	(260,585)		(143,021)
18	Revenue reserve	2,678		14,715
			644,882		735,006
	Total Equity Shareholders' Funds		653,781		744,319

The Accounts were approved by the Directors on 4 December 2008 and were signed on their behalf by:

Sir Brian Williamson, Chairman

Consolidated Cash Flow Statement

For the year ended 30 September		2008		2007
	£'000	£'000	£'000	£'000
Operating Activities
Purchases of investments	(345,270)		(353,116)
Amounts paid under incentive schemes	(31,808)		(28,641)
Sales of investments	459,825		415,782
Dividends and distributions received	2,514		2,221
Other investment income received	22,376		26,073
Interest income received	2,559		2,098
Other income received	297		297
Expenses paid	(16,580)		(14,638)
Taxation paid	(3,295)		(6,574)
Net Cash Inflow from Operating Activities		90,618		43,502
Financing Activities
Bank loans drawn	55,466		126,932
Bank loans repaid	(75,599)		(123,109)
Purchase of own shares	(26,492)		(22,304)
Finance costs	(7,583)		(9,792)
Other finance costs	(338)		(471)
Dividend paid	(9,149)		(6,375)
Net Cash Outflow from Financing Activities		(63,695)		(35,119)
Changes in cash and cash equivalents		26,923		8,383
Cash and cash equivalents at 1 October		16,948		9,875
Translation difference		(80)		(1,310)
Cash and Cash Equivalents at 30 September		43,791		16,948

Cash Flow Statement

For the year ended 30 September	2008		2007
	£'000	£'000	£'000	£'000
Operating Activities
Purchases of investments	(357,253)		(247,632)
Amounts paid under incentive scheme	(31,808)		(28,641)
Sales of investments	426,156		402,512
Dividends and distributions received	2,514		2,253
Other investment income received	21,885		21,189
Interest received	2,540		2,097
Other income received	297		297
Expenses paid	(15,723)		(12,816)
Taxation paid	(3,641)		(5,414)
Net Cash Inflow from Operating Activities		44,967		133,845
Financing Activities
Purchase of own shares	(26,492)		(22,304)
Loans received	-		13,153
Intercompany loans	17,614		(109,792)
Other finance costs	(338)		(471)
Dividend paid	(9,149)		(6,375)
Net Cash Outflow from Financing Activities		(18,365)		(125,789)
Changes in cash and cash equivalents		26,602		8,056
Cash and cash equivalents at 1 October		16,398		8,957
Translation difference		(80)		(615)
Cash and Cash Equivalents at 30 September		42,920		16,398

Basis of Accounting

The Accounts for the year ended 30 September 2008 have been prepared in accordance with the Companies Act 1985 and International Financial Reporting Standards ('IFRS'). IFRS comprises standards and interpretations approved by the International Accounting Standards Board ('IASB') and the International Financial Reporting Interpretations Committee ('IFRIC') as adopted in the European Union as at 30 September 2008.

In order to reflect the activities of an investment trust company, supplementary information which analyses the income statement between items of a revenue and capital nature has been presented alongside the income statement. In analysing total income between capital and revenue returns, the Directors have followed the guidance contained in the Statement of Recommended Practice for investment trusts issued by the Association of Investment Companies in December 2005 (the 'SORP').

The recommendations of the SORP which have been followed include:

•	Realised and unrealised profits or losses arising on the revaluation or disposal of investments classified as held at fair value through profit and loss should be shown in the capital column of the income statement. Realised gains are taken to the realised reserves in equity and unrealised gains are transferred to the unrealised reserves in equity.
•	Returns on any share or debt security (whether in respect of dividends, interest or otherwise) should be shown in the revenue column of the income statement. The total of the revenue column of the income statement is taken to the revenue reserve in equity.
•	The Board should determine whether the indirect costs of generating capital gains should also be shown in the capital column of the income statement.

If the Board decides that this should be so, the management fee should be allocated between revenue and capital in accordance with the Board's expected long term split of returns, and other expenses should be charged to capital only to the extent that a clear connection with the maintenance or enhancement of the value of investments can be demonstrated. The Board has decided that the Company should continue to charge priority profit share and finance costs as revenue items for the year ended 30 September 2008.

In accordance with the Company's status as a UK investment company under Section 266 of the Companies Act 1985, net capital return may not be distributed by way of dividend. 

The Accounts have been prepared on the historical cost basis of accounting, modified to include the revaluation of certain assets.

Application of new standards

Amendments to existing standards and IFRIC interpretations, that became effective in the year, have been applied by the Group but none have had a material impact on the financial statements or accounting policies. These included IFRS 7 'Financial Instruments: Disclosures', and the complementary Amendment to IAS 1: 'Presentation of the Financial Statements - Capital Disclosures' 

New Standards and Interpretations not Applied

The IASB and the IFRIC have issued the following standards, amendments and interpretations to be applied to financial statements with periods commencing on or after the following dates:

International Accounting Standards		Application Date
IAS 1	(Revised) - presentation of Financial Statements: Items of Income and Expenses	1 January 2009
IAS 23	(Revised) - Borrowing Costs	1 January 2009
IFRS3	(Revised) - Business Combinations	1 July 2009
IAS27	(Revised) - Consolidated and Separate Financial Statements	1 July 2009
IFRS 8	Operating Segments	1 January 2009

The Directors do not anticipate that the adoption of these standards and interpretations will have any significant impact on the financial statements other than to require some additional disclosures.

Basis of Consolidation

The consolidated Accounts include the Company and its subsidiary undertakings. Where subsidiaries are acquired or sold during the year their results are included in the consolidated accounts from the date of acquisition and up to the date of disposal respectively. A subsidiary is an entity where the Company has the power to govern the financial and operating policies so as to obtain benefit from its activities. The principal subsidiaries comprise wholly owned companies and near wholly owned investment holding limited partnerships set up by the Company through which investments are made and through which external borrowings for investment purposes are raised. These are set out in Note 20. The holdings in investment holding limited partnerships and wholly owned investment holding companies are included in the consolidated financial statements, on the basis that they are considered to be special purpose entities of the Company, which have been set up for the specific purpose of holding investments. These investment holding limited partnerships and wholly owned investment holding companies are considered to be controlled by the Company under the interpretation of SIC 12 'Special Purpose Entities' as the Company enjoys predominantly all the risks and rewards from their activities. These are distinct from the investments held by the special purpose entities described below. 

Investments

The Board have appointed Electra Partners, an independent investment manager, under a contract of full discretionary management to manage the investments of the Company. This is effected through the Management and Investment Guideline Agreement and the relevant limited partnership agreements of the investment holding limited partnerships through which the Company makes its investments. Under these agreements Electra Partners as Manager, has full power to exercise the voting rights attaching to any of the Company's investments without reference to the Board. Consequently the Company does not have the power to participate in or govern the financial and operating policies of any of its investments and therefore even where the holding is greater than 50% of the equity, or between 20% and 50% of the equity, investments are not consolidated or accounted for using the equity method respectively.

Purchases and sales of listed investments and floating rate notes are recognised on the trade date where a contract exists whose terms require delivery within a time frame determined by the relevant market. Purchases and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional. Investments are designated at fair value through profit and loss (described in the Accounts as investments held at fair value) and are subsequently measured at reporting dates at fair value. The fair value of direct unquoted investments is calculated in accordance with the Principles of Valuation of Investments below. Changes in the fair value of investments are recognised in the Income Statement through the capital column. 

Principles of Valuation of Investments

(i) General

In valuing investments, Electra Partners ('the Manager') values investments at Fair Value at the reporting date, in accordance with IAS 39.

