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Finsbury Emerg Bio (BIOG)

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Tuesday 06 June, 2006

Finsbury Emerg Bio

Final Results

Finsbury Emerging Biotechnology Tst
06 June 2006


                                                                    NEWS RELEASE

                                                                     6 June 2006


              Preliminary results for the year ended 31 March 2006


Finsbury Emerging Biotechnology Trust PLC today announces preliminary results
for the year ended 31 March 2006

                                    (Unaudited)           Restated
                                                         (Audited)
                                   31 March 2006      31 March 2005     % change

Shareholders' Funds (£'000)             36,556             30,449        +20.1
Net Asset Value per share                131.8p             101.2p       +30.2
Share Price                              135.5p              91.3p       +48.4
(Premium)/discount of Share Price
to Net Asset Value per share              (2.8)%              9.8%           -
NASDAQ Biotechnology Index
(sterling adjusted)                      483.7              344.3        +40.5
FTSE All Share (total return)          3,462.2            2,704.5        +28.0
Total Expense Ratio (excluding
exceptional expenses) *                    3.0%               2.6%           -

* The total expense ratio, shown above, excludes exceptional expenses of
£193,000 in 2006 and £75,000 in 2005 incurred in connection with the
identification and appointment of a new Investment Adviser.


For and on behalf of Close Finsbury Asset Management Limited - Company Secretary

6 June 2006

                                    - ENDS -



The following are attached:

   • Chairman's Statement
   • Consolidated Income Statement
   • Consolidated and Company Statement of Changes in Equity
   • Consolidated and Company Balance Sheets
   • Consolidated and Company Cash Flow Statements
   • Notes to the Financial Statements


For further information please contact:
Alastair Smith, Close Finsbury Asset Management Limited            020 7426 6240
Mark Pope, Close Finsbury Asset Management Limited                 020 7426 6294
Jo Stonier, Quill Communications                                   020 7758 2230


Chairman's Statement


PERFORMANCE

I am delighted to report a significant improvement in the Company's performance
following the change in our Investment Adviser and strategy, mentioned in my
last Chairman's Statement and approved by shareholders in May last year. During
the year ended 31 March 2006, the Company's net asset value per share rose from
101.2p to 131.8p, an increase of 30.2 per cent. The Company's benchmark, the
NASDAQ Biotechnology Index (sterling adjusted), rose by 40.5 per cent. over the
year. Much of this rise, however, occurred in the period from 1 April 2005 to 19
May 2005, i.e. prior to the adoption of the NASDAQ index as the Company's
benchmark and the implementation of the Company's new investment strategy.

For the period from 19 May 2005 to 31 March 2006, the performance delivered by
our new Investment Adviser was as follows:

Net asset value per share  +32.2%
Share price                +43.8%
Benchmark                  +29.7%

This outperformance of the benchmark is particularly notable given the costs of
the significant reorganisation of the portfolio that took place during the
period from 19 May 2005.

Overall, the Company's share price rose by 48.4 per cent. during the year. At
the end of the year the share price stood at a 2.8 per cent. premium to net
asset value per share.


EARNINGS AND DIVIDEND

Earnings per share were 30.1p for the year, comprising a revenue deficit of 1.9p
per share (2005: deficit of 1.4p) and a capital return of 32.0p (2005: deficit
of 8.8p). No dividend is recommended in respect of the year ended 31 March 2006
(2005: Nil).


PLACING AND OFFER FOR SUBSCRIPTION

At an Extraordinary General Meeting, held on 24 May 2006, the necessary
resolutions were approved by Shareholders to enable the Placing and Offer for
Subscription, announced by the Board on 28 April 2006, to proceed. I am pleased
to report that demand for the Company's shares was strong with £40.8 million
being raised and 38,172,263 new shares being issued at a premium of 2.3 per
cent. to net asset value per share. At the time of writing, the proceeds from
the issue have only just been received but they have already been invested in
the Company's investment portfolio by our Investment Adviser who has worked hard
to identify investment opportunities to take advantage of current market
weakness. Full details of how this was effected will be included in the
Company's next interim report.


