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Gartmore Growth Opps (GGOR)

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Wednesday 08 September, 2010

Gartmore Growth Opps

Final Results


GARTMORE GROWTH OPPORTUNITIES plc

Final Results for the year to 30 June 2010

The following comprises extracts from the Company's Annual Report and Accounts
for the year to 30 June 2010. The full Annual Report and Accounts is available
to be viewed on or downloaded from the Company's website at http://
www.gartmoregrowthopps.co.uk . Copies will be mailed to shareholders shortly.

                                                           Annual Report Page 3

Chairman's Statement

In the year to 30 June 2010 your Company's net asset value per ordinary share
(NAV) increased 19.8% from 410.88p to 492.15p, a good result despite falling
back a little from the half year. This compares with an increase in the
Company's benchmark, the FTSE SmallCap (ex investment companies) Index, of
16.6%. The Company's share price increased by 23.0% from 379.75p to 467.00p,
reflecting a return of the discount to NAV to a generally narrow range after
widening during the earlier months of 2009.

Our continuing focus on the smaller end of the small-cap universe worked
against us in the second half of the year, with the prices of larger mid-cap
companies holding up better in the volatile conditions, but we continue to be
positioned in this smaller-cap area, where our Manager believes that
opportunities remain compelling.

The Company's dealing subsidiary, Gartmore GO Dealing Limited, had a strong
year capitalising on short-term opportunities and contributed significantly to
the consolidated return with a profit of £1,227,000.

Discounting last year's one-off receipts of refunded VAT from HMRC and interest
thereon, revenue has held-up. The Board decided earlier in the year, as
announced in December, to allocate 75% of management fees and finance costs to
capital with 25% being allocated to the revenue account, instead of 100% being
allocated to revenue as previously. This change has not affected the total
return for shareholders, but had the effect of increasing the revenue earnings
and of reducing the capital return for each Ordinary share in issue at the
year-end by approximately 3.3p. The Directors have declared a dividend of
5.375p per Ordinary share for the year, up 25% from last year's ordinary
dividend of 4.3p. The dividend will be paid on 30 September.

One of our aims this year was to refresh the Board. Accordingly, two new
Directors, Ian Dighé and Allan Jenkins were appointed in April. Ian and Allan
will add new perspective and experience to the Board's deliberations. Peter
Derby, who had been a Director since the launch of the Company in 1991, retired
when Ian and Allan were appointed. David Peters, who had been Chairman since
launch, had intended to retire after this year's Annual General Meeting, but
sadly died in May. We, as the Board and on behalf of the Shareholders, would
like to acknowledge the significant contributions to the Company of both David
Peters and Peter Derby over the years.

On 1 September 2010 the Board was informed that Gervais Williams, lead manager
of the Company's portfolio, had resigned and would be leaving Gartmore shortly.
The portfolio will continue to be actively managed in the same manner as it has
been by the Gartmore UK smaller companies team. The Board is considering the
longer-term management arrangements of the Company. An announcement will be
made on this in due course. In the meantime, as a precaution and in order to
protect shareholders interests, we have served 12 months protective notice to
terminate our agreement with Gartmore.

The latter half of the financial year has made it clear that, although the
global economy has improved markedly, a smooth recovery is by no means assured
and may be at risk. This has been reflected in equity markets, with the
exuberance of the second and third quarters of 2009 giving way to more volatile
markets and mixed fortunes since, particularly amongst smaller companies.
Looking forward, although it seems likely that we will experience intermittent
increases in market volatility and perhaps fluctuating performance in the near
term, our universe is still a source of many opportunities. Valuations are
still attractive and with the capital raising activity that has taken place
many companies are now in a stronger position than they were a year ago and
positioned to pursue opportunities of their own. Likewise, the trend for
takeovers seems set to persist, if not increase, for the foreseeable future.

.

Robert Ware

Chairman

8 September 2010

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                                                           Annual Report Page 5

Manager's Review

Our Objective

In simple terms, our job is to generate a good return for shareholders by
investing in a portfolio of quoted smaller businesses. To do this we seek to
capitalise on the difference between the market perceptions and the underlying
reality of the businesses we invest in.

Occasionally we anticipate turning points in longer-term market trends and seek
to take advantage of these on behalf of shareholders. The last time this
occurred was late in 2005 and early in 2006 when we anticipated that a credit
crisis was coming up and we ``insured'' the value of the investment portfolio
from March 2006 onwards using put options on the FTSE100 Index. Events
subsequently unfolded as we feared, and very substantial profits were taken on
the options in October 2008 and the sizable cash profits were invested into
additional portfolio holdings ready for the market to recover in 2009.

We now have another strong view on future trends in the equity market and have
positioned the portfolio to take advantage of this if and when these trends
unfold:

Our View On Future Market Trends

Since 1985 the world economy has grown rapidly. Those who borrowed early and
invested have benefited tremendously from extraordinary rises in asset prices
since that time. And as others have seen this effect, more and more individuals
have been willing to borrow in greater and greater scale. The most obvious
example has been housing, but this trend has been evident in all sorts of
assets including exchange traded funds (ETFs), commercial property, commodity
funds and equities.

This has fostered the perception that capital gains on investments are the main
driver of total return. In stock market terms this is seen in debates about
which specific group of equities are likely to perform strongly next; will it,
for instance, be those associated with China or with Gold? The aim of market
participants has been to anticipate the right areas at the right time, invest
for the capital gains, and then for the ``hot money'' to move on to another
area with similar short-term potential.

Income generation, principally in the form of dividends, has received
relatively little attention for many years, since frequently these returns have
been modest relative to the capital gains. For example, in 2009 the FTSE
All-Share price index rose 25% whereas the dividend yield over the year of the
shares in the index was only 3.2%.

It is our firm view that this pattern is now changing.

Governments are now being forced to adopt austerity measures, since they need
to bring Government spend back into line with tax revenues. It is widely
expected that, partly because of this and partly by a general reduction in
credit, future economic growth will be very slow in many countries and regions.
Without good economic growth most larger businesses will struggle to grow
earnings. The implication is that the world is going ``ex-growth'' and that
stock market indices will not deliver much capital gain in the coming years.

Within this context, the prospect of receiving a reliable dividend each year
becomes much more important. In particular the power of compounding dividends
year after year is often overlooked by investors. We believe that by taking
full advantage of this trend over the coming years we will have scope to
deliver returns that may be well above those available from other market
sectors. We have an ambition to invest in a portfolio of stocks that have the
scope to deliver good and growing yields over the coming years.

----------

                                                           Annual Report Page 6

If we are successful then we would expect two outcomes:

* The first, is that we might be one of a very limited number of funds that
actually deliver significant dividend growth over coming years. There is plenty
of scope for smaller companies to increase dividends as currently many choose
not to pay dividends in spite of the fact that they can afford to do so. Should
these companies elect to pay or increase dividends we expect there would be an
associated boost in the valuation of their underlying businesses too; and

* secondly, the larger income funds, struggling to sustain income from larger
quoted businesses, are likely to increasingly allocate a portion of their
investment capital down the size bands to smaller companies that generate
strong yields and this would also boost the valuations of these small-cap
stocks.

Positioning The Portfolio For These Trends

How can we position the Company's portfolio to take full advantage of these
trends?

In the coming years we believe that investing in companies with scope to
generate sizable amounts of cash will generate some of the best returns. In a
world where credit may be constrained, those businesses with strong market
positions will be in a hugely advantageous position. They will be able to pay
out good and growing dividends to differentiate themselves from a majority of
other quoted businesses.

And those paying good and growing dividends should have access to the limited
amount of available investment capital to buy distressed assets, at a time when
few others can compete. The valuations of such acquisitions might be the
cheapest in a generation! This is the real advantage of having a public
quotation.

We have differentiated ourselves from most of our competitor funds. Over the
last ten years, the mid-cap stocks have performed well ahead of the FTSE
All-Share Index. They have done particularly well as a result of enhancing
their returns by borrowing money in the corporate bond market as asset prices
rose. Management teams of mid-cap companies that were unwilling to gear up were
often acquired by Private Equity so that sizable debt could be introduced
thereafter to enhance short-term returns. Almost all of the Smaller Companies
investment trusts still have a sizable portion of their assets invested in
mid-cap stocks. Our view is that the cash flow in many of these businesses will
be used to repay debt.

The question arises as to how many small and micro-cap companies have had
access to financial instruments as their funding mechanism, never mind built
their business model on this basis? Well, small-cap and micro-cap stocks were
generally too small to have access to the corporate bond markets and banks have
generally sought not to lend to these companies as they were ``too fiddly''
when compared with large loans for the Private Equity businesses. For this
reason many small-cap and micro-cap businesses have remarkably few borrowings.
Indeed, a very large number of these companies have no borrowings at all and
have surplus cash on their balance sheets. Also, these companies have often
been advised that investors are principally looking for capital gain, so that
cash generated by the company should be reinvested in the business rather than
paid out as dividends. If the forthcoming change in trend unfolds as we expect,
many of these businesses will be able and may be inclined to redirect their
excess cash flow to paying good and growing dividends.

----------

                                                           Annual Report Page 7

For this reason, whilst there are some larger companies that fit our criteria
and investment in these is not ruled out, we have focused our attention on
these small and micro-cap stocks. Their valuations appear to be low as this
sector has suffered from the regular withdrawal of investment capital year
after year during the period when gearing and more gearing was fashionable and
more recently from a perception that larger companies offer more protection in
volatile times. Equally, we anticipate that many have strong market positions
in areas that can continue to expand, even in spite of slow economic growth.
And finally, we have an expectation that many will be in a position to pay good
and growing dividends in the coming years.

Key Drivers Of Performance During The Last Year

Over the past twelve months the Company's NAV has increased 19.8%, while the
Company's benchmark, the FTSE SmallCap (excluding investment companies) Index
rose 16.6%. We benefited from our exposure to AIM-listed companies, with the
FTSE AIM All-Share outperforming the FTSE SmallCap (excluding investment
companies) Index with a return of 24.9%. Returns of this magnitude are
considerably above those that should be anticipated in a low inflation world.
How have they been achieved?

There was considerable divergence between sectors and companies during the
year, with chemicals and electronics delivering the highest returns within the
benchmark index. The largest contributions to index returns overall, factoring
in sector size, came from the sharp recovery of some of the larger sectors such
as real estate, support services and financial services. Within the index
particular weakness was found in pharmaceuticals, although much of this came
down to Antisoma, which fell by more than 75% in March alone after reporting
that one of its biggest hopes for commercial development, a lung cancer drug,
had failed to perform in late-stage clinical trials. We did not have a holding
in Antisoma at the time and on the whole our pharmaceutical holdings performed
well. Retailers were also weak, with concerns about consumer demand in the
medium term.

Technology company Morse was the top contributor to the growth in NAV over the
past year. Morse started off strongly with a positive earnings update last July
and confirmation that a preliminary approach to buy the company at 25p per
share had been made. This offer was rejected but positive news continued to
flow and during October it reported a return to operating profitability over
the third quarter despite lower revenues. Towards the end of the financial year
Morse was acquired by 2e2 for a substantial premium over our original
investment. The offer from 2e2 was at 51p (double the offer of 25p rejected
last year) and at a 24% premium to the closing price before the news broke.

Another strong performer was Nestor Healthcare, which provides staffing
solutions to the health and social care market. We have held an interest in
Nestor for some time, with our original purchase triggered by a very sharp fall
(over 50%) in its share price in November 2007 after a profits warning. This
caused it to drop out of the FTSE All-Share Index, which led to substantial
index fund selling. This decline left the company's shares severely undervalued
and offered active investors the opportunity to purchase it in size at a price
that offered the prospect of substantial reward, whilst putting only a small
amount of capital at risk. Since the end of 2007 Nestor has substantially
outperformed the FTSE SmallCap (ex investment companies) Index. In early 2008
the shares performed particularly well after the company confirmed it had
received indications of takeover interest. Most recently, despite Nestor
reporting a drop in full-year profits in March, the positive outlook for 2010
boosted the share price and significant director acquisitions lent additional
support.

----------

                                                           Annual Report Page 8

The portfolio's performance relative to the index also benefited from our lack
of exposure to many of its weakest performers. The most significant of these
were Southern Cross Healthcare and UK Coal, neither of which were in the
portfolio.