Fair Value represents the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction. In estimating Fair Value, the Manager uses a methodology which is appropriate in light of the nature, facts and circumstances of the investment and its materiality in the context of the total investment portfolio. Methodologies are applied consistently from one period to another except where a change results in a more accurate estimate of Fair Value. 

(ii) Unlisted Investments

The principal methodologies applied in valuing unlisted investments include the following:

• Earnings multiple

• Price of recent investment

• Net assets

In applying the Earnings Multiple methodology, the Manager applies a market based multiple that is appropriate and reasonable to the maintainable earnings of the company. In the majority of cases the Enterprise Value of the underlying business is derived by the use of an Earnings Before Interest and Tax multiple applied to current year's earnings where these can be forecast with a reasonable degree of certainty and are deemed to represent the best estimate of maintainable earnings. Where this is not the case, historic earnings will generally be used in their place.

Where a recent investment has been made, either by Electra or by a third party in one of Electra's investments, after considering the background of the underlying investment, this price will generally be used as the estimate of Fair Value, subject to consideration of changes in market conditions and company specific factors. Other methodologies, as detailed above, may be used at any time if this is deemed to provide a more accurate assessment of the Fair Value of the investment.

The Fair Value of an investment in a company which has not been valued by reference to a recent transaction will be arrived at through the following process:

• The Enterprise Value of the underlying business will be calculated using the earnings multiple or net assets basis;

• The Enterprise Value of the underlying business will then be adjusted for surplus assets or excess liabilities to arrive at an Enterprise Value for the company; and

• The valuation of Electra's investment will be calculated from the Enterprise Value for the company after deduction of prior ranking debt and other financial instruments and an appropriate marketability discount.

In terms of the marketability discount, this will normally be in the range of 10-30% applied to the Enterprise Value of the company after deducting prior ranking debt and other financial instruments.

The amount of the marketability discount will primarily reflect the ability of the Manager to control or influence the timing and nature of any realisation. Where the Manager has the ability to control an exit, or is part of a syndicate of like-minded investors who can control the exit, a marketability discount of 15% will normally be applied. This may vary according to market and investee company circumstances. Where the likelihood of an exit is high, the discount is likely to be lower. Where there is no ability to control an exit and exit is not under discussion, the discount is likely to be higher. In cases where no exit is contemplated by controlling shareholders, the investment may be valued by discounting the cash flow from the investment itself.

(iii) Listed Investments

Listed investments are stated at the last traded bid price on the balance sheet date without discount. 

(iv) Limited Partnership Funds

Limited partnership funds are those set up by a third party where the Company does not hold a majority share and are at fair value. Typically using the third party manager's valuation.

(v) Floating Rate Notes

Floating rate notes are at the current fair value of the note. 

Accrued Income

Accrued income is included within investment valuations.

Cash and Cash Equivalents

Cash comprises cash at bank and short term deposits with an original maturity of less than three months.

Dividends

Dividend distributions to shareholders are recognised as a liability in the period in which they are approved unconditionally.

Foreign Currencies

The Group's presentational currency and the Company's functional and presentational currency is pounds sterling ('sterling'). Transactions in currencies other than sterling are recorded at the rates of exchange prevailing on the dates of the transactions. Foreign currency assets and liabilities are translated into the functional currencies of the Group's respective entities at rates prevailing at the balance sheet date. Exchange differences arising are recognised through the Income Statement. At each balance sheet date assets and liabilities of foreign operations are translated into sterling at the rates prevailing on the balance sheet date. Foreign exchange differences arising on retranslation of the equity and reserves of subsidiaries with functional currencies other than sterling, are recognised directly in the Translation Reserve in equity. Foreign exchange differences arising on the retranslation of non-monetary items carried at fair value are included in the Income Statement for the period.

Income

Dividends receivable from equity shares are brought into account on the ex-dividend date or, where no ex-dividend date is quoted, are brought into account when the Group's right to receive payment is established. Fixed returns on non-equity shares and debt securities are recognised on a time apportionment basis so as to reflect the effective yield when it is probable that economic benefit will flow to the Group. Where income accruals previously recognised, but not received, are no longer considered to be reasonably expected to be received, either through investee company restructuring or doubt over receipt, then these amounts are reversed through expenses.

Income distributions from limited partnership funds are recognised when the right to distribution is established.

Expenses

All expenses are accounted for on an accruals basis. Expenses are charged through the revenue column of the Income Statement except for expenses in connection with the disposal of non-current asset investments, which are deducted from the disposal proceeds of the investment.

Finance Costs

Costs of borrowings are expensed as revenue items through the Income Statement as they accrue on an effective interest rate basis.

Priority Profit Share

The majority of the investments are made by the Company through investment holding limited partnerships managed by Electra Partners. Under the terms of the relevant limited partnership agreements the general partner is entitled to appropriate, as a first charge on the net income or net capital gains of the limited partnerships, an amount equivalent to its priority profit share. In periods in which the investment holding limited partnerships have not yet earned sufficient net income or net capital gain to satisfy this priority profit share the entitlement is carried forward to the following period. In all instances the cash amount paid to the general partner in each period is equivalent to the priority profit share. 

The priority profit share is charged wholly to the revenue column of the Income Statement.

Taxation

The tax effect of different items of income/gain and expense/loss is allocated between capital and revenue on the same basis as the particular item to which it relates, using the Company's effective rate of tax for the accounting period. Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

Provisions

Provisions are recognised when the Group has a present obligation of uncertain timing or amount as a result of past events and it is probable that the Group will be required to settle that obligation and a reliable estimate of that obligation can be made. The provisions are measured at the Directors' best estimate of the amount to settle the obligation at the balance sheet date. Changes in provisions are recognised in the Income Statement.

The provision for the incentive schemes is based on the valuation of investments as at the Balance Sheet date. The incentive scheme is charged to the capital column of the Income Statement as a direct cost.

Revenue and Capital Reserves

The Capital Profit component of Total Income is taken to the non-distributable Realised Capital Profit Reserve within the Consolidated Statement of Changes in Equity. The Revenue Profit component of Total Income is taken to the Revenue Reserve from which dividend distributions are made.

Key Estimates and Assumptions

Estimates and judgements used in preparing the financial information are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable. The resulting estimates will, by definition, seldom equal the related actual results.

The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities relate to the valuation of unquoted investments. These are valued by Electra Partners in accordance with IAS 39. Judgement is required in order to determine the appropriate valuation methodology under this standard and subsequently in determining the inputs into the valuation model used. These judgements include making assessments of the future earnings potential of portfolio companies, appropriate earnings multiples to apply, and marketability discounts. 

Notes to the Accounts

1 Segmental Analysis

For the year ended 30 September								* Restated
				2008				2007
	UK & Continental  Europe £'000	Americas £'000	Far East £'000	Total £'000	UK &  Continental Europe £'000	Americas £'000	Far East £'000	Total £'000
Net (Loss)/Gain on Investments
Realised and unrealised capital (loss)/gain on investments *
	(5,549)	(11,976)	(29,013)	(46,538)	163,875	41,317	22,197	227,389
Portfolio investment income	26,030	158	-	26,188	33,696	269	455	34,420
	20,481	(11,818)	(29,013)	(20,350)	197,571	41,586	22,652	261,809
Realised and unrealised capital (loss)/ gain on foreign currency
	(5,448)	(12,936)	-	(18,384)	(1,281)	8,918	-	7,637
	15,033	(24,754)	(29,013)	(38,734)	196,290	50,504	22,652	269,446
Other income				12,413				2,394
Incentive schemes *				(9,496)				(57,306)
Priority profit share				(13,435)				(12,350)
Other expenses				(8,381)				(8,240)
Net (Loss)/Profit before Finance Costs and Taxation				(57,633)				193,944
Finance costs				(7,921)				(8,859)
(Loss)/Profit on Ordinary Activities before Taxation				(65,554)				185,085
Portfolio Additions and Sales
Purchases at cost	353,985	4,743	-	358,728	340,916	9,795	-	350,711
Disposal proceeds	414,549	44,634	-	459,183	411,184	16,640	-	427,824
Balance Sheet
Investments held at fair value	725,618	37,012	28,086	790,716	820,116	63,535	49,097	932,748

* Electra has historically deducted amounts due under incentive schemes in calculating net gains on investments. These amounts have now been reclassified and disclosed separately in the Consolidated Income Statement, in order to be consistent with the gross presentation in the Consolidated Balance Sheet. This reclassification is presentational only and has no effect on net profit on ordinary activity before taxation, return attributable to equity shareholders or the net assets of Electra.