DISCOUNT MANAGEMENT POLICY AND BUY-BACK AUTHORITY

The Board's confidence that the new Investment Adviser and the revised
investment objective would be attractive to new investors and would provide the
prospect of a sustained improvement in the rating of the Company's shares has
proved to be well-founded. In order to support this positive situation, the
Board has agreed to continue with its policy of active discount management and
to buy back shares if the market price is at a discount greater than 6 per cent.
to the net asset value per share. The execution and timing of any share buy-back
will continue to be at the absolute discretion of the Board. During the year a
total of 2,610,000 shares were bought back for cancellation, at an average
discount to net asset value per share of 6.2 per cent., costing £2.5 million
(excluding expenses). All of these shares were repurchased before the
appointment of the new Investment Adviser on 19 May 2005; since that date no
further share buy-backs have been necessary. Also during the year, 250,000 new
shares were issued, at a premium of 2.7 per cent. to net asset value per share,
raising a total of £335,000.


THE BOARD

I am delighted to report that Mr Sven Borho, a founding General Partner of
OrbiMed Advisors, LLC, the Company's Investment Adviser, was appointed to the
Board in March. His extensive experience in the Emerging Biotechnology sector
has already proved of great benefit to the Company.


THE COMPANY'S ARTICLES OF ASSOCIATION (the "Articles")

The Company's Articles have remained substantially unchanged since the Company's
incorporation in 1997. The Board believes that as a result of various
legislative and regulatory developments the time is now right to refresh the
Articles to bring them into line with current best practice. A Special
Resolution will be proposed at the Annual General Meeting which will, if
approved, ratify the adoption of new Articles. The material differences between
the current and the proposed Articles are summarised in a separate circular to
Shareholders.


OUTLOOK

The Board is pleased with the performance of the new Investment Adviser since
its appointment in May 2005.  After strong performance in the second half of
2005, the biotechnology sector suffered a reversal in March 2006 which has
continued through to May.  This weakness is principally due to the healthcare
sector falling out of favour with investors, combined with some disappointments
in first quarter results from several major biotechnology companies.   In
addition, the recent weakness of the US dollar has adversely affected the
sterling value of the portfolio as the majority of the Company's assets are
denominated in US dollars.  The Board takes the view that the investment policy
should be to identify the best companies in the sector without being swayed by
currency fluctuations, and it continues to believe that the prospects for
emerging biotechnology companies remain bright, particularly as long-term growth
fundamentals remain strong and as merger and acquisition activity should help
buoy performance in the sector. The Board further sees the recent market
correction as an opportunity to purchase shares in the biotechnology sector at
attractive valuations.


ANNUAL GENERAL MEETING

The Annual General Meeting of the Company will be held at 10 Crown Place, London
EC2A 4FT, on Wednesday, 19 July 2006 at 12 noon, and I hope as many Shareholders
as are able will attend. This will be an opportunity to meet the Board and to
hear a presentation from our Investment Adviser.


John Sclater
Chairman


Consolidated Income Statement
for the year ended 31 March 2006

                                        (Unaudited)              Restated (see note 6)
                                     Year ended 31                           (Audited)
                                        March 2006           Year ended 31 March 2005
                         Revenue  Capital    Total        Revenue   Capital     Total
                          return   return   Return         return    return    Return
                           £'000    £'000    £'000          £'000     £'000     £'000
       ------------------  -------  -------  -------        -------   -------   -------

Investment income
Investment income (see
note 2)                       93        -       93             75         -        75
Other income (see note
2)                            18        -       18             20         -        20
       ------------------  -------  -------  -------  ----  -------   -------   -------
Total income                 111        -      111             95         -        95