However, there was weakness among several of our larger positions too, which
weighed on returns: One of the largest detractors was Pace, the share price of
which has fallen in the absence of an earnings upgrade. We made considerable
investment gains from this holding in the financial year to June 2009 when it
was one of the best performers in the portfolio and we continue to believe that
the investment case remains strong - Pace is still an attractive company with a
compelling valuation. We sold a little of the holding around its peak price in
September in order to reinvest some of the gains into new ideas, but still
retain a significant position. BATM Advanced Communications, in which the
portfolio is overweight relative to the benchmark, performed well over the
first half of the financial year, but then dropped back considerably. The
decline stemmed from a drop in profits, which was expected, accompanied by
small downgrades. Its difficulties are, however, confined to the telecoms
division and its medical division is prospering. With half of its market
capital in cash, the valuation is extreme so we retain a position, cognisant
that the anticipated return has been deferred. Another detractor was Penna
Consulting. The share price of Penna Consulting, which provides career
transition when large numbers of employees are made redundant, slipped over the
past six months, although we believe prospects for their services remains
strong. Penna is a good example of a company that is well placed to generate
sizable amounts of cash from its operations, especially in adverse economic
times, and has been exemplary in paying good and growing dividends in recent
years.

Prospects

We are somewhat conservative in our outlook at the moment, as we wait for the
impact of the new government's austerity changes. However, we believe the
companies in the portfolio are well placed to deliver sizable cash flows in the
coming years and that these may be paid out in good and growing dividends. We
also hold a limited number of companies where there is potential for an event
that could transform their prospects and where

Gartmore Growth Opportunities plc's shareholders would be rewarded with a
sizable appreciation of the share price.

Gartmore Growth Opportunities plc is different from most other Smaller Company
investment trusts in that the portfolio holds a large number of small-cap and
micro-cap stocks and less exposure to mid-caps. We anticipate that the
portfolio can deliver particularly attractive returns in the coming years. In
the last ten years the FTSE SmallCap (excluding investment companies) Index has
underperformed the FTSE250 Index (representing mid-cap shares) by a sizable
amount. If the very long-term trend is re- established as we anticipate, then,
in general, the smaller the market capitalisation, the better the total return.
We anticipate that our portfolio can deliver premium returns for a number of
years in this scenario.

.

Gartmore Investment Limited

8 September 2010

----------

                                                           Annual Report Page 9

Financial Statistics

                                             At 30 June  At 30 June     Change
                                                                              
                                                   2010        2009          %
                                                                              
Shareholders' Funds:                                                          
                                                                              
Net Assets (£'000)                               54,500      48,094      +13.3
                                                                              
Net Asset Value per Ordinary share              492.15p     410.88p      +19.8
                                                                              
Share Price:                                                                  
                                                                              
Market Capitalisation (Ordinary shares £         51,715      44,450      +16.3
'000)                                                                         
                                                                              
Mid-Market Price                                467.00p     379.75p      +23.0
                                                                              
(Discount)                                         (5%)        (8%)           

631,176 Ordinary shares were redeemed during the year, at a cost of £3,304,000.
(2009: 2,726,129 Ordinary shares were redeemed at a cost of £8,796,000).

Benchmark Index:                                                              
                                                                              
FTSE SmallCap (excluding investment             2205.40     1891.40      +16.6
companies) Index                                                              
                                                                              

Gearing (expressed as a percentage of Net                                     
Assets):                                                                      
                                                                              
Potential Gearing                                 11.2%       13.3%           
                                                                              
Actual Gearing                                     0.0%        2.5%           

Potential gearing is the maximum level of gearing that would be achieved if all
existing loan facilities were fully drawn.

Total Return per Ordinary Share:*                                             
                                                                              
Revenue                                          16.84p       7.75p           
                                                                              
Capital                                          73.47p      40.57p           
                                                                              
Total Return per Ordinary Share                  90.31p      48.32p           

*Based on weighted average of 11,568,620 (2009: 12,959,428) Ordinary shares in
issue during the year.

Total Expense Ratio                                 1.5%        1.7%           
                                                                               
Dividend per Ordinary share for year              5.375p       4.30p           

----------

                                                          Annual Report Page 10

Principal Investments

                                                        Valuation at Percentage
                                                                               
                            Sector                      30 June 2010         Of
                                                                               
Company                     Classification                     £'000  Portfolio
                                                                               
Management Consulting Group Support Services                   1,343        2.8
                                                                               
Pace                        Technology Hardware &              1,299        2.7
                            Equipment                                          
                                                                               
Nestor Healthcare           Health Care Equipment &            1,240        2.6
                            Services                                           
                                                                               
BATM Advanced               Technology Hardware &              1,194        2.5
Communications              Equipment                                          
                                                                               
Juridica Investments        Financial Services                 1,136        2.4
                                                                               
Penna Consulting            Support Services                   1,083        2.3
                                                                               
Innovation Group            Software & Computer                1,074        2.3
                            Services                                           
                                                                               
Oakley Capital Investments  Financial Services                   894        1.9
                                                                               
Renovo Group                Pharmaceuticals & Biotech.           876        1.8
                                                                               
MWB 9.75% 9/12              Corporate Bonds                      865        1.8
                                                                               
MBL Group †                 Media                                711        1.5
                                                                               
Menzies (John)              Support Services                     709        1.5
                                                                               
Assetco †                   Support Services                     685        1.4
                                                                               
Cathay International        Real Estate & Investment             682        1.4
                            Services                                           
                                                                               
Sandvine †                  Health Care Equipment &              678        1.4
                            Services                                           
                                                                               
MDM Engineering Group †     Industrial Engineering               670        1.4
                                                                               
Allocate Software †         Software & Computer                  579        1.2
                            Services                                           
                                                                               
Northgate                   Support Services                     570        1.2
                                                                               
NXT                         Leisure Goods                        531        1.1
                                                                               
Iomart Group †              Software & Computer                  528        1.1
                            Services                                           
                                                                               
Norcon                      Support Services                     522        1.1
                                                                               
Powerflute                  Forestry & Paper                     511        1.1
                                                                               
Stadium Group †             Electronic & Electrical              497        1.0
                            Equipment                                          
                                                                               
Elementis                   Chemicals                            496        1.0
                                                                               
Collins Stewart             Financial Services                   492        1.0
                                                                               
Lavendon Group              Support Services                     481        1.0
                                                                               
Nanoco Group †              Technology Hardware &                479        1.0
                            Equipment                                          
                                                                               
Brammer                     Support Services                     462        1.0
                                                                               
Communisis                  Support Services                     457        1.0
                                                                               
Innovision Research &       Technology Hardware &                451        0.9
Technology †                Equipment                                          
                                                                               
Renold                      Industrial Engineering               449        0.9
                                                                               
Sportingbet                 Travel & Leisure                     441        0.9
                                                                               
REA 9% Pref                 Food Producers                       429        0.9
                                                                               
KBC Advanced Technologies † Oil Equipment & Services             423        0.9
                                                                               
Acal                        Support Services                     422        0.9
                                                                               
Sportech                    Travel & Leisure                     417        0.9
                                                                               
McBride                     Household Goods                      407        0.9
                                                                               
eServGlobal †               Software & Computer                  399        0.8
                            Services                                           
                                                                               
Origin Enterprise †         Food Producers                       399        0.8
                                                                               
Sinclair (William) Holdings Household Goods                      397        0.8
†                                                                              
                                                                               
Conygar Investment †        Real Estate & Investment             386        0.8
                            Services                                           
                                                                               
Paragon Group               Financial Services                   377        0.8
                                                                               
ORA Capital Partners †      Financial Services                   368        0.8
                                                                               
Regenersis †                Support Services                     366        0.8
                                                                               
Sepura                      Technology Hardware &                363        0.8
                            Equipment                                          
                                                                               
Trifast                     Industrial Engineering               360        0.8
                                                                               
Acta †                      Electronic & Electrical              339        0.7
                            Equipment                                          
                                                                               
E-Therapeutics †            Pharmaceuticals & Biotech.           338        0.7
                                                                               
Zotefoams                   Chemicals                            328        0.7
                                                                               
Vitec                       Leisure Goods                        322        0.7
                                                                               
Fifty Largest Investments                                     29,925       62.7

The value of the portfolio of investments on which the table is based was £
47,701,000.

The total number of investments at 30 June 2010 was 172.

† Alternative Investment Market.

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                                                          Annual Report Page 11

Sector Classification and Weightings of Equity Investments

                                                       Portfolio         Index*
                                                                               
                                                 at 30 June 2010     At 30 June
                                                                           2010
                                                                               
Sector                                        £'000           %               %
                                                                               
Oil & Gas                                                                      
                                                                               
Oil & Gas Producers                             457         1.0             1.7
                                                                               
Oil Equipment & Services                        891         1.9               -
                                                                               
Alternative Energy                              384         0.8             0.5
                                                                               
                                              1,732         3.7             2.2
                                                                               
Basic Materials                                                                
                                                                               
Chemicals                                     1,644         3.4             2.6
                                                                               
Forestry & Paper                                660         1.4               -
                                                                               
Industrial Metals                                 -           -             0.5
                                                                               
Mining                                          426         0.9             2.1
                                                                               
                                              2,730         5.7             5.2
                                                                               
Industrials                                                                    
                                                                               
Aerospace & Defence                               -           -             1.6
                                                                               
Construction & Materials                        531         1.1             4.4
                                                                               
Electronic & Electrical Equipment             1,192         2.5             3.0
                                                                               
General Industrials                             405         0.8             1.4
                                                                               
Industrial Engineering                        2,479         5.2             2.9
                                                                               
Industrial Transportation                        83         0.2             3.9
                                                                               
Support Services                              9,229        19.4            15.8
                                                                               
                                             13,919        29.2            33.0
                                                                               
Consumer Goods                                                                 
                                                                               
Automobile & Parts                                -           -               -
                                                                               
Beverages                                         -           -               -
                                                                               
Food Producers                                1,191         2.5             3.8
                                                                               
Household Goods                               1,041         2.2             1.2
                                                                               
Leisure Goods                                   852         1.8             0.6
                                                                               
Personal Goods                                    -           -               -
                                                                               
Tobacco                                           -           -               -
                                                                               
                                              3,084         6.5             5.6
                                                                               
Health Care                                                                    
                                                                               
Health Care Equipment & Services              1,664         3.5             1.1
                                                                               
Pharmaceuticals & Biotechnology               2,388         5.0             3.4
                                                                               
                                              4,052         8.5             4.5
                                                                               
Consumer Services                                                              
                                                                               
Food & Drug Retailers                            71         0.1             0.9
                                                                               
General Retailers                               110         0.2             4.9
                                                                               
Media                                         2,459         5.2             5.8
                                                                               
Travel & Leisure                              1,727         3.6             4.3
                                                                               
                                              4,367         9.1            15.9
                                                                               
Telecommunications                                                             
                                                                               
Fixed Line Telecommunications                     -           -             1.9
                                                                               
Mobile Telecommunications                         -           -               -
                                                                               
                                                  -           -             1.9
                                                                               
Utilities                                                                      
                                                                               
Electricity                                     525         1.1               -
                                                                               
Gas, Water & Multiutilities                       -           -               -
                                                                               
                                                525         1.1               -
                                                                               
Financials                                                                     
                                                                               
Banks                                             -           -               -
                                                                               
Equity Investment Instruments                    94         0.2             2.7
                                                                               
General Financial                             5,805        12.2             6.4
                                                                               
Life Insurance                                    -           -             1.6
                                                                               
Non-life insurance                              448         0.9             2.7
                                                                               
Real Estate                                   2,090         4.4            10.3
                                                                               
                                              8,437        17.7            23.7
                                                                               
Technology                                                                     
                                                                               
Software & Computer Services                  4,077         8.5             5.9
                                                                               
Technology Hardware & Equipment               4,778        10.0             2.1
                                                                               
                                              8,855        18.5             8.0
                                                                               
TOTAL                                        47,701       100.0           100.0

* FTSE SmallCap (excluding investment companies) Index

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                                                          Annual Report Page 12

Analysis of Net Assets and Shareholders Funds

                           Valuation at          Net  Appreciation/   Valuation at
                                                                                  
                           30 June 2009 Transactions (Depreciation)   30 June 2010
                                                                                  
                           £'000      %        £'000          £'000   £'000      %
                                                                                  
Equities                                                                          
                                                                                  
Oil & Gas                  3,794    7.9      (3,778)          1,716   1,732    3.2
                                                                                  
Basic Materials            3,291    6.8      (1,302)            741   2,730    5.0
                                                                                  
Industrials               13,436   27.9      (1,578)          2,061  13,919   25.5
                                                                                  
Consumer Goods             2,070    4.3          834            180   3,084    5.7
                                                                                  
Health Care                4,487    9.3      (2,377)          1,942   4,052    7.4
                                                                                  
Consumer Services          3,399    7.1          859            109   4,367    8.0
                                                                                  
Telecommunications           407    0.9        (657)            250       -      -
                                                                                  
Utilities                    455    0.9          184          (114)     525    1.0
                                                                                  
Financials                 3,949    8.2        3,069            475   7,493   13.8
                                                                                  
Technology                11,286   23.5      (4,432)          1,945   8,799   16.1
                                                                                  
                          46,574   96.8      (9,178)          9,305  46,701   85.7
                                                                                  
Convertibles/Corporate     1,036    2.2           55           (91)   1,000    1.8
Bonds                                                                             
                                                                                  
                          47,610   99.0      (9,123)          9,214  47,701   87.5
                                                                                  
Current Assets             2,280    4.7        4,733              -   7,013   12.9
including cash                                                                    
                                                                                  
Total Assets              49,890  103.7      (4,390)          9,214  54,714  100.4
                                                                                  
Liabilities              (1,796)  (3.7)        1,518             64   (214)  (0.4)
                                                                                  
Net Assets                48,094  100.0      (2,872)          9,278  54,500  100.0
                                                                                  
Attributable to           48,094  100.0     (4,041)*        10,447†  54,500  100.0
Ordinary shareholders                                                             

* Represents £3,304,000 paid in respect of shares redeemed and equity dividends
paid of £737,000.