Geographical segments are considered to be the primary reporting segment. The secondary reporting segment is the Group's activity as an investment trust company. This activity is the Group's single business segment.

2 Net Revenue Gain On Investments Held at Fair Value

For the year ended 30 September		2008		2007
	£'000	£'000	£'000	£'000
Income of the Investment Trust
UK Dividend Income from Non-current Assets
Unlisted - UK	1,723		284
Listed - UK	1,153		-
Partnership interests - UK *	-		1,941
		2,876		2,225

* This represents the income that has been appropriated in accordance with the limited partnership agreements by the general partners of the limited partnership funds.

For the year ended 30 September		2008		2007
	£'000	£'000	£'000	£'000
Income of the Investment Trust continued
Other Investment Income from Non-current Assets
Unlisted - UK	22,819		18,119
Unlisted - overseas	493		450
Partnership interests - UK *	-		10,409
		23,312		28,978
Net Income of Subsidiary Undertakings
Other Investment Income from Non-current Assets
Unlisted - UK	-		3,217
		-		3,217
		26,188		34,420

* This represents the income that has been appropriated in accordance with the limited partnership agreements by the general partners of the limited partnership funds.

3 Other Income

For the year ended 30 September		2008		2007
	£'000	£'000	£'000	£'000
Interest and Other Income
Bank interest income	2,503		1,940
Other income	297		297
			2,800	2,237
Interest Receivable and Other Income
Other interest	57		157
			57	157
			2,857	2,394

4 Expenses

	Year to	Year to
	30 Sept 2008	30 Sept 2007
	£'000	£'000
Priority profit share paid to General Partners	13,435	12,350

For the year ended 30 September		2008		2007
	Revenue	Capital	Revenue	Capital
	£'000	£'000	£'000	£'000
Other Expenses
Administrative expenses	1,579	-	1,883	-
Income reversals	6,074	-	-	-
Directors' remuneration (see Note 5)	330	-	336	-
Auditors' remuneration	398	-	483	-
Capital foreign exchange movements	-	-	-	5,538
	8,381	-	2,702	5,538

It is the Group's practice to employ PricewaterhouseCoopers LLP on assignments additional to their statutory audit duties where their expertise and experience with the Group are important, principally tax advice and compliance matters, or where they are awarded assignments on a competitive basis.

During the year PricewaterhouseCoopers LLP earned the following fees. In addition, an amount of £68,000 (2007: £52,000) was earned by PricewaterhouseCoopers LLP, USA in relation to taxation advisory and compliance services.

	Year to	Year to
	30 Sept 2008	30 Sept 2007
	£'000	£'000
Audit fees
Statutory audit of the company	209	216
Audit of subsidiary companies	40	42
Tax and compliance	83	85
	332	343
Advisory services
Audit related regulatory reporting	57	120
Further assurance services	9	20
Auditors' Remuneration	398	483

5 Directors' Remuneration

	Year to	Year to
	30 Sept 2008	30 Sept 2007
	£'000	£'000
Chairman's remuneration for year	150	150
Directors' fees	180	186
	330	336
Emoluments
Chairman and highest paid Director:	150	150

The Board of Directors are considered to be the Key Management Personnel. For further details see Directors' Remuneration Report above in this announcement.

No pension contributions were made in respect of any of the Directors and no Director will receive any pension from any company within the Group. 

During the year no Director (2007: none) waived remuneration.

6 Employees (Excluding Directors)

The Company has no employees (2007: none).

7 Finance Costs

	Year to	Year to
	30 Sept 2008	* 30 Sept 2007
	£'000	£'000
Loans Repayable between One and Two Years
Interest on Bank loan	7,583	9,530
Loan commitment fees	338	470
	7,921	10,000
Other interest	-	(1,141)
	7,921	8,859

* (2007: Loans repayable between one and three years.)

The bank loan is a £250,000,000 committed multi-currency revolving facility that is repayable on 27 September 2010. the facility Agreement states that the Group is liable to pay interest at LIBOR rates plus a margin with rates varying between 0.5% to 0.75% depending on the ratio of portfolio value plus cash to borrowed funds. In addition, mandatory costs in the form of loan commitment fees are due on this facility.

8 Taxation on Ordinary Activities

A tax charge of £3,799,000 arose in the year to 30 September 2008 (2007: £10,756,000). Corporation tax at 29% (2007: 30%).

The actual tax charge reconciles to the tax charge on revenue before tax based on the standard rate of corporation tax of 29% (2007: 30%) as follows:

For the year ended 30 September			2008			2007
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
(a) UK Corporation Tax
Current tax	3,681	-	3,681	4,262	-	4,262
Adjustment in respect of prior periods	681	-	681	(646)	(4,266)	(4,912)
Overseas tax adjustments in respect of prior periods	4	(241)	(237)	8	(111)	(103)
	4,366	(241)	4,125	3,624	(4,377)	(753)
Deferred tax overseas	-	(326)	(326)	-	11,509	11,509
Tax Charge	4,366	(567)	3,799	3,624	7,132	10,756

(b) Factors Affecting the Tax Charge for the Year
Profit on ordinary activities before taxation	(692)	(64,862)	(65,554)	12,903	172,182	185,085
Profit on ordinary activities multiplied by the standard rate of UK corporation
tax of 29% (2007: 30%)	(201)	(18,810)	(19,011)	3,871	51,655	55,526
Effects of:
Prior year adjustments	681	-	681	(646)	-	(646)
Overseas prior year adjustments	4	(241)	(237)	8	(111)	(103)
Dividend income	(834)	-	(834)	(85)	-	(85)
Disallowable expenses	67	-	67	79	-	79
Priority profit share of partnership income
appropriated by General Partners	3,896	(3,896)	-	-	-	-
Brought forward losses utilised	-	-	-	-	(181)	(181)
Current losses utilised	540	(540)	-	390	(390)	-
Capital allowances	(2)	-	(2)	(2)	-	(2)
Unutilised losses arising in the year	27	-	27	9	-	9
Deferred tax overseas	-	(326)	(326)	-	11,509	11,509
Subsidiary current tax	221	-	221	-	-	-
Adjustment of taxes for previous periods	-	-	-	-	(4,266)	(4,266)
Transaction fees	(33)	33	-	-	-	-
Capital profits not chargeable due to Investment Trust status	-	23,213	23,213	-	(51,084)	(51,084)
Tax charge	4,366	(567)	3,799	3,624	7,132	10,756

9 Dividends

For the year ended 30 September	2008	2007
	£'000	£'000
Dividends paid in the period	9,149	6,375
Dividends paid per share	25p	17p

A special dividend of 25p per ordinary share was paid during the year ended 30 September 2008. Based on the outstanding number of ordinary shares at the date of the dividend payment, of 36,595,687 a final payment of £9,149,000 was made. The Directors are not proposing a special dividend in respect of the financial year ended 30 September 2008. 

10 Revenue Return Attributable to Equity Shareholders

The Revenue Return attributable to shareholders includes a loss of £2,888,000 (2007: profit of £12,156,000) which has been dealt with in the Accounts of the Company.