Gains and losses on
investments
Gains/(losses) on
investments held at
fair value through
profit or loss                 -    9,774    9,774              -    (2,218)   (2,218)
Exchange losses on
currency balances              -     (207)    (207)             -       (31)      (31)
Expenses
Investment management
fees (see note 3)              -     (752)    (752)             -      (391)     (391)
Other expenses              (605)       -     (605)          (508)        -      (508)
       ------------------  -------  -------  -------        -------   -------   -------
(Loss)/profit before
finance costs and
taxation                    (494)   8,815    8,321           (413)   (2,640)   (3,053)
       ------------------  -------  -------  -------  ----  -------   -------   -------
Finance costs                (16)     (21)     (37)            (8)        -        (8)
       ------------------  -------  -------  -------  ----  -------   -------   -------
(Loss)/profit before
taxation                    (510)   8,794    8,284           (421)   (2,640)   (3,061)
       ------------------  -------  -------  -------  ----  -------   -------   -------
Taxation                       -        -        -             (2)        -        (2)
       ------------------  -------  -------  -------        -------   -------   -------
(Loss)/profit for the
year                        (510)   8,794    8,284           (423)   (2,640)   (3,063)
       ------------------  -------  -------  -------  ----  -------   -------   -------
Earnings/(loss) per
Ordinary share (see
note 4)                     (1.9)p   32.0p    30.1p          (1.4)p    (8.8)p   (10.2)p
       ------------------  -------  -------  -------  ----  -------   -------   -------

The total column of this statement represents the Group's Income Statement,
prepared in accordance with International Financial Reporting Standards (IFRS).
The revenue return and capital return columns are supplementary to this and are
prepared under guidance published by the Association of Investment Trust
Companies. All items in the above statement derive from continuing operations.


All income is attributable to the equity holders of Finsbury Emerging
Biotechnology Trust PLC, the parent Company. There are no minority interests.


Consolidated and Company Statement of Changes in Equity
for the year ended 31 March 2006

----------------                                -----------------------------------
                                                               Group
                                                     year ended 31 March 2006
----------------                                -----------------------------------
                    Ordinary                                   Capital                    
                       Share         Share         Special  Redemption          Capital       Retained   
                     Capital       Premium         Reserve     Reserve          Reserve       Earnings     Total
                       £'000         £'000           £'000       £'000            £'000          £'000     £'000
----------------     -------       -------          ------    --------           ------        -------    ------
At 31 March 2005 
(as restated)    
(see note 6)           7,525             -          21,679           -            2,414         (1,169)   30,449
Net profit/(loss)
for the year               -             -               -           -            8,794           (510)    8,284
Buyback of
Ordinary shares         (653)            -          (2,512)        653                -              -    (2,512)
Issue of
Ordinary shares           63           272               -           -                -              -       335
----------------     -------       -------          ------    --------           ------        -------    ------
At 31 March 2006       6,935           272          19,167         653           11,208         (1,679)   36,556
----------------     -------       -------          ------    --------           ------        -------    ------


----------------                                -----------------------------------
                                                              Company
                                                     year ended 31 March 2006
----------------                                -----------------------------------
                    Ordinary                                   Capital                    
                       Share         Share         Special  Redemption          Capital       Retained   
                     Capital       Premium         Reserve     Reserve          Reserve       Earnings     Total
                       £'000         £'000           £'000       £'000            £'000          £'000     £'000
----------------     -------       -------          ------    --------           ------        -------    ------
At 31 March 2005 
(as restated)          7,525             -          21,679           -            2,407         (1,162)   30,449
Net profit/(loss)
for the year               -             -               -           -            8,794           (510)    8,284
Buyback of
Ordinary shares         (653)            -          (2,512)        653                -              -    (2,512)
Issue of Ordinary
shares                    63           272               -           -                -              -       335
----------------     -------       -------          ------    --------           ------        -------    ------
At 31 March 2006       6,935           272          19,167         653           11,201         (1,672)   36,556
----------------     -------       -------          ------    --------           ------        -------    ------


----------------                                -----------------------------------
                                                               Group
                                                     year ended 31 March 2005
----------------                                -----------------------------------
                    Ordinary                                   Capital                    
                       Share         Share         Special  Redemption          Capital       Retained   
                     Capital       Premium         Reserve     Reserve          Reserve       Earnings     Total
                       £'000         £'000           £'000       £'000            £'000          £'000     £'000
----------------     -------       -------          ------    --------           ------        -------    ------
At 31 March 2004 
(as restated)          
(see note 7)           7,525             -          21,679           -            5,054           (746)   33,512
Net loss for
the year                   -             -               -           -           (2,640)          (423)   (3,063)
----------------     -------       -------          ------    --------           ------        -------    ------
At 31 March 2005       7,525             -          21,679           -            2,414         (1,169)   30,449
----------------     -------       -------          ------    --------           ------        -------    ------