† Total return for the year.

----------

                                                          Annual Report Page 15

Report of the Directors

The Directors submit their Report and the Accounts for the year ended 30 June
2010. The Corporate Governance Statement on pages 25 to 31 forms part of the
Report of the Directors.

Business Review

The Business Review has been prepared in accordance with the Companies Act 2006
and should be read in conjunction with the Chairman's Statement on page 3, the
Managers Review on pages 5 to 8 and the analyses on pages 9 to 12.

Nature and Status

The Company is an investment trust company and a member of The Association of
Investment Companies. It is registered as a public limited company
(Registration number 2600028 England and Wales) and is an investment company as
defined by section 833 of the Companies Act 2006.

The Company has a wholly-owned subsidiary, Gartmore GO Dealing Limited, which
trades in shares and securities.

The Company was last approved by HM Revenue & Customs (HMRC) as an investment
trust under Section 1158 of the Corporation Tax Act 2010 in respect of the year
ended 30 June 2009. This approval is subject to there being no subsequent
enquiry under corporation tax self-assessment. The Company has been approved as
an investment trust for all previous years. Since 30 June 2009, the Company has
directed its affairs so as to be able to continue to qualify for approval by
HMRC as an investment trust for tax purposes.

The close company provisions of the Income and Corporation Taxes Act 1988 do
not apply to the Company.

Investment Objective

The Company seeks capital appreciation from investment primarily in the shares
of quoted UK smaller companies and aims to be one of the leading investment
trusts in its sector.

Investment Policy

Asset Allocation:

The Company mainly invests in UK smaller companies, with a wide range of market
capitalisations, targeting sustained returns even in difficult markets. A
number of the UK smaller companies within the portfolio may therefore be
outside the universe of the benchmark index when it is believed this will
increase shareholder value. Whilst the majority of investments are equities,
other instruments such as warrants and convertible and non-convertible
securities (including preference shares and loan stocks) may be used. Cash and
derivative instruments (such as futures and options) may also be utilised for
efficient portfolio management and as part of investment strategy, not only as
a short-term measure. In addition, the Company's trading subsidiary targets
absolute returns in order to enhance shareholder returns under a broader range
of market conditions and to offer further downside protection to the portfolio
as a whole.

Risk Diversification:

Portfolio risk is mitigated by investing in a diversified spread of
investments. In compliance with section 1159 Corporation Tax Act 2010
investments in any one company, other than holdings in another investment
company, shall not, on acquisition, exceed 15% of the portfolio value.

Gearing:

The Company will make use of borrowings when it is considered that gearing will
enhance total returns. The Company has bank borrowing facilities in place and
the Board currently has a policy that gearing shall not exceed 20% of the value
of Net Assets.

----------

                                                          Annual Report Page 16

Benchmark Index

Performance is measured against the FTSE SmallCap (excluding investment
companies) Index. The Company sources index and price data from Thomson Reuters
Datastream.

Performance

Please refer to the Manager's Review on pages 5 to 8 for an overview of the
Company's investment activities in the year and to the analyses on pages 9 to
12. These, together with this Business Review, illustrate how the Group's
assets have been invested with a view to spreading investment risk in
accordance with the Group's published investment policy.

The Directors consider that the key indicator of the Group's performance is the
movement of the net asset value per Ordinary share compared with the movement
of the Benchmark Index. Net asset value per share increased 19.8% in the year
under review (2009: 16.1% increase) compared with a rise in the Index of 16.6%
(2009: decrease of 24.2%). The mid-market price of the Company's Ordinary
shares rose 23.0% (2009: 15.1% rise).

As regards the principal contributors to the year's performance, in common with
the Company's benchmark, holdings in the chemicals and electronics sectors
delivered particularly strong returns, as did our support services holdings,
although here we were underweight and consequently underperformed relative to
the benchmark. Technology related sectors and Health Care also contributed
strongly to our returns, and in these we were overweight relative to the index
and consequently made relatively better returns. At the stock level, Morse and
Nestor Healthcare stand out amongst a number of strong performers and relative
to the benchmark we benefitted from not holding some constituents that
performed poorly, such as Antisoma.

Since investment in an investment trust company is generally considered to be
for longer-term returns it is also relevant to consider performance over a
longer period. Over the last three, five and ten years the Net asset value per
share increased, respectively, by 10.8%, 56.6% and 78.5% compared with
decreases in the index for those periods of -43.0%, -23.4% and -33.5%. The
mid-market price of the Company's Ordinary shares increased 7.6%, 60.2% and
116.2% over the same periods.

Financial Position and Finance

Net Assets at 30 June 2010 amounted to £54,500,000, compared with £48,094,000
at 30 June 2009. In the financial year 631,176 Ordinary shares, being 5.4% of
the shares in issue at 30 June 2009, were redeemed, with matching buyers having
been found for a further 845,440 shares that had been submitted for redemption.
The Company's equity share capital at the year-end comprised 11,073,864 fully
paid up Ordinary shares of 0.025p (2009: 11,705,040 Ordinary shares).
The Company also has 50,000 Management shares of £1 in issue which are paid up
to 25p each and are treated as long-term debt on the balance sheet.

All of the Company's investments are listed on recognised exchanges and are
realisable within a relatively short period.

At 30 June 2010 the Group had no outstanding bank loans (2009: short-term bank
borrowing of £900,000). The most stringent covenant applying to gearing is a
requirement that the Group's indebtedness should not exceed 25% of Net Assets.
If the whole of the borrowing facilities had been drawn at 30 June 2010 Group
indebtedness would have been approximately 11% of Net Assets.

----------

                                                          Annual Report Page 17

The Group made a net revenue profit in the year, after expenses and taxation,
of £1,948,000, compared with a profit of £1,004,000 for the previous year. The
strong result of the Company's trading subsidiary, Gartmore GO Dealing Limited,
contributed a profit of £1,227,000 to this Group result (2009: £92,000 profit).
Dividend income was similar to last year, with last year's result having been
bolstered by a substantial refund of VAT and associated interest. The Company's
ratio of annual expenses to average year-end net assets (TER) for the year was
1.5% (2009: 1.7%). The following costs are excluded from the annual expenses
used to calculate the TER: transaction costs of £284,000 (2009: £267,000);
interest on borrowings of £49,000 (2009: £67,000); and tax.

The Directors have declared an increased dividend of 5.375p for the year,
(2009: 4.3p) which will be paid on 30 September 2010.

Gearing

The Managers are authorised to borrow money to make additional investments on
top of shareholders' funds (gearing) and flexible borrowing facilities are
available for that purpose. These comprise a committed facility of up to £3
million and an uncommitted facility for a further £3 million, each provided by
The Bank of New York Mellon. These facilities were used to varying degrees
during the course of the year. At the year-end there were no drawings on these
facilities (2009: £900,000 drawn on the committed facility). The Directors
currently have a policy that gearing under these facilities shall not exceed
20% of the value of Net Assets. Additionally, the Company has a £100,000 Royal
Bank of Scotland overdraft facility which can be used for normal business
purposes and short-term settlement mismatches.

Socially Responsible Investment

The Company has delegated responsibility for making and holding investments to
the Manager, Gartmore lnvestment Limited, on the basis that, subject to an
overriding requirement to pursue the best economic interests of the Company and
its shareholders, the Manager should take account of social, environmental and
ethical factors.

Future Trends

Although we are cautious on a short-term view with continuing sovereign debt
concerns and uncertainty as to the impact of the new government's austerity
changes, longer-term prospects for many smaller companies continue to be
positive. This is reflected in rising corporate activity and our Manager
continues to find attractive opportunities to invest.

Principal Risks and Uncertainties

The Board's policy on risk management has not changed from last year. As
expanded on pages 30 and 31 the Directors have put in place processes to
identify and manage significant risks to the company, including internal
controls to minimise operational risks. The main areas of risk, in the opinion
of the Board, are summarised below and are further discussed in Note 26 to the
Accounts on pages 56 to 59:

Market Risk

Since the Company is an investment company its performance is dependent on the
performance of the companies and market sectors in which it invests. Investment
risk is spread by holding a diversified portfolio that normally comprises
around 200 holdings, however a significant proportion of these holdings may not
be represented in the benchmark index. At their regular meetings, the Directors
and the Manager review the Company's activities and performance, and determine
investment strategy.

----------

                                                          Annual Report Page 18

Gearing

With its current credit facilities the Company has the ability to gear up to
around 11% of the Group's net assets. Gearing will magnify portfolio returns
per share, be they positive or negative. The potential for bank gearing to have
a negative impact is limited by the short-term revolving (usually weekly)
nature of drawings on the bank loan facilities combined with the reasonable
level of liquidity of the investments in the portfolio.

Other Financial Risks

The Company minimises the risk of a counter party failing to deliver securities
or cash by dealing through organisations that have undergone rigorous due
diligence by the Manager.

The Group holds its liquid funds almost entirely in UK interest bearing bank
accounts or on short term deposit and has arranged flexible borrowing
facilities to accommodate foreseeable liquidity requirements. This, together
with the portfolio being invested in quoted securities, mitigates the Company's
exposure to liquidity risk.

Internal Control

As expanded on pages 30 and 31 the Board keeps under review the risks facing
the Company and minimises operational risks through its arrangements with
service providers, whose services and internal controls it regularly reviews.

Discount Management

The Company's capital structure was altered in June 2005 to provide
shareholders with a quarterly opportunity to request redemption of their
shares. Redemption is subject to certain limitations and the Directors
exercising their discretion. The redemption value, which is termed the Dealing
Value, is close to net asset value, being based upon the realisation value of
the portfolio, less costs and an exit charge of 2% that is retained by the
Company. As a result, the shares tend to trade at a narrow discount during
normal market conditions. The financial year to June 2009 saw extreme
volatility and the Company's discount widened in the unsettled conditions. In
the last year the discount mostly kept within the narrow range that has been
more typical since the capital was restructured. The average discount to net
asset value for the year to 30 June 2010 was 2% (2009: 10%) compared with the
sector average discount of 16% (2009: 17%).

----------

                                                Annual Report Page 24 (extract)

Declaration

Each of the Directors, who are listed on page 14 of this Report, confirm to the
best of their knowledge that:

(a) the Accounts, which have been prepared in accordance with applicable
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and the subsidiary
undertaking included in the consolidation taken as a whole; and

(b) the Annual Report includes a fair review of the development and performance
of the business and the position of the Company and the subsidiary undertaking
included in the consolidation taken as a whole, together with a description of
the principal risks and uncertainties that they face.

Robert Ware

Chairman

8 September 2010

----------

                                                          Annual Report Page 36

Group Statement of Comprehensive Income

for the year to 30 June 2010

                                                       Year to 30 June 2010    
                                                                               
                                                     Revenue   Capital    Total
                                                                               
                                                      Return    Return   Return
                                                                               
                                              Notes    £'000     £'000    £'000
                                                                               
Income and Capital Profits                                                     
                                                                               
Dividends and other income                        2    1,302         5    1,307
                                                                               
Gains on investments held at fair value           3    1,267     9,214   10,481
                                                                               
Currency gains                                             -         -        -
                                                                               
Total Income                                           2,569     9,219   11,788
                                                                               
Expenses                                                                       
                                                                               
Management fees                                   4    (112)     (335)    (447)
                                                                               
Other fees and expenses                           5    (441)     (284)    (725)
                                                                               
Operating expenses before Finance Costs and            (553)     (619)  (1,172)
Taxation                                                                       
                                                                               
Net Profit before Finance Costs and Taxation           2,016     8,600   10,616
                                                                               
Finance Costs                                                                  
                                                                               
Interest payable                                  6     (12)      (37)     (49)
                                                                               
Movement in fair value of Loan Stock             14        -      (64)     (64)
                                                                               
Total Finance Costs                                     (12)     (101)    (113)
                                                                               
Net Profit before Taxation                             2,004     8,499   10,503
                                                                               
Taxation                                          7     (56)         -     (56)
                                                                               
Profit for the year and Total Comprehensive            1,948     8,499   10,447
Income                                                                         
                                                                               
Earnings per Ordinary share                       9   16.84p    73.47p   90.31p

The total column of this statement represents the Group's Statement of
Comprehensive Income, prepared in accordance with IFRS, as adopted by the
European Union.