11 Earnings Per Share

	2008	2007
	p	p
Revenue return per ordinary share	(13.98)	24.60
Capital return per ordinary share	(177.69)	437.49
Earnings per ordinary share (basic and diluted)	(191.67)	462.09

The calculation of revenue return per share is based on the revenue losses attributable to shareholders of £5,058,000 (2007: profit £9,279,000) on a weighted average number of 36,184,369 (2007: 37,726,906) ordinary shares of 25p in issue. The calculation of capital return per share is based on the capital loss attributable to ordinary shareholders of £64,295,000 (2007: profit £165,050,000) on a weighted average number of 36,184,369 (2007: 37,726,906) ordinary shares of 25p in issue. There were no potentially dilutive shares in either year.

12 Non-Current Assets

Investments Held at Fair Value

	Group		Company
	30 Sept 2008	30 Sept 2007	30 Sept 2008	30 Sept 2007
	£'000	£'000	£'000	£'000
Subsidiary Undertakings at Fair Value
Unlisted - UK and Continental Europe	-	-	1,319	1,345
Unlisted - USA and other	-	-	6,085	6,634
Investment partnerships - UK and Continental Europe	-	-	249,255	251,689
Investment partnerships - USA and other	-	-	33,889	63,258
	-	-	290,548	322,926

For the year ended 30 September  for the Group			2008			2007
		Accrued			Accrued
	Valuation	Income	Total	Valuation	Income	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Unlisted at Fair Value
UK and Continental Europe	277,995	7,564	285,559	358,227	12,405	370,632
UK floating rate notes	274,252	2,215	276,467	297,004	2,433	299,437
USA and Other	4,171	-	4,171	86,622	802	87,424
Partnership interests - UK and Continental Europe	102,266	-	102,266	73,360	-	73,360
Partnership interests - USA and other	24,412	-	24,412	25,208	-	25,208
	683,096	9,779	692,875	840,421	15,640	856,061
Listed at Fair Value
UK, Continental Europe and other	96,371	1,470	97,841	76,475	212	76,687
	779,467	11,249	790,716	916,896	15,852	932,748

For the year ended 30 September for the Company			2008			2007
		Accrued			Accrued
	Valuation	Income	Total	Valuation	Income	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Unlisted at Fair Value
UK and Continental Europe	32,306	-	32,306	21,597	572	22,169
UK floating rate notes	274,252	2,215	276,467	297,004	2,433	299,437
USA and other	-	-	-	20,177	-	20,177
Partnership interests - UK and Continental Europe	63,098	-	63,098	51,867	-	51,867
Partnership interests - USA and other	17,519	-	17,519	25,208	-	25,208
	387,175	2,215	389,390	415,853	3,005	418,858
Listed at Fair Value
UK, Continental Europe and other	17,143	88	17,231	34,207	44	34,251
	404,318	2,303	406,621	450,060	3,049	453,109
Investments Held at Fair Value
For the year ended 30 September 2008			Group			Company
		Accrued			Accrued
	Valuation	Income	Total	Valuation	Income	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Valuation at 1 October 2007
Investments	916,896	-	916,896	772,986	-	772,986
Accrued income at 1 October 2007	-	15,852	15,852	-	3,049	3,049
	916,896	15,852	932,748	772,986	3,049	776,035
Purchases	358,726	-	358,726	370,805	-	370,805
	1,275,622	15,852	1,291,474	1,143,791	3,049	1,146,840
Accrued income realised	-	5,107	5,107	-	2,753	2,753
Disposals	380,383	-	380,383	348,373	-	348,373
	380,383	5,107	385,490	348,373	2,753	351,126
Increase in accrued income provision	-	504	504	-	2,327	2,327
Decrease in valuation	(115,772)	-	(115,772)	(100,872)	-	(100,872)
Valuation at 30 September 2008	779,467	11,249	790,716	694,546	2,623	697,169
Cost at 30 September 2008	997,640	-	997,640	879,798	-	879,798

13 Trade and Other Receivables - Current

	Group		Company
	30 Sept 2008	30 Sept 2007	30 Sept 2008	30 Sept 2007
	£'000	£'000	£'000	£'000
Sales for future settlement	-	13,552	-	13,552
Taxation recoverable	872	1,354	-	36
Amounts owed by subsidiary undertakings	-	-	4,667	4,129
Other debtors	2,171	1,283	1,550	1,276
	3,043	16,189	6,217	18,993

14 Trade and Other Payables - Current

	Group		Company
	30 Sept 2008	30 Sept 2007	30 Sept 2008	30 Sept 2007
	£'000	£'000	£'000	£'000
Amounts Falling Due within One Year
Amounts owed to subsidiary undertakings	-	-	58,288	11,599
Corporation tax	1,744	1,041	1,522	1,041
Overseas taxation	1,603	1,603	1,603	1,603
Other creditors	5,077	16,940	2,371	13,718
	8,424	19,584	63,784	27,961

15 Creditors

	Group		Company
	30 Sept 2008	30 Sept 2007	30 Sept 2008	30 Sept 2007
	£'000	£'000	£'000	£'000
Bank loan
Due between one to two years (2007: one to three years)	158,870	160,699	-	-

A variable rate of interest is charged on the bank loan. The bank loan relates to a £250,000,000 committed multi-currency revolving credit facility. The loan is repayable on 27 September 2010. Under the Facility Agreement the Group is liable to pay interest at LIBOR rates plus mandatory costs plus a margin with variable rates determined by the ratio of portfolio value plus cash to total borrowed funds, the range of the variable margin rates is between 0.5% and 0.75%. The weighted average effective interest rate for the year was 4.53% (2007: 5.47%).

16 Financial Instruments

(i) Management of Risk

As an investment trust, the Group's investment objective is to seek capital growth from a portfolio of securities drawn from markets both within the UK and worldwide. The holding of these financial instruments to meet this objective results in certain risks.

The Group's financial instruments comprise:

1. Securities in unquoted and quoted companies, partnership interests and floating rate notes.

2. A loan facility, the purpose of which is to finance tender offers, other share buy-backs and on-market purchases of shares, the financing of new investment and refinancing existing debt.

The main risks arising from the Group's financial instruments are fluctuations in market price, interest rate, liquidity, capital and foreign currency exchange rate risk. The policies for managing each of these risks are summarised below. These policies have remained constant throughout the year under review and the preceding year.

Market Price Risk

Market price risk arises mainly from uncertainty about future prices of financial instruments used in the Group's operations. It represents the potential loss the Group might suffer through holding market positions in the face of price movements, mitigated by stock selection. The Group does not use derivatives.

Electra Partners has responsibility for monitoring the portfolio in accordance with the Group's investment objectives and seeks to ensure that individual stocks meet an acceptable risk reward profile.

The Group is exposed to the risk of the change in value of its fund investments, listed and unlisted equity and non-equity shares, fixed income securities and floating rate notes. For funds, listed investments and floating rate notes the market risk variable is deemed to be the price itself. For unlisted equity and non-equity shares the market risk is deemed to be the price/earnings ratio. The impact on profit or loss after tax and on shareholders' equity, in absolute and percentage terms of those figures, due to movements in these variables, is set out in part (ii) of this Note.

Credit Risk 

The Group's exposure to credit risk principally arises from its investment in floating rate notes and its cash deposits. Only major clearance houses are used when making cash deposits and the level of cash versus floating rate notes is reviewed on a regular basis.

A well diversified portfolio of floating rate notes is maintained with no more than 10% of gross assets held with any one institution. The total invested in floating rate notes was £274,252,000 with associated accrued interest of £2,215,000 (2007: £297,004,000 with associated interest of £2,433,000). The cost of this investment was £275,528,000 (2007: £297,390,000), the variance to valuation is in respect of deal related costs and market pricing. Cash held on deposit was principally with one UK bank and totalled £43,791,000 (2007: £16,948,000).