----------------                                -----------------------------------
                                                              Company
                                                     year ended 31 March 2005
----------------                                -----------------------------------
                    Ordinary                                   Capital                    
                       Share         Share         Special  Redemption          Capital       Retained   
                     Capital       Premium         Reserve     Reserve          Reserve       Earnings     Total
                       £'000         £'000           £'000       £'000            £'000          £'000     £'000
----------------     -------       -------          ------    --------           ------        -------    ------
At 31 March 2004 
(as restated)          7,525             -          21,679           -            5,046           (738)   33,512
Net loss for
the year                   -             -               -           -           (2,639)          (424)   (3,063)
----------------     -------       -------          ------    --------           ------        -------    ------
At 31 March 2005       7,525             -          21,679           -            2,407         (1,162)   30,449
----------------     -------       -------          ------    --------           ------        -------    ------


Consolidated and Company Balance Sheets
as at 31 March 2006
                                                                       Restated (see note 1)
                            (Unaudited)        (Unaudited)           (Audited)         (Audited)
                                  Group            Company               Group           Company
                          31 March 2006      31 March 2006       31 March 2005     31 March 2005
                                  £'000              £'000               £'000             £'000
--------------------           --------           --------            --------        ----------
Non current assets
Investments held at fair
value through
profit or loss                   37,043             37,043              30,403            30,403

Current assets
Other receivables                 1,295              1,302                  39                46
Cash and cash
equivalents                         729                729                 301               301
--------------------           --------           --------            --------        ----------
                                  2,024              2,031                 340               347
--------------------           --------           --------            --------        ----------

Total assets                     39,067             39,074              30,743            30,750

Current liabilities
Other payables                    1,362              1,369                 294               301
Bank overdrafts                   1,149              1,149                   -                 -
--------------------           --------           --------            --------        ----------
                                  2,511              2,518                 294               301
--------------------           --------           --------            --------        ----------
Net assets                       36,556             36,556              30,449            30,449
--------------------           --------           --------            --------        ----------
Equity attributable
to equity holders
Ordinary share capital            6,935              6,935               7,525             7,525
Share premium                       272                272                   -                 -
Special reserve                  19,167             19,167              21,679            21,679
Capital redemption
reserve                             653                653                   -                 -
Capital reserve                  11,208             11,201               2,414             2,407
Retained earnings                (1,679)            (1,672)             (1,169)           (1,162)
--------------------           --------           --------            --------        ----------
Total equity                     36,556             36,556              30,449            30,449
--------------------           --------           --------            --------        ----------

Net asset value per
Ordinary share                    
(see note 5)                      131.8p             131.8p              101.2p            101.2p



Consolidated and Company Cash Flow Statements
for the year ended 31 March 2006
                                                                        Restated (See note 1)
                            (Unaudited)        (Unaudited)          (Audited)         (Audited)
                                  Group            Company              Group           Company
                          31 March 2006      31 March 2006      31 March 2005     31 March 2005
                                  £'000              £'000              £'000             £'000
--------------------           --------           --------          ---------        ----------

Operating activities
Profit/(loss) before tax          8,284              8,284             (3,061)           (3,061)
Add back interest paid               37                 37                  8                 8
Less: (loss)/gain on
investments held at fair
value through
profit or loss                   (9,567)            (9,567)             2,249             2,249
Net sales of investments
held at fair value 
through profit or loss            2,979              2,979                990               990
Decrease in other
receivables                          22                 22                  3                 3
(Decrease)/increase 
in other payables                   (62)               (62)                99                99
--------------------           --------           --------          ---------        ----------

Net cash inflow from
operating activities
before interest and
taxation                          1,693              1,693                288               288
--------------------           --------           --------          ---------        ----------

Interest paid                       (37)               (37)                (8)               (8)
Tax on overseas
income                                1                  1                 (2)               (2)
--------------------           --------           --------          ---------        ----------
Net cash inflow from
operating activities              1,657              1,657                278               278
--------------------           --------           --------          ---------        ----------