The revenue return and capital return columns are supplementary disclosures
provided in accordance with guidance issued by The Association of Investment
Companies.

All items derive from continuing operations.

The Notes on pages 42 to 60 form part of these Accounts.

----------

                                                          Annual Report Page 37

Group Statement of Comprehensive Income

for the year to 30 June 2009

                                                       Year to 30 June 2009    
                                                                               
                                                     Revenue   Capital    Total
                                                                               
                                                      Return    Return   Return
                                                                               
                                              Notes    £'000     £'000    £'000
                                                                               
Income and Capital Profits                                                     
                                                                               
Dividends and other income                        2    1,778        32    1,810
                                                                               
(Losses)/gains on investments held at fair        3     (51)     5,387    5,336
value                                                                          
                                                                               
Currency gains                                             -         5        5
                                                                               
Total Income                                           1,727     5,424    7,151
                                                                               
Expenses                                                                       
                                                                               
Management fees                                   4    (228)         -    (228)
                                                                               
Other fees and expenses                           5    (418)     (267)    (685)
                                                                               
Operating expenses before Finance Costs and            (646)     (267)    (913)
Taxation                                                                       
                                                                               
Net Profit before Finance Costs and Taxation           1,081     5,157    6,238
                                                                               
Finance Costs                                                                  
                                                                               
Interest payable                                  6     (67)         -     (67)
                                                                               
Movement in fair value of Loan Stock             14        -       101      101
                                                                               
Total Finance Costs                                     (67)       101       34
                                                                               
Net Profit before Taxation                             1,014     5,258    6,272
                                                                               
Taxation                                          7     (10)         -     (10)
                                                                               
Profit for the year and Total Comprehensive            1,004     5,258    6,262
Income                                                                         
                                                                               
Earnings per Ordinary share                       9    7.75p    40.57p   48.32p

The total column of this statement represents the Group's Statement of
Comprehensive Income, prepared in accordance with IFRS, as adopted by the
European Union.

The revenue return and capital return columns are supplementary disclosures
provided in accordance with guidance issued by The Association of Investment
Companies.

All items derive from continuing operations.

The Notes on pages 42 to 60 form part of these Accounts.

----------

                                                          Annual Report Page 36

Group Balance Sheet

at 30 June 2010                                                  At          At
                                                                               
                                                            30 June     30 June
                                                               2010        2009
                                                                               
                                                  Notes       £'000       £'000
                                                                               
Non-Current Assets                                                             
                                                                               
Investments held at fair value through profit or     10      47,701      47,610
loss                                                                           
                                                                               
Current Assets                                                                 
                                                                               
Investments held for trading                         11         311       1,168
                                                                               
Balances due from brokers                                     1,072         680
                                                                               
Other receivables                                    13         219         216
                                                                               
Cash and cash equivalents                                     5,411         216
                                                                               
                                                              7,013       2,280
                                                                               
Total Assets                                                 54,714      49,890
                                                                               
Current Liabilities                                                            
                                                                               
Equity-Linked Unsecured Loan Stock 2004/09           14           -       (299)
                                                                               
Balances due to brokers                                           -       (435)
                                                                               
Bank loan                                            15           -       (900)
                                                                               
Other payables                                       16       (201)       (149)
                                                                               
                                                              (201)     (1,783)
                                                                               
Total Assets less Current Liabilities                        54,513      48,107
                                                                               
Non-Current Liabilities                                                        
                                                                               
Non-equity management shares                         17        (13)        (13)
                                                                               
Net Assets                                                   54,500      48,094
                                                                               
Equity Attributable to Equity Shareholders                                     
                                                                               
Called-up share capital                              18           3           3
                                                                               
Special distributable reserve                        19      51,523      51,523
                                                                               
Capital redemption reserve                           20           1           1
                                                                               
Retained earnings:                                   21                        
                                                                               
Capital reserve                                               (837)     (6,032)
                                                                               
Revenue reserve                                               3,810       2,599
                                                                               
Total Equity                                                 54,500      48,094
                                                                               
Net Asset Value per Ordinary share                   22     492.15p     410.88p

                                      Approved by the Board on 8 September 2010

Robert Ware

Chairman

Registered No. 2600028 England and Wales

The Notes on pages 42 to 60 form part of these Accounts.

----------

                                                          Annual Report Page 39

Company Balance Sheet

at 30 June 2010                                                  At          At
                                                                               
                                                            30 June     30 June
                                                               2010        2009
                                                                               
                                                  Notes       £'000       £'000
                                                                               
Non-Current Assets                                                             
                                                                               
Investments held at fair value through profit or     10      47,701      47,610
loss                                                                           
                                                                               
Investment in subsidiary                             12       2,264       1,037
                                                                               
                                                             49,965      48,647
                                                                               
Current Assets                                                                 
                                                                               
Balances due from brokers                                     1,072         493
                                                                               
Due from subsidiary                                               -         324
                                                                               
Other receivables                                    13         219         215
                                                                               
Cash and cash equivalents                                     5,286          61
                                                                               
                                                              6,577       1,093
                                                                               
Total Assets                                                 56,542      49,740
                                                                               
Current Liabilities                                                            
                                                                               
Equity-Linked Unsecured Loan Stock 2004/09           14           -       (299)
                                                                               
Balances due to brokers                                           -       (285)
                                                                               
Due to subsidiary                                           (1,871)           -
                                                                               
Bank loan                                            15           -       (900)
                                                                               
Other payables                                       16       (158)       (149)
                                                                               
                                                            (2,029)     (1,633)
                                                                               
Total Assets less Current Liabilities                        54,513      48,107
                                                                               
Non-Current Liabilities                                                        
                                                                               
Non-equity management shares                         17        (13)        (13)
                                                                               
Net Assets                                                   54,500      48,094
                                                                               
Equity Attributable to Equity Shareholders                                     
                                                                               
Called-up share capital                              18           3           3
                                                                               
Special distributable reserve                        19      51,523      51,523
                                                                               
Capital redemption reserve                           20           1           1
                                                                               
Retained earnings:                                   21                        
                                                                               
Capital reserve                                               1,427     (4,995)
                                                                               
Revenue reserve                                               1,546       1,562
                                                                               
Total Equity                                                 54,500      48,094
                                                                               
Net Asset Value per Ordinary share                   22     492.15p     410.88p

                                      Approved by the Board on 8 September 2010

Robert Ware

Chairman

Registered No. 2600028 England and Wales

The Notes on pages 42 to 60 form part of these Accounts.

----------

                                                          Annual Report Page 40

Statement of Changes in Equity

for the year to 30 June 2010

                                Called-up       Special    Capital                 
                                                                                   
                                    share Distributable Redemption Retained        
                                                                                   
                                  capital       reserve    reserve earnings   Total
                                                                                   
Group and Company         Notes     £'000         £'000      £'000    £'000   £'000
                                                                                   
At 1 July 2009                          3        51,523          1  (3,433)  48,094
                                                                                   
Total Comprehensive                                                                
Income:                                                                            
                                                                                   
Net profit for the year                 -             -          -   10,447  10,447
to 30 June 2010                                                                    
                                                                                   
Transactions with owners,                                                          
recorded directly to                                                               
equity:                                                                            
                                                                                   
Equity dividends paid on      8         -             -          -    (737)   (737)
Ordinary shares                                                                    
                                                                                   
Redemption of Ordinary       18         -             -          -  (3,304) (3,304)
shares                                                                             
                                                                                   
At 30 June 2010                         3        51,523          1    2,973  54,500
                                                                                   
.                                                                                  
                                                                                   
At 1 July 2008                          4        51,523          -    (435)  51,092
                                                                                   
Total Comprehensive                                                                
Income:                                                                            
                                                                                   
Net profit for the year                 -             -          -    6,262   6,262
to 30 June 2009                                                                    
                                                                                   
Transactions with owners,                                                          
recorded directly to                                                               
equity:                                                                            
                                                                                   
Equity dividends paid on      8         -             -          -    (464)   (464)
Ordinary shares                                                                    
                                                                                   
Redemption of Ordinary                (1)             -          1  (8,796) (8,796)
shares                                                                             
                                                                                   
At 30 June 2009                         3        51,523          1  (3,433)  48,094

The Notes on pages 42 to 60 form part of these Accounts.

----------

                                                          Annual Report Page 41

Cash Flow Statement

for the year to 30 June 2010

                                               Group  Company    Group Company
                                                                              
                                             Year to  Year to  Year to Year to
                                                                              
                                             30 June  30 June  30 June 30 June
                                                                              
                                                2010     2010     2009    2009
                                                                              
                                       Notes   £'000    £'000    £'000   £'000
                                                                              
Cash Flows from Operating Activities                                          
                                                                              
Net Profit before taxation                    10,503   10,503    6,272   6,272
                                                                              
Adjustments for:                                                              
                                                                              
Increase/(decrease) in investments               766  (1,361)    1,327   2,146
                                                                              
(Increase)/decrease in receivables             (395)    (259)      730     558
                                                                              
(Decrease)/increase in payables                (423)    1,598       63   (723)
                                                                              
Finance costs                                    113      113     (34)    (34)
                                                                              
Net Cash Flows from Operating                 10,564   10,594    8,358   8,219
Activities before taxation                                                    
                                                                              
Taxation paid                                   (13)     (13)     (10)    (10)
                                                                              
Net Cash Flows from Operating             23  10,551   10,581    8,348   8,209
Activities                                                                    
                                                                              
Cash Flows from Financing Activities                                          
                                                                              
Redemption of Ordinary shares                (3,304)  (3,304)  (8,796) (8,796)
                                                                              
Redemption of Equity-linked loan               (363)    (363)     (11)    (11)
stock units                                                                   
                                                                              
Bank loans (repaid)/drawn down                 (900)    (900)      900     900
                                                                              
Loan interest paid                              (52)     (52)     (68)    (68)
                                                                              
Equity dividends paid on Ordinary              (737)    (737)    (464)   (464)
shares                                                                        
                                                                              
Net Cash Flows used in Financing             (5,356)  (5,356)  (8,439) (8,439)
Activities                                                                    
                                                                              
Net Increase/(Decrease) in Cash and            5,195    5,225     (91)   (230)
Cash Equivalents                                                              
                                                                              
Cash and Cash Equivalents at 1 July              216       61      307     291
                                                                              
Cash and Cash Equivalents at 30 June           5,411    5,286      216      61

The Notes on pages 42 to 60 form part of these Accounts.

----------

                                                          Annual Report Page 42

Notes to the Accounts

1. Accounting Policies

The Group comprises Gartmore Growth Opportunities plc (the "Company") and its
wholly owned subsidiary, Gartmore GO Dealing Limited.

The nature of the Group's operations and its principal activities are set out
in the Report of the Directors on page 15.

Group and Company accounts have been prepared in accordance with International
Financial Reporting Standards (IFRS), which comprise standards and
interpretations approved by the International Accounting Standards Board (IASB)
and International Accounting Standards Committee (IASC), as adopted by the
European Union (EU).

The principal accounting policies followed are set out below:

Basis of Preparation

The Group and Company accounts have been prepared on a going concern basis
under the historical cost convention, as modified by the revaluation of
investments at fair value.

Where presentational guidance set out in the Statement of Recommended Practice
(SORP) for investment trusts issued by The Association of Investment Companies
(AIC) in January 2009 is consistent with the requirements of IFRS, the
Directors have sought to prepare the accounts on a basis compliant with the
recommendations of the SORP.

Basis of Consolidation

The Group accounts comprise the audited Accounts of the Company and its
subsidiary drawn up to the Balance Sheet date. The Statement of Comprehensive
Income is only presented in consolidated form, as provided by Section 408 of
the Companies Act 2006.

Presentation of Statement of Comprehensive Income

In order to better reflect the activities of an investment trust company and in
accordance with the guidance issued by the AIC, supplementary information which
analyses the Statement of Comprehensive Income between items of a revenue and
capital nature has been presented alongside the Statement of Comprehensive
Income.