Interest Rate Risk

The Group finances its operations through retained profits including both realised and unrealised capital profits. In addition, financing is obtained through loan facilities. During the year, a long-term multi-currency loan facility was in existence. The loan has a floating rate of interest.

The cash balances held on deposit mitigate in part the interest rate risk. 

Interest rate risk profiles for financial assets and liabilities and the impact of the profit or loss after tax and on shareholders' equity of a 1.0% increase or decrease in interest rates, in absolute terms and as a percentage of those figures, are shown in part (iv) of this Note. These profiles exclude short term debtors and creditors.

Liquidity Risk

The Group's assets comprise listed and unlisted equity and non-equity shares, fixed income securities and floating rate notes whilst the unlisted equity is intentionally illiquid. Short-term flexibility is achieved through the revolving loan facility, floating rate notes which are relatively liquid and cash which is available on demand.

The maturity of the Group's existing borrowings are set out in part (v) of this Note.

Capital Risk Management

The Group's objective in the management of capital risk is to safeguard its ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure. In doing so the Group may adjust the amount of dividends paid to shareholders (whilst remaining within the restrictions imposed by its investment trust status), return capital to shareholders, change level of borrowing in the £250,000,000 committed multi-currency revolving credit facility or issue new shares. During the year the Group paid a special dividend of £9,149,000 (2007: £6,375,000). In order to be able to pay dividend out of profits available for distribution the Company has to be able to meet one of the two capital restriction tests imposed on investment companies by company law.

The Group continued to pursue an active share buy-back policy and to return value to shareholders, manage the levels of cash deposits held whilst maintaining sufficient liquidity for investments. This amounted to £26,492,000 (2007: £22,304,000) during the period.

The £250,000,000 committed multi-currency revolving credit facility was drawn down such that a balance of £158,870,000 was outstanding at the year end (2007: £160,699,000). The loan is repayable on 27 September 2010. The level of outstanding borrowings is reviewed on an ongoing basis taking into account the need to buy back shares, future levels of investment and any foreign currency hedging concerns. 

The Group's capital at 30 September 2008 comprises:

	30 Sept 2008	30 Sept 2007
	£'000	£'000
Debt
Borrowing under the credit facility	158,870	160,699
Equity
Equity share capital	8,899	9,313
Retained earnings and other reserves	632,050	736,193
	640,949	745,506
Total capital	799,819	906,205
Debt as a percentage of total capital	19.9%	17.7%

Foreign Currency Risk

The Group's total return and net assets are affected by foreign exchange translation movements as a significant proportion of the investments held are denominated in currencies other than sterling.

Revenue received in currencies other than sterling is converted into sterling at the date of the transaction. Foreign currency assets and liabilities are translated at the year-end rate. The treatment of foreign currency transactions has been described in greater detail in the Basis of Accounting.

The foreign investments held are principally in the USA, Continental Europe, Latin America and the Far East.

During the year, the Group held loans denominated in US Dollars and Euros, which partially offset foreign currency risk on foreign currency investments. The ratio of loans held in US Dollar and Euro is under regular review in order to partially hedge as efficiently as possible.

Foreign currency exposures and the impact on profit after tax on shareholders equity of 10% increases and decreases in the value of US Dollar and Euros, in absolute terms and as a percentage of those figures are analysed in part (iii) of this Note.

(ii) Market Price Exposure

		2008		2007
	Increase in	Decrease in	Increase in	Decrease in
	variable	variable	variable	variable
	£'000	£'000	£'000	£'000
10% movement in price of fund, listed investments, floating rate notes* and
price/earnings ratio for unlisted investments †
Impact on profit after tax	75,249	(73,269)	77,832	(115,103)
Impact as a percentage of profit after tax	108.5%	(105.6)%	44.7%	(66.0)%
Impact on shareholders' equity	75,249	(73,269)	77,832	(115,103)
Impact as a percentage of shareholders' equity	11.7%	(11.4)%	10.4%	(15.4)%

* 1% movement on floating rate notes.

† For individual unlisted investments a marketability discount is applied. Changes in such discounts to reasonably possible alternatives would not significantly change fair values.

(iii) Foreign Currency Exposures

A portion of the financial assets and liabilities of the Group are denominated in currencies other than sterling, which has an impact on the net assets and return of the Group as at 30 September 2008.

	Foreign currency		Foreign currency		Net foreign currency
Currency	monetary assets		monetary liabilities		monetary assets
As at 30 September	2008	2007	2008	2007	2008	2007
	£'000	£'000	£'000	£'000	£'000	£'000
US Dollar	129,791	216,022	(52,803)	(115,466)	76,988	100,556
Euro	165,123	101,011	(106,067)	(45,233)	59,056	55,778
Total	294,914	317,033	(158,870)	(160,699)	136,044	156,334

Currency		2008		2007
	Increase in	Decrease in	Increase in	Decrease in
	variable	variable	variable	variable
	£'000	£'000	£'000	£'000
10% Movement in Euro
Impact on profit after tax	(2,840)	3,498	(5,418)	6,622
Impact as a percentage of profit after tax	(4.1)%	5.0%	(3.1)%	3.8%
Impact on shareholders' equity	(2,840)	3,498	(5,418)	6,622
Impact as a percentage of share holders' equity	(0.4)%	0.5%	(0.7)%	0.9%
10% Movement in US Dollar
Impact on profit after tax	(5,613)	8,167	(7,904)	9,542
Impact as a percentage of profit after tax	(8.1)%	11.8%	(4.5)%	5.5%
Impact on shareholders' equity	(5,613)	8,167	(7,904)	9,542
Impact as a percentage of shareholders' equity	(0.9)%	1.3%	(1.1)%	1.3%

(iv) Interest Rate Risk Profile of Financial Assets and Liabilities

Financial Assets

The financial instruments held by the Group include equity and non-equity shares as well as fixed interest securities. The type of income generated from these financial instruments is shown as at 30 September 2008.

		Floating rate	Fixed rate	Financial assets on
Currency	Total	financial assets	financial assets	which no interest is earned
As at 30 September 2008	£'000	£'000	£'000	£'000
Sterling	539,593	326,911	119,030	93,652
US Dollar	129,791	4,583	14,446	110,763
Euro	165,123	716	-	164,407
Total	834,507	332,210	133,476	368,821

Interest on floating rate financial assets is at prevailing market rates.

		Floating rate	Fixed rate	Financial assets on
Currency	Total	financial assets	financial assets	which no interest is earned
As at 30 September 2007	£'000	£'000	£'000	£'000
Sterling	632,663	322,080	201,888	108,695
US Dollar	216,022	21,703	34,554	159,765
Euro	101,011	23	-	100,988
Total	949,696	343,806	236,442	369,448

	Fixed rate financial assets weighted		Fixed rate financial assets on which no interest
Currency	average interest rate		is paid weighted average period until maturity
As at 30 September	2008	2007	2008	2007
	%	%	years	years
Sterling	14.0	12.9	-	-
US Dollar	15.0	12.9	-	2
Euro	11.9	11.9	-	-

The equity shares held have no interest payable and do not have a stated maturity date. 

(iv) Interest Rate Risk Profile of Financial Assets and Liabilities continued

Financial Liabilities

The interest rate profile of the financial liabilities:

Currency	Floating rate financial liabilities
As at 30 September	2008	2007
	£'000	£'000
US Dollar	52,803	115,466
Euro	106,067	45,233
Total loan	158,870	160,699
Total loan facility	250,000	250,000

The floating rate financial liabilities comprise a £250,000,000 committed multi-currency revolving credit facility, based on a rate per annum, the aggregate of margin, LIBOR and mandatory cost. The margin is a variable rate determined by the ratio of portfolio value plus cash to borrowed funds, the range of the variable margin rate is between 0.5% and 0.75%. For the year ended 30 September 2008 the margin rate was 0.5% (2007: 0.5%). The Group has not held fixed rate interest bearing financial liabilities, or financial liabilities on which no interest is paid. The weighted average effective interest rate for the year was 4.53% (2007: 5.47%).