Financing activities
Issue of Ordinary
shares                              335                335                  -                 -
Buy-backs of Ordinary
shares                           (2,512)            (2,512)                 -                 -
--------------------           --------           --------          ---------        ----------

Net cash outflow from
financing                        (2,177)            (2,177)                 -                 -
--------------------           --------           --------          ---------        ----------

(Decrease)/increase 
in cash and cash
equivalents                        (520)              (520)               278               278
Cash and cash
equivalents at
start of year                       301                301                 54                54
Effect of foreign
exchange rate
changes                            (201)              (201)               (31)              (31)
--------------------           --------           --------          ---------        ----------

Cash and cash
equivalents at
end of year                        (420)              (420)               301               301
--------------------           --------           --------          ---------        ----------


Notes to the Financial Statements


1 Accounting Policies

The financial statements of the Company and the Group have been prepared in
accordance with International Financial Reporting Standards ("IFRS"). These
comprise standards and interpretations by the International Accounting Standards
Board ("IASB"), together with interpretations of the International Accounting
Standards and Standing Interpretations Committee approved by the International
Accounting Committee ("IASC") that remain in effect, to the extent that IFRS
have been adopted by the European Union. The disclosures required by IFRS 1
concerning the transition from UK GAAP to IFRS are given in notes 6 and 7.


(a) Accounting Convention

The financial statements have been prepared under the historical cost
convention, except where stated in (b) and (c) below. Where presentational
guidance set out in the revised Statement of Recommended Practice (the "SORP")
for Investment Trust Companies produced by the Association of Investment Trust
Companies ("AITC") dated December 2005 is consistent with the requirements of
IFRS, the Directors have sought to prepare the financial statements on a basis
compliant with the recommendations of the SORP.


(b) Basis of Consolidation

The consolidated financial statements comprise the accounts of the Company and
its subsidiary undertaking made up to 31 March 2006. In the Company's financial
statements, the investment in its subsidiary is stated at fair value.


(c) Accounting Policy

The Company has changed its accounting policy for the valuation of listed
investments and the recognition of dividends payable to equity shareholders in
accordance with provisions of IAS 39 Financial Instruments: Recognition and
Measurement and IAS 10 Events after the Balance Sheet date. These changes in
policy and the associated impact on the results of the Company are referred to
below.


(d) Investments

Investments are recognised and derecognised on the trade date where a purchase
or sale is under a contract whose terms require delivery within the timeframe
established by the market concerned, and are initially measured at fair value.

Investments have been designated by the Board as held at fair value through
profit or loss and accordingly are valued at fair value, deemed to be bid market
prices. As the business of the Company and the Group is investing in financial
assets with a view to profiting from their total return in the form of interest,
dividends or increases in fair value, listed equities and fixed interest income
securities are designated as fair value through profit or loss on initial
recognition. The Company and the Group manage and evaluate the performance of
these investments on a fair value basis in accordance with the investment
strategy, and information about the Company and the Group is provided internally
on this basis to the Board.

Financial assets designated as at fair value through profit or loss, which are
quoted investments, are measured at subsequent reporting dates at fair value,
which is either the bid or the last trade price, depending on the convention of
the exchange on which it is quoted.

In respect of unquoted investments, or where the market for a financial
instrument is not active, fair value is established by using valuation
techniques, which may include using recent arm's length market transactions
between knowledgeable, willing parties, if available, reference to the current
fair value of another instrument that is substantially the same, discounted cash
flow analysis and option pricing models. Where there is a valuation technique
commonly used by market participants to price the instruments and that technique
has been demonstrated to provide reliable estimates of prices obtained in actual
market transactions, that technique is utilised.

On disposal, realised gains and losses are also recognised in the Income
Statement.

In accordance with IAS 39 the total transaction costs for the year were £209,000
(31 March 2005:£91,000) broken down as follows: purchase transaction costs for
the year to 31 March were £119,000, (31 March 2005: £51,000), sale transaction
costs were £90,000 (31 March 2005: £40,000). These costs comprise mainly stamp
duty and commission.