In accordance with the Company's status as a UK investment company under
section 833 of the Companies Act 2006, net capital returns may not be
distributed by way of dividend. Additionally, the net profit after taxation in
the revenue column is the measure the Directors believe to be appropriate in
assessing the Group's compliance with certain requirements set out in section
1159 Corporation Tax Act 2010.

Revenue

Dividends from investments are recognised on the ex-dividend date and credited
to revenue, with the exception of dividends of a capital nature, which are
credited to the capital column of the Statement of Comprehensive Income.

Where the Group has elected to receive its dividends in the form of additional
shares rather than cash, the amount of cash dividend foregone is recognised as
income in the revenue column of the Statement of Comprehensive Income. Any
excess in the value of shares received over the amount of cash dividend
foregone is recognised as a gain in the capital column of the Statement of
Comprehensive Income.

Income on fixed income securities, deposit and other interest receivable is
recognised under the effective interest rate method. This method discounts the
estimated future cash flows, including any discount, premium or costs incurred,
in respect of the financial instrument through its expected life, or through an
appropriate shorter period.

Underwriting commission is recognised as revenue in so far as it relates to
shares the Company is not required to take up. Where the Company is required to
take up a proportion of the shares underwritten, an equal proportion of the
commission received is offset against the cost of the shares taken up.

Expenses

Management fees and administrative expenses are accounted for on an accruals
basis.

Expenses are split and presented partly as capital items where a connection
with the maintenance or enhancement of the value of the investments held can be
demonstrated, and accordingly, management fees are allocated 25% to revenue and
75% to capital, in order to reflect the directors' expected long-term view of
the nature of the investment returns of the Group.

Expenses that are incidental to the acquisition and disposal of investments are
disclosed as expenses in the capital column of the Statement of Comprehensive
Income.

----------

                                                          Annual Report Page 43

1. Accounting Policies (continued)

Finance Costs

Interest payable is calculated using the effective interest rate method and is
allocated 25% to revenue and 75% to capital, in accordance with the Board's
expected long-term view of the nature of the investment returns of the Group.

This method discounts the estimated future cash flows, including any discount,
premium or costs incurred, in respect of the financial instrument through its
expected life, or through an appropriate shorter period. Any fair value
movement is allocated to capital.

Taxation

The tax expense comprises the sum of current tax and deferred tax.

Current tax is based on taxable profit for the year. Taxable profit differs
from profit before tax as reported in the Statement of Comprehensive Income
because it excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable or
deductible. The Group's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the balance sheet date.

In line with recommendations of the SORP, the allocation method used to
calculate tax relief on expenses presented in the capital column of the
Statement of Comprehensive Income 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 Statement of Comprehensive Income, then no tax relief is
transferred to the capital column.

Deferred Taxation

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 bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method. Deferred
tax liabilities are recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that tax
profits will be available against which deductible temporary differences can be
utilised.

No provision for taxation is required in respect of any realised or unrealised
appreciation of the Company's investments as the Company expects to continue to
qualify as an investment trust for tax purposes.

Investment trust companies which have approval under section 1158 Corporation
Tax Act 2010 are not liable for taxation on capital gains.

The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised and charged or
credited in the Statement of Comprehensive Income.

Non-Current Asset Investments Held at Fair Value

Purchases and sales are normally transacted with contractual terms that require
delivery within a fixed timeframe according to the relevant market. The
investments concerned are recognised or derecognised on the trade date. On
initial recognition all non-current asset investments are designated as held at
fair value through profit or loss as defined by IFRS, as adopted by the EU.
They are further categorised into the following fair value hierarchy:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or
liabilities.

Level 2: Having inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly (ie as prices) or
indirectly (ie derived from prices).

Level 3: Having inputs for the asset or liability that are not based on
observable market data.

Non-current asset investments including derivative instruments are measured at
fair value with gains and losses arising from changes in their fair value being
included in net profit or loss for the year as a capital item.

----------

                                                          Annual Report Page 44

1. Accounting Policies (continued)

Non-Current Asset Investments Held at Fair Value (continued)

The fair value of listed investments and derivative instruments is based on
their quoted bid market price at the close of business on the balance sheet
date without any deduction for estimated future selling costs.

Where there is not an active market in a stock the fair value is established
using alternative methods and may be based on recent arms length market
transactions, stockbrokers valuations, net asset values or other relevant
information. Such valuations are approved by a Pricing Committee constituted of
senior executives of the Manager. Stocks valued in this way are not expected to
form a material proportion of the portfolio.

In accordance with the Articles of Association of the Company, any gains and
losses realised on disposal are recognised in the capital column of the
Statement of Comprehensive Income, and are not distributable by way of
dividend.

Current Asset Investments Held for Trading

Current asset investments held for trading are measured at fair value with
gains and losses arising from changes in their fair value being included in the
Statement of Comprehensive Income as a revenue item.

Investment in Subsidiary

The parent company's investment in its subsidiary company, Gartmore GO Dealing
Limited, is valued at fair value in the Company's balance sheet. Fair value is
considered to be the net asset value of the subsidiary.

Loan to Subsidiary

Intercompany loans are free of charges and are recognised at their nominal
value, which is considered to be their fair value, both initially and
subsequently. Such loans are disclosed as a component of the investment in the
subsidiary.

Other Receivables

Other receivables do not carry any right to interest and are short-term in
nature. Accordingly they are stated at their nominal value reduced by
appropriate allowances for estimated irrecoverable amounts.

Cash and Cash Equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are
short-term, highly liquid investments that are readily convertible to known
amounts of cash.

Equity-Linked Unsecured Loan Stock 2004/09

The Equity-Linked Unsecured Loan Stock 2004/09 was redeemed during the year.

On initial recognition it was designated as held at fair value through profit
or loss which meant that its performance was evaluated on a similar basis to
the investment portfolio.

The movement in the fair value has been treated as a finance cost recorded in
the capital column of the Statement of Comprehensive Income.

Short-Term Borrowings

Short-term borrowings under bank credit facilities are stated as the net
proceeds of the drawing plus related accrued finance costs at the balance sheet
date. The finance costs of servicing such borrowings are calculated using the
effective interest rate method and allocated 25% to the revenue column and 75%
to the capital column of the Statement of Comprehensive Income.

Other Payables

Other payables are not interest-bearing and are stated at their nominal amount.

Reserves

(i) Special Distributable Reserve: The Special Distributable Reserve was
created by the cancellation of the Capital Redemption Reserve as at 5 May 2005
as part of the Company's reorganisation at that time to make the Ordinary
shares redeemable. It can be used to finance the redemption and/or repurchase
of shares in issue.

(ii) Capital Redemption Reserve: The Capital Redemption Reserve, which is
non-distributable, holds the amount by which the nominal value of the Company's
issued share capital is diminished when shares are redeemed or purchased out of
the Company's profits.

----------

                                                          Annual Report Page 45

1. Accounting Policies (continued)

Reserves (continued)

(iii) Capital Reserve: The Capital Reserve comprises both gains and losses on
disposals of investments and investment holding gains and losses. Under the
terms of the Company's Articles of Association, sums standing to the credit of
the capital reserve are available for distribution only by way of redemption or
purchase of any issue of the Company's own shares. The Company may only
distribute in this way ``realised'' profits, which comprise net gains less
losses on the realisation of investments together with changes in the fair
value of investments that are considered to be readily convertible into cash
without accepting adverse terms.

(iv) Revenue Reserve: The Revenue Reserve comprises accumulated undistributed
revenue profits available for distribution as dividends.

Rates of Exchange

Transactions in foreign currencies are translated into sterling at the rate of
exchange ruling on the date of each transaction. Foreign currency assets or
liabilities at the balance sheet date are translated into sterling at the rates
of exchange ruling on that date. Realised profits or losses on exchange,
together with differences arising on the translation of foreign currency assets
or liabilities, are taken to the capital column of the Statement of
Comprehensive Income.

These accounts are presented in pounds sterling, as this is the principal
currency in which the Group's transactions are undertaken and is therefore
considered to be the functional currency of the Group.

Derivative Financial Instruments

The Group's activities expose it primarily to the financial risks of changes in
market prices and interest rates. The Company and its subsidiary may enter into
derivative transactions including futures, swaps, quoted options on shares held
within the portfolio, or on indices, for the purpose of providing protection
against falls in the capital values of holdings. The Group does not use
derivative contracts for speculative purposes.

The use of financial derivatives is subject to the Group's investment policy as
approved by shareholders.

The Manager consults with the Board on derivative investment strategies and
their implementation is closely monitored.

A derivative instrument is considered to be used for hedging purposes when it
alters the market risk profile of an existing underlying exposure of the Group.
The use of financial derivatives by the Group does not qualify for hedge
accounting. Derivatives are held at fair value and changes in the fair value of
derivative instruments are recognised in the Statement of Comprehensive Income
as they arise. If capital in nature, the associated change in value is
presented in the capital column of the Statement of Comprehensive Income.

Segmental Reporting

The Group has adopted IFRS 8, `Operating Segments' for the first time,
replacing the previous reporting under IAS 14, `Segment Reporting'. Under IFRS
8, operating segments are considered to be components of an entity about which
separate financial information is available that is evaluated regularly by the
chief operating decision maker (the Manager, with oversight from the Board) in
deciding how to allocate resources and in assessing performance. The Directors
are of the opinion that the Group has two operating segments, details of which
are disclosed in note 25.

The Group primarily invests in equity and debt related securities, issued by
companies operating and generating revenue in a single region, the United
Kingdom, therefore no geographical segmental analysis is provided.

----------

                                                          Annual Report Page 46

1. Accounting Policies (continued)

Accounting Standards

(a) Standards, amendments and interpretations becoming effective in the year to
30 June 2010:

- IAS 1 (Revised), `Presentation of Financial Statements'. Requires the
separate presentation of changes in equity attributable to the owners (equity
shareholders) and other non-owner changes. Non-owner changes are required to be
shown in a performance statement, which can either comprise a statement of
comprehensive income or an income statement together with a statement of
comprehensive income. The Group has applied IAS 1 (revised) from 1 July 2009
and has elected to present solely a statement of comprehensive income. Where an
entity restates or reclassifies comparative information, they are also required
to present a restated balance sheet as at the beginning of the comparative
period. The adoption of this revised standard has not resulted in a significant
change to the presentation of the Group's performance statement, as the Group
has no elements of comprehensive income not previously included in its Income
Statement.

- IFRS 7 (Amendment), `Financial Instruments: Disclosures'. Introduces new
disclosure requirements, whereby financial instruments must be categorised
under a three-level fair value hierarchy. A reconciliation is also required for
any investments categorised as Level 3. The additional disclosures resulting
from this amendment have been included in Notes 10 and 11 on pages 51 and 52.

- IFRS 8, `Operating Segments'. Replaces IAS 14 and aligns segment reporting
with the requirements of the US standard SFAS 131. The new standard requires a
`management approach' under which segment information is presented on the same
basis as that used for internal reporting purposes. The adoption of this
standard has not had a significant effect.

- IAS 23 (Amendment), `Borrowing Costs'. Requires an entity to capitalise
borrowing costs directly attributable to the acquisition, construction or
production of a qualifying asset. Not currently relevant to the Group, which
has no qualifying assets.

- IAS 27 (revised), `Consolidated and separate financial statements'.
Introduces changes to the accounting for transactions with non-controlling
interests (minority interests), the accounting for a loss of control and the
presentation of non-controlling interests in consolidated financial statements.
Adoption did not have any impact on the Group's financial statements.

- IAS 32 (amendment), `Financial Instruments: Presentation' and IAS 1
(amendment), `Presentation of financial statements - Puttable financial
instruments and obligations arising on liquidation'. Provides exemptions from
financial liability classification for (a) puttable financial instruments that
meet certain conditions; and (b) certain instruments, or components of
instruments, that impose on the entity an obligation to deliver to another
party a pro rata share of the net assets of the entity only on liquidation.
Adoption did not have any impact on the Group's financial statements.

- IAS 39 (Amendment), `Financial Instruments: Recognition and Measurement'.
Permits an entity to reclassify particular financial assets in some
circumstances and the definition of financial asset or liability at fair value
through profit or loss as it relates to items that are held for trading was
amended. Adoption did not have a significant impact on the Group's financial
statements.

(b) Standards, amendments and interpretations to existing standards that become
effective in future accounting periods and have not been adopted early by the
Group or Company:

- IAS 24 (revised), `Related Party Disclosures' (effective for financial
periods beginning on or after 1 January 2011, subject to EU endorsement).
Revises the definition of related parties. Unlikely to have a significant
effect.