(v) Maturity of Financial Liabilities

The maturity profile of the Group's financial liabilities as at 30 September 2008 was:

As at 30 September	2008	2007
	£'000	£'000
Between one and two years (2007: one and three years)	158,870	160,699

The financial liability relates to a bank loan of £250,000,000 committed multi-currency revolving credit facility. The facility is repayable on 27 September 2010. 

			2008		2007
		Increase in	Decrease in	Increase in	Decrease in
		variable	variable	variable	variable
		£'000	£'000	£'000	£'000
1% movement in interest rates
Impact on interest income from cash		449	(449)	361	(361)
Impact on interest income on floating rate notes		3,068	(3,068)	3,219	(3,219)
Impact on interest payable on credit facility		(1,781)	1,781	(1,682)	1,682
Total impact on profit/(loss) after tax and shareholders' equity		1,736	(1,736)	1,898	(1,898)
Total impact as a percentage of profit/(loss) after tax		2.5%	(2.5)%	1.1%		(1.1)%
Total impact as a percentage of shareholders' equity	0.3%		(0.3)%	0.3%	(0.3)%

(vi) Fair Values of Financial Assets and Liabilities

All the financial assets of the Group are held at fair value. 

	Fair Value	Fair Value
As at 30 September	2008	2007
	£'000	£'000
Primary Financial Assets Held
Equity shares	369,388	367,903
Non-equity shares	17,324	17,289
Fixed interest securities	115,493	220,402
Floating rate securities	288,522	327,154
Cash at bank and in hand	43,780	16,948
Primary Financial Liabilities held to Finance the Group's Operations
Bank loans	158,870	160,699

The unlisted financial assets held at fair value, in accordance with the Principles of Valuation of Unlisted Equity Investments are detailed within the Basis of Accounting.

17 Share Capital

	30 Sept 2008	30 Sept 2007
	£'000	£'000
Allotted, called-up and fully paid 35,595,687 (2007: 37,252,687)
ordinary shares of 25p each	8,899	9,313
Unissued 164,404,313 (2007: 162,747,313) ordinary shares of 25p each	41,101	40,687
Authorised 200,000,000 ordinary shares of 25p each	50,000	50,000

During the year ended 30 September 2008, the Company purchased from shareholders 1,657,000 ordinary shares of 25p at prices between £15.50 and £16.40 per share. The cost of acquiring 1,657,000 ordinary shares of 25p including expenses of £155,000 amounted to £26,492,000.

18 Capital and Reserves

For the year ended 30 September 2008 for the Group

	Called-up share capital  £'000	Share premium  £'000	1 Capital  redemption reserve  £'000	2 Translation reserve £'000	3 Realised capital profits/(losses) £'000	4  Unrealised capital (losses)/ profits £'000	5 Revenue reserve £'000	Total  Shareholder funds  £'000
Opening balance at 1 October 2007	9,313	24,147	33,962	597	792,960	(141,573)	26,100	745,506
Net revenue transferred to reserves	-	-	-	-	-	-	(5,058)	(5,058)
Dividend payment	-	-	-	-	-	-	(9,149)	(9,149)
Net profits on realisation of investments during the year
	-	-	-	-	79,429	-	-	79,429
Increase in value of non-current investments	-	-	-	-	-	(125,632)	-	(125,632)
Increase in incentive provisions	-	-	-	-	-	(9,496)	-	(9,496)
Gains and losses on foreign currencies	-	-	-	437	(23,420)	14,591	-	(8,392)
Net fees	-	-	-	-	(334)	-	-	(334)
Unrealised net appreciation at 1 October 2007 on investments sold during the year	-	-	-	-	11,962	(11,962)	-	-
Repurchase of own shares	(414)	-	414	-	(26,492)	-	-	(26,492)
Tax liabilities on capital	-	-	-	-	567	-	-	567
At 30 September 2008	8,899	24,147	34,376	1,034	834,672	(274,072)	11,893	640,949

For the year ended 30 September 2007 for the Group

	Called-up share capital £'000	Share premium £'000	1 Capital redemption reserve £'000	2 Translation reserve £'000	3 Realised capital profits/ (losses)  £'000	4 Unrealised capital (losses)/ profits £'000	5 Revenue reserve £'000	Total Shareholders' funds £'000
Opening balance at 1 October 2006	9,681	24,147	33,594	(967)	645,621	(136,980)	23,196	598,292
Net revenue transferred to reserves	-	-	-	-	-	-	9,279	9,279
Dividend payment	-	-	-	-	-	-	(6,375)	(6,375)
Net profits on realisation of investments during the year
	-	-	-	-	173,745	-	-	173,745
Increase in value of non-current investments	-	-	-	-	-	53,644	-	53,644
Increase in incentive provisions	-	-	-	-	-	(57,306)	-	(57,306)
Gains and losses on foreign currencies	-	-	-	1,564	(6,153)	8,252	-	3,663
Unrealised net appreciation at 1 October 2006 on investments sold during the year	-	-	-	-	9,183	(9,183)	-	-
Repurchase of own shares	(368)	-	368	-	(22,304)	-	-	(22,304)
Tax liabilities on capital	-	-	-	-	(7,132)	-	-	(7,132)
At 30 September 2007	9,313	24,147	33,962	597	792,960	(141,573)	26,100	745,506

1 The capital redemption reserve is established by the Group on the redemption or repurchase of its own shares.

2 The translation reserve consists of foreign exchange differences arising on retranslation of the equity and reserves of subsidiaries with functional currencies other than sterling.

3 The realised capital reserve recognises all realised profits that are capital in nature or have been allocated to capital.

4 The unrealised capital reserve recognises all unrealised profits that are capital in nature or have been allocated to capital.

5 The revenue reserve shows all profits that are revenue in nature or have been allocated to revenue.

For the year ended 30 September 2008 for the Company

	Called-up share capital £'000	Share premium £'000	1 Capital redemption reserve £'000	2 Realised capital profits/ (losses)  £'000	3 Unrealised capital (losses)/ profits £'000	4 Revenue reserve £'000	Total Shareholders' funds £'000
Opening balance at 1 October 2007	9,313	24,147	33,962	805,203	(143,021)	14,715	744,319
Net revenue transferred to reserves	-	-	-	-	-	(2,888)	(2,888)
Dividend payment	-	-	-	-	-	(9,149)	(9,149)
Net profits on realisation of investments during the year
	-	-	-	77,269	-	-	77,269
Increase in value of non-current investments	-	-	-	-	(110,697)	-	(110,697)
Increase in incentive provisions	-	-	-	-	(9,496)	-	(9,496)
Gains and losses on foreign currencies	-	-	-	(23,583)	-	-	(23,583)
Net fees	-	-	-	(334)	14,591	-	14,257
Unrealised net appreciation at 1 October 2007 on investments sold during the year	-	-	-	11,962	(11,962)	-	-
Repurchase of own shares	(414)	-	414	(26,492)	-	-	(26,492)
Tax liabilities on capital	-	-	-	241	-	-	241
At 30 September 2008	8,899	24,147	34,376	844,266	(260,585)	2,678	653,781