(e) Presentation of Income Statement

In order to better reflect the activities of an investment trust company and in
accordance with guidance issued by the AITC, supplementary information which
analyses the Income Statement between items of a revenue and capital nature has
been presented alongside the Income Statement. In accordance with the Company's
status as a UK investment company under section 266 of the Companies Act 1985,
net capital returns may not be distributed by way of a dividend. Additionally,
the net revenue is the measure the Directors believe appropriate in assessing
the Group's compliance with certain requirements set out in section 842 of the
Income and Corporation Taxes act 1988.


(f) Income

Dividends receivable on equity shares are recognised on the ex-dividend date.
Where no ex-dividend date is quoted, dividends are recognised when the Company's
right to receive payment is established.

Dividends and interest on investments in unquoted shares and securities are
recognised when they become receivable.

Fixed returns on non-equity shares are recognised on a time apportionment basis
so as to reflect the effective yield, provided there is no reasonable doubt that
payment will be received in due course.

Underwriting commission is recognised as income in so far as it relates to
shares not required to be taken up. Where a proportion of the shares
underwritten are required to be taken up the same proportion of commission
received is treated as a deduction from the cost of the shares taken up, with
the balance being taken to the Income Statement and allocated to revenue.


(g) Expenses and Finance Costs

All expenses are accounted for on an accruals basis. Expenses are charged
through the income statement except as follows:

(i) expenses which are incidental to the acquisition or disposal of an
investment are charged to the income statement and allocated to the capital
reserve;

(ii) expenses are charged to the income statement and allocated to the capital
reserve where a connection with the maintenance or enhancement of the value of
the investments can be demonstrated and accordingly;

(iii) investment management fees and related irrecoverable VAT are charged to
the income statement and allocated to the capital reserve as the Directors
expect that in the long term virtually all of the Company's returns will come
from capital; and

(iv) Loan interest is charged to the income statement and allocated to capital
as the Directors expect that in the long term virtually all of the Company's
returns will come from capital.


(h) Taxation

The payment of taxation is deferred or accelerated because of timing differences
between the treatment of certain items for accounting and taxation purposes.
Full provision for deferred taxation is made under the liability method on all
timing differences that have arisen, but not reversed by the Balance Sheet date,
unless such treatment is not permitted by International Accounting Standard 12.

In line with the recommendations of the SORP, the allocation method used to
calculate tax relief on expenses presented against capital returns in the
supplementary information in the income statement is the "marginal basis".

Under this basis, if taxable income is capable of being offset entirely by
expenses presented in the revenue column of the income statement, then no tax
relief is transferred to the capital return column.


(i) Foreign Currencies

The currency of the primary economic environment in which the Company operates
(the functional currency) is pounds sterling ("Sterling"), which is also the
presentational currency of the Group. Transactions involving currencies other
than Sterling, are recorded at the exchange rate ruling on the transaction date.
At each balance sheet date, monetary items and non-monetary assets and
liabilities that are fair valued, which are denominated in foreign currencies,
are retranslated at the closing rates of exchange.

Exchange differences arising on settlement of monetary items and from
retranslating at the Balance Sheet date:

- Investments and other financial instruments measured at fair value through
  profit or loss, and

- other monetary items,

are included in the Income Statement and allocated as capital if they are of a
capital nature, or as revenue of they are of a revenue nature. Exchange
differences allocated as capital are included in the transfer to the Capital
Reserve.

Transactions denominated in foreign currencies are recorded in the local
currency at the actual exchange rates as at the date of transaction. Monetary
assets and liabilities denominated in foreign currencies at the year end are
reported at the rate of exchange prevailing at the year end. Any gain or loss
arising from a change in exchange rates subsequent to the date of the
transaction is included as an exchange gain or loss in the capital reserve or in
the revenue account depending on whether the gain is of a capital or revenue
nature.


