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Gartmore Balanced (GTB)

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Thursday 23 October, 2003

Gartmore Balanced

Final Results


STOCK EXCHANGE ANNOUNCEMENT

GARTMORE BALANCED ASSETS TRUST PLC

(FORMERLY GARTMORE SPLIT CAPITAL OPPORTUNITIES TRUST PLC)

RESULTS FOR THE YEAR TO 31st JULY 2003

------------------------------------------

The Directors announce the Group's unaudited results for the year to 31st July
2003.

GROUP TOTAL RETURN (UNAUDITED)

------------------------------------

                                               YEAR TO 31 JULY 2003         

                                           REVENUE      CAPITAL        TOTAL
                                                                            
                                                                      RETURN
                                                                            
                                             £'000        £'000        £'000
                                                                            
INCOME AND CAPITAL PROFITS/(LOSSES)                                         
                                                                            
Dividends and other income                   2,179            -        2,179
                                                                            
Net loss on investments                          -      (4,420)      (4,420)
                                                                            
                                            ------       ------       ------
                                                                            
RETURN BEFORE EXPENSES, FINANCE              2,179      (4,420)      (2,241)
                                                                            
COSTS AND TAXATION                                                          
                                                                            
EXPENSES                                                                    
                                                                            
Management fees                               (65)         (98)        (163)
                                                                            
Other expenses                               (546)           23        (523)
                                                                            
                                            ------       ------       ------
                                                                            
RETURN BEFORE FINANCE COSTS                  1,568      (4,495)      (2,927)
                                                                            
AND TAXATION                                                                
                                                                            
                                            ------       ------       ------
                                                                            
FINANCE COSTS                                                               
                                                                            
Interest payable                             (354)        (532)        (886)
                                                                            
                                            ------       ------       ------
                                                                            
RETURN BEFORE TAXATION                       1,214      (5,027)      (3,813)
                                                                            
TAXATION                                         -            -            -
                                                                            
                                            ------       ------       ------
                                                                            
RETURN AFTER TAXATION                        1,214      (5,027)      (3,813)
                                                                            
NON EQUITY MINORITY INTEREST                     -        3,813        3,813
                                                                            
                                            ------       ------       ------
                                                                            
TRANSFERRED TO/(FROM) RESERVES               1,214      (1,214)            -
                                                                            
                                            ------       ------       ------
                                                                            
TOTAL RETURN PER ORDINARY SHARE               2.6p       (2.6)p            -
                                                                            
                                              ====         ====         ====

GROUP TOTAL RETURN COMPARATIVE (AUDITED)

------------------------------------------------

                                          YEAR TO 31 JULY 2002 (Restated)   

                                           REVENUE      CAPITAL        TOTAL
                                                                            
                                                                      RETURN
                                                                            
                                             £'000        £'000        £'000
                                                                            
INCOME AND CAPITAL PROFITS/(LOSSES)                                         
                                                                            
Dividends and other income                   5,077           54        5,131
                                                                            
Net loss on investments                          -     (37,016)     (37,016)
                                                                            
                                            ------    ---------    ---------
                                                                            
RETURN BEFORE EXPENSES,                      5,077     (36,962)     (31,885)
                                                                            
FINANCE COSTS AND TAXATION                                                  
                                                                            
                                            ------    ---------    ---------
                                                                            
EXPENSES                                                                    
                                                                            
Management fees                              (150)        (225)        (375)
                                                                            
Other expenses                               (335)        (200)        (535)
                                                                            
                                            ------       ------       ------
                                                                            
RETURN BEFORE FINANCE COSTS                  4,592     (37,387)     (32,795)
                                                                            
AND TAXATION                                                                
                                                                            
                                            ------       ------       ------
                                                                            
FINANCE COSTS                                                               
                                                                            
Interest payable                             (628)        (941)      (1,569)
                                                                            
                                            ------       ------       ------
                                                                            
RETURN BEFORE TAXATION                       3,964     (38,328)     (34,364)
                                                                            
TAXATION                                      (77)           77            -
                                                                            
                                            ------       ------       ------
                                                                            
RETURN AFTER TAXATION                        3,887     (38,251)     (34,364)
                                                                            
NON EQUITY MINORITY INTEREST                     -       18,762       18,762
                                                                            
                                            ------       ------       ------
                                                                            
RETURN TO EQUITY SHAREHOLDERS                3,887     (19,489)     (15,602)
                                                                            
APPROPRIATED TO                                                             
                                                                            
EQUITY SHAREHOLDERS                                                         
                                                                            
Dividends - Ordinary shares                (1,376)            -      (1,376)
                                                                            
                                            ------       ------       ------
                                                                            
TRANSFERRED TO/(FROM) RESERVES               2,511     (19,489)     (16,978)
                                                                            
                                            ------       ------       ------
                                                                            
TOTAL RETURN PER ORDINARY SHARE               8.5p      (42.5)p      (34.0)p
                                                                            
                                              ====      =======      =======

The Revenue column shown above represents the Revenue Account of the Group.