For the year ended 30 September 2007 for the Company

	Called-up share capital £'000	Share premium £'000	1 Capital redemption reserve £'000	2 Realised capital profits/ (losses)  £'000	3 Unrealised capital (losses)/ profits £'000	4 Revenue reserve £'000	Total Shareholders' funds £'000
Opening balance at 1 October 2006	9,681	24,147	33,594	657,968	(141,960)	8,934	592,364
Net revenue transferred to reserves	-	-	-	-	-	12,156	12,156
Dividend payment	-	-	-	-	-	(6,375)	(6,375)
Net profits transferred to reserves during the year	-	-	-	169,407	-	-	169,407
Increase in value of non-current investments	-	-	-	-	57,176	-	57,176
Increase in incentive provisions	-	-	-	-	(57,306)	-	(57,306)
Gains and losses on foreign currencies	-	-	-	(1,676)	8,252	-	6,576
Unrealised net appreciation at 1 October 2006 on investments sold during the year	-	-	-	9,183	(9,183)	-	-
Repurchase of own shares	(368)	-	368	(22,304)	-	-	(22,304)
Tax liabilities on capital	-	-	-	(7,375)	-	-	(7,375)
At 30 September 2007	9,313	24,147	33,962	805,203	(143,021)	14,715	744,319

1 The capital redemption reserve is established by the Group on the redemption or repurchase of its own shares.

2 The realised capital reserve recognises all realised profits that are capital in nature or have been allocated to capital.

3 The unrealised capital reserve recognises all unrealised profits that are capital in nature or have been allocated to capital.

4 The revenue reserve shows all profits that are revenue in nature or have been allocated to revenue.

19 Contingent Liabilities and Commitments

The Company has undertaken to invest up to a further US$19,195,000 (2007: US$11,506,000) in various syndicates of investors in the USA and elsewhere.

The Company has undertaken to make further investments through various limited partnership funds in the UK and Continental Europe amounting to £100,898,000 (2007: £123,345,000).

At 30 September 2008 the Company had uncalled commitments of £1,446,000 to a limited partnership fund advised by Electra Partners (2007: £2,259,000).

As a limited partner in a number of limited partnership funds, the Company has entered into agreements with Electra Partners for the management of the Company's portfolio of investments. In consideration for this the limited partnership funds pay a priority profit share to the general partners. The management agreements are rolling contracts which now allow for termination by either party as set out in the section entitled 'Management Arrangements' above in this announcement.

20 Particulars of Holdings 

Principal Subsidiary Undertakings

All companies are incorporated in Great Britain and registered in England and Wales unless otherwise stated. All companies operate in their country of incorporation. 

Principal Subsidiary Undertakings

The results and balances of the following significant subsidiaries are included in the consolidated financial statements of the Group.

Albion (Electra) Limited (trading partnership member)

4,995 ordinary shares of US$1.00 (par value). Paid-in capital US$11,565,002.

Incorporated in the Commonwealth of the Bahamas.

The subsidiary is wholly owned and held directly by the Company

Electra Investments Limited (Investment Holding Company)

87,000 ordinary shares of £10 (par value). Paid-in capital £1,027,389. Incorporated in England and Wales.

The subsidiary is wholly owned and held directly by the Company.

Kingsway Equity Partners LP

Capital contributions of £10,705,000. Incorporated in Scotland.

The subsidiary is 99% owned and held directly by the Company.

Electra Private Equity Partners 1995 LP

Capital contributions of £9,500. Incorporated in England and Wales.

The subsidiary is 99% owned and held through Kingsway Equity Partners LP.

Electra Quoted Partners 1995 LP

Capital contributions of £120,277,699. Incorporated in England and Wales.

The subsidiary is 99% owned and held through Kingsway Equity Partners LP.

EF Private Equity Partners (Americas) LP

Capital contributions of $2,500. Incorporated in England and Wales.

The subsidiary is 99% owned and held through Kingsway Equity Partners LP.

Electra Far East LP

Capital contributions of $5,640. Incorporated in England and Wales.

The subsidiary is 99% owned and held through Kingsway Equity Partners LP.

Electra Private Equity Partners (Scotland) 

Capital contributions of £17,500,000. Incorporated in Scotland.

The subsidiary is 99% owned and held through Kingsway Equity Partners.

Electra Private Equity Partners 2001 - 2006 Scottish LP

Capital contributions of £20. Incorporated in Scotland.

The subsidiary is 99% owned and held through Kingsway Equity Partners.

Electra Private Equity Partners 2006 Scottish LP

Capital contributions of £20. Incorporated in Scotland.

The subsidiary is 99% owned and held through Kingsway Equity Partners.

Other Companies Held as Investments at Fair Value

All companies are incorporated in Great Britain and registered in England and Wales unless otherwise stated. All companies operate in their country of incorporation.

Significant Interests in Investee Undertakings

The investee fair value of the undertakings shown below each represent by value more than 1% of the non-current asset investments of the Group:

	Carrying value at		Carrying value at	Cost
	30 Sept 2007		30 Sept 2008	30 Sept 2008
	£'000		£'000	£'000
Abbey National	44,996		24,930	25,013
Accrued income	377		257
Floating rate notes 100.0%
Allflex Holdings III	41,190		45,629	40,778
Class 'A' common stock 1.9%
Class 'G' common stock 100.0%
A Warrants 98.8%
Loan notes 100.0%
Amtico Holdings	20,507		12,689	22,275
Accrued income	-		1,886
Ordinary shares 18.4%
Mezzanine loan 100.0%
Unsecured deep discount bond 24.5%
Bank of Ireland	35,005		19,970	20,015
Accrued income	259		113
Floating rate notes 100.0%
Barclays Bank	52,000	24,893		25,013
Accrued income	218	274
Floating rate notes 100.0%
Baxi Holdings	15,332	11,174		22,454
Accrued income	6,926	853
Ordinary shares 9.9%
Unsecured deep discount bond 9.9%
Candover Investments	19,836	18,649		3,751
Accrued income	211	209
Ordinary shares 3.4%
Capital Safety Group III	17,763	16,135		17,586
A PECs 13.5%		105
A Ordinary shares 12.1%
E1 Ordinary shares 12.1%
F1 Ordinary shares 12.1%
G1 Ordinary shares 12.1%
H1 Ordinary shares 12.1%
Mezzanine loan 16.7%
Dinamia (Spain)	19,947	13,198		11,274
Ordinary shares 10.4%
HBOS	45,000	54,855		50,018
Accrued income	93	318
Floating rate notes 100.0%
Labco	-	23,536		23,607
C Ordinary shares 4.6%
Lil-lets Group	26,036	21,412		21,412
Accrued income	3,168	3,279
Ordinary shares 44.6%
'B' Ordinary shares 100.0%
Warrants 44.7%
Unsecured loan notes 96.3%
Lloyds TSB	15,000	49,755		50,035
Accrued income	225	652
Floating rate notes 100.0%
London Stamford Properties	-		19,800	19,800
Accrued income			317
B Ordinary shares 7.0%
Moser Baer (India)	28,000		12,972	1,900
Ordinary shares 6.0%
Nationwide Building Society	25,000		44,958	45,023
Accrued income	247		258
Floating rate notes 100.0%
Nuaire	33,770		22,691	23,405
Ordinary shares 100.0%
'A' Ordinary shares 56.4%
'B' Ordinary shares 100.0%
'C' Ordinary shares 22.2%
Series 'A' loan notes 66.4%
Series 'B' loan notes 38.3%
PINE Unit Trust	12,210		9,900	13,750
Income units 98.4%
Capital units 98.4%
Premier Asset Management	33,108		10,329	32,642
Accrued income	293		-
Ordinary shares 37.1%
Preference shares 37.1%
Junior debt facility 100.0%
Promontoria/Forthpanel	6,541		27,683	16,481
'B' Ordinary shares 10.0%
Loan notes 10.4%
Royal Bank of Scotland	-		54,892	55,028
Accrued income			342
Floating rate notes 100.0%
SAV Credit	5,000		7,844	22,706
'A' Preferred shares 100.0%
Mezzanine Loan 100.0%
C Fixed preference shares 26.8%
Vasanta	62,532		29,197	40,530
'A' Ordinary shares 21.7%
'B' Ordinary shares 100.0%
Warrants 100.0%
Shareholder loan notes 89.8%
Volution (Vent-Axia)	16,000		15,840	15,840
Accrued income	825		903
Mezzanine loan 45.7%
Senior loan 47.1%