- Improvements to IFRS' were issued in May 2008 and April 2009 and comprise
numerous amendments to IFRS that result in accounting changes for presentation,
recognition or measurement purposes as well as terminology or editorial
amendments related to a variety of individual standards. Most of the amendments
are effective for annual periods beginning on or after 1 July 2009 and 1 July
2010 with earlier application permitted. No material changes to accounting
policies are expected as a result of these amendments.

----------

                                                          Annual Report Page 47

1. Accounting Policies (continued)

Accounting Standards (continued)

(c) The following standards, amendments and interpretations to existing
standards become effective in future accounting periods, but are not relevant
for the Group's operations:

- IFRS 1 (amendment), `First-time Adoption of International Financial Reporting
Standards' and `Additional exemptions for first-time adopters' (effective from
1 January 2010).

- IFRS 2 (amendment), `Group cash-settled share-based payment transactions'
(effective from 1 January 2010).

- IFRS 5 (amendment), `Non-current Assets Held for Sale and Discontinued
Operations'.

- IAS 17 (amendment), Leases.

- IAS 32 (amendment), `Financial Instruments: Presentation' - Amendments
relating to classification of rights issues..

2. Dividends and Other Income

                                                             30June      30June
                                                                               
                                                               2010        2009
                                                                               
                                                              £'000       £'000
                                                                               
Revenue:                                                                       
                                                                               
Income from investments held at fair value through                             
profit or loss:                                                                
                                                                               
UK dividends                                                    868       1,035
                                                                               
Overseas dividends                                              233         223
                                                                               
Stock dividends                                                  25           -
                                                                               
Interest on debt securities                                     110         112
                                                                               
                                                              1,236       1,370
                                                                               
Other income:                                                                  
                                                                               
Interest on deposits                                              -          31
                                                                               
VAT reclaim interest received                                     -         296
                                                                               
Underwriting commission                                          66          81
                                                                               
                                                              1,302       1,778
                                                                               
Capital:                                                                       
                                                                               
Special dividends allocated to capital                            5          32
                                                                               
                                                              1,307       1,810

3. Gains/(Losses) on Investments held at Fair Value

                                                             30June      30June
                                                                               
                                                               2010        2009
                                                                               
                                                              £'000       £'000
                                                                               
Gains on non-current asset investments                        9,214       5,387
                                                                               
Gains/(losses) on investments held for trading (see           1,267        (51)
note 11)                                                                       
                                                                               
                                                             10,481       5,336

4. Management Fees

                                                             30June      30June
                                                                               
                                                               2010        2009
                                                                               
                                                              £'000       £'000
                                                                               
Management fees                                                 447         325
                                                                               
Value-added tax recovered                                         -        (97)
                                                                               
                                                                447         228
                                                                               
Allocated:                                                                     
                                                                               
Revenue                                                         112         228
                                                                               
Capital                                                         335           -
                                                                               
                                                                447         228

With effect from 1 July 2009 management fees have been allocated 75% to capital
and 25% to revenue. Prior to 1 July 2009 all such costs were allocated to
revenue.

----------

                                                          Annual Report Page 48

5. Other Fees and Expenses

                                                             30June      30June
                                                                               
                                                               2010        2009
                                                                               
                                                              £'000       £'000
                                                                               
Revenue:                                                                       
                                                                               
Secretarial fees                                                 60          60
                                                                               
Directors' fees                                                  99          93
                                                                               
Auditors' fees:                                                                
                                                                               
For audit of the annual accounts                                 23          21
                                                                               
For other services*                                               9          11
                                                                               
General expenses                                                212         200
                                                                               
Value-added tax                                                  38          33
                                                                               
                                                                441         418
* Paid to the auditors for quarterly certification of the calculation of
interest in respect of the Equity-Linked loan stock and quarterly certification
of the Ordinary share redemption calculation.

Capital:                                                                       
                                                                               
Purchase transaction costs on non-current asset                 179         203
investments                                                                    
                                                                               
Sales transaction costs on non-current asset                    105          64
investments                                                                    
                                                                               
                                                                284         267

6. Interest Payable

                                                             30June      30June
                                                                               
                                                               2010        2009
                                                                               
                                                              £'000       £'000
                                                                               
Short-term borrowing facility                                    43          51
                                                                               
Equity-Linked Unsecured Loan Stock 2004/09                        6          16
                                                                               
                                                                 49          67
                                                                               
Allocated:                                                                     
                                                                               
Revenue                                                          12          67
                                                                               
Capital                                                          37           -
                                                                               
                                                                 49          67

With effect from 1 July 2009 interest charged on borrowings has been allocated
75% to capital and 25% to revenue. Prior to 1 July 2009 all such costs were
allocated to revenue.

The loan stock was redeemed on 18 December 2009.

7. Taxation

                                                             30June      30June
                                                                               
                                                               2010        2009
                                                                               
                                                              £'000       £'000
                                                                               
(a) Analysis of tax charge for the year:                                       
                                                                               
Overseas tax                                                     13          10
                                                                               
Corporation tax                                                  43           -
                                                                               
                                                                 56          10

----------

                                                          Annual Report Page 49

7. Taxation (continued)

                                                             30June      30June
                                                                               
                                                               2010        2009
                                                                               
                                                              £'000       £'000
                                                                               
(b) Factors affecting current tax charge for the year:                         
                                                                               
The charge for the year can be reconciled to the                               
profit per the Statement of Comprehensive Income as                            
follows:                                                                       
                                                                               
Net profit before taxation                                   10,503       6,272
                                                                               
Tax at the UK corporation tax rate of 28% (2009: 28%)         2,941       1,756
                                                                               
Effects of:                                                                    
                                                                               
Income not subject to corporation tax                         (296)       (284)
                                                                               
Gains and losses on investments that are not taxable        (2,580)     (1,508)
                                                                               
Expenses and finance costs not deductible for tax                83          76
purposes                                                                       
                                                                               
Utilisation of losses brought forward                          (92)        (40)
                                                                               
Overseas tax                                                     13          10
                                                                               
Tax relief on overseas tax suffered                             (3)           -
                                                                               
Marginal tax relief available for subsidiary                   (10)           -
                                                                               
Total tax for the year                                           56          10
                                                                               
(c) There is an unrecognised deferred tax asset                                
comprising:                                                                    
                                                                               
Unutilised management expenses                                2,252       2,261
                                                                               
Non-trading loan relationship deficits                        1,005         993
                                                                               
Trading losses                                                    -          87
                                                                               
                                                              3,257       3,341

It is unlikely that the Company will generate sufficient taxable profits in the
future to utilise these expenses and deficits and therefore no deferred tax
asset has been recognised.

Due to the Company's status as an investment trust and the intention to
continue meeting the conditions required to obtain approval of such status in
the foreseeable future, the Company has not provided tax on any capital gains
arising on the revaluation or disposal of investments.

8. Dividends on Ordinary shares

                                                             30June      30June
                                                                               
                                                               2010        2009
                                                                               
                                                              £'000       £'000
                                                                               
Amounts recognised in these Accounts as distributions           503         209
to                                                                             
                                                                               
equity holders in the year:                                                    
                                                                               
Interim dividend declared in respect of the year to 30                         
June 2009 of 4.30p                                                             
                                                                               
per share paid on 2 October 2009 on 11,705,040 shares                          
(2009: 1.50p paid                                                              
                                                                               
on 17 October 2008 on 13,913,120 shares).                                      
                                                                               
Special dividend of 2.00p paid on 2 October 2009 on             234         255
11,705,040                                                                     
                                                                               
shares (2009: 2.00p paid on 31 March 2009 on                                   
12,763,685 shares)                                                             
                                                                               
                                                                737         464

The declared interim dividend in respect of the year to 30 June 2010, which is
in lieu of a final dividend, has not been included as a liability in these
Accounts.

----------

                                                          Annual Report Page 50

8. Dividends on Ordinary shares (continued)

The total dividends payable in the respect of the financial year, which is the
basis on which the requirements of Section 1159 Corporation Tax Act 2010 are
considered, is set out below:

                                                             30June      30June
                                                                               
                                                               2010        2009
                                                                               
                                                              £'000       £'000
                                                                               
Interim dividend of 5.375p (2009: 4.30p) per share              595         503
payable on                                                                     
                                                                               
30 September 2010 on 11,073,040 (2009: 11,705,040)                             
shares                                                                         
                                                                               
Special dividend of 2.00p per share paid on 2 October             -         234
2009 on 11,705,040                                                             
                                                                               
shares                                                                         
                                                                               
                                                                595         737

9. Earnings per Ordinary Share

(i) The Total profit per Ordinary share of 90.31p (2009: 48.32p) is calculated
on the profit to equity shareholders of £10,447,000 (2009: £6,262,000) and
11,568,620 (2009: 12,959,428) Ordinary shares, being the weighted average
number of shares in issue during the year.

(ii) The Revenue profit of 16.84p (2009: 7.75p) per Ordinary share is
calculated on the revenue profit to equity shareholders of £1,948,000 (2009: £
1,004,000,000) and the weighted average number of shares in issue during the
year as per (i) above.

(iii) The Capital profit of 73.47p (2009: 40.57p) per Ordinary share is
calculated on the capital profit to equity shareholders of £8,499,000 (2009: £
5,258,000) and the weighted average number of shares in issue during the year
as per (i) above.

10. Non-Current Asset Investments Held at Fair Value

                                                             30June      30June
                                                                               
                                                               2010        2009
                                                                               
                                                          Group and   Group and
                                                                               
                                                            Company     Company
                                                                               
                                                              £'000       £'000
                                                                               
(i) Summary of Movements:                                                      
                                                                               
Opening valuation                                                              
                                                                               
Opening book cost                                            59,123      61,575
                                                                               
Opening fair value adjustment                              (11,513)    (11,728)
                                                                               
                                                             47,610      49,847
                                                                               
Movements in the year:                                                         
                                                                               
Acquisitions at cost                                         33,789      34,500
                                                                               
Proceeds of disposals                                      (42,912)    (42,124)
                                                                               
Net profit realised on disposals                              7,076       5,172
                                                                               
Increase in fair value adjustment                             2,138         215
                                                                               
Closing valuation                                            47,701      47,610
                                                                               
Closing book cost                                            57,076      59,123
                                                                               
Closing fair value adjustment                               (9,375)    (11,513)
                                                                               
Closing valuation                                            47,701      47,610

With the exception of a small number of suspended or delisted (Level 3)
investments all of the Group's investments are either listed or are quoted on
the Alternative Investment Market in the UK. All investments are included in
the balance sheet at fair value. The Group's equity investments are registered
in the name of nominees of, and held to the order of, The Bank of New York
Mellon, as custodians to the Company.

----------

                                                          Annual Report Page 51

10. Non-Current Asset Investments Held at Fair Value (continued)

(ii) Classification under fair                                                 
value hierarchy                                                                
                                                                               
                                         Total    Level 1    Level 2    Level 3
                                                                               
                                         £'000      £'000      £'000      £'000
                                                                               
Equity investments                      46,730     46,652          -         78
                                                                               
Fixed interest investments                 971        921          -         50
                                                                               
                                        47,701     47,573          -        128

Categorisation within the hierarchy has been determined on the basis of the
lowest level of input that is significant to the fair value measurement of the
relevant asset as follows:

Level 1 - valued using quoted prices in active markets for identical assets.

Level 2 - valued by reference to valuation techniques using observable inputs
other than quoted prices included within Level 1.

Level 3 - valued by reference to valuation techniques using inputs that are not
based on observable market data as explained in the accounting policies note on
page 44.

There are not considered to be other reasonably possible valuations.

There have been no transfers during the year between Levels 1 and 2. A
reconciliation of fair value measurements in Level 3 is set out below.