Management fees and finance costs of Gartmore Balanced Assets Trust PLC are
allocated 40% to revenue and 60% to capital.

Group revenue return per Ordinary share has been calculated on the return to
equity shareholders of £1,214,000 (2002: £3,887,000) and 45,877,600 (2002:
45,877,600) Ordinary shares in issue throughout the period.

Group capital return per Ordinary Share has been calculated on the adverse
return for the period of £1,214,000 (2002: £19,489,000) and 45,877,600 (2002:
45,877,600) Ordinary shares in issue throughout the period.

GROUP BALANCE SHEET                                            AT           AT
                                                                              
-----------------------                                  31-07-03     31-07-02
                                                                              
                                                            £'000        £'000
                                                                              
FIXED ASSETS                                                                  
                                                                              
Listed investments                                              -      *26,881
                                                                              
                                                          -------      -------
                                                                              
                                                                -       26,881
                                                                              
CURRENT ASSETS                                                                
                                                                              
Listed investments                                       **23,332            -
                                                                              
Debtors: Amounts receivable within one year                   285        1,780
                                                                              
Cash at bank                                                3,074        1,845
                                                                              
                                                          -------      -------
                                                                              
                                                           26,691        3,625
                                                                              
Creditors: Amounts falling due within one year           (13,636)        (438)
                                                                              
                                                          -------      -------
                                                                              
NET CURRENT ASSETS                                         13,055        3,187
                                                                              
                                                          -------      -------
                                                                              
TOTAL ASSETS LESS CURRENT LIABILITIES                      13,055       30,068
                                                                              
Creditors: Amounts falling due after more than                  -     (13,200)
                                                                              
one year                                                                      
                                                                              
                                                          -------      -------
                                                                              
NET ASSETS                                                 13,055       16,868
                                                                              
                                                            =====        =====
                                                                              
CAPITAL AND RESERVES                                                          
                                                                              
Called-up share capital                                       459          459
                                                                              
Special reserve                                            42,509       42,509
                                                                              
Capital reserve - realised                               (21,144)        1,516
                                                                              
Capital reserve - unrealised                             (26,851)     (48,297)
                                                                              
Revenue reserve                                             5,027        3,813
                                                                              
                                                          -------      -------
                                                                              
EQUITY SHAREHOLDERS'FUNDS                                       -            -
                                                                              
Non equity minority interest entitlement                   13,055       16,868
                                                                              
                                                          -------      -------
                                                                              
CAPITAL EMPLOYED                                           13,055       16,868
                                                                              
                                                            =====        =====
                                                                              
NET ASSET VALUE PER SHARE (AS PER ARTICLES):                                  
                                                                              
ORDINARY SHARES                                                 -            -
                                                                              
ZERO DIVIDEND PREFERENCE SHARES                             40.8p        52.8p
                                                                              

* Listed Investments stated at mid-market prices

** Listed investments stated at their net realisable values based on bid
prices.

NOTES:

1. The Net Asset Values are calculated as per Articles basis as follows:

(i) Per Ordinary Share - on net assets of £nil (2002: nil) and 45,877,600
(2002: 45,877,600) shares in issue at the year-end.

(ii) Per GBAT Securities PLC Zero Dividend Preference (ZDP) share - on assets
of £13,055,000 (2002: £16,868,000) and 31,971,646 (2002: 31,971,646) shares in
issue.

2. The company can only continue in operational existence past 1 November 2004
if either the investments of the Group generate a return in excess of 95.1% per
annum in the period to 1 November 2004, or prior to that date the ZDP
shareholders formally vote in favour of a proposal to re-structure their
obligations such that their final entitlement does not mature on 1 November
2004.

Given the extremely high hurdle rate and the impending ZDP repayment date the
directors believe it is appropriate for the financial statements to be prepared
on a break-up basis. Consequently the Company's investments have been stated at
their net realisable values and provision has been made for winding-up costs.