(j) Reserves

Capital Reserves

The following are charged or credited in the Income Statement and then
transferred to the Capital Reserve:

• gains and losses on the realisation of investments

• realised exchange differences of a capital nature

• expenses charged to this reserve in accordance with the above referred
  policies

• increases and decreases in the valuation of investments held at the year end

• unrealised exchange differences of a capital nature


2 Income
                                                (Unaudited)          (Audited)
                                                       2006               2005
                                                      £'000              £'000
                                                   ----------         ----------
Income from listed investments                           91                 54
Unfranked interest                                        -                  8
Franked dividends                                         2                 13
Overseas dividends
                                                   ----------         ----------
                                                         93                 75
                                                   ----------         ----------
Other operating income                                   18                 13
Interest receivable                                       -                  7
Other income
                                                   ----------         ----------
                                                         18                 20
---------------------                              ----------         ----------
Total Income                                            111                 95
---------------------                              ----------         ----------

Total income comprises:
Dividends                                                 2                 21
Interest                                                109                 67
Other income                                              -                  7
---------------------                              ----------         ----------
                                                        111                 95
---------------------                              ----------         ----------


3 Investment Management Fee

                                (Unaudited)                       (Audited)
                    Revenue  Capital  Total         Revenue  Capital  Total
                     2006     2006     2006          2005     2005     2005
                    £'000    £'000    £'000         £'000    £'000    £'000
-----------         -------  -------  -------       -------  -------  -------

Periodic fee            -      519      519             -      336      336
Performance fee         -      168      168             -        -        -
Irrecoverable VAT
thereon                 -       65       65             -       55       55
-----------         -------  -------  -------       -------  -------  -------
           Total        -      752      752             -      391      391
       -----------  -------  -------  -------  ---  -------  -------  -------


4 Earnings per Ordinary share

Total earnings per Ordinary share of 30.1p is based on total earnings
attributable to equity shareholders of £8,284,000 (2005: £3,063,000 loss).

Revenue loss per Ordinary share of 1.9p is based on the revenue loss
attributable to equity shareholders of £510,000 (2005: £423,000 loss).

Capital gain per Ordinary share of 32.0p is based on the capital gain
attributable to equity shareholders of £8,794,000 (2005: £2,640,000 loss as
restated).

Total earnings, revenue loss and capital gain per share are based upon the
weighted average number of Ordinary shares throughout the year of 27,490,000
(2005: 30,100,000).


5 Net Asset Value per Ordinary share

The net asset value per Ordinary share is based on the net assets attributable
to equity shareholders of £36,556,000 (2005: £30,449,000 as restated) and on
27,740,000 (2005: 30,100,000) Ordinary shares in issue at 31 March 2006.


6 Restatement of Balances as at and for the year ended 31 March 2005

At 1 April 2005 the Company adopted International Financial Reporting Standards.
In accordance with IFRS 1 (First Time Adoption of Financial Reporting Standards)
the following is a reconciliation of the results as at and for the year ended 31
March 2005, previously reported under the applicable UK Accounting Standards and
the SORP, to the restated IFRS results.


(a) Reconciliation of the Balance Sheet as at 31 March 2005

-------------------            -----------         -----------       -----------
                                 (Audited)         Effect of       Restated 31
                                Previously     transition to        March 2005
                               reported 31              IFRS             £'000
                                March 2005
                                     £'000             £'000
-------------------            -----------         -----------       -----------
Investments (see 1 below)         30,492                 (89)           30,403
Current assets                       340                   -               340
Creditors: amounts falling 
due within one year                 (294)                  -              (294)
-------------------            -----------         -----------       -----------
Total assets less current
liabilities                       30,538                 (89)           30,449
-------------------            -----------         -----------       -----------
Capital and reserves
Called up share capital
Ordinary shares                    7,525                   -             7,525
Special reserve                   21,679                   -            21,679
Capital reserve -
realised                           3,772              (3,772)                -
Capital reserve -
unrealised                        (1,269)              1,269                 -
Capital reserve (see 
1 below)                               -               2,414             2,414
Revenue reserve                   (1,169)                  -            (1,169)
-------------------            -----------         -----------       -----------
                                  30,538                 (89)           30,449
-------------------            -----------         -----------       -----------


Note to the reconciliation

1 Investments are classified as held at fair value under IFRS and are carried at
bid prices which total their fair value of £30,403,000. Previously, under UK
GAAP, they were carried at mid prices.


(b) Reconciliation of the Statement of Total Return to the Income Statement for
the period ended 31 March 2005

Under IFRS the Income Statement is the equivalent of the Statement of Total
Return as reported previously.