(iii) Level 3 investments at fair value through profit                    Total
or loss                                                                        
                                                                               
                                                                           2010
                                                                               
                                                                          £'000
                                                                               
Opening balance                                                             226
                                                                               
Acquisitions                                                                 55
                                                                               
Disposal proceeds                                                          (50)
                                                                               
Transfers into Level 3 (from Level 1)                                       785
                                                                               
Transfers out of Level 3                                                      -
                                                                               
Total gains/(losses) included in the Statement of                              
Comprehensive Income                                                           
                                                                               
- on assets sold                                                          (907)
                                                                               
- on assets held at the year end                                             19
                                                                               
Closing balance                                                             128

11. Current Asset Investments Held for Trading

                                                             30June      30June
                                                                               
                                                               2010        2009
                                                                               
                                                              Group       Group
                                                                               
                                                              £'000       £'000
                                                                               
(i) Summary of Movements:                                                      
                                                                               
Quoted Equity Investments:                                                     
                                                                               
Opening valuation                                                              
                                                                               
Opening book cost                                             1,422         829
                                                                               
Opening fair value adjustment                                 (254)       (205)
                                                                               
                                                              1,168         624
                                                                               
Movements in the year:                                                         
                                                                               
Acquisitions at cost                                          6,132      10,370
                                                                               
Proceeds of disposals                                       (8,256)     (9,892)
                                                                               
Net profit realised on disposals                              1,093         115
                                                                               
Increase/(decrease) in fair value adjustment                    174        (49)
                                                                               
Closing valuation                                               311       1,168
                                                                               
Closing book cost                                               391       1,422
                                                                               
Closing fair value adjustment                                  (80)       (254)
                                                                               
Closing valuation                                               311       1,168

----------

                                                          Annual Report Page 52

11. Current Asset Investments Held for Trading (continued)

                                                             30June      30June
                                                                               
                                                               2010        2009
                                                                               
                                                              £'000       £'000
                                                                               
Gains/(losses) on investments held for trading:                                
                                                                               
On equity investments:                                                         
                                                                               
Net profit realised on disposals                              1,093         115
                                                                               
Increase/(decrease) in fair value adjustment                    174        (49)
                                                                               
On derivative positions:                                                       
                                                                               
Realised loss on closed positions                                 -       (117)
                                                                               
Total gain/loss on investments held for trading               1,267        (51)

The investments held by the dealing subsidiary (Gartmore GO Dealing Limited)
have been designated as held for trading and valued at fair value through
profit or loss.

(ii) Classification under fair                                                 
value hierarchy                                                                
                                                                               
                                         Total    Level 1    Level 2    Level 3
                                                                               
                                         £'000      £'000      £'000      £'000
                                                                               
Equity investments                         301        301          -          -
                                                                               
Fixed interest investments                  10          -          -         10
                                                                               
                                           311        301          -         10

There have been no transfers during the year between Levels 1 and 2. A
reconciliation of fair value measurements in Level 3 is set out below.

(iii) Level 3 investments at fair value through profit                    Total
or loss                                                                        
                                                                               
                                                                          £'000
                                                                               
Opening balance                                                              13
                                                                               
Acquisitions                                                                  -
                                                                               
Disposal proceeds                                                           (3)
                                                                               
Transfers into Level 3 (from Level 1)                                         -
                                                                               
Transfers out of Level 3                                                      -
                                                                               
Total gains/(losses) included in the Statement of                              
Comprehensive Income                                                           
                                                                               
- on assets sold                                                            (4)
                                                                               
- on assets held at the year end                                              4
                                                                               
Closing balance                                                              10

12. Investment in Subsidiary

Gartmore GO Dealing Limited

The Company owns the whole of the issued share capital (£2) of Gartmore GO
Dealing Limited, a dealing company registered in England and Wales.

                                                             30June      30June
                                                                               
                                                               2010        2009
                                                                               
                                                              £'000       £'000
                                                                               
Balance brought forward at 1 July                             1,037         945
                                                                               
Profit of subsidiary for the year                             1,227          92
                                                                               
Balance carried forward at 30 June                            2,264       1,037

----------

                                                          Annual Report Page 53

13. Other Receivables

                                       30 June    30 June    30 June    30 June
                                                                               
                                          2010       2010       2009       2009
                                                                               
                                         Group    Company      Group    Company
                                                                               
                                         £'000      £'000      £'000      £'000
                                                                               
Accrued income                             198        198        203        202
                                                                               
Prepaid expenses                            17         17         11         11
                                                                               
Recoverable overseas tax                     4          4          2          2
                                                                               
                                           219        219        216        215

The carrying amounts of other receivables approximate their fair value. None of
the other receivables are past due or impaired.

14. Equity-Linked Unsecured Loan Stock 2004/09

                                                             30June      30June
                                                                               
                                                               2010        2009
                                                                               
                                                              £'000       £'000
                                                                               
Balance brought forward at 1 July                               299         411
                                                                               
Cost of loan stock repurchased                                (363)        (11)
                                                                               
Change in fair value                                             64       (101)
                                                                               
Balance carried forward at 30 June                                -         299

15. Bank Loan

                                       30 June    30 June    30 June    30 June
                                                                               
                                          2010       2010       2009       2009
                                                                               
                                         Group    Company      Group    Company
                                                                               
                                         £'000      £'000      £'000      £'000
                                                                               
Due within one week                          -          -        900        900

The Company has a committed facility to £3 million and an uncommitted facility
to £3 million, both provided by The Bank of New York Mellon. Interest is
charged at the prevailing interbank market rates, plus a contractually agreed
margin. The Company also has an overdraft facility of £100,000 with Royal Bank
of Scotland plc. Interest on any overdraft is charged at 1.5% over the base
rate set by the Bank of England.

16. Other Payables

                                       30 June    30 June    30 June    30 June
                                                                               
                                          2010       2010       2009       2009
                                                                               
                                         Group    Company      Group    Company
                                                                               
                                         £'000      £'000      £'000      £'000
                                                                               
Accrued expenses                           158        158        149        149
                                                                               
Corporation tax payable                     43          -          -          -
                                                                               
                                           201        158        149        149

The carrying amounts of other payables approximate their fair value.

17. Non-Current Liabilities

                                                             30June      30June
                                                                               
                                                               2010        2009
                                                                               
                                                              £'000       £'000
                                                                               
Non-Equity Management Shares Authorised and Issued                             
                                                                               
50,000 Management shares of £1                                   50          50
                                                                               
Paid up                                                                        
                                                                               
50,000 Management shares of £1, one quarter paid                 13          13

Management shares are entitled to receive a fixed cumulative dividend equal to
0.00001p per annum, payable annually in arrears on 30 June.

The Management shares confer the right to be paid out of the assets of the
Company available for distribution the capital paid up on such shares, without
any right to participate in any surplus remaining following payment of such
amount.

----------

                                                          Annual Report Page 54

18. Share Capital

                                                         Allotted, Called-up,  
                                                        Issued and Fully-paid  
                                                                               
                                                             30June     30 June
                                                                               
                                                               2010        2009
                                                                               
                                                              £'000       £'000
                                                                               
11,073,864 (2009: 11,705,040) Ordinary shares of                  3           3
0.025p                                                                         

Shareholders can request the redemption of Ordinary shares on a quarterly
basis, subject to certain limitations and the Directors exercising their
discretion. All movements in share capital are presented in the Statement of
Changes in Equity.

In respect of the four quarterly share redemption opportunities provided to
shareholders in the financial year, the Directors agreed to the following
redemptions:

15 July 2009 843,012 Ordinary shares

14 October 2009 2,428 Ordinary shares

20 January 2010 14,200 Ordinary shares

14 April 2010 616,976 Ordinary shares

The redemptions in July and October were matched with buyers. The remaining
631,176 shares were redeemed at a cost of £3,304,000.

19. Special Distributable Reserve

                                                             30June      30June
                                                                               
                                                               2010        2009
                                                                               
                                                              £'000       £'000
                                                                               
Balance brought forward carried forward                      51,523      51,523

20. Capital redemption Reserve

                                                             30June     30 June
                                                                               
                                                               2010        2009
                                                                               
                                                              £'000       £'000
                                                                               
Balance brought forward at 1 July                                 1           -
                                                                               
Redemption of 631,176 (2009: 2,726,129) Ordinary                  -           1
shares                                                                         
                                                                               
Balance carried forward at 30 June                                1           1

21. Retained Earnings

                                               Capital      Revenue    Retained
                                                                               
                                               reserve      reserve    earnings
                                                                               
                                                 £'000        £'000       £'000
                                                                               
Group:                                                                         
                                                                               
At 1 July 2008                                 (2,494)        2,059       (435)
                                                                               
Redemption of Ordinary shares                  (8,796)            -     (8,796)
                                                                               
Profit for the year to 30 June 2009              5,258        1,004       6,262
                                                                               
Equity dividends paid on Ordinary shares             -        (464)       (464)
                                                                               
At 30 June 2009                                (6,032)        2,599     (3,433)
                                                                               
Redemption of Ordinary shares                  (3,304)            -     (3,304)
                                                                               
Profit for the year to 30 June 2010              8,499        1,948      10,447
                                                                               
Equity dividends paid on Ordinary shares             -        (737)       (737)
                                                                               
At 30 June 2010                                  (837)        3,810       2,973
                                                                               
Company:                                                                       
                                                                               
At 1 July 2008                                 (1,549)        1,114       (435)
                                                                               
Redemption of Ordinary shares                  (8,796)            -     (8,796)
                                                                               
Profit for the year to 30 June 2009              5,350          912       6,262
                                                                               
Equity dividends paid on Ordinary shares             -        (464)       (464)
                                                                               
At 30 June 2009                                (4,995)        1,562     (3,433)
                                                                               
Redemption of Ordinary shares                  (3,304)            -     (3,304)
                                                                               
Profit for the year to 30 June 2010              9,726          721      10,447
                                                                               
Equity dividends paid on Ordinary shares             -        (737)       (737)
                                                                               
At 30 June 2010                                  1,427        1,546       2,973

----------

                                                          Annual Report Page 55

21. Retained Earnings (continued)

At the year-end 40% (2009: 40%) of the portfolio was considered to be
sufficiently liquid to be regarded as readily convertible into cash.
Accordingly, the split of capital reserve in order to determine distributable
realised profits is as follows:

                                       30 June    30 June    30 June    30 June
                                                                               
                                          2010       2010       2009       2009
                                                                               
                                         Group    Company      Group    Company
                                                                               
                                         £'000      £'000      £'000      £'000
                                                                               
Capital reserve - distributable                                                
                                                                               
in respect of investments sold           8,618     10,802      5,731      6,518
                                                                               
in respect of investments held         (3,750)    (3,750)    (4,605)    (4,605)
                                                                               
Capital reserve -                      (5,705)    (5,625)    (7,158)    (6,908)
non-distributable                                                              
                                                                               
                                         (837)      1,427    (6,032)    (4,995)

22. Net Asset Value per Ordinary share

The Net Asset Value per Ordinary share is calculated on attributable assets of
£54,500,000 (2009: £48,094,000) and 11,073,864 (2009: 11,705,040) Ordinary
shares in issue at the year-end.

23. Notes to the Cash Flow Statement

Cash and cash equivalents comprise cash at bank and other short-term highly
liquid investments with an original maturity of three months or less.

Purchases and sales of investments are considered to be operating activities of
the Company, given its purpose, rather than investing activities. However, the
cash flows associated with these activities are presented below:

                                       30 June    30 June    30 June    30 June
                                                                               
                                          2010       2010       2009       2009
                                                                               
                                         Group    Company      Group    Company
                                                                               
                                         £'000      £'000      £'000      £'000
                                                                               
Proceeds on disposal of fair            50,671     42,228     52,049     42,344
value                                                                          
                                                                               
through profit or loss                                                         
investments                                                                    
                                                                               
Purchases of fair value through         40,535     34,253     44,972     34,752
profit                                                                         
                                                                               
or loss investments                                                            

24. Related Party Transactions

The investment manager, Gartmore Investment Limited (GIL), is regarded as a
related party of the Company.

During the year, total management fees of £447,000 (2009: £325,000) and
secretarial fees of £70,000 (2009: £70,000), including value-added tax, were
payable to GIL for the provision of investment management and secretarial
services to the Company.

The basis of management fees charged is disclosed in the Directors' Report.

At the balance sheet date, management and secretarial fees totalling £69,000
(2009: £61,000) and £12,000 (2009: £12,000) respectively, were accrued.

The Company has also financed and been financed by the trading activity of its
subsidiary, Gartmore GO Dealing Limited, during the years to 30 June 2010 and
2009. In addition, the Company has provided group relief from tax of £740,000
(2009: £nil) to the subsidiary and has also borne audit fees amounting to £500
(2009: £500). At 30 June 2010, there was an outstanding balance of £1,871,000
due to (2009: £324,000 due from) the subsidiary.

The compensation payable to key management personnel comprised £99,058 (2009: £
92,500) paid by the Company to the Directors in respect of services to the
Company as shown in the Directors' Remuneration Report on page 33.

----------

                                                          Annual Report Page 56

25. Operating Segments

The directors consider that the Group has two operating segments, being the
parent Company, Gartmore Growth Opportunities plc, which invests in shares and
securities for capital appreciation in accordance with the Company's published
investment objective, and its wholly owned subsidiary, Gartmore GO Dealing
Limited, which trades in securities to enhance Group returns. Discrete
financial information for these sectors is reviewed regularly by the Manager
and the Board who allocate resources and assess performance.