3. The accounts have been prepared in accordance with the revised Statement of
Recommended Practice for the Financial Statements of Investment Trust Companies
(SORP) issued in January 2003. Treatment of the Minority Interest in the Group
statements varies under the SORP from the treatment under FRS4 last year. In
particular the value of assets attributable to Minority Interest is limited to
the assets available whereas previously the predetermined entitlement was
attributed. Specifically, Equity Shareholders' interest at 31 July 2002
increased from a deficiency of £22,112,000 in last year's accounts to NIL
whereas the minority interest reduced from £38,980,000 to £16,868,000. At 31
July 2003 the Equity Shareholders' interest would have been show as a
deficiency of £29,591,000 and Minority Interest as £42,646,000 under FRS4
rather than NIL and of £13,055,000 respectively as shown in these accounts.

GROUP STATEMENT OF CASH FLOWS                                                 
                                                                              
------------------------------------                                          
                                                                              
                                                          Year to      Year to
                                                                              
                                                         31-07-03     31-07-02
                                                                              
                                                            £'000        £'000
                                                                              
OPERATING ACTIVITIES                                                          
                                                                              
Net dividends and interest received                         2,034        5,187
                                                                              
from investments                                                              
                                                                              
Interest received on deposits                                 143          136
                                                                              
Other income                                                    6           15
                                                                              
Expenses paid allocated to revenue                          (395)        (490)
                                                                              
Expenses paid allocated to capital                          (244)        (223)
                                                                              
                                                          -------      -------
                                                                              
Net cash inflow from operating activities                   1,544        4,625
                                                                              
                                                          -------      -------
                                                                              
SERVICING OF FINANCE                                                          
                                                                              
Interest paid                                               (940)      (1,579)
                                                                              
Dividends paid                                                  -      (2,638)
                                                                              
                                                          -------      -------
                                                                              
Net cash outflow from servicing of finance                  (940)      (4,217)
                                                                              
                                                          -------      -------
                                                                              
TAXATION                                                                      
                                                                              
Income tax recovered                                            -          110
                                                                              
                                                          -------      -------
                                                                              
FINANCIAL INVESTMENT                                                          
                                                                              
Acquisitions of investments                               (8,802)     (17,405)
                                                                              
Disposals of investments                                    9,427       20,943
                                                                              
                                                          -------      -------
                                                                              
                                                              625        3,538
                                                                              
                                                          -------      -------
                                                                              
Cash inflow before management of liquid resources           1,229        4,056
and financing                                                                 
                                                                              
                                                          -------      -------
                                                                              
FINANCING                                                                     
                                                                              
Bank Loans                                                      -      (6,000)
                                                                              
                                                          -------      -------
                                                                              
Net cash outflow from financing                                 -      (6,000)
                                                                              
                                                          -------      -------
                                                                              
NET CASH INFLOW/OUTFLOW                                     1,229      (1,944)
                                                                              
                                                          -------      -------
                                                                              

Chairman's Statement

For the year to 31st July 2003

This is the fourth annual report of the Gartmore Balanced Assets Trust PLC,
formerly Gartmore Split Capital Opportunities Trust PLC.

Performance

Against a background of further volatility in the UK equity market and
continuing difficulties in the split capital investment trust sector, the year
under review proved to be disappointing for the Company. Performance was
further adversely affected by the Board's decision to produce the financial
statements on a non-going concern basis. The Board believes that this is the
appropriate basis given the extremely high hurdle rate needing to be achieved
and the impending ZDP repayment date.

The total return on the Company's assets, including the effects of the change
in reporting basis, was -9.7%, which largely reflects the poor absolute
performance of the Company's remaining income share portfolio. As the UK equity
market rallied significantly from the lows reached in mid-March immediately
prior to war in Iraq, it is pleasing to note that income share prices have
begun to recover as investor sentiment has improved. This has enabled the
Managers to identify further realisation opportunities at acceptable valuations
in accordance with the Company's modified investment policy, which was approved
by shareholders at Extraordinary General Meetings held on 9th September 2002.

As at 31st July 2003, the proportion of the Company's assets invested in direct
equities had been increased to 70%, with income shares comprising 18%. The
upturn in the UK equity market enabled the Managers to reclaim and reinvest
money which had previously been held in the cash offset account in order to
prevent the Company from breaching its banking covenants. By the end of the
year, approximately £3.0 million of total assets was held in cash or near cash,
down from a high point of £5.5 million in March. The availability of cash in
the latter half of the year enabled the Managers to take advantage of suitable
investment opportunities as the UK equity market began to regain lost ground
and was of benefit to the performance of the Company's direct equity portfolio,
which produced a total return of 4.1% over the year under review in comparison
with a return of 3.4% in the FTSE All-Share Index.