----------------------------                           ----------    -----------
                                                           2005       EPS Impact
                                                                           Pence
                                                          £'000
----------------------------                           ----------    -----------
Total transfer from reserve per Statement of Total
Return                                                   (3,079)             -
Change from mid to bid basis at 31 March 2004
(see 1 below)                                               105           0.35
Change from mid to bid basis at 31 March 2005 (see 1
below)                                                      (89)         (0.30)
----------------------------                           ----------    -----------
Net loss per Income Statement                            (3,063)          0.05
----------------------------                           ----------    -----------


Note to the reconciliation

1 The portfolio valuation at 31 March 2004 and 31 March 2005 are required to be
valued at fair value under IFRS. Using this basis, there will be a reduction
from the previous valuation of £105,000 and £89,000 respectively.


(c) Reconciliation of the Cash Flow Statement for the year ended 31 March 2005

-------------------          -----------        -----------        -----------
                               (Audited)          Effect of      Adjusted cash
                              Previously      transition to         flows 2005
                           reported cash               IFRS              £'000
                              flows 2005
                                   £'000              £'000
-------------------          -----------        -----------        -----------
Net cash outflow from
operating activities
(see 1 below)                       (705)                (7)              (712)
Returns on investments
and servicing of finance
(see 1 below)                         (8)                 8                  -
Taxation (see 1 below)                 1                 (1)                 -
Net cash inflow from
financial investment                 990                  -                990
-------------------          -----------        -----------        -----------
Net cash inflow before
financing                            278                  -                278
Financing (see 1 below)                -                  -                  -
-------------------          -----------        -----------        -----------
Increase in cash                     278                  -                278
-------------------          -----------        -----------        -----------


Note to the reconciliation

1 Servicing of finance and taxation have now been analysed within operating
activities.


7 Restatement of Opening Balances as at 31 March 2004

At 1 April 2005 the Company adopted International Financial Reporting Standards.
In accordance with IFRS 1 (First Time Adoption of Financial Reporting Standards)
the following is a reconciliation of the results as at and for the year ended 31
March 2004, previously reported under the applicable UK Accounting Standards and
the SORP, to the restated IFRS results.

-------------------          -----------         -----------       -----------
                               (Audited)           Effect of       Restated 31
                              Previously       transition to        March 2004
                             reported 31                IFRS             £'000
                              March 2004
                                   £'000               £'000
-------------------          -----------         -----------       -----------
Investments
(see 1 below)                     33,748                (105)           33,643
Current assets                       331                   -               331
Creditors: amounts
falling due within 
one year                            (462)                  -              (462)
-------------------          -----------         -----------       -----------
Total assets less 
current liabilities               33,617                (105)           33,512
-------------------          -----------         -----------       -----------
Capital and reserves
Called up share capital
Ordinary shares                    7,525                   -             7,525
Special reserve                   21,679                   -            21,679
Capital reserve -
realised                           8,079              (8,079)                -
Capital reserve -
unrealised                        (2,920)              2,920                 -
Capital reserve                        -               5,054             5,054
(see 1 below)
Revenue reserve                     (746)                  -              (746)
-------------------          -----------         -----------       -----------
                                  33,617                (105)           33,512
-------------------          -----------         -----------       -----------


Note to the reconciliation

1 Investments are classified as held at fair value under IFRS and are carried at
bid prices which total their fair value of £33,643,000. Previously, under UK
GAAP, they were carried at mid prices.


8 Comparative information

This preliminary statement is not the Company's statutory accounts. The above
results for 2006 have been agreed with the Auditors and are an abridged version
of the Company's full draft accounts, which have not yet been approved, audited
or filed with the Registrar of Companies. The 2006 accounts have been prepared
in accordance with International Financial Reporting Standards ("IFRS"). Certain
figures for the prior year have been restated to reflect policy changes arising
out of the adoption of IFRS.

The statutory accounts for the year end 31 March 2005 have been delivered to the
Registrar of Companies and those for 31 March 2006 will be despatched to
shareholders shortly. The 2005 accounts received an audit report, which was
unqualified and did not contain statements under Section 237 (2) and (3) of the
Companies Act 1985.


Close Finsbury Asset Management Limited
Company Secretary

6 June 2006

                                    - ENDS -



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