Segment financial information                                30June      30June
                                                                               
                                                               2010        2009
                                                                               
                                                              £'000       £'000
                                                                               
External Revenues:                                                             
                                                                               
Parent Company                                               10,518       7,059
                                                                               
Subsidiary                                                    1,270          92
                                                                               
Total Income                                                 11,788       7,151
                                                                               
Net Profit:                                                                    
                                                                               
Parent Company                                                9,220       6,170
                                                                               
Subsidiary                                                    1,227          92
                                                                               
Total Comprehensive Income                                   10,447       6,262
                                                                               
Total Assets:                                                                  
                                                                               
Parent Company                                               56,542      49,740
                                                                               
Subsidiary                                                    2,307       1,511
                                                                               
Consolidation adjustments                                   (4,135)     (1,361)
                                                                               
Group Total Assets                                           54,714      49,890

26. Financial Instruments: Risk Management

The Directors manage investment risk principally through setting an investment
policy (see page 15) (that is approved by shareholders), by contracting
management of the Group's investments to an investment manager under a contract
which incorporates appropriate duties and restrictions and by monitoring
performance in relation to these. The Board's relationship with the investment
manager is discussed on pages 27 and 28 of this Report. Internal control and
the Board's approach to risk is discussed on pages 30 and 31. There have been
no material changes to the management or nature of the Group's investment risks
from the prior year.

The main risks arising from the Group's pursuit of its investment objective
(see page 17) are market risk, credit risk and liquidity risk. The effects of
these can also be increased by gearing.

Market risk

Market risk comprises three types of risk: market price risk, interest rate
risk and currency risk.

Market price risk:

The Company is an investment company and as such its performance is dependent
on the valuation of its investments. Consequently market price risk is the most
significant risk that the Group is exposed to. The fair value of the
investments in the portfolio is normally their bid-market price. Market price
of investee companies' shares is subject to their performance, supply and
demand for the shares and investor sentiment regarding the companies, or their
industry sectors.

The Company's investment objective and policy require that it invests primarily
in the shares of quoted UK smaller companies. The prices of shares of smaller
companies as a whole tend to be more volatile than those of larger companies.

The Company normally holds around 200 stocks which significantly spreads the
risk of individual investments performing poorly. The largest individual stock
at the year-end represented just 2.8% of the value of the portfolio.

----------

                                                          Annual Report Page 57

26. Financial Instruments: Risk Management (continued)

The level of risk, relative to the benchmark, is increased by holding stocks
not represented in the benchmark index and by over or underweighting industry
sectors relative to the benchmark, which tends to concentrate risk in those
over and underweighted areas. At the year-end approximately 58% by value of
stocks held were not represented in the benchmark index. These stocks were
listed stocks that were too small to be included in the index, bonds or were
AIM quoted stocks. As can be seen from the chart on page 11 the largest
industry sector weighting variances were in the Financials, Consumer Services
(underweighted), Technology and Health Care (overweighted) sectors.

Although the net movement in the benchmark index over the 10 years to 30 June
2010 was a drop of 33.5%, the annual movement over that period averaged 18.3%.
This illustrates the volatility of this sector and indicates that it could move
by a similar amount in the forthcoming financial year. Accordingly, to
illustrate the Group's sensitivity to market prices, an 18.3% change to the
market value of the equity portfolio at 30 June 2010 would generate a
corresponding increase or decrease in the net asset value per share of around
15.7% and because of the effect on the management fee, would have a converse
effect on annual earnings per share of around 0.1p. The effect on capital
return would be materially the same as the effect on net assets.

The Company's trading subsidiary, Gartmore GO Dealing Limited, has similar
risks to its parent in respect of equity holdings in its trading portfolio
which are also valued at bid-market prices. Gartmore GO Dealing seeks to make
returns from short-term positions and the exposure to market price risk is
limited by this short-term nature of the holdings and because the trading
subsidiary portfolio is limited to 15% of Group Total Assets.

Both the Company and the trading subsidiary can also invest in derivatives,
although none were held during the year.

At the year-end the Group's assets exposed to market price risk were as
follows:

                                       30 June    30 June    30 June    30 June
                                                                               
                                          2010       2010       2009       2009
                                                                               
                                         Group    Company      Group    Company
                                                                               
                                         £'000      £'000      £'000      £'000
                                                                               
Non-current asset investments at        47,701     47,701     47,610     47,610
fair                                                                           
                                                                               
value through profit or loss                                                   
                                                                               
Current asset investments held             311          -      1,168          -
                                                                               
for trading                                                                    
                                                                               
                                        48,012     47,701     48,778     47,610

The level of assets exposed to market price risk reduced by approximately 1.4%
during the year, through a combination of changes in the market prices of
investments held, reductions in loan stock and bank gearing and increases in
short term deposits.

Interest rate risk

The Group can draw on flexible loan facilities, the interest rates for which
are set at the time of drawing. Since cash positions are constantly monitored
and drawings on the loan facilities are normally for short rolling periods the
risk of exposure to excessive interest costs is limited.

The maximum level of drawings on the flexible bank loan facilities in the year
was £6.0 million (2009: £5.1 million).

No hedging of the interest rates paid on the Group's financial liabilities is
undertaken.

The Group also earns interest on its cash and short-term deposits. Fixed
deposits are normally placed on a one week rolling basis.

----------

                                                          Annual Report Page 58

26. Financial Instruments: Risk Management (continued)

At the year-end financial assets and liabilities exposed to interest rates were
as follows:

                                       30 June    30 June    30 June    30 June
                                                                               
                                          2010       2010       2009       2009
                                                                               
                                         Group    Company      Group    Company
                                                                               
                                         £'000      £'000      £'000      £'000
                                                                               
Financial Assets:                                                              
                                                                               
Cash balances                            2,411      2,286        216         61
                                                                               
Short term deposits                      3,000      3,000          -          -
                                                                               
Financial Liabilities:                                                         
                                                                               
Equity-Linked Unsecured Loan                 -          -      (299)      (299)
Stock 2004/09 (redeemed)                                                       
                                                                               
Bank loans                                   -          -      (900)      (900)

The weighted average rate of interest paid on the loan stock in the year was
3.3% (2009: 5.9%) and on bank loans under the Company's flexible loan
facilities was 1.6% (2009: 3.1%).

The weighted average rate of interest earned on short-term deposits during the
year was 0.5% (2009: nil).

Although there were no drawings on bank loan facilities at the year-end this
may not be representative of the exposure to interest rates in the year ahead
since the level of borrowings and/or cash held during the year will be affected
by the strategy being followed in response to the Board's and Manager's
perception of market prospects and the investment opportunities available at
any particular time. During the year the level of financial assets exposed to
interest obligations fluctuated between zero and £3 million. The cost of
borrowing compared with the anticipated returns from investment is considered
as part of the investment management process. To illustrate the potential
sensitivity to changes in interest rates, if the bank loan facilities were
fully extended to their £6 million limit a change of 0.5% in the rate of
interest charged would, over the course of a year, amount to £30,000, less than
0.1% of year-end net assets.

Currency risk:

The Group is not subject to a material level of currency risk since, with very
occasional exceptions, all of its investments are denominated in sterling.

Credit risk

Credit risk is the exposure to loss from the failure of a counterparty to
deliver securities or cash for acquisitions or disposals of investments or to
repay deposits. The Company and its subsidiary manage credit risk by using
brokers from a database of approved brokers who are subject to independent
review of key criteria by the Manager's Counterparty Management Committee and
by dealing through Gartmore Investment Limited with banks approved by the
Financial Services Authority. During the year all deposits placed by the
Company were with banks that had ratings of A or higher. The subsidiary does
not normally hold material levels of cash.

The maximum exposure to credit risk at 30 June 2010 was as follows:

                                       30 June    30 June    30 June    30 June
                                                                               
                                          2010       2010       2009       2009
                                                                               
                                         Group    Company      Group    Company
                                                                               
                                         £'000      £'000      £'000      £'000
                                                                               
Balances due from brokers                1,072      1,072        680        493
                                                                               
Due from subsidiary                          -          -          -        324
                                                                               
Other debtors                               21         21         13         13
                                                                               
Accrued income                             198        198        203        202
                                                                               
Cash and short term deposits             5,411      5,286        216         61
                                                                               
                                         6,702      6,577      1,112      1,093

All of the above financial assets are current, their fair values are considered
to be the same as the values shown and the likelihood of a material credit
default is considered to be low.

----------

                                                          Annual Report Page 59

26. Financial Instruments: Risk Management (continued)

Liquidity risk

Liquidity risk is the possibility of failure of the Group to realise sufficient
assets to meet its financial liabilities. The Group minimises this risk by
investing only in listed or quoted securities and by ensuring that it has
adequate cash and credit facilities in place to support normal operations. The
Group's liquidity is held primarily in sterling, almost entirely on
interest-bearing current accounts or short-term deposits in the money market.

As noted above, deposits are rarely fixed for terms in excess of one week. In
addition to using shareholders' funds to finance investments the Group can also
invest funds available from the management shares and from drawings on its
flexible loan facilities (gearing). The Group's short-term borrowing facilities
comprise a committed loan facility of £3,000,000 and an uncommitted facility of
a further £3,000,000 that can be drawn to meet liquidity requirements arising
either from operations or investment strategy. Cash requirements are monitored
constantly. Drawings on the credit facilities are normally arranged on a
rolling weekly basis.

At 30 June 2010 financial liabilities comprised:

                                       30 June    30 June    30 June    30 June
                                                                               
                                          2010       2010       2009       2009
                                                                               
                                         Group    Company      Group    Company
                                                                               
                                         £'000      £'000      £'000      £'000
                                                                               
Due within 1 month:                                                            
                                                                               
Balances due to brokers                      -          -        435        285
                                                                               
Accrued expenses                           158        158        149        149
                                                                               
Bank loan                                    -          -        900        900
                                                                               
Equity-Linked Unsecured Loan                 -          -        299        299
Stock 2004/09*                                                                 
                                                                               
Due after 1 month and within 1                                                 
year:                                                                          
                                                                               
Due to subsidiary                            -      1,871          -          -
                                                                               
Corporation tax payable                     43          -          -          -
                                                                               
Due after 1 year:                                                              
                                                                               
Management shares                           13         13         13         13

The above liabilities are stated at fair value.

Gearing

Market risks can be amplified by gearing. As discussed above, in addition to
using shareholders' funds to finance investments the Group can also invest
funds available from the Management shares and from drawings on its loan
facilities. See the liquidity risk section above and the Business Review on
pages 17 and 18 for further information. Such gearing will exaggerate the
effect on net asset value of a change in the value of the portfolio. If the
Group's borrowing facilities were fully extended the bank gearing would amount
to 11.2% of net assets and in those circumstances a change of 10% in the value
of the portfolio would be expected to change the net asset value by
approximately 9.9%.

As noted on page 57 in the interest rate risk section, the level of borrowings
and/or cash held during the year will be affected by the strategy being
followed in response to the Board's and Manager's perception of market
prospects and the investment opportunities available at any particular time.

At the year-end there was no bank gearing (2009: £900,000, 1.9% of net assets).

----------

                                                          Annual Report Page 60

27. Capital

The Company's capital, or equity, is represented by its net assets which are
managed to achieve the Groups' investment objective set out on page 15.

The main risks to the Company's investments are shown in Note 26. Note 26 also
explains that the company is able to gear and that gearing will amplify the
effect on equity of changes in the value of the investment portfolio.

The Board can also manage the capital structure directly since it has
discretion to approve requests by shareholders to redeem their shares,
determines dividend payments and has taken the powers, which it is seeking to
renew, to issue and buy-back shares.

The Company is subject to externally imposed capital requirements with respect
to the obligation and ability to pay dividends by section 1159 Corporation Tax
Act 2010 and by the Companies Act, respectively, and with respect to the
availability of borrowing facilities, by the covenant imposed by The Bank of
New York Mellon (see page 16).

The Board regularly monitors, and has complied with, the externally imposed
capital requirements. This is unchanged from the prior year.

Total Equity at 30 June 2010, the composition of which is shown on the Balance
Sheet on page 39, was £54,500,000 (2009: £48,094,000).

28. Contingent Liabilities and Commitments

At 30 June 2010 the Group had potential commitments of £250,000 in respect of
exercise of warrants (2009: £183,000 re warrants and £150,000 in respect of a
placing). Of these, the commitments of the Company amounted to £195,000 (2009:
£128,000).

.

Gartmore Investment Limited

Corporate Company Secretary

8 September 2010


                                                                                                                       

a d v e r t i s e m e n t