Ordinary Shares

As a result of the fall in value of the Group's assets, combined with the
negative effects of gearing provided by the bank debt and the Zero Dividend
Preference (ZDP) shares which rank ahead of the Ordinary shares, there is no
asset value currently attributable to the Ordinary Shares. The mid market
closing price of the Ordinary shares fell to 1.0p over the year.

Zero Dividend Preference Shares

The net asset value of the ZDP Shares, issued by GBAT Securities, the Company's
subsidiary, fell by 22.7% to 40.8p, whilst the mid market closing price of the
ZDP shares rose 84.8% to 30.5p. This reflects an improvement in underlying
market sentiment and liquidity in the split capital sector as new investors
have begun to look for investment opportunities in this segment of the UK
equity market. However, at 31st July 2003, the consolidated net assets of the
group were insufficient to cover the full final capital entitlement of the ZDP
shares of 149.35p with cover having fallen to 0.3 times. At 31st July there was
a shortfall in assets of £29.6 million to cover the ZDP entitlement at that
date.

Dividends

Shareholders will be aware that during the Company's last financial year, it
was necessary to suspend further dividend payments as the requirements of
section 264 of the Companies Act had not been met. A further deterioration in
the Company's financial position over the year under review has exacerbated the
deficiency in net assets and it is envisaged that no dividend payments will be
made in the foreseeable future.

Going Concern

The Company can only continue in operational existence past 1 November 2004 if
either the investments of the Group generate a return in excess of 95.1% per
annum in the period to 1 November 2004, or prior to that date the ZDP
shareholders formally vote in favour of a proposal to re-structure their
obligations such that their final entitlement does not mature on 1 November
2004.

As mentioned above, given the extremely high hurdle rate and the impending ZDP
repayment date the Directors have concluded that they believe it is appropriate
for the financial statements to be prepared on a break-up basis. Consequently
the Company's investments have been stated at their estimated net realisable
values and provisions of £200,000 made for winding-up costs. The net realisable
value of the Group's investments was approximately £370,000 lower than their
mid-market valuations. This difference was virtually all attributable to the
income shares.

Share Buy-Back Powers

In the light of the constraints imposed by the Company's existing banking
covenants during the year under review, the Directors considered that it was
not in shareholders' best interests to utilise their share buy-back powers.
However, it is proposed that these powers should be renewed at the Company's
forthcoming AGM, affording the Directors with the flexibility to utilise this
option in the future should appropriate circumstances arise.

Resignation of Directors

On 22 January 2003 Neil Osborn and Sir John Stanley resigned from the Board of
Directors for personal reasons. I would like to thank them for their valuable
work and support since the formation of the Company.

Outlook

The Company's assets continue to be managed with the objective of maximising
total returns in the run-up to November 2004, the repayment date for the ZDP
shares. Consequently, the Managers will continue to seek opportunities to
dispose of the remaining income share portfolio and retain its more marketable
direct equity holdings, seeking further investment opportunities or, where more
appropriate, investing in cash and fixed interest securities.

ANNUAL REPORT

The Annual Report of the Group for the year to 31st July 2003 will be posted to
shareholders shortly. Copies will be available from the registered office of
the Company: Gartmore House, 8 Fenchurch Place, London EC3M 4PB.

ANNUAL GENERAL MEETING

The Annual General Meeting for 2003 will be held at the Company's Registered
office on Monday 1st December 2003, at 11.00 a.m. This will be followed by a
presentation by the Company's Managers.

The group accounts shown above comprise the unaudited results of the Company
and its subsidiary, GBAT Securities PLC, for the year to 31 July 2003, and do
not constitute statutory accounts under the Companies Act 1985. The results and
balance sheet for the year to 31st July 2003 are taken from the Company's
latest financial statements which are subject to final audit and have not yet
been delivered to the Registrar of Companies. The comparative financial
information is based on the full statutory accounts for the period ended 31st
July 2002, which included an unqualified audit report, which did not include
statements under section 237(2) or (3) of the Companies Act 1985and have been
filed with the Registrar of Companies.

GARTMORE INVESTMENT LIMITED

23rd October 2003


                                                                                            

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