21 Related Party Transactions

Certain members of Electra Partners (the 'participants') are entitled under various limited partnership agreements to benefit from carried interest and co-investment arrangements. Under these schemes the participants invest in every new investment made by the Company up to 31 March 2006. In return the participants receive a percentage of the total capital and revenue profits made on each investment. The participants do not receive any profits until the Company has received back its initial investment. During the year ended 30 September 2008 the participants received £37,762,000 (2007: £1,170,000) and are entitled to receive an additional amount of £nil (2007: £28,244,000) under these schemes and had unrealised gains of £8,144,000 (2007: £13,562,000). The participants are entitled to a percentage of the incremental value of unlisted investments held at 31 March 1995, subject to the Company having received in total proceeds equal to the valuation of those investments as at 31 March 1995 and a preferred return. During the year ended 30 September 2008 the participants received £nil (2007: £nil) under the scheme and had unrealised gains of £999,000 (2007: £992,000).

Following approval at the Extraordinary General Meeting held on 12 October 2006 the participants entered two new schemes. The participants are entitled to receive a percentage of the incremental value of certain investments held at 31 March 2006 following the Company receiving total proceeds equal to the value at that date and a preferred return, after deduction of related priority profit share. During the year ended 30 September 2008 the participants received £10,110,000 (2007: £11,135,000) and had unrealised gains of £7,847,000 (2007: £12,842,000) under this scheme. The second scheme entered into under the new arrangements requires the participants to invest in every new investment made by the Company since 1 April 2006. On a pooled basis participants receive a percentage of the total capital and revenue profits once the Company has received back its initial investment, a preferred return and a related priority profit share. During the year ended 30 September 2008 the participants received £nil (2007: £nil) and had unrealised gains of £nil (2007: £nil).

As detailed in Note 23, members of Electra Partners, the Manager, are entitled to incentives based on the performance of investments in Electra. Under the arrangements relating to the management of the listed portfolio, certain executives of Electra Partners will receive bonuses over a one year period if the listed portfolio outperforms a composite index. 

No Directors of Electra participated in the above schemes.

During the year ended 30 September 2007 Electra Partners exercised its option to cancel all priority profit share reductions by paying Electra the equivalent of the net present value of the remaining expected priority profit share reductions. An amount of £1.1 million will be payable over the period to October 2009. The amount was approved by a qualified independent third party.

Net sales of investments from Electra Investments Limited to Electra amounted to £14,608,000 for the year ended 30 September 2008 (2007: £nil). Net loans advanced by Electra Investments Limited to Electra were £28,342,000 (2007: loans advanced by Electra to Electra Investments Limited of £124,941,000). Interest of £3,383,000 (2007: £5,054,000) was paid on the outstanding balance.

Net loans for working capital and/or to clear intercompany balances were made from Albion (Electra) for £418,000 

(2007: to Albion (Electra) for £746,000), to Booker Globe for £3,000 (2007: £nil), to Cloverdown Investments for £48,000 (2007: £nil), to Electra Holdings Inc for £257,000 (2007: from Electra Holdings Inc for £1,279,000), to Electra Property Inc for £282,000 (2007: £160,000), and to EUK for £10,000 (2007: £nil).

22 Deferred Tax

	Group		Company
	30 Sept 2008	30 Sept 2007	30 Sept 2008	30 Sept 2007
	£'000	£'000	£'000	£'000
Deferred tax overseas	12,317	12,701	11,751	11,751

The deferred tax position relates to overseas tax provided on unrealised gains on investment.

23 Provision for Liabilities and Charges

		Group		Company
		30 Sept 2008		30 Sept 2008
	£'000	£'000	£'000	£'000
Incentive scheme provision
At 1 October 2007	27,395		27,395
Amounts paid and payable under incentive schemes	(19,901)		(19,901)
		7,494		7,494
Incentive scheme provision
Increase in incentive scheme provision		9,496		9,496
At 30 September 2008		16,990		16,990

Current and former executives of Electra Partners are entitled to incentives based on the performance of investments in Electra. Under the current contractual terms of the Realisation Incentive Schemes, executives receive the value of any amounts that were due at 30 September 2000 and 8% on uplifts in value from that date, on a pooled basis, 10% on uplifts from 31 March 2006 valuations after a 15% preferred return and on deals invested at cost on 31 March 2006, 18% on a 3 year pooled basis on uplifts after an 8% preferred return.

Board of Directors

Sir Brian Williamson CBE

Chairman

Sir Brian is a non-executive Director of HSBC Holdings, NYSE Euronext, and of Climate Exchange plc. He is a Senior Adviser to Fleming Family & Partners. Former Chairman of The London International Financial Futures and Options Exchange, Gerrard Group, Resolution Life Group and a former non-executive Director of the Financial Services Authority and of the Court of the Bank of Ireland.

Sir Brian was appointed a Director in 1994.

Ronald Armstrong

Most of his career has been spent in companies in which the application of technology is critical to success and he has considerable experience of this process across a wide range of industries and countries. 

He is a Founder Director of E-Synergy, which specialises in venture funding for early-stage technology companies. He is Chairman of Offshield and a director of other private companies. Previously he was CEO of Pera Group and a Director of JPMorgan Fleming Worldwide Income Investment Trust and several other quoted Fleming investment trusts between 1991 and 2005. He is Chairman of the Audit Committee.

Ron Armstrong was appointed a Director in 1994.

Colette Bowe * 

An economist by profession, she has worked in Whitehall, City regulation and the fund management industry.She is currently a Director of Morgan Stanley Bank International, Axa Framlington, London and Continental Railways and a member of the Ofcom board. She is also Chairman of the Council of Queen Mary, University of London.

Colette Bowe was appointed a Director in 2007.

Michael Walton *

Has over 35 years experience of the private equity industry having joined the Electra House Group in 1972 with responsibility for unlisted investments. He was a Director of the Company from 1981 to 1986. Subsequently he was Managing Director of Gartmore Private Capital from 1987 to 1996 and was a Director of NatWest Ventures and Bridgepoint Capital. Since 1997 he has been a Consultant at Bridgepoint Capital. He has served on the Council of the British Venture Capital Association. He is Chairman of the Valuations Committee.

Michael Walton was appointed a Director in 2000.

Lucinda Webber * 

Has over 20 years experience in the private equity industry having joined Barclays Private Equity ('BPE') from Barclays Merchant Bank in 1984. She became a Director of BPE and also of Barclays Capital Dévéloppement S.A. ('BCD') in 1990. In 1997 she moved to working part-time as a Director for BPE and BCD and since 1999 she has worked as a consultant in private equity, remaining on the Barclays Ventures Investment and Valuation Committees.

Lucinda Webber was appointed a Director in 2007.

Peter Williams

Peter Williams is a Director of Xenos Group, a software company listed on the Toronto Stock Exchange and several private companies. He was formerly Chairman of RPC Group plc, a Director of Reed International and Chief Executive of David S. Smith Holdings. He is Chairman of the Remuneration and Nomination Committee and has been nominated the Senior Independent Director under the Combined Code on Corporate Governance.

Peter Williams was appointed a Director in 1994

* Member of the Valuations Committee.

All Directors are members of the Remuneration and Nomination Committee. All Directors, other than the Chairman, are members of the Audit Committee.

 

END

 

 

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